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Centralized Prospect Marketing
June 2007 Franchising World
Careful planning, combined with readily-available technology, allows the creation of the best marketing power. By Steve Scruton When it comes to franchise prospect marketing, every corporate marketing executive struggles with the challenge to support franchisees with the right amount of marketing at their fingertips while still maintaining some level of control. Too much data, information and flexibility becomes distracting and overwhelming, too little and the franchise owner is forced to work outside of the box without the optimal level of support for the business. Marketing portal technology can be utilized to present “best in class” prospect data and mail pieces in a centralized marketing hub to support the franchise organization, but it will require collaboration between all areas of corporate marketing and the franchise owners. The key objective is to give the team the best prospecting tools to be successful without distracting them from running their businesses.
What’s at Stake • Increased response rates. Overall response rates will increase due to the acquisition of better prospect data and the ability to integrate analytics into a simple storefront for franchise owners. Typically, owners need to acquire prospect data on a stand-alone basis which does not allow for the acquisition of “best in class” data, consequently there is no efficient way to apply analytics. A centralized marketing portal is the only way to incorporate timing, multi-wave campaigns and messaging into a point-and-click environment that “synchs” all the components that drive response. • Better responders. Utilizing multi-sourced data that creates significant coverage of valuable attributes for highly-targeted selection and analytics enable the user to target prospects most likely to respond and provide the greatest value. A new mover segment can provide significant response for a window covering product and a new homeowner can provide a larger value sale for the franchise owner. The goal is to combine the response power of a new mover with the sale value of a high-market-value homeowner and address to the customer for an effective strategy to take shape. • Lower acquisition costs. A prospecting module within a marketing portal allows the organization to leverage economies of scale with data, materials, print, production and communications and pass these savings on to franchise owners. All services are purchased at the corporate level and then made available in the portal through packaged campaigns and a simple interface for mail piece management combined across all users. An individual owner purchases 2,000 prospect names and then goes to a local printer to print and produce a local piece. Most likely the owner incurs high-minimum charges versus a data, print, production purchase from corporate that leverages 26 owners running campaigns of 2,000 each or 52,000 total and producing all pieces in one batch. Due to the lower cost of the individual campaigns, it is easier to achieve a successful campaign level return on investment. • Less time needed to execute campaigns and communications. Owners don’t need to spend all of their time coordinating different vendors and researching data sources so that their time can be spent running their businesses. • Improved relationships with franchise owners. A well-built portal system with prospecting components will improve relationships between owners and corporate because the owners can quickly access “best in class” prospect data and integrate it into a successful turn-key campaign without the involvement of corporate staff. • Increased learning. With a feedback loop the marketing knowledge will be continuous in nature and shared between all owners and the corporate office. Ultimately this will help to put the organization at the top of the marketing game and ahead of the competition. It is important to share and analyze response and customer data for future improvements. This can be accomplished with corporate campaigns that allow for effective tracking and franchise campaigns where response and customer information can be matched back to mailings for analysis.
Data, Data, Data, Data The individual franchise owner is at a huge disadvantage when it comes to assembling “best in class” prospect data because he or she doesn’t have the scale to acquire multiple-base sources and the technical infrastructure to combine and build the next level of ultimate prospecting data that will set campaigns apart from the competition. Fortunately, corporate marketing can create an advantage for the franchise system to execute campaigns with data buying and assembly techniques utilized by the top centralized direct marketers. Base data should be acquired from multiple sources to ensure the greatest territory coverage, if the core offering is homeowner-driven, then the goal will be to compile homeowners from multiple sources and combine them in a robust database with the greatest amount of coverage. From that point it is important to acquire the largest and most complete set of attributes for targeting. The base source(s) of homeowner names may be different than the demographic sources for attributes and will require a merge/purge with the multi-sourced base file and the incorporation of logic to determine the best attributes. If the date of birth comes from three sources with different levels of reliability, it is important to assemble the database with priority given to the most reliable sources and fill in from the other sources for coverage. It is a great opportunity for the corporation to create this prospect database that gives franchise owners superior data at a lower cost than they could acquire on their own.
