5 steps to grow lifetime customer value

When you look at the world’s most successful brands, there’s one quality that stands out: each of them has a strategy in place to maintain long term profitability through long lasting relationships with their customers that result in increased transactions over time.

While this seems obvious at first glance, actually getting in this position is much easier said than done. Most brands simply don’t have the products, services, content, experiences, or support, to retain customers year after year – or at least they don’t think that they do.

Since typical customers aren’t going to buy the same product or service again until they need to, brands are left with the question of how they can create sequential value offerings that go beyond standard renewal fees or occasional upgrades.

To solve this dilemma, brands need to adopt the mindset that lifetime value is more than a financial and strategic KPI. They need to see it as a business strategy that needs critical investment decisions and strategies through the customer and buyer’s journey that goes far beyond acquisition, media or “cold” engagement.

Using the "rundle" to accelerate CLV

The rundle, which is a key portion of Professor Galloway’s Strategy Sprint, is one tool for building lifetime customer value.

This approach boils down to a subscription that integrates several additional services to create irresistible offerings.

Amazon is a perfect example. The benefits of subscribing to Amazon Prime go beyond faster, less expensive delivery. The company also includes a wide variety of services to sweeten the deal, including subscriptions to their streaming video service and discounts at Whole Foods. As a result, subscribers are hard-pressed to cancel their subscription when they’re getting so much value from it, so they let it renew month after month.

This great strategy requires a whole mindset change that can be complemented and customized for non-subscription business models too. That leads us to a framework I developed to help brands stay focused on customer needs through their lifecycle evolution: P.E.S.C.A.

The P.E.S.C.A. Framework

The P.E.S.C.A. Framework features 5 strategic perspectives that can help your brand identify new ways to create lifetime value relationships, build engagement, and grow transactions.


The model’s components represent the strategies and decisions that you need to consider:

Step 1: Product

What upcoming products or services give us an opportunity to present an upsell or cross sell? What are the ideal buying sequences and data enrichment strategies between those?

For an example, let’s look at Apple. Your first buy might be an iPhone, then an Apple Watch, followed by an iPad, Macbook, Apple TV, and so on. Apple learns from the buyers’ behavior to recommend new products or renewals.

Step 2: Experiences

What activities will enhance our customer's perceived experience in physical and digital contexts? How will we amplify and connect them?

This can look like a welcome strategy email sequence to surprise the new customer, or special events, customized content, and early access to new offerings.

Step 3: Service

How does customer service excellence and customer intelligence create and reinforce each interaction that our customers initiate? How does that information make it easier to serve them better the next time?

When we update a form or have a customer service interaction, the next time we make contact with brand channels we’ll be addressed by our name and past registered behavior. This ties into Scott Galloway’s Benjamin Button strategy, wherein after each customer interaction, a company can grow smarter.

Step 4: Content

What types of content will we need in each interaction to connect with our audience, prospects, and customers in their journeys?

Whether it’s flexible sales scripts or updates to platforms and format, customized multimedia resources can communicate on each channel without losing impact or relevance.

Step 5: Allies

What partnerships do we have, and which partnerships do we need to make in order to enhance our product, services, content and experience offerings if our offer is not suitable on its own?

Uber, for example, makes partnerships with brands to offer samples and benefits to their customers, which heightens their overall experience and keeps them closer to Uber.

Remember: Keep asking questions

Responding to this framework can provide long term benefits, but it might not always be enough, especially since what you offer will likely shift over time.

To stay on the right path, keep asking yourself the big questions: “What comes next?”, “When?” and “Who is it for?”

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Want to build customer lifetime value at your company? Check out our workshop, How to Win Your Best-Fit Customers with Google's Neil Hoyne, in your free account.

About: 

Juan Pablo Del Alcázar Ponce

Juan Pablo Del Alcázar Ponce is a Section4 "super sprinter" and an expert in customer retention, growth strategy, and digital transformation. He has decades of experience in acquiring and retaining customers, managing the marketing mix, and developing personalized experiences for his audience. He's also the first Section4 student to complete all five of our certificate programs. ‍

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