Case Study: Using Analytics to Identify Business Opportunities

Today's case study comes to us from Sigma Marketing Group, a full-service database marketing firm. They've highlighted work they've done for their client, Greater Rochester Enterprise (GRE) helping them with regional economic development programs. I like this one because it incorporates analytics and cleverly uses data to generate a successful program.

The Challenge
GRE is a regional economic development organization supported by a team of private and public sector leaders dedicated to improving economic performance in the Rochester, New York Finger Lakes region. Its primary goals are to:

• retain and expand existing business;
• professionally market the region as a competitive, vibrant, and high-profile place for business location and growth;
• support business attraction, expansion, entrepreneurship, and innovation by collaborating with local businesses, universities, not-for-profit organizations, and government leaders.

Because of Rochester’s rich history of thriving high-tech companies, GRE determined that the region was best suited to attract three types of industries:

• Fuel Cell
• Biotechnology
• Optics

To that end, they approached SIGMA Marketing Group with the following challenge:
Focusing on these three industries, help us identify companies across the country that are likely to:

• Expand operations
• Consider Rochester as a potential site for expansion

The Breakthrough
SIGMA developed an analytic-based direct marketing program with the following methodology:

• The Lists: Build search criteria, customize lists from a variety of sources, then target decision-makers in the three industries across the country.
• The Mailer: Create a cost-effective, compelling direct mail piece that includes specific information on why the company should consider Rochester for its expansion needs. Specifically, SIGMA created bi-fold brochures that were customized for each industry.
• The Data: Include an attractive offer in the piece that would entice the recipient to:

• Log onto a new GRE Web page
• Provide self-reported data via a simple online questionnaire
• The Offer: For those recipients willing to go to the site, GRE provided them with:
• A free S.W.O.T. analysis (Strengths, Weaknesses, Opportunities, and Threats) written by a leader in the recipient’s industry.
• A link to a website that allowed recipients to choose amongst several business-related gifts or charitable contributions.

• The Analytical Model: SIGMA then created a model that analyzed the results into three categories:

• Alert: These are highly qualified prospects who should be called immediately.
• Semi-Alert: These are qualified prospects who should be called within 30 days.
• Future Contact: These prospects are not qualified for immediate follow-up, but should be contacted on an as-needed basis.

The Win
“SIGMA designed an effective direct mail campaign that yielded double our projected response. In addition, the self-reported data incorporated in this campaign delivered insightful quantitative research that has helped us further refine our marketing efforts.”

Direct Marketing Links

TGIF!

As always, I'm happy to bring you some of the articles that I found interesting this week.

How to Win the Social Marketing War
OK, I'm not sure I would categorize social marketing as a 'war', but author Pete Kulenek posts a nice summary of how businesses can/should include social activities such as Facebook and My Space in their marketing mix to help build traffic to your website. Learning: The key is to adopt this simple “5 H’s” approach:

1. Humor
2. Honesty
3. Have fun
4. Help people

Works for me!

Being Multichannel
Speaking of channels, take a look at this thought-provoking post from Kevin Hillstrom. He talks about how difficult it can be for marketers who practice in a variety of channels to truly dominate any one given channel. His advice (paraphrased by me, of course): focus on the customer and deliver the content and useful information that the customer needs. Make it easy for the customer to find you and figure out ways to 'pull' the customer to you as opposed to pushing tons of messages to her.

What went wrong with the market...
As a businessperson who's worked with the mortgage industry (yikes!) throughout all of my years of marketing, this post by Sandeep Giri hit a tad too close to home. He's provided a tongue in cheek explanation of today's current economic woes. Check it out for a laugh (and maybe some cries, too).

Now Be a Ninja!
For those of you out there who religiously measure your blog with Google Analytics, you'll appreciate this information from Avinash Kaushik. He explains some new releases from Google, including their advanced segmentation. I'll definitely take the time to explore these new features.

Mobile Marketing Advice

I continue to struggle with ideas on how to incorporate mobile marketing into my direct marketing tool-box. Specifically, I’m having a hard time getting my arms around practical applications, and thinking of real-life ideas that will benefit my clients. Yet, this is an industry that is huge and growing. Mobile marketing is a channel to be reckoned with and maximized for the right opportunity.

This article from DM News provides some interesting insight. The article presents four different viewpoints and tips on how to make mobile marketing work—how to incorporate this channel into your marketing mix.

The first tip is from David Spear, EVP of sales and marketing, mobile technologies, LSN Inc.

