Customer loyalty sydney v3

Presented by: Vincent Cotte, Regional Marketing Director, TIBCO Software Inc

Creating and Profiting from Loyalty

How do you cut through the noise?

21st Century Challenge for Marketers

Mobile Connected Interactive

A Real-Time World

Personalized

Social

Emergence of Platforms

Run by Digital Natives

Creating a tidal wave of data

Agenda

Three Most Important Stepping Stones in the Journey to Loyalty

–  Mark Johnston CEO, Loyalty 360

Building a Foundation for Loyalty –  Brett Hannath Director of Marketing, TIBCO

MORNING TEA

Customer Retention –  Dave Gooding Director Business Performance Services Advisory, KPMG

Understanding Customers, Driving Loyalty –  Mark Lorion, Vice President Analytics, TIBCO

Lessons Learned: “Engagement,” “Voice of Customer,” and “Customer

Experience Management” are the Three Most Important Stepping Stones in the Journey to Loyalty

What was Engagement / Loyalty?

•  The first loyalty program was started in 1896.

•  S&H Green Stamps •  It was the ultimate in engagement –

apriori. •  What would you give for this level of

engagement? •  Once issued 3 times as many stamps as

the US Post office •  Once the LARGEST purchaser of

consumer products in the world. •  Where is it today? Gone? •  Why? •  No longer engaging and did not evolve?

Customers wanted change, did they listen? No!

•  Loyalty and engagement are long term journeys / processes where the roads to get there are always changing.

Definitions – Taken from Dictionary.com

Connotation: •  1. an act or instance of connoting. •  2. the associated or secondary meaning of a word or expression in addition to its

explicit or primary meaning: A possible connotation of “home” is “a place of warmth, comfort, and affection.” Compare denotation.

–  What is the connotation of loyalty: points, rewards, bribing participants, one way communication? Is it static? How is it changing? Has the connotation of loyalty always been positive? Is it changing?

Denotation:

•  1. the explicit or direct meaning or set of meanings of a word or expression, as distinguished from the ideas or meanings associated with it or suggested by it; the association or set of associations that a word usually elicits for most speakers of a language, as distinguished from those elicited for any individual speaker because of personal experience. Compare connotation.

–  What is Loyalty? Loyalty is bigger: All of the products, services, technologies, processes, datasets and analysis that create, engender or enhance the “bigger picture idea of engagement, CRM and CEM.” Yet it is dynamic.

Definitions – Taken from Dictionary.com

Loyalty: •  1. the state or quality of being loyal; faithfulness to commitments or obligations. What

products or services qualify for this? •  2. faithful adherence to a sovereign, government, leader, cause, etc. •  3. an example or instance of faithfulness, adherence, or the like: a man with fierce

loyalties. –  How many brands are you loyal too?

Engagement: •  1. the act of engaging or the state of being engaged. •  2. an appointment or arrangement: a business engagement. •  3. a pledge; an obligation or agreement: All his time seems to be taken up with social

engagements. •  4. employment, or a period or post of employment, especially in the performing arts:

Her engagement at the nightclub will last five weeks. –  Is engagement the next big idea, or is it a piece of loyalty? You are hearing it EVERYWHERE.

What are Loyalty and Engagement?

•  The question I ask. •  What would you rather have? •  A loyal spouse or an engaged spouse? •  What about both? Wouldn’t that be better. •  Again, how would you know? •  What would you do for both with your customers? •  Too much information, too little time, too many

choices, too little satisfaction!

What They are Saying; What We are Hearing.

•  “What should I do first; Foursquare, Groupon, update my Facebook page? What about Twitter?” CMO Fortune 500 B2B company

•  “Loyalty is important, but we need to analyze the data, all data, in 2011, and then develop a comprehensive loyalty strategy in 2012.” – CMO ladies fashion retailer.

