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Customer aquisitionandretentionstrategy v3

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Case study and examples of how to get new customers and keep them.

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Customer aquisitionandretentionstrategy v3

  1. 1. Customer acquisition and retention strategy • Business Objectives • Strategy • Tactical Framework • Examples (LTV, CAC) • Learn • Segment and survey • Test and discovery • AB Texting • Evaluation • Promote • Insights
  2. 2. CUSTOMER ACQUISITION COST < Lifetime Value Creating a strategy requires a process of discovery to find the correct balance Acquisition, Conversion, Referral Retentions, Loyalty, UX A Balanced Business Model
  3. 3. Strategy for lowering CAC and increasing LTV through a fully integrated virtuous cycle of Learn, Test, Promote WE CAN NOW CREATE A CONTINUOUS FEEDBACK LOOP USING ACTIONABLE ANALYTICS FOR AGGREGATING DATA FROM DISPARATE SOURCES, RUNNING ADVANCES SEGMENTATION, TARGETING AND RETARGETING CUSTOMERS ACROSS MULTIPLE CHANNELS THAT WILL ULTIMATELY GROW THE CUSTOMER BASE. Learn Test Promote
  4. 4. Return & Refer Tactical Digital Shopper Marketing Journey Framework Awareness Consideration Purchase Intent Loyalty & Advocacy Find the triggers that are driving conversion • What is it?, Reach • Contextual: Can I see what I am searching for? • How does it help me?, Engagement • What does it do? • Relevancy: Does it help my needs? • Cost of ownership? • Transparency, Clarity, conversion • I clearly understand and confidence in all costs of my transaction • I am genuinely satisfied with my experience • Proactive: AT&T anticipates my needs/wants • I share my experience with others • I will come back again
  5. 5. CUSTOMER ACQUISITION COST / CHANNEL Click based attribution model COST PER CHANNEL / CUSTOMER BOOKING Paid Search $274 Travel Channel $441 Email $12 Organic $7 Affiliate $193 Display $625 Social $- Total CAC $177 Paid Search Travel Channel Email Organic Affiliate Display Social Total CAC Need to optimize display ads and lower the cost through testing and ideation
  6. 6. CUSTOMER LIFETIME VALUE 5% increase in retention will yield and overall 10% increase in profitability FUTURE CALL CENTER LTV 5% increate in retention = 30% increase in sales LAST YEAR 2013 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 % Will Repeat Next Year 20% 15% 12% 10% 9% Call Center Cost Per Transaction $50 Average Revenue / Transaction = $2,519 $491 $388 $290 $251 $221 Discount Rate 8% Npv Of Transactions $3,872 Margin 10% Ltv Customer $387 % Increase 5% OVERALL INCREASE PROFITABILITY 10%
  7. 7. Learn Who is your audience?
  8. 8. Segment and Survey Gain a deep understand of what makes buyers buys buy… What are the objections that qualified buyers have? Match the pages purpose with what customers want. Variable effecting conversion: • Load time • Design • Content • Concrete and emotional vs. intellectual and abstract • Promotional messaging • More detailed product pages • Personalize • Value proposition
  9. 9. 9 Test your messaging strategy against cohorts and segments
  10. 10. Ideate using AB testing and customer feedback: A virtuous feedback cycle, test for discovery not just validation A – Control B – Test - No Hero 95% visitors 5% visitors 10 © 2014 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. AT&T Proprietary (Internal Use Only) Not for use or disclosure outside the AT&T companies except under written agreement. 20% conversion Goal 50% conversion Wireless/home Wireless/home AB Engine
  11. 11. Design the AB Test 20%Increase in 34% conversion rate 54% conversion rate Control Test 11 © 2014 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. AT&T Proprietary (Internal Use Only) Not for use or disclosure outside the AT&T companies except under written agreement. conversion rate Sometimes making small incremental changes can result in a big impact on conversion
  12. 12. The value in A/B Testing is learning • The Obama campaign used simple multi-variant testing on their donor pages which tested many different images, CTAs, and headlines. This combination saw an increase of 40% in sign-ups that resulted in $60M in incremental donations. 12 © 2014 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. AT&T Proprietary (Internal Use Only) Not for use or disclosure outside the AT&T companies except under written agreement.
  13. 13. Digital Marketing and Messaging need to be integrated! Strategy drives both marketing ads and landing pages Promote
  14. 14. Engagement = Sales
