The new year has begun. Now is the time to measure the success of your holiday campaigns. How did your campaigns perform? This is an opportunity to look at their effectiveness in terms of building awareness, generating revenue, increasing retention and aiding customer acquisition? How do your metrics compare to industry benchmarks as well as internal benchmarks? How much revenue did they generate and were they profitable? In addition, what worked and what didn’t? Now is the time to evaluate any tests that were done - date/time, subject line, creative, etc. Finally, compare the results of this past holiday campaign to the one before and analyze the differences. The insights from the holidays can inform your strategy for 2012.

Even though it still feels like summer outside, now is the time to start planning for the holidays.

The first step is to evaluate all of the tests that have been done throughout the year in order to put your best foot forward.  In addition, it involves reviewing the results from the prior holiday season.  That means determining the most effective:

• communication method (e.g., email, direct mail, multi-channel) by customer segment
• timing (both day of the week and time of day)
• creative (hero images, placement of links, etc.)
• subject lines (when and where to mention free shipping offers, brand or product offers, etc.)
• offers (discount percentages, dollars off, buy one get one free)

Next step is to evaluate any implementation issues from the prior holiday season.  Before coming up with your holiday strategy it is important to determine any limitations or challenges with respect to execution.  Your strategy cannot be developed in a vacuum.  Thus, I recommend that you review what has worked and what did not work with the entire team.

Once all of this information has been gathered, you can develop a holiday strategy.  It should incorporate the lessons from past tests and holiday campaigns as well as encompass:

1.  Start Date. The average holiday campaign begins in October.  Some retailers hold pre-holiday clearance sales and send informational emails to start their holiday campaigns.

2.  Black Friday. For Marketers, the holiday campaigns have been starting earlier and earlier on the calendar.  The same is true for Black Friday.  It is now beginning on Thanksgiving Day for some retailers.  When will yours start?

3.  Cyber Monday. While many digital sales are made on the Monday after Thanksgiving, digital sales are occurring earlier as consumer shop from home.  Will you wait for Cyber Monday or start earlier?

4.  Sequence. If you are using email, you can easily send at least an email a day.  It is important to determine the contact frequency and cadence.  Will all or a segment of your customers receive an email a day, every other day, every third day, etc.?  Will emails be sent only on weekdays or only weekends or a mix?  Will there be a resting period or a maximum number of emails that can be received?

5.  Free Shipping.  Many consumers expect to get free shipping online, especially during the holidays, and will not pay for shipping.

6.  Social Sharing.  Consider how to tie in Facebook, Twitter and other social sites with your campaign.

7.  After Christmas. Lastly, there is also the opportunity for follow on sales after Christmas.  It is the time to promote use of gift cards and purchases of parts or refills.

Much has been written about the value of Groupon and its power to drive traffic to participating retailers.  The hope is that new consumers will try your store and buy additional items, above and beyond the promoted item or coupon threshold.

However, what if consumers come to your business and simply buy the item on offer?  The Wall Street Journal recently reported on a toy retailer that had offered $20 worth of merchandise for $10.  Most consumers bought just the minimum amount needed to redeem the coupon.  According to the Journal, the toy company lost money on 75% of its Groupon sales.  Further, most of the customers who used the coupon were existing customers.  While this is just one story, it is a cautionary tale.

It is important to drive incremental trips and often coupons, discounts, and loyalty reward certificates are an effective means of doing so.  However, it is also important that these trips at least break even.

One of my clients was asking for my advice about trigger e-mails.  If you haven’t worked with trigger e-mails then you may not be familiar with the ability to set up e-mails that are automatically “triggered” by an event.  There are many behaviors that can trigger an e-mail and below is a selection of the types of trigger campaigns you can develop:

1.  Welcome Campaigns

If a customer makes a purchase or registers on your web site, this is a wonderful opportunity to thank them as well as up-sell existing customers and convert prospects into customers.

2.  Birthday Programs

Why not surprise and delight your customers with a special birthday promotion.  You can send a promotion or special offer in the month of their birthday.  For one of my clients, this program consistently generates among the highest response rates.

3.  Specific Product Promotions

You can leverage past purchase behavior to let customers know about products that might be of particular interest to them.  Amazon is a great example of this.  Based on books I have previously purchased, I receive e-mails about books on topics of interest to me as well as e-mails about new books from authors from who I have bought in the past.

4.  Reactivation Campaigns

If it has been a while since a customer has bought from you, a reactivation e-mail may be in order.  The purpose of a reactivation campaign is to remind customers about your products and services and encourage them to become an active customer again.   This is your chance to win back a lost or inactive customer.

Trigger campaigns are one key element of your communication strategy.  They provide relevant content based on customer behavior and enable you to speak to the particular needs and interests of your customers.

As I mentioned in my prior post, loyalty programs are a valuable tool.  They can help retain customers and companies can win greater share of wallet as a result.  If a customer can buy the same goods or services from multiple sellers, a loyalty program encourages customers to consolidate their purchases.  It might also create additional demand.  For example, a reward certificate can spur an incremental trip or customers may splurge in order to meet a spending threshold.

Another benefit of loyalty programs is the insight into customer behavior.  This has far reaching benefits.  Take the example of a retailer.  This customer insight can help both marketing and merchandising.  Using the data collected, a retailer can segment their customers based on past behavior so that they can tailor their messages and offers appropriately.  For example, marketers can use this information to personalize product promotions, cross-sell products and identify new customers that have the potential to become to best customers.

Further, this data will provide insight into what products bring new customers into the store, what products drive repeat purchases and what products are typically purchased together. Merchandisers can use this information to plan promotions and make buying decisions.

