Four Transitions: Profiting From A Consumer Controlled Marketplace

1. Four Transitions:Profiting From A Consumer Controlled Marketplace

2. The Evolution of Consumer Control • Internet/Wireless Platform

3. Proactive Marketing Engagement Consumer Initiatives Word of Mouth Transformation Television Magazines Newspaper Radio Direct Mail Telemarketing In-store Web Site Email Mobile Purchase Request Information Donate Vote Etc… Face to Face Retail Visit Call to Center Web Visit Email Mobile Telephone Social Network SMS MMS Blog Search Marketing 2008

4. The Evolution of Consumer Control • Internet/Wireless Platform • Product Proliferation

5. Cooking.com Butter Dishes 1 of 2 pages Macys.com Women’s Dresses 1 of 27 pages

6. The Evolution of Consumer Control • Internet/Wireless Platform • Product Proliferation • Channel Explosion

7. Channel Explosion • First printed ad – 1477 • Postal Act/Postal Delivery – 1792 • Sears Catalog - 1888 • Television invented – 1928 • Last 25 years • Cable TV • Internet • Variable data printing • Mobile phones • iPods

8. The Evolution of Consumer Control • Internet/Wireless Platform • Product Proliferation • Channel Explosion • Consumer Fragmentation

9. Consumer Fragmentation Test • For vacation travel, which of the following destinations would you prefer? • Paris, b) Hong Kong, c) San Francisco • If considering a new car, which of the following styles would you prefer? • SUV, b) sports car, c) sedan • When eating out, which cuisine would you prefer? • American, b) Oriental, c) French

10. The Evolution of Consumer Control • Internet/Wireless Platform • Product Proliferation • Channel Explosion • Consumer Fragmentation • The Decision Crisis

11. The Decision Crisis • More product choice • More channel choice • More decisions to be made • The Paradox of Choice

12. Sony Aiwa Nothing 100 20 40 60 80 0 More Choices Less Choice When given only one choice, 2/3 of people go ahead and make the purchase. That means 1/3 choose to keep looking. When given two choices, an equal number of people choose each CD player, but nearly half decide to buy nothing. One Choice Two Choices Source: Paradox of Choice, Barry Schwartz

13. Growing Dissatisfaction Positive Emotions Net Feelings Number of Choices Negative Emotions Source: Paradox of Choice, Barry Schwartz

14. Impact of Changes • Lost control of information • No sustainable product advantage • Need to manage growing number of channels • Messaging to more diverse audience • Address growing consumer confusion

15. The Four Transitions

16. Campaign Objectives Objective

17. Transition 1 From major channel proactive to multi-channel reactive

18. Campaign Types Objective Type

19. Proactive versus Reactive Campaigns • Proactive campaigns are: • one time events • delivered to a broad audience at the discretion of the marketer. • Reactive Campaigns are: • delivered individually in response to a customer initiative • automated with a single template that is used frequently (i.e. weekly, daily, etc…) • dynamicwith contentbased upon the individual customer initiative (i.e. products related to those purchased or browsed).

20. Reactive Campaigns Television Magazines Newspaper Radio Direct Mail Telemarketing In-store Web Site Email Mobile Thank you Web browser Abandon Replenishment Multi-buyer Search term Prospect Pre-filter Purchase Request Information Donate Vote Etc… Marketing 2008 Proactive Marketing Engagement Consumer Initiatives Word of Mouth Transformation Face to Face Retail Visit Call to Center Web Visit Email Mobile Telephone Social Network SMS MMS Blog Search

21. Post Order Email

22. Web Visit Reaction

23. Transition 1 Conclusions • Marketers need to improve their reaction to consumer initiatives. • For many, this will involve campaign automation due to the growing number of campaigns. • Reactive communications should be implemented across multiple channels.

24. Transition 2 From mass marketing to merchandising for the individual

25. Campaign Targeting Objective Type Targeting

26. Data Driven Reactive Campaigns • Transaction data • Browse data • Life stage data • Consumer supplied data

27. Mark Rogers Laptop Computer Betsy Madden Office Chair John Shaw Sony Digital Camera Dynamic Content Rules Jane Smith, iPod Dynamic Rules Engines

28. Web Personalization

29. Reaction to Past Purchases Customized to past purchases Customized to home city

30. Consumer Provided Data

31. 76% increase in revenue per “engaged” customer 90% of marketing budget

32. Transition 2 Conclusions • Once engaged, consumer should be addressed as individuals using the data they generate. • Addressing consumers as individuals will require the use of dynamic content. • Marketers will become more dependant on technology to be effective.

33. Transition 3 From product proliferation to mass customization

34. Campaign Experience Objective Type Targeting Experience

35. Approaches to Mass Customization • Customize the product • Customize the selection • Customize the delivery

36. Factory 121 – Custom Watches Users can design their own watches by following easy to understand steps

37. The users create their Personal Reading List then get the top book from their Reading List each month. BOMC2 – Book Club

38. Shaw Floors

39. Shaw Floors

40. Shaw Floors

41. Transition 3 Conclusions • As marketers and consumers increase collaboration both parties are more likely to achieve satisfaction. • Mass customization offers both marketing and manufacturing efficiencies. • Executed correctly, the marketing and manufacturing process become seamless.

42. Transition 4 From consumer confusion to simple solution

43. Objective Type Targeting Experience Benefits Campaign Benefits

44. Capital One Card Lab

45. Crutchfield

46. Crutchfield

47. Transition 4 Conclusions • Making the complex simple is the most challenging task facing marketers. • Technology will be required to achieve simplicity without sacrificing functionality. • Easy sells!!!!!

48. Current Budget Allocation

49. Future Trends

50. Future Trends FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION FUNCTION