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The Lifetime Value Of A Customer
Thursday 29th October 2020
You know how many customers you have; but do you know how many of them are repeat customers - customers that return to your products or services repeatedly?
A major expense faced by any business is gaining customers, so it certainly makes sense to retain them and keep your company as their go-to choice. But how do you know who your most loyal customers are, and how do you keep them engaged?
How can I measure my return rate?
There are many ways to do this and to some extent it will depend on the systems you have available and your actual business model. For example, a subscription-based business can simply measure all of the customers purchasing a repeat subscription. However, it is more complex for product-based businesses and it involves knowing when it would be reasonable to expect a loyal customer to make a further purchase.
Generally, you will need to calculate the average length of time between a customer buying for the first and second time, as well as the standard variation. Add two times the standard variation to the average time and you are likely to have captured 95% of your repeat customers. Divide this by the number of non-repeat buyers and you have your estimated ratio for repurchasing customers. This will give you an indication of your customer loyalty and the lifetime value you have from each customer.
Why is customer loyalty important?
It shows a customer feels good about your company, your product and the service you provide. If a customer feels good about what you have to offer, they tell others and you gain free promotion for your company. Buying from a business that someone else uses and praises is how many people choose to shop these days. They want the security of knowing they have made a good choice and recommendations do just this.
How to grow your repurchase rate?
Increasing this rate should be a focus for your business and repeat door drop marketing is a great way to inform customers of your latest and repeat purchase campaigns and remind customers of what you can do.
There is certainly room for improvement in any repurchase rate, and campaigns to maximise customer lifetime value are key to good planning. Running repeat purchase campaigns will show your customers that you value their loyalty to your brand, and they can benefit when buying from you again.
While you can tempt new customers in by ensuring that your door drop marketing campaign contains an enticing offer that will grab them initially and give them a taster as to what you can offer, giving exclusive offers to repeat customers can help to build brand loyalty. Including offers that target new clients as well as rewarding your regular buyers could help to entice new users even more. They will then be able to clearly see that the offers will follow when they continue and purchase again.
Door drop marketing grabs the interest of potential customers, as it literally lands at their feet. Having a constant reminder when potential clients are busy can make your company the first to hand, the easy option, and a purchase could be made before they have investigated others. Today's busy world often means that it is only those businesses providing such 'in your face' marketing techniques are those gaining and retaining customers.
We at Design Print Distribution Group are industry leaders in door drop marketing. We offer both a print and distribution or full start to finish service to ensure that you maximise your leaflet campaign for both new and repeat-targeted marketing, and with your leaflets only landing with a maximum of one other they certainly won't get lost in the pile!