With a global population exceeding 7 billion, Santa’s job is harder than ever. Fortunately, he has a few new toys of his own. We were delighted to learn that Santa’s Chief Data Scientist recently signed up for RJMetrics. We asked her if she’d mind us sharing some of the North Pole’s more interesting insights.
So what’s on Santa’s dashboard? Here’s the inside look at the data he tracks.
Tracking “Naughty vs. Nice” with Customer Segments and Drill-Downs
Santa has an enormous database of all naughty and nice actions by everyone under the age of 18. He can segment these populations by “net niceness” to determine how many children get toys and how many get coal. He can then filter these populations and monitor the trends over time.
Repeat buyers are the holy grail of ecommerce marketing. Research across our hundreds of ecommerce clients found that your best customers spend 30x more than your average customers. You want a big ROI? Keep them coming back. Now, with the obvious stated, let’s look at how you can turn these new holiday shoppers into repeat buyers.
At RJMetrics, we don’t just look at our data, we look at all the data we can get our hands on. It’s easy to get obsessed with our own data (in a good way, of course), but it’s helpful to look at bigger trends as well. When researching data for food and travel plans for Thanksgiving, some trend stats really stood out for us. We think these three stats speak volumes of how consumers think.
The first stat:
Over Thanksgiving, about 1 in 4 turkeys consumed is a Butterball Turkey
How we interpret this data:
The most terrifying part of this article is that turkeys have seemingly gone on a collective diet solely to ruin our Thanksgiving plans (well played, turkeys). However, the most interesting part of the article is that nearly 25% of Thanksgiving meals involve Butterball.
On average, the customer lifetime value of a holiday shopper is 15% lower than year-round customers. They chase sales and promotions, expect free shipping, and can be far outside the norm of your typical customer base. To boost ecommerce conversion rates during the holidays you can’t just rely on what works other times of the year. Instead, you to rethink some of the essential elements of the customer lifecycle.
Buzzfeed is full of numbered lists with sensational headlines. Have you ever wondered what number results in the most viewed articles? We certainly have. We asked our coworkers what number they would be most likely to click on and the answer was pretty much unanimous. It amounted to “Any number as long as there are cute baby animals.”
This answer didn’t satisfy us very much, so we decided to look at the data. Fortunately, there’s a view count on the bottom of every Buzzfeed article, so anyone with a little time and curiosity could do it.
Jeff Clavier, Founder and Managing Partner of SoftTech VC, estimates that he’s heard about 10,000 pitches in his life. Ask him what makes the best ones stand out and he’ll tell you: data. Recently Jeff joined our CEO, Robert J. Moore, for a Q&A webinar, Raising Venture Capital with Data. It’s worth watching all 53 minutes of the recording, or you can take the shortcut and catch some of the highlights here.
Full Disclosure: SoftTech VC is an investor in RJMetrics.
Choosing Where to Invest
On an annual basis SoftTech VC hears several thousand pitches, closing only about 20 of them. One of the most surprising data points that Jeff shared speaks to the importance of a strong network: over 9 years and the 143 closed deals SoftTech VC has made, there are 0 that came without an introduction.
How Founders Should Look at Data
Obviously, data is fundamental to what VCs are doing. The challenge for both investors and founders is that in early-stage companies there can be very little data to look at. Jeff shared a few things investors are always looking for:
1.) The costs of Facebook ads increase 55%
Not only are you competing with pictures of puppies in Santa hats, it also becomes more expensive to try to grab customers’ attention during the holidays. Tweet This!
2.) 2012 holiday emails increased 19% from 2011
The number of emails marketers are sending just keeps rising. In fact, consumers estimate that 43% of the emails in their inbox are from marketers. Tweet This!
With Twitter’s IPO and Instagram announcing ads, it seems like every social network is thinking about revenue. As James Whatley says in an article in the marketing magazine, The Drum,
social networks “need their users to have data to sell and need brand advertising dollars to keep the lights on and (whisper it) actually make some money.”
Inserting ads into a previously ad-free product, though, is dicey. Will users accept the corporate intrusion into this very personal space? Will usage start to falter?
A holiday shopper is not your average customer. The rest of the year, you might be selling high-end kitchen supplies to self-taught chefs. Come November, your new customer could be a take-out addict – hard pressed to describe the difference between a braise and brine. Making the assumption that a holiday shopper will become a year-round customer sets ecommerce retailers up to overspend, underspend, or spend in the wrong places to acquire these shoppers. Before jumping in to capturing new holiday shoppers, make sure you first understand just what a holiday shopper is worth.
According to the NRF 36% of holiday shoppers decide where to shop based on discounts and sales. A separate study by Deloitte found that 71% of holiday shoppers expect free shipping and 47% expect free returns. Couple this with the fact that that advertising becomes more expensive and inboxes become more crowded, you are looking at substantially higher acquisition costs around the holidays.
Email continues to be a top-performing channel for ecommerce marketers and you, along with every other retailer, will soon be showing up in customers’ inboxes with messages of upcoming holiday sales and promotions. The best way to ensure your email is the one that gets read is to tailor the right message, to the right person, at the right time. Certainly easier said than done, but it’s well worth the efforts.
Email service provider, MailChimp, found that segmented lists improve email performance, boasting open rates 14% higher than average and click rate 15% higher. As we’re entering the busiest shopping time of the year there’s never been a better time to use your customer data to create highly segmented email communications. The following are five customer segments to consider targeting this holiday season: