Podcast 19: Working with Recency Segments in Google Analytics

Everybody, welcome to the Nerd Marketing screen cast, podcast.

Today we are going to dig into recency. I’m gonna show you some really cool, easy ways to assess recency in your Google Analytics account. Why would you wanna do this? Because who knows what customer lifetime value is? Right, raise your hand, who knows what their customer LTV is? I’m betting that not a lot of you are raising your hands right now. And that’s because a lot of you guys are start-ups, and start-ups have no idea what a customer lifetime is. So how can you measure the lifetime value?

For those of you who don’t know your customer lifetime value, which is a critical metric to know. You’re gonna use recency instead because recency predicts lifetime value.

I should pause right now and talk about the setup here, these are my Nerd Marketing screen cast headbands and wristbands. I don’t know if it looks better. Does it look better up? Like this? Or down? I’m gonna keep it up. Alright, so now we’re gonna go into Google Analytics here. Fortunately, you don’t have to stare at my face through this whole screen cast.

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But here’s an eCommerce company I worked with and we’re gonna talk about creating a high recency segment. So this is a segment of your users who are, who are more recent than the total group of your users. So these people have been on your site more recently. And we’re just gonna see how you can use that segment to help you predict which marketing campaigns are really growing your business.

And ultimately, answer that question of where do you wanna put your next marginal marketing dollar. And where you wanna put your effort. So what am I talking about here? Let me just walk you through this, this is looking at a three month timeframe in Google Analytics of all my traffic, all my activity on the site over the, these past three months. That’s the blue line. The orange line will be my high recency segment. And to create this segment, you want to, I’ll show you here. Click this plus, if you don’t have this here but basically edit the segment.

Call it whatever you want, most recent, high recency, sometimes confuses people but these are, you’re gonna wanna see users who have been on your site or purchased from you in the past, you know, X weeks. And X depends really on your business, if you’re a content business, I would recommend looking back only a few days.

If you’re an eCommerce business, I’d look back a month. So here under conditions, on the left-hand side. I want to set a user condition, so filter out only users. And show me those who have a session date, who’ve been on the site on or after the 8th of April. So for me, I’m looking back three weeks.

Show me only those users who’ve been on the site in the last three weeks, that’s what this says. This is not to be confused with this metric here, days since last session. I initially saw this and got all giddy because I thought this meant recency but it doesn’t.

This means the average number of days between the visitor’s last two visits to my site. In other words, if somebody visited a year, and a year and a day ago, their days since last session is one day, right. What I’m looking for is not that. What I am looking for is recency, it’s the number of, it’s a segment who has been on my site recently. So in the past couple days, in the past, in this case, three weeks.

You wanna set this value to whatever makes sense for your business, so again, if you’re an eCommerce company, try 30 days, last 30 days. That creates a recent segment for you.

And you can see here that around the 8th of April, naturally the two lines are gonna merge because all these visits are occurring in the last three weeks, so they are both the most recent and they’re all users. But before the 8th, it goes way down meaning, and the way I read this graph is, these dudes here who are on my site back in March and before in February.

This small number here, the small line means basically that they were, these are people who have come back during the last three weeks also. So you can see that there are dudes way back out in February and March, who have also come onto the site in the last three weeks.

That’s what that means. So again we’ve got all of our traffic and our high recency segment, those who have also visited in the last three weeks. And you know, let’s just go down here under acquisition, all channels, all traffic, channels. We can see some aggregate behavior. This is one thing you’ll probably notice.

Oh wow, under new users, you know, I’m clocking in this high recency segment is about 26% of all the new users I acquired in these three months. 26% of the total. So roughly a quarter.

And you know, they’re punching above their weight. Look, this recent segment has, is not just 26% of the total sessions, it’s actually a little bit more, 33%. So they are visiting the site more often than the average. And whoa! Over here. Whoa Kemosabe. This high recent segment, this high recency segment is giving me 46% of my total revenue.

So this should automatically tell you something, if it doesn’t.

If it doesn’t, I’m gonna tell you what it’s gonna tell you. It’s telling me that this, we’ve identified, better than average users. Better than average visitors. Okay, so these users, although they only, by number, they only are about a quarter of my total new users acquired on the site. They are almost a half of my total revenue. So there’s a little bit of an 80/20 going on here.

This should automatically tell you, hey, recency matters. Recency probably means a better customer. Not only historically, so it’s historically here, it’s looking back over the past three months that these have been better. But where it becomes more powerful is this recent segment is probably gonna be a better segment going forward. What does that mean?

And if my podcast editor could now bring, bring my camera back up, so you can see my face and how passionate I am about what I’m about to say.

