5 ms·

Pump up your customer lifetime value with email remarketing

65 points by chexton 14y ago

patio11 14y ago
This article is really worth your time.
- chexton 14y ago
  Thanks Patrick :).
rscale 14y ago
It never ceases to amaze me how many organizations don't make a meaningful effort to accurately measure and focus on LTV. This lack of focus means that opportunities are missed as those organizations fail to identify and address high-value segments, while also overpaying to acquire customers from low-value segments. It's great to see some actionable tactical advice on using a specific tactic to increase LTV, not just because it's a good advice, but because it's a clear reminder about the importance of LTV as a key metric.
- chexton 14y ago
  I definitely thought this as I was writing these posts. There is a fair amount of quality analysis out there when it comes to LTV but not as much as you'd expect. The truly quality information comes from thought leaders like Jason Cohen and you can understand why he (or anyone with a rigorous scientific approach to customer acquisition) does so well. There is definitely lots of room for people to focus more heavily on LTV. It's an extremely interesting, complicated and powerful number.
edhallen 14y ago
From Patrick's course to articles like these, it's great to see the growth in interest in this. The challenge with LTV (as with all analysis) is making sure that you can translate it into action. For many companies, the barrier is just getting started. On a broader note, it's great to see how many companies are tackling customer lifecycle management (though with very different approaches and different end markets). It's time people stopped building one-offs for this. A few companies I know of (the first of which I'm a co-founder of): - Klaviyo - Vero - Customer.io - Reamaze - Intercom - Totango - Mixpanel
- chexton 14y ago
  Absolutely, there is a real lift in interest in this space right now. It's a big market with lots of different segments so the future will definitely be interesting!
- sudonim 14y ago
  Hi Ed, Colin, co-founder of Customer.io here. We haven't chatted yet, but I totally agree about the growing interest in this space helping all of us. I'm thrilled to be working with you all as peers. I met Des from Intercom recently -- stellar guy. And from what I know of Chris and James at Vero, they seem great too. Haven't met the rest of you guys yet, but if you'll be at the "Inbox Love" conference next week in SF, I'd love to chat there.
losvedir 14y ago
We just hooked up our KISSmetrics events to start tracking "billed" events in order to use its revenue tab, which I believe includes customer LTV estimations. However, it takes a week before it has enough data to start showing anything, so I'm just sitting here eagerly waiting. Anyone have any experience using that particular feature of KISSmetrics? Is it any good?
sgrove 14y ago
I've been meaning to give Vero a try for awhile, it comes highly recommended from some friends, and we have a lot of users who're using it along with Zenbox as well. Awesome to see them providing good material - I especially like the examples. A question though - at what point is your product developed enough to differentiate on plans? When should you focus on tracking LTV - MVP? 0 customers? 1? 10? 100? I'd like to see a "Ok, you're just getting started, here's what you're going to need to put in place immediately, and here are the signs that you need to look at the next steps after that." Any chance of that Chexton? :)
- chexton 14y ago
  Always great to hear that we've been recommended by some friends! Absolutely a relevant question. I was going to put a few disclaimer paragraphs at the top but took them out at the eleventh hour because this post was already pretty long. For the sorts of tactics in this post I'd say you definitely need product/market fit and a steady stream of incoming customers. Depending on the price of your products, the product mix and your target market this could be 50, 500 or 5000 customers/potential customers. It's more likely to be the upper two, in this case as you need a good sample size to get see any change and know that it's statistically relevant. After I get through this series of post (or in the meantime, if I get a chance) I'll put together a post that addresses exactly what you've asked for: what 3-5 lifecycle emails should you ABSOLUTELY be sending from the word go and at what point should you implement new strategies like those mentioned here. It'd be my pleasure :). chris AT getvero.com if you ever want to get in touch and chat directly too.
  - wikwocket 14y ago
    If anyone wants a good primer for a "top 4 lifecycle emails to send," I found patio11's post on the customer.io blog to be very helpful: http://customer.io/blog/What-are-Lifecycle-emails-patio11-patrick-mckenzie.html http://customer.io/blog/What-are-Lifecycle-emails-patio11-pa...
graeme 14y ago
I'm in the test prep industry, where customers only stay active for 2-6 months (3 is typical). This radically changes LTV, as we don't have multi-year timeframes. We currently sell a course as a one-off purchase. We could move to a monthly model, but there are fairly fixed licensing costs. How would you increase LTV in an industry with quick turnover?
- chexton 14y ago
  Definitely a shorter time frame changes things. Trying to lengthen the time your customers stay with you sounds pretty irrelevant in your case (without knowing the ins and outs of your business). Do you sell just the one course? Some of these tactics could help you up-sell them on other offerings of yours. Alternately focusing on getting more customers who abandon your funnel could be a quick win. See last week's post: http://blog.getvero.com/how-flightfox-doubled-their-remarketing-email-conversions/ http://blog.getvero.com/how-flightfox-doubled-their-remarket... chris AT getvero.com if you want to go into real depth / just have a chat: I'd love to help and get you some more sales personally.
  - graeme 14y ago
    Thanks, just sent you an email with more detail.
- deleted 14y ago
  [deleted]
- patio11 14y ago
  Test bundles. Given that they're sold on giving you their CCs, many would be happy to e.g. pay more for a one-hour chat with you, a complementary good, an automatic skills test, etc etc etc. You can easily 2x average sale size this way.
- btilly 14y ago
  Send your past customers an email series starting about 11 months after their initial signup offering them money if they get a friend to sign up. You might not get another sale from the same person, but what is that word of mouth worth to you?
programminggeek 14y ago
I think that it is an atrocity that most companies do such a bad job of tracking from ad spend to clicks to leads to sales to recurring sales. If you know the LTV of a customer and the acquisition cost, you can scale a profitable marketing campaign basically to the limit of the channel or your cash depending on how fast you turn over money. Also tracking the lifetime value of clients, you could find that what is an unprofitable channel in the short-mid term becomes profitable after some point down the road, or not at all. Knowing is half the battle!
TOGoS 14y ago
How about you don't?
tocomment 14y ago
I'm curious if any of these strategies can be applied to real-world service businesses, for example a pre-school?
- loumf 14y ago
  Automating email to anyone with email addresses is the easy part, and of course, that can be done. The hard parts are: 1. Getting email addresses -- for SaaS businesses, it makes sense to ask and get the address -- it's work for most any other business. 2. Getting engagement or other usage information -- these systems usually try to tie the messages to behavior. It would make sense to make as much of the experience of being a parent manageable via a web site where they would register and engage. A pre-school is perfect for this because parents think about them all day long and consider it important. It's harder for services that people use, but aren't core to their lives (so aren't going to engage with it).

