How to calculate customer lifetime value (CLV) for subscription ecommerce in Google Analytics
Many of Littledata's subscription customers come to us with a similar problem: how to calculate return on advertising spend, considering the varying customer lifetime value (CLV) of subscription signups. Calculating marketing ROI for subscription ecommerce is a big problem with a number of potential solutions, but even the initial problem is often misunderstood. In this post I break down what the problem is, and walk through two proven solutions for getting consistent, reliable CLV reporting in Google Analytics. What is customer lifetime value? I work with all kinds of subscription ecommerce businesses: beauty boxes, nutritional supplements, training courses and even sunglasses-by-the-month. All of them want to optimise customer acquisition costs. The common factor is they are all willing to pay way MORE than the value of the customers' first subscription payment... because they expect the customer to subscribe for many months. But for how many months exactly? That's the big question. Paying for a marketing campaign which bring trial customers who cancel after one payment - or worse, before the first payment - is very different from paying to attract sticky subscribers. A marketing director of a subscription business should be willing to pay WAY more to attract customers than stay 12 months than customers who only stay one month. 12 times more, to be precise. So how do we measure the different contribution of marketing campaigns to lifetime customer value? In Google Analytics you may be using ecommerce tracking to measure the first order value, but this misses the crucial detail of how long those shoppers will remain subscribers. With lifetime customer value segments we can make more efficient use of media, tailor adverts to different segments, find new customers with lookalike audiences and target loyalty campaigns. There are two ways for a marketing manager to see this data in Google Analytics: one is a more difficult, manual solution; the other is an easier, automated solution that ties recurring payments back to the original campaigns. A manual solution: segment orders and assign a lifetime value to each channel It's possible to see the required data in GA by manually segmenting orders and assigning a lifetime value to each channel. For this solution you'll need to join together: (a) the source of a sample of first orders from more than a year ago, by customer number or transaction ID and (b) the CLV of these customers The accuracy of the data set for A is limited by how your Google Analytics is set up: if your ecommerce marketing attribution is not accurate (e.g. using Shopify's out-the-box GA scripts) then any analysis is flawed. You can get B from your subscription billing solution, exporting a list of customer payments (and anonymising the name or email before you share the file internally). To link B to A, you'll need either to have the customer number or transaction ID of the first payment (if this is stored in Google Analytics). [subscribe] Then you can join the two data sets in Excel (using VLOOKUP or similar function), and average out the lifetime value by channel. Even though it's only a sample, if you have more than 100 customers in each major channel it should give you enough data to extrapolate from. Now you've got that CLV by channel, and assuming that is steady over time, you could import that back into Google Analytics by sending a custom event when a new customer subscribes with the 'event value' set as the lifetime value. The caveat is that CLV by channel will likely change over time, so you'll need to repeat the analysis every month. If you're looking to get away from manual solutions and excessive spreadsheets, read on... A better solution: tie recurring payments back to the original campaign(s) What if you could import the recurring payments into Google Analytics directly, as they are paid, so the CLV is constantly updated and can be segmented by campaign, country, device or any other standard GA dimension? This is what our Google Analytics connection for ReCharge does. Available for any store using Shopify as their ecommerce platform and ReCharge for recurring billing, the smart connection (integration) ties every recurring payment back to the campaigns in GA. Here's how the connector works The only drawback is that you'll need to wait a few months for enough customer purchase history (which feeds into CLV) to be gathered. We think it's worth the wait, as you then have accurate data going forward without needing to do any manual imports or exports. Then, if you also import your campaign costs automatically, you can do the Return on Investment (ROI) calculations directly in Google Analytics, using GA's new ROI Analysis report (under Conversions > Attribution), or in your favourite reporting tool. Do you have a unique way of tracking your marketing to maximise CLV? Are there other metrics you think are more important for subscription retailers? Littledata's connections are growing. We'll be launching integrations for other payment solutions later this year, so let us know if there's a particular one you'd like to see next.
