Customer Retention "How To" Site

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Introduction

Hi there, Jim Novo here. This site is home for The Drilling Down Project - a collection of articles, tools, and services you can use to take control of your customer data and use this data to improve your profitability. The Project includes this web site, free newsletter, book with free customer scoring software, and High ROI Customer Marketing Roundtable and Workshops for marketing or IT folks.

Background on the Method

I was the VP of Marketing and Programming for Home Shopping Network, overseeing marketing and merchandising efforts for TV Shopping, the Catalog division, and Interactive on CompuServe, Prodigy, and the Internet.

Over a 10 year period we developed and tested a method for increasing customer value while reducing marketing costs through modeling customer behavior. Using simple query tools and tough ROI formulas, we frequently generated returns on marketing spending of over 100%, with some programs returning 400% or more. And we did it with simple, readily available tools.

How we did it is the subject of this site, the Drilling Down book, and the High ROI Customer Marketing Roundtable and Workshops.

Do-It-Yourself Customer Analysis for High ROI Customer Marketing

If you are looking to avoid the high risk and cost of installing a full-blown customer analysis suite, but want to take advantage of high ROI customer marketing tactics, this site is for you. You can develop a very simple toolkit, build experience with High ROI customer modeling techniques, and make more money using the Drilling Down method.

Here's how it works: customers are "scored" on their transactional activity (purchases, page views, log-ins, etc.) with an Excel spreadsheet, by the Access application that comes with the book, or your own application (business rules supplied). The scores represent the likelihood of each customer to respond to marketing and remain a customer, allowing you to rank your customers by their potential value. When you can identify the potential value of customers, you are able to:

Go get more customers like the highest potential customers
Focus on growing the profitability of middle potential customers
Stop wasting resources on low potential customers

Then "trip wire" reports are run each week or month and changes in potential value scores are monitored. Rising scores indicate the potential value of the customer is increasing; falling scores indicate decreasing potential value - and signal the customer is becoming less likely to continue on as a customer. Trip wire reports monitor changes in score and "flag" important changes in potential customer value, allowing you to:

Emphasize the ads, media, and products creating long term high potential value customers and downplay the ones that don't
Create High ROI marketing programs and make more money selling to customers by driving higher sales while reducing costs
Predict when best customers are about to leave you and react with customer retention and save-a-customer programs
Quantify the effects of marketing and operational initiatives by linking them to a change in potential customer value

Customers can be scored by segment (demo, geo, source, media, products purchased, time of day, referring URL) or as individuals.

You can get started right away discovering the clues to increased profitability locked away in your customer data without long lead times and a lot of expense. Then, when you have the experience and the ROI justification you need, you can move up to a more powerful solution at your own pace - and bring with you real-world experience in driving profitability using customer data for decision making.

Click here for step-by-step contents of the book

Easy to Understand

The Drilling Down method is very mechanical in nature. Customers are classified and compared with each other on a number of parameters using their transactions - not personally intrusive questions. There's not a lot of guesswork involved; the answers you are looking for become very clear. You don't have to be a database marketing expert - just someone with common business sense.

IT people love this method (clue: it was developed from the beginning with IT people involved). They think of the Drilling Down book as the "Customer Analysis Requirements Document" they could never manage to get out of Marketing, because it provides a very logical, iterative approach to allocating resources and increasing customer value. IT folks without a lot of marketing support are just "running with it", building up a store of important behavioral data to be used later on when the marketing support comes onboard.

Read user comments on the method

Why Does it Work So Well?

It's a "low hanging fruit" idea and inexpensive to set up and use. The Drilling Down method provides a structure for organizing your approach to customer data and identifying the highest ROI opportunities. You spend very little on new infrastructure, use existing IT resources, and drive bottom line impact.

Proven Approach, Real Results

This site is designed as a preview of the Drilling Down method, and provides many examples of customer marketing models and techniques. By reading the articles and taking the tutorials, you will begin to understand there are real methods and metrics behind the hype you have been exposed to.

The fact is, some of these techniques have been around for decades, and have been over-complicated and over-hyped by the various players in the space. I have personally been working with some of these methods since 1983. Customer behavior modeling has a very long history of success, proven to work again and again across many different business models. And it's privacy friendly. These methods work very well using only customer transactions (page views, purchases, log-ins, contacts, etc.) to predict and manage future customer behavior.

What you will learn how to do in the book

I guarantee you will learn some common sense, easy to implement customer marketing optimization techniques from going though this site. The topics covered on this site represent "building blocks" used in the Drilling Down method, the foundation - and are actionable ideas by themselves. As you go through the site, you will be building an appreciation for how powerful simple customer modeling can be, and understand you can do it yourself.

If you want to access the complete step-by-step Drilling Down method for creating high ROI customer marketing programs, you should consider purchasing the book, which comes with a free customer scoring software application. If you are not in "do it yourself" If you are not in "do it yourself" mode, please review my hands-on needs discovery, pre-CRM ROI analysis / testing, and teaching programs tailored to where you are on the Database Marketing / CRM Analytics learning curve. If you represent a marketing / consulting agency or software company, see the subcontracting section.

Good luck to you!

- Jim Novo

Helpful Links: The Drilling Down method is a tight integration of many concepts you read about all the time that never seem to make much sense by themselves. I've created customized "gateways" to the method for many of these concepts so you can see how they integrate. Please choose the background or interest area you're coming from below:

By Marketing Concept:

CRM Customer Loyalty Customer Retention

Relationship Marketing Permission Marketing

By Tactical Approach:

Visualization of Customer Behavior

Visitor Conversion Customer Profiling

Customer Modeling Customer LifeCycles

LifeTime Value RFM Modeling Calculating ROI

By Business Type:

Retailing Utility / Telco Insurance / Services

Durable or Low Purchase Frequency Goods

No fit with your interests? See below.

What would you like to do now?