Data-Driven Marketing: Five Insights
Mark JefferySenior Lecturer of Executive Education, Kellogg School of Management and Founder, President and CEO, Aquimo [email protected]
© Mark Jeffery 2014, All Rights reserved
Data-Driven Marketing: Five Insights
Your challenges:
• I don’t have the right metrics?
• It’s not that I have too little data, I have too much data?
• I don’t have the time or the resources to apply data-driven marketing?
• I don’t know where to start?
• I’m not sure what will have the most impact?
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Data-Driven Marketing: Five insights
1. The marketing divide
2. Big-data analytics works for Big and Small Companies
3. How to create the “wow that’s exactly what I need!” effect
4. All customers are not equal: Value based marketing
5. How do you do it? Data mining for bottom line impact
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Data-Driven Marketing: Five insights
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• UK's second-largest food retailer
– More than 400 stores, serving over nine million customers
– 10 million transactions per week, 200 million items of data,
75,000 SKU’s
• Segment the market
– 10 segments based on spending and foods selected
– ‘Quality oriented’ to ‘less affluent family’
• EDW technology enables accurate profiling of customer
mix for each store
– Key segment; ‘foodies’ – passionate about food
• 21% of customers and 24% of spend
• Geographic specific – 70% of some London branches are
foodies, only 6% in parts of West Midlands
– Stores remodeled and customized based upon these data
– 75,000 SKU’s analyzed: 30,000 SKU’s contribute < 1%
• Rationalization based on customer profiles for each store
• Results
– Overall sales increase of 12%
– 14,000 SKU’s are candidates for delisting = £12 million of
purchasing spend that can be shifted to bestsellers
Data-Driven Marketing: Five insights
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• Weekly Scoring of 14 million customers
• Targeted email marketing based upon propensity model
• Not more than one Email Sent to a customer per week
– If opened or clicked may receive an email the next week.
– If no response wait 4 weeks to send another email
• Results
– 29 – 50% increase in take rates for all Email campaigns
– 20 – 40% more email subscriptions compared with the previous year without targeting
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Source: Mercer Management Consulting
0% 20% 40%-$5,000
$5,000
$15,000
$20,000
$0
100%60% 80%
$10,000
CustomerLTV($)
% of Customers 5.2% of customershave negative LTVs
Lifetime Value (LTV) Distribution of Existing Wireless Customers
18% of customers make up 50% of total portfolio value
Customer A has an expected LTV of $10K and is a mobile manager: retain her
A
Customer B has an expected LTV of $800 and is a soccer mom: cross-sell long distance, DSL
BC
Customer C is unprofitable -pays late: increase late fees or encourage pre-paid service
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Data-Driven Marketing: Five insights
Accounts (In order of CLTV from high to low).
Pro
ject
ed C
LTV
…and not spend any
resources on these.
How can we keep these?
Total churn rate is approx25%. This is a BIG
opportunity.
Strategy: Acquire, retain and grow profitable customers through analytic marketing
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Value Based Marketing:
Data-Driven Marketing: Five insights
1. The marketing divide
2. Big-data analytics
3. “Wow that’s exactly what I need!”
4. Value based marketing
5. Data mining for bottom line impact
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