Table of Contents
In the previous chapters of this guide, we’ve covered the most important topics related to the CVO methodology for eCommerce businesses:
- Customer Value and Customer Lifetime Value
- Customer Value Optimization Methodology
- The reason why eCommerce stores need CVO
- How to use RFM analysis for your CVO efforts
- The particularities of the 11 default RFM Segments
In this final chapter, we want to show you how your eCommerce store can benefit from this methodology by integrating CVO into your growth strategy and using an automated CVO tool to achieve growth goals.
The main advantages of adopting CVO
Customer Value Optimization (CVO) is a source of sustainable growth.
Because CVO is an eCommerce process that helps you improve customer lifetime value (CLV) – one of the most important pillars of business growth.
How does CVO do that?
CVO helps you improve CLV by analyzing all customers in the database and gathering insights that allow you to improve customer acquisition, experience and retention rate.
Applying the CVO methodology will generate several positive changes across all eCommerce processes and departments in your organization.
Gaining clarity and staying objective
CVO eliminates guesswork, grey areas and egos. CEOs, managers in marketing, product and customer support use CVO for data-oriented decisions. How do your most valuable customers behave, what are their preferences? What should you do to attract more new customers like the ones in the Soulmates segment? Which product is more likely to capture their attention? With CVO, you’ll get the exact answer.
Measuring KPIs that matter
CVO helps you focus on actionable KPIs and tell you the truth about your store’s performance. There’s no place for vanity metrics as long as you make correlations that help you understand how effective your efforts are. You might believe that attracting 10.000 new customers represents a remarkable result but that impression loses face quickly if you retain just 100 customers in the next 12 months.
Defining the Ideal Customer Profile & RFM Segments
You might already have a representation of the ideal customer profile but is it accurate? Using an RFM model helps you segment your customers, identify the most valuable segment to your e-store, and analyze each segment’s buying habits and preferences. Using real first-party data, you can decide if the ideal customer profile you’re currently using matches the reality reflected by data.
Optimizing the Customer Journey
Adopting CVO allows you to identify opportunities and threats at the business level and across customer segments. Did you notice that one product rapidly moves out of stock? Are you receiving more and more complaints about a certain brand? All this information helps you adapt quickly to all the clear signals that customers are giving you. This means that you can define a clearer customer journey that can bring improved customer experience and satisfaction.
Improving Product Assortment
Correlations between customer behavior analytics, customer feedback and sales reports help you identify profit maximizers, products you should keep and promote, versus items that cause dissatisfaction among customers and harm your e-commerce store’s image. This way, you can make informed decisions about the product assortment.
Adjusting marketing campaigns
The clarity you gain about your customer segments and product assortment helps you adjust the digital marketing campaigns, try new tactics, improve targeting for paid ad campaigns. Do you want to attract more high-value customers? Create lookalike audiences based on Soulmates and Lovers. Do you want to improve scores for Frequency? Create a subscription-based program or a limited edition campaign. Look for answers in first-party data and monitor performance as seasonality or context might influence results.
Automation – the most effective alternative for CVO implementation
Manually segmenting customers by using RFM analysis could represent a significant step ahead for your e-store. But the problem is half solved as you still have to update it manually if you want a recent representation of your customer base. A tool will automate RFM segmentation as well as all reports related to CVO.
This is what benefits you should expect from a Customer Value Optimization tool:
- Saving resources by acting upon data from automated reports instead of wasting time to aggregate data and generate eCommerce reports manually: RFM segments, Net Promoter Scores, Customer Lifetime Value, Retention, Revenue, Margin and others.
- Gathering insights from your CVO tool is like having a Data Specialist connected 24/7 to all of your eCommerce tools and interprets data in real-time.
- Empowering your teams by automating repetitive tasks and allowing them to focus on what matters most for your e-store’s success.
- Ongoing optimization as you are always aware of your company’s current status meaning that you can adapt and react faster to what is happening without wasting precious opportunities or letting problems escalate.
- Improving your conversion and retention rates due to a clear understanding of your customer base, how each segment and individual reacts to your messages. You can create better offers, generate better responses from your customers and sell better for higher profits.
So, what do you choose: manual work or automation?
When it comes to customer value optimization and gaining a massive advantage against your competitors, automation always wins.
You can forget about repetitive tasks, never-ending reporting hours and analysis paralysis. With a CVO app, you will be able to gather insights, predict customer behavior and use all this information to increase customer lifetime value.
There are so many approaches to generating results for your e-store. But if you’re aiming for real sustainable growth, understanding customer behavior and finding ways to serve them better should be on top of your agenda.
A CVO tool is an effective way to grow your business and we, as creators of the Reveal app, are happy to help you integrate CVO into your eCommerce strategy and platform ecosystem.
Why a CVO tool?
Our mission is to help eCommerce businesses like yours improve all of the processes that have a direct impact on success. We’ve started over 7 years ago by building a Conversion Rate Optimization tool and dedicating a service branch of our business to support e-stores through this challenging process.
Being so close to our clients in times of struggle, we noticed that CRO was no longer enough to help them stay on top of the competition. They needed to improve their approach to the customer journey post-acquisition to make sure the CRO efforts were not in vain.
This is why we’ve created the Customer Value Optimization Methodology and tested it along with our clients. The results made it clear that the eCommerce industry needs a tool dedicated to mastering customer value optimization.
So, in the past three years, we’ve committed to building the first CVO platform – Reveal, an app that solves the most burning problems of a customer-centric eCommerce business.
Over 450 brands have already benefited from the free audit we’re offering right after they’ve installed Reveal. It’s our way to make sure all clients get up to speed with the CVO tool.
It is our pleasure to guide you through Reveal and, after you install the free version of our tool, offer you a free Customer Retention Audit that will bring to light your next steps into the Customer Value Optimization process.
Ready for a personalized Reveal tour with one of our colleagues?
Discover Reveal Features
eCommerce Analytics – the KPIs every CEO in eCommerce needs to know
Customer Analytics and Segmentation – the in-depth view for an agile Marketing Manager
Product Performance – the reports that keep the Product Manager connected to what customers want
Customer Experience – the must-have features for your Customer Support Manager
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