Whole-Brained Marketing -- Blending Data Science with Creativity & Action

Data-Driven Marketing
aka. Whole-Brained Marketing
Microsoft Center, Cambridge MA
Presented By: Aileen Cahill
@AileenCahill
#WholeBrainMktg
September 30, 2014

The New England Consulting Group 2
Marketing
Art Science
Vs.

Marketing Transformation
Then Now
OBJECTIVE PRODUCT SALES CULTIVATING CUSTOMERS
BUSINESS MODEL Have Product  Find Customer Have Customer  Fulfill Needs, Engagement
METRIC Dollar Sales, Transactions Customer Lifetime Value and Customer Equity
COMMUNICATION Unidirectional Mass Media Two-way Personalized Dialog
TITLES  Chief Marketing Officer
 Product Manager
 Chief Customer Officer
 Key Account Managers: ‘T’ Capabilities and
Portfolio Responsibilities
OFFERING Standard Tailored and Customized
R&D Functional Silo Customers as Collaborative Developers
SALES Setting Appointments, Qualifying
Leads, and Educating Prospects
Closing Deals with Self-Qualified,
Pre-Educated Prospects
MARKETING Outbound Inbound, Go-To-Market,
Communication Essentials
CUSTOMERS What Have You Done For Me
Lately?
Loyal Partners, Evangelists, Erecting Their Own
Barriers to Exit

AGILE Marketing Will be THE Hallmark of Winners!
1. Collect
&
Integrate
2.
Analyze &
Discover
3. Act &
Optimize
4. Execute
& Deliver
SPEED
PROCESS
METRICS
DATA to Understand
Customers/Consumers
• Manage Data
• Rich Content
• Contextual Relevance
• Strategic Intent
• Omnichannel Touchpoints
• Orchestrated Customer Experience
• Continuous Improvement
• Refine
• Benchmarking
• MEASUREMENT
Critical Success Factors
• Rapid Cycle Learning
• CMO & CIO Partnership

Marketing (R)Evolution
Events
Direct Fax
Direct Mail
Telephone
<1990 1990s
1999 2000s 2013
TV
Radio
Print
Display
IM
Email
Events
Direct Fax
Direct Mail
Telephone
TV
Radio
Print
Display
Cable TV
Website
Search
Online Display
IM
Email
Events
Direct Fax
Direct Mail
Telephone
TV
Radio
Print
Display
Website
Search
Online Display
Paid Search
Landing Pages
Microsites
Online Video
Webinars
Affiliate Marketing
Mobile Email
SMS
IM
Email
Events
Direct Fax
Direct Mail
Telephone
TV
Radio
Print
Display
Website
Search
Online Display
Paid Search
Landing Pages
Microsites
Online Video
Affiliate Marketing
Webinars
Blogs
RSS
Podcasts
Contextual
Wikis
Social Networks
Mobile Web
SnapChat/Poke
Apps/Push Notifications
Group Texting
Social DM
Voice Marketing
Mobile Email
SMS + MMS
IM
Events
Email
Direct Fax
Direct Mail
Telephone
TV
Radio
Print
Display
Website
Search
Online Display
Paid Search
Landing Pages
Microsites
Online Video
Affiliate Marketing
Webinars
Blogs/ RSS
Podcasts
Contextual
Wikis
Social Networks
Mobile Web
Behavioral
Social Media & Ads
Virtual Worlds
Widgets
Twitter
Mobile Apps
Geolocation
Pinterest 5

Data is an Asset! Mine It For Competitive Advantage
Data-Driven Marketing Uses Information To Drive a
Meaningful & Mutually Beneficial Dialog  Relationship
Systematic Use of Information
• Customer Data Warehouse
• Data analysis and gathering
• Predictive modeling
To Attract and Keep Customers
• Cost-efficient acquisition
• Retention focused on profitable and
at-risk customers
• Across channels
Through On-Going Dialogue
• Real-time response
• Listening to customer
• Personalized, customized offers
and messages
For Long-Lasting Mutually
Beneficial Relationships
• Customer-based measurements
• Continuous customer evaluation

The audience is not
brought to you or given to
you; it's something that
you fight for. You can
forget that, especially if
you've had some success.
Getting an audience is
HARD. Sustaining an
audience is HARD. It
demands a consistency of
thought, of purpose, and
of action over a long
period of time.
-- Bruce Springsteen

Today, Audiences are EARNED!
Build your Audiences and They’ll Become
your Customers
Nurture & Engage Them with
Relevant, Value-Added Content & Tools
You’ll Create Loyalty, Increase LifeTime Value
Marketing MUST Move Beyond Selling & Transactions!

