May 25, 2023

From StarCraft Player to Maximizing Customer Lifetime Value with Valentin Radu

From StarCraft Player to Maximizing Customer Lifetime Value with Valentin Radu
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Over the last couple of decades, Valentin has held a variety of jobs (and launched a few companies). Everything from selling cookbooks on the street to launching an internet service company just because he wanted to play Startcrat on broadband!

Then he launched one of Romania’s largest online car insurance companies doing 3-4M in annual turnover. But they weren’t profitable. 

Based on that experience and discovering why determining customer lifetime value is critical for companies, he runs Omniconvert. His company powers over 20,000 websites including brands like Orange, Sephora and Decathlon. By helping brands be more customer centric through advanced segmentation, Omniconvert is able to help brands better acquire, nurture and retain customers.  



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Past Guests:
Past guests on Innovators Can Laugh include Yannik Veys, Ovi Negrean, Arnaud Belinga, Csaba Zajdó, Dagobert Renouf, Andrei Zinkevich, Viktorija Cijunskyte, Lukas Kaminskis, Pija Indriunaite, Monika Paule, PhD, Vytautas Zabulis, Leon van der Laan, Ieva Vaitkevičiūtė.
Additional episodes you might enjoy:
#55 Yannik Veys - From creating the Uber for service professionals to growing Hypefury
#53 Tzvete Doncheva - Overcoming barriers to get into a VC with Tzvete Doncheva
#50 V...


What was the the message? Do you, do you remember one of the messages you used Valentine? I, I was, I was hunting for old ladies with their nephews waiting for the bus to come because they couldn't hide from me. And the message was how, how, how much do you love your family? And they were like, what?

Because if you, if you change the things that you're cooking for them, they will love you even more than, and I was testing out this type of messages, right. That's Valenti and due, he has had an entrepreneurial journey, unlike any other, he I, one of the first internet service providers in Bucharest because he wanted to be able to place StarCraft with the broadband connection.

He created Romania's largest online insurance company, and currently he's the founder of Omni Convert. It's a solution that empowers retailers to acquire, segment, monetize, and nurture their customers on every channel. I think this was the funniest interview ahead all season in terms of laughing out loud.

If you enjoyed it, let me know. Feel free to send me a message on LinkedIn. Tag me and tell others about it and subscribe if you haven't yet. I greatly appreciate it. Okay, let's dive in. First serious question for you, Valentine. How good of a StarCraft player were you? Well, I wasn't that good, you know, my my, how, how was that thing?

Like BPM or what, what was the, those thing numbers of actions per minute apm. I think my APM wasn't that high, but I was pretty, let's say. Persistent. You know, I wasn't giving up very easily, so I was among the best in my neighborhood, and that led to to building this network and going on the battle net.

Okay. All right. Now, were you competing in any tournaments in ERs, or you just was the best in the neighborhood? Yeah. Yeah, we were competing as well. We were on battle net. We were having this type of, I don't know, guilds or whatever. Okay. Okay. All right. Well, you launched a, an internet service provider because you wanted to play on broadband.

I have no idea. How you, you would even start an internet broadband company. So can you kind of just take us back through that and explain your thought process and how you launched it, how you got it off the ground? Yeah, of course. So imagine that we, we were paying like crazy money to an internet cafe because the internet of the internet was a dial up connection, which wasn't working.

So first of all, we bought some computers and we've heard about the. Network cards, and then we've got some wires, and I've got it from my fifth fifth floor to the, to the first floor to my neighbor, and then there, and the, the building was looking like like a net, you know? And then the administrator of the building said that that couldn't be possible.

And we've said, okay, there's no problem. But we have other neighbors, which you want to connect with us. Anyways, all in all, we've managed to, to build a network. And we were like, it was like a jungle. Like imagine that we've stopped the tramway, you know, in, in, in one of the principle streets in Bucharest to, to, to throw like a rock, which had the, the, the wire, you know, it was a high speed, the internet cable with fiber optic.

Optical fiber over the, the, the wires that were connecting the, the, the tremor. Anyways, there were good times, like back in 90, 99 and 2000 yeah. After that we've we've got this network to have something like 150 people. We were using Vipr Chat and everything go was very slow. So I, I went to to, to the other leaders across the street and we've decided that we need to get some internet.

