Transcript TERADATA MSI PRESENTATION

All rights are reserved. Members of MSI and academic researchers may make
limited copies of this presentation, electronically or in print, solely for their internal,
non-commercial use. Any other use of this presentation—including reproduction for
purposes other than those noted above, modification, distribution, or
republication—without prior written permission of the Author is strictly prohibited.
CRM Power Tools for Business Results
Intelligence-Based Marketing
Peter Heffring
President
CRM Division
Intelligence-based
marketing
The company knows
who you are, what
you prefer, and
communicates with
relevant, timely
messages, using the
power of analytical
intelligence to detect
patterns, decode
strands of information
and create
meaningful offers and
value
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
How Do Your Customers
‘Experience’ Your Business?
‘Schizophrenic’
marketing
The company has
delusions about who
you are, forgets what
you prefer, and tries to
reach you with offtarget communications
that alienate you –
based on fragmented
data & inadequate
faculties, resulting in
confusing, chaotic
‘multiple personalities’
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
I can’t believe it. I’ve been a good
customer for ten years. And they
still don’t ‘get’ me and the things
that interest me.
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Hey! Just because we bought
Dad a tool set last year does
not mean we want to see every
drill bit in your inventory.
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
I have 2 million frequent
flyers with your airline and
still do not get respect
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Remember …
… the bad times?
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
I need personal
attention - help me!
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Give me
convenience!
Service – now!
Convenience!
Respect me!
Make it easy!
Help me – asap!
Don’t embarrass me!
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Quality of life!
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
The Marketer’s Task: Understand and
Communicate Successfully With a Multitude
of Individual Customers Every Day
Marketers need the technology
‘power tools’ to gather, analyze
and interpret thousands or millions
of data strands of customer
interaction detail from countless
touch points, channels and data
sources – cracking the DNA code
of each customer and learning
over time to communicate and
build meaningful relationships
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Today’s marketers have a lot to manage!
acquire
reward loyalty
grow the relationship
retain customers
Do you know what constitutes a
good customer?
Are you using customer
lifestyle/lifestage data to find
prospects?
Can you match customers to the
right products and services?
Can you use the above knowledge
with your current prospect lists to
target your marketing efforts?
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Customer Relationships & CRM More Complex Than Ever Before
Who are my most loyal customers
and what promotions are most
effective?
Do you treat your loyal customers
differently than your others?
When a customer touches your
business, do you have the
capability to engage them with
targeted messages?
How do you determine the level of
personalization you give?
Who are your most valuable
customers and what are their
attributes?
What products do my customers
purchase and what do they
crossover purchase?
What will my customers want next?
What product promotions increased
sales, transaction size,
frequency and crossover?
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Which of your profitable customers
are at risk of leaving?
What are the buying habits of my
best customers?
Are you matching products and
services to the right channels?
Can you detect behavioral events
and provide timely and relevant
customer communications?
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
The Challenge: Find Patterns, Decode
Messages, Turn It All To Business Advantage
How can a marketer …
• Make sense of a tidal wave
of interaction detail?
• Serve and satisfy a million
individual customers?
• Deliver profitable returns
on so many relationships?
• Help the business meet its
goals and objectives?
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Business Needs & Expectations
Today’s executives
must justify:
 Every dollar spent
 Every initiative
And must show:
 The link between
dollars spent, these
initiatives and
return on customer
relationships
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
45% of companies are
considering CRM projects1
• 37% have installations
under way or complete1
• CRM budgets are not being
slashed despite slow
economy2
•
2Source:
1Source:
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Capitalize on CRM Technology
Interactive Week, Aug 20, 2001
Forrester Research, 2001
Capabilities that Companies Must Have
• Broad range of actionable
analysis and predictive
modeling capabilities
• Holistic view of customer
interactions to understand
the whole customer
• Means to understand and
automate the event rules that
drive the business and
communicate with
individual customers
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Analytical CRM ‘Power Tools’
Store /Branch
Direct
Mail
Call Center
Agent
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
E-Mail/Fax
Analytical CRM
ATM/Kiosk
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Manage the Total Communications
Environment with Analytical CRM
Tactical cultivation of customer relationships
based on strategic vision and objectives
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
What is CRM really trying to do?
