an17 exhibitor insights_tuesday_the analytics playbook
TRANSCRIPT
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f17 The Analytics Playbook of High-
Growth MerchantsROBERT MOORE, Head of Analytics, Magento Commerce SEAN FISHER, Director, eCommerce, Signature Hardware
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The Analytics Playbook of High-Growth
Merchants
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Robert J MooreHead of Magento Business Intelligence @robertjmoore
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Our Mission is to Inspire & Empower Data-Driven People
Customers Include:
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Sean FisherDirector of eCommerce
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• Founded in 1999, • Online retailer of products for
bath, kitchen and home • Based in Northern Kentucky
☆IR Top 500 (#222)☆IR 50 Fastest Growing☆IR Hot 100 2015☆2015 IR Excellence Award
Redesign of the Year
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The 3 Key Growth KPIsAcquisition
Retention
CLV
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Customer Acquisition
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Acquiring New CustomersMonthly New Customers by Quartile
By the end of year two, top performers acquire 5x more customers every month than their counterparts.
10
Q1 Q2 Q3 Q4
Months in Business 360
New
Cus
tom
ers i
n Th
ousa
nds 8
6
4
2
0
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Expanding Your Customer BaseTotal New Customers by Quartile
By the end of year three, top ecommerce companies have a customer base that is 2.5x larger than the next-best group.
Q1 Q2 Q3 Q4
Months in Business 360
New
Cus
tom
ers i
n Th
ousa
nds
25
50
75
125
150
175
200
225
100
0
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Signature Hardware Perspective
New customer acquisition is still relevant for established retailers, just through a different lens.
Sean FisherDirector of eCommerce
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Signature Hardware’s First 36 MonthsTotal New Customers
Longer wait for exponential growth in high consideration verticals.
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Signature Hardware’s Last 6 YearsTotal New Customers
No longer exponential, but still growing.
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Customer Acquisition:Holiday Strategy
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It’s No Surprise: The Holidays Are HugeNew Customer Acquisition Month
24% of customers are acquired during the holiday months.
Jan
New
Cus
tom
ers
1.75
1.5
1.25
1
.75
.5
.25
0Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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But Not All Dollars Are Spent EquallyRepeat Spending Proportions, First 6 Months
Rest of Year Black Friday Weekend Black Friday w/ Discounts
100%
80%
60%
40%
20%
0%
$1.00
$0.81
$0.74
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The Solution: Know What You’re AcquringRepeat Customer Rate
Focus on acquisition channels that drive higher repeat rates.
SOURCE 1
SOURCE 2
SOURCE 3
Perc
ent o
f New
Cus
tom
ers W
ho P
urch
ase
Agai
n
Weeks Since First Order0 18
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Important ConsiderationsSolution: Customer Segmentation• Acquisition Channel• Geography• Product Category• Promotions or Discounts• Customer Support Interactions
Optimize for:• Repeat Purchase Rates• Customer Lifetime Value (CLV)
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But How? Data Consolidation!
Web/ Mobile Analytics
Customer Support
Shopping Cart
Email Marketing
AdPlatform
BackOffice
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Join Disparate Data Silos for Actionable Analytics
• Email Address• Tickets Filed
Orders• Email Address• Purchase Amount• Number of Orders
Customer Support Database Transaction Database
• Are customers more likely to come back if they interact with support?• Are customers from Facebook Ads worth more than Google Ads?• How often do customers who use coupons come back again?
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Signature Hardware Perspective
Seasonality is worth studying even if your business does not have a peak season around the holidays.
Sean FisherDirector of eCommerce
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Non Holiday Peak SeasonalityNew Customers – Q1 Leads the Way
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Non Holiday Peak SeasonalityRepeat Spending Proportions
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Customer Retention:The Data
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Customer Retention is DifficultPercent of Customers Placing at Least N Orders in Their First Year
68% of customers will never purchase a second time.
