marketing to a segment of one - fico exacttarget webinar

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation's express consent.

© 2010 Fair Isaac Corporation. 1

A Segment of OneHow Retailers Can Change The Game This Holiday Season

© 2010 Fair Isaac Corporation. 2 © 2010 Fair Isaac Corporation.2

About the Presenters

Joel BookPrincipal,Marketing Research & Education GroupExactTarget, Inc.

John KoltonowskiDirectorMarketing Solutions Retail/CPG PracticeFICO

• 30 years of experience in database marketing. Helped more than 100 BtoB and BtoC use data and technology to communicate and sell more effectively

• Specializes in strategies and tactics to attract and retain customers using email, mobile and social media

• Voted one of the “50 Most Influential People in Sales Lead Management” in 2009

http://blog.exacttarget.com/blog/joel-book

linkedin.com/in/joelbook

Twitter.com/joelbook

• Responsible for consulting with FICO clients to apply FICO Decision Management technologies in the marketing lifecycle.

• 20 years of business and consulting experience, helping organizations build and strengthen customer relationships.

• Helps to design and equip organizations with innovative solutions, leveraging automation and decision technologies to improve performance and achieve growth.

linkedin.com/in/johnkoltonowski

Twitter.com/FICOretail

© 2010 Fair Isaac Corporation. 3 © 2010 Fair Isaac Corporation.3

“Getting the right message to the right customer at the right time is now possible with interactive marketing and especially with mobile (as it’s sent to an individual vs. a household).Retailers need to break down silos between channels—focus on customer driven marketing.”

Source: Gartner


Today’s Webinar

In this Webinar, you will learn:

» Why smart retailers are using predictive analytics technology to deliver pertinent and timely offers to individual customers

» How you can use FICO® Retail Action Manager (RAM) to optimize decisions to ensure the right customer gets the right message at the right time

» What you can do to optimize retail sales opportunities during the upcoming 2010 Holiday season


U.S. Retail Sales

» Forrester Research predicts U.S. Online Retail Sales for 2010 will reach $173 Billion, and Web-influenced retail sales will total $1.21 Trillion


Retailing in 2010 – Key Trends

» Ability to execute consistent promotions across channels is a key competitive differentiator for top retailers.

» Adoption of mobile is ramping up quickly. By 2014, smartphones will comprise 37% of global handset sales.

» Shift from “Segment” Targeting to “Individualized” Targeting

» Increasing customer expectation and demand for offers that address their needs and interests

» Adoption of advanced “sense and respond” technology that predicts (with accuracy) offers that are relevant and timely to individual customers


How is a “Segment of One” Different?

From One to Many . . . to One to One

Batch & Blast Customer-Triggered

Supplier Funding Supplier Targeting

Campaign Calendar Customer Lifecycle

Contacts Dialogue

Business & Channel Silos Integrated & Informed

Segment Marketing Individualized Marketing


Traditional Segmentation Approach

Select customers most likelyto want product X

This week, promote product X

Send offer to entire subpopulation

Not interestedthis

week

Interestedthis

week


Segment of One Approach

Select customers most likelyto want product X NOW!

This week, promote product X

Send offer to targeted individuals

Interestedthis

week


Getting to a Segment of One

What Marketers Must Do:

» Develop and apply more insight about customers

» Track behaviors and link to performance

» Understand needs and attitudes

» Record and use individual preferences

» Create messaging consistent to the individual, not the offer

» Predetermine the best offer for immediate delivery

» Optimize marketing for ROI, practical constraints


Leveraging Customer InsightTo Drive Engagement And Loyalty

Capture & validate

Identify at all channels

Track behaviors

Understand needs & attitudes

Know Customers

Segment & value

Interact via preferred channel

Triggered marketing & cross-sell

Targeted messages, services & solutions

RelevanceEngagementPreferenceLoyalty

Sophistication of Retail Personalization

Act on Knowledge


Relevance is Vital to Success

» Delivering relevant and timely offers can increase response rates by more than 30% (Source: Fair Isaac Corporation)


Automating Relevance

Introducing Retail Action Manager (RAM)

Delivering relevant and timely offers to individual customers just got a lot easier

With RAM, you can:

• Discover WHAT individual customers are most likely to buy . . . and WHEN

• Predict the likelihood of purchases, over time

• Deliver relevant and timely offers using email, e-commerce, mobile and POS channels

• Learn which campaigns worked best and apply this knowledge to future campaigns


How Retail Action Manager WorksPersonalization in Action

2Apply Business

Rules

3Apply

Analytics

5Create Custom

Treatments

1Collect

Consumer Information

Tara

Transaction Data Demographic Info Response Data

Lauren

Transaction Data Demographic Info

Jake

Transaction Data Demographic Info Online Behavior Survey Data

Jake

Lauren

4Apply

Optimization

• Contact Strategy • Purchase Frequency

and Recency Exclusions

• Offer Parameters• Customer

Preferences

Retail Action Manager

• Creates eligibility matrix of all target customers and all target Items

• Modeling• Time Sensitive

Predictive Analytics• Scoring

• Creates a matrix of scores for all customer / item combinations

• Eligibility• Scores• Constraints

• Creates customer specific offers

POS Coupon Offer

personalized offers by email

Tara


Integrated Technology

Landing Pages, Registration Pages

“Thank You” Pages, Webcasts / Podcasts

E-Commerce Website

Total Integration of Data

• Offers executed by integrating of customer data, analytics, RAM, email, and e-commerce

• Ability to measure campaign effectiveness

• Ability to execute 1:1

offers Email Communications

Tracking and Analytics

Marketing Database

Predictive Offers

Retail Action Manager

Illustrative


Large Electronics Retailer Description (Confidential)

Retailer

Multi-channelcommunications

Objective: Increase relevance and consistency of marketing communications across multiple channels

Approach: Use intelligent, dynamic product recommendations in communications

Massive data analysis frommultiple enterprise sources

RAM centralizes marketingcommunications under a single decision platform


Large Electronics Retailer Results (Confidential)

Retailer

Multi-channelcommunications

Success: Significant incremental revenue in first 90 days of platform operation

Solution delivered in less than 120 days

Delivering millions of demand generated

messages per monthto consumers

Multi-channel communications arerelevant, timely, and

consistent


Q&A

1. I’d like to implement this approach before Holiday 2010, how long is a typical implementation?

2. How do different segmentation approaches impact the execution of one-to-one?

3. Will the segmentation differ based on the channel (email, Mail, Mobile, Social etc)?

4. What are some of the challenges and best practices to get this type of segmentation adopted and implemented within large organizations?


FICO® Retail Action Manager (RAM)Workflow Overview

RAM integrates with your systems» POS coupons, SMS text messages, email offers, dynamic website

content, personalized mailers

RAM creates business rules» Strategy-based offers, Trigger-based offers

RAM adds data feeds and interprets the data» Customer segments, Customer scores, Offer strategies

You set constraints» Products, Offers, Campaigns, Goals

You collect consumer data» Demographics, Transactions, Online behavior, Preferences,

Psychographics

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation's express consent.


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