Marketing Analytics Presentation 11 - 16

Translating and Interpreting Marketing
Analytics
Identifying And Utilizing High Quality Data To Drive

Business Decisions
Marketing Planning & Analysis 2010 Summit

November 16th, 2010
David Weinberger
Mather Strategy and Marketing

mather:
43 Woodstock Street
Historic Roswell District
Roswell, GA 30075
www.matherstrategyandmarketing.com
How Are You Translating and Interpreting
Marketing Analytics?
Analytics
Page 2
Agenda
Translating and Interpreting Marketing Analytics
High Value/High Impact

V
 Focus on Reoccurring Marketing Processes
 Ensure “Marketing Analytics” Drive Business

Performance, Metrics and Scorecards
 Continuously Test to Optimize Marketing Execution
Page 3
The Role Of Marketing
Marketing Return
Brand Planning
on investment
New Product
Channel
Development
Development
Role of
Marketing
Strategic Revenue
Planning Management
Customer
Analytics &
Relationship
Insights
Management
 Customer, Consumer,
Shopper, Market Insights
 Application Of Insights
 Marketing Investment ROI
 Acquisition, Retention, Up-
Sell, Cross Sell
 Consumer/Market Trends Page 4

1 2 3
Identify Recurring Ensure “Marketing

Continuously Test to
Analytics” Drive
Marketing Business Metrics
Optimize Marketing
Processes Execution
and Scorecards
- Strategic Planning
- New Product
Development Repeatable Processes:
- Channel Selection
• Increase Productivity
- Marketing Investment • Ensure Consistent
Decisions (ROMI) Decision Making
- Brand Planning • Increase
Entrepreneurship
- Revenue Management • Focus On Value-Added
- Customer Relationship Initiatives
Management
Page 5
High Value/High Value
V
1 Identify Reoccurring Marketing Processes
Marketing Processes Selection Criteria
- Strategic Planning
- Identify Organic/Inorganic
- New Product Growth Opportunities
Development
- Channel Selection - Increase Conversion
- Marketing Investment
Decisions (ROMI)
- Optimize Sales and Profits 
- Brand Planning - Increase Consideration, Purchase, and Equity
- Customer Relationship
Management
- Increase Customer Lifetime Value
(Acquisition and Retention) 
- Revenue Management - Increase Profitability 
Page 6
V
Marketing Investment Decisions 
Key Questions to Ask About Your Marketing Investments
How Much Are You  How are you allocating Marketing spending?
 Which customers are you targeting?
Spending ?
 Which Channels generate the highest ROI?
 How does marketing drive revenues and profit?

 What is the ROI for marketing overall and by tactic?
What Is Your ROI?  Where are the opportunities to improve Marketing spend?
 How can the marketing budget be optimized ?

 What is the optimal allocation of the marketing budget by
How Can You Improve
brand, channel and market?
Marketing Spending?  What is the impact of TV versus non-traditional marketing
tactics, such as internet and social media?
Page 7
V
Media Response Curve - Example
National
TV
Radio
Revenue
Spot TV
Media Spend
8
V
5
Marketing Activity Lift – Example
4
-1
-2
-3
National Radio Direct Coupons Spot TV Hispanic Price Sports
TV Mail Reduction
Page 9
1 V
Identify Reoccurring Marketing Processes
Return on Investment - Example
Revenue Return on
Cost
Increase Investment
National TV 3.4 25 13.6
Radio 4.2 23 18.3
Direct Mail 2.3 24 9.6
Coupons 2.3 23 10.0
Spot TV 1.7 22 7.7
Hispanic 3.2 12 26.7

Price
Reduction -2.4 10 -24.0
Sports -1.9 10 -19.0

Page 10
1 V
Use Scenario Modeling to Improve Marketing Spend Effectiveness - Example
Current Proposed
Budget Return on Budget Return on

$ Cost $ Cost
Allocation Investment Allocation Investment
National TV 10% 25 13.6

XX XX XX
Radio 5% 23 18.3
XX XX XX
Direct Mail 15% 24 9.6
XX XX XX
Coupons 10% 23 10.0
XX XX XX
Spot TV 20% 22 7.7
XX XX XX
Hispanic 5% 12 26.7
XX XX XX
Price 25% 10 -24.0 XX XX XX
Reduction
Sports 10% 10 -19.0 XX XX XX

Page 11
V

Marketing Investment Vs ROI - Example
High
Increase Spending. Ensure you are
Test different Medium, spending optimally on
Targets, and Messaging the “decay curve”.
Options Modify spending levels
to maximize ROI
ROI
Reduce Spending. Reduce spending.

