charles de gruchy strategy doc toys r us

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RESTRUCTURED

RFP RESPONSE EVALUATION

FOR

MARKETING DATABASE MANAGEMENT,

MARKETING AUTOMATION AND

ANALYTICS SERVICES

BASED ON:

1. STRATEGY

2. DATA MANAGEMENT

3. ANALYTICS

June 16, 2008

CEM 4.10.7

2

1. Background:

1.1 The re structured RFP

1.2 Objectives

1.3 Purpose of restructured RFP

1.4 Gaps within the RFP as a result of the re structuring

1.5 Revised evaluation stages and process

1.6 Restructure RFP content

2. Evaluation:

2.1 Point of view behind the participant scoring

2.2 The scoring system

2.3 Participants overall scoring:

2.3.1 Strategy

2.3.2 Data Management

2.3.3 Analytics

2.4 Short list recommendation based on the restructuring

2.5 Short list recommendation

2.6 Short list detailed performance

2.7 Harte-Hanks recommendation

3. Next Steps

Appendix

(A) Evaluation approach

CONTENTS

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BACKGROUND

4

1.1 THE RE STRUCTURED RFP

The RFP content and submissions have been re structured into three

categories of response as follows:

1. Strategy and account management

2. Data management

3. Analytics

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1.2 OBJECTIVES

The revised objectives for development of a category based RFP are:

1. To identify ‘best of breed’ within each functional category

2. To understand capabilities

3. To award TRU/BRU marketing database management based on

category expertise

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1.3 PURPOSE OF THE RE STRUCTURED RFP

The purpose of re structuring is to

1. Summarize the response submissions based on a performance

criteria within a more tightly defined set of criteria

2. Apply that criteria to identify strengths and weaknesses,

3. Identify ‘best of breed’ within each performance category, and

4. Evaluate vendor capabilities with the intent of offering out the

business to more than one vendor by category of expertise.

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1.4 GAPS WITHIN THE RFP AS A RESULT OF THE RE STRUCTURING

As a result of the re structuring of the RFP the analytics category

fails to deliver an in-depth exploration of vendor capabilities as well

as a complete review of industry ‘best of breed’ practitioners.

Recommendations are provided to build out this RFP category to

meet the review objectives.

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1.5 REVISED EVALUATION STAGES AND PROCESS

Stage 1 – Completed initial scoring of the 7 participants and recommended

short list of three

Stage 2 – Re structure initial scoring by category and make

recommendations regarding:

A. participants

B. RFP questions and focus by category

Stage 3 – Identify and select additional vendors to receive the enhanced

category RFP.

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1.6 RE STRUCTURED RFP CONTENT

The re structured RFP is divided into 14 sections as follows:

SECTION NAME SECTION # QUESTION

2.4.5 Customer Segmentation and Modeling

2.4.6 Strategy and Enablement

2.7 Client Service

2.9 Training methodologies

2.3 Data warehouse management

2.4 Marketing automation services and reporting

2.4 Campaign management

2.4.2 Reporting, software installation and

maintenances

2.4.7 Facilities and data safeguarding

2.5 Technology

2.6 Implementation & migration

2.8 Testing methodology

2.4.3 Reporting

2.4.4 Analytical leadership

DATA MANAGEMENT

ANALYTICS

STRATEGY

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1.4 SUBMISSIONS

Seven participants responded:

Acxiom

Allant

Epsilon

Equifax

Harte Hanks

Merkle

Rapp Collins

The Forrester Wave, Database marketing Services Providers Review

(November 2, 2007) included all the TRU/BRU RFP participants in their

evaluation. Forrester results are referenced following.

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RE STRUCTURING THE CURRENT

EVALUATION

12

2.1 POINT OF VIEW BEHIND THE PARTICIPANT SCORING

The participant scoring rewards participants who delivered on the following:

Added value

Integrated service offering

Integrated channel view

Flexible account structure

Flexible services organization

Participant performance levels (ranking and scoring within each of the RFP

categories) reflect the degree to which the participant answered the

following questions in the body of their answer.

