Data Driven Marketing For Dummies E-Book

David Semmelroth

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 504

Veröffentlichungsjahr: 2013

Beschreibung

Embrace data and use it to sell and market your products Data is everywhere and it keeps growing and accumulating. Companies need to embrace big data and make it work harder to help them sell and market their products. Successful data analysis can help marketing professionals spot sales trends, develop smarter marketing campaigns, and accurately predict customer loyalty. Data Driven Marketing For Dummies helps companies use all the data at their disposal to make current customers more satisfied, reach new customers, and sell to their most important customer segments more efficiently. * Identifying the common characteristics of customers who buy the same products from your company (or who might be likely to leave you) * Tips on using data to predict customer purchasing behavior based on past performance * Using customer data and marketing analytics to predict when customers will purchase certain items * Information on how data collected can help with merchandise planning * Breaking down customers into segments for easier market targeting * Building a 360 degree view of a customer base Data Driven Marketing For Dummies assists marketing professionals at all levels of business in accelerating sales through analytical insights.

Leseprobe

Data Driven Marketing For Dummies®

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

Copyright © 2013 by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

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Library of Congress Control Number: 2013946293

ISBN 978-1-118-61584-3 (pbk); ISBN 978-1-118-61576-8 (ebk); ISBN 978-1-118-61583-6 (ebk); ISBN 978-1-118-61601-7 (ebk)

Manufactured in the United States of America

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Data Driven Marketing For Dummies®

Visit www.dummies.com/cheatsheet/datadrivenmarketing to view this book's cheat sheet.

Table of Contents

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Part I: Getting Started with Data Driven Marketing

Chapter 1: Data Driven Marketing 101: It’s All About the Customer

What Data Driven Marketing Is (and Isn’t) About

Database marketing versus direct marketing

Database marketing and customer ­relationship management

Marketing to businesses

Database marketing and small businesses

Focusing on the Customer

Getting customer data from your ­companies systems

Integrating data at the customer level

Managing contact information

Communicating with the household

The Database Marketing Campaign

The target audience

The offer

Your marketing message

Timing your message

Analyzing Customer Data

Grouping customers into segments

Building response models

Measuring Results

Chapter 2: Communicating Directly with Your Customers

So, What Is a Database Marketing Campaign?

Narrowing your focus to the target audience

Showcasing what you have to offer

Deciding how you will communicate

Determining when to send it

Hitting the Bull’s-eye: The Target Audience Isn’t Everyone

Understanding your customer base

Sizing your audience

Crafting Your Offer

Talking Directly to Your Customer: Using Data to Tailor Your Message

Don’t Sell Snow Shovels in July: Timing Your Message

Using Database Marketing Effectively: The Tactical Advantage

Customer-retention tactics

Cross-sell tactics

Upsell tactics

Beyond Mass Mailings: More Sophisticated Campaigns

Communication streams

Event-triggered messages

Chapter 3: The Forest for the Trees: Where Is the Customer in All That Data?

A Marketing Database Is About Your Customers

What makes a marketing database ­different

What’s in a marketing database

How a marketing database is organized

Some Assembly Required: Building the Customer Record

Cleaning up addresses

Updating addresses

Marketing Is a Family Affair: Understanding the Household

What is a household?

Why the household is so important

Growing Your Customer Base: Prospective Customers

Online shoppers

Call center data

Some other sources of prospects

No Trespassing! Respecting Your Customers’ Privacy

Protecting customer data

Sharing customer data

Keeping your customer informed

Some legal considerations

Chapter 4: Using and Managing Your Customer Contact Information

Contacting Your Customers

Mailing physical media

Firing off e-mails

Sending text messages

Dialing the phone

Don’t Waste Your Breath: Allowing Customers to Opt Out

Because it’s the right thing to do

Because sometimes it’s the law

Different Strokes for Different Folks: Understanding Customer Preferences

Opting in versus opting out

Other types of preferences

Chapter 5: Getting Your Message Out: Marketing Campaign Basics

Measure Twice, Cut Once: Don’t Skip These Steps

Cleaning up your mail file

Don’t contact people who don’t want to hear from you

Trust but verify: Proofing the mail piece

Planting a seed: How to spy on your mail vendor

Remembering What You Did: The Importance of Promotion History

It’s about more than just who you mailed

Documenting your mailing

Knowing When to Shut Up: Contact Management

Part II: Digging Deeper into Your Data: Analytics

Chapter 6: You’re Going to Need a Geek: Introduction to Analyzing Data

What Are Statistics, Anyway?

