Posts filed under ‘Segmentation’
I was intrigued by this item, An Investigation Into the ROI of Direct Mail vs. Email Marketing.
The post refers to an article published by the Harvard Business Review, Why Email Marketing Is King which analyzes the effectiveness of email marketing compared to direct mail.
- mail and email
- mail only
- email only
Wait for it … the email-only campaign performed 95x times better in terms of ROI.
Email is so much cheaper than conventional mail and it may perform better as documented. Postal services are unlikely to become much cheaper, let alone near the cost of email dispatch, but will email remain better in performance?
Mark Knight founder of Right Chord Music in an article 3 things musicians can learn from brands about Customer Relationship Management suggests that CRM efforts all stem from three goals:
- Identify, attract and win new customers
- Retain existing customers
- Re-invigorate relationships with former customers
It is a nice simple way of distilling the market growth challenge, but I feel that it may go a little light on the product and service elements of CRM.
But if an arts organisation just concentrated on systematically achieving these goals alone they would be miles ahead.
I really enjoyed his Bonus Tip: Get Organised.
Just using a spreadsheet to record your customers but segmented into different constituent relationships (relevant for a musician): Artists, Blogs, Labels, Promoters, Publishers and Radio stations.
He then proposes adding the longitudinal dimension that records and defines a relationship – Contacts: : “When, Why and What”
The amount of organisations I see that have not even got this simple information management in place is saddening.
Roger spotted this interesting use of database marketing building on response modelling for gamblers in Analytics Tool Predicts Customer Behavior.
“Seminole Gaming operates seven casinos in Florida on behalf of the Seminole Tribe, and two of these facilities are Hard Rock-branded hotel casinos. The company has more than 11,000 slot machines, 300 table games, dozens of restaurants and nearly 10,000 employees.“
“Our segmentation strategy relied solely on prior behavior, largely using traditional RFS (recency, frequency, spend)-driven segmentations. We needed to be able to “see into the future” when it came to our customers’ behavior …“
While the newer electronic channels are very important marketing tools, in the casino business the more expensive channel of direct mail is much more effective. A predictive response model was used to prioritise prospect selection:
“We identified the 35 percent of our customers most likely to respond to one of these offers. For the 65 percent least likely to respond, we consolidated mailers—advertising multiple concerts, instead of a single concert, in each mailer. While the single-mailer-per-concert approach proved most effective for customers likely to respond, advertising multiple concerts in a single mailer saved mail costs and increased response. This response model was a second success, generating another incremental gain of more than $1 million in profit annually.“
It is interesting to see some of the measures used by casinos explained:
“Traditional casino direct-mail programs rely heavily on metrics such as average daily actual (a measure of how much money a player loses on a given day), average daily theoretical (a measure of how much a player would have lost if he or she had no more or no less luck than expected, per day), average daily worth (a calculation that combines the two metrics above) and points earned (a measure of how much total play a player has given the casino).“
Marc refers to Joseph Jaffe’s book Flip The Funnel which explores customer experience and focusses on customer acquisition, growth and retention.
It is an interesting discussion of systematically developing the oft-forgotten “Tryers” and “Unconverted Trialists” in your customer database using automated techniques.
I am encouraged by the focus on segmentation and in this instance a structured approach to behavioural segmentation.
However he does include a useful warning at the end.
“The point is also not to completely automate all your marketing, push a button and sit back. There should always be room for flexibility.“
I am sorry, but is it just me? A ticket is a means to an end. There is no demand for a ticket per se, there is a demand to attend an event that a ticket is a licence for and a seat – a location from which to experience the event.
Carnahan says “we don’t know what the value of a seat means to a user,”
“His goal for the Data Science group is to dig through Ticketmaster transaction data to understand the value of a ticket,“
Good luck with that …
A colleague, Jerry Yoshitomi of MeaningMatters, put me on to this article. I find this quite exciting for the future of Audience Development and the development of meaningful consumer models – Voter data crucial to Romney’s victory
No, I am not going to bore you with a regurgitation of the seemingly endless US election process
I am, however going to wax lyrical about the use of data to segment prospects and inform relationship marketing.
“A central factor in Mitt Romney’s impressive win in New Hampshire was a sophisticated and relentless voter contact program that locked in supporters early and turned them out to the polls.“
Romney’s team “mined reams of consumer information — from the number of purchases voters made at Williams-Sonoma to their range of financial investments — to build a model that would allow them to find and identify potential supporters.“
They used data to prioritise prospects and then implemented an ongoing structured program of communication developed a loyal core.
“Romney operatives expanded a list of 5,000 solid supporters in New Hampshire from his 2008 campaign to more than 25,000 whom they believed they could rely … while also turning out with friends, relatives and colleagues.“
Just imagine if we had audiences on which we could rely and they turned out with friends, relatives and colleagues. Although I am not sure that we would aspire to this approach in the arts?
“In the end, the Romney team credited its successes to persistence — finding those undecided voters leaning their way and just inundating them,” said Romney’s New Hampshire director, Jason McBride.
Let’s hope that the arts can learn from this constituent development and use similar data mining tools for substantive audience development. Maybe we can then put to bed the accusations of nay-sayers like the recalcitrant Eric Pickles who variously called audience development an “non-job” or a “pointless post”.