© 2012 IBM Corporation1

Making Marketing Personal with Customer Analytics

Outcome Focused Analytics

© 2012 IBM Corporation2

Today’s digital revolution and empowered consumer are producing many tough marketing challenges that are leaving CMOs struggling to respond

Marketing Challenges1

9

13

12

2

4

3

1

7

50

60

70

40

20 40 600

8

6

Financial constraints

Decreasing brand loyalty

Growth market opportunities

ROI accountability

Customer collaboration and influence

Privacy considerations

Global outsourcing

Regulatory considerations

Corporate transparency

5

6

7

8

9

10

11

12

13

Data explosion1

Social media2

Growth of channel and device choices3

Shifting consumer demographics4

Mean

Marketing Priority Matrix

Factors impacting marketing

Under-preparedness

5

1011

Source: 2011 Global Chief Marketing Officer Study industry

© 2012 IBM Corporation3

Where is this data explosion coming from?

Source: McKinsey & Company, May 2011

Every second of HD video generates > 2,000 times as

many bytes as required to store a single page of text.

Every day, the New York Stock Exchange captures 1 TB of trade information.

More than 30M networked sensor, growing at a rate

>30% per year.

12 TB of tweets being created each day.

5 Billion mobile phones in use in 2010. Only 12% were

smartphones.

What is your business doing with it?

Marketing Challenges1

© 2012 IBM Corporation4

Customer-centric analytics is the primary functional objective across macro industry groups, as well

50%

11%

21%

16%

2%

42%

26%

13%

13%6%

59%20%

10%

7%5%

51%

19%

16%

10%4%

62%8%

11%

18%1%

32%

30%

27%

6%6%

Consumer Goods Financial Services Healthcare/Life Sciences

Manufacturing Public Sector Telecommunications

Customer-centric outcomes

Operational optimization

Risk / financial management

New business model

Employee collaboration

Findings from the 2012 research collaboration of IBM Institute for Business Value and Saïd Business School, University of Oxford

Analytics Insights2

© 2012 IBM Corporation5

Consumer purchasing patterns are changing slower than implied by the media hype

Analytics Insights2

© 2012 IBM Corporation6

The patterns and trends you notice in your market sector can dictate the approach you take towards higher ROMI

Habit Formation Point – Purchasing Pattern

By CHARLES DUHIGG - Published: February 16, 2012

Analytics Insights2

© 2012 IBM Corporation7

You can know who the customers are, how to reach them and how to gain their TRUST

BehaviorsInterests

Preferences

Demographics

Spend Advocacy

Retailer Experience

Product Experience

Communication

Intentions

Timeliness

Conditions

Value PointsLinguistic Style

Location

Analytics Insights2

© 2012 IBM Corporation8

The ability to create competitive advantage using analytics surged dramatically in 12 months, impacting the bottom-line

Smarter Marketing3

Source: 2011 study MIT / IBM IBV - surveyed 4,500 executives, managers and analysts from more than 120 countries and representing more than 30 industries

© 2012 IBM Corporation9

Early adopters have outpaced others in gaining competitive advantage by expanding the use of analytics

Smarter Marketing3

© 2012 IBM Corporation10

We also examined what happens between Aspirational and Transformed – the space between the two end-point benchmarks

Source: The New Intelligent Enterprise, a joint MIT Sloan Management Review and IBM Institute of Business Value analytics research partnership. Copyright © Massachusetts Institute of Technology 2011.

Information management

proficiency

Analytic skills and tools proficiency

Data-oriented culture

Aspirational

High

Low

Enterprise driven

Line-of-businessdriven

HighLow

Experienced

Paths to Transformation

Transformed

Smarter Marketing3

© 2012 IBM Corporation11

Experienced organizations one of two paths, each focusing on different competencies, to move towards Transformed

Source: The New Intelligent Enterprise, a joint MIT Sloan Management Review and IBM Institute of Business Value analytics research partnership. Copyright © Massachusetts Institute of Technology 2011.

Information management

proficiency

Analytic skills and tools proficiency

Data-oriented culture

Aspirational

High

Low

Enterprise driven

Line-of-businessdriven

HighLow

Experienced

Paths to Transformation

TransformedCollaborative

path

Specialized path

Smarter Marketing3

© 2012 IBM Corporation12

The marketing alignment process identifies the key variables necessary to deliver short to long term ROMI

Define Outcomes

• Improve Store Sales

• Increase Online Sales Conversion

BusinessMetric

Measure Action

• Purchases

• Loyalty Sing-up

BehaviorMetric

Analyze Sentiment

• Customer recommends

• Consumer leaves positive comments

Attitude Metric

Measure Activity

• Open Rates

• Click Through Rates

VolumeMetric

Business Variables

*****

*****

*****

*****

*****

*****

*****

*****

Smarter Marketing3

© 2012 IBM Corporation13

Moneyball: The Art of Winning an Unfair Game

Outcome Focused Analytics – “By re-evaluating the strategies that produce wins on the field…”

A Moneyball lesson for business - focus on the profitable customers and prospects

Purpose of Analytics – “"the ruthless drive for efficiency that capitalism demands."

Smarter Marketing3

© 2012 IBM Corporation14

Consortium based models are emerging to provide additional insights about customers and improve marketing techniques

ConsortiumLeaders

Partners

Approach

Shoppers

Revenue

Smarter Marketing3

© 2012 IBM Corporation15

Using analytics successfully to drive business results requires a holistic approach across the interdependent aspects of business

Manage Understand Act

Smarter Marketing3

© 2012 IBM Corporation: IBM Telecommunications Industry 16

Appendix