Let the bad times roll?

22 May 09 - Arthur Einstein

Chrysler’s in bankruptcy.  GM may be next.  The silver linings on the cloudy horizon are pretty faint right now.  And, yet … I’m not ready to give up the ghost and I doubt that you are either.

The question is, what to do?   Sit around and wait for things to change?  Or take some action that will give destiny a nudge in the right direction?  

Personally, I’ve always believed the philosopher who said “the only reality is in action”.  And one action I believe everyone needs to consider in tough times is how marketing dollars are being spent.

Right now all the experts are advising us to focus on our customers.  (That’s always been our business at Loyalty Builders).  Customers are the core strength of any business and an even more important asset in a slow-down.  The programs that support customers, keep them happy, and keep them coming back to buy, are critical.  
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Marketing to your best customers when business stinks

01 Feb 09 - Arthur Einstein

It’s the oldest cliché in business - recession is a time of opportunity.  But a raft of research confirms it's true.  People who market aggressively in downturns not only survive but consistently emerge stronger.  As Casey Stengel would say if he were alive today, “you could Google it”.

The most aggressive approach to  bad times is to figure out who your best customers are and market to them relentlessly. Analyze your customers based on transaction data  that’s sitting in sales or accounting databases.  It’s going to tell you things about your best customers you never realized.

But beware.  Best customers are not just the 5% or 10% who generate the most revenue.  In fact, customers who spend the most may already be spending all they can with you.

The wonderful thing about segmentation is that when you look at it carefully you’ll realize that you have at least three kinds of best customers:

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Target first time buyers to build your brand

03 Nov 08 - Arthur Einstein

Back around 1999, when new products were being introduced as fast as you could put up a website, brand building underwent a quiet revolution.

With markets moving at warp speed there simply wasn’t time to build trust and reputation the traditional way - by advertising.  In that super-heated environment the best way to build a brand was to get people to actually try the product.  If you could manage to get trial, if the dogs ate the dog food, if they came back to buy again, and if they told their friends, then maybe you had a shot at survival.

The markets haven’t cooled.  If anything they’ve heated up.  And I still believe that persuading a prospect to try your product or service can create more brand equity faster than all the 30-second Super Bowl spots you can afford.  Generating trial is still the best branding strategy I can think of.  
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The "Mathematization" of Marketing

10 Feb 08 - Mark Klein

As word spread of my teleconference for Marketing 2.0 (see previous post), an interesting contrarian opinion appeared in my mailbox. Evidently there was something in the meeting notice to cause a reader to suspect that using mathematics to describe behavior could have negative consequences. He wrote “Is it just me, or do others also wonder where this mathematization of social relationships is leading humankind?”

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Mark Klein is featured speaker at Marketing 2.0 teleconference

08 Feb 08 - Mark Klein

Here's the invitation to the Facebook Marketing 2.0 teleconference where I will be the featured speaker:

You are invited to attend a telephone conference at 1 PM ET on Wednesday February 13 that features Mark Klein talking about behavioral targeting and customer retention. The conference is hosted by Isabel Walcott Hilborn of Marketing 2.0 under the auspices of Facebook. You can see more details, including dial-in information, at http://harvard.facebook.com/event.php?eid=23509056840. If you are not already a Facebook member, you will need to do the simple, free signup.
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Behavioral Targeting vs. Demographics

22 Jan 08 - Mark Klein

In the current post on Metrics Insider, Josh Chasin argues that behavioral targeting is not the be-all and end-all, that demographics is alive and well. He calls demographics “the targeting concept that wouldn’t die.” He says further that “more than half of U.S. ad dollars are placed against traditional demographic targets.”

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Old School vs. New School Testing

10 Jan 08 - Mark Klein

David Baker has a good column in Email Insider this week, What Really Makes An Email Program Click. In it, he writes "Remember one thing: You test to prove or disprove your hypothesis, not just for the exercise."

To me, that sounds like old school testing, where one ‘thing’, one hypothesis, is tested. Formally, that is called split-run or A/B testing. There is only one variable, and two variations of it. It works, but it is time consuming and (if there is more than one hypothesis) needs lots of test subjects and money. Consequently many companies just don’t do it, relying instead on their intuition.

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Can one metric do the job for ranking customers?

05 Jan 08 - Mark Klein

I am admittedly biased. When asked what I think is the best metric for ranking customers, I invariably recommend our proprietary Loyalty Score for a two reasons. First, it is highly predictive, corresponding to the probability that the scored customer will make a purchase in the next period. Second, it’s tested and proven through use by many clients over the past few years. We have a lot of confidence in it. Besides, I enjoy tweaking people who think the only good measure is revenue.

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Have you had a customer conversation lately?

29 Nov 07 - Mark Klein

I like the elegant language we use talking about customer loyalty -‘predictive analytics’ and ‘behavioral targeting’ come immediately to mind. They make loyalty work sound almost like an academic discipline. Good for the ego.

On the other hand, the 50-cent words tend mask the beauty of what customer loyalty applications really accomplish - which is to is let a business person have a privileged and private ‘conversation’ with each and every customer – no matter how many customers are on the books.

You need to be a good listener to learn anything from the conversation. And the process involves some sophisticated math, but the computer does that. However getting to know your customers and their habits definitely isn’t brain surgery.

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