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The document discusses key metrics to evaluate the effectiveness of a marketing campaign, particularly the 'First Month Free' promotion, revealing that it attracted 37.81% of customers, but the 'First Month Half Off' promotion was more successful at 66.62%. It suggests that CubeSmart must ensure customers who receive the free month promotion stay longer than those without promotions to break even, while also recommending RFM analysis and logistic regression for targeted marketing. Additionally, it proposes leveraging modern technology such as predictive analytics and data visualization tools to enhance lead generation and optimize marketing strategies.

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6 views6 pages

Case Study Solution

The document discusses key metrics to evaluate the effectiveness of a marketing campaign, particularly the 'First Month Free' promotion, revealing that it attracted 37.81% of customers, but the 'First Month Half Off' promotion was more successful at 66.62%. It suggests that CubeSmart must ensure customers who receive the free month promotion stay longer than those without promotions to break even, while also recommending RFM analysis and logistic regression for targeted marketing. Additionally, it proposes leveraging modern technology such as predictive analytics and data visualization tools to enhance lead generation and optimize marketing strategies.

Uploaded by

ds8gjddjcb
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1) What are key metrics to assess the effectiveness of this marketing campaign?

How
would you go about assessing the effectiveness of the first-month-free promotion?

Ans: There are several key metrics that could be used to assess the effectiveness of this
marketing campaign. All these metrics are based on descriptive statistics:

a) It could be seen that out of all the customers within the sample dataset, 37.81% of the
customers rented when they were given the ‘First Month Free’ promotion compared to the
rest of the promotions or no promotion. Another interesting insight is that people who were
not offered any promotion were the second highest category with 19.23% customers in the
sample who rented from CubeSmart

b) When comparing customers who rented within each promotion category, it could be seen
that only 66.62% customers who were given the ‘First Month Free’ promotion rented
compared to the ‘First Month Half Off’ and ‘Two Months Half Off’. According to this result,
the First Month Half Off campaign is the most successful.
c) If we do a promotion comparison based on the source of booking, we can see that for First
Month Free promotion, 19.55% of the total customers used Web Reservation. It is
interesting to see that it is almost equivalent to the total number of customers that
CubeSmart gained without any promotion (based on sample dataset)
2) There is a "cost" (in lost revenue) for providing free month promotions. How effective of
the free-month promotion would CubeSmart have to see to "break even" on the
Promotion (while comparing with no promotion)?

Ans: For CubeSmart to make profit, we need to make sure that customers who were
given the First Month Free Promotion rent with CubeSmart on average a month longer
than those customers who are not offered any promotion.

Note: For actual breakeven calculation, we could require the cost information as well
which is missing from the dataset. Hence a qualitative approach has been used in the
above answer.
3) Rentals with earlier move-in dates more likely have moved out that later rentals, and
many rentals have not moved out as of the 6/11/2014 when the data was pulled. What
techniques can you employ to estimate the average length of stay (# of months of stay)
by each of the promotions?

Ans: By eyeballing the data, we can see that there are a lot of missing data. One
technique that can be used is to take the average of each category without considering
the null values. This information can then be used and added to the move in date to
calculate the move out date.
4) The actual rent that a customer pays is based on promotion and concession. If you were
asked to set up a campaign that leverages both promotions and concessions to
maximize return-on-investment (ROI). How would you propose to design the campaign?
(including design, what data to collect, analysis to do be done before and after the
campaign)

Ans: There are two different models that can be used to do a target marketing campaign
for each promotion.

1) RFM Analysis: This analysis would use the past customer data to analyze three key
variables (recency of rent, frequency of rent, total monetary value of rent). A test
dataset would be created to give each customer a score. This would allow us to
segment the customers based on the following traits:

• Who are the best customers?


• Which of the customers could contribute to CubeSmart churn rate?
• Who has the potential to become valuable customers?
• Which of the customers can be retained?
• Which of the customers are most likely to respond to promotion campaign?

Once these customers are given an RFM score, they will be visualized using a frequency
chart (bar chart) for each score and will be compared to the Break-Even amount (calculated
using the cost price, discounts and offers). After this the potential scores will be chosen who
will be potential clients and give the maximum ROI. Eventually only those customers will be
sent a promotion who will have a high probability of renting from CubeSmart.

2) Logistic Regression: logistic regression can be used to analyze the response variable as a
function of several independent variables (e.g., number of times rented) and provide an
equation that can calculate the response probability for the entire customer dataset.
CubeSmart can then give a specific promotion to everyone left in the dataset (excluding
those in the test) who has a probability higher than the break even percent.
5) (Knowing that you may not have practical experience in self-storage industry) How
would you propose that CubeSmart may leverage modern technology for lead
generation, acquisition, conversion, search engine optimization, price optimization,
market research, competitive intelligence? You may choose one or more areas to
answer this question.

Ans:
1) Using Predictive Analytics like RFM, Logistic Regression and Decision Tree
Modelling using a tool like SPSS or Python. This will reduce the time spend in
guess who is ready to buy and focus more time on closing new deals.

2) Create Comparison matrix using the freely available data on the web about
CubeSmart’s direct competitors, the industry and customer behavior on search
engine websites.

3) Use machine learning techniques for search engine optimization. This would
involve gathering the data using keywords our competitors are ranking for and
training this model to predict rankings of optimized landing pages.

4) Use data visualization tool like Tableau to understand customer demographics


and sales metrics to highlight unnecessary operational cost and effectively align
strategy with tactics.

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