Our secret sauce

08 Jun 10 - Mark Klein

We’re often asked why our predictions are so uncanny, how we are able to achieve such success for our clients. Here we reveal our secret sauce. Everything we do follows from four principles:

read more

Solving an age-old problem

25 Mar 10 - Mark Klein

Marketers continue to puzzle over how to divide marketing dollars between recruiting new customers and keeping their current ones.  They know they must spend money to keep current customers and get more sales from them. But the chase for new business is important too, and demands investment.   It’s a dilemma that is often swept under the rug.  But there is an answer.

A lot of marketers do their allocation with the oldest tool in business: seat of the pants.  Even though most of their revenue comes from existing customers they tend to spend more where they think the action is - on customer acquisition.

The best practice is to apportion marketing dollars according to how much revenue comes from each group.  To simplify that process we’ve developed a formula that does the job.
read more

Windows 7 Report

04 Jan 10 - Mark Klein

This blog is about marketing, but my recent experience using Windows 7 is so positive that I feel some obligation to share what I’ve learned. (Full disclosure: Microsoft is a long time, major Loyalty Builders client. However we have never pulled any punches when describing their products and have often given them—privately—critical reports.)

Installation was done as an upgrade over Vista rather than as a clean install. Once I cleared away enough space, it went smoothly but took slightly more than one hour. Specifications say 16GB are needed, but an on-screen message said I needed 12 GB. Before I started clean-up, I had 9 GB free. I cleared out a total of 13 GB and then installed. After installation and putting back some files, I had 19GB free, so W7 is definitely more space efficient than Vista. All of my programs, files, bookmarks, and settings were preserved.
 read more

A distributor's "other" set of customers

12 Dec 09 - Mark Klein

Most companies describe their “customers” as people who buy products and services from them.  Distributors, however, have another kind of customer - the manufacturers they represent - to whom they must sell themselves - and their value as a distribution partner. Their manufacturer partners are true customers in every sense of the word.

For a manufacturer, a distributor sells its services in getting goods through the channel to the ultimate end user. Manufacturers pay for these services in the form of commissions and with marketing development funds, or marketing co-op dollars. Distributors use these funds, hopefully but not always, to promote the products of the manufacturer supplying the funds.  These funds are often the core financial support for the distributor’s marketing efforts.

read more

That Dammed Denominator

23 Nov 09 - Mark Klein

The fashionable marketing metric today is Marketing Return on Investment (MROI), meaning simply how much revenue do you get for your marketing dollars.  This is expressed as a ratio: you divide your total revenue (the top number, or numerator) by the total of all of your marketing costs (the bottom number, or denominator). In principle this is clean and neat and tells you whether your marketing efforts are earning their keep. In practice it is a mess. It’s easy to find your total revenue. The problem is that damned denominator. What goes into total marketing costs? Is it what it costs to send out a campaign? Do you include advertising? The salaries and benefits of your marketing team? Is marketing’s share of the company overhead part of the total costs? There are too many possibilities, so MROI becomes a very squishy number.

read more

Six things I've learned during this recession

13 Nov 09 - Arthur Einstein

Over the years I’ve discovered business is more fun when times are flush.  But I’ve also learned a lot in times when customers are pinching pennies.  What I’ve learned in past year may seem obvious at first - but if everyone was following these lessons, nobody would need us.

1. Take good care of the customers you have.  They don’t want to switch vendors if they don’t have to - it’s time consuming and disruptive.  We work hard at customer happiness and in this miserable business climate the loyalty of our customers seems better than ever.

2.  Segmenting customers and contacting them based on their needs is one excellent customer care tactic. (You can’t cut costs forever).  Dollar for dollar a differentiated customer contact strategy is a better way to improve revenue and profits.

read more

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.  
read more

So what will it take to convince you?

19 Apr 09 - Mark Klein

All of us could use some marketing help in today’s tough environment, and there are plenty of marketing services firms ready to sell us their services. But more than ever companies need to spend their money wisely and justify, in advance if possible, commitments they are about to undertake. At the risk of making our own life more difficult, we offer here the minimum set of requirements you should require from any analytics vendor you’re thinking of using.

read more

How to measure marketing effectiveness

13 Jan 09 - Mark Klein

“You’ve looked at our data. So how are we doing? How do we compare with your other clients?”

These were questions thrown at me by one of our newer clients, and they weren’t new questions. Marketers are hungry for an outside, impartial opinion of their efforts. It’s a fair question and a challenge we couldn’t resist.
Whether it’s a long time client or a new prospect looking at their free customer report card, it’s clear to them that we know a lot about their marketing efforts and could offer an informed response.
 
We decided to accept the challenge and developed a Marketing Effectiveness Score (MES) based on some closely held beliefs and time-honored marketing principles. There are six components to our Marketing Effectiveness Score:

read more

When the going gets tough

12 Dec 08 - Mark Klein

We all know these are tough economic times. That message was reinforced for me again yesterday when I got a call out of the blue from a marketing analyst at a company not on my radar screen. She was charged by her VP with setting marketing priorities for next year. Specifically, she was asked to make marketing recommendations to help her company survive during this recession. The analyst was casting a broad net and found me.

After a short discussion, I found that her company’s revenues were excessively skewed more to new customer revenue compared to revenue from existing customers, so a sure answer to her question is to ramp up existing customer marketing. The justification for that effort is clear: you know who the customers are, you can figure out what they are likely to buy next, and making that sale is a lot less costly than acquiring a new customer. There is definitely gold in your transaction data.
read more