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10 data mining examples for 10 different industries 0

Posted on August 17, 2019 by Rob Petersen
data mining examples

Data mining examples

Data mining examples show the process of discovering patterns and identifying rules in large data sets. Machine learning, artificial intelligence, statistics, and database systems are methods frequently used.

How data mining is applied across industries is vastly different. That’s because the goal of data mining is understand customer behavior, predict future behaviors and identify steps that accelerate the desired outcome. And customers behave differently depending on the industry.

To show how, here are 10 data mining examples for 10 different industries.

Banking data mining

In banking, the main objective is to use data mining is to extract valuable information from distinct customer data. That’s because the key strategy for a bank is to reduce costs and increase bank revenues. The customer, and their accounting and personal information, is the backbone for data mining examples of every bank. They collect data such as their purchase history, geo-location preferences and other behaviors. Bank that effectively use this data mining analysis to create right product for the right customer.

E-commerce

Many e-commerce companies use data mining and business intelligence to offer cross-sells and up-sells through their websites. One of the most famous of these is, of course, Amazon, who use sophisticated mining techniques to drive their, ‘People who viewed that product, also liked this’ functionality. By thoroughly studying and analyzing past data and behaviors, Amazon categorizes products depending on the probability of your purchasing the product.

Educational data mining

Educational Data Mining (EDM) is increasing rapidly as more and more education systems are going online. It has opened new areas like new computer supported interactive learning methods, tools-intelligent tutoring system and simulation games. This has created opportunities to collect and analyze student data , to discover patterns and trends in those data and to make new discoveries and test hypothesis about how students learn through online classes. The data collected from online learning systems can be aggregated over large numbers of students and can contain many variables that data mining algorithms can explore for model building.

Healthcare

Lab tests are often essential to enable a health care provider to decide how to treat a patient. Applying data mining helps doctors discover things they might otherwise miss within laboratory results. In one study, researchers looked at more than 600 urine samples and used data mining to classify patients by life expectancy based on characteristics of their urine. Taking this approach reveals instances where patients are sicker than they seem, allowing doctors to take prompt action.

Marketing data mining

Data mining in marketing is used to explore increasingly large databases and to improve market segmentation. By analyzing the relationships between parameters such as customer age, gender, tastes and lifestyles, it is possible to predict behavior in order to direct personalized loyalty campaigns. Data mining also predicts which users are likely to unsubscribe from a service, what interests them based on their searches or what a mailing list should include to achieve a higher response rate.

Mass merchandisers

Mass merchandisers are good data mining examples in action. Loyalty card programs are usually driven mostly, if not solely, by the desire to gather comprehensive data about customers. One notable recent example of this is Target. As part of its data dining program, the company developed rules to predict if their shoppers were likely to be pregnant. By looking at the contents of their customers’ shopping baskets, they were able to spot customers who they predict were likely to have a baby on the way. They then send them targeted promotions for diaper, wipes and other baby products. Their predictions were so accurate that Target made the news by sending promotional coupons to families who did not yet realize (or who had not yet announced) they were pregnant! 

Mobile phones and utilities data mining

Mobile phone and utility companies are data mining examples that predict ‘churn’, the terms used for when a customer leaves their company to get their phone/gas/broadband from another provider. They collate billing information, customer services interactions, website visits and other metrics to give each customer a probability score, then target offers and incentives to customers whom they perceive to be at a higher risk of churning.

Nursing

An analysis reveals a substantial portion of Medicaid patients are going to the ER more than 10 times per year. 2 or 3 trips to the ER is just a bad year, but more than 10 visits means that something has gone wrong. This prompts Medicaid employees to call these patients, take steps to increase their level of personal care at home and institute 24/7 nurse hotline to allow Medicaid patients to call in for medical help rather than going to the hospital. This lowers the costs of Medicaid ER visits by more than 20%.

Retail data mining

Retailers segment customers into ‘Recency, Frequency, Monetary’ (RFM) groups and target marketing and promotions to those different groups. A customer who spends little but often is handled differently to a customer who spent big but only once and some time ago. The former may receive a loyalty, up-sell and cross-sell offers, whereas the latter may be offered a win-back deal, for example.

