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Customer Centric E-Commerce Testing By Aaron Levy

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From the SMX West Conference in San Jose, CA March 13-15, 2018. SESSION: Winning More Customers With E-commerce Offer Testing. PRESENTATION: Winning More Customers With E-Commerce Testing: Bridging the Gap Between Testing and Innovation - Given by Ayat Shukairy, @ayat - Invesp, Co-Founder. #SMX #34C

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Customer Centric E-Commerce Testing By Aaron Levy

  1. 1. #SMX #34C @bigalittlea Chasing customers that matter CUSTOMER CENTRIC ECOMMERCE TESTING
  2. 2. #SMX #34C @bigalittlea HI! I’M AARON! 12 years of digital-y stuff senior team lead at Elite SEM #teamrumham I teach at Drexel & UVM @bigalittlea | aaron@elitesem.com
  3. 3. #SMX #34C @bigalittlea Elite slide
  4. 4. #SMX #34C @bigalittlea 80% of the income in Italy was received by 20% of the Italian population. Translated to economics, 20% of inputs are responsible for 80% of outputs. Vilafredo Pareto economist, philosopher, barista
  5. 5. #SMX #34C @bigalittlea Pareto’s Principle 80% of revenue from 20% Of customers 0% 20% 40% 60% 80% 100% $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 top 10% 20% 30% 40% 50% 60% 70% crap customers Revenue Cumulative Percentage
  6. 6. #SMX #34C @bigalittlea Order A: $100 Sale Shopping Ad 5:1 ROAS $20 Profit New To File Order B: $150 Sale Affiliate Link 15:1 ROAS $40 Profit New To File Which Order Do You Want?
  7. 7. #SMX #34C @bigalittlea Which Customer Do You Want? Order A: $100 first order Shopping Ad 5:1 1st Order ROAS Order B: $150 first order Affiliate Link 15:1 1st Order ROAS 3 month repeat rate 2.5 year lifespan Steady basket size $1,000 LTV, $380 LTP 6 month repeat rate 2 year lifespan Sales only $400 LTV, $115 LTP
  8. 8. #SMX #34C @bigalittlea Which Customer Do You Want? Customer A: Customer B:
  9. 9. #SMX #34C @bigalittlea Test 1: Peak Period Promotions
  10. 10. #SMX #34C @bigalittlea To discount or not to discount? What’s better marketing? What’s more profitable? Peak period where everybody discounts everything Better than always-on new customer offer Tested primarily in Facebook – unique code minimized noise Acquisition + Retargeting
  11. 11. #SMX #34C @bigalittlea numbers indexed in thousands, 1 day click CTR% CVR% CPA CPM ROAS Orders Rev Gross Profit Net Profit ROI Total Stock 1.8% 1.7% $77 $24 278% 23.4 $1,666 $600 $240 $1.23 Promo 1.4% 2.5% $71 $26 299% 19.6 $1,394 $466 $149 $1.16 ACQ Stock 1.8% 1.6% $80 $23 267% 18.8 $1,341 $502 $201 $1.24 Promo 1.1% 2.6% $79 $23 269% 9.6 $682 $254 $81 $1.19 RTG Stock 1.9% 2.6% $63 $32 317% 3.0 $202 $64 $25 $1.18 Promo 1.7% 3.5% $61 $35 325% 7.2 $474 $146 $47 $1.14 No Promo Wins!
  12. 12. #SMX #34C @bigalittlea What if media cost the same? The wins are negligible No Promotion 273% ROAS $25.69 CPO $727k Gross Profit $201k Net Profit 1.56 ROI Promotion 288% ROAS $23.74 CPO $755k Gross Profit $242k Net Profit 1.60 ROI
  13. 13. #SMX #34C @bigalittlea Share these #SMXInsights on your social channels! #SMXInsights §Paid media favors stability. –switching creative to push a short term promotion? BETTER be good §Optimize to profit + ROI, not ROAS
  14. 14. #SMX #34C @bigalittlea Add Your Presentation Subtitle Here Test 2: The Idiot Test Test 2: How Smart Is My Audience?
  15. 15. #SMX #34C @bigalittlea Which is bigger?!? Testing discount thresholds, % and $ off yields one conclusion: People are suck at math Sale Type CTR CVR ICR AOV Discount 25$ Off $150 12.2% 3.6% 0.44% $183 $25 20% Off $150 10.6% 4.0% 0.42% $177 $35.4
  16. 16. #SMX #34C @bigalittlea What’s in a name? Does it matter what you call your promotions?? Easter Sale: 7.0% CTR 8.5% CVR $41 CAC Great Big Sale: 9.5% CTR 10.8% CVR $34 CAC …Sale: 12.5% CTR 18.5% CVR $27 CAC Great Big Sale: 14.9% CTR 19.9% CVR $25 CAC
  17. 17. #SMX #34C @bigalittlea Share these #SMXInsights on your social channels! #SMXInsights §People can be numb. –The simpler the offer, the better the result –Make your promotions feel special
  18. 18. #SMX #34C @bigalittlea
  19. 19. #SMX #34C @bigalittlea Test 3: Find Your Future Best Customers
  20. 20. #SMX #34C @bigalittlea You’re having your first kid. What do you need? Who’s buying??
  21. 21. #SMX #34C @bigalittlea
  22. 22. #SMX #34C @bigalittlea You’re having your first kid. What do you need? Who’s buying??
  23. 23. #SMX #34C @bigalittlea Buy Once Buy Lots
  24. 24. #SMX #34C @bigalittlea “…you might wanna close your windows before the sun hits Diaper Hill.” “Look Dad, I’m king of the mountain!” …a huge consumable 1st order is not from a 1st time parent
  25. 25. #SMX #34C @bigalittlea Customer Cohort Analyses #SMX #34C @bigalittlea Keys to our best customers Media behavior did not indicate customer value • Mix of small quantity consumable purchases • Heavily engaged site behavior • Long path to conversion • ~5 year customer lifespan!!!
  26. 26. #SMX #34C @bigalittlea Share these #SMXInsights on your social channels! #SMXInsights § Understand what your best customers buy first. – Find where those purchases come from and get aggressive!
  27. 27. #SMX #34C @bigalittlea Test 4: The Contrarian Audience #SMX #34C @bigalittlea
  28. 28. #SMX #34C @bigalittlea When do (normal) men buy purses? 5 major occasions…
  29. 29. #SMX #34C @bigalittlea Christmas + Valentine’s Anniversary + Birthday When we get in trouble L
  30. 30. #SMX #34C @bigalittlea Christmas + Valentine’s Duh, easy. Short buying cycle, lack of creativity Anniversary + Birthday When we get in trouble L Annualized!
  31. 31. #SMX #34C @bigalittlea BOUGHT 300-365 DAYS AGO (we forget sometimes) OPPOSITE SEX (no presents for me!) ECSTATIC GIFTEE CREATIVE (every dude’s aspiration) CONVENIENCE + DELIVERY SPEED (if she’s happy, the price doesn’t matter) ALL OF THE MEDIA! (perfect customer + perfect creative + perfect timing)
  32. 32. #SMX #34C @bigalittlea Share these #SMXInsights on your social channels! #SMXInsights § Identify which metrics really matter. Don’t chase revenue alone. § Be smarter than your audience. § Find and exploit your best customers’ habits. Don’t chase the 80% § Your best customer may not be who you think they are!
  33. 33. #SMX #34C @bigalittlea aaron@elitesem.com #SMX #34C @bigalittlea THANK YOU! FIND YOUR BEST CUSTOMERS WITH #SMX

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