Lecture 3 Merged
Lecture 3 Merged
How to
get data
Newsprint/ OOH
Traditional PR Advertising W-o-m, social
Events &
Activation Speaker Sponsorships PR
Digital: Media vs Products
• Digital Products
• Our own products getting viewers & revenues (read profits)
• Digital Marketing
• Leveraging the Digital Media for promoting ourselves
• Direct Database Marketing (CRM: customer relationship management, EDM : Electronic
direct mailing)
• SEM : Search Engine Marketing; keyword marketing. The ‘paid’ URLs that show up on the
side of organic results, when a user is searching something
• SEO: Search Engine Optimizing/ organic search. The URLs that show naturally
• Display Ads: Banners, Position, Videos, Images
• Ratings: UV (unique viewers), PVs (Page Views), Time Spent
• Contextual Ads: Serving ads after crawling a users’ content consumption
• Remarketing: Cookie tracking people who are dropping out and reaching them again
Metric D1: Impressions, Pageviews & Hits
• Rich media: Interactive media that allows consumers to be more actively engaged
• Rich Media Interaction Time: Total amount of time a visitor spends interacting with
advertisement
• On same visit user might interact with the media twice
• Video Interactions: Video can be classified as rich media depending on way it is served to
viewer
• Typical interactions with a video: play, mute, pause
D2 Purpose: determine how an advertisement engages viewers
• Metrics track how long people spend viewing advertisement as a proxy for how interested
they are in its content
• A user who interacts with rich media is showing evidence of being more actively engaged
• Suggests they are more likely to take action, e.g., purchase
D2: Complications & cautions
• Note unless user clicks on “Buy Now”, clickthrough rate only measures one step on path to a
sale
D3: Complications & cautions
• Ineffective or badly targeted ads may have a small CPM, but a high Cost per Click
• Companies prefer to compensate media & agencies on basis of new customers
acquired rather than impressions
• Agencies may push back as this arrangement passes risk onto them
• Acquisition depends on the quality of the product as well as the advertising
• Remember LTV: Life Time Value or
• CAC: Cost of Acquiring a Customer
𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝐶𝑜𝑠𝑡
= 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑁𝑒𝑤 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑤ℎ𝑜 𝑀𝑎𝑘𝑒 𝑎𝑛 𝑂𝑟𝑑𝑒𝑟 (#)
Visitors < Visits < Pageviews < Hits
Metric D5: See, Click, Come
• Typical costs include design & update sites, devising social media marketing strategies
Contextual
B. Share of A. Share of
Scale
Market Mind
Challenge 2 →
Structured Unstructured
Data Data
Challenge 1 →
A. Share of Mind
Share of Mind
Courtesy: iMotions
Functional Magnetic Resonance Imaging (fMRI)
• Consumers’ brains monitored while shown stimuli in a
scanning machine
• Visualises brain processes at fine spatial resolution
• fMRI measurement: blood oxygen level dependent
(BOLD) brain tracking that resolves activity to the
micrometer scale per second
• Can use fMRI to uncover emotional response triggered
by different brands
Courtesy: internet
Facial Action Coding System (FACS)
Courtesy: wikipedia
Eye Tracking
• Eye Tracking provides a real-time record of where
visual attention is directed
• Eye Tracking measures
• Fixations per second
• Saccades (eye movements)
• Pupil size
• Blinks per second
• Marketers can learn how much attention consumers are
paying to ads, or which packaging attracts more
attention
Courtesy: Tobiipro
Learning from cases
3. Which of the four ad concepts should Mary Barnard and Marisol Tamaro choose? What elements
matter?
4. What does Mekanism mean by engagement? How do they attempt to increase engagement with the
brand using viral ads?
5. Analyze an example from the Indian FMCG market which is facing the same challenges as Pepsi-Brisk.
and make their standard operation procedure for a multi format (aka multi-media) campaign planning.
Groups to submit on or before December 29th
AI in CXM
Dr Neeraj Sanan
© Dr Sanan
What is
• What is NPS
• What is C-SAT
© Dr Sanan
Metrics, Technology & Business Growth
© Dr Sanan
What any Business wants: Earned Growth
© Dr Sanan
B2C Business: what they need
Happy Customer
Initiate Referral program
Dissatisfied customer
predict churn Agent closes follow up
calls
Rescues customer
© Dr Sanan
B2B: Managing Channel
Sales Team closes follow up
with even mildly dissatisfied
HIPO
Incentive programsfor
Promoters
Quarterly Targetsetting Identify StrategicIssues For Other Retailers
based on Retailer NPS
Predictive ChurnRecovery
Program for Detractor
© Dr Sanan
Therefore NPS
• Net Promoter Score is a metric that was first developed in 2001 by Satmetrix and Fred
Reichheld to predict customer purchase.
