The Tingley Advantage Blog

Measuring Your 2011 Performance

2012-01-26T19:40:05Z

The start of a new year is an excellent time to assess our prior year's performance, so that we can set the appropriate course for the year ahead. Success is built on a variety of factors; therefore, it makes sense to measure the business in a variety of ways (for one excellent tool, see my post on Balanced Scorecard).

A significant portion of our evaluation will be financial; however, looking other areas will provide context and insight into the reasons for our financial results, as well as opportunities for improvement. We will look at these factors overall and additionally may want to measure individual areas of the business, e.g. marketing, product lines, etc.

Financial: Take a look at the final numbers on the balance sheet. What were our revenues, profits, and/or financial growth? How did we fare against any targets we had set? (This is also an excellent opportunity to pull together any financial records that will be required for upcoming tax purposes.) Finally, look at the return on business investments for the prior year.
Customer: Did we grow our base? Were our customers satisfied and are they coming back? Where did we deliver to our customers, and where did you fail to deliver? This will uncover opportunities for the year ahead in addition to providing context for financial results.
Process: Did we improve efficiency or effectiveness, or are there areas where we have lost efficiency or effectiveness? Did we meet any goals we had set in terms of quality control, delivery times, or other process-based improvements? Have our processes kept pace with changes in the business (e.g. growth, new products, changes in strategy)
Innovation: Did we move the business forward in terms of new products or services? Did we meet any goals we had set around education or skills development? Have we kept pace with changes in the industry over the past year, or are their gaps that need to be addressed going forward?

To make the assessment as concrete as possible, consider creating a yardstick to measure success against. Measure business performance on a scale of 1 to 5, with 1 being "We did not achieve that goal" and 5 being "We exceeded that goal". This is a simple but objective way to determine how well we did at achieving our goals.

Ideally, we measure our 2011 performance against goals set at the beginning of the year; however, even if we did not have defined goals, we can use a similar yardstick to measure performance against anticipated results (although this is not as objective a measure, it is still a step in the right direction. Then, we can set goals based on our current position, for the year ahead.

In my next post, we'll look at how to set up a measurement focused year.

New Year's Resolutions for your Business

2012-01-05T15:16:14Z

Happy New Year from the Tingley Advantage!

Do you have any New Year's resolutions? What about for your business? Here are six resolutions to consider making for 2012:

Get to know your customers better.
Make the most of your business' social media strategy.
Implement a Balanced Scorecard to ensure every level of your organization supports your strategic goals.
Get a handle on your business processes, so you can make them better.
Find new ways to tell your company's success stories.
Measure, measure, measure!

Whatever your resolutions may be, wishing you and your business all the best for a successful 2012!

Measurement Basics - Testing and Control

2011-12-22T16:17:34Z

Regular readers of my blog will know that I am passionate about measurement as a critical component of managing and maximizing your marketing efforts. A solid measurement strategy ensures that you KNOW what works - rather than guessing. And a solid measurement strategy will generally incorporate the principles of testing and control.

Testing is a process whereby we create an objective for our campaign or initiative and then measure whether the objective is being reached based on the initiative's success against a control group. Testing enables us to confidently answer questions such as:

Is our initiative or program working? Is it worth the investment we are making in it?
Could it be working better than it is? Or could a different approach be more effective?
What specifically is driving its success or failure?

How do you answer these questions? By implementing a continuous process of defining a question, creating a test, measuring the results, learning from the results, and then refining your initiative (including a new test).

Let's look at a simple example:

A translation company is considering mailing a follow-up package to prospects who contact their firm for a quote. The goal of the package is to convert prospects into customers. The package will be somewhat costly and time-consuming to create and mail, and the firm wants to be sure their investment will pay off.

Question: Is our initiative or program working?

Test: A random sample of prospects are excluded from the next mailing. The conversion rate of this group will be compared to the conversion rate of the contacted group.

Measurement: The conversion rate of the contacted group is higher than that of the excluded group.