Takeaway: With mobile Web campaigns, it's best to keep the design elements simple

“Whether a campaign is designed to drive brand awareness, deliver knowledge or influence direct response, it must be easy for the subscriber to understand, engage and extract value from it. Make sure you consider all elements when reviewing a campaign for simplicity. If the campaign is designed to be simple and straightforward, then traction will follow and viral will grow organically and successfully. If the campaign is overly complicated, it will disappoint in almost every aspect.”

The next tip, recommending Short Message Service (SMS), also known as text messaging comes from Steve Siegel, VP of brand solutions, HipCricket. His reasons for SMS are pretty compelling:

• The reach of SMS—everyone uses text messaging.
• The ability to measure results (you know I love this benefit!)
• SMS allows for remarketing opportunities
• SMS can be used to gather important data points from consumers (another benefit I love!).

Next, Bryan Morrison, President, Ipsh, brings us great information about mobile marketing’s ability to exploit proximity strategies. He says: “Proximity is the concept that makes mobile special.”

“While the Internet forced marketers to learn interactivity, mobile layers context on top, making your location the most important benefit the medium can offer. Understanding proximity allows brands to provide consumers genuine utility in their day-to-day lives.”

Just consider the possibilities—retailers can offer you coupons or special offers, at the point in time that you’re entering the mall! Timely, and valuable to consumers.

Finally, Michael Chang, CEO and co-founder of Greystripe, offers insight into the benefits of in-game mobile marketing—essentially embedding your advertising within a game people play on their mobile device (phone). More info on this concept, from the article:

“In-game ads are primarily priced on a CPM basis, reflecting the strong branding opportunities available from full-screen ads and rich data-gathering features. Pricing is also impacted by targeting. As with WAP banners, regional targeting is almost always available, and some providers offer more refined targeting such as by carriers, types of handset, or based on user demographics.”

“Advertising in mobile games provides bigger and richer ads than SMS or WAP banners, as well as a positive brand association for the advertiser. In-game advertising offers unique features, a great user experience and allows advertisers to benefit from a positive association with fun mobile content.”

Hopefully, these four unique perspectives have shed some light on practical applications of mobile marketing. I know that they’ve given me some great food for thought!

Case Study: Alltel, Acxiom & A Marketing Database

It's Monday, and that means it's time for a direct marketing case study. This one comes to us jointly from Acxiom and Alltel Wireless. (Check out this link for a podcast on same topic, plus the opportunity to sign up for the full case study).

Customer Lifecycle Management

When Alltel Wireless engaged Acxiom to improve the precision, relevance and sophistication of its direct marketing communications, the company’s siloed sources of customer data and limited prospecting data were restricting their abilities to engage with customers and prospects. Acxiom worked closely with the Alltel Wireless team to deliver a set of solutions that anchored the entire campaign process. Acxiom combined its data products and customer intelligence with Alltel Wireless customer data and prospect list for targeted segmentation based on actual customer behavior and real household composites.

The Opportunity
Alltel Wireless wanted to increase customer acquisitions, improve retention and grow customer revenue with more targeted, relevant communications.

The Solution
Acxiom’s marketing database solution assisted in driving two top objectives:

• New customer growth
• Reduction in customer churn

The Results
265% increase in incremental customer postpaid additions tied to direct marketing efforts. “My Circle” campaign gross take rates exceeded 6% from existing customers. Direct customer communications have increased 285%.


Wow--pretty great results! Truly illustrates the power of a database.

DMA Recap

Home from Vegas. Phew! Good to be home, for sure.

I thought I would wrap up my commentary on the annual Direct Marketing Association's conference by sharing some of the highlights.

1. DMA's self-reported biggest accomplishment this year: the creation of a Do Not Mail plan. See the following from an article on DMA's website:

Rappaport (Donn, outgoing chairman of DMA's board of directors), who is chairman/chief executive officer of the American List Counsel, Inc. (ALC), began by highlighting the Board’s efforts to combat proposed state Do Not Mail legislation. “This year, the DMA Board marshaled all our collective talent, energy, and experience to forge a Do Not Mail action plan to tell our story to Congress, to the media, and for the first time ever, directly to the consumer."

2. Direct marketer of the year: Ebay. Last year Microsoft got this honor.

3. From John Greco's (DMA's President and CEO) opening keynote address, where he speaks about the state of the industry:

Here’s DMA’s estimate of the size of the entire direct marketing pie — well over two trillion dollars worth of sales this year, driven by direct marketing offers across all the addressable, interactive, direct response channels.

