Data: The Modern Tribal Bonfire

Data: The Modern Tribal Bonfire

My Story I am founder and CEO of a successful software company built on big data technologies, yet I believe that making better decisions is not the biggest benefit of becoming data driven. When I initially started the company with my partner – who had just earned his Ph.D. in data mining – I didn’t even know exactly what data was all about. But I was looking to start a business and “big data” sounded like an interesting basis for a high-tech company. So we started meeting with corporations, crunching their customer data and presenting them with all kinds of insights which we hoped would be useful to them. I knew right away that we…

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Facebook Custom Audiences + Optimove = A Killer Retention Marketing Channel

Optimove + Facebook = Killer Retention Marketing

Can retention marketers use Facebook Custom Audiences to improve conversion and customer retention? The obvious answer is: Sure, why not? However, the technicalities involved have severely limited the use of Facebook Custom Audiences (FCAs) in practice. The goal is to be able to automatically create and modify Custom Audience lists according to granular, behavior-based customer micro-segmentation. This is an important step forward in transitioning the use of paid online advertising from being exclusively used for customer acquisition to making it an effective and measurable channel for customer retention. In this post, I will explore the challenges of using FCAs for retention marketing and discuss how, with the right approach and tools, you can make FCAs…

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Engage Your Seasonal Customers During Their Off-Season

Engage your seasonal customers during their off-season by discovering promising cross-product affinity correlations

Many types of online businesses have customers who tend to be active only during particular times of the year. Just a few examples are online retail stores (many customers use particular stores to shop only for particular types of seasonal products, mostly ignoring the store the rest of the year), sports betting sites (many customers are only active during the season in which their favorite sports are played) and travel sites (many customers tend to cluster their purchases during summer and/or winter vacation periods). In all these cases, an obvious opportunity presents itself: entice these customers to make different kinds of purchases during different times of the year. In addition to simply generating additional revenues…

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Discovering Valuable Churn Sub-segments

Discovering Valuable Churn Sub-segments

At Optimove, we’re always thinking about ways to better understand customers and their behavior. A big part of that is constantly being on the lookout for interesting customer segments and personas that have the potential to improve customer retention marketing. One customer lifecycle stage that we think about a lot in the world of online businesses (e-commerce, iGaming, social gaming, financial, etc.) is “Churn,” i.e., those customers who made at least one financial transaction (purchase, deposit, etc.), but who haven’t been back to the site for a while and their behavior data indicates that they are unlikely to return in the near future. The majority of paying customers in almost every online company’s customer database…

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How to Perform Customer Survival Analysis

Survival Analysis

Customer survival analysis, also known as retention rate analysis, is the application of statistical techniques to understand how long customers remain active before churning. The information generated by this analysis helps improve customer acquisition and retention activities. Survival analysis is always based on tracking a cohort of customers over time. Cohorts are unchanging groups (i.e., no new customers join a cohort once formed) who are tracked over time. The most common type of cohort is the group of people who became customers in a particular time frame, e.g., a particular date, the second week of the month of January, or the fourth quarter of the year. Two Survival Analysis Methods There are two primary methods…

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Beware the Giraffes in Your Data!

beware-the-giraffes-in-your-data

During the past few years, I’ve spent a lot of time working with marketing departments who spend much of their time analyzing data, conducting research and tracking performance metrics. They are always on the lookout for exciting new insights which can translate into action items and provide strategic advantage. Unfortunately, marketers and analysts often miss key opportunities to spot these insights – and even make the wrong decisions – because they fail to account for the “giraffe effect” in their data. Giraffes are what I call portions of data which dominate the rest of the data – and hide important insights. Sometimes they even lead to wrong conclusions. This can happen in different ways and…

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The iGaming Summertime Blues

Summer iGaming Decline

Many in the online gaming industry have the impression that the summer months are a slower period on their websites. The logical reasons include that lots of people take vacations, enjoy the longer days outside and spend more time with family and friends. We decided to have one of our data scientists research the matter to see if the data empirically supports the hypothesis that there is a statistically significant reduction in iGaming player activity during the summer months. Let’s cut to the chase: Do iGaming sites suffer reduced player activity in the summer months? You bet! The figures we obtained clearly support the initial hypothesis that the summer months are a weaker period for…

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Divide and Conquer for Killer Marketing Campaigns

Divide and Conquer for Killer Marketing Campaigns

At one time (not so long ago), most retention marketers would send the same marketing campaign to their entire customer list. Nowadays, most marketers understand well the value of segmenting their customers into groups and sending different offers to each group. As we’ve discussed in a previous post, sophisticated marketers and retention experts have discovered that identifying smaller, more homogenous groups enables far more targeted – and profitable – campaigns. The reason is clear: when each individual customer (or small groups of similar customers) receives a personalized and highly-relevant offer, there is much more chance that the message will resonate with them. When you tailor your messages and incentives so that they are the most…

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How to Optimize Your Affiliate Spend

Optimize Your Affiliate Spend

You’re spending a lot of money on acquiring traffic to your site from affiliates. The key to preventing over-spending on this traffic is to quickly determine the value of the customers arriving from each affiliate. The Conventional Approach Traditionally, operators collect data on customers from each affiliate channel over a period of weeks, months or even years to determine the average customer value delivered by each affiliate. This is a very costly approach, because during this lengthy measurement period, you are inevitably wasting a huge amount of money over-paying for customers from certain affiliates. The Modern Approach Recently-developed predictive customer modeling technologies are now able to accurately estimate the future lifetime value of new customers…

