E-Retailing Approach Customer Acquisition and Retention Webinar

Better eCommerce 2010 Embitel

E-Tailing approach: Customer Acquisition & Retention

5th webinar of the retail ecommerce series

an embitel initiative

15th Apr 2010


Speaker

• Studied Computer Science at University of Stuttgart

• Entrepreneur since 1992

• Working in retail e-Commerce for last 15yrs

• Responsible for development of e-retail sites like Neckermann, Kodak

Founder

dmc digital media center GmbH, Germany

www.dmc.de

Chairman

Embitel, India

www.embitel.com

Daniel [email protected]

http://www.dmc.de/

http://www.embitel.com/


Is this the problem you’re facing too?

Costper

Acquisition

Life Time Value of a Customer


Agenda

• Customer Acquisition Strategies

• Customer Retentions Strategies

• How To Drive Business Growth

• Latest Trends

• Do’s & Don'ts

• Success Stories

• Summary


Customer Acquisition Strategies


Customer Acquisition Strategy - Online

Behaviorally Targeted Marketing

Viral Marketing

Promotions

Campaigns

SEM (Adwords, …)

Up Sell & Cross SellSweepstakes

SEO & SMODisplay Ads (Banner, …)

Newsletters

Merchandise


Aquisition Strategy

Acquisition Funnel and the Strategy

Generate Traffic

Attention

Interest

Research / Enquiry

Orders

SEO, SEM, Affiliate, Display Ads, Viral, Newsletter

Merchandising, User Centric Design, Cross-/Up-Selling,

Product Info, Promotions

Onsite-Search, Reviews, Rating

Sales Support, Simple checkout process, Trust/ Security


Source of generated traffic on Website

Tota

l Tra

ffic

~80% Direct & Organic Online Marketing: SEO, SMO, Newsletters, etc

~20%Paid Online Marketing: SEM, Display Ads, Affiliate Marketing, etc.

The Maximum a retailer can afford !


Traffic generation & CPA

CPA – Cost Per Acquisition

LTV – Life Time Value of a Customer

CPA

LTV

paid:

SEM

Display Ads

Affiliate Marketing

organic:SEO & SMO

Viral Marketing

Newsletter


Traffic generation over Time

Time

Traffic from paid Online Marketing

Today?


CPA over Time

Time

CPA for paid Online Marketing

Today?

For paid traffic, CPA would remain almost same irrespective of time


CPA over Time

TimeToday?

CPA

With Organic growth, CPA is reduced over time

48% of 1,230 business executives from cross-functional disciplines indicated "organic revenue growth" is a top business goal this year.Source: Aberdeen Group


Buyer‘s decision stream

34.2 %eMarketplace

(Amazon, eBay,...)

25 %Search Engine(Google,Yahoo,...)

Retailer / Brand /

Manufacturer

(WalMart, Nike, …)

19.8 %

Product search portal/

Price comparison

(pricegrabber.com,

shopping.com)

20.2 %

eMarketplace

(Amazon, eBay,...)

Search Engine(Google,Yahoo,...)

Retailer / Brand /

Manufacturer

(WalMart, Nike, …)

Product search portal/

Price comparison(pricegrabber.com,

shopping.com)

49%

26.4%

23.3%

Where to search for product information? Where to intend to by a product?

Source: dmc inFocus 2010, Survey


Drop-out ratios

Product overview pages

Search result page

Product inspirations

Product

detail

pages

Shopping

basketHomepage

Product advisor pages 0,25-3%

100%

70-9

0%

Exit / Drop out! Exit / Drop out!

40-9

0%

10-30%

1-12%

Exit / Drop out!

50%

0,5-6%

Exit / Drop out!

50%


Viral Marketing

Viral marketing describes any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message's exposure and influence.


Viral Marketing - Strategy

An effective viral marketing strategy:

• Gives away products or services

• Provision for effortless transfer to others

• Scales easily from small to very large

• Exploits common motivations and behaviors

• Utilizes existing communication networks

• Takes advantage of others' resources

=> Let others talk about your products/services


The video campaign had generated almost 250,000 unique visitors

Case Study – MakeMyTrip.com


Customer Retention Strategies


From aquisition funnel to Retention circle

The OrderInteract

Fulfill

Feedback

Implement

Retention


Retention Strategy

Retention circle and the Strategy

Interact

Fulfill

Feedback

Implement

E-Newsletter

E-Mail Service Center

Social Media &Communities

Membership Programs

Frequent buyer programs

Online Surveys

Prod Reviews

Social Media &Communities

Delivery Time

Pro Active Order Status Updates




Reduce Customer Returns

Good Customer Service

Order fulfillment

Targeted Promotions

Loyalty Club

-> High customer satisfaction

CPA LTV

Low customer return rates

Delivery not meetingexpectations / promises

Poor products

Slow/Poor Customer Service

-> Low customer satisfaction


Important to collect data

Interact

Fulfill

Feedback

Implement

Retention


Customer Segmentation

Implement Retention Strategy at every stage of customer life cycle

Your Best Customers

Best Hope

Laggards

Spend on Service

Spend on Marketing

Re-activate / Archive

Example


A comparison for Customer Service and fulfillmentLeaders Vs Average (USA)

Leaders Average

Company Name Zappos Saks Avg of 100 Retailers

No. of hrs for e Mail response

0.98 0.88 20.69

No. of business days for delivery

1.0 4.0 4.05


How To Drive Business Growth




What should be the objective?

