LTV: how to calculate customer lifetime value : Customer LTV is one of the most important indicators in marketing, helping to determine the buyer’s interest in the company’s products. It will be useful for anyone who wants to know their profits and understand in which direction the business should develop.

What is LTV, how it can help and how to calculate it – we tell in today’s article.

LTV: what is it

LTV (Lifetime Value) is a metric that reflects the lifetime value of a customer. It shows how much profit the client has brought for the entire time of interaction with the company: from the beginning of the first purchase to the last.

On the Internet, you can find many formulas for calculating LTV, but many of them are quite complex and can take a lot of time to calculate, especially for an unprepared person. For your convenience, consider the simplest option, which is suitable in most cases:

LTV = profit from a client – the cost of attracting and retaining him

What value should be considered good? As such, there is no norm – it all depends on your business. You can rely on the average of other companies in your field.

The final result will be a good benchmark for improving the efficiency of the company. This is especially true for those businesses where customers often make purchases: online stores, food delivery services, and so on.

In addition, LTV will help you understand how much your investment in customer acquisition and retention pays off. If you know the parameters for one client, then they can be easily applied to others. All this will allow you to effectively allocate the budget to attract and retain customers.

Why should count LTV

Above, we considered that LTV is an effective tool that allows you to determine the profit of a company from a particular client.

Along with this, it will help you:

Find loyal customers. You can develop a separate strategy for promoting goods or services for them.
Determine which audience should not be wasted time and money. For example, there are two clients – the first one made a one-time purchase for 100 dollar, and the second one buys goods for 300 dollar every month. On the one hand, the profit from the first client is greater, but after a while the income received from the second buyer will be much higher. Based on this, we can conclude that you need to spend all your energy on an audience that buys goods monthly, and not once.

Understand how much money you need to invest in attracting and retaining customers. Most often, without proper calculations, it is difficult to determine whether it is necessary to reduce or, conversely, increase advertising costs. For example, if LTV = 500 dollars, and expenses are 100 dollars, then you can allow yourself to spend several times more.

Find out which advertising channels bring in more valuable customers. This information should be taken into account when allocating the budget. For example, if LTV from advertising in social networks i.e FB is 300 dollars, and LTV from advertising in search engines is 500 dollars, then it is better to focus on setting up search engine campaigns and other similar tools.

Improve interaction with existing customers. The metric will show you how much more profit a particular buyer can bring. Based on this, it will be easy enough to build an effective strategy for customer retention.

How to increase LTV through email marketing

Newsletters are one of the most convenient tools that allow you to build and maintain relationships with subscribers. The longer a user stays with you, the higher their LTV will become.

At the same time, mailings can increase the average check, the frequency of purchases, and the “lifetime” of the client. Let’s look at a few ways to help you with this.

Method 1: Start a mailing list with recommendations

Users often leave abandoned items in their shopping carts that they forgot to pay for for some reason. You can send a reminder to the customer and convince them to make a purchase. This can be done using recommendations based on user preferences. Such mailing will help not only to get more orders, but also to increase the average bill.

You can also send recommendations after the user has already made a purchase. For example, a customer ordered some of the company’s products on December 8, and the goods will only be shipped on December 12. During this period of time, you can offer a selection of useful products that will be included in the same package. Thus, the client will save on delivery, and you will increase the average check.

Method 2: Sending a Purchase Reminder Email

This method will help you increase the frequency of purchases. It works as follows: you send a newsletter to your customers, in which you tell them that the goods they are interested in are running out. For example, if a user regularly buys children’s products, then the information that these products are running out will definitely stigmatize him. Most likely, he would rather order it so as not to be left with empty pockets.

Another option to increase the check is to offer the client related products. For example, a user bought a phone from you, and for this action you send a newsletter with accessories: covers, chargers, and so on.

Method 3: Customer retention through support

If you want the customer to always stay with you and not leave after the first purchase, you should take care not only about the quality of the product. It is important that the buyer is always satisfied with the purchase of a product or service.

For this you can:

to say that they are always ready to answer questions;
demonstrate how to work with the product using step-by-step instructions;
engage in interaction with the company through social networks.

