In marketing we want our visitors to follow the path of least resistance to the end goal of giving us money.
But to add one further we want to do what we can to maximize our average customer value. Not only our 30, 60, 90, 1 year, and lifetime value. We want to maximize initial customer value. Meaning what customers pay on average day 1, the minute they push submit on the order form.
Now there are several ways to do this…
1. Raise your prices
You would be amazed at what a slight bump in the cost of your product/service does to your bottom line. Often times it doesn’t hurt conversion rate too much if at all and more than makes up for it in the average ticket value. Test out various prices that are higher than your current offering. Test BIG swings in prices. Instead of testing $47 vs $57, test $47 vs $97 or even $147. As long as the value far exceeds the price you may be surprised at the results.
2. Offer one click upsells
This is pretty common practice in today’s marketing environment. The concept is simple, offer your visitors MORE stuff as they checkout and go through the buying process. Now we could spend an entire day talking about one click upsells and I will save more of that for additional posts. Amazon, Godaddy, Zappos, and thousands of other top companies offer additional products during checkout. It is a great way to increase your average day one customer value.
3. Give them options
In one particular test we ran for a client we gave the visitors an additional option to buy. Now usually adding steps and areas that force your visitors to make a decision will kill conversion rates. So there is a fine line on how to do this effectively.
This particular client had a couple options on their checkout page to buy.
The first option was a 30 day trial for just a dollar and then they would continue on after the trial at $37 per month. The second option was to skip the trial, pay $27 today and continue on at the $10 savings every month until they cancel.
To help maximize conversions and customer value we wanted to test to see how changing the default selection played a role in the visitors buying decision.
At first the default selection was set as the dollar trial. So what we did was tested a page that defaulted to the “Skip Trial” option.
And the results?
A 36.64% increase in conversion rate. The control converted at just over 3% while the default of “Skip Trial” converted at 4.11%.
Which basically means that not only did the conversion rate increase but the average customer value increased. We knew that those that took the trial, only about 60% of those would become a successful purchase at the end of the trial. Plus those that took the trial were 60% less likely to buy an upsell during the checkout process.
So the $27 customer were more likely to buy more stuff, further increasing the customer value.
Now we aren’t saying that the trial customers were bad customers, thus the reason we kept the option to take the trial on the checkout page.
Overall the numbers just worked out. The increase in conversion and customer value allowed us to spend MORE to acquire a customer, which opened it up to other traffic sources. The increase in conversion rate and increase in customer value helped that tremendously and it all started with the one slight change on the checkout page.
The moral of the story here is to pay attention to your numbers day one, and figure out if giving your prospects an additional option will have a positive impact on your customer value and conversion rate.
Do you know your initial customer value, 30 day, 60 day, 6 month, 1 year, and lifetime?
If not you need to figure out those numbers and work to improve it. Slight changes could mean huge increases to your top line revenue.
If you would like to discuss how we may be able to work together to increase your results, send us a message at firstname.lastname@example.org