Set-Up for Success • Step One: Create categories within the portal for prospecting to eliminate confusion for the users; the categories should be defined by product or type of program such as new mover, new parent, homeowner, sub-prime, families with children, or “Company X” proprietary response model. Each category should drive the type of data and mail piece eliminating any chance of the user incorrectly matching the mail piece with the data. After a user chooses a category, they should not be presented with mail pieces or data that does not match the category. • Step Two: Present the data to the users in a simple and easy-to-understand manner that only allows users to view and make selections in their territory. This is the area of the portal campaign construction process where corporate marketing can translate their data knowledge into the selection process. The key to filtering is to make it as simple as possible with very limited selection options that correspond to the selected category. The best approach is to only provide geography selection ability with limited category filters that contain the necessary selections. A homeowner category may only contain the ability to select by geography within territory, market value of home and length of residence, if the filter does not apply to the category it does not need to be presented in the portal. • Step Three: It is important to translate corporate marketing knowledge into campaign strategy through the portal. For ultimate success it is not enough to just organize the data and mail pieces by category because proven campaign strategy needs to be incorporated into each category. It is proven that new mover campaigns are more successful over a period of multiple weeks because the user must easily be able to order a subscription of new mover data that can run over multiple weeks. If corporate marketing has the knowledge that a series of mail pieces with different messages mailed every four weeks yields the greatest success, then the user must be presented with the option to easily order a multiple-message campaign.
Organizing the Best Prospecting Solution
Process: Although the techniques may be confusing, the process is straightforward.
Execution: After the model is built and statistically validated, it is time to deploy to the franchisees in a simple environment. Combining analytics with multi-sourced data is nothing new to marketing, it is new to the decentralized franchise organization and is made available through advancements in database technology and the availability of Web-based customizable portal technology.
Measurable Results Centralized organizations have been using sophisticated analytics and technology to stay ahead in the area of customer acquisition. Careful planning combined with readily available technology can allow the franchise organization to combine data and analytics in a simple to use solution that utilizes “best in class” marketing power.
Steve Scruton is president of Direxxis Inc. He can be reached at stevescruton@direxxismarketing.com.
A well-implemented prospecting solution integrated into a portal system has a wide range of benefits for the entire franchise organization that can ultimately be showcased to potential owners and lead to increased sales. The far-reaching benefits provide the potential for a huge impact on the organization:
The most important component of every successful prospecting campaign is the data, the quality and relevance of the data to the campaign will drive 80 percent of the results; creative and channel are important, but play a small role in comparison to the data. It is important to engage experts to acquire the data and exploit a big opportunity presented within the portal and corporate office to the franchise infrastructure.
Data is the foundation of successful prospecting as long as the complex process of execution is presented in a simple format for the users to eliminate all of the possible campaign execution problems. It is necessary to create the environment for success by following a simple plan:
The optimal prospecting solution starts with data and ends with analytics, creating response and new customer models based on historical response results. Customer data is the mechanism for driving the most successful prospecting campaigns. Analytic models can be based on a variety of statistical techniques, but the key is multi-variate analysis which means that the outside attributes used to build the model(s) are viewed in combination with each other and not as a single piece of criteria. These types of analytics go far beyond simple attribute selection and ultimately give the marketer the strongest predictor of response and the largest universe available to market. No longer does the marketer exclude a record because of a missing attribute, multi-variate analysis applies weights to all attributes and will still predict responses even when a data element is missing.
• Create a representative customer file or response file from recent marketing campaigns.
• Overlay the customer/response file with as much consolidated outside data as possible consisting of the following data types: demographic, geographic, lifestyle, credit (if permissible), real estate and public records.
• Utilizing statistical techniques, a modeling firm will find the 10 to 20 attributes (from thousands) that best identify the responder/customer.
• Using the 10 to 20 model attributes, the modeler needs to score (run a statistical algorithm) on the complete franchise universe.
• Based on the statistical validation, it will be possible to determine a response threshold that doesn’t make financial sense for the business. A cut will need to be made at that point and only records scoring higher than the cut will be retained for marketing.
• Remaining records need to be loaded into a database for marketing.
• A Web-based portal needs to be implemented on the database with a simple geography filter for franchise selection purposes.
• Franchise owners are able to quickly run prospect marketing campaigns on the “best in class” marketing system.
It is important to recognize and identify opportunities to capture campaign acquisition data and build them into the portal system. Closing the campaign loop may not exist in a current environment but it must be considered in the design stage for the future from the standpoint of reporting on results. Whatever is chosen to capture the data (bar coding, centralized response, data feeds from owners, etc.) it must be consolidated, matched to campaign files generated from the system and ultimately displayed in the system at corporate and user levels.
