The future of direct marketing Thursday 2 February 2012, LBi London
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Event partner
Introduction from chair
Chris Combemale,Chief Executive Director, DMA
Thank youGold sponsor
Silver sponsor
Event partner
Interact!•Twitter: #dmalbi @DMA_UK @LBiLondon•LinkedIn & Facebook groups•www.dma.org.uk
The future of direct marketing The Importance of Lifetime ValueChris Combemale, Executive Director, DMA
The value of a customerWhere do you start?
Not all customers are equal
Rank these profiles for Value of the subscriber
•
Entered competition to win a holiday on-line 3 years ago –
not clicked since
•
One-time customer, last bought 2 years ago•
Active customer, buys every 4 months•
Active customer, buys once a year but top 10% for order value
Transactional Data
Frequency
Recency
Value
“Lifetime”
alters value
•
How long to customers stay active for?
•
What revenue will they generate per year?
•
Work this out for the whole database
•
Then for customer segments
•
That gives a lifetime value (LTV)
•
What about different acquisition source?
Different Metrics, Different Conclusions
•
Click-through rate
•
New or repeat visitors
•
Bounce Rate
•
Engagement
•
Micro-conversion
•
Conversion to Sale
“All of the above is focusing on short term success.
Even measuring “Visitor Conversion Rates”
is akin to declaring success after a
one night
stand.
Visit based conversion rates promote bad marketing behaviour.”
www.kaushik.net
How about adding these?
•
First month sales
•
6 months sales
•
3 years sales
A Hypothetical Example
Best
Average Customers
Customers
Purchases per year
4
2Average Order Value
£70
£50Annual Revenue
£280
£100Gross Profit Margin
10%
10%Gross Profit
£28
£10Acquisition Cost
£8
£4Net Profit
£20
£6
A Hypothetical Example Part 2
Best Average
Customers
Customers
Life Expectancy
3 years
2 yearsRevenue Year 1
£280
£100Revenue Year 2
£220
£60Revenue Year 3
£180
£0Lifetime Revenue
£680
£160Gross Profit Margin
10%
10%Lifetime Gross Profit
£68
£16Acquisition Costs
£8
£4Lifetime Net Profit
£60
£12
»
Rethinking the traditional marketing model: from campaigns to conversationsJames Young, Digital Marketing Manager, Global Marketing,Sony EricssonPipa Unsworth, Global head of CRM, LBi Group
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Rethinking the traditional marketing model: from campaigns to conversations
James Young -
Digital Marketing Manager, Global Marketing, Sony EricssonPipa Unsworth - Global Head of CRM, LBi Group
SONY ERICSSON BRIEF
•
Video content to build brand awareness and drive engagement
•
Opting out of feature battle
•
Objectives for Xperia to engage and create lasting relationships with influential early adopters
LBI'S RESPONSE: XPERIA STUDIO
•
Xperia Studio was born –
“Reality Remade”
•
Create content with phone at the heart
•
Wide open brief to collaborators
LBI’S RESPONSE
•
Wide variety of content collaborators;–
Riding in the Moab with 360 cameras–
BMX tricks–
Invisible Universe application–
Hack-a-thon at an interactive art studio located on a barge
–
Surf photography
•
Launched in September 2011 –
XperiaStudio.com–
Xperia Studio Facebook tab–
Twitter–
YouTube– ePR
TED VIDEO
XPERIA STUDIO RESULTS
DRIVING SOCIAL CURRENCY FOR XPERIA STUDIO
STRENGTHEN MY BOND
STRENGTHEN MY BOND
DEFINE OUR COLLECTIVE
IDENTITY
DEFINE OUR COLLECTIVE
IDENTITY
GIVE ME STATUS
GIVE ME STATUS
CREATING SOCIAL CURRENCY FOR XPERIA STUDIO CONTENT USING COMUFY
•
Social CRM platform Comufy is used to drive social currency for Xperia Studio
•
Xperia Studio Facebook users can sign up to be first to know about new Xperia Studio content
•
Users receive personalised newsfeed posts about new exclusive content, which can be easily Shared, Commented or ‘Liked’
for viral spread
XPERIA STUDIO CONTENT GENERATES CONVERSATION
XPERIA STUDIO RESULTS –
COMUFY REACH
Potential reach 2.6m
Total friends of fans
Xperia Studio Fans10K registered
Friends of fans 245k reachedfriends reached through shares
XPERIA STUDIO RESULTS –
EMAIL VS. SOCIAL DIRECT MESSAGING
Social Direct average click through: 20% Email average click through: 5.9%*
*Epsilon 2011 Email Trends and Benchmark
XPERIA STUDIO IN 2012
•
Xperia Studio will continue to be a key part of Sony Ericsson’s social strategy in 2012
•
New collaborator content on Xperia Studio is coming
•
Social direct messaging will continue to be used to drive social currency
•
Sign up here http://www.facebook.com/sonyericsson
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About LBi CRM
Pipa UnsworthGlobal Head of [email protected]@Peepa
Mobile direct marketing: the challenge and opportunities
Ilicco Elia, Head of Mobile, LBi Group
Using “big data”
to make the big decisions
Allison Wightman, Head of eBusiness, Virgin Atlantic
The Future of Direct Marketing Using ‘BIG’ data to drive loyalty
Allison WightmanHead of eBusinessVirgin Atlantic Airways
How Virgin Atlantic uses its wealth of demographic, behavioural and attitudinal data to engage customers, defend its market position and remain relevant in tough economic times
Understating the obvious...
