Transcript No Slide Title

Ahead of the Curve:
Direct & Interactive Marketing
in a Digital World
Mark Van Clieaf
MVC Associates International
Toronto • Tampa • London • Johannesburg
416-489-1917 / 813-891-6644
[email protected]
www.mvcinternational.com
© Copyright 1999, MVC Associates International
Ahead of The Curve
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Global Macro Trends & Issues Impacting Marketers
Client Side Challenges
Trends in Traditional Direct Marketing
Trends in C-Commerce ( Customer Care )
Trends in D-Commerce ( Digital Direct Marketing )
Trends in E-Commerce ( Smart Cards, Bill Presentment, etc)
Trends in F-Commerce ( Fulfillment & Logistics )
Defining Customer Relationship Management & Branding
Changing Industry Landscape
Appendix - Information Sources
© Copyright 1999, MVC Associates International
Global Population Distribution
Shifts Dramatically
Population
(billions)
3.5
Asia excluding China and India
Africa
3
India
China
2.5
Latin America and the Caribbean
Europe
2
Northern America
Oceania
1.5
1
0.5
0
2000
Source: United Nations
2050
2100
2150
MVC Associates International
Internet Proliferates Faster Than Any
Communication Medium in History
Radio
38
Television
13
Net
4
0
10
20
30
40
Years to reach 50 million people
Source: U.S. Department of Commerce
MVC Associates International
Source: OECD
Mexico
Turkey
Poland
Korea
Hungary
Greece
Portugal
Italy
Czech Republic
Japan
1998
Spain
France
Belgium
EU Area
1997
Netherlands
Germany
Denmark
Ireland
Austria
120
Norway
United Kingdom
Finland
Sweden
Switzerland
Canada
Luxembourg
New Zealand
Australia
140
Iceland
United States
OECD Countries Lead in
Secure Server Growth
Secure Servers per Million Inhabitants
1999
100
80
60
40
20
0
MVC Associates International
Worldwide Internet Population
More Than Doubles in 3 years
Western Europe, Net
adoption over the past year
exceeded IDC’s
expectations.
The region is now expected
to spend $430 billion online
in 2003 – pretty impressive
when compared to the $708
billion forecast for the U.S.
Copyright ©1999, The Industry Standard
MVC Associates International
Broad Band Internet Access Only Hits
13 - 18 % in US by 2002
% 9
14 %
ISDN
Wireless (2GHz)
DSL
Cable Modem
Satellite
Wireless (20+GHz)
Line 7
8
7
6
5
12
High-speed data
connections as a %
of total online
10
8
4
6
3
4
2
2
1
0
0
1997
Source: Forrester
1998
1999
2000
2001
2002
MVC Associates International
Interactive Handheld Devices
Grow Rapidly Worldwide
Cell Phones - Worldwide
1997
2002
194 Million Units
500 Million Units
Personal Digital Assistants - Worldwide
1999
$2.3 Billion Sales
Source: International Data Corp
2003
$7.2 Billion Sales
MVC Associates International
Internet Shifts Purchasing Power
to the Consumer
• Reduces consumer search cost for information
• Reduces value of the brand that was information based
• Connects consumers with the most relevant vendors in
a timely fashion
• Extracts as much value for consumers as possible
• Price will become a commodity factor and re-define its
role in the purchase decision
© Copyright 1999, MVC Associates International
Governments Step up Interest in
Direct Marketing & E-Commerce
• Privacy of Customer Information
• Educational Access / Censorship
• Taxation of Internet and Global E-commerce
transactions cross-border
• OECD undertakes major initiatives
• European Commission - study of direct marketing
and E- commerce by the European Federation of
Direct Marketing
© Copyright 1999, MVC Associates International
Globalization vs Americanization
• “What we are experiencing is not just globalization, but rather the
Americanization of the Global economy”
• “2/3 of global advertising takes its cue from the US”
• “to keep increasing earnings and return on capital employed you
have no choice but to spread your business around the world”
