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466 Chapter 14
New sales come in
through many
channels.
New S ale
New Sale
New Sale
Ne w Sal e
Ne w Sa le
N e w Sa le
New Sa le
N ew Sale
Only sales with verifiable
addresses and credit
cards become orders.
Or de r
Orde r
O rd er
O rd er
Ord er
Only orders with routable
addresses become
subscriptions.
Su bscrip tion
Su bscrip tion
Su bscription
Only some subscriptions
are paid.
Paid
Subscription
Figure 14.8 The customer activation process funnel eliminates responders at each step of
the activation process.
Each of these steps loses some customers, perhaps only a few percent perhaps
more. For instance, credit cards may be invalid, have improper expiration
dates, or not match the delivery address. The customer may live outside the
delivery region. The deliverers may not understand special delivery instructions.
The address may be in an apartment building that does not allow access,
or the customer may simply not pay. Most of these are operational considerations
(the exception is whether or not the customer pays), and they illustrate the
kinds of operational concerns and processes involved with customer activation.
Data mining can play a role in understanding when customers are not moving
through the process the way they should be—or what characteristics cause
a customer to fail during the activation stage. These results are best used to
improve the operational processes. They can also provide guidance during
acquisition, by highlighting strategies that are bringing in sales that are not
converted to paid subscriptions.
For Web-related businesses, customer activation is usually, although not
always, an automatic process that takes little time. When it works well, there is
no problem. Although it can take a short amount of time, it is a critical part of
the customer acquisition process. When it fails, potentially valuable customers
are kept away.
Relationship Management
Once a prospect has become a customer, the goal is to increase the customer’s
value. This usually entails the following activities: