In my experience most business owners and managers make the mistake of thinking they know who their best customers are and therefore know their ideal target market, however more often than not, when we crunch the numbers their assumptions are wrong.

To figure out who your best customers are you need to calculate the Customer Lifetime Value (CLV) for each type of customer you have.

By understanding your CLV, you get a greater understanding of how much the relationship with your customers is worth in the long run. Determining these numbers allows you to adopt a better outlook for the future and create a far superior strategic plan.

Knowing your best customers helps to;

Grow your business the easy way

When you know who your best customers are you can start targeting more people like them. These people will spend more, stay with you longer and refer more people to you. Obviously, all these factors will accelerate your businesses growth rate without a proportionate increase in work for you.

Target the right market

Since you will know who you’re looking for, you’ll be able to find them more efficiently, speak to their specific needs more persuasively and nurture them successfully through the buyer journey. The benefit of targeting the exact right market straight off the bat, is that you’ll save a lot of marketing and advertising dollars and not accidentally fill your database with useless leads who either won’t spend much with you or worse won’t purchase anything from your down the line.

Foster a strong relationship with better customer experiences

By understating your perfect customer you are then able to connect to your customers on their terms, give them an exceptional customer experience, improve customer satisfaction, which is paramount for retention and increasing the value of your customers to your business.

This all sounds amazing, doesn’t it! So, how do with calculate this amazing CLV?

First and foremost you’ll need to answer for the following questions.

1. How often does each customer buy from you?
2. How much do they spend in each transaction?
3. How well does your business retain customers?
4. How long will they be your customer?

Next you need to divide your customers into relevant segments.

To truly identify and understand who your best customer group is you’ll need to divide all your existing customers into segments based on relevant differences, then calculate the CLV of each segment. By doing this you will see how each segment group performs against one another and then focus your efforts accordingly.

Let’s look at different segments you can use to identify your best customers.

Demographically

This is the first go to for most people, looking at customer demographics such as; age, gender, occupation, job title, income, location, education level, marital status, number/age of children and life stage.

Purchasing Habits

In addition to demographic information you will most likely have a lot of behavioural data that you can use to identify profitable customer segments. For instance looking at your sales records you should be able to determine specific customer purchasing frequency, purchase amounts and preferred services and/or products.

Referrer Information

If you are tracking referrer information for new customers (i.e by asking them “How did you hear about us?”) you can investigate the differences between customers who came from different referral sources.

Referral customers are definitely worth investigating, this is a quick and easy way to uncover a source that your marketing and sales strategies aren’t utilising.

Lead Source

Similar to referrer information, understanding what channels your customers are coming from can save you money that is being wasted on unsuccessful channels and highlight opportunities of channels being underutilised. For example, tracked lead source could be Social Media ads, Google search, event attendees. Essentially, the channel where your relationship with a customer or lead first began.

CALCULATING YOUR CLV VARIABLES

The following is a quick reference on how you can start to calculate the CLV of your above segments.

Average Order Value

The first number you need to know is your average order value per segment. It’s important to note that one customer could buy several times in a period and each of those purchases would be considered an order when calculating average order value.

Remember CLV is not based on average order value alone. It’s just one piece of the puzzle.

Average Number Of Repeat Sales:

The next number you need to identify is the average number of repeat sales determined over a set period of time. It must be the same time period you used to calculate the Average Order Value.

Customer Retention Rate:

The length of time someone remains a customer is the customer lifecycle. To calculate this figure you need to know the number of customers at the end of the period (E), the number of new customers attracted during that period (N), and the number of customers at the start of the period (S).

(Number of customers at the end of the retention period – number of customers attracted during the retention period) / number of clients at the start of the retention period x 100 = Customer Retention Rate

Customer Lifecycle

This is the average length of time a customer across a particular segment will continue doing business with you. In order to calculate this figure you need to know the customer retention rate for each segment.

