Loyalty Builders Marketing Blog

Customer marketing is a three-legged stool

Tue, 12/21/2010 - Mark Klein

Direct marketing to your existing customers, the best way to grow revenue for most companies, is like a three-legged stool. The three legs are customer data, customer analytics, and customer campaigns. Remove any leg and the stool falls over.

Without customer data, you’re flying blind - forced to use newspapers, TV, pay-per-click, and take a chance your customer will find your message. You can’t use personalized direct marketing and all the revenue lift it generates.

How big is your one-time buyer problem?

Mon, 11/22/2010 - Mark Klein

What’s your gross margin on a typical first purchase? Is it less than your acquisition cost for a new customer? If your answer is yes (and that’s most companies), you have a one-time buyer problem.

Getting the second sale and solidifying a buyer as a profitable customer is one of the toughest jobs in selling. The problem is particularly serious for catalogers and on-line merchants. In our eleven years of helping direct marketers, we’ve learned how to size and solve this problem. What’s surprising is that the information you gather when sizing the problem is the key to the process you’ll use to solve the problem. You’ll learn which one-timers are more likely to buy again, when the best window in time is to make the approach, and what to offer them.

The four numbers every company needs to know and that most don't

Fri, 10/29/2010 - Mark Klein

Customer lifetime value (CLTV)—The sum of the future money you will get from a customer. Too many companies make the mistake of thinking they can calculate one number for their entire customer population. It’s more useful and accurate to segment a population and then calculate a different CLTV for each segment. This is the number that guides your marketing spend and marketing methods.
Cost to acquire a new customer—Add all of your acquisition expenses for the year and divide by the number of new customers you acquired. Then hope your answer is less than the CLTV.Read More ›

A 'must-read' report for savvy marketers

Wed, 10/06/2010 - Mark Klein

Aberdeen Group has just released a new research report by David White, “Predictive Analytics – Driving Sales with Customer Insights”. I think this is a ‘must-read’ for any marketer struggling to improve revenue. Right off the top I’ll make full disclosure: White’s case study for existing customer marketing describes the work Loyalty Builders is doing with our client Sullivan Tire. Even if the exciting Sullivan Tire story was not part of the report, I’d still urge you to read it. Here’s why:

The one-time buyer. Customer? Prospect:? Or 'one-trick pony'?

Tue, 09/21/2010 - Mark Klein

Acquisition is a problem for most companies. It’s often a bigger problem than they realize because they count an acquisition win as a customer even though only a single purchase has been made. The truth is, one-time-buyers don’t really become customers until they’ve made a second purchase.

Customer databases get divided into active and inactive sets. Most companies think of those names in their active file as “customers”, where “active” usually means the last purchase was within the past 12 to 24 months. But half or more of the names in most catalogers’ and online merchants’ active file have only made one purchase.