•  “Mobile has promise, but it also has the highest ‘creepiness’ factor.” SVP Marketing top 10 US bank

New Media or New Channel?

•  25% of companies surveyed in the COLLOQUY/DMA benchmarking study said they wanted to increase loyalty and engagement from existing customers, but 28% identified building brand awareness and 19% identified customer acquisition as their top goals. –  Should that be the goal? Creating a dialogue / discourse

•  According to the 2010 COLLOQUY/DMA survey, two-thirds of respondents were unable to express what the most important measure of social media success would be. –  Shouldn’t this be defined? Too much change too fast.

New Media or New Channel?

•  According to the 2010 Cone Consumer New Media Study, more than 80% of consumers say they follow only five or fewer brands online, whether through Facebook, Twitter or an RSS feed. –  How do you get to be one of those five?

•  "They really only have room in their minds for less than five brands," says Mike Hollywood, Cone’s Director of New Media. "It’s a pretty exclusive club—if you think about the number of marketing messages a consumer receives daily—to be welcomed into that inner circle of brands.“ –  Is choice good or is there a point where choice is bad?

•  Americans are feeling less and less satisfied even as their number of choices

go up. •  As Seth Godin said, “Small is the new Big.” •  Americans have a more difficult time finding shared experiences with 500+

cable channels – the water cooler effect has dried up, yet for those with shared experiences it can be more engaging.

•  Yet with an average of 5 brands followed and a more “loyal” following for shows like Dexter, American Idol, NFL: engagement levels have increased

•  Social scientists, added options should make us better off (if we are rational), it is logically compelling, but just not true.

A Perspective

•  “Surprise and delight” are the keys – unexpected free shipping and calls about new product lines create engagement.

•  Do more than what is expected and always apologize when you are wrong. Doctors who spend 5 more minutes and apologize are sued less.

•  Listening to the VOC feedback from your customer created brand engagement. Try to enact the recommendations (Starbucks)

•  Always remain committed, execute and delivery more than what you promise. Corporate culture drives customer engagement.

Information Overload •  Kroger (Woolworth’s) trip – 110 varieties of crackers (fat free, whole

grain, multi-grain, what is the difference) •  90 types of soda / pop (depending on where your are from). Question

– how many brands do you have in your house? Is there that much difference?

•  190 types of beer (this is a small Kroger) – what is your sample set? •  145 types of chips (not including pretzels or other snacks) •  Typical mid sized grocery stores has 60,000 SKU’s and 20,000 new

SKU’s come out each year. •  Trial has become the challenge? Loyalty? How? Easy. Listen •  Recently Rite Aid (Discount Drug Stores) cut 10,000 sku’s from there

large format stores and sales went up? Less choice, more engagement and satisfaction. Consumers want more choice? No.

“Standard economics assumes that we are rational -- that we know all the pertinent information about our decisions …can calculate the value of the different options we face, and that we are cognitively unhindered in weighing the ramifications of each potential choice.

But we are far less rational in our decision making than our standard economic theory assumes. Our irrational behaviors are neither random nor senseless -- they are systematic and predictable.”

Dan Ariely Predictably Irrational Courtesy of Maritz

Courtesy of Maritz

Communica*on for Loyalty? •  Shannon and Weaver (Bell Labs in the 1940’s) argued that there

were three levels of problems for communica*on within this theory. –  The technical problem: how accurately can the message be

transmiHed? –  The seman*c problem: how precisely is the meaning 'conveyed'? –  The effec*veness problem: how effec*vely does the received meaning

affect behavior? (Is it measureable was not even ques*oned?) •  Daniel Chandler cri*ques the transmission model by sta*ng:

–  It assumes communicators are isolated individuals. –  No allowance for differing purposes. –  No allowance for differing interpreta*ons. –  No allowance for unequal power rela*ons. –  No allowance for situa*onal contexts.

