July 27, 2010

Summer Segmentation: Cyber Monday

If you've followed my blog over the past four and a half years, you know all about my long-standing detest of Cyber Monday, a online retailing event contrived by a leading trade organization to encourage shoppers to take advantage of margin-eroding discounts and promotions that benefit promotion of the trade organization that invented the holiday.

Without evidence to the contrary, I assumed that customers who purchased via discounts and promotions on this contrived holiday would not repurchase in the future.

So, I created a segmentation variable for a client called "Cyber Monday". Any customer purchasing on Cyber Monday received a "1", all other customers received a "0" for Cyber Monday purchasing history.

I plugged this variable into a statistical model ... and after controlling for recency and frequency/monetary-value and a host of other variables ... I learned that past purchases on Cyber Monday were not detrimental to subsequent customer value, no positive or negative influence was detected (the variable had a small, negative coefficient, but it was not statistically significant).

So do some due diligence ... create your own Cyber Monday variable, and see if it has a positive, neutral, or negative influence on the long-term value of customers. Don't read opinions and assume that the opinions are truthful, prove a hypothesis for yourself, for your business!

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