Elevating E-Commerce: Valentin Radu's Blueprint for Customer Value Optimization and Future Insights

Welcome to youo Brand Amplified, the podcast where we interview marketers, publicists and brands to learn their stories, what makes them tick, and tips and tricks that make a difference. What I love about this crazy world that we live in now where we have a global economy and we can podcast and meet people virtually, is that I am today from Los Angeles connecting with Valentin Rudu from Bucharest, Romania. And I am so honored to have you on the show. So thank you so much for giving some time to me today.

Thank you as well for having me. It's amazing that we can do this. Indeed. Anika.

Yes. I love your background. I think you're such an inspiration and you've achieved so much. So to introduce yourself, I'd love for you to talk through a little bit about your backstory. But before we get into all of the amazing things that you do today for companies.

Yes. So mainly indeed it feels like I lived into a movie. So I'm coming from Bucharest, Romania. The first 10 years I was in an ex communist country, but at that moment I had a completely different version of reality. And then I've struggled as an ex poor kid that I am right now, I've struggled to get out of poverty. So I made a lot of jobs. Like I've been a butcher, I've sold insurance, I've made the companies, I've built four companies. In the meantime I had 17 jobs. So basically it all ended up right now where I'm playing in the E commerce and digital arena and I'm providing technology and end to end solutions for companies willing to improve their conversion rates and customer lifetime value.

And what does that mean to you? Customer lifetime value? And you also have coined a term, cvo.

Yeah, five years ago I realized that this is going to become a market in itself, like the market of services and solutions to improve customer lifetime value in retail and E commerce. So that's why I've coined this term customer value optimization or cvo. And mainly it's the process, the conscious process that companies are getting through in order to improve the customer lifetime value. So basically it's a set of, it's like a process, it's like a new methodology to understand your customers, to understand what keeps them them from buying again and again and fixing what's broken throughout the entire customer journey.

And what was the thing that led you to discover this methodology? Because I will be honest, you know, I work in marketing day to day. I also teach for a master's program in digital media management. And a lot of what we talk about is finding all your stakeholders, drilling that down to your ideal audience, then to your customers and all the different techniques that people use. But people sometimes get lost in the platforms, right? Choosing the right platform, or the platforms are changing, or the privacy laws are changing, or how do we make sure that we're delivering and finding the right customers in the first place before we even understand how to create repeat business from them.

Yeah. So this process, it wasn't like boom, I had an epiphany and it was like, now that is going to work. So it all started by me talking with one of our customers and realizing that they've reached a plateau in our conversion rate optimization process. So basically initially we were selling only conversion rate optimization software, so like a B testing CRO survey tool. And by looking at their data, we realized that their conversion rate was stuck. But a B testing meant only that they were changing their website for a particular subset of customers. But they couldn't personalize their website because they had no idea who their customers were. And we've started to do this in depth analysis of their database of customers. And we applied the methodology called RFM recency, frequency and monetary value up until the moment when we realized, you know what, they have amazingly incredibly profitable customers and they have not so profitable customers. So we've made the segmentation and we realized what it's a fantastic difference. The difference was like one single VIP customer, which now we call Soulmate. Like the best customers out there made 200 times more margin than their type of customers, which were the less profitable. And after this realization, they've said, you know what, we have to do something about it. So, and that something was that they started to look to do this customer research to look at the products that they were selling. And instead of throwing more money on ad spend, they've started to throw more money at customer research, analyzing the best performing products, looking at things like what kind of emails are we sending for customers which just started to buy from us versus the customers that bought from us multiple times. So with this, we've managed to improve their lifetime value by 30%. And customer lifetime value means at the end of the day profitability per customer. So improving the lifetime value leads to improving the entire profit of the customer of the company. So that's how it started. And after that we made a lot of things happen. So we changed our offering. We've started to provide this type of services, we improved our technology to, to add this segmentation automatically. We connected our software with Shopify, we've started to get dozens and then Hundreds of customers. And nowadays we are at the forefront of this new revolution, as I call it in, because I also wrote a book about it. After realizing that this process works, I wrote a book called the CLV Revolution.

Yeah. And that's fantastic. I think to your point, not enough people do that research to make sure that they're really targeting the right messages to the right customer at the right time. But the fact that you were able to improve the process so much and expand because it's easier to keep a customer than it is to get a new customer. Right. But a lot of people think, okay, I just throw more ad dollars out and they'll come. But I love that you're saying no, actually spend more time on the research, the segmentation, the data, the. And then you'll be able to improve and not waste money.

