An iconic brand in the retail arena, Sears has been observing a drop in retail sales in a large number of stores that it has. Towards the end of year 2011, it announced the closing of 120 locations that saw a drop in sales by 5.2% in the 8 weeks ending on Dec 25th. This is after closing 171 stores in the US since 2005 when Sears and Kmart merged. The retail chain has been seeing 18 quarters of reducing sales.

Sears obviously needs to take a hard look at their retail strategy and make some pertinent and hard changes. According to this article, the belief is that the new retail strategy needs to marry in store tactics with the latest technology to be able to get the maximum benefit. If the new management that took over when Kmart and Sears were merged feels that they have been providing good service, then one only has to look at a video taken by a retail blogger. The mystery customer went to various departments trying out products without meeting any store personnel. He passed various employees that did not even acknowledge the customers presence, let alone greet him. There were hardly any customers present in the store as well. It therefore did not come as a surprise that all products were marked at 50 to 60 percent discount.

Store Maintenance
Retail marketing experts state that a retail outlet needs to spend at least $8 per square foot per year to ensure adequate maintenance of the floor. It is estimated that in comparison Sears spends about $1.9 per square foot per year. There is obviously no doubt that with this kind of spend, the Sear stores are likely to lack luster and even cleanliness. It has been noted that many of the Sears stores are dingy and dark. Increasing store spend to the recommended amount and ensuring aspects such as proper LED lighting, point of purchase displays, can help customers feel better about the shopping experience. Go to Sears in Plaza las Americas in Puerto Rico, now that is a nice store!

Innovative Sales Staff
Sears staff is in no sight and when you find one, they’re not really helpful. The need therefore is to first bring back the basics in and then build on them to create sales staff that is engaging. Sales personnel to greet everyone who enters the store, trained sales people who take interest in customers by assessing their needs and customer service as a priority for sales people are essential. Instead of asking “How may I help you?” how about saying “Now that’s a lawnmower that will have your neighbors talking”.

Mobile, social, one step ahead
Retail brands are leaving no stone unturned to connect with their shopper using wireless connectivity, smart phones and social media too. Getting mobile number details from loyalty program members and using them as an entry point for contests and sweepstakes can help integrate platforms. Social networking platforms such as Twitter and Facebook need to be used extensively. Local updates can also be posted using Google Places so that relevant news can be supplied to customers. Being afraid of what the customer will say on these social platforms is not going to help. Accepting feedback positively and managing the issue can help turn over a new leaf.

Product Research
Retail is all about having the right product, at the right place and the right time and at the right price. Sears CEO Mr. D’Ambrosio recognizes this which is why now sales staff and other employees will be carrying iPads to record many customer interactions and feedback given. They’ll also invest in online portals and make sure all feedback gets centralized and understood in order to make better decisions regarding product selection.

Business Intelligence
In retail when there are numerous categories, thousands of brands and millions of sku’s, there is a huge need to use business intelligence software to understand the manner in which the customer is swinging. BI products can look at trends in sales across various regions, stores, customer demographic profiles, seasons and external information related to the category and arrive at how the market will move. With Mineful for example, they can analyze large amounts of customer data and offset emails and triggers to make sure to interact with customers with the right offering and at the right time.

Using these in store and technology innovations can help Sears get back on track. The decline has continued for too long and unless it pulls up its sleeves to get the house in order, it may never recover.

The speed at which technology and eCommerce are changing makes it hard to keep track. But if you have to stay with the times, change we must. The Coremetrics retail data from IBM tells us that online sales were up 16.4 percent on Christmas day this year. Some of the most significant changes that 2011 has seen in eCommerce are:

1. mCommerce
Mobile commerce has been around for a while. But mobile commerce seems to have exploded in 2011. During the Thanksgiving holidays, the proportion of online sessions that were initiated from a mobile device was 18.3 percent of the total online sessions. This is an increase of 117.8 percent. Out of these sessions that started via mobile devices, 14.4 percent completed the sale. Some of the mobile commerce statistics are astounding:

• a. On Cyber Monday about 10.3 percent people accessed a retailer site via a mobile device.
• b. The use of mobile devices to find a store is as high as 65 percent.
• c. Accenture has released a report that estimates that 79 percent of smartphone users downloaded mobile coupons as they walk to the store.
• d. Mobile retail apps have been downloaded by 43 percent of those who use mobile devices for shopping.
• e. Lightspeed Research states that 56 percent people believe that a mobile can enhance a shopping experience.
• f. More than 13 million people access retail content on their phone and more than 8 million of these visit mobile commerce sites.
• g. Juniper Research has estimated that the mobile commerce market will reach $12 billion by 2014.

