What Can I Do with
Behavioral and Predictive Modeling?
Drilling Down: Turning Customer Data into
Profits with a Spreadsheet is a book detailing step-by-step instructions for creating customer
LifeCycle scores and using the scores to make more money marketing
to your customers.
Background
Companies that have experience selling through
catalogs or TV shopping have had the most success selling on the Internet.
Why? Because for years
they have practiced the art of selling to customers they cannot see, and
have developed special techniques for managing these remote customer
relationships for maximum profitability.
They use customer data to predict customer behavior, and are able
to maximize sales while minimizing expenses.
By looking at customer transaction data, remote sellers can assess
these 3 critical issues regarding their customers:
- How
likely a customer is to respond to an offer, and what that offer
should be to maximize response while minimizing discounts or
incentives
- When
best customers are about to stop buying, and what to do about it
- What
the future value of a customer will be relative to other customers
Experienced remote sellers use customer scoring
models to track and manage these issues, and you
can too. One of the most powerful models, known as RFM, can work with interactive customers. You will learn how to apply RFM to your customers in the book.
The problem is, interactive customers behave differently. They don't
follow the "rules" nearly as well as the catalog customers RFM
was originally created to address. So RFM is just a starting point
for understanding behavior.
In the book,
you will learn the modifications to the
"classic" RFM approach I have made as a result of rigorously
testing RFM techniques with interactive customers for years. These modifications
improve the performance of classic RFM substantially with interactive
customers and have paved the
way for me to create very high ROI interactive customer marketing
programs. These customer LifeCycle-driven programs have very
high payback rates, up to 400% in a 60 day period. The
only place you can get this information is in my book. If anybody
else has discovered these methods, they certainly have not written an instructional
manual telling you exactly how to take advantage of them.
You can create the modified RFM scores for tens of thousands of customers
in only 30 minutes using a plain Excel spreadsheet. No programming skills are required. These modified scores are used to set up the simple LifeCycle
metrics and customer tracking "flags" (all in an Excel
spreadsheet) used to identify the trigger points for high ROI
customer marketing. They can also be used to
monitor the appeal to best customers of different areas of your site and
to predict visits, sales, and profits in the future.
Larger companies can use the business rules provided to set this all up
with a data query system.
If this all sounds the analytical side
of CRM – it is, but as practiced before CRM became a software suite
costing millions of dollars.
Deliverables
Most sources of information on using customer behavior
profiling to create high ROI marketing promotions and site
designs deliver broad descriptions
and provide little specific guidance for implementation. My
contribution to the topic here on the Drilling Down site, and in the
book, is the following:
- Simplifying these methods so anyone can understand and
implement them without special tools or advanced knowledge.
You get step by step "how to" instructions and demonstrations
- Customizing and expanding these methods for interactive
environments
- Creating a visual approach to working with your customer
data. By using "visual customer
maps," users can easily
identify marketing and design opportunities and challenges, take
action on this information, and measure the benefits of the action
on future customer valuation and Return on Investment.
Managing customer retention and working
with customer data are not hard to do. You just need someone
to provide a simple but powerful method, explain it to you in terms
you will understand, and unlike many sources on the subject, show
you exactly how to do it, step by step. That's what the Drilling
Down site and book are all about.
You will learn how to optimize your site for best customers,
evaluate the future revenue potential of individual customers based
on their scores, and most importantly, detect when best
customers are getting ready to leave you so you can react with an
e-mail or other promotion. If you know your way around the
world of using scripts and a database to drive website presentation,
you can even mimic some of the advanced functionality available with enterprise class CRM analytics.
You can also measure the ROI of CRM Implementations with the Drilling Down method.
What will you
learn
in the Drilling Down book?
See Author's Credentials
Read Book Testimonials
A software
application is provided free with
purchase of the book, and automates the basic profiling and loyalty scoring process for larger
groups of
customers using Microsoft
Access and an Excel pivot table. It's a convenience product for companies
with 65K - 100K customer transactions; companies with fewer transactions can
score all their customers in 30 minutes by hand with a spreadsheet or use the
software I provide to create the customer scoring database from files of
customer transactions from shopping carts or web logs.
If you want to make more money marketing to your customers, and
figure out where your highest future value customers are coming from, you
need the techniques in this
book, which are being revealed for the first time and are based
on the work I have done with real interactive
customers. This is not theory; these methods work, and work very
well.
For years TV Shopping and catalog companies
have organized their marketing activities around the LifeCycle of a
customer, and now they are paving the way on the Internet with very
high success rates and profitability.
Find out how they are doing it (and start doing it yourself)
with this book.
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