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Sterling Marketing: Database analysis marketing


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Database analysis marketing by Will Lewis

Database analysis marketing by Will Lewis

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  • 1. Customer Database Analysis & Marketing
  • 2. What we’re covering
    • Defining the customer
    • Developing customers
    • Segmenting your customers
    • Understanding your costs
    • Optimising performance
    • Data and Testing
  • 3. Defining your customer
  • 4. Who are we talking about? … . you know about and have bought from you … .. you know about and have never bought from you … .. you know nothing about and have bought from you You know nothing about and have never bought from you
  • 5. Customer Acquisition vs Customer Development
  • 6. How does a customer define you?
    • Customers buy from you because
      • You provide a product or service they want at a point in time
      • At a price they consider realistic
      • With a service that they find acceptable
      • And because they trust you (or at least don’t distrust you)
    • Generally they won’t buy from you any more if any one of these elements is no longer true
  • 7. Defining ‘a customer’
    • ‘ Customer’ is a very broad concept
    • Many ways to define a customer
      • buyer
      • multibuyer
      • active
      • best
      • lapsed
      • new
      • profitable
      • ………… ..
  • 8. Defining ‘a customer’
    • ‘ How you define ‘customer’ in your business depends on a variety of factors
    • Such as:
      • Cost of recruitment
      • AOV
      • Purchase frequency
      • Lifetime value
      • Contact cost
    • Final analysis – it’s all down to profitability
  • 9. Developing customers
  • 10. Developing customers
    • You’ve just spent money on acquiring a customer
    • What do you do next?
  • 11. Developing customers
    • How do you ‘tempt’ customers to buy more?
    • How do you decide which customers are most likely to buy?
    • How do you decide on the most appropriate temptation(s)?
    • How do you decide how much to spend and when?
  • 12. Developing customers
    • The big advantages of marketing to customers are:
      • You know who they are
      • You know what they bought
      • You may know what triggered the purchase
      • You certainly know the channel they chose to buy it through
    • Developing customers is about using, and building on, this information to drive sales through a planned contact strategy
  • 13. Developing customers
    • Who’s going to give the best return?
    • Most common modelling is RFM
      • Recency
      • Frequency
      • Monetary
    • More complex modelling can refine this - but get the basics right first.
  • 14. Segmentation & RFM
  • 15. Segmentation
    • You’d like to treat every customer as an individual..
    • … .. but you can’t
    • So segmentation is a way of identifying groups of customers with similar behaviours
    • Typically the strongest indicators of customer performance are
      • How recently they bought
      • How often they’ve bought
      • How much they’ve spent
  • 16. Segmenting your customers
  • 17. Segmenting your customers
    • Which groups contribute most - and least
  • 18. Segmenting your customers
    • And how many customers in each?
    95% of profitable customers?
  • 19. Segmenting your customers
    • And how many customers in each?
    95% of profitable customers?
  • 20. Understanding costs
  • 21. Understanding your costs: example Customer Mailing Orders:1,500 Demand:£96,900 CPO: £7.50 Affiliates Orders:315 Demand:£14,475 CPO:£5.97 PPC Orders:236 Demand:£11,575 CPO: £8.15
  • 22. Understanding your costs: example Total Orders:2,051 Demand:£122,950 CPO: £7.34
  • 23. Understanding your costs: example Customer Mailing Affiliates PPC
  • 24. Understanding your costs: example Customer Mailing Affiliates PPC Orders 150 Order s 165 Orders 1,200 Orders 86 Orders 150
  • 25. Understanding your costs: example
  • 26. Understanding your costs: example Total Orders:1,751 Demand:£106,450 CPO: £8.60 Total Orders:2,051 Demand:£122,950 CPO: £7.34 ACTUAL LOOKED LIKE
  • 27. Understanding your costs: example
  • 28. Understanding your costs: example
  • 29. Understanding your costs: Channel Matrix <- CHANNEL ->
  • 30. Understanding your costs: Channel Matrix Knowing what elements of marketing spend are driving orders helps you to make decisions about where to spend your money
  • 31. Understanding your costs: Channel Matrix
  • 32. Understanding your costs: Channel Matrix
  • 33. Understanding your costs: Channel Matrix
  • 34. Optimising performance
  • 35. Optimising customer performance
    • For the vast majority of your customer base basic analysis tools will work fine.
      • RFM analysis
      • Source of initial order
      • Possibly initial product category
    • This will identify both
      • Your existing ‘best’ customers
      • Those customer types which provide the best potential lifetime value and thus the ones you want to target and encourage
    • Once you’ve got this data and acted on it you could look at more sophisticated modelling – it will fine tune the boundaries but is unlikely to change the general approach
  • 36. Optimising customer performance RFM
    • Monitor the structure of your database
    • If the numbers in the top left are rising you’re winning
  • 37. Optimising customer performance RFM
    • RFM would lead you to focus on the top left hand
    • More sophisticated modelling, such as regression analysis, might find subgroups to rule in or out linked to other variables
    • But this is more likely to impact the yellow areas than any other
  • 38. Optimising customer performance Retention
  • 39. Optimising customer performance Retention Retention is critical – the more customers you can get to reorder – profitably, of course – the fewer you have to recruit or the faster you can grow
  • 40. Optimising customer performance Retention
  • 41. Optimising customer performance Modelling your business
  • 42. Data & Testing
  • 43. Data & Testing
    • Data is key to understanding and managing costs and performance
      • Collection
      • Structuring
      • Analysis
      • Reporting
    • Testing is critical to decide what works better (and best)
      • There is no right answer
      • Customers’ behaviour changes in response to what you, your competitors and the outside world does to them
    • Without accurate collection and correct structuring of data
      • Testing is increasingly difficult
      • Results are inaccurate
      • Grey areas become more, rather than less, murky
  • 44. Sterling ‘Insight’
    • ‘ Insight’ brings together retail consulting and data analytics.
    • ‘ Insight’ integrates existing data and then gives a ‘single view’ of customer and campaign performance by channel.
    • ‘ Insight’ provides ‘retrospective’ analysis to allow history to be built in the present.
    • ‘ Insight’ delivers the results to you - based on your requirements, measured against your plans and your KPI’s.
    • ‘ Insight’ shows the ‘health’ of your business
      • where sales can be increased.
      • how to profile customers and use that process to boost revenues.
      • where marketing spend could be better deployed.
      • what will happen in the future if current trends are maintained.
    • ‘ Insigh t’ is fundamentally an open platform; so your businesses can have access to the same analytics and reporting as our largest clients – at an affordable price.
  • 45. Thank You For more information regarding how ‘Insight’ can help your business [email_address] 020 7386 0856