How To Become A Customer- Infused Company...$ Sales - Comparison Product $ Sales - Primary Product $ Sales - Other Products Total Store $ per Basket Basket Size Index VITAMINS 7,950

How To Become A Customer-

Infused Company

Accenture Customer Insight

Copyright © 2011 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Companies need to act quickly to compete in

today’s rapidly changing marketplace.

2Copyright © 2011 Accenture All Rights Reserved.

Vision of a “customer-infused” company:

• Customers will chose a company more often

for more of their needs and wants, over the

competition…

• Because the company has demonstrated an

improved understanding of how to satisfy

them…

• By infusing a knowledge of these needs and

wants, into the day to day marketing,

merchandising and operations of the business…

• And by managing it in a way that supports the

company’s core value proposition while

delivering personal relevance to the shopper…

• Resulting in a more valuable customer base,

and delivering more revenue and profit, to the

company’s enterprise

Shopper marketing has changed…

• More choices, places, data

….but goals of companies and

shareholders have not:

• Greater share of

households & customers

• Greater share of trips &

transactions

• Greater share of needs &

requirements

• More, bigger and better

baskets….over time

Challenge: Linear shopping behavior is gone.

Tactics must be customer centric by touch point.


Young Hispanic

Male

Health and

Wellness

Hustle and Bustle

Families

New Moms

Golden Oldies

Merchandising Operations SuppliersMarketing

Promotions Pricing Assortment SpaceCustomer Experience

Many touchpoints

Many customers

Many tactics

Management by functional silos

Content

Concept – Customer Value

Customer Value can be defined by one or more measures of recency,

frequency and value. Leading companies find the value of each customer,

segment them into groups, and determine actions that will drive added value.


Engaged Customers (Next Best) –Invest in making them best customers

Casual Customers (Opportunity) –maintain investment

Disengaged Customers – Reduce focus and investment

The Opportunity…

Best Customers - Focus on them to retain them

ILLUSTRATIVE

Sh

are

of

Re

qu

ire

me

nts

(

or

% o

f C

ate

go

rie

s S

ho

pp

ed

, B

as

ke

t B

rea

dth

)

Share of Trips (or Transactions, Basket Count)

Customer Value (e.g. Customers x Transactions x

Basket Value)

Start with the customer


Groceries

What Customers Buy

How Customers Buy

Find the Value: Segment customers based on value

What to Offer: Profile customers, develop strategy based on

demand, behaviors and attitudes

How to Offer It: Develop tactics across company

unleash their value

Clothing

Electronics

Advertised Price

Social Media

Value Brands

Promotion seeking

Seasonal visits

Marketing

Merchandising

Operations

Why Customers Buy

Value of Company’s Brand

Suppliers

Customer Value

BEST

ENGAGED/ NEXT BEST

Find the value Mine the value Convert the value

CASUAL/ OPPORTUNITY

DISENGAGED

Share

of R

equirem

ents

(

or

% o

f C

ate

gories

Shopped)

Share of Trips (or Transactions)

WHICH customers are most important?

Derive INSIGHTS fromyour data

Be RELEVANT to your customers

Day-in-the-life of customer-centric organization


All customers

Valuable customers

Is a Family

Buys Center Store

On a Budget

With a Baby

Buys Diapers

NotFormula

-1

0

1

2

3

4

5

6

Oct

-03

Dec

-03

Feb

-04

Apr

-04

Jun-

04

Aug

-04

Oct

-04

Value created through relevant tactics

National Advertising

Tailored assortments,

localized circular

Responds to in-store promotion

Remind of promotion with text or

call

Enroll in “new moms club”

Promote circular & in-

store on endcaps

Macro to Micro Marketing and Merchandizing Activities

Loyalty points at register

ILLUSTRATIVE

Strategic In-Store

Placement

Micro Tactics

• Addressed to specific customers within those high-value segments

Macro Tactics

• Focused on a company’s strategic and high-value or “best” customer segments

Data assets serve as an important foundation to

becoming “customer-infused”


360o View of Customer Database

Data Sources (Examples)

Allows “Micro-Customer Segmentation”

• Demographics• Market data

“T- Log” Customer Panel

• Transactions• Basket Size• Pricing• Promotions

• Loyalty Cards• Credit Cards• Social, Web,

Mobile

Does your company know…

• Who your best customers are?

