Segmentation and buliding the database

The last week and a half we have been talking about putting the marketing database together. We take internal information, external information and modelled data and create a database that really works for marketing applications. Internal information is transaction oriented, typically and includes information about what the customber has purchased and when. But transaction information only tells part of the story. We might not even have the customer's name if the product was shipped to a different person than a purchaser (b2b) or not have information about the household if just one person in the house buys our product (b2c). We need to enhance the database to get value and we talked about buying data from an outside data source to supplement our internal data. Typically, we send our raw data files to an outside source and they do a merge/purge and cleanse our data and append to our data records. We can then begin the process of modelling our data to identify our best customers. We talked about RFM (Recency, Frequency and Monetary Value) as a way of segmentation but that the RFM approach is only a starting point. Marriott uses a CAP model which includes capacity and propensity to purchase. The different types of segmentation that are discussed in the book are a good starting point for data anlysis but more sophisticated companies eventually develop their own proprietary segementation schemes.

Database Marketing Gets Serious!

The students successfully completed the first assignment with descriptive statistics, cross tabs and chi squared analyes. They learned that categorical data puts data in groups (think cross tabs) and that metric or continuous data is more suited to other types of statistical analysis such as t-tests, correlation and regression. In marketing, we like variation and the null hypothesis is usually what we don't want to have happen, no difference in counts for the chi square, no difference in means for a t-test and no linear relationship for correlation and regression. We are looking for a p value of under .05 for significance level. We had fun looking at live data and used the President's approval rating as a dependent variable in a simple regression. There was a regression relationship (F stat is <.05), 83% of the variance (Adjusted R sqared) in approval rating is explained by ONE significant variable (p < .05), unemployment rate. Interpreting the regression, the President's approval rating drops by about 6.6% for every one percentage point increase in the unemployment rate. The class is working now on creating a model to predict performance in our IM classes. They are looking to create a parsimonious model, that means as few variables with the most explanatory power, to explain an particular hypothesis.

Database Marketing: A New Semester

I am going to blog here about database marketing and on our NING social network for Marketing Technology. We began with a simple exercise called PC's unlmited to familiarize or refamiliarize the class with descriptive statistics in SPSS, how to create a new variable, perform cross tabs and other basic tools. Smart students will go back to this handout throughout the course of the semester for looking up tasks like how to create deciles and quintiles, etc. Students were asked to recreate the information listed and then to provide a marketing interpretation of the graph or table. For example, if most of the company's customers are men does it mean the firm should focus on men as customers or branch out to serving more females? We then had a review of direct marekting and linked direct marketing to database marketing through the use of customer information. It is the database that underlies most direct marketing campaigns that allows DM practitioners to measure, adjust and re-launch their campaigns. Finally, we concluded the two week period with a brief statistics review, focusing on mean, standard deviation, correlation and other descriptive tools like histograms and bar charts. An important concept here is categorical versus continuous data. Categorical data cannot be used to calculate means but can be used in a cross tabs. With continuous data and two groups, a t-test can be conducted.

Some final thoughts on customer service and Internet Marketing

Today was the last day of class in Internet Marketing 370 at Northern Illinois. We said goodbye to our graduating seniors and three students recieved the certificate in Interactive Marketing. Good luck to them and to all those graduation this semester. It occurred to me that talking about customer service at the end of class as we did could either give the impression the topic was important or that it was not important enough to cover early in the semester. For the record, customber service can make or break an internet company, or any company seeking to use technology for better, differentiated, customer service. The Rogers and Peppers marketing model of IDIC (Identify, Differentiate, Interact and Customize/Personalize) is, I believe, replacing older persuasion models such as AIDA (Attention, Interest, Desire and Action). Older models are meant for the mass marketing world. In the interactive and direct marketing world, it is important to differentiate individual customers or groups of customers and treat different customers differently. Differentiation is meaningful for targeting and attracting the right customers but becomes critical with customer service. In class we looked at the British grocery chain Tesco's and how the company uses segmentation to send out multiple versions of its coupon offers depending upon customer needs in implementing the Tesco' loyalty program. Retention is important because of the cost of acquisition, the potential negative word-of-mouth from an unhappy customer and also because of long-term customer profitability. This discussion on customer service is a nice transition to database marketing next semester, where we will begin to see how databases can be used for targeted, segmented acquisition, service and retention. Stay tuned after a short break. Class begins again on January 12 for the Interactive Program at NIU's DeKalb campus. We will be teaching database marketing, marketing technology, IMC and direct marketing.

Getting a job in Interactive Marketing

Kelli Hanson talked about places to look for a job in interactive marketing. She and I strongly believe in networking through professional associations, such as CADM, BMA, AMA and CIMA. Joining the groups these organizations have on linkedin is usually free and an easy way to start getting involved. Since 80% of jobs are not posted or advertised, it is important to network as well as look on these job sites. Still, there are hundreds of jobs posted online in this field. It is up to the student seeking a job to figure out what type of job he or she wants and then to target that position and demonstrate his or her value to potential employers. Develop specialized skills that might be needed to get that job. There is no substitution for networking and hard work. Be prepared to send out at least 200 resumes and to be focused but also flexible.Dates to watch out for: February 18: Lynn Hazan, recruiter, 5pm, February 26, Okner Symposium, 9-4. Both events are required for 455 and 470 and will take place in Barsema Hall.

Legal and ethical issues in marketing

We learned this week that there are a number of laws that regulate internet and interactive marketing. I asked the students to consider a scenario where a company obtained a list of mobile phone numbers in its target market and whether the company could use the list for text messages or phone calls promoting its services. We identified a number of laws that related to this issue. CAN-SPAM, requires express prior permission before sending the message and applies not only to email but to text messages that reference a domain name (3122222455@wirelesscarrier.com) and consumers cannot be required to incur any costs for the authorization. The TCPA (Telephone Consumer Protection Act) also prohibits the use of automated equipment to place calls to a mobile number without prior consent. In addition, the Mobile Marketing Association as published Guidelines which do not have the force of law, but also suggest that the consumer should have prior notice and consent that the text message is coming. The Do-Not-Call List would also likely apply if the company chose to call these numbers. If the phone number were obtained from children under 13, the Children's Online Privacy Protection Act (COPPA) would apply. This simple scenario indicates that internet marketing law is complex and evolving. From an ethical point of view, both guidelines and laws point to the simple principle of permission. Getting permission is an easy way to know that dealings with the customer are both ethically and legally correct. In addition to protecting children, we also protect consumer healthcare (HIPPA) and financial (GLBA) information. However, there is no general right to privacy of personal data in the United States as is required by the European Union, for example. We also discussed copyright law and the fact that peer-to-peer sharing of music is illegal, even though facilitated by technology. We will have to see how the music industry evolves and adapts to these technology challenges.

Dreamweaver and web design

We looked at the Dreamweaver program over the past few sessions. Dreamweaver creates cleaner HTML code as opposed to word and has a number of other advanced features. The ability to create a separate Dreamweaver 'site' has the advantage of making sure everything needed for the web site is in one place: Cascading Style Sheets knowns as CSS (preformatting for your web page), photos, images and HTML pages. In lab, we recommend putting that site on the network drive and/or backing it up on a portable drive as well. I have been able to solve some problems with website displays by reminding students to put everything in their www folder that the web site needs, including CSS's and images. Also, make sure in Dreamweaver you just have the image name and not a specific location on the desktop or network drive, otherwise the image will not display. Remember to use tables and not frames for your web page for good web design. Enjoy your web site design!

The power of viral video

We have been having so much fun with our YouTube campaign that I have almost forgotten to blog about it. We really had some wonderful results for gimmepleez.com, our Professional Sales Program and the Interactive Program. I have included the results to find the four videos for our program below. Students found that facebook, particularly creating an event, was the most successful way to get the viral effect. We jumped to the first page on google when searching for the term Interactive Marketing and are currently number two. We could never have paid for that type of search ranking in PPC! Web site traffic is also up by over 75% and enrollment in our advanced classes is up over 30%. Great job everyone and a great lesson in viral marketing. We learned that a specific landing page or micro site would have made it easier to track campaign results and that tracking results of viral campaigns is in general a challenge, particularly unique views. Students got a chance to actually report on and analyze the analytics information provided in YouTube. Overall, we are pleased with our results, learned a lot and had some fun. Students said in their papers that the learning by doing experience of running a real campaign helped them understand what Interactive Marketing was all about and what they might do in their future careers.

Have a good Thanksgiving everyone. Check out our videos below.

http://www.youtube.com/results?search_query=interactive+marketing+niu&search_type=&aq=f

Website analytics

We looked today at website analytics. I showed my google adwords account and google analytics account as well as the insight section of my YouTube account and we looked at the types of information available and the types of insights that might be made from that information. We also looked at some of the recent trends in online advertising. Online ad spending is smaller than last year but growing overall. Sponsorship and mobile marketing are on the upswing and most results can be attributed to search and older media rather than social media and some of the new media....analytics are lagging changes in technology. Traditional ways of looking at web analytics include number os unique visits, pages of visits and traffic source. A landing page is a good way to tie a campaign to a particiular web page to track the results. Some analytics, such as page views and time on the site, can be misleading, as people might just spend time on the site but not really be engaged on the web site. "Bounce rate" with a web site means when the user leaves the site. There are so many metrics and so many possibilities. Some good rules include, always test, look at trends, track key metrics and set goals. We also talked about the difference between data, information and knowledge and how markters want to create databases that can be used to gain customer knowledge for better offers and relationships with customers.

Web site design

Web site design is a complex subject because there are so many different approaches to an effective web site. As always in marketing, think about the target audience and corporate objectives first. We looked in class at some ecommerce sites that seemed busy but yet were successful because that layout is what the audience wanted to see. In general, it is useful to have the purpose of the website and any relevant offer in the upper left hand 'golden triangle' area of the site. Often this area is a good place to put a search function as well as the reader's eye will go to the upper left first. We get this information from tracking eyeball movements for many subjects and displaying them on a 'heat map.' The heat map shows where people click on the site, that cearly 'above the fold' is where eyes are resting and how eye movements also form an "F" shape inside the Golden Triangle. The heat map of a Google web search shows why people want to be in the top three or four searches. http://www.ahfx.net/weblog/79 We looked at ideas on web design from Mary Lou Roberts, Jan Zimmerman, Amy Africa and finally, Dr. Zahay! Some independent sources for good web design and customer service are Forrester.com and Bizrate.com. Dr. Zahay likes sites that load easily, use breadcrumbs, are easy to naviagate, use 2-3, clicks, and have easily available contact information. Trust is an important part of web site design because the user must trust the site to exchange information or do business with the site. Even so, the students said they do not look at Truste or other trust seals on the web in deciding to do business with the site. Again, for marketing, web site design and usability are strategic and not technical issues. Web site development is often iterative as companies find out what works and what doesn't in web site design and make changes accordingly.