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151. Improve Retention & Increase Customer Lifetime Value Using Machine Learning with Shanif Dhanani of Apteo

151. Improve Retention & Increase Customer Lifetime Value Using Machine Learning with Shanif Dhanani of Apteo

Note: It seems as if Apteo is no longer available. The concepts discussed are still valuable and can be implemented with smart segmenting.

How much easier would it be to market your business if you had a bunch of little minions digging through your data + telling you what to do? Okay, maybe not minions because I don't think they were actually that smart. Robots instead? But not the scary terminator kind… cute little tiny ones like this 🤖

Guess what? There's an app for that! It's called Apteo + we're talking all about it on today's podcast. And honestly, even if you don't plan on investing in ANOTHER app right now, Shanif (I'm obsessed with his name) has tips, tricks + insights that you can apply even without his tool. ⚡️

Over the last few months, you've heard marketers talk more and more about the importance of first-party data with internet privacy issues in the loss of tracking. It's becoming more difficult to understand customer behavior on the internet.

But that first-party data is data that you own, which means you have full access to it. And it makes it a lot easier to make assumptions about your customers. But there's another technology that's rising to the forefront to help us better market our products. And even Google analytics is incorporating it into GA four to help fill in the data tracking gaps it's called AI and machine learning.

Have you heard of it? And yet even you as a small business owner can take advantage of it. Today's guest is Shanif co-founder and CEO of Apteo. A platform that helps e-commerce brands personalize their marketing campaigns by predicting what their customers will buy next, based on their data, a self-proclaimed data geek Shanif was a data scientist and software engineer at Twitter before striking out on his own to build Apteo.

Now he's obsessed with helping eCommerce brands acquire new customers, improve retention and increase customer lifetime value. In this episode, Shanif breaks down what machine learning actually is. And no, it's not the rise of the Terminator and how you can leverage the data. You already have to better predict what your customer is gonna do next.

And once you realize how cool this tool actually is, and you realize that you need it in your life, make sure you stay until the end of the episode because he's got a special offer for listeners of the eCommerce Badassery Podcast


What is Data Science, Machine Learning + A.I.?

When it comes down to it, data science is just pattern finding really at its core. It's finding patterns in some numbers and maybe some text and images to do something that you really care about. If you break it down, that’s what it does.

Now you can do this in lots of different ways. In eCommerce, we basically use data science and AI to take what data you have, maybe the products that people are visiting on your website or what products people purchased in the past, and just find patterns to see how you can grow more sales in the future.

Maybe you have a whole bunch of information about your customers and you put it through an AI tool. And that AI tool says, Hey, look, people in this zip code of this gender, this product are likely to be your best customers. 

It’s really just math. And then you can use that math to basically do better things in the future. 

The Power of Machine Learning in a Cookie-Less World

AI sounds a little scary, especially just in the age of internet privacy. It feels like you have these little machines spying on you, and that’s not really what it is. And actually, as we move into a cookie list world, as they call it, you're gonna see more and more machine learning, filling in a lot of these gaps for marketers and businesses.

That's one of the main goals of GA4. Google will be using machine learning to fill in the gaps that this lack of tracking on the internet is giving marketers. And there's no reason, no matter how small or big your business is that you shouldn't be using it because it’s magic

Also, machine learning makes data mining and the insights you can gain from that accessible to everyone. What used to take rooms full of people, Excel spreadsheets, and tons of time can now be done by a technology platform in a matter of minutes.

What Does Apteo Do for eCommerce Businesses?

What we're trying to do is help people make higher-converting marketing campaigns using the data they already have. Helping eCommerce business owners better understand their customers and pull out insights that they can take action on. 

So how does Apteo actually help with that? By finding segments of customers who are likely to respond to a particular offer or message. And then it shows you what products you should be highlighting for those people because the data tells us, that’s what they’re most likely to buy.

The goal of Apteo is to help marketers increase customer retention, find new customers, and increase customer lifetime value, in a lot less time. We’re segmenting your customers for you, so you don’t have to spend hours figuring out what messages to send to what customers. 

What Are Some of the Most Profitable Segments Apteo Can Identify?

