Customer value optimization: Effective strategies to upgrade value that your brand deliver to customers
In any field, especially in the ecommerce space, optimizing the customer value is considered as one of the most crucial things that any store owners need to pay attention to. The higher satisfaction and better experience you can bring for customers, the more benefits you can gain. Hence, this is the right time for you to apply effective customer value optimization strategies to quickly achieve your business goal. If you are wondering about not knowing how to apply any method, let Arrowtheme assist you through this article below.
What is customer value optimization?
To put it plainly, customer value optimization (known as CVO), is a framework for businesses to focus on increasing the value of their customers in order to expand rapidly. In fact, the framework’s goal is not only to produce a fantastic customer experience but also to increase the return on investment for all digital marketing initiatives. The optimization process continues throughout the customer lifecycle. As a result, it will increase brand loyalty and the creation of lifelong customers. No matter how the customer behaviour changes, this process is constant.
Step to step to customer value optimization
#1. Determine product and suitable market
To begin, you need to figure out the most crucial person in your business, of course, this is your customers.
In fact, business at its most basic level is quite straightforward. We are compensated for assisting these consumers in transitioning from an unwanted “Before” to a desirable “After” state. Besides, the customer is dissatisfied in some way in the “Before” stage. For a variety of causes, they may be in pain, bored, afraid, or dissatisfied. Meanwhile, life is better in the “After” stage. They are pain-free, entertained, and fearless of the problems that formerly afflicted them.
The Question “Before & After” Grid
- Firstly, in the “Before” state, what does your prospect have? In the “After” condition, what does your prospect have?
- Secondly, in the “Before” state, how does your prospect FEEL? In the “After” state, how does your prospect FEEL?
- Thirdly, What does an AVERAGE DAY in the “Before” state look like for your prospect? What does an AVERAGE DAY in the “After” state look like for your prospect?
- What’s more, What is the STATUS of your prospect in the “Before” state? What is the STATUS of your prospect in the “After” state?
- Furthermore, What exactly is the EVIL that has afflicted the prospect in the “Before” state? In the “After” condition, how does your prospect overcome it and deliver more GOOD into the world?
How much can you charge?
In reality, the gap between the desired “After” state and the “Before” state is called VALUE.
A stick of gum is cheap in part because it only goes from “poor taste in your mouth” to “pleasant taste in your mouth” in a short amount of time. A car, on the other hand, can move you from being “trapped at home” or “forced to take a packed bus to work” to being “free to drive wherever you wish in privacy and comfort”. Because it’s considerably more valuable, it is much more expensive.
Then, if you wish to increase the price of your goods and services, the solution is straightforward. Just need to broaden the gap between the “Before” and desired “After” states by:
- Developing a more effective product or service (better offer)
- Differentiating or clarifying the transition from “Before” to “After” (better marketing)
In addition, you should make sure to understand your “Before” and “After” states before launching a new offer, starting a new company, or entering a new market. Plus, don’t forget to do it for EVERY single one of your customer avatars.
#2. Select the traffic source
The next stage you must implement to optimize customer value is to choose the traffic source.
In fact, traffic is not a big problem in these modern days because you can purchase more traffic easily. You could be dealing with a business model issue, an offer issue, or a measurement issue. For more details, Google, Facebook, Pinterest, Twitter, and LinkedIn are all fundamentally traffic exchange platforms. Besides, they’d also like to send you additional clicks, of course, only for the right CPC or CPM.
Additionally, all you need to know to create profitable traffic is two things below:
- How can you figure out how much traffic is worth?
- How can I get the most immediate benefit out of that traffic?
For instance, let’s assume that every time a visitor visits your website, you made a $10 profit. So, would you be able to increase the site’s traffic? Of course, definitely YES. For more details, you could charge as much as $10 each visitor and still make a profit.
When you properly understand the Customer Value Optimization system, you’ll be able to pay more than $10 to bring a visitor to that page. This is because you will be able to extract even more value from those visitors later on.
That is the reason why customer value optimization is so powerful and effective. Because it allows you to make a higher profit per visitor, and then spend more money each visitor as a result.
For example, Amazon.com sells on razor-thin margins since it understands that getting new consumers, selling them more things, and selling to them more frequently is the only way to become unstoppable.
