B2B Online - Ronald Velten - IBM

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Ronald VeltenDirector Marketing, Communication & Citizenship

Thursday April 07th 2011Bringing Science to the Art of Marketing

There are 1Bn transistors per human each costing 1/10 millionth of a cent.2

2First, our world is becoming instrumented.

The transistor, invented 60 years ago, is the basic building block of the digital age. Now, consider a world in which there are a billion transistors per human, each one costing one ten-millionth of a cent. Well have that by 2010.

There will likely be 4 billion mobile phone subscribers by the end of this yearand 30 billion Radio Frequency Identification tags produced globally within two years. Sensors are being embedded across entire ecosystems supply-chains, healthcare networks, cities even natural systems like rivers.

Source: IBMs Global Technology Outlook

3In 2005 there were 1.3Bn RFID tags in circulation. Today there are 30Bn !

3Source: In-Stat, an Arizona-based market research firm.

4There will be more than 5 billion mobile phone subscriptions worldwide by the end of 2010.

4Source: International Telecommunication Union.

*One billion camera phones in 2007, according to Gartner.**3G devices growing 30% annually according to RNCOS.

5Mobile Internet users reached450 million in 2009, expected to more than double by 2013



6Combined spending on consumer and business mobile applications will top $25 billion worldwide by 2014



An estimated 2 billion people are on the web and a trillion connected objects cars, appliances, cameras, roadways, pipelines comprising the "Internet of Things."7

7Second, our world is becoming interconnected.

Very soon there will be 2 billion people on the Internet. But in an instrumented world, systems and objects can now speak to one another, too. Think about the prospect of a trillion connected and intelligent things cars, appliances, cameras, roadways, pipelines even pharmaceuticals and livestock. The amount of information produced by the interaction of all those things will be unprecedented.

Third, all things are becoming intelligent.

New computing models can handle the proliferation of end-user devices, sensors and actuators and connect them with backend systems. Combined with advanced analytics, those supercomputers can turn mountains of data into intelligence that can be translated into action, making our systems, processes and infrastructures more efficient, more productive and responsive in a word, smarter.

*2 billion people on the Web by 2011, according to the Computer Industry Almanac.**A trillion connected objects, according to "From Autonomous to Cooperative," ERCIM Workshop on eMobility.

Our world is becoming INSTRUMENTED

We now have the ability to measure, sense and see the exact condition of everything.Our world is becoming INTERCONNECTED

People, systems and objects can communicate and interact with each other in entirely new ways.Virtually all things, processes and waysof working are becoming INTELLIGENT

We can respond to changes quickly and accurately, and get better results by predicting and optimizing for future events.8

8What all of this means is that the digital and physical infrastructures of the world are converging.

Computational power is being put into things we wouldn't recognize as computers. Indeed, almost anythingany person, any object, any process or any service, for any organization, large or smallcan become digitally aware and networked.

With so much technology and networking abundantly available at such low cost: What wouldn't you put smart technology into?What service wouldn't you provide a customer, citizen, student or patient?What wouldn't you connect?What information wouldn't you mine for insight?

A smarter planet is possible because - Our world is becoming instrumented Our world is becoming interconnected. Virtually all things, processes, and ways of working are becoming intelligent.

Let me explain each to you in a bit more detail (NEXT SLIDE)

Smart Sewers: IBM is working with cities like San Francisco and its partners to predict where and when pipes are likely to break before service is disrupted or pollution reaches our oceans, rivers and bays.

Smart Grid: IBM leads 7 of the 11 smart meter deployments globally, building intelligence into utilities to lower costs for customers and better balance the grid. The Oxxio Smarter Meter was a joint development with IBM

Smart Traffic: IBM is working to reduce congestion and emissions in Brisbane, Eindhoven, London, Singapore and Stockholm with smarter traffic systems. At least 20 other cities have active bids to do the same.

Smart Crime Fighting: IBM is helping the cities of Chicago, Los Angeles and New York fight crime by digitizing their law enforcement practices and deploying smarter surveillance systems.

