Over the course of time, businesses have developed several different ways to calculate the respective values of their assets. From intellectual property and inventory to real estate and liquid capital, every facet of a company has a dollar amount associated with it. But how does an organization capture the value of what is perhaps its most useful asset: its customer database?
A database of customers and potential customers can be broken down into a collection of individual user records. Each user record is typically associated with an email address. Perhaps the best way to quantify the value of an entire customer database is by determining the value of each individual user record.
One simple way to calculate the worth of a singular user record is by dividing annual revenue attributed to customer marketing by the total number of user records. This is known as the revenue-per-subscriber method.
Another, more complex calculation involves assigning a value to every action a user can take. For example, an email clickthrough could have more value than an email open, but less value than the referral of a friend. Using this method, the net worth of a user record can change over time.
No matter which calculation process an organization chooses to utilize, here are a few surefire ways businesses can increase the value of each and every individual user record.
Offer Social Login in Addition to Traditional Registration
One great way to increase the value of a user record is by allowing users to register for and login to your site or app across channels. Whether it’s through web, mobile browser, or native application, social authentication is the fastest and simplest way for customers and companies to connect.
In fact, Gartner predicts that by the end of 2015, 50% of new retail customer identities will be based on social network identities. And according to a recent Gigya survey, 66% of US and 59% of UK consumers say they use social login “always” or often” when given the option, while over 60% of respondents from both regions say they are likely to choose social login when using mobile devices.
By offering registration and login through social accounts, each user record is now associated with a real identity, not just an email address. Plus, social login enables customers to grant your brand permission-based access to valuable social profile information, including their relationships, interests, locations and more, building out more detailed user records.
Consider the login options created by Lancome. In addition to allowing traditional sign-in via email address, Lancome also allows users to authenticate using several different social network providers.
Incentivize Valuable Actions
Another effective tactic organizations can use to increase the value of a user record is encouraging and incentivizing certain activities. Creating a loyalty program based on game mechanics is a mutually beneficial way for companies to reward their customers for valuable behaviors.
For example, authenticating through a social network account, sharing a review of a product, and making an online purchase can all be assigned different point values. Those points can then be accumulated and redeemed for additional products. This process creates significant engagement, driving the revenue potential of each user record.
Check out the rewards program Victoria’s Secret has created for its “Angel Card” members. Angels can earn points for linking their cards to social media accounts in addition to earning points for making in-store purchases. This is a great example of a cross-channel incentive program.
TIP: Leverage a web-based dashboard that enables you to easily and accurately measure the impact of specific user actions against KPIs like shopping cart conversions, average transaction value, and more, and assign gamification and user record values accordingly.
Send Targeted and Relevant Messaging
Perhaps the most obvious way to increase the value of a user record is by sending relevant and personalized messaging to each user. Information captured over time through purchasing habits, account preferences, and social authentication should be leveraged in order to create tailored experiences.
If an Atlanta Falcons fan living in San Francisco is sent an email with a link to purchase 49ers fan gear simply because of location, that fan is far less likely to clickthrough, and could even unsubscribe. Establishing an accurate view of a customer’s identity and then turning this data into action via database integrations across marketing platforms makes real-time personalization possible.
This email from Nike is a perfect example of leveraging customer data appropriately. Nike knows that this user enjoys running, certain genres of music, and is a Stanford alum. The email contains links to relevant running paths, playlists, and clothing. The user is much more likely to engage and potentially make a purchase when sent interesting messaging.
These are just a few strategies your business can use to increase the value of a user record and drive lifetime customer value. To learn more about how organizations are collecting and applying social, behavioral and transactional data, check out our white paper, Stop Using the Wrong Data!
– Reeyaz Hamirani, Corporate Communications Manager
By Tobias Meyer-Grunow