Dagne Dover, the direct-to-consumer handbag and accessories manufacturer, believes customer lifetime value is a powerful metric in guiding its strategy in multiple areas.
Vadim Grinberg, Dagne Dover’s VP/Consumer Growth and Insight, discussed this subject at CommerceNext 2019, a retail-focused conference in New York.
And he reported that customer lifetime value (CLV), or the predicted revenue and/or profit yielded by the relationship with an individual shopper over time, is an important indicator for the brand.
“We completely focus all of our efforts on having goals that are measurable, primarily tied back to CLV in some capacity … This is the number that’s company-wide,” Grinberg said. (For more, read WARC’s in-depth report: How analytics and benchmarks shape Dagne Dover’s strategy.)
The brand’s logic here runs as follows: “The ultimate goal is to have a good, happy customer, who then talks about our product to other good, happy potential customers. Everything that we do, we think about through that lens,” said Grinberg.
One example of how customer lifetime value is targeting consumers with similar profiles to its existing client base, as they are more likely to be attracted by the brand’s products and marketing.
“The simplest way we use CLV … is we take lookalikes of those top customers and have that easy-acquisition win,” Grinberg said.
First-time buyers represent another important cohort: “A relatively low-hanging fruit … was that we have first-time buyers who have a very high future CLV,” added Grinberg.
Having secured their initial interest, “what we’re trying to do is … to introduce the next … product that hopefully they’re going to buy,” he added.
Ensuring this audience views the right content at the right time is vital, whether that is “engaging them with past emails they might not have seen” or utilising “past ads [and] past content that worked really well” with similar customers previously.
The emphasis on customer value offers a means to track Dagne Dover’s marketing, too, and thus helps it gain a perspective on performance.
“This isn’t just adspend; this isn’t just affiliate marketing [or] influencer marketing; this is us understanding every campaign, and every decision we make, and knowing how, over time, it cascades in impact,” said Grinberg.
Sourced from WARC