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So far Rick Chalifoux has created 21 blog entries.

The Real Cost of Customer Acquisition [In a Bid-Based Duopoly]

Dual Domination of the Online Ad Market

All retailers have the same fundamental problem that they neither fully understand, nor have the ability to solve.

The problem is that in today’s age, digital advertising runs almost exclusively through just two sources: Facebook and Google. This makes customer acquisition extremely expensive, with many businesses seeing little return (if any at all) on their acquisition campaigns – especially when they mostly draw in customers who spend once and never come back again.

We have a simple solution to this growing problem. Instead of seeking to acquire any customer on Facebook and Google, you want to target the right customer.

Forcing Retailers to Pay More

Earlier this year, Google and Facebook’s share of the global online ad market was slated to increase up to 61.4 percent, up from 56.4 percent in 2018. In addition, there was a projected $176.4 billion in ad revenues – signifying a 22 percent spike from the year before. Meanwhile, ad spend outside of the two giants (i.e. the rest of the competition) was slated to drop by 7.2 percent.

It comes as no surprise to learn that for each of the past 10 years, both parties have raised the prices of their clicks. Meanwhile, retailers by and large have been forced to reluctantly go along with these increases, simply because they do not have any other options. As a result, digital advertising has become both increasingly expensive and oversaturated. Looking ahead, many speculate that there is still plenty of room left for growth, with estimates of downturns back in late 2018 proving to be wrong.

In fact, this cycle already happened years ago with Direct Mail, where the cost of postage increased to the point where no one could afford it anymore. A monopoly was in charge then, and eventually some businesses could no longer participate – which is exactly what is happening in the digital realm today.

The Solution: Acquire High Value Customers 

The only way to move ahead and succeed in this environment is to actively seek out the customers who spend more, more often than the rest. These are known as Most Valuable Buyers (MVBs), which starkly contrast to those one-and-done buyers who are both expensive to acquire and offer no value in return. 

Statistics show that MVBs actually drive 75-80 percent of a company’s profits – despite consisting of only about 15-20 percent of its base as a whole.

For example, if it costs $100 to acquire a customer that only delivers $50 in return, your efforts are not only in vain, they are detrimental to your bottom line.

On the other hand, if a high-value customer brings in $500, they were well worth the effort to secure the first purchase. This is precisely why it is so important for retailers to get the most out of their advertising spend by drawing in (and retaining) these MVBs.

The reason why the top fashion brands pay so much to have storefronts on Park Avenue is due to the greater value of each purchase made there. Statistically, the cost of each transaction made in those storefronts is greater than anywhere else – because of the sense of exclusivity that those premier locations exude – and their ability to bring in higher value customers.

How to Execute

Ultimately, this strategy is all about selecting the right targets and driving them to the trial purchase.

However, in order to justify the cost of acquiring any customer (particularly high-value ones), retailers must possess strong retention capabilities and processes. Specialized software like Predictive Marketing Automation (PMA) platforms will help to heighten the value of each new customer while also working to increase the value of their spending over time

Fundamentally, marketing is about getting to know your target audience and those within your customer base. Typically, brands implement a one dimensional approach in which they do not have the ability to actually know who their customers are – let alone accurately predict the probability of gaining subsequent purchases.

A PMA’s automation capacities offer an all-encompassing, 360-degree view of consumer behavior, allowing marketers to reach the right customer, at the right time, on the right channel, with the right message.


In this game, it is not about the number of customers you’ve acquired.  In reality, whoever has the highest value customers wins. With so many options out there, consumers are generally fickle, and most only purchase once. 

Great businesses are built on great customers, and MVBs form the backbone of any successful business. They are the ones who will help drive your business ahead of the competition. 

Equipped with the right technological toolset, you will be able to methodically, consistently increase your ability to acquire higher value customers at a rate that takes your business to the next level – free from the reigns of Google and Facebook’s duopoly.

By |2019-09-13T23:52:17+00:00September 13th, 2019|Blog|0 Comments

The Importance of Understanding Customer Lifetime Value

What is Customer Lifetime Value?

Customer Lifetime Value (CLTV) is a metric marketers use to gauge how much a particular customer is worth to you over their lifetime relationship with your brand.

While this sounds like common sense, too many marketers overlook the importance of proper CLTV calculation. Or, they get it wrong altogether.

Statistics show that it is 5 times more expensive to acquire a customer than to simply retain one. Therefore, shouldn’t you spend your precious marketing resources obtaining the ones with the highest potential value?

If you blindly assume that every customer has the same potential value, then you are likely missing out on a range of opportunities. 

Let’s break down the key ways to calculate customer lifetime value in order to stack the deck in your favor and gain a distinct advantage over your competition.

Understand the Acquisition Source

You can learn a great deal of valuable information about a customer’s value by knowing which source led them to your brand. 

For instance, a customer found through a discounted offer on Facebook might have an average potential value, while the value of a customer who discovered you through organic search is likely higher since they were actively looking for you in the first place.

Frequently, the future lifetime value (FLTV) of customers is tied to both channel or media source that they were funneled through (i.e. email, paid/organic search, social media) and the type of message or call to action (CTA) that brought them into the fold.

For example, a customer acquired through a sale offer on social media would generally have a lower FLTV than another who came through organic search. This is because the latter was likely actively seeking you out in the first place.

Paid Search and Social Media Analysis

When utilizing paid search via a search engine like Google for customer acquisition, you are given a complete overview of search terms tied to both your products and the types of customers that each one funnelled into your brand.

Equipped with this information, you can grant priority to the specific search that drew in the higher value customers.

Determine Acquisition Allowables

An acquisition allowable (or Allowable Acquisition Cost) is the amount you are able to spend to acquire a new customer in order to meet your Return on Advertising Spend (ROAS) goal. While every business has a different method for determining allowables, they are usually identified by both channel, offer, and projected CLTV. 

Let’s say you calculate that a customer is going to be worth $100, and your return on marketing spend has to be at least 100 percent. In that case, you can spend up to $50 on each customer that you acquire. So if you spend $50 on an acquisition and need a 100% ROI, then each customer must generate $100 worth of revenue.

