What do marshmallows have to do with long-term value?

February 24, 2022

CLV and Marshmallows

Trust Me

There’s this psychological experiment that smart folk in lab coats did (and maybe still do, who knows!?) where they’d sit a kid in a room and give them a marshmallow. Now, I don’t know if you’ve ever been a kid, but marshmallows to a child are like, I don’t know, email revenue to the typical adult.

Then, the white-coat smarty-pants would tell the child that they are free to eat the marshmallow in their midst. Great news, right!?

But there’s a dilemma.

The person doing scientific experiments on the helpless, defenseless future of our society says if the youngster can refrain from eating the marshmallow for a measly ten minutes, they’d get two marshmallows instead.

By my math, that’s double.

Then the scientist would leave the room to let the child decide what to do.

Put yourself in a pair of adult-sized velcro shoes and consider which option yields preferable results. Are your eyes on the short term or the long game?

Customer Lifetime Value (CLV)

Customer Lifetime Value can be described as the number of marshmallows on your plate over time.


In the first 90 days with us (during the &WHAM program) we help maximize the number of people adding marshmallows to your plate. We want to reach everybody who could possibly give you a marshmallow, and make sure they know you’re in the marshmallow acquisition business. This explodes email revenue to the tune of about 3x on average, so we’re turning one monthly marshmallow into three.

After that, your marshmallow harvest will be steady at approximately three, which is great, but more marshmallows is better.

If this is where your business lives today, you’d do well to focus on &WHAM and exploding your email revenue as early as possible.

&TYM aka The Nitty Gritty

After the &WHAM explosion, we focus on long term value through our CLV optimization program - &THANKYOUMA’AM (&TYM).

In short, we comb through the mountains of data we generate during &WHAM to look for patterns. There are always insightful patterns in the data that can be used to better target customers, keep them coming back, and increase the value they offer.

Improve Retention

Obviously we don’t just want to acquire customers, we want to keep them. And hold them close. Forever.

We increase customer retention with quality customer service, by creating buying opportunities, and by adding value for the customer through our email campaigns. Quality customer service means the right promotions, campaigns, and emails at the right time. Quality content adds value by educating or entertaining your customers without a specific ask.

This can’t be a one sided relationship. It’s got to be mutually beneficial for both parties. Customers hate the sense that all you want is their marshmallows, and rightly so.

Reduce Cost of Acquisition

What drives customer acquisition costs up?

Two things: The wrong target(s) and the wrong method(s).

We drive down the cost of acquiring new customers by building and refining an ideal customer profile. When we know who our customers are and how to speak their language, communication becomes a conversation instead of a sales pitch.

Let’s say you want to go on 10 dates this month.

You could ask 1000 people and hope for the best.

Or you could ask 100 people and give them all a rose (that’s a lot of roses).

Or you could ask 20 people who you’ve researched and can call by name and give each their favorite flower.

The better you know your audience, the more directly and effectively you can talk to them, relate to them, and sell to them.

Make An Excellent Experience

Remember teachers who said there’s no such thing as perfect, so you could never get a perfect grade? Awful.

But, when it comes to customer experience, you can never stop improving. For one, you want to ensure that you’re meeting your customers’ expectations as accurately and effectively as possible through the entire customer journey. That means a clear and consistent brand voice and image, with emphasis on consistent.

Every positive experience matters, but when we’re turning casual shoppers into fanatical customers, consistency is king.

And why do we want fanatical customers?

They share their marshmallows. They share them now, and they’ll share them regularly for a long time. Three marshmallows becomes four, and four becomes five, and five becomes four again because you tried to roast one and it caught fire and got ruined, but then it increases again after that.

And the best part? Maximizing your CLV is a very different process than creating effective sales campaigns. The steps we take during the &TYM program set long-term standards for acquired customers, but you’re never going to stop acquiring customers.

Consider &WHAM as your checking account and &TYM as your savings. Every new customer you acquire adds money to your account. Every long-term customer you acquire adds money also, but there’s interest on that money and it pays out regularly over time. The smartest among us keep a close eye on that savings account because it’s a joy to watch your money grow.

But if you’re serious about maximizing your CLV, you need to be ready to really dig into the data and spend time working to understand what your customers are telling you with their actions.

I want to lie to you, but I love you so I won’t. It’s a lot of work. And it’s tedious, and it takes sustained effort over time.

Maybe a couple marshmallows is all you need to survive, anyway.

If you’re salivating over all this marshmallow talk (as an analogy or otherwise) and you’d like a helping hand, please don’t hesitate to schedule a chat. We can discuss &WHAM, &TYM, and which is best for you, or we can schedule a free audit (which isn’t nearly as stressful as it may sound).

Otherwise we’ll just be over here playing chubby bunny.

Ready to