ECommerce Customer Segmentation Strategies

eCommerce Customer Segmentation Strategies

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Today’s Moderator:

Sarah Zibanejadrad WhatCounts, Inc.

2

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Follow:

@WindsorCircle

@McGinity

@WhatCounts

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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

Category and Brand History

http://ar.gy/whatcountswhitepaper

“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.

http://ar.gy/whatcountswhitepaper

“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

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Triggered Email 14 Days After Purchase

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“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

R =1 F = 1 M = 1

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!