24 June 2013
05 May 2013
RFM Analysis & the Triangular Theory Of Love
The simple RFM analysis has been the backbone of many a successful CRM program. Predictive CRM models, and predictive technologies in general, are getting sophisticated, but few brands and companies have access to the kind of data, tools, skills or budgets yet to make the best use of them.
The easiest way to develop a Recency, Frequency, Monetary (RFM) CRM model is to map the spread of date from purchase, # of times purchased over a time period and total money spent during the time period - to bucket the individuals relative RFM value into either a High (3), Medium (2) or Low (1). For example an individual with a High Recency, High Frequency & Medium Monetary Value would be classified as a 332.
This results in a snapshot of loyalty expressed through spends, 8 clear segments and broad recommendations on next actions to work relationships - including which ones to nurture, woo or ignore.
Suffice to say the RFM model operates on a rather limited & rational viewpoint of marketers and purchase behaviour to define loyalty, expressed via a single dimension, when true loyalty should involve hearts as much as spends.
Reality is that not all people care, or are interested in relationships with brands - at least not the kind of relationships they have with people they care about. As Rob Campbell & Charles Wigley spoke a year ago "Loving Brands and loving a brand are very different."
Agree, not all brands will have fanboys. Nor will all active users profess love for their brands. Within this limitation, the Triangular Theory of Love may just be a nice complement to RFM - to peg expectations, measure and nurture emotional loyalty.
The easiest way to develop a Recency, Frequency, Monetary (RFM) CRM model is to map the spread of date from purchase, # of times purchased over a time period and total money spent during the time period - to bucket the individuals relative RFM value into either a High (3), Medium (2) or Low (1). For example an individual with a High Recency, High Frequency & Medium Monetary Value would be classified as a 332.
This results in a snapshot of loyalty expressed through spends, 8 clear segments and broad recommendations on next actions to work relationships - including which ones to nurture, woo or ignore.
Suffice to say the RFM model operates on a rather limited & rational viewpoint of marketers and purchase behaviour to define loyalty, expressed via a single dimension, when true loyalty should involve hearts as much as spends.
Reality is that not all people care, or are interested in relationships with brands - at least not the kind of relationships they have with people they care about. As Rob Campbell & Charles Wigley spoke a year ago "Loving Brands and loving a brand are very different."
Agree, not all brands will have fanboys. Nor will all active users profess love for their brands. Within this limitation, the Triangular Theory of Love may just be a nice complement to RFM - to peg expectations, measure and nurture emotional loyalty.
- Both RFM & the Triangular Theory are based on 3 identifiable & trackable Parameters - Recency, Frequency, Monetary vs. Intimacy, Passion & Commitment
- Both give you a snapshot of the state of affairs and output 8 clear actionable segments - RFM as above and these 8 based on Intimacy, Passion & Commitment
- Both can be assigned at an individual level to come up with a plan to nurture, woo or ignore relationships.
As I write we are are on the cusp of rolling out a massive CRM program in Infant Nutrition. Will share learning in a few months from now.
PS:
Credits & thanks to Rob Campbell and Charles Wigley for the above 2 slides. Taken from their joint talk at the Asian Marketing Effectiveness Awards, Shanghai 2012.
PS:
Credits & thanks to Rob Campbell and Charles Wigley for the above 2 slides. Taken from their joint talk at the Asian Marketing Effectiveness Awards, Shanghai 2012.
09 March 2013
Changes to Facebook News Feed
A quick summary of the changes announced on 7 March 2013, and what it could mean to brands:
- The new design will be rolled out slowly to web users. Existing content & ads are not impacted. Mobile changes to be rolled out by end March.
- No change to Edgerank. The selection and order of stories will stay the same
- Specs for page posts and ads does not change, but they will be displayed differently in both the news feed and ads.
- Some Photo Page posts may have the caption on top of the image
- Page Like Stories will display the cover photo of the brand's page.
Details at http://www.facebook.com/about/newsfeed.
11 February 2013
Misconceptions on the role for Social in CRM
As a practice, Customer Relationship Management (CRM) is simple in concept but complex to pull off well.