• “China will surpass Japan this year as our # 1 Asian market”
• “the power of globalization is about leveraging knowledge that
can be shared, and the US is at this time, where we are creating
the most knowledge, including how to use the internet to reshape
industries”
Martin Sorrell, Chairman WPP Group PLC
© Copyright 1999, MVC Associates International
Marketing Science Institute
(Key Research Priorities)
• Marketing Metrics & Performance
• Understanding the Customer Experience
• Marketing & the Internet
• Members: Fortune 500 including
3M, Bank of America, Bristol Myers,
Chase, Coke, Kodak, Fidelity, GM, IBM, Kraft, Motorola, P&G, SBC, Sears,
Unilever, Volvo, BCG, Andersen, McKinsey, Mercer, Y&R
© Copyright 1999, MVC Associates International
Center For Marketing
& Technology
• The boundary between marketing & technology
is dissolving
• Effects of new distribution channels on branding
and customer loyalty
• Tools to forecast lifecycles of new technology
products
• Members:
– Carlson Wagonlit, Cellular One, IBM, UPS, Visa, Y&R
© Copyright 1999, MVC Associates International
E-Commerce vs. E-Business
Strategy Options
• E-Commerce (selling online through the internet)
• E-Business (transforming the value chain and
becoming a customer led enterprise through the internet)
– Spin-off E-Business subsidiary as a pure play
– Integrate E-Business with existing company operations
– Transform completely into an E-driven enterprise
© Copyright 1999, MVC Associates International
Growing Shareholder Value
and Linking to Customer Value
• Analysts need to be educated about new metrics to
monetize the customer base (inaccurate valuations)
• New Customer Metrics Required
– Depth of Relationship
– Breadth of Relationship
– Duration of Relationship
– Revenue & profitability of relationship
– Future profit potential of the relationship
– LTV
• Measures at the individual and customer portfolio level to
drive shareholder value
© Copyright 1999, MVC Associates International
Global Direct Marketing Expenditures
By Geography
North America
Canada
4%
Europe
Denmark
Sweden
1.5% Ireland
Spain 2.2%
.4%
4.9%
Finland
Netherlands
.1%
7.2%
Germany
37.2%
Italy
9.4%
US
96%
France
15.2%
UK 21.0%
$185 billion US in 1998
Source: DMA-US, FEDM, CMA
$41 billion US in 1996
© Copyright 1999, MVC Associates International
Global Direct Marketing
Spending By Channel / Media
North America
Magazine
/ Radio
8%
Newspaper
10%
Telemarketing
38%
Europe
Direct
Advertising
30%
Telemarketing
12%
Other Media
/ Online
8%
DR TV
12%
Direct Mail
24%
Source: DMA-US, FEDM, CMA
Direct Mail
58%
© Copyright 1999, MVC Associates International
C-Commerce
(Marketing Principles change
from outbound communications to in/out-bound customer care)
Phone IVR E-mail Web Teleweb ITV PDA’s
• Business rules database
• Customer profile database
• Interactive history database
© Copyright 1999, MVC Associates International
D-Commerce
The Web has Many Uses
Primary Uses of the Web (1998)
% of Users
How Many Online Worldwide
Millions
100
400
90
350
80
73.6%
70 61.4%
60
65.9%
300
60.1%
250
52.4%
205
50
200
40
35.4%
150
30
98
100
20
55
8.7%
10
0
26
0
Education
Entertainment Communication
Personal Info.
Work
Shopping
Other
1995 1996 1997 1998 1999 2000 2005
Source: Nua Internet Surveys
© Copyright 1999, MVC Associates International
Asia-Pacific Net Penetration will
Quadruple
The Net population in the
Asia-Pacific region and
Japan alone will
quadruple, reaching 80
million by 2003.
In fact, Singapore now
ranks above the North
American and
Scandinavian countries
as the most Net-savvy
nation on Earth.
Date Issue
Copyright ©1999, The Industry Standard
MVC Associates International
Balance of the World Connects
Date Issue
Copyright ©1999, The Industry Standard
MVC Associates International
China’s Net Population Doubles
Increased competition
between ISPs has led to lower
prices.
