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eCommerce customer retention survey

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While attending Magento Live Europe in Barcelona, Valentin Radu interviewed 51 participants on the topic of customer retention and customer-centricity. These are the insights coming out of this survey

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eCommerce customer retention survey

  1. 1. 1Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) eCommerce Customer Retention Survey
  2. 2. 2Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) “Eighty percent of CEOs believe they deliver superior customer experience. Only 8 percent of their customers agreed.” Bain & Company survey Source: https://www.cmswire.com/customer-experience/80-of-ceos-couldnt-be-wrong-could-they/
  3. 3. What to expect from this presentation Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) While attending Magento Live Europe 2018 in Barcelona, I took the opportunity to address a couple of questions to the event participants. Objective: Understand their take on customer retention and customer-centricity This is what came out of that short onsite survey
  4. 4. 4Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) 51eCommerce respondents took the Retention survey onsite @ Magento Live eCommerce Manager, 34% Developer, 24% C-Level (CEO, CMO, CTO), 16% Product, 12% Other (Data, Solution), 14%
  5. 5. 5Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) 52% of the respondents come from Home & Deco, Fashion and Electronics industries
  6. 6. 6Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) 65% of all respondents report high to brutal competition in their industries We live in highly competitive times Brutal, 27% High, 37% Quite, 22% So and so, 14% Shark pictogram created by Bakunetsu Kaito from the Noun Project
  7. 7. 7Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Participants reported these industries as being highly competitive Electronics 5 out of 6 participants reported High and Brutal competition in their markets Fashion 9 out of 10 participants reported High and Brutal competition in their markets Home & Deco 5 out of 10 participants reported High and Brutal competition in their markets Sport apparel 3 out of 4 participants reported High and Brutal competition in their markets Question asked: “How competitive is your market?”
  8. 8. With brutal competition and limited markets, businesses need to pivot towards retaining customers for their growth 8Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018)
  9. 9. “Growth is not a question of acquisition, but one of retention” Anita Andrews, Director - Analytics Practice, Magento Services 9Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018)
  10. 10. Only 28% of the eCommerce companies reported that they have someone responsible for customer retention. 10Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018)
  11. 11. 11Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Q: Do you have a budget allocated for customer retention? 63% reported not having a budget allocated to customer retention.
  12. 12. 12 Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Q: Do you have someone responsible for retention? 72% reported not having a dedicated team or individual focusing on customer retention.
  13. 13. Q: Correlation between revenue size and respondents answering YES to having a dedicated person for customer retention 13Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) – The bigger the revenue the higher the chances for that company to have someone responsible for customer retention; – Companies with >100M euro revenue are the only ones that reported having a special department created for customer retention When correlating revenue size with customer retention focus
  14. 14. 14Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Low focus on retention is also seen in the KPIs monitored Q: “What KPIs are you currently monitoring?”– There is still a big focus on sales-driven KPIs (i.e. AOV and CAC) – While Customer-centric KPIs (i.e. Customer Retention and NPS) still fall behind on the agenda. – Only 25% participants report measuring Customer retention Cost → only few participants are aware of retention benefits.
  15. 15. “acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. [...] increasing customer retention rates by 5% increases profits by 25% to 95%.” Extract from Harvard Business Review article - The value of keeping the right customers 15Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Source: https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
  16. 16. RFM Segmentation in Customer Retention 16Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Monetary What’s the monetary value of all the orders placed by a customer in his lifetime relationship with your store – RFM helps Marketers segment their database into customer groups of different values (i.e VIP, Active, Dormant, Lost) – Through RFM Segmentation, online stores can create personalized web / emailing campaigns offering their customers relevant experiences – It also surfaces the most important customer segment to consider Frequency How many orders has a customer placed in all his lifetime relationship with your store? Recency How recent did a customer place an order with your store?
  17. 17. When asked about RFM Segmentation usage 17Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Only 24% reported using RFM on their customer database. This may indicate that creating personalized experiences for customers is still a new process. Most of the participants who mentioned YES, correlate RFM with email marketing. Q: “Are you using RFM Segmentation?”
  18. 18. 18Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) That’s it from my side In conclusion I would like to leave you with this
  19. 19. 19Omniconvert / 22 Oct 2018 / Survey conducted at Magento Live Europe 2018 (9-10 Oct 2018) Growth is not an accident. It’s the natural consequence of retention.
  20. 20. Valentin Radu www.omniconvert.com/growth-engine https://uk.linkedin.com/in/valentinradu Got questions?

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