Getting Started with Event

Based Marketing and

IBM Opportunity Detect
Session 1092
Steve Miller Partner and Solution Specialist, TIOBE
Ed Kornacki Product Manager, IBM
Melbourne, Australia

2
Why Event Based Marketing?
IBM Opportunity Detect enables event-based marketing
TraditionalBatchCampaigns Illtellpeopleaboutit
Ihaveanofferforproducts whenIchooseto

Offer

Customerinitiated,behaviordriven
Illpresentanoffernow,
Ihaveacustomerwithachangeinbehavior
whentheyneedit
thatsuggestsaneed
Offer
Offer
Offer
Offer
4
Leading practices deliver better company results

1.8x higher
The 3-yr Gross Profit Growth

top
20 % 3.4x higher
achieve: 3-yr Net Income Growth

2.4x higher
3-yr Stock Price Growth

*SOURCE: The State of Marketing 2013: IBMs Global Survey of Marketers, IBM Center for Applied Insights

5
Challenges in the market Telco customers perspective

Thetelcoindustryisfacedwithseveralchallengesmakingitnecessaryto
innovate andchangethewaywemanageourcustomers

1. Improve loyalty in high value

segments
Revenueassociatedwithold 2. Sustain and stimulate old Growthinthedemandof
servicesisdecreasing services newservices
3. Develop new services
4. Reduce churn

Increasingcompetition

6
 Why we need Event Based Marketing?
Differ from others with excellent customer experience management
Sales Approach through
the channels
What should I sell? Evolution Model of Customer Management

Products/services differentiated
based on individual current behavior + EVENT
in real time ORIENTATION
Products/services differentiated
based on individuals + CUSTOMER
ORIENTATION

Products/services differentiated + CUSTOMER

based on customer segments SEGMENTS
ORIENTATION

Products/services not
differentiated all for all + PRODUCT
ORIENTATION
Marketing Approach through
MASS MARKETING SEGMENT INDIVIDUAL the clients
MARKETING MARKETING
Who should I sell to?
Impact and acquire large Cross sell to high value Develop and communicate highly relevant
amounts of prospects segments based on and personal offers using advanced
through mass campaigns segmentation variables segmentation capabilities
7
Results: Reaping the benefits of understanding customer behavior

Creates more relevant Identifyopportunitiesthatarerelevanttothecustomer

leads Customerperceivesmarketingasaservice

Reduces contact rate Theactionsaredirectedatsmallerandselectivegroups

Buildinglogicisintuitive,Campaigndeploymentisfast
Reduces time-to-market
Enablemessagingtocustomersassoonaseventsaredetected

Provides new ways to Enablesnewwaystointeractanddialogwithcustomersthatare

interact notpossibleinsuchaquick,simpleandefficientmanner.

Identifyopportunitiesimmediately
Increases conversion
Relevanceissignificantlyhigherforthecustomer
rates Conversionratesareincreased

8
Todays Business Environment

Retaining and recruiting new customers is critical to success in a highly

competitive business environment

The key is timely intervention

Contact customers when they will be the most receptive
Contact customers when impending attrition seems likely

The traditional approach is Gather and Respond Marketing (GRM)

Another Approach is Event-Based Marketing (EBM)

9
Customer Example: Large US Retail Bank
Customer
Replaced Harte Hanks Daily Deposit Builder solution with
Detect
Used an existing large Financial Investment ompany as a
reference site:
At the time Customer was able to move 10 new event triggers
into production per week.
Approximately 90 triggers in production

Opportunity Detection usage

Improve cross-sell results
Deliver high quality, easy-to-work leads to sales
Reduce attrition

10
CustomerExample:Large US Retail Bank
% Increase
New Personal Checking
15%
Retail New Business Checking Sales
55%
New Direct Home Equity Production
29%
Commercial New Business Banking Loan
Production 33%
Deposit Outstandings 11%
Investment Loan Outstandings 55%
Banking Capital Market Fees 29%
Debt Capital Markets Revenue 30%
Wealth CIB New Business Revenue 19%
Institutional New Trust Business 11%

Mortgage Deposit Outstandings 18%

Loan Outstandings 13%
Purchase Mortgage Closings 51%
Call Center
# of Total Products Cross Sold 62%

11
Terminology
Event Based Marketing

A discipline within marketing, where commercial and communication

activities are based upon the measurement of relevant and identifiable
changes in a customer's individual needs.
Source: Wikipedia

It is a distinct and different approach to gather and respond marketing and

traditional database marketing which typically use statistical methods.

