MKTG162: Chapter 5 - Marketing Analytics

What are the steps of one-to-one marketing?

1. Identify customers and get to know them in as much detail as possible 2. Differentiate among these customers in terms of both their needs and their value to the company 3. Interact with customers and find ways to improve cost efficiency and the effectiveness of the interaction 4. Customize some aspect of the goods or services that are offered to each customer, treating each customer differently based on previous interactions

What are three potential competitive advantages that Big Data could provide?

1. Identifying new opportunities through analytics that yield greater return on investment (ROI) on marketing efforts 2. Turning insights gained into products and services that are better aligned with the desires of consumers 3. Delivering communications on products and services to the marketplace more efficiently and effectively

What three critical customer-related metrics does the CRM identify?

1. Share of Customer 2. Customer Lifetime Value (CLV) 3. Customer Prioritization

What are five examples of digital marketing channels?

1. Social Media 2. Digital Ad Networks 3. Short Message Service (SMS) 4. Search Engines 5. Email

What are the primary data types for data mining?

1. Structured data 2. Unstructured data

Explain two social media sources of Big Data.

1. Web scraping is the use of computer software to extract large amounts of data from websites 2. Sentiment analysis is a process of identifying a follower's attitude (positive, negative, or neutral) toward a product or band. These advanced techniques analyze and map millions of posts on Facebook, Twitter, and other social media platforms to see what people say about products and services.

What are five examples of metrics?

1. click-through rate (CTR) 2. conversion rate 3. cost-per-order 4. margin on sales 5. churn rate

What are two business models for digital marketing (i.e. ways to advertise that allow the user to take specific actions)?

1. cost-per-click 2. cost-per-impression

How many GB are in 1 TB?

1024 GB = 1 TB

What is anticipatory shipping?

A data-driven system of delivering products to customers before they place an order, utilizing predictive analytics to determine what customers want and then shipping the products automatically

How does Amazon use anticipatory shipping?

A firm can send the product to a closer shipping hub, and then customer can receive it much easier once they realize they want it.

Explain customer retention and loyalty.

A firm identifies big-spending customers and targets them with special offers and inducements other customers won't receive to reward them for their loyalty and to increase their likelihood of retention.

Explain customer acquisition.

A firm uses the demographics information derived from membership forms to identify which consumers respond best to specific offers. Then, they send these offers to noncustomers of the same demographics.

What is marketing analytics?

A group of technologies and processes that enables marketers to collect, measure, analyze, and assess the effectiveness of marketing efforts

What is the click-through rate?

A metric that indicates the percentage of users who have decided to click the advertisements in order to visit the website associated with the advertisement

What is a hacker?

A person who illegally gains access and sometimes tampers with information in a computer system

What is Big Data?

A popular term to describe the exponential growth of data--both structured and unstructured--in massive amounts that are hard or impossible to process using traditional database techniques.

What is marketing control?

A process that entails measuring actual performance, comparing this performance to the established marketing objectives, and then making adjustments to the strategies or objectives based on this analysis

What is marketing automation?

A set of systems and technologies that an organization uses to put in place a set of rules for handling different processes in an automated fashion, including collecting and processing data and execution of customer-oriented actions

What is a landing page?

A single page on a website that is built for a particular direct marketing opportunity

What is emotion analysis?

A step beyond sentiment analysis; it is a sophisticated process for identifying and categorizing the emotions a follower possess in relation to a product or brand by assessing the content of that communication

What is Search Engine Optimization (SEO)?

A systematic process to ensure that your firm comes up at or near the top of lists of typical search phrases related to your business.

What is Customer Relationship Management (CRM)?

A systematic tracking of consumers' preferences and behaviors over time to tailor the value proposition as closely as possible to each individual's unique wants and needs

What is Retail Link?

A vendor management system that Walmart uses to provide real-time purchase data to suppliers, making it possible for them to track purchase data for products in real time.

What is the cost-per-impression?

Advertiser is charged each time ad shows up on user page Less expensive, but not as easy to measure

What is a cyberattack?

An attack to gain illegal access to a computer or computer system for the purpose of causing damage or harm

What is the cost-per-click?

An online ad purchase in which the cost of the ad is charged only each time an individual clicks on the ad and is directed to the Web page to which the marketer linked within the ad

This is the identification, interpretation, and articulation of patterns within data that one or more groups view as meaningful.

