WHITE PAPER

THE NEW 5 Ps OF A DIGITAL TRANSFORMATION

Check out your 360 Customer Profile: Lytics.com/Profile TABLE OF CONTENTS What are the 5 Ps?...... 3 1. Personalized...... 4 2. Pervasive...... 6 3. Present...... 7 4. Proprietary...... 8 5. Predictive...... 10 Bonus Ps: Permission and ...... 11 The New 5 Ps and Marketing Technology...... 12 The New 6 Ps at a Glance...... 14 How’s Your Company Doing With the New 6 Ps?...... 15 Harness the New 6 Ps with Lytics...... 16 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION DIGITAL THE NEW 5 PS OF MARKETING—A WHITE PAPER:

42% of CEOs are in the midst of a digital transformation. 56% say it’s already improved their profits.1 Here’s why and how to join them.

1 42% of CEOs have started the digital transformation process. 56% say it’s already improved profits. © LYTICS 2019 2 Lytics.com 10am 11am 12pm 1pm 2pm 3pm 4pm 5pm 6pm What Are the 5 Ps?

IF YOU PURSUED A TRADITIONAL MARKETING DEGREE in the past 50 years, you were probably taught about the 5 Ps: product, price, place, and people. The original thought behind these was that they were essential pieces of the

WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION DIGITAL THE NEW 5 PS OF MARKETING—A WHITE PAPER: positioning puzzle. They helped you figure out what you were selling, where you were selling it, how you’d price it, how you’d sell it, and who you’d sell it to. They also provided convenient categories where you could house business decisions. Would you offer a warranty? That question belonged under a product heading. Would you have more than one payment option for customers (annual vs. monthly payments, for example)? That was a pricing question. Where would you spend your marketing budget? The answer was under the heading of promotions. But here’s the thing: while those Ps offer a useful framework for setting up a business, the role of marketing has shifted and grown over the years. And market- ers—like Lytics’ VP of Strategic Services, Craig Schinn, the driving force behind the concept of the new 5 Ps—are starting to point out that the old Ps aren’t that rele- vant to their day-to-day jobs. So, if the old 5 Ps aren’t hyper-relevant to marketing jobs these days, where should we actually focus our energies? The answer, Schinn says, lies in another set of 5 Ps—one that has grown and will grow with the evolving roles and technologies of marketing teams, one that gives us a new framework for how to focus our marketing efforts in the future, one that learns from industry leaders and embraces marketing technologies that are changing everything about how customers interact with brands. The new 5 Ps are a hallmark of the digital-first transformation that 85% of Enterprise decision-makers say they’ll have to make within the next two years (or risk falling behind).2 So, what are these new 5 Ps and why do they matter? Read on to find out.

2 85% of Enterprise decision-makers believe they have two years to adopt a digital-first strategy before they fall behind the competition. © LYTICS 2019 3 Lytics.com 4 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION high. do businesswiththatbrandagain. 44% ofcustomerssaidthatapersonalizedshoppingexperience madethemwantto and delight(somuchsothattheyuseddelightedusers’ tweetsasanadcampaign). watching andlisteninghabits.Spotifypersonalizesdiscoveryplayliststhatsurprise sonalization charge. Allthreeserveuprecommendationsbasedonpastshopping, IN 2018,THECUSTOMER DEMANDFORPERSONALIZATION 1. Personalized companies aren action foreachcustomerinrealtime. Justlike , Spotify andAmazon. using behavioralscoringandpredictiveinsightstopredictthebestcontent andinter- and stitchingtogethercustomerdatatobetter understandyourcustomersandthen any sizetopersonalizeforaudiencesofsize, atscale. Thisisdonebycollecting Lytics withAIandmachinelearningcapabilities makes itpossibleforcompaniesof reach yourcustomerswith1:1personalization. ACustomerDataPlatform(CDP)like MORE LEARN Netflix personalizeseventhecoverart customers thaneveraredemandingit. , 35%ofsalescomefromtheirpersonalizationengine uct recommendations. favorite music,movieandshoppingsites—acrossallchannels. People wanteverycompanytoknowthemaswellandtreattheir The badnewsisthateventhoughwehavethe powertopersonalize1:1,most The goodnewsisthatyoudon Disruptive leaderslik In otherwords,personalizationisacleardriverofbusinesssuccess—andmore These companieshavesetcustomere 3 73%ofcustomerssaidtheywantedordertrackingacrossalltouchpoints. 8 6 5 4 3 7 the Millions. it shouldbe),checkoutourguide: atScale:1:1Marketing to If 1:1personalizationisyourgoal(and

