Empowered customer

The Empowered Customer:

Deliver What They Want, When They

Want It and Profit Big

An InformationWeek Webcast

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Today’s Presenters

Craig Hayman,

General Manager,

IBM Software Industry Solutions

Charles Qian,

Director of eCommerce Systems,

Technology Services

Cengage Learning

Craig Hayman,

GM IBM Industry Solutions

© 2012 IBM Corporation

© 2012 IBM Corporation 5

We have a big emphasis on being there for our

customers; having a great experience focused on

being more convenient and having sound advice.

Dan Marks, Chief Marketing Officer

First Tennessee Bank

I love my Mobile apps, lets you pay bills,

check your status of your account at your

finger tips. First TN even notifies you of any

strange activity to verify that it's you.


Forget everything you think you know about marketing.

Today's marketing is about understanding your

customers better than they know themselves.

John Lazarchic, VP of eCommerce

PETCO

Love the versatility and durability.

I’ll be surprised if I ever have to purchase

another crate again!


We analyze customer information across all channels

to gain insight, take action and create loyalty.

Dev Mukherjee, SVP and President Home Appliances,

Sears Holding Company

Sears Social – Kenmore Elite Washer

“Brilliant, easy to use design with every thing

I want my washer to do and it looks sweet

too…It is a work of laundry art!”


Our value chain must be agile and transparent, so we

can deliver the end-to-end customer relationship.

Mark Booth, North America CIO

Whirlpool

We gotten a generous 35 years out of this

workhorse Whirlpool dryer and hopefully we

can get lots more!

Empowered Customers are

Reshaping Businesses


e

44% of companies use

crowd sourcing

4 in 10 smartphone users

search for an item

in a store

80% of CEOs think

they deliver a superior

customer experience…8%

of their customers agree

86% use multiple

channels

Multi channel buyers

spend 4 to 5 times more

than average

45% check with a friend

before buying

78% of consumers trust

peer recommendations


“The purpose of business is to

create and keep a customer” — Peter Drucker

…and this has never been more challenging



On average, a retailer failed in the United States last year


Due to out of stock inventory


Stockpiled in supply chains


To gain a new customer than retain one

We Call the Path Forward

Smarter Commerce


Drives growth

Places the customer

at the center

Increases margins

Synchronizes your

entire value chain

Maximizes

the insight Capitalizes on social

and mobile

Improves collaboration

and visibility

Smarter Commerce:

Transforms the Commerce Cycle


Engagement

Market Buy

Service Sell

Insight Strategy

Smarter Commerce:

Ahead of Demand


Creates

exceptional

customer

experience

Analyzes

sentiment

and

anticipates

behavior

Services

and

delivers

flawlessly

Optimizes

supply

chain

execution

What Does Smarter Commerce Look Like

at Cengage Learning

19

MARKET

The ability to

target new offers

based on

customer

behavior

SELL

Seamless end to

end service over

the web

SERVICE

BUY

New Channels

open up greater

buying

opportunity for

cusatomers

Buy what you

need, when you

need it, and get

access instantly

Smarter Commerce at Cengage Learning:

Reaching B2B and B2C customers through

e-Business

- Charles Qian, Director of eCommerce Systems

Cengage Learning reaches B2B and B2C customers through e-business

Cengage Faced Significant Business and Market Challenges

Attrition/Arbitrage eroding sales of traditional, new textbooks – Used book market

– Textbook Rentals

– Parallel importation (overseas pricing)

Escalating costs in Higher Education forcing students to make tough purchasing decisions – Reduced government funding in HED

– Tuitions and fees rising quickly, especially in public education

Legislative pressure forces examination of pricing/delivery models – Many states have passed, or are considering, legislation to limit price

increases or bundling

– California requiring more use of online, free content in state college system

Professors are looking for non-traditional teaching tools – Technology challenges the traditional learning model (Google, Wiki, etc.)

– More “free” information available, although less reliable, has become more accepted


The Cengage Approach to These Challenges

Enhancing the direct-to-consumer (D2C)

experience and offering more digital options

using innovative offer models


Cengage Learning Online Retail Solution

Web Services

School Picker

Credit Card

Tax

Address Validation

IP Lookup

ePin

SSO

OLR

Sealed Media

CengageBrain

Marketplace: -Homepage -Static pages -My stuff

Online Selling IBM -Search/browse -Product details -Shopping cart -Checkout -Registration -Order status -Account profile -Redeem prepaid

Digital Rights: -DRM error msg.

