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A new way to look at customer activity

Marketers segment customers based on a number of factors that usually boil down to “how much do you spend with us?” Important segments may include “visitor” and “purchaser,” or they may identify a customer as “High Average Order Value (AOV)” or a repeat purchaser. The more sophisticated models will understand that you are “in-market,” that you are a valuable prospect because you are currently shopping for a car, or recently had a child, or whether your Meyers-Briggs score is ENTP or INTJ. Some will look reality in the face and segment a customer as “likely to churn.” Advocate Marketing is aligned with these segments to the extent that the goal is to drive more consumer behavior and measure revenue impact. But unlike traditional direct marketing and merchandising segments, Advocate Marketing focuses on the consumer activities that drive value, not just transactions. What is a share worth? How about a referral? Is it valuable when a consumer rates or reviews a product? These are all extremely valuable activities that are not typically captured by traditional transaction-based segmentation. Advocate marketing segments attempt to understand all valuable activity, and recognize those consumers whose total activity drives the most value to your brand, including traffic, influence, awareness, purchase proclivity, and countless other forms of social proof, confirmation, and influence. An effective segmentation strategy recognizes distinct behavioral groupings with the purpose of crafting programs that maximize activity. At the broadest level, these groups include the following (note, all segments are based on 12-month period):

• Transactive Customers - Anyone that has purchased (you may recognize this as “Active Customers”)
• Advocates - Any consumer with a recognized brand-enhancing activity including refer, rate, share, invite, etc.
• Revenue Driver - Any advocate whose behavior has resulted in a transaction by another consumer
• Superadvocate - Any advocate who has driven 3 or more conversions
• Influencer - An advocate with a social following in excess of 10,000 people
• Affiliate - An advocate that is not a recognizable customer.

This is not an exhaustive list, but gives a sense of the nuances. We could also include “Super-sharers” or other variants. Why Do These Segments Matter? A segment is useful if it enables you to optimize marketing behavior for a desired outcome. For example, if I know that men like shopping on Tuesdays and women on Wednesdays, then I could subtly change my email campaigns and site to deliver targeted messaging during those periods. The key questions are:

• Can I recognize that a given consumer is in a given segment?
• Can I target content and programs that are tuned to motivate that segment?

The Extole advocacy segments were created strictly to deliver on both. The criteria for tracking different behavior types are clear, and since most participants self-identify, we can use their personal information to track and reach them. We can recognize a participant’s segment by using the Extole reports. Programs and Segments You can capitalize on segments by using programs, which enable rules, content, targeting and measurement. An ordinary refer-a-friend campaign may have a 20%/20% reward, limited to 5 referrals per participant, and be promoted to everyone on an evergreen basis and has generic program content. In the course of the program’s operation, you recognize that 10 participants have reached their referral limit, and it is clear that they are superadvocates. You can then create a second program for them that removes the referral limit, but also changes the reward to cash value ($20/20%). At the same time you see that a few of the advocates have a substantial following and assign them custom share links in a new Influencer program. Read more about influencer programs here and the influencer program page here! In each case, you are trying to tailor the campaign to enable the highest volume of non-fraudulent activity.