The New Direct Marketing in a Multi-Channel World Insurance Direct Marketing Forum Wayne Rosenberger – Harte-Hanks September 15, 2008

The Old Paradigm vs. The New Media optimization Branded direct Creative Off-line database Measurement by media Post mortem analytics Offers driven by models New Media integration Brand driven by the Web Real time data Aggregated measurement Real time analytics Offers driven by interaction

Multichannel Marketing Vision Today Goal Campaign Performance Business Impact Customer-Centric Audience Multichannel Persona 1 Persona 2 Persona 3 Cross-Channel Optimization Relevant Product Meet Indv. Needs & Interests Right Time & Channel Campaign-Centric Strategy Shift Audience Channel Overall Audience Generic Content Drive RX Campaign Performance Our approach to digital marketing is steeped in a broader multi-channel vision where we help our clients move to a customer-centric messaging strategy. We can spend more time going through this one on one This diagram depicts this strategic shift where (you see in the diagram on the top left) "Today" most companies are in a campaign-centric mind set where they are sending mostly generic content with limited personalization or customization (and although they might do some segmentation the messages commonly aren’t relevant to the customer beyond basic demographic data - and the messages are driven by the primary goal of selling a product). This approach results in tracking performance in terms of campaign effectiveness such as response rates for DM, opens and clicks for email, units of impressions for ad campaigns, etc. rather than tracking effectiveness in terms of business objectives related to acquiring or retaining customers or creating ongoing relationships that the customer would find valuable. We help our clients move from this campaign-centric and product-centric approach (on the top left diagram) to a customer-centric approach (top right diagram). By putting the customer at the center of what you do we begin to use data based on behavior, self-reported preferences, purchases, etc. to create deeper segmentation or personas....(personas are what we refer to as “segmentation plus”… It’s taking segmentation by ‘o-graphics’ such as: demographic, geographic, psychographic, etc. data and adding to it behavioral data – what people do, what they click on, what they search, etc. as well as preference data. This enables multi-channel optimization, sending more personalized and relevant messages, offering up more relevant offers and in short, sending the right message to the right person at the right time through their preferred channel (be it email, call center, cell phone, iPod, PDA, mail etc). This also allows our clients to begin tracking performance in term of business impact rather than campaign results alone (see blue arrow point up on far right). Business impact = How we influence behavior and increase conversion – aligned to tangible business objectives such as such as how to increase in-store traffic, drive online sales or improve customer retention. The idea is to help our clients get to know their customers so well they can eventually move beyond measuring success by episodic campaign data and start to understand the customer’s experience and how to get them engaged in all stages of the customer lifecycle. The good news is… the means of getting there is at the heart of Harte-Hanks core capabilities. Harte-Hanks is a data-based and direct marketing company. We specialize in all of behind the scenes data analytics, segmentation, data integration, data cleansing, data management that's need to make this multichannel vision possible. The end goal is to apply data to influence strategy, segmentation, messaging, etc. and to leverage multiple channels to drive more relevant one-to-one dialogues with your valued customers – To engage customers in a new way... On their terms. Means of Getting There Data Integration Behaviors Descriptors Ongoing Program Optimization With Analytics User Research & Segmentation

The New Components Search Rich Media Behavioral Advertising Contextual Advertising Blogs RSS Podcasting Videocasting Mobile Messaging Widgets Web 2.0 & Social Networking Digital and Multi-channel marketing is a key to optimizing the customer experience and here are a few tactics driving this change… 4

Web As A Selling Tool Preference-Driven Message Existing Customer New Customer Dynamic Content Messaging Engine Let’s start with preference-driven messaging I’m sure you do some of this today. Sending the right message at the right time can make such a big difference in campaign success. We are big advocates of the use of preference centers as well as other tools to gather data points about your prospects and customers. That data can come into the Postfuture database from any number of sources and then can be used to segment your list or dynamically render content in an outbound message. Preference Profiles Preference Center Subscription Form

Web As A Selling Tool Behavior-Driven Message Model Trigger personalized abandoned cart message Your Website Transactional Messaging Engine Web Analytics We can also trigger messaging based on website behavior. Postfuture has integration points with many of the most popular web analytics products like Coremetrics or Omniture. (step through chart quickly) Behavior Profiles Lifecycle Scoring abandoned cart

