The Digital Transformation: Key Findings and Action Items

Digital Marketing Transformation:

5 Key Research Findings and

12 Essential Action Items

Ernan RomanPresident

Ernan Roman Direct Marketing 11/1/13

Urvashi SinghMarketing Consultant

MassMutual

Ernan RomanPresidentErnan Roman Direct Marketing Corp. (ERDM)

Recognized as a marketing thought leader. Inducted into the Marketing Hall of Fame for creating three transformational methodologies: Voice of Customer (VoC) Relationship Research, Opt-in Marketing and Integrated Direct Marketing.   Named by Crain’s BtoB magazine as one of the “100 most influential people in Business Marketing”.

ERDM specializes in conducting Voice of Customer research to identify customer experience strategies that generate significant increases in revenue. Clients include IBM, MassMutual, QVC, NBC Universal, Microsoft, and Norton AntiVirus.

Ernan’s latest book on marketing best practices is titled, “Voice of the Customer Marketing”. He writes the widely read, Huffington Post published blog, “Ernan’s Insights on Marketing Best Practices”.Authored the landmark books “Opt-in Marketing” and “Integrated Direct Marketing”.

Ernan RomanPresident,

Ernan Roman Direct

Marketing Corp. (ERDM)

[email protected] www.erdm.com

Urvashi SinghMarketing Consultant MassMutual Retirement Services Division

Urvashi Singh joined MassMutual in 2012 and is currently a Marketing Consultant in the Retirement Services Division. In her current role she manages customer intelligence and is responsible for developing an analytical framework and establishing measurement protocols for marketing programs. She has a background in Strategic Marketing, Customer Segmentation and CRM. Urvashi earned an MBA from Southern Methodist University, Dallas, Texas.

MassMutual’s Retirement Services Division has been serving retirement plans for 65 years. It offers a full range of products and services for corporate, union, nonprofit and governmental employers' defined benefit, defined contribution and nonqualified deferred compensation plans. It serves approximately 40,000 employers with over 3 million participants.

Urvashi SinghMarketing

Consultant MassMutual

Retirement Services Division

[email protected]

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Agenda

Provide 5 requirements for re-thinking your Customer Experiences so you adapt to rapidly changing consumer demands.

Insights are based on new findings from VoC research conducted for thought leaders such as IBM, QVC, MassMutual, and Norton AntiVirus.

MassMutual: Best practices for engaging customers across the digital and multichannel mix.

12 Action Items to transform your multichannel engagement.

Voice of Customer (VoC) Research Findings

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Learnings from 10,000+ hours of VoC Interviews:

Customer Experience Requirement #1

Understand how consumers define “Customer Experiences”.

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How Consumers Define “Customer Experiences”*

1. Improve the customer experience across every point of contact with your organization.

2. Applies to all elements of the media mix and all departments in your organization.

3. High quality experiences must be maintained throughout the relationship “not just when you are selling or renewing”.

*Definition is based on 10,000 + hours of VoC research conducted byErnan Roman Direct Marketing, 5-26-13

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How Consumers Define “Customer Experiences”*

5. Preferences must drive high quality personalization of communications and experiences. Privacy of preference information is essential.

4. Customer experiences must be driven by my individual preferences regarding: message, timing, frequency, and media mix.

*Definition is based on 10,000 + hours of VoC research conducted byErnan Roman Direct Marketing, 5-26-13

Customer Experience Requirement #2

Satisfaction has become a given. Engagement is now the critical competitive differentiator consumers are searching for.

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Per VoC Research Findings:Across the last 12 months, a consistent trend:

Consumers expect companies to use

their preferences to deliver increasingly personalized offers, communications,

and experiences.

Consumers have shifted from being

passive recipients of

‘push’ marketing, to

selecting companies

which engage, listen to, and act on, input

from customers and

prospects.

Your Opportunity:

How much more can you be doing to engage and

empower your customers and

prospects?

