Marketing science at Dell: modeling investment trade-offs

George Sadler, Director, Social Media & Marketing InsightsMu Sigma Customer Summit 2012, Half Moon Bay, CA, February 27, 2012

Global Marketing

2010BI dashboards that measured paid metrics onlySurveys to measure customer perception

2011 Developed the analytical muscle to leverage multivariate statistical models

2012

Sharing best practices with BU campaign ownersLeveraging to determine next marketsExperiment with other uses of model insights

2013 and beyond:

Scale other uses of model insights to drive investment decisions and improve predictive capabilities

Combining traditional BI and statistical models Identifying the key metrics to watch Determining the total ROI of an investment

(in-period, long-term, and synergies)

Dell’s journey to a cohesive ROI framework

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Global Marketing

Partnering with Mu Sigma has been critical to our success

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Global Marketing

Answering ROI questions in a non-linear world

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Global Marketing

BusinessProcess

Measuring a campaign is hard…

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Invest in marketing

Create brand equity

Facilitate sales

motion

Harvest value

Success is…

Measured by…

• Circulation, reach, frequency, & impressions at agreed to CPC/CPMs

• Increased awareness, emotional attachment & credibility

• Increased lead creation & quality

• Revenue & margin growth measured by total ROI (4 components)

• OA reach & freq

• TV GRP

• Print circulation

• Impressions

• SOV

• Total spend

• Net Promoter Score

• Brand of choice

• Enterprise credibility

• Core revenue

• Number of leads

• Conversion rates

• Win / Loss rate

• % Enterprise mix

• Discount %

• Share gains

ROI begins here…but control diminishes

product quality, CSAT, average hold times, ship to commit, pricing actions, economy, competition…

Global Marketing

Structured Equation Models (SEM) demonstrate the causal relationships among variables and identifies the incremental influence of each variable on the outcome of interest (sales).

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Used to:

• Understand the human genome and biological traits

• Predict and explaining historical economic conditions

• Predict social and deviant behavior

• Research drugs

• Optimize media spend

Brand Equity

Marketing

Economy & competitio

n

Marketing & pricing

Brand Health

Product experienc

e

Purchase experienc

e

Service experienc

e

Using sophisticated modeling techniques to answer the ROI question

Global Marketing

Robust models require lots of data

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Product Attributes

Customer Service

Sales Force Effectivene

ss

Supply Chain

Pricing Strategies

Marcom Spend

Corporate Reputation

Economy Competition

What the customer experiences

What the business controls directly

Product Customer Experience

Promotion and Communication

Externalities

Global Marketing

What have we learned about brand campaigns?Brand investments remove pressures on transactional levers, allowing us to hold on pricing and amplify segment marketing

Brand investments deliver in-period top & bottom-line growth, paying for themselves in as little as 5 months

Brand investments lift “brand pull”, establishing a stronger base for continued top & bottom-line growth over the next 18-24 months

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Global Marketing

Progress in increments

Infrastructure evolving

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Global Marketing

You can measure more than you thought…

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Global Marketing

What else can we measure?We can measure the response curves of each business driver over time, identifying where increased investments will lead to accelerating returns

We’ve quantified the cross-business unit impact of investments by one P&L, allowing for complete ROI calculations

We’ve estimated the complete ROI of pricing decisions, both short and long-term

We’ve determined a value of our investment in green initiatives, that correlates well with third-party research

We’ve shown that product quality improvements do contribute to revenue that’s measureable11

Global Marketing

What’s next?

Quantifying & modeling signals from the social web…

Global Marketing

Our future infrastructure will drive scale and innovation

13 Confidential

Global Marketing

Integrating decision sciences at Dell

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Clean, consistent, reliable data through:• Consistent global definitions and standards

(E.g., common definition of “Brand messages”)• Controls on data entry and upkeep

(E.g., pipeline data, definition of “Sales Ready Leads”, definition on “active / inactive accounts”, etc)

• Periodic, process driven data gathering

Intelligence / Heavy lifting analytics layer• Holistic models accounting for all relevant

influencing factors – short / long term, X-BU impacts

• Brand Health / ROI model, Media Mix Model, propensity and attribution models, listening analytics, Social Media ROI

• Global Brand / Marketing layer decision supportIntegration layer

• Transactional / Rel BI / CRM – extensions of core definitions and models for high frequency executions –lead management, demand gen campaign design / execution

• Distribution across regions and LoBs / BU

Rel CRM Transactional CRM

Rel BI Transactional BI

Support for Planning

Other decision support areas - Dashboards, etc

Thank You