#035 Marketing Analytics - The Marketing Process

WHY?

there types:

• Descriptive: looking at the past: what happened?
• Predictive & Prescriptive: looking at what will happen, what will happen in AB testing

Marketing Analytics brings more money.

UNDERSTAND MARKETING PROCESS

Start with Objectives

• customer
• company
• competitor
• collaborators
• context

to Strategy

• Segmentation
• Targeting
• Positioning

to Tactics

• Product
• Price
• Place
• Promotion

to Financials

• Margin
• ROI

Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability.

To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.

\[\text{ROI} = \frac{\text{Current Value of Investment - Cost of Investment}}{\text{Cost of Investment}}\]

• CLV

Customer lifetime value (CLV) is the total revenue or profit generated by a customer over the entire course of their relationship with your business.

\[\text{Customer lifetime value} = \text{Number of purchases} * \text{Value of purchase} * \text{Average customer lifespan}\]

AIRBNB MARKETING PROCESS

Objectives

Airbnb is a home-sharing site that connects travelers with hosts who offer unique places to stay.

Hot to improve customer experience?

• Customer: you and me
• Company: Airbnb
  • capability: protal itself & allowing customer to look for places available on the portal
• Competitor: Hotels
  • feature
• Collaborators: You and me
• Cotext: Sharing Economy

Strategy

Segmentation

the way to categorize customers & their feature

• Location
• Adventure
• Price
• Vacation
• Family
• Students

Targeting

looking at which segment to focus on

for example: Family

Positioning

what is the value proposions that Airbnb proposes for families?

A value proposition in marketing is a concise statement of the benefits that a company is delivering to customers who buy its products or services.

value proposion -> customer’s need

Tactics

• Product: apartment…
• Price: …
• Place: …
• Promotion: reviews…

Financials

how does Airbnb make money?

Guests -6-12% Reservation subtotal-> Airbnb <- 3% Service fee- Host

AIRBNB STRATEGY CHALLENGE

• How do we improve the rental prospects for our hosts and identify better rental options for our guests?
  • How do we leverage the user generated content on our website?
  • Is there value in improving the pricing of properties?

Solve it with Data

build a Mental Model

Predictive Model: \(\text{Profit Per Property} = \text{Price} * \text{Num of Rentals} * \text{Minimum Stay} * \text{Gross Margin(\%)}\)

Num of Rentals

• Star Rating
• Review
• Property Attributes

Reviews

Text Analytics: special software + keyword(property) maybe AI?

finally get a number R and plug it into predictive model.

the rest

and finally know what element decides the wishlist num.

Insights Gained

different region -> different elements -> Regional Strategy

TAKEAWAYS

• Marketing is art and scenice.
• Analytics provides marketing managers the opportunity to test intuition about marketing.
• Insights from analytics can challenge widely held assumptions.
• Confidence in decisions that flow out of marketing process is higher when it is informed by analytics.