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Master C R M Day 4


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Master C R M Day 4

  1. 1. CRM Marketing Automation & Campaign Management
  2. 2. Basic phases in CRM Acquisition Retention Understand Differentiate Interact Deliver Develop Personalize
  3. 3. CRM global architecture Channels Web Call center Cards Media S.F.A. Campaign Management Market place Legal environement Targets & Segments Front office Back office Supplier Partner EDI EDI ERP DSS Reporting OLAP Datamining Audit Marketing Buy Production Sales Logistics Company
  4. 4. Marketing automation <ul><li>Global framework </li></ul>Communication & Integration Processes & Performance Offered Services & Motivation Applications & Technologie People Skills & Policies Planning & (Team) Management Knowledge Management Channel Management Marketing Automation
  5. 5. Type of tools C.M . C.M . C.M . C.M . C.M . Database One customer with many interactions to one company Decision Support System Customer Cards & POS Call center & Audiotext Internet & Extranet Sales Force Automation Mail, Fax & Coupons E.I.S. & OLAP Data Mining Campaign Mgmt
  6. 6. Marketing automation <ul><li>Automated interaction </li></ul>“ More and more, companies are using interactive technology to communicate with customers without human intervention and giving access to more parts of the company and even to partners.” Bruce Kasanoff, CEO of Accelerating1to1
  7. 7. Marketing automation <ul><li>But marketing automation is more about changing the way we do business and interact with the customer </li></ul><ul><ul><li>Efficiently in each channel </li></ul></ul><ul><ul><li>Trough all coordinated channels </li></ul></ul><ul><li>If you're sending the wrong message to the wrong customer it doesn't matter how fast or cost-effective you become. It still won't increase revenues </li></ul>
  8. 8. Marketing automation <ul><li>Creativity cannot be automated ! </li></ul><ul><li>Marketing automation doesn ’t save you from being good at: </li></ul><ul><ul><li>Strategic positionning </li></ul></ul><ul><ul><li>Action planning </li></ul></ul><ul><ul><li>Action design and layout </li></ul></ul><ul><ul><li>Analysing the results </li></ul></ul><ul><li>Marketing automation helps only at improving operations </li></ul><ul><ul><li>Send up reaction times </li></ul></ul><ul><ul><li>Efficency in action deployment and follow-up </li></ul></ul>
  9. 9. Communication Process <ul><li>Organization </li></ul>WHO do you want to communicate with ? WHAT do you want to communicate HOW do you organise the communication RESULT of your communication process
  10. 10. Campaign Management <ul><li>Target selections </li></ul><ul><ul><li>Criteria management </li></ul></ul><ul><ul><li>List manegement </li></ul></ul><ul><li>Campaign planning </li></ul><ul><ul><li>Message definition </li></ul></ul><ul><ul><li>Sequence of actions & reactions </li></ul></ul><ul><ul><ul><li>In function of objectives of the marketing plan </li></ul></ul></ul><ul><ul><ul><li>Available channels to handle customer responses </li></ul></ul></ul><ul><li>Campaign execution </li></ul><ul><ul><li>In function of the channel </li></ul></ul><ul><ul><li>Keep trac of the responses </li></ul></ul><ul><li>Respons analysis </li></ul><ul><ul><li>Actions responses </li></ul></ul><ul><ul><li>Return On Invest </li></ul></ul>
  11. 11. Campaign classical structure <ul><li>Marketing plan </li></ul><ul><ul><li>Strategic objectives </li></ul></ul><ul><ul><li>Duration </li></ul></ul><ul><li>Campaigns </li></ul><ul><ul><li>Communication objectives </li></ul></ul><ul><ul><li>Global budget </li></ul></ul><ul><li>Actions </li></ul><ul><ul><li>Channel & Media </li></ul></ul><ul><ul><li>Planning </li></ul></ul><ul><ul><ul><li>Timming </li></ul></ul></ul><ul><ul><ul><li>Synchronisation </li></ul></ul></ul><ul><ul><li>Promotions </li></ul></ul><ul><ul><li>Costs elements </li></ul></ul>
  12. 12. Functions & tools needed <ul><li>Organization </li></ul>Target Selection Message Definition Inter action management Results Analysis
  13. 13. Target selections <ul><li>Selection tools </li></ul><ul><ul><li>External OLAP tools </li></ul></ul><ul><ul><li>Selection module included in the C.M. tool </li></ul></ul><ul><ul><li>Standard SQL selections </li></ul></ul><ul><li>Operations </li></ul><ul><ul><li>Define the target </li></ul></ul><ul><ul><li>Count the number of contacts in a targeted group </li></ul></ul><ul><ul><li>Define the selection criteria </li></ul></ul><ul><ul><li>Attribute the criteria to the selection group </li></ul></ul><ul><ul><li>Select the contacts </li></ul></ul><ul><ul><li>Use other defined group for deduplication </li></ul></ul>
  14. 14. Target Selection Select list Select graph type (2D, 3D, bar, line, pie,...) Select what you want to see Drill down on audience Mail report, print report,...
