Customer Interaction Model of the Future How to Get Personal Across Multi-Channel Touchpoints Michael R. Hoffman Customer Experience Expert & Partner

Presentation Goals Make you more successful as measured by: Get you a pay raise Make you the envy of your peers Get you home on time Peaceful night’s sleep Unprecedented prestige and power Make your life easier And “Yes” Customers will love you!

Make you more successful as measured by:

Get you a pay raise

Make you the envy of your peers

Get you home on time

Peaceful night’s sleep

Unprecedented prestige and power

Make your life easier

And “Yes” Customers will love you!

Get Personal Agenda Why are we here again? It’s a customer world – we just live in it We all work for companies – now deal with it Begin with the end in mind – if you had all the time and money… Get personal across multi-channel touch points using a Customer Experience Framework

Why are we here again?

It’s a customer world – we just live in it

We all work for companies – now deal with it

Begin with the end in mind – if you had all the time and money…

Get personal across multi-channel touch points using a Customer Experience Framework

The purpose of a company is “to create a customer… The only profit center is the customer… Therefore the business has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.” - Drucker Company’s Purpose?

The purpose of a company is “to create a customer…

The only profit center is the customer… Therefore the business has two—and only two—basic functions: marketing and innovation.

Marketing and innovation produce results: all the rest are costs.”

- Drucker

We Do What for a Living? “ Each day, marketers expose Americans to some 12 billion display ads, 3 million radio ads, and more than 300,000 television commercials.” The average U.S. consumer receives roughly 1 million marketing messages a year across all media, or about 3,000 messages per day… From Net Worth , John Hagel III, Marc Singer

“ Each day, marketers expose Americans to some 12 billion display ads, 3 million radio ads, and more than 300,000 television commercials.”

The average U.S. consumer receives roughly 1 million marketing messages a year across all media, or about 3,000 messages per day…

From Net Worth , John Hagel III, Marc Singer

Consumers & the “Instant Gratification Button”

“ Today, the average American is exposed to 1,500 ads every day, ranging from traditional sources such as billboards, radio spots and newspaper classifieds to Web banners and pop-ups.” - YOUR AD HERE Sunday, April 09, 2006 Denise Trowbridge THE COLUMBUS DISPATCH

We Create Messages to Sell Something to Prospects and Customers Radio Internet Ads FSPs Direct Mail FSIs In-Store TV Network TV Newspapers DVD Trailers High Impact Product Placements Retailtainment Outdoor Signage Coupons Movie Theater Ads Customer Service Content Implants In-Store Sampling Mega-Event Sponsorship Cable TV Print Permission- Based E-mails 21 and just starting…

In the Old Days, This Seemed Easier? How Long is Your Cycle Time? Plan Marketing Goals and Budgets Execute Marketing Tactics Analyze and Measure Performance Collaborate across Groups Capture and Deploy Best Practices

The Need to Automate – Productivity, Relevance, Synchronicity Old Time Current Time What’s Next? Broadcast TV 6-9 Months 1 – 12 weeks YouTube, Cam2Web Direct Mail 3-5 Months 1-2 weeks Direct to Print Sales/Field Training 3-6 months 1-3 months SFA/CRM Tools Newspaper Print 2-4 weeks 1-2 weeks Digital Press Magazine 3-6 months 2-3 months Digital/V Press Brochure 1-4 months 1-3 weeks Direct to Print Signage 1-4 months 1-8 weeks Digital Signs, Web connected Website 1-4 weeks Day parts Multi-party, Dynamic content Email Weekly Daily Triggers, dynamic content

DM Variables with Traditional % Performance Contribution List 50%+ Targeting & Segmentation Offer 20% What’s the deal? Creative 10% Copy & Art Media 20% Sequence & Frequency How many departments’ resources support advertising and marketing processes?

List 50%+

Targeting & Segmentation

Offer 20%

What’s the deal?

Creative 10%

Copy & Art

Media 20%

Sequence & Frequency

How Many Departments Go through This Same Process to Communicate with Customers? How Long is each Cycle Time? Plan Marketing Goals and Budgets Execute Marketing Tactics Analyze and Measure Performance Collaborate across Groups Capture and Deploy Best Practices

Marketing is a Whole New Game Message obsolescence Highly complex offers: Promises Delivery Payments Service Membership Buyer sophistication: How many people have sold on ebay? Transparency – SARBOX, blogs, review sites, documentation, partners web sites, wholesalers, specialty manufacturers and assemblers Legal Globalization - Buy and sell anywhere

Message obsolescence

Highly complex offers:

Promises

Delivery

Payments

Service

Membership

Buyer sophistication: How many people have sold on ebay?

