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.
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.
What's new in Google Analytics 2014
Google has really upped the pace of feature releases on Analytics and Tag Manager in 2014, and we’re betting you may have missed some of the extra functionality that’s been added. In the last 3 months alone we’ve counted 11 major new features. How many have you tried out? Official iPhone app. Monitor your Google Analytics on the go. Set up brand keywords. Separate out branded from non-brand search in reports. Enhanced Ecommerce reporting. Show ecommerce conversion funnels when you tag product and checkout pages. Page Analytics Chrome plugin. Get analytics for a particular page, to replace old in-page analytics. However, it doesn’t work if you are signed into multiple Google Accounts. Notifications about property setup. Troubleshoot common problems like domain mis-matches. Embeded Reports API. So you can build custom dashboards outside of GA quickly. Share tools across GA accounts. Now you can share filters, channel groupings, annotations etc easily between views and properties Tag Assistant Chrome plugin. Easily spot common setup problems on your pages using the Tag Assistant. Built-in user tracking. See our customer tracking guide for the pros and cons. Import historic campaign cost and CRM data (premium only). Previously, imported data would only show up for events added after the data import. Now you can enter a ‘Query Time’ to apply to past events, but only for Premium users. Get unsampled API data (Premium only - developers). Export all your historic data without restrictions Better Management API (for developers). Set up filters, Adwords links and user access programmatically across many accounts. Useful for large companies or agencies with hundreds of web properties.
Pulling Google Analytics into Google Docs - automated template driven reporting
The Google Docs library for the analytics API provides a great tool for managing complex or repetitive reporting requirements, but it can be tricky to use. It would be great if it was a simple as dropping a spreadsheet formula on a page, but Google’s library stops a few steps short of that - it needs some script around it. This sheet closes that gap, providing a framework for template driven analytics reports in Google Docs. With it you can set up a report template, and click a menu to populate it with your analytics results and run your calculations - without needing to write a line of script - the code is there if you want to build on it, but you can get useful reports without writing a line of script. Prerequisites While you don't have to write code to use this, there are some technical requirements. To get the most out of it you'll need to have: your Google analytics tagging and views set up familiarity with Google’s reporting API familiarity with Google Docs spreadsheets - some knowledge of Google apps scripting is an advantage If you are looking for something more user-friendly or tailored to your needs, contact us and book a consultation to discuss - we can help with your analytics setup and bespoke reporting solutions. Getting started Setting this up takes a few steps, but you only need to do this once: Open the shared Google spreadsheet Make a copy Enter a view ID in the settings sheet - get this from the Google Analytics admin page. Authorise the script Authorise the API - in the API console - this is the only time you need to go into the script view using Tools|Script Editor Once in script editor select Resources|Advanced Google services On the bottom of the Advanced Google services dialogue is a link to the Google Developers Console, follow this and ensure that Google analytcs API is set to On You're done. You can go back to the spreadsheet and run the report (on the Analytics menu). From now on all you need to do is tweak any settings on the template and run the report. Setting up your own report template You can explore how the template works using the example. Anywhere you want to retrieve value(s) from Google Analytics, place this spreadsheet function on the template: = templateShowMetric(profile, metric, startdate, enddate, dimensions, segment, filters, sort, maxresults) This works as a custom spreadsheet function, for example =templateShowMetric(Settings!$B$2,$B7,Settings!$B$3,Settings!$B$4,$C7,$D7,$E7,$F7,$G7) Note that in the example, several of the references are to the settings sheet, but they don't have to be, you can use any cell or literal value in the formula - it's just a spreadsheet function. To get the values for the API query, I'd suggest using Google’s query explorer. To set this up for a weekly report, say, you would have all the queries reference a single pair of cells with start and end dates. Each week you would change the date cells run the report again - all queries will be run exactly as before, but for the new dates. Using spreadsheet references for query parameters is key. This opens up use of relative and absolute references - for example if you need to run the same query against 50 segments, you list your segments down a column, set up segment as a relative reference, and copy the formula down spreadsheet style. You can use this to do calculations on the sheet and use results in the analytics API, for example you might calculate start and end dates relative to current date. Future posts will cover setting up templates in more detail. Under the hood The templateShowMetric function generates a JSON string. When you trigger the script, the report generator copies everything on the template to the report sheet and: runs any analytics queries specified by a templateShowMetric function removes any formulas that reference the settings sheet (so you can use the settings sheet to pass values to the template, but your reports are not dependant on the settings staying the same)
Analytics showing wrong numbers for yesterday's visits
We've noticed a few issues with clients using Universal Analytics this last month, when visits for the last day have been double the normal trend. It then corrects itself a few hours later - so seems to be just a blip with the data processing at Google. Others have noticed the same problem. The temporary fix is to only generate reports with time series ending the day before yesterday. i.e. ignore yesterday's data. Now Google have officially acknowledged the problem Looking forward to seeing that one fixed!
Measuring screen resolution versus viewport size
There’s a difference between the ‘screen size’ measured as standard in Google Analytics and the ‘browser size’ or ‘browser viewport’. Especially on mobile devices, there are pitfalls comparing the two. Browser viewport is the actual visible area of the HTML, after the width of scroll bars and height of button, address, plugin and status bars has been allowed for. Desktop computer screens have got much bigger over the last decade, but browser viewports (the visible area within the browser window) are not. The CSS tricks site found only 1% of users have their browser viewing in the full screen. While only 9% of visitors to his site had a monitor less than 1200px wide in 2011, around 21% of users have a browser viewport of less than that width. Simply put, on a huge monitor you don’t browse the web using your full screen. Therefore, 'screen resolution' may be much larger than 'viewport size'. The best solution is to post browser viewport size to GA as a custom dimension. P.S. Google Analytics does have a feature within In Page Analytics (under Behaviour section) to overlay Browser Size, but it doesn’t work for any of the sites I look at.
How many websites use Google Analytics?
Google Analytics is clearly the number one web analytics tool globally. From a meta-analysis of different surveys, we estimate it is currently installed on over 50% of all websites or 80% of operational websites using any kind of analytics tracking. We looked at the following sources for this chart: Datanyze survey of Alexa top 1m sites (04/2014) BuiltWith survey of all websites (04/2014) MetricMail survey of Alexa top 1m sites Pingdom survey of Alexa top 10k sites (07/2012) W3Techs survey of their own sites (04/2014) LeadLedger survey of Fortune 500 sites (04/2014)
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