Kay Madati, Relationship Marketing Manager BMW
Arthur Middleton Hughes
VP / Solutions Architect
KnowledgeBase Marketing
The DMA 84 th Annual
McCormick Place, Chicago
Tuesday, October 30 th 2001 10:00 AM – 11:15 AM
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• 1950 - 2000 Brands built by mass advertising
• 1985 - 2000 Database Marketing arrived, but not integrated with mass advertising.
• 1996 - 2000 The Internet arrived, but not integrated with DBM or mass advertising
• 2001 BMW brings them all together
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• BMW customers want:
–
A realization of the brand promise
• Performance, safety, technology, innovation
–
Recognition
– Service
–
Information
– Convenience
–
Helpfulness
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Personal Profit from Purchase = a (usefulness of product)
+b ( perceived brand value )
- c (money cost)
- d (time or inconvenience)
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• Constructors
People who build databases
Merge/Purge, Hardware, Software
• Creators
People who understand strategy
Build loyalty and repeat sales
• You need both kinds!
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• In 2000, BMW built a robust customer and prospect database designed to:
–
Provide a comprehensive view of the automotive and financial services
BMW customer
– Deliver short term, incremental revenue through opportunistic marketing programs
–
Increase customer loyalty through understanding and ability to deliver relevant, timely communication
– Secure BMW’s place in its customers’ lives by identifying which households are good targets for additional BMW purchases
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• BMW now has a central system of measurement
– The BMW Report Center monitors communications and response from prospects and customers
• Measurement includes cost per response and cost per sale
• BMW now has the ability to view prospects as well customers in its universe
– This allows BMW to view the full shopper-owner cycle from first point of contact, through sale and cross sale
• The new marketing database contains a broad range of information on the BMW consumer
– Campaign, response, and financial service data
–
190 appended individual and household data points
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• Allowing a full view of the BMW customer delivers smarter targeting and profit-generating up sell and cross sell opportunities
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Which vehicle owners are best targets for credit cards?
– How can BMW card owners increase the lifetime value of the vehicle owners?
–
Where are the pockets of our most profitable customers?
– Which customers will deliver additional revenue through financial services products after they have disposed of their
BMW?
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• Improve the effectiveness of marketing programs in the years
2001 – 2003 in order to:
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Return to BMW the cost of the database build
– Pay for database maintenance going forward
–
Increase the revenue per customer over time
– Increase the profit per customer
–
Increase the lifetime value of the combined BMW automobile and financial services customer
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• Consistent measurement and enhancement of BMW marketing programs
• Ability to prioritize prospects and customers based on their likelihood to buy
• Identification of “low hanging fruit” – programs that can be quickly implemented to generate revenue in the short term
• Refinement of customer communications
• Testing results against Control Groups
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• Control groups measure the effectiveness of each program
– Non-mailed groups that are measured against the mailed groups
• Reports on the BMW Report Center provide a consistent form of measurement
–
Cost per lead, response and sale measurement
– Cross-penetration of product purchases
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• Increased communication effectiveness
– Integrated database used by all groups
•
Increased efficiency
– The right information to the right customer at the right time
• Reduced communication expense
– Fewer pieces mailed with higher effectiveness
•
Increased customer participation
•
Increased customer satisfaction
•
Increased corporate and center profits
• A higher level of data from and about BMW customers
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• All programs are built on a state-of-the-art customer relationship management database which provides:
– More information on owners and prospects than BMW has ever assembled before
–
Powerful tools to support BMW loyalty and prospect conversion programs
– Automated communication that supports the Owner Experience
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• Increase customer loyalty
• Increase prospect conversion to sales ratio
• Increase vehicle sales through existing customers
• Maintain existing BMW household records
• Keep communication costs down while increasing effectiveness
• Develop a consistent process of program measurement
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• Use the marketing database to realize a communications dialogue with both our prospects and our customers
• Systematic use of customized information to attract and retain customers
• Facilitate mutually beneficial and relevant information exchanges
• Increase owner loyalty and customer acquisition rates
• Strengthen BMW brand perception at the individual customer level
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• Consumer Communications
– Welcome Kit
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Loyalty Communications
– Prospect Prioritization/Extending the Dialogue
–
BMW Magazine Enhancements
– BMW Owner’s Circle
– Financial Services Programs
• Credit Card & Banking Customer Acquisition
• Cross Sell and Up Sell Marketing
– Opportunistic “Quick Win” Programs
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• A static kit
• Information on
–
BMW, the Brand
– BMW, the Company
– BMW, the Products
• It welcomed people to the brand, but offered no real taste of the
BMW Experience
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• A personal welcome kit – that owners realize was created just for them
•
It arrives within the first 30 days
•
It is a dialogue opener, an invitation to the BMW experience that extends over a full year
• Each of the kit pieces enhance your perception of the BMW Brand and the
Experience
• Multiple calls to action which lead you deeper into the Experience
• It inherently fosters the collection of information needed for further relationship dialogue
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• Weekly feed of new owners from the database
• Rapid record cleanup for mailing
• Weekly fulfillment of corrected names, addresses and data to the welcome kit program
• Monthly maintenance of the database which supports all owner and prospect communications
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• Task: Provide individual customer data for personalized welcome kit fulfillment
Strategy:
– Provide new owner personalized fulfillment information on a weekly basis
–
Recover key information requested
– Maintain owner files based on collected information for future programs
–
Identify customers by model, financial status, and preparatory segmentation (i.e. loyalty, activity, etc.)
