The document discusses the importance of marketing databases for optimizing customer engagement across multiple channels. It outlines key steps for companies to take such as identifying data sources, normalizing data, resolving demand across channels, and applying intelligent segmentation and targeting. Regular testing and adjustment of allocation rules and campaigns is also recommended. The overall message is that companies with a robust marketing database that provides customer intelligence will have the lowest costs, highest returns, and strongest competitive advantage going forward.

2. Al Bessin, Executive Vice President 4 October 2011 Affordable Databases: Can You Afford Not To Be Using a Marketing Database

3. Agenda Consumer Behavior Marketing Databases Fundamental Needs for All Marketers Examples

4. Trends: Consumer Behavior, Economics and Marketing

5. Message and Contact Complexity Advertising Direct Mail Email Catalogs Targeted Ads Search Marketplaces Social Media Affiliates

6. The Rise and Fall of Free-Wheeling Consumer Spending The Housing Bubble: a promise of infinite return on investment Seemingly Infinite Credit Birth of the Spandex Wallet

7. Today’s Competitive Challenge Reduced disposable income Reduced credit Who is the competition?

8. The Challenge “ Catalog” Internet Stores Silos Order Method Call Center Website Stores Marketing Media Catalog SEO/ SEM Advtsg Email Social Affiliate Lack of Clarity

9. Lack of Integrated Marketing Planning Competing reporting schemes More demand used to justify marketing expense than total demand for the enterprise Total Demand Print Email

10. Marketing Databases

11. Convergence of Traditional DM with Ecommerce One Dimensional Customer-Centric Transaction Centric Traditional Direct Marketing Online Marketing Multi-Dimensional Customer Centric

12. Optimizing the Customer Journey Customer Value Average High Time Low Target Acquire Retain Grow First Purchase Up-Sell Dialogue Optimized Develop

13. Need to Support Push and Pull Marketing Catalog Email Flyer Email SEO SEM SEO SEM

14. The Bar Is Being Raised Customer Value Segments Prog A C $$$ $$ $ C1 Universal Segmented Behavioral Campaign #1 Campaign #2 C2 C1 C2 C1 C2 C C Prog A1 C C C Prog B1 C C C Prog B C C C Prog C C C C

15. Optimizing Campaigns Not all customers are created equal Target the best audience groups based on contact history Move beyond conventional RFM segmentation Market according to purchase preferences Core Segment, Individual Product Buyer, National Account Determine which offer to use for selected audience Optimize the marketing mix based on customer preferences Catalog? Direct Mail? Outbound Calling? Key Account Rep? Emails? Banner Advertising? Facebook? CREATIVE MESSAGE CHANNEL CONTACT MEDIA OFFER AUDIENCE

16. The Bottom Line Optimize Balance marketing spend Multiple media Return on investment Tailor to type of contact

17. Steps for Marketing Database

18. Customer Intelligence Requires Marketing Strategy Examination Strategy defines needs Strategy today is not strategy tomorrow Seasonal business comps annually … so, start with discovery of both technical requirements and strategic requirements

19. Identify Your Data Sources and Elements Contact Information – all channels Resolve email opt-ins to the database Promotional History – all channels Transactional history Website Reporting Third Party Feeds

20. Normalize Data Apply Hygiene to resolve account duplication

21. Resolve Channel Demand Remember that this is a modeling exercise Retain input elements

22. Aggregate Data Logically Apply experience and aggregate data to facilitate reporting Don’t rely on information systems staff to do this – this is a marketing exercise!

23. Resolving Multiple Channels Allocation/Attribution

24. History Source Code Collection Matchbacks to Mailings Last Touch Reporting On-line Media Vendor Reporting Last Touch Plus Push Reporting Attribution

25. Essential Beginning: Apply Hygiene!

26. Waterfall model Provide allocation windows for Push Campaigns Collect referring source for transactions At a Minimum

27. Demand Allocation Model Developed tools to allocate campaign results across competing media Allocation Rules Order Management Feed Allocation Model Output Reporting Channel Demand Allocated Demand by Medium Demand Catalog $371,587 Catalog $527,742 Website $322,694 Email $108,128 Advertising $18,245 Paid Search - Brand $7,843 Email $89,435 Paid Search - Competitive $45,889 Total $801,961 Natural Search - Brand $8,457 Natural Search - Competitive $86,384 Comparison Shopping Engines $0 Google Analytics Feed Advertising $17,518 Allocated Demand by Medium Demand Total $801,961 Paid Search $85,971 Natural Search $134,674 Comparison Shopping Engine $0 Other $191,484 Total $412,129

28. Tips

29. Essential Beginning: Apply Hygiene!

30. Time is your enemy… …think quick wins as well as big wins! Use the 80:20 Rule and beware of Opportunity Cost Now! Future

31. Any response measurement scheme is a model – there is no perfect system Direction appears long before absolute clarity

32. Make testing part of every marketing strategy and plan Test Test A Test B Control

33. Separate Branded from Competitive terms when evaluating Search results “ Stroller ”

34. Examples The Promise of Channel-Agnostic Customer-Centric Data

35. Key Intelligence Which media drive acquisition, retention, and reactivation Your cost to acquire new buyers by medium The “lifetime” value of buyers and how it differs by medium Merchandise performance by medium

36. Acquisition Costs by Channel Optimizing acquisition efforts requires and understanding of how much different media cost initially

37. Buyer Value by Acquisition Media

38. Rebuy Rate

39. Order Value Analysis

40. Merchandise Reporting by Medium Which channels drive categories?

41. Product Category Cross-over Identify combinations of Product Groups that buyers are grouped around

42. Develop your marketing strategy Define and collect data feeds Apply intelligent hygiene and normalize the housefile Push through the demand allocation Aggregate marketing data intelligently Test and adjust Summary – Steps to Take … Get experienced help

43. Important! Know your data (or get to know it!) Clean up historical data Source codes and campaigns Organize and Categorize Think how data roll up to give you overview Set time aside to do this right Get strategy input

44. Pitfalls to Avoid Not Having team and executive commitment Data not clean Trying to manage too many disparate elements Not testing allocation variables Mixing attribution and allocation improperly Biasing results to meet goals

45. Fastest to react, most confident to act Lowest advertising costs, highest return on marketing investment Ability to target the best, limit contact to the least interested Customer differentiation The company with the best data and account intelligence will win! Database marketing will get more difficult and sophisticated

46. Al Bessin Executive Vice President CognitiveDATA 512-351-8197 [email_address]