Introduction
In today’s data-driven world, Shopify store owners need to leverage analytics to stay ahead of the competition. Data can help you understand your customers, track your progress, and make informed decisions about your business. One powerful way to harness data analytics is through customer segmentation. In this blog post, we’ll discuss how using By the Numbers can help you segment your customers and improve your store’s performance.
Identifying Your Most Valuable Customers with By the Numbers
One of the most important things you can do to improve your Shopify store’s performance is to identify your most valuable customers. By analyzing the Customer Lifetime Value (CLV or LTV) of your customers, you can identify high-performing products and understand customer behavior. A powerful analytics app like By the Numbers can help you calculate LTV and segment customers based on their LTV percentile.
By the Numbers makes it easy to create custom segments using the “LTV percentile” filter, which can be set to “Greater” or “Less than” a specific value. This allows you to analyze high-performing or low-performing customer segments and tailor your marketing strategies accordingly.
Does Shopify Show LTV?
While Shopify doesn’t explicitly show LTV, it provides all the tools you need to calculate it yourself or use an app like By the Numbers to obtain it. The most common formula for LTV is:
LTV = AOV x Average customer lifespan x Average purchase frequency
However, a more complex formula that yields better results is:
LTV = ( Current Customer Value ) + ( Future Estimated Customer Value )
More specifically:
LTV = ( Total Sales ) + ( (Average Order Value) * (Median Number of Orders) * (Average Tenure – Current Tenure) )
Calculating LTV for Your Customers the Easy Way
By the Numbers employs sophisticated algorithms and advanced data analysis techniques to provide you with a comprehensive understanding of your customers’ Lifetime Value (LTV). By obtaining LTV insights, you gain the ability to evaluate the total value of a customer cohort, which is essential for optimizing marketing ROI and making strategic decisions about customer acquisition and retention.
By the Numbers calculates LTV based on a combination of the current value of your customers and their estimated future value. This data-driven approach allows you to make more informed decisions about marketing expenditures, pricing products or services, product development, and optimizing retention marketing efforts. To learn more about how to access and interpret LTV in By the Numbers, please refer to this help article: Customer Lifetime Value in By the Numbers.
The Benefits of Using By the Numbers for LTV Analysis
Leveraging the advanced LTV analysis provided by By the Numbers comes with numerous benefits, including:
- Precision targeting of marketing campaigns: By understanding the LTV of different customer segments, you can tailor your marketing messages and strategies to maximize engagement and profitability.
- Efficient allocation of marketing budget: Knowing the LTV of various customer cohorts enables you to optimize your marketing budget by focusing on the most valuable segments and avoiding overspending on less profitable ones.
- Informed pricing strategies: LTV analysis helps you set sustainable and profitable pricing for your products or services, ensuring long-term business success.
- Data-driven product development decisions: By understanding which customer segments have the highest LTV, you can make strategic decisions about which products or features to develop next to cater to their needs.
- Optimizing customer retention efforts: LTV insights allow you to prioritize customer retention activities for the most valuable segments, ensuring the highest ROI on your retention marketing initiatives.
Additionally, you can use customer segmentation data to personalize marketing campaigns and engage with your most valuable customers. By the Numbers allows you to export an email list of customers within a specific segment, enabling you to send targeted emails or create personalized marketing campaigns using platforms like Klaviyo.
Connecting Your Segments with Klaviyo
By the Numbers seamlessly integrates with Klaviyo, a popular email marketing platform designed for e-commerce. This integration allows you to sync your customer segments between By the Numbers and Klaviyo, enabling you to create highly targeted email campaigns tailored to specific customer groups. This integration can help you save time and ensure that your marketing campaigns are reaching the right people.
To connect By the Numbers segments with Klaviyo, you’ll need to create a By the Numbers account and a Klaviyo account. Once you’ve created both accounts, you can connect your By the Numbers account to your Klaviyo account by following the instructions in this By the Numbers help article: Klaviyo Integration.
Conclusion
Data analytics and customer segmentation are powerful tools that can help you improve your Shopify store’s performance. By using By the Numbers to segment your customers and integrate with platforms like Klaviyo, you can optimize your marketing efforts, increase sales, and grow your business. Harness the power of data analytics and tools like By the Numbers to unlock the full potential of your Shopify store.
