Loyalty Builders is a Hubspot customeroya y u d s s a ubspo us oWe practice what they preachFor existing customer marketing, we’ve g g,recognized there is a parallel set of tools and processesWe’re here today to describe that process, so…

Inbound marketing at our Inbound marketing at our companycompanycompanycompany

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Managing the bottom Managing the bottom of the funnelof the funnel

Dr. Mark KleinDr. Mark KleinCEO and Founder

Loyalty Builders LLCmarkk@loyaltybuilders.comy y

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The top of the sales funnel is filled with op o sa s u s dleads from your marketing effortsThe bottom of the funnel is where those leads appear as customers

AcquisitionAcquisition

What happens at the bottomWhat happens at the bottomRetention

What happens at the bottomWhat happens at the bottom© 2008 Loyalty Builders LLC

Now that you’ve captured that new customer, it’s time to start work on start work on retentionMost revenue for most companies most companies comes from existing customers

Don’t let your good work go to Don’t let your good work go to wastewastewastewaste

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Keywordsy o dsInbound linksMetadataBlogs, news releasesTraffic analysisConversions

Retention

Inbound marketing tool setInbound marketing tool setInbound marketing tool setInbound marketing tool set© 2008 Loyalty Builders LLC

Behavioral trackingBehavioral trackingPredictive analyticsB h i l t tiBehavioral targetingWhat-if analyticsAt-risk analysisTestingTesting

Existing customer marketing toolsExisting customer marketing toolsExisting customer marketing toolsExisting customer marketing tools© 2008 Loyalty Builders LLC

The Internet has changed the gameas a g d ga“Spray and pray” is expensive and less effectiveWe’ve learned to generate and collect dataMathematical tools are more widely accessible to non-mathematicians

What’s changing in marketing?What’s changing in marketing?What s changing in marketing?What s changing in marketing?© 2008 Loyalty Builders LLC

The process of marketing to existing t b d i tifi customers based on a scientific

understanding of how past customer b h i di t f t hbehavior predicts future purchases

Mathematical MarketingMathematical MarketingMathematical MarketingMathematical Marketing© 2008 Loyalty Builders LLC

A new set of rules guides A new set of rules guides marketers in this new

i tenvironment

Using the new toolsUsing the new toolsUsing the new toolsUsing the new tools© 2008 Loyalty Builders LLC

Rule #1: Capture transaction dataRule #1: Capture transaction data

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Rule #2: Use your eyesRule #2: Use your eyesRule #2: Use your eyesRule #2: Use your eyes© 2008 Loyalty Builders LLC

When a company adopts Mathematical a o pa y adop s a a aMarketing, the big change is from product-focused to customer-focused marketingIn a customer-focused world, different ff t diff t toffers go to different customers

But everyone wants to do cross-sell

Rule #3: Focus on customer Rule #3: Focus on customer needs, not just product featuresneeds, not just product featuresneeds, not just product featuresneeds, not just product features

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Finding CrossFinding Cross--sell candidatessell candidatesFinding CrossFinding Cross sell candidatessell candidates© 2008 Loyalty Builders LLC

Testing is one of the two best ways to s g s o o o es ays oimprove response in marketing campaigns◦ Personalized offers is the otherMultivariate testing is the way to do this quickly and cheaply

E t t d f i dl t l ◦ Expert systems and user-friendly tools now available◦ Email is a great test bedg

Rule #4. Test, test, and test again Rule #4. Test, test, and test again Rule #4. Test, test, and test again Rule #4. Test, test, and test again © 2008 Loyalty Builders LLC

There are worthwhile customers at all points along your scoring scale, and different reasons to touch them◦ Should have’s but didn’t◦ Should have s but didn t◦ Win-backs◦ At-risk◦ Promising newbies◦ One-time or two-time buyersAny scale, even RFM, is better than no Any scale, even RFM, is better than no scale and spray and pray

Rule #5. Look in every nook and Rule #5. Look in every nook and crannycrannycrannycranny

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Two different customer spectrumsTwo different customer spectrumsTwo different customer spectrumsTwo different customer spectrums© 2008 Loyalty Builders LLC

Peter Drucker: “If you can’t measure it, you can’t manage it.”Compare how predictions match actual resultsresults◦ Response rates are usually more accurate than

revenue, but both should be close to predictions◦ Compare to ‘spray and pray’ also◦ Compare to spray and pray alsoConstantly monitor your at-risk predictions◦ Knowing which customers are likely to defect is the

first step in preventionfirst step in preventionMonitor purchase probabilities too

Rule #6. Keep scoreRule #6. Keep scoreRule #6. Keep scoreRule #6. Keep score© 2008 Loyalty Builders LLC

Typical results for purchase Typical results for purchase probabilities and atprobabilities and at--riskriskprobabilities and atprobabilities and at riskrisk

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MM efforts drive the content of your IMo s d o o you◦ News releases, blogs, newslettersMM testing techniques work for IM◦ Test offersIM data gets fed into the MM machinery

How mathematical marketing and How mathematical marketing and inbound marketing work togetherinbound marketing work togetherinbound marketing work togetherinbound marketing work together

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Customer acquisition and existing Cus o a qu s o a d s gcustomer marketing both are becoming more scientificUsing the new tools and techniques yields greatly improved results

M t◦ More customers◦ Fewer defections◦ More revenueMore revenueIt is a new world – embrace it or be swept away by those who do

The world is changing rapidlyThe world is changing rapidlyThe world is changing rapidlyThe world is changing rapidly© 2008 Loyalty Builders LLC

New Rules of Mathematical Marketing garticleMathematical Marketing group on FacebookFacebookField Guide to Mathematical MarketingArticle on multivariate testingArticle on multivariate testingCrunch, the newsletter for mathematical marketingDiscuss your problems and successes with me, get the links and ebook◦ markk@loyaltybuilders com

ResourcesResources

markk@loyaltybuilders.com

ResourcesResources© 2008 Loyalty Builders LLC