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MARK2038 Data Base Marketing Strategies II
Week 7
Instructor: Santo Ligotti Email: sligotti@gbrownc.on.ca
Today’s Agenda
List ManagementDigital marketingOverview of the Internet Three e-business strategiesHow to evaluate marketing web sitesHousekeeping Discuss Assignment #4 Discuss Group Project
Objectives
In today’s lecture you will learn: List Management and the relevancy that list
rentals play in enhancing 1:1 Direct Marketing initiatives
How to search for lists and determine appropriate targets for either acquisition or retention strategies
Digital marketing Overview of the Internet Three e-business strategies How to evaluate marketing web sites
It all starts with the list
A list is a collection of names and addresses used by direct marketers to target offers.
The list determines: WHO will ultimately receive your message The total number of interactions possible for
the campaign The total projected revenue from the
campaign
List Types and Sources
House Lists
ResponseLists
Internal
CombinedList
RenterA
RenterB
RenterC
CompiledLists
House Lists
House List: an internal list compiled from internal customer records.
Can contain purchase data and purchase patterns
A valuable asset House lists can be “bartered” (traded) with
strategic partners
House List Sources
accounting recordsshipping recordsrecords of inquirieswarranty cardssurvey research results
Response Lists
Response List: an external list made up of individuals who have already exhibited a type of interaction desired by the firm.= “Another firm’s house list”
Examples: Buyer lists Attendee/Membership/Seminar Lists Subscription lists Donor lists
Compiled Lists
Compiled List: an external list that includes records without any previous indication of willingness to respond, but with some defined characteristics.
Examples: Consumer compiled list Consumer lifestyle-enhanced list Business compiled list (directories)
Example: Cornerstone Canadawww.cstonecanada.comOverview
Cornerstone provides creative prospecting solutions, and solutions for designing and executing database management strategies. They help initiate and sustain lasting relationships with your most profitable customers.
Currently, they broker over 1,400 lists containing over 265 million listings
History Founded in 1987, Cornerstone has constantly built on past successes to
become Canada's largest prospecting and database management resource
.
Check out their glossary of termshttp://www.cstonecanada.com/primer/glossary.asp
Check out their industry primers for direct mail, email lists, and merge-purge services
http://www.cstonecanada.com/primer/
Discuss
If you were purchasing a single response list for an upcoming direct mail campaign, which one would you choose?
List A: bought a similar product List B: bought within the categoryList C: bought something by mail
Affinitybought an identical product by mail
bought a similar product by mail
inquired about your product
bought within the category
bought something by mailany other action by mail
Affinity – Another Perspective• Active Customers Active Customers (bought in last x months)(bought in last x months)• Inactive Customers Inactive Customers (bought in > x months)(bought in > x months)• Former CustomersFormer Customers
• Select Prospects Select Prospects (high propensity to buy)(high propensity to buy)
• Other ProspectsOther Prospects
Most Effectiv
e
Least Effectiv
e
RFMRFM
List Management
The role of list managersSelection criteriaSeedingData hygiene
List Management Roles
List renter: the list “buyer”
List compiler: the company or person who compiles the list
List broker (CORNERSTONE): an intermediary who: Maintains list hygiene and suppression Provides recommendations, discounts, etc. Typically paid on a commission basis
Selection CriteriaWhen was the list last updated?How deliverable is the list? (hygiene)What selections are available, and at what cost?What is the source of the list?Is the list owner a member of the CDMA?What is the rollout potential of the list compared to rollout fees? Size and turnover
Selection Criteria - Costs
“Premium” lists contain: Recently verified contacts (30-90 days) Proven mail-order buyers Contacts with highly detailed profiles Hard-to-find customer data
“Bargain” lists contain: Unconfirmed contacts Inquired instead of purchased Names/addresses only
Seeding
Seeding: a common practice by list compilers/brokers of adding disguised names and addresses to monitor list usage.
Data Hygiene
Data hygiene: business processes that maintain the usability of customer data.
Reasons: Non-standard/missing address data Incorrect Name Titles, Gender Duplication Inappropriate Gone away, died
Demonstration - Cornerstone
You are the RESP Product manager at CIBC. RESP are Registered Education Savings Plan that encourage individuals to save for their child’s education with an added 20% contribution from the government. You need to encourage product uptake, but your database lacks information on which of your clients has children. You decide that external list rentals might help you augment your existing data base. You contact your list broker and ask for possible solutionsWhat lists are available?
Digital Marketing-Part I
This week
Digital marketingOverview of the Internet Three e-business strategiesHow to evaluate marketing web sites Assignment 4 handout
The Internet
What is the Internet?Who uses the Internet?Database marketing e-business strategiesRelated tactics
The Internet
The Internet: a global network consisting of millions of interconnected corporate, government, organizational, and private networks.
1. Computers 2. With data3. Users who send and receive the data4. A technology infrastructure to move, create,
and view or listen to the content.
Other Definitions
intranet A private network running internally within a corporation + using Internet standards (HTML, browsers).
extranet An intranet that value chain partners can partially access.
Other Definitions
WebThe portion of the Internet that supports a graphical interface for hypertext navigation with a browser.
