Types of customers and how to segment them

types of customers

To ask ourselves why customers are essential for businesses would sound like debating if flying is possible for humans without using airplanes. The obvious answer is simple, but as it is with flying, when talking about customers it is not enough to acknowledge their importance for the business. The focal point for companies is to understand where to find their potential customers, who they are, what they like, what they need, and how you (the business) can bring customer satisfaction.

In addition to this, you will have to comprehend what the different customer types are. Nonetheless, as an entrepreneur, it is crucial to learn, understand, and apply tactics for identifying and serving all the different types of customers that you`ll encounter so you can grow your customer base. So let’s get right to it, and learn a few things about how the art of having a happy customer works. 

What is a customer?

It might not sound very interesting to start with definitions, but it’s essential to understand what you need to grow your business. For example, if you are a brand like Ferrari, one-time-clients might be just fine because one sale can do the trick for your car dealership. But if you are a mere mortal among us and have a small-to-medium business promoted on social media, you`ll want customers. That means people who will come to you customary. Those are the people that will habitually return to you and allow your establishment to develop sustainably.

In economics and sales, the customer is simply the recipient of a service, product or any other good that comes out of a process. In exchange, the customer gives away money or different types of consideration. Not long ago in our history we had an economy based on favors which meant that commerce created somehow permanent human relations. As economics developed, we translated to more transitory needs, we began talking more about different types of customers and customer relationships.

Customer segmentation

When talking about different types of customers we have to understand the concept of customer segmentation. Logic tells us that a customer may or may not be a consumer too.

Customers are usually divided into two categories: the entrepreneur/dealer who purchases for resale and the end-user who buys in order to use that product/service. The tactics will be different when trying to win these types of customers; but for our purpose here, we shall talk mainly about those customers who come to your doorstep to make the purchase for themselves.

What are the different types of customers?

As brands developed and became more and more accessible, we started talking about customers not only as single entities that will buy our products. Still, we created a whole industry to understand better how many types of customers are out there in terms of how they make a purchase. 

It is imperative to identify the types of customers before they make the purchase. That way you will be able to meet their expectations and win their hearts and credit cards. First of all, we have “the lookers” which are just scouting and only buying if something captivates their attention. We also have the “deal-of-the-day hunters” who are every one of us on Black Friday. They are attracted by a huge discount and great 1+1 deals and will buy in bunches if they feel they stumbled upon a bargain. 

Next, we have The Researcher and on the other corner of the room, we have The Impulsive Customer. While the ones in the first category will spend lots of time looking for the best possible price and quality and will turn out to be loyal customers. With the others you might discover they just bought the whole shelf, and the only thing that might scare them is a complicated checkout process. Make sure you are ready for them because they are known to be disloyal customers.

We have the customers that buy while always having in mind the price of the product, and this is important mostly because we have a natural tendency to look for and then choose the lowest price we will find. Most people will be interested in finding the best quality/price ratio. Still, we can`t forget about those who will deliberately go for the highest price to emphasize their material status or just to have the feeling that they chose what’s best on the market. 

While making a purchase, really important for a customer is the reliability of the product. We all have that uncle that is extremely proud of his 30-year-old car and who will always tell you “they don’t make them so good anymore”. Even though we are now millennials and we change phones and laptops every time a new version comes out, we all like things that we can rely on. Talking about nowadays` customers, compatibility is sometimes crucial when choosing a certain product over another one, and so is the experience we get out of its usage. Since we are no longer restricted to using only things that “will do their job”, we can now choose the best experience we can get. Having all the features that customers want or the best design in the market are also tie-breakers, but so is convenience, because we sometimes choose the accessible product over the one that needs 14 days to arrive at our door.

Key tactics for identifying and serving different types of customers

As we can see, there are certain patterns in this business. But identifying them it’s only the beginning of a complex process that might sky-rocket your conversion rates. Probably the most important part of the process is finding the best tactics to increase customer loyalty and attract these newly found customers.

Maybe the most active customer of all is “The driver”. Drivers are controlling and they make fast decisions. You`ll have to be there when they need you, otherwise, they will go looking elsewhere. They are not detail-oriented, but they have discipline. You can easily recognize them because they cannot listen, they will always come forward with comments and sometimes harsh inputs and they are in a constant need of control. The best way to transform them into buyers is to value their time as much as they do, act as an expert, cut short the small talk, and never be too aggressive.

We talked earlier about the researchers and will do it again because it is important to understand how to win this category. Opposite to drivers, the researchers are highly focused on details, they take their sweet time to come to decisions and they have high standards. You`ll recognize them for their tendency to ask lots of questions and this is the area where you can win this category: always bring your A-game in terms of data and make sure you use good and relevant examples. Have a lot of patience and be prepared for a long selling process that could look like an interrogation.

