Segmenting travelers – Here’s a method to do it

There’s always a lot of thinking & data-driven insights needed on how to approach segmentation of customers. At Cequity, we have always believed that we have to connect transactional data with behavioral observations that can help us identify customer types and segments more precisely. Here’s a method adopted for the travel & hospitality business. Read on:

This questionnaire, developed by travel researcher Stanley Plog, divides travelers into six personality types. At one end of the spectrum are “venturers” who like to strike out on their own to remote places. At the other are “authentics” who prefer Disney World as an adventure.

Two people can take the exact same trip and come away with completely different impressions. Many travel experts offer a short quiz to help define your travel personality. If you love going places, you may be an adventurous traveler. This means generally you love going places you’ve never been, keep your passport current–just in case–or laugh at the very idea of a travel guide book. You are spontaneous and curious and like learning about the world by experiencing it. You look for last minute deals that provide you a chance to explore new places.

Structured travelers like to have a plan in place and look for low stress. You even have an alternative plan if something should go wrong. You like to look at your hotel room by online video so you know exactly what to expect. Laid back travelers handle stress without much anxiety. You choose a relaxing vacation one time and an active one another. You often wait until you arrive at your destination to decide what you will do while you are there.

To find out your travel personality try taking a quiz at a new Web site, www.Besttripchoices.com

The art of scorecarding

The term “Scorecards” originated with the Kaplan and Norton’s definition of the balanced scorecard and was meant to create a strategic method of management. Scorecard software, for its part, is intended to encapsulate a company’s strategic plan and allow operations to be measured against it.

In this way, the scorecard considers information not from the bottom up, with an “in all this data there must be a pony some where” perspective, but from the top down. In other words, What is strategic to our business and can we measure it from the highest levels through the lowest levels of detail to support decisions and action plans?

Scorecards help put these myths to bed by pulling back the wizard’s curtain to reveal critical business data that is specific to authorized executives, managers and departments, in a format which is graphical and makes clear the relationship between content. In effect, scorecards makes visible the results of all the “accounting” being performed in the organization and even step beyond what is typically thought of as accounting to include operational metrics.

Thanks to beyeblogs.com

B2B Loyalty – Best Practices

Here are the latest trends in B2B loyalty, technology and analytics that can help business build a bond with other other businesses:

How do you transform your company from a mere vendor into a valued partner? By building a loyalty platform on a strong foundation of customer data—and leveraging that platform to identify, understand and influence the consumer behind the account number.

Here are some best practices that you should consider:

IDENTIFY: People, not account numbers

Here’s a look at a few of the predominant models for identifying critical B2B contacts:

Give them some face time.

Jeff Hayzlett, Chief Business Development Officer for Eastman Kodak Company, is intimately familiar    with the B2B identification challenge.Given the vast variety of customer types, Eastman Kodak’s approach is to facilitate meetings and events with end users who value the chance to interact with the company on a personal level. Kodak’s annual Graphic Users Association Conference brings Kodak product managers and software developers face-to-face with their end-users, while a series of customer councils for publishers, commercial printers, and database marketers helps Kodak identify key decision-makers and influencers and give them tools to help them grow their businesses.

Use Web 2.0 tools—but warily.

One in three small-business owners now cultivate leads and choose suppliers based on recommendations from social-networking web sites such as Facebook or LinkedIn.”Increasingly, small-business owners are getting referrals and searching for supplier recommendations through their networks. Direct mail, newspaper and broadcast advertising are becoming less efficient mediums for reaching small businesses.”

UNDERSTAND: It’s the database, stupid

Once you have identified your sweet spot of small-business customers, the next step is to spend some time understanding their current behavior and comparing it to that of your best customers. Your goal is to isolate behavioral gaps that can be overcome with the right offer.

Treat your database like an asset.

B2B data degrades much more quickly than consumer data. While a consumer might keep the same email address for most of her adult life, a small-business buyer might change jobs, get a new title or return to the corporate world. That makes data refreshment a continual challenge.

Thou shalt not live on transactional data alone.

A 2008 Marketing Leadership Council study found that, because the cost of switching suppliers is higher and more complex in B2B, “attitudes”—in other words, the customer’s emotional connection to the brand—are often better indicators of B2B loyalty than pure transactional behavior. Small-business customers can look loyal in the transaction file, but a survey might find pockets of disgruntled customers who could benefit from an intervention.

Become a data conduit.

