ECommerce Customer Segmentation Strategies
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eCommerce Customer Segmentation Strategies
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Today’s Moderator:
Sarah Zibanejadrad WhatCounts, Inc.
2
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Follow:
@WindsorCircle
@McGinity
@WhatCounts
3 http://ar.gy/whatcountswhitepaper
Today’s Speaker
Brad McGinity
VP, Sales & Marketing
Windsor Circle, Inc.
4
Quick Wins Using Your eCommerce Data to Double and Triple Email Marketing Revenue in 2012
http://ar.gy/whatcountswhitepaper
Special Offer for WhatCounts Users: Waive Magento “Download Fee.” $1,995 for Enterprise $749 for Community
Agenda
Why You Should Care Quick Wins
1. Win Back Old Customers 2. Cross/Up Sell 3. Procrastinators 4. Triggered Product Recommendations 5. Triggered Product Reviews 6. Best Customers
Identifying Customer Segments with RFM Analysis
Quick Win #1 Win Back Last Year’s (Holiday) Buyers
Identify 2011 holiday buyers. 1. Last Purchase
≥ 11.15.2011 2. Last Purchase
≤ 12.31.2011
Identify Last Year’s Holiday Buyers
Leverage “Win Back” Techniques to Engage
http://ar.gy/whatcountswhitepaper
Holiday '11
Engage win back techniques. 1. “We miss you.” 2. Increase Frequency, and
suppress 2012 Buyers.
Last Purchase ≥ 11.15.2011
Last Purchase ≤ 12.31.2011
11/15/2011 <= ‘PURCHASE’ <= 12/31/2011
http://ar.gy/whatcountswhitepaper
“Holiday '11” Gallery
“Holiday '11” Gallery
Quick Win #2
• Identify hottest items • Intuition • Directive • Statistics
• Identify correlations • Upgrades • Accessories
Identify Hot Items in Your Inventory
Identify Correlations with Other Products
Cross / Up Sell Based on Purchase History
Cross / Up Sell This Year’s Hottest Items Based on Purchase History
http://ar.gy/whatcountswhitepaper
Cross / Up Sell
This Year’s Hottest Items
Purchase History
Correlations
• Market basket analysis • Identify segments based
on purchase history • SKU • Title / Keyword • Category • Brand
Learn more about Market Basket Analysis at http://en.wikipedia.org/wiki/Market_basket_analysis
“Cross / Up Sell Gallery”
“Cross / Up Sell Gallery”
“Cross / Up Sell Gallery”
Quick Win #3 Help Procrastinators Buy Before A Big Event
1. Identify last minute buyers
2. Identify rush shippers 3. Remind them of rush
shipping fees
Identify Procrastinators
Encourage Them to
Buy Early and Save
http://ar.gy/whatcountswhitepaper
Procrastinators Paid for
Rush Shipping
Since 12.01.2011
Purchase
≥ 12.18.2011
Purchase
≤ 12.25.2011
The number of people who shopped online the Wednesday
before Christmas in 2010 jumped 23.5% compared with the
Wednesday before Christmas in 2009.1
1. Wall Street Journal. Gift Shoppers Flocked to the Web. 12.24.2010. Ann Zimmerman.
“Procrastinators Gallery”
“Procrastinators Gallery”
Quick Win #4 Trigger Product Recommendations
• Identify specific product recommendations
• Update purchase data nightly
• Trigger recommendations based on purchases
Identify Product
Recommendations
Use Automation to
Recommend
Additional Items
http://ar.gy/whatcountswhitepaper
Simply Use Custom Fields
To Drive Dynamic Content
To Drive Dynamic Content
“Triggered Product Recs”
“Triggered Product Recs”
Quick Win #5 Trigger Product Review Requests
• Give enough time • Consider an incentive • Include Picture and Link
Identify Buyers ‘X’ Days After Purchase
Use Automation to
Request a Review
http://ar.gy/whatcountswhitepaper
Triggered Email 14 Days After Purchase
http://ar.gy/whatcountswhitepaper
“Triggered Product Reviews”
“Triggered Product Reviews”
“Triggered Product Reviews”
Quick Win #6
Identify Best Customers Engage through
Exclusivity
Get Your Best Customers to Spend Their Cash With You
http://ar.gy/whatcountswhitepaper
Meet RFM Analysis.