This has caused the number
of Internet accounts in China
to double during the first half
of this year, with most traffic
headed for the World Wide
Web.
Date Issue
Copyright ©1999, The Industry Standard
MVC Associates International
Africa Dials In
Africa’s rural geography has
traditionally left it behind the
global technology-adoption
curve.
New data from researcher
Sangonet shows that Net users
can be found across the
continent.
49 of the 54 countries and
territories in Africa now have
Internet access in the capital
cities. In fact, the Web population
in Kenya, Botswana, Egypt, Ivory
Coast, Malawi, Morocco and
Tunisia more than doubled in the
past year.
Date Issue
Copyright ©1999, The Industry Standard
Source: Nua Internet Surveys from Sangonet, January 1999
MVC Associates International
Worldwide Internet Ad Spending
Grows To $33 Billion By 2004
North America
1999
2000
2001
$2,805
$5,358
$8,680
$12,587
$17,244
$22,244
$26
$52
$93
$154
$238
$345
$2,831
$5,410
$8,773
$12,740
$17,482
$22,589
Germany
$92
$202
$397
$730
$1241
$1,861
United Kingdom
$81
$177
$347
$597
$955
$1,414
France
$33
$71
$135
$243
$425
$679
Scandinavia
$26
$49
$94
$153
$222
$355
Netherlands
$11
$25
$51
$89
$142
$213
$8
$15
$28
$46
$66
$106
$35
$81
$165
$313
$538
$852
$286
$621
$1,217
$2,169
$3,589
$5,480
United States
Canada
Total North America
2002
2003
2004
Europe
Finland
Other Europe
Total Europe
* Totals may not equal sum of rows due to rounding
Source: Forrester Research
($ millions)
MVC Associates International
Worldwide Internet Ad Spending
Grows To $33 Billion By 2004
Asia/Pacific
Japan
$117
$234
$459
$789
$1,262
$1,944
$23
$51
$99
$171
$273
$404
China
$8
$16
$40
$100
$220
$440
South Korea
$5
$13
$25
$48
$86
$145
Taiwan
$4
$10
$20
$38
$68
$116
Other Asia/Pacific
$9
$23
$48
$90
$161
$272
$166
$346
$691
$1,235
$2,070
$3,322
Brazil
$30
$69
$145
$283
$509
$890
Mexico
$11
$28
$61
$127
$241
$422
Other Latin America
$10
$24
$54
$107
$199
$334
$51
$121
$259
$517
$949
$1,647
$2
$4
$8
$14
$23
$37
$3,336
$6,502
$10,948
$16,675
$24,113
$33,075
Australia
Total Asia/Pacific
Latin America
Total Latin America
Rest of world
Total worldwide
* Totals may not equal sum of rows due to rounding
Source: Forrester Research
($ millions)
© Copyright 1999, MVC Associates International
On-Line Spending by Category
Jupiter Communications says
consumer-goods advertisers will
increase their share of Internet
media dollars.
More than half of marketers
surveyed by Forrester say their
online ad spending will come on
top of current media budgets.
However, some marketers plan
to fund Net ads by slashing
traditional media: 33 percent will
cut their TV budgets.
Date Issue
Copyright ©1999, The Industry Standard
© Copyright 1999, MVC Associates International
Expert Insight: Leveraging TV-Net
Synergies
TV drives traffic to Web sites.
Overall, 24 percent of Internet users
have accessed a URL they saw
advertised on TV, which makes TV
almost as important as word-ofmouth advice.
“Media junkies” provide new
marketing opportunities. Over 8.5
million media junkies in the U.S.
report going online while watching
TV. Such viewers are more likely to
use advance technologies such as
Shockwave and chat. By developing
online content for these viewers,
networks can extend their brands
and test methods for blending
interactive and broadcast content.
Date Issue
Copyright ©1999, The Industry Standard
The bottom line: Marketers who continue to view
TV and the Internet as competitors will miss the
opportunity to take advantage of the ways they
work together.
© Copyright 1999, MVC Associates International
Total Overall Media Spending
is Growing
In fact, the latest analyst
forecasts predict that U.S.
