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1、,Integrating All Direct Marketing Channels to Build Customer LoyaltyA BMW Case StudyKay Madati,Relationship Marketing Manager BMWArthur Middleton Hughes,VP for Strategic Planning MS Database MarketingThe DMA 84th AnnualMcCormick Place,ChicagoTuesday,October 30th 2001 10:00 AM 11:15 AM,1950-2000 Bran
2、ds built by mass advertising1985-2000 Database Marketing arrived,but not integrated with mass advertising.1996-2000 The Internet arrived,but not integrated with DBM or mass advertising2001 BMW brings them all together,How brand marketing has evolved,BMW customers want:A realization of the brand prom
3、isePerformance,safety,technology,innovationRecognitionServiceInformationConvenienceHelpfulness,BMW Buyers Not Necessarily Driven by Price,Personal Profit from Purchase=a(usefulness of product)+b(perceived brand value)-c(money cost)-d(time or inconvenience),How BMW Buyers Make Purchase Decisions,Cons
4、tructors People who build databases Merge/Purge,Hardware,SoftwareCreators People who understand strategy Build loyalty and repeat salesYou need both kinds!,Two kinds of database marketing people,In 2000,BMW built a robust customer and prospect database designed to:Provide a comprehensive view of the
5、 automotive and financial services BMW customerDeliver short term,incremental revenue through opportunistic marketing programsIncrease customer loyalty through understanding and ability to deliver relevant,timely communicationSecure BMWs place in its customers lives by identifying which households a
6、re good targets for additional BMW purchases,Situation Analysis,BMW now has a central system of measurementThe BMW Report Center monitors communications and response from prospects and customersMeasurement includes cost per response and cost per saleBMW now has the ability to view prospects as well
7、customers in its universeThis allows BMW to view the full shopper-owner cycle from first point of contact,through sale and cross saleThe new marketing database contains a broad range of information on the BMW consumerCampaign,response,and financial service data 190 appended individual and household
8、data points,BMW Situation II,Allowing a full view of the BMW customer delivers smarter targeting and profit-generating up sell and cross sell opportunitiesWhich vehicle owners are best targets for credit cards?How can BMW card owners increase the lifetime value of the vehicle owners?Where are the po
9、ckets of our most profitable customers?Which customers will deliver additional revenue through financial services products after they have disposed of their BMW?,BMW Situation III,Improve the effectiveness of marketing programs in the years 2001 2003 in order to:Return to BMW the cost of the databas
10、e buildPay for database maintenance going forwardIncrease the revenue per customer over timeIncrease the profit per customerIncrease the lifetime value of the combined BMW automobile and financial services customer,BMW Database Marketing Goals,Consistent measurement and enhancement of BMW marketing
11、programsAbility to prioritize prospects and customers based on their likelihood to buyIdentification of“low hanging fruit”programs that can be quickly implemented to generate revenue in the short termRefinement of customer communicationsTesting results against Control Groups,How BMW measures return
12、on investment,Control groups measure the effectiveness of each programNon-mailed groups that are measured against the mailed groupsReports on the BMW Report Center provide a consistent form of measurementCost per lead,response and sale measurementCross-penetration of product purchases,Controls and M
13、easurement,Increased communication effectivenessIntegrated database used by all groupsIncreased efficiency The right information to the right customer at the right timeReduced communication expenseFewer pieces mailed with higher effectivenessIncreased customer participationIncreased customer satisfa
14、ctionIncreased corporate and center profitsA higher level of data from and about BMW customers,Benefits to BMW,Relationship Marketing Strategy,All programs are built on a state-of-the-art customer relationship management database which provides:More information on owners and prospects than BMW has e
15、ver assembled beforePowerful tools to support BMW loyalty and prospect conversion programsAutomated communication that supports the Owner Experience,The Database,Increase customer loyaltyIncrease prospect conversion to sales ratioIncrease vehicle sales through existing customersMaintain existing BMW
16、 household recordsKeep communication costs down while increasing effectivenessDevelop a consistent process of program measurement,2001 Database Marketing Goals,Use the marketing database to realize a communications dialogue with both our prospects and our customersSystematic use of customized inform
17、ation to attract and retain customersFacilitate mutually beneficial and relevant information exchangesIncrease owner loyalty and customer acquisition ratesStrengthen BMW brand perception at the individual customer level,BMW Relationship Marketing Objectives,Consumer CommunicationsWelcome KitLoyalty
