Service marketing trends 2011

SERVICE MARKETING
TRENDS 2011

Juan Carlos Alcaide Casado

CONTENTS / 1. The 10 principles of the new
marketing
2. Latest trends in market research
3. Environment
4. Society values
5. Emerging socio-cultural trends,
consumption and innovation
opportunities
6. The relation between incremental
innovations, two strategic focuses
and eleven marketing trends
7. Marketing: Obsession with metrics
8. A new way of existence, marketing
managed and thought

Trends videos

http://www.youtube.com/watch?v=-CRSqLOZFis
http://www.youtube.com/watch?v=AcaWidrxFx8
http://www.youtube.com/watch?v=Mc0ggyHcQBk
http://www.youtube.com/watch?v=XPPgJzeOAtw&feature=relmfu
http://www.youtube.com/watch?v=UFCvzjipOKs

Premises

1 “Marketing 1.5”

2 Change
“is being written now”

1. / The 10
principles of the
new marketing

10 principles of the new marketing

1. Recognize that now the consumer has the power.
2. Develop the offer directly only at the target of this product or service.
3. Design marketing strategies from the customer point of view.
4. Focus on how to distribute/deliver the product, not in the product itself.
5. Go to the customer to create more value together: the role of the company
has changed.
6. Use new ways to reach the customer with your messages.
7. Develop metrics and analyze ROI (Return on Investment)
8. Develop high tech. marketing.
9. Focus on long-term activities
10. Look at marketing as a whole.

10 “new” principles of the new
marketing 3.0

1. Love your customers and respect the competition.
2. Be sensitive to the need to change and show you are ready.
3. Look after your name and be sure of who you are.
4. All customers are different; focus first on the ones who bring the most
benefit.
5. Always offer a good package at a fair price.
6. Show that you are always available and welcome.
7. Find customers, keep them and make them grow.
8. Whatever your business, it’s a service business.
9. Keep improving your business process in terms of quality, cost and
delivery.
10. Collect relevant information, but use your common sense before taking
the final decision.

Product-market strategies:
5 different approaches

From segment to niche
•Find the appropriate niche for product/service customized to customer.

Focus of attention on strategies
•Focus on consumer, the competitors, the distribution channels.

Products/services objectives
•Each product/service with a clear objective within the overall company.

Market coverage
•Selective coverage: niches progressively smaller and customized.

Globalization
•Global Marketing.

Marketing Mix Strategies
In the sixties In the eighties In the future

Competition based on the Competition on quality, design,
Competition based on price
different characteristics of service and the creation of
segments or on the price itself.
the products. market value.
Prices based on the
Price based on costs. Prices based on perceived value.
competition.
The suppliers and The suppliers and The suppliers and
intermediaries are company intermediaries are company “ intermediaries are company
“adversaries”. cost factors”. “external partners”.

General sales network. Differentiated networks. Multiple sales networks.

High pressure sales. Transactional sale. Relational sale.

Strong investment in sales Communications directed to
Strong global investments in
promotions directed to defined objective groups that
advertising.
specific segments. are strategically coordinated.

Focus the management

Step 1: Focus the management on 5 areas:

Make the
Create
Focus on the Strengthen search for
Take actions efficiency
best customer new
to keep them. by driving
customers. relations. customers
down costs.
secondary.

Step 2: Customer portfolio management using the
DSDC principle (Different Strategies for Different
Customers).

2. / New trends in
market research

New trends in market research

Consumers and customers saturated

Consumers and customers power

New techniques in responding to new
markets
Market research on
the internet.

Market forecasts

Observation of
trends

Anthropological
analysis

New tools

Market research on the Internet

The INTERNET will be the determining factor in the future of research.

Influence in three directions A bigger pile to
look for
information within
everybody’s reach.

It is changing Flexibility to make
commercial and contact with
social relationships. millions of people.

In primary research

Qualitative

Quantitative: sample problem
•The total of network users do not represent the potential customer of a particular research project.
•There are customers without access to the Internet who are not included in the sample
•Research by Estudios IT saw that the results of online and offline samples are the same, but the former
are cheaper.
•INTERNET validity for field work.

INTERNET benefits

Faster & cheaper

More sincere
interviewee
More precise
(avoiding errors)

You can use images and multimedia

Real-time results.

Secondary information sources

The existing resources on Internet have multiplied the secondary
information sources infinitely compared to what was available a little
while ago.

Market forecasts
Market
forecast

Based on taking advantage of
the Knowledge found spread The limitation on the
about in different areas of the nature of the system:
company. Collect this
knowledge and aggregate it to predict future system
obtain a general view as a result events that are
of greater concrete and specific
participation

Everybody in the company
who has an opinion on the
topic of the investigation
takes
part.

Trend observation or Coolhunting

Techniques:
- The diary, in which the observer, all
through the day, notes the events or
situations that have caught their
Detect relevant attention and which respond to the
social values objectives of the study.
- The records that are micro-
and translate them into capsules of information that are
consumer trends. organized by theme.
- Photos, as they represent a graphic
testimony and are therefore very
explicative of those trends which are
becoming more common.

Anthropological analysis

Analysis
•Consumer life experience dimension that allows the interpretation and comprehension of the
socio-cultural meaning of the act of consumption.
•Establish communication and marketing strategies.

Consumer
•The human being is not just “homo-consumer”. The way that people interact with products
and service in the buying area is influenced by different life styles, education, life experiences,
origins and trajectories, both as individuals or families.

Techniques
•Ethnography.
•Auto-observation or anthropological panel
•Participant observation
•Resultant interactions

The moment in which we live

INTERNATIONAL ECONOMY (economic notes march 2011- CECA)

 The first quarter confirms the recovery of the world economy. 5.0% growth
in 2010
 Rocketing oil prices.
 U.S.A. growth.
 Euro zone growth 2% at the end of 2010.
 1.6% growth in 2011.


INTERNATIONAL ECONOMY (economic notes march 2011- CECA)

 0.6% year-on-year growth in the last quarter 2010
 GDP fell 0.1% in 2010 and forecast for 0.8% in 2011 and 1.4% in 2012.
 Deficit reduction 9.2% of GDP in 2010.
 Unemployment around 4.3 million and forecast to reach 20.7% in 2011.
 3.6% inflation (+0.3 in February).


SOCIETY

Life expectancy: 78.37 M, 84,59 W

Births 497,365 vs deaths 395,612.

Birth rate: 1.4 children. Average age of mother 30.98

Average household: 2.4

Unemployment rate: 20.33%

Marketing re-orientation

In 3 areas

Introduce the use of Focus marketing activities on Adopt the concept of
marketing metrics. concrete objectives with zero base budgeting.
guaranteed results; especially
direct and guerilla marketing.

Development of zero base budgeting
(not squandering resources)

Sales management: productivity

Increase controls and the use of productivity indicators: now that
“what is not measured cannot be improved”.

Automation of sales management:
“TO SAVE YOURSELF FROM THE ECONOMIC CRISIS YOU SHOULD
SAVE YOUR CUSTOMERS”

Without customers you
will not have the oxygen
you need to stay alive: sales.

