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DigitalMarketing–
BestPractices&CaseStudiesMarch2013792077CONFIDENTIALANDPROPRIETARYAnyuseofthismaterialwithoutspecificpermissionofMcKinsey&CompanyisstrictlyprohibitedTanguyCatlinDavidEdelmanVinceJeongJenMathissenDevinMcGranahanPhilipOgrenIdoSegevPamelaSimonExecutivesummaryWestudiedleadingdigitalmarketingorganizationsacrossvariousindustriesandcompletedanin-depthprofileofeightcompaniestounderstandbestpracticesagainstfivekeydimensionsofadigitalmarketingorganizationsThroughourresearch,wehaveidentifiedthreethemesthatarefoundationalcommonalitiessharedbyleadingdigitalmarketingorganizationsCleardigitalstrategythatiswell-alignedwiththeenterprise-widestrategyStrongdigitaltalentacrosstheorganizationPervasivecultureofinnovationandcustomercentricityBeyondstrategy,talent,andculture,weobservedvariationsindigitalmarketingpracticesamongthecompanies,suggestingtherearemultiplewaystobesuccessfulOrganizationsdifferonthefocusoftheirdigitalstrategies(e.g.,emphasizedifferentstagesoftheconsumerdecisionjourney)Whiletheyallaspiretodevelopstrongassetsandcapabilities,theyeachemphasizethosethataremostrelevanttotheirdigitalstrategyLastly,companiesvaryintheactualorgstructuretheyputinplace(e.g.,degreeofcentralization)Inthefirstsectionofthisdocument,wepresentacompilationofbestpracticesinordertoillustratewhatbeingbest-in-classlookslikeInthesecondsection,wepresenteightcasestudies
thatprovidemoredetailedinformationondigitalmarketingpracticesbyleadingorganizationsOverviewofresearchmethodologyWeidentifiedandprofiled8leadingdigitalmarketingorganizationsacrossindustries…TwoofthelargestUSinsurersLeadingUScreditcardissuerwithstrongdigitalpresence“Goldstandard”ofdigitalinnovationWorld’slargestCPGcompanywithheavyfocusondigitalLeadinghigh-endUSconsumerretailcompanywithflourishinge-CommercebusinessWorld’slargestonlineshoestoreWorld’slargestonlineretailer…throughinterviews,literaturesearch,andonlineresources1
Interviews5digitalexperts4former/currentemployeeinterviewsFormeremployeeofProgressiveCurrentSr.Mgr,OnlineMarketingofHomeDepotFormeremployeeofDardenrestaurants,currentGolfChannelemployeeCurrentemployeeofZapposLiteraturesearchSECfilingsInvestorpresentationsForresterResearchreportsOnlineresourcesCompanywebsitesLinkedInFacebookGlassdoorPresssearch(e.g.,AdAge,Economist,Adweek,Forbes)1ThisresearchwascompletedthroughcollaborationbetweenMcKinseyandEngauge,adigitalagencybasedinColumbus,OHContentsCompilationofbestpracticesCasestudiesWeassessedanumberofdigitalmarketingorganizationsagainstfivecriticaldimensions…ActivitiesandcapabilitiesTalentandskillsCulture,mindsets,behavior,andchangemanagementStructure,roles
anddecisionrightsStrategicvisionandoperatingprinciples…byaddressingkeyquestionsagainsteachdimensionWhatarethedigitalstrategiesforeachbrandandfortheenterprise(e.g.,whatistheroleofdigitalalongthedecisionjourney)?Howdoesthedigitalstrategysupporttheoverallstrategyforeachbrandandenterprise?Strategicvisionandoperatingprinciples1Whatkindsofdigitalinitiatives(e.g.,campaigns,specificchannelwork)arecurrentlymostcommon?Whatsupportsystems,toolsandvendorsareinplacetosupportcurrentactivities?Activitiesandcapabilities2Whatisthecurrentstructureofthedigitalorganization?Whatcoordinationandcollaborationmechanisms(e.g.,councils)ensureconsistencyofdigitaleffortsandknowledgesharing(e.g.,acrossbrandsandagencies)?Structure,rolesanddecisionrights3Talentandskills4Whatiscurrentleveloftalentandexperienceforrelevantfunctions?Howeffectiveisthecompanyatattractingandretainingtopdigitaltalent?Howdocurrentemployeescontinuetodeveloptheirskills(e.g.,training)?Culture,mindsets,behavior,andchangemanagement5Whatarethedefiningcultureandmindsetsthatpromotesuccessofdigital?Indoingso,wehaveidentifiedanumberofdistinctivepracticesofadigitalmarketingorganization(1/2)Strategicvisionandoperatingprinciples1Activitiesandcapabilities2Dedicationtocontinuouslyincreasingthespeedandgranularityofdigitalperformanceoptimization–withtools,processandorgstructureinplacethatlinkanalyticswithdecision-makingECleardecisionmatrixthatguidesdecisionsonwhichcapabilitiestobuildin-housevs.outsource(i.e.,whatarethecriticalcapabilitiesthatshouldremaininhousetomaximizecontrol,vs.whichspecializedcapabilitiescanbeoutsourcedtoobtainbest-of-breed)FCustomerinsightsderivedattheindividuallevelthroughrigorousdatacaptureandanalysis,aswellaslinkageofinformationacrosstouchpoints(e.g.,singular,standardizedmeasurementdashboard)DStrongcompetencyinmanagingmultipleagency/vendorpartners(e.g.,agencyselection,creativeassessment,relationshipmanagement)–tappingintoeachforbest-in-classsolutionsandmaintainingconsistentstandardsGAnnualbudgetallocationprocessthatconsiders
bothstrategicandtacticaldigitalinvestmentsinbusinessinitiatives,marketing,IT,togetherwithotherinvestments–andallowsrapidad-hocdigitalinvestmentstorespondtoindustrychangesCClear,well-articulatedone-andthree-plusyeardigitalstrategies(alignedwithenterprise-andbrand-levelstrategies)thatinformrequireddigitalcapabilitiesAFocusonspecificCDJbattlegroundsthatrepresentthegreatestdigitalopportunity–withbudget,headcounts,andteamKPIsalignedaccordinglyBIndoingso,wehaveidentifiedanumberofdistinctivepracticesofadigitalmarketingorganization(2/2)Structure,rolesanddecisionrights3Designationofcross-channelcoordinatorsresponsibleforintegratingdigitaleffortsacrossvariouschannels(e.g.,media,site)–drivingorchestrationJNosingleorganizationalmodeluniversallyoptimal–leadingcompanieschoosemodelbasedontheirdigitalmaturity,importanceofdigitaltotheenterprise,andlevelofcustomizationrequiredHDigitalleadersevolvingtowardsadecentralizedstructureastheirdigitalcapabilitiesmature;ensuresintegrationwiththebusinessITalentandskills4Strongemphasisonacquiringtopdigitaltalent,especiallyamongseniorleadership–throughcreativemeasuresifnecessaryKFluencyindigitalthroughouttheorganizationencouragedbystandardized,enterprise-widetalentmanagementsystem–withdigitalarequiredcompetencyforseniorleaderstoadvanceLCulture,mindsets,behavior,changemanagement5Pervasivecorporateculturegroundedininnovation/opennesstochangeandcustomercentricityMProgressivehasaclearcustomer-focusedstrategy
thatguideshowdigitalistobeusedCleardigitalstrategy(alignedwithoverallstrategy)thatinformsrequireddigitalcapabilitiesSOURCE:FormerProgressiveemployeeinterview;presssearch
