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Precision Marketing
A unified approach to customer acquisition, analysis, targeting
and delivery of your brand family.
p
Where do you start?
• Don’t let your IT department stop you (Remember, I’m an IT guy)
• Don’t let ego’s hurt you
• Cross-department teams
• “Borderless” meetings
• What first: Circulation or Advertising
Words of wisdom: Start small, but start somewhere!
Circulation: Unified Strategy
Analysis Tools
Enhance Database
Demographics Geography Lifestyle/Lifestage PRIZM/COHORTS
Universe of Addresses
Telephone Numbers email addresses
Targeted and Integrated Campaigns
Track Results
Track Results
Plan your starting point.
#1 - Sustainability
#2 - Sustainability
#3 - Sustainability
Words of wisdom: Just because you can, doesn’t mean you should.
Plan your starting point.
• Define a course and stick to it
• Mistakes will be made
• Don’t assume you can do it all
• Don’t assume you can’t do it all (done right,
you can out ADVO ADVO)
Words of wisdom: Make this a more than a one person project.
The Circulation Database
• Basic
• Addresses for your primary ZIP Codes
• Subscriber/non-subscribers identified
• Phone numbers
• Better
• CDS Certified for entire market
• Subs/Non-subs, FOD, Original Start date, Start Source
• PRIZM (or similar)
Words of wisdom: CDS is critical, but if you have to you can start without it.
The Enhanced Database
• Enhanced Information
• Age
• Children Present
• Dwelling Type
• Language indication
• Delivery Zones
• Loyalty Definitions
• Postal Walk Sequences
• Home Age
• Home Owner/Renter
• Home Value
• Income
• Pool Owner
• Upscale Household
• etc…
Words of wisdom: “He who has the best list wins!”
Analysis Tools
• Basic Tools
• Crystal Reports
• SQL Server (or similar) Data Warehouse
• R-Logic
• Enhanced Tools
• Microsoft Analytical Services (cube’s)
• MaaX
• Maax CHAID
• SPSS/Modeling
Words of wisdom: Don’t buy what you’re not ready to use. The “right” tool in the “wrong” hands does nothing.
Make some friends
• Postal Service
• Rules
• Addresses
• Speed to the mail slot
• List Providers
• Buy/Rent lists (know the difference)
• Government agencies
• City/County
• Other Newspapers
• Been there, done that….
Words of wisdom: NETWORK!
Form a plan • Quick overview (circ acquisition) ---
• Where are my customers, where aren’t my customers?
• Concentration of potentials?
• Crewing vs. Direct Mail vs. Sampling
• Test vs. Control group (simple A/B design)
• Versions of mail piece? (tuned to geography)
• Creative approval
• Timing of mail drop (holidays, events)
• Oops, forgot ?????
Words of wisdom: Make friends at the Post Office
Execution of your plan
• Select Targets
• Simple vs. Advanced methods
• Track what is important
• Know what and how to track before you launch
• Stand alone effort vs. a linked effort
• Learn and adjust
Words of wisdom: Set aside time between projects to debrief and adjust.
Selection basics
• Simple • Non-Subscribers in selected ZIP Codes
• Advanced • Non-Subscribers in selected high advertising revenue ZIP Codes
who show higher indexes for subscribing/retaining, who have not participated in a previous campaign in the past 91 days, have household incomes > $100,000, own their own home, are likely to have school age children, have successfully had a telephone number reverse match within the past 60 days, are not on the national or internal do-not-call list, are not on the DMA do not mail list, have not been a subscriber in the past 30 days and have not had a prior subscription account balance written off in the past year…divide into 16 groups….
Words of wisdom: start slow but be mindful of contacts/year.
Advanced Campaign Design
• Rotation
• MaaX bands to control sequencing
• Telemarketing link – if possible
• Excel – for predictions/result reporting
• Microsoft SQL Server to hold onto groups
Think in terms of linking all events together. But don’t worry if you can’t link at first. Get experience.
Words of wisdom: Advanced tracking takes IT expertise and discipline.
Tracking basics
• Track what is identifiable and describable in terms of the segment’s needs and preferences.
• Track what can be measured, so that the segment’s size and demand potential can be measured.
• Decimal places. Be sure what you track is large enough to see.
• And accessible enough to be served at a profit.