How to audit your Web Analytics Ecommerce tracking
5 common Google Analytics setup problems
Can you rely on the data you are seeing in Google Analytics? If you use it daily in your business you should really give some time to auditing how the data is captured, and what glitches could be lurking unseen. The notifications feature in Google Analytics now alerts you to some common setup problems, but there are more simple ones you could check today. Here are 5 aspects of your Google Analytics account to check now. Are you running the latest Universal Analytics tracking code? Is your overall bounce rate below 10%? Are you getting referrals from your own website? Are you getting ‘referrals’ from your payment gateway? Have you got the correct website default URL set in GA? Are you getting full referring URL in reports? 1. Are you running the latest Universal Analytics tracking code? You may have clicked upgrade in the Google Analytics admin console, but have your developers successfully transferred over to the new tracker code? Use our handy tool to test for universal analytics (make sure you copy your URL as it appears in the browser bar). 2. Is your overall bounce rate below 10%? The 'bounce rate' is defined as sessions of only one page. It’s highly unlikely to be in single digits unless you have a very unique source of engaged traffic. However, it is possible that the tracking code is firing twice on a single page. This double counting would mean Google Analytics sees every single page view as two pages – i.e. not a bounce This is more common on template-driven sites like Wordpress or Joomla, where you may have one tracking script loaded by a plugin – and another pasted onto the main template page. You can check if you have multiple pageviews firing by using the Google Tag Assistant plugin for Chrome. 3. Are you getting referrals from your own website? A self-referral is traffic coming from your own domain – so if you are www.acme.com, then a self-referrals would be appearing as ‘acme.com’. Have a look at the (recently moved) referrals list and see if that is happening for you. This is usually caused by having pages on your website which are missing the GA tracking code, or have it misconfigured. You can see exactly which pages are causing the problem by clicking on your domain name in the list and seeing the referring path. If you are on universal analytics (please use our tool to check) you can exclude these referrals in one step with the Referral Exclusion list. For a fuller explanation, see the self-referral guide provided by Google. 4. Are you getting ‘referrals’ from your payment gateway? Similar to point 3: if you have a 3rd party payment service where customers enter their payment details, after they redirect to your site – if you are on Universal analytics – they will show up as a new visit… but originating from ‘paypal.com’ or ‘worldpay.com’. You need to add any payment gateway or similar 3rd party services to that referral exclusion list. Just add the domain name - so PayPal would be 'paypal.com' 5. Have you got the correct website default URL set in GA? When Google Analytics was first set up for your website you may have set a different domain name than what you now use. Or maybe you have switched to run your site on https:// rather than http://. So you need to change the default URL as set up in the admin page. For this go to Admin > Property > Property Settings. Once that is setup correctly, the ‘All Pages’ report becomes a lot more useful – because you can click through to view the actual page using the open link icon. Advanced: Are you getting full referring URL in reports? If you run your website across different subdomains (e.g. blog.littledata.co.uk and www.littledata.co.uk) then it can be difficult to tell which subdomain the page was on. The solution to this is to add the hostname to the URL using a custom filter. See the guide on how to view full page URLs in reports. What other setup issues are you experiencing? Let us know in the comments or by tweeting @LittledataUK.