WewanttoserviceProgressivecustomersandpotentialcustomersinwhateverchanneltheyprefertomakeitaseasyaspossibleforyoutointeractwithusinthemeansofyourchoosing.Westrivetoprovideengagingcontentacrossallpossibletouchpointstogivepeopleagreatexperiencewithourbrand.–ChrisScott,Sr.EmergingMediaManagerProgressiveviewsitsstrategyasablendofart&sciencetoenhancecustomerexperience…Bettermeetcustomerneeds–makeiteasyforcustomerstounderstand,use,andpurchaseinsuranceBetterunderstandcustomerneeds–leveragedataandanalyticstodriveongoingtestingandcustomerpersonalizationScience…anddigitalasakeyenablerofthatstrategyArtUseinnovativedigitalplatformsandinterfacestosimplifyandpersonalizeproductsandservicesLeveragedigitaltodeveloprichconsumerinsightsneededtodevelopandofferbetter,morepersonalizedproductsandservices””1AAmericanExpressfocuseson“consider”and“experience”
stagesoftheCDJtosupportitsmembershipfocusSOURCE:AmericanExpresswebsite;presssearchAmex’scriticalCDJ
battlegroundsFocusonspecificCDJbattlegroundsthatrepresentthegreatestdigitalopportunityStrongeducationalandemotivecommunicationstomanagefirst14monthsanddriverenewalInnovativepurchasingplatformthroughsocialmedia(“Sync”)Severalsocial-enabledprogramsforconsumers(e.g.,Like,Link,LoveFacebookapp)andsmallbusinesses(Openforum)Richcontenttodriveengagementacrossmultipletouch-pointstopromoteprograms(includingonlinevideo,webwidgets,email)4-5xhigherthanindustryaverageSOVforgeneratingtraffictowebsiteExperienceBondAdvocateEvaluateBuyAmEx’smarketingstrategyisfocusedaroundbuildingabrandexperiencearoundmembershipAmExfocusesitsmarketingeffortson2CDJstagesthatarelikelymostcriticaltoitsstrategy:“Consider”:tobroadenpotentialmembers“Experience”:toimproveuserexperienceandenhancethevalueofmembership1BConsider1CSOURCE:Amazonannualreport;Yahoo!Finance;presssearchAmazonisfamousforitslong-term-orientedstrategyvs.
focusonshort-termROIIt’sallaboutthelongterm-Webelievethatafundamentalmeasureofoursuccesswillbetheshareholdervaluewecreateoverthelongterm…–ExcerptfromAmazon’s1stlettertotheshareholdersin1997,attachedinthecom-pany’sannualreporteveryyearCustomerObsessionLong-TermViewInnova-tionAmazon’sguidingprinciplesfor
innovative/disruptivesolutions…andhascontributedtothecompany’ssuperbperformanceOutstandingmarketperformance$120Bmarketcap~22%YoYquarterlyrevenuegrowthin2012Q4~45%stockpricegrowthoverthelastyear~30%stockpriceCAGRoverthelast5yearsBezosnamedFortune’s2012BusinesspersonoftheYearAmazon’sabilitytomakestrategicinvestmentstoupholditslongtermfocusismanifestedinmanyexamples…Aggressivestrategicacquisitions/partnerships~30acquisitionsoverthepast5years,mainlytoenhancecustomerexperienceviaimprovedproduct,availability,shipping,etc.(e.g.,$1.2BacquisitionofZappos,$775MacquisitionofKiva)AmazonKindleLaunchedin2007withfive-yearROIexpectations2012salesestimatedat~10%ofAmazon’soverallrevenueMultiplebenefitstoAmazonbeyondtop-linegrowth,e.g.,ExcellentcommerceplatformfordigitalcontentIncreasedcustomerdata-captureAmazonWebServicesCloudcomputingserviceslaunchedin2006,whichhasnowbecomea$1-1.5BbusinessAnnualbudgetallocationprocessthatconsidersbothstrategicandtacticaldigitalinvestmentsAmazonmakesstrongstrategicdigitalinvestments,enablingdevelopmentofinnovativeanddisruptivesolutionsRightmessage,attherighttimeBigdatacaptureStatisticalmodel-
