Marketing in crisis: using analytics, data and intelligence

THoM_SPSS_Marketing Crisis_11062009.v3.ppt 1

Analytical deployment (in marketing): All excuses not to do it are valid … … but not sufficient June 11, 2009

Agenda 1. Getting to the breadth and depth 2. Getting to impact 3. Getting to change THoM_SPSS_Marketing Crisis_11062009.v3.ppt 3

Analytical deployment offers a new edge to marketing An extract Old approach Revolutionary approach Reliance on survey data Insights from marketplace data Focus on outcomes of consumer Examine the process consumers use decisions to make decisions Measuring marketing effects Optimizing marketing activities Use descriptive models Use models based on behavioral processes Focus on short-run profitability Emphasize drivers of long-term value Source: Chicago Booth Magazine, Spring 2009: “A Revolution in Marketing” THoM_SPSS_Marketing Crisis_11062009.v3.ppt 4

Analytical deployment is about enhancing the full organization, not just adding competences Analytics is a way to do business mainly with your current business model • It is therefore not just a competence you can centralize or departmentalize (parking) • But it cuts through silo’s of the organization to deliver (sharing) Many development frameworks exist to support this deployment, and all aim at • Supporting a cultural shift • Aligning management • Building benefits for all actors • Locking it in into daily processes THoM_SPSS_Marketing Crisis_11062009.v3.ppt 5

Understanding the depth and impact of analytics usage is key to enhance a company-wide adoption 8 levels or sequences of analytics usage in a company 1 3 5 7 Query Standard Statistical Predictive drill-down reports analytics modeling or OLAP 2 4 6 8 Ad-hoc Alerts Forecasting Optimization reports Access and reporting Analytics Per level, the readiness on the following 6 ingredients need to be evaluated Leadership Transparency Infrastructure Processes People Culture Source: Jim Davis, SPSS THoM_SPSS_Marketing Crisis_11062009.v3.ppt 6

BI as part of analytical deployment… Checking the validity of your business Strategic Information assumptions: Does Layer this happen? Tactical Information Checking the Layer validity of your dashboard input: Does this happen ? Reporting The dashboard from your BI: recurrent and Operational fixed Information Layer Source: Business & Market Intelligence Kinepolis Group, Presentation at The Datamining Garden THoM_SPSS_Marketing Crisis_11062009.v3.ppt 7

… Reporting versus Analytics: a world of difference ANALYTICS Strategic Information Layer Tactical Information Layer ANALYSIS REPORTING Operational Information Layer The point: If your "analysis" is really reporting, you haven't The point: If your "analysis" is really reporting, you haven't even begun to leverage the information contained in your data even begun to leverage the information contained in your data Source: Business & Market Intelligence Kinepolis Group, Presentation at The Datamining Garden; Web Analysis 2009, THoM THoM_SPSS_Marketing Crisis_11062009.v3.ppt 8

Analytics helps increasing competitiveness and profitability on top of your traditional means • Better and faster decisions • Time and cost savings • Organizational learning and new ideas • Top-line and bottom-line mastering Source: GIA White Paper 2/2008: World Class Market intelligence – From firefighters to futurists; THoM THoM_SPSS_Marketing Crisis_11062009.v3.ppt 10

The benefits are not increments, but a factor Real life examples The effect of analytics Benchmarked best practices: extract Before After Best applying applying practice analytics analytics performance Banner ad click- 0.3% 21% Performance measure through rates • X-sell response rates 20% Mail response rates 0.5% 18% • Repeat buyer rates 60% Merchandising 0.2% 12% response rates • Referrals 20% Conversion rates 0.9% 10% • Direct marketing ROI 12:1 (post-response) Improvement measure (after Repeat buyer rates 2.0% 60% vs. before) • Churn reduction 78% • Increase in per customer 15% profit Source: Marketing Analytics to the Rescue: The Next Big Thing? David J. Santoro DM Review Special Report, February 2003 THoM_SPSS_Marketing Crisis_11062009.v3.ppt 11

And benefits can be achieved in every marketing domain What business problems does data mining/analytics solve? You can use data mining to solve almost any business problem that involves data, including: • Increasing revenues from customers • Improving cross-selling and up-selling • Understanding customer segments and preferences • Identifying profitable customers and acquiring new ones • Retaining customers and increasing loyalty • Increasing ROI and reducing marketing campaign costs • Detecting fraud, waste, and abuse • Determining credit risks • Increasing Web site profitability • Increasing retail store traffic and optimizing layouts for increased sales • Monitoring business performance Data mining solves a common paradox: Data mining solves a common paradox: The more customer data you have, the more difficult and time- The more customer data you have, the more difficult and time- consuming it is to effectively analyze and draw meaning from them consuming it is to effectively analyze and draw meaning from them Source: SPSS THoM_SPSS_Marketing Crisis_11062009.v3.ppt 12

“Let’s find out how to get more out of your data and analytics …” The TOP 10 responses / excuses: 1 We have lots of data but not a lot of info proportionally 2 We have lots of reports and analyses already / We have BI (business intelligence) all over the place 3 We already analyze too much and act not enough (analysis paralysis) 4 We are already managing our performance quite well 5 We are improving our operations continuously; what could this bring more ? / Management will not be supportive 6 No way you can ever have this company increasing analytical intelligence across the board 7 You can’t really talk with data people 8 We already have analysts 9 I’m in B2B, not B2C / I have resellers or partners, not end-customers 10 We don’t have much or usable data / We wait for our CRM system first THoM_SPSS_Marketing Crisis_11062009.v3.ppt 14

