pg. 2

ContentsExecutive Summary pg. 3

Key Findings pg. 4

Chapter 1: The Customer Lifecycle Experience pg. 5

Chapter 2: Customer Managed Relationships pg. 9

Chapter 3: Overcoming Challenges with the Customer Lifecycle pg. 16

Chapter 4: The Future of Customer Lifecycle Engagement pg. 21

Key Recommendations pg. 26

Research Methodology pg. 30

pg. 3

Executive SummaryRapid growth in digital channels has forever transformed the way B2C organizations target and engage profitable customers. This demands new ways of engaging customers (both online and offline) and a customer-centric approach. For this reason, B2C organizations continue to place heavy emphasis on improving the customer experience with the goal of building long-term profitable relationships with customers. In fact, the customer experience is consistently ranked a top two source of competitive advantage for B2C companies. But the real question is, what are companies doing about it . . . and is it sufficient?

To find out, Gleanster and Yesmail conducted a comprehensive study to ascertain the state of customer engagement among customer-facing mid-to-large organizations. Conducted between March and April 2013, the study surveyed 100 senior marketers from B2C mid-to-large ($10M to $1B+) companies with online and offline sales models. It turns out, managing and optimizing the customer lifecycle is a top two strategic priority for marketing in 2013. But a closer look at current customer engagement tactics revealed marketers continue to rely on legacy marketing tactics and struggle to incorporate critical cross-channel data to inform customer messaging and offers. Even more shocking, however, marketers think they are doing a good job at managing the customer lifecycle; eight out of 10 respondents think they 1) know their customers sufficiently well and 2) do an adequate job using data to target messages and offers to current customers.

The average organization relied on little more than basic customer profile data and purchase history to target and segment customer communications. According to the research, nine out of 10 organizations collected a tremendous amount of customer data that marketers simply don’t have access to when crafting customer communications (behavioral data, web analytics, online/offline profitability, life stage attributes, sociographic data, channel preferences, propensity modeling, etc.). Marketers need to champion change and demand access to a full and comprehensive view of customer profile data that can be used to deliver relevant, timely, and intimate communications to remain competitive now and in the future.

pg. 4

Key FindingsThis report focuses on marketers at B2C companies that leverage a multi-channel strategy to sell products and services online and/or in brick-and-mortar environments.

Key Takeaways Include:

• Optimizing the customer engagement strategy is a top two strategic imperative for B2C marketers and the No. 1 perceived source of revenue growth over the next five years. Marketers acknowledge they must attract and keep profitable customers at all costs. That means re-thinking the traditional customer relationship through real-time access to customer data that truly informs and triggers hyper-targeted communications.

• Respondents generally believed they are effectively segmenting and understanding the customer. But current customer engagement tactics revealed eight out of 10 organizations failed to utilize available customer data that could play a critical role in improving personalization and relevance. For example, 53% of marketers indicated they have an excellent understanding of past purchase behavior and 83% believe they are “effective” at delivering targeted offers and messages using predefined triggers. However, just two out of 10 B2C organizations incorporated channel preference data, household composition data, propensity scores, and behavioral data in targeted customer communications. In fact, the most common form of data used to personalize customer communications was past purchase data. Just because you know what your customer buys doesn’t mean you know your customers.

• Marketers rely on multiple channels to send communications (email, website, social media, direct mail, mobile, etc.), but they aren’t using data to coordinate and orchestrate communications across multiple channels. Organizations need to message to customers, not to the channel. That demands a preference-driven, centralized approach to outbound communications. More importantly, it demands the use of online and offline customer data in multi-channel strategy.

• Limitations with existing tools (42%) and fragmented marketing systems (34%) are cited as the top two challenges with sending personalized customer communications. Fragmented systems lead to fragmented data silos and difficulty managing the accuracy of customer information. Marketers need to develop an integrated approach to powering customer communications – from data to creative, execution, and measurement.

Key Findings

Anatomy of a Top Performer

Gleanster uses 2-3 key performance indicators (KPIs) to distinguish “Top Performers” from all other companies (“Everyone Else”) within a given data set, thereby establishing a basis for benchmarking best practices. By definition, Top Performers are comprised of the top quartile of qualified survey respondents (QSRs).

The KPIs used for distinguishing Top Performers focus on performance metrics that speak to year-over-year improvement in relevant, measurable areas. Not all KPIs are weighted equally.