Analytics

What are touchpoints?

Any point of direct interface between customers and a company

This refers to the broader concept of machines being able to carry out tasks in a way that humans would consider "smart."

Artificial Intelligence (AI)

This is the top-executive team of a firm, named for the "chief" titles of each officer.

C-Suite

The _____ is the leading voice of all things customer-related.

CCO

_____ calculations can be complex because they factor in changes that occur in the relationship with a customer from one period of time to the next.

CLV

One-to-one marketing depends on _____ since it allows a company to identify its best customers, stay on top of their needs, and increase their satisfication.

CRM

This is a system that uses computers, specialized software, databases, and the Internet to capture information at each touchpoint.

CRM

What new C-suite role has been created due to a focus on CRM?

Chief Customer Officer (CCO)

What is the conversion rate?

a metric that indicates the meeting of a predefined goal associated with the consumer's interaction with that page that results in a conversion, such as a product purchase, signing up for a mailing list, or the decision to become a follower of the company via social media

There is a lot of money to be made by selling _____ space to organizations.

advertising

What two things can predictive analytics be used for?

anticipatory shipping customer defection

If you compare the _____ from each channel against the _____ from each channel, it becomes clear which provides the site with the most value.

average cost per customer transaction; average value of the customer transaction

Many firms look to increase share of _____ instead of share of _____.

customer; market

Each action taken online leaves a _____ _____, and these, when all added together, have the potential to yield valuable insights.

digital footprints

What are SMS?

digital messages delivered to mobile phones as text messages

Internet data can be _____ to analyze using traditional approaches.

hard

This occurs when a marketer is buried in so much data that it becomes paralyzing to decide which of it provides useful information and which does not.

information overload

Digital marketing often requires the use of technology platforms as an _____.

intermediary

This is the application of Artificial Intelligence based on the idea that machines can and should have access to data and engage in learning for themselves.

machine learning

It is _____ practical to use too many metrics at once to measure marketing effectiveness.

not

What are data warehouses?

server farms that store huge amounts of information that marketers need for data mining and examining purchasing patterns in order to yield insights about customer preferences

What is data mining?

sophisticated analysis techniques to take advantage of the massive amount of transaction information now available

What is CRM about at its core?

Communicating with customers and about customers being able to communicate with a company "up close and personal"

What is unstructured data?

Contains nonnumeric information that is typically formatted in a way that is meant for human eyes and not easily understand by computers

What is the difference between cost-per-click and cost-per-impression?

Cost-per-click is more expensive since they demand a higher level of interaction from the user, but they are easier to track. Cost-per-impression is harder to measure but is less expensive.

This is a strong commitment by firms to protect digital data from destructive forces and from the unwanted actions of unauthorized users.

Cybersecurity

What can a failure to protect data result in for firms?

Damaged customer confidence and reputations

This person uses skills in mathematics, computer science, and trend analysis to explore multiple, disparate data sources to discover hidden insights that will provide a competitive advantage.

Data Scientist

What is become an increasingly important source of competitive advantage for firms that want to leverage Big Data?

Data Scientists

What is the benefit of digital marketing regarding performance?

Data comes in instantaneously, allowing marketers to determine their performance in the short and long term.

_____ _____ is the process in which analysts sift through Big Data to identify unique patterns of behavior among different customer groups.

Data mining

_____ _____ enables marketers to get a better sense of the specific _____ they receive when they use a specific channel.

Digital marketing; ROMI/ROI

What are a few examples of nondigital, traditional marketing channels?

Direct mail, TV advertisements, billboards, newspapers, etc.

What does being able to determine the effectiveness of digital marketing depend on?

Having a measurable goal that can be tracked and measured, such as the completion of a transaction or the submitting of information

This describes a system in which everyday objects are connected to the internet and in turn are able to communicate information throughout an interconnected system.

Internet of Things (IoT)

What does marketing analytics do?

It takes Big Data and makes sense of it for use in marketing decision making

What is predictive analytics?

It uses large quantities of data within variables that have identified relationships to more accurately predict specific future outcomes

Explain commercial entity sources.

Many companies today collect data in large quantities to sell to organizations that can derive value from them. - credit card purchase data - supermarket scanner data It could be a secondary of primary source of revenue for a firm.

This is short for "market technology" and is commonly used to denote the fusion of marketing and technology. It's focused on the application of marketing through digital technologies.

