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Customers today are looking for more than just rewards—they want to be treated honestly and fairly

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Aviva’s customer-first culture Vol. 30 | No. 11 | December 2017 EDITOR Sarah O’Connor -

How a major insurance company is leveraging data to boost customer engagement

PRESIDENT Steve Lloyd -

Excellent Execution Marketing in a world of fragmented media

CONTRIBUTING WRITERS Emily Nielsen Paul Evans Stephen Shaw Kristen Herhold Holly Simmons Stan Ivankovic Jason Storsley Manon Leberge Greg Zakowicz Rajesh Nambiar

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Customer Centricity

Aviva’s customer-first culture How a major insurance company is leveraging data to boost customer engagement By Stan Ivankovic


Who is our customer?

eing more things to more people seems like a logical strategy. It explains why a hamburger outlet might want to expand into breakfast foods or why an online bookseller might begin selling groceries. But how can a business know which new product or service offering will translate into sustained growth? For executives at Aviva, one of the largest property and casualty insurance companies in Canada, identifying growth opportunities meant they first needed to answer a simpler question: “Who is our customer?” “Like many insurance companies, Aviva has plenty of transactional, policy-centric data but we had relatively little in the way of behavioural, consumer-centric data,” according to Danielle March, who leads Aviva’s customer segmentation strategy. Understanding customers through segmentation The first step was to take stock of what

Customer focused data-driven culture

data Aviva already had to identify any gaps and find sources to fill them. From there, analysts could uncover customer insights that would lay the foundation for Aviva’s customer strategy and marketing plan. Aviva contacted Environics Analytics (EA) for help in plugging those holes and structuring the analysis. To define Aviva customers, analysts integrated in-house data with a variety of EA databases, including DemoStats, SocialValues, MoneyMatters and Numeris, which analyze consumers by demographics, lifestyles, wealth and spending patterns. The analysis allowed the team to organize Aviva’s customers into segments using PRIZM5, a segmentation system that classifies Canadians into 68 unique lifestyle types. Aviva’s analytics team then used EA’s ENVISION5 platform to develop target groups of like-minded consumers. “With EA, we were able to enhance our own data and use it to produce better customer outcomes,” says March. Armed with these customer segments, Aviva began to bring its customers into sharper focus, determining which products would meet their needs—today and in the future—and which messages would best resonate with each target customer group. Proposition managers were able to make informed decisions such as refinement to existing products as well as exploring potential new product offerings. Also, March consulted with key stakeholders at Aviva to gain buy-in, influence priorities and socialize Aviva’s key customer segments across the enterprise. “We’re all speaking the same language and creating the required space to be curious about the data,” observes March. Creating a new success story The customer-centric approach is even altering how Aviva measures success. “In the end, getting the customer proposition right will drive higher customer loyalty,” say March. With the work gaining traction, March has noticed more people are receptive to the new approach. “The business unit leaders are feeling more optimistic because we finally have answers to their questions,” she says. “We have data to support why we’re making the decisions we are and we’re challenging ourselves to look for customer evidence before we start on the path of building things that we think are excellent—when in fact they may not be.” Aviva’s journey to understand its customers has allowed March to offer some advice to other organizations looking to adopt a more data-driven, customer-centric focus: “It’s a marathon, not a sprint,” she says, “and the first step is admitting that you are not the customer.” Stan Ivankovic is a consultant in the finance and insurance practice at Environics Analytics.


December 2017

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Four ways online retailers can inspire loyalty By Greg Zakowicz


espite Amazon increasing its Canadian presence, half of all Canadian e-commerce happens from retailers outside the country. Smartphones have made it so that consumers are always connected and their access to products is unrestricted. As a result, consumer expectations have evolved. Consumers now expect more from the brands they engage with. They expect relevance, affordable and speedy shipping, and excellent customer service. Combine all of that and retailers sure have their work cut out for them. Canadian retailers now face two challenges: How do they keep e-commerce dollars domestic and how do they foster loyalty among consumers? Email engagement and relevance is one solution. While consumers expect marketing emails to be relevant, according to a recent report by Fluent, only 15% of them find them to be consistently useful. And because brands often have limited internal resources to execute a sophisticated segmentation strategy, they then turn to batchand-blast methods, sending the same message to everyone. This email strategy makes it impossible to consistently deliver relevant content to consumers, and it does little to create engagement and cultivate loyalty. All is not lost, though. Here are just a few ways you can help connect your brand with consumers, even if you have limited internal resources available. Product recommendations: Intuitive product recommendations are a great way to create relevance with your ❱

emails, even batch-and-blast ones. These recommendations will be specific to the subscriber, considering purchase and browse activity, email message content and any specific business rules. The goal here is to make these as specific to the individual subscriber as possible. Browse recovery: Browse recovery messages are targeted, automated messages to subscribers who browse your site but never place a product in their cart. This is a lesser-known but growing tactic that creates truly relevant emails and drives revenue. In fact, more than 60% of consumers expect browse behaviour to be used to make emails more relevant. Imagine shopping for a green sweater. You visit a website, view some related products but abandon your session. The next day you receive an email from three companies. Two are batchand-blast and the other showcases the best green sweaters available. Which message would you click on? This is the power of browse recovery. Remember, you are going to send the subscriber an email regardless. Why not make it a relevant email

based on their actual interests versus a batch-and-blast one? Post-purchase (and other lifecycle messages): If you’re not sending automated messages based on user action, such as a welcome series for new subscribers, you are missing primary engagement moments. Post-purchase messaging is a great example of ways lifecycle messages can help build loyalty. Nurturing your customers and their purchases at this crucial time can be critical in furthering their opinion of your brand and creating affinity for doing business with you. Messages that thank the customer, offer product care or how-to tips and tricks and other helpful messages can be the difference between a one-time purchase and a lifelong customer. Buy-online-pickup-instore (BOPIS): If you have brick-andmortar stores, utilizing BOPIS can be a significant differentiator. Consumers want immediacy when purchasing products. They just don’t want to pay for it. This is exactly why Amazon offers two-day and two-hour delivery. But this is exactly where stores

can compete and take the fight to Amazon. BOPIS allows customers to have the convenience of online purchasing, while benefiting from the immediacy of receiving the product. Even more important, 65% of consumers purchase additional items when picking up orders in-store. Competition is global and accessible at a moment’s notice. As consumers continue to rely on their smartphones to search for and purchase products, creating loyalty becomes more important than ever. Being relevant and engaging with your audience is what will ultimately separate your brand from the competitors. Fifteen per cent of consumers find marketing emails consistently relevant. What would your subscribers say about yours? As a former consultant with more than 10 years of experience in email, mobile and social media marketing, Greg Zakowicz has firsthand knowledge about the challenges facing the retail industry. Now, as senior commerce marketing analyst at Oracle + Bronto, he provides thoughtful insight to the Internet Retailer Top 1000 and is a frequent speaker at e-commerce events.