Learning: The return of the marketing investment is sufficient to justify its continuation.

Refined Initiative: The welcome package is mailed to all prospects.

Having completed this test, the translation firm should also refine their test variables with each mailing, so that they can continuously improve their initiative. Examples of tests to consider could include:

A lower cost package versus the current high-cost one
An e-mail versus a mailed package
The timing of the mailing (sooner vs. later)
One customer segment's response versus another's

Each test will either reveal a more effective (in terms of cost, effort, etc.) way of executing initiative, or will serve to objectively prove the current initiative's effectiveness.

Net Promoter

2011-12-02T01:39:02Z

Most of us intuitively know that customer satisfaction and loyalty are important. We know that a happy customer is more likely to buy from us again - or tell a friend about us - than an unhappy one. However, it's not always easy to measure and manage this concept in practice, and this is where business tools can help. One such tool I've recently re-discovered is the Net Promoter score.

The Net Promoter concept asks the question "How likely is it that you would recommend our company to a friend or colleague?", and breaks out customer responses (which are given on a scale of zero to ten, zero meaning they would not recommend you) into three groups:

Promoters (9 and 10) are those customers who are loyal to you and will recommend you to friends.
Passives (7 and 8) are those customers who are satisfied but neutral to your company - a competitor can easily scoop up these customers.
Detractors (0 - 6) are those customers who are unhappy with your organization and will say so - they can impact you through negative word-of-mouth.

Your Net Promoter score is simply the percentage of your customers who are Promoters, minus the percentage of your customers who are Detractors.

While customer satisfaction and loyalty have always been important, they are arguably more so now than ever before. Whereas in the past, a loyal (or angry) customer might discuss your product or service with a few colleagues, friends, or neighbours, now, with social media, that same customer might tweet or post about you to hundreds of people. The impact - for better or for worse - has the potential to be significant to your organization.

The strength of a concept such as the Net Promoter score is its simplicity - any employee can understand the concept of trying to please customers so that they will want to promote the company rather than be passive or detract from it. It's tangible and meaningful on the front line as well as in the management offices.

Of course, knowing your Net Promoter score is just the beginning - it's what you do with that knowledge that will ultimately increase your success. Knowing your score gives you a starting point to discover where you are at and what you need to do to move your customers towards becoming Promoters.

To learn more about Net Promoter, you can visit their website.

The Balanced Scorecard in Practice

2011-11-17T14:43:00Z

In the last post, we looked at what a Balanced Scorecard (BSC) is, who uses it, and why. In this post, we'll take a look at the implementation of a BSC. Although the specifics of an implementation will differ between a large corporation (which, for example, might need software to support its BSC initiative) and a small business (which might rely on a short documented list), the following high-level steps will be a part of any implementation:

Define the company's strategy - As always, if you are not clear on where you are trying to go, it's impossible to create a useful map to help you get there. Make sure you are clear on your strategy so you can break down how to achieve it.
Define objectives which support your company's strategy - Objectives should be measurable and should reflect the four areas of the Balanced Scorecard - Financial, Customer, Process, and Learning and Development.
Define your measures - Figure out in specific terms how you will know whether you've met your objectives.
Define and pursue your initiatives - Now that you know what you are trying to do and how success will be measured, define and pursue activities to drive those objectives.
Evaluate your success - Measure what you've achieved against your objectives and measurements, and refine the process based on what you learn.

One of the most powerful things about the Balanced Scorecard is that it can be cascaded from the very top on the organization right down to the front lines, ensuring that each and every company resource is aligned behind a clear and common set of objectives. Here is a simplified example demonstrating how objectives can be broken down and made relevant to every level of the organization:

In this example, we can see that, although there are some differences in the specifics of each level's goals, they are ultimately linked to one another and all serve to further the organization's strategic goals.

The Balanced Scorecard is a powerful management tool that can be scaled to benefit businesses of all sizes. It ensures you are making the most of your resources by aligning efforts to support your ultimate goals.

What is a Balanced Scorecard?

