It's Time!!

Four months go by in the snap of a finger!

Remember just two months ago when you were told you HAD to have a PERECT Cyber Monday experience with 70% off or you'd disappoint today's savvy shopper? Well, how did all that work out for you?

In this run of the Elite Program ($1,000 for existing clients, $1,800 for new clients, no commitment moving forward) I'll look at how many new customers you generated from Cyber Monday and I'll see if they purchased since vs. other customers acquired just before / just after Cyber Monday. That and my usual Rolling Twelve Month Analysis / Comp New Buyer / Comp Segment / Annual Repurchase Metrics / Next Year's Forecast.

It's virtually free. Here's the criteria.

• Pre-pay the fee on or before February 15.
• 5 Years of Customer Data Through January 31.
• Data due by 2/15.
• Analysis completed by 2/28.

Contact me now (kevinh@minethatdata.com) and we'll get busy!

What Would An Action Stream Look Like?

The results were absolutely compelling.

Let's say the customer last purchased eight (8) months ago, and just visited your website. What should you do?

• If you are obsessed with discounts, it's time to kick those into high gear. Instead of 25% off, make it 35% off. You'll love it, your customer will like it.
• Show the customer new arrivals for the product category that the customer previously purchased from.
• Ask the customer if the customer needs to replenish what was previously purchased.
• Promote the items that the customer looked at last month.
• Promote complementary items to the items the customer just looked at.
• Promote complementary items to what the customer purchased previously.
• Ask your customer to engage with more of your content.
• In retail, tell the customer of upcoming in-store events the customer may want to participate in.

When I log into the customer forums on Headphones.com, I am sent into an Action Stream based on the content I looked at.

This stuff works.

And there are dozens of vendors who will help you do it.

So what stops you from doing this stuff?

It Happens With Best Customers As Well

Here's our table for customers with 5+ purchases, segmented by recency and a website visit in the past month.

The "Index" column is of interest here ... we were seeing gains of 2x-5x among lower-quality customers ... the index here is much lower, though any one of us would love to market to a customer 50% more likely to buy than a comparable customer, right?

I mean, look at 13-15 months of recency.

• No Website Visit = 9.5% chance of buying next month.
• Yes Website Visit = 18.7% chance of buying next month.

Come on!

This stuff is so easy ... we're shooting fish in a barrel here. Kick off an Action Stream for the website visitor, with unique marketing activities tailored to that customer BECAUSE the customer just signaled to you that the customer is interested in you ... the customer took action, now it is your turn to take action!

• P.S.:  Taking action does NOT mean sending your same email campaigns that you send to everybody else. You have to do something different, for this specific customer.

Seasonality is Amplified

Back to our table from yesterday, reviewing customers with two life-to-date purchases, measuring how they perform in the next month based on their recency and based on whether the customer visited your website in the past month.

Did you do you homework assignment from yesterday?

Look at recency = 12 months. If the customer last purchased 12 months ago, the customer is more responsive than at recency = 2/3/4/5/6/7/8/9/10/11 months ago. That's some serious seasonality going on.

Now look at what happens if the customer is at recency = 12 months AND the customer visited your website last month? That customer ... has a 16.0% chance of buying next month. It's the customer most likely to purchase in the entire table.

Is your old-school RFM segmentation system able to see that happening?

The job of a marketer is to get seasonal buyers to the website JUST BEFORE the season of interest is about to happen. And if the customer actually cares enough to visit, you kick off an Action Stream of unique marketing activities tailored to that individual customer.

Do Better Customers Behave Similarly?

Yes!

Which means better customers also deserve Action Streams that are uniquely tailored to them.

Here's an example of customers with two life-to-date purchases, segmented by recency and visit / no visit in the past month, measuring rebuy rates in the next month.

If you last purchased 19-24 months ago AND visited the website in the past month, you are more likely (8.8%) to buy in the next month than a customer who bought 1 month ago and did not visit your website (7.8%).

So yes, better customers behave similarly. 

If you last purchased 25-30 months ago (for instance) and visited the website in the past month, you darn well better craft an Action Stream of unique marketing activities for that highly responsive customer.

Homework Assignment:  Look at the row with twelve months of recency. We'll talk about that row tomorrow.

What Is An "Action Stream"?

You'll hear me talking about "Action Streams" in the next few weeks, and for good reason.

What is an "Action Stream"?

It's the (unique/different) marketing activity you initiate when a customer "takes action". You want customers to take action (to "engage" as the muttonheads say), it shows you that the customer is interested in you.

Want to see an example of why you need Action Streams?

The table below is for customers with one (1) life-to-date purchase. Each row represents months since last purchase. There are two columns of interest ... one column represents repurchase rates in the next month for customers who did not visit your website last month ... the other column represents repurchase rates in the next month for customer who DID visit your website last month. Which group of customers do you think performed better in the next month?

Oh my goodness!

A customer who last purchased 31-36 months ago AND visited your website last month had a 5.6% chance of purchasing next month.

A customer who last purchased three months ago and did not visit your website last month had a 3.3% chance of purchasing next month.

Which customer is more valuable?

Which customer, according to your antiquated RFM-based system, would you prioritize?

• 3 Months of Recency Customer.

Which customer, based on facts and reality, should you prioritize?

• 31-36 Months of Recency who visited your website last month.

An "Action Stream", therefore, is a series of marketing events you initiate because the 31-36 month customer just visited your website. There should be a unique "Action Stream" for this customer, different than your tepid batch-and-blast email campaigns, different than the postcard you send to remind all customers that it is January clearance and you are 60% off this week.

If you don't understand what unique marketing activities you'd employ once a lapsed customer visits your website, tailored to that unique customer, well, it's time for you to start thinking about Action Streams.

More on the topic tomorrow.

Bob Uecker

He passed yesterday - he was the soundtrack of a Wisconsin summer for five-and-a-half decades, though you might know him from the movie Major League.

My Grandfather used to keep score of Brewers games in the mid-70s (helping fuel my budding interest in statistics) ... he'd just get up from the living room at 6:55pm, pour himself a 7oz glass of Kingsbury beer, open up his season-long scorebook, and lose himself in Uecker-isms via a transistor radio. His Father-In-Law lived upstairs, listening to games. That guy was born 19 years after the end of the Civil War. Time flies, folks.

What a colorful life.