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1
Adaptive Customer Enterprise
Transformation
2
“CRM Initiative” success rates are still too low
Today, only about half of
CRM initiatives* have
some degree of success,
with the other half
bearing little to no
success.
Improvements since
2004 are not enough to
celebrate.
12%
29%
39%
14%
5%
2004
17%
35%
25%
12%
6% Failure
Some
success
Somewhat
Failed
Neutral
Complete
success
2013
Improvement in CRM Initiative
Success Rates, 2004-2013
*Your organization's MOST significant initiative
from the past 36 months where the goal was to
better identify, engage, sell to serve, and/or retain
customers based upon their value.
3
Change is hard.
We asked successful executives how they did it.
In first half of 2013, Merkle launched a comprehensive survey of more than 350
leaders within large US enterprises to discover what makes change succeed or fail.
Both of these cuts gave us a window into what drove successful change.
Two segments: High-growth and
low-growth
In addition to asking them tough questions,
we further segmented the respondents by
their financials to identify high-growth vs. low-
growth organizations as a likely indicator for
winners and laggards.
Proximity to ideal CRM
We asked them to self-identify as to how
close they were to the ideal of CRM, in other
words, whether or not they were doing a
good job implementing a customer-centric
business strategy, in their own opinion.
4
Survey Firmographics
• Fortune 50 Bank (multiple) • Fortune 25 Automotive Company • Fortune 50 Auto, Home and Life Insurers (multiple) • Fortune 75 Healthcare Company
352 responses Cross-industry sample US $1 billion
>50% are C-level Broad representation Evenly split
Completed and analyzed in first half of 2013
Or above; all are AVP across Sales, Operations, Marketing,
Finance and IT
Between b-to-b and b-to-c (25%+ are both)
In revenue and higher with about a
quarter > $50B
Spanning banking, insurance, travel, media, entertainment,
communications, retail and high tech
Respondents include
5
Low growth organizations don’t see strategic value
of CRM
36%
22%
25%
32%
Critical, way of life
Important management
tool
Senior Management Attitude toward CRM
Higher Growth
Organizations
Lower Growth
Organizations
1/3 less
strategic
50% more
tactical
6
High growth organizations have better CRM capabilities
16%
3%
14%
4%
16%
1%
17%
2%
20%
4%
16%
4%
28%
12%
20%
8%
26%
16%
17%
15%
32%
24%
19%
13%
My organization is routinely able to …
Among the best anywhere Well Above Averge
1.9x
2.1x 2.5x 2.9x 2.1x 2.8x
© 2013 Merkle. http://www.merkleinc.com/transformation.
Lower Growth
Top Growth
Lower Growth
Top Growth
Lower Growth
Top Growth
Lower Growth
Top Growth
Lower Growth
Top Growth
Lower Growth
Top Growth
Information Insights Optimization Targeting Measurement Agility
Manage a comprehensive view
of customers
Understand, identify, segment, and
manage customers based upon their
value
Allocate resources to optimize long-term
customer value
Customize and personalize
customer interactions
Understand the incremental impact
of each marketing activity
Respond to changes in customer,
competitor, or marketplace
conditions faster than competitors
7 7 7
Organization and
Process Change
8
Emergence of the Customer Experience
Marketing Organization
1-2-1 Integrated
Engagement
Interactive Marketing
Channel Interaction Experience
Traditional DM and Analytics
Increase the coordination of direct engagements across media and channels to
create informed, deliberate interactions that anticipate and address the needs of
customers and maximize value.
1. Integrate strategy planning and
budgeting at the product/segment
level across media and channel.
2. Leverage data for targeting,
personalization and measurement
within and across media/channel to
improve customer experience and
financial outcomes.
3. Integrate execution for innovation,
efficiency and speed to market.
9
Redefining Planning for Integrated Experiences
Search / Media
Execution
Tactics
Media
Optimization
Execution
Tactics
Media
Optimization
Direct Mail
Execution
Tactics
Media
Optimization
Execution
Tactics Optimization Channel Interaction
Identification Channel
Optimization
Program Planning
A comprehensive Program Plan defines overarching
business objectives and strategies, the test and learn
approach, and individual media tactics to be employed.