• Your best customers’ value?

• How to market to them?

• How to merchandise to them?

• How to drive greater loyalty?

Which departmentsdo they cross-shop?

What Private Label products do they buy?

Do they routinely respond to coupon offers?

What items are in their market basket?

Do they only buy products on sale?

What percentage of their baskets contain an selected product?

What advertised items did they buy?

Will they respond to an offer?

Are you gathering valuable insights from your transaction data?

Customer Receipt

Customer-infused companies need to harness all of its data to provide a 360o view of its customer

Value proposition: Customer infusion has a

material impact on top-line and bottom-line


The value creation resulting from growing

consumers, growing trips and growing share

of needs is significant.• Greater share of

households & customers

• Greater share of trips &

transactions

• Greater share of needs &

requirements

• More, bigger and better

baskets….over time

Introducing Accenture Customer Insight

Accenture Interactive acquired CadenceQuest and its customer insight software platform

in 2010 to build on its suite of digital capabilities, marketing analytics, retail marketing and

merchandising solutions and platforms. It contributes to Accenture’s strategy of providing

organizations with the predictive analytics capabilities they need to identify and analyze

customer data, revealing insights which can drive better business decisions.

.


Accenture Customer Insight is a software solution enabled by a high performance customer analytical platform that puts descriptive and predictive information about customer behaviors, marketing, merchandising and operational results in the hands of non-technical users.

It is uniquely designed to allow users to create “micro-customer segments” in addition to strategic macro-customer segments, using large data volumes of point-of-sale, customer loyalty and behavior data, and plan the needed strategy and tactics to deliver the desired enterprise and customer performance.

Accenture Customer Insight allows users to quickly and easily view customer performance through flexible charts and reports; it can support a large number of users from inside and outside of the organization.

How it works – Dynamic “on-the-fly” micro-

segmentation and targeting

Profile segment

Traits

• % of customers• % females / males• % households w/

children• Locations shopped• Products bought• Etc.

Create

segment

Large Family

Stock-Up

Identify additional

customers with

desired demand

and profile traits

Analyze customer

metrics to create

demand-shaping tactics

• Basket count - trip frequency and motivation

• Basket breadth - share of requirements satisfied

• Basket value – sales and margin, brands and products bought together

• Response to marketing and promotion, loyalty programs, assortment

Targeted marketing,

merchandising and

operations actions for

defined segments

Analyze Impact to determine next

steps for segment

• Pre-, performance and post-performance results

• Customer migration• Targeted offers, pricing and

promotion • Tailored regional and

localized assortment and merchandising

• Timely service and support operations

• Find similar customers who are heavy buyers of cereal based on demand, other customer traits

1 2 3

4 5 6

7 Further refine, split or combine

segments with Segment Math:

Breakfast Cereal Buyers

Large Family

Stock-Up


How it works – Compelling analytic insights –

easily executed and delivered


Dashboards provide “on-the-fly” views of most important customer, marketing, merchandising and operations performance metrics

Reports that require deeper queries are created with simple drag and drop interface and sent to queue with status notification

• Status notification and email delivery of results (Excel, Flash, .zip) upon query completion

• Visualization of report results via Microsoft Excel allowing user to manipulate with familiar tools

Prompt Selections:

Prompt 1: Select Start Date of Performance PeriodYour selection: 6/1/2007

Prompt 2: Select End Date of Performance PeriodYour selection: 6/30/2007

Prompt 3: Select Primary Product GroupYour selection: Category In List (VITAMINS)

