Combining Digital Media and Customer Interactions for “Connected CRM”

Combining Digital Media and on November Interactions
Presented Customer 4, 2009
for “Connected CRM”

South Florida Interactive Marketing Association

April 12, 2012

© 2012 Merkle Inc. All Rights Reserved. Confidential
1

Agenda

• Who we are

• What we believe

• CRM in a digital world

• Q&A

2

Who We Are
Our experience and expertise make us a leader in CRM, shown by our clients‟ successes

3

Company Overview

Distinctive experience Extraordinary expertise
• Privately held by current management since 1988 • 1,500+ Employees
• 150+ world class clients • 150+ statisticians producing over 1,000 models/year
• Manage over 125 marketing databases • 200+ dedicated digital professionals
• Manage 1.6+ petabytes of customer data • 500+ marketing technology professionals
• Inform over $10 billion marketing decisions annually • 100+ creative professionals

Sustained 25% growth since 1989 Awarded and recognized

• Ad Age A-List: “Agency to Watch in 2012”
$400
$360 • Largest privately-held agency in U.S., Ad Age „11
$350
• 8th Largest Direct Marketing Agency, Ad Age ‟11
Revenue in millions

$303
$300
$255 • Recognized by SmartCEO Magazine as a Future 50
$250 Company „11
$211 $223
$200 $180
• NCDM Awards ‟04, ‟05, ‟06, ‟09, ‟10, „11
$148
$150 • Recognized by Forrester ‟03, „06, ‟07 &‟10
$100 • Multiple MAXI Award Winner ‟10 ‟11
$50 • Multiple DMA Innovation Award Winner „10
2006 2007 2008 2009 2010 2011 2012E

4

Our clients represent many of the best global brands in the world

5

The Customer Relationship Marketing Agency

CRM Outcomes
Integrating diverse capabilities
Increased customer value | Improved marketing ROI | Improved media effectiveness

Through optimizing customer touchpoints
Direct
POS Phone Site Mobile TV Radio Display Print Social mail Email Search

Integrating diverse capabilities
Consulting services | Database marketing services | Creative & communications services | Digital media services

Utilizing industry experience to drive strategy
| | Nonprofit | Life sciences
Insurance & wealth Retail banking &
management
| consumer finance
| Travel, media & | Nonprofit | Retail & CPG/OEM |
entertainment
Life sciences

Delivered across multiple engagement types
Consulting | Marketing services | Agency of record

6

What We Believe
Marketers play a critical role in creating a long-term, sustainable, competitive advantage
for their organizations

7

Marketers can again create long-term sustainable advantage

1950s+ 1998+ 2008+
Age of brand Age of channel Age of customer
Creation of national Direct-to-consumer business Low cost 1:1 targeting and
brands model transformation engagement
(Consumer to Consumer)

Social networks & digital media
(Consumer to Brand)

Internet and eCommerce
(Brand to Consumer)

National media and mass marketing

“Contenders”

8

Customer strategy is a preemptive business strategy

MACRO trends are changing the landscape
The
Socially Challenging
digitization of
enabled mass economic
media and
engagement climate
channels

And consumers And marketers are
are changing responding by
Social networks as a Putting the customer at the
purchase advisor center of business strategy
Buyer User

Evolving consumer Developing a 360º view of
expectations the customer

Likely attrition Developing advanced
Changing consumer Suspect Prospect customer
buying process insight, targeting and
measurement capabilities

Shift in media Engaging consumers in more
consumption patterns effective and productive ways
Non-buyer Ex-customer

9

CRM Transformation – Business Models Matter

INTEGRATION Identified Non-identified LOYALTY
FOCUSED FOCUSED

Direct
Financial Retail
Services

Indirect
Healthcare CPG

BUSINESS ENGAGEMENT
MODEL FOCUSED
FOCUSED

10

Marketing functions are both brand- and customer-focused. Integrating
these is the key to successful marketing.

The Power of the Universal Relevant to the Individual
Brand Focused Customer Focused

Strategic integration
Qualitative Quantitative
“Big Ideas” “Facts”
Attitudinal Behavioral
Media
Universal Unique
Digital
Mass
Direct

Brand advertising Consumer marketing

Brand creation Brand activation

Implementation

11

Customer Relationship Marketing evolution

High value

Customer Value Optimization
Customer Level 5 fully integrated programs & campaigns
focused
Enterprise
engagement Contact Optimization, multi-touch campaigns,
Moving Level 4 integrated measurement platform
from
Level 3
to Level 4
is hard. Basic multi-channel, model integration,
Level 3 and campaign automation
Campaign
focused
Single campaign, simple data, little offer
Level 2 and customer customization
Business unit /
media
engagement

Level 1 Infrastructure focus, basic capabilities

Low value

12

How do we compete in
this new connected
world?

13

A new approach to customer interaction

A systematic way to identify, serve and retain high-value
customers better than competitors by delivering customer
interactions that improve financial results, create
competitive advantage and drive shareholder value.

14

Optimizing customer behavior is how you make money

Relevant and timely programs increase short-term revenue
profitability and long-term customer portfolio value.

