This week in the Accelerator Phil Irvine joins us from The Bouqs to talk about activating CLV strategies. In a competitive space such as online flower gifting, in depth customer knowledge becomes a critical differentiator. How do you move the right customers beyond the mother’s day and valentine’s day flower purchases that make up 50-60% of revenue? Phil Irvine discusses CAC to CLV ratios, annuities and other strategies to active CLV marketing. And in a special bonus, Phil also compares the use of two enabling technologies where he’s had personal experience: Salesforce marketing cloud and Custora.
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"There’s more financial opportunity in the 26% to 85% of the customer base. This is why it’s a big focus of ours." – Phil Irvine
Key Concepts: Customer Lifetime Value, Marketing, Digital Data, Customer Centricity, Long-Term Customer Value, Marketing Leaders, Analytics, Creativity, Product Development, Audience Research
Who Should Listen: CAOs, CCOs, CSOs, CDOs, Digital Marketers, Business Analysts, C-suite professionals, Entrepreneurs, eCommerce, Data Scientists, Analysts, CMOs, Customer Insights Leaders, CX Analysts, Data Services Leaders, Data Insights Leaders, SVPs or VPs of Marketing or Digital Marketing, SVPs or VPs of Customer Success, Customer Advocates, Product Managers, Product Developers
Allison Hartsoe - 00:32 - This is the Customer Equity Accelerator. If you are a marketing executive who wants to deliver a bottom line and packed by identifying and connecting with revenue generating customers, then this is the show for you. I'm your host, Allison Hartsoe, CEO of Ambition Data. Each week I bring you the leaders behind the customer-centric revolution who share their expert advice. Are you ready to accelerate? Then let's go!
Welcome, everyone. Today's show is about activating CLV marketing. And to help me discuss this topic is Phil Irvine. Phil is the Director of CRM at The Bouqs, which you might have guessed from the name is an online floral retailer. So welcome to the show.
Phil Irvine - 01:21 - Great to be here. Allison. Uh, excited to talk about what we have going on at The Bouqs and just this topic in general. It's a very fascinating subject in my opinion.
Allison Hartsoe - 01:29 - Oh, thank you. Yeah, well you, we love data. We love getting power out of it, and we certainly love this topic. Well, could you start by telling us a little bit more about The Bouqs, especially for people like myself who were perhaps previously not familiar with the brand?
Phil Irvine - 01:44 - Yeah, definitely. So The Bouqs, as you mentioned is an online floral retailer, but it's kind of interesting about how we try to position ourselves. We try to position ourselves as a means to commemorate meaningful life memories and experiences. So, you know, the core of our portfolio is flowers. We recently launched plants, but what we really try to do is position ourselves as a unique provider of gifts in the floral and plenty of space but as a means to really highlight and, and commemorate life meaningful experiences and what not. And I, you know, what's interesting about The Bouqs is, you know, originally the way that we positioned ourselves as was the 100 percent of our flowers originally came from South America and Ecuador, and we had this whole story about flowers being grown in proximity to a volcano and that just really helped with helping us go viral in the fact that there was a perception that the flowers were higher quality.
Phil Irvine - 02:47 - And so, you know, part of our story is that we try to position ourselves as higher quality, more curated products to somewhat justify a higher price point, but at the same time we try to compliment that with the more seamless shopping experience. And so you may have seen with some of the big players like 1-800 Flowers, ProFlowers, there's a lot of upsells and you know, opportunities to buy candies or other types of gifts outside of flowers.
Allison Hartsoe - 03:14 - The cheesy teddy bear.
Phil Irvine - 03:16 - Yeah. And so, um, you know, part of our original goal was to really, really connect with the consumer that just wants to go to a place where they can find beautiful flowers, beautiful collection, and have the ability to check out and make a purchase and also know what they're paying for upfront. We now charge for delivery. But originally we didn't even charge for delivery. We just had a surface, a flat rate price. And so as the big thing we try to strive for is transparency with how we communicate with our customers.
Allison Hartsoe - 03:46 - You know, it's amazing how much that's becoming a way that people are building their businesses is by simply being transparent about how interactions happen. And I think consumers really like that. And I can see where your brand might have a different feel and a different flavor from the big 1-800 Flowers guns, which basically seems like it's a, like, it's kinda the same. It's the same corporate mentality versus a real personality in The Bouqs brand.
Phil Irvine - 04:18 - Exactly. The floral industry. It's somewhere in the range of $14 to 18 billion dollars. And, uh, you know, a lot of the big players in this space, the competitive advantage that they have is they have these huge supply chain and distribution systems in place where they can turn out and deliver vast quantities of flowers in short periods of time. You know, one big thing that's interesting about the market is 80 to 85 percent of customers buy flowers for same day purposes or next day occasions. And
Allison Hartsoe - 04:49 - Is that right?
Phil Irvine - 04:51 - That, yeah, it's a, it's actually really interesting, you know, I think a lot of people like myself, I forget things like my wife's birthday on my mother's birthday and whatnot and I have to, you know, find something last minute. And so I, I definitely fall into that demo and um, you know, The Bouqs is a smaller player, and we're trying to catch up on and from that perspective. But the way we really try to differentiate ourselves is creating unique experiences across our sites, through our communications, through the way that we handle customer contacts for our call center. And so it's a way that we definitely try to differentiate ourselves.
Allison Hartsoe - 05:26 - I can absolutely see that on the site with the whole campfire bouquet. I thought that was very clever, but you were also talking about people and the way that you manage call centers and such, and that seems to get more into your role. So could you tell us a little bit about your role as a Director of CRM and what that actually means in your everyday work?
Phil Irvine - 05:46 - Yeah, definitely. So as you mentioned, I'm the Director of CRM here at The Bouqs, and you know, kind of what that entails here is oversight over all outbound marketing touchpoints with customers and registered users that we have within our database. So the majority of communication is via email marketing, but we also do a lot with a mobile app that we have to communicate with customers and then during kind of our peak season times, which are Valentine's Day and Mother's Day, we do some direct mail promotions, a paid social via Facebook and Instagram. And so my responsibility is trying to identify the most meaningful messages, promotions, and offers for our various customers. I'm looking at what life cycle stage that they're at and then also looking at how valuable the customer they are versus ones that maybe aren't as valuable,
Phil Irvine - 06:43 - But then just lately the role has also evolved into figuring out, trying to figure out how to use data and insights that we have about customers to influence strategies with other functional areas within the company. So a big youth states we're really diving into now is how to use some of this customer data that we have about, you know, how valuable they are and especially where they are in their lifecycle stage to inform our customer experience team that's responsible for handling call center contact via phone chat and tickets as well.
Allison Hartsoe - 07:15 - So let's build on that for a second because I think you've hit on the heart of the topic which is the CLD marketing strategy. And I heard you say lifecycle stage a couple of times. Could you give us like a before and after, like if I were at a company that wasn't thinking about lifecycle stage or wasn't using lifetime value, what would the marketing strategy have been or be today if they were lagging and what is it that The Bouqs is doing that's different?
Phil Irvine - 07:44 - Yeah, definitely. It's interesting you bring that up. If you just kind of focused on email marketing and our company across all channels, the way we measure attribution is on the last click basis. I'm not the optimal way, but we look at when orders are placed, what would the last channel that the customer engages with before they made an order? So when we looked at that, when I first got here, the way that we separate out our types of campaigns in a real simplistic way is mass promotions, which are the typical kind of mass blast emails that you have to your entire customer base versus.
Allison Hartsoe - 08:20 - Broadcast.