Understanding People

Engagement

Behavior

Courtesy of Maritz

The New Age of Media •  New media users won’t hesitate to stop following companies via new media if they

aren’t satisfied with their experiences. Reasons include •  58% The company or brand acted irresponsibly either toward me or its other

consumers, and I am no longer a fan of it •  58% The company or brand over-communicates with me (e.g., I get too many

messages from it, there is too much content to sift through, it sends out spam) •  53% The content the company or brand provides is not relevant to me •  36% The company or brand doesn’t communicate with or engage me enough (e.g., it

doesn’t respond to my comments, the content is seldom refreshed, it doesn’t provide me with incentives, its content is boring)

•  28%The company or brand censors the content I, or other consumers, post on its new media channels (e.g., it deletes negative wall posts or blog comments)

•  Source 2010 Cone Consumer New Media Survey

The New Age of Media – Participants Want?

•  When deciding whether to engage with companies or brands via new media, users look for the following types of company/brand interactions: –  77% - Offer me incentives (e.g., free products or services, coupons,

discounts) –  46% - Solve my problems/provide product or service information

(e.g., customer service) –  39% - Solicit my feedback on products and services –  28% -Entertain me (e.g., provide access to premium content) –  26% - Develop new ways for me to interact with their brands (e.g.,

widgets, mobile applications, online games, contests) –  21% - Market to me (e.g., banner ads, targeted ads)


The New Age of Media – Participants Want?

•  Companies and brands can benefit from engaging with new media users: •  I am more aware of a company or brand if I can interact with it in a new

media environment – 63% •  I am more likely to share information about a company or brand across my

own new media channels if I can interact with it in a new media environment – 62%

•  I feel a stronger connection with a brand if I can interact with it in a new media environment -61%

•  I feel better served by companies when I can have a conversation with them in a new media environment -60%

•  I am more likely to purchase a company’s or brand’s products or services if I can interact with it in a new media environment -59%

•  If I follow a company or brand on one of its new media channels, I am more likely to follow the company or brand on its other new media channels – 59%


Where We Were – Where Are We?

Courtesy of RewardStream

Consumer 1.0 & 2.0

1.0 2.0 Courtesy of RewardStream

Consumer Purchase Decisions

Access to digital Information

Trust in brand-sponsored advertising

Comfort buying online

Trust in friends, family, trusted connections

Rely on own experience to make decisions

1.0 2.0

Courtesy of RewardStream

Confiden*al & Proprietary Informa*on

42% of Millennials make purchase decisions based

on recommendations from friends.

More than 72% of women decide what products or services to buy by seeking some kind of help, but are 3X more likely to seek advice from family and friends than to go online.

Harbinger Women and Word-‐of-‐Mouth Study 9/2010

Graphic from “Millennial Inc. What your company will look like when Millennial’s call the shots” by Mr. Youth and Intrepid

Where is Loyalty Going? •  Deep analysis and expansion of loyalty platforms

•  A defined and prolonged shift from acquisition to engagement, customer experience, CRM, retention and LOYALTY

•  A commitment to operations - Focusing on Customer

•  Retail organizations’ appetite for data/information exponentially increasing

•  A need for new models that incorporate and make actionable all data sources.

•  Enterprise Loyalty efforts now taking center stage

•  Establishing a “genuine relationship” with customers now more important than ever

•  Loyalty now impacts the whole C-Suite

The Loyalty Challenge How do we identify our best customers and create an ongoing dialogue that creates engagement Different people have different needs and expectations – treat them accordingly How do we better understand their needs? Only by listening and engaging in a pro-active dialogue. How do you create the same level of loyalty and engagement to your product as to you sports team. How do we build relationships with our mavens and connectors? We need to leverage them and It needs to be beneficial to them and your organization.

