One-to-One for Millions Winning in Dialogue Marketing

I buy your products because I have a consistently positive experience with your brand. Whenever, wherever and however we interact, you recognize my needs, you add value, you reward me, you adapt to my context and you respect my privacy. You make me feel like one in a million.

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A century ago, people could go to the trusted corner store and buy products from a shopkeeper who knew their name, knew their order, suggested new items based on what they liked and credited the tab without hesitation. Consumer relationships were with the retail store at the point of purchase. Flash forward to today. Companies across industries can simultaneously have oneto-one dialogues with millions to develop meaningful relationships across multiple geographies, segments, channels and brands. Manufacturers can now learn about in-store experiences and form direct consumer relationships beyond the point of purchase. While separated by the passage of time and the countless changes it brings, these experiences are surprisingly similar. Both drive value from personalized one-toone interactions. Both put a premium on developing unique relationships with individual consumers and building them through ongoing dialogue. And both teach something fundamental about how to win today in marketing.

Having a two-way conversation With countless brands in the world, it is clear that consumers are in control. Their choices are endless—and so are their expectations. They want relevant offers online, on the go and at the store. Dialogue marketing is about rebalancing this control with one-to-one, personalized dialogues with consumers.

combination of strategies, data, analytics tools and automation technologies. These must work together to support real-time, cost-effective action at scale that balances global brand identity with local market influences—and turns on a dime as needs change.

Dialogue marketing has been made possible by the digital revolution. Digital—whether through online, social media or mobile channels—offers companies entirely new ways to connect with consumers. This means an opportunity for manufacturers and traditionally nonconsumer facing companies to defy marketing norms and begin to “own” consumer relationships in unprecedented ways.

Today, dialogue marketing is not a “niceto-have,” it is a “must-have” that can drive significant value in revenue generation and cost savings according to Accenture research (see Figure 1). It also helps marketers manage consumer preferences, attain consumer loyalty, promote brand upscaling and increase share of wallet from the best customers. Companies that do not distinguish themselves, or worse, fail to reach parity in dialogue marketing, will not realize these benefits, likely losing customers and market share.

Dialogue marketing focuses on getting consumers’ attention, learning from and about them, understanding their intent, and sustaining their engagement with relevant and personalized online experiences. Getting it right requires a

This paper explores the dialogue marketing imperative in the digital age. What changes have influenced its rise? Why is it so important today? How is it reinventing marketing? And what must companies do to get it right?

Figure 1: Dialogue marketing delivers new value—and competitive distinction Revenue Levers

Cost Savings

Solution Areas

Benefits

Solution Areas

Benefits

Acquisition

5-500%

Centralization

3-5%

Cross-sell (growth)

10-300%

Automation

5-10%

Retention

5-75%

Process Standardization

3-5%

Campaign cycle time 6

30-60%

Process Optimization

5-10%

Campaign response rate 5

5-20%

Shifting Channel Online

5-15%

Revenue CAGR 5

10-50%

Labor Arbitrage

10-20%

Total Revenue Growth

5-300%

Total Cost Decrease

15-40%

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Going beyond the digital revolution A leading global company told analysts that digital can be “more efficient” than traditional media. The world’s largest marketer increased its traditional advertising spend by 24 percent for a two-year period through October 2011, yet sales rose only 6 percent during this time. A top global firm spends a little over one third of its advertising budget on traditional media while the rest focuses on customer experiences. Research indicates that among millennials digital advertising performs better than television advertising.1 Trends like these confirm several fundamentals that very few, if any, marketers would deny. The digital revolution has arrived. It is here to stay. And digital can deliver a world of new value. In essence, savvy marketers know that the primary question is no longer one of if there will be a shift to digital. Rather, the million-dollar question is around how large the shift must be for digital to truly deliver financial impact. What kind of value are marketers looking to gain? Several studies point to the significant impact that digital can have. For example, recent Accenture/comScore/ dunnhumbyUSA research highlights the potential for brand websites to become key drivers in building customer loyalty and preference for brands by creating unique brand experiences. By matching Internet browsing data to pointof-sale data, the study revealed a number of eye-opening trends. For one, visitors to consumer packaged goods websites spend 37 percent more than nonvisitors on the