13
Gather and Respond Marketing versus Event Based Marketing

Gather and Respond Marketing is done in a closed system

All the data exists already
Analysis will determine what to do next
Data Mining, Campaign Management
Intervention is often too late to be effective
Event Based Marketing is done in an open system
New data arriving continuously never complete
Combination of new entering data with data already captured determines what to do
next
More timely intervention

14
Traditional Approach

Makes Complains
Opens Makes About
Makes Medium Buys
Makes
Account Buys Medium Overdue
Small Purchase Inkjet
Large
Purchase Printer Ink Purchase Delivery
Purchase

Day 1 5 10 15 20 25 30

Act based on
accumulated
information

15
Event Based Marketing Approach

Complains
Opens Makes Makes Buys Makes Makes About
Account Small Medium Inkjet Large Buys Medium Overdue
PurchasePurchase Printer Purchase Ink Purchase Delivery

Day 1 5 10 15 20 25 30

Call from Rep to

Welcome Email
thank for their business Send Rep Intervention
Coupon Alert

16
Events versus Triggers

Event
anything that happens, especially something important or unusual

Trigger
an event, situation, etc. that causes the start of something, especially
something bad
or
anything, as an act or event, that serves as a stimulus and initiates or
precipitates a reaction or series of reactions

17
Guiding Principles
Trigger Matrix Principles
High Smart Advanced

Intelligence
Simple Complex

Low

Low Complexity High

19
Trigger Matrix Examples
High
Views different credit card pages Home Loan churn
multiple times over several days
Multiple Credit Cards near credit
Sustained increased salary level limit within one household
Regular cheque, PayPal and direct
electronic deposits Operating Small Business from
Personal Accounts

Intelligence
Non Salary Credits
Credit Card Payment Due
Regular Cheque Deposits
Salary Decrease Small Business Payments
Payment to Movers
Salary Increase PIN Wrong
Card Captured at ATM
Paying Council Rates
Viewed Credit Card Page
Travel card Top Up Tax Bracket Change
Low Account Balance < 0

Low Complexity High

20
Guiding Principles

Events are the sensing part of EBM

Triggers are the action part of EBM
Trigger development must be informed by analytics to apply a level of intelligence
Approach is to develop re-usable components at the most atomic level and combine to
create more complex and intelligent patterns
Customer communication needs to be prompt
Preference is to communicate via digital channels or an outbound contact centre to satisfy
immediacy of communication
Design of the triggers will always require business input prior to deployment
All triggers need to be customer specific (i.e. not designed for generic behaviours)

21
Characteristics of Triggers
Forward Looking Inactivity
Fire when a customer does X but then not Y within two weeks
Detect any of the patterns components
Fire when a customer does either X or Y or Z Backward Looking Inactivity
Fire when a customer does X without having done Y in the
previous two weeks

Identify Behavior Changes (over time for each individual)

Detect all of the patterns components in order Transaction Volumes and Frequencies
Fire when a customer does X then Y then Z in a week Transaction Amounts
Transaction Attributes (Usage)

Detect recurring events and deviations from these

Detect all of the patterns components in order, repeatedly
behaviors (trends)
Fire when a customer does X then Y then Z, three times in a
Fire when a customer does X at a different frequency and
week
volume

22
Getting Started
Makecustomer Dowhatyou
Focusonusecases goalsyourbusiness canwith
thatrequireatimely goals availabledata
response

Buildtoyour Domoreas
capacityto knowledgeof
Expandon
respond technologydeepens
successful
detectionpatterns
23 23
Technology
What Makes an Event Detection System

Detect Run-Time Environment

Batch Feed
Transaction Database for
Files Profile
Engine(s)
Engine(s)
Engine(s)

Real-Time Feed
Operational System
Database for
State &
Server 1 Outcome

Server 2

25
What Makes an Event Detection System

Detect Run-Time Environment

Batch Feed
Transaction Database for
Files Profile
Engine(s)
Engine(s)
Engine(s)

Real-Time Feed
Operational System
Database for
State &
Server 1 Outcome

Server 2

26
Event processing consists of

Transaction input
Event detection
Pattern detection
Action triggering

27
Wheres the Data Warehouse?

A Data Warehouse is a closed system

All the data exists already
Data structures are typically static
Data attributes are typically static
Significance and Relevance are evaluated at the completion of the query
State is updated manually, at the conclusion of the query

Event Based Marketing is done in an open system

New data arriving continuously never complete
Combination of new entering data with data already captured determines what to do next
Significance and Relevance are evaluated for every transaction
State is updated automatically after every transaction