Below is the formula for calculating acquisition allowable.=:

Acquisition Allowable = LTV/ AS x 100 > ROAS Goal

  • LTV = Customer Lifetime Value, net of acquisition spend
  • AS = Acquisition Spend
  • ROAS Goal = Return on Acquisition Spend Goal Percentage

With acquisition campaigns, some efforts are going to be grand slams, while others can be strikeouts. Predictive Marketing Automation (PMA) platforms allow you to keep close track of promotion history, revealing how effectively you are spending your money while acquiring new customers by channel and offer. 

From there, you are in a position to improve the LTV of customers over time, adjust your allowable advertising costs, and optimize your marketing and media budgets. 

Predict [And Increase] Future Lifetime Value

A core element of customer acquisition is to not just seek to acquire any customer at all, but rather the ones with the highest projected future lifetime value (FLTV).

In turn, you can utilize a PMA to locate behavioral patterns or signals that indicate the relative likelihood of someone becoming a future Most Valuable Buyer (MVB). These are called predictors of Future Lifetime Value

The more one-time buyers (who have zero recurring value) you have in your customer base, the less profitable your company will be. 

On the other hand, your highest value customers (also known as most valuable buyers – or MVBs) are the loyal ones who both purchase more, more often than the rest of your customer base. Not only do they drive the majority of your revenue – they are the lifeblood of your business itself.

Don’t be afraid to spend to get high-value customers. You might be breaking even or losing on the first transaction, but the first transaction does not equal the full value of the customer over the lifetime of your brand.

Always strive to increase the LTV of your customers. If their projected value is increasing as a whole, you are on the right track. If it’s decreasing, reassess your strategy and make use of the tools at your disposal. 

For instance, a PMA dashboard (pictured below) lists the numbers in real time for analysis. From there, you can discern the causes behind your problems and adjust accordingly.

Key Takeaways

Ultimately, you should be able to answer the following key set of questions:

  • What is the overall value of the customers we have? Is it trending upwards or downwards?
  • Are we maximizing the full potential of each customer that we have in our database?
  • How much should we invest in each customer down the road? Via which channel(s)?
  • Who (and where) are our customers with the highest potential value? How can we acquire (or retain them)?

Equipped with this knowledge, you can tailor your interactions and offers accordingly in order to acquire (and retain) customers with both the highest LTV and longest lifespans. This pays huge dividends and by increasing both your profits and ROI.

*This blog contains references to a previous post: How to Get More Customers Through Targeted Acquisition*

By |2019-09-13T20:21:10+00:00September 3rd, 2019|Blog|0 Comments

5 Outstanding A/B Test Examples [That Drive Conversions]

Testing and Learning

A/B Testing is a promotion testing strategy in which the results of two separate marketing tactics are sent to your customer base and subsequently analyzed. 

Continuous, carefully calculated testing is an essential tool towards generating a successful lead generation campaign.

In an Econsultancy survey of 800 marketers, 82% of companies with a structured approach to testing and optimization experienced higher conversion rates.

Above all else, A/B testing (also known as split testing) helps you to better understand and connect with your audience while improving your marketing campaigns. They also demonstrate how even small differences can affect performance.

This article details 5 ways A/B tests can be utilized to improve your digital marketing performance.

Closing The Loop

Always strive to close the loop on your marketing campaigns by consistently testing different strategies and learning from them over time.

Below is a breakdown of this strategy:

Ultimately, if implemented properly, A/B testing can offer a wide range of benefits, including:

  • Increased web traffic
  • Higher conversion rates
  • Lower bounce rates
  • Decreased cart abandonment

There are a range of different types of tests to deploy. Let’s break down five of the key ones.

1. Subject Line

Your subject line is the first thing your customers see in their inbox, and a carefully crafted one can substantially increase open rates.

To deploy a subject line test, send two different subject lines to a subset of your customer base. Then, analyze which one resonates the best.

In this case, you can use a particular type of A/B test named test and roll. This is where two separate subject lines are deployed to a subset of your customer base (i.e. 30%) over a set period of time (i.e. 24 hours). Afterwords, the “winning” line with the best open rate is instantly sent to the remainder of your base.

2. Creative Content & Design

While subject lines are designed to increase open rates, strong creative content (graphics, text, length, layout, design) directly contribute to your click through rates.

While text and tone are certainly important, bold (but not abrasive) color schemes, font styles and image placement go a long way.

Here are two exemplary split test designs by Starbucks complete with different offers (more on that later):

3. Cadence

A perfectly designed message means nothing  if your target never sees it, which is why getting to the top of the inbox is so important. If you miss the mark and send your email just an hour or two away from the right time frame, you could quickly drop down the list – out of sight and out of mind.

Key factors to consider regarding cadence include:

  • Day of week
  • Time of day
  • Number of emails per week
  • Date of last open
  • Long gaps since the last open can indicate customers that are fading away from your brand. If this gap continues to widen, consider dropping from them from your list. 

When your customer is either on the cusp of a purchase or on the verge of fading in loyalty, a simple nudge can make the difference between a sale and a missed opportunity. Machine intelligence can predict exactly when such opportunities arise and react autonomously.

A common pitfall is basing your send time on when your customers interact with your messages. Instead, base your send time on when you send your emails – not when your customers open or click them.

For example, while you have a noticeable high conversion rate on Saturday, does not mean that an email sent on Saturday caused the conversion. Instead, it could have been a message sent on Friday that simply had not been opened yet. Therefore, keep in mind that your customers might need a buffer period.

4. Offer (Pricing/Discounts)

Discounting is a  particularly effective way to engage/acquire customers who have never bought with your brand before, stimulate a second purchase, reactivate fading customers, and reward loyal customers.

Here are two separate “Today Only” discount templates from Kohl’s:

5. Call To Action (CTA)

Your CTA is the last hook that drives your customers to convert, so it is well worth the time and effort to craft one that works best.

Success is not measured by opens and clicks alone, but rather by the revenue gained or products sold.

In this case, no detail is too small to test, and even seemingly insignificant shifts can generate much different results.

Many companies test the size, shape, color, wording, and placement of their CTA buttons. 

Here are just a few examples:

Key Takeaways

When designing a test, keep all factors consistent. For instance, when running a subject line test, keep your creative content the same. Likewise, when testing creative content, keep your subject line the same across your emails. Testing too many templates at once means it will take longer to gather actionable data.

Not only do different customers have varying tastes, they also react differently to certain messaging tactics. While you may not initially know the best way to interact with different portions of your base, testing is the most effective way to determine what resonates the best. 

