Managing an eCommerce business is not easy. For your eCommerce store to be sustainable, you need to have a high web traffic constantly. This is not to mention the target conversion rate that you need to achieve to maintain your business.
Crafting a solid marketing is extremely important for the very reason that the success of your eCommerce business relies on the success of your marketing campaigns. Remember, since you’re not busy managing your merchandising and inventory, your focus should be invested heavily on marketing and sales.
However, if you think that all your efforts are going nowhere and your bottom line is not improving as expected, then the answer must be customer value optimization.
In this blog, we’ll be giving you an introduction on customer value optimization and how you can apply it to your eCommerce business.
Growing your eCommerce business
It’s a well-known fact that in growing an eCommerce business can be done in three ways:
- By increasing your customers
- By increasing your customers’ average order value
- By increasing the transactions of your customers
However, for you to grow your eCommerce business, you need to have a solid foundation to start with. A rock-hard foundation means a good niche, reliable supplier, and an excellent customer service.
What is Customer Value Optimization?
Customer Value Optimization (CVO) is the process of creating a good sales funnel to help you get the most out of your marketing campaigns. Regardless of the channel that you are using, CVO will help nurture your leads, every step of the way until the actual conversion.
To grow your bottom-line, you need to have a powerful sales funnel, which will catch the attention of your customers, lure them into getting to your store, and eventually purchasing an item. That’s essentially the pattern that all eCommerce brands must follow. The problem is, not everyone can do it effectively. The key here is to leverage on customer value optimization.
In CVO, the main goal is to engage your potential customers with every customer touchpoint. This practice takes a lot of practice since you need the right precision to ensure that it will actually work. In fact, over 90% of eCommerce brands utilize CVO to some extent and have actually attested that CVO has helped increase their bottom-line significantly.
7 Phases of CVO
Since we mentioned “every customer touchpoint”, it’s important that you understand what these touchpoints are and how it equates to the 7 stages of CVO.
Identifying your Niche
This is inherent in every business. By now, you should already have a good niche in mind. However, the challenge lies on the suitability of your niche to your target market. One way to look at it is to ensure that your product can be of great value to your customers.
A good niche should either solve a customer’s issue or bring huge convenience on the part of the customer. Basically, your selected products should be of great help to your customers, this is so your customers will feel good about their purchase. However, there should be a balance between the product and target market. Of course, it’s nonsense if you’re selling a very good product when at the end of the day, your target customers are not willing to spend for it.
Hence, always keep in mind that you should only aim to sell a product which the customers want and will actually spend for. Remember, in deciding which products to sell, determining its marketability is essential.
Once you find a good niche with all the essential requisites mentioned above, you can now move forward to the next stage.
Choosing a Traffic Source / Platforms
This is exactly where “every customer touchpoint” applies. It’s the stage where you select the platforms that you will be using. These are your advertisements, social media platforms, videos, blogs, email blasts, and whatnots. Selecting your preferred marketing channels is important since it will define the marketing strategies that you can run.
In selecting your traffic sources / platforms, make sure that you have the means to get analytics or insights to gauge how well you are performing in a specific channel, so you can easily track and adjust your campaign.
Create a Lead Magnet
This is going to be your initial touchpoint with your customers, so it will greatly define the next steps of your customers. This is where you will release offers that customers can’t easily reject. It can be in the form of a one-time coupon, free downloadable, or any other essential content. Remember that this is your first-ever customer touchpoint so it must be a good bait, one that will surely catch the attention of your potential customers.
Having several lead magnets for your different segments is the right way to do it. Also, if you do this right, people who usually download your free content or sign up are mostly likely to buy from you.
This is the first transaction that you will have with your customers. These are initiatives that actually drive your customers to buy or sign up with you. Typically, these initial products are sold at a loss, so your customers can break the barrier and actually try the items out with minimal risk on their part. This is the part where you will release irresistible offers, so that you can make its value obvious.
If you were indeed able to lure a potential customer in, then this is the best part. The part wherein your lead will actually buy the product or service that you are advertising. In here, it’s important that you effectively communicate the value of your brand and the quality of your products. It’s the perfect time to show your best-selling products as the chances of buying are really high at this point.
The good news is, your real profits don’t stop here…
Upsell / Upgrade Offers
Once your customers actually buy your core offer, the next best thing to do it to redirect them to upsell / upgrade pages. This will surely increase your profits to a new level. Generally, these are products that go well as an accessory or as an upgrade of the base model that you offer. For instance when you sell musical instruments, extra strings, picks, and guitar cases will come handy for the base product of guitar. Basically, these are added streams of revenue that do not require much marketing efforts as they normally go with the purchase of the base models.
This is the most important part of CVO, the actual customer retention. In this stage, the main goal is to bring customers back repeatedly. A return path typically includes abandonment cart offers, loyalty programs, or ad retargeting. Of course, the main goal of this stage is to ensure that potential customers are reminded to revisit their checkout carts. Essentially, the goal is to push the customers towards your sales funnel, so that they will purchase a tripwire or another offer they didn’t initially buy. It’s also a useful trigger alert for existing customers looking to replenish their purchases, which will surely help maintain and grow your existing customers.
What do you think of this blog? Did it help you in any way? Leave us a comment below!