It’s All About the Offer: Marketing on the Left Side of the Brain
Transaction Data Reveals Opportunities
Transaction data generates other knowledge that can help target campaigns. Which items are the customers in buying mode going to buy? Customer data not only will show what items are bought on a regular schedule, but also which items drive the purchase of other items—knowledge astute marketers can use to generate combination, upsell offers at the right time.
Transaction data also uncovers cross-sell opportunities when customer market baskets are compared. There are items in every company’s product portfolio that some customers will purchase even though they’ve not bought them before. It could be an item they’ve never tried. Perhaps it’s something they already buy from a competitor. Whatever the reason, customers’ not-yet-purchased items represent an important business opportunity.
A business can age its customer inventory in much the same way as it ages hard inventory. The result may be a decision to write off some low-yielding customer assets. Or, it could be a decision that every customer on the books has some value and that the key to extracting that value is to deal with each one in a way that’s appropriate to his needs and the profit he generates.
The customer segmentation in this chart illustrates the kind of knowledge that can be gained by analyzing customer transactions. Here, we have used our own scoring methods to assign each customer to a loyalty group, based on his or her purchase behavior. Each point on the chart represents an individual customer, and is located on the chart based on a blend of the current behavior, lifetime behavior and loyalty metrics we’ve developed. You can develop measurements like these for your own business.
On this chart (see bottom of the page), half the customers lie on either side of the vertical or horizontal lines. Tracking the movement of these lines—left to right, up and down—from analysis to analysis can reveal much about the health of a customer population overall.