Digital Natives Sessie Crm


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  • Digital Natives Sessie Crm

    1. 1. CRM Before and Beyond…
    2. 2. <ul><li>The first: Targeting, Database Marketing and EDM </li></ul><ul><li>The last: Loyalty and Retention Programs </li></ul><ul><li>The everything: CRM </li></ul><ul><li>… And beyond </li></ul>Agenda
    3. 3. In the Beginning there was… <ul><li>“ A means of marketing where a company -unlike in mass marketing- addresses a specific identifiable target group. Targeted Marketing is closely related to segmentation .” </li></ul>Targeted Marketing
    4. 4. Segmentation is Based Upon…
    5. 5. Segmentation Based Upon RFM Analysis Recency , Frequency , and Monetary calculations are used extensively in retail for customer segmentation
    6. 6. Or Mosaic-like Typecasting
    7. 7. Tesco’s Segmentation Shopping Habits Share of Shopping, Recency & Frequency Primary Channel Preferred Format (Supermarket, Express, On-line, Petrol) Brand Advocacy Participation in Extensions (, TPF, Baby Club, Win club) Promotional Promiscuity Cherry picking deals, bulk buying to larder fill Life Stage Application Form, What They Buy Basket Typology Vegetarian, Organic,You Are What You Eat! Profitability Brand Choice, Packaging Preference, Weight of Purchase
    8. 8. Tesco’s Targeted Communication Organics Finer Foods Healthy Living Price Sensitive
    9. 9. Then there was Database Marketing “ Database Marketing is a form of direct marketing using databases of customers or potential customers to generate personalized offers and communication in order to promote a product or service for marketing purposes.”
    10. 10. 400 Million Euros Down The Drain
    11. 11. Database Marketing at ZARA
    12. 12. <ul><li>Fast-Fashion -strategy </li></ul><ul><li>ZARA ‘creates’ her collection through (real-time) database tracking of the supply-chain and ‘fashionata trend watching’ </li></ul><ul><li>Using ‘shared situation awareness’: analyze data  finding sales patterns  develop hypotheses  prototyping (25,000 a year)  instore testing  sell </li></ul><ul><li>More then half of the collection is made in home-markets </li></ul><ul><li>Sales went up 20%. Margins are 16% (versus 7% in traditional fashion retail) </li></ul>Database Marketing at ZARA
    13. 13. DBM was Followed by EDM <ul><li>“ Event Driven Marketing is based upon the identification of changes in the situation or needs of customers and acting upon these changes by predefined campaigns that come into action if these events occur.” </li></ul>
    14. 14. Event Driven Marketing Needs Client Needs Client(Segments) Product Centric Client Centric Needs Client(Segments) Event Driven Event 1 Event 2 Event 3 Event 4 Event 5
    15. 15. <ul><li>Static Moments which are the same for all clients: e.g. start of season sale, new product </li></ul><ul><li>Variable Moments varied by client: e.g. birthday, wedding, firstborn, end of contract </li></ul><ul><li>Database Predicted Moments based upon client behavior and look-a-like analyses </li></ul>Different Kinds of Events
    16. 16. Static Moments: Pre-Sale
    17. 17. Variable Moments: Newly Borns
    18. 18. Variable Moments: Concepts
    19. 19. Database Predicted Moments <ul><li>‘ Kraamkamer’ </li></ul><ul><li>In the first 5 months the potential value of new customers is set: “We’ve got them in, let’s move them up” </li></ul><ul><li>Profile, behavior, the 5 golden questions, service enquires etc. are the bases for data-modeling </li></ul><ul><li>Data models serve as cross-sell tools for voicemail, SMS, roaming etc. with ‘on the shelf’ communication </li></ul><ul><li>Churn and win back are actively managed both ways </li></ul>
    20. 20. Continuous Cycle Deliver Message Understand Customer Behavior Insight Gather Data, Results Analysis Strategy Right message to the right person at the right time through the right channels Communications Plan, Creative Materials
    21. 21. Or… EDM for Dummies Listening to guinea pigs
    22. 22. Loyalty and Retention Programs <ul><li>“ Differential Marketing teaches us that in all categories 20% of clients bring 80% of the business . So it is important to differentiate clients on their value and treasure your most valuable clients .” </li></ul>20%
    23. 23. So What is Loyalty? <ul><li>Loyalty has an emotional component </li></ul><ul><li>Loyalty is proved by the resistance to the offers of other brands </li></ul><ul><li>Loyalty is an attachment to a brand that goes beyond convenience or short-term gain </li></ul><ul><li>Loyalty makes up- and cross selling easier </li></ul><ul><li>Loyalty inspires active advocacy amongst peers </li></ul>
