04 Normal distributions
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A standard normal probability distribution lets you compare customer events - contacts, responses, visits - and forecast how likely each is to happen. Charting your interactions with customers as a bell curve lets you understand what your customers do most of the time.
The curve is shaped to reflect a mean of 0 and a standard deviation of 1. 68.2% of your interactions fall within one SD; 95.4% fall within 2SDs; and 99.7% fall within 3SDs. Outside that come 'Black Swan' events (Taleb, 2007): low-probability events with a high-impact outcome that can only be understood after the event.
Understanding the circumstances in which black swan events happen can help your marketing, by knowing the conditions in which shocks affect your business and being ready to neutralise them. Next comes 05: the loyalty cube.
Back to toolbox
A standard normal probability distribution lets you compare customer events - contacts, responses, visits - and forecast how likely each is to happen. Charting your interactions with customers as a bell curve lets you understand what your customers do most of the time.
The curve is shaped to reflect a mean of 0 and a standard deviation of 1. 68.2% of your interactions fall within one SD; 95.4% fall within 2SDs; and 99.7% fall within 3SDs. Outside that come 'Black Swan' events (Taleb, 2007): low-probability events with a high-impact outcome that can only be understood after the event.
Understanding the circumstances in which black swan events happen can help your marketing, by knowing the conditions in which shocks affect your business and being ready to neutralise them. Next comes 05: the loyalty cube.