Mi Overview August 09


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  • We’ve all heard of the “floating voter” – the person who can be moved by the merest puff of wind. Ken Arrow took the ’60’s work on voter theory and applied to every choice – especially product choice – that we make. He found that you could model the amount of effort needed to move an individual from buying Ford to buying Vauxhall. But, in the ’70’s the computing power and the Direct Marketing knowledge necessary did not exist. Today both do. By using the response or non-response to direct marketing stimulii as “votes” and combining this with easily obtainable demographic variables, FlexPoint can create a “value segmentation” that allots both customers and prospects into groups that reflect the net value of the group vs. the net marketing cost required to achieve the sales within that group.
  • FlexPoint works in the way that the best salesmen do. The best salesmen KNOW what kind of customer it is easier to sell to, and what kind of customer they will struggle with. They work out key questions to ask that qualify out the poor prospects. FlexPoint, by using Nobel Prize-winning mathematics, does the same thing on the mass scale of a marketing database. It should NOT be confused with “propensity modelling” – this only gets you more customers that “look like” the ones you’ve got. FlexPoint goes further, it finds the people who “act like” the most responsive customers AND categorises on a sliding scale of almost infinite sensitivity.
  • Traditional segmentations are designed with a view to targeting messages – you wouldn’t say the same thing to a millionaire executive as to a struggling single mother. And the same is true in business – different industries have different issues. This is where propensity modelling fails. Because it only looks at who HAS bought it is, in fact, only showing the propensity of people to respond to the message. FlexPoint goes further and identifies within the segment the relative cost of getting a response – in other words it provides a horizontal filter.
  • Mi Overview August 09

    1. 1. An Introduction to Marketing Improvement
    2. 2. What we do: <ul><li>Data Consultancy </li></ul><ul><ul><li>Consumer touchpoint/data auditing </li></ul></ul><ul><ul><li>Customer targeting </li></ul></ul><ul><ul><li>Data Privacy </li></ul></ul><ul><ul><li>Web & E-Marketing </li></ul></ul><ul><li>Marketing Database ‘Single Contact View’ </li></ul><ul><ul><li>Design,Build, Host </li></ul></ul><ul><li>ROI Based Modelling </li></ul><ul><ul><li>MI’s unique FlexPoint behavioural based model </li></ul></ul>=
    3. 3. To us it’s not data, it’s PEOPLE
    4. 4. About Marketing Improvement <ul><li>Formed in 2003 to work with clients to improve marketing ROI via exploitation of data. </li></ul><ul><li>Highly experienced marketing professionals </li></ul><ul><li>Our track records mean we have nothing left to prove. </li></ul><ul><li>Unique combination of &quot;client-side&quot; and &quot;agency side&quot; experience so we understand better than most what the pressures and challenges are. </li></ul><ul><li>We offer open minds, clear opinions and useful experiences. </li></ul>
    5. 5. Some of our Clients
    6. 6. Our Approach to Data and Marketing
    7. 7. Where are you on this matrix? Dialogue Push Segmented Targeted Profiled Integrated Response/RFM FUNCTIONALITY <ul><li>List Orientated </li></ul><ul><li>Manually Cranked </li></ul><ul><li>CRM System </li></ul><ul><li>Fully Automated </li></ul><ul><li>Database/Warehouse </li></ul><ul><li>Semi - Automated </li></ul>PROCESS PAYBACK BAND MARKETING WASTE SYSTEM WASTE  Target It costs 20% to get 80% of the way – is the next 20% worth a fourfold increase in cost?
