leigh n american express presentation
TRANSCRIPT
1
The ‘One & Done’ Trap:
How only focusing efforts on acquiring new customers can undermine long-term retention & growth.
2
Agenda
• What our customer data told us
• How those insights changed our focus for growth
3
• How many of you are looking to grow your business this year?
• When you plan for growth, how many of you plan on primarily acquiring new customers?
• How many of you have a client type of business, where you know who your returning customers are?
4
What the data told us…
$1,725
$445
$96 $55 $41 $27 $13 $6.80 $0.10 $0.002
1 2 3 4 5 6 7 8 9 10
Create deciles of your customer portfolio and rank order them from highest spenders to lowest. You can then typically see how the top 20% of your portfolio are responsible for the bulk of your business.
80% of our customers only contribute to 32%
Not all customers are created equal
Protect/Retain Up-sell/Cross-Sell/RFM Little/Nothing
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Life Time Value
Average Profit Generated Per Year
XNumber of Years (of average customer retention)
-The Cost to Acquire
7
How breakeven instructs ad budget
Cost Per Acquisition = $150Breakeven = Month 16
*Please note you CAN improve ALL of these metrics.
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How did this change our focus?
Our growth strategy now includes focus on retention, upsell & cross-sell of our existing base
We used LTV & break-even calculations to improve ROI & make strategic decisions about which customers to make offers to & which to ‘rest’
We consider returning customer journeys in SEO/SEM activities and lengthened the timeframe customer onboarding
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Key Takeaways
• Know the value of your EXISTING customers: 1. Cost per Acquisition
2. Break-even point of Cost per Acquisition3. Most Valuable Customers
4. Life Time Value
• Do not ignore the importance of returning customers in SEO/SEM activities & ‘findability’
• Concentrate most of your efforts on your most profitable segment
Otherwise, you are a taking a ‘One & Done’ approach.
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Thank You!