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© Copyright Loyalty Builders Inc. 2015
Techniques that Simplify Personalized Marketing and
Boost Revenue
Irena McCue, Director of Client Management
CONFIDENTIAL
© Copyright Loyalty Builders Inc. 2015
6 to 7number of times more costly it is to acquire a
new customer than retain an existing one
Improving the Lifetime Value of Existing Customers
Source: Flowtown
© Copyright Loyalty Builders Inc. 2015
Increasing revenue from existing customers with relevance
How many already personalize communications to each customer? How many do not but have it as a goal? What obstacles do companies face?
RelevanceGets Customers
to Buy More
© Copyright Loyalty Builders Inc. 2015
Three Steps to Ultimate Relevance
Communications based on customer lifecycle
and individualized product offers to each
customer
Best customers for any product(s) or customer
segments
Same communication to
everyone
Lift in Revenue & Profit$ $$ $$$
Static
Product-Centric
Customer-Centric
Con
tent
/ O
ffers
Focus of this presentation
© Copyright Loyalty Builders Inc. 2015
How much lift?Proven Over Hundreds of Campaigns
CPG/Ecommerce
$490K Lift in1 Campaign
Product Targeting
B2B Apparel
$342K Lift in6 Weeks
Personalization
Consumer Service
$1M Lift in12 Campaigns
Personalization
B2C Cataloger
$3M Lift in1 Mailing
Catalog List
B2C Retailer
$1.2M Lift in6 Campaigns
Personalization
B2C ECommerce
+66% Profits in10 Product Promos
Product Targeting
CPG/Ecommerce
$315K Lift in3 Month Trial
Personalization
B2B Supplier
24-67% Lift in5 Campaigns
Product Targeting
Print Services
$370K Lift in12 Months
Loyalty Targeting
B2B Supplier
20x Return inCross-Selling
Personalization
Customer Examples:
© Copyright Loyalty Builders Inc. 2015
Even a Little Lift Makes a Big Difference
This $0.42 lift over previous methods delivered $314,700 of additional revenue
At 500K individualized emails per month, this translates to $2.6 million additional revenue per year
Testing methodology: A/B split test, 12 campaigns over 6 month periodAverage Over 6 Campaigns – 750K emails/group
Control Individualized Lift
29,149 orders 34,357 orders 5,208 orders
$3.09/email $3.51/email $0.43/email
Business as Usual Individualized
© Copyright Loyalty Builders Inc. 2015
Loyalty Builders Customer:Consumer Services
Problems: Almost 10K products to analyze
Prior Solutions: Static email to all customers
LB Experience: Personalized emails with 1:1 product recommendations to each customer
LB Results: 6 personalized campaigns(approx. 1M emails, plus 250K control group):
Revenue lift from $0.29 to $1.78 per email ($1.19 average)Average revenue lift $204,597Total lift over 6 campaigns: $1,227,582
7
© Copyright Loyalty Builders Inc. 2015
Apparel Maker (B2B side)Problems: Stagnant return on marketingspend; Limited analytic skills and budget
Prior Solutions: Regular static emails to all customers
LB Experience: 5 campaigns to 3600 customers, individualized offers and messaging by loyalty group
LB Results: Consistent revenue lift in every campaign
30-77% lift in buyers per email over control group
12-80% lift in revenue per order
Overall revenue lift: $342,314
8
Designs just f or you. View this email in your brow ser
Sam Just For You! Here is a collection of apparel tailored just for you.
Now that you’ve selected a template to work with, drag in content blocks to define the structure of your message. Don’t worry, you can always delete or rearrange blocks as needed. Then click “Design” to define fonts, colors, and styles.
Need inspiration for your design? Here’s what other MailChimp users are doing.
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© Copyright Loyalty Builders Inc. 2015
Automotive Services ProviderProblems: Converting 1-time buyers, expanding lifetime value, no analytics team
Prior Solutions: Static print mailers and coupons
LB Experience: Personalized coupons to targeted customers;
LB Results: 12 monthly mailings to about 30K customers:
$348K one-month revenue lift from 1-time buyers$612K one-month revenue lift from loyalistsAdditional $3.55M after 12 months (coupon redemption)
9
© Copyright Loyalty Builders Inc. 2015
The Right Offers To Each Customer At the Right Time At Campaign Scale…
© Copyright Loyalty Builders Inc. 2015 11
The Easy Way to Personalized 1:1 Offers
Data file formatted to drive marketing
platform
© Copyright Loyalty Builders Inc. 2015
What Data Points to Use?1. Establishes buying patterns within entire customer base2. Aligns each customer with most appropriate pattern
© Copyright Loyalty Builders Inc. 2015 13
Bird’s ViewCustomer Migration (6 month)
Loyalists
Nurturers
Underperformers
Faders
Win Backs
© Copyright Loyalty Builders Inc. 2015
Loyalty Builders’ Predictive Metrics
Metric Explanation
Loyalty Segment
Segments population on Value Rank and Risk (7 segments).