―
It is not the best time to be in the airline business―
Economic decline―
Political uncertainty―
Physical traumas
―
The only constant is change
Need for innovative ideas to capture the travellers imagination
Flying Club overview―
2.7 million members―
Global programme―
US, UK, ROW―
Extensive earning opportunities―
Last year, 23 triggers―
new ‘Welcome programme’
based on the insights from previous activity
―
Email postal and SMS―
Working to totally integrate our relationship with customers where ever they touch us
―
Online, social, retail, airport, kiosk
Whatever the technology, the same rules apply...Right message to the right customers through the right channel at the right time
Driving Effectiveness through Data and Insight
Business As Usual―
The trigger programme―
Automated customer communication programme
―
Enables us―
to exceed our annual revenue targets
―
improve performance year on year
―
Continues to evolve whilst retaining relevance to customers within their Virgin Atlantic lifetime journey.
Never standing still...
―
The newest trigger...―
SMS alert 2.5 hours before the flight
―
Encouraging foreign currency exchange at the airport
―
Significant conversion of 5% ―
demonstrates the use of timely communication within the programme.
―
This augments the existing Forex email trigger campaign
Planning and Strategy
―
Flying Club Segmentation―
7 groups, 29 types―
recency, frequency and value―
demographic, economic, social―
wider travelling behaviours―
Monitor the health of the database
―
Early warning of negative behaviours
―
Common currency
Recency
24 – 36 Months 6 - 24 Months 0 - 6 Months/ Future
No
. of
Flig
hts
5 +
Ex Execs
Seasonal Flyers Flying High
3 - 4
Occasional Flyers Fledgling Flyers
1 - 2 Almost Grounded
0 Currently Grounded
Tactical Activity―
Flight Curve analysis can optimise sale fare relevance and effectiveness
39
200
300
400
500
600
700
800
900
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMed
ian No. of Sector B
ookings/Dep
artures
Flight Curves ‐ London Heathrow to Boston (All Cabins)
Sector Bookings Sector Departures
45%
38%
18%
1 Jul 8 Sep
9 Aug 8 Nov
9 Oct
Sale fare?
So what’s next?
―
The future of Direct Marketing at Virgin is bright―
But it will look different to what it is today―
More channels―
More choice―
More integration―
More interaction―
More personal
Big Data will always support the Big decisions of this small but Big brand
Refreshment Break
Social direct messaging Philipp Mohr, Chief Executive Officer, Comufy
Enterprise Social Media Management System
® Comufy is a registered trademark of Astrapia Ltd.
Social Media Management System
Data drivencommunicatio
n
The Comufy Social SuiteKey benefits
One-to-one communicatio
n
Proven ROI High click
rate
Full insight into users’behaviour
Some of our Enterprise clients
Some of our partners
`
Overview
Confidential
• Evolution of Social Media
• Opportunities
• Build communities and be relevant
• Outlook
`
Why social media?
Confidential
• 50% logon very day
• Average 700 minutes / month
• 140 friends
Infographic via Bamboo
`
Maturity
Confidential
Young channel that is starting to mature, just like email did
The Evolution of a Fan Page
Facebook Fan Page Evolution
Facebook Fan Page Evolution
Facebook Fan Page Evolution
Broadcast Social Messaging
`
Current State
Confidential
Is this it?
