Part II: Getting Personal with Your Customers — Beyond Segmentation
1. Part II: Getting Personal with Your Customers —
Beyond Segmentation
Part two of a two-part series on automated interactive one-to-one
personalization
SEPTEMBER 2010
2. In the first instalment of this series, “Fight Marketing Fatigue Now,” we
discussed the challenge of improving relevancy and the varying degrees of
personalization that exist within marketing organizations today. We made the
case for a new approach, interactive one-to-one personalization. In this paper,
we discuss how to achieve the related benefits including improved customer
engagement, increased ROMI and measurable business value.
Moving from segmentation to automated One-to-One personalization
“Customer demands Go back ten years and marketers were creating and executing two or three
campaigns a month, delivered through direct mail and call-centers. They had
for relevancy and one message for each segment. They briefed analytics teams a couple of
weeks ahead of each campaign, asking for an export file to be created for each
a concurrent segment. In the meantime, the marketer asked the marketing agency to build
the creative and the design layouts. To launch the campaign, each export file
fragmentation of containing customers belonging to each segment, had to be matched with
each creative containing the relevant message/offer and then sent to the
communication fulfilment house. That was just the process for direct mail. Add the call center
and then email, this process consumed a lot of marketing resources.
channels mean
campaign messages
must be both one-to-
one personalized and
cross-channel
coherent.”
Copyright Neolane 2010
source: Neolane
As shown in the diagram above, the segmentation approach to personalization
delivers the same message to each customer within a segment. Adding more
segments and/or more channels increases complexity and prolongs timescales
and escalates costs.
• According to an independent research report by Forrester Research, Inc.:
“The growing number of marketers enlisting click-based segmentation,
coupled with the low number of marketers using dynamic content in their
mailings, signals that many marketers continue to create distinct mailings
for their segments. This approach can double or, in some instances, triple
production time as compared with creating a dynamic section within the
email template that can automatically deliver the conditional content that
is appropriate for the subscriber.”1
2 SEPTEMBER 2010
3. One-to-One personalization technology
Marketing has changed. Customer demands for relevancy and a concurrent
fragmentation of communication channels mean campaign messages must
be both one-to-one personalized and cross-channel coherent. To meet this
demand using manual processes in an organization with a customer base of
a few hundred would be challenging enough. Above a few hundred and the
complexity multiplies to make manual cross-channel one-to-one
personalization an impossibility.
“The beauty of this
Fortunately, in recent years, marketing automation technologies have made
technology is that cross-channel, one-to-one marketing campaigns not only possible, but ever
easier to do.
it personalizes
But how does it work? Is it really offering a process that’s any different from
each message to those of the past?
the extent afforded The concept behind one-to-one personalization technology, is that instead of
developing a creative and a message for each target segment, you create a
by the information single message template with embedded personalization rules. For each
customer, a set of conditional rules is applied and depending on the level of
held on each customer intelligence held, the message format, product, pricing, images and
call to action is customized.
customer.”
Copyright Neolane 2010
source: Neolane
Using one-to-one personalization technology, marketers simply define the
template and the conditional rules once. Then they press ‘go.’ For every
customer or prospect, the technology application gathers all the necessary
information from the marketing database and adapts the message accordingly.
The beauty of this technology is that it personalizes each message to the
extent afforded by the information held on each customer. Of course
sometimes there might be insufficient customer insight to personalize a field
in a template, and for such circumstances, marketers can define a ‘default’
message.
3 SEPTEMBER 2010
4. One-to-one personalization technology is derived from email personalization.
But, if you choose your solution wisely, it will extend to every channel in your
marketing mix. The single-template-per-campaign concept can then be
extended to become one template per cross-channel campaign. The same
personalization rules are used, however the content is formatted differently per
channel. For example, SMS and direct mail may be different channels, but the
personalization rule ‘10% off if customer is a gold card holder’ remains the
same.
“Industry
experience
suggests an offer
presented during
an inbound contact
is 2-3 more times
as likely to be
taken up than if
that same offer is
made to the same
person via an
Copyright Neolane 2010
outbound source: Neolane
One-to-one personalization: one message per recipient,
managed cross-channel.
communication.”
