Contextual marketing is about understanding not just who someone is but where they are, what they are doing, and what they are likely to do next. It’s about combining the right information about a customer and the context to deliver the right services and communication at the precise moment it offers the most value.

1. FROM
SEGMENTATION
CONTEXTUAL
TO
MARKETING
- GROWING VALUE THROUGH
PERSONALIZED EXPERIENCES
TOM NICKELS
WWW.AVAUS.FI
IMAGE BY MAURITSON FOTO / FLICKR

2. 2
We combine strategy,
analytics and design with
technology and outsourcing
services.
DRIVING
BUSINESS
Focus areas:
• Digital transformation
• Customer growth
• Digital sales and B2B Lead
management
• Business model & service innovation
• Business process efficiency

3. SOME GREAT COMPANIES WE WORK WITH:
92 SPECIALISTS
OFFICES IN HELSINKI, FINLAND
AND WROCLAW, POLAND
REVENUE 10 MILLION € (est. 2012)

4. WHY SEGMENT CUSTOMERS ?

5. CREATING A
COMPETITIVE
ADVANTAGE
BASES FOR
DIFFERENTIATION
It’s difficult to differentiate based
on price or product charac-
teristics. It might work for a
while, but usually competition UNIQUE
catches up.
PRODUCT
However REALLY KNOWING
YOUR CUSTOMERS and
serving them based on their
individual needs will set you
apart.
COST
ADVANTAGE
But traditional segmentation is
NO LONGER ENOUGH TO
CUSTOMER
CREATE CUSTOMER
INTIMACY.
INTIMACY

6. THE
CHALLENGE:
THIS IS WHAT YOU SEE, BUT IT IS
NOT REALLY ME
A LOT OF THE CUSTOMER INFORMATION
COMPANIES CURRENTLY USE ISN’T REALLY
FOCUSED ON GETTING TO KNOW WHO THEY
ARE AND WHAT THEY NEED.
AND ABOVE ALL IT DOESN’T TELL MUCH ABOUT
WHAT THE SITUATION – THE CONTEXT – OF THE
CUSTOMER IS RIGHT NOW.

7. THIS IS
ME ü
ü
Father of three, devoted husband
Houseowner
ü Live outside city
ü Entrepreneur, owner of midsized
business
ü Gadget freak
ü Time strapped, convenience
oriented
ü Eco consiousness on the rise
ü Fair price, not necessary cheapest
ü Prefer digital channels
ü Visited website yesterday, looked at
product page

8. MARKET
VALUE
NEED
CONTEXT
IN WHICH MARKET HOW CAN WE GROW WHAT SHOULD WE HOW SHOULD WE TREAT
SHOULD WE INVEST?
LIFETIME VALUE?
OFFER?
A SPECIFIC CUSTOMER?
SEGMENTING ON A SEGMENTING BASED ON SEGMENTING BASED SEGMENTING BASED ON
MARKET LEVEL. FOR CUSTOMER VALUE. FOR ON DIFFERING THE SITUATION OF THE
INSTANCE CORPORATE INSTANCE HIGH-VALUE, ATTITUDES AND NEEDS. CUSTOMER. FOR
CUSTOMERS VS CHURN-RISK VS FOR INSTANCE TASTE, INSTANCE VISITED WEB-
CONSUMERS.
UNPROFITABLE CONVENIENCE, OR SITE, ORDERED SPECIFIC
CUSTOMERS.
COST.
PRODUCT OR IS AT
LOCATION X.
Different approaches
to segmentation

9. THE HEART OF Products/
CUSTOMER INTIMACY IS
services in use
RELEVANCE
Customer
lifecycle
Purchase
history
IS HELP FROM THIS
COMPANY RELEVANT
IN THE NEAR FUTURE?
Contact DAYS TO
history
MONTHS
IS THIS SOMETHING I Web searches
RELATIONSHIP
NEED RIGHT NOW?
CONTEXT
REAL-TIME
Visit to webpage
Purchase
IMMIDIATE
CONTEXT
Expressed
PERSONAL needs
Call to CC
CONTEXT
Area of
Weather
residence
Location
Preferences
YEARS
Lifestage
IS THIS IMPORTANT
Attitudes
TO ME IN LIFE?
Social
connections

10. understanding context
+
CUSTOMER REAL-TIME
PROFILE DATA
BEHAVIORAL DATA
Contextual marketing is about understanding not just who someone is but where they are,
what they are doing, and what they are likely to do next. It’s about combining the right
information about a customer and the context to deliver the right services and communication
at the precise moment it offers the most value.