Join Us to answer these questions •  Loyalty 360 – www.loyalty360.org

•  [email protected] •  513-290-5147

Presented by: Brett Hannath Director of Marketing, TIBCO Software Inc

Building a Foundation for Loyalty

R F M A

LOYALTY

Compelling results across a wide range of customers

30-100% higher revenue per customer

3-15% higher retention rate

10-60% lower promotional spend with existing customers

5-50% more interactions per customer

10-40% more visits

3-15% higher average order value

More sales per retained customer

More retained customers

Less promotional spend

More engaged customers

More customer frequency

More spend per visit

1-800-Contacts Member 1-800-Flowers Fresh Rewards 1-800-flowers .com Member 1-800-petmeds Member 6pm.com Promotions 7 For All Mankind Member 7-Eleven Visa Card 99 Cents Only Email 99 Restaurants eClub A Pea In The Pod Email A&P Supermarket Bonus Savings Club A&P Supermarket Live Better Wellness Club A. T. Cross Email A.C. Moore Store Specials a365 Offers AAA - Show Your Card & Save AARP Membership ABC Shop Rewards Abercrombie & Fitch Email Abode eNewsletter Absolutely Gorgeous VIP Academy Email Updates Academy Rewards Visa Platinum Accor Advantage Plus Asia-Pacific Accor A|Club Accor A|Club Gold Accor A|Club Platinum Accor A|Club Silver Ace Hardware Email Ace Hardware Rewards ACLens.com Activa Email Active Skin Active Points Adairs Linen Lovers Club Adams Offers Adidas Email Adobe Email Adore Beauty Email Adorne Me Rewards ADT Premium Advance Auto Parts Email Aeropostale Email List Aerosoles Email Aesop Mailing List AETV Email AFL Rewards AirMiles Albertsons Preferred Savings Card Aldi eNewsletter Aldi eNewsletter USA Aldo Email Alex & Co Newsletter Alexander McQueen Email Alfresco Emporium Email Ali Baba Rewards Club Ali Baba VIP Customer Card

Ali Baba VIP Customer Card Alloy Newsletter AllPhones Webclub Alpine Sports Store Card Amazon.com Daily Deals Amcal Club American Airlines - TRAAVEL Perks American Airlines Aadvantage Executive Platinum American Airlines Aadvantage Gold American Airlines AAdvantage (Base) American Airlines AAdvantage - Classic American Airlines Aadvantage Platinum American Apparel Newsletter American Eagle AE REWARDS American Express ASCENT "add on" - Australia American Express Blue Sky Credit Card - Australia American Express Business Accelerator Card American Express Business Card American Express Card - Australia American Express Gold Business Card American Express Gold Card - Australia American Express Gold Choices Credit Card - Australia American Express Gold SkyMiles Card American Express Platinum Business Card American Express Platinum Card - Australia American Express Platinum Credit Card - Australia American Express Platinum SkyMiles Card American Express Qantas Corporate Card American Express Rewards CHOICES "add on" - Australia American Express Selects - Australia American Express Velocity Gold Card AMF Roller Anaconda Adventure Club Anchor Blue Email Angus and Robertson A&R Rewards Ann Harvey Offers Ann Taylor Email Ann Taylor LOFT Style Rewards Anna's Linens Email Signup ANZ Balance Visa Rewards ANZ eDine "add-on" ANZ First Visa ANZ Frequent Flyer American Express ANZ Frequent Flyer Gold American Express ANZ Frequent Flyer Platinum American Express ANZ Frequent Flyer Visa ANZ Frequent Flyer Visa Gold ANZ Frequent Flyer Visa Platinum ANZ Gold Visa ANZ Rewards American Express ANZ Rewards American Express Platinum ANZ Rewards Visa ANZ Rewards Visa Platinum ANZ Smarty Pig Apple Store Juniper Visa Card