2011-11-08T20:12:34Z

The Balanced Scorecard is a management tool that translates a company's strategy into specific, actionable and measurable goals and activities. By cascading these goals and activities down through the organization, level by level to the individual employee, it ensures that each and every individual effort is driving the company's strategic goals forward.

The scorecard is called "balanced" because it defines goals in four different areas: financial, customer, process, and learning and development (including innovation and employee development). This ensures that financial and non-financial goals are balanced against each other, leading to stronger success for the company.

Any business can benefit from some version of a scorecard (the complexity of which will vary depending on the size and diversity of the organization). Bain reports that the Balanced Scorecard was one of the top ten management tools used in 2010.

What are the advantages of using a Balanced Scorecard?

Business activities are linked to the company's strategy; extraneous activities can be de-emphasized or eliminated.

Success is measured in a balanced way by identifying and providing equal emphasis on financial and non-financial drivers.

Each and every member of the organization understands how and why their contribution matters to the company.

Employees are rewarded for activities that really drive the company's success

In a future post, we will take a more detailed look at the implementation of a Balanced Scorecard.

The Importance of Metrics

2011-10-07T14:36:05Z

No matter how cutting-edge your business might be, business basics such as well-designed metrics will always be fundamental to your success. Lara Veltkamp of Watershed Marketing shares her thoughts in today's guest blog:

I recently had the opportunity to attend an all-day, multi-speaker conference in York Region called "Business Innovation for Changing Times." The event was geared toward small and micro businesses, highlighting Arlene Dickinson as keynote. Likely, she was the reason many of the 200+ folks attended. She was, most definitely, worth hearing. Earlier in the day, though, and long before her appearance, I sat in the audience, mind occasionally wandering (between speakers of course!) to this guest blog article, and what I might write to engage you - Katie's tribe.

The decision was made for me as speaker after speaker took the stage. While the common theme was innovation, not surprisingly the common support for each presentation was in the metrics.

For example, during his presentation, Ian Proudfoot (V.P. & Regional Publisher, York Region, for MetrolandMedia) had statistic after statistic in support of the company's marketshare, audience support, and rationale for the organization's recent name change from Metroland Publishing to MetrolandMedia.

Douglas Heintzman, Director of Strategy for IBM's Collaboration Solutions, presented a highly informative piece, "Lessons learned from an early adopter," where Collecting Metrics was highlighted in virtually every area of social business success he discussed.

Lisa Kember, Regional Development Director - Southern Ontario, for Constant Contact, spoke on the difference in customer engagement through Paid Media versus Owned Media versus Earned Media, and cited a number of metrics to monitor when differentiating between these levels.

As you know if you've been following Katie's blog for any length of time, metrics is not restricted to operations and process management; it's imperative for other areas of business, especially for every marketing campaign you initiate. The basics for any business, as I'm sure Katie would tell you, include:

Monitor your website and/or web page visitors by date, regional location, browser type, referring source and tied-in marketing initiatives (such as an advertised special offer or a specific blog article launch that point back to a specific web page). You'll see a trend in use, and you'll have a better idea of how and why people are visiting your site. Tools like Google Analytics - when set up properly and reviewed often - are very good for collecting and presenting the data you need, and it's a free tool.
Track engagement through your social media tools (Blog, Twitter, LinkedIn, Facebook, YouTube, etc.). You need only simple metrics to start - baseline and then trend: readers, followers, connections, profile views, likes, subscribers, etc. When you have a handle on these metrics, you can begin to go deeper on engagement. Ask Katie about her Tingley Solutions product for small businesses that will help you track what you need to track.
Calculate your average revenue per customer (total revenue $/total # clients), you'll know what each customer is worth to you, and if you measure further, you'll be able to identify how many prospects you need to gain one customer. This is something you easily can do by reviewing your revenue numbers and client list. Going deeper may require some support from your marketing and sales team, and your accounting software.