65 points by chexton 14y ago

patio11 14y ago

This article is really worth your time.

chexton 14y ago
Thanks Patrick :).

rscale 14y ago

It never ceases to amaze me how many organizations don't make a meaningful effort to accurately measure and focus on LTV. This lack of focus means that opportunities are missed as those organizations fail to identify and address high-value segments, while also overpaying to acquire customers from low-value segments. It's great to see some actionable tactical advice on using a specific tactic to increase LTV, not just because it's a good advice, but because it's a clear reminder about the importance of LTV as a key metric.

chexton 14y ago
I definitely thought this as I was writing these posts. There is a fair amount of quality analysis out there when it comes to LTV but not as much as you'd expect. The truly quality information comes from thought leaders like Jason Cohen and you can understand why he (or anyone with a rigorous scientific approach to customer acquisition) does so well. There is definitely lots of room for people to focus more heavily on LTV. It's an extremely interesting, complicated and powerful number.

edhallen 14y ago

From Patrick's course to articles like these, it's great to see the growth in interest in this. The challenge with LTV (as with all analysis) is making sure that you can translate it into action. For many companies, the barrier is just getting started. On a broader note, it's great to see how many companies are tackling customer lifecycle management (though with very different approaches and different end markets). It's time people stopped building one-offs for this. A few companies I know of (the first of which I'm a co-founder of): - Klaviyo - Vero - Customer.io - Reamaze - Intercom - Totango - Mixpanel

chexton 14y ago
Absolutely, there is a real lift in interest in this space right now. It's a big market with lots of different segments so the future will definitely be interesting!
sudonim 14y ago
Hi Ed, Colin, co-founder of Customer.io here. We haven't chatted yet, but I totally agree about the growing interest in this space helping all of us. I'm thrilled to be working with you all as peers. I met Des from Intercom recently -- stellar guy. And from what I know of Chris and James at Vero, they seem great too. Haven't met the rest of you guys yet, but if you'll be at the "Inbox Love" conference next week in SF, I'd love to chat there.

