You never know what you will find when conducting 80/20 analysis for eCommerce.

Hidden opportunities.

Looming threats.

Clues for campaigns that provide the right message at the right time to the right customer segment you didn’t even know existed.

I’ll share with you the results of a recent 80/20 analysis for a Revenue Conduit customer. For confidentiality reasons, I’ll withhold the name of the actual company and generalize some data.

Start with Getting the Data into Infusionsoft

A recent signup for Revenue Conduit purchased our Historical Data Service to export all of his orders, products and customers from Magento and import them into Infusionsoft.

Part of the service includes calculating data and populating a number of fields within Infusionsoft.

We use the fields for RFM Segmentation (purchase recency, purchase frequency and monetary).

The fields include:

  • Total Amount of Orders
  • Average Order Amount
  • Total Number of Orders
  • Date of Last Order
  • Amount of Last Order
  • Date of First Order
  • Amount of First Order
  • Average Number of Days Between Orders

For eCommerce, this data is gold (or rather, your means to acquire more cold hard cash).

Once all the data was in Infusionsoft, we exported it once again to an Excel file and popped it all into an Excel template we use for 80/20 analysis.

Finding the Hidden Gems

Our Excel template allows us to rank customers based on their total amount of orders and determine things like what percentage of customers account for what percentage of sales.

For instance, we found out that out of more than 8,500 customers, 1% (or 85) accounted for 15% of sales. Interesting.

Going further, 10% of customers accounted for 50% of sales.

If you ever wondered which customers to provide a higher level of service to, wonder no more. You can’t argue with data.

We also found out that 75% of customers had only purchased once. Just once!

Data-Driven Segmentation

This data was all but invisible before Revenue Conduit, Infusionsoft and 80/20 analysis.

But data alone does nothing. It needs action.

Based on the actual data, we configured campaigns in Infusionsoft to automatically segment customers based on their actual purchasing behaviors.

In three metrics, we ranked the customers on a 1 through 5 basis (with 5 being the best):

  • Purchase Recency (how recently has a customer bought from you)
  • Purchase Frequency (how many times has a customer bought from you)
  • Monetary (how much has a customer bought from you)

Based on our 80/20 analysis, we gave the 1% of customers that accounted for 15% of sales a Monetary Rating of 5.

Conversely, we made the bottom 50% of customers that accounted for just 25% of sales a Monetary Rating of 1.

For Frequency Rating, we gave the customers that had bought more than 10 times a Frequency Rating of 5, while the customers that had only bought once a Frequency Rating of 1.

Last but not least (since this is the most important metric of the three), we gave the customers that had bought in the last 30 days a Recency Rating of 5, while we gave the customers that had not bought in over a year a Recency Rating of 1.

Data-Driven Campaigns

So, what’s the result of all this segmentation? Without Infusionsoft and its Marketing Automation Engine, the result would be nothing more than enlightenment.

With Infusionsoft, we’re now able to put campaigns in place that target the specific customer segments.

For instance, we’re now putting a campaign in place that recognizes if a new customer is exhibiting the behaviors that lead to them becoming a Monetary Rating of 5. When the campaign recognizes these behaviors, a task is created for an Account Manager to build a personal relationship (among many other things) with the customer.

We’re also putting a campaign in place that will do everything we can to get a second purchase out of the customers that have only bought once.

We’ll have two sequences that we will filter the customers through.

One sequence will be for those customers that have bought more recently. The other sequence will be for those customers that have not bought in a long time.

The Impact to the Bottom Line

Both of these campaigns will drive new sales, new revenues and new profit into the company.

How much?

We’ll find out soon enough.

Any gain will be a net gain from the baseline of doing nothing.

The Right Message to the Right Person at the Right Time

It is all about delivering the right message to the right person at the right time.

You can’t do that without data.

You can’t do that without marketing automation.

And you really need to have your online store connected to your marketing in order to get the data and conduct marketing automation.