• NPS is designed to measure your customer's overall brand loyalty (an not satisfaction)
• NPS charts your customer loyalty by asking a single survey question: “How likely are you to
recommend Bajaj motorcycle to a friend or colleague?”
0 1 2 3 4 5 6 7 8 9 10
Not at Extremely
Neutral likely
all likely
NPS = % of Promoters
(9s and 10s) - % of Detractors
(0 through 6)
© Dr Sanan
But surveys…!
© Dr Sanan
Technology in CX measurement
© Dr Sanan
Benefits of Technology in CXM
NPS Score But businesses need more…
• Measure Brand loyalty 1. How is your score relative to our competitors? (do
• Become popular as it is a useful predictor of future competition benchmark study)
business performance 2. Why is your score where it is? (driver analysis)
• Higher the Net Positive, more is the medium-term 3. What should you do to improve our score? (insights)
stability of business 4. I ask my customers, but I am not getting responses?
(help train team trainers to get a response)
5. What about the prospects who check my digital assets
(websites) but do not interact? (digital surveys)
6. What does my customer journey look like? (map)
7. Please predict what my customer will do next e.g., will
he return to my showroom for servicing? (☺)
© Dr Sanan
The implementation
© Dr Sanan
Implementation Philosophy:
© Dr Sanan
Customer Journey
Implementing
Alerts
LISTEN
Data visualize
© Dr Sanan
Listen & analyze using AI
NPS (Relationship)
(BRAND) CES (Transaction)
(or C-SAT)
Overall how likely are you recommend Bajaj How easy was it to get your purchase made?
Motorcylesto your friends and colleagues?
Please share why you gave us this score? Please share why you gave us this score?
Please tell us what we did well/ what we can do better? Please tell us what we did well/ what we can do better?
© Dr Sanan
The Survey Structure
Focus on response rate
1. keep to less than 2 mins
Personalized Welcome Text
2. The Hero Question needs to be
asked first – Before any further
influence of the core questions.
The Hero Question 3. Personalize survey & Email
1. Skip questions based on what we
know about the customer
Follow up Text Question 2. Refer to specific interactions in
the invite email
4. The same link will be used
across channels so that the user
Core questions based on process area
can start in one and, if required
end in another.
Customer
Brand Recovery
ANALYZE
Predictive
Touch
Net Easy LISTEN NumrSense ACT
Courtesy: Intin Analytics
Insights Consumer
Digital Dashboards Instincts Integrate with
Discovery workflow
© Dr Sanan
A typical implementation
The Customer Journey Touchpoints Overall Customer Relationship Competitive NPS Benchmark
NES is the primary measure used here NPS is the primary measure used here NPS is the primary measure used here
3 – 6 months 3 – 6 months
These touchpoints individually link to This is your primary company-wide KPI – This measure shows your relative strength
specific outcomes – e.g. better sales CX = This is the measure that will link to in the market – Will correlate best with
2.5X more sales company sales your long term (3-5 year) company growth
© Dr Sanan
The Output: Alerts, Reports, Analytics
© Dr Sanan
A report for every role Roles
4. Realtime
5. Easily understandable
20
© Dr Sanan
AI Text Analytics
Conclusion:
This chart enables us to delve into the
specific concerns customers highlight
in their feedback.
© Dr Sanan
Map The Customer Journey
Pre- Dealership (IM)
6 28
Website Base: 13950 Tele-Enquiry Base: 3063
58 56 40
Sales (IM)
Can you identify?.
Booking Base: 10541 Test Ride Base: 5512 Walkin-Enq Base: 11025
24
17
Our Strength
43 -55
Base: 23119
24
RSA Base: 1358
© Dr Sanan
66
Rides Base: 1097
VISUAL-ANALYZE Uber modifies its trip cancellation policy
10
High
9.5
Service / Experience
Car Quality
7.5
Longer Wait Time Offers / Promos
and Delays Car Not Available
Fares Related
7
Understanding that churn is caused primarily
Driver Behaviour due to trip cancellation allows UBER to create
6.5
an differentiated strategy
6 Customer Support
5.5
Trip Cancellations
Low
5
-2.2 -1.7 -1.2 -0.7 -0.2 0.3 0.8 1.3 1.8
© Dr Sanan
Predicting based on analysis
© Dr Sanan
illustration
Creating a link between transactions & relationship
Delivery 25 3 QTRS
Predicting
NPS
Support 31 2 QTRS
Your NPS KPI is affected by things that might
happen 1 year in the past. Acting on leading
indicators can help you react to the market
faster than your competition.
