ECommerce Customer Segmentation Strategies

eCommerce Customer Segmentation Strategies

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Today’s Moderator:

Sarah Zibanejadrad WhatCounts, Inc.

2

http://ar.gy/whatcountswhitepaper


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@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



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



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



“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



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

http://en.wikipedia.org/wiki/Market_basket_analysis

Category and Brand History



“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



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



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



Triggered Email 14 Days After Purchase



“Triggered Product Reviews”



Quick Win #6

Identify Best Customers Engage through

Exclusivity

Get Your Best Customers to Spend Their Cash With You



Meet RFM Analysis.

Frequency – Number of purchases made

Recency – Number of days or months since last purchase

Monetary Value – Amount spent by a customer



First, Sort and Split “Recency”

Quartile 4 (R=4)

Quartile 3 (R=3)

Quartile 2 (R=2)

Quartile 1 (R=1)



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.



R =1 F = 1 M = 1



“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



Inform New Customers of Standard Features

“Always Free Shipping”

• Benefits of shopping with you

• Personal greeting

• Invitation to connect on social



Get Rid of Deadbeats

“Last chance!”

• Force action or gone

• Incentive optional

• Improve deliverability



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


https://www1.gotomeeting.com/register/720587048

https://www1.gotomeeting.com/register/720587048

http://ar.gy/1Sdn

http://ar.gy/1Sdn


Contact Windsor Circle

Speaker Contact Information:

Brad McGinity VP, Sales & Marketing, Windsor Circle (919) 822-2009 [email protected]

Windsor Circle, Inc. 111 E Chapel Hill Street Suite 100 Durham, NC 27701 (919) 822-2009 www.windsorcircle.com

mailto:[email protected]

Contact WhatCounts

WhatCouns, Inc.

3630 Peachtree Road, NE Suite 900 Atlanta, Georgia 30326 1-866-804-0076

www.whatcounts.com

Twitter: @WhatCounts

[email protected]

http://www.whatcounts.com/

Thank You for Attending!

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ECommerce Customer Segmentation Strategies