Do you want to turn customers into loyal fans who drive sustainable growth?

Valentin Radu, a pioneer in Customer Value Optimization (CVO), is here to show you how. In this episode, we delve into the world of CVO with Valentin, the founder of Omniconvert, CVO Academy, and author of the acclaimed book, “The CLV Revolution.”

Valentin’s passion for understanding and exceeding customer expectations has fueled his entrepreneurial journey. He’s built four successful companies, including Omniconvert, a company trusted by retail giants like Avon and Patagonia to optimize their customer experiences.

Tune in to discover the secrets of the CVO Methodology, a framework for achieving sustainable growth, along with how to leverage cutting-edge experimentation techniques to optimize customer lifetime value across all touchpoints. Learn actionable insights from Valentin’s experience building and scaling multiple businesses.

Conquer Local is presented by Vendasta. We have proudly served 5.5+ million local businesses through 60,000+ channel partners, agencies, and enterprise-level organizations. Learn more about Vendasta, and we can help your organization or learn more about Vendasta’s Affiliate Program and how our listeners (like yourself) make up to $10,000 off referrals.

Are you an entrepreneur, salesperson, or marketer? Then, keep the learning going in the Conquer Local Academy.

Using AB Testing and Segmentation to Improve Customer Lifetime Value

Introduction

I’m Jeff Tomlin and on this episode, we’re pleased to welcome Valentin Radu.

Valentin is a leading figure in Customer Value Optimization (CVO). He founded the CVO Academy to teach businesses how to prioritize customer understanding and care for sustainable growth. He’s also the author of “The CLV Revolution,” a guide to maximizing customer lifetime value.

Valentin’s entrepreneurial spirit is evident in his development of the CVO Methodology.  His company Omniconvert, helps major retailers like Avon and Patagonia optimize customer experiences.

Get ready Conquerors for Valentin Radu coming up next on this week’s episode of the Conquer Local Podcast.

Budget Marketing Grew Insurance Company to 250,000 Customers.

Jeff Tomlin: Valentin Radu, CEO of omniconconvert.com. How you doing? Welcome to the podcast.

Valentin Radu: Hi there. It’s all good here on this side of the planet. Thank you for having me.

Jeff Tomlin: And you’re coming to us all the way from Bucharest?

Valentin Radu: Romania. Exactly.

Jeff Tomlin: Romania, amazing. Hey, well, I’m really pumped to have you on the show here and specifically about some of the things that we’re going to talk about. Really cool stuff. To start out, I want to inspire some people, some marketers out there to think outside of the box, and this is something that you’ve done a fantastic job with. So I read in the notes that in your third company, you grew to 250,000 customers with $700 and customer acquisition is one of the biggest challenges that businesses have. So, God, you got to tell us that story and how you did that.

Valentin Radu: Yeah, sure Jeff. Let’s start with that. So actually that was my third company. It was an online insurance player, so we had no money to waste on Google ads and stuff like that. So initially we’ve started with the good old way, SEO and PR campaigns and pitching different websites to do something about us. And we’ve started to pick up enough money to start Google ads and Facebook ads. So after that, we’ve managed not to be profitable, let’s say, which is, it was the biggest, the best thing that could happen for us because if we would be just a bit profitable, we wouldn’t be making dramatic changes. So because of the struggle that I wasn’t making enough money, I’ve started to look at the conversion rate and at the customer lifetime value. So we’ve started to understand, okay, we need to squeeze every penny out of our website. So we’ve managed to improve the conversion rate through this AB testing. So we’ve started to do all sorts of experiments that you could imagine. We fooled our visitors that we were from their cities by using the images from their main squares. We’ve started to use a picture with their car to see things more familiarly. We’ve started to postpone the delivery of the codes and let’s say brainwashing them about how cool we are, testimonials from their cities. So all of those experiments accumulated and got to a 60% uplift in the conversion rates. And basically, after that, we were printing money because it was the same customer acquisition cost, but with 60% more conversions.

First-Party & Zero-Party Data Hold Untapped Marketing Potential.

