Master C R M 01 M K T Basics C R M

Hanoï 2008

MBis Marketing & Technology

Marketing Basics

Master Master On our menu today

Definition: what’s marketing ? Marketing Basics

The market placeThe consumerStrategic approachesBrand buildingSegmentation Some marketing golden rulesSome marketing golden rules

CRM is direct marketing What is CRM all about?

Master Master One of the marketing definition

« Set of activities of a company that will insure its survival by finding the adequation between market needs and its offer of products or services »Needs identification of potentials

consummers Brand building, communication of the added

valueDeliverRelationship management

Master Master

Behaviour : Adaptive energy investment which serves to reduce the tension between internal and external world

Need coincides with

satisfaction

(birth)

Source of needs Source of satisfaction

Internal world External world

MARKETINGConstructing a bridge of

recognition for the individualbetween problem (need) andsolution (commercial product)

= SATISFACTION

What is marketing all about ?

PRENATAL DEVELOPMENT

PERSONNALDEVELOPMENT

Master Master The market place

Finished & open setN

ew p

rodu

cts

End

of

avai

labi

lity

Product life cycle

New customers

Customer Churn

Con

sum

ptio

n pe

riod

Master Master Actors on the market

Partner

Prospects

Customer

Supplier Company

Legal & commercial environment

Master Master Actors on the market

In function of the type of relationship between the actors the business model can changeBusiness to Consumer

(B-to-C)Business to Business

(B-to-B)Business to Business to Consumer

(B-to-B-to-C)

Master Master What’s the marketing mix ?

The 4 P’sProduct strategy

The portfolioProduct life cycle

Place strategyDistribution strategyLocations / territory management

Price strategyPromotion strategy

Communication strategyPromotions

Master Master The product

The product (or service) proposed by a company will have a life cycle

Launch Development Saturation Death

Master Master The product port-folio

The Boston Consulting Group model

New born

Prod. in development

«Cash cows»

«Dogs»

Master Master Changes on the marketChanges on the market

Global economyThreat & opportunity

Intense competitionFord is dead !Economic elasticity increases

Production processes are changing Technology driven marketsMass customization

New distribution and communication channels are rising

Master Master Customers on the market place

Attidude toward new products or media

16%

Laggards

34%

Late majority

34%

Early majority

13,5%

Early adopters

2,5%

Innovators

Master Master Consumer behaviorConsumer behavior

Environment

AttentionComprehension

Interpretation processes

Memory

Behavior

Knowledge, meaningsAnd beliefs

Knowledge, meaningsAnd beliefs

Attitudes and intentionsDecision making

Integration processes

Cognitive processes

(1) (2)

(3)

Master Master Customer evolutionCustomer evolution

Critères 1998 1997

Quality 77 % 47 %

Aimability 58 % 35 %

After sales 56 % 36 %

Price 48 % 26 %

Speed 39 % 27 %

Product info. 37 % 33 %

Promotions 35 % 20 %

Advices 32 % 24 %

Proximity 31 % 24 %

Qualit

y

Aimab

ility

After

sales Pr

ice

Spee

d

Prod

uct in

fo.

Prom

otion

s

Advic

es

Prox

imity

0%10%20%30%40%50%60%70%

80%

Source: Carré Jaune

Master Master Summary marketing evolution

Product oriented

R & D .

Mass Production

Price Advertising

. Sales Volume

Market oriented

Market Surveys .

Segmentation .

Quality Communication

. Distribution Market Share

Cutomer oriented

Databased information

Mass Customization

Service Real Time

Interaction Logistic Customer Share

Master Master Strategic approachesStrategic approaches

Perceptual & StrategicPerceptual & StrategicPositionningPositionning

Market Market segmentationsegmentation

Product Product differenciationdifferenciation

PushPush

PullPull

Master Master Strategic approachesStrategic approaches

Whatever the « Pull » or « Push » approach, there is still an option in the focusThe product centricThe customer centric

Push Pull

Product centric

Most of the time

Very rare

Customer centric

Often New trend

Master Master

Brand Retention Awareness Segment Test

Unless you have unlimited budget you have to find a balance

More strategic optionsMore strategic options

Master Master What is a Brand?

