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Damiani Group & the New Customer Centric Strategy - Francesco Giovagnoni

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Founded in 1924, the Damiani brand excelled in Italian and International markets, becoming an ambassador of Italian style and a synonym of excellence and the best Italian jewelry tradition. The innovative marketing and communications strategy and the proven experience of the management team are two key elements that contribute to Damiani’s leadership position in the jewelry market sector. With a new customer centric strategy, Damiani is now able to better track different customer needs and tastes and is working to anticipate trends without excluding any channels and making the best consistency between traditional and new media experience.

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Damiani Group & the New Customer Centric Strategy - Francesco Giovagnoni

  1. 1. DAMIANI GROUP & THE NEW CUSTOMER CENTRIC STRATEGY CRM & CUSTOMER ANALYTICS PROJECT Social Business Forum - Milan, 7th July 2015 Francesco Giovagnoni World-wide Marketing Communications and PR Director - Damiani International S.A
  2. 2. DIGITAL ADOPTION 3
  3. 3. AGENDA Luxury Industry Company Overview Damiani Customer Centric Strategy Damiani CRM & Analytics Project Social Listening, Predictive & Machine Learning: the last wave
  4. 4. AGENDA Luxury Industry Company Overview Damiani Customer Centric Strategy Damiani CRM & Analytics Project Social Listening, Predictive & Machine Learning: the last wave
  5. 5. INTRO - LUXURY NEW CONCEPT OF LUXURY 6
  6. 6. HERITAGE – TREASURING – MADE TO MEASURE NEW CONCEPT OF LUXURY Patek Philippe Adv Gucci Institutional Campaign Damiani Adv 7
  7. 7. All the top brands produced in Italy because in this country there is a strong know-how preserved thanks to tradition that has been passed down during the years. MADE IN ITALY NEW CONCEPT OF LUXURY 8
  8. 8. DEMOGRAPHICS AND DIGITAL ADOPTION The key macro-trend impacting luxury market in coming years is generational shift Altagamma - Bain Luxury Study 12th edition – October 2013 Baby Boomers 55+ Retired/Retiring mainly men Generation X 35-55 At the top of the carrer Man and Women Generation Y 20-35 First earning money/ 2nd genration Only Children Generation Z 0-20 Spending dadìs money Spoiled kids Exclusivity & Status Sense of Belonging Uniqueness Scarcity 24/7 availability (at click) Detached Selling Ceremony Tailored Entertainment Personal Relationship Customer relationship 360° Experience Bricks & Mortar Multichannel Omnichannel 9
  9. 9. DEMOGRAPHICS AND DIGITAL ADOPTION 10
  10. 10. Office PC Breakfast Tablet Transfer Mobile Office PC Meeting Tablet Sleep Tablet After Dinner TV/Tablet Lunch Mobile CONTINUAL DIGITAL USAGE 11
  11. 11. Sales/EUR ml Cost Structure Base 100 - Sales SG&A Operating Margin Brand A 979 100 Brand B 2841 100 Brand C 7671 100 36 47 17 31 38 31 36 17 47 Luxury Goods are a fixed cost business and Scale directly influences the revenues Source: EXANE BNP Paribas SCALE IS KING 12
  12. 12. AGENDA Luxury Industry Company Overview Damiani Customer Centric Strategy Damiani CRM & Analytics Project Social Listening, Predictive & Machine Learning: the last wave 13
  13. 13. DAMIANI GROUP COMPANY Damiani is a historic player in the Italian market in the production and sale of jewelry and high-end watches. Founded in 1924, the Maison Damiani stood out on the Italian market and internationally as an ambassador of Made in Italy and as a synonym of the best traditional Italian jewelry. Creativity, excellence, tradition and roots in the gold district of Valenza are the key elements that drive for almost a century, the company - now led by the third generation of the family - together with a deep passion for art that has been handed down from father to son. A worldwide multibrand company in the Luxury arena. One of the few brands of Made in Italy that is not a member of any group 14
  14. 14. THE WORLD OF JEWELRY TOP Jewelers at Net Sales Retail Equivalent: Damiani is the 6th REASEARCH SOLE 24ORE – EXANE BNP PARIBAS 15
  15. 15. AGENDA Luxury Industry Company Overview Damiani Customer Centric Strategy Damiani CRM & Analytics Project Social Listening, Predictive & Machine Learning: the last wave 16
  16. 16. A NEW MARKETING APPROACH RELATIONAL MARKETING ATL vs BTL 17
  17. 17. CRM & CUSTOMER EXPERIENCE @ 360° CRM CUSTOMER EXPERIENCE from INSIDE-OUT to OUTSIDE-IN 18
  18. 18. CHALLENGE vs OPPORTUNITIES Change Management Leap Frogging 70% fo the projects fails because of: 1. No support from the top line 2. Ineffective change management (cultural restrains win) 19
  19. 19. DIGITAL STRATEGY: STEP BY STEP Phase 1 Phase 2 Phase 3 Phase 4 • Ph.1.a New Internet Site – Adaptive & Google Friendly • Ph.1.b Data Collection & Enrichment • Ph.1.c Social networks Activities: Facebook Sub-Phases Sep.11 Sep.12 • Social Media Development • New Internet Site Revision (Responsive) Oct.13 May.14 • CRM Project Definition • CRM Sw & Partner Selection (Dynamics CRM & NTTsight) • CRM Project Implementation (Unified Customer Management, Advanced Marketing, Customer Analytics) Sep.14 • Customer Service • Sentiment Analysis and Social Engagement • Clusterization and “Relational Contact plan” – on+off 20
  20. 20. AGENDA Luxury Industry Company Overview Damiani Customer Centric Strategy Damiani CRM & Analytics Project Social Listening, Predictive & Machine Learning: the last wave 21
  21. 21. BRAND + Chain MARKETS DAMIANI BLISS ROCCA EuropeDOS Wholesale Partnership Franchisee Japan Americas Far East CONTACT CHANNELS Stores Web + e-comm CS: Call Center Portal TP 360° VISION OF CUSTOMER SALES CHANNELS SALVINI NEW SPECIFIC REQUIREMENTS 22
  22. 22. CUSTOMER ANALYSIS: SEGMENTATION FOR OBJECTIVS ACQUISITION DEVELOPMENT RETENTION HIGHT POTENTIAL POTENTIAL HIGHT POTENTIAL POTENTIAL TOP ELITE PREMIUM New Clients Active Clients DORMANT At Risk TOT. PURCHASERS EXPENDITURE 23
  23. 23. CRM HELP US: to win new customers or competitors’ customers to create a global database of customers’ data to keep actual customers D) cross-selling and up-selling JOIN BETWEEN TRADITIONAL AND NEW MEDIA WITHOUT FORGETTING THE JOINING BETWEEN TRADITIONAL AND NEW MEDIA 24
  24. 24. MICROSOFT DYNAMICS PROJECT in DAMIANI ON www.damiani.com store.damiani.com - Tracking navigation of customers on the web site - Connection between web surfing and customer personal data (if present) - Exposure information clients cluster OFF Retail - Customer Master Data - Product catalogue - Stores and Salesforce - Ticket ON Clickdimensions Email Marketing - Customized emails and sms delivery - Surveys and landing pages creation - Feedback on email delivery (openings and clicks) - Deliveries and bouncing receipt ON Social Networks - Unique interface - Contemporary Post on all Socials Networks - URLs reduction - Tracking of messages received on socials channels such as Facebook, Twitter, LinkedIn - Conversion into customers - Integration with customer care - Search by ‘sentiment’ - Link between social profile and CRM Master Data 25
  25. 25. MICROSOFT DYNAMICS CRM & ANALYTICS TOOLS Phase 1 Phase 2 Phase 3 Phase 4 • Dynamics CRM Implementation Output Oct.13 Mar.14 • Microsoft Social Listening/Social Engagement Activation listen to customers and influencers conversation online May.14 • CRM Analytics Tool (customer intelligence) Analysis & Database Clustering Sep.14 • Customer Service Tool repair management & client service Phase 5 Jan.15 Mar.15 • Predictive & Machine Learning for Clustering, Churn & Recommendation first experiments for advanced RFM Clustering and churn analysis in first half of 2015 26
  26. 26. CUSTOMER ANALYTICS INSIGHT 27
  27. 27. Activities: • Database clustering (i.e. by purchase, boutique, line, product…) • Marketing lists (i.e. by purchase, boutique, line, product…) • Email marketing campaigns targeted to specific contacts (i.e. different products to contacts with particular attitude to purchase) DEM D.Icon to prospects and customers <2K€ DEM Battito d’ali to customers >2K€ DATABASE CLUSTERING AND DEM 28
  28. 28. Purchasing behavior RFM Clusterization Touch point preferenceInterests • i. e. @ Xmas: • Earlybirds • Lastminute Upselling/Cross Selling • Avg Ticket • potentiality • Social Listening • Tracking on web site • E-comm journey • DEM results Macrotrend, Social Listening Life-time value Customer engagement analysis • Preferred touch points • Customer engagement analysis MANAGEMENT OF CUSTOMER RELATION PLAN 29
  29. 29. AGENDA Luxury Industry Company Overview Damiani Customer Centric Strategy Damiani CRM & Analytics Project Social Listening, Predictive & Machine Learning: the last wave 30
  30. 30. MICROSOFT DYNAMICS CRM: SOCIAL ENGAGEMENT 31
  31. 31. CRM & TECHNOLOGY TECHNOLOGY meets Storage-Compute-Analytics: • Accessibility and Mobility • Cloud infrastructure • Advancedmanagement and analytics tools 32 Descriptive Analytics Diagnostic Analytics Predictive Analytics Prescriptive Analytics What happened? Why did it happen? What will happen? How can we make it happen? Traditional BI Advanced Analytics
  32. 32. PREDICTIVE ANALYTICS: MACHINES LEARNING Machine Learning is a scientific discipline that studies and designs algorithms capable of learning from data, looking for associations and relationships betweenvariables. With these algorithms it is possible to perform predictive analysis based on historical data in order to support organizationsto achieveknowledgeandabilityto react. Sales forecasting Demand forecasting Sales lead scoring Marketing mix optimization Sales and marketing 33
  33. 33. STATISTICAL CLUSTERING METHOD: K-MEANS Set the number of desired groups, the algorithm according to certain variables will groupcustomerssimilarto eachotherin clusters. 1 2 3 4 K-MeansSteps: 34
  34. 34. RFM ANALYSIS RFM variables are created for each customer in order to identify a specific purchasing behavior through the k-mean clustering method. RFM variables are then discretized into valuesfrom 1 to 5. • Recency:how recent is the last purchase? [Months]R • Frequency:how frequently does he buy?[Units]F • Monetary:how muchdoes hespend? [Euro]M ManyothervariablesfromCRM can be usedfor clusteranalysisinsteadof RFM, for example: - SocialActivity Data - Web NavigationData 35
  35. 35. DATA PREPARATION Beforewe startto analyzedata,we haveto processthem with some steps: • Customers with missing values in their recordshave been removed Missing values • Geographic area values have been cleaned and grouped into macro areas Transformation • The Agevariable has beenclassified into rangeof values Discretization • Customers with purchasesolder than 5 years have been removed Data selection Thedatasetusedin this analysisis referredto the beginningof the currentyear. 36
  36. 36. CLUSTER RESULT Clusters defined by the algorithm need to be interpreted. In this case we compare the average RFM values of every single cluster with the average RFM values of overall clusters. RFM Clusters Legend: ↑ Over the overall mean ↓ Under the overall mean Overall Means: • R = 34 [Months] • F = 1,6 [Units] • M = 4.530 [Euro] Best • ↓R • ↑F • ↑M • # Cust. Churn • ↑R • ↑F • ↑M • # Cust First time • ↓R • ↓F • ↓M • # Cust. Spender • ↑R • ↓F • ↑M • # Cust New spender • ↓R • ↓F • ↑M • # Cust Uncertain • ↑R • ↓F • ↓M • # Cust 21 4 13 k 49 2,5 8,4 k 21 1,1 1,4 k 48 1,1 3,4 k 21 1,3 6,9 k 46 1 0,8 k 1,1 k 2,2 k 23,8 k 11,5 k 5,3 k 17,4 k 37
  37. 37. CLUSTER ANALYTICS Segmentationof customerscan be usedto exploretheirfeaturesand create marketingstrategies. - 5,000 10,000 15,000 20,000 25,000 Best Churn FirstTime NewSpender Spender Uncertain Avg Monetary by Cluster and Gender F M - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Best Churn FirstTime NewSpender Spender Uncertain Products by Cluster N of rings N of necklaces N of earrings N of bracelets Best Churn FirstTime NewSpender Spender Uncertain Female 1,038 2,146 19,840 4,721 10,458 13,386 Male 75 126 4,046 606 1,113 4,032 - 4,000 8,000 12,000 16,000 20,000 Customer by Cluster and Gender Female Male - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 Total Monetary by Cluster and Gender F M 38
  38. 38. THANKS FOR YOUR ATTENTION 39

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