6 Ways to Increase Customer Lifetime Value for Digital Agencies
Posted: Mon Dec 09, 2024 8:11 am
We translated this article for a reason — it talks about important things for our agency. So, spoiler. There will be a lot from 5 o'click: our experience, our mission, our principles of work and interaction with clients. We publish this article not only for clients: current and future. We hope to exchange experiences with colleagues. We are for an honest and open market.
I won’t try to convince you of the need to increase CLV (customer lifetime value). Digital marketing is full of opportunities to attract new leads using various services and maintain customer loyalty. BUT! If your agency is not focused on increasing CLV, then you are not fully realizing your potential .
Why is the long-term value of your customers so important?
Most digital marketing agencies spend a lot of time on acquiring new clients. This takes both time and money. And if your new client makes one or two small purchases from you, they won’t pay off your search costs.
The more money one client spends with you, the better. Obvious list of taiyuan cell phone numbers information that is worth repeating from time to time (since the cost of attracting new clients is a large expense item in your budget).
A lot of businesses have failed simply because they spent too much effort on acquiring customers who didn't generate revenue, while trying to sell additional services to an existing customer costs next to nothing.
Plus, it’s easier to sell to an existing customer than to acquire a new one. You’ve already put in the effort to acquire your existing customers, and they’re (hopefully) happy with the amazing job you’ve done for them. The numbers are on your side: According to CMO reports , you have a 60-70% chance of converting an existing customer, and only a 5-20% chance of converting a new one.
So how do you help customers spend more money on your product? The two main things to focus on are relationship building and persuasion. These strategies often go hand in hand in digital marketing. Here are 6 specific things you can do to increase revenue from your existing customers.
1. Know your ideal customer by sight
First, make sure your clients are suitable for long-term relationships. If a client doesn’t fit the profile of your company’s ideal target audience, you can interact with them, but the relationship won’t be interesting enough for either of you. However, if the client’s needs and goals coincide with what your agency is good at, you have all the ingredients for a long-term partnership.
Get your team together if you haven't done so in a while. And discuss your agency's strengths, the types of clients you enjoy working with and can serve effectively. Review and update your ideal target audience profile if necessary. You may need to change your marketing strategies if you're currently attracting clients who aren't quite right for you. Polish your business strategy and you'll find it easier to find the right clients.
Let us share the opinion of the managing partners of our agency.
Stanislav Usaty , Managing Partner of 5 o'click:
“In my opinion, we need to take two paths at the same time.
To identify customer types that are obviously “risky” for LTV.
In our agency's experience, startups are the most problematic. At the presale stage, they try to squeeze out all possible discounts, literally imposing a system of bonuses paid on the fact. They force you to sign up for fabulous KPI forecasts, contrary to the agency's opinion (we are smart and experienced now). And then, 90% of them have problems with financing already in the first six months of work.
The list may differ for each agency, but it needs to be outlined. Clients who chose you in a tender based on price will easily part with you upon receiving any spam letter from colleagues in the industry offering a free audit.
When working with a small business, there is always a risk that the client was on their last legs (and often on a bank loan). In a medium-sized business, you have to compete with the client's desire to do everything in-house.
You can divide based on the topic/niche the client works in. At the same time, be aware of the risks of such topics. For example, some financial instruments may be in gray areas (may be prohibited in some countries). These may be cryptocurrency, ICO, binary options.
Proceed from your own expertise.
We have “win-win” experience in some topics — real estate, finance, medicine. We represent the type of tasks and problems. We understand the profitability for the client. And, given that the growth of the agency is directly related to the growth of clients — the ability to stand firmly on one’s feet should be appreciated by the client in the same way as banks “speed up” borrowers.
I agree with the author of the book about the "Pumpkin Method", the essence of which is to rank the client by profit, add additional fields in the form of potential repeat sales, your development as a specialist/agency, the possibility of putting it in a portfolio. Also, the emotional factor is important here. Choose 5-6 from the top. And all the rest are intelligently and mercilessly cut out, and say goodbye.
At one time, we parted with clients who paid little and did not participate in the process. Such cooperation did not bring any profit or satisfaction to the agency's specialists. Perhaps that is why we came to position ourselves as a boutique agency. Fortunately, now we can afford to choose our clients and not suffer from this."
Pavel Katz , Managing Partner of 5 o'click:
"Along with the portrait of the target audience, it is necessary to check your team in the same way. Is everyone ready to work with the ideal client? Are there any moral or ethical disagreements?
In our practice, we have met employees who forced themselves to work with clients from unacceptable spheres. And it turned out terribly. Everyone suffered, both employees, clients and the agency. To prevent this from happening, ask everyone if there are any internal contradictions? Something that will prevent them from achieving results.
Perhaps, along with the dismissal of clients, part of the team will have to be dismissed. But ultimately, everyone will be better off."
2. Communicate quickly and often
So, you’ve found your ideal clients — start talking to them. Find out what kind of help they need. And how they plan to grow, both in the long term and in the short term. The better you understand what your clients want, the more effectively you’ll be able to convince them to buy.
Do not stop communicating with clients, even if the support stage has already ended. Provide new information every month and find out whether they are satisfied with your work, whether they have changed their development plans. Constant contact will allow you: firstly, to remain in the clients' field of vision; secondly, slowly but surely, to build a relationship between you.
