September 09, 2008

Who Gets Credit For The Order?

Your customer purchases in a store on September 2. She received an e-mail campaign on September 1, a catalog mailing on August 25, and visited your website on August 31 after conducting a Google search for a branded keyword.

Who gets credit for this order?

Who cares?

So many folks are arguing about how to allocate orders. An Executive recently told me "I don't care what anybody says, we execute marketing campaigns, we're a campaign company, and we have to prove whether they work or don't work."

Of course, the allocation process is futile. Parsing orders based on fractional allocation assumes that the marketer knows how marketing tactics interact. We marketers
know that we don't know how we truly make our own purchase decisions, so what makes us think we can fractionally allocate orders based on business rules?

You're going to see more folks leaning toward a holistic profit scorecard for each segment of customers. Here's what a holistic profit scorecard might look like for one segment of buyers, spanning the past five years --- go ahead and click on the image for a better view:

You can allocate the living daylights out of transactions, or you can perform a holistic review of customer performance. What does the table tell you about customer behavior?
  1. Catalog pages are down significantly over time, yet demand has generally held.
  2. Google, Google, Google! Website visits are increasingly driven by Google. What does this mean for the future of your brand?
  3. Looks like e-mail marketing frequency has gone berserk, with a modest increase in sales.
  4. Paid search expense continues to increase over time. This is expense that, in some cases, you don't necessarily control. Your customer decides to click on the keywords you're willing to pay for.
Let me be clear --- this holistic view requires the Web Analytics community to amp-up their game. The holistic view of customer behavior demands that Web Analytics tools fully integrate with the customer database. This means that the Omniture and Coremetrics folks need to partner with the e-mail marketing folks. And once this partnership has been cemented, you'll need to go get those old-school catalog marketers, incorporating tehir results. That should be fun. But not as much fun as when you go pull in the SAS programmers who have access to every piece of customer data in the company --- and if you don't have a SAS programmer, you have a SQL programmer who can do the same thing for you.

Get 'em all together, and start viewing customer behavior in a holistic manner!

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