Developing a Multi Channel Marketing Strategy www.sterlingmarketing.co.uk www.ivantage.co.uk
Where to begin? <ul><li>Key issues: </li></ul><ul><li>What are my sales targets for each channel? </li></ul><ul><li>What i...
Developing Sales targets per channel <ul><li>Business 1 – strong retail base, investing in more shops > growth potential, ...
Establishing Marketing Budgets <ul><li>Marketing budgets are established to achieve overall business objectives </li></ul>...
Target contribution from Marketing Activities <ul><li>Before detailed planning by each activity assess overall contributio...
Importance of customer base <ul><li>The figures below show the importance of 0-24 mth customers in providing the contribut...
Drive more contribution from your active customer base <ul><li>Understand the way your customer shops across the channels ...
Develop a modelling tool 37 views  of data taken  to optimise  contribution Mailing size optimised Option 37 selected  wit...
New Customer Recruitment Planning <ul><li>How many do I need to recruit >leaking bucket syndrome </li></ul><ul><li>How muc...
New customer requirement to grow the business <ul><li>Develop a tool to determine the volumes of new customers required to...
Forecasting Tool Input historical  actuals for  housefile &  new customers New Customers Number added Average no. of order...
How much per new customer  <ul><li>Assess lifetime value overall and for specific recruitment activities </li></ul><ul><li...
Determine overlap with existing customers <ul><li>Activities with overlap: </li></ul><ul><ul><li>Advertising </li></ul></u...
Use prior year results to plan future strategy  www.sterlingmarketing.co.uk www.ivantage.co.uk <ul><li>Review: </li></ul><...
Reactivation versus New Customer Recruitment <ul><li>Allocating spend = cost per reactivated customer versus new  </li></u...
Minimise Risk <ul><li>Test and roll out </li></ul><ul><li>A B testing </li></ul><ul><li>Low cost options </li></ul><ul><li...
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2 Developing A Multi Channel Marketing Strategy Profitable Multi Channel Marketing March 2010

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Developing a Multichannel Marketing Strategy
The lifeblood of any business is its active customer base, how then do you plan your strategy, tactics and budgets for acquisition, development and retention?

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2 Developing A Multi Channel Marketing Strategy Profitable Multi Channel Marketing March 2010

