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Precision Marketing



Precision Marketing developed with roots since 1996 web project

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Precision Marketing

  1. 1. Precision Marketing - a framework for deliver better success Internet Marketing Conference Gothenburg 29-30 April 2004
  2. 2. The TravelMate 1996 <ul><li>Profiled and segmented international end users due to their needs and wants maped to commercial interests. </li></ul><ul><li>We knew when,who,where from, where to and what a travelmate p l a n n e d to travel in a global context. User context based ads. </li></ul><ul><li>Destionation oriented. Not compete with local sales related services and products. </li></ul><ul><li>But mass marketing was the key to success at that time ! </li></ul>
  3. 3. TravelMate connecting intenational travellers
  4. 4. Some new marketing conditions to consider and the end of only mass marketing <ul><li>Competition is hard and only ”one click away”. A Internet user sometimes only give you 20 seconds to deliver. </li></ul><ul><li>Consumers on Internet do ”comparison shopping” </li></ul><ul><li>Consumer charateristics and buying behavior may differ when you perform as a virtual or physical consumer </li></ul><ul><li>Overall brand loyality is on the decline </li></ul><ul><li>Markets are becoming increasingly fragmented </li></ul><ul><li>Massmarketing is expensive, not measureble and may not give the best value for the money to reach your target segments </li></ul><ul><li>Many still treat on-line and off-line marketing as separated islands </li></ul>
  5. 5. Marketing is a world of ”predictable imbalance” <ul><li>” We need to tie marketing spending more tightly to sales potential and use new approaches to target customers more effectively.” </li></ul><ul><li>A.G. Lafley, CEO P&G </li></ul><ul><li>” Our portfolio contains not one mass market brand, whether its Tido or Old Spice. Every one of our brands is targeted.” </li></ul><ul><li>Jim Stengel, CMO, P&G </li></ul><ul><li>Source: BusinessWeek July 2004 </li></ul>
  6. 6. Profit/none profit client analysis – which customers are profitable? <ul><li>Marketing/profit analys Fleet Financial USA </li></ul><ul><li>20% of its corporate clients = 80 % of its profits </li></ul><ul><li>60% of its corporate clients = break even </li></ul><ul><li>20% of its corporate clients = costing money </li></ul><ul><li>Source: Fleet Financial, Gartner Study </li></ul>
  7. 7. What do we want as marketers? <ul><li>We all want to learn how to understand the market(s) and how to reach and target the ”best” possible prospect(s) so we can give the best personalized offer and keep him happy over time </li></ul><ul><li>How can we do that? </li></ul>
  8. 8. Is technology important to make concept(s) succesful? <ul><li>Customer relationship management (CRM), Partnership relation management (PRM), Geoprofiling, Precision Marketing, Predictive Analysis, Customer profitability, Enterprice Decision Management EDS, Context-sensative ads, Context sensative points (CSP) Economic segmentation, Loyality segmentation, Lifetime Value Customers, (LVC), Rule Management Systems, Massmarketing, One-To-One Marketing, Datamining, MDA (Model Driven Architecture), Designated Market Areas (DMAs), CPM, Profile analysis tools, Geodemographics, Behavioral segmentation, Customer retention, Customer Intelligence, Multidimensional profiles, Micro-zoning, just-in-time marketing, Target Marketing, Pattern analysis, Webservices.... </li></ul>
  9. 9. Some company judge their techology to be their greatest asset <ul><li>Availability 2001 97 % , 2004 99,94 % </li></ul><ul><li>7% of revenue goes to improvment of technology </li></ul><ul><li>40 code developers </li></ul><ul><li>Peak utalization 7,8 Gigabyte </li></ul><ul><li>5 miljon of code lines </li></ul><ul><li>720 miljon page views per day </li></ul><ul><li>5000 servers (50% is back up) </li></ul><ul><li>Growing by 1000 new servers every three month. 26 databases i 3 different locations </li></ul><ul><li>Everyday 25 miljon outbound e-mails. 2 miljon new listings. </li></ul><ul><li>Bids 2 miljon. Auction sales $85 miljon per day. </li></ul>
  10. 10. Precision Marketing definition <ul><li>Precision Marketing — The art and science of delivering the right message to the right customer(s) throught the right channel at the right point in time, so as to increase revenues, reduce costs and maximize the marketing spend. </li></ul><ul><li>So what does this really mean by putting business, marketing and technology together? </li></ul><ul><li>” But how to be able to delivering the right message at the right time through the right channel to the right people ” </li></ul><ul><li>You need hardware, software and peopleware! </li></ul>
