Best Practices for In-Store Data Collection: Balancing Efficiency, Privacy, and Data Retention

June 27, 2024 | Posted by Elisa Berger, Ph.D.

Effective customer communication is crucial for retention and growth, and it begins with the collection of contact information at the time of purchase. Online purchases are more conducive to gathering customer names, mailing and email addresses because this information is necessary for shipment and confirmations.  However, for those with brick-and-mortar stores, collecting customer contact information at POS is more of a challenge as it is not necessary to complete the transaction. It’s essential to show the value in providing this data while ensuring data privacy and complying with evolving data retention regulations. The following provides best practices and key considerations for in-store data collection.

What to collect at POS

Ideally, marketers would like to collect the first and last name, land address, email address, mobile and opt-in preferences.  That is likely too much to collect at one time.  It is recommended to complete the customer profile by collecting missing elements over multiple visits to respect time and reduce the perception of privacy invasion. 

Asking for first/last name and email address is a good place to start for several reasons:

  1. You can instantly add the buyer to your email program, if they agree.
  2. For a relatively small price, email reverse append processing can provide name and land address needed for direct mail, without requiring further input.  Marketers will generally mail customers unless they specifically contact them to be removed from the mailing list.
  3. Email addresses facilitate other types of digital ad serving such as via Facebook and Instagram.

Next, try to collect the land address which is needed for marketing via direct mail and is very important for creating a customer profile. If the customer will not provide a given element, at a minimum, collect the name and ZIP code to start.  This information, coupled with the store of purchase, can be used to find the full land address using 3rd party data providers who can hone in on those who live within driving distance. Caveat: 3rd party address append is less effective in tourist locations where customers travel long distances. The more data points that are collected at POS, the greater the likelihood of finding a correct match to these data repositories which will allow the building of a robust marketing database. 

Other information that can be useful includes demographics, such as Month/Day of birth for birthday programs.  Some cohorts might be better to infer than request, such as gender.  If products purchased are more likely associated with one gender vs. another, skus can be used to accomplish the desired goal.

Demonstrate Value and Obtain Consent

Customers will be more likely to “share” if they perceive there is value in it.  Clearly explain why you are collecting customer information and how it will be used.  Value can come in multiple forms such as exclusivity, with early access to new products, sales, special events and more.  Customers are likely to give their contact details to become part of loyalty programs where points are earned towards rewards.  Be sure to obtain verbal consent to enter them into marketing programs that require an OK to communicate such as email and SMS (text).

The Process of Data Capture at POS

  • Engage the Customer: Explain the benefits of providing contact information
  • Collect Key Data: Start with email address and add to the profile over time
  • Create/Retrieve Customer Profile:  Use the provided contact information to create a new profile or retrieve an existing one.
  • Link Purchases to Buyer: Use the POS system to link the purchase details (items bought, total amount, date, and time) to the customer’s profile.
  • Create a Marketing Database: All transaction data from the POS system, including linked customer information, can be ingested into a centralized data repository where marketing campaigns can be created using buyer data that has gone through hygiene and data aggregation processing. 
  • Derive New Cohorts for Segmentation/Analysis: Elements (such as RFM, recency of last purchase, number of purchases, and spend by product) can be derived from purchase.
  • Market/Measure/Adjust: Develop, execute and evaluate marketing campaigns that will resonate with your buyers and encourage the next purchase.
  • Database Updates: Regularly update the marketing database with the latest purchase activity to ensure customer profiles are current and accurate.

Collection Methods and Accuracy

Data is usually collected by the sales associate during the checkout process. While common, this method can be fraught with spelling errors and compromise privacy as everyone on line listens to the conversation. Sales representatives may bypass data collection if the store is busy or they are not held accountable for capturing it.  They may even enter the store’s email and land address just to complete the transaction.  If this occurs, you will need to suppress those addresses from direct mail and email. 

