Marketing in crisis: using analytics, data and intelligence

THoM_SPSS_Marketing Crisis_11062009.v3.ppt 1

Analytical deployment (in marketing):
All excuses not to do it are valid …
… but not sufficient

June 11, 2009

Agenda

1. Getting to the breadth and depth

2. Getting to impact

3. Getting to change


Analytical deployment offers a new edge to marketing
An extract

Old approach Revolutionary approach

Reliance on survey data Insights from marketplace data

Focus on outcomes of consumer Examine the process consumers use
decisions to make decisions

Measuring marketing effects Optimizing marketing activities

Use descriptive models Use models based on behavioral
processes

Focus on short-run profitability Emphasize drivers of long-term value

Source: Chicago Booth Magazine, Spring 2009: “A Revolution in Marketing”

Analytical deployment is about enhancing the full
organization, not just adding competences

Analytics is a way to do business mainly with your current business
model
• It is therefore not just a competence you can centralize or
departmentalize (parking)
• But it cuts through silo’s of the organization to deliver (sharing)

Many development frameworks exist to support this deployment, and
all aim at
• Supporting a cultural shift
• Aligning management
• Building benefits for all actors
• Locking it in into daily processes


Understanding the depth and impact of analytics
usage is key to enhance a company-wide adoption
8 levels or sequences of analytics usage in a company
1 3 5 7
Query
Standard Statistical Predictive
drill-down
reports analytics modeling
or OLAP

2 4 6 8
Ad-hoc
Alerts Forecasting Optimization
reports

Access and reporting Analytics

Per level, the readiness on the following 6 ingredients need to be evaluated
Leadership
Transparency
Infrastructure
Processes
People
Culture

Source: Jim Davis, SPSS

BI as part of analytical deployment…

Checking the
validity of your
business
Strategic Information assumptions: Does
Layer this happen?

Tactical Information Checking the
Layer validity of your
dashboard
input: Does this
happen ?

Reporting The dashboard
from your BI:
recurrent and
Operational fixed
Information Layer

Source: Business & Market Intelligence Kinepolis Group, Presentation at The Datamining Garden

… Reporting versus Analytics: a world of difference

ANALYTICS
Strategic Information
Layer

Tactical Information
Layer
ANALYSIS

REPORTING

Operational
Information Layer

The point: If your "analysis" is really reporting, you haven't
The point: If your "analysis" is really reporting, you haven't
even begun to leverage the information contained in your data
even begun to leverage the information contained in your data

Source: Business & Market Intelligence Kinepolis Group, Presentation at The Datamining Garden; Web Analysis 2009, THoM

Agenda





Analytics helps increasing competitiveness and
profitability on top of your traditional means

• Better and faster decisions

• Time and cost savings

• Organizational learning and new ideas

• Top-line and bottom-line mastering

Source: GIA White Paper 2/2008: World Class Market intelligence – From firefighters to futurists; THoM

The benefits are not increments, but a factor
Real life examples

The effect of analytics Benchmarked best practices: extract

Before After Best
applying applying practice
analytics analytics performance

Banner ad click- 0.3% 21% Performance measure
through rates
• X-sell response rates 20%
Mail response rates 0.5% 18%
• Repeat buyer rates 60%
Merchandising 0.2% 12%
response rates • Referrals 20%

Conversion rates 0.9% 10% • Direct marketing ROI 12:1
(post-response)
Improvement measure (after
Repeat buyer rates 2.0% 60% vs. before)

• Churn reduction 78%

• Increase in per customer 15%
profit

Source: Marketing Analytics to the Rescue: The Next Big Thing? David J. Santoro DM Review Special Report, February 2003

And benefits can be achieved in every marketing
domain

What business problems does data mining/analytics solve?
You can use data mining to solve almost any business problem that involves
data, including:
• Increasing revenues from customers
• Improving cross-selling and up-selling
• Understanding customer segments and preferences
• Identifying profitable customers and acquiring new ones
• Retaining customers and increasing loyalty
• Increasing ROI and reducing marketing campaign costs
• Detecting fraud, waste, and abuse
• Determining credit risks
• Increasing Web site profitability
• Increasing retail store traffic and optimizing layouts for increased sales
• Monitoring business performance

Data mining solves a common paradox:
Data mining solves a common paradox:
The more customer data you have, the more difficult and time-
The more customer data you have, the more difficult and time-
consuming it is to effectively analyze and draw meaning from them
consuming it is to effectively analyze and draw meaning from them

Source: SPSS

Agenda





“Let’s find out how to get more out of your data and analytics …”

The TOP 10 responses / excuses:
1 We have lots of data but not a lot of info proportionally