1 / (1- Client Retention Rate) = Customer Lifetime

PUTTING IT ALL TOGETHER

Once you have all the above figures for a segment, it’s time to put it all together to quantify that segments lifetime value.

Average Order Value

x Average Number of Repeat Sales

x Customer Lifecycle

= TOTAL AVERAGE CUSTOMER LIFETIME VALUE

This final number represents the customer lifetime value of one segment. By comparing this number among multiple segments, you can understand which customer segments are truly valuable to your business and which ones are not.

Once you have this number, there are a few additional costs and profits you’ll want to factor in per customer to understand the hard costs and profits of each segment group.

If you wish to fully decipher and understand your businesses CLV, feel free to contact us at jacqui@stellarmarketing.com.au

The post Understanding Your Customer Lifetime Value appeared first on Stellar Marketing.

If You Use Gmail…

To make sure Gmail never filters Stellar Marketing emails as spam, all you have to do is mark the conversation as important!

If You Use Outlook…

To make sure Outlook never filters Stellar Marketing emaisl as spam, take the following steps:

• STEP 1: Select the message of the sender you wish to Whitelist
• STEP 2: Then click Home > Junk > Never Block Sender or you can right click the selected message and choose Junk > Never Block Sender from the drop down menu

If You Use Mac Mail…

To make sure Mac Mail never filters Stellar Marketing emails as spam, take the following steps:

• STEP 1: Select Mail > Preferences from the menu in Mac OS X Mail
• STEP 2: Select the Rules category and click Add Rule

• STEP 3: Type a description and ensure the criteria reads correctly
• STEP 4: Enter the domain name you wish to whitelist, and enter the actions you want to be performed
• STEP 5: Click OK

The post How To Whitelist Stellar Marketing appeared first on Stellar Marketing.

The following article by our friends at HubSpot gives a great over view of what is happening, and what changes we can expect for users and marketers in the near future. Check it out at HERE.

The post Facebook’s Data Scandal appeared first on Stellar Marketing.

Need a helping hand with your Social Media Marketing? Don’t be shy! Contact the team at Stellar Marketing for a chat.

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1. No Direction

It’s not uncommon for small, medium and even large business not to have clear strategic goals of what they wish to achieve online. This could be in terms of brand awareness, lead generation, online sales, relationship building and how well the off and online brand is being delivered. This is a massive opportunity cost for many businesses as without a clear direction, there are often frivolously spending resources and money with no understanding if these energies are actually helping the business.

2. Missed online market share

Customer demand for online services may be underestimated by businesses that don’t research and understand their industry online landscape.  Perhaps more importantly misjudge their online marketplace: the dynamics will be different to traditional channels with different types of customer profile and behaviour, competitors, propositions and options for marketing communications.

3. Giving away market share to competitors

Businesses that are not devoting enough resources to digital marketing or are using an ad-hoc approach with no clearly defined strategies, give their competitors the perfect opportunity to take their market share.

4. No online value proposition

A clearly defined online customer value proposition helps differentiate your online service encouraging existing and new customers to engage initially and stay loyal.

5. You don’t know your online customers well enough

It’s often said that digital is the “most measureable medium ever”. But Google Analytics and similar will only tell you volumes not sentiment. You need to use other forms of digital measuring tools to identify your weakpoints and then address them.

6. You’re not integrated

There is no point having digital marketing channels that don’t integrate with your traditional marketing channels. To get the best out of both your digital and traditional marketing channels it makes sense to make sure they are working together and aren’t independent of each other.

7. You’re not optimising

Every company with a website will have analytics, but many senior managers don’t ensure that their teams make or have the time to review and act on them. Once a strategy enables you to get the basics right, then you can progress to continuous improvement of the key aspects like search marketing, site user experience, email and social media marketing. So that’s our top 7 problems that can be avoided with a well thought through strategy.

Need a helping hand with your Digital Marketing Strategy? Don’t be shy! Contact the team at Stellar Marketing for a chat.

