marketing performance management: tracking & … · •360° view of marketing and the customer...

Copyright © 2006, SAS Institute Inc. All rights reserved.

Marketing Performance Management:

Tracking & Improving Marketing Effectiveness

Neil HaywardSAS Global Customer Intelligence Practice


“150% of your economic profit comes from 20% of your customers!”

Geoffrey Colvin

“Up to 50% of Customers are Unprofitable”

Source: First Manhattan Consulting Group (average bank).


Source: Forrester Research Inc. 2006

Critical CEO Focus Areas


cooper roberts researchOn behalf of American Marketing Association - 2005

General Issues in Marketing Today

14262524

342927

334346

36424446

4047

4744

4243

Leveraging marketing technology advancesJustifying marketing investments enterprise wide

Marketing innovation/creativity versus business growthBuilding marketing knowledge in trends and developments

Maximizing customer profitabilityManaging brand strategy

Overall marketing accountability

Integrated marketing communicationsLinking marketing programs to financial performance

Alignment of organizational and marketing goals

Extremely Important Very Important

Critical Marketing Focus Areas


“under pressure…”external pressure…internal pressure…


Marketing Performance Management - Defined

The organizational capability that helps you understand, align and improve the performance of your marketing efforts, as well as quantify how marketing contributes to your company’s overall success.


Understand

Align

Improve

Marketing Performance Management – Core Concepts


Marketing Performance Management Framework

Understand

Enterprise Intelligence

Platform

Critical Marketing

Metrics

•Fast integration of data from anywhere

•Automated data cleansing and integration

•360° view of marketing and the customer

•Maximum transparency for users



Understand


Platform

Critical Marketing

Metrics

• Pre-packaged, best-practice marketing metrics including:

- Business / Financial- Customer- Marketing Process- Marketing Program


Metrics in Detail

Business / Financial• % Annual Brand Equity Change• % Increase in Shareholder Value• % Market Share• % Share of Wallet• Brand Equity Value• Total Profit• % Sales Growth• Actual Sales vs. Forecasted Sales• Average Online Sales per Visitor• Model-project Sales vs. Forecasted

Sales• Total Sales• Average call handling time• Average Cost of Sale

Customer Metrics• Average Acquisition Cost• Number of Net Adds • Number of new web visitors per day• Number of returning web visitors per day• Average Customer Profitability• % of customers with satisfaction rating of

>80%• Average number of complaints per customer• First Call Resolution %• Average Customer Lifetime Value (CLV)• Average high value products per customer• Average products per customer• Average Revenue per purchase/visit• Average RFM• Customer Equity• Segment Volume• Segment Migration %• Monthly Customer Attrition %


Metrics in Detail

Marketing Process• Average campaign cycle time• Average days ahead/behind of schedule

on campaign• Number of campaigns approved and

awaiting execution• Number of campaigns awaiting approval• Number of campaigns current in progress• Number of campaigns rejected• Average cycle time of external marketing

vendor(s)• Average Spend per External Marketing

Vendor(s)

Marketing Program• Average Campaign Response timeframe• Average Inbound Campaign Conversion Rate• Average Inbound Campaign Response Rate• Average Lift of Top 10 A/B Tests• Average Outbound Campaign Conversion Rate• Average Outbound Campaign Response Rate• Average Cost per Conversion• Average Cost per Response• Total Actual Costs• Total Budgeted Costs• Total Committed Costs• Total Fixed Costs• Website Stickiness• Average pages viewed per visitor• Average pages from email click through• Total Direct Marketing Campaign ROI• Total Mass Media Campaign ROI

Paul FerrisNeil BendlePhilip PfeiferDavid Reibstein



Understand


Platform

Critical Marketing

Metrics

Visualization &

Collaboration

Activity Planning,

Budgeting & Reporting

Align

• Marketing scorecard with role based capabilities and collaboration - from executives to product managers

• Multi-dimensional drilldown to uncover the root cause of an issue

• Intelligent monitoring and alerting

• Enterprise-wide sharing of insight



Platform

Understand

Visualization &

Collaboration

Activity Planning,


Align

Critical Marketing

Metrics

• Align marketing activities to strategies and goals

• Align plans & budgets across the organization

• Link marketing mission/vision to objectives and metrics, and understand dependencies across all

• Performance visible across the organization



Challenge Solution Results

Customer Intelligence

Automate marketing campaigns to drive strong lead management instead of spending large sums of money on mass communications.

To ‘industrialise’ leads generation Fixed operational campaigns will double

30 daily leads generation campaigns run

Faster “time to market”. Money saved by not

buying services from external suppliers as part of the campaign flow.

Generating both customer service and sales leads across the business network.

Increasing both the amount and the quality of its lead generation efforts.

