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Introduc)on to  Marke)ng  Intelligence   Adding  Real  Value  to  Your  Marke)ng  Department  

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“Every week,  I  have  to  go  to  a  gun  fight,   the  senior  execu)ve  leadership  mee)ng,   and  I  am  )red  of  going  to  a  gun  fight   with  a  knife.”  

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Marketers are  struggling  with  their   budgets  and  are  constantly  being  asked   to  do  more  with  less.  

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For marketers,  the  challenge  of   providing  concrete  results  is  amplified   since  brand  and  awareness  are  “fuzzy”   and  are  not  directly  related  to  sales   revenues  

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During this  course,  I  will  give  you   examples  of  252  companies  that  make   up  over  US$  53  billion  of  annual   marke)ng  spending  

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Marke)ng Intelligence  Framework  

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Some Food  For  Thought  

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55% of  the  marke)ng  execu)ves   surveyed  reported  that  their  staff  does   not  understand  essen)al  marke)ng   metrics  

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80% of  organiza)ons  do  not  use   marke)ng  intelligence  

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What you  will  learn  in  this  course  is   that  this  can  all  be  changed  without  a   major  investment  in  )me  or  resources   by  focusing  on  measuring  the  right   metrics  in  the  right  way  

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This course  is  intended  for  anyone  in   marke)ng  who  wants  to  significantly   improve  their  marke)ng  performance   and  jus)fy  marke)ng  spending  

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Now, we  could  talk  about  the  50  to   100  metrics  applicable  to  marke)ng,   but  I  will  talk  about  15  that  are  really   important  

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I will  teach  you  how  to  use  these  metrics   to  quan)fy  the  value  of  marke)ng  and   radically  improve  marke)ng   performance  

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Why is  marke:ng  intelligence  so   difficult  for  many  organiza:ons?  

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Reasons range  from  “we  don’t  know   how”  to  the  challenge  that  branding  and   awareness  marke)ng  ac)vi)es  are  fuzzy   and  don’t  directly  impact  sales  revenues   in  a  short  )me  period  

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Interna)onal Data  Corpora)on  (IDC)   es)mates  that  data  storage  is  growing  at   60%  annually,  which  tells  us  that  stored   data  is  doubling  every  20  months  

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The Different  Scopes  of  Intelligence  

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The Marke:ng  Divide  

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A Story  of  3  Electronic  Retailers  

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One day,  the  CMO  of  Best  Buy  was  asked  –   Who  is  your  primary  compe)tor?  

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You would  think  that  he  would  answer  –   “Circuit  City,”  but  instead  he  said  –     “Wal-­‐Mart”  

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What?!?! Walmart?  

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Wal-­‐Mart is  the  world’s  largest  retail   chain;  and  with  amazingly  efficient   supply  chain  and  economy  of  scale,   driving  price  and  margins  to  the  bare   minimum  

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But why  not  Circuit  City?     He  said  –  “They  just  don’t  get  it.”  

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Circuit City’s  marke)ng  strategy  was  to   constantly  run  sales.  Yes,  this  drew   customers  to  the  stores  and  drove  sales   revenues,  but  compe)ng  with  Wal-­‐Mart   –  running  sales  actually  lost  the  business   money  –  nega)ve  profitability!  

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Circuit City  went  bankrupt  and  was   liquidated  in  January  2009  

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Why is  Best  Buy  different?     How  did  it  survive?  

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A significant  amount  of  the  marke)ng   budget  is  spent  on  demand  genera)on   marke)ng  –  designed  to  get  customers   into  the  stores  

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But Best  Buy  spends  more  money  on   branding,  CRM  and  infrastructure  to   support  Marke)ng  Intelligence  

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Best Buy  also  keeps  score  –  measuring   the  results  of  marke)ng  ini)a)ves  to   op)mize  its  marke)ng  ac)vi)es  

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Best Buy  marketers  analyze  customer   purchasing  characteris)cs  and   demographics  on  a  store-­‐by-­‐store  basis.  

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How did  that  help?  

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They iden)fied  one  segment  in  certain   geographies  that  they  called  “Jills”  

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“Jills” are  soccer  moms  who  may  be   working  but  also  run  the  family.  She  also   makes  the  primary  electronics   purchasing  decisions  for  the  household  

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How did  the  “Jills”  help  Best  Buy?  

