Best Practices Your Path to World-class Direct Marketing
For example, customer behavior and quality varies by source. Sub-segmenting cohorts by their media source can provide further behavioral profiles.
Key sources to segment: telemarketing; direct mail; internet; broadcast; and space ads.
Beyond media consumption, customer behavior is another segmentation variable more analogous among groups responding to similar offers.
Key offers influencing behavior include: payment terms (cash with order vs. free trial, etc.); premium with order; sweepstakes or contest; shipping terms; price difference.
> Customer activity. Other segments to study include any that are used in the normal course of operation. Among them: product line; affinity; recency of activity; monetary segments; gift givers; lapsed customers; proprietary segmentation techniques.
2. Define key statistics for reporting.
In addition to defining which groups you'll want to monitor, you'll need to determine which key measurements to take. These measurements will be used to compare campaigns and business decisions over time.
According to Drake Direct: "These measurements will provide a means of highlighting improvements or degradations in customer performance, growth or shrinkage in desirable customer groups, and a means of comparing new sources of customers to existing channels."
Key measurements to monitor include:
- average number of orders
- average dollar value
- number of orders in past 30, 60 and 90 days
- dollar amount of orders in past 30, 60 and 90 days
- average paid per customer
- ratio of payments to order
- payments in past 30, 60 and 90 days
- proportion of payments on credit card
- average returns per customer
- ratio of returns per customer
- returns in past 30, 60 and 90 days
- time in days since last communication
- time in days since last order
- time in days since last payment
- ratio of orders to offers for cross-sell/retention