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									Data-Driven Business Models

by Alan Weber




Building and executing the right business model is critical to success in today’s uncertain
economy. Data-Driven Business Models unlocks the code to data mining, offering mid-
to senior-level managers practical insight into how to choose and how to use the most
effective tools to measure business performance and more effectively turn their
businesses.

Measuring business performance has long been a topic of enduring interest among
marketing and other senior-level executives. This book explains business models and
strategic planning in terms of ―where the money is‖—a company’s customers and their
unmet needs and wants. The author uses this concept to show how to model and
continuously reinvent an organization to meet current customer needs.

Data-Driven Business Models combines text with a CD with ―live‖ material from actual
(anonymous) clients to marry basic notions of business modeling, data mining, and direct
marketing. The result is an unusually effective blending of theory and practice.

Product Details
Book and CD
273 pages
ISBN: 0-32422233-5
The Experts Welcome Data-Driven Business Models

Alan has given us the step-by-step approach to truly looking at our donor base. It is
needed by many not for profits across the United States.

Duana Linville Dralus
President of the Board
Mid Continent Council, Girl Scouts



Where this book seems to me to differ from many books about marketing is in its
specificity. The advice and guidelines that it offers are clear, crisp and specific. The ideas
contained in this book can be of enormous help across a wide range of industries. The
non-profit performing arts world would benefit agreat deal from applying the principles
found here.

Henry Fogel
President,
American Symphony Orchestra League



This book contains many key components of things that must be understood to run
beneficial marketing programs. Worth conscientious usage.

Barnett C. Helzberg, Jr.
Former owner of Helzberg Diamonds
Author, What I Learned Before I Sold to Warren Buffet



Data-Driven Business Models offers unique insight into database marketing. Alan Weber
created a ―how to book‖ that methodically takes you step by step through a rational
process and the benefits of change. This book is more than analytics, it is an
entrepreneurial treatise fully exploring the direct linkage between customers, business
models, teams and the need for measuring execution.

Thomas H. Holcom Jr.
VP Pioneer Financial Group
Founder, Angel Flight Central



Alan Weber's knowledge of database marketing is based on many years of hands-on
experience. He also writes extremely well. His explanations avoid jargon and concentrate
on getting his points across very clearly so that readers can understand them. There are
few experts in the industry who have both the experience and writing skill of Alan
Weber. His new book, Data-Driven Business Models is great. I love it. I can highly
recommend Data-Driven Business Models to anyone who wants to understand the
marketing industry today.

Arthur Middleton Hughes,
Vice President/Solutions Architect,
Knowledge Base Marketing, and author of
Strategic Database Marketing 2ndEd. (McGraw Hill 2000)



Almost every busy person I know wants to find ―the answer‖ on how to best grow their
business. However, so few take the time to look for those answers in a systematic way.
Even fewer have the ability to take those answers and put them into action. In his new
book Data-Driven Business Models Alan Weber gives business leaders the information
they need to set about building their organizations in a logical and strategic manner. From
the latest in business modeling to customer value indexing, Alan’s book delivers what
business leaders must know in order to achieve sustained success.

Like Peter Drucker said, ―Marketing is everything.‖ Drucker would love this book.

Steve S. Little
Senior Consultant, Inc. magazine



Alan Weber has written the definitive ―how-to‖ political bible for implementing a
database marketing program. An essential read for any business that is trying to revamp
their current database operations and systems. He shares his war stories and his tactics for
successful campaigns to win the war in database marketing. Alan’s keen insight and
careful observations come from years of experience in the trenches of database
operations. Reading the book is akin to having your own database consultant by your
side!

Pegg Nadler
Pegg Nadler Associates, Inc.
Chair of the 2003–2004 Direct Marketing Association
Non-Profit Federation Advisory Council



This comprehensive book offers a broad scoped introduction to the use of data driven
decisioning. The author offers a seamless blend of direct marketing subjects with real life
examples. This book is a must for your library.
Kurtis M. Ruf
Ruf Strategic Solutions
About the author of Data-Driven Business Models

Alan Weber is president of Marketing Analytics Group LLC, a provider of database
marketing consulting and modeling services. He a past president of the Kansas City
Direct Marketing Association (KCDMA). He was named the 2004 KCDMA Direct
Marketer of the year. Mr. Weber is co-author (with Jack Schmid) of Desktop Database
Marketing.

Mr. Weber is on the faculty of the Integrated Marketing Program of the University of
Kansas. He has lectured at other universities, including University of Missouri at Kansas
City, Central Missouri State University, and New York University. He has trained direct
marketers across North America, South America, and England.

