Increasing Customer Lifetime Value Through a Comprehensive Mobile Engagement Model

Increasing Customer Lifetime Value Through a Comprehensive Mobile Engagement Model-or- Better Customer Experiences Make Better Businesses

Mark CoronnaManaging Director, Marks & Crown LLC

MARK Coronna Marks & Crown LLC

Two Concepts: Powerful when connected…

• Customer lifetime value• Unique, high-value mobile

experiences

Session Goals: (1)Convince you to deeply understand what

your mobile customers are trying to achieve

(2)Translate that into unique mobile offerings that drive higher revenues and profits


A quick review of Customer Lifetime Value (CLV)

CLV= The present value of the future cash flows attributed to each customer relationship

CLV = Average Monthly Revenue per Customer x Gross Margin

per CustomerMonthly Churn Rate


Key drivers of a healthy Customer Lifetime Value

Revenue -Transaction size- Upsell add-ons- Cross-sell related products- Purchase frequency-Value from referrals

Cost - Product/service margin- Customer acquisition cost- Customer servicing cost- Customer retention

Base Profit

Profit from Increased Purchases

Profit from Price Premiums

Profit from Reduced Operating Costs

Profit from Referrals


What’s a healthy end-to-end mobile experience?Is it this?

Offers and Promotions Purchase Decision Payment

Customer Value and Satisfaction Rating:


A healthier experience looks more like this…

Locator Services

Info Search

Product & Price

Compare

Offers and Promo’s

Purchase Decision Payment

Customer Comms

and Account Servicing

Loyalty Programs, Rebates, Future Offers

Warranty &

Relnship Mgmt

Customer Value and Satisfaction Rating:


You have to “go deep” to really understand what your customers

are trying to accomplish…

• Review payment options• Check account balances• Select payment option• Self-service ordering• Share purchase decision

Sub-Processes

• Do I have funds available?• What purchase options are

there?• What purchase option is best for

me?• What happens if I wait?• Should I order the product

myself?

Consumer Decisions

• Payment options• Check balances• Funds transfer support• Recommend best options• Self-service ordering

application• Share purchase decision with

others

Key Capabilities

Payment


It’ pretty easy miss what customers’ want…

Let’s put these into order by customer preference:___ Want offers and promotions___ Want assistance locating stores___ Want to purchase___ Want interactive images

It’s easy to get the list right, but the value order wrong…Shimmer Floor Wax

http://screen.yahoo.com/shimmer-floor-wax-000000185.html


Delivery of unique customer experiences requires more than a

good app…


Customer experiences must be supported by data from legacy

applications and refined processes

Strategic Imperatives

End-to-End Customer Experience Model

Customer Lifetime Value Model

Business & Technology Capabilities

Architecture & Infrastructure

Mobile Application Development &

Deployment


Why is this important? Your score, please…

Consumer reaction to poor mobile experiences:

___ Less likely to use the mobile app___ Switch to competitor’s mobile app___ Less likely to purchase from that company___ Have an overall negative perception of company

On the other hand:___ Likelihood to buy from a mobile-friendly site___ Likelihood to return to a mobile-friendly site


Why is this important?Consumer reaction to poor mobile experiences:

48% Less likely to use the mobile app61% Switch to competitor’s mobile app52% Less likely to purchase from that company48% Have an overall negative perception of company

On the other hand:67% Likelihood to buy from a mobile-friendly site74% Likelihood to return to a mobile-friendly site


Unique mobile experiences translate into enhanced CLV

Lifetime Value Factor Potential Impacts Financial Benefits

Deployment of Mobile Apps

Utilize smart signage and merchandising prompts to encourage consumers to download appsAssumption: 1% new customers/year

$???

Transaction Close Rates

Move consumers from “shoppers” to “transactors”Assumption: 1% additional conversion/year

$???

Transaction Sizes Increase transaction sizes through add-ons, services, and warrantiesAssumption: 3% increase in purchase size

$???

Transaction Frequency

Increase repeat purchases through positive consumer experiencesAssumption: 1 additional purchase/consumer/year

$???

Satisfaction and Loyalty

Increase repeat purchases through a positive brand perceptionAssumption: 1 recommendation per consumer per year

$???


Now, instead of transactions, you have healthy, ongoing customer

relationships

Locator Services

Info Search

Product & Price

Compare

Offers and Promo’s

Purchase Decision Payment

Customer Comms

and Account Servicing

Loyalty Programs, Rebates, Future Offers

Warranty &

Relnship Mgmt


When your customers win, you win!

Thanks for attending! Please feel free to take home a White Paper.

brandy.bergh

Overall I think the presentation is great. Ther are some slides that are a little busy but I understand that you want to keep that information together. Great work Mark!