Tying Engagement to Customer Lifetime Value


         Teresa Caro, Director CRM Solutions, Razorfish
 David Rosen, SVP, S...
Hello



Page 2 © 2010 Razorfish. All rights reserved.
Page 3 © 2010 Razorfish. All rights reserved.
Direct marketers recognized long ago that
                       customer segmentation improves profits. One
             ...
Relationship marketing is the retention of
                           customers through varying means and
                ...
Source: http://istobe.com/customer-lifetime-value-calculator.html
Page 6 © 2010 Razorfish. All rights reserved.
Marketer’s Dilemma




                     How do I create loyal,
                     primary-store
                    ...
Loyalty Programs Addressed
    This Need

    • Carrots to gain additional
      information and drive changes
      in be...
Page 9 © 2010 Razorfish. All rights reserved.
Marketer’s Dilemma > How to Measure Advocacy


    28% of Internet users
    cite online reviews
    and recommendations
 ...
Marketer’s Dilemma > How to Prioritize Channels

                                                    Loyalty
             ...
Marketer’s Dilemma > How to Revise LTV




                         + Direct Influence Value

                         + I...
Where Do We Start?
Start by Defining Engagement

 1. How is engagement measured today?
 2. How are consumers engaging with brands?
 3. What v...
Defining engagement is
not new.

Yet, current models
focus on measurement
within a channel – not
the channel as a whole.

...
What Does Engagement Mean to You?



Page 16 © 2010 Razorfish. All rights reserved.
What We Heard



            Engagement is more than just the channel. It is the
              dialogue that takes place (...
What We Heard > Channel Use

                    One-on-one interaction                                       Snail mail
 ...
What We Heard > Key Takeaways


    Differentiate through
         human touch                                 Inject so...
What We Heard > Key Takeaways



    Treat consumers
         fairly                                      Gain trust thr...
How Do You Measure Engagement?



Page 21 © 2010 Razorfish. All rights reserved.
Experience a Paradigm Shift


                                                  
                                        ...
Connect the Dots




                                                               Engagement
    Single View            ...
September 2009 “The ROI Of Email Relevance, 2009”
Relevance-Empowered Email Drives Higher Top- And
Bottom-Line Improvement
What’s Next?




Page 25 © 2010 Razorfish. All rights reserved.
Q&A



Page 26 © 2010 Razorfish. All rights reserved.
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Tying Engagement to Customer Lifetime Value

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Teresa and David will discuss the evolution of loyalty marketing and how advocacy and the proliferation of channels is changing the way we segment and engage consumers.

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Transcript of "Tying Engagement to Customer Lifetime Value"

