We identified that in order to improve their overall gross margin, we needed to increase their CLV. For their situation, the most effective approach was to optimize Purchase Frequency and to acquire the right customers that would bring more value to the brand in the long term. If we could improve customer loyalty and retention by increasing the number of times their average customer buys from them, we would sequentially improve their CLV.
The first step to achieving this was to perform an RFM analysis and segment their customer base. Our main segments were our highest-value customers, customers who were on the verge of leaving, and customers who used to be valuable but have not purchased in a long time. With these segments in place, we were able to create email flows and email campaigns with a specific strategy tailored to each type of customer.
We also made it a priority to improve the customer experience by optimizing their journey. This involved tracking post-purchase NPS scores, post-delivery scores, and post-support scores. This allowed us to track their experience right after every interaction with their brand to identify opportunities for improvement.
Next, we began working on their acquisition strategy. We were able to create Meta lookalike audiences based customer data within our RFM segments. But first, we took a deep dive into customer research by interviewing their highest valued customers to understand them on a deep level. Using this information, we crafted an ideal customer profile and made note of what key messages would have an impact in acquisition campaigns. This allowed us to target consumers who have similarities with our high CLV customers with messaging that converts much better than typical cold prospecting.
