June 21, 2005

1. Targeting Smarts = Sales Success-or-How targeting can get me to the table early in the gameDaniel G. WiestPresident, Wiest & Associates Inc. June 21, 2005

2. Today’s agenda • Targeting & Media Planning • Practical solutions with Data • LTV & RFM – how mail wins • Direct Mail as an integrated solution • Privacy • Using what’s in your database • B-to-B vs. B-to-C • Media Comparisons • Measurement

3. John Wanamaker • 1838-1922 • Developed the “department store” • pioneered fixed prices and money-back guarantees • reformed the U.S. postal system while serving as Postmaster General (1889-93) in the administration of President Benjamin Harrison

4. John Wanamaker "I know I waste half the money I spend on advertising. The problem is, I don't know which half."

5. The solution is Targeting

6. When done properly, mail wins hands down • Quality of the lead • Mail converts better • Profitability of the customer • Lifetime Value • Lower cost to maintain that customer

7. Now forget about us for a moment… • What does your customer go through when they’re deciding to use Canada Post products?

8. Put yourself in your customer’s media planning shoes

9. “Will this targeting stuff really help me in my performance review at the end of the year?”

10. What you’ll learn next: • Your customer’s choices • How to ensure Canada Post remains a choice

11. Your customer sees Canada Post as • Just one of many media choices • An additional expense that must continually be justified • Additional production, execution and tracking overhead • Often a tough up-front ROI performer • Not yet coming to the table with enough smarts about their business to justify all that

12. Here’s what media planning to target effectively really looks like…

14. Your can easily help your customer see Canada Post as… • A necessary choice that can help them reach their target customer • A marketing expense that can easily – and definitively – be tracked • A medium that can help track and lift their other media response • A stellar performer when judged by LTV: Lifetime Value

15. Some of the tools that will help you succeed include: • Understand your customer’s targeting needs – cold • Knowing how your products solve those targeting needs • Be a champion of tracking and analysis • Helping match Canada Post products that will improve her performance review

16. Helping match Canada Post products that will improve her performance review • This is not about you • This is about what metrics, attributes, performance measures your customers is being graded on • And how you can help her meet those objectives

17. What might those performance measures include? • Acquisition – I need to create more customers • Retention – I need to keep my customers from disappearing • Upsell – I need to sell more to my existing customers • Awareness – I need to make sure my potential customer know about me

18. All of those measures can be successful if you focus on: • Targeting • Measurement • ROI • …and you can win on all counts

19. A simple media plan

20. For many in the room, those plans are much more complicated… Broadcast Television Cable Radio Newspaper Internet Search Engine Optimization Magazine Banners e-mail Paid Search Engine Advertising Point of Purchase Co-op advertising Package Inserts Outdoor Community Newspapers Online Sponsorships Mail …and more

21. How can I be viewed as an expert in such complex stuff? • Understand your customer’s decision-making process • Understand where CPC fits within that process, as well as other elements in the plan • Bring solutions to the table • Add value • Help her get a better grade at the end of the year

22. I love taking notes…

23. “Do you guys have any idea how tough it is for me to figure out which media to chose for my target audience?”

24. What you’ll learn next: • How your customers target • What really matters in targeting • Where Canada Post excels in targeting

25. Understanding the Target Market Consider importance of graphic & verbal presentation of product What do you know about : TARGET MARKET Which media appeals most to target market? What is their lifestyle? When is target market most responsive time & seasonality ? How do they prefer to respond: mail, e-mail, phone, etc.?

26. Selecting Media for Direct Marketing 1.Be informed by database information 2. Be informed by media providers, research 3. Develop media test plan ACQUIRE, RETAIN, GROW, WIN BACK, AWARENESS 6. Rollout 5. Use learning to refine media plan 4. Test media

27. Using response media to target effectively DIRECT MARKETING 1-to-1 MEDIA Telemarketing Addressed Mail E-mail CUSTOMER DATABASE Web Unaddressed Fax Magazines & Newspapers DRRadio DR TV DIRECT RESPONSE MASS MEDIA

28. Focusing on the Target Market • Target market includes people who: • Already use your product/service: existing customers • People similar in profile to existing customers: prospects

29. Focusing on the Target Market • Essential to understand target market in order to: • Successfully develop relevant messages and offers • Generate an acceptable response • Effectively select media • Target market profiles, data collection and legalities of use vary according to whether they are: • Business-to-business target • Business-to-consumer target

30. Core Targeting Variables • Geographic • e.g., province, city, postal code • Demographic • e.g., Age, sex, income, number of children, marital status • Psychographic • e.g., Lifestyle, motivators, leisure pursuits, life-stage needs

31. Sources of Targeting Information Least Ease of collection Compiled Database Responder Database In-house Database Easiest Most Toughest Effectiveness of Data

32. Targeting:Effectiveness vs. Complexity Targeting Variables Ease of targeting Geographic Demographic Psychographic Least Easiest Most Toughest Effectiveness of Targeting

33. Geopost™ is getting there for psychographic targeting • Dan – L7G 4S7 • Married • Marketer • Daughter - 15 • Cats • Jeep Grand Cherokee • Classical Music • Does OK • George – L7G 4S7 • Married • Farmer • Son - 40 • Cows • 87 Cadillac • Country • Filthy Rich Known Psychographics on a house file still generally win the targeting game.

34. House list: always there for targeting • If maintained properly • If thoughtfully populated • If analyzed for the most relevant variables • If response is tracked

35. Where Canada Post can win: • Move from unaddressed to addressed • Requires a move up the targeting ladder • Demographics are a start, but… • Stretch for those psychographic variables that satisfy your customer’s target audience

36. Worksheet Questions A 1 & 7

38. “I don’t really collect any customer information. How can Canada Post possibly target anything for me?”

39. What you’ll learn next: • How to succeed – even when they’re not much data to work with • Positioning yourself as a strategic partner

40. If they do – or – will have a customer file… • They are already collecting information • You have a place to start developing targeting • You have a place to start knocking out your media competition

41. Let’s start with a real CPC example • It’s a not-for profit • Have responder history • CPC’s task: find them more of their best customers

42. A look at renewals and lapsed donors at the end of 2004 • 45% of the total donor list is considered active because they • gave in 2004 • Lost revenue from lapsed donors is almost equal to annual • donation for 2004

43. Donors Lapsed From 2003 to 2004 • Same donor renewal rate 2003/2004 • (2791/3503) = 80.0% vs 67% in 2003 • This means 20% of donors giving in 2003 did not renew in 2004

44. Change in Donor Base Size from 2003 to 2004 • The active donor base declined in size by 39 donors going • forward from 2003 to 2004.

45. Change in Donor Base Size of Previous Years • There is a significant change in donor base erosion from 2001 to 2004.

46. New Donor Acquisitions Table of Performance For Top 12 FSA’s In Winnipeg Criteria used for analyzing donor base: P ratio: Penetration ratio = number of donors within an FSA divided by total households in an FSA. Active %: active ratio is the percentage of all donors within an FSA that made a donation 2004.

47. Their top 12 FSA’s in Winnipeg 9 12 6 8 4 3 2 7 1 5 10 11

48. A look at the top Postal Walks in R3P

49. Postal Walks With Highest Affinity For Donations unaddressed addressed

50. Sample List of Postal Walks To Target With Addressed Mail