Grow customer lifetime value, not your database

customer lifetime value

Last week we heard from the treasurer who warned us of a recession worse than that of world war two’s great depression. 

This is startling to hear, particularly for brands who are trying to get back to normality and grow their business. What they do now will determine their future and ensure they not only survive, but thrive. There’s a misconception that you need more customers to generate more sales. As we have stated (many times), the cost of customer acquisition is far greater than customer retention. Short-term sales do not equal long-term growth. Brands need to be looking a little closer to home – their existing customers.

Do you know the potential value of your existing customers?

Instead of trying to increase the size of your database by focusing all of your attention on customer acquisition, think of how you can make the most out of the customer data you already have. Learn how your customers are behaving by effectively segmenting and analysing this data. Not only will you determine which customers can drive sales growth, you can also activate and influence your customers to shop more often with you. 

Effective communication is key 

We love this quote by author Matt Blumberg “reaching the inbox isn’t your goal – engaging people is.”¹ 

Email is often top of the list for how marketers communicate with existing customers. After all, email is one of the only owned channels you have within your business. Asking customers to share their personal information is no easy feat. Therefore, once you have their data, what you do next could make all the difference between unsubscribing or engaging! 

You may only get one chance to onboard the customer, so use it wisely. We’ve stated previously how impactful a simple thank you can be to a customer. Keep the customer in mind with all of your communications, what value does the customer receive? How is it relevant to them? Think like a customer, consider what content you like to receive, what content triggers a positive response from you?

If a customer unsubscribes, then the chances are you have ultimately lost that customer forever, which means lifetime value, not just the value of 1 or 2 transactions (and any future referrals). Attempting to re-engage them will prove extremely challenging, impossible even. 

Do not abuse the trust of your customers by contacting them just because you can, they gave you their personal information because they believed you would provide relevant content they were interested in, not because they wanted to be spammed every other day – prove them right and exceed their expectations!

Marketing automation isn’t cheap

Marketing automation helps marketers communicate at scale with their customers. These are great tools (when used correctly), our article highlighted that whilst effective, they do require a lot of additional input. It really is the strategy that goes into them that makes them a success. There is no ‘one size fits all’, automation doesn’t mean just scheduling a whole bunch of emails. It’s about recognising where the customer is on their journey with your brand – the content should be relevant to them only, not everyone on your database.

Let’s look at an example, say a customer purchased a new lounge from a furniture retailer, they shared their contact details, and the thanks they received was generic, unpersonalised emails 3x a week, promoting furniture completely unrelated to their original purchase. This doesn’t benefit the customer, and it certainly doesn’t benefit the retailer. In fact, it costs them. The type of content the customer would’ve appreciated was a suggested range of cushions/rugs/curtains which would match the lounge.

Receive a better ROAS (return on advertising spend) by targeting the right customers with the right messages and incentives. Monitor their engagement and the actual return on your investment. Don’t waste precious marketing budget sending out unwanted emails.


Rather than grow your database, grow the relationships which already exist on your database.  According to Gartner ‘80% of your future profits will come from 20% of your existing customer base’. Look after your existing customers, use the data available to understand who they are (your best customers know more people like them, so they can refer friends) and how to target them. This will provide cost effective marketing, whilst delivering a stronger return on your budget. Now more than ever, it’s time to focus on your existing customers.

Unsure where to start? Get ahead of your competition by identifying the customers on your database who can drive sales growth and customer lifetime value. You already have all the data you need. Contact a Customologist today on 1300 264 549 or for further information.



Share this
Listen to...
Voiced by Amazon Polly