916: OmniConvert: Turn One-Time Buyers Into Lifetime Customers, Data Driven Growth, And Customer Value Optimization Through Stats and Analytics With Valentin Radu

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Thanks for having me, Robert. And hello everyone. It's nice being here and it is.

Nice having you here. It's always nice to get like a fresh perspective on things and to speak with someone who is innovating, pioneering and who is like an expert in what they do. So you are big on improving customer lifetime value on this thing called a cvo. So what the heck is a CVO and what is OmniConvert all about?

Yeah, CVO means customer value optimization. We are coming after a few decades of acquisition marketing. But a acquiring customers that never come back is not an option anymore nowadays when it's so expensive to acquire customers. So what we've done was to, let's say, craft a methodology where the customer journey is like the website funnel, right? And you can improve all the parts within the customer journey. And for that there is this methodology aiming to improve the customer lifetime value because this balance between how much you pay to acquire customers and how much you get down the line from that customer, the ratio between customer lifetime value and customer acquisition cost. So we've nailed this methodology around CVO and we've built a technology that's empowering retailers and brands to improve customer lifetime value by segmenting the customers, finding out why they are pissed off through the NPS automating stuff on the background. Like if you have a, a very important customer that is pissed off, you should do something about it, right? So that's what CVO is and that's who we are.

And you know what you just said there is I, when I heard that, I heard something similar years ago and it was so simple that it blew my mind. You'd said something like, well, it costs this amount to acquire a customer and then you get this amount back from that customer. And that's like one of the simplest ideas. But so few people think in those terms. And when you start thinking in those ways, it's like you're, you're growing money, you're multiplying. And then you're saying that the way to accomplish this is to find people, get people in your funnel and then sort of like sort them out. And you said, figure out why they're pissed off, what pisses them off, and then how to speak to that and how to kind of solve their solution. And you say you do this with technology. So what is the technology that does it and what does that involve?

Yeah, so the technology is called OmniConvert Reveal. What we do is to get the data from the E commerce platform or from whatever data source and then to cluster the customers according to their rfm. So RFM stands for recency, frequency and monetary value, meaning you rate customers according to how recently they've bought, how frequently, and what's their lifetime value. Knowing that allows you to get the ones that you want. And to understand, you know what, our best loyal customers that are generating most of our margin are buying this product, product C or D or whatever. And let's improve the bids for product CD&E and let's prioritize them in our, on our website. And then thanks to this type of clustering method, you will be able to automate acquisition, onboarding and retention. So it's all a matter of, let's say, focusing on the customers that matter and the products that matter.

I like that a lot. And seems like a lot of fun to solve that problem of saying, I've been, you know, buying the traffic, putting out the content. I have all these customers, customers. But then where do I begin? And you're saying that you sort them and you said that there's the, the rfm, right. There's the, the recency, the frequency and the monetary value of them. And so when you look at that, do you like, look at all the recency and all the frequency and all the monetary, or do you like, combine them and have some kind of like, weighting and multiplying? Like what does the, the screen look like? How do you figure out that top, you know, 2% or whatever of your customer list?

Yes. So the, the combinations between the recency, frequency and monetary leads you to having this type of soulmates, as we call them. Soulmates are your golden goose customers. Yeah, the ones that have the highest recency. So they bought in the last, let's say you, you are a brand and you sell coffee, right? So if you, if the purchase frequency to buy coffee is every two weeks, then the customers that bought coffee in the last two weeks are the best in terms of recency. But if you also look at which are the customers that bought, let's say 10 times on our company, then you'll have highest recency, highest frequency. And if you also look which are the customers that bought, let's say, four, four hundred dollars worth of coffee, then you end up having the soulmates. Yeah. And then you have ex lovers, like customers that used to be good because they have the lowest recency, but the highest frequency and the highest monetary value. So this type of combinations allows you, A, to understand who are your best customers and what they are buying, and, and B, to come up with a strategy to personalize the message according to how far they are from buying from you again and how valuable they are.

I like the way you think. And it seems like your logic is to create these different views basically, right? Because you said earlier that maybe different things piss them off or different problems to be solved. But then you can also configure the data like there's your soulmates, there's the ones that are buying right now, and then there's like those ex lovers, right? The ones that maybe they're, they have the high monetary value, but the low recency and low frequency. So it's fun to kind of abstract this and go from just having a big mess, a big C, a big list of all these customers. And you say, well, here are these different clusters, as you've called them and said they're all very similar and it's not my whole list, but there's this one cluster and they all are similar in the way they feel and what their problems are and the way that I can then solve their problem, as you said earlier, automate the onboarding and all sorts of things like that. And so this all sounds good in theory, but I'm sure that there are a lot of ways to go wrong, right? Either with not using Omni converter. If they do, there's that problem of maybe not using it or using incorrectly. So what sorts of mistakes or pitfalls do you see people making when they're solving this customer value optimization problem?

