Customer Lifetime Value Optimization

Customer Lifetime Value Optimization
The Faces of Business

Customer Lifetime Value Optimization

Working on customer lifetime value optimization is considered essential in ecommerce as well as other businesses.

In this week’s The Faces of Business Episode, our guest speaker was Valentin Radu. Valentin is the founder and CEO of Omniconvert. Valentine learned from his experience operating his ecommerce business the importance of customer lifetime value optimization as part of the overall long term business strategy.  He now helpes client do this with his business and online training.

The conversation of the episode started with Valentin introducing himself to the show. Valentin said that at first, he started working back in 2001. After this, in 2006, he started his own ecommerce company and worked with a European company.

Moving on, Valentin talked about customer lifetime value optimization. He said that this is concept people talk about a lot but don’t practice it. Valentin also explained his other business line where he has 25 employees.

This business, according to Valentin is their own consultant arm where they provide services of customer value optimization and conversion rate optimization as well. After this, Damon asked Valentin about the typical size of customers they need for business.

To this, Valentin said that they generally have customers that are around $5 million in annual turnover. He also said that we choose this number because at this position a company is at a plateau, and they have potential.

After this, Valentin also shared the number of customers you need to have to successfully apply for this work as well. Moreover, he elaborated some more on customer acquisition costs and the entire process of it.

Valentin also shared a few examples of all these things and their cost-effectiveness of it. He shared a few stories of his own customers. Moving on, Valentin said that the famous example is true that if you want to get out of a hole stop digging.

All you have to do is take a few steps back and do the math of where your business stands and where it needs to be. Valentin also said that in today’s world the cost of money is a lot different from what it used to be.

Therefore, you have to understand that fact as well. By the end of the conversation, Valentin shared more about customer lifetime value optimization and how it works. According to him, this is a very essential concept, and everyone has to work on it accordingly.

The conversation ended with Damon thanking Valentin for his presence on the show.

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43:40

SUMMARY KEYWORDS

customer, business, customer lifetime value, people, e commerce, acquire, companies, products, ecommerce, acquisition, talking, valentin, agencies, entrepreneur, buying, optimization, selling, academy, money, lifetime value

SPEAKERS

Damon Pistulka, Valentin Radu

 

Damon Pistulka  00:05

All right, everyone, welcome once again to the faces of business. I’m your host, Damon Pistulka. And with me today, I’ve got Valentina redu from Omni convert, I am so happy to have you here, Valentin. We’re going to be talking about customer lifetime value optimization. And those of you listening, if you’re an E commerce and don’t know what we’re talking about, you need to listen in. So Valentin, glad to have you today.

 

Valentin Radu  00:35

Hey, Damon, and hello, everyone. I’m really happy to be here as well. And yeah, let’s get this going.

 

Damon Pistulka  00:41

Yeah, let’s do it. So now, you’ve been an E commerce and marketing for a while now, kind of explain your, your background and how you started to realize about customer value optimization and lifetime value and how it really started to click with you what, what caused that I get stuck about your background first, but then we’ll give you a

 

Valentin Radu  01:04

Sure. So I’ve been starting my entrepreneurial journey back in 2001. In 2006, I’ve co founded an E commerce, e commerce company, we were selling online car insurance here in Europe, in Romania. And we realized that we’re paying a lot of money on Google AdWords. At some point, we we needed to do something so because we were always breaking even, we were making so much money. Our friends were laughing at us, because they were having all these paid jobs, and they were mocking our entrepreneurial thing. And we needed to do something.

So it started out of, let’s say, meat, you know, we were struggling to, to become profitable. So we’ve started to analyze the revenue from from various types of customers. And we realized, there are some customers which are better than others. And we started to segment them. After that, we started to see that customers are coming back over and over again, the business was already three years old when we started to piece things together.

And we’ve realized that we the customer retention plus the annual contract value for each of the customers, we’re making this Pareto work work for us right at Yeah. So we realized that the people, we had the truck drivers, we had the luxury car owners, these were having a fantastic customer lifetime value. So with that being said, we we started to change our acquisition strategy, according to this new reality. And that paid off significantly, because if you were a truck driver, your customer lifetime value would be nine times higher than the average customer.

Yeah, yeah. And after that, we started to make our business work, we got to a point where we got to 14 million in turnover, I made the exit from that company. And I’ve started to apply this these principles. In the new company that I’ve, I’ve co founded. So after, after that, it was clear that a lot of ecommerce companies are missing out on this opportunity to become customer centric, and to understand, hey, who am I selling these products to, which are my best customers what they are buying,

when they are buying, why they are buying, because if you know those three different things, then your strategy to acquire and retain customers we can change significantly and you can leverage your efforts because in any commerce as in other business models, as well is about becoming being relevant and being profitable leveraging your own time, because as we can see here, nobody’s going to give us back our gray hair. So yeah, he’s nice. Why can’t we make it profitable? Why don’t we leverage our our time and efforts by acquiring the right customers?

 

Damon Pistulka  04:06

Yeah, yeah. Well, and it’s great how you said how it came out of out of the fact that you needed it was out of need, right? You had you had no choice that you needed to make make more money or get more profits on what you did and you found the way to do that by retaining those customers for longer and that and that business, and then you roll that the money into Ford and invested in Omniconvert. So in Omniconvert, now what are what are you doing specifically in helping customers?

 

Valentin Radu  04:40

Yeah, we have we have free free free business lines. Let’s say the first one is education. We were educate people towards customer value optimization. This is a rather new discipline even though that customer lifetime value as a concept is all in retail and in other business models. It’s something they used to say that that anecdote about. customer lifetime value is like sex in high school, everyone talks about it, but now nobody does it.

So yeah, basically, we try to teach people around how to measure correctly, how to improve it correctly. And that’s a business line, we were having our own CVO Academy, right teaching. And we also train agencies and companies around how to improve customer lifetime value. Another business line is our own consulting arm, we have around 25 people, which are providing services of customer value optimization and conversion rate optimization as well.

