An17 exhibitor insights_tuesday_the analytics playbook

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Retail’s BIG Show 2017 | #nrf17 Retail’s BIG Show 2017 | #nrf17 The Analytics Playbook of High-Growth Merchants ROBERT MOORE, Head of Analytics, Magento Commerce SEAN FISHER, Director, eCommerce, Signature Hardware

Transcript of An17 exhibitor insights_tuesday_the analytics playbook

Page 1: An17 exhibitor insights_tuesday_the analytics playbook

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f17 The Analytics Playbook of High-

Growth MerchantsROBERT MOORE, Head of Analytics, Magento Commerce SEAN FISHER, Director, eCommerce, Signature Hardware

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The Analytics Playbook of High-Growth

Merchants

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Robert J MooreHead of Magento Business Intelligence @robertjmoore

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Our Mission is to Inspire & Empower Data-Driven People

Customers Include:

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Sean FisherDirector of eCommerce

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• Founded in 1999, • Online retailer of products for

bath, kitchen and home • Based in Northern Kentucky

☆IR Top 500 (#222)☆IR 50 Fastest Growing☆IR Hot 100 2015☆2015 IR Excellence Award

Redesign of the Year

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The 3 Key Growth KPIsAcquisition

Retention

CLV

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Customer Acquisition

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Acquiring New CustomersMonthly New Customers by Quartile

By the end of year two, top performers acquire 5x more customers every month than their counterparts.

10

Q1 Q2 Q3 Q4

Months in Business 360

New

Cus

tom

ers i

n Th

ousa

nds 8

6

4

2

0

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Expanding Your Customer BaseTotal New Customers by Quartile

By the end of year three, top ecommerce companies have a customer base that is 2.5x larger than the next-best group.

Q1 Q2 Q3 Q4

Months in Business 360

New

Cus

tom

ers i

n Th

ousa

nds

25

50

75

125

150

175

200

225

100

0

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Signature Hardware Perspective

New customer acquisition is still relevant for established retailers, just through a different lens.

Sean FisherDirector of eCommerce

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Signature Hardware’s First 36 MonthsTotal New Customers

Longer wait for exponential growth in high consideration verticals.

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Signature Hardware’s Last 6 YearsTotal New Customers

No longer exponential, but still growing.

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Customer Acquisition:Holiday Strategy

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It’s No Surprise: The Holidays Are HugeNew Customer Acquisition Month

24% of customers are acquired during the holiday months.

Jan

New

Cus

tom

ers

1.75

1.5

1.25

1

.75

.5

.25

0Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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But Not All Dollars Are Spent EquallyRepeat Spending Proportions, First 6 Months

Rest of Year Black Friday Weekend Black Friday w/ Discounts

100%

80%

60%

40%

20%

0%

$1.00

$0.81

$0.74

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The Solution: Know What You’re AcquringRepeat Customer Rate

Focus on acquisition channels that drive higher repeat rates.

SOURCE 1

SOURCE 2

SOURCE 3

Perc

ent o

f New

Cus

tom

ers W

ho P

urch

ase

Agai

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Weeks Since First Order0 18

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Important ConsiderationsSolution: Customer Segmentation• Acquisition Channel• Geography• Product Category• Promotions or Discounts• Customer Support Interactions

Optimize for:• Repeat Purchase Rates• Customer Lifetime Value (CLV)

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But How? Data Consolidation!

Web/ Mobile Analytics

Customer Support

Shopping Cart

Email Marketing

AdPlatform

BackOffice

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Join Disparate Data Silos for Actionable Analytics

• Email Address• Tickets Filed

Orders• Email Address• Purchase Amount• Number of Orders

Customer Support Database Transaction Database

• Are customers more likely to come back if they interact with support?• Are customers from Facebook Ads worth more than Google Ads?• How often do customers who use coupons come back again?

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Signature Hardware Perspective

Seasonality is worth studying even if your business does not have a peak season around the holidays.

Sean FisherDirector of eCommerce

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Non Holiday Peak SeasonalityNew Customers – Q1 Leads the Way

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Non Holiday Peak SeasonalityRepeat Spending Proportions

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Customer Retention:The Data

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Customer Retention is DifficultPercent of Customers Placing at Least N Orders in Their First Year

68% of customers will never purchase a second time.