That's correct. It's like you've made. When you have a company and big companies think that if they had their offline world going on very well, they just throwing an E Commerce is going to mean that they have product market fit, which they don't. So when you have an E Commerce is like you've made an mvp, a minimum viable product and you need to tweak it. So the customer journey in itself is like a Frankenstein for many organizations out there because what they end up doing is that they want more money so they get more tools, they made a lot of different business processes and then they force them into the customer journey, which is not being consciously created and optimized. And our vision is to flip it, you know, to flip the entire situation and to look at the customer journey, to look at who are our best customers, how can we serve them better and then what kind of processes and tools and methodologies should we be using in order to help our customers make progress? Because that's why we exist, right? To serve the customers.

Yeah, yeah. And often I think we get stuck in what tools do we need first before we look at what's actually going to be useful for the customer. There's so many different ad tech and martech and different systems out there. It can be really hard to navigate. And I think often as entrepreneurs and service providers, we will look at what somebody else is doing. It's working for them, but it might not work for our customer base. So you're really taking it back a step. And all this information is within the book that you released. And then you also have an academy.

Yeah, it's called the CVO academy. So basically I teamed up with a lot of smarter people than I am. It's actually my, let's say growth hack, you know, my life hack is to team up with smarter people than I am. And mainly we built this academy which is a place where people are getting knowledge around how to improve customer lifetime value. And we have their Bob Nesta, which is the pioneer of jobs to be done methodology to unveil what the customer is struggling with in order to buy the products that we're selling. We teamed up with a lot of well known people in this space and now we have more than 1,500 students at our online academy.

Fantastic. Do you also work with clients? One on one? So you have your client base, right? And then you have your academy, you have your book. So what kind of clients are you working with on one, on one basis? Are they mostly within, you know, Europe? Are they all over the world?

Yeah, they are all over the world mainly. And we have this consulting arm, let's say we have like 20 people which are working for big organizations to help them with this type of CRO and CVO processes. And we realized that we need to team up with more agencies. So basically at this moment we are training other agencies, we are helping them generate more business so that they end up being more, let's say having a more comprehensive offering. Because now we do have, I call it the old E commerce world, for instance, where you got very specialized agencies, ppc, SEO, email marketing, social media. But nowadays you can't have silos, you can't have specialized agencies for everything. You need to connect the dots. And in order to connect the dots, that means you have to have this type of unified approach to optimize the customer journey and to have a data driven and customer centric approach. Which means those agencies that are at the forefront of this transformation, they are the ones which are becoming, if they have email marketing, they also add the knowledge of, let's say data. Right? So how can I use the data to run email campaigns but to be aligned with what the ad team is doing. So basically that's what we are doing right now.

What you said is something I preach every day is that you know, you can't have silos, you have to be integrated because all of the touch points in the customer journey and thinking about how you're best serving the customer so they can trust you no matter where they're seeing you. If they're seeing you in an ad or in your email or on your website or in your social media.

That's right. That's what we're preaching as well, so it looks like that's why the universe attracted us together, Anika.

Exactly. I'd love to hear when you were realizing that you needed to add these other methodologies in to best serve your customers when you moved into this business. Because like you said, you've done a lot of different things, right? Insurance, being a butcher, you've been an entrepreneur and you've had this, I want to say, scrappy passion to serve and to do better for yourself and for your family and for others, obviously by what you're now putting in and figuring out better ways to help them serve their customers. What was it like when you moved into this field of E commerce and you were trying to get your first customers? What were some of the techniques that you used that then you started incorporating in for. To use for them?

Yeah, so one thing is the fundamental under promise and over deliver. So basically when you are broadcasting, when you are putting the message out in the world, you need to make sure that you have a voice and that voice should be bringing value, enough value. Right. If you don't provide the value that you're after, you can't expect to get it back. Right. So you need to be the first to provide it. So what I applied is to be genuinely interested on the progress that they were trying to do my clients, you know, initially what they were trying to achieve. Because I've been an E commerce entrepreneur myself and I've been looking out of the struggle. I've built OmniConvert because we were spending way too much money on paid ads and we weren't being profitable. So we said, what kind of thing would we do despite optimizing the ad campaigns. And we were saying, yeah, the landing pages and the website. And then how can we improve the website? Let's look at the customers. So mainly it all starts with listening more than speaking. Right. So basically that's another principle that I'm using to seek first to understand and then to be understood. Like the good old principle from Stephen Covey. Right. So mainly these kind of things help you down the line. And everything I do right now is based on this type of principles because if you respect the laws of nature, you can't fail.

