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TOM NICKELS WWW.AVAUS.FI IMAGE BY MAURITSON FOTO / FLICKR
SEGMENTATION CONTEXTUAL
MARKETING
TO
FROM
- GROWING VALUE THROUGH PERSONALIZED EXPERIENCES
2
DRIVING BUSINESS
We combine strategy, analytics and design with technology and outsourcing services.
Focus areas: • Digital transformation • Customer growth • Digital sales and B2B Lead
management • Business model & service innovation • Business process efficiency
92 SPECIALISTS
OFFICES IN HELSINKI, FINLAND AND WROCLAW, POLAND
REVENUE 10 MILLION € (est. 2012)
SOME GREAT COMPANIES WE WORK WITH:
WHY SEGMENT CUSTOMERS ?
UNIQUE PRODUCT
COST ADVANTAGE
CUSTOMER INTIMACY
BASES FOR DIFFERENTIATION
COMPETITIVE
CREATING A
ADVANTAGE
It’s difficult to differentiate based on price or product charac-teristics. It might work for a while, but usually competition catches up. However REALLY KNOWING YOUR CUSTOMERS and serving them based on their individual needs will set you apart. But traditional segmentation is NO LONGER ENOUGH TO CREATE CUSTOMER INTIMACY.
CHALLENGE: THE
THIS IS WHAT YOU SEE, BUT IT IS NOT REALLY ME A LOT OF THE CUSTOMER INFORMATION COMPANIES CURRENTLY USE ISN’T REALLY FOCUSED ON GETTING TO KNOW WHO THEY ARE AND WHAT THEY NEED. AND ABOVE ALL IT DOESN’T TELL MUCH ABOUT WHAT THE SITUATION – THE CONTEXT – OF THE CUSTOMER IS RIGHT NOW.
ME THIS IS
ü Father of three, devoted husband ü Houseowner ü Live outside city ü Entrepreneur, owner of midsized
business ü Gadget freak ü Time strapped, convenience
oriented ü Eco consiousness on the rise ü Fair price, not necessary cheapest ü Prefer digital channels ü Visited website yesterday, looked at
product page
MARKET NEED CONTEXT
IN WHICH MARKET SHOULD WE INVEST? SEGMENTING ON A MARKET LEVEL. FOR INSTANCE CORPORATE CUSTOMERS VS CONSUMERS.
WHAT SHOULD WE OFFER? SEGMENTING BASED ON DIFFERING ATTITUDES AND NEEDS. FOR INSTANCE TASTE, CONVENIENCE, OR COST.
HOW SHOULD WE TREAT A SPECIFIC CUSTOMER? SEGMENTING BASED ON THE SITUATION OF THE CUSTOMER. FOR INSTANCE VISITED WEB-SITE, ORDERED SPECIFIC PRODUCT OR IS AT LOCATION X.
VALUE
HOW CAN WE GROW LIFETIME VALUE? SEGMENTING BASED ON CUSTOMER VALUE. FOR INSTANCE HIGH-VALUE, CHURN-RISK VS UNPROFITABLE CUSTOMERS.
Different approaches to segmentation
RELEVANCE THE HEART OF CUSTOMER INTIMACY IS
IS THIS IMPORTANT TO ME IN LIFE?
IS HELP FROM THIS COMPANY RELEVANT IN THE NEAR FUTURE?
IS THIS SOMETHING I NEED RIGHT NOW?
PERSONAL CONTEXT
IMMIDIATE CONTEXT
RELATIONSHIP CONTEXT
Web searches
Location
Weather
Call to CC
Expressed needs
Attitudes
Social connections
Lifestage
Area of residence
Visit to webpage
Products/ services in use
Purchase history
Customer lifecycle
Contact history
Purchase
REAL-TIME
DAYS TO MONTHS
YEARS Preferences
REAL-TIME BEHAVIORAL DATA
CUSTOMER PROFILE DATA +
Contextual marketing is about understanding not just who someone is but where they are, what they are doing, and what they are likely to do next. It’s about combining the right information about a customer and the context to deliver the right services and communication at the precise moment it offers the most value.
understanding context
Needs-based segmentation
What should we offer?
PERSONAL CONTEXT
Different needs and motives drive the development of customer offerings
AtoB ”I need a car to get from one place to another”
Status ”I have money and power, and I want to show it to others. Everybody admires my car.”
Convenience ”I need to be able to trust my car. It always functions the way I wish.”
