Customer Database Analysis & Marketing www.sterlingmarketing.co.uk
What we’re covering <ul><li>Defining the customer </li></ul><ul><li>Developing customers </li></ul><ul><li>Segmenting your...
Defining your customer www.sterlingmarketing.co.uk
Who are we talking about? www.sterlingmarketing.co.uk … . you know  about and have bought from you … .. you know about  an...
Customer Acquisition vs Customer Development www.sterlingmarketing.co.uk
How does a customer define you? <ul><li>Customers buy from you because </li></ul><ul><ul><li>You provide a product or serv...
Defining ‘a customer’ <ul><li>‘ Customer’ is a very broad concept </li></ul><ul><li>Many ways to define a customer </li></...
Defining ‘a customer’ <ul><li>‘ How you define ‘customer’ in your business depends on a variety of factors </li></ul><ul><...
Developing customers www.sterlingmarketing.co.uk
Developing customers <ul><li>You’ve just spent money on acquiring a customer </li></ul><ul><li>What do you do next? </li><...
Developing customers <ul><li>How do you ‘tempt’ customers to buy more? </li></ul><ul><li>How do you decide which customers...
Developing customers <ul><li>The big advantages of marketing to customers are: </li></ul><ul><ul><li>You know who they are...
Developing customers <ul><li>Who’s going to give the best return? </li></ul><ul><li>Most common modelling is RFM  </li></u...
Segmentation & RFM www.sterlingmarketing.co.uk
Segmentation <ul><li>You’d like to treat every customer as an individual.. </li></ul><ul><li>… .. but you can’t </li></ul>...
Segmenting your customers www.sterlingmarketing.co.uk
Segmenting your customers www.sterlingmarketing.co.uk <ul><li>Which groups contribute most - and least </li></ul>
Segmenting your customers www.sterlingmarketing.co.uk <ul><li>And how many customers in each? </li></ul>95% of profitable ...
Segmenting your customers www.sterlingmarketing.co.uk <ul><li>And how many customers in each? </li></ul>95% of profitable ...
Understanding costs www.sterlingmarketing.co.uk
Understanding your costs: example www.sterlingmarketing.co.uk Customer Mailing Orders:1,500 Demand:£96,900 CPO: £7.50 Affi...
Understanding your costs: example www.sterlingmarketing.co.uk Total Orders:2,051 Demand:£122,950 CPO: £7.34
Understanding your costs: example www.sterlingmarketing.co.uk Customer Mailing Affiliates PPC
Understanding your costs: example www.sterlingmarketing.co.uk Customer Mailing Affiliates PPC Orders 150 Order s 165 Order...
Understanding your costs: example www.sterlingmarketing.co.uk
Understanding your costs: example www.sterlingmarketing.co.uk Total Orders:1,751 Demand:£106,450 CPO: £8.60 Total Orders:2...
Understanding your costs: example www.sterlingmarketing.co.uk www.ivantage.co.uk
Understanding your costs: example www.sterlingmarketing.co.uk
Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk <- CHANNEL ->
Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk Knowing what elements of marketing spend are driving ...
Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk
Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk
Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk
Optimising performance www.sterlingmarketing.co.uk
Optimising customer performance <ul><li>For the vast majority of your customer base basic analysis tools will work fine. <...
Optimising customer performance RFM www.sterlingmarketing.co.uk <ul><li>Monitor the structure of your database </li></ul><...
Optimising customer performance RFM www.sterlingmarketing.co.uk <ul><li>RFM would lead you to focus on the top left hand <...
Optimising customer performance Retention www.sterlingmarketing.co.uk
Optimising customer performance Retention www.sterlingmarketing.co.uk Retention is critical – the more customers you can g...
Optimising customer performance Retention www.sterlingmarketing.co.uk
Optimising customer performance Modelling your business www.sterlingmarketing.co.uk
Data & Testing www.sterlingmarketing.co.uk
Data & Testing <ul><li>Data is key to understanding and managing costs and performance </li></ul><ul><ul><li>Collection </...
Sterling ‘Insight’ <ul><li>‘ Insight’  brings together retail consulting and data analytics.  </li></ul><ul><li>‘ Insight’...
Thank You For more information regarding how ‘Insight’ can help your business [email_address] 020 7386 0856 www.sterlingma...