Principal effects of the economic crisis
on companies
1 Market contraction

2 Reduced sales

3 Lower profitability

4 Increase in bad debts and age of debt

5 Reduction in sources of finance

6 Reduction in cash flow

7 Increased competition

8 Greater pressure from large competitors

9 Loss of market share

10 Limits on growth possibilities

11 Loss of overseas markets

12 Psychological effects

“Winning” companies used a focused
approach
Focus involves concentrating on one or a few specific
and concrete areas, organization activities,
disposable resources (financial, human, etcetera) and
the strategic measures they take.

Compensate for less income with initiatives to
activate sales: doesn’t work in 95% of cases.

Total customer orientation (TCO)

“Winning” companies used a focused
approach
In the area of marketing

Adopt a more strategic
Refocus the company Refocus marketing
vision to manage
on the customer. activities.
prices.

Restructure marketing Focus not just on
budgets according to the marketing efficacy but
crisis situation of the also on marketing
market. efficiency.

What did the winners do to manage their prices?

Don’t reduce prices until all the available alternatives at their
proposal had been used up in order to avoid doing so.

When forced to lower prices it was always accompanied by
associated approaches or measures in function of the direct and
proportional cost and expenses savings that they had achieved (not
before).

They always had in mind that in periods of crisis it is more important
to maintain cash flow than to create profitability.

Structural change (characteristics)

Qualification
Maintenance of •Fall in illiteracy. Increase in
Older population level of Fewer youth. •Increase in proportion of
replacement university salaried workers
education.

Fall in the
Greater
importance of Increase in
geographic
agriculture and foreign
mobility of
increase in population
workers.
industrial

Structural change (characteristics)

All of this is due, in part, to a change in the structure of the family.

Children are
People getting
being born to High divorce
Fewer marriages. married are older
parents who are rate.
than before.
older.

Accelerating emptying of
Spanish households, the 5
Increase in birth rate outside
person homes are
marriage.
disappearing, as single person
homes are increasing

Weak values in hard times

Research study done by Observatorio de
valores directed by Javier Elzo y Ángel
Castiñera, with the collaboration of ESADE


We are witnessing a cultural transformation:

From a
traditional society Modern society

From a modern society Postmodern society


1. Individualism and freedom of rights

We live a great contradiction between values and deeds

Value: Social cohesion
Deed: Inordinate individualism


A society…

Free in rights and customer
That wants to fulfill the senses
Accepts most private conduct
Tolerate and accepts any kind of behavior


2. Plastic and relational family

Principal transformations:
Plastic family
Weaker structure
Becomes a relational family


3. Human equality and symmetry of roles
The same rights and
obligations for each sex
both at home and at work


4. Decline of “productivism”

More value is given to leisure time and social relations than work.
Work as an instrumental factor.
No assumption of responsibilities
Disaffection between company and worker


5. Leisure as a value and as customer association

The main value is leisure and human relations
The associated passive participation increases
Except the unions


6. Disaffection with politicians but not with politics

A deep democratic sentiment is retained as a value
Institutional and political crisis
Discontent is propagated by networking.


7. Immigration

The number of immigrants is perceived as too high
Spanish society shows itself to be open to immigrants


8. 5 citizen typologies

Neoconservatives
•Traditionalist and rule bound, socially involved and favors the imposition of
traditional values in exchange for social cohesion and in detriment of social
freedom.
•People who defend authority, social order and traditions.
•Against state intervention in the economy but not liberal in their personal
conduct.
•They represent 28% of the population and are in decline.



Neomodernists
•Social libertarians.
•Critical with socially repressive order, more egalitarian and liberal in rights and
customs.
•Usually young, not religious and identify with concepts such as: ecology,
pacifism, alternative globalization, human rights, fair relations between North-
South, etc.
•They represent 20% of the population and are static in number.



Civic individualists
•More influenced by postmodern individualism, although they still maintain
certain collectivist tendencies, which leads to them having a civic conscience.
•Liberal as far as rights and customs are concerned and apply a moderate
market liberalization.
•They represent 25% of the population and are in slight decline.



Pragmatic individualists
•Very individualistic, but people of order who adopt social norms. Very
materialistic, they like to live well and in order to do so they adapt to the
system.
•Little social involvement, they only defend their own interests.
•They represent 17% of the population and are growing fast.



Egocentric individualists
•Radically individualist and hedonistic. Only concerned with their personal
enjoyment abandoning any kind of moral duty.
•Focused on the present, they live for the day and look to gain a personal
advantage out of any circumstance.
•They are against restrictive social order and a high level of social
disconnection.
•They represent 10% of the population and are growing.

5 / Emerging socio-
cultural and
consumption trends
and opportunities for
innovation

Methodology

1. Desk research:
• Recovery and redevelopment of materials and concepts accumulated by DOXA and by
the Services Marketing Institute applicable to this project.
• Work online coolhunting and specific bibliography.
• Analysis of information provided by the company.

• Four focus groups with insurance customers.

• Three focus groups with company employees with different profiles.

• DOXA + SMI (2010)

Actual socio-cultural and
consumption trends

1. Consumer empowerment
• Strong familiarity with marketing, sales, promotions and advertising
mechanisms.
• They are not “innocent” or credulous.
• Psychological filters and defense mechanisms against what is promised.
• Wide access to product and service information.
• Before buying they compare features, prices, quality, etc.
• Ever more demanding. They demand quality, guarantees, post sales service,
solutions to their problems.

Actual situation The future

Buying criteria Innovation

Loss of loyalty

The customer is
progressively Customer orientation
better informed Need for multi-
channel integration

Need to reinforce The measured price
customer contact

Research by our consultancy (S.M.I) and Doxa
Institute

“Trends in relationships
between service companies
and their users”

A new type of customer has arisen and, as a consequence, a new
relational approach between service customers and their users.
THE BEE CUSTOMER

The bee customer

•Distrustful, cautious
•Expert
•Unbelieving
•Impatient
•Volatile
•Hyper informed
•Not resigned
•Bad tempered
•Prickly, irascible
•Someone has to pay…

Principal conclusions

Customers are aware of their power and demand power:
There is a search for “essential” values: a solid culture of corporate social
responsibility (CSR).
People are looking for customization in all kinds of services.
There are new segments that require a different treatment: invalids, tourists
and immigrants.
Offer services “to women” and, of course to the so called “pink” market
composed of homosexuals.
Customers are tired of the traditional loyalty marketing ploys and seek greater
recognition.

Principal conclusions

They demand agility and expect a capacity to respond.
They require a radical transparency.
They want information and professional advice, because they feel powerless
when in doubt.
They reject relational communication. They want clear and detailed
communication, customized and emotionally positive with practical and
useful information.
They don’t want the Internet to replace paper, but to complement it.
Information must avoid fear, uncertainty and doubt (fud) through service
systems that are not robotic, customized and friendly, online or not.
The true key to loyalty is the customer experience in the moment they use the
service.
There is a clear tendency towards low cost.

consumption trends

2. Worldwide Web and new forms of participation:

The customer wants to be listened to and at the same time to be given solutions
to their problems where they can enter into contact, receiving the right and
adequate service, that the company faces up to and deals with their claims or
complaints and also that they take into account their opinions. To do this they
use some customer-facing tools such as a consulting channel for customers to
enter their opinions and suggestions (telephone and email). 24-hour free
telephone, web, complaints, reclaims, opinions, suggestions, focus groups,
surveys to understand emerging requests, innovation opportunities. This allows
the company to have a greater knowledge and management of their customer
relations.

consumption trends


• Ever more connected amongst themselves through social networks, blogs,
forums, common interest groups, SMS, etc.
• They are not just receivers of messages, but also editors, producers of message,
contents and meanings.
• They transmit their positive and negative experiences to other consumers.
• A time of very intense communication. For the young it is a field of
communication and experimentation on a large scale, but for many adults it is
an overload of “noise” and technological saturation.

consumption trends


Examples:

• The El Corte Inglés web-site, where it states “the customer is always right”.