More than one Web
1. The Web that most users access from PCs: Low-bandwidth content High-bandwidth content
2. Subsets of the Web with content specially designed for unique devices: Web TV Personal digital assistants (PDA) Cell phones Text-only browsers
Diffusion of TechnologyOr Media Fragmentation, as we talked about last
week, means that the internet has had to evolve to be a true 1:1 mediumUsers demand not only accessibility, but
customizability, it’s no longer okay to just have a great looking web site; people want something that makes them feel its their own spaceSo the internet evolution moves from 1 to many,
to 1:1A difficult task, but a necessary exercise
Internet Users*
15.7% of the global population is connected
= 1.02 billion users
Connected Users Worldwide
ConnectedNot
Connected
Source: Internet World Stats
Internet Users-Canada*
67.9% of the Canaian population is connected
= 21.9 million users
Connected Users Canada
Connected
Not Connected
Source: Internet World Stats
Internet Users: demographics
88% of connected users live in developed nations
Connected Users by Nation Type
Developed
Under-developed
Internet Users: demographics
North America, 227.3
Asia, 364.3
Australia/Oceania, 17.9
Latin America/Carribean,
79.9
Europe/ MidEast, 141.6
(millions)
Internet Users: demographics
English, 42%
Japanese, 9%
Chinese, 9%
Korean, 5%
German, 7%
Spanish, 7%
I talian, 4%
French, 3%
Portugese, 3%
Other, 9%Dutch, 2%
Internet Use in Canada and E-commerce in the New EconomyStatistics Canada publishes the HOUSEHOLD
INTERNET USE SURVEY (HIUS) on a regular basisThe last published report was for 2003 dataThere was no report published for 2004There will be a report in 2006 reflecting 2005 statistics at the individual level
Internet Use in Canada and E-commerce in the New EconomyIn 2003, based on the last survey
3.2 Million Canadian households actively participated in e-commerce
In total they placed 21.1 million orders, and spend over $3 billion dollars
This represented a 25% increase from 2002 Recent statistics from STATS CANADA show that:
Business to Consumer e-commerce sales were $8.5 billion (an increase of 183.3% from 2003)
Business to Business e-commerce sales were $19.8 billioin
Internet Use in Canada and E-commerce in the New Economy
Wholesale trade $6.14 Billion
Manufacturing $4.23 Billion
Transportation/Warehousing
$4.61 Billion
Retail Trade $2.95 Billion
E-Commerce sales in Canada, 2004, by selected sectors
E-Customers: their demographics
Younger Most users are 18-34
years old 35-44 year olds are not
far behind Age 55 and older use it
the least
More Affluent Households with
above-average income (80% of Canadians with incomes of $80k or more per year) use it.
E-Customers: How they live
Time-pressuredInformation-overloadedMobile, yet connected Customized entertainmentExpanded working hoursDiminished job stability and loyaltyRise in entrepreneurial interests
E-Customers: How they shop online
Self-serveAnywhere, anytime Access to more productsEmphasis on immediate fulfillment of needs and expectationsStrong desire to have a 1:1 experience, and they demand itE-business is not just regular business
E-Business: Major Applications
1. E-communications Messaging prospects and customers
2. E-commerce Selling, logistics, data sharing online
3. E-care Customer service and fulfillment
Businesses Find it Compelling
Many firms have greatly reduced marketing and fulfillment costs via electronic order processing, billing, and e-mail.
An “infinitely scalable” transaction channel
Barriers to Entry
Web site developmentHardware and software Rapid obsolescenceLearning curve
The New EnvironmentMarketers found
customersCustomers find marketers
The New EnvironmentMarketers found
customersCustomers find marketers
Local competitionInternational competition
just a click away
The New EnvironmentMarketers found
customersCustomers find marketers
Local competitionInternational competition
just a click away
Price was more static, controlled
Price is more dynamic
The New EnvironmentMarketers found
customersCustomers find marketers
Local competitionInternational competition
just a click away
Price was more static, controlled
Price is more dynamic
Interruption-based Permission-based
“Companies are learning to let customers come behind
the counter and figure things out for themselves.”
- Arthur Middleton Hughes
Strategic Implications
1. Marketers who grasp what Internet technologies can do will be better poised to capitalize on information technology.
Strategic Implications
2. New communication opportunities exist to reach customers beyond the telephone, television, postal mail, or other media.
3. Internet technologies can be integrated into existing marketing strategies, or used to redefine the way marketing is conducted.
Is ALL e-marketing direct marketing?
Direct marketing only occurs when messages are:
(1) ____________,
(2) ____________ and
(3)_____________ .
Personalized
Measurable
Interactive
Common E-Business Models
B2CB2BC2C
Common E-Business Models
Pure play (Amazon.com)Enterprise “Click and Mortar” (FutureShop, HBC.com)Online exchange (eBay)Portal (Yahoo!, MSN)Metamediary (yourshops.ca)
E-Business Models: Commitment
Pure Play
Enterprise
Business Process
Activity
Pure dot-com (Amazon) Click and Mortar (eSchwab, most retailers) Customer Relationship Management Brochureware E-mail
Lev
el o
f bu
sine
ss im
pact
Business transformation (competit ive advantage, industry redefinition) Effectiveness (customer retention) Efficiency (cost reduction)
PURE PLAY: A company devoted to only one line of business
Pure Play Example – Netflix
In the USA, Netflix www.netflix.com rents DVD movies by mail: Customer sets up a “queue” of movies they want
to rent. Customer rents 3+ DVDs at once —no return
deadlines or late penalties. After viewing a movie, customer slips it into a
prepaid return envelope to mail it back to Netflix. A few days later, they receive the next DVD on
their list.
Netflix builds relationships one at a time through customer-driven personalization and convenience.
Typical Strategic Goals
1. Develop e-marketing infrastructure
2. Promote web site as an additional point of contact, not a replacement
3. Migrate customers to the Web
Final Points
1. Next week, no class, intercession week
2. Assignment #4 due June 27th, 2006
3. Work in your group projects4. I will post a detailed marking
scheme early next week