iStrategy Melbourne - Redefining Commerce in the Age of the Empowered Consumer - Steve Wilkins, IBM


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This session will examine how today's hyper-aware consumer will continue to change the engagement approach of today's organisations. It will focus on the importance of meeting the needs of today's consumer and look at the key imperatives required by marketers to succeed in this ever changing environment by knowing your customer as an individual, creating value at every touch point and being an authentic brand and culture.

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  • Speaker notes appear here throughout the presentation.
  • In February 2012, The New York Times published an article by Charles Duhigg (Doo-hig) titled, “How Companies Learn Your Secrets.” It was a story that simultaneously captured: The future of marketing Some very interesting possibilities for me as a customer And some chilling risks about the new responsibilities in this era.
  • Look at the lead paragraph of this article. It says so much about our topic—the future practice of marketing. These 64 words capture: The promise of what marketing is becoming …finding a way to serve customer needs, even in advance of that customer being able to voice what he or she wants from us. A way of serving that customer based on a fuller, more personal picture of what that individual wants. How data—and analytics—are becoming core to the profession. And how that is changing the skills we require , and what collaboration looks like. The critical partnership in the article is between a statistician and his marketing colleagues. And we see the responsibilities in security and privacy measures we must now rise to. The phrase…“even if she didn’t want us to know”…now that has tremendous implications. Now, of course, executives do their reading on Sunday too. Did any of you get a call from your boss asking, “Do we have this predictive capability?” But perhaps more than that, the bigger point of the article is actually about what motivates and compels a customer to behave in new ways. And by implication, what is marketing’s role in helping customers develop new habits of choosing our companies--authentically desiring to do business with us? So let’s talk more about how our profession is changing. And let’s start with what most agree are the timeless responsibilities of marketing.
  • For a long time, marketers have had three big marketing responsibilities: Marketers have always been responsible for knowing the customer. Marketers have always been responsible for defining what to market, and how to market. Marketers have always protected the brand promise. How are these responsibilities changing? Over the past year, IBM talked with more than 1,700 CMOs, analyzed academic writings, took a look at what content and ideas were shared through social media, and interviewed several CMO CIO Leadership Exchange participants. Based on that, this is where we collectively think our profession is going.
  • Marketers have always been responsible for knowing the customer. Data and analytics enable us to know each customer in a way that goes far beyond segmentation, demographics and transaction patterns—they surface a much wider set of needs that we can try to fulfill. Our new role is to help the enterprise see each customer as an individual.
  • Marketers have always been responsible for defining what to market, and how to market. Because we have a sense of individuals’ wider needs, we can be much more strategic in how we fulfill them at every touchpoint. Certainly, with products and services—but far beyond that too: with knowledge, context, experiences, connections to others, a new peer set and more. This is about marketing driving not just marketing experiences, but the much broader set of experiences that a customer has with the company. Our role is to create a system of engagement that maximizes at each touchpoint.
  • Marketers have always protected the brand promise. In a world of radical transparency, each experience with the company is a test of its promise. And while we once lived in a world where gaps between that promise and reality were experienced by, well, those who experienced them, in an interconnected world a poor experience travels into the realm of social media out to tens, hundreds, thousands or, in some cases, millions of other people’s lives. That magnification also works in the reverse—positive experiences are magnified. One CMO summed it up as: “How we are is who we are.” Our new role is to put the best insurance policy in place: to build a brand and culture that are authentically one.
  • Let’s look more closely at each of these three imperatives. We want to understand, refine and, ultimately, validate this point of view for ourselves and our company.
  • To go more in-depth into the first imperative of understanding the customer as an individual , let’s tell another story… (questions to engage the audience) Have you felt that a company doesn't fully know you when they reach out? Have you felt that a company has categorized you incorrectly? Have you felt that a company is grouping you with a population that you don't relate to?
  • You may know someone who has had a story that’s similar to this one. You flip through the mail one day and find an envelope from AARP.  When you open it, you realize that it's an invitation to join the American Association of Retired Persons — it's that infamous letter that AARP sends you on your 50th birthday.  As you read the membership information you start to get upset.  You may be turning 50, but you are still very much employed.  You are active. You are connected in social media.  In many ways, you are just like your children who are 25 years younger.  It doesn't feel right that you are receiving a retirement letter. You say to yourself, "That's not me."
