Posted by Ajay Kelkar on Wed, Feb 03, 2010
Credit card retail spend data is also so valuable for Retail merchants but I do not see any concentrated initiative from any bank in India to use this data as a strategic differentiator.
Already credit card as a % of total sales would be 50% or more, for at least the department store category of Retailers. If I were a Retailer, I could use this information to profile my regular customer base far better-they may not be loyalty program members, it’s just that their credit card number tells us that they are repeat customers for the retailer.
So clearly there is an opportunity for Indian banks to provide retailers more insight and on the back of that build larger spends and revolves on their cards with that merchant establishment. American Express has traditionally been good at this. Only a few months after American Express announced its Business Insights solution for consumer data analytics and consulting, MasterCard Advisors has now launched “Merchants Solutions”, their response to the growing number of payment services companies that offer data on their customer’s purchases to marketers.
Read more about this at
http://www.dmnews.com/amexs-new-division-displays-value-of-data/article/159487/
Posted by Ajay Kelkar on Mon, Feb 01, 2010
I have always believed that banks can do much more with the consumer data that they have without sacrificing any consumer privacy guidelines. Imagine the power of Debit & Credit card retail spends information.
Here is an interesting initiative from Citibank called Bundle. It showcases proprietary data, sourced from Citibank's massive card-spending warehouse.
The site is based completely on spend data, showing household spending personalized to your specific location. There's also professional personal finance advice mixed with stories and comment from the community. Even the articles use the database to illustrate points.
Imagine the power of Analytics in driving this business model forward. In India it would be interesting to see a bank use its large Debit card base to build an application like this.
Have a look at this application at:
http://www.bundle.com/
Jim Bruene at Netbanker has some very good analysis on this(in his words):
If they want to attract data junkies like myself, the data needs to be more transparent and they need more robust tools to play with it. I enjoyed being able to compare the spending of my Seattle neighbors against that of my home town in Iowa (it's surprisingly similar). But I was left with a number of questions:
* Where does the spending data come from? The FAQs are vague on saying that it comes from Citibank card data, government sources and "other third parties."
* If its primarily Citibank card data, is it really representative of the entire town or just the people that hold Citibank cards? For example, Bundle tells me (screenshot #3), that the average dining out expense in Seattle is $115 and the most common spot is Starbucks followed by McDonalds. Something seems wrong with that.
* And furthermore, are these estimates of all spending or just that on Citibank cards? And which Citi portfolios are included? What about business cards?
Check out Jim’s comments at
http://www.netbanker.com/topics.htm
Posted by Ajay Kelkar on Mon, Jan 25, 2010
Ten months ago, Frank Eliason , whose official title is director of digital care, Comcast came up with the idea of using Twitter to interact with customers of Comcast (CMCSA), the mammoth provider of cable TV, Internet, and phone services for whom he has worked for a year and a half.
Eliason discovered that by doing a search for the word "Comcast" (and occasionally "Comcrap"), he could find tweeters who just happened to mention service complaints he could address. In December 2008, he celebrated the handling of his 22,000th tweet.
Read more about this fascinating use of Twitter for Customer service!
While I would not recommend the use of this strategy for everyone, simply because it invites genuine and “not so genuine” customers and may in fact create a backlash for the brand if not managed correctly. In fact the controversies that Shashi Tharoor generates out of his tweeting may just be a new ploy for driving PR!
However, I do believe that this may be a great way for companies to build a personal relationship with their consumers. If done correctly it has the power of enlisting communities to participate in the creation of a customer service.
Customers look for genuine help even when they interact with companies and remember the best customer service representatives are those who bring that sense of “she is doing this for me” into their professional work!
Here is an interesting comment from Frank on his blog:
What else have we learned? Customers, just like most Customer Service agents, are craving real time, unedited information. If something is wrong they really want to know what it is, what is being done and when it will be back. We are working to create that environment at Comcast.
Read more at Frank’s blog
Posted by Ajay Kelkar on Sun, Jan 24, 2010
The
term closed-loop marketing has been around for decades. The huge increase in marketing
channels adds complexity to the challenge of delivering relevant messages to
customers and prospects. Put very simply Closed-loop Marketing (CLM) is
interactive marketing where customer responses and behaviour are employed to
direct and refine marketing strategy and tactics.
There
is a "closed loop" where collected customer data and behaviour is
used to build a profile of customers - profiles that provide the basis for
further marketing initiatives. Typically, the recipient profile is adjusted by
responses to the campaign and the campaign is adjusted to the recipient profile
- there is a feedback loop.
