INTEGRATING ADDRESSABILITY ACROSS MARKETING, … · 2014-09-08 · CMO CRM Digital Marketing...

INTEGRATING ADDRESSABILITY ACROSS MARKETING, MERCHANDISING, AND CHANNEL OPERATIONS

© 2014 Merkle. All Rights Reserved. Confidential 2

The Fundamental Hypothesis

By treating customers better, they will buy more from you.

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself” – Peter Drucker

“You’ve got to start with the customer experience and work back toward the technology – not the other way around” – Steve Jobs


Better means…

UNIQUE INDIVIDUALIZED TREATMENT

ALIGNED WITH EXPECTATIONS

ANSWERS MY NEEDS

Each customer is unique with different attributes and characteristics. By acknowledging those differences and treating them accordingly, the customer feels special.

Each customer has certain expectations that when met or exceeded, drives resonance and outcomes that are both emotional and durable

The brand has what the customer wants, at the price that they want. The brand knows the individual customer, anticipates his/her needs, knows what they like, educates them, introduces them to things that will be of interest.


By treating customers better, they will buy more from you.

Larger purchases

Preference over

competitors

Greater brand loyalty

More frequent shopping


Customer experience drives competitive advantage

Media Targeting

Personalization

Touch point Integration

Distribution

Product

Service

Ope

ratin

g M

odel

Cha

nge

Min

imal

Si

gnifi

cant

Tr

ansf

orm

ativ

e Com

petitive Advantage

Average Above Average

Market Disrupting

What Does Good Look Like?


Creating a framework for transformation

1. Enterprise segmentation, including value and lifecycle dimensions, forms the foundation

Experience Delivery

Financial Management

Customer Strategy

4. Financial management informs customer strategy and experience delivery decisions as a closed loop process

2. Strategies are translated into actionable media and channel plans (web/stores), resulting in highly personalized experiences

Portfolio Strategy

Segment Strategy Program Strategy

3. Experience delivery performance is continuously attributed across media and channels driving optimized budget allocation

Media Planning Channel/Offer Planning

Targeting & Personalization

Measurement & Attribution

Budget Allocation

Org

aniza

tion,

Ope

ratio

ns, T

echn

olog

y


Scenario-What good looks like

Maria is an existing customer in the “Young Professionals/High Value” segment

She receives an email from the retailer notifying her of new Spring styles available in stores and on-line

She clicks through the email to the retailer’s website, and is directed to a personalized landing page where she browses new merchandise

The next day, while she is on Facebook she is exposed to a display ad from the retailer featuring selected styles

Maria decides to visit a nearby store and check out the new merchandise

The entire event stream associated with Maria’s purchase is stored and the appropriate credit is allocated to each touch point

Maria ends up purchasing a new jacket along with a couple of tops and opts in for e-receipts

Maria tweets about her purchase after arriving home

Maria has opted in to receive special offers through the retailer’s mobile app, so as she walks into the store she immediately receives an offer


Scenario-What good looks like

Maria is an existing customer in the “Young Professionals/High Value” segment

She receives an email from the retailer notifying her of new Spring styles available in stores and on-line

She clicks through the email to the retailer’s website, and is directed to a personalized landing page where she browses new merchandise

The next day, while she is on Facebook she is exposed to a display ad from the retailer featuring selected styles

Maria decides to visit a nearby store and check out the new merchandise

The entire event stream associated with Maria’s purchase is stored and the appropriate credit is allocated to each touch point

Maria ends up purchasing a new jacket along with a couple of tops and opts in for e-receipts

Maria tweets about her purchase after arriving home

Maria has opted in to receive special offers through the retailer’s mobile app, so as she walks into the store she immediately receives an offer

Enablers Advanced segmentation combining: • 1st party transactional and behavioral data • Insight into a customer’s lifetime value • 3rd party demographic, lifestyle, and attitudinal

data Impact Increased customer engagement and higher lifetime value resulting from treating the customer in a more relevant, personalized manner

Enablers • Email engagement analytics designed to

optimize cadence, timing and drivers of contact

• Analytics driving relevant product/category recommendations

Impact Higher click-through and conversion rates both in-stores and on-line

Enablers Personalization engine enabling dynamic serving of landing pages with product recommendations, content and messaging relevant to the customer segment Impact Increased conversion rates and increased average transaction sizes

Enablers • Retailer’s customer segments used to

drive custom audience creation via dsp’s and social media (facebook/twitter) for remarketing

• Advanced analytics drives personalized recommendations and content

Impact Increased engagement/higher average transaction sizes both on-line and in stores

Enablers • Predictive modeling and recommendation engine

driving personalized and relevant offers/content to the mobile device

• Integration of predictive analytics engine to mobile infrastructure in-store

Impact Increased in-store transaction sizes resulting from driving relevant messaging to mobile-engaged customers

