Step-by-Step Instructions

Click to open worksheet.

Problems it Solves

1. What if your Customer Lifetime Value (LTV) is too low?

Let's say you've run your experiment and you've found out that your LTV is too low. This exercise will help you increase it.

2. How do you improve your solution?

In this chapter you will learn four different techniques for improving your product and increasing your LTV. At the end, you will choose one of these techniques that will help you reach your goals.

It is important to note that you are still in "manual-solution mode."  By staying in manual-solution mode, you will be able to reach out to your customers more easily and make small changes more easily that could be critical to increasing your LTV.

Strategy 1: Measuring Emotional Delta

As we've discussed before, Emotional Delta is a vanity metric - that is to say that while it has a lot of meaning, it is not directly connected to your Victory. At the same time, if you can track the Emotional Delta and see a positive difference in how your customers feel about their problem, then you should also see a difference in the metrics that matter (e.g. LTV and K Factor).

First, you want to meet with your customers before they have encountered your solution to collect baseline data.

To do this, you will ask them:

"What emotions do you experience associated with [problem context]?

Once you understand one prominent emotion, you will ask:

"On a scale of 0-4, how strongly do you feel this emotion?"

Then you will probe again:

"Are there any other emotions that you experience associated with [problem context]?"

You will repeat this series of questions until there are no more emotions that come up for them.

There are two ways to do this:

1. a survey
2. a conversation

This is one of the only times that a survey can be helpful; however, whenever possible I would still recommend a human-to-human conversation since you are talking about emotions. You are likely to get more full and expansive answers through a conversation.

It may be noted that when dealing with a particularly sensitive topic, you may actually get more honest answers through a survey.

Go with your gut: based on your problem context, how will you get the best answers for your baseline Emotional Delta?

I would like to recognize that it can feel kind of awkward to talk about emotions, especially with a relative stranger. Here's a suggested introduction to the conversation:

"I want to recognize that emotions or feelings are something we normally avoid talking about in business. That said, in order to solve the ________ problem as best I can, I'd like to understand where you're coming from to the best of my abilities."

Basically, you're saying: I'm about to ask you something awkward, but I have genuine intentions for asking this.

Then, you might follow up with:

"If you're comfortable answering, I'd simply like to ask: 'What emotions do you associate with [problem context]?'

If they say no, that's fine. You can move on or decide to end the conversation at that point.

Hopefully, you are able to collect enough data from your customers to achieve a baseline for how they are feeling before they encounter your solution.

After they have encountered your solution, you will want to return to this same set of questions:

"What emotion do you associate now with [problem context]?"

Again, once you understand one prominent emotion, you will ask:

"On a scale of 0-4, how strongly do you feel this emotion?"

Then you will probe again:

"Are there any other emotions that you experience associated with [problem context]?"

Just as you did in the beginning, you will repeat this series of questions until there are no more emotions that come up for them.

The difference in the After Scenario is that after they've told you how they are feeling now, you will ask them about the emotions they had cited before they encountered your product:

"You previously experienced [emotion]. On a scale of 0-4, how strongly do you feel that emotion now?"

The idea here is that you will be determining whether or not there has been a change in each of the emotions they mentioned before they had encountered your product/solution.

Now, you will measure the difference.

In the example chart, I have the emotion listed, an indicator of whether it is a positive or negative emotion, and then their rating.

For example, the three emotions a customer associated with her problems of "validating her business model" were Overwhelmed, Frustrated, and Excited. The first two are generally negative emotions, so I gave them a negative (-) sign, and the last is a positive emotions so it gets a plus (+). The final column indicates the customer's rating of each emotion.

Now, I add up the numbers (factoring in the +/- signs) and get a value of -4.

This number means nothing in and of itself, but is very meaningful as a comparison tool for what comes after.

In your "after" interview, you are likely to have more emotions: those from before plus any additional feelings that have arisen due to the interaction with your solution.

Again, list these emotions, including the value and + or - indication. Add them up, and see what your score is.

In my case, I now have a value of 0.

When I compare the two - before and after - I have an Emotional Delta of +4. In this case, I have created a positive Emotional Delta!

Again, this number has no meaning in and of itself, but there are a few interesting elements to it.

First, if you have created a positive change, you have evidence that you have positively affected this person's life with respect to this problem. That's fantastic.

Second, you can use this as a way to see how changes to your product are related to changes in your customers' experience of their problem context. As the Emotional Delta rises, you know you have had a stronger impact. As it shrinks, you've had a smaller impact.

Keep running changing parts of your product and measuring what effect they have on your Emotional Delta. The scores you get for individual solution variations may not be useful by themselves, but they're incredibly helpful relative to one another. You can use them to iterate your way to a higher LTV.

