LEVERAGING CUSTOMER LIFETIME VALUE...

to Power Your Digital Marketing Strategy

LEVERAGING CUSTOMER LIFETIME VALUE DATA

Inputs:

Order size

Gross margin

Repeat purchase rate

Time between purchases

...

Outputs:

Best customers

Best campaigns

Best products

Best collateral

...

Tweet Questions to @robertjmoore

Rose Hamilton

@pet360_RoseEVP & CMO

Pet360

Amy McDowell

@amy_liangVP of Digital Marketing

BaubleBar

Patrick TerrellVP of Marketing

Prep Sportswear


RJMetrics: CLV Optimization ExpertsTweet Questions to @robertjmoore

Trend #1: CLV is not always CLV

Consider gross margin?

Why not first purchase?

Why not just sum up all revenue?

What’s truly apples-to-apples?


CLV as cohort analysis


Trend #2: Data SilosTweet Questions to @robertjmoore

The data warehouse


Trend #3: Analysis ParalysisTweet Questions to @robertjmoore

Patrick TerrellVP of Marketing


15-second commercial: Prep Sportswear


CLV framework: know thy customer


Case study |

• Surf and Streetwear Retailer- Brands and Styles

• 2+ years in operation• Only one acquisition marketing channel• Email campaigns were batch and blast• Best Customer Service was the focus


Customer Data | Findings


Customer Data | Summary

• Significant % of CLV concentrated in customers that transact a lot from 18+ month time segment

• Purchase segment 5X crossed into significant gross profit contribution grouping

• The most highly valued customer segment by second purchase was the 0-3 month segment


Strategies

• Increase successive purchases sooner and more often

• Target highly valued segments

• Cause lower segments to shift to mid-tier segments


Results

• Disrupted retail market

• 1100+% growth over 3 years

• Quickly gained significant market share


Considerations

• “What type business are you in?”

• Retention was major factor…but there were others

• Iterative customer analysis

• Watch your margin at all times!


Thank You!


Rose HamiltonEVP & CMO


Pet360.com is the most comprehensive online resource for pet parents.

15-second commercial: Pet360


A brief history

1997$7.5MM

Investment

2007

2010$18MM

Investment

2011

2012

2013

2014


The burning platform

• Competitive forces

• Customer behavior

• Technology trends

• Customer feedback


The vision for Pet360.com

Trusted Information

Personalization

Peer Support


Integrating LTV into marketing

• Balance customer value with cost structure

• Connect “intangible” customer value to profitable customer behavior changes

• Marketing and Finance Unite: LTV

- Balance CPA with LTV for growth

- Content/Community: Organic Growth

- Media: Monetization of Every Visitor

- Leading KPI: Engagement, AOV, CTR

- Lagging Indicators: LTV and Profitability


Summary

• Enterprise View of Data

• Know Your Costs

• Customer Segmentation & Value

• Engagement vs. Marketing Focus = Long Term View

• Build “Proof Points” Along the Way


Thank You!


Amy McDowellVP of Digital Marketing


15-second commercial: BaubleBar


100’s of new styles added each week.

Fashion jewelry is an easy and affordable way to stay on-trend.

The BaubleBar experience is fun and social.


STANDARD PRODUCTS (RETAIL $20 - $60)

PERSONALIZED PIECES (RETAIL $30-$150)


BURIED BAUBLES

Every Monday and Friday we secretly mark down an item to $10 or $20.

Subscribers receive emailed clues to help them with the “treasure hunt”.


PROS:

High email engagement and conversion rates

1st time buyer NPS is strong

Customer interviews indicate very positive interest

Market is familiar/comfortable with flash model

CONS:

Low AOV of Buried Baubles

Training customers to wait for discounts?

Inventory planning is challenging and time-consuming

Does the Buried Bauble program help or hurt?Tweet Questions to @robertjmoore

Cohort analysis: first-time buyers

Percentage of 1st time customers broken out by types of products bought

Very few first-time buyers purchase only Buried Baubles. 10% buy Buried Baubles with non-Buried Bauble product.


Cohort analysis: LTV Index

LTV Index of 1st time customers broken out by types of products bought

Given the lower PP of Buried Baubles, the LTV of these cohorts are lower than Control, but only by 15%.


Cohort analysis: LTO index

LTO Index of 1st time customers broken out by types of products bought

First time buyers who purchase Buried Baubles have a LTO that is 24-57% higher than Control.


Summary

• Decide which KPIs are you optimizing for and measure them.

• Test your hypotheses using cohort analysis as a barometer.

• You don’t need a lifetime worth of data to do a CLV analysis.


Thank You!

Panel Discussion

Patrick Terrell Rose Hamilton

@pet360_Rose

Amy McDowell

@amy_liang

Robert Moore

@robertjmoore


LEVERAGING CUSTOMER LIFETIME VALUE...

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