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• BMW customers are fiercely loyal to their brand
• Loyalty can be measured: it is the repurchase rate
• Successful loyalty is a two way street
• Customer loyalty can be strengthened by relevant personal communications
• BMW Loyalty initiatives cover the entire ownership experience
–
Welcome Kit, Newsletters, BMW Magazine, Multiple Vehicle Owner programs
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• Increase BMW profits through:
– Increased repurchase by existing owners
– Increasing the number of BMW’s per household
– Increased sales of BMW previously owned vehicles
–
Increased use/purchase of BMW FS products
• Each program effectiveness measured by control groups:
– Control Group: Owners who are not sent the communications
–
Test Group: Owners who get the communications
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• General Goals:
– Immersion in the BMW Experience
– Promotion of Owner’s Circle
– Purchase of BMW accessories
• To 3 and 4 year BMW owners. Goals:
– Increase the repurchase rate
– Multiple BMWs in each household
– Widespread use of BMW Financial Services products
• To new BMW owners, Goals:
– Purchase BMW financial services products
– Capture information about their preferences, lifestyles, automobile interests, etc. useful for further dialog
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• Ongoing collection of news and information of interest to BMW owners
•
Owner surveys to determine preferences for:
– News, information, and topics
– Communication Channel (email or print)
– Frequency
•
Begin with a printed newsletter to gather email addresses
– Move to email newsletters as quickly as possible
• Multiple offers to generate owner response
• Promote the use of Owner’s Circle
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• New products
•
BMW awards
•
Sports stars that drive BMWs
• Ratings by leading car magazines
• Why the BMW engines are superior
• The history of BMW
•
Event calendar
•
Magazine reprints
• Sponsorships
• BMW Brand Values
• Roadside Assistance
•
Servicing requirements
•
BMW Insurance
• BMW credit cards
• BMW Accessories
•
Driving Events
•
BMW trade in prices
•
BMW Owner Clubs
• Owner’s Circle
• World news featuring BMW
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• BMW publishes a high-value magazine to its owners in the first two years after their purchase
• Because of its universal distribution, the magazine can be more than a magazine
– It can be a data collection tool for further personalized communications
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• Capture additional information on customers
– Email Addresses
– Purchase Intentions: owners identifying themselves as entering the purchase cycle
•
Allow BMW owners to purchase merchandise
– Provide direction to BMW Online Store for purchase
• Push registration on Owner’s Circle
•
Each program effectiveness measured by control groups:
– Control Group: Owners who are not sent the communications
– Test Group: Owners who get the communications
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• Increase prospect conversion to sell more BMW automobiles
• Provide a steady flow of “qualified” leads to BMW Centers
• Make communications interactive
• Continually improve the conversion rates by better prospecting
– Measure the conversion rate by Center, Region, Prospect Lifestyle,
Income
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• Prospects developed from all contact sources:
– Telephone, Direct Mail, Auto Shows, Events, Internet
• Rapidly qualified and scored
• Centers receive qualified leads electronically within 48 hours of receipt
• Prospects get BMW message within 48 hours
• Every lead tracked electronically, with daily, weekly, & monthly reports for BMW management on the web
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• Scoring models for incoming prospect requests determine priority
– Focus on priority A & B prospects
– Moving to lower priorities as the systems proves itself
• Fully integrated creative implementation in both electronic and paper media as well as events
• Test scoring models against anticipated response and adjust as needed
•
Utilize a 5% control group for a period of one year for reporting comparisons
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• Sales
• Response
–
To electronic vs. paper
– Predetermined vs. Relational
– Offers and incentives
• Modeling success
• % prospect conversion (historical)
• Media preference automated system
• Cost of program
• Cost of sales
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• Scored leads sent to each dealer
• Conversions are measured monthly
• Each dealer conversation ratio calculated
• Program success measured by comparing dealer to dealer conversion ratio
•
Dealer, Market, Region and National average conversion ratios create measurable benchmarks
• Above average dealers manage their leads better
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• Direct Mail and E-mail integrated communication plan
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Alternating content delivery mediums