Persistent, accurate, and informed testing can greatly impact your conversions and bottom line. By engineering controlled tests and gathering verifiable data, you can determine precisely which marketing strategies work best for both your brand and your products. Keep in mind, if your company is not continuously testing and learning, you are much more likely to lag behind your competition.

By |2019-08-26T16:36:57+00:00August 24th, 2019|Blog|0 Comments

9 Email Deliverability Hacks to Skyrocket Engagement

Messaging That Stands Out

Email is one highest converting marketing channels available, and it absolutely pays off to make sure your email messaging is optimized to the highest level.

Here are 8 proven email marketing tactics to implement in your own campaigns and increase conversions. 

1. Carefully Craft Your Headline/Subject Line

No matter how good your actual message content may be, it won’t matter at all if you don’t have a catchy subject line that entices the reader’s interest with emotionally gripping words and phrases.  

While your subject line should be an extension of your email body, it still shouldn’t give too much away. Pique their curiosity and give them a good reason to click through.

A truly catchy subject line reads like it was written by a human being, without overly pitchy slogans and catchphrases. However, it still gets right to the point, with a greater focus on technique over the content itself.

Don’t be reluctant to split test various subject lines to sectors of your base either. The more you test, the more informed you’ll be for the next campaign.

2. Go Beyond Open Rates

Simply attaining a high open rate does not signify a successful email campaign. While it’s obviously an important metric to keep track of, it can still be misleading if you don’t incorporate larger, more significant goals like clicks and conversions into your performance analysis.

3. Encourage Readers Forward Your Messages

Inciting readers to share your emails through referrals is a very useful tactic to exponentially build your base. For instance, offer a discount or the chance to win a prize for each referral. 

4. Unsubscribe Non-Engagers

While you should always give readers the option to unsubscribe, that sometimes that isn’t enough. If they aren’t engaging with your brand at all, they likely won’t even take the time to unsubscribe in the first place. 

In that case, make the call for them. Because it’s like carrying dead weight. 

In fact, getting rid of inactives actually strengthens the overall value of your customer list by lowering the rate at which you wind up in spam folders.

5. Automate Personalized Messages

Even if your messages are automated, the indication that your emails are from an actual person goes a long way. While this is certainly true when welcoming new customers, it works in many other instances as well.

Be as specific as possible. Personalized messages should also include the recipient’s first name, which must obviously be accurate. 

6. Incorporate Social Proof/Testimonials

In marketing, social proof – also known as “informational social influence” – means that people are more likely to engage with your brand if they see that others are as well. 

There are many ways to incorporate social proof into your email campaigns, including encouraging customers to write reviews, including testimonials in your messaging, telling stories that your readers can relate to, and having an active, vibrant social media presence online where your customers can interact with each other and share experiences.

7. Have a Strong Call to Action / Use Buttons

Strong, clear, one-click buttons at the bottom of your messages are the doorway through which readers can enter and become customers. Design and color your buttons in a way that they stand out and prepare the recipient to move further along your marketing funnel.

Here is a good example:

8. Don’t Overlook Your Preheader

The preheader is the crucial space next to the subject line in your browser that offers context to your message. While this plays a huge role in your recipients’ decision to open your email, too many businesses do not utilize them properly.

Here is an example of a preheader from Target:

Notice how the preheader adds the element of free shipping on top of the discounts. 

Keep a close eye on your preheaders and make sure they complement your subject lines. They have much more value than you’d think, and can easily make the difference between recipients opening and simply scrolling past your messages and actually opening them.

9. Allow Direct Replies (And Respond to Them)

Instead of sending generic emails with a “Do Not Reply” tag at the end, tailor each message as if you are having a conversation. Make it as easy as possible for your recipients to get back to you if they have any questions or concerns. If you have the ability, you can readily redirect any responses to your customer support team.

Think of how many people could be just one simple answer away from buying from you. Don’t make it any more difficult than necessary to get their feedback.

By |2019-08-09T16:44:05+00:00August 8th, 2019|Blog|0 Comments

The 7 Best Abandoned Cart Emails That Rescue Sales

Bring Customers Back With One Click

There are more steps involved with making an online purchase than one might think. 

In the digital age, shoppers can visit your store anytime, anyplace, anywhere. While in some ways this is an advantage, it also means that they don’t need to invest as much time and effort to get there – and can leave at a moment’s notice after reconsidering their purchase or deciding to shop elsewhere.

Sometimes, shoppers will leave items in their cart with either the intention of purchasing it later on, or simply because they got distracted and looked elsewhere. Of course, there are many other reasons as well.

This happens more often than you’d think. In 2018, the overall cart abandonment rate in the retail industry was 74.58% – and 79.17% across all industries.

Think of all the money businesses leave on the table everyday.

This is where abandoned cart (or cart rescue) emails come into play. A well-crafted, timely message can be just what your customers need to convince them to make the final purchase.

The following are 7 variations of this practice done properly that can serve as models for your own approaches.

1. Still Deciding?

Right off the bat, this template by Nordstrom suggests that you might still be undecided about purchasing an item. In that case, they offer to answer any questions you may have, and include a call-to-action to make your order not later – but right away.

2. Special Discount

This discount offer by Neiman Marcus adds a little extra incentive for shoppers to complete their purchase. Even if the price didn’t necessarily play a factor in their cart abandonment, a markdown in price greatly increase the odds of purchase. 

3. Time-Sensitive Offers

This email by Levi’s
accomplishes two things that are likely to reel shoppers in and entice them to buy. Not only do they offer a discount on the original items like the previous example, they only give a
limited amount of time for shoppers to utilize it. 

4. Other Recommendations (Cross-Selling)

This template accomplishes two things. First, if the shopper still meant to purchase their original items, they obviously still have that option.

However, perhaps they already bought the same product or a similar type elsewhere. In that case, it certainly makes sense to include similar product recommendations – also known as cross-selling. 

Birchbox accomplishes this by suggesting an alternative hair product other than shampoo. Perhaps the shopper will purchase this instead – or even better – add it to the other items already in the cart.

Also note that the message shows high product ratings next to each item, and indicates that the suggested item top-rated among customers. Most shoppers take ratings into high consideration when making purchases, so be sure to show off if other customers were satisfied with their own purchases.

