Ddm 2006 E Commerce

Direct & Database MarketingDirect & Database Marketing

E-Commerce: E-Commerce:


E-Commerce & DDM:E-Commerce & DDM:

Internet (remembering e-business class)Internet (remembering e-business class) Behavioural TargetingBehavioural Targeting Data management systemData management system Evolution of strategyEvolution of strategy



Cases & Articles:Cases & Articles:

1.1. About Lands’ EndAbout Lands’ End

2.2. Lands’ End TargetingLands’ End Targeting

3.3. Lands’ End CSM Lands’ End CSM



Cases & Articles: AMHCases & Articles: AMH

1.1. How the web has changed database marketingHow the web has changed database marketing

2.2. Customer relationship marketing on the web*Customer relationship marketing on the web*

3.3. Customer service on the webCustomer service on the web

4.4. How to measure success on the webHow to measure success on the web



Cases & Articles: Amazon.comCases & Articles: Amazon.com

1.1. Amazon Case 1Amazon Case 12.2. Amazon 2004 Annual Report (Intro)Amazon 2004 Annual Report (Intro)3.3. Amazon PR Coinstar Gift CertificateAmazon PR Coinstar Gift Certificate4.4. Amazon PR eBookAmazon PR eBook5.5. Amazon PR Weekly SeriesAmazon PR Weekly Series



Cases & Articles: eBay.comCases & Articles: eBay.com

1.1. eBay CSFB PresentationeBay CSFB Presentation2.2. eBay Skype AcquisitioneBay Skype Acquisition3.3. eBay Presentation ChinaeBay Presentation China4.4. eBay Annual ReporteBay Annual Report5.5. eBay JP Morgan PresentationeBay JP Morgan Presentation


““The New Direct Marketing is an information The New Direct Marketing is an information driven marketing process, made possible by driven marketing process, made possible by database technology, that enables database technology, that enables marketers to develop, test, implement, marketers to develop, test, implement, measure, and appropriately modify measure, and appropriately modify customized marketing programs and customized marketing programs and strategies.” strategies.”

New Direct Marketing, 3New Direct Marketing, 3rdrd Edition, by David Shepard Associates Edition, by David Shepard Associates


Database Definition:Database Definition:

A marketing database is a comprehensive A marketing database is a comprehensive collection of interrelated data serving collection of interrelated data serving multiple applications, allowing timely and multiple applications, allowing timely and accurate on-demand retrieval of relevant accurate on-demand retrieval of relevant data, and having a data management data, and having a data management system independent of application. system independent of application.


Key aspects:Key aspects:

Interrelated dataInterrelated data Multiple applicationsMultiple applications Data management systemData management system


Alternative Definition:Alternative Definition:

A marketing database is a list of customers A marketing database is a list of customers and prospects records that enables strategic and prospects records that enables strategic analysis, and individual selections of analysis, and individual selections of communication and customer service communication and customer service support. That data is organized around the support. That data is organized around the customer. customer.


Introduction: Commercial Databases:Introduction: Commercial Databases:

What external commercial databases areWhat external commercial databases are Who operates themWho operates them What they consist ofWhat they consist of What direct marketers use them forWhat direct marketers use them for The process of management of external The process of management of external

databasesdatabases


Segmentation Analysis:Segmentation Analysis:

Customer profiles Customer profiles Customer needsCustomer needs

Targeting new prospects based upon existing Targeting new prospects based upon existing customer profilescustomer profiles

Source of lists of prospects for new market or Source of lists of prospects for new market or product/service developmentproduct/service development


External databases, marketer uses:External databases, marketer uses:

Want to add (expand) data about existing Want to add (expand) data about existing customerscustomers

Understand existing customers betterUnderstand existing customers better Want accurate profiles of intended targetWant accurate profiles of intended target Compile a list of interested individualsCompile a list of interested individuals


External databases:External databases:

Consists of records of individuals, available for Consists of records of individuals, available for sale.sale.


