The Analytics Playbook of - Magento

The Analytics Playbook of

High-Growth Merchants

Head of Magento Business Intelligence

@robertjmoore

Robert J Moore

Customers Include:

Our Mission is to Inspire & Empower Data-Driven People

Platform Overview

Connect, consolidate & transform your data.

Visualize, analyze and get deep and actionable insights into your

business’ data.

Create ad-hoc analysis & automate your reporting process: transform

the way you make business decisions & collaborate across teams.

The eCommerce Funding Landscape

Number of eCommerce Deals by Year

2011 2012 2013 2014 2015 2016

200

To

tal N

um

be

r o

f D

ea

ls

400

600

800

The eCommerce Funding Landscape

Median Funding Amount Per Stage Over Time

$60

$50

$40

$30

$20

$10

$0

2011 2012 2013 2014 2015 2016

Fu

nd

ing

Am

ou

nt in

Mill

ion

s

SEED A B C LATE

Total Revenue by Quartile

Top PerformersT

ota

l Re

ve

nu

e in

Mill

ion

s

$60

$50

$40

$30

$20

$10

$0

Q1 Q2 Q3 Q4

Months in Business 360

Acquisition

Retention

CLV

The 3 Key Growth KPIs

Customer Acquisition

By the end of

year two, top

performers

acquire

5x more

customers

every month

than their

counterparts.

Monthly New Customers by Quartile

Acquiring New Customers

10

Q1 Q2 Q3 Q4


Ne

w C

usto

me

rs in

Th

ou

sa

nd

s 8

6

4

2

0

Total New Customers by Quartile

Expanding Your Customer Base

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


Ne

w C

usto

me

rs in

Th

ou

sa

nd

s

0

25

50

75

100

125

150

175

200

225

Acquisition

Case Study

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

24% of

customers

are acquired

during the

holiday

months

Jan

Ne

w C

usto

me

rs

1.75

1.5

1.25

1

.75

.5

.25

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

But Not All Dollars Are Spent Equally

Rest of Year Black Friday Weekend Black Friday w/ Discounts

Repeat Spending Proportions, First 6 Months

100%

80%

60%

40%

20%

0%

$1.00

$0.81

$0.74

SOURCE 1

SOURCE 2

SOURCE 3

Repeat Customer Rate

The Solution: Know What You’re Acquiring

Focus on

acquisition

channels

that drive

higher

repeat

rates.

Pe

rce

nt o

f N

ew

Cu

sto

me

rs W

ho

Pu

rch

ase

Ag

ain

Weeks Since First Order0 18

Case Study: Truly Experiences

• Industry: Luxury Experiences, Ecommerce

• Location: London, United Kingdom

• Integrations Consolidated: Magento, Google Analytics, Google Ecommerce, Google AdWords

“I spend more time extracting, validating and crunching numbers, than I do

actually analyzing the data and making decisions based off of it.”

-JOHANNES RADIG, HEAD OF GROWTH MARKETING

• The holidays were the time of year when

the most customers were acquired.

• Customers acquired during the holidays

had lower lifetime value (LTV) than others.

Johannes RadigHead of Growth Marketing


Solution: Customer Segmentation

• Acquisition Channel

• Geography (Cross-Border Analysis)

• Product Category

• Promotions or Discounts

• Customer Support Interactions

Optimize for:

• Repeat Purchase Rates

• Customer Lifetime Value (CLV)


But How? Data Consolidation!

Web/ Mobile Analytics

Customer Support

Shopping Cart

Email Marketing

AdPlatform

BackOffice

• Email Address

• Tickets Filed

Orders

• Email Address

• Purchase Amount

• Number of Orders

• 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?

Join Disparate Data Silos for Actionable Analytics

Customer Support Database Transaction Database

Improved advertising spend efficiency

by 70%

Google AdWords was yielding the

highest-value customers. Ad spend

reallocation lead to a 70% improvement

on advertising spend efficiency.

