Direct & Database Marketing E-Commerce:
Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Internet  (remembering e-business class) </li></ul...
Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles: </li></ul><ul><ul><li>About Land...
Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles:  AMH </li></ul><ul><ul><li>How t...
Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles:  Amazon.com </li></ul><ul><ul><l...
Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles:  eBay.com </li></ul><ul><ul><li>...
Direct & Database Marketing <ul><li>“The New Direct Marketing is an information driven marketing process, made possible by...
Direct & Database Marketing <ul><li>Database Definition: </li></ul><ul><li>A marketing database is a comprehensive collect...
Direct & Database Marketing <ul><li>Key aspects: </li></ul><ul><li>Interrelated data </li></ul><ul><li>Multiple applicatio...
Direct & Database Marketing <ul><li>Alternative Definition: </li></ul><ul><li>A marketing database is a list of customers ...
Direct & Database Marketing <ul><li>Introduction: Commercial Databases: </li></ul><ul><li>What external commercial databas...
Direct & Database Marketing <ul><li>Segmentation Analysis: </li></ul><ul><li>Customer profiles  </li></ul><ul><li>Customer...
Direct & Database Marketing <ul><li>External databases, marketer uses: </li></ul><ul><li>Want to add (expand) data about e...
Direct & Database Marketing <ul><li>External databases: </li></ul><ul><li>Consists of records of individuals, available fo...
Direct & Database Marketing <ul><li>External databases: </li></ul><ul><li>Geodemographic databases </li></ul><ul><li>Lifes...
Direct & Database Marketing <ul><li>Geodemographic:  </li></ul><ul><li>Often based upon government run census </li></ul><u...
Direct & Database Marketing <ul><li>Lifestyle databases: </li></ul><ul><li>Attitudinal data </li></ul><ul><li>Opinion data...
Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 1: </li></ul><ul><li>Matching process of cli...
Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 2: </li></ul><ul><li>Client’s matching recor...
Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 3: </li></ul><ul><li>Matching records used f...
Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 4: </li></ul><ul><li>For new market targetin...
Direct & Database Marketing <ul><li>Issues regarding “conventional” versus database market research: </li></ul><ul><li>Cos...
Direct & Database Marketing <ul><li>Economics: </li></ul><ul><li>The cost versus benefit of use of commercial databases: <...
Direct & Database Marketing <ul><li>Strategic Options: </li></ul><ul><li>Market penetration: </li></ul><ul><li>Lists of co...
Direct & Database Marketing <ul><li>Strategic Options: </li></ul><ul><li>New product development: </li></ul><ul><li>Extern...
Direct & Database Marketing <ul><li>Commercial Databases: </li></ul><ul><li>Examples: </li></ul><ul><li>Claritas </li></ul...
Direct & Database Marketing <ul><li>The Database - Interactive Marketing’s Essential Difference: </li></ul><ul><li>who our...
Direct & Database Marketing <ul><li>Handling Customers ‘Over Time’ : </li></ul><ul><li>The customer database allows you to...
Direct & Database Marketing <ul><li>Database marketing: customer focus </li></ul><ul><ul><li>get to know customer because ...
Direct & Database Marketing <ul><li>Direct & Database Marketing:  </li></ul><ul><ul><li>Uses mass media when addressing ne...
Direct & Database Marketing <ul><li>Example: </li></ul><ul><li>Why Databases Fail (.ppt) </li></ul><ul><li>CRM Strategies ...
Direct & Database Marketing <ul><li>Gartner Group: </li></ul><ul><li>“ Data mining is the process of discovering  </li></u...
Direct & Database Marketing <ul><li>Segmentation & Targeting: </li></ul><ul><li>Use purchase behaviour to segment by custo...
Direct & Database Marketing <ul><li>Applications </li></ul><ul><li>Setting budgets </li></ul><ul><li>Understanding custome...
Direct & Database Marketing <ul><li>Applications/Techniques utilized </li></ul><ul><li>Setting budgets: use LTV analysis t...
