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How We Used Analytics to
Fuel Our Growth
CHUCK LIU & JESSICA TIAO
AUGUST 20, 2015
CHUCK LIU
Director of Growth, Kissmetrics
@chuckjliu
JESSICA TIAO, “JT”
UX Designer, Kissmetrics
@JessicaTiao
#KissWebinar, @Kissmetrics
@chuckjliu
@jessicatiao
1 Introduction
• Segmentation: How to Tilt the Odds in your Favor
• Cohorts: Are Your Growth Tactics Working?
• Message Experimentation: The Hidden Side of Product Growth
2 3 Tactics to Fuel Growth
3 Recap
WHAT YOU WILL LEARN
WATCH WEBINAR RECORDING NOW
EXPERIENCE IN MARKETING / ANALYTICS FOR
5 YEARS
ALOT OF LESSONS LEARNED ALONG THE WAY
Have you seen a marketing
campaign that caught your
attention?
How We Used Analytics to Fuel Our Growth
THE LAW OF PERCEPTION
Marketing is not a battle of
products; it’s a battle of
perceptions.
Source: The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk!
How We Used Analytics to Fuel Our Growth
28.7% Market Share42.4% Market Share
Source: NASDAQ
In a blind taste test, Pepsi won
Source: Scientific American
REFLECTIVE DESIGN
DON NORMAN
Author of The Design of Everyday Things
“
Reflection is about ones thoughts
afterwards, how it makes one feel, the
image it portrays, the message it tells
others about the owner’s taste.
REFLECTIVE DESIGN
HOW BLOOMTHAT’S EMAIL MARKETING HAS EVOLVED
2013 2015
2013
Professional
Clean
Simple
2015
Bright, young and artisanal
Handcrafted
Unique & fresh
WHAT’S THE KEY TAKEAWAY?
2013 2015
Virgin America
Edgy, Young, Modern
American Airlines
Traditional
Perception trumps reality. Messaging and imagery matter.
WHAT’S THE KEY TAKEAWAY?
2013 2015
H&M
Urban & Hip
Old Navy
Casual, Family Fun
Perception trumps reality. Messaging and imagery matter.
Segmentation:
How to Tilt the Odds in
Your Favor
BREAK UP THE MASSES INTO BUYING HABITS
“ I’d say you really start with a basic
understanding of your consumers or
customers, right? …That’s
segmentation.
SEGMENTATION
JOHN FORSYTH
Partner, McKinsey
SIMILAR NEEDS, DIFFERENT BEHAVIORS
2013 2015
Customer Segmentation
Break up your audience into different
groups who want the same thing with
different preferences.
Getting an early understanding of
customers and thus your market is
critical to long-term success.
Hiten Shah,
Founder, Kissmetrics
• Who are your customers and how
do you tell them apart?
• How can you reach your different
customers?
• Are you able to take action to
capture segment?
THE TWO TYPES OF SEGMENTATION
2013 2015
• Needs-based segmentation:
• Segment the market based on what customers want, need, and
expect from you
• Helps with product development and brand strategy
• Behavioral segmentation:
• Segment the market based on what customers do, where
customers go, and how customers interact with your business
• Helps with go-to-market and targeting tactics
EXAMPLE OF NEEDS BASED SEGMENTATION
2013 2015
• Company: CVS
• Segment: super customer” persona of a
woman who’s responsible for managing
medications across three generations:
• her children
• herself and her husband,
• her parents.
• Need: medications for her children, herself
and her husband, and her parents
Source: CMO.com
HOW CVS USES NEEDS-BASED SEGMENTATION
2013 2015
Source: CVS
EXAMPLE OF BEHAVIORAL SEGMENTATION
• Segment: Customers who purchase dental hygiene products
• Behavioral activity: CVS identified that people who buy
toothpaste also bought beauty products more often.
Source: CMO.com
BEHAVIORAL SEGMENTATION: CVS SEPARATES BEAUTY & DENTAL
HYGIENE
2015
Dental HygieneBeauty
Source: CMO.com
BEHAVIORAL SEGMENTATION: CVS MOVES BEAUTY CLOSER TO
DENTAL HYGIENE
2015
Beauty Dental Hygiene
Source: CMO.com
NETFLIX TARGETS BINGE WATCHERS
• The Need: Watch at own pace
• The Behavior: Binge watch
• What Netflix did: Released all TV
season episodes at once
NETFLIX TARGETS BINGE WATCHERS
NETFLIX TARGETS BINGE WATCHERS
Netflix discovered that nearly 50% of users
watch an entire TV season in one week.
