Toys R Us marketing database RFP responses, Ph I, Charles de Gruchy

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RESTRUCTURED

RFP RESPONSE EVALUATION

FOR

MARKETING DATABASE MANAGEMENT,MARKETING AUTOMATION AND

ANALYTICS SERVICES

BASED ON:1. STRATEGY

2. DATA MANAGEMENT3. ANALYTICS

Prepared by Charles de Gruchy

June 16, 2008

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1. Background:1.1 The re structured RFP1.2 Objectives1.3 Purpose of restructured RFP1.4 Gaps within the RFP as a result of the re structuring1.5 Revised evaluation stages and process1.6 Restructure RFP content

2. Evaluation:2.1 Point of view behind the participant scoring2.2 The scoring system2.3 Participants overall scoring:

2.3.1 Strategy2.3.2 Data Management2.3.3 Analytics

2.4 Short list recommendation based on the restructuring2.5 Short list recommendation2.6 Short list detailed performance2.7 Harte-Hanks recommendation

3. Next StepsAppendix (A) Evaluation approach

CONTENTS

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BACKGROUND

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1.1 THE RE STRUCTURED RFP

The RFP content and submissions have been re structured into three categories of response as follows:

1. Strategy and account management2. Data management3. Analytics

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1.2 OBJECTIVES

The revised objectives for development of a category based RFP are:

1. To identify ‘best of breed’ within each functional category2. To understand capabilities3. To award TRU/BRU marketing database management based on

category expertise

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1.3 PURPOSE OF THE RE STRUCTURED RFP

The purpose of re structuring is to

1. Summarize the response submissions based on a performance criteria within a more tightly defined set of criteria

2. Apply that criteria to identify strengths and weaknesses, 3. Identify ‘best of breed’ within each performance category, and4. Evaluate vendor capabilities with the intent of offering out the

business to more than one vendor by category of expertise.

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1.4 GAPS WITHIN THE RFP AS A RESULT OF THE RE STRUCTURING

As a result of the re structuring of the RFP the analytics category fails to deliver an in-depth exploration of vendor capabilities as well as a complete review of industry ‘best of breed’ practitioners.

Recommendations are provided to build out this RFP category to meet the review objectives.

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1.5 REVISED EVALUATION STAGES AND PROCESS

Stage 1 – Completed initial scoring of the 7 participants and recommended short list of three

Stage 2 – Re structure initial scoring by category and make recommendations regarding:

A. participantsB. RFP questions and focus by category

Stage 3 – Identify and select additional vendors to receive the enhanced category RFP.

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1.6 RE STRUCTURED RFP CONTENT

The re structured RFP is divided into 14 sections as follows:

SECTION NAME SECTION # QUESTION

2.4.5 Customer Segmentation and Modeling

2.4.6 Strategy and Enablement

2.7 Client Service

2.9 Training methodologies

2.3 Data warehouse management

2.4 Marketing automation services and reporting

2.4 Campaign management

2.4.2 Reporting, software installation and maintenances

2.4.7 Facilities and data safeguarding

2.5 Technology

2.6 Implementation & migration

2.8 Testing methodology

2.4.3 Reporting

2.4.4 Analytical leadership

DATA MANAGEMENT

ANALYTICS

STRATEGY

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1.4 SUBMISSIONS

Seven participants responded:

Acxiom Allant Epsilon Equifax Harte Hanks Merkle Rapp Collins

The Forrester Wave, Database marketing Services Providers Review (November 2, 2007) included all the TRU/BRU RFP participants in their evaluation. Forrester results are referenced following.

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RE STRUCTURING THE CURRENT

EVALUATION

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2.1 POINT OF VIEW BEHIND THE PARTICIPANT SCORING

The participant scoring rewards participants who delivered on the following: Added value Integrated service offering Integrated channel view Flexible account structure Flexible services organization

Participant performance levels (ranking and scoring within each of the RFP categories) reflect the degree to which the participant answered the following questions in the body of their answer.1. How well did the answer address the stated needs of TRU/BRU?2. Did the participant answer the question?3. Was the content directly, or indirectly, relevant to the question

asked?4. Did the answer meet or exceed the standard set by the other

participants?

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2.2 THE SCORING SYSTEM

The design of the RFP questions provides for two types of answers. The first type answers the question “what”, and the second, is more “open ended”*.

The scoring system is the same for each type of question and is based on a three part score of 1-3-9 with the following interpretation assigned to “what” questions:

A score of ‘9’ for high or added value performance A score of ‘3’ for medium or met the performance minimum standard A scored of ‘1 for low, or were below the relative standard established

by the other participants.

