Must Read Classic Articles
These articles are keepers for customer retention
oriented, Data-Driven marketers; they are selected primarily because they
provide very short-in-supply case studies, metrics, or process models for
relationship marketing, customer retention, or customer loyalty marketing on the
Web. This is an archive; for the latest check out the blog.
Beyond the Black Box
May 10, 2004 Target Marketing
This article addresses a very common issue. People work very hard on
capturing data and turning it into information, but then they don't know how to act on
it. This is particularly true with data mining, when you might not be sure
why the segmentation is relevant. Think about what your models means in
terms of the customer and design actionable programs that make
use of this knowledge.
Data Mining Q&A with Dr. Kudyba
May 1, 2004 DM Review
If you have questions on the difference between data mining and OLAP, BI and
all those other data-oriented acronyms, this article was written for you.
What
a Woman Wants Shopping Online
April 16, 2004 Internet Retailer
The title is a bit deceptive, but the results remarkable. People who
clicked on women's clothes were more likely to buy them than people who
identified themselves as women. When you are looking to generate behavior,
use behavior to target; it beats demographics
every single time. After all, do you really care who the buyer is,
as long as they buy?
Data Tables Sell Dinner Tables
April 12, 2004 Direct Magazine
Are you thinking of spending a lot of money on enhancing customer data with
demographic information? Think about what your end goal is. If your
end goal is to drive behavior, then behavioral metrics
are what you need, not demographics. Demographics may help you craft
message, but they tell you nothing about what really matters - likelihood
to respond.
Data for Sail
April 5, 2004 Direct Magazine
What a fantastic example of a company on top of both customer analysis
and turning the analysis into profitable actions. No fuss, no really fancy
systems, just a customer database and people who know what to do with it.
Simple yet stunning segmentation and results, not bad for a company founded in
1848.
How
to Choose a Data Mining Suite
March 23, 2004 DM Review
This is a pretty straight up look into the very confusing world of data mining
software. If nothing else, it does provide a framework for trying to
understand the choices to be made. Of course, you don't need data mining
to create customer models and it's probably not worth the effort until you get
the basics down first.
Halt Customer Defection
March 15, 2004 Target Marketing
This is a well-outlined and argued support of customer
retention marketing, the kind of thing you would get your boss to read if he
/ she just doesn't "get it". But it's short on the "how
to", though you don't have to go far to find out exactly
what to do.
Print Catalogs Spur Web Shopping
March 1, 2004 Direct Magazine
In case you haven't heard, mailing catalogs is not just another way for retail
dot-coms to spend money - it really works very well. Offline communication
is an essential tool in any profitable customer
retention strategy.
Making an Offer They Can’t Refuse
February 12, 2004 DM News
There is absolutely a method to constructing profitable offers and this is a
good checklist to review. You can increase your profits a lot by making
the right offer to the right people at the right time - and it's really
quite simple.
The Migration Matrix
February 9, 2004 Catalog Success
A simplified version of my own Customer Scoring
Grids, a way to create visual maps of customer retention and defection you can use as the "master plan" for managing your entire
Customer Retention effort. If
you like The Migration Matrix, be sure to check
mine out.
Why Marketing Databases Often Fail
January 24, 2004 DM News
Arthur Hughes weighs in again with some rock solid, simple advice you need to
read if you are thinking about a High ROI Customer
Marketing program. For one thing, it is not nearly as expensive
as everybody tells you to create the database that drives the whole thing.
7 Mistakes to Avoid When
Building Customer Loyalty
January
23, 2004 DM News
Another straightforward, simple list of bullet points one has to consider when
designing a profitable Customer Loyalty
program. What do I mean by "profitable"? Check
this out.
May We Suggest
January 12, 2004 Internet Retailer
Finally! Web merchandising is getting some attention. Cross-selling
is merchandising, but usually implies some kind of "action" is taken
by the retailer, as in "want fries with that?". There is also
bundling, which usually works much better - because it is more similar to
offline retail. On the main item page, put a related item and say
"Get both for $xx.xx, Save $x.xx. We do this on the lab site, works
like a charm. Your average sale will soar.
