How to increase customer lifetime value with the video?

How does one measure the success of a marketing campaign? Using metrics, of course. There are metrics that let you, for example, measure the quality of inbound links, an important factor in page rankings.

How to increase customer lifetime value with video

While others such as Cost Per Click (CPC) and Cost Per Acquisition (CAC) are specific to a campaign, there is a metric that applies to your business as a whole, which is:

What is Customer Lifetime Value (LTV or CLV)

Metrics tell you reliably whether you are keeping pace with the return on investments (ROI) of your campaign. So, how do we keep track of this important metric?

Think of it this way:

Every business tries to win over customers and strives to retain them.

“An ideal situation, however, would be to develop customers who will purchase a product from you—every time they are in need of it.”

You can think of it as the projected money a single customer or account will spend on you from their first purchase through their last.

So how is it calculated?

Utilizing data gathered from business intelligence, your pricing model, customer records, and upsells.

If you are mathematically inclined, this is how Hubspot recommends that you measure it:

In short, you would want to design your marketing efforts toward wooing both existing customers well as prospects.

With the former, you can build on the existing goodwill and even get them to speak about your business to prospects. With the latter, you have a clean slate to uniquely design your campaigns aimed at retaining them as your patrons for a lifetime.

Read More: 9 ways to measure and improve your SaaS Video ROI

Why it is important to retain your customers?

Have you ever wondered how some businesses keep building their customer base by winning over new customers while others in the same product, or service category fail to woo new customers? Some may even go under if they are unable to compete with market leaders.

Winning new customers is not going to happen overnight. It could take months or even years before your business gets the boost you need.

Meanwhile, rents and salaries need to be paid and bills need to be taken care of…

So, how do you generate revenue?

“Why not turn your attention to existing customers and turn them into repeat customers?”

How video helps in marketing

Videos are a powerful tool to promote your brand, product, or service. Modern marketing involves the use of videos in many ways. Several industries, including shopping, travel, luxury goods, and insurance, are harnessing the power of video to engage their customers

A video can help improve customer lifetime value during every phase of a customer life cycle, which is broken into three phases:

“Acquisition, Retention, and Renewal”

1. Acquisition:

To generate leads. We accomplish this by using landing pages with videos that serve as lead magnets and demonstrate the product in action.

  • Videos are the most natural way to communicate with your customers.
  • They are a powerful way to convey your message.
  • They can be shared easily on social media with consumers.

We accomplish this by using landing pages with videos that serve as lead magnets and demonstrate the product in action.

2. Retention:

To improve customer retention. This involves focusing on customer service and satisfaction.

  • Videos are a great way to allow people to see the product in action.
  • They hold the customers’ attention better than other media.
  • They help reduce the number of salespeople and trainers a business needs to hire.

3. Renewal:

To make them go for the same or higher level of service and possibly get them to advocate our brand.

  • The best way to increase brand awareness is through videos.
  • They are better at helping people retain and recall information.
  • They can be used to provide useful content consistently.

Read More: How can SaaS Companies Boost User Engagement With Videos?

How to improve your Customer Lifetime Value (CLV)

1. Identify your best customers

As the use of third-party cookies becomes obsolete, you need newer ways to get to know your customers and have a direct connection with them.

It’s important that you don’t confuse the best customers with the worst–it can be difficult at times to figure out.

But you can use the Recency, Frequency, and Monetary (RFM) model to find your most valuable customers.

Parameter Tell you…
Recency When a customer purchased from you, and the more recent the purchase the higher are the chances of converting them into loyal customers.
Frequency A customer's frequency of purchases. A frequent customer is more likely to stay loyal to your brand.
Monetary The amount a customer spends during a purchase. Look for a higher-spending customer.

You can create a scoring system suitable for your business to identify your most valuable customers, whom you can target for your customer lifetime value campaigns.

This model is based on the Pareto principle, which says that 80% of your revenue is generated by 20% of your customers.

“The way to riches is to find that 20%.”

Ranking your customers by their purchase history is a fairly reliable way to do it. That means you need to:

  • Use data analytics to identify your best customers.
  • Find ways to woo them and make them your brand promoters.
  • Use targeted marketing to nurture your relationship with such individuals or groups.

Read More: 12 proven ways to reach your SaaS audience

2. Increase Average Order Value

AOV can be calculated as Total Sales Revenue divided by Total Number of Orders

You can improve this important metric by:

  • Personalizing product recommendations based on buying power, recent purchase history, comfortable price ranges, and abandoned carts.
  • Keeping them informed using newsletters, blogs, customer feedback, and re-targeting to streamline sales processes.
  • Sell an additional product or service to an existing customer (cross-selling) and sell a higher-end version of a product or service (up-selling).

3. Value your customers

It is important to show customers they are special because, without them, your business would not exist. Personalization is one way to make a customer’s experience with your brand memorable. There are many behavioral triggers and custom fields. For example,

  • The use of first names in a message can make people happy and important.
  • Personal milestones such as birthdays and wedding anniversaries mean a lot to people and offer businesses an opportunity for long-term engagement with customers.
  • According to a Zendesk survey, consumers rank quality (88%) and customer service (72) as the two most important factors that determine loyalty.