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Satisfaction is a Given…Engagement is What Counts:

“When we analyze the US hotel category, we found less than 1 social advocacy mention per 100 stays. With some hotels reporting guest satisfaction scores of 80% or more, there’s clearly a large social advocacy gap: the vast majority of people satisfied with their experience aren’t talking about it online.”

1to1 Media, Social@Ogilvy research, “How to Build a Global Passion Brand”, 8-29-13

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Smart:

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Smart:

Customer Experience Requirement #3

Opportunity to completely rethink how you engage with customers; Reciprocity of Value Equation.

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Powerful VoC Finding:

Opportunity to Transform

Your Marketing!

Cited so frequently and clearly that we call

this: Reciprocity

of Value Equation

Voiced by B2B and

B2C customers

and prospects

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Reciprocity of Value Equation:

1Recognition by consumers that to receive or access increasingly relevant information, they must provide information regarding their preferences. Applies to B2B and B2C.

2If they trust the brand and receive a useful value proposition, consumers will opt-in to sharing increasingly detailed preference information in exchange for the marketer’s promise to deliver relevant information and offers.

3This reframes data privacy concerns! Reciprocity seen as a valuable exchange of information which improves the customer experience. This information will constantly change, grow, and be enriched, through ongoing interactions with consumers.

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Reciprocity of Value Equation:

4 As a result of these preference-based interactions, consumers are more willing to respond to communications and offers.

5This customer-driven information exchange results in uniquely accurate databases which consistently drive 25% to 50% increases in revenue.

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Double-digit Results from Microsoft’s VoC-driven Customer Engagement Programs:

Opt-in rates up to

95%.

Open rates greater

than 50%.

Response rates

performing in the

double-digits.

Revenue 2x

greater than the control.

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Nice! They Care About My Preferences:

From: Ford <[email protected]>Reply-To: Ford <[email protected]>Date: Monday, September 9, 2013 10:35 AMTo: Ernan Roman <[email protected]>Subject: Please verify your email subscription.

As part of the Ford Motor Company family, we recently received your email address –

and to help keep you informed we'd like to send you emails with news on the latest

technologies, events, owner benefits, service coupons and more. Simply confirm that

you would like to receive email updates and you'll be in the know.

As part of the Ford Motor Company family, we recently received your email address – and to help keep you informed we'd like to send you emails with news on the latest technologies, events, owner benefits, service coupons and more. Simply confirm that you would like to receive email updates and you'll be in the know.

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No, Not At All!Wasted Opportunity to Learn My Preferences:

Thank you!

Your Ford Motor Company email subscription has been confirmed. Look for more emails in the future.

Check out ourvehicle lineups:

See all thebenefits of ownership:

Customer Experience Requirement #4

Differentiate your company by providing truly personalized experiences, communications, and offers.

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True Personalization is Critical:

Per VoC findings, customers and prospects view personalization as

the next step in a company’s commitment to service excellence.

Personalization is viewed as a service and benefit, not just a

sales tool.

They also look to personalized follow-up emails as value-added triggers to

go online and evaluate relevant products.

Online shoppers view personalization as a critical

requirement

for engagement

.

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“Transaction-based” is Inadequate:

Consumers are very clear in defining personalization as

much more than “those old-fashioned” transaction-

based communications. Representative VoC research

quotes:

“I want more than just buying history-based

emails”.

“With today’s technology,

I expect the experiences and emails to reflect my

preferences”.

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For me? You’ve got to be kidding:

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Selected among TIME Magazine's 50 Best Websites of 2012

Retention has

tripled.

Monthly active

users has tripled.

Time on site has

increased by 75% (from 40

minutes to over 70)

Results since

implementing VoC-driven

personalized

experiences:

Double-digit Results from Songza’s Personalized Music Concierge:

Customer Experience Requirement #5

Deliver on the expectations of improved customer experiences across every channel and point of contact with your organization.