Love that. And what does it look like today? You have all these different parts of your business. You're helping other agencies learn how to use your techniques. I imagine you're very busy. How do you create some balance? If you have balance, what does that look like for you?

Basically what I'm doing is I'm surrounded by very, very smart People which I empower and I'm getting myself out of their way. That's what I do. So that's my trick. And that's why I can spend time right now with you. And that's why I can evangelize the concept of customer value optimization. Yeah.

What are some other things people need to think about when they're thinking about their ideal customer? Cause I imagine you have companies that you work with in all growth stages. Some people might be just starting out with their business. Some people have, like you said, hit a roadblock where they've reached the plateau and they can't get anymore. So are there certain techniques, especially if somebody's coming in, brand new company, doesn't have financing, doesn't have big budgets, but are there things that they can implement now through your techniques that can help them get to a growth stage where then they can look at hiring a company such as your own?

Mm, yeah. So one aspect that I think it's important, Annika, is to understand why you are in existence, what's your purpose, and in order to do so, you need to do this type of self observation as an individual and as a company. So once you know who you are and who are you serving, then you will be able to unveil the ideal customer profile. Let's say what the world is right now doing is we are being baked into the ad network. So basically we look at things like ad campaigns, which needs to have a target, age, gender, whatever. So basically instead of looking at what people are buying when they are buying the products that we're selling, instead of looking at, not at the fictional characters that we paint in our minds.

Right.

Which we call buyer Personas, you should be going out there and talking with actual customers, with our best customers. Because our approach is first you segment your customers into your best ones, so very whatever. And then you go there at your best customers that bought recently, bought the most frequently, and have the highest lifetime value. And then you speak with them and you unveil what kind of struggles led them to buy your products and why they keep on buying them. And then with their own messages, you can craft your messaging, you can craft your email campaigns, you can craft your ad campaigns. So the difference between the buyer Persona approach and the ideal customer profile, it's huge. Because at some point the profile of your ideal customers could be just not what age do they have, what's their gender or where they live? Maybe your ICP are, I don't know, moms which are looking to get back from their job, from Their a maternity leave to a job. And that's your ideal customer profile. So there are moms which are in their 20s or in their 40s or in their 40s. So you need to find out the context. And when you advertise or when you put your message out there, you should be talking about the context that leads to the need of your, I don't know, motivational courses or depending on what you're selling, you need to understand the context that the customers are and what they are struggling with. And that means you have to do this type of customer research even though you are a startup, you are an established business or whatever. So no matter what you're selling, you can't, let's say we have a saying here in Romania, you can't sleep on. Put your eggs in the same basket.

Oh yeah, yeah.

In a single basket, right?

Yeah. No, yeah. Don't count your chickens before they hatch. Another right. So it's interesting because we always usually do start with that. Who's our ideal customer? Who do we think of as our customer Persona? And you put the name on it and like you said, you put all of the demographic information and maybe you put some psychographic overlay, but it's all based on what you.

Assumptions.

Yeah, it's all based on assumptions. So then you're saying test the assumptions, get the data from them, ask the questions, do the surveying and then you're able to use that language to find even more customers because you're using the language of your ideal customer who's actually the person who's buying.

That's right, Exactly.

Yeah. Fantastic. What does it look like in the academy? The CVO academy? So is it online videos and worksheets, Are there any seminars, like live seminars?

So there are 20 hours of content that people will get at their own pace. We have these nine instructors. There are homeworks after each of the lessons. Not very hard homework, let's say. And we also have like 12 tools that we are sharing with the students so that they can be on their way once after they finish the course.

Nice.

And we have a free version and we also have this advanced version as well. But we have like a two hours course which is completely free for anyone that want to get the basics of customer lifetime value or customer consumer behavior is fantastic.

Yeah. And I know that I believe that we're going to have an offer for my listeners as well for the full academy. So we'll link that in the show notes for them to be able to get a little discount on going through the Academy. I think I just feel like this is something that, to your point, so many people don't spend the time investing in. And even after being in marketing for longer than I care to admit, it's always changing. Right. And I also think that most of us, and when you start your entrepreneurship journey and you start thinking about how you're going to get your messaging out there, sometimes we just dive all in rather than taking the time to develop things. And I now have this approach of. Or my personal thought is take more time to develop appropriately and test and do everything you need to do. Because if you have that stronger foundation, then everything else is going to be a lot easier rather than just jumping into something and then five, six months or years later you're like, oh gosh, this isn't working. What do I do now?