The Average Customer Doesn’t Exist: Understanding Variation

Growing or shrinking: Variation over time

The average car has 3 doors: Variation in groups

Misleading averages: Wide variation

Looking for Relationships in Your Data

Connections between customer traits

Campaigns Are Experiments: Using the Scientific Approach

Designing a measurable campaign: Control groups

Taking a sample: Selecting customers at random

Looking for Significant Results

Being confident in your measurements

Sizing your control group

Multitasking: Combining Customer Traits

Finding useful groupings of customers

The crystal ball: Making predictions

Chapter 7: Birds of a Feather Buy Together: Segmenting Your Customers

Understanding Demographic Data

Common types of demographic data

Where does demographic data come from?

If You Have to Ask, You Can’t Afford It: Grouping Customers Using Income Data

Fish where the fish are: Understanding affordability

Champagne taste or beer budget: ­Price-sensitive customers

Generation Gap: Grouping Customers by Age

Understanding generational differences

The generation gap and digital media

Grandkids? I Don’t Even Have Kids! Grouping Customers by Lifestage

What Would I Do With a Parka? Grouping Customers by Geography

Geographic groupings

Knowing where to focus

Sending your customers to the right place

Timing your communications

Staying Out of Trouble: Some Legal Considerations

Consult your attorney: Knowing your industry’s legal environment

Watching where you tread: Potential data landmines

Chapter 8: Getting the Most from Your Transaction Data

They Bought How Many? Simplifying Transaction Data

Just count ’em: Summarizing transactions at the customer level

Bucketing transactions into categories

Deriving customer attributes from transaction data

Transaction Data from the Web

Data related to e-mail campaigns

Page-use data

Grouping Customers Using Transaction Data

Finding and keeping your loyal customers

An example from the credit-card industry

Timing Is Everything: Understanding When Customers Purchase

The Christmas rush: Seasonal purchase patterns

Transactions and seasonal patterns

Responding to customer behavior

History Has a Way of Repeating Itself: RFM Models

Recency, frequency, and monetary value: The RFM framework

Building the model

Beer and Diapers: Market-Basket Analysis

Chapter 9: The Good, the Bad, and the Ugly: Understanding Customer Profitability

Revenue Isn’t Profit: Accounting for Costs

Allocating customer-specific costs

Allocating infrastructure costs based on usage

Tying cost back to the product

Not Rocket Science: Keeping It Simple

Understanding Household-Level Profitability

Retaining Your Profitable Customers

Using Profitability to Find New Customers

Dealing with Unprofitable Customers

It Takes a Lifetime: Understanding Changes in Customer Profitability

Recognizing movements in customer profitability

Calculating Customer Lifetime Value

Part III: Putting Your Data to Work

Chapter 10: The Tactical Advantage: Designing Data Driven Marketing Campaigns

Event-Triggered Campaigns: Understanding the Basics

Event-triggered campaigns versus mass mailings

Choosing a marketing channel

Campaign timing depends on data timing

An Ounce of Retention Is Worth a Pound of Lure: Holding on to Your Customers

Take it to the bank

Experience matters: Dealing with customer problems

Expiration date: Keeping the relationship alive

Sticker shock: Don’t just send them a bill

We miss you: Reactivation

If You Like That, You’re Going to Love This: Upselling to Your Customers

Why upselling works

Upselling service levels

Using bounce-back offers

Batteries Not Included: Cross-Selling to Your Customers

Cross-selling online

Back to bounce-backs

Welcome (Back) to the Neighborhood: Using Address Changes

Chapter 11: From the Window to the Counter: Getting Shoppers to Buy

Identifying Shoppers

Put me on your mailing list: Getting customers to raise their hands

Encouraging shoppers to register on your website

Not a Snap Decision: Understanding Your Customer’s Mindset

The decision-making process

Understanding the timeline for purchase decisions

So Why Didn’t They Buy? Overcoming Purchase Barriers

Identifying purchase barriers

Types of barriers

Social media and purchase barriers

Chapter 12: Crafting Your Marketing Message

Getting Your Message Heard

Getting past the recycling bin

Making sure your message is effective

Using Technology to Customize Communications

Customizing e-mail messages

Customizing offline communications: The power of digital printing

Using Images in Your Messages

Integrating your message with advertising campaigns

Using customized images in your communications

Getting the Product Right

Using Customer Profiles to Craft Messages

Speaking to the target audience

Customizing the message

Chapter 13: Using Customer Data Online

There’s More to E-mail Than You Might Think

Understanding how customers deal with spam

Collecting e-mail effectively

Tracking e-mail effectiveness

Serving Up Web Content Dynamically

Using information about browsing behavior

Using information about the customer

Recognizing Customers Online

Recognizing where they are: IP addresses

Recognizing who they are: Cookies

Customer Data and Search Engines

Part IV: The Feedback Cycle: Learning from Experience

Chapter 14: Learning Curve: Setting Up a Testing Plan

