Learn the 4 Essential Requirements, Part 3 of 4, Slides 153-228

Transforming Your
Customer Experience:
Learn the 4 Essential
Requirements
Part 3 of 4

©2012 Ernan Roman Direct Marketing

Additional VoC Lessons

Opt-In Preference-Based
Personalization as a
Competitive Differentiator

153 Step 2: Opt-In Engagement

The bar has been raised dramatically for
Even among loyal
online and offline marketers:
customers, expectations
of marketers have • Good customer service is expected and
changed due to:
is a powerful competitive differentiator.
Tough economy
• Increased expectations for value at
Growth of many online
and offline options for
competitive prices.
making purchases:
• Better shipping and handling terms.
• Personalized offers and experiences based
on their individual interests:
“I welcome the targeted
“When I go to the emails, suggestions,
Amazon site, I feel like recommendations. They are
they know what I like.” working to send me only what
I told them was relevant.”


As a result, customers • Personalization is viewed as a service and
and prospects view
benefit, not just a sales tool.
personalization as
the next step in a
company’s commitment • Online shoppers view personalization as a
to service excellence. requirement for their preferred shopping
venues, rather than as simply a perk.

• Many BtoB decision-makers use Amazon
as their point of reference regarding
expectations for BtoB personalization.

• BtoB and BtoC marketers have to at least
match Amazon!


Meaningful Personalization

 Customers are also savvy regarding the
type of personalization they want.
 They want it to be more than just
transaction-based.

“I expect more than just ‘we’ve
looked at everything you’ve bought
over the last X years and this is what
we think you’ll like’. With today’s
technology, I expect much more
than that!”


Your Top 3 Takeaways?

1.

2.

3.


Step 2
Step 2: Summary
Opt-In Opt-in is not about passively agreeing to receive email.
Engagement It’s about actively opting in to a relationship and self-
profiling your preferences and aversions.

Your VoC-based opt-in database should include at least,
the following information regarding individual’s:
• Needs
How to Create
• Decision making process
Powerful Opt-In
• Offer
Databases to
• Message
Drive High Impact
• Timing
Personalization
• Media Preferences.
Strategies
Set as your goal: Opt-In rates ranging from 80% to 95%.


Step 2
Step 2: Summary
Opt-In Five Ways to Win Consumer Confidence:
Engagement
1. Consumers have to trust that the company will
adequately safeguard their information and use it
in a responsible way.
2. “Responsible” means that consumers must believe
that their information will not be rented or sold.
How to Create
3. “Honor my preferences” reflects the expectation
Powerful Opt-In that their “Opt-In” self-profiled preferences will be
Databases to used to drive increasingly targeted communications
Drive High Impact and offers... and suppress those that are not
Personalization relevant per the expressed preferences of
individual customers.
Strategies


Step 2
Step 2: Summary
Opt-In 4. The value consumers receive in exchange for
Engagement providing in-depth information must be obvious
and compelling. Consumers must see an obvious
improvement in relevance. Applies both to online
and offline experiences.
If the value is not obvious, consumers will assume
you have betrayed their trust and expectations.
How to Create
Powerful Opt-In 5. Consumers must see proof that the company will
Databases to be able to deliver on requirements 1 through 4
Drive High Impact above, not just once, but consistently over time.
Personalization
Strategies


Assignment

Tomorrow, be prepared to discuss 2 improvements
to your marketing based on today's learnings.

161

Drawing for 2 Autographed Books:


Step 3:

How to Use the 5 Principles of Multichannel
Marketing

163

Homework Assignment

Let’s discuss 2 improvements to your marketing
based on yesterday's learnings.

164

Step 3:
How to Use the 5 Principles of Multichannel
Marketing
Drawing for 2 Autographed Books:

165 Step 3: Multichannel Marketing

Step 3: How to Use
the 5 Principles of
Multichannel Marketing

Step 2:
Opt-In
Engagement

Step 1:
VoC
Research

Step 3:
Multichannel
Marketing

On any given day, the
Message Overload
customer will be
exposed to nearly
3,000 media
messages.
They will pay
attention to 52.
They will positively
remember 4.
The chance they will
remember your ad is
0.013%!

D. Mastervich, VP, Sales Strategy, U.S. Postal
Service, VDP Conference Presentation


Integration
Entire Customer Experience must be integrated:
Must
• Acquisition
Encompass: • Conversion
Message • On-boarding
• Retention
Media mix
• Renewal
Organization
Employee Customer Experience must be integrated:
And…the
Customer Experience • Performance metrics
• Compensation
• Training
• Retention
• Renewal


Integration
If Integration is so logical…why are so few doing it well?
Must
• Turf
Encompass: • Politics
Message • Fear of change

Media mix
Organization How can you be the agent of change?
And…the
Customer Experience


“Per the DMA,
Let’s Define “Relevance”
93% of marketers
using multiple channels 1. Right message.
have attempted to
integrate their 2. Right time.
messaging.
Only 27.4% of these 3. Right person.
said their efforts
are ‘effective’. . .” 4. Delivered per that individual’s media
DMA Report, “Rowing preferences.
as One: Integrated
Marketing Today,” 4/11
Integrated,
multichannel
irritation!
Without this, all we
have achieved is. . .

Shopper Sentiment: In-Store, Online and
Via Mobile
 Online:
• Overall Favorite: 59%
• Easiest: 68%
• Most Convenient: 68%
 In-Store:
• Most Reliable: 69%
• Safest: 77%
 Mobile:
• Most Convenient: 38%
• Easiest: 27%
• Safety: 7%
(vs. 22% Online)
Nielsenwire 6/6/12


Safeway: Multichannel Innovation

 Personalized offers and
prices based on shopper’s
behaviors, habits and profile
information.
 “Though use of personal
shopping data might raise
privacy concerns, retailers
are counting on most people
accepting the trade-off, if it
Safeway employee signing up a shopper for
means they get a better custom offers.
price for a product they
want”.
New York Times 8/9/12

Consumer Channel Preference by Category

Epsilon Targeting


Channel / Media Trustworthiness

Epsilon Targeting



Requires precision timing and synchronization of multiple media
and channels.
Precision integration of traditional and digital media and contact
points.

Per individual’s opt-in
preferences. . .

IDM® is a registered trademark of Ernan Roman Direct Marketing.


5 Principles of Multichannel Marketing

5
4
3
2
1 1: Start with the Customer (VoC).


Per VoC Findings

Today’s shopper is multi-dimensional;
multi-channel and multi-purpose. Per a recent VoC:
A customer described
Many report using multiple media, often how she likes to watch
at the same time. the TV shows while
browsing the website.
As she finds items to
Alert! purchase, she puts
them in her shopping
The channel used for the purchase is often
not indicative of their shopping habits. cart, prints it, and…
Most used multiple media to shop, calls Customer Service
and often, to purchase. to place
the order.


“. . . Multichannel customers spend Personalized multichannel
two to three times more than communications based on
single-channel shoppers. . . customer’s individual
Consumers who engage with the preferences is a competitive
company across three or more differentiator.
channels spend six times more
than the average customer.” “If I got the information that
was focused on the stuff I
Glen Senk, CEO of Urban Outfitters was interested in, it would
be easier than sorting
through all the products
they have. It would be so
much faster and more
convenient and make
my shopping easier.”



5
4
3
2: Create processes for generating feedback from your social

2 media channels and your sales and service reps. This will
provide ongoing qualitative and quantitative VoC guidance.



VoC Guidance from CSRs
 Based on VoC feedback from  Results:
CSR’s, Nordstrom’s upgraded • Immediate customer
their website and inventory adoption.
integration so any item in
• 8% higher sales.
any store (not just
warehouses) is shown on • Fewer markdowns.
their website and shipped to • Better inventory control.
the customer’s nearest • A boost to customer
store, with a notice to the loyalty.
customer. • More add-on store sales.


1. Enter your
search criteria

2. Select your
item and
method
of delivery
182
Step 3: Multichannel Marketing

3. Select your
location for
pick-up or have
it shipped!



5
4
3 3: Synchronize your multichannel mix with
precision and value.




QVC, 9/23/12

Multichannel / Multimedia Customers
Per QVC, today’s customers are uniquely Multichannel.
Keep in mind:
• Be accessible when and where the customer chooses.
• The multi-platform approach must be seamless, frictionless,
and agnostic, i.e., every channel must provide a good
customer experience.
• An integrated multi-platform strategy will increase sales.

