1.
Data-Driven Marketing:
Five Insights
Mark Jeffery
Senior Lecturer of Executive Education, Kellogg School of Management
and Founder, President and CEO, Aquimo www.aquimo.com
mjeffery@kellogg.northwestern.edu
© Mark Jeffery 2014, All Rights reserved

2.
Data-Driven Marketing:
Five Insights
3/13/20152

3.
Data-Driven Marketing:
Five Insights
Your challenges:
• I don’t have the right metrics?
• It’s not that I have too little data, I have too
much data?
• I don’t have the time or the resources to apply
data-driven marketing?
• I don’t know where to start?
• I’m not sure what will have the most impact?
3/13/20153

4.
Data-Driven Marketing:
Five insights
1. The marketing divide
2. Big-data analytics works for Big and Small
Companies
3. How to create the “wow that’s exactly what I
need!” effect
4. All customers are not equal: Value based
marketing
5. How do you do it? Data mining for bottom
line impact
3/13/20154

5.
Data-Driven Marketing:
Five insights
Source: Lucas Films

6.
Data-Driven Marketing:
Five insights
3/13/20156

7.
Data-Driven Marketing:
Five insights7

8.
Data-Driven Marketing:
Five insights
3/13/2015 8
• UK's second-largest food retailer
– More than 400 stores, serving over nine million customers
– 10 million transactions per week, 200 million items of data,
75,000 SKU’s
• Segment the market
– 10 segments based on spending and foods selected
– ‘Quality oriented’ to ‘less affluent family’
• EDW technology enables accurate profiling of customer
mix for each store
– Key segment; ‘foodies’ – passionate about food
• 21% of customers and 24% of spend
• Geographic specific – 70% of some London branches are
foodies, only 6% in parts of West Midlands
– Stores remodeled and customized based upon these data
– 75,000 SKU’s analyzed: 30,000 SKU’s contribute < 1%
• Rationalization based on customer profiles for each store
• Results
– Overall sales increase of 12%
– 14,000 SKU’s are candidates for delisting = £12 million of
purchasing spend that can be shifted to bestsellers

9.
Data-Driven Marketing:
Five Insights
3/13/20159

10.
Data-Driven Marketing:
Five Insights
3/13/201510

11.
Data-Driven Marketing:
Five insights11

12.
Data-Driven Marketing:
Five insights
3/13/2012
• Weekly Scoring of 14 million
customers
• Targeted email marketing based
upon propensity model
• Not more than one Email Sent to a
customer per week
– If opened or clicked may receive
an email the next week.
– If no response wait 4 weeks to
send another email
• Results
– 29 – 50% increase in take rates for
all Email campaigns
– 20 – 40% more email
subscriptions compared with the
previous year without targeting

13.
Data-Driven Marketing:
Five insights13

14.
3/13/20
Source: Mercer Management Consulting
0% 20% 40%
-$5,000
$5,000
$15,000
$20,000
$0
100%60% 80%
$10,000
Customer
LTV
($)
% of Customers 5.2% of customers
have negative LTVs
Lifetime Value (LTV) Distribution of Existing Wireless Customers
18% of customers make up 50%
of total portfolio value
Customer A has an
expected LTV of $10K and
is a mobile manager:
retain her
A
Customer B has an
expected LTV of $800 and
is a soccer mom: cross-sell
long distance, DSL
B
C
Customer C is unprofitable -
pays late: increase late fees or
encourage pre-paid service
14

15.
Data-Driven Marketing:
Five insights
Accounts (In order of CLTV from high to low).
ProjectedCLTV
…and not
spend any
resources on
these.
How can we
keep these?
Total churn rate is approx
25%. This is a BIG
opportunity.
Strategy: Acquire, retain and grow profitable
customers through analytic marketing
3/13/201515
Value Based Marketing:

16.
Data-Driven Marketing:
Five insights16

17.
Results: 30% reduction in churn
20X improvement in profitability of retained customers

18.
Data-Driven Marketing:
Five insights
1. The marketing divide
2. Big-data analytics
3. “Wow that’s exactly what I need!”
4. Value based marketing
5. Data mining for bottom line impact
3/13/201518

19.
Data-Driven Marketing:
Five insights