    8. 8. Analytics
    9. 9. What is the FlexPoint? Eliminate Experiment Invest
    10. 10. FlexPoint – The theory Moving a voter from one extreme to vote for the other party is almost impossible. The closer they are to the centre, the easer it is. Arrow’s Theory applies this to ALL product choices. .. And FlexPoint uses the Direct Marketing conversion rates to segment the market universe by profitability based on CURRENT results. The “Floating Voter” L R
    11. 11. What does FlexPoint do? <ul><li>It uses the response to direct marketing/sales activity </li></ul><ul><ul><li>To assign people into cells that reflect the investment required to get a positive response </li></ul></ul><ul><li>It uses demographics compiled by MI from multiple sources </li></ul><ul><ul><li>To assign prospects & customers to cells </li></ul></ul><ul><li>It shows where to invest marketing/sales effort </li></ul><ul><ul><li>Which customer/prospects will respond at least marketing cost </li></ul></ul><ul><ul><li>Which customer/prospects are unlikely to profitably respond </li></ul></ul><ul><ul><li>Which customer/prospects have had a disproportionate investment </li></ul></ul>The result is a 20 -40% improvement in marketing ROI
    12. 12. FlexPoint provides a clear focus on ROI Struggling Welfare Good prospects Bad prospects ££ Optimising the Budget ££ Targeting the Message The Total Market Corporate Chieftans Metropolitan Adventurers Wannabe Wealthy Comfortable Suburbanites Grey Perspectives
    13. 13. What is the FlexPoint? Eliminate Experiment Invest
    14. 14. FlexPoint Case Study B2C Insurance
    15. 15. FlexPoint Consumer Insurance
    16. 16. Predicting Channels to Market FlexPoint Code = Relative Investment to Acquire 1= Low Investment 20 = High Investment Cross Tabulation Showing Number of Prospects in the Marketing Database FlexPoint Code For Direct Mail FlexPoint Code For OutBound TeleSales Only Respond to Mail Only Respond to TeleSales Always Respond Never Respond
    17. 17. Predicting Channels to Market FlexPoint Code = Relative Investment to Acquire 1= Low Investment 20 = High Investment Cross Tabulation Showing Number of Prospects in the Marketing Database FlexPoint Code For Direct Mail FlexPoint Code For OutBound TeleSales Only Respond to Mail Only Respond to TeleSales Always Respond Never Respond
    18. 18. The Recession-Proof Index (RPI) <ul><li>All 28M households in the UK were assessed in August 2008 by MI for their resistance to recessionary pressures based on: </li></ul><ul><ul><li>Region </li></ul></ul><ul><ul><li>Income </li></ul></ul><ul><ul><li>Lifestage </li></ul></ul><ul><ul><li>House value </li></ul></ul><ul><ul><li>Indebtedness </li></ul></ul><ul><ul><li>Fear of recession </li></ul></ul><ul><li>The RPI is a 10 point scale, 1= recession-proof, 10= recession-prone </li></ul><ul><li>The following charts show how creeping unemployment has closely mirrored the RPI as it has moved into more and more relatively recession-proof areas. </li></ul><ul><li>The RPI has proved to be stunningly accurate in its assessment of the course of the recession - as unemployment continues to grow it will continue to predict who and where to avoid and where to invest for the upturn </li></ul>
    19. 19. Before the Recession hit Employment…… Across vast swathes of the UK unemployment was below 2% in October 2008
    20. 20. 10% most recession prone by Postcode Sector By December it was creeping South and mirroring the bottom segment of the Recession-Proof Index Key
    21. 21. 20% most recession prone by Postcode Sector January saw more expansion, now drawing in the RPI segment 9 as well Key
    22. 22. 30% most recession prone by Postcode Sector The pattern repeats in February – parts of London are now affected as segment 8 sees rising unemployment Key
    23. 23. 40% most recession prone by Postcode Sector March sees yet more areas experiencing unemployment as segment 7 areas start to be affected Key
    24. 24. 50% most recession prone by Postcode Sector April’s figures show significant unemployment encroaching into RPI segment 6 Key
    25. 25. Where next? <ul><li>It is likely that the bottom of the recession was in March 2009 </li></ul><ul><li>BUT, unemployment will continue to rise for at least 12 months </li></ul><ul><li>THE RPI can show you AT A HOUSEHOLD level where to focus marketing activity AND what messages to put to those households </li></ul><ul><li>THE RPI can show where the recession will lose its grip first and thus where to focus investment to grow out of the recession faster </li></ul><ul><li>2008 levels of wealth will not return until 2014 and the RPI shows where they will return FIRST </li></ul>