Tips:

  • Add data capture to performance reviews.  Train staff on how to accurately collect data and why it is so important.  Track this metric by store and employee and reward good performance.
  • Reduce errors by having customers enter their information directly using tablets or kiosks.
  • Implement address verification systems to ensure the accuracy of the data collected. This can involve real-time validation tools that correct any errors on the spot.
  • Enable customer look up at POS using one key piece of data to bring up the full profile so that you do not have to ask for all information each time they purchase.

Measurement and Variability in Data Capture

It is rare to be able to tie a customer profile to all retail purchases.  Understanding the capture rate by store is important.  This metric is expressed as a percentage and can be computed by dividing the number of purchases with contact information by the total POS transactions for a given store.   Analyses based upon retail sales with <100% capture rate require extra consideration, as results may be understated.  Analysts can apply an adjustment factor to estimate performance at full capture.  Caveat: this is not a perfect science as certain transactions are more likely to be captured than others.  Capture rates can vary by payment type, product, price point, store location and more. 

  • Payment Type: Customers using credit/debit cards are more likely to provide contact information for security and verification purchases than those paying cash. 
  • Price Point: Customers are more willing to provide contact information for high-value purchases, as they often want digital receipts and warranty information.
  • Returns: Most stores require contact information to process a return. This helps to identify chronic returners and potential fraud situations.
  • Brand and Product Line: Luxury brands, furniture, jewelry and electronics achieve higher data capture rates compared to everyday consumables.
  • Store Activity Level: Busy store associates with long lines are less likely to be concerned with collecting customer profile information.  Store activity varies by location, urban vs. suburban, as well as seasonally, peak vs. nonpeak shopping periods.  Store manager commitment to the process is also a factor.

Privacy and Data Retention

When collecting personally identifiable information (PII), familiarize yourself with the evolving rules and regulations, like GDPR (General Data Protection Regulation) and CCPA (the California Consumer Privacy Act), which are required for data collection, storage and consent.  Individual states have their own rules. What is acceptable in one state may not be ok in another.   Data privacy has become so important that many companies have a dedicated team to ensure compliance.

Create a privacy policy and then live by it.  Clearly state the purpose for data collection and how it will be used. Use the collected data strictly for the purposes stated at the time of collection. This builds trust and adheres to privacy principles.  Provide a method for opting out of various contact methods such as direct mail, email and text messaging. Date and post the policy on your website and in stores. Update to reflect changes.

  • Data Minimization: Collect only the information that you need and avoid “nice to have”.  The more data that you collect, the more risk you assume as you are responsible for keeping it safe from hackers and scammers.
  • Data Handling & Retention:  Determine how long customer data will be retained and ensure data is deleted after this period.  Incorporate encryption of collected data to protect against unauthorized access and data breaches.  Implement role-based access control to limit customer data to only those employees who need it for legitimate business purposes.
  • Certifications & Audits: It is recommended that all who handled PII data obtain official certifications such as ISO, SOC, HIPPA and PCI (where applicable).  This will require regular audits of your data retention practices, ensuring compliance and the identification of areas for improvement.  3rd party penetration testing is also recommended to ensure your data storage is not easily compromised.
  • Customer Rights: Provide customers with the ability to access their data and request its deletion. This can be facilitated through a self-service portal or by contacting customer service. Allow customers to update or correct their address information. Keeping data accurate and current is crucial for both marketing effectiveness and compliance.

The Role of Customer data

Capturing customer contact information facilitates sophisticated marketing programs that can drive incremental revenue.  It is also critical for the evaluation of these strategies to understand what is working and to what degree.  Train and incentivize store associates to Explain, Ask and Enter.  By following best practices, you can balance the need for valuable customer information with the responsibility of protecting it to maintain customer trust and loyalty.

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What is a New Customer? Are we talking about the same thing?

May 11, 2021 | Posted by Elisa Berger, Ph.D.

The number of new customers is a popular KPI request of a database provider. Believe it or not, there is more than one way to answer the question and key factors that can impact measurement.

1. Determining Original Purchase

The most common definition of a new buyer is the date of first purchase ever, with a given company. This is usually determined by reviewing all purchases and isolating the first one. If you haven’t provided all purchase history going back to brand inception, your first purchase date will be limited to the time period captured. If you or your database provider performs archiving, it is important to “freeze” the first purchase date. Maintaining the first 5 purchases is even better as it allows you to analyze a path of purchase trail for 1st time buyers.