Sales driven by Internet and email marketing will exceed $500 billion this year. That number has grown very quickly over the past year. At the same time, a total of more than $702 billion of sales is being driven by the mail channel — including nearly $155 billion in catalog sales. Telephone marketing accounts for another $364 billion in additional sales, and direct response advertising in newspapers, television and other media drive $451 billion more in sales this year.

He goes on to discuss direct marketing accomplishments such as a focus on recycling. The entire transcript of his speech can be found here.

4. Theme of the DMA: "r u Connected?" Personally, I find this kinda juvenile--but that's just me...

5. Expected number of attendees: 12,000 (not sure that this many actually made it).

6. Best party: OK, I only attended two this year... But, I'll give the award to Experian and their nightclub experience at Pure in Caesars Palace. You have to agree that the projection of their name on the side of the casino was pretty cool.

Update from DMA!

It's Day 2 of DMA and I still have most (well, some) of my brain cells.

Arrived in Las Vegas yesterday. Cold and dry weather. Lots of traffic and people. Too much walking (but, that casino 3 miles away looks so close...). I dropped $10 in video poker, but won it all back. I'm such a high roller :)

Attended the opening exhibit hall session yesterday afternoon. My immediate impressions were: the show was quiet and MUCH smaller than years past. I'd say a good 1/3 fewer exhibitors. And, the big firms didn't have the same level of ostentation--you know the huge, crazy booth spaces. Of course, we can't blame anyone for scaling back in this economy. The other odd thing, I didn't hear of a single party held last night (Sunday). Did I miss something good?

There were some positives, though.

• Good vibe. People were actually stopping to talk to exhibitors. I saw a lot of conversations going on.
• New vendors. I've already met some new providers to the direct marketing industry, and I'm looking forward to meeting more.
  

So far, I've made my way through about 3 of the approx. 12 aisles of vendors. Some interesting companies I spoke to: Boingnet (offers personalized URLs on the cheap) and Jigsaw (they compile business information from business cards, allowing marketers to hone in on those hard-to-target industries and titles).

As always, I enjoyed my time at the Acxiom booth watching their famous magician (they've had this guy for over 10 years, and he's simply amazing--nice, too).

Well, I'm off for more DMA action. I'll be meeting many more firms today and I'd love to hear comments from others here at DMA with their discoveries, too.

As a bonus, check in tomorrow for an update on the two big parties: Experian and Acxiom!

Direct Marketing Links

Another Friday is upon us, and that means it's time for me to share some of the interesting articles I found this week.

Why People Buy - Online
Let's start out with a new blog I was happy to find this week: Direct Dispatch from Haggin Marketing. This article talks about what consumers value must when they're shopping online. It's surprisingly different than what we value when we shop in a physical store. The article also presents a list of the 50 retailers who are doing it right, online. It's no surprise that Amazon tops that list.

Marketing Professor Adopts Radiohead Business Model for Textbook
You know I'm a sucker for interesting price plans. And, like most people out there, the word Free is one four letter word I LOVE to hear. That's why I got a kick reading this article about a professor who is letting his students pay what they will for his book, the required course reading.
And, he's letting them set the price AFTER the course is complete. Love this concept, and hope to hear results of this pricing experiment.

Social Media/Networking a Marketing Flop
I couldn't agree more with one of my very favorite people, Lewis Green. On his blog that focuses on how to grow business while keeping people first (love the concept, don't you?), he tackles the issue of social marketing and discusses how failures in this area can often be due to companies not aligning their social media efforts with the overall corporate marketing strategy. Just makes good sense.

When you go the extra mile
Customer service is so darned important. And, it can be the one differentiator you may have. Good service can help keep your company strong (or at least keep you stronger than your competition) in bad economic times. This post from Andy Sernovitz's Damn! I wish I'd Thought of That! blog brings this point home. Good read.

The Future of Debates vs. Dialogs
From the Note to CMO Blog, this post got me thinking. The author makes a valid point that there is so much content out there, and asks the question: are people really reading and discussing, anymore? He contends that "there is a growing shortage of conversation, with only massive parallel monologues taking place." Excellent food for thought.

Eliminating the Pain from CRM Implementation

I can't tell you how many articles I've read throughout the years that provide advice on how to make CRM technology implementation less painful. I've posted on this topic a few times myself, right here on this Direct Marketing Blog. It begs the question: why can't some smart firm come up with a solution here?

Regardless, since CRM implementation (and the pain associated with it) remains a 'hot' topic, I thought I would share some tips from this Inside CRM article titled: 10 Ways IT Managers Can Make CRM Implementation Painless.

