The E-commerce wave is still on the rise since it is a fairly new concept, definitely older than COVID-19 (too soon?) but definitely young enough that we are still trying to navigate this new waters.
However, one the most important things about it is that data and insights are more easily found and accessed since the very fact that everything happens online (the store, the purchase, the follow up) makes it so.
So we set out on a data journey this summer...
We took the summer when people began going out after months and quarantine, after a 2020 that is still blurry, after so many things happened, and decided to take a look at some key insights amongst several of the merchants we work alongside of.
Over 20 e-commerce merchants and their customer buying behavior data were analyzed.
What type of insights did we find? Keep scrolling...
Automation practices are common? Or are they?
We have founds merchants are more than aware of how important automation is, helps speeding up processes, maintaining them through the years but...
They also find them hard to implement.
What are the most common issues?
- Prioritizing which automation to attack first is often a very hard decision. Where to start?
- Every merchant in our study knew they should implement automations regarding abandoned carts and welcome email series for new customers.
- Almost half wanted to implement automated coupons at some point in the customer journey as a second stage. Only 2 actually implemented them.
- Most understood the importance of deeper segmentation and automation like workflows for loyalty programs, cross-selling, refills but very few had them in their task list as a priority.
Finding where to start has been the question of over 98% of the merchants we work with?
Where to find data?
How to analyze it?
How to get insights and act on them?
How to know where to focus?
That is what Unific is all about and we solved this step with one key product called: A Buyer Behavior Analysis.
Data, data, data...
We have developed a report that analyzes your customer data to understand which areas of your customer cycle can be worked on and which are working so well, they should be replicated.
The goal: SUSTAINABLE PREDICTABLE GROWTH
This means less risk, more revenue and more customers in love with your brand which translates to larger ALV (Average Lifetime Value).
The most usual data found? Gear up, here are some key insights from real life e-commerce merchants regarding Revenue Concentration.
We split the data in 6 segments, Low Value, New Customers, Promising, Loyalists, Big Spenders and Champions.
In 95% of our merchant data we found Big Spenders and New Customers had the highest revenue concentration providing key insights.
Facts are facts, it is statistically likely your revenue concentration looks a lot like that.
Few customers are Big Spenders but they bring in a lot of revenue. A bit of a spin in the 80/20 rule, which clearly is still the most likely scenario. High revenue, not too much population. Why? They spend more and you spend more on nurturing them.
Insight: Remember to nurture other customers as well, actually, remember to nurture all of them.
You got a lot of Big Spenders? Awesome! Now ask them what they love about your brand.
Talk to your team about what are you doing to nurture them and figure out how to apply it to other segments. Analyze their journey, how did they go from being New Customers to Big Spenders?
Now about New Customer concentration...
For most merchants over 35% or customers were in the New Customer category and this is where the second largest revenue concentration was found. In this case, large revenue and large population tells us something a little bit different.
This is where your acquisition efforts are concentrated, TOF if you will. The most expensive customers and an unusually high population concentration also indicated LOTS AND LOTS of potential, sooo many customers you can nurture into becoming repeat buyers, into experiencing the value of your brand over and over again.
So let's analyze...how many of them actually order twice? How many churn? Where are your acquisition efforts going?
Our report is particularly great for that, it shows how many of them have become Promising Customers, which is the next Segment in the lifecycle story.
Insight: Keep an eye on this segments churn rate, it quite literally means acquisition efforts are going to waste in the long term. Then think about your repeat customers, what did you do to help them become loyal? What did you miss with new customers you are bringing in?
Abandoned cart, newsletter and second order workflows are usually very efficient next steps that help this customers, become promising.
A great first step towards Customer Cultivation!
Great! Now what?
Now we ask, where do we want the revenue to be concentrated?
Definitely in the Loyalists, Champions and Big Spenders, but somewhat balance so as to not put your business at risk.
Remember the goal: SUSTAINABLE PREDICTABLE GROWTH.
It is time to get started!
On this video we go through an actual Buyer Behavior Analysis and discuss key insights regarding Revenue concentration.
*You need a store connected in the Unific platform for us to analyze the data and build the report.