Companies
are constantly creating interactions with their customers. A lot of these
interactions are outbound interactions initiated by Marketing. A Retailer may
advertise an end of the year sale in media and also use some other channels
like email and direct mail to invite specific segments of customers to their
stores. Marketers do not need sophisticated technology to start measuring the
results of each marketing action. Yes there would be no perfect answers. But
the important thing is to start creating this “accountable marketing” philosophy.
Increasingly,
organizations are using customer data and behavior to direct and refine
marketing strategy and tactics, creating a closed-loop system between their
marketing message and their customers that continuously evolves.
According
to a recent report from Aberdeen, "The CMO Strategic Agenda: Automating
Closed-Loop Marketing," 88 percent of best-in-class companies have adopted
this full-circle or "closed-loop" marketing approach, and they have
procured technology to help automate the process.
You can read about this here:Automating Closed Loop Marketing
However we believe that Closed
loop marketing is wrongly sold as a technology problem. Many IT companies
almost seem to be sayings that automate marketing and you will accomplish
Closed loop marketing-almost magically. Closed loop marketing is also wrongly perceived
to be purely an Online kind of approach where you integrate all aspects of your
internet marketing into a closed loop.
The
real problem is that Marketers need to examine if they are process and ROI
focussed. Do they measure how each leg of their marketing campaign is
delivering value ? How does the sms,internet, DM and Advertising medium work
together? Are you attracting a different profile of customers from these
different channels? Are consumers primarily multi channel? Are you using Analytics to figure out the ROI on your Marketing investments.
Our perspective at Cequity is that
companies must build appropriate marketing processes ahead of automation-only
then can Marketing automation give you results.
Posted by Ajay Kelkar on Sat, Jan 16, 2010
IBM did a study across CIO’s of over 2500 CIOs in 78 countries
and across 19 industries. The objective
was to understand how can today’s CIO make the biggest impact on behalf of the
entire organisation? Largely CIO’s spoke about what they are doing to achieve
three primary goals: to make innovation real, raise the ROI of IT and expand
business impact.
The findings really struck me, as the key message pointed
to exactly the type of problems we at Cequity, help organizations tackle every
day.
A few important points from the survey(as quoted from the
findings):
- When asked to
identify their visionary plans for enhancing their enterprises’
competitiveness, business intelligence and analytics was the top answer,
selected by 83 percent of our sample. A Media and Entertainment CIO in
Belgium told us better business intelligence will “bring marketing
analysis to a higher level, to improve buying behaviour and increase
advertising ROI. Many others agreed that they seek information-led
innovation based on information as an asset. “Facts drive decisions,” said
an Insurance CIO. “Plans for imbedded analytics need to enable data
capture at the customer touch point.”
- CIOs have
typically made data collection a top priority. Yet even when data exists,
no CIO can take its availability for granted. Just 67 percent of High-growth
CIOs said data is readily available for relevant users, versus 51 percent
of Low-growth CIOs. “The benefits of making information available are
beyond comprehension,” an Education CIO in Saudi Arabia told us. Many CIOs
admitted that their users can’t always access the information they need in
a timely manner. A Government CIO in the United States noted:“Data is
readily available to users, but it’s tough to find if you’re a novice”.
- Some of the key
findings of the India PoV of the CIO study 2009 are: 70 per cent of Indian
CIOs are integrating business and technology to promote innovation for the
entire organisation as compared to 47 per cent of global CIOs; and 64 per
cent Indian CIOs proactively push IT as an innovation element compared to
55 per cent of global CIOs.
- One key area
where global CIOs rank ahead of Indian CIOs is around proactively crafting data into actionable information.
However, this is also an area which both global and Indian CIOs have
ranked as number one for their visionary plans for future.
Some thoughts basis this:
1.
Analytics is often spoken about as a strategic
area. But what are the elements required to really embed analytics into the corporate
strategy. I think you need the following:
a)
huge
mindset towards data based decisioning from top-typically CEO
b)
Aggressive CFO questioning marketing spends
c)
Strategic CTO/CIO who creates the enabling environment
d)
Most
importantly you need a passionate evangelizer-in either marketing, finance or
customer operations. Typically a senior person in these functions who
passionately believes in data led decision making
e) Data is there but is awfully difficult to put
together for analytics. Smart companies are able to create “Data capability” by
bringing disparate data streams together –first manually and eventually into a
datawarehouse
Posted by Ajay Kelkar on Fri, Jan 01, 2010
Retail, Telecom, Banks and many other businesses are
interacting with their customers almost on a 24x7 basis! That is producing a
huge amount of data from which “insight” is often hard to extract. But the more
significant challenge is actually communicating the very “actionable insight”
that a Customer Intelligence function produces to key stakeholders across the
company! Emails tend to be often ignored and with the barrage of meetings that most executives are subjected to, analysts must look for creative solutions to the communication problem!