28
What is a State

The condition of a person or thing

How something is
its configuration, attributes, condition, or information content
State is usually
temporary (i.e. it changes with time)
volatile (i.e. it will be lost or reset to some initial state if the system is
switched off)

29
Why SQL is not suited to EBM

All the data must exist already. or be derived on the fly

Has no information about the previous results and starts "fresh" each time
Quickly becomes computationally VERY complex, requiring significant
computing power to complete in a timely manner
Requires hundreds of lines of code to perform relatively simple events
Requires thousands of lines of code to perform complex events

30
Why SQL is not suited to EBM
The current weekly sum of Amounts exceeds the
average of weekly sums over the last 3 months by 2
standard deviations

31
Technology is only part of the solution

Tune reaction times to utilise time sensitive

insights

Fashion messaging to be sensitive to personal

information

Encourage design collaboration between business

and technical users

32
Data
Types of Data

Batch Transaction Data

Contains transactions, grouped by ID and sorted by Date/Time
Used to build up customer state and drive patterns of events
Real-Time Transaction Data
A stream of transaction data
Used in the same manner as batch data but evaluated immediately
Profile Data
ID level flags, indicators, thresholds, segments etc
Used for comparison against state attributes

34
Data Requirements

While there are no mandatory data requirements, every transaction

should have the following attributes
ID (Customer, Account, Device, Cookie, MSISDN)
Date (assuming time is of interest within your patterns)
Value ($s, units)
Code (allows for filtering of transactions)

Other data attributes will enhance the variety of events that can be built

35
Typical Transaction File Types

Daily Account Transactions

Daily Account Balances
Daily Customer Transactions
Daily Customer Balances
Account Profile
New Account Profile
ATM Transactions
POS Transactions
Daily CDRs
Web Clicks

36
How does it all work?
If a high-value customer who has been trading very actively over the last two weeks and has an increasing
account balance over the last year suddenly makes a $50,000 withdrawal from his account, then have his
broker contact him immediately

Trigger
Source Attribute Action
Events Patterns Target
Systems Filters Triggers
Systems
Increasing
Monthly Account
Over Last
Statements Balance
Year

Outbound CTI
Brokerage > 10 Trades in Sequence of High Value Broker System
Trade
Feed Last 2 Weeks All Three Customer Contact /Broker
Desktop

Account Withdrawal >

Feed $50,000

Opportunity Detect 37
I Get it. Now What?
Getting Started with an EBM Program

What data do I have or can I quickly get?

What are my customers goals?
What are my business goals?
What does my gut tell me about possible events to consider?
What communications or offers can I make?
How will I act on triggers?
What will deliver the most immediate value to my customers and my
business?

39
Workshop your Ideas

Start SIMPLE
Leverage Analytics to support ideas
Service events are often the easiest
have a positive effect on customers
have a positive effect on the business (hopefully)
Review trigger libraries from IBM and other sources
Align action with detection
a significant X. so what
Refer back to the Guiding Principles and develop your own!
Get guidance and support from an expert to help avoid the pitfalls

40
Event Detection Libraries

Libraries provide a way to kick start your event-based marketing

Will provide you with data requirements to help get started
Knowledge in the libraries came from domain experts
Libraries are a rich source of ideas typically validated in the field.
Libraries are NOT magic
Will not solve your customer churn problem
Will not solve your poor customer service
Will not instantly increase sales
Will not give you a competitive advantage

41
Build and Test

Building triggers can take minutes, hours or days depending on many factors
Steep learning curve but its NOT a technical challenge
Testing is crucial
Can take 3 5 times longer than build for complex triggers
Should be performed by people other than the event builder
Expected outcomes at every logic step must be well documented
Test on fake data first
Custom build data inputs to test around every logic step
Test on production data second
Nothing beats real world data to see what is going to happen when you flick the switch
Test with other events last
Does your event play nicely with others?
What happens to system performance and volume of triggers fired?

42
Marketing versus Customer Service
Emerging Imperatives of Marketing

Understandeachcustomerasanindividualandincontext

Innovateandscalepersonallyrelevantandrewarding
experiences

Designyourcultureandbrandsotheyareauthenticallyone

44
Current Trends in Event Based Marketing

Pair offline and online behaviors

E.g. Account opened offline, watch for onboarding behaviors online

Look for opportunities to restart an onboarding process

Customers sometimes renew interest in your product or service. When that happens use
event detection to encourage and anticipate their actions

Relationship deepening behaviors

Challenge certain usage, on acceptance, watch behavior to determine whether challenge is
being met or coax

45
How can I retain Max as a customer?
MaxtalkstohisbrotherFreddaily
FredmovestotheUS,MaxremainsinGermany
MaxnowcallsFredintheUS3timesaweek

