Attitudes Meet Behaviors. Driving Value through Segmentation
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1 Attitudes Meet Behaviors Driving Value through Segmentation
2 Infrastructure New competencies and addressability at scale extend the CCRM framework to capture a great opportunity Addressability at Scale The CCRM Framework Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF Customer Strategy Segmentation Value Planning Measurement and attribution at the segment level then drives macro-level media and channel budgeting allocation What data, systems, tools and technologies will be necessary? Experience Delivery Media Planning Channel Planning Targeting & Personalization This creates a complete optimized customer experience that drives increased LTV, efficiencies and shareholder value Organization How do we organize and what capabilities and business processes will be necessary? Financial Management Measurement & Attribution Budget Allocation Integrated targeting and customization across media and channels are optimized at the segment and individual level The New Platform Marketer Competencies Identity Management Addressability Optimization Audience Management Platforms Organization Targeting Personalization Measurement Tech Stack Utilization 2
3 Infrastructure New competencies and addressability at scale extend the CCRM framework to capture a great opportunity Addressability at Scale The CCRM Framework Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF Customer Strategy Segmentation Value Planning Measurement and attribution at the segment level then drives macro-level media and channel budgeting allocation What data, systems, tools and technologie s will be necessary? Experience Delivery Media Planning Channel Planning Targeting & Personalization This creates a complete optimized customer experience that drives increased LTV, efficiencies and shareholder value Organization How do we organize and what capabilities and business processes will be necessary? Financial Management Measurement & Attribution Budget Allocation Integrated targeting and customization across media and channels are optimized at the segment and individual level The New Platform Marketer Competencies Identity Management Addressability Optimization Audience Management Platforms Organization Targeting Personalization Measurement Tech Stack Utilization 3
4 Introduction What is segmentation? How to approach segmentation Segmentation and the Platform Marketer History A modern definition Applicability to the Platform Marketer Research, Analysis, Profiling Strategy Linking to Addressable Media Case studies 4
5 Agenda What is segmentation? How to approach segmentation Segmentation and the Platform Marketer History A modern definition Applicability to the Platform Marketer Research, Analysis, Profiling Strategy Linking to Addressable Media Case studies 5
6 A Brief History Segmentation Aggregating consumers into groups based on a personal characteristic. Dividing a heterogeneous market into smaller homogeneous groups 6
7 A Brief History No real language to describe segmentation Segmentation as a strategy to Audiences inspire aggregated by content differentiation Data driven segmentation Audiences introduced aggregated by content Advances in statistical techniques but concerns about implementation Audiences aggregated by content Segmentation productized, but not predictive Pre-1950 s 1950 s 1960 s 1980 s 1990 s Product, pricing, channel based on social class, religion, gender, education Recognition that different demand curves exist for different individuals Attitudes and psychographics tested with regards to predicting behavior Segment based choice models more predictive of aggregate models Census and psychographic based segmentations packaged 19 th century book market: different quality books with same content sold at different prices 1920 s GM: A car for every purse and purpose Heterogeneous markets exist. Introduction of market segmentation as a strategy = product differentiation Haley examines factors other than demographic, based on the belief that there are other drivers o behavior Strong emphasis on ability to predict choice Segmentation and CRM become disconnected Behavioral and value analysis gain prominence Segmentation loses its identity 7
8 Segmentation Defined Segmentation Aggregating consumers into groups that will respond similarly to a specific marketing mix in a specific set of circumstances 8