Just because you can, doesn’t mean you should…
Words of wisdom: Track to learn not to stifle
Selection – Starting point
Selection – Managed process
Selection – Expen$ive
Campaign Delivery
• Carriers
• Direct Mail
• Telemarketing
• Crew/Kiosk
• Sampling/”Conversions”
• Single copy inserts
• In-paper offers
• subscribe.azcentral.com\p7g1
• Subscription invoices
Target Grouping Details (Group A)
Cable, Outdoor Groups Direct Mail, Crew
Scripting Telemarketing, Kiosk
Scripting
Campaign Tracking
• Excel
• Circulation System Standard reports
• MaaX
• R-Logic
• Telemarketing Workstation
Ultimately: Building CRM into the Circulation process
Tracking - Basic
1998 Direct Mail Campaign
Campaign Title Sunday Only Conversion
Offers: $ 1 - D/O (FOOT)
$ 2 - D/O (MOTOR)
Source Code: OF (Direct Mail); SL (Telemarketing)
Rate Code: 2M (DMail offer rates) / CM,2M, WD, M7 (foot routes); Q2 (daily by mail) (TM rates)
Quarter Reported 1st Quarter - 1998
Period Reported January-98
Date Campaign Dropped: 12/29/1997
Telemarketing Follow-up: Yes
Telemarketing Begins: 1/19/1998*
Direct Mail SplitsDescription
CIC Ref. Solicit Code
Split 1 Young families, age
35 and under 816 SOYGF398
Split 2 Young adult
couples, age 35 and
under 810 SOYSC392
Split 3 Adults age 35 - 64,
rural areas 814 SOORL393
Split 4 Adults age 35 - 64,
suburban areas 811 SOOSB421
Split 5 Adults age 35 - 64,
small town areas 815 SOOST422
Split 6
Control Group
(Random selection) 813 SOROL423
Telemarketing Splits
Description CIC Ref. Solicit Code Filename
Direct Marketing Costs:
Printing 4,326.21$
Postage -$
Mail Set-up 3,832.50$
Other -$
Total Cost 8,158.71$
Cost Per Order (Direct Mail) 15.34$
Orders 531.00
Revenue 9,180.99$
Profit 1,022.28$
Renewals (after 17 weeks) 245.00$
Profit 11,147.50$
Telemarketing Costs:
Phone costs -$
# Hours/Campaign -$
Commission -$
Base Payroll -$
Total Telemarketing Costs -$
Cost Per Order (Telemarketing) #DIV/0!
Total Cost per order #DIV/0!
Tracking - Fancy
Tracking – Over-kill?
Lifetime Value
Subscriber Profitability WorksheetFor 1,000 New Starts over 52-Weeks
Telemarketing Starts Telemarketing with Renewal Efforts
Assumptions: Assumptions:
7-Day Subscription Price $3.00 7-Day Subscription Price $3.00
Avg. Issue Newsprint/Ink $0.21 Avg. Issue Newsprint/Ink $0.21
Avg. Issue Carrier Comm 20% Avg. Issue Carrier Comm 20%
7-Day Newsprint/Ink $1.47 7-Day Newsprint/Ink $1.47
Weekly Carrier Commission $0.60 Weekly Carrier Commission $0.60
Net Contribution $0.93 Net Contribution $0.93
New Orders 1000 New Orders 1000
Cost per Order $8.00 Cost per Order $8.00
Total Cost New Orders $8,000 Total Cost New Orders $8,000
Non-Pay Ratio 20% Non-Pay Ratio 20%
Avg. Days for Non-Pays 21 Avg. Days for Non-Pays 21
Avg. Invoice Cost $0.45 Avg. Invoice Cost $0.45
Avg. Bills/Non-Pays 2 Avg. Bills/Non-Pays 2
Cost to Serve Non-Pays $1,422.00 Cost to Serve Non-Pays $1,902.00
13-Week Attrition Ratio 5% 13-Week Attrition Ratio 5%
Next Cycles Attrition Ratio 5% Next Cycles Attrition Ratio 5%
First Time Converstion Ratio 52% First Time Conversion Ratio 62%
Renewal Rate to Next Cycle 80% Renewal Rate to Next Cycle 85%
Renewal Marketing Expense $0.00 Renewal Marketing Expense $1.00
Telemarketing Starts/With Renewal Marketing
Revenue Year 1 Year 2 Year 3 Year 4 Year 5
Subscribers 1000 273 241 223 212
Annualized Retention Rate 29% 87% 90% 95% 95%
Subscribers/Year End 292 254 229 217 206
Cumulative Gross Profit $10,021 $11,665 $10,503 $9,984 $9,485
Subscriber Variance 75 91 98 107 107
Add'l New Order Costs $600 $730 $787 $852 $854
Real Cum. Gross Profit $10,621 $12,395 $11,290 $10,836 $10,339
Discount Rate 1 1.15 1.32 1.52 1.75