The KPIs used for this Gleansight are: • Growth in annual revenue • Email click-through rates

Chapter 1: The Customer Lifecycle ImperativeB2C organizations consider the customer lifecycle to be a top two strategic priority. Marketers think they are effective at customer management, but only a small subset of existing customer data is used to optimize messages and offers. It’s time for a reality check.

pg. 6

The Customer Lifecycle ImperativeCustomer intimacy forms the basis for long-term customer relationships for successful organizations. That should come as no revelation. Relevance and personalization in messaging and offers have long been vital to attracting and retaining customers and meeting revenue targets. Today it’s widely accepted that building loyal and profitable customers is largely a function of targeting the right individuals with the right message through the right channel and the right time. The challenge lies in translating the cliché into action. The research suggests that mid-to-large B2C companies struggle to create customer intimacy. But marketers have a difficult time putting their finger on the issues because limitations in current systems and the availability of customer information cripple marketing success.

In the hyper-competitive B2C environment, the battle for market share and revenue growth will be fought with outstanding customer experiences and satisfied lifelong customers. Customer profitability is a top two priority for marketers in 2013, second to revenue growth. (See Figure 1.) Respondents demonstrated steadfast commitment toward optimizing and improving the customer lifecycle through relevance and personalization. To do this, marketers must tap into readily available customer data to inform relevant and timely communications. But that has long been the goal for marketers, and the survey results reveal that many companies still struggle to liberate fragmented customer data. In fact, a small percentage is actually used in ongoing customer communications.

Chapter 1

#1 PriorityIncrease RevenueExtremely Important – 72%Important – 15%Less Important – 9%Not Important – 4%

#2 PriorityRetain profitable customersExtremely Important – 48%Important – 36%Less Important – 13%Not Important – 3%

#3 PriorityReduce costsExtremely Important – 30%Important – 42%Less Important – 20%Not Important – 8%

Marketers are divided on customer engagement priorities

Strategic Priorities for Marketing

Very High

48%45%41%

Increase Customer Loyalty

Increase cross/up-sell revenue

Improve relevance of marketing o�ers

Moderate

36%40%47%

Figure 1

Customer profitability is expected to drive top-line revenue growth. Customer profitability is a top two strategic priority for marketing. But B2C marketers struggle to bridge the gap between creative strategy and customer data, leaving massive opportunities for improvement.

pg. 7

The research suggests B2C organizations are collecting and purchasing tremendous amounts of critical information about customers (what they buy, how they shop, where they buy, when they buy, channel preferences, life stage attributes, income, household makeup, etc.), but this information is not being used to inform customer communication strategy even though it already exists internally. Marketers struggle to act on available customer data. But here’s the kicker: marketers don’t realize it. Respondents generally believed they are doing a good job at customer engagement. (See Figure 2.) Marketers framed their success around the optimized use of “readily available” data – which accounts for about one-third of the data that should be informing customer engagement strategy.

It is imperative for marketers to tap into available data to personalize customer communications. Research has consistently shown that relevance drives revenue. Marketers need to tap into available data such as life stage, purchase behavior, online browsing history, likelihood-to-purchase scores, and profitability models to deliver hyper-targeted messages across customer defined preferred communication channels.

Chapter 1

Customer profile and purchase history 67%

Customer feedback / satisfaction 59%

Point of sale (POS) transaction 56%

Campaign response data 54%

Third-party geo-demographic data 51%

Customer loyalty scores 46%

Likelihood-to-purchase scores 41%

Web browsing / online behavioral 41%

Social data 38%

Customer value scores 36%

Third-party behavioral / attitudinal 36%

Store loyalty card data 36%

Propensity-to-recommend scores 28%

Which of the following data sources / inputs, if any, do you currently use as the basis for creating targeted email marketing campaigns?

How e�ective are you at delivering targeted o�ers and messages using predefined triggers?

55%

12%

33%0% 25% 50% 75%

88%

Use of existing customer data(Not so e�ective)

Very e�ective

Somewhat e�ective

Not e�ective

Figure 2

Organizations think they are doing a good job at targeting customers, but fail to leverage a comprehensive source of data in customer engagement. Marketers’ perception of effectiveness is skewed by limited access to data.

pg. 8

Marketers think they are using data effectively for customer lifecycle optimization. Think again.Marketers overwhelmingly indicated they have sufficient knowledge of their customers and perceive themselves to be effective at targeting offers and messages. However, current use of available customer data in targeted campaigns tells a different story. B2C marketers actually access a subset of the information that is collected on customers in ongoing customer communications. In practice, marketers rely heavily on purchase behavior and basic customer profile information to optimize the customer lifecycle. It’s not that marketers are naive or ill informed, it’s that the perception of success is skewed by the availability of customer data. Eighty-six percent (86%) of marketers indicated they believe they can generate more revenue from customers if they have access to a more complete picture of customer attributes.

