Tag Archives: Relationship Marketing

All Talk, No #Measure

Analytical Culture, Analytics Education, Web Analytics

Hypocrisy in Web Analytics?

Before every eMetrics (I’ll be in San Fran teaching Basecamp, at the Gala, etc.), I try to ask myself, what is the most critical issue facing the web analyst community right now?  Then, at the show, I ask everyone I run into what they think about this issue.

There’s lots of issues to choose from.  Career path I think is a big area of discussion, given the mergers in the space and trend towards outsourcing.  Then there’s the “we don’t get no respect” thing; senior management doesn’t seem to listen / understand / act on the information provided.  And one of my favorites from the past is still out there, data torture – people being pressured to manipulate data to reach a predetermined analytical outcome.

But seems to me, more important at this juncture is trying to resolve why there is so much written about the importance of “the customer” but very little measurement at the customer level.  Think about it.  Customer experience, customer centricity, the entire social thing, it’s all about customers.

But when folks wants to trot out “proof” that this or that approach is the road to the promised land, they analyze impressions, visits, clicks, etc.  Visitor-level stuff.  Does that seem like the correct approach to you?  Seems to me, if you want to provide knowledge about customers, you should measure customers.

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Relational vs. Transactional

Analytical Culture, Customer Experience, DataBase Marketing, Driller Q & A, Marketing thru Operations, Measuring Engagement, Newsletters

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

Q: I am hoping you can help answer a question for our team. By way of introduction, I am the CEO of XXXX. We are a specialty retailer / restaurant of gourmet pizza, salads and sandwiches. We would like to know restaurant industry averages (pizza industry if possible) for customer retention – What percentage of customers that have ordered once from a particular restaurant order from them a second time?  I am hoping with your years of expertise and harnessing data you may be able to assist us with this question. Look forward to hearing from you.

A:  Unfortunately, in those said years of experience, I have found little hard information on customer retention rates in QSR and restaurants in general (if anyone has data, please leave in Comments).  It’s just the nature of the business that little hard data, if collected, is stored in such a way that one can aggregate at the customer level. The high percentage of cash transactions doesn’t help matters much; there’s a lot of data missing.

Over the years, sometimes you see data leak out for tests of loyalty programs, and of course clients sometimes have anecdotal or survey data, but this isnot much help in getting to a “true” retention rate. More often than not you discover serious biases in the way the data was collected so at best, you have a biased view of a narrow segment. Often what you get is a notion of retention among best customers, or customers willing to sign up for a loyalty card, but not all customers. And the large “middle” group of customers is where all the Marketing leverage is.

What to do about this predicament?

There are really two issues in your question; the idea of using industry benchmarks when analyzing customer performance, and the measurement of retention in restaurants.

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Adoption and Abandonment

DataBase Marketing, Marketing Research, Measuring Engagement, Web Analytics

Out of the Wharton School we have a nice piece of behavioral research on the effect speed of Adoption has on longer-term commitment.  The article, The Long-term Downside of Overnight Success, describes research finding “the adoption velocity has a negative effect on the cumulative number of adopters”. 

This research dovetails nicely with a lot of the topics discussed here on the blog lately, so I thought I’d use it (with a nod to Godin’s post on Strategy vs. Tactics today) to provide some fodder for thought.

First, the importance of Psychology in Marketing.  So many of the “discoveries” arrived at through  brute force testing of Online Advertising are already well known in the greater discipline of Marketing through Psychology.  For more on this read “The Other 3P’s” and if you’d like to do something about lack of knowledge in this area, make sure to read this comment on source books.

Second, this research is a great example of isolating the true drivers of behavior.  The idea of looking at baby names to isolate the real behavior from “technology and other commercial effects” while including “symbolic meaning about identity” results in a broad, Strategic-level answer to the question, not a Tactical one. 

Why is this important?  It means the results can be applied across a host of different Marketing situations, rather than only a specific one. 

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