Alterians August 2009 Webinar Engagement Impact Presented By Targetbase

© 2009. Targetbase®

Engagement Impact:Driving Relationship and Sales at the Customer Level


Defining Engagement

What is engagement?

“The emotional bond or attachment that customers

develop with your business.”“Time on site and page views.”

“If a visitor is happy when they leave, they have been engaged.”

“A state of mind, a state of the heart that shines in everything that

you do."

“An estimate of the depth of visitor interaction.”


Defining Engagement

“Well-established behaviors that demonstrate interactive multi-channel behavioral attachment and that reinforce commitment to the brand”

“Engagement is the level of involvement, interaction, intimacy and influence that an individual has with a brand over time”


Defining Engagement: An Impact-focused Approach

What are your marketing objectives? Which needle are you trying to move?

Whatever the answer, engagement should be viewed with respect to that objective.

Your objective serves as the dependent variable and every measurable activity a customer can perform acts as an independent variable.

Quantify the connection between actions and objectives. Does clicking on this content affect a visitor’s likelihood of doing what I want them to do? If so, how much?

An objective-based approach to engagement ensures you are measuring things that truly have an impact and, maybe more importantly, weighting activities according to the impact they’re having.

“ENGAGEMENT IS AS ENGAGEMENT DOES”

NERD ALERT


Customer Engagement Focus

Create and translate individual-level, data-driven insights that fuel the ideas needed for customer engagement

Create customer engagement that delivers measurable and sustainable results

Wired for engagement optimization – seamless integration of technology, analytics, and more effective creative


The Approach: Pattern of Engagement

Key Points: Consumer level…not aggregate Longitudinal…not point-in-time snapshot Actionable proxy and metric for relationship strength Quantifiable relationship between engagement and sales (online

or off) Enables optimization and ever-improving approach with respect to

marketing objectives



Steps: Establish an engagement paradigm Develop a powerful consumer-level metric Connect engagement to purchase Relationship management with Pattern of Engagement


Content

Access

Content

Activity

Content

Participatio

n

Content

Referral

Purchase

Intent

Purchase

Email Open Click Rate Refer Coupon Print Redemption

Website Visit View Comment Post/Blog Wish List Inferred

App Install Search Create Share to Social

Basket Activity

Sale


Establishing an engagement paradigm: Engagement is a continuum…some activities indicate a higher

level of engagement with the brand Activities indicating higher engagement are given greater weight



Developing a powerful consumer-level metric: These weighted activities are aggregated into a single level of

engagement metric

Example (one customer, one month):

Category

Content Access

Content Activity

Content Participation

Content Referral

Purchase Intent

Weight

0.05

0.10

0.25

0.50

0.75

Activity (count)

8

12

3

1

2

Engagement

0.40

1.20

0.75

0.50

1.50

Total: 5.35



Developing a powerful consumer-level metric: These weighted activities are aggregated into a single level of

engagement metric The level of engagement score indicates each consumer’s volume

of engagement

Each consumer’s level of engagement can be treated as a time series and trended to account for seasonal patterns in order to determine their direction of engagement

NERD ALERT



Model Specification:

log(UNITS PURCHASED) = α + β1 log(ENGAGEMENT) + β2 log(INCOME)… + ε

Connecting engagement to purchase: Note: For those without direct transactional data (e.g. CPG),

consumers on the database are matched to third-party transactional data (such as Nielsen, DunnHumby, etc.)

Now with longitudinal data on consumers’ engagement and purchases, it is possible to calculate an “engagement elasticity of demand”… in other words, the impact on purchases caused by an increase in engagement

NERD ALERT



Connecting engagement to purchase: Note: For those without direct transactional data (e.g. CPG),

consumers on the database are matched to third-party transactional data (such as Nielsen, DunnHumby, etc.)

Now with longitudinal data on consumers’ engagement and purchases, it is possible to calculate an “engagement elasticity of demand”… in other words, the impact on purchases caused by an increase in engagement

This enables the marketer to say with confidence “If I increase consumer engagement with my content by X%, I will drive increased purchase by Y%”


Relationship management with pattern of engagement: The vector of volume and direction inform how each consumer

should be treated in order to maximize relationship and purchase Test design and targeted campaigns flow from such a strategy

matrix aimed at activation, retention, increased engagement, etc.

HighUrgent

Intervention

MaintainThanks/Reward

Medium Intervention

“Up/X-sell”Thanks/Reward

Low Intervention

“Up/X-sell”Thanks/Reward

None Reactivation

Win Back

Decreasing Stable Increasin

g

Direction of Engagement

Volu

me o

f E

ngag

em

ent



Case Study: CPG client, multiple brand sites and newsletters, 20 million

members Client desired an approach to understand and optimize strength

of relationships over time and the financial impact to their business

Pattern of Engagement methodology employed

Each member’s activity was weighted, aggregated, and trended over time

Content

Access

Content

Participation

Content

Referral

Purchase

Intent

Purchase

Registration Email Click-through

Referral Email Coupon Print Redeem Coupon

Opt in Recipe View Rate Newsletter Recipe Print

Website Visit Submit Recipe Recipe Forward

Email Open Coupon View Rate Recipe

Video View Rate Video

Search Event

Blog Entry

Create Recipe Box

Level of EngagementThe Approach: Results


Case Study (continued): The relationship to sales was quantified as an engagement

elasticity of demand: on average, a 1% increase in engagement resulted in a 0.2% increase in units purchased.

Members were flagged according to volume and direction each month and treated accordingly

Content and communication driven by testing around Pattern of Engagement

In the first six months, 20% lift in engagement, driving an average 4% lift in units purchased, with a ROI over 250%

Level of EngagementThe Approach: Results


Pattern of Engagement in action: Similar success for additional CPG clients as well as retail, automotive,

utilities, travel, pharma, health care. Ideally, POE incorporates all off and online consumer touchpoints. There will be differences in application depending on client

objective: CPG – Maybe website/email interaction, but limited or inferred

transactional data. Connecting POE to ROI requires mapping to 3rd-party data and/or modeling.

eCommerce/Retail – Rich, comprehensive engagement data with a direct connection to purchase.

Lead Management/Optimization – May be consumer engagement leading to a one-time or infrequent purchase. POE serves as a predictive, targeting metric focusing marketing budgets on higher converting consumers.

Level of EngagementThe Approach: Broader Application



Key Points: Consumer level…not aggregate Longitudinal…not point-in-time snapshot Actionable proxy and metric for relationship strength Quantifiable relationship between engagement and sales (online

or off) Enables optimization and ever-improving approach with respect to

marketing objectives

More gory details available in July edition of the DMA Journal of Analytics:Quantitative assessment of purchase impact attributable to consumer patterns of engagement with online relationship marketing content



Getting started:

Steps

1. Data Capture

2. Data Storage

3. Analysis

4. Testing

5. Analysis

tag and track individual touchpoint engagement

maintain history in a customer database for longitudinal view

calculate engagement relative to your objectives

begin treating customers differently based on their pattern

learn what works

Required Capabilities

Integrated Analytics, Technology

Technology

Analytic Expertise

Integrated Analytics, Creative, and Technology

Analytic Expertise

START SMALL


Trae Clevenger

Vice President, Strategy & Innovation

[email protected]

972.506.3400

http://www.linkedin.com/in/traeclevenger

http://twitter.com/trae1

Alterians August 2009 Webinar Engagement Impact Presented By Targetbase

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