1. Linking your database to the Internet Arthur Middleton Hughes Vice President / Solutions Architect KnowledgeBase Marketing, Inc. National Center for Database Marketing Fairmont Hotel San Francisco Monday July 12, 2004 8:30 – 11:15 AM

2. What KnowledgeBase Does

3. Agenda Introduction: How the Web has changed Database Marketing The Value of a Name Case Studies Using the web to build customer loyalty Using the web for customer service Premier Pages

4. Database Marketing Pre 2000 Your database was built on a server or a mainframe. You got hard copy reports. You accessed the database by special software on a terminal. You had to be connected to the server or a main frame.

5. Marketing Database Data Access And Analysis Software Customer Transactions Marketing Staff Inputs from Retail, Phone, Web A modern database Appended Data

6. With the web it is much easier You have no need for a leased line. You need no software on your PC other than a browser and Excel You access your database through the web.

7. Marketers Access The Database Through The Internet Marketing Database

8. Data Entry Pre 2000 Customers called an agent on the phone Or sent data in by fax or mail Data was entered into the database by someone at a keyboard Data was updated periodically. Even when it was fast, it was slow.

9. How data enters your database today Customers and telephone agents enter data directly to a micro web site. The site is on the server where your database resides. Customers do most of the work. The data is updated all day. It isn’t just fast, it is instant.

10. Customers Update Their Preference Profiles Welcome back, Susan. Can you look over your profile and bring it up to date? Thanks… Database Pre-Populated profile Email thank you Email says to click here

11. Customer communications pre 2000 The theory was 1:1 marketing, but… You made phone calls or wrote letters. Phone calls cost $3 - $7 each Letters cost $1.00 each. Communications were rare and expensive.

12. Customer communications today Inbound, customers come to the web, and get instant information, and web responses or emails. Outbound, you can communicate with a million customers a day for almost nothing. 1:1 marketing can be a reality, if you have the right software and marketing strategy.

13. Email Production Marketers use Campaign Management Tool to select households for email blasts Database Email Blaster Selected records are sent to email blaster. Promotion history with codes stored in database. PC Reports Campaign Management Tool

14. Tracking Email Performance To get tickets, Click here Response Micro- Site captures Response and Campaign code Database Reports on Return on Investment Emails to customers & prospects Reports through web compare outgoing emails and program response

15. Reports Pre 2000 All databases produced hard copy reports. Many permitted marketers to use SQL or other software to do ad hoc queries Marketers did not know how to use SQL Most marketers were frustrated with their ability to get data

16. Reports Today Marketers access their database through the web. There are standard reports that they can run and print on their PC printers There is English Language Ad Hoc software that they can access through the web, and print on their PC printers.

17. Report Creation Database Report Catalog Programmers create the reports needed by the staff, and list a report catalog on the web site Programmer

18. Report Production Database Web Report Catalog Marketers choose reports via PC on web Reports printed on PC Printer

19. Campaigns Management Pre 2000 Marketers wrote memos to programmers who selected the names. Programmers prepared tapes that they sent to vendors. They sent hard copy reports to the marketers.

20. Campaign Management Today Marketers use ad hoc web software to select names from the database. Selected names can be downloaded to the marketer through the web. Or the selected names can be downloaded to a vendor. Marketers create their campaigns.

21. How Marketers Develop Marketing Campaigns Campaign Manager Software Email Blasting Software Reports Through Web Access through Web Customer Database

22. Database Update Pre 2000 Input was entered on a PC and updated in batch from a diskette or tape. Many tapes arrived at once and were converted to a common format. For a big file, the process took a couple of weeks.

23. Database Update Today Customers enter their own data directly through the web Other inputs arrive through the web and are converted through stored procedures. Relational database updates changed records only. The process is automatic and fast.

24. Security: Access to web databases controlled by DBA Database Administrator assigns IDs and passwords to all users and controls which data reports each user can view.

25. The value of a name

26. How email names are used Regular promotions Low cost items Last Minute Specials Retention Messages Follow Up Messages Viral Marketing Newsletters Name Rental

27. Regular Promotions

28. Low Cost Item Promotion

29. Last Minute Special

30. Retention Messages Birthday Cards Thank You Customer Surveys Service Reminders Monthly Summaries

31. Retention Messages

32. Follow up messages Thank you for your order Your order was shipped Did your order arrive on time and OK?

33. Susan: If you want to have some friends come to Hawaii with you, list them here and if they decide to go, we will give each of you a 10% discount on your trips. Dudley Foulke dudleyf@hotmail.com Helena Errazuris micifuz2@aol.com Arthur Hughes ahughes@computersrategy.com Dear Helena: Rick and I are going to Hawaii on August 7 th. We thought it would be great if you could come with Us. We are staying at the Maui Surfside which is a great deal. To find out about it Click here! Hope you can Join us! Susan Database Viral Email results in more emails and data capture Viral Marketing

34. Send Name Email

35. Newsletters

36. Name Rental

37. Total Annual Name Value

38. A few case studies Isuzu, Hewlett Packard, Universal Music, Web Focus Groups, Email Marketing, Getting customers to join a club.

39. Isuzu Post Card Direct To sell their trucks, Isuzu developed 24 different postcards, each with a different case study of truck use such as Gardening, Plumbing, Moving. They set up a web site and used direct mail to get dealers to come to the site and order post cards for prospects developed by Isuzu.

