Evolving RFM analysis for retailers this holiday season

A natural extension of the Pareto principle which tells us that 80% of sales typically come from 20% of clients, RFM goes further to better understand the behavior of customers, and how best to convert them. Dedicated innovators, at dotdigital, we’ve gone that one step further again. For businesses interested in behavior-based targeting and reporting, Engagement Cloud makes these activities possible with its customer dashboard and contact segment builder.

When interviewing retailers about RFM, they challenged us to
go deeper and help them understand customer behaviour over time. Taking this
back to our teams working on data science, we could not have been happier. We
were already thinking and prototyping ideas in this area and were convinced of
its value.

Some examples of what retailers were interested in included:

  • Examining how the number of at-risk customers
    changes over time;
  • Tracking the effects of a two-month marketing
    campaign focused on increasing customer loyalty;
  • Targeting new customers who have become inactive
    in a specific time frame;
  • Seeing where loyal customers come from.

We knew, with Black Friday on the horizon and moving into Q4,
that these items were going to be more important than ever. What’s more, during
the holiday season, your customers don’t act in the same way they do the rest
of the year round. We needed a report that would be as diverse as your
customers’ behaviour.

To visualize this in a concise and attractive way, we chose to use a Sankey diagram.

The Sankey diagram’s origins date back to steam engines,
where the first one was used to show the movement of thermal energy through a
system. Today their use is incredibly widespread. From tracking energy production to
tracking voting habits – Sankeys are popping up everywhere.
Their use is not always appropriate, or enlightening of the data being
presented, but Sankeys are a great fit for our analysis of A-to-B movement.

Our persona movement report is designed to be interactive.
Hovering over a starting persona shows pipes representing destinations;
hovering over a destination persona shows pipes representing sources. Finally,
you can hover over a discrete pipe to see the contacts moving between a source
and a destination. The pipe is clickable, allowing you to dial in a contact
segment and target customers who made that specific movement in the specified
time frame.

In addition to the Sankey, our movement report also tracks the population size changes for each RFM persona between two time periods.

Another great thing to note here as we head into Halloween, Thanksgiving
and beyond is just how robust our RFM model is. It’s not just your customers
that change in the holiday season, it’s your definition of these RFM personas
themselves. Because they are defined by segmented pots with assigned values of
1-5, the goal posts are always shifting. A valuable purchase in August of £50
might be a drop in the ocean compared to the larger spends in November on Black
Friday, so the model must, and does, react and respond accordingly.

Being armed by persona movement reports on top of this means
you have a better idea of your customers (and therefore better plans of action)
across 12 months, instead of writing off valuable data because of seasonal
abnormalities. 

You already know that customers behave in different ways. The data is clear just by looking at your retail dashboard. But do you treat them differently even after knowing this? And how do you do that? Well, it’s true that persona movement reports won’t help you come up the amazing personalization that you, as a marketer, are so good at. But it will empower you to improve re-targeting, measure what’s working, and give you the kind of insight that inspires great campaigns; ones that are every bit as unique and diverse as your customers.

Start sending smarter messages now. Download out factsheet on Commerce Intelligence here.

The post Evolving RFM analysis for retailers this holiday season appeared first on dotdigital blog.

Reblogged 3 weeks ago from blog.dotdigital.com

Email marketing is evolving and knowing your KPIs is more important than ever

KPIs or key performance indicators are becoming ever more integral to the reporting and analysis of email marketing.

There are many reasons why email KPIs are a must, but most importantly:

  • they make it easier for you to align your efforts with wider department/company objectives
  • they help you define success, benchmark against tangible goals and track what works and what doesn’t – so you’ll know what to repeat, and what to never do again!

It’s important to embrace KPIs and view them as a valuable means to drive success rather than pinpoint failure, both individual and company-wide. Metrics help you make sense of all your marketing efforts, putting you in a better position to optimize activities so they contribute highly to overall business growth. 90% of executives surveyed in a recent Return Path report believe that their email marketing strategy is successful in achieving wider business objectives.

A great way to plan your KPIs is to use the SMART planning methodology – this will ensure that metrics are specific, measurable, achievable, realistic and timely. These are all pre-requisites in achieving value from your KPI process.

SMART

Specific – rather than say that you’ll focus on increasing open rates, say by how much i.e. “we aim to increase unique open rates by 5%”

Measurable – make sure you can measure the results of your efforts – luckily with email, just about everything is trackable!

Achievable – set goals which are a stretch and will require hard work, but which aren’t unrealistic. KPIs should be met continuously; falling at the first hurdle will just encourage a deviation from your core objectives

Realistic – think about ways you can turn your goals into reality. If we consider the increase in open rates example, think about how you would go about boosting this metric, via tools such as send time optimization and subject line testing

Timely – give yourself enough time to achieve your KPIs, but not so much time that they lack a sense of urgency and become redundant

Email marketing objectives

When putting KPIs into place, it’s important to understand your core email marketing objectives. The likely ones are:

  • Driving ROI
  • Maximizing conversions (downloads, demo requests, event registrations, purchases etc.)
  • Increasing list growth (i.e. organic: website, in-store)
  • Increasing opens and click throughs
  • Promoting social sharing
  • Reducing bounces
  • Decreasing unsubscribes

Of these objectives, ROI tends to be the most crucial for key stakeholders. However, as they’re all interconnected with revenue growth, it’s advisable to measure them individually so that you can better judge your email performance. According to Return Path, 67% of top executives surveyed in its report believe that conversions are the most useful KPI for measuring email success, followed by ROI and click throughs.

KPIs will be different for every single business. Start with your top-level goals, filter down to objectives and then set granular metrics that benchmark your success. Email is widely considered as the most effective online channel, essential in funnelling sales and driving revenue. Many will therefore have a vested interest, so it’s more important than ever to track and optimize its performance.

The post Email marketing is evolving and knowing your KPIs is more important than ever appeared first on The Marketing Automation Blog.

Reblogged 1 year ago from blog.dotmailer.com

How to dominate local SEO: more challenging in an evolving local search environment

Columnist Sherry Bonelli explains how recent changes to the local search landscape point to an ever-changing discipline that requires increasingly complex strategies.

The post How to dominate local SEO: more challenging in an evolving local search environment appeared first on Search Engine Land.

Please visit Search Engine Land for the full article.

Reblogged 3 years ago from feeds.searchengineland.com