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.”

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.

Case Study: ASPCA and DR Television

For the right marketer, direct response television can be an excellent channel for lead and sales generation. Or, in this case donation-generation (is that even a correct term?).

Take a look at this DM News article: DRTV shows off new tricks. The article goes into nice detail about short-form verses long-form and articulates the challenges of measuring a multi-channel strategy. I've summarized their program by quoting bits and pieces of the article below.

Background
Television footage featuring adorable dogs, cats and other household pets elic­its an emotional response from nearly everyone. So it's no surprise that direct response television (DRTV) has come to play a major role in the marketing strategy of the American Society for the Prevention of Cruelty to Animals (ASPCA), which relies on one-time and monthly donations to fund programs related to animal-assisted therapy, animal poison control, animal cruelty, humane education, legislative services and shelter outreach.

Multi-Channel Challenges
“There's not just one mode of response [any­more],” says Loreen Babcock, CEO of agency Unit 7, which handles a wide variety of DRTV programs. Dealing with multiple call to action options can be challenging, she adds: “We have a pretty good feel for the benefit of having more than one type of communication, but not neces­sarily the frequency and the timing.”

Michelle Cardinal, CEO and president of Cmedia, agrees that one call to action just isn't enough anymore — today's DRTV campaigns must also drive to a URL. “You won't survive if you don't understand that it's no longer just about 1-800 numbers,” she says, pointing out that DRTV and the online channel used to be on “different planets.” Now, she explains, “[companies need] to bring them together to see how they complement each other.”

Froehlich has seen this firsthand, as the ASPCA's DRTV program has evolved since its inception. “There's been a lot of crossover and multichannel fundraising going on,” he says. But the length and target audience its DRTV spots have also changed significantly, because of the changing television space, proliferation of channels and shifting viewer habits.

Experts emphasize that companies that have made DRTV a central part of their marketing over the years now need to cover all their bases with a broader spectrum of media that can integrate with the DRTV channel. Froehlich insists that the ASPCA now has a “pretty savvy” Web strat­egy, and that ASPCA's direct mail efforts have improved over the past few years — which he suspects is due to consumers' increased brand awareness from the DRTV program.

“There's that wonderful ‘halo effect,' which is the rub-off that TV brings to aid in the sales of products through other distribution chan­nels,” explains Kirby. “So television educates, informs and creates emotion and impulse, but the consumer may elect to execute the transaction online.” This is why it's critical to link the digital and TV experiences in terms of the messaging and the creative, he continues.

Results
“DRTV is successful when you take a highly complex and emotional problem and offer a simple solution that passionate people can do on their own,” says Steve Froehlich, senior director of direct response at the ASPCA, which has raised more than $40 million since its DRTV program launched in February 2004.

“DRTV still leverages the [dominant] mass medium of our time — television,” Kirby says, pointing out that the channel lends itself to emo­tion and impulse, which are important elements in making a sale, and it is also accountable. “So, while TV media is very fragmented, DRTV can still build awareness for a brand and make cost of advertising self-liquidating when the product is sold directly to the consumer,” he continues.

“The future is about understanding the relation­ship between DRTV and online behavior,” Peter­son adds. “When you can show direct correlations, that's the endgame for anyone in DRTV.”

Case Study Monday: Acquisition Direct Mail

At RRW, we spend more than 50% of our time helping our clients acquire new customers. The rest of the time is spent in working on customer marketing (retention, segmentation, etc) and other direct marketing activities for our clients. Of course we spend time running the business (yikes--accounting!) and writing this blog :)

My point--over the years, we've become pretty good at figuring out how to acquire profitable new customers. So, we thought we'd share one of our own success stories today.

Situation Overview
Our client, a leading mortgage lender with aggressive new customer acquisition goals was faced with the following list targeting challenges:

• They needed to maintain their historic high response rates to their ongoing direct mail campaigns, but at the same time,
• Dramatically improve their approval rates. Over time, in a saturated refinance market, responsive applicants were increasingly failing to meet credit criteria, or they did not have the right equity requirements.

Solution Review
RRW Consulting recommended a data-centric, analytically based approach that leveraged available realty data as well as custom modeling services. We brought a new science to list selection that allowed this lender to achieve its response goals and yet dramatically improve conversion of loan applicants to customers.