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brand in retail stores. The study also revealed that these site visitors buy 48 percent more units and make 35 percent more buying trips.2 Similarly, a recent comScore study suggests that a brand’s Facebook content can influence consumer fans’ and friends’ purchasing behaviors at the store.3

Evolving in the experience economy Studies like these suggest that there is something about digital that can uniquely engage consumers—relevant and distinct consumer experiences. In fact, digital marketing success lives or dies by marketers’ ability to cost-effectively create and scale these experiences. When Pine and Gilmore wrote about the experience economy nearly 15 years ago, their thinking could not have been more prescient. Noting the historical movement through agrarian, industrial and servicebased economies, they describe how the service economy will give way to an experience economy where “leading-edge companies—whether they sell to consumers or businesses—will find that the next competitive battleground lies in staging experiences.”4 The trajectory of the experience economy has been exponentially heightened by the digital revolution, which provides once unheard of access to a multitude of digital consumer experiences. As such, the consumer experience powered across multiple digital channels is the new marketing currency, and it is driving a new marketing mix.

Shifting from push to pull This new and increasingly complex marketing mix commonly reflects a balance of multichannel campaigns, loyalty programs, social communities, e-commerce, mobile and online advertising. A company’s size, geographic presence, number of brands, target audience segments, and marketing budgets influence how companies emphasize different elements of the marketing mix. Whatever the marketing mix, marketers must embrace a fundamental philosophy to succeed at delivering individual consumer experiences that drive value and competitive distinction. They must shift from traditional “push” strategies to more dynamic “pull” strategies to connect with consumers rather than market at them (see Figure 2). This is where dialogues can begin. 1

Doug Crang, “Next-Generation Strategies for Advertising to Millennials,” comScore, January 2012.

2

Accenture/comScore/dunnhumbyUSA research, 2011.

3

Andrew Lipsman et al., “The Power of Like2: How Social Marketing Works,” comScore, June 2012.

4

B. Joseph Pine II and James H. Gilmore, “Welcome to the Experience Economy,” Harvard Business Review, July-August 1998.

Figure 2: The dynamic between marketers and consumers has shifted from push to pull Push Marketing

Pull Marketing

Interruption

Engagement

Reactive

Interactive

Return on investment

Return on involvement

Marketing at

Connecting with

Go Viral

Create something to talk about

Promotion

Listen

Views or impressions

Content sharing is the killer metric

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Winning in dialogue marketing To have dialogues with consumers, companies must go from a single uniform message that is sent to everyone to personalizing their messages to thousands, or millions, consistently across channels. This is a significant challenge considering the exponential increase in complexity of today’s marketing investment. Marketers must contend with a raft of complicating inputs—from a dynamic channel mix and houses of multiple brands to an unprecedented data influx and geographies with diverse languages and cultures. Working with marketers across industries, Accenture has found that there are three essential components to create effective consumer dialogues: • Acquire. Consumers accept brand communication, perhaps at the point of purchase, or through e-mail, social networks and mobile messages. • Engage. Companies create an experience across every channel, one that develops an emotional connection to their brands.

Putting these building blocks into play and achieving the desired returns from dialogue marketing programs require key success factors: 1. Demand a relentless focus on content The days of cranking out mediocre content are gone. From consumers’ perspectives, content is the experience, and as such, it is also the brand. Companies must work hard to ensure that their content is informative, entertaining and well executed to capture consumers’ interest, earn contact information, drive downloads and rise to the top in an environment where consumers’ attention comes at a premium and is often fickle and fleeting. Content winners use social customer relationship management as their marketing foundation, engaging meaningful dialogues based on insights from social activity. They also understand that the contactable percentage of all buyers is a measure of brand loyalty. Winners use progressive profiling, lead nurturing, tracking people and IP addresses while contacts are still anonymous and associating past behaviors to names only when trust is earned.