The easiest target in terms of customers might be The Buyers. They are usually sociable and friendly. Most important, they are great listeners and easy to get along with. When in your shop, you`ll recognize this type of customer because they use informal language and will need explanations in bunches. Winning them is fairly easy: make sure you build trust and pay attention to the customer relationship management and then just let the things flow. Act like you are their advisor and you are there for the whole purpose of helping them, ensuring they are making the best decisions, and showing constant interest in their needs. Always be a man of your word because this type of customer appreciates honesty.

Last but not least, we have to understand the ways of dealing with those customers who are emotional. They talk a lot, they make bald decisions and love being in the center of the action. 

In front of them, your marketing strategy has to be simplistic: you will have to speak with great confidence and be able to show that you are up to the task. They will enjoy talking for its sake, so expect long conversations in which you will have to be at your best. The best way to deal with this type of customer is to explain how they will benefit from your service. Bring just enough data to understand that you have the expertise, but don`t get them bored. Also, speak based on your own customer experiences and present other`s opinions.

In conclusion, the key might be very simple advice: because every business’s goal is customer retention, be as flexible as you can be. At the end of the day, if they have money, they can be your customers. 

Source: https://www.omniconvert.com/blog/how-to-segment-customer-types.html

10 key e-commerce metrics you should measure to increase user engagement

10 Key E-commerce Metrics You Should Measure to Increase User Engagement

Experts from Zyro suggest that it’s crucial to develop a viable strategy for measuring key performance indicators. This includes identifying and prioritizing your short term and long term goals. Also, you’ll get to indicate the main objectives as of what you’re aiming to achieve and set an eCommerce metrics dashboard.

With that in mind, here’s our list of the 10 core eCommerce metrics for increasing user engagement. 

1. Average pageviews per visit

Pageviews is one of the core metrics that refers to the number of times a particular page has been viewed by visitors. 

Measuring pageviews will help you understand how often people visit your website and how they engage with different pages. Additionally, pageviews can indicate when visitors are traveling through your website, failing to find needed information. 

How to calculate average pageviews per visit? 

Average pageviews per visit = Total Number of Pageviews ÷ Total Number of Visits 

2. Conversion rate 

The conversion rate implies the percentage of users who completed the desired action that you want them to perform. These actions vary based on your objectives and can range from subscribing to your email list to completing a purchase after visiting your website or viewing a particular product page. 

Conversion rates are particularly important if you’re running multiple eCommerce digital marketing campaigns. Measuring conversion rate allows you to identify which advertising channels perform and engage users better than others.

How to calculate the conversion rate? 

All of the following formulas are valid and can be used to calculate the conversion rate. The choice of a formula depends on your definition of a conversion event and how you measure website traffic. 

Conversion rate = (Total Number of Conversions ÷ Total Number of  Sessions) × 100

Conversion rate = (Total Number of Conversions ÷ Total Number of  Unique Visitors) × 100

Conversion rate = (Total Number of Conversions ÷ Total Number of  Leads) × 100

3. Retention rate 

The customer retention rate refers to the percentage of customer rate returning to your website after completing a purchase. 

By keeping track of the retention rate, you’ll get a better idea about the longevity of your ecommerce websites. Also, it will help you figure out why customers return to make another purchase. 

How to calculate the retention rate? 

Retention rate = (Number of Active Customers ÷ Total Number of Customers at Start of Time Period × 100

4. Customer Lifetime Value 

 Customer lifetime value (CLV or CLTV) refers to the prediction of the total revenue attributed to the future relationship with a customer. To put it simply, it’s the amount of money a customer is expected to spend on your products during their lifetime. 

CLTV is a key metric because it basically shows you how much your clients are worth to you on average. Use CLTV to distinct customers that are economically more valuable to you. 

How to calculate CLTV? 

To calculate customer lifetime value, you first need to identify lifetime value (LTV). 

LTV = Average Value of Sale × Number of Transactions × Retention Time Period 

Now, when you know your LTV, you can calculate CLTV. 

CLTV = LTV × Profit Margin 

5. Gross margin 

Gross margin is a core eCommerce metric that implies the total sales revenue you retain after incurring the production costs. In other words, gross margin is the actual profit you earn per each sale. 

Understanding how much you earn per sale is paramount to increase user engagement and ensure your ecommerce business is scaling properly. 

How to calculate gross margin? 