So we have a data driven tree team, which is working with midsize and large companies from various verticals, because we need to learn about what we need to do. And this knowledge to our network of of agencies that we are training towards improving customer lifetime value. And the fourth business line is that we have technologies, right we have a ecommerce growth suite, which is built around customer value optimization, we have an A B testing tool, a survey tool, a segmentation tool, a customer data platform as well, that it’s empowering ecommerce companies and agencies to improve CLV for for E commerce companies.

 

Damon Pistulka  06:34

Wow, that’s cool. That’s cool. So what is what is one of your just a typical customer is that is the size in turnover in you know, what’s the kind of thing that they’re doing?

 

Valentin Radu  06:49

The the best fit customers for us are the ones which are north of four, 5 million in turnover in annual turnover. Because they they started they reached a plateau. And they are let’s say they have a solid enough business so that they can think strategically about their business. So they are not struggling to survive, and they have the patience to to get results because CVO it’s a long term, it’s the long term, right?

The long term game is not the short term game in the short term game, we are only about acquisition and getting your box out of your ad investment. Yeah. So there are companies which are having enough customers, right, so you need in order to segment and in order to look at the patterns to analyze the clusters of companies, you need to have around the at least 20 40,000 customers in your database. So the this is the sweet spot of companies that are are already there. That’s the minimum. Yeah. Let’s say dimension that they should be having. leverage this type of initiative.

 

Damon Pistulka  08:00

Yeah. So this is this is really interesting, because I think there’s a there’s a lot of companies that fit this, no doubt. So a lot of companies as you said, We’re want to push pay per click and customer acquisition. And you talk more about lifetime value optimization or customer value optimization. Why do you think that it’s it? Is it more important? Is it? Is it 8020? When you look at the overall what do you think really is the best mix of these.

 

Valentin Radu  08:40

So Damon were coming after decades of acquisition marketing, where a lot of Meet the media, the media giants have tricked all the market around acquisition, because that was their customer value optimization met. Yeah, yeah. Their customers buying more and more acquisition services and ways to grow their business.

Yeah. And there’s another phenomena happening. We have a lot of marketers right now being trained by those media agencies. We don’t have the formal education around these these things. Because the academic environment is not keeping up the pace to well, we we’ve what’s happening in the market. Therefore, the marketers are being trained by the companies which have their vested interest.

And that’s why we haven’t been, let’s say aware about the lifecycle marketing. So it’s not acquisition or customer retention or conversion. It’s about the whole lifecycle from the very beginning. We have acquisition, we have conversion, and then we have customer retention, and all of those three components. If there are orchestrated correctly, you have customer value optimization. These are the three pillars of customer value optimization when you acquired the right customer convert the traffic with the right product. And then it’s way more easy to, to, to retain customers. Once you you you do this?

 

Damon Pistulka  10:10

Yeah. Oh, well said. I mean, you there was so much in there, I just want to unpack a little bit of that, because you’re absolutely right when you look at, and I hadn’t thought about like this before, but the all the people they get trained on marketing. Now. I mean, most of them have been trained something around Google. Yeah, and Google makes money only if you’re trying to acquire new customers for the most part.

And you’re right with customer, lifetime value optimization, it’s really about retaining that customer keeping them around longer more products. And and just because it is they already know your products, they know what you you have a good product quality, you have different products they can use and just continue to help them solve their problems or get the products that they want from you. Exactly. Way better, way better. And I never thought about it for this that because there is a vested interest in them to just talk about acquisition.

 

Valentin Radu  11:13

And then that’s what they sell. It is not a bad thing. I mean, no, mainly does their business and that’s why they train people they have they have this interest on heavy on teaching people how to acquire customers. So it’s not like it’s just that we are biased. And there are few companies which are learning on their own, having getting a few steps back and realizing hey, what’s important for me, because I’ve been an entrepreneur there. And I’ve been trapped into this thinking of shiny new toy, right, looking at new tic tock ads, whatever.

br compaines, there are a lot of things that you think you are missing out as an entrepreneur and all the entrepreneurs are, let’s say future oriented, and they are open to innovate and to adapt new things, because otherwise they would be staying into an existing system, they wouldn’t be creating their own system. And the idea is that if you don’t look at the Business Essentials, and if you don’t nail the fundamentals, let’s say what am I doing as an E commerce I’m, I’m getting products to customers. And I need to check if those customers are happy. If they are willing to return, I need to close the gap, right, I need to I need to close the loop.

Otherwise, if I’m focused only on the first part, I need to send products to people, then I if I don’t have this customer feedback, if I are not improving based on customer feedback, if I’m not having more and more customers, I’m not activating the second, the second ecommerce growth flywheel and I think that our growth to growth flywheel is the first one is the company acquires customer invest money and acquire new customer, then those we’ve got, there was money, they invest more.

So they ship products, and all they do it’s activating the first e commerce growth flywheel. The second one is when you acquire customers, and then you get feedback, you improve your services and there are two things that are happening. Those customers are come coming back. And also those customers are activating the word of mouth because they are so happy about it. And that’s as always seen since the trade is right. Under promise, over deliver if I’m doing the right job, you’re gonna really recommend me to your to your peers, to your to your friends, if I’m not doing the right job, you’re gonna go out there and and pay for more customers than ever come back.

 

Damon Pistulka  13:43

Yeah, well, that’s that’s a great point and I like how you broken it down into the two different flywheels because there are a lot of companies that live like you said with the first flywheel where it’s getting new customers selling a product getting new customers selling a product. And then you look at others that do they acquire customers, but then they Romain over there someone I know Don Williams talks about Romancing the customer and making them feel really good about their their experience with you. And you think of some brands you know some of these global brands in the US a lot of the outdoor brands are very good at that about creating.