Source: Wall Street Journal
HULU TARGETS PEOPLE WHO WANT TO REPLACE CABLE TV
• The Need: Cable TV without the high cost
• The Behavior: Watches a new episode of Archer at 7PM every
Tuesday
• What Hulu did: Watch latest 5 episodes, 24 hours after air
IMAGINE YOU ARE A MARKETER AT NETFLIX OR HULU
A SAMPLE FUNNEL REPORT FROM PRICING TO SIGN UP
SEGMENT BY MARKETING CHANNEL TO IDENTIFY THE BEST
PERFORMING SOURCES
IDENTIFY THE BEST CONVERTING SOURCE AND ASK
YOURSELF “IS THIS SCALABLE?”
DIG IN FURTHER INTO INDIVIDUAL CAMPAIGNS AND ASK
YOURSELF “WHICH ONES DO I KEEP OR DUMP?”
DIG IN FURTHER INTO INDIVIDUAL CAMPAIGNS AND ASK
YOURSELF “WHICH ONES DO I KEEP OR DUMP?”
Cohort Analysis:
What Is It?
Why Does It Matter?
FIGURE OUT HOW TO GET REPEAT BEHAVIOR AND FORM HABIT LOOPS
How We Used Analytics to Fuel Our Growth
Cohort Analysis
Who sticks around from one time period
to another?
Analyzing cohorts increases your
chances of having people upgrade over
time or buy again.
If you don’t have good retention,
nothing else matters.
Brian Balfour,
VP Growth, Hubspot
• What % of the user base is still active?
• What differentiates groups of people?
• What actions can you take to make
people stay?
Example Cohort Report
This row shows how many people signed up in February 2015.
This row shows how many people signed up in July 2015.
People signed up in February 2015.
People signed up in July 2015.
These columns show how many months have elapsed since the
sign up month.
These cells represent the % of people that have come back within
the first month since signing up.
Darker cells represent hot spots of high retention rate.
Lighter cells represent low retention rates.
The most important thing is the curve of this line.
This is a bad retention curve because this line reaches 0.
Retention starts at 40% at the first month, which means
you’ve already lost 60% of your original users.
By month two, you’ve dropped to 15% of your original users.
By month 3 and onwards, barely any original users are present.
Over the course of 3 months, you’ve essentially lost all of your users.
This is a good retention curve because this line NEVER reaches 0.
Retention starts at 100% in the first month, meaning everyone has
stuck around.
From month 2 onwards, you drop to 40%, but maintain there.
With improvements to your marketing, product, and efforts, you hope
to increase retention every month.
With improvements to your marketing, product, and efforts, you hope
to increase retention every month.
1. Click on the cell
2. Click on the “View the 102 people”
How We Used Analytics to Fuel Our Growth
Use the words and
phrases from customer
responses in the
marketing copy to
increase conversions
Message
Experimentation
INCREASED PRODUCT ADOPTION BY 12% IN 2 MONTHS
FOR OUR NEW PRODUCT ENGAGE
Thomas H. Davenport,
Professor, Babson College
Experimentation
Figure out how one channel works for
you.
Experiment on other channels to figure
out how to get them to work.
• What do you do now that could be
improved?
• What inputs do you control?
• Do you have a culture of using data to
make decisions?
The real payoff will happen when the
organization as a whole shifts to a
test-and-learn mind-set
This is where we lifted
product adoption by 12%.
Notification
• 17.2% conversion rate
• over 2 months
• 538 conversions
How We Used Analytics to Fuel Our Growth
Lightbox
• 30.84% conversion rate
• over 3 days
• 278 conversions
1
Perception is everything. Tap into values, feelings and
storytelling within your marketing.
2 Segment your audience to identify the best performing customer
groups - then optimize.
4
Experimentation grants huge lifts if you have the culture and
process.
RECAP AND TAKEAWAYS
3 Retention is king. Follow up with your customers at
different life cycle stages to get relevant messaging copy.
LOG IN WITH
GOOGLE
Start Your Free Kissmetrics Trial
THANK YOU + Q&A
APPENDIX: COHORT ANALYSIS FOR E-COMMERCE
We start by analyzing the time between a person’s initial
purchase and their subsequent/future purchases.
APPENDIX: COHORT ANALYSIS FOR E-COMMERCE
We can segment to breakdown this cohort report to see the
retention of different product categories.
APPENDIX: COHORT ANALYSIS FOR E-COMMERCE
You can see which products make people come back and
purchase more frequently.
APPENDIX: COHORT ANALYSIS FOR E-COMMERCE
Belts, shoe laces, and pajamas have high rates of
repeat customers long term.
APPENDIX: COHORT ANALYSIS FOR E-COMMERCE
Tennis shoes and jeans don’t cause people to come back
and purchase again as well as the other categories.

