Must Read Classic Articles (continued)
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.
Cooking
a Good Segmentation
October 30, 2001 DM Review
This is a great article on the fine art of customer segmentation. Just
because you can subdivide your customer base into 100 segments doesn't
mean you should. This happens a lot at companies using data mining before
they are ready for it - they find unique segments they were not aware of,
and there's 14 people in a database of 1 million in the segment.
Over-segmentation is the root cause of the disease over-targeting.
Tall
Women's Clothing Site Proves Viable Niche
October 25, 2001 E-Commerce Guide.com
Niche, baby, niche. This is the third story we've seen about the success
of ultra-focused retailing on the 'Net. Why are these businesses so successful? Instead of trying to rework the medium, they take advantage of
the very nature of it - the audience is searching for information on products
they can't find. Lots of benchmarking metrics in this one - orders,
revenues, costs, customer counts.
Measurement
Made Simple
October 22, 2001 ClickZ
Interesting. The CEO of an analytics company saying people have made
analyzing customers too complicated. Of course, I
agree. Also interesting is he focuses on a technique my readers are
familiar with - measuring change
rather than focusing on absolute numbers. If you're looking for a
simple customer profiling and analysis method, try
this one.
SAS
chief: 'Analytics' an overused term
October 17, 2001 searchCRM.com
Oh man, is this guy a classic. Kicked butt and took no prisoners.
And he's right. Analytics should be about prediction, else they're just
reports. Like predicting the likelihood of a customer to remain a
customer, which is what my
book is all about - and you can do it with an Excel spreadsheet. My
method won't give you a "likelihood between 0 and 1 of remaining a
customer" like Mr. Goodnight's software, but ranks the same likelihood on a
25 unit scale, most likely to least likely. He says of investment bankers,
"We're having to beat them off with a stick". Hmmm... I
wonder...
Bigstep.com
Takes Giant Step in Improved Customer Targeting
October 16, 2001 iMarketing News
Gotta love it. The folks at Bigstep.com read
the Drilling Down book and have pulled off their first Latency-based
targeting effort, bagging only a 33% increase in conversion versus the control
group. Classic use of the technique, finding a trip
wire for their search engine listing services at 90 days after a site went up. Also
bagged a 500% - 800% increase in response rate on general campaigns by targeting
customers most likely to respond. Well done!!
Next-Wave Business Analytics
October 12, 2001 Information Week
And there it is, folks. The next wave is here, and it's what I've been
saying right here on this site for a year now. "Change is the major
concern in business...What's needed are business analytics tied to sensors and
thresholds that can alert managers to the slightest nuance of change...
(managers)
want a tool to alert them that platinum customers are buying fewer goods, or
that there's a hemorrhage of platinum customers dropping down to gold, silver,
or bronze levels...to know if trends are showing danger signs. I'd also
like to know at an individual level who those people are."
Honestly! A real chin scratcher, huh? Did he read this on my home
page? Did You? He's talking about Trip
Wire Marketing.
Direct
Marketing and CRM
October 11, 2001 CRMCommunity.com
Well, here the debate starts. This is the first article I've seen that
comes right out and says that the success of CRM depends on people who have
spent their careers in direct marketing and understand the business of analyzing
customer data. Comments at the end of the article from the other side of
the camp hang on to the "it's really different this time"
mantra. Right. Check your definition of direct marketing, please -
it means conducting business directly with customers, not "focusing on
outbound selling and generating a response from the customer." Experience
matters.
Old-Economy Lessons for Web Marketers
October 10, 2001 DM News
This article states concisely the argument for "real" database
marketing, as opposed to the version preached by the pundits and the trade mags
for the past several years. There is a science to this stuff and if you
understand what you are doing, it can be very profitable - particularly in tough
economic environments. Plus a reinforcement of an idea few pay attention
to - good customer retention starts with smart customer acquisition. Learn
who your best customers are and go get more like them; it's the easiest money.
Work With It
October
8, 2001 Direct Magazine
"At its core, customer relationship management is simply about increasing
profits and sales by better understanding who your customers are, which ones are
driving in the greatest profits, what your high-value customers want, and how to
satisfy them." I love this! Another CRM skunkworks article, (like this
one) talking about doing CRM using existing or scaled back resources.