Gross margin = (Revenue – Cost of all Goods Sold) ÷ Revenue 

6. Average Order Value 

Average order value (AOV) refers to the monetary value of an average customer order on your website. While average abandonment order value (AAOV) is the average value of an order that a client had abandoned during either checkout or in a cart. 

Keeping track of both AOV and AAOV is crucial to increase user engagement. You want to know which elements stimulate customers to complete a purchase and to, oppositely, abandon their orders. 

How to calculate AOV? 

AOV = Revenue ÷ Number of Orders 

7. Cost per acquisition 

Cost per acquisition (CPA) is another key eCommerce metric that refers to the amount of money you have to spend to gain a new customer. Cost per acquisition includes the following factors: 

  • Email campaigns costs
  • Advertising costs
  • Discount offers (and anything else it took to make a sale)

Keeping track of CPA gives you a perspective of how much costs and efforts you spend to engage and acquire new customers 

How to calculate CPA? 

CPA = Total Advertising Spendings ÷ Total Attributed Conversions 

8. Cart abandonment rate 

The shopping cart abandonment rate refers to the percentage of customers who add items to their shopping carts, then abandon carts without completing a purchas . This is a crucial eCommerce metric because it gives you an insight into how many customers are intending to buy products but never complete their purchase. 

When it comes to the cart abandonment rate, the value of items added to the cart, the number of items, and the total shipping time are all important. By comparing this rate to other metrics, you can figure out a viable strategy to increase user engagement and decrease the cart abandonment rate. 

How to calculate the cart abandonment rate? 

Cart abandonment rate = 1 – (Number of Shoppers Completing Transactions ÷ Number of Shoppers Adding Items to Cart× 100

9. Checkout abandonment rate 

The checkout abandonment rate refers to the percentage of customers who first initiate checkout and then abandon the purchase. 

Even though the checkout abandonment rate is similar to the cart abandonment rate, they should not be confused. When customers abandon items during checkout, they’re one step further than abandoning their carts.

This metric is useful as it gives you specific data about incomplete transactions after customers are interested in purchasing your products. Analyze the checkout abandonment rate to develop strategies for better user experience. 

How to calculate the checkout abandonment rate? 

Checkout abandonment rate = 1 – (Number of Orders Completed ÷ Number of Checkouts Initiated× 100

10. Revenue on advertising spent 

Revenue on advertising spent (ROAS) is the final metric closing our list. ROAS refers to the total revenue generated by a specific marketing channel. 

Keeping track of ROAS will help you identify how much advertising it takes to engage users to complete a purchase. Also, you can use the results of measurement to identify the most effective advertising channels and make further improvements accordingly. 

How to calculate ROAS? 

ROAS = (Amount Gained From Advertising ÷ Amount Spent on Advertising× 100

Final thoughts 

How often should you measure eCommerce metrics? Some metrics should be checked weekly or bi-weekly. Others require a longer data window and should be measured monthly or quarterly. So, the best answer is that eCommerce metrics should be tracked consistently. The persistent growth of online stores comes as a result of regular performance analysis over time. 

Source: omniconvert.com/blog/10-ecommerce-metrics-increase-user-engagement.html

7 Steps to Starting Your Own Business

When starting a business, your mission is to build something that people want, minimize the risk and maximize your chances of survival.
Do not do it alone. Starting a business alone is very hard. Even harder when you don’t have the money. Find a partner who can share your passion for your product – but don’t look for someone like you. However, there are some economists who like to discover new things and take risks, so they will do so. What are the opportunities and what are the risks?

Either way, you will start your business at the earliest opportunity. Although this is not an easy task. But if you follow these principles, you can minimize risks and maximize your chances of survival.

1. Evaluate your ideas

Is your business idea a great idea? How do you know that? Don’t just ask your friends and family what they think. You will not get straightforward answers. Ask those who are not affected in your potential success (or failure). Then listen to what they have to say. The best way to evaluate an idea is to ask potential customers, but if you can’t do that, try to ask those who go ahead.

2. Find a knowledgeable person

Tell you any problems. Do not look for someone who will assert your opinions; Find a guy (or a girl) who will challenge you for your reason and decision. Even if that person is in the field related to your business, the better. This is not a formal settlement, you only need a small response. You may not like what you hear, but try to listen to their opinions.

3. Bringing customers is the key factor.

Who are they? Where are they? How do you earn customers? Those are the first questions you need to answer. This task should take up half of your time. What about the other half of the time? Take that time to make sure your product or service exceeds customer expectations. If you do well, those first customers will be your sources of reference and research later, and especially they will bring you more business opportunities.