In it's simplistic view, CRM is about aiming to build the kind of relationship a neighbourhood grocer would have with regular buyers, except it needs to be operational at Scale. Technology, Business Rules & Services - Databases, Marketing Automation, IVRs, Mobile Apps, Rewards, Call Centres, Analytics - to name a few, are necessary to make this CRM vision a reality. A good CRM strategy - one that really attracts & influences loyal behaviours - is complex to architect, implement and even more to operationalise without glitches. But when it comes together, it's works like a charm to nurture and attract mutually beneficial relationships.
Which is why I find it baffling when the term "Social CRM" is thrown around loosely as a modern substitute for anything & everything "CRM." I disagree.
Yes, branded Social Channels offer lots of options for brands to reach out, engage, influence and help spread the word. But IMO they are best suited to:
It's been proven, time and again, gains in market share for brands comes first through increasing popularity, i.e by gaining more buyers of all types, most of whom are light and buy occasionally. Branded Social channels can play this role, whilst more private channels work to complement. So while Social is not a substitute for everything CRM, as yet, it can work wonderfully well if its role in the mix is defined well at planning, taking into account it's limitations.
In it's simplistic view, CRM is about aiming to build the kind of relationship a neighbourhood grocer would have with regular buyers, except it needs to be operational at Scale. Technology, Business Rules & Services - Databases, Marketing Automation, IVRs, Mobile Apps, Rewards, Call Centres, Analytics - to name a few, are necessary to make this CRM vision a reality. A good CRM strategy - one that really attracts & influences loyal behaviours - is complex to architect, implement and even more to operationalise without glitches. But when it comes together, it's works like a charm to nurture and attract mutually beneficial relationships.
Which is why I find it baffling when the term "Social CRM" is thrown around loosely as a modern substitute for anything & everything "CRM." I disagree.
Yes, branded Social Channels offer lots of options for brands to reach out, engage, influence and help spread the word. But IMO they are best suited to:
- Getting conversational with prospects
- Driving light buying
- Showcasing excellent customer service / customers belief in the brand - to influence prospects
It's been proven, time and again, gains in market share for brands comes first through increasing popularity, i.e by gaining more buyers of all types, most of whom are light and buy occasionally. Branded Social channels can play this role, whilst more private channels work to complement. So while Social is not a substitute for everything CRM, as yet, it can work wonderfully well if its role in the mix is defined well at planning, taking into account it's limitations.
27 December 2012
Google, Panupol Sujjayakorn & Search
Why was Alexander the great, so great? Ermm...because he had the best possible teacher & advisor in Aristotle. Replace "Alexander" in your query with "Akbar" and a certain Birbal pops up. Repeat with "Chandragupta Maurya" and Chanakya pops up.
So the common denominator, behind the successes of these great rulers, were trusted advisors. These advisors managed, processed & contextualized fractured pieces of information and knowledge together - sometimes giving these rulers the information & advice they were actively seeking. Or sometimes providing information proactively when they felt the context was relevant.
Today, the closest most of us have to these trusted advisors are search engines.
At last count, Google has indexed more than 120 Billion URLs & has PageRank. Competing search engines have their own levels of index and secret sauce to generate results. Whilst one can pretty much find information on anything through a few refinements to a search query, or sometimes by just recognising a phrase, search experiences are still constrained by a couple of hairy challenges:
The closest analogy to this experience is the amazing story of the former World Scrabble Champion - Panupol Sujjayakorn. Here was a guy with very little knowledge of English, who memorised words acceptable in Scrabble without knowing their meaning, and went on to win the World Scrabble Championship!
The good news is all of this is changing - through the introduction of Structured Experiences, Machine Learning, Artificial Intelligence & Context into Search.
An understanding humans need answers, not links when they search, has given birth to structured search experiences - the likes of Siri for starters. If sales are proof such experiences are valued, look at what Siri did to the sales of iPhone 4S.
Another evolution underway is the introduction of Neural Networks & Artificial Intelligence. Google, is experimenting with videos featuring cats and is learning how it can teach networks to adapt themselves & learn what is important, rather than look at the previous visitor paths & clicks to serve presumed results to similar types of searches.
