Digital Alchemy - Event-Based Marketing Whitepaper
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Event Based Marketing:
What You Need To Know
Growing customer relationships and driving revenue by offering products and services to customers
in a relevant and personalised way, at the right time through the customer’s preferred channel is the
holy grail of marketing. Increasingly, organisations are migrating their marketing programs from
product to customer centricity by investing in Event-Based Marketing (EBM). This shift is explained
by the overwhelming outcomes being achieved by EBM, resulting in significant improvements in ROI.
So what is it, how does it work and how can you benefit from it?
Event-Based Marketing (EBM) or Event-Driven Marketing (EDM) is a marketing discipline where
commercial and communication activities are based on relevant and noticeable changes in customer
behaviour. More importantly, Event-Based Marketing (EBM) is a strategic process that combines
with technology to identify and react to significant changes in a customer’s state, turning customer
monologues into value-producing dialogues.
A significant change or event, also known as a trigger, is a valued opportunity to communicate - they
frequently provide a viable, justifiable and effective reason to contact the customer.
For example:
Personal events that signal life-stage or lifestyle changes such as a major purchase, a new job,
change of address, marriage or children reaching college age
Customer complaints and inquiries can offer powerful opportunities when handled well
For financial institutions, events may be large deposits, large transactions, a new zero balance,
or large pay downs
For telecommunications, events can include a change in usage, excessive roaming charges,
or patterns of service disruptions
Let Changes Guide You
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The significance of events or triggers may vary across industries, implying that a range of different
response criteria may be required for organisations from finance to telecommunications, retail to
manufacturing and so on.
Not every noteworthy change in a customer’s circumstances is a useful trigger. Furthermore, what
a customer does not do is often as telling as the actions they do exhibit. Often there are millions of
transactions and events to sift through to find the ones that are meaningful.
Detecting sequences and complex patterns of events and behaviours, i.e. the groupings of current
and historical events in customer data that add to each individual’s behavioural profile, are often
more important than a single event.
After detailed needs-analysis and assessment is completed, the ensuing communication must be
relevant, personalised and channel appropriate. Hence, every component of EBM must integrate
to create a seamless, synergetic effect, capable of delivering results greater than the sum of the
individual parts.
Today, customers are in control of what, when and how they want to be contacted by your
organisation. The reversal of roles is rendering traditional direct marketing methods less effective.
Instead of starting the process by finding a group of people who are likely to be interested in an
offer (product push), marketers now have to listen and wait for the ‘trigger’ and then interpret
the customer’s need. This is when EBM comes to the fore. EBM provides you with the ability to
capture and identify meaningful events, then associate them with the appropriate communication
necessary to generate a relevant, timely, and ongoing dialogue with each individual customer. It is
not surprising that a successful EBM deployment can generate response rates up to 50%.
The More Relevant, The Better
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Significant Improvements
You can benefit from:
Higher response rates
Better Return On Investment
Not only are your customers more receptive to your offer because it is more relevant and timely, but
you can also benefit from reducing your volume of communication.
Total # of
SMS sent
Communication
Type
# of responders
in communication
period
# of messages
per responder
Response
rate to each
communication
Proactive invitation
(sent on 1st
day)
Reminder upon low
Balance threshold
Proactive reminder
(scheduled to
certain day)
350,000
345,000
108,000
6,682
4,389
15,351
53
79
7
2%
1%
14%
source: pantis.com
Not only will more customers respond at a higher rate, but you will also spend less on marketing
because you are offering something that the customer wants, when they want it. That means you
gain more responses and spend less to get each sale.
Figure 1: This study from a European telcommunication company confirmed that the 3rd
message type (trigger-based message) generated
a significantly higher response rate, compared to the 1st
and 2nd
“segment-based’ messages. The number of SMS messages sent were
also greatly reduced.
Improved customer retention
Customers who receive trigger-based communications are less likely to attrite. This is primarily
because of the relevance and timeliness of the contact, resulting in higher customer satisfaction and
in turn, improved retention rates.
Generated 570,00 sales leads representing $4.4 billion in new
business in one year
Achieved greater velocity - initiating 100 distinct campaigns in the first
six months of the year
Achieved the highest share of wallet, customer satisfaction, and
retention rates for high net worth clients
Achieved retention rates of 98.4%
88% of customers said they would recommend the bank to
acquaintances
A leading international bank using EBM:
Achieved 28.7% increase in net profit for the six-month period
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Essential element to customer lifecycle management
Effective lifecycle management starts with being sensitive to a customer’s situation and their position
in the cycle. EBM is an essential element of any Customer Lifecycle program because it involves all
aspects from On-boarding through to Retention.
Relevant proactive contact bolsters customer satisfaction
105
100
No pro-active
contact
Relevant
proactive
contact
Customer Satisfaction (indexed)
Customer stay longer
68
100
No pro-active
contact
Relevant
proactive
contact
Attrition Rate (indexed)
Estimated Response Rates
10x Increase
6x Increase
1%
Traditional
Direct
Marketing
Event
Triggered
Marketing
First Cut
Event
Triggered
Marketing
Refined
Revenue outpaces the traditional approach
450-500
100
Traditional
Direct
Marketing
Event
Triggered
Marketing
Revenue Generated by marketing Programs (indexed)
Figure 2: An EBM strategy deployment can generate higher revenue, improve customer satisfaction and reduce attrition rates, compared with traditional direct marketing
according to Council of Financial Competition
“Gartner research suggests that a trigger-based
campaign can save up to 80% of a traditional
direct mail budget.”
