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.

I was driving by a shuttered Blockbuster store recently and naturally I thought about disruptive technologies.

When VCR tapes first became popular, Mom and Pop stores started catering to a newly created market for movie rentals.  I remember the excitement of being able to rent movies and, for a time, the video store became the place where you regularly saw friends and neighbors.  Then Blockbuster came along and pushed those small stores out of business.  The selection was better and you could keep the movie for a few days.  Now Blockbuster has been shoved aside by Netflix, despite launching its own website and providing a similar service whereby you receive and return DVDs by mail.  With its bankruptcy and later sale to Dish Network, Blockbuster and the video rental store has been officially rendered obsolete.

Now Netflix offers on demand streaming video of movies and old television shows.  They have also announced deals for original content.  Blockbuster was too slow to evolve and see the value of a flat fee subscription service and the convenience of mail.  Netflix has taken the concept of video rental and is now becoming an important distribution channel and could possibly complete with cable channels for content.

Every business needs to beware of disruptive technologies that will render its business model obsolete or redefine the market.  You never know where the threats might come from or how much time you will have to react to them.

While Mark Twain was talking about his own death, there is another reported death that I am thinking about.  Back in January 2009 I included a quote about banner ads being the next direct mail.  I mean no offense to direct mail but the implication was that the value of a banner ad was diminishing.  The belief was that banner ads were being replaced by social media, which is a disruptive technology much in the same way that e-mail marketing has replaced direct mail in many industries and situations.  Direct mail still is a valuable channel but it is being used more selectively than it once was.

Well reports of the death of the banner ad might be premature.  A recent study by eMarketer predicts that banner ad spending in 2010 will be up 8.2%.

I worked with a Greek statistician who would always try to correct my pronunciation of the Greek letter chi.  I would say “kai” and he would say something similar to “he”.  It was like he and key combined.  I can’t do it justice so I continued to say kai. 

Regardless of how you pronounce it, the chi square test can be very useful.  In fact, one of my business school classes was spent discussing the uses and assumptions of the chi square test.  I won’t try to summarize a semester’s worth of material into a blog post.  Rather, I wanted to point out that chi square tests are used for categorical data and the only “gotcha” is that you have to use the actual counts (rather than percentages).  It is sensitive to cell counts and requires that there be at least 5 observations per cell. 

The chi square test is a powerful statistical tool as it can tell you if there are significant differences between categories and it is the foundation for CHAID.  CHAID is an abbreviation for CHi-square Automated Interaction Detector.  It is one of the many segmentation techniques used in marketing and, if you plot out the tree that results from CHAID, it is a wonderfully visual way to see differences within your customers and/or prospects.  For CHAID you will need to define a dependent variable and undergo EDA (exploratory data analysis) similar to a modeling project.

I was preparing for a meeting with a software company and found myself analyzing their industry using Porter’s five forces.  This is a framework for understanding the dynamics within an industry.  Also, the rigor of analyzing an industry makes you stop and first define the industry.  It sounds simple but can often be complex.  If there are multiple audiences or multiple products, you might want to do the analysis on each.  Next, it requires that you consider vendors, customers, and competitors.  In my first semester at business school, I must have done this exercise at least once a week. 

Years later I could not believe that I was still using this framework but I found it useful in preparing for my meetings.   One of the questions in the software business is who owns the customer?  If the software is sold via a value added reseller (VAR), then they may own the relationship.  Knowledge is power and the VARs may have all the power.  The VAR may know when the customer is likely to want an upgrade, add new seats or licenses, or purchase additional software for related business processes. 

If you are starting to work on a new industry or a new project, consider using the Porter five forces framework.  It can help you get to the heart of the strategic challenges within an industry.