A new data warehouse and software help improve customer retention efforts.
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Playboy.com, the online presence of Playboy magazine, had little consistency in the way units measured business performance and reported results to management. The site created reports manually, merging data from available applications and hand-entering other information. "We wanted better accuracy of data--data doesn't lie," says Scott Stephen, executive vice president of operations for Playboy Entertainment, the parent company of Playboy.com. "With better data we would know better what we should be offering customers."
Playboy.com looked for a technology that would allow the division to standardize on a series of measurements used to direct the business, focus attention on key drivers of the business, correlate marketing efforts, traffic, and attention, and determine value from affiliates. It already had much of the underlying technology in house, but needed a centralized reporting system.
The company developed a marketing performance warehouse to measure key marketing and performance data. The warehouse was built on legacy technologies where feasible. Microstrategy was added for operational and ad hoc reporting. "We had people with some familiarity with Microstrategy," Stephen says. Since the data warehouse project was being built in stages, company executives needed a reporting tool that could start simply, then could add complexity as needed.
The database platform is Oracle 9i, which the company was already using. Data integration is handled through Oracle Warehouse Builder 10g. Staying with the Oracle technology enabled Playboy.com to reduce the cost of installing and learning another database technology, Stephen says. Though Playboy.com had technicians in house, for a project of this magnitude company officials opted to bring in additional outside help from Chicago-based Acquity Group, a firm that helps manage e-commerce, content integration, and delivery projects.
"We wanted to augment our in-house skills," Stephen says. "They brought in a project manager and data extraction specialist. They designed the [data flow] and taught us how to operate the data warehouse." But adding the technology itself wasn't enough for Playboy.com to achieve business benefits. In addition to adding the Microstrategy software and Oracle Warehouse builder, Playboy.com changed much of its internal workflow.
"We turned the entire organization upside down," Stephen explains. "Many data warehouse projects fail because companies have too many ingrained beliefs and too many siloed departments. We transformed the way in which we did business, which can be overwhelming and intimidating. The company is 50 years old, so it's hard to consolidate and analyze all of that data. You have to eat the elephant one bite at a time."
Therefore, the company chose to add database functionality in three stages. The first stage was completed in August of 2004. Ongoing convergence between online and broadcast media will require expansion of the data warehouse to include the company's television and video businesses. It will also include information on video providers, international partners, affiliate partners, and new Playboy operational systems, such as a digital asset-management system.
Playboy.com worked with Acquity Group to establish a baseline of performance. This enabled the company to get accurate, real-time subscription and membership counts, and to segment the information by product and membership. Playboy.com was further able to segment active subscriptions by those that are expected to generate additional revenue versus those that aren't producing revenue now and are not expected to in the future. Since completing the first stage of the data warehouse, Playboy.com can better predict membership changes, because customers typically cancel before exiting from the system. Cash flows are predictable based on cancellations and traffic patterns.
Beyond that, the warehouse helps the company "with a plethora of daily decisions on our customers and how to meet their needs," Stephen says. "We look at the data warehouse traffic patterns to see what people are looking at so that we can offer more of that content. We would not have known [traffic patterns] the way we were operating previously. If we provide better products to consumers, then we will have higher retention rates."
By deploying Microstrategy and Oracle Warehouse Builder 10g, Playboy.com has:
reduced ambiguity of data;
increased customer retention;
monitored traffic patterns more closely and adjusted content as those patterns dictated.
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