Category Archives: Analytical Culture

Creating Effective Retention Campaigns

Analytical Culture, Analytics Education, Customer Experience, DataBase Marketing, Driller Q & A, 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.

Have you ever offered a $100 off coupon to a new retail customer? I have. And guess what? There was no response, even though the average order size across all customers was $38!

So how is this kind of situation possible? Some products attract customers that are only interested in that product, and they are not going to buy again – period. Knowing this, the question for you: is this the kind of product you want to constantly feature / promote?

Guess that depends on the Drillin’, eh? Let’s get to it …

Creating Effective Retention Campaigns

Q:  Hi Jim,

Love your newsletters.  Do you have a tip jar I can use to donate to the cause?

A:  Hmmm…maybe I ought to start one…nah.  It all works out in the end!

Q:  Take a look at this chart I did of cumulative customer purchase Recency (actual numbers changed but the relationships are same): See below for explanation **

** Jim’s Note: How to read the chart:

“In the past 3 months, (“3” on horizontal axis), 30% of our customers have made a purchase (“30%” on vertical axis).  In the past 7 months, almost 40% of our customers have made a purchase.  Because the last category is “last purchase 36 months ago or longer”, the chart includes all customers – 100%.  

Since each customer can have only 1 “most Recent” purchase, each customer is on the chart only once.  Therefore, if 40% of customers have made a purchase in the past 7 months, 60% have not made a purchase.

Q:  What does this pattern (the % of total by group) tell one generally about the attrition in the business model?  It’s interesting, I’ve never looked at this kind of diagram before.  For our business (wine retailer with “club” option), I generally consider anyone with a transaction in the past 12 months to still be a customer.

Continue reading Creating Effective Retention Campaigns →

Customer Retention in a High Churn Business Model

Analytical Culture, Customer Experience, DataBase Marketing, Driller Q & A, 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.

Yea, sometimes customer retention is a very tough gig; some businesses are simply not likely to encourage repeat purchase. But you can still try, right? Or perhaps focus your efforts on where the real power to affect customer value is for this type of business – acquisition and onboarding.

Let’s Drill Down …

Q:  I bought your book a few months ago and I thought it was great.

A:  Thanks for your support and kind words!

Q:  I did what I could using your book, but my mind is going in circles and I need help. Unfortunately I can’t pay big bucks and am hoping that the “case” will be of enough interest to allow you to help me out at less than you could charge to bigger companies.

A:  Perhaps! For example, I am always open to interesting projects if I can use them to publish a case study (names changed to protect the innocent)… most large companies do not want customer retention data revealed and it is tough to get case studies out there…

Q:  What I do: My company sells prepaid calling cards on the web.  I have been working at the company for 2 years and 4 months now.  Consumers purchase the service to place international calls at reduced rates from their landlines and cell phones.  They have no obligation to re-purchase.  They can buy any increment between $10 to $100 at a time. They can recharge their accounts at any time.

A:  Yes…

Q:  What I’ve found so far:

They seem fall into two main groups ­ those that buy only once, and those that buy more than once, but then each of these sub-groups has lots of sub-segments and it is confusing.  Some last a week, others last 2.4 years.

A:  This is typical…

Q:  My goals: 

Continue reading Customer Retention in a High Churn Business Model →

How Long is a Customer LifeTime?

Analytical Culture, DataBase Marketing, Driller Q & A, Marketing Research, 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.

There’s always two questions about the topic of Lifetime Value – how do you quanitify value, and how long is / how do you measure / decide what a Lifetime is? For now we’ll leave the value question unanswered, because a lot of that depends on company culture and what question you are trying to answer. Plus, it depends on how you measuree a Lifetime.

So let’s do the Lifetime thing first, shall we? To the Drillin’…

Q:  First of all thanks for an excellent web site – I often visit it to learn and / or get inspiration in my work.

A:  Thanks for the kind words!

Q:  Anyway, I work in a telco retention department and I’m trying to calculate a true and fair value for customer life time answering the question : “How long do we on average have a customer?”.

A:  A both noble and useful pursuit!

Q:  I have data on when customers signed up and when they left (or of course whether they are still here). My first problem is whether to include both lost and existing customers in the calculation.  If you only include the customers you lost you are only able to answer the question for those.  If you include existing customers you don’t know what life time to use for them.

A:  Well, yes, that’s correct.  But you’re really trying to accomplish several things at the same time, so you can break the analysis into different parts and then apply some business logic to get your answers. 

Continue reading How Long is a Customer LifeTime? →