5. Almost Gone

On top of a cute, appealing image, this email notifies shoppers that if they do not purchase soon, their items will sell out of stock.

This also lets shoppers know that their items are in high demand, and that they would be missing out on something popular if they don’t go through with the transaction.

6. Humor/Personality

This message from Bazar gets straight to the point with a humorous message personifying the item that was left sad and lonely after the shopper walked away from it. 

Also notice the subtle, nicely-placed call to action at the bottom. It is perfectly designed for mobile browsers – which is where most card abandonments take place to begin with. 

7. Free Shipping/Returns

On top of a large image of the product to make it stand out to the reader and handwritten, personable font, this message from Warby Parker paints the purchase as particularly risk-free.

By offering free shipping and returns, shoppers are more inclined to give the product a try – particularly for an item like sunglasses. There is a reason why physical stores have mirrors and allow customers to try on their eyewear. Glasses of any kind are items that have to look and fit just right. This way, buyers have the ability to literally “try it out” and send it back to the store – or “put it back on the shelf” without any cost.


The above examples paint a clear picture of what successful cart emails should look and feel like. With automated marketing platforms like a PMA, it is easier than ever to not just design highest-quality messages that re-engage customers with your brand, but also send them at the best times and with the proper cadence.

By |2019-08-08T16:39:07+00:00August 2nd, 2019|Uncategorized|0 Comments

How to Acquire High-Value Customers [In Today’s Competitive Market]

Net New Customer Acquisition

Net new customer acquisition is absolutely essential for every business. Even with an ambitious 5% customer churn rate goal, you’re still losing customers. Bring that up to the average of 9-10%, and within a couple of years you no longer have a reliable customer base. And even if – miraculously – you have perfect customer retention, eliminating acquisition severely limits your business’s growth potential.

On top of that, customer acquisition is hard to do right – and it’s expensive whether you’re acquiring the right customers or not. Digital marketing costs are rising five times faster than inflation, Google CPCs spiked 117% in 2018 (for the fifth year in a row), and Facebook CPMs were up 77% in 2018.

In the face of these numbers, it’s hard to imagine how you can acquire new customers cheaper or more profitably each year.

However, the secret to acquisition success is deceptively simple: focus on lifetime ROI – not just on one-time cost per click

This isn’t a new concept by any means, but it poses a particularly difficult problem: How do I acquire customers that spend like my best customers? Those that spend often and generously are a sure-fire way to maximize your ROI (and of course, the volume of new customers you acquire matters as well), but you must be able to amortize the cost of acquisition over their lifetime as a customer. 

To make explicit what’s implicit – acquire customers that will continue to spend and grow with you. This constitutes the “right” customer.

Success Starts with the Metrics

Before you craft a single message or even plan your acquisition campaign, you must first determine your acquisition goal and craft your key performance indicators (KPIs). Since we want to maximize ROI while maintaining customer volume and total revenue, the three most important metrics are your: 

  • Total number of new customers.
  • Cost to acquire a customer (CAC). 
  • Customer lifetime value (LTV). 

Total Number of New Customers

The total number of new customers is intuitive – but it’s important that you have a system that can properly deduplicate buyers and identify when a customer is truly new. Just because a customer used a different email address in two different transactions doesn’t make them new again, so your system must be able to recognize this. Otherwise, the number of new customers will be far too high, and you won’t be able to understand your customers’ actual lifetime value.

Cost to Acquire a Customer (CAC)

CAC is straightforward to define: 

The nuance here comes in when you define your total cost. This can include marketing costs, employee wages, marketing software costs, and even overhead. However, it’s sufficient to use the cost of marketing media spend, which consists of your spend on Paid Search, Social Advertising, Display Networks, Direct Mail, and other media.

Customer Lifetime Value (LTV)

Customer LTV can get a little trickier depending on your business needs and model. How long is your customer’s lifetime? At what point do you need to break even or have positive ROI? Do you define customer value as Net or Gross LTV? 

The best LTV calculations will use models and machine learning to predict the future LTV of each member of your customer base. However, many retailers can start simply and define LTV using the following formula


  • V = total revenue in a 1 year period
  • P = total number of purchases in a 1 year period
  • C = total number of customers in a 1 year period
  • L = average customer lifespan

With LTV and CAC in hand, we can now easily understand our average ROI: 

Now that we can determine whether or not our acquisition efforts are successful, we can plan our acquisition campaign. This takes the form of three distinct stages: 

  • Understand your Current (and Prospective) Customers
  • Define your Most Valuable Target
  • Optimize your Campaign

Understand your Current (and Prospective) Customers and Decipher their DNA

This is arguably the most important step in the customer acquisition process: defining who is suitable for your brand. The most efficient way to see just who those people are is by looking at your existing customers.

In fact, this step is so critical that – if done haphazardly and without careful thought – you will poison your database with low-potential customers. A low-potential customer will either spend just once or spend little with your brand, be discount seekers, and ultimately have little (or worse, negative) ROI.

With major ad networks like Facebook and Google consistently raising their media prices every year, this can put you and your business in a position where you are constantly treading water – just barely getting by churning through one-and-done customers.

Meanwhile, by defining the right target, we can maximize both the LTV of acquired customers and the number of conversions per click. This increases overall ROI by minimizing the number of total clicks (and marketing spend) you need to reach your revenue and net new acquisition goals. 

And the best part? As time passes, these customers will continue to spend with your brand – consistently raising your overall ROI.

Define and Acquire the Right Target

To define and acquire the right target, you must consider four main types of data: 

  • Transactional Data
  • Behavioral Data
  • Attitudinal Data
  • Demographic Data

But it’s not enough to simply collect this data. You need a system to combine this data into a single-source database so that you can understand and act on this data for individual prospects or customers. 

Furthermore, you must be able to profile and segment these groups using all four data types simultaneously. In turn, whichever tool you use to collect, house, and process this data must also be able to combine different data sources, deduplicate records on an individual level, and provide an easy segmentation and audience generation tool.

Before we actually create our segments, it’s best to first understand why each data type is important.

Transactional Data: Understand How They Spend

Transactional data is anything and everything related to how your current and past customers have spent with you. It includes how much they spent, when they spent, what items they bought, and where they bought it. 

