Learn the 4 Essential Requirements, Part 3 of 4, Slides 153-228

Transforming Your Customer Experience:

Learn the 4 Essential Requirements

Part 3 of 4

©2012 Ernan Roman Direct Marketing

2

Opt-In Preference-Based Personalization as a

Competitive Differentiator

Additional VoC Lessons

Step 2: Opt-In Engagement

3

Even among loyal customers, expectations

of marketers have changed due to:

Tough economy

Growth of many online and offline options for

making purchases:

The bar has been raised dramatically for online and offline marketers:

• Good customer service is expected and is a powerful competitive differentiator.

• Increased expectations for value at competitive prices.

• Better shipping and handling terms.

• Personalized offers and experiences based on their individual interests:

“When I go to the Amazon site, I feel like they know what I like.”

“I welcome the targeted emails, suggestions,

recommendations. They are working to send me only what

I told them was relevant.”


4

As a result, customers and prospects view personalization as the next step in a

company’s commitment to service excellence.

• Personalization is viewed as a service and benefit, not just a sales tool.

• Online shoppers view personalization as a requirement for their preferred shopping venues, rather than as simply a perk.

• Many BtoB decision-makers use Amazon as their point of reference regarding expectations for BtoB personalization.

• BtoB and BtoC marketers have to at least match Amazon!


5

Meaningful Personalization

Customers are also savvy regarding the type of personalization they want.

They want it to be more than just transaction-based.

“I expect more than just ‘we’ve looked at everything you’ve bought over the last X years and this is what

we think you’ll like’. With today’s technology, I expect much more

than that!”


6

Your Top 3 Takeaways?

1.

2.

3.


7

Step 2: Summary


Opt-in is not about passively agreeing to receive email. It’s about actively opting in to a relationship and self-profiling your preferences and aversions.

Your VoC-based opt-in database should include at least, the following information regarding individual’s:• Needs• Decision making process• Offer• Message• Timing • Media Preferences.Set as your goal: Opt-In rates ranging from 80% to 95%.

How to Create Powerful Opt-In

Databases to Drive High Impact

Personalization Strategies

Step 2Opt-In

Engagement

8

Step 2: Summary


Five Ways to Win Consumer Confidence:

1. Consumers have to trust that the company will adequately safeguard their information and use it in a responsible way.

2. “Responsible” means that consumers must believe that their information will not be rented or sold.

3. “Honor my preferences” reflects the expectation that their “Opt-In” self-profiled preferences will be used to drive increasingly targeted communications and offers... and suppress those that are not relevant per the expressed preferences of individual customers.




Step 2Opt-In

Engagement

9

Step 2: Summary


The value consumers receive in exchange for providing in-depth information must be obvious and compelling. Consumers must see an obvious improvement in relevance. Applies both to online and offline experiences. If the value is not obvious, consumers will assume you have betrayed their trust and expectations.

4.

5. Consumers must see proof that the company will be able to deliver on requirements 1 through 4 above, not just once, but consistently over time.




Step 2Opt-In

Engagement

10

Assignment

Tomorrow, be prepared to discuss 2 improvements to your marketing based on today's learnings.

11 Step 2: Opt-In Engagement

Drawing for 2 Autographed Books:

12

Step 3:

How to Use the 5 Principles of Multichannel Marketing

13

Homework Assignment

Let’s discuss 2 improvements to your marketing based on yesterday's learnings.

14

Step 3:How to Use the 5 Principles of Multichannel Marketing

Drawing for 2 Autographed Books:

Step 3: Multichannel Marketing

15

Step 3: How to Use the 5 Principles of

Multichannel Marketing


Step 3:Multichannel

Marketing

Step 2:Opt-In

Engagement

Step 1:VoC

Research

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Message OverloadOn any given day, the customer will be

exposed to nearly 3,000 media messages.

They will pay attention to 52.

They will positively remember 4.

The chance they will remember your ad is

0.013%!

D. Mastervich, VP, Sales Strategy, U.S. Postal Service, VDP Conference Presentation


17

Multichannel MarketingIntegration

Must Encompass:

Message

Media mix

Organization

And…the Customer Experience

• Acquisition• Conversion• On-boarding• Retention• Renewal

Entire Customer Experience must be integrated:

• Performance metrics• Compensation• Training• Retention• Renewal

Employee Customer Experience must be integrated:


18

Multichannel MarketingIntegration

Must Encompass:

Message

Media mix

Organization

And…the Customer Experience

• Turf• Politics• Fear of change

If Integration is so logical…why are so few doing it well?