Risk Score Probability customer will not purchase before going “inactive.”
Likely Buyer Score
Probability each customer will purchase within 10 configurable time horizons (7 to 90 days).
Expected Value
Expected amount of revenue from each customer within 10 configur-able time horizons (7 to 90 days).
Metric Explanation
Re-Sell Probability
Probability of customer to purchase each item previously purchased within 10 configurable time horizons (7 to 90 days).
Cross-Sell Probability
Probability of customer to purchase each item never before purchased within 10 configurable time horizons (7 to 90 days).
Cross-Sell Rank Score
A ranked score indicating relative interest in purchasing each item never before purchased within 10 time horizons (7 to 90 days).
Loyalty Predictions: Product Recommendations:
Other Metrics per Customer:Value Rank, Purchase Delay, Category Score, Retention, Recency, Number of Orders, Amount Spent
© Copyright Loyalty Builders Inc. 2015
Purchase History is Highly Predictive of Future PurchasesPredicted Results vs. Actual Results (Recent Prospect)
15
0-3%
3-5%
5-10%
10-15%
15-20%
20-25%
25-35%
35+ %
0%20%40%60%
Purchase Probability Back Test
Predicted Probability
Act
ual P
urch
asin
g
0-1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%Cross-Sell Back Test% Customers Purchasing in 1 month% Customers Purchasing in 3 months
Predicted ScoreAct
ual P
urch
asin
g
0-1%
1-2%
2-5%
5-10%
10-15%
15-25%
25-35%
35+ %
0%5%
10%15%20%25%30%35%40% Re-sell Back Test
Act
ual P
urch
asin
g
Predicted Probability
Customer Defection Back Test
© Copyright Loyalty Builders Inc. 2015 16
Mapping Out Customer Lifecycle Lifecycle Welcome & Nurture Engage Retain Re-Acquire
Segment Prospects 1&2x Buyers Nurturers Underperformers Loyalists Faders Win Backs
Total Customers 879,022 678,055 567,798 983,222 345,689 45,900 234,945% of Total Customer 23.5% 18.2% 15.2% 26.3% 9.3% 1.2% 6.3%Total Revenue - $6,915,770 $8,559,536 $916,258 $21,099,472 $307,226 $0 % of Total Revenue - 18.30% 22.65% 2.42% 55.82% 0.81% 0.00%Orders - 39,792 47,286 9,391 65,645 8,351 5,769Average Order Size - $173.80 $181.02 $97.57 $321.42 $36.79 $0.00 Average Tenure - 31 1057 1763 2313 1161 2033Average Recency - 57 49 92 50 91 178Repurchase Rate - 46% 59% 32% 56% 35% 30%
© Copyright Loyalty Builders Inc. 2015 17
Welcome & Nurture Engage Retain Re-Activate
Sample Segment Strategy - Loyalists
Overview– Best of the best
customers • Buy most frequently• Most broadly• Spend the most
– Best targets for cross sell
– Strong brand loyalty and numerous transactions
– Stronger scoring recommendations
Segment Goal– Maintain & optimize
Considerations– Make a purchase
whether they are marketed to or not, so large discounts are not necessary
LoyalistProgram Themes Offers Calls to Action Messaging Contact Approach Cross-sell focus:
1 upsell, 3 cross-sell product messaging
Offers be more about qualitative benefits vs. discount approach
Call to actions are focused on exploring different products and re-ordering
Messaging and tone should personalized, targeted and appreciative
Emphasize appreciation
High frequency Targeted No more than # communications
– 2 per week– 10 month
New Product Product re-sell Product Cross-
Sell Flash Sale Exclusivity Thank You
Ratchet Offers Free Sample
Loyalty Club Pricing
Double Points Free shipping
Low stock on your favorites
Be first to try it and tell your friends
Personalized recommendations
New products Exclusive
promotions We appreciate
you Reminders
Max touches Jan - Mar 10
Max touches: Apr - Sep 16
Max touches: Oct 8
Max touches: Nov 8
Max touches: Dec 6
Inclusion / Exclusion Did not open previous
email Include
Clicked through, did not buy Include
Opted-Out Exclude
Value Risk Revenue % of Revenue
# of Customers
% of Customers Orders Ave Order
SizeAverage Tenure
Average Recency
Repurchase Rates
H L $21,099,472 55.82% 345,689 9.3% 65,645 $321.42 2313 50 56%
© Copyright Loyalty Builders Inc. 2015
Other steps1. Promotion Strategy and Promotion Planning
No different than any other campaign or marketing program
Add product recommendations and individualized messaging to existing campaigns
2. Variable Content DesignVariable content designs are not difficult – Loyalty Builders can help
Abandon cart template can be easily repurposed
3. Campaign ExecutionMost marketing platforms handle variable content
We’ve worked with most
Loyalty Builders can execute the campaign for you
© Copyright Loyalty Builders Inc. 2015
The Right Offers To Each Customer At the Right Time At Campaign Scale…
© Copyright Loyalty Builders Inc. 2015
Special Offer for NEDMA
We are confident that our methodology works and guarantee at least a $100,000 lift from qualified campaign
If our methodology doesn’t create at least $100,00 lift, our services are free
More detail in the flier, along with a 100 Grand bar that represents $100,000 revenue lift that we can help you to achieve!
© Copyright Loyalty Builders Inc. 2015
Thank You – Questions?
“More Revenue from Existing Customers”
irenam@loyaltybuilders.com
© Copyright Loyalty Builders Inc. 2015
Loyalty Builders: The Simplest Way to Revenue Uplift from the promotions you are already running
Requirements for Fast, Easy Uplift Typical Approach
Loyalty Builders
No data modeling or scoring rules ✔No data integration projects ✔For marketers (no IT, data science skills needed) ✔Immediate access to actionable campaign lists ✔Scores every customer on every product ✔No personally identifiable information ✔Immediate, easily measurable ROI ✔
© Copyright Loyalty Builders Inc. 2015
You Get: Accurate Analytics Packaged to Execute More Relevant Marketing
Email lists with individualized content formatted for your email system
Control files formatted to drive variable print campaigns
Data files for real-time e-commerce and mobile recommendations
Sales leads and recommendations for CRM systems
Data files powering personalized digital banners, ads
Catalog mailing lists that optimize revenue and margins
© Copyright Loyalty Builders Inc. 2015
Loyalty Builders Predictive AnalyticsSharpened Over 15 Years of Research & Experience
24
Customer Loyalty Scores
Product Interests of Each Customer
Who are the best customers for each (any!) product?
What are the best products to recommend to each customer (ranked!)?
When will each customer make a purchase?
Who is worth your marketing $$, and who is a waste of time?
Immediate Answers to Questions Like:
© Copyright Loyalty Builders Inc. 2015
Loyalty Builders: By Far the Simplest ApproachPredictive Analytics-as-a-Service
Upload Purchase Data (Cust ID, date, item, amount)
to Cloud Service
Personalized Product Recommendation
Service
Download Campaign Lists
Email List
DirectMail
CatalogDepth
Online NBO
Sales Leads
© Copyright Loyalty Builders Inc. 2015
How Does Loyalty Builders Work?
LB Data Delivery Service
Metrics DB
Predictions by Customer
Customer PurchaseData from Subscriber
Longbow(Self-service SaaS tool)
Campaign & Program Execution Lists
Campaign Execution Lists
Summary Reports
Predicted Metrics for Each Customer
E-CommerceCRM
Data Import
Campaign Platform
Analytics Platform
Loyalty Builders Cloud Service Deliverables Subscriber-Side
Cust IDTX Date$ AmountProduct ID
© Copyright Loyalty Builders Inc. 2015
How Do We Make It So Simple?1. Focused objective: “predict buying behavior”2. Best predictor data (not any/all possible data)3. Model individuals against population patterns
Cust IDItem ID
DateAmount
ActionableCampaignData Files
Loyalty BuildersAutomation
© Copyright Loyalty Builders Inc. 2015
How is Loyalty Builders Different?
Big Data Customer Profiling: Simple Data Alternative:
Analytics Analytics
Customer ID
Item Purchased
Amount Spent
Purchase Date
A New Insight
For Each Customer:Likelihood to BuyRisk of DefectionExpected Value
Re-Sell ProbabilitiesCross-Sell Probabilities
Loyalty SegmentProduct Affinities
We Get More from the Less Data
© Copyright Loyalty Builders Inc. 2015
Why is this Important?The Typical Approach…
Marketing CampaignsData/Insight InterpretationCustomer TargetingProduct SelectionDiscount/Offer SelectionChannel SelectionContentCampaign Lists
Translate scores and “insights” into marketing actions
Data ModelingData MiningData SamplingAlgorithm SelectionScoring FunctionsRulesTesting
Find “predictor” attributes and score customers
Multiple SourcesData ExtractsCleansingEnrichmentSchema ModelingTransformationIntegrationStorageGovernance
Data Preparation
Integrate as much data about your customers as possible
Translate scores and “insights” into marketing actions
Data/Insight InterpretationCustomer TargetingProduct SelectionDiscount/Offer SelectionChannel SelectionContentCampaign Lists
vs. Loyalty Builders
© Copyright Loyalty Builders Inc. 2015
Three Easy Ways Give Us a Try
① Free Opportunity Analysis (how much could you make?)
