MARK2038 Data Base Marketing Strategies II Week 7 Instructor: Santo Ligotti Email: [email protected]

MARK2038 Data Base Marketing Strategies II

Week 7

Instructor: Santo Ligotti Email: [email protected]

Today’s Agenda

List ManagementDigital marketingOverview of the Internet Three e-business strategiesHow to evaluate marketing web sitesHousekeeping Discuss Assignment #4 Discuss Group Project

Objectives

In today’s lecture you will learn: List Management and the relevancy that list

rentals play in enhancing 1:1 Direct Marketing initiatives

How to search for lists and determine appropriate targets for either acquisition or retention strategies

Digital marketing Overview of the Internet Three e-business strategies How to evaluate marketing web sites

It all starts with the list

A list is a collection of names and addresses used by direct marketers to target offers.

The list determines: WHO will ultimately receive your message The total number of interactions possible for

the campaign The total projected revenue from the

campaign

List Types and Sources

House Lists

ResponseLists

Internal

CombinedList

RenterA

RenterB

RenterC

CompiledLists

House Lists

House List: an internal list compiled from internal customer records.

Can contain purchase data and purchase patterns

A valuable asset House lists can be “bartered” (traded) with

strategic partners

House List Sources

accounting recordsshipping recordsrecords of inquirieswarranty cardssurvey research results

Response Lists

Response List: an external list made up of individuals who have already exhibited a type of interaction desired by the firm.= “Another firm’s house list”

Examples: Buyer lists Attendee/Membership/Seminar Lists Subscription lists Donor lists

Compiled Lists

Compiled List: an external list that includes records without any previous indication of willingness to respond, but with some defined characteristics.

Examples: Consumer compiled list Consumer lifestyle-enhanced list Business compiled list (directories)

Example: Cornerstone Canadawww.cstonecanada.comOverview

Cornerstone provides creative prospecting solutions, and solutions for designing and executing database management strategies. They help initiate and sustain lasting relationships with your most profitable customers.

Currently, they broker over 1,400 lists containing over 265 million listings

History Founded in 1987, Cornerstone has constantly built on past successes to

become Canada's largest prospecting and database management resource

.

Check out their glossary of termshttp://www.cstonecanada.com/primer/glossary.asp

Check out their industry primers for direct mail, email lists, and merge-purge services

http://www.cstonecanada.com/primer/

Discuss

If you were purchasing a single response list for an upcoming direct mail campaign, which one would you choose?

List A: bought a similar product List B: bought within the categoryList C: bought something by mail

Affinitybought an identical product by mail

bought a similar product by mail

inquired about your product

bought within the category

bought something by mailany other action by mail

Affinity – Another Perspective• Active Customers Active Customers (bought in last x months)(bought in last x months)• Inactive Customers Inactive Customers (bought in > x months)(bought in > x months)• Former CustomersFormer Customers

• Select Prospects Select Prospects (high propensity to buy)(high propensity to buy)

• Other ProspectsOther Prospects

Most Effectiv

e

Least Effectiv

e

RFMRFM

List Management

The role of list managersSelection criteriaSeedingData hygiene

List Management Roles

List renter: the list “buyer”

List compiler: the company or person who compiles the list

List broker (CORNERSTONE): an intermediary who: Maintains list hygiene and suppression Provides recommendations, discounts, etc. Typically paid on a commission basis

Selection CriteriaWhen was the list last updated?How deliverable is the list? (hygiene)What selections are available, and at what cost?What is the source of the list?Is the list owner a member of the CDMA?What is the rollout potential of the list compared to rollout fees? Size and turnover

Selection Criteria - Costs

“Premium” lists contain: Recently verified contacts (30-90 days) Proven mail-order buyers Contacts with highly detailed profiles Hard-to-find customer data

“Bargain” lists contain: Unconfirmed contacts Inquired instead of purchased Names/addresses only

Seeding

Seeding: a common practice by list compilers/brokers of adding disguised names and addresses to monitor list usage.

Data Hygiene

Data hygiene: business processes that maintain the usability of customer data.

Reasons: Non-standard/missing address data Incorrect Name Titles, Gender Duplication Inappropriate Gone away, died

Demonstration - Cornerstone

You are the RESP Product manager at CIBC. RESP are Registered Education Savings Plan that encourage individuals to save for their child’s education with an added 20% contribution from the government. You need to encourage product uptake, but your database lacks information on which of your clients has children. You decide that external list rentals might help you augment your existing data base. You contact your list broker and ask for possible solutionsWhat lists are available?

Digital Marketing-Part I

This week

Digital marketingOverview of the Internet Three e-business strategiesHow to evaluate marketing web sites Assignment 4 handout

The Internet

What is the Internet?Who uses the Internet?Database marketing e-business strategiesRelated tactics

The Internet

The Internet: a global network consisting of millions of interconnected corporate, government, organizational, and private networks.

1. Computers 2. With data3. Users who send and receive the data4. A technology infrastructure to move, create,

and view or listen to the content.

Other Definitions

intranet A private network running internally within a corporation + using Internet standards (HTML, browsers).

extranet An intranet that value chain partners can partially access.

Other Definitions

WebThe portion of the Internet that supports a graphical interface for hypertext navigation with a browser.