You know why why do I want to spend hundreds of dollars on a special coat for I’m a climber and I want to climb mountains you know, and and then they not only do they have a coat but they have the right pants they have the right boots they have the right socks they have the right and and they keep developing these products and making them very well and the experience for the buyer if they don’t fit right send them back whatever the things that their customers really want them to do.

They continue to do that and that leads into the second fly while you’re saying where you you get over the I’ve sold the customer the first time but now my customer the customer is saying hey you got to buy this jacket. I I love it so much.

They were so nice to me, they created an experience that that I just loved. And I’ve got all these other products from them too. And I don’t really need to go a lot of other places. And I keep as the the person’s buying it, it’s a good experience. And as the seller of those products, my lifetime value just keeps inching up. As as they continue to do that. And like you said, they’re word of mouth to all their friends, in their climbing groups that they’re talking about will try their products as well.

That’s, that’s really good. That’s really I liked the way you said that. I like the way you said that. So now one of the things that I was thinking about it as, as we were getting, talking before, and getting ready for this is, do you see that? Ecommerce is finding some maturing of the overall industry, and it’s just as costing more to acquire customers because they bought what they needed to buy. And me trying to sell that same climber another jacket, there’s already two other people that they’ve talked seeing that do that. And it’s just getting more and more expensive to acquire customers overall.

 

Valentin Radu  16:14

Yeah, yeah. So the customer acquisition costs were doubling since last year, according to statistics, it’s now 9%, more expensive on Facebook ads, and 108% on Google ads, and YouTube ads as well. So mainly, it’s twice as expensive to acquire cast customers at this moment. And what happens, and that happened mainly for, for two main reasons, a lot of retailers have flooded the internet, we’ve migrated to the digital channels, and they have their own digital sales channels. And the second reason was this fight of the Internet giants with the iOS 15. Cookie. Now we’ve seen that Android is shutting down their their cookies as well.

So many that made the customer acquisition less effective as as it used to be, because now, you you the algorithms are not working. Yeah, like they used to anymore. So that’s why the that’s forcing companies to get creative on that. And there are there are some steps here. And I’ve seen this pattern over and over again. The business owners and the E commerce managers realize, hey, we have a problem with the acquisition. And it’s that thing from Einstein, right? You can’t solve the problem at the same level of thinking, Where where you weren’t when that problem was created.

So you need to level up to elevate your thinking. And because if you ever acquisition problem, you don’t have an acquisition problem, you have a business model problem. So maybe if it’s twice more expensive to acquire a customer, and if you’re not calculating if you’re not data driven enough to understand how much money can I get from a single customer throughout the entire lifespan, if you don’t make this calculation, you’re trapped into a financial perspective where your p&l is not going to show you the your cohorts and your customer retention is not going to show you the future because they’re there the assumptions are, are just based on some past data. Right?

Yeah, you can look at we let me let me give you an example. Back in 2015, we were working with a company selling fashion, clothes, apparel, and so on. So they made something like $11 million. And then 95% year over year growth rate in terms of the revenue so that those were that was the tip of the iceberg. They raised a lot of money. And they’ve started to acquire more and more customers, they were very acquisition focused, weren’t even monitoring customer retention.

Oh, wow. When I got there, I started to build a model called the RFM model, recency, frequency and monetary value to segment their customers. And I got to the to the two, there were two founders, I talked to them. And I’ve said that your business is not healthy at all. So you need to you need to do something about the customer retention. Otherwise, look at these cohorts, the business is not going to be sustainable in a few months from now. And they they they kind of believed it, but they weren’t. They haven’t changed dramatically the things four years after that business was gone because of customer retention.

So you need to look at which are the generating factors right because you go to another planet to acquire customers right? You need to if your business model is around fashion, you’re selling clothes to Ladies, do you need a big share of wallet from from those ladies and you need them to show off with the things that they are buying today. Friends so that you can have more, more of their friends coming. Yeah. Yeah. If you don’t do that, then you you could be out of business like like those. Those folks unfortunately, were?

 

Damon Pistulka  20:13

Well, I that’s a great example. Because I think you because two things I see this in business too, when when someone has success, and the success wanes, it plateaus or whatever. Yeah, they often think that they should double down rather than change strategy. And they will follow that off the cliff.

Yeah, won’t make that change. And that’s a great example of it because it can insignificant businesses in E commerce, this happens to it’s not just the startups, it’s not just the one person, you know, reseller or something like that. It’s significant businesses go out of business, because they don’t change, as you said, because they’ve got a business model problem. And doing more of what they got them there is not going to get them out of that problem.

 

Valentin Radu  21:05

Yeah, we, there’s a, there’s a beautiful thing about here, if you if you want to get out of a hole, stop digging, right. So you need to become aware about what’s going on. Take us a few steps back and look at the math behind your own business and fewer the unfortunately, does not this is not such a sexy this discipline, right to do cost much to do to nail now down the map to look at if I’m investing $40 to acquire a customer in everage. So that’s the customer acquisition cost. And I used to have $20, one year ago, yeah, what how much do I get from a customer? And how much have I got one year before?

Because if you are making $49, and you’re paying $40? That means for every customer, every new customer inquiry, you’re losing $1. So you need to do you need to fix that first because acquiring more customers is not going to solve your profitability does the unit economics customer lifetime value? Versus customer acquisition cost? And also, customer acquisition costs? Payback? You are getting $100 and you’re paying $40? But if that $100 You’re getting them in one or two years from now, maybe you will not be around? Yeah. to monetize, right? Yeah. Your investment back? Yeah.

 

Damon Pistulka  22:33

Because if it takes them to, like you said, if it takes them two years, for you to make $100 from each customer, you may be gone. And before you even hit the second year, your acquisition costs are ahead of it. And it is it this is really a fascinating point. Because there’s a lot of people that wonder why some of the AC some of these ecommerce brands, raise a lot of capital and then go out of business?

Because I think it’s I think my own opinion is that you take three years, five years ago, when your customer acquisition costs were much less you going back even further, they’re even less. Yeah, you could do that you could raise capital, and you could, you could get a business to grow pretty aggressively by acquiring customers.