Frequency – Number of purchases made
Recency – Number of days or months since last purchase
Monetary Value – Amount spent by a customer
http://ar.gy/whatcountswhitepaper
First, Sort and Split “Recency”
Quartile 4 (R=4)
Quartile 3 (R=3)
Quartile 2 (R=2)
Quartile 1 (R=1)
http://ar.gy/whatcountswhitepaper
Continue with “Frequency” and “Monetary Value”
Quartile 4 (M=4)
Quartile 3 (M=3)
Quartile 2 (M=2)
Quartile 1 (M=1)
Quartile 4 (F=4)
Quartile 3 (F=3)
Quartile 2 (F=2)
Quartile 1 (F=1)
RFM Segments – Best Customer
Quartile 4 (M=4)
Quartile 3 (M=3)
Quartile 2 (M=2)
Quartile 1 (M=1)
Quartile 4 (F=4)
Quartile 3 (F=3)
Quartile 2 (F=2)
Quartile 1 (F=1)
Quartile 4 (R=4)
Quartile 3 (R=3)
Quartile 2 (R=2)
Quartile 1 (R=1)
RFM Segments – Churning Customer
Quartile 4 (M=4)
Quartile 3 (M=3)
Quartile 2 (M=2)
Quartile 1 (M=1)
Quartile 4 (F=4)
Quartile 3 (F=3)
Quartile 2 (F=2)
Quartile 1 (F=1)
Quartile 4 (R=4)
Quartile 3 (R=3)
Quartile 2 (R=2)
Quartile 1 (R=1)
Your best customers are those who fit the combination of most recent, most frequent, and highest monetary value.
Recency
(Top Quartile)
Monetary Value
(Top Quartile)
Frequency
(Top Quartile)
R1∙F1∙M1 • Exclusive preview of
new products. • Early access to limited
inventory. • Exclusive discounts or
offers. • Free gift for best
customers.
http://ar.gy/whatcountswhitepaper
“Best Customers” Gallery
“Best Customers” Gallery
“Best Customers” Gallery
Let’s explore more customer groups. Best (111)
Loyal (X1X)
Big Spenders (XX1)
New Spenders (141)
Loyal Joes (214)
Win-back (411)
Splurgers (X41)
Almost Lost (3XX)
Deadbeats (4XX)
Campaign Management
Incent Loyal Joe’s to spend more.
“Every 5th Item is FREE”
• High hurdle
• They like and trust you
• Expiration date
http://ar.gy/whatcountswhitepaper
Inform New Customers of Standard Features
“Always Free Shipping”
• Benefits of shopping with you
• Personal greeting
• Invitation to connect on social
http://ar.gy/whatcountswhitepaper
Get Rid of Deadbeats
“Last chance!”
• Force action or gone
• Incentive optional
• Improve deliverability
http://ar.gy/whatcountswhitepaper
Special Offer for WhatCounts Users: Waive Magento “Download Fee.” $1,995 for Enterprise $749 for Community
Questions?
Next Webinar by WhatCounts
Title: “Creating Email Marketing Effectiveness with On-Premise Solutions”
Date: Tuesday, July 24, 2012
Time: 2:00 - 3:00 PM EDT
Reserve your Webinar seat now at: https://www1.gotomeeting.com/register/720587048
Title: “How to Retain Customers in a Google Shopping World”
Date: Thursday, July 26, 2012
Time: 12:00 - 1:00 PM EDT
Reserve your Webinar seat now at: http://ar.gy/1Sdn
Next Webinar by Windsor Circle
http://ar.gy/whatcountswhitepaper
Contact Windsor Circle
Speaker Contact Information:
Brad McGinity VP, Sales & Marketing, Windsor Circle (919) 822-2009 Brad@WindsorCircle.com
Windsor Circle, Inc. 111 E Chapel Hill Street Suite 100 Durham, NC 27701 (919) 822-2009 www.windsorcircle.com
Contact WhatCounts
WhatCouns, Inc.
3630 Peachtree Road, NE Suite 900 Atlanta, Georgia 30326 1-866-804-0076
www.whatcounts.com
Twitter: @WhatCounts
sales@whatcounts.com
Thank You for Attending!
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