And, with the following interpretation for the “open ended” questions: A score of ‘9’ equals exceeded the requirement A score of ‘3’ equals partial, either incomplete or unclear A scored of ‘1 equals either an answer was not given or the answer

was not relevant.* See appendix (A) for examples

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While all participants performed strongly Allant, Equifax and Merkle emerged as the three strongest contenders.

Despite their overall leadership, each firms response raises further questions that need exploration, as follows:

Migration process Client service integration with analytics services Integrated analytics services (on and off line) Work flow management and TRU/BRU resources Ability to scale to service a business the size of TRU/BRU Questions regarding geography and travel

VS TARGET

SCORE VS TARGET

SCORE VS TARGET

SCORE VS TARGET

SCORE VS TARGET

SCORE VS TARGET

SCORE VS TARGET

SCORE

All COMBINED TOTAL 72% 771 82% 870 73% 776 89% 950 74% 787 88% 932 75% 798

VENDOR PERFORMANCE

ACXIOM ALLANT EPSILON EQUIFAX HARTE-HANKS MERKLE RAPP COLLINSSECTION NAME

2.3 PARTICIPANTS OVERALL SCORING RESULTS

1 23* See scoring detail document for more information

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2.4 SHORT LIST RECOMMENDATION

Allant, Equifax and Merkle emerged as the three strongest contenders among the seven participants based on providing a consistently high level of understanding of the processes and steps/stages required to meet TRU/BRU stated objectives and service delivery levels. It is recommended that they form the short list.

Out of a total potential of 1,065 points all three achieved over 80%.

VS TARGET

SCORE VS TARGET

SCORE VS TARGET

SCORE

All COMBINED TOTAL 82% 870 89% 950 88% 932

VENDOR PERFORMANCE

ALLANT EQUIFAX MERKLESECTION NAME

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2.5 SHORT LIST RECOMMENDATION AND FORRESTER

The selected contenders – Allant, Equifax and Merkle – were also identified by Forrester as “leaders” within their evaluation

However, Forrester’s conclusions are consistent with this evaluation in noting the following gaps even among the leaders:

poor project management Limited integration of on and off line capabilities Relative degrees of proactive service

Merkle, alone among the evaluated companies, achieved 7 measures with scores over 80%, notably account and analytical services were two of the categories.

See chart following

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2.5 SHORT LIST RECOMMENDATION AND FORRESTER

CURRENT OFFERING SCORE TARGET VS TARGET SCORE VS TARGET SCORE VS TARGET SCORE

Account management & service delivery 5 77% 3.85 78% 3.88 84% 4.20Strategy services 5 80% 4.00 70% 3.50 73% 3.63Data and data sourcing services 5 62% 3.10 66% 3.28 87% 4.35Database management 5 56% 2.80 62% 3.10 70% 3.50Data processing 5 0% 0.00 0% 0.00 0% 0.00Analytical services 5 91% 4.55 53% 2.65 93% 4.65Creative services 5 0% 0.00 20% 1.00 73% 3.65Execution 5 51% 2.55 14% 0.70 84% 4.20Measurement 5 0% 0.00 0% 0.00 0% 0.00Technology capabilities 5 76% 3.80 88% 4.40 96% 4.80Integrated services 5 65% 3.25 75% 3.75 90% 4.50Other capabilities 5 62% 3.10 56% 2.80 62% 3.10Midmarket capabilities 5 48% 2.40 88% 4.40 36% 1.80Industry capablities 5 49% 2.43 57% 2.85 88% 4.40Sales channel capabilities 5 49% 2.43 0% 0.00 0% 0.00Contracts and pricing 5 0% 0.00 0% 0.00 0% 0.00TOTAL 80 48% 38.26 45% 36.31 58% 46.78

MERKLEFORRESTER VAVE EVALUATION, November 2007

ALLANT EQUIFAX

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2.6 SHORT LIST DETAILED PERFORMANCE, CASE STUDIES

RFP 2.2 Case studies -- were relevant to the TRU/BRU RFP focus and illustrated how they would add value to the TRU/BRU business (s).

Allant’s TWEEN BRANDS case specifically addressed points relevant to the TRU/BRU business, for example, data quality, timely information, access to data, etc.

SCORE TARGET

VS TARGET SCORE VS TARGET SCORE VS TARGET SCORE

2.2TOTAL CASE

STUDIES, REFERENCES

99 100% 99 100% 99 82% 81

SECTION NAME ALLANT EQUIFAX MERKLE

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2.6 SHORT LIST DETAILED PERFORMANCE , DATA WAREHOUSE

RFP 2.3 Data Warehouse Management -- All three presented strong, detailed and believable data management cases and descriptions.

In addition, each participant presented a flexible, “we’ll work with you” point of view.