    24. 24. Understanding Loyalty Components Rational What we think Price Quality Service Location etc. Emotional What we feel Trust Confidence Affinity Behavioral How we act Repurchase Rates Recommendation Rates Share of Spend Component Meaning Key Issues
    25. 25. What Loyal Customers Deliver <ul><ul><li>You are their first choice </li></ul></ul><ul><ul><li>They look to you to solve their needs / problems </li></ul></ul><ul><ul><li>They share information with you </li></ul></ul><ul><ul><li>They ask you for guidance </li></ul></ul><ul><ul><li>They discuss your offer – not your prices </li></ul></ul><ul><ul><li>They allow you to make the occasional mistake </li></ul></ul><ul><ul><li>They positively suggest how you can improve </li></ul></ul><ul><ul><li>They want you to succeed </li></ul></ul><ul><ul><li>They have emotional equity in your brand </li></ul></ul><ul><ul><li>They advocate ‘their’ brand to others </li></ul></ul>
    26. 26. How to Build Loyalty <ul><li>Perhaps by doing the antithesis of conventional advertising </li></ul><ul><li>Advertising battles to get customers to listen… which makes for a very noisy marketplace </li></ul><ul><li>Loyalty communications: </li></ul><ul><ul><ul><li>Aims to make your customers resistant to the shouting of others </li></ul></ul></ul><ul><ul><ul><li>Take them away from the marketplace to somewhere nicer, quieter and more private </li></ul></ul></ul>
    27. 27. When you’re close to your customers you don’t have to shout
    28. 28. <ul><li>“ Customer loyalty is not about how customers demonstrate their loyalty to us, it is about how we demonstrate our loyalty to them.” </li></ul><ul><li>Sir Ian MacLaurin Chairman, Tesco </li></ul>
    29. 29. British Airways - Executive Club Loyalty <ul><li>Executive Club has 5 million members worldwide </li></ul><ul><li>Collect British Airways Miles which can be used for reward flights or upgrades </li></ul><ul><li>Benefits include priority on waiting lists, seating preferences, meal preferences, priority check-in/boarding and lounge access for gold members </li></ul><ul><li>Three Tier Membership : Blue, Silver, Gold </li></ul><ul><li>Account balance available via phone or web site </li></ul>
    30. 30. British Airways - Executive Club Loyalty
    31. 31. KLM Wings Loyalty
    32. 32. Boots Loyalty <ul><li>15 million Advantage Card holders, with 10.7 million active members. 4 points per pound that can be redeemed on up to 10,000 products in store </li></ul><ul><li>The program allows Boots to introduce new products and services, by which Boots has, for example, successfully launched health and travel insurance products </li></ul><ul><li>All stores have touch-screens where members can swipe their card and receive a printout of special personalized offers, information, tips and current point balances </li></ul><ul><li>Periodic targeted offers via mail </li></ul><ul><li>Web site includes all program details and terms, account balances, special offers, member profile etc. </li></ul>
    33. 33. Boots Loyalty
    34. 34. Tesco Clubcard Loyalty <ul><li>1 point per pound spent . For every 150 points members receive a coupon for £ 1 .50 to spend in store </li></ul><ul><li>H as more than 10 million members </li></ul><ul><li>Generates more than £ 1 00 million incremental sales every year </li></ul><ul><li>A ccess to other Tesco clubs such as Baby and Toddler Club, Wine Club, Food Club and Healthy Living Club </li></ul>
    35. 36. Contact Directly at the Till We see specific shopping behaviour at the point of purchase… … and can respond by sending a message to the till to print a coupon … this is then handed to the customer by the checkout operator The customer returns to store to redeem the coupon Not just product coupons, but a wide range of options and offers Clubcard data used to understand purchasing behaviour and profile our customers
    36. 37. How many Loyalty Cards do you have?!
    37. 38. Barbie Loyalty <ul><li>On over 6 million young girls have subscribed </li></ul><ul><li>50 Million individual contacts with the core target group: girls aged 4-12 </li></ul><ul><li>A virtual loyalty system where ‘B’ points can be earned and burned on dolls, accessories, clothes, CD ROMs etc. </li></ul><ul><li>Every $ spent on the Club has the same effect on sales as 5 $ spent on promotions </li></ul><ul><li>Club vs. Non-Club Members: buy 50% more dolls, buy 100% more clothes, buy 100% more accessories </li></ul>
    38. 40. Club Nokia Loyalty
    39. 41. NRC Handelsblad Loyalty
    40. 42. What the F*CK is CRM then? “ Customer Relationship Management (CRM) is a business strategy to acquire , grow and retain profitable customer relationships. It is a customer-centric way of doing business that includes policies and processes, partners, employees, marketing, systems and IT.”
