Database Marketing Fundamentals
Targeting, Tracking, Evaluating Response
July 22, 2009
Joanne Steller
TRG Vice President, Strategic Communications
Direct & Database Marketing
Direct Marketing
•
Messages sent direct into homes
•
Drive purchases through “call-to-action”
•
E.g.: Direct Mail, Telemarketing, e-mail
Database Marketing
•
Deploy database for tailored communications
•
Analysis-basis for targeting likely prospects
•
Data Warehouse stores information
2
Successful Database Marketing
Target
Test
Track
Assess Response
Refine / Repeat
3
Targeting: The Who Rules
Message
•
•
Language
Offer
Contact Channel
•
Direct
o Paper
o Electronic
•
Mass media
Carrier
•
•
•
Personalized
communication
Catalog/brochure
Paper/electronic/both?
Scope of Contact
•
•
•
Quantity
Frequency
Timing
4
Revenues
Numbers of Patrons
Slide 5
Targeting Techniques
Geography
Demographic
Past
Behavior
Predictive
Modeling
6
Geographic Selection
Where do patrons live?
•
By zip and SCF
•
Volume and % of Population
•
By segment --different
audiences /same regions?
Target opportunity areas
•
Most likely to respond
•
Eliminate waste – why mail
Alaska?
12.0 Mi
7
Who are your patrons?
Do your offers appeal
to certain life-stages?
Use demographics to
filter or qualify your
selection
0.0%
< 18
18 - 19
20 - 21
22 - 23
24 - 25
26 - 27
28 - 29
30 - 31
32 - 33
34 - 35
36 - 37
38 - 39
40 - 41
42 - 43
44 - 45
46 - 47
48 - 49
50 - 51
52 - 53
54 - 55
56 - 57
58 - 59
60 - 61
62 - 63
64 - 65
66 - 67
68 - 69
70 - 71
72 - 73
74 - 75
76 - 77
78 - 79
80 - 81
82 - 83
84 - 85
86 - 87
88 - 89
90 - 91
92 - 93
94 - 95
96 - 97
98 - 99
> 99
Demographic Targeting
7.0%
Age - Head of Household
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
PRIZM - Urban Uptown
Young Digerati
Money & Brains
Bohemian Mix
8
Targeting Past Behavior
Buyer type segmentation
• Renewal
• Reactivation
Response analysis
• Key coding (manual)
• Response reporting (electronic)
Predictive Model
Re-segmentation Example
Segment: Long Lapsed
N=25,000
Response=25
Response %=0.1%
Avg. Order: $350
Total $: $8,750
Cost/Piece: $0.40
Expense: $10,000
Cost-of-Sale: $1.14
Segment: Enhanced
Long Lapsed
N=10,000
Response=20
Response %=0.2%
Avg. Order: $350
Total $: 7,000
Cost/Piece: $0.40
Expense: $4,000
Cost-of-Sale: $0.57
10
Enhanced Targeting: Test
Mitigates risk
• Never 100%
right/wrong
Refines approach
• A / B offers
• Measure both
Higher short-term cost-of
sale
• More contacts,
versions
• Lower per patron
investments likely
Better long-term response
11
Evaluating Response for
Improved Responsiveness
Compare:
•
•
Who/how many contacted
Who responded / how much achieved
Requires advance tracking plan
•
•
Key codes before printing
Target list order before distribution
Relies on assistance
•
•
Collecting, tabulating key codes
System or outsourced response analysis
12
Key coding:
Do response analysis yourself
Assign code
Ask for, record code at point of
order
•
•
•
Ticket office
Phone
Online
Tabulate results
Evaluate results
•
Number contacted vs.
