Some of the questions that seem to hover in brands’ minds these days are, “What is CVO?”, “Why should we even bother with CVO?”, “Is it worth it?”. Well, that’s what we asked too. And so, we aimed to find out just how beneficial this take on customer acquisition and retention could be. We were pleasantly surprised.
Our CEO, Adam Pearce, had a chat with Valentin Radu, Founder of Omniconvert, on CVO, what it involves, and why it’s the answer to all your most significant eCommerce worries. As brands struggle with the competition of customer acquisition and making more sales, there’s a more considerable competition at play:
Whoever gives the customer more value wins.
Conversion Rate vs CVO
There is one question we like to ask: is your success entirely defined by your conversion rate?
Short answer: no.
It’s more than that — your margin, how many customers you’re bringing in, your retention rate, your ad spend, etc. While agencies focus mainly on CRO, it creates a narrow outlook on what these companies can do for brands like yours. There is so much more that goes into the success of brands. Customer Value Optimisation focuses on the bigger picture, giving brands the space and time to focus on the details.
Customer Acquisition vs Customer Retention
Customer acquisition costs are constantly rising with demand. Brands are struggling to keep up with the competition, which can significantly affect their entire business model. The shift to CLV is where the potential lies, using what we as an agency can provide using all our expertise, from marketing to design to development. CVO allows brands to become more aware of their customers and where they are in their journey.
Brands can verify if customers are happy and, if not, why not. If this information isn’t collected, long-term success is unattainable. Brands won’t be able to break even on just the first purchase of a customer — it’s the retention of that customer that pushes businesses to the next level.
What Do Your Customers Want?
In simple terms, your customers want you to care about them. But the truth is that the question is not something you can Google. The only person that can tell you what your customer wants is your customer.
As an industry, eCommerce has become hypnotised by data. While this is not something brands should stop doing, it’s not where the process ends. Focusing on qualitative data will change your perspective, allowing you to realise everything you’ve missed out on — a goldmine.
Gathering qualitative data from tools like Google Analytics will tell you what you want to know, but it won’t tell you everything you need to know about your customers. It’s simply a source of data. Brands are struggling more than ever, forcing them to appreciate and nurture their customers. You can extract sales copy straight from your customers' mouths and use these golden nuggets in your email marketing campaigns, ad campaigns, landing pages, and more.
While this may seem time-consuming, it doesn’t have to be. It may take time to analyse the information, but if you’re prepared to put the time into customer acquisition, why wouldn’t you transfer some of that time focused on your current customers — leading them to purchase more frequently and using them for your customer acquisition?
A Glimpse at the CVO Process
Once the research part of the process is complete, brands will divide their customers into categories based on their best traits. We use RFM Segmentation: Recency, Frequency, and Monetary Value. Categorising these customers on a score out of 5 on each of these three categories allows brands to find out which customers are in which parts of their customer journey.
You want to know how your customers view your products and how it impacts their lives. Many companies are shocked to find out that their customers view their products entirely differently from themselves. This will allow you to narrow down your messaging and use the information collected in the interview and categorising process to connect with customers using relevant information that will both retain and empower them.
The Prevention Phase
While there are many phases in the CVO process, the Prevention Phase is pertinent. Looking at the RFM data collected, you will be able to notice customers who are on the precipice of churning. Perhaps they haven’t purchased recently, and when they have, they have a low monetary value. Maybe they used to be exceedingly active with your brand, but as of six months ago, they’re not.
Brands must then decide what their action plan with these customers will be. Most companies will throw in a 20% discount in the hopes of reeling these customers back in, but long term, that strategy won’t help you reach your goal. The old problems these customers experienced will always come back out of the woodwork.
You should understand that you can use the interview process as armour. This armour will provide you with ammunition in the prevention campaign. Finding your customers' pain points will allow brands to rectify problem areas they may not have even known about and send out campaigns notifying these customers that problems have been amended.
Blend & CVO
Blend has existed for seven years, having started by rebuilding Shopify stores and marketing. As we grew, we realised we had to move to a retainer basis. The one problem is that on a retainer basis, it’s a race of how many hours we need to get done, and the services offered weren’t enough. We needed to give our clients more.
Researching CVO lead us to the realisation that this strategy is precisely what our clients need and what will push them over the edge. We also noticed two main differences when implementing these strategies.
- The conversations we had with our clients changed. Clients feel understood, guided, and informed.
- The impact we can have on these brands and the result we’re currently seeing is entirely different — more fulfilling and more beneficial as we have such a wide range of services to offer.
While we’re new to our CVO journey, the impact noticed is already extensive. And it’s not only for us. CVO has shifted merchants’ perspectives, eCommerce managers, directors, and founders. As we discuss the strategies and logic behind them, these clients finally feel heard. Their position in business looks a lot different today than it did just a few years ago. People in these positions are expected to think not only about the store but also marketing, products, warehousing, fulfilment, customer retention — the list goes on. Our clients have seen CVO as therapy. As an agency, we focus on six or seven rather than just focusing on one piece of the pie.
If you want to learn more about CVO and how it could be therapy for you, chat with our Blend team or watch this video below.