Cultivate - Day 1 - 11:30 - "The Role of CRM in Data-Driven Advertising"
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1) Gavin Wilson and Owen Hewitson discuss using customer relationship management (CRM) data and customer lifetime value (CLV) modeling to personalize marketing campaigns at scale through programmatic advertising. 2) They describe how retailers can segment customers into groups based on recency, frequency, and monetary value to target personalized ads and messages to increase customer loyalty and lifetime spending. 3) Sociomantic partners with retailers like Tesco to match these CRM segments to audiences online using programmatic display advertising in order to drive customer retention and incremental sales.
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Cultivate - Day 1 - 11:30 - "The Role of CRM in Data-Driven Advertising"
- 1. Gavin Wilson Chief Revenue Officer CRM to Programmatic Growing Customer Lifetime Value with Personalised Marketing that Scales Owen Hewitson Head of Consumer Insights
- 2. Was euch wirklich erwartet
- 3. Full-Service Programmatic Display 70+ Markets 21 Offices Multi-Device Multi-Channel Full-Funnel Display Advertising 100% proprietary tech
- 4. Our Shared Mission To make advertising more relevant and personal. Our Shared Vision User-individual marketing at scale. The Future Will Be Personalised
- 5. Gavin Wilson Chief Revenue Officer CRM Growing Customer Lifetime Value Owen Hewitson Head of Consumer Insights Programmaticto Personalised Marketing that Scales with
- 6. Mobile Mobile Mobile MobileMobile Mobile Mobile The Development of Buzzwords 2004 2006 2008 2010 2012 2014 2016
- 7. RTB Big Data Phablets Second Screen SoLoMo Personalisation Programmatic Beacons 2011 2012 2013 2014 2015 Buzzwords of the Last Years Push NotificationsNative
- 8. 2004 2006 2008 2010 2012 2014 2016 CRM? Buzzword???
- 9. “A management philosophy according to which a company’s goals can be best achieved through identification and satisfaction of the customers' stated and unstated needs and wants.” Business Dictionary, http://bit.ly/1DU3ODf Definition of CRM
- 10. It all starts with the customer.
- 11. Dear Valued Customer, I don’t know your name or what you care about but I’d like to sell you something.
- 12. 12
- 13. Understood and spoken to as individuals Surrounded by relevant and helpful content Engaged through their preferred channel, device & platform With smart timing and respectful frequency Customers have changed — profoundly and forever.
- 14. Customer Lifetime Value RECENCY FREQUENCY MONETISATION When did the customer last make a Purchase? + Recent purchasers more likely to buy How often is the customer making purchases? + Frequent purchasers more likely to buy What is the customer’s return rate? What is the margin for this customer? + Highest margin spenders more likely to spend again
- 15. How to Build CRM Groups?
- 17. Data Warehouse Web Analytics Sociomantic Monetisation RECENCY FREQUENCY MONETISATION CLV Building CRM Groups CRM Groups
- 18. ACTIVE CLV: £1000 eCPA: £8 DORMANT CLV: £475 eCPA: £20 LOST CLV: £160 eCPA: £40
- 19. Single-User Approach Across Devices
- 21. The Market Perceptions of CRM
- 22. Rudimentary Level Demographics Website Behaviour Real CRM Customer Lifetime Value
- 23. ProgrammaticE-Mail Business Intelligence The Market Perception of CRM
- 24. CRM Meets Online Marketing No segmentation New vs. existing customers New customers vs. CRM groups By channel Segments of one
- 26. The Programmatic Customer Journey CRM CRM CRM
- 28. E-Mail Display CRM BI CRM Goes Display
- 29. E-Mail Programmatic Display CRM BI Programmatic Mobile/in-App Programmatic Video/IP TV Programmatic Wearables Programmatic Out of Home Programmatic in Store CRM Goes Programmatic
- 30. Joint expertise in driving CLV online and offline The UK’s largest grocery retailer with 51% online market share. World leader in customer insight and building offline loyalty. Experts in using programmatic display for online CRM segmentation. Clubcard scheme operated by dunnhumby since 1994, 17million active households. Acquisition by dunnhumby in April 2014.