December 2017

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How social media can foster loyalty

By Kristen Herhold


t has been estimated that the average person spends nearly two hours on social media every day. If you want to find and relate to customers, social media is where you should be. If you want to announce an update or promote a product or service, it is where you need to be. Customer loyalty is nurtured when your audience feels heard, understood and appreciated, and there is often no better place for this interaction than on social platforms. Social media is constantly changing so here are three tips for developing customer loyalty using social media in 2018. These basic but necessary principles can help guide you if you are new to social media marketing or if you need to re-analyze your strategy.


Plan your content The internet is a very noisy place, filled with pop-up ads, videos, GIFs and information overload. A company’s posts need to be thoughtful, planned-out and unique to break through the clutter. “Developing an editorial plan and calendar, which defines the types of content you will share to meet your goals while keeping your audience engaged is essential,” said Dave Chaffey, CEO of Smart Insights. “For example, take time to create rich visual cards, videos or infographics, which tend to have the biggest impact in the newsfeeds and are more likely to make people follow-through and December 2017

engage with your brand to find more of the same.”


Consistently prioritize social media Social media platforms are similar to big-box technology stores, where a customer can easily become overwhelmed by a wall of TV sets blasting images all at the same time. There’s so much to look at and everything is moving so fast that you instantly forget what you saw just 10 seconds ago. On social platforms, not only does the content have to be appealing but so does the consistency. What makes companies’ social media efforts successful is “definitely a consistent effort. That alone... is something that people tend to overlook and really undervalue: how important it is to consistently invest in the channels and resources,” said Josh Krakauer, founder and CEO of social media marketing agency Sculpt. “You can test lots of things in the short term, but a long-term, sustained effort at building and managing a social media presence is where companies find success.”


Figure out your objectives With other types of marketing, it’s about getting your name out and establishing your branding. With social media, there are unique opportunities for relationship building and real-time interaction. It’s crucial to determine how

your customers are using social media and then appeal to them through their wants and needs. Whether it’s higher conversion rates or more engagement, companies have different objectives with social media, but all need to appeal to their audience to succeed. “I think we have to decide what the metrics for success are on social media and for different brands and different industries... They’re going to have pretty different goals. But if I had to try to put some guiding principles to it, I think I would say listen,” said Steve Pearson, CEO of Friendemic. “Don’t just use social media as just another broadcast mechanism. There’s a lot more to social media than that, and you’re missing out if you’re not taking advantage of the things that make social media unique and powerful.” Solving social media marketing’s biggest challenges According to the survey, the biggest challenges that companies have involving social media marketing were: not having enough human and financial resources; lacking a formal strategy; and building a community of followers and influencers. When you create a successful social media marketing strategy, you’re focusing your efforts on a project that will have a clear and measurable outcome. You can invest in valuable content that

produces customer interaction rather than allowing your social media presence to exist as an afterthought with minimal results. One of the major strengths of social media marketing is to drive traffic to your website and therefore increase conversion rates. From there, you can decide whether your human and financial resources are providing a decent ROI and determine if your messaging is on point or you’ll need to focus on a different social media platform. Finally, when you have quality content, you’ll build your reputation for your thought leadership pieces that will naturally attract a community of followers and influencers. You need to prove your worth before you can convince someone of value to support you; this happens with a clear and measurable social media strategy. Social media marketing is complicated and much of the time it’s more of an art than a science; however, it’s where your customers are and where you can develop relationships and loyalty. The question isn’t “can I afford to have a social media strategy?” but “can I afford not to?” Kristen Herhold is a content writer and marketer at Clutch, a B2B research firm in the heart of Washington, DC. Connect with her on LinkedIn or reach out with any questions, comments or concerns at or 202-840-6690. ❰

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Canadian consumers are loyal to small business owners By Jason Storsley


mall business owners have a number of advantages when it comes to engaging their customers. Not only are a majority of consumers more inclined to support local businesses, they’re happy to pay extra for products and services, and quick to promote them if they have a positive experience. These are some of the topline results from the 2017 RBC Small Business poll conducted by Ipsos Reid. This year’s survey of over 2,000 respondents across Canada provided additional insight into areas such as online presence and payment options—both of which are becoming key competitive differentiators for the small business community. A love for local business One of the most compelling results of the survey is that 88% of Canadians will choose to support a local business when possible and 57% said they would pay more for a product or service offered by a local business. The strongest supporters of local business are Millennials, with over two-thirds (69%) saying they would pay more for goods and services offered through local businesses. Perhaps some of this affinity to small businesses can be attributed to the fact that 63% of Canadians have thought about owning their own business; while one in every three of those have actually started or purchased a business at some point. For current business owners that have taken the leap, 96% say owning their own business has given them the chance to have control over their career. Even when seeking employment, 63% of Canadians said that they would prefer to work for a small business. It’s clear Canadians have a real “soft spot” for the small business owner. While that fondness does offer up a considerable marketing advantage for local business ❱

owners, the right kind of engagement with your audience is a critical part in getting their attention and building loyalty. The survey indicates for example, that online presence, social media and payment options are extremely important factors in nurturing that engagement with customers. Getting your name out there It comes as no surprise that an online presence has become a critical part of the customer experience, whether it’s to place orders, research products and services, engage in conversations or simply find your location. According to the survey, 70% of adult Canadians would be more likely to purchase from a business if it had an online presence.

way to diversify revenue streams and grow the business. Not only does it create awareness for the brand, it is an opportunity to engage and build relationships with current customers and attract new ones. Also bear in mind that the CIRA reports that 62% of Canadian Internet users prefer to make purchases from Canadian websites over American ones, which is another major opportunity for business owners selling online. Get social with your customers Millennials also take a commanding lead in terms of engaging with businesses in social media with 66% of Millennials saying they actively engage with business owners on social media.

88% of Canadians will choose to support a local business when possible and 57% said they would pay more for a product or service offered by a local business. Millennials in particular are more likely to trust a business (48% of respondents) and perceive the purchase experience as better/ convenient (37%) if a business has an online presence. Yet less than half (nearly 46%) of Canadian businesses have a website or e-commerce offering and that number drops to 41% for small- to medium-size businesses according to a 2016 CIRA Internet Factbook. For a business that does not already have a digital presence or e-commerce offering, this can be a

Businesses need to pay heed to those numbers given that 75% of Millennials surveyed also say they would support a local business by helping to promote them on social media—a clear advantage when it comes to raising your profile and extending your market reach. In addition, almost 40% of Canadian consumers say that reading product reviews, peer review and feedback on social media has an influence on their shopping behaviour, according to a 2016 PwC Canada retail study.

