Segmentation Last YearNon-subscribers, Grouped by modeled groupings based on PRIZMne, sub-grouped by Generations (Boomers +, Gen X/ Millennial) 8 < 40 40+ < 40 40+
Segmentation This YearNon-subscribers, Grouped by modeled groupings based on PRIZMne, sub-grouped byGenerations, sub-grouped by ex-subscriber status, then by Last Stop Reason, then byincome and finally a few other attributes as we feel the need in an individual mailing... R1 R2 R1 R2 R1 R2 R1 R2 < 1yr 1 to 2 yr 2 to 3 yr Call / Mail Groupings 3 + yr Typically use Never 120 segments < 1yr with 3 creative versions. 1 to 2 yr 2 to 3 yr 3 + yr Never 1800ish < 40 40+ < 40 40+
Execution last year
Execution This year
Execution this year
Our Standard Rotation
The Phoenix Segmentation Model Start Slow Work your way up Your segmentation model Baseline Good Starting Point ZIP Code Cloning High value Groupings PRIZM’s
Form a plan (Last year)• Quick overview (circ acquisition) --- – Where are my customers, where aren’t my customers? – Concentration of potentials? • Crewing vs. Direct Mail vs. Sampling – Test vs. Control group (simple A/B design) – Versions of mail piece? (tuned to geography) – Creative approval – Timing of mail drop (holidays, events) – Oops, forgot ?????
Form a plan (This year)• Quick overview (circ acquisition) --- – High value customers – Concentration of potentials? – Versions the mail piece? • (tuned to DEMO-graphy) – Controlled Timing of mail drops (rotation) – Special ultratargets (Boutique mailings) – Retention and acquisition – Backend analysis to guide future plans
One year later: A whole new world• Issues solved: – Management of the rotation grid. – Planning of the creative/production process. – Postal expertise. – Results measurements.• Benefits: – “Personalized” messages. – Lift in retention / drop in churn. – Revenue per unit of circulation increase. – Better understanding of customer value. – Selective timings of mailings to Ex- and Never- Subs.
Ready to do it?• Define a course and stick to it• Mistakes will be made• Don’t assume you can do it all• Don’t assume you can’t do it all (done right, you can out ADVO ADVO)• Sustainability! Words of wisdom: Make this a more than a one person project.
Picking what was important?• Ability to attract and ability to retain – Complex to simple and back to complex (once we learned) • Extracted data from our circulation system • PRIZM Clusters (PRIZMne at ZIP+6) • Combined Clusters into groups with Lifestage/Social Groups • Subscribers • Ex-subscribers • Never SubscribersFocus On The High Value: _________
Where did we end up?• Better understanding of how research and testing work together.• What to test (for less).• How to get a statistically valid sample size.• Better able to test price, lists, copy and timing.• Key analysis measures.• Retention rates and anticipated response rates• Disasters to avoid (not that we had any ;-)).
View from the real world(Examples of our lessons learned)
Getting to value
Added our subscriber model…
Quick hits…to full campaignsCluster 01Very highattraction/retentionindex, very highpenetration. But isthe remaining poollarge enough to tap?
Tracking starts in the campaign Actually, it starts before the campaign. It starts with the target planning meetings….
Tracking by Segment
Lifetime Value Model• View 1 – Initial setup Note: All rate, rate steps and costs of delivery are illustrative amounts.
Lifetime Value model• View 2 – Status of starts through the critical grace period Note, at week 12, the starts taken have already Yet, some orders are still generated a positive return working off the initial costs..
Lifetime Value model• View 2 – Status of starts through the critical grace period Look at the retention at this point!
Profitability graph for “Crew” starts
Profitability graph for “Direct Mail” starts
Overall Breakeven Point
Payment AnalysisShould you even send a third bill? Bills Sent Bills Paid
Payment Pattern Analysis First Bills Sent First Bills Paid Second Bills Sent Final Bills Sent Second Bills Paid Final Bills PaidStart of Subscriptions
3rd notice does add value
But does it add enough?
For now… yes a third notice Lift in “Green” (payments that we can not associate with a bill), and enough 3rd notices come in.
Frequency of Delivery Drift Analysis
Initial Analysis 7-Day production dropped from 87% sold to 67%
Initial Analysis While Sunday and Weekend orders went WAY up
Average Rates holding
Decision time• Options: – Continue to sell lower FODs – Stop Selling lower FODs – Decided to keep offering the lower FODs but with much lower focus
Result… 7-Day orders back up
And Average Rate still up…
Ultra Targeting• Past Easy Pay upgrade efforts traditionally yielded very few conversions.• On May 17, 2007, we dropped 2,300 direct mail pieces to ultra targeted segments within our Loyalty Ladder.• This was the first time we utilized the Loyalty Ladder for a targeted retention campaign.
Ultra Targeting• Selection criteria: – Silver step in our ladder(subs for at least 1-2 years) and Bronze (subs for six months to one year) – Shining Stars Boomers and NonBoomers R7 bill me, excluded annuals. – Selected zip codes: • North • NEV • SEV • West
Ultra Targeting• The Offer:• Used Claritas ConsumerPOINT to provide the store that this group was most likely to shop at: Nordstrom.• We selected $15 domination gift cards (in the future we will test other increments, including no gift card).• The rate was promoted as like receiving two weeks free, 20% off, i.e. $17.15 rate.• All approved by ABC.
Ultra Targeting• Next up: – Repeating the boomer piece (1.7% response with 3 weeks remaining in campaign). • (Note: Confirm your program with ABC). – Hispanic based on language use and tenure in market. – Tenure based campaign into a highly competitive section of town. – Working women with children. – New to market in “highly” competitive areas of town.
Looking for the silver bullet? I’ve found a few: Patience Freedom to explore Encouragement to explore The right tools The right people