Folks, the 80/20 rule doesn't just apply to customers - you can usually get 80%
of what you need with 20% of the resources - all the big expense is in getting
to that last 20%. The
reason I get excited about articles like this is simple: I've been saying this same
thing for 2 years. Want to implement "simple CRM"? I
can do it for you.
Number Crunching
for Customer Understanding
October 8, 2001 CRM Magazine
"The average Global 3000 firm spent in excess of $3 million building and
maintaining their data warehouses. Yet more than half were unable to link
the spending with any distinct business benefit." That's outrageous;
what else is the warehouse for? Sound like plenty of potential business
out there for the High ROI Workshop.
What Makes E-Commerce Work
October
2, 2001 iMarketing News
If you didn't listen the first time ( 2 years ago),
here it is again - not everybody is a remote shopper, and the behavior of
a person is more highly predictive than any affinity. The most
demographically targeted prospect is less likely to buy online than just about
anybody who has purchased online at least once. You should be renting catalog
lists, not magazine lists, if you are an online retailer. Dig?
And don't forget to ask for a Recency select.
The Beauty of 80 Percent
October 2, 2001 iMarketing News
Great piece by one of the pillars of the DM community. People continue to
misapply and distort the meaning of the Pareto (80/20) and related Zipf
Laws. They do not mean to ignore or fire
customers. They just quantify one of the cardinal rules of direct -
value is unevenly distributed in every population, and there are number of
different ways to use this idea to drive
higher revenues while reducing costs.
Four Differences Between Loyalty, DM
October 2, 2001 iMarketing News
Those interested in loyalty marketing but don't understand how it fits into the
whole direct / database marketing scheme of things may enjoy this short
comparison. If you want to know what makes a loyalty program work and make
money, I can help with that.
How
Much Are Your Customers Worth?
September 24, 2001 1to1.com
Well folks, it appears there is such a thing as a proxies for LifeTime
Value and the Peppers & Rodgers Group wanted you to know. Of
course they don't tell you how to use them for anything, so if you want
to know that, check here, here,
and here. And here.
End the scourge of wasted data
September 21, 2001 crm-forum.com
This article is a great explanation of a problem many data-driven marketers face
and a practical solution. In fact, this is exactly what we did to set up
the SportLine loyalty program tracking.
Learn how to create action-oriented reports with this data in the Metrics
Workshop.
Gartner
glum on CRM success rates and costs
September 14, 2001 searchcrm.com
Well, they're not that glum. Rather, they suggest you should go through a
2 step process - first understand the customer, then implement the CRM
solution. Now where have I heard
that before? If this idea makes sense to you, let me help you make
it a reality.
Turning
Customer Data Into Effective CRM
September 10, 2001 DM News
"Behavioral data is most effective in predictive modeling. A customer's
purchase and product usage data is much more likely than the customer's
demographic data to predict that customer's likelihood to respond to a marketing
offer." Sounds familiar.
Churn
Models and Customer Reincarnation
September 6, 2001 CRM-Forum.com
This article is a little deep, but I'm sure you folks can handle it. Some
good material on ways to think about LifeTime Value.
The idea of "2nd LifeTime" is not one I embrace; in my work it's just
part of the whole. I'm also not a big fan of "win-back", since predicting
defection using "trip wires" is much more profitable than trying
to win them back after they split. Think about it. But in this
article, these terms serve to illustrate a point and I think it is well made,
regardless of the terminology used.
Re-evaluating CRM cliches No
4:
Customer Relationship Management (CRM)
September 4, 2001 CRM-Forum.com
Richard Forsyth is back with the last (say it isn't so!) in a series debunking
and generally poking around CRM-speak. In this wrap on the topic, Richard
explores why CRM may be just another word for "good business sense".
DIRTY
SECRET OF CRM: IT'S 20% STRATEGY, 80% GRUNT WORK
August 30, 2001 BI.ITtoolbox.com
I love this kind of article, especially when it comes from the Business
Intelligence community. Many might think they would support complexity as
a way of life. Not true. They're more interested in results, and
flashy CRM implementations have them pi**ed off. I could do without an ALL
CAPS title though, or is this just a (needed) sign of rebellion?
