2021

Customer Lifecycle Benchmark

The Customer Lifecycle Benchmark analyzes the interactions between brands and their customers across the lifecycle to identify the sources of growth and engagement.  The Benchmark includes the activity of more than 600 million customers, spending more than $3 billion online.

43%

Brand Growth

51%

First-Time Buyer Growth

$46.40

Active Customer Value

37%

Email-driven Revenue

8x

Behavioral Email Revenue Factor

Executive Summary

A wave of new shoppers pushed digital to new heights in 2020. Brands achieved massive ecommerce growth of 43%, led by a 38% spike in active customers. More specifically, first-time buyers ushered in digital’s rapid maturation, spending 51% more year-over-year and accounting for nearly half of all buyers during the Q2 and Q4 COVID-influenced shopping peaks.

   

During this period dominated by so many ‘new’ shoppers, it was the ‘old’ reliable channel that stood out: email marketing revenue soared 53% in Q4 over the past year, to deliver 22% of all ecommerce revenue. And relevance was at the center of that growth, as behavioral campaigns drove 37% of all email revenue, an increase of 69% YoY.

This inaugural edition of the Customer Lifecycle Benchmark shares the true stories behind customer engagement and brand growth. For additional commentary, read the complementary blog post.

Brand Growth

The rush of new customers carried digital to its record level in 2020. Brands engaged 38% more active customers in Q4, year-over-year (“YoY”), while customer value expanded by 4%. Taken together, the increase in active customers and value expansion produced the year’s 43% growth.

Two very clear peaks, each with unique shopping behavior, characterized digital’s record year. First, a 26% increase in active shoppers – the “COVID-cohort”– flooded into digital and drove revenue up 7% above 2019 holiday levels. And between Q2 and Q4, customer value expanded 22%, as the COVID-cohort assimilated into digital.

Active Customer Value Fell, then Rose in 2020

The crowd of new shoppers visiting, browsing, and buying captured so much industry attention throughout 2020, and rightfully so. Hidden inside this growth is the change in value of those shoppers.
  • As the number of active customers skyrocketed in Q2, the value per customer fell to its lowest level, with the three-month value of active customers at $10.51. 
  • The cohort grew fluent in digital, and the impact was clear and positive: the three-month active customer value ticked up slightly in Q3 and soared in Q4 to $12.97, a 4% lift over Q4 2019, and up 22% from the Q2 low.

Customer Lifecycle

The quest to truly know your customers – who’s loyal, who’s lurking and who’s likely to buy – requires visibility to customer behavior. These Customer Lifecycle Benchmark segments take the pulse of shopper behavior, including their amount of revenue contribution and content consumption.

Here are three must-know segments that spotlight critical points along your customers’ lifecycle.

Note: these segments are not mutually exclusive, so some customers – like buyers – appear in multiple segments, and thus the total consumption will not equal 100%.
  • Active customers are those shoppers who are actively engaging with a brand over the past 30-day period – visiting, opening email, and making purchases. This group’s continued engagement is critical to overall brand health growth.
  • This small but mighty group of shoppers accounts for less than 3% of all your customers, yet contributed two-thirds of all revenue over the past year. They are by far the most surgical group of shoppers, adding to cart at nearly 5 times the overall cart rate.
  • Anonymous shoppers, in total, represent 75% of all shoppers, but also requires further distinction. Inside this group lies an important – and significant – group of repeat visitors. These repeat-visit anonymous shoppers consume one-third of all your product detail pageviews.

Customer Engagement

Over the course of 2020, the average monthly opener rate was 35%, with a high of 38% coinciding with the Q2 COVID peak. Openers provide brands with the most foundational opportunity to engage: a chance to earn a click or a tap that leads to a visit.

An even stronger indicator of engagement is the share of recipients that clicked (or tapped) an email. The average monthly clicker rate was 8.2%, reaching a high point of 9.4% that occurred – you guessed it – during Q2.

Delivering Relevance

Relevance delivers. While representing a small slice (6.6%) of overall email sends, behavioral campaigns provided outsized, and unmatched performance, contributing 37% of all email-driven revenue in 2020. Behavioral moments include ‘reactive relevance’ through Abandon Carts, Browse and Site Search events, as well as post-purchase bounce-backs, and even proactive winback campaigns. Customers continue to respond to these hyper-relevant campaigns, proving that the ‘when’ of send is far more effective than the ‘how often.’

To no one’s surprise, behavioral campaigns outran their promotional counterparts at every key indicator, from open through conversion. In fact, behavioral messages contributed 8 times the revenue per send.

Methodology

The Customer Lifecycle Benchmark is a set of aggregated and anonymized insights of ecommerce brands and retailers. Strict aggregation measures are employed to ensure customer anonymity. These measures include requirements on comparison set size, diversity, and consistency, in order to present credible and reliable information that is insulated from concentration risk, and can not be reverse-engineered to identify any specific customer or marketplace.

To qualify for inclusion in the analysis set, a brand must have customer activity throughout the entire analysis period, in this case, Q4 2019 through Q4 2020. Additional data hygiene factors are applied to ensure accurate metric calculation.

The Customer Lifecycle Benchmark is not directly indicative of the operational performance of Zaius.

Download the Full Report

The Customer Lifecycle Benchmark analyzes the interactions between brands and their customers across the lifecycle to identify the sources of growth and engagement.  The Benchmark includes the activity of more than 600 million customers, spending more than $3 billion online.