2. Social commerce
A large number of marketers have realized the importance of being on social platforms. Among the various things that social networks are used for, seeking opinions about a future purchase from friends is common. There is active discussion on statuses posted to find out if anyone has had any experience with a specific product before making a purchase. Social networks therefore have become a standard feature of the buying process. These may be used to get suggestion for review, to get feedback, to find places to buy or any other information that one of your many friends may have. More than half the people say that they are more likely to make a brand purchase that was recommended by a friend.

One in thirteen people on Earth are on Facebook and when someone likes a brand Facebook page, they get access to brand updates. More than half the people who like a brand page say that they are more likely to recommend the brand to a friend. More than a quarter of fans read news and updates related to brands and 34 percent interact with their brands on Facebook too. Luxury brands like Burberry, Ralph Lauren and more are also making an appearance on social platforms.

Starbucks used the social platform to launch a new line of luxury coffee and create talkability about the brand. Uniqlo actually brought social networking on to their site by asking consumers which feature they would want on the site rather than putting up a standard ‘Under Construction’ message.

Many more innovative options are being discovered by brand marketers. One great idea is to create a mobile application allows people to write reviews about the product that they have just experienced, earning points or rewards in the bargain.

3. Retailer sale policy
The number of US retailers offering free shipping has been increasing. It is estimated that 9 out of 10 retailers were offering free shipping during the holiday season. Around Thanksgiving, 64 percent of the online orders had free shipping in 2011 in comparison to the 55 percent last year, However, this ‘perk’ has become hygiene as people tend to drop out when they realize that free shipping is not part of the deal during check out. The bonus now seems to be ‘free shipping on returns’ as well.

‘Returns at no cost’ is another trend that seems to have caught on. One of the most significant reasons for not purchasing items such as shoes and dresses online was apprehension with regards to size. This has been overcome by busy professionals ordering for 2 sizes and then retaining the size that fits best.

4. Increasing importance of video
Another trend is the use of video in order to entice customers or to deliver product information. This is a trend that is also being aided by mobile shopping since watching a video is far easier than reading content or product descriptions in small print. According to Internet Retailer those who watched a video on the product pages of Stacks and Stacks were 144 percent more likely to add the product to the shopping cart. This trend was apparent in 2010 too when Internet Retailer reported that the chances of a buy were higher by 85 percent when visitors watched a video. Zappos, an online retail company that uses product videos for some products on its site saw a 6 to 30 percent increase for the products that had a video. The computer company Dell feels that service calls were reduced by 5 percent due to video. The same drop was 14 percent for Virgin mobile. Another website Shoeline.com saw a 44 percent increase in online conversions.

5. Email marketing
For many years email marketing has now been blamed as one of the least efficient of online marketing tactics. The reasons have been spamming and relegation to the trash folder. However, email marketing has made an appearance again in the new avatar. It is not only about lead generation but about the manner in which you use the lead. Responsys Inc states that email marketing was up 16 percent in 2011 as compared to 2010. However, the fact still remains that for efficiency, the email messages have to be designed well and need to be relevant for the target audience.

If there is one thing I love, it’s getting inside a brand new car. The scent, the lights, the gadgets, and of course turning the engine on for the first time. It’s exhilarating!

With our newly release, I hope that it will bring you just as much delight as taking the new car for a spin. I’m very excited to welcome you to the new Mineful. Go ahead, turn it on. Let us know how it feels.

So, what’s new?

More ways to connect your data
We’ve added the ability to upload data from two e-commerce platforms, Shopify and Yahoo. By leveraging the API these platforms provide, now you can start analyzing your store’s data in minutes. 70% of an analyst’s work is uploading and cleansing the data, we do it for you. For those online retailers not using Shopify or Yahoo, you can push data using our REST API.

