IBM Technoloogy Day 2013 - Smarter Commerce

© 2013 IBM Corporation© 2013 IBM Corporation
Smarter Commerce
Redefining Business in the Age of the
Customer
Marcel Kuster / Frederic Milnet

2
Agenda
• The empowered customer and the vision of
Smarter Commerce
• Smarter Commerce and what it means to the
Chief Marketing Officer
• Capabilities required for Next Generation
Marketing
• Demo: Customer Experience Analytics in
Action (IBM Tealeaf)

© 2013 IBM Corporation© 2013 IBM Corporation3
Today’s “empowered customer” puts businesses to the test
44%
of companies
use crowd
sourcing from
customers
4in 10
Smart phone
users search for
an item in a store
86%
use multiple
channels
4-5x
more than
average is
spent by multi-
channel buyers
61%
trust friends’
reviews more
than experts’
78%
of consumers
trust peer
recommendations
58%
are more price-
conscious today
than they were a
year ago
75%
do not
believe
companies
tell the truth
in ads
80%
of CEOs think
they deliver a
superior
customer
experience
8%
of their
customers
agree

Buy
Adaptive
procurement
and optimized
supply chain
Market
Targeted and
personalized
marketing
across all
channels
Service
Anticipate
behavior and
deliver flawless
customer
service
Sell
Seamless
cross-channel
customer
experience
MarketBuy
Service Sell
At IBM, we call the path forward Smarter Commerce placing
the customer at the center of your business

5
Targeted and personalized marketing across all
channels
Market

Seamless cross-channel customer experience
Sell

Anticipate behavior and deliver flawless customer service
A customer enters
the shop
The shop detects
the customer The customer is
recognized as a
VIP
The shop asks the
customer if he/she
wishes to interact
Customer agrees to
interact with shop
The shop informs the
shop assistant that a
VIP has arrived
The shop assistant is
informed of customer’s
needs and decisions
All devices in shop are alerted
that a specific customer is
willing to interact and allow
personalized interactions
Service

Adaptive procurement and optimized supply chain
Buy

9
Smarter Commerce: Focus of today
Procurement/Sourcing/
Supply Chain Management
Customer Service and Interaction/
Case Management
Cross Channel Selling/
Order Management & Fulfillment
Buy
Customer Awareness & Analytics/Cross Channel Marketing
Marketing
Performance
Optimization
Customer Shopping
Insight
Price / Promotion
Optimization
Cross Channel
Campaign
Management
Digital Marketing
Optimization
Marketing
Integration &
Optimization
Cross Channel
Consumer Insight
Real-time
Marketing
Customer
Analytics &
Segmentation
Interaction History
& Attribution
Web & Social
Analytics
Customer
Experience
Management
Service Sell

10
Agenda
Smarter Commerce
• Smarter Commerce and what it means to
the Chief Marketing Officer
Marketing

The majority of CMOs are underprepared for the factors that
will impact the marketing of the future
“From Stretched to Strengthened; Insights from the Global Chief Marketing Study”
www.ibm.com/cmostudy

How the job of the CMO will change:
The 3 imperatives for a new profession
Designing your culture
and brand so they
are authentically one.
Creating a system of
engagement that
maximizes value creation
at every touch.
Understanding
each customer as
an individual.

Customer browses ING
webpages for a
savings product …
Customer browses ING
webpages for a
savings product …
… but does not
continue the process
… but does not
continue the process
Collecting information on individual web behaviour

Customer leaves the
bank website and
browses the
newspaper pages.
An ING savings ad
shows up, targeted at
this individual
customer.
The customer clicks
on the advertisement
Customer leaves the
bank website and
browses the
newspaper pages.
An ING savings ad
shows up, targeted at
this individual
customer.
The customer clicks
on the advertisement
Re-targeting based on web behaviour insights

The customer starts
filling out the
application form
The customer starts
filling out the
application form
… but then abandons the
process
… but then abandons the
process
And returns to the ING
webpages
And returns to the ING
webpages
Monitoring the user experience on the web

A call center service
representative calls the
customer the day after
and offers to print out
the application
document and send it
over (remarketing)
The customer agrees
and completes the
application
A call center service
representative calls the
customer the day after
and offers to print out
the application
document and send it
over (remarketing)
The customer agrees
and completes the
application
Using the customer behaviour insights in other channels to
support the client (Re-Marketing)

The customer receives
the monthly newsletter
The customer receives
the monthly newsletter
The newsletter is
personalized and starts
with a topic on savings
accounts …
The newsletter is
personalized and starts
with a topic on savings
accounts …
… and a call to action to
transfer funds
… and a call to action to
transfer funds
A few weeks later, the
customer still hasn’t
transferred funds
A few weeks later, the
customer still hasn’t
transferred funds
Usage stimulation in the Email channel...