Conclusions

LTV is the most important indicator in marketing, which allows you to increase the average check, the frequency of purchases and the “lifetime” of the client. To do this, you can use mailing lists, where product recommendations or instructions for improving interaction with the product will be provided. There is no ideal LTV value, it depends on the specifics of the business. However, you can take the average result among similar companies and build a marketing campaign to increase the indicator based on them.

What is color theory and how does it work in marketing : Today we will talk about the theory of color and the peculiarities of the emotional perception of various colors and their combinations. The influence of color on the psyche and behavior of people is used by marketers and designers to select the colors of websites, attract and hold the attention of visitors, convey the mood of the brand, and form a positive attitude towards the product. Properly chosen colors can push users to take a targeted action and help increase conversions.

Color Theory: Basic Concepts

In the theory of color perception, there are several basic concepts:

The most important color parameter is tone or shade , which, in fact, distinguishes one color from another, for example, red from yellow.

Another characteristic is brightness , which is also called “lightness”. It shows the level of difference of a particular color from the basic white and black. For example, light blue has a higher brightness than dark blue.

The intensity of the tone is characterized by saturation – with low saturation, the hue will be close to gray and look dull, while high saturation makes it juicy and bright.

The first known color theory was created by the ancient Greek philosopher Aristotle. In the 18th century, the English physicist and mathematician Isaac Newton made a breakthrough when he discovered, as a result of an experiment with a prism, that light consists of several colors.

This discovery is easily the basis of the color theory known to us today. As a result of experiments, it was determined that red, yellow and blue are the main colors from which all others can be obtained.

Newton created the first version of the color wheel. In the future, the color wheel was refined by other scientists and artists. Color theory in design involves the use of color wheels to determine appropriate color combinations.

Currently, to search for successful color combinations, designers often use the color wheel , created by the Swiss artist, art theorist and educator Johannes Itten, which includes 12 shades.

The study of the influence of colors and their shades on human perception and behavior is called color psychology.

As a result of the study “The Impact of Color on Marketing”, it was proved that, depending on the product category, from 60 to 90% of consumer judgments about a brand are based only on color. Therefore, when creating a new business or rebranding an existing one, as well as when creating advertising, it is necessary to choose the right colors. Color solutions should attract the attention of the target audience, match the product and take into account the peculiarities of people’s perception of a particular color.

The influence of color on consumer behavior

How colors affect a person depends on many factors: the natural environment in which a person was born and raised, his cultural background, life experience, etc.

There are general attitudes that influence the attitude towards color, which are formed through nature, as well as the legends and myths of their culture. For example, the combination of green on the bottom and a blue tint on top, people usually experience a calming effect, as it is reminiscent of the natural arrangement of green grass and blue skies in nature. In any culture, fire burns, and therefore the red tone, as a rule, has an exciting effect on people.

However, each person may have their own perception of color, which is influenced by accumulated personal experience. The impact of color may depend on gender and individual characteristics, character, upbringing or place of residence. For example, people living in cold climates, in an effort to make up for the lack of sun, are more likely to use warm colors in the interior of their homes. Southerners, on the contrary, try to choose cold or neutral shades for both clothes and interiors.

There are temperature associations: red is perceived as hot, blue is perceived as cold, warm tones remind us of summer, and cold tones remind us of winter. There are color associations associated with age: children are associated with bright, rich colors, and older people are associated with soft and muted shades. There are also associations associated with weight: light colors are lightness, airiness, weightlessness, dark colors are heavier in comparison with them.

Spanish marketers from the University of Seville were able to find out that the behavior of buyers is influenced not only by the color itself, but even to a greater extent by its “relevance and expediency” for a particular product or brand, determined on the basis of color associations.

Let’s figure out how this or that color is used in marketing.

Red , which is positively perceived in most cultures, is often used in design. It is associated with warmth, energy, speed, courage, strength. Due to the ability of red to awaken the appetite, it is preferred by many companies working in the fast food industry, as well as the restaurant business.

It is this color of leadership and dynamism that is most often used to attract maximum attention, for example, the “Buy” or “Promotion” buttons are highlighted in red. However, there should not be too much red, do not forget that it can cause negative associations, for example, signal danger (red traffic light, stop sign, panic buttons).

Orange tone is associated with friendliness, novelty, energy, joy, happiness. Since this color evokes mostly positive emotions, it is actively used by various well-known brands.