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Best Buy  customized  the  marke)ng  in   specific  stores  where  there  were  a   significant  number  of  “Jills”  in  the   surrounding  popula)on  

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This meant  specialized  in-­‐store   adver)sing,  direct  mail  and  changing  the   product  mix  to  appeal  to  them,  which   lead  to  a  large  percentage  increase  in   these  store’s  sales  revenue  

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Marketers that  “get”  marke)ng  have  a   compe))ve  advantage  and  those  who   do  not  gradually  lose  market  share  and/ or  profitability  un)l  they  are  swallowed   by  compe)tors  or  go  out  of  business  

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Some Sta:s:cs  

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There is  an  existence  of  a  divide   between  market  leaders  and   followers  

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What Do  We  Know  From  Our  Research   Ø 

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53% of  organiza)ons  do  not  use  forecasts  of  campaign  return   on  marke)ng  investment  (ROMI),  net  present  value  (NPV),   customer  life)me  value  (CLTV),  and/or  other  performance   metrics   57%  do  not  use  business  cases  to  evaluate  marke)ng   campaigns  for  funding   61%  do  not  have  a  defined  and  documented  process  to   screen,  evaluate,  and  priori)ze  marke)ng  campaigns   69%  do  not  use  experiments  contras)ng  the  impact  of  pilot   marke)ng  campaigns  with  a  control  group   73%  do  not  use  scorecards  ra)ng  each  campaign  rela)ve  to   key  business  objec)ves  prior  to  a  funding  decision.  

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A majority  of  marke)ng  organiza)ons  do   not  have  professional  processes  in  place   to  manage  marke)ng  and  that  most  do   not  use  marke)ng  metrics  in  their  day-­‐ to-­‐day  marke)ng  ac)vi)es  

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The divide  is  even  more  pronounced   when  we  look  at  marke)ng   organiza)ons’  use  of  data  

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How Marke)ng  Uses  Data   Ø 

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57% do  not  use  a  centralized  database  to  track  and  analyze   their  marke)ng  campaigns   70%  do  not  use  an  enterprise  data  warehouse  (EDW)  to  track   customer  interac)ons  with  the  firm  and  with  marke)ng   campaigns   71%  do  not  use  an  EDW  and  analy)cs  to  guide  marke)ng   campaign  selec)on   80%  do  not  use  an  integrated  data  source  to  guide  automated   event-­‐driven  marke)ng   82%  never  track  and  monitor  marke)ng  campaigns  and  assets   using  automated  sonware  such  as  marke)ng  resource   management  (MRM)  

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The goal  of  this  course  is  to  give  you   transparent  metrics,  tools,  examples,   and  a  road  map  to  actually  do  data-­‐ driven  marke)ng  and  apply  marke)ng   metrics  in  your  organiza)on  

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The Metrics   And  Why  They  Are  Important  To  Marketers  

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‘‘Half the  money  I  spend  on  marke)ng  is   wasted—the  problem  is  I  don’t  know   which  half.’’   -­‐  John  Wanamaker  

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‘‘Half the  money  I  spend  on  marke)ng  is   wasted,  but  today  I  know  which  half:  TV   adver)sing.’’  

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The Metrics  That  Work   Ø 

Non Financial  Metrics   –  Brand  awareness   –  Test-­‐drive   –  Churn   –  Customer  sa)sfac)on   (CSAT)   –  Take  rate  

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Financial Metrics   –  Profit   –  Net  present  value  (NPV)   –  Internal  rate  of  return   (IRR)   –  Payback   –  Customer  life)me  value   (CLTV)    

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The Metrics  That  Work   Ø 

New Age  Metrics  (Internet   Metrics)   –  Cost  per  click  (CPC)   –  Transac)on  conversion   rate  (TCR)   –  Return  on  ad  dollars   spent  (ROA)   –  Bounce  rate   –  Word  of  mouth  (WOM)   (social  media  reach)  

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Ø We will  have  an  in-­‐depth  

discussion of  Internet   marke)ng  best  prac)ces   Ø Give  mul)ple  examples  of   how  to  use  the  Internet  to   radically  improve  marke)ng   performance  

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2008 Porsche  Turbo  Cabriolet     New  Product  Launch  

