Category Archives: Marketing Research

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? →

How to Define “Frequency” Metric in B2B

Analytics Education, Customer Experience, 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.

If you’re not really clear on what you’re trying to accomplish, designing a successful customer retention program can be a bit of a struggle. Hey, maybe you just don’t know what to look for / what needs fixing / where to start? Gotcha, fellow Driller, the current value / potential value matrix is a great place to start – for you, and perhaps more importantly, your boss / the CFO. Ready to try on some focus? Let’s get to the Drillin’ …

Q:  I am totally getting into your book.  I am up through chapter 17 and have completed my RF Scoring.  My company [my day job] is a custom software company.  It was difficult for me to get my head around the units thing yet, so I just used the “M” as you put it.

A:  Thanks for the kind words, I’m glad it’s working for you!

Q:  In term of companies, we are probably like the B2B example you used in Chapter 8.  So, I could not get my head around the units deal yet because I have not studied the data enough to see if there is a progression.  I think I would need to look at it year to year; but should I stop now and do it first?

A:  Well, customer analysis always starts with an objective…what are you trying to look at / prove / do?  It’s hard to comment without knowing the business problem or issue you are facing…and without any information on how your business really works.  I can rarely find that out from looking at a web site…

“Units” would probably be the total number of “jobs” you have completed for a client.  It also could be the total number of hours the client has used, if that is more logical for the business.  It’s hard to tell without a bit more information.  The point of the “units” variable is to look at the Frequency of commitment, so use whatever makes sense for the business.

Q:  So, my question is, should I go back and do what you suggest in chapter 9 – setting up a look at Latency by customer to get the progression before I continue with Chapter 18.

Continue reading How to Define “Frequency” Metric in B2B →

New RFM: Managing Customer Value Like an Investment Portfolio

Analytical Culture, Customer Experience, DataBase Marketing, Digital Analytics, Driller Q & A, Marketing / Tech Interface, 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.

Do you manage your own investments in the stock market? If you do, you probably have used technical indicators like moving average of prices or up / down volume balances or similar to make investment decisions. And if so, guess what? This approach to investment portfolio management is very similar to the management of customer value, it’s really all about the metrics and the source of changes to those metrics. We can so some Drilling’ if you like …

Q:  I have been enjoying reading your tutorials.  I am interested in the financial planning market particularly and have developed an application for segmentation of market and clients by attitudinal factors.  Having provided my clients (advisers) with the tools to turn the qualitative data into quantitative measures and slice and dice their client base appropriately, the next question from them is “How do I use this and what to do with the information?.”

A:  You betcha, that’s the hard part.  A common question when people get into analysis; the “what do I do with this” should come first so the metrics produce an actionable outcome…

Q:  I would be interested in providing links on my web space to access your papers and content. Do you have any content or case study examples for marketing and client servicing for the financial planning industry?

A:  Well, I don’t think I have a page on my site specifically on this area, but let’s create one, OK?  I’ll include this example on my blog and it will go up on my site.

Characteristics and attitudes are interesting but frequently not particularly actionable because they are not “behaviors.”  When people speak of “doing something,” they are typically thinking of increasing or decreasing a behavior of the customer.  If you are trying to figure out what to do about a behavior, you really need to use behavioral metrics, which will tell you “who” to do something to and “when” you should do it for best results.

Continue reading New RFM: Managing Customer Value Like an Investment Portfolio →