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Sterling Marketing: Database analysis marketing

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Database analysis marketing by Will Lewis

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Sterling Marketing: Database analysis marketing

  1. 1. Customer Database Analysis & Marketing www.sterlingmarketing.co.uk
  2. 2. What we’re covering <ul><li>Defining the customer </li></ul><ul><li>Developing customers </li></ul><ul><li>Segmenting your customers </li></ul><ul><li>Understanding your costs </li></ul><ul><li>Optimising performance </li></ul><ul><li>Data and Testing </li></ul>www.sterlingmarketing.co.uk
  3. 3. Defining your customer www.sterlingmarketing.co.uk
  4. 4. Who are we talking about? www.sterlingmarketing.co.uk … . 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. 5. Customer Acquisition vs Customer Development www.sterlingmarketing.co.uk
  6. 6. How does a customer define you? <ul><li>Customers buy from you because </li></ul><ul><ul><li>You provide a product or service they want at a point in time </li></ul></ul><ul><ul><li>At a price they consider realistic </li></ul></ul><ul><ul><li>With a service that they find acceptable </li></ul></ul><ul><ul><li>And because they trust you (or at least don’t distrust you) </li></ul></ul><ul><li>Generally they won’t buy from you any more if any one of these elements is no longer true </li></ul>www.sterlingmarketing.co.uk
  7. 7. Defining ‘a customer’ <ul><li>‘ Customer’ is a very broad concept </li></ul><ul><li>Many ways to define a customer </li></ul><ul><ul><li>buyer </li></ul></ul><ul><ul><li>multibuyer </li></ul></ul><ul><ul><li>active </li></ul></ul><ul><ul><li>best </li></ul></ul><ul><ul><li>lapsed </li></ul></ul><ul><ul><li>new </li></ul></ul><ul><ul><li>profitable </li></ul></ul><ul><ul><li>………… .. </li></ul></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  8. 8. Defining ‘a customer’ <ul><li>‘ How you define ‘customer’ in your business depends on a variety of factors </li></ul><ul><li>Such as: </li></ul><ul><ul><li>Cost of recruitment </li></ul></ul><ul><ul><li>AOV </li></ul></ul><ul><ul><li>Purchase frequency </li></ul></ul><ul><ul><li>Lifetime value </li></ul></ul><ul><ul><li>Contact cost </li></ul></ul><ul><li>Final analysis – it’s all down to profitability </li></ul>www.sterlingmarketing.co.uk
  9. 9. Developing customers www.sterlingmarketing.co.uk
  10. 10. Developing customers <ul><li>You’ve just spent money on acquiring a customer </li></ul><ul><li>What do you do next? </li></ul>www.sterlingmarketing.co.uk
  11. 11. Developing customers <ul><li>How do you ‘tempt’ customers to buy more? </li></ul><ul><li>How do you decide which customers are most likely to buy? </li></ul><ul><li>How do you decide on the most appropriate temptation(s)? </li></ul><ul><li>How do you decide how much to spend and when? </li></ul>www.sterlingmarketing.co.uk
  12. 12. Developing customers <ul><li>The big advantages of marketing to customers are: </li></ul><ul><ul><li>You know who they are </li></ul></ul><ul><ul><li>You know what they bought </li></ul></ul><ul><ul><li>You may know what triggered the purchase </li></ul></ul><ul><ul><li>You certainly know the channel they chose to buy it through </li></ul></ul><ul><li>Developing customers is about using, and building on, this information to drive sales through a planned contact strategy </li></ul>www.sterlingmarketing.co.uk
  13. 13. Developing customers <ul><li>Who’s going to give the best return? </li></ul><ul><li>Most common modelling is RFM </li></ul><ul><ul><li>Recency </li></ul></ul><ul><ul><li>Frequency </li></ul></ul><ul><ul><li>Monetary </li></ul></ul><ul><li>More complex modelling can refine this - but get the basics right first. </li></ul>www.sterlingmarketing.co.uk
  14. 14. Segmentation & RFM www.sterlingmarketing.co.uk
  15. 15. Segmentation <ul><li>You’d like to treat every customer as an individual.. </li></ul><ul><li>… .. but you can’t </li></ul><ul><li>So segmentation is a way of identifying groups of customers with similar behaviours </li></ul><ul><li>Typically the strongest indicators of customer performance are </li></ul><ul><ul><li>How recently they bought </li></ul></ul><ul><ul><li>How often they’ve bought </li></ul></ul><ul><ul><li>How much they’ve spent </li></ul></ul>www.sterlingmarketing.co.uk
  16. 16. Segmenting your customers www.sterlingmarketing.co.uk
  17. 17. Segmenting your customers www.sterlingmarketing.co.uk <ul><li>Which groups contribute most - and least </li></ul>
  18. 18. Segmenting your customers www.sterlingmarketing.co.uk <ul><li>And how many customers in each? </li></ul>95% of profitable customers?
  19. 19. Segmenting your customers www.sterlingmarketing.co.uk <ul><li>And how many customers in each? </li></ul>95% of profitable customers?
