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Database Marketing in Paid Search

While enterprise-level retailers are accustomed to mining their customer file in order to invest their media budget wisely, we often find mid-market and smaller eCommerce retailers are either underutilizing their marketing database, or completely neglecting it. In many cases, these retailers do not even have a proper data warehouse and may instead only have an exportable customer file from their eCommerce platform. Regardless, each of these data sources hold a tremendous amount of value when utilized correctly.

We offer both ad hoc and recurring database marketing projects aimed at helping executive leadership and marketing managers better understand the behavior of their customers, and how they can act upon that knowledge to become more profitable. Not only do the insights gained from these projects help leadership determine how they should invest in channels such as paid search, but they often also inform their approach to merchandising, marketing messaging and strategy, and the overarching vision for growing the business.

Some of our most popular projects include:

RFM Scoring and Analysis – Customers are isolated into RFM quintiles, enabling the retailer to measure the performance of their most valuable customers independently of their worst performing customers. The deliverable includes a scored customer file, allowing the retailer to take immediate action on these segments in email, direct mail, and paid online campaigns.

Customer Lifecycle Analysis & Customer Lifetime Value (CLTV) Modeling – This project aims to answer a few primary questions:

  • How long can we expect to retain a newly acquired customer?
  • What value can we expect a newly acquired customer to yield over their lifetime?
  • What is the lifetime value (CLTV) of defected customers and how does that compare to the life-to-date (LTD) value of our active customers?
  • Given the lifecycle and repurchase behavior of our customers, should we consider investing more aggressively in acquiring new customers? Or do we need to focus on maximizing the profit generated from each customer at the time of acquisition?
  • Will loyalty programs work for our business?
  • What is our average customer acquisition cost (CAC)?
1 year 2 year 3 year customer value

Above: One of the deliverables of the CLTV analysis, measuring weighted average revenue per customer from their first order through their first 3 years as a customer and beyond. This particular example segments for late and early customers as well as an inflation adjusted comparison as the data set covered a decade of purchase data.

We also offer custom projects tailored to the unique questions you have about your customers. All of our database marketing projects are designed to extract information from your customer file which will enable you to improve the overall profitability of your business, whilst determining appropriate objectives for future growth.