35% ofAmazonsales comefromtheirpersonalizationengine Netflix coverartis personalized 1:1. Spotify’ 44% ofcustomerssaypersonalizedshopping e 73% ofcustomerswantordertracking across alltouchpoints(thoughonly7%o In2018,customerdemandforpersonalization hasreachedanall-timehigh. on clevertweetsfrom happycustomers. ’t thereyet. s personalizeddiscoveryplaylistswere sopopulartheyspawnedanadcampaignbased e Amazon,NetflixandSpotifyarealreadyleadingtheper- 5 ’t havetobeagiantlike AmazonorNetflixto 7 onitsmoviesandTVshows.Andfor xpectations forpersonalizationhigh. xperiences willmake themrepeatcustomers. . reachedanall-time 8 f retailersofferit). and itsspot-onprod- © LYTICS 2019 4 Lytics.com And 6 5 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION is verymuchwithinreach. itive advantageinyourindustry. Itmeansbeinganindustry leaderinpersonalization Amazon totheheadofpack.Itmeansthere’s alotof roomtogrowyourcompet- place, it’s alsogoodnews.Itmeansyourcompany canfollowleaderslike Spotifyand using personalization. one surveyfoundthat83% ofmarketers whoexceeded theirrevenuegoals were STUDY CASE been fullyrealized. alization effortsanAgrade, while46%gave themselvesCs. And beinganindustryleaderinpersonalization meansrevenuegrowth.In2017 This isbadnewsforcompaniesthatfallbehind—but inacompetitivemark 84% ofseniordecision-mak

11 10 9 engaged withthebrand. Lytics’ behavioralscores, highly tion andwhowere, accordingto searches onlineforpuppyadop- people whohadrecentlydone unified first-partydatatoidentify of theirfirststepswastouse mented Lytics astheirCDP, one expectations. time, theresults exceed with therightoffersat you reachtherightcustomers is marketing’s holygrail.When There’s areasonpersonalization Nestlé Purina Personalized Marketing Triples Conversionsfor

83% ofmark 46% ofmark 84% ofseniordecision-mak When Nestl 9 Andinone2018survey, only6%ofmarketers gavetheirperson- 11 eters whoexceeded theirrevenuegoalsin2017were usingpersonalization. eters gradetheirpersonalization effortsataC.Only6% grade themselves anA. é Purinaimple- ers agreethatthepotentialofpersonalizationhasn’t ers saythepotential ofpersonalizationhasn’t yetbeenrealized. Read thefullcasestudy. and interestsbutonbehavior. not justbasedondemographics allowed themtotargetpeople All becausetheirnewCDP conversion droppedby90%. pre-Lytics. convert asthesameads were threetimesaslikely to ads servedtothisaudience And theresults ads personalizedtotheirneeds. target thoseuserswithFacebook Even better They usedthisinformationto 10

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2. Pervasive

FOR TRUE 1:1 PERSONALIZATION to be possible, your marketing also needs to be pervasive—tracking customers across all touchpoints and personalizing for them no WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION DIGITAL THE NEW 5 PS OF MARKETING—A WHITE PAPER: matter whether they’re connecting with your brand by phone, via computer or even in person at a store. Because the truth is that customers channel hop all the time. Nearly 50% of cus- tomers use at least four channels before making a purchase.12 And customers who engage with your brand across many channels are very likely to be high-value.13

FAST FACT Brands with omni-channel strategies average 91% greater year-over-year customer retention rates than brands without.14 Pervasive, cross-channel marketing continues to be a huge challenge for brands because it relies heavily on a connected customer experience powered by the right data at the right time. Marketers have no shortage of data at their fingertips, but the right data is often unavailable in real-time and likely the responsibility of someone outside the marketing team—which makes it trickier to get quickly. The good news is this was largely a technology problem in the past, but with today’s CDP technology, the accuracy and effectiveness of pervasive, cross-chan- nel marketing is only limited by data strategy, data hygiene and the processes and people behind our personalization efforts. This is marketing 3.0, and it’s making per- vasive marketing more possible than ever.