But I think as you as you mentioned, the customer acquisition costs, especially on you know, goods that aren’t expensive, I don’t know of the right amount, you know, but but like you said, if you’re if you’re going to make $100 off your average customer, and now my my cost to get that customer went from 20 to $40. i And that $100 To make that $100 takes me two years, my money that I raised from my VC or whatever to get me launched now only gets me to the point that I’m going out of business because I’m not getting that $100 that I need to from

 

Valentin Radu  23:56

and it’s also the inflation game here because the cost of money is different than it used to be. Basically, it’s it’s a numbers game and I think we need to wake up to these new new realities more competitive and when he’s more competitive, we need to, to nail down the math because it’s not as it used to be 123 years ago. Yeah, there are costs are going up there are more competitors in the in the space and the planet has not grew. I don’t only do three times. Yeah,

 

Damon Pistulka  24:31

there’s not that many more people to buy from you. Yeah, I mean, we’ve got some markets have opened up some but not enough to make a tremendous difference in in the overall amount of people buying with E commerce. But the the Yeah, the interesting I just I just really find it interesting that that you that example you have of the of the clothing company, the fashion company that grew so fast grew 100% one year and then went out business because that because it is in the numbers it is in just understanding how quickly am I going to make money from each individual customers?

And like you’re talking about with your, the RFM model, the recency, frequency and monetization is, you know, how often do they come back, because that will tell me how quickly I’m going to make that money. And then frequency, can I get them to come back every week, every month, every you know, six months year that also helps you in that. And then what that looks like what their typical bias the first time compared to the second time compared to third time, because if you’re selling, I had a client when they sold security gates. So a security gate is, you know, security gate can be anywhere from 700 us to 2500 $4,000, right.

So you buy the security gate, and then I have, I might have a gate opener, I might have some remote controls, I might have other stuff that I buy over time solar panels to run them whatever it is, but it never really eclipses, that initial investment that was yeah, the the money in there. So you really look at that long term monetization of that product, and understand how that’s gonna go. Whereas you could go into an apparel brand. And if I had, okay, they bought shoes from me, but I also have, like, we talked about the climber, I could get a whole bunch of other things. There could be higher, higher revenue items as it goes, the time goes on. Yeah. Super interesting.

 

Valentin Radu  26:31

Yeah. And also, I think it’s, it’s important to touch a subject here for for, for the audience today, Damon is that, as an E commerce entrepreneur, I’ve been a former ecommerce entrepreneur and I know I’m having this, this company with multiple business lines that are sustaining each other. But as an E commerce entrepreneur, you need to come to terms with yourself, why are you doing this business?

Are you doing this on the long run so that you can pass it to your nephews, because if that’s the key case, you need to make it sustainable, highly sustainable, if you are making it, to sell it at some point, or to do IP or wherever you want to do it. Yeah, you also need to take into account the fact that now we have this customer value based valuations were people where the investors are looking at the health of any business, they are looking at the future, because that’s why they invest in a company to have leverage on their on each of their dollars, they are looking for multiples from three to wherever 20.

So you need to also understand that this mathematical model is, is helping you so that you can forecast properly. Because the CFOs there are many accountants, there are many people which know the numbers game, but they don’t know the customer centric game. So you need to have both both of those perspective, you need the finance perspective, where you look at your p&l, you look at, look, if you’re breaking even you look at the cogs and whatever.

But you can you should also be looking at this perspective in terms of the cohorts of customers, which are coming, because we we have seen this on my own entrepreneurial skin, let’s say yeah, yes, in how hard it is to do to fix a business once is starting to drift away. Because it’s if you have a healthy business model, then as an entrepreneur, you’re just fine tuning things, you know, you just optimize things. But if you’re you’re not having a sustainable business down the line, you you will be struggling and the best thing to do.

I think it’s to get a system, which is working on autopilot to generate profit for you, as an entrepreneur, you need to work like a movie director, you need to have all the components over there and then let the actors do the game. But these are the customers which if they have the fuel called the right customers with the right products, and they have the buying habits from you. You have your share of wallet, let’s say if you’re selling a sports apparel, your share of wallet is pretty significant in their in what they are buying from your particular niche, then you’re there. Yeah,

 

Damon Pistulka  29:27

yeah. That’s a great point. And yeah, and it is like you said, you have to have something that is a more repeatable system systematic approach, because just going out and going, Okay, we’re gonna we’re going to turn up our Google ads or we’re going to adjust our Google Ads strategy to get more customers is not viable long term.

You know, it’s absolutely the mixed approach as you’re talking about with you’re looking at the RFM and that, I really like what you’re talking about the customer centric numbers around value per customer and how ecommerce company buyers are getting smarter. Looking at that, in their quality of earnings and their analysis of the companies, they’re valuing buying.

And I think it’s something that is very relevant for the the current owners to understand to because they may have a company that looks pretty good on the outside, but if their customer value is waning and going down, there’s problems there that they don’t even realize. Yeah, they don’t even realize they’re happening. That’s a great point. The Oh, man, lots of good stuff running through my head now. So let’s, let’s talk a little bit about your online academy. So you started an online academy to help with customer value optimization. And you started with eight other ecommerce professionals or entrepreneurs as well. So

 

Valentin Radu  30:53

yeah, so there are practitioners, boycotters experts in customer experience in email marketing. In Facebook ads, we have Danny seal, which is a master of of Facebook ads, we have Chase demand. In the email marketing, we have Bob master, which is a Harvard Business School professor Anna bukata, on the jobs to be done methodology, okay.

And we also have, so we have a lot of cool people, which are experts on a particular phase of the CVO methodology, on the customer, customer experience, and so on. So we teamed up, we have people from different countries, we never met all of our online, LinkedIn and on via via chat, we had this online webinars, and we produced around 20 hours of really valuable content for any commerce entrepreneur, any ecommerce manager or expert. And we mainly realized how important was for them. So at this moment, we have around 500 students, which gave us some fabulous reviews.