In the consumer world, data tends to flow one way, from the consumer to the database. B2B marketers, by contrast, can also learn a lot about their small-business customers by reversing the data stream. Small-business credit cardholders who lack accounting departments, for example, can benefit from information on their business purchases. AT&T Universal Business Rewards cardholders not only earn Citi ThankYou Rewards points on all purchases, but also gain access to a wealth of tools to help track and analyze business expenses.

Source: Colloquy

Predictive vs Descriptive modeling – Understanding the difference

Many organizations use historical analytics data as a basis for forecasting future growth, and establishing performance goals and budgets. This applicaton for analytics data can blur the distinction between predictive and descriptive data. Understanding this difference is critical to an effective analytics program.

Predicitive modeling refers to a mathematical model that can accurately predict future outcomes. For instance, I know that if I apply sufficient heat to water, the water will reaach 100 degrees celsius and begin to boil (barring slight variations for altitude which are also predictable). The rate at which this happens and the amount of energy required can be mathematically described.

Descriptive modeling refers to a mathematical model that describes historical events, and the presumed or real relationship between between elements that created them. For instance, yesterday when I went to the store to buy milk, it cost me $1.00 a litre, last month it was 95 cents, last year it was 80 cents.. Based on historical events, I assume it will cost me roughly $1.05 to buy a litre of milk next month.

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Case Study: How Harbor Sweets uses customer data effectively

Harbor Sweets is a Massachusetts-based gourmet chocolate company that offers a variety of premium sweets. In 1973, the company emerged from humble beginnings when Ben Strohecker set out to create the “best piece of candy in the world.” The result was Sweet Sloops, a sailboat shaped piece of almond butter crunch, covered in white chocolate dipped in dark chocolate and crushed pecans. Over the years, the company grew to feature additional candy lines and retail outlets across the U.S. Harbor Sweets also added a significant mail-order catalog division.

Their catalog program was successful in delivering sales during key holiday buying seasons, but the company also wanted to ensure that holiday campaign mailings – the main driver of catalog business – were maximizing sales.Harbor Sweets needed a solution that would efficiently turn existing customer data into actionable next steps. Essentially, Harbor Sweets wanted to find out if removing a single mailing to “active customers” from the holiday mail schedule – which included mailings every month from September through December – would conserve marketing resources, while refraining from negatively impacting revenue or overall response rates.

Harbor Sweets conducted a suppression test, assessing how effective the holiday campaign mailings had been at driving sales. Harbor Sweets mailed the catalog to everyone in December and ran a suppression test for September, October and November. The results were surprising.Harbor Sweets was actually hurting sales by mailing too many catalogs to customers during the holiday season. The results also found that the cadence for the catalogs could be reduced to three, while still achieving similar results.

Additionally, Harbor Sweets learned firsthand that it is imperative to be open to analyzing data and customer behavior in new ways.The more information available on existing customers, the more effective the software is in its results, whether it is predicting customer’s next steps or customers at risk of defection.

The results allowed Harbor Sweet to develop a long-term marketing process for the future. The revenue saved by removing one mailing is now applied to another mailing during non-peak times to provide customers with a more effectively targeted, timely catalog.

Source: DM review

Delivering Customer Experience – Good news & bad news

1-to-1 Media has some interesting perspectives on the challenges companies face to deliver a seamless customer experience. Take a look:

What do you believe is your organizations biggest hurdle in delivering an excellent customer experience?
Departmental silos 35.2%
Commitment from the top 17.0%
Recruitment and training 15.9%
Technology 14.8%
Focus on reducing operational cost 10.2%
Lack of investment 6.8%

…..how well customer-centricity has permeated their organizations. On the good news side, the majority of attendees work in organizations that think delivering an outstanding customer experience is everyone’s job. The bad news: 5 percent actually have no one responsible for ensuring that customers have a positive experience.

Who is responsible for customer experience in your organization?
Everyone 64.6%
All front line employees 15.2%
Contact centre employees 7.1%
Customer experience team 8.1%
No one 5.1%

How would you rate your company’s performance against its competitors in terms of customer experience?
Much better 12.3%
Better 32.9%
The same 38.4%
Not quite as good 13.7%
Worse 2.7%

Interesting, right?

Automotive Loyalty – A huge challenge

Automotive customer loyalty at the manufacturer level has dropped by 9.2 percentage points, from 49.1% in 1998 to 39.9% in 2008, and costing some automakers more than US$3 billion in annual sales, according to a study by Experian.