results achieved
Good basic technique
•
•
•
Can be done in-house
Little/no $$ expense
Required time investment
Provides directional analysis
•
•
Sound, just not exact
Gaps: actual vs. reported
results
13
Response Reporting:
Deploy systems, services for analysis
After campaign
•
Match-back, back test
Electronic examination
•
•
HH contacted
HH who bought
Detailed measurement
•
•
•
Service or system
provided
Deep analysis possible
•
•
•
Degree of response
By segment / portion
ROI – spend effectively
Segmentation
Units of sale
Sales revenue
14
Response Rate Tracking
Segment
CSO 04-05 FULL SUBS
CSO 04-05 CYO SUBS
Over Producers
Under Producers
Non-Producers
Mailout
672
210
CSO 04-05 STBS
269
CSO 03-04 CYO SUBS
138
CSO 03-04 STBS
693
CSO 02-03 CYO SUBS
48
CSO 03-04 FULL SUBS
129
CSO 04-05 TCHAIKOVSKY FEST STB'S
384
CSO 02-03 FULL SUBS
113
03-04 OPERA SUBS
83
CSO 04-05 MESSIAH STBS
362
CSO 03-04 YO YO MA STBS
227
CSO 02-03 STBS
741
04-05 REP THEATRE SUBS
60
04-05 OPERA STBS
724
CSO 03-04 AMAHL & NIGHT VISITORS STBS
210
04-05 OPERA SUBS
144
CSO 03-04 JUBILENT SYKES STBS
186
04-05 BROADWAY SUBS
528
04 DAVE BRUEBECK STB'S
330
04-05 BALLET SUBS
119
04-05, 03-04 BACH FESTIVAL STB'S
1,834
03-04 OPERA STBS
1,184
04-05 BROADWAY STBS - FULL MONTY
456
CSO 02-03 CHRISTMAS CANTATA STBS
235
04-05 BALLET STBS
1,062
04 WYNTON MARSALIS STB'S
286
04 HARRY CONNICK STB'S
447
CSO 02-03 PINK MARTINI STBS
572
04-05 BALLET - NUTCRACKER STBS
1,295
04-05 BROADWAY STBS - PRODUCERS
2,456
04-05 BROADWAY STBS - CONTACT
45
04-05 BROADWAY STBS - SMOKEY JOES CAF╔ 316
04-05 OFAM STBS - MY FAIR LADY
585
04-05 REP THEATRE STBS
728
# of
Response Rate
Average
Responses Response Rate
Index
Seat Qty
Total $
Sales
$ Per Name Total Expense
550
81.85%
36.91
1,068 $ 229,673 $
418 $
341.77 $
1,122
133
63.33%
28.56
848 $
38,522 $
290 $
183.44 $
351
41
17
38
2
5
14
3
2
8
5
16
1
12
3
2
2
5
3
1
13
7
2
1
4
1
1
1
2
3
-
15.24%
12.32%
5.48%
4.17%
3.88%
3.65%
2.65%
2.41%
2.21%
2.20%
2.16%
1.67%
1.66%
1.43%
1.39%
1.08%
0.95%
0.91%
0.84%
0.71%
0.59%
0.44%
0.43%
0.38%
0.35%
0.22%
0.17%
0.15%
0.12%
6.87
5.56
2.47
1.88
1.75
1.64
1.20
1.09
1.00
0.99
0.97
0.75
0.75
0.64
0.63
0.48
0.43
0.41
0.38
0.32
0.27
0.20
0.19
0.17
0.16
0.10
0.08
0.07
0.06
216
97
194
2
7
61
15
16
38
12
78
8
34
11
5
20
28
17
8
24
19
6
2
10
2
8
2
16
5
0
0
0
0
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
11,915
4,289
11,062
588
1,346
4,673
772
903
2,984
1,408
4,159
210
3,525
708
1,498
637
1,367
703
312
3,654
2,558
344
392
1,716
212
120
392
582
998
-
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
291
252
291
294
269
334
257
452
373
282
260
210
294
236
749
319
273
234
312
281
365
172
392
429
212
120
392
291
333
-
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
44.29
31.08
15.96
12.25
10.43
12.17
6.83
10.88
8.24
6.20
5.61
3.50
4.87
3.37
10.40
3.43
2.59
2.13
2.62
1.99
2.16
0.75
1.67
1.62
0.74
0.27
0.69
0.45
0.41
-
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
449
230
1,157
80
215
641
189
139
605
379
1,237
100
1,209
351
240
311
882
551
199
3,063
1,977
762
392
1,774
478
746
955
2,163
4,102
75
528
977
1,216
COS
0%
1%
4%
5%
10%
14%
16%
14%
24%
15%
20%
27%
30%
48%
34%
50%
16%
49%
65%
78%
64%
84%
77%
221%
100%
103%
225%
622%
244%
372%
411%
15