2. The Impact of Data Aggregation

Customers can be analyzed at different levels of aggregation: email level, customer level, household level, address level or site. If you are determining new buyers by counting the number of email addresses in your ESP, you may be overstating the count. One customer, as defined by first & last name and address, can be associated with multiple email addresses. Aggregation is key to truly understanding the difference between additional or new contact information vs. a new relationship.

If you are defining a customer at the household level, the first purchase is based upon last name and address. The first purchase can change over time with the ebb and flow of people moving in and out of a household for various reasons. When NCOA and other address changes are applied to the database, its composition changes. A buyer may leave a household which could result in any of the following changes: 1) the creation of a new buyer record which only looks at that person’s history 2) the aggregation of that buyer into a pre-existing household which adjusts the overall first purchase date given his/her history and 3) a change in the original purchase date for the household that he/she left based upon the remaining orders. As a result, you may see changes in historical acquisition counts (for prior years) based upon the latest householding of the customer file.

3. The Impact on Prospecting

Many marketers are members of a co-operative database (i.e. Epsilon, Path2Response) and use these sources for direct mail prospecting. Some of the co-ops send prospect names net of the entire brand’s client file. Others send names net of a smaller segment of the buyer file, i.e. those who purchased in the last 3 years. In evaluating acquisition performance, reporting may show that a given list delivered x number of new buyers when in reality some are re-activated older buyers who were not suppressed from the rental. There are pros and cons to either approach. An argument can be made that re-activation of a former customer is acceptable in that “a sale is a sale”. However, it does cost less to run a re-activation model than to pay for the name as a prospect.

4. New to Year

There are other ways to talk about acquisition: some consider a buyer to be “new” for the entire fiscal or calendar year of acquisition. This is helpful for understanding not just the number of new buyers acquired but what can be expected from this group in a given year with regards to repeat buying activity. Note: This is different than LTV because not all will have an equal number of months to repurchases (i.e. Dec new buyers will have less than 30 days on file prior to the end of the calendar year). Each metric has its own purpose. Analyzing new buyers for the calendar year will allow a marketer to understand what proportion of their business is coming from new buyers and their repeat activity in that time. This can provide a health assessment of your file. If 60%+ of your business is coming from first time buyers, you are hopefully a new brand else you may be in replacement mode. This may signal a need to focus on customer retention to ensure you are cultivating your existing buyer relationships.

5. New to the Season

The apparel industry is interested in knowing who is buying their Fall and Spring product lines. While they track new customers to the brand, they may also want to understand the number of customers who are buying for the first time in a given season as this is another measure of “stickiness” or increased customer relationship/value. There may be very good customers who shop in one season exclusively vs. those who shop in more than one. Both are important to measure.

6. New to the Corporation

For companies with multiple brands, you can measure new customers for a given brand and/or new buyers across all brands. Marketers may cross promote one sister company to another to expand total customer value. This is a cost effective means of brand level new customer acquisition. However, it does not change the total number of customer relationships for the corporate entity as a whole. Both metrics can be viewed as measures of success. The lifetime value of each new customer acquired for a given brand can have a larger impact when total spend is tallied across all brands.

So how many new customers do I have? It seems like a simple question. A short discussion is warranted to ensure all are in agreement as to what is to be measured and how.

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Business Lessons Learned 1 Year into the Pandemic

March 24, 2021 | Posted by Elisa Berger, Ph.D.

It’s been one year since the world shut down and a lot has happened. I started writing this in the early days of closure and realized it would be good to share for those who may not have experienced the same things.

1. The best laid plans… No matter how much you plan, you can’t consider every possible outcome and combined impact that can take place when everything goes wrong at once. Even the most hard working and successful companies saw business declines for at least some part of 2020. In March-April ’20, it seemed like we were receiving daily notifications that mailings were canceled. Our forecasting quickly went to “wait and see” status. Most Type A’s attach their business success to their hard work and see it as a personal failure when things don’t go right. That’s how I felt until I spoke with my counterpart at another company. I realized I wasn’t alone and there were other good businesses who were being impacted by the ripple effect that takes place when your clients are struggling.

