In an article titled Strategy : How Lifetime Value Differs in Catalog vs. Web, Steve Lett, owner of Lett Direct, Inc talks about the Lifetime Value Customer (LVC). “Lifetime value…” he defines “is the value of all purchases a given customer has made to date, plus the value of purchases that customer is likely to make (discounted for present value) over time.” Steve explains that catalog sales make more Lifetime Value Customers than any other form of marketing. This is not surprising. Since the beginning of their circulation, catalogs have changed the face of retail shopping making it more assessable to everyone. Customers who had previously relied on their local merchants could now shop any time anywhere at lower costs. But why is it so important to have Lifetime Value? One might think that more is better. More customers, more sales, more profit. But the truth is that it is LVC who will increase profitability long term. They pave the road to success and they can be relied upon, even in a not so great economy. Why? They have loyalty. So, how does a cataloger go about cultivating those LVCs? Here are some ways you can create LVCs to increase your revenue and grow your business.
Develop Relationships: As with any business, developing relationships with your customers is a key way to create repeat customers. Think about a positive retail shopping experience you’ve had. It probably involved someone doing their job very well and you were pleasantly surprised. Makes you want to go back, if only to see if everyone who works there tries to create a similar positive experience for you, right? Of course, replicating a retail experience can be a bit complex with catalog sales; but by no means is creating a happy customer unattainable. Think about the little things. Consider following up with your customer via e-mail or a direct mail with a “we value your business and thank you for shopping.” You can interact and develop stealthy relationships by personalizing your catalogs. Amazon is great at this. Consider: “customers who bought this item, also bought that item.” It’s a great way to upsell and make suggestions to shoppers without actually being right there with them. Just because you are not face-to-face, doesn’t mean you can’t build trust.
Customer Care: Exceeding customer satisfaction is another way to make LVCs. Taking care of your customer; making sure they are happy with their purchase and fixing the problem if they are not. Sending out satisfaction surveys and acting on their suggestions is a great way to take care of your customer. It also helps you develop the relationship mentioned above. You don’t want to disillusion your customer. You want to keep them coming back to you for purchase after purchase until it becomes a regular part of their lives.
Promote: This might seem an obvious category; however, a great way to make LVCs is to promote your sales to the people who have shopped with you in the past. Staples will sometimes send out catalogs with $25.00 off coupons on the covers. Sending out holiday reminders and seasonal sales is great too. If you forget to reach out to your customers they might fizzle out and, as a result, become less valuable.
Track: Tracking your customer sales and focusing your catalog circulation programs on the information derived from the collected data is a good strategy for creating and maintaining your LVCs. What purchases are your customers making and when? Be proactive and segment your customers. For example, promotional offers you send to a regular buyer may be different than those you send to a one time buyer. Your tactics may be a bit more or less aggressive depending on their LV. You should monitor your buyer list as much as possible and segment it accordingly.
The key is to remember your consumer. Don’t spend more (or less) money marketing to them than they are worth. Make it your goal to get customers and keep them. Each LVC you have is significant to maintaining a successful business and it should be your goal to do whatever is necessary to create these valuable assets.