Alternatively, you can learn as much as you want about blogging, Facebook ads, email marketing and so on. Furthermore, you will be frustrated unless you know how to set up a strategy that extracts the greatest benefit from that traffic.
Instead, you should master a single, consistent traffic source. Plus, keep in mind to maintain your attention on that traffic source. And, once you’ve mastered it, let’s add a second and third. Moreover, these are some of the traffic sources:
- Firstly, email marketing
- Secondly, social media such as: Facebook, Twitter, YouTube adverts and so much more.
- Thirdly, displayed advertisements
- Besides, content marketing
- SEO and so much more.
#3. Provide a Lead Magnet
In this step, we will show you how to build your business using Jay Abraham’s first strategy, which is to increase the number of clients. Now, you should refer to Lead Magnets.
For more details, a Lead Magnet is an enticing inducement that provides a particular amount of value in exchange for a prospect’s contact information. In fact, this is a transaction, even though no money is exchanged. Plus, it’s often the first time you’ll do business with a prospect. You must provide enormous value with your Lead Magnet in order for it to be effective. Additionally, the Lead Magnet is frequently presented on a landing page, also known as a squeeze page, which is designed to convert even cold traffic into leads. Moreover, to be effective, your landing page does not need to be flashy.
In addition, your Lead Magnet’s goal is to create leads so that you can follow up with them later. Because your Lead Magnet is at the very top of the CVO Funnel, raising your opt-ins here will pay off across the board. Lead Magnets, on the other hand, aren’t all made equal. Besides, the most effective Lead Magnet squeeze pages turn more than half of all visitors into leads. Most crucially, you have to make sure your Lead Magnet is targeted.
#4. Offer a Tripwire
At this point, you have a Lead Magnet that is producing opt-ins and contributing to the growth of your email list. However, your Lead Magnet is simply creating prospects, not official customers. The conversion of those leads into customers is the next phase in the CVO process. Hence, you will need a Tripwire for this.
In reality, a Tripwire offer is an attractive offer that exists for only one reason: to get people to buy something: To convert prospects into buyers.
Moreover, a tripwire is typically a very low-ticket offer (generally between $1 and $20), though this varies by market. Besides, a tripwire offer of $500 might be deemed a low-ticket buy in markets selling high-ticket products and services.
Plus, The Tripwire’s purpose is to radically alter the prospect-to-customer connection. Even if it’s only for $1, the transformation of a prospect into a customer is remarkable. And, the trick is to create a Tripwire Offer that your prospects can’t refuse.
Additionally, the best way is selling the Tripwire at cost. However, in some situations, you can face a loss. You are not attempting to earn a livelihood off of selling Tripwire Offers, that’s for sure. Then, you’re looking for buyers because there’s nothing more precious than a buyer’s list.
Effective customer value optimization strategies to upgrade value
#1. Attract the right audience
When it comes to the topic of best customer value optimization, the first strategy we highly recommend for you is to identify your target demographic. This does not imply that you are attempting to target a large number of people. Besides, getting more clients will not be lucrative if they result in larger losses for your business. As a result,
you must always take the quality of clients as the priority. Because 20% of customers bring in 80% of business revenue, the Pareto Principle holds true in terms of client acquisition and revenue creation.
Now, let’s consider what would happen if you could pinpoint the 20% of clients and boost their percentage. It will be rather simple for you to begin raising your company’s revenue.
To begin, we will learn about the consumer analysis process. But first, let’s tell us about the different categories of clients. In fact, there are three types of clients in every business:
- Low-value: this type of customers tend to purchase things at exorbitant discounts or continuing to chat to customer service about minor issues. Therefore, it will waste your resources.
- Medium-value: customers of this group make up the majority of purchasers. Although they don’t bring a lot of money for your business, they’re large in numbers.
- High-value: you need to focus a lot on this client group because they will bring in the most money for you.
Besides, you may use customer value optimization to identify high-value customers and improve their overall brand experiences.
Moreover, based on how well the product sells, you can offer the technique to examine your audience. Then, you can consider the following product categories, which can be classified depending on their performance:
High value & high volume: Some product categories have a high volume of first-time buyers and high-value customers. For example, a certain product is frequently purchased for the first time, and those buyers go on to become regular customers.