ingofcustomerbehaviorWilliams-Sonomacapturesvastquantitiesofdataonlinerelatedtopurchases,clicks,click-throughs,demographics,andgeneralWebbrowsinghistoryInformationissynthesizedintopredictivemodels,resultinginascorepercustomeragainsteachofcompany’sproductcategories(e.g.,shopperwhoabandonedaniteminthecartwouldbeahighprioritytarget)Basedonthescore,thecompanysendstargetedmessagestocustomers,E.g.,morerelevante-mailmarketingandotheroffersTargetedmessagesgeneratedbasedonbigdataresultin10-18%higherresponserateWilliams-SonomausesinsightsfromdataoneachcustomertoenhancemarketingefficacyProgressivereligiouslycollectsandanalyzesdatafromeachcustomertoimprovecustomerexperienceSOURCE:FormerProgressiveemployeeinterview;presssearchPolicypricing–“Snapshot”Palm-sizediagnostictoolinstalledinacarsendsreal-timedrivingreport(includingnumberandtimeofmilesdriven,incidentsofhardbrakingorquickacceleration,speed,etc.)Gooddrivingcanresultindiscountsofupto30%oninsurancepremiumsAllowsinsurancepolicypricingmoreonindividualbehaviorthanpopulation-widestatisticsLoyaltyRewardsprogramRewardscustomersbasedontheirlengthoftenurewiththeinsurancecompanyCarefullycollectscustomerdataandfeedbackscores(e.g.,customersatisfactionsurveys)tocontinuouslyimprovetheprogramWilliams-SonomaandProgressiveemploydatacaptureandanalysisattheindividualleveltoimprovetheefficacyoftheirdigitaleffortsCustomerinsightsderivedattheindividuallevelthroughrigorousdatacaptureandanalysis2DProgressivehasembeddedanalyticsteamslowerintheorganizationtoimproveflexibilitytogenerateandactonspecificinsightsquicklySOURCE:FormerProgressiveemployeeinterview;ProgressivewebsiteContinuouslyincreasingthespeedandgranularityofdigitalperformanceoptimizationSeparateanalyticsunderBrandMarketingandCustomerExperiencetostreamlineandacceleratethetest-learn-optimizeprocess(e.g.,reactfasterduringcampaigns)HelpsthesubgroupsgeneratespecificcustomerinsightsmorequicklytoinformhowtopersonalizeandimprovecustomerexperiencesCEOCommercialLinesPresidentBrandMarketingBrandMarketingAnalyticsCustomerExperienceAnalyticsCustomerExperienceCMOCTOPersonalLinesPresidentIndirectDirectProgressive’sorganizationalstructure2ESOURCE:Expertinterview;interviewwithformeremployeeofProgressive;presssearchTradeoffsofin-housevs.outsourcedcapabilitiesMaintainstightcontrolofdevelopmentandoperationsLackofin-houseexpertiseUseasacompetitiveadvantageHighfixedcostcomponent(e.g.,FTEs,ITinvestment)CanbettertailortostrategicrequirementsDevelopmentriskAllowsforeasierbackendintegrationacrosschannelsLongertimetomarketFastertimetomarketAllowscompanytofocusoncoredigitalstrategyReducesriskLesscontroloverdevelopmentMinimizesup-frontinvestmentandmaintenancecostsPotentiallylimitsabilitytodeveloptrulydistinctivecapabilitiesTakesadvantageofbest-in-breedfeaturesatlowcostIn-houseOutsourcedNON-EXHAUSTIVEExamplesofwhatcapabilitiesProgressivehasin-housevs.outsourcedCapabilityCRM&analyticsOutsourcedChoiceofexternalagency&rationaleRationaleforoutsourcingCapabilityCreatives(social,digitalad,etc.)Arnold:priorfinancialservicesexperienceSpecialtycapabilityforwhichagencieshavemoreresourcesMobiletechnology(e.g.,VINCapture)Mitek:recognizedleaderinmobilecheckdeposit;FSsectorexperienceonmobileimagecaptureinitiativesHighup-frontinvestmentneededtoexcelin-houseRationaleforin-houseIn-houseGreatercontrolovercapabilitythatisespeciallycriticalgivenProgressive’sdata-drivenapproachBetterintegrationwiththebusinessestogeneratemorespecificinsightsWebsiteGreatercontrol(e.g.,toimplementnewinnovations;Progressiveknownasaleaderinwebsitecapability)Progressivekeepscriticalcapabilitiesin-houseandfillscapabilitygapsbyhiringleadingexternalvendorsCleardecisionmatrixthatguidesdecisionsonwhichcapabilitiestobuildin-housevs.outsource2FP&G’sBrandAgencyLeadermodelenableseffective
