Data Driven MarketingSeptember 17, 2012

iSummit

Bernie Borges, CEO Find and Convert

Three Eras of Modern Marketing• Creative era

• 1960’s and 70’s• Advertising centric

• e.g., The Marlboro Man, Where’s the Beef?

• Direct era• Database marketing direct to

the consumer• 1% conversion rates =

profitability • Relevance era

• A relevant message to each customer segment in the relevant channel

It’s All About Relevance

• 1978 consumers 2,000 ad messages/day• 2007 consumers 5,000 ad messages/day• 2010 consumers 16,000 ad messages/day

95% open rates

possiblewith highly

relevant messaging

5% open rate typicalwith irrelevant

messaging

The Cost of Irrelevant Messaging

• 64% of consumers say promotional offers dominate both email and traditional mail everyday• Only 41% view these as relevant communications• Of the 91% of consumers that opt out of brand’s emails 46% defect from the brand due to irrelevant messaging

The Cost of Irrelevant Messaging

• 41% of consumers say they would consider ending a brand relationship owing to irrelevant promotions• An additional 22% say they would defect from the brand relationship due to irrelevance• 58% of brand’s marketing content is not relevant to potential buyers, reducing brands’ chances of a sale by 45%

The customer is in control and knows it!

The Power of Data Driven Marketing

The data (precision) marketing framework relies heavily on several key factors, starting with the collection and analysis of data.

Analyzeand Model

DetermineObjective

Deploy

Gathe

r Dat

a Strategize

Measure

Why Brands Don’t Do Data Driven Marketing (DDM)

• Difficulty collecting relevant data about customer preferences and behaviors• Difficulty acting on customer data to predict customer needs and propensity to purchase• Difficulty executing highly relevant messages/offers that align with customer interests• Difficulty measuring results

DDM Business Results

• Increased revenue• Customer retention• ROI in marketing expenditure

Forces Behind DDM

• Economics• Consumers affected by

down economy scrutinize purchases

• Customer loyalty is more important to brands than ever before

• Marketing budgets are under heavy scrutiny in C suite

Forces Behind DDM

• Intensifying competition• Lower barriers of competitive

entry in digital age• Competitors experimenting with

social media, email, content, behavioral marketing campaigns

• The WOW factor…Consumers expect to be wowed…

Forces Behind DDM

• Advancing technology• Business analytics• Marketing automation• Marketing optimization

It’s All About the Customer

Relevance will close the chasm between creative and direct marketing, leveraging customer insights to produce truly valuable content and communication that engages the buyer through highly relevant customer touch points.

Tesco ClubcardA Lesson in Customer Retention via DDM

Tesco Clubcard

Analyzeand Model

DetermineObjective

Deploy

Gathe

r Dat

a Strategize

Measure

Objective: Customer retention and loyalty

Tesco Clubcard

Analyzeand Model

DetermineObjective

Deploy

Gathe

r Dat

a Strategize

Measure

Gather data: Clubcard sign up, transactional touchpoints.

ClothingBankingFood & WineTelecom/ElectronicsEntertainmentHealthcareRecyclingHouse & home Home efficiencyTravelMotoring

Tesco Clubcard

Analyzeand Model

DetermineObjective

Deploy

Gathe

r Dat

a Strategize

Measure

Analyze & Model: 10% of data gives 90% accuracy.

Relative priceBrandingEthnicity

Finer food: 19%Healthy eaters: 17%Traditional: 15%Convenience: 9%Mainstream: 24%Price sensitive: 16%

Tesco Clubcard

Analyzeand Model

DetermineObjective

Deploy

Gathe

r Dat

a Strategize

Measure

Strategize: Develop relevant messaging strategies.

Customer retentionCustomer reactivationCustomer growth

Tesco Clubcard

Analyzeand Model

DetermineObjective

Deploy

Gathe

r Dat

a Strategize

Measure

Deploy: Using DDM Tesco offers tailored/relevant promotions based on customer’s behaviors.

Tesco Clubcard

Analyzeand Model

DetermineObjective

Deploy

Gathe

r Dat

a Strategize

Measure

Measure: DDM allows results in sales lift.

16 million membersAcross 12 countries.

20 to 40% overall redemption rates!

Quarterly vouchers = 98% redemption rate!

Moneyball Marketing at Tamp Int’l Airport

Objective: Attract more direct routes to major cities

1 new non-stop air route to major city has $154 M economic impact, 1200 jobs.

Moneyball Marketing at Tamp Int’l Airport

Objective: Attract more direct routes to major cities

35% of Pinellas hotel guests rented cars in Orlando

Tampa, St. Pete, Sarasota effective buying rate of $96B

TPA is within 1 hour drive for 3.5 million people

Moneyball Marketing at Tamp Int’l Airport

Objective: Attract more direct routes to major cities

More than 30 Tampa Bay companies do business with Switzerland.

24 Swiss companies like Nestle SA, Credit Suisse Group AG and Zurich Financial Services that have subsidiaries in Tampa Bay.

Many European travelers fly to Orlando but end up in Tampa Bay: 35 percent of Pinellas beach-goers rented cars in Orlando.

Moneyball Marketing at Tamp Int’l Airport

Tampa International Airport has secured new daily routes to Cuba and Switzerland this year. British Airways also added two flights a week and now flies daily.

DDM: A Matter of Survival

SourcesPrecision Marketing by Sandra Zoratti, Lee Galagher

http://precisionmarketingbook.com/

SourcesCMO Council, Why Relevance Drives Response and

Relationships; Using the power of Precision Marketing to better engage customers, 2009.

Michael Cannon, Nine Silver Bullets to Increase Marketing’s Relevance, Silver Bullet Group, Walnut Creek, CA 2010

The Economist, A Special Report on Managing Information, February 2010.

Jenny Davey, Every little of data helps Tesco rule retail, Sunday Times (London), October 4, 2009

Tampa International Airport playing its own version of “Moneyball,” to bring in new business, Tampa Bay Times, September 2, 2012

Bernie Borges

CEO, Find and ConvertTransformational Digital Marketing

bernie@findandconvert.comhttp://www.findandconvert.com