Jeff Tomlin: I’ve heard all the way throughout my life, a lot of people saying that you need to have money to make money. And so it’s a great example of somebody that’s grown thinking really smart, thinking outside the box, growing a massive customer base with a very limited budget. I love it. One thing I wanted to chat about you’re a super data-driven marketer, and traditionally and a lot of times today I look around, I see marketers working with a fairly limited set of data points, and I wanted to ask you, what types of interesting data is now available to people that you don’t see people really leveraging a lot when they’re trying to optimize their marketing?

Valentin Radu: One thing which is pretty obvious is the first-party data. So for instance, I’m obsessed about first-party data and zero-party data because of course the third-party data is gone. And now with the first-party data, so looking at what the actual customers bought, segmenting your customers, understanding which are the products which are being bought by your best customers, and then doubling down on those products because those are your hidden gems. So those are your moneymaking products. Those kinds of data is being neglected. And another thing is the zero party data, like capturing things like, “Hey, do you have a pet? Is it a cat, is a dog? Do they have allergies?” Stuff like that. And this can be leveraged down the line to form a relationship with your prospects and with your customers down the line. So basically a low hanging fruit that we are seeing now happening in the market in e-commerce and retail is making sure that you segment your best customers and using them as lookalike audiences so that your acquisition cost goes down, your conversion rate goes up, and your CLV goes up as well.

Customer Segmentation & Research Unlock Powerful Marketing Messages.

Jeff Tomlin: Yeah, no, actually I see a lot of people that don’t do a great job in segmentation, and it can really be the key to dialing in your marketing because sometimes there’s massive differences between your customers and sometimes there’s subtle differences that actually make a big difference in your messaging. And tweaking that messaging a little bit can make a big difference, can’t it?

Valentin Radu: I think it’s more acute than that. So basically if you are not doing segmentation, you are wasting money because with the customer segmentation, for instance, in e-commerce, we do RFM, recency, frequency, monetary value. We look at the best customers and then we interview them to understand, “Okay, what’s in your mind that you came back to buy eight times from us?” Finding those things this is like them writing copy for your ads because you as a marketer, you don’t know how to describe your brand because you’re like the fish in the water. You can’t notice water anymore. But your customers, they are simplifying your messaging and make it way more punchy than you could ever do because they are human beings. They are your targets. You need to let your customers talk with other new customers, and that means in order to this, you need to talk with them. You need to do these type of interviews. You need to extract things like the jobs to be done, which is another methodology that I love applying. And with this type of method, you can have more punchy creatives because at the end of the day, in the world where ads, it’s all about, let’s say we have AI, we have targeting, we have whatever. The marketer is just tweaking the CPCs and the bids there. You can’t do anything than that. But on the creative side of things, then you can do a lot of things. You can tweak the way you are positioning your products and your brand so that you are way more effective in your marketing campaigns. And that’s a neglected part of the entire marketing. Customer research, I think this is the drawn horse. If you do that properly, then everything falls into at the right place. If you don’t do that, then you’re throwing spaghetti at the wall and you don’t even know how much you can spend to acquire a new customer because you are not tracking what matters.

Balance Acquisition & Retention for Optimal Customer Value.

Jeff Tomlin: Yeah. One of the things I find that’s really challenging for companies to balance is customer acquisition versus retention. And oftentimes when you start to scale, you start to capture people that are a little bit outside of that ideal profile that you have. So you had some pretty interesting observations working with retailers and thinking about lifetime value and conversion rates. So tell us a little bit about that.