SCORE TARGET


2.3TOTAL DATA WAREHOUSE MANAGEMENT

315 78% 247 84% 265 82% 257


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2.6 SHORT LIST DETAILED PERFORMANCE, AUTOMATION

RFP 2.4 Marketing Automation -- Allant articulated the issues related to the integrated TRU/BRU marketing environment best, followed by Equifax and Merkle.

Each response was a positive set up for the following section – campaign management.

SCORE TARGET


2.4TOTAL MARKETING

AUTOMATION SERVICES

9 100% 9 100% 9 100% 9


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2.6 SHORT LIST DETAILED PERFORMANCE , CAMPAIGN MANAGEMENT

RFP 2.4.1 Campaign Management – While Allant is clearly capable of delivering a high level of support their response was not as well articulated as Equifax and Merkle and the overall impression created not as strong.

SCORE TARGET


2.4.1 TOTAL CAMPAIGN MANAGEMENT 117 57% 67 88% 103 88% 103


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2.6 SHORT LIST DETAILED PERFORMANCE, SOFTWARE

RFP 2.4.2 Software – Equifax presented the strongest integration story with current TRU/BRU technologies.

The understanding of upgrades costs and ongoing upgrades needs to be built more clearly into the go forward.

SCORE TARGET


2.4.2 TOTAL SOFTWARE 72 75% 54 92% 66 89% 64


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2.6 SHORT LIST DETAILED PERFORMANCE, REPORTING

RFP 2.4.3 Reporting – While the staffing models outlined by each participant are clear the report creation process will need leadership that none of the participants is offering to provide. Allant, Equifax and Merkle are looking for leadership from TRU/BRU and the identification of a project leader for the migration.

Equifax and Merkle offer the most flexible staffing approach.

SCORE TARGET


2.4.3 TOTAL REPORTING 27 70% 19 100% 27 100% 27


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2.6 SHORT LIST DETAILED PERFORMANCE, ANALYTICS

RFP 2.4.4 Analytical Leadership – Analytics services are offered on a project basis with commitment of senior analytics staff on a permanent basis to the business. Staffing needs to be clarified within the scope of work and specific individuals identified together with their allocation.

A key question is how this function will be coordinated between TRU and BRU. Each participant has expressed concerns re: workflow management.

SCORE TARGET


2.4.4 TOTAL ANALYTICAL LEADERSHIP 72 100% 72 92% 66 81% 58


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2.6 SHORT LIST DETAILED PERFORMANCE, SEGMENTATION

RFP 2..4.5 Segmentation – It is Unclear how analytics is built into the staffing model relative to project work.

Merkle presented the clearest structure and options but all contenders need to be more specific, e.g. who will lead; how will analytics be integrated into the account function; what are the work flow issues, etc.

SCORE TARGET


2.4.5TOTAL CUSTOMER

SEGMENTATION AND MODELING

27 78% 21 78% 21 100% 27


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2.6 SHORT LIST DETAILED PERFORMANCE , STRATEGY

RFP 2.4.6 Strategy and Enablement – The Equifax response did not present a confident description of how strategic services, including analytics, would be enabled. Example provided did not help.

Allant and Merkle provided a stronger staffing story with Merkle leading.

SCORE TARGET


2.4.6 TOTAL STRATEGY AND ENABLEMENT 18 67% 12 67% 12 100% 18


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2.6 SHORT LIST DETAILED PERFORMANCE, FACILITIES

RFP 2.4.7 Facilities – All of the participants provided security solutions within acceptable frameworks. Merkle provided added security options not provided by the others.

SCORE TARGET


2.4.7TOTAL FACILITES

AND DATA SAFEGUARDING

99 94% 93 94% 93 100% 99


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2.6 SHORT LIST DETAILED PERFORMANCE, TECHNOLOGY

RFP 2.5 Technology – All participants recommended a dedicated T1 line for communications management and all participants anticipate large data transfer volumes.

A key question that is not answered clearly by Merkle is how they will integrate the full scope of the TRU/BRU business while maintaining stated levels of service and support.

SCORE TARGET


2.5 TOTAL TECHNOLOGY 63 86% 54 86% 54 76% 48


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2.6 SHORT LIST DETAILED PERFORMANCE, IMPLEMENTATION

RFP 2.6 Implementation– the issues related to a potential transition appear to be best understood by these three contenders.

More specifics need to be provided on how the transition will be managed and examples of successful transitions of the scale under consideration.

SCORE TARGET


2.6TOTAL

IMPLEMENTATION AND MIGRATION

36 100% 36 100% 36 83% 30


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2.6 SHORT LIST DETAILED PERFORMANCE, CLIENT SERVICE

RFP 2.7 Client Service – Merkle presented the most coherent client service case although all participants did poorly describing the migration strategy. Further detail needs to be provided client service structure and day-to-day operating practice.

