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Dmaw Presentation July 13 0 Final

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Presentation at the DMAW Bridges conference. The story behind the first billion dollars. a case study on customer profiling, segmentation and precision targeting
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  • 1. By Frank Peterson Jr., Vice President MGI Jorge Restrepo, President EurekaFacts Direct Marketing Optimization:The story behind the first Billion dollars Presented at the 2006 Direct Marketing Association Conference

2. The Story

  • Virginia Commerce Bankis a Virginia state-chartered bank that commenced operations in May 1988. The Bank pursues a traditional community banking strategy, offering a full range of business and consumer banking services through sixteen branch offices, two residential mortgage offices and one investment services office.
  • VCB has grown significantly since we started our campaign in 2003. Assetsgrew from $780 million in 2003 to $1.8 Billion in 2006.The winning strategy, owed to strong management and a reputable brand, includes direct marketing in its mix.
  • A targeted direct marketing effort using data analysis and creative genius contributed to this outcome.
  • This success story shows how optimized direct marketing can be part of a winning strategy. The information presented will discuss key elements of the marketing optimization process.

3. The Landscape

  • Aggressive promotion by many competitors, some very large.
  • New players entering the field and consolidation of others through mergers and acquisitions.
  • Competition for new customers in the market can be extreme.
  • Increased distrust in corporations and their offerings.

4. The Campaign

  • Integrated marketing campaign where direct mail is the catalyst for response.
  • Built on strengths of the brand.
  • Utilize available data and personalization technologies to market one-on-one.
  • Support offers with materials including web site, POP materials, staff involvement.
  • Prioritize and implement a constant effort.
  • Test, measure and improve.

5. Components

  • Customer profiles.
  • Segmentation, targeting and positioning strategy.
  • Developed a set of offers that increased loyalty and increased deposits among current customers.
  • Developed an acquisition strategy that brought new customers.
  • Direct marketing to strengthen service penetration.
  • Supporting communications include POP, web and other materials.
  • Campaign evaluation.

6. Customer Profiling

  • Develop customer profiles with demographic, attitudinal and usage data
    • Data overlays to better understand the demographics of the customers
    • Understanding of the lifestyles
    • Product/Service usage
    • Understand other key factors such as geographic location
  • Identify threats and opportunities
    • Identify hot buttons & barriers
    • Understand context

7. Segmentation

  • Identify the market segments and niches
  • Segment the customer database using demographic, attitudinal, behavioral data. True segments are:
    • Homogeneous within, heterogeneous across
    • Respond similarly to marketing stimuli
    • Can be reached
  • Evaluate possible segmentation schemas and pick target segments.
  • Characterize segments.
  • Identify predictors of response.

8. Customer data Usage Demographic, household data Geography, geo-demographics, etc Targeted offers Targeted offers 9. Offer Targeting

  • Identify optimum offers per segment
  • Develop offer sequence
  • Support personalized one-to-one offers within a segmented marketing approach
  • Provide optimum mix information

10. Continuous Improvement

  • Success achieved through test and measure
  • Monitor key business measures
  • Direct mail optimization / campaign metrics
  • Testing includes offer, package, list, timing

11. Lessons Learned

  • Define clear objectives
  • Build and deliver on your brand promises
  • Segmentation, targeting and positioning is key
  • Make maximum use of data, creative and personalization technologies
  • Integrated campaigns across channels have higher impact
  • Loyalty building is an ongoing effort
  • Test, monitor and improve

12. Discussion Questions &Discussion

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