  15. 15. Target Selection <ul><li>FIRST : </li></ul><ul><li>Explore your contact potential </li></ul><ul><li>Look for interesting target groups </li></ul><ul><li>Get insight in relevancy </li></ul>THEN : Define audience segment through point-and-click
  16. 16. Message definition <ul><li>Communication objective(s) </li></ul><ul><ul><li>E.g.: Traffic building, reward, … </li></ul></ul><ul><li>Offer </li></ul><ul><ul><li>E.g.: A car to win, -20%, Extra service … </li></ul></ul><ul><li>Call to action </li></ul><ul><ul><li>E.g.: Call now to book your test drive, Come visit us, Answer the questions … </li></ul></ul><ul><li>Tone of voice </li></ul><ul><ul><li>E.g.: Dynamic, Classical, Official, … </li></ul></ul><ul><li>Style </li></ul><ul><ul><li>E.g.: Short, promotional, serious, … </li></ul></ul><ul><li>Message text </li></ul>
  17. 17. Message definition Selected Test-user YVETTE DUCHAMPS Personnal message Not subscribed to newsletter
  18. 18. Campaign execution <ul><li>In function of the channel </li></ul><ul><ul><li>Import the selections in the C.M. tool </li></ul></ul><ul><ul><li>Plan the type of response(s) </li></ul></ul><ul><ul><ul><li>Same channel </li></ul></ul></ul><ul><ul><ul><li>Other channel </li></ul></ul></ul><ul><ul><ul><li>Non foreseen responses </li></ul></ul></ul><ul><ul><li>Find the way to integrate the action responses </li></ul></ul><ul><ul><li>Merge the creation material and the data </li></ul></ul><ul><ul><ul><li>Personnalization </li></ul></ul></ul><ul><ul><ul><li>Pay attention to the way the customer will get the result </li></ul></ul></ul>
  19. 19. Campaign execution <ul><li>Interaction management </li></ul><ul><li>‘ Communication is about conversations with contacts’ </li></ul><ul><ul><li> Automate communication scenarios! </li></ul></ul>NO RESPONSE CLICK THROUGH BUT NO SUBSCRIPTION SUBSCRIPTION ON SUBSCRIPTION Conference invitation with link on subscription form Reminder Thanks for subscribing In case you want more information do not hesitate to contact us Wait 2 weeks Wait 2 days
  20. 20. Guide contacts to your BUSINESS GOAL with Microweb: - Lead acquisition - Product upsell - ... audience Invitation mail Filter: personalize microweb Survey form1 Survey form2 Interprete result Populate list Response page
  21. 21. Respons analysis <ul><li>Numer of responses </li></ul><ul><li>Quality of the responses </li></ul><ul><li>Costs </li></ul><ul><ul><li>Fix costs </li></ul></ul><ul><ul><ul><li>Creation </li></ul></ul></ul><ul><ul><ul><li>In production </li></ul></ul></ul><ul><ul><ul><li>Management (DB, Marketing, …) </li></ul></ul></ul><ul><ul><li>Variable costs </li></ul></ul><ul><ul><ul><li>Production / contact </li></ul></ul></ul><ul><ul><ul><ul><li>Printing </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Production </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Sending (e-mail, post, media) </li></ul></ul></ul></ul><ul><ul><ul><li>Promotion rewards </li></ul></ul></ul><ul><li>Return On Invest </li></ul>
  22. 22. <ul><li>Select your view: </li></ul><ul><li>Time period </li></ul><ul><li>Unique users vs overall actions </li></ul>
  23. 23. Opposition between KPI’s <ul><li>Quality of service vs Cost of operations </li></ul><ul><ul><li>Long inbound calls </li></ul></ul><ul><ul><li>Live call vs automated treatment </li></ul></ul><ul><ul><li>Use of call number in communication </li></ul></ul><ul><li>Revenue per customer vs CRM Investment </li></ul><ul><ul><li>Segmentation </li></ul></ul><ul><ul><li>Integration costs </li></ul></ul><ul><li>Life Time Value vs Actual ROI </li></ul><ul><ul><li>Elements of the calculation </li></ul></ul><ul><li>Etc, … </li></ul>
  24. 24. Campaign Management in the different channels
  25. 25. Technical solutions <ul><li>Example of campaign management tool screens </li></ul>
  26. 26. Campaign Management in channels <ul><li>Interactive Voice Respons </li></ul><ul><ul><li>Automated call handling </li></ul></ul><ul><ul><ul><li>Use dial tone (E.g. Phone banking, Fax back) </li></ul></ul></ul><ul><ul><ul><li>Voice recognition </li></ul></ul></ul><ul><li>In Call Center </li></ul><ul><ul><li>With CTI and ACD </li></ul></ul><ul><ul><li>Inbound </li></ul></ul><ul><ul><ul><li>To mange responses to a campaign </li></ul></ul></ul><ul><ul><ul><li>Depend on the application </li></ul></ul></ul><ul><ul><li>Outbound </li></ul></ul><ul><ul><ul><li>Using scripts </li></ul></ul></ul><ul><ul><ul><li>Tele sales operator </li></ul></ul></ul>
  27. 27. Campaign Management in channels <ul><li>Inbound call-center operations </li></ul>
  28. 28. Campaign Management in channels <ul><li>Fax </li></ul><ul><ul><li>Automated fax system </li></ul></ul><ul><ul><ul><li>time of sending </li></ul></ul></ul><ul><ul><ul><li>fax responses </li></ul></ul></ul><ul><li>e-mailing </li></ul><ul><ul><li>Inbound </li></ul></ul><ul><ul><ul><li>Structure mails </li></ul></ul></ul><ul><ul><ul><li>Text minning tools </li></ul></ul></ul><ul><ul><ul><li>e-mail fulfilment tools </li></ul></ul></ul><ul><ul><li>Outbound </li></ul></ul><ul><ul><ul><li>List management </li></ul></ul></ul><ul><ul><ul><li>Broadcasters </li></ul></ul></ul>
  29. 29. Campaign Management in channels <ul><li>Mailings </li></ul><ul><ul><li>Address extraction </li></ul></ul><ul><ul><li>Memorized send mails </li></ul></ul><ul><ul><ul><li>Creation </li></ul></ul></ul><ul><ul><ul><li>List of contacts </li></ul></ul></ul><ul><li>SFA </li></ul><ul><ul><li>List integration in the SFA tool </li></ul></ul><ul><ul><li>To do definition </li></ul></ul><ul><ul><li>Follow-up tracking </li></ul></ul><ul><li>SMS </li></ul><ul><ul><li>Short message broadcast platform </li></ul></ul><ul><ul><li>Interaction scenarios management </li></ul></ul><ul><li>Others: Bannering, ... </li></ul>
  30. 30. Key steps in marketing automation projects
  31. 31. The key steps <ul><li>1. Develop a Vision </li></ul><ul><ul><li>Like any automation project, companies need to understand the problems they're trying to solve. </li></ul></ul><ul><ul><li>Maximize the automation effort by identifying where you can make the quickest gains. </li></ul></ul><ul><ul><li>Consider how the marketing automation system will fit with </li></ul></ul><ul><ul><ul><li>existing marketing processes </li></ul></ul></ul><ul><ul><ul><li>existing systems </li></ul></ul></ul><ul><ul><ul><li>other company systems </li></ul></ul></ul><ul><ul><ul><ul><li>Data sources </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Specific campaign management systems </li></ul></ul></ul></ul>
  32. 32. The key steps <ul><li>2. Understand the Organizational Impact </li></ul><ul><ul><li>Take a holistic approach </li></ul></ul><ul><ul><li>Identify all the areas that touch customers </li></ul></ul><ul><ul><ul><li>marketing </li></ul></ul></ul><ul><ul><ul><li>sales </li></ul></ul></ul><ul><ul><ul><li>telesales </li></ul></ul></ul><ul><ul><ul><li>customer service </li></ul></ul></ul><ul><ul><li>Consider opportunities to implement marketing tools such as auctions, exchanges and portals </li></ul></ul><ul><ul><li>Consider the human factor (egos and power struggles) </li></ul></ul><ul><ul><ul><li>Customer ownership presents a major obstacle </li></ul></ul></ul><ul><ul><ul><li>Senior management must encourage employees to look at marketing automation as an alternative approach </li></ul></ul></ul>
  33. 33. The key steps <ul><li>3. Think Process First </li></ul><ul><ul><li>When you're talking about automation, you're talking process. </li></ul></ul><ul><ul><li>Many aspects of marketing are process-oriented </li></ul></ul><ul><ul><ul><li>Planning steps for marketing activities </li></ul></ul></ul><ul><ul><ul><li>Action execution </li></ul></ul></ul><ul><ul><ul><li>Coordination and data acquisition </li></ul></ul></ul><ul><ul><li>Some software products have work-flow built into them: </li></ul></ul><ul><ul><ul><li>If the processes aren’t thought through, it will be useless </li></ul></ul></ul><ul><ul><ul><li>Don’t use predefined model that doesn’t match your goals </li></ul></ul></ul><ul><ul><ul><li>You have to choose a process yourself and train the people so they're ready for it and then automate it </li></ul></ul></ul>
  34. 34. The key steps <ul><li>4. Organize Around the Customer </li></ul><ul><ul><li>Add new channels to the marketing mix multiplies the complexities of managing marketing messages </li></ul></ul><ul><ul><ul><li>Product managers may be targeting unrelated messages to the same people </li></ul></ul></ul><ul><ul><ul><li>Multi-channel communication increases complexity </li></ul></ul></ul><ul><ul><li>New communications technology dictates the need for new forms of customer interaction </li></ul></ul><ul><ul><ul><li>Accomplished through developing teams to manage particular customer segments. </li></ul></ul></ul><ul><ul><ul><li>Design the right mix of promotions and campaigns to suit the customer </li></ul></ul></ul>
  35. 35. The key steps <ul><li>5. Earn Customers' Trust </li></ul><ul><ul><li>most marketing automation systems today are being used to supercharge communication </li></ul></ul><ul><ul><ul><li>Sales commission-based way of doing business </li></ul></ul></ul><ul><ul><ul><li>Risk of bother the customer </li></ul></ul></ul><ul><ul><ul><li>Making it harder and harder to reach them over time. </li></ul></ul></ul><ul><ul><li>Use the technology to establish a more powerful and profitable way of satisfying customer needs </li></ul></ul><ul><ul><li>Permission marketing </li></ul></ul><ul><ul><ul><li>Don't betray a customers' trust by selling their information on the open market </li></ul></ul></ul><ul><ul><ul><li>Earn the customer's trust and willingness to share information </li></ul></ul></ul><ul><ul><ul><ul><li>Opt-in lists </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Contact them only when it's really in their interest </li></ul></ul></ul></ul>
  36. 36. The key steps <ul><li>6. Monitor Data Integrity </li></ul><ul><ul><li>The foundation of any successful automation project is a clean database </li></ul></ul><ul><ul><ul><li>Ongoing data quality </li></ul></ul></ul><ul><ul><ul><li>Update procedures </li></ul></ul></ul><ul><ul><ul><li>Develop data dictionary master file which defines the terms used in the database (meta data) </li></ul></ul></ul><ul><ul><li>Put business users in charge of data categories </li></ul></ul><ul><ul><ul><li>products </li></ul></ul></ul><ul><ul><ul><li>customers </li></ul></ul></ul><ul><ul><ul><li>sales </li></ul></ul></ul><ul><ul><li>Give IT an person in the company to help </li></ul></ul><ul><ul><ul><li>Managing the data </li></ul></ul></ul><ul><ul><ul><li>in chasing down and solving problems </li></ul></ul></ul>
  37. 37. The key steps <ul><li>7. Choose Software Carefully </li></ul><ul><ul><li>You need to make sure you understand how the components will fit together with your other systems. </li></ul></ul><ul><ul><li>Ask vendors to show you </li></ul></ul><ul><ul><ul><li>How information will get merged </li></ul></ul></ul><ul><ul><ul><li>How much code needs to be written </li></ul></ul></ul><ul><ul><ul><li>How quickly it can be implemented </li></ul></ul></ul><ul><ul><li>Ask the vendors to demonstrate their products through a prototyping exercise. </li></ul></ul><ul><ul><ul><li>Find out how the software handles a real-life situation within your own company </li></ul></ul></ul><ul><ul><ul><li>Better appreciation for what the software can and can't do </li></ul></ul></ul>
  38. 38. The key steps <ul><li>8. Watch Outsourced Components </li></ul><ul><ul><li>When technology is constantly changing, outsourcing pieces of your marketing automation can be an excellent alternative </li></ul></ul><ul><ul><ul><li>install a million-dollar software application </li></ul></ul></ul><ul><ul><ul><li>host it for $15,000 to $20,000 per month </li></ul></ul></ul><ul><ul><li>Your outsourcing strategy should be consistent </li></ul></ul><ul><ul><ul><li>with the information that you need </li></ul></ul></ul><ul><ul><ul><li>Make sure they're capturing and keeping information for future business </li></ul></ul></ul><ul><ul><ul><li>Make sure the hosted applications aren't core to your business </li></ul></ul></ul>
  39. 39. The key steps <ul><li>9. Test and Learn </li></ul><ul><ul><li>Technology is allowing marketers to understand which promotions or campaigns appeal to specific audiences. </li></ul></ul><ul><ul><ul><li>analytical capabilities are often underutilized </li></ul></ul></ul><ul><ul><ul><ul><li>Data mining </li></ul></ul></ul></ul><ul><ul><ul><ul><li>OLAP </li></ul></ul></ul></ul><ul><ul><li>What's needed is a rigorous campaign management discipline </li></ul></ul><ul><ul><ul><li>strong planning </li></ul></ul></ul><ul><ul><ul><li>codified the campaign development process </li></ul></ul></ul><ul><ul><ul><li>analytical capabilities </li></ul></ul></ul><ul><ul><ul><li>use a scientific method to continually refine the mix </li></ul></ul></ul><ul><ul><ul><li>understand customer buying behavior </li></ul></ul></ul>
  40. 40. The key steps <ul><li>10. Work Toward Cross-Channel Consistency </li></ul><ul><ul><li>One of the problems with marketing automation is that customer intimacy tends to be implemented in bite-sized pieces. </li></ul></ul><ul><ul><ul><li>Insure that each individual channel is well managed </li></ul></ul></ul><ul><ul><ul><li>make sure they're being treated well across all channels </li></ul></ul></ul><ul><ul><li>Providing consistent high-level service across all channels will become increasingly important. </li></ul></ul><ul><ul><li>The next challenge will be real-time synchronization across all channels </li></ul></ul><ul><ul><ul><li>More complicated than off-line campaign management </li></ul></ul></ul><ul><ul><ul><li>Need a better technology integration </li></ul></ul></ul>
  41. 41. Case Study Happy Days on-line activities
  42. 42. Case study: Happy Days <ul><ul><li>Volumes of almost 250.000 e-mail contacts </li></ul></ul><ul><ul><li>Mailings are profile-driven </li></ul></ul><ul><ul><ul><li> large data uploads for every campaign </li></ul></ul></ul><ul><ul><li>Campaign creation time consuming in ASP mode </li></ul></ul><ul><ul><li>In house response management </li></ul></ul><ul><ul><li>Internet infrastructure available at Happy Days </li></ul></ul><ul><ul><li>Email & Internet competence available at Happy Days </li></ul></ul><ul><ul><li>High-volume & high frequency </li></ul></ul><ul><ul><ul><li> clear ROI for in-house product </li></ul></ul></ul>
  43. 43. <ul><li>Strategy </li></ul><ul><ul><li>Subscription on Website </li></ul></ul><ul><ul><li>Syncronisation with corporate off-line database </li></ul></ul><ul><ul><li>Initiate email communication with objectives </li></ul></ul><ul><ul><ul><li>Branding of Happy Days </li></ul></ul></ul><ul><ul><ul><li>Increase number of pageviews on Happy Days website </li></ul></ul></ul><ul><ul><ul><li>Motivate people to register on the website </li></ul></ul></ul><ul><ul><ul><li>Convince people to redeem their points online </li></ul></ul></ul>Case study: Happy Days
  44. 44. <ul><li>List </li></ul><ul><ul><li>Opt-in email addresses via website </li></ul></ul><ul><ul><ul><li>Almost 120.000 email addresses of people who registered via the Happy Days website </li></ul></ul></ul><ul><ul><li>Opt-in email addresses from paper forms </li></ul></ul><ul><ul><ul><li>Almost 80.000 email addresses of people who indicated opt-in when subscribing to the Happy Days program </li></ul></ul></ul>Case study: Happy Days
