Monthly Archives: January 2009

Visitor Retention Mapping

The following is from the January 2009 Drilling Down Newsletter.  Got a question about Customer Measurement, Management, Valuation, Retention, Loyalty, Defection?  Just ask your question.  Also, feel free to leave a comment. 

Want to see the answers to previous questions?  The pre-blog newsletter archives are here.

Q: The research folks in my company are trying to convince me that measuring sessions and Page Views per Session is more effective than using Recency and Sessions, as you advocate in your book, for a retention metric.

A: For a content site, the Page Views / Session measure can be used as a measure of visitor quality and appropriate marketing to the right audience – a customer acquisition idea – not retention.  And it really needs to be broken out by Source – the average has little actionable meaning.  You want to know the Visitor Sources, and then look at this metric by Source.  This is still Frequency though  – what about visitors who don’t come back?

Q: I am having some difficulty in making a decision regarding this. They want to give me a matrix with Page Views per Session on the Y axis and Total Sessions on the X axis as the “customer retention map”.

Continue reading Visitor Retention Mapping

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SEO for Cable TV

Riffing off a great post by George on marketing measurement, here’s a very specific example of how Marketers have to think differently when they are dealing with interactive environments, from my days at HSN.

We spent about 5 years and $100 million dollars trying to prove offline media would drive new customer acquisition and sales.  We tried everything.  Billboards.  TV.  Radio.  Newspapers.  TV Guides – local, national, and cable.  Flyers,  Shoppers, FSI’s.  Spot cable.  All of it, in just about every combination you can think of.

Each time we did these tests, we set up control markets and looked for Incremental sales in the media markets versus those with no media, based on revenue per household.  We found incremental sales in just about every case. 

The problem was this: even though the media created incremental sales, these sales were never enough to pay back the media on a net basis, meaning (roughly) (Gross Margin – Campaign Cost) – Variable Overhead was negative – even when you took into account the LifeTime Value of a new customer.  Even when you looked at the test markets versus control 3 months, 6 months, and 12 months later, for those who might be thinking about “Brand” or “Awareness”.

If you’re thinking perhaps the campaigns were weak or light on exposure, I offer you this: when the campaigns included coupons, the redemptions were absolutely huge.  That’s good, right?

Continue reading SEO for Cable TV

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From Audience to the Individual

Prompted by Avinash’s post on Recency (if this topic interests you, there is much more here), I have to return to an idea that keeps running through my head:

Why do so many Marketing people fail to understand the basic underlying dynamics of Interactive / Online Marketing?  Relative to the Comments on Avinash’s post, why would Marketers not be interested in the Recency metric?  If the Marketers are not aware of it, why would Analysts not push it to them, show them the power of it?

The more I think about this issue, as I have been for several years now, the more confident I become the answer is quite simple: Nobody ever taught most Marketers how to communicate properly to Individuals.  Their training, their experiences, their peers, their conferences, all of it is about Marketing to Audiences.  The nameless, faceless hordes represented by GRP’s.

They simply don’t know how to do it any other way. 

And as a result, neither does whoever they report to. 

Which means any Marketing Accountability or Productivity Metrics, if they exist, are about Audiences, not Individuals.

So, all the Marketers care about are Audiences, these one-off blips on the screen, as opposed to Individuals, who carry longer-term, Potential Value to the Company that can be measured with Recency.

That’s why they allow the blasting of e-mails, they buy untargeted impressions.  They repeat what they know from offline, online.

Sad, really.  A one-way thought process in a two-way world.

What can we do about it? 

I’m going to talk about these concepts with a few Marketers during the AMA’s Digital Marketing Lab at M.planet next week.

I’ll let you know how it goes…

Update: I should probably skip Marketing, go straight to the CFO.

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Good Time for Marketing (Re)Alignment

What’s Marketing Alignment?  Search Google for this phrase and you will find a lot of discussion on aligning Marketing with Sales, the old B2B chestnut.  I’m not going in that direction.

I’m talking about making sure all the Operational interfaces to the customer have Marketing input, that the messaging and interactions with customers reflect the Marketing Strategy.

Marketing Alignment is making sure Marketing as a discipline is always facilitating Demand Fulfillment across the entire enterprise.  If Management is looking for a “big idea” during these times of change, a new way to approach the business as opposed to simply cutting budgets, Marketing Alignment just might be the ticket.

This Marketing Alignment issue can be a particularly important for growth companies.  When you started out, it was all about the customer – when there was less than 10 of them.  Now that you have 1,000 or 100,000 customers, you have probably created processes, procedures, and goals that unintentionally create barriers to closing new customers and fostering repeat business.

Here’s the basic argument for the Marketing Alignment idea:

Continue reading Good Time for Marketing (Re)Alignment

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Relationship Marketing Economics

Just opened up a carton from a manufacturer we use in the Lab Store.  Every unit inside looks like this:

Bad nozzle

Here’s your challenge:

Would anybody in your business recognize this as a problem?  Or would they just shrug and transfer the item to the picking racks?

In other words, finding this, would you or an employee:

1.  Ship to the customer as is, let the customer figure it out

2.  Cut the nozzle off so customer doesn’t have to even think about it, doesn’t have to send you e-mail or call asking about it

Your answer to this question depends on:

1.  How customer-centric you / your org really is

2.  How much you understand about the financials of your business

Continue reading Relationship Marketing Economics

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Lab Store: Year End Analysis

Some stats from the Lab Store (Background) for the year:

Processed 10,172 orders, up 3% from last year, despite a logistical problem in the business model we did not have control over (breeding of animals).  Fixed that, so should not be an issue going forward.  Merchandise Return Rate of .3% on dollars, which is quite low.

Returns cost money to process, imply negative Social feedback, and increase customer defection by creating poor experience.  We do everything we can up front to keep returns and other negative experiences from happening in the first place by screening products and actually taking action on customer feedback and analysis.  Often, we modify packaging, create our own instructions, or assemble products we know people will have trouble with.  More on this idea here: Marketing through Operations and Panic Pack!.

We retained between 75% – 87% of our best buyers depending on what time frame you use, and further improvement in these stats is pending test results.  More on this idea here: Frequent Buyer Analysis.

Continue reading Lab Store: Year End Analysis

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