To be valuable, the data must drive actionable insights and be used to continually improve the loyalty program.  I will write about using data to evaluate the health of a loyalty program in my next post.

A colleague and I had a very interesting discussion today over lunch.  I was arguing for the importance of industry in guiding the type of business questions you ask and hence the type of analyses you perform.  He believes that industry or vertical does not matter. 

My professional experience tells me otherwise.  Currently two of my clients have very different challenges.  One is a retailer trying to drive a repeat visit among its customer base.   Given the volume of customers they have and the average basket size, increasing the number of repeat visits can greatly impact revenue.  The other client is a software maker that sells to large manufacturers.  Identifying the right customer who would be interested in their product is key.  They have a much higher price point and much longer buying cycle than the retailer.  For them, understanding lead generation and lead conversion is vital in order to make their sales process more efficient.

However, there was on thing we could agree upon.  It all comes down to giving the right person the right message at the right time.

My clients often know who their best customers are.  Typically the best are the top 20% of customers that generate 80% of the profits.  These are the customers you most want to retain.  The question becomes who are the customers that you should try to migrate into your best customer segment?  Figuring out who are the next best requires research into their behaviors, demographics or firmographics, and attitudes. 

 Segmentation is one way to separate your customer base into differentiated groups against which relevant marketing communicationsand strategies can be developed and executed.  There are many different types of segmentation and techniques including cluster analysis, RFM and CHAID.

Regardless of what method you choose, bear in mind that a good segmentation scheme is often a result of art and science.  Segments should make sense intuitively and, if they are data driven, should be sound statistically.  In my next post I will describe clustering and how that is used for segmentation.

I recently received a mailing from the deCordova Sculpture Park and Museum, formerly known as the DeCordova Museum and Sculpture Park. 

I was puzzled by the name change.  In this case, why would you essentially just reorder the words in the name?  Yes, the sculpture park is beautiful and unique in the metro Boston area.  It is well worth a visit I might add.  However, the museum is excellent as well.  There was a fascinating exhibition called Drawn to Detail which I saw last fall. 

Perhaps, the ICA in Boston is cornering the contemporary art museum “market”, with the recent Shephard Fairey show and before that an Anish Kapoor exhibition.   It also has received a lot of attention for its new building and new location on the waterfront in Boston.  The deCordova’s name change might be a bid to distinguish itself from the ICA.  If that is the case, I am not convinced that re-branding is the answer.  But if you are going to re-brand, at least be consistent. 

The website uses the new name at the top on the right…

The top of the deCordova home page

 and then uses the old name under the History and Mission title.

Bottom of deCordova home page

Thursday’s Wall Street Journal had a quote from Carol Bartz, the CEO of Yahoo, “Are we leading up to “I’m both too old and too stupid to know what the Internet is’?”  Her remark was in response to a question about her experience but it made me think about a potential generational gap in Internet usage. 

At a book club meeting almost a year ago, several members asked for a description of Twitter, as if it was a foreign country or new-fangled religion they had heard about.  One member provided an excellent summary based on his usage of the site but several were left trying to get their heads around why anyone in their right mind would use Twitter.   Once again Twitter came up during a recent book club meeting.  No one new had tried out the service in the 10 months since our last discussion.  It made me wonder if the technological gap is not just rich versus poor but also young versus old.  As the remark by Carol Bartz indicates, there is a general perception that the Internet is a young person’s game.  High profile anecdotes have reinforced that assumption.  According to a July 2008 Frank Rich Op Ed piece in the New York Times, John McCain doesn’t know how to use a computer.

For marketers, this represents a challenge and an opportunity.  To me, it is further proof that we need to develop integrated campaigns with both online and offline channels for outbound communication and inbound response.  You cannot assume that everyone will be on the Internet 24/7.  Broadcast media, print ads, direct mail, etc. can play an important role in reaching an older audience that may not be on the Internet as frequently and they reinforce your message to those who are active on the Internet.  A recent report found that displaying a URL within a  Yellow Pages print ad drove an increase in online leads.  Of course, you should measure the interaction of online and offline behavior to see what drives the most responses and to optimize future campaigns.

Modeling is a powerful tool that is worth considering when determining how best to spend your marketing dollar.  At its simplest, modeling looks for patterns in data to predict future behavior.  That data could be past behavior.  If someone bought diapers last week, it is very likely they will buy them again this week.  It could also include demographics such as age and gender or, in a B2B context firmographics, the number of employees and annual sales volume.  Attitudinal information, such as willingness to purchase a product, could also be used in a model.  The power of modeling comes from the fact that it weighs all of the factors and results in a unique algorithm that predicts future behavior.  Instead of the usual “spray and pray” approach, modeling enables you to focus your dollars where they will have the most effect.

Two articles in the Wall Street Journal last week offered real life examples of how models can solve business problems.  I have seen clients use attrition models and proportional hazard models to determine which customers are likely to leave.  Google is building an attrition model to identify which of its employees are most likely to leave the company for another opportunity.  Presumably Google will target those employees most likely to leave and be able to retain valuable talent that might otherwise walk out the door.

Chrysler’s digital agency has designed a media modeling system according to the Wall Street Journal.  It sounds like a marketing mix model and is being used to allocate Chrysler’s marketing dollars.  At a basic level, this model tells Chrysler how much money needs to be spent on marketing to drive a certain number of vehicle sales based on the web traffic generated.  By monitoring online activity and tying it to their marketing campaigns, Chrysler has determined how many web visits translate into sales.  The media modeling system, including enhancements based on the ongoing performance of television advertisements, has helped Chrysler determine how to structure their marketing campaign and tweak marketing in real time to drive results.

These two examples may not fit your exact situation but they highlight the power and value of modeling.