As we approach the two-year mark of the pandemic ravaging the world, we are beginning to see the extent of the damage caused to the global supply chain. Brands and retailers now seek to recover lost ground only to run into new challenges servicing pent-up demand limited by severe constraints in the supply chain.
In addition to devastating communities and local economies around the world, the COVID-19 pandemic changed global economics on a huge scale. We are only just beginning to learn the impacts of the global shift and reliance on online shopping, and are now gearing up for another difficult holiday season of drop shipping and supply chain shortages.
What is happening with the supply chain?
The supply chain slowdown began in early 2020 when many factories and manufacturers stopped production and temporarily closed their doors to help stop the spread of COVID-19. This resulted in their shipping partners slowing shipments and deliveries to accommodate the lack of production.
We are still feeling the impact of these early closures, which was exacerbated by the increased demand for products by people quarantined at home. An estimated $25 billion worth of product is sitting in the ports of Los Angeles, delayed in delivery to shipping companies. From clothes and home office equipment for remote workers, to lumber for home improvement DIYers, product shortages run rampant across all industries.
What can you do about it?
There is a great deal of debate about the supply chain and the worsening delays unfolding this holiday season, but there’s a lack of discussion about actionable solutions businesses can take.. While larger companies, such as Home Depot, can leverage their resources to override the current supply chain constraints, the majority of companies need to rework their holiday strategy to combat the inevitable supply constraint impact will have on their business’s bottom line.
With constraints on product inventory available to sell, the best practice in this situation is not to discount your products in order to sell out, but to continue with a near “business as usual” attitude. This is a great strategy to start with, but it isn’t enough if you want to have a successful holiday season. The best way to ensure successful conversions is to utilize predictive analytics and CLV to ensure you’re targeting the right customers in your holiday campaigns.
What is CLV?
CLV, or Customer Lifetime Value, is a metric that estimates the value a customer will provide for your business throughout the length of the relationship. This includes how loyal a customer is to your brand, whether or not they rely on sales or discounts to convert, and how they engage with your product. Using this data, your business can make informed decisions about which customers to prioritize in your marketing campaigns based on their likelihood to convert and become long-term highly profitable customers.
This holiday season, consider which customers are most likely to convert and become loyal customers into the future. Targeting your most valuable customers and guiding them through the funnel is a much more valuable use of your time and resources.
In most standard eCommerce business models, your most important customers are your loyal, returning customers. This group is often likely to convert without special discounts or sales because they built a relationship with your brand. They want to buy from your brand and have proven they will continue to do so. While this group is incredibly valuable, it can be easy to overlook them and assume that they will always be loyal customers. Don’t take this group for granted; they are a force to be reckoned with and should be treated as such. Prioritize and target them in your holiday marketing campaigns to ensure a successful holiday season.
Start prioritizing today
Customers with predicted high brand loyalty should be your go-to this holiday season and in the new year. Whether you’re looking to prioritize which prospects to pursue or want to optimize your current marketing strategy, CLV is the silver bullet metric to improve your marketing, sales, and retention efforts.
Retina’s CLV Academy provides you with a crash course in all things CLV, including how to calculate and use it in your day-to-day practices. For a more detailed look into how CLV can transform your business, talk to one of our experts today.