If you’re in the mobile gaming industry, you’ve probably heard the term “whale” on a regular basis. If your game-designer jargon is rusty, a “whale” is simply a user that spends a lot of money. GameAnalytics has a great deep dive on the topic. Generally, whales are a small portion of the user population but they generate a large portion of revenue. Andy Yang, CEO of PlayHaven stated, “The top 10 percent of players can account for as much as 50 percent of all in-app purchase revenue.”
Taking the concept beyond gaming to digital marketing can be incredibly useful. A whale can be a person that subscribes for a long period of time, purchases numerous products, frequently uses a service, etc. It varies business to business, but whales are simply the most valuable customers. Sounds good right? If customers of disproportionate value exist in your business, you want to capitalize on them.
If you’re new to the concept of “Closed Loop” analytics, Portent’s head of analytics Michael Wiegand did a great talk on this last year at SMX, and this companion blog post does a good job of setting up the basics, the opportunity, and the mechanics.
How to Identify Whales – They’re Big
To maximize whale acquisition, you need to know what you’re looking for. There are lots of ways to go about this but my personal favorite and the method I recommend to most businesses is cohort analysis of retention.
Ideally, you’d have a data analyst on-staff that’s already all over retention who’s created a PowerPivot for you. Otherwise, Andrew Chen has an awesome cohort analysis spreadsheet for the non-nitty gritty data diver. Another great method is segmentation in Google Analytics.
Through either method, your goal is simply to find the characteristics most commonly shared by whales.
Use Amazon’s Fire Phone for example. Customers that purchased Fire Phones make up 1% of the Amazon shoppers population. However, they are 4 times more valuable than a Normal Amazon shopper. Imagine if whales were 10% of the customer base.
Alternatively, you can take a general approach. Step 1 is identifying key metrics that measure customer’s value. Common examples are LTD, LTV, ROAS, and Gross Profit. Step 2 is splitting customers into cohorts and juxtaposing the cohorts by the previously defined metrics. For example, you might choose to create cohorts based on the way in which customers initially converted like conversion median time, incentivized vs non-incentivized, or simply their demographics.
If once you’ve split them out each cohort’s metrics are the same, you may have been too inclusive with the selection criteria, or inadvertently identified metrics that have absolutely no impact on customer. (Hard to do, but it happens occasionally.) Otherwise the cohorts should look different and you can begin to pick out those most valuable customers.
Whale targeting – Not as evil as it sounds
So now you know who the whales are, how do you get more of them? From the paid acquisition side, it’s all about pinpoint targeting.
Two popular channels with considerable targeting specificity and scale are AdWords and Facebook. With AdWords, you can take advantage of Google’s algorithmic approach by uploading a list of known whales and allowing Google to make inferences about their shared characteristics to target similar audiences. Google won’t always tell you how they’re making those connections, but they absolutely work. Facebook Business Manager, by contrast, has awesome, yet creepily specific demographics targeting that you can control yourself, as well as a similar lookalike audience targeting feature.
But don’t stop with the obvious platforms. This approach is so valuable that if you’ve done the work of segmenting your absolute best leads, you can and should look for every opportunity to leverage it in your paid advertising. There’s Apple Search Ads for iOS customers, Millennial Media has direct advertising inventory for AOL customers, Unity Ads is a mobile ad network with both incentivized and non-incentivized video interstitials.
Don’t forget about your “owned” channels either. If you’ve driven an initial conversion from a prospective customer showing strong indications of being a whale, why not use owned communications such as email and on-site interstitials to help them along the path? Optimize these with personalization, special offers or loyalty incentives.
And you can absolutely extend this to “earned” media. Focus SEO efforts and keywords to draw whales to you. Build content that’s proven to engage and retain your best customers. A/B test that content to maximize engagement, and make sure that you’re continuing to test for effectiveness with new cohorts.
Bonus – Improve whale acquisition without getting arrested
You’ve identified your whale cohorts, and you’re about to ratchet up your acquisition advertising spend. Before you drive all that new, incredibly valuable traffic, I recommend building something out like Amplitudes’ pathfinder and fixing points of funnel resistance. These could and should be some of the best prospects possible, so getting a clear picture of what’s working to convert them (and what’s not) will have a positive impact across your entire marketing program.