© Dr Sanan
To implement you need an understanding
of Research, Technology and Data
© Dr Sanan
Financial
Metrics
Dr Neeraj Sanan
Marketer’s Output & Metrics
Contextual
B. Share of A. Share of
Scale
Market Mind
Challenge 2 →
Structured Unstructured
Data Data
Challenge 1 →
D. Financials Margins and Profits
Margins (the Line of ATL/BTL)
• Margins are key to pricing, marketing spending choices, & customer profitability
margin = price – cost as realized by brand
not what is paid by consumer
• But brand sells at multiple prices, in different channels and can have different costs. So…
Margins
25%+31.25%
but company margin ≠ or 28.125%. (simple average)
2
𝑇𝑜𝑡𝑎𝑙 𝑀𝑎𝑟𝑔𝑖𝑛($55)
Instead Margin (%) = =27.5%. (weighted by value)
𝑇𝑜𝑡𝑎𝑙 𝑆𝑎𝑙𝑒𝑠($200)
Net Profit: Construction
Contribution Margin
Operating Margin
• Overhead: Costs than cannot be directly tied to any specific product or division
(e.g. headquarters staff)
• Allocation among divisions/ regions/ products can often be more art than
science
Margin: What is included?
• Various costs may or may not be included
• “Contribution margin” – deducts only variable costs
• “Operating margin” – deducts cost of operations and variable costs
• “Margin before marketing”
• Are rebates, customer discounts, broker’s fees & commissions costs or
deductions from selling price?
Margin % play: (Rs 30 off ) vs (goods worth Rs 30 free)
• Margins
• Vary by channel
• Vary by SKU
• Vary by territory
• Average Margin in Rs: Weighted by volume
= % of Unit Sales through Channel 1 * Margin in Channel 1 (Rs) + % of Unit Sales through
Channel 2 * Margin in Channel 2 (Rs) + … (continue to last channel)
• Average Margin %: Weighted by Value
= % of Dollar Sales through Channel 1 * Margin in Channel 1 (%) +% of Dollar Sales
through Channel 2 * Margin in Channel 2 (%) +... (continue to last channel)
Margin vs Markup
• Some industries (particularly retail) calculate margins as % of cost, not selling prices
• Be familiar with your industry practice
• We recommend using margin for % of selling price and markup as % of cost
𝑃𝑟𝑖𝑐𝑒 $ −𝐶𝑜𝑠𝑡($)
• Markup (%) = 𝐶𝑜𝑠𝑡($)
Margin vs Markup (channel language)
• Variable costs increase directly & predictably with unit sales volume
• e.g., each product made uses Rs 10 of raw materials
• Fixed costs are not affected by short term sales changes
• e.g., we must pay Rs100k rent on factory even if it doesn’t produce anything
• Total Cost = Fixed Costs + Total Variable Costs
• Total Variable Cost ($) = Unit Volume (#) * Variable Cost per Unit ($)
Total Cost: Construction
• Total Cost ($) = Variable Cost per Unit (Rs) * Unit Volume (#). + Fixed Costs(Rs)
• Equation of the form Y = mX + b, where Y = Total Cost, m is variable cost per unit, X
is unit volume and b the fixed cost
Total Cost per Unit
1. Identify an Indian brand/ business in the same scenario as Reliance Baking Soda?
2. What are the strengths and weaknesses of the RBS brand ?
3. What kind of ROI is the company getting on its consumer promotions & trade promotions
4. Compare the merits of a pull vs push strategy in a low-involvement product in a mature
market.
5. What is your recommendation for Regante to achieve her 2008 target.
1. What is the difference between D2C and Digital Businesses – explain using a schematic diagram
of supply-chain?
2. Compare and contrast the estimated pricing at each stage of supply chain
3. Contrast J&J and Hubble in terms of their context, business objective and metrics?
4. What is the role of offline and online advertising in acquiring Hubble customers? Evaluate the
media monies split decisions facing Hubble regarding online versus office media allocation, with
specific focus on TV vs online , including retargeting
5. If you are the J&J marketing team, how will you react to the challenge of Hubble?
• Groups to submit or before February 16th
The Digital Dis-intermediation
Dr Neeraj Sanan
© Dr Neeraj Sanan
Digital Davids are taking on the traditional Goliaths
• Unilever
• Parachute
• Zee TV
• Sleepwell
• Forever21
• Dabur Vatika
© Dr Neeraj Sanan
Traditional Goliaths are gobbling some davids
What’s Disrupted ?