Social media

A study published in the Journal of Advertising uses social media mining techniques to gauge users’ perception of a variety of common brand names. The study specifically looked at Twitter, examining tweets of brands in the following industries: fast-food restaurants, department stores, telecommunication carriers, consumer electronics products, and footwear companies. The researchers use the Twitter handles of each company (“@CompanyName”) as keywords to pull about ten million tweets for each of the twenty companies studied for results that are incredibly specific. For example, the study found 15.7% of tweets about fast-food restaurants are about promotions chains are offering. And, among cable companies, 66.7% of tweets about Comcast contain a negative sentiment.

Are these relevant data mining examples to you? Could you use guidance on data mining for your company

10 experts give 10 reasons why ROI fails (it’s not numbers) 3

Posted on June 09, 2019 by Rob Petersen
roi fails

Why ROI fails

ROI fails to be measured for many businesses when Return on Investment (ROI) is a relatively simple calculation.

One that is exceptionally useful for measuring success over time and taking the guesswork out of making future business decisions.

10 experts give 10 reasons why ROI fails. And it has nothing to do with the numbers.

  1. No executive mandate to force measuring ROI. “The lack of a true executive mandate to force the needed process and cultural changes across the organization—well beyond marketing’s toy-strewn cubicle walls. Quite simply, without an executive mandate for change, your marketing ROI effort is highly unlikely to do anything but waste months of time and goodwill.” – Marc Blumer, VP, Director of Demand Generation Strategy, Slack + Company
  2. Lack of alignment between sales and marketing on ROI measurements. “Marketing and sales leaders are trying to work together, but still struggling to operate in lockstep. Marketing automation and CRM tools begin to connect the dots. They fail, however, to capture the interplay between marketing’s impact on awareness, trust, and confidence across paid, owned, earned, and shared channels, and sales’ ability to sell, sell more. The need to add in and analyze other factor that influence the customer journey.” – Kyle Brantley, Co-Founder and Chief Customer Officer
  3. Not setting SMART goals. “SMART goals are: 1) Specific, 2) Measurable, 3) Attainable, 4) Relevant and 5) Timely. SMART goals respond to and produce clear actionable data. They encourage multiple departments to collaborate and allow for perfect alignment with organizational objectives. Even if targets are not met, SMART goals give results expressed in universally understood metrics, allowing you to learn, grow, and be better prepared for your next attempt.” – Emma Astroth, Marketing Director, SIO Digital
  4. Letting hot leads grow cold. “A surprising number of companies launch a shiny new marketing campaign but fail to prepare the sales department for an increase in sales volume: you launch your plan, hot leads come in, sales staff is overwhelmed, hot leads become cold leads. An effective marketing plan requires a scalable sales infrastructure to ensure the organization has the capacity to adapt and manage lead flow.”
  5. No baseline. “Without the Baseline you have nothing to measure against and little, if any, control of your blog project and the progress you want to make.With the baseline you can start to compare your performance improvements over time and showing how you are getting better at measuring ROI.” – Urs E. Gattiker, ComMetrics
  6. No Key Performance Indicators (KPIs). Having SMART goals is one thing, but if you’re not monitoring your progress and breaking down your goals, but uou need to make sure they’re attainable, after all, and have a regular schedule for checking your progress. KPIs are also vital in a measurement framework. Ultimately, these show how effective your company is at achieving its business objectives. – Gertie Goddard, Noisy Little Monkey
  7. Customer relationships are managed by software platforms, not people. “The experts warn you against assuming that everything is well and fine just because you’re connecting to your customer with a CRM. Building relationships with your customers is an evolutionary process. Be aware that customers tend to evolve and change, and your business may need to evolve and adapt to their ever-changing needs.” – Amer Wilson, Rolus Tech
  8. Companies isolate analytics from business operations. “Struggles abound when analytic capabilities are developed and applied far removed from the business, within pockets of poorly coordinated silos. To make this work, a hybrid model to develop initial, centralized capabilities.” – Dennis McCafferty, eWeek, Baseline and CIO Insight
  9. Focus on customer acquisition vs customer retention. “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. It makes sense: you don’t have to spend time and resources going out and finding a new client — you just have to keep the one you have happy. If you’re not convinced that retaining customers is so valuable, consider research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%.” – Amy Gallo, Harvard Business Review
  10. No strategy. “Without a strategy, there can be no ROI. The “R” in ROI implies that there is in fact a return to be had. As such, the return must be defined through objectives and ultimately strategy development.” – Danna Vetter, VP, Consumer Strategies, ARAMARK