Best enhanced ecommerce plugins for Magento
Agriculture in Uganda: Measure and Improve
I had a truly inspiring day visiting Send a Cow project near Masaka in Uganda. A group of 30 farmers underwent 4 years of training, supported by weekly visits from a social worker and agricultural trainer. From a group living in absolute under-a-dollar-a-day poverty, there are now farmers owning thousands of dollars worth of livestock and selling export crops like coffee. This education and support, plus the capital grant of one animal per household, has transformed their community. Although the success relied on a solid base of family and group cohesion, organised labour and animal husbandry, I want to focus on three aspects which have ongoing potential for the community. 1. Record keeping Yep, data to you and I. Writing daily details of milk yields, crop inputs, market sale prices and even visitor numbers enabled the farmers to measure and improve. Data also allows farmers to forecast and be inspired. Selling a regular surplus of milk from two cows (after family consumption – yes, they have great teeth!) gave the farmer a regular income of US$3.50 per day at the farm gate. That is more than a teacher’s salary in Uganda. With tender care and back-breaking forage harvesting, they now have a calf being reared – and can count just how much that will mean in further milk and profits. Maybe in 10 years they will be entering yields into a smartphone app, and have market prices forecast automatically. 2. Organic agriculture Oil derivatives (like diesel and fertiliser) are nearly as expensive in Uganda as the UK – in ridiculous contrast to the local market prices for vegetables. Efficient farming therefore has to rely on minimal imported inputs, and maximise the local bounty of sun, rain … and manure. Every precious drop of animal urine is captured – to mix with ash and chilli as an insect repellant for plants – or used neat as a fertiliser. In dry season, every rainfall is maximised, with lots of mulching of vegetables to prevent evaporation; and with a permaculture approach of shading coffee bushes with banana plants, and vegetables under the coffee. I am a fan of organic farming for health and environmental reasons, but out here I just do not see an alternative, cost-effective way to increase crop yields. 3. Peer-to-peer lending Developed-to-developing country lending networks, like Kiva.org, have grown rapidly – but with inevitable problems in vetting funding applications at distance. What farmers need are equivalents of 19th century Europe’s co-operative societies – where savers and lenders from the same area are brought together. These farmer groups operate a very effective local system. All members pledge to save every month: from just 1 cent a week. Then any member can ask for a short term (maximum 3 month) loan from the fund – which is now $2000. The default rate is low – around 2% - as members know the debtors ability to repay, and can monitor progress in person. Plus every debtor has savings in the scheme – so wants to preserve their share of the capital. Three month loans (and flat 10% interest) make repayments easy to predict – and work in a country where planting to harvest is only 3 months. Uganda’s government abolished co-operatives in the 1990s when they started sponsoring political campaigns. But if these lending clubs can grow they could go some way to unlocking the capital that Africa needs to grow. This post was written by Edward Upton, Founder of Littledata, @eUpton
7 best business and tech conferences in 2015
Every year is jam-packed with conferences, forums and festivals, and I have spent enough time sifting through numerous event programmes for this year. There are plenty of opportunities to learn about new trends and techniques, discuss the future and network with peers, but which major events are worth your time (and money)? Here's my pick of must-attend business, digital and tech conferences in 2015. This list covers events in London only, taking place between March and May. MARCH London Enterprise Festival When: 8-19 March Where: Camden Foundry Twitter: @LEF2015 Hashtag: #LEF2015 The London Enterprise Festival brings together business leaders to share their experiences and stories on this year’s theme, starting and growing a business. Perfect for any company owner, director or manager wondering how to identify trends in their industry and grow in the current business climate. LEF covers various industries over 9 days. From gaming and fashion to education and wellbeing, there is a discussion or workshop for everyone. By having each day very focused on its theme, you have a much better opportunity to connect with the right people and