Drilling Down

Turning Customer Data into Profits

 with a Spreadsheet

Site and Book topic:

Maximizing marketing ROI with customer behavior analysis


Learn Methods, Metrics
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Drilling Down Software

The Drilling Down MS Access application provides the capability to create a "loyalty score" for each individual customer in a file of customer transactions.  These scores rank each customer against all the other customers for likelihood to respond to promotions and for potential future value to the business, enabling the tracking of customer LifeCycles  and the creation of very high ROI promotions.

You can achieve the same results by using only an Excel spreadsheet and following the instructions in the book.  It takes only 30 minutes to score customers having up to 65,000 transactions (purchases, visits, page views) by hand in an Excel spreadsheet.  The MS Access application is not required to be successful using the techniques in the book; it serves to more easily score customers with a large volume of transactions (65K - 100K) or so; over that you probably want to use the business rules provided in the book to take the task over to SQL server or Oracle. 

Customers with the highest scores tend to be best customers and have the highest response rate to promotions.  Customers with the lowest scores tend to be customers in the process of defecting from the business and have the lowest response rate to promotions. 

Any group of customer activity transactions with a Customer ID, number of units, and date of activity can be scored, for example, purchases, page views. visits, log-ins, downloads, etc.

If you're not sure what the above means or why it's incredibly important to improving response to marketing promotions and increasing the profitability of your business, you might take the tutorial first before reading on.

There are 25 possible customer scores.  The highest scoring customers can be anywhere from 5 to 50 times more likely to respond to promotions than the lowest scoring customers, depending on the type of business.  The scores allow you to target customers by likelihood to respond and future value, driving up sales while shrinking the costs of promotions.  Scores also form the basis for addressing the 3 key elements of profitable customer retention programs -  Profitability of Offers, Identifying Best Customers at Risk, and Optimizing New Customer Value.

The application displays the total customer count for each score.  Users can then see and export a table of all customer ID's and their individual scores in preparation for a marketing campaign. The book then describes using these scores for many different marketing purposes, including customer valuation, retention, determining optimal media purchases, structuring the web site to benefit best customers, and preventing customer defection.

This is a basic application, running on MS Access and using an Excel Pivot Table for output, covering the "base case" from the Drilling Down book.  For those who have the capability to write software apps or are working with rules-based CRM engines, the business rules for addressing all the above marketing techniques are provided in the book.

You can achieve the same results by using only a spreadsheet of any kind and following the instructions in the book.  MS Access is not required to be successful using the book, only to run the application included with the book.

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