Internet ad spending will total
between $4.7 billion and $6.5
billion in 2000.
Forrester Research predicts a
$22 billion year for the
industry in 2004.
Date Issue
Copyright ©1999, The Industry Standard
© Copyright 1999, MVC Associates International
Loyalty Programs Online
But not Re-invented
• MVC Loyalty Program Research - 1998
– Launched due to competitive issues NOT good
business case
– No true understanding of long term financial impact
on profits and balance sheet liability
– Failed to differentiate segments based on customer
economic value Acquisition not retention focus really promotional points
– Mix of hard and soft benefits not well researched and way
too complicated
– Subsidized already loyal customers
– Failed to use modeling and customer information to
customize reward & recognition, communications and
create one to one relationship
© Copyright 1999, MVC Associates International
Opt-In E-mail Takes Off
How important is e-mail to your sales and marketing strategy?
Very unimportant
6%
Unimportant
24%
Important
32%
Very important
38%
Percent of 50 companies interviewed
Source: Forrester Research
© Copyright 1999, MVC Associates International
Opt-In E-mail Plays Key Role
In Marketing Strategy
What are you using outbound e-mail for?
Promotions and discounts
66%
Newsletter
48%
Product releases
34%
Advertising/marketing
28%
Alerts/reminders
Market research
Other
24%
8%
4%
Percent of 50 companies interviewed
(multiple responses accepted)
Source: Forrester Research
MVC Associates International
E-mail Will Deliver Transactive Content
T
Customer service
transactions
• Order form
• One-click buying
• Service request form
• Account information
Send
Transactive
Content
Product content
• Features
• Upgrades
• Pricing
• Specials
Source: Forrester Research
Reply
I
Marketing interactivity
• Events calendars
• Alerts
• Feedback
• Polls/surveys
• Rewards Programs
C
© Copyright 1999, MVC Associates International
Personalized E-mail Requires Help
From Outside Experts
Outsourcers:
Viant
Proxicom
Sapient
Comments:
Sy stems integrators
hav e the technical
acumen necessary to
build this complex
inf rastructure
Outsourcers:
Bronner Slosberg
Humphrey
Foote, Cone, & Belding
Comments:
Database marketers
prov ide data mining
skills to identif y
patterns in customer
responses; f indings
ref ine of f ers, prof iles,
and business rules
Source: Forrester Research
Personalization
Delivery
Content
management
Prof ile
database
Business
rules
Outbound
e-mail serv ers
Web serv er
Outgoing
messages
Responses
Inbound
e-mail serv ers
Analysis
Data
analy sis
serv ers
Datamarts
Internet
Outsourcers:
Digital Impact
E-Dialog
Responsy s.com
Data distribution
hub
Comments:
E-mail serv ice bureaus prov ide
serv er f arms, broad bandwidth,
and campaign testing
MVC Associates International
Advertising Dominates $20 Billion
In Interactive TV Revenues
Enhanced broadcast
Revenues $ 7,000
(millions)
6,000
5,000
4,000
3,000
2,000
1,000
0
1999
Ads
Commerce
Subscriptions
Total
1
0
0
$1
Ads
Commerce
Subscriptions
2000
2001
2002
2003
2004
15
52
2
$69
216
233
10
$459
1,188
1,233
31
$2,452
3,429
2,490
47
$5,966
6,177
3,838
72
$10,087
* Excludes video on-demand and pay-per-view
Source: Forrester Research
MVC Associates International
Interactive TV Revenues Divert
$ 11 billion in advertising
TV promo ads
Web ads
Guide vendors
EPG
$3.2B ads
$1.1B commerce
Outdoor
Cable and
satellite
operators
TV ads
Direct marketing
Consumer electronics
Enhanced broadcast
$6.2B ads
$3.4B commerce
$0.1B subscriptions
Producers
Networks
Affiliates
Premium channels
Portal ads
Web ads
Commerce sites
ISPs
Source: Forrester Research
Web on TV
$1.6B ads
$1.9B commerce
$1.8B subscriptions
Media sites
Commerce sites
Web-on-TV vendors
MVC Associates International
Marketers Use An Array Of Online
Systems
Which external marketing services do you use?
