Marketing Experts Reveal Top Strategies To

Arlen
[00:00:58]
Welcome back to the eCommerce marketing podcast, everyone. My name is Arlen Robinson and I am your host. And today we have a very special guest Valentin Radu who is the Founder and CEO of Omniconvert, a growth enabler for mid-size DTC ecommerce and retail companies looking to increase customer lifetime value and decrease customer acquisition costs.  He is a prolific speaker and a CVO (Customer Value Optimization) evangelist across various stages.  A father, husband, and pet parent, Valentin is also the Founder and Instructor at CVO Academy, where he coaches and teaches ecommerce businesses how to scale their brands profitably and sustainably and welcome to the podcast Valentin.

Valentin
[00:01:46]
Hey there, Alan, and thanks a lot for inviting me and thanks everyone for listening today.

Arlen
[00:01:52]
Yes, thank you. And we appreciate having you I’m I’m really excited to, to get into the topic for today. We’re really gonna be diving deep into using first and zero part already data to improve the customer lifetime value and the customer value and overall customer value optimization. That’s really, I know your bread and butter. You’ve been kind of knee deep into that, that area for quite a while now. So I know you’re gonna enlighten us on some very interesting things, but, but you know, before we do get into all of that, why don’t you tell us a little bit more about your background and specifically how you got into what you’re doing today?

Valentin
[00:02:28]
Yeah, of course. So all I’m an export kid from Buchar Romania. I’ve struggled to make a living and that’s why I founded one company. And then another one I felt miserably at, at the second one, the third one got really, really big. We became the largest on and car insurance player here in, in Romania. We got to have 250,000 customers sold that company. After I learned a lot about this principles that I’m going to share with you and your listeners today about improving conversion rate and improving customer lifetime value. We were struggling to break even after investing a lot of money into ads up until the moment when we realized that, Hey, there are some factors, some growth factors, which are not traffic, which we should be focusing on. And one of those would be ended up be customer lifetime value. So how much you are paying and, but how much you are getting from a specific customer, this is crucial to find out.

Arlen
[00:03:27]
Yeah, very crucial. Especially, you know, these days, a lot of times what I’ve seen, just talking to different e-commerce businesses and even in startup businesses as well. When you get going a lot of times as a, this owner, you’re really aggressive to try to obtain, you know, those first initial customers and then continually get more and more customers and, you know, just, you’re willing to kind of go all out, so to speak, to get these customers. But what I’ve seen a lot of times is businesses. Sometimes they are paying a little bit too much to acquire customers. A lot of times they’re so aggressively trying to obtain customers. They don’t realize because they may not have be, be analyzing their numbers like they should. They don’t really realize they’re really losing money in that acquisition, or they’re paying more than they’re actually getting from a customer.

Arlen
[00:04:14]
So it’s a very, very good subject to, to kind of get into today. Now, what I really right off with, as I indicated in the, in the intro and the description of this particular topic or this particular episode, and I want to dive E deep into cuz this kind of word is kind of in this area has been kind of buzzing around a lot lately. I want you to kind of enlighten us of what it is and, and that’s first and zero party data. What actually is that, what is the difference and how is it applicable for, you know, e-commerce businesses?

Valentin
[00:04:44]
Yeah, of course. So all, and we all know what the cookies are and the cookies are third party data. These are consider things that you are grabbing from third party sources so that you can understand your own, your own customers. Whilst zero party data means something that the customer is willingly and intentionally sharing with you. It can be things like that. You’re collecting through an online survey, for instance, like, do you have a cat or a dog? This is zero party data. And according to that, if you are selling pet supplies or pet food, then this is going to be a, a very valuable F for you as a brand, because you can tailor the remarketing. You can tailor the email marketing, you, you can tailor basically the messaging that you’re using, according to the data that has been willingly shared by the customer. And that’s zero party data.