Getting content right in dialogue marketing also means building on this trust to cultivate deep relationships with content sharers and rewarding them for sharing. It’s about going beyond the simple click to fostering social media mentions. For example, one of the fastest-growing and most popular interactive campaigns in history resulted in more than 1 billion campaign impressions and a significant uptake in product sales. There are also rich opportunities for companies to use dialogue marketing to support cross promotion via loyalty campaigns like the recently launched Kellogg’s Family Rewards™ program. Marketers can also tailor specific campaigns and content around trigger events to target marketing offers to personas and buying stages. Making these content approaches a reality demands changes to the status quo. Content production must be commoditized to minimize cost and support speed to market. Marketers will need to look beyond traditional agency relationships to automate content production, management and distribution using standardized solutions to manage content workflow, processes, governance and approvals.

• Optimize. Every relationship is mined to build more incremental sales. Using in-depth customer profiles, companies optimize the content and offers, and deepen the relationship.

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2. Deliver relevance at scale

3. Rely on the right technology foundation

4. Develop a plan for big data

For content to have resonance— and drive marketing and business performance—it must be relevant to consumers. Relevance comes from understanding and responding to consumer interest and intent. Not just one consumer sometimes, but millions of them all the time.

Scale is impossible and cost prohibitive for companies of any size without automation. The real-time capability and responsiveness essential in dialogue marketing also requires automation.

While the technical platform can integrate countless sources of consumer data—which fuels meaningful one-on-one interactions— data management can be a challenge for dialogue marketers. The sheer magnitude of structured and unstructured data available can be overwhelming. Making the most of data insight is both an art and a science and companies need precise and effective strategies to prioritize and analyze data input.

Understandably, marketers struggle to connect data from multiple touch points to create a single customer view amid the complexities of hundreds of brands, segments, channels and geographies. Not surprisingly, taking advantage of the increased opportunities for personalization at the single consumer level that digital affords demands the ability to provide truly granular insight via relevance at scale. This is the ability to unleash relevant experiences across all channels, consumer intent segments and geographies consistently. Doing this means cost-effectively scaling every essential function—channels, actionable data insights, segmented content, enabling technologies and more—while continually monitoring performance in real time and rapidly responding to new consumer insights.5 To do this, companies must rethink organizational structure, aligning both marketing and sales and marketing and technology departments in new ways. Working to centralize services via a more flexible operating model is also a key foundation for scaling cost effectively. This can position companies to take advantage of economies of scale across brands and geographies, eliminating the inefficiency of multiple agencies and streamlining campaign management.

Consider a successful loyalty program that has millions of participants—many of whom are regularly and actively involved. These participants expect immediate, personalized responses, which would be impossible without the real-time and cost-effective agility of automation. Automation requires the right technology foundation. This means a singular, integrated open technical platform that facilitates customer data integration from multiple sources including consumer databases, e-mail service providers and social media. The platform must also provide strong analytics capabilities, deep reporting and intuitive dashboards that provide actionable insight down to single consumer views that show the campaign and promotional history for proactive, insight-driven engagement with consumers. An effective platform for dialogue marketing must also allow rapid on boarding and integration of traditional batch channels such as direct mail as well as the latest real-time channels. Real-time consumer interaction capabilities such as standard services for registration, optin management, loyalty program points, capture survey responses and password management are essential as well.

The data management strategy must take this into account while intelligently leveraging all consumer data—from sources including e-commerce platforms, product registration, e-mail campaigns, Web analytics, social media, service and support databases, product reviews and demographics and psychographics—to provide a 360-degree consumer view. 5. Maintain a continual focus on performance outcomes Mastering data management, winners in dialogue marketing also keep a laser focus on outcomes at every stage—they begin with outcomes in mind, and they continuously measure performance metrics to make proactive enhancements. It is a virtuous circle that reflects a distinct cultural bias for a continuous process of “test and learn” experimentation. This approach requires organizations to understand the value of metrics. Metrics allow people to embrace any tactics to achieve business goals if and only if they understand which tactics are working and which are not. Performance metrics also establish organizational memory, allowing companies to move faster and more confidently when metrics are monitored continuously. Companies should do an independent performance assessment— rather than solely relying on agencies that typically track their own campaigns—to have access to the most objective metrics.

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Got the R Factor? Digital Marketing in the Era of Consumer Relevance, http://www. accenture.com/us-en/Pages/insight-got-the-rfactor-summary.aspx.

