Who hasn't enjoyed the sandwich popularly known as the "BLT" (Bacon, Lettuce and Tomato)?
You take three ingredients that, on their own merits, are acceptable. When you combine the three ingredients, however, you end up with a classic.
This effect is known as an "interaction". Interactions occur when elements combine to have a bigger impact than when evaluated on their own merits.
In the case of a BLT, imagine that each ingredient gets a score of "3".
The impact isn't additive ... 3 + 3 + 3 = 9.
The impact is multiplicative ... 3 * 3 * 3 = 27!
So often, we look at straight averages. We compare customers who did "x" (i.e. multichannel customers are the best customers), vs. customers who did not do "x". When we execute tests, we execute A/B splits, allowing us to learn if one factor is better than another.
We learn about the many opportunities our online, catalog and retail businesses have when we do A/B/C/D splits ... testing all sixteen combinations of four factors.
In real life, excellence occurs when factors "interact". We need to structure our jobs to find the factors that interact favorably.
For the company we're studying, here we see what customers spent, on average, by price band over the past five years. Notice that...
Say you manage a paid search program. Last month you spent $100,000 and the following happened. Cost = $100,000. Clicks = 200,000. Co...
Two weeks ago I ran a poll on Twitter, asking if users calculated the profitability of their marketing efforts. 32% said "no"...
So Amazon created a major shopping event out of nothing, and now they're killing it in July (a month when nobody can sell anything ot...