August 30, 2010

Summer Segmentation: It's Complicated

By now, you've read a full summer's worth of posts on Segmentation.

Oh, the memories!

On a one-by-one basis, you can segment customers on the basis of the attributes illustrated over the past three months. It's big time fun, and you'll make a bunch of bacon in the process.

But life is more complicated than that, isn't it?

What about the online customer who buys after receiving direct mail that drove the customer to Google to search for the item that the customer purchased, causing you to pay twice for the right to encourage this customer to order merchandise?

What about the online customer who buys from only one merchandise divisions, and the offline customer who buys from that merchandise division and three others? Is there a difference between the customers?

In the real world, there are dozens of dimensions of complexity, dimensions that make it really hard to use a traditional segmentation strategy to understand customer behavior.

This fall, we transition the discussion from Segmentation to Digital Profiles. Digital Profiles are my way of collapsing dozens or even hundreds of dimensions down to a manageable number of segments, segments that contain unique combinations of customer behavior that lead to actionable marketing strategies.

Join me this fall as we explore advanced segmentation strategies ... what I call Digital Profiles!

Profit per New Customer

It's common for folks to measure cost per new customer. Total Marketing Cost = $10,000. Total New Customers = 130. Cost per New C...