leveraging customer lifetime value data

---

LEVERAGING CUSTOMER LIFETIME VALUE DATA to Power Your Digital Marketing Strategy

Tweet Questions to @robertjmoore 

Inputs:



Outputs:



Order size



Best customers



Gross margin



Best campaigns



Repeat purchase rate



Best products



Time between purchases



Best collateral



...



...

Tweet Questions to @robertjmoore

Patrick Terrell VP of Marketing Prep Sportswear

Rose Hamilton @pet360_Rose

Amy McDowell @amy_liang

EVP & CMO Pet360

VP of Digital Marketing BaubleBar

Tweet Questions to @robertjmoore

RJMetrics: CLV Optimization Experts

Tweet 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?

Tweet Questions to @robertjmoore

CLV as cohort analysis

Tweet Questions to @robertjmoore

Trend #2: Data Silos

Tweet Questions to @robertjmoore

The data warehouse

Tweet Questions to @robertjmoore

Trend #3: Analysis Paralysis

Tweet Questions to @robertjmoore

Patrick Terrell VP of Marketing

Tweet Questions to @robertjmoore

15-second commercial: Prep Sportswear

Tweet Questions to @robertjmoore

CLV framework: know thy customer

Tweet Questions to @robertjmoore

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

Tweet Questions to @robertjmoore

Customer Data | Findings

Tweet Questions to @robertjmoore

Customer Data | Findings

Tweet Questions to @robertjmoore

Customer Data | Findings

Tweet Questions to @robertjmoore

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

Tweet Questions to @robertjmoore

Strategies • Increase successive purchases sooner and more often • Target highly valued segments • Cause lower segments to shift to mid-tier segments

Tweet Questions to @robertjmoore

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!

Tweet Questions to @robertjmoore

Thank You!

Tweet Questions to @robertjmoore

Rose Hamilton EVP & CMO

Tweet Questions to @robertjmoore

Tweet Questions to @robertjmoore

15-second commercial: Pet360 Pet360.com is the most comprehensive online resource for pet parents.

Tweet Questions to @robertjmoore

A brief history 1997

$7.5MM Investment

2007

2010

$18MM Investment

2011

2012

2014

2013

Tweet Questions to @robertjmoore

The burning platform • • • •

Competitive forces Customer behavior Technology trends Customer feedback

Tweet Questions to @robertjmoore

The vision for Pet360.com

Personalization

Trusted Information

Peer Support

Tweet Questions to @robertjmoore

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

Tweet Questions to @robertjmoore

Summary • • • • •

Enterprise View of Data Know Your Costs Customer Segmentation & Value Engagement vs. Marketing Focus = Long Term View Build “Proof Points” Along the Way

Tweet Questions to @robertjmoore

Thank You!

Tweet Questions to @robertjmoore

Amy McDowell VP of Digital Marketing

Tweet Questions to @robertjmoore

15-second commercial: BaubleBar

Tweet Questions to @robertjmoore 





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.

Tweet Questions to @robertjmoore

STANDARD PRODUCTS (RETAIL $20 - $60)

PERSONALIZED PIECES (RETAIL $30-$150)

Tweet Questions to @robertjmoore

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”.

Tweet Questions to @robertjmoore

Does the Buried Bauble program help or hurt? PROS:  High email engagement and conversion rates st  1 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

Tweet Questions to @robertjmoore

Cohort analysis: firsttime 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.

Tweet Questions to @robertjmoore

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%.

Tweet Questions to @robertjmoore

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.

Tweet Questions to @robertjmoore

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!

Tweet Questions to @robertjmoore

Panel Discussion

Patrick Terrell

Rose Hamilton

Amy McDowell

Robert Moore

@pet360_Rose

@amy_liang

@robertjmoore