2. Have back-ups for the back-ups Many have a Plan B. How many have a Plan C and even a Plan D? For CCC, it was NCOA. Our primary provider had experienced an outage soon after the “Stay at Home” order went into effect. This had nothing to do with the pandemic but it lasted one week during a chaotic time. CCC always had a back-up company for NCOA but that vendor had changed their return layout and our clients had only been signing one Postal Acknowledgement Form. This meant emergency programming to be able to use our fall back vendor. We learned a valuable lesson. As a result, we established an additional option for NCOA and now have clients sign multiple forms annually. We have routine Disaster Recovery testing where we send work to each provider to ensure that all is working as expected and nothing has changed.

3. Production diversification When possible, spread your supply chain across multiple locations and providers. We have had clients whose businesses really peaked during the pandemic due to the increased demand for their product category. These companies had a different kind of challenge, mostly in the form of inventory shortages due to closures at one location or another. Where possible, spread your production across multiple locations. It might cost a little more but this may be a small sacrifice for the greater good. It is also good to have all of the parts or pieces of a given item sourced from the same place. You might be able to make “the hoodie” locally but you get your zippers from China and can’t complete the product.

4. Proactively check in with your vendors I was really impressed when one of our clients reached out to touch base with us to see how we were doing during the closures, etc. This made quite an impression. It pays to take a minute away from your own challenges to make sure that your providers will be able to continue to service you. Give them an update on how things are going at your company and find out how they are doing. If one of your suppliers is in trouble, you need to know sooner than later and have a contingency plan.

5. Stay on top of accounts receivable March ‘20 billing was great. We exceeded our forecast. Billing was one thing. Collecting was a challenge. It wasn’t long into the pandemic that we started to see accounts receivable (AR) starting to tick up. We received requests and notices that some needed to temporarily increase their days to pay beyond contracted terms. As a vendor, flexibility is key. My advice to those who run into financial challenges: take the high road. We really appreciated all who reached out and provided a payment plan vs. those who went silent and had to be chased. It really helped us to plan for our own expense management.

6. Explore government relief options You may not needed it at the time when it first becomes available but in a sustained uncertain environment, it is best to apply for the options you are eligible for… just in case. It also takes time for new offerings to be made available and for applications to be approved. If you aren’t really sure if you are going to need it, you can always give it back. In the case of the Paycheck Protection Program, many companies wanted it but were denied in the first round of funding. Many banks weren’t prepared for the onslaught of applications. Banks only considered applications for existing customers. Which brings up the thought that establishing a relationship with more than one bank could be a good way to improve the odds if ever in this position again. Bottom line, act early in preparation for what might come and hope that it doesn’t.

7. Realize cost savings when remote What can be cut if all are working from home? Things like paper shredding/recycling, cleaning services and heating/cooling temperature can be adjusted accordingly. Companies review their sales forecasts regularly. They may even look for ways to reduce cost. But don’t forget to revisit hidden expense line items in the budget: If revenue is down, you won’t likely be hiring as planned, travel and conference fees will be less, hard costs, such as commissions and outsource services associated with unrecognized revenue can be reduced.

8. Strive for a paperless office Do you know people who print their emails? I personally don’t have one paper folder or a need for an office filing cabinet. However, our business processes weren’t as digital as they could be. We were sending invoices by email but many clients were still paying by check. No one was in the building to collect the mail. We didn’t even have a mail chute for the building or a formal mailbox. Prior to COVID-19, we had an actual mail delivery person who would walk in and physically hand the mail to our office manager. We were using DocuSign for contracts but our human resource and security forms all had to be printed, signed and scanned. Our employee HR folders were all paper based. All functions are better served paperless so that you can operate from any location.