A day in the life of dialogue marketing Susie is a busy young professional who loves to cook. Never without her smartphone, she notices an ad for a delicious, healthy pasta dish while taking the subway to work. She takes a picture using an app on her smartphone. The app provides menu variations and an ingredients list, which she immediately saves to her shopping list. Once at her desk, Susie checks her e-mail and opens a coupon that is redeemable at stores close to both her office and her home. At lunch, a colleague introduces Susie to a new organic juice that she loves. She takes a picture of it with her smartphone, which prompts a message asking her if she wants to add the juice to her shopping list. When Susie arrives at the grocery store after work, she checks in as a club member. Her entire shopping list is displayed according to the store’s layout. Checking in rewards Susie with loyalty points. She also updates her social media friends on her location. While shopping, Susie receives an alert via text message from the store based on loyalty data. As a frequent wine buyer, she is invited to an in-store wine tasting event. In the produce section, she connects with a live expert who offers suggestions for a seasonal side dish. At checkout, Susie’s digital loyalty card is scanned by one of the store’s point-of-sale devices. Susie pays with a gift card from her mobile wallet. At home, she watches a video of a chef making the pasta recipe before she prepares it herself. A few days later, Susie gets a text message from the store asking her if she liked the recipe. She is given the option to create a review, and prompted to share the recipe on social media for extra loyalty points.

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Toward a new marketing model As marketers drive toward these success factors, many may discover that supporting them, or better yet, sustaining them, will demand an evolution in the marketing model. As Geoffrey Moore writes, “Over time, successful companies must evolve their competence or become marginalized.”6 To determine the way forward, there are fundamental questions marketers must ask and answer: • Are we ready to embrace real-time dialogue marketing in our organization? • Is our content production factory ready? • Can our big data environment handle petabytes of data to support optimization of relevant, real-time dialogues? • Do we have the right technology foundation in place to support personalized, relevant real-time dialogues with millions?

• Do we have the right people and resources to support dialogue marketing at scale? • Is our digital dashboard ready for optimizing against metrics to drive further outcomes? While powered by the latest in technology, analytics and next-generation marketing know-how, dialogue marketing reflects a simple, if not traditional, premise. One-to-one connections with consumers matter the most. So just as yesterday’s local shopkeepers had relationships with consumers for years, multinational corporations must develop and sustain meaningful connections with today’s consumers to drive preference and competitive distinction. Achieving next-level marketing performance can no longer be about sending generic messages to many hoping to persuade a few. Instead, it’s about having one-to-one dialogues with millions—all at the same time.

For more information Jerry Lohse Senior Director, Accenture Interactive +1 561 704 9443 [email protected] Matt DeNicola Senior Director, Consumer Goods and Services, North America +1 917 452 6435 [email protected] Alessandro Diana Senior Director, Consumer Goods and Services, EALA +39 335 7496716 [email protected]

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Geoffrey Moore, Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution, Portfolio Hardcover, Penguin Group, 2005.

Toward a new marketing model Planning How will my marketing programs deliver business value for my brand?

Optimization

• Annual brand planning workshops, company-wide innovation workshop • Develop business value goal, campaign plan, and measurement plan

How do I increase the business results of my programs over time? • Common metrics allow identification of company-wide best practices • Best practices shared in brand planning and measurement checkpoints • Company-wide P&L demonstrates total CRM value

Execution How will I deliver flawless campaigns, at a low-cost, with business agility?

Measurement/Insights How will I know what is working and not working, and what actions will improve my programs?

• Common pool of on-shore and off-shore • Keeps costs low while flexibility with resources provides a fast turn-around for business agility

• Real-time dashboards • Quarterly/monthly reviews of measurement plan, insights and recommended changes

Copyright © 2012 Accenture. All rights reserved.

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About Accenture Interactive Accenture Interactive’s 1,500 professionals help the world’s leading brands drive superior marketing performance across the full multi-channel customer experience. Leveraging the full scale of more than 249,000 Accenture employees serving clients in more than 120 countries, Accenture Interactive offers integrated, industrialized and industry-driven marketing solutions and services across consulting, technology and outsourcing powered by analytics. Follow @AccentureSocial or visit accenture.com/interactive.

Copyright © 2012 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 249,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US $25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.