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Four Transitions: Profiting From A Consumer Controlled Marketplace The Evolution of Consumer Control Internet/Wireless Platform Marketing 2008 Proactive Marketing Television Engagement Word of Mouth Magazines Newspaper Radio Direct Mail Telemarketing In-store Web Site Consumer Initiatives Face to Face Telephone Transformation Purchase Retail Visit Call to Center Request Information SMS Web Visit Donate MMS Email Vote Blog Mobile Etc… Social Network Email Mobile Search The Evolution of Consumer Control Internet/Wireless Platform Product Proliferation Cooking.com Macys.com Butter Dishes 1 of 2 pages Women’s Dresses 1 of 27 pages The Evolution of Consumer Control Internet/Wireless Platform Product Proliferation Channel Explosion Channel Explosion First printed ad – 1477 Postal Act/Postal Delivery – 1792 Sears Catalog - 1888 Television invented – 1928 Last 25 years Cable TV Internet Variable data printing Mobile phones iPods The Evolution of Consumer Control Internet/Wireless Platform Product Proliferation Channel Explosion Consumer Fragmentation Consumer Fragmentation Test 1. For vacation travel, which of the following destinations would you prefer? a) Paris, b) Hong Kong, c) San Francisco 2. If considering a new car, which of the following styles would you prefer? a) SUV, b) sports car, c) sedan 3. When eating out, which cuisine would you prefer? a) American, b) Oriental, c) French The Evolution of Consumer Control Internet/Wireless Platform Product Proliferation Channel Explosion Consumer Fragmentation The Decision Crisis The Decision Crisis More product choice More channel choice More decisions to be made The Paradox of Choice More Choices Less Choice When given only one choice, 2/3 of people go ahead and make the purchase. That means 1/3 choose to keep looking. When given two choices, an equal number of people choose each CD player, but nearly half decide to buy nothing. Sony One Choice Aiwa Two Choices Nothing 0 20 40 60 80 100 Source: Paradox of Choice, Barry Schwartz Growing Dissatisfaction Positive Emotions Net Feelings Number of Choices Negative Emotions Source: Paradox of Choice, Barry Schwartz Impact of Changes Lost control of information No sustainable product advantage Need to manage growing number of channels Messaging to more diverse audience Address growing consumer confusion The Four Transitions Campaign Objectives Objective Transition 1 From major channel proactive to multi-channel reactive Campaign Types Objective Type Proactive versus Reactive Campaigns Proactive campaigns are: one time events delivered to a broad audience at the discretion of the marketer. Reactive Campaigns are: delivered individually in response to a customer initiative automated with a single template that is used frequently (i.e. weekly, daily, etc…) dynamic with content based upon the individual customer initiative (i.e. products related to those purchased or browsed). Marketing 2008 Proactive Marketing Television Engagement Word of Mouth Magazines Newspaper Radio Direct Mail Telemarketing In-store Web Site Consumer Initiatives Face to Face Reactive Campaigns Thank you Retail Visit Web browser Call to Center Abandon Web Visit Replenishment MMS Email Multi-buyer Blog Mobile Search term Telephone Social Network SMS Prospect Email Pre-filter Mobile Search Transformation Purchase Request Information Donate Vote Etc… Post Order Email Web Visit Reaction Transition 1 Conclusions Marketers need to improve their reaction to consumer initiatives. For many, this will involve campaign automation due to the growing number of campaigns. Reactive communications should be implemented across multiple channels. Transition 2 From mass marketing to merchandising for the individual Campaign Targeting Objective Type Targeting Data Driven Reactive Campaigns Transaction data Browse data Life stage data Consumer supplied data Dynamic Content Rules Jane Smith, iPod Mark Rogers Laptop Computer Betsy Madden Office Chair John Shaw Sony Digital Camera Dynamic Rules Engines Web Personalization Reaction to Past Purchases Customized to past purchases Customized to home city Consumer Provided Data Collaboration Management Awareness Direct Mail Piece Engagement Problem Identifier Collaboration Transformation Thank You 1 Browse 1 76% increase in revenue per “engaged” customer Catalog Purchase Intent Qualifier Browse 2 Thank You 2 Call Center Style/Feature Qualifier Browse 3 Thank You 3 Web Site Pricing Qualifier Product Review 1 Cart Abandon 1 Broadcast Media Timing Qualifier Product Review 2 Cart Abandon 2 Print Media Blast Email Online Ads/Search 90% of marketing budget Reactivation 1 Education 1 Replenishment 1 Reactivation 2 Education 2 Replenishment 2 Anniversary 1 Education 3 Anniversary 2 All use dynamic content All can be delivered across multiple channels Bold = Automated Transition 2 Conclusions Once engaged, consumer should be addressed as individuals using the data they generate. Addressing consumers as individuals will require the use of dynamic content. Marketers will become more dependant on technology to be effective. Transition 3 From product proliferation to mass customization Campaign Experience Objective Type Targeting Experience Approaches to Mass Customization Customize the product Customize the selection Customize the delivery Factory 121 – Custom Watches Users can design their own watches by following easy to understand steps BOMC2 – Book Club The users create their Personal Reading List then get the top book from their Reading List each month. Shaw Floors Shaw Floors Shaw Floors Transition 3 Conclusions As marketers and consumers increase collaboration both parties are more likely to achieve satisfaction. Mass customization offers both marketing and manufacturing efficiencies. Executed correctly, the marketing and manufacturing process become seamless. Transition 4 From consumer confusion to simple solution Campaign Benefits Objective Type Targeting Experience Benefits Capital One Card Lab Crutchfield Crutchfield Transition 4 Conclusions Making the complex simple is the most challenging task facing marketers. Technology will be required to achieve simplicity without sacrificing functionality. Easy sells!!!!! Current Budget Allocation Future Trends Future Trends FUNCTION FUNCTION FUNCTION FUNCTION Four Transitions: Profiting From A Consumer Controlled Marketplace Keith Wardell CEO Marketing1by1, Inc. [email protected]