dma14 thought leadership series: "the last mile"
TRANSCRIPT
The Last Mile: Leveraging Decision Science
to Get Your Most Important Audiences to Act.
We All Make Decisions…
We All Make Decisions……in Ways We’re Not Aware of.
Decisions We All Make,All The Time.
Neal Boornazian
Chief Client Officer
Cramer
Anne-Marie Farrell
Head of Behavioral Economics
Research, Global SMB Marketing,
On Amir
Associate Professor of Marketing,
UC San Diego
Candace Brenner
Director, Global Brand Marketing
Sony Online Entertainment
“The Last Mile”
Today’s Discussion
The power of the context
Framing vs. description Invariance
Incentive framing and mental accounting
Transaction utility to habit formation
Forms of sociality
Framing and description invariance
Mental accounting
Transaction utility to habit formation
Forms of sociality
IRRATIONAL LAB:
the art and science of Marketing
Behavioral economics
proposes that the real
reason people don’t adopt
our products is...
Too much friction
No immediate benefits of doing an action
We don’t think about the benefits at
the right time
People don’t know it’s a good thing for them
Desired User Behavior
Benefits
Barriers
Overcoming initial fear…
…setting up for long term success
using smart incentives
Incentives
Free coupons Spend X Get Y
Free coupons Spend X Get Y
• Skin in the game
• Product engagement
• Free vs own investment
Qtr A - Y1 Qtr B - Y1 Qtr A - Y2 Qtr B - Y2
Increase in Average Revenue per Account
Free coupons
Spend x Get y
Decrease in Activations
Free coupons Spend x Get y
Desired User Behavior
Benefits
Barriers
Cell 1:$20 AdWords credit
Cell 2:$50 AdWords credit
Cell 3:$20 Play credit
Cell 4:2 Movies
• No incentive
• $20 AdWords credit
• $50 AdWords credit
• $20 Play credit
• 2 Movies
0%
10%
20%
30%
40%
50%
60%
$20 Play $50 AdWords 2 Movies $20 AdWords
Results from Intuition Study
$20 Play $50 AdWords 2 Movies $20 AdWords No Incentive
3x control
4x control
4x adoption rate for $20 Play vs no incentive (control)
2.5x control2x control
• Pick the right user behavior
• Use incentives to help users engage with product
• Think about different reward types
• Hedonic rewards - for our pleasure (e.g. movies)
• Utilitarian rewards - more functional (e.g. AdWords
credit)
• Smaller amount of a hedonic rewards out
performed larger amount of the utilitarian rewards
• Test – our intuitions are not always right
Sony Online Entertainment
Candace Brenner
Director, Global Brand Marketing
Company Overview
Managing the Player Lifecycle
Overview: Institute a “nudge” program in-game to present uniquely tailored offers in response to players’ likelihood to:
» Extend membership (prevent lapsing)» Convert to 1st time payer» Repeat purchase conversion
How:Score and predict future behavior of players to intervene at appropriate touch points to change and/or pivot customer behavior.
The “Nudge System”
Sample Nudges
New Membership Return Membership Consumables
ADDITIONAL RESULTS:
• Better understand different player segments (1st Time, Regular, Repeat, Dedicated).
• Proactive retention is easier than winning them back!
• Increase overall product satisfaction.
Increased monthly incremental revenue by 5-8%
Make it EASY
Overview: Serve a timely message based on what THAT customer is experiencing at THAT moment
CHANGE consumer behavior – Habit Formation
How:Identify key moments in time that customers experience, specific to that moment, and offer them convenience with a lower barrier to entry (lower price points, more frequently).
“Point of Need”
Example: Heroic Characters
Examples: Upgrade and Revive
Spell Upgrades
Revive
Monthly Average Revenue Per User for Point of Need Customers
Mo
nth
ly A
RP
U
Before PoN Use After PoN Use
Daily purchase rate increased from 8% to 13%
# of purchases increased from 3 to 4 for active purchasers
Custom Communications
Most Loyal Cohort
Unprompted, No-Strings-Attached Reward for Loyalty and Ongoing Engagement
Personalized Communication
Valuable Gift
Email Performance
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Open Rates
Top Performers
SOE Benchmark
IndustryBenchmark
Top
Performers
also have
50% CTR’s!
The Last Mile: Leveraging Decision Science
to Get Your Most Important Audiences to Act.