Email Triggers
It’s automatic! Create rules to trigger different messages based on customer lifecycle and behavior. For example, send a survey 7 days after a purchase. Trigger an offer 30 days after an initial purchase, trigger a stronger offer if there hasn’t been a purchase in 90 days. Send a reward to clients who pass a certain threshold of total purchases. Combine them: send an email when one of your most important customers rates your service poorly or their likelihood of attrition is above a certain number. The possibilities are endless…

Lifetime Value Dashboard
Keep track of your customer metrics and see how they change over time. In real-time, track customer lifetime value, retention rates, average purchase, purchase frequency, number of customers saved, and overall satisfaction. If Mineful works, this dashboard will reflect it. You can also see email response metrics and compare templates to optimize your email offerings and content.

More Help
You’ll find a new redesign of our help pages focused on instantly helping you make the most out of Mineful. From start to end, you will find everything you need to put the foot on the pedal without having to log in.

Coming Soon…
This new edition of Mineful is just the foundation and there’s plenty to do. Next will come the important pieces that will make Mineful the most powerful analytical tool on the web.

Things to look for are more connectors like Volusion and Magento. More metrics in the lifetime value dashboard and the ability to segment those metrics by customer attribute.

We’ve now laid the groundwork to allow you to take action on your data — but this is only the beginning.

It’s going to be a wild ride, and we’re glad to have you with us.

Jaime Brugueras
CEO and Co-Founder

Customer lifetime revenue is the total amount of revenue that a customer is likely to get in for the company.

The computation of the customer lifetime revenue is relatively easy:

Customer lifetime revenue = average purchase amount x purchase frequency in a year x number of years customer is expected to stay

or in exponential form with a yearly discount rate

CLR = Total Revenue per client * (r/(1+d))

where r is the retention rate and d is the discount rate.

It is also important to keep in mind that if your product has serviced the customer well, there is a likely chance that the estimated volume of purchase per cycle and therefore the estimated average amount per purchase occasion increases over time. However, this is something that also depends on the category in question. The number of sanitary pads that a woman purchases in a month is not likely to increase just because she is satisfied with the product. However, the share of wallet on some multi brand categories is likely to increase over time with higher levels of customer satisfaction.

Customer Lifetime Value
Simply put, customer lifetime value of a customer can be defined as the value of the customer to the business. This pertains to the total value that the customer can bring to your business across a specific period of time. Factors that need to be taken into account to calculate the lifetime value of a customer include the amount of money being spent on the customer for acquisition and retention. In addition to that there is also the aspect of the referral value of a satisfied customer in terms of good word of mouth. The lifetime value of a customer therefore needs to be a summation of the profit that she or she is likely to bring to the business and the referral value too.

Computing the lifetime value of customer is not easy. It needs to take various aspects into consideration.
Estimated customer lifetime value – (Customer lifetime revenue – customer lifetime cost) + expected number of referrals x expected value of the referred customers)

Some businesses however do not like to add in the referral value of a customer in the overall computation since it can bring in duplication over a period of time. Therefore the calculation is limited to:

Estimated customer lifetime value – Customer lifetime revenue – customer lifetime cost

The customer lifetime cost can be calculated by looking at the profit per sale and the number of times purchase has been made.
Knowing the customer lifetime value helps in assessing the amount of money that you should be spending on certain segments of customers in order to retain them. It helps in ensuring that the return on investment of specific customers is high and in accordance with the kind of returns that the company is looking at.

A company can use the values of lifetime value by categorizing people into various groups based on the level of lifetime value – high medium and low. These people can be profiled based on their categorizations and once you know the specific types of people in each group, the company shall be in a better position to spend the marketing budget in the right direction. This data can also be used to plan invites to high profile events and loyalty programs.

Customer Lifetime Value or CLV is one of the best ways in which the objectives of the company can be defined for the year. Defining the company objective based on CLV can help in ensuring that the future of the company is also being taken into account and that the marketing strategies being developed are not merely short term and tactical.

Efforts of the sales force can also be defined in keeping with the customer lifetime value so that you can be sure that you are keeping the high value customers happy and content.

Brad Anderson has written a great piece about Mineful. After meeting him in Dallas, Brad and I exchanged a couple of emails and had a few phone conversations. His description of what Mineful is and how it helps our clients is unparalleled.