4. Reinvest everything in business.

When starting a company, you often spend more than your customers pay to create a product that is better than they expected. Once you continue doing so, you will not get back anything for yourself. However, if you focus on profitability at an early stage, you will end up with a mediocre product or service. Such mediocrity will not get you more in business. And then after that, you will have to spend all the profits you earn in every way to find a new business. So reinvest in to open up new profits for your company.

5. Saving but being smart.

Do you need new customers? Find a low-cost way to find the most potential customers. You will have to spend more time evaluating customers in order to find the best people. But it’s better than trying to use a risky and costly marketing method that won’t get you anywhere. Craigslist.org is a good example *. It is a website where there are “less money” customers but you will certainly find some good customers there. Savings method also applies to recruitment. Do not rush to hire employees who work all day. Try to find outside resources or contract employees and pay them the same payment method that customers do with you. This way, you will take time to find the right people and certainly will take more time to collaborate with them to produce the product you like. However, if you are smart and energetic, this approach will help you save significantly on employee salaries.

6. Start marketing before you think you are ready.

Too many people start a business all the time and any small amount of money they have to build a product with so many characteristics, including good and bad. However, none of the features of the product were removed at the time the product was introduced to the customer. Look for good, low-cost and effective ways to reach potential customers in the early stages of starting a business. Try to automate your marketing if possible. And whatever profit you make, spend that money on marketing as much as possible. You can start marketing before you have the product and that’s the best you’ve ever done.

7. Don’t do it yourself.

Starting a business alone is hard. Even harder when you don’t have the money. Find a partner who can share your passion for your product – but don’t look for someone who is just like you, because they will give you the same opinion. You don’t want someone who always says “yes” to everything you raise!

Source: https://articles.bplans.com/business-ideas/7-steps-to-starting-your-own-business/

10 Content Ideas For Your LinkedIn Page

Man Holding Mug at Cafe

There are over 30 million Pages on LinkedIn. If yours isn’t one of them, you’re missing opportunities to get your content in front of the audience that matters most to your business. Plain and simple.

If you’re just getting started with your Page, or are a content powerhouse team of 1, you might not feel like you have enough content to post 3-4 times a day, but the truth is you likely have the content sitting right in front of you – it’s on your company website, your blog, third party articles and more!

Different posts clearly have different objectives. If your goal is lead generation your update may link to a landing page for a gated eBook or whitepaper. If your goal is brand awareness your post might link to your company website or perhaps you’ll share a blog post announcing a new product or feature enhancement. If it’s a thought leadership play you might share an article your CMO published on the LinkedIn platform.

In a TL;DR world where there is actually way too much content and not enough effective content, here are a couple of ideas – from our team to yours – to help inspire you to publish more effective posts on your LinkedIn Page and grow your following.

By the way, did you see that our LinkedIn Marketing Solutions Showcase Page just hit 1 million followers?! Needless to say, if I were you, I’d heed this advice:

10 Types of posts you should share on your LinkedIn Page

1. Video, video, video

Facts:

  • Video is 5x more likely than other types of content to start a conversation among members.
  • LinkedIn members spend almost 3x more time watching video ads compared to time spent with static Sponsored Content.

If you hadn’t heard, LinkedIn just went all in on video. Here are two (of many) ways our team has incorporated video into our LinkedIn Page content strategy.

Short video series

LinkedIn Marketing Minute is series of videos aimed at providing actionable advice to marketers like us. Including influencers, like Ann Handley below, increases credibility and will likely increase reach as they will likely share it with their networks.

Video case studies

It’s a video. It’s a case study. It’s a 30 second video promoting a case study! Short, sweet and engaging.

2. Images featuring statistics

People love stats and sharing things that make them appear more knowledgeable. We take ‘stand out’ stats from case studies and external research/surveys and showcase them with social tiles as part of larger campaigns.

3. Product launches and feature enhancements

Keep your audience up to date on the latest and greatest of your products or services. Then take the next step and share best practices on how to use them.

4. Celebrating company wins and milestones.

Give an inside look at your company’s mission and vision. Don’t be shy to celebrate company wins and show gratitude to followers and customers for helping you achieve your goals.

5. Highlighting company leaders

People buy from people, not companies. Humanize your brand and give your audience the opportunity to take a peek inside your company culture while simultaneously highlighting your best employees as thought leaders.

6. Drive registration for events your company is hosting or sponsoring.

Our Showcase Page consistently drives high registration numbers for our webcasts and our (award-winning!) Live with Marketers episodes.

7. Promote eBooks

When we launch an eBook, we typically create 4-5 images and videos featuring the eBook cover, stats, quotes and tips taken from the content to extend the campaign shelflife.

8. Third party content

No one likes hang with the person at the party who’s talking about themselves the whole time.

Insider tip: Don’t forget to add hashtags to your content to be found with other relevant trending topics.

9. Thought leadership blog posts

Not every post has to be about your business or product. You can build thought leadership and authority in your space by taking a spicy point of view on a timely or controversial topic.

10. Original research

Original research and insights tend to knock it out of the park.

Source: https://business.linkedin.com/marketing-solutions/blog/linkedin-company-pages/2018/10-content-ideas-for-your-linkedin-page?mcid=6605872282973900800&li_fat_id=edf01f46-1fb6-4bc2-8072-6abd7c5dcbd7

5 Whys getting to the Root of a Problem Quickly

Have you ever had a problem that refused to go away? No matter what you did, sooner or later it would return, perhaps in another form.

Stubborn or recurrent problems are often symptoms of deeper issues. “Quick fixes” may seem convenient, but they often solve only the surface issues and waste resources that could otherwise be used to tackle the real cause.

In this article and in the video, below, we look at the 5 Whys technique (sometimes known as 5Y). This is a simple but powerful tool for cutting quickly through the outward symptoms of a problem to reveal its underlying causes, so that you can deal with it once and for all.

Origins of the 5 Whys Technique

Sakichi Toyoda, the Japanese industrialist, inventor, and founder of Toyota Industries, developed the 5 Whys technique in the 1930s. It became popular in the 1970s, and Toyota still uses it to solve problems today.

Toyota has a “go and see” philosophy. This means that its decision making is based on an in-depth understanding of what’s actually happening on the shop floor, rather than on what someone in a boardroom thinks might be happening.

The 5 Whys technique is true to this tradition, and it is most effective when the answers come from people who have hands-on experience of the process or problem in question.

The method is remarkably simple: when a problem occurs, you drill down to its root cause by asking “Why?” five times. Then, when a counter-measure becomes apparent, you follow it through to prevent the issue from recurring.

Note:

The 5 Whys uses “counter-measures,” rather than “solutions.” A counter-measure is an action or set of actions that seeks to prevent the problem from arising again, while a solution may just seek to deal with the symptom. As such, counter-measures are more robust, and will more likely prevent the problem from recurring.

When to Use a 5 Whys Analysis

You can use 5 Whys for troubleshooting, quality improvement, and problem solving, but it is most effective when used to resolve simple or moderately difficult problems.

It may not be suitable if you need to tackle a complex or critical problem. This is because 5 Whys can lead you to pursue a single track, or a limited number of tracks, of inquiry when, in fact, there could be multiple causes. In cases like these, a wider-ranging method such as  Cause and Effect Analysis or Failure Mode and Effects Analysis may be more effective.

This simple technique, however, can often direct you quickly to the root cause of a problem. So, whenever a system or process isn’t working properly, give it a try before you embark on a more in-depth approach – and certainly before you attempt to develop a solution.

The tool’s simplicity gives it great flexibility, too, and 5 Whys combines well with other methods and techniques, such as  Root Cause Analysis. It is often associated with  Lean Manufacturing, where it is used to identify and eliminate wasteful practices. It is also used in the analysis phase of the Six Sigma quality improvement methodology.

How to Use the 5 Whys

The model follows a very simple seven-step process:

1. Assemble a Team

Gather together people who are familiar with the specifics of the problem, and with the process that you’re trying to fix. Include someone to act as a facilitator, who can keep the team focused on identifying effective counter-measures.

2. Define the Problem

If you can, observe the problem in action. Discuss it with your team and write a brief, clear problem statement that you all agree on. For example, “Team A isn’t meeting its response time targets” or “Software release B resulted in too many rollback failures.”

Then, write your statement on a whiteboard or sticky note, leaving enough space around it to add your answers to the repeated question, “Why?”

3. Ask the First “Why?”

Ask your team why the problem is occurring. (For example, “Why isn’t Team A meeting its response time targets?”)

Asking “Why?” sounds simple, but answering it requires serious thought. Search for answers that are grounded in fact: they must be accounts of things that have actually happened, not guesses at what might have happened.

This prevents 5 Whys from becoming just a process of deductive reasoning, which can generate a large number of possible causes and, sometimes, create more confusion as you chase down hypothetical problems.

Your team members may come up with one obvious reason why, or several plausible ones. Record their answers as succinct phrases, rather than as single words or lengthy statements, and write them below (or beside) your problem statement. For example, saying “volume of calls is too high” is better than a vague “overloaded.”

4. Ask “Why?” Four More Times

For each of the answers that you generated in Step 3, ask four further “whys” in succession. Each time, frame the question in response to the answer you’ve just recorded.

