Even if you never sat down and read through the tale of The Tortoise and The Hare, I’d bet you know the gist of the story.
The tortoise and the hare decide to race each other. By all logic, the hare should win because he’s much faster. However, his overconfidence gets the better of him, and he loses to the tortoise which ends the story with a modern proverb:
Slow and steady wins the race.
In marketing, few things are as exciting as rolling out a successful acquisition strategy. It’s the fun part where you can launch your targeted ads and sit back and watch as traffic rolls into your site and your sales get a bump.
But it’s the hare of the story. Sure, it’s a fast way to turn up new customers, but it burns through money quickly.
Relying only on acquisition or too heavily on it is a costly way to increase revenue and can seriously start eating away at the bottom line.
I’m not saying you should never use this route, it’s important and has its place in your marketing strategy.
But if you want to play the long game, you need to switch gears and be the tortoise — which in this case means focusing on increasing your customer Lifetime Value (LTV) using email.
So why focus on increasing LTV instead of just acquisition? Let’s look at the data to find the answer:
It’s easy to see that targeting current customers and turning them into happy, repeat buyers costs less and produces more revenue in the long run.
When you look at LTV as a data point, you can understand how much each customer has currently spent and set goals to increase that number, and focus on the factors that impact it like the average order value of each customer.
And there’s no better way to target customers and increase purchase frequency from them than using email marketing.
So below, I’ll outline three vital tactics to increase the LTV of your Shopify store using email to make it happen.
There are a bunch of email segments that your Shopify store needs to continually send personalized, highly engaged emails that increase LTV. But no matter what you’re selling, the ones we’re going to cover here are valuable because they help you spot the LTV of your best customers.
Generally, your best or most valuable customers (MVCs) spend a lot of money with you each year. However, there is major potential to turn one-time or infrequent customers into an MVC and that is where segmentation can help.
Here are three email segments you can create today:
Segment 1: The 20% Low Tier
This segment is designed to gather together customers whose LTV is lower than average or what you consider average for your brand. Each email service provider will allow you to create a segment with various parameters; some give you more options while others don’t give you as much.
With Sendlane’s segments, you can create a segment based on Lifetime value that is greater than and/or less than a certain price point and drill that down even further with parameters like Purchase frequency or Total spend, if that suits you.
To keep it simple for now, you can just stick with the LTV parameter. For this segment, be sure to set the parameter to less than your average LTV. So if your average LTV is $250 per customer, set the parameter to less than $250.
With that set, it will automatically start pooling people that fit this requirement into this segment.
Segment 2: The 60% Majority
These are the ones who have your average LTV so they have an average order value, they like your products, they open your emails, and are most likely to purchase from you again.
The vast majority of your customers will fall into this segment.
This segment can have a parameter set that matches that average LTV. For instance, that might be between $250 and $300 so you can set it to gather people who fit that.
Segment 3: The 20% Best Buyers
The segment you want is made up of your best buyers, AKA, anyone who buys from you often and has a high customer LTV already.
To create a segment that finds this customer type in your Shopify customer list, use the “greater than X” for your LTV.
Again, you could drill this down further to include purchase frequency and average order value but just having the LTV set for higher than whatever your average rate is will do here as well. It all depends on your brand and what you notice in your data that’s worth drilling down for you.
Those are the three main LTV-based segments you’ll have to have on you. For the first two, you want to set the goal of moving them to the next bracket through better email automations and targeted email campaigns.
To do that, you should make sure to have all your automations include at least 1-2 emails that feature social proof like a review or other user-generated content. This can help build further trust and give people that little extra nudge to buy.
For the last one, you want to really make the ones in this group– your brand champions, if you will–happy and keep them that way because they spend the most and speak your praises.
One way you can do that is to offer them special VIP only discounts or first dibs on new products. Anything that seems to shine a more personal light on the fact that they’re an amazing customer and you appreciate them for that will go a long way.
After all, they don’t have to spend their money with you, but they do and that’s awesome.
Aim for personalized thank you emails and promos just for them for being your MVP. Make them continue to feel special and it will continue to pay off
Acquisition is your friend. And like any good friend, it should be ready to play wingman to the right-hand man of revenue:
From the get-go, it’s vital to take measures so that all acquisition leads people towards the marketing channels that lend to retention.
The first and foremost being your email list and SMS marketing following close behind with both making sure to give each person a cohesive experience with your brand.
The best way to get people into these retention-based channels is rather easy and something you’re likely doing already, namely, using your ads’ landing pages to point people to either sign up to your email list or to join your SMS list.
So, for instance, if your PPC ad points to a product page, make sure that page has an opt-in form on the page that incentivizes people to sign up. An easy incentive is X amount of money off their next purchase.
Keep in mind that SMS opt-ins may be more effective if that traffic comes from views on a mobile device versus a laptop so keep that in mind and test that out. Preferably, the flow would be to get their email address first and then their phone number, but it’s up to your goals to decide what you’d like to do.
From there, your automations should keep the ball rolling. To increase retention, make sure your welcome emails share your story and brand mission. Make sure every email in your automations offers value and connection and continue to aim for that even in emails and SMS messages outside of thor automations.
Since increased lifetime value comes from repeat customers it makes sense to roll your flow in the direction of retention since retention directly impacts LTV.
Part of getting people to spend more is to make sure they’re happy. A big part of keeping email contacts happy is to send them hyper-personalized content.
52% of consumers say if an email is not personalized they’ll go elsewhere. (Instapage) And that’s just one of the many points of proof when it comes to the importance of personalized content.
Creating that personalized content is more than simply slapping their name into the email and calling it good. Instead, it gets done by figuring out their interests and using their customers' data to individualize offers to them. Are your customers buying casual wear, business attire, or maybe athleisure?
To figure that out, you need to create tags to use in an email that’s based around interests and build new segments to bracket off those people. Then you can start sending emails to those segments that seem very personalized because you know their collective interest, past purchases and so on.
You can even trigger an automation to happen when someone has a certain tag added to their profile. But if you’re unsure what tags and other segments to create, then I suggest digging into your data.
Look at the trends in your data. What are the common interests that match your product categories? In your highest engaged emails from the last month, what inside the email drove clicks?
Then look at any content you have. What social media posts got a lot of attention? What blog content got a lot of views?
Looking at what your audience is paying attention to will help you decipher areas of interest that you can then use to create new emails with tags and segments that will help you move the LTV needle.
To maximize your LTV, you need to give value to get value.
You can wish on a star and sing bippity boppity boo all you like, but the only magic comes from being consistent with a well-drawn-out strategy and fine-tuning it as you go along.
So take the information from this blog to draw up a plan for increasing your LTV. Be consistent in your efforts. Then assess things each month, make changes and keep going.
You can make it happen. And email can help get you there.