  1. 1. Tying Engagement to Customer Lifetime Value Teresa Caro, Director CRM Solutions, Razorfish David Rosen, SVP, Strategy & Channel Development, Loyalty Lab May 13, 2010
  2. 2. Hello Page 2 © 2010 Razorfish. All rights reserved.
  3. 3. Page 3 © 2010 Razorfish. All rights reserved.
  4. 4. Direct marketers recognized long ago that customer segmentation improves profits. One of the earliest segmentation techniques, called RFM analysis, has been in use for over 50 years. It is based on three simple customer attributes: Recency of purchase, Frequency of purchase, and Monetary value of purchase, hence the name RFM. David Shepard Associates. The New Direct Marketing: How to Implement a Profit-Driven Database Marketing Strategy, 3rd edition, 1998 Page 4 © 2010 Razorfish. All rights reserved.
  5. 5. Relationship marketing is the retention of customers through varying means and practices to ensure repeated purchase. It relies upon the communication and acquisition of consumer requirements in a mutually beneficial exchange usually involving permission for contact by the customer through an "opt-in" system. Gale, B.T.,Chapman., R.W. (1994) Managing Customer Value: Creating Quality and Service That Customers Can See New York: Free Press Page 5 © 2010 Razorfish. All rights reserved.
  6. 6. Source: http://istobe.com/customer-lifetime-value-calculator.html Page 6 © 2010 Razorfish. All rights reserved.
  7. 7. Marketer’s Dilemma How do I create loyal, primary-store purchasers, where they always think of me first and achieve 7-10x the LTV?
  8. 8. Loyalty Programs Addressed This Need • Carrots to gain additional information and drive changes in behavior • Better quantification driven by better identification of people and their transactions • Greater relevance of their marketing communications Page 8 © 2010 Razorfish. All rights reserved.
  9. 9. Page 9 © 2010 Razorfish. All rights reserved.
  10. 10. Marketer’s Dilemma > How to Measure Advocacy 28% of Internet users cite online reviews and recommendations as the leading factor on purchase decisions Page 10 © 2010 Razorfish. All rights reserved.
  11. 11. Marketer’s Dilemma > How to Prioritize Channels Loyalty Membership Paid Media Earned Media Direct Channels External Communities Internal Communities Free Media Page 11 © 2010 Razorfish. All rights reserved.
  12. 12. Marketer’s Dilemma > How to Revise LTV + Direct Influence Value + Indirect Influence Value + Long Term Effect Page 12 © 2010 Razorfish. All rights reserved.
  13. 13. Where Do We Start?
  14. 14. Start by Defining Engagement 1. How is engagement measured today? 2. How are consumers engaging with brands? 3. What value should we be placing on those engagements? Page 14 © 2010 Razorfish. All rights reserved.
  15. 15. Defining engagement is not new. Yet, current models focus on measurement within a channel – not the channel as a whole. Page 15 © 2010 Razorfish. All rights reserved.
  16. 16. What Does Engagement Mean to You? Page 16 © 2010 Razorfish. All rights reserved.
  17. 17. What We Heard Engagement is more than just the channel. It is the dialogue that takes place (one-way or two-way), the ability to choose how / when to engage (e.g., opt-in or opt-out), the value each channel represents, and whether or not expectations were met. Page 17 © 2010 Razorfish. All rights reserved.
  18. 18. What We Heard > Channel Use One-on-one interaction Snail mail phone, face-to-face still key for problem transmitting information, promos – less of a resolution, questions, purchasing resource now than email Social sites Face-to-face learning about company culture and news, retail shopping and purchasing though many see these as more personal tools Email Review sites promos, offers, some communication, automatic honest user-generated feedback, e.g., Yelp, notifications; transfer of non-critical or non- Amazon sensitive information WOM Company websites literally either in person or by phone; a key, shopping, purchasing, price comparison, interpersonal touchpoint, it’s engagement once- browsing, researching products and services removed and is a way to learn about any brand Static ads Mobile e.g., on buses, trains, billboards; are more emerging for financial management, shopping, passively consumed purchasing Page 18 © 2010 Razorfish. All rights reserved.
  19. 19. What We Heard > Key Takeaways  Differentiate through human touch  Inject something human at every point – make them feel valued  Afford control  Consumers want to opt-in and give you permission before they are served  Be relevant  Leverage new technologies to serve up appropriate information Page 19 © 2010 Razorfish. All rights reserved.
  20. 20. What We Heard > Key Takeaways  Treat consumers fairly  Gain trust through transparency and consistency  Use the right channel for each need  Different needs are served by different channels  Get the basics in  Optimize each channel first place and then integrate and expand Page 20 © 2010 Razorfish. All rights reserved.
  21. 21. How Do You Measure Engagement? Page 21 © 2010 Razorfish. All rights reserved.
  22. 22. Experience a Paradigm Shift  65% of consumers say a digital Digital can make or break a brand. experience, changed their opinion of a brand.  Of those, 97% said their experience Digital experiences create customers. influenced whether they eventually purchased from the brand Source: Razorfish FEED Report 2009 Page 22 © 2010 Razorfish. All rights reserved.
  23. 23. Connect the Dots Engagement Single View Behavioral Data Across of Data You Social Transactions Control Networks Page 23 © 2010 Razorfish. All rights reserved.
  24. 24. September 2009 “The ROI Of Email Relevance, 2009” Relevance-Empowered Email Drives Higher Top- And Bottom-Line Improvement
  25. 25. What’s Next? Page 25 © 2010 Razorfish. All rights reserved.
  26. 26. Q&A Page 26 © 2010 Razorfish. All rights reserved.
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