High Value & low volume: demonstrates low-volume first-time purchases but gives high-value clients. Most of the time, these things are expensive, therefore they may only attract a small number of purchasers. Customers, on the other hand, are loyal for life.
Low Value & high volume: In a high-volume environment, the following product category is frequently the customer’s first buy, but they never return. This category has the ability to attract customers but not the ability to retain them.
Low Value & low volume: This is the last category, which neither sells well nor brings in quality clients. When it comes to consumer acquisition, it’s best to stay away from this sector.
#2. Utilize the right advertisements
Once you’ve determined who your target market is, you may choose from a variety of advertising platforms to promote your items while still appreciating your clients. Then, below are some of the most effective methods for capturing leads:
- Branded search ads: In fact, this type of ad is different from ads on Google Advertisements or other ad networks. Branded search ads make your adverts show when people search for your brand or business using your brand name or phrases related to your brand or business. Best of all, this is how you will assist your audience in locating your business.
- Google Shopping Ads: This type of ad is another excellent approach to show your customers that you care by giving them exactly what they want. Best of all, you can easily obtain a greater conversion rate since these advertisements are well-targeted. For shopping adverts, you can also use Bing or Yahoo. However, you should still prioritize using Google.
- Affiliate marketing: Another form of ad you can’t ignore is affiliate marketing. Let’s connect with industry business owners who aren’t your competitors but share the same audience through affiliate marketing. These companies might be your affiliate partners. Then, they will assist you in obtaining clicks to your site through their strategies in exchange for you doing the same. In general, this is a win-win situation for both companies. Overall, when you are on a budget or want to try something new since other advertising isn’t producing the desired results, this type of marketing can be very effective.
#3. Provide additional value with items
No matter what you are selling, your product or service is competing with a slew of others on the market. So, why should buyers choose you above the competition?
In reality, they will only choose you if you provide something that no one else does and you can promote your business to be as outstanding as possible. What’s more, a clear customer value proposition (known as CVP) should be included in your advertisement. Plus, you also need to include wording that describes the product’s additional value.
#4. Apply a security-first approach
The next excellent customer value optimization strategy you need to know is applying a security-first approach. According to the 2020 Data Breach Investigations Report, organized cybercrime groups were responsible for two-thirds of breaches, with 86 percent of intrusions being motivated by financial gain. In particular, the information security business is predicted to increase at a rate of 28 percent by 2026.
Besides, when sending personal data and financial information to eCommerce websites, customers want responsive applications, fast network performance, and a secure experience. As a result, gaining clients’ trust is critical in order to continue creating partnerships. More importantly, ecommerce businesses must utilize security as a differentiator to develop trust and loyalty with customers.
For instance, you can refer to ecommerce businesses such as Amazon and Mercato. For more details, they provide comprehensive website security and privacy by encrypting user data. Furthermore, basic passwords and four-digit PINs are easily hacked. As a result, businesses should advise clients to safeguard their login credentials. Moreover, tools like NordPass vault’s username generator can help keep login credentials safe by storing them in an encrypted format.
Alternatively, customers should be encouraged to use longer passwords that include a mix of capital and lowercase letters, digits, and special characters on ecommerce websites. Furthermore, keep in mind to switch to HTTPS and comply with the PCI DSS to ensure that your website is secure for financial transactions. Therefore, this will not only help improve the user experience, but also lead to increased sales quickly.
#5. Offer low-cost items
In case you are looking for a flawless customer value optimization for your business to upgrade the value, let’s start with offering low-cost items to encourage them to buy. You are providing them options and tempting them to buy by exhibiting or advertising low-ticket items. Simply speaking, low-cost products could range from $1 to $30. Moreover, depending on each industry, this will separate low-cost and high-cost products. In addition, it’s critical to realize that making such offers isn’t always advantageous for you. In fact, you may have to suffer losses in many circumstances.
Even so, it’s worthwhile because of these following reasons:
- Firstly, you will gain new clients.
- Secondly, they’ve met you before and now they’re familiar with you.
- Thirdly, there’s a good chance they will refer you to someone else.