Bring more payment options to the table A third critical factor in customer engagement is payment options. The survey showed that Canadians want more convenient payment choices. Currently a majority prefer to pay by credit or debit for items over $25. In fact almost 70% of Canadian adults say that they would spend more at a small/local business if it accepted more than just cash as a payment option. Business owners should also note that 77% of Canadians wish that more of the small businesses they frequent had ‘tap to pay’, and 47% wish they had greater access to mobile payment options such as Apple Pay or Android Pay. Again it is the Millennials that are leading the demand for these emerging payment vehicles: 80% wish more of the businesses they frequent had tap to pay and 60% wish more had mobile payment options. The good news is that payment systems used to be expensive and cumbersome but technology advancements have made it easier for businesses to give convenient payment options to customers using the infrastructure they already have, such as a tablet or smartphone, and accept a variety of payments. In today’s competitive environment, small- to medium-size businesses need to ensure they are keeping pace with customer needs. As our study shows, they already have a significant advantage when it comes to attracting and retaining customers. The key will be to leverage those advantages by continuing to offer the convenience and options their customers are seeking. Jason Storsley is vice-president of small business at RBC. For more information, visit

December 2017

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The Loyalty Trap

Ever since reward programs first became popular over 50 years ago, marketers have been trapped into thinking that customer loyalty can be bought. But customers today are looking for more than just rewards—they want to be treated honestly and fairly.

By Stephen Shaw


he jokingly refers to it as her “hobby.” Every weekend, before heading out to shop, she scans the grocery and drug store flyers in search of deals. But she’s not looking for ordinary coupons and discounts—she’s searching for Air Miles offers. She is an avid points collector, hooked on earning miles and loves to play the loyalty game: taking advantage of bonus miles and special promotions, just so she can cash them in for free trips. A typical calculation might go something like this: “Robaxacet Platinum gets me 10 miles for buying two. But that’s still pretty expensive. If I wait for the drug store’s standard deal—spend a total of $50 to get 100 miles—am I further ahead?” She works hard at collecting those miles—so hard in fact that when Air Miles occasionally bungles a transaction by failing to award her the right number of miles, she’s instantly on the phone to them, demanding a correction. ❱

Of course, whenever she has to wait longer than necessary “due to unexpected call volume,” which is much of the time, her indignation grows by the minute. Even more bothersome: the ordeal she has to go through to redeem those hard-earned miles. The available inventory of flights is so restrictive she sometimes must surrender more miles than she would like just to get her preferred booking. Yet, in spite of those hurdles, she responds with glee when she hits the 6,000-mile mark and qualifies for the ONYX tier. This actual profile of an Air Miles Collector helps explain the addictive appeal of reward programs in Canada. There are tens of millions of shoppers just like her, many even more extreme in the lengths they’ll go to maximize their miles and points: registering for every promotion they see; paying for everything on their point-earning card(s); carrying multiple cards so they can switch over the moment they hit the top

tier; signing up to get the one-time bonus points and then immediately cancelling the card; “double dipping” by earning miles twice in one purchase; and much more. Catering to these collectors is a wide range of companies, from coalition loyalty programs like Air Miles and Aimia, to mass merchandise retailers such as Canadian Tire and HBC, to the grocers and pharmacies, to airlines and travel credit cards, to booksellers, hotels, cinemas, casinos, restaurants and car rental companies—all investing in loyalty management systems and infrastructure to feed this gaming addiction. The question marketers need to ask themselves: what does any of this have to do with customer loyalty? Surprise windfall The loyalty business as we know it today grew out of a simple goal: drive repeat purchase using promotional incentives. If you were a grocery shopper back in

the 1960s, for example, you could collect “stamps” based on the amount of your purchase which you collected in a book. When the book was full you could exchange it for catalog merchandise like housewares. For very little effort, budget-minded shoppers could earn a tangible reward, making trading stamp programs extremely popular at the time. As a result, they became the model for frequency marketing. Canadian Tire introduced its venerable loyalty program in 1958, using a unique form of reward: a pseudo-currency called “Canadian Tire Money.” Originally awarded just for fill-ups at its gas stations, the aim of the program was to compete against the standard promotional giveaways of the oil giants without inciting an open price war. The “cash bonus” coupons became so popular that the program was expanded to the retail stores, when they started to be printed on genuine bank note paper, making them feel December 2017

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Loyalty like real money. A testament to their enduring appeal is the fact that shoppers still love collecting printed “money” even today, despite the successful launch of a card-based digital loyalty program in 2014. In 1981 American Airlines created the first airline mileage program. It was a desperation response to the fare wars that broke out following industry deregulation when seat prices were being driven down by start-up competitors. The airline wanted a “barrier to exit” that would inhibit frequent fliers from switching carriers. The concept took off and soon after the other major airlines were offering programs of their own, including Air Canada which launched Aeroplan in 1984. As the airlines quickly realized, the real value of these programs was not simply filling otherwise empty seats: it was the ability to link booking data to individual passengers. At last they could identify their most valuable fliers, mostly “road warriors” flying on business, ushering in the age of tiered loyalty programs.

appealing to coalition sponsors: enjoying category exclusivity, they could buy flight rewards for their customers without the onerous expense of operating a “me-too” loyalty program. Linked to fastearning opportunities in groceries, gas and credit cards, the Air Miles loyalty card quickly won a favoured spot in most people’s wallets, eventually carried by two-thirds of Canadian households. “They came in at a time when it was complicated and difficult to build a loyalty program and they did it right,” recalls Steve Allmen, who heads up a Toronto-based loyalty consulting firm called Loyalty & Co. The unfettered sale of miles had unforeseen consequences for the airlines. All of those “saved” miles became a ballooning liability at a time when the airline industry was being hammered by rising fuel costs and the pesky emergence of no-frill regional airlines. The major airlines wanted out—but no one was brave enough to go first. Under earnings pressure, they began to limit seat availability, frustrating collectors trying to redeem their points. Instead of feeling

Today the sale of miles is a multi-billion-dollar source of ancillary revenue for the airlines with profit margins that would make the drug cartel blush. The other major discovery: the airlines could sell their mileage currency to co-branded credit cards, travel partners and affiliate networks for many times the marginal seat cost. The appetite for miles turned into an unexpected windfall for the airlines, spawning an entire ecosystem of buyers and resellers. Today the sale of miles is a multi-billion-dollar source of ancillary revenue for the airlines with profit margins that would make the drug cartel blush. Unforeseen consequences In Canada, the Air Miles program was launched in 1992, patterned after a coalition model born in the UK. The formula was highly December 2017

positive about their redemption experience, members began to get resentful. Partly in response to souring attitudes, airlines have started to award points now based on dollars spent instead of distance flown, placating the more profitable members. In 2002 a bankrupt Air Canada spun off its Aeroplan program as a separate entity, anxious to offload the points liability while still benefiting from the insatiable market demand for miles. Groupe Aeroplan, as the company was now called, later acquired the UK-based coalition program Nectar and in 2011 renamed itself Aimia. By that point Air Canada had become one just one of many

reward suppliers, albeit the most indispensable, accounting for 75% of redemptions. The promise of a free flight is still prized above all other rewards for its high perceived value, notwithstanding the redemption hurdles and booking restrictions. When Air Canada announced in the spring of 2017 that it was repatriating its loyalty program—to the dismay of Aimia stockholders—the decision rocked the industry. The ostensible reason for the take-back: to restore control over the quality of the member

promotional targeting, but helping to guide assortment planning and category management as well. The grocer saw a significant spending lift by introducing members to new categories—encouraging them to load up on select items—and promoting ancillary purchases. In the U.S., Kroger’s loyalty program is rated the best in the grocery business, with Kroger Plus cardholders accounting for 97% of purchases. The healthy growth of the company in a notoriously cut-throat industry is testament to the power of shopper loyalty,

