It ain't guessing anymore, folks

25 May 08 - Mark Klein

An interesting article, “Guessing the Online Customer’s Next Want” by Eric Taub, appeared last week in The New York Times. Taub starts out on the right track when he says, “Marketers have always tried to predict what people want, and then get them to buy it.” Many marketers do try to predict. Unfortunately many more don’t bother trying. As a result, you and I are inundated with uninteresting direct mail and email. Happily, Taub focuses on a retailer that does try, and on the methodology being used, collaborative filtering. Calling attention to this effort is worthwhile, and I’m pleased to see a spotlight on predictive analytics.

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The Devil's Compact in Customer Loyalty Programs

20 Apr 08 - Mark Klein

Sometimes I show some resolve and actually carry out my resolutions. Yesterday was one such day—I cleaned out my wallet, which was too light on money and too thick with cards from various loyalty programs. Pruning those loyalty cards made me look at each program and decide whether participation was worth it, whether there was there a decent quid pro quo for using the program.

The obvious description of customer loyalty programs is that they are a way for a company to thank its regular customers for their continuing patronage with rewards and discounts. Whether it is a coffee card for an extra java after ten purchases or free tickets to Hawaii after a winter of business trip, we all especially enjoy the “free” product or service. It’s nice to be appreciated and thanked.

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The "Mathematization" of Marketing

10 Feb 08 - Mark Klein

As word spread of my teleconference for Marketing 2.0 (see previous post), an interesting contrarian opinion appeared in my mailbox. Evidently there was something in the meeting notice to cause a reader to suspect that using mathematics to describe behavior could have negative consequences. He wrote “Is it just me, or do others also wonder where this mathematization of social relationships is leading humankind?”

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Mark Klein is featured speaker at Marketing 2.0 teleconference

08 Feb 08 - Mark Klein

Here's the invitation to the Facebook Marketing 2.0 teleconference where I will be the featured speaker:

You are invited to attend a telephone conference at 1 PM ET on Wednesday February 13 that features Mark Klein talking about behavioral targeting and customer retention. The conference is hosted by Isabel Walcott Hilborn of Marketing 2.0 under the auspices of Facebook. You can see more details, including dial-in information, at http://harvard.facebook.com/event.php?eid=23509056840. If you are not already a Facebook member, you will need to do the simple, free signup.
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Behavioral Targeting vs. Demographics

22 Jan 08 - Mark Klein

In the current post on Metrics Insider, Josh Chasin argues that behavioral targeting is not the be-all and end-all, that demographics is alive and well. He calls demographics “the targeting concept that wouldn’t die.” He says further that “more than half of U.S. ad dollars are placed against traditional demographic targets.”

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Old School vs. New School Testing

10 Jan 08 - Mark Klein

David Baker has a good column in Email Insider this week, What Really Makes An Email Program Click. In it, he writes "Remember one thing: You test to prove or disprove your hypothesis, not just for the exercise."

To me, that sounds like old school testing, where one ‘thing’, one hypothesis, is tested. Formally, that is called split-run or A/B testing. There is only one variable, and two variations of it. It works, but it is time consuming and (if there is more than one hypothesis) needs lots of test subjects and money. Consequently many companies just don’t do it, relying instead on their intuition.

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Can one metric do the job for ranking customers?

05 Jan 08 - Mark Klein

I am admittedly biased. When asked what I think is the best metric for ranking customers, I invariably recommend our proprietary Loyalty Score for a two reasons. First, it is highly predictive, corresponding to the probability that the scored customer will make a purchase in the next period. Second, it’s tested and proven through use by many clients over the past few years. We have a lot of confidence in it. Besides, I enjoy tweaking people who think the only good measure is revenue.

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Have you had a customer conversation lately?

29 Nov 07 - Mark Klein

I like the elegant language we use talking about customer loyalty -‘predictive analytics’ and ‘behavioral targeting’ come immediately to mind. They make loyalty work sound almost like an academic discipline. Good for the ego.

On the other hand, the 50-cent words tend mask the beauty of what customer loyalty applications really accomplish - which is to is let a business person have a privileged and private ‘conversation’ with each and every customer – no matter how many customers are on the books.

You need to be a good listener to learn anything from the conversation. And the process involves some sophisticated math, but the computer does that. However getting to know your customers and their habits definitely isn’t brain surgery.

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