Shopping Basket Analysis - Cross Product #######

Prompt 5: Select Report LevelYour selection: Category

Prompt 6: Select Geographical AreaYour selection: Prompt not answered

Prompt 7: Customer SegmentYour selection: Customer Segment = Customer Migration:470

Prompt 8: Store SegmentYour selection: Store Segment = Prompt not answered

Category

Attachment

Index

Customer

Count

Units per

Basket -

Primary

Product

Units per

Basket -

Comparison

Product

$ Per

Basket

$ Sales -

Comparison

Product

$ Sales -

Primary

Product

$ Sales -

Other

Products

Total

Store $

per

Basket

Basket

Size

Index

VITAMINS 7,950 2,111 1.3 1.3 $21.38 $11.02 $11.02 $10.36 $21.38 100

INCONTINENCE 241 6 1.8 1.0 $42.12 $4.14 $12.37 $11.42 $12.34 341

FLOWERS 234 1 2.0 1.0 $20.87 $3.99 $16.88 $0.00 $5.65 369

APOTHECARY 232 8 1.3 1.1 $18.09 $3.28 $9.99 $3.85 $18.13 100

STOMACH REMEDIES 213 109 1.3 1.3 $35.20 $9.51 $13.21 $6.60 $15.32 230

POSTAGE STAMP 209 5 1.8 1.2 $45.32 $9.84 $18.25 $7.06 $14.14 320

CANDLES 207 6 1.8 1.2 $17.44 $3.41 $9.57 $1.95 $8.01 218

ORAL HYGIENE 197 162 1.5 1.4 $30.08 $5.16 $12.02 $8.28 $12.25 246

PROMOTIONAL 195 75 1.6 1.0 $25.76 $1.00 $13.03 $7.81 $13.58 190

SUNCARE 192 29 1.4 1.4 $38.12 $11.18 $13.32 $9.34 $16.82 227

PAIN RELIEVERS 181 131 1.4 1.1 $35.17 $6.65 $13.02 $5.47 $12.26 287

SUNGLASSES 181 4 1.3 1.0 $37.57 $10.24 $9.74 $10.87 $21.46 175

DIET/NUTRITION 177 18 1.2 1.3 $14.83 $2.20 $7.24 $3.55 $8.10 183

SHAVING NEEDS 175 51 1.6 1.3 $39.73 $6.91 $14.42 $6.58 $14.62 272

SKIN CARE 169 138 1.4 1.5 $31.77 $8.97 $12.72 $6.39 $13.32 238

PICTURE FRAMES & ALB 144 5 1.0 1.2 $29.82 $9.03 $12.13 $8.66 $12.36 241

HOME DIAGNOSTICS 143 6 1.2 1.0 $35.90 $18.92 $13.66 $2.73 $15.83 227

HOUSEHOLD 135 110 1.5 1.4 $23.16 $2.24 $11.08 $3.68 $8.03 288

DOLLAR DEALS 128 22 1.2 1.7 $30.11 $1.60 $9.15 $8.44 $9.55 315

HAIR COLOR 125 11 1.0 0.8 $21.54 $4.89 $10.79 $5.86 $7.41 291

TOP OF CHECKOUT 124 13 1.5 1.2 $27.72 $2.76 $12.21 $4.75 $10.32 269

FOOT CARE 124 9 1.1 1.0 $30.93 $4.46 $10.91 $5.00 $9.15 338

GROCERY 118 74 1.6 1.5 $22.64 $2.71 $13.27 $5.02 $7.69 294

HOUSEHOLD PAPER 116 81 1.4 1.3 $23.73 $2.85 $11.13 $4.81 $9.24 257

HAIR CARE 116 48 1.4 1.1 $24.32 $3.35 $12.02 $4.54 $9.36 260

Example – Identify and segment customers


Use Segment Template to Create “Best Customer” segment with Customer Decile template for two time periods