The post 7 reasons why you need a digital marketing strategy appeared first on Stellar Marketing.

First published by: ADAM FIFIELD | NOVEMBER 19, 2015 | mention.com

It’s not quite an age old question (yet), but it’s just as important. And it’s a popular thing to be thinking about this time of year: how much should you be spending on digital marketing?

If you spend too little, your message won’t make it to your target audience. If you spend too much, you won’t have the budget you need for other important aspects of your marketing plan.

So how much do you spend, and what do you spend it on? Before January 1 rolls around, you need to figure out:

• How much money to spend on digital marketing
• How much of that goes to each tactic – social, email, SEM, etc.
• What tools you need, and how much they cost
• Other expenses you need to plan for

1.     Start with a clear direction

The first step in any plan is to pick a direction and set your goal. What will be your marketing team’s main focus next year?

Do you want to build brand awareness? Do you want to increase your customer base by 5% each month? Do you want to better help customers you already have?

Before you set your marketing budget, you need to determine your marketing goals. Otherwise, you won’t know what that budget is expected to cover. For example, you can’t set your PPC budget without actually thinking about what campaigns you’re going to be running, what they’ll look like, and the price range your keywords might fall in.

By the time you’re spending next year’s money, you need to know not just what you’re doing, but how much of it. Setting goals won’t just help you pick a final number, it also narrows your focus.

2. Analyse past efforts

What strategies did you spend your money on last year? And of those, which ones were most successful? Which ones were a dud? Which ones showed promise for future tests?

Whether you’re measuring retweets, email subscribers, or leads generated. For any stage of the marketing funnel, conduct a brief postmortem. If something worked well in the past, consider why, and if you need to increase spend to take it further. If it didn’t, think about why as well, along with what could’ve turned it around.

Allocate money to different strategies based on their success, not their actual cost. Even though posting to Twitter is technically free, if Twitter marketing is working well for you, you want to toss some more money at that initiative.

For projects that aren’t going well, you have two options: kill it off and spend the money elsewhere, or figure out how to improve them.

And don’t forget to set aside some cash for testing new strategies – a lot of marketers keep 20% reserved for experimenting and trying new things.

But however you choose to divide things, don’t start off 2016 by throwing more money at ineffective marketing channels.

3. Research industry trends

While you obviously shouldn’t copy your competitors’ marketing strategies, you should know what they’re doing. Also, you need to be up to date on industry trends.

Do other companies use social media or email newsletters more to stay in touch with customers?

Does your landing page look out of date?

Are you ranking way below your competitors in search?

Have you focused your efforts on direct mail or radio advertising while your competitors have been connecting with customers online?

It’s way too easy to spy on your competitors online, whether it’s through SEO or social.

Depending on the tactic, you either want to catch up or stand out. If something’s working for your competition, make it work for you. But if you see them stumbling, use their mistakes to figure out how to stand out. Use your competitive intel to get ahead!

4. Crunch the numbers

Once you’ve set your goals, analysed your past campaigns, and researched industry trends, it’s time to crunch the numbers.

Fortunately, Leadgenix has an easy-to-use budget calculator that does the hard work for you. All you have to do is answer 4 simple questions and the calculator will work out the rest.

So how does this calculator work?

It uses a few established industry trends to set a baseline:

1. Your total marketing budget should usually be between 5% and 15% of your total revenue. The calculator uses a rough estimate of 9%.
2. Digital marketing should make up a substantial portion of your overall marketing budget. In general, 10%-50% of your total marketing budget should be used for digital.

Once a digital marketing budget baseline has been established, the budget is divided into 4 areas: SEO, PPC, social media, and content marketing.

5. Use your budget to make the biggest impact

Deciding how much to spend is a good place to start, but you still need to make sure each dollar goes as far as it possibly can.

If you really want the most for your money, you need to be using it to make some quality marketing happen.