External databases:External databases:

Geodemographic databasesGeodemographic databases

Lifestyle databasesLifestyle databases


Geodemographic: Geodemographic:

Often based upon government run censusOften based upon government run census Profilers perform cluster analysisProfilers perform cluster analysis Match with postcodeMatch with postcode May append with data from additional sourcesMay append with data from additional sources Allocate description of “typical” household Allocate description of “typical” household

profileprofile


Lifestyle databases:Lifestyle databases:

Attitudinal dataAttitudinal data Opinion dataOpinion data Lifestyle dataLifestyle data Product purchase dataProduct purchase data Current brand & product preferencesCurrent brand & product preferences Great research and segmentation toolGreat research and segmentation tool


Profiling process:Profiling process:

Step 1:Step 1:

Matching process of client’s internal data with Matching process of client’s internal data with commercial database datacommercial database data

Geodemographic: can match via postcodesGeodemographic: can match via postcodes Lifestyle: can match individual names & Lifestyle: can match individual names &

addressesaddresses



Step 2:Step 2:

Client’s matching records are appended with Client’s matching records are appended with data from commercial database, to make a data from commercial database, to make a more complete record.more complete record.



Step 3:Step 3:

Matching records used for research &/ Matching records used for research &/ segmentationsegmentation

Clustered descriptionsClustered descriptions Reveal customer segmentsReveal customer segments



Step 4:Step 4:

For new market targeting:For new market targeting:

Identification of “lookalikes”Identification of “lookalikes”

Generate prospect listGenerate prospect list

(DDM commercial databases provide major efficiency (DDM commercial databases provide major efficiency advantages)advantages)


Issues regarding “conventional” versus Issues regarding “conventional” versus database market research:database market research:

CostCost AccuracyAccuracy RepresentativenessRepresentativeness

Collaborative (combined products)Collaborative (combined products)


Economics:Economics:

The cost versus benefit of use of commercial The cost versus benefit of use of commercial databases:databases:

Exhibit 4.4; page 92-92Exhibit 4.4; page 92-92


Strategic Options:Strategic Options:

Market penetration:Market penetration:

Lists of competitors’ customers based upon Lists of competitors’ customers based upon purchase behaviourpurchase behaviour

List of prospects generated from profiles of List of prospects generated from profiles of existing customersexisting customers


Strategic Options:Strategic Options:

New product development:New product development:

External data used for marketing new productsExternal data used for marketing new products

New market development:New market development:

A new type of customerA new type of customer


Commercial Databases:Commercial Databases:

Examples:Examples:

ClaritasClaritas

ExperianExperian


The Database - Interactive Marketing’s Essential The Database - Interactive Marketing’s Essential Difference:Difference:

who our customers arewho our customers are what they buywhat they buy leads to what they want from usleads to what they want from us how much they are worth to ushow much they are worth to us

= create relationships over time= create relationships over time


Handling Customers ‘Over Time’ :Handling Customers ‘Over Time’ :

The customer database allows you to The customer database allows you to understand your customers history with you understand your customers history with you and so predict their future needsand so predict their future needs


Database marketing: customer focusDatabase marketing: customer focus

– get to know customer because you start get to know customer because you start recording your transactions with themrecording your transactions with them

– company initiates contact that invites a company initiates contact that invites a responseresponse


Direct & Database Marketing: Direct & Database Marketing: – Uses mass media when addressing new prospectsUses mass media when addressing new prospects– Uses personal media-direct mail, telemarketing, Uses personal media-direct mail, telemarketing,

when developing relationships with existing when developing relationships with existing customerscustomers

– Focus on customers, rather than productsFocus on customers, rather than products get to know customer because you start recording get to know customer because you start recording

your transactions with themyour transactions with them


Example:Example:

Why Databases Fail (.ppt)Why Databases Fail (.ppt)

CRM Strategies in Healthcare (.ppt)CRM Strategies in Healthcare (.ppt)

Customer Acquisition & Modeling (.ppt)Customer Acquisition & Modeling (.ppt)

Data Mining Data (.ppt) pp1-48Data Mining Data (.ppt) pp1-48

Data Mining 101 PP-34-77Data Mining 101 PP-34-77


Gartner Group:Gartner Group:

““Data mining is the process of discovering Data mining is the process of discovering

meaningful new correlations, patterns and meaningful new correlations, patterns and

trends by sifting through large amounts of trends by sifting through large amounts of

data stored in repositories, using pattern data stored in repositories, using pattern

recognition technologies as well as recognition technologies as well as

statistical and mathematical techniques.”statistical and mathematical techniques.”


