hero image

3 Segments to Model Your Customer’s LTV with Will Laurenson - Honest Ecommerce Ep. 131

Will Laurenson is a customer value optimisation consultant with 10 years experience optimising customer journeys to convert more traffic into customers, and retain those customers for longer helping companies achieve more profitable growth. 

He is also the host of the Customers Who Click podcast, interviewing guests from across the marketing spectrum to give actionable insights into growth.

In This Conversation We Discuss: 

  • [00:00] Intro
  • [01:36] Will’s journey to ecom and consultancy
  • [04:48] Basic formula for CLTV
  • [06:30] What is RFM Modeling?
  • [06:44] Cleaning up the data
  • [07:58] Difficulty in predicting LTV
  • [09:05] LTV formula is malleable
  • [11:58] The value in simplicity
  • [12:49] You don’t have to start at scale
  • [13:31] Building and segmenting your audience
  • [15:01] Following up with your customers
  • [16:59] When customers leave a brand
  • [18:02] Sponsor: Electric Eye electriceye.io
  • [18:22] Sponsor: Mesa getmesa.com/honest
  • [19:24] Sponsor: Rewind rewind.io/honest
  • [20:00] Sponsor: Gorgias gorgias.grsm.io/honest
  • [21:41] Sponsor: Klaviyo klaviyo.com/honest
  • [22:37] Segments to build LTV
  • [23:23] Frequency and value purchases
  • [24:13] Gathering data by asking questions
  • [25:38] Don’t be deterred by negative feedback
  • [26:17] Gathering extra data from new subs
  • [27:14] Conversion rate doesn’t matter?
  • [29:39] Progressing to quiz-driven acquisition
  • [30:26] Chase recommending octane.ai
  • [31:27] Pointing people to products vs capturing data
  • [32:36] Don’t use tools to solve strategy problems
  • [32:57] Tools for analysis: Sheets and Excel
  • [37:13] Where to find Will

Resources:

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews!

  Transcript:

 

Will Laurenson  

That's another one I really hate: When businesses seem to actively make it difficult for you to contact them because they don't want to deal with customer service inquiries.

Chase Clymer  

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. And today bringing to the show a very, very smart gentleman, Will Laurenson

Will's coming to us from Customers Who Click. He is just a genius when it comes to customer value, customer lifetime value, value optimization

And that's all that they do over there at Customers Who Click. Will, welcome to the show. 

Will Laurenson  

Hi, thanks for having me. 

Chase Clymer  

Oh, yeah, absolutely. I feel like we haven't spoken for a long time. Yeah. So for those in the know, I was literally just... We just recorded an episode of Customers Who Click (Podcast) on Tuesday, I do believe. 

And this is Thursday. So maybe they'll come out at the same time. And we'll just blast the universe with all of our knowledge. 

Will Laurenson  

Yeah.  

Chase Clymer  

Awesome. So take me back to the beginning. What got you into Ecommerce? And  where did your consultancy come from?

Will Laurenson  

Yeah. So my background originally was in a few startups, a few B2C startups. And my role was a general marketing person, as you are in startups. 

And what I found was, quite often, we were given large budgets and told, "Go and spend this money. Go acquire customers." 

And that was basically the entirety of the remit for the marketing team. Law says acquisition channels, spend the money. 

There were actually cases where we were told "If you don't spend the money, you're not getting it next month." 

So on the one hand, you're like, "Well, I don't want to waste the money, because I don't want to spend it." 

And they're like, "Well yeah. But you need to spend it. We're giving you that budget to spend. If you don't spend it, it means you can't and we won't give it to you next time.

Chase Clymer  

That's basically what happens with the military budgets here in America. And that's why they keep getting bigger. They just find ways to spend it.

Will Laurenson  

Yeah. So yeah, obviously, when you're a startup, the product is not complete. So you have to work a bit harder to engage customers, you have to figure out those problems pretty quickly. And what I was finding was that we weren't. 

