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Tutorial: Latency
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  About Jim

Classic Customer Marketing Articles

This is an archive; for latest see the Marketing Productivity Blog and Twitter: @jimnovo

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.

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 very smart multi-channel retailer thinks about the web, and it's all about merchandising.  You have to understand which products work in which channels and maximize the opportunity.

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.

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 keep donors on track though; a 192% increase in ROI is nothing to sneeze at.

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.

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.  It does not require expensive hardware and software.  It simply requires 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?

Triggering Higher Sales
March 31, 2003  1 to 1 Magazine
The cat's out of the bag, as they say.  Ruth Stevens writes on event driven marketing - also known as the Drilling Down method.  So it's not a big secret anymore, but I guess that is OK - people will still have to figure out the "how to" of detecting / triggering events.

Born Again
March 24, 2003  Direct Magazine
Oh man, is this classic.  The Director of CRM for Hewlett Packard says, "You can actually run a lot of CRM from an Excel spreadsheet."  People talking about Latency.  The customer LifeCycle.  How to make CRM work with what you have.  About moving from reporting to predicting behavior.  That customers don't really want a relationship.  What is it?  A review of the current state of CRM with a panel of experts, who say what I said more than three years ago, when nobody wanted to listen.

When discounts drive customers away
March 17, 2003  Internet Retailer
You knew this, right?  A great example of the small things that cause people to abandon shopping carts.  As a matter of fact, Bryan talked about this same issue a month or so ago in his ClickZ column.  If you're going to use discount codes, make them invisible to people who don't have them or you will suffer.

Developing Effective Segmentation
March 15, 2003   Direct Magazine
I find many people don't really know how to use survey data, and it all ends up being "nice to know" stuff without ever being actionable.  When you tie the survey data to behavior, as in done in this article, then you get something you can increase profits with.  What do I mean by behavior?  Use any of these simple models

Seven Ways Database Analysis
Can Help Your Prospecting Efforts
March 3, 2003  Target Marketing
So, you think database marketing is only for customers?  Good customer retention starts with smart customer acquisition, and your database is the brains behind it all.  Start with some behavioral segmentation.

So You Have a Model, Now What?
February 24, 2003  DM Review
The modeler's nightmare - brilliant insight is derived, and no action is taken.  You can usually prevent this from happening by asking the sponsor one question: what is it you will do with the information if it can be provided?  If the answer is unclear, more upfront work needs to be done.  The advantage of using my simple customer models is this: I show you exactly what to do with the information they generate.  Check them out on this web site and in the book.

Marketing Inflection Points – 
The Key to Profitability
February 17, 2003  DM Review
He's right about that.  The customer LifeCycle is full of inflection points, and simple customer models like Latency and Recency are the way you discover them and use them to your advantage, following the Two Rules of High ROI Customer Marketing: act only when you have to, and always at the point of maximum impact.  Get all the details here.

Actionable E-Metrics
February 12, 2003  Intelligent Enterprise
Well, well, well.  It appears some of my work is beginning to "leak" out into the real world.  A well-written article from a real practitioner at Dell Computer.  Covers concepts and models familiar to those of you who follow my work in web analytics.  Actionable, indeed!

Designing by the Numbers
February 12, 2003  Internet Retailer
Shazzam, you mean web site metrics can be used to improve visitor conversion and the profitability of a web site?  Nah, don't believe it.  Oh, I forgot, I wrote a book about it, or if you need help, I can do the work for you.

Popular Tastes
February 3, 2003  Direct Magazine
A bank loyalty program is turned from a dog into a star.  Wasn't that hard; all they did was enroll the right people and make the rewards relevant - just as we did in this case study.  But man, the price tag was $15 million, or about $100 a customer.  We did it for $20 a customer in the case study.  Does your loyalty program need revising?  I bring all my loyalty business to Kobie Marketing.

The 3 Rules of Donor Prospecting
February 7, 2003  DM News
Some straight up, easy-to-understand rules for improving donor prospecting, with stats and numerical examples.  Don't forget to keep track of the source code!  And after you acquire them, make sure you use a simple model to maximize donations while minimizing costs; this non-profit increased ROI 192%.

Advantages of Life-Stage Segmenting
February 7, 2003  DM News
Oh, so customers have life stages?  I wonder if that has anything to do with the Lifecycle?  Of course it does; Life Stage / Cycle marketing is at the core of Relationship Marketing, which is not about being buddies with customers, but understanding how needs change over time.

What to Do Once Your 
Loyalty Program Is Up and Running

January 28, 2003  DM News
If you are familiar with loyalty programs this list will come as no big shock, but loyalty programs are gaining steam right now, and this list may help with your planning if you are new to the loyalty game.  You can see the advice about control groups in action by downloading this loyalty program case study.

Relearn the Rules of Direct Marketing
January 24, 2003  DM News
It really is amazing how some basic truths about direct marketing got so twisted up in the dot-com years and used to justify everything imaginable.  LifeTime Value comes to mind as one of the most tragic victims; everyone just skipped right over the Customer LifeCycle and ended up with a pot of fool's gold.  Likewise Relationship Marketing morphing into CRM.  Go back to the classics and relearn what you were taught during this period; you'll be better off.

Making Customer Loyalty 
Relevant Regardless of the Channel
January 28, 2003  DM Review
In an amazing twist of fate, this article is written by someone from the same company as the article above, and endorses what I would call a very dangerous approach to loyalty.  It wipes out the core "stored value" concept at the heart of loyalty programs, and as such, turns itself into a frequency program.  That may be fine for your business, but it's not a loyalty program; frequency programs have a bad habit of simply making your best customers less profitable due to subsidy costs.  Make sure you understand customer behavior before trying something like this.

Why Some Companies 
Succeed at CRM (and Many Fail)
January 15, 2003  Knowledge@Wharton
Bang up job on this un-biased study with no connections to the various consulting groups or vendors.  The research notes, among other things, three distinct approaches to customer relationship management (CRM), each with dramatically different results.   And you know what?  The most successful people take an approach that sounds a lot like Simple CRM.

Catalog Still Matters in Internet Age
January 14, 2003  DM News
This is an extremely important article, not so much for the details, but for the plain fact that it proves you really have to understand your customers  before you start monkeying around with your distribution.  I can't tell you how many times I've seen these stories play out.  Whether you are talking about customer acquisition or retention, the web / catalog combo can be very effective if you know how to measure it properly.  Subsidy costs and channel cannibalization are the enemy.  
Do you know how to measure them

Making E-Mail Acquisition Succeed
January 8, 2003  DM News
Well, soo-prise, soo-prise, soo-prise, making e-mail acquisition succeed relies on the same truths required to make direct mail succeed.  Don't know what they are?  Here's a short and sweet wrap-up that is on the money.

Free Shipping Helps Deliver
Happy Holidays for E-Commerce
January 3, 2003  DM News
This whole shipping charges thing gets my blood going.  Consumers have always hated shipping charges, but giving free shipping is a huge mistake for long-term health, as buyers become reluctant to pay shipping ever.  You have to analyze and understand the buying behavior, and set shipping accordingly.  Flat shipping is really the best idea for the web, because of the shopping cart confusion.  Figure out what your average shipping cost is and charge that or slightly above.  You win some and you lose some, but the upside - fewer dropped carts, surge in average order size - far outweighs the downside.  Our lab store has an average order size of $100 and most of the product in the store is under $20.

1 to 1 Innovator Awards
December 16, 2002  1 to 1 Magazine
Twelve companies who - gasp - made money with CRM.  Complete summary of what the objective was, what they did, and the ROI, as well as next steps.  The companies are from a number of different industries worldwide.  

Web Buyers Use 
Catalogs Differently, Forrester Says
December 17, 2002  DM News
This is a gnarly multi-channel issue; you have to be able to source the sale to the channel to effectively segment.  Bottom line: remote retailers are probably wasting money by mailing full catalogs to web-only buyers.  I suspect postcards and other promotional formats are going to play a huge role here.

Pier 1 Brings Print Mailer's
Browsing Advantages Online
December 16, 2002  DM News
I've talked a lot about serendipity on this site, the idea that to increase yields you have to merchandise the site to increase cart loading, get people to make unplanned purchases.  Search is the enemy of serendipity, and the reverse is also true, as shown in this approach that encourages pure browsing of product.

Segment Customer Information
for Increased ROI
December 11, 2002  DM News
Well, you'd never hear such an outrageous idea coming from me!  The nerve of this guy!  Doesn't he know none of this stuff works?  Actually, this is a pretty good run-down of 4 different ways to approach segmentation.  Lots of ways to skin that cat, including mine.

Web Marketer Brings
Hudson Valley to Catalog
December 10, 2002  DM News
Small retail web site operators have seen a lot of the big boys launching offline catalogs, and keep asking me this: Am I big enough to do a catalog?  Check out the stats in this article and see for yourself.  Folks, targeting is targeting.

Furniture Retailer 
Bolsters Analysis With Inhouse CRM
December 5, 2002  DM News
Say it isn't so!  People who signed up for a sweepstakes actually turned out to be profitable mailing targets?  That's unusual, but goes to show what you can do if you actually understand your own data.

Guided OLAP
December 4, 2002  DM Review
OLAP, schmOLAP, what the heck are these guys talking about?  Not sure I agree with the core argument presented here, but what is presented quite well are the different kinds of analytical approaches, what they are good for, and the challenges users have actually deriving value from them.  If you are new to analytics and are looking for a background piece, this will do fine.  More on what data mining is all about in the last newsletter, here.  And if you are wondering where my Drilling Down method fits in, right between reporting and OLAP; it's basically OLAP for dummies.

Must Read Classic Articles (continued)


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