Minimum 4 competences required to get from data to impact, given a full analytical deployment 1 Analytics 2 Business Quantitative and multidisciplinary Contextual • Statistics • General business understanding • Econometrics • Particular business need of a • Operational research specific decision maker • Artificial intelligence • Data mining Applicative • Understanding the final use Modeling capability • Knowledge on requirements • Regression, clustering, decision • Actionability of conclusions trees, … • Relevancy of outcome • Urgency/Prioritization of requests Methodology: • Flexibility • Approach • Tactics for issue resolution 4 Communication Translating into and talking in the 3 Techniques semantics of the decision maker Data management on large databases Highlighting the relevant trade-offs to the users Database design Convincing on benefits and relieving IT programming ‘old’ prejudices of data usage BI tools Committing to business impact • Reporting • Analysis Cross-functional linkages Source: The Datamining Garden, presentation of Dr. Martine George, Customer Intelligence ING THoM_SPSS_Marketing Crisis_11062009.v3.ppt 15

Long chain of functions to get from data to analytical decision making Decision Maker Business Project Manager Business Analyst Intelligence Analyst (data mining) BI/Reporting Analyst Database/ Delivery Manager Data Quality Controller Database Architect Data Warehouse Management Data THoM_SPSS_Marketing Crisis_11062009.v3.ppt 16

Let’s get started Stijn.ghekiere@thom.eu + 32 474 94 60 15 THoM_SPSS_Marketing Crisis_11062009.v3.ppt 17

Analytics: Deploying in crisis times to pick up targeting, behavior change, top- and bottom-line potential OUR VALUE PROPOSITION To assist companies in times of economic crisis, THOM offers an analytical assessment (AA) and business action pilot (BAP) designed to be fast, create new value and insights for your company and build the first stone for tremendous competitive benefit and continuous improvement in marketing effectiveness APPROACH VALUE AND DELIVERABLES • During an Analytics Assessment (AA) • Identify quick hits for immediate improvements - A check is performed with your IT and to your current working of analytics information users on data quality, availability and accessibility for the • Analytical progress map applied to marketing deployment in sales & marketing: 1-2 and sales (for short and long term deployment) weeks • Execution of a pilot and measurement of the - The base options for analytics and data analytics benefits leverage are listed, discussed and prioritized for sales & marketing: 1-2 weeks • Insights on how to speed up analytics outside • During a (consecutive) Business Action Pilot the currently claimed barriers for analysis (BAP), a single marketing and/or sales action objective is researched and optimized with • Overview of gaps and opportunities to convince predictive analytics: min. 3 weeks; top management of investment into analytics implementation pilot comes separately, but support often not required, except for final result IMPACT: measurement • TARGETING: up to 10 times better • During a Marketing Analytics Fulfillment • CHURN: up to 50% less Evaluation (MAFE), the functional chain of analytics is screened for gaps and opportunities, • COST of initiatives: up to 30% less communication facilitation tips are given, barriers • SALES efficiency: up to 30% better and missing areas in analytics are revealed, and if • X-SELLING: up to 20% more possible one action based pilot is set up: min. 3 weeks THoM_SPSS_Marketing Crisis_11062009.v3.ppt 18

The House of Marketing is the first Marketing Expertise and Excellence Center • We support our clients to “Bridge the Marketing Knowing-Doing Gap”, i.e. improving business results by developing and activating strong and effective growth strategies • By offering the right marketing expertise at the right moment • With an enduring passion for the marketing profession and for client satisfaction • Ensuring solutions applied by market facing teams with a common focus on the customer THoM_SPSS_Marketing Crisis_11062009.v3.ppt 19

A unique combination of strategic excellence and operational pragmatism The mix of professional profiles makes The House of Marketing unique Strategic excellence Operational pragmatism Our consultants Our marketing experts • Create relevant insights in the business • Demonstrated capacity to make things • Have proven track record in international happen within international and strategic advice complex companies as well as in local action-driven business units • Team up with your “best in class” high potentials • Apply practical knowledge of successful corporate sales & marketing • Identify the true leverages for significant organizations improvements • Turn initiatives into tangible action • Turn opportunities into structured and plans prioritized business initiatives • Help you to implement successfully strategic recommendations We help you in materializing ideas into well-considered We help you in materializing ideas into well-considered and successful business initiatives and successful business initiatives THoM_SPSS_Marketing Crisis_11062009.v3.ppt 20

Our expertise is built on 4 pillars Effectively bridging the Marketing Knowing-Doing Gap Helping the company make relevant strategic choices • Market assessment, growth and new product strategy I. Strategic • Insights in customer perceptions, needs and segmentation Marketing • Branding, positioning, satisfaction research and strategy • Pricing opportunity assessment and strategy Making the positioning tangible: creating marketing value • Go to market strategies across 4 Ps II. Go-to-Market • Value based pricing • Customer experience and customer loyalty • Integrated 360° marketing communication Making the strategy work • Customer Process Management III. Organization • Customer relationship management (CRM) capabilities • Marketing & sales organization structure • Marketing competencies assessment and capability development Making the strategy profitable: maximizing marketing value • Customer Life Time Value Management IV. Performance Management • Return on Marketing Investments or assets (ROMI/ROMA) • Performance metrics and marketing dashboards • Marketing Analytics THoM_SPSS_Marketing Crisis_11062009.v3.ppt 21

Marketing in crisis: using analytics, data and intelligence

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