6 Ideas You Can Try Today to Boost Your SaaS Growth and Retention

Growing a wildly successful software as a service (SaaS) business is a game of numbers.

More new customers than canceling customers? You’ll grow.

If not, you’ll stagnate, and the competition will gobble up market share right in front of you.

At the same time, not every new idea for boosting growth and retention will be feasible with the resources you have.

Your product team is busy working on ideas to build a SaaS product that is 10x better than what’s on the market. Your engineering team is building next generation technology that will give a crucial edge of the competition.

It’s not always strategic to pull them off core functions to work on the latest growth idea.

So, while they are busy working on the product, there’s still room for low-cost, easy-to-implement techniques to improve the growth and retention of your SaaS product today.

Think of these ideas as low hanging fruit you can get started on today to see results in the coming months.

1. Call New Prospects Immediately When They Sign Up

This is an idea that I first heard from Steli Efti. He makes the bold claim that if you’re a B2B SaaS startup you need to be calling all your free trial signups within the first 5 minutes.

You might be thinking whether spending time on the phone is a good use of your team’s time. It’s definitively not scalable once you’re getting hundreds of new trials per day.

The benefit is that as an early stage company, every phone call is an opportunity for customer development. Because the person on the other side just went through your marketing funnel, you’ll get feedback on whether your website is performing well.

It can also act as an “early warning system” for poorly targeted ads. You’ll potentially save a lot of money if you realize that your AdWords are attracting the entirely wrong set of audience based on the conversions you’re having with new signups.

The downside is that you’ll have to add a phone number input to your form, which may reduce your sign up rate slightly. You can make it optional so people can self-select whether they want to hear from you via the phone or not.

In my experience, people are generally happy to hear to from you if you call within minutes of signing up to welcome to the service and let them know if they have any questions you’re happy to talk.

The insights you learn from these calls can be turned directly into hypotheses for experiments to run on your SaaS onboarding funnel. For example, you might find out that many of the signups are using a specific piece of legacy software, so you can adjust the funnel to highlight how easy it is to move over to your product.

2. Offer a Weekly Webinar

Some of the best, “stickiest” SaaS products will be become deeply woven into the fabric of your customers’ lives, saving them countless hours or helping them generate more revenue.

But it’s often hard for people to “see” the improvements your product will bring when they are looking at the empty state of your app after they’ve just signed up.

In Elements of User Onboarding, Samuel Hulick refers to this concept as helping your users envision their improvement.

Webinars are an opportunity to give them a glimpse of how your product will look in action after they’ve been fully onboarded.

Once they’ve seen with their own eyes how easy your product makes it to get a specific job done, they’ll have a reason for why they’re going through the hard process of trying something new and investing in learning your product.

At the same time, webinars can be operationally challenging. Live webinars, in particular, pose problems. You’ll need a soundproof studio with someone to keep an eye on the chat box while another person walks people through the product demo.

And then the problems start: the wifi is patchy, your product doesn’t respond as expected while live on air or your mic suddenly stops working.

It’s tough to stay calm on camera!

Therefore, Intercom took a hybrid approach to product demos. They showed pre-recorded demos interspersed with live Q&A and discussion.

They automated the part that could be automated, such as showing how to do a particular job in their app, while they kept that part that couldn’t be automated: live feedback from a product expert.

Personally, I was skeptical when I first heard of this “hybrid” approach, but I decided to give it a whirl.

For the first version, you can use something like Screenflow or Camtasia to quickly record your screen coupled with a decent mic such as the Samson Meteor Mic to get good audio.

I was worried that webinar attendees would be disappointed that the video wasn’t live. However, those fears turned out to be unfounded. In fact, because I could concentrate on the questions coming in via chat, I could give better answers to questions and quickly pull up the relevant documentation to send to them right there.

I’d particularly recommend this approach if you want to offer multiple webinars a week for different time zones.

3. Try Out a Win-Back Offer for Expired Trials

When you first launch your product, users may like your MVP product, but not pull the trigger on moving over to you, just yet. However, as you develop your product into a more fully featured solution, those initial prospects might just be ready to move over.

I’ve noticed that several SaaS providers send out “win back” emails to dormant trial accounts after a year, offering them another 30-day trial while highlighting what’s changed in the meantime.

Here’s an example from Front:

winback email

The great thing about this tactic is that it’s so easy to implement. You can manually pull a list of these accounts every month to start. If the tactic works well for you, you can move to an automated email.

4. Send a Summary of “What Happened This Week in Your SaaS” via Email

I first heard this idea put into words by Patrick McKenzie, a serial SaaS entrepreneur:

Many SaaS products work day in, day out on your behalf. For example, monitoring services such as StatusPage test your services every minute to make sure all services are operating as expected. Other examples include connecting services such as Zapier, which let you link up data from various services.

These services work for you in the background. In best case scenarios, you might not log into these products for months on end.

A monthly “report card” listing what the app did for you each month will clearly demonstrate the value you’re getting from that particular SaaS. In the next financial meetings when ongoing subscriptions are put under a magnifying glass, your customers will be able to defend their monthly subscription to your service to the accountants.

An even better approach is to put a dollar number to the value you provide, as Nickelled does:

summary email from seas company

Depending on what your application does, you can send out emails highlighting number of issues closed, number of conversions tracked or leads generated. The closer you can get to a metric that managers care deeply about, the better this tactic works.

5. Retarget SaaS Trials with Customer Success Content

Retargeting is a powerful way to reach out to your past visitors to get them to come back to visit your site. In fact, there’s nothing right now that can work as well as retargeting (for your non-identified users).

Often, SaaS companies use retargeting to get past visitors back to their site so they sign up.

But you can also use retargeting in a myriad of ways to drive better retention of users.

For instance, you can target people within your free trial period with an ad for your webinar. Facebook Lead adverts make it so easy to sign up to the webinar with pre-filled fields. Just two touches and you are signed up, even on a mobile device.

Facebook lead ad example

Mocked Up Example of a Facebook Lead Generation Ad

Alternatively, you can advertise customer success stories that highlight the type of value that people can expect to get from your product.

Once customers have activated and are paying customers, you can even take retargeting a step further and start targeting customers that look like they might be in danger of churning based on the data you see in Kissmetrics.

You can export a monthly segment of users that are danger of churning and target them with ads on more advanced features they are missing out on or strategies for getting more value from your product.

6. Offer a “Done for You” Data Onboarding Package

Depending on your SaaS, your customers may need to move a lot of data over to your app before they can get started. Particularly if you’re starting out, this roadblock may get in the way of many of your customers using your product.

Offering a “done for them” data onboarding package to new customers can be a way to smooth the path.

In many cases, this data will have to be moved over from one of your competitors. Other times you’ll be faced with a collection of excel sheets, CSV files, or SQL dumps. The result is that you’ll be faced with importing data from a myriad of different software, including custom in-house solutions.

This diversity of data sources makes it difficult to offer an entirely automated import flow that your customers can carry out themselves. Even importing something as “simple” as a CSV file can be fraught with issues, as Patrick McKenzie points out.

Typically, enterprise customers won’t bat an eyelid at paying for this service, whereas an upfront charge can be a barrier for many SMB customers.

Test Out New Ideas On a Regular Basis

Small improvements in your growth rates and churn rates can have a big impact on your bottom line. Each optimization in your funnel results in more customers using your product, more word-of-mouth referrals and higher customer lifetime value. The revenue this generates means you can invest more back into product development and growth, accelerating the growth loop.