QVC, 9/23/12

Precision Integration: Response Compression

Response
Traditional Compression

Phone
Response

Response
Phone
E-mail /
Mail
E-mail / Mail

Time: 1 – 2 Weeks Time: 1 – 24 Hours


Precision Sequencing and Timing

Web and digital synchronized with beginning of Publicity and continue

Print Email #1/ Outbound Email #2/
Publicity
advertising Mail #1 Calls Mail #2

1 week 1 week 1-24 Per opt-in
hours preferences
after
receipt


Web:
“Per Forrester…only 3% of sites earned a passing score in terms of the user experience.
3 Reasons:
1. Text legibility and clearly detailed privacy statements. Recommend using 10 to 12 point
dark Sans Searph font against a light background.
2. Menu names aren’t clear and people don’t know where to go.
3. Content and functionality…which are not…based on deep customer research.
“It’s incredibly important to understand your target users…and how you can help them
on your site.”

Per findings by Bronto Software: Poor site usability…among 100 online retail brands results
in an average 70 percent cart abandonment rate.

1 to 1 Media, 5/28/12


Sephora’s Media Integration
Sephora revamped website and mobile apps to integrate in-store and online experiences.
Online searches and purchases are saved to a customer’s profile if they are a member of
Sephora’s loyalty program, Beauty Insider.
“It’s an opt-in service, because Sephora recognizes that not all consumers want to be
tracked. Currently, 20 Sephora stores will have iPads from which store associates
will be able to pull customer data to help them with purchases…
A lot of the information we gathered was from how we would ask for that
information in a store”, Dolan said of the new, targeted online search, adding that
“customers can search across 25 different criteria including age group, SPF, skin type
and more. We have all expertise of Sephora’s staff built into a web interface, and
that’s extremely powerful.”
Bridget Dolan, VP Interactive Media. DM News 4/19/12


Multichannel
Email:
Success Factors
• “Email may be the base of your communications with
Unless you obtain me, but I’m getting too much junk.”
opt-in message and • “Make it relevant and timely!”
media preferences
and aversions. . . • “And, if it’s really important, send it to me by mail.”

You’ll simply be
engaging in
multichannel
irritation!


10 Minutes Prior…


From: Daniel Brendler [mailto:D.Brendler@EastHillsChevrolet.onesource1.gmtorque.com]
Sent: Monday, June 28, 2010 11:47 AM
To: ernan@erdm.com
Subject: We received your request for information

Long Island's Premier Chevrolet Dealership!

.

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contact me directly for an appointment to discuss your needs.

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the link).

When you are in the market for a vehicle, please let me know and I will assist you with current incentives and finance options.

Regards,

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GM Certified Internet Sales Manager
East Hills Chevrolet
DESK: (516)869-8100 X 211
Cell: (516)383-3267
Fax: (516)869-9455
dbrendler@ehchevy.com contactchevydan@gmail.com

VoC-Based Messaging


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Sent: Saturday, September 25, 2010 4:37 PM
To: Ernan Roman
Subject: Your initial Carbonite backup is complete

"FEEL GOOD" NEWS!
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VoC DRIVEN
MARKETING


Multichannel Direct Mail:
Success Factors • “Mail should be specific to my role, to what I do all
day long.”
Unless you obtain
• Direct mail should be used as a highly personalized
opt-in message and and relevant communication.
media preferences
and aversions. . . • Direct mail format should reflect value and include:
personalized letter, impact addressed envelope and
You’ll simply be live stamp.
engaging in • Post card mailings are the
multichannel antithesis of this and
irritation! generate low ROI.


Direct Mail Versus Email

Finite Universe of Prospects: 50,000
Profit per unit sold: $200

Direct Mail v2 Direct Mail v1 Email
Cost per solicitation $5.00 $1.50 $0.05
Response rate (sales %) 10% 2% 0.13%
Cost per sale $50.00 $75.00 $38.46
Total # of sales 5,000 1,000 65
Profit $1,000,000 $200,000 $13,000

Can you run a business with 65 sales?



