the rise of the platform marketer: connected crm in a digital world

© 2014 Merkle. All Rights Reserved. Confidential

The Rise of the Platform Marketer: Connected CRM in a Digital World

2014 Chief Marketing Officer Leadership Forum


The marketing landscape is changing


Marketers can again create long-term sustainable advantage by focusing on the customer

1950s+Age of brand

1995+Age of channel

2013+Age of the customer

Direct-to-consumer business model transformation

Addressability At ScaleCreation of national brands

National media and mass marketing

Internet and eCommerce

Social networks & digital media

Contenders we see

3


Migration of the consumer from offline to online has hit an inflection point and is disrupting the entire consumer experience

2008

7.0——

6.5 —

6.0——

5.5 —

5.0——

4.5 —

4.0——

3.5 —

3.0——

2.5 —

2.0——

1.5 —

1.0 ——

0.5 —

2008-2013Social media 0.1 to 1.1

Digital content 1.7 to 2.4

Consumer hours spent per day on non-digital channels are decreasing,

while use of digital channels are steadily increasing

Hours

2008-2013TV 3.8 to 3.1Radio1.6 to 1.4Print 0.7 to 0.4

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

4


Customer strategy is fundamentally built on a consumer experience

Media Targeting

Channel Personalization

Omni-channel Integration

Distribution

Product

Service

Ope

ratin

g M

odel

Cha

nge

Min

imal

Sign

ifica

ntTr

ansf

orm

ativ

eCom

petitive Advantage

AverageAbove Average

Market Disrupting

Utilization of data and analytics to drive efficiencies in targeting addressable media at the segment or individual level

Utilization of data/analytics to personalize the media and channel experience for the consumer at the segment or individual level

Delivery of not only targeted/personalized experiences at individual points in time but across a longitudinal, cross channel experience

Introduction of new and innovative methods of distribution products/services either direct to consumers or through new forms of intermediaries

Introduction of new/innovative products/services, features, or pricing that fundamentally change the consumer experience

Introduction of new/innovative methods to deliver the product experience and service to customers through new technologies or channels

Utilization of data and analytics to drive efficiencies in targeting addressable media at the segment or individual level

Utilization of data/analytics to personalize the media and channel experience for the consumer at the segment or individual level

Delivery of not only targeted/personalized experiences at individual points in time but across a longitudinal, cross channel experience

Introduction of new and innovative methods of distribution products/services either direct to consumers or through new forms of intermediaries

Introduction of new/innovative products/services, features, or pricing that fundamentally change the consumer experience

Introduction of new/innovative methods to deliver the product experience and service to customers through new technologies or channels

5


Addressability at scale is changing how we can engage consumers


The emerging opportunity in Addressability At Scale (AAS) is the key driver of competitive advantage in the age of the customer

Addressability at scale (AAS) is defined as the opportunity to create competitive advantage through the ability to deliver targeted, personalized experiences to consumers.

AAS 5.0Person ID

AAS 1.0Name & Address

AAS 2.0Phone #

AAS 3.0Email Address

AAS 4.0Cookie & Device ID

1990 2014

The merchant opportunity lies in addressability and the enablement of data and analytics

The digital audience platform marketplace that is now at massive scale

7


Amidst all of this scale and automation, the addressability of channels and media is increasing every day

The Addressability Spectrum

Anonymous Partially Identified Identified

Unknown Some Knowledge Well KnownKnowledge:

Identification:

Addressability uses customer data (anonymous or identified) to increase the targetability and relevance of marketing impressions and experiences

8


1st party data will be a key differentiator


The core enabler of addressable marketing is the connected customer view

• Consolidated view of the consumer across all touchpoints

• Allows clients to analyze their programs in context of the whole picture

• Valuable insights on consumer value, attitudes, and behaviors

• Attribution – provides foundation for effective measurement

• Multi-media, multi-channel optimization based on facts

Social

Print

Direct Mail

Display

Search TV/Video

Mobile

Site

Product

LTV Segment

Demographics

Life Events

Call center

Meetings

Email

10


Addressable Platforms

The marketing database is a critical asset in driving relevant and personalized experience