Without these numbers, your marketing can be a waste of time and money... because you just don't know for sure. However, if you want to grow your business, you need to know how and why people are engaging with you, and what they value from you -- so you can give them more of what they want and need.

And that's what being in business is all about, isn't it?

Lara Veltkamp delivers practical, achievable marketing strategies, planning and initiatives, most recently as principle of her own company, Watershed Marketing Group Inc. Lara founded Watershed in 1998 after a successful career leading marketing and sales strategies inside both large and privately-held companies. Under her leadership, Watershed continues to grow, with over 100 clients and 1,000 plus attendees at marketing and business workshops delivered to clients across Ontario.

Social Media ROI

2011-09-22T13:44:44Z

Determining the ROI of your social media efforts can feel like a challenge. Today's guest blogger, Andrew Jenkins of Volterra Consulting discusses how to tackle it.

Social Media ROI is not so hard to measure if you know what you are measuring. When the subject of social media comes up in conversation, so does the question of ROI. Often companies want to see a business case to justify incorporating social media, but one of the more snarky responses might be, "What is the business case for your phone or email?" I am not going to go there -- but I will offer a more constructive explanation instead.I think a business case can be made for social media and that ROI can be proven.

The key is to design it into your strategy from the outset. What I mean by that is to create a situation where you can determine the direct correlation between an activity within social media and a positive result regarding your company like increased website visits, customer inquiries, newsletter registrations, or online transactions. Whether it is a direct mail piece, a microsite, your website, a tweet, a Facebook post, or a blog post, you can distribute content or links that will generate actions with associated analytics. You can test different content or links with different channels to see which platforms or channels produce the best results and refer the most traffic. Google Analytics, Bit.ly, and Facebook Insights are just a few examples of tools that provide those analytics and insights necessary for you to determine ROI.To be fair, determining the ROI requires a certain level of understanding of social media and how content gets shared. Once you understand how social media works, you will feel more confident and comfortable about how to measure ROI.

Social media is meant to complement your existing marketing activities and objectives rather than operate independently. Assuming you properly measure the ROI of your current marketing efforts, it will not be a stretch for you to determine the ROI of your social media efforts.

Andrew Jenkins is principal and founder of Volterra Consulting, a management consultancy helping clients with strategy and strategic planning. Areas of focus include social media, mobile/wireless, e-business, and Internet technologies.

Personal URLs

2011-09-08T13:43:48Z

"The technologies available in the marketplace today are equipped to deliver highly targeted personalized services which can impact revenue and strengthen customer loyalty, without jeopardizing customers' privacy. Eighty-eight percent (88%) of Best-in-Class companies agree that they will recognize a Return on their Investment in personalization technologies." (Aberdeen Group)

Customers today are bombarded with marketing messages from different companies, in different media, every single day. It's increasingly difficult to ensure that your marketing message is not lost in the crowd. The Personal URL (PURL) is an excellent tool to help your company stand out.

PURLs represent the next step in a marketing world increasingly driven by personalization and customization. And, they make unique use of something that most customers love to see and hear - their names. Rather than a direct mail piece directing a customer to a generic website, PURLs provide a website tailored uniquely to them. The customer might type in a PURL something like this: www.yourcompanyname.com/katie.tingley. Once on their personalized page, they can see offers and content tailored and updated to their specific wants and needs.

Like any marketing tool, PURLs can only be as effective as the integrated campaign they are part of. A sample campaign might look like this:

A direct mail letter might ask customers to register on a website to receive exclusive offers.
Upon registration, the customer is sent an e-mail with their PURL to access their offers.
The customer visits their PURL, which is kept up-to-date with offers relevant to that customer's wants and needs.

While the offers will be key to the success of the campaign, the personalization of the URL on the direct mail piece will both entice the customer's initial interest, and reinforce their sense that you are addressing their unique wants and needs.

An added benefit to PURLs is the additional layer of tracking and measurement they provide. With PURLs, rather than just overall click-through numbers, you can determine exactly who didn't respond (visit the URL) at all, who visited their PURL but went no further, and who went on to make a purchase.

