Data Driven Marketing Fundamentals

Data Driven Marketing September 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 possible 5% with highly open rate typical relevant with irrelevant messaging messaging

The Cost of Irrelevant Messaging• 64% of consumers say promotionaloffers dominate both email andtraditional mail everyday• Only 41% view these as relevantcommunications• Of the 91% of consumers that optout of brand’s emails 46% defectfrom the brand due to irrelevantmessaging

The Cost of Irrelevant Messaging• 41% of consumers say theywould consider ending a brandrelationship owing to irrelevantpromotions• An additional 22% say theywould defect from the brandrelationship due to irrelevance• 58% of brand’s marketingcontent is not relevant topotential buyers, reducingbrands’ chances of a sale by45%

The customer is in control and knows it!

The Power of Data Driven MarketingThe data (precision) marketing framework relies heavily onseveral key factors, starting with the collection andanalysis of data. Analyze and Model Determine Deploy Objective Measure

Why Brands Don’t Do Data Driven Marketing (DDM)• Difficulty collecting relevant dataabout customer preferences andbehaviors• Difficulty acting on customerdata to predict customer needsand propensity to purchase• Difficulty executing highlyrelevant messages/offers thatalign 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 CustomerRelevance will close the chasmbetween creative and directmarketing, leveraging customerinsights to produce truly valuablecontent and communication thatengages the buyer through highlyrelevant customer touch points.

Tesco ClubcardA Lesson in Customer Retention via DDM

Tesco ClubcardObjective: Customer retention and loyalty Analyze and Model Determine Deploy Objective Measure

Tesco Clubcard Gather data: Clubcard sign up, transactional touchpoints.ClothingBanking AnalyzeFood & Wine and ModelTelecom/ElectronicsEntertainmentHealthcareRecyclingHouse & homeHome efficiencyTravel Determine DeployMotoring Objective Measure

Tesco Clubcard Analyze & Model: 10% of data gives 90% accuracy.Relative price Finer food: 19%Branding Analyze Healthy eaters: 17%Ethnicity and Model Traditional: 15% Convenience: 9% Mainstream: 24% Price sensitive: 16% Determine Deploy Objective Measure

Tesco Clubcard Strategize: Develop relevant messaging strategies.Customer retentionCustomer reactivation AnalyzeCustomer growth and Model Determine Deploy Objective Measure

Tesco ClubcardDeploy: Using DDM Tesco offers tailored/relevantpromotions based on customer’s behaviors. Analyze and Model Determine Deploy Objective Measure

Tesco Clubcard Measure: DDM allows results in sales lift.16 million membersAcross 12 countries. Analyze and Model20 to 40% overallredemption rates!Quarterly vouchers =98% redemption rate! Determine Deploy Objective Measure

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

Sources Precision Marketing by Sandra Zoratti, Lee Galagherhttp://precisionmarketingbook.com/

Sources CMO 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 Convert Transformational Digital Marketing bernie@findandconvert.com http://www.findandconvert.comStrategy Execution Results Support

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Data Driven Marketing Fundamentals

by Bernie Borges on Sep 19, 2012

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