– Achieved as a company analyzes and prioritizes opportunities,
then communicates with intelligence and relevance to
individual customers – in preferred channels
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Relevant Offers
Analytics and Modeling
Insight
Action
Communication Planning
Personalize Communication
Customer Optimization
Communication Delivery
Timely Messages
Timely Messages
Intelligence
InterAction
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Lead With Analytical CRM
For Mission-Critical Intelligence
Operational CRM Systems
Data
Warehouse
Disk
array
All Channels All Touchpoints
Capture
Data
ATM
Internet
Extranet
E-Mail/
Fax
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Sales/
Store /
Branch
Direct
Mail
Kiosk
Agent/Call
Center
Analysis
• Analyze
customer
profiles &
behavior
• Target
customers
• Evaluate
response
• Event Analysis
Modeling
• Build and
analyze
predictive
models
• Score
customers
Personalization
• Generate personalized
offers by customer
• Build personalization
Rules
Communication
• Plan continuous
communication
dialogues
• Define batch and real-time
event rules and trigger
Optimization
Interaction
• Prioritize and limit
communications
by channel
• Regulate frequency
and quantity of
contacts by
channel
• Optimize customer
communications
through contact
modeling
• Deploy outbound
or manage
pending
inbound/eventdriven
communications
• Manage workflow
of interactions
• Personalization
Merge
• Real-time
personalization
Industry LDM
Data Warehouse
ALL CUSTOMER INTERACTION DATA
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
How Analytical CRM Functions
Benefits
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Percentile Analysis
– Rank and group
customers on any key
measure
– Understand relative
customer differences
based on deciles
– Actively target
customers directly from
charts & immediately
include them in
campaigns
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Key Benefits
– Identify key
characteristics
of intersections
between
customer groups
– Ability to target
and save
customer
intersections
– Represent and
analyze
relationships
between
segments &
attributes
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Cross-Segment Analysis
Key Benefits
– Analyzes data
patterns to offer
predictive insight,
e.g. ‘what products
do customers
typically purchase
with other products
over time?’
– Extends market
basket analysis
across purchases
over periods of time
– Predicts activity
leading up to & after
a significant purchase
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Pattern Detection
Benefits
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Response Modeling
– Automatically models
most likely responders
for a communication
– Eliminates guesswork
by identifying
significant variables
that affect response
behavior
– Actively target
customer directly from
charts
– Leverages Analytic
Datasets
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Benefits
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Personalization Rules
– Build offer,
message, discount,
and optimization
rules
– Evaluate each
customer
individually to
determine the best
content to deliver
– Capture and
automate
marketing IP.
– Deliver offers
tailored to each
individual
customer.
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Benefits
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Communication Manager
– Relevant
Communication through
right Channel at right
Time
– Flexible campaign
definition, one-to-one
or mass campaigns
– Multi step, multi
channel communication
– Closed loop
communications
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Enterprise Rules
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Key Benefit
– Provides a
framework to
define rules
across the
enterprise
that trigger
marketing
opportunities
(Q1 2002)
Customer Life Time Value Campaign
Analysis
3.) Create
segments
according
to an LTV
campaign
model propensities
and needs
11.) LTV
Campaign
Results
Available for
Analysis via
OLAP Reporting
by Marketing or
LOB
Modeling
1.) LTV Campaign
model created and
run to calculate
campaign scores
2.) Model
Customer
Behavior to
identify life
cycle events
10.) LTV
Campaign
Responses
modeled to
improve
campaign
targeting and
profitability
Personalization
Optimization
5.) Set personalization
rules to format
communications
appropriately for each
customer.
6.) Prioritize and
Optimize mix of
communications
deployed to
channels, may
use profitability
scores
Communication
4.) Communication plan
created. Communications
approach and offers
linked to LTV
campaign.
9.) Costs of LTV
Campaign calculated
based on actual
channel activity
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Interaction
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Analytical CRM in Action
7.) Communication
Plan handed off
to channel
systems (e.g.
Siebel Broadvision)
for execution
8.) Action,
Response and
Results
captured and
handed back to
Communication
Manager for
campaign
analysis.
CRM is an ongoing,
scientific process …
…not an isolated campaign
or marketing plan
– Must create a process for
achieving the intended ROI
– Note the difference between
database marketing, sales force
automation, and CRM
– To measure CRM success,
measure the impact of the entire
process
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Achieve Positive Business Results
… Over Time
•
•
•
•
570,000 leads, 100 campaigns in 6 mos
$4.4 billion of new business in six months • Four continents – 15 countries
• $250 BB Australian in assets
Retention rates of 98.4%
• 9 million customers
28.7% increase in profit in six months
• Triple digit ROI on total DW + CRM
investment after 4 months = 265%
• High double-digit campaign responses
• Named 2000 NCDM winner for best results
• 600 home improvement stores
• $15 BB annual sales
• 40,000 products on the shelves
• Generated $1 M in one district in one week
• 6,000 leads in 5 weeks – and 40%
• Largest retail bank in the world
generated a sale or service opportunity
• 4,500 consumer banking centers
• 9 or 10 customer sat – on 10pt scale
• Serving 28 million households
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Market leaders taking the first steps
have proven the CRM business case
Quality of
Customer
Experiences
Copyright@2001 Teradata, a division of NCR, All Rights Reserved
Achieve Positive
Business
Results
© 2002 presented by Peter Heffring at the Marketing Science Institute’s Conference on Customer Relationship Management:
Customer Behavior, Organizational Challenges, and Econometric Models on January 31 – February 1, 2002.
Your CRM Process Must Balance