    41. 43. How is CRM Different from…? <ul><li>Direct Mail is a key channel for personalised, one-to-one communication for brands to engage with its consumers </li></ul><ul><li>Direct Marketing / Relationship Marketing essentially focuses on communications between a brand and its consumers </li></ul><ul><li>A Loyalty Program builds on a mutually beneficial relationship between a brand and its consumers, usually using purchase-based points redemption to ‘buy’ brand loyalty </li></ul><ul><li>A System is the technology that enables all of the above, but without human intelligence, becomes a very expensive piece of software </li></ul>Direct Marketing / Relationship Marketing Loyalty Programs Direct Mail A System <ul><li>Direct Mail is a key channel for personalised, one-to-one communication for brands to engage with its consumers </li></ul><ul><li>Direct Marketing / Relationship Marketing essentially focuses on communications between a brand and its consumers </li></ul><ul><li>A Loyalty Program builds on a mutually beneficial relationship between a brand and its consumers, usually using purchase-based points redemption to ‘buy’ brand loyalty </li></ul><ul><li>A System is the technology that enables all of the above, but without human intelligence, becomes a very expensive piece of software </li></ul>
    42. 44. So…. Not just a Marketing Activity CRM Product & Packaging POS Promotions Mass Marketing Web
    43. 45. But CRM Encompasses all of these Relationship Marketing Product & Packaging POS Promotions Mass Marketing Web CRM In-and External Processes Internal Stakeholders Systems & Technology Partners / Suppliers
    44. 46. A Successful CRM Program Delivers… <ul><li>Higher operating efficiency </li></ul><ul><li>Lower cost of service </li></ul><ul><li>Loyal customers </li></ul><ul><li>Increased brand relevance </li></ul><ul><li>Increased sales </li></ul><ul><li>Real-time single customer experience across multiple channels </li></ul>
    45. 47. Some Numbers from Dutch Financials <ul><li>Spaarbeleg: Millions of extra revenue and profit </li></ul><ul><li>FBTO: Over 10% growth on direct marketing conversion </li></ul><ul><li>Postbank: Lowering ‘waste’ with tenths of percents. Big cost reductions </li></ul><ul><li>Robeco: Repeated winner of The Dutch CRM Award </li></ul>
    46. 48. CRM Transformation
    47. 49. CRM Transformation Business focus: het ontwikkelen van een visie en een missie met gerelateerde doelstellingen om zodoende CRM te implementeren. De klant wordt belangrijker dan het product.
    48. 50. CRM Transformation Organizational structure: omdat de klant centraal staat is het van belang dat de organisatiestructuur zodanig wordt ingericht dat geen sterke scheiding bestaat tussen beleidsbepalers en uitvoerders, waarin iedere medewerker wordt geacht mee te denken en waarin klantgroep-managers worden aangesteld die verantwoordelijk zijn voor acquisitie en klantbehoud.
    49. 51. CRM Transformation Business metrics: het meetbaar maken van de performance van de organisatie op basis van de customer lifetime value en loyalty. In plaats van op basis van product- of campagne-performance.
    50. 52. CRM Transformation Customer interactions: omslag in communicatie van massacommunicatie naar een interactieve dialoog.
    51. 53. CRM Transformation Technology transformation: omslag naar gebruik van technologie die de dialoog met de klant mogelijk maakt ‘at all points of contact’.
    52. 54. Impact on Organization Structure CROSS-SELL PROFILE PROBABILTY SCORING
    53. 55. Our Cup of Tea: Customer Interaction <ul><li>“ Managing client contacts and offering individual fitted value propositions based upon their (buying) behavior and client value throughout all media types .” </li></ul>
    54. 56. This Means: Connecting Media and People Using Data Data Warehouse A T M M O B I L E I N T E R N E T P. O. S. E – M A I L M A I L S A L E S C A L L C E N T R E
    55. 57. This Means: Thinking in Campaign Management Funnels
    56. 58. CRM is Easier for ‘Newbies’
    57. 59. Background <ul><li>World’s largest bookstore provides online universe of commerce </li></ul><ul><li>E arth’s biggest varied selection </li></ul><ul><li>30 million customers </li></ul><ul><li>4 international web sites </li></ul><ul><li>Operates the Internet Movie Database. Including 250,000 film references. Over 1 million cast / crew references </li></ul>
    58. 60. The Website and Database
    59. 61. Solutions and Results <ul><li>Algorithms (mathematical formula) to determine product and page presentation per customer </li></ul><ul><li>Analyze results to improve personalization </li></ul><ul><li>Remembers user’s name, items last bought, and items browsed </li></ul><ul><li>Recommends titles of books, products the users can buy next </li></ul><ul><li>Measures impact of innovation to customers and to the business based on 70 metrics </li></ul>
    60. 62. Cross-Selling By Movie (by keyword) By Category By Director (By Artist)
    61. 63. Price Bundling It suggests another movie and, at the same time, offers them together at a lower price
    62. 64. Assortment Decisions <ul><li>What combination of items to have on the shelf at any time?! </li></ul><ul><li>What items can be put side by side in portal?! </li></ul><ul><li>How can we group together services according to sub profiles?! </li></ul>In a retail environment … In a web environment …
    63. 65. The Closed Loop <ul><li> has a dopted a closed loop approach to track customer response and behaviour. Measuring effectiveness, success and failures in terms of ROI </li></ul>
    64. 66. Beyond CRM “ And if we’ve managed all these ‘Looney Tunes’ for our clients, then let’s come back and take it a step further. With the latest stuff like, eCRM , Analytical CRM , VRM en Social CRM ”
    65. 67. But for now…..