managementofvariousexternalvendorsStrongcompetencyinmanagingmultipleagency/vendorpartnersSOURCE:Digitalexpertinterview;presssearchP&G’sBrandAgencyLeader(BAL)modelhelpscoordinateallagenciesforabrandandfunctionsRolesofBALCoordinatesallagencypartnereffortsIsaccountableforteamperformanceAgreesonasingleglobalfeeRolesofP&GdecisionmakerApprovesBALagency,partners,andfinalcreativeRewardsallagenciesonbrandrevenueP&GDecisionMakerBrandAgencyLeaderOnecheckOnebriefAbletoselectthebestagencyforeachspecificcapability/channelandthenhavetheagenciescollaboratewitheachotherdirectlyByappointinganagencypartnertoleadtheintegratedagencyteam,P&GcanoutsourcemanyfunctionsofagencymanagementMoreeffectivecoordinationofagencies–reducedtimeandtouchesBALmodelputsoneP&Gexecutiveandoneagencyinchargeofabrand’smarketing2GThereisnouniversallyoptimalorgmodel;however,digitallymaturemarketingorganizationstendtoevolvetoadecentralizedstructureSOURCE:Digitalexpertinterview;GEICOCareerswebsites,LinkedInsearchesOrgmodelbasedoncurrentstateofdigitalmarketing–evolvingtowardsdecentralization“Largelydecentralized”“DigitalCoEunderIT”CentralizedDecentralizedOrgchartDigitalCoEEmbedded
digitalpersonnel
inmarketingRationaleforchoice
oforgmodelNoneedforbrand-specificcustomization:GEICOhasonemainbrandHighdigitalmaturity:maturedigitalteam(digitalhasbeenpartofthecompanyfor~15years)HighlevelofdigitalneedbyeachP&Gsub-brand:P&Gisacollectionofbigbrands,eachdrivingitsownbusinessHighlevelofcustomizationrequiredbyeachsub-brand:ProductsandtargetcustomersegmentsdiffersignificantlyfrombrandtobrandDescrip-tionDigitalCoEteamismostlycentralizedwithinIT,whichmanagesthebudget,digitalagenda,execution&maintenanceThereisasmallgroupofdigitalpersonnelembeddedwithinmarketingtohandleonlineadvertisingandsocialmediaandtoliaisebetweendigitalandmarketingteamsDigitalteamsaremostlydecentralized–digitalgroupwithineachLOB(brand)shapesthebusiness-specificdigitalagendaandownsexecutionA“digitalcouncil”–intheformofasmalldigitalCoE–focusesonknowledgedevelopmentandbestpracticesharing(nodirectbusinessresponsibility)CEOCTOCMO.comMobileCust.CommInfoSys-temsUnitSystemsOpsUnitInternetBusinessUnitOnlineAdv.Experts
DigitalCoEDecentralizeddigitalteamswithinLOBsLOBchairmanCMOGlobalDigitalMarketingLOBs
RegionaldigitalmktingdirectorsCEORegional
LOBgroups
Tendencytoevolvetowardsdecentralizationasdigitalcapabilitiesmatureinordertoachievefullintegrationwiththebusinesses3I3HP&Gorchestratedthemulti-channel“ThankYou,Mom”campaignwiththeirBrandAgencyLeaderasthecross-channelcoordinatorSOURCE:P&Gwebsite;digitalexpertinterview;presssearchCross-channelcoordinatorsresponsibleforintegratingdigitaleffortsacrossvariouschannels…toexecutetheglobal,multi-channel“ThankYou,Mom”campaign……whichsuccessfullyboostedconsumerawarenessandsalesBeforetheOlympicsbegan,P&Ggenerated24.6msocialvideoviewsinjust