Customers expect things to be tailored to them and their unique needs. A Personal URL is a great way to demonstrate your commitment to treating your customers as unique individuals - right from the first click.

Special thanks to the PURL experts at www.oneimaginginc.com for their research contribution to this article.

Collecting the Right Data

2011-08-25T00:20:30Z

We've looked at the cost of bad data . But how do you know what data to collect?

Customer data enables you to understand your customers and connect with them in meaningful, mutually-beneficial ways. However, when it comes to data, "more" is not always "better". Asking for reams of data can be off-putting for customers, tricky and expensive to manage, and confusing to use. So, what data do you really need?

The answer will be different for every business. Ask yourself the following questions to help you determine what data you need to collect:

Does it help you contact your customers in a meaningful way? Many companies either need or want to contact their customers by mail, e-mail, or telephone. Which methods does your company use? Collect, in a consistent way, the data that supports your methods.
Do you have a place for option information? Not only are their privacy laws, such as PIPEDA to be considered when contacting customers, but your relationship with your customers can be weakened by disrespectful or excessive contact that they don't want. Give your customers an opportunity to tell you how to use their data, and ensure you have a means to track and use their preferences.
Have you met all your business, legal and ethical obligations? If you offer warranties, have you made it easy for your customers to provide you with the data you need to administer them? If you have a legal obligations to meet (e.g. age restrictions, medical information, etc.), have you made every effort to keep customer data complete and up-to-date?
Does it support your strategic goals? Data can be used both to support your goals, and to track your progress. If you are attempting to build sales in a certain geography, a certain amount of geographical data will be necessary to measure your success. If you plan on tailoring your messages based on age or gender, then collect this data (again, consistency will enable you to use it efficiently).
Does it fall into the "maybe someday" trap? Maybe someday we'll contact clients by e-mail ... maybe someday we'll do psychographic analysis ... It makes sense to be forward-thinking, but collecting any and everything because it might be useful someday is sure to overwhelm your customers and your business. Collect data you will use or have concrete plans to use. If you build a healthy relationship with your customers and use what you collect in a mutually-beneficial way, you can always ask for additional data in the future.
Is there data you can glean without the customer's input? Things like customer anniversary dates (when they first purchased your product or service) can be leveraged for relationship-building and is readily available to you - providing you are ready to capture it.

By thinking through your data requirements in advance, you can ensure that you are well-positioned to meet your business', and customers', needs.

The Cost of Bad Data

2011-08-04T14:12:00Z

All data (like all customers) is not created equal. While good quality data is crucial to the successful management of your business, bad data can have negative effects ranging from inefficiency to uselessness to detriment. What comprises good quality data? At the most elementary level, it needs to meet the following three criteria:

It should be complete.

It should be accurate.

It should be collected in a consistent manner.

When any of these quality factors are compromised, your business is at risk of having data that is inefficient to use, misleading, and/or unusable - and the impact of these risks can range in severity depending on what the data is used for.

Let's look at a hypothetical example of KidCo, a company which manufactures children's car seats. The company's customers register with KidCo using their addresses for the purpose of marketing, warranty administration, and in case of a safety recall.

If the addresses they collect are incomplete, inaccurate, on inconsistent, they run the risk of:

Inefficiencies such as: high returned mail rates on DM campaigns; manual research and additional data entry to complete addresses; manual corrections to inconsistencies in formatting in order to enable automation such as mail merges.
Misleading information such as: faulty geographically-based analysis of customer base; inability to de-dupe customer lists leading to duplicate information.
Unusable information such as: inability to confirm warranty coverage, resulting in lost customer goodwill; customers who are uncontactable.

Based on the above list, the impact on KidCo's customer relationships and reputation could be negative in the case of a marketing campaign or warranty administration. In the case of a safety recall? The inability to contact customers due to poor data quality could be downright disastrous.

Data is only as useful as its quality allows . Ensuring the data your business collects is complete, accurate, and consistent ensures that your business has the foundation it needs to make sound decisions.

