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Acquisition, Activation, Retention and Engagement

I attended a local Vistage Technology event yesterday and had a great time listening to Jason Gowans give a presentation on ecommerce personalization and data. Jason is a Vice President of Marketing Analytics & Technology at Nordstrom and he shared strategy as well as tactics on their approach to customer data, segmentation and personalization.

Nordstom’s is unique in that it has a full price brand – and a discount brand, the Nordstrom Rack. A question that came up during the presentation asked if The Rack brand cannibalized sales from the full price brand. Jason said they had done numerous studies and they found that the discount brand is additive to the full price brand, in fact customers that shopped at both spent 25% more on average than a customer that just shopped full price.

Jason referenced a favorite book of his: How Brands Grow, a 2 part book on how advertising really work, what price promotions mean for your brand and how loyalty program impact customer loyalty. Jason did add a caveat that the book isn’t overly favorable towards loyalty programs, but the data they have at Nordstrom shows that loyalty programs are absolutely a success.

My biggest take away from his presentation was the acronym AARE that Nordstrom uses internally when referencing the customer journey. AARE stands for: Acquisition, Activation, Retention and Engagement. I think this acronym is a fantastic way to look at your eCommerce customers and evaluate your customer data at each step.

For example, do you have defined customer acquisition strategies? When you evaluate the following channels: paid search, paid social, email marketing, content marketing, influencer marketing do you know which ones perform the best for you? How well do you know your numbers?

For activation, how many days on average does it take for your customer to make a 2nd purchase? Nordstrom found that customers that make another purchase in the first 90 days had a markedly higher lifetime value than customers that took longer to make their next buy (online or in store). What are you doing to incentivize your customers to make that 2nd purchase?

Retention is a critical and overlooked component of the customer lifecycle. What are you doing to keep your customers interested? Are you informing them about your new products? Have you created win back emails to offer discounts for customers that haven’t bought from your store in a long time?

How are your customers engaging with your brand? Are you using CRM (customer relationship management) software to manage all the touch points with your customers? You can get really sophisticated and track click stream data for visitors to your site and find out the products and pages on your site that resonate the most.

Personalization and segmentation is an exciting topic, there is so much data available to store owners it can almost be overwhelming. I find all the data interesting, it’s your store and your opportunity to give your customers a fantastic experience with your brand.

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