1. Siddharth Puri
Masterclass on Online
Marketing

2. Building Marketing Strategy for
Online Businesses

3. Facts
E-Commerce in India plays on the Inefficiencies in
Offline Retail. A few examples:
– Accessibility of Goods
– Price of Goods
– Payment Terms

4. Q. How to identify the right marketing
budget for your online business?

5. The Math
Offline Female Apparels Store
Cost Head Expense Revenue Head
Rental 600Sqft Shop INR 75,000 per month # Transactions/ Day 70
Overhead Bills INR 20,000 per month Avg Cart Value INR 600
Local Promotion INR 0 Total days working 26
Salary Cost INR 50,000 per month Total Sales INR 10,92,000 per
month
Total Expenses INR 1.45 L per month
Total Revenue @ 25% INR 2.73 L Per month
If it takes 6 months for shop to reach 70 transactions per day run rate ??
6 * 1.45L = 8.7 L amount is upfront investment and which will get recovered over next
15 months to achieve breakeven

6. Q. How to convert marketing goals into
measurable Metrics?

7. E-Commerce Marketing Team Goals
Goals
Acquire First Time Customers from Paid Media to do transaction on site
Breakeven on Cost of acquisition of customer within gross margin earned on sale driven
Have higher ratio of Prepaid Customers
Zero Cancellation or Order Returns
Measurable Metrics
First Buyer to Repeat Transaction Ratio
Gross Margin earned on each transaction
% of Credit Card to COD Order driven
Cancellation/Returns Ratio post call Centre Order Verification

8. Q. How to Identify Price Point for
acquiring Customers?

9. Formula
Life time value of customer = Gross Revenue X # of repeat purchases customer will do over 12
month period** = Cost to pay for acquisition of customer
Eg Branded Shoes
MRP of Shoe = INR 2000
Cost at which shoe sourced = INR 800
Cost at which shoe being offered to customer = INR 1200
Gross Revenue on shoe = INR 300
Depending on depth of catalog, if average buys expected in 12 month period = 3
As a retailer you should be comfortable paying Life time value of customer as cost of
customer acquisition
** Period defined should be basis category and in analogy of offline business, how
much time will it take for business to breakeven eg Fashion apparel case 1 buy per
customer in 6 months period means INR 150 cost per customer acquisition

10. Q. Identify your Marketing strategy?

11. Largest Online Electronic Retailer Case Study
-Heavy discounting on Books as a category
- Brand perception: Value Store
- Customer experience and credibility established via non differentiated product
Learning's Few Facts
• Replicate need where entry barrier to acquire - 45% transactions now outside
customer is low but competition is scarce eg Test books category
preparation books/literature book title keywords on
search long tail - 60% of non books category
transactions come from repeat
• Use life time value to fund customer discount and customers
remaining margin to acquire customers on per
transaction level than life time value on other channel - Not a price warrior in market

12. 2nd Largest Fashion Retailer Case Study
• Late entrant in the market (in a category) with 5 other well funded companies, took the approach of
brand building but with performance goals
• Spending on an average 1Cr Per month on Digital Media
• Undertaken large TV advertising spends twice in the last 12 months for brand building
Learning's
• Created a Voucher Distribution CRM Program which enabled them to acquire prospective customer in
their CRM with a % cap to acquire information in DB on Life time value of customer
• Over 6 months period using the CRM program they were able to bring down their CPT <50% and
increase scale by 3X
• The traffic brought into to convert onsite for voucher bought high brand exposure and led to lower
transaction acquisition cost on search due to higher brand recall and volumes generated on brand
keywords
• Abandoned footfalls for tracked and converted via re-targeting leads to further increase in scale vs.
money spent

13. Thank You