#6. Provide product details
It’s fine to provide product details as long as they’re easy to understand for customers. Technical characteristics distinguish a product, regardless of its type. However, telling everyone isn’t helpful to customers if they don’t understand. What’s more, your messaging should focus on how your product can aid your clients in the real world. As a result, attempt to make your advertisement sound more human.
#7. Call your audience to take action
As you may know, every visitor to your site will not immediately begin purchasing after registering. The majority of prospects will add things to their carts but abandon them in the midst without making a purchase. There could be a variety of reasons for this. For instance, a large number of product options or the need to wait for discounts. As a result, bouncing traffic and abandoned carts are typical occurrences.
Hence, the most essential thing is you must instill a sense of urgency in your audience. Best of all, this can be accomplished in a variety of ways. You can, for example, display messages such as:
- First and foremost, Only a few left!
- Secondly, Limited offer!
- Thirdly, Number of people looking for this deal.
- Besides, Number of hours left for this offer.
In general, you can effortlessly convert cold traffic into official lead magnets by creating urgency and giving them less time to decide.
#8. Top-selling items are highlighted
You need to display best-selling items or things that are in high demand. When you tell people about popular things, you’re actually sending out a lot of messages, such as:
- You are recommending the best product.
- People have faith in your website.
- You’re selling high-quality goods.
- Your website is well-known.
In fact, this one activity of yours is aimed at a lot of goals. You’re assisting them, earning their trust, and enticing them to spend more time on your website. To sum up, this is an excellent way to demonstrate your concern for your clients. Furthermore, this excellent method is used by Amazon in order to maximize customer value. It shows a list of best-selling items, which produces a live selection of the greatest things in each area. Plus, the best-selling goods are updated every hour. As a result, this will assist customers in locating the greatest things, and they return to see what’s next on the list that might be of interest to them.
#9. Take advantage of profit maximizer
The next perfect strategy for customer value optimization you can’t miss is to use profit maximizer. For more details, the majority of the time, core products are expensive, which may or may not appeal to purchasers. This is where the profit maximizer’s rule comes in. Other products sold with the core product to pique purchasers’ attention are known as profit maximizers.
Furthermore, companies frequently reduce the price of their core product and make money by selling other items at a price that offsets the loss on the core product. The additional products are designed to increase profit.
#10. Share customers’ product reviews
Sharing product reviews is a fantastic method to show your customers how much you care about them. When a customer reads product reviews, they gain a better understanding of the products. Best of all, you are able to help them with product reviews by:
- Product comparison
- Making a choice
- Demonstrating your genuineness
Besides, the product review could be in the form of a text review, a rating, or both. Then, you can ask your consumers for comments on the items they purchased.
#11. Integrate Live Chat to assist customers 24/24
If customers have any problem that is not to be solved in time, they will surely quit the site. The cause for this could be anything, including the hundreds of options available or unsatisfactory product descriptions. Thus, providing online assistance is a simple way to avoid this. For your prospects, a live chat option might be really beneficial.
Additionally, “Hello there!” is a basic ping you can apply. Plus, “How may I assist you?” can be a friendly gesture to assist them in making the best option possible.
In reality, the fact that over 87 percent of clients are happy with live chat service. Furthermore, 75% of people prefer live chat to any other channel. This is because they don’t have to wait, they get help 24 hours a day. Best of all, they can chat while multitasking, and they get step-by-step instructions on how to finish the task.
Nowadays, there are a lot of companies that use live chat as a primary customer care method. Many of them are experimenting with live conversations.
#12. Keep track of abandoned carts
If the global cart abandonment rate had not reached 75.52 percent, this would not have been an issue for firms. In fact, cart desertion is more common on weekends, with nearly 9 out of 10 carts being abandoned. As a result, businesses remind their customers of what they were seeking for previously. A simple reminder can prompt people to return to their site and complete their task.
Then, you can easily monitor abandoned carts according to following ways:
- Email Marketing
- Facebook Dynamic Product Ads
- Exit Time Offers
- Loyalty Programmes
- Outbound Sales Calling
- Retargeting Ads
All in all, as you can see, in order to upgrade the value that your brand delivers to customers is not quite difficult. If you are running a business, let’s refer to our exceptional customer value optimization strategies above to get more ideas for improving your company. Then, in case you are facing any issue, don’t hesitate to CONTACT US right now. We’d be glad to help you.