Chapter 1

Organizations leverage a small fraction of the available data on customers for ongoing customer communications.

Chapter 2: Customer Managed RelationshipsDo you really know your best customers? Which segments are the most profitable? Do you adapt the customer lifecycle by segment? Don’t constrain your customer strategy based on the availability of customer data.

pg. 10

Chapter 2

The State of Customer Lifecycle Engagement The research findings suggest that marketers are confident that the current tactics used to deliver targeted customer offers at the right time with the right message are working well for customer engagement. Only 12% of respondents self-reported that they are “not effective” at delivering offers using pre-defined triggers or knowing the reactivation likelihood for each customer. In general marketers perceive customer engagement strategies to be effective.

But a closer look at current tactics suggests marketers place too much weight on transaction-oriented data. The reality is, respondents did a good job using this transaction and basic profile data, which is typically easily accessible through CRM. Almost nine out of 10 respondents believe they can be doing better at customer engagement if they have access to the right customer data. The state of customer lifecycle engagement reveals a number of glaring opportunities for immediate improvement.

Could you do a better job at customer engagement with access to more comprehensive data sources?

E�ective at knowing the optimal message and time

53%

12%

35%

Very e�ective

Somewhat e�ective

Not e�ective

86%

YesFigure 3

Perception of effectiveness with current data. 88% of marketers believe they are effective at customer communication based on the right message and right time, yet 86% readily admit they can do a better job if they have access to a more robust customer data repository.

pg. 11

Marketers struggle to inform customer lifecycle strategy with customer dataIf the goal of customer engagement strategies is to build more intimate and relevant relationships with profitable customers, then marketers should be laser-focused on gaining access to a more comprehensive view of customer data. This data forms the foundation for more meaningful offers and communications. Respondents were far too wedded to leveraging data about what customers purchased rather than data about who customers are or why they purchased.

While any attempt to target customers based on past purchase behavior or basic demographic attributes is better than nothing, the overwhelming focus on improving customer engagement between now and 2014 suggests B2C marketers see obvious room for improvement. Actually, Top Performing marketers are four times more likely to use propensity-to-buy models, channel preference information, and household composition data to customize messages for hyper-targeted customer audiences. Personalization based on past purchase history or profile information is a parity play, not a competitive differentiator.

Figure 4 illustrates the self-reported level of understanding marketers perceive themselves to have with respect to different forms of customer data. Note that, overall, marketers admit to having limited access to data that could be used to build one-to-one relationships with customers. It is imperative for marketers to expand the availability of relationship-oriented data and use this data to optimize their customer communication strategy.

Chapter 2

“My biggest challenge is that I don’t know personal attributes about my customers, so my targeting strategy is very basic.” VP Marketing Retail

pg. 12

Chapter 2

No Understanding

Limited understanding of relationship oriented customer data

Excellent Understanding

Relationship-OrientedCustomer Data

GOAL

Transaction-OrientedCustomer Data

10

5

9

34

67

81

2

Limited understanding of relationship-oriented customer data

Excellent understanding of relationship-oriented customer data

Limited understanding of transactional customer data

Excellent understanding of transactional customer data

Figure 4

Level of understanding about customers. Marketers primarily rely on transaction-oriented data for segmentation. Building long-term customer relationships demands a better level of understanding about customers.

1. Customers’ demographic makeup 2. Customers’ past purchase behavior 3. Customers ranked by “value”4. Customers’ wants, needs, likes and interests5. Customers’ channel preference6. Propensity to buy 7. The profitability of cross channel shopper/buyer8. The profitability of online versus offline customers9. Customers’ level of participation in social media10. Customers’ household composition (marital status, number of children, etc.)

pg. 13

The survey results also revealed marketers desire more automation around response-based engagement. It’s about achieving relevancy at scale. Unfortunately, managing the customer lifecycle in an environment where data is fragmented or generally unavailable in the marketing communication platform is cumbersome, expensive, and time-consuming. This calls for a rules based and automated approach. Many mid-to-large organizations rely on multiple creative agencies and marketing technology partners, making automation difficult to impossible. Orchestrating a cohesive brand experience across multiple channels (online and offline), multiple agencies, and fragmented technologies is no easy task. It’s no surprise, therefore, that companies frequently rely on legacy tactics for longer than they should.