Assess Target, Medium, Revaluate target,
and Message medium and message
Low
$0.00
Low $0.00 High
Marketing $ Investment
12
11 V
Marketing Spend Effectiveness Scorecard
Key Metrics
- Marketing Tactic ROI
- Volume Trends Versus Objectives
- % Customers Acquired
- % Increase In Revenue
Page 13
11 V
• Marketing Mix Simulation

Annual
• Media Planning Optimization
• Advertising Decay Curves

• Impact of Marketing Tactics Bi-Annual
• Impact of Marketing Tactics by Segment, Geography
• Marketing Tactic ROI

• Volume Trends Versus Objectives
Monthly
• % Customers Acquired
• % Increase In Revenue
Page 14
1 2 3
Ensure “Marketing
Identify Recurring Continuously Test to
Analytics” Drive Business
Marketing Optimize Marketing
Performance, Metrics and
Processes Execution
Scorecards
- All functional groups are

- Strategic Planning measured on the same
“Customer” and
- New Product “Business” metrics
Development
- Channel Selection - Marketing activities are
quantified based on
- Marketing Investment Business metrics
Decisions (ROMI)
- Marketing focused on
- Brand Planning creating profitable
growth:
- Revenue Management - Customer acquisition
- Customer retention
- Customer Relationship - New usage occasions
- New segments
Management
Page 15
2
Ensure “Marketing Analytics” Drive Business
Customer Relationship Management – CLV Analysis 
CLV analysis (Present value of a customer’s total contribution to your cash flow) identifies
key strategic opportunities to grow revenues and profits
• Key Questions
• What type of customers should we acquire? What incentives should we use?
• What Marketing activities to increase profitability?
• What is the likelihood a specific customer will churn?
• How is a customer’s value affected by various Marketing activities or targeted
incentives? What will happen to my bottom line if those attributes change by
10%?
• How do we operationalize CLV to impact retention and drive increased customer
satisfaction through targeted customer experiences?
Page 16
2

Allocate acquisition and retention resources to optimize Marketing dollars
CLV = [(ARPU – CCU)*(Expected Lifetime)] PV - CPGA

100%
90%
Likelihood of Survival:
New Customer
80%
70%
60% Expected Lifetime

50% (Area Under Curve)
40%
30%
20%
10%
0%
60
0
0
12
18
24
30
36
42
48
54
60
66
72
ARPU – Average revenue per user
CCU = cash cost per user
Page 17
2

Customer, Purchase, Market, Demographic and other Qualitative metrics are used to
construct the CLV model
Historical Data
Database
Call / IVR Reporting
• Customer/Subscriber
• Handset
• Market Operations Reporting
• Demographics
• Credits/Fees
Marketing Reports
Database
CLV Reports
Monthly Increments
Page 18
2
 LTV Model Development Process
– Construct a customer service history
• Start date
• Usage statistics (e.g., MOU, service plan, IVR minutes)
• Service changes
• End date
– Attach indicators to the service history

• Demographics (e.g., income, age, gender, market, language)
• Industry-specific metrics (e.g., handset data, technology features)
• Organization-specific metrics (e.g., payment methods, fees, credits)
– Develop a survival (retention) model

– Calculate a “best fit” (regression) model correlating the customer variables
to survival rates.
– Calculate the CLV using the survival rates
How the model is built – and implemented – is crucial to making CLV

scores actionable
Page 19
2
Key Drivers of Customer Lifetime Value
Effect
Attribute Baseline Change
CLV CPGA ARPU CCU
Customer Type New Existing    
May    
Acquisition Month April
February    
Handset Age 12 mths Increase    
Income Tier 4 Increase    
Age 43 Increase/Decrease    
Average MOU 1,486 Increase    
Average IVR 12 Increase    
Gender F M    
ODP (Handset Revenue) $100 Increase    
Monthly Contract Price $45 Increase    
Monthly Fee Revenue $10 Increase    
Page 20
2 Ensure “Marketing Analytics” Drive Business
Develop strategies for Customer selection, Customer segmentation, Resource allocation,
Customer Acquisition Priorities, and Cross Selling Priorities
Nurture Maintain
Probability
Of Staying
High
1) Up Sell and 1) High end
Cross Sell services
Retain
1) Assess
1) Retention
customer
campaigns
value, ensure
Low good
2) Customized
offers
collection
CLV
Low High
Page 21
2 Ensure “Marketing Analytics” Drive Business

