The Slice-and-Dice System to Get Your Customers to Buy More
Issue #2226
- WEALTHY: The art of "data mining" (Wendy Montes de Oca)
- HEALTHY: Sip this to get slim (Kelley Herring)
- WISE: Peter Scott on aiming high
ALSO IN THIS ISSUE:
- Hit the "delete" key on this commonly misused word (Dan Hauptman)
- 10 little things Jason loves about the holidays
- It’s Fun to Know… about holiday cards and packages
- Add "manumit" to your vocabulary
“The Broke, Lazy Man’s Way to Quick and Easy Internet Riches…”
Today, it seems there’s no shortage of ways to make money online. Problem is, some of these programs can be pretty complicated.
I hate complicated… I like quick and easy.
Well, right now… this very minute… there are 3 people in the world using an almost secret method that is just raking in the dough, day in and day out.
They’ve allowed us to take a peek, and we’re gonna spill the beans on what we saw.
For example, how one fellow took $10 and turned into a $500,000 empire.
This method is so simple and so effective, it’s almost scary.
- Patrick Coffey
"I’ve always believed the greater danger is not aiming too high, but too low, settling for a bogey rather than shooting for an eagle."
Peter Scott
Use the Slice-and-Dice System to Get Your Customers to Buy More
One of the best ways to build your online business is to build your house list of potential customers. But you can also do it by changing the way you market to your existing customers. Today, I want to show you how breaking up your existing customer database can boost your sales.
Data mining, or database marketing, is basically the art of slicing and dicing your own in-house list of names. You do this to help increase the response to your online sales promotions.
You see, once you divide your list of names into smaller groups ("segmentation"), you can specialize your product offers. Then, by targeting your offer based on customer needs, you’ll be promoting products to people who are more likely to buy them. You increase your customers’ satisfaction as well as your potential conversion rates. (The conversion rate is the number of people who not only read your offer but actually purchase the product.) And higher conversion rates means more money for your company.
One proven model is the RFM method. It’s practiced by direct-response marketers all over the world, and is a marketing method we use here at ETR.
"R" stands for Recency, how recently a customer has made a purchase. "F" stands for Frequency, how often the customer makes a purchase. And "M" stands for Monetary, how much the customer spends.
Here’s how you can use the RFM method to help lift your sales.
- Recency
Whether your house list is made up of people who signed up to receive your free e-zine or people who paid for a subscription, you can segment your database according to how long your customers have been with you. Let’s say, 0-3 months, 3-6 months, 6-12 months, and 12+ months.
You would look at these groups as your hot subs (newest subscribers), warm subs (mid-point subscribers), and cool subs (those who have been subscribing to your e-zine the longest).
Let’s say your list is made up of subscribers to your free e-zine. Here’s how you use that information…
Because your "cool subs" may have lost their initial enthusiasm for your e-zine, you should cross-reference them with your open rates. If most of them haven’t been opening your e-zine in six, nine, or 12 months, you should consider sending them a special message asking if they still want to receive your e-zine.
But that doesn’t mean you ignore them. These inactive subscribers are a great group on which to test new marketing approaches, new prices, new subject lines, and so on. After all, you have nothing to lose. Your goal for this group is to re-engage them. And since they aren’t responding to your current e-mails, why not use this platform to test?
Your "hot subs" are your newest, most enthusiastic subscribers. They are ripe to learn more about you, your products, and your services. If you handle this group properly, you can cultivate them into paying customers. So you may want to send them targeted offers and messages.
For example, you could send them a special introductory series of e-mails. This special series would introduce them to your e-zine’s contributors and philosophy. It could also tempt them with specially priced offers. Sending an introductory series like this can not only increase the number of subscribers who convert to paying customers, it also increases their lifetime value (LTV) – the amount they spend with you over their lifetime as your customer.
If, instead of subscribers to a free e-zine, your house list is made up of people who paid for their subscription, the same segmentation process applies. You break your active subscribers into hot subs, warm subs, and cool subs. You also break out expirers (those who allowed their subscription to run out) and cancels (those who cancelled their subscription).
Cross-marketing to these lists is usually effective. The expirers often just forgot to renew and simply need a reminder. And just because someone cancelled one subscription doesn’t mean they may not be ideal for another service or product that you provide. If they’re still willing to receive e-mail messages from you, add these folks to your promotional lists.
