Understanding Data Kevin J. Klein, Director, Production - PowerPoint PPT Presentation

Understanding Data Kevin J. Klein, Director, Production Intelligence Consulting Pitney Bowes Alan Kraft President Media Horizons Management 1 2009 TransPromo Summit 1

Perspective � In the new economy of conscience consumption, understanding our customers and prospects is more vital to growth than ever � Do no harm � The goal is to have customers say “you thought of me” 2009 DMT Kick Off January 13-16, 2009 2 2

What is TransPromo? TransPromo is the INTELLIGENT combination of transactional customer communications and RELEVANT marketing to DRIVE cross selling, upselling, customer education, loyalty and cost savings TransPromo HAS BECOME A REALITY due to: � VDP (Variable Data Printing) technology plus � Cost effective quality color production technology plus � Customer specific data (Client Analytics, Location Intelligence, Inherent Document Intelligence) Going beyond color printing, campaign management and personalization to increase customer value 2009 DMT Kick Off January 13-16, 2009 3 3

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Adoption of a Scientific Approach to Marketing A recent Epsilon CMO Survey showed CMOs are shifting to more targeted and measurable marketing strategies: � 31% marketers use sophisticated modeling tools to analyze existing customer data (behavioral, preference and demographic) � 28% said they made 'rough estimates’ based on past experience. � 19% said that they analyze past purchase behavior. Source: Epsilon CMO Survey September 8, 2008 2009 DMT Kick Off January 13-16, 2009 5 5

As Relevancy Increases, So Do Profits Factors that make statements relevant: • Content that Relates to my Needs • Based on my Preferences • Recognize Extent of Relationship • Highlight Local Resources PROFITS • Accuracy of Information • Timeliness of Offers “You know me” RELEVANCE 2009 DMT Kick Off January 13-16, 2009 6 6

Measuring Propensity to Respond Names only Static full color Personalization & full colour Database intelligence & localization 0% 100% 200% 300% 400% 500% Source: Personalized and Database Printing, Romano / Boudy 2009 DMT Kick Off January 13-16, 2009 7 7

Predicting Customer Needs Observed Behaviors � Product usage behavior – Products/ Balances – Age of Relationship – Mean Time Between Purchases – Order of Purchase � Transactional Behaviors – By Type of Transaction – By Channel Demographics and Lifestyle Variables Geographic Factors � Relative Convenience to Customer � Local Brand Strength Events � Life Events � Market Events 2009 DMT Kick Off January 13-16, 2009 8 8

Data Sources for Relevant Communication 45,000 Location Profiles 30+ attributes Sales & Customer Service Behavior Channel 115+ Million Benchmarks Purchases Channel Customer Operating Behavior Expenses 1.5+ Billion Transactions Product & Customer Third Party Profitability Data Sources Norms 2009 DMT Kick Off January 13-16, 2009 9 9

Customer Profiling Profiles indicate the degree to which a given cluster finds the client’s offer attractive relative to the general population Once defined, profiles are extremely useful in identifying areas of opportunity for cross-sell and prospecting 2009 DMT Kick Off January 13-16, 2009 10 10

Profiling – The Impact of Convenience Distance Decay Measurement Per Capita Sales by Distance $70 � Fundamental rule of site based retailing: market $60 share diminishes as $50 distance increases Sales per Capita � In addition to contextual $40 market data, LI can improve accuracy in $30 profiling by taking into $20 account this friction of distance $10 $0 0 5 10 15 20 Driving Distance (miles) 2009 DMT Kick Off January 13-16, 2009 11 11

TransPromo: Get Customer Intelligent Leverage Customer Prioritized Offer Optimize Statement Insight Selection Marketing TransPromo Content Database 2009 DMT Kick Off January 13-16, 2009 12 12

Customer Data Implementation Strategies Transactional Data Customer Data IT, External Upstream Composition Digital Downstream Assets/Copy Printing Marketing/Agency Business Rules Marketers Finishing Mailing Delivery 2009 DMT Kick Off January 13-16, 2009 13 13

Customer Data Driven 3 rd Party Marketing KOYOTA � Vehicle = OEM Tires Financial S Financia l Services es � Date = Seasonality � Address = PSYTE Michelin Tires are our Cluster (Family choice for safety Visit Town Fair Tire at Orientation, Safety 67 Federal Road in Brookfield, CT and Receive a free safety kit Conscience) and a $20 rebate on each tire purchased 7/12/2010 15 � Address = Location 18 of Nearest Michelin Dealer Dealer KOYOTA Financia Financial S l Services es KOYOT A 2009 DMT Kick Off January 13-16, 2009 14 14

Customer Data Driven “Pointers” Increase attention to internal offer though relevance KOYOTA Financial Servi nancial Services New England winter is coming soon! Important Safety Offer Included 2009 DMT Kick Off January 13-16, 2009 15 15

Behavioral Marketing � Using consumer behavior, including lifestyle, purchase and channel engagement to maximize marketing ROI � Most commonly used data (by direct marketers): � Demographics > Good � Preference/Attitudinal > Better � Behavioral > Best � Example: Ask 100 people if they’re planning on exercising in the next six months vs. 100 people who have recently purchased running apparel 2009 DMT Kick Off January 13-16, 2009 16 16

Behavioral Marketing Driven by customer data Frequency y Holy trinity of c n behavioral data e c e points traditionally R used by direct marketers Monetary Fast forward to current day and add: � Ability to analyze sequence of purchases leading up to a specific action taken by a consumer, which can lead to stronger re-marketing efforts � Ability, on the fly, to determine whether a consumer prefers to transact via phone, mail or web � Ability to analyze open rates, open times and reader preferences of email communications 2009 DMT Kick Off January 13-16, 2009 17 17

Behavioral Marketing The value of TransPromo � Direct marketers are constantly looking for the next level of media efficiency, and TransPromo offers a greater degree of behavioral marketing segmentation than is currently available in the transactional document channel � Old School: Marketer produces insert/bangtail for inclusion in outgoing transactional document mailings � New School: TransPromo offers marketer the ability to target by multiple criteria, including geography, purchase behavior, timing, credit worthiness and by channel engagement 2009 DMT Kick Off January 13-16, 2009 18 18

Behavioral Marketing Current Customer Marketing � Maximize Lifetime Value (LCV) by using behavioral intelligence to target offers and promotions on a highly segmented level. � Focus on frequency of promotions, seasonality, creative execution, etc. Brings direct value to your organization through third party advertiser revenue 2009 DMT Kick Off January 13-16, 2009 19 19

Behavioral Marketing Third Party Marketing � Produce greatest possible third party advertising revenue � Enable marketers to maximize their marketing ROI within your transactional document environment Brings value to your organization through third party advertiser revenue 2009 DMT Kick Off January 13-16, 2009 20 20

TransPromo: Get Customer Intelligent Creating Creating Communicating Communicating Executing Executing � Synthesize � Communicate � Scale Customer winning value successful segment propositions experiments knowledge � Synchronize � Accumulate � Hypothesis the call to knowledge formulation action � Hypothesis testing & verification 2009 DMT Kick Off January 13-16, 2009 21 21

Thank You Kevin Klein kevin.klein@pb.com 203.739.3841 Alan Kraft akraft@mediahorizons.com 203.604.1795 2009 DMT Kick Off January 13-16, 2009 22 22