And we decided that this is a business on its own, you know, this education component is now a business line for our company. And we are helping a lot of people not only, let’s say Continue the same local maximum optimizations, but to level up their their understanding towards doors business, and now we are training based on the CVO Academy, we have a lot of agencies coming because they there is a bloodbath from the agency arena. So yeah, we have, we have this problem in the E commerce market, there are a lot of agencies, which don’t know what they’re doing. And they now they all they are doing is that they are, let’s say, budget managers, right.

So they Yeah, you give them around 10 20k per for to acquire customers, and all they do is tweaking up some bids, bids on Google as well. I mean, what, why? Why should you pay them. So now they also wake up to this reality because as the customer acquisition costs were going up, they realized, the founders realized that I need to do something about it. And that something was to change the agency because they are, they are responsible for that and they go to the next agency, and they are doing the same because you you have to fix the whole business model. And that’s not the job of the agency.

However, if you’re a data driven agency, and if you know what’s your customer in meeting, you know, what was the need of your customer, you can differentiate dramatically to to them and you you can actually help that customer because maybe acquiring one more customer with the CAC which is not justifying the CLV is not the way the way to go so basically I foresee a future where agencies are becoming literate in what an E commerce actually means and how an E commerce grows and then the conversation is not going to be more about traffic and clicks and Ross which is a stupid metric from my perspective with this Yeah,

lack of tracking a lack of understanding about the real cost because you when you see it when you see Ross you don’t take into account your overhead your wages of your people, you don’t take those into account and you think that you’re making money but maybe you’re not. So basically I foresee a future where people are becoming literate in customer value optimization make basically that’s why we have built it.

 

Damon Pistulka  34:46

Yeah, yeah. That’s something you had a lot in there. You had a lot in there because it it is it’s not just about acquiring customers and and you are right it a lot of markets. Getting agencies are really running into the problem that our better pay per click kind of agencies to our customer acquisitions, it’s adjusting their programs to try to get more clicks or, or but they’re really may not be getting that, that return on their ad spend. And then that really doesn’t mean anything the return on adspend. Because if you’re not making money at the end of the day, on the adspend, after you sell the products, it really doesn’t matter. Because that, you know, so if my, so let’s just look at this.

So if your ad spend went up double, and you got good return on your ad spend, you still might be losing money, because your cost may have gone up on the other side, two of your products and, and like in the US, oh my goodness, our shipping has gone up. Crew mundesley Yes, like, yeah, it’s like, it’s, it’s crazy. It’s like it seems to cost you like $4 to ship something and now it’s $10 to ship something and add mass and mass I mean, a lot and and and then when you even when these ecommerce in the US when we’re importing product from, say, China or something like that, our container costs they went from, you know, three years ago, they were like 3000, maybe $4,000.

Now it’s 20, some $1,000. It’s like, when you figure in you just figure the cost of that per item you have in that container. That’s a lot of money. Even if you had 10,000 items in that container, it’s still because that item is not that expensive. It’s crazy what these things all together. Like you said, your your your Ross is just it’s a number, but it doesn’t tell you anything. Really. It tells you one side or one part. It’s all

 

Valentin Radu  36:47

Yeah. And we’ve we’ve the tracking problem with the cookies as well. It’s also more biased because you couldn’t rely on Facebook as to do the proper reporting. But now Yeah, worse than it used to be.

 

Damon Pistulka  37:01

Wow. Yeah. So I’ve known some people and this was two years ago, I interviewed Kevin Williams, it’s a guy we’ve known for a lot of years that he started talking about this before the iOS came out and stuff and talking about the first part first party customer data and really understanding that we’re going I see several companies now that are many companies now probably not only me, I only say a few but that I would think is a is a hot topic as well as really having your own data about your customers as much as you can to really understand them and their buying habits and what what they really are looking for is getting more and more important as well.

 

Valentin Radu  37:41

Yeah, it’s it’s a new game. And I think the the fundamentals should be should be more important, right? I mean, you we should prioritize what what really matters. And if we, if we don’t measure what matters, then we can’t improve what matters because that bright you can’t lose weight if you don’t weigh yourself.

 

Damon Pistulka  38:06

Yeah, yeah, that’s a great that’s a great point there and the stuff that I use myself so the so if people are interested in your academy I’m going to put the link to the academy in this too because I think it’s it’s really a man your holistic approach to this I really when we first talk we first were going over this I was so impressed by it because it’s not just turn up the ads and get more you know, like you said a lot of people have told that’s I’ve been told the way to do it.

And this balance plan of really making sure that you’re you’re generating lifetime value you’re spending yes, you’re acquiring customers, but you’re retaining them and the word of mouth by doing the right the doing good service good products and making sure your customers are happy. I think this is the long term solution for DTC business businesses to be successful for many decades, no matter what happens. So well, Valentin, this has been really so interesting and just awesome to be able to talk to you and if if I didn’t say it enough, this is Valentin Radu from Omniconvert. He has been talking today about customer lifetime value optimization, customer value optimization.

He’s been talking about a CVO Academy, where they train people to really understand customer value optimization and teach some of the tools around that. And that’s what started with with eight eight ecommerce professionals in different areas from around the globe to really pull the best of the best together into that Academy. And I will have the link to that in the in the comments as well. Any parting thoughts here Valentin for someone who’s sitting here going Man, this is this is a lot, where do they go next have to find a bit more about this.

 

Valentin Radu  40:07

We have free courses on the CVO Academy, I strongly recommend to start with those those courses we have one in, it’s a mini course. And it’s also a course on the customer behavior. It’s pretty easy, straightforward. They can learn more about it. And I think the best investment that you could do over there in your life is to become smarter is to learn more about what you’ve decided to do in your life. And my, my, my last, the last thing that I want to share with you is that I’ve been on I am an export kid from Bucharest, Romania, I, the only thing that I that I got was to leverage my own brain. But if if you’re not putting the right content in your brain is not like you’re not feeding your machine.

