Databases Quantitatively Measuring Customer Behavior

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Databases Quantitatively Measuring Customer
Behavior

• COMM 3710
• April 10, 2003
• Tim Larson

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Types of DatabasesReading Jackson and Wang on
electronic reserveThe ABCs of Database
Marketing - Pages 21-53

• 1. Basic historical databases
• -Name, address, and telephone number
• 2. Marketing intelligence databases
• -Builds on basic database
• -Information about past purchases propensity
  to purchase in the future
• 3. Integrated business resource (eCommerce)
• -Integrate all key business information sources
  or functions in an organization
• -HR
• -tracking pick, pack and ship
• -service information
• -order and account management
• -inventory
• -returns
• All aspects of customer relationship management
  (CRM)

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Types of Quantitatively Measurable Behavior that
can be added to a database

• 1. Response
• 2. Network changes
• 3. Contact points
• 4. Commitments
• 5. Purchases
• Quantify and add data from these measures to
  the customer database.

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1. Response Behavior

• Communication back to a marketer that a message
  has been received.
• Every communication needs a response mechanism.
• 800 asking consumer to call for a brochure
• URL given in mass media and then hits are
  counted
• List retailers who stock or carry a product
• Add a consumers name to a mailing list

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2. Category/Brand Network Change Behavior

• This is the mental network a consumer holds about
  brands, products, and companies.
• Changes over time in brand networks are
  considered a behavior and are measurable.
• The closer a brand is tied to the category, the
  more likely it is that brand loyalty exists.

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Category/Brand Networking
Beverage Liquid Good
with food Thirst quenching

Broad Category Level



Soft Drink Cola Sweet Carbonated
Preservatives Cold
Soft Drink Fruit Nutritious Cold Natural
Slightly sweet
Basic Category Level

Segmented Level
Orange Juice breakfast Florida orange
All Natural
Artificial Sweetener
Fruit Punch artificial unhealthy stores
well
Soft Drink
healthy unusual
diet cola
Diet Coke
Brand Connection
Diet Low calorie
Diet Pepsi
Brands
Diet Canfield
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3. Contact Behavior

• Defined as any information-bearing experience
  that a customer or prospect has with the brand,
  the product category, or the market that relates
  to the marketers product or service.
• Also called customer interactions or customer
  moments of truth.
• Examples
• Friends and neighbors comments
• Packaging
• Newspaper, magazine, TV, radio other mass media
• The way a customer is treated in a retail store
• Employees
• Store signage
• Customer service
• Telephone

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Contact Points/Moments of Truth/Interactions Ways
people get information about McDonalds

Customers
Trade Press
Investors
McDonalds
Litter
Employees
Mass Media
Golden Arches
Friends
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How to Measure Contact Behavior

• Contact Paths
• Conduct a customer inventory of major contacts
  that influenced brand or product usage.
• Contact Inventories
• Conduct a customer inventory of major contacts
  that influenced brand or product usage.
• What contacts does a customer have with the brand
  on the way to making a purchasing decision? Takes
  the form of contact mapping.
• Tracking Studies
• A series of measurements over time of the
  messages that are delivered and the changes in
  behavior that result.
• Measuring Known Contacts
• Encourage responses and develop two way
  communication.
• Encourage feedback through mail-back cards, 800
  number, Internet, warranty cards.

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4. Commitment Behavior

• Commitment defined
• An external demonstration of interest in either
  the marketers brand or in the generic or related
  category.
• Not a transaction but is favorable behavior
  toward the brand
• Requesting to be put on a mailing list
• Filling out an application blank.
• Attending a demonstration
• Past purchases indicate a commitment

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5. Purchase Behavior

• Past purchases are the best indicator of future
  purchases

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How to measure Purchase Behavior

• Direct measures
• Get purchase history. What do they buy? How
  often? From whom? Also, identify customers by
  name, address, telephone number, email address,
  etc.
• Scanners consumer goods like foods beverages
• In-house charge cards clothing.
• Indirect purchase measures
• Usually involves manufacturers who want to know
  about their customers customers.
• Warranty or service cards

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The Behavior Measurement Process

Transaction Partial
Affiliations Attitudes
Category Networks Transactions

• Measure behavior as close to the actual
  transaction as possible.
• Start with the actual purchase behavior and move
  back up the purchase decision/behavior model
  until you find measurable points.
• Capture the behavioral data at the first
  productive point along the continuum and put it
  in the database.

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Market Behavior Measurements

• Starts with actual purchase behavior
• Transaction
• Identifies the customers purchases provides a
  first cut at segmentation
• Partial transaction
• Looks at a measurable commitment in lieu of a
  purchase
• Brand relationship
• Measures some relationship or past affiliation
  with the brand
• Attitudes
• Helps to explain the why of the behaviors or
  non-behaviors
• Brand and Category networks
• How consumers mentally store ideas about
  products, services and brands.

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Forms of Measurable Behavior at Each Point

• Transactions or purchases for which you have a
  record.
• Credit card use.
• Insurance policy or financial investment
• Partial transactions
• Some association with marketing organization.
• 800, coupon, dealer contact, request for info.
• Brand Relationship
• Measured through the brand network that the
  consumer has constructed or through affiliations.
• Motorboat/swimsuit, commuter/newspaper, dog
  owner/dog food,
• Attitudes
• Treating change of attitude as a behavior
  change.
• Brand and Category Network
• Customers feelings and beliefs developed using
  stored information in the form of mental nodes
  and networks.

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The Future of Behavior Measurement and Databases

• Being digital
• Transactional programs
• Tied to EFT (electronic funds transfer)
• Accomplished with PDAs and cell phones.
• The marketer instantly knows who bought what and
  the price paid.
• Interactive two-way communication
• Cable TV, voice and data systems, telephone,
  fax, and other systems
• will enter each home or office.
• Real time message from marketers, to which
  customers can immediately
• respond.
• All information received and transmitted using a
  teleputer,a dumb terminal
• that can access millions of databases stored on
  millions of computers around
• the globe.
• The one-way, low-response, marketer driven
  communications
• systems will be replaced with an interactive,
  real-time response,
• customer driven, digital communications system.