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This high recent segment will help you predict which marketing campaigns are gonna be better than other marketing campaigns. Which pieces of content will be better, which ads are gonna be better. And if you’re just starting out from scratch, this is what you use to determine which campaigns are gonna drive the business. Right, it’s very insightful. So okay, let’s go back to the screen cast here. For example, acquisition, all traffic, channels. We can see a couple things in aggregate right now.

So I’ll navigate down here. And I see my page search campaigns. Okay, 28%. New users in the high recency segment versus 33%. And so, it’s driving proportionately more of the average users than my high recency segment. But contrast that to email. Email, 18% versus 15% in the all users. The way I read this is, my email is doing a great job of driving more recent customers or customers who have, sorry, visitors who have a higher average recency. That matters, that should tell you one thing.

Look, it’s doing a better job at driving this 80/20 up here. Email is driving your best visitors. And probably your best visitors going forward. You should emphasize email. At least this website should, this eCommerce retailer should. Now I go down, direct, you know, direct is not driving more. Display ads are really kinda not, not good here because the recency segment is proportionately much smaller than the average.

So I would, if I were this retailer I’d say, “Hey, email’s a workhorse for me. “It’s driving my best visitors and ultimately my “highest LTV customers.

“I should emphasize email.”

Okay, let’s go one step further and drill down from channels to acquisition, all traffic, source medium, I can get a little more color here. And again, I’m comparing the all users segment with the high recency segment. And I see, you know, Google CPC, proportionately the high recency segment is a little bit lower than the all users segment. And I’ll just navigate down here to the ProductRoundup email.

That email is proportionately driving more of the high recent segment than the total. See how the 7% is higher than the 6%. So that means again, this email in particular, this campaign, whatever the ProductRoundup is. Is doing a great job of driving high LTV customers. Creating those high LTV customers, okay. So is my Reactivation email down here, you see it’s 4% versus only 2% of the total.

So we can follow that.

And we’d just looked a little bit here at marketing campaigns. You might also wanna look at specific ads, so I go into AdWords here and I’m, I’m gonna look at specific keywords, so this would be under acquisition, AdWords, and then keywords. And I, again I can see the same thing here. Here are all my keywords along the left-hand side.

You see certain keywords are driving more, driving smaller amounts of recent customers. For example, this one that ends in 02, you know, 3.9% versus 5%. Whereas that ratio is flipped for other ads. For example, this one ending in 35. The keyword I’m targeting here,

I’m actually driving a disproportionately high number of recent visitors. And again, recent visitors correlates, the more recent correlates to a higher expected ultimate lifetime value, higher profits. So this is going to drive more profits for me than this one, and I know that without even having run, gotten one transaction off the ad. Right so, going forward, I would wanna spend more on this and look at why this one is doing well for me. You know, what if you run a content company? Well then, content’s your jam, right? You want content that produces much more recent visitors to your site.

And even if you’re an eCommerce retailer, you want that because that’s gonna predict a more engaged visitor, a more engaged customer. So here I’m going in and I’m looking at my behavior, site content, landing pages.

I’m gonna look at all the landing pages on my site. And very quickly scan down this new users column over the last three months, the homepage, which is this one. Yeah, it created a lot more average users, obviously in the right proportions, which is what I’d expect given the site-wide averages. You know, it’s not doing great on creating a high recent, sorry, a segment with high recency. But then I go down and look at this landing page I created for the sweeps here. Wow, so 5% of the total users are in that high recency segment versus only 3% of the overall.

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And so because that ratio is flipped because the high recency segment is disproportionately higher, coming from this landing page, that’s telling me this landing page is doing a great job at driving recency, at driving people, ultimately, who stick on my site going forward after they’re acquired. That means that it should drive a higher LTV, a higher LTV customer group or customer cohort going forward. So these are just some of the ways that you can use recency to drill down in Google Analytics. In this screen cast I showed you how to create a high recency segment.

I also showed you a couple reports where you can compare that high recency segment with your overall users. And I also showed you why the high recency segment is one you should care about. Because it drives, for most businesses, almost every one I’ve ever seen. It drives your top line. So, it’s predictive, it looks back and tells you what’s worked in the past, and I would encourage all of you to kinda play around with a high recency segment in Google Analytics and see which of your marketing campaigns are actually doing the heavy lifting at driving your profits. That’s Drew Sanocki with the Nerd Marketing podcast.

Thanks for joining, if you go to my site and sign up at nerdmarketing.com, I will send you all of this in a playbook, easy to sort of walk through the tutorial yourself.

Or if you text NERDME, that’s one word, NERDME, all caps to 44 222, it will also send you that same playbook. So thanks for listening and watching, I hope you enjoyed the sweatbands. I’ll talk to you next time.