combining digital media and customer interactions for “connected crm”
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From the SFIMA April 12, 2012 Event - Combining Digital Media and Customer Interactions for “Connected CRM” http://www.facebook.com/events/322428881144597/ http://www.sfima.com ------------------------------------ Marketing over the years has evolved from the “age of brand,” with the advent of television in the 1950s; to the “age of channel,” with the development of e-commerce in the 1990s; to today’s “age of the customer,” fueled by empowered consumers who have countless tools at their fingertips to help them make decisions. The most important factor affecting the way we market to consumers today is the digitalization of media and channels – and the resulting proliferation of customer touchpoints. Key to the success of any customer-centric marketing strategy is the ability to integrate the online and offline data from these interactions in an effective manner to optimize the customer experience and create greater customer value. David Williams discusses how organizations can gain sustainable competitive advantage through building customer strategy as a business strategy. The concept of connected CRM represents a systematic way to identify, serve and retain high-value customers better than competitors by delivering customer interactions that improve financial results, create competitive advantage and drive shareholder value. In this session, Williams introduces the skills necessary to implement a connected CRM strategy, which is built upon an organizational commitment to customer-centricity. The integration of these skills enables marketing strategies that maximize the value of the customer portfolio. David is a frequent contributor to the Forbes Magazine blog, and has served on the Direct Marketing Association board of directors. In addition Mr. Williams is the president and CEO of Merkle Inc.TRANSCRIPT
© 2012 Merkle Inc. All Rights Reserved. Confidential1
Presented on November 4, 2009Combining Digital Media and Customer Interactions for “Connected CRM”
South Florida Interactive Marketing Association
April 12, 2012
© 2012 Merkle Inc. All Rights Reserved. Confidential2
Agenda
• Who we are
• What we believe
• CRM in a digital world
• Q&A
© 2012 Merkle Inc. All Rights Reserved. Confidential3
Who We Are
Our experience and expertise make us a leader in CRM, shown by our clients’ successes
© 2012 Merkle Inc. All Rights Reserved. Confidential4
Company Overview
• Ad Age A-List: “Agency to Watch in 2012”
• Largest privately-held agency in U.S., Ad Age ‘11
• 8th Largest Direct Marketing Agency, Ad Age ’11
• Recognized by SmartCEO Magazine as a Future 50 Company ‘11
• NCDM Awards ’04, ’05, ’06, ’09, ’10, ‘11
• Recognized by Forrester ’03, ‘06, ’07 &’10
• Multiple MAXI Award Winner ’10 ’11
• Multiple DMA Innovation Award Winner ‘10
Distinctive experience Extraordinary expertise
Sustained 25% growth since 1989 Awarded and recognized
Re
ven
ue
in m
illio
ns
• Privately held by current management since 1988
• 150+ world class clients
• Manage over 125 marketing databases
• Manage 1.6+ petabytes of customer data
• Inform over $10 billion marketing decisions annually
• 1,500+ Employees
• 150+ statisticians producing over 1,000 models/year
• 200+ dedicated digital professionals
• 500+ marketing technology professionals
• 100+ creative professionals
2006 2007 2008 2009 2010 2011 2012E$50
$100
$150
$200
$250
$300
$350
$400
$148
$180 $211 $223
$255
$303
$360
© 2012 Merkle Inc. All Rights Reserved. Confidential5
Our clients represent many of the best global brands in the world
© 2012 Merkle Inc. All Rights Reserved. Confidential6
POS Phone Site Mobile TV Radio Display Print SocialDirect mail Email Search
The Customer Relationship Marketing Agency
Integrating diverse capabilities
Through optimizing customer touchpoints
Life sciencesNonprofit | | |
Increased customer value Improved media effectivenessImproved marketing ROI | |
CRM Outcomes
Integrating diverse capabilities
Consulting services Creative & communications services Digital media servicesDatabase marketing services | | |
Utilizing industry experience to drive strategy
Delivered across multiple engagement typesConsulting | Marketing services | Agency of record
Life sciencesRetail banking &
consumer financeTravel, media & entertainment
Retail & CPG/OEMNonprofitInsurance & wealth
management | | | | |
© 2012 Merkle Inc. All Rights Reserved. Confidential7
