The Five Step Approach to Creating Strategic Planning Road Maps

for Customer Acquisition Success

Russell Kern, President & FounderKERN

Katie Majerus, Marketing ManagerAuto Club Enterprises

When Strategic Planning Is Right For You?

• CMO not hearing you • CMO is uncertain of where you are going • Culture of crisis of the minute management• Great plans go awry• Funding elusive• Funds squandered• Programs stuck in a rut, not advancing

Strategy verses Tactics

STRATEGY is done above the shoulders

TACTICS are done below the shoulders

Sun Tzu philosophy

Strategy: Protect Women’s Shoes When it Rains

Tactic: Mini-umbrellas

Strategic Planning Benefits

• Better communication• Improved resource allocation• Identification of innovations

– programs, strategies, tactics, channels, • Clarity of focus for team • Reduction in redundancies• Easier to onboard • Results, Revenue and Implementation

Improvements

9% to 14% improvements of go to market operations within 120 days

Five Steps To Strategic Success

Closed Loop Approach To Strategic Planning

Strategic Ideation and MappingStep 1 - preparationHistorical review, joint planning sessionsStep 2 – outputCreate strategic plan based around business objective

Implementation RoadmapStep 4 - outputSchedule implementations of each tactic and test based on priority

Strategy BriefStep 5 - outputDocument testing details: goal, target, timing, offers, creative, test plan, market selection, media allocations

ExecutionStep 6 - implementationCreate, produce, approve

Results AnalysisStep 7- measurementMeasure performance, analyze results and provide recommendations for optimization

Step 3 - OutputCreate tactics for a given strategy. prioritize tactical executions

Step 1: Effective Leadership

Who’s running the show?

The leader of the planning process must be able to:

• Manage the process• Share critical knowledge• Foster innovations • Transmit a sense of urgency and

enthusiasm to others.

Step 2: Implementation Approach

• Top down:– Given a predetermined business goal, identify all the strategies

and their corresponding tactics to achieve the goal

• Bottoms up:– Look at historical performance of a given set of tactics, build up

from the bottom an integrated plan of tactics and strategies to achieve the goal.

Top Down Model

Objective

Strategies

Tactics

Grow Revenue

Add and RetainHigh-Value Customers

Existing New

Customer Experience Proposition

Basic RequirementsMultiple Ad Format

PlacementRelevancy

DifferentiationsPersonal Experiences

Multiple ChannelsMobile Market

Ad Placement Strategy Personalization Experience

Develop and Implement Marketing Programs

Develop and Implement Personalized Marketing Programs

Deliver Personalized Experiences

Bottom Up Model

Objectives

Strategies

Channels

Tactics

2010 Revenue $100 Million

Acquire New Customers50%

Cross Sell to Existing Customers 50%

Efficiency with Best Channels

Test New Channels

Efficiency with Best Channels

Test New Channels

Improve DM CRMSocial MediaOptimize

SearchTele Newsletter Events

Control Buster Tests

- Offer Strategy - Data Model - Creative Concepts

Online Programs

SEO ReviewFan Development

1:1 Relevancy Improvements

Data Usageemail structure

Automation

Content Delivery

Design EnhancementsCustomer Feedback

Step 3: Determine Strategic Visualization Methodology

Source: Stine Arensbach, Head of Strategic Visualizaiton, KPMG

KERN’S StrategyMaster™ Visualization

Step 4: Strategic Ideation

Session Guidelines

• Set objectives, then establish strategic territories as “placeholders”

• Generate as many tactics as possible for a given strategy without evaluation

• Conduct one-on-one sessions post large group session to hone ideas

• Conduct “consensus” sessions with larger group to review refined strategies and tactics, making adjustments as needed

TKO Action Item

OTA Action Item

APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH

1.1 Improve Targeting

Begin Prospect Database Discuss ions

Test al ternating monthly resting approach

Focus on top 20 performing li s ts until degradation

Determine frequency/resting strategy

Lis t plan customized by market Competitive li s t exchange

Move l is t selection control from franchisees to HQ

Analyze 6 month history of each li st

Analyze data, quali ty of lead source for scalabi l ity

Develop contact frequency/ resting s trategy

Confirm available universe of top 20 B2B Partners

Segment house file into 3 categories : Lead, Registered no

Show, Attend no Sale

Bui ld financial proformas for DR print

Identify all potential low-cost lead gen sources (DR Print, DRTV, Infomercial , Content excerpts in

Social Media)

Viral Marketing CampaignLook at geo footprint of B2B generated leads & radius to

locations

Secure 10% of fi le from each franchise

Expand testing ground to markets beyond Irvine

Val idate pos itive test resul ts Test DM only vs . DM & OBTM

Increase test quantity minimum to 15K per cel l

1.2 Develop Offer Strategy

Track response by segmentChange CD title to be customer

fr iendly (Secret Title)Gas Card Early-bird offer - flash drive Nominal fee for PTW

Charge for PTW w/special guest speaker

Magazine Free 3-month TrialCo-funded gift (software on flash

drive)