Mar-tech

What do ethicists make a strong case about regarding data collection?

Marketers have a high ethical and moral obligation to exhibit full transparency with customers about how, when, and why data are being collected form them and the intended uses of those data

By applying _____ _____, an organization can transform all the available CRM data into a more complete picture of each customer as well as each marketing channel to better understand where to make future investments or how to adjust current marketing campaigns.

Marketing analytics

This is a statistical model used to estimate CLV that describes a sequence of possible events in which the probability of each event depends only on the state attained in the previous event.

Markhov chain modeling

Why is digital marketing becoming increasingly important for marketers?

More people are spending time online It is much easier to track consumer behavior in response to digital marketing actions

What is customer prioritization?

Not all customers are equal, at least, not in terms of profitability. CRM systems enable marketers to identify priority customers and customize communications and special offers accordingly. For example, a firm may emphasize personal selling for contacting high-volume customers, while using direct mail or telemarketing to communicate to low-volume customers.

What does the CRM trend facilitate?

One-to-one marketing

What is the customer lifetime value (CLV)?

Represents how much profit a firm expects to make from a particular customer, including each and every purchase they will make now and in the future.

This enables a company to grow sales and profits at a lower cost, relative to new customer acquisition.

Share of customer

Explain customer abandonment.

Sometimes a firm wants customers to take their business elsewhere because servicing them actually costs the firm too much. This is known as "firing a customer." There are six warning signs for troubling customers: 1) unreasonable demands 2) unresponsive 3) want everything for nothing 4) slow to pay 5) don't listen 6) lack of basic respect

What are marketing metrics?

Specific measures that help marketers watch the performance of their marketing campaigns, initiatives, and channels, and to serve as a control mechanism for when corrective action is necessary.

What is scanner data?

Supermarkets derive data from all the items scanned at a cash register when checking out with a loyalty card. They're sold in aggregate form to prevent identification of specific customers.

What is an A/B test?

Testing the effectiveness of a marketing asset by sending out two variations of the same message to determine if one version "pulls higher" than the other.

What is customer equity?

The financial value of all of a business's customer relationships. It is the total combined customer lifetime values.

Explain government and nongovernmental organization sources.

The government provides many types of data, from US Census results to data on the economic conditions in developing countries that allow marketers to better understand the demographics of consumers at home and the opportunities for global expansion.

What is a data breach?

The intentional or unintentional release of secure or private/confidential information to an untrusted environment

What is the share of customer?

The percentage of an individual customer's purchase of a product over time that is a single brand. This emphasizes the notion that it is easier and less expensive to keep an existing customer than to get a new one. products of a specific company / total product bought A 90% share of customer means that 9 out of every 10 products are from a specific company

What is a channel partner model?

There is a two-way exchange of information between purchasing organizations and their vendors through shared or integrated IT systems.

Explain corporate IT sources.

These are sources of data within the organization, including: - CRM Databases - Web analytic databases - Enterprise Resource Planning (ERP) databases - Attempts to make information available to everyone in an organization to avoid "silos" - Account-related databases

What does it mean that today's consumer is an omni-channel media user?

This means they get most of their information about the world from multiple sources, including computers, tablets, and phones

Explain market basket analysis.

This type of analysis develops focused promotional strategies based on the records of which customers have bought certain products.

What are digital marketing channels?

Those specific means of distribution through which digital marketing communications can be delivered to current and potential customers.

Why do many social networking sites offer advertisers access to analytic tools and capabilities?

To help them assess and optimize the performance of their marketing efforts

Explain partner database sources.

Two-way information exchange between purchasing organization and suppliers - Partnerships provide benefits to buyers and sellers - Real-time demand signals - Replace inventory with information - Fewer stock-outs

What is structured data?

Typically numeric of categorical datasets that are organized and formatted in a way that is easy for computers to read, organize, and understand

What are some organizations that have found great success with CRMs?

USAA, Amazon, Adidas, and Disney

What are four ways that the effectiveness of a nondigital marketing campaign can be more efficiently measured?

Unique promotional code Specific URL linking to a landing page QR Codes Phone Numbers

What is a digital ad network?

a company that connects advertisers to websites that want to host advertisements

What are examples of unauthorized actions?

- Cyberattacks by hackers - Data breach

What are three ethical considerations of using Big Data?

- Cybersecurity - Transparency - Should it even be used? (Facebook targeting younger kids)