The product team had their roadmap to work on, and it was just years worth of work. And that was it. That was their plan. So marketing teams just keep marketing, use email to bring people back. Just do what you can. 

And I had this a few times, and it was getting quite frustrating. And I started to push myself more and more into the product team, and said, "Look, I'm going to work with you because I'm seeing all the feedback coming in from customers.” 

I'm seeing the engagement rates in our apps and our products, with our products. We have to be improving the app or improving the websites, improving the actual purchase journey itself to the point where the purchase is completed." 

But then also less product-related. "What can we do after that purchase to actually retain people? To make them happy and to make sure that they're actually going to come back to us, they're going to talk about us, they're going to leave good reviews, they're going to refer friends to us?"

And so I left my last job as head of conversion for a gaming company in the UK about 18 months ago and set out on my own to work with Ecommerce brands to do this. 

So to help them optimize their websites for conversion, get those people in through the door making that purchase. 

But then also, what does that "later" experience look like? How do we make sure that we're not just treating them all as one big batch of customers, and that we're doing our best to not only personalize the experience one-to-one, but just generally give that great experience to people?

Chase Clymer  

Yeah. That's fantastic. And I think it's something that sets apart generalists from an agency or consultancy contract --whatever you want to call it-- from the rest of the pack is when they have a Northstar with all their engagements. And yours is quite clearly, customer lifetime value. 

Will Laurenson  

Yep. 

Chase Clymer  

Just with that being said, customer lifetime value is a very interesting metric. And there's quite a few ways to calculate it, I guess. 

So for those listening that are a little bit newer to Ecommerce and they may not have their customer lifetime value figured out, is there a basic formula that you throw out there for the newbies or is your formula pretty easy to understand how do you calculate these things?

Will Laurenson  

So a basic formula would be taking the total amount spent, dividing it by the number of customers. However, the key thing to then do --or to do first, I suppose-- is actually split that out at least a bit by channels and some other segmentation. 

Because what you'll find is, if you take an average, you might get some... You might get a handful of people who are spending tens of thousands on your website, but the majority of people are spending $100 either over the lifetime or per purchase, whatever. 

But if you take it as an average, you suddenly get an average of $500 for example or $1000s which means that when you start planning for your acquisition and setting your budgets and things, you're you're targeting CPAs with an acquisition costs, that's so much higher than you actually can afford to do. 

So it's really, really important that you split that out by channel. You use a bit of RFM modeling to understand what those different value segments are as well. Because if you don't do that, you've got no idea what you're really targeting

Chase Clymer  

What is RFM modeling?

Will Laurenson  

So Recency, Frequency, and Monetary. So it's  scoring people based on how recently they made a purchase, how frequently they purchase and how much they spent. 

Chase Clymer  

Gotcha. So all of this is an exercise. You have all your data, and now you're cleaning up the data with the goal of finding the most accurate number to base everything else upon.

Will Laurenson  

Yeah. Yeah, once you split those segments, you can find your VIP customers and you can retarget based on that. 

And you know when you're retargeting to that audience or building those custom audiences, you know that you're expecting this audience to be worth quite a bit more. 

And then you've got those, maybe lower value people who you think potentially can't apply. You can't target them because the value is so low, maybe that purchase is profitable, but they don't come back. 

They spent  the minimum order value for free shipping, for example. And you might find you actually struggle to actually target those people specifically. 

And also, you might not want to know if those people literally come in and spend $50 and that's it and never come back. You probably don't want to spend time actively acquiring those customers. You want to spend time on the valuable customers.

Chase Clymer  

Yeah.

Will Laurenson  

That's where it does get a bit difficult because with things like recency and frequency, and even that monetary side, you don't necessarily know off that first purchase, what someone's going to be in the future, particularly for Ecommerce. 

For some other things where some apps like subscription apps, and the gaming company I was on, we could predict future lifetime value based on those, I think it's the first 7 days, actually. 

We would look at, how much they deposited, how many times they deposited, how quickly they spent money on games, and that sort of thing. And it was within that first 7 days, that would tell us: Are they going to be a super valuable person? 

