If you haven’t yet had the time to read our book (which you definitely should if you’re interested in customer analytics, shark graphs, and Paul Rudd), here are the top takeaways.
- The land-grabbing, Wild West days are over: the dominance of Amazon and ever-increasing choice are making acquisition more and more expensive and eating away at retailers’ margins.
- The key to improving margins is getting one-time buyers to come back. Study upon study reveals how critical repeat buyers are to long term growth. One stat says that increasing retention by 5x can increase profits by 125x.
- There are six critical capabilities to put in place before retailers can improve one-time buyer conversion rates:
- Data Consolidation: Creates a clean, single view of each customer from disparate data sources like online and offline purchases, web browsing, and email engagement.
- Predictive Insights: Machine learning and predictive analytics combine to anticipate customer behavior across channels, from product affinities to lifetime value.
- Prescriptive Insights: Predictive customer insights are curated down into meaningful recommendations and channel-specific actions to optimize opportunities for growth.
- Data Accessibility: An easy to use, point-and-click interface that empowers the entire marketing team to research and create audience segments without filing tickets to a centralized team.
- Channel Integration: Seamless integration with every marketing execution tool, from email to social advertising, eliminating the friction in campaign delivery.
- Customer Measurement: Incremental revenue and profit per customer can be measured with testing tools that cut across channels and monitor segment and sub-segment performance.
- Once these capabilities are in place, there are 5 steps to addressing the one-time buyer problem:
- Set Goals: Before any team can build a plan, it needs to benchmark and establish short- and long-term KPIs.
- Segment using quantitative approaches such as k-means clustering. The old method of “qualitative-first” segmentation is not rigorous enough.
- Build journeys and triggers for each segment. As a general rule of thumb, consider two “welcome” touch points per week. If possible, consider building a total of 12 to 16 creatives per series to last the first two months.
- Deploy across channels that will resonate best. Use email engagement modeling to learn who should be reached on which channels. Be sure to keep segments up to date.
- Measure and optimize: Use A/B testing and systematically use hold-out groups to measure incremental, multi-channel impact of programs.
Piece o’ cake.