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Last night on March 22nd, 2018 we hosted our 3rd ever Shopify meetup at CodeFellows in downtown Seattle. The following companies and people participated in the event:

• Ambaum – Chad Fisher
• Accumula – Paul Nichols
• Flexe– Tom McMahon
• ShipStation – Charla Session-Reed
• Shopify – Stephen Smyth
• Shopify Plus Merchant Panel
  • TomboyX – Rachel Simmons
  • Click! Design that Fits – John Smersh
  • Paradise Fibers – Kaine Kornegay

Really great job by the speakers! I kicked things off by giving a brief overview of Ambaum along with some slides showing the amazing growth of Shopify. Accumula followed my presentation with a great overview of their platform for uniting instore sales with your ecommerce store. That was followed by Tom McMahon’s presentation for Flexe, if you aren’t thinking of your warehouses and delivery times as a competitive advantage for your business, it’s time you did!

Charla Session-Reed then spoke for ShipStation and had a very interactive logo game that helped draw the audience in for her presentation on ShipStation and their powerful shipping management tools. Finally, Stephen Smyth was kind enough to drive down from Vancouver and provide an update on the latest Shopify developments. There is so much going on with Shopify right now and it’s a great time to be a merchant on their platform, more announcements to come in May 2018 at Shopify Unite!

The final event of the night was a Shopify Plus panel. I moderated the panels and asked the merchants questions about Shopify, their favorite apps and areas where they would love to see new features in the Shopify platform. Rachel Simmons from TomboyX, John Smersh from Click! Design that Fits and Kaine Kornegay from Paradise Fibers all provided insightful advice for our audience. The app recommendations from the panelists were amazing, if you aren’t doing email capture on your site with an app like Wheelio or Privy, you should start!

I would like to thank Code Fellows for allowing us to use their space for our event, it is such an outstanding facility! We had a videographer at the event and will be sharing the slides on our YouTube channel in a couple weeks. If you want to see a past event, you can see all the videos here from our October 2018 event. We are planning another event this Fall and will make sure to get the word out so we can get even more people and companies in the Shopify ecosystem to participate.

Shopify Flow is a brand new Shopify Plus app designed to increase your productivity by automating manual tasks in your Shopify store. Shopify Flow allows you to create automated workflows from “trigger” events that happen every day. If you have ever used If This Then That (IFTT), you will quickly understand the purpose of Shopify Flow and how powerful it can be for streamlining your day to day operations. Flow will help you save time and can free you (and your employees) up to spend time creating new products, exploring partnerships or testing out a new customer acquisition channel.

Sample Workflows

You are only limited by your imagination when it comes to Flow, there are many types of workflows you can create. I recommend first cataloging all the manual tasks you have to perform in your store on a monthly basis. What are the top 3-5 manual tasks that take up your time each month, can you automate the entire task or at least a portion of it? Here are some ideas for workflows:

• Add Tags to customers – loyalty tags for customer spend
• Cancel orders based on Shopify risk level
• Archive orders after fulfillment
• Notify a Sales Rep when a wholesale customer places an order
• Send reorder emails when inventory quantity drops below a certain threshold

Creating Triggers

With Shopify Flow you can build multiple workflows by combining the following concepts:

• Creating Triggers
• Establishing Conditions
• Adding Actions

Triggers are all based on internal events that run with Shopify. Here is the list of trigger events that Shopify Flow allows you to create:

• Customer Triggers
  • Creation of a new customer
• Order Triggers
  • Order creation
  • Order fulfillment
  • Order paid
  • Order payment
  • Order risk analyzed
  • Refund created
• Product Triggers
  • New products added to store
  • Inventory quantity updates

To create your first workflow you will need to select just one of the triggers and then create conditions and actions. No coding is required to utilize Flow, there is an easy to use graphical interface (screenshot below) to set up your workflows.

When Shopify Flow is enabled you will see the first thing you need to do is create a Trigger:

Establishing Conditions

After you have chosen a trigger for your first workflow you will want to develop conditions. Conditions make sure that your actions only run when the conditions you create are met. Think of your conditions as one (or a series) of IF…THEN statements that occur once your trigger event initiates. The order of your conditions matter, so keep in mind that each of the conditions cascade down, the conditions at the start will take precedence (in order) over the conditions at the end of a series.

You can see in the image below there are many conditions you can use (the screen shot only captured a few of them) for your workflows. I chose “Order created” as my trigger and the list of conditions (on the right of the screenshot) available will differ based on the initial trigger event that you select.