  • We all do this. We select a segmentation model and then impose it on a population of people. Through our interactions we tell people who they are— you are this demographic—and more and more individuals saying, no, that’s not who I am. I am much more than that. And this, of course, is at the heart of the next chapter of our profession. We are rapidly moving the boundaries of what we as marketers can understand about the customers we serve. Going beyond the transaction data, beyond demographics, beyond segmentation. So reflecting on this story...What’s interesting is that AARP is actually sitting on top of a number of services, products and knowledge that anyone turning 50 could benefit from. It is a brand that has a lot of clout and a lot to offer. If AARP could see additional aspects of who we each are—piecing together a much clearer view of each of us—and then be creative about how it introduces each of us to other AARP members with similar interests…the story of that letter’s arrival would be much different. Or maybe it wouldn’t have been a letter at all, but rather, some other way to introduce us to the beliefs of AARP and its resources based on each of our own beliefs about where our life is headed.
  • We all see that there is an unprecedented amount of data being gathered at every meaningful touchpoint about each customer. The best brands among us are very strategic about which touchpoints get instrumented, and what kind of data emerges as the result—not just from the touchpoints under the marketing function’s control, but all touchpoints the company has. Question to ask: w hat is our instrumentation strategy?
  • The great leap, of course, is into all the data that lies outside our enterprises — the unstructured and Web-originated and social media–generated data. How will we syndicate, buy, source or attract the necessary data from those sources? Customers are exhibiting a digital body language that gives us a look into their passions, opinions, sentiments. The most skilled companies are combining social data, other Web-based data and transaction data—and running precise analytics over them to gain new kinds of insights. In this world, the path to success is largely dependent on having comprehensive access to the data you need to formulate these insights, and strategies to discern the veracity of that data. Question to ask: what is our strategy for attracting data?
  • How do you know your customers as individuals? You must think through the entire customer experience, living in the shoes of your customer, going through key transactions or the experiences your customer goes through every day. More progressive companies are taking this mapping very seriously, to walk in the shoes of the customer, to understand different scenarios, different paths that your customer goes through with you every day. And asking if are these the right experiences, where are the kinks? Where are the problems? Understanding that is key. Second is understanding digital behavior. If we go back 5 years ago, very few companies we talked with had the eCommerce VP and the marketing VP, and the IT guy sitting in the same room. But now more and more, we are seeing them converging. In fact, WSJ reported recently that the Four Seasons have said publically that over 50% of their marketing spend is digital. That was unheard of three years ago. And they are not even a retailer. It’s a remarkable shift, and what comes with that shift is the need to integrate that customer behavior while they are using their preferred channels and devices. It’s becoming a huge competitive advantage. Once you know your customer as an individual, how do you leverage that insight not just for marketing, not just in the front office, but how do you align that with the supply chain? And with the rest of your organization, with the product development? To some extent this is the ultimate, right? The outside in view of your business, taking customer information and aligning it from the front office to the back office, creating a customer-centric organization. Lastly social media – customers are talking not just to you, but to each other and they are expressing their frustrations, wants, needs, and anything else in between, in social networks. So companies need to be prepared and be good at listening, have very strong listening skills in social media. These are the key elements for knowing your customers as individuals. Customer examples: IHG , leading global hotelier, using IBM Unica Campaign, 250% increase in email ROI with reservation relevant emails Yellow Pages -- Real Business Results using IBM Analytics • Increased user satisfaction by 44 percent by improving the overall user experience •Helped increase the number of total site visits by 8.1 percent and the amount of unique visitors by 5.8 percent •Helped increase merchant click through rates by 4 percent by improving consumer engagement with advertisers •Reduced the number of no-result searches by 50 percent
  • If we have done a great job of delivering on imperative 1 for our organization, then imperative 2 comes into play. A full view of a customer’s needs means that we can then serve a broader set of his or needs. Enlightened by this full picture of what customers value, the business world divides into two types of companies: those that then approach customer engagement by being systemic in their approach and those that do it in pieces. The latter tend to approach marketing transformation project by project, supported by a proliferating array of tools. Projects, like cross-channel integration, geo-location, mobile strategy, campaign automation, cross-sell/up-sell and more, which are staffed by largely autonomous teams and approached in discrete initiatives. In contrast, systemic companies are intentional about their customer experience—at each moment and over time. They design how their company is experienced. They build a blueprint that makes sense of trends, developments and technologies as an integrated whole—how they fit together to accomplish the right outcome for the customer.