Include CLV metrics in cross functional scorecards
Scenario 1
• Determine Leverage Points Example: Investment Simulation
– Level of investment? Spending Change

Scenario 1 Scenario 2 Scenario 3
– Product Focus Television

Radio
Scenario 2
+30%
+30%
No change
+30%
-30%
-30%
– Type of message (brand vs. product

Newspaper +30% +30% N/A
Magazine NA N/A N/A
Out of Home +30% N/A N/A
Example: Investment Simulation
message) Direct Mail
Logos
+30%
+30%
N/A
+30%
N/A
N/A
– Marketing Mix (TV, Outdoor, Events)

Trade -30% Spending Change
-30% -30%
Events -30% -30%
Scenario 1 N/A
Scenario 2 Scenario 3
Special Promotions Television+30% -30%
+30% -30%
No change -30%
– Segment Mix (Targets, Geographies) Public Relations

Sponsorships (Sports)
Radio
Newspaper
+30%
Scenario 3
+30% -30%
+30%
+30%
+30%
-30%
+30%
N/A
+30%
-30%
N/A
Results Magazine XX XX
NA XX
N/A N/A
Out of Home +30% N/A N/A
Example: Investment Simulation
Direct Mail +30% N/A N/A
• Generate Strategic Alternatives

Logos +30% +30% N/A
© 2005 Zyman Company, Inc. All rights reserved 25
Trade -30% -30% Spending Change
-30%
Events -30% -30%
Scenario 1 N/A
Scenario 2 Scenario 3
Special Promotions +30%
Television -30%+30% -30%
No change -30%
Public Relations Radio +30% +30%+30% -30%+30% -30%
Sponsorships (Sports) +30%
Newspaper -30%+30% N/A +30% N/A
Results Magazine
XX XX NA XX N/A N/A
• Model and compare alternatives Out of Home

Direct Mail
+30%
+30%
N/A
N/A
N/A
N/A
– High
Logos +30% +30% N/A
Trade -30% -30% -30%
Events -30% -30% N/A
– Medium Special Promotions

Public Relations
+30%
+30%
-30%
+30%
-30%
-30%
– Low
Sponsorships (Sports) +30% -30% N/A
Results XX XX XX
Page 22
1 2 3
Ensure “Marketing
Processes Execution
Scorecards

measured on the same - Optimizes Marketing
- Strategic Planning execution
“Customer” and
Development - Increases Marketing
ROI
quantified based on - Facilitates “Best
Organizational
Decisions (ROMI)
- Marketing focused on Thinking”
growth: - Enables Marketing
- Revenue Management - Customer acquisition to quickly react to
- Customer retention new Trends,
Customers, and
- New segments
Management Segments
Page 23
3 Continuously Test to Optimize Marketing Execution
Revenue Management – Value Based Pricing 
Strategic Pricing – Four Elements of Marketing
Product Print content, Web site content, Design
Promotion Advertising, Brand development, Sales
Distribution Delivery, Customer service
Pricing Acquisition offers & renewal prices
• Use Pricing to capture value created by your brand/company. Failing to

integrate pricing with your overall strategy and other value-creating
activities leads to lost revenue
Sources: The Strategy and Tactics of Pricing by Tom Nagle and Reed Holden; Mather Economics LLC analysis
Page 24

 Cost-plus pricing
– Historically, the most common method used by companies
– Price is determined as a set mark-up over a cost basis that often includes
allocated overhead and direct operating costs
– A biased cost basis can lead to unprofitable pricing decisions!
 Customer-driven pricing
– Focused on what customers indicate they are willing to pay
– Prices adjusted to meet sales objectives
– Often leads to less profitable pricing
 Competition-driven pricing
– Matching competition’s prices
– Not as common in Newspaper industry
• Value-based pricing is focused on the value customers place on the product.