Enablers • Advanced analytics to determine what is the

most relevant merchandise mix for high value customers in specific stores/on-line and to ensure that the retailer is in stock

• Store associates trained to optimize engagement with customers

Impact Increased transaction sizes/increased customer loyalty and engagement and advocacy

Enablers • Technology providing retailers with a holistic view of a

customer’s event stream across all on-line/off-line touch points

• Modeled attribution enables correct allocation of credit to touch points resulting in conversion on-line or in stores

Impact Accurate understanding of what marketing investments drive conversion by customer segment; future investment by segment optimized to maximize conversion in store and on-line

Organizational Enablement


Integrated Structure – Decision making governance

Channel Objectives

Product Objectives

In well run organizations, handling scope overlap is clear

Channel Objectives

Product Objectives

New handling rules must be defined

Customer Objectives

Old Way Key decisions between product

and channel

New Way Increased focus on customer

objectives

Adding customer objectives as a key priority has major implications for how decisions are made and groups integrate; Failing to recognize creates distraction and drains profits


Most significant customer initiatives are driven from the top…

Source: Customer Centric Transformation 2013 Research study


Product Design

Marketing

Merchandising

Supply Chain

Store Operations

Leading Practices • Incorporate insights into

emerging needs, expectations and motivations of target segments into the design process

• Enhance segment understanding with insights into overall market trends

Leading Practices • Define and execute segment-

specific engagement plans (optimal channels, platforms by segment)

• Incorporate relevant product recommendations into messaging

• Testing and measurement should drive optimal media and channel spending by segment

Leading Practices • Score products based on

relevance to high value segments in specific store/on-line

• Optimize assortment and space plans to maximize value with key segments

• Pricing and promotion analytics should account for impact on top segment demand

Leading Practices • Account for product relevance

to top segments when determining inventory policies

• Design and implement processes and systems enabled to react to demand signals seamlessly across channels

Leading Practices • Incorporate 1st and 3rd party

segment insights into store design/re-sets

• Ensure that store associates are trained to maximize the in-store customer touch point

• Retailer/Consumer Product Company collaboration around in-store compliance

Enabling the Experience Organizationally

Challenges & Strategies


Amidst all of this scale and automation, the addressability of channels and media is increasing every day

Addressability uses customer data (anonymous or identified) to increase the targetability and relevance of marketing impressions and experiences

The Addressability Spectrum

Anonymous Partially Identified Identified Identification:

Knowledge: Unknown Some Knowledge Well Known


But in reality, optimizing behavior has become increasingly complicated as channels and media options grow

TV & Radio

Print

Mail

Email

Display

Social

Search

Web

Store

Care

Phone

Affiliate

Position Expectation Product Price

Service Sales

Purchase Promotion Experience Customization

Med

ia

Cha

nnel

s

Brand Value proposition

Customer portfolio

How do we operationalize this complexity?


Challenges: Organizational Alignment

Chief Merchant

GMM

Buyers Planners

VP, Supply Chain

SVP Stores

VP, Region

District Manager

District Manager

VP, Region

CMO

CRM

Digital Marketing

Marketing Analytics

Brand

E-Commerce

Experience Design GMM

CFO

CIO Accounting & Control

Who owns the customer experience?

According to a 2013 Retail Systems Research survey, the top 3 Retail executives identified as customer experience owners were: •CMO (43%) •CEO (38%) •VP Stores (35%)

Bingham Research 2014


Organizational Alignment: Guiding Principles

Implement a shared measurement framework oriented around customer value

Centralize customer insights and analytics functions

Institute a “Chief Customer Experience Officer” role

Ensure collaboration with vendors/retail partners around customer value goals

Align incentives to customer experience


Challenges: Data and Technology

RMS

Marketing Insights

Merchandising Insights

Store Operations Insights

Supply Chain Insights

EDW E-Comm

Stores GL CRM

Social Print

DM &EM

Display

Search TV/Video

Mobile

Site

Product

LTV Segment

Demographics Life Events

Call center

Meetings

Disparate systems and data sources

Insights not shared across organization

Fragmented view of customer behavior

According to a 2013 Retail Systems Research survey, the internal owners of customer data were identified to be: • Marketing (61%) • IT (34%) • Customer Service/Call

Center(23%)


Data and Technology: Guiding Principles

• Synchronize data sources • Harmonize cross-

functional systems and processes

• Centralize Analytics & Insights functions

• Integrate data from disparate customer touch points into longitudinal view

Disparate systems and data sources

Insights not shared across organization

Fragmented view of customer behavior


Customer event stream-Foundation for optimized customer experience

User ID Date Time Event ID Event Desc

1234 2/1/2012 DM437 DM Delivered

1234 2/2/2012 3:05 pm DI9076 Display Impression

1234 2/2/2012 3:06 pm CC068 Inbound Call Center

1234 2/2/2012 5:05 pm EM087 Sent Email

1234 2/2/2012 9:30 pm EM088 Opened Email

1234 2/2/2012 9:30 pm EM089 Clicked Email

1234 2/6/2012 9:00 pm PS674 Clicks Paid Search

1234 2/6/2012 9:15 pm Q8740 Completes Quote

Consumer Event Table

Event Meta Data

Event ID EM088

Creative A2346 Insurance you can count on

Offer OI92365 $14/Mth for $25K Coverage

Product P978 Term Life

DM Delivered 2/1/2012

Shown Display Ad 2/2/12 3:05pm

Calls 800# Requests Info and gives email 2/2/12 3:06 pm

Clicks Branded Paid Search Ad 2/6/12 9:00 pm

Sent Email 2/2/12 5:05pm Opens Email 2/2/12 9:30 pm

Completes quote request on site 2/6/212 9:15 pm


Emerging Trend: Centralized Analytics & Insights Hubs

Roadmap


We have identified six key building blocks that must be addressed by organizations pursuing customer centric business strategy

Business strategy

alignment

Leadership alignment

Integrated structure

Job design and skills

Linked interactions and

processes

Complementary incentives

Leadership and Organization-Top Six Things to Get Right


Evolving the Capability and Operating Model together as a key driver of success

Operating Model

Infrastructure focus, basic capabilities

Single campaign, simple data, little offer and

customer customization

Basic multi-channel, model integration, and campaign

automation

Contact Optimization, multi-touch campaigns, integrated

measurement platform

Customer Value Optimization fully integrated programs

Cap

abili

ty M

atur

ity

Ideal investment zone

[Director]

[Vice President]

[CMO]

[C-suite]

[CEO]

[Key decision maker]

Level 1

Level 3

Level 4

Level 5

Level 2

Over-invested (poor return on capital)

Under-invested (poor return on management bandwidth)

Bottom-up path builds infrastructure and seeks to leverage incremental gains to expand effort and drive organizational change

(requires permission)

Top-down path compels Organizational change and

rapidly enables infrastructure for

efficiency and effectiveness (requires sponsorship)


Retail Technology Stack

Audience Platforms

Mar

ketin

g Au

tom

atio

n

Channel Execution Media Execution

Marketing Database

Search

Business Rules Engine

Personalization Engine

Decisioning Algorithms

Audience Management

Real-Time Data Transfer

Syndication

Advanced Analytics

Attribution / Forecasting

Business Intelligence

Customer 360° Data Assets Event Stream Cam

paig

n M

anag

emen

t M

RM

Messaging Mobile

Location Services Preference Center Tag Management

Insights Platform Data Management Platform

Decision Management Platform

Content Governance Content Management

Application Services

Asset Management

Lead

Man

agem

ent

Product Execution Development Merchandising Pricing POS Clienteling eCommerce Digital Media

Data Services

Loyalty Platform

Identity Management Onboarding CDI/DDI Event Management

Point Engine Reward Management Member Administration


Where do we start?

Technology

• Integrate key customer data feeds into centralized Customer Management Platform

• Implement Customer Identity Management layer

• Deploy Insights Platform enabling measurement framework and “self-service” insights

Organization

• Define executive steering committee focused on customer experience delivery

• Form cross-functional customer experience delivery strategy team

• Form centralized insights team, starting with Customer Insights Manager

Operations

• Implement process for sharing customer insights across organization

• Define cross-functional collaboration process structure/cadence

• Program Management dedicated to Customer Experience initiative; plans, milestones, etc.

On-going cross-functional collaboration


Module 4: Facilitated Discussion Questions

1. Within your companies, are there currently initiatives in place to move to a more customer-centric vs. product/brand-centric model? If so, who owns the initiative and what progress has been made?

2. Within your companies, how is customer information shared across various areas (Marketing, Brands, Sales, Merchandising, etc.)? ‣ What are the specific challenges that you are facing in sharing customer

information? How are you overcoming those challenges? 3. What level of customer segmentation exists within your companies, and how if

at all are those segments used to drive marketing/merchandising/operational strategies?

4. What kind of engagement/collaboration exists between Marketing, Merchandising, and Store Operations?

5. Has there been any movement towards centralizing analytics and customer insights across the organization? If so, have there been any key lessons learned?

6. Have you gone down a path of tying together the customer event stream, from digital engagement to purchase either on-line or in-store? If so, what have been the biggest successes/challenges?


Thank You

INTEGRATING ADDRESSABILITY ACROSS MARKETING, … · 2014-09-08 · CMO CRM Digital Marketing...

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Transcript of INTEGRATING ADDRESSABILITY ACROSS MARKETING, … · 2014-09-08 · CMO CRM Digital Marketing...