Time and time again, we discover that eCommerce growth is a question of retention, not of acquisition. But still, 90% of the marketing efforts are towards acquisition, while new customers generate less than 10% of the total margin. In this presentation that I've held at Meet Magento, I've focused my attention on the untapped opportunity of retention rate optimization, by using the RFM segmentation. That helps eCommerce managers in 5 different ways: 1. Know your ideal customer profile Why? Because you segment them with RFM, you can understand the true lovers: survey them and ask their demographics, barriers and reasons to buy from your website 2. Better advertising costs Why? Because you understand who’s your ideal customer ans focus on acquiring more relevant customers with more relevant messages and products for them 3. Higher retention rate & customer lifetime value Why? Because you understand who to focus at, offer special prices & experiences to who matters and acquire more customers you actually want 4. More relevant products Why? Because you find the brands, products and categories that make your customers churn 5. Better customer service Why? Because you can understand who matters and provide priority support, better response rates or tailor-made return programmes

1. What's being
hidden in
your Magento
Photo by N. ellladee from Unsplash

2. 1. Why businesses grow
2. Types of customer journeys
3. Hidden gems in Magento
4. Let’s get to action

3. Why do
businesses grow?

4. www.omniconvert.com
A Starbucks customer
have a lifetime value of
$16.000with an
average order value of
$8.
That means he’s returning
and buys from Starbucks
200 times.
That’s their engine of
growth.

5. Thanks to repeat business.
Lifetime value.
Retention rate.

7. With the same 50% new
business Yoy growth rate...

8. 60% retention
rate
40% retention
rate
20% retention rate
10% retention rate
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Annualrevenue

9. Customer Journey

10. 1
Demand
Generation
2 3 4
Standard Customer Journey for an eCommerce
1st Order
Is placed
Send Order
Confirmation
Order is
Delivered
6
2nd order is placed
(15% of the customers)
5
Ad remarketing & Email
blasting with discounts

11. Advanced Customer Journey for an eCommerce
Order is
Placed
Order is
Delivered
Treat any
objections that
might appear
Personalized
ad, email & web
experiences
1 2 3 4 65 87 9
Demand
Generation
Customer
satisfaction
survey / NPS
Enroll in the
Retention
programme
Send Order
Confirmation
2nd order is
Placed (50% of
the customers)

12. Main BrandsMain Product Categories
Calculate your customer
acquisition cost
Generate
insights
Buying Patterns Research
Execute!
Understanding your eCommerce buyer persona
Net Promoter Score
Demographics
Services satisfaction
Product satisfaction
Reasons to abandon
Reasons to buy
Customer Satisfaction
Surveys
Qualitative research
Channels
Brainstorm
ideas
eMail
Website
Custom audiences (FB, GDN)
Phone calls
1
Find out your average gross
margin
2
RFM Segmentation
3
Quantitative research
(Value of true lovers, share of
revenue vs share of margin, etc.)
4
5
6
7 8 9

13. More about how to build your
buyer persona:
https://www.omniconvert.com/blog/how-to-really-understand-yo
ur-buyer-persona.html

14. What’s being hidden
in your Magento?

15. Recency - How recent is the last order?
Frequency - How often that customer bought?
Monetary Value - What is the total revenue you got from the customer?

16. Points Recency (days since last
purchase)
Frequency / Monetary values (number of orders
and orders value)
5 within the last month customers who are in the top 5% in the database
4 within the last 3 months customers who are in the top 20% in the database
3 within the last 6 months customers who are in the top 30% in the database
2 in the last year customers who are in the top 60% in the database
1 more than a year ago the customers who spent and bought the least

19. True Lovers
These customers bought:
> most recent
> highest frequency
> large income R F M5= 5= 5=
www.omniconvert.com

20. True Lovers:
±15% of the margin comes from
±2.5% of your customers

21. Ex-lovers
These customers bought:
> Long time ago
> Very frequent
> Large income R F M1= = =5 5

22. Ex-Lovers:
±20% of the margin comes from
±9% of your customers

23. Who’s your Buyer Persona?
Why are they (not) buying anymore?

24. Why do you need an RFM Segmentation?

25. 1. Know your ideal customer
profile
Why?
Because you segment them with RFM, you can understand
the true lovers: survey them and ask their demographics,
barriers and reasons to buy from your website

26. 2. Better advertising costs
Why?
Because you understand who’s your ideal customer
ans focus on acquiring more relevant customers with
more relevant messages and products for them
Photo by Marten Bjork on Unsplash

27. 3. Higher retention rate &
customer lifetime value
Why?
Because you understand who to focus at, offer
special prices & experiences to who matters and
acquire more customers you actually want
Photo by Mathias Konrath on Unsplash

28. 4. More relevant products
Why?
Because you find the brands, products and
categories that make your customers churn

29. 5. Better customer service
Why?
Because you can understand who matters and provide priority
support, better response rates or tailor-made return programmes

31. Retention Rate impact

32. omniconvert.com/growth-engine

33. Proud to work with:

34. Valentin Radu
www.omniconvert.com/growth-engine
https://uk.linkedin.com/in/valentinradu
Thank you!