- 31. Why would a supermarket want to retarget? Historically, margins on grocery items slim to justify performance display. Groceries are seen as necessity purchases. Repeat orders and upsells will generate themselves. Measurability online is complex, due to volume of in-store transactions. Incrementality is hard to demonstrate for transactions as regular and frequent as grocery.
- 32. CRM segmentation is the key to success Target customers are grouped according to custom-defined CRM segments based on recency, frequency and monetary factors. Product personalisation and recommendations are dynamic, and combined with messaging relevant for that group. Sociomantic and dunnhumby identify Tesco’s target audience and Sociomantic find cookied users online.
- 33. Matching Aims with Campaigns Recency Model Frequency Model Monetisation Model Seg. 1 Seg. 2 Seg. 3 Seg. 1 Seg. 2 Seg. 3 Seg. 3Seg. 2Seg. 1Purchased at least once in last 12 weeks Purchased at least once in last 6 months Purchased at least once in last year Purchased 1x in last 12 weeks Purchased 2-5x in last 12 weeks Purchased 5+x in last 12 weeks Spent <£50 in last 12 weeks Spent £50-500 in last 12 weeks Spent £500+ in last 12 weeks “Find and convert customers who haven’t shopped at Tesco online or in-store in the past 2+ years” “Build loyalty through a nursery programme to encourage regular shops” “Offer relevant complementary products by encouraging amends or upsells post-purchase but pre-delivery”
- 34. ‘Amend your order before 11:45 the night before’ Increase AOV. Second shop code to encourage repeat shops. Customer service/awareness message informative, helpful rather than sales-y. Upsell Loyalty Frequency Nursery Campaigns for Customer Lifetime Value
- 35. Sharing Cookie Pools to Reach New Audiences Browsed kids’ toys on Tesco Direct Show kids’ clothes from F&F Browsed bikinis on F&F Show sunscreen from Tesco Groceries Browsed lunchbox items on Tesco Groceries Show Back-to-School from Tesco Direct
- 36. Find the Right Audience for Seasonal and Promotional Campaigns
- 37. Q&A CRM? CLV?
- 38. Thank You! Gavin Wilson Chief Revenue Officer Sociomantic Labs gavin.wilson@sociomantic.com bit.ly/sociomantic- newsletter Owen Hewitson Head of Consumer Insights Sociomantic Labs owen.hewitson@sociomantic.com
Editor's Notes
- Me Honour to be here Progressive market etc --- Owen intro
- Sociomantic Young at heart but mature ecommerce company at nearly 7 years old.
- Independent up until 18 months ago – then bought Explain dh What’s beautiful about this cooperation is that dunnhumby has been doing for 25 years what we have been doing in online for nearly 7 read shared vision and shared mission According to Econsultancy’s Digital Trends Report, ‘personalisation’ ranked as our top digital priority in 2015. Key question therefore to us all is How do we, as an industry, see to this (near) future? But before we move on to this, allow me to return to the title page.
- Now, you’ll have seen the Role of CRM in Data-Driven Advertising in the agenda. Don’t worry. You’re in the right session. I will be talking about precisely just that – defining CRM, why it’s needed, and how Tesco Groceries is putting this into practice. So before I go into CRM I wanted to focus a little on buzzwordk At first though in this title I see buzzwords. You could argue there are 4 buzzwords. CRM PROG CLV PERS MARK SO lets delve into the world of buzwords to help us understand CRM
- I love buzzwords, they create interest and intrigue. Above all they make people ask questions What I love even more is you get 3 groups of people associated with buzzwords 1 Those that know what they are talking about 2 Those that no nothing about the word or subject 3 and those that pretend they know what they’re talking about I like to think sociomantic fits into the first group. Back in 2004 the buzzword was mobile. (click) Mobile and display however were barely uttered in the same sentence click Fast forward and the irony is that mobile has been a buzzword pretty much every year since. Yes, as we near 2016, mobile still has it’s challenges; screen size, banners creative, native content and its’ value? But where it certainly doesn’t struggle now is around inventory volume, inventory quality, eCPM’s, user engagement, click throughs, even purchasing It’s fair to say mobile and display are now synonymous
- Other more recent buzz words in our industry include… (read each then click) Some of these have had and will have a major impact on our industry theres no denying that Think of a world where the word RTB was first uttered – do you remember? Where programmatic got introduced; think the first time you had to explain the science and data that made programmatic what it was vs the auction based buying mechanism that is RTB. Think about the first time someone mentioned native ads to you. Or the first time someone mentioned personalisation at scale and marketing to each and every one of your target consumers – it probably sounded strange thanksfully display is now an expert at this wide scale and cost efficient 1-2-1 targeting All of these are buzwords, all have grown and developed and those that havent already,l will become a reality.