Using the Scientific Approach

Lesson Plans: Deciding Beforehand What You Want to Learn

You can’t test everything

Tracking responses

Taking a Random Sample

Selecting every nth record

Flipping a coin

Getting Significant Results: Sample Size Matters to Confidence Level

More about flipping coins

Sample size and confidence levels

Other factors that influence confidence levels

Mission Control: Using Control Groups

Control groups and measurement

Being careful: A couple of warnings

Out of Control: Reasons to Skip the Control

Small target audiences

Lost opportunities

Chapter 15: Getting to the Bottom Line: Tracking and Measuring Your Campaigns

Defining Responses Clearly: A Couple of Things to Keep in Mind

Counting responses

Closing the tracking window: How long do you wait for responses?

Getting a Handle on Costs: Some Common Metrics

Cost per thousand: CPM

Measuring Marketing Effectiveness in the Online World

Getting the customer to your website: Metrics related to e-mail campaigns

Understanding browsing behavior: Some simple web metrics

How Did You Do? Assigning Value to Your Database Marketing Campaigns

Understanding lift: Calculating your net response rate

The bottom line: Net revenue and return on investment

Chapter 16: Putting Your Geek to Work: Analyzing Campaign Results

Measurement versus Classification: Numeric Data and Categorical Data

Understanding Numeric Variables

Interval and ratio data: When averages are meaningful

Ordinal data: When averages aren’t meaningful

Analyzing Response Rates: The Simple Approach

Response distributions

Analyzing non-categorical data

Advanced Approaches to Analyzing Response Data: Statistical Modeling

The problem with cross tabs

What is a statistical model?

The model development process

Preparing your data

Building the model

Common Response Modeling Techniques

Classification trees

Creating response scores

Chapter 17: Sharing Customer Data Throughout Your Enterprise

Customer Data and Advertising

Buying traditional media

Buying “new” media

Assisting with Marketing Research

Selecting focus groups

Customer data and survey research

Customer Data and Product Development

Customer Data and Pricing

What is revenue management?

Beyond the airline industry

Customer Relationship Management

What is CRM?

Sharing data across customer touchpoints

Customer Data and Law Enforcement

Customer data and criminal investigations

Customer data and civil suits

Part V: The Part of Tens

Chapter 18: Ten (or So) Ways to Capture Customer Data

Identifying Customers with Loyalty Cards

A Variation on the Theme: Rewards Cards

Tracking Transactions with Offer Codes

Identifying Potential Customers with Newsletters

Offering Physical Information Packets

Encouraging Web Registrations

Building a More Robust Online Customer Profile

Customer Data and the Call Center

Customer Data at the Point of Sale

Purchasing Customer Lists

Purchasing Demographic Data

Chapter 19: Ten Resources for Information and Assistance

Joining the Direct Marketing Association

Subscribing to Industry Publications

Using Census Data

Getting Familiar with the Post Office

Keeping Up with the Regulatory Environment

Hiring Direct-Marketing Service Providers

Buying Creative Services

Grouping Your Customer Records into Households

Third-Party Data Providers

Analytic Software

About the Author

Cheat Sheet

Connect with Dummies

Introduction

Welcome to Data Driven Marketing For Dummies!

But … what do I mean by data driven marketing? All marketing disciplines are fundamentally concerned with attracting and retaining customers. They’re also all driven by data, in some sense. Marketers don’t just haphazardly develop communications. They take as much information into account as they have available.

Database marketing, or data driven marketing, is a discipline which takes the use of information to an extreme. Data driven marketing, as I use the term in this book, can be characterized by three things:

It’s a form of direct marketing: Database marketers develop communications that are delivered directly to consumers. This has traditionally been done through direct mail and e-mail. But the principles of direct marketing are being used with increasing sophistication to deliver marketing messages via text messages, social media, web content, and other electronic channels.

It’s fundamentally focused on individual customer information: The database in database marketing refers to a customer database which contains purchase history, demographics, and other information about each customer. This level of detail forms the basis for highly relevant, personalized, and customized messages. This relevance drives the effectiveness of database marketing campaigns.

It’s measurable: And it’s measurable in very precise financial terms. This measurability gives the database marketer the ability to create a marketing laboratory. Audiences, offers, messages, communication channels, and anything else related to a database marketing campaign can be tested to see how well they perform.

About This Book

Database marketing requires a variety of skill sets ranging from the technical to the creative. For this reason, database marketing departments tend to be made up of a diverse set of people. This makes them fun places to work. But it also poses some communication challenges.

