Oct 26, 2023
Use Lifetimely’s Amazon LTV Report to drive profit for your Amazon store.
The decision to expand and sell on Amazon is a tried and tested growth strategy for many Shopify native brands. However the path to maintain overall profitability across two sales channels is not as straightforward. Of the many challenges that merchants face, deciding on marketing spend and strategy is a significant one.
How do your Amazon customers differ from your Shopify ones? Are your Amazon marketing efforts bearing fruit?
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Evaluating your efforts is the best way to ensure that you realize the return on investment you need from your Amazon marketing strategy. This analysis can help you better understand;
- Where to reach your audience
- If your ads are resonating with your target customers
- What products have the highest repurchase rate on Amazon
Measuring Customer Lifetime Value can help you with this analysis. Unlike traditional KPIs like sales revenue or click-through rates, LTV looks beyond the immediate impact of outreach techniques, and sheds light on how today’s marketing efforts could affect the bottom line in the long run.
Customer Lifetime ValueLifetime value metrics evaluate how much a customer is worth to your business over time.
Acquiring new leads can be up to 25 times more expensive than retaining existing customers. Understanding LTV metrics will help your brand attract and retain customers who keep coming back.
Understanding Lifeitmely’s Amazon LTV Report
Cohort analysis is a method of studying a customer base by first separating it into groups, and then tracking how each group (or “cohort”) engages with a business over time.
Lifetimely’s Lifetime Value Report (or “LTV report”) applies this method by grouping your customers into cohorts based on when they placed their first order with your store.
For each cohort, it calculates how much an average customer is initially worth to your business, and then it continues to update this figure as repeat customers make additional purchases over time. Ultimately, this allows you to estimate the lifetime value of your past and present customers.
The LTV report helps brands better understand how and why different subsets of customers are more valuable than others, and give you the data to make important decisions such as:
- How much can I afford to spend to acquire new customers?
- Which of my marketing initiatives should I abandon, and which should I scale up?
- Which product categories should I expand to maximize long-term profits?
Use the Amazon Lifetime Value Report to make data-driven decisions.
LTV Report: Use cases for Amazon eCommerce stores
You can leverage your Amazon Lifetime Value Report and cohort analysis for a range of business use cases including;
- Planning acquisition budgets
In order to scale your store, you must be able to confidently balance how much you can afford to spend to acquire customers. Using cohort analysis you can understand how much revenue a new customer will generate over time.
If you are not profitable on the first purchase, you can use the LTV report to determine your payback period – the length of time it takes until you break even on your customer acquisition cost (CAC).
- Monitoring customer behavior
Let’s say you have doubled your Amazon marketing spend to acquire an additional 300 customers in the past few months. You can use your Lifetime Value Report to monitor how these customers behave as compared to previous time periods or as compared to customers acquired by other channels or on other platforms (Shopify). This exercise will also help you validate key assumptions based on changes to your marketing campaigns or initiatives designed to increase revenue.
- Identifying valuable products
Many D2C employ a hero product strategy. Using cohort analysis you can identify which product categories and individual items provide the most long-term value- making these ideal “hero products”.
- Identifying valuable customer cohorts
Lifetimely’s LTV report can help you analyze your customer database to understand which countries provide the most repurchases, so you can focus marketing efforts on the most valuable regions.
The LTV report also let’s you compare your Amazon customers to your store customers and evaluate how to distribute your marketing budget between the two, depending on how each cohort converts.
Lifetimely’s Amazon integration is available as an add on to any existing Lifetimley plan for just $75/ month.
In addition to the LTV report, the integration automates P&L reporting across multiple stores and platforms, gives you access to complete historical data for your Amazon stores, and integrates with all major ads platforms including Google and Meta to give you accurate PPC reporting.
So what are you waiting for? So ditch those aggravating Amazon spreadsheets today and never look back.
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