This webinar discusses how ecommerce companies can improve customer retention through measuring customer satisfaction and loyalty. It recommends: 1) Using Net Promoter Score (NPS) surveys to measure customer satisfaction and identify promoters and detractors. 2) Focusing retention efforts on the "Magic 8%" of top customers who contribute disproportionately to sales. 3) Thanking promoters for their business, identifying issues from detractor comments, and implementing a customer "rescue" program to improve loyalty.

1. Webinar: Bake retention into your
eCommerce Pie
29 January 2013
Adam Dorrell John Ireland
CEO Directness Sales Director, EMEA & APAC
Adam.dorrell@directness.net Physical Commerce Group,
Digital River
jireland@digitalriver.co.uk
*Net Promoter, NPS, and Net Promoter Score are trademarks of
Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

2. Introductions
John Ireland, Sales Director EMEA and
APAC Consumer Electronics at Digital
River
Adam Dorrell, CEO, Directness

3. Introduction
• Who this is relevant to:
– Ecommerce professionals
– B2b and b2c sales
• What we will cover:
– Make the most from your existing customer base
– Utilise your most loyal customer to help acquire new
buyers (at low or no-cost).
– Using Net Promoter® as a benchmark
– Useful tips from real clients
• Who we are and our credibility:
– Adam Dorrell
• Former Director ecommerce for Sony Europe,
marketing (Dell, eBay), advisor to Philips and Canon
ecommerce
– John Ireland
• Sales Director leading ecommerce vendor, 14 years
in ecommerce (ebay)
*Net Promoter, NPS, and Net Promoter Score are trademarks of
Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.
Thomas S Watson, IBM 1921

4. ADVERTISEMENT
A word about CustomerGauge…
• CustomerGauge is the leading real-time
Net Promoter® measurement platform.
– Complete workflow and service recovery
system
– B2b, b2c and b2e solutions
– Automated reporting and digital signage
– Automated, with integrations to CRM
systems including SalesForce.com
– 32 languages (reporting system in EN,
DE, ES, FR, NL, CN)
• Launched 2007
• HQ Amsterdam, global coverage with
partners

5. It costs to acquire a new customer….
• Typical methods
– Advertising
– Adwords
= €166
• A real life example.
– Cost per keyword “Notebook PC” = €2.50
– Site conversion 1.5%
– i.e. only one in 67 bought
– Total acquisition cost = €166
• Total Adwords spend:
– In one quarter: €1m+
– Drove around 40% of sales
• Total spend on Retention:
– In same quarter: €52,000
– Drove 22% of sales
You can work the examples yourself

6. Remember this number
SALES
VALUE Magic
Customers
Your top 8%
customers =
48% revenue 8
= $HALF
• Work out most valuable customers
• On average, 8% ecommerce customers is nearly 50%
revenue, take from average of 7 major sites
• On one site, just 1% is 21% business!
Just 8% of ecommerce
customers contribute
48% revenue.

7. Retention Customers
“MAGIC 8”
•
•
On average, your top 8% customers order at
4x frequency of bottom 90%
On average, the top 10% of customers are
20x
worth 15x the value of the bottom 90%.
– On one site, the top segment was worth 22x
business! value
Top customers are worth
You can use
CustomerGauge as an
10 – 20x the value of the
excellent tool to
understand your customer
bottom 90%
lifecycle value

8. The Economics of Poor Customer Experience
It’s the
customers that
Case Study numbers from Gartner 2004. don’t complain
Assume 20m customers
Revenue = €6000m per year
Average Revenue
that you need to
per Customer = €300 per year worry about…
At risk — 34% 30,000 customers
Issue not resolved €9m
25,000 customers
Complain Defect — 28% €7m
2% 90,000
Poor experience customers
22% 4.4m Resolved — 38%
customers
Don’t At risk — 55% 2.4m customers
Positive complain 4.31m Decline in wallet $711m
experience 98% customers share
78%
1.94m customers
Defect — 45% €582m

9. So how to keep hold of your customers?
• Spoil them!
– Hint: It’s not always giving
them money off…
• Get feedback and act on it
• Tell customers what you
learned
• Give them tools to promote
you
Read the “Tipping Point”
by Malcolm Gladwell to
understand about your
1% “superfans”

10. Net Promoter in a
nutshell
• No more 40 page surveys
to a few contacts!
• Ask everyone a very short
survey, two questions
– “How likely are you to
recommend us to a friend
or colleague?”
• Report on Promoters or
detractors.
• One score
• Read customer comments
Download our cartoon guide:
http://customergauge.com/tag/nps-
comic/

11. Ask after every
transaction
• Short survey based on Net
Promoter Score
– One question
– One comment
• EXPECT +30% response
• Track Metrics
– Segment your customers
• Read comments
Make sure your survey is mobile
compatible – nearly 40% surveys
answered on a phone!

12. Acting on responses
“MAGIC 8”
• Organise and be ready
– Expect 50% or more of the responses to give
comments
– Read every comment
– One in a hundred will give you a brilliant idea
• Get the comments to the right people
– CLOSE THE FEEDBACK LOOP
– Best practice: 24 hours
• Categorise, and deal with issues tactically or
strategically
TIP! Set up a VIP desk for the “Magic
8”

13. Value & Loyalty Matrix
Customer Segmentation
Magic 8
Take actions to
Rescue
Key customers
IN DANGER OF
Value RESCUE REWARD
(spend, profit) defecting
&
LOWER PRIORITY Reward
Key customers
who can help
Detractors Promoters
grow sale
LOYALTY
(Net promoter
score)

14. Loyalty Revenue Report
“EXTREME 1%” Average spend for non response = EUR 114
For a promoter = EUR 221 (nearly double!)
Top Promoters spend EUR 3172
Top 1% Customers = 21% revenue

15. Activate promoters
•
•
Promoter Activation campaign:
– Identify the promoters who scored highly
on “I would be likely to recommend”
Say “Thank You”
$60
Sold per Email!
• Offer a gift for them, and two
friends…
• Recent result:
– Up to 80% open rates
– Sales result, averaged at EUR 40 for
every email sent…

16. Summary
“MAGIC 8”
• Find your “Magic 8” and use to
boost sales
• Use a solution like
CustomerGauge for:
– High customer engagement (30%)
– Customer Rescue activity
– Learn from feedback
– Identify your best customers and
Activate promoters
*Net Promoter, NPS, and Net Promoter Score are trademarks of
Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

17. Thank you!