The Five Laws of Velocity Marketing
If customers in motion are prime targets, the most active ones hold the greatest promise. Active customers, those who are ready to buy (i.e., the "low hanging fruit"), exist in all loyalty segments, as shown by the many blue dots in quadrant II. These are the promising "newbies," a great source of near-term revenue who often are ignored by companies that focus exclusively on their best customers.
Hence the second law of velocity marketing says that low-hanging fruit often are not in your top marketing segments. The table below, created from a recent analysis, shows the percent of customers in the lowest three loyalty groups who purchase in the next period in which velocity marketing is used to select prospects.
Purchase probability analysis will identify what these new and promising customers are planning to buy, so that marketing campaigns can be directed at them.
Don't Let Potential Defectors Escape
Many of the customers in quadrant IV are in danger of defecting, but they aren't yet lost causes. Velocity marketing spots them well before they defect, and they shouldn't be written off (and handed over to a competitor) without a fight. Analytics that predict what they will buy next, combined with offers that take advantage of that information, can be used to bring potential defectors back into the fold. The third law of velocity marketing is that customers going south often are waiting for a reason to head back north.
What About the Steady Eddies?
Not every customer has a changing velocity. Many stick to a more regular rate of purchasing, at frequent or widely spaced intervals. These customers are clustered at the center of the velocity map in Figure 1 and can be hard to discern. To get some visibility into behavior, use a different behavior map—one that plots current level of activity against historical level, as shown in Figure 2.