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Investment Optimization for Execs at Dell using Big Data
- 1. Strategic Case Study: InvestmentOptimization for Executives using Big Data Big Data Texas March 2013 Natalie Kortum Natalie Kortum marketingmathgirl.com
- 2. Was the campaignsuccessful? “We spent $10M and total revenue increased $400M… what a smashing success!” ($M) Marketing Spend ($B) Revenue 1.4 125 1.2 100 1.0 75 0.8 0.6 50 0.4 25 0.2 0 0.0 Prior Year Current Year Prior Year Current Year Other Marketing Campaign *Numbers for illustrative purposes; not actual Dell figures Natalie Kortum Global Marketing
- 3. Was the campaignsuccessful? “Marketing mix shifted, but increasing marketing spend was a good investment overall!” ($M) Marketing Spend ($B) Revenue 1.4 125 1.2 100 1.0 75 0.8 0.6 50 0.4 25 0.2 0 0.0 Prior Year Current Year Prior Year Current Year TV Print *Numbers for illustrative purposes; not actual Dell figures Online Campaign Natalie Kortum Global Marketing
- 4. What drove revenue? “Salesinvestment was the main reason for the revenue increase. Let’s cut more from Product and Support for next year.” Marketing Spend ($B) Revenue 120% 1.4 100% 1.2 80% 1.0 0.8 60% 0.6 40% 0.4 20% 0.2 0% 0.0 Prior Year Current Year Prior Year Current Year Sales People Marketing Spend *Numbers for illustrative purposes; not actual Dell figures Product Quality Support Staff Natalie Kortum Global Marketing
- 5. *Numbers for illustrativepurposes; not actual Dell figures Natalie Kortum Global Marketing
- 6. *Numbers for illustrativepurposes; not actual Dell figures Natalie Kortum Global Marketing
- 7. What impact ismarketing having on Revenue in comparison to other factors? Natalie Kortum Global Marketing
- 8. Big Data Collection Over 1100 variables used by other groups to run the business Over 100 distinct data owners (people) Over 10 different data systems Over 25 different vendors Natalie Kortum Global Marketing
- 9. Questions? Natalie Kortum3/30/2013 9 Confidential Global Marketing
- 10. Product Sales Innovation Investments Ship Commit Accuracy Marketing Support Spend Satisfaction Product Quality Pricing Natalie Kortum Global Marketing
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- 12. Questions? Natalie Kortum3/30/2013 12 Confidential Global Marketing
- 13. Explaining the Changesin Revenue Ending Revenue Starting Revenue *Numbers for illustrative purposes; not actual Dell figures Natalie Kortum Global Marketing
- 14. Explaining the Changesin Revenue Starting Revenue Ending Revenue *Numbers for illustrative purposes; not actual Dell figures Natalie Kortum Global Marketing
- 15. Questions? Natalie Kortum3/30/2013 15 Confidential Global Marketing
- 16. How investment leverscompare If $1 M additional were available to invest, what’s the marginal ROI? Marketing Marketing Social Sales Pricing Product Demand Gen Brand Media Marginal Return on Investment 0.9 X 1.3 X 0.4 X 2.2 X 4.1 X 2.5 X Natalie Kortum *Numbers for illustrative purposes; not actual Dell figures
- 17. Short-term and Long-termROIs and Cross BUs of B2B Sales Marketing Brand Product Pricing Transactional Campaign B2B Revenue in period 0.7 X 1.2 X 5.7 X 0.2 X 0X Additional long term benefits on B2B (12-18 + 0.1 X + 0.06 X - 5.4 X + 1.9 X + 2.2 X months) Cross BU Impact + 0.1 X + 0.04 X + 0.1 X + 0.1 X + 0.3 X Total Return of $1M investment in lever = 0.9 X = 1.3 X =0.4 X =2.2 X =2.5 X Natalie Kortum *Numbers for illustrative purposes; not actual Dell figuresMarketing Global
- 18. *Numbers for illustrativepurposes; not actual Dell figures Plateau Range of Sales Spends A saturated curve shows over the last 3 years that we are in the plateau stage of the S curve Revenue Current Revenue Level Sales Investments Inception Sales Investments Global Marketing Natalie Kortum
- 19. What’s in thefuture? Natalie Kortum Global Marketing
- 20. Questions? Natalie Kortum3/30/2013 20 Confidential Global Marketing
- 21. Tips for explainingto non-Technical folks • Walk a mile in their shoes. • Run your presentation past a nontechnical supporter. – Pretend your audience is your 10 year old nephew or mother. • Only two minutes (and no more!) to explain your methodology. • Create proof points for your techniques – Execs who have used this approach. – Companies/markets using this approach. – Respected PhD or Tech person they trust to back the approach. • Watch the assumptions. – Choose only two or three if you must that might be highly suspect. • Use Analogies! Natalie Kortum Global Marketing
- 22. Direct Attribution hasa big downfall • Direct = All or Nothing Traditionally Understated Traditionally Overstated Social Media Coupons Brand Campaigns Online Promotion/Referral Events Sales Corporate Social Responsibility Transactional Actions Natalie Kortum 22 22 Global Marketing
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- 24. Human Brain Network NatalieKortum 24 Global Marketing
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