The battle for market share will be forged on customer relationships, not customer transactions. Building relationships demands intimate knowledge of customer needs, wants, and desires – something only one-third of marketers confidently feel they understand about current customers. As such, technology will play an enabling role in taking robust customer data and multi-channel preference data and automating response-based communications with customers. In the future marketers won’t send campaigns; they will trigger dialogues.

Chapter 2

pg. 14

Chapter 2

Marketers blame technology limitations, but incomplete access to customer data would cripple success with the most robust platform. Marketers rank limitations with marketing tools (42%) as the most significant barrier to sending personalized customer communications. This is followed by fragmented systems (34%) and poor data quality (34%). Ideally, customer lifecycle strategy should be informed by a comprehensive view of customers. Purchase behavior is valuable, but it informs marketers about what a customer bought, not necessarily who they are. Do they have a family? Do they engage in social media; and if so, which sites? What is their annual income? Are they profitable? Why do they prefer to purchase online or offline? Answers to these questions demand a comprehensive and centralized strategy for aggregating available customer information (and possibly even augmenting customer records with third-party data). While technology can be a barrier, it is of secondary concern to the availability of information.

Email is still the most prevalent channel. Email is just as relevant today as it was 10 years ago. In fact, 100% of the organizations that participated in the survey use email and the web as a primary means of customer communication. What has changed considerably is the role of email in multi-channel engagement. Email is no longer just a communication platform; it’s a vehicle for engaging in highly personalized communications with customers. Email is also the glue that binds together mobile, social, and other channels and forms the basis for building intimate relationships with customers. Eighty-four percent (84%) of respondents actively engage with customers via social media.

Limitations in marketing tools

Poor data quality

Fragmented marketing systems

42%

34%

34%

Figure 5

Top three challenges with sending personalized customer communications. Technology and data quality are perceived to be core challenges. Marketers should be identifying access to existing customer data as a top three concern.

pg. 15

Chapter 2

Customer segments should dictate customer strategy. Companies that sell online and offline (in brick-and-mortar stores) need to explore buying trends within customer segments to identify unique customer segments based on behavior, not just demographic attributes. According to the research, marketers tend to have an inflated sense of “knowing how to target the online/offline buyer.” Aggregate online and offline customer purchase behavior can be misleading because it normalizes the most profitable and least profitable customer segments. But online and offline data about unique sub-populations of customers may reveal missed opportunities or even unprofitable customer segments that are a drain on performance.

When asked about the primary goals of the current customer segmentation strategy, marketers indicated loyalty and retention are primary concerns. The secondary concern is the segmentation tactics that ultimately enable improved loyalty and retention. (See Figure 6.) Do you know who your most profitable customers are? Do you understand regional or value differences? Can you fine-tune offers by channel or propensity to purchase? The average B2C marketer from the survey placed more weight on the goals of segmentation with respect to loyalty programs, and less weight on the use of segmentation to define unique customer segments or for fine-tuning customer targeting strategies.

Translating theory to actionThe research revealed a path of least resistance for optimizing customer engagement within mid-to-large B2C companies. Organizations must let customer data dictate strategy, mitigate the use of legacy customer engagement tactics, expand the use of customer data to optimize the customer lifecycle, and focus on managing customer relationships (not customer transactions).

0% 10% 20% 30% 40% 50% 60% 70% 80%

Secondary

Primary

Deploy more e�ective loyalty programs

Implement reactivation programs for stagnant customers

Understand regional or value di�erences

Understand di�erences in customer sub-populations

Fine-tune acquisition and targeting strategies

Create relevant o�er/channel strategies

63%

61%

39%

37%

32%

28%

Figure 6

Goals with customer segmentation. Marketers think they have a good understanding of the demographic make-up of customers (See Figure 4). But, they contradict themselves when asked about the goals of segmentation. Marketers seek to deliver more relevant, targeted, and intimate communications but place more granular understanding as a secondary concern with segmentation.

Chapter 3: Overcoming Challenges with the Customer LifecycleLegacy processes plague the customer engagement strategy. How do B2C marketers intend to overcome these challenges?

pg. 17

Chapter 3

Moving Beyond Legacy Practices The research findings revealed four main areas marketers need to focus on in order to achieve success with customer lifecycle engagement: data, multi-channel strategy, technology, and segmentation.