Social Media Opportunities
• 1:1 communication• Engagement• Relevancy• Personalisation• Dynamic content•
Targeted, direct
messaging
• Clear value exchange•
Build strong
communities• Offer rewards
A lot of data and a big user base
Compelling offering + Be relevant
Clear Value Exchange
Be Relevant
Be Relevant
Confidential
User signup
Store data
Example Results
Confidential
• 35% click rates
• Very high share rates:• Campaign to 10,000 users• Directly shared by 3,228 users• 945,291 total clicks through viral spread
• Key are tempting messages and good content
`
Social Flow
Confidential
Customer service is the new marketingWarren Buckley, Managing Director Customer Services, BT
The empowered consumer requires a new means of engagementEd Van Siclen, SVP Business Development and Global Alliances, Lithium
The Age of the Empowered Consumer
Ed Van SiclenSVP, BD & Global Alliances@edvansiclen
Time Magazine’s Man of the Year
welcome to the social revolution:
around the globe, people are seizing power
confidential
civil disobedience:
the social web has organized and amplified our global voice
the power of the connected world:
collectively, we are doing great & inspiring things at unprecedented scale
applied game theory:
gamers model protein structure which had eluded scientists for decades
confidential
the good, the bad and the ugly:
the dawn of the mobile, social and incredibly empowered consumer:
confidential
beware of the thunder lizard!
business models are being radically transformed
Source: Forrester US Interactive Marketing Forecast , 2011
Social Media Spend Reach $2.1Bn in US
of CEOs surveyed reported that their top priority for the next five years was ‘getting closer to their
customers’
50%build awareness
and demand for
our productscustomer focus is the major driver behind social
social media as % of marketing budget
$2.1 Bspent in 2011
57% be more relevant to our customers
54% build better customer relationships
CMO Council, 2011
Social media helps us to:
Customers want an authentic conversation and engagement
with buyers ‘like them’
but customers want to interact with each other, not just you
14%of consumers trust advertisements
90%of consumers trust peer recommendations
superior design features who do I engage and how? how do I manage and
scale? how do I measure the
impact?
of marketers surveyed had no
proven ROI of social initiatives
41%
social brings new complexities
we help our clients with a roadmap to get there
LISTENto understand
DIRECTthe
conversation
PROVEthe business value
REALIZEyour brand
nation
ENGAGE
on existing networks
understand the social customer
tap into existing
social networks
create an owned hub harness the power to
drive business
impact
transform the overall
customer
experience
drive revenue
reduce service costs
accelerate innovation
engagecustomers
reputation enginesocial appstouch points
communitie
s
mobile
forums blogs ideas contests q&a
ratings surveys video tkb groups
manage social programs
management toolscustomer intelligence center
integrate rest api developer nation
social media monitoring
behavioral
analytics
studioapi creatormoderation manager
lithium has a full enterprise-class suite platform manages the social customer experience and the needs of the busines
confidential
what makes lithium different?
scientific methodolog
y (consumer web dna/research)
gaming dynamics
(reputation)
true saas
(data)
confidential
superfans are the key to success
85%and
of all useful content
superfans consist of
<1%of community
populations
on average superfans generate
50%of all community content
confidential
confidential
imagine a set of experiences that are infused with the participation of your social customers
SOCIAL CUSTOMER
EXPERIENCE
imagine this across all digital touch points
community .com mobile digital @storesocial web
confidential
we are lithium
delivering social customer experiences for the world’s most iconic brands
founded in 2001
bay area hq, new york, london, zurich, paris
300 customers 30+M registered users
named market leader by forrester, gartner
100% cloud platform
top tier VC funding, including Benchmark & NEA
confidential
confidential
Win the new Kindle
with built-in WiFi!!
Visit www.lithium-sce.com
and complete the short
survey*
*Every participant will receive an electronic copy version of “The Science of Social”
featuring the work of Dr Michael Wu. This book provides readers with a new perspective of understanding their customers, their customers expectations, behavior, and potential.
Panel Debate: Is the future of all marketing direct?
•
James Young, Digital Marketing Manager, Global Marketing, Sony Ericsson
•
Pipa
Unsworth, Global Head of CRM, LBi
Group
•
Ilicco
Elia, Head of Mobile, LBi
Group
•
Allison Wightman, Head of eBusiness, Virgin Atlantic
•
Philipp Mohr, Chief Executive Officer, Comufy
•
Warren Buckley, Managing Director Customer Services, BT
•
Ed Van Siclen, SVP Business Development and Global Alliances, Lithium
Closing remarks from chairChris Combemale, Chief Executive Director, DMA
Drinks and networking