Direct & Database Marketing <ul><li>Applications/Techniques utilized </li></ul><ul><li>Understanding existing customers as...
Direct & Database Marketing <ul><li>Data Sources: </li></ul><ul><li>List purchase </li></ul><ul><li>Data-building schemes ...
Direct & Database Marketing <ul><li>Data Sources: Direct contact companies: </li></ul><ul><li>On-line input </li></ul><ul>...
Direct & Database Marketing <ul><li>Data Sources: Indirect contact companies: </li></ul><ul><li>Product registration, warr...
Direct & Database Marketing <ul><ul><li>Data Management: </li></ul></ul><ul><ul><li>Manage the data sources </li></ul></ul...
Direct & Database Marketing <ul><li>Direct & Database Marketing: measurement </li></ul><ul><ul><li>Marketers analyse behav...
Direct & Database Marketing <ul><li>Direct & Database Marketing: </li></ul><ul><li>Is more expensive, on a per-customer ba...
Direct & Database Marketing <ul><li>A Complete System of Marketing: </li></ul><ul><li>market analysis and research </li></...
Direct & Database Marketing <ul><li>Reasons for growth: </li></ul><ul><li>Business: </li></ul><ul><li>Ever more competitio...
Direct & Database Marketing <ul><li>DDM Advantages: </li></ul><ul><li>Lead grading </li></ul><ul><li>Customized targeting ...
Direct & Database Marketing <ul><li>DDM Advantages: </li></ul><ul><li>Information can drive new programs & fuel new revenu...
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Ddm 2006 E Commerce

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Ddm 2006 E Commerce

  1. 1. Direct & Database Marketing E-Commerce:
  2. 2. Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Internet (remembering e-business class) </li></ul><ul><li>Behavioural Targeting </li></ul><ul><li>Data management system </li></ul><ul><li>Evolution of strategy </li></ul>
  3. 3. Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles: </li></ul><ul><ul><li>About Lands’ End </li></ul></ul><ul><ul><li>Lands’ End Targeting </li></ul></ul><ul><ul><li>Lands’ End CSM </li></ul></ul>
  4. 4. Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles: AMH </li></ul><ul><ul><li>How the web has changed database marketing </li></ul></ul><ul><ul><li>Customer relationship marketing on the web* </li></ul></ul><ul><ul><li>Customer service on the web </li></ul></ul><ul><ul><li>How to measure success on the web </li></ul></ul>
  5. 5. Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles: Amazon.com </li></ul><ul><ul><li>Amazon Case 1 </li></ul></ul><ul><ul><li>Amazon 2004 Annual Report (Intro) </li></ul></ul><ul><ul><li>Amazon PR Coinstar Gift Certificate </li></ul></ul><ul><ul><li>Amazon PR eBook </li></ul></ul><ul><ul><li>Amazon PR Weekly Series </li></ul></ul>
  6. 6. Direct & Database Marketing <ul><li>E-Commerce & DDM: </li></ul><ul><li>Cases & Articles: eBay.com </li></ul><ul><ul><li>eBay CSFB Presentation </li></ul></ul><ul><ul><li>eBay Skype Acquisition </li></ul></ul><ul><ul><li>eBay Presentation China </li></ul></ul><ul><ul><li>eBay Annual Report </li></ul></ul><ul><ul><li>eBay JP Morgan Presentation </li></ul></ul>
  7. 7. Direct & Database Marketing <ul><li>“The New Direct Marketing is an information driven marketing process, made possible by database technology, that enables marketers to develop, test, implement, measure, and appropriately modify customized marketing programs and strategies.” </li></ul><ul><li>New Direct Marketing, 3 rd Edition, by David Shepard Associates </li></ul>
  8. 8. Direct & Database Marketing <ul><li>Database Definition: </li></ul><ul><li>A marketing database is a comprehensive collection of interrelated data serving multiple applications, allowing timely and accurate on-demand retrieval of relevant data, and having a data management system independent of application. </li></ul>