18、CommunicationsProspect Prioritization/Extending the DialogueBMW Magazine EnhancementsBMW Owners CircleFinancial Services ProgramsCredit Card&Banking Customer AcquisitionCross Sell and Up Sell MarketingOpportunistic“Quick Win”Programs,Core Communications Program,The Owner Welcome Kit,A static kitInfo
19、rmation onBMW,the BrandBMW,the CompanyBMW,the ProductsIt welcomed people to the brand,but offered no real taste of the BMW Experience,The old welcome kit was:,A personal welcome kit that owners realize was created just for themIt arrives within the first 30 daysIt is a dialogue opener,an invitation
20、to the BMW experience that extends over a full yearEach of the kit pieces enhance your perception of the BMW Brand and the ExperienceMultiple calls to action which lead you deeper into the ExperienceIt inherently fosters the collection of information needed for further relationship dialogue,The new
21、BMW welcome kit,Weekly feed of new owners from the databaseRapid record cleanup for mailingWeekly fulfillment of corrected names,addresses and data to the welcome kit programMonthly maintenance of the database which supports all owner and prospect communications,The Database Supports the Welcome Kit
22、,Task:Provide individual customer data for personalized welcome kit fulfillmentStrategy:Provide new owner personalized fulfillment information on a weekly basisRecover key information requestedMaintain owner files based on collected information for future programsIdentify customers by model,financia
23、l status,and preparatory segmentation(i.e.loyalty,activity,etc.),Welcome Kit Fulfillment Process,Loyalty and Owner Communications,BMW customers are fiercely loyal to their brandLoyalty can be measured:it is the repurchase rateSuccessful loyalty is a two way streetCustomer loyalty can be strengthened
24、 by relevant personal communicationsBMW Loyalty initiatives cover the entire ownership experienceWelcome Kit,Newsletters,BMW Magazine,Multiple Vehicle Owner programs,The Loyalty Situation,Increase BMW profits through:Increased repurchase by existing ownersIncreasing the number of BMWs per householdI
25、ncreased sales of BMW previously owned vehiclesIncreased use/purchase of BMW FS productsEach program effectiveness measured by control groups:Control Group:Owners who are not sent the communications Test Group:Owners who get the communications,Owner Communication Goals,General Goals:Immersion in the
26、 BMW ExperiencePromotion of Owners CirclePurchase of BMW accessoriesTo 3 and 4 year BMW owners.Goals:Increase the repurchase rateMultiple BMWs in each householdWidespread use of BMW Financial Services productsTo new BMW owners,Goals:Purchase BMW financial services productsCapture information about t
27、heir preferences,lifestyles,automobile interests,etc.useful for further dialog,Loyalty Building Newsletters,Ongoing collection of news and information of interest to BMW ownersOwner surveys to determine preferences for:News,information,and topicsCommunication Channel(email or print)FrequencyBegin wi
28、th a printed newsletter to gather email addressesMove to email newsletters as quickly as possibleMultiple offers to generate owner responsePromote the use of Owners Circle,Newsletter Strategy,New productsBMW awardsSports stars that drive BMWsRatings by leading car magazinesWhy the BMW engines are su
29、periorThe history of BMWEvent calendarMagazine reprintsSponsorshipsBMW Brand Values,Roadside AssistanceServicing requirementsBMW InsuranceBMW credit cardsBMW AccessoriesDriving EventsBMW trade in pricesBMW Owner ClubsOwners CircleWorld news featuring BMW,Newsletter Content,BMW Magazine,BMW publishes
30、 a high-value magazine to its owners in the first two years after their purchaseBecause of its universal distribution,the magazine can be more than a magazineIt can be a data collection tool for further personalized communications,Magazine Strategy-Before,Capture additional information on customersE
31、mail Addresses Purchase Intentions:owners identifying themselves as entering the purchase cycleAllow BMW owners to purchase merchandiseProvide direction to BMW Online Store for purchasePush registration on Owners CircleEach program effectiveness measured by control groups:Control Group:Owners who ar
32、e not sent the communications Test Group:Owners who get the communications,Magazine Strategy Today,Extending the Dialogue Prospect Messages,Increase prospect conversion to sell more BMW automobilesProvide a steady flow of“qualified”leads to BMW CentersMake communications interactiveContinually impro
33、ve the conversion rates by better prospectingMeasure the conversion rate by Center,Region,Prospect Lifestyle,Income,Goals of the Prospect Management System,Prospects developed from all contact sources:Telephone,Direct Mail,Auto Shows,Events,InternetRapidly qualified and scoredCenters receive qualifi
