The story of Passover, is one of freedom and liberation from the bondage of slavery. Last week, we explained the connection between Passover and cart abandonment. But the connection between Passover and eCommerce does not end there. There is another aspect, and that’s the connection between Passover and shopper personalization by way of LTV and LTS.
“Wait, what, how on earth does shopper personalization have anything to do with Passover – you just made that up!”
Well, to answer that question, consider the fact that countless eCommerce retailers the world over have no way of connecting with their non-logged in guest shoppers. As for their registered shoppers, they don’t always have the means to track how much they spend, and how often they do so. This inability to connect with, and glean valuable insight from shoppers, is, in fact, a form of bondage to the uncertainty of future revenue – which can create endless anxiety for retailers.
You see, when an eCommerce retailer cannot connect with, and draw valuable insight from shoppers, they find themselves sweating over the fact that they are spending tons of money in an endless effort to acquire new shoppers. And while shopper acquisition is an important aspect of any business, so is shopper retention. And shopper retention is no good without personalization.
For reference, only 45% of marketers are focused on retention.
Thus, the Datacrushers Revenue Discovery Platform (RDP) works around the clock to free eCommerce retailers from the bondage of revenue uncertainty.
It is a known fact that highly-engaged shoppers purchase 90% more often than their non-engaged counterparts. On average they spend 60% more per transaction. That is why the Datacrushers RDP gives eCommerce retailers the tools to identify and connect with their guest shoppers. Furthermore, it’s advanced capabilities enhance an eCommerce retailers ability to retain existing shoppers and provide them with a personalized shopping experience!
How Exactly Does the Datacrushers RDP Do This?
Easily the single most important metric a business can use to gauge the value of any shopper is that of their Lifetime Value (LTV) and Lifetime Sales (LTS). These metrics are immensely important when it comes to shopper personalization.
Just in case you are unfamiliar with what exactly LTV and LTS are, here is a simple explanation:
- Shopper Lifetime Value (LTV): An objective value assigned to shoppers based on how much money they spend on a given website.
- Shopper Lifetime Sales (LTS): An objective value assigned to shoppers based on how frequently they complete a purchase on a given website.
To spell it out for you, LTV is the amount of money a shopper has spent at your business. That’s it. There is no special formula.
$$$x1 + $$$x2 + $$$x3 …. $$$x10 = $$$$
And LTS is the number of times a shopper has completed a purchase with your business.
Sale 1 + Sale 2 + Sale 3 …. Sale 10 = 10 Sales.
Now just to be clear, this metric can be imprecise – it depends on what you are selling. In other words, an expensive product, such as a couch, or jacuzzi, makes it hard to measure a shoppers LTV/LTS because such items are purchased infrequently.
However, goods such as food, clothing, and toys are likely to result in greater customer LTV/LTS in the short term – especially since they are easily measurable. For example, if you sell office supplies, there is a good chance you will have shoppers with easily understood LTV/LTS values. A travel agency might only need to order a single box of A4 paper every 3 months. However, a math teacher might need one box per month. Thus, the travel agency will have a lower LTV and LTS then the math teacher over the same period.
LTV/LTS doesn’t just show us how many times our shoppers have purchased and how much they spent – it also pulls double duty as a predictor of future behavior. Again this priceless when it comes to shopper personalization.
Shopper Segmentation in Practice:
For our purposes, let’s use the example of an online footwear retailer. This retailer has segmented his shoppers into 4 groups.
- Frugal Shoppers: They shop twice a year at most and spend between $100 – $300 per year. They are generally buying items for themselves.
- Casual Shoppers: They shop 3 – 5 times a year and spend $300 – $600 per year. They are also buying for themselves but are little less fiscally conservative than their frugal counterparts.
- Routine Shoppers: They shop 5 – 8 times a year and spend $700 – $1,500 per year. They are likely buying goods for their family. Winter boots are purchased annually as their kids get older.
- Generous Shoppers: They shop anywhere between 2 – 10 times a year and spend $1,500 – $3,000 per year. They can be routine shoppers and or enthusiast who enjoys buying the highest-end footwear available to them. With more money to spend, they might simply opt to place one or two large orders per year.
Enter Shopper Personalization:
Once you have started the process of segmenting your shoppers into different categories based on their spending habits, you can then go ahead with creating a more personalized shopping experience for them.
This can be done using both on-site and off-site techniques.
- For example, you could tailor their on-site shopping experience by serving up product recommendations while they are browsing.
When it comes to off-site personalization, the process is much easier to pull off across different shopper segments.
- You can create customized offers (coupons) for shoppers tailored to each of your unique segments to send out via an email blast or newsletter.
- You can also use these emails to highlight products that your unique shopper segments are likely to be interested in based on the items they previously purchased.
By segmenting shoppers into unique groups based on their LTV and LTS values, you are freeing yourself from the bondage of revenue uncertainty. Because you now have the power to create customized campaigns and offers for these unique shopper segments. It is exactly this kind of freedom that the Datacrushers RDP works tirelessly to provide for eCommerce retailers the world over. The Datacrushers Revenue Discovery Platform is not just about helping real people recover more revenue. It is also about providing real people with the freedom to get the most that they can out of their business by forming a real bond with their shoppers!