Annual Survey- People Power
December 15, 2003 Direct Magazine
Did you know that companies spending over 50% of their marketing budget on relationship
marketing have higher margins? How often the average B2C and B2B
companies contact their customers? Facts like these are in this annual
survey of Direct subscribers.
Get the Most Out of Marketing
Databases
November 23, 2003 Catalog Success
Simple overview of how database analysis can quickly and efficiently improve
your business. If you want the "how to" details on increasing
profits with this kind of work, get
my book.
Develop a Profitable Merchandise Mix
November
23, 2003 Catalog Success
Merchandising is the final frontier for web retailing; current practices simply
don't take advantage of everything
that has been learned over the past couple of decades by remote
retailers. This article is full of suggestions from the catalog world on
how to do it correctly.
Prospecting Powwow
November 10, 2003 Direct Magazine
Customer Retention and increasing
customer value are the primary topics around these parts, though you
probably know that good customer retention relies on smart acquisition.
This theme underlies what these experts have to say about the state of e-mail
marketing.
View From the Top
November 2, 2003 Direct Magazine
The "big guys" get together and talk about the state of direct /
database marketing and the future. Looks pretty bright to me, as more and
more companies insist on targeting and accountability for their ad spending.
Basic
RFM Analysis Yields Binding Results
October 22, 2003 DM News
Some of the smartest web marketers out there are using offline postcards to
retain or reactivate customers. This article isn't specifically an online
/ offline story, but it does show you the power of
RFM - a 600% increase in response rate for a $3500 isn't something you can
easily ignore..
CRM is a Four-Letter Word
October 1, 2003 Direct Magazine
Yes, here we are - again. The author does not reveal which word he was
thinking of, but hits on a problem we've
discussed before with the way many CRM systems are designed - they depend on
the customer to initiate contact. That's insane; the real ROI is in proactive
Customer Retention. But many of
these systems can't handle the batch operations so critical to High ROI
Retention Marketing. Oh...
The
3rd Deadly Sin of Customer Value Management -
Single Factor Optimization
September 19, 2003 DM Review
People always try to bucket customer marketing into acquisition, retention,
loyalty, and so forth. But in the end, in the best customer value
management practices, all these pieces of the whole are approached in an
integrated fashion. Just as more traffic does not always mean more
sales,
your acquisition methods substantially affect your
retention.
The
2nd Deadly Sin of Customer Value Management -
Ignoring Customer Life Cycle
September 12, 2003 DM Review
Wow, this is great stuff, I guess these guys compete directly with me,
though they are a publicly traded company. Hey, there's plenty of room in
this world for talk about the Customer
LifeCycle and how critical it is to increasing the ROI
of CRM. You might want to check out the 1st Deadly Sin here.
Supersizing Search
September 8, 2003 Internet Retailer
Search engine marketing has come quite a long way since I provided a roadmap to
search success back in 2000. It's
the most logical path to profitability because it takes advantage of how people
actually use the web. The next frontier in search will be understanding
how to optimize PPC and organic search together to maximize ROI. And after
that, people should begin to pay attention to customer retention, because what
looks like a bad deal on the initial search conversion can be very profitable
indeed over the longer term. How to do this? You will need to look
at behavioral metrics like Recency and Latency
by search engine / search term. More info here.
Attitudinal
Imperatives for Direct Marketing
August 12, 2003 Direct Magazine
Did you know the consumers using direct channels are smarter, happier, kinder, more
physically fit, and have happier marriages? This annual comparison of
consumers buying direct with those that don't is a must read; implications for
strategy and execution abound. Seven attitudinal imperatives and the
opportunities they create are identified. See also:
They're
Non-Responders, Not Non-Consumers
Which
customers Are Worth Keeping and Which Aren't?
