Peter Sheldon — August 2, 2018 — August 2, 2018
6689062 / Pixabay
As consumers enjoy summer barbecues and beach trips, thoughts of holiday shopping are further from their minds than last Winter’s fruitcake. But if you’re a marketer or merchant, it’s already time to begin preparing for the holiday season. This make-or-break shopping period is chock full of opportunity and rewards. It’s time to ready your business for growth. Gift your holiday customers with a seamless shopping experience and ring in the New Year with fresh business insights.
Exceptional experiences are only possible when you have a deep
understanding of your customer.
That’s the only way you can deliver the right experience at just the right time and in the right context. More granular insights, including content response metrics, shoppers’ channel usage, and other business intelligence enables merchants to apply this data in the right context and the right time to develop more meaningful, loyal connections. By analyzing key attributes across the customer lifecycle — from browsing habits and purchasing histories — to social media engagement and activity, brands can uncover a variety of ways to present value.
Where your customers are coming from is as important as what they’re doing. Your site analytics should give you data on the source of your customers, but you should also track your marketing campaigns. Here are four transaction data points you can use to identify valuable customers:
1. Customer Lifetime Value (CLV)
CLV is a common metric used to find a company’s high performing customers. It’s defined as the revenue that a customer has generated by making purchases at a company, and it’s calculated by summing the purchase totals for each customer. Let’s say that a customer has three purchases with totals of $ 50, $ 80, and $ 20. This customer would have a CLV of $ 120. Customers with higher CLVs can be identified as more valuable.
2. Customer Lifetime Number of Orders
This metric is also useful for knowing a customer’s value. This metric totals the number of times a customer has placed an order on your site—which can be used to quantify a customer’s loyalty to your company.
3. Customer Average Order Value (AOV)
Once you have the customer’s lifetime number of orders, you can use it to find their average order value (AOV). AOV tracks the average dollar amount spent each time a customer places an order. To calculate a customer’s average order value, simply divide the customer’s total revenue by the number of orders. For example, John Doe has a total revenue of $ 150 dollars over five orders. His AOV is $ 30.
4. Age of Customer’s Most Recent Order
This is the age of a shopper’s most recent order. This calculates the amount of time that has passed since a customer has made a purchase. Let’s say Jane Doe has a high CLV, but hasn’t made a purchase since 2014. She may be high-performing, but she’s not really a current customer.
While these transactional data points just cover transactional commerce, there are a plethora of additional key performance indicators (KPIs) that can be leveraged to add value to your overall customer profile view. Merging the digital marketing universe of apps, email campaigns, online interactions, and social media with real life interactions and experiences—like where a customer ate dinner, their conversation with an airline reservationist, or the purchase they made at the mall—helps to round out the picture of your customer.
Beyond a customer’s digital profile is their real-world identity, and it’s critical for merchants to understand how these attributes fit into the full customer journey. Along with in-store purchase data, you can also gain insight into their brick-and-mortar buying habits, like the time of day they’re most likely to shop, the average time spent in a store, the frequency of their visits, or the categories of products for which they shopped.
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