In this talk held at Meet Magento, Valentin Radu, CEO at Omniconvert points out to the hidden leverage of eCommerce growth: retention rate & lifetime value optimization + how to become customer-centric by using RFM segmentation. More on https://www.omniconvert.com

1. How and why to make your Magento
eCommerce Customer-Centric

2. 1. The maturity phases of an eCommerce
2. RFM Model
3. Retention hacks
4. Let’s get to action

3. > Serial entrepreneur from Bucharest, Romania
> Passionate about psychology, data, relations & change
Valentin Radu
CEO & founder Omniconvert

4. WHAT DO WE REMEMBER
?
My life tests:
> 17 different jobs
> 4 companies
> 30 relationships
> raising 2 kids
> (Thank God!) - having one wife

5. eCommerce is not a
one-night stand

6. is about
habit-forming

7. Being data-driven
#GetUplift

8. Not acting
on old
assumptions

9. Maturity levels
of an eCommerce

10. 0-1 years
Focus
on
traffic

11. 1-2 years
Focus
on
orders

12. >2 years
Focus
on
customers

15. “After 24 months, 50% of the revenue is
generated by returning customers”

17. Intr-un e-commerce matur...

18. The average eCommerce
retention rate
Is 30%

19. If you have an eCommerce with a YoY
growth of 50% for new customers

20. 60% retention rate
40% retention rate
20% retention rate
10% retention rate
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Annual revenue

21. After 6 years, 90% of the revenue is
generated by returning customers,
at a 60% retention rate

22. Customer-centricity phases
Awareness Research Strategy
Execution
Business Intelligence
(NPS, RFM segmentation, Lifetime
Value vs Customer Acquisition cost)
Budget
(Retention programs, operations
team, new technologies)
Team
Technology
(to track, report,, personalize the
experience)
Business Intelligence Platform
Business Analyst
Personalization
BI Tool Survey tools
Data Analyst Data Analyst
Devs, UX, Customer
Support
Low Low Medium High

23. Awareness phase
1

24. https://goo.gl/8Ttyv9
Monitor
the right
KPI’s
1
2
3
4
5
Set strategic
goals
Strategic
Initiatives
Prioritise
Execute & repeat
#GetUplift

25. Strategic initiative
OS 1:
increase
NPS to 75
OS2:
Decrease
return rate
to 10%
OS 3:
Increase
LTV to
$3400
OS 4:
Increase
conversion
rate to 1.4%
OS 5:
Increase
retention
rate to 65%
Total
impact
score
Personalized thank-you letter after the
first order 5 1 3 0 4 13
PPC Hacking 0 0 0 2 0 4
Build / hire a growth team 3 2 2 3 3 16
Retention optimization audit 3 1 2 3 3 10
Activate a new payment method 0 0 0 2 2 4
Find out the buyer persona with on site
surveys 1 0 1 3 3 8

26. Cohort Analysis (how customers are churning through time)

27. Retention Rate impact

28. https://goo.gl/8Ttyv9

29. Retention Rate Optimization
methodology
2

30. Build the
RFM model
Analyze the impact
(NPS, Retention, LTV)
Don’t stop until you
have 100 ideas
Understand your
Buyer Persona:
surveys for each
important segment
Hygiene step:
Treat the pains
(product / services)
Start brainstorming
based on your budget
Cosmetics step:
Do the math - how much
can you invest to keep a
customer vs to acquire a
new one?
Execute
Restart

31. RFM Segmentation > Buyer Persona
3

32. Recency - How recent is the last order?
Frequency - How often that customer bought?
Monetary Value - What is the total revenue you got from the customer?

33. Customer Recency Frequency Monetary Value RFM
John Doe 3 4 2 9
Joan Doe 2 3 3 8
Geena Doe 4 1 1 6

34. Who’s your Buyer Persona?
Why are they (not) buying anymore?

35. How many of your customers
are placing the 2nd order?

36. Why?

37. From the ones which are not ordering anymore, how
many are not placing an order because of
> your products
From which categories?
Bad quality / false expectations?
> your services
Delivery time, experience, return policy, packaging, etc?

38. How to do it?
> On-site surveys
> Post-order emails
> Post-order remarketing FB ads
(with proper capping)

40. How can we use an RFM model?

41. Identify the best customers
Proper retention program
Higher retention rate
Higher revenue
Data-driven growth

42. Under-promise, over-delivery
On every touch-point:
personalization
4

43. Hand-written thank-you letter

44. Surprise gift

45. That’s for you to understand how happy
we are that you’ve placed your second
order on our website.

46. Courtesy call after the 1st order

47. A welcome-back surprise
according to recency score

48. Your homework
1. Emotions will build relations
2. You should make someone responsible for retention
3. Focus on habit-forming
4. You can’t grow retention (and anything else) if you
don’t monitor it. What you don’t measure, doesn’t count
5. Be good

51. Interested in our BI &
personalization plugin for Magento?
valentin.radu@omniconvert.com

52. A/B testing - wysiwyg editor, split
URL testing, multi-page testing
Actionable Surveys - Cart abandonment
surveys with real time objection treatment,
Net Promoter Score, Buyer Persona
identification
Web Personalization - change the visitor's experience
in real time using on-page variables based on Customer
Lifetime Value, Geo location, behaviour, Weather
conditions, etc.
Interactions - pop-ups, bars, widgets which can
be triggered on load, on scroll, on the exit intent of
the visitors
Business Insights - Track & monitor the
most important eCommerce KPIs, Llifetime
Value, RFM segment, cohort analysis, ROI,
YoY growth

53. Proud to work with:

54. Valentin Radu
www.omniconvert.com
https://uk.linkedin.com/in/valentinradu
Thank you!