Phil Irvine - 08:21 - Yeah, exactly, exactly. Um, things like newsletters, every month we have like a book of the month promotion where we highlighted the flower, and we offer a 10 percent discount. So things of that nature, on the other end of the spectrum, we look at revenues from triggered in lifecycle type campaigns. So when I first got here, all we really had in place were, you know, kind of typical for E-Commerce company order confirmation, shipping confirmation order delivered the type of campaigns. We had an abandoned cart emails series, but outside of that we really didn't have any trigger or event-based types of campaigns, and I think the mix was 70 percent promotional versus 30 percent Ami triggered basis as far as the revenue distribution and as I've kind of come in here and works with the team and leverage a lot of new tools that we have in place, we've been able to adjust that mix to be more 50/50
Phil Irvine - 09:17 - And just conceptually the optimal state that an organization wants to get to is sending a communication to a customer that's most relevant and most timely where it's gonna make sense to the customer to engage with the brand. Versus previously we were kind of just sending mass blast promotions to everybody where are most engaged customers. They were extremely interested, but you know, for some that just weren't in the market to gift at the time. Um, you know, whether it is relevant to them.
Allison Hartsoe - 09:48 - Yeah. That makes sense. I'm curious; you mentioned 70/30 promotional trigger now more 50/50 is optimal, 90/10 or as optimal some other mix. In other words, how much of that broadcast to you keep in play?
Phil Irvine - 10:05 - Yeah, that's an interesting question, and I would imagine it probably varies by organization. It's interesting. I used to support the email marketing program for Delta Airlines, and with Delta Airlines they would have weekly fair sales which were kind of weekly promotions and then they would have a monthly statement to kind of update you on your loyalty points status, but you know, outside of that their primary focus was on triggered and transactional types of campaigns. So you know, in that scenario the mix they were shooting for was maybe like 20 percent promotional, 80 percent triggered with us, you know, we're at about 50/50 right now. I, you know, I personally would like to see it to get to maybe 30/70. So kind of a flip of where we were when I first got here, the thing in our business in our industry is a big thing is using new seasonal collections as hooks to get customers to stay engaged and to purchase.
Phil Irvine - 11:03 - So when you have to see each year and new collections, you're naturally going to have just new content that you have to surface to your customers. So that's gonna fuel, a continuation of broadcast type message. But there's also the opportunity to inject that new content into triggered campaigns as well.
Allison Hartsoe - 11:21 - And when you say new seasonal collections, and this reminds me a little bit about how fast retailers operate is that you're not just sitting back and waiting for Christmas and Valentine's Day and Mother's Day. I'm not sure what the top holidays are, but you're essentially creating shorter seasons are shorter event timelines, in which case I would want to buy a flower for this time, or it would be relevant to send it, send a bouquet at this time, is that right? Could you talk more about that?
Phil Irvine - 11:47 - Yeah, definitely, definitely. So the top seasons, Mother's Day is number one, Valentine's is number two across the industry. Those two holidays, makeup about 50 to 60 percent of yearly revenue, which is kind of interesting. But then, yeah, to your question outside of that, what you'll see is retailers will spin up, bring collections, summer collections, fall collections, and then once you get into November and December they'll have a potentially a Thanksgiving collection, but definitely a holiday collection. And within each of those, I'll call them kind of micro-seasons. Um, you definitely see a can lead to awareness and engagement. Not nearly the same level as this Valentine's Day and Mother's Day, but we try to align our collections and the names of the flowers themselves to align with the seasons. So for July fourth, I think we have an Independence Day-themed booth that we had available. Just to give you an example.
Phil Irvine - 12:48 - So that's something that our merchandising team is really strong at with trying to be creative with the ways that they surface these new collections to align with the seasons for our customer base
Allison Hartsoe - 13:01 - You know what I want? I wanna back to school collection that has penciled in it. So I don't have to buy those for my kids.
Phil Irvine - 13:09 - I'll take that back to the state for sure.
Allison Hartsoe - 13:12 - So let's get into the data a little bit and when I'm thinking about this, the seasonal collections, it sounds like there's a frequency game going on, and I get a customer in, if we're looking at lifetime value, the goal is oftentimes to get not just an intelligent conversation going on between the customer and brand, but to encourage the repetitive engagement, repetitive frequency. This seems to be a lot of what the collections are going for, but I imagine it's a lot more than just looking at the collection and saying, you know, blasting out an email, talk to us a little bit about how your role maybe emphasizes the trigger or the lifecycle or, or another angle more than just saying, Hey, we have a holiday collection. Come back again.
