The New Black in Retail: CLV

The New Black in Retail: CLVMatt Williamson, CEO, Windsor Circle

Mary Cooney, AVP, eCommerce, L’Oreal

Introductions

Mary CooneyAVP Commerce

L’Oreal

Matt WilliamsonCEO

Windsor Circle

By the end of this session, you will know…

• How to Calculate Your CLV• How Retention Rates, CLV, and AOV Interact• 4 Steps Required to Grow CLV• Innovation is Putting Marketers in Control

Use Your CLV Field Manual!

Agenda

• The New Black in Retail: CLV• 4 Steps Required to Increase CLV• Real Life Examples from L’Oreal• 9 Pillars of Retention Automation

The New Black in Retail: CLV

Customer Lifetime Value (CLV) is defined as the total dollars flowing

from a customer over the entire relationship with that customer

Simple Math

PurchaseAssumed

AOVAssumed

CLV

1 81 81

2 81 162

3 81 243

4 81 324

5 81 405

What Actually Happens

PurchaseActual AOV

Actual CLV

1 81 81

2 86 167

3 85 252

4 101 353

5 104 457

This segment has been built and will be available in Salesforce within approximately 24 hours.

This segment has been built and will be available in Salesforce within approximately 24 hours.

This segment has been built and will be available in Salesforce within approximately 24 hours.

This is how AOV rises with Retention

The Natural State of the Happy Customer

Existing Customers Are a Huge Source of Competitive Advantage

If You’re Not Driving CLV and Retention, You’re Losing

• The State of Retailing Online 2015 (by NRF)• AOV for repeat customers - $199• % of sales from repeat customers - 61%

• Leading Retention Rates:• Bonobos – 50% (via NY Times)• Zappos – 75% (via econsultancy)• Amazon – upwards of 90%

Ok… But How do I Increase CLV?4 Phases to Increase CLV Using Data

(** Demand This of Your Technology Vendors **)

1. Knowledge

Begin with the End in Mind(Work Backwards from End Goals)

1. CLV, Retention Rates, Share of Wallet2. What Campaigns Should I Run?

3. What Do I Need to Know?4. What Data Do I Need?

5. Where Do I Get It?

2. Data

3. Science

4. Automation

Knowledge

Science

Automation

Data

#Winning Through TechnologyHow Mary Is Using Technology to Increase CLV and Win at L’Oreal

• Add image of email

Valuable Data Fields

• CLV (# of dollars)• Recency (most recent order)• Frequency (# of orders)• First order date• Purchase history, by:

• Product• SKU• Store• Category• Interest

• Last Purchase (same)• Address: city, state, zip• Predictive:

• Replenishment• Recommendations

• Substitutes• Complements

• Churn Dates

• Custom Fields• Loyalty Number• Birthday• Skin Type / Color

What’s Planned – Marketer is in Control

• Predictive Data Science• Replenishment Dates• Churn Date

• Cross-Sell Hair Styling <> Hair Care• Product Recommendations

• Substitutes• Complements

• Reward Best Customers

This Ain’t Your Mother’s CRMTechnology has shifted the playing field.

You can do this better, faster, cheaper.

The Old Way

• Hard to reach• Expensive• Untrusted• Monopoly Breeds Complacence• Non-responsive• They are in control

The New Way

• Drivers Compete for Ratings• Friendly• Responsive

• Convenient• To Find• To Pay• To Rate

• Data Drives Better Experience

• You Are In Control

#Freedom

“5 vendors were brought in.

No one had the offering that Windsor Circle had.

The other vendors had people but they did not have the technology”

Old School Vs. New StyleOld School New Style

Cost $100K - $10M Capital Expenditure

$10K - $500K Software Subscription

Time 1-3 years Weeks - months

Ownership IT Marketing

Skillset Data Scientist, Programmer

Marketer, Strategist

Data Science Data Scientists Technology Platform

• Game has changed• CLV is the New Black• Technology has put the marketer in

control• #Start, #Test, #Scale, #Win

Questions?

Visit us at booth #120@M_D_Williamson

Windsorcircle.com

Join Us For Dreamforce 2015September 15-18, 2015 | San Francisco, CA