② Low-Cost Pilot Program(multiple campaigns)
③ $100 Grand Trial Campaign: Substitute one of our lists for yours in your next campaign
We’ll get a revenue uplift at least $100,000 over our $5,000 cost in a test campaign, or your money back
It’s easy! We’ll show you.
© Copyright Loyalty Builders Inc. 2015
Proven Product: Keurig’s customized offers$490,000 revenue uplift
• Over 800,000 emails sent
• 250,000 emails in control group
• Customized emails produced 3x to 4x more revenue
• Over 65% lift in number of buyers for Dark and Decaf
Open Rate Click-Thru Rev/Email Revenue Lift/Email
Tea 34% 19% $0.73 $0.16
Dark 54% 27% $2.19 $1.62
Decaf 49% 29% $1.90 $1.33
Flavored 43% 22% $1.27 $0.70
Light/Med 42% 22% $1.34 $0.77
Control 30% 16% $0.57 $0.00
This campaign was nominated for most innovative marketing campaign award by MITX.
© Copyright Loyalty Builders Inc. 2015
Cross-sell Campaign Sample CriteriaGoal – broaden variety of products and drive incremental sales from the best customers
Loyalty Segments – Loyalists and Nurturers
Optimal product combination: 1-2upsell products and 2-3 cross-sell products (4 products total)
Upsell products criteria – upsell product with highest scores for each customer
Cross-sell product criteria – cross-sell products with highest scores for each customer (preferably with scores 7 or higher)
Level of discount – no discount to low discount, preferably on products never purchased before
Frequency – 1-2 times a month as a part of individualized & triggered communication strategy (rotate products from the top recommendations to avoid emailing same product recommendations more than once)
© Copyright Loyalty Builders Inc. 2015
Retention campaign sample criteriaGoal – reengage customers that have deteriorating behavior
Loyalty Segments – Underperformers, Faders, Winbacks
Optimal product combination: 3-4 upsell products and 0-1 cross-sell products (4 products total)
Upsell products criteria – upsell product with highest scores for each customer
Cross-sell product criteria – cross-sell products with highest scores for each customer (preferably with scores 7 or higher)
Level of discount – medium to high discount, based on the customer segment (medium discount to Underperformer and Faders, high to Winbacks)
Frequency – 1 times a month, when customer moves down to the lower loyalty segment and remains there (as a part of individualized & triggered communication strategy)
© Copyright Loyalty Builders Inc. 2015
New customer campaign sample criteriaGoal – convert 1&2xBuyers into loyal customer
Loyalty Segments – 1&2xBuyers
Optimal product combination: 1-3 upsell products and 1-3 cross-sell products (4 products total, use as many upsell as available )
Upsell products criteria – upsell product with highest scores for each customer
Cross-sell product criteria – cross-sell products with highest scores for each customer (preferably with scores 7 or higher)
Level of discount – discount based on recency from the last purchase, introduce discount and increase it with increase in recency (test optimal level and time for increases)
Frequency – 1 – 2 times a month, as a part of individualized & triggered communication strategy (rotate products from the top recommendations to avoid emailing same product recommendations more than once)
© Copyright Loyalty Builders Inc. 2015
Back-of-Napkin ROI Calculator
Number Customer Contacts Per Month 100,000Normal Buy Rate per Month 1.0%Loyalty Builders Buy Rate per Month 1.5%Average Order Value (Normal) $200.00Average Order (Loyalty Builders) $200.00Loyalty Builders Cost Per Month $5,000.00Additional Costs Per Month $500.00Average Product Margin 40%Additional Responders 500Revenue Uplift per Month $100,000.00Product Margin Uplift per Month $40,000.00Uplift Cost per Month $5,500.00Immediate Return per Month 727.27%Campaign Revenue per Year (No LB) $2,400,000.00Campaign Revenue per Year (with LB) $3,600,000.00Revenue Uplift per Year $1,200,000.00Subscription Cost per Year $60,000.00Revenue Multiple on Subscription Cost 20.00
The Drop-Dead SimplestWay to Boost Revenue with
Predictive Customer Analyticsfor Personalized
Marketing Campaigns for:
RetailersE-tailersCPG companiesB2B suppliersService providersCatalogers
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