11. PERSONAL
CONTEXT
Needs-based segmentation
What should we offer?

12. Different needs and motives
drive the development of customer offerings
AtoB
Status
Convenience
Lifestyle
Green values
”I need a car to ”I have money and ”I need to be able ”The car goes along ”I appreciate
get from one power, and I want to trust my car. It with my lifestyle. I ecological values.
place to another”
to show it to always functions have my own My car does not
others. Everybody the way I wish.”
personality and I pollute the
admires my car.”
want to experience
nature.”
it through my car.”

14. IMMIDIATE
CONTEXT
Behavioral triggers
When is the best time to
communicate?

15. TIMING HAS A BIG EFFECT ON RELEVANCE
WHEN?
Knowing when a product or service is
relevant to the customer is one of the
hardest things to do. But one that
potentially pays of big time.
Identifying the right customer behavior
that SIGNALS THE MOST PRESSING
CUSTOMER NEEDS and triggering
communication based on that may
increase relevance and sales
SIGNIFICANTLY.

16. SIMPLE REACTIONS TO CUSTOMER ACTION WILL MAKE THE CUSTOMER FEEL
THAT YOU RECOGNIZE HIM – IT HAS A CLEAR FEEL-GOOD FACTOR TO IT.
(and it affects sales)

17. IMMIDIATE
CONTEXT
Contextual advertising
How can we
provide relevant ads?

18. 18

19. REMARKETING RELEVANCE
TAKING REALTIME RELEVANCE ONE STEP FURTHER - KEEPING UP
WITH THE CUSTOMER CONTEXT ONLINE
Company User
website
leaves
Popular sites
Web user
CLICK
User returns
”Remarketing is a feature that lets you reach people who have previously visited
your site, and show them relevant ads when they visit other sites.”
- Google

21. IMMIDIATE
CONTEXT
Mobile context
What interesting is nearby?

23. ”The world’s finest
department store
brings the greatest
international brands
to iPhone.
In-store, navigate
your way around
4,000 of the world’s
most premium
brands over 1 million
square feet and 7
floors.”

24. RELATIONSHIP
CONTEXT
Customer scoring
Which customers are most
likely to buy?

25. FOCUS SALES EFFORTS ON THOSE THAT ARE
READY TO BUY
The different situations of customers and prospects should be recognized. Some are just
doing initial browsing, while others are seriously thinking about buying. To optimize sales
results we need to distinguish between customers in different phases of the buying cycle.
Automated lead nurturing programs can be used for customers that are not quite ready yet.
That allows us to focus scarce sales resources on customers most likely to buy.
Image: www.smallbizwithkids.com

26. Scoring leads in order to find
customers that are ready to buy
”Lead scoring is a sales and marketing methodology for ranking leads in order to determine
their sales-readiness. You score leads based on the interest they show in your business, their
current place in the buying cycle and their fit in regards to your business.”
Image: Marketo – The definitive guide to lead scoring

27. RELATIONSHIP
CONTEXT
Predicting needs
What will each customer likely
need next?

28. PROPENSITY
WHICH CUSTOMERS ARE LIKELY TO
BUY SOMETHING, LEAVE OR DO
OTHER SIGNIFICANT THINGS?
THROUGH PREDICTIVE MODELLING TARGETING CAN BE
MADE MORE EFFICIENT. THIS HAS A POSITIVE EFFECT
ON BOTH THE BOTTOM LINE AND ON THE CUSTOMER
EXPERIENCE.

