By Mark Fulgoni, Principal Consultant at Red Olive.
Repeat custom is the lifeblood of any successful business. Attracting the same audience several times over reduces your marketing spend and helps you develop new products. Red Olive works with a broad range of clients to spot trends in their customers’ behaviour, so they can appeal to them directly.
It all starts with a clear, methodical look at what data the company already holds.
Most businesses don’t realise how much they know about their customers. Anyone with a website has the ability to analyse their audience using tools such as Google Analytics. If there is a digital aspect to what they are doing, like selling online, they can use the result to keep customers loyal by exploiting any patterns they detect.
Working with patterns
The important thing is to understand not only what your customer is buying, but why. When you see how this differs from what those who don’t spend are doing, you know where you need to concentrate your efforts.
Perhaps you’ll discover that your most loyal customers look at certain parts of your site, while those who spend little don’t, so you need to find a way to move them to the more profitable areas. Or maybe you need to increase your site’s stickiness because you can see that the big spenders are also those who spend the most time with you.
As soon as you have valid, verifiable data, you can work towards making decisions based on analysis, not just assumption.
Before we had analytics, businesses would try something on a whim and, if it got favourable results, carry on without knowing whether a small tweak could magnify the effect. They wouldn’t even have known whether the change was merely coincidental, and likely to fall away.
It is for this reason that we caution against buying in data. The problem you have got with retail data sets is that they are not attributable to individual users. What you really need to be able to do is track somebody across multiple interactions and connect them together.
Red Olive can use this kind of real data to derive meaningful customer segments that can be acted upon. Some organisations still impose segments on their customers, based on how they perceive the market to be structured or groups of customers that they imagine without the facts to back them up.
Instead, Red Olive can use cutting-edge cloud platforms such as Google Big Query to develop models in R, Python or a commercial modelling tool such as SPSS. The resulting models help identify distinct groups of customers who are behaving in different ways. Red Olive can then help a client decide which different groups to target as areas for growth, how to behave towards a specific group, and whether there are some that might receive less attention.
Red Olive worked with one of its clients, the Telegraph Media Group, to investigate and develop a set of digital customer segments with the aim of growing both its registered subscriber list and the level of engagement of those subscribers.
A correlation had been established between the engagement of a reader with its site and the likelihood of them becoming a paying customer. A strategic business decision was made to move from a model of capping the number of articles visible for free, to a model where certain content is only visible to paying subscribers.
The key questions became: what would happen if free access to certain online content was cut off and how could site visitors continue to be engaged and converted to paying customers?
The data-derived segments helped the client to develop different pathways to guide different groups along: to meet each individual where they were, to develop communications and incentives appropriate for those groups of individuals, and even to provide different micro-products designed for the specific needs of that group.
The strategy has been proved a success, with increased retention rates and rapidly growing numbers of registered subscribers thanks in part to clever use of analytics.
Analysis for all
Organisations of all sizes can call on the plug-in expertise of the data specialists at Red Olive to analyse their customers and make these kinds of decisions.
Skilled in retail analysis, and with experience gained through years of working with a diverse set of clients, we have the knowhow required to uncover actionable results that quickly deliver returns.