On a recent InternetRetailing webinar, Sam Kellett, head of content at Exponea, Nicola Fox, head of CRM at Missguided, and Andy Culligan, VP of marketing at Exponea joined for a look at retail maths
• Which key metrics are driving online retail conversion?
• Online retail formula:Customer acquisition cost/cost per visit and conversion rate
POLL Which KPI do you think is weakest in your company: Costs per visit 28%; conversion rate 31%; average order value 3%; purchase frequency 34%; gross margin 3%.
• Metrics behind success: compared average conversion rate, average order value, average purchase frequency, average gross margin between best in class retailers and the average.
• Gap between winners and average is widening – why?
• Maths beyond the concept: cheaper to retain customers than to acquire them - but what does that mean in the real world?
• How to identify major customer experience issues: Net Promoter Score and online surveys post-purchase
• Net promoter score: how to calculate it and what the results mean.
• Learn from customer behaviour, tracking data around size and price filters, category visits etc.
• Calcuated by breaking down into average order value/purchase frequency/gross margin
POLL Have you been able to calculate your company’s average customer lifetime value? Yes 33% No 66%
• Stop thinking in terms of first purchase: if you tie this to first purchase you’ll underestimate lifetime value.
• Use single customer view to get to know and target customers (with examples)
• One size doesn’t fit all:
• Had lots of data but weren’t tapping into it.
• Started to focus efforts on strengthening behaviour tracking across sites.
• Important to blend major campaigns with understanding/reflection of customer.
• Aiming to get second order.
• “We’ve been able to repurpose our marketing to target customers who haven’t shopped but have shown intent, visiting the site and looking at different categories.”
• Personalisation at all levels: starting to think about what makes the receipt of that email personal to that customers, whether using personal data, browse session or ideal send time.
• Example approaches: retargeting after abandoned cart; communication through the optimal channel; ideal send time.
• Understanding customers’ purchasing patterns, analyse their behaviour to boost frequency. Example suggestions around Black Friday: eg make an offer that reflects the specific customer: at what discount will they convert?
• Nicola Fox, Missguided: how the site targets customers that haven’t bought for a while. How it analyses if that’s regular for them.
• Focus on the silent problem: drop off from first to second purchase.
The webinar ended with a Q&A session. View the video from this and other past webinars on the InternetRetailing webinars page.