Customer Acquisition & Retention

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Improving Strategic Execution With Machine Learning

Our 2018 Strategic Measurement research shows that companies using machine learning to optimize business processes and decision-making have distinct advantages over those that aren’t investing in ML. By using ML technology to make KPIs more predictive and prescriptive, these data-driven companies are redefining how to create and measure value.

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Why Customer Experience Is Key for Loyalty Programs

  • Read Time: 6 min 

Loyalty programs provide great value for companies by driving higher sales and boosting brand affinity. However, companies employing traditional “earn-and-burn” rewards programs for customers may miss out on long-term benefits. Tailoring programs to offer great customer experience is key — and when companies implement both types of benefits into their programs, they’re more likely to beat out competitors and build brand loyalty.

Leading With Next-Generation Key Performance Indicators

MIT Sloan Management Review and Google’s new cross-industry survey about key performance indicators (KPIs) asked senior executives to explain how they and their organizations are using KPIs in the digital era. The results shed light on the challenges and emerging opportunities companies face when using KPIs, demonstrate the many ways advanced use of KPIs can benefit organizations, and offer steps executives can take to make the most of KPIs going forward.

Using Analytics to Improve Customer Engagement

The 2018 Data & Analytics Global Executive Study and Research Report by MIT Sloan Management Review finds that innovative, analytically mature organizations make use of data from multiple sources: customers, vendors, regulators, and even competitors. The report, based on MIT SMR’s eighth annual data and analytics global survey of over 1,900 business executives, managers, and analytics professionals, explores companies leading the way with analytics and customer engagement.

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Manufacturers Can Also Win in the Sharing Economy

  • Interview
  • Read Time: 8 min 

The sharing economy isn’t all bad news for manufacturers of big-ticket items such as cars. Research from Carnegie Mellon and UC Berkeley says that manufacturers will sometimes be able to charge higher prices to customers who are planning to rent out those goods. In a Q&A, one researcher says that when there’s heterogeneity in the market, meaning both a high-usage population and a low-usage population, circumstances are ripe for “a win-win-win for the borrower, the owner, and the manufacturer.”

Which Features Increase Customer Retention?

Companies have an incentive to design goods and services with customer retention in mind. Unfortunately, they often add expensive features to their offerings without knowing whether or how much they will increase retention — and adding too many features can actually decrease customer satisfaction with products after customers have used them.

Are You Using the Return on Investment Metric Correctly?

  • Read Time: 3 min 

The biggest challenge with ROI isn’t a technical deficiency but confusion over how it is used. “To calculate ROI accurately, you need to be able to estimate the fraction of profits attributable to the investment,” write Neil T. Bendle and Charan K. Bagga. “In order to calculate ROI, there must be a return (a profit associated with the investment) and an investment. Unless you have both, you cannot calculate ROI.”

How Should You Calculate Customer Lifetime Value?

  • Read Time: 3 min 

Should marketers subtract the cost of acquiring a customer before assessing that customer’s lifetime value (CLV)? Most of the time, no. “CLV is easier to understand, and in our view more useful, if marketers don’t subtract the acquisition cost from their calculation of CLV before reporting it,” write Neil T. Bendle and Charan K. Bagga. “Imagine that a company is selling an old machine. In this scenario, the company’s managers would expect to receive the machine’s current value, not the current value less what the company paid to buy the machine when new.”

Should You Use the Value of a “Like” as a Metric?

  • Read Time: 3 min 

Social media strategy shouldn’t be seen as the driver of value difference between a company’s fans and nonfans. Fans are often more favorable toward a brand to start with than nonfans are — indeed, this is probably what motivated them to affiliate in the first place. As well, social media spending should not be justified by an observed difference in customer value that may not have been caused by social media spending. Instead, to understand social media marketing’s impact, companies should run randomized experiments.

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Should You Use Net Promoter Score as a Metric?

  • Read Time: 5 min 

The net promoter score (NPS) has become one of the most widely used marketing metrics. Consumers answer a simple question (How likely is it that you would recommend X?) on a scale from 0 to 10. Customers who answer 9 or 10 are considered promoters; those who answer 6 or less are rated as detractors. The score is the percentage of promoters minus the percentage of detractors. One of the strongest selling points of NPS is its simplicity. But the value of NPS may depend upon whether a manager sees it as a metric or as a system.

Should You Use Market Share as a Metric?

  • Read Time: 5 min 

Market share is a hugely popular metric. But is it really useful? Companies with superior products tend to have high market share and high profitability because product superiority causes both. This means that the two metrics are correlated — but it does not necessarily mean that increasing market share will increase profits. Using market share as a metric of success simply because other companies do can be counterproductive.

The Metrics That Marketers Muddle

Well-defined metrics are critical to effective marketing. However, despite their widely acknowledged importance, five of the best-known marketing metrics — market share, net promoter score, the value of a “like,” customer lifetime value, and ROI — are regularly misunderstood and misused. This confusion undermines the marketing discipline’s reputation for delivering results. The authors present Do’s and Don’ts for using these metrics and flow charts with detailed advice for developing each metric.

How Well Does Your Company Integrate Demand and Supply?

  • Read Time: 1 min 

An online questionnaire by the authors of the MIT Sloan Management Review article “Integrating Supply and Demand” helps users assess how well their company’s supply chains are helping meet product demand — and serve key customers. The self-assessment lets users rate their companies in five areas in the demand and supply integration spectrum: relevant value focus, integrated knowledge sharing, strategic resource allocation, integrated behavior, and capacity and demand balance.

Showing 1-20 of 89