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Smart Water Management: IBM is helping the Port of Rotterdam in monitoring and managing currents to enable efficient port management and manage risk.

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IBM Watson: utilizing computer power to combine data, knowledge and language interpretation to win Jeopardy

What if we would utilize these possibilities and bring science into the art of marketing. Smarter Commerce

On a Smarter Planet we as marketers are faced with new challenges and opportunities

Yesterdays marketing relied on a sequential pathTodays consumers and companies interact across many dimensions

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Main point: successful marketers create experiences that engage clients in their environment and dont stop at the point-of-sale they carry a client from a transaction into advocacy.

Todays successful marketers are engaging in tight iterative processes with their customers so tight it almost real-time. These marketers are creating opportunities for exploration by providing media as well as context with a clear understanding of who their customers are, they are helping prospects and clients engage with the company through their natural communities and reaching out to new communities though traditional and new channels And their marketing doesnt stop at the point of sale, their marketing experience carries throughout the customer experience cycle, turning a transaction into an experience and a client into an advocate.

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On a Smarter Planet we as marketers are faced with new challenges and opportunitiesMarkets, technologies and segments evolve, shift and flow across channels and cross every boundary marketers define, eroding efficiency and effectiveness faster than ever

Clients engage brands from every conceivable angle and source. They benchmark best-in-class experiences from other industries and share their opinions with others

Clients have higher expectations of personalization while leaving tremendous volumes of seemingly unrelated digital fingerprints across many locationsCustomer ExperienceMarketingProcessesCustomerData21

of video uploaded to YouTube every minute.24 hrsInformation creation and social media compound the explosion of data new users sign up to Twitter every day. 300,000new pieces of content per average user on Facebook every hour.3.7522

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YouTube PR, quoted from http://www.website-monitoring.com/blog/2010/05/17/youtube-facts-and-figures-history-statistics/Facebook Statistics: http://www.facebook.com/press/info.php?statisticsTwitter stats: http://blog.hubspot.com/blog/tabid/6307/bid/6050/The-Ultimate-List-100-Twitter-Statistics.aspx

of people don't believe that companies tell the truth in advertisements 75%The need for marketing progress is clear.of marketers need to transform themselves by the end of 201175%Sources: ROI Research for Performance 2010, Yankelovich, 2010 IBM CEO StudyJanuary 2009 Marketing Technology Adoption 2009, Forrester Research

of CEOs picked getting closerto the customer as their top priority88%23

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Main point: The speed of change is causing shifts in people, enterprises and marketing.

This high pace of change has created a ripple across the marketing landscape. From the human perspective, 75% of your customers no longer trust that your advertisements are telling the truth theyve seen everything change so many times in a short period of time, the lifetime warranty you touted for your latest line becomes a joke when the product gets obsoleted in a year by new technology; The clients you cited as references today are making bankruptcy headlines tomorrow; The spokesperson you chose for your company gets caught by a smartphone doing a rude gesture and plastered all over the web; It isnt bad or irresponsible marketing it really is the incredible speed of change that is creating chaos and people have reacted by taking their information for a different source, which well get to in a minute.

On the enterprise are, CEOs of top companies are shifting their organization to becomes more focused on the customers, placing them as a priority and centering everything the organization does around understanding these relationship, nurturing and improving them they are seeing that the greatest returns for their organization will come from a close alignment to the companys own clients.

With the speed of these changes, attitudes and priorities, marketing organizations are also planning to reorganize this year around 75% of you are looking at major shifts.

Until recently we closely managed our brands

Corporate Branding24

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Corporate BrandingPeer ReviewsWord of MouthSocial Commentary

Today a network of people shape how your brand is perceived.

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25Main Point:Brands are now shaped by the networks that people form. Brands now take on the voices and attitudes of people that interact with it much more visibly than in the past.