34、ed leads electronically within 48 hours of receiptProspects get BMW message within 48 hoursEvery lead tracked electronically,with daily,weekly,&monthly reports for BMW management on the web,Automated Database Processes,Scoring models for incoming prospect requests determine priorityFocus on priority
35、 A&B prospectsMoving to lower priorities as the systems proves itselfFully integrated creative implementation in both electronic and paper media as well as eventsTest scoring models against anticipated response and adjust as neededUtilize a 5%control group for a period of one year for reporting comp
36、arisons,Testing and Implementation Strategy,SalesResponseTo electronic vs.paperPredetermined vs.RelationalOffers and incentives Modeling success%prospect conversion(historical)Media preference automated systemCost of programCost of sales,Measurements of the Prospect Program,Measuring success through
37、 the dealers,Scored leads sent to each dealerConversions are measured monthlyEach dealer conversation ratio calculatedProgram success measured by comparing dealer to dealer conversion ratioDealer,Market,Region and National average conversion ratios create measurable benchmarksAbove average dealers m
38、anage their leads better,Direct Mail and E-mail integrated communication planAlternating content delivery mediumsEach reinforcing the one that came before itUse of database information to drive customization and relevanceEach communication introducing a new piece of the BMW ExperienceAll communicati
39、ons tie in to web activitiesIntegration with off-line and online marketing activitiesProspects given the opportunity to opt-out at any pointProspects removed from program if they purchase a vehicle,Prospect Program Communications Strategy,Immerse and invite the prospect into the BMW ExperienceReinfo
40、rce the initial contact with BMWEducate as to the depth of the BrandProducts and ServicesPoint the prospect towards a test drive and the dealerReinforce core marketing communication objectives about:Brand ValuesBrand HeritageProduct attributesThe BMW Ownership Experience,Program Communications Objec
41、tives,New productsBMW in the NewsBMW Technology and InnovationBMW SafetyThe history of BMW and BMW Brand ValuesEvent invitationsTest drive incentivesBMW giftsMagazine reprintsBMW Financial Services products,Program Content Objectives,Sell more cars by:Immediate Scoring of ProspectsImmediate electron
42、ic Center notification of leadsImmediate communications with the prospectContinually engage the customer in the ExperienceProvide more information on the depth of the BrandReduce the cost per car soldProvide Management with accurate&timely knowledge of the prospect and sales processIncrease the over
43、all effectiveness of future prospecting programs by learning from this one,Prospect System Benefits,Quick wins:X factor programs,The BMW Database offers a huge opportunity to utilize information to refine BMW programsX Factor programs are built on data mining,and deliver:Highly effective marketing p
44、rogramsIncremental revenue opportunitiesLow cost per saleIncreased customer/prospect contact and satisfaction,X Factor Situation,The Loyalty and Prospect Programs,combined with the database,offer great potential for creative,interactive X factor programs:ContestsPrograms for Women/MinoritiesSpecial
45、EventsReferral ProgramsCertified Previously Owned CarsSecond BMWs in every homeLifestyle ProgramsCongratulatory Mailings to 3+BMW Owners,X Factor Initiatives,Plus improved reporting,query developmentand a half dozen new ideas to be developed and implemented during the year,X Factor:something new eve
46、ry quarter,Identify ways to build relationships with female owners:Bring them to the Brand,and keep them longerAppeal to their unique needsRecognize the purchasing power and influence that automotive marketers typically ignoreProvide tools that reduce pre-dealer visit anxietyTailored communications
47、that highlight what women are looking forLive chat support by femalesDevelop a network of female sales reps,X1 Womens Program,Identify households that are prime prospects to purchase a second BMWAnalyze multiple purchase householdsTarget groups most likely to purchase a CPO vehicleHouseholds with te
48、enagers or young adultsIdentify seasonality graduation,etc.Test the program on current BMW owners,then roll out to prospects,X2:Certified Previously Owned Program,Identify those current owners who are most likely to purchase a new 7 Series BMWInvite these special people to be among a small group who
49、 are allowed to preview the new 7 seriesAppeal to their appreciation of inclusion by asking for their feedback and opinionAllow them to be among the first to test driveNotify them periodically of the status of the vehicle,X3:Series 7 Launch,Identify those current owners who are most likely to purcha
50、se the MINICreate a unique lifestyle message to these ownersAppeal to the early adapterFocus on active lifestylesGet them to preview on the web and opt in to marketing messages,X4:Mini Launch,Develop a program that uniquely appeals to the BMW ownerCommunicate the personality of the brandReinforce th
