So you want to kick us off with the simple question of what actions can brand take at the moment to increase that customer lifetime value. Cool. So, I mean, the first and most important thing to do when it comes to customer lifetime value is to calculate customer value. Because if you don't know exactly how how valuable is your is your customer list, how valuable are your customers in general, you can, you know, reproduce that and repeat that type of you know, I guess, uh, you know, uh huh, behavior that they have right to long term type of behavior. So what I what I usually tell people is that the most important thing is to segment your customers based on their buying behavior, because customer lifetime value suppose a behavior a different, you know, buying behavior. Suppose having the same, um, you know, uh, purchasing behavior from the same source. So just to give you an example when you acquire a cohort of new customers, it's not enough to just acquired them and break even on the acquisition cost. It's to have. Actually, customer. Lifetime value is to have the same source of the same customers purchasing repeatedly from you. So unless you understand, you know what is the value of each customer that you bring, you won't be able to work with them, you know differently to grow that the lifetime value and the best way I suggest people to go about this is to do RFM segmentation, which means recently frequency and monetary value segmentation. And it's a methodology that appeared in the fifties, and a lot of people say, Oh my God so all that appeared in the fifties and so on, But I'm saying it's bullshit because it works and, uh, I reference segmentation looks at your customers based on the recency, they have the frequency they buy in the monetary value. So once you do that, you will see you will have, like different segments from your customer database that share a particular buying patterns. But the secret is that inside those segments they are not. The customers are not created equally. So what I mean is that if you're living in an apartment building, you can say that everyone in that building has one thing income, and they live in the same place. But that doesn't mean all the people are like So here is where you have to come with the granular RFM analysis, which is a different thing, which is something that a science customers a score from 1 to 51 being the lowest five being the highest. That takes into consideration your average days between transaction. Right, So you're buying cycles. It takes into consideration the monetary value. And, of course, how many of the workers were customers. How many times people were there for me. So once you do this sort of fem analysis, you'll figure out that in each segment of customers you have customers that are worth keeping and customers that are not worth keeping. And when I say that, I mean, even if you have customers that purchase five times from you. But they purchased only for $5 or they purchased only on discounts or they purchased. You know, we are couponing and discounting. They don't have the same value as people that purchase, let's say two or three times, but they spend full time full price on you So they spent, you know, when, uh, acquired for a million full price. So it's very important that when you do any type of optimization via email via retargeting via whatever you do is to look exactly at the customers that have value instead of just pocketing everyone in the same place because it's not gonna work. I hope. I hope I made sense this very morning for everyone who's listening right now.
🙋 ➝ Get help managing Amazon Advertising
📝 ➝ Subscribe to our newsletters