In order to understand who is valuable today, you’ll need to calculate your LTV (either by using machine learning or the shorthand method described above). Having access to transactional data from multiple brands offers additional insight into the true potential value of a prospect before you even try to acquire them (Co-ops are particularly good at this). 

Transactional data is also incredibly important for determining the entry-level products for new customers through market basket analytics. Entry level products play a key role both in what you communicate to your prospects via email, and what you show in paid search and social ads. 

Behavioral Data: Figure Out What They Crave

Typically, marketers have little insight into who a prospect is despite the fact that they’re often sitting on a gold mine of behavior, interaction, and engagement data. While some marketers might think: “I only send mail to my engaged list, and I look at my GA account every day” – that’s only the tip of the iceberg.

For starters, channel data tends to be anonymous (this is also the case with Google Analytics). Most tools don’t actually let you retarget specific prospects – unless you hand off some control of your brand to the ad network overlords. On the other hand, if email is the only direct-to-consumer channel you use, you’re doing your business a huge disservice in this omnichannel world.

Behavior and engagement data extends well beyond the scope of opens, clicks, and channel. You must also consider products and categories browsed, user dwell time on such products, and the frequency with which they return to them. 

In short – behavioral data informs you what your prospects crave.

Attitudinal Data: How do they Feel (about your Brand)?

Attitudinal data constitutes how a customer or prospect feels about your brand, your prices, and your products.

The simplest and most intuitive attitudinal data you have access to is your average star rating. A five-star rating means your customers like you, while a 1-star rating means…well, they don’t. Therefore, it should come as no surprise that more stars means more sales. Other people’s opinions influence consumer behavior, which is precisely why businesses care so much about net promoter scores.

The only problem with average star ranking is that it’s not so easy to act on. Having a five-star rating is great – but then what? With a system that collects individual customer ratings, you’ll have the ability to compile promoter scores for each individual. This allows you to identify customers and prospects that will positively impact your business via ratings, social media, and recommendations.  

Demographic Data: Know your Audience

Demographic data includes much of who the customer is – including their age, income, family status, place of residence, and current lifestage. 

While demographics can influence the messaging strategy you take – like displaying an image of an older, refined couple in your hero shot when you message your well-to-do Baby Boomers – it’s also an incredibly powerful indicator of not just what your prospective customers want to buy, but whether or not they can buy it.

Income and net worth strongly correlate with a consumers means to buy a product. If they can’t afford to buy what you sell at your price point – even at a discount – you’ll never sell to them. At that point, you’re better off excluding them from your acquisition efforts altogether –  they’ll only wind up hurting your ROI. 

Similarly, lifestages are important in determining a person’s desire to buy with you. Rarely would someone without a baby on the way purchase a crib – but we can almost guarantee a pregnant couple will.

Get Your Best: Segmentation and Lookalikes

Armed with our consolidated data, it’s now time to move on to the “how” of acquisition. With the modern modeling techniques that exist today, there’s little reason not to utilize lookalikes.

Most modern ad networks worth their salt handle lookalike modeling and profiling for you. This includes the advertising powerhouses of Facebook and Google. That being said, even if these networks use lookalike modeling, you still need to tell them who you want to acquire. If you give them a set of low value names, then those networks will only find low-value acquisition targets.

In order to crack open these networks to your advantage, use your current customers’ transactional data, behavior data, demographic data, and attitudinal data to acquire new customers that look just like your best customers.

But how do you define your “best” customers?

The most straightforward answer is those who spend a lot, spend frequently, and engage and like your brand. However, to figure out the proper weighting for these, you’ll need to test multiple segments to see which one performs best compared to our acquisition metrics: total number of new customers, CAC, LTV, and ROI. And whenever you utilize models, you should always test multiple different targets – lookalike models are no exception. 

To test into your best lookalike target, you must: 

  • Start with multiple potential acquisition cohorts. These can either be chosen by you or determined by an autonomous system.
  • Record the test results. If you use an autonomous system, feed them back in.
  • Adjust your lookalike target based on the success of the tests.

Ultimately, when you have an established target, you must regularly refresh the lookalike names with new customers to better hone your feedback system. This refresh is ideally automated by the same system that deduplicates and identifies truly new customers.

Below are a few “best” customer segments to kickstart your testing.

1. Best Behavior

Arguably the most intuitive of the examples here, the “Best Behavior” lookalike target is exactly what the name implies: those whose purchase behaviors indicate that they will interact and spend the best with your brand. 

The Best Behavior segment uses the following criteria:

  • The top 1.5 deciles by LTV
  • Recently Purchased
  • Holiday-independent
  • Actively Engaged
  • Net Promoter

In this case, “Recently Purchased” depends upon your customers’ purchase cadence. From the LTV formula below, you can use to estimate the number of purchases in a year, and then divide the number of days in a year to get the average number of days between purchases, labeled as :  

Customers that have recently purchased are those whose last transaction date is within the last days.

2. High-Indexing Lifestages

Many companies struggle with how to choose the best segmentation solution for their total market. Predictive Marketing Automation (PMA) platforms can access and consolidate different lifestages via third party data sources.

These provide extremely practical information about your customers’ lifestyles, life stages, incomes, interests, and – perhaps most importantly – the likelihood that they will purchase your products in the future.

People in different lifestages tend to spend differently with different brands. This means people in certain lifestages may be more valuable to your business, so you’ll want to choose the groups that index higher than your average customers by value. 

We can define this cohort as:

  • Top 3 Highest-Indexing Lifestages by LTV
  • Recently Purchased
  • Net Promoter

To figure out which lifestages are over-indexing, divide the average customer value of the members of your lifestage groups by your true average customer value. In general, those indexing above 1.05 will be valuable, and any indexing above 1.15 are your prime target. 

Considering a customers’ last purchase date will add an important dimension of recency so that you don’t attempt to acquire a lifestage that is no longer relevant to your brand. Layering in attitudinal data via the net promoter status will ensure that those in the top indexing lifestages buy your product because they actually like it – not just because they have the means to.

3. Top Promoters

As mentioned before, more stars mean more sales. Therefore, we want to leverage this beyond publicly displaying a (hopefully) 5-star ranking. This can be done by acquiring people that look like our top promoters, which is defined as:

  • The top 1.5 deciles by Promoter Score
  • Actively Engaged
  • Bought at least once

Layering in engagement data is critical. Net promoters are valuable because they feel good about your business and your product today. In turn, if they are not engaging, there may be a reason why.