The goal of a loyalty program should be to create a rewarding experience for customers at every stage of the lifecycle.

experience. A more plausible reason: to regain control over the member transactional data. “Control the data, control the experience, control the consumer, control the brand, generate the revenue,” explains Steve Allmen, a former Aimia executive himself. Synthetic loyalty Membership data is invaluable, as the grocery trade found out years ago, embracing a loyalty model first pioneered by the British supermarket giant Tesco in the mid-1990s. Tesco proved through its analytical rigor that its Clubcard database could be a rich source of shopper insight, not only improving the precision of its

especially compared to the current financial woes of Canadian grocers. Typically, grocery loyalty programs operate as an extension of trade promotions. Grocers cover 30%-50% of program costs through manufacturer trade funds (“Buy 2, Get 1 Free!”). The CPG manufacturers buy loyalty points which are used to target segmented members with bonus offers that can be downloaded to their loyalty cards—certainly a better deal than buying space in weekly flyers where all shoppers get the same discount, subsidizing already heavy users. The recent merger of Loblaws’ PC Plus with the Shoppers Optimum program takes that ❰


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actively compare prices online and population believe in-store before making a purchase? those programs True loyalty is an emotional state improve their brand of mind—a feeling of trust in the experience. The “earn integrity of the relationship. It and burn” design means more than simply “give and reduces the relationship get”: it means you care; it means to a contractual deal, “you understand me”; it means “you making customers make me feel special.” Loyalty is an feel neither valued nor outcome, not a program. But the special. It simply creates real payoff is not “word of mouth” what’s been termed or “likelihood to recommend” or “synthetic loyalty,” devoid of emotion. “positive reviews” or “willingness The reward program to pay a premium”—it is, is just another way simply, a belief that the brand is for members to save trustworthy. money. The cumulative Explains noted “trust effect: erosion of brand philosopher” Onora O’Neill: “Let loyalty and mounting me give you a simple commercial consternation with the example. The shop where I buy my stealth devaluation socks says I may take them back of point values. The and they don’t ask any questions. They take them back and give me member attitude the money or give me the pair of toward most programs socks of the colour I wanted. That’s can be summed up in super. I trust them because they one word: “Meh”. have made themselves vulnerable “One of the best lines The mix of program elements must include both transactional and loyalty drivers designed to complement the customer experience. to me.” I ever heard”, says Steve The honesty of the experience Allmen, “is you can have personalization capability to a in a half dozen or so (seven is what matters. Being reliable the best loyalty program in the whole new level, creating Canada’s seems to be the cutoff point). matters. Acting socially world without points, and you can largest transactional consumer But enrollment figures mask a responsibly matters. But that’s the have the best rewards program in database (estimated to be 12 worrisome trend: active program problem: fewer and fewer people the world without loyalty.” million unique members) for the participation has declined. Few trust businesses to do the right explicit purpose of growing the members are very satisfied with The trust deficit thing. A growing trust deficit lies shopping basket. Expect to see the their experience—finding it too Is true brand loyalty even possible at the heart of the loyalty crisis: “database wars” heat up between hard to earn meaningful rewards, in an age when shoppers are more to overcome it, to win greater Metro, Sobey’s and Loblaws over too frustrating to deal with price sensitive than ever and loyalty—true loyalty—companies the next few years as they battle to customer support, too arduous to lock in shopper loyalty, petrified by redeem their points. And many the specter of Amazon snatching members are only vaguely aware of their customers away. their point balance if at all. Grocers are not the only ones Those unredeemed points fixated on point-based rewards— keep piling up as well, worth as the same mind-set pervades the much as $16 billion according entire retail trade (which operates to one estimate, much to the half of all loyalty programs). A exasperation of Canadian loyalty whole generation of deal-seeking operators. Air Miles alone shoppers has been trained to reported a deferred redemption buy on price while off-price and liability of $245 million in 2016 e-commerce retailers have become (although it normally counts the first default stop on the buying on a historical breakage rate of journey. Cynical shoppers choose to 20%). The urge to reduce that play the loyalty game, knowing their liability led LoyaltyOne, the own dollars are being used to seduce owner of the program, to bring them (“Get 5,000 Bonus Points in a five-year point expiry policy When You Spend $40 or More on in 2016, causing an immediate Almost Anything in the Store!”). public backlash and forcing the Collecting points is certainly company into a quick retreat. This more fun than clipping coupons, shortsighted gambit also provoked which explains why loyalty new government legislation to program memberships in Canada protect loyalty members in future grew 35% last year, according to from arbitrarily losing their points. one study. Almost every Canadian All of that said, the harshest The loyalty program strategy should be connected to a broader customer belongs to at least one program— indictment of reward programs is experience plan which sets out the guiding principles and framework for usually they actively participate this: just 15% of the membership management of the relationship over time. ❱

December 2017

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The word “loyalty” has been tarnished by years of misuse, by avarice, by promotional flimflam. must be more trustworthy. The word “loyalty” has been tarnished by years of misuse, by avarice, by promotional flimflam. A reformation movement is needed—a reinvention of the loyalty model—centered around the customer experience. The obvious starting point is to think beyond discounts and points. It begins by asking the right strategic questions: How do we show appreciation to our best customers? How do we make the enrollment and onboarding experience special? How do we add value to our everyday interactions with customers? How do we guide our customers unobtrusively toward the right decisions based on shared information? How do we take up causes our customers believe in? How do we inspire them through our actions? How do we build community spirit? How do we show authentic gestures of support? How do we help our customer in ways that align with our brand purpose? Most important of all: How do we make it easier for customers to like us? A loyalty strategy will start to take shape from the answers to those questions. That strategy should be a sub-set of a broader customer lifecycle plan, with goals tied to both behavioural indicators of loyalty (such as member retention, year-over-year spending growth and brand participation) as well as attitudinal benchmarks (Net Promoter Score being the most obvious example). The loyalty scorecard should include both program health measures and longitudinal indicators of success such as increased commitment and advocacy. Even a 20% bump in member value can make the investment worthwhile, not to mention the goodwill a program creates amongst its repeat customers, provided it offers them something more than simply dollars off their next purchase. December 2017

