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Durable Goods
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  LifeTime Value
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  Tracking CRM ROI
Tutorial: Latency
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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.

Making an Offer They Canít 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.

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.

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% jump in response rate for a $3,500 product is not something you can easily ignore.

The new realism of web site design
October 7, 2003  Internet Retailer
Conversion, conversion, conversion.  It's now a religion, isn't it?  I'm not sure what all these people were thinking before they got religion, but sure, optimizing for conversion makes a lot of sense.  Prediction: the next religion will be accurately tracking search marketing.

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 more people to 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 classic behavioral metrics like Recency and Latency by search engine and 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.  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.  Success is all 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 Ė 
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, low-hanging fruit programs are 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 keep donors on track though; a 192% increase in ROI is nothing to sneeze at.

CRM, As You Like It
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?

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(more articles on the web outside this site)


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