Brand has been called the most powerful idea in the commercial world

A brand is the proprietary visual, emotional, rational, and cultural image that you associate with a company or a product.

Brand identity includes the brand idea brand names logos positioning brand associations personality the company wants to show.

Master Master Why a Brand in a on-line world?

« If you launch a web site on the Internet today, it ’s like opening up a store on the North Pole - without a brand you are in serious trouble … »

Gerry McGovern, CEO Nua

Master Master A brand name has to be...

Easily spelled top priority because of e-commerce. If your customer

can't spell you, they may not find you.

Easily pronounced In your market language Internationnaly (in English, Spanish, ...)

Reflects your market objective attach yourself to the frontrunner's coattails and

erode some of their equity (the cola wars) boldly create your own category (Yahoo!, Amazon)?

Carefull with new words, acronyms & initials

Master Master Key elements in brand building

VitalityDifferenciation: brand positionningRelevance: perceived value(s)

Status creates attitudeFamiliarity:

frequence personnalized relationship

Estime: meanings & beliefs knowledge & experience quality of the relation

Master Master Sample communication plan

Brand Asset Valuator

Launch campaignAwareness - Differenciation

0

50

100

50

Status: Estime + Familiarity

Vit

alit

y: D

iffe

ren

ciat

ion

+ R

elev

ance

Post launch year 1Positionning +

Relevance

Year 2Values

DifferenciationPost launch year 1

Content + Attachement

Year 2Values

Relevance

Source: Young & Rubicam

Master Master Segmentation

Segmentation is finding the best target audience for your products or services in function ofYour brand valuesYour products or servicesYour budgetsYour strategic objectives

There is a need for segmentation becauseAll consumers do not have the same needs or

tasteYou don’t have an unlimited marketing budgetYour role is to optimize budget allocation &

results

Master Master Strategy & Communication

Strategy is aboutDefine your focus

« where to go »Eg. branding, lotalty, …

The ways to reach your objectives « the way to get there »Targets, distribution channels, …

« If you don’t know where to go, any road will lead you there »

Master Master Strategy & Communication

Communication is aboutMake the consumers perceive your valuesMake your customer understand what your

company stands forBuilding long term relationships

“Advertising is a science, but the limitations of the media turned it into art”

(K. O’Connor, Doubleclick)

Master Master Some marketing golden rulesSome marketing golden rules

THE priority is: client perception There is a difference between the value and the

perception of this value Perceived value depend of many variables

Internal: Auto satisfaction, taste, believes … External: Social “pressure”, information, … Time based

There is also a difference between knowledge and beliefs

Knowledge is about information from previous experiences and intentionally verified information

Beliefs are made of unverified data, communication, heard about, word of mouth…

Perception is combination of both elements Marketing is not made for selling bad products


THE priority is: client perception


A product is not a product & a service is not a serviceunless somebody needs it

Sales precedes productionAnswer the market needs instead of offer

what you produceE.g. niche marketing

Master Master Impact of different communication techniques

Coverage

Top of mind & reactivity

Loyalty & relationship building

Mass media

Direct Marketing

CRM

Key advantages :

Cost/targeted contact Stronger “call to

action” Personalized

communication

Direct Marketing “top of mind” Reactivity Creates loyalty Impact on image Respons cost (ROI)

C.R.M. Coverage Visual communication Cost per contact

Mass Media

Master Master

UK & Ireland population : 63 672 903 *

Sources: * www.statistics.gov.uk ** Vogue

Females 25-64 years o. : 15 872 000

Class A+B : 3 763 000

Living in the region of a POS : 782 000 (London, West Midlands, Dublin)

Potentially visiting POS (30%) in one year : 258 200

Clients

Vogue : 199 152 issues ** (without repetitions)

UK A+B class females reading Vogue : 39 489UK A+B class females reading Vogue potentially visiting a POS : 2 709

Data:

CRM vs. Mass media ?

