Digital age marketing plans require measuring the customer’s propensity for acting on the next step in their financial journeys. Simply put, trying to capture where segments of customers are right now and where they’re going next. So, where are your customers going next?
Knowing the value of acquiring a new customer – and keeping them around as they make use of your products, services and bank or credit union as a whole – is sometimes a very complex path to navigate.
Most banks and credit unions have a good handle on exploring profitability of customers or members at a specific point in time. Reports are reviewed, margin rates are examined on products, and we zero in on where we stand to make the most money and which customers fit those profiles. The response is a matrix of where to focus our time, energy and marketing dollars to grow the bottom line.
The only problem with this equation is the fact that it’s being done by taking a snapshot and looking at the value of our customers at a moment in time.
Digital age marketing plans require measuring the customer’s propensity for acting on the next step in their financial journeys. Simply put, trying to capture where segments of customers are right now and where they’re going next.
This is where appreciating the lifetime value of customers plays a significant role. By approaching the customer equation in this way, no judgment calls about where groups of customers need to be pushed, or – should we be so ruthless – cut the dead weight of unprofitable customers, are made.
Instead, considering the lifetime value of customers gives insight into three key areas:
- What does the lifetime product and service mix look like? Holy crap, you guys, this is exactly what needs to be considered in order to properly market to the younger Millennial generation and the up-and-coming Gen Zers. Taking a global look at our products and services helps us adapt to future changes and market trends on a faster and more flexible basis.
- Stop considering today’s margins. Looking at the lifetime value of a customer requires you to forecast the remaining value of your customers at the stage(s) they are at right now, along with forecasting future revenues. Margin rates will rise and fall. But you know what products and services are going to be most profitable and where your customers’ financial journey needs to take them.
- Life stage marketing is more important than ever. Do you think considering the lifetime value of your customer might be important in your life stage marketing plan? We did, too. In fact, it’s obnoxiously important. We want our customers to stick around for all of our well-crafted life stage financial plans. Which means there is a need to ensure we’re considering the value of these plans ahead of time.
In all honesty, calculating the actual lifetime value of your customers is complex and hard to get a handle on. However, there isn’t a doubt that it doesn’t belong in your organization’s strategic marketing plan.