Micro-sites

Cengage.com

Organic SEM

Affiliates

Other CL websites

Paid SEM

Social Media

Email Campaign

Order Orchestration

Payment Gateway

Payment Gateway

Product Meta-Data

Nightly Feed

Regional ERP/WS

Central ERP/WS

Order Processing/Print Fulfillment


CengageBrain.com Implementation Timeline

Launched pilot program for ebooks and echapters in December 2005

Expanded pilot program to iChapters.com storefront in June 2006

Migrated from 3rd party/in-house hybrid to complete in-house storefront in July 2007

Rolled out to 4 International regions between 2008 and 2009

Rebranded to CengageBrain.com in 2009

Added industry-leading rental program in late 2009

Creating a single destination for student customers

– First publisher to offer by-chapter purchases

– First publisher to offer a rental program with over 1,200 titles

– Offers a wide range of buy, rent, and digital options

– Consolidated divergent experiences into a single, cohesive brand and user experience

– Simplify purchase, registration, and access of products


Homepage with Marketing Pods & Social Media


Browse By Category


Search Results and Filtering


Product Detail Page with All Purchase Options


Up-selling and Cross-selling in Shopping Cart


QAI Address Validation


Digital Dashboard Content Access


Rental Options and Contract Management


The Results of the B2C Strategy

D2C online revenue grew on average, over 50% year over year from 2006 to 2011.

Digital product sales including e-books, e-chapters, and online study tools, now account for 80% of D2C revenue.

Over 5 million visitors, 600K registered users, and 450K purchases in 2010

Over 120K products offered in five regional storefronts

– US

– EMEA

– Latin America

– Canada

– Australia/New Zealand

2011 Fall Rush saw 100%+ year-over-year increase in traffic and revenue


Keys to Monetizing D2C Digital Content – Closing Thoughts

Offer choice and value to offset market challenges

– Electronic version of print materials at a significant discount

– Offering rentals to reduce up-front customer costs

Using digital rights management effectively to drive new business models

– ebooks and echapter expire after certain time period

– Online course solutions and study tools drive repeat, annualized sales

Employ a compelling yet simple to use eCommerce environment to support just-In-time consumer purchase behaviors

– Buy what you need, when you need it, and get access instantly

– Provides new avenue to deliver non-physical products and content more efficiently, more quickly, and more cost effectively

– Opportunity to gain insight into consumer behavior

– Creates brand loyalty and social/mobile marketing

Experiment with new selling/delivery models

Smarter Commerce: A Complete Portfolio


Customers and

partners buy what

they want, when

and where

Advanced Analytics

Workload Optimized Systems

CORE BUSINESS SOLUTIONS

VALUE CHAIN STRATEGY AND SERVICES

MARKET

Personalized

and relevant offers

with unified cross-

channel marketing

SELL

Anticipates

behavior and

delivers flawless

customer service

SERVICE

BUY

Intelligent and

optimized supply

chains based on

demand

Smarter Commerce: New Solution

Highlights


Smarter Commerce on Cloud

NEW!

Sm

art

er

Co

mm

erc

e o

n C

lou

d

Supplier Integration and Management

• Optimize and automate supplier interactions

with ILOG Supply Chain Optimization, ECM

Case Manager, Sterling B2B Integration and

SPSS

Digital Marketing Optimization

• Transform insights across all digital interactions

including social media into relevant and

optimized marketing execution with Cognos

Consumer Insight, SPSS, Coremetrics and

Unica

Cross-channel Selling

• Sell seamlessly where and how customers

want to buy with Websphere Commerce,

Sterling Configure, Price, Quote and Customer

Experience Suite optimized on Power Systems

www.ibm.com/smartercommerce

Supply Chain

Visibility

Marketing

Innovation

Digital

Transformation

Get Started on Your Journey..

Q&A Session

Craig Hayman,

General Manager,

IBM Software Industry Solutions

Charles Qian,

Director of eCommerce Systems,

Technology Services

Cengage Learning

Documents

Empowered customer