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This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation's express consent.
© 2010 Fair Isaac Corporation. 1
A Segment of OneHow Retailers Can Change The Game This Holiday Season
© 2010 Fair Isaac Corporation. 2 © 2010 Fair Isaac Corporation.2
About the Presenters
Joel BookPrincipal,Marketing Research & Education GroupExactTarget, Inc.
John KoltonowskiDirectorMarketing Solutions Retail/CPG PracticeFICO
• 30 years of experience in database marketing. Helped more than 100 BtoB and BtoC use data and technology to communicate and sell more effectively
• Specializes in strategies and tactics to attract and retain customers using email, mobile and social media
• Voted one of the “50 Most Influential People in Sales Lead Management” in 2009
http://blog.exacttarget.com/blog/joel-book
linkedin.com/in/joelbook
Twitter.com/joelbook
• Responsible for consulting with FICO clients to apply FICO Decision Management technologies in the marketing lifecycle.
• 20 years of business and consulting experience, helping organizations build and strengthen customer relationships.
• Helps to design and equip organizations with innovative solutions, leveraging automation and decision technologies to improve performance and achieve growth.
linkedin.com/in/johnkoltonowski
Twitter.com/FICOretail
© 2010 Fair Isaac Corporation. 3 © 2010 Fair Isaac Corporation.3
“Getting the right message to the right customer at the right time is now possible with interactive marketing and especially with mobile (as it’s sent to an individual vs. a household).Retailers need to break down silos between channels—focus on customer driven marketing.”
Source: Gartner
© 2010 Fair Isaac Corporation. 4
Today’s Webinar
In this Webinar, you will learn:
» Why smart retailers are using predictive analytics technology to deliver pertinent and timely offers to individual customers
» How you can use FICO® Retail Action Manager (RAM) to optimize decisions to ensure the right customer gets the right message at the right time
» What you can do to optimize retail sales opportunities during the upcoming 2010 Holiday season
© 2010 Fair Isaac Corporation. 5
U.S. Retail Sales
» Forrester Research predicts U.S. Online Retail Sales for 2010 will reach $173 Billion, and Web-influenced retail sales will total $1.21 Trillion
© 2010 Fair Isaac Corporation. 6
Retailing in 2010 – Key Trends
» Ability to execute consistent promotions across channels is a key competitive differentiator for top retailers.
» Adoption of mobile is ramping up quickly. By 2014, smartphones will comprise 37% of global handset sales.
» Shift from “Segment” Targeting to “Individualized” Targeting
» Increasing customer expectation and demand for offers that address their needs and interests
» Adoption of advanced “sense and respond” technology that predicts (with accuracy) offers that are relevant and timely to individual customers
© 2010 Fair Isaac Corporation. 7
How is a “Segment of One” Different?
From One to Many . . . to One to One
Batch & Blast Customer-Triggered
Supplier Funding Supplier Targeting
Campaign Calendar Customer Lifecycle
Contacts Dialogue
Business & Channel Silos Integrated & Informed
Segment Marketing Individualized Marketing
© 2010 Fair Isaac Corporation. 8
Traditional Segmentation Approach
Select customers most likelyto want product X
This week, promote product X
Send offer to entire subpopulation
Not interestedthis
week
Interestedthis
week
© 2010 Fair Isaac Corporation. 9
Segment of One Approach
Select customers most likelyto want product X NOW!
