Teaching2015-01-09

Maximizing Lifetime Value Customer

Maximizing Lifetime Value Customer

Eben Pagan teaches entrepreneurs how to maximize customer lifetime value by helping customers feel in control and creating wow experiences. He covers the psychology of customer fear, user experience design principles, and storytelling strategies that turn customers into advocates.

Maximizing Lifetime Value Customer

0:00--:--
Listen:Website

The Psychology of Customer Control and Fear

Eben explores how customers feel out of control during purchases, leading to fear that prevents buying decisions. He explains that identifying where customers feel powerless and transferring control back to them increases confidence and purchase likelihood.

User Experience Design as Competitive Advantage

Drawing from Silicon Valley practices, Eben discusses how successful companies employ UX directors to treat customer experience as both art and science. These professionals observe real customers using products to identify pain points and create spectacular experiences.

Storytelling as Social Currency for Customer Advocacy

Eben reveals how people naturally use stories to gain attention and social status. He teaches entrepreneurs to give customers experiences worth sharing that help them impress friends and feel important, turning customers into advocates.

Post-Sale Relationship Building and Wow Experiences

Using Zappos as an example, Eben shows how to create customer loyalty through exceptional post-sale experiences. He emphasizes treating sales as relationship beginnings rather than endpoints, taking extra time to ensure customer success.

Questions This Episode Answers

How do you increase customer lifetime value

Anything you can do to help your customers feel like they are in control will make them love you and also will help them feel confidence in your business and your product and help them feel confident to come back and buy more from you

Eben Pagan0:30

Help customers feel in control during every interaction. Identify where they feel out of control and transfer control back to them, which reduces fear and increases confidence to buy more.

Why do customers hesitate to make purchases

Customers feel out of control. When buying something, each of us wants to avoid making a mistake, looking foolish, or being ripped off. The less we know about the product we're buying, the more out of control we feel and the more fear we feel.

Eben Pagan0:30

Customers feel out of control when buying and want to avoid making mistakes, looking foolish, or being ripped off. The less they know about the product, the more fear they experience.

What is user experience design in business

this person is usually responsible for the design, the overall design, if it's a piece of software, and the overall experience that the customer has

Eben Pagan2:18

User experience (UX) design focuses on creating spectacular customer experiences by watching how people use products, identifying problems and challenges, and treating the overall experience as both art and science.

How do you create word of mouth marketing

since your customers are going to be telling stories anyway, give them stories that help them get attention, impress their friends, and feel important

Eben Pagan4:28

Give customers stories that help them get attention, impress their friends, and feel important. Since people naturally tell stories to gain social status, provide experiences worth sharing.

What should you do immediately after making a sale

What if, instead of moving on, you took a bit of extra time to make sure your customer is getting the most from your product or service

Eben Pagan7:29

Take extra time to ensure your customer gets maximum value from your product or service instead of moving on to find the next customer. Treat the sale as the beginning of the relationship, not the end.

How does Zappos create customer loyalty

how delightful is it to be able to return your shoes or your other merchandise for a full refund and have them pay the shipping both ways?

Eben Pagan6:06

Zappos creates loyalty through their 'delivering happiness' motto by allowing full refunds with free shipping both ways, letting customers buy multiple items and return unwanted ones, and providing exceptional customer service.

How to Maximize Customer Lifetime Value Through Control Transfer

A systematic approach to increasing customer retention and repeat purchases by helping customers feel in control

  1. 1

    Identify Control Points

    Ask yourself 'where does my customer feel out of control?' during their buying journey and experience with your product or service

  2. 2

    Transfer Control Back

    Figure out how to give customers more control in the areas where they feel most vulnerable or uncertain

  3. 3

    Map Emotional Touchpoints

    Identify which customer interactions have the most emotion, anticipation, or stakes involved for maximum impact

  4. 4

    Create Post-Sale Experiences

    Take extra time after making a sale to ensure customers get maximum value instead of moving on to the next prospect

  5. 5

    Develop Shareable Stories

    Give customers experiences and stories that help them get attention, impress friends, and feel important in social situations

All Teachings 9

TeachingEmpowering0:30

Customers feel out of control when buying, leading to fear that prevents purchases and reduces lifetime value

When people feel out of control, they get emotionally activated and start to feel fear, making them less likely to buy or return for repeat purchases

TeachingEmpowering1:32

Identifying where customers feel out of control and transferring control back to them increases confidence and purchase likelihood

Asking 'where does my customer feel out of control?' and figuring out how to transfer control increases likelihood they'll feel confidence, calm, and buy more

Expert InsightEmpowering2:18

Silicon Valley companies use User Experience (UX) directors to treat customer experience as both art and science

