1. E-Tailing approach:
Customer Acquisition & Retention
5th webinar of the retail ecommerce series
an embitel initiative
15th Apr 2010
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2. Speaker
Founder
dmc digital media center GmbH,
Germany
www.dmc.de
Chairman
Embitel, India
www.embitel.com
Daniel Rebhorn
dr@dmc.de
• 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
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3. Cost
per
Acquisition
Life Time Value
of a Customer
Is this the problem you’re facing too?
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4. Agenda
• Customer Acquisition Strategies
• Customer Retentions Strategies
• How To Drive Business Growth
• Latest Trends
• Do’s & Don'ts
• Success Stories
• Summary
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5. Customer Acquisition Strategies
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6. Customer Acquisition Strategy - Online
Merchandise
Sweepstakes
Up Sell & Cross Sell
Campaigns Viral Marketing
Behaviorally Targeted Marketing
Promotions
SEM (Adwords, …)
SEO & SMO
Display Ads (Banner, …)
Newsletters
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7. Acquisition Funnel and the Strategy
Generate Traffic SEO, SEM, Affiliate, Display Ads, Viral,
Newsletter
Merchandising, User Centric Design,
Attention
Cross-/Up-Selling,
Interest Product Info, Promotions
Research / Enquiry Onsite-Search, Reviews, Rating
Orders Sales Support, Simple checkout process,
Trust/ Security
Aquisition Strategy
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8. Source of generated traffic on Website
The Maximum a retailer can afford !
Paid Online Marketing:
~20% SEM, Display Ads, Affiliate
Total Traffic Marketing, etc.
~80% Direct & Organic Online Marketing:
SEO, SMO, Newsletters, etc
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9. Traffic generation & CPA
organic:
SEO & SMO
Viral Marketing
Newsletter
CPA
paid:
SEM
Display Ads LTV
Affiliate Marketing
CPA – Cost Per Acquisition
LTV – Life Time Value of a Customer
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10. Traffic generation over Time
Traffic from paid Online Marketing
Today?
Time
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11. CPA over Time
For paid traffic, CPA would remain almost
same irrespective of time
CPA for paid Online Marketing
Today? Time
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12. CPA over Time
With Organic growth,
CPA is reduced over time
CPA
Today? 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
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13. Buyer‘s decision stream
Where to search for product information? Where to intend to by a product?
eMarketplace eMarketplace
34.2 % 49%
(Amazon, eBay,...) (Amazon, eBay,...)
Search Engine Search Engine
25 % (Google,Yahoo,...) (Google,Yahoo,...)
Product search portal/ Product search portal/
Price comparison 26.4% Price comparison
20.2 %
(pricegrabber.com, (pricegrabber.com,
shopping.com) shopping.com)
Retailer / Brand / Retailer / Brand /
19.8 % Manufacturer 23.3% Manufacturer
(WalMart, Nike, …) (WalMart, Nike, …)
Source: dmc inFocus 2010, Survey
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14. Drop-out ratios
100%
Product overview pages
10-30% Search result page Product Shopping
Homepage detail
1-12% pages basket
Product inspirations
0,5-6%
Product advisor pages 0,25-3%
70-90%
40-90%
50%
50%
Exit / Drop out! Exit / Drop out! Exit / Drop out! Exit / Drop out!
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15. 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.
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16. 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
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17. Case Study – MakeMyTrip.com
The video campaign had generated almost 250,000 unique visitors
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18. Customer Retention Strategies
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19. From aquisition funnel to Retention circle
Fulfill
The Order Retention
Interact Feedback
Implement
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20. Retention circle and the Strategy
Delivery Time
Pro Active Order Status Updates
Fulfill
Online Surveys
E-Newsletter
Prod Reviews
E-Mail Service Center Interact Feedback
Social Media &
Social Media & Communities
Communities
Implement
Retention Strategy Membership Programs
Frequent buyer programs
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21. Low customer return rates
Delivery not meeting
expectations / promises
Poor products
Slow/Poor Customer Service
-> Low customer satisfaction
Reduce Customer Returns
CPA LTV Good Customer Service
Order fulfillment
Targeted Promotions
Loyalty Club
-> High customer satisfaction
CPA – Cost Per Acquisition
LTV – Life Time Value of a Customer
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22. Important to collect data
Fulfill
Interact Retention Feedback
Implement
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23. Customer Segmentation
Your Best Customers Spend on Service
Best Hope Spend on Marketing
Laggards Re-activate / Archive
Example
Implement Retention Strategy
at every stage of customer life
cycle
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24. Leaders Average
Company Name Zappos Saks Avg of 100 Retailers
No. of hrs for e Mail 0.98 0.88 20.69
response
No. of business days for 1.0 4.0 4.05
delivery
A comparison for Customer Service and fulfillment
Leaders Vs Average (USA)
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25. How To Drive Business Growth
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26. CPA LTV LTV
or CPA
What should be the
objective?
CPA – Cost Per Acquisition
LTV – Life Time Value of a Customer
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27. Traffic generation over Time
Traffic from paid Online Marketing
Today?
Time
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28. Driving Business Growth
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29. Balanced model
CPA LTV
CPA – Cost Per Acquisition
LTV – Life Time Value of a Customer
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30. Do’s & Don’ts
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31. Model could break
SEO & SMO Low customer satisfaction
Viral Marketing Low customer return rates
Newsletter
CPA LTV
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32. 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
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33. 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
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34. Latest Trends
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35. Behavioral Merchandising
Recommendation within
E-Mail newsletter
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36. 3 Step communication approach
 Interact with your consumers proactively
Shop and Buy Pack & Delivery wait 4 weeks
Order Delivery
Feedback
confirmation notice
request
e-mail e-mail
e-mail
53% 61% re-order rate 77%
100% 42% customer care costs 31%
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37. Success Stories
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38. Case Study - Zappos
• 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
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39. Case Study – Tesco
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 content
and 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.
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40. Summary
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41. 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
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42. Our Company
• E-Commerce service company • 250+ employees at
since 1995 Stuttgart HQ, Germany
• e-commerce and e-business • 80+ employees in Bangalore
projects in 30+ countries (incl. • Offering E-Commerce services in
Europe, US, Australia, Japan) India and overseas
• Responsible for … – consulting
– 75+ Webshops – design
– 1.000.000.000+ USD – technology
E-Commerce Order Volume/year – hosting
– 5.000.000+ – shop management
E-Commerce Transactions/year – online marketing (SEO, SEM, SMM)
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43. 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
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44. Thank you for your interest!
Any questions?
Daniel Rebhorn
dr@dmc.de
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
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45. BACKUP SLIDES
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46. Videos for example
•The top 10 picks for February, with links to view on YouTube:
•1. Bud Light – Clothing Drive, agency: DDB
2. Sussex Safer Roads Partnership – Embrace Life, agency:
Rockutainment
3. Old Spice – The Man You Could Smell Like, agency: Wieden
& Kennedy
4. Google – Parisian Love, agency: Google Creative Lab
5. Nolan’s Cheddar – Mousetrap, agency: John Nolan (parody
ad)
6. Puma – Hardchorus, agency: Droga5
7. Snickers – Pick Up Game (Super Bowl), agency: BBDO
8. Doritos – Gym Ninja (Super Bowl), agency: Goodby
Silverstein and Partners
9. Cerveza Andes – Teletransporter, agency: Del Campo Nazca
Saatchi & Saatchi
10. Burton – Shaun White Double McTwist, agency: N/A
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47. THE END
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