Will Add
by 2002
Use Today
Measurement
audience
58%
Ad network
34%
Rich media
ad delivery
Email service
bureau
Affiliate
program
Promotional
services
Campaign
analysis
Provides site audience
demographic data
Delivers and tracks banners
across multiple sites
DoubleClick,
24/7 Media, Flycast
Enliven,
Thinking Media
Sells ads on
content sites
Creates and delivers
interactive banners
Digital Impact,
NetCreations, Echo Mail
LinkShare,
BeFree
Delivers and tracks
email marketing messages
Administers and tracks
affiliate networks
34%
22%
Netcentives,
coolsavings.com, Webstakes
Avenue A,
Millward-Brown
Operates incentive
and loyalty programs
Determines
campaign ROI
20%
Source: Forrester Research
12%
10%
8%
36%
6%
8%
44%
6%
30%
Definitions
Media Metrix,
Nielsen Net Ratings
AdKnowledge,
DART for Advertisers
70% 14%
Third-party
ad server
Examples
MVC Associates International
Marketers Use An Array Of Online Systems
Do you contract these marketing services
directly, through your agency, or create them in-house?
Through an
agency
Audience
measurement
Affiliate
program
38%
50%
33%
Rich media
ad delivery
Email service
bureau
41%
77%
Third-party
ad server
Ad network
Purchased
direct
3%
0%
30%
32%
23%
7%
Promotional 17%
services
Campaign 20%
analysis
3%
0%
14%
37%
Created
in-house
78%
43%
24%
41%
14%
57%
14%
Percentages based on responses from 50 marketers interviewed (multiple responses accepted)
Source: Forrester
MVC Associates International
Digital Marketing Complexity
Requires Marketing Systems Integrators / ASP
to Play Four Roles
Connect
Collect
Analyze
Distribute
Log files
Campaign
performance
Marketers
What
works
Affiliate
programs
Market
services
Integrated
marketing
database
What
doesn't t
Promotional
offers
Sites
Email
response
Purchase
history
Source: Forrester Research
MVC Associates International
Broadband Enviromercials
(Entertainment, Information, Digital Marketing, Online Purchase)
BoardWear.com
Color
Blue
Size
XL
Qty.
One
Blue
3ON T OUR NOW . . . NEW RELEASE
Green
ENTER THE CONTEST
And Get . . .
$10 OFF
your next
purchase
Buy T he CD!
Source: Forrester Research
Click Here
MVC Associates International
Worldwide E-Commerce Climbs
This increased
European activity will
help drive global
e-commerce growth
from $50 billion last year
to $1.3 trillion by 2003.
That’s 26 times 1998
spending levels.
Date Issue
Copyright ©1999, The Industry Standard
MVC Associates International
E-Commerce 15 % OECD
retail sales by 2005
Toy-giant Mattel will spend $50
million to launch an e-commerce
venture that the company says
will bring in $60 million this year,
at gross margins greater than
those of its traditional business.
Sound good? An OECD policy
group has compiled over 150
pages of economic reasons why
governments and businesses
worldwide should pay attention
to the ramifications of digital
commerce.
Date Issue
Copyright ©1999, The Industry Standard
Cost Drivers of E-Commerce
& Internet
US$ per Transaction
Traditional system
Airline
tickets
Banking
Bill
payment
8.0
1.08
2.22 to 3.32
Telephone-based
Term life
Software
insurance policy distribution
400-700
0.54
15.00
5.00
Internet-based
1.0
0.13
0.65 to 1.10
200-350
0.20 to 0.50
Savings (%)
87
89
71 to 67
50
97 to 99
Source: OECD
MVC Associates International
B to B E-Commerce
Spreads Globally & 10 x B to C
Amount In
US Billions
US - E - Commerce
1400
1300
1200
1331
Business - to - Business
Business - to - Consumer
1100
B-to-B E-Commerce Worldwide
(Millions)
Region
2001
2005
1000
900
Middle East
$45.1
Africa
$40.9
South America
$45.9
Europe
$990.5
Asia Pacific
$1,185.6
North America $47,027.7
Worldwide
$49,335.8
843
800
700
600
499
500
400
300
200
100
0
251
109
8
43
1998
52
18
33
1999
2000
2001
76
2002
$120.3
$125.0
$153.8
$3,422.1
$11,174.1
$595,149.1
$610,144.4
108
Source: Computer Economics
2003
Year
Source: Forrester Research
MVC Associates International
CEO’s Make E-Commerce &
E-Business Strategic Priority
Just two years ago, most
businesses didn’t have an
Internet strategy at all. Those
that did let IT managers plan it.
