Why You Should Aspire to Drive Customer Lifetime Value—Not ‘Just’ Upsell Customers

Cross-selling and upselling have formed the bedrock of brand aspirations for their existing customer base for a long time now. For several years, it was also one of four economic pillars (along with customer acquisition, customer retention, and lowering cost to serve) my colleagues and I used to frame customer experience (CX) programs for our clients. Using these pillars allows companies to spell their programs out in financial terms, which is essential to quantifying their impact and gathering support.

While cross-selling and upselling existing clientele is certainly important, there’s actually a much more holistic (and ambitious) way to approach new business opportunities within your customer base: drive customer lifetime value (CLV). Focusing on driving customer lifetime value won’t ‘just’ help with identifying upselling opportunities—it will facilitate and create deeper human connections with customers and ensure mutually beneficial relationships built on Experience Improvement (XI). Let’s take a closer look.

Casting a Wider Net

Keeping customers around for as long as possible to sell them as much as possible is a great aspiration, but as I’m sure you’re aware, it’s much easier said than done. However, I’ve been advising companies on this very topic for a long time, and while it’s not simple, what follows are a few best practices that can help you continuously and consistently achieve that goal in ways that are mutually beneficial to you and your clients.

First, if you haven’t already, expand the data sources that you use to understand what your customers are saying and how they perceive you. Many of the brands I’ve worked with for a long time are slowly coming to the realization that they cannot  stick solely to surveys or another singular data source to get customer insights and input. And, while surveys will continue to be important, they only give you part of the picture. Expanding your data repertoire to such sources as purchasing data, location-tracking data, web searches, social media, and online reviews is a must.

Next, it’s vital to take the long view when looking at your customer relationships. This may seem like an obvious tip, but you might be surprised at how many brands get caught up in the lure of “what can I sell you today?” without considering what seeds to plant for even more success tomorrow. Equally important is to understand how your competitors view this dynamic and what, if anything, they’re also doing to be proactive when it comes to building lifetime value.

Letting Customers Tell Success Stories

If there’s one thing I loved doing when I was on the client side as a CX program owner, it was telling  stories. I can speak from experience when I say that letting customers do the success storytelling is an amazingly powerful way to build lifetime value with them. Good storytelling can bring numbers to life, further personalize customers’ experiences, and it gets attention because customers and even employees generally relate more to stories told by, well, other customers.

Executives and program stakeholders love customer-told success stories too. Letting customers do the talking helped me gain mindshare, helped me secure budget, and created the sponsorship that I needed to help make my program better. This strategy also helps executives feel a human connection to your CX program; they love to hear stories about how the organization created a meaningfully improved experience for another person.

The Customer Lifetime Value Journey

The tips I’ve outlined here will help you start (or jump-start) your customer lifetime value journey, but how do you keep the ball rolling? What other methods out there can brands and organizations leverage to go beyond ‘just’ cross-selling and upselling?

You can find all of that and more by clicking here and reading my latest point of view article on customer lifetime value. You’ll learn what else your organization needs to do to create Experience Improvement and a more human connection to your existing customers!

How a Global Grocer Turns CX Feedback Into Realized Customer Spend Targets

The Context

A global grocery retailer was facing the uncertainties of COVID-19 and through their struggle, they found a perspective
that helped them focus on forwarding progression throughout the pandemic. The grocery chain is known for its simple and
continuous efforts to always improve, and that consistent effort through the decades has helped to expand its market position.
The ongoing and steady growth is proof that the brand’s intention where quality is concerned has greatly paid off.

The Opportunity

COVID brought a heightened sensitivity and sense of uncertainty to most of the global grocer’s guests and staff. Along with the
rest of the world, the retailer hadn’t experienced a disruptor of this magnitude, which left most scrambling to understand how to
best serve their guests and help them feel safe while keeping store doors open.

And while they faced an immense challenge, the retail leader also saw an opportunity to emerge into a post-COVID world equipped with reliable data that would revitalize its customer experience, improve customer retention, and solidify brand loyalty. Moreover, the chain decided to challenge locations to optimize customer experience and increase customer spending.The chain looked at its customer experience through the lens of its business goals. They analyzed key business metrics related to
location eciency, staff measures, and stock availability. The big question was, how do customer experience metrics relate to
other KPIs, and which customer metric should they focus on to drive customer spending? That’s when they turned to their team
at InMoment.

The Impact

By linking current store survey data to financial data, InMoment helped the brand pinpoint areas in specific locations that could
increase customer spending. The analysis uncovered that locations with the highest percentages of customer spend had,
higher CX scores, lower employee churn, and on average, 34.41% higher rate of positive first impression scores.

The data showed that 64% of customers left a positive in-store survey response, which correlated to an average of 11% higher
spending. With this, the retailer knew if it could improve the number of positive in-store customer survey responses by 5%,
spending had the potential to increase by +€35m* in as little as six months. The brand leveraged InMoment’s Explore and Coach tools to sort feedback at the highest-performing locations. Ultimately, the chain worked with its InMoment team to identify struggling locations and create an action plan to build opportunities for positive in-store customer experiences moving forward.

The retailer has implemented these measures as a store target in struggling locations, resulting in the proportion of customers
leaving positive in-store survey responses increasing by 3% in the first quarter of the push to meet the 5% goal equating to €21m*.

What’s Next

This global grocer continues to see significant growth as it listens and responds to customer feedback. By consistently aiming to put the customer at the heart of the business, the retailer continues forward progression through its insightful approach despite the
challenges of a pandemic.

Summary

  • 11% Spend Increase Tied to Positive In-Store Survey Metrics
  • 3% Increase in Positive In-Store Survey Score in the First Quarter
  • +€35m* Opportunity in as Little as Six Months


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