take part in relevant sessions. Bonus points for a feel good factor. The organisers are committed to reinvesting the profits to providing free digital courses to unemployed and subsidising workshops and events that make better entrepreneurs and more powerful networks. Internet of Things Summit When: 12-13 March Where: etc.venues St Paul’s Twitter: @teamrework Hashtag: #IOT2015 The Internet of Things is aimed at technologists, entrepreneurs, innovators, industry leaders and managers. Recommended for futurists and those interested in breakthrough technology and cutting-edge science that will shape our future. It sounds very ominous, but with 200 leading innovators you will explore trends that promise to positively impact our lives and society. Experience two days of revolutionary discoveries, leading research and new technologies with university researchers, Paul Clarke (Ocado) and Jeremy Green (Machina Research). You can get a taste for what to expect at a casual IoT meetup event that's taking place on 28 February in London. Pipeline Conference When: 19 March Where: etc.venues Victoria Twitter: @PipelineConf Hashtag: #PipelineConf If you are looking for something smaller and more intimate, then have a look at a one-day Pipeline Conference. The conference has a more informal feel to it with talks and sessions focused on continuos delivery. The keynote speaker is Linda Rising, an international Agile thought leader, who will discuss the myths and patterns of organisational change. Other speakers will be selected anonymously and announced on or around 23 February. Bonus points for their fantastic commitment to 50/50 gender diversity and donating the profit to after school coding clubs. APRIL Chief Digital Officer Forum When: 9-10 April Where: Park Plaza Victoria Twitter: @IEGroup Hashtag: #DigiLeaders The Chief Digital Officer Forum has an impressive speaker line up that consists of senior digital professionals from global brands. Organised by the Innovation Enterprise, this summit is aimed at anyone with background in digital, analytics, ecommerce, social media and innovation. There are plenty of opportunities to take part in interactive workshops, network with attendees and discuss the future of digital. Join hundreds of other digital leaders at CDOF to hear from experts like Will Burns (L’Occitane en Provence), David Martin (Coca Cola Enterprises), James Keady (Samsung) and others. MAY BriForum London When: 19-20 May Where: etc.venues St. Paul’s Twitter: @BriForum Hashtag: #BriForum BriForum London is a highly technical conference dedicated to the best practices of end user computing, cloud, desktop virtualisation, security and application management. Keynote speaker is Brian Madden, one of the brains behind this event, but we are yet to hear about other speakers and exact topics covered. Nevertheless, BriForum promises to deliver informative two days with high profile speakers and attendees. Digital Shoreditch When: 11-24 May Where: Shoreditch Twitter: @DigiShoreditch Hashtag: #ds15 Digital Shoreditch is the trendiest event on this list. It's a vibrant festival that attracts creative, tech and entrepreneurial people, makers and doers, and others in between. Digital Shoreditch is on for two weeks and with hands-on sessions, cosmic parties and amazing speakers it promises to be one of the biggest digital community events. The full programme is yet to be announced but seeing that Mark Earls (HERD), Rory Sutherland (Ogilvy & Mather UK) and Jeremy Waite (Salesforce) are on the speaker line up, I have no doubts there will be other inspiring people joining them. Bonus points for their visionary look and feel, and Twitter profile photo. UX London 2015 When: 20-22 May Where: Trinity Laban Conservatoire of Music and Dance Twitter: @UXLondon Hashtag: #uxlondon Organised by design consultancy Clearleft, UX London 2015 brings together inspiring UX speakers and practical workshops. The conference is focused on a different theme each day and is aimed at product, web and user experience designers. On day 1 explore the secrets of product design with leading experts, such as Des Traynor (Intercom), Julie Zhuo (Facebook) and Jeff Patton (independent consultant, Agile coach and author). On day 2 improve your understanding of human behaviour and user experience by hearing from Cecilia Weckstrom (LEGO) and taking part in Sketch workshop with Meng To. Day 3 is platforms day. Learn about the latest design trends for mobile, desktop and smart TV, and join workshops and talks on responsiveness, wearable tech and designing for different screen sizes. What other conferences and events have you marked in your diary? Leave a comment below or send a tweet @LittledataUK.