Valentin Radu: Yeah, I think acquisition and retention should work hand in hand, especially for companies that are selling fast moving consumer goods. So where purchase frequency is mandatory to happen. So if you’re selling mattresses or wedding rings, don’t worry too much about retention, worry about amplification through the existing customer. So you still need to deliver the best customer experience that is. But if you’re selling, I don’t know, food, pet supplies, whatever, with fast moving consumer goods, then you should focus on acquisition and retention as well. So both these are two wings of the same bird. You need both of them to fly. So when it comes to customer retention, I think the best thing that you should be doing is to make sure that you know why the customers are not coming back to buy again. If you don’t know the why, you don’t know the root cause, then you are again throwing spaghetti on the wall to see what sticks. So in order to do so, we get back to this type of research and making sure that you nail three things which are mandatory in my vision around customer value optimization. So acquisition and retention are part of this customer value optimization, which means you have three pillars. You have what you sell, which are the products. No products, no sale. No good products, no returning customers. The second pillar is what you say, which is the marketing, how you position your brand against the competitors. Because let’s be honest, the same products can be found on many other stores, on many other providers, but it’s how you promise. You make the unique value proposition on what you’re selling. And the third thing is what you do, which is the customer experience, the entire customer experience, which means no amount of marketing will fix a broken product or a broken customer journey. So we have this behaviour as human beings that we freaking tend to avoid bad experiences for the second time. So that means-

Jeff Tomlin: We do.

Valentin Radu: … you can’t expect customers to come back.

AB Testing & Feedback Loops Improve Conversion & Retention.

Jeff Tomlin: Nice. So I want to talk a little bit about Omniconvert. So you built that to bridge the gap between acquisition and retention. So I wouldn’t mind hearing a story as well about seeing it in practice, a use case of how somebody would use it and what the impact is.

Valentin Radu: Yeah, so a first thing that we have is the AB testing part. So it’s captain obvious here. There are few chances that you’ve nailed your website amazing. Yeah, it’s the best converting website that you could ever craft. So that means you need to change your website in order to improve the conversion rate. So for that, you need AB testing, and we have this solution, which is doing AB testing. We generate anywhere from 10 to 25% more revenue per user with AB testing after six months. And that’s a guarantee. So basically we do this over and over again because it’s a numbers game. Of course, if your website is converting amazingly, we will be able to see that. But our technology to do AB testing, to do surveys and to understand what’s going on on your website works amazingly, especially, when it’s doubled by a CRO agency that knows their game. So we have a pretty good amount of partners, which are using our technology to improve the conversion rate. And we also serve some of our customers, especially here in Europe, directly through our services. Another use case for our technology is customer experience. So we’ve built the customer experience solution to get feedback from the customers pre-delivery and post-delivery, which means if you don’t know why your customers are not coming back, and if you don’t treat their objections as fast as you can, then you are leaving money on the table. So that means our technology is being put to use in order to get the feedback pulse from the customers. And that means you close the loop. In order to grow any company, what do you do? You get money, you acquire customers, and hopefully they are coming back. But if you have enough money, you acquire customers, you get feedback from them, you fix what’s broken, you bring the products that they want, then the retention happens. That’s how you are getting profitable with the second flywheel, which is based on customer feedback. So that’s another use case of our technology.

AI Helps Analyze Bulk Customer Feedback & Prioritize Issues.

Jeff Tomlin: It’s amazing. You’re pretty bullish about the future implications and uses of AI when it comes to data and insights, analytics. So what are some of the things that you see people starting to use now that we can use, and what do you see in the future when it comes to the use of AI?

Valentin Radu: Yeah, so one thing which AI is pretty good at is to classify things. So it’s to extract the essence from a bulk amount of text, which means the chat transcripts, the feedback on Google Maps, the feedback on NPS, any open answer can be crunched through AI, and that’s something that we also do, in order to understand what are the issues. So you can’t fix everything at once. What you can do though, is to extract the feedback from your detractors through the NPS. So you ask customers, “What are the chances that you recommend us from zero to 10?” The ones from zero to six are the detractors. And then you find out the main issues, because again, I have this in my brain after reading Andre Agassi’s biography. He started to win, man, when he started to stop going for the balls that were impossible altogether. So basically you need to play on your strengths. You need to focus on the right battles because you can’t fight all the battles at once. And that means with this type of AI driven issue detection from the customer feedback, then you can fix exactly what’s broken. And that means that’s like an investment. It has a compound effect because if you find out, hey, those products are crappy, or you give me the wrong size or whatever, then you can investigate that and you can fix it. That’s a use of AI.