I wrote this book partly to help fill that communication gap. I try to address the broad spectrum of work that needs to be done in the day-to-day operations of a database marketing department. In that regard, I’ve written this book with database and direct marketers in mind.

But customer information has grown and continues to grow more central to all sorts of business decisions and strategies. For this reason, this book will appeal to anyone in the business world who takes an interest in customer data and how it can be used to your advantage.

A small note: Within this book, you may see that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply type in the web address exactly as it appears in the text, pretending as though the line break doesn’t exist. If you’re reading this as an e-book, you’ve got it easy — just tap or click the web address to be taken directly to the web page.

Foolish Assumptions

I assume that if you’re reading this, you have an interest in database marketing. Though I try to define marketing-specific terms as I use them, it would be helpful for you to have a passing familiarity with basic marketing terms like target audiences and marketing channels. Plenty of introductory marketing books can give you that basic level of understanding if you don’t already have it, including Alexander Hiam’s Marketing For Dummies (Wiley, 2009).

I also assume that you’re not too put off by numbers. Database marketing involves a great deal of quantitative measurement. That doesn’t mean that you need to have an accounting background, though. Being able to calculate percentages is sufficient.

Though this subject can get somewhat technical, I make no assumptions about your knowledge of either technology or advanced mathematical methods. I attempt to explain in simple terms what the basic ideas are about. My focus is on helping you to communicate with your technical teams and vice versa. If you can add up a column of numbers in a spreadsheet, then you’re more than adequately prepared to read this book.

Some of the subjects in this book, particularly those that relate to building databases, assume that you have a fairly significant technology budget. Databases, software, and even maintenance require some level of investment. But even if this is not the case, the parts of this book that relate to developing and analyzing campaigns will still be relevant.

Icons Used in This Book

Look for these symbols to help you navigate through the text.

I use this icon to highlight specific suggestions for how to deal with a given situation.

This icon is used to point out information that you need to be aware of. I use it sometimes to summarize a point that I’m making in a section. I also use it to point out information that’s fundamental to a given topic.

There are a number of common traps that you can fall into when it comes to database marketing. What you don’t know can hurt you. I use this icon to point out situations where you need to tread carefully.

Beyond the Book

In the Part of Tens, I point out a number of websites and organizations that can provide you with information and support. Because I don’t have room to cover related topics in detail, I also refer through this book to other For Dummies books that do. In particular, Marketing For Dummies, Web Marketing For Dummies, and Social Media Marketing For Dummies (all published by Wiley) contain more detailed discussions of some of the topics in this book.

There is also some juicy, free, extra material for this book online. The cheat sheet and several companion articles can be found at www.dummies.com/extras/datadrivenmarketing/.

Where to Go from Here

I’ve worked hard to make the parts and even chapters of this book self-contained. You should be able to start anywhere in the book and feel comfortable that you haven’t missed too much to grasp what’s going on. Part I provides a good introduction to the topic of database marketing from an infrastructure perspective and might be helpful for Information Technology folks who are trying to understand how to meet the needs of their database marketing group.

In Part III, I focus on tying various database marketing strategies to specific business problems. This is a good place to go if you’re looking for ideas about how to address a specific goal.

Parts II and IV are largely concerned with the analysis of data. These are useful to non-technical marketers who want to better understand what sorts of things can be achieved through data analysis. They’re also useful to technical folks who understand advance statistics but have minimal experience in database marketing applications. For the non-technical marketers, I would recommend starting with Chapter 6 to ground yourself before moving on to other chapters.

To get the full flavor of everything, and for anyone who is starting fresh with this topic, you can go old-school and head directly for Chapter 1.

Part I

Getting Started with Data Driven Marketing

For Dummies can help you get started with lots of subjects. Visit www.dummies.com to learn more.

In this part . . .

Find out how database marketing campaigns are organized.

Explore the various types of customer data that are used in marketing campaigns.

Learn how to manage and protect your customer contact information.

Get to know your responsibilities regarding opt-outs and unsubscribe requests from customers.

Understand the critical steps in database marketing campaign execution.

Chapter 1

Data Driven Marketing 101: It’s All About the Customer

In This Chapter

Understanding what data driven marketing is

Compiling, managing, and analyzing customer data

Understanding the components of database marketing campaigns

Measuring and learning from your marketing campaigns

Data driven marketing means using data about customers to drive marketing communications. The use of consumer data in advertising was pioneered back in the 1930s by Arthur Nielsen of TV ratings fame. Nielsen’s data was, and still is, largely derived from survey research. In this book, I approach the subject of data driven marketing primarily, though not exclusively, from the perspective of database marketing.