  20. 20. Understanding costs www.sterlingmarketing.co.uk
  21. 21. Understanding your costs: example www.sterlingmarketing.co.uk 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. 22. Understanding your costs: example www.sterlingmarketing.co.uk Total Orders:2,051 Demand:£122,950 CPO: £7.34
  23. 23. Understanding your costs: example www.sterlingmarketing.co.uk Customer Mailing Affiliates PPC
  24. 24. Understanding your costs: example www.sterlingmarketing.co.uk Customer Mailing Affiliates PPC Orders 150 Order s 165 Orders 1,200 Orders 86 Orders 150
  25. 25. Understanding your costs: example www.sterlingmarketing.co.uk
  26. 26. Understanding your costs: example www.sterlingmarketing.co.uk Total Orders:1,751 Demand:£106,450 CPO: £8.60 Total Orders:2,051 Demand:£122,950 CPO: £7.34 ACTUAL LOOKED LIKE
  27. 27. Understanding your costs: example www.sterlingmarketing.co.uk www.ivantage.co.uk
  28. 28. Understanding your costs: example www.sterlingmarketing.co.uk
  29. 29. Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk <- CHANNEL ->
  30. 30. Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk Knowing what elements of marketing spend are driving orders helps you to make decisions about where to spend your money
  31. 31. Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk
  32. 32. Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk
  33. 33. Understanding your costs: Channel Matrix www.sterlingmarketing.co.uk
  34. 34. Optimising performance www.sterlingmarketing.co.uk
  35. 35. Optimising customer performance <ul><li>For the vast majority of your customer base basic analysis tools will work fine. </li></ul><ul><ul><li>RFM analysis </li></ul></ul><ul><ul><li>Source of initial order </li></ul></ul><ul><ul><li>Possibly initial product category </li></ul></ul><ul><li>This will identify both </li></ul><ul><ul><li>Your existing ‘best’ customers </li></ul></ul><ul><ul><li>Those customer types which provide the best potential lifetime value and thus the ones you want to target and encourage </li></ul></ul><ul><li>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 </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  36. 36. Optimising customer performance RFM www.sterlingmarketing.co.uk <ul><li>Monitor the structure of your database </li></ul><ul><li>If the numbers in the top left are rising you’re winning </li></ul>
  37. 37. Optimising customer performance RFM www.sterlingmarketing.co.uk <ul><li>RFM would lead you to focus on the top left hand </li></ul><ul><li>More sophisticated modelling, such as regression analysis, might find subgroups to rule in or out linked to other variables </li></ul><ul><li>But this is more likely to impact the yellow areas than any other </li></ul>
  38. 38. Optimising customer performance Retention www.sterlingmarketing.co.uk
  39. 39. Optimising customer performance Retention www.sterlingmarketing.co.uk 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. 40. Optimising customer performance Retention www.sterlingmarketing.co.uk
  41. 41. Optimising customer performance Modelling your business www.sterlingmarketing.co.uk
  42. 42. Data & Testing www.sterlingmarketing.co.uk
  43. 43. Data & Testing <ul><li>Data is key to understanding and managing costs and performance </li></ul><ul><ul><li>Collection </li></ul></ul><ul><ul><li>Structuring </li></ul></ul><ul><ul><li>Analysis </li></ul></ul><ul><ul><li>Reporting </li></ul></ul><ul><li>Testing is critical to decide what works better (and best) </li></ul><ul><ul><li>There is no right answer </li></ul></ul><ul><ul><li>Customers’ behaviour changes in response to what you, your competitors and the outside world does to them </li></ul></ul><ul><li>Without accurate collection and correct structuring of data </li></ul><ul><ul><li>Testing is increasingly difficult </li></ul></ul><ul><ul><li>Results are inaccurate </li></ul></ul><ul><ul><li>Grey areas become more, rather than less, murky </li></ul></ul>www.sterlingmarketing.co.uk
  44. 44. Sterling ‘Insight’ <ul><li>‘ Insight’ brings together retail consulting and data analytics. </li></ul><ul><li>‘ Insight’ integrates existing data and then gives a ‘single view’ of customer and campaign performance by channel. </li></ul><ul><li>‘ Insight’ provides ‘retrospective’ analysis to allow history to be built in the present. </li></ul><ul><li>‘ Insight’ delivers the results to you - based on your requirements, measured against your plans and your KPI’s. </li></ul><ul><li>‘ Insight’ shows the ‘health’ of your business </li></ul><ul><ul><li>where sales can be increased. </li></ul></ul><ul><ul><li>how to profile customers and use that process to boost revenues. </li></ul></ul><ul><ul><li>where marketing spend could be better deployed. </li></ul></ul><ul><ul><li>what will happen in the future if current trends are maintained. </li></ul></ul><ul><li>‘ 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. </li></ul>
  45. 45. Thank You For more information regarding how ‘Insight’ can help your business [email_address] 020 7386 0856 www.sterlingmarketing.co.uk

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