Bake retention into your eCommerce Pie - ecommerce webinar
Webinar: Bake retention into youreCommerce Pie29 January 2013 Adam Dorrell John Ireland CEO Directness Sales Director, EMEA & APAC Adam.email@example.com Physical Commerce Group, Digital River firstname.lastname@example.org *Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.
Introductions John Ireland, Sales Director EMEA and APAC Consumer Electronics at Digital River Adam Dorrell, CEO, Directness
Introduction• Who this is relevant to: – Ecommerce professionals – B2b and b2c sales• What we will cover: – Make the most from your existing customer base – Utilise your most loyal customer to help acquire new buyers (at low or no-cost). – Using Net Promoter® as a benchmark – Useful tips from real clients• Who we are and our credibility: – Adam Dorrell • Former Director ecommerce for Sony Europe, marketing (Dell, eBay), advisor to Philips and Canon ecommerce – John Ireland • Sales Director leading ecommerce vendor, 14 years in ecommerce (ebay) *Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld. Thomas S Watson, IBM 1921
ADVERTISEMENT A word about CustomerGauge…• CustomerGauge is the leading real-time Net Promoter® measurement platform. – Complete workflow and service recovery system – B2b, b2c and b2e solutions – Automated reporting and digital signage – Automated, with integrations to CRM systems including SalesForce.com – 32 languages (reporting system in EN, DE, ES, FR, NL, CN)• Launched 2007• HQ Amsterdam, global coverage with partners
It costs to acquire a new customer….• Typical methods – Advertising – Adwords = €166• A real life example. – Cost per keyword “Notebook PC” = €2.50 – Site conversion 1.5% – i.e. only one in 67 bought – Total acquisition cost = €166• Total Adwords spend: – In one quarter: €1m+ – Drove around 40% of sales• Total spend on Retention: – In same quarter: €52,000 – Drove 22% of sales You can work the examples yourself
Remember this number SALES VALUE Magic Customers Your top 8% customers = 48% revenue 8 = $HALF• Work out most valuable customers• On average, 8% ecommerce customers is nearly 50% revenue, take from average of 7 major sites• On one site, just 1% is 21% business! Just 8% of ecommerce customers contribute 48% revenue.
Retention Customers “MAGIC 8”• • On average, your top 8% customers order at 4x frequency of bottom 90% On average, the top 10% of customers are 20x worth 15x the value of the bottom 90%. – On one site, the top segment was worth 22x business! value Top customers are worthYou can useCustomerGauge as an 10 – 20x the value of theexcellent tool tounderstand your customer bottom 90%lifecycle value
The Economics of Poor Customer Experience It’s the customers thatCase Study numbers from Gartner 2004. don’t complainAssume 20m customersRevenue = €6000m per yearAverage Revenue that you need to per Customer = €300 per year worry about… At risk — 34% 30,000 customers Issue not resolved €9m 25,000 customers Complain Defect — 28% €7m 2% 90,000 Poor experience customers 22% 4.4m Resolved — 38% customers Don’t At risk — 55% 2.4m customers Positive complain 4.31m Decline in wallet $711m experience 98% customers share 78% 1.94m customers Defect — 45% €582m
So how to keep hold of your customers?• Spoil them! – Hint: It’s not always giving them money off…• Get feedback and act on it• Tell customers what you learned• Give them tools to promote youRead the “Tipping Point”by Malcolm Gladwell tounderstand about your1% “superfans”
Net Promoter in anutshell• No more 40 page surveys to a few contacts!• Ask everyone a very short survey, two questions – “How likely are you to recommend us to a friend or colleague?”• Report on Promoters or detractors.• One score• Read customer commentsDownload our cartoon guide:http://customergauge.com/tag/nps-comic/
Ask after everytransaction• Short survey based on Net Promoter Score – One question – One comment• EXPECT +30% response• Track Metrics – Segment your customers• Read commentsMake sure your survey is mobilecompatible – nearly 40% surveysanswered on a phone!
Acting on responses“MAGIC 8” • Organise and be ready – Expect 50% or more of the responses to give comments – Read every comment – One in a hundred will give you a brilliant idea • Get the comments to the right people – CLOSE THE FEEDBACK LOOP – Best practice: 24 hours • Categorise, and deal with issues tactically or strategically TIP! Set up a VIP desk for the “Magic 8”
Value & Loyalty Matrix Customer Segmentation Magic 8 Take actions to Rescue Key customers IN DANGER OF Value RESCUE REWARD (spend, profit) defecting & LOWER PRIORITY Reward Key customers who can help Detractors Promoters grow sale LOYALTY (Net promoter score)
Loyalty Revenue Report“EXTREME 1%” Average spend for non response = EUR 114 For a promoter = EUR 221 (nearly double!) Top Promoters spend EUR 3172 Top 1% Customers = 21% revenue
Activate promoters• • Promoter Activation campaign: – Identify the promoters who scored highly on “I would be likely to recommend” Say “Thank You” $60 Sold per Email!• Offer a gift for them, and two friends…• Recent result: – Up to 80% open rates – Sales result, averaged at EUR 40 for every email sent…
Summary “MAGIC 8”• Find your “Magic 8” and use to boost sales• Use a solution like CustomerGauge for: – High customer engagement (30%) – Customer Rescue activity – Learn from feedback – Identify your best customers and Activate promoters *Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.