We love segments here at Apteo, and using AI and data science, we try to break them down into a few different categories. We focus on RFM segments, recency, frequency, and monetization. 

Shoppers Who Don’t Need Discounts vs. Those That Do

So many eCommerce companies are sending out promotions and discounts to their entire email list. And while these can lead to more sales, in many cases you end up giving away money that you really didn’t need to in order to get the sale. 

So for instance, the tool will identify a segment of customers that are your Big Spenders. These are people who likely don’t need a discount to make a purchase vs. another segment that we identify are those customers who probably do need a discount. 

Big Spenders

Not only is the big spender segment important in terms of avoiding giving out too many discounts, but this is also the perfect group of customers to use with your social media ads and create look-a-like audiences. 

We can sync these audiences directly to your Facebook Ads account and keep it updated with new customers as they qualify for this segment to expand your lookalike audience reach. 

Product Cross-Sell Opportunities

We also use our technology to find groups of people who are likely to respond to a cross-sell for a particular product. Because Apteo knows what you are selling in your store and what your customers are buying, it’s easy for the tool to find patterns like customers who buy product A, and also buy product B. So the tool can tell you hey, go send an email to this group of people and feature product B because based on their historical purchases they’re likely to buy that too. 

This seems pretty basic, and it is. And if you’re a smaller story with 10 or so products, it’s pretty easy for you to figure this out on your own. But, if you’re like some of our clients who have 17,000 products and tens of thousands of customers, having the tool do that for you is going to be a lot more successful, accurate, and time efficient. 

Replenishment Segments

If you've got a product that's being purchased every so often, but maybe some customers are out there and they're overdue for making a purchase.

We'll find that automatically. And we'll put those groups of customers into a. Say, Hey, these groups of people are due for another coffee update or vitamins or whatever it is so that you don't have to set up sort of these rule-based flows. Like, oh, if somebody didn't buy in 90 days send 'em an email. Well, 90 days might work for somebody, but not for another person. 

At Risk Customers

We’re also able to identify customers who haven’t purchased from you in a while and let you know it’s probably time to create a marketing campaign, especially for them. 

What Data Does Apteo Use to Create Segments?

Apteo pulls all the data from your eCommerce platform, like Shopify, Big Commerce, WooCommerce, and Magento. And it also integrates with the tools you already use like Klaviyo. And it’s a two-way sync between those platforms, so when you integrate Apteo and Klaviyo, as customers take actions in your emails, Apteo will also know what those customers are responding to in your marketing to better inform the A.I. inside of Apteo. 

What Do We Do With These Segments After Apteo Creates Them?

So what we try to do is help you use the marketing tools that you're already using. We integrate with tools like Klaviyo, SMS platforms, Facebook, and even Google. Once we create the segments, you can then import them into your tool to take action on them. 

We basically enhance your existing tools with new features or new functionality so that you, as a marketer, don't have to spend time doing all of these manual tasks or sifting through data.

Using Apteo Segments with Email Marketing

For instance, with Klaviyo and email marketing, you can create a campaign email and use one of our product widgets to show product recommendations that are unique to the individual. 

Our team can help you create those campaigns for you. We've got internal designers and marketers, and the next iteration of our product will actually automatically set up campaigns for you with suggested headlines of copy so that your job as a marketer gets even easier.

Using Apteo Segments for Facebook Ads

This is something that works really well for our customers. Take your biggest spenders and your most frequent purchases and send them over to Facebook as an ad audience. Then you create a look-a-like audience and target the new customer acquisition campaigns.

Why Do I Need Apteo if I Already Have Klaviyo or Another Email Platform with Segmentation?

The biggest difference is that instead of you as the marketer having to go in and create the segments yourself, we do it automatically for you.

So yes, you can go into a tool like Klaviyo and create the segments we’re talking about. But that’s exactly it, you have to create them. You have to know what to look for, what conditions to use and you actually have to do it. 

In most cases, marketers are so overworked and busy, that they don’t always know what to do next. With Apteo, we’re giving you hints, the recommendations, and laying out your next steps. We do our best to automate the marketing process for you. Email so often is the first marketing activity on the chopping block even though it generates the most revenue and is the most profitable. 

