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Customer acquisition and_retention_strategy_v10_kd
The document discusses strategies for improving customer acquisition and retention. It recommends defining business objectives, developing strategies to meet those objectives, and using tactics like A/B testing to implement strategies. A/B testing should be used for discovery, not just validation, to continuously learn and improve performance. The goal is to align marketing efforts with website content through testing to better engage customers.
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Customer acquisition and_retention_strategy_v10_kd
- 1. © 2015 Copyright.All rights reserved by AT&T 1 Customer Acquisition and Retention Strategy Andy Lammers Andy.lammers@att.com
- 2. © 2015 Copyright.All rights reserved by AT&T Challenges Quantifying customer behavior and tying it to ROI
- 3. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Consumer AB Test Performance 3 0 12.5 25 37.5 50 Very Poor Poor Neutral Good Very Good 0% 70% 5% 7% 14% 18% Conversation Rate Lift Performance (≤5%) (-5% to -1%) (-1% to -1%) (1% to 5%) (>5%) The majority of ideas are neutral or negative PercentageofTotalTests 56% 7%5% A histogram of all the tests performed by the consumer optimization team reveals that the vast majority of ideas proposed to improve the site were either neutral or had a negative impact on conversion.
- 4. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Defining an evaluation framework 4 88% The majority of people who indicated some interest in mobile devices never found a product or category page. Fallout from Awareness to Consideration
- 5. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Pepsi had a similar problem 5 Making small incremental changes can result in a big impact on conversion CONTROL TEST What looks best is not necessarily what’s most effective in achieving business. Increase in conversion rate
- 6. © 2015 Copyright.All rights reserved by AT&T The Framework AB testing is a tactic. We need a way to evaluate why and how it is to be deployed
- 7. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy7 Business Objectives Grow Revenue • Customer acquisition • Frequency of purchase • Increase basket size Reduce Costs • Reduce customer acquisition cost • Loyalty / return engagement • Advocacy / referral First Step: Define Business Objectives Strategy • Return engagement • Content messaging • Learn / test / implement Tactics • AB testing • Segmentation – learn • RFM analytics • Promote • Gamification Next, develop a strategy to achieve business objectives. Then use tactics to implement the strategy.
- 8. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Awareness Retargeting, email, search, display… Consideration • Landing pages • Product category pages • Content based algorithms Purchase Intent • Shopping cart • Collaborative based Loyalty • Post checkout • Email reminders At Samsung we learned the that primary variable for predicting purchase intent was contract renewal. We could then target the right customer with the right message at the right time. Each step in the customer journey will have specific triggers that will drive customer behavior. Samsung Shopper Marketing Journey Map Purchase • Shopping cart Learn Buy Get
- 9. © 2015 Copyright.All rights reserved by AT&T Measuring Success If you don’t know where you’ve been, how do you know where to go?
- 10. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy http://techcrunch.com/10/29/how-to-measure-the-true-stickiness-and-success-of-a-facebook-app/ The primary predicator of future revenue growth is return engagement. A pillar of any sales strategy. WIIF M
- 11. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy 11 Appropriate measurement will help influence the optimal strategy.For Pizza Hut we were able to regress engagement with respect to sales and prove that a product messaging strategy was superior to coupons.
- 12. © 2015 Copyright.All rights reserved by AT&T Putting it all together Implementing the Framework: Tactics and Tools
- 13. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy How to implement a strategy: Target & tailor communication to customers: identify need and problem Virtuous Cycle: Learn, Test, Implement, an iterative Agile Framework Learn, Test, Implement are the tactics: This is how you develop, test, and refine strategy. Short iterative cycles mitigate risk. These tactics are used to make process more efficient. Ultimately, you build a better product.
- 14. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy CUSTOMER ACQUISITION COST < Lifetime Value Creating a strategy requires a process of discovery to find the correct balance. CAC < 1$ LTV > 1.10$ 10mil DAU Daily active users
- 15. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy 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 CUSTOMER ACQUISITION COST by CHANNEL Click-based attribution model reveals CAC for display is greater then $600 with a LTV of half that. We are loosing money for every new customer. Optimize display ads and lower the cost through testing and ideation The example comes from an online travel agent
- 16. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy 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 5% CUSTOMER LIFETIME VALUE (LTV) CAC for display is $387 which is far less then LTV. We can either increase retention or increase conversion by targeting the right customers with the right content at the right time. OVERALL INCREASE PROFITABILITY 10% 5% increase in retention = 30% increase in LTV
- 17. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Learn your audience. You can not optimize the experience without knowing who you are targeting.
- 18. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Segment and Survey Gain a deep understanding of what makes buyers 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 Once you know who your customers are find out what is important to them. How do customers define their needs?