1. How well did the answer address the stated needs of TRU/BRU?

2. Did the participant answer the question?

3. Was the content directly, or indirectly, relevant to the question

asked?

4. Did the answer meet or exceed the standard set by the other

participants?

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2.2 THE SCORING SYSTEM

The design of the RFP questions provides for two types of answers. The first

type answers the question “what”, and the second, is more “open ended”*.

The scoring system is the same for each type of question and is based on a

three part score of 1-3-9 with the following interpretation assigned to “what”

questions:

A score of ‘9’ for high or added value performance

A score of ‘3’ for medium or met the performance minimum standard

A scored of ‘1 for low, or were below the relative standard established

by the other participants.

And, with the following interpretation for the “open ended” questions:

A score of ‘9’ equals exceeded the requirement

A score of ‘3’ equals partial, either incomplete or unclear

A scored of ‘1 equals either an answer was not given or the answer

was not relevant.* See appendix (A) for examples

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While all participants performed strongly Allant, Equifax and Merkle emerged

as the three strongest contenders.

Despite their overall leadership, each firms response raises further questions

that need exploration, as follows:

Migration process

Client service integration with analytics services

Integrated analytics services (on and off line)

Work flow management and TRU/BRU resources

Ability to scale to service a business the size of TRU/BRU

Questions regarding geography and travel

VS

TARGET

SCORE VS

TARGET

SCORE VS

TARGET

SCORE VS

TARGET

SCORE VS

TARGET

SCORE VS

TARGET

SCORE VS

TARGET

SCORE

All COMBINED TOTAL 72% 771 82% 870 73% 776 89% 950 74% 787 88% 932 75% 798

VENDOR PERFORMANCE

ACXIOM ALLANT EPSILON EQUIFAX HARTE-HANKS MERKLE RAPP COLLINSSECTION NAME

2.3 PARTICIPANTS OVERALL SCORING RESULTS

1 23* See scoring detail document for more information

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2.4 SHORT LIST RECOMMENDATION

Allant, Equifax and Merkle emerged as the three strongest contenders

among the seven participants based on providing a consistently high

level of understanding of the processes and steps/stages required to

meet TRU/BRU stated objectives and service delivery levels. It is

recommended that they form the short list.

Out of a total potential of 1,065 points all three achieved over 80%.

VS

TARGET

SCORE VS

TARGET

SCORE VS

TARGET

SCORE

All COMBINED TOTAL 82% 870 89% 950 88% 932

VENDOR PERFORMANCE

ALLANT EQUIFAX MERKLESECTION NAME

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2.5 SHORT LIST RECOMMENDATION AND FORRESTER

The selected contenders – Allant, Equifax and Merkle – were also

identified by Forrester as “leaders” within their evaluation

However, Forrester’s conclusions are consistent with this evaluation in

noting the following gaps even among the leaders:

poor project management

Limited integration of on and off line capabilities

Relative degrees of proactive service

Merkle, alone among the evaluated companies, achieved 7 measures

with scores over 80%, notably account and analytical services were two

of the categories.

See chart following

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2.5 SHORT LIST RECOMMENDATION AND FORRESTER

CURRENT OFFERINGSCORE

TARGETVS TARGET SCORE VS TARGET SCORE VS TARGET SCORE

Account management & service delivery 5 77% 3.85 78% 3.88 84% 4.20

Strategy services 5 80% 4.00 70% 3.50 73% 3.63

Data and data sourcing services 5 62% 3.10 66% 3.28 87% 4.35

Database management 5 56% 2.80 62% 3.10 70% 3.50

Data processing 5 0% 0.00 0% 0.00 0% 0.00

Analytical services 5 91% 4.55 53% 2.65 93% 4.65

Creative services 5 0% 0.00 20% 1.00 73% 3.65

Execution 5 51% 2.55 14% 0.70 84% 4.20

Measurement 5 0% 0.00 0% 0.00 0% 0.00

Technology capabilities 5 76% 3.80 88% 4.40 96% 4.80

Integrated services 5 65% 3.25 75% 3.75 90% 4.50

Other capabilities 5 62% 3.10 56% 2.80 62% 3.10

Midmarket capabilities 5 48% 2.40 88% 4.40 36% 1.80

Industry capablities 5 49% 2.43 57% 2.85 88% 4.40

Sales channel capabilities 5 49% 2.43 0% 0.00 0% 0.00

Contracts and pricing 5 0% 0.00 0% 0.00 0% 0.00

TOTAL 80 48% 38.26 45% 36.31 58% 46.78

MERKLEFORRESTER VAVE EVALUATION, November 2007

ALLANT EQUIFAX

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2.6 SHORT LIST DETAILED PERFORMANCE, CASE STUDIES

RFP 2.2 Case studies -- were relevant to the TRU/BRU RFP focus

and illustrated how they would add value to the TRU/BRU business

(s).

Allant’s TWEEN BRANDS case specifically addressed points

relevant to the TRU/BRU business, for example, data quality, timely

information, access to data, etc.

SCORE

TARGET

VS TARGET SCORE VS TARGET SCORE VS TARGET SCORE

2.2

TOTAL CASE

STUDIES,

REFERENCES

99 100% 99 100% 99 82% 81

SECTION NAME ALLANT EQUIFAX MERKLE

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2.6 SHORT LIST DETAILED PERFORMANCE , DATA WAREHOUSE

RFP 2.3 Data Warehouse Management -- All three presented strong,

detailed and believable data management cases and descriptions.

In addition, each participant presented a flexible, “we’ll work with

you” point of view.

SCORE

TARGET


2.3

TOTAL DATA

WAREHOUSE

MANAGEMENT

315 78% 247 84% 265 82% 257


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2.6 SHORT LIST DETAILED PERFORMANCE, AUTOMATION

RFP 2.4 Marketing Automation -- Allant articulated the issues related

to the integrated TRU/BRU marketing environment best, followed by

Equifax and Merkle.

Each response was a positive set up for the following section –

campaign management.

SCORE

TARGET


2.4

TOTAL MARKETING

AUTOMATION

SERVICES

9 100% 9 100% 9 100% 9


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2.6 SHORT LIST DETAILED PERFORMANCE , CAMPAIGN MANAGEMENT

RFP 2.4.1 Campaign Management – While Allant is clearly capable

of delivering a high level of support their response was not as well

articulated as Equifax and Merkle and the overall impression created

not as strong.

SCORE

TARGET


2.4.1TOTAL CAMPAIGN

MANAGEMENT117 57% 67 88% 103 88% 103


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2.6 SHORT LIST DETAILED PERFORMANCE, SOFTWARE

RFP 2.4.2 Software – Equifax presented the strongest integration

story with current TRU/BRU technologies.

The understanding of upgrades costs and ongoing upgrades needs

to be built more clearly into the go forward.

SCORE

TARGET


2.4.2 TOTAL SOFTWARE 72 75% 54 92% 66 89% 64


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2.6 SHORT LIST DETAILED PERFORMANCE, REPORTING

RFP 2.4.3 Reporting – While the staffing models outlined by each

participant are clear the report creation process will need leadership

that none of the participants is offering to provide. Allant, Equifax and

Merkle are looking for leadership from TRU/BRU and the

identification of a project leader for the migration.

Equifax and Merkle offer the most flexible staffing approach.

SCORE

TARGET


2.4.3 TOTAL REPORTING 27 70% 19 100% 27 100% 27


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2.6 SHORT LIST DETAILED PERFORMANCE, ANALYTICS

RFP 2.4.4 Analytical Leadership – Analytics services are offered on a

project basis with commitment of senior analytics staff on a

permanent basis to the business. Staffing needs to be clarified within

the scope of work and specific individuals identified together with

their allocation.