In addition to lookalike acquisition, this is an excellent segment for more advanced acquisition techniques, such as setting up a referral program. Offering minor benefits to members of the Top Promoters group can net you many affordable referrals.

What Should You Pay

Before we move one step further, remember: Don’t be afraid to spend to get high-value customers. You might be breaking even or losing on the first transaction, but the first transaction does not equal the full value of the customer over the lifetime of your brand.

Remember, by utilizing our transactional, behavioral, attitudinal, and demographic data, we are stacking the deck in our favor to acquire customers that will grow in value over their lifetime

Use your target ROI and LTV calculation to determine your maximum CAC:

This is the amount you can spend to acquire a new customer on ad networks and other media.

Build an Optimal Campaign

With that said, the media cost often only gets the potential new customers entry to your site or the store – it doesn’t guarantee that they will convert. However, once a potential customer has landed on your site, they’ll start leaving behind valuable data about their intent. We can act on this in real-time to increase the probability of conversion – but only if you have a system that actively collects this behavioral data. 

Note that an anonymous site tracking system is insufficient. While it may allow you to collect data on an individual’s browsing behaviors, it does not let you directly deploy retargeting efforts on those individuals in real-time – which will cost you real dollars that you’ve already spent to drive these potential customers to your site in the first place.

With proper site tracking in place, we can now respond to a user’s site interactions to increase the probability of conversion. While we can use any of the listed campaigns, it’s best to create a layered campaign that makes use of all of those listed below. 

A good system will allow you to manage how these interact with each other, while a great system will manage them for you.

  • Prospect Activation Series
      • Many retailers implement a drip campaign when a user signs up to receive their newsletter. This is table stakes for any business, and should absolutely go beyond one simple autoresponder
  • Abandoned Cart Rescue
      • When a user shows high purchase intent by adding items to their cart but fails to check out, it’s important to deploy a series of reminders for them to do so.
  • Window Shopping Conversion Emails
      • Users may also show intent in the products they browse or the categories they search. Retarget them using this information by sending messages that incorporate the products with the greatest dwell time. 
  • Exit Intercept
    • There are key behaviors a user will demonstrate before they navigate away from your page – the two biggest indicators being inactivity (no movement on page for at least 30 seconds) or a rapid scroll back to the top of the page.
    • When these behaviors are detected, intercept their exit intent with an on-page pop up. Call their attention back to the page, and present either an email signup form (so we can contact them later) or a perceived offer (to shift their interest back to buying). 

With each of these tactics in place and properly managed, you will significantly increase the probability that the user will become a new customer (and that the money spent to drive them to your page was not wasted).


Customer acquisition is a critical component for the success of any company. But if done incorrectly, you’ll wind up acquiring low-value, one-and-done customers despite paying the steep cost for acquisition on ad networks. Without acquiring the right customers, your odds of retention and growing your ROI is slim at best. 

In this whitepaper we have outlined what you need to know to run a successful acquisition campaign – from what data you need to collect, to who you should target, to how you can convert those prospects into valuable new customers and ensure a high ROI. 

By |2019-08-28T15:28:01+00:00July 30th, 2019|Blog|0 Comments

The 5 Best Retail Loyalty Programs (and why each worked)

Rewards Fuel Retention

Loyalty programs are widely prevalent in the retail sector for a good reason – it is much easier to sell to an existing customer than it is to acquire a new one. Many studies have shown that it is anywhere between 5 and 25 times more difficult to retain a customer than to acquire a new one.

Meanwhile, loyal customers (also known as most valuable buyers) contribute 80% of a business’ total profit – while only making up 20% of total customers. Therefore, inciting brand loyalty is an extremely important objective that pays great dividends. 

Of course, designing a loyalty program – also known as reward programs – is no small undertaking. While a good loyalty program can stimulate sales, a poorly executed one can diminish revenue and disenfranchise customers.

The following are five of the best examples of retailers with efficient, well-executed loyalty programs.

1. Neiman Marcus

Neiman Marcus’ Incircle rewards program is both sophisticated and intelligently structured. It consists of a hierarchical, set of “circles” (or tiers) that customers can access based upon their level of annual spend.

Each circle comes with their own extended set of privileges, such as member-only events. There are also three circles higher than the ones listed – Circle Six, President’s Circle, and Chairman’s circle. The latter (for annual spenders of $600,000 or more) includes in-store dining, local courier delivery, and salon services – which truly goes above and beyond the typical department store experience.

At its higher levels, Neiman Marcus’ loyalty program goes beyond just saving money. It gives customers emotional feelings like recognition, exclusivity, and  a sense of being part of a larger group – almost like a family.

2. Macy’s

In addition to offering discounts, free shipping, and cash back for members with a special credit card (Silver, Gold, and Platinum), Macy’s just last year offered a “Bronze” membership for all customers – regardless of the payment method. 

This was a savvy move by the company, since average customers who are not willing (or able) to apply for a separate card are still eligible for special offers (including personalized birthday surprises). In addition, they gain incentive to shop on specified sale dates – also known as “Star Money Days.”

3. Starbucks

Starbucks’ customer rewards program is particularly innovative due to its innate connection to their mobile app. This makes the program especially easy to use for customers, who do not have to worry about carrying around and possibly losing a card or signing into an account every time.

The program’s design also works in Starbucks’ favor as well. Since buyers are required to order or pay with the app itself, the company is afforded with a wealth of actionable, centralized customer data all from the same source. 

From there, they can ingest individual customer’s order preferences, which locations they frequent, and the times of days or seasons that they purchase the most. This opens the door for more personalized, timely, and relevant customer interactions and promotional offers.

4. Sephora

Sephora has a wide-ranging, elaborate, point-driven, tiered loyalty program named Beauty Insider that provides scores of customer benefits.

What sets Sephora’s program apart from most others is that it creates a community in which people can create a dialogue, interact with each other, receive inspiration, offer recommendations, and even meet up at sponsored events featuring special services and beauty classes. 

With such a wide-ranging platform in place, Sephora is able to create an immersive, interactive customer experience that provides them with loads of buyer information that can help drive further product expansion based upon what their customers are actually talking about.

5. Nordstrom

Nordstrom is another example of a top of the line loyalty program that provides a variety of exclusive customer benefits that keeps them in the loop.