Do you have some ideas on how to boost growth and cut churn? Let me know in the comments!

About the Author: Thomas Carney has worked for tech companies in Munich, Paris, and now Berlin. When not on a computer, he’s at CrossFit or trying to brew the perfect coffee with an Aeropress coffee maker. He writes about marketing for SaaS at ThomasCarney.org.


The Kissmetrics Marketing Blog

Don’t Interrupt Me! How to Engage Your Customers Without Annoying Them

Are you annoying your customers?

Probably so.

Inundating your audience with multiple messages at inconvenient times isn’t helpful. Therefore, it’s important to know when and how to engage with consumers.

“Marketing is your way of connecting with your customers as well as a way to convey your business’ personality and values – it’s an essential channel…Even companies with the best of intentions can often manage to annoy their target market,” writes Jennifer Warr, former engagement and awareness cell leader at Klood.

Let’s explore what you can do to market your brand without being a nuisance. Here are five strategies to stop your annoying behavior:

1. Prioritize Your Customers’ Needs

Customers are the primary asset of your company. If you don’t prioritize their needs, everything else falls apart.

This principle is especially true when engaging customers. People can easily recognize when your intentions aren’t authentic.

If you’re not focused on what matters to them, your brand comes off like a car salesman pushing the purchase of an unwanted product. Then, the customer reacts by ignoring your messages and possibly going to your competitors.

Start approaching the customer relationship with respect. As a trusted advisor, you want to communicate the most relevant information.

To avoid the common myths around customer needs, analyze your behavioral data, including website and email activity, to learn your customers’ habits, priorities, and desires. Their actions will help you identify how to craft the conversation.

what customers don't need

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If your data shows that your customers love matching your blue T-shirts with green shorts, you could send a post-purchase email with a discount for the shorts. In this case, you’re not annoying your customers. You’re providing valuable content.

There’s no good reason to annoy your customers. Learn their needs to become a trusted resource, not a recurring burden.

2. Stay Away from Information Overload

It’s important to educate your customer. However, don’t overload your audience with too much information at once.

When people see lots of text, a couple of questions pop into their minds: How long will it take to read this? Is this even worth my time? These are the initial hurdles facing companies producing content.

To address the first question, you need to be mindful of the customer’s time. She’s juggling multiple tasks and wants you to get straight to the point.

For instance, when visitors land on your website, they should know immediately how your product benefits them. That means decluttering your website by removing the multiple pop-up screens and sidebars.

When arriving to Instapage’s site, it’s easy for consumers to figure out that this brand offers landing page software that increases conversion rates.

instapage guarantees to increase conversion rates

The second question is where some companies struggle. For any content to be worth your customer’s time, it must offer some type of instant value to the person. It should directly highlight their pain points or lead them to a specific solution.

Let’s say you’re writing a case study about how a customer achieved success with your product. It isn’t good enough to just talk about the outcome. The value in a case study comes from emphasizing the problem, the process, and the result.

Customer engagement is effective when you leave out the unnecessary information. Try producing straightforward content that offers a solution.

3. Convey Every Message Differently

As an experienced marketer, it’s likely that you’ve heard about the rule of seven. It’s the assumption that consumers need to see your offer at least seven times before taking action.

It’s not an exact science, but the rule gives you a foundation on how many times to engage with your customers.

What’s frightening is how companies implement this principle. For some companies, it’s sending the same email multiple times to a subscriber until the person clicks the link in the message. Or it’s copying and pasting the words in a blog post into a SlideShare.

Repeating the same message over and over isn’t useful. It becomes noise to the customer, and that noise becomes annoying.

Instead, every piece of content should not center around the sale. Here’s Susanna Tarrant, a digital marketing coordinator for Marketing Copilot, thoughts on the topic:

“Rather than trying to close the deal too early, you should create content filled with information for your audience. A useful content marketing strategy changes the conversation. It makes it about your customer and not about you or the sale.”

For example, if you’re planning a five-day email campaign, introduce your brand in Email #1, talk about the problem in Email #2, highlight a case study in Email #3, discuss the negative consequences of inaction in Email #4, and present your product solution in Email #5.

Every message doesn’t need to talk about your product. Craft your content around the customers’ needs and the sales journey.

4. Avoid Inconvenient Surprises

Somewhere between rewards and hidden fees, marketers got confused on what types of surprises customers desire. It’s becoming the norm to not tell consumers the whole truth until checkout.

This practice is not healthy for the brand-customer relationship. Hiding the fine print about upcharges or credit card fees only builds a barrier.

Your customer will have one more reason to not trust you. Plus, these unexpected markups can lead to more abandoned shopping carts, negatively affecting your sales.

customer surprises to avoid

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But it doesn’t stop there. Other less known surprises include a 404 page to a critical resource, slow response times with customer support, and payment processing errors.

While your team may see these as minor glitches, your customers perceive them as another reason not to do business with you. Your customers want you to live up to your brand promise.

“Somewhere between best intentions and actual staffing, budgets, and IT limitations lies the real world of customer interactions. Don’t tell your customers you value them and then banish them to an automated system or place them on hold for 30 minutes while they wait for a rep,” states Samuel Greengard, contributing writer at CMO.com.

Unwanted surprises shouldn’t interrupt the customer experience. Work with your team to identify which ones annoy your target audience.

5. Engage in a Timely Manner

When you engage with customers is just as important as how you engage. The right message at the wrong time still equals an interruption to the recipient.

Most content splits into two categories: evergreen and seasonal. Evergreen content is information that continually remains relevant. Seasonal content is information with a finite endpoint.

You’ll notice lots of businesses posting evergreen content at random times with a mix of seasonal content, like news jacking pieces. Their strategy is well-founded, but not necessarily results-driven.

The alternative is to send timely content that fits the customer’s current needs. An evergreen blog post isn’t timely if it doesn’t solve the present problem. A seasonal message doesn’t help the customer if he wants his year-round issues solved today.

To send timely content, you must understand your customers’ behaviors. You’re aware of what type of lead magnets they download, how many times they visit certain pages, and the purchasing history with your company.

Triggered email marketing campaigns are one solution to sending timely and relevant content to your audience. With automation and if-then logic, customers can receive messages based on their behaviors.

For example, if a customer doesn’t repurchase a product in 60 days, you can send a retention email. Kissmetrics Campaigns makes it easy to create these behavior-based messages.

Are you engaging with timely content, or just interrupting? Reevaluate when you communicate with your audience.

Stop Annoying, Start Engaging

It’s definitely possible to irk your customers with unfavorable marketing habits. Engagement is a better method for connecting with your audience.

Start by learning and prioritizing your customers’ needs. Deliver different messages based on the customer journey. Also, don’t surprise your customers with hidden charges.

Treat your customers well. Start engaging with them.

About the Author: Shayla Price lives at the intersection of digital marketing, technology and social responsibility. Connect with her on Twitter @shaylaprice.


The Kissmetrics Marketing Blog

What a Baby Clothes Blog Can Teach You About a 991% YoY Growth Using Paid Acquisition

Spearmint LOVE started off as a baby clothes blog less than five years ago.

Founder Shari Lott had already built up a strong online presence with her popular mommy blog of a similar name, SpearmintBaby.

The premise was simple.

She’d feature and share products she thought other moms would like.

One day, in search of the perfect Swiss Cross blanket for her daughter’s room, she was inspired to expand her vision into a little ecommerce site.

Now, just four years later, it’s the only baby and children’s clothing online store that was picked to be a part of Facebook’s 2017 U.S. Small Business Council.