So I, I’ve changed my life over and over and over again, based on the things that I’ve learned. And then I’ve experimented that I I’ve applied. So if you’re an entrepreneur, if you’re a business professional, see how you can level up your game, because that kind of investment has a lot of multiples, it’s you you will leverage your own life. And although the life that you you dream about does nothing compared to the life that you can get, if you improve the way you think that’s something that I think we should be all taking into account.

 

Damon Pistulka  41:32

That was incredible, man, I really that is so true. I mean, you got to level up your your thinking and the way you look at the world if you want to really drive yourself and your business success. And one of the things I did I did want to Yeah, yeah, that that’s just, that’s great. And I think that if, if people want to reach out look at like I said, the CBO Academy Omniconvert will have the links in there, that was so great. That was such awesome at the end there.

It is what you feed your mind it is going through and learning this. And I think even things now one of the things that I that I will say about places like the CBO Academy, as an executive in a business, one of the biggest questions that executives, I think, as I was running businesses prior and ecommerce businesses is that, am I doing the right thing?

Am I making the right decision, because we spend a lot of money as executives and understanding the fundamentals that you’re teaching in something like the CBO Academy, or even maybe they can get it from the free courses, they should try that. And it is so important as an executive in an E commerce company or any company really to get smart enough in what you’re thinking about to make wise spending decisions and invest in Ronnie properly.

And that’s why I really think it’s so cool that you’ve done this and put together the CBO Academy and your free resources to help people so just encourage entrepreneurs out there if you’re looking for a way to really consider customer value, or customer lifetime value optimization. Go ahead and give the CBO Academy a try and see what they’ve got going on. But Valentin, thanks so much, Valentina. I do Omniconvert CBO Academy, great for having you today. Here today. I’m going to shut down our LinkedIn live. Just hang out for a minute. We’ll talk when we’re done. Thanks, everyone for being here. We’ll be back again.

 

Valentin Radu  43:38

Thanks Damon.

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Cultural Habits that Build Trust

In this, The Faces of Business episode, David Mead, Founder, David Mead, talks about Cultural Habits that Build Trust and allow business leaders to foster a good culture in the teams and businesses they lead. As a culturalist, David brings a relatable, human approach to leadership and simple, practical tools that leaders and their teams can use daily to build trust and human connection. It allows teams to achieve higher performance, innovation, collaboration, retention, and well-being. David has spent over a decade working with and learning from leaders worldwide. He helps leaders implement good cultural habits, sharing a simple framework for leading and influencing others with humanity, regardless of role or title. David also co-authored the phenomenally successful book "Find Your Why" with Peter Docker and Simon Sinek in 2017. That has been translated into 25 languages and sold 400,000 copies. Damon's fondness for culture is no secret. He is pleased to welcome David on his Livestream. Damon asks David to share how he became a culturalist. David bifurcates his answer into two parts. The unconscious mind and conscious decision. He starts with the conscious part first. After graduating in five different majors, from architecture to forestry, he could not figure out what he would become. After college, he "bounced around between different sales jobs." David got interested in corporate training gigs and soon landed a job as a corporate trainer for a Yellow Pages company. He liked to share and incorporate new information. The progression from sales-centric sales training to training door-to-door campaigners showed David a path down to culturalism. In March 2009, during training, he met a guest speaker named Simon Sinek, who would become David's long-term business partner, co-author, and confidante. Simon shared this idea about the Golden Circle and Purpose. He explained this theory so well that it was easy to grasp. When David listened to the speaker carefully, he could figure out "why I've done really well in certain jobs. And I've done really poorly in others." He would write it down in the training material. When Simon returned to visit them, David handed him a copy of the training manual. Simon was surprised at how I translated his speech into the written manuscript. He offered David a partnership right away. Simon's first book and TED Talk came out in late 2009. That was the first time David knew about culture. Similarly, David is pleased to present his ideas and experience in a book form. From David, Damon learns that many companies hardly adhere to what they superficially say. Moreover, in training sessions and leadership summits, David says he could relate to and internalize whatever the speaker said. He believes Simon influenced him positively and shaped his career. David points out that people's flawless professional façade masks their unwillingness to change. He categorizes these types of individuals into categories. The guest points out impostor syndrome if a person in a leadership position tries "to keep that façade up." Disproportionate sense of education, experience, promotion, and achievement keeps "that humanity from coming out is so often in a leadership position." Damon reflects that one's confession of one's mistakes and weaknesses doesn't make one lesser a being. Besides, "it's easier for leaders to understand and embrace a different way of leading that builds that culture of trust." David elaborates on diverging perspectives on whether or not leaders should share their emotions and admit fallibility. Some leaders are comfortable with that, while others conceal their feelings and human side. To David, it is entirely an individual's choice. Damon invites David's comments on the concept of leadership in today's business. The guest, through analogies, shortlists some leadership traits: They care about their team. They teach their juniors productively. They help the team connect with the business's vision, mission, and goal. "All these human characteristics that make these leaders magnetic," David believes. David shares his observation regarding the change in the work environment in recent years. He bifurcates these changes into eras: the pre- and post-COVID-19 Pandemic. Before the Shutdown, we got along with our jobs and enjoyed them to a certain extent. The practice of coming to the office, mingling with people having the banter, and the like made our lives livable. On the other hand, as soon as we went remote, "we were sitting by ourselves in front of our computers." We lost the human connection, and culture was ignored all of a sudden. The guest further elaborates on the idea, saying "leaders were not prepared" for hybrid working conditions. They could not distinguish their professional lives from their private lives. David opines that besides our person and mind, we need to show up with our heart if we genuinely care about our human experience. When a coach gets tough on us, they believe we have more inside us than we think. "It's not about being nice." With a pleasant working environment, as David declares, he is not "a hippie fest where we all hug and sing Kumbaya." Rather, he refers to an organization that cares about performance, innovation, transparent communication, retention, and the well-being of its staff. Undue job stress causes "innovation to go out the window." Moreover, it leaves one more anxious and depressed. Under these circumstances, a business can barely sustain, let alone grow! Damon seeks David's advice for those who want to practice exemplary cultural practices. The guest replies that he lets people identify three traits: honesty, humility, and humanity. "These are something I believe every single one of us has inside of us already." Honesty, according to David, is not limited to telling the truth. "More importantly, it is about living and behaving in alignment with what we profess to stand for." The biggest killer of trust is "when a leader says one thing and does something else." Similarly, humility is about admitting our weaknesses without getting defensive. And significantly, it is to realize our strengths and abilities without letting ego get in the way. The guest suggests that people put these traits into practice. Damon asks the guest what plans he has while helping people. David reveals that his focus is now implementation of the ideas that he mentioned earlier. He intends to create an online course to train business leaders on his ideals. His target audience is small and medium enterprises. David wants to unlock people's captive goodness in this nine-month organizational program. "They don't have to learn anything new. They just got to become aware of what they've already got," he feels. Damon concludes the discussion by saying, "This has been awesome thinking." The conversation ends with Damon thanking David for his time.