Use Segment Math to determine repeat (in A and B) or migrated (in A, not B) to identify repeat (or migrating) over both periods

See what portion of all customers are “Best”

Look at overall performance of customer segment metrics

See who they are (demographics)

See what they are buying

Example – Plan, execute and measure tactics

Look at performance of segments in past promotions. Use insight to determine marketing and merchandising tactics

Marketing: Link to and export segments directly to campaign management systems

Prompt Selections:

Prompt 1: Select Calendar Week Start DateYour selection: Week = 6/3/2007 or 6/10/2007 or 6/17/2007 or 6/24/2007

Prompt 2: Select Advertisement for Promotion ProductsYour selection: Advertisement = 2007-06-17




Week

Promotion

Basket

Count

$ per

Basket

$

Promotion

Products

per Basket

$ Non-

Promoted

Products per

Basket

Units per

Basket

Promotion

Units per

Basket

Non-

Promoted

Units per

Basket

%

Promoted

Only

Baskets

6/3/2007 4,420 $11.68 $4.45 $7.23 6.2 4.0 2.2 23.0%

6/10/2007 6,308 $9.32 $3.35 $5.97 4.8 3.1 1.8 17.9%

6/17/2007 6,066 $6.86 $2.48 $4.38 3.1 1.7 1.4 27.3%

6/24/2007 3,188 $7.16 $2.31 $4.84 3.0 1.6 1.4 23.9%

Promotion Impact

Use Promotion Impact Report to show each segment’s performance for the weekly circular advertisement executed

Use Shopping Basket –Cross Product Report to understand products each segment is buying together

Prompt Selections:

Prompt 1: Select Start Date of Performance PeriodYour selection: 6/1/2007

Prompt 2: Select End Date of Performance PeriodYour selection: 6/30/2007

Prompt 3: Select Primary Product GroupYour selection: Category In List (VITAMINS)

