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November 01, 2015

Working Smart

Ways to Improve Customer Acquisition, Customer Retention and Customer Lifetime Values

by David Isserman

Click here to order the November 2015 issue in which this article appeared or click here to download it to your mobile device.


We all want more customers. Whether you’re a startup or a multinational, as industry executives we cannot ignore the need for smarter recruiting practices that grow our loyal customer base and expand our customer lifetime values.

In today’s world of high technology, where we are constantly bombarded with nonstop news cycles, countless commercials and endless social media feeds, how is it possible for us, as direct selling companies, to break through the noise with our messaging and attract new, relevant, long-term customers? We must be smarter, more flexible and more willing to go beyond a broad “agency approach” to successfully deliver our targeted messaging, build trusting relationships and tap into the fundamentals of consumer buying psychology to improve the conversion of our leads into customers.

Anyone who’s taken a marketing 101 class knows the basics of consumer purchasing habits: People buy from people, not from companies, and people buy from those they trust. Even with the natural evolution of these principles, the psychology supporting them remains fundamentally the same. Today, more than ever, it is important to tap into this mindset while leveraging the power of digital platforms for integrating a multifaceted approach to stronger, more reliable customer acquisition.

With the seemingly endless platforms to choose from, how do you start building an inbound marketing program that effectively cuts through the clutter to attract your highest-performing customer demographic? At first glance, this may seem like a daunting task, but with these four steps that you can implement now, you’ll begin laying the foundation for a smarter, stronger customer acquisition process.

Step One: Determine Your Customer Lifetime Value to Improve Your Acquisition Return on Investment

You need to know how much each customer is worth to you. Before your eyes glaze over at the thought of deep data analysis, know this: This information is vital to us because it tells us exactly how much we can afford to spend to acquire a new customer and to calculate our return on acquisition. This is our customer lifetime value (CLTV).

In its simplest form, your CLTV is easy to define. If you have limited access to your customer data, simply look at your revenue over the past 12 months and divide that by your number of customers. If you have access to deeper data, break this data down into the customer’s age, gender, geographic location, average number of months on your auto-replenishment program and the average auto-replenishment order value. This will allow you to better classify your most valuable customers and how much it is worth spending to acquire those customers in order to get the best return.

Let’s say you determine that your best-performing customer has an enrollment order and an average of four auto-replenishment cycles (months) over the course of her customer lifecycle, making her average CLTV $500. Also, let’s assume that your average commission payout is 40 percent of revenue and your cost of goods is 20 percent. This means that the $500 in revenue that your customer spends during his or her lifetime with your company is worth $200 in profit to you ($500 revenue spend minus $200 commissions cost minus $100 cost of goods). Assuming costs remain constant, this means that if you set a budget of $100 to acquire one more of this type of customer, it would result in $100 in additional profit to your company’s bottom line ($500 revenue spend minus $200 commissions cost minus $100 cost of goods minus $100 cost per acquisition). That’s a 100 percent return on your customer acquisition investment.

Step Two: Enhance Message Delivery through Relevant Targeting

Now that we know how much each new customer is worth and how much we are willing to spend to acquire one more customer, we need to understand our customers’ interests, hobbies, desires and motivations so that we can better target our messaging to the right audience. We may have some of this information from our own customer data analysis, but a lot of these details might be unknown.

Not to worry—Facebook offers a simple tool for this called a “Lookalike Audience.” A Lookalike Audience is exactly what it sounds like. Facebook takes your customer email list and maps it to existing Facebook accounts. From here it can determine what similarities link your customers together and build an audience that looks similar to this. I’d suggest taking this a step further and filtering your email list to only include your most valuable customers. By leveraging this one tool, you can create a highly targeted list of potentially millions of customers who are stronger prospects.

When one of our clients first launched their direct selling company, their marketing department relied heavily on member observations to determine the most effective online strategies for delivering their message. But today they use digital tools like Facebook Lookalike Audiences to direct their messaging to Facebook users who share similar interests with their current members. This transition meant the company was able to test its messaging, improve its landing pages and provide members with higher conversion rates.


People buy from people, not from companies, and people buy from those they trust.


Step Three: Build Landing Pages That Convert

The basic rule of advertising is to always have your goals and objectives in place before you begin any advertising campaign. The same holds true for digital marketing campaigns, especially if your goal is to evolve prospects into customers.

One proven strategy for stronger acquisition is through landing pages. Landing pages not only help you focus on your targeted messaging for each campaign, but also provide a functional pathway for your prospect to learn about your company, products and opportunities in a comfortable, engaging environment with multiple calls-to-action designed to build trust and a relationship between you, your company and the prospect.

A number of platforms exist that can help you build and test your landing pages without any technical know-how. Several of the more popular options include WordPress, Unbounce, LeadPages and InteliVideo. With these platforms, your marketing team can build multiple landing pages, each one catering to the specific targeted messaging you are delivering to your paid traffic.

InteliVideo, an app-based digital content delivery platform, helps brands to manage, sell and deliver their digital content. This aids in driving prospects through landing pages with targeted messaging customized to each specific advertising campaign, which is extremely effective at improving conversion rates. Based on a person’s background, they will respond very differently to messages that relate to them. Thus, by being authentic, you will draw the types of people you want to communicate with, and that’s where success lies.

Once you have tested and optimized your landing pages, integrate them into your replicated websites of your current customers. Now that you’ve tested and found success, leverage the strength of your customer base to drive traffic through these pages, allowing their prospects to convert into leads.

Step Four: Build Trust First, Sales Second

As I’ve previously stated, customers want to buy from people, not from companies. Think about it: Do emails about your recently viewed items on Amazon excite you or would you rather receive a personal email from Elon Musk sharing the features of his next-generation Tesla?

Believe it or not, your leads do not want to hear from your company or from your customer support; they want to hear from you, a member of your company’s leadership team. The next time you send an email announcement, deliver it with your name (and your email address if you’re daring) as the sender. You’ll be astonished at your open rate improvements.

Once you’ve tested this, I encourage you to sit down for an hour and write five emails about why you’re excited about your company. Each email needs to tell a story about your products, the global network, your personal development, the company’s leadership team, the business opportunity or just something that excites you personally about your company. Be honest and genuine. And whatever you write, don’t try to sell anything in these emails. The purpose here is not to sell to these leads; it is to build a relationship with them.


Trust-building is the key generator of sales momentum.


After these are written, write one more email that invites your leads to interact with your company. (Hint: This is the sales pitch for your company.) Explain why their timing is great to get involved today and how your team is committed to their success, both personally and professionally. Again, it’s important to be authentic with this email.

Once these emails are written, use them to create an email series that automatically triggers when a prospect converts into a lead from your landing page. What you will accomplish with this miniseries of emails is a nurturing opportunity to build trust with your leads prior to converting them into customers.

Trust-building is the key generator of sales momentum. According to a DemandGen report, nurturing leads produces, on average, a 20 percent increase in sales opportunities versus non-nurtured leads. In other words, for every dollar you invest, you can increase your return by 20 percent by nurturing these leads through your email campaign.

In today’s world, a one-size-fits-all solution does not exist when it comes to stronger customer acquisition. It is more important than ever to take a smarter, more flexible approach to building digital inbound marketing strategies that deliver targeted messaging and successfully cut through our noisy world, full of distractions. With these four steps, you will be able to better target your strongest prospects, allowing you to more efficiently and effectively grow your customer base, improve your customer retention, and build revenue by increasing your customer lifetime value.


David IssermanWith over a decade of experience providing operational and strategic guidance, David Isserman currently serves as a direct selling industry advisor through his management consulting firm, Isserman Consulting.