Tuesday, 26 May 2009

Time for segmentation?

puzzle alarm

There was an interesting article on Wired.com the other week discussing some new research about email send times and how these can be used to derive useful information about individuals.

The article related to a paper by Yahoo Research and Northwestern University entitled “Characterizing Individual Communication Patterns”. They state within the introduction to the paper that:-

Whilst demographic details like gender, age, race, education and income are generally used to segment people, they can be expensive and time consuming to gather and more importantly, are often poor predictors of outcome.

Instead they argue that behavioural data – in the case of this paper email usage – can be a much better way of characterising individuals.

The paper goes on to describe two distinct groups they identified from email usage patterns - particularly time of day - and how these could be used to help in the fight against spam.

What interested me however was the thought of segmenting customers by usage, specifically date and time.

We would normally utilise behavioural data to segment customers, looking at pages browsed, items viewed, goods purchased, stores frequented – anything that indicates you did something. The issue is we typically look at the “something” – not the when or the where.

Web analysis has for a long time utilised time of day (site usage) to help segment people as for many sites - especially those without any formal member accounts - this can be some of the only data available.

A case study for Denmark’s most popular Internet portal Jubii showed that creating profiles based on when customers used the site helped to target online advertising and increase click-through rates by 30-50%.

Within loyalty programmes where we typically have an abundance of both demographic and transactional information – we sometimes discard seemingly less important information like time when creating customer segments.

What this research shows however is that time on its own can be a power profiler of customer behaviour.

It’s kind of obvious at a simple level that time of day would provide an element of segmentation. If comparing retail spend transactions - someone regularly shopping in DIY during the middle of the week is likely to be very different to someone purchasing DIY only at weekends. Both customers show an interest in home improvement but one is more likely to be retired and the other working full time. Of course there may be many other reasons, but this simple example shows how just adding the dimension of time can begin to elicit a wealth of undeclared information.

We have recently experienced this ourselves when doing some research and analysis on a frequent flyer programme. Whilst I can’t divulge the details of the research, what it did show was that rather than what you purchase, it was when and where you made a purchase that was highly predictive of the likelihood of taking out an additional service.

Running a loyalty programme and not using the information it provides, is akin to simply running a deferred discount – and you’d probably be better off just doing that.

However those that do use the data are sometimes in danger of gathering too much information in the hope that it will provide greater insight and I think what this research shows is that it can be a case of less is more.

Certainly early in a relationship, behavioural data will be sparse and declared information limited – using everything you have at this stage including information like time could provide a better way to predict likely future behaviour and fast track these customers to programme benefits earlier.


Xmas said...

Yes , even i have read in the portal Jubii .

Import2sage said...

Demographic details are really useless in making segmentation.

Unknown said...

ugg boots, http://www.uggboot.com.co
ugg boots, http://www.uggsoutlet.us.org
celine outlet online
swarovski jewelry
michael kors outlet
michael kors outlet online, http://michaelkors.outletonlinestores.us.com/
abercrombie and fitch
mulberry uk
michael kors outlet online
nike roshe
giuseppe zanotti
ray ban
moncler coats
longchamp handbags
hermes belt
air jordan 11
jordan shoes, http://www.cheapjordanshoes.in.net/
true religion outlet, http://www.truereligionjeansoutlet.com
christian louboutin outlet
baltimore ravens jerseys
mont blanc
barcelona jersey
marc jacobs
cheap nhl jerseys
hollister clothing store
louboutin shoes
nfl jerseys
new york jets jerseys
true religion jeans, http://www.truereligionjeansoutlet.com
iphone 6 cases

Unknown said...

coach outlet online
giuseppe zanotti shoes
true religion jeans
ray-ban sunglasses
ferragamo shoes sale
michael kors outlet
lululemon outlet
ugg uk,ugg outlet,ugg boots outlet
tiffany outlet
rolex watches
coach outlet
ferragamo shoes
oakley sunglasses wholesale
lebron shoes
polo ralph lauren
louis vuitton outlet
fitflops sale clearance
toms shoes
swarovski crystal
tory burch outlet
michael kors outlet
fitflops clearance
ferragamo shoes
ray ban sunglasses
michael kors outlet online
beats headphones
michael kors outlet
kobe 9 elite
michael kors outlet store
longchamp handbags
michael kors uk
michael kors canada
cheap uggs
longchamp outlet