Is it Possible for Marketing to Increase Stock Prices?
A successful marketing strategy can very well improve a business’ outlook. From an international, global entity all the way to small mom-and-pop shops. Marketing can make or break a company. It can completely change the perception of your brand. You can take a poor situation, and with a combination of PR and marketing, you can easily turn that bad situation into an opportunity.
Marketing plays a massive part in short-term gains. It can help launch a new product or build up hype before a big merger. It is not often associated with how it can affect the long-term value of the company’s stock prices.
Why is There Skepticism Around Marketing?
Marketing is one of the hardest departments to pin down. Most of what marketers do won’t have a clearly defined ROI to report on. There are correlations, and with digital marketing, you do have more control over understanding the results of your marketing strategy, but overall, marketing works more off of conjecture than data.
Data-driven campaigns are a possibility. Using unique pathways or even discount codes can help you understand your campaigns’ overall cost and reward.
A correlation that can be very difficult to see at first glance is how your marketing affects your stock prices. It can help after your stock price takes a hit if you are dealing with a crisis. That, however, is damage control. That is working to assuage fears and build back interest and loyalty in the company.
The good news is that studies have found that certain marketing techniques can also be used to build up a business’ stock market valuation.
When Can Marketing Increase Stock Market Valuation?
Short-term campaigns, sales, and special launches typically have very little impact on the stock market valuation. However, what can influence the market value are the techniques specifically designed to increase customer lifetime value.
First, Calculate the Customer Lifetime Value (CLV)
The first step any business needs is to calculate what the average customer lifetime value is for your company. The simplest calculation is to simply average the order total for any given checkout, order, or service and then multiply that by the average number of purchases made in any year. Older businesses will be able to extrapolate further by multiplying that value by the average retention time.
Working to increase both the retention time and the overall spending per customer is how you can calculate and then increase CLV.
Why Does CLV Affect Stock Market Prices?
CLV does not immediately affect the market price, but when combined with “next-generation” marketing that works to increase CLV at different segments throughout any given company, the results speak for themselves. A study conducted by V. Kumar and Denish Shah saw massive results in the companies that they implemented these strategies in. The two companies in question saw a stock market value increase by 33% in one company and by 58% in another company.
Predicting future stability and profitability can be very difficult, but when you focus on CLV as your metric, there are many avenues forward that increase the retention period of the average customer, as well as the revenue earned. These two factors build on a business’ stability and value.
What Are Examples of Marketing Techniques That Increase CLV?
Even businesses that are not public benefit from these marketing techniques. They are, after all, designed to increase the loyalty and the spending of customers over a longer period of time. The same strategies that may help an orthodontist increase their patient list will work for a public company because you are still working with people at the end of the day.
Personalize the Onboarding Experience
The onboarding experience is everything from your initial marketing campaign all the way to signing up to a newsletter. The goal of the onboarding process is to turn a non-affiliated user into an interested customer and eventually become a loyal customer. This can be the most difficult and costly part of increasing CLV because, at the end of the day, it is essential to your business’ growth and yet provides the least ROI overall.
The best way to improve your efforts, and have an impact on the stock market valuation is to personalize the onboarding experience. Creating multiple pathways for each buyer persona is the idea, as is using easy personalization tools to add value after you have successfully soft-sold your brand to your new potential customers.
Offer Valuable Content
Getting your customers in front of your business on a regular basis is the ideal way to increase CLV. Not every visit needs to involve a sale, however. By providing customers with valuable content beyond products, they have likely seen before, you can increase interest and loyalty and continue to market your products to them in a laid-back, friendly way that encourages customer satisfaction.
Again, this strategy works just as well with that orthodontist as it would any publicly traded company. The content in question can be blog content; it can be guides, how-to help, and news. Just look at this blog content about Orthodontist marketing at https://hip.agency/. If value-adding content can increase the patient list and help encourage people to visit an orthodontist or dentist – two activities that many either don’t find comfortable or enjoyable – then the same type of value-adding content can increase interest and retention for any company.
Increase Customer Support
Customer support today is more than just having a friendly face and helping people with their problems. In many cases, customers want the problem to be fixed or monitored without ever having to get in touch with you. Omni-Channel support offers this. When a customer logs in, they should, for example, be able to see where their purchase is, whether it has been shipped, and so on. They should be able to send complaints and have someone work on the issue behind the scenes without having to spend hours at a time on the phone.
There are many ways to digitize and revolutionize your customer support, and in doing so, increase satisfaction, retention value, and your CLV. A great customer service strategy can be exactly what you need to increase stock prices and market valuation long term.