Applebee's Email Appleseed's Rewards Credit Card Aqua Shop Loyalty Membership Aquascutum Registration Aquila Select Arbor Salon & Spa Loyalty Club Arby's Extras ARC - Show Your Card & Save Arden B Email Arden B. B. Rewarded Ark Restaurants M*Card Armani Exchange Insider Account Art Select Special Offers Artful Home Email ASDA Reward Credit Card AT&T Wireless Online Account Management Auntie Anne's Pretzel Perks Austin Reed Newsletter Australian Ballet Subscriber Card Australian Geographic eNewsletter Australian Geographic Society Autograph VIP AutoZone Rewards Avenue Credit Avenue Email Signup Avon A-List Avon Email Signup Axis eNews Azamara Cruises Captain's Club Classic Azamara Cruises Captain's Club Elite Azamara Cruises Captain's Club Select Babar Cafe & Bar Frequent Coffee Card Baby Boots Email Baby Center Store Offers Baby Express VIP Club Baby Giftbox Rewards Baby Universe Coupon Savings BabyBuds Buddy Babyco Loyalty Rewards Back to Basics Toys Special Offers Backcountry Email Bad Backs Email Bagels Cafe Frequent Coffee Card Bagsbuy.com Frequent Shopper Bahama Breeze Island Insiders Baja Fresh eClub Bakers B Card Bakers Delight Reward Yourself Bakers Footwear B Card Bakpakka Club Balenciaga Email Banana Republic BananaCard Banana Republic Email Banana Republic Visa Card Bank of Queensland Blue No Annual Fee Visa




1866 Source: Perkler




280,000 Source: Perkler




18+ Source: Colloquy




8+ Source: Colloquy

4 Foundations of Loyalty

Understand

Engage

Reward

Retain

LOYALTY

Understand

Understanding the Customer

Who they are •  Single View •  Product Ownership •  Relationships

What they do •  Spending Pattern •  Social Behaviour •  Influence and Advocacy

Data Matching

•  Finding, matching, and linking data is hard •  Data is never “perfect” – and never can be

First Last DOB Address City State Height Hair color etc

Rec 1 Jason Fitzgerlad 12/1/1971 200 Classen St. Paul MN 5’10” Brown

Rec 2 2000 N Classon Fitzgerland Jasoz Saint Paul MN 5-11 Brawn

Matching Engine Result

(0.80) 0.90 0.82 -1 0.87 0.85 1.0 0.95 1.0

Machine Learning Engine Result

Overall score / classification 0.93 Intelligent combination of field scores

California Department of Public Health Prenatal Genetic Screening Program

•  Matching Platform evaluation and implementation •  CDPH benchmarked TIBCO and a competitor

–  After 3 weeks competitor reached 79% accuracy –  After 1 day TIBCO topped 97%

•  Two phase project undertaken •  First - cleaning the CDHP database (get clean)

–  5.5 million record reference database of at risk women –  2.3 million duplicate records identified - representing 1 million unique women –  1.3 million duplicates eliminated – leaving reference database of 4.2 million unique women

•  Then – automate matching of incoming test results (stay clean) –  Before TIBCO – 65% automated match rate –  After TIBCO – 95%+ automated match rate

•  Overall results –  Greatly improved levels of automation –  Earlier identification/treatment/counseling for possible problems –  Bottom line - Better quality care for at risk women and their unborn