Why is this critical? The adoption of analytics in an enterprise is directly proportional to the ability of an Analyst to communicate in a concise fashion to key decision makers across the company in a way that improves" evidence based decision making" in the company!
Jaulie Katz from Forrester has this this interesting comment- "only about half of the Customer Intelligence professionals at the firms we
surveyed use a dashboard or scorecard to communicate their successes across the
enterprise. We also find that those firms that have implemented a dashboard are
included in more elements of strategic planning than those who don't."
At Cequity we believe that the change management across the enterprise as a result of Analytics is fundamental to delivering the holy grail of "ROI due to analytics". And for this to happen it is absolutely imperative for the Customer Intelligence team to communicate effectively across the company.
Posted by Ajay Kelkar on Fri, Jan 01, 2010
Loyalty is such a misused concept today! You see loyalty programs
of all shapes & sizes! In many cases , the marketer is happy treating the
program as a “reward program” and not worrying too much about long term
loyalty! But often marketers make the cardinal mistake of treating a loyalty
program as a onetime marketing effort and not as a “living & breathing”
program.
Without constant thinking and effective execution a loyalty program is
just not worth it’s while. The other large challenge is that Loyalty program
marketers must look closely at the data they are producing and constantly
evaluate the customer behaviour to make the program work! Loyalty analytics is
the key to improving the construct of your program!
Roger Dooley writes and speaks about marketing, and in
particular the use of neuroscience and behavioral research to make advertising,
marketing, and products better. Here are some very interesting thoughts from
Roger on loyalty programs:
So what do rats have to do with loyalty programs? Well, back in
the 1930s, researchers made an interesting discovery: rats running a maze to
reach food ran faster as they got closer to the food. This finding led to the
“goal gradient hypothesis,” which states that the tendency to approach a goal
increases with proximity to the goal. Simply put, the closer the goal, the more
effort you expend to get there.
So what does this have with loyalty programs? A few years ago,
Columbia University researchers examined the goal gradient hypothesis using
unwitting human subjects, and found that people behave a lot like rats. Give
them a coffee punch card that rewards them with a free coffee when full, and
they will drink coffee more frequently as they approach a fully stamped card.
Here are four of the major findings in that study:
(1) participants in a real café reward program purchase coffee
more frequently the closer they are to earning a free coffee;
(2) Internet users who rate songs in return for reward
certificates visit the rating Web site more often, rate more songs per visit,
and persist longer in the rating effort as they approach the reward goal;
(3) the illusion of progress toward the goal induces purchase
acceleration (e.g., customers who receive a 12-stamp coffee card with 2
preexisting “bonus” stamps complete the 10 required purchases faster than
customers who receive a “regular” 10-stamp card);
(4) a stronger tendency to accelerate toward the goal predicts
greater retention and faster reengagement in the program.
[From The Goal-Gradient Hypothesis Resurrected: Purchase
Acceleration, Illusionary Goal Progress, and Customer Retention by Ran Kivetz,
Oleg Urminsky, and Yuhuang Zheng.]
Read
more of Roger’s thoughts at:
http://www.neurosciencemarketing.com/blog/articles/loyalty-programs-of-rats-and-men.htm#comments
Posted by Ajay Kelkar on Sun, Dec 27, 2009
It is amazing how much direct mail gets produced every
year. A lot of it is junk mail and goes straight to the dustbin, sometimes even
before opening! U.S. households received 3.8 billion credit card offers in 2008.
And at the same time, every bank ,utility & in some cases
even telecom companies are sending out billing statements? These statements are
“always read” and always have the customer's attention.
Why then should Marketers not send something more valuable?
Banks, utilities, retailers and credit card providers are among the companies
discovering the communications value that previously had gone untouched in
their statements. This is being commonly referred to as trans-promo
communications. The trend is towards merging transaction and promotional content
into one document, and delivering it via print or electronic channels. Marketers
who have successfully used variable messaging in direct mail are waking up to the
value of adding personalized communication to high-value transaction
statements.
