What Doesn t Work

What Doesn’t Work

• Creating more than eight or nine segments. Even the largest companies don’t have the marketing staff to think up and implement unique marketing programs for lots of different segments. If you have divided your database into 10 or more segments, you have made a serious mistake.

• Forgetting to create and use control groups. An advertising agency created a “frequent user” segment with special benefits for a client. The client spent more than a million dollars promoting to the segment, and it seemed to work. After 2 years, the client asked the agency to provide the value the client had received for the million dollars. Unfortunately, there was no control group, so the agency could not provide this information. The agency lost the account.

• Not revising your segments after each promotion. We are supposed to learn something from the segments. If you just promote and promote, and never revise, you may be wasting your money and not learning anything.

• Collecting a lot of data about customers that you never use for any thing. Everything has a cost. Getting and updating data is expen sive. Every time you add a piece of information to your data base, ask, “How are we going to use this to make money? How can we use this right away to modify customer behavior?” If you haven’t got a good answer to these questions, don’t collect and store the data.

• Spending too much on building a data warehouse that will never pay its way in terms of increased sales through promotions based on the data in the warehouse.

• Creating segments that are self-fulfilling or that do not allow your creative team to create a significant differentiation.