 In Step 4, titled “How to Increase  Field sales: Must be trained in
the Power of Your Online and disciplined Pre-Call Planning and
Digital Marketing, we’ll Relationship Selling.
have a detailed discussion of • Must be integrated with your
the following: other contact points for
• Web maximum responsiveness and
• Digital media, including: cost-effectiveness.
 Twitter  Inbound calls: Highest value,
 Facebook. highest conversion medium.
 Outbound calls: Proactive, service-
oriented calls to opt-in lists
increases responses 500% - 700%.



5
4
4: Re-conceive Inbound as a high value customer interface.
By definition, Inbound callers are more 1) Qualified, and
2) Likely to spend.

3 3: Synchronize your multichannel mix media with




Inbound Calls Should Provide High Value

However, when inbound
customers call, what they
frequently encounter
are human robots!
Customers have become
conditioned to poor service.


High Value Inbound Calls

What does it cost you in
marketing and promotion
dollars to generate an
Inbound call?
What do your customers
experience when they
call your 800#?


Inbound as a High
Value Experience
Increased sales

Targeted
outbound call

Calls
Personalized
fulfillment
Via email, mail or fax.
Proactive, highly
trained reps



5
5: Customer Lifecycle Marketing: 1) Communications must be
deployed at appropriate points in the buying cycle, and
2) Contacts should be driven by opt-in preferences.

4
4: Re-conceive Inbound as a high value customer interface.
By definition, Inbound callers are more 1) Qualified, and
2) Likely to spend.

3 3: Synchronize your multichannel mix with




Three Key Phases of the Customer Lifecycle

Pre-Sale
 VoC-driven integrated multichannel
contacts.
 Must gather opt-in preferences.

Sale
 Not a “close.” Instead, it’s the
beginning of proactive, value-based
relationship development.

Growth and Retention
 Requires ongoing proactive engagement, i.e. “How can we better serve you?”
 Ongoing value-added justifies price premium
 Proactive generation of repeat sales.


Customer Lifecycle Marketing

Retention Retention
Frequently overlooked. Analyze high revenue/profit
Too much focus on acquisition. potential accounts.

Analyze reasons for your Are you providing true value?
churn/inactive rates: Do you really know what they do
• Customer demographic may and how they use your products?
not be a good fit. Are they being serviced by all
• Industry. your channels?
• Your sales reps.

• Lack of proactive marketing.


Are You Investing Enough in Your Customers?

Top Marketing Investment
producing
customers Top producing customers

Good
customers Good customers

Dormant
Dormant customers & customers &
Qualified prospects Qualified
prospects

Suspects Suspects

Marketing Segmentation

Doug Stein
President
HMS National, Inc.

Doug was a distinguished Fortune 500 consultant for Accenture in the 1990’s.
There he helped manage some of the firm’s most prominent projects while also
being key to the development of significant corporate solutions and industry
offerings that notably increased market share and profit for the world’s largest
consulting firm.
Doug Stein
President In his current position, Doug is the senior executive at HMS National responsible
HMS National, Inc. for developing and delivering innovative growth strategies in a historically
mature and commoditized industry.

dstein@hmsnational.com
www.hmsnational.com


Case Study

How Voice of Customer Insights
Helped Change Our Culture,
the Customer Experience...and
Increased Renewals Over 50%


A home warranty helps homeowners avoid unexpected
home repairs which are often expensive.
The warranty provides coverage against mechanical
failures for many major systems and appliances,
30+ year old privately coverage that is not provided by most homeowners’
held company. insurance policies.
Market and sell home The term of the warranty is typically one year.
warranties through
real estate agents.
Traditionally, Home Warranties cover many systems
and appliances, including:
Use direct marketing to • Air conditioning and heating systems
renew home warranties
• Refrigerators
when the one year
contract, initiated during • Water heaters
purchase of the home, is • Washers/dryers
approaching expiration. • Ovens/ranges
• Electrical systems
• And more. . .


3-Steps:
Goals of the VoC
Know much more about our customer’s needs. . .
Significantly and use this to drive our marketing.
improve renewal
rates. Establish meaningful opt-in preference-based
relationships.
Improve the
Deploy our
customer
multichannel
experience across mix customer
channels. preferences.


