This document discusses direct and database marketing. It provides an overview of database marketing strategies and techniques, including profiling customers, analyzing customer data to segment markets and target specific groups, and using customer information to personalize communications over time in order to build loyalty. It also covers best practices for data management and measuring the performance of database marketing programs.

1. Direct & Database Marketing E-Commerce:

2. Direct & Database Marketing E-Commerce & DDM: Internet (remembering e-business class) Behavioural Targeting Data management system Evolution of strategy

3. Direct & Database Marketing E-Commerce & DDM: Cases & Articles: About Lands’ End Lands’ End Targeting Lands’ End CSM

4. Direct & Database Marketing E-Commerce & DDM: Cases & Articles: AMH How the web has changed database marketing Customer relationship marketing on the web* Customer service on the web How to measure success on the web

5. Direct & Database Marketing E-Commerce & DDM: Cases & Articles: Amazon.com Amazon Case 1 Amazon 2004 Annual Report (Intro) Amazon PR Coinstar Gift Certificate Amazon PR eBook Amazon PR Weekly Series

6. Direct & Database Marketing E-Commerce & DDM: Cases & Articles: eBay.com eBay CSFB Presentation eBay Skype Acquisition eBay Presentation China eBay Annual Report eBay JP Morgan Presentation

7. Direct & Database Marketing “The New Direct Marketing is an information driven marketing process, made possible by database technology, that enables marketers to develop, test, implement, measure, and appropriately modify customized marketing programs and strategies.” New Direct Marketing, 3 rd Edition, by David Shepard Associates

8. Direct & Database Marketing Database Definition: A marketing database is a comprehensive collection of interrelated data serving multiple applications, allowing timely and accurate on-demand retrieval of relevant data, and having a data management system independent of application.

9. Direct & Database Marketing Key aspects: Interrelated data Multiple applications Data management system

10. Direct & Database Marketing Alternative Definition: A marketing database is a list of customers and prospects records that enables strategic analysis, and individual selections of communication and customer service support. That data is organized around the customer.

11. Direct & Database Marketing Introduction: Commercial Databases: What external commercial databases are Who operates them What they consist of What direct marketers use them for The process of management of external databases

12. Direct & Database Marketing Segmentation Analysis: Customer profiles Customer needs Targeting new prospects based upon existing customer profiles Source of lists of prospects for new market or product/service development

13. Direct & Database Marketing External databases, marketer uses: Want to add (expand) data about existing customers Understand existing customers better Want accurate profiles of intended target Compile a list of interested individuals

14. Direct & Database Marketing External databases: Consists of records of individuals, available for sale.

15. Direct & Database Marketing External databases: Geodemographic databases Lifestyle databases

16. Direct & Database Marketing Geodemographic: Often based upon government run census Profilers perform cluster analysis Match with postcode May append with data from additional sources Allocate description of “typical” household profile

17. Direct & Database Marketing Lifestyle databases: Attitudinal data Opinion data Lifestyle data Product purchase data Current brand & product preferences Great research and segmentation tool

18. Direct & Database Marketing Profiling process: Step 1: Matching process of client’s internal data with commercial database data Geodemographic: can match via postcodes Lifestyle: can match individual names & addresses

19. Direct & Database Marketing Profiling process: Step 2: Client’s matching records are appended with data from commercial database, to make a more complete record.

