Wouldn’t it be great if you could make predictions based on past customer successes? Lifetime Value or LTV is the crystal ball you’ve been looking for.
In today’s video and article we teach you how to use lifetime value to get key insights into your customer’s purchasing trends and give you a road map to ensure your success.
Lifetime Value Video Tutorial
1. What Lifetime Value Means To Your Business
Lifetime value (LTV) or customer lifetime value (CLTV) is simply the value of each individual customer you have and the amount they spend in the lifetime of your business.
LTV goes deep into following touch points and purchasing trends. This can really help you understand and leverage things like price positioning and next purchasing steps to keep focusing in on the sale.
You want to be tracking individually for each customer and finding averages based on the number of prospects you have in your database or the number of customers you have by the day.
2. Where Do You Find Lifetime Value?
Before we get into how we use this LTV number, we need to get one thing straight. First, you must see that your CLTV or LTV numbers are increasing every month within your business.
Don’t get me wrong, LTV is just as important at the early stages as it is in the later. Start tracking right away! Track conversions, opt-in rates, email marketing metrics. Remember, you’re looking for upward growth to use lifetime value.
A huge part of lifetime value is relationship building based on awareness of customers needs.
Having good SEO content strategy and demographic awareness are just some of the ways you can better understand your customers and the way they look for your products and services.
The Relationship That Keeps On Giving
A little more on relationship building. Businesses often see customer interactions behind a glass window. With the internet there is no distance and we must get that out of our heads.
Maintaining an “in-person” feeling at all times is key. You’ll need a good copywriter, personable ads and problem solution website content strategy showing happy customers. Good testimonials last a lifetime!
When you focus on the quality of your customer relationship, then multiply the average value of sales, number of transactions and customer retention period, you will see upward growth!
3. How To Use Lifetime Value To See The Future
We can see the future by looking into the past. Remember, the better job you do tracking and categorizing your customers, the more valuable your predictions will be.
Now for the fun part. Time to use LTV numbers to grow your business.
Lifetime customers need to see you often and see you everywhere. Use your LTV numbers to time your cross channel marketing. Get your products out there systematically, based on LTV success metrics.
This can be a lot to manage so look into marketing automation and other complimentary tools to minimize time and effort.
Why Success Is An Acquired Taste
Success is not for the impatient. It’s a marathon, not a sprint. Let’s talk about customer acquisition through paid media, paid ads or whatever channel you choose to advertise through.
What most inexperienced entrepreneurs will do is spend a buck on an ad and if they don’t get an immediate return they think it didn’t work. They either don’t have, or don’t use their LTV metrics.
4. When Red Means Green In Lifetime Value
Eight and nine figure companies use LTV and retargeting marketing to make millions because they know their LTV numbers over 30-60-90 days, even up to five years!
With metrics in place, they’re not afraid to go into the red on ads.
They sit patiently, knowing there is a tipping point. They can see the future because they’ve seen the past.
If we spend $1 and get 80 cents back, we’re in the red, but LTV shows over 30 days we’ll break even, and in 120 days become wildly successful. Now we can be aggressive and pay more for clicks and ads.
Don’t Stop Before The Miracle
With this incredible information you can have higher daily budgets and dramatically grow your customer list in your databases. All because you know what to expect, like placing a bet on a rigged fight.
If businesses don’t know CLTV and are in the red, they get scared and stop before the miracle. Some get entrepreneurial depression or close shop out of FEAR (False Evidence Appearing Real).
5. Why Lifetime Value Depends On You
Before we wrap it up, I can’t stress enough that you need to see a monthly increase in LTV. That means your customers should always be trending to spending more.
The point is that they show increasing trust in your brand by continually purchasing.
My name is Steve Nixon. Thank you so much for watching and reading. If you enjoyed this video and article, I encourage you to visit us at strategysamurai.com or on YouTube. Thanks, I’ll see you soon