investment optimization for execs at dell using big data

Strategic Case Study: Investment Optimization for Executives using Big Data

Big Data Texas March 2013

Natalie Kortum

Natalie Kortum marketingmathgirl.com

Global Marketing

Was the campaign successful?

0

25

50

75

100

125

Prior Year Current Year

Marketing Spend

Other Marketing Campaign

($M)

0.00.20.40.60.81.01.21.4


Revenue ($B)

“We spent $10M and total revenue increased $400M… what a smashing success!”

*Numbers for illustrative purposes; not actual Dell figures

Natalie Kortum

Global Marketing

Was the campaign successful?

0

25

50

75

100

125


Marketing Spend

TV PrintOnline Campaign

($M)

0.00.20.40.60.81.01.21.4


Revenue ($B)

“Marketing mix shifted, but increasing marketing spend was a good investment overall!”


Natalie Kortum

Global Marketing

What drove revenue?

0%

20%

40%

60%

80%

100%

120%


Marketing Spend

Sales People Marketing SpendProduct Quality Support Staff

“Sales investment was the main reason for the revenue increase. Let’s cut more from Product and Support for next year.”


Natalie Kortum

0.00.20.40.60.81.01.21.4


Revenue ($B)

Global Marketing


Natalie Kortum

Global Marketing Natalie Kortum

What impact is marketing having on Revenue in comparison to other factors?

Global Marketing

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 Confidential 3/30/2013

Questions?

Natalie Kortum


Product Innovation

Ship Commit Accuracy

Marketing Spend

Sales Investments

Support Satisfaction

Pricing

Product Quality


Questions?

Natalie Kortum

Global Marketing

Starting Revenue


Ending Revenue

Explaining the Changes in Revenue

Natalie Kortum


Questions?

Natalie Kortum

How investment levers compare

Sales Marketing

Demand Gen Pricing

Marketing

Brand

Marginal Return on Investment

0.9 X 1.3 X 0.4 X 2.2 X

Social Media

4.1 X

If $1 M additional were available to invest, what’s the marginal ROI?


Product

2.5 X

Natalie Kortum

Global Marketing

Short-term and Long-term ROIs and Cross BUs of B2B

Sales Marketing Transactional

Pricing Brand

Campaign

B2B Revenue in period 0.7 X 1.2 X 5.7 X 0.2 X

Additional long term benefits on B2B (12-18 months)

+ 0.1 X + 0.06 X - 5.4 X + 1.9 X

Cross BU Impact + 0.1 X + 0.04 X + 0.1 X + 0.1 X

Total Return of $1M investment in lever = 0.9 X = 1.3 X =0.4 X =2.2 X

+ 0.3 X

+ 2.2 X

0 X

=2.5 X

Product

*Numbers for illustrative purposes; not actual Dell figures Natalie Kortum

Global Marketing

Inception

Sales Investments

Re

ve

nu

e

Plateau

Current Level

Range of Sales Spends over the last 3 years

Sales Investments

Re

ve

nu

e

A saturated curve shows that we are in the plateau stage of the S curve

Natalie Kortum


Global Marketing

What’s in the future?

Natalie Kortum


Questions?

Natalie Kortum

Global Marketing

Tips for explaining to 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 has a 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

22 Natalie Kortum

Global Marketing

Human Brain Network

24 Natalie Kortum

Thank You

Natalie Kortum marketingmathgirl.com

investment optimization for execs at dell using big data

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