Shopping Basket Analysis - Cross Product #######

Prompt 5: Select Report LevelYour selection: Category




Category

Attachment

Index

Customer

Count

Units per

Basket -

Primary

Product

Units per

Basket -

Comparison

Product

$ Per

Basket

$ Sales -

Comparison

Product

$ Sales -

Primary

Product

$ Sales -

Other

Products

Total

Store $

per

Basket

Basket

Size

Index

VITAMINS 7,950 2,111 1.3 1.3 $21.38 $11.02 $11.02 $10.36 $21.38 100

INCONTINENCE 241 6 1.8 1.0 $42.12 $4.14 $12.37 $11.42 $12.34 341

FLOWERS 234 1 2.0 1.0 $20.87 $3.99 $16.88 $0.00 $5.65 369

APOTHECARY 232 8 1.3 1.1 $18.09 $3.28 $9.99 $3.85 $18.13 100

STOMACH REMEDIES 213 109 1.3 1.3 $35.20 $9.51 $13.21 $6.60 $15.32 230

POSTAGE STAMP 209 5 1.8 1.2 $45.32 $9.84 $18.25 $7.06 $14.14 320

CANDLES 207 6 1.8 1.2 $17.44 $3.41 $9.57 $1.95 $8.01 218

ORAL HYGIENE 197 162 1.5 1.4 $30.08 $5.16 $12.02 $8.28 $12.25 246

PROMOTIONAL 195 75 1.6 1.0 $25.76 $1.00 $13.03 $7.81 $13.58 190

SUNCARE 192 29 1.4 1.4 $38.12 $11.18 $13.32 $9.34 $16.82 227

PAIN RELIEVERS 181 131 1.4 1.1 $35.17 $6.65 $13.02 $5.47 $12.26 287

SUNGLASSES 181 4 1.3 1.0 $37.57 $10.24 $9.74 $10.87 $21.46 175

DIET/NUTRITION 177 18 1.2 1.3 $14.83 $2.20 $7.24 $3.55 $8.10 183

SHAVING NEEDS 175 51 1.6 1.3 $39.73 $6.91 $14.42 $6.58 $14.62 272

SKIN CARE 169 138 1.4 1.5 $31.77 $8.97 $12.72 $6.39 $13.32 238

PICTURE FRAMES & ALB 144 5 1.0 1.2 $29.82 $9.03 $12.13 $8.66 $12.36 241

HOME DIAGNOSTICS 143 6 1.2 1.0 $35.90 $18.92 $13.66 $2.73 $15.83 227

HOUSEHOLD 135 110 1.5 1.4 $23.16 $2.24 $11.08 $3.68 $8.03 288

DOLLAR DEALS 128 22 1.2 1.7 $30.11 $1.60 $9.15 $8.44 $9.55 315

HAIR COLOR 125 11 1.0 0.8 $21.54 $4.89 $10.79 $5.86 $7.41 291

TOP OF CHECKOUT 124 13 1.5 1.2 $27.72 $2.76 $12.21 $4.75 $10.32 269

FOOT CARE 124 9 1.1 1.0 $30.93 $4.46 $10.91 $5.00 $9.15 338

GROCERY 118 74 1.6 1.5 $22.64 $2.71 $13.27 $5.02 $7.69 294

HOUSEHOLD PAPER 116 81 1.4 1.3 $23.73 $2.85 $11.13 $4.81 $9.24 257

HAIR CARE 116 48 1.4 1.1 $24.32 $3.35 $12.02 $4.54 $9.36 260

Merchandising: Perform assortment optimization for a category in tool, or link to Accenture Assortment & Space Optimizer

See overall lift as a result of marketing and merchandising tactics


Accenture Customer Insight can help move a

company from descriptive to predictive analytics


What will happen next?

What if these trends continue?

Why is this happening?

What actions are needed?

Where exactly is the problem?

How many, how often, where?

What happened?

What’s the best that can happen?Predictive Analytics

(the “so what”…and the “now what”)

Descriptive Analytics(the “what”)

“Rearview mirror” – provides foundation and insight

Future orientated and source of competitive

advantage

Accenture Customer Insight Platform & Modules

Customer Merchandising SupplierMarketing

Accenture Customer Insight Analytic Modules

Database, CPU & Storage

Segmentation & Analytics Engine

• Extract, Transform & Load (ETL)• CPU & Data Models• Data Cleansing• Data Storage

• Customer Segmentation

• Customer Profiling• Customer Behavior

Accenture Customer Insight Platform

• Inventory• Labor

• Promotions• Advertising• Campaign Mgmt• Loyalty

• Assortment• Space• Pricing

Operations

• Demand Signals• Supply Signals• Portfolio

• Transactions• Customers(Segments)• Channels (Store, Mobile, Web, Social)• Locations (Stores, Banners & Markets)• Products (SKUs)• Events (Campaigns)• Time (Date)


Accenture Customer Insight Software


1 Installed Software & Maintenance Licenses

2 Month-to-Month Software Subscription

3 “Cloud” Software as a Service Subscription

Accenture Customer Insight Platform & Analytic Modules

Accenture Customer Insight Services

What we offer

• Segmentation and “Micro-Segmentation” – Identify your best customers – the ones that

drive the greatest value to your enterprise. Understand the personas of customer segments.

Find the exact groups of customers, channels, locations, or promotions – “micro-segments”

– are most appropriate for a given offer or product.

• Customer Insight - Understand what promotions, prices, and products groups of

customers have responded to in the past and predict which they will want in the future.

• Marketing Effectiveness – Determine and measure the best promotions, prices, loyalty

programs, marketing offers for your customers

• Merchandising Effectiveness – Determine and measure the best product portfolio and

assortment range for your customers

• Supplier Collaboration –Share your customer, marketing and merchandising insights with

your suppliers to improve offers for your customers

Copyright © 2011 Accenture All Rights Reserved. 17

Accenture Customer Insight Services

Copyright © 2011 Accenture All Rights Reserved.

