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 AMu1950-2000 Brand
2、s built by mass advertisingu1985-2000 Database Marketing arrived,but not integrated with mass advertising.u1996-2000 The Internet arrived,but not integrated with DBM or mass advertisingu2001 BMW brings them all togetherHow brand marketing has evolveduBMW customers want:uA realization of the brand pr
3、omiseuPerformance,safety,technology,innovationuRecognitionuServiceuInformationuConvenienceuHelpfulnessBMW Buyers Not Necessarily Driven by PricePersonal Profit from Purchase=a (usefulness of product)+b (perceived brand value)-c (money cost)-d (time or inconvenience)How BMW Buyers Make Purchase Decis
4、ionsuConstructors People who build databases Merge/Purge,Hardware,SoftwareuCreators People who understand strategy Build loyalty and repeat salesuYou need both kinds!Two kinds of database marketing peopleuIn 2000,BMW built a robust customer and prospect database designed to:uProvide a comprehensive
5、view of the automotive and financial services BMW customeruDeliver short term,incremental revenue through opportunistic marketing programsuIncrease customer loyalty through understanding and ability to deliver relevant,timely communicationuSecure BMWs place in its customers lives by identifying whic
6、h households are good targets for additional BMW purchases Situation AnalysisuBMW now has a central system of measurementuThe BMW Report Center monitors communications and response from prospects and customersuMeasurement includes cost per response and cost per saleuBMW now has the ability to view p
7、rospects as well customers in its universeuThis allows BMW to view the full shopper-owner cycle from first point of contact,through sale and cross saleuThe new marketing database contains a broad range of information on the BMW consumeruCampaign,response,and financial service data u190 appended indi
8、vidual and household data pointsBMW Situation IIuAllowing a full view of the BMW customer delivers smarter targeting and profit-generating up sell and cross sell opportunitiesuWhich vehicle owners are best targets for credit cards?uHow can BMW card owners increase the lifetime value of the vehicle o
9、wners?uWhere are the pockets of our most profitable customers?uWhich customers will deliver additional revenue through financial services products after they have disposed of their BMW?BMW Situation IIIuImprove the effectiveness of marketing programs in the years 2001 2003 in order to:uReturn to BMW
10、 the cost of the database builduPay for database maintenance going forwarduIncrease the revenue per customer over timeuIncrease the profit per customeruIncrease the lifetime value of the combined BMW automobile and financial services customerBMW Database Marketing Goalsu Consistent measurement and e
11、nhancement of BMW marketing programsu Ability to prioritize prospects and customers based on their likelihood to buyu Identification of“low hanging fruit”programs that can be quickly implemented to generate revenue in the short termu Refinement of customer communicationsuTesting results against Cont
12、rol GroupsHow BMW measures return on investmentuControl groups measure the effectiveness of each programuNon-mailed groups that are measured against the mailed groupsuReports on the BMW Report Center provide a consistent form of measurementuCost per lead,response and sale measurementuCross-penetrati
13、on of product purchasesControls and MeasurementuIncreased communication effectivenessu Integrated database used by all groupsuIncreased efficiency The right information to the right customer at the right timeuReduced communication expenseu Fewer pieces mailed with higher effectivenessuIncreased cust
14、omer participationuIncreased customer satisfactionuIncreased corporate and center profitsuA higher level of data from and about BMW customersBenefits to BMWRelationship Marketing StrategyuAll programs are built on a state-of-the-art customer relationship management database which provides:uMore info
15、rmation on owners and prospects than BMW has ever assembled beforeuPowerful tools to support BMW loyalty and prospect conversion programsuAutomated communication that supports the Owner ExperienceThe DatabaseuIncrease customer loyaltyuIncrease prospect conversion to sales ratiouIncrease vehicle sale
16、s through existing customersuMaintain existing BMW household recordsuKeep communication costs down while increasing effectivenessuDevelop a consistent process of program measurement2001 Database Marketing GoalsuUse the marketing database to realize a communications dialogue with both our prospects a
17、nd our customersuSystematic use of customized information to attract and retain customersuFacilitate mutually beneficial and relevant information exchangesuIncrease owner loyalty and customer acquisition ratesuStrengthen BMW brand perception at the individual customer levelBMW Relationship Marketing
