Mm ii-t-1-database mkt-l-1-2
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This document discusses database marketing and the importance of collecting and storing customer data. It covers what constitutes good data and why building a marketing database is beneficial. Some key points include: - A marketing database allows a company to better understand customers and target communications more effectively across multiple products and services. - Collecting the right data, integrating it from various sources, and making it accessible is important for success. Underestimating resources and lacking a clear use plan can lead to failure. - Major profit drivers include customer profiling, research, CRM strategies, lifetime value analysis, and acquisition/retention modeling that the database enables.
Mm ii-t-1-database mkt-l-1-2
- 2. What is data? It is not information It is not knowledge Data, by itself, is a fact, or multiple facts, or a set of values that is available in a structured manner. It is a kind of raw material WHAT DOES SUCH DATA MEAN?
- 3. Seen out of context, without interpretation and application of human mind it does not mean anything. It is just like a nugget, an object IT DOES NOT HAVE VALUE RELEVANCE, OR SIGNIFICANCE
- 4. With interpretation, or application of human intelligence it becomes—possibly– a source of useful information and therefore valuable to your business. WHEN HUMAN INTELLIGENCE IS APPLIED TO STUDYING DETAILS, INTERPRETING THEM AND IDENTIFYING PATTERNS THAT MAY BE USEFUL DATA BECOMES VALUABLE INFORMATION Therefore, collecting and storing data is pertinent only if is a part of a strategic plan.
- 5. DATABASES WHAT IS A DATABASE Database is a set of collection of such structured facts stored in physical files and managed by database management systems. (DBMS) It is collection of facts which is potentially useful to the organisation when studied in detail and interpreted for a purpose.
- 6. DATABASE contd/Organised collection of comprehensive data about individual customers or prospects including geographic, demographic,psychographic and behavioral data. It gives a 360-degree view of customers and how they behave A company is as good as its customers data base. In consumer marketing the customer database might contain customers’ a)demographics— age, income, family members, birthdays b)Psychographics– Activities, interests, opinion c) RFM of past purchases—recency , frequency and monetary value of past purchases
- 7. The DBMS is a system that handles the data so that you can access it in a variety of ways. DATABASE MARKETING IT IS A TYPE OF BUSINESS METHOD. A PROCESS WHEREBY DATABASE IS TURNED INTO A BUSINESS DECISION
- 8. WHY DATABASE MARKETING Why Database Marketing? Informational Reasons Availability of abundance data Permission to collect them Technological Reasons Technology to collect and warehouse data Technology and computing power available to analyze them
- 9. Availability of commercial software, some of which are even “user friendly” (e.g. XL miner, SAS enterprise miner) Commercial Reason Interest in generating intelligence to remain competitive main market share Drive to be efficient
- 10. DATABASE MARKETING-DEFINITION A More Inclusive Definition of Database Marketing Database marketing is a systematic approach to the gathering, consolidation, and processing of marketing databases to learn more about customers and competitors, select target markets, compare customers' value to the company, provide more specialized offerings, as well as make other marketing and strategic decisions.
- 11. Data Base MEMORY Other Data Customer Data Transactional Data Data Warehousing Data Base Data Analytic Tools/Software M A R K E T I N G D E C I S I O N
- 12. DATA QUALITY VALUE OF DATA. For data to be useful it must have certain characteristics to make it “good data” 1 ACCURACY A simple incorrect data entry is the most common form of data error 2 INTEGRITY Is the structure of data and relationship among entities and attributes maintained consistently? Eg “Qualifications: Graduate” used across the system or “Qualifications=Graduate” “qualifications graduate’ also used?
- 13. COMPLETENESS Is all the data complete? VALIDITY Does the data value within acceptable range of business? TIMELINESS Is the data available when required? ACCESSBILITY Is the data easily accessible, understandable and usable? It is very essential for the team in charge of data to understand the user of dat.
- 14. DATA MINING
- 15. In the past, there was never a high level of precision when it came to marketing your products Trying to compare traditional marketing strategies with data mining is like trying to compare a precision guided missile to blindly throwing darts at a board. There is no comparison. The advancement of artificial intelligence, neural networks, and computer algorithms has led to a world in which the technology is capable of learning. Because of this, it can look for relationships that my not be obvious to the user
- 16. Data mining is a technique that enables the company to discover connections, patterns, and relationships in a set of data with a high degree of accuracy and precision. It is not a business solution However, the patterns that are discovered by data mining tools are only relevant if they are directly related to solving a specific problem. Otherwise, any patterns that are discovered is useless. Also, you have to look at the coverage of your data mining tool.