Maxisatrisk!
Maxscurrentcellphoneplanisnot
optimalforcallingabroad

Maxscallingchargeswillrisesharplyand
dissatisfactionlooms

46
2015IBMCorporation
Marketing understands the what and why
MarketingmakesapersonalizedoffertoMax
Automaticallydetectsthechangeincallingbehaviorandmakes
anofferformoreoptimalplan
ButMaxignoresofferandisstillatrisk!
Maxdoesntrealizethesignificanceoftheoffer

Marketingofferrenewedandaccepted!
Marketingdetectslackofofferacceptanceand
renewstheoffertocoincidewithbillingcycle

TheofferisacceptedandMaxremainsa
satisfiedcustomer

47
How might you accomplish this with technology?

Realtime Realtime DynamicOffer

Eventdetection
Generation
Customer
events
Offertailoredforcustomerbasedon
Behaviorpatterns
Realtime Offer&Responsehistory
Segment

emailmobile
push

48
IBM Opportunity Detect Trend Components

Event DynamicOffer
detection Generation
Working in the application
emailmobile
push

Sarah creates a trigger system and builds the detection logic

Sarah captures from the CDR the minutes used on each of Maxs calls
Sarah then specifies in the Exceeded Standard Deviation Spike
component the conditions for a spike in call volume
When Max meets the conditions a notification is sent to the real-time
offer generation system

49
Example: Checking for jump in call volume using the Exceeds
Standard Deviation trend component

50
IBM Opportunity Detect Inactivity Detection

Event DynamicOffer
detection Generation

emailmobile
Working in the application push

Sarah extends the trigger system with inactivity logic

Sarah anticipates that Max may not accept the offer

Sarah connects a feed of offer responses, the source of information for
accepted offers
Sarah extends the logic with a Forward Inactivity component, which will fire
after a period of time if Max does not accept the offer

51 51
 Watching for events to not happen

Meetingconditionsforoffersets Timereventfiringindicatesoffernot
timer accepted

Acceptingofferstopstimer

5/13/2016 52
IBM Triggered Messages Opportunity Detect gateway to Interact

Event DynamicOffer
detection Generation

emailmobile
Working in the application push

Sarah makes the outcome of the trigger send a real-time second offer

Sarah sends the output to a queue

Message directed at the Interact Triggered Messages gateway
Interact creates an appropriate follow up offer and sends on an
appropriate channel

53 53
Interact Triggered Messaging

54
Lets make sure Anne gets what she needs!
ExactlyWhatYouWantisamerchantthatsellsurbanclothingandhasbothphysical
storesandawebcommercesite.Anneregularlypurchasesitemsfromthestoreandonline.
Annevaluesherrewardcardandidentifiesherselfwhenmakingpurchases
AnnehasarecenthistoryofbuyingitemsOnSalebuthasjustpurchaseda
Springcoatinthestoreatfullprice.
Anneisnowbrowsingthewebsiteforaccessories

OpportunitytoincreaseAnnesdelight!
Apurchaseofamajorgarmentthatbreaks
apatternofOnSalepurchasescould
indicatethatAnneismakingawardrobe
changeandeagertocompleteit

55
Lets make sure Anne gets what she needs!
MarketingmakesapersonalizedoffertoAnne
Automaticallydetectsnewpurchasingbehaviorandinformstheonlineoffermanagement
systemwhichcanautomaticallycouplethatinformationwithbrowsingbehaviour

WhenAnnebeginstolookforaccessories,thecombinationofpurchaseandbrowsing
behaviorcreatesanofferthatleadsAnnetoaccessoriesthatcomplementhernewcoat.

Annefollowsthroughontheoffer!
TheacceptanceoftheofferdeepensAnnes
relationshipwiththemerchantand
improvesthelikelihoodofmakingmorefull
pricepurchases

56
 How might you accomplish this with technology?

Onlinepattern
detection
Instoreor
website Eventdetection Realtime OnlineOffer
Generation
Customer
purchaseevents Onlineoffertailoredfor
customerbasedon
Offlinebehaviorpatterns
(realtimeorbatch)
Inlinebehaviorpatterns
Mobileorweb
Offer&Responsehistory
onlineoffer
Segment

57
Current trends in event detection

Pair offline and online behaviors

E.g. Account opened offline, watch for onboarding behaviors online

Look for opportunities to restart an onboarding process

Customers sometimes renew interest in your product or service. When that happens use event
detection to encourage and anticipate their actions

Relationship deepening behaviors

Challenge certain usage, on acceptance, watch behavior to determine whether challenge is
being met or coax