Or do we think they're just gonna use their initial bonus and leave? It's very difficult with Ecommerce because those engagement numbers aren't really there. 

You might be able to link in a bit of email data and things but that's still not... It's not related to the purchase. So it's still not a great indicator.

Chase Clymer  

Yeah, I think with a lot of these, I would call them 200-300-400 level Ecommerce concepts, there begins a point where it's a little bit of art and science. And a lot of it is making informed assumptions, I guess. 

There's probably a better technical term for it. But it comes down to: Every business is different. And there isn't one way to construct  what the customer lifetime value will be, what that window should be, or what the payback window should be. 

That's a whole other thing that we could talk about. So that's  something I just want to let listeners know, that customer lifetime value is a very malleable thing. And it can change based upon the model you choose to run with.

Will Laurenson  

Yeah, pretty much. And I don't think you have to be super detailed with it, you'll see some models out there, which will build you 50 different segments. 

So I think initially, at least if you're initially getting into this modeling and haven't done it before, you can keep it a bit more simple and just make sure who are those brand new customers, who are your loyal, engaged customers who are buying from you frequently and a lot? Who are the people who have come in once and never purchased again? 

Have they been given the right to the same experience and the right experience? It's worth looking into things about people engaged with newsletters. 

If you've got a load of people who are not subscribed to your newsletter and they've made one purchase and never come back. It's difficult to... You're gonna have to pay to bring them back. 

But it doesn't necessarily mean they're not going to be a valuable customer in the long term, it just means they didn't want to sign up for your newsletter in the first place. 

But then, there are better ways to get people into that newsletter than just putting a checkbox in the checkout saying, "Yeah. Yes, I'll opt in to hear about promotions and things." 

Better ways of doing it, then just pop up on the screen saying, "Do you want 10% off? Submit your email address." I could go into a lot of detail with this. There are other people out there who go on about this a lot. 

But at the end of the day, if you just capture an email address for a newsletter, you know nothing about that customer. 

So you can't personalize the experience to them at all. You can't segment them into different flows, you're not capturing any data there, which might tell you whether they're a potential VIP or not. 

Yeah, so in addition to the RFM modeling and stuff you need to do to track those, use those customers, as they are purchasing. There's loads more you can be doing on the newsletter and engagement side to actually turn people into engaged, loyal customers as well. 

Chase Clymer  

Awesome. Yeah, that's a fantastic transition there.

But I just wanted to repeat something you just said that there are some people and think and models out there that will kind of come up with 50 different segments. 

And I think that is overkill for the typical SMB. Keep it simple, stupid. The KISS model. You just need a handful, a couple to really maximize what you do here. And then, it really only makes sense to get that granular at scale. And you're probably nowhere near there yet.

Will Laurenson  

But you can also build them up. So you build out, I don't know, 3, let's say for example.

Chase Clymer  

Mm-hmm. 

Will Laurenson  

It might be. You've got your... 

Chase Clymer  

I'm a big fan of 3.

Will Laurenson  

Yeah. (laughs)

Chase Clymer  

I love the number three, for all strategies and tactics. I think 3 is perfect. 

Will Laurenson  

Yeah. And once you've got those 3... Once you've worked out what that is and how it's working in the marketing automation that goes into it, and how you treat and manage those customers, [then you] start building out extra segments. 

It doesn't have to be... I think something that scares people off is the idea that these models have to be huge from the get go. They've got to have all these segments. And they've got to be able to work out all the different emails and touchpoints that these people might have. 

And it sounds a bit overwhelming. So I think it's... I don't think there's anything... I think some people will say otherwise. But I don't think there's anything wrong with breaking it down to a few bite-sized chunks, dealing with those first, and then progressing from there.

Chase Clymer  

Absolutely. And you touched on this a few minutes ago. But you know, if someone listening is like, "Alright. I'm all in on this, Will?" What are the 3 audiences I should build?

Will Laurenson  

So well you're going to have that list, that newsletter list. I say newsletter list. I really need to stop saying that because I hate it. that kind of lead list, I suppose.

