How to Increase Your CLV with Lead Nurturing Campaigns and Growth Channels “Review”
Businesses use omnichannel ads strategy to drive their business growth. They manage multiple touchpoints so that leads can interact with their brands.
Then leads at every stage of the sales funnel can be nurtured differently as most frequently people just aren’t ready to convert, to purchase your product, or become a qualified lead, after your first interactions.
So nurture is the little you can do to move a prospect down their conversion funnel, turning a window shopper into a cash-paying consumer.
But more than moving the customers in the sales funnel thru search (Google ads, PPC campaigns) and social (Facebook ads, Youtube ads, LinkedIn ads), you should take a look at improving the programs that work for your business.
CXL has a suite of online courses to guide you on how to tell which channel best matches your business and optimize around that. And learn to build the skills to know better ways to communicate with each channel.
Many are focused on “lead generation” but what about that middle ground between a generated lead and a closed sale?
In reality, you cannot just call or email your pitch to your lead. Leads are just possibilities.
This is where lead nurturing comes in.
Lead nurturing helps develop relationships with potential customers throughout the buyer’s journey. It also helps boost sales opportunities and improve brand awareness.
It is the process of relationship-building with prospects throughout the purchase funnel. It keeps potential customers in your sales funnel by engaging and educating them, providing value, and building awareness about your products and services.
The goal of the lead nurturing process is to get prospects to choose your brand when they are ready to buy.
Lead Nurturing Campaign
A lead nurturing campaign is a series of marketing messages that are sent to a potential customer over a set period of time. A lead nurturing campaign strategy may be automated, partially automated, or executed manually.
- Personalized, targeted emails
- Email newsletters
- Direct mail
- Sales calls
- Social media marketing
- Blog posts
- PPC retargeting ads
Lead nurturing campaigns are typically sent to prospects who have already shown interest in a brand, often as a result of one or many lead generation strategies.
Why Lead Nurturing Matters?
Brands should consider adding lead nurturing to their marketing plans for a few reasons.
Demand Gen research found that 51% of marketers needed five or more touches in their lead nurturing campaigns. If you want customers to buy from you, you need to get in front of them multiple times before they will.
Marketo research shows that, on average, 50% of leads aren’t ready to make a purchase. Lead nurturing helps you stay in touch so when they are ready to buy, you are there.
Lead nurturing is a cost-effective way to generate sales. Nurturing leads drives more sales at a lower cost. According to Demand Gen, companies increase their sales up to 20% with a full lead nurturing strategy.
Lead nurturing helps brands form an ongoing relationship with a prospect. The brand can continue to engage, help, and serve them until they are ready to make a purchase.
Lead Nurturing Best Practices
Here are the following best practices to develop your lead nurturing campaigns.
Get input from marketing, sales, and customer support teams. Remember that lead nurturing isn’t unique to the marketing department. Sales and Customer Support teams have unique insight into the needs and questions of customers and prospects. Use these valuable insights to build and refine campaigns that anticipate those needs.
Don’t rely solely on automation. Human interaction can play a valuable role in your lead nurturing process. Support automated lead nurturing campaigns with personalized outreach from your sales team.
Personalize whenever possible. Automated messaging can easily feel impersonal and robotic. Use as much personalization as possible in your communications to make each touch point feel personal, exclusive, and unique.
Time outreach appropriately. Be mindful of dates and events when it would be unnatural or out of touch to send marketing messages. Also, don’t bombard your audience with messages. Design calendars that keep your name in front of your audience without giving them brand fatigue.
Once a customer has been acquired, it is far easier and cheaper to retain them than replace them.
Growth is a challenge for any business. The lifetime value of a customer (or CLTV) is an essential element of growth for any B2B SaaS company.
In addition, existing customers spend 67 percent more than new customers. So you have a lower chance of selling to a new customer who spends less, and they may also cost up to 5x more to acquire.
Knowing your CLTV is important on so many levels. The value of your customers drives how much you can afford to spend to acquire them.
You certainly don’t want the expense to acquire them and the revenue they bring in to be disproportionate. Keeping a customer, hence increasing their lifetime value, translates to increased sales at a lower cost to you.
A focus on CLTV also means a focus on making customers happy. Happy customers not only spend more money with you — increasing your CLTV — they also tell people about you.
And the reality is that 25 percent of users abandon a tool after the first use! That means that businesses are having to make up the difference of churn with acquiring more customers. This is expensive and time-consuming — especially for B2B companies where the sales cycle is longer.