Core principles A “next generation” loyalty model must satisfy three distinct time dimensions of the customer experience: “Point-in-Time,” meaning real-time, mobiledriven interactions; “Over Time,” meaning the recognition and appreciation of customers over the full relationship lifecycle; and “All the Time,” meaning the “anywhere, anytime” versatility of the business in supporting the pre-shop, on-premise and post-sale experience. The exact mix of program elements is, of course, dictated by the financial model. But certain operating principles are intrinsic to success. ❯❯ Members should be made to feel special: by offering “behind the scenes” access to events, “front-of-the-line” privileges or invitations to join “advisory panels.” ❯❯ Members should feel recognized: by tailoring communications and offers to individuals based on their relationship history and preferences. ❯❯ Members should feel a sense of belonging: by making it easy to connect with like-minded members who relish sharing stories and experiences as brand loyalists. ❯❯ Members should have fun: by “gamifying” the experience through performance incentives and honourariums and by offering rewards for participatory activities. ❯❯ Members should feel truly rewarded for their efforts: by offering both experiential rewards (unique experiences, unattainable otherwise) and variable currency based on member longevity and value. The best programs today—like Starbucks Rewards, Sephora Beauty Insider, Nike+, MyPanera— incorporate many of these principles

The loyalty program strategy should be connected to a broader customer experience plan which sets out the guiding principles and framework for management of the relationship over time.

and excel at encouraging high levels of engagement. Contests, surveys, mobile apps, social sharing, location-based offers, “daily deal” alerts—all are effective at sustaining interest and participation in the program. But more than that, the best programs make customers feel connected to the brand. The programs become an integral part of the brand experience. They make customers feel valued— important—understood. Small gestures, made often enough, have a disproportionate impact on customer loyalty. When Harry Rosen reminds a high-value customer of an exclusive advance sale and makes it easy in the body of the email announcement to book an appointment directly with a personal “clothing consultant,” the feeling it evokes is appreciation for the ease and convenience, especially when that sales associate responds almost immediately. When Singapore Airlines remembers that special drink a VIP member craves and has it ready for them on take-off, the passenger feels thrilled to fly with them. When members of “Inspire,” the Quebec liquor board program, are notified of limited-run wines and new arrivals which match their taste profile, they are thankful for the courtesy.

The business case for a loyalty program is irrefutable: members will almost always out-spend non-members, due to the regular communication of personalized offers, and show greater affinity for the brand, making them more open to hearing about new products. But the program must be designed to augment the customer experience, not take the place of it. Otherwise customers will become loyal to the program and not the brand (which is the compromise coalition reward sponsors must make). The best loyalty program in the world will never make up for indifferent service or inadequate merchandise. Marketers need to shift the strategic emphasis of loyalty programs from issuing rewards to designing a rewarding experience. At that point, the lines will blur between the membership experience and how customers experience the brand. Companies will have learned to be loyal to their customers just by treating them honestly and fairly—and those customers will be loyal in return. Stephen Shaw is the chief strategy officer of Kenna, a marketing solutions provider specializing in customer experience management. He can be reached via e-mail at ❰

Predictable is magnetic Human brains are hard-wired to be attracted to anything personal. Want proof? Direct mail is proven to drive 64% of recipients online and 47% in store.1 Canada Post Smartmail Marketing can help you zero in on your target and attract more customers. TM

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In the mail This column is sponsored by

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Increase the value of your customers with personalized direct mail Uniprix adds personalized offers to its Christmas catalogue and is delighted with the results By Manon Laberge

Taking on retail giants Uniprix Group is Quebec’s largest group of independent pharmacists. Its members are known for caring about the well-being of their local customers as their friendly neighbourhood pharmacist. The group needs to play smart to compete with mass merchandisers and generate traffic in its stores. Close to customers, in every way Uniprix’s personal approach extends to its advertising campaigns. For the 2014 Holiday period, the company added offers to its Christmas catalogue exclusively for its most loyal Beauty Card program members. Some 20,000 customers were entitled to $5 off with every $20 purchase in store. A $20 discount on any

With Canada Post Personalized Mail, you can adapt your promotional offers to match the value of your customers. ❱

cosmetics purchase of $100 was also offered to more than 85% of these customers, while the rest could save $10 on their cosmetics purchase of $50. Offers adjusted to basket value To ensure the best offer to its loyal customers, Uniprix conducted an RFM analysis. With this method, customers are scored according to the recency (R), the frequency (F) and the monetary (M) value of their purchases. The theory is that the most active buyers are most likely to respond to an offer and the physicality of direct mail can reinforce this behaviour. “Personalized mail is a natural choice for a company that aims to be close to its customers, like ours,” explains Caroline Blazy, relationship and digital marketing manager at Uniprix. “It strengthens the bond with our customers. What’s more, any undeliverable mail helps to keep our mailing lists up to date and the bar codes provide us with important data for future campaigns. “The offers motivated our customers to buy more products and we will fine-tune them further in our upcoming direct mail campaigns,” says Ms. Blazy. To learn more about Canada Post’s direct mail solutions for customer loyalty, go to Manon Laberge is the managing editor of Language Services at Canada Post. December 2017


The Technology Issue ❯❯Call centres 2.0 ❯❯GTACC Awards 2017 ❯❯Machine learning gets approachable

