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A Data-Driven Future
- 2. MEET OUR TEAM WRITE HERE SOMETHING A DATA-DRIVEN FUTURE HOW CAN YOU EXPLOIT THE FULL POTENTIAL OF YOUR DATA
- 3. MEET OUR TEAM WRITE HERE SOMETHING “The tale of bankrupcies” Time to update how you use data
- 4. With 44% of UK online retailers facing financial ruin and only 20% remaining profitable, the time of being average just isn’t good enough.
- 5. What are the metrics behind their success? Average conversion rate Average order value Average purchase frequency Average gross margin 3.2 % €86 2.78 46.26%
- 6. The gap between winners & average is widening Average conversion rate Average order value Average purchase frequency Average gross margin 0.8 % €23 1.45 32.5% 75.00% 66.28% 75.00% 47.84%
- 7. These companies struggled & bankrupted
- 8. Why did they get it wrong? They were focusing on achieving short-term gains Profit TimeLoss RetentionAcquisition Sales
- 9. The Online Retail Formula CAC < LTV
- 10. The Online Retail Formula
- 11. Breaking down the formula CAC < LTV cost per visit / conversion rate average order value * frequency * gross margin • Free traffic • Paid traffic • Total number of conversions • Cart completion • Divided by Unique session • Total revenue • Divided by number of orders • Number of purchases • Divided by unique customers • % margin • % discount • Leftovers • Returns fulfillment
- 12. MEET OUR TEAM WRITE HERE SOMETHING “Do not spam! Create a dialog” Updated concepts in communication
- 13. Get a picture from multi-touch attribution…
- 14. … use the touchpoints to promote a dialog Campaign Category page No purchase Newsletter Recommendations No engagement Post purchase offer Purchase NPS + survey …
- 15. Adjust costs based on the value delivered… Month Customers
- 16. … or this may happen Month Customers 😁 😢
- 17. Prioritize profit as you do with revenue
- 18. MEET OUR TEAM WRITE HERE SOMETHING “One case for each pillar” Work the online retail formula
- 20. Conversion tricks Wishlist to complement the desired look 21% Conversion
- 21. Boosting AOV 32% AOV Embed recommended products to cart abandonment emails
- 23. Driving margin up Recommend products that improve average gross margins 43% Gross margin
- 24. MEET OUR TEAM WRITE HERE SOMETHING “What to do when you walk away from here” Winning take-aways
- 25. Key learnings Aspire to solve the Online Retail Formula Focus your energy where it delivers the most impact Create a dialog, do not spam Challenge yourselves and grow profitably
- 26. CAC < LTV 1 : 4
- 27. Impact is all – Customer Lifecycle Management
- 28. Apply what you have learned1 Follow exponea.com/blog2 What should be your next steps?
- 29. MEET OUR TEAM WRITE HERE SOMETHING Q&A? BRUNO GORGULHO – HEAD OF SOLUTIONS @ EXPONEA
Editor's Notes
- Hugh gets on stage
- Start with the major UK issue in order to make the stakes clear.
- Talk about the research that we did on 1000 online retail companies and that these are the values that they are reaching. Ask the audience whether they are already reaching some of these values.
- Tell the audience that this is the performance across the online retail landscape and highlight that the average performers are severely underperforming the market leaders.
- Tell the audience that these companies had a trouble reaching those values and tell them a few stories. Such as Fashion Days, where they had, due to their business model (flash sales, delivering the apparel within 2 - 4 weeks) a huge number of returns which in turn reduced the LTV and brought with it costs with handling those returned orders.
- Tell them, that the root cause of why are they getting it wrong is that they are looking at the performance on short-term. The reason may be the lack seniority - they may not know which data they need or they have siloed data, which makes is very difficult to access the entire lifecycle data within a single system.
- Ask the attendees whether this looks familiar. It should be a no-brainer to any marketer, but how many of them actually know its importance?
- Show them that the wider the gap, the faster the company can scale. It doesn’t matter how low LTV you have if your CAC is even lower. The key is to always focus on solving the formula.
- Each of these top level metrics are being influenced by various factors and marketers should be aware of them.
- Hugh gets on stage
- Show the attendees that they will be able to get these details in Google Analytics for example, it’s that easy, but they won’t be able to connect that data to actual customers and their individual (or shared) attributes.
- Show the attendees that they will be able to get these details in Google Analytics for example, it’s that easy, but they won’t be able to connect that data to actual customers and their individual (or shared) attributes.
- When optimizing campaigns, take into the consideration customer retention cohort, even keep it per channel. Do that or you will risk the following: <next slide>
- In 5th month, marketers managed to decrease the cost per acquired new customer by 33 % which resulted that they are acquiring 50 % less customers, but still cost per new customer dropped significantly. The domino effect then followed - natural customer churn stayed the same and since the marketers are bringing in less customers, the number of active customers plateau and starts to decrease. The recovery could take a while. --- Also mention that we perceive CAC as customer acquisition and retention costs, and Its costs 4x investment to acquire a new customer than it does to retain and upsell and existing client. If online retailers continue to focus just on acquiring customers the growth will be short lived and retention will decline. That’s why it’s very important to follow the customers’ lifecycle and try to improve customer experience in order to minimize the decline after the initial purchase in the month they’ve been acquired.
- Show the attendees how returned sales can impact your business. This report is segmented based around customers, the orders they’ve made and their return rate based on the delivery/pick-up method. -> People who get their orders delivered most likely keep the products, it’s a hassle to return it. -> People return the things they buy in brick and mortar stores since they feel that they can just try it out, which increases the overhead. Also mention that, it’s often the problem that marketing reporting doesn’t take into the consideration returned orders and you may be acquiring customers who on the first glance look profitable, but make sure to account for returns.
- Hugh gets on stage
- This is how it looks in FB Ads. The great thing about lookalike audiences is that you can either define your best performing or worst performing customers. With best performing you will be looking to gain new customers, probably at same price that you do now, although with a higher chance for them to turn into champions. With worst performing, you will be able to filter out the customers who may be, in the end, cost you too much (i.e. customers who are returning order a lot) Both tactics should, raise your conv. rate.
- Show your audience an example of an NPS newsletter and a rating (from another company). Also mention what can you do with NPS. Promoter, 9 & 10 -> Ask them to rate you on an external site (we’ve had a great success with that) Hard detractor 0 - 4 -> Hand them over to customer service in order to solve their issues.
- Hugh gets on stage
- Briefly mention the stages & that you can have various campaigns running in the background: ACQUIRE - The purpose is to get them to become customers RETAIN - You should ensures the positive post-purchase experience INCREASE VALUE - Your aim is to increase their frequency or AOV CHERISH - Your goal is to keep their positive experience in order to keep them purchasing. REACTIVATE - Lapsing customers within various stages, make sure you retain them. See more details about the customer lifecycle management here: https://docs.google.com/presentation/d/1_kYrQD05JhnKGiwr6yTdeFvGg5--2CUsAgEYilLj4e8/edit