RE: online-ads digest: February 05, 2002

From: Jim Novo <jimnovo_at_sprintmail.com>
Date: Fri 08 Feb 2002 09:40:21 -0500

Kelley Mitchell <esc1krm_at_ups.com> wrote:

> By analyzing 2 years' of customer purchasing
> data, we were able to segment our customers into 3 "buckets"
> based on usage level and then determine an average "life cycle"
> for a customer within each group...When the life cycle was close
> to completion, we sent a very friendly email offer. This
> simple communication increased existing customer purchases
> by over 20%! We were able to extend the life cycle by weeks,
> even months, dependent on the customer's "bucket".

Kelley has discovered the advantage of concentrating marketing
efforts on defecting customers. Why concentrate on defecting
customers? The two fundamental rules of High ROI Customer
Marketing:

1. Don't spend until you have to
2. When you spend, spend at the point of maximum impact

If you follow this approach, you will always get the highest
return on your customer retention spending. But how do you
figure out the "when" to spend and the "which customer" that
are the bedrock of these rules? In other words, how do you
define the "buckets" used by Kelley, or the even more
profitable "Trip Wires"?

There are proven, easy-to-implement techniques for doing this
anyone can put to work using only a spreadsheet. In formal
terms, what Kelley has done is taken advantage of the database
marketing metric known as Latency, one of the most powerful
(and simple to use) predictive models out there.

I've written a complete (and free) tutorial on setting up and
using the Latency metric to make more money marketing to your
customers. It shows you how to figure out what your most
profitable "buckets" might be. See:

http://www.jimnovo.com/Behavioral-Marketing.htm

This material is from my monthly newsletter, where we are now
going through "Real World Examples" of using the Latency
metric. To read one of these examples, see:

http://www.jimnovo.com/Newsletter-1-2002.htm

and scroll down to "Tracking the Customer LifeCycle: Real World
Examples." If you are interested in the data-based approach to
marketing, you can sign up for the newsletter at the bottom of
the pages above, or subscribe by sending any e-mail to:

drillingdown-on_at_mail-list.com

Jim

Jim Novo | Author: Turning Customer Data into Profits
Learn simple High ROI Customer Marketing techniques at:
http://www.jimnovo.com





Received on Fri Feb 08 2002 - 08:40:21 CST