If you are willing to take a hit to sales in favor of boosting profits, I would look carefully at the sources of new customers. Some sources will have higher churn rates than others, and some will be particularly bad. Cut out those sources and your churn rate should fall, increasing profits.

I have recently starting reading your news letter, Though have not read your book, but i am planning to buy one and go through it .

I based out in india and am taking care of product marketing telecom – Prepaid product.

In this market, there is high level of competition resulting in external churn.and also since high commissions are involved results in to internal churn.

We Map churn to validity expiry of the customer, and categorize it in to new customer validity expiry(Customer entering grace first time) and existing customer validity expiry (Customer entering grace 2nd time onwards).

The existing customer validity recharge is at 56% and new customer recharge is at 50%. This level we have reached from a level of 38-40% in last 1 year.

we have a grace period of 7 days after which we can not contact the customers. We are sending SMS and doing telecalling to our customer bases 3 days before validity expiry and in 7 days grace period also.

how can we take the validity recharge further, in both new and existing base

please advise

Sarab

If by engagement you mean “interaction with site during a single visit” then what I’m saying here probably will not have much relevance for you. These behavioral metrics are meant to look at the relationship of a visitor to your site over time, and be predictive of the visitor continuing to be engaged with your site.

Said another way, what’s important at this more strategic level is not that the visitor came to your site and had an engaging visit, but that they came to the site at all, and what their likelihood is to come back – it’s the engagement of the relationship as opposed to the visit.

So for example, you have two campaigns generating visits. You can look at the visits and find Campaign 1 generates a more engaging visit than Campaign 2, based on the level of interaction with various activities. So you judge Campaign 1 better than Campaign 2.

However, just a week later you find the average days since last visit of visitors from Campaign 1 is 5 days, where the average days since last visit of Visitors from Campaign 2 is 2 days. These metrics are predicting that the visitors from Campaign 1, though engaged in the initial visit, are less likely to come back and visit again. 30 days later, you find in fact the prediction was true – only 10% of visitors from Campaign 1 ever came back, whereas 40% of visitors from Campaign 2 keep coming back.

The importance of the distinction between engagement with the visit and engagement with the relationship will depend, of course, on your business model. But in most cases, a site is more optimized when more visitors come back, and the point of the prediction above is you can change what you are doing before you waste of lot of time or effort.

You may find, for example, that days since last visit for new visitors who download a PDF is much higher than days since last visit for new visitors who play a video. That tells me I want to push the video to new visitors over the PDF, and changes should be made to the site.

So it is important to:

1. Monitor the average Recency of segments to detect if they are weakening

2. Communicate to the segments differently, properly reflecting their level of engagement

So, for whatever action you deem important on your site, people highly engaged in it should get one message, people who are starting to drift away should get another message, and people who have detached should get a 3rd message, if you want to optimize the marketing effort.

Speaking to these 3 groups with the same message will diminish the overall response / profitability of the marketing effort, because these 3 groups have different levels of engagement with the site.

i am working with an indian telecon firm and like every one else have gone through kotler. Currently looking at refreshing my skills with some good book of your (Specially with live exampl understanding) need your advise in selecting the book on basin product management( product ,pricing, customer and channel engagement etc)

“Study up”? I suppose so. :-)
I see it as more expanding my horizons. Value Add and the prior reasons I supplied back when.
Ha. Learning Marketing to better Market myself and the skills I can offer such that I can help better Market my clients services to their Marketable clients. Peter Piper Picked…. ;-)

Seriously, for a change, what I am personally finding interesting is the ability to use this gained knowledge in my highly technical core field. THAT was a very unexpected bonus. Little things, and not every 2nd minute, but often enough to be very valuable.

Cheers!
- Steve

To use the example from the post, the control group – which is a random sample of the targeted population – spends $100 per person. The test group – which is the remainder of the target population, which receives the campaign – spends $115.50 over the same time period. What about the $15.50 in incremental spend for test versus control is not a real number for you?

I’m truly interested in your perception of why this result is “not real”. What part of this approach makes you question the result? Or are you saying some version of what Ron said – that anything other than “response” is too difficult to explain (to the CFO)?