• comunitae, one assumes that it will be a bank in which it is the actual users
who firstly decide if they want to be solicited for loans or investments. From
there and with certain security measures, such as risk analysis, etc., it is the
investor who decides through bidding what investments they will keep and how
much and where they wish to invest.

• The Banco Sabadell, in collaboration with IBM, is launching Banco Sabadell
Labs, an initiative to explore together the possibilities of the Web 2.0 in the
finance sector. On the site under the caption “Banco Sabadell, thinking ahead”,
at the moment there are advertisements for a couple of feeds for investors and
for the press and the location of their office and cash machine network in
Google Maps

consumption trends


Examples:
• Telefónica’s web page where there is a space to resolve doubts, reclaims, frequently
asked questions. Etc.

There are spaces in the page where the customer can interact with customer facing staff with a special font.

consumption trends

3. Distrust, dissatisfaction, reaction:
A strategic opportunity for services companies: take ownership of the territory available
through RADICAL TRANSPARENCY, generating incremental innovations around:
•Security and Confidence
•Credibility
•Perception of honesty
•Feeling of protection

Example: AXA Radical transparency:
•Sufficient information.
•Simplified information, easy to understand.
•Honest and preventive information.
•Explain very clearly what is included and what is excluded from the policy.
•A charter of service commitments.
•Advice on ways top optimize costs/benefits/coverage.
•Customers will value having a password which enables consultations
online about contract characteristics, information, history and accident
statistics.

consumption trends

4. Proliferation. Excess of offers and saturation of what is new:

• Extreme proliferation of brands, products, services and features. Too many
choices.
• Feeling of freedom and ease to select and/or change, but also a feeling of
saturation and stress.
• Somuch choice produces a paradoxical effect of indifference to brands or
products. It reduces the capacity to surprise and interest in what is new or a
new feature.
• Almost everything that is sold is sold as something new.
• Against this over saturation many consumers prefer what is simple, austere and
basic.

consumption trends

5. Responsible consumer, demand for values:

• Preference for products or services that embody values (respect for the
environment, social responsibility, sustainability, etc.).
• Rejection of exaggerated consumerism, the depredation of natural resources,
etc.
• Rejection of the “abuse” of the motor car as a symbol of a hyper-consumerist
society that is irrational and wasteful.
• Due to the economic crisis a new culture of saving and austerity.
• A gradual implantation of consumer habits and treatment of residuals that is
more respectful to the environment.

consumption trends

5. Responsible consumer, demand for values:

Cause marketing acts as an important tool to generate awareness and help for
community problems. When using this concept, the company can meet its social
responsibility obligations, and at the same time attract consumers and increase
sales. For many companies, social marketing is synonymous with philanthropy.
Reserve a specific sum from your budget to support NGO’s or some philanthropic
association and with this calm your social conscience. What we want from cause
marketing is that this philanthropy or social action has a major impact, and at the
same time, results in benefits for the business.
You have to think strategically, choose a single cause to gain major influence and
identity and work together with a diversity of social organizations. That a company
chooses a cause, implies that this should form a part of their strategic objectives and
involve all areas, above all, responsible for bringing in help and donations and also in
marketing so that the cause can be integrated into its strategy.

consumption trends

6. The culture of me, the spiritual and the natural

• The wish to “give oneself pleasures”, allow oneself deserved rewards. Claim the
right to pleasure, the quality if life, freedom and personal autonomy, the search
for hedonistic satisfactions. Individualism. The search for personal identity and
self-fulfillment.
• Care of the body and the soul, interest in emotional stability, wellbeing, balance,
inner peace, personal harmony, fulfillment, spirituality. Consumption as a
source of physical, psychological and “playful” pleasure.
• The wish to reduce the fast pace of life and dedicate time to to the mind, to the
“me”.
• Valuing of a form of life that is more “simple”, “natural”, “true”, balanced.

consumption trends

6. The culture of me, the spiritual and the natural

Examples
•Patagonia. Coherence.

•Starbucks: They promise us: the best coffee, price and service in the world (a touch of
romance, accessible luxury, an oasis of peace and spontaneous social interaction). Bank
example: Deutsche Bank office (with a shop in the office, creating a more relaxed
commercial atmosphere), bank office with a cafeteria or internet access (Caja Navarra,
etc…)

•Caja Navarra: with their new business model, the civic bank. It promotes continuous
interaction with its customers beyond mere bank transactions putting at their disposal
in some branches (called ‘canchas’) places to study, meet customers, do events,
connect to the internet. Also the customer decides where the social fund money goes
by choosing the project they want to support.

•COATO. “Ecological agriculture”

consumption trends

7. Demand for personalization, customization:

This is about a company being able to adapt personally to the customer, to the
society that makes up its demand and the real needs that these have, and what is
more showing this adaptation to the market. There is an extraordinary Me
Culture, and people seek personalization, “customization” and “tuning - your
choice” in all kinds of services. Companies must show a concern to adapt to
anybody.
• Expectation that products and services adapt to the individual needs of the
customer.
• Non acceptance of being boxed into standard formulas, “white coffee for
everybody”.
• Self-affirmation of the individual, of autonomy, of personal freedom.

consumption trends


Examples:

• The Caixa allows you to choose the design of your credit card and even
offers you the opportunity to put your own photograph on it with a choice
between 5 different financial arrangements.

• Examples of tuning cars, mobile phones, cases, fixings, badges and above
all, imagine downloads, tones, games, answering.

• The Barcelona brand Demano, allows the customer to choose the product
and the “cloth” (Recycled PVC advertising banner) as part of their choice.

consumption trends


Examples:
Adidas uses a CS4 interface with adobe ilustrador where they combine
clothes with all the possible color patterns for a group of samples and
apply all the variations. An example of process standardization to achieve
mass personalization

consumption trends

8. Globalization, multiculturalism:

• Intense contact with foreigners, immigrants, products and ideas from other
cultures.
• Globalization of markets, accessibility, contact and interest in exotic and ethnic
products that are culturally different.
• Accustomed to new, different and innovative products and services. The
novelties have now been transformed into something everyday, and a routine
requirement.

consumption trends

9. New protagonism for women:

• Accumulative changes in the identity and role of women. They work outside the
home, have a high level of education, have a strong social and cultural life,
intense contact with communication media, technological innovation and the
vanguard in products, services and forms of commercialization.
• At this moment a new big change: occupying leadership positions.
• Women are an important driver in perception changes, election criteria, values,
sensibilities and responsibility criteria.
• New forms of social, productive and emotional intelligence.
• These changes also indirectly occur in men.

consumption trends

9. New protagonism for women:

Example:
Companies should become active, in an impartial
way, in organizations that are involved in defending
consumer rights and make themselves able to react
to a society creating transparent organizations with
active participation by consumers seeking equality
between the consumer and the market. Not taking
aggressive positions but on the contrary adapting
company strategy to reflect the interests of
consumers and develop information systems to
measure customer satisfaction.

consumption trends

10. Effects of the economic crisis:

• Reinforces the trend towards a more austere
consumption, demand for the best price, a more selective
attitude to products and services following rational
criteria, cost savings, avoiding or cutting back on
avoidable purchases, etc.
• Readjustment of budgets to reduce costs, without
renouncing quality of life expectations.
• Feelings of insecurity and the desire for security
(economy, employment, home, law, medicine, against
insurance companies, against third-parties, etc.).
• Changing buying, consumption, and service use habits.