Phil Irvine - 14:01 - Yeah, great question. So the real low hanging fruit in this industry outside of the Valentine's Day and Mother's Day is the concept of marketing toward annuity type of occasions. So you got married in mid-June. A big thing we try to do is if we recognize that you bought flowers for your significant other in mid June, we'll market towards that date the following year to try to get you to buy either the same collection for your significant other or another bouquet within our portfolio, so outside of the peak seasons, that's a huge part of what we try to lead into and big thing with us and with I'm sure with competitors to is the concept of date collection, of trying to get these key dates so that you can market towards the key to your customers.
Allison Hartsoe - 14:52 - Sorry, you said date collection. Not data collection, which I naturally hear
Phil Irvine - 14:58 - Yeah. Like actual dates, so weddings, birthdays, wedding dates and birthdays. Dates are the two biggest occasions that we put in efforts to collect and market towards that, towards our customers for the following years. And that's your point about looking at customer lifetime value. I think you know, the way that I like to think about it is, you know, a big thing with a lot of companies, especially startups, is you're constantly looking at the customer acquisition costs. Lifetime value ratio. You obviously want to spend a lot less to acquire a new customer then the ongoing value that they're going to provide for your organization, but I think where the things haven't really been ironed out is looking at on a continual basis. I think a lot of companies look at that upfront with acquiring a customer, but then as far as continuing to engage with the customer, a lot of organizations just say, okay, now that we acquired a customer, let's just rely on email marketing because it's kind of a sunk cost to reengage customers.
Phil Irvine - 15:58 - Um, you know, you pay a license fee upfront, and there's not really an incremental charge to send an email. But I think the way that I like to think about it in our organization is starting to think about it is if we know certain customers are providing higher lifetime value and are more engaged and providing more value to the organization, that should justify additional paid media costs to get them to make that second, third or fourth purchase even sign up for our subscription product. So I think that's the way that we're really starting to think about it is if they're maybe not engaged with email potentially that can justify activities with trying to target them with Facebook ads, Instagram, direct mail, and we're even looking into splay ad marketing as well. Um, as a, as a channel to drive engagement in purchases as well.
Allison Hartsoe - 16:47 - That's fantastic. Your building that relationship a lot more deeply because you're not just reengaging them with here's another product, but you're also saying how can we be more of service to you by having a subscription? So instead of having to come back every month, we could find a way to put the right flowers on the table for you at the right time on the dates that you want
Phil Irvine - 17:15 - Yeah. So-Called the scheduler. Shameless plug for the product. But it's definitely great for people like me. You know, as I mentioned earlier, I'm very forgetful. Key moments and key dates. And so it's basically a product that allows you to preschedule flowers to be sent to recipients of your choice on a specific date. So it's a minimum of three deliveries as a commitment. And then with that resurface, I continual discounts and also free shipping for the products. And so that's another thing that we're working with a great partner of ours because of the store right now of looking at customers that are showing behaviors of being a higher value, higher value regarding predictive value. But then we're also working with them. They, I mean they've been great. They developed a model to predict which customers or more likely to sign up for our subscription products. And so that's a big thing we're exploring right now as well is you know, outside of these key holidays where we're kind of maps marketing to our customers to buy for Mother's Day and Valentine's Day.
Phil Irvine - 18:17 - It's, you know, what are the cohorts are customers where it makes sense to be more aggressive with driving them to sign up for our schedule or products or our regular delivery subscription products.
Allison Hartsoe - 18:29 - What I'm also hearing, you're looking at individuals, it's a lower volume of individuals that you can then move into your paid media strategy. So it's not like you're saying, here are people who viewed a page and I'm going to spread paid media all over them because they viewed a page. It sounds like this is much more precise.
Phil Irvine - 18:52 - Correct. So we definitely have some straightforward retargeting that is in play. We have limited budget towards that, but yeah, kind of what I'm getting at here conceptually is having a bigger focus on the customers that have either showed or have the potential to show more value in terms of dollars, referrals, potential to sign up for subscriptions and specifically going after that cohort of customers with paid media channels there. It's going to justify the CAC to LTV ratio that makes sense to scale profitably.
