July 2017 | Blue Donkey

How to work out the lifetime value of a customer

Posted on 25 July 2017 by bluedonkey

When analysing sales statistics or determining the success of a recent campaign, marketers all too often focus on short-term results. For example, did sales increase following a telemarketing campaign? Did customers respond to a recent special offer? Or was it an ad campaign on local radio that encouraged people to sign up for a newsletter?

Although short-term gains are important in business, they don’t always give us the full picture. In order to get a better understanding of the value customers bring to a company, and to improve customer loyalty, businesses need to look at the lifetime value of their customer base.

Why is it important to calculate the LTV of a customer?

Calculating the lifetime value of a customer (or LTV) is vital as it offers a better idea of how much money the average customer will bring to a business over the course of their association. Companies can then decide how much it’s worth investing to ‘win’ that customer. This can help to inform marketing campaigns, especially when it comes to high value B2B sales and long service commitments.

Average LTV

The formula a business uses to calculate the LTV of their customers will vary depending on their business model and the type of products and services they offer. Often, marketers use a formula like this:

(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer).

Individual businesses will need to analyse their own customer base in order to create calculations that provide a valuable insight into customer spending.

What to do with LTV calculations

One of the most important reasons for calculating LTV is that it offers businesses guidance on how much to invest in their marketing. Often, high ticket sales involve significant investment, so businesses need to be confident that winning these high value clients is worth the money. Looking at the LTV of the average customer can therefore guide the marketing budget and help marketers to invest in the areas that bring the biggest results. For example, the cost per lead may be higher using a certain type of high quality marketing. However, if it brings in a number of high ticket sales and long service commitments, the investment will be well worth it over time.

How to improve LTV

There are a number of ways to improve the LTV of the average customer. Marketers can work to increase the amount customers spend with each purchase, improve customer retention to boost overall lifetime spend or work to secure larger numbers of high value B2B customers. All of these techniques require excellent customer service and communication as well as a comprehensive marketing strategy.

To find out more about improving customer communication and boosting business, explore our site or contact a member of our team.

How to combine influencer marketing with data driven marketing

Posted on 11 July 2017 by bluedonkey

Companies already contend with technology advances on a yearly basis. It’s no surprise then that marketing techniques are also continuously evolving. Where once adverts and directory listings helped to determine the success of a business, these days it’s all about word of mouth and recommendations. This ‘influencer marketing’ is especially popular online, where direct links and mentions can do wonders for your SEO.

However, just because influencer marketing is currently enjoying its day in the sun doesn’t mean the days of data-driven marketing are completely over. In fact, by combining the two methods you can make your strategy more rounded, more comprehensive and more powerful.

What is influencer marketing?

Influencer marketing takes many forms, but in essence it involves individuals recommending a product, company or service to friends, family and associates. This can be done through direct word of mouth recommendations, posts on social media and brand endorsements.

One technique that’s becoming increasingly popular is the use of individual ‘influencers’ in marketing. These are often people with large social media followings who agree to work with a particular brand to increase awareness of their products and services. The influencer might post a related video on their YouTube channel, take a photo for Instagram of them using the product, or write a blog post featuring the brand in question.

How can influencer marketing benefit a brand?

A brand can benefit from influencer marketing in a number of ways. If an influencer has a large social media following, the company will be able to boost brand awareness among a particular demographic. The brand will also benefit from its association with the influencer. This will help mould a brand identity, since target consumers will begin to think of the company through the prism of the influencer.

Combining influencer marketing with data driven marketing

If a company doesn’t know exactly who they’re aiming their products and services at, any attempts at influencer marketing are unlikely to have much of an impact. Data can be used to help businesses identify their target audience and to help them assess which types of social media may be most effective in influencing them. If a business uses the wrong digital avenues, they may well find that their influencer campaign fails to get off the ground.

Data can also be used by companies to identify new trends emerging within the market. This can help brands to stay ahead of the competition and allow them to corner the influencer market in their particular niche.

By combining these two powerful marketing techniques, businesses can make the most of their money and reach a receptive audience. To learn more about marketing techniques, explore our site today.

Jargon and buzzwords senior executives hate to hear

Posted on 4 July 2017 by bluedonkey

Few things expose a person’s lack of experience or preparation more quickly than buzzwords. Clichéd, repetitive and often meaningless; buzzwords and jargon are the bane of senior executives’ professional lives. Though you probably have your very own selection of irritating idioms you’d like to consign to Room 101, we thought we’d make a list of some of worst offenders currently doing the office rounds.

Thinking outside the box

According to a recent survey by the Institute of Leadership and Management, 57% of executives find the phrase ‘thinking outside the box’ to be the most infuriating of them all. A fairly unconstructive way of telling people to come up with a new, unique idea, the phrase should have been ditched years ago.

Going forward

The survey showed that the next most annoying phrase was ‘going forward’ with 53% of respondents ranking it as an irritant. Though it may seem fairly inoffensive at first, repetition has made the words two of the most hated a professional can hear.

Touch base

A favourite phrase of networkers and people trying to show a light touch in management, ‘touch base’ has been winding up senior executives for a few years now. It’s recently been joined by the even more unnecessary ‘touch base offline’ which is a roundabout way of asking someone to meet face to face.

Reach out

A lot of people in business seem to think the phrase ‘reach out’ is friendlier and less intimidating than ‘contact’, ‘get in touch’ or ‘call’. This has lead to the phrase finding its way into countless marketing dictionaries. Hopefully it won’t be too long before it finds its way out again.

Idea shower

You’ve heard of a brain storm, well, now it’s time to have an ‘idea shower’. Some managers believe this is a less threatening way to ask for input from their team. The fact that it doesn’t offer us anything new hopefully means it won’t be around for long.

Let’s action that

Instead of saying, ‘let’s action that’ at the end of a meeting or discussion – why not just say, ‘that’s what we’ll do’?

Synergy

One of the most meaningless buzzwords out there at the moment: ‘synergy’ seems to have a huge number of meanings in the world of business. From ‘balance’ to ‘combination’ and ‘collaboration’ to ‘cooperation, the word is thrown into the mix whenever someone wants to sound like they know what they’re talking about.

Going forward, whenever you touch base or reach out to your customers, you’ll be able to action removing buzzwords and jargon from your sales pitch. This should help to create synergy and allow your idea shower to flow freely.

To find out other ways to improve your communication skills, explore our site, or contact a member of our team.