Beruflich Dokumente
Kultur Dokumente
Customer Transactions
Marketing Database
82%
86%
80%
70%
Communications work!
Building
a relationship with customers can be highly profitable Using a database to recreate the old family grocer is a winning strategy Relationship marketing is the way to go
Lifetime Value
where to put your retention dollars y the value of each retention strategy y where to put your acquisition dollars y how much to spend on acquisition
y
Groups Newsletters Surveys and Responses Loyalty Programs Customer and Technical Services Membership cards and status levels Event Driven Communications
I would like to remind you that your wife Helenas birthday is coming up in two weeks on November 5th. We have the perfect gift for her in stock. As you know, she loves Liz Claiborne clothing. We have an absolutely beautiful new suit in blue, her favorite color, in a fourteen, her size, priced at $232.00. If you like, I can gift wrap the suit at no extra charge and deliver it to you next week, so that you will have it in plenty of time for her birthday. Or, I can put it aside so you can come in to pick it up. Please call me at (703) 754-4470 to let me know which youd prefer. Sincerely yours,
Robin Baumgartner
Robin Baumgartner, Store Manager
Cost Percentage 50% Costs $7,000,000 Acquisition Cost $32 $6,400,000 Total Costs $13,400,000 Profit Discount Rate NPV Profit Cum NPV Profie Lifetime Value $600,000 1 $600,000 $600,000 $3.00
Increase the spending rate y Decrease the direct costs y Decrease the marketing costs
y
Compute a base lifetime value y Dream up a new strategy. Estimate the benefits and costs y Determine whether your new lifetime value goes up or goes down y Dont undertake any new strategy until you can prove it will be successful
y
DMA survey shows 52% of Consumer Only marketers use LTV. 25% of B to B use LTV. 49% Larger companies ($100 million or more) use LTV. 32% smaller companies use LTV 65% plan to use LTV more extensively in 2006 70% use LTV to decide when to reactivate a lapsed customer. 68% determine promotions by LTV
Break
Segment Strategy
An ideal segment
y y y
y y y
Has definable characteristics in terms of behavior and demographics: for example, Retired Couples Is large enough in terms of potential sales to justify a custom marketing strategy with appropriate rewards and budget Has members who can be motivated by cost effective rewards to modify their behavior in ways that are profitable for your company Makes efficient use of available data to support segment definition and marketing efforts Can be measured in performance, with control groups Justifies an organization devoted to it: can be a single person, or part of a persons time, but there should be someone who owns each segment.
Communications to the segment (direct mail, email, on-location personal attention) Rewards designed to modify behavior Controls to measure the success of the strategy A budget for implementation of the strategy Specific goals and metrics for engagement: for behavior modification An organization that accepts responsibility for the segment
How one non profit measured success by cluster- Their best cluster-
Success from mailing only to the best, and not mailing the worst
y
Web customers are more affluent Their average order size is 12% higher than phone orders. The cost of the web order is 16% lower than phone orders. Typical incentive offered is 5% off on any order over $50. Result: 11% of non web customers shift to the web every year.
Club members bought 11 times more than non club members. In two years, 81% of club members became multibuyers. The club boosted retention
23.4%
Goal Club
115
110
105
100
100
95
90
Control
Test
100
120 100
80
60
40
20
Control
Test
What to measure
y y y y y y y y
Attrition and retention of both groups Migration upward and downward Incremental sales per program and per season Frequency of purchases Dollars spent per trip and per season Number of departments shopped Number of items purchased Share of customers wallet
Live Agent
74% of shopping carts abandoned at checkout. y Reason: customers have some question. They are unsure about the product, service, color, delivery, etc. y Solution: put a live chat button at checkout time. y Have live agents available to answer questions. y Result: increased retention and sales
y
Caller ID
Use Caller ID to bring customers complete purchasing history on the screen before the agent begins talking. y Result, she can talk to the customer as if she knew her. y Result: Increased retention. Greater opportunity for cross sales.
y