Shari had an excellent eye for design.

And it didn’t hurt that she also had an excellent husband, John Lott, who just so happened to previously run a $ 23B dollar hedge fund.

Together, they’ve masterminded a 991% YoY growth with a 33.8x return on Instagram ad spend, 47% decrease in cost per purchase, and an incredible $ 0.11 average cost per conversion.

Here’s how.

1. Multi-Channel Expansion

“Marketing” used to mean something.

Before PR and prior to advertising, it also meant Product, Pricing, and… Place.

That last one, known better by Distribution today, is about making products available for people where they already shop (roughly speaking). Practically speaking, that means convenience.

Spearmint LOVE went from two SKUs to over 5,000 SKUs in just three years.

When did Spearmint start hitting the big numbers? You guessed it– when they started to give customers more ways to buy.

“We feel really good about how we’re positioned in the market,” John said. “We’ve given our customers nearly every conceivable way to buy from us. They can do Buyable pins. They can buy on a Facebook page. They can buy on their mobile phone. They can use their computer. They can buy however they want to.”

spearmint ventures pinterest

But scaling to multiple channels takes some finesse and strategy.

Getting a handle on one channel can be difficult enough. Then adding more to the mix means extreme coordination and resource management. Spearmint had to evaluate its readiness for that kind of growth and make sure it was even the right time to scale.

Here are the four biggies to consider when you want to expand to multi-channels:

1. Do you have the manpower for customer service?

More channels means more sales means more questions from more customers. And more customers might even be coming from different timezones around the world.

A retooling of current customer service practices could be in order, like adding more people to the team, switching up or extending hours, retraining on the product and businesses, and even considering outsourcing the customer service operation.

2. Do you have enough inventory?

Remember those increased sales? That means you have to have enough inventory to cover them. And you have to get the delivery time under control, too.

You can stock and/or drop ship your inventory, but you need to make sure products are getting to the customer as quickly and efficiently as possible. Management of the product means keeping accurate tabs on counts, sources, and allocation.

3. Can you fulfill the orders?

Are you currently handling all fulfillment in-house? When expanding to multi-channels working with a fulfillment house might be the way to go to handle the increased orders.

4. Is your tech ready?

You’ve now got more channels, more customers, and more staff. That means you now need better software to communicate with everyone, manage inventory, and all your outsourced operations.

Figure out what you’re gonna need here: sorting and routing orders to and from multiple suppliers? Product ID coordination on all your channels? Proper integrations? Reporting?

And what’s your budget?

With some software, the price goes up with every additional SKU or number of processed orders.

So keep in mind you’re often going to be outlaying cost — for increased labor, inventory, promotion, and technology — before ever seeing a dime on these new sales.

2. Intimately understand your cost per acquisition

John came on board to work with his wife, Shari, in 2016.

It just so happens that his hedge fund expertise complements her design eye and customer-intel.

Being a numbers guy, he went straight for the data, and immediately started focusing on their cost of acquisition as the accelerator (or roadblock) to scale.

For him, this is where to build the company’s success. Driving down the cost of customer acquisition first buys you more time to focus on the other side of the equation: Increasing the lifetime value of each customer via upsells and cross-sells.

For Spearmint, less than $ 10 per customer is the goal. The closer they get to $ 5, the happier they are (more on that below).

John refers to this as the tip of the spear in understanding business success.

“We decided very early on that we weren’t going to raise any outside money at all,” John said. “I pay very close attention to what the self-funding growth rate of the company is. If I get customer acquisition costs right, then I’m making sure I’m doing the right thing from a cash perspective.”

The $ 5 platform for Spearmint? Facebook.

And how does he keep costs so low? John reportedly checks this metric every.single.day.

So on a daily basis he’s scrutinizing: What’s the cost of acquisition of the active campaigns?

Then he’ll switch gears on longer intervals to ask:

  • What’s the audience growth across channels? (Weekly)
  • What’s the aggregate return rate of customer acquisitions? (Monthly)

He takes all of this data to see if they are growing… if their growth has slowed… why either is happening… what’s causing it… etc, etc, etc.

In other words, they intimately understand the math behind each and every conversion.

They know when A/B tests are lying. They know when new customer data is ‘leaking’ outside of their funnel.

And if something’s not working? They’re not afraid to pivot.

3. Be prepared to change course

“Everybody has a plan until you get punched in the mouth.”

Sage advice from a wise old man.

mike tyson meme

See, scrutinizing data and reading every blog post imaginable is nice. But things will never play out like you think they will. Like, never ever.

So you gotta adapt.

In 2016, Spearmint LOVE’s revenue grew by 1,100%. Sounds impressive now, after the fact.

But hindsight’s 20/20 they say.

The picture wasn’t so rosy in the Spring of 2016. ROI kept dropping. Nobody could figure out why.

First, John assumed that their ad wasn’t fresh any more, and that Facebook’s algorithm meant it wasn’t being shown as much. Ad fatigue is a thing.

more ads fewer ctr

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So they updated their ads, giving them new photos and copy. Still, the ROI didn’t budge. No sign of the up-and-to-the-right picture it is today.

About six months into freshening up the ads, the answer hit John while on a walk.

It wasn’t the ad at all. Rather, it was the audience.

They weren’t in the market for the same thing anymore.

It’s like this:

Six months after an ad goes live, Spearmint LOVE’s target audience (new moms), now have a baby/toddler/child that is six months older. They aren’t looking for that product anymore.

Babies, apparently, don’t stay babies forever.

So Spearmint LOVE now tailors its ads to the different stages of a mom shopper:

  • Pregnancy,
  • Birth,
  • 1st birthday, etc.

At every stage, shopping habits shift. And at every stage, Spearmint LOVE now has a different ad.

So it wasn’t the ad creative after all. It was the ad targeting that was influencing their ROI.

4. Targeting Ads, Then Targeting Even More

“What was happening was the people were changing,” John said.

“The mom who was buying that product was no longer in the same life stage. I had to adjust my custom audiences to be attentive.”

The ROI dropoff was simply a reality of Spearmint LOVE’s ever-changing audience and industry. To combat the problem, John realized they needed more dynamic ads to continue attracting their evolving audience.

This is where Facebook’s Custom Audiences come into play. You can group audiences based on their levels of product awareness and intent to buy based on a number of criteria, like:

  • Website visits
  • Product views
  • Page engagements
  • Video views
  • Products added to cart
  • And more

Facebook custom audience ad setting

Custom Audiences give an upclose view of customers by dividing them up into segments, and giving them the message that is right for them.

Depending on where the customer is in their buying journey (are they brand new, cold prospects? Or are they on fire and ready to buy?), you are looking at three different things here: (1) separate ads/offers for (2) separate groups of people in (3) separate groups of custom audiences.

Like this:

klientboost channel temperature

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Here’s how that looks as you go down the sales funnel.

Ice cold (top of the funnel)

You can’t do custom audiences for these newbies, but you can get to know them better to eventually place them into a group. And, you can’t start moving them through the funnel to get them into custom groups.

Entice them with an ad and get them to your website to learn more, for instance.

ecommerce advertising on Facebook

Image Source

You can even create custom audiences based on Facebook engagement (if you don’t have a site that typically generates high-traffic). If a customer likes or comments, clicks on a CTA, or saves a post, they can be added to this list.

Lukewarm (middle of the funnel)

After making people more aware of the product through web visits and Facebook engagement, you can move them down the funnel into action territory.