Master Master

Cost per contact:

Mass Media0,08 €

Acquisition0,98 €

Loyalty2,68 €

Example of an ad in Vogue:One page in 199 152 exemplars is costing 15 646 €

Actions:

An acquisition action:11 500 mailings has been send for a cost of 11 251 €

A loyalty action :

3 000 mailings has been send for a cost

of 8 052 €

Cost useful contact: (targeted & near a POS)

Mass Media5,78 €

Acquisition1,22 €

Loyalty2,74 €

Cost generated traffic: (In function of the reactivity of the media)

Mass Media1155 €

Acquisition138 €

Loyalty103 €

CRM vs. Mass media ?

Hanoï 2008

Marketing evolution

Master Master

Information volume

Market size

Mass marketing

SegmentsTargeted marketing

Micro targets Individual

Marketing

From product centric to customer centric

Marketing evolutionMarketing evolution

Master Master

Maximarketing (Stan Rapp & Tom Collins)

Customer centric approachesCustomer centric approaches

Maximized TargetingProspecting for your most

desirable customers

Maximized MediaNew ways to reach the customer

Maximized AccountabilityProving it works

Maximized AwarenessAppealing to the whole brain

Maximized ActivationInquiries and sales promotion

Maximized SynergyDouble-duty advertising

Maximized LinkageEncouraging interested prospects

Maximized SalesShare of mind & customer database

Maximized DistributionAdding new channels

Max

iMark

eting

Mod

el

Master Master

Differential Marketing (Garth Hallberg)

All consumers are not created equalDifferential marketing strategy

Brand loyaltyProfits


8%

8%

8%

76%

84%

13%

3%

% total U.S. Houseolds

% brand volume

HIGH

MEDIUM

LOW

Master Master

One to One marketing (Peppers & Rogers)

Identify & capitalize on customer differencesThe key is customizationBuild a relation

interactivelyon one to one bases

Expand the “Need set”


Low

High

High

Com

mu

nic

atio

n f

lexi

bil

ity

Production & logistics flexibility

Cu

stom

er v

alu

atio

ns

Customer needs

Master Master

Customer Relationship Management Closed loop strategic thinking

Acquire through sales Retain through services Identify & Attract through marketing

Customer focused Build a relation that adds value KPI’s = Life Time Value, retention, churn, ... Multi-channels communication Technology integration needed


Master Master

MaximarketingStan Rapp & Tom Collins

Differential MarketingGarth Hallberg

One to One marketingDon Peppers & Martha Rogers

CRM

All are data based approaches!


Master Master All made possible by …

Technology convergence and integrationComputer & Networks

Datawarehouse Internal TCP/IP networksThe Web

Telephony & computersCTI, ACD, …MobilesPalms

Cards, etc, …

Hanoï 2008

DIRECT MARKETING IS APHILOSOPHY

Master Master Direct Marketing it’s about

Mentality

Mission

Method

Marketing

DBMedia


Mentality

Mission

Method

Marketing

DBMedia

Learning relationships

Mesure your treasure

Customer equity Efficiency = large number of contacts Effectiveness = targeted & useful contacts transform suspects into prospects, prospects into customers

Master Master Extreems

No communication is communicatione.g. Job.com ’s, waiting list in call centersAffect your imageMake the consumer interpret your non

communication behavior Over communication kills the

communicatione.g. Computer listings, insurance contracts Blur the consumer perceptionDistant the consumer from your product


Mentality

Mission

Method

Marketing

DBMedia

Direct RELATIONSHIP marketing

Direct SUPPORT marketing

Direct ORDER marketing

Brand image


Mentality

Mission

Method

Marketing

DBMedia

SMART method

SSelective targetingelective targeting MMeasurable interactionseasurable interactions AAccountable resultsccountable results RRelationship drivenelationship driven TTailor-made promotionsailor-made promotions

Master Master MMeasurable interactionseasurable interactions

Before Direct Marketing time :“I know that half the money I spend on

advertising is wasted … but I can never figure out which half” (John Wanamaker)

TodayTechnology changed the ways to measure

customer reactionsCards used in POS,Single source studies,Clicks path on web sites,Clicks on e-mail, …

Master Master DM is an interactive technique

Why you should go interactive?Customer demandBuild relationship

Loyalty & prospection One to One Real-Time

The real world is real time !Need for speed

In responseCompetitive advantage


Mentality

Mission

Method

Marketing

DBMedia

Mailings Coupons in mass media Cards Kiosks Call Center & IVR Internet & Extranet e-mails DR-TV & Radio SMS Shopper surveys ...

