Realizing Kodak’s Relationship Marketing Vision QUICKSCAN Results.ppt

,Realizing Kodaks Relationship Marketing Vision:QUICKSCAN Results,December 16,1998,Todays Agenda,Introduction&CredentialsThe Strategic Role of Relationship MarketingOgilvyOnes Approach:Customer OwnershipRelationship Marketing Development CurveBest Practices:Core Competencies and RequirementsKey Observations from QuickScan ResultsNext Steps&Options,Credentials:OgilvyOne Strengths,Fresh approach to Customer MarketingDeep understanding of your BrandSeamless integrationUnrivaled Creative reputationWorlds strongest,most experienced direct marketing network,Worlds Strongest and Most Experienced Direct Network,Worldwide:1,521 employees,89 offices,43 countries,$1.2 Billion in billings*North America:425 staff,7 offices,$486 Million in billings*New York(HQ):300+staff,$342 Million in billings*,*1998 estimated billings,Seamless Integration,InformationMgmt.,Media,OgilvyOne Interactive,OgilvyOneHispana,DirectoryAdvertising,StrategicServices,Production,AccountMgmt.,Creative,DirectDesign,Client,WithinBrand TeamsBetweenDisciplinesAmongOffices,Customer Ownership Clients,GTEFordPetersonsFive BrothersAmerican ExpressIBMADPRyderPacific Bell,The Strategic Role of Relationship Marketing,Database Marketing:The Nexus of Strategic Development,The Power of Information,Focus on Customer,The Marketing Database,Relationship Management 1:1 Marketing,Not All Customers are Created EqualOr Generate the Same Amount of Value,Does the 80/20 Rule apply to Kodaks business?Where is your marketing investment being spent?,Profit Matrix Analysis:An Example,%of Customers,Profit Per Customer,%of Revenue,$2,345,$420,$150,15%,40%,25%,1%,11%,54%,Super High Value,High Value,Medium Value,Low value,34%,$10,20%,Despite the diversity of direct marketing applications they all have a common pre-requisite.,The Role of Direct Marketing/Relationship Management,Develop a cost effective dialogue with individuals rather than mass groupsDeliver advertising messages,propositions and brand values at a personal levelEmploy tools to call consumers to actionChange or modify attitudes and behaviorBe test driven-no huge acts of faithBe uniquely accountable,ie.Be evaluated by response,sales and positive attitudinal shift,Differential Marketing Strategy,Switch,Monitor,Retain,Upgrade,Loyalty,Value,Low,High,High,Marketing TasksIdentify individualsUnderstand their behavior and current/potential valueBuild relationshipsEngineer demandRefine the relationship marketing process based on past results,Role of a DatabaseCollection&managementAnalysisUtilization-Selections from database to target qualified and quantified opportunitiesEvaluation of results,DatabaseRelationshipMarketing,The Role of a Database in the Relationship Marketing Process,The database is the principle means by which these processes are managed and integrated to form the“engine”of successful relationship management,This is not“one off”selling.It is a long-term commitment to developing profitable relationships&sustained sales over time.,Summary:The Strategic Role of Relationship Marketing,Develop a clear actionable understanding of your customers behavior,motivation and valueHarness this understanding to develop a dialogue with customers which is:RelevantTimelyFocused on quantified and qualified opportunitiesTest alternative communication strategies,evaluate results,achieve continuous improvement and measure the return on your investment over timeThereby,build profitable relationships with your customers,Kodaks Future Vision for Relationship Marketing,Create knowledge of all professional photographers and labs regarding their current value,potential value,loyalty,and promotional responsiveness.Access the data quickly for marketing purposes.Invest more time and resources in high value customers.Establish best practice for industry relationship marketing.Address each customer in the medium which is most effective with them,be it direct sales,direct mail,teleservices,internet,etc.,Kodaks Future Vision for Relationship Marketing,Create a learning environment that tracks marketing activity and allows for continual improvement testing.Ultimately,we wish to help develop a marketing landscape monitor that every member of the brand team and Kodak can utilize to make informed decisions,Customer Ownership,OgilvyOnes Approach-Customer Ownership,CustomerOwnership,Customer has morevalue to Kodak,Kodak has morevalueto Customer,Mission:Growing our clients customer equity in volume,value,and goodwill,OgilvyOnes Approach-Customer Ownership,OgilvyOne has established a disciplined approach for assisting organizations in understanding the economics of existing consumer relationships within the context of their category spend.This approach,that we call Customer Ownership,begins with a QuickScan,which is a combination of internal interviews and data analysis.The QuickScan phase is a period of discovery that enables research-driven strategy development.,OwnershipPlanning,CommunicationsModel,Delivery,Learning,ReadinessState,Gap