David Williams, Chairman and CEO of Merkle, discussed how an organization can build and maintain a data-driven customer relationship management (CRM) strategy during a Thought Leadership Spotlight Presented by Merkle at the 2014 Chief Marketing Officer Leadership Forum: Fall Event in San Francisco on Nov. 6. In his presentation, “Connected CRM: Delivering on a Data-Driven Business Strategy,” Williams noted the marketing landscape is changing, and delivering an omni-channel CRM experience is key for organizations to effectively engage consumers. According to Williams, organizations need to consider the whole spectrum of consumer experiences to improve their customer interactions. However, organizations also need to understand how to collect and leverage data across this entire spectrum: “I would argue that for most organizations, they don’t fully realize that all of this data can be managed across the enterprise and across a set of hundreds of millions or tens of millions of consumers and that there’s value in this data across the entire spectrum.” Data can deliver a competitive advantage for organizations of all sizes, Williams said. Organizations that differentiate between a customer strategy and a marketing strategy, Williams added, can find ways to incorporate data into their CRM strategies. Williams pointed out that the digitalization of media and channels is transforming how organizations connect with customers too: “We start talking about how digitalization of media and channels is changing our ability to know about consumers and their attitudes, needs, wants, behaviors, values and then how we might enhance or personalize experiences with them. In reality, many of these conversations are actually too narrow.” - See more at: http://www.argylejournal.com/chief-marketing-officer/thought-leadership-spotlight-presented-by-merkle-connected-crm-delivering-on-a-data-driven-business-strategy-david-williams-chairman-and-ceo-merkle/#sthash.IppTS2Iw.dpuf

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The Rise of the Platform Marketer: Connected CRM in a Digital World
2014 Chief Marketing Officer Leadership Forum

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The marketing landscape is changing

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Marketers can again create long-term sustainable advantage by focusing on the customer
1950s+
Age of brand
1995+
Age of channel
2013+
Age of the customer
Direct-to-consumer business model transformation
Addressability At Scale
Creation of national brands
National media and mass marketing
Internet and eCommerce
Social networks & digital media
Contenders we see
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Migration of the consumer from offline to online has hit an inflection point and is disrupting the entire consumer experience
2008
7.0——
6.5—
6.0——
5.5—
5.0——
4.5—
4.0——
3.5—
3.0——
2.5—
2.0——
1.5—
1.0——
0.5—
2008-2013
Social media 0.1 to 1.1
Digital content 1.7 to 2.4
Consumer hours spent
per day on non-digital channels are decreasing,
while use of digital channels
are steadily increasing
Hours
2008-2013
TV3.8 to 3.1
Radio1.6 to 1.4
Print0.7 to 0.4
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
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Customer strategy is fundamentally built on a consumer experience
Media
Targeting
Channel Personalization
Omni-channel Integration
Distribution
Product
Service
Operating Model Change
Minimal
Significant
Transformative
Competitive Advantage
Average
Above Average
Market Disrupting
Utilization of data and analytics to drive efficiencies in targeting addressable media at the segment or individual level
Utilization of data/analytics to personalize the media and channel experience for the consumer at the segment or individual level
Delivery of not only targeted/personalized experiences at individual points in time but across a longitudinal, cross channel experience
Introduction of new and innovative methods of distribution products/services either direct to consumers or through new forms of intermediaries
Introduction of new/innovative products/services, features, or pricing that fundamentally change the consumer experience
Introduction of new/innovative methods to deliver the product experience and service to customers through new technologies or channels
Utilization of data and analytics to drive efficiencies in targeting addressable media at the segment or individual level
Utilization of data/analytics to personalize the media and channel experience for the consumer at the segment or individual level
Delivery of not only targeted/personalized experiences at individual points in time but across a longitudinal, cross channel experience
Introduction of new and innovative methods of distribution products/services either direct to consumers or through new forms of intermediaries
Introduction of new/innovative products/services, features, or pricing that fundamentally change the consumer experience
Introduction of new/innovative methods to deliver the product experience and service to customers through new technologies or channels
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Addressability at scale is changing how we can engage consumers