Managerial Uses of CLV
August 2, 2003 Knowledge@Wharton
This is a great academic article, and useful from a strategic position.
Show it to your boss or CEO. And then tell them business is
"messy", and rarely conforms to academic ideals, but you have a
solution. Tell them you can use some very
simple techniques to accomplish the same objectives, and you can start right
away if you can buy
one book.
Shift to customer retention
from acquisition shrinks costs at Drugstore.com
July 23, 2003 Internet Retailer
The headline of this story trumpets old news for most people, but the real story
is buried in the test they outline. Although they don't use the phrase
"subsidy costs", which I talked about in
my very first newsletter, that's what they are talking about and the
implications for the bottom line are huge. Their simple test also proves
how increasing profitability can be so darn easy if
you know how to do it.
Do-it-yourself CRM apps
once again en vogue
July 18, 2003 CRM Daily
My question is this: When were they not "en vogue"? Most every
high ROI CRM project I have worked on was a skunkworks deal, where we
identified the one or two things that would put the most money on the bottom
line and just made them happen. Now, if you don't have any customer data at all,
perhaps you need a big system to collect it. But if you do have the data,
you can take a low risk path and test the likely
ROI of the CRM approach.
Long Time Gone
July 14, 2002 Direct Magazine
This is a really fascinating study on the use of LifeTime
Value metrics - apparently, those companies that use LTV are more bullish on
the future, report better financial results, and are more likely to increase
their marketing budgets in 2004. Geesh, not a bad crowd to be running
with...would you like to join them?
Kraft Builds Database With Opt-in Program
July
14, 2002 Direct Magazine
People tend to think only businesses with "perfect" data on their
customers can reap the rewards of data-driven marketing. Not so. If
a packaged goods company can do it, you can to. The road to success is not
defined by the type of business, it's about having
the right plan.
Practical CRM
July 1, 2003 Target Marketing Magazine
It is absolutely essential for you to do two things before you address CRM -
determine how you will segment your customers and find out what the current and potential
value of each segment is. That's it; everything else flows from
there. Don't develop a plan, buy software, or do anything else until you
understand the building blocks of customer value. If you need help with
this area, my Simple CRM program is very Practical
too!
I Want My QVC
June 23, 2003 CIO Magazine
Man, is it ever refreshing to hear an opinion like this. CRM is all about
better execution, not cross-selling. You build loyalty by always being
better than the other guy, not with irrelevant product pushing. And part
of knowing what is relevant is understanding "who" and
"why". QVC only tries to upsell 15% of their customer base each
month. Why? You can bet it's because those are the right
people to upsell.
Who Knew?
June 16, 2003 Internet Retailer
I did. If you're a newsletter subscriber, you did too
- a couple of years ago. Web site
analytics are absolutely crucial to success, and this article is a list of the
kinds of things real people have uncovered that just drop your chin to the
desk. Like finding a $12,000 PPC campaign generated $100 in revenue.
Like reducing customer acquisition costs by 80%. That kind of stuff.
And a lot of it has to do with search marketing, which has now become the
"killer app". But since you are already a newsletter
subscriber, you knew that too, and
you knew how to measure your success. Oh,
you're not a newsletter subscriber?
Pay Attention to 12-Month-File, Forum Speakers Urge
June 2, 2003 DM News
Sure, that's the "blunt force" way to do it. People who have
purchased last 12 months are much more likely to purchase than those who have
not purchased last 12 months because they are more Recent.
But, people who purchased last 6 months are even more likely and past 3 months
even more likely than those people. So the "power" of past 12
months really comes from the past 3 months. How can you test and measure
this? Divide customers into <3 month, 3-6 month, and 6-12 month buckets
and promote to them; use the same approach as the 30-60-90
test.
Internet
Can Prove Costly For Catalogs
June 2, 2003 DM News
What we're really talking about here folks is the coming of true multi-channel
marketing; and it really only works if you track the customer
LifeCycle across all your channels. Is it difficult?