- Now theres one small buzzword I intentionally omitted from the last slide CRM? Or customer relationship management. Quick show of hands; how many advertisers in the room? How many of you use CRM across some channels? And then again How many across display? I’d like you all to try and remember where you were the first time you heard CRM? The first time someone mentioned it The first time someone mentioned it in the same sentence as display? Can you remember where you were? I do. I was on the verge of joining sociomantic. I’d just interviewed for the UK MD role back in 2012. It was with a couple of the senior team at sociomantic who mentioned the ability to use CRM data to make smarter, more personalised, more meaningful decisions in display. I nearly fell off my chair. Why? Simply, CRM wasn’t really a buzzword. And It certainly wasn’t a buzzword across the display environment. In fact, the only time it had really been uttered by marketers was with an air of disgust and disgruntlement. CRM was the bad boy, the nasty kid at school, public enemy number one. Those three small letters filled advertisers with fear. How could they better customer relationship management or CRM via display and turn it into something meaningful?
- In business, I always like to simplify things. Break it down. What is the real problem we are faced with? The solution inevitably becomes clearer. So according to a business dictionary this the true definition of CRM is…. (read) Now that’s a bit of a mouthful. There’s a lot of jargon in there but some words make sense. The reference to ‘Companies goals’is importnat – anything that can help a marketer understand these companies goals must be beneficial The words ‘identification of customers’ –I guess you could look at this as the who of marketing The words ‘Satisfaction of customers’ could be viewed as the what of marketing eg what should consumers see to satisfy them And ‘stated and unstated needs and wants’ – the why of marketing eg why are we even bothering to show this consumer a message at all Now when I was putting this deck together I realised just how simple CRM was. Just like business, or a division of business, it’s the who, what and why that makes things work. Get this right and you’re on the right path. All of this is underpinned with the end customer who is at the heart of all of this. CRM fundamentally gives them the best experience of a brand; it ensures the brand talks to the consumer in the right way, it makes the consumer feel the brand understands them
- Which brings us back to the star of today’s conference: the customer. Some business fixated with publisher Some with where you but media All key, customer is key though
- Some of you may be thinking this is a message since day one of the internet. In fact, it’s todays messaging Without a customer-centric approach, It still could be data oriented but without customer centric data it can lead to the worst sort of digital marketing
- Customers have come a long way in the last 3 decades: 1989 was the age of big hair and even bigger technology. The current world is obsessed with the latest gadgets and all of them are connected. Whilst tech has changed, so has the consumer….
- Read slide This is all fundamentally important Why, well without it Banner blindness and alienating customers with over exposure --- How can we use CRM to address these fundamental changes?
- Whats key is buisinesses dont get fixated with just CRM but instead CLV or customer lifetime value. To me CLV is made up of three more letters: RFM Read three points
- So how do you build intelligent CRM groups from a RFM approach
- To start with lets lookat which problems are the advertisers facing? Different data silos whether it be via analytics, or a data warehouse. Retailers without own data warehouse it‘s real problem to get and join up this this information: They often struggle with: user level not a category level info Getting data in real time Using data for the CLV calculationand to create different crm groups --
- What is key ina ll of this Is you get the margin and return information on a user level Combine this information with the web analytics information Calculate the clv on a user level Group them to different CRM groups Pass this information to your vendor and advertise according to your CRM logic With RTB this is of course possible
- Marketers who plan their media spend using CLV are able to focus investments on the channels, segments, and even individual users with the highest potential for revenue growth in the long-term. In this example, for this one retailer, some types of customers seem to be easier to convert and worth a lot. By leveraging more of the data you have about your customers, you can now customise how you pay for them. The idea is to go away from paying a flat -amount for all conversions and instead paying different rates for different types of customers, based on what you know about their overall profitability. It’s basic marketing science that you all know already.
