Presentation is loading. Please wait.

Presentation is loading. Please wait.

Multichannel Forensics: An Introduction Kevin Hillstrom President, MineThatData Kevin Hillstrom, President: MineThatData 206.853.8278.

Similar presentations


Presentation on theme: "Multichannel Forensics: An Introduction Kevin Hillstrom President, MineThatData Kevin Hillstrom, President: MineThatData 206.853.8278."— Presentation transcript:

1 Multichannel Forensics: An Introduction Kevin Hillstrom President, MineThatData Kevin Hillstrom, President: MineThatData

2 Multichannel Forensics An Introduction Kevin Hillstrom President, MineThatData

3 Predicting The Future Kevin Hillstrom, President: MineThatData Who is going to win “American Idol”? Do you anticipate heavy traffic on your way home from work? How will Microsoft’s Zune MP3 player fare against Apple’s iPod player?

4 Metrics And Intuition Kevin Hillstrom, President: MineThatData Systems have been built to help us understand the past, and predict the future: Comp Store Sales. Stock Market: Dow Jones Index, S&P 500 Weather: Temperature, Cloud Cover, Humidity, Rain. Sports: Playoff Seeding.

5 We Use Metrics And Intuition Kevin Hillstrom, President: MineThatData Examples: Interstate Highways, Suburbs, Urban Decay. IBM, Microsoft, Google Dial-Up Internet, Broadband Internet 8mm Film, VHS, DVDs, Digital Movies LPs, Cassettes, CDs, MP3s Network TV, Cable TV, Satellite, YouTube

6 Could You Answer This Question? Kevin Hillstrom, President: MineThatData “Five years from now, if current market conditions remain reasonably constant, what will your sales and profit be, by product, brand or channel?”

7 Predicting The Future Kevin Hillstrom, President: MineThatData Think about the metrics available to you, where you work. Most of the metrics explain “what happened in the past”. You are paid to drive “future sales”.

8 Multichannel Forensics Kevin Hillstrom, President: MineThatData Multichannel Forensics is the study of how Customers interact with Advertising, Products, Brands and Channels. Multichannel Forensics provide a roadmap for the CEO or Executive. The leader will understand which levers drive growth.

9 Multichannel Forensics Kevin Hillstrom, President: MineThatData There are two components in any Multichannel Forensics analysis. 1.Customer Loyalty. How loyal are customers within any product, brand or channel? 2.Customer Migration. Do customers stay within one product, brand or channel, or do they migrate to others?

10 Repurchase Modes Kevin Hillstrom, President: MineThatData Our products, brands or channels are classified into three Repurchase Modes, usually based on annual activity. For the average business, we look at customers who purchased during Next, we count how many of those customers purchased during 2006.

11 Repurchase Modes Kevin Hillstrom, President: MineThatData Retention Mode means you have a reasonably loyal customer base. Hybrid Mode means you need a balance of loyalty and acquisition strategies. Acquisition Mode means your main job function is to constantly acquire new customers.

12 Repurchase Modes Kevin Hillstrom, President: MineThatData There are three Repurchase Modes: Retention Mode:60% - 100% Repurchase. Hybrid Mode:40% - 60% Repurchase. Acquisition Mode: 0% - 40% Repurchase. The repurchase mode determines the primary focus of your marketing activities.

13 Migration Modes Kevin Hillstrom, President: MineThatData Three Retention Modes are complimented with four Migration Modes. Migration Modes explain how customers use products, brands or channels. Do customers only buy from one area, do they sample other areas, do they switch to other areas?

14 Migration Modes Kevin Hillstrom, President: MineThatData Here are the Migration Modes: Isolation Mode is when customers do not cross-shop other areas. Equilibrium Mode is when customers try other areas of the business

15 Migration Modes Kevin Hillstrom, President: MineThatData Two additional modes: Transfer Mode is when customers switch to other areas of the business. Oscillation Mode happens when customers alternate loyalty between products, brands or channels.

16 Calculate Migration Mode Kevin Hillstrom, President: MineThatData Here’s an example: Online customers have a corporate repurchase rate of 55%. Online customers had a 16% purchase rate into the retail channel. The repurchase index is 16 / 55 = 29% = Equilibrium Mode.