2 We have lots of reports and analyses already / We have BI (business
intelligence) all over the place

3 We already analyze too much and act not enough (analysis paralysis)

4 We are already managing our performance quite well

5 We are improving our operations continuously; what could this bring
more ? / Management will not be supportive

6 No way you can ever have this company increasing analytical
intelligence across the board

7 You can’t really talk with data people

8 We already have analysts

9 I’m in B2B, not B2C / I have resellers or partners, not end-customers

10 We don’t have much or usable data / We wait for our CRM system first


Minimum 4 competences required to get from data
to impact, given a full analytical deployment
1 Analytics 2 Business
Quantitative and multidisciplinary Contextual
• Statistics • General business understanding
• Econometrics • Particular business need of a
• Operational research specific decision maker
• Artificial intelligence
• Data mining Applicative
• Understanding the final use
Modeling capability • Knowledge on requirements
• Regression, clustering, decision • Actionability of conclusions
trees, … • Relevancy of outcome
• Urgency/Prioritization of requests
Methodology: • Flexibility
• Approach
• Tactics for issue resolution 4 Communication
Translating into and talking in the
3 Techniques semantics of the decision maker
Data management on large databases
Highlighting the relevant trade-offs to
the users
Database design
Convincing on benefits and relieving
IT programming
‘old’ prejudices of data usage
BI tools
Committing to business impact
• Reporting
• Analysis
Cross-functional linkages
Source: The Datamining Garden, presentation of Dr. Martine George, Customer Intelligence ING

Long chain of functions to get from data to
analytical decision making
Decision
Maker

Business Project
Manager

Business Analyst

Intelligence Analyst
(data mining)
BI/Reporting
Analyst
Database/
Delivery Manager
Data Quality
Controller
Database
Architect
Data Warehouse
Management

Data

Let’s get started

Stijn.ghekiere@thom.eu
+ 32 474 94 60 15


Analytics: Deploying in crisis times to pick up targeting,
behavior change, top- and bottom-line potential
OUR VALUE PROPOSITION
To assist companies in times of economic crisis, THOM offers an analytical assessment (AA) and business
action pilot (BAP) designed to be fast, create new value and insights for your company and build the first
stone for tremendous competitive benefit and continuous improvement in marketing effectiveness

APPROACH VALUE AND DELIVERABLES
• During an Analytics Assessment (AA) • Identify quick hits for immediate improvements
- A check is performed with your IT and to your current working of analytics
information users on data quality,
availability and accessibility for the • Analytical progress map applied to marketing
deployment in sales & marketing: 1-2 and sales (for short and long term deployment)
weeks • Execution of a pilot and measurement of the
- The base options for analytics and data analytics benefits
leverage are listed, discussed and prioritized
for sales & marketing: 1-2 weeks • Insights on how to speed up analytics outside
• During a (consecutive) Business Action Pilot the currently claimed barriers for analysis
(BAP), a single marketing and/or sales action
objective is researched and optimized with • Overview of gaps and opportunities to convince
predictive analytics: min. 3 weeks; top management of investment into analytics
implementation pilot comes separately, but
support often not required, except for final result IMPACT:
measurement • TARGETING: up to 10 times better
• During a Marketing Analytics Fulfillment
• CHURN: up to 50% less
Evaluation (MAFE), the functional chain of
analytics is screened for gaps and opportunities, • COST of initiatives: up to 30% less
communication facilitation tips are given, barriers • SALES efficiency: up to 30% better
and missing areas in analytics are revealed, and if • X-SELLING: up to 20% more
possible one action based pilot is set up: min. 3
weeks

The House of Marketing is the first Marketing
Expertise and Excellence Center

• We support our clients to “Bridge the Marketing Knowing-Doing Gap”,
i.e. improving business results by developing and activating strong
and effective growth strategies

• By offering the right marketing expertise at the right moment

• With an enduring passion for the marketing profession and for client
satisfaction

• Ensuring solutions applied by market facing teams with a common
focus on the customer


A unique combination of strategic excellence and
operational pragmatism
The mix of professional profiles makes The House of Marketing unique

Strategic excellence Operational pragmatism

Our consultants Our marketing experts
• Create relevant insights in the business • Demonstrated capacity to make things
• Have proven track record in international happen within international and
strategic advice complex companies as well as in local
action-driven business units
• Team up with your “best in class” high
potentials • Apply practical knowledge of successful
corporate sales & marketing
• Identify the true leverages for significant
organizations
improvements
• Turn initiatives into tangible action
• Turn opportunities into structured and plans
prioritized business initiatives
• Help you to implement successfully
strategic recommendations

We help you in materializing ideas into well-considered
We help you in materializing ideas into well-considered
and successful business initiatives
and successful business initiatives


Our expertise is built on 4 pillars
Effectively bridging the Marketing Knowing-Doing Gap

Helping the company make relevant strategic choices
• Market assessment, growth and new product strategy
I. Strategic • Insights in customer perceptions, needs and segmentation
Marketing • Branding, positioning, satisfaction research and strategy
• Pricing opportunity assessment and strategy

Making the positioning tangible: creating marketing value
• Go to market strategies across 4 Ps
II. Go-to-Market • Value based pricing
• Customer experience and customer loyalty
• Integrated 360° marketing communication

Making the strategy work
• Customer Process Management
III. Organization • Customer relationship management (CRM)
capabilities • Marketing & sales organization structure
• Marketing competencies assessment and capability
development

Making the strategy profitable: maximizing marketing value
• Customer Life Time Value Management
IV. Performance
Management • Return on Marketing Investments or assets (ROMI/ROMA)
• Performance metrics and marketing dashboards
• Marketing Analytics

Marketing in crisis: using analytics, data and intelligence

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