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The Product  Launch   A  stamped  ‘‘raw’’  metal  plate  was   delivered  to  exis)ng  Turbo  Cab  owners   to  coincide  with  the  press   announcement  of  the  new  product   launch   Ø  The  mailing  provided  personalized  log-­‐ in  creden)als  and  encouraged  visits  to   the  web  site  with:  ‘‘The  raw  Porsche   911  Turbo  Cabriolet  awaits  your  color   selec)on.’’   Ø  On  the  web  site,  the  customers  chose   their  favorite  color  and  ordered  a   personalized  Turbo  Cab  poster   Ø 

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The Product  Launch   The  design  of  the  campaign,  integrated   with  the  Internet  web  site,  enabled   end-­‐to-­‐end  tracking   Ø  There  were  2,700  unique  log-­‐ins  with   an  average  session  )me  of  almost  15   minutes,  and  5,670  posters  were   ordered   Ø  Interes)ngly,  there  was  also  a   significant  WOM  component,  with   nearly  500  send-­‐to-­‐a-­‐friend  invita)ons   Ø  The  campaign  overall  had  a  30  percent   response  rate,  and  38  percent  of  Turbo   Cab  buyers  during  this  period  received   the  mailer   Ø 

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The Product  Launch   The  response  rate  and  )me  on  site  is   truly  amazing  given  the  high  cost  of  the   product  -­‐  $130,000     Ø  Target  demographic:  busy  execu)ves,   lawyers,  and  doctors.     Ø  This    example  is  that  the  direct-­‐mail   marke)ng  was  designed  for   measurement  and  was  integrated  with   the  Web,  enabling  the  capture  of   customer  response  data  and   iden)fying  poten)al  leads     Ø 

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Customiza)on and  marke)ng   intelligence  can  have  a  significant  and   measurable  performance  impact  for   both  small  and  large  firms  

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DuPont Tyvek  HomeWrap     &   NASCAR  

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DuPont Tyvek  HomeWrap   DuPont  Tyvek  is  a  well  known  US   brand   Ø  The  product  is  successful  because  of   the  innova)ve  proper)es  of  the   product  and  the  marke)ng  strategy   that  DuPont  used   Ø  Tyvek  has  a  unique  property  that  keep   liquid  water  from  passing  through   making  it  extremely  durable   Ø  Tyvek  is  used  in  packaging,  protec)ve   apparel,  envelopes,  covers,  graphics   and  home  construc)on   Ø  It  is  extremely  useful  in  the   construc)on  industry  where  it  is   wrapped  around  the  building  frame  to   keep  mold  and  mildew  out  while   protec)ng  homes  &  buildings  from   water  damage   Ø 

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The Challenge   Marke)ng  Intelligence  and  marke)ng   metrics  start  with  the  principle  of   keeping  score  for  all  major  marke)ng   ac)vi)es   Ø  This  is  challenging,  since  the   adver)sing  is  designed  to  brand  Tyvek   by  crea)ng  awareness  for  the  product   and  an  emo)onal  atachment  that  your   home  is  safe  with  Tyvek   Ø  In  addi)on  to  the  print  marke)ng,   DuPont  used  the  sponsorship  of  Jeff   Gordon  in  NASCAR.   Ø 

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NASCAR NASCAR  is  an  extremely  popular  sport   in  the  United  States   Ø  It’s  also  very  interes)ng  from  the   marke)ng  perspec)ve   Ø  It  is  the  #1  in-­‐person  atended  spor)ng   event  and  the  #3  most  watched  sport   in  the  United  States   Ø  Almost  80  million  people  regularly   watch  NASCAR   Ø  Combined  with  F1,  auto  racing  is  the   #1  live  event  in  the  world  today   Ø 

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Jeff Gordon   Ø  Ø 

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DuPont also  sponsors  Jeff  Gordon   Has  won  the  NASCAR   Championship  4  )mes   ESPN  rates  him  the  8th  most   recognized  sports  figure  in  the   United  States  

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Car Branding  

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Ac)va)on Campaign   Campaign  included  pain)ng  Jeff   Gordon’s  car  with  a  Tyvek  “TV  panel”   on  the  back  for  a  race  in  Kansas  &  TV   adver)sing  blanketed  the  Kansas  area   during  the  race  to  build  customer   awareness   Ø  Primary  focus  of  the  campaign  was  on   three  groups:   –  Retailers   –  Builders   –  Specialists  in  Construc)on   Ø 