Targeting: Audience/Offer Selection
A consistent and holistic targeting approach is taken for
all media involved in the program. Targeting may be
applied differently, and there may be media-specific
metrics, but there is one over-arching approach.
Media Planning and Campaign Execution
Media-specific executions leverage best
practices and optimize program outcomes
Site / Landing Page
Execution
Tactics
Media
Optimization
10
ENGAGEMENT
AWARENESS CONSIDERATION APPLICATION
3
2
1
Sent 30 days before card
launch, this EXCLUSIVE
focused communication
emphasizes the customer
recognition in the form of first-
to-hear-about opportunity.
This important DM kit is sent to
this whole audience repeating
the EXCLUSIVITY of this card
launch. Includes a special
message for those that
registered. EM is also sent
echoing the content of the DM.
Key Considerations:
Pre-launch
invitation
EM
Registration
response
EM
Bank.com,
Customer
Channel
Messaging
Hard Launch
DM
Application
Start
Completed
Application
Rewards
Card Page
Visit
3rd Party Site
Display
Targeting EM Triggered
through
Identifiable
Data Platform
Incomplete
Application
Direct Match
List of Bank
Customers
EM
Follow-up
Welcome
Com Stream
Paid Search Organic
Search
MASS AFFLUENT
Special
Invitation
At Launch
Reminder
Direct Match
Search
Remarketing 4 Search
Marketing
Registration
landing
1
2
3
4
Executing Integrated Experience Delivery (Credit Card Example)
11
The CMO and CIO roles are intersecting more
than in the past and need to be redefined
EDW
Campaign
BI
Enterprise
Data
Warehouse Marketing
Data
Warehouse
Marketing technology has been…
• A secondary function of IT
• A downstream subset of operational systems
• Fairly static environments
12
CMO’s must be technology enabled and adaptive
Technology enabled Marketing…
• A primary function of IT
• Directed by a technology savvy marketing organization
• A superset of operational systems and data
• Highly adaptive environments
EDW
Enterprise
Data
Warehouse De
cis
ion
ing
Marketing
Data
Warehouse Sys
tem
s
13 13 13
Adaptive Customer
Enterprise Evolution
14
Customer
focused
Business unit /
media
engagement
Campaign
focused
Connected Customer Relationship Marketing Maturity
Model
Level 1
Level 2
Level 3
Level 4
Level 5
Enterprise
engagement
Single campaign, Infrastructure focused, basic
targeting capabilities
Basic multi-channel, simple models, little offer
and customer customization
Multi-touch campaigns, model integration,
and campaign automation
Enterprise segmentation, contact optimization,
integrated measurement platform
Customer Value Optimization
fully integrated programs
(both media & channel)
Low value
High value
Moving
from
Level 3
to Level 4
is hard.
15
Connected CRM (cCRM) Framework
Experience Delivery
Financial Management
Customer Strategy
Portfolio Strategy
Segment Strategy Program Strategy
Media Planning Channel Planning
Targeting & Personalization
Measurement & Attribution
Budget Allocation Infr
astr
uctu
re &
Bu
sin
ess P
roce
ss
Le
ad
ers
hip
& O
rga
niz
atio
n
16 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
Over-invested (poor return on capital)
Under-invested
(poor return on management bandwidth)
Ca
pa
bil
ity M
atu
rity
Ideal investment zone
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) Level
1
Level
3
Level
4
Level
5
Evolving Capability and Operating Model
Level
2
17
Most significant CRM initiatives are driven from the top
Source: Customer Centric Transformation 2013 Research study.
© 2013 Merkle..