How can you be the agent of change?


19

Let’s Define “Relevance”“Per the DMA, 93% of marketers

using multiple channels have attempted to

integrate their messaging. Only 27.4% of these

said their efforts are ‘effective’. . .”

DMA Report, “Rowing as One: Integrated

Marketing Today,” 4/11

1. Right message.

2. Right time.

3. Right person.

4. Delivered per that individual’s media preferences.

Without this, all we have achieved is. . .

Integrated, multichannel

irritation!


20

Shopper Sentiment: In-Store, Online and Via Mobile

Online:• Overall Favorite: 59% • Easiest: 68%• Most Convenient: 68%

In-Store:• Most Reliable: 69% • Safest: 77%

Mobile:• Most Convenient: 38%• Easiest: 27%• Safety: 7%

(vs. 22% Online)

Nielsenwire 6/6/12


21

Safeway: Multichannel Innovation

Personalized offers and prices based on shopper’s behaviors, habits and profile information.

“Though use of personal shopping data might raise privacy concerns, retailers are counting on most people accepting the trade-off, if it means they get a better price for a product they want”.

New York Times 8/9/12

Safeway employee signing up a shopper for custom offers.


22

Consumer Channel Preference by Category

Epsilon Targeting


23

Channel / Media Trustworthiness

Epsilon Targeting


24


Requires precision timing and synchronization of multiple media and channels.

Precision integration of traditional and digital media and contact points.

Per individual’s opt-in preferences. . .

IDM® is a registered trademark of Ernan Roman Direct Marketing.


25

1: Start with the Customer (VoC).1234

5 Principles of Multichannel Marketing

5


26

Per VoC Findings

Today’s shopper is multi-dimensional; multi-channel and multi-purpose.

Many report using multiple media, often at the same time.

Per a recent VoC:A customer described how she likes to watch

the TV shows while browsing the website. As she finds items to purchase, she puts

them in her shopping cart, prints it, and…

calls Customer Service to place

the order.

Alert!The channel used for the purchase is often

not indicative of their shopping habits. Most used multiple media to shop,

and often, to purchase.


27

“. . . Multichannel customers spend two to three times more

than single-channel shoppers. . . Consumers who engage with the

company across three or more channels spend six times more

than the average customer.”

Glen Senk, CEO of Urban Outfitters

Personalized multichannel communications based on

customer’s individual preferences is a competitive

differentiator.

“If I got the information that was focused on the stuff I was interested in, it would

be easier than sorting through all the products they have. It would be so

much faster and more convenient and make my shopping easier.”


28

2: Create processes for generating feedback from your social media channels and your sales and service reps. This will provide ongoing qualitative and quantitative VoC guidance.



5


29

VoC Guidance from CSRsBased on VoC feedback from

CSR’s, Nordstrom’s upgraded their website and inventory integration so any item in any store (not just warehouses) is shown on their website and shipped to the customer’s nearest store, with a notice to the customer.

Results:• Immediate customer

adoption.• 8% higher sales.• Fewer markdowns.• Better inventory control.• A boost to customer

loyalty.• More add-on store sales.


30

1. Enter your search criteria


31

2. Select your item and method

of deliveryStep 3: Multichannel Marketing

32 Step 3: Multichannel Marketing

3. Select your location for

pick-up or have it shipped!

33



3: Synchronize your multichannel mix with precision and value.


5


34

QVC, 9/23/12


35

QVC, 9/23/12


36

Multichannel / Multimedia Customers

Per QVC, today’s customers are uniquely Multichannel.

Keep in mind:

• Be accessible when and where the customer chooses.

• The multi-platform approach must be seamless, frictionless, and agnostic, i.e., every channel must provide a good customer experience.

• An integrated multi-platform strategy will increase sales.

