How it works
The data warehouse is a repository
that holds the company’s sales and
operational history, as well as
relevant economic and trade
information from other sources.
The data goes through three stages
before it is stored in the warehouse,
which makes it usable for analytical
purposes. Once stored, the data
may be accessed by all areas of
a company—from accounts and
operations to sales and marketing.
Data warehousing
The data is often used to assess
beliefs and intuitions about
the business. For example,
the marketing manager of a
power tools company might
presume that 25–35-year-old
men are more likely to purchase
their products than women in
the same age bracket. The
manager would test this belief
by analyzing sales data and
customer records accessed from
the data warehouse.
Warehousing process
The data stored is regularly updated. When the business requires information
from the warehouse, it is transformed into an accessible format and analyzed
using software tools.
Tapping data sources
The information a company collects
includes online transaction processing
(OLTP) data, historical data, and data
from external sources.
Staging data
The ELT process
converts raw data
into a usable format.
50%
of companies
surveyed in 2011
were not sure their
data warehouses
were future-proof
OLTP
Includes
transactions such
as sales and
refunds recorded
via OLTP
HISTORICAL
DATA
Repository
of past sales
information
EXTERNAL
DATA
Includes
government
statistics on
business
EXTRACT,
LOAD,
TRANSFORM
(ELT)
The process of data warehousing involves information from a company’s
internal system, such as invoices and sales logs, as well as data from
outside sources, being filed away in an electronic vault.
USABLE
FORMAT
USABLE
FORMAT
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how sales and marketing works
Information management
Storing data
The data is stored in three
sections: metadata, summary
data, and raw data.
Accessing data
Using software, the data can be
analyzed and retrieved in three
ways: via online analytical
processing (OLAP), reporting
tools, and data mining.
Metadata
Information
relating to the
data itself
SuMMary
data
Business activity
information
raw data
The original
form of the
information
OLaP
Accesses data to
answer specific
questions
rePOrting
tOOLS
Presents data as
tables or graphs
data Mining
Finds detailed
patterns in data
for analysis
Finance
“What was profit
margin on product
sold in a region?”
Marketing
“How did online ad compare
to poster ad campaign?”
SaLeS
“What are average sales
of product by region?”
HuMan reSOurceS
“How much have we spent
on contract staff this year?”
WHO USES THE DATA WAREHOUSE?
The key departments of a company
can access the data warehouse to find
out how they are performing. The
method in which the data is formatted
and stored makes it possible for them
to seek answers to questions relevant
to them. Typical questions various
departments might ask include:
$
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256 257
how sales and marketing works
Information management
Storing data
The data is stored in three
sections: metadata, summary
data, and raw data.
Accessing data
Using software, the data can be
analyzed and retrieved in three
ways: via online analytical
processing (OLAP), reporting
tools, and data mining.
Metadata
Information
relating to the
data itself
SuMMary
data
Business activity
information
raw data
The original
form of the
information
OLaP
Accesses data to
answer specific
questions
rePOrting
tOOLS
Presents data as
tables or graphs
data Mining
Finds detailed
patterns in data
for analysis
Finance
“What was profit
margin on product
sold in a region?”
Marketing
“How did online ad compare
to poster ad campaign?”
SaLeS
“What are average sales
of product by region?”
HuMan reSOurceS
“How much have we spent
on contract staff this year?”
WHO USES THE DATA WAREHOUSE?
The key departments of a company
can access the data warehouse to find
out how they are performing. The
method in which the data is formatted
and stored makes it possible for them
to seek answers to questions relevant
to them. Typical questions various
departments might ask include:
$
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How it works
In order to best understand their
audience, marketing departments
define their ideal customer by
developing a customer profile.
They build this profile by gathering
information about the kind of
person who usually buys the type
of product they wish to introduce to
Customer profiling
the marketplace. The information
they look at includes basic data
about a person, such as gender, age,
occupation, and salary, as well as
more detailed ideas concerning
the person’s typical spending habits,
such as the places where they
like to shop and the amount they
tend to spend.
Psychographic view
Personality Outspoken; likes
to stand out from the crowd
Attitude Positive outlook and
enjoys the good things in life
Ethic Works hard and believes
in contributing to social causes
Demographic
variables
Geographic
variables
Sociographic
variables
Behavioral
variables
Psychographic
variables
Segmentation model
By constructing a segmentation model, layered with a number of variables
(different levels of information) about consumers, marketers can gradually build
up a clear picture of their ideal target customer—in this case, for a travel company.