The end of the middle class?
>>A new social order in a global economy

Massimo Gaffi y Edoardo Narduzzi:

Europe: disappearance of the middle class
Transformation to a potential mass class.

There is appearing a new polarized social system, with a reduced technocratic
class that is getting increasingly rich at one extreme, and at the other a social
tumult without class where the former middle and lower classes are mixed, with a
capacity for consumption which is increasingly limited and whose pattern
revolves around low cost services and articles. A social class that is happy to eat
in low cost chain restaurants, fly EasyJet and assemble their own furniture.

consumption trends

11. Buying and consumption habits will change:

• Impulse purchases will decline. Greater care with the cost/benefit ratio.
• They will choose quality brands at a lower cost. Many will only look for cheaper
brands.
• Within the same company or group, substitution by secondary cheaper brands.
• Private labels will become stronger.
• There will be a maximum vigilance of the quality of commercial relationships.
• People will buy in smaller quantities.
• Maximum advantage of offers, promotions and sales.
• Choice of more long-lasting products and the postponement of replacements
and renewals.
• Elimination of many products and services considered not really necessary.

consumption trends

12. Some specific expenditures will reduce:

• Automobiles.
• Housing.
• Furniture and house fittings.
• House repairs and maintenance.
• Clothes and shoes.
• Perfumes beauty products.
• Leisure activities.
• Eating out.
• Holiday trips (reduction of number and length of journeys).
• All risks insurance, third-party instead.

Resulting changes

Consumer behavior: 30% pure low cost according TNS (12/09)

• Consumer requires that companies adapt to their needs.
• A significant proportion of demand for specific services normally reserved for higher
classes.
• Families that live by squeezing the credit card...
• hybrid consumer:
 Fly with Vueling to a 6 star hotel with spa...
• Savvy shopper:
 I am an experienced and intelligent customer
• Cheap&chic:
• Back to basics
• Massification of luxury

Some trends in Travel

Hunting for • There is a continuous and growing number of people who will forgo quality and features
offers in exchange for a reduction in price
• This group is made up mostly of young people who use the internet
• The media attention devoted to the rich and famous will increase peoples’ expectations
More for less • They will start to demand prime category products at accessible prices

Interest in • 43% of customers interviewed say «I am always trying to improve my health». Free time
health and well- is an vital opportunity to improve wellbeing and find an escape valve from frenetic lives
being • Health tourism will grow to avoid long waiting lists for treatment

A taste for • Tailored solutions and personalized products and services put in doubt the «one size fits
personalization all» mentality: more and more customers in developed markets insist on tailored
solutions

Sustainable • Responsible travel consists in improving the planet at the same time as enjoying the
culture visited. Increasingly more travelers want to travel with the idea contribute to
tourism
cultural sustainable development of the place visited and protection of its environment

• The multiplicity of demand and offer creates a modern customers with a kaleidoscopic
life
Multiple lives
• The same person has many different roles in their daily life, that at the same time create
different needs and demands

The economy of • Modern customers want to enjoy life to the maximum. As their buying power increases,
experience their material needs are progressively more satisfied, experiences are valued more than
possessions
Source: Tribus Travel Report 2007 (Consultant to Henley Centre HeadlightVision for Amadeus)

Social macro trends
Civilization based on
intelligence
Human knowledge duplicates
more rapidly every day.
Actually, human knowledge Civilization based on
duplicates every 7 years. In the “Mega”
An urban world 2040, it is expected to Technological projects
Increasingly more duplicate every 3 months will move to humankind
citizens of the earth to almost unlimited
alone but not growing. dimensions: Skyscrapers,
Higher buildings to gain nanotechnology,
space but with nanorobots
increasingly smaller SOCIAL MACROTRENDS
dwellings

Plural civilization
A world of old
people Globalization will develop
In 2050, there will be
more than 2,000 million a plural civilization
inhabitants of the world adapted to models and
older than 60 and of standards that are
these 20% will be older worldwide, creating and
than 80 ethnic and cultural mix

Source: Study “The customer and distribution in Spain, 10 year perspective” (BNP PARIBAS)

Individual trends
“Save our Cocooning
Clanning
society”
Demolition Fantasy
Of idols adventures

Vigilante Pleasure
customer revenge

Down Aging TENDENCIAS INDIVIDUALES Indulgences

Being alive Anchorage

Cashing Out Ergonomics

99 lives Feminine
Emancipation thought

Source: Trends research S. XXI Instituto de Empresa (España)

What are customer tendencies? (1/4)

Definition Examples

Seeking protection against an Development of videoclubs, online
environment progressively more banking, teleworking, internet
Cocooning aggressive: Delinquency, pollution, shopping, private neighborhoods
traffic, agglomerations: “Home safe
home”

A trend to form clans. People seek Increase of clubs, associations
comfort and support with people intermediaries, libraries with reading
Clannning who share values and beliefs areas, closed neighborhoods with
neighbors admitted by vote,
confidence, viral marketing and word
of mouth
How to escape stress and boredom, Virtual reality games, “war games”,
Fantasy search for excitement and stimulus simulated ski slopes, “gastronomic
adventures with risk-free adventures adventures”, development of an
urban explorer

Some rebel customers, tired of being The pleasure of the forbidden will
told what is good will appear bring: increase in alcohol
Pleasure indifferent to or breakers of the rules consumption, heavy meals (pizzas,
revenge hot dogs, pastas), a return to
moderate smoking,..

Source: Trends research S. XXI Instituto de Empresa (Spain)


Definition Examples

Busy or stressed customers seek “I deserve it” culture leads to: short
rapid gratification and a trend to trips to exotic locations or to hotels
Indulgence
self-reward with little vices and with personality, buying at the
gifts delicatessen,..

Return to spiritual roots of the past. Rise of orientalismo, tai chi, yoga,
After materialism we move to the astrology, return to spiritual
Anchorage spiritual with touches of mysticism retreats, Satanism, genealogy,…
and the appearance of new
religions

As a reaction to feeling Models and intelligent products
disconnected and isolated in an era that know their owner, on line
Ergonomics
of “depersonalized”information, a newspapers chosen at will, internet
search for tailored products and blogs and, in general, direct
services personalized marketing

Feminine thought is influencing a Shops that accept unused products
way of looking at business moving as payment, animal carrier that fits
Feminine
from a hierarchical model to under the airplane seat,…
thought another that is more relational,
sensitive and responsible



Definition Examples

Men reject their traditional roles Men are sensitive too, they can
and with new attitudes “starting to cry, iron, cook. Homosexuals
Emancipation
be what they want to be” receive less prejudice coming into
the light (importante segment)

You have to take on multiple roles Increase in importance of
in order to fight time pressures technologies that save time: Card
99 lives maximizing efficiency at all times readers on motorways, urban
bicycle systems

Customers progressively more
People revise their priorities and
stressed and spent seek fulfillment
start their own business, job
Cashing Out and satisfaction in ways of life that
security ceases to make sense,
are more simple
return to rural life,...