This means, opting-in and handing over some of their contact info. Dangle a little lead magnet, why don’t ya?

lead magnet paid advertisement

Offer a “free course.” How about some actionable items for the customer to take to let them know just how useful the product is?

Each separate opt-in option has its own custom audience. You can break these down even further by what the opt-in service offers, or by simply creating a custom audience for each lead magnet.

Fire hot lava (bottom of the funnel)

The chilly customers are getting the new lead offers like the freebies. Once you have them converted, you can continue to engage them with additional email campaigns or webinars to get them primed to buy.

Now, you can combine Dynamic Product Ads to target customers who have viewed specific site pages or products with custom event combinations.

Make rules for your custom audiences that will allow for an additional set of options. What was the dollar amount of their abandoned shopping cart, for instance? Did they select hundreds of dollars worth of goods? That might be warrant its own audience group.

During Thanksgiving, for example, Spearmint Love focused on users who had been to the website in the last two months, but hadn’t made a buy. They took the ads right from the product catalog, showing users what they had already look at on the website, and nudging them to make the purchase with Dynamic Product ads.

onesie facebook ad

And this level of granularity allowed Spearmint LOVE to generate a 14.2x return on their ad spend.

5. Focus on Retaining Old Clients Rather Than Getting New Ones

Shari ran her Spearmint LOVE blog for three years to successful results, building the brand, and building her customers — before expanding into all of these multiple channels.

This blogging background also allowed Shair to connect with wholesalers and distributors to expand Spearmint’s inventory and product.

She used her photography skills to create high-quality pictures featuring her product and drawing in nearly half a million followers. Because she had been the voice behind the brand for so long, she was able to connect with customers in a way that matched what they were looking for.

“I sell a feeling in a photo –– and make it easy for every customer to make that photo her family reality,” Shari said. “I put up a photo of not just a shirt or shoes, but of an entire outfit. And moms will come back to the site and buy everything in that picture.”

Ok. Cool. But why is any of this soft, intangible crap worth mentioning?!

Because your existing customers — not your new ones — are the most profitable.

John put his previous financial expertise to good use by creating a vintage analysis of Spearmint’s customers to help the company identify any trends or potential success of additions to the brand. Spearmint uses this to evaluate their customers’ lifetime values in a fancy table like this:

cohort for ecommerce store

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The end goal is a cohort analysis, where they’re essentially:

  1. Tracking each customer using their order ID.
  2. Then separating them into groups, or cohorts, based on the month of their first purchase.
  3. From there, analyze how each cohort acts over time (i.e. What are the patterns of when they made their first purchase, and then their next purchase?).

“We know on average our typical customer will convert again in X months,” John said. “We can predict when that next order might be and we can time our marketing based upon those types of insights.”

You can use this information to target each cohort based on their buying habits and timelines. For Spearmint, this looks like a personalized shopping experience through “custom windows” that adapt based on the different behaviors of moms as they go through the stages of pregnancy through birth and beyond (see point #3 above).

  • Window 1 is the period of time that includes six months before the baby is born until six months after.
  • Then, Window 2 is for when the baby is 6-18 months old. Spending for moms remains high in this window, but not as high as in Window 1.
  • Window 3 captures 18-30 months, and
  • Window 4 is anything beyond 30 months. Each of these windows, or cohorts, gets their own engagement, ads, and interactions to match their interests at that time.

This is important because even a (relatively minor) customer retention rate bump of just 5%, you can increase your profits by 25% to 95%.

By shifting focus to current customers by just a teeny bit, you’re finding a bigger payoff long term. (Which then allows you to spend less on new customer acquisition as well.)

What’s more, online companies have to spend even more (20-40%) than brick and mortar stores. What’s that mean for online stores? They have to keep a customer around for longer just to get back their original ad spend.

Image Source

For Spearmint, this means they focus on keeping ad spend as low as possible.

“If you’re selling things at 25% margins, you’re going to need a higher return to make that make sense,” John said. “For us, we’re looking at ad spends where we’re getting at least $ 5 of revenue or more, preferably closer to the $ 10 mark for every dollar of ads spent.”

They put to use all of those tips we talked about: targeting, custom audiences, etc, and then they recoup their money spent on the ad buy.

Conclusion

It’s not every day a mommy blogger can turn her site into a business and find 991% YoY growth. In 2015, sales stood at $ 150,000. In 2016, that number skyrocketed to $ 1.5M.

Combining clever distribution (i.e. multiple channels) and capitalizing on social media engagement helped Spearmint LOVE to grow (its already sizable customer base) 38% YoY conversion.

Then with uber-targeted ads and custom audiences to meet the evolving needs of their customers, they pull in 94% of their total sales from Facebook and Instagram alone.

They say that necessity is the mother of invention.

Years ago, before all of this, Shari Lott was a mother then in need a blanket. And she just so happened to have found a booming company in the process.

About the Author: Brad Smith is the founder of Codeless, a B2B content creation company. Frequent contributor to Kissmetrics, Unbounce, WordStream, AdEspresso, Search Engine Journal, Autopilot, and more.


The Kissmetrics Marketing Blog

Activity Report: Drill Down to See What is Actually Happening With Your Site or Product

A part of using analytics is knowing what user behavior is driving what action. Most tools only give you surface-level data. For example, you’re aware that signups decreased last week, but you won’t know which segments are behind any trends in your KPIs. And that makes it pretty useless.

Activity Report is our approach to solving this. With this report, you’ll look at specific events (say, user signups) over a period of time (week, month, etc) and then drill down to see what’s driving the trends. This helps you understand the “why” behind any meaningful trends.

Let’s see how this report works.

Product Marketers: See Which User Segments Are Driving Product Adoption

As product marketers, we’ll want to make sure our users are using product features, new and old, and staying engaged with the product. We can track this engagement and what’s driving it in the Activity Report.

You can set up an event to trigger anytime someone users a feature in your product. For simplicity in this post, we’ll have an event that triggers when someone uses feature “A”. We’ll set the date range to the last 30 days.

product adoption graph

793 people have used the feature in the last 30 days. We see our usual dips that occur during the weekends, but quickly recover on Mondays.

To see who is using this feature, we’ll drill down by selecting account status. This will show us how many are current, paying users and how many are trial users.

segmentation first level activity report

This shows us very clearly that the bulk of people using this feature are paying users. Our trial users are significantly fewer, and they use it less times than our paying users. Our free users have low engagement, about 2 times per person, far fewer than the 18 and 25 we have for paying and trial users.

Let’s look at the plan tier for our paying users. This will help us answer the question – are our enterprise users using the app more? Or is it the small or medium users?

account status propertyproperty values table in kissmetrics activity report

This shows us that users on the medium plan type are the ones who are, by far, using this feature the most. They’re driving the engagement, or lack thereof, of the feature.

So now that we know this, what’s the next step? What can we do with this information?

We know the user behavior – our enterprise and small customers aren’t engaging with this feature as much as we’d like. Wouldn’t it be nice to send an email to these users to get them familiar with the feature and to give it a try?

Good news – we can do this quite easily. And we won’t have to leave Kissmetrics to do it.

With Kissmetrics Campaigns, we can send email messages to anyone in our user base. We’ll simply set the criteria for the users in the small and enterprise plan who haven’t used the feature and send them a message giving the background on this feature and the primary benefits.

Marketers: Understand What’s Influencing Signups

You sit down on Friday afternoon to write your weekly report, and pull up the Activity Report to see that signups have been plummeting all week.

We went from 36 signups on Sunday down to just 7 on Thursday.

What’s causing this drop? Let’s drill down to see.