Selecting the right solution
The selected automation solution should be able to utilize socio-geographic
profiles, the wealth of existing customer data that already exists across the
organization, and enable marketers to capture every customer’s ongoing needs
and preferences observed through purchases, behavioral tracking and on-line
surveys. It should also collect data from across campaign channels and
support the creation and growth of a single, centralized, cross-channel (direct
mail, email, mobile messaging, contact center and social media) customer
datamart – a living marketing single customer view (SCV) that becomes more
accurate and offers ever more detail as customers interact over time.
From the SCV, the solution should be able to propose optimized, individualized
messages per customer – one-to-one communication. The solution should be
able to render potentially one different message per customer in appropriate
channels, such as email, print, mobile message and/or personalized web page.
It must be able to do this in real-time if required, exhibiting consistency and
coherency across multiple channels, outbound and inbound – to present the
right offer to the right person via the right channel at the right time.
4 SEPTEMBER 2010
5. Key functionality (outbound campaigns)
Some of the key marketing processes that a one-to-one, cross channel
marketing automation solution should enable an organization to support
include:
• One-to-one personalization of every element of every message: These
elements should include template ‘look & feel’ and branding – as well as
content such as customer name, editorial text, language preference,
“Measurable product offer, image selection, pricing, partner offers and more.
benefits accrue in • Event-triggered campaigns: For every individual there will be life events
(e.g., birthday, wedding anniversary), events of a transactional history
multiple areas – nature (annual renewal of guarantee opportunity, replacement of
consumables, end of product life replacement) or behavioral events
from long-term (campaign response, web site login and browse). These can all be used
to trigger a personalized offer. Such intelligence should not be siloed to a
revenue increases single channel.
to reduced costs • Transactional marketing: It should be possible to add one-to-one
personalized marketing messages to transactional communications,
and improved brand such as order confirmations and statements.
• Social marketing: The one-to-one personalization of content delivered via
perception with Twitter, Facebook and other social applications if the customer chooses to
opt-in to those channels for marketing messages.
customers.”
• Offer a centralized offer repository in order to share consistent offers across
all channels.
• Provide ‘closed loop’ processes where customer responses (or non-
responses) update the profile intelligence of the marketing SCV.
Extending automation to include inbound marketing
Industry experience suggests an offer presented during an inbound contact
(via the web, ATM, contact center, point of sale, or social media for example)
is 2-3 more times as likely to be taken up than if that same offer is made to the
same person via an outbound communication.
But there is a danger here. Using inbound contact to then suggest an offer that
is in fact poorly tailored to the customer‘s needs and interests can be received
as an annoyance harming the customer experience. Equally there lies the
danger of damaging the customer experience.
In selecting an automation solution, it is therefore very important that an
organization considers whether automation would benefit its inbound as
well as its outbound marketing. Marketers call this integrated approach
“Outbound/inbound Fusion.”
Outbound/inbound fusion examples
• Web: suppose you launch an email campaign. A customer or a prospect
receives the personalized offer, clicks on a link and is taken to your website.
Your marketing automation solution should recognize this event in real time
and should present to the web site the most appropriate message for that
customer, related to the offer promoted in the email.
• Social marketing: suppose you launch a cross-channel campaign to
promote one of your products. Using one-to-one personalization, you've
5 SEPTEMBER 2010
6. fully personalized emails, direct mails and SMS with individual promotions,
additional products, etc. Let’s say that in the meantime one of your target
customers starts to follow your company on Twitter. The marketing
automation solution should have the capability to automatically send to this
customer a direct message, perhaps with a link to download a personalized
coupon linked to the campaign you’ve just launched.
Technology for outbound/inbound fusion
“Designing an Where outbound/inbound fusion is required, the marketing automation
solution should:
appropriate one-to-
• Enable real-time matching of the customer with the marketing SCV using
one marketing email, phone number, name and address, customer number or other unique
identifier
personalization
• Use an offers catalog and rule engine to immediately select the best offer,
process and personalized for that customer’s real-time circumstances and historical
profile
implementing it • Present the offer via the inbound channel in use, the customer service
representative and/or as a follow-up via an outbound mechanism if
successfully appropriate
requires a thorough • Pass the offer and the customer’s response to the marketing SCV to ensure
future campaign relevancy
understanding of
It should be noted that some cross-channel marketing campaign automation
objectives, the role solutions only cover outbound channels. Outbound/inbound fusion is
becoming mandatory, at least for inbound web activity. Even if you are
of people and planning to explore it at a later date, it’s important to select from the outset a
solution that is capable of such fusion.
processes, as well
What benefits to expect?
as technology.” One-to-one personalization has the power to improve customer engagement
and ROMI. Measurable benefits accrue in multiple areas – from long-term
revenue increases to reduced costs and improved brand perception with
customers.