Below is an example of a marketing dashboard that you can use to keep clients updated on their marketing campaigns.
I won’t try to convince you of the need to increase CLV (customer lifetime value). Digital marketing is full of opportunities to attract new leads using various services and maintain customer loyalty. BUT! If your agency is not focused on increasing CLV, then you are not fully realizing your potential .
Why is the long-term value of your customers so important?
Most digital marketing agencies spend a lot of time on acquiring new clients. This takes both time and money. And if your new client makes one or two small purchases from you, they won’t pay off your search costs.
The more money one client spends with you, the better. Obvious list of taiyuan cell phone numbers information that is worth repeating from time to time (since the cost of attracting new clients is a large expense item in your budget).
A lot of businesses have failed simply because they spent too much effort on acquiring customers who didn't generate revenue, while trying to sell additional services to an existing customer costs next to nothing.
Plus, it’s easier to sell to an existing customer than to acquire a new one. You’ve already put in the effort to acquire your existing customers, and they’re (hopefully) happy with the amazing job you’ve done for them. The numbers are on your side: According to CMO reports , you have a 60-70% chance of converting an existing customer, and only a 5-20% chance of converting a new one.
So how do you help customers spend more money on your product? The two main things to focus on are relationship building and persuasion. These strategies often go hand in hand in digital marketing. Here are 6 specific things you can do to increase revenue from your existing customers.
1. Know your ideal customer by sight
First, make sure your clients are suitable for long-term relationships. If a client doesn’t fit the profile of your company’s ideal target audience, you can interact with them, but the relationship won’t be interesting enough for either of you. However, if the client’s needs and goals coincide with what your agency is good at, you have all the ingredients for a long-term partnership.
Get your team together if you haven't done so in a while. And discuss your agency's strengths, the types of clients you enjoy working with and can serve effectively. Review and update your ideal target audience profile if necessary. You may need to change your marketing strategies if you're currently attracting clients who aren't quite right for you. Polish your business strategy and you'll find it easier to find the right clients.
Let us share the opinion of the managing partners of our agency.
Stanislav Usaty , Managing Partner of 5 o'click:
“In my opinion, we need to take two paths at the same time.
To identify customer types that are obviously “risky” for LTV.
In our agency's experience, startups are the most problematic. At the presale stage, they try to squeeze out all possible discounts, literally imposing a system of bonuses paid on the fact. They force you to sign up for fabulous KPI forecasts, contrary to the agency's opinion (we are smart and experienced now). And then, 90% of them have problems with financing already in the first six months of work.
The list may differ for each agency, but it needs to be outlined. Clients who chose you in a tender based on price will easily part with you upon receiving any spam letter from colleagues in the industry offering a free audit.
When working with a small business, there is always a risk that the client was on their last legs (and often on a bank loan). In a medium-sized business, you have to compete with the client's desire to do everything in-house.
You can divide based on the topic/niche the client works in. At the same time, be aware of the risks of such topics. For example, some financial instruments may be in gray areas (may be prohibited in some countries). These may be cryptocurrency, ICO, binary options.
Proceed from your own expertise.
We have “win-win” experience in some topics — real estate, finance, medicine. We represent the type of tasks and problems. We understand the profitability for the client. And, given that the growth of the agency is directly related to the growth of clients — the ability to stand firmly on one’s feet should be appreciated by the client in the same way as banks “speed up” borrowers.
I agree with the author of the book about the "Pumpkin Method", the essence of which is to rank the client by profit, add additional fields in the form of potential repeat sales, your development as a specialist/agency, the possibility of putting it in a portfolio. Also, the emotional factor is important here. Choose 5-6 from the top. And all the rest are intelligently and mercilessly cut out, and say goodbye.
At one time, we parted with clients who paid little and did not participate in the process. Such cooperation did not bring any profit or satisfaction to the agency's specialists. Perhaps that is why we came to position ourselves as a boutique agency. Fortunately, now we can afford to choose our clients and not suffer from this."
Pavel Katz , Managing Partner of 5 o'click:
"Along with the portrait of the target audience, it is necessary to check your team in the same way. Is everyone ready to work with the ideal client? Are there any moral or ethical disagreements?
In our practice, we have met employees who forced themselves to work with clients from unacceptable spheres. And it turned out terribly. Everyone suffered, both employees, clients and the agency. To prevent this from happening, ask everyone if there are any internal contradictions? Something that will prevent them from achieving results.
Perhaps, along with the dismissal of clients, part of the team will have to be dismissed. But ultimately, everyone will be better off."
2. Communicate quickly and often
So, you’ve found your ideal clients — start talking to them. Find out what kind of help they need. And how they plan to grow, both in the long term and in the short term. The better you understand what your clients want, the more effectively you’ll be able to convince them to buy.
Do not stop communicating with clients, even if the support stage has already ended. Provide new information every month and find out whether they are satisfied with your work, whether they have changed their development plans. Constant contact will allow you: firstly, to remain in the clients' field of vision; secondly, slowly but surely, to build a relationship between you.
Below is an example of a marketing dashboard that you can use to keep clients updated on their marketing campaigns.