  1. 1. Developing a Multi Channel Marketing Strategy www.sterlingmarketing.co.uk www.ivantage.co.uk
  2. 2. Where to begin? <ul><li>Key issues: </li></ul><ul><li>What are my sales targets for each channel? </li></ul><ul><li>What is my target operating profit? </li></ul><ul><li>How much can the business afford to spend on marketing to deliver the profit objectives? </li></ul><ul><li>What profit contribution can I expect from my customer base? </li></ul><ul><li>How much can I afford to spend in acquiring a new customer? </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  3. 3. Developing Sales targets per channel <ul><li>Business 1 – strong retail base, investing in more shops > growth potential, channel switching from mail order to online </li></ul><ul><li>Business 2 – strong online base supported by trade sales > potential to grow online but minimum slow growth </li></ul><ul><li>Business 3 – small business aimed at older customer, slower rate of channel switching </li></ul><ul><li>Sales planning should look at growth over last two years and in the next year, objectives for the business, cash available to support any growth, channel migration </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  4. 4. Establishing Marketing Budgets <ul><li>Marketing budgets are established to achieve overall business objectives </li></ul><ul><li>In these examples the budget has been cut back as % of total sales to improve profitability </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  5. 5. Target contribution from Marketing Activities <ul><li>Before detailed planning by each activity assess overall contribution you need to cover operational and fixed costs plus profit requirement </li></ul><ul><li>The required contribution will focus the marketing spend on: </li></ul><ul><ul><li>Assessing what has worked in terms of contribution order order </li></ul></ul><ul><ul><li>Optimising sales and contribution from customer base </li></ul></ul><ul><ul><li>Developing profitable areas of new customer recruitment </li></ul></ul><ul><ul><li>Testing new ideas </li></ul></ul><ul><ul><li>Minimising risk from un proven activities </li></ul></ul><ul><ul><li>Developing increased customer loyalty </li></ul></ul><ul><ul><li>Optimising customer contact strategy </li></ul></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  6. 6. Importance of customer base <ul><li>The figures below show the importance of 0-24 mth customers in providing the contribution for the business </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk 100% £1,048,327 100% £884,735 100% £3,211,874 Grand Total 24% £248,246 32% £287,414 28% £904,983 New Customers 9% £98,107 31% £271,755 20% £636,868 Non-Active Buyers 67% £701,974 37% £325,566 52% £1,670,022 00 - 24 Month Buyers % of Total contribtn Contribtn % Total Marketing Cost Total Marketing Costs % of Sales Sales Customer Group Business B 100% £161,783 100% £282,421 100% £1,175,753 Grand Total 17% £27,027 46% £130,841 36% £420,454 New Customers 1% £2,027 17% £47,249 12% £135,250 Non-Active Buyers 82% £132,729 37% £104,331 53% £620,049 00 - 24 Month Buyers % of Total contribtn Contribtn % Total Marketing Cost Total Marketing Cost % of Sales Sales Customer Group Business A
  7. 7. Drive more contribution from your active customer base <ul><li>Understand the way your customer shops across the channels </li></ul><ul><li>Understand channel and activity overlap > existing customers responding to new customer activities (ppc, affiliates, adverts, inserts), direct channel driving retail sales </li></ul><ul><li>Develop customer groups based on propensity to purchase </li></ul><ul><ul><li>Mix of frequency, recency, channel, spend </li></ul></ul><ul><li>Develop effective contact strategy to these groups: </li></ul><ul><ul><li>Frequency of contact </li></ul></ul><ul><ul><li>Format – e-mail, catalogue, cards </li></ul></ul><ul><ul><li>Targeted promotions </li></ul></ul><ul><ul><li>AOV builders </li></ul></ul><ul><ul><li>Optimise contribution </li></ul></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  8. 8. Develop a modelling tool 37 views of data taken to optimise contribution Mailing size optimised Option 37 selected with segmentation variables of lifetime order value, frequency, recency & channel preference
  9. 9. New Customer Recruitment Planning <ul><li>How many do I need to recruit >leaking bucket syndrome </li></ul><ul><li>How much can I spend per new customer </li></ul><ul><li>How do I budget for overlap with existing customers (ppc, affiliates, advertising, inserts…) </li></ul><ul><li>How do I track channel interface i.e offline driving sales at retail, online driving sales at retail </li></ul><ul><li>How many were recruited last year at what cost </li></ul><ul><li>Planned volume and average cost this year </li></ul><ul><li>Lifetime value for different recruitment routes </li></ul><ul><li>Growth opportunity for each recruitment route </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  10. 10. New customer requirement to grow the business <ul><li>Develop a tool to determine the volumes of new customers required to reach sales goals </li></ul><ul><li>Determine marketing budget required to achieve these goals and investment available </li></ul><ul><li>Determine sales growth rate relevant to your business niche </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  11. 11. Forecasting Tool Input historical actuals for housefile & new customers New Customers Number added Average no. of orders Average order value £ new buyer Demand % of total demand Growth Extrapolate to forecast future growth. Adjust volumes of new customers to calculate impact of total sales. Housefile % retained Number retained Average no. of orders Average order value £ per buyer Demand % of total demand
  12. 12. How much per new customer <ul><li>Assess lifetime value overall and for specific recruitment activities </li></ul><ul><li>Determine actual marketing cost and profit / loss per new customer </li></ul><ul><li>Determine actual sales in year 1 and beyond </li></ul><ul><li>Determine profit / loss per new customer in 1 and beyond </li></ul><ul><li>Determine profit objectives in year 1 and beyond </li></ul><ul><li>This determines marketing investment that is acceptable to your business model </li></ul><ul><li>Examples: </li></ul><ul><li>High end fashion retailer with frequent high order value purchases> higher investment level </li></ul><ul><li>Maternity business with limited lifetime relationship > maximum profit from first order </li></ul><ul><li>Seasonal business with mid to low average order value > recruit at above break even </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  13. 13. Determine overlap with existing customers <ul><li>Activities with overlap: </li></ul><ul><ul><li>Advertising </li></ul></ul><ul><ul><li>Inserts </li></ul></ul><ul><ul><li>PR </li></ul></ul><ul><ul><li>PPC </li></ul></ul><ul><ul><li>Affiliates </li></ul></ul><ul><li>Allocation of marketing costs? </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  14. 14. Use prior year results to plan future strategy www.sterlingmarketing.co.uk www.ivantage.co.uk <ul><li>Review: </li></ul><ul><li>Number new customers year on year </li></ul><ul><li>Cost of customer by activity year on year </li></ul><ul><li>Target numbers and target costs by activity </li></ul>
  15. 15. Reactivation versus New Customer Recruitment <ul><li>Allocating spend = cost per reactivated customer versus new </li></ul><ul><li>Ways to improve performance: </li></ul><ul><li>Profile non active file versus active to target best prospects </li></ul><ul><li>De dupe external lists / multi pool to determine actives elsewhere </li></ul><ul><li>Use data pools (Abacus, Transactus, Experian) to target those actively purchasing similar products </li></ul><ul><li>Use less expensive communication formats – emails, cards / mini catalogues (last chance) </li></ul><ul><li>Promote </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
  16. 16. Minimise Risk <ul><li>Test and roll out </li></ul><ul><li>A B testing </li></ul><ul><li>Low cost options </li></ul><ul><li>Proven routes </li></ul><ul><li>Effective data analysis </li></ul><ul><li>Review constantly </li></ul><ul><li>Be flexible to adjust spend in line with performance </li></ul>www.sterlingmarketing.co.uk www.ivantage.co.uk
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