Potential benefits will depend upon the nature of the business, the marketing
automation solution chosen, and how it is applied. Typical expectations for
business benefit include:
• Improved sales and marketing metrics: one-to-one outbound and
outbound/inbound fusion supports improved response and conversion
rates of direct mail, email and mobile campaigns, as well as web site and
social messages or offers. Up-sell and cross-sell revenues too can be
expected to increase since offer suggestions will resonate better.
• Higher marketing productivity: one-to-one personalized messages can
deliver greater results for less effort and expense than mass, or segmented
campaigns. Costs reductions can be significant where cross-channel
automation replaces channel separated/siloed approaches.
• Loyalty and brand recognition: The risk of campaigns missing the mark and
frustrating the customer is reduced. Contents tailored to customers’ needs
will catch customers’ interests. Even if the customer does not want to buy
6 SEPTEMBER 2010
7. the product promoted, they’re less likely to be aggravated by the offer. A
better customer experience means higher retention and lifetime revenue.
• Greater agility: In an ever changing marketing world, marketing automation
can enable marketers to adapt their strategies quickly.
Some considerations
With change there is always an element of risk and this should be considered
“Neolane enables in a switch from mass or segmented marketing to one-to-one marketing
automation.
us to run many
• The marketing organization must be culturally accepting of the change and
thousands of mini increased use of marketing technology. Most already employ staff who are
data-driven and tech-savvy (at least from a user perspective). But
campaigns, tightly engagement and training will be important, since shifting to one-to-one
personalization is a big change in cultural habit.
targeted to our • Not all solutions are really cross-channel and not all are able to support
outbound/inbound fusion. The number of channels, or contacts points, is
customers’ holiday exploding. Not only should you consider direct mail, email, mobile, web but
you should also ensure the solution you choose enables personalization
preferences, and consistency across social media and mobile phone applications for
example.
stimulating interest,
• Not all solutions have been built ‘from the ground-up’ to provide a single,
interaction and real-time application and interface for cross-channel campaigns. Some are
multiple, often acquired applications, that have been integrated with
bookings.” varying degrees of stability. Some cannot provide a single, cross-channel
offers catalog or ensure coherent cross-channel personalization. Others
cannot enable workflow to be managed cross-channel from a single
centralized point of control.
Raymond Howe, manager,
Bales’ Marketing • Consumers are sensitive to how their private information and personal data
Communications is used. If you implement a marketing automation solution, which of
necessity builds a personal view of each individual, then you’ll need to be
certain that customer authorizations are correctly obtained and that strict
data privacy can be assured.
The key to success is careful planning. Designing an appropriate one-to-one
marketing personalization process and implementing it successfully requires a
thorough understanding of objectives, the role of people and processes, as
well as technology.
Case Studies
Bales Worldwide doubles response rates
The 70,000 customers of tour operator Bales Worldwide have a range of
preferences when it comes to the location, type and timing of their holidays.
“We redefined our go-to-market strategy, switching our emphasis from travel
agencies to direct sales,” said Bales’ marketing communications manager,
Raymond Howe. ”A smart customer communications process became
mission critical for us.”
Bales determined that it needed automated marketing campaign software.
Knowing that relevancy is essential to successful campaigns, it also wanted
content to be personalized cross-channel to reflect each customer’s interests
and recent interactions.
7 SEPTEMBER 2010
8. Bales selected Neolane’s enterprise marketing automation software.
“Today, new data is added automatically by Neolane to customers’ records in
the datamart as they interact with us or request brochures from 3rd party
sites – constantly building and refining profiles,” said Howe. “Neolane
enables us to run many thousands of mini campaigns, tightly targeted to our
customers’ holiday preferences, stimulating interest, interaction and
bookings.”
“With change there
Results included:
is always an • Opening rates rose on average from approximately 20% for standard
emails2 to 46%for personalized content3 to more than 56% when inferred
element of risk and preferences4 were used to determine content.
this should be • Click throughs rose from 8% to 29% to 41%.
considered in a • Reactivity climbed from 24% to 38% to 49%.
switch from mass • Response rates on brochure mailings tripled when content was
personalized to accommodate historical and inferred client data.
or segmented • Sales improved by 5%.
marketing to one-
Accor Hotels doubles reactivity
to-one marketing Accor is the European leader and one of the world's largest groups in travel,
tourism and corporate services. It has over 4000 hotels worldwide. All
automation.” Seasons, Dorint, Sofitel, Novotel, Mercure, Suite Hotel, Etap Hotel and
Formule 1 are just a few of Accor’s brands.