Do these reason make sense to you why ROI fails? Are you interested in creating an ROI that succeeds for your business?

21 top marketing KPIs and why they matter (Video) 0

Posted on April 07, 2019 by Rob Petersen

Top Marketing KPIs

Top Marketing KPIs (Key Performance Indicators) are the metrics that matter for any company that wants to know and improve progress to a desired goal.

No company should begin this journey without a road map to stay on track as the video explains. KPIs are the GPS for any marketing plan.


But the number of possible marketing KPIs can be bewildering. So the choice of the right ones are a critical factor to make the right decisions.

Here are 21 top marketing KPIs and why they matter for your company’s business success.

Desired Goal KPIs:

  • PROFITS: Are revenues minus expenses. Profits are the most important financial metric because a company can’t secure financing from a bank, attract investors, fund its operations, grow business and stay in business with turning a profit.
  • SALES (VS. REVENUE): Are the products and services a company sells. Revenue is the money received by the company from its varied activities.  Sometimes, they are the same. When different, since every company’s success depends on the products they sell, sales are a better indicator of a company’s current vitality.
  • SALES MARGIN: Is the amount of profit generated from a sale for a product or service. By analyzing sales margins, you identify which products are the most (and least) profitable.

Customer Value KPIs:

  • CUSTOMER LIFETIME VALUE (CLV): Is a prediction of profit attributed to the entire future relationship with a customer.  It is the monetary value of the customer relationship. It is an important metric because it represents an upper limit on spending to acquire new customers. It is also an essential element for calculating payback of marketing investments.
  • ANNUAL CUSTOMER VALUE (ACV): Is the term used to describe annualized earnings. ACV takes into account either a first-time subscription fee or first-time offer that may effect short-term results. But it is not as important as CLV for business planning.
  • COST PER ACQUISITION (CPA): Is the cost it takes to acquire a customer. CPA is a key metric for any marketing department because you don’t want to spend more money to convert a customer than they’re worth.

Customer Actions KPIs

  • CONVERSION: Is the point at which a recipient of a marketing message performs a desired action. It means someone has responded to your call-to-action.
  • CONVERSION RATE: Is the percentage of users who take a desired action. Since there has to be a base against which to divide the actions, it is most often a visit desired web destination like a website, landing page or social media page.
  • MICRO AND MACRO CONVERSIONS: A micro conversion is a small step on the path of a visitor towards your primary conversion goal (usually called a macro conversion). For most websites, the macro conversions are either making a purchase, giving a donation or providing a lead. Because conversions are critical marketing KPIs and the customer journey usually takes a number of steps to get to the desired goal, micro and macro conversion are an important sub-set of conversions.
  • QUALITY LEADS: Is a lead that can convert into an actual sale of your product or service. Because marketing plans often produce leads but the quality of the leads is debatable, especially with sales people, the conversions steps a lead has to take to be a quality lead is worth scoring for marketing KPIs.
  • TRANSACTIONS: Are the numbers of sales of a product or service over a certain time period. Transactions are created for every order that results in an exchange of money. 
  • AVERAGE ORDER VALUE (AOV): Tracks the average dollar amount spent each time a customer places an order on a website or mobile app. To calculate your company’s average order value, simply divide total revenue by the number of orders.