    26. 26. Applications of the RPI <ul><li>Direct Marketing targeting </li></ul><ul><ul><li>Avoid those people who are so stressed by the recession they cannot buy or cannot pay </li></ul></ul><ul><li>Retailing </li></ul><ul><ul><li>Identify where to invest while retail properties are cheap and plentiful to plan for 2010 – 2014 </li></ul></ul><ul><li>Ad Planning/media buying </li></ul><ul><ul><li>Identify where the best audiences are for what type of message by marketing channel and location </li></ul></ul>
    27. 27. The MI Single Customer View ETL
    28. 28. Marketing Databases – The MI Approach <ul><li>Consultative, outcomes-based approach </li></ul><ul><ul><li>We do not advocate any particular products </li></ul></ul><ul><li>It’s all about the DATA </li></ul><ul><ul><li>Marketing Databases & CRM depend on data. </li></ul></ul><ul><li>Automate </li></ul><ul><ul><li>To minimise individual data input – use automation to make systems do the work </li></ul></ul><ul><li>Avoid “24-Button Washing-machine syndrome” </li></ul><ul><ul><li>Keep it is simple as humanly possible, Be brutal and justify EVERY feature you want. </li></ul></ul><ul><ul><li>95%+ of the features in CRM systems are never used </li></ul></ul>
    29. 29. The 5 Touch Points that must occur only once in a marketing database Person Email Address Mobile Phone Address Landline Transactions Permissions Interests Sources
    30. 30. CRM vs. SCV <ul><li>CRM is perfect for managing CONVERSATIONS </li></ul><ul><ul><li>Salesforce automation </li></ul></ul><ul><ul><li>Customer Service </li></ul></ul><ul><ul><li>TeleMarketing </li></ul></ul><ul><li>It is predominantly about managing 1-to-1 relationships </li></ul><ul><li>CRM is perfect for holding extensive information about a few </li></ul><ul><li>CRM is great for CUSTOMERS, less good for prospects and poor for suspects </li></ul><ul><li>A CRM system tends to be inflexible because of business rules required to make it run </li></ul>
    31. 31. CRM vs. SCV <ul><li>SCV is perfect for running “one-to-many” activities </li></ul><ul><ul><li>Marketing campaigns </li></ul></ul><ul><ul><li>Reporting on ROI </li></ul></ul><ul><ul><li>Permissions management </li></ul></ul><ul><li>SCV is good for holding market universe </li></ul><ul><ul><li>Aggregating data from multiple sources </li></ul></ul><ul><li>SCV is highly flexible </li></ul><ul><ul><li>Business rules relate to merge/de-dupe & permissions </li></ul></ul>
    32. 32. SCV aggregates multiple data sources – including CRM systems Analytics Fulfillment Website Call Centre Email Finance/admin Sales External Data
    33. 33. Automated System Process Data Flow CRM/SFA Database External Data Internal Systems Acquired Data A B C Outcome Mailings Validation Rules Rules Rules Rules Segmentation Cleanse & Enhance Match & De-dupe LOAD Dimensional Database Automated Reporting Automated Reporting Source Archive Automated Reporting Automated Reporting Counts & Analysis Campaign Management Marketing Communications Automated Reporting
    34. 34. Outline Project Roadmap Initial kick off, formation of project teams and creation of full project plan. Definition of reports required for build and database construction phase Build rules workshops, validation routines & associated meta data Load automation trials with selected data sources Full Database Build Modification of table structures Integration with email transmission & campaign response capture Reporting of build rule implications Example report sets for database build and file load Trial extracts and analysis Trial reports set = Project reviews 0 1 2 3 4 6 7 8 Week Number
    35. 35. MarketDeveloper
    36. 36. Secure on-line access anywhere
    37. 37. Marketing Dashboard
    38. 38. Full heirarchical contact management
    39. 39. Powerful query builder
    40. 40. On-line preference centre
    41. 41. Almost limitless reports
    42. 42. Campaign Planner
    43. 43. Email Marketing <ul><li>MarketDeveloper can interface with existing email transmission bureau or </li></ul><ul><li>Email marketing can be undertaken directly from MarketDeveloper itself: </li></ul><ul><ul><li>Email campaigns then become completely seamless </li></ul></ul><ul><ul><li>Iterative campaigns (trigger-based) are easy to set up </li></ul></ul>