Weber’s articles have been published in such periodicals as Target Marketing, DM News,
Direct Marketing to Business Report Operations, Operations and Fulfillment, Catalog
Age, Ingram’s, and SEMA News.
Table of contents for
Data-Driven Business Models

by Alan Weber


  Preface


  CHAPTER 1:
   Business Models: What They Are, How They Work, Why They Are Important

      Elements of a Business Model
      Business Modeling and Business Models
        Fact-Based Decision Making
        Cross-Silo Cooperation
      Types of Business Models
        Four Basic Business Model Structures
        Autonomous Business Models
      Business Models in the Environment
      Creating and Competing with Business Models
      Understanding the Internal Culture
        Describing the Unique Value Proposition (UVP)
        Information Flow Within the Business Model
        Defining Which Behaviors Can Be Measured



  CHAPTER 2:
   Describing the Customers

      Profiling
        Mapping as a Profile Tool
      Profit-Based Segmentation
      Predictive Modeling
      Descriptive Modeling
        Multi-Channel Profiling
      Overlay Data
      Survey Data
      Learning from Our Customers


  CHAPTER 3:
   Describing What Customers Do

      Tracking Behavior
    Measuring Lift
    Break-Even(s)
      Case Study: Variable Break-Even
    Profitability by Campaign
      Case Study: Profitability by Campaign
    Predictive Modeling
    Advocates, Buyers, and Tryers
      RFM vs. RFA Analyses
      Case Study: Recency-Frequency-Average Order (RFA)



CHAPTER 4:
 Quantifying Customer Behavior

    Lifetime Value
      Case Study: Lifetime Value
    Customer Value
    Customer Value Index
      Action Based on a Customer Value Index


CHAPTER 5:
 Building Customer Data Files
    The Progression of an Analysis
    Merge/Purge Is the Foundation
    Data Checks
    Relational Versus Flat Databases
    Data Format Versus Data Content
    Different Data Sources Equal Different Data Meanings
    Realistic Time-Frames
       Case Study: Business-to-Business Medical Equipment Manufacturer
       Case Study: Consumer Cataloger
    Rapid Development Approach


CHAPTER 6:
 Building a Contact Strategy

    Segmentation Is Tactical; Marketing Is Strategic
    Segmentation by Frequency of Contact
    Understanding House File Segmentation
      Who Should Be Contacted?
      What Makes Segments Different?
      What Offers Are Likely to Be Appropriate?
      Which Customers AreLikely to Be Most Valuable?
      When Should Contacts Be Made?
      Where Do Best Customers Come From?
      Which Media Are Most Effective in Making Contacts?
    House File Inventory
      Quantifying the House File Inventory
      Building Budgets and Sales Projections Using the House File Inventory


CHAPTER 7:
 The Process of Building a Business Model

    Building a Team
       Top Management as Director
       Investors
       Facilitators
       Internal Lead Roles
       Support Roles
       Employees’Personal and Professional Strengths
    Business Model Situation Analysis
    Initial Review
       Step One: Employ Database Marketing Methodology
       Step Two: Load Data
       Step Three: Data Check
       Step Four: Data Hygiene
       Step Five: Set Data Dictionary
       Step Six: Create Reports Describing the Data
       Step Seven: Data Mining
       Step Eight: Exploring and Defining Relationships
       Step Nine: Create Descriptive Statistics
       Step Ten: Predictive and Descriptive Modeling
       Step Eleven: Create Final Report Set and Define Update Report Set
       Step Twelve: Develop and Implement Strategy Based on Findings
       Step Thirteen: Adjustment Period and Scheduled Updates
       Step Fourteen: Application Development


CHAPTER 8:
 Changing the Business Model

    The Pressure for Change
      Hysteresis
      Adoption Hurdles
      Disruptive Technology
      Disruptive Competition
      Disruptive Marketplace
    The Importance of Management Push
    Obstacles to Change
      Pressure for Immediate Success
      Organization Charts Reflect Strategy
      Managing Rewards and Measurements
      Agents of Change Versus Agents of Inertia
      Knowledge of the Business of the Enterprise Is Key
    Driving Change
      Organic Growth
      Partnering
      Acquisition
      Creating a Subsidiary
      Divestment
      Specialization
      New Media Channels
      New Sales Channels
      New Constituent Relationships
      Consummating the Sale
      Pricing


CHAPTER 9:
 Case Studies

    How Profiling Changed a Business Model
    How Cluster Analysis Changed a Business Model
    How Profit-Based Segmentation Changed a Business Model
    How Predicative Modeling Improved
      Subscription Marketing Effectiveness


Index

								
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