  45. 45. <ul><li>Content </li></ul><ul><ul><li>Dynamic content </li></ul></ul><ul><ul><ul><li>Content in 2 languages: French & Dutch </li></ul></ul></ul><ul><ul><ul><li>Content segmentation based profile info </li></ul></ul></ul><ul><ul><ul><li>Personalized greetings, points balance,.. </li></ul></ul></ul><ul><ul><ul><li>Contact sensors to monitor site impact </li></ul></ul></ul><ul><ul><li>Static content </li></ul></ul><ul><ul><ul><li>Links to Happy Days website </li></ul></ul></ul><ul><ul><ul><li>Announcements about the program </li></ul></ul></ul><ul><ul><ul><li>Events linked with the program </li></ul></ul></ul><ul><ul><ul><li>Contests </li></ul></ul></ul><ul><ul><ul><li>... </li></ul></ul></ul>Case study: Happy Days
  46. 46. <ul><li>Personalized greeting </li></ul>Case study: Happy Days <ul><li>Points balance </li></ul><ul><li>Product promotions </li></ul><ul><li>Announcements </li></ul>
  47. 47. <ul><li>Delivery </li></ul><ul><ul><li>E-mail is being sent in auto-sense format: E-mail is being displayed in HTML or plain text at the recipient, depending on his e-mail client (Outlook / Outlook Express / ...) </li></ul></ul><ul><ul><li>Repartition HTML – Plain text </li></ul></ul><ul><ul><ul><li>± 90% HTML (more effective) </li></ul></ul></ul><ul><ul><ul><li>± 10% plain text </li></ul></ul></ul><ul><ul><li>Bounced mails are flagged in the database </li></ul></ul>Case study: Happy Days
  48. 48. <ul><li>Response </li></ul><ul><ul><li>Unsubscription rate : 0,59 % </li></ul></ul><ul><ul><li>Total clickthrough rate : 40,64 % </li></ul></ul><ul><ul><li>Active period of mailing : ± 1 week </li></ul></ul>Case study: Happy Days
  49. 49. <ul><li>Impact on website: Visitor sessions </li></ul>Case study: Happy Days E-mail send x 6 Permanent raise of ± 30%
  50. 50. Databases & Business Intelligence
  51. 51. CRM global architecture Channels Web Call center Mail Media S.F.A. Campaign Management Market place Legal environement Targets & Segments Front office Back office Supplier Partner EDI EDI ERP DSS Reporting OLAP Datamining Audit Marketing Buy Production Sales Logistics Company
  52. 52. Customer C.A.S.A. method for integrated marketing & CRM <ul><li>C ollect </li></ul><ul><li>A nalyse </li></ul><ul><li>S trategy </li></ul><ul><li>A ction </li></ul>Database Cards & POS Call center & Audiotext Internet & Extranet Sales Force Automation Mail, Fax & Coupons Medias Integrated Marketing E.I.S. & OLAP Data Mining Campaign Mgmt
  53. 53. The DB as cornerstone of CRM 360° Customer view & analysis * customer profiling * Behavior Analysis * Web Site analysis Web Logs Internal Data (Sales, …) Customer Database External Data (demographic, competitors, …) Off line contacts WWW
  54. 54. Use of meta-data <ul><li>Example of dimensions </li></ul>Channel Area Time Customer Customer Customer Group All Customers Sales Person/Broker Channel All Channels Month All Years City Province Regions Country Product Group All Products Year Product
  55. 55. Top - down data modeling process <ul><li>Identify the different data sets involved </li></ul><ul><li>Describe the kind of relation between them </li></ul><ul><li>Organize the data sets among dimensions (Who, What, Where, When, Why ?) </li></ul><ul><li>Validate your choices </li></ul><ul><li>Describe the fields in each data set </li></ul><ul><li>Qualify & comment each field to obtain the physical data model </li></ul><ul><li>Describe validation rules, domains sets... that will apply to each field. </li></ul>
  56. 56. Analytical CRM or Business Intelligence
  57. 57. Basic phases in CRM Acquisition Retention Understand Differentiate Interact Deliver Develop Personalize
  58. 58. Business Intelligence <ul><li>Some definition of B.I. </li></ul>A broad category of software's and solutions for gathering, consolidating, analyzing, and providing access to data in a way that lets enterprise users make better business decisions. Gartner Group - 1993
  59. 59. Type of B.I. questions <ul><li>Sales: </li></ul><ul><ul><li>Do we succeed in launching our new product ? Who are our best vendors ? Which sectors are 20% above and below the forecast ? Can you analyse the gap ? </li></ul></ul><ul><li>Purchasing: </li></ul><ul><ul><li>Who are our major suppliers ? What is the amount of purchase by supplier ? </li></ul></ul><ul><li>Finance and controlling: </li></ul><ul><ul><li>Where are we now in comparison with budget ? What are the forecasts for the next 3 months ? </li></ul></ul><ul><li>Human resources: </li></ul><ul><ul><li>What is the turnover rate this month by Business Unit ? Is it increasing ? </li></ul></ul>
  60. 60. Type of B.I. questions <ul><li>Marketing: </li></ul><ul><ul><li>What type of action is the most effective? </li></ul></ul><ul><ul><ul><li>Results analysis </li></ul></ul></ul><ul><ul><li>Who are my clients/prospects? </li></ul></ul><ul><ul><ul><li>Profile analysis </li></ul></ul></ul><ul><ul><li>How to improve the segmentation of my database </li></ul></ul><ul><ul><ul><li>Scoring </li></ul></ul></ul><ul><ul><li>Where to open new stores ? </li></ul></ul><ul><ul><ul><li>Potential analysis </li></ul></ul></ul><ul><ul><li>How improve customer behavior knowledge ? </li></ul></ul><ul><ul><ul><li>Life style </li></ul></ul></ul>
