A presentation to the MAtes of Melbourne, IT Dees group on how organisations can use their data combined with social media to drive profitability

1. Drive Profitability In Your Organisation with Data and Social Strategies Mates of Melbourne , 15th April 2011 Phillip Dooley and Fergal Coleman Twitter @symphony3think www.symphony3.com/MOM www.symphony3.com

2. Business Dimensions People Needs Why We Exist (What we offer) Financial Sustainability How We do It (Our Departments or Functions) Building Blocks (IT, Data, Standards, People etc)

3. Stages of Communication People Needs Above the line advertising is telling people what they need en mass. Below the line activity is individually telling them what they need. Smart analysis understands their needs from their behaviour Social media is where they proactively tell us what they want. All we have to do is listen. Why We Exist (What we offer)

4. What does address tell us? Map your customers or members and compare them to external datasets

5. What does their address tell us?

6. Birds of a feather flock together

7. An example of a future market - Cemetery

8. What does address tell us? We can predict behaviour by address. The likelihood of joining a footy club. The likelihood of becoming a customer. Areas where we should have more customers.

9. We can work out the probability of being a club member

10. 5-9 year olds in house and a club supporter

11. Probability of being a member and spending on a product

12. Auto Sponsor Potential… (example only) High density, top 10% car spend, close to Dealer

13. What does behaviour tell us? Do you know when and what they spend – loyalty club? Do you know when they attend - Turnstile Data

14. Market Penetration

16. 17 How Does RFM work ? R stands for Recency which is the most powerful predictor of customer response. People who have just bought from you are much more likely to respond to a new offer than people who brought from you a long time ago.

17. 18 How Does RFM work ? F stands for Frequency. Which has been defined as the number of times that a customer has made a purchase from you. Frequent buyers respond better than infrequent buyers.

18. 19 How Does RFM work ? M stands for MonetaryAnalysis It involves categorizing all customers by the total amount that they have purchased (per month, year) and sorting all customers by that amount.

19. 20 Break even per RFM Cell This slide highlights the breakeven point for a mail out.

20. RFM principals can tell us: Which customers will leave in the future. Which customers will buy even without marketing. Which customers are becoming more loyal Which customers are becoming less loyal WE used RFM principals to predict which club members would not renew their membership The principals worked backwards but was still highly reliable

21. Likelihood to not renew membership in 12 months time Score Identifies At Risk Members 100% 80% 60% % that rejoin 40% % that leave 20% 0% 1 2 3 4 5 6 7 8 9 10 Member Retention/Churn Segments

22. How do we know it works We allocated a score from 1 to 10 to the whole club. We kept half of the 1’s as a control group. We sent the other half a “Thank you” letter. We didn’t sell or ask for any money We concentrated on building a sense of community We looked at who did not renew 12 months later. The renewal rate for the group approximately doubled when compared to the control group. WE used similar principals to increase profit from a raffle ticket campaign by 38%

23. Smart analysis understands their needs from their behaviour People Needs – Which need does footy meet HIGHER ATTENDANCE Entertainment and Spectacle Ritual and Ceremony HIGH CLUB LOYALTY Escape Experience DON’T CARE WHO WINS Personal Identification Aesthetic Pleasure Cultural Integration (A sense of belonging)

24. Smart analysis understands their needs from their behaviour People Needs – Which need does footy meet HIGHER ATTENDANCE Only Attend nominated club >3 matches Attends own plus less other clubs Attends more other clubs than own club DON’T CARE WHO WINS Attend Own Team 3 or less times HIGH CLUB LOYALTY Occasionally go anywhere No Attendance

25. What can we do with this?: We match the product to peoples needs. We run focus groups for each segment. Not all of our members appreciate a free scarf and beanie. A small thank you goes a long way. How has it changed the product ? Close spectacular games are as important as who plays. Big crowds create more big crowds. We have a club with no team?

26. Online Community Feedback

27. Revolution “Every generation needs a new revolution.” Thomas Jefferson We are witnessing multiple revolutions right now… “Revolution doesn’t happen when society adopts new technology, it happens when society adopts new behaviours “ Prof. Clay Shirky author “Here Comes Everybody”

28. Expectations of Organisations Are Changing “In the past we (local government) told the community what we were doing, we have now evolved to engaging the community in what we propose to do, but the expectation of the community today is that not only will they be engaged but they will directly influence and they will have control over what happens. This is not an unreasonable expectation.” John Nevins, CEO, City of Kingston.