Recognition of the importance of Meditation, non-traditional
wellbeing. Not just seeking a therapies, acupuncture, herbalism,
Being alive longer life but also aids to a better virtual surgery, communal farms
quality of life for self consumption



Definition Examples

Nostalgic for the carefree days of Tendency towards immature conduct
Down Aging infancy and thinking that everything ignoring social conventions, infant
in the past was better look for schools for adults, nostalgia TV,
symbols of adolescence traditional brands,..

There is mistrust of the power of big
More demanding customer,
Vigilant companies, exerting influence
tendency to syndicate and to protest
customer through pressure groups, parents
exerting pressure when they are not
who fight for the future of their
in agreement
children,..

Skeptical customers topple idols in Rejection of big companies as being
Toppling idols the worlds of business and dangerous to the individual, anarchic
government institutions. The bigger posture, fight against supposed
the institution, the greater the government conspiracies,…
mistrust

Customers worried about the fate of Development of the idea “Think
“Save our the planet, environment and green”, volunteers, electric cars,
society” education recycling,..


6 / The relationship
between
incremental
innovations, two
strategic focuses
and eleven
marketing trends

Opportunity

Link the incremental innovations to a coherent vision and in the medium-term
through two strategic focuses:

Focus 1: Company 2.0. Allows you to have a framework process engine for incremental
innovations.

Focus 2: Reputation. The trustworthy company. Allows you to have a topic engine for
incremental innovations.

• Both together will aim for a differentiated profile in the medium and long
term.
• Both together will aim for incremental innovations that are not obsolete or
diluted in reality.

• Customers are not the same and they are changing their forms of behavior at the
Increase the same pace as the change in technology
emphasis on the
• Insurance companies that want to capture customer segments will have to adapt
customer to the new situation through knowledge of the customer

• The key to knowing the customer is the distributors, in which case you should
implement systems that allow the distributor see the customer across all the life
Better tools cycle and across all the channel interactions
• Investment in these systems should be made very selectively working together
with the intermediaries

• The lack of integrated multi-channel strategies is endangering the idea that some
Multi-channel insurance companies can put the customer at the centre
strategies • The strategy that is integrated multi-channel avoids wasted resources on
redundant information

• There is a need for system flexibility that allows information flow, so reducing cost
Change of as much as time
technology to more • This will improve transparency and uniformity for the sales force and the
flexible systems distribution network

• The globalization of the value chain is being used to reduce costs and to increase
Operational improve quality both in services and sales
efficiency • Outsourcing the IT service and other support functions (HR, accounts…). A multi-
country service can be centralized in one country

COMPANY 2.0 REPUTATION
Trustworthy company

DIRECTION
STRATEGIC

MICROINNOVATIONS

Strategic focus 1  COMPANY 2.0

CEM PERMISSION MARKETING

COMMUNICATION
+ CRM 2.0 INFORMAL
FREQUENT
WEB 2.0
Blogs
Wiki
Socialbookmarking +++ COMMUNICATION
RSS FLUID
+ FUNCTIONAL
FREQUENT
EXPERENTIAL MARKETING FEEDBACK CREDIBILITY
= CEM = COMPANY 2.0 FLEXIBLE

Strategic focus 2  REPUTATION/Trustworthy
company

GAP
“The image of companies is not
good, nor close, nor transparent.
They are perceived as distant, too
powerful, arrogant, untrustworthy Strategic company opportunity: take
and even cheating with the use of ownership of this available territory,
creating with incremental
small print in contracts. innovations…
The general sensation of mistrust •Security
and the frequent existence of
•Confidence / Credibility / Perception
negative experiences are certain of honesty
facts. ” •Feeling of protection
(Phrases taken from a blog, 100% coherent with what is repeatedly
expressed in focus groups)

The principles of customer orientation

• Customers become active participants in the redesign of
products, packaging, pricing or product development
Active dedication
to the customer
• Through this we achieve greater success in the
1.Customers introduction of new products and a more rapid
are active development cycle
innovators
• It is no longer enough for companies to be driven by
demand. If we do this we can satisfy needs but we will
Satisfaction of never achieve fast growth
Customer needs • This growth is achieved through identifying non explicit
needs and anticipating them in advance (qualitative /
disruptive jump)

2.Companies 3.Orientation
towards • We must use the moments of truth (buying moment) to
must identify
customer Orientation towards the create brand loyalty
hidden needs customer sales
experience • It is fundamental that in the moment of buying, the
experience, not the
customer reviews the whole range of our products
product

Source: Customer oriented innovation (Forrester Research 2005)

1. Personalization / CEM

• Relational privileges (length of custom, number of cars…).
• Adapt insurance / age of vehicle.
• Adapt insurance price / value of vehicle through time.
• Innovate in customer loyalty based on “financial leverage” of
insured (stable income for n years).
• Insure the person, not the car.
• Joint personalized contract for all policies

Customers have a repetitive
and recurring need for
customization and
adaptation

1. Personalization

• Possibility of personal proactive offers
• Personal “managers” (not brokers). Personalized and ethical consultancy.
• Audiovisual systems (Promoting personalization, transparency and intimacy.)
• Have an Avatar like Ikea.

• A la carte insurance.
• Pay as You Drive.
• Customization or tuning.
• Etc.

Personalization Personalized
“avatar” management

2. Contractual transparency

• Enough information.

• Simplified information, easy to understand.

• Honest and open information.

• Explain clearly what is included and what is not included in the policy.

• Service commitment charter.

• Advice on how to optimize costs/benefits/coverage.

• Customers will value a password to be able to consult on the net the contract
features, information, history and statistics on incidents.

3. Systematic listening to customers:

• Consulting channel, opinions and suggestions (telephone and e-mail).

• 24-hour telephone (free number).

• Place on the Web for questions, complaints and suggestions.

• Periodical consultations with actual customers (focus groups and surveys)
to detect emerging demands, Innovation opportunities, suggestions, etc.

4. “We have rights”: customer-centered
emphasis

EMPHASIZE AGILITY
INNOVATE THE CAPACITY TO
RESPOND
Luxury cars and express service

TOTAL AGILITY
…the right
To have…
TOTAL PROTECTION SECURE – TRUSTWORTHY
Idea of PROTECTION – EMPATHY
PROFESSIONAL INFORMATION
NOT SALESMAN PROFESSIONAL COMMUNICATION
EXPERT
AND EXTREMELY PROACTIVE

5. Customization + “acquired rights”

Apparent radical customization //Mass customization
It is about a personalized adaptation by the company for the customer, and to
the society that makes up its demand and the real needs that this presents, at
the same time showing this adaptation to the market. There is a strong Me
Culture, and it seeks personalization, “customization” and “tuning-your choice” in
all kinds of service. Companies must be prepared to show a concern to adapt to
anybody.