9 Agenda What is segmentation? How to approach segmentation Segmentation and the Platform Marketer History A modern definition Applicability to the Platform Marketer Research, Analysis, Profiling Strategy Linking to Addressable Media Case studies 9
10 Keys to Success To influence brand choice, define segments based on underlying brand decisioning process (NOT just attitudes or behaviors) Research To develop an enterprise-wide customer strategy, draw rich insights into value, needs, behavior, brand relationships, interests, psychographics, media usage Linking To implement the customer strategy across the enterprise, assign each individual consumer to a segment Individuals in your customer base Non customers identifiable and non identifiable 10
11 Approach Primary Research Modeling and Analysis Profiling Segment Strategy Deeply understand emotional drivers tied to key brand attributes among the battleground based on interviews and robust online survey Assign each individual in the battleground to a segment by linking survey response to data available on the entire battleground and developing an analytical model to assign segment Bring segments to life by portraying each segment s decisioning protocol, brand relationship, media usage, needs, style, interests, shopping behavior, wallet size Also depict actual segment behavior Develop the plan to motivate purchase, including marketing mix considerations, experience design across touch points, marketing program strategy 11
12 Primary Research Background Motivational (understand WHY my consumers make decisions to engage) Attitudinal (understand how my consumers feel and think ) Behavioral (what are my consumers doing) 12
13 Primary Research How Segments Emerge Consumer Decision Maps Personal Values Personal Benefit Brand or Product Benefits Brand or Product Attributes CDM is the basis for segmentation Segments created by grouping individuals with similar CDM emphasis 13
14 Primary Research Video (Cable, Satellite, Online) Example Consumer Decision Map Personal Values Enjoy the good things of life Personal satisfaction Make wise choices Freedom to Choose Personal Benefit Relaxed stressfree escape I feel smart & informed Feel in Control I feel I am working with trusted partner Learning about the world Brand Benefits Opportunity to Relax Enjoyable Entertainment Variety Good Value Reliable Service Trustworthy Company Friendly and saves time Brand Attributes Effective product education One bill / save with bundles Clear & vivid experience Local Channels Offer channels important to me Channel variety Affordable Consistent service delivery Established Reputation Respectful Customer Service Effective & Prompt Service Order by phone English speaking call 14
15 Primary Research Business Travel Example Consumer Decision Map Personal Values Peace of Mind Relaxed Confident Achievement Focus Peace of Mind Self Esteem Comfort Valued Family Love Good Provider Good Life Adventure 15 Personal Benefit Brand Benefits Brand Attributes Feel more at home Decompress Pool Gym Good Amenities +Health Easier Choice Business Center Courtyard Lounge Restaurant Productive Save Time Pro-active Know Me Excellent Employees Treat w/ Respect Smile Less Worry/Stress Nice Decor Clean Facility Consistent Experience Comfortable Room Available Parking Assist w/ my needs Accrued Status Guaranteed Room Stay Longer Member s Only Lounge Exclusive, Cash Bar, Snacks, Concierge, More Business Travelers Special Moments/New Experiences Recognition Can do More Take a Vacation Save Money Upgrades Gain Rewards
16 Primary Research Hotel Score on Brand Decision Chains Chain # Decision Chain Description Good Amenities -> Having a Balanced Life -> Feeling More at Home -> I Can Relax Good Amenities -> Easier Choice -> Saving Time & Trouble -> More Productive -> Accomplishment Consistent Positive Experience -> Less Worry/Trouble/Distractions - > Being Productive -> Ability to Focus -> Peace of Mind Having Status -> Special & Tailored Treatment -> Assist with my Needs -> Feeling Valued & Remembered -> Self-Esteem Accruing Rewards -> More Personal Vacations -> Special Experiences with Loved Ones -> Good Provider& Family Love Having Status -> Access to Special Member s Only Amenities -> Being More Productive -> Accomplishment Performance Score by Brand Importance Score Hilton Marriott Starwood Wyndham Overall Performance Score by Brand Hilton Marriott Starwood Wyndham
