1、Page-1Integrating 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 AMPage-2u195
2、0-2000 Brands 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 evolvedPage-3uBMW customers want:uA realizati
3、on of the brand promiseuPerformance,safety,technology,innovationuRecognitionuServiceuInformationuConvenienceuHelpfulnessBMW Buyers Not Necessarily Driven by PricePage-4Personal Profit from Purchase=a (usefulness of product)+b (perceived brand value)-c (money cost)-d (time or inconvenience)How BMW Bu
4、yers Make Purchase DecisionsPage-5uConstructors 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 peoplePage-6uIn 2000,BMW built a robust customer and prospect database d
5、esigned to:uProvide a comprehensive 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
6、 customers lives by identifying which households are good targets for additional BMW purchases Situation AnalysisPage-7uBMW now has a central system of measurementuThe BMW Report Center monitors communications and response from prospects and customersuMeasurement includes cost per response and cost
7、per saleuBMW now has the ability to view prospects 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
8、 financial service data u190 appended individual and household data pointsBMW Situation IIPage-8uAllowing 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 own
9、ers increase the lifetime value of the vehicle owners?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 IIIPage-9uImprove the effectiveness of marketing prog
10、rams in the years 2001 2003 in order to:uReturn to BMW 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
11、Database Marketing GoalsPage-10u Consistent measurement and enhancement 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 Refin
12、ement of customer communicationsuTesting results against Control GroupsHow BMW measures return on investmentPage-11uControl 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 mea
13、surementuCost per lead,response and sale measurementuCross-penetration of product purchasesControls and MeasurementPage-12uIncreased communication effectivenessu Integrated database used by all groupsuIncreased efficiency The right information to the right customer at the right timeuReduced communic
14、ation expenseu Fewer pieces mailed with higher effectivenessuIncreased customer participationuIncreased customer satisfactionuIncreased corporate and center profitsuA higher level of data from and about BMW customersBenefits to BMWRelationship Marketing StrategyPage-14uAll programs are built on a st
15、ate-of-the-art customer relationship management database which provides:uMore information 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 DatabasePage-15uIn
16、crease customer loyaltyuIncrease prospect conversion to sales ratiouIncrease vehicle sales through existing customersuMaintain existing BMW household recordsuKeep communication costs down while increasing effectivenessuDevelop a consistent process of program measurement2001 Database Marketing GoalsP
17、age-16uUse the marketing database to realize a communications dialogue with both our prospects and our customersuSystematic use of customized information to attract and retain customersuFacilitate mutually beneficial and relevant information exchangesuIncrease owner loyalty and customer acquisition
18、ratesuStrengthen BMW brand perception at the individual customer levelBMW Relationship Marketing ObjectivesPage-17u Consumer CommunicationsuWelcome KituLoyalty CommunicationsuProspect Prioritization/Extending the DialogueuBMW Magazine EnhancementsuBMW Owners CircleuFinancial Services ProgramsuCredit
19、 Card&Banking Customer AcquisitionuCross Sell and Up Sell MarketinguOpportunistic“Quick Win”ProgramsCore Communications ProgramPage-18The Owner Welcome KitPage-19uA static kituInformation onuBMW,the BranduBMW,the CompanyuBMW,the ProductsuIt welcomed people to the brand,but offered no real taste of t
20、he BMW ExperienceThe old welcome kit was:Page-20uA personal welcome kit that owners realize was created just for themuIt arrives 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 BM
21、W Brand and the ExperienceuMultiple calls to action which lead you deeper into the ExperienceuIt inherently fosters the collection of information needed for further relationship dialogueThe new BMW welcome kitPage-21uWeekly feed of new owners from the databaseuRapid record cleanup for mailinguWeekly
22、 fulfillment of corrected names,addresses and data to the welcome kit programuMonthly maintenance of the database which supports all owner and prospect communicationsThe Database Supports the Welcome KitPage-22uTask:Provide individual customer data for personalized welcome kit fulfillmentStrategy:uP
23、rovide new owner personalized fulfillment information on a weekly basisuRecover key information requesteduMaintain owner files based on collected information for future programsuIdentify customers by model,financial status,and preparatory segmentation(i.e.loyalty,activity,etc.)Welcome Kit Fulfillmen
24、t ProcessPage-23Loyalty and Owner CommunicationsPage-24uBMW customers are fiercely loyal to their branduLoyalty can be measured:it is the repurchase rateuSuccessful loyalty is a two way streetuCustomer loyalty can be strengthened by relevant personal communicationsuBMW Loyalty initiatives cover the
25、entire ownership experienceuWelcome Kit,Newsletters,BMW Magazine,Multiple Vehicle Owner programsThe Loyalty SituationPage-25uIncrease BMW profits through:uIncreased repurchase by existing ownersuIncreasing the number of BMWs per householduIncreased sales of BMW previously owned vehiclesuIncreased us