5. Customization + “acquired rights”

Possible evolution of the
bonus-malus model, given
that the current system is
deficient or to a certain extent
used up by the customers.

Offering some other kind of added
value, beyond economic
•To loyal customers
•To customers without claims
•To valuable customers

6. Proactive communication (1 of 6)

Customer communication must not be just sales. This trend is based on the idea
that of every three messages only one is a sales message. Customers reject
relational communication because they are fed up with sales messages. They
want clear and detailed communication, personalized and which creates an
emotional link with practical and useful information.

They don’t want the internet as a paper substitute, but as a complement
(newsletters, invoices, etc). They want an internet that is both reactive and
proactive. To be able to consult web-sites that are rich in practical content and
which also send them interesting things without them having to ask for it. They
want a “measured” use of the telephone (it is generally a nuisance, unless you
are called by a “known agent”), a friendly internet with valuable information, and
personalization with care and support in moments of usage (”moments of truth”)
of the service.


• About rights and features: protection/security.

• Personalization of the contents

• Offering interesting advice

• Making references to values: quality of life, solidarity, sustainability, respect,
honesty, environment, social responsibility and social cohesion.

• Doing customer experience management surveys.

• Communication with stakeholders that are coherent with the predominant
social values.


• Customer experience manager

• Insured day events

• Insurance encyclopedia

• Show price comparison tables. Better that they use ours than an intermediary.

• Imitate the consumer (radical transparency)

• Explain what we do with the money.

• Show “they do what they preach and they preach what they do”

• In any event lots of internet!


“MEASURED” TELEPHONE Analyze the form and timing of
communications:

FRIENDLY INTERNET Signs of caring.
Too much and too tiring.

+++ CARE AND
PERSONALIZATION  Communicate about VALUE:
•Not sales (e.g.. Eroski Consumer)
•Not excessive.
•VERY Segmented.

 Combine paper and e-mail


Other ideas:
• Periodical information (prevention and other segmented issues) to
customers.
• Free seminars and workshops (prevention, etc) for customers.
• Insurance and service manuals for customer use.
• Occasional phone calls from managers just to ask “how are we doing?”

The sleeping dragon will wake up, whether it is our company that
wakes it or not..

Coherent with ethics, transparency and credibility


TRANSITION MK 1.0
CRM 1.0 TO 2.0
WEB 1.0

Mobile phone 1. SMS not sales people.
2. Service information, about an incident,
administration, etc.
Call me button 3.-Innovate on the Web and make publicity out of it

Video-conferences PERSONALIZATION
4.- Use video-conferences
MORE RELIABLE SERVICE = TRUSTWORTHY
INSURANCE

7. “The experiential”

...Feelings, emotions, thoughts, coherent with the best price, as the
economic crisis will bring on a tendency towards low cost in all
sectors and sub-sectors.

• Experiential marketing allows the customer to experience different feelings or
relive feelings that that they like or are pleasurable through products, goods
and services from a company or service. This is achieved generating
experiences through perceptions, feelings, thoughts, actions and relations.

• Walt Disney is a case of a quality, service and experience model.
Disney is a combination of experiences not just lots of movies and
theme parks.“Disney is the Entertainment”, and the brand is aware of
its influence in the world of children, in the “holístic” perception
(Magic Kingdom) which they have of it.

7. “Experiential”

Achieve differentiation
• Customer experience managers?

• Customer - assessor relationship? Much more comfortable
processes.
• Treatment when recording an incident.
Create a differential,
• When communicating with the repair shop (comarketing) positive experience,
• When using the “advantages”. worthy of being talked
• Online channels should be a big support. about to others.

• Interactive Communication = Greater and better relations.
Beyond comparison.

• Advantages and privileges (incremental benefits and
excellence considerations) IN THE REPAIR SHOP for certain
customers.

• Joint cobranding actions with repair shops to loyalize good
customers.

• Actions to improve daily life (e.g. Unión Fenosa, Banesto: el
antenista..)

The 4 pillars of emotional branding

Emotional
Branding

Sensory
Relation Vision Imagination
Experiences

What is Experiential Marketing?

Traditional marketing dealt with the RATIONAL
left hemisphere of the brain

EMK seeks the EMOTIONAL connection
right hemisphere of the brain

EXPERIENTIAL Marketing IS RELATIONAL
EXP.

CUSTOMER EXPERIENCE MANAGEMENT

WHAT ABOUT OPERATIONS?
QUALITY IS SISTEMS AND SMILES

Experiential marketing

Operations and
Branding experience =
satisfaction

EXPERIENCE IS EMOTIONS AND OPERATIONS

EXPERIENCE Circumstance or event lived through by a person
The fact of having felt, known or witnessed something by
somebody.

EMOTION Change of mood, intense and fleeting, pleasant, expectant
interest with which you take part in something
SENSATION senses

FEELINGS Affective mood produced by events that impress you.

lovemark
LIFE EXPERIENCE The fact of living or being alive
The fact of experiencing something and its content

EMK, synonymous concepts

EXPERIENTIAL MARKETING PROVOKE EXPERIENCES….

Sensorial Marketing ... of pleasure and sensorial
enjoyment

Life Experience Marketing … in events and happenings worthy of
being talked about

Emotional Marketing …to generate affection towards the
brand… feelings

Dynamic Marketing, Guerilla Marketing, … not to use conventional mass
Viral Marketing, and so on (BTL) marketing

We seek…

 Pleasure, enjoyment

 Simple, comfortable, easy to use and to do business

 Mythical

 Mystical

 Church Authentic, cool
 Legend

 Adventure

The experiential matrix

Experiential matrix
ProvExp
Brand
Comunica- Visual Product Spatial Websites and
EM co- Personal
tions Identity presence environment others
management

Sensations

Feelings

Thoughts

Relations

Performances

Source: Schmitt, 1999

8. Co-marketing

Comarketing: Customers want companies to cooperate to offer “real
advantages” from alliances.

A strategy generally used to unite efforts and achieve ”doing more with less".
These type of actions are also used to access validated databases, e.g. A bank, in
exchange for a customer benefit, paid for by the company that gains the benefit
of the database access. Co-marketing is a practice by which two different
companies cooperate to obtain a joint benefit or to look for synergies such as
reducing costs.

8. Co-marketing

• “Bannering” actions and “shop within a shop” Explore all the possibilities to be
present in…
• Garage workshops
• Commercial Centers (Automobiles)
• Car Salesrooms
… and similar locations.
Review innovations of mutual interest.

• Evaluate possible partners for joint prevention measures.

8. Co-marketing

Telepizza y Coca-Cola:

Have launched a joint promotion in which for
every liter of Coca-cola on a customers’ order,
Telepizza gives them a 1900 edition bottle
(Hutchinson type), like the original bottle from
the beginning of the 20th. century. The
promotion is supported by a campaign, by
Delvico, which appears on televisión, radio,
internet and has merchandising support at
points of sale.

9. Lead a “cause” which is socially beneficial?

Examples:

•The OBRA SOCIAL of The Canaries Savings Bank (corporate message:
“The Canaries Savings Bank, for the benefit of the people of the
Canaries”).

•Companies orient their social cause activities as a fundamental factor in
their raison d’être. The Canaries Savings Bank and the Adecco
Foundation have signed a collaborative agreement through which both
organizations will take a set of joint actions to promote the employment
and social integration of people with disabilities.

