How to Increase Customer Lifetime Value Sanjay Tripathy Sr. EVP - Marketing, Analytics, Digital and E - Commerce, HDFC Life Kamini Rupani Chief Marketing Officer Netcore Solutions @RupaniKamini @Sanjay_Tripathy

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Speakers Sanjay Tripathy Kamini Rupani Sr. EVP - Marketing, Analytics, Digital and E - Commerce Chief Marketing Officer, Netcore Solutions Sanjay is credited for establishing HDFC Life as a strong and distinct brand and for establishing two best-in-class sales channels (Ecommerce and Direct). Under his leadership, HDFC Life was declared one of India’s 50 most valuable brands by BrandZ™ (2015, 2016). He has been recognised as the ‘Marketer of the Year’ (2014 & 15) in the Insurance category by the International Advertising Association (IAA). He is also the Vice Chairman at Media Research Users Council (MRUC) and an Advisory Board member at DMAi and iMedia. A Senior Corporate Strategy and Marketing Executive with over two decades of strategy, marketing, product and operations management experience across several industries including eCommerce, security, information technology and telecom. She comes with an extensive international marketing experience of spending 18 years in the US. Kamini leads marketing, brand, and digital as Chief Marketing Officer at Netcore. She recently spearheaded the re-branding of the company. @RupaniKamini @Sanjay_Tripathy

Customer Lifetime Value Kamini To run a successful business, you need to know exactly how much a customer is worth to you. Knowing this not only helps to determine how much money you should spend on advertising and marketing to get a customer, but also determine how much time and effort you should spend on trying to keep a customer! Today’s webinar is about how retaining customers for longer and increasing the average sale can scale your customer lifetime Value to new heights.

When it comes to growing your business, there are essentially two tactics at your disposal… Kamini You could be armed with loads of sophisticated strategies in world. But the truth is, when it comes to growing your business, there are two tactics at your disposal and everything else boils down to Acquiring new customers; and Retaining existing customers while increasing customer lifetime value.

Acquiring new customers Retaining existing customers and increasing CLV Old wisdom that it’s cheaper to keep a customer than to find a new one Kamini: Am I right, Sanjay? More customers = More Sales = More Revenue = More Profits = Good times ahead 6

“ The purpose of a business is to create a customer and grow that customer – Peter Drucker ” Sanjay: Yes Kamini! Retaining existing customers and up-selling/cross-selling is extremely important to increase Customer Lifetime Value. Both, the organization as well as the end customer can enjoy multiple benefits. Organisations get opportunities to generate additional business, while the customers get an end to end solution. For instance, if a customer who’s a father, buys a family protection plan, recommending him a children’s plan or a retirement plan might help him with a holistic financial planning. So, that’s how it becomes a win-win for both. Kamini: You’re absolutely right, Sanjay! As stated by Peter Drucker, the longer you can keep a customer, the greater their customer lifetime value becomes.

16% 82% Acquisition Vs. Retention Just of companies focused more on retention than acquisition. 16% companies surveyed agreed that retention was cheaper than acquisition. 82% Kamini: But, somewhere in the race to acquire customers, the art of retaining them has taken a back seat. Though, an EConsultancy Report also says that, about 82% companies agree that retention is cheaper than acquisition. So why not leverage the opportunity? Source: Econsultancy’s 2014 Cross-Channel Marketing Report

Importance of the Customer Lifetime Value (CLV) metric Customer Lifetime Value (CLV), sometime called life-time value, is a prediction of the total net profit a company can expect to make from a customer over the course of their relationship. Kamini: Let’s understand what Customer Lifetime Value really means? In simple terms, knowing how much your customers are worth to the business, affects your spends on acquiring and retaining your customers. Kamini continues: But certain factors hamper the ability to increase customer lifetime value. Let me walk you through some of these obstacles.

What is hampering your ability to increase customer lifetime value? Working in Silos A lack of coherent marketing approaches Seamless work & communication inert-department to have seamless customer journey Digital Touch Points A poor digital strategy is a hindrance Understanding the customer life cycle journey will be vital Measurement Third of the top three concerns companies have Depends on variables specific to each company Kamini: Today’s uber-digital customers are clearly telling us, “reach me through digital”. As more customers have started engaging with brands through digital media, it’s vital to understand how, when and where are your customers buying, researching and becoming the advocatesof your brand. A poor digital strategy becomes aa hindrance to enhanced customer lifetime value. The next obstacle is “Working in silos” Different departments at an organization collect data that is exclusively relevant to them. But this siloed environment results into lack of a coherent marketing approach. The challenge is to create a cohesive work environment and house the data at a single pointto ensure a seamless customer journey,regardless of the channel the customer interacts through-a call centre, social media, etc. Measuring value has always been a top concern that companies have about increasing CLV. It is calculated by taking customer revenue minus the cost to acquire and then serve the customer. However, this depends on variables specific to each company as well as taking into account the multiple channels used to acquire and sell to consumers.

Ways to Increase Customer Lifetime Value Kamini to Sanjay: So Sanjay, could you tell me what is the best way to develop and implement strategies to increase customer value?

The Unified / Single Customer View Single customer view is an aggregated, consistent and holistic representation of the data A single customer view gives you the ability to track customers and their communications across every channel Strong Interactions Between Online & Offline Channels Marriage of offline and online channels help brands to take into account all consumer touch points Sanjay: Sure Kamini! Marketers must start with creating a single customer view as it provides is a consistent and holistic representation of the data known by a brand about its customers. A single customer view gives us the ability to track customers and their communications across every channel. It helps to break the marketing silos and understand the customer through all the touch points she interacts with. Marketers must also club customer relationship management tools with the technology available to collate the information from offline and online channels. 