29. What is Social Media (and Web 2.0) Social media is based on the integrations/conversations between different people online and for organisations to become part of this they need to move from a monologue to a dialogue Technology is merely the conduit for people to: Create Connect Collaborate React Organise

30. Changing Behaviours!

31. Why Engage? The pay back comes quickly “Companies using the web intensively gain greater market shares and higher margins” - “The Rise of the networked enterprise: Web2.0 finds its payday” – McKinsey Quarterly Dec. 2010 Some averages from report 20% decrease in travel costs 20% improvement in marketing effectiveness 10% reduction in operational costs 15% decrease in marketing costs 18% increase in customer satisfaction 41% increase in employee satisfaction

32. Revolutions can be scary!

33. No wonder it’s daunting!

34. Think about what people do People Creating – Blogs, (blogosphere) user generated content, Podcasts, Youtube, Slideshare.net, Docstoc. People Connecting – Facebook, Linkedin, Twitter, Myspace, Bebo, Orkut, hi5, Secondlife, Foursquare. People Collaborating – Wikis (wikipedia), Intelpedia (internal use), Bearing Point (Mike2.0), Salesforce chatter, Centraldesktop, Sharepoint. People Reacting – Forums, discussion boards, ratings, reviews. People Organising – tags, Digg, De.licio.us. Accelerating Consumption – RSS, Widgets. Forrester

35. The Social Technographics Ladder Groups include people participating in at least one of the activities monthly except Conversationalists who participate in at least one of the included activities at least weekly. Inactives neither create nor consume social content of any kind

38. 7 people = 350,000,000 Picked seven bloggers to attend a top secret “Midnight Webcast” They told tens of thousands of fans Mainstream media listened and reported Estimated 350 million people heard the news within 24 hours Is this the future? 2008 Who are the influencers in your industry?

39. What are your Objectives 1. Listening – Use social media to better research community and customer needs. 2. Talking – Use social media to spread messages about your organisation. 3. Energising – get your most enthusiastic customers to become advocates , using social media to increase word of mouth. 4. Supporting – Support customers or help them to support each other. 5. Embracing – Integrate your customers into the way your organisation works

40. Case Study: Kingston City Council “In the past we (local government) told the community what we were doing, we have now evolved to engaging the community in what we propose to do, but the expectation of the community today is that not only will they be engaged but they will directly influence and they will have control over what happens. This is not an unreasonable expectation.” John Nevins, CEO, City of Kingston.

41. Getting Started? What do you need Leadership commitment and vision“Social Media in everything we do” Open up to new technologies and to change behaviours Commitment to loss of control Get Started! Have a Strategy/Framework

42. Social Media Framework Logical Boxes People Needs Who are you Serving? Where are they? What Drives them to Engage with you? Residents Local Business Employees Residents Local Businesses Employees Why We Exist Mission Vision Core Values Strategic Goals Financial Sustainability Improved Customer Service – more support at no additional cost More Efficient Processes Lower Costs How We do It Communicate Make (Services delivered) Listening Talking (Informing) Supporting Supporting Activities Energising/engaging Building Blocks Technology (Tools) Finance (Budget) People (internal) Leadership Culture Skills +Training Standards & Policies Social Media Policy Response Guide Risk Mgmt 43 Data and Information

43. Coming soon or in prototype… LinkedIN CEO Blog Ning Policy Response Guide Mayoral Blog YouTube/Video Skype/Ipads/Iphones Twitter Wikis Yammer Department specific - strategies Training, awareness and more training!

45. Community feedback and engagement

47. Next Step: www.Communityeffect.net Community Fully Engaged and Participating

48. Conclusion Social Media is….. Strategic use of Facebook and Twitter and a whole lot more A technology-enabled conversation with the whole community An enabler: It will allow you to reach your community much more effectively Embrace it strategically Integrate it into your day to day operations Get Engaged!

49. Your thoughts or questions?? What are your experiences? Questions? www.symphony3.com/MOM Facebook.com/symphony3 Twitter @symphony3think