9. Embrace employee location diversity There are many benefits to having remote employees, especially those who live in other states. When there is an emergency situation in one area (i.e. Texas power outages), you have people in other locations who can help bridge the gap. It also expands your recruitment pool. CCC’s philosophy in the last decade has been to hire where the talent is. 30% of our work force is remote with employees in 10 states. Our outsourced HR department makes it easier to hire across the U.S., as every state has its own rules, forms and taxes. We routinely test our work from home plan which made for a seamless transition when we closed the building early in the timeline. Some companies have taken it to the next level by letting their leases lapse and giving up their offices. Great way to save money and you can always supplement with a Regus type “rent an office for the day” as needed. Something to think about now that you have proven you can do it.

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Email Database Check List

March 16, 2021 | Posted by Elisa Berger, Ph.D.

Looking for an easy way to make more money from your existing buyer file?  Expand your marketable universe of email addresses.  Now is the time to make sure you haven’t missed an opportunity to communicate through this budget friendly and highly effective mode of marketing.

  1. Are all of your marketable email addresses making their way to your ESP?  There are several ways to be sure.  Compare the number of new buyers with email targetable addresses added to your marketing database with your growth in email addresses in your ESP for the same time period.  With the exception of aggregation differences, they should be close.  In addition, you can compare your email subscriber form submissions with the number of Welcome Emails sent for a given time period to make sure they match.

  2. Grow your email file quickly through Email Append: Do you capture the email addresses of all of your buyers?  If you are a retailer, chances are you do not.  Email append is a quick way to add email address when you have name and land address.  A free match rate report can tell you how many addresses a given vendor can find.  It is common to find 40-60% of the email addresses for a given file depending upon the source of names and the condition of your file. The process will typically include a permission pass email where your buyers will be given an opportunity to Opt-out if they do not wish to receive communication through this method. If you have a limited budget, you can target your best buyers by using a service that only appends to an optimized group of your customers.  The co-operative databases offer email append with optimization to identify those in market and most likely to purchase.  It’s ok to use more than one vendor!  Run a first pass append with one vendor and send the non-matches to a 2nd provider in order to acquire as many as possible.
     
  3. Maybe they changed their mind?  A lot happened in 2020.  Those who have previously not checked your Opt-in box on your order page may have changed their mind. Send a periodic check in to be sure you have their email preference accurately reflected.  Are you sure you don’t want to receive our emails?  These emails should contain a compelling reason and an incentive for sign-up (i.e. discount code or other special offer).

  4. It’s not all or nothing.  Review your Opt-in or Opt-out box placement on your website and the associated wording.  Do you have a global Opt-in?  Try offering the ability to Opt-in to various types of communications, such as special offers and “first to know” communications.

  5. Ensure communication to the Opt-outs.  If a customer doesn’t want to receive email, that doesn’t mean you can’t include them in your direct mail program.  Some companies are actively including these Opt-out segments into their catalog/direct mail program to ensure they receive some type of communication.  Segment your RFM to include a Yes/No flag indicating those who are in the email program vs. those who are not.  Measure the incremental lift over not mailing for these segments who are not in the email program.  The impact of mail on these segments can often be larger because they are not being “spoken to” any other way.

  6. Found email addresses you haven’t been marketing to? From time to time, marketers will find a glitch in their systems and identify a group that has been erroneously excluded from email communication for one reason or another (see #1 above).  If this is you, consider the following:

    • Many ESPs monitor the size of the email database.  Alarms go off if your database increases beyond a certain threshold in a short period of time.  There are ESPs that will not allow companies to add a large volume of new email addresses all at once for fear of how they were acquired, etc. Check with your provider to see if this will be an issue. If it is, add the newly found email addresses into your database a little at a time instead of in one big batch.  In addition, research other providers who will allow the deployment to new audiences.  This will allow you to simultaneously deploy to the full list of new additions with a second provider as you are building your file with your current vendor.  Realize the incremental revenue, sooner than later, while building your existing database with your current ESP.

    • Avoid a spike in your undeliverable rate with proactive email hygiene. Has too much time passed since when you first collected an email address and when you ultimately marketed to it? Email validation and correction can help improve ROI by removing invalid address, test to see if the address can accept mail, correct typos, misspellings and syntax errors.  Email addresses change.  ECOA (Email Change of Address) can help find new addresses for your existing buyers.  Periodically run ECOA on your undeliverables to see if better email address can be found.