Analysing the data to get customer level insights Helps in understanding Buying behavior Buying preferences and Purchasing power Create right segments Segmentation is the process of segregating your users (customers) into groups based on behavior, characteristics and/ or needs. Kamini to Sanjay: So, what do you think? With the huge volumes of data that is available today, do tech-enabled companies have a greater advantage over their offline counterparts? Sanjay: Yes, having the ability to enrich the data and gain insights is definitely a great advantage. Once you have the unified view, it’s easy to understand a customer’s buying behaviour, preferences, and the purchasing power. These 3 form the basis of all the up-selling and cross-selling across industries. There are many attributes of a customer that defines her buying behaviour. Different attributes would be differently relevant for various brands. For some it could be the demography, for others, it’s the frequency of purchase. The next is, Segmentation. Segementation allows segregating customers into groups based on behavior, characteristics and/or needs. These segments must be further utilised for creating relevant content. Personalized marketing and contextual remarketing prove to be the two most effective techniques of retaining customers and increasing their CLV.

Create right content for the right segments Segments should drive your content marketing strategy Personalized marketing and contextual remarketing prove to be the two most effective techniques of retaining your customers Executing the campaigns across channels Deliver Personalised Experience Right message Right person Right channel Right time Sanjay: Once you’re set, marketers must ensure these campaigns are delivered to the right customer on the right channel and at the right time! That’s how marketers can equip themselves to deliver personalized experiences.

The Modern Marketing demands Right Person Right Content Right Time Right Channel Kamini: Thanks Sanjay! That was really insightful! You covered almost everything our attendees must be thinking of! Could you let us know how technology helped HDFC Life increase CLV? Customer Experience Modern Marketers’ Path To Future

Customer Lifetime Value (CLV) by 20% Case Study How HDFC Life increased Customer Lifetime Value (CLV) by 20% Sanjay: Sure Kamini!

Many businesses are faced with the challenge of knowing what next to sell to whom and when Sanjay: Marketers face the challenge of what to communicate (content marketing), to whom to communicate (micro-segmentation), and when to communicate (triggers). Enriched data, analytical models and content marketing strategy help us to overcome these challenges easily. But successful campaign deployment holds the key to actual success.

will buy, even before they know themselves Uses Propensity Analytics model to analyse data and predict what customers will buy, even before they know themselves Sanjay: Will share an example of one of the cross sell program we run for the existing customers. We use analytical propensity model and response model for customer segmentation to decide next best product for the customers and preferred mode of communication.

Challenge 4-5 Platforms being used & Lot of Manual Involvement in running cross channel campaigns + Lead data flowing back in the CRM Sanjay: Team was executing campaigns across communication modes like email, sms or OBD etc by putting lot of manual efforts. Executing response based campaigns was another challenge, where we had to manually download customer responses of one platform and execute campaigns through another. As platforms were different, entire lead sharing process was manual and hence had a delay. Name Mobile Email

across multiple channels Marketers at HDFC Life could input the insights from their predictive tool, define rules-based actions on Netcore Smartech and deliver messaging across multiple channels Predictive Tool Missed Call Netcore Smartech SMS Sanjay: We needed an Integrated, Multi-channel Automated platform which could seamlessly integrate all the direct marketing communication modes like email, sms, OBD & automate response sharing like leads. We also wanted to reduce manual efforts involved in campaign execution. We used Netcore smartech as the solution as it had all three communication modes email, sms, OBD integrated in one platform. The workflow based campaign scheduling was easy to implement trigger based campaigns and Netcore was ready to customise the solution to provide automated lead scoring and sharing. Voice Multi-channel targeting Demand generation Lead Scoring Lead Nurturing Email

SOLUTION: To plan an automation workflow such that each of the contacts can be reached SOLUTION: Database with only mobile number Database with mobile number and email address SMS Missed Call Voice SMS Missed Call Voice Email

7 Modules for 7 product categories The Marketing Technologists Group built the automation workflow on Smartech 11 Day workflow 7 Modules for 7 product categories 4 Channels (Email, SMS, Voice, Missed Call) Sanjay: Just sharing the automation we executed for the campaign. It was 11 day workflow, had 7 modules for 7 product categories across preferred modes of communication.

Sanjay: As you can see it is quite a complex workflow with around 42 communication triggers but automation based solution helped us to save the effort of executing the same campaign several times across multiple channels, which resulted in saving important man hours and executing error free campaigns.

Results $ Brand targeted its customers on mobile, voice and SMS channels and saw phenomenal response 30% Increase in email open rates because of relevant targeting Overall, the cross channel campaigns gave a jump in the leads by 30%

Insights From The Campaign Voice channel proved to be the best for generating leads More than 70% of the leads were high quality, sales ready leads April March Sanjay: To summarise, the integrated multi-channel automation platform helped us to better the customer reach, reduce manual intervention and customise direct marketing automation needs.

Key Takeaways Marketers must wrap themselves around the entire customer life cycle. It is important to blend the art of engagement, the science of data, and the power of technology to create digital ecosystems that connect at every touch point. Old models and marketing silos will no longer be effective. Communicating effectively with your customers is key to increasing their value.

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