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E-Retailing Approach Customer Acquisition and Retention Webinar


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E-Retailing Approach Customer Acquisition and Retention Webinar

  1. 1. E-Tailing approach:Customer Acquisition & Retention5th webinar of the retail ecommerce seriesan embitel initiative15th Apr 2010 Better eCommerce 2010 Embitel
  2. 2. Speaker Founder dmc digital media center GmbH, Germany Chairman Embitel, India www.embitel.comDaniel• Studied Computer Science at University of Stuttgart• Entrepreneur since 1992• Working in retail e-Commerce for last 15yrs• Responsible for development of e-retail sites like Neckermann, Kodak Better eCommerce 2010 Embitel
  3. 3. Cost per Acquisition Life Time Value of a CustomerIs this the problem you’re facing too? Better eCommerce 2010 Embitel
  4. 4. Agenda• Customer Acquisition Strategies• Customer Retentions Strategies• How To Drive Business Growth• Latest Trends• Do’s & Donts• Success Stories• Summary Better eCommerce 2010 Embitel
  5. 5. Customer Acquisition Strategies Better eCommerce 2010 Embitel
  6. 6. Customer Acquisition Strategy - Online Merchandise SweepstakesUp Sell & Cross Sell Campaigns Viral Marketing Behaviorally Targeted Marketing Promotions SEM (Adwords, …) SEO & SMODisplay Ads (Banner, …) Newsletters Better eCommerce 2010 Embitel
  7. 7. Acquisition Funnel and the Strategy Generate Traffic SEO, SEM, Affiliate, Display Ads, Viral, Newsletter Merchandising, User Centric Design, Attention Cross-/Up-Selling, Interest Product Info, Promotions Research / Enquiry Onsite-Search, Reviews, Rating Orders Sales Support, Simple checkout process, Trust/ Security Aquisition Strategy Better eCommerce 2010 Embitel
  8. 8. Source of generated traffic on Website The Maximum a retailer can afford ! Paid Online Marketing: ~20% SEM, Display Ads, Affiliate Total Traffic Marketing, etc. ~80% Direct & Organic Online Marketing: SEO, SMO, Newsletters, etc Better eCommerce 2010 Embitel
  9. 9. Traffic generation & CPA organic: SEO & SMO Viral Marketing Newsletter CPA paid: SEM Display Ads LTV Affiliate MarketingCPA – Cost Per AcquisitionLTV – Life Time Value of a Customer Better eCommerce 2010 Embitel
  10. 10. Traffic generation over Time Traffic from paid Online MarketingToday? Time Better eCommerce 2010 Embitel
  11. 11. CPA over Time For paid traffic, CPA would remain almost same irrespective of time CPA for paid Online MarketingToday? Time Better eCommerce 2010 Embitel
  12. 12. CPA over Time With Organic growth, CPA is reduced over time CPAToday? Time 48% of 1,230 business executives from cross-functional disciplines indicated "organic revenue growth" is a top business goal this year. Source: Aberdeen Group Better eCommerce 2010 Embitel
  13. 13. Buyer‘s decision stream Where to search for product information? Where to intend to by a product? eMarketplace eMarketplace 34.2 % 49% (Amazon, eBay,...) (Amazon, eBay,...) Search Engine Search Engine 25 % (Google,Yahoo,...) (Google,Yahoo,...) Product search portal/ Product search portal/ Price comparison 26.4% Price comparison 20.2 % (, (, Retailer / Brand / Retailer / Brand / 19.8 % Manufacturer 23.3% Manufacturer (WalMart, Nike, …) (WalMart, Nike, …)Source: dmc inFocus 2010, Survey Better eCommerce 2010 Embitel
  14. 14. Drop-out ratios100% Product overview pages 10-30% Search result page Product Shopping Homepage detail 1-12% pages basket Product inspirations 0,5-6% Product advisor pages 0,25-3% 70-90% 40-90% 50% 50% Exit / Drop out! Exit / Drop out! Exit / Drop out! Exit / Drop out! Better eCommerce 2010 Embitel
