In the NBA, players are occasionally evaluated on a “+/-” metric. If you come into the game with the score 42-34 and you leave the game with the score 54-44, your +/- is +2 (you were ahead by eight when you came in and you left leading by ten).
In Action Streams, +/- represents a change in customer state.
- A “+” is when the customer does something positive, like visiting your website or interacting with your community or watching one of your videos on YouTube or clicking through an email campaign.
A positive action requires a new Action Stream. If the customer has not purchased in eighteen (18) months and suddenly appears on your website, you suspend your normal email cadence with a new Action Stream. You already do this when the customer abandons a shopping cart. Why not extend the concept when the customer visits your website and looks at low-priced Home merchandise (for instance)?
- Contact 1 = Show customer what the customer looked at.
- Contact 2 = Show customer related products.
- Contact 3 = Your best discount/promotion (since your lust for discounts/promotions requires action).
- Contact 4 = Show customer content options to keep the customer engaged.
In Action Streams, a “-” represents a customer who is about to lapse to a lower / less responsive customer segment.
Remember the segmentation strategy I use to classify customers?
- Elite: 75%+ Annual Rebuy Rate + 12 Month Buyer.
- Loyal: 60% – 74% Annual Rebuy Rate + 12 Month Buyer.
- Quality: 40% – 59% Annual Rebuy Rate + 12 Month Buyer.
- Average: 20% – 39% Annual Rebuy Rate + 12 Month Buyer.
- Struggling: 0% – 19% Annual Rebuy Rate + 12 Month Buyer.
- Lapsed Spend: 12%+ Annual Rebuy Rate (worth spending money on).
- Lapsed Experiment: 5% – 11% Annual Rebuy Rate (worth testing ideas on).
- Lapsed Save: 0% – 4% Annual Rebuy Rate (don’t spend money, they are unresponsive).
Any customer with a “-” is a customer in the lowest percentage point of the band. The customer is about to drop down to a lower segment.
- Example: A Loyal customer drops to a 61% annual rebuy rate. This customer is graded with a “-“. This is your signal to DO SOMETHING to prevent the customer from falling from Loyal to Quality status next month.
In your customer database, you flag any customer with a 76% / 61% / 41% / 21% / Lapsed 13% / Lapsed 6% rate … you flag them as “-“, and then you DO SOMETHING to stop the customer from sliding down to a lower customer segment. You set up an Action Stream to mitigate the demise of the customer.
Does that make sense?