We’ve been running a lot of ad campaigns lately, so let’s split these signups by marketing channel : origin. This will show us the original marketing channel they come from (ie organic, paid, social, etc) and then origin will display the referring URL or the Campaign Name that was used in the UTM parameter.

channel origin kissmetrics

Here’s where our customers are coming from:

where customers are channels

To visualize this data, we’ll scroll up to the graph:

visualization activity report graph

We can see what’s driving the slump in signups. The blue line, representing our adwords traffic, is almost perfectly correlated with our drop in signups for all channels. Now we know the channel that’s causing the drop, but to investigate further, let’s drill down into our adwords channel to see what ads are specifically leading the drop.

We’ll select the UTM Campaign Terms to see which ad group is responsible for the drop.

And we have our answer. Adwords-group-3 is the primary driver of the poor performance. We’ll have to turn this ad group and create new ads that convert better.

So to recap – we saw our signups plummet in one week, we drilled down by the marketing channel, and the origin. We saw that AdWords was responsible for the drop, but because we have multiple ad groups we didn’t know which segment was responsible. So we drilled another level down into Campaign Terms and got our answer. And we did this all with a single report, and we got the insight in a couple minutes.

Growth Teams: See Which Segments Are Outperforming and Underperforming in A/B Tests

Growth teams rely on constant experimentation and learning to drive growth for their companies.

What we’ll do here is look at a conversion event, signed up, then drill down into which a/b test they were in, then see what referrer they originated from.

So we’ll select our event, signed up and see how it’s performed over the last 30 days:

activity report metric 30 days

Looks like it’s holding steady. Now let’s drill down to our recent a/b test and view the variants in this group:

activity report and ab tests

Wow – it looks like variant group 1 received significantly more signups than original and the people that weren’t in the a/b test. Let’s look further at our winning variation by seeing who referred them to our site:

activity report km referrer drill down

We have 70 different referrers, but let’s focus on the top 3.

Looks like our social media mentions and views on Hacker News and Inbound received the most views and brought the targeted traffic that ended up converting to signing up.

What can we learn from this? Our traffic coming from these sources is targeted towards the right audience that is interested in our product. We should to get more traffic coming from these channels.

While we can’t advertise on Hacker News or Inbound, we can on Facebook and other places where our audience frequently visits. To get on Hacker News, Inbound, and other places we’ll have to release features that capture that audience’s attention or write influential, thought-provoking pieces that are worth sharing. Easier said than done, but now we know what brings qualified traffic.

Video Demo

More of a video person? We’ve created this short video demo that explains Activity Report in under 2 minutes.

 

Conclusion

Often times in analytics you’ll need to drill down to see exactly what’s driving what. That’s what Activity Report does. Pick a KPI, and drill down to see what’s driving the growth or contraction. Request a demo to see how it will work for your company.


The Kissmetrics Marketing Blog

Here Are 6 Arguments That Will Get Your Boss to Double Your CRO Budget

It might come as a surprise to you, but not everyone is completely sold on conversion rate optimization.

Let’s say you want to double your CRO budget.

Shinier tools. More data. Expert analysts.

These things will improve your CRO efforts.

Aaaaaand…they cost money.

So you have to convince your boss to shell out more money on something that she doesn’t know much about.

That’s not easy.

It’s not because your boss is a bad person. She’s smart, capable, intelligent, and wise.

But you’re the one who’s on the front lines of this CRO deal. You know how much value you could derive from better data, more team members, or more expensive tools.

How do you convince your boss to double, or hey why not even triple, your CRO budget?

I’m convinced that it’s possible.

Assuming that your boss is an intelligent human being, you can make a strong case for a CRO budget increase.

And you probably won’t have to fake tears to do it.

1. Understand Where They’re Coming From

One of the most successful forms of argument is simply understanding.

You want to find out where your boss is coming from.

Why might he not want to increase your CRO budget?

Hint: It wouldn’t hurt to ask.

Understanding the why behind leadership’s opposition does two things:

  1. It softens them to accepting and understanding your position.
  2. It conveys the basis of their opposition, which allows you to respond with the right arguments.

In my experience, there are two main types of opposition to CRO.

  • First, your boss may be opposed to increasing your CRO budget because of ignorance.
  • Second, your boss may be opposed to increasing your CRO budget because of some ingrained subjective opposition.

I’ll deal with both of these in order.

First, your boss may be ignorant regarding conversion rate optimization.

I mean nothing unkind at all by this remark.

They aren’t necessarily opposed to conversion rate optimization, they just don’t fully understand it.

Therefore you’re going to be hard pressed to get them to double down on investments in your strategy.

If your boss remarks, “We just don’t have the budget right now,” it may convey a lack of understanding regarding how CRO works, what it does, and why it’s a logical investment.

What should you do?

I’ll give details in the points below, but basically, you want to show off the current methods used for improving conversion, how effective they are, and take the time to explain your strategy for more improvement.

most used methods marketers use to increase conversions
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What about the second type of opposition?

If you’re trying to get a budget increase and you’re facing off with subjective opposition, then you may need to settle for a stall.

Changing someone’s mind can be a difficult task, even if you have initial buy in on CRO.

The opposition could stem from a variety of things; ego, prior results (or lack thereof), and even emotion.

It’s downright impossible to turn someone’s opinion when it’s emotional – for whatever reasons – but the following arguments can help you win leadership that is resistant to a larger CRO budget.

2. Show Them What the Competition is Doing

“The growth we have is sufficient” can be a frustrating statement from leadership when you’re trying to grow your optimization efforts.

When leadership feels comfortable in the current position, they can see little reason to change.

Change, in a business context, usually requires more work, which in effect costs money.

Even promises of improved revenue might not be enough.

Why not? Because growth takes time. (And time is money.)

In the hustle of daily business, decision makers are sprinting for short-term quarterly gains.

The wispy hope of a small uptick in the next six months isn’t going to cause them to spring into action.

What will get them to jump?

Telling them what the competition is up to.

This is a good time to let them know that someone else is doing it, and doing it better.

It might be the one reason that influences leadership to make a change.

Perform a competitive analysis, using tools that can reveal the types of apps or services other companies may be investing in.

Most companies don’t have a line item for “conversion rate optimization.”

most companies don't set a budget for CRO

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Besides, your competitor isn’t going to tell you even if they do.

However, platforms like BuiltWith and Datanyze can reveal telltale signs that reveal how much your competitors are spending on conversion optimization.

The more investments the competition has across their domains, the more involved they are with optimization, and the bigger your company’s push should be to avoid being left behind.

Consider also that many organizations don’t even have a budget for CRO. Push for an increase in your budget by highlighting how much you can overtake the market with continued focus in conversion optimization.

If you don’t think they’ll be moved by competitors, then do a similar analysis of companies your leadership team closely monitors or respects. When they see a friendly organization making larger investments, it could move them to take action.

3. Explain the Importance of Improving User Experience

Customer retention is typically a focus of any organization, so turning the conversation in that direction can be a smart move.

This is especially true if leadership is opposed to a budget shift because funds are being put into customer acquisition or retention programs.

Show them how CRO is all about improving the user experience.

The whole principle of conversion optimization is to make the buy-in process easier for a prospective customer.

You’re improving design elements and adjusting steps to make for a more pleasing and straightforward experience.

When you improve the user experience to boost conversions, the company meets other customer-related goals.

Instead of focusing on a budget boost for your specific department or role, you’re showing a broader business-wide impact.

Here are some of the other benefits of CRO expenditure.