Allison Hartsoe - 19:26 - That's right. That makes perfect sense. And I love that approach because I think it's fairly unique. Just like you said before, people tend to stop at CAC customer acquisition cost, and they don't really look at the long-term value. Um, so it sounds like you're definitely doing that. What are areas where you want to do more, or you think you could get more out of seal the.
Phil Irvine - 19:50 - We're still at the early stages of, you know, kind of an automated basis. We're still in a mode where we're doing one-off tests to continue that. Justified is a big area of opportunity is when you think of the kind of optimal digital experiences, you know, with customers these days and especially millennials. Video content is crucial to capture the attention of the average customer, and I think a big opportunity for us is trying to align video experiences that tie into how we want to differentiate ourselves of capturing meaningful life moments. And I think in the future for us is how can we surface compelling video content that'll further engage our customer base to stay loyal to the books versus other competitors in the space. You know, we have some video content that's out in the market on our website. We do some engagement type social through Instagram and Facebook,
Phil Irvine - 20:51 - but it's not really targeted at specific customers, and I think that's a huge opportunity for us. Like based off of customer preferences or we know recipients that they like to buy for. You know, an idea was thrown out there as aligning video content about gifting to mothers, say for instance, to people that we know in the past. So I think, I think that's really where we're trying to go in the future here.
Allison Hartsoe - 21:19 - I think that makes a lot of sense. Can you talk about the results for that? Maybe the percentage rates you've seen differently between the trigger based programs and what you would have seen before? That was something I I neglected to mention earlier, but I imagine there's probably a big difference in open rates or conversion rates or whatever your key metric is.
Phil Irvine - 21:42 - Yeah, definitely. No, I don't have all of this specific stats off hand, but if you look at orders as a percentage of total email deliveries for promotional versus transactional or triggered, it's at least 10x rater on the triggered and transactional side. Then the promotional side. So you know, I'm fortunate that is you're going after smaller more targeted audiences, so that's definitely a factor, but I think the concept of those types of communications being more timely and relevant definitely adds into that relative increase in results there.
Allison Hartsoe - 22:19 - Yep. And I can see how that feeds into the video content idea. I just saw something that came through from another channel that sort of knocked my socks off and this was a company that specialized in video, so maybe they were natural at it, but what they did is they noticed that I watched a video of theirs which was a sales video and then I didn't convert and then they sent me via email because I'm in their system and actual video that they said they created just for me now, whether they created it on the flyer or whether they had some package thing, it caught me, it made me step back a little bit because all of a sudden there was this almost one to one personal communication with video and a person who wanted to talk to me. And Wow, that was an amazing connection. And it seems like that might be something that, um, that you could lean into as well with, with, with The Bouqs, with flowers.
Phil Irvine - 23:14 - Yeah. You know, Youtube does a great job with that. I will notice if I happen to find myself, watch like an acid now. Get you to know, the next time I go back to Youtube, it's funny. I'll go there for this to maybe look up if I'm maybe researching a vendor or want to catch an episode of a show that I missed, I'll find myself just spending four times the amount of time on the Youtube site because they're recommending such personal lives, targeted video that they think that I would like and if they have a really good algorithm, obviously it definitely me from what my original purpose was, Youtube in the first place.
Allison Hartsoe - 23:49 - We've all been there. Absolutely. Now I want to mention that there was an offer that you put out at the Carma. The Custora Carma conference and if it's okay, I'll mention this offer code again, and maybe some of our listeners can take advantage of it.
Phil Irvine - 24:05 - Oh yes, definitely. Feel free to mention it. It's good until the end of the year in 2018 and yeah.
Allison Hartsoe - 24:13 - The code is called Carma15, so it gives you a 15 percent discount on a bouquet. That you might buy from The Bouqs and it's spelled with a c, c, a r, m a. do you need a space between that and the 15?
Phil Irvine - 24:27 - No, it should all just be one word connected there.
