Investment Optimization for Execs at Dell using Big Data
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Transcript of Investment Optimization for Execs at Dell using Big Data
Strategic Case Study: Investment Optimization for Executives using Big Data
Big Data Texas March 2013
Natalie Kortum
Natalie Kortum marketingmathgirl.com
Global Marketing
Was the campaign successful?
0
25
50
75
100
125
Prior Year Current Year
Marketing Spend
Other Marketing Campaign
($M)
0.00.20.40.60.81.01.21.4
Prior Year Current Year
Revenue ($B)
“We spent $10M and total revenue increased $400M… what a smashing success!”
*Numbers for illustrative purposes; not actual Dell figures
Natalie Kortum
Global Marketing
Was the campaign successful?
0
25
50
75
100
125
Prior Year Current Year
Marketing Spend
TV PrintOnline Campaign
($M)
0.00.20.40.60.81.01.21.4
Prior Year Current Year
Revenue ($B)
“Marketing mix shifted, but increasing marketing spend was a good investment overall!”
*Numbers for illustrative purposes; not actual Dell figures
Natalie Kortum
Global Marketing
What drove revenue?
0%
20%
40%
60%
80%
100%
120%
Prior Year Current Year
Marketing Spend
Sales People Marketing SpendProduct Quality Support Staff
“Sales investment was the main reason for the revenue increase. Let’s cut more from Product and Support for next year.”
*Numbers for illustrative purposes; not actual Dell figures
Natalie Kortum
0.00.20.40.60.81.01.21.4
Prior Year Current Year
Revenue ($B)
Global Marketing
*Numbers for illustrative purposes; not actual Dell figures
Natalie Kortum
Global Marketing
*Numbers for illustrative purposes; not actual Dell figures
Natalie Kortum
Global Marketing Natalie Kortum
What impact is marketing having on Revenue in comparison to other factors?
Global Marketing
Big Data Collection
Over 1100 variables used by
other groups to run the business
Over 100 distinct data owners
(people)
Over 10 different data systems
Over 25 different vendors
Natalie Kortum
Global Marketing 9 Confidential 3/30/2013
Questions?
Natalie Kortum
Global Marketing Natalie Kortum
Product Innovation
Ship Commit Accuracy
Marketing Spend
Sales Investments
Support Satisfaction
Pricing
Product Quality
Global Marketing Natalie Kortum
Global Marketing 12 Confidential 3/30/2013
Questions?
Natalie Kortum
Global Marketing
Starting Revenue
*Numbers for illustrative purposes; not actual Dell figures
Ending Revenue
Explaining the Changes in Revenue
Natalie Kortum
Global Marketing
Starting Revenue
*Numbers for illustrative purposes; not actual Dell figures
Ending Revenue
Explaining the Changes in Revenue
Natalie Kortum
Global Marketing 15 Confidential 3/30/2013
Questions?
Natalie Kortum
How investment levers compare
Sales Marketing
Demand Gen Pricing
Marketing
Brand
Marginal Return on Investment
0.9 X 1.3 X 0.4 X 2.2 X
Social Media
4.1 X
If $1 M additional were available to invest, what’s the marginal ROI?
*Numbers for illustrative purposes; not actual Dell figures
Product
2.5 X
Natalie Kortum
Global Marketing
Short-term and Long-term ROIs and Cross BUs of B2B
Sales Marketing Transactional
Pricing Brand
Campaign
B2B Revenue in period 0.7 X 1.2 X 5.7 X 0.2 X
Additional long term benefits on B2B (12-18 months)
+ 0.1 X + 0.06 X - 5.4 X + 1.9 X
Cross BU Impact + 0.1 X + 0.04 X + 0.1 X + 0.1 X
Total Return of $1M investment in lever = 0.9 X = 1.3 X =0.4 X =2.2 X
+ 0.3 X
+ 2.2 X
0 X
=2.5 X
Product
*Numbers for illustrative purposes; not actual Dell figures Natalie Kortum
Global Marketing
Inception
Sales Investments
Re
ve
nu
e
Plateau
Current Level
Range of Sales Spends over the last 3 years
Sales Investments
Re
ve
nu
e
A saturated curve shows that we are in the plateau stage of the S curve
Natalie Kortum
*Numbers for illustrative purposes; not actual Dell figures
Global Marketing
What’s in the future?
Natalie Kortum
Global Marketing 20 Confidential 3/30/2013
Questions?
Natalie Kortum
Global Marketing
Tips for explaining to non-Technical folks
• Walk a mile in their shoes. • Run your presentation past a nontechnical supporter.
– Pretend your audience is your 10 year old nephew or mother.
• Only two minutes (and no more!) to explain your methodology.
• Create proof points for your techniques – Execs who have used this approach. – Companies/markets using this approach. – Respected PhD or Tech person they trust to back the approach.
• Watch the assumptions. – Choose only two or three if you must that might be highly suspect.
• Use Analogies! Natalie Kortum
Global Marketing 22
Direct Attribution has a big downfall
• Direct = All or Nothing
Traditionally Understated Traditionally Overstated
Social Media Coupons
Brand Campaigns Online Promotion/Referral
Events Sales
Corporate Social Responsibility Transactional Actions
22 Natalie Kortum
Global Marketing Natalie Kortum
Global Marketing
Human Brain Network
24 Natalie Kortum
Global Marketing Natalie Kortum
Thank You
Natalie Kortum marketingmathgirl.com