Do you know what your users are worth? Correctly identify your audience and metrics to calculate the value of your users in today’s article in our column, “User Profiling Pills.”
Users, consumers, visitors or more simply people, as it would be more correct to call them. What we expect is that these people will come to our site, inquire about our products, perhaps frequent our stores, and eventually possibly buy what we have to offer them. What should interest us even more is that these people will then come back and buy from us and possibly speak well of the experience they had, either directly or through our products.
“The purpose of business is to create customers and keep them.”
Peter Ferdinand Drucker
The value of your users
Segmenting one’s audience is the first fundamental step of any marketing personalization project, and knowing our potential customers is one of the main cornerstones of any marketing project. Anonymous visitors, registered users, customers–have we ever wondered how much they are worth to us? Not in abstract terms, but in concrete, numerical terms.
- Do we know how many of our visitors are already customers, and for what amounts?
- Do we know how many are first-time users and what tastes these users manifest?
- Do we know how many of these are leads that we can re-contact once they abandon our site?
It is critical to understand how one’s overall audience is composed so that we can decline different strategies that will allow us to move these users forward in their purchasing funnel and, once they are turned into customers, ensure that we provide them with communications so relevant that they will be convinced to return to us as soon as possible.
Beyond Pareto
It is critical to know how populous and how much each of these segments is worth because in a world of finite resources, as alas those of our companies are, we need to focus first and foremost on the segments that in projection can bring us the most results. As much as technologies make it possible to automate this process, it is critical, both for tactical and especially strategic purposes, to understand how the 80 percent of visitors who bring us 20 percent of revenue are composed. The famous Pareto principle can no longer suffice us, or rather, it must be taken to a new level, detailing as much as possible the tastes, preferences customs and habits of our 20 percent.
“It can be done.”
Gene Wilder
Although the level of detail we can reach is really very high, it is always important to be able to understand how much each individual user segment is worth to us. This will allow us to avoid studying a fabulous marketing campaign that targets only three people, who may moreover have a very low probability of buying from us.
Metrics
Metrics to always keep in mind when evaluating a segment are:
- Total value
- Number of users belonging to the segment
- AOV (Avarage Order Value)
- Number of orders placed
- Projection of these values over time
In order to carry out this type of analysis, it is essential not only to rely on history but to carry out an activity of projecting this value into the future, and this is whereartificial intelligence plays a key role, in the study of user behavior for the purpose of predicting its value over time. Thanks to this analysis you can then focus first and foremost on the core segments, studying dedicated experiences for them that will further increase their value over time.
