Kevin Hillstrom: MineThatData

Five Tiers of Email Subscribers

You don't segment email campaigns to better target customers ... there are models / equations / AI to do all of that and do it really well.

You segment email campaigns to understand what is happening.

Segmentation doesn't have to be complicated. Here are five tiers / segments. If a customer doesn't meet the criteria for (1), you move down to (2) etc.

1+ Email Purchase in the Past Year.
1+ Email Click-Through in the Past Year.
1+ Email Open in the Past Year.
1+ Purchase in the Past Year, Not via Email Marketing.
All Other Email Subscribers.

For each campaign, you measure performance by each of the five tiers of email subscribers. Tiers (1) and (2) will generate the vast majority of sales caused by email marketing. Tier (5) is the place where you execute your experiments, because these people are unlikely to open/click so you can try different ideas to see what might work ... if something works, move it up to Tier (4), if it works there, keep moving it up the ladder. Tier (3) is also a great place to experiment with new ideas.

Clients with very good email marketing programs generate +/- 25% of annual ecommerce sales from email marketing. If you aren't there yet, segment customers as outlined above, experiment, and measure results.

MRV in the Wild

Here's a recent email campaign from Macy's.

The $24.99 UGG Throw. That's the place where MRV matters.

Items featured in email campaigns should likely have two key qualities.

A Winning or Contending Item (to boost sales).
High MRV (S-Tier or A-Tier), to boost the future value of the customers who buy the item.

If you want a higher annual repurchase rate and all the loyalty benefits that come with it, why wouldn't you advertise your best-selling items that also cause customers to become more likely to repurchase in the future?

Contact me now (kevinh@minethatdata.com) for a quick $5,000 MRV run, paired with quarterly updates for a year at no additional cost to you.

Let's Try Something!!

I purposely bundle my Merchandise Residual Value (MRV) analysis into my new customer "S-Tier" analysis ... for good reason. It only makes logical sense to market the products that cause customers to become more "loyal" to prospects who are considering buying from you for the first time. It's the biggest "duh" in marketing.

Of course, some of you don't want to spend money analyzing new customers. You just want to know which items cause customers to be more "loyal". That makes sense.

So let's try something. For the rest of the week, I'll charge you just $5,000 for a simplified Merchandise Residual Value (MRV) run ... no writeup or detailed analysis or next steps or recommendations ... and I'll score your items quarterly for the next year. Blog followers only ... you get this opportunity because you've been loyal to me for a very long time.

Contact me now (kevinh@minethatdata.com).

Scarne on Cards

My parents bought this book for me in the mid-70s ... apparently they believed I had potential to be a gambler or loved card games, or both.

Turns out I enjoy statistics. And this book had a story in it that resonated with me in the 70s and the story sticks with me in my day job in 2025.

The author talked about playing a poker game in a casino. Each of six players starts with $100 (the specifics are likely different). At the end of each hand, the dealer would take $2 from the pot as the "house cut", the winner earned everything else. After fifty hands, $100 has been removed from the players. After one-hundred-and-fifty hands $300 has been removed from the players, leaving just $300. Assuming everybody had equal odds of winning, it meant that each player had $50 of their original $100. Everybody was losing money. If somebody was winning, it meant other players were broke.

His advice? Don't play games where the house gets a consistent and repeatable cut. You can't win.

There are times when I look at the profit-and-loss statement of a brand and this story comes to mind. You know the company, they spend 25% of net sales on marketing expenses. Those are dollars going out of the pot, a cut to the house (Google, Facebook, etc). They get money, Shopify gets money, Listrak gets money, your favorite AI vendor is about to get a slice of your pie. In the catalog ecosystem, it's worse, because everybody in the e-commerce ecosystem gets a cut PLUS the paper people get a cut, your printer gets a cut, the USPS gets a cut, your boutique catalog agency gets a cut.

Is it any wonder that I tell you that you need ORGANIC orders, orders that don't happen because of marketing ... and when I tell you that the vendor ecosystem comes-a-fightin'???? They're the casino when the 1-800 number tells the gambler to stop gambling!

I'm not stupid (on this topic). You have no choice but to develop clever stuff that doesn't cost anything. That's your job! That's how your p&l works. That's how ownership keeps things going. That's how your Executive Team earn bonuses. That's how your Manager and Director make a credible living. That's how the analyst gets enough experience to eventually work in a Leadership role.

Profit funds everything.

Think about it this way. You have a $50,000,000 brand that employs 125 people ... 75 of 'em are essentially earning $35,000 a year and the remaining 50 earn an average of $100,000. Multiply that out and it's around $7,600,000 in salary. If your brand is paying 25% of net sales in advertising costs, it means the vendors figured out how to get $12,500,000 while the actual employees ... the very ones who pay the vendors ... are only getting $7,600,000.

On what planet should your "trusted partners" earn 60%+ more than your employees earn? You're the one paying THEM!!!

Your job is to generate ORGANIC orders, orders that happen without the aid of marketing / advertising. Your co-workers depend on you to do that. So does ownership.

Experimentation

Last week I threw a handful of random posts at you ... several links, with the goal being to see what you click on. Is it marketing-related information? Is it analytics-related information? Is it random information?

What was the number one most-clicked link last week?

Crappie Bites.

This is the reason all those data-driven gurus are WRONG. Wrong. Horribly wrong. If I followed all of you down the click-centric rabbit hole I'd be out of business within a month.

Don't do what the data tells you to do.

There's a certain amount of intuition you must have. Many of you possess it. If you are early in your career, you lack intuition, so data is really important. The intuition of your boss/leaders is important, it balances the experience you lack. Yeah, now you see the importance of strong leadership.

But at some point in your career (it's been my experience that intuition becomes important in the 30-35 year old range ... a decade +/- of experience) your intuition takes center stage. You know when you see something (crappie bites) that you shouldn't pay attention to. Or you realize you should do the opposite of what the data suggests.

Somewhere in your fifties a fusion of intuition, calm, and practicality takes over ... you are no longer at the forefront of technology and modern marketing/analytics, nor should you be. You have other gifts that are needed. Individual data points (crappie bites) take on a different meaning. Experimentation becomes more important than testing (this is an important distinction, FYI).

Experimentation is important. You can learn more from experimentation than you can from properly-calibrated tests, especially if you combine your intuition with experimentation results.