After a year of interviews,
surveys and case studies with
executives from around the
world, the Economist’s
Intelligence Unit and Booz-Allen
& Hamilton found that CEOs now
strongly believe in the Internet
Economy to add to the bottom
line, fuel growth, improve
customer satisfaction and
increase efficiencies.
Date Issue
Copyright ©1999, The Industry Standard
MVC Associates International
Emerging Electronic
Payment Systems
• Credit Cards
– 92 % on-line transactions paid by credit card
( source bizrate.com )
• Smart Cards
–
–
–
–
Amex - the Blue Credit Card with free home readers
Microsoft - Smart Card for Windows
Pilots worldwide
will converge with wireless
• Electronic Checks
• Digital Cash
© Copyright 1999, MVC Associates International
Loyalty Programs
# 2 application for Smart Cards
Percent of 51 Card Issuers Interviewed
Stored Value
65%
31%
Loyalty Program
27%
Internet Security
16%
Micropayments
10%
Transit
Secure Electronic Transactions
4%
Ticketing
4%
Electronic Benefits Transfer
4%
Telephone
4%
4%
Other
20%
Undecided
0
Source: Forrester Research
10
20
30
40
50
60
70
MVC Associates International
F-Commerce (Fulfillment & Logistics)
The Next Big E-Business Play
• Build, buy, drop ship, outsource
• Will be a key determinant of the branded
customer experience
• Walmart decided NO/GO for online Xmas
because fulfillment / logistics not ready
© Copyright 1999, MVC Associates International
Customer Relationship Management
CRM / E CRM
• Has become a catch-all term for many
• Most enterprises do not really understand the
organizational / change management / metric
issues of true implementation
• Forrester Research suggests Web will assist in
technology migration around legacy systems
• The web is fragmenting marketing applications for
CRM / e-CRM because technology vs client driven
( separate suppliers/ datamarts for e-mail/affiliate programs/call
centres/promotions/ banners etc )
© Copyright 1999, MVC Associates International
Focusing on the Customer
• Economist / Andersen Study - 200 Co’s
– Only 18 % currently organized around customer type
– 49% plan to build customer centered org’l structures
– 33 % planning to re-design product / service development,
delivery, customer ID & after sales service
– use of customer life-time sales measures will grow by 83 %
– use of customer-retention measures will increase 57 %
© Copyright 1998, MVC Associates International
Organization
Product / Customer / Channel
Goal & Marketing Investment Alignment
Current
Enterprise / Product Goals
=
Future
Customer Goals
Revenue / Cashflow
1 and 3 Year Goals
M
L
Acquisition
• ROE
• ROA
• Contribution Margin by
Product
Translate /
Align
Development
• SG&A / Expense Ratio
• EBIT
• Free Cashflow / EVA / SVA
Segment A
• Fee / Revenue by Product
Segment C
Segment B
H
Win-Back
© Copyright, MVC Associates International, 1998
The Killer B’s
• From the 4 P’s to the Killer B’s
• Branding
– shifts from product to enterprise branding
– shifts from snap shot awareness / image to positioning and
degree of involvement over the customer rel’shp life-cycle &
share of wallet
• Bundling
– creates new value propositions that deepens rel’shp
i.e. meta-level product mgmt
– creates competitive advantage with some customer segments
• Bonding
– executes the Brand Promise at each “Moment of Truth” Branded Customer Experience
– integrates all touch points - any time & any where - & links to
channel preference, life-stage / lifestyle
• Billing
– Creates pricing discovery mechanisms - auctions, etc
– recognizes bundled pricing strategy / LTV / Risk