9. Lead a “cause” which is socially beneficial?

Example:

EGARSAT is a company that collaborates
with the Social Security to cover issues that
derive from industrial accidents and
professional illnesses, coverage of the
economic contribution for temporary
absence from work, and common
measures to prevent accidents.

10. The new segments
-Seniors

It is estimated that in 2060, this segment will account for 29.9%
of the population.

Seniors

Predominant segment.

Value of the senior: on average they can remain a customer for
25 years.

From the age of 55 they experience a change and feel the need
to plan for their old age.

Seniors

Characteristics:
• They feel good, they feel young.
• Active leisure.
• Healthy but afraid of illness.
• Buying power.
• Looking for best Quality-price ratio.
• High expectations when buying.
• Users of basic technology.
• Value the “face to face”

Multicultural Mk (cross-cultural)

• Since the year 2000 Spain has had one of the
highest rates of immigration in the world.

• Immigrants now represent 12.2% of the population.

• 2010 was the first year with a negative
immigration index.

• Second wave in 2015.


Rank Origin Population %age of all foreigners
1 Ibero-America 1,500,785 36.21%
2 Western Europe 872,694 21.06%
3 Eastern Europe 735,506 17.75%
4 North Africa 614,436 14.82%
5 Sub-Saharan Africa 170,843 4.12%
6 Far East 132,474 3.20%
7 Indian Sub-Continent 69,006 1.66%
8 North America 27,292 0.66%
9 Middle East 18,094 0.44%
10 Oceania 2,363 0.06%


• Average age 32.83 (in 2004).

• 30% unemployed.

• Occupation (2005)
Services (59%)
Construction (21%)
Industry (12%)
Agriculture (8%)

• The rate of remittances
abroad is growing.


Aspect:
• Culture defines buying behavior.
• Each element of a culture conditions the MK.

Company needs:
• Empathetic attitude towards other cultures.
• Be culturally neutral
• Don’t assume transferability from one culture to another.
• Involve people from other cultures in the decisions.
• Multicultural practices in 2.0 interactivity.


Opportunities according to needs

Get a
Stage 3 Mortgage 20%
(From 5th year onwards) Buy a car
Finance children's
education
Pension plans
Stage 2
(Up to 5th year) Send money (more)
Bring over family
Consolidate work Micro
consumer credit Rent or buy 80%
home
Stage 1 Work information & advice
( Up to 2nd year) Process and manage documentation
Send money

Generational Mk

Most interesting generation groups:

• Generation X
• Generation Y
• Einstein generation
• Millennium generation.

Generational Mk

Generation X (born between 1961 and 1979)

The 1st generation educated to university level and with
international experience.

Drivers of flexibility and conciliation.

Entrepreneurs. They value personal initiative and are skeptical
about big companies.

Generational Mk

MK characteristics of generation X:

• Culturally active.
• Worried about the environment.
• Value RSC companies.
• Less materialistic.
• Looking for experiences.
• Want quality of life.
• Not prepared to sacrifice happiness fro promotion.
• Have caught up with Baby Boomers as main consumer group.

Generational Mk

Generation Y (born between 1980 and 1994)

The 1st generation that always lived with information technology.

Comfortable and prosperous infancy.

More individualistic than previous generations.

Generational Mk

MK characteristics of generation Y:

Developing their preferences and purchasing patterns.
Their world: Internet, mobile phones and videogames.
Access to a great deal of information and communication.
Intelligent, lively and objective.
Ecological and defenders of good causes.
Brand aware.
Always connected.
Will spend more than the baby boomers.

Generational Mk

The Einstein generation (born after 1988)

• They cross over with generation Y.
• They seek authenticity and express their views clearly.
• They like to win respect through their own efforts.
• The most important thing is to be happy, enjoy life and develop
yourself as a person.
• Concept of honor as the end goal and success.

Generational Mk

The millennium or net generation (born at end of C20.)

• Born with a mouse and a computer screen.
• They are forming, but are aware of a loss of values.
• Hyper connected and globalized.
• Used to spending a lot of time alone.
• Educated, technically aware and multicultural.
• Strong influence on the decisions of their parents who feel guilty about
leaving them on their own.

Femenine Mk

Women represent 80% of consumption.

She is a more intelligent buyer and more aware of promotions, loyalty
plans and prizes than men.

Femenine Mk

•They are multi-role women - work-life and family life.
•Their interests are professional ones as well as being related to the
home and the children.
•They are looking for products that give them privileges, not as mothers,
but as women.
•They have decision-making power and independence in matters of
consumption.
•Much more analytical consumers than men.

11. New channels and marketing automation

There should be effort to embrace Marketing, sales and IT
Orientating the company towards innovation for the customer requires a realignment where
the customer defines the product and the processes. This cannot happen overnight but there
are 4 points to adopt to move in this direction

• There should be an increase in efforts to adopt quantitative techniques to study
Increase efforts with information and intensify efforts in developing the area of Business Intelligence
the Data Base • Many companies have already developed b.d.m projects so they can study an infinite
number of variables, sales preferences, loyalty indices or the working of promotions

Introduce customer • When the flow of information is standardized, there are improvements in sales and
metrics to analyze operations
profitability • When data from distributors is combined with customer data, it creates a greater
consensus in what are the profitability objectives and how to achieve them
• The sales / accounts team must play a vital role in the design and execution of point of
Involve the sales sale and distribution strategies
teams
• At the same time they must be involved in segmentation and promotion design

• The IT team must be involved and not isolated as they have to achieve a harmonization
Use IT to develop and global synchronization of the company data
quantitative projects
• The IT must work together with everybody to achieve these objectives

Integral framework for automation

Linked to the cheapening of technological applications thanks to changes in
company management, as well as new paradigms for the management of
customers:
Ensure customer profitability.
Exploit the growth potential of each customer
Improve the capacity to negotiate with each customer.
Increase the ability to adapt products and services to the customer.
Adopting the concept of customer share, supplanting the old analysis
model based on market share.

Integral framework for automation

Technology has enabled decision support systems as a result of a better
understanding of the environment, and especially, of each individual customer.

Automation of marketing, through the creation of:

•Information systems based on the processing of large quantities of information that can be
stored (hard and soft).
•Flexible and accessible databases.
•Information integration processes from multiple repositories.
•Support processes to clean up and enrich data (DB, normalization, etcetera).
•Maintenance systems and data structure descriptions.
•Methodologies for strategic business analysis.
•Systems of data capture that are easy to use.
•Statistical processes that are easy to use with a good deductive capacity.
•Processes to capture and maintain customer relationships.
•Integration of technology and Internet functionality in the new customer-company
environment.

Benefits of automation

The approached and tools of marketing automation allow the measurement and
tangible quantification of the impact that marketing actions have on company
financial performance, all of it in an automatic and reliable manner.
Others are:
•Facilitate the creation of multi-channel and multi-phase marketing and sales
campaigns..
•Improve the coordination of campaign implementation across the whole company
due to the database management systems accessed online.
•Strengthen marketing activity performance thanks to the number of reports,
analysis and statistics that the information systems generate.
•Reduce costs and increase ROI of marketing activities through having greater
knowledge available from customer databases.

