STEP 1: Opportunity Identification & Evaluation

Evaluate customer purchase history across similar attributes such as acquisition source, order size, product brand or category.

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STEP 2: Cohort Analysis

Identify the long-term value associated with purchases across similar cohorts. This often is tied directly to a customer lifetime value or life-to-date value.

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STEP 3: Take Action

Integrate the knowledge gained with paid search channels and bidding strategy. This often results in increased tolerance for customer acquisition costs (CAC) in order to accelerate the growth rate of the business.

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OMINTAIL’S ADVANTAGE

What are the benefits?

vs

Using database marketing

  • Immediately identify the opportunities for increased profits over a 1, 2 or 3 year period for the business.
  • Improve audience segmentation through RFM scoring. Reactivate past buyers, focus on big spenders or reduce unnecessary spend to loyal customers.
  • Understand the value of a customer to the business and identify growth opportunities.
  • Understand the effectiveness of loyalty programs.

Not using database marketing

  • Results in optimizing for the immediate value of the first order from a customer. If repurchase is likely, this means missed opportunities, slower growth and possibly less profit in the long-term.
  • Use standard audience targeting criteria tied to web sessions and neglect past purchase data.
  • Only understand the value of an order for the business without knowledge of future value.
  • Waste marketing dollars testing loyalty programs that fail to drive incremental value.

Our Methods

RFM Scoring & 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 Lifetime Value (CLTV)

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)?

Custom Projects

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.

SUCCESS STORIES

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