SCORE TARGET


2.7 TOTAL CLIENT SERVICE 93 85% 79 94% 87 100% 93


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2.6 SHORT LIST DETAILED PERFORMANCE, TESTING

RFP 2.8 Testing – Testing protocols are consistent across all three contenders.

SCORE TARGET


2.8 TOTAL TESTING METHODOLOGIES 153 100% 153 88% 135 92% 141


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2.6 SHORT LIST DETAILED PERFORMANCE, TRAINING

RFP 2.9 Training – Training methodologies are not all equal with Merkel presenting the most customized and flexible point of view, e.g. they will work with TRU/BRU to develop the optimal program and will provide individual training sessions which the others did not mention.

SCORE TARGET


2.9 TOTAL TRAINING METHODOLOGIES 45 60% 27 87% 39 100% 45


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2.7 HARTE-HANKS RECOMMENDATION

Harte-Hanks ranking relative to the other participants was surprisingly low in light of their long tenure on the business.

Their presentation of facts was weak in the following areas:

a) Migration process – this was not clearly definedb) Staffing – e.g. how will the proposed structure address

current deficiencies.c) Client support structure, e.g. what will be different now

vs. the current structure (integration issues)d) Training – a self service option was not defined

Based on their incumbency it is recommended that they be included in the short list based on addressing the gaps above.

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NEXT STEPS

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3. NEXT STEPS

1. TRU/BRU internal review of this evaluation.

2. TRU/BRU confirmation (or change) of short list candidates.

Meanwhile, consultant will

1. Complete detailed side-by-side cost comparison of short list candidates. (A top line review indicates that the contender’s approaches are consistent with an “all in” approach to fees).

2. Develop business problems/questions for in-person presentation by short list contenders.

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APPENDIX

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(Appendix A) EVALUATION APPROACH

The questionnaire design presents limitations to the application of a single evaluation approach:

Example 1: Provide client success story that best highlights your ability to handle requirements, section 2.2

Comment: Because the question focus is broad answers from the participants range from a marketing problem/solution (Harte Hanks) to more specific database marketing examples (Merkle). As a result measurement of participant performance is rated based on both the relevance and strength of the case study.

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Example 2: Describe the process to prepare data for specific uses by the marketing automation tools, section 2.3.14

Comment: The question did not clearly indicated that an answer is required or that it optional to defer an answer to the discovery stage post hire. As a result some participants did exactly that (Allant, Epsilon) versus the others who clearly described the process (Epsilon, Equifax, Merkle) or addressed a specific within the process (Harte-Hanks, Rapp Collins). As a result non responders or those not addressing broader process issues were penalized in review.


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Example 3: Describe in detail, assignment of a household key based on assigned individual key, section 2.3.17

Comment: The questions in this section were specific and well defined. The participants, as a result, had a clear framework in which to specify their answers. Evaluation of the outcomes was straightforward based on the degree to which the participant detailed the process and the outcome. For example, appending of key demographic/lifestyle data Acxiom provided the most detailed description with a clearly defined outcome. The other participants while describing the process did not add further value. Axciom was rated high and the other participants medium in performance.


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Example 4: Describe how your organization will provide the same customer data that is required for domestic customers and international customers.

Comment: Because this questions was very broad it left too much discretion to the participants to define the outcome. The result was that Acxiom focused on their credentials without “describing” and scored medium. Allant, Epsilon and Harte-Hanks provided very literal answers and scored high. Merkle and Rapp Collins didn’t address the question completely and were ranked low.


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1.3 CONSIDERATIONS

• What is a successful database marketing service vendor today?

Marketing database service providers, to be successful, must exceed price of entry levels of service and performance:

A. Price of Entry: The design, build and management of marketing databases is no longer the baseline for performance it was five years ago.

B. Point of Difference: With the trend to integration of the on and off line channels of sales together with rapid growth and diversification of alternative medias in driving retail, marketing database providers must deliver:

High value service Flexibility Proaction Integrated delivery*

*source: Forrester Wave, Database marketing Service Providers, 11,02,07

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1.3 CONSIDERATIONS

• What is the optimal service combination?

All providers deliver a similar suite of services including:

Strategy and planning List and data sourcing Database management and processing Analytics Measurement and insight

The service suites in themselves are clear. It is how they are offered that causes confusion and mixed expectations.


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1.3 CONSIDERATIONS

• How should those services be structured?

An integrated offering (and strategy and analytics) is preferred by marketers and, based on the multi channel/multi brand structure of TRU/BRU business model this is the only way that will work to meet marketing objectives and service support requirements.


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