What happens when an eCommerce business has low LTV?
You study a podcast! (https://podcasts.apple.com/us/podcast/taylor-andrew-build-an-organic-marketing-flywheel/id1087933109?i=1000498383279)
Reason? Taylor and Andrew (of CTC & 4X400) faces the exact same challenge as what I am facing.
Their eCommerce business (Modern Fuel) has low LTV. Which means that customers are not buying repeated purchases. That is totally understandable – given the nature of their products.
That’s where having an effective Organic Flywheel becomes especially important.
Organic Flywheel
The way that I see an organic flywheel, it consist of 3 different sub-sections
- Getting people to remember the brand and the product. With a brand having a bigger emphasis than the product.
- Getting people to share that they have purchased the product.
- Getting people to recommend/refer the product and to bring in new customers.
Herman Miller – A Good Example
Personally, I own a Herman Miller office chair. It’s the best purchase that I have made in 2020, and it has really help me to relieve those pesky backaches and shoulder pains from WFH.
- Getting people to remember the brand and product.
When you think of an ergonomic chair, you would naturally gravitate towards Herman Miller as a brand. You associate the ergonomic chair with Herman Miller.
This is where having a good brand story and an impressive product education deck works wonderfully.
Brand Story: https://www.hermanmiller.com/en_apc/about/our-story/
Product Education Deck: https://www.hermanmiller.com/en_apc/products/seating/office-chairs/aeron-chairs/product-details/
I think that these 2 form the fundamentals of an organic flywheel.
They give people a reason (and a story) remember the brand and the product.
2. Getting people to share that they have purchased the product.
As a consumer, I posted on my IG stories at the exact moment when my Herman Miller chair arrived. I was so exited.
Looking back, I was really perplexed as to what I did that. I wasn’t active on instagram too!
Was it pride/ego? (I wanted to let my peers know that I could afford an expensive chair?)
Was it joy? (I was so happy in receiving the product, that I wanted to share with everyone?)
The question is, how can we get people to share that they have purchased the product? This helps to bring on the organic flywheel.
3. Getting people to recommend the brand or product.
There are 2 types of recommendation:
- Active Referral -> Your past customers become vocal brand advocates, helping to promote your brand and products fervently.
- Passive Referral -> Your past customers become passive brand advocates, only helping to promote your brand and products indifferently.
Back to the Herman Miller example, in the months after I got my chair, I was a vocal brand advocate. I went around letting my friends and family know about my purchase, the importance of office ergonomics, and how a Herman Miller chair was the perfect option for this.
In comparison, I had a ergonomic Microsoft Sculpt keyboard for 3 years. It served me really well, but I didn’t go around becoming it’s vocal brand advocate. Why? This is really puzzling.
Now the million-dollar question is, how do we get customers to be passive brand advocates at first, and move them up to become vocal brand advocates?
Modern Fuel – Taylor & Andrew’s Brainstorming
Having contextualize Taylor & Andrew’s podcast into Herman Miller, I understand the organic flywheel much better now.
I have also complied a list of ideas that they have, and categorized them into the 3 different sub-sections which I have identified about the organic flywheel.
Idea #1: Really Delight Customers
-> Getting people to remember the brand and the product. With brand having a bigger emphasis than product.
I think the emphasis here is “really delight”. In this eCommerce age that we live in, prompt customer service and delivery are expected. I don’t think that these alone can “really delight” customers.
Personally, I think that the way to delight customers is to go down the route of personalization. Make the experience personalized to each one of them.
Form a deeper connection by caring and empathizing.
Delighting the customers can also be done in the form of a brand story and a product education deck. Let the customers know what your brand stands for, and how the product revolves around that.
- Behind the scenes
- Research process
Idea #2: Out-of-the-Ordinary Product Usage/Utility
-> Getting people to share that they have purchased the product.
Taylor & Andrew were mentioning on having a guide to taking the pen apart, with labels on the guide. This lets the customer to place each part of the pen into the respective labels.
Next, they were thinking of incentivizing customers to take a picture of this and sharing it on their social media (for an incentive).
Idea #3: Community Events
-> Getting people to remember the brand and the product. With a brand having a bigger emphasis than the product.
Having special community events/contests/competitions that are only available to customers that have purchased the product.
Personally, I think BOLDR does this really well.
They have monthly community events that are quite interesting.
Idea #4: Providing An Incentive To Share
-> Getting people to share that they have purchased the product.
It might not be the form of monetary incentives.
Instead, think about complementary incentives that you can provide. In Modern Fuel’s example, they were considering giving out pen refills, writing paper etc for each customer that does this.
Idea #5: Providing An Opportunity For Referral
-> Getting people to recommend/refer the product and to bring in new customers.
This was perhaps the most interesting portion to me.
Taylor & Andrew where discussing on “Where does the pen live in the customer lives“?
I thought that this was a brilliant insight that I have never thought about.
Some ideas that they have:
- The pen probably is in an office environment
- How can we subtly bring attention to it?
- Perhaps, can we provide our customers with a seamless invisible stand to hold the pen?
- This way, when their colleagues walk past their tables, they will notice it and ask about the pen
This approach, coupled with a solid brand story and a solid product education deck, will let your customer have so many things to say to their colleagues.
