Database Marketing Management 2

Front 1

Time Series Techniques (7 types)

Back 1

LTV, RFM, Modelling, Clustering, Neural Networks, Regression Analysis, Chaid Analysis

Front 2

Response Models

Back 2

Predictive models developed based on customers that participated in past campaign and the model predicts their response to that campaign

Front 3

Propensity Models

Back 3

Using overall customer base when no past campaigns available, likelihood that a customer will purchase on their own, help identify a need or want, not a response rate predictor

Front 4

Pros of Predictive Modelling (4)

Back 4

-Allows marketer to predict a customer's future behaviour
-Identifies most important predictors of response
-Probabilities of response can be incorporated with NPV to increase ROI
-Each customer receives individual score so they can be ranked

Front 5

Cons of Predictive Modelling (3)

Back 5

-Doesn't work if campaigns change
-Models have to be stable to be leveraged multiple times
-Do not tell you WHY the customer is responding or interested

Front 6

Real Life Predictive Models (Rates between Deciles)

Back 6

Customers in top decile are 3.4x more likely to respond than the average, customers in the top decile are 18x more likely to respond than the bottom decile

Front 7

Attrition

Back 7

-not all attrition is bad
-models identify who is about to leave
-how do you define attrition?

Front 8

Acquisition 2 areas to consider

Back 8

-Market Decisions: who and how are we going to contact?
-Product /Offer Decisions: what are we going to offer?

Front 9

Hierarchy of Acquisition Targeting Options (7)

Back 9

1. Recently Lapse Customers
2. Former Customers
3. Enquirers
4. Referrals
5. Profiled Prospects
6. Handraisers
7. Suspects

Front 10

Lapsed Customers (3)

Back 10

-Activation
-New Product
-Research into Inactivation

Front 11

Former Customers (3)

Back 11

-Winback Programs
-Similar to Activation
-Research- plug the holes

Front 12

Enquirers

Back 12

-Need sales processes in place or the relationship will be lost

Front 13

Referrals

Back 13

-Don't embarrass the referrer
-Set up referral incentives
-Incent for profitable relationships

Front 14

Affinity Marketing

Back 14

-Target a commercial partner's customers ie. Meloche Monnex

Front 15

Suggested Targeting Strategy

Back 15

-Target so that you pick customers who will stay with you and who are likely to be profitable
-Target in a way that keeps your costs of recruitment to a minimum
-Use incentives carefully
-Use external data

Front 16

What do prospects want? (6)

Back 16

-value
-a point of difference from competitors
-reassurance
-low risk
-a convenient way of buying
-an incentive to give us that final push

Front 17

Why are existing customers more profitable? (4)

Back 17

-Less acquisition cost needed
-Price premium- loyal customers are happy with the value they are getting
-Referrals
-Revenue growth from customers as learning allows better service

Front 18

Steps to Fix Attrition (3)

Back 18

-Identify and measure all types of attrition and recognize their impact
-Identify and prioritize your HVC (customer value models, customer segmentation)
-Define a proactive customer retention strategy

Front 19

Types of Attrition (2)

Back 19

-Partial
-Hidden or Silent

Front 20

Proactive Approach to Attrition (3 steps)

Back 20

-Detect
-Prioritize
-Act

Front 21

Loyalty vs. Profit

Back 21

HL/HP= True Friends
HL/LP=Barnacles
LL/HP=Butterflies
LL/LP=Strangers

Front 22

Managing Unprofitables (4 reasons for why unprofitable)

Back 22

1. Low share of wallet
2. Small wallet -> LTV?
3. Wrong products/services/prices
4. True unprofitables

Front 23

When would you not fire a customer?

Back 23

-Oligopolies
-Community or social obligations
-Influential customers
-Brand damage

Front 24

Strengthening a Relationship (Act 3 things)

Back 24

-Duration (maintain the continuity of the cx within the company)
-Intensity (constant two-way communication to make them feel personal connection)
-Profitability (foster long-term profitability without over-saturation)

Front 25

How to Cross-Sell/Upsell (7 steps)

Back 25

-Group customers into segments
-Calculate the LTV of each segment
-Assess possibility of modifying behaviour to improve profitability or retention
-Think like a customer
-Develop a list of products, services, or offers that each segment might value
-Estimate costs & revenues for each approach
- Test and Roll Out

Front 26

Creating Customer Loyalty (7 Tools)

Back 26

-Database
-Processes
-Customer Care/Customer Service
-Product
-Brand Image
-Human Resources
-Loyalty Programs

Front 27

Achieving Loyalty

Back 27

-Must be corporate strategy and effort
-Create superior value
-Know customer

Front 28

LTV

Back 28

Net present value of all future net profits expected from a customer over a given number of years

Front 29

Why use LTV (3)?