So we've we've asked for a code at the, the largest internet broadband provider. And he, they said that we need to pay something, something like $100 a month for a high speed subscription, and we need to pay it in advance for $600. So I got to my boss. I was having a job at that time, I was an optician optometrist.

And I've said that I need $300. And she said, for what? For having for building a company. And she said, building a company. Okay. And when, when are you going to pay them back? So when I was scratching my head, I. Eventually, I said that in half a year. Anyway, she was an amazing leader and an amazing lady.

is her name, and she gave me the money. We got the money. We, we, we've built the location and we've rented the, a very small . Place where people were drying their clothes at the, at the first floor of the building in, in one of the, one of the buildings. And we've rented that for people coming and paying for the subscription because there were no, and basically we, we got fluided by demand.

I mean, it was like, We, we've said it's 10 euro a month. And the competition, the competition was a dialup connection, which was 2020 euros a month, and they had 10 times less speed than we had. And it was unheard of. I mean, it was like a dream coming true and people were cuing up in the streets to, to get connected.

Anyway, it was a, was an amazing story. So, so my, my paycheck Eric was like $85 a month. And in something like six month, six months from that, we were making 5,000 euro subscriptions a month. And in two years from that, we were making 40,000. And basically I, I got to my bus to say, I can't work anymore.

My dream was coming through and, and she said, I can't believe it. Have you really made it? Yeah, I can't, I mean, I, I, I couldn't work anymore. It was like I was completely swamped, you know, with two jobs. Okay. No. Okay. Okay. Now this is back when, when what your like early twenties? Yeah. After this I was 20 years old.

Yeah. Okay. So after this, you actually created one of what became, One of the largest online car insurance players in Romania, and you got into like 250,000 customers. Okay. How did that happen? I, I'm normally laughing because of this story that you just told about the internet broadband company. I'm wondering if there's like a, a similar story here or not.

I don't know. There were there, there is I have a friend on, in a different neighborhood that he has something like, like this, but not at but with the same, let's say details, you know. But yeah, there were many network very small networks that that emerged like like this. So yeah, after that company I got we were young and full and my partners weren't let's say.

So open to, to development, you know, I was, I was having these visions about conquering Bucharest and then the, the entire country and then maybe we can whatever. So they weren't sharing the same, they were, they were, their business model was like making the. Cow and I was about going into new territories, you know, like in Star Trek face, the final front chair.

So, so we were fighting over these matters and eventually I I made the exit from that company. And I took all my money to build an agency, an online agency. We were, I, I've said people will need any websites. And I, I thought, because that's the, the, that's the winner's bias or advantage or let's say trap, you know, that Uhhuh, I thought that.

It's going to be the same, where it is not something present where, and I think it's going to be present in the, everyone will have websites. Any company is going to have websites like anyone needs needs internet connection. However, the, the building a company that offered the website development wasn't a good idea back in 2005 because the demand.

Wasn't there. So we were ahead of the, the, the, the demand, which happened around 2009, 2010 here. Mm-hmm. So I, I was struggling to persuade companies to build their website because they couldn't understand it. And yeah, I was almost going bankrupt. Yeah. And at some point I met the, I met an entrepreneur, which was selling car insurance.

And he had this we were at at the, let's say advertising production company, you know, where you are putting all these stickers on your bump on, on your car, and you are putting those advertisements on your car. And he had this. Let's say funny and stupid idea to put like a dwarf on his car saying your insurance is my mission, or something like that.

It was very, but it sounded like like like a rhyme, you know. Yeah, it was catchy. It's memorable. Yeah. And I asked the guy, how come you are selling insurance, but you're using dwarfs? Like, like you are, like, this is like snow White or something like that with the seven Dwarfs. He, he's not there, you know?

I mean, you can't sell insurance. It's about trust or whatever. And this guy, I, I thought that we're going to argue, but I had no problem with, with that because I had some one hour to wait there for, for some stuff for my clients. I was doing a rebranding for a, for a somehow big company in the investments, you know, they were selling this type of investment brokerage company, and we've made the, the entire rebranding for that.

And I was waiting there. So the guy, instead of being offended, He started to ask me things about, and he was so innocent, you know, he, he was so open to, to find out things about, because he said, you know, I have this company selling insurance and I have this small one bedroom apartment at, at the first floor, at the, at the building, and I'm trying to sell insurance online as well.

And I got, got on his website. He had like a very old touch, if you know that Romanian old school brand. It was in flashing, it was spinning like that. And Uhhuh, he had the list of all the prices. So we eventually started to work together. I've, I've looked over the internet. I've seen that the online car insurance, it's going to be a trend and it's going to to to boom in Romania as well.

So we've, we've been the first mover. Initially, I worked with him as a on commission base, but he couldn't afford it anymore because I, I was getting something like 10% of all the revenue that he generated. It seemed like a great idea at the end, at the beginning, but when you scale up a company, you have a lot of Cost that you can't forecast initially.

So it wasn't a good deal anymore. So we ended up being partners and create, building the company together. So that's how it went with the online car insurance company and being okay, let's say bored, to be honest. About payroll. I was buying media, I was running campaigns. It was, it was too boring and the company was stable enough.

And I've said, what's the next big game that I wanna play in my life? And I've said, yeah, let's go internationally. Let's build a company that could go international and scale international and demonstrate that I'm a, that I'm an entrepreneur in the big, in the battle net, you know? Yeah. Yeah. Well that's a good segue because with Omni Convert you've got a lot of big brands with Omni Convert.

I was looking at your website. Hans is one of the largest retailers in the world. Culture King's, one of the leading street wear retailers on the planet. So when these, when these clients, when you start working with these clients, you know, what is, what are the first things they get excited about when they start using your platform and working with Omni Convert?

Yeah, the one of the first things is, is that it blends the qualitative data with the quantitative data. So we are a solution that's very diverse, thanks to that there are, and those, usually, those solutions are, are siloed because the customer journeys are siloed. And what's happening is that you have the data teams looking at all these whatever kind of financial reports, sales reports, whatever.

And then you have the customer service teams, which are looking at things like how the customers are being treated, was their satisfaction levels, but usually those things are disconnected. What we are doing is that we blend them together so that we show. Also how they feel, but also how much they've spent, how, what they are buying, when they are buying their behavior patterns and so on.

So that's one of the first things that sets us apart. Okay. And when I visit Army, I see a welcome message that says, Hey there, we want you to get the most out of this visit. Let us know more about your challenges. What's the best description of your company? And then you guys give some options there.

How did you decide that you wanted to provide this journey instead of just letting visitors navigate on their own? It was, thanks. The, the, the fact that we, we initially ran, ran a survey to understand who are, who is our audience and what they are after. And then we've decided to craft this type of paths for them because it's much more easier to.

To qualify them. This is basically zero party data and understanding that the time is of the essence so people don't have time anymore to, to, to, let's say ski skim three or content and find what they are looking for. And for us it's working better in terms of generating more conversions. It's what, basically eating our own duck food.

Yeah. No, I love that you say that time was of the essence, because the best message is the one that's at the intersection. The customer's needs and what it is you're offering. And no better way to get there for them to just answer, you know, a simple question like that. Like what is your pain point? You know, what are you interested in?

And you don't really see too many two B2B companies doing that kind of customer journey. So when I went to your website and saw that, I was surprised, but also delighted that you guys had that. Okay. Now, when you say, when we say customer lifetime value Valentine, what does that specifically mean to you?

Customer lifetime value? Yeah. So to, to give you the back backstory of how I've got obsessed about customer lifetime value at the insurance company, we were struggling and we couldn't make the cutting more. Some friends of mine, which were working in multinational companies were mocking me because they, they could, they had more money than I did, even though we were making.

Something like three, four millions at that time in annual turnover, but we weren't profitable or the cash flow was, was not always nice to us. So we have decided to look over the data and to look who are our best customers? What, what could I do? So that we break even, because we were spending something like 1 million in annual, our budget, our annual budget was around $1 million.

In ads and basically we were barely breaking even. So I looked at the data and I realized that, you know what, we have some very valuable customers that, not only that they buy they have large AOVs, but they also come back to buy again because they have this customer retention. And then I've started to look at this concept called customer lifetime value.

So I looked over the Harvard Business Review. I've started to calculate it and I've started to look at some anomalies like in our data, the. Truck drivers were the best customers ever. I mean, their a o V was 10 times higher, and their C L V was something like 60 times larger than the average customer.

And for us it was like, that was amazing. So if the, imagine if the lifetime value is 60 times larger, that means your profit that you're gonna get. So the margin that you're gonna get from that customer is 60 times larger than the other ones. And also there were the luxury. Car owners and there were disa anomalies, like only 20% of the customers were generating 60% of our margin.

It wasn't Pareto because I don't believe in par. It's an oversimplification, but basically you need to look at their own data and to find which are the few customers that generate large impact in your business. So lifetime value, customer lifetime value, it's a predictive measure that's giving you the.

Cumulative margin down the line throughout the entire lifespan. So basically it's, it's, it's like a predictive measure of how much you're gonna get from a customer according to the data that you've accumulated from your current customers. Once you dived into this data and you discovered that some of your best customers, for example, were truck drivers, their average or order value was considerably higher.

What did you do? What did you then do with that? Did you have any tools or applications at your disposable disposal to take advantage of that Valentine? No, but we've built one, so basically omni convert. It's is the result of my struggle that I couldn't do this type of realtime personalization because you are being asked to, right?

What's your, what you are trying to ensure? What's your current? Then if it was a truck, we couldn't do anything and that required a lot of extra to do this. If this, then that and the programmers, the developers were. Hating me at that moment because I, I kept on asking them things and at some point I realized, you know what?

Let's build something that allows us to do this. On the market. It was a solution called Adobe Test and Target, but it was incredibly expensive, so I couldn't even think of buying that solution. So I've built one for us and it allowed us to change in real time the, the content of the website and the price according to who's asking for a code on our website.

And that led to. A lot of experiments, like, I don't know, we've changed the website according to the car maker. We've added an interstitial overlay that allowed us to calculate on the back and load up the price, the best price so that we can a b test. What is the best discount that we could give?

So we've changed a lot of things on our website thanks to to, to this technology. And of course, if you are a truck driver, you could get a better, a better deal than our competition offered. And the competitors not that this moment, they, they, they don't know why we've wiped the market at that moment because we were extremely.

Aggressive in terms of the, the discount that they, we were giving and we were calculating between 2% and 18% discount while they were giving to everyone 15%, and that meant they were losing money. From a lot of customers and they were that, that they couldn't lose, you know? Yeah. So basically we've made this personalization of the discount that we are giving according to the price of the goods that we were so selling you, and many, many other things.

Like we've changed it, the, the change the website based on the city that you, you were living in and we were coming up with, I don't know, the, the the city center picture to make it look like. We're a company from, I dunno, Tim, but we were from Bucharest. So we've made all these experiments and eventually in one year we've increased the conversion rate by 60% and that was in 2012.

Wow. Wow. When a new client comes, comes on board, what is the roadmap look like in terms of onboarding them? You know, obviously you're not gonna tell them, okay, you need to do, you know, a hundred things at once, but let's focus on these maybe two or three key things. And what, what, what's like a good example of what that would look like maybe in the first six to 12 months of onboarding a new client?

Yeah, so, What I must add here, Eric, is that we, we have two technologies, right? We have two solutions. One is an AB testing and personalization solution, which is changing the website in real time and whatever. And another one is a customer intelligence platform, which is allowing the retailers and omnichannel companies two Understand their customer, customer does better.

So basically it's allowing them to segment their customers, to monitor the nps, to find who's buying what, and then to, to push this kind of data to different channels, to ads, to email marketing solutions and whatever. So the first thing that we are usually doing is we are. Understanding their data with one of our onboarding specialists, and we allow them to do customer segmentation.

So we are looking at this TTO principle, who are your best customers according to rfm? And RFM stands for recency frequency and monetary value. So the, it's a, it's a way to segment the customers, not only based on their value, but also based on their reasons score, which is the most important. So, Mm-hmm.

Basically, the chances to buy again, are way higher if your recency is higher than if your monitor is higher. Because, because of how the mind works, right? We forget things. So if it's not fresh in our minds, we are not repeating the behavior. And that's why, I dunno, people go to gym and they do it for free six months and then they don't do it.

And as they are lapsing, they, they, they, it's very hard. To get back on track and to, to get that habit. And it's the same with the buying habit, right? That's why you need R F M because you don't need only the monetary, but you also need the frequency, how many orders they've placed and the recency, how many days have passed since the last purchase?

Okay, this is all very exciting. Valentine, what are, what are you excited about in the next 12 months in terms of Omni Omni Convert? So we were excited because we are starting this this movement, this shift of focus from acquiring customers that never come back to customer value optimization. Meaning with the customer value optimization.

You understand? Who are your best customers and you influence the acquisition? So we are, you acquire, I dunno, based on the customer research, you can identify like the, the, the hidden gems, which are some products that if they are being bought, the lifetime value can be two free, four, five times higher, then the average.

And that means your acquisition should focus on these SKUs, not on all the others. So I'm excited about. Launching my book around customer value optimization. I'm excited that we have more students being onboarding in the CBO O Academy. So basically we, we, we are sharing this methodology that it's already proven to other country companies.

And we have agency partners and that's the most exciting thing that we are not alone anymore. You know, I, I've dried my mouth talking about this type of principles for years now. So we started in 2017 and now it's 2023, and we already have. 11 agencies worldwide, which are advocating, they are providing these type of services.

One of the agencies that we've started to work with, they they, they've basically added the half a million dollars in new revenue thanks to this new approach, which is generating undeniable value to their e-commerce companies. And for us, the opportunities that. There is a blood bat out there.

So it's way more expensive to acquire customers than it was ever in e-commerce. More players, same eyeballs. So to, to, you need to pick your battles. And with these methodology, we are, we empower e-commerce companies to be truly data driven and customer centric. So basically those are the most exciting things for me.

Rolling. Okay. Awesome. Awesome. Okay. Now for the last part of the this conversation, we have some rapid fire questions. I'm gonna ask you a quick question. Just tell me the first thing on the top of your head. What is an unusual thing that you've done to make money? Aside from launching the internet broadband company.

I've sold the cookbooks on the street, so I've I've, I've stopped people and that's how I've understood the principles of Conversary. It's about the location, the target, and the message, right? So basically you need to frame the cookbook way more different. And I was like, I think it was, I was 17 years old and I got to the seaside, thanks to that.

What was the the message? Do you, do you remember one of the messages you used Valentine? I, I was, I was hunting for old ladies with their nephews waiting for the bus to come because they couldn't hide from me. And the message was, ha ha, how much do you love your family? And they were like, what?

Because if you, if you change the things that you're cooking for them, they will love you even more than that. And I was testing out this type of messages, right. Okay. Okay. What is a tactic that you do to try and make sure you're hiring a good employee that's gonna be good for the culture and the company and for the business?

Oh, so I thank God that my wife, she's a psychologist and she, she, she's she had uss with the. With the methodology to scan the candidates, basically, where we are using this type of profiling. And I'm, I'm always listening more than I'm talking, so usually, and I can't disclose that because maybe there will be future, future candidates here.

But basically I'm looking at, at the attitude and I'm looking at how smart and in depth are the questions that that they are asking. And for us, it's a, it's a very important thing. To have the right people on the right seat. So not the best, but the right one. There is a huge difference between between that and I'm also interviewing everyone, which gets into the, the, the company.

So we have the hiring manager. If he says yes, they, they get to me and I'm, I'm validating them. Usually I'm not eliminating anyone. But I had I had some of them that got I, I had to refuse. Okay. Okay. What is the most interesting thing that you've done in the last 26 days? Outside of coming onto my podcast in the last 26 days, I've been through the Maldives, so I've celebrated 15 years of anniversary with my wife, and I've finished the book thanks to that because I've carved out some time and it's an amazing spot to, to, to stay in the nature.

All right, well, congratulations on the anniversary, Valenti. Where can people learn more about you? That's on LinkedIn or because I'm very active over there or on YouTube, on our channel on Omni Convert. Or you can simply go to C V O Academy to see what we are after. All right. All right. All right, everybody.

Think about how inspired you feel right now for Valentine's story. Imagine you had missed out on this this dark craft internet cable business launch story here. So if you haven't already, give that subscribe button to push. That way you're notified every time there is a new episode, but more importantly, that you don't miss out on the stories like you just heard right now from Valenti.

All right. This is Eric. Have a wonderful day and I'll see you on the next episode. Thanks