Regardless of your business model, hanging on to your customers as long as possible is your primary objective. Why? Because it's relatively expensive to find new customers to replace those that have moved on to your competition or lost interest in your products and services. Customer lifetime value (LTV) measures the total accumulated sales for each account over time. The longer you keep them, the more recurring revenue or upgrade sales you can add to the bottom line without much sales and marketing expense. This is true for luxury automobile sales, SaaS vendors, and the corner grocery store. Inbound marketing is a great way to develop customer loyalty and improve lifetime value. Here's how.
When we do our research before we buy, most of us take a hard look at the near-term and long-term outlook for the products or services we buy. A great example is Apple. iPhones, iPads and Macs are great devices, but if they weren't backed by a company that's constantly innovating and pushing the envelope, would we be so keen to pull the trigger? If they weren't so clever in their marketing, would we even care? With an aggressive content marketing strategy backed by social media engagement you have a great opportunity to let your customers know that you are out in front and will never let go. Even if you have the coolest product roadmap, if no one knows about it and no one cares, you can't galvanize your customer community and keep them salivating. Inbound marketing provides that juice through blogs, user forums, social threads, webinars and viral videos. Clever marketers leak out unofficial video previews or snapshots to the rumor mill, and the excitement becomes palpable.
We consumers created this new marketplace of research, reviews and referrals, and it has become a minimum requirement for successful sales, especially for customer retention. You have to invite feedback from your customers and respond to it quickly and intelligently. No one will believe you, but they will believe other customers who give you 5 stars and a great review. They will also believe people who give you 3 stars and list some of your shortcomings. This isn't necessarily a bad thing. If you respond to those criticisms with your product roadmap and address those concerns, you can keep your current customers and bring in new ones. Some of the tools of the trade:
Yes, this is probably the most important strategy of all for maximizing customer lifetime value. You absolutely must reach out to your customers the most personal way possible. An in-person meeting or lunch is ideal. A phone call is a strong second. An email is a distant third. Don't forget to connect with them in social media! Let them know that you appreciate their business and what's coming down the pipeline. Ask for their feedback and suggestions for improvements. It can't hurt to ask for a review or testimonial. Ask them what their plans are for expansion, upgrade or integration and how the product or service has impacted their business. Document your meeting or call and pass the information on to product development, marketing and management.
The best customer is a current customer. The longer you keep them happy, the sooner you will both profit from the relationship. Use your inbound marketing tools and strategies to stay connected and nurture your relationship with your customers.
Looking forward to hearing your experiences with Customer LTV and inbound marketing.
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