Expose new sources of customer data to the customer segmentation strategySurprisingly, less than half of marketers incorporate data from some of the most prevalent sources of information; for example, 41% of marketers incorporate web browsing and online behavior data in targeting criteria (although one-third of respondents plan to leverage this source in the future). Web data is a rich source of insight about the sub-populations of customers and buying triggers.

According to Figure 7, transaction data remains a consistent theme with respect to currently available data (POS systems, CRM contact information, etc.). One-third of marketers plan to incorporate social data and third-party augmented data in customer communication strategy. Data append and scrubbing services are critical to the customer engagement strategy, but marketers still struggle to manually upload and scrub customer data, particularly when it is fragmented across one or more campaign management tools. Twenty percent (20%) of respondents augment in-house customer data with third-party data at a customer level and 24% augment customer data at an aggregate level (such as industry or region).

Fifty-eight percent (58%) of respondents currently purchase or plan to purchase third-party data to augment customer records. However, this data can also be used to define hyper-targeted customer segments and communication strategies; but it’s largely used to validate data integrity for transaction-based customer communications. In addition, marketers have a good understanding of customer profitability at an aggregate level, but know very little about profitable individuals outside of transaction data. Maximizing up-sell and cross-selling revenue demands a more granular view of customers.

0% 10% 20% 30% 40% 50% 60% 70%

40% 0%Plan to use

Currently use

Purchase and profile data

10%20%30%

67%

59%

56%

54%

51%

46%

41%

41%

38%

36%

36%

36%

28%

CRM data

Customer feedback / satisfaction

Point-of-sale (POS) transaction

Campaign response data

Third-party geo-demographic data

Customer loyalty scores

Likelihood-to-purchase scores

Web browsing / online behavioral

Social data

Customer value scores

Third-party behavioral / attitudinal

Store loyalty card data

Propensity-to-recommend scores

15%

21%

10%

18%

15%

18%

23%

33%

31%

33%

33%

5%

31%

Figure 7

Sources of customer data. The top two sources of customer data used for segmentation include transaction data.

pg. 18

Email100%

Website100%

Social Media84%

Direct Mail64%

Mobile63%

Chapter 3

Overcoming challenges with multi-channel marketingSix out of 10 respondents admit to being moderately effective at knowing the optimal channel to send an offer or message to by customer. But there is a huge difference between sending communications across multiple marketing channels, and orchestrating lasting relationships via multiple channels. Customers have little patience for inconsistent or confusing brand communications. According to Gleanster, Top Performing organizations consistently rank the online customer experience as a top two source of competitive advantage.

Marketers need to do a better job collecting channel preference information from customers and delivering optimized communications via preferred channels. This demands an integrated communication platform whereby centralized customer data can be used for trigging information. Figure 8 shows the channels respondents regularly used for customer communications. Notice in obvious disconnect between multi-channel communications and the availability of channel data for segmentation and customer preference. Only 46% of marketers actively leverage data from social media, direct mail, and mobile to inform email marketing communications to customers.

Marketers need to consider a response-based multi-channel marketing strategy whereby communications are triggered based on customer behavior and delivered across preferred communication channels. Mid-to-large enterprises therefore need to do a better job collecting and aggregating cross-channel data on individual customers (such as social profiles, mobile opt-ins, etc.). In addition, website and email properties should be optimized for mobile access through responsive design and CSS design templates. Mobile represents a huge source of traffic for today’s B2C organizations. But poorly optimized mobile experiences don’t take advantage of this critical customer engagement medium.

Figure 8

Use of channels for customer engagement. Data from communications via social, direct, and mobile is not available for segmentation and targeting.

pg. 19

Marketing technologies are impeding personalizationRespondents were asked about their level of satisfaction with respect to current marketing technologies across a variety of categories and processes. The results showed marketers are generally unsatisfied with existing capabilities, the majority of which revolve around data integration and data management challenges.

Respondents overwhelmingly indicated that limitations within their existing marketing tools pose the biggest challenge with respect to sending personalized customer communications. This is followed by fragmented marketing systems, which present serious challenges in managing disparate data sources. According to Gleanster, the average B2C organization supports three to five marketing technologies. Disparate technologies lead to data silos and a general lack of cadence in marketing communications. (See Figure 9.)

