MARK2038
Data Base Marketing Strategies II
Week 7
Instructor: Santo Ligotti
Email: sligotti@gbrownc.on.ca

Today’s Agenda
List Management
Digital marketing
Overview of the Internet
Three e-business strategies
How to evaluate marketing web sites
Housekeeping


Discuss Assignment #4
Discuss Group Project

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

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

Internal
House
Lists
Combined
List
Renter
A
Renter
B
Response
Lists
Renter
C
Compiled
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

accounting records shipping records records of inquiries warranty cards survey research results

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 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 Canada www.cstonecanada.com
Overview


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 terms http://www.cstonecanada.com/primer/glossary.asp
Check out their industry primers for direct mail, email lists, and mergepurge services http://www.cstonecanada.com/primer /

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 category
List C: bought something by mail

bought a similar product by mail inquired about your product bought within the category bought something by mail any other action by mail

Most
Effective
• Active Customers
(bought in last x months)
• Inactive Customers
(bought in > x months)
• Former Customers
RFM
Least
Effective
• Select Prospects
(high propensity to buy)
• Other Prospects

The role of list managers
Selection criteria
Seeding
Data hygiene

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

When 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

“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 : a common practice by list compilers/brokers of adding disguised names and addresses to monitor list usage.

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

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 solutions
What lists are available?



Digital marketing
Overview of the Internet
Three e-business strategies
How to evaluate marketing web sites
Assignment 4 handout

What is the Internet?
Who uses the Internet?
Database marketing e-business strategies
Related tactics

The Internet : a global network consisting of millions of interconnected corporate, government, organizational, and private networks.
3.
4.
1.
2.
Computers
With data
Users who send and receive the data
A technology infrastructure to move, create, and view or listen to the content.

intranet
A private network running internally within a corporation + using Internet standards (HTML, browsers).
extranet
An intranet that value chain partners can partially access.

Web
The portion of the
Internet that supports a graphical interface for hypertext navigation with a browser.

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

Or Media Fragmentation, as we talked about last week, means that the internet has had to evolve to be a true
1:1 medium
Users 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 space
So the internet evolution moves from 1 to many, to 1:1
A difficult task, but a necessary exercise

Connected Users
Worldwide
15.7% of the global population is connected
= 1.02 billion users
Connected
Not
Connected
Source: Internet World Stats

Connected Users
Canada
67.9% of the
Canaian population is connected
Not
Connected
= 21.9 million users
Connected
Source: Internet World Stats

Connected Users by
Nation Type
88% of connected users live in developed nations
Underdeveloped
Developed

(millions)
Latin
America/Carribean,
79.9
Australia/Oceania,
17.9
North America,
227.3
Asia, 364.3
Europe/ MidEast,
141.6

Other, 9%
Dutch, 2%
Portugese,
3%
French, 3%
Italian, 4%
English, 42%
Spanish, 7%
German, 7%
Korean, 5%
Chinese, 9%
Japanese,
9%

Internet Use in Canada and Ecommerce in the New Economy
Statistics Canada publishes the HOUSEHOLD
INTERNET USE SURVEY (HIUS) on a regular basis
The last published report was for 2003 data
There was no report published for 2004
There will be a report in 2006 reflecting 2005 statistics at the individual level

Internet Use in Canada and Ecommerce in the New Economy
In 2003, based on the last survey


3.2 Million Canadian households actively participated in ecommerce
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 Ecommerce in the New Economy
E-Commerce sales in Canada, 2004, by selected sectors
Wholesale trade
Manufacturing
$6.14 Billion
$4.23 Billion
Transportation/Warehousing $4.61 Billion
Retail Trade $2.95 Billion

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 aboveaverage income (80% of
Canadians with incomes of $80k or more per year) use it.

Time-pressured
Information-overloaded
Mobile, yet connected
Customized entertainment
Expanded working hours
Diminished job stability and loyalty
Rise in entrepreneurial interests

E-Customers: How they shop online
Self-serve
Anywhere, anytime
Access to more products
Emphasis on immediate fulfillment of needs and expectations
Strong desire to have a 1:1 experience, and they demand it
E-business is not just regular business

1.

E-communications
Messaging prospects and customers
2.

E-commerce
Selling, logistics, data sharing online
3.

E-care
Customer service and fulfillment

Many firms have greatly reduced marketing and fulfillment costs via electronic order processing, billing, and e-mail.
An “infinitely scalable” transaction channel

Web site development
Hardware and software
Rapid obsolescence
Learning curve

Marketers found customers Customers find marketers

Marketers found customers Customers find marketers
Local competition
International competition just a click away

Marketers found customers Customers find marketers
Local competition
International competition just a click away
Price was more static, controlled
Price is more dynamic

Marketers found customers Customers find marketers
Local competition
International competition just a click away
Price was more static, controlled
Interruption-based
Price is more dynamic
Permission-based

“Companies are learning to let customers come behind the counter and figure things out for themselves.”
- Arthur Middleton Hughes

1.
Marketers who grasp what Internet technologies can do will be better poised to capitalize on information technology.

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)
Personalized
____________,
Measurable
(2) ____________ and
Interactive
(3)_____________ .

B2C
B2B
C2C

Pure play (Amazon.com)
Enterprise “Click and Mortar”
(FutureShop, HBC.com)
Online exchange (eBay)
Portal (Yahoo!, MSN)
Metamediary (yourshops.ca)

Business transformation
(competit ive advantage, industry redefinition)
Pure Pure dot-com
Play
(Ama zon)
Enterprise
Clic k and Mortar
(eSchwab, most retaile rs)
Effectiveness
(customer
retention)
Efficiency
(cost reduction)
Business Process
Customer
Re lationship
Management
Activity
Brochureware
E-mail
PURE PLAY: A company devoted to only one line of business

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.

1.
2.
3.
Develop e-marketing infrastructure
Promote web site as an additional point of contact, not a replacement
Migrate customers to the Web

2.
3.
4.
1.
Next week, no class, intercession week
Assignment #4 due June 27 th , 2006
Work in your group projects
I will post a detailed marking scheme early next week