Ernan’s Insights on Marketing Best Practices

Monday, October 3, 2016

Is Your Brand Committed To A Personalized Customer Experience? (Part 1)

Article by Ernan Roman
Featured on CMO.com
Raul OrtizToo many companies are still struggling to achieve deep and high-value relationships with customers. As a result, churn, attrition, and high opt-out rates continue to be significant problems. This is especially true among Millennial customers, who expect unprecedented levels of value and personalization from brands.
These findings are based on results from more than 160 VoC research studies our firm, ERDM, has conducted for brands such as Microsoft, HP, MassMutual, Gilt, and QVC.
In response to requests from CMOs, who are understandably frustrated and concerned by these persistent issues, we prepared eight questions to help determine whether your company is truly committed to personalizing the customer experience (CX) and building loyalty.
This article will be presented in two parts. Here are the first four questions, along with some possible answers and action items.
Question 1: What is your company’s true appetite for CX and loyalty transformation?
According to Mike Polner, director of product marketing for Five Stars, a mobile loyalty app provider: “The most successful businesses ensure their staff is engaged and understand the value of loyalty."
And according to Jeroen Hoencamp, CEO of Vodafone UK: “Transformation needs to take place both internally and externally. ... Listening to customers and understanding customer value from their perspective will allow customer-centric transformation to take place.”
Action Items:
  • Your brand culture and senior management need to support CX and loyalty initiatives by creating a customer-focused culture, customer-focused metrics, CX-based compensation, integrated consumer communication across all touch points, and an adequate CX budget allocation.
  • Keep the company engaged in the CX journey by establishing formal and regular means of providing the organization with progress report cards and performance against CX metrics.
Question 2: Do your fellow execs have a deep understanding of why you are focusing on CX and loyalty?
Brands that have successful consumer engagement strategies put consumer understanding at the top of their priority lists.
Bloomingdale chairman and CEO Tony Spring noted that consumer understanding is paramount in every aspect of the company’s marketing. Here are some key quotes:
  • “This is the age of empowered consumers. We need to connect with customers on their terms.”
  • “Consumers demand personalization and privacy. It’s a push-and-pull thing. We must instill trust as we build our relationship with our customers.”
Additionally, John Gerhardt, senior vice president, creative branding direction, at LVMH-owned DFS Group, noted: “Every person has a story to tell about where their loyalty lies, and we were thrilled to explore that concept ... to celebrate and thank our customers for the immense loyalty they show us. ... We wanted to celebrate the value of loyalty, which is at the core of all these experiences."
Action Items:
  • A CX program without a clear-cut goal is a useless CX program. Know what you want to accomplish by engaging your customers, understand what engagement actually means to your customers, and understand what it will take to accomplish this goal.
  • Define the criteria for evaluating the success of your CX and loyalty strategies. Set benchmarks and determine what factors and data will be monitored on a regular basis to determine progress, success, and improvements.
Question 3: Do you have the right data, metrics, and segments to measure CX impact and success?
In structuring its loyalty program, Safeway examined many data factors, some of which were surprising. Here is an important note from the agency that structured the program: “You will run the danger of cannibalizing your business by giving rewards to people who are going to shop with you anyway. ... It is better to target your programs mainly to those whose behavior you want to change.”
Prior to instituting the program, Safeway surveyed its customers and asked: How much do you spend on groceries every week, and where else do you shop? Answers were combined with the actual spending data to determine Safeway’s “share of wallet” and gain understanding of new opportunities that could be uncovered with a loyalty program.
Action Items:
  • How are consumers interacting with your brand? Does your data provide that answer? If not, it’s time to rethink how you collect and interpret incoming information to be sure that the data you are collecting is useful and brings actual insights to drive marketing initiatives.
  • Reinvent your data to put consumers into segments based on preferences, purchases, communication methods, inquiries/customer service issues, lapsed, new, loyal, etc. Then rethink communication and engagement strategies for each segment, not for customers in general.
Question 4: Does your staff have the right CX and loyalty skills, and do you have a customer advisory group?
Nick Mehta, CEO of marketing firm Gainsight, noted that having a dedicated customer success team, as well as a group of consumer advocates, is a necessity for building successful loyalty and CX. “The customer success team should be your eyes and ears. ... CS can tell you which users love using your service. ... Many times, users can offer informal advocacy and on-the-ground feedback that decision makers can’t. In addition, there are usually far more users than decision makers.”
Action Items:
  • Who on your team could offer customer success insights? Take a look at your entire staff and handpick representatives who can report on real-life CX interactions, problems, and successes for key learnings that can prompt new actions.
  • Arrange a consumer advocacy program with your most engaged customers to gain insights on how and why consumers are or aren’t motivated to engage with the brand.
Part 1 Takeaways
1. Active consumer listening with a goal of deep understanding is a key element of CX transformation because it lets brands look at touch points and interactions from a value-driven experience standpoint that cultivates ongoing loyalty, not just an end-point transaction goal.
2. Building CX means building trust. If consumers do not trust a brand or trust that the brand will deliver value or appreciation for their loyalty, the consumer will go elsewhere for a better experience.
3. Correct data interpretation is essential in developing CX innovation. True understanding of who and how consumers interact with the brand will shape every strategy, communication, and the CX program’s success.
4. Put together a customer success team with representatives from all aspects of CX and loyalty so that your company can continually have a 360-degree view of engagement wins and losses. Cultivate consumer advocacy so that you are regularly receiving input from those who interact with the brand most.

Monday, September 26, 2016

Holiday Inn's Ortiz Answers 4 Questions For Marketing Innovators

Article by Ernan Roman
Featured on CMO.com
Raul OrtizRaul Ortiz is marketing director for the Holiday Inn and Crowne Plaza brands in the Americas. He has oversight for the teams that develop the annual marketing plans for the brands, execute integrated marketing programs behind one big brand campaign idea, and develop long-range, demand-generating, brand-building capabilities.
Ortiz recently participated in our "4 Questions for Marketing Innovators" series.

1. What is one marketing topic that is most important to you as an innovator?
Building and developing advertising that adds value to consumers’ lives. Most brand and product leaders have put the consumer at the heart of their innovation strategy. Usually this is done by focusing on improving some aspect of their target’s life. Unfortunately, we are not always as disciplined when it comes to advertising, and we far too often put our needs and wants ahead of those of our audience.

2. Why is this so important?
Technology has allowed consumers to be bombarded with more advertising than ever before. When you add this to the fact that there are a plethora of brands asking consumers to buy this or that, overcoming consumer apathy toward advertising is one of the biggest challenges to marketing ROI. In order to break through to consumers and drive purchase behavior, we need to be smarter about developing creative that connects with consumers’ minds and their hearts. Technology has narrowed competitive product advantages so significantly in the past couple of decades. While striving to build continually improving product experiences, we also need to have holistic advertising that is relatable and improves the lives of our viewers/readers after experiencing it.

3. How will the customer experience be improved by this?
This disciplined approach to advertising would help consumers in numerous ways. Call me idealistic, but I aspire to help create a world where commercial breaks are a source of intrigue versus a source for groans. I want to be in a world where digital advertising anticipates the needs of our guests and connects them proactively not just with a product but, ultimately, to answers to questions they have at a life level.
If we are able to meet these ideals, we are giving consumers something no product or solution can replace, and that is time. The less time they spend fretting over where they’re going on vacation or where they’ll stay for their next big business trip, the more time they have for doing things that drive the most enjoyment or productivity in their lives.

