Must Read Classic Articles (continued)

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.

Predictive Modeling Passes the Test
in Back-to-School Campaign
February 19, 2002  DM News
All right, already!  Geesh, I got a ton of e-mail on this article, which tells how "Predictive modeling techniques outperformed Recency - Frequency - Monetary value (RFM) targeting in a back-to-school campaign.  Well sure, I buy that, but what does it really mean?  Read the article and then read my analysis here.

Emerging Marketing
February 14, 2002  e-Marketer / McKinsey
McKinsey must be reading my web site.  They say there is evidence companies can engage in "CRM-Lite" without a lot of fancy tools and still improve profitability substantially.  If you are a small to mid-size business with a lot of money to spend on the fancy stuff, check out their evidence by downloading the full article (free registration required).  Or, just assume they know what they are talking about and start reading about "How To" with Simple CRM.

Why E-Mail Can Make a Difference
February 8, 2002 DM News
Good info for non-profits on e-mail fundraising.  Has to be the killer app for cash strapped orgs, and done right, can improve your image at the same time.  "We're sending you this e-mail because we want as much of your donation to go to the cause as possible.."

Why So Many Rollouts Disappoint
February 7, 2002 DM News
Geek alert!  If you don't know what a two-tailed test is, you might not be interested in this article.  Then again, if you ever did a direct mail / e-mail test that didn't perform nearly as well in rollout, you should probably learn what a two-tailed test is!

Ad Guidelines, Unicorns, and Other Myths
February 4, 2002  ClickZ
Um, this is a pretty one-dimensional opinion, but one I have generally agreed with.  The Web is about transactions, transactions can make you money, and so customer transactional profiling is the most important thing you can do to improve the profitability of a web business.  How come I know so much about this topic?  I was the VP of Marketing for Diller's HSN and was there 10 years, where I created a lot of the techniques used.  Want to know what these techniques are?  Simple.  Read my book.

Small Biz Has Big Loyalty Potential
January 31, 2002  DM News
An often overlooked segment in loyalty, many small to mid-sized businesses offer an opportunity to grab share with a few perks.  This article outlines a number of common sense reasons small business should be a target to consider for a loyalty program.  Well written, logical, and appropriate to the times.

Retailers, Measure Your Lifetime Value to Customers, Not Their Value to You
January 24, 2002  Colloquy
Shocker!  "Utilizing known demographics coupled with Recency and Frequency information -- may help build a very accurate picture of customers in varying lifecycle stages."  This is the second article in a week knocking LifeTime Value as a concept.  I swear, these guys are reading my site; this is exactly what I said in my book 2 years ago.  Change in value, not absolute value, is the key.

Attitudinal Data: CRM’s Crystal Ball
January 22, 2002  DM News
Crystal Ball is a little bold to describe survey data but the essence of this article is correct.  You can and should use "soft data" like surveys or demos to improve the performance of campaigns, but only after you understand the behavior.  Build behavior profiles first, then correlate the behavior with the soft data.  Are you confused by this idea?  Details in the book.

Buying Lists
January 22, 2002  Target Marketing
Or more accurately, renting them.  If you haven't used targeted offline list rentals to drive qualified prospects to your site, you are missing out on a tactic that really works.  many of the most profitable sites have used offline lists.  But how do you go about it and what do you watch out for?  Here's a primer.  Also, check out this list of brokers who want to work with focused start-ups.

Cutting the Fat From CRM Implementation
January 16, 2002   eWeek
Do you know what serendipity means?  I send out the newsletter with the prediction that "Simple CRM" will be the concept to watch this year, and then somebody publishes an article on success stories with stripped down, home built, Do-IT-Yourself CRM.  If this idea appeals to you, you'll need a plan.  Got one right here!

Segment Twice, Mail Once
January 15, 2002   Direct Magazine
Nice little banking case study, with lots of metrics on using behavior-based profiling to choose targets and demo data to tweak creative.  You knew this already though - you read about it here, and here, and here, right?

Cadillac Expands Loyalty Program
January 15, 2002   Direct Magazine
People often ask me if data-driven marketing can work in durable goods where there is a long purchase cycle.  This article should pretty much answer that question; lots of stats!

Soaring High
January 15, 2002   Direct Magazine
Absolutely fantastic direct marketing "kitchen table start-up" tale in the tradition of Lillian Vernon and so many other catalogers - only this story is about a dot-com. People, it's the same skills.  Want to be a successful online retailer?  Hang with catalog folks.  I've told you all this before - renting offline lists to find targeted prospects, working the multi-buyer, not acquiring poor-quality customers with bad offer strategy -  just a great story.

Customer Data? We Don't
Have Any Customer Data
January 14, 2002   ClickZ
Well, here we are again, folks.  You must think I'm a crank or something, spouting all this stuff about how the data will tell you what to do, that modeling is easy to do, and so forth.  Hey, it's coming.  The only decision you have to make is this: are you going to be in front of it, or behind it?  Just remember, I've been doing this for 15 years now, and I've proved it works just as well online as offline.  Try it.

Loyalty Marketing: 
What Is Its Role in a CRM World?
January 9, 2002  CRMCommunity.com
I'm hesitant to flag up a competitor, but Rick Barlow has once again eloquently summed up one of the positions I have long talked about on this site - Loyalty Programs were CRM before CRM was CRM.  Think about it.  Want to explore loyalty program ideas with a company that really knows what it's doing?  Try my loyalty partners at Kobie Marketing.

Hooked on Sales
January 1, 2002  Business 2.0
Story about Hooked on Phonics and how they converted their direct sales method to the web.  Classic stuff, just classic.  If you have a direct product, fewer choices is better.  Got multiple direct products?  Use multiple sites.