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Multichannel Engagement:

Today’s shopper is multi-dimensional; multi-channel

and multi-purpose.

Many report using multiple media, often at the same

time."I take pride in being a smart shopper.

I might see something on TV, or hear an ad on the radio. 

I’ll text some of my fellow FrugalMom$ friends to check it out. 

Then I’ll browse the website. If the item interests me, I’ll put it in my cart.

When I’m finished browsing, I’ll print out the cart.Then, I call Customer Service to have them answer

my questions, and place the order." 

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Per VoC, greater access via mobile translates to a more informed and empowered purchase process. This also results in greater expectations of value from retailers.

Multichannel Shopping Translates into More Informed Purchases:

“I think shopping on my mobile allows me to make more informed purchases and get better

deals!”

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QVC Priority; Deliver Competitively Differentiating Multichannel Customer Experiences:

Do Multiple Channels Enhance or Cannibalize Sales?Best Customers Engage on All Screens

WebOnly

PhoneOnly

Mobile +Phoneor Web

Phone,Web

Phone,Web

& Mobile

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Multichannel Marketing that is not driven by individual

preferences is simplymultichannel

irritation!

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Transforming Digital Customer Engagement

A Case Study

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A Division of Massachusetts Mutual Life Insurance Company

• 94th on the Fortune 100 list

• Mutual ownership

Leading provider of employer sponsored retirement plans

• 401k, 403b, 457, pensions, etc.

Help the American worker to be better prepared to fund their retirement

Customer #1

Financial Advisors3rd Party Distribution

20,000Customer #2

40,000Employers

B2B

Customer #3

EmployeesB2C

3M+

Who is MassMutual Retirement Services?

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24%

34%

42%

Despite our efforts, over 76% of Americans are not prepared to fund their retirement

On track for retirement (replacing 75%+ of current income)

Will reach 60-80% only with social security included

Will not be retirement ready by age 67

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Our mission is to drive retirement readiness for the customers we serve. Readiness is defined by the ability for someone to generate 75% replacement income during

retirement. Allowing them to retire on their own terms, with options.

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• Record plan sales for 4th year in a row – 15% sales increase year over year

• Record plan retention, 96% – Industry average 91%

• Record client satisfaction – highest in company history

• Consumer communication & education experience ranked #1 by Financial Advisors

To sustain our competitive advantage!

MassMutual: Currently in a Position of Strength

So, what’s the value of a Voice of Customer (VoC) investment now?

3

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Abundance of quantitative data, but it’s not driving real change

• Various interpretations of the same data

• Questioning the sources/methodology

• “Yeah, but our customers/we are different”

• Not providing in-depth insight regarding what is not optimal and how customers want us to improve

Here’s why:

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Are we prepared to meet them?

Consumer Debt

Personal Savings

Consumers needs are changing faster than ever before

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• Interview length, sample size

• Sample mix, does it mirror your customer base/target markets.

• Difficulty and cost of recruiting

• Customer Data…it’s never as good as you think.

So, why do VoC research?

• Include the right stakeholders, get buy-in

• Internal or external execution

Things to consider before launch:

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• We want to do better for our customers

• Qualitative vs. Quantitative Insights

• Actionable in-depth guidance

• Answer “why/how?” questions

• Test ideas prior to any investment

• Protect our market leadership position

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Determine objectives

Set budget and timeline

Determine your audience

Develop key questions Conduct interviews

Analyze findings to identify

strategy/action plan

The VoC Process

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Determine barriers for retirement planning at

various ages

Why are workers not prepared?

Learn what tools, services, and

information would make financial literacy

and action easier.

What else can we do to

help?

Find out how consumer segments

define deeper relationships with MassMutual at key

points in their lifecycle.How do we create a

customer for life?