4. How will this improve the effectiveness of marketing?
The more we respect the time of our audiences and consumers, the more they will reward us with trial and brand loyalty. The more trial and loyalty we drive with every dollar we spend, our brands will be rewarded with improved ROI. In order for advertising to have an effect, consumers have to engage with it. As I mentioned before, consumers are flooded with advertising, which means we need to give them a reason to engage with our social posts, content marketing, or 30-second ads.
I think that our campaign for the Holiday Inn brand, “Journey to Extraordinary,” provides a great case study on the impact that heart- and mind-opening advertising can have on a business. The campaign started in 2014 as a traditional campaign, called “Change Your View,” that had the goal of informing consumers about the significant investment our franchisees have made to improve our hotels and our service. We were effective with this approach, but our creative lead at Ogilvy & Mather, Jason Aspes, challenged us to tweak our approach and have our real guests tell consumers about their Holiday Inn travel experiences and share how the brand is helping them to make travel more memorable, more productive, and ultimately more enjoyable. The change to move the campaign from the perspective of the brand to that of our guests has worked out brilliantly for the business. We have been able to build the equity attributes we are targeting and drive unaided awareness and consideration in consecutive years. We have also seen big decreases in cost per conversion in both our TV and digital buys.

Bonus: Favorite activity outside of work?
Just one? I really love coaching my son’s soccer team, but I probably most enjoy exploring the awesome restaurant scene in Atlanta with my wife and friends.

For additional Marketing Innovator stories, click here.

Monday, September 12, 2016

"Sorry, We'll Fix It" Seem To Be The Hardest Words

Article by Ernan Roman
Featured on CustomerThink.com
Sorry, we'll fix itIn speaking about the Volkswagen emissions scandal, Johns Hopkins Professor Sylvia Long-Tolbert noted, “I don’t think people will be able to understand… a company that has misled consumers and been dishonest… people aren’t going to feel very confident in buying that [brand]… People want companies to acknowledge that a problem exists.”
Brand problems will always happen. But it’s how brands respond that will make or break consumer trust. According to an Ohio State University study on the power of apology, it was noted that the most important thing you can do is admit responsibility, “Say it is your fault, that you made a mistake.” A concern about apologies is that talk is cheap. It’s different if you say ‘I’ll fix what is wrong.’
And while Mattias Mueller, the chief executive of Volkswagen did have a “2 minute conversation” with President Obama to “personally apologize to him for our behavior,” the company has not extended that same courtesy to the U.S. public. Instead, in his prepared apology remarks to the U.S. public Mueller was somewhat defensive regarding the problem stating, “it was an ethical problem? I cannot understand why you say that… We didn’t lie.”
As expected, Volkswagen’s lack of ownership of its emission problems has had a dramatic effect on sales, with March the 16th month with a drop in sales over the last past 18 months.
In contrast, IKEA, which has had problems recently with dressers that tip over, has taken the issue head on. In one of the largest U.S. Consumer Product Safety Commission recalls involving over 29 Million IKEA products the company is now attempting to lead the charge in consumer safety.
U.S. IKEA President, Lars Petersson took to the airwaves to alert consumers about the issues, “You may have heard about the recall of IKEA MALM and other chests of drawers models… .At IKEA, we want to help create a better life for our customers. Part of that is helping our customers create a safe home for their families.” The company has created a campaign called, “Secure It” to educate consumers about tip over accidents.
And while this is not exactly an apology, IKEA is acknowledging the issue and offering help to consumers. It has received the backing of The American Academy of Pediatrics, Consumers Union, Consumer Federation of America, Kids In Danger, The National Center for Health Research, Public Citizen and Shane’s Foundation.
TakeAways on Brand Problem Resolution:
1. Findings from our VoC Research indicate that consumers want immediate and honest resolution to negative experiences. Brands need to own the problem and define actions to correct the error.
2. Additionally, our VoC research indicates that there needs to be a change in company culture and thinking; from “how does this benefit us?” to “how does this benefit the customer?” If brands portray themselves as defensive or dishonest on hot-button issues, consumers will develop distrust towards the brand.
3. In the report, How to Save Brand after Crises? it was noted, “After a brand crisis, how the firm responds eventually determines the extent to which the brand can be saved… consumers have the right to determine whether to forgive the brand or not… individuals … are more likely to trust the transgressor following an apology.” But the study goes on to state that consumers can get even angrier when, “[the company does not] acknowledge its responsibility in the apology letter.”
Brand crises have enormous immediate and far-reaching implications. Rapid acknowledgement and a sincere, human apology are the determining factors as to whether consumers will ultimately forgive, and continue the brand relationship, or not.