Facebook for business can help your business in a multitude of ways. Arguably one of the most important is figuring out how much of a net profit your customer will gain throughout the duration of your relationship with them. This is also known as customer lifetime value. It’s a numeric representation that can be broken down into multiple factors:
- How often a customer makes a purchase
- How much they spend when they do
- How much you project they will spend over time while working with you
- The potential length of your relationship together
It’s advised to never base the numeric representation off of one of these factors alone, but rather combine all of them. By doing this, you receive a much more accurate number that can really help you determine the projection of your time together.
Figuring out your customer lifetime value is especially relevant for value-based Lookalike Audiences. If you add a customer lifetime value column to a file you’re uploading to create a Custom Audience, you can use that Custom Audience as a source for a value-based Lookalike Audience. On its own, it will create a list of customers most similar to yours. To create this, you must follow these steps (as per Facebook Business Ads Help Center):
- Go to your Audiences.
- If you already have audiences, click the Create Audience dropdown and select Custom Audience.
- If you don’t have any audiences, you’ll see audience creation buttons rather than a dropdown. Click Create a Custom Audience.
- Click Include LTV for better performing lookalikes.
- Accept Facebook’s Business Tools Terms via Ads Manager.
From there, there are five other parts to creating your CustomAudience:
- Add list
- Select customer value
- Edit data mapping
- Hashed upload & creation
- Next Steps
Though this might feel daunting, Facebook will help you throughout this process, so there is nothing to fear. Calculating the net profit has never been easier, and with a company as big and experienced as Facebook, you are sure to have a healthy symbiotic relationship with your customers.