  • Cost reduction – By streamlining the conversion process, there are fewer support requests. This load reduction on support staff brings down overhead costs.
  • Greater exposure – When you create an enjoyable experience for the customer, they’ll share that experience with their friends and family. Basic word-of-mouth marketing improves your exposure and brand visibility.
  • Improved acquisition – A greater investment in CRO means improved conversions, which translates to improved customer acquisition. You see an increase in revenue, new customers, and likely a reduced customer acquisition cost.

The impact on your user experience can be measured through reductions in customer churn as well as with a net promoter score.

Monitor those metrics before and after campaigns for an easy way to sell greater investments in your CRO budget.

4. Show Them Fresh Opportunities in Your Existing Strategy

Leadership is ultimately going to question the need for an expanded budget.

Just showing off current success may not be enough.

When they ask you “why”, be prepared to showcase the areas where conversion optimization has not been implemented.

Remember that they’ve already bought into CRO, and you can use areas where no improvements have been made to show off the contrast of your current campaign successes.

return on conversion rate optimization

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For example; if you’ve been able to boost the conversion of landing pages for specific PPC campaigns with great success, but the vast database of products has not yet been adjusted, this can be shown as a huge opportunity for improvement.

Come ready with a complete list of opportunities and draw the attention of leadership to these gaps in your growth.

By documenting the process, you can present a plan that prioritizes improvements, forecasts outcomes, and projects returns based on successes you’ve already had.

Be sure to focus on revenue gain, not just improved conversion percentages. Percentage increases look good, but when making a presentation using a graphic like the one below it’s not easy to equate a “win” with revenue figure.

ab tests need revenue wins
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5. Present Them With the Revenue Gains

In many cases, companies throw a substantial portion of their marketing budget at customer acquisition through methods like social, PPC, events, or traditional media purchases.

It’s difficult to guarantee or count on a return from those channels because you’re not in complete control of numerous factors.

With conversion optimization, however, you’re working directly on something you have complete control over.

Remind leadership that investing in CRO gives you the ability to spend more time working on tasks that improve the revenue from the current traffic already coming to your website.

page variations revenue gains

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You have control over your site, so it’s simply a matter of expanding your efforts to convert people who are already, to some extent at least, prepared to do business with you.

This is the time to show off how even a small change in conversion rates equates to substantial revenue gain.

Take the revenue increase from previous campaigns you’ve run, and stack them up against case studies from other organizations.

Supplement that with financial projections for the campaigns you want to run, with potential revenue lifts as a result of expanding the CRO budget.

6. Just Give Them Data

One of the best ways to get initial buy in from resistant leadership is to simply run a test and show the results.

Obviously, you want to make sure that the results are positive.

Most sane business decision makers act in response to data.

No data is more convincing than that which shows an increase in actual revenue or other critical KPIs.

So if you can run a test, and show results like this, then you’re in good standing.

ab tests percentage increases

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Tommy Walker, former editor ConversionXL, talks about this in one of his posts as he shares input from Angie Schottmuller.

“I’ve found the best way to introduce the CRO concept, is simply to remove subjectivity by proposing, “let’s test it!”

Most individuals support that approach and are intrigued by leveraging data to drive decisions. Tests with interesting results quickly get management attention, and an addictive demand for more testing invariably follows.”

This is one of the most straightforward counterarguments that can be used for getting a boost to your CRO budget.

State it clearly: “This is what we’ve done so far. These are the results.”

No whining, wheedling, pleading, or tears required.

You should be able to provide proof that your efforts are worth the investment. And with a larger investment you can tackle more campaigns to see even better results.

Conclusion

When you present your arguments for increasing your budget, you won’t always get what you’re asking for. With CRO you take what you can get and work with it.

Start small with the budget you have and keeping racking up small wins.

That’s the great thing about CRO.

It’s one of the best and most straightforward ways to increase revenue without a massive outlay of funds.

In time, those wins will stack, and decision makers in your organization will be more likely to get excited at the idea of more testing and implementation to improve conversions.


The Kissmetrics Marketing Blog

11 Customer-Centric Ways to Grow Your Ecommerce Revenue

There are three general ways to grow revenue in any ecommerce business:

  1. Increase the total number of customers.
  2. Increase the average number of times each customer buys from you.
  3. Increase the average order value (AOV) from each customer.

As ecommerce marketers, knowing what to prioritize can be the difference between a standard year of growth and a phenomenal one. So, what should be your next move?

Take another look above at the overall ways to grow revenue and you may notice each has a common thread: the customer. It can be a game-changer if you start with what your buyers want (and perhaps more importantly don’t want) and let them be your guiding light for everything you do in your marketing.

In 2011, Jeff Bezos said, “If you’re truly obsessed about your customers, it will cover a lot of your other mistakes.”

Learn 11 specific ways to implement more customer-centric marketing that can lead to more revenue for your store. These are categorized in ways to grow:

  1. New Customers

  2. Product Feeds

  3. Dynamic Retargeting on Facebook

  4. Content Marketing

  5. Repeat Customers

  6. Psychographic Segmentation

  7. Automated Email

  8. Targeted Promo Emails

  9. Conversion Rate

  10. Customized Checkout

  11. Chatbot Conversion Optimization

  12. Non-Boring Product Descriptions

  13. Authentic Reviews

  14. Amazing Customer Service

New Customers

1. Product Feeds

Selling on Google Shopping is a great way to market your products in a customer-centric way. Product images, pricing, reviews and brand name are all displayed in Google so that shoppers no longer need to click through to see all of that critical information.

Image Source

It works a lot like traditional Google pay-per-click campaigns. It’s set up by connecting your store’s product feed to Google Merchant Center, which then feeds into your AdWords account. Once you successfully start displaying Product Listing Ads, it is easy to begin grouping your store’s products into ad groups in AdWords.

shoes results google shopping

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Note: Typically once you have 150 or more store reviews within the last 12 months, review star ratings will display in Google Shopping.

Saving your customers time is unlikely to go out of style any time soon. Nobody ever said, “I want a great deal, but I’d first like to blindly visit 10 different stores.” By marketing on Google Shopping, you provide your future customers with a better experience.

Additionally, it is easy to connect your store’s product catalog to Facebook’s Business Manager. Uploading your product feed to advertise in a customer-centric way on Facebook (displaying product images, descriptions, price and other information) works especially well for the next section.

2. Dynamic Retargeting on Facebook

Research from 2017 shows the global conversion rate from a visitor, to add to cart is just under 3%.

us and uk conversion rates

Not everyone who adds products to their cart will complete the purchase. So for the more than 97% of people who didn’t purchase, you’ll want to make it as easy as possible for them to return and buy.

Dynamic retargeting with Facebook works well for this because it combines an image of the exact product your visitor added to cart/viewed, with info-like descriptions, pricing of that particular product and the custom copy you add. Beautiful! Your shopper only sees exactly what they were interested in plus any sort of offer text.

Facebook shopping ads

Setup for Facebook dynamic retargeting is pretty easy. First, create a product catalog in FB by hooking up your product feed. Next you’ll need to add a few events found in the Ads Manager for your store to successfully pass the product information to Facebook that corresponds with each user, which may require some dev work depending on how savvy you are with your code. Once you’ve got the events firing properly, the last step is to set up your first dynamic retargeting campaign and ad. In no time, you’ll be remarketing in a customer-centric way to your visitors who have yet to convert.