Cardmembers and members can enjoy priority access to special sales (including their July Anniversary Sale), be the first to shop select brands, access to curbside pickup, and free alterations on clothing.

Certain members can also attend beauty and style workshops, as well as preferential access to invite-only events.


Any successful loyalty program takes careful time to calculate which types of rewards work best with their customer base, while also deciding which segments to target and how.

To do so in your own business, start by asking the following questions:

  • How much are these customers worth to your brand? 
  • How often do they purchase the category of merchandise you are selling? 
  • What types of rewards make the most sense for your base?
  • How will you manage any potential liabilities associated with this program?

Each of the examples listed above demonstrate each company playing to their strengths and knowing their audience. They design programs that resonate best with their customers, encourage them to make larger and/or more frequent purchases, and take advantage of ways to instill emotional connections with their base.

By |2019-08-28T14:31:12+00:00July 17th, 2019|Blog|0 Comments

3 Key Strategies to Increase Customer Acquisition

Building Your Customer Base

Customer acquisition is difficult for any business. In fact, many studies have found that it is five times more difficult to acquire a new customer than to obtain an existing one.

As the digital world keeps evolving, the way consumers ingest and use information has changed – particularly in the way they shop and interact with new brands.

As a result of these shifts, acquisition strategies have evolved as well. 

In today’s digital environment, successful customer acquisition strategies necessitate the proper execution of these three core strategies:

1. Gauge Customer Value 

A chief component of customer acquisition is to not just seek to acquire any customer at all, but rather the ones with the highest projected lifetime value (LTV). 

For instance, if every customer you bring is a one-time buyer who never comes back after the first purchase, then you will have no recurring revenue. As a result, the return on advertising spend (ROAS) from your acquisition campaigns as a whole will be negative.

The truth is, the highest value customers – also known as most valuable buyers (MVBs) – who spend more, more often than the rest of your customer base are the ones who wind up driving the bulk of your revenue.

Ultimately, the customers who fall within the upper tier will be the most receptive to special, personalized dialogues designed to cultivate new relationships and stimulate further purchases down the road.

Understand the Acquisition Source

Oftentimes, the future lifetime value (FLTV) of customers either correlate with the channel/media source that they were funneled through or with the type of message/call to action (CTA) that they responded to.

For example, a customer acquired through a sale offer on social media would generally have a lower FLTV than another who came through organic search. This is because the latter was likely actively seeking you out in the first place.

2. Determine Which Outreach Efforts Convert

Targeted acquisition requires a keen understanding of not just your customer universe, but the different segments that you are marketing to. 

Along the way, you will find that certain messages and offers resonate more with certain segments. Therefore, pinpoint the chief segments (also known as customer personas) to hone in on and spend more of your resources working to bring them into the fold.

The most effective acquisition campaigns are the ones that maintain a close eye on promotion history and conversion rate in order to show how efficiently your advertising dollars are being spent. This affords you the ability to adjust your allowable advertising budgets and increase efficiency across the board.

These days, you have all of the technology and data at your disposal to help you understand both the efforts that are working and the ones that are not. 

From there, you can realign your focus to better match the messages and channels that are showing the greatest conversion rates and return on investment (ROI).

Employ Omnichannel Marketing

The most effective and efficient acquisition campaigns are implemented across multiple channels using a multitude of data through analytics software.

If you reach someone through multiple channels, there are likely synergies that exceed the sum of the parts. In turn, make use of the channels that are most relevant to each customer and craft timely, relevant messages across each one to maximize their chances of conversion.

3. Utilize Automation Tools

The time frame of openings to reach customers has changed dramatically in the digital age. Given the way people shop today, you must be able to respond to both their inquiries and behaviors almost instantaneously. 

The fact is, there are almost countless amounts of buying options that can be executed with a mere finger swipe or click of a button. When combined with a vast sea of competitors vying for their attention, consumers have become more fickle than ever.

Modern marketing automation software can help calculate how much you are allowed to spend in order to acquire each customer. This is known as an acquisition allowable (or allowable acquisition cost) – which is gauged by projected LTV, ROAS, channel, and offer.

In turn, Predictive Marketing Automation (PMA) platforms are more necessary than ever in order to stay on top of who is interacting with your brand, take advantage of high-value opportunities when they arise in real time, and modify your acquisition efforts to help meet (and ultimately exceed) your benchmarks and goals.

By |2019-09-13T17:51:55+00:00July 10th, 2019|Blog|0 Comments

How Integrating Direct Mail and Email Can Boost Sales

Omnichannel Success

In this omnichannel age of marketing, multiple impressions across channels not only heighten your brand awareness, they increase your likelihood of sales and conversions. 

The proper combination of email and direct mail serves as an excellent example of this principle, and is well worth taking the time to both understand and implement. 

While each channel has its own respective core strengths and weaknesses, many marketers don’t take advantage of the fact that they can actually synergize and supplement one another when used in tandem.

Here are three ways that fusing email with direct mail can help your business increase ROI and drive profits:

Re-Engage Non-Responders

While email is cheaper to send and can be easily automated, the average person is overwhelmed by so many emails each day. Therefore, most emails wind up ignored, sent to the trash bin, or simply forgotten – resulting in no further response or engagement.

Direct mail, on the other hand, achieves much higher open and response rates than email. Most people still read the physical mail that they receive, even if they are ultimately disposed of. 

If you have a key message that simply isn’t being read via repeated emails, you can easily create a list of those not responding to your emails, and use their information to craft a highly-personalized and targeted direct mail piece. This personal touch can help you to reach members of you base that likely would not have returned otherwise.

Reach Out to Prospects for New Customer Acquisition [PURLs]

It is generally frowned upon (and in some places punishable by law) to send emails to prospective customers without their consent. However, initial acquisition efforts via direct mail does not pose the same issues, and you can use your direct mail message to direct potential customers to a personal landing page – also known as PURLs.

PURLs usually include a recipient’s name in the web address. Including PURLs allow you to generate actionable data from those who engage with your direct mail efforts. You can also use QR codes, loyalty discounts, and single-use redeemable coupons to help increase engagement across digital channels.

PURLs also give marketers the ability to measure response and conversion rates for a direct mail campaign and create custom audiences in order to retarget them later.

In addition, PURLs can help you measure and retarget your direct mail recipients. If you invest in PURL tracking software, you can use the results to help inform future marketing campaigns.

