In the broadest sense, the goal of marketing is to connect customers with products and brands that will improve their lives. In the past, marketers have used a variety of media to cast a wide net, hoping that customers who would benefit most from their products would see them. In today's world, marketers have a greater ability than ever before to focus their dollars on specific audiences, thanks to the overwhelming amount of data available. While this is great for spending efficiently and focusing on qualified customers, there's another benefit to aggressive targeting: increasing customer lifetime value.
What's Customer Lifetime Value?
Most marketing campaigns have a short-term goal in mind and focus on the channels being used. Whether it's to build brand awareness through traditional media, increase conversions with paid search or promote a certain product on social media, most campaigns have a singular focus. While these tactics work well, there is also great benefit in shifting the focus to long-term strategies to increase the customer lifetime value. This will foster long-term customer relationships and keep your business' future focus on customer profitability, according to the Harvard Business Review. While it may seem like short- and long-term goals are mutually exclusive, there are easy ways to nurture both.
Focusing On The Consumer
When focusing on increasing customer lifetime value, it is crucial to look at the entire customer journey for your customers and begin to understand how you can influence them. This is no longer about looking at specific media channels and measuring their success independently. This approach will require you to look at the entire scope of your media plan to understand how it impacts your bottom line. Building brand awareness won't show the same "quick results" as conversions, but is an important part of building the lifetime value of a customer. They can't become your customer if they don't know you exist! By mapping out your consumer touchpoints and building strategies that build one another you can better manage your marketing plan to increase the lifetime value of your customers.
How Do Metrics Factor In?
One of the biggest reasons why marketers look to short-term goals and specific channels when crafting their campaigns is because they're easily measurable. After all, it's simple to run a campaign for a few weeks, look at click-through rates and measure sales to determine ROI. However, measuring the long-term effects of multi-channel campaigns spanning many years can be extremely challenging.
Think With Google suggested brands take focus away from individual channel per-click or per-acquisition metrics to overall business KPIs so they can adjust their strategy for maximum impact. While this is a labor-intensive way to gather data, it's the best way for marketers to get a peek into the future and see how their efforts to increase customer lifetime value are progressing.
Though it may not be easy and metrics may not be simple to gather or analyze, there are good reasons to shift your focus and add long-term goals to increase customer lifetime value. As data continues to grow and technology evolves, the process will hopefully get easier.