Once you’ve gotten these otherwise inactive subscribers to open your messages, turning them into paying customers is just a matter of time. Most Internet marketers would have written these people off. So any revenues you get from them are "extra."
- * Frequency
"It may seem counter-intuitive," says Michael Masterson, "but in the direct-mail world, the best names you can mail to are people who have recently bought products and/or services very similar to what you are selling. The closer you can get to mailing to those who have bought similar products/services, the greater your response rate will be."
This connects to another important way to break down your house list: by how frequently customers have bought from you. So once you’ve divided your list based on recency, you look at it in terms of your customers’ purchase behavior. First, you identify your multi-buyers – customers who’ve purchased more than one product from you. You then split this list further, segmenting out two-time, three-time, four-time (and more) buyers.
Those who have bought from you most often have proven their loyalty and obviously like the products and service they’ve been getting from you. So if, for example, you’re considering launching a new product with a high price point, these would be your best prospects.
- * Monetary
Finally, you look at your list in terms of money.
One way to do this is to divide your list by the amount of money each customer has spent with you. You might, for example, assign a benchmark dollar amount, such as $5,000, $10,000, or more. Customers at that level make up your "premium buyers." This is the group that has the most favorable LTV for your company. These are your "VIPs."
Once you discover who your VIPs are, you can design products or offers specifically for them. Let’s say you have some kind of exclusive – and expensive – lifetime membership club. You would market this to multi-buyers who also fall into your "premium buyer" category.
If you offer payment options to your customers, another monetary way to divide your list is according to the payment options they have chosen: monthly, quarterly, yearly, etc. This will help you determine the initial purchase tolerance of each group of customers and which ones may respond best to future price points.
As you can see, by looking at your customers’ purchasing habits – recency, frequency, and monetary – you can identify the best customers for certain products. And by offering a product to customers who are likely to want it, you can improve your conversion rates.
By using the RFM model and other data-mining techniques, I’ve seen conversion rates double and triple. I’ve also seen inactive subscribers’ open rates surge from 0 percent to more than 30 percent. That’s quite an accomplishment, considering that the average open rate for the industry is about 20 percent.
I’ll go into more details on how to leverage the power of your own in-house list through segmentation in future issues of Early to Rise. In the meantime, if you’d like to learn more about data mining and how to get the most out of your current customer database, I highly recommend an excellent book titled Strategic Database Marketing by Arthur Hughes.
[Ed. Note: Wendy Montes de Oca is ETR's Vice President of Marketing & Business Development. Enjoy the success you've always wanted with ETR's Direct Marketing Quick-Start Kit. This 4-CD program is the most effective, quickest, and least expensive way to move you toward financial independence.]
The Greatest Medical Discovery of the Century
Scientists have discovered a remarkable substance that has the power to prevent diabetes, stop heart disease before it starts, and kill cancer cells on contact. In fact, this substance has been shown to prevent and treat more than 20 major diseases in all!
However, more than 85% of the population is deficient in this disease-killer at least part of the year. And believe it or not, medical professionals and health authorities actually advise people to avoid the single greatest source of this vital substance.
Click here to learn why you probably haven’t heard about this revolutionary discovery.
Fat-Burning Beverage
Looking to slim down? Try adding this fat-burning beverage to your daily repertoire.
Green tea has long been praised for its antioxidant benefits. New research shows it has thermogenic – or fat-burning – attributes, as well.
Researchers believe that green tea works its fat-melting magic due to a unique interaction between two compounds – caffeine and catechins. These two substances work together to help the body release noradrenaline (NA), a chemical neurotransmitter that boosts the metabolism and helps burn more calories.
Kick up your body’s fat-burning furnace (and get powerful antioxidants, too!) by enjoying green tea. To get the maximum benefit, steep at least two minutes.
[Ed. Note: Kelley Herring is the founder and CEO of Healing Gourmet and the author of the new e-book, Guilt-Free Desserts: 20 All-Natural, Fail-Proof, Low-Glycemic Desserts Just in Time for the Holidays. Learn more about how simple lifestyle choices can improve your health by reading ETR's free natural health e-letter.]
The Language Perfectionist: Literal Illiteracy
By Don Hauptman
A newspaper article about the closing of a beloved neighborhood bakery quotes the owner, lamenting, "My heart is literally broken over it."
Literally? Surely not! Here are other examples of this frequently misused word:
- "We had a composer and a style of music that would literally break down the walls for audiences."