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Each reinforcing the one that came before it
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Use of database information to drive customization and relevance
• Each communication introducing a new piece of the BMW Experience
• All communications tie in to web activities
• Integration with off-line and online marketing activities
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Prospects given the opportunity to opt-out at any point
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Prospects removed from program if they purchase a vehicle
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• Immerse and invite the prospect into the BMW Experience
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Reinforce the initial contact with BMW
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Educate as to the depth of the Brand
– Products and Services
•
Point the prospect towards a test drive and the dealer
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Reinforce core marketing communication objectives about:
– Brand Values
– Brand Heritage
–
Product attributes
– The BMW Ownership Experience
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• New products
• BMW in the News
• BMW Technology and Innovation
• BMW Safety
• The history of BMW and BMW Brand Values
• Event invitations
• Test drive incentives
• BMW gifts
• Magazine reprints
• BMW Financial Services products
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• Sell more cars by:
– Immediate Scoring of Prospects
– Immediate electronic Center notification of leads
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Immediate communications with the prospect
– Continually engage the customer in the Experience
–
Provide more information on the depth of the Brand
• Reduce the cost per car sold
• Provide Management with accurate & timely knowledge of the prospect and sales process
• Increase the overall effectiveness of future prospecting programs by learning from this one
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• The BMW Database offers a huge opportunity to utilize information to refine BMW programs
• X Factor programs are built on data mining, and deliver:
– Highly effective marketing programs
–
Incremental revenue opportunities
– Low cost per sale
–
Increased customer/prospect contact and satisfaction
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• The Loyalty and Prospect Programs, combined with the database, offer great potential for creative, interactive X factor programs:
– Contests
– Programs for Women/Minorities
– Special Events
– Referral Programs
– Certified Previously Owned Cars
– Second BMWs in every home
– Lifestyle Programs
– Congratulatory Mailings to 3+ BMW Owners
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Q1
CPO Program
Q2 Q3
Owner Referral
Car Birthday
Launch
Q4
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• Identify ways to build relationships with female owners:
– Bring them to the Brand, and keep them longer
– Appeal to their unique needs
–
Recognize the purchasing power and influence that automotive marketers typically ignore
• Provide tools that reduce pre-dealer visit anxiety
• Tailored communications that highlight what women are looking for
– Live chat support by females
–
Develop a network of female sales reps
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• Identify households that are prime prospects to purchase a second
BMW
–
Analyze multiple purchase households
– Target groups most likely to purchase a CPO vehicle
• Households with teenagers or young adults
• Identify seasonality – graduation, etc.
• Test the program on current BMW owners, then roll out to prospects
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• Identify those current owners who are most likely to purchase a new 7 Series BMW
• Invite these special people to be among a small group who are allowed to preview the new 7 series
– Appeal to their appreciation of inclusion by asking for their feedback and opinion
–
Allow them to be among the first to test drive
– Notify them periodically of the status of the vehicle
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• Identify those current owners who are most likely to purchase the
MINI
• Create a unique lifestyle message to these owners
– Appeal to the early adapter
–
Focus on active lifestyles
– Get them to preview on the web and opt in to marketing messages
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• Develop a program that uniquely appeals to the BMW owner
– Communicate the personality of the brand
–
Reinforce the relationship that the BMW owner has with their car
• At the anniversary of purchase, send an e-card to owners
– Direct them to a micro site to get an e-birthday gift
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• Database provides the central focus for:
– Owner loyalty communication programs
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Prospect communications
– Opportunistic “Quick Win” Programs
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Measurement of success
–
Building BMW Brand Loyalty
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