Marketing Tactics KPIs

  • WEBSITE VISITS: Are individual visitors who arrives at your website and proceeds to browse. A visit counts all visitors, no matter how many times the same visitor may have been to your site. A “unique visit” refers to a person who visits a site at least once within the reporting period. Each visitor to the site is only counted once during the reporting period.
  • VISITS BY CHANNEL: Visits come from a finite number of channels – Organic Search, Paid Search, Direct, Referral, Social and Email. Since you are applying resources and money to drive website visits from these channels, it is important to track visits by channel to determine how your resources and funds are best invested.
  • BOUNCE RATE: Represents the percentage of visitors who enter the site and then leave rather than continuing to view other pages within the same site. Bounce Rate is thought to be a measure of a website’s relevance to its visitors.
  • KEYWORD SEARCH ENGINE RESULTS PAGES (SERP): Is the list of results that a search engine returns in response to a specific word or phrase query. Web designers and site owners use search engine optimization (SEO) methods to make their sites and pages appear at or near the top of a SERP.
  • LINKS (OR REFERRALS): Provide a simple means of identifying and measuring other websites that list your website on their site and are sending visitors your way.
  • COST-PER-CLICK (CPC): If you buy Paid Search, Digital Ads, Social Media Ads, Sponsorships or Influencers, Cost-Per-Clicks is the one metric that puts them on equal footing by showing the price you pay for each click. 
  • CLICK-THROUGH RATE (CTR): Is a ratio or percent showing how often people who see your ad end up clicking on it. CTR is an indicator of ad relevance to viewers.
  • EMAIL LIST SIZE: People who sign up to receive your emails or newsletters express a higher level of interest in your business. If you are taking the time and care to grow your email list so it represents quality contacts, the number of people on this list are a business asset worth monitoring.
  • SOCIAL MEDIA FOLLOWERS: Studies show people who follow your company on social media sites are more likely to continue using your products and services as well as recommending them to others. So the size of your social media followings on sites like Facebook, LinkedIn, Instagram, Twitter and YouTube are also worth tracking.

Peter Drucker said the “purpose of a business is to create and keep a customer.” If you consider these marketing KPIs, you’ll have a much better chance of succeeding. Do these seem like the top marketing KPIs to you? Do you need held determining the right KPI scorecard for your business?

marketing kpis

10 most common mistakes in calculating ROI 0

Posted on December 02, 2018 by Rob Petersen

 

calculating roi

Calculating ROI (Return on Investment) is based on a simple formula involving the gain from an investment, the cost of the investment and the resulting ROI. Here it is:

calculating roi - roi calculation

Yet, to many, it is one of the most desired but vexing business measurements. Why?

Here are the 10 most common mistakes businesses make in calculating ROI.

