What Matters Most When Determining A Customer’s True LTV
December 9, 2015
Facebook campaigns present a unique opportunity to both determine and understand the true lifetime value (LTV) of your customers. Not all customers have the same LTV potential and the savviest brands should target each individually. Here at Ampush, we’re experts at helping top brands connect to the most valuable customers to yield the best possible return on ad spend. Here are our top tips on determining a customer’s true LTV.
LTV is Not Cost of Acquisition
First, it’s important for advertisers to understand that LTV is not synonymous with the cost of acquiring a customer. While acquisition costs can be correlated to customer LTV, in many cases, your most expensive customers might not be the most valuable (and vice versa). Rather, we encourage our partners to think of their sales pipeline not as a runway, but a circle. With all the retargeting capabilities available via our AMP platform, there is little reason why a purchaser should not become a permanent part of your customer base, capable of being reactivated several times throughout the year, over several years.
Facebook’s strength as a customer acquisition platform is that it provides advertisers with the most powerful targeting tools possible. Instead of targeting customers with high initial conversion rates, top brands can take a more granular approach and go after more valuable segments – those who usually result in high LTV. Our AMP platform then allows top brands to scale these detailed campaigns.
Determining True LTV
As most top brands know, LTV is derived from the total revenue a given customer ends up contributing either immediately or over a set time period. This value isn’t static and here at Ampush, we improve LTV through effective retargeting campaigns. Brands should consider the 3 types of LTV when targeting new customers: those with fundamentally high LTV, those who can be converted to higher LTV, and those with influencer LTV.
Fundamentally High LTV
The granular targeting capabilities of Facebook allows us to connect our partners with fundamentally valuable customers like moms, heads of household, product enthusiasts and individuals with large relationship networks (who they shop for). Tapping into the full LTV of these customers is dependent upon letting them know the breadth of our partner’s product offering instead of over targeting them for products specific to just them.
Converting to Higher LTV
The likelihood of repeat purchases increases after the third purchase. This means that it’s actually easier to boost the LTV of a single customer once you drive them past the third interaction. Ampush analysts convert repeat customers via sophisticated retargeting campaigns that combine relevance and timing to become even more loyal to a brand. Using CRM data, Ampush can determine which factors are most significant when it comes to converting a lead into a purchase and craft campaigns to address not only that singular lead, but also all others who share similar traits. Key learnings from every stage of the conversion funnel are leveraged by Ampush analysts to consistently retarget and convert previous customers and continue pushing their LTV higher and higher.
Top advertisers should utilize cross-platform visibility (and campaigns) to make sure they aren’t missing out on customers with high influencer LTV. Whether your brand uses a unique URL sharing system (for purchases or sign-ups) or your Facebook customer is an avid Pinterest pinner of your products, we help savvy brands activate these customers effectively. Ampush analysts can determine which users have the greatest influencer potential, as well as those who actually yield positive results for your brand. Influencer LTV can come from customers who regularly provide valuable User Generated Content (UGC) that, in turn, can fuel your advertising efforts.
Victoria Stringfellow is a Media Analyst at Ampush who focuses on full-funnel marketing for some of Ampush’s biggest clients. Before Ampush, Victoria studied Political Science and did ballet at Yale. Victoria lives in Brooklyn and loves baseball, cheese, and Scandal