Chapter 3

Figure 9

Limitations with existing marketing technologies. Respondents are looking to marketing technologies to help mitigate the challenges with data quality and making data actionable.

Web analytics integration

Third-party data append/customer data integration

Data quality (merge/purge and data cleansing/hygiene list management)

Multichannel campaign configuration (e.g., email, mobile, social)

Data mining/customer segmentation

Percentage of marketers that were "currently satisfied" with capability

48%

47%

46%

46%

45%

pg. 20

Chapter 3

Insight delivered, relevant, real-time customer message streamsThe research findings reveal that mid-to-large organizations need to be more strategic about the types of triggers that initiate customer communications. Respondents indicate that the No. 1 source of customer interaction is the customers themselves. Very few marketers are actively exploring life stage and behavior-based triggers that provide a vehicle for targeted up-selling and cross-selling opportunities. Furthermore, marketers are not taking a proactive approach to building relationships with customers and recommending next-best actions based on customer preferences.

Figure 10

Current use of triggers. Customer outreach and transaction data are the most commonly used triggers. Augmenting existing customer records with new data about customers would offer new opportunities to cross-sell and up-sell to existing customers.

0% 10% 20% 30% 40% 50% 60%

Underutilized, huge potential

Request-based triggers (customer inquiries, responses to calls-to-action)

Transaction triggers (new product purchase, change in purchase patterns, account deposits, etc.)

Online behavioral triggers(browsing patterns, requests for information, etc.)

Expiration triggers (warranty date info, renewal date info, product maturity date, etc.)

Threshold triggers (exceeding a spending or usage limit, consumption amount, etc.)

Life stage triggers (home purchase, birthday, new baby, car purchase change in marital status, etc.)

Credit bureau triggers (credit card and mortgage accounts, changes to credit scores, etc.)

50%

40%

37%

29%

22%

21%

8%

Chapter 4: The Future of Customer Lifecycle EngagementExploring the four imperatives for customer engagement

pg. 22

Chapter 4

Where are we headed? Consumers have blurred the lines between online and offline engagement and multi-channel communications. It doesn’t matter how marketers “want” to communicate; it’s about how consumers are willing to engage. And these days capturing mindshare demands highly intimate conversations with customers. As such, there are four strategic imperatives that marketers must embrace to meet the exceedingly high expectations of customers and win share of wallet in today’s hypercompetitive business environments.

Real-time Data Access

StagnantData

Campaign Centric

Non-integratedMulti-channel

Disconected Analytics,

Strategy, and Creative

CustomerCentric

IntegratedMulti-channel

Connected Analytics,

Strategy, and Creative

Data

Insights

Strategy

Creative

Figure 11

Customer engagement imperatives. A comprehensive strategy should include data, insights, strategy, and creative.

pg. 23

4 Imperatives for Customer Engagement Marketers need to wake up and smell the data that is right underneath their noses. B2C marketers are at a crossroads, and the competitive edge goes to the organizations that move at the speed of the customer. Yes, it’s going to be painful to divest of legacy processes and solutions. But it’s going to result in more revenue from customers and improved customer satisfaction – which all marketers rank as a top two priority.

From stagnant data to real-time data accessCustomer data is in a constant state of flux. Consider: This year there will be more than 40 million residential moves in the United States. There will also be 4 million births, 2 million marriages, a million divorces, a million retirements and 2.5 million deaths, give or take a few hundred thousand. And that barely scratches the surface on the dozens, if not hundreds, of fields of customer information that can help drive improved marketing relevance.

The goal is to move away from data silos to a centralized model where customer attributes are accessible in real time and available for segmentation, campaign triggers, and customer insights. Customer data can be physically moved to a centralized datamart, or a federated model can link data from disparate systems and make it available to marketers.

Chapter 4

pg. 24

From campaign centric to customer centricSometimes, it seems, marketers are laser-focused on the channel and campaign strategies while losing sight of customers’ wants, needs and preferences. You message to the customer, not to the channel. It’s about using customer data to listen to customers’ needs and wants instead of guessing based on purchase behavior or demographic attributes. Listen to customers, engage them and understand their preferences by communication channel, communication frequency, and interests. Then activate customer data to deliver real-time didactic communications. Top Performers achieve superior performance by showing customers they are listening, and they are constantly hungry for information that can inform personalized communications.

Chapter 4

Figure 12

Marketers rely on response-based, transaction, and online behavior triggers, but there is limited use of event-based triggers.

