2. Confidential 2
Problem
Traffic, Clicks and Sales metrics provide limited
insight into channel and customer profitability
‘Stacked’ marketing costs and contribution
margins are missing from the equation.
In-store customer and promotional insights
aren’t tied-into the digital world
No easy way exists to view the most profitable
channels and customers
3. Confidential 3
Solution
A platform where marketers can quickly
gain channel and customer insights to:
Increase
Profitability
Identify the most
profitable channels and
customers
Increase Share
of Wallet
Retain and replicate the
best customers and
channels
Optimize Spend
Understand stacked
digital, loyalty and
promotional costs
4. Confidential 4
It starts with understanding the…
Contribution Margin
In Cart Sales
Product Margin
Gross Margin
- Remove COGS
- Remove Cancelled & Returned Margins
+ Add Variable Marketing Spend
+ Payments @ x%
Maturity
6. The eCom Data Landscape Is Vast
• Segment customer base using
static data
Member Acquisition & RetentionMember Brand and Member Engagement
Media, Member & Product
Profitability
• Segment customer base using
product / event data.
• Segment customer base using
CPA/LTV data.
• Segment customer base using
dynamic data.
Inventory
COGS
Product/Brand
Margin
Campaign Tracking/
Response
Orders
Acquisition Channel
Browse
Add to Cart
Events
LTV
Media Channel
Channel CPA
Customer Segment
Fraud
Geography
Member / Tombstone
Category Preferences
Loyalty
Demographic
Social
Shipping Timelines Promotions/Offers
Postal Code / Geo
Visit
Cancels & Returns
Engagement
Predictive Models
Repeat
Product Reviews
Membership Type
Acquisition Date
Channel CPO
Affiliate Costs
eCom
ESP CSR OMS Google Other Calc Affiliates
Pricing / %age off
Web
Analytic
s
Actual COGS
GL
Payment
A/B Test
Product
Recommendation Credits
7. Confidential 7
What are my stacked costs to acquire &
retain customers?
Understand the TRUE
Stacked Cost Per Order
(CPO) – including Promos,
Loyalty, Affiliate, SEM, etc..
8. Confidential 8
Channel Sales $ Margin $
Last Click
Costs
Loyalty &
Rewards
Costs
Commissions
Costs
Profitability
$1000 $800 ($450) ($200) ($50) 0.05
$500 $300 ($300) ($100) ($200) -0.6
$100 $80 ($0) ($15) ($0) 0.6
What are my most profitable channels?
CRM
SEM/Affiliate
Organic & Direct
9. Confidential 9
Who are my most profitable customers?
Category Sales $
Gross
Margin $
Last Click
Costs
Loyalty &
Rewards
Costs
Promos
Costs
Profitabilit
y Ratio
$1000 $800 ($450) ($200) ($50) 0.05
$500 $300 ($300) ($100) ($200) -0.6
$100 $80 ($0) ($15) ($0) 0.6
1 2 3 4+
RetentionLTP
60%
20%
15%
5%
Life Time Contribution Margin
and Retention Scores for
every customer
What are the top 10% of
profitable customers buying?
How often do my
most/least profitable
customers repeat?
10. Confidential 10
Methodology
VisualizationData Collection and Analysis
Risk Appetite
Business Constraints
Regulatory Drivers
Industry Practices
Technology Trends
Economic and
Environment Forecast
Geographical
Considerations
Acquisition Strategy
Retention Strategy
Segmentation and
Personalization
Media and Offer Spend
Optimization
Customer Life Time Value
KPIs
Channel Profitability
Brand Profitability
Category Profitability
Customer Analysis
Cost Analysis
Organization Analysis
P&L
Business Metrics
OUTPUTSINPUTS
Order Analysis
12. Confidential 12
Sample Life Time Contribution Margin
Analysis
Year 1 Year 2
Higher Repetition &
More CM+ Customers
CM Climbing Up
Acquiring Profitable Customers from
the start
Large # of CM –ve
Acquisitions
Pattern of negative
CM, repeating
customers
Small % of CM +ve
customers
• Customer Retention Scores and Total Contribution Margin Values are plotted and grouped
• % increase Contribution Margin Positive Customers
17. Confidential 17
About
As a founding partner at SHOP.CA, Christian helped disrupt the Canadian eCommerce industry by
helping build Canada's first and largest online multi-merchant marketplace. Christian helped conceive
and build SHOP.CA's vision, mission, operating model, unique intellectual property, and the team that
helped secure over $72MM CAD in funding. As part of the Executive Leadership Team, Christian is
currently responsible for shaping SHOP.CA’s growth strategy by using data, analytics and insights to
anticipate and capitalize on market opportunities.
Prior to SHOP.CA, Christian was a Management Consultant with Deloitte and a Senior Product
Manager with Cyberplex and Janna Systems, which was acquired by Siebel for $1.4B CAD. Christian’s
academic background includes a Bachelor of Mathematics degree from the University of Waterloo and
he is PMP, ITIL and TOGAF certified.