18、 Objectivesu Consumer CommunicationsuWelcome KituLoyalty CommunicationsuProspect Prioritization/Extending the DialogueuBMW Magazine EnhancementsuBMW Owners CircleuFinancial Services ProgramsuCredit Card&Banking Customer AcquisitionuCross Sell and Up Sell MarketinguOpportunistic“Quick Win”ProgramsCor
19、e Communications ProgramThe Owner Welcome KituA static kituInformation onuBMW,the BranduBMW,the CompanyuBMW,the ProductsuIt welcomed people to the brand,but offered no real taste of the BMW ExperienceThe old welcome kit was:uA personal welcome kit that owners realize was created just for themuIt arr
20、ives within the first 30 daysuIt is a dialogue opener,an invitation to the BMW experience that extends over a full yearuEach of the kit pieces enhance your perception of the BMW Brand and the ExperienceuMultiple calls to action which lead you deeper into the ExperienceuIt inherently fosters the coll
21、ection of information needed for further relationship dialogueThe new BMW welcome kituWeekly feed of new owners from the databaseuRapid record cleanup for mailinguWeekly fulfillment of corrected names,addresses and data to the welcome kit programuMonthly maintenance of the database which supports al
22、l owner and prospect communicationsThe Database Supports the Welcome KituTask:Provide individual customer data for personalized welcome kit fulfillmentStrategy:uProvide new owner personalized fulfillment information on a weekly basisuRecover key information requesteduMaintain owner files based on co
23、llected information for future programsuIdentify customers by model,financial status,and preparatory segmentation(i.e.loyalty,activity,etc.)Welcome Kit Fulfillment ProcessLoyalty and Owner CommunicationsuBMW customers are fiercely loyal to their branduLoyalty can be measured:it is the repurchase rat
24、euSuccessful loyalty is a two way streetuCustomer loyalty can be strengthened by relevant personal communicationsuBMW Loyalty initiatives cover the entire ownership experienceuWelcome Kit,Newsletters,BMW Magazine,Multiple Vehicle Owner programsThe Loyalty SituationuIncrease BMW profits through:uIncr
25、eased repurchase by existing ownersuIncreasing the number of BMWs per householduIncreased sales of BMW previously owned vehiclesuIncreased use/purchase of BMW FS productsuEach program effectiveness measured by control groups:u Control Group:Owners who are not sent the communications uTest Group:Owne
26、rs who get the communicationsOwner Communication GoalsuGeneral Goals:u Immersion in the BMW Experienceu Promotion of Owners Circleu Purchase of BMW accessoriesuTo 3 and 4 year BMW owners.Goals:u Increase the repurchase rateu Multiple BMWs in each householdu Widespread use of BMW Financial Services p
27、roductsuTo new BMW owners,Goals:u Purchase BMW financial services productsu Capture information about their preferences,lifestyles,automobile interests,etc.useful for further dialogLoyalty Building NewslettersuOngoing collection of news and information of interest to BMW ownersuOwner surveys to dete
28、rmine preferences for:u News,information,and topicsu Communication Channel(email or print)u FrequencyuBegin with a printed newsletter to gather email addressesu Move to email newsletters as quickly as possibleuMultiple offers to generate owner responseuPromote the use of Owners CircleNewsletter Stra
29、tegyuNew productsuBMW awardsuSports stars that drive BMWsuRatings by leading car magazinesuWhy the BMW engines are superioruThe history of BMWuEvent calendaruMagazine reprintsuSponsorshipsuBMW Brand ValuesuRoadside AssistanceuServicing requirementsuBMW InsuranceuBMW credit cardsuBMW AccessoriesuDriv
30、ing EventsuBMW trade in pricesuBMW Owner ClubsuOwners CircleuWorld news featuring BMWNewsletter ContentBMW MagazineuBMW publishes a high-value magazine to its owners in the first two years after their purchaseuBecause of its universal distribution,the magazine can be more than a magazineuIt can be a
31、 data collection tool for further personalized communicationsMagazine Strategy-BeforeuCapture additional information on customersu Email Addresses u Purchase Intentions:owners identifying themselves as entering the purchase cycleuAllow BMW owners to purchase merchandiseu Provide direction to BMW Onl
32、ine Store for purchaseuPush registration on Owners CircleuEach program effectiveness measured by control groups:u Control Group:Owners who are not sent the communications u Test Group:Owners who get the communicationsMagazine Strategy TodayExtending the Dialogue Prospect MessagesuIncrease prospect c
33、onversion to sell more BMW automobilesuProvide a steady flow of“qualified”leads to BMW CentersuMake communications interactiveuContinually improve the conversion rates by better prospectinguMeasure the conversion rate by Center,Region,Prospect Lifestyle,IncomeGoals of the Prospect Management Systemu
34、Prospects developed from all contact sources:uTelephone,Direct Mail,Auto Shows,Events,InternetuRapidly qualified and scoreduCenters receive qualified leads electronically within 48 hours of receiptuProspects get BMW message within 48 hoursuEvery lead tracked electronically,with daily,weekly,&monthly