Source Policy Name Address 1 Address 2 City/State Date of Birth SSN Description

1 Term Life Cathy Parks 101 Main Newton, Ma 12/08/1959 020-51-3421 20 Yr Term

2 Annuity C. Parks Parks Family Trst 101 N. Main St Newtown, MA. 12/8/59 020-15-3421 10 Yr Fxd

3 Auto Carl Parks Parks & Assoc. 101 Main Ave. Newton, MA June 11, 1958 021-24-8745 Commercial

3 Auto Kathy Parks 110 Main Street Newton, Mass December 8, 1959 020-51-3421 Personal

Policy Holder Policies

Customer # 126072 20 Year Term Life

Ms. Cathy Parks 10 Year Fixed Annuity

Parks Family Trust Personal Auto

101 N. Main St.

Newton, MA 02106

DOB 12/08/1959

SSN 020-51-3421

Policy Holder Policies

Customer #126941 Commercial Auto

Mr. Carl Parks

Parks & Associates

101 N. Main St.

Newton, MA 02106

DOB 6/11/1958

SSN 021-24-8745

Household Link

Data Quality Fix, Standardize and Enrich Your Data

Source customer data

Corrected data Corrected data

Single View of the Customer

Loyalty Through Intimacy

Challenges •  Independent, autonomous sales and marke*ng teams • Data collected at mul*ple points by franchisees / dealers • Different levels of data maturity, mul*ple data formats • Protec*ve in sharing own data • Mul*ple data versions for the same customer

Solu*on • Single common customer database • Single version of truth • Standardized data format mapped to individual CRM systems

Benefits • Customer in*macy through a comprehensive view of customer behavior across LOBs •  Increased opportuni*es through up-‐selling and cross-‐selling customers in real *me • BeHer customer service through proac*ve no*fica*on and alerts • Analy*cal tool to segment data • Transforma*on to a customer-‐centric organiza*on through the use of customer lifecycle knowledge for product porcolio planning

Tractor Automotive

Real Estate IT

Travel Finance

Tractor Automotive Travel Real Estate Finance IT

Offer Suggestions

Offer Optimization

Engage

Engaging the Customer

Be relevant •  Apply understanding •  Offer “before they know” •  Apply context

Be in the moment •  Interact in Real-Time •  Across all channels •  Be social

How does Citibank know to make offers appropriate to what’s going on in your life?

Loyalty Marketing and Game Mechanics

Gamification of Loyalty

•  >100% increase in social sharing

•  1/3 increase in commenting

•  1/3 increase in pages read

More Information

Reward

Real-time and Long-term Relationship Marketing

Contextual Offer Management Repeatedly exceeding expectations in the moment

Incremental brands and share

Deeper consumer view and richer offer stream

Proactively manage negative events

Relationship Management Cultivating the primary relationship over the long term

Increase sales

Higher advocacy

Reduced promotional marketing

•  The leading provider of loyalty and customer retention technology solutions

•  Extensive client base in retail, travel, telecom, automotive and consumer brands

•  SaaS delivery model provides superior access, scalability and performance

•  Deep program design and management experience

Integration and Data Collection

Real-time connectivity

CPG code redemption

Point-of-sale data mapping

Social network bridge

Campaign Management

Dynamic segmentation

Targeting and profiling

List management

Integrated offers and promotions

Email and Microsites

Triggered messaging

Response measurement

Deep personalization and dynamic content

Hosted websites

Loyalty Management

Point programs

Tiers and Affinity clubs

Reward catalog and fulfillment

Offers and promotions

Social & Mobile

Social authentication wallet

Interaction tracking and rewarding

Smartphone apps

Widgets and FB apps

Reporting and Analytic Services

Deep analytics

ROI modeling

Single view of the customer

Standard and ad hoc reporting

Over 180 million customer records managed 9M offers delivered a week

Add/Modify Consumer Offers in 5 Minutes

1. Define an Event 2. Define Eligibility

4. Approve and Deploy 3. Define Qualification & Award

•  25% more revenue per customer from members vs. non-members •  20% of members don’t live in cities served by the airline •  40% membership growth in one year

10% sell through improvement in one month

5M members in 4 years 40% higher conversion rates

22% lift in 2-year retention rate

In-store collection of customer preferences Clienteling for a personalized customer experience

Exceeded expectations for enrollment and participation 9:1 NPS of Thrivent Choice vs. Thrivent Financial

•  Tripled enrollment expectations •  Huge increase in referrals

•  4.2 billion consumers •  180 countries •  50 leadership brands •  All channels

