Christian Rodericks June 2016

E-commerce Customer and Marketing Insights

The one metric to rule them all….

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Problem Traffic, Clicks and Sales metrics provide limited insight into channel and customer profitability ‘Stacked’ marketing costs and contribution margins are missing from the equation. In-store customer and promotional insights aren’t tied-into the digital world No easy way exists to view the most profitable channels and customers

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Solution A platform where marketers can quickly gain channel and customer insights to:

Increase Profitability

Identify the most

profitable channels and customers

Increase Share of Wallet

Retain and replicate the

best customers and channels

Optimize Spend

Understand stacked digital, loyalty and promotional costs

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It starts with understanding the…

Contribution Margin

In Cart Sales

Product Margin

Gross Margin

- Remove COGS

- Remove Cancelled & Returned Margins

+ Add Variable Marketing Spend + Payments @ x%

Maturity

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But - Variable Marketing Spend is Slippery

The eCom Data Landscape Is Vast •  Segment customer base using

static data

Member Acquisition & Retention Member Brand and Member Engagement Media, Member & Product Profitability

•  Segment customer base using product / event data.

•  Segment customer base using CPA/LTV data.

•  Segment customer base using dynamic data.

Inventory

COGS

Product/Brand

Margin

Campaign Tracking/Response

Orders

Acquisition Channel

Browse

Add to Cart

Events

LTV

Media Channel

Channel CPA

Customer Segment

Fraud

Geography

Member / Tombstone

Category Preferences

Loyalty

Demographic

Social

Shipping Timelines Promotions/Offers

Postal Code / Geo

Visit

Cancels & Returns

Engagement

Predictive Models

Repeat

Product Reviews

Membership Type

Acquisition Date

Channel CPO

Affiliate Costs

eCom ESP CSR OMS Google Other Calc Affiliates

Pricing / %age off

Web Analytic

s

Actual COGS

GL

Payment

A/B Test

Product Recommendation Credits

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What are my stacked costs to acquire & retain customers?

Understand the TRUE Stacked Cost Per Order

(CPO) – including Promos, Loyalty, Affiliate, SEM, etc..

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Channel Sales $ Margin $ Last Click Costs

Loyalty & Rewards

Costs

Commissions Costs Profitability

$1000 $800 ($450) ($200) ($50) 0.05

$500 $300 ($300) ($100) ($200) -0.6

$100 $80 ($0) ($15) ($0) 0.6

What are my most profitable channels?

CRM

SEM/Affiliate

Organic & Direct

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Who are my most profitable customers?

Category Sales $ Gross Margin $

Last Click Costs

Loyalty & Rewards

Costs Promos Costs

Profitability Ratio

$1000 $800 ($450) ($200) ($50) 0.05

$500 $300 ($300) ($100) ($200) -0.6

$100 $80 ($0) ($15) ($0) 0.6

1 2 3 4+

Retention LTP

60%

20% 15%

5%

Life Time Contribution Margin and Retention Scores for

every customer

What are the top 10% of profitable customers buying?

How often do my most/least profitable customers repeat?

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Methodology

Visualization Data Collection and Analysis

Risk Appetite

Business Constraints

Regulatory Drivers

Industry Practices

Technology Trends

Economic and Environment Forecast

Geographical Considerations

Acquisition Strategy

Retention Strategy

Segmentation and Personalization

Media and Offer Spend Optimization

Customer Life Time Value

KPIs

Channel Profitability

Brand Profitability

Category Profitability

Customer Analysis

Cost Analysis

Organization Analysis

P&L

Business Metrics

OUTPUTS INPUTS

Order Analysis

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Sample Marketing Analysis Dashboard

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Sample Life Time Contribution Margin Analysis

Year 1 Year 2 Higher Repetition &

More CM+ Customers

CM Climbing Up

Acquiring Profitable Customers from the start

Large # of CM –ve Acquisitions

Pattern of negative CM, repeating

customers

Small % of CM +ve customers

•  Customer Retention Scores and Total Contribution Margin Values are plotted and grouped •  % increase Contribution Margin Positive Customers

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Sample KPI Trend Dashboard

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Sample Active & Repeat Analysis

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Sample Fraud Dashboard

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Sample Category Performance Dashboard

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About

As a founding partner at SHOP.CA, Christian helped disrupt the Canadian eCommerce industry by helping build Canada's first and largest online multi-merchant marketplace. Christian helped conceive and build SHOP.CA's vision, mission, operating model, unique intellectual property, and the team that helped secure over $72MM CAD in funding. As part of the Executive Leadership Team, Christian is currently responsible for shaping SHOP.CA’s growth strategy by using data, analytics and insights to anticipate and capitalize on market opportunities. Prior to SHOP.CA, Christian was a Management Consultant with Deloitte and a Senior Product Manager with Cyberplex and Janna Systems, which was acquired by Siebel for $1.4B CAD. Christian’s academic background includes a Bachelor of Mathematics degree from the University of Waterloo and he is PMP, ITIL and TOGAF certified.