Tip:

Try to move quickly from one question to the next, so that you have the full picture before you jump to any conclusions.

The diagram, below, shows an example of 5 Whys in action, following a single lane of inquiry.

Figure 1: 5 Whys Example (Single Lane)

5 Whys

The 5 Whys method also allows you to follow multiple lanes of inquiry. An example of this is shown in Figure 2, below.

In our example, asking “Why was the delivery late?” produces a second answer (Reason 2). Asking “Why?” for that answer reveals a single reason (Reason 1), which you can address with a counter-measure.

Similarly, asking “Why did the job take longer than expected?” has a second answer (Reason 2), and asking “Why?” at this point reveals a single reason (Reason 1). Another “Why?” here identifies two possibilities (Reasons 1 and 2) before a possible counter-measure becomes evident.

There is also a second reason for “Why we ran out of printer ink” (Reason 2), and a single answer for the next “Why?” (Reason 1), which can then be addressed with a counter-measure.

Figure 2: 5 Whys Example (Multiple Lanes)

5 Whys

Step 5. Know When to Stop

You’ll know that you’ve revealed the root cause of the problem when asking “why” produces no more useful responses, and you can go no further. An appropriate counter-measure or process change should then become evident. (As we said earlier, if you’re not sure that you’ve uncovered the real root cause, consider using a more in-depth problem-solving technique like  Cause and Effect Analysis,  Root Cause Analysis, or FMEA .)

If you identified more than one reason in Step 3, repeat this process for each of the different branches of your analysis until you reach a root cause for each one.

Tip 1:

The “5” in 5 Whys is really just a “rule of thumb”. In some cases, you may need to ask “Why?” a few more times before you get to the root of the problem.

In other cases, you may reach this point before you ask your fifth “Why?” If you do, make sure that you haven’t stopped too soon, and that you’re not simply accepting “knee-jerk” responses.

The important point is to stop asking “Why?” when you stop producing useful responses.

Tip 2:

As you work through your chain of questions, you may find that someone has failed to take a necessary action. The great thing about 5 Whys is that it prompts you to go further than just assigning blame, and to ask why that happened. This often points to organizational issues or areas where processes need to be improved.

6. Address the Root Cause(s)

Now that you’ve identified at least one root cause, you need to discuss and agree on the counter-measures that will prevent the problem from recurring.

7. Monitor Your Measures

Keep a close watch on how effectively your counter-measures eliminate or minimize the initial problem. You may need to amend them, or replace them entirely. If this happens, it’s a good idea to repeat the 5 Whys process to ensure that you’ve identified the correct root cause.

Key Points

The 5 Whys strategy is a simple, effective tool for uncovering the root of a problem. You can use it in troubleshooting, problem-solving, and quality-improvement initiatives.

Start with a problem and ask why it is occurring. Make sure that your answer is grounded in fact, and then ask the question again. Continue the process until you reach the root cause of the problem, and you can identify a counter-measure that will prevent it from recurring.

Bear in mind that this questioning process is best suited to simple or moderately difficult problems. Complex problems may benefit from a more detailed approach, although using 5 Whys will still give you useful insights.

Source: https://www.mindtools.com/pages/article/newTMC_5W.htm

How to improve your Customer Lifetime Value

It’s cheaper to retain existing customers than to acquire new ones, especially in industries where the customer lifetime value is more important than the profit of an individual sale. Globally, the average cost of a lost customer is $243 (KISSmetrics).

64% of companies rate customer experience as the best tactic for improving customer lifetime value, followed by better use of data and personalization. There are many methods you can use to optimize your customer lifetime value, but here I will detail a few:

1. Treat your best customers differently

How would you call a world where everyone gets the same reward. No matter how impactful they are? Where everyone gets the same bonus, no matter how hard they work?

Unfair, right?

Well, if your eCommerce is sending the same special offers and discounts to all their customers, that’s what’s happening.

A good idea would be to incentivize customers to like you more by giving them special treatments, ultimately, increasing your chances of turning them into advocates.

That’s exactly what Booking.com is doing with their best customers through their Genius program.

2. Offer a personalized experience

 94% of businesses believe that personalization is critical to current and future success.
Let’s take a look at a case study we’ve made for Avon. Based on online surveys, the data showed that the most important barrier women had in order to buy from Avon was their distrust that the make-up will match their eyes color. 

So, an actual beauty expert showed up on a triggered overlay to help them out:

The website displayed only relevant products for their eyes color, remaining consistent on the checkout:

The results for personalization experiments speak for themselves.