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The Right Way to Measure Retention Campaign Performance

The Right Way to Measure Retention Campaign Performance

In my last post, I detailed how to use control groups to treat every customer campaign as a marketing experiment. The goal of each experiment is to determine how much revenue is directly attributable to the campaign. We do this by calculating the monetary uplift evident after comparing the spending behavior of the test and control groups. Let’s revisit the example I used in my last post: a marketer selected 1,000 VIP customers for a campaign. The marketer actually sent the campaign to 900 of the customers (the test group) and did not send it to 100 of the selected customers (the control group). 20% of the test group customers (180) made a purchase (or…

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How to Treat Every Customer Campaign as a Marketing Experiment

Use Control Groups to Run Marketing Experiments

As a marketer or retention expert, you are spending plenty of time and money on your customer retention campaigns. This article will discuss how to measure the effectiveness of your campaigns – in monetary terms – in order to optimize future campaigns and maximize the revenues they generate. In other words, we’re going to explore how to treat every campaign as a “marketing experiment.” Many marketers use email open rates and click rates as their primary means of measuring campaign effectiveness. These metrics may provide important insight into brand strength and customer engagement, as well as aspects of the actual email campaign (e.g., the offer, the subject line and the template visuals). However, these metrics…

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Existing Customers versus New Customers: What’s Your Ideal Future Revenue Balance?

New vs Existing Customers

Will most of your future revenues come from existing customers or from new ones? This simple question is one that marketing analysts should consider carefully, because it can provide a unique perspective on the overall health of your business – and it can provide important input to long-term strategic planning. We asked ourselves this question regarding the many companies who rely on our software and expertise to plan and execute their customer marketing and retention efforts. What we found eventually led us to the conclusion that every business can gain important new insight into its strategic planning by investigating the expected source of its future revenues. Existing Customers versus New Customers: How to Make a…

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Customer Segmentation for Personalized Retention Marketing

This article takes a thorough, high-level look at how our iGaming and Forex clients perform customer segmentation to target their marketing efforts and thus increase spend and customer lifetime value. The strategies discussed here are applicable to any company or website with paying customers, with or without our software. In the old days, companies sent the same marketing campaigns to all of their customers. Later, marketers began to understand that even simple grouping of their customers allowed them to run more relevant, effective and profitable campaigns. More recently, sophisticated marketers and retention experts have discovered that applying the latest technologies to this challenge deliver far more targeted – and profitable – campaigns. The reason is…

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Online Casinos vs. Social Casino Games

Understanding the Differences between Online Casino Gamblers and Social Casino Game Players The explosive growth of the social gaming market – with 300 million active users per month at Facebook alone (source) – has put this domain on the radar of online casino operators interested in tapping into this trend. On the other hand, because only about 2% of social gamers are paying players, social gaming operators are looking towards the $30.3 billion online casino industry (source) to figure out how to better monetize their player base. In a sound bite: Social games have the reach, while online gambling has the money. We believe that there is extensive opportunity for these two domains to accelerate…

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Behavior-based Customer Segmentation for More Effective Retail Marketing

Retail marketers are constantly looking for ways to improve the effectiveness of their campaigns. One way to do this is to target customers with the particular offers most likely to attract them back to the store and to spend more on their next visit. In other words, the marketer’s goal is to make the most relevant match between customer and offer. This article presents a highly-effective means of accomplishing this goal using shopping behavior-based customer segmentation. The Marketing Benefits of Customer Segmentation To get the most uplift from a marketing campaign, the campaign should be directed at the customers most likely to respond to it. By using customer segmentation to determine actionable “customer prototypes,” the…

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Maximize Customer Value by “Re-Incubating” your “Back from Churn” Customers

One of the foundations of our customer modeling technology is tracking the movements of customers among lifecycle stages over time. Years of experience has proven to us how valuable it is to compare current customers to others who have shared a similar pattern of lifecycle stage movements. In order to fully implement this approach, we monitor a lifecycle stage ignored by many marketers and analysts: the stage containing customers who have abandoned the business, and who later returned. We call this stage “Back from Churn” or “FromChurn” for short. Because our approach requires us to isolate this as a distinct lifecycle state, we have been able to glean fascinating insights into customer behavior that would…

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Improved Churn Prevention Driven by Human Behavior Modeling

Online casino operators generally launch retention efforts on a group of players when the activity levels of those players drop significantly. However, once a player has already reached the point of churning, promotional offers are often no longer effective. The obvious goal is to identify which players will churn before they actually do. Ideally, the operator will be able to make this determination even before the player himself realizes what he is going to do.   The Difficulty of Predicting Churn Churn prediction modeling techniques attempt to understand the precise customer behaviors and attributes which signal the risk and timing of customer churn. The accuracy of the technique used is obviously critical to the success…

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Proactive Customer Retention: The Next Growth Engine for Forex Sites

In any industry, customer retention starts with a great product and great customer service. Beyond these basic factors, which always encourage customers to return more frequently and spend more, marketers should also engage in “proactive retention” efforts. For example, offering relevant incentives and promotions to forex traders can dramatically increase trade volume and frequency. The key is successfully delivering the most relevant and effective offer to every trader, at the right time. Why engage in proactive retention efforts? Customer acquisition is very expensive and competitive, whereas people who have already made one or more deposits on your site represent low-hanging fruit for you to grow into long-term, high-volume traders. It is well-known that approximately 50%…

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