If you run this experiment and your result is negative, it does not necessarily mean you are doing something wrong: often times, when a customer really dives into to trying to solve a problem, it can illuminate the difficulty of that problem and reveal more frustration. In other words, you may be helping them to solve their problem, but you're not likely to have them as a customer for very long because their experience is not positive. It's not that there is anything wrong with your product, per se, but you may need to make some changes to help your customers have a more positive emotional experience, so that they'll stick around longer.

As you make changes, keep an eye on your emotional Delta: as your Emotional Delta increases, so will your LTV.

Step 1

Take out your Increasing Total Lifetime Value worksheet. In the first box, you will see specific steps related to Emotional Delta. Write in the problem context you've been working on.

Step 2

The next question is: How and when will you measure before? Here you will write in your plan for how you will get your baseline emotional data.

In my case, as soon as I get a pre-order for my product, I can reach out to the customer and ask to interview them about their emotions associated with validating their business model.

Step 3

Next, write in a plan to measure their emotions after they have encountered your solution.

In my case, I will set a reminder to myself to follow up with them a few months after our initial conversation.

Measuring your Emotional Delta is one way to increase your LTV. Emotional Delta provides a concrete way to determine if you are making positive change for your customers. Of course customers are more likely to stay your customers if interacting with your product creates a positive emotional change for them.

If you find that they are having increased negative emotions when interacting with your solution, you can make changes and measure your impact again.

Strategy 2: Getting Feedback

Getting Feedback is a relatively straightforward method: you know how to do it already. However, there are some tips that can help you get the most valuable feedback for your product and increasing your LTV.

Tip #1: Talk to your customers.

For this strategy, do not use a survey! It is much more work for your customers to type out their feedback than to simply tell you. You do the heavy lifting and make it as easy as possible for them to give you the information you need.

Tip #2: Everything they tell you is right.

When you ask your customers for their feedback they are going to share their genuine experience with their problem and your solution. They will not lie to you.

This means that they may be using your product in a different way, or in a way you didn't intended. However they are using it, this is their reality. Everything they say needs to be treated as the way the world is, because it is true.

This is difficult because you may have ideas about the "right" way they should be using product, or you could be emotionally attached to certain parts of your solution.

It's natural to feel a little defensive in these conversations. Still, avoid the temptation to contradict your customers.

It is incredibly important to be grateful for everything your customers share with you about your product, because theirs is the reality of how your product is being received and used in the world.

Remember, your customers that matter the most! They are the ones that will get you to your Victory - their feedback is priceless.

While you are listening to their feedback, pay special attention for Emotional Delta opportunities:

How can you improve their experience of their problem context with your solution?

Step 4

To get yourself in the mindset of receiving feedback, answer the questions in the top right of the worksheet.

First, what problem are they solving? Write in the problem they are facing so that you have this first and foremost in your mind as you are speaking with them.

Step 5

Next, think about how much your customer cares about your problems.

I can't tell you how many times I've heard someone ask for feedback, listen to the feedback, and then immediately respond justifying the way things are.

Your customer only cares about their own problem, and how well you are solving it.

No matter how many challenges you are facing in designing your solution, the only thing that matters to your customer is how well you are solving their problem. They do not care about how hard you are working to solve it: only that it gets solved.

The only answer to question #5 is: Not at all.

Don't waste your customers time telling them why your product isn't as good as it should be; use that time to make it better.

Step 6

Finally, come up with when and how you will ask for feedback.

In my case, I'll plan to ask someone for a feedback session 2 weeks after I see they've logged into FOCUS for the first time.

Getting Feedback is a great strategy because it's low cost and not awkward. Most of us have had experience doing this before so it should also build on skills you already have.

Strategy 3: User Experience

Your product is taking your customer on an emotional journey.

Your customer has a lot of feelings around their problem and interacting with your solution will influence the way they feel about that problem. The User Experience you create can either make for a positive emotional experience or a negative and frustrating one. Being aware of this is key to increasing your LTV.

Your job is to create a positive emotional journey.

How do you do this? Observe their journey.

You want to be a passive bystander as they go through your product so that you can see, think and feel what they are seeing, thinking and feeling. In this way, you can get a first-hand experience of the emotions they encounter interacting with your product.

There are a few ways to do this.

The best option, by far, is in-person. Remember, you're still in manual solution mode so if you are able to sit with a person and physically watch them interact with your product, you'll be in the best position to take in and respond to their feedback and experience.

You can do this over coffee and watch them use your "product." Alternatively you can stop by their office, particularly in a B2B scenario, and see how they integrate your product into their day to day workflows.

