White Papers

Five Ways For DistributorsTo Increase Revenue Per Customer

In today’s economy, distributors are the crucial link in the supply chain that moves products from manufacturers to the finalcustomers, and as such are often large and complex businesses. Yet whatever the product area – from electronics to diapers—the challenges faced by these businesses have many similarities and some common solutions. In this report we describe ways for distributors to maximize the most critical marketing metric, revenue per customer, and illustrate these methods with some real life client stories.

Four Ways For Distributors To Get More Marketing Co-op Dollars

In today’s economy, distributors are the crucial link in the supply chain that moves products from manufacturers to the final customers, and as such are often large and complex businesses. Yet whatever the product area – from electronics to diapers—the challenges faced by these businesses have many similarities and some common solutions. In this report we describe how distributors can win more marketing funds from their manufacturing partners, and illustrate the solutions with three case studies.

Customer Migration--Where they were, where they went, and why

Understanding customer behavior is key to creating marketing campaigns that generate high response and revenue. One of the best ways to understand customer behavior is to study migration patterns to learn when and why customers end up in different segments than where they were a while ago. The starting point for these studies is your customer segmentation model. After you decide on which approach to use to measure migration, the process is a virtuous circle of analyze-segment-campaign-analyze again. The next task, requiring strong analysis skills, is to tie the observed migrations to company activities such as a marketing stream, and to customer purchase behavior. The final piece is to apply the results of this analysis to your marketing campaigns to grow revenue and boost customer retention.

Measuring Marketing Effectiveness

Some people consider marketing a “soft” discipline not easily amenable to quantitative assessment. However a growing number of marketers are searching for a more mathematically rigorous way to measure their activities. Loyalty Builders suggests the Marketing Effectiveness Score, a number between zero and one hundred that combines six component metrics of customer behavior into a single measure of a company’s marketing performance. Each component metric reflects a marketing-influenced behavior, and for each there is corresponding set of actions to improve the score.  Case study MES reports for B2B and B2C companies are in side-by-side appendices.

 The Business Case for Loyalty Builders Services

Loyalty Builders targeting outperforms RFM, typically by two to one or more. Compared to random, spray and pray marketing,targeted campaigns can have a ten-fold advantage. Back tests can confirm these claims before a single campaign is run.Using targeting and control groups is a rigorous way to measure the effective lift of a campaign.

 Five Marketing Practices to Beat the Recession

Recession can be a time of opportunity. Here are five proven tactics for smart companies to not only survive but prosper: rebalance acquisition vs. retention spending; market to customers with the best growth potential, not necessarily the biggest spenders; systematically test to lift campaign responses; personalize for higher response rates; and build an early warning system. We use real client data to illustrate how each tactic works, describe the common mistakes we’ve seen, and show you how to measure your marketing effectiveness.

  A Step-by-Step Plan to Increase Customer Retention

This eight step plan uses analytics to reduce attrition and keep your existing customers buying. The steps include benchmarking; determining the loyalty profile and risk profile of the customer population; finding a segmentation that highlights the customers at risk and then campaigning to them; testing the campaigns to increase effectiveness; building an early warning system; and continuing to measure key performance indicators. Several charts with actual customer data illustrate the process.

Field Guide to Mathematical Marketing

Mathematical Marketing is the process of marketing to existing customers based on a scientific understanding of how past customer behavior predicts future purchases. Key elements include behavioral tracking, predictive analytics, behavioral targeting, testing, what-if analysis, and results measurement. This comprehensive eBook shows you how to apply these techniques to grow revenue through direct marketing.

Customer Loyalty Surprises and Myths

Since we began researching customer loyalty several years ago, we’ve been shocked by five surprises that defy conventional wisdom. Read what we learned about customer analytics, the distribution of loyalty within a customer population, loyalty’s relationship to customer satisfaction, and RFM as a measurement tool so you can avoid the pitfalls tripping up your competition.

RFM vs. Loyalty Builders' Modeling

RFM is an easy and popular but seriously flawed way to rank customers for marketing campaigns. This linear regression methodology ignores customer velocity and product information, lacks time granularity because of how it “buckets” transactions, requires manual trade-off decisions, and is not conducive to making revenue projections for campaigns based on its rankings. In contrast, the Loyalty Score from Loyalty Builders takes a more holistic and inclusive approach, avoids the shortcomings of RFM, and is a more accurate predictor of customer behavior.

How to Use a Loyalty Analysis

More than a bunch of statistics, a loyalty analysis gives you marketing insights at multiple levels that can be applied in many ways. From the top, it is a way to monitor the overall health of your customer population and predict future revenues. At the account level, you will learn which customers are ready to buy, and what products they are most likely to purchase, plus their cross-sell opportunities. The risk scores in a loyalty analysis are key elements for building an early warning system to spot potential defectors and increase customer retention. Tables describing important metrics used by Loyalty Builders are included.

Purchase Probability Types

Four types of purchase information are some of the deliverables from a loyalty analysis, including loyalty rank (an excellent predictor of future purchases); the probability of buying some product within a specified time; the probability of making an additional purchase of a specified product; and information about which customers are likely to make their first purchase of some new product type. Learn the details about each one of these kinds of predictions.

The Mathematics of Customer Loyalty

The shortcomings of relying on a few traditional metrics to measure customer loyalty are contrasted with the characteristics of a good loyalty measurement tool. There is an explanation of why loyalty measures based on weighted sums of traditional metrics don’t work. For the more mathematically oriented reader.

The Loyalty Building Cycle

This white paper discusses the process of building customer loyalty and describes the 3 key activities involved.  It also discusses how the model produces data on each individual customer and the business as a whole for analysis, decision-making, and action.

Quantifying Customer Loyalty

Recognizing that the first step in improving customer loyalty is developing a reliable way to measure it, Loyalty Builders describes in this paper the methodology behind its Loyalty Score, as well as the several surprises that surfaced during its development. Based primarily on transaction behavior, the Loyalty Score encompasses the totality of a customers buying behavior including which products are purchased. The result is a holistic picture of the customer and behavior-based segmentations that illuminate patterns which may otherwise go unnoticed, including identifying customers whose loyalty is either growing or eroding.