Different customers value your products and services differently.
Page 25

Strategic Pricing Framework: Focus On Charging for the Value of the Product/ Service
Costs Customers Competitors
High quality local

Strategic TV coverage;
Objectives online audience
growth; total market
Goals coverage
25% customer
churn; 65% market
penetration; 10%
revenue growth Tactics Targeted acquisition
offers; Start source
allocation; renewal
price optimization
(Market Based
Pricing)
Page 26

Use Test and Control groups to identify the impact of different Marketing Tactics to
retain customers.
Indicators of Elasticity Price Increases vs Stop Rate

2.0%
Small Price
Increase, High
Lower Income
1.8% Stop Rate (Highly
Elastic)
 Elasticity varies by customer 1.6%

– Tenure
Higher Income
– Service frequency 1.4% Medium Income
Stop Rate
– Pricing history Higher Income
– Payment method 1.2%

– Income Medium Income
– Age 1.0%
Large Price
0.8% Increase, Low Stop
Rate
(Highly Inealstic)
0.6%
0% 2% 4% 6% 8% 10% 12% 14%
% Price Increase
Page 27
The Role Of Marketing
Marketing Return
Brand Planning
on investment
New Product
Channel
Development
Development
Role of
Marketing
Strategic Revenue
Planning Management
Customer
Analytics &
Relationship
Insights
Management
 Customer, Consumer,
Shopper, Market Insights
 Application Of Insights
 Marketing Investment ROI
 Acquisition, Retention, Up-
Sell, Cross Sell
 Consumer/Market Trends Page 28

1 2 3
Ensure “Marketing
Processes Execution
Scorecards

- Strategic Planning - Optimizes Marketing
measured on the same
“Customer” and execution
Development - Increases Marketing
ROI
quantified based on - Facilitates “Best
Organizational
Decisions (ROMI)
- Marketing focused on Thinking”
growth: - Enables Marketing
- Revenue Management - Customer acquisition to quickly react to
- Customer retention new Trends,
Customers, and
- New segments
Management Segments
Page 29
Outline of Facilitated Process To Develop Marketing
Analytics Road Map
Day One Morning

 Identify Core Marketing Metrics - 1 hour session
– Aligned with Corporate objectives
– Identify available data
– Determine interdependencies
– Prioritize metrics to be used
 Determine Key Marketing Processes - 2 hour session

– Develop fish and bone diagrams
– Identify data and process interdependencies
– Identify data and process voids
– Prioritize based on Revenue and ROI opportunities
Day One Afternoon
 Identify Analytics Based on - 4 hour session

Prioritized Marketing Processes (Top 3 -5)
• Identify Exception Reports and Scorecards
• Identify top five reoccurring analyses across functional groups
• Identify advanced analytical needs
Page 30
Analytics Road Map
Day Two Morning

Team Breakout Sessions For Top 3 -5
Marketing Processes - 4 Hour Session
– Identify Exception Reports and Scorecards
– Identify top five reoccurring analyses used across functional group
– Create specifications for advanced analytics
– Develop fish and bone diagrams
– Identify data and process dependencies
– Identify data and process voids
– Prioritize based on Revenue Opportunity and ROI
Day Two Afternoon - 4 Hour Session

Team Report Outs
– Review fish and bone process

– Agree on metrics and data needs
– Prioritize Analytics development
Page 31
Analytics Road Map
Output From Facilitated Process
1. Road Map With Key Marketing Processes Identified

