,Integrating All Direct Marketing Channels to Build Customer Loyalty A BMW Case Study Kay Madati, Relationship Marketing Manager BMW Arthur Middleton Hughes, VP for Strategic Planning MS Database Marketing The DMA 84th Annual McCormick Place, Chicago Tuesday, October 30th 2001 10:00 AM 11:15 AM,1950 - 2000 Brands built by mass advertising 1985 - 2000 Database Marketing arrived, but not integrated with mass advertising. 1996 - 2000 The Internet arrived, but not integrated with DBM or mass advertising 2001 BMW brings them all together,How brand marketing has evolved,BMW customers want: A realization of the brand promise Performance, safety, technology, innovation Recognition Service Information Convenience Helpfulness,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, Software Creators People who understand strategy Build loyalty and repeat sales You 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 customer Deliver short term, incremental revenue through opportunistic marketing programs Increase customer loyalty through understanding and ability to deliver relevant, timely communication Secure 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 measurement The BMW Report Center monitors communications and response from prospects and customers Measurement includes cost per response and cost per sale BMW now has the ability to view prospects as well customers in its universe This allows BMW to view the full shopper-owner cycle from first point of contact, through sale and cross sale The new marketing database contains a broad range of information on the BMW consumer Campaign, 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 opportunities Which 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 build Pay for database maintenance going forward Increase the revenue per customer over time Increase the profit per customer Increase the lifetime value of the combined BMW automobile and financial services customer,BMW Database Marketing Goals,Consistent measurement and enhancement of BMW marketing programs Ability to prioritize prospects and customers based on their likelihood to buy Identification of “low hanging fruit” programs that can be quickly implemented to generate revenue in the short term Refinement of customer communications Testing results against Control Groups,How BMW measures return on investment,Control groups measure the effectiveness of each program Non-mailed groups that are measured against the mailed groups Reports on the BMW Report Center provide a consistent form of measurement Cost per lead, response and sale measurement Cross-penetration of product purchases,Controls and Measurement,Increased communication effectiveness Integrated database used by all groups Increased efficiency The right information to the right customer at the right time Reduced communication expense Fewer pieces mailed with higher effectiveness Increased customer participation Increased customer satisfaction Increased corporate and center profits A 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 before Powerful tools to support BMW loyalty and prospect conversion programs Automated communication that supports the Owner Experience,The Database,Increase customer loyalty Increase prospect conversion to sales ratio Increase vehicle sales through existing customers Maintain existing BMW household records Keep communication costs down while increasing effectiveness Develop 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 customers Systematic use of customized information to attract and retain customers Facilitate mutually beneficial and relevant info