“Online relationship marketing is an important, but complex activity for us,”
said Accor Hotels’ marketing manager. “We have several hotel brands and
offer online communications in up to five languages to subscribers across 15
target zones. We also run six different loyalty and subscription cards.”
Recognizing that one-to-one personalization was essential to ensure
relevancy as well as brand management, loyalty and subscription card
memberships and subscriber language preferences, Accor implemented
Neolane.
Results included:
• 20 million+ messages are sent to customers annually in multiple
languages.
• Reactivity to emails climbed from 15% to 30%.
• Online revenue is up $200 million per year.
• 35 percent of newsletter subscribers were influenced in booking a room
by the personalized communications they had received.
• Campaign development times reduced by 50% saving some $215,000
per year.
8 SEPTEMBER 2010
9. Meetic boosts email campaigns
Meetic is the European leader in online dating with more than 840,000
subscribers (2009). Present in 16 countries and offering its service in 13
languages, brands such as Dating Direct, Match.com, Neu and Lexa are all
part of the group.
The company sent out 3-5 million triggered emails a day to registered users,
in addition to its outbound marketing campaigns. The problem – those
“The team realized messages were coming from two separate, uncoordinated platforms. They
used one system for promotional emails and another one for the automated
that coordinating system alerts triggered by member activity on the site.
their triggered “We couldn’t see the whole picture of which campaigns a member received,”
said a spokesperson.
email and
The team realized that coordinating their triggered email and outbound
outbound promotional campaigns could provide more relevant, personalized messages,
while managing the volume of email each user received. They wanted to
promotional align triggered and promotional emails toward the main goals of attracting
and retaining customers, while improving customer satisfaction with email
campaigns could communications.
Meetic implemented Neolane to manage both promotional emails and alert
provide more emails.
relevant, Coordinating their outbound promotions and triggered email campaigns has
made the team’s life much simpler – and improved the performance of those
personalized campaigns.
messages, while “Because we can make more tests and understand the performance of each
campaign, we’ve seen an overall improvement in our marketing programs,”
managing the said the company.
volume of Results included:
For the automated welcome series:
email each user
• Open rates range from 35% to 45%.
received.”
• Clickthrough rates range from 2% to 20%.
For the triggered alert emails:
• Open rates average 40%.
• Clickthrough rates average 12%.
Additionally two further metrics have given great encouragement to the
marketing team:
• Email deliverability has improved from approximately 80% to 99%.
• Email conversion rates have improved by 10%.
9 SEPTEMBER 2010
10. Time to act
Gone are the days where the status quo was good enough – the demands for
change are such that marketers must surely give serious consideration to one-
to-one personalization or risk being left behind. What all of these findings point
to is the fact that marketing organizations making the move to one-to-one
marketing now, have the potential to respond better to customer expectations
and stem the fall in their own response rates and ROMI. They also have the
opportunity to take a competitive leap forward by reducing churn, retaining
customers for longer and increasing customer spend over time.
Neolane can help your organization leverage one-to-one personalized
marketing to help you improve customer engagement, drive up ROMI and
deliver measurable value to your business. To learn more, contact Neolane
at 617-467-6760 or visit www.neolane.com.
About Neolane
Neolane provides the only enterprise marketing software specifically designed to
manage, automate and optimize programs across traditional and emerging
channels including direct mail, email and mobile. With Neolane’s cross-channel
marketing and lead management solutions, marketers can manage campaigns,
resources, customer data and analytics from a single platform to dramatically
improve effectiveness and ROI. Built by marketers for marketers, Neolane is used
by more than 240 of the world’s leading companies including Accor Hotels,
Alcatel-Lucent, Orange, and Sephora.
1 “The ROI Of Email Relevance, 2009,” Forrester Research, Inc., September, 2009
2 Standard email content used no personal preference data
3 Personalized content was determined by historical client data
4 Inferred content was gathered from web visits following responses to an earlier email
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This research brief is for informational purposes only. Neolane, Inc. makes no warranties, expressed or implied, in
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herein are the property of their respective owners.
10 SEPTEMBER 2010