Head of Behavioural Science, Mike Weir, and Technology Director, Aaron Dicks, explore Impression’s approach to Customer Value Optimisation (CVO) and how it can improve the lifetime value of your customer and how to keep them returning to your business, ultimately diving more from your marketing investment.
Mike Weir: So why are we starting to use CVO as an approach at Impression?
Aaron Dicks: So CVO or Customer Value Optimisation is something I’ve been really excited about for a long time. We’re really pleased we can now bring it to all of our customers and bring it to the market through our Digital Experience team Customer Value Optimisation is, as we see it, a sales and marketing approach where we put a little bit of additional extra effort into each potential prospect or customer to maximise the lifetime value and therefore the return on the original advertising spend that was put into generating that customer in the first place.
In our media teams, we are absolutely hyper-focussed on driving new customer acquisition for our clients. At the moment though, there’s some really challenging technology headwinds which basically mean it’s very difficult to understand whether a customer is new at the point of acquisition.
We’re also working with brands who have just differing growth challenges where actually driving growth for existing customers would be just a great win as activating new ones. I think it was Jay Abraham, but it’s also just common wisdom that says the three ways of growing a business. You can either generate more new customers, you can increase the value of a transaction, or you can increase the frequency or the lifetime value of an existing customer.
So those are the three ways and actually by taking a CVO, Value Optimisation approach to that, alongside your media buying, you’re able to really hit the nail on all three of those heads.
So through generating more new customers, that’s really the job of media planning, media buying. In terms of increasing the basket value or the sale value of the initial sale, that’s really a conversion rate optimisation tactic, which obviously is something we already work on.
Then in terms of increasing the lifetime value or the frequency of purchase, that really is a job of the CRM, CRM type activity or marketing automation as well on a scaled basis. So I think by taking this CVO approach alongside media buying, you’re really able to sort of capture every opportunity the business has to grow.
Mike Weir: That’s really interesting because, I suppose, one of the big challenges with CRO is that it’s classically seen as like a a short-term form of thinking so like making a website almost deceptive to try and get a sale but obviously, as we know, if you don’t treat your customers well, they will remember. So actually by bringing in this sort of long term view and this more healthy way of treating customers, it actually helps to optimise brand’s value and it helps to make sure
that they’re giving the best service to their customers, which ultimately keeps them coming back for more. And it also means that because they’re getting a good service, ultimately they’ll tell the people about the service they’re receiving. So actually, as brand building as well as customer value optimisation. So yeah, it’s definitely a really exciting field.
Aaron Dicks: Definitely.