Yes, Robert, that's a great question. So the first problem that the companies are doing is that they are not monitoring the customer lifetime value by RFM segment. So they look at the average and you know, the problem with the average is. Is misleading. Right. So we are now in Romania There are minus 10 degrees outside. Yeah, 10 degrees Celsius. So maybe if you look at the average, our Average temperature is 20 degrees throughout the entire year, but now there are minus 10. In the summer there are 40 degrees. So that's with the customer lifetime value as well. You can be misled by the averages, but when you look at the lifetime value by the RFM segments and when you start to identify what was wrong in the past, then you will be able to fix things. The problem is that customer research is deprioritized by marketers because they are very action driven. Right? Marketers are around about let's do this, let's do that campaign, let's do the other campaign. But planning is very important. Researching, identifying, diagnosing is very important. Is this in this customer value optimization endeavor, knowing which are the products that make your best customers, who they are, knowing what caused them to buy again, knowing what stopped the other ones to buy will make your agenda. So you can't start to optimize and to throw campaigns and discounts. Because lifetime value, the go to strategy mostly is let's bribe them with some discounts or let's do a loyalty program for them. Usually those are the two tactics that marketers are applying in order to improve customer lifetime value. But the first one is hey, fix was broken and then you will see the results.

I like that a lot. So don't rely on the averages and do your like understand what the problem is. And don't just go, don't just go for these, go to lazy marketing techniques like a discount instead look at where they're pissed off, what's broken and what you can fix for them. And it seems something that's kind of messed with my brain over the years is when everyone talks about automation especially there's, there's that thinking of, well, if it's all automated, then why do I have to be so obsessed with the data, right? Why do I have to keep checking it and looking at it and it messes with my brain? Because I think, well, wasn't the point of it being automated that it all runs itself. But then as you know, you set it up and you stop looking at it and it will fall apart. So, so what do you have to say about that? And how do you reconcile that mentally where you, you know, create these campaigns, you create this automation, but then you still have to kind of be obsessed with it and recheck it. How do you get your head around that?

Yeah, that's, that's great. So Robert the, the truth is that we're far from putting everything on autopilot and going to the beach, all of us. So we, we have to automate the data collection. We can sort out the data hygiene. But when we launch these campaigns, the consumer behavior is changing. So what we should change and we should. That's, that's a thing that not chat GPT is not gonna solve is the creative part of it. So what's causing the customers to behave in a certain manner that should be overviewed. Right. So we, we should be supervising monitor our automation campaign because of course you have these three pillars of customer value optimization. What you say, which is marketing and offer and whatever what you sell, which is the product itself and what you do, which is the customer experience. You can automate the data collection around these things, but fixing things like the attitude of the person that was pissed off at the phone and she didn't follow up with that customer, you should be monitoring it. So basically that's how, how, how this should be should be treated. You can't just leave it be. You need to monitor and you can, you need this ongoing optimization. You need to continue to tw the things that must be tweaked.

And so I imagine that when setting up these and kind of getting the bugs worked out that there are a lot of simple mistakes that can be corrected. Like even you mentioned there about just having a customer on a path and not having something in place to call them back. So is that what you see a lot in your experience? Just like people set up these funnels and it looks all beautiful, but then there's just simple mistakes that can be fixed like simple bottlenecks and just simple tweaks that can take a broken funnel into something better.

Yeah. So. Well, usually the, the, the marketers that are the best in, in this field are, are the ones which are let's say respecting the, the, the holy trinity. Often of, of the acquisition. Yeah. You need the right message, you need the, the, the right target and you need the right offer meaning also the product. But it's, it's all a matter of tweaking these type of things. And the, the creative part, it's, it's as important and it will be important because it's all about the, the emotions that you generate without you with your creative and your, your products. And if you don't let's say follow the struggles and the struggles are changing. Right? People are changing. We've seen big companies that we thought that they are not going to fall. Like I don't know, Blockbuster, Kodak, whatever, Thomas Cook. We've seen big companies falling, and that was because they've, they haven't listened. They've used their mouth more than their ears. Yeah. They stopped listening to the customers. They stopped analyzing, putting their customers at the microscope and analyzing their, their consumer behavior. So that's going to be, I think, more that's going to stay here. That's here to stay. This constant feedback loop from your customers so that you can adjust everything that you sell. Right. Maybe you should be changing your products altogether, but your customers will say that.

