It’s not just a one-night stand
With private label supplements, you have the best type of product to form a lasting relationship with consumers. From addressing a problem that they have now, to providing something that they depend on for years to come. Supplements is a sexy industry right now, enabling you to sell to a single customer repeatedly. Once consumers find a brand they love, they’ll stick to it. Therefore, your focus on Customer Lifetime Value (CLV) is of the utmost importance.
In short, CLV is making sure you blow their minds, let them fall in love, and have them come back for more. It is a way to predict the worth of your company over the long term by determining your average total revenue per customer. Remember the 80/20 rule? Eighty percent of your revenue is generated by 20 percent of your customer base. That means those are consumers that you have turned into returning customers. It enables you to more accurately predict your future revenue, and hunt for that 20 percent to increase CLV.
What it means for your business
With accurate data on customer conversion from your marketing platforms, you gain insight into the minds of your customers. It will also give you ideas on how to optimize your marketing efforts to increase CLV. Determine your profit margins based on expected future purchases. Take into account loyalty program discounts and perks you will offer returning customers to arrive at more accurate numbers. Don’t forget that cross-selling will also impact your CLV. Do so by guiding followers of your brand to similar products.
Younger demographics have a higher CLV
Branding has become essential in today’s environment. Chances are consumers connect with your brand first, and then look at your products. Targeting a younger demographic that doesn’t yet have loyalty to a specific brand is how you create brand followers. An older audience will probably already know what supplements work for them, and which brands they like. They might have the money, but the question is whether they will spend it on your product or a brand they already trust.
Selecting marketing channels
Where are you focusing your marketing efforts? Be sure to put your advertising dollars in the right place. Your first point of contact and the channel you are using influences your customer retention. Conversions from a discount on an affiliate site will not be as high as a conversion from an organic search. Therefore, you need to make your product both desirable in terms of actual and perceived value, as well as discoverable. By determining the cost per click (CPC) on your marketing channel as well as the conversion for that channel, you can optimize your marketing to focus on channels that give you the highest conversion compared to your ACOS (Advertising Cost of Sale).
Selecting the most profitable marketing channels will lead you to your customers. Once you have an audience or community, you will reach similar customers based on user behavior on that specified platform.
Never underestimate the importance of interaction. It is imperative that you deliver value to your customer when engaging with them. Sell your product (and brand!) by helping them solve a problem. Find their pain points and provide solutions and urgency, increasing their interest in your product. This spurs them into action when you have successfully convinced them of the value of your product and brand.
Incorporate new technology
The next big thing in technology? Chatbots! Give users a way to engage with your product via voice and text-based conversational interfaces. Software such as Dialogflow and wit.ai don’t require any knowledge of coding. However, if technology is not your strong suit, get a freelancer from Upwork or Fiverr to incorporate a chatbot into your website or Facebook page. Look at all the different integrations to reach consumers on your preferred platform.
Make it personal
Customize your approach for every customer. We are in a market where consumers expect a personalized experience. From related products they might be interested in, to blogs they will want to read. The way to do this is by gathering your customers’ purchase history data, as well as impressions on your website. This way you can guide them to other products that you know will grab their attention based on previous purchase and online behavior.
Subscription-based business models
Subscription based business models, such as Cratejoy, provides an excellent opportunity to increase your CLV. This business model also makes your future revenue more predictable. Consider implementing a subscription-model to increase loyalty to your product.
Now that you understand where your money comes from, and how to predict the future of your business, take action and get into the minds of your customers. Create buyer personas, analyze your website traffic and create value that makes customers come back for more. It’s the best way to acquire and retain lifelong customers and ensure the success of your business. Happy hunting!