Consideration Purchase Engagement Loyalty

Optimized
Dialogue

High

Up-sell
Customer
value
First purchase
Average

Low

Time

15

But in reality, optimizing behavior has become increasingly complicated
as channels and media options grow

How do we operationalize this complexity?

Brand Value proposition

Position Expectation Price Product

TV & Radio Web

Print
Store
Mail

Channels
Media

Email Phone

Display Customer portfolio
Partner
Social

Search Care

Purchase Promotion Experience Customization

Sales Service

16

Domains

There are six core domains that must be mastered in order
to create sustainable competitive advantage.

Information Insights Optimization Targeting Measurement Agility

Ability to organize
Ability to create in a fashion that
Ability to micro metrics as allows you to
Ability to Ability to allocate
Ability to create target, customize currencies and respond to changes
identify, segment resources that
and manage a and personalize measure the in
and manage optimize ROI
360º view of the media and incremental customer, competit
high value and long-term
customer channel impact of each or or marketplace
customers customer value
experience marketing behaviors faster
activity than the
competition

17

Connected CRM landscape

Non- Likely Ex-
Suspect Prospect Buyer User
buyer attritor customer

Up-sell Acquire Qualify Cross-sell Retain Entangle

Deselect Qualify Win back Activate Renew Stimulate

Strategy & Direction Create & Customize Manage & Perform
• Business strategy • Program development • Insight management
• Brand strategy • Offer creation • Campaign management
• Customer strategy • Content creation • MRM
• Segment strategy • Message development • CRM/media mix mgmt
• Offer/treatment strategy • Treatment • Segment management
• Media strategy • Personalization • Lead management
• Multi-channel strategy • Customization • Content management
• Customer experience strategy • Experimentation management
• Performance management

CRM Management Systems
• Metrics and incentives • Decision authority • Organizational structure
• Optimization and business rules • Governance • Roles and responsibilities

Analytics, Data, Applications, Tools and Infrastructure
18
18

Role of the CRM Knowledge Center in Connected CRM

Customer Portfolio Management
Customer Cross Sell / Up Loyalty /
Awareness Engagement Experience Purchase
Acquisition Sell Retention

Customer Value Management Segmentation Management Measurement / Attribution Management

Channels Media

Inbound Interaction Campaign Outbound
CRM Knowledge
Management Management
Informing Center

Informing
CDI &Warehouse
Data Marts
Op Data Stores
Systems Marketing Mix
Media
Integration Optimization
Channel & Operations
Customer
Informing

Product /
Pricing Sales Service Operations Finance
Merchandising
Other CRM Business Functions

19

CRM in a digital world

20

A new opportunity to target and reach customers

What if Geico could choose 10 million people who would be
most likely to switch their car insurance in the next month
and target them directly across media and channels?

21

What is available today, and what is the potential to target customers
across media and channels?

Targeting Media Channels

Contextual

Anonymous
Individual

Identified
Individual

Not available Emerging Somewhat available Widely available

22

Integrated data provides an opportunity to analyze, segment, and target
customers through digital media and channels.

Site

Behavioral Segmentation, Lifetime Value, Attribution, CRM mix
Display
Anonymous
& Individual
Cookies
Personalization

Analytics: Targeting, Measurement, Insight
First Party
Data Real-time
(CRM) Bidding
Social
Data Management

Open Graph
Data Integration

date Search

Second Party Key word
Data bidding by
(Partner) segment

Mobile

Text
Email
Third Party
Data

Individual
Personalization

23

The evolution of digital display ads has grown from place to customer

CRM Data Driven

Anonymous Individual Anonymous and Individual
Level of insight Place Place Place

Exchange Connected Exchange
Contextual
Environments Environments
How many people visit site, and Cookie & Third Party data on Addition of data repository including
their profile unknown individuals all media and CRM data

• Based on research and • User behaviors • Behavioral segmentation
Targeting persona • Retargeting • Lifetime value
• Customer/prospect

• Last click • Digital attribution • Fractional attribution
Measurement across all media

• Media property • Exchange Performance Performance by customer :
Insights performance • Segment
• Value

24

Integrated Data with Advanced Display Segmentation yields only the
customers you are trying to reach, optimizing investments.

You can build and effective display media plan
using contextual and exchange based buying

First
Party
Data
Integration

Integration

Second
Party Data

Third
Party
Data

But why underspend for the right customers and
overspend for customers you don‟t want?

Targeting: Performance by customer: Legend:
• Behavioral segmentation • Segment
Affluent High Ascending Lookie-
• Lifetime value • Value sophisticates transactors buyers loos
• Customer

25

Connected CRM Summary

• Managing and engaging customers not campaigns will
be key to creating competitive advantage.

• Digitization of medias and channels is creating a big
data revolution in marketing: the only way to monetize
this at scale will be through Connected CRM.

• We are in the early but accelerating stages of this
journey and new skills and approaches will be
necessary ….first movers will have a significant
advantage.

26

Q&A

Thank you!
David Williams
Chairman & CEO
Merkle Inc.
7001 Columbia Gateway Drive
Columbia, MD 21046
443-542-4000
merkleinc.com

27

Combining Digital Media and Customer Interactions for “Connected CRM”

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