1 2 3 4 5 60%

25%

50%

75%

100%

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Repeat Purchase ProbabilityRepeat Purchase Probability During the Customer’s First Year

32%

53%

1.0

0.75

0.5

0.25

02 3 4 5 6 7 8 9 10

Number of Orders

Repe

at P

urch

ase

Prob

abili

ty

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Revenue from Repeat PurchasesRevenue From New & Repeat Purchases, Bottom Three Quartiles

Perc

ent o

f Rev

enue

0

New Repeat

Months in Business 360

10

20

30

40

50

60

70

80

90

100

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Revenue from Repeat PurchasesRevenue From New & Repeat Purchases, Top Quartile

Perc

ent o

f Rev

enue

0

New Repeat

Months in Business 360

10

20

30

40

50

60

70

80

90

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Customer Retention:Driving Loyalty

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Signature Hardware Perspective

• Determining loyalty is difficult for low repeat businesses.

• Loyalty has to go beyond repeat: customer satisfaction drives WOM.

Sean FisherDirector of eCommerce

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Repeat Purchase ProbabilityRepeat Purchase Probability During the Customer’s First Year

32%

53%

1.0

0.75

0.5

0.25

02 3 4 5 6 7 8 9 10

Number of Orders

Repe

at P

urch

ase

Prob

abili

ty

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Repeat Purchase ProbabilityAverage During Customer’s First Year vs Signature Hardware

Number of Orders

Repe

at P

urch

ase

Prob

abili

ty

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2 3 4 5 6 7 8 9 10

Ave Customer’s First YearSignature Hardware

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Repeat Purchase ProbabilityAve. Customer’s First Year vs Signature Hardware vs Signature Hardware AOV $900+

Number of Orders

Repe

at P

urch

ase

Prob

abili

ty

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2 3 4 5 6 7 8 9 10

Ave Customer’s First YearSignature HardwareSignature Hardware AOV 900+

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Customer Satisfaction vs Direct Traffic Revenue

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16Jul-1

6

Aug-16

Sep-16

Oct-16

Nov-16$600,000.00

$700,000.00

$800,000.00

$900,000.00

$1,000,000.00

$1,100,000.00

$1,200,000.00

$1,300,000.00

4.4

4.5

4.6

4.7

4.8

4.9

5

Direct Revenue Customer Satisfaction Score

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Customer Lifetime Value:The Data

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Inputs: AOV and Repeat PurchasesCLV-365, AOV-365, & ANO-365 by Revenue Quartile

$0 $25 $50 $75 $1000

1

2

3

4

Aver

age

Num

ber o

f Ord

ers

Average Order Value

Q1 Q2 Q3 Q4

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Your Top CustomersCLV-365 Histogram

0

Cust

omer

Life

time

Valu

e

25 50

Percentile

75 100$0

$1000

$2000

$3000

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CLV Case Study

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Deep Segmentation: CLV Stores

HIGHEST CLV HIGHEST CLV LOWEST CLV

20%

33% 67% 75% 20% 33% 67%

Purchases Again$300 CLV

Never Purchases Again$150 CLV

Receives Subscription Order

$300 CLV

Unsubscribe$100 CLV

Never Purchases Again$50 CLV

Purchases Again$200 CLV

New Customer Purchases$150 CLV

20% 60%

Subscribes on First Order$250 CLV

Purchases in Bulk on First Order$200 CLV

Purchases Single Itemon First Order

$100 CLV

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Segmenting CLV Informs Smarter Actions• Know what “next action” drives the highest expected value

for a given customer’s CLV

• Understand the likely CLV of customers by channel based on their early behaviors

• Spend your time and energy focusing on the most impactful customer populations

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CLV - Signature Hardware Perspective

• Aligning advertising toward the most accurate efficiency metrics• Lies, damn lies, and analytics

• Finding propensity for repeat by initial cart value

• Driving revenue through higher AOV

Sean FisherDirector of eCommerce

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Raising AOV – Creative Merchandising

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Raising AOV – Continual Price Testing

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RecapInstrument your data for maximal customer insight

Understand your customer segments and levers

Keep your audience engaged and coming back for more

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Q&A

Robert J [email protected] @robertjmoore

Sean [email protected]

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Thank You!