by Kieran O'Brien Kern
In competitive advertising categories, the outcomes are not always cut and dried.
Logic permits that customer acquisition cost divided by lifetime value equals the health of the business. However, this measure is not always a simple truth. Customer acquisition costs are rising, while for many marketers the lifetime values have fallen. When the return no longer warrants the investment, it’s time to find an answer.
LightStream, a lending division of SunTrust Bank, has an answer: Partner strategically and build a new ecosystem. Their innovative, closed-loop real estate partnership program is designed to captivate and serve the nearly 20 percent of Americans who move homes each year.
Its an ecosystem created to provide timely information and value to consumers, delivered from their trusted realtor. This approach represents a massive shift in the way LightStream acquires and retains customers and can overcome challenged unit economics while preserving the customer experience.
“This particular relationship allows us to further extend our reach and the breadth of industries in which we prospect,” explains LightStream Chief Business Development Officer Todd Nelson.
He further explains the financial advantage of these types of partnerships over the usual customer acquisition efforts. “All customer acquisition efforts require money for those ubiquitous sources of business, i.e., SEM and aggregators. More competition means higher costs, and consumer lenders have proliferated at an accelerated rate for more than a decade.”
Nelson notes that the partnership gives a ‘triple win’ for the consumer, prospective partner and indeed the company themselves. The closed-loop real estate partnership program requires a much deeper understanding of both the consumers’ and the partner’s needs. It also requires a significant investment to serve both groups as a means to facilitate the partnership.
While it took several months to develop, “Response from prospective partners has been overwhelmingly favorable, and we are fortunate to have such strong interest,” according to Nelson.
Nelson advises that buying traffic or leads is not the same as a partnership; those activities are useful, but they are merely commercial transactions for commoditized services. “In order to be successful in this space, you must create differentiation to separate yourself from the alternatives. It is not for every company.”
His session, “Creation Coalition: How a Powerhouse Brand Built its Own Acquisition Ecosystem,” is for a wide variety of business leaders who are tired of seeing rising costs and shrinking margins because of irrational pricing and middlemen who add limited value. Nelson, alongside Workbook6 founder JT Benton, will share insights and solutions, including understanding how disparate goals can captivate a common audience across verticals and industries to ensure a true win-win-win scenario.
Nelson feels attendees will not only come away with a sense that they are not alone in the challenges they face, but that there are other means to acquire customers profitably.
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