Mark Jeffery keynote at MassTLC marketing analytics summit

Data-Driven Marketing: Leveraging analytics for 5X performance gains in marketing

Mark Jeffery Agile Insights LLC and the Kellogg School of Management [email protected]

© Agile Insights LLC, 2012, All Rights reserved

Data-Driven Marketing: Leveraging analytics for 5X performance gains in marketing 4/26/12 2


•  Mo<va<on •  Research •  The 15 essen<al metrics •  Analy<cs case examples

–  Retail (B2B), Manufacturing (B2B), Pharmaceu<cal Sales (B2B)

•  ROI for analy<c marke<ng •  Where do you start?

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1. Brand Awareness 2. Test Drive 3. Churn 4. CSAT = Customer Sa<sfac<on

Essen%al Opera%ons Metric

Essen%al Financial Metrics

Essen%al Value-‐Based Marke%ng Metric

Essen%al Non-‐Financial Metrics

10. CLTV = Customer Life<me Value

6. Profit 7. NPV = Net Present Value 8. IRR = Internal Rate of Return 9. Payback

5. Take Rate

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11. CPC = Cost Per Click 12. TCR = Transac<on Conversion Rate 13. ROA = Return on Ad dollars Spent

Essen%al Web Site Performance Metric

Essen%al Search Engine Marke%ng Metrics

14. Bounce Rate

15. WOM = Word of Mouth Essen%al Social Media Metric

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•  The Business –  Major US general merchandise retailer with over $30 Billion

revenues –  Direct mail more than 250 Million catalogs per year. Targe<ng

14 -‐ 18 Million customers. Spread over 18 separate mailings. –  Genera<ng incremental sales of $900 Million per year.

•  Business Challenge –  Exis<ng campaign selected the top 40% of customer

households, •  Based on Recency, Frequency & Monetary values •  Geographic Versioning

–  The mailings generated significant sales volume… –  However, the ROI was NOT mee,ng the company's

expecta,ons

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•  New strategy –  Split the targeted customers into 25 dis<nct segments, based on a robust

series of variables, ahributes and purchase characteris<cs –  Version the mailers, based on products & categories relevant to the various

groups –  Eliminated strict cutoff that included only top 40% of customers (RFM), but

instead captured "up-‐sell" opportuni<es among lower value customers with upside poten<al

•  Results –  Increase in mailer revenue of $215 Million dollars per year, based on improved

targe<ng and campaign management •  1% improvement in number of trips generated among mailed customers •  5% improvement in average purchase dollars per trip •  2% improvement in gross margin, as "right" product featured captured sales without

reliance on 'off-‐price' promo<ons

–  Catalog Targe<ng project alone had an NPV exceeding $40MM

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Source: Russel Walker, Kellogg School



•  We don’t know how. •  We don’t have the right metrics.

•  We don’t know where to start.

•  The problem is not too lihle data; quite the opposite, we have lots of data but none of it is useful.

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•  A marke<ng divide exists between organiza<ons that do data-‐driven marke<ng, use marke<ng metrics and analy<cs, and those that do not.

•  The 15 essen<al metrics quan<fy the vast majority of marke<ng ac<vi<es

•  Research shows that firms that ‘keep score’ for marke<ng and use analy<cs have significantly beher financial and market performance compared to those that do not

•  Measurement combined with analy<cs drives 5X or more performance gains

•  There is a systema<c approach to develop a data-‐driven marke<ng strategy: You don’t need 100% of the data to get started

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