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How We Used Analytics to Fuel Our Growth

  • 1. How We Used Analytics to Fuel Our Growth CHUCK LIU & JESSICA TIAO AUGUST 20, 2015
  • 2. CHUCK LIU Director of Growth, Kissmetrics @chuckjliu JESSICA TIAO, “JT” UX Designer, Kissmetrics @JessicaTiao
  • 4. 1 Introduction • Segmentation: How to Tilt the Odds in your Favor • Cohorts: Are Your Growth Tactics Working? • Message Experimentation: The Hidden Side of Product Growth 2 3 Tactics to Fuel Growth 3 Recap WHAT YOU WILL LEARN
  • 6. EXPERIENCE IN MARKETING / ANALYTICS FOR 5 YEARS ALOT OF LESSONS LEARNED ALONG THE WAY
  • 7. Have you seen a marketing campaign that caught your attention?
  • 9. THE LAW OF PERCEPTION Marketing is not a battle of products; it’s a battle of perceptions. Source: The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk!
  • 11. 28.7% Market Share42.4% Market Share Source: NASDAQ
  • 12. In a blind taste test, Pepsi won Source: Scientific American
  • 13. REFLECTIVE DESIGN DON NORMAN Author of The Design of Everyday Things “ Reflection is about ones thoughts afterwards, how it makes one feel, the image it portrays, the message it tells others about the owner’s taste.
  • 15. HOW BLOOMTHAT’S EMAIL MARKETING HAS EVOLVED 2013 2015 2013 Professional Clean Simple 2015 Bright, young and artisanal Handcrafted Unique & fresh
  • 16. WHAT’S THE KEY TAKEAWAY? 2013 2015 Virgin America Edgy, Young, Modern American Airlines Traditional Perception trumps reality. Messaging and imagery matter.
  • 17. WHAT’S THE KEY TAKEAWAY? 2013 2015 H&M Urban & Hip Old Navy Casual, Family Fun Perception trumps reality. Messaging and imagery matter.
  • 18. Segmentation: How to Tilt the Odds in Your Favor BREAK UP THE MASSES INTO BUYING HABITS
  • 19. “ I’d say you really start with a basic understanding of your consumers or customers, right? …That’s segmentation. SEGMENTATION JOHN FORSYTH Partner, McKinsey
  • 20. SIMILAR NEEDS, DIFFERENT BEHAVIORS 2013 2015
  • 21. Customer Segmentation Break up your audience into different groups who want the same thing with different preferences. Getting an early understanding of customers and thus your market is critical to long-term success. Hiten Shah, Founder, Kissmetrics • Who are your customers and how do you tell them apart? • How can you reach your different customers? • Are you able to take action to capture segment?
  • 22. THE TWO TYPES OF SEGMENTATION 2013 2015 • Needs-based segmentation: • Segment the market based on what customers want, need, and expect from you • Helps with product development and brand strategy • Behavioral segmentation: • Segment the market based on what customers do, where customers go, and how customers interact with your business • Helps with go-to-market and targeting tactics
  • 23. EXAMPLE OF NEEDS BASED SEGMENTATION 2013 2015 • Company: CVS • Segment: super customer” persona of a woman who’s responsible for managing medications across three generations: • her children • herself and her husband, • her parents. • Need: medications for her children, herself and her husband, and her parents Source: CMO.com
  • 24. HOW CVS USES NEEDS-BASED SEGMENTATION 2013 2015 Source: CVS
  • 25. EXAMPLE OF BEHAVIORAL SEGMENTATION • Segment: Customers who purchase dental hygiene products • Behavioral activity: CVS identified that people who buy toothpaste also bought beauty products more often. Source: CMO.com
  • 26. BEHAVIORAL SEGMENTATION: CVS SEPARATES BEAUTY & DENTAL HYGIENE 2015 Dental HygieneBeauty Source: CMO.com
  • 27. BEHAVIORAL SEGMENTATION: CVS MOVES BEAUTY CLOSER TO DENTAL HYGIENE 2015 Beauty Dental Hygiene Source: CMO.com
  • 28. NETFLIX TARGETS BINGE WATCHERS • The Need: Watch at own pace • The Behavior: Binge watch • What Netflix did: Released all TV season episodes at once NETFLIX TARGETS BINGE WATCHERS
  • 29. NETFLIX TARGETS BINGE WATCHERS Netflix discovered that nearly 50% of users watch an entire TV season in one week. Source: Wall Street Journal
  • 30. HULU TARGETS PEOPLE WHO WANT TO REPLACE CABLE TV • The Need: Cable TV without the high cost • The Behavior: Watches a new episode of Archer at 7PM every Tuesday • What Hulu did: Watch latest 5 episodes, 24 hours after air
  • 31. IMAGINE YOU ARE A MARKETER AT NETFLIX OR HULU
  • 32. A SAMPLE FUNNEL REPORT FROM PRICING TO SIGN UP
  • 33. SEGMENT BY MARKETING CHANNEL TO IDENTIFY THE BEST PERFORMING SOURCES
  • 34. IDENTIFY THE BEST CONVERTING SOURCE AND ASK YOURSELF “IS THIS SCALABLE?”