20. Direct & Database Marketing Profiling process: Step 3: Matching records used for research &/ segmentation Clustered descriptions Reveal customer segments

21. Direct & Database Marketing Profiling process: Step 4: For new market targeting: Identification of “lookalikes” Generate prospect list (DDM commercial databases provide major efficiency advantages)

22. Direct & Database Marketing Issues regarding “conventional” versus database market research: Cost Accuracy Representativeness Collaborative (combined products)

23. Direct & Database Marketing Economics: The cost versus benefit of use of commercial databases: Exhibit 4.4; page 92-92

24. Direct & Database Marketing Strategic Options: Market penetration: Lists of competitors’ customers based upon purchase behaviour List of prospects generated from profiles of existing customers

25. Direct & Database Marketing Strategic Options: New product development: External data used for marketing new products New market development: A new type of customer

26. Direct & Database Marketing Commercial Databases: Examples: Claritas Experian

27. Direct & Database Marketing The Database - Interactive Marketing’s Essential Difference: who our customers are what they buy leads to what they want from us how much they are worth to us = create relationships over time

28. Direct & Database Marketing Handling Customers ‘Over Time’ : The customer database allows you to understand your customers history with you and so predict their future needs

29. Direct & Database Marketing Database marketing: customer focus get to know customer because you start recording your transactions with them company initiates contact that invites a response

30. Direct & Database Marketing Direct & Database Marketing: Uses mass media when addressing new prospects Uses personal media-direct mail, telemarketing, when developing relationships with existing customers Focus on customers, rather than products get to know customer because you start recording your transactions with them

31. Direct & Database Marketing Example: Why Databases Fail (.ppt) CRM Strategies in Healthcare (.ppt) Customer Acquisition & Modeling (.ppt) Data Mining Data (.ppt) pp1-48 Data Mining 101 PP-34-77

32. Direct & Database Marketing Gartner Group: “ Data mining is the process of discovering meaningful new correlations, patterns and trends by sifting through large amounts of data stored in repositories, using pattern recognition technologies as well as statistical and mathematical techniques.”

33. Direct & Database Marketing Segmentation & Targeting: Use purchase behaviour to segment by customer value Use purchase behaviour to segment by product need Use profile data to relate to campaign response (ROI) Use profile data to target new customers accurately

34. Direct & Database Marketing Applications Setting budgets Understanding customer’s value Understanding existing customers as individuals Targeting “spend” to maximize ROI Profiling existing customers to target new prospects

35. Direct & Database Marketing Applications/Techniques utilized Setting budgets: use LTV analysis to set allowable marketing spend Understanding customer’s value: use FRAC & LTV analysis

36. Direct & Database Marketing Applications/Techniques utilized Understanding existing customers as individuals: use profiling modelling techniques Targeting “spend” to maximize ROI Profiling existing customers to target new prospects

37. Direct & Database Marketing Data Sources: List purchase Data-building schemes Introduce new contact channels

38. Direct & Database Marketing Data Sources: Direct contact companies: On-line input Customer service department records Responses to DM communications Accounting records Billing systems Sales transaction records/order processing

39. Direct & Database Marketing Data Sources: Indirect contact companies: Product registration, warranty data Credit card details Subscription details Questionnaire responses In-store offer details Requests for product information Events/promotions requiring a response Direct channels established

40. Direct & Database Marketing Data Management: Manage the data sources Manage the data entry verification, validation, de-duplication, merge-purge Manage the database In-house, outsource? Manage the applications

41. Direct & Database Marketing Direct & Database Marketing: measurement Marketers analyse behaviour to predict best responding people & the best offers to make

42. Direct & Database Marketing Direct & Database Marketing: Is more expensive, on a per-customer basis A way of buying a closer relationship customer First individual information Subsequent precision & control in customer contact I.e., Marketers analyse behaviour to predict best responding people & the best offers to make

43. Direct & Database Marketing A Complete System of Marketing: market analysis and research segmentation and positioning making an offer creating relationships … are all done within a database marketing framework

44. Direct & Database Marketing Reasons for growth: Business: Ever more competition Drive for cost-effectiveness Interest in consumer retention & loyalty Continuing drop in computer processing costs

45. Direct & Database Marketing DDM Advantages: Lead grading Customized targeting at the right time New information & past results help formulate strategy

46. Direct & Database Marketing DDM Advantages: Information can drive new programs & fuel new revenue sources Information can foster new new services & generate repeat orders Ongoing communication efforts can increase customer loyalty