I recently came across a great post in Wired by Neil Capel about leveraging data to increase lifetime value. I have written many times about how lifetime value is the lifeblood of your business. A high lifetime value allows you to spend more on marketing and thus grow your business; low lifetime value makes it impossible to acquire new users. In Capel’s post, he outlines five ways you can leverage data to increase your lifetime value.
1: Use data to understand customer interests to create relevant content
Customers and players face an overwhelming amount of information and content. They are also not looking, and actively avoiding, advertising. What they want is information that is relevant to them. Customer’s interests and needs change constantly and you can tap into that inferred nature of the data to determine which elements of your content will be the most relatable and consumable to each user. Leveraging data you can determine which pieces of content an individual wants to interact with and then use that information to deliver automatically current and relevant content to that individual.
2: Use data to keep customers engaged
You can leverage analytics to understand a user’s implicit and explicit interests. With this insight, you can optimize content at a granular level to each user so that every experience with your brand, product or game is specifically catered to their interests. This opportunity includes knowing when to reach out and when not to, so you can optimize your CRM plan. Cadence sensitivity and predictive disengagement tools can help you determine a user’s preference for engaging with you.
3: Use data to customize content and thus increase relevancy and efficiency
You should use your analytics to understand, predict, and engage each consumer on an individual level in real time. When content is more relevant, it is more likely to prompt customer or player action.
4: Use data to retain current customers or players
You should use data to give your users quality content, which will subsequently help you will build more engaged audiences as a result. For example, data can help you by optimize when you send emails to customers based on the time or frequency that would be best for the user. Data can also provide tailored recommendations based off of previous history and inferred interests. You retain customers by providing access to quality content consistently and then allowing them to engage with your brand when they prefer, not on your calendar. You provide value not annoyance to the user A more engaged audience leads to more time spent on your site or in your game, which eventually leads to higher revenues.
5: Use data to improve monetization
Monetization is one of the three core components of lifetime value (along with retention and virality). Using your analytics you can automate content creation based on customer interests, which subsequently increases revenue. Have the customer identify your site as a source of valuable content or products and they will spend more time on site or in your game, again and again.
Although customer lifetime is very complex and teams of product managers can spend years optimizing it, the steps above will help jump start any companies efforts to improve LTV.
- Data drives many ways to improve lifetime value.
- Data can help you create content that is relevant to your user or player, making them more engaged.
- More engaged users will monetize higher.