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Optimization catherine grillot
 

Optimization catherine grillot

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Emailvision - The Roundtable on Strategic Marketing - August 2011 - Catherine Grillot

Emailvision - The Roundtable on Strategic Marketing - August 2011 - Catherine Grillot

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    Optimization catherine grillot Optimization catherine grillot Presentation Transcript

    •  Pricing Strategy Sweeping Changes o Customer Service o Retention o Acquisition o Customer Communications Future Changes & Initiatives 2
    • Definition of OPTIMIZATION: an act, process, or methodology of makingsomething (as a design, system, or decision) as fullyperfect, functional, or effective as possible;specifically : the mathematical procedures (as findingthe maximum of a function) involved in this 3
    •  Allows for planning and prioritizing marketing campaigns to get thebest results. Maximizes the value of customer interactions Improves the value of multi-channel communications andpreference management initiatives (by applying suppressions andconstraints) Allows for the application of marketing intelligence across channels Innovative segmentation and selection techniques help achievegreater productivity and profitability from listsProvide the optimal marketing ROI by determining the best offers for theindividual customers with the best channel capacities and contactstrategies 4
    • Subscription Pricing - company contribution
    • Timeline: 2005-2006: Broad segmentation, mass approach 2008: MBP – Market Based Pricing Model (Mather Economics) True Optimization – applies economic methodologies, principles Effective at maximizing volume and revenue (hh based) 2009-2010: Maximize revenue with „planned‟ volume loss – aggressive pricing, Test/Control Groups 2011: our new “BAU” – MBP retention-model (from 2008) 6
    • 2005-2010 YOY home delivery revenue +22.8% +4.3% -0.3% -1.5% -0.1% 2005 2006 2007 2008 2009 2010 7
    • Average revenue per subscriber $327 $293 $201$173 $177 $180 $183 2005 2006 2007 2008 2009 2010 2011 8
    • HD Volumes 2010-2011 Sunday IllustrationAnnual Averages: Sunday - 2011: 211K 2010: 230K -9% Daily - 2011: 120K 2010: 135K -12% 9
    •  Test vs. Control measurements prior to aggressive roll-out 2K avg # of accts 20% TEST Group 1 Week, 100% Test 4300 avg # of accts 33% TEST Group 10
    •  Renewal „market based pricing‟ initiative 8-9% net differential 11
    • Most and Least loyal subscriber segments clearly identified 100% % 90% R 80% 78% E 70% (Avg) T 60% E 50% N 40% T 30% I 20% O N 10% 0%„Loyal‟ = Tenured, Full Delivery, EZPay, MORI Segments EEN, MS, VE„Churners‟ = Least tenured, fewer delivery days, MORI Segments WGG, LNB, NAN 12
    • Customer Service– More Important Than Ever
    • Goal – become an industry leader in servicing audience Customer First Transitioned Domestic – Extended hours (9 PM weekdays, Noon weekends) IVR – first prompt: „to speak to a live agent, press Zero‟ Customer service hours prevalant Online account management tool Strive for „Perfect Service‟ in the Field 14
    • Campaign:AcknowledgeService IssuesTest effectiveness ofemail communication,segmenting „Core‟and „Churn‟, Test vs.Control GroupsShows slight overall ‘lift’among AT RISK group 15
    • Retention– Strategies ImplementedWith Pricing Initiatives
    • CUSTOMER SERVICERetention-based pricing/save offers:-Multi-level stop saving rates - 10% term discount - 20% EZPay discount - Introductory rates - Service downgrade - Digital replica- Shorter term options on bill statements- Multiple EZPay premiums- Customized online landing page enrollment- “Only in The Dispatch” 17
    • STOP THEStops / Churn STOPS! 2008 2009 2010 2011Weekly stops 1,979 2,449 2,598 1,846Daily Churn 58% 77% 101% 80%Sunday Churn 37% 48% 60% 45%Average customer value 2008 2009 2010 $183 $201 $293 18
    • MBP reinstituted February 2011Retention continues to improve with each subsequent pricing action 2011 Market-Based Pricing Retention # Times % Priced # Accounts # Active Retention 1 4,639 3,728 80.4% New Starts 2 30,789 28,666 93.1% 3 10,413 9,761 93.7% Loyals 4 133 126 94.7% Total 45,974 42,281 92.0%Investigating a more conservative approach for pricing New Starts –how can we optimize pricing our new acquisitions?
    • “At Expire” Campaign: goal to capture payment, renewTest vs. Control – shows ‘lift’, effectivenessCampaign segment is comprised solely of less tenured subscribers acquiredthrough a pressure start channel 20
    • Retention Initiatives & Tactics Market-Based Subscription Pricing „At Expire‟ Notifications End Of Grace and Post-Stop Programs Multi-Layered Campaigns Loyalty, Rewards Customer Communication (Engagement) Value Statements Stop Save / EZPay Offers & Programs Email Harvesting 21
    • Acquisition– Balancing Volume WithRevenue- Changing philosophies
    • Initial impact: Late 2009, Early 2010OVERALL: -24%Began to really PUSH Flat Monthly EZPay Billing …EZPay sales grew by 500+ per week to over 60% of our new starts2010-2011 results:-18% average decline vs 2009Annualized revenue from acquisition: +33% 23
    • BRANDING playinga much larger role 24
    •  Integrated, segmented, multi-channel direct marketing campaigns Able to measure a single channel in a multi-channel marketing effort Withheld a percentage of DM , in a controlled environment Top Portion: Direct channels Below Portion: Indirect Account for response rates in both groups; the difference is the campaign “lift” The „lift‟ is the amount we can statistically tie back to the inclusion of the test component of a multi-channel effort – in this case a DirectAll channels in the Test group show a „lift‟ versus the Control Mail piece.The DM piece attributed to a .42% overall campaign response „lift‟ 25
    • Acquisition Initiatives & Tactics Optimize Acquisition Pricing and Sales Efforts in other areas o Upgrade Optimization Program o Win-Back Programs o Door-to-Door, Direct Mail, Email, Telemarketing Acquire strategically, while improving Retention o Layered Approach o Handheld Device / technology o Targeted door-to-door Monthly rates and billing (no vacation credits?) Expanded New Mover Program Partner with branding for convergence campaigns (WIIFY) 26
    • Now … THISis Optimization!“UpgradeOptimizationProgram”(Mather Economics)
    •  Layered Approach Tracking conversions by channel, free/paid Measuring incremental revenue & units Long-term (retention) strategy 28
    • The Future– committed to a growing,evolving business
    • Future Initiatives Digital Integration (Digital replica, Hybrids, Tablets) Growing AUDIENCE - committed to a customer relationship based on selling subscriptions, not just newspaper subscriptions 30
    • Future Initiatives Strategic, financially sound, data-driven decisions Segmented, layered approached within circulation marketing verticals Incorporate Customer Lifetime Value 1:1 customer interaction (CRM) Social Media opportunities Mobile strategies „Added value‟ product testing Loyalty, Rewards – find something truly „sticky!‟
    •  Remain committed to OPTIMIZATION & TESTINGOnly through true optimization can we, as marketers, gain criticalknowledge about factors that influence the success – or failure – ofmarketing campaigns … to learn, re-learn … apply to subsequentcampaigns. 32