Category Archives: Analytics Education

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

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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RF(M) Scoring for Offline Service Businesses

Analytics Education, Customer Experience, DataBase Marketing, Driller Q & A, Marketing thru Operations, Measuring Engagement

Jim answers questions from fellow Drillers

Topic Overview

Hi again folks, Jim Novo here.

Yea, I know, so much talk about digital … but does this stuff work for offline businesses? It sure does, in fact, these models were originally developed for offline – way before online was even a thing. But because of the ease of data collection, they tend to work even better online! How about for a natural healing center or an accounting practice? Sure thing! Let’s do the Drillin’ …

Q: I stumbled across your Web site some time ago and have been a regular visitor since.  I find your information very useful.  You will be pleased to know that I purchased your book (Drilling Down) and have just finished going through it.  It all sounds so easy!  Your explanations and examples were wonderful and easy to understand. 

A:   Well, thanks for the kind words.  Would you mind if I used the paragraph above as a testimonial on my web site? 

Q: Now I will attempt to put it all into practice for two businesses – a Natural Healing Centre (massage, natural medicine etc.), and an Accounting practice. 

A: The healing centre is a pretty straight-up situation; should work very well for them just as described in the book.  The accountant, as a service business with a built-in “forced” cycle (the tax year), a little more complex.  More on this below.

Q:   I have 2 questions though, if I can.

A: Sure!  The two questions below are related, so I will answer them as one.  Only one to a customer!  Just kidding…

Q1: Neither business has a Web Site, so a visit to the workplace, usually means a purchase.  I was intending to have R = last visit, and F = visits over past 12 months.  Will this work?

Q2:   Should I put a timeframe on F?  The way I see it, if I don’t, F will continue to grow for each customer as long as they are a customer.  Whereas if I put a timeframe it will give a better picture of behaviour patterns.

Continue reading RF(M) Scoring for Offline Service Businesses →

ROI of Branding

Analytics Education, Customer Experience, DataBase Marketing, Driller Q & A, Measuring Engagement, ,

Jim answers questions from fellow Drillers

Topic Overview

Hi again folks, Jim Novo here.

Speaking of questions, you folks are starting to toss in some real zingers. We’ve moved on from the “How do I calculate Lifetime Value” type of stuff to some real mind benders, and this month’s featured question is a heck of an example. Speaking of questions, I always hide the identities of any organizations or people involved, so don’t be afraid to send them on in. Help yourself, and help others as well!

Branding is a much misunderstood topic and it’s beat to death in the forums and trades. I pretty much run in the other direction when it comes up, because I’m a numbers kind of guy and the branders out there never seem to have any numbers to back up their position. That said, there are ways to numerically quantify the value of branding …

Q. Jim, I send a monthly corporate custom-published magazine (content mix of product and broader lifestyle interests) via email to my house e-mail list – how do I measure ROI on what is a purely brand loyalty vehicle?

A: Thanks for sending in such an easy question – Geesh Louise, doesn’t anybody have easy ones any more? I assume you believe over the longer run, those receiving the magazine will either convert to customers, increase their level of business with you, or bring business to you through referrals.

If you have new business “source tracking” in place (where did the business come from?), it should be fairly easy to determine if the business came from someone who is receiving the magazine, or from someone not on the magazine list. Assuming you are also able to track where the non-magazine business comes from, you can look at expenses versus business generated and find out if the magazine is at least as efficient as other ways of generating business.

Hot links to product offers would be a perfect way to do this, and you can test varying offers by Recency to maximize the profit of different customer segments. Under this scenario, the magazine is not only branding, but selling merchandise. So you don’t have to worry about the “ROI of Branding,” the ROI comes from sales and you can easily quantify the ROI using merchandise profit versus the cost of the magazine.

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