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.
The
Failure of CRM Mathematics
April 30, 2002 DM News
The debate rages on. Is CRM just database marketing with an entire
reorganization of the company "around the customer" thrown in for good
measure? I don't know, but I do know this - many of the promises
of CRM can be achieved through sharp database
marketing. And making more money is what business is supposed to be
all about, isn't it?
A
Formula for Retention, Cross-Selling
April 29, 2002 DM News
I'm not sure I would measure the profitability of a retention program this way,
but this is one way to do it. I prefer using control
groups and letting the retention effects
speak for themselves, rather than including savings related to the cost of
acquiring replacement customers. Still, it's a valid approach and a good
one if you are looking for a fairly simple methodology your clueless boss might
have a chance of understanding!
Boston Symphony re-orchestrates
the customer experience
April 23, 2002 1 to 1 Magazine
I get a lot of e-mail from non-profits trying to make the web work for
them. If they can figure it out, it's a beautiful thing - lowered costs,
closer contact with donors. Many of these orgs have never done any simple
customer scoring and they really need to. But as BSO proved, there is
low-hanging fruit out there in web land if you know how to execute.
Measure Cost Per New Customer
for a Stronger Profit
April
19, 2002 DM News
This article is written for catalogers, but onliners should pay heed.
Virtually nobody (except me) ever talks about merchandising on the
web. Learn from the pros - catalogers - and understand how it works.
You can make a dramatic difference in sales per visitor following
good merchandising techniques and understanding
visitor traffic patterns. Managing contacts with your e-mail list a
little more intelligently wouldn't hurt either.
Relevant Beats General Every Time
April 19, 2002 DM News
All of the endless talk about the demise of banners and online in general fails
to recognize a basic fact - if you make them relevant (targeted), they
work. You can talk about branding all you want to, but if branding is what
you are doing, then why make the darn banner ad click-able in the first place?
Milk House File to Create Growth
April
18, 2002 DM News
What do you do when 1% of your customers represent 65% of your net
profits? Do you even know what percent of your customers equals 65% of
your profits? Better do what Charles Schwab did, and use
RFM to figure it out. A loyalty program
wouldn't hurt either.
Case
Study: Crystal Decisions Improves Traffic and Reporting with WebTrends
Intelligence
April 18, 2002
ecommerce-guide.com
"Management has mandated that future decisions be based on metrics rather
than opinions." Well, thank heaven for that. Got data but no
metrics? I can help.
Catalogers- Look, Listen and Learn
April
17, 2002 Direct Magazine
Shocking stats in my own backyard. 92% of catalogs have a database, but
only half use any kind of modeling and half of those use the simplest buyer
behavior ever invented - RFM. Onliners - don't
make the same mistake - it works
even better online than it does offline.
Retelling the Data Story
April
17, 2002 Direct Magazine
Hmmm, $18.50 for every 45 cent catalog mailed, response rate of 32%.
How? Using a simple model. If you skipped the story above, you might
want to read it now.
Brown Shoe Expands Postcard Program
April 17, 2002 Direct Magazine
Two bucks in profit for every $1 they spent using RFM
to select the mailing list. That's a 200% ROI for those of you keeping
track, even without any of the really good stuff.
Rely on Research More
During Unpredictable Times
April 9, 2002 DM News
Some remarkable stats on direct marketing and economic cycles. While the
everybody in traditional media is wringing their hands, did you direct mail
outperforms all other media in times of weak or moderate economic growth?
That direct mail expenditure has grown every year for 50 years? This
despite rising costs and the ROI religion DM'ers have. Have you seen
Overture's stock price lately?
Analyst:
Growing Trend Toward
Decoding Customer Behavior
April 8, 2002 CRM Daily
Well, thank heaven for that. Of course, the people hanging around this
site for the past few years already knew that.
This particular article is a bit twisted though, talking up the need for
behavior profiling across different businesses. This is a good
idea; the catalog business has done it for decades. But before we get too
deeply into this kind of navel gazing, I think there is more utility in figuring
out how to profile behavior at your business.
Pay-Per-Click Keyword Service
Pays Off for RiverHouseTraders
April 1, 2002 DM News
Not using Overture yet? Shame on you. It's one of the highest ROI ad
games out there - especially for search terms you can't seem to get a high
"natural" ranking for. Plenty of real worlds stats in this
article for online retailers. A must have on site launch, along with Google
AdWords - if you know how to use it properly.
Why
Doesn't Your ROI Add Up? Do the Math
March 27, 2002 Darwin Magazine
Once again around the ROI block. This article is actually very good, one
of the best I've seen lately. One reason for this - the article is not
about lame formulas, but about the politics of ROI. Deriving ROI really is
not rocket science, but it does take a meeting of the minds with the finance
people, as I have said before. Do yourself a
favor and hammer out the formula - your whole company
will benefit.
