,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 Brands 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 promisePerformance, 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,Constructors 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 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 are 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 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 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 pockets 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 database 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 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 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 Measurement,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 satisfactionIncreased 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 ever 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 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 information 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,