Science of Nurture

1. Science of Nurture Session 1

2. Agenda • IBM’s journey to Personalized Marketing J. Gargan • Science of Nurture Overview J. Gargan • Nurture Context and Definition A. Gosling

3. Marketing Built Around the Individual B2C companies have been at this for years, B2B companies are working hard to get there

4. What is personalized campaign marketing? What is personalized marketing? • Tailored marketing interactions to individual characteristics and preferences…. • ….Resulting in improve relevance by meeting the customer needs more effectively and efficiently, making interactions faster and easier How do we need to evolve our campaign capabilities to get there? • Transform our data by capturing individual preferences under an established governance • Enhanced offer management and delivery • Offer design and testing • Offer library, offer taxonomy • Develop deep expertise in targeting, buying agenda and campaign design • Enhance current Unica system to improve LDR effectiveness, deploy new nurturing capabilities and automate personalized web interactions

5. Early Steps in Personalizing our Campaigns Granular Opt-in / Opt-out Unica Interact Automated / Customize Nurturing Client’s choose what information they want and how they receive it Client’s engaged with personalize web experiences and aligned offers Clients receive tailor information / offers based on individual behavioral insights August, 2012 1Q 2013 October, 2012

6. Personalized Marketing Requires Transformation Enabling Technologies Process and Methods Skills Transformation MdB Transformation Expand to include contact personal preferences and behaviors New Marketing Roles DbM Nurture Strategist, transform MM/DP into Demand Management discipline New Approach to Briefs Planning for interactions and system of discipline briefs Nurture Planning Standardized best practice for Science of Nurture, learning to deliver the right information at the right time Offer Creation & Management Offer repository and library tailored to preferences and buyer’s journey New Content Management Application of brand differentiators, Blueprint taxonomy and API for management Persona & Buyers Journey Common methodology, development of +100 Personas, consistent application of buyers journey and hurdles New Unica Capabilities Nurture map flow charting, LDR call queues via advanced response scoring Customized Nurturing Educate DP/MSM to deliver personalized offers based on preferences & behavioral insights New Unica Modules Personalize web content delivery via Unica Interact Unica Planning – workflow enablement New Labor Strategy Leverage regional marketing centers and redefine WW/IMT skill base New Campaign Process Ready-to-execute campaigns

7. Transforming IBM’s marketing capabilities requires focusing on 5 keys areas 7

8. Ready to Execute responsibilities

9. Science of nurture

10. What is Science of Nurture Science of Nurture it the strategic method by which we are going to advance our nurture capabilities from being process driven (3-touch) to being client driven (personalized marketing)

11. Science of Nurture Education What it IS • Comprehensive education around a strategic METHOD of planning personalized nurture. • This education is around the strategic development of nutrure What it IS NOT • Training around the use of the Unica tool. • You will not see the tool, or be trained on the requirements of the tool during this training Only DBMs will be required to operate the tool to execute the strategies developed as a result of this training

12. In order to achieve this, we need education Session 1: Putting Nurture into Context and Defining Nurture Framing nurture within the overall marketing transformation Session 2: Identifying Objectives and Target Audiences Using the Buyer Journey and Personas Introducing methods that we will use to ensure client centricitySession 3: Defining Content and Asset Needs Demonstrating how to evaluate content for quality and align it to client’s needs and preferencesSession 4: Capturing Response and Scoring The importance of the experience of response capture, and advancing our scoring capabilitiesSession 5: Testing and Performance Optimization How to embed testing into your nurture streams & what to testSession 6: Constructing Nurture and Changes in the Demand System How to plan out a nurture stream to pass to the DbM and what changes enable this capability

13. Session One: Putting Nurture into Context and Defining Nurture

14. 1. PUTTING NURTURE INTO CONTEXT

15. In 2015 Software contributes nearly half of our segment profit Growth initiatives deliver $20B in revenue growth Growth markets’ revenue approaches 30% of IBM’s total Enterprise productivity delivers $8B in gross savings IBM generates $100B in free cash flow, returning 70% to shareholders IBM has an aggressive 2015 growth target At Least $20B Operating PTI/EPS Segment Operating PTI At Least $13.25 Operating EPS 00 01 02 03 04 05 06 07 08 11 12 13 14 09 10 15 Hardware/Financing Services Software

16. Historical pipeline starting position and resulting yield will not enable us to meet our 2015 Roadmap goals Quantity Quality $1 billion Average shortfall 20% Pipeline yield Deliver high-quality validated leads to Sales – from both established clients and net new accounts Assist Sales to win, to win bigger, and to win more often 16

17. Until 2011, our answer to increasing pipeline opportunities was to increase messaging activity Marketing Tactics Millions Millions

18. With the transformation of the IBM Demand System encompassing three areas: Use what makes our brand unique to increase the quality of our work Align Marketing & Sales across the end-to-end system Make the way we generate and manage demand truly “smart” Execution that is distinct from competition will drive greater yield from existing pipeline. • Includes: • Adoption of MAP segmentation • Consistent RTM and enablement • Campaigns linked to sales plays • Common quarterly calendar • Includes: • Deployment of Unica • Agile methods • Data and analytics

19. Nurture is aligned to our Demand System goals Demand system goals Build an end-to-end system that has operational rigor and collaboration with Sales at every point Fully leverage technology to make the way we manage demand truly smart Leverage the IBM brand differentiators to drive quality and increase yield Nurture alignment Nurture is part of the end-to-end system and will build collaboration with Sales by ensuring that the responses most likely to convert to opportunities are passed to an LDR MAT is the facilitating technology that enables Nurture delivery in support of campaigns and Sales Plays Nurture is the means to make our case with expertise and proven outcomes and provide opportunities for collaboration

20. This alignment then drives our actions Demand system goals Build an end-to-end system that has operational rigor and collaboration with Sales at every point Leverage the IBM brand differentiators to drive quality and increase yield Fully leverage technology to make the way we manage demand truly smart Nurture alignment Nurture is part of the end-to-end system and will build collaboration with Sales by ensuring that the most likely to convert to opportunities are passed to an LDR Nurture is the means to make our case with our proven outcomes and expertise and provide opportunities for collaboration MAT is the facilitating technology that enables Nurture delivery in support of campaigns and Sales Plays What we need to do Focus on our target clients, instead of on our products, technology or internal processes Design our content to communicate what a client needs to understand vs. what we want to sell Define Nurture beyond eNurture and employ a rigorous client focusacross all client touch points

21. If we do this, we will achieve Increase in wins Increase in response to Validated Lead conversion rates Increase in Sales Accept rate