Valentin
[00:05:36]
While first party data is something that you are getting from your customers. Things like transaction data, things like their city, their location, their anything that you have regarding what they’ve actually done in relationship with your, with your brand. So this could be things like their segment is, I don’t know, first time buyers, this is first party data and blending. Those two together is I think the way to go in the future, we are coming after decades of acquisition marketing, where it was kind of busy to acquire new customers. But now nowadays when the, the struggle is real and we are, have a lot of brands struggling to, to make transaction in, in the range of the raws that they’re after we have to leverage zero and first party data.

Arlen
[00:06:30]
Yeah. It’s of course from listen to that description, it sounds like, of course, probably the most reliable form of that data is gonna be that first party data, that data that you’re gathering from your transactions. These are people that are direct customers purchasing from you. So obviously that’s gonna be as long, it’s not a fraudulent order. That’s that’s valid data. And then of course, other ways that you’re getting data where people are either filling out optin forms, maybe they’re even communicating with your customer customer support teams, they’re filling out help desk tickets, that type of stuff. That’s where people are manually putting in data. So, yep. It’s safe to say that that data is probably most reliable data where people are, are manually entering that. And that’s that’s data from, you know, customers and potential customers. Now, going back to the, the third party data, that’s actually obtained through different types of scripts and bots and things like that, a little less reliable, of course, it’s an obvious thing is with the tech technologies these days everybody’s on different platforms, certain browsers have blocking mechanisms.

Arlen
[00:07:32]
Some people are on these kind of no, no ad platforms, no ad browsers like the brave browsers these days, we’re where they block all of those third party cookies. So there’s a lot more people that are customers or consumers that are a little bit more leery towards getting marketed to. So they’re starting to block these things and, you know, we see these browser platforms kind of getting a little bit more on the side of the consumer or with this thing. So that type of data is getting a little bit more, less reliable. So I like what you said, as far as we need to kind of merge these two, these types of data all together and then figure out all right, what’s what, and then, you know how we can proceed forward. And as far as getting this data, once you have this data, whether you’re you, you know, focusing on just getting the first party data or you’re merging your first party, third party data and the zero party data all, all together. Once you have this information, how, how actually can it be used to improve the customer lifetime?

Valentin
[00:08:34]
Yeah, the first and the, the most easy thing that can be done first based on the first party data is to set your customers so that you can understand, which are the ones that you’re after. So for instance, with the RFM segmentation that we are applying for years now, RFM stands for recency frequency and monitor event. You give scores, you get scores for each customer, according to how recently they’ve bought, how frequently they’ve bought and what’s their total monetary value. Based on this scores, you end up having segments of highly valuable customers like your VIPs. Let’s say if they have the highest recency, they both let’s say in the last three weeks, they have the frequency, they’ve bought six times from your brand and they have the highest monetary value. Yeah. Let’s say they’ve spent more than $2,000 on your store. Then these are your golden goose.

Valentin
[00:09:26]
Right? Okay. They should be treated differently. So one way to improve customer lifetime value is to find who are your ideal customers? And based on this, you’ll be able to build looklike audiences based on them. For instance, that that is one of the most used features that we have companies. We have hundreds of e-commerce stores on Shopify or Magen on, on other platforms as well, pushing data to our systems. Then they do this, our FM segmentation, they track how much of the revenue is coming from each of those customer groups. And then they use them to improve the Facebook lookalike algorithm because instead of relying on the algorithm of Facebook, which is being hit as well, right? So the algorithm is not what it used to be because we have less and less people sharing data with Facebook. That means their affinities scores are not as good as they used to be. But if you push this type of data in real time, based on your best customers, then Facebook will associate all these data points that they have that. And basically you will end up having a higher return on ad spend, which means decreasing in the customer acquisition cost plus acquiring the customers that you want because they, they will look like your best customer. So that’s one way to leverage the first party data.