Chase Clymer  

Okay. So these will be the... Will these be prospects that haven't purchased yet? 

Will Laurenson  

People haven't purchased.

Chase Clymer  

Okay. So if we're using Klaviyo as our tool here, that's how you'd segment it out.

Will Laurenson  

I suppose. There's different segments...

Chase Clymer  

(laughs) Okay, I'm just confusing it.

Will Laurenson  

Yeah. So in that lead list, I wouldn't want to have one... I wouldn't want to have that as one segment. That needs to be split into something somehow. That's where I mentioned how the email, just on its own, is a bit pointless. 

So when you're capturing the data, you should be asking some questions at the same time. What are people interested in? When do they want to buy? What's important to them with these products? 

Because when you can get some of that sort of data in, you can then segment that lead list into... It might just be 2 or 3 different automations, 3 or 4 different automations. 

Then focus on those pain points and take into account that data that will help you communicate with people, not exactly on a one-to-one basis but on a more personalized basis because you've taken into account what they've told you and then you're communicating to them based on that. 

Chase Clymer  

Okay.

Will Laurenson  

Going back to the 3, you've got your new customers. So people have made that first purchase. Making sure that they really have a good experience is really important that first time. 

So I don't mean... It's something I'd suggest with anyone, every customer, anyway, after a purchase. But I think it's particularly important that when people make this first purchase from you, you deal with any anxiety and questions that they might be facing. 

So it's really important to let them know about shipping and delivery and things like that. So as soon as they make that purchase, try and put some tracking information in front of them. Or say, "Look, here's your unique tracking link." 

Tell people to get in touch with you. If they do have any questions, what I like to do is reach out to customers shortly after they have received their order as well. So get in touch with them. That can be automated as well. 

It just needs to be automated a little bit after fulfillment, just check in on them. Did the product arrive on time in good condition? Was it as expected? Is the order actually what they wanted? Or is maybe something missing? Do they have any questions about how to use it or care for it? 

It depends what the product is. But be proactive about it and jump in there. And because not only can you solve any problems that the customer might have, but also you just create that good feeling, that engaged feeling, with someone if they know that the brand has actually reached out to them to ask if they have any problems. 

Another plus side of that, of course, is when it comes to the review that you're going to ask for in maybe a week or two later, they feel a bit better about you anyway because you've reached out. 

So happy customers, potentially, and now [they are] even happier customers, because you've made that effort. But the customers who have problems, if you've managed to fix those problems, are now going from one or two starts with 4 or 5 star reviews.

Chase Clymer  

 Absolutely.

Will Laurenson  

There's so much benefit to doing that. And that does apply to obviously any customer at any point. They could buy from the 50th time. I think I saw a... 

There was a stat I saw the other day: 80% of customers say they will abandon a website that they're loyal to with, I think, 2 negative experiences. And it's been 2 or 3 if it was their first time buying from a business, they will abandon that... 

It's something like 95% of people would abandon the business with 1 negative experience. So if you mess it up after that first purchase, they're gone. You can fix it and turn that negative experience into a good experience. 

But if you leave it and just leave it as a negative experience then they're gone. And yeah, even your loyal customers, they might let you off with 2. And then the 3rd one, they're gone. 

But you can't use that as a stat and say, "Oh, we've only got 2 strikes on this person." So they'll stay with us. Maybe that first one of course leaves anyway.

Sponsor: Electric Eye

If you're struggling with scaling your sales, maybe Electric Eye can help. 

Our team has helped our clients generate millions of dollars in additional revenue through our unique brand scaling framework. You can learn more about our agency at electriceye.io. That's E-L-E-C-T-R-I-C-E-Y-E.io. 

Sponsor: Mesa

Mesa is the easiest way to integrate any top Ecommerce app or service with your online store designed exclusively for the Shopify ecosystem. Yes, that includes Plus

Mesa's automated workflows can get back your time spent on repetitive tasks while growing your business all at the same time. 