Inbound Data Flows

Segmentation Inputs

Recognition, Motivators & Rewards

Outbound Engagement

Sample of Loyalty Lab Partners and Affiliated Technologies

Over 50 agency and reward partners and integrated technologies

Marketers Desktop

Response Tracking

Reporting, Analysis & Insights

Deep Data Aggregation

Real-Time & Batch

Email

Web

Social

Community

Direct Mail

Data Model & Configured

Business Rules

Rational & Emotional

Engagement & Motivation

Engines

Mobile

Customers

Email, Social & Mobile Interactions

Transactions

Retain

Customer Retention

Identify Risk •  What causes CHURN? •  Small Window for Correction

Prevent Problems Before They Occur

•  Automated Response •  Proactive Intervention

Reliance Communications

•  Mumbai, India HQ •  128M Subscribers

–  Growing 2M+ subscribers / month

•  1.9 billion calls / day –  12 million value-added service events / day

•  Personalized promotions reach customers within seconds of their completing a mobile recharge

•  Re-charge reward of MP3 download, Extra Talk-Time for Free SMS

4 Foundations of Loyalty

Understand

Engage

Reward

Retain

LOYALTY

Some Recommended Reading

MORNING TEA 15 minutes

Customer retention

A view from the balcony

27 July 2011

Dave Gooding

82 © 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

Agenda

1.  Loyalty economic framework

2.  Some definitions

3.  The leaky bucket

4.  Some real numbers

5.  12 key lessons


All significantly impact business value …

Stay Longer Buy More

Recommend to Others

Provide Valuable Feedback

Tenure

Recommend /

Detract

Roll-Overs

Cross / Up Sales

Complaints

Feedback

Loyalty Economic Framework

Stay Longer


Persistency and Retention

Persistency - Products not retained for expected term

•  % of policies remaining in force after 1,2,3 or 4+ years

•  % of assets transferring out

•  % of premiums being paid up

•  Variance of actual to expected

Retention - Retention of Customers

•  Same product / increments

•  Replacement products

•  Same lifestage

•  Next lifestage

•  Rollovers


The Leaky Bucket

Mid-Term New Business

$

$

$ $ $

$ $ $ $

$


Some Numbers

£70m

0

£25m + £9m 56% and 9% 5X

51%, 15% and 4%


Size of the Problem

£70m … value of business exiting in one year above “plan”

£70m … value of business lost in excess of new business written

$0 … difference between value of new and value lost business

£25m + £9m … the value of business going off in one year and impact on NPV of new business in year 2

5X … amount by which lost assets exceed contractual payments

10% and 50% … share of customer base actively served by a planner and estimated share of assets managed by the company

77% … proportion of lost business controlled by <1/3 of the company’s advisers


Size of the Prize

56% and 9% … proportion of previously lost premiums saved in 1st month of save centre operations and of premium saved from explicit cancellation requests

$18.9m … value of premiums saved in 2 years of save business operation

$68.4m … the value of funds saved in the first 2 years of operation

$2m, $9m, $17m … annual, 5 and 10yr NPV of 1% improvement in FUM retained

1.3% and $5m … annual additional profit from improving lapse rates by this amount (approx 10%)

51% and 15% … proportions of total sales and lapses generated by just 4% of a company’s adviser base


What have we learned?

•  Operating models focus on new sales / customers

•  We have trained customers to be deal driven

•  Retention is everyone’s responsibility

•  Functions are not aligned and often siloed

•  Not understanding customer value is dangerous

•  Prevention is best

•  Understanding root causes is key – complaints are valuable

•  Look hard at business policies

•  Broken processes and poor communications are major drivers

•  Facts and useable data beat inspired guesswork

•  Price is not the same as value

•  Focus on customer retention rather than product

© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International).

Liability limited by a scheme approved under Professional Standards Legislation.

Thank you for staying with me!


Presented by: Mark Lorion Vice President of Analytics, TIBCO Software Inc

Understanding Customers, Driving Loyalty

Understand

Engage

Reward

Retain

LOYALTY

Availability > Understanding

So where do you begin?

