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Better eCommerce 2010 Embitel
E-Tailing approach: Customer Acquisition & Retention
5th webinar of the retail ecommerce series
an embitel initiative
15th Apr 2010
Better eCommerce 2010 Embitel
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]
Better eCommerce 2010 Embitel
Is this the problem you’re facing too?
Costper
Acquisition
Life Time Value of a Customer
Better eCommerce 2010 Embitel
Agenda
• Customer Acquisition Strategies
• Customer Retentions Strategies
• How To Drive Business Growth
• Latest Trends
• Do’s & Don'ts
• Success Stories
• Summary
Better eCommerce 2010 Embitel
Customer Acquisition Strategies
Better eCommerce 2010 Embitel
Customer Acquisition Strategy - Online
Behaviorally Targeted Marketing
Viral Marketing
Promotions
Campaigns
SEM (Adwords, …)
Up Sell & Cross SellSweepstakes
SEO & SMODisplay Ads (Banner, …)
Newsletters
Merchandise
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
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 !
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
Traffic generation over Time
Time
Traffic from paid Online Marketing
Today?
Better eCommerce 2010 Embitel
CPA over Time
Time
CPA for paid Online Marketing
Today?
For paid traffic, CPA would remain almost same irrespective of time
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
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%
Better eCommerce 2010 Embitel
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.
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
The video campaign had generated almost 250,000 unique visitors
Case Study – MakeMyTrip.com
Better eCommerce 2010 Embitel
Customer Retention Strategies
Better eCommerce 2010 Embitel
From aquisition funnel to Retention circle
The OrderInteract
Fulfill
Feedback
Implement
Retention
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
CPA – Cost Per Acquisition
LTV – Life Time Value of a Customer
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
Better eCommerce 2010 Embitel
Important to collect data
Interact
Fulfill
Feedback
Implement
Retention
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
How To Drive Business Growth
Better eCommerce 2010 Embitel
CPA – Cost Per Acquisition
LTV – Life Time Value of a Customer
What should be the objective?
LTV
CPA
LTVCPA
or
Better eCommerce 2010 Embitel
Traffic generation over Time
Time
Traffic from paid Online Marketing
Today?
Better eCommerce 2010 Embitel
Driving Business Growth
Better eCommerce 2010 Embitel
Balanced model
CPA LTV
CPA – Cost Per Acquisition
LTV – Life Time Value of a Customer
Better eCommerce 2010 Embitel
Do’s & Don’ts
Better eCommerce 2010 Embitel
Model could break
CPA LTV
Low customer satisfaction
Low customer return rates
SEO & SMO
Viral Marketing
Newsletter
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
Latest Trends
Better eCommerce 2010 Embitel
Behavioral Merchandising
Recommendation within
E-Mail newsletter
Better eCommerce 2010 Embitel
3 Step communication approach
Interact with your consumers proactively
Shop and Buy Pack & Delivery
Order
confirmation
wait 4 weeks
Delivery
notice
Feedback
request
re-order rate53% 77%
customer care costs100% 31%
61%
42%
Better eCommerce 2010 Embitel
Success Stories
Better eCommerce 2010 Embitel
• 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
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
Summary
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
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)
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
Thank you for your interest!
Any questions?Daniel Rebhorn
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
Better eCommerce 2010 Embitel
BACKUP SLIDES
Better eCommerce 2010 Embitel
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
Better eCommerce 2010 Embitel
THE END