Hopefully, with a tool like Apteo, the process is a lot faster and easier. A lot of our customers do what we call like set it and forget it campaigns. They just schedule a campaign every two weeks. They use our widget to show products and then they're making consistent revenue. So there are ways to make it easier, but you do have to set it up to start with.

What eCommerce Business is Apteo Good For?

Because Apteo works by finding patterns in data, it needs to have enough data to develop those insights. In general, you need at least 2000 orders and 10 products to get a solid set of insights. You also need a decent frequency of purchase. If your customer is only shopping with you once every 5 years because you sell big furniture pieces or appliances, it’s going to be harder to see value in the tool. 

What Are Some Mistakes You See People Making When Using Apteo?

Either you’re using it too much, or not enough. If you’ve got lots of data segments it’s possible you’re going to see an overlap of customers in those segments. So sometimes people import every segment we create and start sending emails to every single one of them and then customers are getting bombarded with emails and different offers. 

So you still need a content calendar and a strategy. We also recommend you pick and choose who you’re going to focus on at any given time. So maybe one month you focus on those big spenders, the next month you focus on your at-risk customers, and then you focus on the cross-sell. Or you at least prioritize what the most important messages are and approach it that way. 

On the flip side, are those who use the product once when they first sign up, and then something happens in their business and they completely forget to take advantage of the technology. 

What are The Most Successful eCommerce Businesses Using Apteo Doing?

There are two main features they’re using consistently and that’s using their big spenders to create look-a-like audiences on Facebook and they’re using our product recommendations to send out campaigns every 2 weeks or so. 

We also have a lot of agencies that use us to create better-performing emails. They’re diving a little deeper into product journeys and analytics. 

So the folks who are really doing well with us are the folks who set it up once, twice, maybe look at the analytics once every couple of weeks and then set up the automation and then forget it and go on with their lives, but see their revenue come in.

What’s On the Roadmap for Apteo? What New Features Can We Expect?

We have a lot of things on the roadmap and in research right now. Our main goal is to take what we know about your customers, and what they’re doing on your site and use it a bit more intelligently than what most of the tools out there are doing today. Doing more of the work, so you as the marketer don’t need to think through all the possible variables, conditions, etc. 

Automatic Email Campaign Creation

The first thing I kind of touched base on it earlier was really closing the gap between having a segment and knowing what to do with it. Taking a segment and creating and understanding campaigns.

So like you might have this group of customers who are likely to buy this product. What we'll try to do is let you click a button and automatically set up the email campaigns in Klaviyo, and then simultaneously the Facebook campaigns in Facebook to run this particular product for these customers. Do it for two days, three days, or two weeks, and have the campaign start and stop automatically based on our AI so that we can start to optimize and recommend really closing the gap.

On-Site Personalization

The second thing is sort of a tried and true product. A lot of people out there might be using this already, but it's onsite personalization. And instead of the business having to manually set up all the rules and the variations to show the best possible products to each visitor, our goal is to use A.I. to determine that for you. So instead of having a static list of products on the home page, we would determine what products to show based on what they’re most likely to buy. 

On-Site Cart Abandonment Optimization

One area is onsite cart abandonment optimization. Predicting who's likely to abandon their cart and then offering them either a popup or an offer before they leave the site, rather than when their mouse is about to leave.

Get an Extended Free Trial of Apteo + A Discount

Shanif has a special offer for eCommerce Badassery listeners. Enjoy an extended free trial + 10% off your subscription to Apteo with this link! You’ll also qualify for their 90-day ROI guarantee. If you use Apteo for 90 days but don’t make your money back, they’ll refund your platform fee and pay you an additional $500! There’s literally no risk to joining. 

Listen to the Episode

Episodes Mentioned

How to Use Klaviyo Dynamic Content for a Truly Personalized Experience

The Power of Quizzes + Zero Party Data

iOS14 for Facebook Ads + What You Need to Know About it

Connect with Shanif & Apteo

Apteo Website



Hey, I'm Jessica

I support scrappy female entrepreneurs with actionable steps & strategies to grow and scale the traffic, sales & profit in their eCommerce businesses. 

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About Our Audience

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