  15. 15. Viral MarketingViral marketing describes any strategy that encouragesindividuals to pass on a marketing message to others,creating the potential for exponential growth in themessages exposure and influence. Better eCommerce 2010 Embitel
  16. 16. Viral Marketing - StrategyAn effective viral marketing strategy: • Gives away products or services • Provision for effortless transfer to others • Scales easily from small to very large • Exploits common motivations and behaviors • Utilizes existing communication networks • Takes advantage of others resources=> Let others talk about your products/services Better eCommerce 2010 Embitel
  17. 17. Case Study – MakeMyTrip.comThe video campaign had generated almost 250,000 unique visitors Better eCommerce 2010 Embitel
  18. 18. Customer Retention Strategies Better eCommerce 2010 Embitel
  19. 19. From aquisition funnel to Retention circle Fulfill The Order Retention Interact Feedback Implement Better eCommerce 2010 Embitel
  20. 20. Retention circle and the Strategy Delivery Time Pro Active Order Status Updates Fulfill Online SurveysE-Newsletter Prod ReviewsE-Mail Service Center Interact Feedback Social Media &Social Media & Communities Communities ImplementRetention Strategy Membership Programs Frequent buyer programs Better eCommerce 2010 Embitel
  21. 21. Low customer return rates Delivery not meeting expectations / promises Poor products Slow/Poor Customer Service -> Low customer satisfaction Reduce Customer Returns CPA LTV Good Customer Service Order fulfillment Targeted Promotions Loyalty Club -> High customer satisfactionCPA – Cost Per AcquisitionLTV – Life Time Value of a Customer Better eCommerce 2010 Embitel
  22. 22. Important to collect data Fulfill Interact Retention Feedback Implement Better eCommerce 2010 Embitel
  23. 23. Customer SegmentationYour Best Customers Spend on ServiceBest Hope Spend on MarketingLaggards Re-activate / Archive ExampleImplement Retention Strategyat every stage of customer lifecycle Better eCommerce 2010 Embitel
  24. 24. Leaders AverageCompany Name Zappos Saks Avg of 100 RetailersNo. of hrs for e Mail 0.98 0.88 20.69responseNo. of business days for 1.0 4.0 4.05delivery A comparison for Customer Service and fulfillment Leaders Vs Average (USA) Better eCommerce 2010 Embitel
  25. 25. How To Drive Business Growth Better eCommerce 2010 Embitel
  26. 26. CPA LTV LTV or CPA What should be the objective?CPA – Cost Per AcquisitionLTV – Life Time Value of a Customer Better eCommerce 2010 Embitel
  27. 27. Traffic generation over Time Traffic from paid Online MarketingToday? Time Better eCommerce 2010 Embitel
  28. 28. Driving Business Growth Better eCommerce 2010 Embitel
  29. 29. Balanced model CPA LTVCPA – Cost Per AcquisitionLTV – Life Time Value of a Customer Better eCommerce 2010 Embitel
  30. 30. Do’s & Don’ts Better eCommerce 2010 Embitel
  31. 31. Model could break SEO & SMO Low customer satisfactionViral Marketing Low customer return rates Newsletter CPA LTV Better eCommerce 2010 Embitel
  32. 32. Do’s• Keep in touch with your customers regularly & relentlessly• Reward repeat customers• Share customer data that is gathered with everyone within a company• Get regular feedbacks• Keep your promises• Know, how to apologize• Monitor & Track your customers• Personalize as much as possible Better eCommerce 2010 Embitel
  33. 33. Don’ts• dont let your own mistakes cause your customers to leave!• dont neglect to understand you customer when they visit you• dont just aquire, but also retain the customer by good products and services• dont focus only in mass marketing• dont force customers come to you• don’t spent time on all users, find your target segment and work hard on them Better eCommerce 2010 Embitel