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The Poster  Sent  to  Distributors  

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The Offer   The  offer  was  for  an  ‘‘ul)mate  race   weekend’’  luxury  box  for  the  race  and   opportunity  to  actually  meet  Jeff   Gordon   Ø  Awards  went  to   –  top  24  retailers  across  the  country   who  sold  the  most  DuPont   products   –  top  24  builders  who  bought  the   most  DuPont  products   –  top  24  specialists  who  signed  up   the  most  new  and  exis)ng  retailers   Ø 

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The Results   Ø  438  retailers  signed  on  

– 202 new  and  236  exis)ng   – 186%  sales  increase  during  the   promo)onal  period  

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The Weakness  of  the  Measurement   Ø A  weakness  of  the  marke)ng  

Ø Tyvek logo  that  is  visible  on  

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measurement was  that  the   impact  of  the  brand  and   awareness  component  of  the   marke)ng  was  not  captured   par)cularly  well  

all new  construc)on  that   uses  the  Home  Wrap  product   Ø The  following  was  posted  on   the  www.NASCAR.com  blog:  


My favorite  NASCAR  memory  includes   our  favorite  driver,  Jeff  Gordon,  and  my   son,  Logan.  When  Logan  was  two,  we   would  drive  by  new  housing   developments  and  he  would  tell  us   which  houses  were  Jeff  Gordon’s.    

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We didn’t  put  it  together  for  a  couple  of   months,  but  every  )me  we  would  walk   by  or  drive  by  a  new  housing   development  Jeff  Gordon  almost  always   had  a  house  there.    

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Finally, we  realized  our  two-­‐year-­‐old   was  matching  the  DuPont  Logo  from  Jeff   Gordon’s  racecar  with  the  DuPont   House  Wrap  logo  (Tyvek)  on  the  new   homes.  Kudos  to  DuPont  for  its  brand.  

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The takeaway  is  that  the  Tyvek  Home   Wrap  campaign  primary  objec)ves  were   designed  to  be  measured;  DuPont   marke)ng  was  keeping  score,  and  the   pre-­‐post  change  in  number  of  pallets   shipped  jus)fied  future  marke)ng   investments.   HTTP://EMAGINE-GROUP.COM

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The Difference  Between  Leaders  &   Followers  

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If you  ask  CMOs  how  they  spend  their   budget,  you  most  onen  hear  the   percentage  spent  on  TV,  print,  Internet,   direct  mail,  telemarke)ng,  and  so  on.  

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But this  breakdown  is  not  par)cularly   useful,  since  it  does  not  tell  us  what   these  organiza)ons  actually  do  with   their  money.  

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What is  the  intended  outcome  of  the   marke)ng?  

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We want  to  know  what  marke)ng   investments  are  actually  intended  to  do   or  achieve?  

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We define  5  buckets  of  funding  based  on   achieving  different  goals  and  objec)ves  –   such  as  demand  genera)on,  branding/ awareness,  customer  rela)onships,  shaping   markets  and  infrastructure.  

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The 5  Buckets  in  Detail   Ø 

Ø 

Ø 

Demand Genera:on  –  marke)ng  ac)vi)es  to  drive  revenues   in  a  rela)vely  short  )me  period  aner  the  campaign   –  Sales,  coupons  and  events   Branding  &  Awareness  –  marke)ng  ac)vi)es  drive  awareness   and  can  include  sponsorships,  naming  rights  to  events  or   proper)es,  and  adver)sing  specifically  for  awareness,  not   promo)ng  an  upcoming  sale   Customer  Rela:onships  –  marke)ng  focuses  on  crea)ng  a   personal  link  to  the  customer  that  drives  loyalty  and   engagement   –  Thank  you  notes  aner  purchase  and  loyalty  programs  such   as  concierge  shopping  services  

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The 5  Buckets  in  Detail   Ø 

Ø 

Shaping Markets  –  ac)vi)es  designed  to  make  the  market   more  recep)ve  to  your  products  or  services,  through  3rd  party   recommenda)ons   –  Analyst  rela)onships  for  B2B  firms  and  social  media   blogging  to  influence  percep)on   Infrastructure  –  investments  into  technology  and  training  to   support  the  marke)ng  team   –  Enterprise  Data  Warehousing  (EDW),  analy)cs  and   marke)ng  resource  management  sonware  to  support   marke)ng  intelligence  func)ons  

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How Do  Marketers  Allocate  Budget?  