Companies That Use Data, Metrics &/or Marketing Processes Are:
Why Should You Care?
 + 5% More Productive (McKinsey, Aug. 20014)
 + 6% More Profitable (McKinsey, Aug. 20014)
 Integrated Analytics Can Free Up 15% - 20% Marketing $$ Budget
Annually (McKinsey, June 20014)
 2X More Likely To Be High Performing (Lenskold Group, 2009)

50% of Marketing Reports Missing Key Data
40% Missing ROI of Marketing The New England Consulting Group 10

Why Are Companies Focusing On Data-Driven Marketing?
 Customers Expect It!
“you should know I just applied for a loan on your website”
 Enabling Technology is Here & Cost Effective
 Proliferation of Channels & Customer Segments
“OmniChannel” Marketing
 Products are Becoming Commoditized
 High Cost of Customer Churn
 Upside Potential
Cross Sell, Retention, & Upsell
AND, MOST IMPORTANTLY…

Rebalance Their Customer Relationships!
• Meet Higher Customer Expectations
– speed, service, convenience and
Customer Business
• Build Customer Loyalty
• Deliver Customer Value Across
Touchpoints
• Leverage Technology For More
Personalized and Relevant
Communications
value
• Customers & Consumers Have Easy
Access to Information
• Effective Use of Every Contact with
a Customer

Company Benefits
 Understanding of Cause and Effect Across All TOUCHPOINTS
• Right Offer to the Right Customer at the Right Time Through the Right Channel”
 Consistent Messaging, Branding and Positioning
• Provides a Customer-Centric Point-of-View within a Product-Centric Business
 Significant Improvement in Cost Efficiencies
 Creates Platform for On-Going Customer DIALOGUE
 Ability to Estimate “Return on Marketing Investment” (ROMI)
 Manages Customer Value – Lifetime Value (LTV)

Customer Benefits
 Objective Partner That Really Understands my Needs
Listens to Me
Has MY Best Interests at Heart
Understands MY Needs
 Increased/Improved Responsiveness
Treats Me as an Individual - Not a Number
Uses MY Information to Add Value
 “LEARNING RELATIONSHIP” a Dialog that Picks Up Where it Left Off
 Ease of Doing Business – Lower Cost & Less Friction
 Selectively Communicates with Me About Solutions Which are Relevant to
Me

Data Enables “WHOLE BRAIN” Marketing

Data Is Readily Available
Data Has Literally Been at our Fingertips Since 1980’s
Impulse Fill In Routine
Confession, I’m a GEEK!
Frequency
Total Basket Dollar Value
Stock Up
Examples of What We Did With Data at Pepsi
1) Shopping Basket Analysis
Discovered FOUR Distinct Shopping Occasions in Supermarkets

Diet Pepsi vs. Diet Coke
DATA ANALYTICS
More Profitable
• Drink More
• More Loyal
• More Male
Marketing Research Showed Diet Pepsi Taste Was Preferred BLIND
2. Switching Campaign
• Cobbled Together “Joseph’s Technicolor Raincoat” of Data Sources
• Built Diet Coke Household Predictive Model
• Delivered a CASE of Diet Pepsi To 1MM Diet Coke Households OVERNIGHT
• Followed Up with Outbound Ray Charles Phone Call (1st to Use IVR)
+8% Switching = $30MM per year

It’s What You Do With The Data & Math That Matters!
3. Conjoint Analysis
4. LOGIT Model
5. Customer Satisfaction  Reengineer Company
• Fortune Magazine July 1992 “Right Side Up Company”
• Marketing Science Institute Award

Yet TODAY Many Smart Marketers Still Aren’t Leveraging
Data in Their Campaigns
• Who Here is Doing a Good or Great Job Leveraging Data in Their
Marketing?
• Who Here Is Having Trouble?