Yeah. And I think that's huge, that customer feedback loop. So that way you're not just stuck in the present or the past that you can kind of, kind of, you know, fish before you're hungry and be working on the future before it gets here. And you mentioned Kodak and Blockbuster. I mean, they had no reason to change for so long until it was too late. And guys like you and me trying to explain to a young person these days that when you took a picture and you had to take your film in and get it developed, or when you wanted a movie, you couldn't just click a button. You had to go in and get it and they might not have it and you had to have it back by a certain day. And if you didn't rewind your tape, which kids don't even know, but if you didn't rewind it, you get charged even more. So like they built something up that worked in the, in the moment for that time period, but then as time went on, it's clear that they, they were not participating in that customer feedback loop. Not innovating, not. Not changing with the times. And that's a scary place to be. And it's like, I can imagine that it's easy to, to just be stuck in your ways for a while until it's too late. And you say, I wish five years ago I had taken my customer lifetime value more seriously. I wish I looked at that customer feedback loop. And so stories are always fun, right, Valentin? And we mentioned at the beginning that you work with all these different companies and it's always fun to, to hear about a company that maybe was doing okay but not great and needed Omni Convert and things are maybe kind of a mess. And they found OmniConvert and they changed a few things and it had really great results for them. So do you have any fun stories about any company that really needed OmniConvert and they didn't know for so long and they discovered you and things you're really great after. They keep in contact.

Yeah, of course. So there is a company from, from the US selling clothes. And they came because they, they, they had a lot of, a lot of customers. Rockstar Original. So they were selling all sorts of clothing, urban clothing and whatever. And the fun part in it is that we were, they were really bullish on discounting, on getting customers to buy again into this, this loop. And we were of course really bullish into realizing why they are coming back or why they are not coming back. So we've implemented the nps. And the NPS is of course letting you know how much, how many of your customers are willing to recommend you. So they had a lot of detractors. And looking at their responses, we've identified that customers were getting the wrong size. So it's crazy to think that someone is going to buy shoes or jeans from a company which hasn't delivered the right sizes. Right. So by doing this in depth analysis, we've realized that there is this problem. But the funny thing is that when we do optimization, when we do this type of research with the nps, we're not looking only at the nps. We look at the NPS by employee, by category, by location and whatever. And guess what, Robert? We've realized that two of their employees were basically drunk during the night. So basically we've realized that their NPS was negative and that, that when they've investigated, those people were having a great night, night shift, you know, so they were simply having fun while they were packing up the, the goods. So those type of things can be identified if you close the feedback loop with your customers. Because even your employees would, could not be the right fit and they are, let's say, destroying the relationship with problems.

Interesting. So there are all kinds of problems that can be solved or all sorts of conclusions that you can get to the bottom of when you, when you look at this raw data from where the problem is and what's happening. And so why should people use OmniConvert? Can you tell us if someone says, you know, I have some of these problems, I know I need a funnel, I know that I need to be working on my customer value optimization. I need to solve some of these problems. I need OmniConvert. Where do they go, what do they do and how do they sign up?

Yes. So we have a one month trial which is eye opening because they realize, you know, I don't know, 20% of my customers are generating 50% of my margin and they are buying this product Then I never knew that. So they sign up on Shopify. We have OmniConvert reveal. You can find it on Shopify or you can go to omniconvert.com you have this one month trial and our product is empowering them to monitor customer experience and to fix their business model. To to be honest now e commerce is a, is a battlefield, is not long while it used to. The good days are over. So you need to do this type of advanced things if you want to differentiate and you have to leverage your, your customers because again, it's too expensive to acquire customers that never come back.

That's great. It's almost like the wild west once existed, but then when the area was built up, then you had to play by different rules and employ different tactics. And so now that it used to be the Internet, you could slap up a webpage, slap up some e commerce. But then now with things being more competitive, more advanced, more fast paced, it's time to use the tools that you need to use. So it's time to go to omniconvert.com and claim that one month trial that is O M N I C O N V E-R-T.com and so Valentin, as we're getting to these last couple of minutes in our conversation, do you think there's anything you feel like we left out you want to sneak in in our discussion or any final parting words or advice to tell people?

Yeah. So what I have to say, Robert, is that I'm writing a book. So I've been an e commerce entrepreneur. I'm in this rodeo for 16 years now. So I've learned a lot about e commerce. I've been working closely with e commerce companies and all this knowledge I've condensed in a book that I'm writing for one year and a month now. I'm launching it in April. So you can go to omniconvert.com you can get the first chapter for free. So if you want to level up your e commerce game, take a look at what, what I have to say out there because I've learned a lot about, from, about e commerce and retail from the big guys and I've worked with them. And now it's time to democratize these things because unfortunately, the media companies and all these e commerce gurus are tricking entrepreneurs and e commerce people into believing that it's all about spending more money on ads, which is not. So it's all about squeezing, getting more from your customers so that you can reinforce the acquisition loop.

I love it. It's tempting to say I just need more customers, I need to go out and get more. But you already have these, these core customers that need more and want more from you. And you can get more money from it. You can help them in all sorts of ways. So why make it more difficult on yourself? Why dump all this money into ads that might be a six or 12 month process just to break even? Instead, you know, give more value and get more value from your customers. And the tool and the place to do that is omniconvert.com where you can also get that very first chapter of an excellent upcoming book. So Valentin Radu from OmniConvert.com Go there right now, sign up for their free trial. We'll see you there. And thank you Valentin for showing up and giving us all sorts of insights from your experiences and lots of cool ideas. I appreciate it very much.

Thanks as well, Robert. And all the best from Bucharest, everyone.

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