The VoC Objectives

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Three VoC Research Efforts to date

Consumer (156 Interviews)

B2B Decision Makers

(107 Interviews)

B2B Distribution Channel

(163 Interviews)

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Corporate Group 1 Group 2 Group 3 Group 4 Group 5 Group 6

Age 18-34 35-54 55+ 18-34 35-54 55+

Tenure 1-2 years ~5 years ~10 years 0-90 days 0-90 days 0-90 days

Status Employed Employed Employed Employed Employed Employed

Total 10 10 10 10 10 10

Selecting Your Audience

Hospital Group 7 Group 8 Group 9 Group 10 Group 11 Group 12

Age 18-34 35-54 55+ 18-34 35-54 55+

Tenure 1-2 years ~5 years ~10 years 0-90 days 0-90 days 0-90 days

Status Employed Employed Employed Employed Employed Employed

Total 8 8 8 8 8 8

Union Group 13 Group 14 Group 15

Age 18-34 35-54 55+

Tenure 1-2 years ~5 years ~10 years

Status Employed

Employed

Employed

Total 7 8 7

Terminated Group 16 Group 17

Age 35-54 55+

Tenure N/A N/A

Status Terminated Terminated

Total 13 13

• Who is our existing customer?

• How does that align to our sales strategy?

• How many?

• By product line, demographic?

• Any 3rd party considerations?

• Incentives?

• How good is the data?

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Consumer(156 Interviews)

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Key Learnings

Our customer service experience is very positive.

Overall engagement is low.

Customers want more proactive and customized communications.

Segmentation by needs and life stage, is relative to the support and guidance they expect from MM.

Few customers were adequately prepared for retirement.

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STEP 1Enrollment/ Transfer Process

Immediate

STEP 2New Customer Welcome Program

2-3 Weeks Later

STEP 3Proactive, Ongoing Touches

Throughout the Year

STEP 4Annual Review/ Anniversary Program

One Year

STEP 5 “Next Steps” Plan (Terminated)

Upon Job Change

VoC Driven Action Items

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VoC-Based Enrollment/Transfer Process

Offer more educational assistance to customers during the enrollment/transfer process, as some have trouble understanding even the basics of asset allocation and selecting a savings amount.

Making the enrollment/transfer process as inviting, memorable and user-friendly as possible will be key, and customers offered specific suggestions to help.

Providing an overview of the “Next Steps” process during this initial phase will better prepare them.

Conducting a Needs Assessment will help to target appropriate lifestage information and education. CRM target appropriate set of customers

Step 1

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VoC InsightInteracting shortly after enrollment will, as many articulated,

“make me feel like they care whether or not I’m their customer.”

A New Customer Welcome concept was tested, and respondents’ feedback greatly enhanced it.

Initial scheduling

call

Customers wanted to be able to schedule a call to ensure convenience and give them time to prepare.

“Meeting” with

MassMutual rep

Customers wanted to specify how they met with MM: via phone, online chat, text, email, or even Skype.

Follow-up Information

Customers reported that they would appreciate having written materials for reference.

On-site, in-person visits

Customers wanted to be able to meet in a group setting, followed by the option to meet individually.

New Customer Welcome Program

Step 2

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VoC InsightMost customers would welcome occasional touches by MassMutual.

These touches should focus on offering education and information about their accounts, about MassMutual processes and policies (i.e. how to change their savings amount) and retirement

planning in general.

Proactive, Ongoing Customer TouchesMassMutual must offer multiple levels of educational assistance in a variety of formats.

Retirement 101

Step 3

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Retirement 201

Intro to your retirement

Webinars Help reading statements

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VoC InsightLack of engagement with both MassMutual and their retirement planning is a considerable barrier for customers. Reaching out annually with an offer of a personal meeting will help break through the inherent apathy and forge a stronger connection between MassMutual and its customers. It will also remind customers, at least annually, about MassMutual and their retirement account.

Annual Review/Anniversary Program

Representatives will offer to meet to:

• Review last year’s performance.

