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The Challenge

Accurately Attributing Marketing Spend to Customer Revenue

Neiman Marcus faces the same challenge as all multi-channel retailers: knowing what’s working and where to spend the next marketing dollar. The team needed to understand how each marketing action influenced customer buying behavior so they could make better marketing decisions.

The starting point was this: determining what marketing efforts were responsible for sales, both online and offline (call center and retail stores). The company experimented with some home grown techniques and rules to give credit to different marketing efforts. But results were consistent with many other retailers: a match-back driven approach that still allowed for false conclusions about marketing efficiency.

The Solution

Delivering Customer Interaction Insights

Neustar MarketShare combined and evaluated Neiman Marcus’s online and offline data using an analytical approach adapted from biostatistics. By modeling behavior at the individual customer level, this approach could drive customer acquisition and revenue growth by targeting individual customers—something the Neiman Marcus team liked. Neustar MarketShare reported attributed sales for all order channels (stores, web, mobile, call center) from the prior year. This allowed Neiman Marcus to see the incremental effect of email, search, catalog, and display advertising. This incremental effect of marketing takes into account non-marketing factors such as the value of the brand, seasonality, and customer driven activity, so not all of the revenue is attributed to marketing. This was the first time Neiman Marcus could see the effectiveness of each marketing channel and how they perform comparatively.

The Results

Realigned Marketing Spend and Better Targeting

Neiman Marcus can now identify the marketing that preceded a purchase – whether it was the same day, weeks ago, or months ago. This allows for optimizing spend by channel as well as personalizing marketing channels by user. After several real world tests, the company realigned substantial dollars of marketing spend and increased response with better targeting.

Next, Neiman Marcus partnered with Neustar MarketShare to conduct a rigorous in-the-mail catalog targeting test. Significantly boosting response rates is essential for expensive media such as catalog mailings. Unlike traditional methods, Neustar MarketShare’s technology better predicts who is sensitive to receiving a catalog (more likely to purchase from a catalog than other marketing treatments), and selects who should receive a catalog and who would likely purchase anyway without receiving a catalog. The test measured gross lift of Neiman Marcus brand sales across call center, online, and store sales. Since Neustar’s multi touch attribution methodology is holistic and models behavior at the individual customer level, the attribution work can also be used for predicting response and customer targeting.

According to Jeff Rosenfeld, VP of Customer Insight and Analytics for Neiman Marcus, “Using our attribution models to also target was a great proof point for us that this methodology and product really work.”

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