  • As a result of this blueprint, the companies that think systemically are able to draw on technology to automate: the process of determining which products, services, offers, promotions are pinpointed to which customer… at which touchpoint in that customer experience. They are able to be personal, relevant to customers. They build a true cross-channel system. That integrates channels. That integrates the company. That integrates like-minded customers. And because it’s a system, not a series of projects or initiatives, they can capture the data that is generated across the system. The interesting thing is that to build such systems, the first questions you ask are not technology questions. They are human behavior questions.
  • Creating value at every touch: The new world of marketing is about service. Marketing should be so relevant it feels like a service. That’s the new paradigm around marketing, it’s got to be relevant, it’s got to feel like a service. The challenge in executing that philosophy is how do you do that in an automated way? You can’t do that manually, you have to do it across tens of millions interactions. How do you have an infrastructure, (what we can a system of engagement) to support you organization that scales, enabling personalization to millions of customers simultaneously. Lastly as you think about sharing data, how do you scale? IBM’s role in the area of data sharing and infrastructure, we are trying to set some standards. We are spending time and research on key industry standards, for example in the area of the data syndication. But in general one of the biggest stumbling blocks in creating value at every touch is the creativity of being relevant, and the flip side is how do you execute that. The biggest problem with execution is silos. Silos in marketing technology, where we see our customers, every day, having to integrate 50 or 100 different applications, that is not acceptable. So this change and convergence that you see in the market is really to address the issue of siloed technologies. Customer Examples : IBM itself- Marketing Transformation using Unica Campaign saw an 87% better email response and 30X faster time to execution Telefonica Vivo, the largest mobile phone provider in Brazil - 30% increase in campaign revenue through more targeted offers (and 40% improvement in employee satisfaction) eSurance – 2000 recovered policies per year, and 3 month payback with better application experience Quicken Loans - $2M revenue, 8% mortgage lift through better app experience Major Retailer of sporting gear and clothing (cannot name-- LLBean) created an application that helps customers find parks/destinations where they can enjoy their passion for the outdoors. It’s not about selling anything, it’s about creating a customer experience that extends beyond your organization, delivering value to the customer.
  • What will we put into that system of engagement? The very best of the best of these companies define value not only as products and services, but something more. It’s not just about promotions, coupons and marketing tactics. It’s also about content. Expertise. A new peer set. Social connections. Knowledge. Advice. The most skilled of us use technology to make these kinds of interactions across all channels personal—from the very first contact through to every ongoing service interaction. The ambition is to do all of this in real time across millions of customers or transactions.
  • The way to discern whether we have truly built a system of engagement that is a competitive advantage is to ask: Can I interact as a company with a single customer as an individual? Can I do that at massive scale? And do I run analytics over that system to then guide what products, services, content and connections to build next? If we can answer yes to those three questions, we are at the vanguard of the profession. Let’s return to why it matters. It matters because when you get it right, this happens…
  • In imperative 1, we talked about how we can collect data about each customer to know him or her as an individual. But, of course, the same tools are in the hands of our customers and they can collect a tremendous amount of data about our companies. They can know everything about us.
  • You don’t have to look far in any media these days to see one of these stories. As a marketer, these withdrawals from the brand bank are of concern Of course, the accelerator is social media . It used to be the case that when something went wrong in how people experience our company, an individual might experience it. That person might tell a few other people. But for the large part, the contagion of criticism stayed very local. Now, with social media, any gap between what a brand promises and what it delivers instantly reaches hundreds of people who in turn reach thousands of people who in turn reach hundreds of thousands of people.
  • These three imperatives are a starting point for the future practice of marketing. The goal is to test, refine and ratify them for ourselves, so that we can collaborate more effectively to evolve our shared profession.
  • These three imperatives are a starting point for the future practice of marketing. The goal is to test, refine and ratify them for ourselves, so that we can collaborate more effectively to evolve our shared profession.
  • iStrategy Melbourne - Redefining Commerce in the Age of the Empowered Consumer - Steve Wilkins, IBM

    1. 1. Redefining Commerce in the Age of the Empowered ConsumerPresenter: Steve Wilkins, Vice President Marketing, IBM Growth Markets Region
    2. 2. THREE IMPERATIVESAn emerging point of viewon the future practiceof marketing
    3. 3. Part 1: The changing professionA glimpse of the future of marketing as illustrated bya recent article in The New York TimesPart 2: Introduction to the three imperativesA point of view on the new roles and responsibilities ofthe marketing functionPart 3: Deeper dive into the imperativesA closer look at the imperatives and what it takesto make it a reality.
