eCommerce Metrics That Matter
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Transcript of eCommerce Metrics That Matter
Christian Rodericks June 2016
E-commerce Customer and Marketing Insights
The one metric to rule them all….
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Problem Traffic, Clicks and Sales metrics provide limited insight into channel and customer profitability ‘Stacked’ marketing costs and contribution margins are missing from the equation. In-store customer and promotional insights aren’t tied-into the digital world No easy way exists to view the most profitable channels and customers
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Solution A platform where marketers can quickly gain channel and customer insights to:
Increase Profitability
Identify the most
profitable channels and customers
Increase Share of Wallet
Retain and replicate the
best customers and channels
Optimize Spend
Understand stacked digital, loyalty and promotional costs
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It starts with understanding the…
Contribution Margin
In Cart Sales
Product Margin
Gross Margin
- Remove COGS
- Remove Cancelled & Returned Margins
+ Add Variable Marketing Spend + Payments @ x%
Maturity
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But - Variable Marketing Spend is Slippery
The eCom Data Landscape Is Vast • Segment customer base using
static data
Member Acquisition & Retention Member Brand and Member Engagement Media, Member & Product Profitability
• Segment customer base using product / event data.
• Segment customer base using CPA/LTV data.
• Segment customer base using dynamic data.
Inventory
COGS
Product/Brand
Margin
Campaign Tracking/Response
Orders
Acquisition Channel
Browse
Add to Cart
Events
LTV
Media Channel
Channel CPA
Customer Segment
Fraud
Geography
Member / Tombstone
Category Preferences
Loyalty
Demographic
Social
Shipping Timelines Promotions/Offers
Postal Code / Geo
Visit
Cancels & Returns
Engagement
Predictive Models
Repeat
Product Reviews
Membership Type
Acquisition Date
Channel CPO
Affiliate Costs
eCom ESP CSR OMS Google Other Calc Affiliates
Pricing / %age off
Web Analytic
s
Actual COGS
GL
Payment
A/B Test
Product Recommendation Credits
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What are my stacked costs to acquire & retain customers?
Understand the TRUE Stacked Cost Per Order
(CPO) – including Promos, Loyalty, Affiliate, SEM, etc..
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Channel Sales $ Margin $ Last Click Costs
Loyalty & Rewards
Costs
Commissions Costs Profitability
$1000 $800 ($450) ($200) ($50) 0.05
$500 $300 ($300) ($100) ($200) -0.6
$100 $80 ($0) ($15) ($0) 0.6
What are my most profitable channels?
CRM
SEM/Affiliate
Organic & Direct
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Who are my most profitable customers?
Category Sales $ Gross Margin $
Last Click Costs
Loyalty & Rewards
Costs Promos Costs
Profitability Ratio
$1000 $800 ($450) ($200) ($50) 0.05
$500 $300 ($300) ($100) ($200) -0.6
$100 $80 ($0) ($15) ($0) 0.6
1 2 3 4+
Retention LTP
60%
20% 15%
5%
Life Time Contribution Margin and Retention Scores for
every customer
What are the top 10% of profitable customers buying?
How often do my most/least profitable customers repeat?
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Methodology
Visualization Data Collection and Analysis
Risk Appetite
Business Constraints
Regulatory Drivers
Industry Practices
Technology Trends
Economic and Environment Forecast
Geographical Considerations
Acquisition Strategy
Retention Strategy
Segmentation and Personalization
Media and Offer Spend Optimization
Customer Life Time Value
KPIs
Channel Profitability
Brand Profitability
Category Profitability
Customer Analysis
Cost Analysis
Organization Analysis
P&L
Business Metrics
OUTPUTS INPUTS
Order Analysis
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Sample Marketing Analysis Dashboard
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Sample Life Time Contribution Margin Analysis
Year 1 Year 2 Higher Repetition &
More CM+ Customers
CM Climbing Up
Acquiring Profitable Customers from the start
Large # of CM –ve Acquisitions
Pattern of negative CM, repeating
customers
Small % of CM +ve customers
• Customer Retention Scores and Total Contribution Margin Values are plotted and grouped • % increase Contribution Margin Positive Customers
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Sample KPI Trend Dashboard
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Sample Active & Repeat Analysis
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Sample Fraud Dashboard
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Sample Category Performance Dashboard
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About
As a founding partner at SHOP.CA, Christian helped disrupt the Canadian eCommerce industry by helping build Canada's first and largest online multi-merchant marketplace. Christian helped conceive and build SHOP.CA's vision, mission, operating model, unique intellectual property, and the team that helped secure over $72MM CAD in funding. As part of the Executive Leadership Team, Christian is currently responsible for shaping SHOP.CA’s growth strategy by using data, analytics and insights to anticipate and capitalize on market opportunities. Prior to SHOP.CA, Christian was a Management Consultant with Deloitte and a Senior Product Manager with Cyberplex and Janna Systems, which was acquired by Siebel for $1.4B CAD. Christian’s academic background includes a Bachelor of Mathematics degree from the University of Waterloo and he is PMP, ITIL and TOGAF certified.