  34. 34. Latest Trends Better eCommerce 2010 Embitel
  35. 35. Behavioral MerchandisingRecommendation withinE-Mail newsletter Better eCommerce 2010 Embitel
  36. 36. 3 Step communication approach Interact with your consumers proactively Shop and Buy Pack & Delivery wait 4 weeks Order Delivery Feedback confirmation notice request e-mail e-mail e-mail 53% 61% re-order rate 77% 100% 42% customer care costs 31% Better eCommerce 2010 Embitel
  37. 37. Success Stories Better eCommerce 2010 Embitel
  38. 38. Case Study - Zappos• Zappos is a service company which sells shoes, clothing, handbags, eyewear, watches etc. Over 1000 brands, over 2,00,000 styles, over 900,000 unique UPCs• Zappos “is powered by Service”• On any given day, about 75% of purchases from returning customers• Repeat customers have higher order size• Create WoW experience – For example by upgrading them to overnite shipping Repeat Customer Data for Better eCommerce 2010 Embitel
  39. 39. Case Study – TescoEstablished loyalty programs that thank customers for previous purchases ratherthan encourage them to buy moreTesco collects data on each categories of items purchased by more than 10 millionClub card members.It analyzes this tsunami of data to send a magazine with segment-specific contentand six highly targeted coupons to each member four times a year.Four coupons are for products the customer already bought, and two are forproducts that the customer has never bought before but is likely to buyMany promotions just rob future sales, but the analysis enables Tesco to generatemore than £100 million in incremental sales each year. Better eCommerce 2010 Embitel
  40. 40. Summary Better eCommerce 2010 Embitel
  41. 41. Find the right mix of actions for your Strategy Balance between Acquisition and RetentionBe aware of what’s happening and respond pro-active Best-in-class can be x-times better Better eCommerce 2010 Embitel
  42. 42. Our Company• E-Commerce service company • 250+ employees at since 1995 Stuttgart HQ, Germany• e-commerce and e-business • 80+ employees in Bangalore projects in 30+ countries (incl. • Offering E-Commerce services in Europe, US, Australia, Japan) India and overseas• Responsible for … – consulting – 75+ Webshops – design – USD – technology E-Commerce Order Volume/year – hosting – 5.000.000+ – shop management E-Commerce Transactions/year – online marketing (SEO, SEM, SMM) Better eCommerce 2010 Embitel
  43. 43. List of webinars• Webinar 1: E-Retailing - A perfect storm in India• Webinar 2: Essence of Retail e-Commerce and its optimization• Webinar 3: SEO - More Visibility, More Traffic & More Sales for free?• Webinar 4: Social Media Marketing Better eCommerce 2010 Embitel
  44. 44. Thank you for your interest! Any questions?Daniel / dmc systems India Pvt Better eCommerce 2010 Embitel
  45. 45. BACKUP SLIDES Better eCommerce 2010 Embitel
  46. 46. Videos for example•The top 10 picks for February, with links to view on YouTube:•1. Bud Light – Clothing Drive, agency: DDB2. Sussex Safer Roads Partnership – Embrace Life, agency:Rockutainment3. Old Spice – The Man You Could Smell Like, agency: Wieden& Kennedy4. Google – Parisian Love, agency: Google Creative Lab5. Nolan’s Cheddar – Mousetrap, agency: John Nolan (parodyad)6. Puma – Hardchorus, agency: Droga57. Snickers – Pick Up Game (Super Bowl), agency: BBDO8. Doritos – Gym Ninja (Super Bowl), agency: GoodbySilverstein and Partners9. Cerveza Andes – Teletransporter, agency: Del Campo NazcaSaatchi & Saatchi10. Burton – Shaun White Double McTwist, agency: N/A Better eCommerce 2010 Embitel
  47. 47. THE END Better eCommerce 2010 Embitel