If the first step in online marketing's adaptation of traditional DM techniques was measurement, the next is a focus on return on investment.
At Sony Electronics, the challenge was to be “as innovative in our marketing as our engineers are in creating products,” said Denise Lee Yohn, vice president of segment marketing and brand planning.
At an Ad:Tech conference session this summer, Yohn said Sony's segmentation strategy includes analyzing ROI among eight consumer groups, generated largely on their age and willingness to purchase new technologies. These were added to the electronics manufacturer's more traditional profit-and-loss analysis, which focuses on product lines.
In doing so, Sony has acknowledged the need to approach double-income households — in which one member might have a high-tech home office — differently from younger consumers.
“Our segmentation is kind of a coarse cut,” Yohn is quick to admit. “We did look at a variety of ways to segment. We struck a balance between what is possible and what could realistically be understood and implemented in our organization.”
The analysis caused Sony to move its budgeting toward differentiations within consumer categories rather than product purchases. Whereas previously the company would have made sales forecasts based on each product line's past results, Sony can now reach specific consumers at specific points in both their buying cycle and life stage.
Knowing its customers has also helped Sony differentiate its messaging to customers. This has become increasingly important in the electronics field as product innovations that once would have given Sony a leg up in the market for months can now be copied in weeks, Yohn said. With the focus on the consumer, she feels that Sony has added “a competency that has been missing: intimacy.”
At online loan site LendingTree.com, the data that proved most valuable wasn't pure profit-and-loss information as much as the number of leads the service generated for customers. Its mass-media ads promise a selection of lenders competing for the financing business, thereby making an implicit promise of control, choice, convenience and value to the customer.
Its branding campaign was successful. Between the first wave of ads and the most recent one, recognition jumped from 26% to 67% within a few years.
But there's a big difference between recalling LendingTree and being satisfied with it. LendingTree found that customers needed to see several leads to financial institutions in order to feel satisfied, whether or not they actually closed a deal. Among those who did close deals, 90% who received more than that magic number of leads reported being satisfied with the experience, compared with 48% of those who closed a deal but didn't get quite as many offers.
According to Richard Schruer, senior vice president of Chadwick Martin Bailey, which coordinated the research, among individuals who didn't close a deal through LendingTree, 79% of those who got a larger number of offers reported having a satisfying experience.
Additionally, when customers were asked whether LendingTree delivered on the promises made in its advertisements, those customers who obtained more solicitations but didn't end up closing a deal were more satisfied than those who received fewer offers and did arrange financing.
The critical point for “enough offers” appeared to be four. This knowledge helped the company focus on providing enough offers for its site visitors. Separately, it has also worked to monitor which of its bank partners provide good customer service. LendingTree customers, it seems, were not differentiating between the Web site and the banks that were doing the actual refinancing.
