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

2009 TransPromo Summit

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Understanding Data

Kevin J. Klein, Director, Production Intelligence Consulting Pitney Bowes Alan Kraft President Media Horizons Management

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2009 DMT Kick Off January 13-16, 2009

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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”

Perspective

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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

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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

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As Relevancy Increases, So Do Profits

Factors that make statements relevant:

PROFITS RELEVANCE

• Content that Relates to my Needs
• Based on my Preferences
• Recognize Extent of Relationship
• Highlight Local Resources
• Accuracy of Information
• Timeliness of Offers

“You know me”

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Measuring Propensity to Respond

Names only Static full color Personalization & full colour Database intelligence & localization

Source: Personalized and Database Printing, Romano / Boudy

0% 100% 200% 300% 400% 500%

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Predicting Customer Needs

Observed Behaviors

Product usage behavior

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Products/ Balances

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Age of Relationship

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Mean Time Between Purchases

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Order of Purchase

Transactional Behaviors

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By Type of Transaction

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By Channel

Demographics and Lifestyle Variables Geographic Factors

Relative Convenience to Customer Local Brand Strength

Events

Life Events Market Events

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Data Sources for Relevant Communication

Customer Behavior 1.5+ Billion Transactions Customer Behavior 115+ Million Purchases Third Party Data Sources Sales & Service Channel Benchmarks 45,000 Location Profiles 30+ attributes Product & Customer Profitability Norms Channel Operating Expenses

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Customer Profiling

Profiles indicate the degree to which a given cluster finds the client’s

• ffer attractive relative

to the general population Once defined, profiles are extremely useful in identifying areas of

• pportunity for cross-sell

and prospecting

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Profiling – The Impact of Convenience

Distance Decay Measurement Per Capita Sales by Distance

$0 $10 $20 $30 $40 $50 $60 $70 5 10 15 20

Driving Distance (miles) Sales per Capita

Fundamental rule of site based retailing: market share diminishes as distance increases In addition to contextual market data, LI can improve accuracy in profiling by taking into account this friction of distance

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Leverage Customer Insight Prioritized Offer Selection Optimize Statement Marketing TransPromo Content Database

TransPromo: Get Customer Intelligent

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Upstream Downstream

Customer Data Implementation Strategies

Transactional Data Composition Printing Finishing Mailing Delivery Customer Data

IT, External

Digital Assets/Copy

Marketing/Agency

Business Rules

Marketers

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Vehicle = OEM Tires Date = Seasonality Address = PSYTE Cluster (Family Orientation, Safety Conscience) Address = Location

• f Nearest Michelin

Dealer Dealer

Customer Data Driven 3rd Party Marketing

Michelin Tires are our choice for safety Visit Town Fair Tire at 67 Federal Road in Brookfield, CT and Receive a free safety kit and a $20 rebate on each tire purchased

KOYOTA

Financia Financial S l Services es

KOYOTA

Financia Financial S l Services es

15 18 7/12/2010 KOYOT A

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Customer Data Driven “Pointers”

Increase attention to internal offer though relevance

New England winter is coming soon! Important Safety Offer Included

KOYOTA

Financial Servi nancial Services

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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

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Behavioral Marketing

Driven by customer data

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

R e c e n c y Holy trinity of behavioral data points traditionally used by direct marketers Frequency Monetary

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Behavioral Marketing

The value of TransPromo

Direct marketers are constantly looking for the

next level of media efficiency, and TransPromo

• ffers 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

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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

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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

• rganization through

third party advertiser revenue

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TransPromo: Get Customer Intelligent

Synthesize Customer segment knowledge Hypothesis formulation Hypothesis testing & verification

Creating Creating

Communicate winning value propositions Synchronize the call to action

Communicating Communicating

Scale successful experiments Accumulate knowledge

Executing Executing

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Thank You

Kevin Klein kevin.klein@pb.com 203.739.3841 Alan Kraft akraft@mediahorizons.com 203.604.1795