If you’re a fan of increasing your turnover while doing less work, then a data-driven marketing tool like Verfacto is for you. At its core, data-driven digital marketing gives you the power to affect change in your business in a way that is statistically likely to increase your revenue. With data analysis, you’ll be able to improve your average order value and increase your customer lifetime value without having to make any guesses.
Data brings a sense of reliability to marketing. Instead of wondering what your ideal customer looks like or how a certain demographic responds to a product, you’ll simply be able to analyze the data.
All the answers will be right before your eyes.
In this article, we’ll break down the importance of two main data points, LTV and AOV. We’ll then demonstrate how you can use and react to these data sets to optimize your marketing campaigns, improve your sales, and create a streamlined user experience.
Customer Lifetime Value (LTV)
Customer lifetime value, commonly written as LTV or CLTV, is a metric that calculates how much a person has spent over their lifetime with your company. This takes into account all of a user’s purchases, across all categories, ever since their very first.
Using a data-driven digital marketing tool like Verfacto will allow you to calculate the LTV of individual user segments. Not only will you gain an in-depth insight into individual users, but you’ll also see the segment they make up, as well as that segment’s average LTV.
The Power of Finding Your eCommerce Store’s Average LTV
Knowing your company’s average customer LTV is one of the most critical data points you can understand as a marketing manager.
By finding the average number, you’ll then be able to clearly visualize which customer segments are above and below this figure. Doing so then gives you two pathways to follow.
The first of these is to create Facebook LookAlike campaigns of the user segments with an above-average LTV. This will let you draw in more of your best segments, boosting your company’s average LTV by securing users that are likely to spend a lot of money on your site over time.
The second path to take after calculating the average LTV is to work on improving the segments with the lowest LTV.
One way to go about this is to examine the data metric of ‘Exit point’ from your website. If you notice many users click off your site on a certain page, you could aim to optimize this page. Over time, this would reduce the click-off rate and improve conversion.
Average Order Value
Average order value, or AOV, is the average amount that someone spends when they check out of your store. To calculate this, you would divide your total revenue by the number of orders.
Although knowing your overall AOV can be useful, Verfacto allows you to engage with and respond to this metric to a greater extent.
Let’s take a look at how.
Find the Best Days of the Week for Your Business
By calculating the average order value every single day, then averaging them out over a larger period of time, Verfacto will demonstrate which days of the week are statistically best for your business.
Suppose you can see that the AOV of Friday is significantly larger than other days of the week. In that case, you can leverage this metric to boost your revenue.
By increasing marketing efforts and the number of campaigns you run on Friday, you’ll be able to bring in more revenue. If users typically spend more on a certain day of the week, then having even more users visit and shop on your eCommerce store that day will increase your total revenue.
Contrastingly, you can also use the average daily order value to calculate your worst days. Suppose Sunday continually has a lower AOV than other days of the week. In that case, you should decrease your marketing efforts on this day.
Understanding the AOV metric and applying it intelligently can boost your revenue while decreasing your marketing costs.
Data-driven digital marketing gives you the power to make informed, educated decisions about how you run your business.
Find the Best Platform for your Business
In 2019, one of the biggest days in commerce, Cyber Monday, saw a total of 54% of visitors stem from mobile devices. This marked one of the first years that mobile purchasing boomed onto the market. Since then, this trend has shown no signs of slowing down.
While the general trend is moving towards mobile purchasing, taking up the majority of eCommerce sales, this may not be the case for your store.
By calculating the AOV of users on both desktop and mobile, you’ll be able to see which platform is more popular and profitable for your website.
When you discover the AOV of either desktop or mobile sales is larger than the other, you can then concentrate your marketing strategies on those platforms. You should invest in targeting the platform that has customers with a larger AOV.
The only exception to this case is if the CPA/CPC is more expensive on your preferable platform.
Let’s say that the AOV of mobile users is 15% more than desktop users.
But, the CPC of your mobile advertising campaigns is 15% more expensive on mobile. The difference in profit then becomes neutralized.
Be sure to work out the difference in CPC before focusing on one platform over the other. If the CPC is lower or at a similar rate and the AOV is higher, then you’ll have a clear idea of which platform to focus on.
Data-driven digital marketing allows you to make intelligent choices that help your business thrive. From changing your platform marketing approaches to creating Facebook LookAlike campaigns for your best user segments – data is the way forward.
Using Verfacto, you’ll easily be able to calculate vital metrics like customer LTV and AOV. Once you know these, you’ll be able to understand your customer base on a deeper level, marketing directly to them and boosting your overall revenue.
Want to get started right this moment? Verfacto is currently offering a completely free one-month trial. Check it out and get started today!