Under the hood of Littledata
Littledata tool gives you insight into your customers' behaviour online. We look through hundreds of Google Analytics metrics and trends to give you summarised reports, alerts on significant changes, customised tips and benchmarks against competitor sites. This guide explains how we generate your reports and provide actionable analytics. 1. You authorise our app to access your Google Analytics data As a Google Analytics user you will already be sending data to Google every time someone interacts with your website or app. Google Analytics provides an API where our app can query this underlying data and provide summary reports in our own style. But you are only granting us READ access, so there is no possibility that any data or settings in your Google Analytics will change. 2. You pick which view to report on Once you've authorised the access, you pick which Google Analytics view you want to get the reports on. Some people will have multiple views (previously called ‘profiles’) set up for a particular website. They might have subtly different data – for example, one excludes traffic from company offices – so pick the most appropriate one for management reports. We will then ask for your email so we know where to send future alerts to. 3. Every day we look for significant changes and trending pages There are over 100 Google Analytics reports and our clever algorithms scan through all of them to find the most interesting changes to highlight. For all but the largest businesses, day-by-day comparisons are the most appropriate way of spotting changing behaviour on your website. Every morning (around 4am local time) our app fetches your traffic data from the previous day – broken down into relevant segments, like mobile traffic from organic search – and compares it against a pattern from the previous week. This isn’t just signalling whether a metric has changed – web traffic is unpredictable and changes every day (scientists call this ‘noise’). We are looking for how likely that yesterday’s value was out of line with the recent pattern. We express this as signal bars in the app: one bar means there is a 90% chance this result is significant (not chance), two bars means a 99% chance and three bars means 99.9% certain (less than a 1 in 1000 chance it is a fluke). Separately, we look for which individual pages are trending – based on the same probabilistic approach. Mostly this is change in overall views of the page, but sometimes in entrances or bounce rate. If you are not seeing screenshots for particular pages there are a few reasons why: The website URL you entered in Google Analytics may be out of date Your tracking code may run across a number of URLs – e.g. company.com and blog.company.com – and you don’t specify which in Google Analytics The page may be inaccessible to our app – typically because a person needs to login to see it 4. We look for common setup issues The tracking code that you (or your developers) copy and pasted from Google Analytics into your website is only the very basic setup. Tracking custom events and fixing issues like cross-domain tracking and spam referrals can give you more accurate data – and more useful reports from us. Littledata offers setup and consultancy to improve your data collection, or to do further manual audit. This is especially relevant if you are upgrading to Universal Analytics or planning a major site redesign. 5. We email the most significant changes to you Every day - but only if you have significant changes - we generate a summary email, with the highest priority reports you should look at. You can click through on any of these to see a mobile-friendly summary. An example change might be that 'Bounce rate from natural search traffic is down by 8% yesterday'. If you usually get a consistent bounce rate for natural / organic search traffic, and one day that changes, then it should be interesting to investigate why. If you want your colleagues to stay on top of these changes you can add them to the distribution list, or change the frequency of the emails in My Subscriptions. 6. Every Sunday we look for changes over the previous week Every week we look for longer-term trends – which are only visible when comparing the last week with the previous week. You should get more alerts on a Sunday. If you have a site with under 10,000 visits a month, you are likely to see more changes week-by-week than day-by-day. To check the setup of your reports, login to Littledata tool. For any further questions, please feel free to leave a comment below, contact us via phone or email, or send us a tweet @LittledataUK.
6 helpful Google Analytics guides
I've been improving my knowledge of Google Analytics this month but found that documentation provided by Google and other heavy research can be difficult to absorb. So here are 6 guides and tools that I found useful in the last month. How to set up campaign tracking Expertise level: Newbie Social media analytics: How to track your marketing campaigns by Cory Rosenfield. When you run an ad, email or social promotion, you want to see which channel is most effective in acquiring visitors. By gathering this information through tracking your campaigns you will be able to focus on winning strategies and make adjustments to less performing ones. Cory’s how to guide takes you through the basics of how to set up campaign tracking with relevant explanations and practical examples. It’s as easy as it gets. What metadata needs fixing Expertise level: Beginner Introducing the Meta and Rich Snippet Tester by Bill Sebald. This tester from RankTank compares your site’s meta and rich snippet data to what you have in your site’s code. You will be able to see mismatches between how you have set your titles and descriptions against what is actually displayed in search results. Want to make sure rich snippets are working correctly or Google doesn’t replace missing meta tags with something unsuitable? Then this tool is for you. How to do keyword research effectively Expertise level: Intermediate Keyword research in 90 minutes by Jeremy Gottlieb. Keyword research for improved content targeting can take a lot of time but it doesn’t have to. Jeremy’s plan splits it into a 4-stage process, full of handy tips on how to spend your time effectively. Especially useful for when planning topics for your blog posts and finding words that are most relevant to include in your product descriptions. Setting up alerts for site errors Expertise level: Intermediate Google Analytics custom alerts which you must always use by Himanshu Sharma. How can you find errors and problems on your website with minimum manual labour? Set up custom alerts in your Google Analytics account with Himanshu's guide. You can create notifications for tracking and shopping cart issues, and any unusual changes in your bounce rate and traffic. How to improve multiscreen experience Expertise level: Advanced Enabling multiscreen tracking with Google Analytics by James Rosewell. This step by step guide by James shows how to get better data on the use of your site across various mobile devices. You will be able to make informed decisions on optimising your site whilst taking into consideration screen sizes and layouts. This means improved experience for customers on bigger smartphones and smaller tablets. Source: Infinium.co What were the different variables again? Expertise level: Advanced Variable guide for Google Tag Manager by Simo Ahava. Variables in Google Tag Manager can be powerful, once you get to grips with them. Simo's comprehensive guide is a useful reference that covers everything you need to know from technical details to set ups and debugging. Source: SimoAhava.com Need some help with Google Analytics? Get in touch with our experts!
