Looking to improve your LTV (Lifetime Value of a Customer)? I have a story for you.
My friend, a former CMO now a fitness entrepreneur, told me about his version of “The Big Problem.”
I’m willing to bet it’s a lot like the biggest problem you face in your industry.
The second week of every year is the biggest week of gym membership sign-ups. Talk about a great start.
After a visit or two, 9 out of 10 of those new gym members won’t be seen at the gym again.
Fewer than 2 out of 100 will be there by the end of the year.
Think about the influx of gym membership promotions you see leading up to the new year. When putting pencil to paper, that’s a lot of money for an advertiser (like you) to spend on customer acquisition when the retention rate is less than 2%. For all the cost of acquiring 100 new gym members, more than 98 don’t stay.
I can tell you similar stories across a broad range of industries. People don’t do what they know is best for them.
More often than not, they don’t follow through on their best intentions. Your job as a marketer is to help them. And our job is to help you improve your LTV by getting your customers to not only stick, but stay.
When twice as many stay, you improve your LTV by twofold, your growth accelerates, and you help many more people create habits that help them flourish. And those habits mean they will stick with your brand.
Would you like to improve your LTV? To get things going, we can give you a 3Ms analysis of your industry and show you how DiGo can blow that out into great creative for your brand. And great creative is the ultimate economic multiplier.
“We can’t solve your problem because we haven’t done our strategic work yet.”
When I worked at other agencies, I always thought this to be the ultimate bureaucratic blindness.
Building the BRAND While We Build The BUSINESS.
This is the core promise of our agency, DiMassimo Goldstein. This is the experience our clients have bought when they’ve bought us.
Not: “First we’ll build the brand, then we’ll build the business.”
Not: “First we’ll build the business, then we’ll build the brand.”
Instead, we do both, and simultaneously. Like you do!
Sometimes this translates as “Building the brand while lowering the cost of acquisition.” Sometimes it’s “Building the brand while driving sales efficiency.”
Sometimes it’s just “Growing the business and the brand.”
Our clients never wait months to see returns from an agency engagement. We typically deliver measurable revenue within the first 30 days, and we don’t have to sacrifice future success to do it.
We call it two-track planning, and it’s implemented in everything we do. Imagine two columns on a page, the left titled URGENT and the right titled IMPORTANT.
Some urgent things are truly unimportant, but some we term “The Runway.” The board meeting coming up. The quarterly results reporting. The partner’s meeting.
If a plane doesn’t get aloft by the end of the runway, it doesn’t matter how good the food service and the movie was going to be. There are things you just need in the short run to make the long run possible. Often these things include results. That’s the Runway.
And, we don’t lose our strategic heads. We see the long-term opportunities in urgent problems. We see growth in behavior change.
And we manage them both, so that our clients can move forward, paying for tomorrow’s opportunities with today’s wins, all while strategically planting the seeds that ensure growth for the future in a time-starved world.
Yes, we build the brand. Yes, we build the identity and design the brand. Yes, we develop a theory of growth and build out a marketing plan. Yes, we develop advertising and content. Yet, we view all of this through a Behavior Change Marketing lens.
In short, behavior is where brand and business meet. Until someone acts, nothing changes. Until behavior changes, businesses don’t grow. Behavior is the intersection of meaning and emotion.
Every KPI in a business is driven by a Key Behavioral Indicator. Behavior drives results.
By keeping our eye on the behavior and the result, we see eye to eye with our clients as we accelerate value creation for the business.
Your name and your logo are the essential seeds of your brand identity. No brand strategy can really get off the ground without these essential elements of identity. Start-ups need to build the brand foundation to power the growth-stage company they will one day be.
Your brand is your most powerful behavior change tool. If you’re disrupting a category, building a new one, promoting a new way of doing things, building subscriptions, memberships, community or a habit, then you’re in the business of behavior change.
Branding for behavior change is different. It’s tools for the present and tools for the long road, for each stage of the customer journey.
That said, it hard for me to imagine “no logo.”
Of course, the company will have a name. If the company has a name, you will need to represent the name in some way. Anyway you choose to represent the name will appear as “the logo.”
If you don’t designate a way of representing the name then you might use whatever typeface you’re working in at any given time to represent the logo.
Apple. Think different.