What We Believe
Marketers play a critical role in creating a long-term, sustainable, competitive advantage for their organizations
© 2012 Merkle Inc. All Rights Reserved. Confidential8
Marketers can again create long-term sustainable advantage
1950s+Age of brand
1998+Age of channel
2008+Age of customer
Direct-to-consumer business model transformation
Low cost 1:1 targeting and engagement
Creation of national brands
National media and mass marketing
Internet and eCommerce
Social networks & digital media
“Contenders”
(Consumer to Consumer)
(Consumer to Brand)
(Brand to Consumer)
© 2012 Merkle Inc. All Rights Reserved. Confidential9
Customer strategy is a preemptive business strategy
Developing a 360º view of the customer
Ex-customerNon-buyer
ProspectSuspect
UserBuyer
Likely attrition customer
And marketers are responding by
And consumersare changing
Developing advanced insight, targeting and
measurement capabilities
Social networks as a purchase advisor
Changing consumer buying process
Shift in media consumption patterns
Engaging consumers in more effective and productive ways
Putting the customer at the center of business strategy
The digitization
of media and channels
Socially enabled
mass engagement
Challenging economic
climate
MACRO trends are changing the landscape
Evolving consumer expectations
© 2012 Merkle Inc. All Rights Reserved. Confidential10
CRM Transformation – Business Models Matter
Dire
ctIn
dire
ct
Identified Non-identified
Healthcare CPG
RetailFinancial Services
BUSINESS MODEL
FOCUSED
ENGAGEMENTFOCUSED
INTEGRATIONFOCUSED
LOYALTYFOCUSED
Customer
Bu
sin
es
s m
od
el
© 2012 Merkle Inc. All Rights Reserved. Confidential11
Marketing functions are both brand- and customer-focused. Integrating these is the key to successful marketing.
Media Digital MassDirect
Brand Focused
Strategic integrationQualitative“Big Ideas”Attitudinal
Customer Focused
Quantitative“Facts”
Behavioral
The Power of the Universal Relevant to the Individual
Universal Unique
Brand advertising Consumer marketing
Implementation
Brand activationBrand creation
© 2012 Merkle Inc. All Rights Reserved. Confidential12
Customerfocused
Business unit / media
engagement
Campaignfocused
Customer Relationship Marketing evolution
Level 1
Level 2
Level 3
Level 4
Level 5
Enterprise engagement
Infrastructure focus, basic capabilities
Single campaign, simple data, little offerand customer customization
Basic multi-channel, model integration,and campaign automation
Contact Optimization, multi-touch campaigns, integrated measurement platform
Customer Value Optimizationfully integrated programs & campaigns
Low value
High value
Moving from
Level 3 to Level 4 is hard.
© 2012 Merkle Inc. All Rights Reserved. Confidential13
How do we compete in this new connected
world?
© 2012 Merkle Inc. All Rights Reserved. Confidential14
A new approach to customer interaction
A systematic way to identify, serve and retain high-value customers better than competitors by delivering customer
interactions that improve financial results, create competitive advantage and drive shareholder value.
© 2012 Merkle Inc. All Rights Reserved. Confidential15
Optimizing customer behavior is how you make money
Relevant and timely programs increase short-term revenue profitability and long-term customer portfolio value.
Time
Customer value
Average
High
Low
Optimized
First purchase
Up-sell
Dialogue
Consideration Purchase Engagement Loyalty
© 2012 Merkle Inc. All Rights Reserved. Confidential16
But in reality, optimizing behavior has become increasingly complicated as channels and media options grow
TV & Radio
Display
Social
Search
Web
Store
Care
Phone
Partner
Position Expectation ProductPrice
ServiceSales
Purchase Promotion Experience Customization
Med
ia
Ch
ann
els
Brand Value proposition
Customer portfolio
How do we operationalize this complexity?
© 2012 Merkle Inc. All Rights Reserved. Confidential17
Domains
Ability to identify, segment and manage high
value customers
Ability to allocate resources that optimize ROI and long-term
customer value
Ability to micro target, customize and personalize
media and channel
experience
Ability to create metrics as
currencies and measure the incremental
impact of each marketing
activity
Ability to organize in a fashion that
allows you to respond to changes
in customer, competitor or marketplace
behaviors faster than the
competition
There are six core domains that must be mastered in order to create sustainable competitive advantage.