Loyalty challenge
“However, the increased number of available manufacturers and models make engendering customer loyalty a bigger challenge than ever before,” Waldron warned. “Automakers that have a firm understanding of what drives their customers to remain loyal will have a significant competitive advantage in such a challenging market.”

The company suggests that even a small rise in customer loyalty can lead to significant increases in revenue. For example, a manufacturer with 10 million current customers will have approximately 1.5 million of those customers return to market in a given year. A 1 percentage point rise in customer loyalty would produce 15,000 additional annual sales, or approximately US$405 million in additional revenue (based on an average vehicle sale price of US$27,000).

But if that same manufacturer could improve loyalty performance by the 9.2 percentage points lost since 1998, it would generate an additional US$3.726 billion in annual sales.

50 Golden brands that made a difference to the marketing world

1959 was the year The Marketing Society was founded and the birth of modern marketing. Today, The Marketing Society is the most influential network of senior marketers dedicated to championing marketing in the UK.

Selecting a brand for each of the past 50 years was not easy. Their shortlist was assembled using a variety of different criteria. Which brands were launched, relaunched or revamped? Who was winning awards? Who were the top spenders and the top sellers? And which brands encapsulated the zeitgeist of the year?

Take a look

Customer-centric lead scoring

We have always seen that companies struggle to manage the leads that they generate. Either they are not followed-up effectively or there is a conflict of what is defined as a hot/warm lead by sales and marketing or there is no defined process of managing unconverted leads to extract more value out of the marketing investments made.

Tim Wilson has an interesting prespective on the same:

Old school lead-generating efforts often fail because Marketing and Sales initiatives are dependent on each other but disconnected. The image often associated with this relationship is a funnel. At the top of the funnel is Marketing, which finds and lures leads that are then pushed down to the lower portion of the funnel, which is Sales.

This funnel image is fundamentally flawed because it suggests a linear process. Rather, to succeed, the process must be ongoing and circular, like cogs that continue to rotate and engage each other. One cog is Marketing (tactics), and this must be in alignment with a Sales cog (engagement), both of which are driven by a third cog: the continuous process of lead marketing optimization.

Complaints from the Sales department often occur because Marketing prematurely hands over leads to Sales, which creates efficiency problems. First, some of the information that needs to be gathered could have been gathered automatically through a Marketing dialogue. Second, the lack of that information results in lead handoffs that have little or no near-term potential. Over time, these inefficiencies cause Sales representatives to lose trust in the value the Marketing department is providing. In the worst case, it results in the salesperson starting to cold call himself, which makes the level of inefficiency even greater. According to Anders Grondstedt:

“Non customer centric thinking organizations are organized to efficiently produce and distribute goods. They relegate customer management and brand building to marketing and communication departments and agencies that sequester themselves in separate offices, isolated both from each other and from the customer, churning out advertising and other communications material to an information overloaded world. They make a virtue of outspending and outshouting the competition. Run more ads. Maximize the numbers of impressions. Get more ‘ink.’ They are frittering away millions of dollars in “marketing.”

 

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Love your data, set it free!

Data services are freeing corporate data from the silos, allowing for its use on demand while providing security to the data’s custodians. The demand for more data more quickly is driving IT departments to rethink their entire systems architectures.

At Cequity, we have been helping clients work within the constraints of multiple -source systems while making data accessible for marketing when they need it. Our philosophy has been to make data more flexible and easy to access so that enterprises can take advantage of huge amounts of data that they accumulate today.

Dana Gardner writes:

In the past, data was structured, secure and tightly controlled. The bad news is that the data was limited by the firewall of personnel, technologies and process rigidity. Today, however, the demand is for just-in-time and inclusive data, moving away from a monolithic data system mentality to multiple sources of data that provide real-time inferences on consumers, activities, events, and transactions.

The move is in the ownership of data value to the very people who really need it, who help define its analysis, and who can best use it for business and consumption advantage. Analysis and productivity  values rule the future of data as services.The [new] model is of keeping the data where it belongs and yet making it available to the rest of the world.Our data is trapped in these silos, where each department owns the data and there is a manual paper process to request a report.

According to  Brad Svee”..Requesting a customer report takes a long time, and what we have been able to do is try to expose that data through Web services using mashup-type UI (user interface) technology and data services to keep the data in the place that it belongs, without having a flat file flying between FTP servers, as you talked about, and start to show people data that they haven’t seen before in an instant, consumable way.”

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