Nike. Just do it.
DiMassimo Goldstein. Inspiring Action.
This variability will be, in effect, your logo. And, it’s pretty bad.
So, then the question is – what would be worse? A good way to begin to think about this is to think of the strengths of this particular approach to the logo.
For one thing, it’s readable.
An unreadable logo would be worse, especially if the brand wants to stand for clarity, simplicity or ease-of-use.
Apple’s use of the apple icon with the bite out of it isn’t unreadable. We say it’s “iconic” precisely because people look at it and immediately think Apple. Not everyone, of course, but enough people do.
Same goes for Nike’s Swoosh.
The approach to the logo above also has the strength of feeling appropriate for the context it’s in. On the other hand it doesn’t stand out, but blends in.
Kim Kardashian. Nothing to see here.
Blending in is a brand value for some companies, but not for others.
Another thing you can say for the variable Zelig (the Woody Allen character who took on the appearance, dress and behavior of whoever he was with) logo is that it is not especially ugly or stupid or crass or inappropriate.
Diesel. bE sT0oPid
Diesel actually had a successful “Be stupid” campaign. The idea: smart is boring; stupid is more fun. A stupid logo might make sense for them, but would be an absolute disaster for Wells Fargo.
Wells Fargo. sTuPid in LoVE wITh yOUr MoNEy
I would propose that you start out with a good-enough logo.
I started my own company with DiMassimo Inc. as the name, using the Courier typeface that used to be associated with typewritten material. It was the mid 1990s and the world was full of wild, pixelated, digital-influenced type faces, so I thought that Courier said that we didn’t need any flash or pretense – in short, it showed confidence.
It worked well enough until we had a better logo and identity designed.
Apple started as Apple Computer Co. They didn’t have such a great logo.
Microsoft’s first logo was OK…
Amazon’s first logo was no great shakes…
But there is such a thing as a truly awful logo. Some people think Pepsi’s logo is not so great:
Doughboys Pizza has cleaned up its logo since this one. I know what you’re thinking – no, with a designer!
Also, today it’s important to make sure your logo isn’t offensive in and outside your own borders and culture. This one from Locum in Sweden is particularly unfortunate.
I tried hard to confirm this last one because it’s a pretty unbelievable fail. From all I can find it appears real, although it may have been a company holiday card design rather than an all-year logo. The company currently has a more regular typographic mark, which now looks more like I o cum. So, better.
Now, you know a firm with just this specialization, because you know our name and you know our logo.
Behavioral science tells us that most marketing strategies overemphasize motivation. Moderately motivated people are more likely to do what’s easy than highly motivated people are to do what’s hard.
Ease beats motivation. That explains the fate of most New Year’s Resolutions.
Google’s competition had gone in for massive cross-selling and indexing. Yahoo and Netscape’s homepages were cluttered with links.
Behavioral economists confirm what direct marketers long knew – choice depresses response.
Why, because simple is easier, and ease is the single most important factor in designing for behavior change.
Google had a simple search bar, a logo and that’s it. Faster is easier.
And, the distance in time between action and reward increases effectiveness geometrically. That’s why Google uses a little of its precious homepage real estate – to tell you exactly how many nanoseconds it took to get your result.
People talk a lot about KPI’s – Key Performance Indicators. They use various words to talk about them.
“What are your KPI’s?”
“What are your key metrics?”
“Do you have numbers you must hit?”
Merely accepting the first answer is a mistake. Remember, your aim at this point is to be a master appreciator. From great appreciation comes great inspiration.
Do not do what most people do. Do not merely accept the KPI’s, dutifully write them down to show you’re paying attention, and then move on to other things.
Instead, continue to drill in with questions in a Socratic attempt to appreciate why these are the KPIs.
When you understand why these are the KPIs, you will have built a mental model that allows you to think and imagine outcomes just as a CEO, board member or key investor in the company does.
If you understand why the KPIs are the KPIs, then you will be able to see change coming to those factors that affect success for the business. You will also be able to question the KPIs and help the client focus on the Performance Indicators that are truly Key.
For example, we worked for many years with an electronic broker. We asked the question, “What key measures drive the creation of value in the company? What key measures drive growth?”
After some discussion we got to three:
Increasing the total number of active clients. Increasing client trading activity Increasing the total number of assets in accounts. After some discussion, we decided that only the first two measures – the number of clients and their level of trading activity – were important drivers of value at that time. The reason for this was that interest rates were very low and therefore deposits were not a significant source of revenues, profits or business value.
Fortified with this appreciation of the drivers of growth in the value of this business, we were able to confidently move on to our next steps in generating that growth – asking and answering the question:
What key actions or behaviors drive those KPIs?
The KPI “increasing the number of total clients” was driven mostly by increases in the numbers of new funded accounts.
So, the behavior that would drive growth in this KPI was, “More customers opening new accounts and funding them.”
This was wonderfully focusing.
Increasing client trading activity was the second key driver of growth. Whereas in other categories, marketers are focused on increasing revenue per customer – for example, people who run shoe stores want to sell more pairs of shoes per customer and people who run e-commerce sites want to increase the average cart size – retail brokers had remained focused on acquiring new customers.
There were exceptions. We helped Tom Sosnoff, Lee Barba, Ainslee Simmonds and Lee McAdoo build thinkorswim (now part of TD Ameritrade) from a small and interesting digital options broker to a powerhouse with the industry’s most valuable customers.
Sosnoff, a savvy trader, was an even savvier entrepreneur, a born teacher and a natural movement leader. In short, he made options trading cool and never played down the risk or danger. This got thinkorswim to the summit base camp from which it would begin an even more rapid ascent.
Options traders trade a lot and pay well for their trades. When thinkorswim merged with Investools – a pioneer and leader in the online education space – they immediately had a way to dramatically scale the creation of new options traders.
People paid good money to Investools to teach them how to trade options. In exchange, Investools helped them to transform themselves into active options traders. Investools needed a platform for these student traders to trade on. It would have to offer simulated trading as well as real live trading.
Thinkorswim fit the bill perfectly.
Now, Investools students would learn to trade on the thinkorswim platform.
In addition, Investools substantial graduate list of tens of thousands of active options traders became available to thinkorswim for remarketing. Half of those former students became thinkorswim clients.
Next, thinkorswim began to integrate Investools training into its platform and customer service offerings. This increased trading volume and dramatically grew the value of the business.
The key insight here: new trading concepts and ideas lead to more trades.
We would mine this insight for our new client and take it even further, programming trade ideas into software apps that could also execute the trades.
Since our key driver of grow was increased trading volume, which we thought of as increased volume per client, the behavior that would drive this growth was defined as “one more trade per customer per month.”
This would make a real difference in the value of the business, and it was just a start. Just trading volume summit base camp, a milestone on our way to the top.
Since the behavior was “the client makes one more trade per month” we went to work to address the blocks to that behavior. Our clients were already more active than nearly all the other retail brokerage clients in the industry. But, what kept them from being even more active?
Remember that if you want to increase a behavior, you need to combine motivation and ease in the same moment – (MxE)Same Moment = Behavior.
We spent thousands of hours watching traders trade. We got to know their multi-screen set-ups and the joys – and sometimes intimacy avoidance – of their basement trading lairs. We interviewed scores of them and the interviews were so compelling that we edited several of the audio recordings and paired them with animation to create authentic and effective tv commercials and digital videos.
The motivation was there. They wanted to trade more. In front of their screen was the moment. They only lacked the ideas, they told us.
All the time that wasn’t spent trading was spent trolling for ideas. They loved the trading. The trolling for ideas was the hard work that made the trading possible.
More ideas, delivered in the moment they are in front of their screens, made as easy as possible to understand and execute, would unlock the behavior we were looking for.
Trading ideas, programmed and ready to download and execute like apps on a mobile device, did the trick.
Traders reported being more satisfied and improved their performance. We got our one more trade per client per month and that was just the beginning of the growth in trading volume.
As a master change agent, you’ll bring the much-needed clarity to each situation. You’ll walk into rooms where everything seems important and the list of things to be solved is as long a Vaynerchuk’s YouTube feed.
And you’ll go right to the essentials.
What measures most affect growth? What behaviors drive those measures? With those questions asked and answered, you’ll get down to work.
How do we make those behaviors motivating and easy (in the same moment)? You are well on your way to building your Theory of Change. The next steps help you prioritize and focus still further.