I've listed each of the tips below, but you can read the full article for more detailed explanations and suggestions.

1. Watch your alignment. In other words, start at the top and make sure your CRM efforts match your business goals.
2. Spread the word. To hook CRM applications into a company's core products and services, IT managers will likely have to beat multiple drums in order to be heard.
3. Sell it to the sales department. While end users across an organization must commit to diligently using and updating CRM systems, success may well depend on the acceptance level of the sales force.
4. Root for the home team. End users are not the only ones who will likely be in need of constant CRM coaxing. To best lead a staff to CRM victory, IT managers must constantly champion attainable corporate goals.
5. Stay ahead of the curve. Along with keeping the team happy, the most effective IT manager will work constantly to keep up with an industry known to change at warp speed.
6. Change from the inside out. External factors are not the only change agents at work. IT leaders will also want to ponder the internal impact of a new CRM system.
7. Raise the bar. Regulatory matters and other factors up the ante. Thus, IT managers must make sure that major decisions surrounding CRM initiatives are not relegated to those toiling in the trenches.
8. Visualize results and use carrots instead of sticks. The most capable CRM managers are high-level leaders, who are hyper-aware of CRM’s ability to shape an organization.
9. Take it on the run. In order for the sales staff or other departments to use CRM to get to know customers better, users will likely need a way to tap CRM applications remotely.
10. Pick your battles. Without question, a CRM initiative is laden with snags that can challenge even the best IT manager. Hence, a significant number of organizations chose to pass the lion's share of the chore to outsourcers.

Direct Marketing Employment Projections

You know I hate to add to the economic doom and gloom news... But, I guess it's no surprise that the most recent Bernhart and Associates survey reports: Direct Marketing Industry Cutting Back Sharply On Hiring Plans.

Direct marketers are coping with the slumping economy by making deep cuts in their hiring plans for the remainder of 2008, according to the latest Bernhart Associates employment survey. "Every one of our major employment indicators showed significant declines compared with summer and now stand at their lowest levels since the survey began 8 years ago," said Jerry Bernhart, owner of Bernhart Associates Executive Search.

There is a slight bright side to this story, however.

"Despite the gloomy outlook, nearly one-third of survey participants are still hiring and most don't have a hiring freeze," Bernhart added. "Certain job categories are holding up much better than others." When asked what positions employers intend to fill during the coming fourth quarter, Bernhart said sales and analytics dominated the list.

Marketing is always hit hard when the economy softens. Typically direct marketers are a tad safer than other disciplines that aren't able to justify their activities with hard facts--numbers and results. Yet, this news is disturbing.

It will be interesting to gauge the mood at the DMA conference next week (that is, if anyone shows up...). Look for live reports from DMA on this blog!

Case Study: Contact Management

First of all, some personal business! Our wedding was perfect--very romantic and beautiful. It was so nice to spend time with family and see old friends. Maui was pretty awesome, too.

But, believe it or not, I missed posting to this blog and it's good to get back into the swing of things. It's Monday and time for a direct marketing case study. I thought I would build on the concept of B2B lead management practices that I reported on last month. Today's case study comes to us from Direct Alliance, a firm that provide business process outsourcing (BPO) competencies in sales and marketing. It highlights how important analytics can be in understanding and impacting customer behavior (a concept that I firmly believe in).

Description
Customer analytics results score big with client and drives improved targeting and increased sales.

Business Challenge
The Client is a world leader in developing, manufacturing, and supplying printing solutions. Faced with increasing direct competition, the Client needed a cost-effective customer management strategy that would enable them to better understand and anticipate customer decision-making and buying behavior. Specifically, they wanted to understand the effectiveness of their marketing campaigns, determine their market position by type of business–such as small-medium and large enterprise–, know which products contributed most to their bottom-line financials, and reduce their cost of sales.

Solution
Direct Alliance developed a customer database analytical modeling program to review customer monthly, quarterly and annual purchasing patterns over a three-year period. From this, Direct Alliance developed scoring model to identify customers with a high-propensity to purchase within a specific quarter. The second part of the solution was the development of personalized product offerings to accommodate the customer’s quarterly buying cycle that were supported by personalized electronic direct marketing and call campaigns. Weekly pipeline reviews were conducted to continually evaluate the progress and success of customer contact and sales efforts.

Metrics
The Direct Alliance scoring model predicted customer buying patterns with 90% accuracy and customer touch improved to 100% from an average of 30%. Improved accuracy and effectiveness led to a 98% increase in first quarter revenues vs. only 69% in prior quarter, and buying accounts increased 42% percent year-over-year.