Arlen
[01:10:47]
Yeah. That’s great advice, you know, because we always hear what you have to do in order to get those right customers. And that’s, you know, to try to find that ideal customer, once you’ve get gotten some additional sales and you’re looking at your data and your sales records, you see, like you said, that kind of golden goose step person that has maybe come back repeatedly, or he’s part purchased some of your highest priced items. There’s multiple people like that. Then you’re just looking at their, that segment, looking at those people, where did they come from? How did they find out what was customer journey and then exactly, you know, figuring out what that was, and then creating a profile based on that. And that’s where your kind of ideal customer avatar exists. And so, yeah, that’s, that’s, that’s some excellent advice because a lot of times, as a business, you’re always focused on just, you know, continually marketing space, marketing, upsetting, trying to obtain new customers.

Arlen
[01:11:42]
And these days it’s really easy to kind of shoot in the dark, so to speak just because of so many advertising platforms that exist these days, you know, I was telling, explain to you before we got started, that, you know, as a business I’ve been in business, you know, over 22 years. And so we started operations back in the year, 2000, there was no social media, none of that existed. I mean, the only kind of online mediums were, you know, you had some different directories and different things businesses could get listed on. And of course there was a search which were just kind of starting the paper click advertising that was just getting going. But other than that, there wasn’t a whole lot of places to advertise, but these days there’s so many options. I think businesses kind of get lazy because you’re like, all right, let me just get out here and create some Facebook ads.

Arlen
[01:12:31]
Let me do some things. Some Pinterest, LinkedIn, just, you know, it’s kind of easy to pop in your credit card and pay, but if you do not have that avatar in place of that ideal customer without, you know, if looking at your own data, then you know, you’re gonna be wasting a lot of money and, you know, maybe sending people to your business that aren’t really that right customer. So, yeah, that’s, I think, you know, great. If I, that you explained there for, for breaking that down now, what do you think of some additional ways to increase the value of each customer? So as you’re getting these customers, let’s say you’ve created this profile, you’re getting these new customers in. They seem to be kind of right. That the right type of customers that you want. Yeah. How do you get more value out of them?

Valentin
[01:13:14]
Yeah. One of the principles of the customer value optimization, I’ve been obsessed about this, this metric. I consider it the north star metric. And if you put it in relationship with the balancing it with the customer acquisition cost, you can see the help of that particular eCommerce company, right? Those should be above free. So you should get at least three times more and you are spending to acquire a customer throughout the entire lifespan of that customer so that you stay on the, on the block. So in terms of the other ways, one of my favorite ways is to actually go out there and analyze the data that you have at your disposal. So once you do this type of segmentation, you can end up looking at, are there any product in particular, which are being bought by my best customers? Because if that’s the case, maybe you should be considering to push those further.

Valentin
[01:14:07]
Not all the time, your best products are being bought by your best customers. And that means you should be looking at the product assortment. According are most sticky customers. Another thing that you can do in order to increase customer lifetime value is to focus on the post-purchase campaigns. So basically one of my favorite things is to understand why customers are buying. Let me give you an example. I I’ve been doing this in particular with a, a few stores. One of the it’s called bio health. They are selling microbiome products for people which are having all sorts of medical problems, but they are selling the same product for different purposes. So based on the methodological jobs to be done, they understood what is the job to be done by their product. And they had four different jobs. Help me feel better, help me eat anything I want without any kind of issues, help me look better because they had skin problems and help me revitalize, let me have more energy.

Valentin
[01:15:10]
So based on jobs to be done, they crafted different landing pages for the same product. Because at the end of the day, it’s like getting a loan. You need money, but maybe you need money for buying a new car for redecorating in your home or to buying a new home or, or whatever. It’s the same product with different purposes. That’s exactly with what happens with your products. And once you, you know, this, then you craft different landing pages to attract customers that are the most loyal, right? And in, in their case, two of those jobs were the most impactful in terms of the future, future revenue, knowing this, they ended up having different email onboarding sequences because people which are buying per products, again, if you want retention first, you need satisfaction and then you need consumption. The acquisition. The second acquisition is coming only if the customers are satisfied about the whole customer experience and the product.