QVC, 9/23/12


37

Precision Integration: Response Compression

Traditional

Time: 1 – 2 Weeks

Resp

onse

Phone

E-mail / Mail

Phone

E-mail / Mail

Response Compression

Time: 1 – 24 Hours

Resp

onse


38

and continue

Email #2/ Mail #2

Precision Sequencing and Timing

Web and digital synchronized with beginning of Publicity

Publicity

1 week

Print advertising

1 week

Email #1/ Mail #1

1-24 hoursafter

receipt

Outbound Calls

Per opt-inpreferences


39


“Per Forrester…only 3% of sites earned a passing score in terms of the user experience. 3 Reasons:1. Text legibility and clearly detailed privacy statements. Recommend using 10 to 12 point

dark Sans Searph font against a light background.

2. Menu names aren’t clear and people don’t know where to go.

3. Content and functionality…which are not…based on deep customer research. “It’s incredibly important to understand your target users…and how you can help them on your site.”

Web:

Per findings by Bronto Software: Poor site usability…among 100 online retail brands results in an average 70 percent cart abandonment rate.

1 to 1 Media, 5/28/12



Sephora’s Media IntegrationSephora revamped website and mobile apps to integrate in-store and online experiences.Online searches and purchases are saved to a customer’s profile if they are a member of Sephora’s loyalty program, Beauty Insider.

“It’s an opt-in service, because Sephora recognizes that not all consumers want to be tracked. Currently, 20 Sephora stores will have iPads from which store associates

will be able to pull customer data to help them with purchases…A lot of the information we gathered was from how we would ask for that

information in a store”, Dolan said of the new, targeted online search, adding that “customers can search across 25 different criteria including age group, SPF, skin type

and more. We have all expertise of Sephora’s staff built into a web interface, and that’s extremely powerful.”

Bridget Dolan, VP Interactive Media. DM News 4/19/12

41

Multichannel MarketingMultichannel

Success FactorsUnless you obtain opt-in message and media preferences and aversions. . .

You’ll simply be engaging in

multichannel irritation!

• “Email may be the base of your communications with me, but I’m getting too much junk.”

• “Make it relevant and timely!”

• “And, if it’s really important, send it to me by mail.”

Email:


42

10 Minutes Prior…


43

From: Daniel Brendler [mailto:[email protected]] Sent: Monday, June 28, 2010 11:47 AMTo: [email protected]: We received your request for information

Long Island's Premier Chevrolet Dealership!

.

Hello Ernan,

We received your email request for information on the 2010 Corvette, are you interested in purchasing one this month? If so, please contact me directly for an appointment to discuss your needs.

If you are just looking for information, go to www.chevrolet.com/ (next to the forward slash, fill in the vehicle name, press the space bar and click on the link).

When you are in the market for a vehicle, please let me know and I will assist you with current incentives and finance options. Regards,

Danny BrendlerGM Certified Internet Sales ManagerEast Hills ChevroletDESK: (516)869-8100 X 211 Cell: (516)383-3267 Fax: (516)[email protected] [email protected] Step 3: Multichannel Marketing

http://www.chevrolet.com/

mailto:[email protected]



VoC-Based Messaging

46

VoC DRIVENMARKETING

From: Carbonite Customer Care [mailto:[email protected]] Sent: Saturday, September 25, 2010 4:37 PM

To: Ernan RomanSubject: Your initial Carbonite backup is complete

"FEEL GOOD" NEWS!

Your initial Carbonite backup is complete.Dear Ernan,Good news: Carbonite has completed your initial online backup for ERNAN-LAPTOP. If you selected Automatic backup, here's how your backup works:


49

Multichannel MarketingMultichannel

Success FactorsUnless you obtain opt-in message and media preferences and aversions. . .

You’ll simply be engaging in

multichannel irritation!

• “Mail should be specific to my role, to what I do all day long.”

• Direct mail should be used as a highly personalized and relevant communication.

• Direct mail format should reflect value and include: personalized letter, impact addressed envelope and live stamp.

• Post card mailings are the antithesis of this and generate low ROI.

Direct Mail:


50

Direct Mail Versus Email

Email$0.050.13%$38.46

65$13,000

Direct Mail v1$1.50

2%$75.001,000

$200,000

Direct Mail v2$5.0010%

$50.005,000

$1,000,000

Cost per solicitation

Response rate (sales %)

Cost per sale

Total # of sales

Profit

Finite Universe of Prospects: 50,000Profit per unit sold: $200

Can you run a business with 65 sales?