- Once customers are identified Satisfaction of the customers can be achieved through a single user approach Achieved through yet another buzzword of Cross Device Targeting is Messaging can be adjusted According to the device Taking into account the behavior from other devices Taking into account the customer journey and at which stage is the user already All can be set with a Different KPI per User/Device/where he is in his Journey Effectivey all that understanding shouldn’t just be restricted to one channel or one media source. CRM should allow consumers to be spoken to through highly relevant and highly personlaised media no matter what platform they are on. CRM allow you as advertisers to engage with each and every customer, agnostic up of device, and no matter where they are in terms of engagement with your brand
- And that allows you to have a bespoke pricing AND messaging strategy for each and every customer And this leads to highly intelligent 1-2-1 marketing At scale
- So I’ve explained a little bit about CRM groups and ideally how to build but what does the market feel about CRM
- ESOL There are some misconceptions about CRM.. Many think about this on a rudimentary level Demographics Age/gender Monetary impact not included Website Behaviour **ANIMATED SLIDE: But with Real CRM, we‘re considering: Customer Lifetime Value Best case is the R/F/M method It is all about the user Messaging Investment
- I believe many markets perception therefore of CRM and programmtic media is fundamentally wrong The market in many cases feel CRM is still only synonymous with email marketing, or with vast realms of Business intelligence making it a very difficult process to use in any meaningful way. And that programmtic display is perhaps an area that isnt even a CRM capable channel
- My perception is different. My perception is that CRM usage across online marketing need not be feared, nor should it be overly complicated CRM across online marketing of course can still be separated by channel; using 1st party data to talk to customers in siloes. Now thats fine, but from a customer point of view, they may get mixed media messages and signals from you as the advertiser if each channel doesn’t talk Many brands get however that CRM can be as simple as separating your brand new vs existing customers and applying that logic across all channels. Think of it as a simple split of someone that has been to your site once but bounced vs someone who has been to site once and purchased. Surely each should be spoken to and engaged with via different media messaging in the future? Well this is rudimentary CRM. Or what about segmenting that existing customer base even more to people who’ve bought more than once? Or more than 5 times? Or more than 6 months ago? Or less than 6 months ago? You get my point Eventually, through clever segmentation, you talk to segments of one, creating a bespoke and tailored programmtic and real time campaign for each and every one of your customers, no matter how engaged they are, each time recognizing where they are in the brand engagement funnel
- Now in display, you can get even smarter. Imagine these segments of one, and adding in further refinement such 3rd party data Or even more refined customer or 1st party data. Then, you have a truly intelligent display campaign using CRM data at it’s heart. And still, it’s all relatively easy
- As I said, I like to simplify things so I asked the marketing team to try and illustrate this. The gentleman here searches for a bike whilst on a painfully overcrowded london tube – he’s fed up of getting the train each day and not exercising, so via the searches on his mobile, tablet and laptop, smart data usage and search behaviours tells us this individual should be shown relevant bike advertising relevant for his needs. Now once this individual buys his bike, data tells us he’s an active buyer, we know what he bought, when he bought it, we know dozens of data parameters on him. And of course, we know he only bought a bike. Again, through the use of data and device agnostic 1-2-1 media, we can in turn show this individual bike related equipment. In this case a cycle helmet to make his cycle to work each day safer. Now Falling into another customer group, our gentleman then moves into that high value, high loyalty bracket, again different to other customers and thus treated uniquely with different media, perhaps even going as far to use data to determine if certain cycling clothing, is relevant for this individual Ultimately, we’ve taken this individual on a journey; they feel the brand knows them, the brand creates a loyalty and up sells to the customer. Both parties win. In this case, provided the service and delivery is positive which is where you as brands come in, this customer is loyal for a lengthy period of time. Who knows how far CRM could go here; It could even decide to show him new summer cycling clothing when the seasons change or understand when to show him new products based on the average life of certain products
- So CRM in display, is really simple and it can also be a perfect complement to other channels such as your email marketing campaigns where you may be using CRM already The same way you segment your user, send specialized offers, and conduct churn management using email campaigns, you can do all of this in display as well as apply smart pricing or smart messaging or smart segmentation or smart product prioritization And this helps you sell more relevant products to more relevant people more often AND it helps channels be more aligned