Very successful companies put customers in rooms to watch over their shoulder as they use products, observing problems, challenges, mistakes, and questions to create spectacular experiences

TeachingEmpowering2:28

Every customer interaction is an emotional window of opportunity to make an impression

Each time customers see marketing, contact business, visit site, or talk to team creates emotional windows, with some being more powerful based on emotional buildup and anticipation

TeachingEmpowering4:28

People bond and get attention by telling stories, making storytelling a social currency for status and approval

Stories are used to get attention, social status, let others know we're important, get approval and sympathy, and play status games - it's at the core of relationship building

TeachingEmpowering5:34

Give customers stories that help them get attention, impress friends, and feel important to maximize word-of-mouth marketing

Since customers will tell stories anyway, providing them with stories that serve as social currency helps them gain status while promoting your business

Expert InsightEmpowering6:06

Zappos creates wow experiences by paying shipping both ways for returns and delivering exceptional customer service

Tony Hsieh's Zappos allows customers to buy several pairs of shoes, return unwanted ones without shipping costs, and provides delightful customer service with their 'delivering happiness' motto

TeachingEmpowering7:09

Most businesses lose momentum after making a sale by abandoning customers instead of seeing it as the beginning of the relationship

Businesses feel the hard part is over after a sale, so they move on to getting the next customer and abandon existing ones, missing opportunities to maximize lifetime value

TeachingEmpowering7:29

Take extra time right after making a sale to ensure customers get maximum value from your product or service

Instead of moving on after a sale, investing time to help customers maximize their results creates wow experiences and maintains momentum in the relationship

Episode Tone
4 foundational4 intermediate1 advanced

Key Teachings 9

Customers feel out of control when buying, leading to fear that prevents purchases and reduces lifetime value

0:30

Identifying where customers feel out of control and transferring control back to them increases confidence and purchase likelihood

1:32

Silicon Valley companies use User Experience (UX) directors to treat customer experience as both art and science

2:18

Every customer interaction is an emotional window of opportunity to make an impression

2:28

People bond and get attention by telling stories, making storytelling a social currency for status and approval

4:28

Give customers stories that help them get attention, impress friends, and feel important to maximize word-of-mouth marketing

5:34

Zappos creates wow experiences by paying shipping both ways for returns and delivering exceptional customer service

6:06

Most businesses lose momentum after making a sale by abandoning customers instead of seeing it as the beginning of the relationship

7:09

Take extra time right after making a sale to ensure customers get maximum value from your product or service

7:29

Counterpoint 2

Claim:The sale is the end goal and hard part of the customer relationship

Reframe: The sale is the beginning of the relationship and an opportunity to wow customers

Claim:Customer experience is about product features and functionality

Reframe: Customer experience is about helping people feel in control and reducing their fear

Quotable Moments

Customers feel out of control. When buying something, each of us wants to avoid making a mistake, looking foolish, or being ripped off.

Eben Pagan0:30

Anything you can do to help your customers feel like they are in control will make them love you.

Eben Pagan0:30

Every time you interact with a customer, it's an opportunity to make an emotional impression every time.

Eben Pagan2:28

Since your customers are going to be telling stories anyway, give them stories that help them get attention, impress their friends, and feel important.

Eben Pagan4:28

It's easy to lose momentum right after you've made a sale. It feels like the hard part is over, so most businesses move on to getting the next customer and they kind of abandon their customers.

Eben Pagan7:09

You Might Be Interested In

Your communication skill level determines your ability to get attention, teach, influence, sell, and market - it's a fundamental skill supporting all key success areas in life.

Eben explains that without communication skills, people experience less control and influence, miss goals in health and money, can't build deep relationships, and can't motivate others to take action.

Branding advertisements that focus on getting your name out there typically fail, while direct response marketing that offers specific value gets immediate results.

Eben's real estate ad with empty chair saying 'Evan Pagan is far too busy helping people buy and sell real estate to pose for pictures' got zero calls, while 'Free report reveals expensive mistakes to avoid when buying or selling a home' made phones ring off the hook for the same spend.

Direct response marketing focuses on getting people to respond immediately, not building brand awareness over time

Eben contrasts two schools of marketing: branding (getting your name out there) versus direct response (getting people to respond right now), emphasizing that direct response is all about persuasion and dialing up emotion to get immediate buying decisions

Successful direct response pieces include seven key components: powerful headline, conversational copy, personal story, benefits list, offer with price, risk reversal guarantee, and specific call to action

Eben outlines the standard components found in direct response marketing ads, letters, and videos that create marketing pieces that really work, noting these elements appear consistently across successful campaigns