  11. 11. Precision Marketing focus cont... <ul><li>Precision marketing try to improve overall productivity of marketing spend to attractive subsegements, by using economic segementation and scientific methods like predictive analytics to understand the longt-term value of individual customers and prime customer segments </li></ul><ul><li>Marketing have to be measurable and focus to attract, retain and leverage the long term loyal and profitable customer(s) ex. going from Gross Rating Points (GRPs) to Context Sensetive Points (CSPs) for ad relevance measures </li></ul><ul><li>Uses models, marketing optimization algorithms and artificial intelligens to analys transaction data in realtime with adapted offers presented to customers based on their personal profiles. Try to do the best possible match among offers, customers and channels </li></ul>
  12. 12. Precision marketing campains – how and what to do? <ul><li>You need to combine the science of database modelling, market segmentation, profile scoring and predictive analytics with the art of branding a n d creative development. </li></ul><ul><li>Basic three steps: </li></ul><ul><li>1. Capture and manage customer data </li></ul><ul><li>2. Analyze the data to derive strategic insights </li></ul><ul><li>3. Use the insights to drive more efficent and profitable customer interactions </li></ul>
  13. 13. ” Blueprinting” the ideal customer <ul><li>Attract </li></ul><ul><li>Map the ”genetic makeup” of desirable customer segments, Identify best customer look-alikes, deliver narrowly-defined marketing messages and offers to ” the right people” </li></ul><ul><li>Retain </li></ul><ul><li>Create value-based segmentation models, launch next-generation loyalty programs, deploy just-in-time marketing actions </li></ul><ul><li>Leverage </li></ul><ul><li>Use advanced decisioning technologies to ensure maximum profitability in cross-selling campains. Incorporate referral engines. </li></ul><ul><li>Advanded technologies and analytics can be used to effectively to drive value creation across all stages of the life cycle. </li></ul>
  14. 14. MarketSmart Decision System (MSDS) <ul><li>MSDS integrates all of the technology and analytics services needed to perform </li></ul><ul><li>Uses context-sensitive acquisition </li></ul><ul><li>Can do cross-selling and retention programs </li></ul><ul><li>Also enabling multi-product, multi-channels </li></ul><ul><li>channel companies to drive more efficient and profitable customer interactions </li></ul>
  15. 15. Segmentation and profiling <ul><li>Example of Off-line segmentation basis; </li></ul><ul><li>Each market segment consists of households that share similar interests, purchasing patterns, financial behavior, and demand for products and services. </li></ul><ul><li>Households within a segment are generally homogeneous, households in other segments are differentiated by their unique interests and behaviors. </li></ul><ul><li>These common patterns allows you to links targeting programs directly to specific segments that represent the most profitable customers and prospects. </li></ul><ul><li>Meaning that analysis of patterns must be very important! </li></ul>
  16. 16. Tesco retail UK - Clubcard Program <ul><li>Is used to attract, retain and leverage to its 13 million custom relationsships </li></ul><ul><li>Uses its members transactions and loyalty patterns </li></ul><ul><li>Created many different clubs that you can join ex World of Wine, Baby Club etc </li></ul><ul><li>Tracking 200 milj in-store-purchases every day </li></ul><ul><li>5000 customer ”needs” segments </li></ul><ul><li>Sends out 300.000 variations of any given offer </li></ul><ul><li>Allows them to give discounts only to price-sensative customers </li></ul><ul><li>Saves Tesco about £ 300 milj per year </li></ul>
  17. 17. Thank You! There are more slides and explanation pls contact me if you are interested to know more! More info: [email_address]
  18. 18. How we know which factors makes a buing decision happend for different customers? <ul><li>Is it possible to specify and profile user segments depending on consumer offline and online behavour? Is it possible to collect and develop a richer understanding of your users just in time profiled and analysed so you can leverage your strengths, and better position your brand(s) and offer? </li></ul><ul><li>Do demographic, lifestyle, and brand user/volume profiles of current and target markets differ in the world? </li></ul>

Editor's Notes

  • Meaning
  • It knows what people buy and what they not buy, and understand price sensivity. So promotions is mainly not used to subsidize and ist more of rewarding its loyal customers. Tesco understand customer transactions and loyalty patterns and what each type of customers values most in terms of lifestyle preferences.,
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