Starting from the title, “Be Mindful of Mineful” to his story of how Mineful came to be and ended up in Dallas startup incubator Tech Wildcatters program is very interesting. All our features and benefits are explained very simplistically.

Finally, he ends by inviting everyone to Pitch Day coming on Tuesday, December 6th at the Magnolia Theater in Dallas. The event will also be live streamed at ustream.tv. We’ll get a post up here with the live stream.

Read Brad’s article “Be Mindful of Mineful: A brief in predictive customer retention“.

This post talks about the business intelligence industry and how some changes are needed to serve small and medium size businesses. It is written by our CEO Jaime Brugueras and posted on SoftwareAdvice.com. Enjoy!

http://blog.softwareadvice.com/articles/bi/whats-lacking-in-business-intelligence-software/

In short, Retention Automation uses analytics to take action and reduce churn.

Companies spend thousands of dollars on lead generation. Inbound marketing, marketing automation, and advertising fills up a bucket with new customers. But they are trying to fill a bucket with holes. Customers are leaving. These solutions do nothing to retain customers and keep them inside the bucket.

What are companies doing to retain customers?
One of two things: analytics or mass email. Email software (even though sometimes they are segmented by customer type) sends mass emails to everyone hoping that the latest offers brings customers to shop again. Most of these efforts are futile because they are not addressing customer issues, just rather pushing products in the consumer’s noses.

Other companies doing more advance analytics are looking at charts. Like our video says, charts of all types and charts you’ve never even heard of before, but there is a huge gap between predictive analytics and action.

5 Steps to Retention Automation
Retention Automation surfaces customers at risk and optimizes actions to bring customers back to your store. There are 5 steps needed to complete in order to benefit from this process:

1. Connect data. Solution needs to leverage cloud connectors in order to get sales, customer, feedback, and web data all in one place.
2. Predict. Acting before it is too late is the key. Data mining algorithms predicts the steps customers take before churn, once determined, it allows a company to act at step one or two, not after 180 days of inactivity, too late.
3. Alert. There might be some customer issues you want to take care of your self at a customer level. For example, top 5% is “extremely dissatisfied” with service.
4. Action. Which action to best take: email, phone, tweet? Which email works best? Send, measure, learn, optimize.
5. Segment. You know your business better than anyone else even better than data mining algorithms. Therefore, you should be able to segment and automate. The system should then self-learn and resend to new customers the most successful messages to each segment.

What’s the benefit?
Companies on average lose 25% of customers every year. Let’s suppose your company has 30,000 customers. This means that your company is losing 7,500 customers a year. If it costs you $100 to acquire a new customer it means that you are spending $750,000 a year only to maintain the same number of customers year over year!

What happens if Retention Automation reduces churn rate to 22%? It’s saving 900 customers from going to your competitors at $100 each is a return of $90,000 saved. What if churn reduces to 20%? The point is that the result is directly measureable and companies will know quickly if their investment is worth it.

That’s one way to measure. You can use customer lifetime revenue as a measure of how much you lost. Since retention automation focuses on the most important customers first, the value is even greater.

Contact us to set up a quick demo and show you how Mineful can help your company surface customer issues and retain its most important customers.

There is nothing wrong in trying to retain customers using various tactics that there are. However, what is futile is to believe that the customer is a fool and that he will fall prey to strategies that you have created. Marketing efforts to retain customers work only if they are genuine and if they provide real value to the customer. Some of the customer retention and loyalty tactics that you can use include:

a. Be truthful with your customers – It is important that they start seeing you as their partners in fulfilling the need that they have rather than an entity that is interested in making money off them.

b. Provide full information – Having fine print that is likely to spring itself after the sale is made is likely to leave a bad impression on the client. While hiding information may help you get a sale for the first time, retention will definitely be a challenge.

c. Confidentiality – In the world where privacy can be invaded at the drop of the hat with Internet access and more, maintaining confidentiality of the customers is something that they appreciate to a large extent.

d. Service orientation – Each and every client likes to be pampered and considered special. When you go that extra mile to please and delight customers, you are sure to ensure customer retention.

e. Flexibility – Large organizations are often associated with inflexible rules and policies that they will not budge from. Make exceptions at times and you will make the customer feel wanted and special.

f. Loyalty enhancing tactics – Use loyalty programs, special discounts and more to achieve short time loyalty as you build up your image with regards to the above mentioned aspects.

g. Study defectors – Make sure to understand and study the defectors that do leave your brand or company. You will be able to categorize them into price defectors, product defectors, service defectors, market defectors or technology defectors. When you know where the issues is you can quickly devise strategies to plug the hole.