The Technology Issue

Call centres 2.0 AI and real-time analytics represent next-gen tools for success

2 | contact management

Issue 4 • 2017

The Technology Issue By Rajesh Nambiar


n the 1957 movie, The Desk Set, Katherine Hepburn’s character, a reference librarian, fears that a new fangled computer will replace her and her colleagues. Well, 60 years later, replace The Desk Set’s mainframe computer with today’s artificial intelligence and the same unfounded fears abound. Artificial intelligence (AI) is being applied in a range of applications and industries—just about everywhere data-supported decisions need to be made. Considering the amount of data most companies collect on their customers, it should not come as a surprise that call centres are one of the latest applications. And why not? Companies see AI as a way to enhance the functionality of their call centres from “customer service” to “customer engagement” via the newest technology. It’s not just semantics. The difference between “service” and engagement” is huge when vying for loyalty and revenue against an onslaught of competitors. Marketers are realizing that no amount of advertising can effectively compete with the ability of a well-informed customer engagement representative to guide a customer through a product issue or purchase decision. Recognizing they need to refine their strategy, enterprises are turning to data science to transform their businesses into real-time predictive enterprises. Customer service call centres, those all-important nerve centres where thousands of customer interactions happen daily, should be a priority for implementing AI and machine learning systems to allow customer service representatives to respond to customers and prospects in near real-time, powered by analytics from both historic data as well as current data as it flows in. Any enterprise that does not have the ability to sense customer intent, nor the tools to influence and engage in near real-time, will lose customers and prospects as short windows of opportunities close. The technology is not entirely new. Most consumerfacing enterprises have long collected data on customers and even prospects. Predictive analytics and business intelligence have been around for two decades, but these systems have become more affordable now and the element of real-time prediction and contextual intelligence has made it even more valuable for enterprises. AI, machine learning and real-time voice-to-text technologies are the relatively new technologies on the scene—at least in a format that is now accessible for commercial use. At Xavient Information Systems, we offer AMPLIFY, a real-time, AI-powered, speech-to-text transcription and omnichannel customer interaction engine—to enable businesses to achieve positive business outcomes: • For customer service reps, the technology increases productivity, job satisfaction, first time resolution; • For those tasked with client satisfaction and retention, it allows for proactive outreach to dissatisfied customers, reducing churn; • For marketers and sales pros, the technology allows for identifying personalized upsell opportunities; • For the help desk department, it allows for better diagnoses of problems and issues, and more efficiency; and • For smart digital assistants and robots at homes, it provides for real-time updates, chores and assisted living. The best Big Data solutions begin with an ability to capture and aggregate data, including countless threads of Issue 4 • 2017

customer interactions—whether it is chat, tweet, email, voicemails, voice transcripts, payment habits or logs and social feeds—into a single, allencompassing data stream on which companies can mine information to better serve customers. One of the foundations of such systems is real-time, voice-totext transcription and analytics and dynamically driven business processes fine-tuned to drive next best action. Relying on notes is not enough. These systems record customer calls, transcribe them and analyze keyword content in order to determine customer disposition, concerns and sentiment. Consider that typically 60 million hours of conversations are recorded every day in call centres worldwide. Buried beneath these myriad calls lie their customer needs, wants, concerns and issues. But this wealth of information largely remains untapped due to technology constraints and the high cost of infrastructure and software licensing. Obviously, collecting the data isn’t enough. What companies do with it will determine winners and losers in the marketplace. AI and machine learning algorithms are the key. In systems such as Xavient’s AMPLIFY, the more CSR-customer interactions, the smarter the system becomes, improving suggested troubleshooting techniques and even offering alternative or additional products and services where appropriate. We have worked with clients to develop a system in which the machine deep learning analytics algorithms feed recommendation engines capable of delivering real-time coaching to achieve the optimal customer interaction. Some of Xavient’s major clients have successfully deployed AMPLIFY to automate the process of collecting and mining large volumes of digital data from multiple channels/ customer touch points and gaining contextual intelligence to improve operating efficiencies, reduce customer churn and drive up their Net Promoter Scores—a direct indicator of customer experience. One such client is bringing down both CAPEX/OPEX in their call centres, which typically receive more than a million calls per month, while improving customer experience by being predictive and solving

customer issues over the phone, thus reducing the need to send technicians into the field. Call centres usually record about 10-15% of all their customer calls and perform quality assurance on one per cent of those calls due to high cost of voice processing infrastructure. Historically, such systems were prohibitively expensive due to complex infrastructure required for real-time systems, computing, analysis and storage. New technology solves that problem by capturing the full voice of all their customers and acting contextually with “next best” action. These services are available via an on-demand subscription or usage-based utility payment model which costs a fraction of traditional in-house voice infrastructures. We believe companies can differentiate themselves by elevating the experience they offer customers and enhance their profitability through automation and reducing the cost to serve. Just about everything else—even the products sold to consumers—has been commoditized. AI and machine learning platforms can deliver a new level of actionable insights into customer interaction and experience, enabling businesses to not just react to a problem or opportunity, but to seize opportunities and avert threats as the situation is developing in real-time. This solution not only provides the ability to attain precise insight into what is actually happening with a business at any moment, but goes one step further by generating and delivering contextual intelligence to employees on the frontlines, including actionable recommendations while they are interacting with the customer to steer the transaction to a successful outcome, which results in a happier customer, reduced cost to serve and higher customer life-time value and share of wallet. Rajesh Nambiar is senior vice president of North American Sales for Xavient Information Systems (, a leading IT digital solutions integrator headquartered in Simi Valley, Calif. Rajesh can be contacted at and on twitter @rajeshnambiar

contact management | 3

GTACC Awards

From left to right: Carolyn Beatty, VP, direct operations at Sonnet Insurance; Neal Dlin, chief customer obsessed guy at Sonnet Insurance; Elizabeth Sedlacek, director, operations at ContactPoint360; and Asad Mirza, CEO of ContactPoint360.

Sonnet Insurance wins the Service Sustainability and the Customer Centricity Awards By Sarah O’Connor


s Canada’s first fully online home and auto insurance experience, Sonnet Insurance’s mission is to provide Canadians with an easy, transparent and customized way to buy home and auto insurance online. Using sophisticated analytics, modern technology and deep consumer insights, Sonnet offers a simplified quoting and buying process for home and auto insurance that literally takes five minutes or less. After answering a few simple questions, Sonnet customers receive a personalized quote and can purchase their policy online anytime, on any device. While Sonnet offers Canadians the ability to select, manage and change their insurance without having to speak with anyone, when customers do need help Sonnet’s 360-degree view and universal agents allow for a seamless omnichannel experience. With two locations in Toronto and Montreal, their team of licensed insurance Customer Service Heroes offer coast-to-coast support. The teams consist of customer-facing teams (Customer Service Heroes, Team Leaders, Team Managers) and support functions (Workforce Management, Reporting, Training, Quality and Communications) offering full self-serve as well as phone, email, chat and social support with more to come in 2018. All of this flows through a single CRM and all Heroes work in each channel enabling a true seamless omnichannel experience. Sonnet Insurance has earned the 2017 Service Sustainability Award for demonstrating a culture of service counts and strategies to ensure the highest level of

4 | contact management

service is delivered at every interaction. Sonnet has also won the 2017 Customer Centricity Award for delivering an integrated and proactive customer experience strategy backed with demonstrated results of measuring and improving the overall experience regardless of channel in near real time. “You can create some level of consistent service without being customer centric, I suppose, but for us, we built the entire organization around the customer—all of our processes, the technology, all of our hiring, our culture is all based on people who are fundamentally focused on our customers,” explains Neal Dlin. “Our purpose as a company is to change how Canadians feel about insurance. That means we have to change how Canadians feel about customer service, about contact centres. How do we do that? We focused very simply on what were our customers telling us, that’s one of our two key metrics, and we focus on what we call our H.E.R.O.meter.” The H.E.R.O.meter is a proprietary metric of which Dlin can’t share all the details, but essentially it is designed to measure not what an agent said to a customer but how they said it. “It’s nice to be recognized by a group like GTACC,” says Dlin. “It’s recognition from our peers that we’re doing something right and that means a lot to us. We look at what our customers are telling us all the time, we already have that information, but its nice to see that our peers feel like we’re heading in the right direction. The truth is we’re far from ones to rest on our laurels. There’s so much more we haven’t yet done and want to do.”