ClosingStrategy,VehicleCreation,MarketingInfrastructure,Customer Value Creation,OgilvyOnes Approach:Customer Ownership,QuickScan,Customer Ownership-Fill the Gaps,Prospect,Market,Customer,Cross-Sell,RetentionGap,SalesGap,AcquisitionGap,Suspect,Best Practices Benchmarks,Marketing Development Curve,Sales&Response,CustomerProfitability,ValueOptimization,Stage 1Product Focused,Stage 2Customer Focused,Stage 3Relationship Focused,Where is Kodak Professional on this curve?,WalmartAmerican ExpressFederal Express,BMG Music ClubLL BeanJ.Crew,Proctor&GambleColgate,Marketing,Analytics,Database,Organization,Toolset,Product,M,A,O,T,D,Customer,M,A,O,T,D,Relationship,M,A,O,T,D,Consolidated view of transactions,Customer view,contact&responsehistory,Entire relationshipacross all points ofcontact,Stage 1Product Focused,Stage 2Customer Focused,Stage 3Relationship Focused,Database,Query and reporting tool,Data mining and campaign mgmt,Integration&auto-mation for high data volumes&complex analyses,Toolset,Reporting,Identification,Segmentation,Prediction&Campaign,Value Optimization,Analytics,Products and Events,Customer Lifestage,Behavior Driven,Marketing,Small group of champions with unilateral skill,Cross-department synergy with DBM understanding,Customer-centric Business Model,Organization,Core Competencies,Best Practices Benchmarks:8 Key Findings,1.Relationship Marketing=Relationship Management2.A uniform view of ingredients for success in RM Program:Culture and management support;Resource allocation both personnel Program structureInternet3.RM exemplars are those companies with transactional interaction with customers.These firms have moved beyond just communication and are transacting with their customers through relationship marketing.,Best Practices Benchmarks:8 Key Findings,4.All firms report significant ROI or share of wallet gains over time,far in excess of what would have been realized without the adoption of RM5.A robust marketing database serving sometimes hundreds of end-users,is of primary importance to their RM successes6.Mature RM practitioners have moved beyond communicating“products in search of people”and are anticipating and facilitating“people in search of products”,Best Practices Benchmarks:8 Key Findings,7.Customer participation in“opting-into”their RM program,and letting the customer direct the marketing efforts sent to them.The key to connecting is through the cultivation of enabled and empowered customers.8.Internet.Most companies are unsure the exact role the Internet will play but agree:It is about transacting Vs.publishingIt is about encouraging customers to interact with the company,Requirements for Implementing RM,Established marketing visionQuantifiable goalsSenior management commitmentCentralized database management that records all activityStakeholder participation,Defined Roles and ResponsibilitiesSome kind of internal group or“force”that makes the rules:They may also“own”the customer and/or“own”the processGatekeeper implements/ensures complianceProcess for creating contact strategy(who gets what when)Occurs regularly,Requirements for Implementing RM,The QuickScan Results,Assignment Goals,We proposed using Customer Ownership,OgilvyOnes proprietary strategic approach,to determine the opportunity to increase Kodaks customer equity and return on direct marketing investment with Professional Photographers and their Labs.The first phase of this process included the QuickScan analysis to examine K-Pros marketing efforts,and to identify a value based segmentation methodology that could be used to devise customer management and messaging strategies,Key Project Contacts,Al PolitiRetail Portrait Segment ManagerKodak Professional DivisionDavid LewisBusiness ResearchProfessional ImagingDavid BaroneDatabase Marketing Manager-Inside SalesKodak Professional DivisionKevin RupertDirector,WW Marketing Planning,Brand Management,Information Sources,Five relevant database sources of professional photographer and/or lab informationCIWPro-RewardsPromise of ExcellenceVASRFinancial databasesA number of market research sources of informationNielsen panel dataA variety of project focussed surveysBrand equity studiesA recent Portra brand tracking study,Information about Photographers,Key FindingsSmall base of professional photographers(40,000)Kodak has a high market shareSmall percentage of photographers generate much of the revenue(judgmental observation)Successful photographers go to larger labs(judgmental observation)A comprehensive database of photographers already existsA loyalty program Pro-Rewards is already in place,ImplicationsSmall base ideal for Relationship Marketing Easier to start building and maintaining loyaltySupports argument for differential treatmentEasier to target high value photographers through lab databasesValuable starting point for identifying high value customersSolid foundation from which to evolve a successful relationship marketing program,Information about Labs,Key FindingsSmall