Master Master

Every increase in connectivity creates an increase in value.

E.g. each individual fax machine plugged in somewhere, adds value to all fax machine connected.

Each new web site adds value to the whole web. Each new e-mail address ...

An additional communication channel adds value not only to the channel but also to the target.

Information about communication behavior“Comm. means / Objectives” cost optimization

opportunities

The law of plenitudeThe law of plenitude


Mentality

Mission

Method

Marketing

DBMedia

Relevant & populated data Grouped all the data arround customer id

Keeping track of all interaction Structure focused on marketing

Transform data into customer knowledge with appropriate DBMS & tools

Master Master The most strategic question

WhoWho WhatWhat

WhereWhere WhyWhy

Buys/Buys/Calls/Calls/InteractionInteractionss

Who buys what, where, when and why ?Who buys what, where, when and why ?

Master Master Close loop thinkingClose loop thinking

DataData

Action

Action

Info

rmat

io

Info

rmat

io

nn CustomerCustomerKnowledgeKnowledge

BaseBase

Hanoï 2008

What is CRM all about ?

Master Master A generic definition for CRM

Key words in this definition Startegic objectives : customer satisfaction, customer profitability,

new channel, productivity, … Customer centric => impacts company’s processes Interactions => means and mentality

Customer centric, Strategic, Cultural and Operational Initiatives concerning interactions between the

company and its market to achieve strategic objectives

Master Master The two different time dimensions of CRM

Customer Relationship & Customer Management

Instant InteractionsCustomer relationship Channels

In time Customer Management Strategy

ObjectivesDrivers & KPI’s

Master Master CRM Strategy & Communication

CRM is a business strategy Made of

360° View on the customer Customer centric organization & processes Business objectives

Influenced by Business drivers Controlled with KPI’s

Touches all departments of the company

Communication in CRM Has to be interactive (bi-directional) Is multi-channel Has to be integrated

Master Master

“Marketing’s future lies in database marketing where we know enough about each customer to make relevant and customised offers to each.”

Ph. Kotler

Hanoï 2008

CRM is a data basedbusiness process ...

Master Master CRM closed loop

CustomerdatabaseIde

ntify

& At

tract Acquire

Retain

Master Master

Internal use

(employees & management)

Information technology back-bone

CustomersCustomersservicesservices

CustomersCustomersdatadata

MarketingMarketing SalesSales

PartnersPartners

CustomersCustomers

ProspectsProspects

Partners portal

Extranet

C.R.M.Direct sales

e-marketingDirect sales

Master Master CRM global architecture

Market placeLegal environementTargets & Segments

Frontoffice

Backoffice

Supplier PartnerEDI EDI

Company

Hanoï 2008

Thanks again for your attention !

Hanoï 2008

Annexes

Master Master Mailings & Coupons

Strength Coverage Low cost

Weakness Slow Needs encoding

Opportunities Accessibility Image

Threats Postal services

Master Master Cards & POS

Strength Source of information Image Life Time

Weakness Relevance

Opportunities Affinity marketing New strategies: category management, RFM, Churn

Threats Concurrence

Master Master Call Center

Strength Coverage Ease to use Human touch Immediate interaction

Weakness Cost Operators (week-days - audiotext 24h/24)

Opportunities Consumer will for immediate response Image (070, 0800, …)

Threats Disturbing (outbound)

Master Master Internet & Extranet

Strength Visual Immediate interaction World wide accessibility

Weakness Coverage (in Belgium) Confidence

Opportunities Image new way to do business (channel, mass customization, …)

Threats Overload (speed, mess, privacy, …)

Master Master Interactive tools for CRMInteractive tools for CRM

Marketing Intelligence = Analytical CRM Marketing analyses (Olap, Data Mining) Campaign results

Operational CRM Campaign Management

DRTV & DRRadio spotsCall - Mail - Call actionsWeb publishing, e-mailing, ...

Sales Force Automation