Lapin House
Customer Lifetime Value (CLV)
Retention Rate
Revenue Growth with -40% Paid Ads Budget
More specifically:
Meta Ads:
- ROAS: Increased from 6.2 to 10.4 (+68%)
- Cost/Acquisition: Reduced from €17 to €11 (-35%)
- Revenue from RFM Campaigns: 279 purchases, 167 from Lookalike Audiences.
Google Ads:
- Revenue Growth: +8% despite a 47.6% budget reduction.
- ROAS: Improved by 105%, from 3.94 to 8.08.
- RFM Groups: Used in PMax and Display Remarketing campaigns with tailored messaging and creatives.
Overall Performance:
- Revenue Growth: +23% with a -40% Paid Ads Budget.
- CLV: Increased from €58.12 to €105.41 (+81%).
- Retention Rate: Jumped from 10% to 20% (+100%).
- AOV: Rose from €103.47 to €110.88 (+7.16%).
- Purchase Frequency: Increased from 1.12 to 1.26 (+12.5%).
The Case
Background: Lapin House is a curated destination for luxury children’s fashion, offering premium brands and designer collections.
With exclusive selections for babies and kids, Lapin combines elegance, quality and the latest trends in kidswear, being active in both Greece and international markets.
Challenges Faced
Objectives:
- Customer Lifetime Value (CLV): +50% YoY
- Retention Rate: +20% YoY
- Revenue: Maintain the same revenue with -40% Paid Ads Budget
Challenges:
- The main challenge was maintaining the same revenue while reducing the Paid Ads Budget by 40% during the period from November 1, 2023, to April 30, 2024 (6 months) compared to the same period last year.
- Implementation of RFM Segmentation to categorize customers based on Revenue per Customer and Purchase Frequency using our Customer Data Platform. The goal was to create an RFM Score Mapping for each customer.
- Increase in Customer Lifetime Value (CLV) from €58 to €87 and a +20% boost in Retention Rate (from 10% to 12%). We also aimed to raise the Average Order Value (AOV) from €103.5 to €105 and the Purchase Frequency from 1.12 to 1.2.
- Increase in Customer Acquisition Cost (CAC) across all e-commerce channels in the Greek market.
The Strategy
- RFM Analysis: Using four years of data, we found 45.06% of revenue comes from 19% of returning customers. RFM Segmentation mapped customers by Revenue and Purchase Frequency.
- CLV Campaigns: Created campaigns based on RFM Segmentation to boost Customer Lifetime Value.
- Advanced Optimization: Used tools like Google Ads scripts, Portfolio Bid Strategy, and Enhanced Conversions for better tracking and efficiency.
- Lookalike Audiences: Built Google Ads and Meta Ads audiences using RFM insights to target new revenue sources.
Real-Time Monitoring: Enabled real-time transaction tracking with Google Apps Script for immediate ad optimizations.
RFM Group Etymology:
Lovers: Active customers with a satisfactory number or value of orders.
Ex-Lovers: Former loyal customers who have stopped purchasing.
New Passion: Customers who placed their second order with a high value.
About to Dump You: Relatively inactive, with the last order placed six months ago.
Platonic Friend: Active customers with a moderate number and value of orders.
Execution
- RFM Analysis: Using four years of data, we found 45.06% of revenue comes from 19% of returning customers, while 54.94% is from new customers. We mapped customers into RFM Groups:
- Lovers: €488 Revenue/Customer
- Ex Lovers: €285 Revenue/Customer
- About to Dump You VIP: €476 Revenue/Customer
- New Passion: €137 Revenue/Customer
- About to Dump You: €99 Revenue/Customer
- Platonic Friend: €35 Revenue/Customer
- RFM Campaigns:
- Lovers/Ex-Lovers: Personalized campaigns via Meta & Google Ads targeting 10,000 high-value customers with loyalty coupons.
- About to Dump You Groups: Applied Net Promoter Score (NPS) to gather feedback and launched tailored reactivation campaigns.
- New Passion/Platonic Friend: Instagram and TikTok conversion campaigns for 2nd and 3rd purchases.
- Lookalike Audiences: Built audiences based on Lovers/Ex-Lovers for Google & Meta Ads.
- Campaign Optimization:
- Tools: Google Ads scripts, Portfolio Bid Strategies, Enhanced Conversions, and Consent Mode 2.0.
- Real-Time Data: Monitored purchases using Google Apps Script for immediate ad optimization.
