If a competitor made a concerted effort to come after your market, how would your customers react? What can you do to build the type of bonds that survive – or even thrive – in tough times? The Lifetime Value Opportunity Equation (LOVE model) provides CEOs an actionable framework for using customer relationships to make your organization more competitive (and efficient and innovative).
Most organizations – probably yours too – define customer relationships in terms of the buying funnel: awareness, consideration, and purchase. The buying funnel is predicated on your company controlling the message, but this no longer works in an environment dominated by two-way and unstructured communications such as blogs, user-generated reviews and comments, and social media networks. It’s now easy for your customers to talk back-or to each other via conversations that are beyond your control.
The key is interacting with consumers rather than transacting with them. CEOs lack a framework for understanding how to interact with consumers as they evolve through the different stages of relationship. (Newsflash: not all customers are the same.) You need to stop trying to bribe and manipulate people to get them to do what you want. This is transactional behavior that doesn’t encourage you or them to seek new forms of value. Deeply engaged customers buy from a company not merely because they like the product or service, but because they genuinely want the business to be successful.
The LOVE model departs from the buying funnel by viewing customer relationships as an evolving set of bi-directional interactions. These relationships grow from an introductory stage where neither party knows much about the other all the way to co-creation. In a co-creative relationship, you and your customers share a common vision and align interests. The benefits of co-creation are huge, and reach into every corner of your business and are reflected in both top-line revenue and bottom-line costs.
The LOVE model can be applied to any online relationship, not just to customer acquisition and purchase. Likewise, the benefits of the LOVE model framework extend far beyond social media and other marketing campaigns making it of particular value to CEOs seeking to drive change throughout their organizations. The LOVE model drives long-term value in areas as diverse as customer support, product development, and thought leadership.
The value of making your business success a shared goal draws customers closer to your company in ways that a transactional outlook simply cannot. Embracing the LOVE model framework embarks your organization on a journey of discovery that leads to quantifiable results, long-term value and enhanced competitiveness.
Bruce La Fetra develops strategic marketing plans for software, technology and services clients. After more than 20 years as a consultant and practitioner, he launched La Fetra Consulting to elevate marketing into a strategic role by encouraging a service-oriented approach and building stronger ties between companies, customers and partners. He previously served as Business Strategist with Rubicon Consulting, Director of Industry Marketing for Docent (now SumTotal) and Director of Strategic Marketing & Business Development for Internet Commerce at First Data. Contact him at email@example.com.