04 Jan Segmentation of Holiday Customers and Key KPIs
You survived the holidays and you’ve got new customers! Now what? In our November blog on customer segmentation, we talked about the value in grouping your customers by separate criteria to streamline customer service and to identify who your real customers are. The holidays bring an opportunity with an influx of new customers. To make the most of these new relationships use segmentation of holiday customers to your advantage.
Track Holiday Customer Data Separately
Your long-term customer base is your brand’s lifeblood, and their data is important to get clear. Identify your new holiday customers and separate them from your main customer base. This prevents their data from muddying your regular customer data. It also gives you insight into what worked and what didn’t this holiday.
From a customer service perspective, use surveys to find out what brought your holiday customers to you, but use them wisely. Engage smart surveys that are brief and targeted showing you value customers and their time.
Track the sales that were most successful, what links were clicked most and on which channel(s) like website, email, your brand’s social outlets or ads on outside content. Also track links that were shared that brought new customers to you.
You can plan to repeat similar sales, offers and emails next season to try to replicate that success. Then use this new segment for targeting to convert them to long-term buyers.
Average Order Value (AOV)
Track the AOV of this segment and specifics of the orders. Identify which new customers bought multiple products in one order versus those who bought a single product. Also track which orders had the highest value and whether they were single products or multiple product orders. This gives insight into your new customers’ buying habits.
Further segment the repeat buyers and high AOV purchasers. After the holiday season, track which customers came back to you for more products, particularly high cost ones.
Return on Investment (ROI)
Knowing which platforms brought what part of your add-on holiday revenue is helpful when analyzed against the costs incurred on each platform, overall return on investment (ROI) and comparison against your annual recurring revenue (ARR). Advertising, website design, customer service coverage for each platform, etc. all costs need to be counted separately and together. Then compare to profit per platform, per campaign, per segment and overall profit.
ROI* = net profit – costs
*For percentage multiply the result of the above equation by 100.
As you know, it’s important to measure your CX metrics for customer service ROI too. Average wait time (AWT), average handle time (AHT), Net Promoter Score℠ (NPS®), customer satisfaction (CSAT) are some of the metrics to track to identify what is or isn’t working to keep these new customers.
Customer Acquisition Cost (CAC)
Aka cost per acquisition (CPA), CAC = Cost/acquisitions. Take the overall cost for your holiday marketing, or by other sorting parameter (month or campaign, etc.) and divide by the number of new customers for that parameter. Those costs include all the salaries/hourly pay of those who created and executed the campaigns, along with the costs of keeping those positions filled.
This can be further drilled down to identify the highest value new customers and channels or campaigns. Identify what percentage of overall new customers brought in the highest percentage of add-on revenue and through which channel.
Well trained agents are a key component for reducing customer retention and acquisition costs. When a potential customer has an issue in making a purchase a skilled agent can mean the difference between a completed purchase and an abandoned cart.
Perhaps the holiday customer made a niche gift purchase. An agent well versed in the company product line is able to ask the right questions and assist the new customer in making the best gift purchase for their intended recipient.
Your digital channels like chat and social media are opportunities. Even if a chat begins with a bot it’s important for retention that a potential customer can escalate to a live agent when needed. This is especially true for gift buyers who need more information to make an informed purchase. An agent can help the buyer get the correct product, making the gift buyer a holiday hero while being one themselves.
Market to The Holiday Customer Segment Differently
You did something right to bring these new customers to you. Now do your best to keep them. Create marketing campaigns specific to this new audience . Your long standing customers may be well informed on your brand vibe, products and customer service. Your new ones aren’t. It’s like having a conversation with an acquaintance you just met versus a colleague you’ve known for years. The conversations are different because the trust level and knowledge level are different. Get to know your new holiday customers.
Someone who buys a product as a gift for someone else may not become a regular that purchases for themselves. However, they may become a repeat customer when they need to buy a gift again if your company gives them reason to by staying top of mind.
Your agents are part of this powerful marketing plan. Every touch they have with a customer is an opportunity to further sell them on your company, not just your products, by providing great customer experience.
Some customers are drawn by your sales, others by new products or clever, entertaining marketing and some by excellent service. Find out which of these your new customers respond more to and target your marketing for effectiveness.
Welcome to 2023! It’s good to get clear on how to maximize the increase in interest your brand experienced over the holiday season. Using segmentation of holiday customers wisely can help you turn these customers into long term fans improving multiple KPIs and building customer lifetime value (CLV).
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.