40. Dealer Direct Application

41. HP On Line Survey Competitive Advantage Through Advanced Technology  Hewlett Packard tested an on line survey to promote their network printers.  Direct mail drove responders to a web site that contained the survey. Responders received $10 in Pizza Hut coupons.  The survey provided a special HP offer for network printing solutions, product links, and e-subscription information.

43. Universal Music eMarketing Campaign  UMG tested an e-marketing strategy to increase record sales of a new album release for Lucinda Williams  The campaign delivered more than a 960% increase to the Lucinda Williams fan base  Reached nearly 200,000 fans and prospects with email communications  Won DMA Gold Echo Award in 2002

45. Web Focus Groups

46. What Works: Email Marketing

47. Where else can you get these results in 3 days?

48. Get customers to join a club A company sold sporting goods created a member club. When DB was built they learned that: Club members bought 11 times more than non club members. In two years, 81% of club members became multi-buyers.

49. Club members conversion

50. Cataloger Example Miles Kimball sent 20,000 emails with three different catalogs, and 20,000 with the three catalogs alone. Those who got the emails bought 18% more than those who got the catalogs alone.

51. Retailer Example Video retailer sent email newsletters to 170,000 customers for 6 months. Control group of 14,000 got no emails Retail sales to test group was 28% more than to those without emails.

52. New idea: Digital Neighborhoods You can get customers online behavior appended to your database.

53. 17 Digital Segments

54. The web is the greatest direct marketing vehicle ever invented

55. How the Web is changing Database Marketing Recognition Reaching out Customer service Supplier Relationships Information Ordering parts and replacements Building personal relationships

56. Communicating Screen: Thank you for your order Email: Your order has been received Email: Your order will be shipped Email: Your order was shipped Email: Was everything to your satisfaction? Cost of all of the above? Nothing!!!

57. Now, this is recognition! Welcome Back, Arthur!

58. Immediate Feedback!

59. 30 seconds later: Email

60. The big Web winner: Customer Service Hundreds of millions of dollars being saved today through use of the web Much bigger than consumer sales

61. How the Web is changing Customer Service 1980s: toll free numbers Thousands of agents reading screens Heavy cost: phone call and agents 2003: let the customers get their own information No cost for phone or for agents Customers like it better!

62. Letting them go behind the counter Open your entire company to your customers Let them find what they want themselves It is cheaper for you, and customers like it better.

63. How Amazon saves millions

64. How Fedex Saves Millions

65. Case Study: Shift Customer Calls to the Web

66. Current Situation Company receives 7.5 million phone calls per year at 500 person call center Cost per call is $6.50 or $48 million per year. Web transactions cost $0.10 6% of transactions now go through the web site. Proposal: improve the web site so more calls can go there.

67. Method: Personalization For the web to replace a live operator, it must be as good as a live operator. Personalization, and intelligent response to the customer’s input. Time required to improve web site: 14 months. Cost of web improvement: $1.8 million

68. Dollar savings through increased web use

69. How the savings can be achieved Make the web experience so rewarding that customers will prefer it to a phone Call. Make users empowered by functions available to them. As soon as the enhanced web functionality is up and running, run programs to drive customers to the web sites

70. How to measure web success Get a base line for existing transactions Determine the cost of each transaction After transactions begin to shift to the web, determine how many have shifted Measure your savings.

71. Why customers like to use the web

72. Why customers like it: My vacuum cleaner problem We have a Hoover with a MicroFiltration Bag. We wasted an afternoon going to six (yes six) stores looking for new bags. No luck. So we tried the internet.

73. Finding Hoover on the Web

74. Ordering a Micro-Filtration Bag for my Hoover

75. Letting customers come behind the counter A Marriott Example

76. Let’s try it. Let Marriott plan a meeting in Ft. Lauderdale

77. We want 3 rooms with 50 attendees, golf and pool

78. Here are the properties. Let’s try the North Marriott

79. Here are the conference rooms we need

80. Here is the hotel

81. And, here is the location. Let’s make a reservation!

82. The Marriott Web Site: 1,800 Hotels $10 billion revenue Marriott doesn’t own most of the hotels Internet team began in 1997 More interactive, the more business Meeting planners don’t need to visit the sites. All they want is on the web. Booking a room for a business traveler is very fast

83. Dell Premier Pages

84. Dell Premier Pages…

85. Benefits of Premier Pages

86. Dell Premier Pages 70% business, 30% consumer on web Premier pages: one page per company Builds brand loyalty Reduces phone calls Takes only 30 minutes to create a new Premier Page for a new customer.

87. Premier Page History Reports

88. Dell sales follow up IS director checked networking equipment on Dell site. Did not buy. Next week got Dell salesman call to help with networking purchases Customers like it.

89. Office Depot Premier Pages Office Depot Online discovered: on line customers spend 33% more than catalog customers Using a premier page system, Office Depot Online provided 85% of Bank of America’s office supplies

90. Bring back the old corner grocer:

91. Conclusion: You can do this! Invite your best customers into your company. Let them rummage through your warehouse. Let them look up technical data themselves Make them a part of your company. You will have them for life.

92. Books by Arthur Hughes From McGraw Hill. Order at www.dbmarketing.com www.dbmarketing.com Contact Arthur: arthur.hughes@kbm1.com