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Data-Driven Marketing


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Table of Contents

DOWNLOADABLE ROMI RESOURCES XIII ACKNOWLEDGMENTS XVII INTRODUCTION XIX PART I Essentials 1 CHAPTER 1 The Marketing Divide: Why 80 Percent of Companies Don't Make Data-Driven Marketing Decisions?And Those Who Do Are the Leaders 3 The 15 Essential Marketing Metrics 7 Case Examples 9 Marketing Budgets: Key Differences between the Leaders and the Laggards 17 Using Marketing Metrics to Weather Difficult Economic Times 20 The First Step: Defining the Data-Driven Marketing Strategy 22 Chapter Insights 25 Case Examples: Best Buy, Porsche Turbo Cabriolet Launch, DuPont Tyvek NASCAR CHAPTER 2 Where Do You Start? Overcoming the Five Obstacles to Data-Driven Marketing 26 Overcome Obstacle 1: Getting Started?Focus on Collecting the Right Data and Create Momentum by Scoring an Easy Win 28 Overcome Obstacle 2: Causality?Conduct Small Experiments 33 Overcome Obstacle 3: Lack of Data?Strategies for Obtaining Customer Data 35 Overcome Obstacle 4: Resources and Tools?Build the Infrastructure for Data-Driven Marketing 39 Overcome Obstacle 5: People and Change?Create a Data-Driven Marketing Culture 44 A Road Map for Implementing Data-Driven Marketing 49 Chapter Insights 51 Case Examples: Royal Bank of Canada, Walgreens, Continental Airlines, Harrah?s Entertainment CHAPTER 3 The 10 Classical Marketing Metrics 52 Linking Marketing Activities to Metrics 53 A Balanced Scorecard for Marketing 62 Facing the B2B Measurement Challenge 67 Chapter Insights 71 Case Examples: MasterCard FIFA Sponsorship, Microsoft OEM Comarketing PART II 15 METRICS TO RADICALLY IMPROVE MARKETING PERFORMANCE 73 CHAPTER 4 The Five Essential Nonfinancial Metrics: #1?Brand Awareness, #2?Test-Drive, #3?Churn, #4?Customer Satisfaction (CSAT), and #5?Take Rate 75 Shaping Perception: Metric #1?Brand Awareness 75 Comparative Marketing: Metric #2?Test-Drive 87 Loyalty Marketing: Metric #3?Churn 91 Customer Satisfaction: Metric #4?CSAT 96 Campaign Effectiveness: Metric #5?Take Rate 99 Chapter Insights 103 Case Examples: Philips Consumer Lifestyles, Navistar America's Greenest School, Porsche First Mile, Intel, Ray-Ban, Lexus, Dental Care Partners, DSW Shoe Warehouse Downloadable Excel Templates: Churn, Take Rate CHAPTER 5 Show Me the ROI! The Four Essential Financial Metrics: #6?Profit, #7?Net Present Value (NPV), #8?Internal Rate of Return (IRR), and #9?Payback 104 Metric #6: Profit 105 Finance for Marketing Managers: Metrics #7?NPV, #8?IRR, and #9?Payback Defined 106 Return on Marketing Investment (ROMI) Framework for Management Decisions 115 ROMI for Sports Sponsorship 119 ROMI for a New Product Launch 122 Stress-Test the Numbers: Sensitivity Analysis 129 Chapter Insights 133 Case Examples: Sports Sponsorship and Web New Product Launch ROMI (Disguised) Downloadable Excel Templates: NPV, IRR, Payback, Campaign ROI, Sports Sponsorship ROI, New Product Launch ROI, Table Function Sensitivity Analysis, Monte Carlo Analysis CHAPTER 6 All Customers Are Not Equal: Metric #10?Customer Lifetime Value (CLTV) 134 Metric #10?Customer Value Defined 135 The New Marketing Strategy: Value-Based Marketing 138 Balancing Short- and Long-Term Customer Profitability 146 Customer Life Cycle Management 151 Chapter Insights 154 Case Examples: Sainsbury?s, 3M, Continental Airlines, Royal Bank of Canada, Carnival Cruise Lines Downloadable Excel Template: Customer Lifetime Value CHAPTER 7 From Clicks to Value with Internet Marketing Metrics: #11?Cost per Click (CPC), #12?Transaction Conversion Rate (TCR), #13?Return on Ad Dollars Spent (ROA), #14?Bounce Rate, and #15?Word of Mouth (WOM) 156 CPC versus CPM: Optimizing Metric #11?CPC Is the Google Innovation 157 Optimizing Sponsored Search: Metrics #12?TCR and #13?ROA 159 How Good Is Your Web Site? Metric #14?Bounce Rate 168 Changing the Internet Search Marketing Game with Attribution Modeling 172 Beyond SEM: Internet Display Advertising Impact 176 Hypertargeting Display Advertising in Social Media 178 Metric #15?Word of Mouth (WOM) Social Media Marketing Engagement 181 Chapter Insights 186 Case Examples: Google, Air France, Opinmind, Meteor Solutions, Palm Centro, Capcom Resident Evil 5 Downloadable Excel Templates: Search Engine Marketing Metrics (CPC, CTR, TCR, Take Rate, ROA), Air France Click Data, Google ROA Impact, Bounce Rate, Word of Mouth (WOM) PART III THE NEXT LEVEL 187 CHAPTER 8 Agile Marketing: Using Near-Time Data to Improve Performance by a Factor of Five or More 189 If You Are Going to Fail, Fail Fast 190 Design for Measurement 196 Chapter Insights 200 Case Examples: Microsoft Security Guidance, DuPont Performance Alliance CHAPTER 9 Wow, That Product Is Exactly What I Need! The Three Essential Approaches to Analytic Marketing 201 The First Essential Approach to Analytic Marketing: Propensity Modeling 202 The Second Essential Approach to Analytic Marketing: Market Basket Analysis 206 The Third Essential Approach to Analytic Marketing: Decision Trees 207 Timing Is Everything: Event-Driven Marketing Case Examples 214 The Business Case for Analytic Marketing 218 Chapter Insights 220 Case Examples: Meredith, EarthLink, DIRECTV, National Australia Bank, Ping Golf Downloadable Excel Template: Analytic Marketing ROI Downloadable SAS File: EarthLink Retention Marketing CHAPTER 10 What's It Going to Take? Infrastructure for Data-Driven Marketing 222 Which Data Do You Really Need? 223 Do You Need to Build a Ranch House or Empire State Building Infrastructure? 225 Requirement Complexity 229 Should You Forklift or Rearchitect Data in the Enterprise Data Warehouse? 233 What We Know Can and Will Go Wrong (If You Don?t Watch Out!) 234 Harrah's Entertainment: Creating the Data-Driven Marketing Infrastructure Portfolio 237 Chapter Insights 246 Case Example: Harrah?s Entertainment CHAPTER 11 Marketing Budgets, Technology, and Core Processes: Key Differences between the Leaders and the Laggards 247 Marketing Campaign Management: The State of the Industry 249 Research: Marketing Processes, Technology, and the Link to Firm Performance 252 B2B versus B2C Investment Portfolio Mixes: Leaders versus Laggards 256 Overcoming the Four Barriers to Professionalizing Marketing Processes 260 Upgrading Marketing Campaign Management Processes: A Three-Phased Approach 262 Lessons Learned from the Research: Complexity Requires Governance 266 The Creative X-Factor 268 Tying It All Together 271 Chapter Insights 272 Case Examples: Blendtec Viral Marketing, Nissan Qashqai New Product Launch APPENDIX FOR INSTRUCTORS How to Use This Book to Teach Data-Driven Marketing 275 NOTES 279 INDEX 285

About the Author

Mark Jeffery is the Director of Technology Initiatives and Senior Lecturer in the Center for Research in Technology and Innovation at the Kellogg School of Management. He has more than thirty publications in management, scientific, and technology journals, and has published twenty-four original case studies with Harvard Business School Publishing. At Kellogg, he directs multiple executive programs including Strategic Data-Driven Marketing and Driving Strategic Value from IT, and teaches in custom executive programs for many organizations including Microsoft and DuPont. He is also the Managing Partner of Agile Insights LLC, a marketing and technology consultancy (www.agileinsights.com).

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