Focus on CLV & Customer Research to Improve Customer Lifetime Value.

Jeff Tomlin: I couldn’t agree more. I can’t tell you how much time that I’ve saved now interpreting data by using AI to dump a whole bunch of information in and give me the summary and the results and distill it so that I can actually use it and put it into practice, definitely shouldn’t be underestimated. And I hope most people are thinking of it at least in that way. If you had one or two takeaways that you wanted to leave the audience with, what would they be?

Valentin Radu: Number one, measure and improve your customer lifetime value, because otherwise you are wasting money on ads to acquire customers that never come back. So with the CLV and the customer segmentation, you understand how much you afford to pay and who are your best customers that you can focus on. Number two is customer research, which means at one moment you do in-depth research on your RFM segments, on your best customers to understand why they buy and the ones that are not buying again, why did they stop buying. And then you get ongoing feedback through this customer experience, through the NPS, so that you understand what’s going on so that you fix what’s broken and you treat their objections in real time because it’s not only about collecting feedback, it’s also about fixing things. It’s like in life, who would have thought? It’s about getting feedback from pissed off customers and then picking up the phone, talking with them, fixing their problems, and turning them from detractors to promoters. Because in such an environment where it’s too expensive, customer acquisition cost is through the roof, you have to leverage your existing network of customers. So those two things, if you do these two things, I haven’t talked in vain today.

CLV & Customer Research for Business Growth. 

Jeff Tomlin: Amazing stuff. I think a lot of the time, sometimes when we get together on these shows, we tell some people some things that they haven’t thought of before or they haven’t heard. And then sometimes I think that our job is to talk about things that people already know or have heard of before but are not thinking about and or forgot about, and need to go back to them and put them into practice. So whether you’re doing these things now or you’re not, you might’ve heard of them, but incredibly valuable tips. If people wanted to continue the conversation with you and reach out, how do they connect with you?

Getting in Touch with Valentin Radu 

Valentin Radu: So first of all, I wrote an entire book about all of those things is called the CLV Revolution. You can find it on Amazon. Another way is to find me on LinkedIn, ask me anything. I’m really there. So I grew my company thanks to other smart people. So we need to steal this type of shortcut from one to another in order to grow together. And by the way, Jeff, amazing thing that you’re doing with this podcast. I think we need more and more initiatives so that we can help together in order to grow together.

Jeff Tomlin: Valentine Radu, it’s been amazing talking to you. Thank you so much for taking time out of your very busy day and the end of your day all the way out on the other side of the world. And I hope that you can come back someday and we can do this again and continue the chat.

Valentin Radu: Thanks a lot for having me and all the best from Bucharest.

Conclusion

Jeff Tomlin: Customer-Centric Marketing is the Key to Success. Great talk with Valentin.

One takeaway: Focus on first-party data – things like purchase history and feedback to understand your customers better. You’re going to have more targeted marketing and you’re going to improve customer experiences. Segmentation is also key. I feel like we say this all the time but it really is and there are certainly different ways to segment. By segmenting your audience based on buying behaviour, you can tailor messaging and offerings to drive higher conversion rates and customer lifetime value.

Next, data-driven optimization fuels growth. Here’s how: A/B testing is essential, don’t get lazy and punt on this. Continuously testing variations of your website and marketing materials helps optimize conversion rates and ensure you deliver the most effective message. He boosted conversion rates 60% at one point – that’s huge! Close the feedback loop. Gather customer feedback through surveys and reviews to identify areas to improve and iterate on your product and service offerings. You can never talk to your customers too much!

If you’ve enjoyed Valentin Radu’s episode discussing Data-Driven Customer-Centric Growth keep the conversation going and revisit some of our older episodes from the archives: Check out Episode 718: Escape Founder-Led Sales: How Specialization Can Help Your Agency Grow with Corey Quinn or Episode 714: 10x Your Growth: The Marketing Framework to Attract & Convert More Customers with Solomon Thimothy

Until next time, I’m Jeff Tomlin. Get out there and be awesome!