  9. 9. Direct & Database Marketing <ul><li>Key aspects: </li></ul><ul><li>Interrelated data </li></ul><ul><li>Multiple applications </li></ul><ul><li>Data management system </li></ul>
  10. 10. Direct & Database Marketing <ul><li>Alternative Definition: </li></ul><ul><li>A marketing database is a list of customers and prospects records that enables strategic analysis, and individual selections of communication and customer service support. That data is organized around the customer. </li></ul>
  11. 11. Direct & Database Marketing <ul><li>Introduction: Commercial Databases: </li></ul><ul><li>What external commercial databases are </li></ul><ul><li>Who operates them </li></ul><ul><li>What they consist of </li></ul><ul><li>What direct marketers use them for </li></ul><ul><li>The process of management of external databases </li></ul>
  12. 12. Direct & Database Marketing <ul><li>Segmentation Analysis: </li></ul><ul><li>Customer profiles </li></ul><ul><li>Customer needs </li></ul><ul><li>Targeting new prospects based upon existing customer profiles </li></ul><ul><li>Source of lists of prospects for new market or product/service development </li></ul>
  13. 13. Direct & Database Marketing <ul><li>External databases, marketer uses: </li></ul><ul><li>Want to add (expand) data about existing customers </li></ul><ul><li>Understand existing customers better </li></ul><ul><li>Want accurate profiles of intended target </li></ul><ul><li>Compile a list of interested individuals </li></ul>
  14. 14. Direct & Database Marketing <ul><li>External databases: </li></ul><ul><li>Consists of records of individuals, available for sale. </li></ul>
  15. 15. Direct & Database Marketing <ul><li>External databases: </li></ul><ul><li>Geodemographic databases </li></ul><ul><li>Lifestyle databases </li></ul>
  16. 16. Direct & Database Marketing <ul><li>Geodemographic: </li></ul><ul><li>Often based upon government run census </li></ul><ul><li>Profilers perform cluster analysis </li></ul><ul><li>Match with postcode </li></ul><ul><li>May append with data from additional sources </li></ul><ul><li>Allocate description of “typical” household profile </li></ul>
  17. 17. Direct & Database Marketing <ul><li>Lifestyle databases: </li></ul><ul><li>Attitudinal data </li></ul><ul><li>Opinion data </li></ul><ul><li>Lifestyle data </li></ul><ul><li>Product purchase data </li></ul><ul><li>Current brand & product preferences </li></ul><ul><li>Great research and segmentation tool </li></ul>
  18. 18. Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 1: </li></ul><ul><li>Matching process of client’s internal data with commercial database data </li></ul><ul><li>Geodemographic: can match via postcodes </li></ul><ul><li>Lifestyle: can match individual names & addresses </li></ul>
  19. 19. Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 2: </li></ul><ul><li>Client’s matching records are appended with data from commercial database, to make a more complete record. </li></ul>
  20. 20. Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 3: </li></ul><ul><li>Matching records used for research &/ segmentation </li></ul><ul><li>Clustered descriptions </li></ul><ul><li>Reveal customer segments </li></ul>
  21. 21. Direct & Database Marketing <ul><li>Profiling process: </li></ul><ul><li>Step 4: </li></ul><ul><li>For new market targeting: </li></ul><ul><li>Identification of “lookalikes” </li></ul><ul><li>Generate prospect list </li></ul><ul><li>(DDM commercial databases provide major efficiency advantages) </li></ul>
  22. 22. Direct & Database Marketing <ul><li>Issues regarding “conventional” versus database market research: </li></ul><ul><li>Cost </li></ul><ul><li>Accuracy </li></ul><ul><li>Representativeness </li></ul><ul><li>Collaborative (combined products) </li></ul>
