Want to increase company growth? You need to grow your customer lifetime value, not your database.


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You’d be surprised how many marketers are tasked with the number one objective of increasing the volume of subscribers/likes/followers – rather than focusing on the actual customer value. A brand may have a million customers signed up to their database, but if only a small percentage of those customers are actually engaged and spending money – then what is the point? It’s a waste of time, effort and money.

We love this quote by author Matt Blumberg “reaching the inbox isn’t your goal – engaging people is”¹. Yes, having a good subscriber base is important, but in reality you’d achieve better results by having a smaller list of engaged customers, rather than a long list of unengaged customers.

Do you know the value of your database? Or perhaps we should rephrase the question; do you know the potential value of your database?

The impact of your database on overall customer lifetime value

The true value of a database is not how many contacts it holds, it’s about how they respond. Many brands love to brag about the number of subscribers , but it’s rare they’ll tell you how engaged those people are. We are not talking just about the volume of open rate, but actual engagement. How commercially engaged are these customers to your brand?

Instead of trying to increase your database size, think of how you can make the most out of the data you already have. By 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.

For the majority of brands the initial challenge is giving customers a genuine reason to return. Australia’s largest hotel and resort operator, Mantra Group launched a customer program designed specifically to reward hotel guests who returned to one of their hotels by booking directly, benefits included late checkouts, free room upgrades and exclusive food/beverage packages. In doing so, they were able to capture invaluable customer data, which enabled them to hyper-personalise their marketing. Their Mantra Plus program generated more than AUD $10 million worth of incremental bookings in its first six months².

Don’t abuse your owned channels

More often than not, email is top of the list for marketers in how they communicate to 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? Put yourself in the customer’s shoes, consider what content you like to receive as a customer, that triggers a positive response.

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. Attempting to re-engage them will prove extremely challenging, impossible even.

Do not abuse the trust of your customers, 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!

Finally, and this is so important! When communicating to your customers, make sure you conduct multiple tests to ensure no mistakes are sent to the customer. For example, sending an email out which says %first name% instead of the customers actual name can be highly embarrassing for your brand. There is nothing worse than receiving content which clearly treats you as a number and not as an individual. Customers don’t hesitate in sharing these types of mistakes across their social networks. Test, test, test!

Marketing automation isn’t cheap

Marketing automation helps marketers communicate at scale with their customers. These are great tools (when used correctly), our recent article highlighted that whilst effective, they do require a lot of additional input.

There are great cost implications when marketing at scale, not to mention the cost of time spent managing this function – yes, it feels great when you get a campaign out of the door, but they must be targeted to be effective.

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 got was to receive 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. The type of content they should’ve received from the retailer was a suggested range of cushions which would match the lounge.

Receive a better ROAS (return on advertising spend) by targeting the right customers with the right messages. Monitor their engagement and the actual return on your investment.

Don’t rule out other direct channels, direct mail, SMS and contact centres can be highly effective when they are used appropriately or indirect like retargeted ads to targeted custom audiences. It’s about being where the customer is and communicating with them via a channel of their choice, a channel they are comfortable using.


Rather than grow your database, grow the relationships which already exist. According to Gartner ‘80% of your future profits will come from 20% of your existing customer base’. Look after your existing customers, use the database 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.

What’s your current engagement success? Rather than compare open rate, look at the success of offers/promotional redemption. Ensure your KPIs are right for growing business value vs non commercial transaction.

Always remember, it’s about continuing the conversation to grow customer lifetime value.

Unsure where to start? Customology can help you identify the customers on your database who can drive sales growth and customer lifetime value. Contact a Customologist today on +61 7 3902 7700 or [email protected] for further information.


² https://www.mantragroup.com.au/News-Media/News/loyalty-is-big-business-for-mantra-group

Michael Barnard
Michael oversees a team of Customologists with combined talent across strategy, data science, and technology, who help brands understand and influence customer behaviours. Michael’s experience in human centred design is foundational in our principles of design thinking and starting with the customer, focusing on how brands engage, keep, and grow customers.


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