VoC Research Objectives Sample
Step 1 • Stimulate greater renewal rates Customers who
renewed
• Identify what home warranty means to
customers Customers who did
Know Much • Determine how customers define the
not renew
More About value of HMS Segments:
Our • Evaluate claim experiences; strengths and • Home buyers
Customer’s weaknesses who purchased
home warranty
Needs. . . And • Measure level of satisfaction with HMS
Use This to • Home sellers
• Analyze perception of marketing who purchased
Drive Our communications home warranty
Marketing • Gain insights into product enhancements • Filed claim/Did
• Determine willingness to opt-in and self- not file a claim
profile preferences to drive targeted
communications


Voice of Customer Research Learnings
Regardless of The customer Real estate
Customers often
who purchased experience, not agents often
calculate the
the warranty, just the amount drive the
value of the
(i.e. home seller of claims paid, customer’s
warranty if
or home buyer) significantly perception of
they consider
engagement impacts renewal the value of
renewing.
is low. behavior. renewing.

Service
enhancement Customers
Customers are
opportunities expect HMS to
receptive to
identified: be proactive
self-profiling
focus on the throughout the
their interests
end-to-end claims handling
and preferences.
customer process.
experience.


Opt-In Overview
Step 2
Key 1: Collect preferences, (per the Reciprocity of
Establish Value Equation)
Meaningful
Opt-In
Key 2: Deploy truly personalized communications
Preference-
Based
Relationships Key 3: Implement Steps
1&2 above, per privacy
guidelines


VoC-Driven Strategies
Step 3 VoC learnings helped develop more effective strategies for:
• How to engage customers throughout the customer lifecycle
including during the renewal process, e.g. telemarketing, direct
Deploy Our marketing, auto renewal.
Multichannel • Which product to offer, e.g. cross-sell or up-sell.
Mix Per Opt-In
• What additional information to offer regarding home repair and
Preferences maintenance.

Phased implementation began in 2009,
with a major phase recently
implemented in mid-2012.


Implementation Per VoC Research

Pre-VoC, our initial touch point with our customers was informational without
being engaging.

Previous fulfillment kit:
Transactional delivery of
warranty documents



Pre-VoC, our initial touch point with our customers was informational without
being engaging.
Truncated first page of
warranty agreement

Terms and Conditions
made up bulk of the initial
customer touch point.



Post-VoC, we are leveraging this early touch point to immediately engage
each customer.

Added
personalization

New tonality
focused on engaging
the customer



To successfully engage customers, several elements are incorporated from VoC
learnings.

Welcome
page



Created valuable content. This was
not defined by HMS, but instead
by customers and prospects.


Renewal Solicitation Stream
•Having re-engineered upfront customer touch
points, HMS embarked on the overhaul of the
renewal solicitation stream.
•Previously a traditional direct mail process, it was
updated to a highly customized, multi-channel
marketing campaign.
•The solicitation process was engineered with
precise time intervals, to optimize media synergy.
•The overhaul felt logical and accurate, it was
informed by and therefore in part designed by our
customers.



Example: Effective Direct Mail / Touch 4
VOC Insight: Prior marketing efforts didn't strongly motivate
customers to rethink their decision not to renew.

Tactic: Utilized a 3rd and final direct mail touch 20 days prior to
expiration. This oversized piece was printed on 100# Carolina
C2S paper and when folded was 6 X 11 to stand out and create
a large space to call out the impending expiration and the risk
factors of not renewing.

Creative: Designed to be a prominent, large-font, bold piece,
the intent of this mailer was intentionally simple - to cause
customers to think; "how would I afford the cost for failed
items in my home"? It had urgency, call-to-action, and an
incentive for non-claimants.



Customer engagement through a relationship-oriented call
• Pre-VoC, multi-touch renewal process was Post-VoC, piloted service-
direct mail driven. oriented telemarketing with
focus on certain segments and
• In the VoC, customers expressed receptiveness to, and / a
the results were as positive
and a need for, a dialogue with HMS. as the VoC projected.

• The VoC enabled multi-channel marketing
that drives incremental sales. Noteworthy results from
the calling initiative – a
• Cost of telemarketing is several times 20% increase – was quickly
higher than mail, but the incremental realized, with far greater
sales offset the expense and optimize lift in certain segments.
profitability.


Learn the 4 Essential Requirements, Part 3 of 4, Slides 153-228

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