Customer retention is not enough
March 22, 2002 McKinsey Quarterly
Now you're talking. This article is not for the faint of heart, but
describes from a different perspective the core idea of the Drilling
Down method - changes in customer behavior predict changes in customer
value, and if you can predict these changes, you can make a ton of money acting
on them. Free registration may be required to view the article, but if you
are serious about customer retention and value management, it's well worth the
pain.
Segmentation-
in Energy Utility Deregulation
March 20,
2002 DM Review
Yea, I know, boring industry. But when you think about what will happen
when you separate the wires from the electricity, when any power company can
sell power to anybody - then you have something happening. Find and keep
the best customers - nationwide - and hope your competition takes the low value
ones away. And these guys have some huge piles of data; too bad most of
them can't do anything with it. It may be another 10 years before anything
happens, but mark my words, this is going to be a white hot area some day.
Utility dereg is going to make the long distance fiasco look like a party.
First effort (Enron etc., if you can call that outrage an effort) wasn't real
brilliant. Hope the smart ones are getting ready...
Don't Touch THAT Dial
March
17, 2002 Direct Magazine
Wow, the hipsters at BSkyB are really jamming on the churn analysis front.
Lots of interesting insight into a big-time customer analysis effort.
Folks, recapture programs are fine, but they are very expensive and you often
end up recapturing those most likely to churn again. Churn prediction
coupled with action-oriented retention programs using mass customization is
where it's at. Yea, baby!
Understanding Segmentation
March
16, 2002 Direct Magazine
Play it again, the old song of segmentation. For those of you thinking
about your first attempt at a slice and dice, this article is a good overview of
the considerations. And please, please don't over-segment. That
leads to over-targeting - dumber than rocks are.
Sure Fit Adds $600,000 to Its Print Budget
March 16, 2002 Direct Magazine
Now, what do slipcovers have to do with you? Space ads, and this article
has lots of stats on them. I don't see any web folks really using them yet
- and the classic space ad is how direct marketing was born. But with the
web, you don't have to send a catalog, just send 'em to your website. If
they can make money sending out catalogs, you sure as heck can make money with a
web site - as long as people actually want your product, that is.
GREAT expectations
March 15, 2002 Direct Magazine
The annual CRM confab with people who matter - those living the
implementation. Interesting survey results in here on how customers feel
about having a "relationship" with a company - NOT.
Normalizing Is Abnormal
March
15, 2002 Direct Magazine
Most of you marketing types don't care about this kind of thing, but guess
what? You should. Half the problems you are having with this stuff
can be directly traced to being clueless about the technology. In this
case, your requirements doc for IT regarding that shimmering gold marketing
database you want built. Get with it, will you?
Open Rates Deserve
Far More Respect Than They Get
March 13, 2002 DM News
OK, this is a shameless plug for a partner. But it's worth reading, too,
because it contains solids thinking on how you should track and measure open
rates. That idea about discarding absolute measurement in favor of
measuring relative change, that one sounds real
familiar somehow. If you like this kind of thinking, make sure you
check out the whole story in The
Guide to Web Analytics.
The Challenge in a Tech-Savvy World
March 13, 2002 DM News
Some good stats on multi-channel retailing, accompanied by some horrendous stats
on what marketing people know about their businesses and customers. Wasn't
CRM supposed to solve all this? At HSN, we had the proverbial "360
degree view of the customer" across 12 to 15 different businesses -
in 1992. We could measure cross-channel cannibalization, subsidy
costs, halo effects, the whole thing. What is taking so long for the rest
of the world to catch up?
Use Data, Dialogue for Smarter Work
March 12, 2002 DM News
This article addresses a critical idea many people miss - it is possible
to create a dialogue with customers without ever speaking to them. It's
called "theatre of the mind" in radio - the relationship is whatever
you want the customer to think it is, if you carefully craft it over time.
That's what Relationship Marketing
is all about: action- reaction -
feedback.
How to Avoid Information Overload
March
12, 2002 DM News
There is a growing feeling one of the things wrong with the web is copy - it's
usually awful. After all, the web is a reading / learning experience, so
the copy should be very important. Copy is extremely important if you are
trying to motivate a visitor to do something, and along those lines, here are
some tips for writing compelling copy.
Test-Measure-Refine
-
80 Years Later It Still Works
March 5, 2002 DM News
Yup, sometimes you just have to remind people of the basics. In this case,
since 1923, when the direct marketing classic "Scientific Advertising"
was first published. It's been that long folks, and people are still
arguing about branding vs. direct, etc. It still surprises me every day
how few of the tried and true approaches - like iterative testing - folks are
using on the web. Let's get with it, people!
Dreyfus analyzes data to retain customers
March 2, 2002 One-to-One Magazine
Hmm. "We've been able to predict the customer is going to exit, three
to six months before it actually happens, with an accuracy rate of 80 to
85%." Sound fantastic? It isn't, and you can do
the same thing yourself.
One customer many needs
March
1, 2002 One-to-One Magazine
I get a lot of question about insurance modeling, and this article does a pretty
good job of running down all the angles. If you are in a company with a
"distributor model" where there are layers between you and the end
customer, you might give this a quick read.
Must Read Classic Articles
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