Challenges We’ve Heard
The Data is in Silos and IT Holds the Keys
That’s for Big Sophisticated Companies
We Simply Don’t Have the Budget or People
We’ve Been Doing Marketing This Way For Years, So Why Start Now
What’s the ROI that Justifies the Effort
Seems Like An Overwhelming/Herculean Task
Unclear on Where or How to Get Started

71%
Plan BIG Data
Investment Within
Next 2 Years
You’re Not Alone!
<10%
18%
Unified View
Of Customer
Systematic Use
Of Data
Teradata Corporation: “2013 Teradata Data-Driven Marketing Survey, Global"

Hallmarks of Effective Data-Driven Marketing
1. A Complete, Real-Time Understanding of the Customer
2. Two-Way Mutually Beneficial Dialogues with Customers
3. Sharing Customer Information Across the Organization
4. Coordination of Messages Across ALL Points of Contact
5. Aligned Incentives Based on Customer Value
6. Organization Structured Around Customers
7. Anticipate Customer Needs and Proactively Respond to Them

How To Get Started
1. Data Repository
2. Customer Segmentation
3. Program/Campaign Management
4. Metrics

First You Need to Have a Customer Information Strategy
Different Types of Customer Information
Descriptive Behavioral Contextual
Easily Available Relevant to Customer
Weaknesses Data Overload, Sys.
Integration Complexity
Difficult to Gather and
Structure Into System
Low Differentiation,
Data Privacy
Examples
Purchases, Usage;
Communication,
Lifestyle
Satisfaction, Events
Competitor Actions,
Online Behavior
Contact, Size, Socio-
Economic, SIC,
Demographics
Sources
Internal Systems,
Loyalty Schemes,
External Data Sources
Social Media,
Cookies,
Market Research
Operational
Systems, External
Data Sources
Strengths Personalizes to
organization
Key to
Success
Accuracy Completeness Creativity
Purpose
Understand
Customer’s
Behavior
Understand Motivations
& Attitudes
Understand Customer
Increasing
Difficulty & Value

Data Collection That Focuses on Creating “Consensual
Customers”
High Value
Customer Service Rep
Customer Dialog Management
“Drip Irrigation”
Customer Provides Information About Needs, Preferences
Tailor Your Product/Service
Increased Customer Loyalty, Retention AND Profits
Data Mart
Two way
communication
Barrier to EXIT

Append!

2. Customer Segmentation
Validate, Mine & Refine
 First Segment Customers by Needs
 Then Differentiate Them by Value
 Profile Your Best Customers
 Build “Look-Alike” Models To Find More Customers Just
Like Them
 Create Best Customer Personas & Use Scenarios
 Design an Omnichannel Customer Journey Map

3. Campaign Management
Engagement! Content! Contextual!
Focus On What’s Relevant To The Customer
 What Need Does Your Product or Service Meet
 What Problem Does It Solve
 How Does It Make Their Life Easier
Omnichannel Integration Is Essential
Enable Sharing & Social Evangelism

4. Metrics
EVERYTHING That’s Happening with Digital Analytics Applies Offline
Too!
 Although More Creativity in Math & Collection Processes Are Required
Individual Customer Metrics NOT Aggregate
Anchor Analytics to Business Strategy
 First Develop Hypothesis
 What Are the Metrics That Will Prove or Disprove
 What Are ALL the Points in Process and Touches to Collect This Data
Marketing Return on Investment Is a MUST
 It’s What the Board Room & VC’s Expect
 Essential for Winning Resources Back from CFO

Let’s All Be Leonardo!

Or Einstein!