18
The CEO is getting more involved
Source: McKinsey Global Survey Results August 2013
(850 C-level executives)
19 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
Ca
pa
bil
ity M
atu
rity
Ideal investment zone
[Director]
[Vice President]
[CMO]
[C-suite]
[CEO]
[Key decision maker]
Level
1
Level
3
Level
4
Level
5
Evolving Capability and Operating Model
Level
2
20
Leadership and Alignment Drive Success
• Lack of ownership and leadership were key
challenges to effective CRM
• Challenges could easily be addressed by a
committed and aligned leadership team Source: McKinsey Global Survey Results August 2013
(850 C-level executives)
53%
43%
38%
38%
36%
36%
32%
28%
25%
14%
15%
14%
16%
19%
17%
15%
13%
16%
Lack clear organizational ownership of customer insight
Management bandwidth and priorities
Lack executive sponsorship
Lack the right technology skills internally or not an IT priority
Lack understanding on how to use customer insight to improve the business
Lack or can't get to good integrated customer data
Too hard to align customer strategies across the organization
Lack the right analytical skills internally
Business value is unclear or insuf f icient
Far Away Nearing Ideal
Challenges to CRM based upon overall maturity
Source: Customer Centric Transformation 2013 Research study.
© 2013 Merkle..
21 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
Ca
pa
bil
ity M
atu
rity
Ideal investment zone
[Director]
[Vice President]
[CMO]
[C-suite]
[CEO]
[Key decision maker]
Level
1
Level
3
Level
4
Level
5
cCRM Evolution Examples
Level
2 • One leader over 1-2-1 marketing
• Integrated, data driven outbound marketing
• Coordinated inbound channel prompts
• Product driven and measured
• Actionable segmentation but not adopted
across enterprise
Sponsor
• Head of Corporate Marketing
Alignment
• Channel interaction group
• Data & Insights (partial)
Plan?
• Strong plan within sponsor scope
Bottoms Up – sponsored & planned
22 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
Ca
pa
bil
ity M
atu
rity
Ideal investment zone
[Director]
[Vice President]
[CMO]
[C-suite]
[CEO]
[Key decision maker]
Level
1
Level
3
Level
4
Level
5
cCRM Evolution Examples
Level
2
• Strong, but separate online and offline 1-2-1
marketing teams
• Technology enablement aligned to outbound one
way communication. Some development
happening in digital
• Select integrated programs across media.
• Product driven and measured (with periodic
value fucus)
• Segment organization, however budgets and
optimization reside with LOB’s
• Attitudinal enterprise segmentation, disconnected
from targeting and optimization
Sponsor
• No active executive sponsor
Alignment
• General alignment across many
functions, but many competing
objectives
• CMO directionally aligned but not
actively sponsoring
Plan?
• Absence of defined plan
Bottoms up – lacking sponsor & plan
23 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
Ca
pa
bil
ity M
atu
rity
Ideal investment zone
[Director]
[Vice President]
[CMO]
[C-suite]
[CEO]
[Key decision maker]
Level
1
Level
3
Level
4
Level
5
cCRM Evolution Examples
Level
2
• Well developed off line direct and emerging
online direct
• Executive sponsorship for operating model
change.
• Active governance committee
• Aligned definition of end state
• Started with operating model development
• Following with capability model development
• Bottoms up capability development
Sponsor
• Head of Consumer Bank
Alignment
• Active governance board across
key stake holder executives
Plan?
• Multi-generation plan across
capability and operating model
Top down – Exec Sponsor & Plan
24 24 24
Effectively Driving
cCRM Evolution
25
Be clear on where you are and your
scope of sponsorship
• Where are you today?
• Are you in or out of the ideal
investment zone?
• Are you leading with capability
or operating model?
• What scope of sponsorship do
you have?
• How can you educate and align
the necessary stakeholders?
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
Ca
pa
bil
ity M
atu
rity
[Director]
[Vice President]
[CMO]
[C-suite]
[CEO]
Level 1
Level 3
Level 4
Level 5
Level 2 ?