Issue 4 • 2017

GTACC Awards

GTACC annual conference and awards hosts Heather Arthur and Mike Aoki.

ContactPoint360 wins the Giving Back Award By Sarah O’Connor


ontactPoint360 (CP360) is a growing organization with over 400 employees in four state-of-the-art contact centres—two in Ontario, one in Quebec and one in South America. CP360 delivers customized solutions that fit their clients’ business model while improving efficiency, customer satisfaction and retention. Their solutions include retention programs, customer service, back office processing, telemarketing and sales, sales support, collection management, fundraising, customer surveys and analytical support. The Giving Back Award recognizes contact centres that put their time, energy and heart into giving back to their communities. It can be as small as a bake sale in the cafeteria to organizing a centre-wide CN Tower climb. CP360 was selected as this year’s winner for enabling employee-driven giving back campaigns across a wide spectrum anchored by a corporate culture of giving back. CP360 dedicates a portion of all revenue to their AQLA Foundation, which supports community involvement and donations which are at the heart and soul of CP360. This is a private foundation named after the mother of the founders, Aqla Mirza. This foundation operates with a global outreach supporting people and families in crisis to help them through difficult circumstances. CP360 CEO Asad Mirza credits his mother, who passed away due to breast cancer 15 years ago, with settling a strong example of giving back. “She was very involved in her community, helping the neighbours out,” recalls Asad fondly. “She never said no to anybody.” Because of her

Issue 4 • 2017

example Asad and his brother decided that a portion of all revenue would go back to their community. Over the past several years, CP360 has contributed above and beyond to annual food drives in their communities, including volunteering employees’ time. The company is also proud to participate and donate gifts to Holland Bloorview Kids Rehab Hospital, volunteer time and gifts for St. Marcellinus Secondary School in Mississauga in order to help 10 underprivileged families and time and money to Cathedral Church in St. Catharines, assisting in serving food to the less fortunate. “Our employees are proud to serve our community and are willing to spend time outside of their work commitment to help those in need,” says Elizabeth Sedlacek, director, operations at CP360. “In 2015, we sent a team with equipment and medical supplies to Asia providing a free eye exam and medical treatment to thousands of underprivileged people and children. We feel so blessed to be fortunate enough to help those in our world who are less fortunate.” “Thank you, thank you so much, this means a lot to us,” said Asad in response to this recognition from GTACC. “I’m committing more than ever before to give back to our community.”

contact management | 5

The Technology Issue

Machine learning gets approachable By Holly Simmons


rganizations are finally cutting through the hype and adopting artificial intelligence, machine learning in particular. According to The Global CIO Point of View, nearly nine out of 10 CIOs already use machine-learning technology or have plans to adopt it. Investments will double in the next three years as leading organizations turn to advancements in machine learning to drive faster, more accurate decisions that fuel digital transformation. A shortage of talent has hindered adoption. Building practical applications of machine learning has required highly skilled data scientists. Recent analysis shows that the demand for data scientists outweighs the supply. In fact, 47% of CIOs reported that they lack the budget to hire or train employees with new skill sets. How can organizations realize the benefits without incurring the high costs?

The customer service case for machine learning One area of the business that is ideal for employing machine learning to boost efficiency is customer service where, according to Accenture, agents spend as much as 12% of their time manually categorizing customer service requests. Manual categorization, prioritization and assignment leads to human error as well as long customer wait times. Machine learning also benefits customers directly by simplifying categorizing when they make service requests. By routing cases automatically via a system employing machine learning, each request can be analyzed more quickly and sent to the correct area for resolution. 6 | contact management

Additionally, machine learning helps to reduce escalations that occur as a result of improper case classification. The beauty of this approach is that agents can spend less time on tedious repetitive functions freeing up their time to focus on delivering greater value to their customers. The results are faster resolution times, lower costs, more satisfied agents and happier customers. At ServiceNow we have deployed machine learning in our own customer service centre, which handles 13,000 incidents per month. In two months, we saved more than 315 hours.

Reducing the adoption hurdles Why is machine learning now a more approachable reality? In the past, use of machine learning required an army of data scientists, deep familiarity with your customer data and great expense to make it successful. Now new solutions exist that incorporate machine learning into a platform off the shelf ready for simple implementation. With the machine learning models baked

into the product itself, you can take advantage of a system that adapts to your needs without the costly use of hiring or training an in-house data scientist. Such a system can help categorize requests in near real time, refining its accuracy as it is exposed to more examples. It can eliminate the bottleneck of support agents having to manually deal with each request or forcing the customer to choose an option from a long list to classify their need. The end result is more efficient use of time for customer service agents and increased customer satisfaction. Machine learning is paving the way for more efficient business operations but it doesn’t require an expensive investment in talent to reap the benefits. The results can also pave the way for other machine learning initiatives throughout the organization to further improve processes and the bottom line. Holly Simmons is senior director of product marketing at ServiceNow.

Issue 4 • 2017

The Consultant’s Corner

Head in the Cloud? Here’s some dating advice for you By Emily Nielsen


ometimes a woman may lie about her age to initially attract a man. And sometimes a man may inflate his job title to initially attract a woman. And similarly, a salesman pitching Cloud services may sometimes say things just to initially attract you. He may say things about what his Cloud service can do while skirting around what it cannot do. Being able to expose these shortcomings sooner rather then later is like the difference between finding your soulmate or getting married to a stranger in Las Vegas. And marrying a stranger—someone who isn’t your ideal match—would be disastrous. So then, if you’re serious about finding the right match for your organization, then consider me your Cloud-service match-maker. Here are three simple things you can do to see through the seduction:

1. Uncovering reality: Kraft Dinner and bingewatching Netflix Perhaps you’ve dated someone who claimed they love to cook; however, upon getting to know them better, you discovered all that they could cook was Kraft Dinner. Or perhaps you’ve dated someone who described themselves as “active”; however, soon after you realized that the only thing they actively did was binge-watch Netflix. This annoying phenomenon isn’t exclusive to dating. It’s alive and well in the world of choosing the right Cloud provider. So, to get to the bottom of what your Cloud service does and does not do, request a trial! After all, in the Age of Cloud, when all the hardware is in the Cloud, it should be relatively easy to trial their services. Right? So, if you propose this idea to a potential Cloud provider, they should take you up on the offer. If they advise you that a trial isn’t necessary, I’d consider that a warning sign. Ask for a trial. Start playing with their product. Try the features. View their training material. Test their support. Discover for yourself, firsthand, if there are any drastic discrepancies between what they say they can do and what they actually do.

