What s a customer worth over a lifetime?
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- Rosalyn Griffith
- 6 years ago
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2 What s a customer worth over a lifetime? The boat sale is just the beginning of your relationship with a customer, and in my session at MDCE, I discussed strategies that utilize online and in-store parts lookup to help increase your average Customer Lifetime Value (CLTV).
3 YOUR GUIDE TO BUILDING CUSTOMER LIFETIME VALUE In this ebook, we ll review the customer lifetime value (CLTV) basics to help you set a baseline measurement for your dealership s CLTV. Then, we ll explore some cutting-edge technologies that retail leaders in other industries are employing to build CLTV.
4 Customer Lifetime Value (CLTV) Definition: A predictive measure that forecasts the future revenues and value of customers, viewing customers as assets that will bring future value to your business. Simply Put: Total Revenue Generated Per Customer Over Lifetime Cost to Acquire Customer Basic Equation: (Average Value per Visit/Purchase X Average Number of Visits/Purchases per Year) X (Average Customer Lifetime in Years)
5 What is the benefit of measuring CLTV Provides guidance for influencing customer behavior to increase their lifetime value via increased average order value and order frequency Provides insights for optimizing customer acquisition costs and budgeting
6 The Principals of CLTV CLTV Principal #1 It costs more to acquire a new customer than to increase revenue from an existing customer.
7 The Principals of CLTV CLTV Principal #2 The longer a customer stays with you, the more profit they generate, becoming more profitable over time.
8 THE GOAL Maximize CLTV by increasing average ticket value AND purchase frequency over lifetime. Parts & Accessories are key repeat purchase and service drivers over life of the customer Upgrade parts yield higher profit margin and increase the overall customer s satisfaction and experience with the unit
9 READY TO DO THE MATH? Use this handy tool to calculate your CLTV. hbsp.harvard.edu/multimedia/flashtools/cl tv/index.html
10 IT S TIME TO GET TO WORK Now that you ve got the tools to measure, your CLTV, it s time to work to improve it! At my MDCE session, we dug into several strategies for maximizing CLTV using technology. There are no re-runs here! Over the following pages, we ll go beyond what I covered at MDCE, to see what other emerging technology trends you can embrace to bolster your CLTV.
11 CLTV IMPROVEMENT TIP #1 Offer Digital Receipts According to Merchant Survey 2014, 48% of retailers, including Apple, are offering digital receipt options to customers. For many retailers, however, this just means ing a receipt to the customer leaving it up to the customer to go through their s and organize the digital receipts on their own. To get the most out of this emerging trend, take digital receipts to the next level. Offer customers the option to register for an electronic personal receipt folder that stores all of their receipts making it easier for customers to find receipts, track their purchases and, yes, expedite returns. The upside: Use of digital receipts not only improves the customer experience, but provides you with the opportunity to capture data that you can use to drive more sales. You ll have easy access to customer buying history that you can use to upsell and drive service. For example, you ll know the last time they serviced their boat; oil; or the fun stuff speakers, tubes, skis, etc.
12 CLTV IMPROVEMENT TIP #2 Provide Multi-Location Support 50% of smartphone shoppers utilize GPS or mapping applications to locate store locations. Give mobile shoppers a great first impression by providing a convenient store locator on your website. Make it easy and convenient for customers and prospects to find the unit they are looking for. Make sure that your website displays major unit inventory to show where the inventory is located as well as pricing by location.
13 Consider having your sales team use tablets to: CLTV IMPROVEMENT TIP #3 Arm Your Sales Team with Tablets According to Merchant Survey 2014, tablets are already being used by 60% of retailers to enhance the customer experience. Access customers past purchases to make new recommendations Share manufacturer brochures and boat specifications to answer customer questions Use OEM-sponsored build a boat applications Look up inventory across all locations Look up parts Take pictures of in-store inventory to upload to your website both new and used Create videos for uploading to your website
14 CLTV IMPROVEMENT TIP #4 Use ibeacons in Your Sales Strategy Introduced in December 2013, Apple s industry-leading ibeacons use Bluetooth lowenergy technology to communicate with nearby mobile devices. Consider using ibeacons to: Send shoppers coupons and other offers while they are literally standing in your dealership. Example: If he s browsing for oil filters and spark plugs, connect him with 20% off service. Create an engaging customer experience i.e. reward shoppers with mystery prizes for shopping in-store. Worried your customers will resist these Big Brother technologies? A recent study released by Swirl Networks, Inc., found that: 77% of consumers said that they would be willing to share their location information, as long as they received enough value in return. When asked whom they would trust with their smartphone s location data, 65% of consumers said they would trust their favorite retailer.
15 GO BEYOND THE BOAT ACTION ITEMS: Determine your current CLTV. Set a 12-month goal for improvement. Develop a strategy to increase your average CLTV utilizing the tips I ve shared in this ebook and at my MDCE session. Measure your results! Re-calculate your CLTV on a quarterly basis to ensure your tactics have you set on a course for success.
16 arinet.com
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