1. Create an integrated plan within your
current scope limitations
2. Find a path to executive dialogue around
the adaptive enterprise requirement
26
Organizing Around Change
Executive sponsorship and governance team
Change champions – CRM vision stewards – Organizational integrators
Program governance, value pro forma and business results
Customer engagement vision 1
CRM capability and gap assessment 2
Technology assessment 3
CRM blueprint
and roadmap 4
Time
New and
revised
initiatives Culture and
People Change
Management
Data and
Applications
Decision Process
Change
Organizational
Realignment
Existing initiatives for change
5
27
Executive Governance
Example Retail Bank Team
• President
• Product and/or Segment
• Corporate Marketing
• Database Marketing
• Digital Marketing
• Insight and Analytics
• Sales & Distribution
• Branch sales and support
• e-Business
• Contact Center
• Technology
• Finance
Objectives
• Be champions for lasting change
• Align enterprise to common vision
• Apply value-lens in prioritizing
alternatives
• Integrate initiatives across groups
• Ultimately, track business results and
impact
Executive sponsorship and governance is a key ingredient for
driving lasting change within organizations
Executive sponsorship and governance team Change champions – CRM vision stewards – Organizational integrators
28
Organizing Around Change
Executive sponsorship and governance team
Change champions – CRM vision stewards – Organizational integrators
Program governance, value pro forma and business results
Customer engagement vision 1
CRM capability and gap assessment 2
Technology assessment 3
CRM blueprint
and roadmap 4
Time
New and
revised
initiatives Culture and
People Change
Management
Data and
Applications
Decision Process
Change
Organizational
Realignment
Existing initiatives for change
5
29
It Starts with the Customer Journey
Evaluate Embark Engage Expand Exit
Need Triggered
by Life Event
Receive
Acquisition Offer
Visit Branch
Learn about
Products
Compare to
Competitors
Review
Application
Initiate
Application
Provide
Required
Information
Fund Account
Receive Account
Materials
Create Online
Account
Make
Deposit/Withdra
wal
Use Credit/Debit
Card
Make Payment
from Account
Receive
Statement
Resolve Account
Issue
Close Account
Complete Loan
Term
Add/Change
Product
Request Service
Resolve Issue
Receive Cross-
Sell Offer
Receive
Acknowledgment
for
Business/Loyalty
Refer
Friend/Family
Customer engagement vision1
30
End State Customer Vision
Customer Interaction
Opportunity Workshop
Customer Interaction
Visioning Workshop
Customer Interaction Mapping
Customer engagement vision1
31
Organizing Around Change
Executive sponsorship and governance team
Change champions – CRM vision stewards – Organizational integrators
Program governance, value pro forma and business results
Customer engagement vision 1
CRM capability and gap assessment 2
Technology assessment 3
CRM blueprint
and roadmap 4
Time
New and
revised
initiatives Culture and
People Change
Management
Data and
Applications
Decision Process
Change
Organizational
Realignment
Existing initiatives for change
5
32
Capability and Technology
Downstream Systems &
InterfacesData Sources Marketing, Reporting &
Analytics
Feeds Outside of EDW
IB Email
AddressIVR ATM
Relevant Siloed Data
ATG
FNA
Mainframe
DB2
One Account Table per
Servicing System (Subject
Area)
End of Day Snapshot
Summary – No Txn Detail
Monthly Summaries
Commercial
AFS Commercial Loan*ACBS Commercial Syndications/ParticipationsBTRD Banktrade*DSI Commercial Lease*CCAS Commercial Credit Info*WSS Wall Street (foreign exchange)XAA Treasury Mgmt ServicesXAF Treasury Mgmt Vantiv