Join other merchants that have embraced the simplicity of Mesa's no-code approach to building workflows. 

You can create new ways to improve customer engagement. Encourage repeat purchases without lifting a finger, reduce manual data entry, and much more through a simple point-and-click interface. 

And with Black Friday, Cyber Monday planning around the corner, now is the time to ask the question: Is my online store prepared? 

Optimizing every step in the shopping experience is the only way to create a lifelong customer. 

Get Mesa and capitalize on one of the biggest commerce events of the year. Visit get mesa.co/honest for a 14-day free trial. That's G-E-T-M-E-S-A.com/H-O-N-E-S-T.

Sponsor: Rewind

Our partner, Rewind, can protect your Shopify store with automated backups of your most important data. 

Rewind should be the first app you install to protect your store against human error, misbehaving apps, or collaborators gone bad. It's like having your very own magic Undo button. 

Trusted by over 80,000 businesses from side hustles to the biggest online retailers like Gymshark, Gatorade, and MVMT Watches

Best of all, merchants like you can get 1 month of automated Shopify backups for free by visiting rewind.io/honest. That's R-E-W-I-N-D.I-O/H-O-N-E-S-T. 

Sponsor: Gorgias

Hey everybody, do you want to win back valuable last time for your support team? 

Gorgias has machine learning functionality that takes the pressure off small support teams, and gives them the tools to manage a large number of inquiries at scale, especially during the holiday season. 

Gorgias combines all your different communication channels like email, SMS, social media, live chat, and even phone into 1 platform and gives you an organized view of all of your customer inquiries. 

Their powerful functionality can save your support team hours per day and makes managing customer orders a breeze. 

They have allowed online merchants to close tickets faster than ever with the help of pre-written responses integrated with customer data to increase the overall efficiency of customer support.

Their built-in automations also free up time for support agents to give better answers to complex product-related questions, providing next level support, which helps increase sales, brand loyalty, and recognition. 

Eric Bandholz, the founder of Beardbrand says "We're a 7-figure business and we have, essentially, 1 person on customer support and experience. It's impossible to do it without tools like Gorgias to help us innovate." 

Learn how to level up your customer support by speaking to their team here. Visit gorgias.grsm.io/honest. That's G-O-R-G-I-A-S.G-R-S-M.I-O/H-O-N-E-S-T

Sponsor: Klaviyo

Businesses are the most successful when they own their own data, customer relationships, and their growth. That's why more than 50,000 Ecommerce brands, big and small, trust Klaviyo to deliver their ideal customer experience. 

Klaviyo is the ultimate ecommerce marketing platform for online brands of all kinds and all sizes with email automation, SMS marketing, lists growth tools, and more. 

You'll get everything you need to build strong relationships that keep your customers coming back. If you're tired of relying too heavily on paid advertising or third party marketplaces for your sales success, you're not alone. 

It's time to take back control of the customer experience. More and more online businesses are moving to Klaviyo to grow higher value customer relationships through personalized email and SMS marketing. And the results are staggering. 

Ready to drive future sales and higher customer lifetime value with a marketing platform built for your long term growth? You should get a free trial of Klaviyo over at klaviyo.com/honest. That's K-L-A-V-I-Y-O.C-O-M/H-O-N-E-S-T

Chase Clymer  

So I'm listening to everything that you're saying here. And I'm trying to just boil it down to the most simple concepts. 

So what I'm hearing from you is the 3 segments if you're going to start modeling out customer lifetime value... And goes in hand with marketing. So the first segment would be no-purchasers yet, so it's harder to attribute lifetime value to them unless you have extra data. 

But that would be the first bucket. And then the second bucket would be first-time purchasers or single purchasers, however or whatever label you want to put on it. 

And then the third bucket would be repeat purchasers, which also could probably be your VIP customers. Is that the mindset you want to get people in when they're thinking about this?

Will Laurenson  

Yeah. I think at a basic level. And then like I said earlier, you then build out those segments. 

Chase Clymer  

Yeah. 