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The Difference  –  Leaders  &  Followers  

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The Difference  –  Leaders  &  Followers  

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What Do  We  Know?   Ø  Ø  Ø 

Ø 

Ø 

Ø 

The Marke)ng  Divide  Is  Real!   There  is  a  Significant  Difference  Between  Leaders  &  Followers   Leaders  spend  less  on  demand  genera)on  marke)ng  and   more  on  branding,  customer  rela)onships,  and  infrastructure   to  support  marke)ng  intelligence   Leaders  have  processes  in  place  to  op)mize  marke)ng   management  –  it’s  not  done  ad  hoc   Leaders  have  significantly  beter  sales  growth  and  financial   performance  compared  with  the  followers   And  no  surprise,  key  marke)ng  processes  of  leaders  include   metrics  to  keep  score  and  marke)ng  intelligence  

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Using Metrics  to  Deal  With  Hard   Economic  Times  

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When the  economy  gets  tough,  senior   management’s  reac)on  is  to   aggressively  cut  costs  –  but  they  use  a   hatchet  instead  of  a  scalpel  –  causing   significant  impact  on  both  short  and   long-­‐term  performance  

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Marke)ng may  seem  like  an  easy  cost-­‐ cuxng  target  due  to  the  difficulty  with   which  its  returns  are  quan)fied  –  but   when  you  understand  the  link  between   investment  into  marke)ng  and   performance  during  and  following  a   recession.   HTTP://EMAGINE-GROUP.COM

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In a  study  covering  16  different  industries   from  1980  –  1985,  results  showed  that  firms   that  maintained  or  raised  their  adver)sing   expenditures  during  the  1981  –  1982   recession  averaged  significantly  higher  sales   growth  during  the  recession  and  the  three   years  aner.  

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By 1985,  sales  of  companies  that  took  an   aggressive  adver)sing  approach  during   the  recession  had  risen  by  256%  over   those  who  lowered  or  failed  to  maintain   their  adver)sing  spending  

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In the  2001  technology  industry   recession,  Intel  invested  $2  billion  in   new  chip  manufacturing  facili)es  and   aggressively  marketed  new  dual-­‐core   technology  in  order  to  grab  market   share  from  compe)tor  AMD  

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In 2008,  three  years  into  a  recession  in   construc)on,  Johnson  Controls  rolled  out  a   new  ad  campaign  con)nuing  its  ‘‘Ingenuity   Welcome’’  effort.  The  campaign,  which   included  significant  print  and  online   adver)sing,  demonstrates  Johnson  Controls’   efforts  to  build  energy-­‐efficient  environments   for  customers.    

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The First  Step  –  Defining  the  Marke:ng   Intelligence  Strategy  

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The Framework  

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Know Yourself  –    

Figure out  which  data  are  important   using  the  80/20  rule:  ask  what  is  the  20   percent  of  data  that  will  give  80  percent   of  the  value?  

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Know Your  Customers  –    

Fine-­‐grained segmenta)on,  which  then   leads  ul)mately  to  customer  targe)ng   and  data-­‐driven  marke)ng  ac)vi)es.  

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The Closing  

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In 1974,  bar  code  scanners  were   introduced  in  retail,  and  for  the  first   )me  this  enabled  the  tracking  of   individual  consumer  product  purchases   at  the  point  of  sale  

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This technological  innova)on  spawned   ‘‘marke)ng  science,’’  the  idea  that   marketers  could  quan)fy  marke)ng   using  analy)c  principles  

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Today, the  Internet  and  cell  phone   networks  are  enabling  the  next  leap  in   data  collec)on  of  customer  interac)ons   with  marke)ng  

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Now is  the  best  and  most   exci)ng  )me  to  be  in  marke)ng  

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The new  data-­‐driven  approaches  and   infrastructure  to  collect  customer  data   are  truly  changing  the  marke)ng  game,   and  there  is  incredible  opportunity  for   those  who  can  act  upon  the  new  insights   the  data  provides  

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Introduction to Marketing Intelligence - Part I  

Lecture 1 in the Marketing Intelligence Course

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