Complementary Campaigns

When combined together, both email and direct mail can be designed in a way that they complement one another.

Simply put, combining email and direct mail can offer an extremely effective one-two punch and bring in sales that would not have been possible through either channel alone. 

With so much competition in the retail and e-commerce sphere, it is more necessary than ever to find ways to stand out, carve your own footprint, and maximize ROI from your campaigns. Getting the most out of each channel is essential in omnichannel marketing, so you might as well use one to supplement the other.

By |2019-09-13T15:33:15+00:00July 3rd, 2019|Blog|0 Comments

Discounting Strategies: 3 Steps To a Winning Plan [Attn: Retailers]

Discounts Driving Profits

One of the most effective methods retailers use to boost sales and customer engagement is by offering discounts on their products.

In fact, a Software Advice study found that discounting is the most popular retail pricing strategy of all, with 97 percent of survey respondents stating that they utilize discount pricing.

However, without a carefully calculated discount plan in place, you could actually wind up slashing profits, bringing in too many low-value buyers, and even hurting your brand integrity.

Therefore, it is imperative to know how to implement a discount strategy the right way. This guide will shed light on the key discounting tactics that will put your business in the best position to increase transactions and grow your customer base.

1. Set Goals: What Should Discounting Accomplish?

Prior to choosing your discount strategy, make sure that your end goal is clearly defined. Some examples include:

Customer Acquisition

Discounts are a great way to incentivize consumers who have never bought from your brand before. With less to lose on their end, they’re more likely to give your products a shot. Plus, if they’re satisfied with their purchase, they’re officially on your radar and are more likely to purchase again.

Limited time and/or storewide offers are also particularly effective in this case. Adding a sense of urgency serves as a motivating factor to buy sooner rather than later, and not limiting the scope of the sale will draw in more people.

Incite a Second Purchase/Customer Retention

Most of the buyers you work so hard to acquire only buy from you once. These are known as one-time buyers, who do not provide an ROI that is substantial enough to grow your business.

In turn, a discount enticing a buyer into a second purchase can provide a substantial payoff – particularly since many statistics show that it is at least 5 times more difficult to acquire a new customer than it is to retain one.

Additionally, it is very important to keep a close eye on your margins and Customer Acquisition Cost (CAC) as you apply discount tactics and strategies.

Reactivate Fading Customers

Design your discount offers to solely reach inactive or fading customers, instead of your Most Valuable Buyers (MVBs). If your data indicates that someone hasn’t bought from you in a while, a timely, personalized discount offer could be the difference between winning them back and losing them forever.

Reward Loyal Customers

Send a special discount for your product or service to reward your MVBs for their loyalty and incentivize them to make further repeat purchases. Research has shown that discounts and coupons are the top-ranking tactic for driving loyalty with 61% of consumers saying they use them.

2. Segment Your Customer Base [Know Who to Discount to and When]

By segmenting your customers into groups, you can customize your discounts based on their respective buying tendencies and purchase history. 

Each of these can provide actionable information about your customers’ lifestyles, lifestages, incomes, interests, and the probability that they will buy from you again.

Equipped with a Predictive Marketing Automation (PMA) platform, you could send timely, personalized discount offers to the right person, at the right place, at the right time.

For example, if you sell furniture, kitchen appliances, roofing, or landscaping products, you have the ability to send discounts to people you know for a fact is a new/prospective homeowner – and is therefore much more likely to respond to the sale. 

Create Reference Tables

Reference tables are built from the various types of transaction codes used to track retail or online sales in POS systems. These typically include customer data, transaction data, and product data.

For example, if a buyer enters a furniture store and purchases a couch on clearance (where the price has been dramatically reduced), that particular item would have a special transaction code indicating the markdown in price.

This simple set of information can be used to form a clearer buyer profiles. For instance, if the person who bought the couch also purchased other items on sale (either that same day or over a longer period of time) he/she could be categorized as a discount buyer.


3. Test Multiple Discount Tactics and Campaigns

There are a wide range of types of discounts you can use, so be sure to pick the kind of discount that best fits your overall goal and your target customers.

Examples include:


Instead of dropping the price of one product in particular, you can lower the price of specified group of items bought together.

This increases the number of items you sell, which means more revenue per order and less costs to package and ship each order if you work in e-commerce.

Seasonal/Special Event

Two common discount strategies revolve around holiday and seasonal sales. For instance, the automotive industry takes advantage of most holidays (i.e. President’s Day, Memorial Day, Labor Day) as catalysts to drive consumers into their showrooms.

Purchase Volume

In this case, buyers will pay less overall for a particular item if they buy a larger amount. This encourages them to purchase a greater number of units per order, while also spending more than they initially would have if they simply bought one of the items on its own.  

This is also an excellent tactic if you are looking to make room for more inventory or heighten the average profit of each order.

Free Shipping

Offering free shipping can be yet another way to persuade a customer to purchase and increase overall sales.

Since a downside of free shipping is increased packaging and delivery costs on your end, a solid way to cover your bases is by only offering free shipping when a customer spends a certain amount (like $35). 

This can actually entice buyers to spend more on your site on other items simply to cross the free shipping threshold.

Buy One, Get One Free

There are instances when a single discount on its own isn’t enough to draw in a sale. It’s no secret that most shoppers would prefer to receive an item that is “free” rather than at a discounted price.

An effective way to do this is by pairing a popular more expensive product along with a free one that is either less expensive or hasn’t sold as well.

Cross Sell/Upsell

Since discounts bring more people into your store (whether brick and mortar or virtual), they offer great opportunities to cross sell or upsell additional products in either the same or a similar category.

When certain items are on sale, tailor suggestions that would either complement or supplement each respective product. For some buyers, as long as they’re getting a deal on one item, they won’t mind paying full price for another related one.


There are a variety of effective methods to use discounts to your advantage. You can acquire new customers, generate more revenue from your existing customer base, enhance loyalty, and serve as the difference maker that sways buyers away from your competition.

Following and enacting the steps and tactics listed above will help maximize both the value and utility of your discount practices. This ensures that your discount campaigns will serve (rather than stifle) your business goals and increase the overall potential for further growth and success down the road.

By |2019-08-07T21:12:53+00:00June 28th, 2019|Blog|0 Comments