Why do we want to do a 2-Step acquisition?Â Because the conversion rate is going to be higher per dollar of media spend.Â It’s the equivalent in Online of the difference between buying single words and buying phrases in PPC.Â The former generates a lot of traffic, but the latter gets higher conversion and is much more Productive.
In other words,Â a 2-stepÂ customer comes into the Relationship with higher Potential Value andÂ higher Momentum.Â And that’s important, because it means you spend less in Marketing over the longer term as the customer will, on average, keep interacting for a longer time.
If you’re not sure what that all means, perhaps it will become clearer as we dissect Desirability (Satisfaction), the last component of the AIDAS model.Â Here’s the core issue:
Offline, we know people come back to Brands or Businesses “by themselves” because they like the Product or Experience.Â We also do Advertising to these same people, as well asÂ those less likely to come back or not likely to come back at all.
So how do we know what percent ofÂ the resulting activity is due to peopleÂ just coming back because they enjoy the business, and how much is due to the Advertising?Â How do you calculate ROI?
A Very difficult task.Â Even if you could identify the “likelies”, you generally can’t exclude them from offline media.Â So this whole issue of “likelihood to come back” offline has been completely ignored, becauseÂ there’s no way to act on it.
Online, and in much of Offline Database Marketing, we don’t have this problem.Â It’s a pretty straightforward and common analytical task.
We can measure quite accurately how much of “coming back” is from Advertising and how much is from “Experience” or the more global concept of what Forrester calls Desirability – the fact the customer simply enjoys interacting with the business, and wants to interact again.Â Â And, online we canÂ target specific individuals with specific messages based on their likelihood to come back.
But, most people in Online marketing are not acting on this intelligence or targeting capability; they’re ignoring the idea largely because it didn’t matter offline.Â Are these the same people that keep saying “Interactivity is Different”?
I hope not, because they’re certainly not acting like it is!
Why shouldÂ this concept of “likelihoodÂ to come back” really matterÂ to Online Marketers?Â Because it is much, much more powerful than you think it is.Â Â Orders of magnitude larger.Â However, once you screw up, the downside is also quite powerful – “not likely to come back”.Â This brings up two important and powerful areas to consider:
1.Â Over-spending to get people to come back who would have come back anyway
2.Â Under-spending to get people to come back who are less likely or unlikely to come back
In most cases, you will find the budget mis-allocated in this way.Â To optimize, you will want to reallocate budget from #1 into #2.
Online, there isÂ a powerfulÂ “Pull” that brings people back, over and over – without needing to provide incentives or begging them.Â This Pull is the very fabricÂ of Interactivity.
What’s more, you can measure thisÂ Pull quite precisely and take action where appropriate.Â Here is how:
1.Â If you don’tÂ try anything else new this year, do a controlled testÂ with yourÂ e-mail program.Â This is the simplest, most direct way to prove to people you’re notÂ (I’m not?)Â crazy about how powerful this Pull idea is.Â Please do not use whatever demo / product segmentation you normally use with e-mail for this test.Â If you want to analyze this Pull behavior, you have to segment using behavior.
Most of the big e-mail vendors can do this for you,Â tell them you want to do a “Recency Test with 30-dayÂ segments and a Control Group for each segment”.Â The most universal “last interaction” (the base for Recency) forÂ many folks will be “last open”.Â You could also use “last click-through”, but of course you will have smaller active base.Â If you’re in commerce, use “last purchase date” if you can, since that is what really matters.Â Â Â Just send whatever yourÂ default creative is so youÂ keep aÂ baseline with prior campaigns.Â You will probably end up with results that look like this.
If you want to know more about these ideas or setÂ the test upÂ yourself,Â there areÂ detailed explanations Â inÂ this seriesÂ and this series.Â Questions?Â Just comment below.
2.Â PerhapsÂ more importantly, you can measure the decline of Pull, the absence ofÂ Pull, and take action on that as well.Â Pull is your measurement of Desirability.Â Where you find lack of Pull, you will find un-Desirable experiencesÂ you can take action on.
Now, a lot of people talk about being “customer-centric” and customer experience and all that.Â Makes perfect sense, and has made sense since probably the first barter transactions, right?
What you don’t hear people talk about is how to measure the profitability of a customer experience or Desirability effort.Â How to identify Desirability problems – even if the customer doesn’t say a word about them.Â How to isolate and fix these Desirability problems.Â And how to measure the increased profitability directly attributable to fixing these Desirability problems.Â Â Wouldn’t youÂ like toÂ identify these un-Desirability problems before they go Social on you?Â Why be reactive when you can be proactive?
That would be a pretty neat trick, don’t you think?
Here’s how you do it.
Once you have proven how powerful this PullÂ (come back by themselves)Â concept is with your own data – and it is especially powerful among your best,Â most Engaged customers (is that a surprise to you?), start asking why, for other groups, Pull is declining or absent.Â Â What is the commonality among visitors or customers with the lowest “”likelihoodÂ to come back”, where PullÂ is declining or absent?
Here’s what you will find:
a.Â They bought the same product or products
b.Â Â ProductsÂ bought were from the same vendor or category
c.Â Â Responded toÂ same campaign / traffic fromÂ sameÂ source
d.Â They talked to the same salesperson or service agent
e.Â They were formally Engaged with the same kind of content
and on and on.Â Behavioral segments.
Visitors orÂ customers who “did the same thing”.
Basically, you will find out where Desirability is lacking, literally, what you are doing every day in Sales, Marketing / Product, Service,Â or OperationsÂ to drive away customers and prospects.
And then you can decide what you are going to do about it.Â That’s a whole other challenge I will address in the next post.
Your feedback and questionsÂ are appreciated.