NPV Profit $10,621 $10,778 $8,537 $7,125 $5,911
Cumulative NPT Profit $10,621 $21,400 $29,937 $37,062 $42,973
Lifetime Value (NPV) $11 $21 $30 $37 $43
Retention Retention Curves
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total S
ubsc
riptio
ns W2
W4
W6
W8
W10
W12
W14
W16
W18
W20
W22
W24
W26
Intervals
Pe
rcen
t A
cti
ve
Carriers
Door Crew s
Not Applicable
Other Sales Source
In - Paper
District Managers
Telemarketing - In House
Voluntary
Subscription Retention: Volume
For starts in this range:
09/06/99 03/06/00
Sales Source Code
Description
Total
Subscriptions W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13
Carriers 127 126 125 124 117 115 114 109 106 105 102 101 100 98
Door Crews 287 265 248 234 224 203 188 182 178 177 171 169 168 166
Not Applicable 59 58 58 58 58 55 55 55 55 55 50 49 48 47
Other Sales Source 667 626 595 576 554 514 475 459 448 434 410 399 387 382
In - Paper 278 271 263 260 253 245 245 243 240 234 231 230 230 222
District Managers 57 55 53 53 51 51 51 51 51 49 48 47 47 46
Telemarketing - In House 1,052 974 920 879 782 751 723 709 696 679 663 648 642 609
Voluntary 2,083 2,026 1,986 1,969 1,932 1,880 1,862 1,850 1,827 1,810 1,773 1,759 1,749 1,705
Carriers 184 181 178 177 168 166 165 160 157 154 150 148 147 144
98.4% 96.7% 96.2% 91.3% 90.2% 89.7% 87.0% 85.3% 83.7% 81.5% 80.4% 79.9% 78.3%
Door Crews 954 891 843 810 778 717 663 641 626 611 581 568 555 548
93.4% 88.4% 84.9% 81.6% 75.2% 69.5% 67.2% 65.6% 64.0% 60.9% 59.5% 58.2% 57.4%
Other 337 329 321 318 311 300 300 298 295 289 281 279 278 269
97.6% 95.3% 94.4% 92.3% 89.0% 89.0% 88.4% 87.5% 85.8% 83.4% 82.8% 82.5% 79.8%
Total 4,610 4,401 4,248 4,153 3,971 3,814 3,713 3,658 3,601 3,543 3,448 3,402 3,371 3,275
95.5% 92.1% 90.1% 86.1% 82.7% 80.5% 79.3% 78.1% 76.9% 74.8% 73.8% 73.1% 71.0%
Defining Success
Words of wisdom: A 0% response rate is not the end of the world – but expensive lesson to avoid repeating through understanding.
Database Mistakes you will make
1. Thinking it is easy.
2. Finding all the addresses
3. Priority drift
4. Trusting your list vendor
5. Not knowing the postal rules
6. Thinking IT understands what you want
7. Thinking you understand your circulation system
8. Thinking you have the Schema right
9. Cost. (CDS, Server and Microsoft)
Direct Mail Mistakes you will make
1. The creative will be late.
2. The list will be in the wrong format and IT will be busy.
3. Typo’s: wrong name, phone numbers, wrong dates. READ every word.
4. The sticky labels won’t.
5. The inkjet label will smear.
6. The walk sequence printed will be backwards by the time the piece is bundled.
7. The wrong “optional endorsement” is used costing an extra 75c per return
8. You’ll need to deliver to a ZIP you haven’t CDS Certified.
9. You’ll find that the Postal Service doesn’t do CDS from Nov. to Jan.
10. The paper stock is under postal spec minimums – do over!
Direct Mail Mistakes you will make
1. The windows on the envelope are in the “wrong” spot.
2. The return envelop won’t fit in the special carrier envelope designed just for use in this mailing.
3. Your selection process had an “AND” instead of an “OR”.
4. You forgot to suppress subscribers.
5. You’ll send it out First-class mail.
6. The wrong version of the creative is used (15 different versions in play).
7. The Monday after the drop date is a holiday.
8. No one can find the CASS certificate.
9. The carrier envelope is too dark – the yellow looks good, but postal rules.
10. Didn’t order enough pieces to cover the 5%-10% waste factor.
The Silver Bullet
There isn’t one.
Words of wisdom: In the end everything will be alright…if it is not alright, it is not the end…
