In running a business, there are two kinds of customers that you need to nourish and sustain. These are your new and repeat customers. However, the common misconception of most brands is that all marketing efforts must gear towards new customers, neglecting their existing customers that could’ve been brand advocates for free. The problem with this setup is that you’re only focusing on customers that come and go. Hence, you’re only maintaining customers that cannot sustain your business.
When I say marketing for new customers, these are the typical click baits and discounted and lucrative offers to entice customers to try your brand. However, many businesses make the mistake of just launching out generic ads and campaigns that tend to be a hit or miss. While this strategy works for some, it can further be improved so that customers will actually stick to your brand. One of the ways to do it is by employing Customer Value Optimization (CVO).
What is Customer Value Optimization?
In eCommerce, aside from growing your customers, increasing both your average transaction value per customer and the number of transactions per customer also form part of the winning strategy. This is exactly where CVO comes in.
CVO is the process of creating a winning sales funnel to attract and nurture customers every step in the customer journey. It is geared towards increasing both your average transaction value per customer and the number of transactions per customer, so you can make sure that you hit these goals with every sales funnel or campaign that you launch. When done correctly, CVO will certainly help you get the most value out of new and repeat customers.
The good part here is that even if you already have a solid marketing strategy, you can simply tweak it to adopt customer value optimization. By doing so, you will certainly achieve brand success in the long run. Yes, of course, your marketing efforts also work for new and repeat customers at some point, but you can be missing out on the potential revenue that you could be gaining with CVO. To give you a better understanding, here are the top reasons on why customer retention matters.
Customer Value Optimization in High-Ticket Dropshipping
In high-ticket drop shipping, it’s important that you build a sense of trust with your customers, so they keep on coming back either for upgrades or to buy another product. Since you sell high-ticket products or expensive items, building customer trust will ensure that you get a steady inflow of customers and thus, growing your bottom-line. Of course, building that trust is covered by the traditional way of providing excellent product and customer support. If you think you’ve got that covered, then pairing it with a seamless sales funnel will maximize your revenue every step of the customer journey. This is done through CVO.
Growing your Dropshipping Business through Customer Value Optimization
Before you can reap everything that you sowed, you need to ensure that you have a solid foundation. A rock-solid foundation in high-ticket dropshipping means having a good niche, coursing out from reliable suppliers, and excellent customer service. If you need a guide on how to jumpstart your ecommerce business, here’s a comprehensive guide in starting a high-ticket dropshipping business.
A Good Niche with Good Demand
Of course, all your marketing and CVO efforts will be pointless if you don’t have a good niche to start with. Choosing the right niche will define the steps that you should be taking to advance your brand against the competition. Plus, your niche must actually have a quite sizable customer demand so you still get a piece of the pie even if there are numerous competitors in the market.
Select Your Platforms
Once you’ve decided on a particular niche, now you need to pinpoint your ideal traffic sources, of course you must have a website. But what other platforms do you think can help raise awareness about your brand? Pinterest, Facebook, Twitter, YouTube, Instagram or all of them? Bear in mind that each platform must have a unique content and campaign plan – you don’t want to be copying and just reposting what you have on Facebook on Pinterest since you may be targeting a different demographic on Pinterest than Facebook. This is basically one of the considerations that you must factor in.
Personalize Your Messaging
Gone are the days when brand communications are solely geared towards selling and generating revenue. Now, the battle is about finding out which brand provides the best value for each kind of customer. Successful brands are connecting to their customers on a personal level, which drives their success. When brands communicate personally to their customers, these individuals in turn feel a sense of belonging to that brand. In simple terms, when you personalize your messaging with your customers that makes them feel that you understand their issues and know exactly what they go through and how to help them, it will be easy for them to establish that sense of belonging and eventually, a sense of trust.
Crafting a Lead Magnet
Once you have a good niche with identified target audience and a working platform, the next step is to create a lead magnet. This is basically something that catches the attention of your target market. It is the bread and butter of new customer acquisition, so you have to make sure that you only release content that is relatable to your target on a personal level. The main goal here is to have them redirected to your profile of the website. This is where you’ll need to conduct A/B testing to see which one works.
The TripWire Offer
Once you’ve successfully lured them into your page, the main goal now is to push them to make their first purchase. This can either be by signing up or by checking out any item from your store. Here, the main key is to have an exclusive and one time offer, which they will find difficult to reject – an irresistible offer per se. However, this may mean that you’re putting out offers at the lowest prices (or even at a loss). Doing this correctly will ensure high conversion rate optimization from your marketing campaigns like Facebook and Google ads.
Remember that it’s totally fine to incur minimal losses at the very beginning since your customers are also torn between jumping in and taking the risk of purchasing your items. So, it’s important that you make an offer that will make them overcome that risk.
Your Core Offer
If you were successful in the TripWire offer, then it’s the perfect time to launch your core offer. This is where you can pitch your best-selling products – the best way to do this is by bombarding your potential customers with customer testimonials and pairing it with a great deal. This is also the point wherein the customer will most-likely buy your product so you need to leverage on that opportunity.
Now it’s time to put it a bit further and offer upsells. This works perfectly when your offering is a bare product that has tons of upgrade potential. These are items that do not add significantly to the total price but will certainly add to the total order value of your customers in terms of profitability. Essentially, these are accessories that will go well with the main purchase. For instance, when you sell pool tables, of course there are tons of accessories that go with it to complete the purchase. The same goes with all other base products that you may be carrying, or even supplementary products that go well with your core products.
Introduce a Return Path
Of course you’ll occasionally encounter customers who abandon their carts or those who only did a one-time purchase. This is acceptable since you can’t expect frequent purchases or impulse buys with high-ticket items. However, in these cases, don’t lose hope. You can still create a return path to help you retarget or reacquire these kinds of customers. A return path usually includes abandonment cart offers, customer loyalty programs, and second purchase campaigns.
These campaigns will serve as your underdog catchment in regaining your “wildcard” customers. The main goal here is to redirect these customers to bite into your tripwire or core offerings. It will also serve as a good reminder for your existing customers to replenish their products or check out your latest releases. Be careful though to not do this as often since you might be irritating your customers instead of enticing them to repurchase.
Customer Value Optimization, should you try it?
Overall, I highly recommend all high-ticket drop shipping businesses to adopt Customer Value Optimization in their marketing strategy. CVO is a great way for you to maximize your revenue while making your online business more sustainable. When you integrate CVO with your business strategy, you will start realizing the potential that you did not think your business had before. CVO is a good way to scale and grow your business that’s tested and proven by most of the biggest eCommerce brands, so you’ll be sure that you are on the right track.
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