This week, promote product X
Send offer to targeted individuals
Interestedthis
week
© 2010 Fair Isaac Corporation. 10
Getting to a Segment of One
What Marketers Must Do:
» Develop and apply more insight about customers
» Track behaviors and link to performance
» Understand needs and attitudes
» Record and use individual preferences
» Create messaging consistent to the individual, not the offer
» Predetermine the best offer for immediate delivery
» Optimize marketing for ROI, practical constraints
© 2010 Fair Isaac Corporation. 11
Leveraging Customer InsightTo Drive Engagement And Loyalty
Capture & validate
Identify at all channels
Track behaviors
Understand needs & attitudes
Know Customers
Segment & value
Interact via preferred channel
Triggered marketing & cross-sell
Targeted messages, services & solutions
RelevanceEngagementPreferenceLoyalty
Sophistication of Retail Personalization
Act on Knowledge
© 2010 Fair Isaac Corporation. 12
Relevance is Vital to Success
» Delivering relevant and timely offers can increase response rates by more than 30% (Source: Fair Isaac Corporation)
© 2010 Fair Isaac Corporation. 13
Automating Relevance
Introducing Retail Action Manager (RAM)
Delivering relevant and timely offers to individual customers just got a lot easier
With RAM, you can:
• Discover WHAT individual customers are most likely to buy . . . and WHEN
• Predict the likelihood of purchases, over time
• Deliver relevant and timely offers using email, e-commerce, mobile and POS channels
• Learn which campaigns worked best and apply this knowledge to future campaigns
© 2010 Fair Isaac Corporation. 14
How Retail Action Manager WorksPersonalization in Action
2Apply Business
Rules
3Apply
Analytics
5Create Custom
Treatments
1Collect
Consumer Information
Tara
Transaction Data Demographic Info Response Data
Lauren
Transaction Data Demographic Info
Jake
Transaction Data Demographic Info Online Behavior Survey Data
Jake
Lauren
4Apply
Optimization
• Contact Strategy • Purchase Frequency
and Recency Exclusions
• Offer Parameters• Customer
Preferences
Retail Action Manager
• Creates eligibility matrix of all target customers and all target Items
• Modeling• Time Sensitive
Predictive Analytics• Scoring
• Creates a matrix of scores for all customer / item combinations
• Eligibility• Scores• Constraints
• Creates customer specific offers
POS Coupon Offer
personalized offers by email
Tara
© 2010 Fair Isaac Corporation. 15
Integrated Technology
Landing Pages, Registration Pages
“Thank You” Pages, Webcasts / Podcasts
E-Commerce Website
Total Integration of Data
• Offers executed by integrating of customer data, analytics, RAM, email, and e-commerce
• Ability to measure campaign effectiveness
• Ability to execute 1:1
offers Email Communications
Tracking and Analytics
Marketing Database
Predictive Offers
Retail Action Manager
Illustrative
© 2010 Fair Isaac Corporation. 16
Large Electronics Retailer Description (Confidential)
Retailer
Multi-channelcommunications
Objective: Increase relevance and consistency of marketing communications across multiple channels
Approach: Use intelligent, dynamic product recommendations in communications
Massive data analysis frommultiple enterprise sources
RAM centralizes marketingcommunications under a single decision platform
© 2010 Fair Isaac Corporation. 17
Large Electronics Retailer Results (Confidential)
Retailer
Multi-channelcommunications
Success: Significant incremental revenue in first 90 days of platform operation
Solution delivered in less than 120 days
Delivering millions of demand generated
messages per monthto consumers
Multi-channel communications arerelevant, timely, and
consistent
© 2010 Fair Isaac Corporation. 18
Q&A
1. I’d like to implement this approach before Holiday 2010, how long is a typical implementation?
2. How do different segmentation approaches impact the execution of one-to-one?
3. Will the segmentation differ based on the channel (email, Mail, Mobile, Social etc)?
4. What are some of the challenges and best practices to get this type of segmentation adopted and implemented within large organizations?
© 2010 Fair Isaac Corporation. 19
FICO® Retail Action Manager (RAM)Workflow Overview
RAM integrates with your systems» POS coupons, SMS text messages, email offers, dynamic website
content, personalized mailers
RAM creates business rules» Strategy-based offers, Trigger-based offers
RAM adds data feeds and interprets the data» Customer segments, Customer scores, Offer strategies
You set constraints» Products, Offers, Campaigns, Goals
You collect consumer data» Demographics, Transactions, Online behavior, Preferences,
Psychographics
This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation's express consent.
© 2010 Fair Isaac Corporation. 20
THANK YOU &NEXT STEPS