The internet has shifted not just the way we work, it has shifted the way people interact with each other and it is no longer about people accessing content it is now about people connecting with each other and authoring content in the process those communications are re-shaping your brands and messages. The dialogue has shifted and as a marketer you can now only guide your brand relevant conversations by supporting this web of people giving your brand its voice and character.

It is not jst the rise of social media and social media sites, it is also the distrust we referenced earlier the 75% of people who will not believe anything you as an advertiser- tells them. The human needs are still there and the same they have shifted what doors they have open to send and receive messages; This shift is reshaping both markets and what marketing means shifting the core competencies of successful CMOs.

The explosion of data, from a growing number of sources provides marketers with new opportunitiesexpand into existing markets & create new ones

Capturehidden opportunities

Evolve the brand with customers

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Marketing is becoming more

INSTRUMENTEDGathering insightful data from every impression, search, purchase, chat and live interaction, and empowering you to createthe most relevant experience across all channels. 27

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INTERCONNECTEDExtracting and analyzing data from across channels social to in-store, mail and beyond while maintaining a consistent and relevant thread of communication across brands, geographies and consumers.28

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INTELLIGENTApplying advanced analytics to deliver a highly personalized experience clients embrace and respond to while providing a strong ROI on marketing investments.29

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++=An unprecedented opportunity to transform the traditional marketing function into a powerful business driver

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Deep Customer InsightAn integrated marketing solution delivers comprehensive capabilitiesSocial media outreache-CommerceOutstanding web presenceCampaign managementLead managementAutomated eNurtureMeasurement & dashboardsAnalyticsSingle view of customer data31

Consistent, Compelling Brand and Customer ExperienceOptimized Cross-Channel Marketing Processes

Create a Consistent, Compelling Brand and Customer ExperienceAn integrated marketing solution delivers comprehensive fact based capabilities

Inter-Continental Hotels re-branded Holiday Inn, delivering targeted interactions across channels, bringing alive the new brand and driving a 400% increase in revenue per ad impression.Intelligent use of client information to inform all contact channels with personal information for cohesive brand experienceExecuting across online and offline channels with highly customized loyalty program offersBoots massive loyalty program delivers coordinated offers through statements, store kiosks and online campaigns with a total program ROI of 193%.Create a Consistent, Compelling Brand and Customer Experience

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IHG

AboutWorlds largest hotel group by number of rooms7 brands including Holiday Inn, Crowne Plaza, and Staybridge Suites 180 million guests per year

ChallengesFranchise business model created complex data challengesCustomers behaved in real time; IHG marketing focused on batch processingNeeded a dynamic, relevant, multi-channel approachLarge scale operations needed to support millions of customer interactions each day

Results250% increase in clicks per dayRevenue per impression rose from $0.18 per to $0.77 (400% total increase)Moved oversight of transactional email from IT to MarketingOne comprehensive marketing platform, powered by Unica, integrated email and transactional data to the database Full tracking and reporting with better deliverability, faster deployment, and centralized business ownership

Boots

AboutUK's #1 drugstore chainStrong loyalty program - Advantage Card

ChallengeManaging complex, massive loyalty program that includes 82% of the UKs female populationImproving cross channel execution - website, email, kiosk, direct mailDelivering relevant offers to customers that are profitable for Boots and its product suppliers

ResultsHighly optimized offers for customers in loyalty programOffers in statementsDouble digit increase in incremental sales , coupon response rates and profits In store eventsYoY increase in sales and net profitTest and learn program ROI achieved in months Incremental sales increased YoY

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Create a Consistent, Compelling Brand and Customer ExperienceOptimize Cross-Channel Marketing ProcessesAn integrated marketing solution delivers comprehensive capabilities

ING centralized campaign management and modernized online marketing, reducing direct marketing costs by 35%, increasing earnings by 20M and reducing cycle times from 26 weeks to four weeks.Optimizing marketing functions to reduce cost and accelerate campaign cycle timesAnalytics-driven continuous process optimization adjusts and forwards CRM strategies to touch points dynamicallyO2 can now quantify the value of each program and attribute its value accurately, adjusting CRM programs dynamically, with over 25% of its revenues coming from online traffic.Optimize Cross-Channel Marketing Processes

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ING

AboutOne of Europes largest financial services firms. Based in the Netherlands.