• Set goals for the upcoming year.

• Answer any questions.

• Offer help with consolidating other plans.

• Update their needs assessment and preferences.

• Remind them there is a “Next Steps” (Terminated) Plan.

This program was recommended by customers during the VoC. It was validated and refined in real time during the balance of interviews.

Step 4

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VoC Insight

Respondents no longer with the company that initially provided their retirement plan reported being very confused about what they were supposed to do during the transition. Many cited feeling “lost” and “alone” and unsure about what to do with their account. This is a significant opportunity to cement a relationship with customers who find themselves at a critical, emotional time, perhaps looking for a helping hand to guide and reassure them. Providing support will deepen engagement and create a connection to MassMutual.

Initial scheduling call

Allow the customer to schedule a meeting at their convenience

“Meeting” with MassMutual rep Customer

should be able to select the channel they prefer: phone, Skype, online chat, etc.

Follow-up Information

Send a summary of the meeting for reference.

“Next Steps” (Terminated) Plan

Step 5

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Post VoC Implementation Example – The SMARTVIEW

MassMutual’s Smart View

Webisode Email Pilot

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• Mock talk show with a cast of 3 discussing personal financial issues

• More humorous than serious

• Provided actionable takeaways

• Season 1: 9 episodes over 18 weeks

• Season 2: Launched September 2013

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Post VoC Opt in Email Pilot

By opting-in, participants receive proactive

communication when new episodes are ready.

Results: Opt-in vs. Control Group

94%Higher open

rate

1,062%Higher video

views

ZeroUnsubscribes

100% Deliverability

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SmartView Earned Several Awards

Season One: More than 22,000 unique views

Awards: • 2013 AVA Digital

Gold• PSCA

www.youtube.com/retiresmart

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The Past

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The Future - A personalized experience for each customer not the same generic experience for many customers

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Touchpoints

Higher Engageme

ntBetter

Outcomes

Preference Driven Multichannel Marketing

Postcards

Transactional MailingsWebinars

Web Banners

Phone Calls

Emails

Group MeetingsPreferences

(Targeting Filter)

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Process for Preference Driven Engagement

Events and Webinars

Personalized Communication

PersonalizedWeb

Experience

CRM

Customer Intelligence &

Analytics

Customer Service

Customer Provided Data

Preference

Sales ChannelIntegration

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Thank You

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12 Actions for Digital & Multichannel Success Be humble. Acknowledge what you don’t know about how your customers define engagement. Listen to your customers.

1

Understand how customers define the Reciprocity of Value Equation with your company.

2

Create opt-in preference databases to drive true personalization of communications and offers.

3

Achieve frictionless, high-value, engagement across every medium in the multichannel mix.

4

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12 Actions for Multichannel Success Customers engage with your messages across multiple media. Ensure message and brand consistency across all your media.

5

Communications should reflect the “personalities” of the individual media used by customers to engage with your brand.

6

Each medium should reinforce the other, i.e., On air reinforcing Social, Mobile reinforcing Web, etc.

7

Be where your customers are, i.e., push mobile during commuting hours, holidays, etc.

8

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12 Actions for Multichannel Success Select channels that serve the customer: texting an offer is intrusive. Using it as a reminder for something they want is a value.

9

Avoid turf and silos; ideally one team should manage all customer touch points.

10

Make customer listening a part of every functional area, not just Marketing.

11

Deliver high quality customer service in every channel. Marketing has to take responsibility!

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Additional Information for You:

PowerPoint Presentation

14 Step Checklist For Breakthrough Multichannel Marketing

7 Marketing Mistakes You Need to Avoid

Case Studies

Blog; Ernan’s Insights on Marketing Best Practices

To receive this information, send your request to [email protected]

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Ernan RomanPresident

Ernan Roman Direct

[email protected]

Urvashi SinghMarketing Consultant

[email protected]

Contact Information: