Insights Subscription Marketing Modeling & Analytics Strategy

The Tricks to Higher Lifetime Value and Lower CPA in 2020

By Mareena Maki on January 16, 2020

Stay up to date

Back to main Blog
Mareena Maki

Senior Manager, Marketing


As a modern marketer, there are more sources than ever for lead acquisition – social media, programmatic, affiliate and influencer marketing being just a few. You may be swimming in new customers from these channels in 2019, but the question remains – will these customers have high lifetime value? As you enter a new year, it is time to assess the value of your newly acquired customers and strategize around how you can attract even more valuable customers in 2020.

Take a Reflective Look at Your Data from 2019

Focus on quality vs. quantity – don’t concentrate on how quickly you gained customers in 2019, but on the quality of those customers. Use metrics like purchases, returns, payments, cancellations, and pauses to establish what lifetime value means to you. Defining the details of a high value customer will help to determine your best customers. A unified view of all your customer data comes in handy for this type of analysis, and so does some additional data. Partner with a 3rd party data provider to enrich and model your recently acquired customers, generating scores and predictions on how they might perform over time. This can help you craft a strategy for optimizing lead sources with communication, product offerings and more in the future.

Once you have established your definition of value and added new insight, you can analyze your new customers by lead acquisition channel; the results may surprise you. Influencer marketing continues to trend as a top channel for acquisition, and it has proven a high value source for some businesses, but not for others. You might find that loyalty doesn’t always transfer– customers may have tried you because of the influencer but failed to purchase again in the future. Or, you might discover that customers who came in through social media advertising with a special introductory discount never purchased again. Look at trends in the data, and if the majority of new customers are attributed to a particular influencer or social media campaign, perhaps that provides insight into how you should manage your lead sources differently in the future.

Optimize For the Channels That Worked – Or Didn’t

Let’s say that social media was one of the channels that brought in customers with the lowest lifetime value – now is your opportunity for improvement. Team Alliant always recommends an audience-first strategy, and social is no exception. Take the time to hone an audience that is targeted and modeled to provide the best results.

One example of how you might use predictive modeling to plan your 2020 audience strategy is with look-alike modeling. This type of model takes a group of your “best customers,” extracts the qualities that make them great, and uses those to develop predictive variables that when applied in the model to a new audience identify “look-alikes.” This increases your likelihood of success because you’ll be targeting prospects who are very similar to your highest-value customers. Look-alike audiences also can work in a variety of channels, from social, to direct mail, email or addressable TV. You won’t waste your ad spend on targeting potentially low value customers, but instead will target customers who have a propensity for your product/service and positive purchase behaviors – all indicating a bright outlook for lifetime value. 

Once you have your audience in place, you can consider some other ways to engage your social following and increase lifetime value. Social Media Explorer recommends incorporating social media into loyalty programs by rewarding customers who engage with your company through social media channels. Customers can earn points by sharing, “liking” or commenting on your content, and they can then redeem these points for rewards.

For success in programmatic and paid media, retargeting is key – make sure to turn first-time customers into repeat customers with retargeted ads that keep your company top-of-mind. Consider adding a discount code to the retargeted ads that rewards current customers and keeps them interested in the idea of purchasing again.

Affiliate marketing is a third channel you may be using, and it can be a tricky one. Affiliate sources are typically incentivized solely by purchase, not necessarily by the quality of the customers they bring in. One solution is to analyze the lifetime value of customers brought in by each publisher and focus your efforts more on the publishers that do bring in customers with high lifetime value. Consider structuring commissions based on LTV – Custora recommends offering different commission rates for new versus existing customers, with the incentive being placed on publishers for existing customers to return.

Another channel marketers want to succeed at in 2020 is influencer marketing. According to The Wall Street Journal, “Many marketers are signing influencers to longer-term contracts,” which may be the key to higher lifetime value among customers acquired through this channel. When a company works with an influencer for only a short amount of time, the interest of potential customers piques and then drops. When a company signs on an influencer for a longer term, however, prospects and customers begin to develop a lasting positive association between that influencer and that brand. Incentivizing influencers to qualify or produce higher quality leads is another idea for acquiring customers that will ultimately have high lifetime value.

Make the Most of Data Intelligence

No matter what acquisition channels you used in 2019, you should also be using data intelligence. Analyzing data as you progress and altering your strategy accordingly is far preferable to waiting until Q4 to find out your strategy did not have the ROI you were hoping for. It’s important to find creative new ways to acquire new customers with higher lifetime value, but at the end of the day, data is king. Utilize data from the past year to create the right audiences, enrich your CRM with additional data, take advantage of predictive modeling – and make sure your acquisition and retention strategy is supported by a solid data strategy for 2020.

With data intelligence, marketers can gain higher quality leads at a lower cost and reduce churn. Want to learn more? Contact the marketing experts at Alliant!

Submit a Comment

Stay up to date