Category Archives: Analytical Culture

When Do Former Best Customers Become a Lost Cause?

Analytical Culture, Analytics Education, DataBase Marketing, Driller Q & A, Lab Store, Marketing thru Operations, Measuring Engagement

Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)

Topic Overview

Hi again folks, Jim Novo here.

This time, a Real World question from a practitioner who wants to prove to management they have to spend less to make more money. Spend less to make more? How could that be, and what kind of person would want to go down this road? A real world Driller, of course …

Q: I’m a “long time listener, first time caller,” and a big fan of your site and your approach to data-driven marketing.  I also have two copies of your book – one was not enough.

A: Well, thanks for your kind words. I love the talk radio reference, that is so funny.  Never though about it like that, but makes perfect sense!  Glad to know I’m actually helping people with the book too.

Q: I have a question relating to some work I am doing now with our best customers that other users of your site may have.

I work for a medium sized DTC company selling skincare products (high margin) via space ads, direct mail, and online. Our best customer “Gold Club” has about 8000 members at the moment, although members are being promoted and demoted all the time.  

According to my initial analysis, if a member does not purchase a product for more than 60 days, the chances are that they are defecting. I would like to attempt to bring them back with an offer, and leave those that don’t reply for at least 6 months for a deeply discounted “kickstart” offer (although the logistics of sending out very small mailings are a pain.) 

A: This is a common and logical approach, particularly for “renewable products.”  You don’t say what the product is, but if it is “typical” skincare product, it has a sales cycle very tightly tied to product use.  In this case, Latency usually makes more sense to use than Recency as the primary trigger for a campaign.

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Measuring dis-Engagement

Analytical Culture, DataBase Marketing, Marketing thru Operations, Measuring Engagement

Engagement Matters – Until it Ends.  Right?

Here’s something that continues to puzzle me about all the efforts around measuring Engagement and using these results as a business metric or model of online behavior.

If Engagement is so important to evaluate – and it can be, depending on how you define it – then doesn’t the termination of Engagement also have to be important?  If you desire to create Engagement, shouldn’t you also care about why / how it fails or ends? And if the end is important, what about how long Engagement lasts as a “quality” metric?

Seems logical the end of Engagement might matter.  Let’s call it dis-Engagement.  Simple concept really: of the visitors / customers that are Engaged today (however you define Engagement), what percent of them are still Engaged a week later?  3 months or 1 year later?

Whatever dis-Engagement metric you decide to use, a standard measurement would create an even playing field for evaluating the quality of Engagement you create.  From there, a business could invest in approaches producing the most durable outcome.

Since Engagement is almost always defined as an interaction of some kind, tracking dis-Engagement could be standardized using metrics rooted in human behavior.  Recency is one of the best metrics for an idea like this because it’s universal, easy to understand, and can be mapped across sources like products and campaigns.  Recency is also predictive; it provides comparative likelihoods, e.g. this segment is likely more engaged than that one.

Plus, using Recency would align online customer measurement with offline tools and practices.  This could have implications for ideas like defining “current channel”, e.g. customer is now engaged with this channel, has dis-engaged from that channel.

Taking this path brings up a couple of other related ideas, in line with the discussion around customer journey and entwined with the whole customer experience movement.

Peak Engagement

Let’s say there is Engagement, and because we’re now measuring dis-Engagement, we see Engagement end.  So, is Engagement a one-shot state of being, meaning the value should be measured as such?  Or, does longer lasting Engagement have value, and if so, what about when it ends? Shouldn’t we want to find the cause of dis-Engagement?

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Marketing Responsible for Customer Experience?

Analytical Culture, Customer Experience, DataBase Marketing, Digital Analytics, Marketing thru Operations

 The Data

According to this survey, Marketers are not now really “responsible”  for the customer experience (whatever responsible means in this context) but will be over the next 3 years.  If it was just the vendor (Marketo) trumpeting this idea, I’d be more skeptical.  But this vendor hired the Intelligence Unit from The Economist organization to do this work and the report includes the actual questions, meaning you can check for bias.  Population is 478 CMO’s and senior marketing executives worldwide, seems decent / not cherry-picked.

So I will cut the vendor some slack.   Questions though, right?  Just what is customer experience, in particular for the purposes of success measurement?  How does it fit with related ideas like Customer Journey / LifeCycle and Engagement?  Certainly if the above is a significant macro trend we ought to sort this all out first?  And of course, putting some analytical rigor (structure, process, and definitions?) in place to support the effort ;)

The Story

I know a lot of marketing people who have either had this authority for years (multi-channel database marketing) or are moving in this direction, so the results make sense to me.  To be clear(er), “experience” for these people reaches all the way back from UX into fulfillment and service.  So when they talk about experience, they are talking visitor and customer; not just navigation and landing pages, but also shipping times and return rates.

Perhaps increased access to customer data is revealing the significant impact customer experience in this larger sense has on long-term customer value?  This idea, coupled with increased focus on accountability (also covered in the survey) could be driving this trend.

Worth the read, only 20 pages long with a lot of charts.  Here’s 4 snippets to hook you:

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