Takes two or
more getaway
trips per year
with family
Woman, age 35 to 54, with household
income of $85,000+
Lives in New York City metropolitan area
Wants to get in shape while
on vacation
Shares with 125 friends on social media
Marketers can create detailed portraits of customers using internal
company data on their purchase habits, preferences, and lifestyle, and
cite external data sources to learn about attitudes and social trends.
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258 259
HOW SALES AND MARKETING WORKS
Information management
75%
of marketers say
personalization
could have a
significant effect
on customer
retention
Customer
profile
dimensions
What does the ideal customer look
like? Where do they live? What do
they spend their money on?
Behavioral view
Shopping location Prefers
to shop in smaller stores
Purchasing habits Buys in
bulk to save money, responds
to discounts
Degree of loyalty Faithful
to a brand, but open to
better offers
Sociographic view
Social media Actively shares
interests with connections
Community Influential
member who socializes and
contributes to neighborhood
Groups and clubs Member of
bird-watching and hiking groups
Demographic view
Age group 35–54 (helps
gauge family priorities and
income)
Status Married (children affect
spending choices)
Occupation and salary
Teacher, $65,000
Geographic view
Continent North America
City Booming metropolis with
work and social opportunities
Climate Varies from below
freezing in winter to hot and
humid in summer
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258 259
HOW SALES AND MARKETING WORKS
Information management
75%
of marketers say
personalization
could have a
significant effect
on customer
retention
Customer
profile
dimensions
What does the ideal customer look
like? Where do they live? What do
they spend their money on?
Behavioral view
Shopping location Prefers
to shop in smaller stores
Purchasing habits Buys in
bulk to save money, responds
to discounts
Degree of loyalty Faithful
to a brand, but open to
better offers
Sociographic view
Social media Actively shares
interests with connections
Community Influential
member who socializes and
contributes to neighborhood
Groups and clubs Member of
bird-watching and hiking groups
Demographic view
Age group 35–54 (helps
gauge family priorities and
income)
Status Married (children affect
spending choices)
Occupation and salary
Teacher, $65,000
Geographic view
Continent North America
City Booming metropolis with
work and social opportunities
Climate Varies from below
freezing in winter to hot and
humid in summer
US_258-261_Customer_Profiling_Steve.indd 259 02/12/2014 14:58
CUSTOMER PROFILING
website data
How often do they visit the site?
Which web pages do they look at?
Creating a customer profile
By constructing a profile of an existing customer using data from within the
company, marketers have a clearer view of the buying patterns and habits
of an individual. They can then make projections about the long-term
value of that individual as a customer.
Customer
profile
social data
Which social media networks are they
connected to? Do they share links?
transaction data
How much have they spent, how
often, and on which products?
crM data
What’s their contact history with call
centers? How have they responded
to campaigns?
loyalty data
How loyal are they to the company? Do
they use the company loyalty program?
Mail data
What email contact has there been?
What has the response rate to emailed
content been?
point of sale
What observations have sales staff
made from interacting with customer?
www
@
$
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260 261
how sales and marketing works
Information management
“Once you understand
customer behavior,
everything else falls
into place.”
Thomas G. Stemberg
Good customer
Returns frequently to
make repeat purchases
Responds to marketing
and in-store promotions
Shares favorite products on
social media networks
Signs up for newsletters
and special offers
Bad customer
Bombards call center
with complaints
Frequently returns products
for full refund
Never joins loyalty programs
or signs up for newsletters
Spends less money than
the cost of courting them
Assessing customer profile
Three ways to use a customer profile
Tailor content to suit customer By sending out
personalized messages and experiences, businesses
engage customers and build a long-term relationship.
Sell more to existing customer Mining customer
profiles to see their spending habits, likes, and interests
enables marketers to make personalized offers.
Reward loyal customers Identifying good customers
and offering gifts and incentives tailored to their tastes
increases customer lifetime value.
1
Managerial and
professional
Middle management
Clerical and junior
management
Skilled manual workers
Working class
Non-working and
low-paid workers
2
3
Once marketers have gathered data
and identified their ideal customer
profile, they can compare their
customer to a number of commonly
used systems of segmenting, or
characterizing, consumers. In the
US, there are many systems, but one
of those most well-known is that of
the Nielsen company, which uses
more than 60 segments that have
names like “Boomtown singles”
and “Up-and-comers.”
In the UK, customers may be
compared to the simple system
of socioeconomic class:
SEGMENTATION
SYSTEMS
Omnichannel customer
Consumer who shops using
multiple channels, including
store visits, mobile apps,
and websites
Loyads Customers who are loyal
to a provider and champion them,
bringing in other customers
in the process
360-view Profile that gives
marketer a complete picture of
a customer, making it possible to
predict their needs and behavior
NEED TO KNOW
A
B
C1
C2
D
E
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