Lifestyle ”The car goes along with my lifestyle. I have my own personality and I want to experience it through my car.”
Green values ”I appreciate ecological values. My car does not pollute the nature.”
Behavioral triggers
When is the best time to
communicate?
IMMIDIATE CONTEXT
Knowing when a product or service is relevant to the customer is one of the
hardest things to do. But one that potentially pays of big time.
Identifying the right customer behavior that SIGNALS THE MOST PRESSING
CUSTOMER NEEDS and triggering communication based on that may
increase relevance and sales SIGNIFICANTLY.
WHEN?
TIMING HAS A BIG EFFECT ON RELEVANCE
SIMPLE REACTIONS TO CUSTOMER ACTION WILL MAKE THE CUSTOMER FEEL THAT YOU RECOGNIZE HIM – IT HAS A CLEAR FEEL-GOOD FACTOR TO IT.
(and it affects sales)
Contextual advertising
How can we
provide relevant ads?
IMMIDIATE CONTEXT
18
REMARKETING RELEVANCE TAKING REALTIME RELEVANCE ONE STEP FURTHER - KEEPING UP
WITH THE CUSTOMER CONTEXT ONLINE
Web user
CLICK
Company website
User leaves
Popular sites
User returns
”Remarketing is a feature that lets you reach people who have previously visited your site, and show them relevant ads when they visit other sites.”
Mobile context
What interesting is nearby?
IMMIDIATE CONTEXT
”The world’s finest department store
brings the greatest international brands
to iPhone.
In-store, navigate your way around
4,000 of the world’s most premium
brands over 1 million square feet and 7
floors.”
Customer scoring
Which customers are most likely to buy?
RELATIONSHIP CONTEXT
Image: www.smallbizwithkids.com
READY TO BUY
The different situations of customers and prospects should be recognized. Some are just doing initial browsing, while others are seriously thinking about buying. To optimize sales results we need to distinguish between customers in different phases of the buying cycle. Automated lead nurturing programs can be used for customers that are not quite ready yet. That allows us to focus scarce sales resources on customers most likely to buy.
FOCUS SALES EFFORTS ON THOSE THAT ARE
Image: Marketo – The definitive guide to lead scoring
”Lead scoring is a sales and marketing methodology for ranking leads in order to determine their sales-readiness. You score leads based on the interest they show in your business, their current place in the buying cycle and their fit in regards to your business.”
Scoring leads in order to find customers that are ready to buy
Predicting needs
What will each customer likely
need next?
RELATIONSHIP CONTEXT
PROPENSITY WHICH CUSTOMERS ARE LIKELY TO BUY SOMETHING, LEAVE OR DO OTHER SIGNIFICANT THINGS?
THROUGH PREDICTIVE MODELLING TARGETING CAN BE MADE MORE EFFICIENT. THIS HAS A POSITIVE EFFECT ON BOTH THE BOTTOM LINE AND ON THE CUSTOMER EXPERIENCE.
MAKE COMMUNICATION MORE RELEVANT BY
ADAPTING IT TO THE NEEDS AND CONTEXT OF
THE INDIVIDUAL CUSTOMER.
PERSONALIZE
Segmentation based on context
How can we add value to the customer experience?
RELATIONSHIP CONTEXT
MAPPING THE CUSTOMER JOURNEY WILL HELP TO DEVELOP THE SERVICE EXPERIENCE IN MORE DETAIL
PRETRAVEL TRAVEL POSTTRAVEL
RESEARCH BOOK PREPARE LEAVE STAY RETURN REMEMBER SHARE
Hears about experiences from friends
Receives
communication Resarches and
compares destinations online
Unsure about
where to travel Excited about
attractive price offer Chooses
destination and plans own holliday
Collates the package (pricing etc.)
