Strategy: Learning From Fiascos
Lesson learned: Your customer analytics could be great, but unless you can execute against them in a compelling way, you could be wasting money. Set expectations properly and use control groups to measure all the variables.
5. Wrong KPIs and Metrics
Story: A B-to-C cataloger recognized more of its newer customers ordered through the Web, but the marketer continued to focus most of the budget and efforts on the catalog postal channel, because the average order value (AOV) was higher for that channel than for orders coming through the Web.
Fiasco: Looking at the data again, the cataloger discovered that while AOV was higher for mail, annual spend per customer was 50 percent higher for emailable customers ordering through the Web. The marketer wasted millions mailing catalogs, impacted margins and slowed profit growth.
Failure: By looking at the wrong metrics, the company failed to notice this trend in a timely way. A likely explanation for higher revenue in the email channel was that the lower cost of email enabled more frequent communications and more total orders, even if AOV was smaller. Within two years, the Web was accounting for the majority of revenue.
Lesson learned: Don't blindly rely on what's worked in the past.
It's painful to think back about these mistakes. Marketers wasted money and missed opportunities, but learned a lot. We hope others can benefit from these experiences.
Mark Klein is CEO at Portsmouth, N.H.-based customer analytics software provider Loyalty Builders. Reach him at email@example.com.