3. Offer free returns

Free returns mean additional costs for you. But these costs need to be considered together with the extra conversions they bring and the potential to boost the retention rate. 
However, to identify to whom you should offer free returns and to optimize the kind of products you are selling, you need to do deep diving into data. 

 Zappos found out that people who regularly return items are their best customers. Those Zappon clients who buy the most expensive products are also the ones with an orders return rate of 50%.

“Our best customers have the highest returns rates, but they are also the ones that spend the most money with us and are our most profitable customers.  – Craig Adkins of Zappos.

4. Address the reasons why orders are returned

For fashion e-commerce stores, one of the most frequent reasons items get returned is the size. So many stores have implemented fitting tools and virtual wardrobes that make up for the fact that customers cannot try on the clothes before buying.

Shoefitr, an app that helps online shoe shoppers find proper fitting footwear, managed to reduce the fit-related returns of an online footwear retailer by 23%.
Another example is  GlassesUSA who lets its customers upload a picture of them and try on glasses before purchasing. And this strategy can be implemented for non-fashion related online shops as well. MyDeco 3D room planner is another tool that helps online shoppers try out room looks before buying furniture.

5. Provide multi-channel returns

The fit is not the only reason items are returned. Since customers will return products anyway, you should make their experience as easy as possible. If you are an omnichannel retailer, allowing customers to return items bought online to brick and mortar stores is a must.

Customers really appreciate the flexibility and convenience of multi-channel returns and are more likely to become loyal customers. And think about it this way: when you allow your customers to return items in store you also take advantage of the opportunity to upsell or cross-sell;  a well-thought multi-channel return strategy rarely lets customers leave the store empty-handed.

6. Reward your most loyal customers

Offering your most loyal customers some kind of reward is a powerful way to strengthen brand affinity. Your loyal customers are your brand ambassadors. Your influencers. Some retailers offer special discounts or private sales, but it can be much simpler than that (like responding to your customers’ tweets).

ASOS has another strategy worth copying: creating an exclusive community for people who love the brand. The retailer launched #AccessAllASOS, a community that provides members exclusive access to news and events.

7. Focus on your ideal customers

The best in class retailers pay special attention to their VIPs by running RFM segmentation. RFM is a way to segment your customers according to their buying behaviors:

– Recency – How recent is the last order?
– Frequency – How often that customer bought?
– Monetary value – What is the total revenue you got from each customer?

Loyal customers are valuable, but loyal customers who also spend a lot of money with you are even more valuable.

Here are a few benefits you can offer them after you will find out who they are:

  • Priority Support
  • Free returns
  • Free delivery
  • Tailor-made offers
  • Packing and dispatching their orders first;
  • Notifying them about new or limited products first;
  • Sending them personalized lookbooks, exclusive previews, and presentations;
  • Assigning them personal shopping assistants who can help them plan their wardrobes.
  • Thank-you notes or gifts

8. Provide outstanding customer service

I don’t think there’s a brand out there that purposely provides bad service to its customers. Nonetheless, there aren’t many retailers that provide excellent customer service either. But they should. A study by Zendesk revealed that consumers rank quality (88%) and customer service (72%) as the two biggest drivers of loyalty.

The same study also revealed that providing exceptional customer service 24/7 is the best way a company can build customer loyalty.

However, few companies are making efforts to understand how their customers are feeling after the purchase using customer surveys. 

Measuring NPS or customer satisfaction or customer effort is an effortless way to stop broadcasting, but establishing a two-way communication model between you and your customers. 

Moreover, if you mix RFM with NPS, you can reveal some hidden reasons why your CLV is being affected. Putting your customers first will not be an option in the near future. It will be a vital thing to do if you want your company to survive and thrive.

Most businesses try to reduce costs associated with customer support so they make it difficult for customers to actually speak to someone on the phone (marketers who have tried at least once to contact Facebook Ads support can surely understand how frustrating this feels).  

So improving your customer service will also boost your customer retention rate and customer lifetime value. Also, social media is an increasingly popular support channel and many brands have a Twitter feed dedicated to resolving customer queries.

9. Acquire sticky customers 

After you identify your ideal customer profile through RFM segmentation, you can improve customer acquisition by targeting the customers that are more likely to buy again from you. 

You may think that you can find this kind of demographics data in your Google Analytics or Facebook Insights. But, the truth is that what you are seeing there is the data regarding your visitors, not your customers. And the customers are what matters to you. Moreover, your best customers (true lovers) are the ones you should really focus your customer acquisition efforts. 

In this example, it looks like the ideal visitors to target are between 26 and 55 years old

The most  company should focus more on other cities than London 

10. Build a subscription model

You may not have control over the delivery process, but you can still improve how the package looks like.  Birchbox, a company that offers monthly subscription boxes of cosmetic samples, delivers a personalized selection with a beautifully written letter in a branded box made out of Birch trees.

