Author: Chad Buckendahl
What if I told you that emotionally connected customers are more valuable than customers that are highly satisfied with your brand? I suspect your response would be either “Prove it.” or “Yeah … so what?” I will get to both points in this article shortly, but first, I hope that the ideas expressed here will challenge your thinking in ways that make you consider the impact that the emotional bonds you’re building (or not) with your customers has on Customer Lifetime Value (CLTV).
In a recent article published by Harvard Business Review, it suggests that the payoff is much greater when companies connect with people emotionally. In terms of impact on revenue and profitability, customers who form an emotional attachment to a brand are 52% more valuable than those who are just highly satisfied. That’s valuable information! So why does this matter? For the last 25 years, I’ve spent many days thinking about how to get consumers to buy products online. And, as anyone in this space, I keep a close eye on CLTV. Here’s a fictitious example to explain why this matters.
I know that if I acquire a customer at $40 cost per acquisition (CPA) and my average order value (AOV) is $32, I need to generate an additional $8 on that customer throughout their lifetime to simply break even on the ad spend — and that’s not even taking into account my operational expenses. Knowing that customers who form an emotional attachment to a brand are 52% more valuable than those who are just highly satisfied, I know that if I spend time trying to build an emotional bond with my customers (and everything else remains the same), I will increase CLTV.
Emotionally connected customers buy more, visit more often, care less about price, pay more attention to your messaging, and refer friends and family. I bet if you brainstormed ideas that help your company build stronger emotional bonds with your customers in 30 minutes or less, you could come up with a great starter list that you can immediately put into action. Here’s how you can get started.
Every customer has expectations when they interact with brands. To exceed those expectations, the best brands will win their hearts. The best way to do that is to make recommendations and share experiences with your customers. These experiences and insights will show that your business really cares about helping your customers over your bottom line.