Will Laurenson  

So when you've got those repeat customers, then you start looking at the right VIPs, the guys, who come in and spend loads of money every single time they purchase. You might have people who come in and buy quite frequently, but at a low value as well. 

It depends on the store, the range of pricing, and things. So you need to work out how you deal with these people and the experience that you want to give them. 

You might want to find out why people buy really frequently but at a low value. And then you know it depends on your business --because everything depends on the business really-- you might find that there's more value to you and the customer if, actually, they make less frequent purchases, but a higher value. 

Chase Clymer  

I'm going to ask you a very leading question, how would you find out the answer to that question? How would you find out why they're buying frequently at low values? 

Will Laurenson  

Ask them.

Chase Clymer  

It's that simple. 

Will Laurenson  

Yeah, it links back to what I was talking about with  that email capture and asking additional questions. Those are questions on a form that you're just going to ask people to press an answer on. 

But yeah. If you're looking at a segment of customers, and you don't really understand why they're behaving that way, just ask them and you can do it quantitatively or qualitatively. I tend to do a bit of both. 

I'll send out a survey. Ask a bunch of questions. 5-10 questions at most. Normally it takes them 3 to 4 minutes to complete, which is nothing, really. Less time depending on the questions obviously. 

But always end a survey with. "Are you happy to... Would you be happy to speak to a member of the team about your feedback?" And then ask them for an email address. And you'd be surprised how many people are willing to fill in the survey and say that they'll speak to a member of staff without any incentive.

Chase Clymer  

Yeah, that's the point I wanted to get across here. People are scared to ask people for feedback, which is surprising to me. Because it's a shortcut to making your business better.

Will Laurenson 

Yeah. You can make your business better. You can make their experience better which is just better for everyone really, isn't that? 

Chase Clymer  

Yeah.

Will Laurenson  

There are businesses out there who don't use review tools, because they're worried about the negative feedback that they're going to get out there. But if you're that worried about the negative feedback, and that worried that you're not going to have a good score on Trustpilot, REVIEWS.io, or whatever, you've got issues. 

Chase Clymer  

Yeah.

Will Laurenson  

That either means you're just really insecure about it, which you just need to get over. Or you know that the experience is not great. And you're expecting... You are genuinely expecting bad reviews. In which case, either stop completely or speak to customers and fix it.

Chase Clymer  

Alright. So we're talking about gathering more data points here. And obviously, when they make a purchase, you're not cheating. You're getting cool stuff at that point.

You've got their zip code, you got the product that they want, you gave them a discount code if they use it, where they came in... [You can] even find out what marketing channel they heard about you after the purchase. 

All that stuff's a lot easier to find that data and start segmenting after they make a purchase. But what about before they've made a purchase? Rumor is that the more fields on a form for a pop up on your website, the less likely people are going to convert. Is there another approach to gathering this extra data from new subscribers?

Will Laurenson  

Yeah. With 2 clients at the moment, we're running a single page form or a single... I suppose it's a page but it's not a full page. It's just a normal pop up with... 

One of them's 2 questions: Email address and a pain point question related to the product. We get pretty much exactly the same conversion rate as if we just asked for the email address. 

So that one question, no negative impact. I think on mobile actually, it has a very slight increase as well. With the other client, we're asking about 4 maybe 5 pieces of information. 

And again, there's no downside to it, when we're not seeing a decrease in conversion rate on the form. But also, I suppose, what's important to know is that conversion rate on the form doesn't really matter so much. If that...

Chase Clymer  

 And why is that? 

Will Laurenson  

Because it comes down to that customer lifetime value piece again. You could get 10,000 people through a form with just an email address. 

Or you could get maybe 1000 people, but you've asked them 3 questions that allow you to personalize emails to... It's highly likely those 1000 people are going to be worth more than the 10,000 people in the long run... 

Chase Clymer  

Yeah.

Will Laurenson  

...because you're personalizing the experience to them.

Chase Clymer  

So if we're going to put math behind this, the conversion rate after the fact... And this is me making assumptions. And you can... Hopefully I'm correct with my assumptions. 