We designed a three-prong data selection approach:

• We utilized industry-leading sources of homeowner and realty data to ensure that the appropriate equity was available for each prospective homeowner. Specifically, we relied on the “Available Equity” and “Loan to Value” list selections offered by those data compilers that specialize in the compilation of first and second trust deeds, integrated with county tax assessor data. This initial pre-select was the first “cut” in determining that the prospect would ultimately qualify for the loan.
• We built a Response Model that capitalized on prior prospect performance to predict future response performance. Essentially, we cloned prior responders to this lenders’ campaigns. We built a scorecard based on their demographic and psychographic characteristics that ranked the overall homeowner prospect universe from the most likely to respond to the least likely to respond.
• Finally, we developed an Approval Model that isolated traits of homeowners likely to be approved for the refinance loan. Since we were not extending a firm offer of credit, we could not utilize individual level credit data, making the task of predicting loan approval especially difficult. However, the model was able to successfully rank order prospects in terms of their likelihood to be approved for the loan. The models’ success can be attributed to the wealth of demographics included in the model, and in particular the inclusion of credit data aggregated to the ZIP+4 level.

Implementation Overview
As can be imagined, the list selection approach quickly became fairly complex, due to the number of realty selections employed combined with the set of response and approval models. We developed a data selection and testing matrix that allowed us to be very responsive to changes in the clients’ goals and fluctuations in the marketplace. For example, if the CEO needed more applications flowing to the call centers, we relied heavier on the response model and less on the approval model. Conversely, if the applicant quality was being questioned, we’d select and mail those applicants more likely to be approved. Finally, we also considered frequency of prospect mailings. We managed the campaigns to reach qualified prospects more frequently than those less likely to respond, or to be approved.

The scientific data selection approach resulted in success. Our client was able to retain their high response levels and also dramatically improved loan approval rates.

Case Study Monday: Data Assessment

It's official--we've decided to dedicate each Monday's post to a marketing case study. Last week we shared how RRW helped a leading telecommunications firm retain and up-sell profitable customers. This week we'll focus on our work with another communications giant and talk about how our analysis of their marketing data helped them optimize their data management strategies.

Situation Overview:
The database marketing team at AT&T/BellSouth wanted to maximize the value and utilization of their rich internal data stores. They had a general understanding that their customer data was valuable, and that they could potentially be buying unnecessary external data from a variety of similar data sources. They also knew that they needed to understand how the data was being used, what types of programs were being fed by the data, who were the power users of the data, and who was not using the data. They needed to understand current and future data needs and requirements.

Solution Overview
RRW Consulting recommended a thorough examination of the data assets and systems access. The consulting engagement included:

• A series of user interviews where we gleaned valuable information as to specific programs that used the customer data, along with overall perceptions of the data.
• These interviews not only uncovered what data was valuable for today's programs, but also revealed future directions, so that we could match our recommendations to meet both today's and tomorrow's needs.
• Detailed written descriptions of the current systems environment that included ease of data access (list pulls, financial report generation, etc.).
  
• A data content analysis to allow for a thorough understanding of the deliverability and data depth.
• Interviews of all divisions that purchased external data looking for purchase redundancies.

Results:

• The database team was armed with the details they needed to convince Leadership of the value of the data and the continued investment in data management systems and data.
• Data recommendations allowed AT&T/BellSouth to focus their external data investment only on data that would support current and upcoming programs.
  
• Use of the database and the data increased exponentially throughout the company.
• External data costs were reduced by 10%

Overall, our work with AT&T/BellSouth allowed them to get a handle on how data was being used throughout this large organization. Further, we were able to match available external data to the current and future marketing programs, hence optimizing their significant investment in external data. For example, we found the best source of e-mail data for them. Plus, we identified the most accurate source of ethnic data and the best sources of hi-tech information (both areas that they were focusing on).

But, it's really not all about us! We look forward to featuring other interesting case studies--please share your success stories with us and we'll feature them in an upcoming Monday post. Simply e-mail the case study to: info@rrwconsulting.com. Should make for some interesting Monday reading, reading all of these excellent direct marketing success stories!