A personalized
message is shown in
the service box, urging
the customer to
transfer funds.
The customer decides
to transfers funds and
does this with a few
clicks
A personalized
message is shown in
the service box, urging
the customer to
transfer funds.
The customer decides
to transfers funds and
does this with a few
clicks
… the customer goes
to the secure part of
the website
… the customer goes
to the secure part of
the website
A few days later …A few days later …
...in the internet banking channel...
Impact: banners that are triggered
based on behavior of a customer
have up to 10x higher CTR
Impact: banners that are triggered
based on behavior of a customer
have up to 10x higher CTR

A personalized offer pops –
special bonus points for when the
customer deposits more money.
A personalized offer pops –
special bonus points for when the
customer deposits more money.
A month later, there has been no
further transfers of funds.
The customer uses the mobile
app to make a payment
A month later, there has been no
further transfers of funds.
The customer uses the mobile
app to make a payment
...in the Mobile App...

ING posts a personalized offer for
this customer: the ‘bonus point’
offer
ING posts a personalized offer for
this customer: the ‘bonus point’
offer
The customer has liked the ING
page on facebook
The customer has liked the ING
page on facebook
...and in the Social Media channel

On the next day, the customer
visits a branch.
A warning message shows up
on the branch screen – the agent
offers a increased savings rate
and secures the customer
On the next day, the customer
visits a branch.
A warning message shows up
on the branch screen – the agent
offers a increased savings rate
and secures the customer
A while later, the customer visits
the website and looks at INGs
interest % on the savings
accounts.
Short after, the customer starts to
withdraws funds from the
savings account.
A while later, the customer visits
the website and looks at INGs
interest % on the savings
accounts.
Short after, the customer starts to
withdraws funds from the
savings account.
Customer retention in the branch

Underlying principles: A single marketing engine, providing
offers across all channels
22
Internet
Open
homepage
Open
productpages
Secure
homepage
Open
Logoff page
Secure
landingpages
Call outbound
Branches
E-mail
Call inbound
Sept 2012
Mail ATM
Inbound
Outbound
Banners at
non-ING domains
Fase 4 ?
New
in phase 4
Sales Force

23
Agenda
Smarter Commerce
Marketing

Marketers must integrate all aspects of marketing
Earned
media
PR
Owned
media
Price,
promotion,
product
mix
ad
ad

complete
UNDERSTANDING
of each customer
1
What makes this hard?
Earned
media
PR
Owned
media
Price,
promotion,
product
mix
ad
ad
Most marketers lack:

complete
UNDERSTANDING
of each customer
1
What makes this hard?
Earned
media
PR
Owned
media
Price,
promotion,
product
mix
ad
ad
Most marketers lack:
platform
to take
coordinated
ACTION
2

IBM Enterprise Marketing Management (EMM) provides a
comprehensive suite that improves and integrates five
critical processes of marketing
Manage
budgets and processes
and measure results
Decide
on the best action
or communication
Deliver
engaging messages
and capture reactions
Collect
data that augments
each customer profile
Analyze
data to find
actionable insights

The IBM solutions are helping marketing organizations
achieve a spectrum of business outcomes
Improved customer value,
loyalty and retention
5-15% increase is typical
Higher online
marketing ROI
15x-25x increase is typical
Higher campaign ROI
Increased response rates
More campaigns with
the same resources
2-5x increase is typical
Reduced cycle time
for marketing efforts
40-80% reduction is typical
Reduced marketing costs
Lower customer
acquisition costs
More relevant
and effective
marketing
More efficient
marketing

