If a first step in online marketing’s adaptation of traditional DM techniques was measurement, the next – and ongoing – one is a focus on return on investment. As Jim Nail, a senior analyst at Forrester Research noted, a session at Ad:Tech titled "Know Thy Customer – and Make It Pay" might have been called simply "Know Thy Customer" a few years ago.
At Sony Electronics, the challenge was to be "as innovative in our marketing as our engineers are in creating products," according to panelist Denise Lee Yohn, vice president, segment marketing and brand planning.
Sony’s segmentation strategy includes analyzing ROI among eight consumer groups, which were generated largely on their age and willingness to purchase new technologies. These were added to the electronic 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 of the household might have a high-tech home office, differently from younger consumers who are the center of their social world.
"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 we could realistically be understood and implemented in our organization."
Using this analysis caused Sony to move its budgeting toward differentiations within consumer buckets, as opposed to product purchases. Whereas previously the company would have made sales forecasts based on each product line’s past results, Sony now has the ability to 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 its 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 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 is a big difference between recalling LendingTree and being satisfied with it. LendingTree found that among those that closed deals, 90% of those that received more than the number of leads to financial institutions 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 those that didn’t ultimately close a deal through LendingTree, 79% of those that received a larger number of offers reported having a satisfying experience.
Additionally, when customers were asked whether LendingTree had delivered on the promises made in its advertisements, those customers that received more solicitations but didn’t end up closing a deal were more satisfied than those that received fewer offers, but did make a financing deal.
The critical break-point for "enough offers" appeared to be four offers. 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.