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The emerging opportunity in Addressability At Scale (AAS) is the key driver of competitive advantage in the age of the customer
Addressability at scale (AAS) is defined as the opportunity to create competitive advantage
through the ability to deliver targeted, personalized experiences to consumers.
AAS 5.0
Person ID
AAS 1.0
Name & Address
AAS 2.0
Phone #
AAS 3.0
Email Address
AAS 4.0
Cookie & Device ID
1990
2014
The merchant opportunity lies in addressability and the enablement of data and analytics
The digital audience platform marketplace that is now at massive scale
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Amidst all of this scale and automation, the addressability of channels and media is increasing every day
The Addressability Spectrum
Anonymous
Partially Identified
Identified
Unknown
Some Knowledge
Well Known
Knowledge:
Identification:
Addressability uses customer data (anonymous or identified) to increase the targetability and relevance of marketing impressions and experiences 8

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1stparty data will be a key differentiator

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The core enabler of addressable marketing is the connected customer view
• Consolidated view of the
consumer across all
touchpoints
• Allows clients to analyze
their programs in context of
the whole picture
• Valuable insights on
consumer value, attitudes,
and behaviors
• Attribution – provides
foundation for effective
measurement
• Multi-media, multi-channel
optimization based on facts
Social
Print
Direct Mail
Display
Search
TV/Video
Mobile
Site
Product
LTV Segment
Demographics
Life Events
Call center
Meetings
Email
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Addressable Platforms
The marketing database is a critical asset in driving relevant and personalized experience
An Audience Platform is a digital technology that enables automated, targeted, personalized experiences to individuals (known and anonymous) at scale utilizing first and/or third party data
Customers
1stParty Data
3rdParty Data
CRM Database

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Competitive advantage will live in the addressable consumer experience

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The addressability battle will be fought in the Mid Funnel
Awareness
Consideration
Engagement
Conversion
Commerce
Experience
Unqualified
leads & waste
Upper Funnel
Mid Funnel
Lower Funnel
Media Focused
Channel Focused
CRM Focused
Unknown
High-value customer
Low-value customer
Unknown
High-value customer
Low-value customer
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Customer Remarketing
Audience 1
Audience 2
Audience 3
Addressability is fundamentally changing the role of how 1stparty data is used in media targeting.
And effecting the ability to create a personalized and optimized channel experience.
Awareness
Consideration
Engagement
Conversion
Commerce
Experience
With that in mind we need to rethink the boundaries of the Mid Funnel
Expanding the mid level opportunity CRM
Channel
Optimization
Unknown
High-value customer
Low-value customer
Unknown
High-value customer
Low-value customer
Performance
Media
Brand Media
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Business Impact
Available Addressable Impressions
+400%
Addressable Media Spend:
+300%
Cost Per Lead:
-30-40%
Targetable Re-Marketing Pool
+500%
Cost-Per-Conversion:
-40%
Average LTV per Customer:
+60%
% Personalized Interactions
+300%
Taking advantage of addressability is about “widening the pipe” and driving greater scale and efficiency
Unknown
High-value customer
Low-value customer
Unknown
High-value customer
Low-value customer
The funnel is widening and elongating
Customer Remarketing
Audience 1
Audience 2
Audience 3
CRM
Channel
Performance
Media
Brand Media
CRM
Channel
Optimization
Performance
Media
Brand Media
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But creating these experiences will not be easy

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The Addressable Experience requires the 3C’s
CONTEXT
Our applied knowledge of the consumer
Every asset we have to put in front of the consumer
CONTENT
CONNECTIVITY
When we bringthe two togetherin media and channels
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Allowing us to deliver Addressable Customer Experiences
Timing /
frequency
Platform
Device /
format
Segment
A
Segment
C
Segment
D
Segment
Lifecycle
Awareness
Product
Consideration
Request
a Quote
Start
Application
Process
CONTEXT
Message
Offer
CONTENT
Treatment
Brand
Consideration
Segment
B
Brand
Consideration
4X
Google
Mobile
A
1
Life
CONNECTIVITY
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A new operating model and competencies will be required

