Do's and Don'ts of Data Driven Marketing

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Do’s and Don’ts of Data Driven Marketing
Mike Gualtieri
Principal Analyst Serving Application Development & Delivery Professionals, Forrester
Research
Steve Dille
SVP and Chief Marketing Officer, Message Systems

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Forrester

Big Data Trends And The Future
Of Digital Marketing
Mike Gualtieri, Principal Analyst
November 18, 2014

Firms know that consumers want to be treated
as individuals
“What new customer expectations does your organization face?”
(Check all that apply for each category of customer)
3.8%
26.2%
58.4%
55.8%
55.3%
54.4%
50.6%
47.3%
44.7%
0% 10% 20% 30% 40% 50% 60% 70%
To be treated as individuals
To enjoy their dealings with us more
Easier interactions with us
More information and help from us
To deal with us via their smartphones
Consistent treatment across channels
To be heard by us (give us feedback)
To serve themselves
To interact with other customers
None of these
Base: 423 IT/marketing professionals, Q1 2013; Source: Forrester Research/IBM Customer-Facing Applications Survey Q1, 2013
© 2014 Forrester Research, Inc. Reproduction Prohibited 4

Trend
Consumers want to be treated like royalty.

Royalty experiences have
contextual awareness
and adapt to serve a
single consumer.

Treat consumers like royalty to get
their loyalty.

Quiz
How well do you know this consumer?
› Male
› 35 years old
› Single
› Resides in New York
City
› Makes $100,000 per
year
What do you predict he would do
if the bank accidently transferred
$5,000 into his bank account?
A. Give the money back
B. Take the money and run

“The simple analysis of
aggregated customer interactions
with digital channels is not
enough for firms to truly achieve
personalized marketing”

CRM
Big Data
Personal
Relationships
Mass
Production
One-to-one One-to-many One-to-some One-to-one
Customer Experience

Trend
Big Data means all your data++

Most technology decision makers get it; 30% of
business decision makers are confused.
30%
9% 8%
7%
12%
21%
35% 34%
30%
14%
The term “big data” is very
confusing; not sure what it
means
It’s a bunch of hype with little
substance and few new
ideas
It’s about new technologies
that allow us to handle more
data
It’s an extension of existing
analytics and BI practices
suited for data that is larger
or faster than we are used to
It’s a whole new way of
thinking about the value in
data that requires new
analytics and leverages
some new technologies
Business Decision Makers Technology Decision Makers
Base: 452 North American technology decision-makers
Respondents answering “don’t know” are not shown
Source: Global Data and Analytics Survey, 2014
Base: 249 North American business decision-makers
Respondents answering “don’t know” are not shown
Source: Global Data and Analytics Survey, 2014

Big Data gushes from many sources…
• Data described by a schema
• Clicks, relational database, XML, delimited flat
file, system events
Structured
text
• Free-form text
• Email, documents, tweets, blog comments,
Facebook status, genome
Unstructured
text
• Audio, images, video
• Surveillance cameras, geological survey maps,
Siri voice
Binary

Quiz
What percentage of enterprise data do firms
use for analytics?
A. 12%
B. 34%
C. 53%
D. 76%
Enterprise
Data

Quiz
What percentage of enterprise data do firms
use for analytics?
A. 12%
B. 34%
C. 53%
D. 76%
Enterprise
Data
Source: Forrester Research

110010011011001
010010011011001
010011001101101
010010011011001
Historical
Transactions
Customer data
Ops

A multi-dimensional view of the customer
provides individualized attributes, behavior,
and preferences.

Trend
Predictive models can predict customer
attributes and behavior.

PREDICTIVE Techniques, tools, and technologies that use
data to find models – models that can
anticipate outcomes with a significant
probability of accuracy.
ANALYTICS

Predictive models can have a delightful, multiplicative
effect on the bottom line
Direct Marketing – 1% response rate
Send marketing mail to 1,000,000
$2 x 1,000,000 $2,000,000
customers at cost of $2 per mailing to sell a
$220 service.
1% response rate means 10,000 customer
will buy service
$220 x 10,000 $2,200,000
Profit* $200,000
Predictive Direct Marketing – 3% response rate
Send marketing mail to 250,000 customers
predicted most likely to buy at cost of $2
per mailing to sell a $220 service
$2 x 250,000 $500,000
3% response rate means 7,500 customer
will buy service
$220 x 7,500 $1,650,000
Profit when using a predictive model* $1,150,000
Traditional
Predictive
* Profit calculation does not include other expenses

Predictive models can be very powerful and
profitable, but understand that:
› Predictive models are about probabilities, not absolutes
• E.g. 78% chance you will like Breaking Bad
› Predictive models may not exist for every question
• E.g. Economists, elections, etc…
But, when they work they give your firm an
“unfair” advantage.