That means your marketing needs to be great. Keep a few things in mind:

• Consistency is essential. Keep your core message the same, whether you’re sharing content through email newsletters, Twitter, or Facebook.
• Invest in quality. Your marketing content represents your brand, your values, your products, and your services. It’s essential to invest in the help you need, whether that means hiring a full-time web designer, splurging for the nice software, or handing your social media accounts over to an agency.
• Cater to your target audience. Knowing your audience will determine not only what you share, but how you share it. If they’re reading email on mobile, you need to design your newsletter for that. If they spend a lot of time on Twitter and none on Snapchat, your social media strategy’s distribution should be similar.

Make 2016 your best year yet

Digital marketing is becoming more important each year—don’t get left behind. Determine your digital marketing budget for 2016 and make it count.

Need a helping hand with your Digital Marketing Strategy? Don’t be shy! Contact the team at Stellar Marketing for a chat.

The post 5 Tips to Nail Down Your 2016 Digital Marketing Budget appeared first on Stellar Marketing.

Below is Ken Burgin’s original article, also available here.

Just as you thought you were getting your head around social media, Facebook has made it more difficult for you to target prospective diners. But spending a little will deliver big returns writes Ken Burgin.

People are frustrated that ‘free’ promotion on Facebook doesn’t work anymore. But most of your Facebook fans never saw your posts. Until last year, about 20 percent of what you put on your page was seen by them, but now it’s just a fraction of that. In 2015 and going forward, if you really want to be seen, you’ll have to pay. In fact, the options for targeted ads to reach exactly the people you want are much more exciting than the random results of free posting.

Want to just reach local mothers with young children, for a mid-morning promotion? You can do that with precise targeting that won’t be seen by anyone else, and the ad will only show on a weekday. How about a special offer for males over 40 within 20km, who like wine? That’s easy to organise. Even better, if you have an email list you can run ads that just show to these people, and create another much larger list of people who ‘look like’ them but have probably never visited. This is powerful stuff!

We’re not talking about the Boost button that appears on the bottom of each post, tempting you to spend $20 to reach more people. It’s not totally ineffective, but resist that and go to the Ads Manager, where a whole world of opportunity opens up. Use ads to get people to click through to your website, respond to a particular post you’ve put up (eg announcing a coupon or menu change), get more page ‘Likes’ or promote an event.

The Ads Manager also gives options to set up special Custom Audiences by uploading your email or SMS list – another reason it’s important to keep collecting contacts. Facebook compares your list with the profiles it has, and if they match, adds them to your Custom Audience. In my experience, you’re likely to match 40 to 50 percent of your own list. You can then use part of this list for targeting your ads, for example young males on your list for a football night, or women who say they are engaged. You can also use part of your list to create a special Custom Audience, like club members who have not renewed; they can be targeted with a special renewal offer that no-one else would see, and at much less than the cost of a mail out.

Another Custom Audience is one based on people who’ve visited your website. Facebook has a method for you to add a ‘pixel’ (a piece of code) on your website that is activated every time someone opens a web page where the code is installed. This piece of code sends general, hashed, information about the actions people take on the website to Facebook to help the advertiser target ads to the those people. For example, people who visit your Functions page could become another Custom Audience that starts to see ads related to your event packages.

Once you’ve created a Custom Audience, you can build a Lookalike Audience. Facebook explains ‘We look at the common qualities of the people in your source audience, such as demographics and interests, and then find the people who “look like” your source audience the most.’ If your email list is 5,000, this could give you a matched Custom Audience on Facebook of say 2,000. From this, you could build a local Lookalike Audience of maybe 20,000 to 40,000 (proportions based on my own use of this tool). From this new and much larger audience you’ve now got a solid number of leads to use for very targeted Facebook advertising.

Excited by this? I am! With 13 million Aussies using Facebook, most of them daily, the options are fantastic. Look around your venue – more than 80 percent of your customers use Facebook, and some of them are on it right now. It’s time to explore this new advertising frontier.

What’s all this cost?