4. Offer tangible benefits

You must devise special offers that recognize and reward customer loyalty.

For example, you can offer them:

  • Free and fast shipping.
  • Top-tier benefits in your loyalty program
  • Access to exclusive or pre-release products and services.
  • Special offers and discounts.

Every company runs a special incentive program for a special group of loyal customers.

5. Create a brand-loyal community

Your loyal customers are your brand ambassadors and your influencers. The members can be offered exclusive access to news and events, special prices, discounts, and incentives to expand and manage the group.

Customers remember a positive experience and will choose you for a long time.

  • Provide the value that was promised to the customer
  • Make sure your product does what it is supposed to do every time it is used.
  • Be transparent: Give detailed information about your product or services.
  • Be available to answer questions and to provide support to them.

6. Provide quality customer care

Customers are worth a lot more than just the money they spend to patronize your business. According to surveys, poor customer communication could cost a company millions of dollars every year.

Sometimes, just making your customers feel valued and letting them know how privileged you are to have them as your patrons goes a long way in winning their business and loyalty often for a lifetime. It is easy to show customers they are special:

  • Be attentive and talk to your customers with respect.
  • Give them your best and most active contact details. People appreciate access to toll-free numbers.
  • Because 20% of customers drive 80% of revenue, it is important to show them that you care about them.

Read More: Reducing Customer Support tickets using How-to Videos

How to create video content to improve customer lifetime value?

Now that we have identified how we can improve customer LifeTime Value, let’s see how we can use video content in our marketing to win them over using videos. You can use videos to:

“Build relationships with your customers, cultivate trust, and turn them into brand advocates at a reasonable cost.”

So, what kind of video content can you produce? The possibilities are endless. We present you with a collection of videos created by us for top companies that have helped them to:

“Achieve marketing objectives including increasing Customer Lifetime Value”

1. Customer testimonials/Success stories

People love to see other people who bought the product and how they are using it.

Customers do trust other people, and by giving them advice, advice that they can trust, you will create a relationship between your business and the new customers.

Example video from tomorrow.io

2. Product Marketing

If your product is expensive or takes a long time to make a sale, then how do you get the customers to pay?

People love to buy products that have great features, have been reviewed by experts, and are well presented. A potential customer wants to feel assured that they are making a good investment, and video is a great way to show this.

Example video from Partnerstack

3. Product demos

People want to know that a service they are investing in is going to work. People like to be able to see the service provider in action, instead of reading through information online, reading terms and conditions, and searching through pages of text.

Example video from lyne

4. Webinars

People look up to persons who are considered experts in their field and look for their endorsement before they buy from you. Every business should hold regular webinars with subject matter experts.

Example repurposed webinar from outreach

5. Brand promotion

A great way to build an online following and to increase your website’s traffic. Your goal should be to make your brand instantly recognizable from a thousand others.

Example video from peoplevine

6. How-to/Explainer videos/User onboarding

A great onboarding process can improve customer experience and could determine their future actions. Do it well and they will come back to you for more.

Example video from ManyChat

Why You Should Consider Using Video Marketing?

To get the most out of your marketing efforts, there are many things you can do. You can create an ad campaign on Facebook, develop a blog post or offer some sort of promotion. But there’s one technique that is often overlooked for marketing purposes: video marketing.

Video marketing is easy to do on social media platforms like Facebook and Instagram, but it also has many other benefits for your company.

Its interactive nature makes it more engaging than an ad or blog post which makes viewers more likely to click through to your site and buy something.

“Video ads are almost four times as likely to be clicked on as banner ads while they’re nearly six times more effective at generating leads.”

Video Marketing boosts your visibility and profits while reducing your costs and effort. In fact, studies show that:

  • Videos are twenty times more likely to be shared on social media and have the potential to become viral content.
  • People retain 90% of what a video says as compared to 15% reading text on a web page.
  • Videos can increase your sales by 80%.
  • A consumer who watches a company’s video is 64% more likely to make a purchase, and they are 16% more likely to stay on a company’s website.
  • The average conversion rate for video ads is 36%, versus 7% for text-based ads.
  • In a survey, 92% of customers said video content was preferable to other content, and 85% said it helped them decide whether to purchase.

6 Tips for making attractive videos:

Final words

Video marketing is a popular choice among many businesses today because of its ability to help you increase your customer lifetime value by attracting prospects, engaging with them, converting them into loyal customers, and creating long-lasting relationships with them.

With an increasing number of consumers turning to online platforms for watching videos, video ad campaigns have become a staple of any marketing strategy.

Studies show that you’re likely to engage more viewers with a moving picture than a static one. And they are more likely to buy something after seeing it used in video format too.

“Video is the best way to connect with your customers on a more personal level”.

Ready to get started?

Find out how we can help drive better engagement from marketing and reduce your churn and professional videos.

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