– recognizes preferred payment methods / emerging electronic
payment options
© Copyright, MVC Associates International, 1998
Branding Takes on New Meaning
Marketing
Element
Branding
Mass
Marketing
Customer
Development
Strategy
Acquisition /
Activation
Complete
Customer
Lifecycle =
Acquisition /
Branding
Activation,
Micromarketing
Usage
and Customer
Stimulation,
Relationship
Cross-Sell
Management
new products
/ services,
Retention,
Win-back
Branding
Objective
Value
Relationship
Marketing
Proposition
Between
Communication
Customer &
Linked to
Strategy
Brand
the Brand
One
dimensional
and channel
dependent
Awareness,
Knowledge
& Relevance Fixed / Static
with the
Linked to
product
product
benefit
Initiated by
the marketer
Individual
product /
service level
Static
relationship
One way
communications
developing
single message,
image & brand
perception
Tools for
Branding
Advertising,
Name
Development,
Package
& Collateral
Material Design,
Trademark, etc
Engineering the
Bundle of
total customer
Initiated by
products /
experience
Two-way
services and the customer
including
customer
& or marketer
channel
processes,
dialogue tailored
independent
technologies &
depending upon
Enterprise
training to ensure
stage of
Customer
Flexible and
level
that each
customer
Involvement customized
relationship
customer
touch
relationship,
& advocacy
to micropoint
(call
centre,
Dynamic
customer
of the brand
segment /
mail, retail,
involvement
segment,
promise
individual
e-mail,
website,
depending
customer
and current and etc) provides an
upon suite of
needs
potential
integrated
products /
customer
experience
Linked to the
services
profitability
consistent with
brand
needed
the brand &
promise
relationship
Measurement
Recall
Customer
Satisfaction
ROI on
marketing
expense
Share of
Wallet
Current or
life-time
profitability
© Copyright 1999, MVC Associates International
Campaign Centric
vs. Customer Centric
Strategy
Organization
Capability
Customer, Product,
Channel, P&L Goal &
Resource Alignment
Customer Centric
Business Strategy
Customer Portfolio
Organization
Information
Technology
Integrated Customer,
Product, & Channel
Compensation
Customer Processes
Customer Segments
Customer Information
Mgmt
Customer Marketing
Marketing Skills
Value Proposition
Development
Customer Contact
& Campaign Mgmt
Mass Customized
Product Attributes &
Benefits (bundling &
co-marketing)
Inbound / Outbound
Contact Strategy &
Goals
Mass Customized
Channel Access &
Customer Contact
Process Design
Coordinating &
Sequencing
Targeting Models &
Test & Control Tactics
Value / Risk Based
Pricing Strategy &
Payment Options
Mass Customized
Communications
Strategy & Creative
Development
Mass Customized
Promotion to Create
Trial
Customer Information
Mgmt & Campaign
Tape Production
Evaluation &
Measurement
Back End Analysis,
Customer Learning,
& Recommendations
Customer, Product &
Channel Goal
Process Evaluation
Customer Portfolio
Review &
Recalibration of
Models & Customer
Insight
Dynamic Customer Focused Test, Learn, & Value Creation
© Copyright 1998, MVC Associates International
Gartner Identifies Leading
CRM Suppliers
(criteria open to debate)
Challengers
Leaders
Andersen Consulting
KPMG
Cap Gemini
Ability to
Execute
IBM
NCR
PWC
Centrobe
Acxiom
Tessera
Deloitte & Touche
Ernst & Young
CTP
TSC/eLoyalty
Answerthink
McKinsey & Co
Peppers & Rogers
Niche Players
As of 7/99
Visionaries
Completeness of Vision
MVC Associates International
The Waves of Customer Centric
Business
Strategy
Time of
Sale
Wave 1
Frequency /
Loyalty
Wave 2
Customer
Value
Optimization
Product
Centric
