One of my favorite podcasts is Internet Marketing by Kelvin Newman and Andy White of Site Visibility. I have learned so much from them about online marketing, search engine optimization, social media and mobile marketing. Much of the knowledge I have incorporated into my classes.
This week Andy interviewed Rosie Freshwater of Leapfrogg, a UK company specializing in customer experience marketing. The content was directly related to my prior blog post on customer lifetime value so I thought I would share it with you. Rosie talked about how her firm uses customer lifetime value to segment the buyers and then customize marketing efforts for the different segments.
The process for evaluating the segments is as follows:
- Mine Google Analytics data to determine buying patterns of your customers and segment them by their value to you.
- The value is based on an analysis of how much a customer spends, how often he or she buys and your expenses in serving that person.
- Ask each customer a question to determine their level of commitment to your product or service: On a scale of 1-10 how likely would you be to recommend our business to a friend? Provide the number one reason why.
- You now have groups of customers telling you whether they like you or not and why. This information can be used to improve the poor experiences and elevate the good experiences.
- Map the optimal customer experience for each segment.
Rosie Freshwater indicated that by using this technique she discovered that if a client offered free shipping sales and profits would increase. For another client she discovered that email was a much more effective form of communication than social media.
In general, social media may or may not be the right strategy for a particular segment. Like all communications the decision to use a particular media depends on the target market and their level of engagement with the medium. Social media isn’t free and spending on other types of promotions may be more effective and efficient.
In closing the podcast makes the important point for businesses: Grow profitable sustainable revenue, not just revenue.
Here is a link to download the entire podcast.
Thanks to Kelvin Newman, Andy White and Rosie Freshwater.