17 Migration Probability Table Kevin Hillstrom, President: MineThatData

18 Migration Probability Table Example Kevin Hillstrom, President: MineThatData Catalog is in Acquisition / Equilibrium Mode. Online is in Acquisition / Equilibrium Mode. Retail is in Hybrid / Isolation Mode. Catalog customers shop the website and retail store. Online customers shop retail. Retail customers are unlikely to shop elsewhere.

19 Migration Probability Table Example Kevin Hillstrom, President: MineThatData In this example, catalog growth is hard. Catalog can be used to drive traffic to other channels. The website might be used for E-Commerce, or for research that drives customers to the store. Store customers seem to only want to shop the store.

20 Website Example: Peanut Business Kevin Hillstrom, President: MineThatData

21 Website Example: Peanut Business Kevin Hillstrom, President: MineThatData

22 Website Example: Peanut Business Kevin Hillstrom, President: MineThatData Gifts are in Hybrid / Isolation Mode. Shelled are in Acquisition / Transfer Mode. Roasted are in Acquisition / Equilibrium Mode. In this example, Gift customers are the most loyal, but fail to cross-shop. Shelled Peanut customers become Roasted Peanut customers. Roasted Peanut customers shop the whole site.

23 Online Channel Example Kevin Hillstrom, President: MineThatData

24 Five Year Product Forecasts Kevin Hillstrom, President: MineThatData The business analyst can build a forecast of future performance. The analyst measures the probability of a customer migrating to every product, brand or channel combination. By appending spend levels to each combination, a future forecast can be derived.

25 Analyze Sales Over Time Kevin Hillstrom, President: MineThatData

26 Analyze Your Competitors Kevin Hillstrom, President: MineThatData

27 Leadership Strategies Kevin Hillstrom, President: MineThatData Business units that operate in Equilibrium or Transfer Mode require leaders that have outstanding collaborative skills. Because customers migrate back and forth in Equilibrium / Transfer Mode, business leaders also need to collaborate.

28 Leadership Strategies Kevin Hillstrom, President: MineThatData Equilibrium and Transfer Mode leaders have the least control over their business. Isolation Mode leaders have a lot of control. Small business units in Isolation Mode are ideal for new leaders. Leaders who don’t “play well with others” are ideally suited for Isolation Mode business units.

29 Marketing Strategies Kevin Hillstrom, President: MineThatData Marketing: 1.Versions that meet the needs of customers likely to migrate to another product, brand or channel. 2.Try to move products, brands or channels from Acquisition to Hybrid, or Hybrid to Retention Mode.

30 Marketing Strategies Kevin Hillstrom, President: MineThatData Catalog Marketing: 1.What role does catalog marketing play, given the results of a Multichannel Forensics analysis? 2.If catalog customers transfer to another channel, consider merchandising strategies that facilitate this transfer.

31 Marketing Strategies Kevin Hillstrom, President: MineThatData Online Marketing: 1.Do online customers transfer to another channel (telephone, retail)? 2.If so, online marketing is “brand focused”, not “channel focused”. 3.If not, online marketing capitalizes on completing an online sale today.

32 Marketing Strategies Kevin Hillstrom, President: MineThatData Data Mining: 1.Identify merchandise trends that facilitate customer migration from one product/brand/channel to another. 2.Build models that predict the migration. 3.Use Isolation Mode information to limit cross- shopping marketing strategies.

33 Multichannel Forensics Overview Kevin Hillstrom, President: MineThatData Three Repurchase Modes and Four Migration Modes dictate the role each product, brand or channel (and combinations) play in the bigger picture of our complex business models. Each product, brand or channel plays a role in the larger ecosystem of your individual business.

34 Multichannel Forensics Overview Kevin Hillstrom, President: MineThatData By calculating unique repurchase probabilities, it is possible to develop five-year business forecasts that highlight the future trajectory of your business. Your trajectory and acquisition/retention strategy dictate marketing strategies and data mining opportunities that drive growth.

35 Multichannel Forensics Overview Kevin Hillstrom, President: MineThatData Humans are great at looking at various trends, understanding where the future is heading, and then developing action plans based on what they are observing. We do this well with macro-business trends. Let’s do this within our own businesses, too!!

36 Questions? Kevin Hillstrom, President: MineThatData Contact: Kevin Hillstrom President, MineThatData Phone: Website: Blog: White Paper:


Download ppt "Multichannel Forensics: An Introduction Kevin Hillstrom President, MineThatData Kevin Hillstrom, President: MineThatData 206.853.8278."

Similar presentations


Ads by Google