1 Kindle per session as door prize

One-on-one consultation on CD title

Limited time access to SRC #10 Teaser OE-LetTrader's Library Discount, Trip

Drawing, Discovery Network product, Money back guarantee,

1.2.2. Tailor Offer to Lifestyle or Transitional Key Events

CD Content related to l ife transition--Change Your Life CD

Aspirational Book

1.3 Develop High-Performance Creative Executions

Reserved exclus ive spot Presenter Profile Drive onl ine with PURLS Out of town Guest Speaker Financing AvailableForce qual ification in large

markets

Brand integrated package Survey-2 step, emai l data to EC Investor NewsletterStudent testimonials w/photos -

message related to l ife transition event

1.3.2. Test Unique "Breakthrough" Formats

Check/voucher package refresh

1.3.3. Determine Contact Strategy Determine Creative Rotation Strategy

All -Star event bui ld up

1.3.4. Develop Lead PackageCustomer needs-driven vs.

product driven message-From The Desk Of

1.4 Improve Conversion to Show

1.4.1. Develop Conversion Strategy by Segment

Segment out & get counts by tenure Emai l Contact Strategy OBTM to PTW registrants

Automated VM Reminder (reinforce offer) Pre-approval offer Mobi le text reminder

Send physical gift (CD?) prior to PTW date

1.4.2. Online Integration

1.4.3. Improve EC Conversion RatesPubl ic s tack ranking of EC

performance (close rates , show rates)

Detai led Package (educate on products , benefits

based)

1.1.3. Develop List Testing Methodology

OTA 2010-11 Direct Marketing Roadmap8/15/2010

1.3.1. Test Messaging and "Look & Feel"

Customize landing pages to match creative & offer

1.2.1. Conduct Offer Testing

1.1.1. Improve Prospect List Performance

1.1.2. Build & Optimize House File

Overall Goal:

80/BIS per month/per franchise

$250 CPB

1.1Improve

Targeting

1.5Increase Channel

Integration

2.1Identify

Production Efficiencies

2.2Identify D.P.

Savings

2.3Identify List

Data Efficiencies

1.4Improve

Conversion to Show

1.2Develop Offer

Strategy

2010 OTA Strategy Map – 12/14/09

STR

ATEG

IES

TAC

TICS

OB

JEC

TIVE

S

2.4Other

1.3Develop High-Performance

Creative Executions

1.0Lift Response by 30%

2.0Reduce Costs by 10%

1.5.11.2.1

1.2.2

2.1.1

2.1.2

1.3.1

1.3.4

1.3.2

1.3.3

1.4.1

1.4.2nline Integration

1.4.3

1.1.1

1.1.2

1.1.3

1.5.2

1.5.3

2.1.3

2.1.4

2.2.1

2.3.2

2.3.1

Prepared by The Kern Organization for Online Trading Academy

2.4.1

2.4.2

2.4.3

Step 5: Prioritize and Road Map

AAA Planning Story

Financial

Road SideAssistance

Life Insurance

Automotive Travel

Discount Program P & C Insurance

Who is the Automobile Club of Southern California?

Who is the Automobile Club of Southern California?

Largest affiliate in the AAA Federation serving 21 unique states

Conquering Planning Barriers

• Focusing on variety of channels

• Collaborating cross-functional resources

• Understanding uniqueness of markets• Goals• Culture

• Managing KPIs business wide

• Aligning strategies across senior management

What Does a Successful Strategic Partnership Look Like?

A Successful Strategic Partner Will…• Excite curiosity

• Bring passion for analytics

• Challenge the team to think bigger

• Strive to avoid insignificant test and learn efforts

• Focus on efficiency, optimization and innovation

• Help identify calculated risks with bigger wins

Implementing the Planning Process

Goal for the Strategic Engagement:

Drive up response while producing cost effective direct mail campaigns that would help grow the insurance business

Applying the 5 Steps to Strategic Success

STEP 1. Effective Leadership in place

STEP 2. Implementation Approach Established

STEP 3.Visualization Methodology

STEP 4.Ideation Session

STEP 5.Prioritization and Road Map

Staying True to DR Fundamentals

Production Efficiencies

Data-Driven Testing

• Align marketing and data teams internally

• Optimize core segments • Identify high performing clusters

• Former hand-raisers • Multiple-product users

• Seek new segment opportunities• Models for predicting buying propensity

• Determine lift in conversion and response KPI’s pretesting

• Embrace detailed and segmented production matrices

Offer-Driven Testing

• Urgency increases response

• Explore integrated digital media with traditional DM

• Keep the offers fresh and relevant

• Optmize your successes

• Honor your failures

Creative-Driven Testing

Operations and Efficiencies

Greatest Benefits Realized

Generated 43% increase in response and 31% improvement in KPI over previous year (2011 over 2012)

Greatest Benefits Realized

Intangible Benefits Going into 2014

• Improved rigor, discipline and focus • Enriched historical reference speeds tactical

considerations• Greater collaboration• Improved dashboards for quick decisions • Better forecasting and improved goal obtainment• More time for Innovation!

Insights Gained From Planning Process

• Flexibility and adaptability

• Spread testing across the road map calendar

• Be patient

• Strategic plans and road maps a living document

Two More Insights

• Focus on Innovation • Without time rarely come up with new ideas,

programs and strategies• Don’t get caught in death by 1000 tests

• Encourage Open Communication• Make it safe for sharing• Be open to improving status quo

Summary

• Strategic planning DOES move the needle– Finds new solutions– Improves existing ops, processes and programs

• Set clear objectives before you begin• Get management buy-in to process• Know your results history and competition• Embrace innovation and reduce Naysayer

noise

Discussion / Q&A

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Russell Kernrkern@kernagency.com

818-703-8775

Katie Majerusmajerus.katie@aaa-calif.com