Let's use the example email pain point. Now they signed up for the list and you're speaking to that pain point and every part of the welcome series or retargeting series that you're hitting these people with. 

I'm guessing that those clickthrough rates and conversion rates from those efforts are higher than the test list or the non-segmented list?

Will Laurenson  

Yeah, the control list for them? 

Chase Clymer  

That's the word. 

Will Laurenson  

Segments list. Yup. Yeah, we see that rates of engagement in email [have] better conversion rates because every email is... This is just one piece of data as well. I'm sure we could be asking for more... 

For one of the other clients, we're asking for several pieces. Again, we see better conversion rates, better lifetime values, because you're addressing their pain points in all those emails to them. 

And so every time you do that, it's answering those questions for them around whether this product is right for them, or whether this business is right for them. And that's going to help convince them to purchase over an email which just says, "Here are some products." 

Chase Clymer  

Absolutely. Have you started experimenting with quiz-driven acquisition of emails and stuff?

Will Laurenson  

It's what I'm trying to move into. At the moment, the tools we have are a single page, which makes it more complex. 

But one client we're working on that with.  So we've recently redone the form to ask for multiple pieces of information. 

And the next stage is, how are we building out that multi-step flow, which is like a quiz. The ideal situation would be that at the end of that quiz, we will point them to a page of specific products for them. 

Chase Clymer  

Mm-hmm.

Will Laurenson  

If we can't do that initially, then at least we'll capture the data.

Chase Clymer  

Yeah. If you haven't played around with it, and this is not an endorsement. It's just that this product does work, I guess. I don't know. Maybe it is an endorsement. They're not paying me.

The octane.ai product recommendation/quiz thing is phenomenal. And it integrates  directly with Klaviyo and drops all those data points into the customer profile. It's pretty sweet.

--cross talk---

Chase Clymer  

Yeah, I can intro you to rep over there if you're curious about learning some more stuff. 

Will Laurenson  

Yeah.

Chase Clymer  

But what I've learned about the quiz angle is that it's really useful if you can think about it from the perspective of "I'm in the store. Like I'm a salesperson. What questions would you ask like the person standing in your store to help get them to the products that they probably want." 

And then you build it out that way. And it just gives you this wealth of knowledge that you can then use to segment and target the customer in the way that they would like to be spoken to, and show them the products that they are definitely interested in.

Will Laurenson  

I think there's slightly different data you get from that, when you're pointing people towards products, as opposed to capturing data about customers, and their buying behavior, both have their uses. 

Chase Clymer  

Mm-hmm.

Will Laurenson  

But yeah. I wouldn't necessarily use the quiz based data in exactly the same way as the other questions I'd be asking. Just because this... Yeah, the quiz is designed just to go, "Here's the one. Or maybe here's 3 products that we'd recommend to you." 

Whereas I'm trying to get an idea with the email collection and that segmentation. I'm trying to get an idea of who they are, what they're interested in, when they're looking to buy, and that sort of information that will help me then tailor the experience going forwards. 

Whereas the risk with the quizzes, you've narrowed it down a little bit too much, to get them to that product there and then. 

But it might mean that if you stuck that into your email system, you'd basically be recommending them the same product that they've bought every time. It's not exactly like that. I've been a bit extreme with the example. But...

Chase Clymer  

No. I respect what you're pointing out there. You can't rely... What I'm hearing is you can't rely on a tool to solve a strategy problem. You still need to think about it and understand your customer and make sure that it just plainly makes sense. Think about it from all angles. 

Will Laurenson  

Yeah, exactly. 

Chase Clymer  

Awesome. So as we dive down this path of tools, is there anything in your arsenal that you guys love using on all your clients stores, or that you recommend people use to try to get some of this data? Or try to calculate a lifetime value? Anything that comes to mind?

Will Laurenson  

I do a bit of analysis in Excel. And I'm not supposed to do that at scale. (laughs)

Chase Clymer  

Dude. Google Sheets/ Excel. It's just the... It's the most powerful software out there. And there are $100 million businesses out there that are still around Excel.

