Customer Engagement with Marketing Analytics

1. Customer Engagement with Marketing Analytics Nordan Consulting

2. Nordan Consulting Agenda: • Who We Are • Benefits of our product • Challenges, Impact you can expect to your business • How are we different – How it works • Multi-Channel impacting messaging and offer • Estimate on Level Of Effort / Client Time Required

3. Nordan Consulting Our team makeup is the ideal skills mix for optimal delivery Advanced Leadership Consultant - MBA Harvard Grad Enterprise Architect – Retail Strategy and Marketing Chief Technology Officer – Retail Solutions Advanced Analytics Scientist – Artificial Intelligence PhD

4. Nordan Consulting Today’s tech and consumer changes are producing many tough marketing challenges that are leaving marketers struggling to respond 4 1 9 13 12 2 3 7 Marketing Priority Matrix 1 Data explosion 2 Under- preparedness Social media 3 Growth of channel and device choices 70 4 Shifting consumer demographics 5 Financial constraints 6 Decreasing brand loyalty 60 5 7 Growth market opportunities 6 8 ROI accountability 10 8 11 9 Customer collaboration and influence 50 10 Privacy considerations 11 Global outsourcing 12 Regulatory considerations Factors impacting marketing 40 13 Corporate transparency Mean 0 20 40 60 Source: 2011 Global Chief Marketing Officer Study industry

5. Nordan Consulting How effective is your organization in the key metrics of delivering customer life time value? Forrester report on “The State Of Retailing Online 2013: Key Metrics And Initiatives” Source: http://www.forrester.com/The+State+Of+Retailing+Online+2013+Key+Metrics+And+Initiatives/quickscan/-/E-RES89902#/The+State+Of+Retailing+Online+2013 5

6. Nordan Consulting Not all marketing dollars are returning equal results. Its easier said then done to figure the ROI on your marketing dollars so you can do more with less Visitors Revenue How is your Marketing Budget Performing? 8% 41% 92% Is it allocated correctly? Is it producing the expected results Does it have growth focused marketing attribution 59% No Previous Purchase One Previous Purchase Multiple Previous Purchases Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

7. Nordan Consulting The way consumers reach purchasing decisions is constantly changing and this requires vigilance with ongoing innovative marketing execution Source: http://www.kaushik.net/avinash/analytics-tips-complex-data-simple-logical-stories/?utm_source=social-media&utm_medium=twitterfbgp&utm_campaign=aktw 7

8. Nordan Consulting Shoppers want retailers to provide personalized promotions and recommend relevant – based on IBM Global Study across 14 countries with 23,466 respondents Interest in retailer offers 55% 43% Use my prior purchasing to offer me promotions Use my prior purchasing to recommend new products 43% 36% Invite me to events Involve me in new product ideas Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers From Transactions to Relationships: Connecting With a Transitioning Shopper Global View

9. Nordan Consulting According to Forrester, the US retail marketing budget is disproportionately allocated. Effective marketing analytics can provide the necessary alignment Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

10. Nordan Consulting Effective use of data enables marketers to target customers with the highest profitability potential, i.e. for 1% of shoppers returning = ~10% increase in revenue Shopper Conversion Estimates US Email Marketing Spend, 2011 To 2016 52% 54% 84% 60% http://www.forrester.com/US+Interactive+Marketing+Forecast+2011+To+2016/quickscan/-/E-RES59379#/US+Interactive+Marketing+Forecast+2011+To+2016/fulltext/-/E-RES59379 Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

11. Nordan Consulting Analytics based marketing actions and/or offers can tap into the five times higher conversion rates of the top two quartiles with the right and effective capabilities • Capabilities needed to convert profitable purchasers • Customer Insights • Trend Spotting • Customer Value Management • Highly Targeted Campaigns Source: http://www.cmo.com/articles/2012/9/11/the-roi-from-marketing-to-existing-online-customers.html

