Meet Victor Dahlborg, co-funder and CMO at Refunder, who believes that old customers are the best channel for finding new customers. Hi Victor, what do you really mean?
–Hello! Customers who in their own words explain why they like your service will generate new customers. Therefore, it is very important to keep track of who your best customers are and create insights into why they like your service. If you give them good incentives to spread the word, you could double the profitability.
We have worked hard to get more people to discover our business model - both consumers and stores. Today we see that cashback is an accepted and appreciated concept that many people know and use.
Largest cashback in Sweden
Today, Refunder is Sweden’s largest cashback site. Through the Refunder Pay card or the online service refunder.se, members get money back on everything they buy - from food and books to clothes and travel. As a co-founder and CMO, Victor has a hand in most things related to how the company works to continuously develop the service and offer it to the market.
–We have worked hard to get more people to discover our business model, both consumers and stores. Today we see that cashback has become an accepted and appreciated concept that many people know and use. As many as ten percent of everyone between the ages of 18 and 70 in Sweden are members with us, now only 90 percent remain and then all Swedes will shop smarter.
Insight-driven work is key
For the stores, Refunder has become an important sales channel and Victor says that more and more stores are cutting back on traditional advertising via Google and Facebook to instead be seen on the cashback site. Based on the RFM model*, Refunder has created automated processes to analyse its customer base in real time to create understanding and insight into who their best customers are and why they like the service.
–If you want to increase your user database, the most important thing is to identify your “gold customers”. Then you have to make sure to create activities and automated processes so as not to lose them and at the same time get more of your other customers to be part of this group.
Don’t stare blindly at what a new customer costs you, but focus on what a loyal customer can generate over time.
An important part of this is to give customers a good incentive to share your service with others.
–The very best channel for finding new customers is when your existing customers explain in their own words why they like your service.
Analyse over time
Victor recommends all companies to do a proper analysis of how much a customer is worth over time, a so-called CLV, Customer Lifetime Value, to get an idea of how much you can pay for a new customer.
–Don’t stare blindly at what a new customer costs you, focus on what a loyal customer can generate over time. At the same time you should of course bear in mind that there may be loyal customers who are not profitable. Once you know what you can pay for a new customer, the next step is to find the right marketing channels. For us, Smartson is a channel that has worked very well. We have been able to recruit new members who have also had good quality over time.
The collaboration with Smartson in three words
He describes the collaboration with Smartson in three words: smart, simple and efficient.
–It is a particularly good channel for products and services that can be difficult to explain in a simple way.
Victor also believes that one should not underestimate the effects that the combination of different channels and media can have. For example, TV commercials can help convert online channels if they run in parallel.
–Then you combine brand-building channels that create impact and awareness with activity-driven and traceable channels that capture interest. The advantage of broad image-building channels is that you remind existing customers who also consume these channels while building credibility with your suppliers and staff.
The search for the right media mix
It is of course important to test different media combinations to optimise your media mix and continuously reduce your traffic acquisition costs. But many times you can get significantly more out of increasing the conversion rate on your landing pages - even if it’s just a few percentages.
–A few extra percent improved conversion rate can have a huge effect on the acquisition cost.
*RFM - Recency Frequency Monetary
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