Transparency – SARBOX, blogs, review sites, documentation, partners web sites, wholesalers, specialty manufacturers and assemblers

Legal

Globalization - Buy and sell anywhere

Through segmentation and permission practices we match product and service attributes to customer needs, wants and interests . Radio Internet Ads FSPs Direct Mail FSIs In-Store TV Network TV Newspapers DVD Trailers High Impact Product Placements Retailtainment Outdoor Signage Coupons Movie Theater Ads Customer Service Content Implants In-Store Sampling Mega-Event Sponsorship Cable TV Print Permission- Based E-mails 21 and just starting…

In addition to feeling constantly time-pressured, consumers are reeling from information overload, causing most to “blank-out” on all but the most personal or relevant messages: 1960 – Mass Media Matures 2004 – Mass Media, RIP TV channels per home: 5.7 Magazine titles: 8,400 Radio stations: 4,400 TV channels per home: 82.4 Internet broadcast stations: 25,000+ Radio stations: 13,500 Magazine titles: 17,300 4.4 billion pages indexed by Google Media Proliferation 2004 vs. 1960 % of Email Identified as Spam June, 2003 July, 2004 49% 65% Source: Brightmail.com Aug. 2004

Media Multi-Tasking Source: October 2003 BIGresearch SIMM survey Even when consumers do focus on media, more than 70% use different types of media simultaneously Television While watching: Radio While listening: Newspapers While reading: Online While connected: 74% Read the newspaper 57% Go online 52% Watch TV 62% Watch TV 66% Go online 47% Read the newspaper 50% Listen to the radio 52% Listen to the radio 18% Watch TV 20% Read the newspaper

Not One Voice – One Set of Ears, Eyes or Experiences Radio Internet Ads FSPs Direct Mail FSIs In-Store TV Network TV Newspapers DVD Trailers High Impact Product Placements Retailtainment Outdoor Signage Coupons Movie Theater Ads Customer Service Content Implants In-Store Sampling Mega-Event Sponsorship Cable TV Print Permission- Based E-mails … Start here

The Customer is the final arbiter of business success. But how are you supposed to manage all these moving pieces, synchronize your tactics and respond to changing market and individual customer conditions all at the same time?

Customer Experience Framework for Marketing Automation Customer Perspective: Role of Channels & Media: When I want “X” (product) I go to “Y” (channel) with “Z” expectations. The result of my interaction = my experience. Experience is multiple paths and path combinations based on customers needs, tastes, preferences and values (segmentation) Company campaigns and tactics at each interaction influence customer behavior (good or bad = binary) Time series of activities and activity combinations used to predict outcomes and prompt tactics (very good for modeling).

Customer Perspective:

Role of Channels & Media:

When I want “X” (product) I go to “Y” (channel) with “Z” expectations. The result of my interaction = my experience.

Experience is multiple paths and path combinations based on customers needs, tastes, preferences and values (segmentation)

Company campaigns and tactics at each interaction influence customer behavior (good or bad = binary)

Time series of activities and activity combinations used to predict outcomes and prompt tactics (very good for modeling).

Map Programs to Lifecycle by Segment/Channel

Marketing Architecture Needs an Overhaul Drivers: Privacy & intimacy Partner issues Time poor – customers, company, partners, regulators, influencers Legal issues data sharing fraud traceability Customers more sophisticated – You must differentiate experience to earn premium margin Technology is available to handle customer experience management (You are here!)

Drivers:

Privacy & intimacy

Partner issues

Time poor – customers, company, partners, regulators, influencers

Legal issues

data sharing

fraud

traceability

Customers more sophisticated – You must differentiate experience to earn premium margin

Technology is available to handle customer experience management (You are here!)

Welcome to Marketing 2010

Automation: [aw-tuh-mey-shuh n] the technique, method, or system of operating or controlling a process by highly automatic means, as by electronic devices, reducing human intervention to a minimum a mechanical device, operated electronically, that functions automatically, without continuous input from an operator. act or process of automating the state of being automated

the technique, method, or system of operating or controlling a process by highly automatic means, as by electronic devices, reducing human intervention to a minimum

a mechanical device, operated electronically, that functions automatically, without continuous input from an operator.

act or process of automating

the state of being automated

Automation Benefits Not ”do more with less” but “must do more to stay relevant” Transparency Promotes company, partner, customer, vendor collaboration Visualization for company-wide customer understanding Legal and financial Design Fitness Improves speed to market Reduces specialty knowledge dependence Integrates all contributors Elegant design required Prepares platform for continuous improvement Focus resources on areas for highest return Flexible resource deployment across all channels Imbeds key functions: Design, company, legal, production, execution, measurement rules What’s Left?