Allison Hartsoe - 24:47 - Okay. So Carma, c an r m a and then the digit 15, we'll get you 15 percent off your first bouquet at The Bouqs. Thank you so much for that offer code that we can extend to folks who are listening today. I do want to also touch on some of your previous backgrounds because CRM has really come a long way or I like to think that it's not our grandfather's CRM that was doing some basic blocking and tackling. And I saw in your profile that you had done some work at the beach body before, which was using the Salesforce system. Can you tell us a little bit more about other ways companies have used or taken advantage of CRM systems to do better marketing
Phil Irvine - 25:19 - for those that don't know, they're really more known for their individual brands. So was it Tony Horton series of fitness programs. Um, insanity was a big hit with a personal trainer at beach body. We were operating on the Salesforce marketing cloud. And so the big challenge there from a CRM perspective was a beach body was great three, four years ago with creating awareness. And demand their founders were real masters at the concept of how to use long-form infomercials to drive customers to buy fitness DVD, the fitness programs. And so the big challenge with us was anecdotally what we would hear is that people, a lot of times would be inspired. They may have felt out of shape, they were maybe partied the night before and felt that they needed to get back into a fitness regimen to get back on a program. And they were inspired at the moment.
Phil Irvine - 26:15 - But then we heard any like 60 percent of people never even opened the packages when they went a arrived at their house. So the challenge number one was it was hard to, to collect data to understand, know who was using the products and who wasn't. And our group was to try to get them to repeat buy. So we tried to use the Salesforce marketing cloud. We were kind of surface surveys and mechanisms to try to collect data to get customer feedback. And optimally what we were trying to get at was understanding based off of their past purchase history and their user preferences, trying to align ongoing promotions through email, Facebook, direct mail that would get them to repeat purchase and repeat buy in the future. So Salesforce marketing cloud would be the platform that we use to try to accomplish that. And what we were getting into right before I left was using their journey builder feature to align, um, automated nurture series to get the customer base to repeat buy.
Phil Irvine - 27:19 - So conceptually it was if we saw somebody coming to the site and we had tracked in place to see like what video or site constant that they viewed aligning a nurture series to try to get them to convert and buy in that space. It was interesting that the content that resonated the most was um, before and afters, so images of people that were out of shape. And then once they got on the program, you know, the last 20, 30, 40 pounds. And so showing those types of images and testimonials and then really the video content from the trainers themselves. We had the fortune of having a lot of brand equity with our trainers, so we try to surface that and lead with that from a content perspective to get customers to buy as well. So it was definitely an interesting challenge, but um, it's a space that I love, and it was a those, those last ones
Allison Hartsoe - 28:12 - You know. I'm gonna ask you to compare the two tools for a second because it seems like if we rewind back to pre Custora days, what you've laid out is a good practice for using the tools that are there, but most people don't really know that there are other tools that are a little sharper. So what would you say is the difference between using Custora and using Salesforce marketing cloud?
Phil Irvine - 28:39 - This is an interesting topic that definitely is discussed across a lot of different types of organizations. So at beach body, we were a much larger organization, and we actually had a dedicated marketing analytics teams that aligned with CRM and retention marketing. So with salesforce marketing automation tool, you can put in market multichannel experiences where you can automate sending certain customers email versus other Facebook ads. You can send some text messages, you know, least from, from my knowledge on the analytic side and getting into the concepts of predicting what, what types of contents that customers would want to see. It doesn't really have that natively built into the platform. So at beach body, we had our marketing analytics team to put together these types of predictive analytics and models to insert into our marketing promotions and to be more intelligent about what content and what messages do you service to our customers.
Phil Irvine - 29:46 - But on the flip side with Custora, it's been extremely helpful for us to the booths with us, Russia team running CRM here. So we're obviously very indeed and Custora out of the box. It can provide analytics around things like customer lifetime value that we discussed and predicted lifetime value. And then the big thing for us here is what our customer's recipient preferences and then also flower preferences. And then you know, do people like to buy pieces when they buy flowers? That's a big thing for us, and I think a big benefit that the Custora has provided is the ability to get access to these types of analytics to inject into our promotional strategy. Whereas with salesforce and I, you know, I'm not trying to call it salesforce specifically, but with some of the traditional marketing automation platforms and ESP, they may not necessarily have that capability built in to their initial offering and that's kind of one thing that differentiates know Custora from a traditional ESP and why I think a lot of companies are looking at using Custora as a compliment to having an esp or marketing automation platform in place right now.