Keys to Accelerating Execution in Business

In this, The Faces of Business, Trevor Calder, Founder, The Execution Factor, talks about the keys to accelerating execution in business so leaders can ensure their strategies come to life. Trevor brings 30+ years of problem-solving and leadership experience in international business. His education and certifications in engineering and other key philosophies like lean, Six Sigma, Theory of Constraints, and quality assurance provide Trevor with tremendous process skills. His experience in building processes and helping companies execute in various industries have given him the real-world experience to quickly pinpoint bottlenecks reducing execution speed and getting them out of the way. Trevor Calder, "The Executioner," collaborates with his clients to shift their execution capabilities to "ludicrous mode," where they get more things done. In his quest to accelerate his client's long-term economic growth, Trevor's improved organizational effectiveness leads to increased financial success. Trevor recently released his book, "Execution at Ludicrous Velocity," which helps readers understand how they can increase their execution speed to improve business results. Damon is pleased to welcome Trevor to this Livestream. He is interested in what kicked-started the Execution Factor. The Executioner replies that his company has evolved. He believes that dreams cannot become a reality unless we take practical measures in that direction. We focus on planning. But there is a downside. If we Google planning, we'll get bombarded. Moreover, between dreams and reality, execution is a missing factor. "What gets missed or underrated is the execution factor," he maintains. In his view, long-term planning "is obsolete" because "it's based on a static set of assumptions." On the contrary, reality is ever-changing. Now we plan to use situations for our benefit that makes a difference. We must consider critical factors. Execution is about being reactive and dynamic in a given situation. Damon asks Trevor about the Theory of Constraints (TOC) and other extensive training the latter has received in manufacturing. Damon further asks the latter how he applies his tremendous knowledge in his work. According to Trevor, the Theory of Constraints tells us where to focus on delivering the greatest value, unlike the other methodologies. Lean Six Sigma, as Trevor explains, is a methodology that employs teamwork to eliminate waste and lower variation to boost performance. To get rid of the different types of waste, it combines lean manufacturing/lean enterprise with Six Sigma. "All waste is created equally." He further elaborates on the idea with an example. By eliminating waste in execution, he intends to ensure that the service resources always get something to work on. "And it's really looking at it holistically." In his opinion, Lean Six Sigma is a good tool for dealing with this problem. Moreover, in Trevor's view, TOC is more reliable than any other tool. "It brings it back to the bottom line results." Damon adds that the TOC is a great way to look at what we should work on first because very few organizations have the resources to work on everything. Even if we work on everything, it may not be what we want because we might work on an area that is a constraint in our flow and process. "It does show us where we should focus." Damon asks him if these courses and approaches have helped Trevor reap the desired result. Trevor believes these approaches have rendered a very holistic structure. They are guidelines and principles. Moreover, they are flexible. We "don't have to follow it to the letter." Although it is advisable to follow the book with Lean and the TOC, a slight difference in the application will not harm. 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If we want each department to do a good job, we'll group things to maximize the output and reduce setups. By aligning the priorities, we are not only better able to focus but also better able to perform. It leads to measurements. It is our responsibility to match local measurements with global measurements. Damon asks Trevor how many times the Executioner has stepped into situations where one department has slowed down another without realizing it. "That happens all the time," exclaims Trevor. To align businesses, they need a bigger picture. There is a need to use a visual board to establish priorities. They must focus on the first blockages to ensure a smooth workflow. In Trevor's view, streamlining systems guarantees value-added time. That results in more flow, more throughput, and the results. Trevor believes it has helped him reduce lead times by 25% to 30%. In the same fashion, the Executioner asserts that thinking about execution gives him X-ray vision. 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"It comes very naturally to me because I've done a lot of ERP implementations and things over the years." Trevor helps them "focus on delivering value." He is "eliminating the light problem." He also aids businesses in increasing throughput, and cash flow is improving. "So that's becoming my core, my core product, and my core focus." Trevor's approach to solving bottlenecks impresses Damon. The conversation comes to a close with Damon thanking Trevor for his life.

