April 23, 2019

Hillstrom's Targeting: Folding In Your Anniversary Program

Recall that we have grades for customer quality:

  • A
  • B
  • C
  • D
  • F
Now, remember when you were in school and you earned an A+ or a C-? We can apply comparable logic to our A/B/C/D/F framework. Add a "+" if the customer ever bought from the month we're currently in. For instance, if the customer ever bought in April, add a "+" to the segmentation variable. This means that the customer is likely to be "extra responsive".

How do I know that the customer will be "extra responsive"? Well, I've got data on my side! So do you!!

Here's an example, for "A" customers.
  • No Prior "Anniversary" history = 13.2% April Rebuy Rate.
  • Prior "Anniversary" history = 24.6% April Rebuy Rate.
For "B" customers:

  • No Prior "Anniversary" history = 7.0% April Rebuy Rate.
  • Prior "Anniversary" history = 11.0% April Rebuy Rate.
For "C" customers:
  • No Prior "Anniversary" history = 4.2% April Rebuy Rate.
  • Prior "Anniversary" history = 6.8% April Rebuy Rate.
For "D" customers:
  • No Prior "Anniversary" history = 2.6% April Rebuy Rate.
  • Prior "Anniversary" history = 4.3% April Rebuy Rate.
And for "F" customers:
  • No Prior "Anniversary" history = 1.4% April Rebuy Rate.
  • Prior "Anniversary" history = 2.2% April Rebuy Rate.
It even works for lapsed buyers. Here's the 13-24 month file:
  • No Prior "Anniversary" history = 1.6% April Rebuy Rate.
  • Prior "Anniversary" history = 3.8% April Rebuy Rate.
25-36 month buyers:
  • No Prior "Anniversary" history = 1.0% April Rebuy Rate.
  • Prior "Anniversary" history = 2.0% April Rebuy Rate.
37-48 month buyers:
  • No Prior "Anniversary" history = 0.6% April Rebuy Rate.
  • Prior "Anniversary" history = 0.9% April Rebuy Rate.
49-60 month buyers:
  • No Prior "Anniversary" history = 0.3% April Rebuy Rate.
  • Prior "Anniversary" history = 0.5% April Rebuy Rate.
Yup - the methodology works. The simple fact that the customer has an "Anniversary Purchase" 12 months ago yields rebuy rates that are 70% to 100% better. Heck, this isn't even an "Anniversary Program" ... which would REALLY cook via this framework.

In email marketing, this tactic works well. Feature what the customer wants to see, and show 'em stuff that aligns with an Anniversary Purchase. Simple! Now go do something with this knowledge, ok?

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