Mark Jeffery keynote at MassTLC marketing analytics summit

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Data Driven Marketing

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Mark Jeffery keynote at MassTLC marketing analytics summit

  1. 1. Mark Jeffery Agile Insights LLC and the Kellogg School of Management mjeffery@agileinsights.com ©  Agile  Insights  LLC,  2012,  All  Rights  reserved  Data-Driven Marketing:Leveraging analytics for 5X performance gains in marketing
  2. 2. Data-Driven Marketing:2 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  3. 3. •  Mo<va<on   •  Research   •  The  15  essen<al  metrics   •  Analy<cs  case  examples   –  Retail  (B2B),  Manufacturing  (B2B),  Pharmaceu<cal  Sales   (B2B)     •  ROI  for  analy<c  marke<ng   •  Where  do  you  start?   Data-Driven Marketing:3 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  4. 4. Data-Driven Marketing:4 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  5. 5. Data-Driven Marketing:5 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  6. 6. 1.  Brand  Awareness     2.  Test  Drive   Essen%al  Non-­‐Financial   3.  Churn   Metrics   4.  CSAT  =  Customer  Sa<sfac<on     5.  Take  Rate   Essen%al  Opera%ons  Metric   6.  Profit   7.  NPV  =  Net  Present  Value   Essen%al  Financial  Metrics   8.  IRR  =  Internal  Rate  of  Return     9.  Payback   Essen%al  Value-­‐Based  Marke%ng   10.  CLTV  =  Customer  Life<me  Value   Metric   Data-Driven Marketing:6 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  7. 7. 11.  CPC  =  Cost  Per  Click   Essen%al  Search  Engine   12.  TCR  =  Transac<on  Conversion  Rate   Marke%ng  Metrics   13.  ROA  =  Return  on  Ad  dollars  Spent   Essen%al  Web  Site   14.  Bounce  Rate   Performance  Metric   15.  WOM  =  Word  of  Mouth     Essen%al  Social  Media  Metric   Data-Driven Marketing:7 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  8. 8. Data-Driven Marketing:Leveraging analytics for 5X performance gains in marketing
  9. 9. •  The  Business   –  Major  US  general  merchandise  retailer  with  over  $30  Billion   revenues   –  Direct  mail  more  than  250  Million  catalogs  per  year.  Targe<ng   14  -­‐  18  Million  customers.  Spread  over  18  separate  mailings.     –  Genera<ng  incremental  sales  of  $900  Million  per  year.  •  Business  Challenge   –  Exis<ng  campaign  selected  the  top  40%  of  customer   households,     •  Based  on  Recency,  Frequency  &  Monetary  values     •  Geographic  Versioning     –  The  mailings  generated  significant  sales  volume…   –  However,  the  ROI  was  NOT  mee,ng  the  companys   expecta,ons   Data-Driven Marketing:9 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  10. 10. •  New  strategy     –  Split  the  targeted  customers  into  25  dis<nct  segments,  based  on  a  robust   series  of  variables,  ahributes  and  purchase  characteris<cs     –  Version  the  mailers,  based  on  products  &  categories  relevant  to  the  various   groups   –  Eliminated  strict  cutoff  that  included  only  top  40%  of  customers  (RFM),  but   instead  captured  "up-­‐sell"  opportuni<es  among  lower  value  customers  with   upside  poten<al  •  Results   –  Increase  in  mailer  revenue  of  $215  Million  dollars  per  year,  based  on  improved   targe<ng  and  campaign  management   •  1%  improvement  in  number  of  trips  generated  among  mailed  customers   •  5%  improvement  in  average  purchase  dollars  per  trip   •  2%  improvement  in  gross  margin,  as  "right"  product  featured  captured  sales  without   reliance  on  off-­‐price  promo<ons   –  Catalog  Targe<ng  project  alone  had  an  NPV  exceeding  $40MM   Data-Driven Marketing:10 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  11. 11. Source:  Russel  Walker,  Kellogg  School   Data-Driven Marketing:11 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  12. 12. Data-Driven Marketing:12 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  13. 13. •  We  don’t  know  how.     •  We  don’t  have  the  right   metrics.     •  We  don’t  know  where  to   start.   •  The  problem  is  not  too   lihle  data;  quite  the   opposite,  we  have  lots  of   data  but  none  of  it  is   useful.   Data-Driven Marketing:13 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  14. 14. •  A  marke<ng  divide  exists  between  organiza<ons  that  do  data-­‐ driven  marke<ng,  use  marke<ng  metrics  and  analy<cs,  and  those   that  do  not.   •  The  15  essen<al  metrics  quan<fy  the  vast  majority  of  marke<ng   ac<vi<es   •  Research  shows  that  firms  that  ‘keep  score’  for  marke<ng  and  use   analy<cs  have  significantly  beher  financial  and  market  performance   compared  to  those  that  do  not   •  Measurement  combined  with  analy<cs  drives  5X  or  more   performance  gains   •  There  is  a  systema<c  approach  to  develop  a  data-­‐driven  marke<ng   strategy:  You  don’t  need  100%  of  the  data  to  get  started   Data-Driven Marketing:14 Leveraging analytics for 5X performance gains in marketing 4/26/12  
  15. 15. Data-Driven Marketing:Leveraging analytics for 5X performance gains in marketing

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