More than one Web

1. The Web that most users access from PCs: Low-bandwidth content High-bandwidth content

2. Subsets of the Web with content specially designed for unique devices: Web TV Personal digital assistants (PDA) Cell phones Text-only browsers

Diffusion of TechnologyOr Media Fragmentation, as we talked about last

week, means that the internet has had to evolve to be a true 1:1 mediumUsers demand not only accessibility, but

customizability, it’s no longer okay to just have a great looking web site; people want something that makes them feel its their own spaceSo the internet evolution moves from 1 to many,

to 1:1A difficult task, but a necessary exercise

Internet Users*

15.7% of the global population is connected

= 1.02 billion users

Connected Users Worldwide

ConnectedNot

Connected

Source: Internet World Stats

Internet Users-Canada*

67.9% of the Canaian population is connected

= 21.9 million users

Connected Users Canada

Connected

Not Connected

Source: Internet World Stats

Internet Users: demographics

88% of connected users live in developed nations

Connected Users by Nation Type

Developed

Under-developed


North America, 227.3

Asia, 364.3

Australia/Oceania, 17.9

Latin America/Carribean,

79.9

Europe/ MidEast, 141.6

(millions)


English, 42%

Japanese, 9%

Chinese, 9%

Korean, 5%

German, 7%

Spanish, 7%

I talian, 4%

French, 3%

Portugese, 3%

Other, 9%Dutch, 2%

Internet Use in Canada and E-commerce in the New EconomyStatistics Canada publishes the HOUSEHOLD

INTERNET USE SURVEY (HIUS) on a regular basisThe last published report was for 2003 dataThere was no report published for 2004There will be a report in 2006 reflecting 2005 statistics at the individual level

Internet Use in Canada and E-commerce in the New EconomyIn 2003, based on the last survey

3.2 Million Canadian households actively participated in e-commerce

In total they placed 21.1 million orders, and spend over $3 billion dollars

This represented a 25% increase from 2002 Recent statistics from STATS CANADA show that:

Business to Consumer e-commerce sales were $8.5 billion (an increase of 183.3% from 2003)

Business to Business e-commerce sales were $19.8 billioin

Internet Use in Canada and E-commerce in the New Economy

Wholesale trade $6.14 Billion

Manufacturing $4.23 Billion

Transportation/Warehousing

$4.61 Billion

Retail Trade $2.95 Billion

E-Commerce sales in Canada, 2004, by selected sectors

E-Customers: their demographics

Younger Most users are 18-34

years old 35-44 year olds are not

far behind Age 55 and older use it

the least

More Affluent Households with

above-average income (80% of Canadians with incomes of $80k or more per year) use it.

E-Customers: How they live

Time-pressuredInformation-overloadedMobile, yet connected Customized entertainmentExpanded working hoursDiminished job stability and loyaltyRise in entrepreneurial interests

E-Customers: How they shop online

Self-serveAnywhere, anytime Access to more productsEmphasis on immediate fulfillment of needs and expectationsStrong desire to have a 1:1 experience, and they demand itE-business is not just regular business

E-Business: Major Applications

1. E-communications Messaging prospects and customers

2. E-commerce Selling, logistics, data sharing online

3. E-care Customer service and fulfillment

Businesses Find it Compelling

Many firms have greatly reduced marketing and fulfillment costs via electronic order processing, billing, and e-mail.

An “infinitely scalable” transaction channel

Barriers to Entry

Web site developmentHardware and software Rapid obsolescenceLearning curve

The New EnvironmentMarketers found

customersCustomers find marketers



Local competitionInternational competition

just a click away




just a click away

Price was more static, controlled

Price is more dynamic




just a click away

Price was more static, controlled

Price is more dynamic

Interruption-based Permission-based

“Companies are learning to let customers come behind

the counter and figure things out for themselves.”

- Arthur Middleton Hughes

Strategic Implications

1. Marketers who grasp what Internet technologies can do will be better poised to capitalize on information technology.

Strategic Implications

2. New communication opportunities exist to reach customers beyond the telephone, television, postal mail, or other media.

3. Internet technologies can be integrated into existing marketing strategies, or used to redefine the way marketing is conducted.

Is ALL e-marketing direct marketing?

Direct marketing only occurs when messages are:

(1) ____________,

(2) ____________ and

(3)_____________ .

Personalized

Measurable

Interactive

Common E-Business Models

B2CB2BC2C

Common E-Business Models

Pure play (Amazon.com)Enterprise “Click and Mortar” (FutureShop, HBC.com)Online exchange (eBay)Portal (Yahoo!, MSN)Metamediary (yourshops.ca)

E-Business Models: Commitment

Pure Play

Enterprise

Business Process

Activity

Pure dot-com (Amazon) Click and Mortar (eSchwab, most retailers) Customer Relationship Management Brochureware E-mail

Lev

el o

f bu

sine

ss im

pact

Business transformation (competit ive advantage, industry redefinition) Effectiveness (customer retention) Efficiency (cost reduction)

PURE PLAY: A company devoted to only one line of business

Pure Play Example – Netflix

In the USA, Netflix www.netflix.com rents DVD movies by mail: Customer sets up a “queue” of movies they want

to rent. Customer rents 3+ DVDs at once —no return

deadlines or late penalties. After viewing a movie, customer slips it into a

prepaid return envelope to mail it back to Netflix. A few days later, they receive the next DVD on

their list.

Netflix builds relationships one at a time through customer-driven personalization and convenience.

Typical Strategic Goals

1. Develop e-marketing infrastructure

2. Promote web site as an additional point of contact, not a replacement

3. Migrate customers to the Web

Final Points

1. Next week, no class, intercession week

2. Assignment #4 due June 27th, 2006

3. Work in your group projects4. I will post a detailed marking

scheme early next week

Documents

MARK2038 Data Base Marketing Strategies II Week 7 Instructor: Santo Ligotti Email: [email protected]