Featuring Trae Clevenger, Vice President, Strategy & Innovation How do you measure the impact of customer engagement with your content and communications? How can you use a customer’s pattern of engagement to strengthen the relationship and drive sales? The tight integration of content, data, cutting-edge analytics and technology can deliver optimal customer interactions and drive your marketing objectives. This webinar illustrated an innovative approach that is providing marketers with an actionable gauge of relationship strength and the ability to drive and optimize ROI.

1. Engagement Impact: Driving Relationship and Sales at the Customer Level

2. Defining Engagement What is engagement? “An estimate of the depth of visitor interaction.” “The emotional bond or attachment that customers develop with your business.” “Time on site and page views.” “If a visitor is happy when they leave, they have been engaged.” “A state of mind, a state of the heart that shines in everything that you do."

3. Defining Engagement “Engagement is the level of involvement, interaction, intimacy and influence that an individual has with a brand over time” “Well-established behaviors that demonstrate interactive multi-channel behavioral attachment and that reinforce commitment to the brand”

4. Defining Engagement: An Impact-focused Approach “Engagement is as Engagement does” What are your marketing objectives? Which needle are you trying to move? Whatever the answer, engagement should be viewed with respect to that objective. Your objective serves as the dependent variable and every measurable activity a customer can perform acts as an independent variable. Quantify the connection between actions and objectives. Does clicking on this content affect a visitor’s likelihood of doing what I want them to do? If so, how much? An objective-based approach to engagement ensures you are measuring things that truly have an impact and, maybe more importantly, weighting activities according to the impact they’re having. NERD ALERT

5. Customer Engagement Focus Create and translate individual-level, data-driven insights that fuel the ideas needed for customer engagement Create customer engagement that delivers measurable and sustainable results Wired for engagement optimization – seamless integration of technology, analytics, and more effective creative

6. The Approach: Pattern of Engagement Key Points: Consumer level…not aggregate Longitudinal…not point-in-time snapshot Actionable proxy and metric for relationship strength Quantifiable relationship between engagement and sales (online or off) Enables optimization and ever-improving approach with respect to marketing objectives

7. The Approach: Pattern of Engagement Steps: Establish an engagement paradigm Develop a powerful consumer-level metric Connect engagement to purchase Relationship management with Pattern of Engagement

11. The level of engagement score indicates each consumer’s volume of engagement

12. Each consumer’s level of engagement can be treated as a time series and trended to account for seasonal patterns in order to determine their direction of engagementNERD ALERT

14. Now with longitudinal data on consumers’ engagement and purchases, it is possible to calculate an “engagement elasticity of demand”… in other words, the impact on purchases caused by an increase in engagementNERD ALERT Model Specification: log(UNITS PURCHASED) = α + β1log(ENGAGEMENT) + β2 log(INCOME)… + ε

16. Now with longitudinal data on consumers’ engagement and purchases, it is possible to calculate an “engagement elasticity of demand”… in other words, the impact on purchases caused by an increase in engagement

18. Test design and targeted campaigns flow from such a strategy matrix aimed at activation, retention, increased engagement, etc.Volume of Engagement Direction of Engagement

19. Case Study: CPG client, multiple brand sites and newsletters, 20 million members Client desired an approach to understand and optimize strength of relationships over time and the financial impact to their business Pattern of Engagement methodology employed Each member’s activity was weighted, aggregated, and trended over time Level of Engagement The Approach: Results

20. Case Study (continued): The relationship to sales was quantified as an engagement elasticity of demand: on average, a 1% increase in engagement resulted in a 0.2% increase in units purchased. Members were flagged according to volume and direction each month and treated accordingly Content and communication driven by testing around Pattern of Engagement In the first six months, 20% lift in engagement, driving an average 4% lift in units purchased, with a ROI over 250% Level of Engagement The Approach: Results

21. Pattern of Engagement in action: Similar success for additional CPG clients as well as retail, automotive, utilities, travel, pharma, health care. Ideally, POE incorporates all off and online consumer touchpoints. There will be differences in application depending on client objective: CPG – Maybe website/email interaction, but limited or inferred transactional data. Connecting POE to ROI requires mapping to 3rd-party data and/or modeling. eCommerce/Retail – Rich, comprehensive engagement data with a direct connection to purchase. Lead Management/Optimization – May be consumer engagement leading to a one-time or infrequent purchase. POE serves as a predictive, targeting metric focusing marketing budgets on higher converting consumers. Level of Engagement The Approach: Broader Application

22. The Approach: Pattern of Engagement Key Points: Consumer level…not aggregate Longitudinal…not point-in-time snapshot Actionable proxy and metric for relationship strength Quantifiable relationship between engagement and sales (online or off) Enables optimization and ever-improving approach with respect to marketing objectives More gory details available in July edition of the DMA Journal of Analytics: Quantitative assessment of purchase impact attributable to consumer patterns of engagement with online relationship marketing content

23. The Approach: Pattern of Engagement Getting started: START SMALL

24. Trae Clevenger Vice President, Strategy & Innovation trae.clevenger@targetbase.com 972.506.3400 http://www.linkedin.com/in/traeclevenger http://twitter.com/trae1