How we deliver

• Strategy – Strategic segmentation,

strategic planning, process optimization,

objective definition, key performance

indicator (KPI) definition

• Analytic Insights – Predictive modeling,

statistical clustering, ad hoc analyses,

recurring analyses, outsourced analytics.

• Data Management – Data management,

data modeling, data mapping, data

cleansing and extract, transform and load

(ETL) configuration to ensure the customer

data is ready to use

• Installation, Configuration, Hosting and

Support – Software installation and

configuration, “cloud” hosting,

customization, maintenance and support

1Consulting ServicesEnable your organization to gain value using

Accenture Customer Insight solutions through:

• Pilots

• Configuration & Set Up

• Training

2 Managed Service SolutionsAllow Accenture to manage the Accenture

Customer Insight solution for you, end-to-end

18

Getting Started – Pilot Ideas


Category Key Questions Addressed Anticipated Benefits

Promotional

Effectiveness

• What are the best promotions that deliver true incremental foot

traffic and basket size by customer segment?

• What is the impact on overall store sales, repeat purchase

behavior, frequency of transaction, new customers, etc.

• What is the penetration rates of pricing levels for each customer

segment?

Targeted promotions that result in

higher ROI

Assortment

Planning

• Who are the most valuable customers for a given category?

• What store/category specific assortments are likely to appeal to

target customer segments?

• Which SKU’s contribute the most to category value by customer

segment?

Increased efficiency of category

assortments (lower carrying costs

and higher sales); increased

loyalty of target customers

Category / Brand

Growth

• Who are the highest potential customers to grow my category?

• What SKU’s are most meaningful to them ($, volume, margin,

loyalty, etc.)

• What is the most effective way to market to them?

• What are switching opportunities for private label?

Improved sales through identifying

targeted customer opportunities

Target Segment

Growth

• What cross-sell opportunities exist around growing target

customer segments?

• What promotions (direct mail, circular ads, e-coupons, etc.) can

be employed to grow target segments? i.e. grow “Best Baby

Formula” customers from “Best Diaper” customers

Drive segment growth through

targeted migration tactics

Store to Market

Competitive

Evaluation

• What categories have the best upside growth to take volume

from competition?

• What customer segments should I retain and how?

Improved customer loyalty; new

customer growth

Why Accenture?

The Accenture Customer Insight team partners with clients to move beyond the

vision and quickly develop, drive and sustain growth through customer-infused

marketing and merchandising initiatives


Industry expertise• Experienced consultants many who are former

industry executives

• Close co-operation with management and

employees

• Clear industry focus to drive for the right initiatives

in the right areas

Implementation focus• Distinct make-it-happen attitude to deliver results

• Combination of quick wins as well as longer term

value sustaining activities

• No re-inventing of the wheel; leveraging existing

initiatives

Full-services portfolio in-house• Accenture specialists for growth and

innovation initiatives

• Accenture functional experts for all functions,

worldwide

• Transaction support, process and IT services

on site, near and off shore

Holistic approach• Addressing all stages of growth in the end-to-end

process through a cross-functional approach

• Focus on change management and active

promotion of performance culture

• Strategic view of growth from vision and an

enabling execution engine

Accenture’s

Key Differentiators


To learn more about Accenture Customer Insight,

visit Accenture Interactive:

www.accenture.com/accentureinteractive

Or contact us at

Bob Ghafouri

[email protected]

Tel: +1.703.947.4483

mailto:[email protected]?subject=Question about Accenture Customer Insight

Documents

How To Become A Customer- Infused Company...$ Sales - Comparison Product $ Sales - Primary Product $ Sales - Other Products Total Store $ per Basket Basket Size Index VITAMINS 7,950