Infotrends Inc has an interesting take on this : Transaction
documents are vital links between critical business processes and desired
outcomes. They fuel the transfer of funds and ensure cash flow. Invoices and
statements are the ultimate “mission-critical” documents. As such, they are
among the few types of mail that are almost always read. Organizations are
investigating new and more efficient means of producing and distributing these
documents, and this has resulted in the so-called “transpromotional” category,
which combines direct mail and transactional documents. The adoption of
“transpromotional” documents could transform the existing document landscape.
It would be interesting to see how marketers are able to
combine Direct marketing ,Analytics & technology to provide solutions in
this space.
Posted by Ajay Kelkar on Sun, Dec 13, 2009
If you were to quantify the time spent by CMO’s , you would find that Communication issues still top the list.
CMOs have always intensely thought about their brands and the emotional connection that they create with their customers. But more needs to be done about actually building value for the customer at each interaction and that means the CMO necessarily has to be the customer advocate within the corporation. Most times this is not a popular role to be playing and often it is not the easiest or the best way to actually “build a career”.
Dave Frankland , a principal analyst at Forrester makes this interesting point about those few companies which have been able to use Customer intelligence as a strategic differentiator. Dave asks about “What defines these leading firms?
They treat customer data as a strategic asset, put the customer at the center of all decision making and use data-driven insight to tailor all customer communications. It sounds simple, but can you name five companies that do it?
Dave’s research shows that fewer than 15% of firms have a strategic customer-intelligence operation. These firms leverage customer intelligence broadly throughout the organization, they value customer knowledge as a corporate asset and they frequently have an evangelist in the C-suite. They continually demonstrate that customer intelligence drives overall business growth.
Key questions that come to my mind are:
1. It is no point doing analytics on customer data if you do not have the right organization structure that converts that “insight into action”.You need a passionate analytics evangelist who forces the pace on decision making based on "insight".
2. How many Marketers do you know who would risk putting their career at risk by being customer advocates internally?
Posted by Ajay Kelkar on Sun, Dec 06, 2009
The total load of junk email,
sms and snail mail that hits me is huge and increasing rapidly! And still I do
not see as much adoption of “relevance” in marketing communication. For example
when I go to my bank and give a “change of address” request it should
automatically trigger a small booklet of “special offers” for using my bank
credit & debit card in this new pin code! Mostly this does not happen
because creating highly “relevant marketing programs” involves significantly
more effort as compared to the vanilla “spray & pray” marketing efforts
that are so effortlessly being created. Also most CMO’s seem to believe that
this will cost more-though, no one has in my experience really established the
trade off between “higher response” and also same cost if one is using “digital
channels”.
In the past maybe cost could
have been a reason-because offset printing was so much more cost effective. But
today both the penetration of email is increasing and also digital printing is
for some volume runs catching up with offset.
On another note, Marketers
often ask for advice on marketing solutions given that a large set of customers
are opting in for the “Do not call list”. At one level this is completely
connected to the “spray & pray” type of marketing programs. Bringing more
“relevance” into marketing will definitely allow more customers to interact
with the communication they get from their banks, telecom companies &
retailers.
Recent studies find that a
third of Web merchants failed to send any e-mail to new subscribers within 30
days of sign-up. And 60% didn't send “welcome” e-mails to new registrants,
according to deliverability firm Return Path.
Once behaviourally triggered
e-mails are set up, they're automatic. They don't have to be all that
complicated. And by all accounts, they work like gangbusters.
http://multichannelmerchant.com/ecommerce/0201-behaviorally-triggered-emails/
I found this interesting
insight from Carole-Ann Matignon’s post and here is what she says :
Customers are
more mobile and more willing to move to competitors' products than at every
before and, thanks to the growth of the Internet, more able to do so easily.
Customers have access to more information about companies and their products
and are able to pick and choose what to read, watch or believe. Companies are
more complex these days - gone is the vertically integrated company and in its
place has grown the outsourced, distributed company. With more "moving
parts", more third parties, more channels companies are struggling to
deliver consistency yet increased regulation and more demanding customers make
this consistency more essential than ever. The article's solution to this
dilemma is"targeted marketing that is consistent and integrated across all
channels"
Now I don't have a particular issue with this, indeed this is
clearly part of the solution. I think it understates the problem though and I
think a better solution is maybe something like this:
Precise and timely customer treatments that are consistent
across all channels
Read more about this at:
http://www.edmblog.com/weblog/2006/11/heres_a_way_to_.html