Creating Websites that Speak for You

In this, The Faces of Business episode, Sarah Johnson, Co-Founder, Content Director, JamboJon, talks about Creating Websites that Speak for You and how the right web pages clearly communicate your message to visitors and let you achieve your desired goals and objectives. Sarah works with business owners to define their goals, build effective sales pipelines, and develop a following of raving fans. With 36+ years of experience and 4,000+ website pages programmed, Sarah knows what an effective website looks and feels like. Sarah founded JamboJon in 2003 as a website development marketing firm helping small businesses establish strong brands. Sarah and the team at Jamobojon specialize in creating websites that help clients expand their businesses. By virtue of her extensive experience in sales, psychology, and human connection, Sarah designs websites that successfully combine technology, storytelling, and graphics. Writing has always been Sarah's passion, and over the past ten years, her work has appeared in newspapers, social media platforms, blogs, websites, and newsletters. Sarah recently finished writing her first book and has edited three full-length novels. Damon and Sarah are very excited to talk about websites. The guest reveals that she has been running websites since the early 2000s. She gives huge credit to her college internship. At Utah Salt Lake Valley, she worked in a botanical garden. College authorities tasked her with the communications department "to help create the wireframe and the content for the websites." Sarah gives details of tasks she performed. She worked in public relations, shared press releases, managed events, did graphic design, and "all the things marketers do." Website development was then a new concept. Moreover, there were no publishing tools like WordPress, Blogger, and BlogSpot. There were only HTML and Dreamweaver. Additionally, she talks about her husband, Johnny, the co-owner of JamboJon. Before starting the business, he was the marketing director for a small software company in the Valley. He worked with a bunch of programmers. She describes two kinds of programmers: "the ponytails and the propeller heads." These two idiosyncratic terms arouse Damon's curiosity. According to Sarah, "Propeller heads are the tall, thin ones who like to make jokes about this one." Ponytails are "like ice that works well." Today, the couple runs a company. They have built hundreds of websites and thousands of pages and "have helped companies all over the country with their websites." Damon furthers the discussion by asking Sarah about her writing passion. Sarah comments that her writing career started when she wrote a journal in the fifth grade. So far, she has written over 47 journals. Currently, she is working on the 48th. Interestingly, she loves writing copy. "It's one of my favorite things." A copywriter can incorporate storytelling and learn about storytelling. All content stems from the human experience. Damon appreciates Sarah's insight into the human experience. Apparently, he has come across some very self-explanatory titles. Sarah finds that relatable and gives examples of her family and grandfather's filial love. Sadly, her father passed away when she was ten. She learned about her father through the words he wrote in his "journals and all of his letters." So, she collected her family's stories and shaped them into words. Sarah talks about her grandfather, a wealthy professor-turned-businessman. "He was wildly successful," she reveals. The New York Times published his obituary. Similarly, he received a lifetime achievement award from the Smithsonian. Her grandfather acted like a father. In his letter to his wife—Sarah's grandmother, to be exact—he chronicled the struggling phase of his career. Interestingly, her grandpa's struggles sharply match Sarah's early days of her career. The guest opines that without the storytelling element, the content is boring. She believes it is important to understand human psychology. "Our brains are designed to keep us alive." There are several reasons to make the content as lively as possible. Firstly, potential customers will make the message invisible if the message is difficult to understand. In other words, people will not even see if the message does not solve a problem and is not easy to understand. Resultantly, it will disappear. Secondly, there's a part of our brain called the "reticular activating system" (the RAS). It's a filter. So our "subconscious mind processes over 11 million bits of data a second." On the other hand, our conscious mind can only focus on about 50. Because of the RAS, we can solve the problem to survive. Our brain does not bother processing stories. It focuses on issues and their immediate solutions. 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"Using details will anchor people into the stories and help them see themselves in your stories." Damon finds it "really incredible." Sarah shares a piece of advice for business owners. She thinks they should be "in the trenches, building revenue, building systems, creating dreams, [and] having a passion." No doubt, anybody can write. "But are the words going to convert?" she continues, "Are they optimized for Google for keywords?" Moreover, she believes that copy must be optimized so that humans can understand and decide to take action. She encourages the listeners that if they value growth, they should find people in the team who can support their vision. Sarah thinks that business owners must take advantage of Black Friday. She believes people will spend over $13 billion on this day. Instead of substantial inflation, retailers are offering exceptional discounts and gift hampers. He further believes that the momentum stimulated by Black Friday will not end anytime soon. It may continue until the end of January. Furthermore, she has shared a key to Black Friday on her website. It is a step-by-step guide for entrepreneurs to reap the maximum benefit from the event. JamboJon has a workbook to prepare businesses for Thanksgiving and Yummy Turkey. Damon seeks Sarah's expert opinion on AI-generated copy. She says that every coin has two sides. "It is so cool that the capability of our technology is that literally, you can type in a keyword," and it will create a new version of the website. Theoretically, it is a fantastic idea. However, Google recently announced in their latest update that they are going "to ding you if you have a copy on your website." It will discourage AI-generated content. Moreover, she clarifies whether transcription counts as a copy. "There is no." This is because everything is fine if we record a video and you put it in an AI tool and transcript it. Damon mentions Marcus Sheridan, an accomplished writer. He adds that the latter suggests that a website must incorporate some questions even if their answers are not an excellent fit for the publisher. Agreeing with Damon, Sarah answers that in the past, we used to write noun-based keywords in the Google search box and hit it. Thanks to Siri and other virtual assistants, our search has become question-based. While talking about the importance of questions, Sarah comments that Google wants us to provide the most relevant answer to customers' questions. Because if Google's customers, the searchers, are not satisfied with the results Google provides, they will go to other search engines to find answers. "So, Google prioritizes their customers, their searchers, over their website holders because they want the most relevant answers to the questions." The host asks Sarah about her most challenging web development project. According to her, it is www.smithrexall.com, a pharmaceutical website in Utah County. The project was challenging because it has an ecommerce store and online quizzes. It has a Learning Management Portal and an online directory for doctors. "We're adding classes, new providers, and 100+ skews." Sarah concludes the discussion with optimistic comments. She believes she is building the future. She is playing a role "in American and worldwide cultures." She will contribute to prosperity for future generations. She hopes to provide hope and resources to her customers. "And storytelling is a great way to do that." Damon feels blessed to host Sarah for her piercing insights and enormous knowledge of the human psyche, storytelling, and content writing. The discussion ends with Damon thanking Sarah for her time.