52


In Step 4, titled “How to Increase the Power of Your Online and Digital Marketing, we’ll have a detailed discussion of the following:• Web• Digital media, including:

Twitter Facebook.

Field sales: Must be trained in disciplined Pre-Call Planning and Relationship Selling.• Must be integrated with your

other contact points for maximum responsiveness and cost-effectiveness.

Inbound calls: Highest value, highest conversion medium.

Outbound calls: Proactive, service-oriented calls to opt-in lists increases responses 500% - 700%.


53


1: Start with the Customer (VoC).1234 4: Re-conceive Inbound as a high value customer interface.

By definition, Inbound callers are more 1) Qualified, and 2) Likely to spend.

3: Synchronize your multichannel mix media with precision and value.


5


54

Inbound Calls Should Provide High Value

However, when inbound customers call, what they

frequently encounter are human robots!

Customers have become conditioned to poor service.


55

High Value Inbound Calls

What does it cost you in marketing and promotion

dollars to generate an Inbound call?

What do your customers experience when they

call your 800#?


57

Proactive, highly trained reps

Targeted outbound call

Increased sales

Inbound as a High Value Experience

CallsPersonalized fulfillmentVia email, mail or fax.


58



5: Customer Lifecycle Marketing: 1) Communications must be deployed at appropriate points in the buying cycle, and 2) Contacts should be driven by opt-in preferences.

4: Re-conceive Inbound as a high value customer interface. By definition, Inbound callers are more 1) Qualified, and 2) Likely to spend.

3: Synchronize your multichannel mix with precision and value.


5


59

Three Key Phases of the Customer Lifecycle

Pre-Sale VoC-driven integrated multichannel

contacts. Must gather opt-in preferences.

Sale Not a “close.” Instead, it’s the

beginning of proactive, value-based relationship development.

Growth and Retention Requires ongoing proactive engagement, i.e. “How can we better serve you?” Ongoing value-added justifies price premium Proactive generation of repeat sales.


60

Customer Lifecycle Marketing

Retention

Frequently overlooked.

Too much focus on acquisition.

Analyze reasons for your churn/inactive rates:• Customer demographic may

not be a good fit.• Industry.• Your sales reps.• Lack of proactive marketing.

Analyze high revenue/profit potential accounts.

Are you providing true value?

Do you really know what they do and how they use your products?

Are they being serviced by all your channels?

Retention


61

Are You Investing Enough in Your Customers?Top

producing

customers

Good customers

Dormant customers & Qualified prospects

Suspects

Top producing customers

Good customers

Dormant customers &

Qualified prospectsSu

spects

Marketing Segmentation

Marketing Investment


62

Doug SteinPresidentHMS National, Inc.

Doug was a distinguished Fortune 500 consultant for Accenture in the 1990’s. There he helped manage some of the firm’s most prominent projects while also being key to the development of significant corporate solutions and industry offerings that notably increased market share and profit for the world’s largest consulting firm.

In his current position, Doug is the senior executive at HMS National responsible for developing and delivering innovative growth strategies in a historically mature and commoditized industry.

[email protected] www.hmsnational.com

Doug SteinPresident

HMS National, Inc.



http://www.hmsnational.com/

63

Case Study

How Voice of Customer Insights Helped Change Our Culture,

the Customer Experience...and Increased Renewals Over 50%


64

30+ year old privately held company.

Market and sell home warranties through real estate agents.

Use direct marketing to renew home warranties

when the one year contract, initiated during purchase of the home, is approaching expiration.

A home warranty helps homeowners avoid unexpected home repairs which are often expensive.

The warranty provides coverage against mechanical failures for many major systems and appliances, coverage that is not provided by most homeowners’ insurance policies.

The term of the warranty is typically one year.

Traditionally, Home Warranties cover many systems and appliances, including:• Air conditioning and heating systems• Refrigerators• Water heaters• Washers/dryers• Ovens/ranges• Electrical systems• And more. . .


65

Goals of the VoCSignificantly

improve renewal rates.

Improve the customer

experience across channels.

Know much more about our customer’s needs. . . and use this to drive our marketing.

1 3-Steps:

Establish meaningful opt-in preference-based relationships.

2Deploy our multichannel mix customerpreferences.

