As consumers place greater value on referrals, beauty brands need to rethink growth in this new, trust-based buying environment.
Customers are no longer passively targeted, and their spending habits are shaped by the people around them: friends, peers and people they trust – no media budget in the world can buy that trust.
This changes how you should think about customer value entirely. Customer Lifetime Value (CLV) measures what someone spends. It misses the point.
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The real question is: what is the wider impact of that customer on the people around them?
How many people did they bring in? How much revenue did those referrals generate?
As uncomfortable as it may be, traditional channels are merely ‘push’ messages at people, draining marketers and prohibiting their growth.
As marketing spend becomes irrelevant, marketers need to either start reallocating their budget or wait for it to inevitably shrink.
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