2. Prioritized Marketing Processes And Analytics Identified
3. Alignment On Metrics For Key Scorecards, Exception Reports,
Reoccurring Analyses, And Advanced Analytics
4. Data Dependencies, Voids And Interrelationships Identified
Page 32
Who Are We?
Strategic Marketing And Applied Analytics Consulting Group
 Our Approach: Customer-focused, data and insights-driven

with a bias towards adding value to the business
 Our Focus: Developing business and marketing strategies and
tactics to maximize customer acquisition and Customer
Lifetime Value
 Our Consultants: A mix of PhD’s, marketers and strategic
consultants from world-class companies
 Our Essence: Making sense of complex data through
advanced analytics and technology to support key business
decisions
33
What Makes Us Different?
 Proven and established advanced analytics capabilities to

draw insights from large quantities of data
 Experts at data capture, integration and visualization
 Experts at solution delivery in the enterprise space and
cutting edge technologies
 Deep understanding of how customer insights drive business
decisions
 Mix of marketers, consultants and PhD’s
We excel at uncovering growth opportunities from large and

complex data sets -- We are problem solvers!
34
Our Core Capabilities
Customer Driven Marketing Strategy &

Data Analytics Technology
Growth Strategy Capabilities
 Portfolio strategy  Customer and channel
segmentation  Social media
 Customer driven  Value proposition
and brand  Marketing spend tracking &
strategic planning effectiveness
architecture engagement
 Customer centric  Customer Lifetime methods &
organizational development
Value technologies
alignment  Marketing
capabilities  Promotion analytics  Technology
 Customer path-to-  Customer Acquisition requirements &
purchase strategy development
and Retention planning
and touch point
optimization  E-mail/On-line/ Search  Data capture,
optimization storing, analytics &
 Pricing analytics visualization
 Cross-sell/up-sell technologies
opportunities  Marketing analytics
 Customer “Path-to- road map and
purchase” analysis execution
 Test & learn protocol 35
Copyright 2009 Mather LLC. All rights reserved.
Contact Information
David Weinberger
770-649-0472
david@mathereconomics.com
mather:
43 Woodstock Street
Historic Roswell District
Roswell, GA 30075
770-993-4111 main
www.mathereconomics.com
Page 36

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Translating and Interpreting Marketing

Identifying And Utilizing High Quality Data To Drive

Marketing Planning & Analysis 2010 Summit

Mather Strategy and Marketing

Translating and Interpreting Marketing Analytics

High Value/High Impact

 Ensure “Marketing Analytics” Drive Business

 Continuously Test to Optimize Marketing Execution

 Consumer/Market Trends Page 4

Identify Recurring Ensure “Marketing

Marketing Processes Selection Criteria

- Channel Selection - Increase Conversion

 How does marketing drive revenues and profit?

 How can the marketing budget be optimized ?

National TV 3.4 25 13.6

Radio 4.2 23 18.3

Direct Mail 2.3 24 9.6

Coupons 2.3 23 10.0

Spot TV 1.7 22 7.7

Hispanic 3.2 12 26.7

Sports -1.9 10 -19.0

Budget Return on Budget Return on

National TV 10% 25 13.6

Sports 10% 10 -19.0 XX XX XX

Marketing Investment Decisions 

Reduce Spending. Reduce spending.

Marketing Investment Decisions 

• Marketing Mix Simulation

• Advertising Decay Curves

• Marketing Tactic ROI

- All functional groups are

Customer Relationship Management – CLV Analysis 

Customer Relationship Management – CLV Analysis 

CLV = [(ARPU – CCU)*(Expected Lifetime)] PV - CPGA

60% Expected Lifetime

Customer Relationship Management – CLV Analysis 

– Attach indicators to the service history

– Develop a survival (retention) model

How the model is built – and implemented – is crucial to making CLV

Customer Relationship Management – CLV Analysis 

• Determine Leverage Points Example: Investment Simulation

– Level of investment? Spending Change

– Product Focus Television

– Type of message (brand vs. product

– Marketing Mix (TV, Outdoor, Events)

– Segment Mix (Targets, Geographies) Public Relations

• Generate Strategic Alternatives

• Model and compare alternatives Out of Home

– Medium Special Promotions

© 2005 Zyman Company, Inc. All rights reserved 25

- All functional groups are

Revenue Management – Value Based Pricing 

Strategic Pricing – Four Elements of Marketing

Product Print content, Web site content, Design

Promotion Advertising, Brand development, Sales

Distribution Delivery, Customer service

Pricing Acquisition offers & renewal prices

• Use Pricing to capture value created by your brand/company. Failing to

Revenue Management – Value Based Pricing 

• Value-based pricing is focused on the value customers place on the product.

Revenue Management – Value Based Pricing 

Costs Customers Competitors