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Al Bessin, Executive Vice President
4 October 2011
Affordable Databases: Can You Afford Not To Be Using a Marketing Database
Agenda
• Consumer Behavior• Marketing Databases• Fundamental Needs for All Marketers• Examples
Trends: Consumer Behavior, Economics and Marketing
Message and Contact Complexity
• Advertising• Direct Mail• Email• Catalogs• Targeted Ads• Search• Marketplaces• Social Media• Affiliates
The Rise and Fall of Free-Wheeling Consumer Spending
The Housing Bubble: a promise of infinite return on
investment
Seemingly Infinite Credit
Birth of the Spandex Wallet
Today’s Competitive Challenge• Reduced disposable income• Reduced credit
Who is the competition?
The Challenge
“Catalog”
Internet
Stores
Silos Order Method
Call Center
Website
Stores
Marketing Media
Catalog
SEO/SEM
Advtsg
Social
Affiliate
Lack of Clarity
Lack of Integrated Marketing Planning
• Competing reporting schemes
• More demand used to justify marketing expense than total demand for the enterprise
Total Demand
9
Marketing Databases
Convergence of Traditional DM with Ecommerce
One DimensionalCustomer-Centric
Transaction Centric
TraditionalDirect Marketing Online Marketing
Multi-DimensionalCustomer Centric
Optimizing the Customer JourneyC
usto
mer
Val
ue
Average
High
Time
Low
Target Acquire Retain Grow
First Purchase
Up-Sell
Dialogue Optimized
Develop
Need to Support Push and Pull Marketing
13
Catalog
Flyer
SEO SEM
SEO
SEM
The Bar Is Being RaisedC
usto
mer
Val
ue S
egm
ents
Prog AC$$$
$$
$
C1
Universal Segmented BehavioralCa
mpa
ign
#1
Cam
paig
n #2
C2
C1 C2
C1 C2
C C
Prog A1C
C C
Prog B1C
C C
Prog BC
C CProg C
C
C C
Optimizing Campaigns Not all customers are created equal Target the best audience groups based on contact history Move beyond conventional RFM segmentation Market according to purchase preferences
Core Segment, Individual Product Buyer, National Account Determine which offer to use for selected audience Optimize the marketing mix based on customer preferences
Catalog? Direct Mail? Outbound Calling? Key Account Rep? Emails? Banner Advertising? Facebook?
CREATIVE MESSAGE CHANNEL CONTACT MEDIAOFFER AUDIENCE
The Bottom LineOptimize • Balance marketing spend• Multiple media• Return on investment• Tailor to type of contact
16
Steps for Marketing Database
Customer Intelligence Requires Marketing Strategy Examination
• Strategy defines needs• Strategy today is not strategy
tomorrow• Seasonal business comps annually
… so, start with discovery of both technical requirements and strategic requirements
Identify Your Data Sources and Elements
• Contact Information – all channels– Resolve email opt-ins to the database
• Promotional History – all channels• Transactional history• Website Reporting• Third Party Feeds
Normalize Data
• Apply Hygiene to resolve account duplication
Resolve Channel Demand
• Remember that this is a modeling exercise
• Retain input elements
Aggregate Data Logically
• Apply experience and aggregate data to facilitate reporting
• Don’t rely on information systems staff to do this – this is a marketing exercise!
Resolving Multiple Channels
Allocation/Attribution
History
• Source Code Collection• Matchbacks to Mailings• Last Touch Reporting• On-line Media Vendor Reporting• Last Touch Plus Push Reporting• Attribution
24
Essential Beginning: Apply Hygiene!
• Waterfall model• Provide allocation windows for
Push Campaigns• Collect referring source for
transactions
At a Minimum
26
Demand Allocation Model
AllocationRules
•Developed tools to allocate campaign results across competing media
Order Management Feed Allocation Model OutputReporting Channel Demand Allocated Demand by Medium DemandCatalog $371,587 Catalog $527,742Website $322,694 Email $108,128Advertising $18,245 Paid Search - Brand $7,843Email $89,435 Paid Search - Competitive $45,889
Total $801,961 Natural Search - Brand $8,457Natural Search - Competitive $86,384Comparison Shopping Engines $0
Google Analytics Feed Advertising $17,518Allocated Demand by Medium Demand Total $801,961Paid Search $85,971Natural Search $134,674Comparison Shopping Engine $0Other $191,484
Total $412,129
Tips
Essential Beginning: Apply Hygiene!
Time is your enemy……think quick wins as well as big wins!
Use the 80:20 Rule and beware of Opportunity Cost
3030
Now! Future
31
Any response measurement scheme is a model – there is no perfect system
Direction appears long before absolute clarity
Test
Make testing part of every marketing strategy and plan
32
Test A
Test B
Control
Separate Branded from Competitive terms when evaluating Search results
33
“Stroller”
Examples
The Promise of Channel-Agnostic Customer-Centric Data
Key Intelligence
• Which media drive acquisition, retention, and reactivation
• Your cost to acquire new buyers by medium
• The “lifetime” value of buyers and how it differs by medium
• Merchandise performance by medium
35
Acquisition Costs by Channel
•Optimizing acquisition efforts requires and understanding of how much different media cost initially
36
Buyer Value by Acquisition Media
37
Rebuy Rate
38
Order Value Analysis
Merchandise Reporting by Medium
40
Which channels drive categories?
Product Category Cross-over
• Identify combinations of Product Groups that buyers are grouped around
41
• Develop your marketing strategy• Define and collect data feeds• Apply intelligent hygiene and normalize the
housefile• Push through the demand allocation• Aggregate marketing data intelligently• Test and adjust
Summary – Steps to Take
42
…Get experienced help
Important!
• Know your data (or get to know it!)• Clean up historical data
– Source codes and campaigns• Organize and Categorize
– Think how data roll up to give you overview• Set time aside to do this right• Get strategy input
Pitfalls to Avoid• Not Having team and executive commitment• Data not clean• Trying to manage too many disparate elements• Not testing allocation variables• Mixing attribution and allocation improperly• Biasing results to meet goals
Fastest to react, most confident to act
Lowest advertising costs, highest return on marketing investment
Ability to target the best, limit contact to the least interested
Customer differentiation
Database marketing will get more difficult and sophisticated
The company with the best data and account intelligence will win!
