Avoid making the mistake of assuming your best performing products are simply the products which have sold the most. While this is still an important factor to consider, taking a look at this alone could lead to wrong conclusions. What if your bestseller is also your most returned product or one that only attracts one-time shoppers?
RetentionX provides insight on which products are attracting high-value customers that show a significantly higher LTV. This knowledge allows you to formulate and refine customer acquisition strategies across all of your digital marketing channels.
Discover products resulting in the highest LTV
The first step is to understand which of your products generate the highest LTV. These products attract customers who not only make purchases but continue to patronize your brand over time.
Under All Products you’ll find all metrics needed to understand your products' performance. Monitor the connection between the purchased product and the resulting customer quality with the help of the product LTV. LTV 1 Year of New Customers calculates the average lifetime value after the first year of all customers that have purchased the considered product in their first order. Products with a high LTV 1 Year of New Customers are true magnets for high-quality customers.
Detailed study of such products' characteristics will guide you in enhancing your product offerings and promotional strategies.
Best Practices
We've put together some best practices for inspiration on how to attract customers that will love your brand and keep coming back to your store.
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Incorporate product LTV into your channel strategies
A common mistake with digital ad campaigns is optimizing for immediate ROAS rather than considering the LTV. When optimizing for ROAS, ads will typically target customers who are more likely to buy cheaper products, as these often have higher conversion rates. However, these products may not necessarily attract repeat customers or generate high customer lifetime value. Instead- focus on promoting products that promise high retention rates. -
Create high-value audiences
Identify customers that have shown a higher propensity towards high-LTV products. Therefore, create a segment grouping your customers who have purchased one of these products in their first order.Now that you have identified these customers, it's likely they have a lot in common with the people who aren't yet customers but will love your brand. After connecting your marketing platforms to RetentionX, create audiences, e.g. Google Ads, Meta, and TikTok. Once the audience is created, use it as seed audience to create lookalike audiences. We'd recommend to choose a lookalike of 1-3% depending on your seed audience size.
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Do more with your newsletters
Utilize your email marketing campaigns to highlight high-LTV products to your email subscribers that haven’t purchased yet:-
Personalize your email content to showcase high-LTV products. Highlight the benefits and unique selling points of each product to create interest and desire.
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Entice subscribers to make a purchase by providing them with exclusive deals on high-LTV products. These exclusive offers make subscribers feel valued and create a sense of urgency to take advantage of the special opportunity. Include clear calls to action and limited-time offers to drive immediate action.
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Grant your email subscribers early access to new collections or product launches of high-LTV items. This makes them feel exclusive and provides an incentive to stay engaged with your emails. Offering early access helps create a sense of excitement, driving subscribers to make a purchase before the general public.
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Tweak your product placement
Once you have identified high-LTV products, it’s time to give them visibility and display them where your audience can easily see them on your website. This can be done by featuring them on your homepage, listing them higher on collection pages and creating dedicated sections or banners. Additionally, consider utilizing upselling and cross-selling strategies by suggesting high-LTV products as add-ons or substitutes in the shopping cart or checkout page.
Prioritizing customer lifetime value over immediate return on ad spend offers a more sustainable and profitable approach to digital marketing. By utilizing the product LTV, you can not only refine your customer acquisition strategies but also significantly enhance your revenue generation over time.
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