  15. 15. KEY INSIGHTS • Seasonal spikes occur in January and August time frame however purchasing does occur rear round. • People are browsing midday during the middle of the week on a work computer, mobile, or table device. • Purchasing is occurring in the evening on home computer presumably after talking to husband or partner. • Purchase consideration may take 2 weeks to one day. However research and planning may start 2 or more months prior to purchase. (more research required) • Consumer skews towards educated females between 25 and 35. • Customers are looking for: • Ease of use • Transparency in Pricing • Product focused messaging around needs of the customer
  16. 16. Thank You
  17. 17. INDEX
  18. 18. Integration and Tracking Track users across all properties and aggregate that behavior tie it back directly to the consumer database. mobile web offline
  19. 19. CUSTOMER LIFETIME VALUE And increase in repeat customers over time from 16% to 20% for call center and from 6% to 11% for online will yield and overall 10% increase in profitability FUTURE CALL CENTER LTV LAST YEAR 2013 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 % Will Repeat Next Year 20% 15% 12% 10% 9% Call Center Cost Per Transaction $50 Average Revenue / Transaction = $2,519 $491 $388 $290 $251 $221 Discount Rate 8% Npv Of Transactions $3,872 Margin 10% Ltv Customer $387 % Increase 6% FUTURE ONLINE LTV LAST YEAR 2013 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 % Will Repeat Next Year 11% 9% 7% 6% 5% Average Revenue / Transaction = $2,511 $284 $225 $168 $145 $128 Discount Rate 8% NPV Of Transactions $3,294 Margin 10% LTV Customer $329 % Increase 12% OVERALL INCREASE PROFITABILITY 10%
  20. 20. CURRENT CAC New Customer Booking 166,243 Repeat Customer Booking 26,567 % total Repeat customers 16% Total 192,810 Total Cost of Acquiring new customers $29,455,647 Customer Acquisition Cost $177 FUTURE CAC WITH HIGH REFER % New Referral Bookings 5% New Referral Customers 8,312 174,555 Repeat Customer Booking 30,813 % Total Repeat Customers 16% Total 205,368 Total Cost Of Acquiring New Customers $29,455,647 Customer Acquisition Cost $169 Increase Profitability For Refer 5% Total Increase In Profitability Return And Refer 15% CUSTOMER ACQUISITION COST By increasing referral traffic by 5% we can add more then 8k new customers
  21. 21. EXAMPLES OF AN IMPRESSION BASED ATTRIBUTION MODEL (Not CC Data) CAC for display goes from $320 to $134
  22. 22. CUSTOMER LIFETIME VALUE On average the present value of all customer transitions based on the probability of returning CALL CENTER LTV LAST YEAR 2013 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 % Will Repeat Next Year 16% 13% 10% 8% 7% Call Center Cost Per Transaction $50 Average Revenue / Transaction = $2,519 $409 $323 $242 $209 $184 Discount Rate 8% NPV of transactions $3,646 Margin 10% LTV Customer $365 ONLINE LTV LAST YEAR 2013 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 % Will Repeat Next Year 6% 5% 4% 3% 3% Average Revenue / Transaction $2,511 $158 $125 $93 $81 $71 Discount Rate 8% NPV Of Transactions $2,946 Margin 10% LTV Customer $295
  23. 23. REVENUE / BOOKING FOR ONLINE AND CALL CENTER Online represents about 60% of all revenue vs. 40% for call center. Repeat customers are 10% for online and 27% for call center. BOTH ONLINE AND CALL CENTER ONLINE ONLY CALL CENTER ONLY REVENUE % OF TOTAL % OF TOTAL new $419,644,107 $263,374,428 63% $156,269,678 37% Repeat $69,023,612 $27,243,472 39% $41,780,140 61% Total $488,667,718 $290,617,900 59% $198,049,818 41% % repeat 16% 10% 27% CUSTOMER BOOKINGS new 166,243 105,303 63% 60,940 37% Repeat 26,567 10,419 39% 16,148 61% Total 192,810 115,722 60% 77,088 40% % repeat 16% 10% 26% REVENUE / BOOKING new $2,524 $2,501 $2,564 Repeat $2,598 $2,615 $2,587 Total $2,534 $2,511 $2,569 % increase $ for repeat 3% 5% 1%
  24. 24. OVERALL COST AND BOOKINGS / CHANNEL CLICK BASED ATTRIBUTION MODEL Paid Search and Travel represent over 90% of cost. However they account for only 50% of bookings. COST BY CHANNEL TOTAL 2013 % TOTAL Paid Search $14,359,266 49% Travel Channel $12,624,935 43% Email $428,929 1% Organic $265,998 1% Affiliate $1,268,523 4% Display $507,996 2% Social $- 0% Total $29,455,647 100% WITHOUT DIRECT AND REFERRAL TOTAL NEW BOOKING Paid Search 52,479 32% Travel Channel 28,647 17% Email 34,679 21% Organic 38,968 23% Affiliate 6,564 4% Display 813 0% Social 4,094 2% REPEAT TRANSACTIONS 26,567 TOTAL NEW 166,243 100% Paid Search Travel Channel Email Organic Affiliate Display Social Paid Search Travel Channel Email Organic Affiliate Display Social Repeat transactions

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