Dialog Messaging Communicator Combine customer preferences, behaviors and marketing rules to control message content and timing Identify tactics based on customer lifecycle stages Link messages to online and offline behavior using business rules Trigger sequences to connect lifecycle stages

Horizon (BCBS New Jersey) Paid Search Case Study

Business Situation Horizon BlueCross Blue Shield is the leading insurer in the state of New Jersey in the Individual Under 65 market Existing programs included direct mail and print as lead generation mechanisms Captive inside and outside sales groups closed all sales A marketing database supports all marketing activity Results from existing lead generation programs had flattened out Need for additional channels to generate leads and sales

What’s Really New About This? Instant engagement with customer At the moment and the place they’ve decided they need to buy Perfect mix of location and timing Location is right in from of them Timing is all the time, any time, every time, whenever they’re ready

Search Engine Marketing Program Description Paid search through Google and Yahoo Data capture landing pages Distraction-free, competition-free Low bandwidth demand Instant lead transfer to inside and outside sales

Search Engine Marketing Methodology Buy keywords that ensure top 3 positioning Write compelling ads, and test them Track visitors through to conversion Use landing pages that will help complete the sale Optimize based on conversion results Testing reveals which word/creative/placement selections work best for a given product, service or campaign. Optimize campaigns based on conversion results. Remember that some marketers have thousands of words; some may only have ten. Never point visitors to the home page unless the campaign is a “brand” experience with no conversion metric.

Many Channels – Same Result

The Search Result

Additional Channel Direct Mail

Landing and Data Capture Page

E-mail / Blackberry Instant Message to Sales

Results – A Multichannel Success The search engine project exceeded projections Equivalent of mailing 146,400 pieces CPL is equivalent to mail CPL is <$20.00 Conversion rate to sales is exceeds all other media No degradation of direct mail results

Where Else This Might Lead Greater integration of online and offline media Traditional media used to push searches and landing page visits Online enrollment application Self-directed Assisted by inside sales New markets Seniors Adult children of seniors Member services Retention

Customer Centricity – Automotive Industry

Our Objectives Provide the dealer network with a best-in-class, national direct marketing program that builds dealer-customer relationships Drive customer pay revenue More multi-channel integration Increase speed to market Generate greater return on investment Optimize dealer enrollment and participation Continually reinvent program offerings 21

Marketing Communications Provides Dealers with greater access to create “intelligent” multi-channel communications, reduce dealer cost, and increase overall response Response Channels Segment Programs Direct Mail Email Call Center (Outbound) Automated Voice Messaging Text/Mobile Dealer Call Center Website Personalized Websites New Best Opportunity At Risk Winback Maintain Timed-Based Communications Triggered Communications Event Communications Automated Behavior-Based Condition-Based Follow-up Sales Accessories Events Newsletters 22

Communication Plan – Built in Solution Automated/Loyalty Campaigns Service Reminder – vehicle based Relationship Marketing – customer based On Demand Communications Express Campaigns Custom Campaigns Triggered Communications Immediate, triggered responses based on response/non-response to above campaigns Confirmations

Personalization, Relevancy, Response Data-driven communications based on customer insights, activities and placement in the customer lifestage Personalization Engine Segmentation Demographics Vehicle New Owner Gender Make Profile based (single, Young family, etc.) Age Model Best Customer Income Year Defection Risk Presence of Children   Vehicle Lifestage Regional Offer New Snow, Heat, Seasonal No Offer Mid-stage Behavior Driven Reward In-market Service Elsewhere Incentive Referral Program Vehicle Sales Channel Own Email Lease Postal Mail Used Phone 24

Personalization, Relevancy, Response Data-driven trigger based programs that integrate within a lifecycle communication framework Vehicle Driven Behavior Driven Handraiser Customer Relationship Mileage Timing Change of Service Venue Service Experience Survey Response Observed- Data Driven Offline Online In Person Anniversary Safe Driving Tips for Teens Child Safety Birthday Cards   25

New Customer Lifestage 26

Mid-Cycle Customer Lifestage 27

Back In-Market Customer Lifestage 28

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