Issue #1 = Weighting Dollars: A telephone order in 2002 is virtually meaningless. An online order in 2008 has some meaning. A mobile order in 2012 means a lot. I like to use the following weighting of historical orders/dollars (these weights are company-dependent ... more Judy-type customers usually causes the weights to be greater ... more Jasmine-type customers usually yields smaller weights).
- Orders 0-12 Months Ago = Weight of 1.00.
- Orders 13-24 Months Ago = Weight of 0.50.
- Orders 25-36 Months Ago = Weight of 0.25.
- Orders 37-48 Months Ago = Weight of 0.15.
- Orders 49-60 Months Ago = Weight of 0.10.
- Orders 61+ Months Ago = Weight of 0.05.
Issue #2 = Weighting Channels: This one, of course, is important. Each advertising channel gets a weight. Now, we can debate the weights until the cows come home, and there isn't a right or wrong answer here, so pick up a broom and do some work. Here's a starting point for some of you ... my weights are client specific, of course.
- Mail Orders = Weight of 0.00.
- Telephone Orders = Weight of 0.15.
- Online Orders Matched Back to a Catalog = Weight of 0.30.
- Search Orders Matched Back to a Catalog = Weight of 0.40.
- Email Orders Matched Back to a Catalog = Weight of 0.50.
- Pure Search Orders = Weight of 0.60.
- Pure Email Orders = Weight of 0.70.
- Online Advertising Orders, No Offline Interaction = Weight of 0.75.
- Pure Online Orders = Weight of 0.80.
- Mobile, Social, Flash Sales Orders = Weight of 1.00.
- Tablet Orders: Right now, I don't evaluate these different than online orders, we need proof that these orders lead to different subsequent behavior, different than classic e-commerce.
Tomorrow, I'll show you a series of examples of how to calculate Judy, Jennifer, and Jasmine.