Ability to create and manage a
360º view of the customer
Information Insights Targeting MeasurementOptimization Agility
© 2012 Merkle Inc. All Rights Reserved. Confidential18
Connected CRM landscape
18
Ex-customer
Non-buyer ProspectSuspect UserBuyer Likely
attritor
Retain
Renew
Up-sell
Deselect
Cross-sell
Activate
Entangle
Stimulate
Qualify
Win back
Acquire
Qualify
Strategy & Direction Create & Customize Manage & Perform
• Business strategy• Brand strategy• Customer strategy• Segment strategy• Offer/treatment strategy• Media strategy• Multi-channel strategy• Customer experience strategy
• Insight management• Campaign management• MRM• CRM/media mix mgmt• Segment management• Lead management• Content management• Experimentation management• Performance management
• Program development• Offer creation• Content creation• Message development• Treatment• Personalization• Customization
Analytics, Data, Applications, Tools and Infrastructure
CRM Management Systems • Metrics and incentives• Optimization and business rules
• Organizational structure• Roles and responsibilities
• Decision authority• Governance
© 2012 Merkle Inc. All Rights Reserved. Confidential19
Role of the CRM Knowledge Center in Connected CRM
Inbound
Other CRM Business Functions
Informing
Outbound
PricingProduct /
MerchandisingSales Service FinanceOperations
Channels Media
Marketing Mix Optimization
Campaign Management
InteractionManagement
SystemsIntegration
Customer Portfolio Management
Awareness Experience Purchase EngagementCustomer Acquisition
Loyalty / Retention
Cross Sell / Up Sell
Info
rmin
g
Customer Value Management Measurement / Attribution ManagementSegmentation Management
Info
rmin
g
CDI &Warehouse
Data Marts
Op Data Stores
Customer
Channel & Operations
Media
CRM Knowledge Center
© 2012 Merkle Inc. All Rights Reserved. Confidential20
CRM in a digital world
© 2012 Merkle Inc. All Rights Reserved. Confidential21
A new opportunity to target and reach customers
What if Geico could choose 10 million people who would be most likely to switch their car insurance in the next month
and target them directly across media and channels?
© 2012 Merkle Inc. All Rights Reserved. Confidential22
What is available today, and what is the potential to target customers across media and channels?
POS
Call c
ente
r
SiteMob
ile
TV Radio
Display
Social
Direct
Searc
h
Contextual
Anonymous Individual
IdentifiedIndividual
Media ChannelsTargeting
Not available Emerging Somewhat available Widely available
© 2012 Merkle Inc. All Rights Reserved. Confidential23
Search
Display
Site
Social
MobileDat
a M
an
agem
ent
Dat
a In
teg
rati
on
Integrated data provides an opportunity to analyze, segment, and target customers through digital media and channels.
An
aly
tic
s:
Targ
eti
ng
, M
ea
su
rem
en
t, I
ns
igh
t
Be
ha
vio
ral
Se
gm
en
tati
on
, L
ife
tim
e V
alu
e, A
ttri
bu
tio
n,
CR
M m
ix
First Party Data
(CRM)
Second Party Data
(Partner)
Third Party Data
Cookies
Open Graph date
Real-time Bidding
Text
Key word bidding by
segment
IndividualPersonalization
Anonymous & Individual
Personalization
© 2012 Merkle Inc. All Rights Reserved. Confidential24
The evolution of digital display ads has grown from place to customer
ContextualExchange
EnvironmentsConnected Exchange
EnvironmentsHow many people visit site, and
their profileCookie & Third Party data on
unknown individualsAddition of data repository including
all media and CRM data
Targeting• Based on research and
persona• User behaviors• Retargeting
• Behavioral segmentation• Lifetime value• Customer/prospect
Measurement• Last click • Digital attribution • Fractional attribution
across all media
Insights• Media property
performance • Exchange Performance Performance by customer :
• Segment• Value
Place
Anonymous and Individual
CRM Data Driven
Place
Anonymous Individual
PlaceLevel of insight
© 2012 Merkle Inc. All Rights Reserved. Confidential25
Integrated Data with Advanced Display Segmentation yields only the customers you are trying to reach, optimizing investments.
Inte
gra
tio
n
You can build and effective display media plan using contextual and exchange based buying
First Party Data
Second Party Data
Third Party Data
Affluent sophisticates
High transactors
Ascending buyers
Lookie-loos
Legend:Targeting:• Behavioral segmentation• Lifetime value• Customer
Performance by customer:• Segment• Value
Inte
gra
tio
n
But why underspend for the right customers and overspend for customers you don’t want?
© 2012 Merkle Inc. All Rights Reserved. Confidential26
Connected CRM Summary
• Managing and engaging customers not campaigns will be key to creating competitive advantage.
• Digitization of medias and channels is creating a big data revolution in marketing: the only way to monetize this at scale will be through Connected CRM.
• We are in the early but accelerating stages of this journey and new skills and approaches will be necessary ….first movers will have a significant advantage.
© 2012 Merkle Inc. All Rights Reserved. Confidential27
Thank you!
David Williams
Chairman & CEO
Merkle Inc.
7001 Columbia Gateway Drive
Columbia, MD 21046
443-542-4000
merkleinc.com
Q&A