ChallengesOutbound campaigns were ineffective not taking advantage of customer initiated interactionsNeeded to create a single, cross-channel, relationship with each customerDisparate teams managed customer dialogsNeeded to reduce marketing costs through optimization

ResultsRelevant, real-time campaigns drive higher response rates85M targeted offers served each day across 5 channels direct mail, email, web, call center, and branches 20M increase in earnings expectedLowered direct marketing cost 35%Faster campaign cycle times: reduced from 26 weeks per campaign to just 4 weeks

O2

AboutTelco and broadband provider in Germany. Subsidiary of the pan-European Telefonica Group

ChallengesNeeded to coordinate people involved with marketing operationsNeeded a tool to report information in many ways in order to know the impact one marketing program has on the othersNeeded to quantify the value of each programBecause online traffic accounts for 25% of all sales, O2 needed to build faster and smarter online portal

ResultsBetter coordination of all involved people in marketing processesHighly adjustable reporting engine to report information in a multitude of waysCan now monitor each user interaction with the portal, and assign a value to the marketing program that brings the visitor to the siteBetter and faster targeting in addition to the Next Best Offer Engine, all to improve online interactions

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Create a Consistent, Compelling Brand and Customer ExperienceOptimize Cross-Channel Marketing ProcessesDeeping Customer InsightAn integrated marketing solution delivers comprehensive capabilities

37First Tennessee refocused on customers, analyzing monthly transactional data and two years of marketing response information with 30 data dimensions to adjust segmentation, taking ROI to over 600%Adjusting campaigns based on past and present customer behaviors across all touch pointsLeveraging all available customer data for a holistic marketing approachSNS Bank leverages online, offline, real-time and historic customer data , allowing inbound contacts to drive outbound campaigns. This achieved a 5% lift in savings product sales volume while the marketing investment paid for itself within six months.

Deeping Customer Insight

First Tennessee

Abouta Memphis-based bank with more than $25 billion in assets

ChallengesFirst Tennessee Bank, the states oldestand largest bank, suspected it waswasting thousands of dollars annually onits direct marketing campaigns byfocusing on products rather thancustomer knowledge and behavior.

ResultsWith the data provided by IBM SPSS Modeler, the bank was able to lower itsdirect mailing costs by 20 percent while watching its customer responserate rise 3.1 percent. The new Modeler-driven campaigns showed positive results right fromthe start: customer response rates rose 3.1 percent and mail costsdeclined 20 percent equating to a 600% return on investment.

SNS Bank

AboutMajor retail bank in the Netherlands Converting branches to shops with no cash available

Challenges63% of customers only had inbound contactsImprove targeted marketing by leveraging all customer data (on/offline, real-time/historic)Reduce call center costs with proactive online service messages

ResultsOnline MarketingDelivered 4.5M offers per week; more offers than previously sent in an entire yearReduced call volume and number of complaintsLess than 0.1% unsubscribed

Financial Results: 5% growth in sales volume for a savings product Product investment paid for itself in less than a yearCustomers moved 20M into savings accounts4M revenue growth in first year

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Create a Consistent, Compelling Brand and Customer ExperienceOptimize Cross-Channel Marketing ProcessesDeeping Customer InsightAn integrated marketing solution delivers comprehensive capabilities

The time has come to bring science to the art of marketingDo your competitors understand your customers better than you do?

Ask yourself the tough questionsAre you doing things manually that should really be automated?

How compelling and consistent is the experience you offer customers?Are you leveraging customer data to its full potential?

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Visit us at TheCMOSite.com

User-driven marketing:

By creating intelligent email campaigns and Web features based on user-generated content and reviews, PETCO increased open and click-through rates to 5x the industry average The opportunity for progress is clear.Integrated Experience:

Continuous analysis and refinement of perspective student profiles to better engage through web and social media increases student registrations3400%increase in conversion rates40%More products sold on averageIntelligent Lead Mng.