    • For those who have added a larger quantity of addresses, it also may be prudent to check for spam traps and other damaging email addresses that can ruin your email reputation. 

This is not a onetime initiative.  Make this checklist part of the regular assessment of the health of your email marketing program.  Vary cadence of review based upon your acquisition growth speed.  If you are growing at a fast pace, re-assess more frequently (i.e. quarterly).  If you grow at a slower pace, wait until you have added critical mass to avoid minimum charges on the hygiene and append services.

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ACMA CCPA Panelist Tom Berger: Recap on Key Service Bureau Considerations

June 19, 2020 | Posted by Tom Berger

I was honored to participate in the recent CCPA panel discussion hosted by the ACMA. I provided my perspective on preparedness from the service bureau world. For those of you who could not attend, below is a recap of key considerations for retailers who work with service bureaus.

  1. In order to be CCPA compliant, a marketer DOES need to send these requests to their service bureau, as well as co-ops.
  2. Send your requests securely (i.e. SFTP), not via email.
  3. Clearly label the type of request so that Do Not Sells are still included in the marketer’s own campaigns.
  4. Delivery of CCPA requests should be timed to the cadence of services provided by the vendor (i.e. mailings vs. database updates).
  5. Right to Know requests are best cross checked against the service bureau, but answered through the marketer’s own internal source systems.  
  6. Requests to delete data should include the (not so obvious) places where service bureaus store data: Mail files and Matchback response files as well as various forms of Masterfile’s created for mailing purposes or more advanced marketing databases.  Note: A service bureau does not have to delete requested client data from back-up systems as they will age out over time, unless the data is restored/accessed.

Your service bureau should have an established, documented procedure for handling these requests.  Maintain a copy of the latest policy for each vendor that you work with. In addition, if this topic is important to you, please consider joining the ACMA. CCC joined in 2019 and we have become very active members. The ACMA seeks to protect a variety of interests of concern to catalog and online merchants, as well as their suppliers. Click here to learn more.

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Prepare Your Business Against Privacy, Postal & Tax Attacks

July 26, 2019 | Posted by Elisa Berger, Ph.D.

CCC is an active America Catalog Marketers Association member.  If you are concerned about postage regulations, programming for 12K+ tax rates under post Wayfair ruling laws and preparing your business to thrive while complying to new privacy regulations, I have a free luncheon for you!

 

The complimentary luncheon will be held on the starting date of the NEMOA conference on Wednesday, Sept. 11, from 12:30-3:30 p.m. at the Radisson Blu Aqua Hotel in Chicago, IL.  It  features updates from President & Executive Director Hamilton Davison and Vogel Group CEO Alex Vogel.  This is a great forum to ask your questions to key experts in this area.  If you aren’t even sure what to ask, just listen to what other omni-channel retailers are concerned about.  

Click here for more information

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Improve Customer Retention by Targeting Segments in Motion

March 15, 2019 | Posted by Elisa Berger, Ph.D.

The ever popular and highly predictive “RFM” metric provides a static point in time view of your customers by their purchase total and number of months since last purchase to date.  In general, more recent customers with higher dollars and frequency are more responsive than those who have not purchased in a while and spent less.  Knowing this is great for routine, broad communications, but the key to customer retention and cultivation requires the incorporation of additional, more tailored messages for groups who are in motion.

The Annual Revenue Equation

Customer retention is a critical component in the annual revenue equation which is derived from the total number of anticipated purchases and average spend from three main groups:

Existing Active Buyers + Inactive Customer Re-activation + New Buyers

The proportion of annual revenue coming from first time buyers vs. existing customers can vary greatly by brand and reflect heavily on the sustainability of the business model.   In a 50/50 scenario, half of annual revenue is generated from prospects and the other half is determined by existing customer activity in the current year.  Some brands are in constant replacement mode with more than 60%-70% of their annual revenue generated by first time buyers.  This is to be expected in a start-up scenario but in general, this is a less profitable business model for an established company because it costs more to acquire a new customer than it does to cultivate an existing buyer.  Conversely, brands that generate 80%-90% of annual revenue from their existing customer base, may be missing an opportunity for new customer growth.  Use your marketing database to understand where your brand falls on the spectrum.

