April 10, 2012

Loyalty Spoiler

You are probably running your own Loyalty Spoiler analysis, right?

A Loyalty Spoiler is an item that sells well, but hurts the downstream loyalty of a customer.

You'll see this analysis in email marketing.  You want to prop-up the performance of an email marketing campaign, so you feature a half-dozen items that will sell well.

You read the results, you generate sales, and then you move on.

In a Loyalty Spoiler analysis, we measure the downstream loyalty of customers who purchased specific items.  If, after controlling for the quality of the customer purchasing an item, we find that equal customers perform worse after buying a certain item, then the item is a Loyalty Spoiler.

We'll talk about this topic in upcoming posts.