A key question is how this function will be coordinated between TRU

and BRU. Each participant has expressed concerns re: workflow

management.

SCORE

TARGET


2.4.4TOTAL ANALYTICAL

LEADERSHIP72 100% 72 92% 66 81% 58


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2.6 SHORT LIST DETAILED PERFORMANCE, SEGMENTATION

RFP 2..4.5 Segmentation – It is Unclear how analytics is built into the

staffing model relative to project work.

Merkle presented the clearest structure and options but all

contenders need to be more specific, e.g. who will lead; how will

analytics be integrated into the account function; what are the work

flow issues, etc.

SCORE

TARGET


2.4.5

TOTAL CUSTOMER

SEGMENTATION

AND MODELING

27 78% 21 78% 21 100% 27


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2.6 SHORT LIST DETAILED PERFORMANCE , STRATEGY

RFP 2.4.6 Strategy and Enablement – The Equifax response did not

present a confident description of how strategic services, including

analytics, would be enabled. Example provided did not help.

Allant and Merkle provided a stronger staffing story with Merkle

leading.

SCORE

TARGET


2.4.6TOTAL STRATEGY

AND ENABLEMENT18 67% 12 67% 12 100% 18


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2.6 SHORT LIST DETAILED PERFORMANCE, FACILITIES

RFP 2.4.7 Facilities – All of the participants provided security

solutions within acceptable frameworks. Merkle provided added

security options not provided by the others.

SCORE

TARGET


2.4.7

TOTAL FACILITES

AND DATA

SAFEGUARDING

99 94% 93 94% 93 100% 99


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2.6 SHORT LIST DETAILED PERFORMANCE, TECHNOLOGY

RFP 2.5 Technology – All participants recommended a dedicated T1

line for communications management and all participants anticipate

large data transfer volumes.

A key question that is not answered clearly by Merkle is how they will

integrate the full scope of the TRU/BRU business while maintaining

stated levels of service and support.

SCORE

TARGET


2.5TOTAL

TECHNOLOGY63 86% 54 86% 54 76% 48


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2.6 SHORT LIST DETAILED PERFORMANCE, IMPLEMENTATION

RFP 2.6 Implementation– the issues related to a potential transition

appear to be best understood by these three contenders.

More specifics need to be provided on how the transition will be

managed and examples of successful transitions of the scale under

consideration.

SCORE

TARGET


2.6

TOTAL

IMPLEMENTATION

AND MIGRATION

36 100% 36 100% 36 83% 30


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2.6 SHORT LIST DETAILED PERFORMANCE, CLIENT SERVICE

RFP 2.7 Client Service – Merkle presented the most coherent client

service case although all participants did poorly describing the

migration strategy. Further detail needs to be provided client service

structure and day-to-day operating practice.

SCORE

TARGET


2.7TOTAL CLIENT

SERVICE93 85% 79 94% 87 100% 93


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2.6 SHORT LIST DETAILED PERFORMANCE, TESTING

RFP 2.8 Testing – Testing protocols are consistent across all three

contenders.

SCORE

TARGET


2.8TOTAL TESTING

METHODOLOGIES153 100% 153 88% 135 92% 141


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2.6 SHORT LIST DETAILED PERFORMANCE, TRAINING

RFP 2.9 Training – Training methodologies are not all equal with

Merkel presenting the most customized and flexible point of view,

e.g. they will work with TRU/BRU to develop the optimal program and

will provide individual training sessions which the others did not

mention.

SCORE

TARGET


2.9TOTAL TRAINING

METHODOLOGIES45 60% 27 87% 39 100% 45


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2.7 HARTE-HANKS RECOMMENDATION

Harte-Hanks ranking relative to the other participants was surprisingly

low in light of their long tenure on the business.