0% 10% 20% 30% 40% 50% 60%Currently used

Are you listening to your customers?

Request-based triggers (customer inquiries, responses to calls-to-action)

Transaction triggers (new product purchase, change in purchase patterns, account deposits, etc.)

Online behavioral triggers(browsing patterns, requests for information, etc.)

Threshold triggers (exceeding a spending or usage limit, consumption amount, etc.)

Credit bureau triggers (credit card and mortgage accounts, changes to credit scores, etc.)

Life stage triggers (home purchase, birthday, new baby, car purchase change in marital status, etc.)

50%

40%

37%

22%

21%

8%

pg. 25

Nonintegrated multi-channel to integrated multi-channelCompanies need to break down and integrate channel-specific silos in order to deliver seamless customer experiences and create more profitable customer relationships. This means gaining an understanding of which channel, or combination of channels, will be most efficient and effective in eliciting a favorable response from different segments. Further, they need to be able to centrally manage the design, execution and measurement of marketing campaigns across a multitude of both offline and online channels.

Connecting analytics, strategy, and creativeEffective marketing campaign strategy and creative development don’t happen in a vacuum. Rather, they are informed by analytics. Past campaign performance combined with customer profile information should serve as the basis for customer targeting and engagement. Infusing a high degree of analytical rigor into the marketing campaign process is key to driving relevance and personalization and ensuring that campaigns achieve optimal performance. Like channels, which have too often have been treated as standalone elements of customer communications, analytics, strategy, and creative, need to come together to form a coherent whole.

Chapter 4

pg. 26

Key Recommendations

pg. 27

Key Recommendations

Unlock existing customer data, make it actionableThe research showed that too many marketers rely exclusively on basic profile, demographic, and transaction information for customer targeting and offer optimization. Three out of 10 marketers actively leverage social media data, loyalty card data, customer value scores, third-party data, and propensity scores. That’s an alarming statistic given the fact that eight out of 10 marketers are engaging in social media and other critical sources of customer information. So the data clearly exists, but it’s not being used effectively to inform customer strategy.

While existing technology platforms are perceived to be limited with respect to data management and segmentation, it stands to reason that access to a more comprehensive view of customer information should help extract more value out of existing campaigns – even with legacy technologies. Consider building a business case for the type of data marketers need access to and the types of decisions that could be developed with access to this data.

In many cases, a strong tangible business case can be developed around a lift in customer lifetime value or, better yet, cross-selling and up-selling revenue. These tangible metrics should be viewed as opportunity costs to the organization. If your organization doesn’t have an appetite for large-scale change, start small and champion a single initiative that leverages new sources of customer data. Look for ways to prove the value of more comprehensive customer data in the form of revenue lift, customer conversion, and customer satisfaction scores.

Fear complacency and legacy practices. Then commit to overcoming that fear.Like it or not, your customers shape how they evaluate great customer experiences by their interactions with your competitors and companies in other industries. The research reveals two classes of B2C firms: those that have taken an active approach to customer lifecycle management and those that have continued to rely on tactics that increasingly deliver sub-par results. The bottom line is that widespread complacency with respect to customer engagement boosts Top Performing results. Organizations that transform customer data into more meaningful dialogues with customers will enjoy a competitive advantage over complacent competitors. What is more, if organizations achieve relevance at scale with respect to customer engagement, it means customer data is informing automated and pre-configured communications with customers at the right time and in the right channel. That frees marketers to focus on message creation, creative strategy, and extracting customer insights from a more comprehensive view of the customer.

Most marketers and senior leaders avoid the elephant in the room by focusing on what they perceive themselves as doing right – “we use customer data to inform customer engagement strategy.” But the nature of the data used represents less than one-third of the data that should be used.

• Challenge the assumption that your organization is doing a good job at customer engagement. • The data suggests most organizations have room for improvement. • Consider how much data is actually collected about customers and develop a short list of prioritized data that marketing could use to improve customer intimacy and deliver more targeted communications to customers.

pg. 28

Key Recommendations

Engage senior leaders in the discussion.There isn’t a single CEO on the planet who doesn’t care about improving the customer experience, but nobody wants to deliver the message that perhaps the organization should be doing A LOT more with respect to customer lifecycle optimization. But that’s exactly the message that needs to be delivered.

