“L- O- C- A- L” Analytics™

“Keeping It Local” Merchant Solutions

What is “L- O- C- A- L” analytics?

• If you don’t use “L- O- C- A- L” analytics it’s good news because it will definitely reveal important and actionable information for your business

• “L- O- C- A- L” analytics is a methodology we use for data mining and customer segmentation with the purpose of identifying certain customer behavior to improve your business.

We uses five “L- O- C- A- L” variables to answer very important questions for your business:

L = Last time (Answers the question: when is the “Last time” a customer made a purchase from your business?),

O = Often (Answers the question: How “Often” a customer makes a purchase from your business?)

C = Cash or Credit (Answers the question: How much a customer spends in your business?).

A = Analytics ( We analyze your customers and assign a ranking number of 1,2,3,4, or 5 (with 5 being highest) for each of the L- O- C parameters above.

L = Loyalty (We then create a “Loyalty” relationship with you and your customers).

How to use “L- O- C- A- L” analyticsWe put together the first three variables: L- O- C • LAST purchase• How OFTEN they purchased• CASH/CREDIT they spent

We then score your customers referred to as “L- O- C- A- L” Targets

A= analytics chart. We then analyze your “L- O- C- A- L” data

Marketing and Sales Dashboard – Profitability and Market Performance Scorecard

L = Loyalty - We then target your L- O- C- A- L (most loyal) customers

• Non-Loyal Customers: We conducted a case-study and mailed to all 50,000 customers (mass) in the merchants database

• Loyal Customers: We also mailed to only customers in the L- O- C- A- L “target” zone, with response rates that were at least 8.3%.

• Prior to “L- O- C- A- L” analytics a merchant cannot have known which of the 50,000 customers to target.

• Now it allows the merchant to compare the mass mailing or “no targeting” approach to a targeted mailing based on L- O- C- A- L analytics

Comparison between Loyal customers and Non-Loyal customers

The Results?“L- O- C- A- L” Profitability Analytics

Mass Mailing Targeted “L- O- C- A- L” Mailing

(a) A total of 22,731 customers were L- O- C- A- L” targets that had a response rate greater than 0.083(b) The “L- O- C- A- L” targets with a response rate greater than 0.083 contained 3214 buyers•Return on marketing Expenditures = Gross Profit/ Marketing Expenditures

“L- O- C- A- L” Results• “L- O- C- A- L” analytics shows that a mass mailing approach to the

50,000 customers yields a small gross profit of $2,132 or 2.62% of gross sales.

• In contrast, targeting only those customers likely to respond (“L-O-C-A-L TARGETS”), yields a gross profit of $7918.5 or 13.69% of gross sales.

• The L- O- C- A- L approach improves profitability by capturing 71% of the buyers (=3214/4522) while mailing only 46% (=22,731/50,000) of customers.

• The mass mailing approach spends $25,000 on marketing (i.e. cost of the mailing) to generate $2,132 – a return on marketing expenditures of 8.53%.

• In contrast, the “L- O- C- A- L” targeted approach spends $11,365.50 on marketing to generate $7918.50 – a return on marketing expenditures of nearly 70%.

The next phase is to Build Your Continuity Program

• This phase sends the consumer a fresh offer after the initial threshold has been met.

• Now we can build an incentive to continue this behavior or build the next threshold offer

• We’ll target either the LAST time they purchased, how OFTEN they purchased, or the Cash/Credit amount they spent to tailor the offer and thresholds.