When it comes to winning new customers, the success of your business growth depends to a large extent on the target group you select and the cities you are trying to reach it in.
Definitions
Before you dive into data analysis, let's ensure that we are on the same page. You can identify your top cities per country based on the following metrics:
City | City to where the order was shipped |
Country | Country associated with the shipping city |
Customers | Number of customers located in the city |
LTV | Average, current Lifetime Value of customers located in the city calculated by Sum of Net Revenue - COGS |
AOV | Average Order Value of all orders shipped to the city |
Product Return Rate | Percentage of returned products that were shipped to the city; exclusively available for custom integrations, |
Orders | Number of orders shipped to the city |
Gross Revenue | Gross Revenue from all orders shipped to the city |
Net Revenue | Net Revenue from all orders shipped to the city |
Finally, you can analyze your worldwide top cities, or you can narrow it down by country by choosing one from the Countries dropdown:
Use Cases
If you want to make sure that you spend your time and money on the most impactful cities it is important that you are aware of their performance.
- Bundle your marketing activities on the best-performing cities to maximize the growth of your business
- Identify cities where you already have a large base of regular customers and evaluate the potential for offline marketing activities, such as pop-up stores
- Recalibrate and reassess all cities which do not deliver measurable value
- Identify the cities that are developing positively or worst case negatively over time
- Check whether a certain segment, e.g. your Top Customers, are mostly based in a certain city
Let's see how to work with the Cities report:
Knowing that customer lifetime value can vary by as much as 82% by city, start putting your money where your high-quality customers are: optimize the allocation of your customer acquisition costs (CACs) and prioritize customers in certain cities; since they will generate a higher profit margin for you in the future.
1. Take a look at your average LTV by City
2. Export the data as a CSV and choose the cities with the highest Customer numbers, so it is a significant data basis
3. Create Clusters based on their LTVs (top cities, average cities, and worst cities) and adjust their CACs according to the LTV differences
4. Now you know which audiences to scale first, and you can multiply the quality and revenue of your customers with the same advertising budget!
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