Strategic Analytics Archive
The Price Is Right
Posted by: David King on Monday, December 6th, 2010
Understanding pricing is fundamental to understanding customer behavior. Yet many databases fail to provide marketers useful pricing data.
Those Zig-Zagging Customers
Posted by: David King on Tuesday, October 26th, 2010
We look at the phenomenon of zig-zagging, in which more valuable customers tend to spend less with our brand over time.
…Of Drowning Statisticians and Regression Toward the Mean
Posted by: Hongjie Wang on Monday, October 25th, 2010
Regression toward the mean is a phenomenon that we often fail to recognize, something we do at our peril, especially when using models in contexts for which they were not developed.
Targeting by Incrementality: What Marketers Can Learn from Political Campaigns
Posted by: Hongjie Wang on Monday, April 12th, 2010
In recent years, political strategists increasingly have used approaches and techniques that are remarkably similar to those in other forms of marketing. Direct mail and email campaigns have been around for a long time for candidates at all levels of political campaigns. Social media-based grassroots campaigns were credited as one of the key factors in [...]
Leveraging Customer Segmentation for Marketing Mix Planning
Posted by: Hongjie Wang on Monday, April 5th, 2010
Recently, I was on a round-table panel with several senior marketers on the topic of marketing mix modeling and planning. One of the questions we spent quite a bit of time discussing is the challenge associated with media/channel attribution in a social network setting, and the related issue of resource allocation across different vehicles and [...]
Rethinking Your Most Valuable Customers
Posted by: Greg Grundzinski on Monday, March 15th, 2010
Retail marketers would do well to start thinking of “Most Valuable Customer” as a state or phase that a subset of customers will pass through rather than as simply being a discrete set of shoppers. Doing so will quickly shift the internal focus to ”how do we get more customers into this state and keep [...]
Four Ps of Marketing and Strategic Analytics
Posted by: Hongjie Wang on Wednesday, March 10th, 2010
Price, Promotion, Product and Place have been among the traditional marketing instruments for decades. However, “four Ps” marketing has been criticized by professionals and academics in the direct marketing/database marketing and CRM space. These experts correctly point out that 4P conspicuously lacks any meaningful consideration of customers. In fact, many in the CRM industry dismiss [...]
A Simple and Useful Metric to Supplement RFM
Posted by: Hongjie Wang on Monday, March 1st, 2010
RFM (Recency, Frequency and Monetary) has been one of the most popular and important approaches for segmentation and target modeling in direct and database marketing for the past 50 years. There are many variations and extensions to the basic RFM. For example, we expect customers with longer tenure to have higher frequency and are likely [...]
Directing Segmentation
Posted by: David King on Wednesday, January 13th, 2010
With the arrival of the new year (and new marketing budgets), more than a few companies may be contemplating developing and implementing a new customer segmentation. Having seen my share of such projects over the years, I’d like to offer a specific suggestion for how marketers can plan for a more useful segmentation. The “Tell [...]
Determining Campaign Response Rates – A Bayesian Approach
Posted by: Hongjie Wang on Friday, November 13th, 2009
Bayesian techniques are gaining considerable popularity in marketing applications, thanks to advances in modern computational algorithms and the power these techniques unleash. In the academic community, the Bayesian approach is preferred for many marketing models. In fact, these days, in most peer-reviewed marketing journals, it would be difficult to find one issue where at least [...]
I’ll Go To The Gym — Tomorrow
Posted by: David King on Monday, November 9th, 2009
One of the wider debates about the economy is whether the severe recession will alter consumption patterns. From the perspective of classical economics, one might suggest that the answer is “yes.” Consumers, businesses, and financial institutions will have learned from the experience and will return to a more balanced, cautious approach to consumption, borrowing, and [...]
Customer-Centric Analytics Makes Both Mathematical and Business Sense
Posted by: Hongjie Wang on Tuesday, October 27th, 2009
Experts in database marketing have long advocated the importance of customer-centric marketing. To support a customer-centric business strategy, a company needs to adopt customer-centric analytics, especially if the company is going to leverage analytics as a strategic and competitive asset. By customer-centric, we mean that the orientation of the analytics needs to focus on the [...]
Life After Segmentation
Posted by: Richard Muller on Wednesday, September 30th, 2009
In Part 1 of this two-part post, I outlined how BCAA, one of North America’s largest AAA organizations, has used a custom segmentation model built entirely from their own membership data to improve the content and flow of communications, both through direct mail and email, and at the point-of-sale. In this post, I discuss how BCAA [...]
Rethink the Pareto Principle in Customer Profitability
Posted by: Hongjie Wang on Thursday, September 3rd, 2009
My original post on this subject was expanded into an article and was published in Bank Systems & Technology.
Intelligence Through Meta Data
Posted by: Hongjie Wang on Tuesday, September 1st, 2009
In my last article, Using Hierarchy in Data, I wrote about the importance of hierarchical data and how it often is neglected due to the challenges in brings. My argument presupposes that such data has been captured and formatted in a way that preserves such information. Moreover, there are opportunities to enhance the existing data [...]