29. PERSONALIZE
MAKE COMMUNICATION
MORE RELEVANT BY
ADAPTING IT TO THE
NEEDS AND CONTEXT OF
THE INDIVIDUAL
CUSTOMER.

30. RELATIONSHIP
CONTEXT
Segmentation based on context
How can we add value to
the customer experience?

31. MAPPING THE CUSTOMER JOURNEY WILL HELP TO
DEVELOP THE SERVICE EXPERIENCE IN MORE DETAIL
SEGMENT 1:
The classic family traveler goes on holliday with the family and children. The scenario illustrates high , low and neutral emotional points.
FAMILY They want certain services that make traveling with children easier and These all represent a potential customer experience design opportunity.
that create unforgettable experiences for the whole family.
TRAVELER
PRETRAVEL
TRAVEL
POSTTRAVEL
BEHAVIOR
RESEARCH
BOOK
PREPARE
LEAVE
STAY
RETURN
REMEMBER
SHARE
Look for inspiration Efficiently book Look forward to Travel to Enjoy the Travel back home Enjoy memories of Share experience
and plan the trip and pay the trip trip destination destination experience with friends
CUSTOMER SCENARIO DESCRIPTION
Hears about Collates the Reads about the Checks in at the Relaxes at the hotel Packs and checks Discusses Tells friends about
experiences from package (pricing etc.) destination airpot out from hotel experience and experience
friends Enjoys local memories with family
Makes Tells friends about Excited about attractions Leaves for the Shares photos via
Receives reservation own plans flight to destination airport and checks in Looks at photos email or uploading to
communication Eats out at hotel or from trip photo sharing site
Wants to include Plans activities at Solves local restaurants Sad about flying
Resarches and personal requests in the destination unexpected problems home Enjoys stuff bought Gives feedback via
compares destinations own order during transit Excited about on trip tour operators online
online Receives shopping opportunities Solves questionaire
Pays the communication Finds bus and unexpected problems Order print photos
Unsure about reservation travels to hotel Goes on trips to during transit or album Positively surpised
where to travel Asks questions nearby attractions by offer for new trip
Receives (GOL, contact center) Meets Arrive at airport Thinks about the
Excited about confirmation Finnmatkat guide Taking photos of and travel home experience by him/
attractive price offer Prepares for family and sights herself
Unsure about traveling by packing etc. Checks in at hotel Unpack
Chooses travel details Solves unexpected
destination and plans Receives Enters own hotel problems (with guide)
ENJOYMENT
own holliday information about room
changed travel details Solves problems
+ with hotel/room
–

32. A SEGMENT OF ONE.
NEW PLAYERS FOCUSING ON ADDING VALUE TO THE CUSTOMER CONTEXT ENTER OLD
MARKETS. THEY BREATHE LIFE INTO THE MARKET BUT MAY ALSO SHAKE UP THE VALUE CHAIN.
+
”runtastic Roadbike is your comprehensive bike app for
your smartphone. The integration of heart rate, cadence,
and speed sensors lets you get more precise tracking and
analysis of your biking”

33. RELATIONSHIP
CONTEXT
Value based segmentation
Who are our most valuable
customers?

34. value
Segmenting customers based on
Most valuable
Most growable
customers: Retain
customers: Grow
Marginal customers:
Business as usual
Unprofitable customers:
Dismiss or lower cost
Cost to serve
Customer value segments
Current value
Potential value
Image: Peppers & Rogers group

35. Developing customer
STRATEGIES
CUSTOMER ISSUE
BUSINESS CHALLENGE
with reasons to stay
Understand me and provide me
Retain high value customers
(e.g. Loyalty recognition, Next be
st action)
purchase more
Provide me compelling reason to
Broaden the relationship
Remarketing)
trig gers,
(e.g. Next best action, Behavioral
t, competitive offers
Understand me and make relevan
Acquire the right customer
(e.g. Exclude high defectors, Debt
risk, Matching customer type)
Improve margin of Can I be satisfied with less
to sel f-service, Raise prices)
(e.g. Identify, Communicate, Steer
unprofitable custmers

36. ANOTHER
PERSPECTIVE
ON CUSTOMER VALUE
ENGAGEMENT
Interactions
€
€
€
€
CUSTOMER VALUE
Money spent

37. What next?
What does it take to
introduce contextual
marketing?

38. TO SUMMARIZE
THERE ARE MANY WAYS TO IDENTIFY CUSTOMER
CONTEXTS – USING ONLY ONE IS NOT ENOUGH
BUSINESS
Personalisation Value Proposition
NEED
/ Targeting
management
development
CONTEXTUAL INDICATOR
RECOMMENDATION
ENGINE
TRANSACTIONAL /
VALUE
BEHAVIORAL
PROPENSITIES
DEMOGRAPHICS /
GEOGRAPHY
LIFECYCLE
ATTITUDINAL
NEEDS
Useful
Sometimes useful
Not useful on its own

39. INVEST IN
DATA
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Good data is like the ears of a sales man. Without it you
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have no clue what the customer needs.
Integrate traditional customer profile data with real-time
behavioral data from all channels in order to
UNDERSTAND the need and REACT to the context .

40. Real-time segmentation
– the here and now
For relevance to be meaningful, it must be as close as possible to real-
time. JUST LIKE BREAKING NEWS, RELEVANCE HAS A SHORT
SHELF-LIFE and has its greatest value at the moment something occurs.

41. REACT IN
REAL-TIME
RELEVANT TIMELY INTERACTIONS ARE POSSIBLE ON A GRAND
SCALE ONLY THROUGH AUTOMATING PROCESSES.

42. CREATE
BIG
EMOTIONS
“ I've learned that people will forget what you said, Apple. Zappos. Net-a-Porter.
people will forget what you did, but people will
never forget how you made them feel. ”
Maya Angelou, american poet
42 avaus.fi website

43. Thank you!
Tom Nickels
Senior advisor / Avaus Consulting
+358 40 5443348 / tom.nickels@avaus.fi