There are known knowns; there are things we know we know.

We also know there are known unknowns;

that is to say we know there are some things we do not know.

But there are also unknown unknowns – the ones we don't know we don't know.

Former United States Secretary of Defense Donald Rumsfeld

Loyalty Programs

CRM

Customer Service

Social Media

Customer Sentiment

Econ Pricing

Unlock Insights From any data source…

ü Data visualization

ü Ad hoc data discovery

ü Analytic dashboards

ü Predictive analytics & modeling

ü  Market Segmenta*on ü  Churn Analysis ü  Customer Sen*ment ü  Campaign & Program

Planning ü  Up-‐sell Cross-‐sell ü  Brand & Product

Performance ü  Product Op*miza*on ü  Forecast & Pipeline

AHainment ü  Sales Rep Produc*vity ü  Customer Cloning

ü Ad hoc anything!

Unlock Insights For any application…

Helping today’s top organizations Unlock Opportunities. “…ROI of approximately 200-300%...”

“ I don’t trust data unless I see it in Spotfire.”

“ We’re no longer flying blind…Spotfire has performed beyond our wildest expectations…”

Demo à Case Study

Large Retailer -‐ Challenges

•  Increase market basket through targeted upsell campaigns •  Encourage shoppers to patronize departments other than

their “home” department •  Drive engagement across channels, in store, online, catalog •  U*lize shopper behavior and append demographic data to

personalize offers

WHO ? WHAT ? WHAT ELSE ?

•  Iden*fy Customer with High Propensity to Spend but Low Spend in Various Product Categories

•  Clone “Perfect Customers” •  Predic*ve Analysis Based on Buying Behavior, Spend Demographics for each Product Category

Who to target?

100

Real-‐*me Predic*ve Customer Offers, Op*mizing Cross-‐Sell and Customer Experience

WHO ? WHAT ? WHAT ELSE ?

•  Iden*fy Customer with High Propensity to Spend but Low Spend in Various Product Categories

•  Clone “Perfect Customers” •  Predic*ve Analysis Based on Buying Behavior, Spend Demographics for each Product Category

•  For Targeted Customers, Iden*fy Items Most Likely to Purchase Based on Historical and Predicted Buying Behavior & Demographics

•  Or, Start with Business Unit Objec*ves and Iden*fy Customer to Target with Offers Based on Various Business Drivers:

•  Excess Inventory •  New Product Introduc*ons •  Seasonality •  Local Promo*ons •  Etc.

•  Iden*fy Product with Strong Associa*ons Based on Buying Behavior and Spend Demographics

•  Product Associa*on Analysis •  Create Offers that Increase Spend and/or Improve Customer Experience:

•  Instant / On-‐Spot Incen*ves •  Increase Market Basket •  Accelerated Incen*ves •  Impulse Buys •  Etc.

What to offer?

102

What else to offer?

103

Real-‐Time Predic*ve Customer Offers -‐ Solu*on Flow

Customer & Product Scoring

Customers / Products

Buying PaUern

InteracVons

Real-‐Time, Dynamic Offers & Rules Engine

3

Measuring Results & Performance Dashboard

5

7

2 Customer /Product Analysis

Customer Buying Behavior Product AssociaVons

Customer SegmentaVon

Customer Behavior

Customer Interac*ons

By Individual / Segment

Customer Scoring

Product Scoring

Customer Offers

Create Customer Offers 4

Customer Data 1

Common View of Customer Across All Business Units Forward & Rear Looking

Cross-‐Channel InteracVons

Business ObjecVves

PredicVve AnalyVcal Rules

Update Rules 8

Personalized Real-‐Vme Offers

6

Increase Market Basket!

Live Demonstrations

Complete the Evaluation

Virgin America: Success Story On-Demand

Replay of Director of CRM

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Senior Loyalty Strategist in August