The Customer Journey

A business's ability to competitively acquire and retain customers hinges on the volume of shoppers progressing through each of several customer journey stages.

The below framework is one of several valid ways to outline this journey. It begins with initial awareness, before progressing to a decision event (such as an online conversion).

The customer then enters a customer retention phase, ensuring they benefit from their purchase with Darkroom, leading to effective customer retention tactics that encourage repeat purchases or renewals.

• Awareness: The customer becomes aware of the product or service through some paid or organic marketing channel, or through word-of-mouth.

• Consideration: The customer considers buying the product or service, often comparing it directly to competitors (other brands) or alternatives (getting by with some sort of solution that provides equal or better value).

• Decision: The customer decides to purchase and begins taking the necessary steps to do so.

• Experience: The customer uses the product or service. This may involve several touchpoints with the business (customer support).

• Re-Engagement: The customer again encounters the brand through a retention channel (like email and SMS) or their own action (ex. going back to the website organically).

• Referral: The customer recommends the product or service to other consumers.

In digital marketing, each of these stages in the customer journey has several KPIs (key performance indicators) or measures of success associated with it.

For example, video views and traffic to a landing page are typically associated with the awareness stage, with some overlap with the consideration stage. The decision phase hinges on purchase conversion rate, or the rate at which visitors convert into paying customers.

At Darkroom, we pay special attention to a brand’s ability to move customers through each of these journey stages relative to their closest competitors, as opposed to reviewing those metrics in a vacuum. This exercise will often uncover a lucid and detailed picture of a brand’s ability to grow - since growth is a competitive endeavor. Those insights can be used to inform strategies for driving improvements.

Enhancing Value

A business is only as valuable as its ability to drive profits - either now or in the future.

A particularly effective framework for thinking about how to enhance the value of a business is to first consider where that value, namely those profits, comes from.

An inexperienced stakeholder might think of their brand’s value as coming from certain marketing channels. They might say something like, “X% of our revenue comes from paid advertising, another chunk comes from email, and the rest is all word-of-mouth”.

Others might make the mistake of thinking that their value comes from their products or services; “Our shirts drive the bulk of our business, and our accessories make up the rest”.

In reality, profits come not from channels or products, but instead from customers.

A company’s value can most effectively be conceptualized as the sum of all the present and future profits driven by their customers.

Therefore, to enhance the value of the businesses we work with, our work as marketers must focus on:

1. Acquiring new customers

2. Retaining existing customers

An example of customer acquisition might be a paid social media advertising campaign targeting audiences who have never heard of the brand in question. The business seeks to win them over as a customer.

As an example of retention marketing, that same brand might market to the customer they’ve acquired by optimizing the messages they receive throughout their life-cycle as a customer - such as during the shipping and fulfillment process. The business might also send the customer promotional emails to entice them with sales and new releases.

The Best Customer is Always Right

The cost of acquiring a customer has generally increased over time due to factors including increased competition and contracting growth of ad inventory (more competition for fewer available impressions).

Businesses that fail to drive profits from their existing customers must rely on newly acquired customers to meet their growth goals, and with customer acquisition becoming more expensive, those companies are fighting an uphill battle.

It is therefore imperative that marketers seek out not just any customer, but those customers who are most likely to stay with the business for a long period of time, making repeat purchases or service renewals along the way.

The key to healthy and sustainable growth is identifying and replicating the most valuable customers. We refer to those customers as having high CLV, or customer lifetime value.

Future modules will expand on the concept of CLV, and how marketers can leverage it to drive financially-healthy and sustainable growth for their clients.

Testing and Discovery

The advent of digital marketing ushered in an era of measurability that empowered businesses to better understand the results of their marketing decisions.

This paved the way for mass adoption of testing - a concept that continues to fascinate, excite, and mystify marketers and stakeholders to this day.

In this article, we’ve established the understanding that driving growth requires a business to compete at several journey stages in order to acquire and retain valuable customers. We can reasonably assume that some marketing decisions will be more effective at doing so than others.

In the early days of marketing, professionals would usually rely entirely on assumptions based on observations from prior work, but those observations were often detached from granular quantitative metrics.

For example, a television copywriter might choose to include competitor comparisons in their commercial script, because they and their agency had generally concluded that commercials including similar techniques had led to their clients having good quarterly sales numbers. But the metrics in between were rarely attainable due to technological limitations, so insights were limited.

The advent of digital marketing produced a wealth of data in the form of specific metrics that provide objective visibility into how marketing decisions affect a brand’s ability to move customers through stages in the customer journey.

Instead of guessing, marketers can now know what decisions drive growth. We refer to this as discovery, because it amounts to discovering what works and what doesn’t.

The primary method for driving discovery is testing - a marketing practice borrowed and adapted from the scientific method.

Marketers can test any number of variables by putting multiple versions of the same variable into action and measuring the results. They can then optimize performance by adopting the winning variant and avoiding the losing variant in any forward-facing marketing plans and actions.

A critical example of testing in modern day growth marketing is the concept of performance creative testing. This type of testing involves serving multiple variants of visual creative and messaging to discover winners that are effective in driving improvements to key metrics, like clicks and purchases.