3monthsRetailersthatactivatedthecampaignviain-storedisplayssawa~5-20%salesliftforP&Gproductsinthe3-4weeksofOlympicmerchandisingperiodCampaignisontracktodeliver+$500millionofincrementalsalesovera12-monthperiodFacebookpagesforbrands(e.g.,Olay)featuringupdatesfromLondonFacebook&TwitterpagesoncampaignE!’sonlineandiPadvideocoverageofLondonGamesYouTubevideosofsponsoredathletessayingthankstomomsMobileapptoallowfanstosendthankstomomsP&G’sBrandAgencyLeadmodelhelpedcoordinateeffortsofvariousagenciesondifferentchannels…BrandAgencyLead(BAL)AgencyAAgencyBAgencyCAgencyDAgencyEResponsibleforcoord-inatingeffortsofvariousagencies3JSOURCE:LinkedInsearches;GEICOCareerswebsites;presssearchAmExandGEICOexhibitverystrongemphasisonacquiringtopdigitaltalentStrongemphasisonacquiringtopdigitaltalent,especiallyamongseniorleadershipIn2010,AmericanExpressacquiredkeytalentinweb-basedpaymentspacebyacquiringRevolutionMoney,calledbysomeasa
“PayPalkiller”andknownforitsinnovativemgmtteamand
cultureHighlightsoftalentacquiredAmericanExpresshasfocusedheavilyonacquiringbest-of-the-bestdigitaltalentatthetopoftheorganizationHighlightedleadershiptalentJoshSilvermanPresident,USConsumerServices,AmExFormerCEO,SkypeDavidYooSVP,CommerceInnovation,USConsumerServices,AmExFormerPrincipalProductMgr,PayPalDanSchulmanPresident,EnterpriseGrowth,AmExFormerCEO,VirginMobileUSA+Toattractyoungdigitaltalent,GEICOmarketsitselfasnotonlyaninsurerbutalsoatechnologyleaderGEICOmaintainsanactiveCareersplatformonsocialmedia(e.g.,Facebook,Twitter,Youtube)tointeractwithdigitaltalentwheretheyresideJasonHogg(founder&CEO
ofRevolutionMoney)continuedaspresidentandCEOTedLeonsis(RevolutionMoneyangelinvestor,majorshareholderandchairman)becameaspecialadvisortoAmericanExpress,workingonoveralldigitalandonlinepaymentsstrategy4KBothP&GandZapposhavetheirownstandardized,enterprise-widetalentmanagementpracticestodevelopandretaindigitaltalentSOURCE:Digitalexpertinterview;currentZapposemployeeinterview;presssearchP&G’shasinstitutedanumberoftalentdevelopmentprogramstodigitizetheentireorganizationZappos’“Pipeline”talentmanagementstrategyfocusesondevelopingtalentinternallytopreserveZapposcultureZapposprovidesawealthoftrainingprogramsthatsupportthepipelinestrategy,e.g.,“Pipeline-Training”Four-weekNewHiretrainingprogramandongoingtrainingforallZapposemployeesCoversvarioustopics,bothdigitalandnon-digital(e.g.,howtousesocialmedia,finance,timemanagement,communication,publicspeaking)“PipelineStrategy”Toensureaconstantflowofem-ployeesofvaryinglevelsandskillsineachdepartmentinorderforpeopletoconstantlymoveforwardandgrowwithintheZapposcultureFluencyindigitalencouragedbystandardized,enterprise-widetalentmanagementsystemIncludeddigital/technologytrainingaspartofeveryemployee'sresponsibilityandevaluationEstablishedbaseline“digitalskillsinventory”tailoredtoeverylevelofadvancementCreated
trainingfacilityoneachdigitaltopictoensurecompetencyofspecializedteams–forbothjuniorandseniormanagersHostedadigitalsummitaboutkeylessonsondigitalmarketing,attendedby~500P&GmarketersandleadingSiliconValleyexecutivesEffortstobuilda“digitalworkforce”isreinforcedbystrongendorsementsfordigitalmarketingbyseniorleaderssuchasChairman-CEOBobMcDonaldandGlobalBrandBuildingOfficerMarcPritchard4LTechnologyleaderGoogleisfueledbyaunifyingculture
ofinnovationandopennesstochangeSOURCE:"TheEightPillarsofInnovation,”Google'sThinkQuarterly
Asetofstrongcommonprinciplesforacompanymakesitpossibleforallitsemployeestoworkasoneandmoveforwardtogether.Wejustneedtocontinuetosay‘yes’andresistacultureof‘no,’accepttheinevitabilityoffailures,andcontinueiteratinguntilwegetthingsright.–SusanWojcicki
