Implementing Trigger-based Marketing to Drive Customer Loyalty

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info@genroe.com www.genroe.com

@Genroe

Adam Ramshaw Director aramshaw@genroe.com Genroe (Australia) Pty Ltd

Customer Loyalty Management

2

LISTEN

• Understand

what your customers want

• Measure how well are you delivering

ACT

• Implement

INITIATE

• Assess current

approaches and capabilities

• Engage the organisation

UNDERSTAND

• Analyse the

data to identify Customer Loyalty Drivers

• Calculate the Incremental Value of Opportunities

DESIGN

• Plan the

required initiatives • Holistic; or • Specific

• Target the

highest value changes to the business

We help our clients to generate more value from

their existing customers.

First some context

• What we’re talking about today

– Trigger based marketing

– Event driven marketing

– Event based marketing

• Context

– Pre-sale

• Acquisition and Inbound marketing

– Lead nurturing

– Post-Sale

• Customer management

– Retention

– Up-sell

– Cross-sell

Today

• Value Proposition

– The value can you expect to drive within your organisation by implementing trigger-based marketing

• Getting Started

– The tools, processes, skills and approaches you need to be successful

– The first steps you need to take to start making change in your business

• Critical Success Factors

– The factors that will drive your long term success

• Roadblocks

– The roadblocks (real and perceived) to overcome in order to be successful

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Event based marketing is more effective

EBM programs are typically 2 to 12 times more effective than traditional direct marketing programs.

5 Source: http://www.customerthink.com/article/event_based_marketing_banks_changes_behavior

How much more effective…

• OCBC Bank

– Customer acquisition

• EBM campaigns have achieved conversion rates of up to 45%.

– Customer Satisfaction

• One service event with SMS support increased customer satisfaction by 20% over the control

• FBTO (Dutch insurance company)

– Website visitors that calculated premiums but did not purchase were outbound contacted and converted at 33%

6 Source: http://www.1to1media.com/View.aspx?DocID=29738 http://www.magiq.com/media/news/fbtoseemagiq.aspx

How much more effective…

• Nab

– Identified more than 3m sales opportunities that have led to about 500,000 customer conversations: 16%

• Large Regional US Bank

– Within the first week of a recent EBM deployment

• Identified more than 3,000 trigger events with a better than 40% success rate

• 5,000 "on-boarding" triggers, of which 1,500 generated incremental business

7 Source: http://www.americanbanker.com/btn_issues/19_6/-280136-1.html http://www.customerthink.com/article/event_based_marketing_banks_changes_behavior

How much more effective…

• ING

– Response Rates

• Average rates considerably higher than traditional direct marketing.

• For savings accounts

– Response rates are as high as 60%.

– €20 million p.a. earnings increase from direct marketing effectiveness.

– Lower direct marketing costs

• Reduction in direct marketing costs of 35% per year.

• Onlineshoes.com

– Launched trigger based abandoned cart emails at 3 day mark

• 400% increase in open rate

• 1,000% increase in click-throughs

• 1,200% increase in conversions

• 1,000% increase in revenue per email

8

Source: “ING Delivers Personalized Product Offers Across Channels In Real Time”, Forrester Research Inc 2009 http://www.retailonlineintegration.com/article/trigger-based-emails-help-onlineshoescom-grow-its-revenues-416386/1

How much more effective…

9 Source: “Trigger Marketing: Timing is Everything”, Aberdeen Group, 2008

EBM delivers results

• Increased conversion rate

• Lower costs

• But is only a part of an integrated approach

– Lifecycle

– EBM

– Segmentation

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Getting Started requires a change in approach

• The old approach

– “We have a campaign now who can we send it to?”

• The campaign a customer receives, depends on

– Which campaign is being run

– When it is run

– How long since the last campaign contact

– etc.

• Customers are targeted with sales messages.

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Campaign 1

Campaign 2

Campaign 3

Campaign 4

Campaign 5

Event Based Marketing Approach

• The approach is

– “We react to the customer’s actions and contact them when their actions indicate we should.”

• The campaign a customer receives depends on

– What they have done

– What products they hold

– etc.

• Customers are engaged in a conversation relevant to what they have purchased and how they are interacting with us.

12

Campaign 1

Campaign 2

Campaign 3

Campaign 4

Campaign 5

Prerequisites

• Minimum practical requirements

– Ability to monitor customer behaviour

• Customer database

– Ability to decide what to do

• Real time, rules based decisioning engine

– Ability to execute in a timely fashion

• Campaign management software

• Email marketing automation software

• Ability to input to face to face / contact centre channel

– Ability to report on what happened

• Nice to haves

– Centralised customer database

– Data integration and hygiene software

– Cross-channel integration infrastructure

– Data mining software

– Predictive analysis expertise

– Centralised product/services database

13 Source: Adapted from “Trigger Marketing: Timing is Everything”, Aberdeen Group, 2008

Developing your first campaigns

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Identify Triggers

Create Responses

Test / Evaluate

Operationalise

Optimise

Triggers

• Brain storming

– Easier

– Place to start

– Make a big list!

– What treatments are possible?

– Discard what cannot be actioned

• Data analysis

– Harder

– Needs more skills

– Longer term insights

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Types of triggers

• Customer initiated

– Purchases

– Deliveries

– Services contacts

– Account openings/closures

– Web hits

• Reactionary

– Things a customer does in reaction to what you have done

• Clicking through to links in your email newsletter

• Analytic

– Non-obvious insights that you glean from the data

• Scoring, statistical or other models

– As simple as RFM or as complex as you like

16

Some really useful new approaches….

For more information: “Calculating Retail Sales Forecasts, Customer Life Time Value, and other customer variables”

http://bit.ly/oSg0Xy

17 Source: “Probability Models for Customer-Base Analysis”, Peter Fader, Bruce Hardie, 2009

Create the response

• What will be done?

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It is not always clear what to do?

• Customer deposits $21,564 in their transaction account?

– Have they just been made redundant?

– Sold their car?

– Sold some shares?

– Moved money from another bank?

– Received an insurance payout?

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Create the response

• What will be done?

• Can it be done?

• How will it be done?

– Inbound

– Outbound

• Who will do it?

– How will they know to do it?

20

Evaluate Success

• Set up measurement process early

– Identify goals early

– Create a dashboard

• Point in Time Campaign Vs Event Campaign Measurement

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Operationalise

• Automate

– The number of simultaneous campaigns will explode

– Many more, much smaller campaigns

– You will need to automate.

• Customer Contact Framework

– The complexity of customer contact will explode

– You need to set yourself up for success.

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Customer Contact

Framework

Contact Rules

Contact History

Contact Calendar

The Customer Contact Framework prioritises and control customer contact

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A comprehensive, set of rules to define when and how a customer can be contacted by the organisation.

A comprehensive history of every attempted, unsuccessful and successful contact that the organization has with a customer.

A segment by segment, cell by cell, plan for the campaign contacts that a customer will receive over their lifecycle.

Optimising

• Only after you get the basics done

• Question to answer:

– If I have more than one treatment that I can execute for this customer which should I choose?

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Getting started, in summary

• Start simple

• Use what you already have available

– Data wise

– Communication wise

• Prepare for long term requirements

• Dedicate some marketing resources to making it happen

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Identify Triggers

Create Responses

Test / Evaluate Operationalise

Optimise

Critical Success Factors

• Pick the right channel for the right trigger

– Black box triggers are better implemented via automated systems

• Inbound Channels Pre-think the actions

• Speed / Timing

– “The shelf-life of an EBM trigger is approximately three days, and success rates fall sharply during that period”

– You must be able to react quickly.

26 Source: “Event-Based Marketing Helps Banks Pinpoint and Benefit From Changes in Customer Behaviour”, Dan Smith, 2008

How important is speed? It can be very important!

27 Source: The Lead Response Management Study, 2009

Critical Success Factors

• Technology requirements

– Ability to monitor customer behaviour

• Customer database

– Ability to decide what to do

• Real-time, rules based, decisioning engine

– Ability to execute in a timely fashion

• Campaign management software

• Email marketing automation software

• Ability to input to face to face / contact centre channel

– Ability to report on what happened

28 Source: Adapted from “Trigger Marketing: Timing is Everything”, Aberdeen Group, 2008

Measurement is critical to long term success

29 Source: “How Interactive Marketers Should Rethink Traditional Approaches To Campaign Management”, Forrester, June 2011

What should you report on?

30 Source: “Trigger Marketing: Timing is Everything”, Aberdeen Group, 2008

Summary of Critical Success Factors

• Pick the right channel for the right trigger

• Inbound Channels: Pre-think the actions

• Speed / Timing

• Have the right tools

• Measure success

31 Source: “Event-Based Marketing Helps Banks Pinpoint and Benefit From Changes in Customer Behaviour”, Dan Smith, 2008

Roadblocks (that aren’t really there)

• “Determining what treatment to perform can be really hard!”

– But once it’s done you can reap the benefits for the long term.

• “Our data is not good enough”

– It is never perfect but it is always good enough to do something

• “How do we pull all of the data into one place so we can get a whole of customer view?”

– This one is tough, no doubt, but start with what you have and build.

32

Roadblocks (that aren’t really there)

• “I’m already implementing a new acquisition campaign every quarter/month/week and that’s really tough how am I going to build 400!”

– The incremental approach means that you just keep adding to the pile.

– You need to focus on repeatable, automatable, higher volume, triggers.

– Don’t try to “boil the ocean” – focus your efforts

33

Roadblocks (that aren’t really there)

• “Won’t my customers be unhappy if they think we’re looking over their shoulder all the time?”

– It all depends on how you deliver the treatment.

• “We really can’t afford all of the new systems required”

“We can’t get on the IT roadmap for 12 months.”

– Most systems are deliverable as Software as a Service so costs are operational and IT does not need to get as involved.

– Think incremental

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Today

• Value Proposition

– EBM programs are typically 2 to 12 times more effective than traditional direct marketing programs.

• Getting Started

– Start simple

– Use what you already have available

– Prepare for long term requirements

– Dedicate some marketing resources to making it happen

• Critical Success Factors

– Report, report, report

– Speed/Timing

• Roadblocks

– Are not nearly as large as they may seem

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Implementing Trigger-based Marketing to Drive Customer Loyalty

Questions

Contact Us T: +61 2 8821 6800

info@genroe.com www.genroe.com

@Genroe

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