Tackling the measurement challenge

2011-07-14T14:31:33Z

Measurement is a bit like exercise - we all know it's good for us, but it can be tough to find time to do it.

We know the importance of measurement to our businesses - it enables us to understand where we stand and where we are going in terms of our strategic goals. The challenge is that it requires a significant unfront investment of time and energy, while the pay-off tends to increase slowly over time, as you build your reservoir of data. So, how can we find the time, and the motivation, to start - and stick with - our measurement plan? Here are a few ideas:

Be clear about what you are measuring, and why: Your measurement plan should be driven by your business' strategic goals. If it is, the information you will get will be relevant and provide a clear pay-off to your business. If it is not, you will find yourself awash in data that you can't use - and regretting the waste of time and effort.
Stay focused: There are myriad pieces of data you can collect, even once you've focused in on your strategic goals. You can look at products, customers, and finances in so many different ways that it can be easy to get off-track, or bogged down in details that create a lot of work for a diminishing return in value. Instead, chose a few key metrics with a clear value or purpose to them, and focus on those. They payoff will motivate, and perhaps give direction to, more in depth investigation using different metrics. Or perhaps those "big 3" metrics (or whatever your magic number happens to be) will give you all the information you need.
Find extra time: Sometimes finding the time to measure is a matter of re-prioritizing. For example, take a look at your day's activities - is there anything you are doing that is less valuable than taking the time to measure your business' progress? If the answer is yes, you have an opportunity to re-prioritize your schedule so that less important activities, not measurement, are the ones allowed to fall to the back burner from time to time.
Start small: Voltaire said: "Don't let the perfect be the enemy of the good". So it is with your measurement plan. It may be ideal to track your sales in ten different ways, but if that's not realistic, start with three. You don't necessarily need to invest in a full-blown CRM system - you can create some great tracking tools with a spreadsheet tool such as Excel. If you've followed the advice to be clear about what you are measuring, and why, you can probably figure out the most useful first step to take. And with measurement - as with exercise - every step counts!

Telling Your Story with Charts and Graphs

2011-06-30T14:12:19Z

There are many challenges when measuring what's happening in your business, several of which we've discussed. You need to determine what to measure and how, not to mention finding the right data and measuring it consistently to get a good picture of what's happening in your business.

There is another challenge, one that often falls to the back burner but that is equally important to consider: how to communicate and display your results.

If a picture is worth a thousand words, so is an effective visual data display. Done well, it can allow you to both see and communicate, clearly and succinctly, the insights all your measurement work has provided. Done without care, it can cause an audience to misinterpret data or jump to erroneous conclusions. And while a client, colleague or executive is unlikely to be moved by pages of numbers, an effective graph or chart can tell an influential story.

There are a number of ways to display results visually; however, even the most creative ways have at their core the tried and true basics. In terms of data display, most needs are covered by four options, each of which is best used for specific objectives.

Pie Charts: These are effective when you are trying to show the proportion that one or more items represents out of a whole. For example, you may have five products in a category and would like to display what percentage of total sales each category represents. The pie would be divided into five pieces, one for each product, and the varying size of each piece would visually represent the percentage of sales for that product. When all the pieces are added up, they should always equal 1 (or 100% - in other words, the whole).

Line Graphs: Line graphs are particularly useful to understand trends. For example, if you show weekly sales over a period of months in a line graph, you can easily identify both the overall trend (up or down), as well as any peaks or valleys that you may wish to investigate further. By layering multiple lines on your graph, you can also compare trends

Bar Charts:.Bar charts are commonly used the make comparisons; for example between regions, product lines, or brands. Each category is assigned bars of a different color, creating a quick and easy comparative view.

Tables: Tables can be used to display multiple pieces of information in a consistent fashion. Perhaps the least visually appealing (because, in fact, they represent a way of organizing written data rather than truly making it visual), they should be used sparingly and should be limited when possible to three or four columns and rows. Any more than that can become confusing or overwhelming for the audience and fall into the trap of "too much information".

