CAC Group presents "Segmentology" in Database Class

Brad Rukstales, the CEO and President of CAC Group, spoke about his success in building databases and creating effective segmentation schemes for Morton's steakhouse. He gave valuable insight into how companies are using databases to engage their customers across channels to create meaningful customer experiences. He emphasized the importance of data analytics in marketing and the number of jobs there will be in the area. Conincidentally we are working on developing a data analytics track for the interactive marketing program.

I found the segmentology overview on the CAC web site a useful way to discuss marketing segmentation and show its value. The company takes lifestage, demographics and other information and compiles it in a proprietary database. Coupling that information with proprietary in-house data allowed Morton's steakhouse to identify its best customers and market to them accordingly. The group helps other customers in the same way.

Thanks, Brad for taking the time to visit us.

Students work to beat benchmark cluster

This semester in Database Marketing we had the unique opportunity to work on some real-life data from Restaurant.com, a generous sponsor of our program. Here is a picture of my students working on a unique two-step cluster model to try to create a segmentation scheme better on some variable than the one that was presented by Restaurant.com. The students have a number of variables to choose from to create their clusters and I have a picture above of their hard work...is that steam I see coming from their heads or is it just the promise of extra credit?

I just came back from the DMEF/DMA conferences and a lot of other educators cannot believe what our students can do in analytics at an undergraduate level. After great preparation in our Marketing Research class, the students are able to analyze augmented customer databases and solve real-world problems using SPSS as a data analysis tool. Many of our students have gone to work at Nielson, Millward Brown and others and the analytical preparation they received has helped them on the job. Let us know if you need recent grads with these skills.

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.