Don't Quarantine Your Marketing and Lose Customers for Life

If digital marketing was important six weeks ago, it is invaluable in the era of self-quarantines, social distancing and travel restrictions. At some point, however, the virus will run its course and we can go back to work. Once we all get back to business, everything will return to normal and be just like it was before, right? Probably not if you put your marketing budget in quarantine.

There is no easy way to say this, but companies without a digital marketing strategy are losing their customers, right now, to competitors that do.

It gets worse. Losing a customer doesn’t just mean losing one sale, unfortunately it can mean the loss of a customer for life. Customer Lifetime Value or “CLV” is the metric that indicates the total revenue a business can reasonably expect from a single customer account. It considers a customer’s revenue value, and compares that number to the company’s predicted customer lifespan.

To calculate CLV you need to calculate average purchase value, and then multiply that number by the average purchase frequency rate to determine customer value. Then, once you calculate average customer lifespan, you can multiply that by customer value to determine customer lifetime value.

For example, if your average sale is $100 and on average, a customer visits your business 10 times a year, then that customer is worth $1,000 per year. If customers on average purchase from you over a span of several years, then that the annual value is significantly underestimating the lifetime value of a customer. In this simplistic example, if your customers buy from you for a period of 10 years, on average, then your CLV is conservatively $10,000. Even small purchases can add-up quickly. For example, Starbucks estimates that its CLV is $14,099!

Marketing budgets have been cut and are likely to remain under pressure for some time. Not all budget cuts, however, are equal. Savvy marketers are optimizing their budgets by reducing spending on travel, trade shows, events and reallocating dollars to digital strategies. More than likely, your competition is leveraging digital marketing right now in an effort to steal your customers. Smart marketers who understand the CLV concept are increasing their investment in digital marketing for these reasons:

Digital is less expensive. Digital marketing typically costs a fraction of a traditional print advertisement, can be used multiple times and not seen just once in an issue of a magazine. That makes digital content look more like assets than one-time expenses.

It’s targeted. Traditional marketing channels – magazines, newspapers, television, mailers, etc., are good at reaching a large, broad audience, but with mass market advertising it is a given that most of the audience isn’t interested in your offering. Digital marketing, on the other hand, can reach highly targeted audiences with your specific value proposition.

It’s measurable. Engagement with an ad, blog post, video or social media post can be measured, tracked and compared. The typical cost per thousand impressions (CPM) for print ads typically range between $140 to $1,300, as compared to digital marketing CPM of $2.00 to $12.00.

It builds on itself. Blog posts, emails, web pages and mentions all include links to each other, which help more people find your business. The more content published, the more opportunities there are for buyers to find you.

You can’t afford to put your marketing in quarantine and let the competition steal your best customers, who are the lifeblood of your business. Contact Prism Group today to learn more about how digital marketing can be effective, measurable and affordable.

About Prism Group

Prism Group is a multi-talented markPrism Group is a full-spectrum, multi-talented B2B agency focused on Energy Tech, Technology, Energy, Services and Media markets. Our work is telling stories that matter, because our clients are working to change the world for the better. What makes us different is that we put into action the strategies we recommend – we get it done, so you can get results and increase the value of your business.