Johannes RadigHead of Growth Marketing


Customer Retention:

The Data

68% of customers will never purchase a second time.

Customer Retention is Difficult

Percent of Customers Placing at Least N Orders in Their First Year

1 2 3 4 5 60%

25%

50%

75%

100%

Repeat Purchase Probability

Repeat 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

Re

pe

at P

urc

ha

se

Pro

ba

bili

ty

Revenue from Repeat Purchases

Revenue From New & Repeat Purchases, Bottom Three Quartiles

Pe

rce

nt o

f R

eve

nu

e

0

New Repeat


10

20

30

40

50

60

70

80

90

100

Revenue from Repeat Purchases

Revenue From New & Repeat Purchases, Top Quartile

Pe

rce

nt o

f R

eve

nu

e

0

New Repeat


10

20

30

40

50

60

70

80

90

Customer Retention:

Driving Loyalty

In an industry saturated by rewards cards and

loyalty points, James holds an unconventional

viewpoint.

“Rather than ‘frequent flier’ points, we believe

the best loyalty program is a great

customer experience,” James says. “We use

data to learn how to create the best possible

customer experience.”James Kerridge

Online Operations Manager

Case Study: Harris Farm Markets

Theory Drive Net Promoter Score will drive Customer Lifetime Value

Tools Magento BI (platform)

Zendesk (NPS data and Customer Outreach)

AWS (databases powering ecommerce)

Approach Omni-Channel (in-store and online) customer delight project

Track CLV in Magento BI and link with NPS

Escalate low NPS scores to Customer Success

NPS Driving CLV

From Q1 2014

to Q1 2015:

The number of

new customers

acquired

increased by

51%

The number

of customers

placing repeat

orders saw a

massive 2x

improvement.

Repeat Orders Drive CLV – NPS Drives Repeat Orders

Number of Repeat Orders

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Customer

Lifetime Value:

The Data

Inputs: AOV and Repeat Purchases

CLV-365, AOV-365, & ANO-365 by Revenue Quartile

$0 $25 $50 $75 $1000

1

2

3

4

Ave

rag

e N

um

be

r o

f O

rde

rs

Average Order Value

Q1 Q2 Q3 Q4

Your Top CustomersCLV-365 Histogram

0

Cu

sto

me

r L

ife

tim

e V

alu

e

25 50

Percentile

75 100

$0

$1000

$2000

$3000

Loyalty Indicators:

Average Order Value

Case Study


Average across all merchants

32%

53%

1.0

0.75

0.5

0.25

02 3 4 5 6 7 8 9 10

Number of Orders

Repeat P

urc

hase P

robabili

ty


An underperforming merchant

Number of Orders

Re

pe

at P

urc

ha

se

Pro

ba

bili

ty

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2 3 4 5 6 7 8 9 10

Avg Customer

Merchant X


High first purchase is a huge leading indicator of repeat likelihood

Number of Orders

Re

pe

at P

urc

ha

se

Pro

ba

bili

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

Avg Customer

Merchant X

Merchant X AOV 900+

CLV Case Study:

Subscription

Commerce

Subscription Commerce Customer Basics

Lifetime Products Purchased

SUBSCRIBERS Subscribers on average purchase over 2x the number of products as non-subscribers.

Nu

mb

er

of P

rod

ucts

Pu

rch

ase

d

Months0 24

NON-SUBSCRIBERS

HIGHEST CLV HIGHEST CLV LOWEST CLV

20%

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

Deep Segmentation: Subscription and Cross-Border Sales

Domestic Customer

$300 CLV

Cross-Border Customer

$150 CLV

Domestic Customer

$300 CLV


$100 CLV


$50 CLV

Domestic Customer

$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

• 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

Segmenting CLV Informs Smarter Actions

Know your top performing channels and keep testing

Understand your customer segments and levers

Keep your audience engaged and coming back for more

Recap

Thank You!

The Analytics Playbook of - Magento

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