“At Topdanmark, we do not spend money on large-scale image campaigns. We do not believe in their impact. We look at sales processes and customer processes instead, which we try to optimize in any way possible. Only when communication can make a difference in relation to sales and loyalty do we want to spend money on it. ”

Bjorn Verwohlt, Deputy Chief Executive , TopDanmark

http://www.topdanmark.dk/



Platform

Understand

Visualization &

Collaboration

Activity Planning,


Align

Critical Marketing

Metrics


Analytically Driven Insight

Improve

Marketing Investment

Optimization

Link Strategy to

Action

• Identify causal links between metrics and activity

• Understand each metric’s impact on performance

• Predict future performance

• Model impact of many scenarios, select the best

• More advanced evaluation of Customer Lifetime Value

Present Value

Future Value

?

$ Value of a

customer

$ + Profit

$ 0

$ - Loss

Today End of period

Forecast & uncertainty

Potential Value

?




Determine the most profitable customers

and products for marketing activities in competitive Telco

market

Activity based and analytical modelling enabled Fido Solutions Inc. to design more profitable products and retain high valued

clients

Reduced low-LTV customers by 50%

But retained high-LTV customers

“We reduced the number of low-LTV customers by about half, from 25 percent to 12 or 13 percent, while retaining high-LTV customers. We have a fixed budget – we stopped spending it on customers that did not warrant the investment and redirected funds to areas that better serve our best customers and our customer base as a whole."

Karim Salabi, Director of Marketing - Fido

http://www.flags.net/CANA.htm



Platform

Understand

Visualisation &

Collaboration

Activity Planning,


Align

Critical Marketing

Metrics



Improve


Optimization

Link Strategy to

Action

• Determine optimum marketing mix

• Determine optimum spending levels

• Integrated view of all marketing activities across all channels



Customer Intelligence“Marketing Optimization is the next step forward in the evolution of database marketing. Everyone who has a large customer base, many product lines and uses predictive modelling is going to move to this in the future”

Andrew Storey, Director of Decision Support, Scotiabank

Predict, for any given mix of

campaigns, which products should be marketed to each

individual customer

Optimisation techniques help Uplift in ROI generated

50% increase over traditional selection methods

Analyzed >70 offers at once for > 3M customers

Evaluate multiple campaigns at once

Across multi-channel and multi-stage campaigns

Making better use of its campaign response models

Realize the most efficient use of channel

http://www.flags.net/CANA.htm



Platform

Understand

Visualisation &

Collaboration

Activity Planning,


Align

Critical Marketing

Metrics



Improve


Optimization

Link Strategy to

Action

• Action strategy with Customer Intelligence solution capabilities

• Integrated, closed-loop marketing infrastructure

• Maximize effectiveness and creativity with “Best of Breed” marketing capabilities

• Maximize efficiency by automating marketing process

• Minimize TCO through tight integration




Segmentation based on a hierarchy of key behaviours

Segmentation facilitates marketing action

Communications tailored to address needs at each segment

More relevant customer contacts

Marketing Automation Strategic emphasis from mass marketing to direct comms

Tailored campaigns – halved audience

Campaign lead times reduced from over 1 month to less than 2 weeks

Halved marketing spend Increased responses by 70%;

incremental revenues by 213% ROI in 3 months

In order to grow revenue and maintain margins in a static market we are going to have to make more from existing customers.OPSM’s existing customer base is brimming with potential. We need to change behaviours to increase purchase frequency.

Megan Fitzsimmons, Customer Insight Manager, OPSM

Part of the:

Declining market share / falling volumes

Majority of customers: Single

purchase/category Long repurchase cycle

Strong growth objectives Customer based regarded as

untapped strategic resource

http://www.flags.net/ASTL.htm


Marketing Performance ManagementKey Benefits

Understand

Organizational & Marketing Performance

• Measure performance vs. critical objectives & validate strategy

• Demonstrate Marketing contribution

• Identify strategic threats & appropriate responses

• Measure effectiveness of processes & activities

• Improve ROMI


AlignUnderstand

Strategy, Objectives and Plans

• Organization-wide, “joined-up” planning

• Assign individual accountability & reward

• Better communication & collaboration

• Allocate resources appropriately

• Rapid performance feedback & adjustment



ImproveAlignUnderstand

Marketing Effectiveness

• Understand what to change to improve performance & when

• Consistently drive the best decisions through deep insight

• Optimize investment, maximize return

• Deliver repeatable, enduring improvement & competitive advantage



Recommendations: Develop a Marketing Performance Management Strategy

Align marketing goals with corporate strategy. Define metrics, measures and models based on marketing

role. Establish key metrics to measure marketing performance

as well as supporting processes and activities. Develop multidimensional analytical frameworks to

improve marketing planning. Optimize offers, campaigns, marketing mix and product

portfolio based on derived data and predictive models. Select vendors and solutions based on analytical

requirements, role-based marketing usability and database preferences.

Gartner viewpoint on MPM:By 2008, more than 60% of Global 1000 companies will deploy analytics outside of database marketing that improve visibility and accountability of marketing operations and programs (0.8 probability).

Gartner Customer Relationship Management Summit, “Marketing Performance Management: Making Marketing Accountable,” Kim Collins, November 2005


Thank You for Listening

Any Questions?

Marketing Performance Management:

Tracking & Improving Marketing Effectiveness

Neil HaywardSAS Global CI [email protected]

marketing performance management: tracking & … · •360° view of marketing and the customer...

Documents