Another well-known retailer who invests in his packaging is Net-a-Porter. Many customers are so in love with their beautiful boxes that they can’t help posting their orders everywhere on social media (which, by the way, is a great method to increase customer loyalty and advocacy).

11. Diversify your product offering

As you can see, optimizing your customer lifetime value goes hand in hand with optimizing your retention rate. And the retention rate is improved when you make your customers’ lives easier.

If you identify the buying patterns of your most important customers, you can free them from the need to use other websites or channels to acquire the goods they are in need.

Uber is one of the companies that have diversified beautifully.

From the need to get a ride to the need to get food delivered at your door.

Customer lifetime value is more important than you think. It impacts customer retention rates, it helps boost brand loyalty, and, overall, ensures your business remains profitable and increases the overall business valuation.  So, if you’re not actively monitoring and trying to improve your CLV, now is the time to start!

Source: https://www.omniconvert.com/blog/customer-lifetime-value-clv-how-to-calculate-measure-and-improve-it

Billionaire Jeff Bezos: To live a happy life with no regrets by age 80, ask yourself these 12 questions

Jeff Bezos speaking at the 2016 Code Conference

What’s the secret to a  long, happy and successful life ? That seems to be a question we ask ourselves over and over. Amazon CEO Jeff Bezos  has shared his thoughts on this very topic  many times  — and he might just be onto something.

“When you are 80-years-old, and in a quiet moment of reflection narrating for only yourself the most personal version of your life story, the telling that will be most compact and meaningful will be the series of choices you have made,” Bezos said in his 2010  commencement speech  at Princeton University.

The purpose of his speech, called “We Are What We Choose,” was to emphasize the difference between gifts and choices: “Cleverness is a gift, kindness is a choice. Gifts are easy — they’re given after all. Choices can be hard. You can seduce yourself with your gifts if you’re not careful, and if you do, it’ll probably be to the detriment of your choices.”

In other words, no matter how successful you become, what you’ll end up caring about the most in hindsight isn’t the number of zeroes in your bank account, but it’s the choices you made to get where you are. But without the benefit of hindsight, how can we tell if we’re on a path that we’ll be proud of when we look back on our lives 10, 20 or 30 years from now?

The constant struggle of making choices

In his talk, Bezos recounted the period of time in which he first came up with the idea to start an online bookstore business (which would later become what the entire world now knows as Amazon).

At the time, he knew that moving forward with the idea would be a very risky move.

Bezos even asked his boss, who he said was “brilliant” and “much admired,” for advice. He was told that although it “sounded like a very good idea, it would be an even better idea” if Bezos didn’t already have a good job.

“It really was a difficult choice, but ultimately, I decided I had to give it a shot. I didn’t think I’d regret trying and failing. And I suspected I would always be haunted by a decision to not try at all,” Bezos said. “After much consideration, I took the less safe path to follow my passion, and I’m proud of that choice.”

The ‘perfect’ choice doesn’t exist

The truth in life is that we’ll all make choices we end up regretting. It’s called failure, and failure can be a good thing because it teaches us how to be better. But as we grow older, our goal should be to minimize the number of failures that lead to regret.

“In the end, we are our choices. Build yourself a great story,” he said towards the end of his speech.

To build a great story, Bezos offered 12 questions and urged everyone to think deeply about them:

  1. How will you use your gifts?

  2. What choices will you make?

  3. Will inertia be your guide, or will you follow your passions?

  4. Will you follow dogma, or will you be original?

  5. Will you choose a life of ease, or a life of service and adventure?

  6. Will you wilt under criticism, or will you follow your convictions?

  7. Will you bluff it out when you’re wrong, or will you apologize?

  8. Will you guard your heart against rejection, or will you act when you fall in love?

  9. Will you play it safe, or will you be a little bit swashbuckling?

  10. When it’s tough, will you give up, or will you be relentless?

  11. Will you be a cynic, or will you be a builder?

  12. Will you be clever at the expense of others, or will you be kind?

While these questions don’t provide a foolproof recipe for happiness, they can guide us in making choices that will ultimately help us live a life we’re proud of.

Not all of us will end up reaching the same height of success as Bezos, a self-made billionaire and the richest person in the world. But there’s no reason we can’t — or shouldn’t — challenge ourselves to build a story worth telling.

Source: https://www.cnbc.com/2019/04/05/amazon-billionaire-ceo-jeff-bezos-ask-yourself-these-12-questions-to-live-a-long-happy-life.html