© Dr Neeraj Sanan
How does the value-chain get disrupted
Marketplace
Manufacturer or Consumer
website
© Dr Neeraj Sanan
What’s happened
traditional sales & marketing -> D2C digital product (s) & marketing
© Dr Neeraj Sanan
Case: TranSwap
• Fast, Secure, Cheap …. Made real by Technology – an integrated B2B2C business where
same software allows itself to be used as PaaS for businesses and allows consumer
transactions.
© Dr Neeraj Sanan
Case: LenDenClub
• Online lending between borrowers and lenders without the mediation of any financial
institution.
• Faircent, lendbox, i2ifunding, finzy etc.
• Started in 2014, by 2020 had 680,000 lenders and 89,000 borrowers
• Personal loans for 3 to 24 months
• Amount: Rs 25,000 to Rs 500,000
© Dr Neeraj Sanan
The old way: Advertising & Promotion
© Dr Neeraj Sanan
Omnichannel World: … everything everywhere all at once
Evaluate
Pre-purchase
Consider
Advocate Buy
Others
Post-purchase Buy How about
you?
Aware Inform
Experience
Trigger
Parallel approach of omnichannel and D2C e.g., Pattern brands launched online with two brands –
EQUAL PARTS and OPEN SPACES, challenging each other while fighting competition
This is unlike traditional business
© Dr Neeraj Sanan
Hubble: The Dis-Intermediation
SCALING A D2C ‘BUSINESS’
© Dr Neeraj Sanan
Let us start by rating the case as per NPS:
© Dr Neeraj Sanan
J&J vs Hubble
Optometrists
Office
E-commerce
© Dr Neeraj Sanan
Market Size & Hubble
Lenses Daily Market Spherical Total
Market Use Size
Number
• US 40 Mn. 41% 16.4 Mn. 59% 9,676,000
• Elsewhere 85 Mn. 70% 59.5 M. 59% 35,105,000
Value TAM SOM
• US $ 4 Bn. 41% $ 1.64 Bn. 59% $ 1 Bn
• Elsewhere $ 5 Bn. 70% $ 3.5 Bn. 59% $ 2.1 Bn.
SAM
Hubble: $ 20,000,000 ~ 2% Market Share of 24% of US market ~ 0.5 %
$ 20,000,000/ (33 x 8) ~ 75,758 of a potential 9.7 Mn. Users in US
© Dr Neeraj Sanan
Market
Value chain Share
27%
566.32
300 + 24
Hubble User 2% of 24%
© Dr Neeraj Sanan
CLV, LTV & CAC
• 100% buy free, 90% order, Average order 8 months, 4% churn, Free box: $13, GM: 40%
• Monthly Margin per customer = $33 x 40% x ( 8/12) = $ 8.8
• Lifetime of those who buy (LT) = 1/ churn rate = 1 month/0.04 = 25 months
• Each customer LTV = ( - 13 ) + ( 8.8 x 25) = $ 207
• CLV = LTV - CAC (customer lifetime value, lifetime value, Customer acquisition cost)
• CLV = S 207-$ 100 = $ 107
• LTV/ CAC = 207/100 ~ 2.07 ……a good industry benchmark is >3
© Dr Neeraj Sanan
The A-B testing
• halo effect: Brand building beyond the sales lift, core TG (employees,
optometrists, current users etc.)
• decay rate: prolongation of advertising beyond the period
• There should be trend analysis too
© Dr Neeraj Sanan
Complete analysis includes “Pre-during-Post” trendline
© Dr Neeraj Sanan
A few takeaways:
© Dr Neeraj Sanan
A few takeaways:
© Dr Neeraj Sanan
What happened thereafter…
• Hubble continued its international expansion into Europe, starting with UK & Spain
• Additional $40M funding raised as Series-A extension, with Colgate-Palmolive as lead
investor
• St.Shine increased its production lines to satisfy US demand
• A UK based company – Waldo – entered the fray, same concept – similar price and 50,000
customers of which 6000 are from US.
© Dr Neeraj Sanan
For Feb 25th: Case – Super Bowl
1. What storytelling devices are available to super bowl advertisers for their brand stories?
Are these same or more in case of IPL?
2. Which plots/ archetypal characters do you observe? How well are these likely to work? Are
there any examples from India
3. Which ads do you predict will generate the most consumer buzz? Why?
4. Which ads do you predict will sell the most product for their advertiser? Why? Which will
sell the least? Why?
5. Which advertisers are getting their money’s worth from their Super Bowl ad? What metrics
would you want to see to make your decision? Will the same logic hold for IPL?
© Dr Neeraj Sanan