November 10, 2010

Cyber Monday Is Coming

You already know that I am not a fan of psuedo-Holidays invented by trade organizations, psuedo-Holidays that are predicated on the basis of discounts and promotions.

That being said, most of you love Cyber Monday.

So here's what I'd like for you to do.  Create a regression model with the following variables.
  • RFM-based variables for 2009.
  • Dummy indicators, one for each day of the year in 2009.
  • Total profit dollars generated, per customer, in 2010.
Run a regression model.  See if Cyber Monday yields a positive or negative coefficient when it comes to generating profit in 2010.  If customers who buy on Cyber Monday yield profit that is in the top 3/4th of all days (not top 1/4th mind you, the top 3/4th of days), then Cyber Monday patronage is helpful to your business.

If the variable comes up in the bottom 1/4th of all days in 2009, then consider what your promotional strategy should be during Cyber Monday 2010.