Nuts & Bolts - Database : Micro-target to Cut Attrition

January 2008 By Daniel Smith

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In the last few years, a new marketing paradigm, event-based marketing (EBM), has emerged to turn traditional segment-centric direct marketing on its head. By monitoring customers’ ongoing Web activity and immediately reacting to any significant changes in visit behaviors, marketers now can micro-target communications to an audience with an immediate need or demonstrated attrition risk.

For any given customer, a significant change in Web visit frequency, visit duration or access location can represent important marketing opportunities. The key to this approach is to understand what constitutes “significant.” For customer A, who for the last 12 months has visited the site once every seven to nine days, three site visits in the last seven days may represent a significant increase in activity. For customer B, who for the last 12 months has visited the site once or twice per day, three site visits in the last seven days may represent a significant decrease in activity. The basic premise of an effective EBM program is not to create programs based upon general behavior (i.e., “I’ll send a coupon offer to all customers who visited the site three times in the last seven days”), but instead to build programs that react to a change in behavior—send an e-mail to customer A with a “thank you” for his increased activity, while perhaps sending customer B a “win-back” offer to bring her back to the site at her prior frequency.

Another important component to track is content. If a repeat buyer has a long-established pattern of visiting certain content areas of your site—for example, online bill payment on a weekly basis—and has now visited your mortgage pages for the first time in the past 12 months—and that visit is of a significant duration (or is repeated in a short period of time)—it is reasonable to assume the customer is shopping actively for a mortgage. In the world of EBM, “timing is targeting.” By reacting immediately to customer-specific behavior changes that constitute cross-sell opportunities, marketers can drive campaign conversion rates that are two to eight times more than what can be achieved through typical “profile-based” marketing programs.

Daniel Smith is the vice president of industry solutions for Unica Corp., a Waltham, Mass.–based global provider of enterprise marketing management (EMM) software. He can be reached at dsmith@unica.com.

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