Or, you can buy a pile of pizza and invite customers to you for a "usability party." I've used this method quite often. I just invite a bunch of people over to use and interact with my product with me, so that I can see what is working and what's not.

If you are not able to do this in person, there are virtual ways to do this. Skype screen sharing is a great alternative to the in-person meetup. If you have built something that you can watch them use, you can see how they are using it and listen to them talk themselves through it along the way.

This is the essence of User Experience testing:

Walking through your customer's emotional journey with them, so you can improve it.

Step 7

To document how you might go about using this strategy, take out your worksheet. In this section you will write in:

How and when will you observe their emotional journey?

What is your plan?

In my case, I would find some founders that I can co-work with for a day, to see how they leverage and use the exercises. My goal is not to make them do the exercises, it's more to pick a day when they might be using it. I can watch them use it, ask them questions about their experience, and follow them along their journey to see where it is useful, not useful, confusing, helpful, etc.

Strategy 4: Exceeding Expectations

The fastest way to create a positive Emotional Delta is to exceed expectations.

For example, if you have ever been unexpectedly upgraded to first class on an airplane - instant positive Emotional Delta!

Zappos is famous for this: they will often upgrade you to overnight shipping for free. Recently, I was in a Lyft and the driver offered me water and a cell phone charger. Again, an instant positive change in my emotions because I didn't expect this level of service.

The way for you to leverage this is to understand your customers' expectations. You can't exceed your customers' expectations until you understand them.

Before your customer engages with your product, ask them directly:

"Can you describe what you expect the solution to do? Based on your past experience with other solutions, how do you think you'll use this one?"

You're asking them to predict what their experience will be, so that you can get a sense of what their expectations are.

Write these down. Then ask for more. Encourage them to come up with as many as possible: "And then what do you think you would do?"

Remember when you did customer interviews back in the Finding Early Adopters workbook? One of the rules of those conversations was never to ask the customer about the future (e.g. "How do you think you'd use this product?").

The reason you didn't want to ask about the future then was that they didn't actually know the answer - whatever they told you was going to be wrong and if you listened to them, you'd build the wrong thing.

This time, you do want to ask about their predictions because that's the best way to understand their expectations...so you can exceed them!

If someone asked me what I thought my experience would be like in an autonomous vehicle, I might say:

• A chair in the center
• A docking station for my computer
• Espresso machine in the back

It doesn't matter if I am right or wrong. What is most interesting is what I expect to be there.

Your job is to understand their expectations for your product, and exceed them.

Here's what that might look like.

Recently, I've been shopping for an electric razor. I can walk through my expectations going into the purchase to illuminate how someone selling me a razor may be able to exceed my expectations:

I expect that it will probably come in nice packaging, but that packaging will be a pain to open.

I expect it will have a battery, but that it will need charging before I get to use it. Based on my past behavior, I'll flip through the manual, but I am most interested in how to keep it in the best condition, or "optimal use". And so forth.

When you ask your customers about their expectations, you are simply going to list them must like I have here, and take note of the ones that you can easily exceed.

In the graphic, you can see other ways that the seller of my razor may be able to exceed my expectations and give me a positive emotional experience in using their product over another one.

• Make the package easy to open
• Ensure my battery is charged when it arrives
• Make it easy for me to see the "optimal usage" instructions
• Etc.

Follow this process with your customers. Grab a few and determine, where is the low hanging fruit? What changes can you make to instantly improve their experience and exceed their expectations.

Step 8

To do this, write down your plan for determining their expectations.

In my case, I will immediately reach out to my customers as soon as they make a purchase.

This is similar to what I did with Emotional Delta: I'm going to have a conversation with my customers before they interact with my product to find out as much as I can about their pre-interaction reality.

Choose Your Strategy

There are 4 strategies to increase your LTV. I recommend using one at a time to help you focus your energies - which strategy you choose is up to you.

I'm personally most interested in collecting Emotional Delta data, however this may be difficult to start with, as emotions can be a bit difficult to discuss with founders.

Instead, I might start with Getting Feedback as this is a little more natural of a process. If I don't get enough information to improve my LTV, I'll move on to Emotional Delta. If I can't achieve Emotional Delta, then I'll follow their User Experience to see how they are interacting with my product in real time. Finally, if that's not enough, I'll try Exceeding Expectations to improve their positive experience with my product.

What's Next

You now have 4 great techniques for increasing your Customer Lifetime Value and you know how to incorporate various forms of feedback to make a better solution or product.

You can now apply one or more of these techniques to see if you can get your LTV high enough to achieve your Victory.

Up next, you will learn how to do the same thing with your Viral Coefficient.