Boost Your LTV: Easily Detect Your VIP Customers Early On 🕵️‍♀️

Hey, LTV Aficionados!

This week was a wild one. We launched a new category at Jones Road (hi, Fragrance!), and I had the opportunity to meet a legend and one of the folks that inspired me to pursue a career in CX, Danny Meyer.

In case you missed last week’s newsie, I wrote about the lessons CPG can learn from hospitality. Danny’s book “Setting the Table” completely changed the way I saw experience. Meeting him was magical.

Alright, now let’s dive into a topic that sparks endless debates, assumptions, and speculation:

Is there an ideal customer journey to increase LTV?

Let's debunk some myths, confirm some truths, and uncover actionable insights that will have you optimizing your retention game in no time.

• The VIP Detection Radar: Spotting High-Value Customers Early 🕵️

• The Revenue Squeeze: Making the Most Out of Email and SMS 📧

• The 30-Day Retention Window: Capitalizing on Replenishment Opportunities 📅

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The VIP Detection Radar: Spotting High-Value Customers Early 🕵️

Most “retention marketing” in today’s day and age is sending a bunch of messages to a bunch of people and hoping the chips fall in a way where the brand wins.

Ironically, it often works. In every customer cohort, there are a bunch of customers that will purchase when they get that perfectly worded text or stunning email.

We’ll never know how many people we pushed away by excessively spamming them with “push to purchase” messaging, because 99% of folks are not doing holdout testing.

As marketers, we also have this enormous dissonance between what we think is “really annoying” and what we convince ourselves our customers are totally okay with.

If we got half the communication we sent to our customers on a daily basis, we’d be reporting ourselves to the BBB and a whole bunch of other three-letter authorities.

But we tell ourselves it’s “because we are marketers,” and customers are not like us.

I challenge you this. Put your mom, brother, cousin, or nephew on your mailing list and blast them.

Check with them a month later for their honest review. It’ll shock you.

The caveat is this:

To the right person, your emails and texts can be precisely what they need to purchase their dream product that does exactly the job they need to be done.

But open rate alone generally doesn’t tell you who wants all this noise and who prefers to be left alone.

By closely monitoring early shopping behaviors such as purchase frequency, average order value, and brand engagement, you can detect potential high-value customers and tailor their journey accordingly.

When you understand the needs and preferences of your customers from the onset, you can leverage the power of retention marketing to unlock their full potential, ultimately boosting LTV.

To spot high-value customers early, consider the following strategies:

Analyze purchase patterns: Deeply dive into your customer data (we use Peel for this) to identify common characteristics among your top spenders.

• Is their first order AOV (average order value) within a specific range?

• Do they tend to buy certain products or product categories?

• Does their first order contain multiple categories?

Understanding these patterns will help you recognize and target potential VIPs more effectively.

Monitor engagement: High-value customers often exhibit higher engagement with your brand. They may frequently visit your website, interact with your content, or open and click your emails more often.

By tracking these engagement metrics, you can spot customers more likely to become VIPs, adjust your marketing strategy to retain them, and maybe even get more $$ faster by “guiding them through your store,” like a concierge shopping experience.

Implement customer surveys: Collect customer feedback through surveys, reviews, or questionnaires.

This information can help you understand your customers' needs, preferences, and expectations, enabling you to identify potential VIPs early on and deliver tailored experiences that meet their demands.

If you have a quiz on your site, you can even cater your quiz to ask these questions early on (HT to Alex for this idea).

Create cohorts of NPS promoters: When it comes to understanding who loves you vs. who’s not so fond of you, purchase behavior shows a fair deal.

But if you better understand who feels great about the holistic brand experience you provide, NPS promoters should give you a fair idea of who has great things to say about your brand.

We use Retently, and they give us the ability to easily create segments in Klaviyo based on what NPS scores customers rated us in a matter of minutes.

It would look something like this:

Track customer lifetime value (CLV) by 30/60/90 days: Especially with a consumable product, you’ll get a firm idea of your VIP customers early on as they generally spend more and quicker than your average.

By tracking CLV across time periods, you can spot high-value customers early on and focus on retaining them to maximize their LTV.

The Revenue Squeeze: Making the Most Out of Email & SMS 📧

While you can't magically make customers wealthier, you can still maximize revenue by utilizing email and SMS marketing to steal market share and retain more customers.