Yeah, I think you have IKEA over there, right? Or you don't here in Europe.

Yeah, we do.

It's like it's better when you look at the instructions on how to assemble. And marketing and E commerce is moving so fast that the academic environment, the established academic environment can't keep by the pace with what happens in the real world. And that's why we launched the Academy for professionals and practitioners to actually apply these kind of things because they have campaigns to run, targets to hit, and so on.

Definitely. So what are the four types of CVO campaigns?

Yeah, so according to the customer journey, Anika, we have this, let's say, moments throughout the customer journey. Initially you have strangers that you want to turn into visitors and then into customers. Right. So the first are the acquisition campaigns. But if you think about the acquisition campaigns, those can be built with the end in mind, which means you can do CVO acquisition campaigns or you can do simple acquisition campaigns. And what do I mean by CVO acquisition campaigns? I mean you do these acquisition campaigns by tracking things like lifetime value versus customer acquisition cost and to them validating the messages and seeing, let's say, what needs to be fixed based on the feedback of the customers you just acquired. Which means you continuously make progress and optimize your campaigns based on the feedback of your newly acquired customers. So the first type of CBO campaigns are the acquisition ones. After you turned your customer into a first time buyer, what you need to do is to onboard them. So I was having a podcast just yesterday with Dana Ariely, the author at Misbelief and predictably irrational. So the consumer behavior expert, and he was telling that he once bought a chocolate which has instructions on how to be eaten. Right. So how to eat this type of chocolate. So basically the onboarding means that when you're selling a product, you're selling the future value of yourself with that product and you have a desired outcome in your head, in your mind, but you don't have the product in your hands. And that's why you need to verify throughout the onboarding that customers know how to get the value out of your product. So your onboarding campaigns are the ones when you are nurturing the relationship with the customers, making sure that they are extracting this value from your products so that they come back to buy again and recommend you further. And then once they are onboarded, so few are the not all of them. So basically 23%, that's the average from our more than 3,000 websites where we have data on more than 77% of the customers will not buy again. So 23% will buy again. And you want to increase this number from 23 to 30, 40, whatever, right? So the chance to place the next order, the chances to place the next order are increasing Once you do your own onboarding campaigns properly, once they buy, let's they get into the habit of buying, let's say you buy the same yogurt, right? You, you buy the same, let's say brand of cheese or whatever you are buying, you get into the habit of, into the buying habit of a certain product or from a certain brand or from a certain store. But once they get into these habits, you can say that the onboarding campaign is finished, right? So the onboarding phase is finished and you need to do the prevention campaigns, right? The ones which are focusing on not losing customers that are in the habit. You already and there what you want to do is to make sure that the customer experiences properly, you have the same quality in terms of the product you're delivering on your promise and so on. So here it's more like not blue this up because you've managed to do like this type of system where you have customers that keep on buying from you. And the last type of CVO campaigns are the reactivation campaigns. So once the customers are churning, so they get into the danger zone, you need to reactivate them and for them you need to do all sorts of things. For instance, in my book I have a great technique is like the Troy and Horse as I call it. So instead of bribing them with the discount to come back, you can persuade them to answer a survey, find out what kept them from buying again and prepare an objection treatment, landing page or offer for them. Because if the Price was the problem or the delivery or the quality of the product or the whatever, then you can fix exactly what's broken in that relationship. Because any company has thousands of relationships with all sorts of customers.

I love that because instead of just sending out a blanket offer that they may or may not respond to, you're really finding out what their pain points are and how you can make it better.

And that's Right.

Increases the trust. Right. And that emotional connection that they'll have because they think that, oh, this brand actually cares about me, they're invested in my relationship.

Yeah. And one aspect here, throughout the entire customer journey, what you want to do is there's a way to. Is this gathering of the customer feedback. Right. So voice of customer is. It's still underappreciated or undervalued method to understand what your strategy should be like. Because if you don't hear your customers, if you don't know what they are after, if you don't know what's broken in your customer journey, then you will, I don't know, bark to the wrong tree. Let's say, for instance, there are three pillars of customer value optimization. What you say, which is marketing, what you do, which is customer experience, and what you sell, which is the product. Right. So each of those three pillars should be in a good standing position to have the fundamentals of customer value set up. Yeah.

Fantastic. I wanted to ask also about AI and many companies have been, are saying, well, we've been using AI for years. You know, companies who are really into content marketing, for instance, machine learning. But then this year, of course, everybody in the world discovered AI or that it's been this, that it, it really is here and exists and it is doing different things. And I've had people who are journalists perhaps be a little more weary because their jobs are being taken away. But then marketers, obviously we see it as a tool we can really utilize to do more and to do better. And so I'd love to hear how your experience with AI, how you see it affecting the business of retail and E commerce moving into the future or even now.

