Customer Engagement with Marketing Analytics

Nordan Consulting

Nordan Consulting

Agenda:

• Who We Are

• Benefits of our product• Challenges, Impact you can expect to your business

• How are we different – How it works• Multi-Channel impacting messaging and offer

• Estimate on Level Of Effort / Client Time Required

Nordan Consulting

Our team makeup is the ideal skills mix for optimal delivery

Advanced Leadership Consultant - MBA

Harvard Grad

Chief Technology Officer – Retail

Solutions

Enterprise Architect – Retail Strategy and

Marketing

Advanced Analytics Scientist – Artificial

Intelligence PhD

Nordan Consulting

Today’s tech and consumer changes are producing many tough marketing challenges that are leaving marketers struggling to respond

9

13

12

2

4

3

1

7

50

60

70

40

20 40 600

86

Financial constraints

Decreasing brand loyalty

Growth market opportunities

ROI accountability

Customer collaboration and influence

Privacy considerations

Global outsourcing

Regulatory considerations

Corporate transparency

5

6

7

8

9

10

11

12

13

Data explosion1

Social media2

Growth of channel and device choices3

Shifting consumer demographics4

Mean

Marketing Priority Matrix

Factors impacting marketing

Under-preparedness

5

1011

Source: 2011 Global Chief Marketing Officer Study industry

Nordan Consulting

How effective is your organization in the key metrics of delivering customer life time value? Forrester report on “The State Of Retailing Online 2013: Key Metrics And Initiatives”

5

Source: http://www.forrester.com/The+State+Of+Retailing+Online+2013+Key+Metrics+And+Initiatives/quickscan/-/E-RES89902#/The+State+Of+Retailing+Online+2013

Nordan Consulting

Not all marketing dollars are returning equal results. Its easier said then done to figure the ROI on your marketing dollars so you can do more with less

No Previous Purchase One Previous Purchase Multiple Previous Purchases

Revenue

59%

41%

Visitors

92%

8%1. Is it allocated correctly?

2. Is it producing the expected results

3. Does it have growth focused marketing attribution

How is your Marketing Budget Performing?

Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

Nordan Consulting

7

Source: http://www.kaushik.net/avinash/analytics-tips-complex-data-simple-logical-stories/?utm_source=social-media&utm_medium=twitterfbgp&utm_campaign=aktw

The way consumers reach purchasing decisions is constantly changing and this requires vigilance with ongoing innovative marketing execution

Nordan Consulting

Shoppers want retailers to provide personalized promotions and recommend relevant – based on IBM Global Study across 14 countries with 23,466 respondents

8From Transactions to Relationships: Connecting With a Transitioning Shopper Global View

Interest in retailer offers

Use my prior purchasing to offer me promotions

55% 43%Use my prior purchasing to recommend new products

Invite me to events

43%Involve me in new product ideas

36%

Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers

Nordan Consulting

According to Forrester, the US retail marketing budget is disproportionately allocated. Effective marketing analytics can provide the necessary alignment

Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

Nordan Consulting

Effective use of data enables marketers to target customers with the highest profitability potential, i.e. for 1% of shoppers returning = ~10% increase in revenue

US Email Marketing Spend, 2011 To 2016

Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

http://www.forrester.com/US+Interactive+Marketing+Forecast+2011+To+2016/quickscan/-/E-RES59379#/US+Interactive+Marketing+Forecast+2011+To+2016/fulltext/-/E-RES59379

Shopper Conversion Estimates

52%54%84%60%

Nordan Consulting

Analytics based marketing actions and/or offers can tap into the five times higher conversion rates of the top two quartiles with the right and effective capabilities

Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

Capabilities needed to convert profitable purchasers

Customer Insights

Trend Spotting

Customer Value Management

Highly Targeted Campaigns

Nordan Consulting

Based on our experience we expect our marketing analytics to increase by 50% on the results of current marketing solutions