35、 reports for BMW management on the webAutomated Database ProcessesuScoring models for incoming prospect requests determine priorityu Focus on priority A&B prospectsu Moving to lower priorities as the systems proves itselfuFully integrated creative implementation in both electronic and paper media as
36、 well as eventsuTest scoring models against anticipated response and adjust as neededuUtilize a 5%control group for a period of one year for reporting comparisonsTesting and Implementation StrategyuSalesuResponseuTo electronic vs.paperuPredetermined vs.RelationaluOffers and incentives uModeling succ
37、essu%prospect conversion(historical)uMedia preference automated systemuCost of programuCost of salesMeasurements of the Prospect ProgramMeasuring success through the dealersuScored leads sent to each dealeruConversions are measured monthlyuEach dealer conversation ratio calculateduProgram success me
38、asured by comparing dealer to dealer conversion ratiouDealer,Market,Region and National average conversion ratios create measurable benchmarksuAbove average dealers manage their leads betteruDirect Mail and E-mail integrated communication planuAlternating content delivery mediumsuEach reinforcing th
39、e one that came before ituUse of database information to drive customization and relevanceuEach communication introducing a new piece of the BMW ExperienceuAll communications tie in to web activitiesuIntegration with off-line and online marketing activitiesuProspects given the opportunity to opt-out
40、 at any pointuProspects removed from program if they purchase a vehicleProspect Program Communications StrategyuImmerse and invite the prospect into the BMW ExperienceuReinforce the initial contact with BMWuEducate as to the depth of the BranduProducts and ServicesuPoint the prospect towards a test
41、drive and the dealeruReinforce core marketing communication objectives about:uBrand ValuesuBrand HeritageuProduct attributesuThe BMW Ownership ExperienceProgram Communications ObjectivesuNew productsuBMW in the NewsuBMW Technology and InnovationuBMW SafetyuThe history of BMW and BMW Brand ValuesuEve
42、nt invitationsuTest drive incentivesuBMW giftsuMagazine reprintsuBMW Financial Services productsProgram Content ObjectivesuSell more cars by:uImmediate Scoring of ProspectsuImmediate electronic Center notification of leadsuImmediate communications with the prospectuContinually engage the customer in
43、 the ExperienceuProvide more information on the depth of the BranduReduce the cost per car solduProvide Management with accurate&timely knowledge of the prospect and sales processuIncrease the overall effectiveness of future prospecting programs by learning from this oneProspect System BenefitsQuick
44、 wins:X factor programs uThe BMW Database offers a huge opportunity to utilize information to refine BMW programsuX Factor programs are built on data mining,and deliver:uHighly effective marketing programsuIncremental revenue opportunitiesuLow cost per saleuIncreased customer/prospect contact and sa
45、tisfactionX Factor SituationuThe Loyalty and Prospect Programs,combined with the database,offer great potential for creative,interactive X factor programs:u Contestsu Programs for Women/Minoritiesu Special Eventsu Referral Programsu Certified Previously Owned Carsu Second BMWs in every homeu Lifesty
46、le Programsu Congratulatory Mailings to 3+BMW OwnersX Factor InitiativesQ1Q2Q3Q4CPO ProgramOwner ReferralCar BirthdayLaunchPlus improved reporting,query developmentand a half dozen new ideas to be developed and implemented during the yearX Factor:something new every quarteruIdentify ways to build re
47、lationships with female owners:uBring them to the Brand,and keep them longeruAppeal to their unique needsuRecognize the purchasing power and influence that automotive marketers typically ignoreuProvide tools that reduce pre-dealer visit anxietyuTailored communications that highlight what women are l
48、ooking foruLive chat support by femalesuDevelop a network of female sales repsX1 Womens ProgramuIdentify households that are prime prospects to purchase a second BMWuAnalyze multiple purchase householdsuTarget groups most likely to purchase a CPO vehicleuHouseholds with teenagers or young adultsuIde
49、ntify seasonality graduation,etc.uTest the program on current BMW owners,then roll out to prospectsX2:Certified Previously Owned ProgramuIdentify those current owners who are most likely to purchase a new 7 Series BMWuInvite these special people to be among a small group who are allowed to preview t
50、he new 7 seriesuAppeal to their appreciation of inclusion by asking for their feedback and opinionuAllow them to be among the first to test driveuNotify them periodically of the status of the vehicleX3:Series 7 LaunchuIdentify those current owners who are most likely to purchase the MINIuCreate a un