  1. CONFUSION BETWEEN CASH FLOW AND GAINS: A common mistake in calculating ROI is comparing the initial investment, which is always in cash, with the gain as measured by profit or (in some cases) revenue. And not basing the gain on cash flow. For example, customers might be billed but that doesn’t mean they all pay on time. Or shipments might have gone out. But some goods might have been returned. The correct approach is always to base the gain, either profits or revenue, on the cash flow received.
  2. UNDERESTIMATE INITIAL COSTS: Many businesses try calculating ROI without first properly accounting for all initial costs. As a result, they may end up underestimating initial costs. Before you start your calculations, know what your initial costs are. Here are some of the areas that might be missed.
  3. FAIL TO INCLUDE PEOPLE’S TIME: One of the reason ROI is a highly regarded measurement is it includes not just out-of-pocket costs but operational costs like labor. Most business owners are aware that time is money for any company. However, when it comes to calculating ROI, they forget to consider the value of their time or that of their employees.
  4. DON’T KNOW THE MINIMUM RETURN REQUIRED: Take into consideration the minimum ROI that your company requires because there probably is one. Look at the relative risks, cost of capital, and opportunity costs. Here’s what experts say is a good ROI for various industries. Even if it hasn’t been formally stated, have the discussion to bring it out when you start calculating ROI.
  5. MEASURE THE WRONG THING: In 2010, Pepsi launched the Pepsi Refresh Project, an initiative where people could submit and vote for their favorite nonprofit projects to receive grants from Pepsi. The project generated 3.5 million Facebook likes, 60,000 Twitter followers, and over 80 million votes for nonprofits. But it didn’t sell more Pepsi. Pepsi cancelled the project in 2012 after falling from second to third place in national soda market share. It was a noble initiative, but likes, followers and votes were not the right measurements for ROI.
  6. MEASURE TOO MANY THINGS: In data-rich environments, it’s easy to lose sight of the metrics that really matter. Before calculating ROI, know the Key Performance Indicators (KPIs) for your business. KPIs are the metrics that matter for any business. They are metrics that, just like your ROI, have a target. If you don’t know them, you may find yourself measuring too many things.
  7. DON’T LEVERAGE EXISTING CAPABILITIES: A manager at a large wireless telecommunications firm recently called for help with her budget. She’d “taken a stab” at quantifying the ROI for the company’s data warehouse and wanted to review her calculations. Her worksheet—which included a rigorous mix of hardware, software licenses, maintenance, burdened staff, and consultant costs, etc.—made clear that she’d forgotten an important step: Leverage current IT infrastructure and resources to reduce cost estimates and make a project more attractive to business executives.
  8. DON’T GET THE BUSINESS TEAM INVOLVED: No one wants to own ROI. Calculating ROI can be difficult; understanding all the required skill and resource components can challenge even the best manager. When the planning phase of a project occurs, most managers take it upon themselves to calculate ROI on their own. It’s important that baseline ROI numbers are adopted by a team and accepted by the key business stakeholders.
  9. DON’T ACCOUNT FOR THE FULL SALES CYCLES: In the B2B buying process, it can take many months for a prospect to go from first touch to closed sale. If you try to calculate your ROI too soon, you may undervalue the amount of impact that investments are making. In the B2C buying process, it may take time to generate awareness, educate consumers and gain trial. But, once you do, buying frequency might increase at that point. Pick a time period to measure your ROI that makes the most of the resources invested.
  10. DON’T ACCOUNT FOR CHANGE: Nothing is certain. You can’t know what competitive developments, new trends or surprises might occur during the measurement period for your ROI. So don’t treat ROI as an area that you “set and forget.” Look at it regularly. Evaluate against KPIs. And be prepared to make revisions as necessary. Anything worth measurement should be view with the most current data.

Do these mistakes help you to understand the correct way to calculating ROI. Does your business need help in doing and managing ROI.

11 geotargeting case studies prove location is everything 0

Posted on November 11, 2018 by Rob Petersen

geotargeting

Geotargeting is the practice of delivering content to a user based on his or her geographic location. This can be done on the city, zip code or address level via IP address or device ID. Or on a more granular level through GPS signals, geo-fencing, and more.

Geotargeting is an obvious choice with any internet based campaign for a local business like restaurants, realtors, doctors and anyone whose customer base is concentrated in a specific area. But it also can be a better way for larger, national brand to achieve higher results by recognizing regional strengths, key cities, key accounts and differences in target users.

Who is doing geotargeting and making a difference? Here are 11 goetargeting case studies that prove location is everything.