You can combine multiple conditions, in my sample workflow my trigger is an order creation and my 2 conditions are order discount code + order discount code starts with November:

Adding Actions

Now that my conditions are set, it’s time to create an action (or even multiple actions) for my workflow. In my example I have an order creation (trigger) and checking for a discount code (condition) + checking to see if the discount code starts with November (condition) and now it’s time for my action. My action is to send an email to our sales team so they can follow up with the customer directly.

You can see that over on the right there is a template for structuring your emails, you can add multiple emails, a subject and a message.

Once you are done creating your workflow you can save it and come back to it later to edit if needed. Also if there are issues with your workflow and it can’t run you will get a validation error from Flow letting you know where you need to make the update. You can also see how many actions and triggers happened in the last 7 days for each of the workflows you create.

Get Started with Flow

If you have any questions about how to use Flow or set it up, drop us a note we would be happy to help!

The calendar has only just turned to August (it’s almost 100 degrees here in Seattle!) but the holiday season is right around the corner. Your peak selling season is fast approaching and it’s time to get geared up for the November and December rush. The best way to prepare for the busy season is to understand the metrics that matter for your store.

Learning your numbers will make you understand what it costs to acquire customers but even more importantly what you earn over the lifetime of each customer. You can then scale your marketing channels by doubling down on the areas that are the most profitable. So without further ado, let’s get started on some of the key metrics.

What are Customer Acquisition Costs?

Do you know your customer metrics down cold? As Kevin O’Leary on Shark Tank often laments, many entrepreneurs don’t know their numbers. If you are trying to run your company by feel and are afraid to dive in to statistics, you are putting your business at risk.

The first data point you need to know is your customer acquisition cost or CAC for short. For your business to flourish new customers have to come to your store and make purchases. Acquiring these new customers has an associated cost and it’s best to think about your CAC by channel:

• Paid Advertising (by source)
• SEO
• Content Marketing
• Email Marketing
• Events and Conferences

I recommend using an Excel spreadsheet to calculate your numbers and pick a time period to evaluate everything (I prefer looking at yearly data to get a large enough sample size).

What is Customer Churn?

Before I founded Ambaum I was doing some freelance work for other agencies. Mark Portrait from Snapshot Group gave me a great quote that I will never forget: “10% of your customers have fired you, they just haven’t told you yet”. This is the reality with all businesses, but instead of accepting an arbitrary number as your churn rate, you need to calculate it.

Here is how you calculate customer churn: Pick a time frame to review (I like to choose a year) and then determine how many customers you had at the beginning (say 1,000) and how many you had at the end of the year. This is easy to calculate for ecommerce companies that sell monthly or yearly subscriptions. If you are like most ecommerce companies you will want to look at a longer time period for customer churn because many customers might skip a couple years between orders. I recommend looking at a 5 year period and if a customer goes the last 3 years without an order consider them dormant and churned.

Average Order Amount

This is an easy metric to calculate, take a time period (1 year is usually fine) and then sum up all your orders and divide by the number of orders and this equals your average order amount. You should calculate this every year and compare year over year numbers to see if you can find a way to increase your average order size. Work on improving your cart and checkout pages by adding related products and exit popovers and you can bump this number 10-20% with minimal effort.

Order Frequency

For Order Frequency I like to pick a longer time interval, I think 5 years is a good time period (similar to the churn measurement). Download a list of all your customers and then determine how many times each customer orders. If you are getting an average order frequency of 2.5X or higher your doing well, many businesses I have reviewed have order frequencies in the 1.25 – 1.75X range.

Customer Lifetime Value

Now that you have determined all your baseline metrics you are ready to ascertain your customer lifetime value (CLV). The customer lifetime value, is the value you get from a customer through the lifetime of their purchases.

There are many, many ways to calculate your CLV, here is a simple one:

(Order Value x Order Frequency) – Customer Acquisition Cost = Customer Lifetime Value

The key here is the first part of the equation (Order Value x Order Frequency) must be larger than your CAC. You will also want to segment this calculation by channel to get the most useful results. Let’s assume we have been advertising by using Google Product Listing Ads for the last year, here are some sample numbers:

(Order Value $60 X Order Frequency 1.5) – $40 CAC = $50 Customer Lifetime Value

Customer Lifetime Value with Margin

To further refine your CLV calculation you may want to apply your gross margin to the formula. Here is how that would look in our sample above:

(Order Value $60 X Order Frequency 1.5 X Gross Margin 70%) – $40 CAC = $23 Customer Lifetime Value

Many people like to add gross margin into the formula to account for the overhead required to sell each product.