  61. 61. About analysis and statistics <ul><li>Rule Nr 1: “garbage in = garbage out”, take conclusions on accurate & populated data </li></ul><ul><li>Rule Nr 2: “Don’t interpret results, understand them.” </li></ul><ul><ul><li>e.g.: Bread statistics ;-) </li></ul></ul><ul><ul><ul><li>More than 98 percent of convicted felons are bread users. </li></ul></ul></ul><ul><ul><ul><li>More than 90 percent of violent crimes are committed within 24 hours of eating bread. </li></ul></ul></ul><ul><ul><ul><li>Primitive tribal societies that have no bread exhibit a low incidence of cancer, Alzheimer's, Parkinson's disease, and osteoporosis. Etc. </li></ul></ul></ul>
  62. 62. Type of data <ul><li>Definition of hard and soft languages </li></ul>HARD SOFT DATAMINING TEXT MINING Univoque Multiple sence contexted e.g. 0 1 MVX 1,12 PRINT M/F BLEU (color, to be … ) Easy to analyse Coded Difficult or impossible to analyse
  63. 63. Type of analysis <ul><li>Results analysis </li></ul><ul><ul><li>Action response </li></ul></ul><ul><ul><li>Contact & Response costs </li></ul></ul><ul><ul><li>Return On Invest </li></ul></ul><ul><li>Segmentation </li></ul><ul><ul><li>Profile </li></ul></ul><ul><ul><li>Géomarketing </li></ul></ul><ul><li>Click streams </li></ul><ul><ul><li>Surfing behavior </li></ul></ul><ul><li>Segmentation & forecast </li></ul><ul><ul><li>RFM </li></ul></ul><ul><ul><li>LTV </li></ul></ul><ul><li>Text mining </li></ul><ul><ul><li>E.g. E-mail fulfilment </li></ul></ul>
  64. 64. … what happened, why and what will happen ? * Jim Berkowitz, ShowCase
  65. 65. Differences between Datamining and OLAP <ul><li>In function of detailed data and agregates </li></ul>Count & Simple functions Complex statistics Quartal Month OLAP TOP Down Year E.G. DATAMINING UP Bottom
  66. 66. Type of views Geographical Mapping & Traffic Lighting Boston Matrix Plot Graphics - 3D Bars Budget Forecast Target 95% Confidence Limit 95% Confidence Limit Forecasting Neural Networks
  67. 67. Basic segmentation
  68. 68. Basic segmentation Identified Prospects Targeted suspects 10 % clients = 40 % revenue Top Heavy users Medium buyers Light consumers High 20 % = 30 % revenue Mid 30 % = 20 % Bottom 40 % =10 % Revenue Clients
  69. 69. Basic segmentation Development Brand Loyalty Acquisition Identified Prospects Targeted suspects Top 10 % Top Heavy users Medium buyers Light consumers High 20 % Mid 30 % Bottom 40 %
  70. 70. « All consumers are not created equal ! » Data from 1/1 to 31/10/2002
  71. 71. Results Analysis
  72. 72. Results analysis <ul><li>Action based </li></ul><ul><ul><li>Need coding </li></ul></ul><ul><ul><ul><li>per channel </li></ul></ul></ul><ul><ul><ul><li>per cycle </li></ul></ul></ul><ul><ul><ul><li>per period </li></ul></ul></ul><ul><ul><ul><li>per segment or source file </li></ul></ul></ul><ul><ul><li>Need interaction </li></ul></ul><ul><ul><ul><li>coupons, fax, letters, … </li></ul></ul></ul><ul><ul><ul><li>Interactive media </li></ul></ul></ul><ul><ul><ul><ul><li>Call centers, DRTV, DRRadio, … </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Internet </li></ul></ul></ul></ul><ul><ul><ul><ul><li>POS, payment terminals, ... </li></ul></ul></ul></ul>
  73. 73. Use the SMART Dialog Model TM to code your actions Pre-sales Sales After-sales Cycle Channel Qualification Analysis Closing Support Up-selling Generation Pre-sales Sales Œ SMART = specific, measurable, achievable, relevant and time-bound - inbound - outbound Call center Dealers D.M . Sales Force Mass Media   Ž       Œ  Œ  Ž     ‘
  74. 74. Test methodology in direct marketing Action plan Action design Selections of suitable samples Key performance indicators Send communication Reactions Results analysus Concept selection Communication fine tuning Selections Key performance indicators
  75. 75. Results analysis <ul><li>Action response </li></ul><ul><ul><li>Response = Nbr. responses / Nbr. Sended </li></ul></ul><ul><ul><ul><li>Depend on target </li></ul></ul></ul><ul><ul><ul><li>Depend on promotion </li></ul></ul></ul><ul><ul><ul><li>Depend on action plan & media </li></ul></ul></ul><ul><ul><li>Response type </li></ul></ul><ul><ul><ul><li>Documentation or information </li></ul></ul></ul><ul><ul><ul><li>Visit or commercial contact </li></ul></ul></ul><ul><ul><ul><li>Only the promotion </li></ul></ul></ul>
  76. 76. Results analysis <ul><li>Contact & Response costs </li></ul><ul><ul><li>Don’t compare contact cost, compare response cost </li></ul></ul><ul><ul><li>Split useful contacts and others </li></ul></ul><ul><li>Return On Invest </li></ul><ul><ul><li>Integrates sales results </li></ul></ul><ul><ul><li>Costs </li></ul></ul><ul><ul><ul><li>Action costs </li></ul></ul></ul><ul><ul><ul><li>Fulfillment costs </li></ul></ul></ul><ul><ul><ul><li>Follow-up costs </li></ul></ul></ul><ul><ul><li>Pay attention to Life Time Value </li></ul></ul>
  77. 77. Profile Analysis
  78. 78. Procedure for profile analysis <ul><li>Enhance client database </li></ul>EXTERNAL (Consu-Data) province district neighbourhood GEOGRAPHIC DATA INDIVIDUAL DATA COLLECTIVE DATA age sex children uni/multi car nationality Social class urbanisation Mosaic types Client database
  79. 79. Procedure Comparison index Enhanced client database Population Reference 2nd hand New 70% 30% 35% 65% 200 46 E.g.: motor cycle
  80. 80. Procedure Age: Nbr of motor cycle: Social class: 40 to 60 years min. 1, and mostly 2 cars High social class ...
