1. 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
M\S Database Marketing
The DMA 84th Annual
McCormick Place, Chicago
Tuesday, October 30th 2001 10:00 AM – 11:15 AM
2. 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 togetherHow brand marketing has evolved
3. BMW customers want:
A realization of the brand promise
Performance, safety, technology, innovation
Recognition
Service
Information
Convenience
HelpfulnessBMW Buyers Not Necessarily Driven by Price
4. 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
5. 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
6. 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 BMW’s place in its customers’ lives by identifying which households are good targets for additional BMW purchases Situation Analysis
7. 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 pointsBMW Situation II
8. 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
9. 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 customerBMW Database Marketing Goals
10. 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 GroupsHow BMW measures return on investment
11. 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 purchasesControls and Measurement
12. 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
13. Relationship Marketing Strategy
14. 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 ExperienceThe Database
15. 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
16. 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 information exchanges
Increase owner loyalty and customer acquisition rates
Strengthen BMW brand perception at the individual customer levelBMW Relationship Marketing Objectives
17. Consumer Communications
Welcome Kit
Loyalty Communications
Prospect Prioritization/Extending the Dialogue
BMW Magazine Enhancements
BMW Owner’s Circle
Financial Services Programs
Credit Card & Banking Customer Acquisition
Cross Sell and Up Sell Marketing
Opportunistic “Quick Win” ProgramsCore Communications Program
18. The Owner Welcome Kit
19. A static kit
Information on
BMW, the Brand
BMW, the Company
BMW, the Products
It welcomed people to the brand, but offered no real taste of the BMW ExperienceThe old welcome kit was:
20. A personal welcome kit – that owners realize was created just for them
It arrives within the first 30 days
It is a dialogue opener, an invitation to the BMW experience that extends over a full year
Each of the kit pieces enhance your perception of the BMW Brand and the Experience
Multiple calls to action which lead you deeper into the Experience
It inherently fosters the collection of information needed for further relationship dialogueThe new BMW welcome kit
21. Weekly feed of new owners from the database
Rapid record cleanup for mailing
Weekly fulfillment of corrected names, addresses and data to the welcome kit program
Monthly maintenance of the database which supports all owner
and prospect
communicationsThe Database Supports the Welcome Kit
22. Task: Provide individual customer data for personalized welcome kit fulfillment
Strategy:
Provide new owner personalized fulfillment information on a weekly basis
Recover key information requested
Maintain owner files based on collected information for future programs
Identify customers by model, financial status, and preparatory segmentation (i.e. loyalty, activity, etc.)Welcome Kit Fulfillment Process
23. Loyalty and Owner Communications
24. BMW customers are fiercely loyal to their brand
Loyalty can be measured: it is the repurchase rate
Successful loyalty is a two way street
Customer loyalty can be strengthened by relevant personal communications
BMW Loyalty initiatives cover the entire ownership experience
Welcome Kit, Newsletters, BMW Magazine, Multiple Vehicle Owner programsThe Loyalty Situation
25. Increase BMW profits through:
Increased repurchase by existing owners
Increasing the number of BMW’s per household
Increased sales of BMW previously owned vehicles
Increased use/purchase of BMW FS products
Each program effectiveness measured by control groups:
Control Group: Owners who are not sent the communications
Test Group: Owners who get the communicationsOwner Communication Goals
26. General Goals:
Immersion in the BMW Experience
Promotion of Owner’s Circle
Purchase of BMW accessories
To 3 and 4 year BMW owners. Goals:
Increase the repurchase rate
Multiple BMWs in each household
Widespread use of BMW Financial Services products
To new BMW owners, Goals:
Purchase BMW financial services products
Capture information about their preferences, lifestyles, automobile interests, etc. useful for further dialogLoyalty Building Newsletters
27. Ongoing collection of news and information of interest to BMW owners
Owner surveys to determine preferences for:
News, information, and topics
Communication Channel (email or print)
Frequency
Begin with a printed newsletter to gather email addresses
Move to email newsletters as quickly as possible
Multiple offers to generate owner response
Promote the use of Owner’s CircleNewsletter Strategy
28. New products
BMW awards
Sports stars that drive BMWs
Ratings by leading car magazines
Why the BMW engines are superior
The history of BMW
Event calendar
Magazine reprints
Sponsorships
BMW Brand ValuesRoadside Assistance
Servicing requirements
BMW Insurance
BMW credit cards
BMW Accessories
Driving Events
BMW trade in prices
BMW Owner Clubs
Owner’s Circle
World news featuring BMWNewsletter Content
29. BMW Magazine
30. BMW publishes a high-value magazine to its owners in the first two years after their purchase
Because of its universal distribution, the magazine can be more than a magazine
It can be a data collection tool for further personalized communicationsMagazine Strategy - Before
31. Capture additional information on customers
Email Addresses
Purchase Intentions: owners identifying themselves as entering the purchase cycle
Allow BMW owners to purchase merchandise
Provide direction to BMW Online Store for purchase
Push registration on Owner’s Circle
Each program effectiveness measured by control groups:
Control Group: Owners who are not sent the communications
Test Group: Owners who get the communicationsMagazine Strategy Today