There’s almost nothing that a well-timed and thought-out Email and SMS campaign can’t do.

But as we discussed earlier, too many folks just spray and pray and then are disappointed when some of their most potent tools in the toolbox lose efficacy.

Here's how to get the most out of these channels:

Personalization: Customize your emails and SMS messages to address individual customers' needs and preferences.

Use demographic, behavioral, and purchase data to create targeted content that resonates with your audience.

This will help you build deeper connections and encourage repeat purchases.

Optimize timing: Experiment with sending your emails and SMS messages at different times to determine when your audience will most likely engage.

Not just the time of day, but also the timing since their last purchase, etc.

Timing often matters more than you think, and you won’t know without testing.

Focus on value: Instead of bombarding your customers with promotional messages, focus on delivering value.

Share helpful tips, product information, and education, or exclusive offers demonstrating the benefits of shopping with your brand.

This will help you build trust and foster long-term customer loyalty.

Test and iterate: Continuously test different email and SMS strategies to determine what works best for your audience.

Experiment with your offers, content angles, layout, Subject Lines, and CTAs to optimize your messaging and maximize engagement.

Automate where appropriate: Implement email and SMS automation to send targeted messages based on customer behavior, preferences, or milestones.

This can help you save time, scale your efforts, and ensure that your customers receive relevant and timely communications.

In an ideal world, your email and sms flows should be doing a chunk of the work while you sleep.

I generally aim for 30-60% of email revenue to come from flows (last-click).

Most importantly, monitor performance: Regularly track the performance of your email and SMS campaigns to identify areas for improvement.

Analyze key metrics, such as open rates, click-through rates, and conversion rates, to gauge the effectiveness of your messaging and optimize your strategy accordingly.

Remember, the goal is to provide your customers with a seamless, engaging experience that keeps them returning for more.

Using email and SMS marketing effectively can strengthen customer relationships, boost retention, and ultimately increase LTV.

Every customer is unique, and understanding their needs and preferences from the beginning is vital to unlocking their full potential.

By spotting high-value customers early on, you can tailor their journey, build strong relationships, and ultimately boost LTV.

The 30-Day Retention Window: Capitalizing on Replenishment Opportunities 📅

Replenishable products offer a unique opportunity for customer retention.

It's not uncommon for more than 50% of customers who repurchase to do so within the first 30 days.

To maximize retention and increase LTV, strategically promoting the right products during this crucial time window is essential.

Here's how:

Prioritize product promotion hierarchy: Focus on encouraging customers to repurchase the exact item they initially bought, as this is often the easiest sale to make.

Next, promote the same product in different variations, followed by other items within the same category, and finally, products outside the initial category.

Identify high-impact products: Analyze your product offerings and sales data to determine which products have the highest repurchase rates and contribute most significantly to customer lifetime value.

Focus on promoting these items to new customers during their first 30 days.

Offer personalized recommendations: Use customer behavior and purchase data to provide personalized product recommendations that cater to individual needs and preferences.

Suggesting relevant and valuable items to each customer can increase the likelihood of a repeat purchase.

Implement targeted email and SMS campaigns: Develop targeted email and SMS campaigns designed to encourage repeat purchases within the first 30 days.

Include reminders about the benefits of your products, as well as special offers or incentives that create a sense of urgency if that’s your cup of tea.

Leverage customer reviews and social proof: Showcase customer reviews, testimonials, or user-generated content highlighting your products' positive experiences and results.

This can help build trust and persuade new customers to purchase repeatedly.

Provide excellent customer service (duh): Ensure your customers receive exceptional support and assistance throughout their journey with your brand.

Respond to inquiries promptly, address concerns effectively, and go the extra mile to make your customers feel valued and appreciated.

Educate customers on product usage: Provide customers with helpful resources, such as how-to guides, tutorials, or FAQs, that explain how to get the most out of their purchases.

This can help ensure that they fully understand and appreciate the value of your products, increasing the likelihood of a repurchase.

You can significantly increase retention and customer lifetime value by focusing on the right products and employing targeted strategies during the first 30 days of a customer's journey.

Embrace this opportunity to build long-lasting, profitable relationships with your customers.

That’s it for this week!

P.S. Cody and I just dropped a podcast about testing incrementality and CX learnings from fine dining—check it out here:

Any topics you'd like to see me cover in the future?

Just shoot me a DM or an email!

Cheers,

Eli 💛