Functionality of automation of
marketing
Campaign design:
Customer database constantly updated: - Objectives
- Transactions - Segments
- Contacts - Profiles
- History - Audience
- Etcetera - Channels
- Steps and phases
- Trials
- Etcetera
Real- measurement of campaign
results:

- Channel analysis
Customer database analysis: - Response reports
- Segmentation Campaign execution:
- Analytical measurement
- Profiles - Results
-- Lifetime value - Personalization
- ROI
-- Profitability - Multi-channel integration
- Reports
-- Answers- - Follow up
- Sales activities
- Responses
-Modeling - Call center
-- Etc. - Data Capture
- Etcetera
- Etcetera

Trends in the digital world

1. Blossoming of the Tablet PC.
• They open a world of new uses and give
fluidity to existing experiences.
• Big expansion.

2. Digital invades shops and restaurants.
• Tablets are a great sales aid to product
understanding.
• They fit into the physical sale.
• Invasion of digital signature.


3. Generalized eCommerce.
• Without fear
• Social use

4. Everything connected to the internet.
• Internet 3.0

3. Television connected.
• The end of traditional programming for
ever
• HYBRID: TELE-PC-TABLET-SMARTPHONE
AND ….


6. Need for “guides”.
• For Internet search.

7. Augmented reality.

6. Digitalization of personal documents, culture and media
• eInvoices
• e-book, electronic press.

7. Decrease in the influence of advertising.

Trends in the mobile phone world

In Spain there are some 60 million mobiles (110% penetration).
In 2011 50% will have access to Internet via mobile.


According to the study “Mobile applications: downloads and use” done
by The Cocktail Analysis, 82% of the telephones in Spain connected to
the Internet are smart-phones (the rest are 3G).

59% connect to the Internet daily via mobile.

Most frequent uses:
• 50% consult e-mail daily
• 36% daily on social networks (67% minimum of once a week)
• On-line purchasing is the least used.

Customer contact

Multi-channel
•In some countries, they are expanding these
contacts at times of insurance contract renewal
•There is an opportunity for distributors with points
of sale that bring the customer closer with Internet
installed so the customer can consult
•It is necessary to orient the business towards
“customer experience” creating a relationship with
products that cover the whole life cycle and adapts
to them

• The most important thing in the customer interaction is to know how to transmit the
“value offered” so that distributors and insurers need to know how to win the customer
in the moment of truth
• This is not always going to be done in the same way, given that the same contact with
two different customers can receive different evaluations. If done properly these
contacts can cement a profitable relationship

7 / Marketing
Obsession with
metrics

Why is there pressure on the marketing
function?

The large number of activities that seem to be a waste.

The costs of marketing are very high and going up.

A lack of accountability on the part of marketing to justify the productivity of
their spend.

Marketing functions are not generating big or important ideas to develop the
company.

Marketing functions are too focused on the short-term.

Marketing functions are not worried enough about their true assets: brand,
consumers and customers, service quality, intellectual capital, reputation and
company image.

New criteria

The money dedicated to marketing
activities = investment.

The “king” criteria to evaluate an investment is ROI (return on investment).
From hence comes the concept of marketing accountability, which has two
sources:

 Accountability as the responsibility that the marketing manager has for
the end result of his activities.
 Accountability, in the sense that these activities must have a clear
financial justification.

Key metrics for marketing accountability

Metric Calculation Purpose
1 Unit margin Unit price minus unit cost. Determine the value of incremental sales.
Act as a guide to fix prices and the decisions on
promotional activities.

2 Margin (%) Unit margin as a %age of Compare the margins between different products, sizes,
unit price. presentations.
Determine the value of incremental sales.
Act as a guide to fix prices and the decisions on
promotional activities.

3 Channel margin Channel profits as a %age ofEvaluate the added value of the channels in relation to
channel end price. sale price.
Calculate the effect that price changes have on each level
or stage of the channel in final prices and the
corresponding margins of each or other levels in the same
channel or supply chain.
4 Average unit price Total income by total unit Understand how the average price is affected by price
sales. changes o the product mix.


5 Variable and fixed Classify costs in two categories: those that Understand how costs are affected by sales
costs change with volume (variable) and those volumes.
that don’t (fixed).

6 Marketing costs Relate those costs that are “marketing Understand how marketing costs vary
over sales spend” against sales volumes. according to sales.

7 Unit contribution Unit price minus variable unit costs. Determine the impact on profits of price
changes.
Calculate the sales break-even point.
8 Contribution Unit contribution divided by unit price. Determine the impact on profits of changes
margin(%) in volumes sold.
Calculate the sales break-even point.
9 Sales break-even Break-even per unit, divide the fixed costs Indicate approximately the “attraction” and
point. by the unit contribution. capacity to generate profits from a project or
Break-even in income levels, divide the activity.
fixed costs by the contribution margin.


10 Expected profit Adjust break-even calculation to Assure that the unit sales targets
include profit objective. enable the company to reach the
expected rate of return in terms
of returns on sales, (ROS), ROI or
other financial measure.
11 Income objective Convert the expected profit in Assure that the income objectives
terms of income using unit prices. enable the company to reach the
Alternatively, combine the cost rate of return expected in terms
data and objectives with the of returns on sales, (ROS), ROI or
information about contribution other financial measure.
margins.
12 Net profit Sales income minus total costs. The basic profit equation of a
company.
13 (ROS, return on sales) Net profit as a %age of sales Calculate the percentage of
income. income that converts to profits.
14 (ROI, return on Net profit in relation to the A measure that calculates how
investment) investment necessary to generate well a company is using its assets.
those profits.


15 Profit after tax Operational net profit after Show profit levels in terms of money (euros).
tax less capital costs. Offers a more net differentiation between the
levels of return than simple percentages.
16 Time to recoup Time to recoup the initial A simple way to calculate the return.
(payback) investment.
17 (NPV, net present The value of future income Summary of the value of cash flows at different
value) cash flow after deducting the periods of time.
value of money over time.
18 (IRR, internal rate of The discount rate with which
Usually the Internal Rate of Return (IRR) is
return) the net present value of an
compared with the expected rate of return; if
investment is zero. the IRR is greater the investment goes ahead; if
less it does not.
19 Return on marketing Incremental income Compare sales generated in terms of income
investment (ROMI) attributed to marketing over with the costs of marketing to generate these
marketing investment. sales.
The percentage obtained helps to compare
between different plans or projects of different
scope.

8 / A new way of
being - manage
and think
marketing

Qualities required of a marketing manager:
general requirement

The manager must think, firstly, in terms of the
organization as a whole, and only then about his area of
responsibility.

The global and integral vision of a company is increasingly
more important and in reality it is not about how to improve
”how I do my work", but to improve ”how the whole company
does its work”.

Qualities and abilities required of managers
in a 21st. century environment
1 Ability to learn.
2 Ability to plan.
3 Conceptual abilities.
4 Short, medium and long-term results oriented
5 Leadership and team management.
6 Self control
7 Coherence.
8 Ability to communicate and motivate.
9 Ability to make decisions under pressure.
10 Creativity.
11 Flexibility.
12 Cultural sensitivity.
13 Very capable of compiling and analyzing an increasing flow of information.
14 Very capable of objective diagnosis of environmental situations.
15 Efficiency.

Service marketing trends 2011

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