3. Content Marketing

Now that we’ve covered a couple of buyer-focused ways to advertise, it is important to note the vast majority of shoppers looking for products on Google and other search engines will bypass paid listings altogether. According to the Similar Web Search Report, it’s not even close when you examine paid vs. organic (on desktop only). The non-paid search results get 18 times more traffic.

organic search 18 times more than paid

People trust Google and other search engines to rank the best natural results, so give search engines reasons why you deserve to outrank your competition. Several factors go into SEO for ecommerce, but content marketing is arguably the most customer-centric way to improve search engine rankings.

Helping the customer is the name of the game with content. All things being equal, whoever helps users in the most valuable way, ranks the highest.

For example, campers search the phrase “how to build a campfire,” or something similar, every month. A big reason why REI ranks #1 in Google for the term is because they answered the question in the most helpful and thorough way.

rei campfire article

This well-written article dominates the competition. It has over a thousand words describing every step of the campfire building process. It’s also supported by several great images and a video. REI has created an entire ‘Expert Advice’ section of the site dedicated to answering questions and solving problems pertaining to anything they sell.

Are there common problems and questions your potential buyers have? Listen to what your customer base says and use AnswerThePublic.com to find out other ideas to help. Search Google to find out what questions pertaining to your industry could be answered in a much better way than they currently are. To give your store a good shot at outranking the “partial helpers,” you want your content to be 10 or more times better than the best results for the topic.

Repeat Customers

4. Psychographic Segmentation

Demographic information of your buyers, like age or gender, can be useful in many cases. Knowing where they live and tracking their behavior is important as well. But these will only tell you part of what you need to know. Psychographics, however, include the goals, emotions, values, hobbies and habits that help drive purchase decisions, which helps us understand our customer’s why.

market segmentation factors

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Psychographic segmentation is crucial for marketing in a customer-centric way. If we better understand the “why” of a particular buyer segment, the likelihood of positively influencing a group’s reason to buy goes way up! Learn as much as you can in order to deliver more details and serve customers even better.

5. Automated Email

Automation is an excellent way to keep your team or business lean, but still provide a personalized experience for your customers based on their actions.

This example from the marketing automation campaign builder inside Infusionsoft shows how an Ecommerce business can treat customers differently each time they buy from the company.

marketing automation map

In this example, each sequence pushes the customer toward making another purchase. Inside the “new customer welcome, shipped” sequence (pictured below), a series of emails thanks the customer for “joining the family” and offers them a coupon code as gratitude:

drip campaign message thread

In addition to incentivizing repeat purchases, these emails can be created in plaintext, meaning it looks to the end customer like a customer service rep sat down and wrote them a personal email. This can have a huge impact on the user experience of your site, and turn people into raving fans of your brand.

6. Targeted Promo Emails

Email is an effective (and cheap!) way to market to your existing customer base. So how do you stand out in your buyer’s inbox amidst the swarm of the rest of the world’s offers?

Focus on customer experience. A big reason why Chewy.com does well with promotional emails is because they’re laser-focused. For example, cat owners only see offers for cat products.

chewy triggered email message

You won’t see any dog food offers unless you make a dog food purchase. Better yet, these cat product offers are based on prior purchase behavior. So the brands and types are all familiar.

Quickly blasting your email list with offers may generate an uptick in conversions. However, if your product set is diverse, it will likely be worthwhile to spend the extra time to deliver deals that line up with exactly what matches your customer’s interest.

Conversion Rate

7. Customized Checkout

Nobody ever said, “I just wish this checkout took a little longer.” Easy and as quick as possible, especially in the world of online shopping, will never go out of style.

Standard checkout layouts created by the top ecommerce platforms have improved over the years, but the conversion rates you can expect from them are…. well, standard. Below is an example of a default checkout page layout with BigCommerce:

checkout example flow

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Basic stuff. The good news is this page can be modified to be a lot more customer-focused with some dev work.

After studying videos of real-life customers using the default checkout, the Ecommerce Crew put together an eight-step checkout page customization checklist, which soon yielded the following customized layout:

single page checkout

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The results were immediate. Modifying the page to make the process smoother, less time consuming and more trustworthy for users translated into a 30% lift in conversion rate.

8. Chatbot Conversion Optimization

One huge way to increase your conversion rate is to add a chat function to your store’s website. This gives users a way to interact with you and ask questions about what they need. In turn, it gives you an opportunity to drive them exactly where you want them to go.

Don’t have the time or the staff to sit around manning your website’s chat feature? Automate it with a chatbot. Here’s an example:

chatbot setup

Based on common customer inquiries, you can build different conversation paths for people to self-select their way through. Each ends at the critical stage of collecting the lead without the use of standard forms.

This will not only dramatically increase the conversion rate of the visitors to your site, but it has the added benefit of answering frequently asked questions for your customers, meaning you can outsource at least some of your customer service, while being more helpful to visitors than your competitors who don’t have this capability.

9. Non-Boring Product Descriptions

Product copy, when done well, is proven to sell. But what if your competitors also provide users with robust product descriptions featuring a comprehensive list of features and benefits in an easy-to-read format?

So Worth Living changes the game to stand out by injecting personality into their product descriptions that they know their buyers will enjoy and appreciate:

good product copy

Being helpful doesn’t mean being boring. Get to know your buyers better than your competition. Find ways to entertain them in product descriptions, while informing them about all the features and benefits.

10. Authentic Reviews

Back in the early days of Amazon, when the ecommerce mammoth was a book store only, the company’s employees were writing the majority of the reviews. Jeff Bezos had instructed his team to leave 100% genuine reviews. Naturally, their honesty translated into negative ratings on some books.

good amazon review of book

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Publishers got ticked off with what Amazon was doing and one told Bezos his job was to “sell books, not trash them.” Bezos didn’t waver.

How did he know Amazon was doing the right thing? Authentic reviews can seem counter-intuitive when they are bad. But they’re truly in the best interest of the customer, and therefore the right move. Helping your visitors make the right buying decisions with reviews (good, bad and ugly) puts your customer’s interests first and foremost.

11. Amazing Customer Service

Customer service is perhaps the lowest of the low-hanging fruit. In today’s world, treating people like they’re real human beings, and showing them empathy, has the power to make you stand out from the crowd in a big way.

A strategy we use frequently is every time someone has a bad experience, we give them a $ 5 gift card. This does more than reduce people’s angst. It turns a negative experience into an overwhelmingly positive one. Sure, this may slightly reduce the margin you make on their next purchase. But if it brings someone back a second, third, or fourth time, it’s worth the $ 5 all day long. Here’s a real response from June 20th as an example:

coupon code turns happy customer

Treat your customers well, and they will reciprocate.

Conclusion

Successful ecommerce marketing takes into account several factors to grow significantly. Use the customer as your north star and test, test, test to find out what works best for you.

What customer-centric ways are you using to grow your store’s revenue in 2017? Comment below and let me know.

About the Author: Ethan DeYoung is the co-founder of Wild West Pool Supplies, a company that aims to help people enjoy more time in their pool or spa. Connect with him on LinkedIn.


The Kissmetrics Marketing Blog

How to Use the New Lifetime Value Feature in Google Analytics

You’re drowning in data.

You’ve got enough KPIs to track and report on already.

Why would you possibly need another one? What good would come of adding yet another hour to the end of you’re already long work day in order to dig it up?

The truth, in this case, is that you can’t afford not to.

Lifetime Value isn’t just another vanity metric. It’s THE metric. The one that stands head and shoulders above all others.

IF there was one and only one metric you were tracking, this should be it.