- So I’d like you all to think about those three small letters of CRM and not be afraid; don’t be put off with how complex things may appear Instead, think simple. Think about how your email campaigns are structured, think about you engage with different audiences. Think about how you try and instill that loyalty and retention Then think about the benefits of doing all of this in display First The real time notion pulling in ever changing data making it much more relevant to the end customer Second of all The highly personalised media ads talking 1-2-1, all of the time and making people feel unique, that the ads for them are bespoke and highly relevant And 3 that you can not just talk to consumers on this 1-2-1 basis but on a large scale too, treating each user with media units that delight them and not frustrate them due to their utmost relevance and doing this across the globe
- We started with buzzwords and a little stargazing and that’s where I want to end If we take those 3 small letters in CRM and think big by joining them to programmatic in general – what could the future look like? Think about your business and the use of programmtic in mobile and in app and using CRM to enhance this Think about your business and the use of programmtic offline or in store or out of home and using CRM to improve the customers satisfaction And think programmtic and CRM across Video or even TV and the future capability here I urge you all to think about programmtic and CRM in display now as I believe it’s the catalyst for a more joined up future It acts as the gel that allows you to begin to see that holistic or 360 degree view of the customer, something I’m sure you all strive for. It allows you to use that wealth of data you are sat on in an intelligent and meaningful way. Above all, it’s simple. So start today. Separate that new vs existing customer. Separate that repeat shopper with that infrequent buyer, separate that lapsed buyer with an active customer. Either way, don’t be afraid of that buzzword and those three small letters C..R…M.
- PF The partnership – dunnhumby owned by Tesco; Sociomantic owned by dunnhumby dunnhumby the experts in offline loyalty; Sociomantic built its reputation on CRM integration using first-party advertiser’s data
- PF It’s not about selling more carrots Programmatic display activity for a supermarket makes no sense if seen purely as a way to sell typical grocery items The margin in groceries does not justify the investment, and consumers will purchase anyway, predominantly in-store
- PF But from the perspective of building more loyal, valuable customers through smart CRM segmentation and real-time targeting the activity has a strong business case Custom groups identified through dunnhumby’s data and identified online through Sociomantic’s personalised targeting Activity worked back to a CPA goal – transparent, measurable, addressable
- OH/PF Examples of what is possible Groups identifiable using simple RFM segmentation model as applied to Tesco groceries customer over 12 week period, and identified online by Sociomantic Campaign aims that can be achieved thanks to this – examples of lapsed, nursery, and amends campaigns All about establishing and identifying CRM segments because not about simply getting people to buy. All quotes from the brief. First one most difficult as highly lapsed customers. Amends/upsells is ongoing – messaging being tested. Dynamic recommendations but Christmas e.g. very key for upsells
- OH Taking just one example from Tesco Groceries of how this could look practically – running an end-to-end programme with each campaign targeting the user at a different point in his/her journey across a 12 week period. Drives engagement, loyalty, and lifetime value – Tesco know that getting someone beyond the second purchase greatly increases their likelihood to become a long-term customer Because these are existing customer groups, engagement and having the right conversation with the customer as important as driving a repeat conversion to avoid digital violence
- Shoppers in one Tesco brand may have a strong propensity to convert for another. Sharing cookie pools between them opens big cross-sell opportunities and makes ads more relevant. PF With Sociomantic tags being present across the Tesco estate, opens possibility to share cookies of users between brands for relevant cross-sell messaging. Scale of Tesco’s product offering can be used to each campaigns’ advantage by taking signals of propensity from one brand as conversion factors for another. Browsed kids’ toys on Tesco Direct – show kids’ clothes from F&F Browsed bikinis on F&F – show sunscreen on Tesco Groceries Browsed lunchbox items on Tesco Groceries – show Back-to-School on Tesco Direct
- On Halloween, F&F drew from Tesco Direct’s cookie pool, targeting shoppers in its Baby & Toddler category to promote a seasonal kids’ fancy dress offer PF Can run entire campaigns on this basis, one example from last year – Customers who have shopped within Baby & Toddler on Tesco Direct are the perfect audience for a Halloween campaign for kids’ costumes.
- I‘d like to only have the titles and images here. I want to explain what are the next steps in our partnership prospecting (already live) and mobile. First results on Prospecting is a 0,13% CTR and a CPM below 1€. Ltur: nach erfolgreichem Split-Ausbau der Kooperation, Prospecting. Mehr Augenmerk auf mobile, deshalb auch mobile Kampagne