base of labs(about 1100)Kodak has a high market shareLabs believe that Kodak is in a superior position to help realize growth objectives(judgmental observation)Small percentage of labs generate much of the revenueA comprehensive database of labs already exists,ImplicationsSmall base ideal for Relationship marketingEasier to start building and maintaining loyaltyRelationship Marketing is easier for the market leaderThis is critical for Relationship Marketing to be successfulValuable starting point for identifying high value customers,Research Limitations,LimitationsNo segmentation initiated,and therefore no focus on high value segmentsNo information about efficacy of existing programs:little or no data mining performedLack of co-ordination between individual research studies(Nielsen,brand tracking etc)No data on drivers of behavioral or emotional loyalty for Kodak and competition,ImplicationsPossible wastage of marketing dollars on low value customersPaucity of learnings may make existing programs inefficientLittle strategically leveragable information availableMakes it difficult to design targeted marketing programs,Database Limitations,LimitationsNot easily queryable”Updated at irregular intervalsSales/value information is not available for all records;only available for top customersOverwrite existing information with updatePromotional history/campaign management feature not available,ImplicationsNot practical as an effective marketing databaseMakes planning and analysis less reliableImplementation of a one-to-one relationship marketing program becomes difficultHistorical trend analysis is not possibleEssential for measuring efficacy and ROI of relationship marketing programs,Differential Marketing Analysis,Differential marketing segments consumers on the basis of the amount of profit they are capable of deliveringNielsen data was used in the analysisA panel of 1,413 professional photographers were used for analysis Each of photographer was placed into one of 9 segments according to:Overall film usagePercentage of Kodak brand film used,Differential Marketing Analysis,#of Photographers#of Rolls,High(Top 20%),3,240242,801,Low(50%SOR),3,360175,396,Medium(50-99%SOR),2,560201,396,High(100%SOR),Medium(Middle 30%),5,320181,779,2,84093,353,4,120138,125,Low(Bottom 50%),6,44085,046,4,28059,839,8,84098,488,V A L U E,L O Y A L T Y,Differential Marketing Analysis,%of Photographers%of Rolls,High(Top 20%),8.1%19.0%,Low(50%SOR),5.9%13.7%,Medium(50-99%SOR),6.4%15.8%,High(100%SOR),Medium(Middle 30%),13.2%14.2%,7.1%7.3%,10.2%10.8%,Low(Bottom 50%),16.2%6.7%,10.7%4.7%,22.2%7.7%,V A L U E,L O Y A L T Y,20%of High Value Photographers account for 50%of usage,V A L U E,L O Y A L T Y,Differential Marketing Analysis,A total of 36.2MM rolls are purchased annually by these 40,000 photographers,Low,High,3,2406.842,111,Low,2,3604.992,113,Medium,2,5605.732,238,High,Medium,5,3205.14967,2,8402.65934,4,1203.92953,6,4402.40373,4,2801.68394,8,8402.79316,#PhotographersRolls per Year(MM)Avg.Rolls/Yr per Photog.,Differential Marketing Analysis,A 15%cell switch will move 2,000 photographers Resulting in:-915K more Kodak rolls bought per year;$2.3 million in incremental revenues(assumes$2.50 per roll of film),V A L U E,L O Y A L T Y,Low,High,3,2406.842,111,Low,2,3604.992,113,Medium,2,5605.732,238,High,Medium,5,3205.14967,2,8402.65934,4,1203.92953,6,4402.40373,4,2801.68394,8,8402.79316,#PhotographersRolls per Year(MM)Avg.Rolls/Yr per Photog.,15%,15%,15%,15%,QuickScan-Outcome Scenarios,QuickScan for Readiness,Information,Infrastructure,Ready!,Gaps,Complete,Distributed,Integrated,Key Data capture,Review Processes,Key Conclusions,Kodak should progress with the relationship marketing effortKodak must realign and enhance systems,strategies and resources to take on this taskThere is a need to go on to the next step of Customer Ownership PlanningIs Kodak committed to take on this challenge?,Next Steps:Options,Option IComplete data gathering&analysis for QuickScan assignment working closely with key players to locate necessary dataOption IIFinish QuickScanMove on to Phase II of Customer Ownership PlanningOption IIIUndertake in-depth benchmarking engagement focusing on key areas of competency to achieve world class status in database marketingDeliverables:Strategic Blueprint and Strategic RecommendationsBest Practices scorecard,Next Steps:Options,Option IVMaintain current marketing strategy with Professional photographers,Appendices,Consulting Team,Charles DOyly,Group Account DirectorCharles is Group Account Director for Digital Brands at OgilvyOne.He has business responsibility for GTE,K,Ameritrade,Petersons Publishing,Ford Credit,AIG,Kimberley Clark&eChores.Prior to joining OgilvyOne,Charles was Director of Interactive Research at Yankelovich Partners where he was responsible for publishing studies on the behaviors and attitudes of the online consumer to help Fortune 500 marketers develop online business strategies.Charles has been a regular speaker at marketing conferences in t