Valentin
[01:16:06]
And also they are consuming the product because if there’s no consumption, nobody wants to stock some products that you’re selling. So the post-purchase campaigns, as you can see, can be made way better. If you are not bombarding your audience with, Hey, here’s 5% discount or here’s 10% discount buy again from us because people are not looking for a bargain, they are buying products to make progress in their lives. With this technique. For, for instance, you can end up having a way better customer lifetime value. We applied this and we got results of 40% uplifting customer retention. So imagine that it’s like you have an extra 40% budget to invest in media to invest in talent people. And that’s happening only by understanding your customers better and by onboarding them differently with these email campaigns.

Arlen
[01:17:00]
Okay, great. Great. Yeah, that’s very interesting because what you’re really kind of describing is even if, I think a lot of times business may think that you’ve gotta create all these different types of products, but it’s not necessarily the case. You’re looking at different segments of customers that are looking at your product for certain, for different use cases. And that’s what you really have to break down. What are those individual use cases? And then from there, all right, what are the landing pages for this use case? What are the landing pages for another use case? And so I get a good example would be like a company that may be selling camping tents. For instance, one use case of course could be of course out outdoor camping, of course, you know, just going out there, getting into the wild of the woods or whatever and, and going camping.

Arlen
[01:17:47]
Another use case is I know one kind of big thing here in the us is a lot of times kids like to build forts and that type of thing. Yeah. And some of these tents could be used for it like a Fort. And so that could be a use case. Believe it or not a company may not be thinking about somebody buying it for that case. But if it was an easily easy to simple tent, that could be a possible use case. So it’s those types of things that you may not think of about where you can break it down. And then, like you said, translate that into email sequence based on that type of customer, kind of what they’re looking for. Cause ultimately it’s beyond the discount, you know, the discounts a great and sending those out are fine, but ultimately people want to solve a problem. They want your, because they have a particular issue or they have something, you know, a need for it. And that’s, that’s really, really, what’s gonna go a long way, you know, for sure. Now, bein, we get ready to, to wrap things up. I wanted to see if you could highlight some examples of some businesses that, you know, you either work with, you’re just familiar with that have improved their customer lifetime value and you know, what are some specific things that they did?

Valentin
[01:18:55]
Yeah. One example that I have in my mind is a company called the two. They are selling two shots. They’ve applied this whole methodology. Basically we, we assisted them down the road. Now their customer lifetime value is 40 better year over year. Okay. They’ve applied the whole methodology by using zero and first party data. And another thing which was vital for them is that they’ve also used our systems to track net promoter score. So one of the most important parts of the customer lifetime value is to make sure that the customers are happy. That’s the eCommerce growth flywheel. If the customers are happy, they will buy again and they will promote you to their peers and their colleagues. If they’re not happy, you will always chase for other customers to, to come back. So their NPS right now is better than apples, NPS. And basically that means they, they have 88 NPS.

Valentin
[01:19:53]
That also means all their customers, almost all of their customers are really happy about the whole customer experience. So one thing that is crucial is to understand if you eCommerce is actually making the life of the customers better, or you are just shipping products from a to B and always chasing for customers that never come back. And I think that’s one, one important aspect that should be taken in into account by many companies, which are, let’s say obsessed about the acquisition part, but they are not looking at what happens post purchase because the cheapest and the most way to do marketing is through your existing happy customers. Yeah. World of mouth is still the best form of advertising out there.

Arlen
[02:20:43]
Yeah, it definitely is. And that’s, that’s a big deal. I have an NPS score greater than the apples NPS score. So, you know, you’re doing the right thing if you’re, you know, in that range. So yeah, that, that’s, that’s an awesome suggestion. And you know, of course I’m a huge advocate for the word of mouth marketing. Nothing really trumps that. A lot of businesses don’t really realize that even if they don’t have formalized a referral program, an in-house referral program for the customers to refer their friends and incentivize them, people are still gonna be spreading the word, regardless if someone has a, a good experience with your company and that you’re having you sell a great product, they’re gonna tell their friends, you know, whether it’s a social media, whether it’s face to face, they’re gonna say, you gotta check this out is an awesome product.

