The Five Laws of Velocity Marketing
Customers along or near an imaginary diagonal line running from lower left to upper right have the same current and historical purchase patterns; these are the "Steady Eddies." Those in the off-diagonal quadrants are customers with changing velocity. Many of the Steady Eddies are excellent customers, leading us to the fourth law of velocity marketing: Covet your steady customers; they are the backbone of your business. Data shows that two-thirds or more of the Steady Eddies will buy in the near future. In the battle for growth, customer acquisition can divert attention from regular buyers who are the foundation of every business.
Given a group of customers in motion, what can a marketer do to maintain its activity and keep it on a growth path? Our analyses of customer behavior indicate that active customers tend to stay active, and if for some reason they are lost to a competitor, they'll remain growth prospects. Therefore, the fifth law of velocity marketing asserts that customers in motion tend to stay in motion—provided they're marketed to effectively. This means they should be segmented, analyzed and marketed to based on their behavior. Again, customer analytics strongly support this result.
Customers in Motion … What to Do?
The analytics marketplace now offers sophisticated tools to spot customers' state of motion. By first segmenting customers into loyalty groups, then mapping their behavior over time and monitoring changes in their revenue, their movement can be determined, and their next actions can be predicted. This gives a marketer the power to:
• Spot new customers who are likely to become better customers.
• Use marketing strategies and campaigns that take advantage of their activity state. (It's obvious that contact strategies for new customers and potential defectors need to be different. One size does not fit all.)
Velocity marketing works because it is rooted in an essential reality—customer behavior, the most predictive measure a marketer can have of what's likely to happen next. Demographics, psychographics and satisfaction surveys all have their place in a marketer's arsenal. But experience has shown us that analysis of customer behavior remains a marketer's most effective weapon in the battle to build a business.