Customer Value Optimization
March 5th, 2019
Let’s get down to the basics of CVO. Some of the biggest industries use CVO in order to grow and succeed. McDonald’s, Starbucks and Amazon have grown unbelievably using CVO, so it is definitely something worth knowing about! What does Customer Value Optimization mean? In the simplest of words, CVO is a system that can help grow your business efficiently by increasing the number of customers, increasing the average transaction value and number of transactions per customer. How to use the Customer Value Optimization System? Created by Ryan Deiss, founder of DigitalMarketer.com, this system has 5 steps you need to follow in order to reap its benefits.
- It goes without saying that you need to first determine your product/market fit. Choose a suitable traffic source. And then proceed to Step 1, which is offering a Lead Magnet. Lead magnet is a tactic in which you offer something free in exchange for data; like a prospect’s email Id or contact information.
- Step 2 is where you offer a Tripwire. This refers to the process of converting leads by offering something of low cost. Just like taking one step at a time, or dipping one toe in a pool first, A tripwire allows a lead to get a taste of your brand at a relatively low cost. At this point, the focus is to convert as many leads as possible.
- In Step 3, you focus on offering a Core Product/Service. This is the stage where you try to sell your flagship product/service. This should be the product/service related to the brands core competencies. The core product/service should be of benefit to the customer, one that solves a problem or fulfills a need.
- The next step is to offer a Profit maximizer. Any offer you make after an initial sale, is a profit maximizer. Customer acquisition cost is a hurdle for most companies, so to get to this point, is the goal. The profit maximiser is usually an upsell. Something of a relatively higher price.
- And finally, you must create a return path. These refer to all the efforts you put in, to increase the number of transactions per customer. Social Media Marketing, Blogs, Email marketing are a few methods to help create a return path for customers. Frequent and Consistent Communication will help maintain customers and increase loyalty at the same time.