Sample Customer Acquisition Strategies

Now that you you know your numbers it’s time to find some new customer acquisition channels! If you happen to be looking for more sales, here are some great suggestions:

• Reach out to a supplier or partner about a co-marketing/co-branding opportunity. For example we host Shopify events in Seattle and are able to leverage the Shopify customer base to get a large group of people together. Shopify loves this as we are marketing for them and it puts us forward as an expert in our industry.
• Resend your email newsletters a 2nd and a 3rd time but just to the population of users that never opened your original email.
• Scope out websites that rank for your product phrases. Identify key acquisition targets and send them an offer to buy their site. If the site is mostly informational you can 301 redirect that site to your main site or install a store on the information site and sell through a new brand.
• Update old content and republish in a different channel. For example if you wrote a great blog post last year but never sent an email out about it, repurpose that post for your next email newsletter.
• Create an affiliate program. If you have a lot of people talking about your product, incentivize them to help sell more by giving them credit for each new sale they refer to your store.
• Answer questions on Quora. If your product vertical has a lot of questions on Quora you can create an account and respond to questions posed by others. This will put you out there as a 3rd party expert and help drive traffic to your store.

There are so many unique things you can do to drive incremental traffic and revenue to your eCommerce store. If you know your numbers and can capitalize on the channels that are the most effective for your brand you can dramatically increase sales.

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 – Nordstroms.com 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.

Last night at CodeFellows, Ambaum hosted a Shopify Seattle Meetup. There were over 60 attendees, many from the greater Seattle area and some people flew in from Ottawa, Austin, Vancouver and even Brazil. Shopify did a great job providing us the support to pull off the event and we are excited to do this again in the near future!

Most every week we hear a story about drone delivery, autonomous vehicles and floating distribution centers. The shipping and logistics market is going through a structural revolution and to operate a successful eCommerce business you need to stay on top of the latest trends. Because of this, we wanted to host an event that would provide real-world examples from people who have been through it. Our event featured speakers from Shopify, Flexe and Shipstation who explained their company’s role in the new shipping and logistics world order.

The event kicked off with speeches from Chad Fisher (Ambaum), Phil Vanstone (Shopify), Matt Yip (Flexe), and Josh Burdick (ShipStation). These speeches were followed by a panel of Shopify Plus merchants who engaged in a lively discussion that covered what it takes to run an ecommerce business and how Shopify Plus has impacted their business.

The 4 Shopify merchant panelists were outstanding and really opened up about their experiences working in the fulfillment space. The audience asked great questions about the panelists favorite tools and apps they used (ShipStation was popular!) in their logistics process.

Overall, we are very happy with the results of the meetup. We really appreciate everyone who attended and want to give a special Thank You! to all of the speakers and panelists. We hope to see you at our next event!

Many people have been foretelling the death of email for years, but it’s not going anywhere and only continues to grow in importance. As a merchant you send your customers order confirmation emails, shipping emails and a few other standard emails that come with Shopify and WooCommerce, but are you really driving revenue with your emails?

Why does Email Matter?

You need to start thinking of every email you send as incremental revenue. It’s hard for many merchants to make this transition as they only see email as a cost for their business and that’s the wrong mentality.

For example let’s say that for every 100 emails you send you earn $5 of additional revenue. Only $5 you say? Well now let’s get into some larger numbers, if you send 1,000 emails a day you are now making an extra $50/day from your store. If you double your customer base in 6 months and start sending 2,000 emails a day, now you’re making an extra $100/day just from your emails.

Different Categories of Emails

There are many types of emails that are relevant at different points in your customer’s life cycle. For example a brand new person on your site might only be interested in learning about what you are selling and we will call that person a lead (or a prospect). Eventually a percentage of those prospects will turn into a customer and some of those customers will end up dormant, this is the life cycle of your customers. Here are different categories of emails:

• Lead Capture Emails (for Prospects)
• Lead Capture Welcome Series Emails
• Order Confirmation and Shipping Emails
• New Customer Welcome Series Emails
• Abandoned Cart Emails
• Win Back Emails
• Promotional Emails
• Segmentation Emails

If you don’t already have these emails setup and customized for your business, it’s important you start making plans to create emails for each of these categories.

Email Services

There are some fantastic email marketing options for both Shopify and WooCommerce. Here are 3 that we recommend:

• Mailchimp (their Mandrill service)
• Klaviyo
• Rare.io

We are very familiar with Mandrill and have installed that on many client sites. It works great and can be an extremely cost effective solution.  Klaviyo is newer to us, but the reporting dashboard they use is really impressive. In addition you can create many custom emails from their dashboard and it works well with Shopify. Rare.io is brand new to us, but it’s received outstanding reviews on the Facebook Shopify Plus Private Facebook Group.