Saturday, August 1, 2009

Past and Current customer behavior are the best predictors of Future customer behavior

Past and Current customer behavior are the best predictors of Future customer behavior. Think about it. Any entity you can define as a
customer – external, internal, distributors, manufacturers, suppliers – they all pursue certain routines, and changes in these routines often indicate an opportunity or challenge is ahead in your relationship with them. When it comes to action-oriented activities like interacting with a web site, this concept really takes on a very important role. You can predict future behavior based on an understanding of past behavior, and use this knowledge to improve marketing or service programs.

Take these two groups of potential buyers who surf around the 'Net:
People who are a perfect demographic match for your business, but have never made a purchase / subscribed to a service online
People who are outside the core demographics for your business, but have repeatedly purchased / subscribed to a service online
If you sent a 20% off promotion to each group, asking them to visit and make a first purchase, response would be higher from the buyers (second bullet above) than the demographically targeted group (first bullet above).
It works because actual behavior is better at predicting future behavior than demographic characteristics are.

High ROI Customer Marketing Tactics!

Go beyond using simple customer demographics to start looking at past customer behavior, the most reliable source of data for predicting the potential value of a customer and their likelihood to remain a customer.  When you nail down these behavioral metrics and start measuring their trends, you will be able to:

* Identify customer segments with the highest future potential
* Focus on growing the profitability of middle potential customers
* Stop wasting resources acquiring and marketing to low potential

Once you identify these groups, you can manage their value by:

* Emphasizing the ads, media, and products creating long term high potential value customers and downplaying ones that don't

* Creating High ROI marketing programs that maximize customer value by increasing sales while lowering expenses

* Predicting when best customers are about to leave you and reacting with customer retention and save-a-customer programs

* Quantifying the profitability of marketing and operational initiatives by linking them to potential customer value

what is Google Analytics?

Google Analytics is a free analysis tool which gives you information on where your website visitors are coming from, which pages they visit, how long they stay, and a lot more. There are plenty of paid stat counters available which present data in different ways, but Google Analytics is one of the best, and it's free.

One can over-analyze or under-analyze any website. Some people spend too much time checking stats, analyzing, and planning, and don't spend enough time writing good content and getting new readers to their blogs.

On the other side of the pendulum, you could go on week after week, blindly publishing content and flailing along with offsite promotíon, without seeing what results your campaigns are getting, which type of content is the most popular for your visitors, and which traffic-generation techniques are getting the best results.

In between, we have a happy balance.

1. Find out which of your website's pages are getting the most traffic, and optimize those pages.
2. Find out which referrers are generating the most traffic, and continue any actions you have been taking to generate traffic from those referrers.
3. Find out which keywords you are ranking the best for, and see which ones you can "push to the top."
4. Find out which pages keep your visitors' attention for the longest.
5. Look at the graph of your bounce rate.