New Brand Day
January 1, 2002  CFO Magazine
I really wish all these branding people would take a pill and relax.  You can measure the ROI of branding; it's done all the time.  Problem is, people often don't like what they find.  But some companies are insisting on, looking for, and finding ROI from branding.

Case study: 
Second site brings 85% more sales
December 14, 2001  crm-forum.com
What a great story this is.  It encapsulates everything I have been saying on this site about achieving success on the web: niche retailing, understanding visitor behavior, and the importance of measuring keyword value.  Do you need some help with this stuff?  

Improving the Return on Investment
from CRM: an Introduction
December 13, 2001  crmforum.com
One of the things I have preached on this site from the beginning is the absolutely mandatory requirement you model customer behavior before you even consider CRM choices - software, people, budgets.  Looks like experience is proving me right.  Given how inexpensive and simple to execute this one mandate is, I continue to find it unbelievable people skip this critical step.  Want help with it?

SmarterKids.com Learns 
Database Lessons From Print Push
December 3, 2001  DM News
"Smart" idea - capturing current e-mail address of bad e-mail address customers by making 'em an offer - and a "smart" control group set-up to prove whether it was worth it.

Two Paths for Database Marketers
November 21, 2001  DM News
You know, something has always bugged me about customer initiated "reactive" marketing systems.  They pre-suppose the customer will come back to the site and create activity to be profiled.  What if the customer never comes back?  All you know about is customers in contact with you; nobody is tracking lost customers - which is much more important.   You have to profile things like Recency to really know where the business is headed. 

J.Crew to Use Clickstream Analysis
for Product Recommendations
November 19, 2001  iMarketing  News
Jayson Kim is a smart guy and understands what web merchandising is about.  When you start profiling non-buyers you are "sifting the stream" (as we called it at HSN), which is at the heart of closing the first transaction.  And surprise, surprise - you don't have to do it in real time.  It just doesn't matter, because the behavior of the whole will reflect the behavior of the few - it always does.

Comdex 2001: 
The first steps of Web analytics
November 14, 2001  searchCRM.com
I shouldn't have to bring this up anymore by now folks, but I am absolutely stunned by the number of people who do not use easy, cheap, High ROI web site analytics.  I don't understand how you would run a web business - any web business - without them.  But it seems you are still ignoring this resource even after I showed you how important it can be.

Beyond Traditional Segmentation
November 12, 2001  DM News
Just an absolutely fantastic article on life after RFM, which confirms my experience - 80% of the predictive value of the most sophisticated customer behavior model you can develop is available using RFM models created with an Excel spreadsheet.  Data mining and the rest of it gets you the next 10%, and if you haven't even started on customer modeling, why would you go there?  Just dying to spend money on complex, expensive, long cycle solutions?  Sure you are.  Why not start with the High ROI low hanging fruit instead?

Measurement of Customer Satisfaction
is Necessary, but What does it Have to do
with Customer Relationships?
November 9, 2001  CRMForum.com
Gets the longest title award, but still a very good debunking of the customer satisfaction survey myth.  Hear this:  Customers who express they are "satisfied," or even "very satisfied" defect at an alarmingly high rate.  If you don't know this already, you are not tying your survey data to actual behavior.  Look at what they say they will do and match it back to actual behavior.  Do this and you will get the shock of your life.  Bottom line: skip the extra step of surveys, study the actual behavior.

The Integration of Data Warehouse
Data with Campaign Management
November 9, 2001  DM Review
Another person speaking to state-based profiling - what is important is not the absolute profile, but how the profile changes over time.  These changes are most effectively used to trigger the timing of campaigns - and timing is everything in High ROI Customer Marketing.

Airing Some Gripes
About the Buzzword 'CRM'
November 7, 2001  iMarketing News
Oh man, do I hear ya on this one.  How long have I been saying most CRM techniques have been around for decades, practiced by those who have always been customer centric and had control of their data - the catalogs and TV Shopping companies.  Is it any wonder these same companies are the Internet profitability success stories?  In these businesses, if you are not customer-centric from top to bottom, you cease to exist.  Period.  The problem is not "CRM" - it's classifying CRM as a "new frontier" with "no rules yet."  It's not.  All of CRM has been done before.  It may have not been done in your industry because you never collected or organized the data, or done with the new tools and communication channels the Internet provides, but it has been done.  Learn from those who have been there.

Segmentation: Where's the Lift?
November 7, 2001  DM Review
The RFM cup runneth over!  Great article on lift charts.  I find people understand the very simple concepts behind predictive modeling much more easily when they can see them in action visually.  That's why the entire Drilling Down method is based on the visual display and tracking of customer behavior.

How to Model Product Purchases
November 7, 2001  Direct Magazine
Nerd alert!  Got to love how this article starts out, with the "big three" modeling variables.  Are you using RFM yet?  And you are waiting for what?  I have always considered product to be the 4th most important variable; David Shepard provides some "how to" on using product for predictive modeling in this article.  If you don't have the technical chops to use this method, you can always use mine!

Top Priority
November 7, 2001  Customer Support Mgmt
I simply don't believe a company operates at maximum profitability when they spend the same amount of money on each customer (read: treat each customer in the same way).  I have seen too many examples.  That said, I do not support the notion of "firing" low value customers - it's a ridiculous idea.  Customer value scoring has to be used properly, the issue this article addresses nicely.  If you are looking for an easy-to-implement customer scoring method, you might try this one.

Is Customer Loyalty in the Cards?
November 7, 2001  1to1 Magazine
OK, so this article is from the October mag.  It took me this long to figure out how to link to an article with a 202 character URL.  But I digress - this is a good review, with stats and benchmarking data, of the current state of loyalty card usage in supermarkets.  Really amazing how well this stuff works if you know how to use it - and most supermarkets don't.

Must Read Classic Articles (continued)