Podcast 05: An Intro to Tripwire Marketing: Understanding Customer Behavior and Deviations

Drew Sanocki: Welcome everyone, to the Nerd Marketing podcast; the only podcast on all of the internet where you can hear me, Drew Sanocki, talk to you about eCommerce marketing. My goal here, is to give you 100% actionable information. Give me 5-10 minutes of your busy life, and I’ll give you some proven growth strategies. My name is Drew. Today, we are talking about “Trip Wire Marketing.” Specifically, how you can use trip wires to grow your profits.

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Before I get into that, I have had a heck of a morning. It’s 10am here in New York City, and I think I was up … I feel like I’ve worked an entire day already: Got up at 5, with baby. I got her back down. Woke up again, maybe an hour and a half later, with my son, who’s 3 years old. Had to get him ready for a swim class, which is the last thing you want to do at 7am on a Thursday morning; especially when he doesn’t want to go, either. There’s a lot of fighting going on, getting him in his Swimmi-diap and over to the pool, in the Upper West Side.

A whole other fight occurs in the locker room usually, because he does not want to go down to the pool. All the while you’re surrounded by naked, old guys. I don’t know if it’s a generational thing, but the old-timers just walk around naked all the time. I think they’re a lot more comfortable with that, than my generation. This all fascinates my son, by the way, who is just … It’s just not a good scene in the morning. Get him into the pool, get him out, where of course, again, he doesn’t want to swim. Get him out of the pool, take showers; that’s another fight. Get him to school.

Take an overcrowded subway down to Midtown, where I begin my podcast here, at 10am. I feel like I’ve been up … I have been up for 5 hours already, but you know, that’s life. That’s life as a dad, and I wouldn’t trade it for anything. I mean that. Today was kind of interesting. Let me have another sip of coffee here, before we get into Trip Wire Marketing.

Okay, so Trip-Wire Marketing … The big takeaway for Trip Wire Marketing, I think … By the end of this podcast, I think you will see why changes in your customer behavior represent huge marketing opportunities. That’s my goal. In future podcasts, I think the next 2 or 3, I’m going to get more into implementation, and how to achieve those profits yourself. This one’s going to be a little bit more background and context, just to rehash what got us to this place. Obviously, you run a small business, an online business, you want more profits. I think one of the best ways to get there is to, 1) Define standard customer behavior for your business, and then, 2) Do a lot of marketing when customers deviate from that behavior.

That’s basically what CRM tries to do, for bigger businesses. You can do it, too! It sounds complicated, but, I’m going to give you a couple of stories here. The first would be my son. Anybody who has kids knows that when they’re in the other room and they’re making a lot of noise, usually you’re fine. Then, when they go silent, that’s when the red flag goes up, and when you run into the other room to see what they’ve gotten into. Simple example. That’s the trip wire. The kid goes silent. To put it in business terms, every morning I go to Irving Farm on the Upper West Side to get my cortado. If a day or two goes by and I haven’t gone there, that’s a trip wire.

The Irving Farm should see the standard customer behavior, where I’m going in and buying every day, and then all of a sudden, it stops. Red flags go up there. If you are running a SaaS company, no different. You have trip wires, too. Classic example would be, you see a customer logging in to use your app, on average, once a week, and all of a sudden, it’s been 9, 10, 11 days, since that customer has logged in. That should alert you that something might be amiss; that this customer might be about to cancel his subscription, or her subscription, and move on. If you’re running a content site, trip wire marketing works there, too.

Send out emails every day with a summary of your contents, say, and you see the customer, your reader, opening that email, maybe on average, 3 times a week. All of a sudden, a week goes by and a certain reader has not opened the email. That should be a trip wire to you, that maybe you’re about to lose this customer. All this stuff together is called, Trip Wire Marketing. It really does represent some of the most effective marketing you can do; some of the highest ROI marketing. I should say, it’s about behavior, too, and changes in behavior. In the last episode, we talked about why segmenting off of behavior, and just monitoring behavior, in general, is typically more actionable and important for a digital retailer, or a digital business, than is demographic segmentation.

