DMA14 Thought Leadership Series: "The Last Mile"
Transcript of DMA14 Thought Leadership Series: "The Last Mile"
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The Last Mile: Leveraging Decision Science
to Get Your Most Important Audiences to Act.
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We All Make Decisions…
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We All Make Decisions……in Ways We’re Not Aware of.
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Decisions We All Make,All The Time.
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Neal Boornazian
Chief Client Officer
Cramer
Anne-Marie Farrell
Head of Behavioral Economics
Research, Global SMB Marketing,
On Amir
Associate Professor of Marketing,
UC San Diego
Candace Brenner
Director, Global Brand Marketing
Sony Online Entertainment
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“The Last Mile”
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Today’s Discussion
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The power of the context
Framing vs. description Invariance
Incentive framing and mental accounting
Transaction utility to habit formation
Forms of sociality
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Framing and description invariance
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Mental accounting
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Transaction utility to habit formation
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Forms of sociality
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IRRATIONAL LAB:
the art and science of Marketing
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Behavioral economics
proposes that the real
reason people don’t adopt
our products is...
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Too much friction
No immediate benefits of doing an action
We don’t think about the benefits at
the right time
People don’t know it’s a good thing for them
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Desired User Behavior
Benefits
Barriers
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Overcoming initial fear…
…setting up for long term success
using smart incentives
Incentives
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Free coupons Spend X Get Y
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Free coupons Spend X Get Y
• Skin in the game
• Product engagement
• Free vs own investment
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Qtr A - Y1 Qtr B - Y1 Qtr A - Y2 Qtr B - Y2
Increase in Average Revenue per Account
Free coupons
Spend x Get y
Decrease in Activations
Free coupons Spend x Get y
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Desired User Behavior
Benefits
Barriers
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Cell 1:$20 AdWords credit
Cell 2:$50 AdWords credit
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Cell 3:$20 Play credit
Cell 4:2 Movies
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• No incentive
• $20 AdWords credit
• $50 AdWords credit
• $20 Play credit
• 2 Movies
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0%
10%
20%
30%
40%
50%
60%
$20 Play $50 AdWords 2 Movies $20 AdWords
Results from Intuition Study
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$20 Play $50 AdWords 2 Movies $20 AdWords No Incentive
3x control
4x control
4x adoption rate for $20 Play vs no incentive (control)
2.5x control2x control
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• Pick the right user behavior
• Use incentives to help users engage with product
• Think about different reward types
• Hedonic rewards - for our pleasure (e.g. movies)
• Utilitarian rewards - more functional (e.g. AdWords
credit)
• Smaller amount of a hedonic rewards out
performed larger amount of the utilitarian rewards
• Test – our intuitions are not always right
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Sony Online Entertainment
Candace Brenner
Director, Global Brand Marketing
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Company Overview
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Managing the Player Lifecycle
Overview: Institute a “nudge” program in-game to present uniquely tailored offers in response to players’ likelihood to:
» Extend membership (prevent lapsing)» Convert to 1st time payer» Repeat purchase conversion
How:Score and predict future behavior of players to intervene at appropriate touch points to change and/or pivot customer behavior.
The “Nudge System”
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Sample Nudges
New Membership Return Membership Consumables
ADDITIONAL RESULTS:
• Better understand different player segments (1st Time, Regular, Repeat, Dedicated).
• Proactive retention is easier than winning them back!
• Increase overall product satisfaction.
Increased monthly incremental revenue by 5-8%
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Make it EASY
Overview: Serve a timely message based on what THAT customer is experiencing at THAT moment
CHANGE consumer behavior – Habit Formation
How:Identify key moments in time that customers experience, specific to that moment, and offer them convenience with a lower barrier to entry (lower price points, more frequently).
“Point of Need”
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Example: Heroic Characters
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Examples: Upgrade and Revive
Spell Upgrades
Revive
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Monthly Average Revenue Per User for Point of Need Customers
Mo
nth
ly A
RP
U
Before PoN Use After PoN Use
Daily purchase rate increased from 8% to 13%
# of purchases increased from 3 to 4 for active purchasers
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Custom Communications
Most Loyal Cohort
Unprompted, No-Strings-Attached Reward for Loyalty and Ongoing Engagement
Personalized Communication
Valuable Gift
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Email Performance
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Open Rates
Top Performers
SOE Benchmark
IndustryBenchmark
Top
Performers
also have
50% CTR’s!
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The Last Mile: Leveraging Decision Science
to Get Your Most Important Audiences to Act.