Will Laurenson  

Yes, I suppose it's not really data segmentation and stuff. It's more when I'm interested in looking into a specific piece of data, I will export the order... Order data and stuff and just review it in Excel. I suppose for RFM, the one that pops to mind is Reveal by Omniconvert. which I believe is a free plugin for Shopify. 

Yeah, I'm pretty sure it is. That's, that's a really good one for the RFM data. They will also tell you a few things like... What's it called? Days between purchase? 

Dates of the next purchase --that's the one-- which will help you get an idea of when your customers are next likely to purchase and when you might want to be then getting in their inbox and nudging them a bit. 

Chase Clymer  

Mm-hmm.

Will Laurenson  

Yeah. They're really good. It's a really easy tool to use. It's pretty simple. They will give you quite a lot of segments. 

So it's easy to look at that and get a bit overwhelmed and think "Well, what do I do with all these segments?" So you need to, I guess, not worry about that too much. Just focus on the... 

They've got like core segments or core user groups, and then there's sub segments in each one that make each one up.

Chase Clymer  

And now can you integrate those with your ESP?

Will Laurenson  

Yes, I believe it's straight into Klaviyo. I can't remember the integrations that they have. I would go check it out. It's on Shopify.

Chase Clymer  

Yeah. (laughs) No one's going to email you like "You lied to me, Will." (laughs) 

Will Laurenson  

Yeah. Yeah, I can't remember about integrations. 

Chase Clymer  

That's fine. Man, we just dove down the rabbit hole today with customer lifetime value. Is there anything that I forgot to ask you that comes to mind that you want to share?

Will Laurenson  

I suppose... Just generally, to sum up a little bit? I think you really need to be focusing on what the customer wants at, pretty much, every touch point. What is it?

At every stage, every page that comes to What is it that they might be wanting to achieve on that page? As an individual page? And how would you give that to them? 

So if they're on a product page, are you giving them the information they need to decide whether that is the right product for them? 

On the checkout page, are you giving them information about different checkout options, payment options, shipping options? That sort of thing? 

Post purchase. Are you keeping them fully informed about the progress of their order? Are you making it easy for them to get in touch with customer service? 

That's another one I really hate: When businesses seem to actively make it difficult for you to contact them, because they don't want to deal with customer service inquiries. They would rather point you to an FAQ or a chat bot or something. 

If someone wants to get in touch with you, just let them. Give them a few different options. I should test them and see what works. I have heard a few people saying that live chat has had a negative impact on the business. 

So that might mean don't use live chat for them. It also might mean: Are they using the live chat correctly?

Chase Clymer  

Mm-hmm. 

Will Laurenson  

So that's complex. Don't want to get into it too much... But yeah, focus on the customer. Give them what they want. Post purchase: Make sure you're making sure the customer is happy before you ask for anything. 

Chase Clymer  

Mm-hmm.

Will Laurenson  

That's the post purchase experience I was talking about earlier. Follow up with them, check in on them. Be pretty sure you're happy that they're happy, then you can start asking for reviews, referrals, that sort of thing.

Chase Clymer  

Awesome. That's great. So if people that are listening, they're intrigued about what you have to say and what you have to offer, where should they go? How can they hear more about you? How can they learn more about working with you? 

Will Laurenson  

Best place is LinkedIn. Just Will Laurenson on LinkedIn. I'm fairly... I'm pretty active and responsive there. I post a lot of content. 

I'll happily chat with people, message people there. I'm trying to be more active on Twitter as well. So that's just @WillLaurenson as well. But yeah, the best place would be LinkedIn. 

Chase Clymer  

Awesome. Will, thank you so much for coming on today and sharing your insights. 

Will Laurenson  

No problem. Thanks, man. 

Chase Clymer  

Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. 

We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

Make sure you head over to honestecommerce.co to check out all the other amazing content that we have. Make sure you subscribe, leave a review

And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.