This is why. It’s because you want to get a model of what your customers do, and conduct some marketing when they deviate from that model. You’re probably asking a couple of questions. First would be, “Why is it so effective? Why don’t I just market to you all the time?” I think it’s because most businesses, all businesses, have at some level, limited funds. Limited funds, and if you’re an entrepreneur with a small business, you’ve got limited energy, too. You want to spend at the point of biggest impact. I’ll give you an example: You have $1,000 a month to spend on customer retention, on your retention marketing. Say you get 1,000 customers a month. You could spend $1 on each, or spend $10, if you can identify the 100 of those customers that are about to defect, about to never buy from you again.

Whereas, the other 900 are going to come back next month. It’s typically a much better use of your time and money, to allocate your budget towards retaining that 100, as opposed to more general marketing to all 1,000 customers. If you are an investor, think of your marketing as a portfolio. Different marketing campaigns, and different segments are going to give you different returns. You might have one marketing campaign, which is this Trip Wire Marketing Campaign, which is called, an “Anti-Defection Campaign,” to keep customers from leaving. Maybe this one gives you $3 for every dollar you spend. This other campaign over here, which is maybe a more general newsletter, this is going to give you a $1.10 for every dollar you spend.

Obviously, you’re going to put your money behind the … You’re going to max out that investment that gives you the $3 for every $1 you spend. The one caveat I’d put here, is I think, if you’re listening to this podcast, you’re interested in marketing, you’ve probably heard of a Win-Back Campaign. Win Back Campaigns are super effective. What they typically involve is, “Okay, this customer of mine, she hasn’t bought from my brand in 6 months, or a year. Let’s send her a little something to pull her back to the site, and try to show her some of our new products, and try to “win her back,” into the fold, to being a good customer again.

They work, and they’re great, but what’s better than a Win-Back Campaign, is an Anti-Defection Campaign. I think we’d all agree, that you want to get to that customer before she’s taken the 6 months to a year off. You want to be able to predict that they are about to defect, that he or she is about to defect. Then market to them, then. If you can do that, it’s a great use of your time. That’s what I’m talking about, here. Setting these trip wires that serve as red flags, and allow you to conduct some very simple marketing campaigns. Second question you’re probably asking is, “Okay, Drew, I get it. Makes intuitive sense to me, but, how do you do it? How do you tell if a customer’s defecting? It sounds complicated, like I need big data predictive analytics, to do this.”

Yeah, that’s what big data predictive analytics do. I’m here to tell you, you don’t need that. We all know that customers don’t raise their hand. They don’t say, “Hey, I’m about to defect. I am about to stop buying my cortado from Irving Farm. I’ve found a better brand over here.” No one receives that email from the customer. You’ve got to be able to study it and predict it, without the customer kind of raising their hand. I guess if they’re going to raise their hand, they raise their hand in their behavior. You’ve got to observe that it’s coming. It’s obviously easier when you’re seeing these customers face-to-face: If you run a gym, a hair salon, or a coffee shop, and you begin to think that, “You know, Drew wasn’t in here recently. Did we lose this guy? Maybe we should market to them?”

It’s a little bit harder online, where you don’t get that face-to-face interaction, but I think you can do it with a spreadsheet. You can identify which customers are defecting, or when behavior is changing, and then you can send out some very simple marketing campaigns, with a baseline MailChimp account. That’s what I want to get into in the next couple podcasts. Really, the tactics of how to implement Tripwire Marketing Campaigns at your retailer, and make a lot of money doing so. I see we’ve run out of time here, on my podcast, and I don’t want to go too in-depth in this one. We’re going to get into the tactics of how you can implement these Trip Wire Campaigns, in the next couple podcasts.

But for today, I just want you to understand that observing these changes in customer behavior, represent real marketing opportunities. Marketing opportunities you can act on, you can automate, and it’s one of the places you can start. Everybody listening to this has limited time, resources, energy, and I’m here to tell you, “This is where you should start.” If you want to cut to the chase quicker, go to my blog, nerdmarketing.com, and opt into my mailing list. I’ll send you the playbook on how to implement some trip wire marketing programs at your own business. Thanks for listening to this episode of the Nerd Marketing podcast.

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If you have any thoughts or questions, or want more information, contact me through my blog, nerdmarketing.com, where you will find all the playbooks and action plans, to make it easier for you to grow your online business. Please, if you have time, review this podcast in iTunes. You do that, you will help me bring the magic of data driven customer analytics to the entire world. My name’s Drew Sanocki, podcasting from New York City. I will talk to you next time.