Their presentation of facts was weak in the following areas:

a) Migration process – this was not clearly defined

b) Staffing – e.g. how will the proposed structure address

current deficiencies.

c) Client support structure, e.g. what will be different now

vs. the current structure (integration issues)

d) Training – a self service option was not defined

Based on their incumbency it is recommended that they be included in

the short list based on addressing the gaps above.

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NEXT STEPS

35

3. NEXT STEPS

1. TRU/BRU internal review of this evaluation.

2. TRU/BRU confirmation (or change) of short list candidates.

Meanwhile, consultant will

1. Complete detailed side-by-side cost comparison of short list

candidates. (A top line review indicates that the contender’s

approaches are consistent with an “all in” approach to fees).

2. Develop business problems/questions for in-person presentation

by short list contenders.

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APPENDIX

37

(Appendix A) EVALUATION APPROACH

The questionnaire design presents limitations to the application of a

single evaluation approach:

Example 1: Provide client success story that best highlights your ability

to handle requirements, section 2.2

Comment: Because the question focus is broad answers from the

participants range from a marketing problem/solution (Harte Hanks) to

more specific database marketing examples (Merkle). As a result

measurement of participant performance is rated based on both the

relevance and strength of the case study.

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Example 2: Describe the process to prepare data for specific uses by the

marketing automation tools, section 2.3.14

Comment: The question did not clearly indicated that an answer is

required or that it optional to defer an answer to the discovery stage post

hire. As a result some participants did exactly that (Allant, Epsilon) versus

the others who clearly described the process (Epsilon, Equifax, Merkle)

or addressed a specific within the process (Harte-Hanks, Rapp Collins).

As a result non responders or those not addressing broader process

issues were penalized in review.


39

Example 3: Describe in detail, assignment of a household key based on

assigned individual key, section 2.3.17

Comment: The questions in this section were specific and well defined.

The participants, as a result, had a clear framework in which to specify

their answers. Evaluation of the outcomes was straightforward based on

the degree to which the participant detailed the process and the outcome.

For example, appending of key demographic/lifestyle data Acxiom

provided the most detailed description with a clearly defined outcome.

The other participants while describing the process did not add further

value. Axciom was rated high and the other participants medium in

performance.


40

Example 4: Describe how your organization will provide the same

customer data that is required for domestic customers and international

customers.

Comment: Because this questions was very broad it left too much

discretion to the participants to define the outcome. The result was that

Acxiom focused on their credentials without “describing” and scored

medium. Allant, Epsilon and Harte-Hanks provided very literal answers

and scored high. Merkle and Rapp Collins didn’t address the question

completely and were ranked low.


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1.3 CONSIDERATIONS

• What is a successful database marketing service vendor today?

Marketing database service providers, to be successful, must exceed price

of entry levels of service and performance:

A. Price of Entry: The design, build and management of marketing

databases is no longer the baseline for performance it was five years

ago.

B. Point of Difference: With the trend to integration of the on and off line

channels of sales together with rapid growth and diversification of

alternative medias in driving retail, marketing database providers must

deliver:

High value service

Flexibility

Proaction

Integrated delivery*

*source: Forrester Wave, Database marketing Service Providers, 11,02,07

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1.3 CONSIDERATIONS

• What is the optimal service combination?

All providers deliver a similar suite of services including:

Strategy and planning

List and data sourcing

Database management and processing

Analytics

Measurement and insight

The service suites in themselves are clear. It is how they are offered that

causes confusion and mixed expectations.


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1.3 CONSIDERATIONS

• How should those services be structured?

An integrated offering (and strategy and analytics) is preferred by marketers

and, based on the multi channel/multi brand structure of TRU/BRU business

model this is the only way that will work to meet marketing objectives and

service support requirements.


charles de gruchy strategy doc toys r us

Marketing

rfp category

enhanced category rfp

rfp questions

rfp categories

structured rfp contentthe

trubru rfp participants

performance category

structured rfpthe rfp