  23. 23. Direct & Database Marketing <ul><li>Economics: </li></ul><ul><li>The cost versus benefit of use of commercial databases: </li></ul><ul><li>Exhibit 4.4; page 92-92 </li></ul>
  24. 24. Direct & Database Marketing <ul><li>Strategic Options: </li></ul><ul><li>Market penetration: </li></ul><ul><li>Lists of competitors’ customers based upon purchase behaviour </li></ul><ul><li>List of prospects generated from profiles of existing customers </li></ul>
  25. 25. Direct & Database Marketing <ul><li>Strategic Options: </li></ul><ul><li>New product development: </li></ul><ul><li>External data used for marketing new products </li></ul><ul><li>New market development: </li></ul><ul><li>A new type of customer </li></ul>
  26. 26. Direct & Database Marketing <ul><li>Commercial Databases: </li></ul><ul><li>Examples: </li></ul><ul><li>Claritas </li></ul><ul><li>Experian </li></ul>
  27. 27. Direct & Database Marketing <ul><li>The Database - Interactive Marketing’s Essential Difference: </li></ul><ul><li>who our customers are </li></ul><ul><li>what they buy </li></ul><ul><li>leads to what they want from us </li></ul><ul><li>how much they are worth to us </li></ul><ul><li>= create relationships over time </li></ul>
  28. 28. Direct & Database Marketing <ul><li>Handling Customers ‘Over Time’ : </li></ul><ul><li>The customer database allows you to understand your customers history with you and so predict their future needs </li></ul>
  29. 29. Direct & Database Marketing <ul><li>Database marketing: customer focus </li></ul><ul><ul><li>get to know customer because you start recording your transactions with them </li></ul></ul><ul><ul><li>company initiates contact that invites a response </li></ul></ul>
  30. 30. Direct & Database Marketing <ul><li>Direct & Database Marketing: </li></ul><ul><ul><li>Uses mass media when addressing new prospects </li></ul></ul><ul><ul><li>Uses personal media-direct mail, telemarketing, when developing relationships with existing customers </li></ul></ul><ul><ul><li>Focus on customers, rather than products </li></ul></ul><ul><ul><ul><li>get to know customer because you start recording your transactions with them </li></ul></ul></ul>
  31. 31. Direct & Database Marketing <ul><li>Example: </li></ul><ul><li>Why Databases Fail (.ppt) </li></ul><ul><li>CRM Strategies in Healthcare (.ppt) </li></ul><ul><li>Customer Acquisition & Modeling (.ppt) </li></ul><ul><li>Data Mining Data (.ppt) pp1-48 </li></ul><ul><li>Data Mining 101 PP-34-77 </li></ul>
  32. 32. Direct & Database Marketing <ul><li>Gartner Group: </li></ul><ul><li>“ Data mining is the process of discovering </li></ul><ul><li>meaningful new correlations, patterns and </li></ul><ul><li>trends by sifting through large amounts of </li></ul><ul><li>data stored in repositories, using pattern </li></ul><ul><li>recognition technologies as well as </li></ul><ul><li>statistical and mathematical techniques.” </li></ul>
  33. 33. Direct & Database Marketing <ul><li>Segmentation & Targeting: </li></ul><ul><li>Use purchase behaviour to segment by customer value </li></ul><ul><li>Use purchase behaviour to segment by product need </li></ul><ul><li>Use profile data to relate to campaign response (ROI) </li></ul><ul><li>Use profile data to target new customers accurately </li></ul>
  34. 34. Direct & Database Marketing <ul><li>Applications </li></ul><ul><li>Setting budgets </li></ul><ul><li>Understanding customer’s value </li></ul><ul><li>Understanding existing customers as individuals </li></ul><ul><li>Targeting “spend” to maximize ROI </li></ul><ul><li>Profiling existing customers to target new prospects </li></ul>
  35. 35. Direct & Database Marketing <ul><li>Applications/Techniques utilized </li></ul><ul><li>Setting budgets: use LTV analysis to set allowable marketing spend </li></ul><ul><li>Understanding customer’s value: use FRAC & LTV analysis </li></ul>