SVPofProduct
Google'semployee#16Haveamission
thatmattersShareeverythingThinkbigbutstartsmallSparkwithimagi-nation,fuelwithdataStriveforcon-tinualinnovation,notinstantperfectionBeaplatformLookforideaseverywhereNeverfailtofailGoogle’sEightPillarsofInnovationaredeeplyingrainedinthecompanycultureandfuelthetechgiant’sspiritofinnovationyearafteryear”Pervasivecorporateculturegroundedininnovation/opennesstochange”5MCustomercentricityliesatthecoreofZappos’valuesand
isakeydriverofitssuccessPipeline-TrainingTeamEverynewemployeegets4weeksoftrainingoncustomerexperience,regardlessofjobtitleForemployeesunabletoupholdWOW,Zapposoffers$2,000toquitZapposCustomerLoyaltyTeam(CLT)Dedicatedtocreatingpersonalconnectionwitheachcustomerwhocontactsthecallcenter“TheZapposExperience”&culturebookCodificationofthecompany’sWOWculture…which
isconsistentlyreinforcedbymanyofthecompany’sactivities…SOURCE:Zapposwebsite;currentZapposemployeeinterview;presssearchPervasivecorporateculturegroundedincustomercentricityZapposviewscustomeratcenterofitsvalues…CustomerserviceisatthecoreofZappos’culture
OurphilosophyatZapposistoWOWwithserviceandexperience,notwithanythingthatrelatesdirectlytomonetarycompensation.Webelievethatcustomerserviceshouldn’tbejustadepartment,itshouldbetheentirecompany.””5M75%+oftheirpurchasesfromrepeatcustomersOutstandingword-of-mouthmarketingthankstoloyalZapposenthusiastsRankedtop3amongUSretailersoncustomerserviceintheannualNationalRetailFederationCustomers’Choicesurveyforthepast5years…anddrivesbusinesssuccessContentsCompilationofbestpracticesCasestudiesProgressiveGEICOAmericanExpressGoogleProctor&GambleWilliams-SonomaAmazonZapposContentsCompilationofbestpracticesCasestudiesProgressiveGEICOAmericanExpressGoogleProctor&GambleWilliams-SonomaAmazonZapposSummaryofkeylearningsProgressive’soverallmarketingstrategy:tomakeunderstanding,usingandpurchasinginsuranceeasyforcustomersviaart(i.e.,creativity)&science(i.e.,data-drivenapproach)Digitalseenasatooltoeaseconsumersandprospectsexperiences
andgenerateinsightstoenhancefuturebrandexperiencesDigitalstrategyfocusedonEvaluate,Buy,andExperiencestagesofCDJStrategicvisionandoperatingprinciples1Activitiesandcapabilities2OverallProgressivehasbeenparticularlyinnovativeintechnologyandlookstocontinuetobeParticularlystronginmobileinnovationforbothcustomersandoperations(quoiting,etc.)TheactualinternalmarketingdisciplinequitesmallcomparedtootherbusinesseswithsimilarsizeMostabovethelinecreativeandtechdevelopmentoutsourcedtoArnoldandtechcompaniessuchasMitekwhileCRMAnalyticsandbelowthefolddevelopmentdrivenbyinternalteamsTalentandskills4Stronglevelofdigitaltalent,particularlyinanalyticstoconstantlydevelopmeaningfulcustomerinsightsforfuturepersonalizedexperiences,pricingalgorithmsandtestingscenariosVarietyoftrainingcoursestoensurecontinueddevelopmentoftalent,aswellascleararticulationofcareerpathsthatemployeescanpursuewithinthecompanyStructure,rolesanddecisionrights3DigitalteamlargelydecentralizedacrosstheirBUsDirectBU(whichhaslargestdigitalteampresence)splitintobrandmarketing(media,creative,agency,search)andcustomerexperience(CRM,web,acquisition,retention)Embeddedseparateanalyticsteams
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