Dunnhumby digital challenge

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SummitUp The Digital Challenge January 7, 2014


The Digital Challenge With all the tools, technology, and tactics, how do you keep the customer at the center? 2

Š dunnhumby 2013 | Confidential


dunnhumby’s Context

24 Years … 28 Countries … 1,000s of Clients 400,000,000 Customers … All Media Channels 3

© dunnhumby 2013 | Confidential


The Customer

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Š dunnhumby 2013 | Confidential


Customer = CMO

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Š dunnhumby 2013 | Confidential


You Have to Earn It

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Š dunnhumby 2013 | Confidential


Rewards Worth Earning Current Sales Potential Sales Customer Advocacy 7

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Relevance Wins

Campaign Events 8

Š dunnhumby 2013 | Confidential


Or ‌

Source: The Times 19 Jan 05


Unaware, Unconcerned, Unable

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Š dunnhumby 2013 | Confidential


Digital Danger

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Š dunnhumby 2013 | Confidential


“Last year, the nation's top 100 retailers by e-commerce revenue sent recipients an average of 177 emails apiece, up 87% from 2007.” [and up 24% vs. last year]

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WSJ / Responsys Inc., WSJ March 12, 2012; “Stores Smarten Up Amid Spam Flood” © dunnhumby 2013 | Source: Confidential


“More than 500 Emails apiece” 13

© dunnhumby 2013 | Confidential


Deleted, Detested, Delisted 14

Š dunnhumby 2013 | Confidential


Customer Reaction to Retailers’ Emails

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National average

2011

2012

% Chg.

Email open rate

17.1%

21.3%

+25%

Click through rate

3.1%

3.8

+23%

Source: / Harte © dunnhumby 2013 | WSJ Confidential

Hanks Inc., WSJ March 12, 2012; “Stores Smarten Up Amid Spam Flood”


49% of unsubscribers from permission emails: Content was repetitive or boring over time

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22% of US Internet users stopped buying from a company:

too many or irrelevant emails 1 - ExactTarget "The Social Break-Up" 2 - CMO Council / InfoPrint Solutions 16

Š dunnhumby 2013 | Confidential

2


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It doesn’t have to be that way Purchase behavior driven via targeted email contacts 60% 50% 40% Response Rate

30% Email

20% 10% 0% 1st

2nd

3rd

4th

5th

Number of Emails Received

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Š dunnhumby 2013 | Confidential

6th


If your digital marketing is relevant, more contact can improve perceptions

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Š dunnhumby 2013 | Confidential

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What are “they” doing wrong… and why? 19

© dunnhumby 2013 | Confidential


Big Data, Small Thinking

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Š dunnhumby 2013 | Confidential


Wrong Data and Insights

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Š dunnhumby 2013 | Confidential


Inputs, Not Outcomes

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Š dunnhumby 2013 | Confidential


Wrong Channel

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Wrong Rewards

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Exactly right for each customer all the time 25

Š dunnhumby 2013 | Confidential


Ensure that each element of the program is relevant to customers

Right Consumer

•  Loyal vs. Non-Loyal •  Target based on purchase behavior

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with the

Right Message

•  Content •  Occasion •  Offer

© dunnhumby 2013 | Confidential

using the

Right Vehicle

•  Direct Marketing •  Email / Digital •  CRM •  TV / Mass

at the

Right Time

with the

•  Daypart/Week •  Path to Purchase •  Seasonality

Right Results

•  Test vs. Control •  Measure incrementality


Digital Coupon Relevancy

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Š dunnhumby 2013 | Confidential


Better Approach Yields Better Results Multi-Brand CPG CRM Multi-Cell Test

112%

Sales Uplift vs. Control

Factor

Lagging

Leading

Target

Demos

Purchase

Activation

One-off

Ongoing

Measure

Redemption

Sales

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Š dunnhumby 2013 | Confidential

8% Lagging

Leading

14X Greater Sales Lift


On-line Advertising: Purchase-Based Targeting Makes it More Effective +163%

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Š dunnhumby 2013 | Confidential

+121%

+28%


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© dunnhumby 2013 | Confidential

W 18-49

W 18-49

M 18-34

A 25-54

W 18-49

W 18-34

W 25-54

W18-44

TV advertising – ROI among each Brand’s unique purchase-based target exceeds demographic


Customer-centric Digital Marketing 1.  Culture: Earn customers’ lifetime value 2.  Customer first – not brand, not store 3.  Leverage shopping, media, context insights 4.  Content that delights and excites 5.  Media that reaches and engages 6.  Measure incremental sales and advocacy 31

© dunnhumby 2013 | Confidential


Thank you allen.mason@us.dunnhumby.com @allenrmason

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Š dunnhumby 2013 | Confidential


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Digital Campaigns Loyal Customer Mailing

Themed Event

Solo

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