58
Events to deepen the relationship

Alerts PositiveSurprise NegativeServiceRecovery

Notifiesme Celebrateswithme Makesbadtimesbetter

Examples: Examples: Examples:
Applicationstatus Customerbirthday Multiplecomplaints
changes Valuemilestonereached
Onboarding Portfoliolossthresholds
Premiummissed Sufficientsavingdollars Transactionsdeclined
Significantrewardpoints for
expiring Anticipatesmyneed WantstoUnderstand
Assistsme Examples: Examples:
Examples: Brochurerequestfollowup Silentcustomer
Firstuseofanelectronic Startofstudentloan Paymentinstrument
channel paydown cancelled
Inactivecard

59
Opportunity Detect Roadmap
10.0 Feature: Groupby aggregation
Aggregationsetting:by
timestampand
Example transaction flow transactiontype;
Amountsaresummed
Day 1: $25, Deposit
Day 1: $50, Withdrawal Exampleshows
aggregationthatoccurs
Day 1: $75, Deposit
basedonthetransaction
flowforDay1
Date Transaction Type Amount

Day 1 Deposit $100 (25 + 75)

Forexample,Day1
transactionsaregrouped
Day 1 Withdrawal $50
bytransactiontype

Depositsand
Withdrawalsarekept
separate;andamounts
aresummed 61
Other 10.0 features

Trend components execute complex queries on Containers and Selects that do time slicing of data
into historical and current periods; and then check if a growth or decline relationship exists between
these periods
Sequence pattern - detects events occurring in a particular temporal order
Regular expression matching
e.g., detects if an incoming bank transaction has payroll with a description field

Expanded set of connectors

RabbitMQ support; Real-time file connector processes files as soon as they are moved to the feed dir

Monitoring A utility that reports on the number of transactions processed by a deployment

a capability that notifies the user if one of the jobs of the working deployment fails

Import/Export
a utility for transferring logic from one environment to another

62
Candidate features for 2017
Geo-location detection
Whatisit?
Awaytodetectgeolocationeventsandincorporatethemwithinthetriggersystem
Auserwillbeabletospecifyasetofnamedpolygonlocationsusinglatitudeandlongitudecoordinates
Fortransactionsthatincludelatitudeandlongitudeuserlocationinformation,theapplicationwillbeableto
determinelocationeventslike:1)useriswithxfeetofapolygon,2)useriswithinapolygon,and3)userisclosest
tolocationXYZ

Whataretheanticipatedbenefitsforourcustomers?
Customerscandetectcomplexbehaviorsthatincludelocationevents,like
CustomervisitedcompetitorstoreXtimesin3days
Customervisited3ofmystoresintwoweeks
CustomervisitedcompetitorstoreinageographyXmilesfromhome
Customervisitedastore3timesinonemonthandthenfailedtoenteranystoreinthenext2weeks

64
Example: Geo-location detection from telco

Competitor

Offer

Yesterday:Complainedtocall Now:Enterscompetitorsstore Now:

center Patterndetected:Customer
atrisk

65
UBX (Universal Behavior Exchange) integration
Whatisit?
1. OpportunityDetectpublishestriggeredbusinesseventstotheUBXeventbus;thusmakingitpossibleforany
UBXconsumerstoutilizedetectedcustomerbehaviors
2. PatterndetectionengineforUBXevents
1. UserdefinespatternsbasedonUBXevents
2. OpportunityDetectconsumestheseeventsatruntime,detectpatterns,andpublishesthedetected
patterns
3. ThesepatternsofUBXeventscarrymoreweightthanindividualevents,whichcouldberandom

Whataretheanticipatedbenefitsforourcustomers?
1. CustomerwillbeabletosenddetectedbusinesseventstoCampaign,Tealeaf,Engage,MobilePush,orany
applicationparticipatingintheUBXapplicationeventbus
2. CustomerwillbeabletouseOpportunityDetecttoobtainpatternsofUBXevents,like2Cartsover$50
abandonedinthelast10minutes

66
Example: Detecting patterns of UBX events

Opportunity Detect Ed abandoned Callaway and

2CartsAbandonedin30 TaylorMade drivers on Dec 23
minutes Campaign
DA:CartAbandonment
Generates
DA:CartPurchase John clicked twice on Titleist putter
Engage:MailingOpen
3Cartsover50Abandoned
offer Dec 23
follow-up offers
in1day
Engage:MailingClickthrugh

2eMail Clickthru onGolf
Clubsin1week
Mary opened LuLu Lemon sale offer
Dec 23 and Dec 24
67
68
Thank you!