November 16, 2011

Traditionals, Transitionals, Transformationals

Sometimes, we make everything way, WAY too hard, don't we?

If you really want to simplify things, do the following:
  1. Any purchase via Mail, Phone, or Online via Catalog Matchback is considered a TRADITIONAL purchase.
  2. Any purchase via Email, Search, Affiliates, Banners, Retargeting, and other Online Marketing techniques is considered a TRANSITIONAL purchase. 
  3. Any online purchase not attributed to any marketing, any Mobile purchase, and any Social purchase is considered a TRANSFORMATIONAL purchase.
  4. Weight historical purchases ... purchases 0-12 months ago = 1.00 * Demand ... purchases 13-24 months ago = 0.50 * Demand ... purchases 25-36 months ago = 0.25 * Demand ... purchases 37+ months ago = 0.125 * Demand.
  5. Multiply all historical orders by Weighted Demand.
  6. The segment (traditional, transitional, transformational) that holds the most weighted historical demand is the segment that the customer is classified in.
At this point, every customer is placed into one of three segments (traditionals, transitionals, transformationals).  Now, dump this segmentation outcome into your email campaign results, your web analytics platform, and your catalog matchback algorithm.  Measure (or, as they say on Twitter, #measure) campaign performance against each customer segment.

Be prepared to be dazzled!

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