The decision to improve customer lifecycle engagement will require senior-level support and a champion for change in the following areas:

• Augmenting customer data with new sources of demographic, sociographic, and life stage information • A liaison role with IT to champion customer data integration and data-quality initiatives • A practical perspective about the real cost of legacy marketing technologies and an educated perspective on embracing a customer lifecycle solution that bridges the gap between creative, insights, execution, and measurement • Identifying sources of critical customer information and developing a strategy for making the data accessible for customer segmentation and offer optimization

pg. 29

Key Recommendations

Challenge traditional perspectives on target customersMarketers are limited by what they perceive to be successful customer engagement tactics. Research suggests the current view of customers is often limited, leaving marketers lacking insights about customer desires and channel preferences. Top performing marketers are seven times more likely than all others to engage in loyalty programs and propensity to purchase modeling. Research has consistently proven that relevance drives revenue for organizations. Therefore, increasing the level of personalization in customer communications should result in improved cross-selling and up-selling revenue. Given the fact that customer profitability and revenue are top two marketing priorities for all respondents, building a businesses case for improving customer engagement is largely a function of aligning existing targets and management objectives with the opportunity cost of doing nothing.

0% 10% 20% 30% 40% 50% 60%

0%No Understanding

Excellent Understanding10%20%

27%

20%

29%

32%

26%

21%

29%

35%

43%

53%

42%

Customers' household composition

Customers' level of participation in social mediaThe profitability of online versus o�ine customersDemographic and psychographic attributes

The profitability of the cross channel shopper / buyer

Customers' channel preference

When customers are most likely to purchaseCustomers' wants, needs, likes and interests

Which customers are most valuable

Customers' past purchase behavior

Customers' demographic makeup

14%

7%

4%

3%

3%

2%

2%

2%

0%

0%

0%

Figure 13

Extent to which marketers perceive the organization has a clear understanding of the following. Alarmingly few marketers admit to knowing customer channel preferences.

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Research Methodology Between March and April of 2013, Gleanster conducted a survey capturing current customer engagement practices from 100 senior level marketers across key industries including (Retail, Financial Services, Insurance, and Healthcare). Targeted industries had a propensity for high volumes of customer interactions, multi-channel communication strategies, as well as online and brick-and-mortar sales models.

Gleanster used key performance indicators (YoY revenue growth, click-through rates, customer satisfaction, and customer profitability) to distinguish Top Performers (defined as the top 25% of qualified survey respondents) from Everyone Else (the bottom 75%).

Large ($100M to $1B) 77%

Medium ($10M to $100M) 13%

Very Large (More than $1B) 10%

Financial Services (27%)

Consumer Brand (17%)

Healthcare (9%)

Food and Beverage (7%)

Technology (6%)

Automotive (5%)

Insurance (4%)

Telecommunications (4%)

Retail (3%)

Apparel (2%)

Ecommerce (2%)

Education (2%)

Media (2%)

Pharmaceutical (2%)

Other (7%)

Travel (1%)

Company Size

Industries

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GleansterGleanster is a new breed of market research and advisory services firm. Its larger, more comprehensive “Gleansight” benchmark research reports and concise, more bite-sized “Deep Dive” analyst reports highlight the experiences of top performing organizations: why they invest in technology, how they overcome challenges, and how they maximize the value of their investments. Gleanster also aggregates outside thought leadership in the form of vetted white papers and research reports from third-party sources, including those from technology solution providers – who, for their part, can create and maintain their own Vendor and Solution Showcases on Gleanster.com to help further educate the marketplace. For more information, visit www.gleanster.com.

YesmailWe power intelligent customer interactions. We give you the insights to recognize and understand your customer to deliver contextually relevant digital communications – while respecting their preferences and privacy. We help marketers evolve their customer relationships through intelligent interactions via technology, insights and services in a near real-time multichannel environment. We help you compete in the age of the customer. For more information, visit www.yesmail.com.

This study was developed in collaboration with Gleanster and Yesmail. Yesmail sought to validate market trends identified by common unmet needs and wants from their clients – specifically among mid-to-large B2C organizations. Yesmail engaged Gleanster for their expertise and third-party unbiased perspective around the trends that are currently shaping and molding customer lifecycle management strategy in mid-to-large B2C companies.

Gleanster hosted and promoted a survey between March and April 2013. The study captured insights from 100 senior marketers in B2C mid-to-large companies with online and offline sales models. The results benchmarked current customer engagement tactics and validated the hypothesis that mid-to-large organizations struggle to realize relevance at scale with respect to customer lifecycle engagement.