  36. 36. Direct & Database Marketing <ul><li>Applications/Techniques utilized </li></ul><ul><li>Understanding existing customers as individuals: use profiling modelling techniques </li></ul><ul><li>Targeting “spend” to maximize ROI </li></ul><ul><li>Profiling existing customers to target new prospects </li></ul>
  37. 37. Direct & Database Marketing <ul><li>Data Sources: </li></ul><ul><li>List purchase </li></ul><ul><li>Data-building schemes </li></ul><ul><li>Introduce new contact channels </li></ul>
  38. 38. Direct & Database Marketing <ul><li>Data Sources: Direct contact companies: </li></ul><ul><li>On-line input </li></ul><ul><li>Customer service department records </li></ul><ul><li>Responses to DM communications </li></ul><ul><li>Accounting records </li></ul><ul><li>Billing systems </li></ul><ul><li>Sales transaction records/order processing </li></ul>
  39. 39. Direct & Database Marketing <ul><li>Data Sources: Indirect contact companies: </li></ul><ul><li>Product registration, warranty data </li></ul><ul><li>Credit card details </li></ul><ul><li>Subscription details </li></ul><ul><li>Questionnaire responses </li></ul><ul><li>In-store offer details </li></ul><ul><li>Requests for product information </li></ul><ul><li>Events/promotions requiring a response </li></ul><ul><li>Direct channels established </li></ul>
  40. 40. Direct & Database Marketing <ul><ul><li>Data Management: </li></ul></ul><ul><ul><li>Manage the data sources </li></ul></ul><ul><ul><li>Manage the data entry </li></ul></ul><ul><ul><ul><li>verification, validation, de-duplication, merge-purge </li></ul></ul></ul><ul><ul><li>Manage the database </li></ul></ul><ul><ul><ul><li>In-house, outsource? </li></ul></ul></ul><ul><ul><li>Manage the applications </li></ul></ul>
  41. 41. Direct & Database Marketing <ul><li>Direct & Database Marketing: measurement </li></ul><ul><ul><li>Marketers analyse behaviour to predict best responding people & the best offers to make </li></ul></ul>
  42. 42. Direct & Database Marketing <ul><li>Direct & Database Marketing: </li></ul><ul><li>Is more expensive, on a per-customer basis </li></ul><ul><li>A way of buying a closer relationship customer </li></ul><ul><ul><li>First individual information </li></ul></ul><ul><ul><li>Subsequent precision & control in customer contact </li></ul></ul><ul><ul><li>I.e., Marketers analyse behaviour to predict best responding people & the best offers to make </li></ul></ul>
  43. 43. Direct & Database Marketing <ul><li>A Complete System of Marketing: </li></ul><ul><li>market analysis and research </li></ul><ul><li>segmentation and positioning </li></ul><ul><li>making an offer </li></ul><ul><li>creating relationships </li></ul><ul><li>… are all done within a database marketing framework </li></ul>
  44. 44. Direct & Database Marketing <ul><li>Reasons for growth: </li></ul><ul><li>Business: </li></ul><ul><li>Ever more competition </li></ul><ul><li>Drive for cost-effectiveness </li></ul><ul><li>Interest in consumer retention & loyalty </li></ul><ul><li>Continuing drop in computer processing costs </li></ul>
  45. 45. Direct & Database Marketing <ul><li>DDM Advantages: </li></ul><ul><li>Lead grading </li></ul><ul><li>Customized targeting at the right time </li></ul><ul><li>New information & past results help formulate strategy </li></ul>
  46. 46. Direct & Database Marketing <ul><li>DDM Advantages: </li></ul><ul><li>Information can drive new programs & fuel new revenue sources </li></ul><ul><li>Information can foster new new services & generate repeat orders </li></ul><ul><li>Ongoing communication efforts can increase customer loyalty </li></ul>
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