Yeah. So the AI in E commerce, it's a real thing and there are multiple use cases that will pop up. So my personal opinion is that websites will not exist in the future because they are, they will become obsolete. I mean, imagine that you, in order to buy something, you know, you need to use your fingers to type in things, to go on a website, to analyze it. So it's a lot of friction. And basically people are creatures of let's say that are lazy, they are investing the least effort to do the things that they are doing. So it's clear that I don't know, voice commands or even neuralink or whatever will be the technologies of the future. So that's how I see it in going 10, 20, 30 years from now. So this type of interfaces will become at some point pretty gone, right? But going nowadays the use case that we are also after our NLP like doing we do nps, we collect net promoter score and people are saying what's wrong in their experience. And when you have hundreds or thousands of responses, you might want to analyze the issues that you have and treat them or to cluster them. For instance, our technology right now is allowing E commerce retailers and omnichannel retailers to see what's wrong with in different cities or for different categories because they can grab this type of customer feedback and analyze it customer experience by brand category, even role. So basically you can use NLP to send you this type of these are the issues and you can then use another AI model to identify the main insights or the main actionable things for you. Because if your customer experience is I don't know, 25% lower in a city than it's on the average and that city is responsible for I don't know, 18% of your sales, a model could emphasize that if you increase the NPS by this, you could make this kind of money. And that can be a suggestion for the retail leader. So basically that's how I'm seeing right now AI being used. And there are plenty of other things like setting up automatic goals, making sure that you have the right product, analyzing the demand data or the website data, not only your internal data to see where the market is going. And there are plethora of use cases for AI which I see unfolding in the next years. And I also see that let's say there is a tendency to consolidate in E commerce. So mid sized companies are the most endangered right now because they are in between. You know, big companies that have a constant stream of customers. They will be thriving going further if they adopt and if they become agile to the customer demands. And also smaller companies which can afford, you know, the solopreneurs, the, the more agile companies will also be there. But the danger zone is when you are in between. You're not large enough to open up 200 stores across the country and you're not small enough to have only let's say the founding members processing orders and make running campaigns and doing all that Stuff. Yeah.

Awesome. Thank you for that. Is there anything that you really want the audience to know that we haven't covered about the customer journey, about E commerce, about the future of. I mean, I'm really intrigued about the future of websites and what that's going to look like too.

Yeah. I think what needs to be added now that we are around the end of our conversation, Annika, is that the best investment that you can do? If you're hearing this is in yourself. You should be learning more about the passion that you have. If you don't have a passion, find it. If you don't find it, you will be. I don't know, you will not feel complete. I'm now 43 years old. I've been chasing a lot of scenarios, running a lot of experiments. So you have the luxury of experimenting. And in order to experiment, you should be investing in yourself, in your knowledge. I mean, talking now with individuals which are hearing. And congrats for doing this. Congrats for connecting the world with more knowledge, you know, doing this type of service to the audience and the community that you have around you, Annika. And I think that's my last famous words, right? So experiment, learn more, invest in yourself and enjoy the ride because you only have one life to live, so make it an outstanding one.

Oh, Valentin, that's such great advice. I really appreciate you being here and sharing your wisdom and we will put the link to the book and to the Academy in the show notes. And we do have a special offer for the CVO Academy for listeners. And I'm also going to put this in my newsletter and do a little extra promotion because I just think it's so valuable. So thank you for bringing that. We have, I believe, a 50% discount for the Academy. Amazing. I'm really excited. I know that you and I are going to stay in touch. I see all these things. I'm like, okay, I need to talk to you about this and this and this afterwards. And I guess for my audience, one last question, because I always like to ask, do you have a favorite quote or mantra or words of wisdom that you live by? I know you've just shared a few.

But yeah, if I would be selecting the top one right now would be this one. If you change the way you look at things, the things you look at will change. So I think that's a very important thing with our brains, you know, that we have to always change how we look at things and we, we have to always adjust our glasses so that we see the beauty in the world because there is a lot of beauty in the world.

Fantastic. Valentin Radu, thank you so much for being on the show today. Thank you to the audience for coming back for another episode of your brand, Amplified. And I'll be back again in a few days with another amazing expert to help shed light on your business. Want more? Check out amplifywithanica.com or follow me on socials at Amplify with Anika.