the analytics playbook of - magento
TRANSCRIPT
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
Months in Business 360
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
Months in Business 360
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
Case Study: Truly Experiences
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)
Case Study: Truly Experiences
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
Case Study: Truly Experiences
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
Months in Business 360
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
Months in Business 360
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
Repeat Purchase Probability
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
Repeat Purchase Probability
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
Repeat Purchase Probability
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
Cross-Border Customer
$100 CLV
Cross-Border Customer
$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
Q&A
Thank You!