26、e/purchase of BMW FS productsuEach program effectiveness measured by control groups:u Control Group:Owners who are not sent the communications uTest Group:Owners who get the communicationsOwner Communication GoalsPage-26uGeneral Goals:u Immersion in the BMW Experienceu Promotion of Owners Circleu Pu
27、rchase 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 productsuTo new BMW owners,Goals:u Purchase BMW financial services productsu Capture information about their preferences,lifestyles,aut
28、omobile interests,etc.useful for further dialogLoyalty Building NewslettersPage-27uOngoing collection of news and information of interest to BMW ownersuOwner surveys to determine preferences for:u News,information,and topicsu Communication Channel(email or print)u FrequencyuBegin with a printed news
29、letter to gather email addressesu Move to email newsletters as quickly as possibleuMultiple offers to generate owner responseuPromote the use of Owners CircleNewsletter StrategyPage-28uNew productsuBMW awardsuSports stars that drive BMWsuRatings by leading car magazinesuWhy the BMW engines are super
30、ioruThe history of BMWuEvent calendaruMagazine reprintsuSponsorshipsuBMW Brand ValuesuRoadside AssistanceuServicing requirementsuBMW InsuranceuBMW credit cardsuBMW AccessoriesuDriving EventsuBMW trade in pricesuBMW Owner ClubsuOwners CircleuWorld news featuring BMWNewsletter ContentPage-29BMW Magazi
31、nePage-30uBMW 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 data collection tool for further personalized communicationsMagazine Strategy-BeforePage-31uCapture addit
32、ional 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 Online Store for purchaseuPush registration on Owners CircleuEach program effectiveness measured by co
33、ntrol groups:u Control Group:Owners who are not sent the communications u Test Group:Owners who get the communicationsMagazine Strategy TodayPage-32Extending the Dialogue Prospect MessagesPage-33uIncrease prospect conversion to sell more BMW automobilesuProvide a steady flow of“qualified”leads to BM
34、W CentersuMake communications interactiveuContinually improve the conversion rates by better prospectinguMeasure the conversion rate by Center,Region,Prospect Lifestyle,IncomeGoals of the Prospect Management SystemPage-34uProspects developed from all contact sources:uTelephone,Direct Mail,Auto Shows
35、,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 reports for BMW management on the webAutomated Database ProcessesPage-35uScor
36、ing 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 well as eventsuTest scoring models against anticipated response and ad
37、just as neededuUtilize a 5%control group for a period of one year for reporting comparisonsTesting and Implementation StrategyPage-36uSalesuResponseuTo electronic vs.paperuPredetermined vs.RelationaluOffers and incentives uModeling successu%prospect conversion(historical)uMedia preference automated
38、systemuCost of programuCost of salesMeasurements of the Prospect ProgramPage-37Measuring success through the dealersuScored leads sent to each dealeruConversions are measured monthlyuEach dealer conversation ratio calculateduProgram success measured by comparing dealer to dealer conversion ratiouDea
39、ler,Market,Region and National average conversion ratios create measurable benchmarksuAbove average dealers manage their leads betterPage-38uDirect Mail and E-mail integrated communication planuAlternating content delivery mediumsuEach reinforcing the one that came before ituUse of database informat
40、ion 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 at any pointuProspects removed from program if th
41、ey purchase a vehicleProspect Program Communications StrategyPage-39uImmerse 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 drive and the dealeruReinforce core marketi
42、ng communication objectives about:uBrand ValuesuBrand HeritageuProduct attributesuThe BMW Ownership ExperienceProgram Communications ObjectivesPage-40uNew productsuBMW in the NewsuBMW Technology and InnovationuBMW SafetyuThe history of BMW and BMW Brand ValuesuEvent invitationsuTest drive incentives
43、uBMW giftsuMagazine reprintsuBMW Financial Services productsProgram Content ObjectivesPage-41uSell more cars by:uImmediate Scoring of ProspectsuImmediate electronic Center notification of leadsuImmediate communications with the prospectuContinually engage the customer in the ExperienceuProvide more
44、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 BenefitsPage-42Quick wins:X factor program
45、s Page-43uThe 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 satisfactionX Fac
46、tor SituationPage-44uThe 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 Lifestyle Progr
47、amsu Congratulatory Mailings to 3+BMW OwnersX Factor InitiativesPage-45Q1Q2Q3Q4CPO ProgramOwner ReferralCar BirthdayLaunchPlus improved reporting,query developmentand a half dozen new ideas to be developed and implemented during the yearX Factor:something new every quarterPage-46uIdentify ways to bu
48、ild relationships 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
49、 are looking foruLive chat support by femalesuDevelop a network of female sales repsX1 Womens ProgramPage-47uIdentify households that are prime prospects to purchase a second BMWuAnalyze multiple purchase householdsuTarget groups most likely to purchase a CPO vehicleuHouseholds with teenagers or you
50、ng adultsuIdentify seasonality graduation,etc.uTest the program on current BMW owners,then roll out to prospectsX2:Certified Previously Owned ProgramPage-48uIdentify 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
