When You Visualize You Materialize Take Action With Your Customer - - PowerPoint PPT Presentation

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When You Visualize You Materialize Take Action With Your Customer - - PowerPoint PPT Presentation

When You Visualize You Materialize Take Action With Your Customer Data Using Visualization Eileen McDaniel, Ph.D. Freakalytics, LLC http://www.Freakalytics.com 1 What is Data Visualization? Study of the graphical representation of data


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Take Action With Your Customer Data Using Visualization Eileen McDaniel, Ph.D.

Freakalytics, LLC http://www.Freakalytics.com

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When You Visualize You Materialize

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What is Data Visualization?

  • Study of the graphical representation of data
  • Main purpose is to communicate

information effectively

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How Does Data Visualization Work?

  • Maximizes power of the human visual

system:

1. Reduce the amount of information displayed 2. Minimize the amount of attentive or conscious thought processes 3. The viewer can more easily detect patterns, trends or

  • utliers in the data
  • An innovative analysis tool developed with
  • ne goal: making data visualization simple,

effective and broadly accessible

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Excel Default Growth Rate Chart

  • Confusing- value of the data is obscured.

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Total Revenue Esprexos 2009-01 Java Petes 2009-01 Ladro 2009-01 Starjava 2009-01 Toolys 2009-01 Vivace 2009-01 Esprexos 2009-02 Java Petes 2009-02 Ladro 2009-02 Starjava 2009-02 Toolys 2009-02 Vivace 2009-02 Esprexos 2009-03 Java Petes 2009-03 Ladro 2009-03 Starjava 2009-03 Toolys 2009-03 Vivace 2009-03 Esprexos 2009-04 Java Petes 2009-04

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Tableau’s Default Version of Growth Rates

  • Called a “view” in Tableau.

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A Few More Clicks…

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Excel Default Share of Market Chart

  • How useful is the “exploding 3-D pie”?
  • Illustration of “chart junk” and flash over

substance.

Esprexos, 507627.7448 Java Petes, 737529.061 Ladro, 1950295.173 Starjava, 254941.872 Toolys, 151550.6999 Vivace, 777788.2376

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Tableau’s Default Layout

  • Contrast with pie chart
  • Quicker interpretation
  • Key metrics called out

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Road to Visualization

Customer demographic and sales databases from a boutique winery

+ =

Customer-level information vital to managing a dynamic, cutting-edge marketing program

  • Customer Segmentation
  • Customer Lifetime Value (LTV)
  • Integration
  • Strategic Dashboard for Management (Visual report)

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Boutique Winery Case Study

  • West Coast
  • Revenue= $4.1m
  • Strong direct business

– 60% of sales – 87% of gross profit

  • Data “scrambled” for

this demo

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Customer Acquisition

  • Winery’s tasting

room

– sample and buy wine – sign up for emails and newsletters – join the wine club

  • Recent press

coverage brought an influx of casual visitors

<div xmlns:cc="http://creativecommons.org/ns#" about="http://www.flickr.com/photos/lpwines/2759807251/"><a rel="cc:attributionURL" href="http://www.flickr.com/photos/lpwines/">http://www.flickr.com/photos/lpwines/</a> / <a rel="license" href="http://creativecommons.org/licenses/by-sa/2.0/">CC BY-SA 2.0</a></div>

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Traditional Customer Segmentation

  • Winery management identified segments based
  • n observation and experience
  • Traditional Method

– Guidance for broad marketing decisions – Weaknesses

  • Generalizations
  • Hard to measure impact
  • Winery was unable to target specific customer

segments

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Data-Based Customer Segmentation

Enthusiast Casual High Roller Luxury

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  • Developed grouping rules

using customer and sales databases

  • Socio-demographic

traits

  • Purchasing behaviors
  • Goals: segment-specific

advertising methods, products, services and purchasing channels

  • Possible analyses?
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Winery Customers Are Far from Average

  • "Before Segments“

– average customer – net worth of $350,000 – winery sales of $250 – similar to Casual Visitor

  • Luxury Estate and High

Roller are much wealthier than the average customer.

  • High Roller spent the

most by far.

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Who Should Get the Red Carpet in the Winery's Tasting Room?

  • "Before Segments“

– $100 in the first visit – $200 in the next year – Similar to Casual Visitor

  • High Roller: Pull out all

the stops!

  • Luxury Estate needs

personalized attention

  • Mass marketing for

Casual Visitor and Wine Enthusiast.

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The Tasting Room Appears to Be Where the Action Is!

Not surprising- tasting room resulted in highest sales overall.

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Different Channels for Different Segments

Save time and money- Target the right segments!

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Customer lifetime value (LTV): Look beyond response rates into the future

  • LTV is an estimate of future

value based on prior behavior of the individual and similar customers

  • Superior to response rates &

recent purchase data

  • LTV is:

– Tactical -> used to develop a particular marketing campaign – Strategic -> measuring true impact of marketing programs on sales over time – Dynamic -> evolves with new data

The single purchase view LTV- estimate the future

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The Basics of LTV Modeling

  • Simple to Sophisticated!
  • Broad selection of customer behaviors can

be used to estimate value

  • Start with basic metrics and incorporate more

advanced metrics (e.g., early adopters or potential to upgrade services)

  • Each customer is assigned a value rather

than a simple category

  • Possible analyses?

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LTV of the Winery's Customer Base Decreased in 2009

  • Overall, not

good!!

  • Exclude

customers with LTV => 25,000, LTV increased

  • Further analysis

necessary

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The Parts Are Greater than the Whole: Integration of Segmentation and LTV

  • Break down LTV by segment
  • Create a multi-dimensional view of each

customer

  • Maximize ROI from marketing program

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Zoom In on the Crowd- Lower LTV Customers!

  • Zoomed in to LTV

< $3000 (bulk of customers)

  • LTVs for most

customers increased

  • Overall trend line

doesn’t show this- decreases in the high value customers pulled trendline down

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Casual Visitor and High Roller Look Good in 2009!

  • Casual Visitor and High Roller Increased
  • Luxury Estate and Wine Enthusiast decreased, especially

in the high end of LTV 2008 (not shown here)

  • *Crucial to develop different marketing plans for each

segment

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Treat High Rollers Right, but Bring In Casual Visitors by the Busload!

  • Average LTV

– potential value of an individual customer once he or she has been assigned a segment. – e.g., typical High Roller is most valuable customer, verifying customer segmentation analysis-> VIP treatment.

  • Total LTV

– highlights which segments (as a group) have the largest potential sales. – e.g., Casual Visitor is the most valuable group-> offer wine in bulk discounts, etc.

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Call to Action: Divide and Conquer

  • Casual Visitor: marketing efforts from 2008 to

2009 worked

  • High Roller: efforts also successful; perhaps

spend more per customer because they are worth more

  • Luxury Estate: focus not only on obtaining, but

also retaining customers

  • Wine Enthusiast: other issues, e.g., will wait for

discounts

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Strategic Dashboard for Management

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