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Module 3: Enabling Integrated Constituent Engagement

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In this session we will cover

Why cCRM transformation is hard, and how successful organizations approach change

Best Practice approach for planning and alignment of strategic cCRM Transformation

Best Practice for integrated program experience planning

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The complexity of a nonprofit organization today

Nonprofit Organization

Multiple product organizations Marketing Digital

Fundraising Various databases Competing/misaligned

objectives and measurements

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Objectives for Fundraising

• Events

• Development

• Fundraising

Diversification of Revenue Sources

• Visibility of constituent engagement across organization and over time

• Ability to design and delivery integrated experiences

• Understanding of integrated program performance

Integration of Engagement

• Organizational alignment around defined vision

• Build plans to execute against that vision Transformation of Approach

• Business case for long term investment with near and long term impact Justification of Investment

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Challenges we are facing

Direct mail/email fundraising

programs facing deteriorating returns

Lack of experience and certainty

(predictability) of alternate channels

Lack of enabling infrastructure and

capabilities for integration

Lack of data and insights to support case for change

Organizational alignment

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High growth organizations see the strategic value of CRM

Higher growth companies senior leaders view CRM as much more strategic to their business than lower growth companies

36%

22%

25%

32%

Critical, way of life

Important management tool

Senior Management Attitude toward CRM

Higher Growth Organizations

Lower Growth Organizations

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Customer Relationship Marketing Maturity Model

Customer focused

Business unit / media

engagement

Campaign focused

Level 1

Level 2

Level 3

Level 4

Level 5

Enterprise engagement

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 Optimization fully integrated programs & campaigns

Low value

High value

Moving from

Level 3 to Level 4 is hard.

Customer Relationship Marketing Maturity Model

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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 Optimization fully integrated programs &

campaigns

Cap

abili

ty M

atur

ity

Ideal investment zone

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 rapidly enables infrastructure

for efficiency and effectiveness (requires sponsorship)

Level 1

Level 3

Level 4

Level 5

Evolving Capability and Operating Model

Level 2

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Strategic Change Requires Executive Leadership

53%

43%

38%

38%

36%

36%

32%

28%

25%

14%

15%

14%

16%

19%

17%

15%

13%

16%

Lack clear organizational ownership of customer insight

Management bandwidth and priorities

Lack executive sponsorship

Lack the right technology skills internally or not an IT priority

Lack understanding on how to use customer insight to improve the business

Lack or can't get to good integrated customer data

Too hard to align customer strategies across the organization

Lack the right analytical skills internally

Business value is unclear or insufficient

Far Away Nearing Ideal

Challenges to CRM based upon overall maturity

Most respondents said that a lack of ownership and leadership were key challenges to effective CRM Challenges could easily be addressed by a committed and aligned leadership team

*Source: Merkle Inc. Customer Centric Transformation 2013 Research study.

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Leadership and Alignment Drive Success

• Lack of ownership and leadership were key challenges to effective CRM

• Challenges could easily be addressed by a committed and aligned leadership team

Factors that contribute most to success, or the absence of which contributes most to failure, of companies’ past digital initiatives

Source: McKinsey Global Survey Results August 2013 (850 C-level executives) % of respondents, n = 850

Respondents who answered “other,” “don’t know,” or “not applicable” are not shown

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Most significant CRM initiatives are driven from the top

Source: Customer Centric Transformation 2013 Research study. © 2013 Merkle

34%

57%

8%

CEO mandate

Two or more senior executives

Single senior executive

Other

Key decision makers Decision making executive team

Marketing

Sales

Operations

Customer service

Finance

IT

Product

Channels

Other

51%

41%

39%

30%

27%

23%

22%

19%

10%

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The CEO is getting more involved

Level of support and involvement in digital-business initiatives by role % of respondents

Source: McKinsey Global Survey Results August 2013 (850 C-level executives)

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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 Optimization fully integrated programs &

campaigns

Cap

abili

ty M

atur

ity

Ideal investment zone

[Director]

[Vice President]

[CMO]

[C-suite]

[CEO]

[Key decision maker]

Level 1

Level 3

Level 4

Level 5

Where and Why are Organizations Getting Stuck?