  • 35. DIG IN FURTHER INTO INDIVIDUAL CAMPAIGNS AND ASK YOURSELF “WHICH ONES DO I KEEP OR DUMP?”
  • 36. DIG IN FURTHER INTO INDIVIDUAL CAMPAIGNS AND ASK YOURSELF “WHICH ONES DO I KEEP OR DUMP?”
  • 37. Cohort Analysis: What Is It? Why Does It Matter? FIGURE OUT HOW TO GET REPEAT BEHAVIOR AND FORM HABIT LOOPS
  • 39. Cohort Analysis Who sticks around from one time period to another? Analyzing cohorts increases your chances of having people upgrade over time or buy again. If you don’t have good retention, nothing else matters. Brian Balfour, VP Growth, Hubspot • What % of the user base is still active? • What differentiates groups of people? • What actions can you take to make people stay?
  • 41. This row shows how many people signed up in February 2015.
  • 42. This row shows how many people signed up in July 2015.
  • 43. People signed up in February 2015. People signed up in July 2015.
  • 44. These columns show how many months have elapsed since the sign up month.
  • 45. These cells represent the % of people that have come back within the first month since signing up.
  • 46. Darker cells represent hot spots of high retention rate. Lighter cells represent low retention rates.
  • 47. The most important thing is the curve of this line.
  • 48. This is a bad retention curve because this line reaches 0.
  • 49. Retention starts at 40% at the first month, which means you’ve already lost 60% of your original users.
  • 50. By month two, you’ve dropped to 15% of your original users.
  • 51. By month 3 and onwards, barely any original users are present.
  • 52. Over the course of 3 months, you’ve essentially lost all of your users.
  • 53. This is a good retention curve because this line NEVER reaches 0.
  • 54. Retention starts at 100% in the first month, meaning everyone has stuck around.
  • 55. From month 2 onwards, you drop to 40%, but maintain there.
  • 56. With improvements to your marketing, product, and efforts, you hope to increase retention every month.
  • 57. With improvements to your marketing, product, and efforts, you hope to increase retention every month.
  • 58. 1. Click on the cell 2. Click on the “View the 102 people”
  • 60. Use the words and phrases from customer responses in the marketing copy to increase conversions
  • 61. Message Experimentation INCREASED PRODUCT ADOPTION BY 12% IN 2 MONTHS FOR OUR NEW PRODUCT ENGAGE
  • 62. Thomas H. Davenport, Professor, Babson College Experimentation Figure out how one channel works for you. Experiment on other channels to figure out how to get them to work. • What do you do now that could be improved? • What inputs do you control? • Do you have a culture of using data to make decisions? The real payoff will happen when the organization as a whole shifts to a test-and-learn mind-set
  • 63. This is where we lifted product adoption by 12%.
  • 64. Notification • 17.2% conversion rate • over 2 months • 538 conversions
  • 66. Lightbox • 30.84% conversion rate • over 3 days • 278 conversions
  • 67. 1 Perception is everything. Tap into values, feelings and storytelling within your marketing. 2 Segment your audience to identify the best performing customer groups - then optimize. 4 Experimentation grants huge lifts if you have the culture and process. RECAP AND TAKEAWAYS 3 Retention is king. Follow up with your customers at different life cycle stages to get relevant messaging copy.
  • 68. LOG IN WITH GOOGLE Start Your Free Kissmetrics Trial
  • 69. THANK YOU + Q&A
  • 70. APPENDIX: COHORT ANALYSIS FOR E-COMMERCE We start by analyzing the time between a person’s initial purchase and their subsequent/future purchases.
  • 71. APPENDIX: COHORT ANALYSIS FOR E-COMMERCE We can segment to breakdown this cohort report to see the retention of different product categories.
  • 72. APPENDIX: COHORT ANALYSIS FOR E-COMMERCE You can see which products make people come back and purchase more frequently.
  • 73. APPENDIX: COHORT ANALYSIS FOR E-COMMERCE Belts, shoe laces, and pajamas have high rates of repeat customers long term.
  • 74. APPENDIX: COHORT ANALYSIS FOR E-COMMERCE Tennis shoes and jeans don’t cause people to come back and purchase again as well as the other categories.