12. Nordan Consulting Based on our experience we expect our marketing analytics to increase by 50% on the results of current marketing solutions The biggest impact to conversion in the first 12 hours of remarketing No eMail Re-Marketing With eMail Re-Marketing Macy’s uses psychological triggers for increased conversions Source: http://www.seewhy.com/conversion-academy.htm

13. Nordan Consulting Nordan is able to deliver results by applying the experience and skills from the dimensions critical to today’s business needs of engaging customers Industry Insights Analytics Accuracy Capabilities NordanMarkting Analytics Solutions Execution

14. Nordan Consulting – Product Suggestion Engine Consumer purchasing patterns are changing slower than implied by the media hype

15. Nordan Consulting – Product Suggestion Engine Nordan Product Suggestion Traditional Product Suggestion Nordan looks at the complete view of the customer – browsing history, purchasing history, and demographic data Customer views a product Customer B 70% Similar Customer A Customer C The system finds the items with the highest view rate when other customers have viewed this product Customer D 30% Similar 80% Similar Nordan then identifies products that customers B, C, and D have Purchased and makes suggestions for the next best offer.

16. Nordan Consulting The patterns and trends you notice in your market sector can dictate the approach you take towards higher RMI Leverage Point 5: Advocate Compensation Leverage Point 6: Application To Person Use platforms like Pinterest to complement marketing efforts through the help of the extreme loyalist Use of the mobile platform to send intelligent, timely & location focused messages to mobile users

17. Nordan Consulting What is the anatomy of your customer’s experience and how do you maximize this experience by capturing, analyzing and executing on all the possible info? Doing Aware / Engaged Transacting / Interacting Involved / Loyal • Communication Sources • Process Flows • Data Extracted • Transaction points • Process Flows • Data Extracted • Ongoing conversation • Process Flows • Data Extracted • Triggering thoughts • Intuitive experience • Realized value Thinking Feeling • Triggering Feelings • Supporting messages • Positive experience Experience • Initial Experience • Visual assistance • Continuous engagement Image Source - http://www.percepta.com/regions/europe/resources/blog/2012/03/30/owns-social-media-customer-service/

18. Nordan Consulting Marketing effectiveness driven by business value results drives much higher returns than traditional digital activity metrics Activity Based Approach Value Based Approach - Key Issues + Key Benefits • Exhausts customers • Encourages discount hunting / low profitability customers • Lost opportunity to move a profitable customer to the next segment • Low Margins • Possible customer retaliation from spamming effects • More relevant to the customer – increase probability of engagement and/or purchase • Lower marketing spend – fewer messages, better timed, and personalized • Increased margins – pattern detection on moving customers up the profitability segemnt • Create advocates for your brand • Reward profitable customers with the right incentive for advocacy and future spend

19. Nordan Consulting The Level of Effort estimate for a 2 month POC – the process flow and LOE will be customized based on the project scoping effort in the Project Kickoff phase Client LOE Impact Task requiring assistance LOE (in hrs) Phases Establish scope of the solution (Category, Product, approach, data to be used, project plan creation) Business – 5 hrs Tech – 10 hrs Project Kickoff Solution Setup Business Alignment Matrix, Data Extracts, Analytics Models Customized, Solution Automation Setup Business – 5hrs Tech – 10 hrs Execution Analytics results validation, campaign execution, technical resolutions to issues Business – 5 hrs Tech – 5hrs Results Analysis Track execution, run reports, validate results Business – 2 hrs Results Presentation Review results with the business and establish next steps Business – 1 hrs * total attendees

20. Nordan Consulting Appendix

21. Nordan Consulting 1. Select Key Shopping Features 2. Capture Shopping Data Coupon 1st Time Sale Items Brand RFM 3. Create Analytical Data Clusters Profitable High Potential Luxury 4. Create Analytical Campaign Models 5. Execute Tagged Campaign 6. Track Campaign Results Unengaged Cluster Offer Profitable Luxury High Potential Unengaged