Annual
Business
Plan
Purchase
Drivers
Source of
Value
CIM
Customer
Org Design
Marketing
Objective
Compensation
Price,
Delivery,
Convenienc
e
Product
Feature /
Benefit,
Fixed
&
Uniform
Batch,
Points
&
Rewards,
Outbound
Not
In
Place
Product
Brand
Equity
Product
P&L
Customer
Support
Batch
(2 wks-24hr)
Mass
Product
Customized
Purchase
Training,
Data,
Service,
Customer
Support
Value
Scoring,
Outbound
Ease of
Upgrade
over
Time
Customer
Knowledge,
Ongoing
Learning,
Anticipating
Needs
Product
Centric
Product
Centric
Migrating to
Customer
Centric
Wave 3
Dynamic
Customer
Management
Planning
Horizon
Customer
Centric
Period
of
Contract
Life
of
The
Customer
Real Time,
Integrated
Across
LOB’s,
Inbound
&
Outbound
Product
P&L
Customer
Processes,
CIM
Enterprise
Wide
Customer
Processes,
Customer
Segments,
CIM
Relationship
Equity
Community
Equity
Product
P&L
&
Starting
Customer
Metrics
Customer
Value &
Duration,
Product &
Channel
P&L,
EVA / SVA
© Copyright, MVC Associates International, 1998
Corporate Development =
Industry Convergence across
C-D-E-F Commerce
continuum
• North America (Winterberry Group & other sources)
– Convergys emerges from merger of AT&T Customer Care &
Matrix Marketing
– US Web acquires CKS and then Mitchell Madison (former McKinsey)
– Doubleclick acquires NetGravity, Abacus, Opt-in Email.com
– Y&R acquires Knowledge Base Marketing
– Federated Dept Stores buys Fingerhut
– Toys”R”Us.com buys Genesis Direct
– EDS acquires Neodata ( database & fulfillment ) creates Centrobe
– Venture Capital = 57 % deal activity
– Interactive Agency acquisitions slow as transactions focus on business
solutions providers and internet consultancies
© Copyright 1999, MVC Associates International
US Future Acquisition Intentions
Expansion Plans By Segment
36%
Internet/E-Commerc e
26%
15%
Database
5%
Fulfillment
10%
3%
Expanding Existing Presence
Entering New Segments
7%
Direct Response Agency
4%
7%
Web Agency
Sought-After Acquisitions By Media Channel
4%
8%
Consulting
1%
7%
Teleservices
1%
6%
List
2%
27%
Internet / E-Commerce
22%
Direct Mail
13%
Telemarketing
12%
5%
Computer Services
Alternative Media
2%
10%
6%
Promotion
0%
Catalog
Market Research
8%
6%
1%
DRTV
6%
Printing
0%
5%
Lettershop
0%
Software Provider
3%
6%
Magazine / Newspaper
3%
Indifferent
0%
Source: Winterberry Group LLC
MVC Associates International
“If You’re Not Confused,
You Don’t Know What’s
Going On !”
Or
“Destroyyourbusiness.com”
Jack Welch, CEO, General Electric Corporation
MVC Associates International
Appendix
Information Resources
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
USA, Direct Marketing Association
Canadian Marketing Association
UK, Direct Marketing Association
Federation European Direct Marketing
Forrester Research
Gartner Research
NUA Internet Surveys
International Data Corporation
The Industry Standard
Business 2.0
The Red Herring
Marketing Science Institute
The Center For Marketing & Technology
OECD
United Nations
Economist
Winterberry Group
Results International Consulting
MVC Associates International
etc
© Copyright 1999, MVC Associates International
Appendix
Books
• Digital Darwinism - Evan Schwartz
• Blueprint to the Digital Economy - Don Tapscott & David Ticoll
• Customer.Com - Patricia Seybold
• Net Future - Chuck Martin
• Net Gain - John Hagel & Arthur Armstrong
• Futurize Your Enterprise - David Siegel
• Real Time: Preparing for the Age of the Never Satisfied Customer Regis McKenna
• The Power of Now - Vivek Ranadive
• The End of Marketing as We Know It - Sergio Zyman
© Copyright 1999, MVC Associates International