332,521,861

Customers Analyzed YTD

8,292,763,037

Transactions Analyzed YTD

$320,518,515,008

Customer Purchases Analyzed YTD

How good are you at keeping customers?

RSS Wed, 01/19/2011 - 10:00 - Mark Klein

When we talk to clients and prospects about the challenges they face when marketing to their current customers, the issue that never fails to surface is retention.  Yet when we press for more details, we are confronted by a paucity of analysis, a struggle to even size the problem, and more often than not, a semi-helpless shrug when we ask how they are attacking the problem.

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How big is your one-time buyer problem?

RSS 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.

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

RSS 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.
 

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Recognizing the elephant in the room

RSS Sun, 09/12/2010 - Mark Klein

Many marketers are ignoring the biggest problem with their existing customer marketing, their large number of one-time buyers. For most catalogers and on line merchants, that number is often 50% or more. Are they the biggest segment in your database? When you count, just look at your active file, typically those customers who have made a purchase in the past 12 or 18 months.  If you go out further, the percentage of one-time buyers is usually even bigger.

Large numbers of one time buyers are a problem because they represent an untapped and mostly wasted resource. Again and again, they fall into a marketing Bermuda triangle:

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Segmentation--Strategic or Tactical?

RSS Sun, 08/22/2010 - Mark Klein

We were asked this question the other day by one of the early readers of a new white paper we’re doing. The white paper is a comprehensive examination of how to segment a customer population.  It will be published soon so keep a lookout.

The question made us stop and think. Customer segmentation is hot right now, drawing more search traffic than keywords like predictive analytics, CRM, loyalty marketing, and marketing analytics. But ultimately, we decided, it is a tactic, not a strategy.

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Customer Segmentation and Customer Migration

RSS Wed, 08/19/2009 - Mark Klein

There were a lot of “I told you so’s” going around our offices last week.

One of our clients has really been leveraging their segmentations, with different messaging and different mail frequency to the various groups in their customer base. From this activity our client generated some reports with concrete proof that their two middle tier segments, the Underperformers and the Faders, were the segments most susceptible to influence by their direct marketing campaigns. This result reinforced our hard-learned experience that these middle tier customers are the best candidates to move to higher ranking segments, and these mid-tier segments are the best places to find incremental revenue.

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The fallacy behind "break-even point" strategy

RSS Wed, 07/23/2008 - Mark Klein

We believe that there is a big fallacy buried in the strategy of companies that use direct mail.

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Once More and I'll Scream

RSS Fri, 05/16/2008 - Mark Klein

This week, when I asked a new client what kinds of insights her company was expecting from using Longbow, I had to restrain myself from an offensive, too sharp reply. She said she wanted our analytics to identify her best customers. We get that request often, and sometimes it can drive me up the wall.

There were several reasons for my frustration. First, she should already know her best customers, because they are spending the most and buying often. How well could her company be managing if they don’t know their best customers? Second, if her company had been doing any segmentations at all, those top customers would stand out. Even unsatisfactory linear methods like RFM will identify best customers. Third, she was asking the wrong question.

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The Devil's Compact in Customer Loyalty Programs

RSS Sun, 04/20/2008 - Mark Klein

Sometimes I show some resolve and actually carry out my
resolutions. Yesterday was one such day—I cleaned out my wallet, which was too
light on money and too thick with cards from various loyalty programs. Pruning
those loyalty cards made me look at each program and decide whether
participation was worth it, whether there was there a decent quid pro quo for
using the program.

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