The biggest impact to conversion in the first 12 hours of remarketing

Macy’s uses psychological triggers for increased conversions

Source: http://www.seewhy.com/conversion-academy.htm

No eMail Re-Marketing With eMail Re-Marketing

Nordan Consulting

Nordan is able to deliver results by applying the experience and skills from the dimensions critical to today’s business needs of engaging customers

Nordan Markting Analytics Solutions

Capabilities

Execution

Industry Insights

Analytics Accuracy

Nordan Consulting – Product Suggestion Engine

Consumer purchasing patterns are changing slower than implied by the media hype

Nordan Consulting – Product Suggestion Engine

Traditional Product Suggestion

Customer views a product

The system finds the items with the highest view rate when other customers have viewed this product

Nordan Product Suggestion

CustomerA

CustomerB

CustomerC

70% Similar

30% Similar

CustomerD

80% Similar

Nordan looks at the complete view of the customer – browsinghistory, purchasing history, and demographic data

Nordan then identifies products that customers B, C, and D havePurchased and makes suggestions for the next best offer.

Nordan Consulting

The patterns and trends you notice in your market sector can dictate the approach you take towards higher RMI

Leverage Point 5:Advocate Compensation Use platforms like Pinterest

to complement marketing efforts through the help of the extreme loyalist

Leverage Point 6:Application To Person Use of the mobile platform

to send intelligent, timely & location focused messages to mobile users

Nordan Consulting

What is the anatomy of your customer’s experience and how do you maximize this experience by capturing, analyzing and executing on all the possible info?

Transacting / Interacting Involved / LoyalAware / Engaged

Doing

Thinking

Experience

Feeling

• Communication Sources

• Process Flows• Data Extracted

• Transaction points• Process Flows• Data Extracted

• Ongoing conversation

• Process Flows• Data Extracted

• Triggering thoughts • Intuitive experience • Realized value

• Triggering Feelings • Supporting messages• Positive

experience

• Initial Experience • Visual assistance• Continuous

engagement

Image Source - http://www.percepta.com/regions/europe/resources/blog/2012/03/30/owns-social-media-customer-service/

Nordan Consulting

Marketing effectiveness driven by business value results drives much higher returns than traditional digital activity metrics

Activity Based Approach Value Based Approach

- Key Issues + Key Benefits

• Exhausts customers

• Encourages discount hunting / low profitability customers

• Lost opportunity to move a profitable customer to the next segment

• Low Margins

• Possible customer retaliation from spamming effects

• More relevant to the customer – increase probability of engagement and/or purchase

• Lower marketing spend – fewer messages, better timed, and personalized

• Increased margins – pattern detection on moving customers up the profitability segemnt

• Create advocates for your brand

• Reward profitable customers with the right incentive for advocacy and future spend

Nordan Consulting

The Level of Effort estimate for a 2 month POC – the process flow and LOE will be customized based on the project scoping effort in the Project Kickoff phase

Client LOE Impact

PhasesPhases

Project KickoffProject Kickoff

Solution SetupSolution Setup

Results AnalysisResults Analysis

Results PresentationResults Presentation

ExecutionExecution

Establish scope of the solution (Category, Product, approach, data to be used, project plan creation)

Business – 5 hrsTech – 10 hrs

Task requiring assistanceTask requiring assistance LOE (in hrs)LOE (in hrs)

Business Alignment Matrix, Data Extracts, Analytics Models Customized, Solution Automation Setup

Business – 5hrsTech – 10 hrs

Analytics results validation, campaign execution, technical resolutions to issues

Business – 5 hrsTech – 5 hrs

Track execution, run reports, validate results

Business – 2 hrs

Review results with the business and establish next steps

Business – 1 hrs * total attendees

Nordan Consulting

Appendix

Nordan Consulting

2. Capture Shopping Data

RFM

1st Time

Coupon

Sale Items

Brand

1. Select Key Shopping Features 3. Create Analytical Data Clusters

Luxury

Unengaged

High PotentialProfitable

4. Create Analytical Campaign Models

Profitable

Luxury

High Potential

Unengaged

Cluster Offer

5. Execute Tagged Campaign 6. Track Campaign Results

© 2012 IBM Corporation