  81. 81. Scoring Analysis
  82. 82. Scoring analysis <ul><li>Goal </li></ul><ul><ul><li>Reduce wastage </li></ul></ul><ul><ul><li>Better segmentation </li></ul></ul><ul><ul><li>Better resp onse rates </li></ul></ul><ul><li>Multi-variables analysis </li></ul><ul><ul><li>Analysis of clients & prospects data </li></ul></ul><ul><ul><li>Attribute variables weight </li></ul></ul><ul><ul><li>Simulate scores </li></ul></ul><ul><ul><li>Build groups </li></ul></ul>
  83. 83. Case study: Touring Club <ul><li>Analysis </li></ul><ul><li>Response analysis </li></ul><ul><li>Scoring of the prospection database </li></ul><ul><li>Response forecasting </li></ul><ul><li>Mailing </li></ul><ul><li>Results comparison </li></ul><ul><ul><li>forecast vs real life </li></ul></ul>
  84. 84. Case study: Touring Club <ul><li>Analyzed data </li></ul><ul><li>province / commune </li></ul><ul><li>language </li></ul><ul><li>nationality </li></ul><ul><li>age </li></ul><ul><li>Nbr. Of children (per age segments) </li></ul><ul><li>family size </li></ul><ul><li>composition of the family </li></ul><ul><li>type habitation (house of apartment ) </li></ul><ul><li>Nbr. Of cars </li></ul><ul><li>New or second hand </li></ul><ul><li>car type </li></ul><ul><li>neighborhood social class </li></ul><ul><li>MOSAIC type </li></ul>
  85. 85. Case study: Touring Club Social class 0 20 40 60 80 100 120 -27 27-36 37-46 47-56 57-66 +66 113 86 94 87 119 106 0 20 40 60 80 100 120 a b c1 c2 c3 d 117 113 97 103 85 94 Age
  86. 86. Which variable is to be included in the model? VARIABLES WEIGHTED DEVIATION Car age 15,92 MOSAIC type 12,61 Language 12,16 Provinces 10,89 Car 7,51 Social class 7,27 ...
  87. 87. Case study: Touring Club GROUPS 0% 1% 2% 3% 4% 5% 6% 7% 1 2 3 4 5 6 7 8 9 10 6,06% 4,47% 5,91% 4,20% 3,45% 3,42% 2,82% 2,52% 1,77% 1,41%
  88. 88. Case study: Touring Club +350 319-349 296-318 275-295 255-274 234-254 210-233 182-209 144-181 -144 <ul><ul><li>6,06 </li></ul></ul><ul><ul><li>5,91 </li></ul></ul><ul><ul><li>4,47 </li></ul></ul><ul><ul><li>4,20 </li></ul></ul><ul><ul><li>3,45 </li></ul></ul><ul><ul><li>3,42 </li></ul></ul><ul><ul><li>2,82 </li></ul></ul><ul><ul><li>2,52 </li></ul></ul><ul><ul><li>1,77 </li></ul></ul><ul><ul><li>1,41 </li></ul></ul><ul><ul><li>1 </li></ul></ul><ul><li>2 </li></ul><ul><li>3 </li></ul><ul><li>4 </li></ul><ul><li>5 </li></ul><ul><li>6 </li></ul><ul><li>7 </li></ul><ul><li>8 </li></ul><ul><li>9 </li></ul><ul><li>10 </li></ul><ul><ul><li>173 </li></ul></ul><ul><ul><li>167 </li></ul></ul><ul><ul><li>185 </li></ul></ul><ul><ul><li>192 </li></ul></ul><ul><ul><li>197 </li></ul></ul><ul><ul><li>201 </li></ul></ul><ul><ul><li>208 </li></ul></ul><ul><ul><li>213 </li></ul></ul><ul><ul><li>223 </li></ul></ul><ul><ul><li>232 </li></ul></ul>GROUPS NBR SCORE REPONS '99 (x 1000) %
  89. 89. Case study: Touring Club SELECTION '99 (1.550.000) REJECTED ADDRESSES ± 400.000 High Scores Control 50 000 Low Scores
  90. 90. GEOMARKETING Segmentation & mapping
  91. 91. GEOMARKETING <ul><li>Where are my customers? </li></ul><ul><li>Where can I find people with the same profile? ... </li></ul>
  92. 92. Key Performance Indicators <ul><li>Share of wallet </li></ul><ul><ul><li>Number of product within the company </li></ul></ul><ul><ul><li>Need set </li></ul></ul>
  93. 93. RFM MODELS Segmentation & forecasting
  94. 94. RFM models <ul><li>RFM stands for : </li></ul><ul><ul><li>Recency </li></ul></ul><ul><ul><ul><li>last buy period </li></ul></ul></ul><ul><ul><ul><ul><li>Often the most important </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Depend on activity type </li></ul></ul></ul></ul><ul><ul><li>Frequency </li></ul></ul><ul><ul><ul><ul><li>Number of buys </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Number of buying periods </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Number of products per households </li></ul></ul></ul></ul><ul><ul><li>Monetary value </li></ul></ul><ul><ul><ul><li>total amount of money </li></ul></ul></ul>
  95. 95. RFM models <ul><li>Goal </li></ul><ul><ul><li>Mesure, manage & increase fidelity </li></ul></ul><ul><ul><li>Forecast & manage churn </li></ul></ul><ul><ul><ul><li>simulation </li></ul></ul></ul><ul><ul><ul><li>Life Time Value </li></ul></ul></ul><ul><ul><ul><li>test alternatives </li></ul></ul></ul><ul><ul><li>Adapt communication </li></ul></ul><ul><ul><ul><li>in frequency & type </li></ul></ul></ul><ul><ul><ul><li>in content </li></ul></ul></ul>
  96. 96. RFM models are based on data <ul><li>Identification (1) </li></ul><ul><ul><li>Name & address </li></ul></ul><ul><ul><li>Telephone </li></ul></ul><ul><ul><li>Birthdate </li></ul></ul><ul><ul><li>VAT Nr. </li></ul></ul><ul><ul><li>Bank account Nr. </li></ul></ul><ul><li>Historical data (N) </li></ul><ul><ul><li>Client Nr. </li></ul></ul><ul><ul><li>Loyaly cards </li></ul></ul><ul><ul><li>Invoices </li></ul></ul><ul><ul><li>Delivery notes </li></ul></ul><ul><ul><li>Credit cards </li></ul></ul><ul><ul><li>Waranty cards </li></ul></ul><ul><ul><li>Studies </li></ul></ul><ul><ul><li>Coupons </li></ul></ul><ul><ul><li>Contacts, ... </li></ul></ul>
  97. 97. RFM methodology <ul><li>Analyse data to find the most discriminant criteria </li></ul><ul><ul><li>Activity type & level </li></ul></ul><ul><ul><li>Cash flow </li></ul></ul><ul><li>Build the RFM model historical data </li></ul><ul><li>Segmentation of the database </li></ul><ul><li>Validation over several time periods </li></ul><ul><li>Adapt ratio’s </li></ul><ul><li>Forecast evolution </li></ul>
  98. 98. Example of segmentation number of buys last buy last buy last buy last buy on 2 years last month between between older 1 > 3 month 3 > 12 month 12 month 1 recent recent tried once non-active 2 to 5 trusty trusty sleepers non-active 5 to 10 very trusty trusty sleepers disappointed 10 & more very trusty very trusty gone disappointed
  99. 99. RFM forecasting 44.000 23.200 22.200 19.500 TOT: 108.900 DATABASE 00 10 01 11 Buy Y1-Y2 Size
  100. 100. RFM forecasting HOLDERS on 01/01/Y3 USERS IN Y3 9% 26% 50% 60% 4,000 6,000 11,100 11,700 = = = = 32,800 PS: 29% of new holders use their card 35,000 X 29% 10,200 = 43,000 44,000 23,200 22,200 19,500 00 10 01 11
  101. 101. Life Time Value <ul><li>Measure the long term potential </li></ul><ul><li>Forecast expenses evolution </li></ul><ul><li>Forecast the churn </li></ul><ul><li>Adapt the marketing plan </li></ul>Expenses Time Segment 1 Segment 2
  102. 102. Life Time Value <ul><li>Different types of LTV </li></ul><ul><ul><li>Forecasted (base on company’s customer wallet knowledge) </li></ul></ul><ul><ul><li>Actual (base on experience with a particular customer) </li></ul></ul><ul><li>Variables </li></ul><ul><ul><li>Acquisition costs (direct and indirect costs) </li></ul></ul><ul><ul><li>Margins (global over a period or per product) </li></ul></ul><ul><ul><li>Retention costs </li></ul></ul><ul><ul><ul><li>Marketing activities to reward and/or cross sell </li></ul></ul></ul><ul><ul><ul><li>Complain management, … </li></ul></ul></ul><ul><ul><li>Age, revenue level, type of product, ... </li></ul></ul>
  103. 103. Life Time Value <ul><li>Formulas </li></ul>LTV =  net margins -  retention costs - acquisition costs LTV =  p t m t C t -  d t + a t +R t ) C t - A Where: n = numbers of periods of customer relation A = Acquisition costs p = propention to buy in the period t m= net margin in the period. Can be detailed in function of the products and volumes d = design costs a = variable action cost (related to the volumes) R = Retention rewards costs C = distortion factor to get constant cost or revenue t=1 n t=1 n
  104. 104. Thanks