12 50% of customers use 4+ channels before making a purchase. 13 62% of customers who interact with 10+ marketing channels make weekly purchases. © LYTICS 2019 6 14 Businesses with omni-channel strategies achieve 91% greater customer retention. Lytics.com 3. Present WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION DIGITAL THE NEW 5 PS OF MARKETING—A WHITE PAPER:

IMAGINE YOU’RE SITTING FACE-TO-FACE with a sales rep. You’re explaining your problem and asking how their product can solve it. And they’re spacing out. They keep telling you how to solve problems you had weeks ago and skipping over the current issue. Chances are, you’re walking out of that sales meeting with no intention of buying their product. Now, imagine that same meeting, but instead they’re hanging on your every word. They’re nodding along and thinking. They’re asking questions. And then they’re using all that information they just learned about you and your problem to help you understand how their product can actually solve it—and quickly. That approach is going to result in a very different outcome. Sometimes we think about online and offline marketing as two different beasts. But really so much of what customers need is the same across both. We want to be listened to. We want something that solves our problem. And we want it all to feel relevant and real time. This is what it means to be present. Ten years ago, marketing couldn’t always react in real time to customer needs, but today we can—and there’s no excuse not to. In fact, 67% of customers want brands to automatically adjust content based on their current, real-time context.15 42% will be annoyed if you don’t. And 66% of those said that annoyance would stop them from making a purchase.

15 67% of survey respondents want brands to adjust content to fit their current context. © LYTICS 2019 7 Lytics.com 1ST PARTY DATA 2ND PARTY DATA 3RD PARTY DATA

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SCALE VALUE

4. Proprietary

ONE OF THE REASONS companies like Netflix, Spotify and Amazon are knocking marketing out of the park is because they have what we like to call data moats. This WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION DIGITAL THE NEW 5 PS OF MARKETING—A WHITE PAPER: means they’re constantly collecting relevant data on their users—what they click on, listen to, watch, abandon, purchase, add to wish lists, etc.—and they’re collecting that data themselves. The data, in other words, is proprietary. It’s first-party. They collected it. They own it. And they’re constantly updating it in real time. They don’t have to guess if their data is correct, up-to-date or has been properly managed. Because they own the whole data collection process, they know the answers to those questions.

SPEAKING Data-driven brands average 30% OF DATA more growth than the competition. Predictions say they’ll take $1.8 trillion away from competitors annually.15

The difference between those data-driven leaders and many companies is where their data comes from. For a long time, marketers have been focused on third-party data. We used demographics to simulate buying intentions. Moms were buying cereal, so cereal companies spoke to moms. Men were buying certain cars, so those car companies focused on men. Marketers built a massive industry around customer insights—reaching people who were the right ages, in the right zip codes, with the right household incomes based on demographic trends.

16 Data-driven businesses predicted to take $1.8 trillion from their competitors annually. © LYTICS 2019 8 Their average growth is 30% higher than the competition year-over-year. Lytics.com 9 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION they haveyourageright?Your gender?Your interests? show youwhatdataithasgatheredonyou.Howcorrectdoesthatlook?Do very oftenincompleteorjustplainwrong. valuable aspartofalargerdatastrategyalongsidefirst-partydata—is,onitsown, ior ismorepredictivethandemographics.Andthird-partydata—whileitcanalsobe to beworth$1billionthis year. get right.It’s alsopartofthereasonCDPsaregrowingat such afastpace—predicted you directly. Datayouknowisaccurate. Datayou don’t havetotrustthirdparties FACT FAST webinar only asmallnumberwereaccurate. was solargeastobeuseless.Theyhaddozensofpagessegmentsonhimand range That demographicdatahad—andstillhas—value This iswhythemark “Is thatdatacompetitiveadvantageforyourbusiness When CraigSchinnwenttotheregistrycheckhisdata,hefoundaprettybig Head overto . Hewasinmorethanfourdifferentagebrackets. Theincomerangepredicted . Theanswer:“Probablynot.” skeptical ofthird-partydata.82%believe Brands andretailershavebecome it’s unreliable. etailers areskeptical ofthird-partydata.82%sayit’s unreliable. 18 17

