Do-It-Yourself Customer Modeling
creates High ROI Customer Marketing
Hi there, Jim Novo here. This site is home for The
Drilling Down Project - a collection of articles,
tools, and services
you can use to take control of your customer data and
use it to improve profitability.
The Project includes this site, blog,
newsletter, book with free customer scoring software,
and High ROI Customer Marketing
Services / Workshops.
If you are looking to avoid the risk and cost of installing
a customer data analysis "solution," but want to take advantage
of high ROI customer
marketing tactics, this site and book
are for you. You can develop a very simple toolkit, build experience
with High ROI customer modeling techniques, and make more money
using the Drilling Down method.
to Slow Connection / Alternative Browser version of site
Here's how it works: customers are scored on their
transactional activity (purchases, page views, log-ins, etc.) with
an Excel spreadsheet, or by
the Access application that comes with
the book, or by your own application (business rules supplied).
The scores represent the likelihood of each
customer to respond to marketing and remain a customer,
allowing you to rank your customers by their potential
value. Knowing potential value, you can:
- Get more customers like the best ones
- Focus on growing the
profitability of middle potential customers
- Stop wasting resources acquiring and marketing to low
Then, "trip wire" reports are run each week or month and
changes in potential value scores are monitored. Rising scores
indicate the potential value of the customer is rising; falling scores
indicate decreasing potential value - and signal the customer is
becoming less likely to continue on as a customer. Trip wire reports
monitor changes in score and "flag" important
changes in potential value, allowing you to:
- Emphasize the ads, media, and products creating long term high
potential value customers and downplay ones that don't
- Create High ROI marketing programs and make more money selling
- Predict when best customers are about to leave you and react
with customer retention and save-a-customer programs
- Quantify the profitability of marketing and operational initiatives by
linking them to a change in potential customer value
Customers can be scored by segment (demo, geo, source, media,
product) or as individuals.
You can get started right away discovering the clues to
increased profitability locked away in your customer data without long lead times
and a lot of expense.
Then, when you have the experience and the ROI justification
you need, you can move up to
a more powerful solution at your own pace - and bring with you real-world
in driving profitability using customer data for decision making.
Click Here for
Step-by-Step Contents of Book
or you can read more about High ROI Customer
Marketing techniques below...
High ROI Customer Marketing
Using Customer LifeCycles:
Trip Wire Marketing
pages, easiest to implement)
Using LifeTime Value:
pages, a little more challenging to implement)
Latest Customer Marketing Content
Defining Behavioral Segments
Yesterday's Most Popular
"Pre-CRM" Testing Techniques -
Determining the Potential for
Marketing ROI Before You Buy
I was the VP of Marketing and Programming for Home
Shopping Network, overseeing marketing and merchandising efforts for TV
the Catalog division, and Interactive on CompuServe,
Prodigy, and the Internet.
Over a 10 year period we developed and tested a method for increasing customer value while reducing marketing
costs through modeling customer behavior. Using simple
query tools and tough ROI formulas, we frequently generated returns
on marketing spending of
over 100%, with some programs returning 400% or more. This was
before there was such a thing as "data mining."
How we did it is the subject
of this site, the Drilling
Down book, and the High ROI Customer Marketing Roundtable
Easy to Understand
The Drilling Down method
is very mechanical in
nature. Customers are classified and compared with each other
on a number of parameters using their transactions - not personally
intrusive questions. There's not a
lot of guesswork involved; the scores and changes in the scores tell
you all you need to know. You don't have to be a database
marketing expert - just someone with common business
sense. If an ad you run, product you sell, or content
you provide consistently creates low scoring customers, ditch
it. Focus resources on the ads, products, and content creating
high value customers.
IT people love this method (clue: it was developed from the beginning
with IT people
involved). They think of the Drilling
Down book as the "Customer Analysis Requirements Document" they
could never manage to get out of Marketing, because it provides a
very logical, iterative approach to allocating resources and
increasing customer value. IT folks without a lot of marketing
support are just "running with it," building up a store of
important behavioral data to be used later on when the marketing
support comes onboard.
Read user comments on the method
Why Does the Method Generate High ROI?
It's a "low hanging fruit" idea and inexpensive to set
up and use. The Drilling
Down method provides a structure for organizing your
approach to customer data and identifying the highest ROI
opportunities. You spend very little on new infrastructure, use existing
IT resources, and drive real bottom line impact.
Proven Approach, Real Results
This site is designed as a preview of the Drilling
Down method, and provides
many examples of customer marketing models and techniques you can start
using today. By
reading the articles and taking the tutorials
you will begin to understand there are real methods and metrics
behind the hype you have been exposed to the past few years.
The fact is, some of these techniques have been around for
decades, and have been over-complicated and over-hyped by the
various players in the space. I have personally been working
with some of these methods since 1983. Customer behavior
modeling has a very long
history of success, proven to work again and again across many
different business models. And it's privacy friendly.
These methods work very well using only customer transactions (page
views, purchases, log-ins,
contacts, etc.) to predict future behavior.
Go to Specifically What the Book Teaches
I guarantee you will learn
some common sense, easy to implement customer marketing optimization techniques from
going though this site. The topics covered on this site represent
"building blocks" used in the Drilling
Down method, the foundation - and are actionable ideas by
themselves. As you
go through the site, you will be building an
appreciation for how powerful simple customer modeling can be, and understand
you can do it yourself.
If you want to access the complete step-by-step Drilling
Down method for creating high ROI customer marketing
programs, you should consider purchasing the book,
which comes with a free customer scoring
If you are not in "do it yourself" mode, please review my
hands-on needs discovery, pre-CRM ROI analysis /
teaching programs tailored to
where you are on the Database Marketing / CRM Analytics learning
curve. If you represent a marketing agency or software
company, see the subcontracting
Good luck to you!
- Jim Novo
Helpful Links: The Drilling
Down method is a tight integration of many
concepts you read about all the time that never seem to make much
sense by themselves. The site was
designed to teach you how to get started with behavior-based marketing even if you don't have any previous experience. Navigation at the
top of every page is in 3 primary sections:
Marketing Approach describes how
customer data is used to fuel High ROI Customer Marketing under
different marketing scenarios. Past customer behavior is predictive of future
customer behavior - and if you can predict behavior, you can make
more a lot more money marketing to customers.
puts forth the basic frameworks for thinking about behavior-based
marketing and how it might help you. Turning marketing strategy
into action based on predicting customer behavior is the focus here.
Customer Models are
tools you can use right away to create very High ROI Customer
Marketing Programs. Models are about who, when, and how to
market to customers to ensure the very highest profits.