by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Panpa Bulletin : July 2006
16 | PANPA BULLETIN July 2006 SITUATION A large, local advertiser is us- ing a direct mail competitor to deliver its local advertising message to the community. The Sacramento Bee (Sacra- mento, CA) receives no mean- ingful share of this merchant's advertising budget. OPPORTUNITY The critical element valued by the client with respect to the competition was the ability to deliver micro-zoned areas, specifically: sub-zip code zon- ing. Today, The Sacramento Bee also offers sub-zip code deliv- ery, complemented by target- ed direct mail distribution to non-subscriber households. In addition, The Bee has de- veloped a highly sophisticated marketing database to sup- port its analytical and distri- bution capabilities. This da- tabase system, MAAXTM from ASTECH InterMedia, provides a competitive edge that sim- ply cannot be matched by the competition. OBJECTIVE Using a customer-centric ap- proach facilitated by MAAX, the plan was to vividly illus- trate The Bee's connection to the merchant's most valuable customers across the full spec- trum of media. By so doing, it was hoped to secure a lucra- tive schedule of advertising business from this account. PROCESS The client agreed to share a sample of their customer file with for a test analysis. This data was seamlessly integrated into MAAX and linked to other key elements in the database, including household demo- graphics, subscriber transac- tions, and web registration data. Approximately 40,000 customer records from six lo- cal stores were available for analysis and data mining. Prior to the implementation of MAAX, the time required to prepare a very comprehensive customer data analysis would have been prohibitive, if it was indeed doable at all. The func- tion and flexibility of MAAX al- lows complete analysis in just a fraction of the time, and with far more detail. The initial procedural ele- ments can be summarized as follows: • Identify and quantify seg- ments based on customer value. • Evaluate purchase fre- quency by segment. • Connect customers of various levels of value with media channels most likely used. • Propose an integrated media mix that positions the message through the channel most likely used by the valued customer. DATA ANALYSIS Four unique customer seg- ments were defined as follows based on the spending levels of loyalty cardholders: Tiers 1, 2, 3, and 4. For each household within each tier, individual spending, frequency of purchase and street address were available. In the example used, the mer- chant's best customers (Tier 1) make up 9 per cent of its card- holder base, but accounts for 41 per cent of its revenue. Clearly, Tier 1 customers are quite important. Tier 1, Tier 2, and Tier 3 cus- tomers make up 28 per cent of the customer base and 75 per cent of revenue. In contrast, Tier 4 customers comprise 72 per cent of the customer base but account for just 25 per cent of revenue. Using this basis it is easy to see that while each customer may be of value, not all are of equal value. The significance of the Tier 1 segment is reinforced by the fact that these consumers also shop more frequently dur- ing the week. More than half of these patrons shop at least two times per week, and spend more per visit than other cus- tomers. Next, there is Life Stages which can be introduced into the customer tier analysis. These five Life Stages are clearly of premier importance to the merchant. Moreover, the level of importance is nearly equal across the respective value tiers. This suggests the mer- chant could target these life stages with motivating mes- sages aligned to move specific customers 'up' in their tier of value. The Bee is now in a position to offer a mix of media and distribution options that will optimize reach among the best customers and prospects. That, of course, is a position of strength for The Bee. By matching the mix of media and distribution methods to precisely the channel appro- priate to reach the various key customer segments, it is pro- viding a total communications solution designed to maximize exposure and motivate con- sumer response. For example, in-paper adver- tising is appropriate if the tar- get customer is a subscriber; online advertising is relevant for registered users of sacbee. com; and for neither we can communicate via the mail. The point is, you can put the advertising in the products that you know the household is using. CONCLUSION We have illustrated: • We understand the distri- bution of the valued cus- tomers and prospects. • We can match the most effective advertising chan- nel with each household. • Using a portfolio of prod- ucts and distribution meth- ods we can create a better return on customers. • We can offer a better mix than the competition through an integrated, multi-channel product portfolio. • We can measure the back- end to ensure progress and make appropriate adjust- ments. • The future of marketing resides in the success of individualised, targeted communications. Commu- nications that are valued by the consumer require customer intimacy, market knowledge, and product integration at the house- hold level. The key is to first understand the advertiser's customer. That analysis gives us the intel- ligence to develop a strategy that will best deliver commu- nication messages across mul- tiple channels. Sell customers first, then products virtually sell themselves. Darrell Kunken is the Market analysis Manager for the Sacramento Bee in Sacramento, Ca. using post code delivery the Sacramento Bee grabbed advertising dollars being used on direct mail writes Darrell Kunken How Data-Driven Marketing Can Turn the Tide