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Event-based marketing is gaining ground because it drives value-producing action — and can be tailored to individual customers

Chris Twogood
VP Teradata CRM Marketing
July 08 - 14, 2002

More than ever before, leading-edge companies are lining up to invest in a highly compelling dimension of CRM (Customer Relationship Management) — event-based marketing. The term 'event' is tossed around loosely and often exploited to refer to a wide variety of marketing solutions and software products. Even well informed marketing professionals use the term to describe many different capabilities or methodologies. That's why it is important to provide a clear and definitive framework for industry and business client discussions.

Event-based marketing is gaining ground because it drives value-producing action — and can be tailored to individual customers. It thrives on detailed customer interaction and specific behaviour. Best of all, it is calculated to produce rapid responses, or intervention, aimed at creating pre-defined business value. In short, event-based marketing is appealing to pragmatic, payback-minded executives because event technology has in many cases paid for itself several times over — within months or weeks of implementation.

Event-based marketing has come a long way. Mature technology tools and methodologies are available to make it happen. Teradataฎ is ranked a global leader in this field by analysts because of our years of experience defining, developing and automating 'events' with our customers. Through this experience, we have defined four major customer 'event' categories based on programs our customers actually execute with success. For each type of event, we have also identified, in terms of percentages, the dramatic returns that marketers can expect — based on our experiences with Teradata clients.

In a broad sense, event-based marketing is a strategic business process designed to enhance the dialogue and relationships a company has with its individual customers. To work as promised and deliver positive results, it requires advanced technology and carefully crafted marketing plans. The extreme complexity of marketing one-to-one — across multiple channels to millions of customers — demands no less than detailed process design and technology integration — to ensure effective, automated dialogue that is relevant, timely and produces business value.

More specifically, event-based marketing refers to a number of technology-enabled communication tactics that can be implemented in the context of a company's CRM process. And, from this CRM point of reference, any changes in a specified condition (an event) could be managed as an opportunity to contact a customer with a sales, service or information message. We see event-based marketing happening at four levels: Simple, Complex, Real-Time and Sophisticated. Each successive level represents increased event complexity and an increased data detail requirement — yet yields ever-higher specificity and actionable customer insight.


Looking for customers that meet a certain condition constitutes a Simple event. For example, "Tell me everyone that purchased a new bike yesterday." These are typically followed up with a targeted communication to all who meet the criteria. This type of event is driven by scheduled segmentation schemas and usually run on a monthly basis, because time is not critical for execution of Simple events.

Examples of Simple events include product purchases, age thresholds, birthdays, address changes or purchase thresholds. While on the surface they appear intuitive, these 'simple events' — when coupled with relevant communications — can deliver double-digit returns on marketing activity. Simple events can be automated to occur at regular intervals, so it is not up to the marketers to remember to execute their associated campaigns. Simple event-based marketing benefits the company by improving customer perceptions of your company's knowledge of them. Companies that use 'Simple' event-based marketing have reported returns in the ten to twenty per cent range.

However, limitations exist at this level. Simple events are focused on common condition changes at a point in time, and typically are not performed with an eye to the context of the overall relationship for each individual.


Complex events are based on marketing responses to changes in customer behaviour over time. They are thus a bit more complicated to create and are often developed by marketing teams that collaborate with IT people. This activity consists of leveraging the data you have about your customers to understand behaviour trends over time. For instance, you want to know whether certain customers' spending or other activity is increasing or decreasing.

Complex events also require a level of knowledge about the data — so even though defined by marketing, the execution might require a user who is technically capable more of what we call a 'power user.' Complex events begin by building formulas — such as purchase patterns/activity between Date A and Date B — to determine a score that identifies the general direction of the data — positive or negative. Complex events like these bring more behavior and interaction history to the marketer's view of the customer relationship — and can generate higher returns.

Marketing can build and leverage this through an "SQL builder" that can be scheduled to either select all customers that meet a condition or provide a value — positive or negative — and "score" those customers with the result. This result can then be used to determine how and when to treat the customer, based on this value.

Complex events are scheduled and executed based on the frequency determined by the marketer. This type of event can be leveraged with other data to determine how to treat the customer. Therefore, complex events do not have to be tied directly to one campaign only. Multiple campaign or communication strategies may be applied to personalize the communication for the several scenarios. Teradata clients have realized returns of fifteen to twenty-five per cent on campaigns based on 'complex' events.


Real-Time events occur in two forms or types: these are session-specific, and non session-specific. First, session-specific Real-Time events are normally associated with web-based interactions. For instance, a customer purchases a PC printer, and then, while still "in session" at the web site, the customer is delivered an additional offer for paper and ribbons as an up-sell or cross-sell message. The purchase "event" is driven from a predefined product profile or bundle that might reflect "items that other customers have purchased who also purchased this product."

Non session-specific Real-Time events enable the marketer to leverage the event by combining it with additional information from the data warehouse, and responding with an enhanced offer back to the customer. This response could occur on the same channel, in a different session — or on a different channel. For example: a complaint e-mail received from a customer could be quickly transmitted to the outbound call center, allowing immediate remedial action. Another example: a customer visits a bank web site to check mortgage rates for refinancing, then quickly after, while interacting at an ATM, receives a message about attractive financing options — soon followed by a phone call from a personal banker with a personal mortgage package offer. Returns on 'Real-Time' event-based marketing are reported to range from twenty-five to thirty per cent.

When trying to decide which Real-Time event approach to take (session-specific or non session-specific), consider two key factors. First is the importance of the time dimension to the data. If it is less than 24 hours to a purchase, the potential value or importance needs to be balanced against the 'refresh rate' on the data warehouse. Second, consider the type, amount, and purpose of the data and whether it will be used for other purposes in the data warehouse.


Sophisticated events enable marketers to find carefully calculated opportunities to communicate with individuals. They are defined and initiated to find patterns — or a specific circumstance that indicates a significant change in an individual's situation. These are questions asked daily — scheduled queries of all of the detail data in your data warehouse that find changes in customer behaviour over time that represent opportunities to communicate with that individual. Sophisticated events might include this banking scenario: "Notify me any time that someone withdraws 180% more than his average withdrawal amount over the last 12 months."

This type of event is Sophisticated because it requires the data engine to scan all of the day's withdrawals, calculate the percentage related to all other withdrawals for each individual for the last 365 days — and then, if it is 180% of today's action, identify this as a lead. These events are typically followed up with highly individualized communications, frequently through a human channel — sales, service center, or other personal point of contact.

Customer communications based on Sophisticated events have produced dramatic returns for those companies that use them. Figures in this category range from forty to sixty per cent.

All four of these event categories, in combination with each other, can create sustainable competitive advantage that protects your customer asset base. As you think about the potential event opportunities in your business, make sure to also build a technology foundation that will enable you to define, detect and automate events across all four of these levels. This will help ensure your marketers can respond with rich relevance to specific customer interaction — and deliver the rapid payback your executive team expects on its technology investments.