Absolutely. Is it impossible? No. Is it profitable?
Wildly so, if you understand the LifeCycle and follow the two fundamental rules of
High ROI Customer
Marketing and you have a system to
track the LifeCycle and act on it.
Modeling
- No Routine Matter
May 27, 2003 Direct Magazine
This is a great little collection of short stories on customer analysis gone bad
- and what to do to keep it from happening to you. Usually, it's because
the modeler doesn't know exactly what the data is or the marketer has not been
clear in specifying the desired outcome. Best story I've heard: Modeling
lead conversion to sale, the data-mining team comes back and says, "Best
leads have first name of John". Um, gang, that's the most popular
male first name in the U.S., isn't it?
The
Last Mile – Clearing the Challenges of Implementation
May 23, 2003 DM Review
This is a very straightforward article with a valuable message - all the
analytics in the world won't help you if you can't execute. I find
cross-functional teams to be of enormous benefit in this area; including at a
minimum (and hopefully at the director or above level) field sales (if
applicable), customer service / call center, fulfillment, IT, and finance as
well as the various marketing folks. If this group isn't having a weekly
meeting anyway, project or no project, start one. The best programs evolve
from solving the day-to-day real world challenges this group faces. The
highest ROI programs are usually developed from the bottom up, not the top-down.
Fundraising Goes Beyond Donations
May 13, 2003 DM News
Besides some good advice on fundraising, this article has a "Top 10 Reasons
Why Donors Stop Contributing" list, a real eye-bugger when you see things
like "Charity Didn't Remind Donor" at 3.3%. Egad. Doesn't
mention RFM modeling to help keep donors on track though. One charity
generated a 192% increase in ROI using RFM - check out
the case study.
May 6, 2003 CFO Magazine
Wow, customer segmentation works. You can
increase sales while reducing marketing costs. And, you can even do something called life-stage
segmentation that really accelerates profitability; both online and
offline. But, did you know you can do it
yourself?
Loyalty Breeds Success for Drug Mart, Vendors
April 28, 2003 DM News
What is it with those Canadians anyway? They sure love their loyalty
programs - and so do the program partners when they can drive instant sales and
share gains using the rich transactional database for targeting. Like they
say in the article, "past purchase behavior is the best indicator of future behavior".
Want to know more? Download the loyalty
case study and check out the book that teaches you how to use past
behavior to increase your profits step by step.
How to Compute the Next Best Product
April 22, 2003 DM News
Another winner of an article from Mr. Hughes; try giving your sales force a list
of items clients are most likely to buy! You know, I just wish more people
would believe data-based marketing can work this way. You don't need
expensive hardware / software, just basic
pattern recognition.
Don't Lose
Sight of the DM Basics
April 16, 2003 DM News
Another "back to basics" type of article. The web is a
different channel, not a different world. And it happens to be a direct /
database marketing channel where the things that have worked offline for decades
work even better. So polish up your DM skills and if you
don't know about the real workhorse of direct - RFM - you might want to read this.
Healthcare System Shifts
From Mass Marketing to CRM
April 14, 2003 DM News
Simple works every time. Ever notice that? Here's a hospital with a
very simple CRM program based on the customer
LifeCycle that generates an average of over $6.68 in profit for every $1
spent, with some portions doing $10 to $1. How? They mail stuff - to
the right people, at the right time, with the right offer. No brain
surgery or fancy software. Just tons of profit. You
want some of that?
Where’s Wal-Mart?
April 10, 2003 Internet Retailer
Still one of the great opportunities out there for multi-channel retailing,
merchandising is starting to come out of the shadows. As loyal readers
know, merchandising is something I have been harping on since the
beginning. In this article, you get some insight into how a smart
multi-channel retailer thinks about the web, and it's all about
merchandising. You have to understand which products work in which
channels to maximize the opportunity.
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