Data scientists use a
combination of statistical
and machine learning
algorithms to find
patterns and predictive
models.

What customers are thinking about switching
carriers?
Churn

Predictive analytics is very different from
traditional analytics
Traditional Analytics Predictive Analytics
• Choose a business outcome to improve
• Discuss and decide what data will be relevant
• Develop a data model
• Design reports and dashboards
• Choose business outcome to improve
• Assemble all possible data
• Run algorithms to find relevant data & predictive
model
• Use the predictive model

Recommend
How can you provide a perfect , individualized
product recommendation?

Pitch
What descriptive text attracts buyers, creates
urgency and supports the highest price?

Geo
How can I profit from the differences in
regional shopping behavior?

Talk
What are people saying about products?

Sentiment
How can you listen to customers to measure
share of voice, efficacy, and side effects?

Turkey
How can you predict where customers will be
on Thanksgiving.

Influence
Can you predict what voters will be positively
impacted by campaign (marketing) contact?

Trend
Streaming customer data is flowing by,
and value is slipping away.

Now
Should you make an offer she can’t refuse or
send a gentle nudge?

Activity
How can Spotify use accelerometer data
generated by customers while they listen?

FORRESTER A feeling by a customer that a digital experience offered by a
company knows more about them than they should and is
using that information in a way that makes the customer feel
uncomfortable.
DEFINITION

There is a precarious balance between a
personalized experience and digital creepiness.

“Google policy is to
get right up to the
creepy line and not
cross it”
-Eric Schmidt, Executive Chairman
of Google

Some customers care, some don’t.
Base: 5,012 US Online Adults (18+)
Only 33% of online consumers
will stop shopping at an online
retailer if they knew the retailer
was tracking their behavior.

Customers can react to feelings of digital
creepiness in different ways

Bi-directional digital delivery platform
› Data silos hinder visibility and prevent advanced insights.
› Big Data strains the ability of legacy technology to delivery
personalized digital experiences
› Predictive and streaming analytics capabilities are lacking or
non-existent
› There’s a lack of external and contextual data sources that
enrich customer data.

They are ready.

Now you must get ready by starting a
technology revolution
› Multi-dimensional customer data management
• To understand individual customers
› Predictive analytics regime
• To predict individual customer behavior and attributes
› Streaming analytics
• To capture contextual information in real-time
› Bi-directional digital delivery platform
• To interact with customers and prospects

How personalized, how
contextual, and how
real-time can you make
your marketing?

Thank you
Mike Gualtieri
mgualtieri@forrester.com

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What customer communication channels are you
currently using or do you intend on using in 2015
as part of your big data personalization strategy?
(check all that apply)
A) Email
B) Display advertising
C) Website personalization or recommendations
E) None (we will still be gathering and building our big data)

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Do’s and Dont’s of Implementing
Big Data Driven Marketing
Steve Dille
November 2014
CONFIDENTIAL

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Message Systems Business:
E-Mail Infrastructure
WHO WE ARE Message Systems’ e-mail infrastructure software is the preferred
choice of the world’s best known cloud businesses, e-mail service
providers, telecom companies and large enterprises who depend on e-mail
that is rich, relevant and real-time to drive revenue.
OUR PRESENCE Message Systems customers move over 2.5 trillion messages a year
— more than 20 percent of the world’s legitimate email.
DIFFERENTIATION Flexibility, deliverability and control needed to drive the highest
possible customer engagement and revenue. Unsurpassed
performance and scalability.