3


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Step 1Know Much More About

Our Customer’s

Needs. . . And Use This to Drive Our Marketing

SampleCustomers who renewed

Customers who did not renew

Segments:

• Home buyers who purchased home warranty

• Home sellers who purchased home warranty

• Filed claim/Did not file a claim

VoC Research Objectives• Stimulate greater renewal rates

• Identify what home warranty means to customers

• Determine how customers define the value of HMS

• Evaluate claim experiences; strengths and weaknesses

• Measure level of satisfaction with HMS

• Analyze perception of marketing communications

• Gain insights into product enhancements

• Determine willingness to opt-in and self-profile preferences to drive targeted communications


67

Voice of Customer Research Learnings

Regardless of who purchased the warranty,

(i.e. home seller or home buyer)

engagement is low.

The customer experience, not just the amount of claims paid,

significantly impacts renewal

behavior.

Real estate agents often

drive the customer’s

perception of the value of renewing.

Customers often calculate the value of the warranty if

they consider renewing.

Service enhancement opportunities

identified: focus on the end-to-end customer

experience.

Customers expect HMS to

be proactive throughout the claims handling

process.

Customers are receptive to self-profiling

their interests and preferences.


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Step 2Establish

Meaningful Opt-In

Preference-Based

Relationships

Opt-In Overview

Key 1: Collect preferences, (per the Reciprocity of Value Equation)

Key 2: Deploy truly personalized communications

Key 3: Implement Steps 1&2 above, per privacy guidelines


69

Step 3Deploy Our

Multichannel Mix Per Opt-In

Preferences

VoC-Driven StrategiesVoC learnings helped develop more effective strategies for:

• How to engage customers throughout the customer lifecycle including during the renewal process, e.g. telemarketing, direct marketing, auto renewal.

• Which product to offer, e.g. cross-sell or up-sell.

• What additional information to offer regarding home repair and maintenance.

Phased implementation began in 2009, with a major phase recently implemented in mid-2012.


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Implementation Per VoC Research

Pre-VoC, our initial touch point with our customers was informational without being engaging.

Previous fulfillment kit: Transactional delivery of

warranty documents


71


Pre-VoC, our initial touch point with our customers was informational without being engaging.

Truncated first page of warranty agreement

Terms and Conditions made up bulk of the initial

customer touch point.


72


Post-VoC, we are leveraging this early touch point to immediately engage each customer.

New tonality focused on engaging

the customer

Added personalization


73


To successfully engage customers, several elements are incorporated from VoC learnings.

Welcome page


74


Created valuable content. This was not defined by HMS, but instead by customers and prospects.




Renewal Solicitation Stream•Having re-engineered upfront customer touch points, HMS embarked on the overhaul of the renewal solicitation stream.

•Previously a traditional direct mail process, it was updated to a highly customized, multi-channel marketing campaign.

•The solicitation process was engineered with precise time intervals, to optimize media synergy.

•The overhaul felt logical and accurate, it was informed by and therefore in part designed by our customers.

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Example: Effective Direct Mail / Touch 4

VOC Insight: Prior marketing efforts didn't strongly motivate customers to rethink their decision not to renew.

Tactic: Utilized a 3rd and final direct mail touch 20 days prior to expiration. This oversized piece was printed on 100# Carolina C2S paper and when folded was 6 X 11 to stand out and create a large space to call out the impending expiration and the risk factors of not renewing.

Creative: Designed to be a prominent, large-font, bold piece, the intent of this mailer was intentionally simple - to cause customers to think; "how would I afford the cost for failed items in my home"? It had urgency, call-to-action, and an incentive for non-claimants.


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Customer engagement through a relationship-oriented call• Pre-VoC, multi-touch renewal process was

direct mail driven.

• In the VoC, customers expressed receptiveness to, and / a and a need for, a dialogue with HMS.

Post-VoC, piloted service-oriented telemarketing with focus

on certain segments and the results were as positive

as the VoC projected.

• The VoC enabled multi-channel marketing that drives incremental sales.

• Cost of telemarketing is several times higher than mail, but the incremental sales offset the expense and optimize profitability.

Noteworthy results from the calling initiative – a

20% increase – was quickly realized, with far greater lift in certain segments.


Learn the 4 Essential Requirements, Part 3 of 4, Slides 153-228

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