How to Increase Your Customer’s Lifetime ValueJuly 6, 2020 | Weekly Marketing Tip
My wife and I are training for a five day backpacking trip in Colorado and we’ve been acquiring a lot of gear, which has sent us to REI multiple times. So far, I’m really impressed by REI’s marketing and content. In this week’s video I share a few REI inspired ideas on how to market to your existing customers so you can increase your customer lifetime value. Don’t miss out on easy opportunities to profitably increase your revenue.
Full transcript below.
How are you doing when it comes to marketing to your existing customers? Hi, my name is Steve Phipps, and this is your weekly marketing tip from Wayfind Marketing.
So, my wife and I are training for a backpacking trip in Colorado so we’re really excited. This is our first time that we’re going to be backpacking and we’re doing this as part of a leadership group, leadership training program, and we’ve been acquiring a lot of new gear and that includes buying some stuff over at REI. And so here in Memphis, REI opened a year or two ago, and great store, great resources, but they do a really nice job of marketing to their customers. And I mention this because, even just this past weekend, I’ve received multiple emails from them about their Fourth of July clearance sale, inviting me as a customer to come back and to continue to do business with them.
Well, I bring that up because a lot of times that’s an easy marketing opportunity that small businesses can miss. So think about it, in your business, are you continuing to market to your customers or are you just focusing on acquiring new customers? If you’re just focused on getting new customers in the door, you’re going to miss some opportunities.
Now, last week I talked a lot about creating great experiences that are memorable and shareable, but the other part of that is continuing to market to your customers. Stay in front of them. Introduce other services that they may not know about that they would find helpful.
And something to think about too from a metrics standpoint is what is your customer’s lifetime value? That’s an important number to know. So if your customer stays with you five years on average and they spend $1,000 a year, their lifetime value is $5,000. The question then is how do you increase that? How do you move that from $5,000 to $6,000? So if you could increase that by $1,000 and you have a large customer base, that can be a pretty significant revenue increase without having to go out and acquire new customers.
So, think about that. How are you marketing to your existing customers? Are there services that you can introduce and are you tracking that number, and when you do, when you start focusing on that, then you should see your revenue go up. You should see your profit go up as well because it’s always more cost-effective, it’s always more profitable to market to your existing customers who already know you, like you and trust you, than it is to go out and just get new customers. So, how can you market to your customers this week?