  1. AT&T: Offered consumers ShopAlerts, which consisted of messages, offers, rewards or coupons sent to their mobile phones when they were near a store or brand. The pilot included eight major marketers, four of which—Del Monte, Kmart, MilkPEP (the Milk Processor Education Program) and SC Johnson. With a nearly 100% open rate on the alerts, 50% of consumers who opted in to receive messages from the brands wanted more information. In some cases there was a 22% to 25% purchase conversion on some of the offers.
  2. ASHEVILLE, N.C.: A river city that sits near the western border of North Carolina, wanted to determine which ad vendors and platforms perform best for inspiring people to visit. Asheville looked at how quickly ad vendors and partners motivate travel to the city. When Asheville aimed ads to residents of nearby Raleigh, N.C., between January and September 2016, the percentage who arrived within seven days was 16.8% higher than the average of all other markets during the same period.
  3. BROWN FORMAN: Maker of Herradura, partnered with Foursquare for geotargeting to let premium spirits drinkers know where the boutique tequila brand is available. During the holiday season, Foursquare used Brown-Forman’s list of “accounts” where the brand is sold to target programmatic mobile and desktop display and video ads for Herradura to people whose mobile devices were found near those shops, bars or restaurants, or had been seen there in the past. Foursquare ads resulted in 23% incremental lift in visits to places selling Herradura among people who were exposed.
  4. FIVE GUYS: Monitored a variety of different hashtags on social media through Hootsuite to react quickly to negative experiences and to reach out to those individuals who are either trying Five Guys for the first time saying they enjoy the food. They respond to messages and improve customer service and sales.
  5. HYUNDAI: Had a sales problem. The brand was falling out of consideration when people went to car dealerships because, the company believed, consumers thought its cars were “staid” and “cheap.” A campaign code-named “Dealer Stealer” was created. The geotargeting process digitally mapped 115 Mazda, 282 Toyota, and 152 Hyundai dealerships. Those who came into proximity of its rival’s stores had their “unique and anonymous” device IDs collected, allowing the display of Hyundai advertising deals on the smartphones of people who were in the market for a Mazda or Toyota. The campaign attracted 815,000 unique eyeballs viewing the ad, according to the case study, with 41,000 people “reconsidering Hyundai as an option.”
  6. LEXUS: 1 in 3 shoppers use their smartphones to search for information when in the market to purchase a new vehicle. The Regional Lexus Dealer Associations set out to target affluent in-market car consumers in the African American and Hispanic communities across four different cities in the US. They executed a mobile-to-store campaign with Walton Isaacson and S4M and was able to boost foot traffic into dealerships by 3.8 times.
  7. PERNOD RICHARD: Which boasts brands including Absolut, Chivas Regal, Jacob’s Creek, and Jameson – had the aim of reaching consumers in transit at airports and driving them to the duty free store. A mobile campaign geo-targeted international terminals and provided travelers with a map and directions to their nearest duty-free store on a customized landing page. Over the month-long period of the campaign, 306 visits into duty-free stores were measured – with 126 incremental visits attributed from the campaign. Monday was the most effective day, generating 20 per cent of visits.
  8. STX ENTERTAINMENT: Aimed to measure the impact of digital ads on ticket sales for “Bad Moms,” a summer comedy featuring Mila Kunis, Kristen Bell and Christina Applegate. STX targeted ads mainly to women aged 18 and over. Women who were exposed to the ads were 22% more likely to have gone to see “Bad Moms” in the theater, and STX saw incremental ticket sales of over 428,000 more tickets for “Bad Moms.” In addition, the campaign turned every $1 spent on digital advertising into $2.31 in incremental ticket sales.
  9. TIMBERLAND: Had the goal to change perceptions of a “boots-only” brand and increase sales of their new boat shoes. Audience Targeting was used to reach young urban fashionistas seeking real adventures, and to drive awareness of the new SensorFlex boat shoe range among this key group. Location Targeting was used to identify those in the market for footwear and those in close proximity to key stores. The campaign generated +25% increase in store visits and won Best Use of Location Services at the Drum MOMA Awards.
  10. URBAN OUTFITTERS: Used dynamic audience filters to deliver messages based on shoppers’ real-world locations. For example, the company sent push notifications promoting party dresses to females who had recently visited bars and nightclubs. The targeted campaign resulted in a 75% increase in conversions and a 146% lift in revenue.
  11. WHOLE FOODS: Placed geo-fences around a number of store locations. Shoppers who entered these geo-fenced areas saw special offers on their smartphones. Whole Foods also took part in a practice called geo-conquesting by targeting ads to consumers visiting nearby supermarkets and encouraging them to come to Whole Foods in exchange for better deals. Together, the campaigns resulted in a 4.69% post-click conversion rate, which is more than 3x the industry average.

Do these case studies show you how effective geotargeting can be? Does your business need help with geotargeting?

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