Sunny yellow also has quite a few fans. In many cultures, it is associated with wealth, intelligence, hot summers, youth and creativity. This color looks best in combination with contrasting shades. Like red, yellow is able to induce a quick decision, therefore it is used to warm up the consumer’s emotions. This color is used in games and products for children, in the field of energy, advertising for household goods and tools.

It is believed that the green color calms, inspires confidence and sets in a peaceful mood, it symbolizes freshness, growth, the birth of a new one, purity and health. This color is popular with grocery brands and supermarkets, as well as eco-brands, medical organizations and pharmaceutical companies. Due to its association with calmness and confidence, green tones are often used by banks, insurance companies and financial institutions.

Blue – the color of the sky, freedom and majesty, this cold shade symbolizes peace, relaxation, logic and serenity, is associated with security and trust. Such a color scheme is designed to reassure the consumer, inspire him with a sense of reliability, and demonstrate the impeccable reputation of the company. Applications: appliances, cars, as well as banking, legal and medical services.

Purple is associated with mystery, romance, elegance, luxury, sophistication. It is loved to be used by brands offering goods for women, as well as companies that are focused on the high consumer segment. The main areas of application of purple are perfumes, clothing, household goods, food (chocolate, confectionery). It is worth noting that the color is considered quite extravagant, moreover, it can have a number of negative associations, such as depression and gloom, so this tone is not suitable for every advertising campaign.

Traditionally, pink is considered the most feminine color, which is why it is often used by brands that produce goods for the adults. In addition to femininity and romance, it symbolizes playfulness, perkyness, fun, creative energy, and comfort. This color is associated with sophistication, passion and enterprise. Due to its brightness, it should be handled with care and it should not be forgotten that many consumers consider pink to be frivolous and infantile.

Black color , especially when combined with light colors, looks stylish, concise and sophisticated, it symbolizes luxury and power, which is why it is often used by luxury brands. It is also preferred by many brands in the fashion industry, technology companies, car manufacturers, watch manufacturers. As for negative associations, it should be remembered that in many cultures black is associated with mourning, death, so it is not suitable for entertainment or, for example, health care.

White is a neutral color that symbolizes cleanliness, grooming, freshness, simplicity. It is also believed to be associated with luxury, which is why some jewelry companies and fashion houses use it as their signature color. Other areas of application of white: healthcare, clothing and footwear, technology.

It is not uncommon for marketing and advertising to use brown . It’s versatile enough to give the consumer a sense of luxury and appeal, as brands such as Lamborghini, Porsche, and Louis Vuitton do, or to achieve a soft, enveloping, and elegant effect, as do M&M’s and Dove’s chocolate brand.

Color Tips for Marketing and Design

You can use color theory by choosing the right color associations that will attract and hold the attention of your site visitors, and help increase their loyalty to the brand and product. You can also choose successful combinations of tones for your landing page design using the color wheel.

Before choosing colors, you need to clearly define what exactly you offer, what your main target audience is, in order to understand which combinations of shades will be most appropriate in your marketing campaign. When creating color combinations, you should take into account the specifics of the business, for example, if you are selling wedding dresses, bright, flashy tones for website design are unlikely to be appropriate. Delicate pastel shades and elegant combinations like white and gold will be able to attract the attention of brides.

The gender and age of the target audience should also be taken into account when choosing color combinations. So, for example, it is believed that women like juicy and warm colors, pastel shades, they prefer colors such as burgundy, purple, pink or lilac. Men like the combination of basic or neutral tones: gray, blue, white and black.

Choosing the right colors for your website design will help your brand stand out and increase conversions. You just need to remember that the color palette of a particular project, for example, a landing page, must match the company logo and the overall corporate identity.

What is typography and how to choose fonts for a website : When it comes to graphic design, most often a beautiful picture, bright and interesting colors, complex and unimaginable ideas, something fashionable, something modern are presented. At the same time, few people think about fonts, their size, color, saturation, kerning and leading. Well, font and font, what to take from it …

In fact, typography plays a very important role in the design of any product. She sets the mood and can sell even an unnecessary thing.

In today’s article, we’ll talk about what typography is, how to work with it, and why you need it at all.