FOR WHO NEED TO IBM PROVIDES
Digital Marketing
Optimization
Digital marketers
Orchestrate relevant digital
interactions to attract and retain new
visitors and grow revenue throughout
the customer's lifecycle
Marketing Performance
Optimization
Marketing leaders
and planners
Model and assess mix, and manage
marketing operations to maximize ROI
Merchandising
and sales planners
Price, Promotion, and
Product Mix Optimization
Make price, promotion and
product mix decisions that maximize
profit and inventory utilization
Customer Experience
Management
eCommerce /
Online
professionals
Turn visitors into repeat customers
and loyal advocates by improving the
digital experience of every customer
Cross-Channel
Marketing Optimization
Customer
relationship
marketers
Engage customers in a one-to-one
dialogue across channels to grow
revenue throughout the customer's
lifecycle
IBM EMM flexibly addresses the needs of specific user
groups

30
Agenda
Smarter Commerce
Marketing

Customer Experience Analytics
92:1
Companies typically spend $92
to bring customers to their digital
ecosystem
But only $1 to convert
them.

The single most common question
executives ask about their online
channels is
“Why don’t more shoppers
complete purchase
transactions?”
“Why don’t more customers use
our less expensive online help?“
“Why don’t readers click
more deeply into our web
site?”
“Why?”
Why Tealeaf?

DEMO

Common Tealeaf Use Cases:
• Provide more
proactive and
informed
service with
visibility into
the
customer’s
session
history.
• Improve
customer
loyalty.
• Convert a
cost center
team into a
profit center
team.
Cross-sell /
Up-sell
Customer Service
• Increase first
call resolution
rates.
• Decrease
unnecessary
escalations.
• Improve
customer
satisfaction.
• Effectively
resolve
customer
disputes.
• Create
feedback loop
with IT/Dev
via Tealeaf’s
common
language.
Issue
Resolution &
Support
• Find & fix
problems
more
efficiently ~
60% time
reduction on
average.
• Prioritize
issues for
resolution
based on
business
impact.
• Improve site
success rates
by eliminating
site obstacles.
• Conduct fraud
forensics.
IT/Development
Problem
Identification
& Resolution
eBusiness
Improve
Conversion Rates
• Analyze
customer
behavior to
remove the
obstacles
preventing
transactions.
• Deflect costs
from higher-
cost channels
(i.e., call
center,
branch, etc.)

Payback in less than 3 Months
Results Synthesized from 4 Customers:
– Online Travel Agent
– Leading Online Clothing, Shoes Retailer
– Retailer of Automotive Accessories
– Another Online Travel Agent
Three-Year Risk Adjusted Results
ROI: 512%
Payback Period: 2.6 months
Total Net Present Value: $7,633,214
Source: A commissioned study by Forrester Consulting, “The Total Economic
Impact of Tealeaf’s Customer Behavior Analysis Suite.” July 2010
Benefits Quantified in Study
Increased Conversion Rate 3.5%
Increased Average Order Value 0.5%
Improved Retention Rate 1%
Reduced Problem Resolution Time 60%
Reduced Incidents (Project Avoidance) 10%
Reduced Disputed/Fraudulent Chargebacks 0.05%
Summary: 3-Year Risk-Adjusted ROI
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Initial Year 1 Year 2 Year 3
Reduction in chargeback transactions
Reduction in IT costs for project avoidance
Reduction in IT costs for problem resolution
Incremental revenue from improved retention rate
Incremental revenue from increased order value
Incremental revenue from increased conversion
Total yearly costs for Tealeaf

Empowering Customers across all Verticals

Tealeaf Usability
Click Heat Map
Discover where your visitors
click on a page including
forms, links, images and text
so you can optimize your
visitor’s experience.
Attention Map
Know where your users are
spending most of their time
for a given page not just how
far they scrolled a page.
Form Field Analytics
Optimize each form increasing
conversion rates and understand
how page and form conversion rates
compare, how long each field takes
to complete and where users go
after completing.
Link Analytics
Improve conversion and
engagement by identifying links
that are clicked on more often.
See how relative link placement
can affect your online goals

http://www.ibmconnectedcustomer.com/de
Marcel Kuster
Smarter Commerce
Leader Switzerland
IBM Switzerland Ltd.
Vulkanstrasse 106
P.O. Box
CH-8010 Zurich
Mobile +41 79 600 26 76
marcel.kuster@ch.ibm.com
www.ibm.com
Frédéric Milnet
Smarter Commerce
Seller Romandie
IBM Switzerland Ltd.
Chemin de Blandonnet,8
CH-1214 Vernier
Mobile +41 79 194 51 43
frederic.milnet@ch.ibm.com
www.ibm.com

IBM Technoloogy Day 2013 - Smarter Commerce

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