Top 5 ecommerce trends in 2015: more power to consumer
2014 saw an increasing number of people buying online. With ever-growing competition, it’s ever more important for retailers to understand what their customers want and how to best serve them. Let’s look at five main ways that shoppers will be dictating what they want from ecommerce retailers in 2015 and how you can track these trends. 1. They’re shopping more on mobile devices Not only are shoppers making more purchases on their laptops and PCs but they’re also increasingly using their mobile devices. Retailers saw mobile transactions grow 40% at the end of the last year and there are no signs of slow down. If you’re sceptical about whether optimising for tablets and smartphones is necessary for your business, add a custom Google Analytics report by Lens10 that will quickly tell you if you should go mobile. It will also show you which devices are being used to access your site so you’ll know where to focus your efforts. 2. They’re using click & collect services In 2014 we saw some of the biggest companies jump on the click & collect bandwagon to allow customers to choose when and where they want to pick up their purchases. Waitrose, Ocado, Amazon partnered with TfL to provide click & collect at tube stations. Argos and eBay teamed up to offer the collection of parcels to eBay buyers from Argos stores nationwide. Online buyers want to enjoy a greater freedom when it comes to their shopping so we expect to see more companies join up to expand their offering. With 76% of digital shoppers predicted to use click & collect service by 2017, many more companies will begin offering the service. It’s time to offer customers the option to pick up purchases on their daily commute. 3. They’re expecting convenient delivery options It’s annoying to go through the online buying process only to be faced with limited and costly delivery options at the checkout page. Customers want more flexibility with how and when their purchase will be delivered and if your competitor offers those better options, then why aren’t you? 50% of online shoppers have abandoned a purchase online due to inconvenient delivery options. This number is staggering and should act as a warning to review your delivery cost, times and the accuracy of information you provide on the site. 4. They want personalised communication As shoppers get snowed under hundreds of emails, their individual experiences have become more important. Whilst a large majority of the businesses, 94%, understand that personalisation is crucial to their strategy it’s surprising that not that many are using the tactics. Econsultancy and Adobe produced a survey that reported 14% rise in sales, which makes a strong case for making marketing more personal. Track your customers’ location, local weather, viewed and bought items, and start testing with personalised marketing campaigns to see what works for your sales. (Chart: How do you (or your clients) measure the benefits of personalisation? | Econsultancy) 5. They’re accelerating online sales UK retailers saw their biggest sales over Christmas period, with digital increasingly getting the bigger share of the overall retail market. In 2014 ecommerce sales broke the £100bn mark for the first time and IMRG Capgemini e-Retail Sales Index predicts further growth to £116bn this year Be wary of repeating the mistakes of retailers like Currys, Argos, Tesco and PC World, whose websites couldn’t handle the increased number of visitors on Black Friday. Many customers remained stuck on frustrating holding pages instead of shopping. Check out some useful tips from Econsultancy for how to prepare for Black Friday in 2015. By setting up ecommerce tracking you can understand what shoppers are doing on your website and make informed decisions on further updates to product pages. In 2015 retailers’ success will depend on their ability to meet customers’ expectations and we hope the list above has helped your preparations. If there are any other trends you see growing in 2015, do share them in the comments.
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