Not ”do more with less” but “must do more to stay relevant”

Transparency

Promotes company, partner, customer, vendor collaboration

Visualization for company-wide customer understanding

Legal and financial

Design Fitness

Improves speed to market

Reduces specialty knowledge dependence

Integrates all contributors Elegant design required

Prepares platform for continuous improvement

Focus resources on areas for highest return

Flexible resource deployment across all channels

Imbeds key functions: Design, company, legal, production, execution, measurement rules

What’s Left?

10 Step Automation Program Step 1: Decompile the customer experience by lifecycle Step 2: Categorize marketing campaigns by life cycle Step 3: Link channels to customer lifecycle Step 4: Apply campaigns to channels & lifecycle – test for fitness Step 5: Expose creative & offer combinations Step 6. Add dashboards to reporting Step 7. Measure performance by customer Step 8. Continuous and automatic testing Step 9. Bolt-down low maintenance/moderate value programs Step 10.Set value based performance alerts

Step 1: Decompile the customer experience by lifecycle

Step 2: Categorize marketing campaigns by life cycle

Step 3: Link channels to customer lifecycle

Step 4: Apply campaigns to channels & lifecycle – test for fitness

Step 5: Expose creative & offer combinations

Step 6. Add dashboards to reporting

Step 7. Measure performance by customer

Step 8. Continuous and automatic testing

Step 9. Bolt-down low maintenance/moderate value programs

Step 10.Set value based performance alerts

Quick Campaign Attributes Review List 50%+ List source, segmentation, predicted & historic values, performance metrics… Offer 20% price, terms, delivery, premium, time limit… Creative 10% copy, graphics, theme, interests… Media 20% Sequence, channels, frequency… How many departments’ resources support advertising and marketing processes?

List 50%+

List source, segmentation, predicted & historic values, performance metrics…

Offer 20%

price, terms, delivery, premium, time limit…

Creative 10%

copy, graphics, theme, interests…

Media 20%

Sequence, channels, frequency…

Step 1: Decompile the Customer Experience by Lifecycle

Step 2: Categorize Marketing Campaigns by Lifecycle Special Offer Sweepstakes BOGO XXX XXX Special Offer Sweepstakes BOGO XXX XXX Special Offer Sweepstakes BOGO XXX XXX Special Offer Sweepstakes BOGO XXX XXX Special Offer Sweepstakes BOGO XXX XXX Offers by Lifecycle Objective Corporate Standard Templates: embed strategy & objectives

Campaign Components List = Lifecycle (further refined by sub segments) Offer: Automated uses tactic templates in program library for core programs and sub-programs (i.e. non-response, inquiry follow-up, multi-channel orchestration); automate what works Creative – Remains Variable, set dynamically combining “offer set” + “channel” + “list” Media - Next slide

List = Lifecycle (further refined by sub segments)

Offer: Automated uses tactic templates in program library for core programs and sub-programs (i.e. non-response, inquiry follow-up, multi-channel orchestration); automate what works

Creative – Remains Variable, set dynamically combining “offer set” + “channel” + “list”

Media - Next slide

Step 3: Link Channels to Customer Lifecycle Email outbound Email inbound Household Mail Phone - Outbound Phone - Inbound

Customer Perspective: “ When I want “X” I go to “Y” channel and have “Z” expectations Direct – (sample adapted to business) Personal Email – inbound, outbound Business email – inbound, outbound Household email – inbound, outbound Mail box Special Courier Front door - Account representative, special courier, service call Home Phone – inbound, outbound Cell Phone – inbound, outbound In Statement Packaging Digital (anonymous) Search Web site each section: Banner Ad Search Multi-media phone Kiosk

Direct – (sample adapted to business)

Personal Email – inbound, outbound

Business email – inbound, outbound

Household email – inbound, outbound

Mail box

Special Courier

Front door - Account representative, special courier, service call

Home Phone – inbound, outbound

Cell Phone – inbound, outbound

In Statement

Packaging

Digital (anonymous)

Search

Web site each section:

Banner Ad

Search

Multi-media phone

Kiosk

Sample Additional Channel Categories Location In store Kiosk - atm Geography Television Radio Television Billboards Events Third party Partner Magazines Resellers Experts Reviewers Community Word of mouth Clubs Organizations Social networks PR Outreach Charities

Location

In store

Kiosk - atm

Geography

Television

Radio

Television

Billboards

Events

Third party

Partner

Magazines

Resellers

Experts

Reviewers

Community

Word of mouth

Clubs

Organizations

Social networks

PR

Outreach

Charities

Step 4: Apply Campaigns to Channels & Lifecycle – Test for Fitness Email outbound Email inbound Household Mail Phone - Outbound Phone - Inbound Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX Special Offer Sweepstakes BOGO XXXXX

Step 5: Expose Creative and Offer Combinations - Interface and Design will Relieve Marketers of Complex Logic and Stress Continuous Improvement

Step 6: Add Dashboards to Reporting for Everyone’s Use

Good Metrics – But How do they Relate? # of impressions Time on page # of promotion imp. # of unique visitors # of registrants # of registrants Registration breakage # Information given Response rate Opt out rate Breakage Time in program Defection rate LTV RFM Defection rate Customer balance sheet Awareness Registration Interaction Purchase Measures Customer life cycle

Not One Voice – One Set of Ears, Eyes = One Set of Experience(s) Direct Location 3 rd Party Community

Step 7: Measure Performance by Customer Direct Location 3 rd Party Community Change/Month Cost per Cust. Revenue/Cust. 15% Growth $1.5/Cust +3% $ Rev $16/Cust $130 R/Cust +11% $ Rev $61/Cust $715 R/Cust +6% $ Rev $23/Cust $1630 R/Cust +14% $ Rev $31/Cust $1119 R/Cust

Rate Your Competition/Set Performance Goals Us = Blue Competitor = Red Direct B A A C A D A C C D Location A C A C B A B A B A 3 rd Party C C F B C C C C C C Community A D A D F B F B F B

Step 8: Continuous and Automatic Testing Campaign Offer B Offer A Default Continuous Results Feed Control If B > A Then B = A Then New A

Step 9. Bolt-down low maintenance/moderate value programs Email outbound Email inbound Household Mail Phone - Outbound Phone - Inbound

Step 10. Set value based performance alerts Set performance thresholds Low performance – triggers alert to highlight program, campaign and down stream impact for re-allocation of resources High performance triggers alert to increase investment, adjust down stream resources and expectations Design aligns objectives, resources, systems, channels to direct alerts to responsible authorities.

Set performance thresholds

Low performance – triggers alert to highlight program, campaign and down stream impact for re-allocation of resources

High performance triggers alert to increase investment, adjust down stream resources and expectations

Design aligns objectives, resources, systems, channels to direct alerts to responsible authorities.

Technology is the Enabler - Not The Solution CEM Customer Experience Management Starts with PEOPLE TECHNOLOGY COMMUNICATION PROCESS KNOWLEDGE PEOPLE Prospect Acquire Convert Grow Retain Re-Activate

Pay Attention to Technology Developments Business Process Management Concept (BPM): Every function can be reduced to a series of components and assembled as a process. (Great concept – Integration still the issue) Service Oriented Architecture: Fluent operations across systems based on interoperability standards Digital Asset Management (DAM): Every interaction should be treated as asset; catalogued & monetized (think what would Google do?) Software as a Service (SaaS): Services/Functions by the glass or from libraries) User Created Media – what are your guide lines? Should you host, threaten, observe, buy? Voice Customer Experience Simulation

Business Process Management Concept (BPM): Every function can be reduced to a series of components and assembled as a process. (Great concept – Integration still the issue)

Service Oriented Architecture: Fluent operations across systems based on interoperability standards

Digital Asset Management (DAM): Every interaction should be treated as asset; catalogued & monetized (think what would Google do?)

Software as a Service (SaaS): Services/Functions by the glass or from libraries)

User Created Media – what are your guide lines? Should you host, threaten, observe, buy?

Voice

Customer Experience Simulation

Summary Automate what works Visualize Customer Experience for “customer perspective” Categorize interactions for unified management Manage tactics as programs Put standard programs on auto pilot and test key variables at tactics level Spend your time Innovating Promote customer process transparency so everyone in company “get’s it” Use simple Matrix to brainstorm Drop competitors and new markets on Matrix and see what happens Create excellently choreographed customer experiences that grow margins and markets Customers will love your company (each segment for their own reasons)

Automate what works

Visualize Customer Experience for “customer perspective”

Categorize interactions for unified management

Manage tactics as programs

Put standard programs on auto pilot and test key variables at tactics level

Spend your time Innovating

Promote customer process transparency so everyone in company “get’s it”

Use simple Matrix to brainstorm

Drop competitors and new markets on Matrix and see what happens

Create excellently choreographed customer experiences that grow margins and markets

Customers will love your company (each segment for their own reasons)

Please contact Michael Hoffman for additional information: Michael Hoffman, 908.350.3012 [email_address]

Please contact Michael Hoffman for additional information:

Michael Hoffman, 908.350.3012

[email_address]