Podcast 16: How to Create Killer, Profit-Maximizing Segments in Google Analytics

Three metrics that will show you who your best customers are, where they are coming from, and ultimately how to grow your top and bottom line. Recency, frequency, monetary — RFM RESOURCE: Prefer to read instead of listen? Click Here to download the text transcribe for this episode. Subscribe: iTunes | Stitcher In this episode, I talk through how conduct some essential segmentation using Google Analytics. I say essential because this is it -- RFM -- the mack-daddy of database marketing that dates back to the early catalog age. These three metrics will show you who your best customers are, where they are coming from, and ultimately how to grow your top and bottom line. RFM and GA – Learn It, Embrace It, Profit From It. Screencast   Highlights 00:29 – Intro to Google Analytics segments – Why Drew uses them, and why you should too 00:54 – "Whale segments" 01:31 – RFM – A key trio of metrics that will help you discover your best customers 02:36 – Setting an RFM threshold that's specific to your business 02:48 – What an RFM segment looks like in Google Analytics 04:32 – How to create a new segment 04:46 – The metrics that are most predictive of future value 06:05 – Working with segment in Google Analytics after you've created it 06:30 – How to see what % of total revenue was generated by your segment 07:06 – What to do with this information – actionable insights Links / Resources The Nerd Marketing newsletter (sign up to unlock freebies) RFM Google Analytics Transcript Prefer to read rather than listen to the podcast episode? No problem, you'll find a text transcribe below, and you can also download it for later. → Read the Transcript Okay, everybody. Today, I'm going to talk about Google Analytics segments. You've all probably wondered at one point or another, "What are these things up here, this blue circle? This orange circle? Why would I want to use them? Who cares? What is Google Analytics?" You've probably wondered all those things. That's what I'm going to talk about today.Google Analytic segments, first. Why would you want to use them? Really, the question is why would you want to segment your users, and I think there's many reasons to that. You might want to compare your email traffic to your pay traffic, or users from one part of the country to another part of the country. Want to save this transcribe to read later? CLICK HERE to download it as a PDF. Why I segment, is because I want to get a growth. The way to do that, is first identify your most powerful, your best customers out there. I call them your whale segments. These are the ones that are driving your business. Once you've identified them, grow that segment. Any business has good and bad customers. It's not uncommon to see that 20% of your customers drive 80% of your revenue. I call that 20% to your whale segment. We're going to use Google Analytics to start to investigate who those whales are, and how we can acquire more of them. The first question you're probably asking is, "How do I identify those best customers?" I'm going to give you three metrics. RFM they're called, that you can use to start to poke around and start to figure out who those best customers are. There are three behavioral metrics, and they were piling by the catalog industry in the '50's. If you want to read up on RFM, here's a great Wikipedia article. Really, in summary, recency means how recently was somebody on your site. A customer who was on your site today, or who bought from you today is more valuable than one who bought from you two years ago. Seems intuitive enough. Frequency is the total number of interactions a visitor or customer has had. Somebody who has purchased from you 10 times is probably more valuable to you than someone who's purchased from you once. Monetary value is just the total dollar amount that somebody has spent with your retailer or your site. That's RFM. Really,