losvedir 14y ago

We just hooked up our KISSmetrics events to start tracking "billed" events in order to use its revenue tab, which I believe includes customer LTV estimations. However, it takes a week before it has enough data to start showing anything, so I'm just sitting here eagerly waiting. Anyone have any experience using that particular feature of KISSmetrics? Is it any good?

sgrove 14y ago

I've been meaning to give Vero a try for awhile, it comes highly recommended from some friends, and we have a lot of users who're using it along with Zenbox as well. Awesome to see them providing good material - I especially like the examples. A question though - at what point is your product developed enough to differentiate on plans? When should you focus on tracking LTV - MVP? 0 customers? 1? 10? 100? I'd like to see a "Ok, you're just getting started, here's what you're going to need to put in place immediately, and here are the signs that you need to look at the next steps after that." Any chance of that Chexton? :)

chexton 14y ago
Always great to hear that we've been recommended by some friends! Absolutely a relevant question. I was going to put a few disclaimer paragraphs at the top but took them out at the eleventh hour because this post was already pretty long. For the sorts of tactics in this post I'd say you definitely need product/market fit and a steady stream of incoming customers. Depending on the price of your products, the product mix and your target market this could be 50, 500 or 5000 customers/potential customers. It's more likely to be the upper two, in this case as you need a good sample size to get see any change and know that it's statistically relevant. After I get through this series of post (or in the meantime, if I get a chance) I'll put together a post that addresses exactly what you've asked for: what 3-5 lifecycle emails should you ABSOLUTELY be sending from the word go and at what point should you implement new strategies like those mentioned here. It'd be my pleasure :). chris AT getvero.com if you ever want to get in touch and chat directly too.
- wikwocket 14y ago
  If anyone wants a good primer for a "top 4 lifecycle emails to send," I found patio11's post on the customer.io blog to be very helpful: http://customer.io/blog/What-are-Lifecycle-emails-patio11-patrick-mckenzie.html http://customer.io/blog/What-are-Lifecycle-emails-patio11-pa...

graeme 14y ago

I'm in the test prep industry, where customers only stay active for 2-6 months (3 is typical). This radically changes LTV, as we don't have multi-year timeframes. We currently sell a course as a one-off purchase. We could move to a monthly model, but there are fairly fixed licensing costs. How would you increase LTV in an industry with quick turnover?

chexton 14y ago
Definitely a shorter time frame changes things. Trying to lengthen the time your customers stay with you sounds pretty irrelevant in your case (without knowing the ins and outs of your business). Do you sell just the one course? Some of these tactics could help you up-sell them on other offerings of yours. Alternately focusing on getting more customers who abandon your funnel could be a quick win. See last week's post: http://blog.getvero.com/how-flightfox-doubled-their-remarketing-email-conversions/ http://blog.getvero.com/how-flightfox-doubled-their-remarket... chris AT getvero.com if you want to go into real depth / just have a chat: I'd love to help and get you some more sales personally.
- graeme 14y ago
  Thanks, just sent you an email with more detail.
deleted 14y ago
[deleted]
patio11 14y ago
Test bundles. Given that they're sold on giving you their CCs, many would be happy to e.g. pay more for a one-hour chat with you, a complementary good, an automatic skills test, etc etc etc. You can easily 2x average sale size this way.
btilly 14y ago
Send your past customers an email series starting about 11 months after their initial signup offering them money if they get a friend to sign up. You might not get another sale from the same person, but what is that word of mouth worth to you?

programminggeek 14y ago

I think that it is an atrocity that most companies do such a bad job of tracking from ad spend to clicks to leads to sales to recurring sales. If you know the LTV of a customer and the acquisition cost, you can scale a profitable marketing campaign basically to the limit of the channel or your cash depending on how fast you turn over money. Also tracking the lifetime value of clients, you could find that what is an unprofitable channel in the short-mid term becomes profitable after some point down the road, or not at all. Knowing is half the battle!

TOGoS 14y ago

How about you don't?

tocomment 14y ago

I'm curious if any of these strategies can be applied to real-world service businesses, for example a pre-school?

loumf 14y ago
Automating email to anyone with email addresses is the easy part, and of course, that can be done. The hard parts are: 1. Getting email addresses -- for SaaS businesses, it makes sense to ask and get the address -- it's work for most any other business. 2. Getting engagement or other usage information -- these systems usually try to tie the messages to behavior. It would make sense to make as much of the experience of being a parent manageable via a web site where they would register and engage. A pre-school is perfect for this because parents think about them all day long and consider it important. It's harder for services that people use, but aren't core to their lives (so aren't going to engage with it).