Drew Sanocki

Drew Sanocki is a founding partner at Empire Growth Group, ecommerce growth advisor & blogger. Drew’s marketing automation and customer segmentation rules have driven over $100 million in transactions in 2015.

Drew founded his first company, Design Public, soon after receiving his M.B.A. from Stanford, and grew it into one of the premier online design retailers. He sold the company to private investors in 2011, after operating it for eight profitable years. He then became an operating partner at a private equity fund — helping funds to buy, grow, and sell digital businesses.

Expert session

Tactic that has had the biggest impact on Drew’s success

Customer segmentation

Result if you follow the steps in Drew’s session

Ignite profits and grow your business

Full session with video, notes, audio and discussion inside EHQ Club. Learn more

Expert session snapshot

Transcript

Yeah, I talked about whales and minnows. And really what that is, is a way to explain the 80/20 rule as it applies to a business. And any retailer, any online business typically has good customers and bad customers.

So you’ve got at least, at retail, you’ve got good customers who buy a lot and buy frequently and buy large amounts and they don’t return product. And then you got a bad customer who takes up a lot of customer support time and will buy in return or only buys once and never again.

And if you look at the data, it’s really not uncommon to find that 80% of the revenue and 80% of the profits are driven by 20% of your customers. So that’s where I started calling them whales and minnows.

That the whales are your whale customers, the one who really are driving the business. The minnows are everybody else and your job as a marketer, data driven marketers should be first to identify that whale segment and then to grow it.

And I know Liam, you and I talked about showing some data on the screen. And I’m happy to go in and just sort of illustrate the concept. If you want me to do that. Yeah, let’s do it. Alright, let’s jump into the screen share here. And try the, I guess the trans pacific screen share, right? So can you see my screen?

Yeah, this is from a talk, I gave it e commerce fuel live, which was a ecommerce conference here in the States. And, you know, I stripped out the name of the retailer in question, but this was about a month of activity.

And what I really wanted to see here was, you know, do they have their own whale segments? So I went into Google Analytics, and I defined a whale segment. In this case, as any customer who has purchased more than once, so 2,3,4 times. You look back over this time period in question. And you see that the whales really just make up a little over 1% of the total sessions on the site.

And you scroll over to the right, you see that that 1% of the sessions on the site drove 40 to 43% of the revenue. So, really, this isn’t, I mean, this is from an e commerce company. But it’s not uncommon if you run a content business, that, you know, 5-10 percent of your readers drive something like 80% of your page views or your time on site.

If you know, I just encourage you to go into Google Analytics and play around with segments like this, and you can really see this in effect.

Can you see this other slide with the whale in the middle? Great. So this is another retailer similar example.

You know, they did that analysis from Google Analytics and they’ve actually gone back and stripped out the two groups here, you see the whale has a first purchase, have 13,000 US dollars, total spend of $26,000. And they’re, you know, six transactions per year, they’re buying across all these different merchandising categories. And the minnow spends $37 on one swim suit.