Finding Customers in Motion

Most marketing databases provide a current snapshot for a given customer.  You may maintain detailed transaction history, but all of the summarized selectable fields are likely aggregated based upon the current update’s view.  For example, a customer has only one RFM segment based upon their purchase history to date.  In order to find customers in motion, you will first need to be able to select by key pre-aggregated fields as they looked at various points in time.  What time period variances should be examined?  The answer is data point specific and a balance between “the sooner the better so we can re-act” vs. “it takes time to measure a change”.   A good place to start is with the comparison of “This Month vs. Last Month” and “This Year vs. Last Year” on key data points.  Personas are more conducive to measuring movement over a longer period of time.  For example, a customer was in the top cluster/persona last year but this year they have migrated downward to a lower status.   While finding those who became first time buyers in the current month is something you will want to respond to more quickly.   Determine what you are willing to respond to and build fields around that.

 Top Segments for Targeted Messaging

Find groups that represent a significant population where you can develop a clear strategy.  Below are 5  segments to get you started:

  1. First time buyers are those who were acquired since the last database update.  Depending upon how quickly you are acquiring customers, you may need to look at a monthly acquisition group, even if you update more frequently.  First time buyers should be acknowledged and introduced to the brand.  The goal is to convert new cutomers to 2x buyers quickly.  The majority of customer value is often observed within the first 6 months of the relationship.  Timing is everything. 
  2. Re-activated buyers are those who made a purchase in the current month after a period of greater than 1 year of dormancy.  These customers are re-engaged and the goal is to keep them shopping.  Welcome them back to the brand and incent them to buy again.
  3. VIPs are your best customers.  They are not defined by their change in motion, but instead by their consistent activity that warrants attention to maintain a given level.  The definition of your best customer is a business decision.  When in doubt, take your top spenders that represent the 80/20 rule – those 20% of customers who represent 80% of revenue.  Alternatively, select those who have purchased 4x+ in the last two years.
  4. Newly at Risk customers are those who have just turned the corner in the definition of active to inactive.  Most often, this group can be defined as customers with 13 months since last purchase.  It is important to target them sooner than later for re-activation because the likelihood that they will make a purchase decreases as the recency of their last purchase increases.  The goal for this group is to “save before you lose them” with more aggressive incentives to purchase again.
  5. Upward Risers are customers who were in lower customer segments last year but have migrated to a higher customer value.  These newly created Top Customers need to be acknowledged for their increased loyalty and dedication to the brand.

Measure the Impact

The impact of targeted strategies can be easily quantified.  In its simplest form, purchase activity in response to a single email or wave of emails can indicate success.  Longer term impact measures can include increases in the overall customer rebuy rate of various targeted segments.  It costs less to generate a purchase from an existing customer than it does to acquire a new one.  A small increase in customer retention can reduce the burden on new customer acquisition to carry the annual revenue growth goal.

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Florida Court Issues Opinion on ‘Time’ vs ‘Proof’ of Death

August 11, 2014 | Posted by Tom Berger

Please see below for an article recapping the Florida First District Court of appeals’ August 5th 2014 opinion in regard to Thrivent Financial for Lutherans v. State of Florida, Department of Financial Services (DFS).  In short, the court disagreed with … Continue reading →

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Guidance on Proposed DMF Certification Guidelines

March 5, 2014 | Posted by Tom Berger

As many are now aware, the administration recently passed legislation that will delay access to current death data on the Social Security Administration’s Death Master File (SSA DMF) for three years.  This legislation provides for a certification process that will … Continue reading →

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Are Standardized Death-Matching Guidelines on the Horizon for Insurers?

October 28, 2013 | Posted by Tom Berger

As many in the insurance industry now know, New York Life Insurance Co. (NY Life) has recently agreed to a $15 million dollar settlement to close its unclaimed property audits.  While NY Life has been considered by many to be … Continue reading →

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