By paying attention to the way you display your data, whether it be for yourself, your clients, or any other audience that you need to communicate with, you can ensure that your measurement and metrics efforts deliver maximum impact and value.

Making the Most of Social Media

2011-06-16T13:37:18Z

You've designed your Facebook page, updated your LinkedIn profile, and are tweeting your every move. Now that you've entered the world of social media, you may be wondering ... what next?

The use of social media is growing and businesses know they need to be a part of it. But is it working? Is it benefiting your business? Social media may be new, but in many ways, it can and should be measured and managed like any other business activity. This way, it becomes a powerful tool you can add to your business tool belt, rather than taking on a life of its own.

Regardless of which social media tool you are using, there are five key steps that can be taken to ensure you are using it effectively:

Know Your Purpose: Or, as Steven Covey says, "begin with the end in mind". By defining your purpose upfront, you can prevent your social media activity from being pulled in all directions and make it easier to determine what activities to pursue, and what metrics to measure. There are many goals social media can support, including: generating sales, generating leads, generating brand awareness, proving your brand, creating buzz, or providing thought leadership. What do you want social media to do for you? Decide on your goals, focus on them, and measure them.

Define Activities That Support Your Goals: If your goal is sales, consider offering coupons to fans or using social media to drive potential customers to your online shopping site. If you are aiming to increase brand awareness, encourage fans and followers to share or re-tweet content by making it valuable or entertaining. Whatever activity you choose, be sure it supports your goals to maximize its value, and build in some measurement capability so you can track your success.

Define Your Metrics, and Measure Them: If you are going to manage your social media activity, you have to be able to measure it. There are many metrics that can be used to measure social media, including more traditional measures such as number of sales or leads, and social media-specific ones such as number of fans or re-tweets. Figure out what metrics will allow you to understand your progress towards your goals, and measure those. We'll look further at social media metrics and measurement in a future post.

Refine Your Activities Based On Results: Your measurement efforts are only effective if they guide your future activites. Based on the data you get from your metrics, determine which activities are working and which are not, and change or improve your activity based on that knowledge.

By combining new social media tools with tried-and-true business principles and measurement techniques, you can understand and maximize your social media success.

More Ways to Use Category-Shopped Segmentation

2011-06-02T13:47:16Z

In my last post, we looked at scoring and then segmenting customers based on the categories they shop. Not only can this information be used to gain insight into your customers' value to your business, but it can also be used to identify opportunities to grow your business by targeting your customers with products or services that complement what they have already bought.

To do this, group the categories you've identified into complementary product or service grouping. For example, an electronics retailer might group the category "PC" with "printers" and "wireless PC accessories". An interior design firm might group the service category "design consultation" with "personal shopping" and "re-design project management".

Having created these complementary groupings, you can begin to leverage the information in several ways, including:

Increase the value of the customer: For example, if a customer has purchased a PC and a printer, they could be targeted with an offer for PC accessories; if customers tend to buy design consultations but not other services, they could be offered a discount on other services with the purchase of their consultation. This enables you to maximize the value of high-value customers, or increase the value of mid- to low-value customers.

Increase product sales : If the electronics retailer wants to boost accessory sales because it is a high-value category, they could look at all customers who have purchased a PC or printer (or both) and target them with an accessory offer. The design firm could boost personal shopping sales by targeting all customers who have purchased a consultation.

Follow the data : Sometimes the data might provide an unexpected insight. Perhaps a large number of printer purchasers do not purchase the complementary products, but do also purchase cell phones. What is the correlation - why do these two unrelated group "complement" one another? Perhaps these are the two categories in which you are the most price-competitive or you carry the most cutting-edge products, and that is what the customers buying them are focused on. By remaining alert and open to the data leading you down an unexpected path, you can uncover valuable targeting information that otherwise may have remained hidden.

Looking at your product categories in terms of complementary groupings enables you to gain insight and maximize your sales success.