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#94 Juliana from CXL: We Need to Rethink Customer Lifetime Value
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#94 Juliana from CXL: We Need to Rethink Customer Lifetime Value
Juliana is the Product Growth Manager for CXL, a Digital Marketing Training center with up-to-date marketing courses taught by the best practitioners in the world.
At CXL, Juliana handles all-things lifecycle marketing. Onboarding, post-purchase communication, user guidance, the works!
Known as ‘The CLV Lady’, Juliana fell in love with Customer Lifetime Value (CLV) during her time as Head of Growth and Product Marketing at Omniconvert, a software as a service (SaaS) for e-commerce conversion and retention.
So what wisdom does Juliana have to share from over 10 years in SaaS and e-commerce?
Tune in to hear Daniel and Juliana discuss:
✔️ Are There 4 Levers of E-Commerce?
✔️ The 4 ‘P’s of Marketing
✔️ Being Real About Customer Loyalty
✔️ The RFM Model
The 4 Levers of E-Commerce
Daniel posits that there are 4 levers of e-commerce:
- Customer acquisition cost
- Conversion rate
- Average order value (AOV)
- Customer lifetime value (CLV)
What are Juliana’s thoughts?
Juliana says that it’s really important to be aware of all your metrics. Your focus, however, varies according to what stage you’re at with your e-commerce business. If you’re just starting out, you’re going to be more focused on customer acquisition and conversion rate than CLV because you don’t have any CLV in the first year of your business.
When it comes to AOV, Juliana says that you need to wait until you have enough transactional data to be able to use that average.
On the other hand, some companies have a ton of data but don’t know how to use it. It’s all very well collecting data, but, as Juliana argues, you need someone (or a team) who knows how to analyze it.
The 4 Pillars of E-Commerce are crucial to a successful e-commerce business. Each one does not necessarily hold equal weight at any one time. You need to measure and prioritize for whatever stage you’re at in your business.
The 4 ‘P’s of Marketing
Marketing changes all the time. Through it all, Juliana says, there are 4 ‘P’s of Marketing:
- Product
- Price
- Placement
- Promotion
Everything is dictated by these.
Often e-commerce is not about re-inventing the rule. You have to start with knowing the basics inside out.
Being Real About Customer Loyalty
In all her experience in retention marketing, Juliana says that you cannot actually grow your retention rate by more than 10% per year.
If you have a 25% retention rate average, in a good year you might get 31%, in a bad year you may not get more than 20%. According to Juliana, this has nothing to do with the tools you’re using, or how smart you are, it’s about romanticizing how loyal customers are. People are eager to try new brands.
Daniel recalls meeting the then CMO of Death Wish Coffee and being surprised to hear them say that their retention rate was “too high”. They were at the stage where they wanted to get back to acquiring new customers.
Believe it or not, you can have retention rates that are too high. There is no exact formula for all of e-commerce. As Juliana points out, it’s about focusing on doing what’s best for your business.
The RFM Model
Like all models and formulas, the RFM model doesn’t work for every business. If your e-commerce brand has at least 5 years of transactional data behind it, however, the RFM model is a great methodology to determine customer value
RFM stands for recency, frequency, and monetary value. If you have millions of customers, these three categories provide good segmentations for buyer behavior.
Juliana warns against being relying solely on RFM to create your VIP tier system. Segmenting your customers into VIPs when they may not yet be loyal customers can be counter-productive. Smaller e-commerce businesses need to go further than RFM to really understand their data.
Klaviyo, Juliana and Daniel agree, provide great engagement metrics and segmentation. Email flows that provide open rates, click-through rates, and conversion offer rich data on customer behavior beyond the purchase.
For anything lifestyle marketing and CLV, go follow Juliana on LinkedIn!
Thank you for listening! We come out with new episodes every Thursday, so stay tuned!
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