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How Lifecycle will impact online retail campaigns
Lifetime value is a term buzzing its way up in ecommerce circle. It means measuring and extending the value of a customer over the lifetime of that customer. I recently chatted with Ross Kramer about this trend and how brands can make the most of the lifecycle.
Kristina: How important is a tool like Listrak's Lifecycle Grid?
Ross Kramer, CEO, Listrak: On average we've found that repeat purchasers make up approximately 15-20% of an online retailer's overall customer base. Our Lifecycle Grid not only identifies those multi-purchasers and best customers, but it provides actionable data marketers can use to prevent customers from only purchasing once and lapsing.
The Lifecycle Grid is able to do this by segmenting customers based on the number of their purchases and last purchase date. The top right quadrant features customers that have placed several purchases recently while the bottom left quadrant shows customers who only purchased one time a number of months (or years) ago. With this segmentation, online retailers can now market to customers effectively based on their behavior and preferences - re-engaging one time purchasers to drive more sales and rewarding loyal customers. It allows online retailers to prolong customer lifecycles and increase lifetime value of every customer.
Kristina: Your data shows 30% higher open rates, 3X higher conversion rates. Are these fairly typical results for the Lifecycle Grid tool?
Ross: Those stats are correct in regards to segmented emails versus batch and blast, untargeted emails, and the Lifecycle Grid does allow you to segment customers in ways that you couldn't before. Thus those results are typical for the Lifecycle Grid's segmented emails; however, the beauty of the Lifecycle Grid is that you can also prolong customers' lifecycles resulting in higher open and conversion rates. With the Lifecycle Grid online retailers can turn their one-time purchasers into loyal customers, and their loyal customers into brand advocates who write and share product reviews with their friends and networks. These customers want to read online retailers' emails, and they are the ones who are most likely to buy after receiving an email, too.
Kristina: What trends are you seeing in email?
Ross: Online retailers are getting more personal with their email campaigns. The emails are more customer-centric than ever before, which is a switch from the previous product- or service-centric approach. More companies are sending abandoned cart campaigns, more are requesting product reviews after a purchase is made. Some send product care guidelines, and many send loyalty rewards information. The messages really are all about the customer as an individual.
Kristina: Back to school shopping will begin in just a few weeks, and then the 2012 holidays will be here. What do retailers need to do now to prepare for these big sales months?
Ross: Acquisition! Now is the time to focus on building a solid email list, complete with preferences. Many of our clients are running summer sweepstakes to help acquire new subscribers, and many have implemented a modal popup on their sites so web visitors have an easy way of staying informed. This pre-holiday or event campaigns, help to prepare and pave the way for more successful email campaigns and higher conversions during the holidays.
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