* Re-evaluating
CRM cliches No 3: Customer Lifetime Value
August 27, 2001 CRM-Forum.com
Richard Forsyth once again delivers value in his honest assessment of a key
metric, and if you've read any of my writings, some of it will seem
pretty familiar. Nevertheless, a strong contribution to the debate and
a great read.
Borders' E-Mail Promotions Hook Readers
August 24, 2001 DM News
Double Trouble, Folks. Using e-mail to drive offline sales is working for
Borders, and they provide some (limited) stats on the success of the
program. Between this article and the one below, perhaps retail is finally
beginning to understand how to do "real time".
One-day
Promotions Producing Major Lifts for eBags
August 22, 2001 Internet Retailer
Now we're getting somewhere! You've heard of eBags, right? The guys
who have been tracking customer behavior using Recency
from the beginning? Now they're pulling an old TV Shopping trick - and in
the process, really becoming an interactive retailer. The significance of
this tactic, particularly using this trick to goose year over year compares, can
not be overlooked. We are getting there!
Re-evaluating CRM cliches
No 2: A 360 degree view of customer
August 21, 2001 CRM-Forum.com
Richard Forsyth is an interesting voice crying in the wilderness of CRM.
He suggests - gasp - you don't need a 360 degree view of the customer, because
much of the information collected is irrelevant and not of business value.
I couldn't agree more. What is important is to collect
the right data
A Dotcom That's (Holy Discredited Business Paradigms!)
Doing Things Right
August 20, 2001 Business 2.0
Yes, they're still alive, and the Red Envelope story is becoming a popular one
to trot out as an example of "how to do it" in online retail.
Catalogs and direct mail, my friends. Best targeted acquisition tool there
is for driving new customer acquisition. Provides stats.
LTV- Nice Idea or Critical
Concept
August 17, 2001 Direct Magazine
OK, that makes two of us. David Shepard, a mentor of mine, makes the
really outrageous suggestion that product managers should manage by the source
of the customer. This would maximize the value of the customer to a
company, instead of to a product manager, which can be a sub-optimal
approach. When I tried this about 5 years ago, I almost blew up the
company. Maybe times have changed.
Data Mining Enables Insights Competitors Can’t Easily Duplicate
August 13, 2001 iMarketing News
If you've been around here a while, you probably know I'm not a huge fan of
"data mining", particularly if your company has not done any behavioral
profiling before. That said, this article strips away a lot of the
dreck and talks about some simple approaches (including CHAID and CART) that can
often be implemented at low cost. The key here, as always folks, is to not
spend a ton of money getting started. Baby
steps first, then grow the complexity of your effort after you have an ROI
leg to stand on.
Why New-Move Mailing Lists Work
August 9, 2001 DM News
Continuing with the theme this month of offline direct marketing customer
acquisition techniques that will work online, you have to check out this
article. One of the most comprehensive pieces I have ever seen on new
mover lists, including psychographics. These lists are not for every
business, but the lifestyle changes created by a move open up a lot of
opportunity to start new relationships.
Steps to Improve E-Mail Targeting
August 8, 2001 iMarketing News
A good primer on customer segmentation, folks. Please note how important Recency
and response models are to the segmentation
efforts; if you only use demo / geo cuts, you are leaving out your most powerful
variable - the elements of customer behavior.
Leaving
the Shopping Cart Behind
August 6, 2001 eMarketing Magazine
There's been a lot written on shopping cart abandonment by the usual research
hacks. This piece is a little different because people who have actually
studied the behavior are weighing in with stats. Some of the usual
suspects (hidden ship & handle charges) are covered, but there are more than
few new tidbits in here for those selling products online.
J Crew’s personalization strategy- A tool to drive ROI
August 3, 2001 Internet Retailer Conference
I know some of the gang a J Crew and they are smart folks. This article
contains a point not well developed in much of the drivel on personalization -
the explicit versus implicit approach. Some would call implicit
personalization "customization". No matter. If you are not
thinking along these lines, your approach is probably sub-optimal.
Understand customer behavior first; then decide
on your mix of explicit versus implicit marketing.
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