2. How to avoid a major marriage mismatch Okay, you’re looking for a spouse to spend the rest of your life with. If you’re doing that, you would (I hope) carefully consider not only who that person is, but what their plans for the future are. Where do they see themselves in two, five or 10 years’ time? Do they want to live in the city or the country? Do they want to buy a house or rent an apartment? Do they want a career or to stay at home? Kids or no kids? In short, much like in marriage, you should figure out if you and your Cloud-provider are heading in the same Issue 4 • 2017

direction (regarding their features, functionality and support). To do that, the first thing you’ve got to do is begin dialing in your vision because you can’t make sound decisions without a clear sense of direction. What’s your organization’s long-term vision? And what’s your contact centre’s plan to make this a reality? Second, get your vendor to share their vision. They should be able to paint a clear picture of where they are going with their service. If they can’t articulate this and have no documentation to substantiate their claims then consider this is another warning sign! Third, if they have a vision, begin comparing it to yours. Ask yourself: How does it align with your organization’s vision? How does it compare to your contact centre’s plan? Ultimately, are the things that are important to you on their list? If not, now is the time to run for the hills!

3. Do this if you’re serious about marriage If you’re serious about “marrying” (partnering with) a vendor then you must call on and talk to their reference accounts. And I mean REALLY talk to their references. I’m not talking about calling references for the sake of calling references just to get a glowing recommendation. Here I’m talking about asking meaningful questions. Well thoughtout questions that serve a practical purpose. After all, their references may indicate that they’re a great “date”—a wonderful company and product. But, is the vendor’s solution the one that’s right for you? Before you call a vendor’s references, I recommend developing a list of questions. This list should be composed of questions and concerns coming from two sides of your organization. From one side, gather questions

coming from your business units. These questions should be aimed at uncovering and developing your business use cases. For example, these units may have questions like, “How easy is it to pull reports from the software?” and “Was X, Y, Z wizbang feature worth the investment?” etc. The point here is to ask questions that uncover the things which are meaningful to your business. The next line of questions should be developed by your IT department. They may be questions such as, “How much time and effort did it take to get the solution up and running?” and “What technical difficulties did you have?” and “In what ways does the vendor help you support the system?” and so on.

Seeing through a seduction in three steps In summary, if you’re serious about finding the right match for your organization and contact centre, then carefully consider and closely follow through on my match-making advice. In a nutshell, here’s my three-step summary: 1. Confirm their features and functionality by requesting a trial. 2. Validate their vision and then compare it against yours. 3. REALLY talk to their references. By doing these three things you’ll discover who you’re really going to partner with and whether that partnership will stand the test of time or not. Emily Nielsen launched Nielsen IT Consulting in 1999, a consulting firm focused on helping organizations achieve breakthrough results using contact centre and unified communication technologies. If you’d like such rewarding results you’re encouraged to contact Emily at or by calling 519-473-5373.

contact management | 7

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Excellent Execution

Marketing in a world of fragmented media Five ways data analytics companies and ad agencies can work together to connect with consumers By Paul Evans


Paul Evans is executive vice president and chief strategy officer at Environics Analytics.

wo decades ago, the notion of targeting messages across media channels using analytics was a marketer’s dream. But the cost of execution outweighed the return on investment. Advances in technology now make this a relatively simple, low-cost exercise that suits most business models. Despite this, some campaigns still fail to live up to expectations. Why? In a word: execution. While most marketers have all the tools they need, they often stumble when they don’t take the time to develop an in-depth understanding of their customers, enabling them to deliver a more personalized experience. Instead, agencies often tailor their messaging based on algorithms and click behaviour, without segmenting customers into distinctive target groups to maximize the effectiveness of their messaging. So what can advertisers and their agencies do to make efficient and effective use of their media spend? Here are five ways analytics and agencies can help each other. 1. Involve analytics early Data analytics firms, creative agencies and media planners each play unique but complementary roles. Analytics companies help bring the audience into focus through client-centric segmentation. Creative agencies personalize the message based on those segments. And media planners help deliver that message to the channels that are most closely aligned with those segments. But putting these roles into silos prevents the freeflow of information and makes it difficult to execute a customer-centric model: from audience selection to execution, measurement and adjustment. The most effective campaigns are the ones in which all analytics, creative agencies and media planners work together throughout the life of a campaign. 2. Data analytics companies and ad agencies need to get together Data analytics companies and agencies often use surveys to collect their own data on consumer behaviours, but because this information isn’t standardized, analysts and account reps struggle to reconcile the two data sets. The data analytics companies responsible for building customer-centric segmentation need to make execution easier in an omnichannel world. What does that mean? It means that segmentation needs to be available as a selection across the different media execution channels. For example, using the PRIZM5 segmentation system which classifies Canadians into 68 lifestyle types, marketers should be able to select segments 01 (Cosmopolitan Elite), 04 (Suburban Success) and 05 (Asian Sophisticates) across the mobile bid stream to target those who your


clients have determined as their core customer. Once everyone is on the same page, they’ll be able to work together to use a common segmentation system across their assets. 3. Let analytics guide the creative Analytics doesn’t impede the creative process, it enhances it. Knowing your audience can help you create a better campaign because it gives the creative team direction. Once the creative team is able to focus on a segment, it can devise a campaign that is more likely to resonate with a target audience. Developing customer-centric segmentations breathes life into these segments. A segmentation-based persona would describe the target consumers using demographics, lifestyles, social values, marketplace preferences and digital behaviours such as social media preferences. 4. Consumers are getting smarter—engage them differently The days of targeting males ages 25 to 55 are a thing of the past. The market isn’t homogenous—it never was. Marketers need to be able to craft targeted messaging across many channels to be successful. Today’s audience defines itself by who they are, how they think and how they act. Marketers need to think in those terms, too. The traditional tools media agencies have long relied on are ill suited to fully answer these questions to select their audience. Media companies embracing third-party data and incorporating them into their media platforms to develop a more complete view of their target segments are getting better results. 5. Choose the right message for the right medium Attribution continues to be a major challenge across marketing channels. Getting the right marketing mix for both digital and offline channels, as well as understanding how earned and paid activity are helping to create new customer opportunities remains key. Marketers need to understand the customer journey and how the mix of the media channel serves that goal. For example, a new car launch might have three components: awareness, engagement and conversion to a lead. Each component of the campaign should have clearly defined key performance indicators that should be matched to the customer journey and what the expected behaviour should be. If companies don’t have the data expertise to track these indicators across the various media channels, then a trusted third-party company can help complete the picture. This challenge will only become bigger as digital spend (digital video and mobile) is expected to grow by 50% plus to well over $3 billion by 2019, according to a recent forecast by Zenith. Let’s hope that analytics companies, creative agencies and media planners are up to the challenge and work together. December 2017

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Direct Marketing Magazine December 2017  
Direct Marketing Magazine December 2017