Talking of context, a billion+ smart phones are in use today and they just about provide the missing clues for search engines to improve relevance in real time. Google Now , for example, is an indication of experiences to come - whereby search engine evolve from the role of trusted advisors, to becoming more like a personal assistant.
Whilst these advances in Technology, Intelligence & Relevance are great for improvements in online search experiences, on another frontier, the race to digitally annotate and help discovery of the physical world has begun. Google again currently leads this field via offerings such as Field Trip & Project Glass.
Both Field trip & Project Glass are interesting projects, the adoption of which shall provide answers to some key questions in days to come:
So the common denominator, behind the successes of these great rulers, were trusted advisors. These advisors managed, processed & contextualized fractured pieces of information and knowledge together - sometimes giving these rulers the information & advice they were actively seeking. Or sometimes providing information proactively when they felt the context was relevant.
Today, the closest most of us have to these trusted advisors are search engines.
At last count, Google has indexed more than 120 Billion URLs & has PageRank. Competing search engines have their own levels of index and secret sauce to generate results. Whilst one can pretty much find information on anything through a few refinements to a search query, or sometimes by just recognising a phrase, search experiences are still constrained by a couple of hairy challenges:
- Limitations of Boolean
- Limitations of Context
The closest analogy to this experience is the amazing story of the former World Scrabble Champion - Panupol Sujjayakorn. Here was a guy with very little knowledge of English, who memorised words acceptable in Scrabble without knowing their meaning, and went on to win the World Scrabble Championship!
The good news is all of this is changing - through the introduction of Structured Experiences, Machine Learning, Artificial Intelligence & Context into Search.
An understanding humans need answers, not links when they search, has given birth to structured search experiences - the likes of Siri for starters. If sales are proof such experiences are valued, look at what Siri did to the sales of iPhone 4S.
Another evolution underway is the introduction of Neural Networks & Artificial Intelligence. Google, is experimenting with videos featuring cats and is learning how it can teach networks to adapt themselves & learn what is important, rather than look at the previous visitor paths & clicks to serve presumed results to similar types of searches.
Talking of context, a billion+ smart phones are in use today and they just about provide the missing clues for search engines to improve relevance in real time. Google Now , for example, is an indication of experiences to come - whereby search engine evolve from the role of trusted advisors, to becoming more like a personal assistant.
Whilst these advances in Technology, Intelligence & Relevance are great for improvements in online search experiences, on another frontier, the race to digitally annotate and help discovery of the physical world has begun. Google again currently leads this field via offerings such as Field Trip & Project Glass.
Both Field trip & Project Glass are interesting projects, the adoption of which shall provide answers to some key questions in days to come:
- Are we humans ready for our physical worlds to also be digitally annotated?
- Will we demand it? If so, will it give rise to a new wave of SEO like services?
- Should such services just show us more of what we like, what our connections like or introduce us to new stuff?
09 December 2012
Salvation Army adds Mobile to Handbells & Red Kettles.
For over a hundred years, around the world, the sight of a dapper volunteer, a ringing bell and bucket means one thing - the start of the Salvation Army christmas collection drive.
Over this weekend, in Seoul, I was pleasantly surprised to see the addition of a Mobile option to the Kettle. Yes, it's in high-tech Korea, and the technology for money transfer via mobile is ready. But to see Salvation Army deploy this option is refreshing.
But beyond refreshing, it's smart for a few reasons, including:
- That channel choices, drive brand choices is a known adage. The addition of a mobile option gives the Salvation Army an edge over competing choices
- Mobile can also help bring in new donators.
- As one does not see an immediate pinch, when donating via credit cards, the possibility of the donation amounts being higher than typical loose change increase.
I hear the Salvation Army is targeting to collect 5 Million Won this Christmas. I'd be curious to know how much of this comes in via the mobile.
04 November 2012
Checklist to Asses your Social Media Monitoring Priorities & Needs.
Below is a useful checklist to prioritize your social listening priorities (courtesy Altimeter Group)
It's more than a year old, but still relevant. The full report by the Altimeter Group on Social Analytics can be downloaded from here.
It's more than a year old, but still relevant. The full report by the Altimeter Group on Social Analytics can be downloaded from here.
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