32. Extending the Dialogue – Prospect Messages
33. Increase prospect conversion to sell more BMW automobiles
Provide a steady flow of “qualified” leads to BMW Centers
Make communications interactive
Continually improve the conversion rates by better prospecting
Measure the conversion rate by Center, Region, Prospect Lifestyle, IncomeGoals of the Prospect Management System
34. Prospects developed from all contact sources:
Telephone, Direct Mail, Auto Shows, Events, Internet
Rapidly qualified and scored
Centers receive qualified leads electronically within 48 hours of receipt
Prospects get BMW message within 48 hours
Every lead tracked electronically, with daily, weekly, & monthly reports for BMW management on the webAutomated Database Processes
35. Scoring models for incoming prospect requests determine priority
Focus on priority A & B prospects
Moving to lower priorities as the systems proves itself
Fully integrated creative implementation in both electronic and paper media as well as events
Test scoring models against anticipated response and adjust as needed
Utilize a 5% control group for a period of one year for reporting comparisonsTesting and Implementation Strategy
36. Sales
Response
To electronic vs. paper
Predetermined vs. Relational
Offers and incentives
Modeling success
% prospect conversion (historical)
Media preference automated system
Cost of program
Cost of salesMeasurements of the Prospect Program
37. Measuring success through the dealersScored leads sent to each dealer
Conversions are measured monthly
Each dealer conversation ratio calculated
Program success measured by comparing dealer to dealer conversion ratio
Dealer, Market, Region and National average conversion ratios create measurable benchmarks
Above average dealers manage their leads better
38. Direct Mail and E-mail integrated communication plan
Alternating content delivery mediums
Each reinforcing the one that came before it
Use of database information to drive customization and relevance
Each communication introducing a new piece of the BMW Experience
All communications tie in to web activities
Integration with off-line and online marketing activities
Prospects given the opportunity to opt-out at any point
Prospects removed from program if they purchase a vehicleProspect Program Communications Strategy
39. Immerse and invite the prospect into the BMW Experience
Reinforce the initial contact with BMW
Educate as to the depth of the Brand
Products and Services
Point the prospect towards a test drive and the dealer
Reinforce core marketing communication objectives about:
Brand Values
Brand Heritage
Product attributes
The BMW Ownership ExperienceProgram Communications Objectives
40. New products
BMW in the News
BMW Technology and Innovation
BMW Safety
The history of BMW and BMW Brand Values
Event invitations
Test drive incentives
BMW gifts
Magazine reprints
BMW Financial Services productsProgram Content Objectives
41. Sell more cars by:
Immediate Scoring of Prospects
Immediate electronic Center notification of leads
Immediate communications with the prospect
Continually engage the customer in the Experience
Provide more information on the depth of the Brand
Reduce the cost per car sold
Provide Management with accurate & timely knowledge of the prospect and sales process
Increase the overall effectiveness of future prospecting programs by learning from this one
Prospect System Benefits
42. Quick wins: X factor programs
43. The BMW Database offers a huge opportunity to utilize information to refine BMW programs
X Factor programs are built on data mining, and deliver:
Highly effective marketing programs
Incremental revenue opportunities
Low cost per sale
Increased customer/prospect contact and satisfactionX Factor Situation
44. The Loyalty and Prospect Programs, combined with the database, offer great potential for creative, interactive X factor programs:
Contests
Programs for Women/Minorities
Special Events
Referral Programs
Certified Previously Owned Cars
Second BMWs in every home
Lifestyle Programs
Congratulatory Mailings to 3+ BMW OwnersX Factor Initiatives
45. Plus improved reporting, query development
and a half dozen new ideas
to be developed and implemented during the yearX Factor: something new every quarter
46. Identify ways to build relationships with female owners:
Bring them to the Brand, and keep them longer
Appeal to their unique needs
Recognize the purchasing power and influence that automotive marketers typically ignore
Provide tools that reduce pre-dealer visit anxiety
Tailored communications that highlight what women are looking for
Live chat support by females
Develop a network of female sales repsX1 Women’s Program
47. Identify households that are prime prospects to purchase a second BMW
Analyze multiple purchase households
Target groups most likely to purchase a CPO vehicle
Households with teenagers or young adults
Identify seasonality – graduation, etc.
Test the program on current BMW owners, then roll out to prospectsX2: Certified Previously Owned Program
48. Identify those current owners who are most likely to purchase a new 7 Series BMW
Invite these special people to be among a small group who are allowed to preview the new 7 series
Appeal to their appreciation of inclusion by asking for their feedback and opinion
Allow them to be among the first to test drive
Notify them periodically of the status of the vehicleX3: Series 7 Launch
49. Identify those current owners who are most likely to purchase the MINI
Create a unique lifestyle message to these owners
Appeal to the early adapter
Focus on active lifestyles
Get them to preview on the web and opt in to marketing messagesX4: Mini Launch
50. Develop a program that uniquely appeals to the BMW owner
Communicate the personality of the brand
Reinforce the relationship that the BMW owner has with their car
At the anniversary of purchase, send an e-card to owners
Direct them to a micro site to get an e-birthday giftX5: Birthday Cards
51. Database provides the central focus for:
Owner loyalty communication programs
Prospect communications
Opportunistic “Quick Win” Programs
Measurement of success
Building BMW Brand LoyaltySummary: BMW has put it all together