Dmaw Presentation July 13 0 Final

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Presentation at the DMAW Bridges conference. The story behind the first billion dollars. a case study on customer profiling, segmentation and precision targeting

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Dmaw Presentation July 13 0 Final

  1. 1. By Frank Peterson Jr., Vice President MGI Jorge Restrepo, President EurekaFacts Direct Marketing Optimization: The story behind the first Billion dollars Presented at the 2006 Direct Marketing Association Conference
  2. 2. The Story <ul><li>Virginia Commerce Bank is a Virginia state-chartered bank that commenced operations in May 1988. The Bank pursues a traditional community banking strategy, offering a full range of business and consumer banking services through sixteen branch offices, two residential mortgage offices and one investment services office. </li></ul><ul><li>VCB has grown significantly since we started our campaign in 2003. Assets grew from $780 million in 2003 to $1.8 Billion in 2006. The winning strategy, owed to strong management and a reputable brand, includes direct marketing in its mix. </li></ul><ul><li>A targeted direct marketing effort using data analysis and creative genius contributed to this outcome. </li></ul><ul><li>This success story shows how optimized direct marketing can be part of a winning strategy. The information presented will discuss key elements of the marketing optimization process. </li></ul>
  3. 3. The Landscape <ul><li>Aggressive promotion by many competitors, some very large. </li></ul><ul><li>New players entering the field and consolidation of others through mergers and acquisitions. </li></ul><ul><li>Competition for new customers in the market can be extreme. </li></ul><ul><li>Increased distrust in corporations and their offerings. </li></ul>
  4. 4. The Campaign <ul><li>Integrated marketing campaign where direct mail is the catalyst for response. </li></ul><ul><li>Built on strengths of the brand. </li></ul><ul><li>Utilize available data and personalization technologies to market one-on-one. </li></ul><ul><li>Support offers with materials including web site, POP materials, staff involvement. </li></ul><ul><li>Prioritize and implement a constant effort. </li></ul><ul><li>Test, measure and improve. </li></ul>
  5. 5. Components <ul><li>Customer profiles. </li></ul><ul><li>Segmentation, targeting and positioning strategy. </li></ul><ul><li>Developed a set of offers that increased loyalty and increased deposits among current customers. </li></ul><ul><li>Developed an acquisition strategy that brought new customers. </li></ul><ul><li>Direct marketing to strengthen service penetration. </li></ul><ul><li>Supporting communications include POP, web and other materials. </li></ul><ul><li>Campaign evaluation. </li></ul>
  6. 6. Customer Profiling <ul><li>Develop customer profiles with demographic, attitudinal and usage data </li></ul><ul><ul><li>Data overlays to better understand the demographics of the customers </li></ul></ul><ul><ul><li>Understanding of the lifestyles </li></ul></ul><ul><ul><li>Product/Service usage </li></ul></ul><ul><ul><li>Understand other key factors such as geographic location </li></ul></ul><ul><li>Identify threats and opportunities </li></ul><ul><ul><li>Identify hot buttons & barriers </li></ul></ul><ul><ul><li>Understand context </li></ul></ul>
  7. 7. Segmentation <ul><li>Identify the market segments and niches </li></ul><ul><li>Segment the customer database using demographic, attitudinal, behavioral data. True segments are: </li></ul><ul><ul><li>Homogeneous within, heterogeneous across </li></ul></ul><ul><ul><li>Respond similarly to marketing stimuli </li></ul></ul><ul><ul><li>Can be reached </li></ul></ul><ul><li>Evaluate possible segmentation schemas and pick target segments. </li></ul><ul><li>Characterize segments. </li></ul><ul><li>Identify predictors of response. </li></ul>
  8. 8. Customer data Usage Demographic, household data Geography, geo-demographics, etc Targeted offers Targeted offers
  9. 9. Offer Targeting <ul><li>Identify optimum offers per segment </li></ul><ul><li>Develop offer sequence </li></ul><ul><li>Support personalized one-to-one offers within a segmented marketing approach </li></ul><ul><li>Provide optimum mix information </li></ul>
  10. 10. Continuous Improvement <ul><li>Success achieved through test and measure </li></ul><ul><li>Monitor key business measures </li></ul><ul><li>Direct mail optimization / campaign metrics </li></ul><ul><li>Testing includes offer, package, list, timing </li></ul>
  11. 11. Lessons Learned <ul><li>Define clear objectives </li></ul><ul><li>Build and deliver on your brand promises </li></ul><ul><li>Segmentation, targeting and positioning is key </li></ul><ul><li>Make maximum use of data, creative and personalization technologies </li></ul><ul><li>Integrated campaigns across channels have higher impact </li></ul><ul><li>Loyalty building is an ongoing effort </li></ul><ul><li>Test, monitor and improve </li></ul>
  12. 12. Discussion Questions & Discussion

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