LSA19: How to Leverage the Power of Connected SMB Customer Data
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1) The document discusses how connecting customer data can help small and medium-sized businesses (SMBs) by providing a more complete view of customers to better understand their needs and increase repeat purchases and loyalty. 2) It notes that loyal customers are much more profitable than single-purchase customers, and that maximizing customer lifetime value should be a top priority by focusing on customer retention and moving leads to repeat purchases. 3) The case studies presented show how connecting customer data allowed companies to decrease time between first and second purchases significantly, increase profit margins, and generate more revenue and profits from existing customers.
LSA19: How to Leverage the Power of Connected SMB Customer Data
- 1. How to Leverage the Power of Connected SMB Customer Data Jay Bean, CEO FreshLime
- 2. As an industry we’ve set Local SMB’s up for FAILURE!
- 3. Disconnect – They need customers
- 4. Disconnect – But they just get leads BTW- Lead costs have increased over 3X in the past 8 years
- 5. A shared focused on “the customer” lifecycle is necessary First Purchase Becomes Customer – High Cost – Low Value – Low Cost – High Value
- 6. Benefits of a connected customer data strategy
- 7. What is customer data & how can it help SMB’s?
- 8. Customer data points are taken from a local services company • Company has been in business for 8-10 years • Over 13,000 residential and commercial customers • 8600 Single Visit, 4400 repeat or loyal customers • Over 25,000 paid customer visits • General repairs, Emergency Service, & Installation
- 9. It goes beyond leads, contacts, or customer records?
- 10. What else do we know about those “Valuable” contacts?
- 12. Today every customer contact looks the same Do They All Look The Same?
- 13. Chris Johnson W/ NAT Chris Johnson W/ NAT Chris Johnson W/ NAT Basic Customer Contact Records
- 14. Most SMB’s have one customer segment One Segment of Customers “I hope they come back.”
- 15. Chris Johnson W/ NAT LTV $175 Chris Johnson W/ NAT LTV $1750 Chris Johnson W/ NAT LTV $10,700 Basic Customer Contact Records w/ Transactions
- 16. Multiple Customer Segments Some segmentation gives additional understandingOne Segment of Customers “I know some came back.”
- 17. Chris Johnson Single Visit LTV $175 - Residential Customer - Consultant - Income ~$750K - Home Value $6.05M - Home Town: Las Vegas - Married - 49 year old (Male) - iPhone, iPad - Active on Facebook - Likes to Travel - MBA Harvard - Left Feedback - Opened email 12/13/2018 - Email opt-in Christine Johnson Repeat Customer LTV $1750 - Residential Customer - Single - Income Unknown - Home Value: $72K - Active on Facebook - 54 Years Old (Female) - Likes Camping - iPhone User - Home Town: Grapevine TX - Student at ASU - Fluent in Spanish - Left Google Review 9/13/2017 - Opened email 10/17/2018 - Visited Website 10/17/2018 - SMS opt-in - Email opt-in Christopher P. Johnson Single Customer LTV $10,700 - Commercial Customer - Handy Man - Income $95K - Home Value: 297K - Married with 3 kids - 31 Years Old (Male) - 2 Car -2012 Toyota Van, 2013 Ford F150 - Android User - Facebook User but not active - Eats Out Daily - Home Town Denver CO - Dream Vacation: Disneyland - SMS opt-in - Email opt-in Enhanced 360-degree view of the Customer
- 18. Personalized engagement on a one-on-one basisMultiple Customer SegmentsOne Segment of Customers Segment of One “We can predict who will come back.”
- 19. $0.00 $750.00 $1,500.00 $2,250.00 $3,000.00 Single Repeat Loyal AOV LTV on a Loyal Customer is 12x more than Single
- 20. 60-80% of 1st time purchasers will never repeat 2.05 Timing is critical to move a lead to a first purchase, and a first time purchase to a repeat customer.
- 21. 1. We knew the likelihood of getting a repeat purchase after 100 days drops significantly. 2. We knew 53% of repeat customers become loyal customers within 12 months. 3. We knew loyal customers home values are 11% higher than repeat customers. 4. We knew you lose money on 1st time purchasers that don’t repeat. 5. We knew 60-80% of all 1st time purchasers would never purchase again. Would we do anything different? What if…
- 22. Connected customer, transaction, & engagement data was used to increase repeat purchases. 0 20 40 60 80 100 120 140 160 180 200 2016 Without CDP 2018 With CDP Decreased time between 1st & 2nd purchase by 274%
- 23. 18 Months Ago The Results Were Compelling
- 24. Today The Results Are Even More Compelling Rev: $2855 Profit: $798 Rev: $1003 Profit: $226 Rev: $234 Loss: $51 $6 60% of customers $200 Profit Margin Increased from 20% to 28%
- 25. WHY the “CUSTOMER” IS SO IMPORTANT 80% of a SMB’s future profits will come from just 20% of its existing customers
- 26. WHY the “CUSTOMER” IS SO IMPORTANT Increasing customer retention rates by 5% increases profits by 25-95%
- 27. WHY the “CUSTOMER” IS SO IMPORTANT The probability of converting an existing customer is 60-70%, while the probability of converting a new prospect is only 5-20%
- 28. Clearly, maximizing the lifetime value of every customer who reaches Conversion should be top-of-mind. The goal should be to get the customer into that spiral and make their experience so amazing they never want to leave.