Arlen
[02:21:27]
And, but if you really, if you incentivize them to do that, they’re gonna even be more encouraged to do that and to spread the word well, Valentine, thank you for sharing that example. I appreciate that as we see there is a lot that can be done with, you know, improving the customer lifetime value of, you know, I’ve definitely learned a lot in this episode, but it’s just a process. I, I know that, you know, when you’re doing these things, improving their value, I think it really just kind of all starts at the beginning of what I said is just what you were indicating that you really have to establish your customer, who is that ideal customer, and then make sure you, you kind of tailor all of your marketing efforts based on who that particular customer is. So that’s, I think the, one of the biggest, biggest takeaways that I

Valentin
[02:22:12]
See that’s right.

Arlen
[02:22:13]
Well, you know, lastly, before we let you go, I always like to switch gears here and just so our audience can get to know you a little bit better. If you don’t mind sharing one closing fun fact about yourself that you think we’d be interested to know.

Valentin
[02:22:27]
Yeah. I’ve been a butcher you in the first for two hours. Yeah, I was, I was 17 years old. I was playing football soccer. Right. We don’t have American football here in Europe. And my, my mother was shouting at me that I’m playing all day long and she actually got me a, a temporary job in, at a place where I was supposed to, to do think like meatballs, but these are longer here. Right. And you eat them with mustard. Then I was, I was making those things for two hours and at some moment the supervisor got out to smoke and I, I was gone, you know, but that was an impactful moment in my life when I decided that, Hey, I need to do something with my life because otherwise I will end up end up here. And it’s not like I don’t respect that kind of work, but it’s it wasn’t it wasn’t for me.

Arlen
[02:23:19]
Okay. Gotcha. Gotcha. But thank you for sharing that. So it, it sounds like, yeah, that just wasn’t for you. So I guess you pretty much could determine that after two hours of, of making the, the sausage or those meatballs that, that just wasn’t for you.

Valentin
[02:23:34]
Exactly. Yeah.

Arlen
[02:23:35]
Okay. Awesome. Well, thank you for sharing that Valentine. I appreciate that. Lastly, before we do let you go. If our listeners want to reach out to you and pick your brain anymore about anything that we talked about, customer lifetime value and how to improve that, what is the best way for them to reach you?

Valentin
[02:23:52]
Yeah, so I actually have an, a proposal for them. Whoever wants to improve their customer lifetime value. We have free courses in our CVO academy. So you can find the, our academy, atomic convert.com and you can you take those free courses? And also if you like them, you can go really in depth. We have a lot of satisfied students over there. Otherwise I’m a LinkedIn person I’m, I’m posting every day about my obsession around customer lifetime value. I have a lot of insights case studies. I have the luxury of having data from almost 3000 websites, which are sharing this data and we can see insights from various verticals and pretty much that’s where you can, you can find me.

Arlen
[02:24:31]
Okay. Great. Great. Well, thank you for sharing that. I definitely encourage our listeners to take advantage of your, your academy and those free resources there at the CVO academy. And you know, and of course, if they want to take it a step further, they can definitely connect with your team or reach out to you direct me on LinkedIn or any of the other social media mediums. Well, all right, Valentine. Well, it was an honor and a pleasure speaking with you. I appreciate having you on today. The e-commerce marketing podcast,

Valentin
[02:24:57]
Thanks as well, Alan, and all the best from Bucharest.

Arlen
[02:25:01]
All right. Thank you.

speaker 1
[02:25:04]
Thank you for listening to the e-commerce market podcast.

Podcast Guest Info

Valentin Radu
CEO of Omniconvert