• If you want to build fan numbers, you’ll probably pay 60 to 70c each, using the ‘Promote your Page’ option in the Ads Manager.
• A carefully targeted campaign with a link to your web page offer could cost as little as 20c per click, using the Boost Your Posts option. Once people reach your website, it’s up to you to have an offer good enough to buy.
• Start with a campaign that costs $10 per day and watch it over a week. Track the results and compare to the $70 you spent. If it’s a good return, rinse and repeat!

The post Money Talks with Facebook Marketing appeared first on Stellar Marketing.

Turn Keyword Research into Blog Topics
What top keywords, phrases and topics are critical to your business? And how do they rank? Once you’ve created a focus list of keywords and phrases you’ve got an action list of post topics. It’s critical that your headlines AND content use these keywords and phrases. Not sure what these keywords or phrases are? Bring it back to basics and put yourself in your target markets head or better yet perform some focus groups to find out what they are searching online, what questions and challenges they search that your product/service relates to.

Optimise SEO with Headlines
As discussed above, headlines are seriously crucial to the success of your SEO. Headlines online are like headlines on the front of the paper. They need to grab the reader/search engines attention and relate to the article/content. The best way to ensure your headline is a winner is to have your keywords at the beginning of the headline. E.G. ‘SEO: Marketing Tools for Small Business’ is better than ‘Everything you need to know about SEO for your small business’. Also, don’t forget you want to make sure your headline and content are relevant and informative to increase clicks and shares. The more clicks and share the better your SEO.

SEO Friendly Links & Anchor Text
Search engine spiders don’t read every word when they crawl your blog. Instead they scan specific sections most likely to have relevance to the blogs content. E.G. the headline, subheaders, alt-text of images and anchor text. Moz goes into great detail on anchor text and how best to use it in line with SEO best practice.

Need a helping hand with your SEO? Don’t be shy! Contact the team at Stellar Marketing for a chat.

The post SEO: Marketing Tools for Small Business appeared first on Stellar Marketing.

That’s right, it’s really not enough to just write press releases anymore. Thanks to the era of digitalisation, content marketing has recently allowed marketers and businesses to rethink their marketing strategies by creating more meaningful connections with potential customers.

In today’s era of blogs, and multiple social media networks, traditional advertising no longer cuts the bill. Content marketing  uses storytelling to engage with a company’s target audience, and create more high quality inbound traffic.

Content marketing is reported to generate THREE TIMES MORE LEADS than traditional marketing, and is also 31-41% less expensive than more traditional advertising. If you haven’t dabbled in content marketing, we’d love to help you get started. Simply reach out to the Stellar Marketing team, and we’ll be in touch.

2. Sponsored Content provides greater visibility

Like content marketing,  it is important to distribute compelling content to your audience through multiple channels. Sponsoring existing content is another way to connect with your potential customers.

There are many ways to get involved in sponsored content, and our team of professionals can help you to navigate your options. Sponsored content allows your brand to gain credibility from industry publications. Look at the Google search results on page one, and you’ll notice that many of these are from reputable publications. With sponsored content, you can ride the wave of others’ credibility, and drive meaningful traffic to your site.

3. Paid Social Advertising results in higher CTRS

Paid social advertising on Facebook, for example, puts your brand’s ad right in the news feed of targeted users who are already actively seeking interaction and updates regarding their points of interest.

Paid social advertising is a great option on various social networks, but some recent research into Facebook ads had surprising results: Adroll recently reported that Facebook news feed ads have a 21x higher CTR than standard web retargeting advertisements. Facebook news feed ads also have a 49x stronger CTR as compared to Facebook’s own right-hand sidebar advertisements.

Finding and communicating to your potential customers are has never been so inexpensive or instantaneous, however on the flip side this new ever changing market can be daunting and challenging and put in the ‘too hard’ basket for many businesses.

Think your business could do with a marketing update? Feel free to say hi and see how we can help at jacqui@stellarmarketing.com.au

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