- 17. Typical tasks addressed by data mining include: Rate customers by their propensity to respond to an offer Identify cross-sell opportunities Detect fraud and abuse in insurance and finance Estimate probability of an illness reoccurrence or hospital re-admission Isolate root causes of an outcome in clinical studies
- 18. Determine optimal sets of parameters for a production line operation Predict peak load of a network Without proper analytical tools, discovering useful knowledge hidden in huge volumes of raw data represents a formidable task. The exponential growth in data, diverse nature of data and analysis objectives, the complexity of analyzing mixed structured data and text are among the factors that turn knowledge discovery into a real challenge.
- 19. Data Mining provides tools for automated learning from historical data and developing models to predict outcomes of future situations. The best data mining software tools provide a variety of machine learning algorithms for modeling, such as Regression, Neural Network, Decision Tree, Bayesian Network, CHAID, Support Vector Machine, and Random Forest, to name a few. Yet, data mining requires far more than just machine learning. Data mining additionally involves data pre-processing, and results delivery. Data pre-processing includes loading and integrating data from various data sources, normalizing and cleansing data, and carrying out exploratory data analysis.
- 20. DATA WAREHOUSING
- 21. We build a marketing data warehouse for the main purpose of more efficiently and profitably servicing our customers and prospects today and in the future Example-- a publisher of several titles that also offers special online content such as webcasts or paid reports.. Without such a database a publisher would not know how to cross sell the various titles or online products or services most effectively. The fulfillment files for each would most likely be separate and distinct and not allow for an efficient usage of information for promotional decision purposes. And, even if all were fulfilled from the same source, the data would likely not be integrated at a customer level nor easily accessible for marketing.
- 22. Although a fulfillment file contains a wealth of information, its structure is rigid (built for fulfillment rather than marketing) and it lacks complete information about the customer and typically deals with only one product. Thus, alone it will not meet all of the needs to efficiently target communications to your customers or prospects across the company. What are the key points that must be taken into consideration to ensure success in the build of a marketing data warehouse. Why Build a Marketing Data Warehouse Top Reasons Why We Fail What Functional Areas it Must Support Key Profit Drivers Who Will be Using the Data Warehouse and what it must deliver What should be stored on the Data Warehouse How often should the Data Warehouse be updated Should the Database be Built In-house or Outsourced Quantifying Profit
- 23. Why Build a Marketing Database There are three key functions of a marketing database: To most efficiently maintain your data in an organized fashion To better support corporate functions To better support marketing functions All of which will allow you to better service your customer and hence maximize revenue The pinnacle is of course to be able to calculate and forecast customer lifetime value The foundation of the database build is the customer contact information. From this we accumulate historical purchase and promotional data called our marketing data.
- 24. REASONS FOR FALIURE The Major Reasons For Failiure Underestimating the time and resource commitment to build or maintain the database Not having the right support team in place once the database is delivered even if outsourced Not having a plan in place regarding how you will use the database once delivered and how you will quantify the benefits. Inappropriate in scope -- too broad or too narrow Not properly prioritizing deliverables – phased in approach Failure to shift the paradigm at the organization to a information-based decision approach
- 25. Thinking that if you build the database profits will come Failure to realize that your number one priority in the build is getting the data right. Failure to fully assess costs of “add ons” relative to total database costs versus their benefits. It is not any one reason that causes failure but a combination of the above.
- 26. KEY PROFIT DRIVERS --The major profit drivers can be --Demographic Profiling, --Mkt Research support --CRM Strategies --Lifetime Value analysis --Customer Acquisition Models --Retention Models --Strategic Corporate Reports Some functions can be performed just by virtue of having all of the data readily available and in one place, others require the application of quantitative sophistication to complete.
- 27. WHO WILL BE USING DATABASE Keep in mind that there are many individuals throughout the organization who will utilize a marketing database. However, typically many of these needs are related in one form or another. As such, you will want to involve all in the decision process of what the database should ultimately accomplish. Many individuals will need similar access to the database and what is has to offer. For example, all functional areas/individuals will want some form of “dashboards” or other reports. To ensure success and keep the cost of the database in check, you must understand the relationships between the individuals so that priorities can be properly set regarding deliverables and features. It is best to build in phases ---start out small and build on each success. Remember this is a marketing database. The primary focus must first be to meet marketing’s needs. Other divisions can then follow