LTV

CPA

LTVCPA

or


Traffic generation over Time

Time

Traffic from paid Online Marketing

Today?


Driving Business Growth


Balanced model

CPA LTV




Do’s & Don’ts


Model could break

CPA LTV

Low customer satisfaction

Low customer return rates

SEO & SMO

Viral Marketing

Newsletter


Do’s

• Keep in touch with your customers regularly & relentlessly

• Reward repeat customers

• Share customer data that is gathered with everyone within a company

• Get regular feedbacks

• Keep your promises

• Know, how to apologize

• Monitor & Track your customers

• Personalize as much as possible


Don’ts

• don't let your own mistakes cause your customers to leave!

• don't neglect to understand you customer when they visit you

• don't just aquire, but also retain the customer by good products and services

• don't focus only in mass marketing

• don't force customers come to you

• don’t spent time on all users, find your target segment and work hard on them


Latest Trends


Behavioral Merchandising

Recommendation within

E-Mail newsletter


3 Step communication approach

Interact with your consumers proactively

Shop and Buy Pack & Delivery

Order

confirmation

e-mail

wait 4 weeks

Delivery

notice

e-mail

Feedback

request

e-mail

re-order rate53% 77%

customer care costs100% 31%

61%

42%


Success Stories


• Zappos is a service company which sells shoes, clothing, handbags, eyewear, watches etc.

Over 1000 brands, over 2,00,000 styles, over 900,000 unique UPCs

• Zappos “is powered by Service”

• On any given day, about 75% of purchases from returning customers

• Repeat customers have higher order size

• Create WoW experience – For example by upgrading them to overnite shipping

Repeat Customer Data for Zappos.com

Case Study - Zappos


Established loyalty programs that thank customers for previous purchases rather than encourage them to buy more

Tesco collects data on each categories of items purchased by more than 10 million Club card members.

It analyzes this tsunami of data to send a magazine with segment-specific contentand six highly targeted coupons to each member four times a year.

Four coupons are for products the customer already bought, and two are for products that the customer has never bought before but is likely to buy

Many promotions just rob future sales, but the analysis enables Tesco to generate more than £100 million in incremental sales each year.

Case Study – Tesco


Summary


Find the right mix of actions for your Strategy

Balance between Acquisition and Retention

Be aware of what’s happening and respond pro-active

Best-in-class can be x-times better


Our Company

• E-Commerce service company

since 1995

• e-commerce and e-business

projects in 30+ countries (incl.

Europe, US, Australia, Japan)

• Responsible for …

– 75+ Webshops

– 1.000.000.000+ USD

E-Commerce Order Volume/year

– 5.000.000+

E-Commerce Transactions/year

• 250+ employees at

Stuttgart HQ, Germany

• 80+ employees in Bangalore

• Offering E-Commerce services in

India and overseas

– consulting

– design

– technology

– hosting

– shop management

– online marketing (SEO, SEM, SMM)


List of webinars

• Webinar 1: E-Retailing - A perfect storm in India

• Webinar 2: Essence of Retail e-Commerce and its optimization

• Webinar 3:SEO - More Visibility, More Traffic & More Sales for free?

• Webinar 4:Social Media Marketing


Thank you for your interest!

Any questions?Daniel Rebhorn

[email protected]

www.xing.com/profile/Daniel_Rebhorn

www.linkedin.com/in/danielrebhorn

embitel / dmc systems India Pvt Ltd.

www.embitel.com

www.smarte-commerce.com

www.linkedin.com/companies/embitel


BACKUP SLIDES


Videos for example

•The top 10 picks for February, with links to view on YouTube:

•1. Bud Light – Clothing Drive, agency: DDB2. Sussex Safer Roads Partnership – Embrace Life, agency: Rockutainment3. Old Spice – The Man You Could Smell Like, agency: Wieden & Kennedy4. Google – Parisian Love, agency: Google Creative Lab5. Nolan’s Cheddar – Mousetrap, agency: John Nolan (parody ad)6. Puma – Hardchorus, agency: Droga57. Snickers – Pick Up Game (Super Bowl), agency: BBDO8. Doritos – Gym Ninja (Super Bowl), agency: Goodby Silverstein and Partners9. Cerveza Andes – Teletransporter, agency: Del Campo Nazca Saatchi & Saatchi10. Burton – Shaun White Double McTwist, agency: N/A

http://www.youtube.com/watch?v=ew9cEATPzDE

http://www.youtube.com/watch?v=h-8PBx7isoM

http://www.youtube.com/watch?v=0ZOm2YhOI4c

http://www.youtube.com/watch?v=auLJ6w80XRg

http://www.youtube.com/watch?v=PSupZ7WN_5Q

http://www.youtube.com/watch?v=K-_rf2jVxxY

http://www.youtube.com/watch?v=6rauK4fBjkI

http://www.youtube.com/watch?v=_13TYUx5KCQ

http://www.youtube.com/watch?v=eJaKwD2gyME

http://www.youtube.com/watch?v=qIr2ki4nWkU


THE END

E-Retailing Approach Customer Acquisition and Retention Webinar

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