17 Primary Research Hotel Score on Brand Decision Chains Chain # Decision Chain Description Good Amenities -> Having a Balanced Life -> Feeling More at Home -> I Can Relax Good Amenities -> Easier Choice -> Saving Time & Trouble -> More Productive -> Accomplishment Consistent Positive Experience -> Less Worry/Trouble/Distractions - > Being Productive -> Ability to Focus -> Peace of Mind Having Status -> Special & Tailored Treatment -> Assist with my Needs -> Feeling Valued & Remembered -> Self-Esteem Accruing Rewards -> More Personal Vacations -> Special Experiences with Loved Ones -> Good Provider& Family Love Having Status -> Access to Special Member s Only Amenities -> Being More Productive -> Accomplishment Performance Score by Brand Importance Score Hilton Marriott Starwood Wyndham Overall Performance Score by Brand Hilton Marriott Starwood Wyndham
18 Approach Primary Research Modeling and Analysis Profiling Segment Strategy Deeply understand emotional drivers tied to key brand attributes among the battleground based on interviews and robust online survey Assign each individual in the battleground to a segment by linking survey response to data available on the entire battleground and developing an analytical model to assign segment Bring segments to life by portraying each segment s decisioning protocol, brand relationship, media usage, needs, style, interests, shopping behavior, wallet size Also depict actual segment behavior Develop the plan to motivate purchase, including marketing mix considerations, experience design across touch points, marketing program strategy 18
19 Modeling and Analysis Profiling Dimensions Within Segments Data for Segmentation and Profiling Loyalty tier Geographic risk factors Wallet share Geographic lifestyle summaries Tenure with competitors Geographic competitive data Lifestyle Image Thoughts on category Psychographics Loyalty Geographics Demographics Drive markets Age Income Family status Education Shopping/consideration Booking Usage Category Attitudes Dimensions Brand Brand relationships Brand imagery Stated versus derived needs Survey data on behaviors general and with competitors Profitability Survival Predicted future LTV Survey data on wallet share by brand Behaviors Customer Value Media Customer History Product / service engagement Spend, payments Channel preference Usage Social media Programs / print vehicles / digital property Syndicated data 19
20 Modeling and Analysis Profiling Making Segmentation Actionable Linking to Customers and Prospects Research Name Address Survey data Audience Data Prospect and Customer Data Each record assigned to a segment Tied to syndicated media data Tied to future research 20
21 Modeling and Analysis Profiling Making Segmentation Actionable Linking to Addressable Media Research Prospect and Customer Data Addressable Media Name Address Survey data Identifiable Audience Data Each record assigned to a segment Tied to syndicated media data Tied to future research Anonymous Data Anonymous online visitors assigned to segment Name Address Cookies and 3rd Party Data Online available 21
22 Modeling and Analysis Profiling Example: Predicting Segment Using Online Data 22
23 % Budget to 2011 Total Policies Modeling and Analysis Profiling Benefits of the this Approach Strategic Tactical Based on MAVEN research Rich insight into attitudes Informs strategy Based on behavior Actionable; tied to database Informs tactics Strategic Planning Value Proposition Program Planning Addressable Media Media Budget Allocation Market Understanding Website Personalization Direct Marketing Testing Strategic Planning Value Proposition Program Planning Addressable Media Strategic Planning Value Proposition Program Planning Addressable Media Strategic Planning Value Proposition Program Planning Addressable Media Strategic Planning Value Proposition Program Planning Addressable Media Budget Comparison 160% % 135% 135% ,982135% 135% 140% % % 41, % 100% 39,002 38, % % Baseline Scenario 1 Scenario 2 Scenario 3 Scenario 4 Budget New Customers Scenario Scenario Budget Brand Print Display Paid Online TV Search Lead Gen Baseline 2011 budget 100% 100% 100% 100% 100% 100% Scenario budget 135% 151% 151% 109% 122% 136% Scenario Maximize 135% 86% 26% 270% 236% 125% Portfolio Value Segment 1 215% 95% 18% 450% 280% 138% Segment 2 154% 92% 20% 395% 210% 153% Segment 3 136% 60% 40% 280% 315% 127% Segment 4 88% 66% 25% 120% 180% 114% Segment 5 75% 70% 24% 120% 115% 116% Media budget allocation by segment to maximize return based on Media Mix Optimization Segment strategy built around