Makes
reservation Wants to include
personal requests in own order
Pays the
reservation Receives
confirmation Unsure about
travel details
Look for inspiration and plan the trip
Reads about the destination
Tells friends about
own plans Plans activities at
the destination Receives
communication Asks questions
(GOL, contact center) Prepares for
traveling by packing etc. Receives
information about changed travel details
Checks in at the airpot
Excited about
flight to destination Solves
unexpected problems during transit
Finds bus and
travels to hotel Meets
Finnmatkat guide Checks in at hotel Enters own hotel
room Solves problems
with hotel/room
Relaxes at the hotel Enjoys local
attractions Eats out at hotel or
local restaurants Excited about
shopping opportunities Goes on trips to
nearby attractions Taking photos of
family and sights Solves unexpected
problems (with guide)
Packs and checks out from hotel
Leaves for the
airport and checks in Sad about flying
home Solves
unexpected problems during transit
Arrive at airport
and travel home Unpack
Discusses experience and memories with family
Looks at photos
from trip Enjoys stuff bought
on trip Order print photos
or album Thinks about the
experience by him/herself
Tells friends about experience
Shares photos via
email or uploading to photo sharing site
Gives feedback via
tour operators online questionaire
Positively surpised
by offer for new trip
Efficiently book and pay the trip
Look forward to trip
Travel to destination
Enjoy the destination
Travel back home Enjoy memories of experience
Share experience with friends
ENJO
YMEN
T
+ –
BEH
AVIO
R CU
STO
MER
SCE
NA
RIO
DES
CRIP
TIO
N
SEGMENT 1: FAMILY
TRAVELER
The classic family traveler goes on holliday with the family and children. They want certain services that make traveling with children easier and that create unforgettable experiences for the whole family.
The scenario illustrates high , low and neutral emotional points. These all represent a potential customer experience design opportunity.
A SEGMENT OF ONE. NEW PLAYERS FOCUSING ON ADDING VALUE TO THE CUSTOMER CONTEXT ENTER OLD
MARKETS. THEY BREATHE LIFE INTO THE MARKET BUT MAY ALSO SHAKE UP THE VALUE CHAIN.
+
”runtastic Roadbike is your comprehensive bike app for your smartphone. The integration of heart rate, cadence, and speed sensors lets you get more precise tracking and analysis of your biking”
Value based segmentation
Who are our most valuable
customers?
RELATIONSHIP CONTEXT
Most valuable customers: Retain Most growable
customers: Grow
Marginal customers: Business as usual
Unprofitable customers: Dismiss or lower cost
Cost to serve
Image: Peppers & Rogers group
Customer value segments
Current value Potential value
value Segmenting customers based on
Developing customer STRATEGIES
Retain high value customers
Broaden the relationship
Acquire the right customer
Improve margin of unprofitable custmers
Understand me and provide me with reasons to stay
(e.g. Loyalty recognition, Next best action)
Provide me compelling reason to purchase more
(e.g. Next best action, Behavioral triggers, Remarketing)
Understand me and make relevant, competitive offers
(e.g. Exclude high defectors, Debt risk, Matching customer type)
Can I be satisfied with less (e.g. Identify, Communicate, Steer to self-service, Raise prices)
BUSINESS CHALLENGE CUSTOMER ISSUE
€
ENGAGEMENT Interactions
CUSTOMER VALUE Money spent
€ €
€
PERSPECTIVE ANOTHER
ON CUSTOMER VALUE
What next?
What does it take to introduce contextual
marketing?
RECOMMENDATION ENGINE
TRANSACTIONAL / VALUE
BEHAVIORAL PROPENSITIES
ATTITUDINAL NEEDS
DEMOGRAPHICS / GEOGRAPHY
LIFECYCLE
Personalisation / Targeting
Value management
Proposition development
Useful Sometimes useful Not useful on its own
THERE ARE MANY WAYS TO IDENTIFY CUSTOMER CONTEXTS – USING ONLY ONE IS NOT ENOUGH
TO SUMMARIZE
CO
NTE
XTU
AL
IND
ICA
TOR
BUSINESS NEED
011001010010011001010011101001100100011001100111001100011001 01100101001001100101001110100110010001100110011100110001 01100101001001100101001110100110010001100110011100110001 01100101001001100101001110100110010001100110011100110001
Good data is like the ears of a sales man. Without it you
have no clue what the customer needs.
Integrate traditional customer profile data with real-time behavioral data from all channels in order to
UNDERSTAND the need and REACT to the context .
DATA INVEST IN
For relevance to be meaningful, it must be as close as possible to real-time. JUST LIKE BREAKING NEWS, RELEVANCE HAS A SHORT SHELF-LIFE and has its greatest value at the moment something occurs.
Real-time segmentation – the here and now
REACT IN REAL-TIME RELEVANT TIMELY INTERACTIONS ARE POSSIBLE ON A GRAND SCALE ONLY THROUGH AUTOMATING PROCESSES.
avaus.fi website 42
“ I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel. ”
BIG EMOTIONS
Maya Angelou, american poet
CREATE
Apple. Zappos. Net-a-Porter.