TD Bank automated their end-to-end lead management process, improving workflow, eliminating inefficiencies, and identifying new opportunities

41%More sales per Web visitor41

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Seton HallSeton Hall is a private university with an undergraduate enrollment of more than 5,000 students. Challenge: As a private institution, it relies on tuition as its primary source of revenue. And it must continually attract new student to various degree programs. Recruitment cycles are long and expensive. Action: But Seton Hall recently began to correlate behavioral patters of prospective students across offline and online mediums. The university was able to track the effectiveness of banner ads, videos, widgets and other marketing initiatives not hosted on the Seton Hall website. This tool allowed university marketers to anticipate customer behavior, automate personalized, relevant responses, and syndicate these responses to third-party sites such as Facebook. Result: As a result, the school was able to increase enrollment by 13 percent, increase tuition deposits by 25 percent, and improve digital conversion rates by more than 3,400 percent.

Petco: Challenge: Create a forum for customers to communicate with each other through reviews and ratings to build loyalty and communityAction: Partnered with business partner Bazaarvoice for a personalized, targeted email campaign around products that users had rated highly. Added product reviews to site navigation. Petco goes beyond just soliciting customer feedback, and uses the user-generated content as a key component in its marketing campaign Results: 5X average click through rate of initial email campaign. Customers who navigated into top-rated products proved to convert at a 50% higher rate, spending 60% more than people who did not browse that category. 22% more sales per unique visitor on a same-session basis and 41% more sales per visitor on a multi-session basis. Lower return rates.

TD BankBranches received primitive paper printouts of lead informationBranches overloaded with leads, some redundant, no ability to filter or prioritizeCross line-of-business referrals were inconsistent and ineffectiveResults: Built a fully automated end-to-end lead management process that dramatically improved workflow, helped to sell more products and services, eliminated inefficiencies, and reduced missed phone calls and opportunities30% increase in total small business book of business40% increase in average number of products sold20% reduction in annual attritionPlus: achieved 48-hour lead follow-up, 25% increase in referrals, greater team cooperation, increased productivity and positive attitudes from retail branch staff

TD BankChallenges:1) Onboarding. New bank customers are far more receptive to purchasing additional products within the first year. Unfortunately, at TD Bank, new customers fell into a gray zone. Due to their short tenure, the bank did not yet have sufficient information to target them effectively. They were not identified as viable candidates through normal predictive modeling techniques and, as a result, they had the highest attrition rate of any bank customer segment.

2) Lead and referral management. TDBFGs lead generation and referral management processes had been primitive and paper-based. Each month, branches would receive large printouts containing lead information in a form that was difficult or impossible to use; often, branches would be overloaded with leads, and some would be redundant, leading to duplicate communications with customers. Cross line of business referral creation, processing, and management were inconsistent and ineffective.

3) Campaign management. Before Affinium, each marketing campaign was developed and executed manually, using code that wasnt reusable. Each new campaign had to be prepared from scratch, creating a bottleneck and preventing marketers from satisfying the demands of the business. Action:TD has built a fully automated, end-to-end solution that begins with customer selection and targeting of customers, and is followed by the handover of qualified leads to frontline staff. This end-to-end automated process has dramatically improved workflow; helped sell more products and services, and eliminated inefficiencies; and reduced missed phone calls and opportunities.Results:The results of TDs New Customer Onboarding program have been exceptional. Among consumer customers, the program has driven a 448% increase vs. control customers in checking and saving amounts, a 176% increase in loan balances, and a 283% increase in total book of business. The program, introduced more recently to TD Banks small business customers, is achieving strong results there, too: a 30% increase in total book of business, a 40% increase in the average number of products sold to each customer; and a 60% increase in the number of services sold.

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B2B Online - Ronald Velten - IBM