The Significance Of Consumers' Crazy Buying To Marketers

At present, the most popular way of marketing and customer value is to generalize the consumption behavior of customers through the RFM model, that is, the latest consumption, consumption frequency and consumption amount. That is to say, using all the information about customers in the hand to calculate the data of customers in the following three aspects, namely, when, when and how much is the most recent consumption?

This is a basic indicator for most companies to measure valuable customers and other customers.

My research found that this is not all the characteristics of customers. The RFM model should also add the letter "C", which represents the degree of concentration, indicating that some customers have certain rules of purchase behavior.

For a long time, customers will follow certain rules when buying items like orange juice and diapers.

But concentration refers to the fact that people rush to buy goods.

This period of centralized purchase can reflect some distinctive characteristics of customers, who may be extremely valuable customers.

The important conclusions drawn from my research are easy to understand.

Imagine assuming that you want to predict who will be valuable customers in the future.

You have four indicators that you can use to predict, which I mentioned earlier: the latest consumption, consumption frequency, consumption amount and marketing on customers.

This is a scoring model designed by many companies.

But I think you need to add one more indicator, that is, concentration -- how high the concentration of customers is.

This index is as easy to calculate as R, F and M indicators. It can be completed in Excel, and it can be calculated quickly, and it can calculate one hundred million customers' data in one second.

My research also found that in the experiment, customers with high concentration of purchase have higher value in the future. Even after using the RFM model and marketing cost analysis, the same conclusion can be reached.

This shows that we have found another variable about customers. Companies should follow up this variable and use it to predict the value of customers in the future.

Two of the conclusions of the study surprised me.

First, I discovered that the RFM based model has existed for many years. At present, many companies are using it, and in this sense, it has been identified as helping explain.

The simplest means.

You can search all kinds of websites, and you can also set up many other variables, but concentrating this variable is the easiest.

So first of all, to my surprise, concentration has never been noticed. In other words, hot selling and cold spell can reflect some characteristics of customers.

Another surprise to me is that from the data I analyze, this concentration is applicable to electronic and online consumer goods, and is not suitable for regular mass consumer goods.

In other words, I can understand why the traditional model is suitable for conventional mass consumer goods, because consumer behavior of buying toilet paper and orange juice is regular, but consumption on website Hulu is irregular.

There are no rules for consumers to auction on eBay or buy books on Amazon.

I think this is probably the most practical research I have done in my 20 years of career.

I prefer to refer to my work as complex and complex statistical modeling.

This work is not only about statistical modeling, but also related to data concentration. Today, companies can do practical calculations without collecting additional data. They can be calculated using data similar to those calculated for R, F, M and customer lifetime values.

This model can be used to determine.

The value of the forecast will vary, and your knowledge of the value of the customer will be changed.

I have come to the conclusion that although highly concentrated customers are not stable, they are still the most worthy of recovery.

If you win these customers again, they will become highly concentrated and will spend a lot of money in the future.

So I think this model is of great practical value.

The charm of this model can be seen from my website. There is a Excel form listing some successful cases.

You can download this form and use the concentration degree to analyze it from today.

What new laws, procedural changes or strategies can you draw from your research?

Nowadays, many people are talking about big data.

I like big data, but I want to say that there is something more satisfying than big data, that is, data concentration.

Data enrichment means that you can now collect thousands of variables from people and find out the source of these variables, what items they buy, and what web pages to browse.

But this can not be called science, it is simply collecting data.

The question is what information is really useful to solve the business problems in front of us? That's what I say

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Therefore, I regard concentration as a supplement to traditional variables such as RFM, marketing activities and similar activities, and a form of data concentration.

I want to emphasize that you need to master more data, not just concentrate things to three variables, but to concentrate into four.

I have done a lot of research on concentration, and I know that it exists in various industries and has predictive value.

But I don't know what brought about concentration.

I associate marketing activities with concentration.

The company can make you spend your money by sending you an email, sending a picture album, and setting you a target customer.

Although I know the existence of concentration, there has been no research on the best way for the company to locate its target customers.

For example, I have never paid attention to whether a consumer will have a higher concentration in the purchase of a series of products.

Just imagine what it would be like to watch the "poisoned master", "mad man" or a series of similar videos.

For example, when a company tries to sell facial care series, moisturizing series and other similar products, will it package all products into a suit so that it seems to have the meaning of people struggling to achieve a goal?

I know how to perform mathematical operations on concentration, and I know that this is insignificant for a company, but it is foreseeable.

But I don't know how to explain it in psychology, which is what I have studied with other colleagues in consumer psychology.

We will conduct a lot of behavioral experiments in the laboratory to try to get the psychology behind people's concentrated behavior.