How to hack your retention rate
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Retention rate is the key for eCommerce websites more mature than 1 year old. 1% of your best customers are generating 30x more revenue than the average customer. How to monitor it properly & how to grow it? This presentation was held by Valentin Radu, CEO & Founder at Omniconvert at GPEC Summit 2017
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How to hack your retention rate
- 1. How to hack your retention rate
- 2. 1. Acquisition vs retention? 2. RFM Model 3. Retention hacks 4. Let’s get to action
- 3. > Serial entrepreneur from Bucharest, Romania > Passionate about psychology, data, relations & change Valentin Radu CEO & founder Omniconvert
- 4. WHAT DO WE REMEMBER ? My life tests: > 17 different jobs > 4 companies > 30 relationships > raising 2 kids > (Thank God!) - having one wife
- 7. eCommerce is not a one-night stand
- 12. And not acting on old assumptions
- 14. “After 24 months, 50% of the revenue is generated by returning customers”
- 18. The average retention rate Is 30%
- 19. If you have an eCommerce with a YoY growth of 50% for new customers
- 20. 60% retention rate 40% retention rate 20% retention rate 10% retention rate Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
- 21. After 6 years, 90% of the revenue is coming from returning customers, at 60% retention rate
- 22. Retention hacks
- 23. Don’t start unless it’s a priority 0
- 24. https://goo.gl/8Ttyv9 Monitor the right KPI’s 1 2 3 4 5 Set strategic goals Strategic Initiatives Prioritise Execute & repeat
- 25. Strategic initiative OS 1: increase NPS to 75 OS 2: Increase AOV to $120 OS 3: Increase LTV to $3400 OS 4: Increase conversion rate to 1.4% OS 5: Increase retention rate to 65% OS 6: Increase traffic to 500k/ month Total impact score Personalized thank-you letter after the first order 5 1 3 0 0 0 9 PPC Hacking 0 0 0 0 0 4 4 Build / hire a growth team 3 2 2 3 3 3 16 Conversion rate optimization audit 1 1 2 3 3 0 10 Activate a new payment method 0 0 0 2 2 0 4 Find out the conversion killers with on site surveys 1 0 1 3 3 0 8
- 27. Use a proper methodology 1
- 28. Build your RFM model Analyze the impact (NPS, Retention, LTV) Don’t stop until you have 100 ideas Run surveys for each important segment Hygiene step: Treat the pains (product / services) Start brainstorming based on your budget Cosmetics step: Do the math - how much can you invest to keep a customer vs to acquire a new one? Execute Restart
- 29. Find out the why 2
- 30. How many of your customers are placing the 2nd order?
- 31. Why?
- 32. From the ones which are not ordering anymore, how many are not placing an order because of > your products From which categories? Bad quality / false expectations? > your services Delivery time, experience, return policy, packaging, etc?
- 34. With this?
- 35. How to do this? > On-site surveys > Post-order emails > Post order remarketing FB ads
- 36. Build an RFM Model 3
- 37. Recency - How recent is the last order? Frequency - How often that customer bought? Monetary Value - What is the total revenue you got from the customer?
- 38. Customer Recency Frequency Monetary Value RFM John Doe 3 4 2 9 Joan Doe 2 3 3 8 Geena Doe 4 1 1 6
- 40. How can we use an RFM model?
- 41. Identify the best customers Proper loyalty program Higher retention rate Higher revenue Happiness, maybe
- 45. Surprise gift
- 46. That’s for you to understand how happy we are that you’ve placed your second order on our website.
- 47. Courtesy call after the 1st order
- 48. A welcome-back surprise according to DBT (days between transactions)
- 49. Free returns vs Free delivery 5
- 50. Your extra-revenue = new returns - new conversions + new returning customers
- 51. Stand out for something that’s more valuable 6
- 55. Your homework 1. Emotions will build relations 2. You should make someone responsible for retention 3. Focus on habit-forming 4. You can’t grow retention (and anything else) if you don’t monitor it. What you don’t measure, doesn’t count 5. Be good
- 56. Scrisoare de multumire scrisa de mana Questions?