Bruno Gorgulho
Head of Solutions Exponea
"Online fashion retail is booming as an industry, however, the number of bankruptcies have been rising due to unsubstantiated acquisition investments that do not return into long term revenue. Only by using data in a smart way you can avoid that trap, making sure your acquisition channels are bringing customers with significant Lifetime-Value and creating the communication routine to extract that value.
Since Exponea is a complex solution, Bruno builds a bridge between the technology and the client's day-to-day business routine. This allows for a better contextualization of how Exponea fits into the existing structure and what it allows in terms of further development of the company's marketing practices. In essence, Bruno transforms technology into a solution for existing and new challenges.
4. With 44% of UK online retailers
facing financial ruin and only 20% remaining
profitable, the time of being average
just isn’t good enough.
5. What are the metrics
behind their success?
Average conversion rate
Average order value
Average purchase frequency
Average gross margin
3.2 %
€86
2.78
46.26%
6. The gap between winners
& average is widening
Average conversion rate
Average order value
Average purchase frequency
Average gross margin
0.8 %
€23
1.45
32.5%
75.00%
66.28%
75.00%
47.84%
11. Breaking down the formula
CAC < LTV
cost per visit / conversion rate average order value * frequency * gross margin
• Free traffic
• Paid traffic
• Total number of conversions
• Cart completion
• Divided by Unique session
• Total revenue
• Divided by number of
orders
• Number of purchases
• Divided by unique
customers
• % margin
• % discount
• Leftovers
• Returns fulfillment
14. … use the touchpoints to
promote a dialog
Campaign Category page No purchase
Newsletter Recommendations
No engagement
Post purchase
offer
Purchase
NPS +
survey
…
25. Key learnings
Aspire to solve the Online
Retail Formula
Focus your energy where
it delivers the most impact
Create a dialog,
do not spam
Challenge yourselves and
grow profitably
Start with the major UK issue in order to make the stakes clear.
Talk about the research that we did on 1000 online retail companies and that these are the values that they are reaching. Ask the audience whether they are already reaching some of these values.
Tell the audience that this is the performance across the online retail landscape and highlight that the average performers are severely underperforming the market leaders.
Tell the audience that these companies had a trouble reaching those values and tell them a few stories.
Such as Fashion Days, where they had, due to their business model (flash sales, delivering the apparel within 2 - 4 weeks) a huge number of returns which in turn reduced the LTV and brought with it costs with handling those returned orders.
Tell them, that the root cause of why are they getting it wrong is that they are looking at the performance on short-term. The reason may be the lack seniority - they may not know which data they need or they have siloed data, which makes is very difficult to access the entire lifecycle data within a single system.
Ask the attendees whether this looks familiar. It should be a no-brainer to any marketer, but how many of them actually know its importance?
Show them that the wider the gap, the faster the company can scale. It doesn’t matter how low LTV you have if your CAC is even lower. The key is to always focus on solving the formula.
Each of these top level metrics are being influenced by various factors and marketers should be aware of them.
Hugh gets on stage
Show the attendees that they will be able to get these details in Google Analytics for example, it’s that easy, but they won’t be able to connect that data to actual customers and their individual (or shared) attributes.
Show the attendees that they will be able to get these details in Google Analytics for example, it’s that easy, but they won’t be able to connect that data to actual customers and their individual (or shared) attributes.
When optimizing campaigns, take into the consideration customer retention cohort, even keep it per channel. Do that or you will risk the following: <next slide>
In 5th month, marketers managed to decrease the cost per acquired new customer by 33 % which resulted that they are acquiring 50 % less customers, but still cost per new customer dropped significantly. The domino effect then followed - natural customer churn stayed the same and since the marketers are bringing in less customers, the number of active customers plateau and starts to decrease. The recovery could take a while.
---
Also mention that we perceive CAC as customer acquisition and retention costs, and Its costs 4x investment to acquire a new customer than it does to retain and upsell and existing client. If online retailers continue to focus just on acquiring customers the growth will be short lived and retention will decline. That’s why it’s very important to follow the customers’ lifecycle and try to improve customer experience in order to minimize the decline after the initial purchase in the month they’ve been acquired.
Show the attendees how returned sales can impact your business. This report is segmented based around customers, the orders they’ve made and their return rate based on the delivery/pick-up method.
-> People who get their orders delivered most likely keep the products, it’s a hassle to return it.
-> People return the things they buy in brick and mortar stores since they feel that they can just try it out, which increases the overhead.
Also mention that, it’s often the problem that marketing reporting doesn’t take into the consideration returned orders and you may be acquiring customers who on the first glance look profitable, but make sure to account for returns.
Hugh gets on stage
This is how it looks in FB Ads. The great thing about lookalike audiences is that you can either define your best performing or worst performing customers.
With best performing you will be looking to gain new customers, probably at same price that you do now, although with a higher chance for them to turn into champions.
With worst performing, you will be able to filter out the customers who may be, in the end, cost you too much (i.e. customers who are returning order a lot)
Both tactics should, raise your conv. rate.
Show your audience an example of an NPS newsletter and a rating (from another company). Also mention what can you do with NPS.
Promoter, 9 & 10 -> Ask them to rate you on an external site (we’ve had a great success with that)
Hard detractor 0 - 4 -> Hand them over to customer service in order to solve their issues.
Hugh gets on stage
Briefly mention the stages & that you can have various campaigns running in the background:
ACQUIRE - The purpose is to get them to become customers
RETAIN - You should ensures the positive post-purchase experience
INCREASE VALUE - Your aim is to increase their frequency or AOV
CHERISH - Your goal is to keep their positive experience in order to keep them purchasing.
REACTIVATE - Lapsing customers within various stages, make sure you retain them.
See more details about the customer lifecycle management here: https://docs.google.com/presentation/d/1_kYrQD05JhnKGiwr6yTdeFvGg5--2CUsAgEYilLj4e8/edit
