Most marketers are obsessed with converting prospects into paying customers. But there are other things worth obsessing about – one is average sales price (ASP) or lifetime customer value (LTV). LTV has to do with the repeat business you can expect from your customers, and last year we wrote about how to calculate LTV and use it to maximize your marketing impact.
Every organization should be focused on LTV. If you can grow LTV, then your business will enjoy more profitable, loyal customer relationships. And from a revenue standpoint, loyal customers can be worth up to 10 times as much as their first purchase -- that’s money that you don’t want to leave on the table.
Because we’re obsessed with email here at OMI, we thought we’d share a page out of our playbook, with five ways you can use email to increase ASP/LTV:
- Make things as easy as possible: B2B email marketers need to remove as much friction from their buying process as possible and make things easy for their purchasing customers. That might mean making suggestions via pre-populated order forms, limiting purchase options to two or three choices to avoid confusion, offering add-on services or training at the time of the sale (as opposed to upselling later via an additional transaction) – and lastly, not overwhelming buyers with too much information or complicated hoops to jump through. In other words, think of the buying process, learn from previous customers who have had issues (or cancellations or complaints) and be proactive in providing answers to frequently asked questions. Above all, limit the steps required for the customer to take action, and avoid complex processes.
- Sell high and work down: Psychological studies show that you can increase overall ASP by employing a “selling down” strategy as opposed to “selling up.” That means B2B email marketers should lead with their premium or highest-priced items and work down (if need be) to lower-priced offerings, which should generate more revenue than the reverse. In taking this approach, you are conditioning your prospects to become comfortable with higher pricing – and that’s powerful human psychology in action!
- Segment and personalize: To increase your profitability and LTV, you need to know and understand your customers. The more you know about them, the better you can understand what resonates with them. Having deeper customer insights will also enable you to segment and personalize your email marketing messaging and campaigns more effectively. In addition, it will allow you to identify customer trends over the long term and further optimize your efforts.
- Get ahead of things: Anticipate your customers’ needs and try to get ahead of what they’ll be thinking about – or forced to deal with – soon. For example, send email reminders to your customers about subscription renewals, annual service appointments, tips for using new product features – and include a simple button to quickly, easily upgrade, renew or set in motion the action you want them to take. This might also include supporting customers in preparing for changing seasonal sales cycles or reminding them of important industry events or deadlines. The point is to anticipate what your customers’ needs will be and provide an easy way for them to act on them.
- Take care of your best customers: On average, 80% of a business’ revenue comes from 20% of its customer base. That means ensuring your best customers are well taken care of and even offered things ahead of the rest of your prospects. As a result, you might consider sending your best, most profitable offers to your highest spending customers to ensure they lock-in early and don’t miss out. This might be your next product version or latest software upgrade, tickets to your exclusive event, a sneak peek at your new office, or early access to your promotional giveaways.
- Measure and adjust: Track your sales by day of the week, hour of the day, store location, region, sales team, marketing campaign, or other variables relevant to your business. If your numbers are low on, say, Monday, you might come up with special promotions for that day. Weaker regions – perhaps due to weather or other variables – may need special promotions to address a particular challenge to ensure higher cost items are being sold.
For the ultimate business success, every email marketer needs to become obsessed with elevating ASP/ LTV. The good news is, email offers a simple, cost effective and powerful channel to make your goals a reality.
Outward Media’s proven data cleansing services and targeted, accurate email data can enable you to achieve better email marketing ROI and, ultimately, convert more prospects into customers. Take a look at our case studies to find out more.