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2009 TransPromo Summit 1
Understanding Data
Kevin J. Klein, Director, Production Intelligence ConsultingPitney Bowes
Alan KraftPresidentMedia Horizons Management
1
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In the new economy of conscience consumption, understanding our customers and prospects is more vital to growth than ever
Do no harm
The goal is to have customers say “you thought of me”
Perspective
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What is TransPromo?
TransPromo is the INTELLIGENT combination of transactional customer communications and RELEVANT marketing to DRIVEcross selling, upselling, customer education, loyalty and cost savings
TransPromo HAS BECOME A REALITY due to:VDP (Variable Data Printing) technology plusCost effective quality color production technology plusCustomer specific data (Client Analytics, Location Intelligence, Inherent Document Intelligence)
Going beyond color printing, campaign management and personalization to increase customer value
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Adoption of a Scientific Approach to Marketing
A recent Epsilon CMO Survey showed CMOs are shifting to more targeted and measurable marketing strategies:
31% marketers use sophisticated modeling tools to analyze existing customer data (behavioral, preference and demographic)
28% said they made 'rough estimates’ based on past experience.
19% said that they analyze past purchase behavior.
Source: Epsilon CMO Survey September 8, 2008
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As Relevancy Increases, So Do Profits
Factors that make statements relevant:PR
OFI
TS
RELEVANCE
• Content that Relates to my Needs• Based on my Preferences• Recognize Extent of Relationship • Highlight Local Resources • Accuracy of Information• Timeliness of Offers “You know me”
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Measuring Propensity to Respond
Names only
Static full color
Personalization & full colour
Database intelligence & localization
Source: Personalized and Database Printing, Romano / Boudy
0% 100% 200% 300% 400% 500%
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Predicting Customer NeedsObserved Behaviors
Product usage behavior– Products/ Balances– Age of Relationship– Mean Time Between Purchases– Order of Purchase
Transactional Behaviors– By Type of Transaction– By Channel
Demographics and Lifestyle VariablesGeographic Factors
Relative Convenience to CustomerLocal Brand Strength
Events Life Events Market Events
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Data Sources for Relevant Communication
CustomerBehavior
1.5+ BillionTransactions
CustomerBehavior
115+ MillionPurchases
Third PartyData Sources
Sales & ServiceChannel
Benchmarks
45,000 Location Profiles30+ attributes
Product &Customer
ProfitabilityNorms
ChannelOperatingExpenses
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Customer ProfilingProfiles indicate the
degree to which a given cluster finds the client’s offer attractive relative
to the general population
Once defined, profiles are extremely useful in identifying areas of opportunity for cross-sell and prospecting
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Profiling – The Impact of Convenience
Distance Decay MeasurementPer Capita Sales by Distance
$0
$10
$20
$30
$40
$50
$60
$70
0 5 10 15 20Driving Distance (miles)
Sale
s pe
r Cap
ita
Fundamental rule of site based retailing: market share diminishes as distance increasesIn addition to contextual market data, LI can improve accuracy in profiling by taking into account this friction of distance
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Leverage Customer Insight
Prioritized Offer Selection
Optimize Statement Marketing
TransPromoContent
Database
TransPromo: Get Customer Intelligent
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Upstream
Downstream
Customer Data Implementation Strategies
Transactional Data
Composition
Printing
Finishing
Mailing
Delivery
Customer DataIT, External
Digital Assets/CopyMarketing/Agency
Business RulesMarketers
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Vehicle = OEM TiresDate = SeasonalityAddress = PSYTE Cluster (Family Orientation, Safety Conscience)Address = Location of Nearest Michelin Dealer Dealer
Customer Data Driven 3rd Party Marketing
Michelin Tires are our choice for safety
Visit Town Fair Tire at 67 Federal Road in Brookfield, CT and
Receive a free safety kit and a $20 rebate on each tire purchased
KOYOTAFinancial Services
KOYOTAFinancial Services
1518
7/12/2010
KOYOTA
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Customer Data Driven “Pointers”Increase attention to internal offer though relevance
New England winter is coming soon! Important Safety Offer Included
KOYOTAFinancial Services
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Behavioral Marketing
Using consumer behavior, including lifestyle, purchase and channel engagement to maximize marketing ROIMost commonly used data (by direct marketers):
Demographics > GoodPreference/Attitudinal > BetterBehavioral > Best
Example:Ask 100 people if they’re planning on exercising in the next six months
vs.100 people who have recently purchased running apparel
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Behavioral MarketingDriven by customer data
Fast forward to current day and add:Ability to analyze sequence of purchases leading up to a specific action taken by a consumer, which can lead to stronger re-marketing effortsAbility, on the fly, to determine whether a consumer prefers to transact via phone, mail or webAbility to analyze open rates, open times and reader preferences of email communications
Rece
ncy Holy trinity of
behavioral data points traditionally used by direct marketers
Frequency
Monetary
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Behavioral MarketingThe value of TransPromo
Direct marketers are constantly looking for the next level of media efficiency, and TransPromo offers a greater degree of behavioral marketing segmentation than is currently available in the transactional document channelOld School:
Marketer produces insert/bangtail for inclusion in outgoing transactional document mailings
New School: TransPromo offers marketer the ability to target by multiple criteria, including geography, purchase behavior, timing, credit worthiness and by channel engagement
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Behavioral MarketingCurrent Customer Marketing
Maximize Lifetime Value (LCV) by using behavioral intelligence to target offers and promotions on a highly segmented level. Focus on frequency of promotions, seasonality, creative execution, etc.
Brings direct value to your organization through third party advertiser revenue
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Behavioral MarketingThird Party Marketing
Produce greatest possible third party advertising revenue Enable marketers to maximize their marketing ROI within your transactional document environment
Brings value to your organization through third party advertiser revenue
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TransPromo: Get Customer Intelligent
Synthesize Customer segment knowledge
Hypothesis formulation
Hypothesis testing & verification
Creating
Communicate winning value propositions
Synchronize the call to action
Communicating
Scale successful experiments
Accumulate knowledge
Executing