Allison Hartsoe - 30:58 - I think that makes a lot of sense. It's really about sharpening the tool and the stack and the tools that you use. Either add friction resistance to your ability to communicate directly with your customer base, or they enhance it. And I think we've come. We've come into an era where the ability to reduce friction is so critical, and it's not just about design. It's about being able to have that real-time conversation. That contextual intelligence and it just takes a lot of data. Takes a lot of analysis to get there and to be smart. I think that's why we get this next generation of tools.
Phil Irvine - 31:39 - Definitely. It's to be really interesting where this space goes in the next few years because I'm seeing with some of the newer marketing automation platforms that are coming to market now, they're trying to position themselves as kind of an all in one platform where claiming to provide obviously email marketing, marketing automation, tracking of onsite behaviors that activities, but then some are also kind of trying to come to the market to say that they can also provide predictive analytics and customer analytics, and so it's gonna be interesting where things go with the trend is towards consolidation and having everything kind of house in one platform or continuing to have multiple vendors that maybe specialized in pieces of the tech stack. So where things go in the future.
Allison Hartsoe - 32:26 - I agree. So let's say that I want to start a company that allows me to communicate more strongly fashion and maybe I'm going to sell something online. What would you recommend from a marketing and a CRM perspective that I do first? Maybe first, second and third, if you have tips for the listeners,
Phil Irvine - 32:50 - the customer lifetime value strategy. I think, obviously number 1 is figuring out growth strategy to create awareness, lead generation and you know, customers to get your product off the ground, but I think as a next step is starting to really understand what are the key trends and behaviors and makeup of who you would identify as your best customers. It's something that we did here at the help. Actually a big key exercise that we did is we looked at the top 25 percent of our customers and looked at what are the trends. So mostly for us, it was mostly from a transactional perspective, but you know, you can look at it a variety of things. You know, referrals are the descriptions. Are they viewing certain content on your site, but you know with us mostly focused on transactional behaviors and kind of what we found
Phil Irvine - 33:48 - and it, it may seem really straightforward, is the people that were best customers were ones that not only bought for Mother's Day and Valentine's Day but they, they bought for a variety of other holidays outside of those two peaks seasons. And then the other big differentiator too was they purchased for multiple recipients. So I think with the average customers that we have here, they'll buy for mostly for the significant other, or maybe just for their mother, but we found with the best customer that they bought for multiple recipients. And so after we kind of got that major insight, we started to look at our life cycle marketing strategy and then the thing that we looked in and we're still involved with this now, is how can we incentivize and align campaigns and creative treatments to incentivize these types of behaviors that distinguish the best customers versus the average customers that you have.
Phil Irvine - 34:45 - And so some of the big things that we put in a market where drip series for customers, once we sensed that they might be likely to churn and we'll surface content around birthdays, anniversaries, and then a big thing for us now is home decor. So that the concept of getting people to buy flowers for their homes, for parties and things of that nature. And so it's kind of a recent insight that we get over trying to figure out how do you incentivize and promote that more because it seems like that's kind of changing behavior with our customer base right now. So yeah, and I think that was an example of what we're doing at the books, but even when I was at beach body or went out to our game and facial aesthetics, we tried to do that comparison to look at what behaviors and transactional history trends differentiate your best versus lower customers and then putting it in tactics to try to incentivize those lower tier customers to get to become your best customers.
Allison Hartsoe - 35:43 - Now, when you say lower tiered, are you talking about the lower part of the top customers? The way Custora cuts it like the top 25 percent of transactions or are you talking about the lower tier of all customers?
Phil Irvine - 35:59 - Yeah, that's point. I was referring to the lower tier of all customers, but having said that, there's going to be a subset of those lower tier customers where after a certain period, it's not going to be cost effective to try to market to them because you're inevitably going to have type customer buy from you just for a special occasion for instance, and then you know, maybe they're not loyal, they see a competitor or something of that nature, but yeah, I'm kind of referring to outside of those kind of lost customers, it's within that 26 to say 85 percent of your customer base where there is an opportunity to kind of move them into the higher tiers and that customer classification.