With the large number of options that customers have today, it is becoming increasingly tough to hold their attention. The situation is so competitive that the minute they leave your website, your store or your office they are at a risk of being pried away by your competitors with some new marketing gimmick, tactic or strategy.

If you have had the good fortune of acquiring some customer and doing business with them once, you must make sure that they continue to come back for more. The need of the day is to block competitors away. However, you cannot stop the competition from approaching your customers. Therefore, you must work on your customers in order to ensure that competition cannot take them away.

The whole idea is to engage in customer loyalty marketing so that you can ensure that the customer is no longer open to the ideas that competition puts forward in front of them. By providing the best offering that the customer may want, you can change the state of mind of your consumer. It requires a receptive mind to listen to what customers are saying.

The essential steps to ensure customer retention and loyalty have been listed here. These three steps of customer loyalty marketing can ensure that your relationship with the customer becomes so strong and invulnerable that it becomes everlasting.

1. Personalized and customized communication
The Internet allows us to be far more personal than ever before. Avoid techniques that club all the customers into one large group. Segment your customers with demographics, behavior, and opinion data and then target them with the words that they want to hear. The level to which you segment depends on the kind of clientele that you have and the base that you service. If your clientele is extremely up scale and you have a few customers that give the company a large amount of profit and revenue, then individual attention and communication is necessary. In such one-on-one marketing the marketer needs to have specific information about the client’s preferences, so that you can identify the needs, differentiate your services, interact with the customer and then customize all communication accordingly.

2. Real time customer engagement
Time is extremely critical in the whole process of customer loyalty marketing. A slight slip or delay can cause competition to be on your back trying to snatch away all your clients. What marketing people need is a system that can help alert them immediately about specific aspects to look into. One does not have the luxury to wait for the month’s aggregated report to come through in order to take overall decisions. High speed analytics that can offer immediate information that needs action is the essence of the day. Delivering such speed in terms of all offerings requires the entire company to be in tune with the culture of the company so that there are no delays ever – even of a split second.

3. Customer retention and satisfaction
Customer retention is one of the aims of customer loyalty marketing and customer satisfaction is one of the various metrics that leads to a better understanding of retention. While satisfaction is a measure, retention is the goal that needs to be achieved. When you indulge in customer loyalty marketing, you focus your energies and marketing budgets towards the customers that you have. With increasing competition, stagnant or mature markets and the rising cost of reaching out to new customers, customer retention and loyalty have become extremely important. It is not right to assume that customer satisfaction is enough to achieve customer retention. It is possible to have high customer satisfaction and yet lose a customer. This is something that can happen if the product category is a low involvement product or there are various substitutes that are possible or even when the cost of switching is low.

Mineful, an analytical application focused on customer retention, today announced that Chief Executive Officer Jaime Brugueras will present at the 2011 O’Reilly Strata “The Business of Data” Summit, to be held September 20-21 at The New York Marriot Marquis. Brugueras’ presentation is part of Strata Launch Pad where 5 companies got selected to get on stage and tell the world what they’re up to.

Brugueras will discuss the big gap that exists today with analytics and benefits and how Mineful is bridging this gap by using predictive alerts and actions to retain customers. Viewers will also get an ‘under the hood’ look at Mineful’s algorithms and how they are giving e-commerce websites a competitive advantage and higher customer lifetime values.
For more information on the 2011 O’Reilly Strata ‘The Business of Data’ Summit, please visit http://strataconf.com/summit2011/.

About Mineful
Mineful helps companies use data to retain customers. No reports! An analytical application that takes action when it identifies patterns of disloyalty and dissatisfaction. Mineful integrates with major CRM and e-commerce platforms, uses its algorithms to detect customers at risk, and then provides the communication tools needed to entice customers to buy back from you. For additional information, go to http://www.mineful.com/.

UPDATE: Here is the presentation