Differences in Buyer Journey between High- and Low-Value Customers of E-Commerce Business

Lukás Kakalejcík,Martin Vejacka,Jozef Bucko

doi:10.4067/s0718-18762019000200105

Lukás Kakalejcík, Martin Vejacka + Show 1 more

Open Access

https://doi.org/10.4067/s0718-18762019000200105

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Abstract

The knowledge of high-value customers provides the possibility to make decisions ensuring profitability of the company. By analyzing and optimizing a buyer's journey, companies can better understand their customers and optimize marketing costs in the way that will generate a higher return on investment. The primary objective of this paper is to define the current state of multichannel attribution and, based on the literature, study and analyze the data regarding the buyer's journey of high- and low-value customers of selected e-commerce business. To accomplish the main objective of our study, we retrieved and analyzed top conversion paths from Google Merchandise Store, the e-commerce website selling goods branded by Google, with the use of Markov chains and heuristic models. A difference between high- and low-value customers regarding the acquisition by marketing channels before the purchase was found. Moreover, it was found that high-value customers' journeys consist of more interactions compared to those of low-value customers.

Highlights

96% of website visitors are not ready to purchase a product during their first website visit (Site 4)
Based on the primary objective of the paper and based on the above-mentioned necessity to determine the differences between low- and high-value customers discussed by Sterne [27], as well as claims stated by Barker [5], we developed the following working hypothesis: H1: There is a difference in the buyer’s journey taken by high- and low-value customers in terms of using the particular marketing channels when conducting product research and purchase
The primary objective of this paper was to define the current state of multichannel attribution and, based on the literature, study and analyze the data regarding the buyer’s journey of high- and low-value customers of selected e-commerce business

Summary

Introduction

96% of website visitors are not ready to purchase a product during their first website visit (Site 4). Anderl et al [1] and the following study by Anderl et al [3] use a higher order Markov chain model to attribute the value of the marketing channels. Note that the objective of this study is not to propose the new attribution model We selected this method based on the following criteria: The export of the buyers’ journeys (consisting of marketing channels that customers used to come to the website before the purchase) is among the standard features of Google Analytics Free. This ensures that our analysis might be executed broadly by a company of any size and budget. Another reason for separating the behavior of low- and high-value customers is based on the primary goal of business – to generate a profit – and spending marketing budget on customers with the highest possible value for the company

Markov Chain and its Use for Attribution Modeling

Objectives and Methods

Analysis of the Buyers’ Journeys

Findings

Conclusions