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Analytics Project

This document discusses how data analytics can help maximize the effectiveness of marketing campaigns. It outlines analyzing campaign effectiveness through regression analysis, customer segmentation using RFM scoring, and estimating return on investment for promotional campaigns. Regression models show how factors like targeted campaigns, displays and mailers influence purchases. RFM scoring segments customers into big spenders, almost churned, and almost lost. Estimating campaign costs and associated profits allows calculating a return on investment of around 2.2%, which is above the US GDP growth rate.

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Atulya Deep
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33 views

Analytics Project

This document discusses how data analytics can help maximize the effectiveness of marketing campaigns. It outlines analyzing campaign effectiveness through regression analysis, customer segmentation using RFM scoring, and estimating return on investment for promotional campaigns. Regression models show how factors like targeted campaigns, displays and mailers influence purchases. RFM scoring segments customers into big spenders, almost churned, and almost lost. Estimating campaign costs and associated profits allows calculating a return on investment of around 2.2%, which is above the US GDP growth rate.

Uploaded by

Atulya Deep
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Maximizing Campaign

Effectiveness
Through Data Analytics
April 24, 2018

Beenapreet, Somrita, Segolene, Harshad & Nitish


Contents
● Illustration of Business Problem
● Data Sourcing, Assimilation & Aggregation
● Analyzing Campaign Effectiveness through Regression Analysis
● Customer Segmentation through RFM Valuation Approach
● Estimation of ROI on Promotional Campaigns
Assessing the worth of a Marketing Campaign
Retailers adopt multiple ways as part of
promotional campaigns to entice customers to
buy more and as a result boost sales.

Marketing Strategies:
● Coupon discounts
● Loyalty discounts
● ATL & BTL Advertising

How should a retail firm determine whether


their strategies are effective?
Data Sourcing, Assimilation & Aggregation
Gauging Responsiveness through Regression
Linear regression : Descriptive

Three models were fitted:

1. All customers included:


● Do marketing campaigns affect customer purchases?

Model 1: total_cust_sales_bcox ~ top_coupon_yn + top_coupon_count +


top_mailer_count + top_campaign_count + marital_status + income
Gauging Responsiveness through Regression
2. Customers targeted/not targeted by a marketing campaign

● Factors influencing customers purchases in these two segments


● Similarities and differences in customers purchasing behavior

Model 2: total_cust_sales_bcox ~ top_campaign_count + top_display_count +


income + household_size

Model 3: total_cust_sales_bcox ~ top_mailer_count + income + household size


Predicting effects on discount availed
Logistic Regression:

To understand the effects of different variables on discount availed by a customer

● Odds Ratio for display_count is slightly larger than mailer_count


● Odds Ratio for loyalty program customers is quite high
Segmenting Households through RFM Scoring

-Big Spenders account for 25% of the segment and need to be targeted with expensive marketing strategies
-Almost Churned customers need to be targeted with aggressive price incentives, to prevent churn
-33% of the Almost Lost customers have responded to coupons - implies that the coupons may have not done a great job in preventing churn
Shopping Behavior Across Segments
Are different segments shopping across similar
stores?
BIG SPENDERS ALMOST CHURNED

STORE ID STORE ID

-As compared to Big Spenders store 343 features in the top of the most shopped store amongst Almost Churned Customers
-Store 367 seems to be a popular one across the customers
Judging the financial worth of a marketing campaign -
ROI
Determining ROI requires an estimation of both the input costs in the marketing campaigns and
the associated profits from the purchases correlated to the campaigns. Such calculations
necessitate certain assumptions on the margins

Costs:
Returns:
● Coupon Discounts
● Consider net margin of 10% on consumer
● Mailer Ads (Assume a $50 CPM - cost
goods (Business Insider)
per thousand readers)
● Screen out product transactions linked to
● Display Ads (Assume ~ $12 per banner;
promotional campaigns
consider commonly used vinyl banners)

Estimated ROI at ~ 2.20% -> Is it worthwhile? 60 bps above US GDP growth rate!

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