6%
~10%
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Case Study from Nationwide (UK)
(Unica campaign management solution implementation)
Situation:
After bad debts rose in 2007 due to repayment defaults by borrowers and mortgage lending
fell during the recession, Nationwide rethought its CRM strategy.
Outcome:
Achieve more at a lower cost: Nationwide is already seeing cost savings of £300k per year;
the company’s small database marketing team of nine is able to send approximately 600
targeted campaigns per month, an increase of 100 percent
Sales increased and losses improved: sales figures increased more than double over three
years and 18% of loss report was improved
Best practice from a leading telecommunication company cited that
“During an on-boarding phase - from service
activation to month six - they were able to shape
the right-size product for each customer, they also
used triggers which helped to identify and curb
events that would normally lead to churn.”
Solution:
Nationwide developed implemented personalised customer offers through their interaction
touch-points. The integrated CRM system combined with Event-Based Marketing provided a
comprehensive view of each customer relationship. Nationwide also developed event-based
campaigns that detected changes in customer behavioural patterns; when relevant were
indentified they immediately triggered the appropriate cross and up-sell communications. This
helped Nationwide to meet its customer needs and improved customer loyalty.
Higher response rate: event-based direct marketing campaigns now deliver four times more
than traditional segmentation based campaigns
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Requirement for EBM Implementation
You should consider the following conditions before implementing an EBM program:
Client action database
Communication channels
To implement an EBM program you will need to start with a number of accessible triggers. Ultimately
you should aim to capture every interaction that a customer has with your organisation, but start
with what is easy to record and build up a portfolio of proven triggers over time.
Instead of relying on one offering for an extended period of time, EBM requires a library of event-
based triggers, offers and executions that are available for rapid deployment. Make sure your
channels are ready to handle this, you need the capability to mix and match channels to maximise
effectiveness.
Shifting to a series of small day-by-day and customer-by-customer campaigns is not easy. It often
requires your organisation to change the way it works in order to support EBM. Gone are the days of
big campaigns and long development cycles, campaigns need to be developed and executed within
days and weeks, not weeks and months.
Organisation structure
Slow marketing responses to trigger events, caused by a failure to automate the EBM process,
introduces a considerable opportunity cost to the business. Delays in sending out messages can
lead to a significant decline in response rates if a trigger is not executed frequently enough. By the
time customers receive the offer they may have transacted elsewhere because the offer is no longer
relevant. Customer lifestyles are now far more volatile and changeable than previously, automation
with a continuous feedback loop is therefore essential to ensure that offers are delivered while
customers are still in market.
Automation
Effectiveness of contact after an event has been detected
time (days)
effectiveness%
1 2 3 4 5
80%
50%
20%
Figure 3: This research that 60-80% of respondent activity happens within 24-28 hours of detection of
the event because good events occur before the purchase decision
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In conclusion, EBM is a strategic tool that helps leverage the customer information you
posses by turning insights into action. To deliver positive results, EBM requires access to appropriate
technology and marketing automation; the capture, maintenance, manipulation and analysis of
relevant data; well structured marketing planning able to define an integrated communication
framework based on the customer lifecycle with each contact optimised and relevant. When these
components are in place, you can start acting on the different event types, generating a meaningful,
ongoing dialogue and building strong customer relationships that over time will grow your business.
Moving to an automated, high frequency marketing environment increases the risk of over-contacting a
customer.Contactoptimisationwhichisarule-baseddecisionmakingengineshouldbeinplacetoavoid
contact fatigue by ensuring that only the most suitable and profitable offer is delivered to customers.
Contact optimisation
About Digital Alchemy
Digital Alchemy Limited (DA) is Asia Pacific’s leading Database Marketing Services Provider. DA’s
team of professionals are dedicated to working with clients to improve their marketing efficiency
and to capture latent customer value. Established in 2003 and operating in Sydney, Melbourne,
Auckland,Bangkok,HongKong,Nanjing,andSingapore,DAhasbeencontributingtothesuccessofan
expanding breadth of clients including leading companies in financial services, telecommunications,
motoring services, media and other industry sectors.
“This document has been prepared for the purpose of providing general information and should not be relied on in substitution for individual
professional advice. Copyright in this document is owned by Digital Alchemy Consulting Pty Limited, and except as permitted under the Copyright
Act 1968, no part of it may be reproduced by any process, electronic or otherwise, in any material form or transmitted to any other person or stored
electronically in any form without the prior written permission of Digital Alchemy Consulting Pty Limited.”
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Reference Cited
Shu, L. and S. Bell (2002). Real-Time Strategy Process for a Changing World, WP-1102-0007,Gartner
Group.
Daniel Tehan, “Event Based Marketing”,
<http://www.sims.monash.edu.au/subjects/ims5028/resources/Teradata.pdf>
Chris Twogood, “The Power of Event-Based Marketing”,
<http://www.cesconi.com/library/EventBasedmarketing.pdf>
“How Nationwide more than doubled its sales with a new CRM strategy”,
<http://www.utalkmarketing.com/Pages/Article.aspx?ArticleID=14445&Title=How_Nationwide_
more_than_doubled_its_sales_with_a_new_CRM_strategy>