The Ultimate Touchpoint Management
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1 The Ultimate Touchpoint Management
2 The touchpoint revolution On average, people are exposed to about 3,000 marketing messages everyday through newspapers, TV, the Internet, outdoor advertisements, etc. Up until just a few years ago, the information channels and in-store marketing channels were clearly divided according to the customer purchase journey. But with the advent of the digital technologies, such channels have become more complex with customers now making purchases through the online channel (e-commerce) that was once considered a medium for gathering information and the number of touchpoints has been growing exponentially in line with the accelerated growth of contents on the web. So understanding the characteristics of the various touchpoints in this massive marketing clutter and comprehensively managing such touchpoints are now important more than ever. The father of modern marketing Philip Kotler has defined a new concept holistic marketing in which he suggests that the key to today s marketing is in the use of various touchpoints to communicate about the products, services, experiences that satisfy customer s individual needs. In fact, 95% of brands expect the importance of touchpoint management to continue to rise. Only about 7%, however, have responded they currently have a detailed touchpoint management strategy (Esch Consultatns, W&V 32/2013). Channels are becoming more complex and increasing exponentially with the digital revolution. Touchpoint management is the key to a successful brand strategy 2
3 Main issues in touchpoint management The two fundamental issues that marketers encounter regarding touchpoint management are as below, starting with identifying major touchpoints from the customers point of view. Holistic marketing Managing ROI How can you manage various touchpoints holistically? How can you get the best return on marketing investment? Understand customers perspective 3
4 Understanding touchpoints from customers perspective We need to integrate unique innovations that are closer to reality when developing a questionnaire that enables us gain an understanding of the customers perspective Behavioural economics Modelling on respondent level Questionnaire immersion 4
5 Applying behavioural economics Brands must change its questioning and data analytics methods by understanding how customer heuristics in the decision making process are formed. 1 95% Thinking fast heuristics emotional anchor heuristic diminishing marginal returns Behavioural economics 5% Thinking slow conscious rational lost aversion availability heuristic (Source: Daniel Kahneman (2012) Thinking, fast and slow ; Gerald Zaltman (2003) How Customers Think ) 5
6 Applying behavioural economics Brands must change its questioning and data analytics methods by understanding how customer heuristics in the decision making process are formed. 2 OWNED Car seen on street PAID TV ads Car dealer Radio ads Authorised workshop EARNED Print ads COMPETITORS Modelling on respondent level Social Media Recommendation by friends/ family Test reports 6
7 Applying behavioural economics Brands must change its questioning and data analytics methods by understanding how customer heuristics in the decision making process are formed. 3 Visualization Interaction Gamification Response latency measurement Within the last months, which car brands did you recognize at the following touchpoints? Please choose applicable brands as fast as possible and select ">" to confirm. TV Ads 30 sec Questionnaire immersion 7
8 TNS s new touchpoint management solution Connect has addressed these issues. 8
9 Establishing an effective touchpoint management strategy The first step to managing customer touchpoints is identifying and managing the beneficial touchpoints that increase power in the mind and sales. This is possible by looking into the answers to the following questions. 1 Diagnose performance: How well are the touchpoints managed at present? 2 Check effectiveness: What are the key touchpoints? 3 Identify improvement areas: How can the effectiveness of influential touchpoints be increased? 4 Review efficiency: How efficient is the current media spend? 5 Evaluate contribution: What touchpoints improve brand equity and which ones directly influence sales? 9
10 1 Diagnose performance: How well are the touchpoints managed at present? Customers experience with touchpoints plays a crucial role in improving brand equity. Brands can diagnose the performance of its touchpoints by examining how much its recent engagement contribute to the brand s overall power in the mind. Also, brands can compare its performance against other brands through competitive landscape analysis. Tchibo 13.5% power in the mind Jacobs 11.9% Aldi 10.2% Dallmayr 9.1% Melitta 8.9% *Power in the mind is the potential share the brand would achieve if everyone acted on their preference. It is the most strongly correlated with actual purchase behaviour of any brand equity metric. Power in the mind Brand stock Brand experience client brand Brand experience competitor brands (Source: TNS Connect coffee study) 10
11 2 Check effectiveness: What are the key touchpoints? Brands can establish a media mix strategy by identifying the engagement level of each touchpoint in improving the power in the mind and analysing the most influential touchpoints. 1. Power in the mind: 13.5% 10.2% 9.1% 2. Brand stock: Recent brand engagement: Shelf presence Own product experience TV advertising (Source: TNS Connect coffee study) 11
12 3 Identify improvement areas: How can the effectiveness of influential touchpoints be increased? Brand Experience Overall impact of one touchpoint Reach Number of people that have experienced the touchpoint Quality of experience Shift in PIM when this touchpoint is experienced How can the overall impact of one touchpoint be explained? By analysing the reach (the number of people who have experienced the touchpoint) and quality of experience (shift in power in the mind when this point is experienced) Quality Increase reach Social networks newsletter Increase reach & quality Coffee used in restaurants Ø Tchibo Own product usage Point of purchase display Print advertising WoM friends/family Supermarket shelf 0% 5% 10% 15% 20% 25% Reach TV advertising Maintain Ø Increase quality Following an analysis of each touchpoint based on reach and quality of experience, brands can develop an actionable plan focusing on areas of improvement that are relatively weak in each field. (Source: TNS Connect coffee study) 12
13 4 Review efficiency: How efficient is the current media spend? As effective communication of touchpoints becomes increasingly important, many brands are increasing their marketing spend on touchpoints. But it is not easy to analyse exactly how effective and efficient their spending are. Brands can measure the efficiency of each touchpoint through relative efficiency of marketing investment (REMI) analysis that generates the ROI index for the marketing spend. Touchpoint experience share (%) across all brands and paid touchpoints Share of spend (%) across all brands and paid touchpoints REMI (relative efficiency of marketing investment) Tchibo 7.5% 9.8% 0.77 TV Jacobs 8.1% 5.5% 1.48 Tchibo 0.8% 0.9% 0.89 Radio Melitta 0.5% 0.6% TP Reach share (share of spend) client brand TP Reach share (share of spend) competitor brands REMI < 1.00 REMI > 1.00 (Source: TNS Connect coffee study) 13
14 5 Evaluate contribution: What touchpoints improve brand equity and which ones directly influence sales? Brands expect touchpoints to enhance its equity. But this is essentially used to increase sales. In order to address this issue, brands can establish a strategy that enables them to identify touchpoints that contribute to brand ( brand drivers ) and those that contribute to sales ( sale drivers ) and effectively allocate the limited resources. High Poster Sales TV & print Sales + Brand Sales drivers Homepage Customer magazine Sales staff Activities/ games Low Low No drivers Brand drivers Brand High (Source: TNS Connect coffee study) 14
15 Key learnings Here are 4 lessons on touchpoints management that we have derived from various experiences. First, take a long term view touchpoints is not simply effective in lifting current sales. Priority should be to induce customers to think positively about the brand. Second, do fewer things excellently not all touchpoints need to be managed. Focus on managing touchpoints that actually have more impact on the brand. Third, use the right tool for the right job. Every touchpoint may contribute differently. Fourth, don t just chase eye-balls. Quality of engagement in touchpoints is critical in creating a positive brand perception and accumulation of such experiences serves as a basis for a positive customer relationship. 15
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