1 2 3 4 5 60%
25%
50%
75%
100%
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Repeat Purchase ProbabilityRepeat Purchase Probability During the Customer’s First Year
32%
53%
1.0
0.75
0.5
0.25
02 3 4 5 6 7 8 9 10
Number of Orders
Repe
at P
urch
ase
Prob
abili
ty
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Revenue from Repeat PurchasesRevenue From New & Repeat Purchases, Bottom Three Quartiles
Perc
ent o
f Rev
enue
0
New Repeat
Months in Business 360
10
20
30
40
50
60
70
80
90
100
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Revenue from Repeat PurchasesRevenue From New & Repeat Purchases, Top Quartile
Perc
ent o
f Rev
enue
0
New Repeat
Months in Business 360
10
20
30
40
50
60
70
80
90
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Customer Retention:Driving Loyalty
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Signature Hardware Perspective
• Determining loyalty is difficult for low repeat businesses.
• Loyalty has to go beyond repeat: customer satisfaction drives WOM.
Sean FisherDirector of eCommerce
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Repeat Purchase ProbabilityRepeat Purchase Probability During the Customer’s First Year
32%
53%
1.0
0.75
0.5
0.25
02 3 4 5 6 7 8 9 10
Number of Orders
Repe
at P
urch
ase
Prob
abili
ty
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Repeat Purchase ProbabilityAverage During Customer’s First Year vs Signature Hardware
Number of Orders
Repe
at P
urch
ase
Prob
abili
ty
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2 3 4 5 6 7 8 9 10
Ave Customer’s First YearSignature Hardware
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Repeat Purchase ProbabilityAve. Customer’s First Year vs Signature Hardware vs Signature Hardware AOV $900+
Number of Orders
Repe
at P
urch
ase
Prob
abili
ty
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2 3 4 5 6 7 8 9 10
Ave Customer’s First YearSignature HardwareSignature Hardware AOV 900+
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Customer Satisfaction vs Direct Traffic Revenue
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16Jul-1
6
Aug-16
Sep-16
Oct-16
Nov-16$600,000.00
$700,000.00
$800,000.00
$900,000.00
$1,000,000.00
$1,100,000.00
$1,200,000.00
$1,300,000.00
4.4
4.5
4.6
4.7
4.8
4.9
5
Direct Revenue Customer Satisfaction Score
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Customer Lifetime Value:The Data
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Inputs: AOV and Repeat PurchasesCLV-365, AOV-365, & ANO-365 by Revenue Quartile
$0 $25 $50 $75 $1000
1
2
3
4
Aver
age
Num
ber o
f Ord
ers
Average Order Value
Q1 Q2 Q3 Q4
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Your Top CustomersCLV-365 Histogram
0
Cust
omer
Life
time
Valu
e
25 50
Percentile
75 100$0
$1000
$2000
$3000
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CLV Case Study
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Deep Segmentation: CLV Stores
HIGHEST CLV HIGHEST CLV LOWEST CLV
20%
33% 67% 75% 20% 33% 67%
Purchases Again$300 CLV
Never Purchases Again$150 CLV
Receives Subscription Order
$300 CLV
Unsubscribe$100 CLV
Never Purchases Again$50 CLV
Purchases Again$200 CLV
New Customer Purchases$150 CLV
20% 60%
Subscribes on First Order$250 CLV
Purchases in Bulk on First Order$200 CLV
Purchases Single Itemon First Order
$100 CLV
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Segmenting CLV Informs Smarter Actions• Know what “next action” drives the highest expected value
for a given customer’s CLV
• Understand the likely CLV of customers by channel based on their early behaviors
• Spend your time and energy focusing on the most impactful customer populations
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CLV - Signature Hardware Perspective
• Aligning advertising toward the most accurate efficiency metrics• Lies, damn lies, and analytics
• Finding propensity for repeat by initial cart value
• Driving revenue through higher AOV
Sean FisherDirector of eCommerce
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Raising AOV – Creative Merchandising
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Raising AOV – Continual Price Testing
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RecapInstrument your data for maximal customer insight
Understand your customer segments and levers
Keep your audience engaged and coming back for more
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Q&A
Robert J [email protected] @robertjmoore
Sean [email protected]
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Thank You!