CDPs willbeworth $1 billionin2019 R the BlueKai registryandyou’llseewhatwemean.Thesitewill et ismovingtowardproprietarydata—datacustomers give 18 17 . , butnowweknowthatbehav- ?” Heasked inarecent © LYTICS 2019 Lytics.com 10 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION STUDY CASE DATA SOLUTIONS LIKE 5. Predictive nies todayandAImachinelearningareamongthetopthreebeingresearched. mental difference. rates, etc.fromthemiddle ofthefunnelondown.Andthismakes amassiveincre- We canimprovetransactions,increase amountpertransaction,improveretention predictive insightsopen upnewopportunitiesinthemid-andbottom-funnel stages. customers? Howdowereachmorepeople?Buttoday, marketers arefindingthat marketing, youneedsmartmachinesthatcanpredictfutureneedsandbehaviors. even enoughtoknowwhattheysaywant.To truly pushtheenvelopewithyour interacts withyourcustomers. personalized level—makingdata-informeddecisions andcontinuouslylearningasit predictive insightscandoallthatinrealtime, interactingwithcustomersona1:1, what contentoroffersaremostlikely togetherpurchase. AndagoodCDPwith but whotheymightbetomorrow.TheycantellyounotjustwhatSadiewants, but It usedtobethatmark Good predictiveinsightscantellyounotonlywhoyourbestcustomersaretoday Why

? Becauseit’s nolongerenoughtoguesswhatcustomerswant.Andit’s not who werenotalreadysubscribers keting anddrivesubscriptions. scores topersonalizetheirmar- took advantageofourpredictive their datawithinLytics, thebrand After centralizing andunifying offers usonegood example. that looklike? TheEconomist ization. Butwhatexactly does So, CDPsare thekey topersonal- by 300% How TheEconomistGrewDigitalSubscriptions 19

They identifiedwebvisitors Data solutionsare the numberonetechbeingimplemented bycompaniesand AI andmachinelearning areamongthetopthreebeingresearched. CDPsarethetoptechnologybeingimplementedbycompa- eters focusedonthetopoffunnel.Howdowegetnew Read thefullcasestudy. overall timeontheirsite. tions by300%andincreased by 80%,grewdigitalsubscrip- decreased acquisitioncosts with subscriptionads. and targetedthosespecificusers based onthosepredictivescores and whowerelikely tosubscribe The results

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11 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION privacy anduserpermissionaretopofmindformanycustomers. opt outifthey’renolongerinterested. about howthey’reusingthatdata.Theywanttheabilitytodeletethemselvesand and directlywithbrandstheytrust.Theywantcompaniestobehonestup-front IN ATIMEOF and Privacy Bonus Ps:Permission sharing withbrandstheytrustinordertogetmorepersonalizedmarketing. isn’t thatcustomersdon’t wanttosharetheir data; 80%saidtheyarecomfortable pushing fornationalregulation. suit withitsnewprivacyactandmanystates—includingLytics’ nativeOregon— online privacy. 67% havetaken steps—like limitingtrackingorprovidingfalsedata—todefendtheir In fact,90%ofAmericansworryaboutonlineprivacyanddatasecurity The k This meanspermission-basedmark As aresult,weseetheEUfle ey hereistransparency. Customerswanttosharedataontheirown terms “Customers wanttoshare dataontheirown They wantcompaniestobehonestand up-front abouthowthey’reusingthatdata.” terms anddirectlywithbrandstheytrust. 22 21 20 data privacyscandalsandtechCEOstestifyingbeforeCongress, 21

for personalizedmark 80% ofcustomerssay they’recomfortablesharingpersonal datawithbrands to protecttheironlineprivacy 67% ofconsumerslimittrackingorprovide companieswithfalseinformation Nine outof10Americansworryabout online privacy eting. Butonly17% are okay sharingthroughthirdparties. xing itsmuscleswithGDPR,Californiafollowing . eting ismorerelevantthanever. Becauseit . 20 22 and © LYTICS 2019