An Audience Platform is a digital technology that enables automated, targeted, personalized experiences to individuals (known and anonymous)

at scale utilizing first and/or third party data

Customers

1st Party Data

3rd

Party Data

CRM Database


Competitive advantage will live in the addressable consumer experience


The addressability battle will be fought in the Mid Funnel

Awareness

Consideration

Engagement

Conversion

Commerce

Experience

Unqualified leads & waste

Upper Funnel

Mid Funnel

Lower Funnel

Media Focused

Channel Focused

CRM Focused

Unknown

High-value customer

Low-value customer

Unknown

High-value customer

Low-value customer

13


Customer Remarketing

Audience 1 Audience 2 Audience 3

Addressability is fundamentally changing the role of how 1st party data is used in media targeting.

And effecting the ability to create a personalized and optimized channel experience.

Awareness

Consideration

Engagement

Conversion

Commerce

Experience

With that in mind we need to rethink the boundaries of the Mid Funnel

Expanding the mid level opportunityCRM

Channel

Optimization

Unknown

High-value customer

Low-value customer

Unknown

High-value customer

Low-value customer

Performance Media

Brand Media

14


Business Impact

Available Addressable Impressions+400%Addressable Media Spend:+300%Cost Per Lead:-30-40%Targetable Re-Marketing Pool+500%

Cost-Per-Conversion:-40%Average LTV per Customer:+60%

% Personalized Interactions+300%

Taking advantage of addressability is about “widening the pipe” and driving greater scale and efficiency

Unknown

High-value customer

Low-value customer

Unknown

High-value customer

Low-value customer

The funnel is widening and elongating

Customer Remarketing

Audience 1 Audience 2 Audience 3

CRM

Channel

Optimization

Performance Media

Brand Media

CRM

Channel

Optimization

Performance Media

Brand Media

15


But creating these experiences will not be easy


The Addressable Experience requires the 3C’s

CONTEXT

Our applied knowledge of the consumer

Every asset we have to put in front of the consumer

CONTENTCONNECTIVITY

When we bringthe two together

in media and channels

17


Allowing us to deliver Addressable Customer Experiences

Timing / frequency Platform

Device / format

Segment

A

Segment

C

Segment

D

Segment Lifecycle

Awareness

Product Consideration

Request a Quote

Start Application

Process

CONTEXT

Message Offer

CONTENT

Treatment

Segment

BBrand

Consideration

Segment

BBrand

Consideration

4X

Google

Mobile A

1

Life

CONNECTIVITY

18


A new operating model and competencies will be required


Connected CRM is the framework through which we aid our clients in the organizational transformation required to exploit Addressability

The Connected CRM Framework (CCF)Enterprise segmentation, which includes value and lifecycle

dimensions, forms the foundation of CCF

Experience Delivery

Financial Management

Customer Strategy

Financial management informs customer strategy and experience delivery decisions as a closed loop process

These strategies are then translated into actionable media and channel plans that result in highly personalized, targeted experiences

Portfolio Strategy

Segment Strategy Program Strategy

Experience delivery performance is continuously attributed across media and channels which, in turn, drives optimized budget allocation

Media Planning Channel PlanningTargeting & Personalization

Measurement & Attribution

Budget Allocation Infra

stru

ctur

e &

Bus

ines

s Pro

cess Leadership &

Organization

What data, processes, systems, tools and

technology will be

necessary?

What outcomes

are we trying to

create and how do we organize to

enable them?

20


The Platform Marketer™ embodies the collective competencies needed to successfully exploit addressability at scale

Marketers must evaluate their own competency level and decide how best to fill gaps internally and with external expertise

In the highly digitized world of AAS, a new set of competencies must be attained by the marketer

We call the personification of those collective skills The Platform Marketer

While new processes, data, and technologies must be implemented (what we call Connected CRM), these digital platform competencies must first be addressed

j

Identity Management

Audience Management

Consumer Privacy &

Compliance

Media Optimization

Platforms Utilization

Channel Optimization

Experience Design &Creation

Measurement and attribution

Marketing Technology

21


A new set of technology assets will be required


The landscape has gotten very complex

Platform marketers has strong expertise in state of the art and emerging marketing technology and how it drives business value

2323


Therefore, we must rationalize the tech stack to support an addressable customer experience

Audience Platforms

Wor

kflo

w

Channel ExecutionMedia Execution

Marketing Database

Identity Management

Application Integration

DSP SearchAd Serving Site SFA/Contact Center

Business Rules Engine

Personalization Engine

Decisioning Algorithms

Audience Management

Real-Time Data Transfer

Syndication

Connected Attribution

Forecasting/Simulation

Business Intelligence

Onboarding CDI/DDI Event Management

Customer 360° Preference Center Event StreamCam

paig

n M

anag

emen

tC

onte

nt M

anag

emen

tM

RM Messaging Mobile

Web Services APIs Tag Management

Analytic Management Platform

Data Management Platform

Decision Management Platform

24


Organizing around the customer can be difficult


Evolving the capability and operating model together as a key driver of success

Operating Model

Infrastructure focus, basic capabilities

Single campaign, simple data, little offer and

customer customization

Basic multi-channel, model integration, and campaign

automation

Contact Optimization, multi-touch campaigns, integrated

measurement platform

Customer Value Optimizationfully integrated programs &

campaigns

Cap

abili

ty M

atur

ity

Ideal investment zone [Key decision maker]

Level 1

Level 3

Level 4

Level 5

Level 2

Over-invested (poor return on capital)

Under-invested (poor return on management bandwidth)

Bottom-up path builds infrastructure and seeks to leverage incremental gains to expand effort and drive organizational change

(requires permission)

Top-down path compels Organizational change and

rapidlyenables infrastructure for

efficiency and effectiveness(requires sponsorship)

26


But generally a phased approach will create the best outcome

• Streamlined campaigns

• Recommender system enables 1-to-1

• Name/address hygiene

• All addressable media

• Web data integration

• Two way interaction

• Real-time integration

• Real-time Two way interaction

• Store & POS integration

• Call center integration

• Media & Marketing Mix

• Segmentation alignment

• Addressable TV

Offline Channel

Integration

Digital Channels

IntegrationMass MediaIntegrationDigital

MediaIntegrationEmail and

DM

Phase1

Phase2

Phase3

Phase4

Phase5

FullyIntegratedExperience

Connected CRM

Platform

27


And the benefits can be rewarding


For most organizations, the impact of effective cCRM can be quite rewarding to both margin and growth

$39MM $104MM $201MM $452MMNPV of Revenue Impact

Year 1 Year 2 Year 3 Years 4+

Acquisition of new customers

Reduction in churn

Improvement in NPS Scores

over Baseline*

$15MM $43MM $93MM $256MM

$24MM $61MM $109MM $196MM

+5 +25 +10 +5

• Use Connected data to understand/predict/model NPS results across subscriber base and target subscribers for Promoter maintenance or Detractor intervention strategies

• Roughly 1bp (~31k subs) reduction in Voluntary Churn YoY over next 5 years• Combine Customer service, Billing contacts with customer data to improve churn rates

• 1%-3% increase in customer acquisition over 5 years• Increased response/conversion from digital media efficiency by connecting Anonymous

Data to CRM data for better targeting, measurement and segmentation• Increased effectiveness of remarketing and personalization (offer/package) in Search,

Display, Site and Email

29


Thank YouDavid WilliamsCEOMerkle

[email protected]

the rise of the platform marketer: connected crm in a digital world

Marketing

consumer hours

new technologies

newinnovative productsservices

addressable media

product experience

individual points

individual leveldelivery

social media