During the second Action Seminar Brian Johnson, from Strategic Profits, challenges the common knowledge that lifetime value is the most important concept and introduces the concept of life cycle
For more information about the Action Seminar, go to http://www.actionseminar.com/
Video Transcript:
This is something that I want to just hit on and you don’t have to be an expert in this but I think you should be aware of it and be thinking about it as you are building your marketing campaigns and running your business.
To me, life cycle is more important than lifetime value. Lifetime value comes out of what you do with the life cycle of a customer or prospect. Because there is really only 2 things you can do with a prospect or a customer.
One: You can increase their life cycle, which means how long they stay paying attention to you, how long they stay in your funnel, or, increase the amount they spend during that life cycle. So, we really get into, like, a lot of stuff I showed you in the tracking and stuff, and I will show you some more in a second. We really get into understanding how far and how long… where do they deflect from us as a company. Something’s happening. There’s an average that happens all along all out customers and prospects. Then, all of a sudden you find that point of deflection where they start to drop off. That’s where we focus, OK? And that’s where we go and look back a few emails. What did they see, or what’s happening here? Let’s go back a week before that, or a month, or whatever your cycle is.
And we spend time focusing on that. We are constantly looking at how can we increase life cycle, and while they are in it, how can we increase what they buy? Split testing, new copy, all that stuff that you are familiar with.
And this is pretty typical of a lot of people that we speak with in the business world. You know, most people go out and they focus right here. They go out and do a little launch, or they put a product out and they’ll buy a little bit of traffic and they sell as much as they want and they stop.
They don’t measure, they have no idea what their numbers are, their metrics are. So, this is a perfect example. And then you’ve got, which I see constantly, is that you have people who go out, do a launch, put something out there and say, oh, wow, this is great. They killed it, then they don’t track anything and their lifetime value drops off and they have to go do it again. And they go do it again. And they go do it again.
They’re not paying attention to this. Which is why, you see down here. This is a very common occurrence with customer behavior mapping. If you’re not tracking it you won’t know it’s happening, which is typical of most people. They have no idea it’s even happening to them in their company. Leading to poor decisions about profitability and/or your ad campaigns,
So, we actually, and I am going to show you some spreadsheets from Precious Moments, but there’s times that we have a negative ROI on the front end. But, because we understand our lifetime value and we know our processes are working, that we actually have something that might be lower in the beginning from a sales standpoint, but we know the lifetime value is higher..
It’s just a quick example, but pay attention to this. It’s really the biggest thing here.
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