Lytics.com 12 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION compliance withnewprivacylawssimplyaren’t doable. real-time customerinteraction,proprietarydata collection,predictiveinsightsand and needtoday? ers moveforward?Whatdoweneedto take actiononwhatconsumerswant SO, THEREARE5(OKAY, 6) Marketing Technology The New5Psand Because withoutit,personalizationatscale The answerisinthetechnology new Psinmarketing town…nowwhat?Howdomarket- . , pervasivecross-channelmarketing, ? © LYTICS 2019 Lytics.com 13 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION handle thenew6Ps: e believeaCDPistheanswer. Butyoudon’t havetotake ourwordforit.Here’s how threeofthemostpopulartechnologiesoutthere—CDPs,CRMsandDMPs— MORE LEARN permission-based mark also offerthisfeature, butitisn’t agiven. third-party data. pervasiveness. cookies thataredeleteddailybymanybrowsers,whichlimitstheircross-channel landscape. Thismeanstheycollectdatafrommultiple placesbutrelyonthird-party meant tosupportthesalesteamandDMPsareonlyreallyusedinadvertising ers—though theyallgoaboutitdifferently. W Since bothCDPsandCRMsworkwithfirst-partydata,they’resetupfor CDPs andDMPsbothoffer CDPs andCRMsbothworkwith Both CDPsandDMPsworkwithdatain Only CDPsarebuilttowork All threecommonsolutionsaremeantto options andmake thesmartestchoice for your brand. Buyers’ Guidetolearnhowassessyour Evaluating CDPs? Check outourfreeCDP NEW 6PS Permission-Based Predictive Proprietary Present Pervasive Personalized eting inawaythatDMPsarenot. predictive insightsandsomeCRMsolutionsmay across allmarketing channels,whileCRMsare proprietary, first-partydata.DMPsfocuson D M CRM DMP CDP Yes Yes Yes Yes Yes Yes real-time, whileCRMsdonot. personalize marketing foryourcustom- Yes Yes Yes No No No Maybe Yes Yes Yes No No © LYTICS 2019 Lytics.com The New 6 Ps at a Glance

Today’s marketing should be…

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PERSONALIZED at PERVASIVE across all PRESENT, listening scale to connect with channels and mar- and reacting to cus- users on a 1:1 level. keting touchpoints, tomer needs in real

WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION DIGITAL THE NEW 5 PS OF MARKETING—A WHITE PAPER: giving customers time. a consistent expe- rience no matter where and how they choose to connect with your brand.

PROPRIETARY, driven PREDICTIVE of future PERMISSION-BASED, by first-party data that customer needs, complying with data you know is correct behaviors and the privacy laws and pro- and up-to-date. tactics that will influ- viding customers with ence them to buy. the transparency and care they crave.

© LYTICS 2019 14 Lytics.com 15 WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION PERSONALIZED With theNew6Ps? How’s Your CompanyDoing SO, HOW’D YOU DO? PERMISSION PREDICTIVE PROPRIETARY PRESENT PERVASIVE where tofocusyourenergy support allofthenewPs andwe’d lovetoshowyou how. you knockingoutofthe park?Andwhichoneshavefallenbythewayside? My brandisfallingbehindonpermission-based marketing. My brandismovingtowardpermission-based marketing, butwearen’t thereyet. My brandisaheadofthegamewithpermission-based marketing. My brandisn’t harnessingthepowerofany predictivetools. My brandisdoingsomeprediction,butweneedtodomore. My brandisusingtoolslike Lytics topredictcustomerbehavior. My brandisn’t doinganythingwithfirst-party dataonoursitesandinads. My brandisstartingtoworkwithfirst-partydata,butwehaven’t masteredityet. My brandisfullyharnessingthepoweroffirst-partydatainallchannels. My brandismarketing basedondatathatreliesuponbatchprocesses. My brandisdoingsomereal-timemarketing, butweneedtodomore. My brand’s marketing messagesandcustomerinteractionsallhappeninrealtime. My brandisn’t doinganycross-channelmarketing yet. My brandisdoingsomecross-channelmarketing, butweneedtodomore. My brandisgreatatcross-channelmarketing. My brandisn’t doinganypersonalizationyet. My brandisdoingsomepersonalization,butweneedtodomore. My brandisalreadypersonalizingata1:1level. Once youknowhowyour companyisdoingoneachcount,you’llalso know WhichPsisyourcompanyworkingon? Whichonesare . And,ofcourse, we’d lovetohelp. Lytics isbuiltto © LYTICS 2019 Lytics.com Harness the New 6 Ps with Lytics

IF YOU HAVEN’T ALREADY NOTICED, we’re passionate about the future of market- ing and the technology that supports it. That’s why we not only built one of the world’s first CDPs—now ranked as the best overall CDP on the market by the Relevancy Ring Buyer’s Guide23 —but we also provide strategic services and guides like this one to help marketers fully harness the power of today’s marketing technology. If you’d like to know more about CDPs and how they support today’s marketing priorities, we’d love to chat. Schedule a demo today or call us at 503.489.5880. WHITE PAPER: THE NEW 5 PS OF MARKETING—A DIGITAL TRANSFORMATION DIGITAL THE NEW 5 PS OF MARKETING—A WHITE PAPER:

23 Lytics takes top spot in the Relevancy Ring Buyer’s Guide.

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