The metrics are also not easy wins like acquisition metrics are. The lifetime value of a customer has to be measured over a long period of time. It requires a lot of patience and knowledge of customers.
Since we established CLTV is so valuable and how to calculate it, here are some best practices for increasing it.
5 Best Practices to Increase B2B Customer Lifetime Value
#1: Provide no-fluff onboarding experience
Customers get their very first taste of your product through your onboarding experience.
#2: Help your B2B customers succeed
Customer success is gaining traction with B2B SaaS companies. A customer should reach and experience the benefits they wanted from your product in the first place in order to increase their customer lifetime value.
McKinsey identifies five key business areas that make up the customer success framework:
- A unified go-to market strategy that features a charter for customer success.
- A sustainable funding model, built on top of the intrinsic value brought by customer success activities.
- Customer-success talent engines or the right capabilities and management to oversee customer journeys.
- Advanced analytics for predictive analysis and change management flows.
- Customer success mentality as part of the organizational culture.
It’s important to understand the factors that contribute to success. And, conversely, the factors that inhibit success. User experience is so important now that more than two-thirds of companies use this as a differentiating factor. All too often, companies see what seems to be statistics showing great usage. But they don’t realize that customers are not experiencing the benefit that they had wanted. These customers will eventually churn.
Consider what success looks like for your customers. Then, identify what is standing in the way of their success. What can you do to remove those barriers?
#3: Include upselling and cross-selling
According to McKinsey, cross-selling can boost sales by 20 percent and profits by 30 percent. It’s important that cross-selling be personalized, though. That’s because personalized cross-sells account for 27 percent of revenue despite the fact that they only account for 7 percent of the site’s visitors. However, upselling is still 20x more effective than cross-selling.
The timing needs to be right for either to work. You want to make sure that you’ve hooked them and that they are getting a lot of value from what you are providing. If you jump the gun, it may seem like you disrespect them.
Good times to cross-sell or upsell would be:
- after someone makes a purchase (either on the thank-you page or in a follow-up email);
- on the checkout page;
- in the shopping cart;
- on the product page.
Try a post-purchase cross-sell to increase your CLTV. To do this, offer a limited-time discount on an item as a thank you for the recent purchase. An upsell could be sending them a coupon code or discount if they spend a certain amount of money within a defined time period.
Show different plans side by side on your product page. Like this, buyers have the option to choose the larger, more expensive plan with all of its added benefits.
Cross-selling and upselling yield the best results when they are done in nurturing processes.
This whole cycle should happen in an omnichannel environment. B2B in omnichannel removes friction and minimizes the churn rate that would otherwise occur when shifting prospects from channel to channel in the multichannel approach.
Stop leaving money on the table! Your happy customers want more of you.
#4: Improve renewals
People are more likely to renew their subscriptions if they are happy and engaged. Keep them engaged all year by sending them timely emails with helpful tips, tricks, and highlights of their benefits.
Add an additional touchpoint around renewal time to remind them of your value. By notifying them of the upcoming renewal, you lower chargebacks and refunds requests.
Ideally, though, you would move customers from manual renewal to auto-renewal, because auto-renewals have 3x higher retention rates and higher authorization rates. Just remember that a little incentive can go a long way.
For those customers who are set up for manual renewal, send them regular reminders well in advance that their renewal time is approaching. Consider offering them a discount as a motivator for early renewal, and even a grace period if the renewal window passes.
Similar to auto-renewals, if the payment fails on manual renewals, send your customers automatic follow-ups with options for alternative payment methods, so the payment gets completed, similar to cart abandonment emails.
#5: Connect with your customers on a personal level
You can learn so much from personal relationships, though. That knowledge helps ensure you deliver the right solutions.
Get to know your customers to learn what they need, and provide content to address those needs.
Segment your users and take a look at how each persona uses your product. You can learn so much this way! Take this knowledge and create a unique nurturing strategy for each persona. This way, you can create a personalized experience that is still automated.
Fortunately, acquiring customers is not a measure of business success but converting them into loyal customers. Thus, the goal should be to increase the lifetime value of your customers.
Great onboarding experiences, intentional customer success initiatives, and personalization go a long way. Upselling, cross-selling, and improving renewal rates are also mechanisms well within reach to implement and start seeing an increase in CLTV.
What will you do to increase the lifetime value of your customers?