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Connected CRM is the framework through which we aid our clients in the organizational transformation required to exploit Addressability
The Connected CRM Framework (CCF)
Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF
Experience Delivery
Financial Management
Customer Strategy
Financial management informs customer strategy and experience delivery decisions as a closed loop process
These strategies are then translated into actionable media and channel plans that result in highly personalized, targeted experiences
Portfolio Strategy
Segment Strategy
Program Strategy
Experience delivery performance is continuously attributed across media and channels which, in turn, drives optimized budget allocation
Media Planning
Channel Planning
Targeting & Personalization
Measurement & Attribution
Budget Allocation
Infrastructure & Business Process
Leadership & Organization
What data, processes, systems, tools and technology will be necessary?
What outcomes are we trying to create and how do we organize to enable them?
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The Platform Marketer™ embodies the collective competencies needed to successfully exploit addressability at scale
Marketers must evaluate their own
competency level and decide how best to fill
gaps internally and with external expertise
In the highly digitized world of AAS, a new set of competencies must be attained by the marketer
We call the personification of those collective skills The Platform Marketer
While new processes, data, and technologies must be implemented (what we call Connected CRM), these digital platform competencies must first be addressed
j
Identity Management
Audience Management
Consumer Privacy& Compliance
Media Optimization
Platforms Utilization
Channel Optimization
Experience Design &
Creation
Measurement and attribution
Marketing Technology
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A new set of technology assets will be required

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The landscape has gotten very complex
Platform marketers has strong expertise in state of the art and emerging marketing technology and how it drives business value
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Therefore, we must rationalize the tech stack to support an addressable customer experience
Audience Platforms
Workflow
Channel Execution
Media Execution
Marketing Database
Identity Management
Application Integration
DSP
Search
Ad Serving
Site
SFA/Contact Center
Business Rules Engine
Personalization Engine
DecisioningAlgorithms
Audience Management
Real-Time Data Transfer
Syndication
Connected Attribution
Forecasting/Simulation
Business Intelligence
Onboarding
CDI/DDI
Event Management
Customer 360°
Preference Center
Event Stream
Campaign Management
Content Management
MRM
Messaging
Mobile
Web Services
APIs
Tag Management
Analytic Management Platform
Data Management Platform
Decision Management Platform
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Organizing around the customer can be difficult

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Evolving the capability and operating model together as a key driver of success
Operating Model
Infrastructure focus, basic capabilities
Single campaign, simple data, little offer and customer customization
Basic multi-channel, model integration, and campaign automation
Contact Optimization, multi- touch campaigns, integrated measurement platform
Customer Value Optimization
fully integrated programs & campaigns
Capability Maturity
Ideal investment zone
[Key decision maker]
Level 1
Level 3
Level 4
Level 5
Level 2
Over-invested (poor return on capital)
Under-invested (poor return on management bandwidth)
Bottom-up path builds infrastructure and seeks to leverage incremental gains to expand effort and drive organizational change
(requires permission)
Top-down path compels
Organizational change and rapidly
enables infrastructure for
efficiency and effectiveness
(requires sponsorship)
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27. © 2014 Merkle. All Rights Reserved. Confidential
But generally a phased approach will create the best outcome
•Streamlined campaigns
•Recommender system enables 1-to-1
•Name/address hygiene
•All addressable media
•Web data integration
•Two way interaction
•Real-time integration
•Real-time Two way interaction
•Store & POS integration
•Call center integration
•Media & Marketing Mix
•Segmentation alignment
•Addressable TV
Offline
Channel
Integration
Digital Channels
Integration
Mass Media
Integration
Digital Media
Integration
Email and DM
Phase
1
Phase
2
Phase
3
Phase
4
Phase
5
Fully
Integrated
Experience
Connected CRM Platform
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And the benefits can be rewarding

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For most organizations, the impact of effective cCRMcan be quite rewarding to both margin and growth
$39MM
$104MM
$201MM
$452MM
NPV of Revenue Impact
Year 1
Year 2
Year 3
Years 4+
Acquisition of new customers
Reduction in churn
Improvement in NPS Scores over Baseline*
$15MM
$43MM
$93MM
$256MM
$24MM
$61MM
$109MM
$196MM
+5
+25
+10
+5
•
Use Connected data to understand/predict/model NPS results across subscriber base and target subscribers for Promoter maintenance or Detractor intervention strategies
•
Roughly 1bp (~31k subs) reduction in Voluntary Churn YoYover next 5 years
•Combine Customer service, Billing contacts with customer data to improve churn rates
•
1%-3% increase in customer acquisition over 5 years
•
Increased response/conversion from digital media efficiency by connecting Anonymous Data to CRM data for better targeting, measurement and segmentation
•Increased effectiveness of remarketing and personalization (offer/package) in Search, Display, Site and Email
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Thank YouDavid WilliamsCEOMerkledwilliams@merkleinc.com