The Marketing Data Warehouse Peter Nolan

Introduction  What is possible today?  What is the opportunity?  Why is the opportunity so large?  Some examples from Tom Peters  What are people saying?  Classic Marketing Data Warehousing applications  Case studies  Getting Started  How would your company benefit?  A great way to get started

What is Possible Today?

What Is Possible?  New technologies/public data  Data Warehouse Techniques  “Mass Customisation”  Marketing Campaigns  Highly targeted  Highly personalised  With returns like never before

What is the Opportunity?  How much money is spent on marketing?  What is the incremental profit improvement?  Double that  Simply put the opportunity is to: “Double the Effectiveness of the Marketing Dollar”

Why is the Opportunity So Large?  “Half of all the money I spend on Marketing is wasted, I just don’t know which half.”  The Marketing Data Warehouse will tell you which half  Then you can choose to spend it where it does make a difference

Examples From Tom Peters  Reducing Customer Defections  5% reduction  30-80% Profit Improvement  Targeting New Customers  Kimberly Clark Case Study

What are People Saying?

 Tom Peters  We are living through a shift from selling virtually everyone the same thing a generation ago to fulfilling individual needs and tastes... by supplying... customised products and services. The shift [is] from “get the sale now at any cost” to building and managing... databases that track the lifetime value of your relationship with each customer.

What are People Saying?  Rapp & Collins  it may almost be time to replace “location, location, location” with “database, database, database”.

What are People Saying?  Stanley Davis - Future Perfect  Mass Customisation  Standardise the Commodity and Customise the Service that Surrounds It  Example: Telephone calls

What are People Saying?  Philip Kotler - Marketing Management  Mass markets are fragmenting into micro- markets; multiple channels of distribution are replacing single channels... The winners are those who carefully analyse needs, identify opportunities and create value- laden offers for target customer groups that competitors can’t match.

Classic Marketing Data Warehousing Applications

A Classic DW Application Targeted Marketing CUSTOMER SERVICE ADMIN CONTACT MGT DISTRIBUTION CAMPAIGN MGT ANALYSIS Marketing Cycle

Target Marketing  Situation  Legislation changes causes confusion for thousands over whether to retire. June 94.  Solution  Profile customer database, select all those people who would benefit from retiring before legislation change and target them for rollover products.  Value  $440M deposited into rollover fund. Some $300M up on product managers forecast.

Cross Selling  Situation  Customer wishes to cross-sell existing clients  Solution  Provide analysis capability to profile existing clients to determine who owned the product. Use DW to select targets who did not own the product.  Value  Response rate for new product purchase direct mail 18%. (As opposed to 2% for third party mailing list)

Up Selling  Situation  Customer wishes to up-sell existing clients  Solution  Provide ability to select existing customers to upgrade products  Value  Response rate for upgrade direct mail 33%

Getting Started

How Would Your Company Benefit?  Double you Marketing Dollar Effectiveness?  What would that do for your company?

A Great Way to Start  Run 3 marketing campaigns to 3 similar groups  Campaign 1  Run like any other campaign, capture everything  Campaign 2  Targeted using DW, capture everything  Campaign 3  Targeted using DW + lessons learned from Campaign 2  Usual result: 2-4 times better response  Double your marketing dollar effectiveness

Summary  What is possible today?  What is the opportunity?  Why is the opportunity so large?  Some examples from Tom Peters  What are people saying?  Classic Marketing Data Warehousing applications  Case studies  Getting Started  How would your company benefit?  A great way to get started

Thank You for Your Time!