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Increasing Customer Lifetime Value Through a Comprehensive Mobile Engagement Model
- 2. Increasing Customer Lifetime Value Through a Comprehensive Mobile Engagement Model -or- Better Customer Experiences Make Better Businesses Mark Coronna Managing Director, Marks & Crown LLC
- 3. Two Concepts: Powerful when connected… • Customer lifetime value • Unique, high-value mobile experiences Session Goals: (1)Convince you to deeply understand what your mobile customers are trying to achieve (2)Translate that into unique mobile offerings that drive higher revenues and profits MARK Coronna Marks & Crown LLC
- 4. A quick review of Customer Lifetime Value (CLV) CLV= The present value of the future cash flows attributed to each customer relationship CLV = Average Monthly Revenue per Customer x Gross Margin per Customer Monthly Churn Rate MARK Coronna Marks & Crown LLC
- 5. Key drivers of a healthy Customer Lifetime Value Revenue -Transaction size - Upsell add-ons - Cross-sell related products - Purchase frequency -Value from referrals Profit from Referrals Cost Profit from Increased Purchases - MARK Product/service margin Customer acquisition cost Customer servicing cost Customer retention Coronna Profit from Reduced Operating Costs Profit from Price Premiums Base Profit Marks & Crown LLC
- 6. What’s a healthy end-to-end mobile experience? Is it this? Offers and Promotions Purchase Decision Payment Customer Value and Satisfaction Rating: MARK Coronna Marks & Crown LLC
- 7. A healthier experience looks more like this… Locator Services Info Search Product & Price Compare Offers and Promo’s Purchase Decision Payment Customer Comms and Account Servicing Loyalty Programs, Rebates, Future Offers Customer Value and Satisfaction Rating: MARK Coronna Marks & Crown LLC Warranty & Relnship Mgmt
- 8. You have to “go deep” to really understand what your customers are trying to accomplish… Payment Sub-Processes • • • • • Review payment options Check account balances Select payment option Self-service ordering Share purchase decision MARK Coronna Consumer Decisions • • • • • Do I have funds available? What purchase options are there? What purchase option is best for me? What happens if I wait? Should I order the product myself? Key Capabilities • • • • • • Payment options Check balances Funds transfer support Recommend best options Self-service ordering application Share purchase decision with others Marks & Crown LLC
- 9. It’ pretty easy miss what customers’ want… Let’s put these into order by customer preference: ___ Want offers and promotions ___ Want assistance locating stores ___ Want to purchase ___ Want interactive images It’s easy to get the list right, but the value order wrong… Shimmer Floor Wax MARK Coronna Marks & Crown LLC
- 10. Delivery of unique customer experiences requires more than a good app… MARK Coronna Marks & Crown LLC
- 11. Customer experiences must be supported by data from legacy applications and refined processes End-to-End Customer Experience Model Business & Technology Capabilities Strategic Imperatives Architecture & Infrastructure Customer Lifetime Value Model Mobile Application Development & Deployment MARK Coronna Marks & Crown LLC
- 12. Why is this important? Your score, please… Consumer reaction to poor mobile experiences: ___ ___ ___ ___ Less likely to use the mobile app Switch to competitor’s mobile app Less likely to purchase from that company Have an overall negative perception of company On the other hand: ___ Likelihood to buy from a mobile-friendly site ___ Likelihood to return to a mobile-friendly site MARK Coronna Marks & Crown LLC
- 13. Why is this important? Consumer reaction to poor mobile experiences: 48% 61% 52% 48% Less likely to use the mobile app Switch to competitor’s mobile app Less likely to purchase from that company Have an overall negative perception of company On the other hand: 67% Likelihood to buy from a mobile-friendly site 74% Likelihood to return to a mobile-friendly site MARK Coronna Marks & Crown LLC
- 14. Unique mobile experiences translate into enhanced CLV Lifetime Value Factor Potential Impacts Financial Benefits Deployment of Mobile Apps Utilize smart signage and merchandising prompts to encourage consumers to download apps Assumption: 1% new customers/year $??? Transaction Close Rates Move consumers from “shoppers” to “transactors” Assumption: 1% additional conversion/year $??? Transaction Sizes Increase transaction sizes through add-ons, services, and warranties Assumption: 3% increase in purchase size $??? Increase repeat purchases through positive consumer experiences Assumption: 1 additional purchase/consumer/year $??? Increase repeat purchases through a positive brand perception Assumption: 1 recommendation per consumer per year $??? Transaction Frequency Satisfaction and Loyalty MARK Coronna Marks & Crown LLC
- 15. Now, instead of transactions, you have healthy, ongoing customer relationships Locator Services MARK Info Search Coronna Product & Price Compare Offers and Promo’s Purchase Decision Payment Customer Comms and Account Servicing Loyalty Programs, Rebates, Future Offers Marks & Crown LLC Warranty & Relnship Mgmt
- 16. When your customers win, you win! Thanks for attending! Please feel free to take home a White Paper. MARK Coronna Marks & Crown LLC