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have an interested prospect on your store you need to act with speed before the ‘monkey mind’ gets fixated on the next thing.
We have done a lot of AdWords for promotional product stores and they tend to do lead generation on product pages. It turns out that unless you respond within 10 minutes of that lead then the chances of closing that business reduce by 90%. This is because people are only in the receptive zone for buying in that instant. In that instant they are convinced they cannot live without the product or service you sell. Ten minutes later and they don’t even remember visiting your site.
So how does this help us with e-commerce and selling physical products online? Well, response rate to live chat, support emails and every interaction must be swift.
We need instant gratification. We need to:
• Help people on the checkout page within five seconds otherwise they will walk.
• Respond to contact enquiries within 10 minutes, otherwise doubts creep in.
• Have a fast website (under four seconds load time in Google Analytics).
• Deliver products faster than we promise.
• Upsell quickly whilst they are still in the ‘buying zone.’
• Do not make people wait on phone lines.
Every interaction you have with the customer, whether
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it’s digital or personal, needs to be fast and super attentive. Time is king—we are all only in the buying zone for a small window.
LET’S LOOK AT LIFETIME CUSTOMER VALUE Lifetime customer value (LTCV) is the total revenue divided by the total number of customers. This will give you the average spend per customer. Many e-commerce businesses don’t track this because it’s not a metric you can pull from Google Analytics. However, focusing on this number is important.
LTCV allows you to track things like:
• Which products purchased by first-time customers lead to the highest lifetime value?
• How do discount coupons affect lifetime value?
• Which marketing channels generate the highest lifetime value?
We want to be recruiting customers that make growth downstream easier. Too many businesses focus on getting the first sale, totally ignoring the potential future sales that a customer can generate. If you sell furniture, for example, a good salesman knows that selling a customer a chair that is part of a set almost always guarantees the customer will come back and purchase the rest of the set. If you sell a chair by itself, however, you’ll only get that one sale.
A big part of the LTCV KPI is the repeat customer rate.
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This is the average number of times a customer buys from your store. Some stores differ largely on this metric. A clothing website will see higher numbers here, but a lawnmower dealer would traditionally see a much lower number. It doesn’t matter what this metric is when you start. What matters is seeing this KPI move up. If it moves down while all other metrics rise, the long-term growth of your business will eventually derail. In fact, all these seven KPIs work like this. For true business growth, you must see all rise together, or at least remain the same while the others rise. Raising one KPI at the expense of another might lead to a great month but build an unhealthy future. Consider Black Friday, for example. If it isn’t approached the right way, it can kill your Christmas sales. These KPIs will show you why.
Some of the best ways to increase lifetime customer value are:
LOOK AT THE TYPE OF CUSTOMERS YOU’RE RECRUITING Many businesses have products that naturally lead to a repeat purchase rate, and some customers are drawn to these items. For example, if you’re selling supplements or contact lenses, these products lend themselves to repeat purchases. If you begin looking at the products you’re selling, you’ll begin to see which of your products have higher lifetime customer value. Armed with this information, you can feed it back into
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