Segmentation & Targeting:Segmentation & Targeting:

Use purchase behaviour to segment by customer valueUse purchase behaviour to segment by customer value Use purchase behaviour to segment by product needUse purchase behaviour to segment by product need Use profile data to relate to campaign response (ROI)Use profile data to relate to campaign response (ROI) Use profile data to target new customers accuratelyUse profile data to target new customers accurately


ApplicationsApplications

Setting budgetsSetting budgets

Understanding customer’s valueUnderstanding customer’s value

Understanding existing customers as individualsUnderstanding existing customers as individuals

Targeting “spend” to maximize ROITargeting “spend” to maximize ROI

Profiling existing customers to target new Profiling existing customers to target new prospectsprospects


Applications/Techniques utilizedApplications/Techniques utilized

Setting budgets: use LTV analysis to set Setting budgets: use LTV analysis to set allowable marketing spendallowable marketing spend

Understanding customer’s value: use FRAC & Understanding customer’s value: use FRAC & LTV analysisLTV analysis


Applications/Techniques utilizedApplications/Techniques utilized

Understanding existing customers as Understanding existing customers as individuals: use profiling modelling techniquesindividuals: use profiling modelling techniques

Targeting “spend” to maximize ROITargeting “spend” to maximize ROI

Profiling existing customers to target new Profiling existing customers to target new prospectsprospects


Data Sources:Data Sources:

List purchaseList purchase Data-building schemesData-building schemes Introduce new contact channelsIntroduce new contact channels


Data Sources: Direct contact companies:Data Sources: Direct contact companies: On-line inputOn-line input Customer service department recordsCustomer service department records Responses to DM communicationsResponses to DM communications Accounting recordsAccounting records Billing systemsBilling systems Sales transaction records/order processingSales transaction records/order processing


Data Sources: Indirect contact companies:Data Sources: Indirect contact companies: Product registration, warranty dataProduct registration, warranty data Credit card detailsCredit card details Subscription detailsSubscription details Questionnaire responsesQuestionnaire responses In-store offer detailsIn-store offer details Requests for product informationRequests for product information Events/promotions requiring a responseEvents/promotions requiring a response Direct channels establishedDirect channels established


Data Management:Data Management:–Manage the data sourcesManage the data sources–Manage the data entry Manage the data entry

verification, validation, de-duplication, merge-verification, validation, de-duplication, merge-purgepurge

–Manage the databaseManage the database In-house, outsource?In-house, outsource?

–Manage the applicationsManage the applications


Direct & Database Marketing: Direct & Database Marketing: measurementmeasurement– Marketers analyse behaviour to predict best Marketers analyse behaviour to predict best

responding people & the best offers to makeresponding people & the best offers to make


Direct & Database Marketing:Direct & Database Marketing: Is more expensive, on a per-customer basisIs more expensive, on a per-customer basis

A way of buying a closer relationship customerA way of buying a closer relationship customer– First individual informationFirst individual information– Subsequent precision & control in customer contactSubsequent precision & control in customer contact

I.e., Marketers analyse behaviour to predict best I.e., Marketers analyse behaviour to predict best responding people & the best offers to makeresponding people & the best offers to make


A Complete System of Marketing:A Complete System of Marketing:

market analysis and researchmarket analysis and research segmentation and positioningsegmentation and positioning making an offer making an offer creating relationshipscreating relationships

… … are all done within a database marketing are all done within a database marketing frameworkframework


Reasons for growth:Reasons for growth:

Business:Business: Ever more competitionEver more competition Drive for cost-effectivenessDrive for cost-effectiveness Interest in consumer retention & loyaltyInterest in consumer retention & loyalty Continuing drop in computer processing Continuing drop in computer processing

costscosts


DDM Advantages:DDM Advantages:

Lead gradingLead grading Customized targeting at the right timeCustomized targeting at the right time New information & past results help New information & past results help

formulate strategyformulate strategy


DDM Advantages:DDM Advantages:

Information can drive new programs & fuel Information can drive new programs & fuel new revenue sourcesnew revenue sources

Information can foster new new services & Information can foster new new services & generate repeat ordersgenerate repeat orders

Ongoing communication efforts can Ongoing communication efforts can increase customer loyaltyincrease customer loyalty

Ddm 2006 E Commerce

Business

Transcript of Ddm 2006 E Commerce