    4. 4. Part 1:The changing profession
    5. 5. In February of 2012, The New YorkTimes published an article thatgave us a glimpse of the futurepractice of marketing.
    6. 6. Part 2:Introduction to thethree imperatives
    7. 7. As we look to the future roleof marketing, we must rememberthe timeless responsibilitiesof the function.
    8. 8. The timeless responsibilities of ourmarketing professionMarketers have always been responsiblefor knowing the customer.Marketers have always been responsiblefor defining what to market, and how to market.Marketers have always protected thebrand promise.
    9. 9. The three imperatives of a new professionUnderstanding each customer asan individual.Marketers have always been responsiblefor defining what to market, and how to market.Marketers have always protected thebrand promise.
    10. 10. The three imperatives of a new professionUnderstanding each customer asan individual.Creating a system of engagement thatmaximizes value creation at every touch.Marketers have always protected thebrand promise.
    11. 11. The three imperatives of a new professionUnderstanding each customer asan individual.Creating a system of engagement thatmaximizes value creation at every touch.Designing your culture and brand sothey are authentically one.
    12. 12. Part 3:Deeper dive into thethree imperatives
    13. 13. Imperative 1:Understanding each customeras an individual
    14. 14. Let’s start with a story…Have you ever felt that a company isgrouping you with a population thatyou dont relate to?
    15. 15. Imperative 1: Understanding each customer as an individualIndividuals aredemanding that weknow them as morethan a transaction,more than ademographic, morethan a segment.
    16. 16. Imperative 1: Understanding each customer as an individualThe best brands arevery strategic aboutwhich touchpointsget instrumentedand what data aboutindividuals emergesas a result.What is our instrumentation strategy to learnmore about customers as individuals?
    17. 17. Imperative 1: Understanding each customer as an individual Demographic Transaction data data TransactThe great leap is into Attribute s ions Ordersall the data that lies Demo- graphics Paymentoutside our historyenterprise—and into Charact Usagethe new insights that eristics historydata offers. Purchas Needs e stage Desires E-mail / Chat Prefer Call ences center notes Opinion Web s click- In- streamsWhat is our strategy for person dialogs Behavioral Interactionattracting data from beyond data dataour borders?
    18. 18. Imperative 1: Understanding each customer as an individual • Understand the complete customer experience • Integrate digital behavior with traditional data sources • Leverage customer insight in all parts of the business ‒ Leverage customer insight to increase department to department collaboration ‒ Leverage customer insight with partners, agencies and customer communities • Listen to social conversations 20
    19. 19. Imperative 2:Creating a system of engagementthat maximizes value creation atevery touch
    20. 20. Imperative 2: Creating a system of engagement that maximizes value creation at every touchCompanies that thinksystemically are ableto provide the right Offe roffering at the right Producttouchpoint—and tomotivate greaterengagement with a Knowledgebrand. Advic e Networ k
    21. 21. Imperative 2: Creating a system of engagement that maximizes value creation at every touch • Create marketing so good that it feels like a service • Scale and support millions of relevant offers • Execute holistically based on standards-based suites and hybrid suites • Introduce data syndication standards inside and outside the organization Leverage systems of engagement to ensure relevant and positive customer experiences across all touch points that are aligned with corporate character 23
    22. 22. Imperative 2: Creating a system of engagement that maximizes value creation at every touchThe most successfulsystems of engagement aredefined broadly—they Productinclude products, but alsoexpertise, new peers, Net- workconnection and advice. Net- work ProductWhat will we put into Knowledgethat system of engagement? Offer
    23. 23. Imperative 2: Creating a system of engagement that maximizes value creation at every touchA system thatdrives competitiveadvantage is:• Individualized• Scalable• Inspiring for the future portfolio Customer Attribution Digital analytics modeling segmentation Customer predictive Business analytics intelligenceWhich of these three points do Future portfolio of products, services,we need to work on? knowledge and experiences
    24. 24. Imperative 3:Designing your culture and brandso they are authentically one
    26. 26. The three imperatives of a new professionUnderstanding each customer asan individual.Creating a system of engagement thatmaximizes value creation at every touch.Designing your culture and brand sothey are authentically one.
    27. 27. Thank You @stevewilkins_