- 19. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Develop some ideas. Once we have done the initial analysis we are able to create some ideas that can then be tested. • Know the bottlenecks and opportunities • Know your customer • Develop some ideas to test around the needs of these customers
- 20. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy20 Ideate using AB testing to understand behavior Test for discovery not just validation A – Control B – Test 95% visitors 5% visitors 20% conversion 50% conversion Goal Wireless/home Wireless/home AB Engine
- 21. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy21 The value in A/B testing is learning This combination saw an increase of 40% in sign-ups that resulted in $60M in incremental donations. The Obama campaign used simple multi-variant testing on their donor pages which tested many different images, CTAs, and headlines.
- 22. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Goal is to create alignment internally Marketing efforts are currently not consistent with landing page content. Marketing needs to be optimized for landing page content through an imperial methodology of testing and discovery.
- 23. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy Engagement = Sales Over time there is a direct correlation between sales and optimal content strategy Sales
- 24. © 2015 Copyright.All rights reserved by AT&T What is next? What have we done and what needs to be done?
- 25. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy
- 26. © 2015 Copyright.All rights reserved by AT&T Archive Supporting Slides
- 27. © 2015 Copyright.All rights reserved by AT&T | Customer Acquisition and Retention Strategy 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 tablet 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
Editor's Notes
- #4 70% (the red combined) of ideas brought to the consumer group have zero (or negative) impact to the business. While this is taken from consumer, the process we’re using is the same, it’s subjective, decisions are made without visibility. A data driven framework for analysis & development (that is objective in nature) will force the correct code to be written – yielding code that positively impacts business.
- #5 Create a framework that standardizes a methodology for opportunities. Foundation for testing opportunities. Decide where to test. Seeing that if customers cannot find the product page, don’t test there. Remove adhawk decision making. Define the testing strategy, introducing analysis of where and how strategy should be implemented. Testing to for discovery, to understand customer behavior at a high altitude.
- #6 Result of AB testing call to action above the fold. Tried and true framework used with success. Always test for a conversion rate, NOT total numbers. Always test for a %, test for engagement, time on site, any kind of metric that you can be normalized. Normalized goal metrics. You may not have enough customers to test for conversion rates, and your goal may not be conversion rate. Enterprise goal should be return engagement….Their conversion rate is for lead generation. Goes back to business objectives. If Business objectives are to support sales channels, then metrics that ladder up to engagement is what’s being tested. 20% increase .5 to 1 = 100% increase in conversion rate 10% to 30% = is a 20% increase in conversion rate.
- #7 It’s a tactic that supports the strategic roadmap. With problem statement, we need to understand the framework for how and why it is deployed. We need to first understand business objective, then tactics to implement strategy. Testing is an integral part to deploying a strategy. ***KD note: I changed employed to deployed. Is this right?
- #8 Top 5 "Actionable“ Items to Drive CSAT Usability: Ease of Use, Learnability, and Delightful NPS (Net Promoter Score) Minimal Touch Simplicity Empowerment
- #9 Take the framework previously define and apply to any channel.
- #11 KD note: Below the graph I think Stickyness should be with an “i” to be Stickiness….
- #12 Test your messaging strategy against cohorts and segments 2 years of data round messaging strategy and compared sales to engagement – comparing promotional pricing versus value messaging. Helped drive strategy with regression analysis. Take a more sustainable approach with product value messaging. Shows the value of the product over promotional pricing. Key is the measurement. Appropriate measurement will help influence the proper strategy. For Pizza Hut we were able to regress engagement with respect to sales and prove that a product messaging strategy was superior to coupons (types of tests: AB testing, segmentation analysis, surveys, user profiling, user demographic profiling, regression testing) AB testing is only 1 part of a comprehensive test based design methodology
- #14 Virtuous loop versus a loop that degrades overtime, virtuous cycle Graph has components of actual tactics. Learn Test Implement are the tactics: This is how you develop, refine, and test strategy Short cycles allow for implementation of learning. Use to make process more efficient, ultimately you build a better product, the success or failure of the product is determined by previous release.
- #15 Virtuous cycle helps create a balanced business model, through over time, reducing CAC to less than $1. SO the the LTV just above a dollar. Example of adjusting UX of game, ensure people spent enough time on the site, to get the site viral. Increasing return engagement, consequently people spend money and invite friends. Getting 2nd, 3rd, 7th, and 14th day engagement numbers up
- #16 KD notes: Made some minor changes to the copy. Please see if it still says what you want it to.
- #21 Use good ux flow See placement of content between pages 4 and 5
- #22 Use good ux flow See placement of content between pages 4 and 5