Consumer
UDS Deposits*ACH Automated Clearing AGL Deposit SweepsGPR Access 350*ACAP Consumer AppsTSYS Credit Cards*BCRD Debit & Credit Cards*ALS Consumer Loan*FSER Mortgage Loan*ALAS Consumer Lease*IDA ID AlertSBA Safe Deposit Box*BKH Small Business AppsTPP Third Party ProductsTDEP Time Deposits (CDs)*
Investment
AMTR Asset Disposition InfoPRGN InvestmentsWPN Wealth PlanningTRST Trust*IA Brokerage, Insurance & Annuities*
Other
CRM Customer Relationship MgmtFCS General LedgerOFSA Funds Transfer Pricing & Organizational HierarchiesCLCS Construction LoansGEAC Accounts PayableFNET Scanned Forms Data
JC
L B
atc
h
EDW
Backend to ACE, FNA, & IB
Customer Profile
(Webservice)
Customer System of
Record
Creates Customer Key
Performs De-Duping
Currently Oriented around
Consumer System Data
Customer Information with
Demographics
Accounts are associated to
Customer
Pitney Bowes Code 1
Standardizes Addresses
when Created or Updated
(but can be overridden)
ECIFIBM MDM Product
Da
ta S
tag
e
Account
- Daily Activity by Deposit / UDS
- Daily Activity by Bankcard
- Daily Activity by Access 360
- Monthly Balance By Servicing System
- Monthly Revenue By Product And Revenue
Type
- Suppressions
Household
- Head of Household Address
- Derived Channel Preference
- Patronage Statistics
- Product and Service Indicators
- Matrix Segment Code
- IXI
See Data Processing Footnote for Build Details
Marketing
Data Mart
(MDM)
DB2 UDB
Daily
Monthly
SAS
Analytics
Unica
Campaign
Management
Business
Objects
Reporting
Direct
SQL
Access
Internet
Banking
IVR
Genesis
Platform
ATG
Oracle
Offer
ListsMonthly Manual
ATM
Phoenix
ACE
Web
Sphere
CAMP
Manual?
Weekly
(Onboarding)
UDS
IXI
Demo-
graphics
Harte Hanks
Unica
Detect
ListsAd-hocManual Scrub / Suppressions
IBM Quality
Stage
Householding
Activity L
aye
r
IBM AIX
6.1
IBM AIX
5.3
Unix AIX
6.1
Windows
Server
2003
Campaign
Lists
Ad-hoc
Unica
Promotion
Hist
Some DM
Response
Files
Ad-hoc
An
aly
tica
l L
aye
r
Ho
use
ho
ldin
g L
aye
r
Also used for Financial
Center P&L. RM
Booked Reporting
Monthly
& Ad-
hoc
Extracts
John O’Hare
Monetize /
Mobile
Harte Hanks
Landing
Pages
Harte Hanks
Post Future
(Exact
Target)
Zoot / Purl
WebTrends Co TweetPossible /
SEM
Leo Burnett
SEM
Spark /
SEO
Double
Click / Dart
Display
Dial
America
S2S
Access
Aspect
Dialer
CCDEV
AccessCorporate Opt Out
(Private Banking,
Commercial, Spam
Complaints)
MGIC
MortgageARGUS
CIT
Customer
Issue
Tracking
Unica
Promo
History
Creates customer accounts
Posting system
RAFT
WebMethods
RT & Batch
* Indicates systems with
accounts in ECIF
Manual Pull
Acxiom
Demo-
graphicsManual
S2SDataStage
TU
Pre-
Approved
&
ITA
Aspect
Dialer
TM
Lists
DM
ListsAd-hoc
Some EM
Response
Files
SomeTM
Response
Files
Ad-hoc
ARGUS, FNA, & MGIC contain prospects
Only FNA is internal
Purple indicates 3rd
Party
Green indicates internal
Daily
(Deposit/Overdraft)
Daily
(Deposit/Overdraft)
REVISED
7/3/2013
DRAWN BY
DAVE RAFFAELE
DESCRIPTION
5/3 MARKETING TECHNOLOGY ASSESSMENT
CURRENT STATE DATA AND TECHNOLOGY
CAPABILITIES
CRM capability and gap assessment2 Technology assessment3
33
Organizing Around Change
Executive sponsorship and governance team
Change champions – CRM vision stewards – Organizational integrators
Program governance, value pro forma and business results
Customer engagement vision 1
CRM capability and gap assessment 2
Technology assessment 3
CRM blueprint
and roadmap 4
Time
New and
revised
initiatives Culture and
People Change
Management
Data and
Applications
Decision Process
Change
Organizational
Realignment
Existing initiatives for change
5
34 34 34
Will Bordelon SVP, Vertical Markets
301.633.0774