Back 29

-tells how much we can afford to spend
-enhances targeting of sales and retention efforts (more time and energy)
-helps us understand which prospective customers are the most attractive to acquire

Front 30

3 Things Needed to Calculate LTV:

Back 30

1. Number of years a customer buys from a company
2. The % of customers remaining loyal to the company
3. The amount spent per year

Front 31

Drip Irrigation Technique

Back 31

Each interaction used to learn one more incremental thing about the customer

Front 32

Golden Question

Back 32

Reveal important information about a customer while requiring the least possible effort from the customer

Front 33

Ways to Earn Trust (6)

Back 33

-Get informed consent
-Use a flexible opt-in policy
-Make an explicit bargain
-selective use of targeted web ads
-clear simple and readable privacy policy
-emphasize the importance of privacy protection to employees who handle personally identifiable customer interaction

Front 34

Direct Marketing (4)

Back 34

-Establish objectives
-Separate the target markets and use direct personal media
-Calculate the allowable marketing spend per sale or LTV of customers
-Choose an incentive

Front 35

Five Stages of Cross-Selling/Upselling

Back 35

1. Welcome communication
2. Upsell to an upgrade
3. Cross-sell to related products
4. Renewal
5. Reactive if lost

Front 36

Loyalty Incentives

Back 36

-Give cash value
-Offer convenience
-Are Relevant
-Have aspirational value (reflect the brand)
-Offer choice (points)

Front 37

Loyalty Prgrm Effects on Behaviour (4)

Back 37

-loyalty programs increase business (60% stay likely)
- airline and credit card program are most successful
-loyalty programs encourage consolidation of purchases
-discontinuing a loyalty program reduces sales

Front 38

Issues with Loyalty Programs

Back 38

-Customers see them as something for nothing
-Copied by competitors
-Customers get confused and bored
-Customer behaviour unchanged

Front 39

3 Types of Consent

Back 39

Expressed
Negative
Implied

Front 40

Definition of Direct Marketing

Back 40

-interactive process of addressable communication that is measurable and is analyzed on a database, requests a measurable response in return

Front 41

3 Components to Producing a Response with DM

Back 41

List/Media (40%)
Offer (30%)
Creative Execution (30%)

Front 42

Factors Affecting Media Choice

Back 42

AIMRITE
Audience
Impact
Message
Response
Internal Management
The End result

Front 43

Types of Direct Mail

Back 43

Solo Direct- sent directly
Co-Op Direct- special offers from non-competing products

Front 44

Advantages of Direct Mail (5)

Back 44

-Targeted
-High Reach
-Geographic Flexibility
-Creative Flexibility
-Measurability

Front 45

Disadvantages of Direct Mail (4)

Back 45

-Low Response Rate
-High cost per exposure
Image and lifespan
Time required

Front 46

4 Elements to Telemarketing Success

Back 46

1. List or target audience
2. Offer being communicated
3. Medium
4. Quality of script/message communicated

Front 47

Multi-Contact more likely when...

Back 47

1. product is expensive
2. product is complex
3. there is a need for reassurance
4. cost vs. payback makes financial sense

Front 48

Basic Testing Rules (7)

Back 48

-test big things first
-test large enough sample size to get results
-test 1 variable at a time
-test against a control
-make your calcuations using roll-out costs
-measure your results by net dollars

Front 49

Benefits of Testing (3)

Back 49

-Minimize Risk/Max Profit
-Stimulate Creativity
-Help understand customers better

Front 50

Collaboration

Back 50

- change/change
- appropriate where customer may not articulate what they want

Front 51

Adaptive

Back 51

- no change/no change
one standard, customizable product that they can alter themselves (dr scholls)

Front 52

Costmetic

Back 52

-standard product presented differently
- ipod engraved

Front 53

Transparent

Back 53

Ritz Carlton

Front 54

3 Factors to Success of CRM

Back 54

People
Process
Technology