What is typography

Typography is a whole art, the art of text design. In simple words, this is the transformation of plain text into one that will look neat and pleasant to read.

There can be many design options. This is the essence of typography – it is diverse and there is no single formula. We can play with fonts the way we want. In the first picture, the font, although it was quite large, was not as easy to read as in the second.

Knowledge of typography is the ability to use the rules and norms for the design of the selected text, so that in the end it is easy and pleasant for the reader to perceive the information. If the text is typed all the way, without paragraphs and accents, then no one will read it – it is at such moments that typography begins to work.

The main types of typography

To understand typography, you need to understand the basic concepts. The first thing you should know about is the types of headsets. There are countless fonts, and for convenience it is customary to divide them into:

antiqua,
grotesque,
handwritten,
display cases.

Popular serif fonts:

Times New Roman,
Garamond,
Bodoni,
Play Fair Display,
Merriweather.

Other popular sans-serif fonts:

open Sans,
Raleway,
Montserrat,
Druk,
Futura PT.

handwritten

Already from the definition it is clear what kind of font it is – it looks like the one that we write by hand in notebooks, in letters. There are many variations of this typeface, some of which are difficult to decipher, so handwriting should be used with care, despite all the beauty. It’s always worth keeping in mind whether users will be able to read it, especially if you’re choosing a font for your brand logo.

Popular handwritten fonts:

Antractive,
rhythmic,
Amatic SC,
caravan,
Klyakson.

Display

Display fonts are fun, informal, and original. They are usually used in short texts, headings. Most often, this type of font is found in popular brands in logo design.

Popular display fonts:

miratrix,
Moniqa,
Durance Type,
flicker,
CSTM XPrmntl 03.

These were the main types of typeface that can be seen in typography. Most often you can find grotesque and antiqua, or a combination of both. Other styles are rarely used, but can significantly change the mood of the product.

Typography Options

Each font has such parameters as leading, kerning, tracking, saturation, alignment. What it is and how to work with it – we will talk in detail later.

Leading

Leading is the line spacing. This is a very important parameter that can both improve the readability of the text and worsen it. You should be as careful as possible: if you do not know how to work with it, then it is better not to change it.

Tips for choosing the optimal line spacing:

The longer the line in terms of number of words, the greater the leading should be. And vice versa – a too narrow column of short lines looks ugly even with standard leading.

Typically leading is 120-125% of the font size used. For example, you have chosen size 16. You can calculate the value using the classic formula: (16 * 120) : 100=19.2. That is, the recommended leading is 19-20.

At first, it will be difficult for you to determine the correct leading. But over time, your eyes will train, and the selection of the optimal line spacing will occur automatically.

Website typography

Here are a few tips to help you improve typography on your website and anywhere else you intend to use text:

Don’t use more than two fonts. A large number of fonts will only confuse the user, and it will be difficult for him to perceive information. Use font pairs – one font for headings, the other for body text. In some cases, only one font can be used, but most often heading-content pairs are taken.

Don’t make the font very small. The minimum size for readable text is 16px on both desktop and mobile. A smaller font should only be used in extreme cases, such as when additional information needs to be provided. In general, the standard font size is 16-22px. The title can be large, up to 100px, but most often it is in the range of 40px-70px.

Do not use black #000000 for the font. This is the most intense black color you can choose. If you read for a long time, your eyes will get tired. It is better to use less bright colors, for example, slightly grayish.

Use free fonts. Fonts are divided into paid and free. You can find any for free on the Internet, but if you use a font without a license, it will be a violation of copyright. In this case, the owner of the font can sue you. Of course, it is unlikely that this will happen, but it is better to use either free or buy paid fonts. You can find free options on the official Google Fonts page .

Watch the font size. In this case, I mean that the topmost heading must either be equal to the rest, or be greater. By no means less. If the size of the first heading is smaller than the second heading, then the hierarchy will be lost, and it will become difficult to study the content.

Avoid hanging prepositions and single words. I already spoke about hanging pretexts – they should not be.
Use capital letters in headings and important places. Large letters can enhance the title and direct the user’s eye to the right place.

If you want to become a typography master, check out the work of other designers regularly. I advise you to pay attention to other people styles. You can see works in this and other styles on Pinterest.