Allison Hartsoe - 36:47 - Got It. Let me summarize a little bit because I think what you've just said about the process here is really interesting. You basically have to have a growth strategy to get your product off the ground, and once you have that in place, then the next key essential is looking at the key trends and behaviors of your best customers. That means you have to run the CLV model to understand the spread of your customers. So traditionally we say you need about two years of data for that. But I suppose it could depend on the transaction frequency that you're working with. But let's just say that you've been in business for two years. You've got a Nice Bank of customers. You run the CLV models, and you can see then the best customers and start to mind. So here's step two, start to mine that for the trends and behaviors, and this is where you were saying that you found customers weren't just buying for your key occasions of Mother's Day and Valentine's Day, but for other occasions and also for multiple recipients.
Allison Hartsoe - 37:48 - Then in the third part, you start moving it into the life cycle marketing strategy where you start testing different incentives and creatives and drips and start maybe listening to a little closer to the customer base because you can segment what your high-value customers want from what your lower value customers want. But you can still in step four then activate different lower tiers of customers and hopefully drive them to become better customers. Overall. Did I capture that correctly?
Phil Irvine - 38:21 - That was an excellent summary. Probably better than how I said it.
Allison Hartsoe - 38:30 - Wonderful.
Phil Irvine - 38:32 - No, no. You hit on all the key points, and you know, it probably upfront, I should've mentioned that just numbers-wise, you're 26 to 85 percent of your customers. There's typically going to be just more opportunity from a financial perspective. And so that's why that's been a big focus of ours. Obviously, you know, you want to put tactics in place to maintain your top tier customers to eat baked them even more loyal and more of brand advocates. But that's why the bigger financial opportunity is kind of the lower tier just from a pure volume basis. And so that's why I think that's a, a big focus of um, you know, how we've attacked our engagement strategy at, given where we are right now,
Allison Hartsoe - 39:17 - we often put up this pyramid to say, okay, here's your top of your middle and your low-value customers. Where would you start? And it's always amazing to me where people come in, and they don't always think about like marketing is designed to leverage. You're not necessarily trying to beat up people who love you already, nor are you trying to pastor people who have said, yeah, I just am not that interested. The quantification of the 26 to 85 percent, I think that's a. that's an excellent way to think about it. Now, if people would like to get in touch with you Phil, how can they reach you?
Phil Irvine - 39:54 - Yeah, probably the best way is my LinkedIn profile. So my name is Phil Irvine, you know, I work at The Bouqs company so easy to search for mine. I think um I'm looking at the URL right now. It's linkedin.com/in/pirvine. Definitely drop me a message, connect with me. I love to network and talk about things in this space. So more than happy to help people out or if people just want to share ideas or even tell me if they think I should be doing things better here, I'm open all the types of ideas.
Allison Hartsoe - 40:29 - Fantastic. And we will link to your profile as well in the show notes when we post it. As always, everything we discuss is at ambitiondata.com/podcast. Phil, I wanna thank you so much for sharing your great ideas and joining us today. It's really been a pleasure.
Phil Irvine - 40:46 - Definitely, definitely. Thank you for the opportunity. Really, really appreciate it.
Allison Hartsoe - 40:51 - When you use your data effectively, you can build customer equity. It's not magic. It's just a very specific journey that you can follow to get results. Thank you for joining today's show. This is your host, Allison hard sale and I have two gifts for you. First, I've written a guide for the customer-centric CMO, which contains some of the best ideas from this podcast, and you can receive it right now. Simply text, ambitiondata, one word to 31996. And after you get that white paper, you'll have the option for the second gift, which is to receive the signal. Once a month. I put together a list of three to five things I've seen that represent customer equity signal, not noise, and believe me; there's a lot of noise out there. Things I include could be smart tools. I've run across articles, I've shared cool statistics, or people and companies I think are making amazing progress as they build customer equity. I hope you enjoy the CMO guide and The Signal. See you next week on the Customer Equity Accelerator.