Marketing science at Dell: modeling investment trade-offs; George Sadler, Director, Social Media & Marketing Insights; Mu Sigma Customer Summit 2012, Half Moon Bay, CA, February 27, 2012

1. Marketing science at Dell:
modeling investment trade-offs
George Sadler, Director, Social Media & Marketing Insights
Mu Sigma Customer Summit 2012, Half Moon Bay, CA,
February 27, 2012

2. Dell’s journey to a cohesive ROI framework
 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)
2013 and beyond:
2012
Scale other uses of
model insights to
2011 Sharing best
drive investment
practices with BU
Developed the decisions and
campaign owners
analytical muscle to improve predictive
leverage multivariate Leveraging to capabilities
2010 determine next
statistical models
BI dashboards that markets
measured paid Experiment with
metrics only other uses of model
Surveys to measure insights
customer perception
2 Global Marketing

3. Partnering with
Mu Sigma has
been critical to
our success
3 Global Marketing

4. Answering
ROI questions
in a non-linear
world
4 Global Marketing

5. Measuring a campaign is hard…
Create Facilitate
Business Invest in Harvest
brand sales
Process marketing value
equity motion
• Circulation, reach, • Increased awareness, • Increased lead creation • Revenue & margin
Success frequency, & emotional attachment & quality growth measured by
is… impressions at agreed
to CPC/CPMs
& credibility total ROI
(4 components)
• OA reach & freq • Net Promoter Score • Number of leads • % Enterprise mix
Measured • TV GRP • Brand of choice • Conversion rates • Discount %
by… • Print circulation • Enterprise credibility • Win / Loss rate • Share gains
• Impressions • Core revenue
• SOV
• Total spend
product quality, CSAT, average hold times, ship to commit, pricing actions, economy, competition…
ROI begins here…but control diminishes
5 Global Marketing

6. Using sophisticated modeling techniques to
answer the ROI question
Structured Equation Models (SEM) demonstrate the causal relationships
among variables and identifies the incremental influence of each variable on
the outcome of interest (sales).
Used to:
Product
experience • Understand the human genome
Marketing & and biological traits
Marketing
pricing
• Predict and explaining historical
Purchase economic conditions
experience Brand Health
Brand Equity
• Predict social and deviant
Economy & behavior
competition
Service • Research drugs
experience
• Optimize media spend
6 Global Marketing

7. Robust models require lots of data
Product Customer Experience Promotion and Communication Externalities
Product Customer Sales Force Supply Chain Pricing Marcom Corporate Economy Competition
Attributes Service Effectiveness Strategies Spend Reputation
What the customer experiences
What the business controls directly
7 Global Marketing

8. 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
8 Global Marketing

9. Progress in
increments
Infrastructure
evolving
9 Global Marketing

10. You can
measure
more than
you thought…
10 Global Marketing

11. 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 measureable
11 Global Marketing

12. What’s next?
Quantifying
& modeling
signals from
the social
web…
Global Marketing

13. Our future
infrastructure
will drive scale
and innovation
13 Confidential Global Marketing

14. Integrating decision sciences at Dell
Clean, consistent, reliable data through:
• Consistent global definitions and standards
(E.g., common definition of “Brand messages”)
Rel CRM Transactional • Controls on data entry and upkeep
CRM (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
Rel BI Transactional • Global Brand / Marketing layer decision support
BI
Integration layer
• Transactional / Rel BI / CRM – extensions of core
definitions and models for high frequency executions
Other decision –lead management, demand gen campaign design /
Support for support areas - execution
Planning Dashboards, etc • Distribution across regions and LoBs / BU
14 Global Marketing

15. Thank You