The e-commerce industry has been slowly wising up to the importance of one KPI in particular when measuring company success: customer lifetime value (CLV). As the industry moves away from growth through acquisition and toward growth through customer loyalty, understanding CLV and how to use it has become increasingly essential.
We had the chance to sit down with one of our clients, Ricardo Gómez, Global Head of 365 Consumer Marketing at Desigual, during our presentation at eTail Boston. We spoke with them about Desigual’s strategies for improving the customer experience and increasing customer lifetime value. Read on to learn more.
EXPONEA: Hi Ricardo, thanks for sitting down with us. We’ve talked a bit about the retail formula: CAC < CLV (keep your customer acquisition cost below your customer lifetime value).
Which side of the retail formula is Desigual most interested in addressing: lowering customer acquisition cost or increasing customer lifetime value? Why?
RICARDO: For us, increasing CLV is what matters the most. Our CAC is quite low compared to the business our customers bring to the brand. The biggest acquisitions we do are done when our customers buy and we invite them to join our members program. This is why we have to ensure we’re driving traffic to the stores and increasing the CLV of our database.
EXPONEA: And which of the metrics within CLV did you focus on to start?
RICARDO: Client spend, purchase frequency, time since the last purchase and total number of purchases in the last 3 years.
EXPONEA: What have you found to be the most challenging part of increasing your customer’s lifetime value?
RICARDO: Our CLV is very linked to the overall experience we offer and to the quality of the products we sell. Therefore, we largely increase our CLV by making sure there are no pain points, or if there are, that we address them quickly. We also do not send campaigns for products that have had or could have any quality issue.
Omni-channel campaigns are important too; we run several campaigns to move clients who shop offline only to buy online as well. This has a great impact for us.
Finally, we found a correlation between lowered customer value and lower quality purchased products, so we stopped communications around those items, and began to remove the garments we believed to be below our standards.
EXPONEA: What customer retention strategies have worked most effectively for Desigual? Which channels are most engaging for your audience?
RICARDO: The best performing retention strategies for Desigual are our segmented Gift With Purchase campaigns, and gifts to our Diamond clients. We’ve also found success trying to understand the reasons behind a customer’s dissatisfaction, then minimizing the issues. We found a direct correlation between our Net Promoter Score (NPS) and retention success.
The channels that are most engaging are by far email and SMS; our audience isn’t yet mature enough in the social media channels, so we don’t really get relevant performance from those channels.
EXPONEA: What’s the future for Desigual? Where do you see the most room for change and growth? Why?
RICARDO: The future is about better communication; identifying what the right message is for each customer. Using technology like Exponea’s, we can achieve greater relevance and timing, ensuring the retention and engagement of our database.
EXPONEA: What is Desigual’s approach to data? How are you using it to have the best possible outcome?
RICARDO: Data is essential to us; we don’t make decisions without taking the data into account, we use it to complement our strategies in every possible way. Each consumer and each market has its idiosyncrasies. We use data and metrics to decide our next moves.
EXPONEA: What’s the biggest challenge that you face with that data?
RICARDO: Our biggest challenge is to make sure we use data correctly. We are aware that now-a-days, brands are flooded with customer data and they never actually make the most of it. For us, we like to use our data to reduce the total number of emails sent to the customer by instead sending fewer, more relevant emails.
Further Reading: We’ve put together a comprehensive guide on email deliverability to help you get your emails to the inbox.
EXPONEA: Customer loyalty – how big of a role does this play at Desigual?
RICARDO: Customer Loyalty is crucial to us. Having loyal customers ensures that you’ll always have a safe number of orders and a fair number of brand ambassadors out there, who will refer your brand to others, and will frequently buy your products.
We seek feedback from our customers. Loyalty is a two-way street: our customers appreciate that we care what they think, and through this constant feedback we can improve and offer our customers a better product.
EXPONEA: What in your opinion, is the biggest contributor to creating customer loyalty?
RICARDO: Customer experience, solid brand values and exceptional quality in our products. Loyalty comes from understanding your customers, knowing what their “WOW!” moments are and delivering those moments, as well as diminishing any pain points and of course, addressing their needs.
EXPONEA: How does Desigual use their data to influence the customer experience?
RICARDO: Data influences all decisions around the customer experience; creating an overall Test & Learn plan has allowed us to continuously improve our processes and interactions with the consumer.
EXPONEA: Thank you for taking the time, Ricardo.
Exponea is a customer data platform (CDP) with additional tools built-in. Exponea ingests first-party data from all channels and devices and stores it in a central data hub, allowing for precise segmentations and deep analyses of customer data. Execution layers are built on top: predictive analytics, email and SMS campaign delivery, A/B testing, campaign analysis, and more can be handled within the same platform.
To learn more about how Exponea can help your company grow, please schedule a demo with us today.
What Should You Read Next? Author's Hand-Picked Recommendation:
Outsmart the Competition with Data‑Driven Loyalty
Keep your competition's customers with loyalty strategies driven by data.