the segment value proposition; detailed media mix, product differentiators, brand attributes, low price vs. value, channel objectives Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Channel (website) personalization by predicting segment based on online characteristics Seg Initial Recommendations Direct mail and testing Position: Company has a great selection, you can find whatever you want! by segment Highly likely to reactivate naturally Test Trigger Program with Shortened Inactive Window (e.g. 20-weeks) v. no 1 contact control Test reactivation Audience model v. no Segment contact control Creative Cell Contact Notes Test recognition based program Top Model Segment 1 V1 1 able: Multi Multi cell includes 2 s + 1 Position: Company has something for you! DM Highly influenced to purchase items shown on air. 2 able: EM 2 EM only 2 Test Upcoming Shows communications, highlight popular shows 3 able: Holdout No contact Test Reactivation Model Depth of file to maximize ROI. 4 DM Only 1 DM only Communicate based on product affinities 5 DM Holdout No contact Position: It s about convenience. Shop Segment when you 2 want!. V2 6 able: Multi Optional High penetration of Internet and Multi-Channel customers. 7 able: EM Optional 3 Test penetration into model with lower cost e-campaigns. 8 able: Holdout Optional Test multi-touch campaigns 9 DM Only Test personalized URL s to get click through activity 10 DM Holdout V3 11 able: Multi 12 able: EM 13 DM Only 2013 Merkle Inc. All Rights Reserved. Confidential Merkle Inc. All Rights Reserved. Confidential Merkle Inc. All Rights Reserved. Confidential Merkle Inc. All Rights Reserved. Confidential 28 Rich Actionable 23
24 Strategy Primary Research Modeling and Analysis Profiling Segment Strategy Deeply understand emotional drivers tied to key brand attributes among the battleground based on interviews and robust online survey Assign each individual in the battleground to a segment by linking survey response to data available on the entire battleground and developing an analytical model to assign segment Bring segments to life by portraying each segment s decisioning protocol, brand relationship, media usage, needs, style, interests, shopping behavior, wallet size Also depict actual segment behavior Develop the plan to motivate purchase, including marketing mix considerations, experience design across touch points, marketing program strategy 24
25 Segment Strategy Segmentation as the Foundation of Strategy Illustrative: Segment Strategy Objective Increase loyalty, transition to repeat customers, increase product exposure Up and Comers Product Price Channel Media Caribbean, 7 Night cruises Ahead of the competition Start with a low price point to attract Increased focus on product attributes and value DTC, ecommerce Drive to direct relationship between consumers & brand 15% Direct mail 50% 15% TV/radio 20% Social media Action Plan Attract with a low price point as an entry to cruising, push for loyalty and repeat cruising for future wallet share 25
26 Segment Strategy Illustrative Customer Journey Segment Specific Journeys 26
27 Segment Strategy Illustrative Customer Journey Lifecycle stage Touchpoints with different objectives, strategy by segment. Cross channel, cross media differentiated treatment BY SEGMENT. Examples: Ratings and Reviews for segment A vs. Brand Ambassadors for segment B Wal-Mart for segment A vs. AARP for segment B 27
28 Agenda What is segmentation? How to approach segmentation Segmentation and the Platform Marketer History A modern definition Applicability to the Platform Marketer Research, Analysis, Profiling Strategy Linking to Addressable Media Case studies 28
29 29 Media Planning Tool
30 30 Outdoor
31 Direct Response TV Segment A Segment B 31
32 Online Lead Generation Segment A 32
33 Website Experience Segment A Segment B 33
34 Call Center Experience Segment A Segment B 34
35 35 Welcome Call and NPS
36 36 Measurement and Attribution
37 Enterprise Segmentation Group and prioritize consumers into manageable segments - goal is to influence brand choice Enterprise wide unifying concept Targetable across the customer and prospect universe Basis for segment strategy development media mix, offer, product mix, distribution, message/creative Organizing principle for addressable programs and input into personalized programs 37
38 Merkle Shirli Zelcer Vice President, Merkle Analytics Leah van Zelm Principal Consultant
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