And now you can do it simply and easily inside Google Analytics. Here’s how.

What is Lifetime Value (And Why Does it Matter?)

Metrics often lead you astray.

Take Cost Per Click.

They range wildly from industry to industry. $ 2 bucks in one industry, but $ 50 bucks in another.

Crazy, right? Surely that $ 50 is just “too expensive.”

Not necessarily, obviously.

The first easy answer is your break-even point. If your Cost Per Acquisition is less than your initial average order value, you’re golden.

But sometimes, in some cases, you actually want to willingly lose money initially.

amazon revenue net income overtime

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Ever heard of Netflix? How about Amazon?

Amazon routinely enters a new market with razor thin (or even negative) profit margins so they can grab market share. Only to then turn the dial back once they’ve gained a market leadership position.

amazon revenue from retail and web services

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So what’s a reasonable Cost Per Click in that scenario? Now it depends.

This can even change from company to company within a vertical (and their appetite for risk).

Let’s talk insurance.

Two ways to make money:

  1. Upfront commission when you close a sale
  2. Ongoing residual payments over the life of each deal.

So you’ve got a new company. Entering a new market and trying to expand.

Would you willingly, purposefully sacrifice #1 in order to scale #2?

Of course you would.

Why? Because the lifetime value of a customer.

The full potential value of each new client you add will eclipse the initial commision. So as long as you can stomach the negative cash flow for a bit, you’d probably be willing to drive that Cost Per Click as high as humanely possible.

You go all in, when the stakes are right, and drive everyone else out.

All of this sounds perfect, except for one teeny, tiny detail.

Does your company track lifetime value? ‘Cause most don’t.

I’ve personally worked with dozens (hundreds?) of clients over the past few years and I can count on one hand the number who were actually tracking conversions properly. Let alone seeing anything past the first purchase.

One of the reasons is because tracking this info, with current systems, isn’t always easy. It might be easy if you’re using a Shopify and do all sales in a single channel or two. That way, everything happens inside one platform.

But usually your business is spread out. Each department has their own independent systems. So it’s tough to bring everything together.

Thankfully, Google Analytics has been hard at work recently.

Their new Lifetime Value report helps business owners acquire data to understand how valuable certain users/customers are to their business based on their lifetime performance.

And best of all, it pulls together lifetime values for people acquired through different channels and mediums, like social, email, and paid search. You’ll also be able to view data by engagement (pageviews, goals, events) and then trends (like 90 days after customer acquisition).

Using this will help you determine which sources are driving the most valuable traffic and which corresponding marketing investments are truly delivering an ROI.

Here’s how to run a lifetime value report inside Google Analytics.

How to Run a Lifetime Value Report

Start by signing into your Google Analytics account and then follow these simple steps:

    Step 1: Click on Reports Section
    Step 2: Click on Audience
    Step 3: Click on Lifetime Value

find lifetime value in google analytics

Note: The Lifetime Value feature should already be available inside your GA account (no need to change your code!).

Now let’s get started generating a report. Here’s how to setup your graph first:

setting up lifetime value in google analytics

Start by setting your acquisition date range (the option on the far right). Any customer acquired during this date range (May 2017 on this example) will be included in the LTV report.

Let’s say you ran a promotional campaign or online sale during the month of May, you can easily analyze the data for these customers and segment by date based on your campaigns.

For steps two and three, you can select the following list of metrics to compare:

lifetime value metrics comparison

Now let’s break this graph down a bit to help you understand what the heck is going on:

lifetime value google analytics

Essentially, this graph is showing site users acquired during the month of May, and how their lifetime value changes based on the page views and session duration metrics over a 90-day period on the site.

These are obviously engagement metrics, you can customize this even further to track the exact amount spent if you have eCommerce tracking enabled.

Now, let’s jump to the table below:

acquisition channel google analytics

Now we’re able to compare the number of acquired users (and the Pageviews per User) in this case by acquisition channel.

Click on the dropdown above the table to pull up different granular sorting options like Source, Medium, or Campaign.

acquisition channels in google analytics lifetime value

How is this helpful? Check it out:

google analytics channels attribution

Let me break it down:

  • Blue: Acquisition channel. This shows what channel the users were acquired through, i.e, direct, organic, social, referral.
  • Pink: Users. The amount of users in the specified acquisition date range (May 2017 in this example)
  • Purple: Your selected lifetime value metric. In this example, pageviews per user is the LTV. This column is where the data begins to get interesting.

Let’s zoom in on the last column in detail to see if there’s any insight we can already glean from these reports.

pageviews lifetime value

Now we start to notice patterns among the different channels. For example, Referral traffic has double the pageviews per user (LTV) than almost every other channel. While Organic pageviews per user (LTV) is beginning to fall behind.

Want to pull back the curtain even more? Like being able to see things what individual Referral sites are driving higher LTV’s?

Head back over to the “Acquisition Source” on your table. Now we can break down which individual websites are sending us the most valuable traffic (based on LTV). And the winner is…

lifetime value acquisition source example

Kissmetrics! What, what! ?

Here’s why this new insight important.

Data Lies. LTV Forces it to Tell the Truth

Data lies to you daily.

For example, pull up your Goals inside Google Analytics to conduct a similar analysis to the one we just did.

You can even view the Reverse Funnel Path to see which pages, posts, or campaigns delivered the most conversions. This report is helpful… to a point. If you understand its limitations.

For example:

? Problem #1. These could be subscribers or leads. Not solid purchases. So you’re basing hard decisions off of ‘top of funnel’ data.

One campaign or channel might send 100 subscribers while the other only sends 20. But none of this takes into account how many of those people are converting. Or even how much money each is spending.

? Problem #2. Oh, these are sales, you say? Ok.

Except for one thing: You can’t tell if they’re one-off or repeat. So you can’t tell if each customer is a $ 100 order or a $ 1,000 one.

Which is kinda important when you’re looking backwards to see how that content investment performed vs. the paid campaign.

? Problem #3. A/B tests lie, too.

Things start off great. That new button resulted in a big conversion rate leap.

The only problem is that these small, temporary fluctuates often regress back to the mean. Larry Kim likened it to “moving desk chairs around the Titanic.”

ab testing reverts to mean

Image Source

There might only be a literal surface level change, without ever fundamentally improving the organization as a whole.

When does this commonly happen? When you over-optimize.

? Problem #4. Over-optimization.

A/B tests that increase top line metrics often backfire.

For example, another study from Larry Kim showed that for every increase you made in a conversion rate, the lower your rate of Marketing Qualified Leads.

landing page vs mqls
Image Source

In other words, the more aggressive you at are collecting that initial opt-in or lead can often lower the overall quality of the leads that are getting in. Which doesn’t make a whole lot of sense in the grand scheme of things when you think about it.

The point is that there are many, many ways data often lies to us. We think we’re seeing the whole picture, when in reality, it’s only a tiny slice of it.

Conclusion

Metrics aren’t always they appear. And data often lies.

What’s an “expensive” Cost Per Click for one business, isn’t for another. And sometimes that overall conversion rate we’re looking at to base our decisions around is fraught with peril in reality.

The one savior is Lifetime Value.

It gives us a broader, big picture context when viewing other bits of information. It helps us put things into proper context.

So we can not only make better decisions to drive additional revenue. But also realize when we’re about to make a few costly mistakes.

About the Author: Brad Smith is the founder of Codeless, a B2B content creation company. Frequent contributor to Kissmetrics, Unbounce, WordStream, AdEspresso, Search Engine Journal, Autopilot, and more.


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