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Partial Customer List
Cloud SaaS Marketing Platforms
Carriers Enterprise

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A Few Customers Driving Email With Big Data

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A Big Transition is Happening

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Old School: Campaign Oriented E-Mail Marketing
CRM System ESP E-Mail
LIST
• Campaign Oriented
• Episodic
• Targeting: Segmentation, Batch Blast
METRICS
BATCH
DATA SOURCES
CUSTOMERS
PROSPECTS
CHANNELS

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New School: Big Data-Driven Marketing
E-COMMERCE
HISTORY
SOCIAL
INTERACTIONS
CRM
DEMOGRAPHICS
BIG DATA CHANNELS
Hadoop
Cluster
NODE NODE
NODE NODE
NODE
Predictive
Analytics
• Real-Time, Continuous Engagement, Tight Data Integration
• Targeting: Personalized 1X1, Behavior and Context Driven
CUSTOMERS
PROSPECTS
NODE
GPS Location
Website
Advertising
Email
Mobile
Call Center
Content
Marketing
In Store
Marketing
CLICK STREAM
INTERACTIONS
METRICS
METRICS
CALL RECORDS
INTERACTIONS
POS DATA

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Start with One Channel — Work in Pairs
Hadoop
Cluster
NODE NODE
NODE NODE
NODE
NODE
• Relevant
Targeting
Data
• Analytics
CHANNELS
Email
Website
Advertising
Website
Email
Advertising
Advertising
Email
Website

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Three Observations for Successful Email
• It’s about APIs, analytics and getting emails to the inbox now,
not about the pretty SaaS campaign management UI.
• Real-time detailed data about customer email behavior and responses is
needed.
• Plan for peak volumes with email delivery service performance
commitments.

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APIs and Analytics
NOW:
Predictive Analytics Drive Targeting
& Offers Today
THEN:
Human Targeting via SaaS
Campaign Manager

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What is an API?
• API is an acronym for Application Programming Interface
• An API is a set of programming instructions and standards for accessing a
Web-based software application.
• API's are software-to-software interfaces, not a user interface
As
an end user of a system that uses APIs, applications will talk to each
other through these API's without your knowledge or a need for you to
intervene
• A software company releases its API to the public so that other software
developers can design solutions that are powered by its service

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Important Considerations
• Choice of Analytics
Product
Recommendations
Streaming
Data
Predictive
Analytics
Custom
• Round-trip Data
• Speed of Process
• Delivery Capabilities of the
Sending Engine to ISPs
4 API’s You’ll Need
• Transmission API
• List API
• Template API
• Metrics API
Email
Generation
and Sending
XLS

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Real-Time Detailed Data:
You Cant Improve What You Can’t See
• Email Delivery Data is as important as Web Clickstream Data
• Data is the Key to Analytics and Business Improvement
Revenue
Optimization
Brand
Protection – ISP Blocking & Problem Resolution
Multi-
Channel Engagement

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Why Real-Time?
• In market buyers don’t wait
• Retarget them… NOW!
• Typical ESP data is delayed
and summarized

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Why Detailed Data? — Email Data Done Wrong
Summarized data can obscure insights.

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Why Detailed Data? Email Data Done Right
Hourly details
enable time
delivery
optimization.

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Message Systems Data and Analytics
• Integrated data warehouse and BI tool for ad hoc analysis.
• Sensible and useful standard reports with drill down.
• Accessible details for moving data to other systems.
Data Access Method For When You
Integrated Data Warehouse
and BI Want to analyze email performance in near real time
Web Hooks Stream real-time detailed data for big data analysis
Metrics API Programmatically call and extract the email detailed
data you need
Log File Batch delivery of full detail

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Plan for Peak Volumes — Managed Cloud for
Data Driven Marketers
• Hosted at a Service Provider Site
• Supports thousands of customers
• Often utilizes shared infrastructure
• Suited for information that
is not sensitive
• Slow peak time performance
• Pay by usage
• Standard service
• Hosted at a Service Provider (Amazon)
• Supports one customer
• Does not utilize shared infrastructure
• Suited for information that requires a high level
of security
• Defined peak performance level
• Fixed payment
• Customizable
ESP
Markting Cloud
Message
Systems
Managed Cloud

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Thank You!
Follow us on Twitter:
• @messagesystems
Follow us on Linkedin:
• Message Systems
Visit Us
• www.messagesystems.com
Contact Us
• info@messagesystems.com

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