Case Studies

• Very Crowded Market and Small Share of Voice
• Product Advantage in Treating Migraines
• Identified High Value Households
• Created a Customer Database
• Established Headache Remedy Center (HRC); Community
Website, Newsletter, Research Studies
• Early Positive Result
Situation
Actions
Results
Bristol-Myers Squibb – Excedrin
Awareness
Equity
Share
Retention
Line Extension

• Declining Share & Increasing Competition
• Brand Has Advanced Therapeutic Effects – FDA Regulated
• Consumers Dearth of Oral Care Info & Insights
• Tagged ALL Media
• Identified high value households
• Created a customer database
• Content-Rich Oral Care Newsletter (Objective content with subtle sub-branding
and an occasional incentive)
• Created a dynamic web site with access to dental professionals
•Increased Retention Rates and share of customer
• Launch Toothbrush Line Extension
• Identified Cross Category Opportunities with Dove Soap
Situation
Actions
Results
Unilever – Mentadent Toothpaste

•Only 18k Customers but Few Insights
•Mass Marketing by Tractor Trailer Load
• Cobbled Together Exiting Research & Customer
• Data Appended Third Party Data
• First Ever Customer Segmentation
• Secured funding for customer data mart based on biz value
• Spiffed Sales for Inputting Critical Information for “Top Dogs”
• Aligned objectives across business units driven by needs-based
customer segmentation
• Increased sales force efficiency by 22%+
Situation
Actions
Results
Veterinary Healthcare Company

Luxury Furniture aka. Functional Art
Situation
Actions
Results
•Only 4 Years of Transactional Data
•Going to Market as Cataloger
• Analysis Proving Showroom Driven NOT Catalog
• Top Quartile Customers 3rd Party Data Appended with Third
Party (all Axciom)
• Identified 44 Predictive Variables
• First Ever Customer Segmentation Using CHAID 44
• Defined Showroom Based Trading Zones
• Introductory Direct Mail
• Store Events
• Acquired New Customers
• Opened New Showrooms & Closed Others

Merkle
www.Merkleinc.com

One of the World’s Largest PBM’s
(Pharmaceutical Benefits Managers)
The Situation
 Our healthcare client was experiencing diminishing response rates.
 Acquisition costs were rapidly spiraling upward.
 Marketing plan was utilizing heavy outbound solicitation.
 Mostly direct mail to “never-a-customer” base.
 Plus outbound calls and emails to “past” customers/members.
 Heavy use of focus groups and concept tests.
 The target market was not homogenous, but highly segmented.
 Segmentation was neither demographic nor psychographic, but physiographic.
 Healthcare plan attitudes and intentions were closely aligned with disease states and diagnoses.
 Prescription patterns were the principal marker driving “urgency”.
New England Recommendations
 Harness prescription data (to which the plan had access) to time outreach.
 Segment prospects by prescription patterns as a surrogate to diagnosis.
 Tailor prospect messaging to market segments which were highly motivated.
 Use evolutionary algorithms to accurately predict responses/behavior in response to over 100 million offers (seriously).
 Beta test specifically tailored messaging to key market segments:
• Recent “Initial Diagnosis”
• Second Disease “Add a Prescription”
• Exhausted “Disease Sufferers” (older and in poorer health)
Results
 One New England recommendation outperformed a half-dozen submissions from multiple agencies.
 National rollout outperformed test at over 5X normal levels and 25X normal ROI.
 “The insights and messaging optimization brought our segmentation to life and generated unheard of patient response rates – double digits. We enrolled over 12
million patients in the first year. It was a huge breakthrough and created an enormous amount of new value.” – VP & Chief Creative Officer, PBM
Response Rates
Year
Base/Control
Agencies Recommendations
NECG Submission

New England Consulting Group
The New England Consulting Group is a marketing and sales firm that
collaborates with companies that are or wish to become the market and
thought leaders in their domain space.
Each of the partners has over 25 years experience managing businesses at
companies like Procter & Gamble, J&J, Starbucks, Unilever, Covidien, Kellogg’s,
PepsiCo, Novartis, Kraft, and Merck.
NECG’s industry focus ranges from consumer goods to high tech to financial
services to healthcare.

www.linkedin.com/in/aileencahill/
@AileenCahill
Customer-Ergonomics.com
AMC@necg.net

Whole-Brained Marketing -- Blending Data Science with Creativity & Action

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