The Bucket Theory of Marketing

The Bucket Theory of Marketing is an illustration used to explain the importance of the defecting customers. Growth in revenue, or profits over a specific period acts very much like a bucket being filled with water. Adding new customers and increasing the revenue form existing customers fill the “bucket”. Sales, advertising and promotion programs help in pouting business to the top of the bucket. But the bucket also has several “leaks” from customers who stop purchasing or decrease purchases from a prior period. The theory gives a fair idea about the ineffectiveness of our marketing efforts as long as there is a hole in the bottom, which gives way for some customers to leave our organizations for reasons known only to them. The bucket theory also explains why a relationship strategy that focuses on plugging the holes in the bucket makes so much sense.

 

It is more often easy and practical to identify the new customer revenue and the existing customer growth from the accounting database. The information at the individual customer level will give a fairly good idea about the customer migration. 

 

Customer Migration 

The measurement of customer migration is identifying what happens to individual customers during a specific period of time. The individual customer may either totally defect at a high value point in their life cycle. For example, a company can spend Rs. 10,00,000 on a campaign to acquire new customers who may really be valuable only during 2005 or spend Rs. 5,00,000 to retain customers who are profitable now.

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Note that with this command will have only specified the structure of the record for a file which is to contain customer data. Therefore we should have some way of loading the customer records in the CUSTLIST file. For this purpose we will have to type the following command:

 

..APPEND

With this command we get a screen which provides a blank customer record. As the name implies, this command will append a record to our CUSTLIST file. Thus, it can be used whenever we want to add one more customer to customer list. With the customer we can add product fulfillment types. Product given to customer gives them product fulfillment or order fulfillment. We can add any criteria for that.

 

In the screen provided with above command, we now type the necessary details of a customer. The names of the fields are displayed on the screen to facilitate entry of data for a customer for which we wish to create a record in CUSTLIST file. After we type in all the required details about the customer and type e get another blank record in which we can enter data about next customer and so on. When we type right at the beginning of blank record we get back to dot prompt where we can issue a new dBASE III command.

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Each record will have to contain details about a customer. What constitutes ‘the necessary details’ will depend mostly on what use we want to make to this data-base. When we create a customer file through dBASE III package, it will first want us to specify the record structure for the file. For a blinds company who are selling vertical blinds, roman shades products online. When they are creating their DBMS file, their criteria is different than for the company who are providing instant life insurance rates and life insurance quotes online.

 

For a customer file we want each record to have nine fields: one each for the items listed above. In dBASE III, it is necessary to give names to each of these nine fields so that they can be later referred to using these names. The field names which we have chosen are shown in the third column above. Apart from the name, we have to also indicate what type of data will be stored in the field and in certain cases number of characters to be reserved to hold the data for that field. We will want AMOUNTDUE and CRDLMT to hold numeric data and all other fields to hold text or character data. Now let us have a quick look at a dialogue in dBASE III for creating and using such a file.