Page-2IntegratingAllDirectMarketingChannelstoBuildCustomerLoyaltyABMWCaseStudyKayMadati,RelationshipMarketingManagerBMWArthurMiddletonHughes,VPforStrategicPlanningM\SDatabaseMarketingTheDMA84thAnnualMcCormickPlace,ChicagoTuesday,October30th200110:00AM–11:15AMPage-31950-2000Brandsbuiltbymassadvertising1985-2000DatabaseMarketingarrived,butnotintegratedwithmassadvertising.1996-2000TheInternetarrived,butnotintegratedwithDBMormassadvertising2001BMWbringsthemalltogetherHowbrandmarketinghasevolvedPage-4BMWcustomerswant:ArealizationofthebrandpromisePerformance,safety,technology,innovationRecognitionServiceInformationConvenienceHelpfulnessBMWBuyersNotNecessarilyDrivenbyPricePage-5PersonalProfitfromPurchase=a(usefulnessofproduct)+b(perceivedbrandvalue)-c(moneycost)-d(timeorinconvenience)HowBMWBuyersMakePurchaseDecisionsPage-6ConstructorsPeoplewhobuilddatabasesMerge/Purge,Hardware,SoftwareCreatorsPeoplewhounderstandstrategyBuildloyaltyandrepeatsalesYouneedbothkinds!TwokindsofdatabasemarketingpeoplePage-7In2000,BMWbuiltarobustcustomerandprospectdatabasedesignedto:ProvideacomprehensiveviewoftheautomotiveandfinancialservicesBMWcustomerDelivershortterm,incrementalrevenuethroughopportunisticmarketingprogramsIncreasecustomerloyaltythroughunderstandingandabilitytodeliverrelevant,timelycommunicationSecureBMW’splaceinitscustomers’livesbyidentifyingwhichhouseholdsaregoodtargetsforadditionalBMWpurchasesSituationAnalysisPage-8BMWnowhasacentralsystemofmeasurementTheBMWReportCentermonitorscommunicationsandresponsefromprospectsandcustomersMeasurementincludescostperresponseandcostpersaleBMWnowhastheabilitytoviewprospectsaswellcustomersinitsuniverseThisallowsBMWtoviewthefullshopper-ownercyclefromfirstpointofcontact,throughsaleandcrosssaleThenewmarketingdatabasecontainsabroadrangeofinformationontheBMWconsumerCampaign,response,andfinancialservicedata190appendedindividualandhouseholddatapointsBMWSituationIIPage-9AllowingafullviewoftheBMWcustomerdeliverssmartertargetingandprofit-generatingupsellandcrosssellopportunitiesWhichvehicleownersarebesttargetsforcreditcards?HowcanBMWcardownersincreasethelifetimevalueofthevehicleowners?Wherearethepocketsofourmostprofitablecustomers?WhichcustomerswilldeliveradditionalrevenuethroughfinancialservicesproductsaftertheyhavedisposedoftheirBMW?BMWSituationIIIPage-10Improvetheeffectivenessofmarketingprogramsintheyears2001–2003inorderto:ReturntoBMWthecostofthedatabasebuildPayfordatabasemaintenancegoingforwardIncreasetherevenuepercustomerovertimeIncreasetheprofitpercustomerIncreasethelifetimevalueofthecombinedBMWautomobileandfinancialservicescustomerBMWDatabaseMarketingGoalsPage-11ConsistentmeasurementandenhancementofBMWmarketingprogramsAbilitytoprioritizeprospectsandcustomersbasedontheirlikelihoodtobuyIdentificationof“lowhangingfruit”–programsthatcanbequicklyimplementedtogeneraterevenueintheshorttermRefinementofcustomercommunicationsTestingresultsagainstControlGroupsHowBMWmeasuresreturnoninvestmentPage-12ControlgroupsmeasuretheeffectivenessofeachprogramNon-mailedgroupsthataremeasuredagainstthemailedgroupsReportsontheBMWReportCenterprovideaconsistentformofmeasurementCostperlead,responseandsalemeasurementCross-penetrationofproductpurchasesControlsandMeasurementPage-13IncreasedcommunicationeffectivenessIntegrateddatabaseusedbyallgroupsIncreasedefficiency–TherightinformationtotherightcustomerattherighttimeReducedcommunicationexpenseFewerpiecesmailedwithhighereffectivenessIncreasedcustomerparticipationIncreasedcustomersatisfactionIncreasedcorporateandcenterprofitsAhigherlevelofdatafromandaboutBMWcustomersBenefitstoBMWRelationshipMarketingStrategyPage-15Allprogramsarebuiltonastate-of-the-artcustomerrelationshipmanagementdatabasewhichprovides:MoreinformationonownersandprospectsthanBMWhaseverassembledbeforePowerfultoolstosupportBMWloyaltyandprospectconversionprogramsAutomatedcommunicationthatsupportstheOwnerExperienceTheDatabasePage-16IncreasecustomerloyaltyIncreaseprospectconversiontosalesratioIncreasevehiclesalesthroughexistingcustomersMaintainexistingBMWhouseholdrecordsKeepcommunicationcostsdownwhileincreasingeffectivenessDevelopaconsistentprocessofprogrammeasurement2001DatabaseMarketingGoalsPage-17UsethemarketingdatabasetorealizeacommunicationsdialoguewithbothourprospectsandourcustomersSystematicuseofcustomizedinformationtoattractandretaincustomersFacilitatemutuallybeneficialandrelevantinformationexchangesIncreaseownerloyaltyandcustomeracquisitionratesStrengthenBMWbrandperceptionattheindividualcustomerlevelBMWRelationshipMarketingObjectivesPage-18ConsumerCommunicationsWelcomeKitLoyaltyCommunicationsProspectPrioritization/ExtendingtheDialogueBMWMagazineEnhancementsBMWOwner’sCircleFinancialServicesProgramsCreditCard&BankingCustomerAcquisitionCrossSellandUpSellMarketingOpportunistic“QuickWin”ProgramsCoreCommunicationsProgramPage-19TheOwnerWelcomeKitPage-20AstatickitInformationonBMW,theBrandBMW,theCompanyBMW,theProductsItwelcome