- "This is literally one of those cases where people keep crawling out of the woodwork with new information."
The word literally is often employed in a misguided attempt at emphasis. But in an ironic twist, the meaning is reversed. The writer or speaker uses an expression metaphorically or figuratively – that is, not literally. But the use of literally transforms the metaphor into something ostensibly real, yet impossible and absurd.
As the above examples indicate, the result is often unintentionally humorous. So use literally only when it’s what you mean – literally.
[Ed Note: Don Hauptman, a direct-response copywriter for more than 30 years, may be best known for the space ads he wrote with the classic headline "Speak Spanish Like a Diplomat!" He also writes books and articles on language and wordplay.]
10 Little Things I Love About the Holidays
By Jason Holland, ETR’s Editorial/Research Assistant
10. Seasonal beers. Most of my favorite microbreweries release limited-edition beers that tend to be darker and more robust around the holidays. I suppose these special brews are meant to guard against the winter chill, but I still enjoy them in South Florida’s subtropical climate.
9. "Wonderful Christmastime" by Paul McCartney. The ex-Beatle’s solo holiday hit from 1979 featuring a wacky synthesizer is my favorite Christmas song. I scan the all-Christmas radio station until I hear it at least once.
8. Holiday TV specials from my childhood. I make sure not to miss "A Charlie Brown Christmas," "Rudolph the Red-Nosed Reindeer," "How the Grinch Stole Christmas" (not the Jim Carrey movie), and "The Year Without a Santa Claus." I’m looking forward to passing on this tradition to the next generation with my one-year-old son, although he’s not ready to appreciate it yet.
7. Christmas in Florida. I can enjoy a white Christmas too… but from a safe distance.
6. The overwhelmingly tacky Christmas display at my former neighbors’ house. When I lived in Orlando, the family across the street covered their yard, walls, and roof with lights, plastic Santas, inflatable reindeer, and more. They also had a nonstop loop of Christmas carols playing over a scratchy loudspeaker. When I visit the city over the holidays, I’ll definitely drive by to check it out.
5. My mother-in-law’s peanut butter chocolate fudge. She makes a big batch and sends it out to friends and family. My wife doesn’t like sweets, so our share is all for me.
4. Buying gifts for my son. My criteria for his toys is that they have to be free of lead, educational, and fun for me to play with too.
3. Not shopping on Black Friday… and watching the coverage of eager shoppers waiting in line overnight in near-freezing temperatures to have first crack at the sales and near riots over $20 DVD players.
2. Buying a great gift for my dad. Finding a gift that he will like and won’t return is a challenge I relish every year. Last Christmas, a wheelbarrow and an electric screwdriver were big hits. I’m still mulling over this year’s present.
1. Christmas with the Duke. TBS used to run a John Wayne movie marathon on Christmas Day. And since I love John Wayne movies, I made sure to catch all my favorite scenes in such fine films as Donovan’s Reef, El Dorado, and The War Wagon. So far, it doesn’t look like this is going to happen this year… but I’m holding out hope.
It’s Fun to Know: Holiday Cards and Packages
The busiest time of year (by far!) for the U.S. Postal Service is the holiday season. The post office delivers an estimated 20 billion letters, cards, and packages between Thanksgiving and Christmas. That boils down to 625 million items per day, 12 million of them packages.
The busiest day for cards and letters is usually December 18. The busiest day for packages is December 20.
(Source: U.S. Census Bureau)
A Top Business Breakthrough Known Only by a Handful of Insiders Turns Out to Be One of the Best New Ways to Make a Bundle…
Plenty of people make tons of money every day in Real Estate and on Wall Street. But if you’re looking for something different… and if you don’t have $100,000 to invest or even $10,000…
Well, we’ve found it…
Till now, only a handful of insiders even knew about this almost secret powerful business.
What is it? All I can tell you is that more than half of the world’s billionaires have made their money this way. You’ll have to read on to learn more about it.
Finally the cat’s out of the bag… Click here to read more…
Word to the Wise: Manumit
To "manumit" (man-yuh-MIT) is to free from slavery or servitude. The word is from the Latin for "to let go."
Example (as used by Victor S. Navasky in The Nation): "The prime reason, I suspect, will be that we don’t need any liberator to manumit our ‘corporate slaves’ because we’ve never had any."
[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007
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