Level 2

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THE APPROACH

cCRM Transformat ion

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cCRM Roadmap Approach

Our Nonprofit Offering is grounded in Merkle’s Connected CRM Framework, which helps clients drive transformational change through a connected customer-centric approach

Cas

e fo

r Cha

nge 2

3

Business Case

Cus

tom

er

Exp

erie

nce

Executive Sponsorship and Program Governance

4

5

6

7

8

Media

Channel

Analytics & Insights

Technology

Operating Model

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Blueprint & Roadmap

10

11 Benefits Realization

Change Integration

Build the Case for Change

Understand Key Change Drivers – (current environment, capabilities,

pain points)

Build Strategy, Roadmap & Value Case

(Define Customer Experience

Vision, conduct CRM Capability Maturity Assessments)

Execute Multi-Phased Design / Build /

Deployment Approach

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Strategy, Roadmap, Value Case C

ase

for C

hang

e 2

3

Business Case

Cus

tom

er

Exp

erie

nce

Executive Sponsorship and Program Governance

4

5

6

7

8

Media

Channel

Analytics & Insights

Technology

Operating Model

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Blueprint & Roadmap

10

11 Benefits Realization

Change Integration

Evaluate/Define the Customer Experience Vision through lifecycle journey workshops and use case scenarios

Key Deliverables resulting from this Phase of Work

Workstreams included during the Roadmap Design/ Implementation Phases

Capability Maturity & Gap Assessments for each CRM domain: Media, Channel, Analytics, Technology, Operating Model

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Executive Sponsorship and Governance

• CEO • Fundraiser Marketing • Product and/or Segment • Corporate Marketing • Digital Marketing • Insight and Analytics • Key Affiliate(s) • Technology • Finance

• Be champions for lasting change • Align enterprise to common vision • Apply value-lens in prioritizing

alternatives • Integrate initiatives across groups • Ultimately, track business results and

impact

Example Nonprofit Team Objectives

Executive sponsorship and governance is a key ingredient for driving lasting change within organizations

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Creating Alignment: Defining the End State Customer Vision

Customer Experience Opportunity Workshop

Customer Interaction Visioning Workshop

Customer Interaction Mapping

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Perception of a company’s level of technology/data sophistication, insights and organizational readiness can vary greatly by individual. The “ideal” future state is often beyond the actual needs and readiness of a company.

Capability Maturity Assessment

x6

Challenge

Questionnaire fielded to stakeholders to collect input about company’s current state of maturity and desired future state. Readout session to share, discuss and align on aggregated findings.

Approach

Maturity assessment findings to include current state and desired future state across the six Connected CRM dimensions of Information, Insight, Interactions, Measurement, Optimization and Agility.

Output

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CRM roadmaps are often heavily focused on technology development and do not take into account in-progress initiatives and/or dependencies across other areas such as customer engagement, operating environment, metrics and measurement.

Roadmap and Value Case

Challenge

Individual interviews and team discovery sessions to collect information about related initiatives. Develop final roadmap with detailed plan across customer engagement, operating environment and technology enablement. Recommended roadmap becomes the base of a detailed value case.

Approach

CRM deployment roadmap and multi-year value case.

Output

Key Workstreams Requirements/Design Foundational Platform

Analytics Capability Assessment

Experience Architecture DefinitionSolution Architecture

Technology Architecture

Analytics Capability Development

Operating Model

Program Governance / Benefits Realization

Data Ecosystem Audit Vendor Selection Process

Tech Architecture Deep Dive(Current State Analysis)

Near Term Wins/Accelerators

Near Term Wins Design & Implementation

Lead Nurturing Strategy/Pilot

Channel Integration Requirements (Phased)

Logical Architecture, Data Model & Phased Implementation Plan

Campaign Management Metadata / Decision Rules / Reporting Design

Customer Data Integration (CDI) Design

Deploy CM Platform (Phase 1)

Deploy CDI Solution (Phase 1)

Deploy Foundational Marketing Platform (FMP)

Marketing DB Build

Digital Data Discovery

Quick Wins Dashboard

Insights Dashboard Development

Insights Platform Design / Development

Segmentation Strategy & DevelopmentMeasurement Strategy

Current State Marketing Process / Program/ Org Assessment

Future State Marketing Process Design Recommended Operating Model & Staffing Plan

Deploy Phased Transition Plan

Migration Strategy – Existing Campaigns / Programs

Establish & Maintain Program Governance Structure

Measure/Track /Report Benefits Realization

Marketing Analytics Team Design

Data Governance Program Design*

$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

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THE APPROACH Exper ience De l i ve ry

Assessment and Roadmapp ing

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Program Assessment and Roadmap

Week Week Week Week Week Week Week Week Week Week Week Week

Milestone/ Interaction

Final Recommendations

• Kick-off Call -- Set Goals and Expectations

• Submit Data Request • Interviews & Discovery

Sessions with Team

Discovery Discovery Session

• Gap Analysis • Competitive Analysis • Segmentation Analysis • Preliminary Strategy Development • Facilitate Strategic Prioritization Session

Strategic Assessment Strategic Prioritization Session

• Document Prioritized Strategies

• Develop Tactical Project Briefs • Review with

Vendors/CUSTOMER Team for Feasibility

• Finalize and Deliver Strategic Roadmap

Strategic Roadmap

Final Design Review

Data Request

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Example Program Differentiators & Challenges

• Increasing DM costs • Investment in new media untested • Siloed program marketing, fundraising

functions • Disconnected experience across

channels, brand and mission • Lack of 360 view of constituent • Transparency of impact (ex: how

donor dollars impact services areas) • Brand differentiation – aging brand,

value prop increasingly less relevant • Heavy reliance on aging donors; no

real foothold in next generation • Brand strength in US only, not

meeting global expansion goals • No services, marketing in fast-growing

Latino market segment

• Revenue predictability via investment in monthly giving

• Good program performance visibility via established KPI’s and ROI

• Strong donor loyalty and retention from core, high affinity donors

• Rich first party data • Diversified revenue streams across

multiple products (1x, monthly giving, gift catalog, events)

• Brand value - recognized by consumers as category leader in core service/ mission area

• Strong, consistent media presence via celebrity ambassadors

• Mature grassroots advocacy program strengthens donor loyalty and expanded audience reach

Challenges Differentiators

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Assessment Structure

Strategic Planning

Data Management

Key Opportunities Category

Analytics & Modeling

Audience

Product/Offer

Media/Channel

Contact

Messaging/Creative

Program Management

Reporting & Analysis

Marketing Management

Profit Drivers

Execution

• Update core value prop and brand messaging

• Develop consolidated, integrated constituent marketing database & expand analytics capabilities

• Adopt segment portfolio management strategy with different treatments for each target segment

• Identify and target new segments and markets (incl international) that better align to the value proposition and exhibit profitable behaviors

• Expand and personalize digital marketing aligned to segment needs

• Connect brand marketing and development to manage full constituent life cycle

• Align product features offers to needs of most profitable segments

• Improve ability to measure value of donor portfolio vs. channel, spend and tactics used to acquire them

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• Align targeting with response, funding and spend • Leverage corporate partner and brand assets to drive acquisition,

especially into new markets and audiences • Enterprise segmentation

High-Propensity Audiences 4 2

• Test new event-based segments (traditional to nonprofit) such as: - New donors - New event participants - Advocacy hand raisers - Competitive event disenfranchised

Event-Based Segments 6 x

• Targeted investment in paid social, SEO, paid search, and mobile to reach new age demo, and strengthen targeting continuity thru funnel

• Develop analytics capabilities – testing, attribution – to provide program performance transparency and drive media mix optimization

Digital Media Optimization 6 1

• Enhance channel performance & pull-through esp. DM • Tailored response, messaging & offers synchronized across media • Leverage organization website to drive consumer down funnel and cross-

sell appropriate fundraising offers

Conversion Optimization 4 1

• Onboarding: Engage new constituents in first 30 days to drive 1st gift • Upgrade: Use propensity modeling to target monthly donor, mid-tier donor

upgrades • Win-back: Test, learn and scale more diversified win-back using cross-

program offers to lapsed donors (ex. Gift catalog to annual donors)

Lifecycle Marketing 8 2

Strategies Tactics Run the Business

Change the Business

Preliminary Strategies and Tactics

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Exercise: Initiative Prioritization

• Review each initiative on the worksheets provided

• The facilitator will position a ball on the chart according to the group’s estimation of the following:

• Expected impact (lowest to highest)

• Expected effort to implement (easiest to hardest)

Hig

h Lo

w

Hardest Easiest

Expe

cted

Impa

ct

Implementation Effort

Program Prioritization (Illustrative*)

High Impact: Effort ratio

(*) Based on initial qualitative estimates, to be refined on completion of data analysis

1.1

2.1

2.2 2.3

2.4

2.5 3.1

3.2

3.3

4.1

4.2

5.1

5.2 6.1

7.1

1.2 1.3

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Lessons Learned

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Lessons learned

KPIs

Culture Structure Roles and Responsibilities

Incentives and Rewards

Lesson 3: Whatever you call it, create a Chief Customer Officer role

Lesson 5: You are what you measure

Lesson 4: The business and technology are in this together

Lesson 1: Start with the customer experience

Customer Experience

Lesson 2: Assign organizational authority and accountability for the customer experience

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2 3 4 5

Experience enabling Operating model

components

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• What meaningful change has your organization tried? How did it go?

• Do you think your organization needs this level of change? Would that view be shared broadly across your executive group?

• What level of sponsorship would you need, and could that be attained?

• How would you start to progress change in your organization?

Working Session Questions

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Thank you… And see you next year!