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Ernan’s Insights on Marketing Best Practices

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.

Monday, August 1, 2016

Citi's Managing Director, Global Rewards, Answers 4 Questions For Marketing Innovators

Mary HinesAs Citi’s managing director, benefits, new product development and global rewards, Mary Hines oversees the growth and development of the company’s ThankYou Rewards loyalty program, as well as the benefit offerings associated with Citi’s Branded Cards portfolio. She is also responsible for leading innovation efforts within the Branded Cards portfolio and bringing new products to market.
Hines 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?
Nearly every business model on the planet is being impacted by a powerful, disruptive force: digitization. And with more consumers relying on mobile devices to interact with brands--in 2015, almost two-thirds of U.S. adults had a smartphone, up from one-third in 2011, according to the Pew Research Center--brands have no choice but to adapt or die. Adapting to the changing landscape isn’t just smart, it’s a matter of survival.
2. Why is this so important?
For Citi, leading what’s next and digitizing our model is central to our strategy. From 2014 to 2015, we saw a 25% increase in our global customer base interacting with us via mobile, and this trajectory continues. In order to remain relevant and innovate for growth, we need to ensure we’re interacting with consumers when they want and where they want, and increasingly, this is via mobile.
3. How will the customer experience be improved by this?
Through Citi’s ThankYou Rewards loyalty program, we’ve been on a journey to transform the offering so that we’re providing relevance in a digital world. We are optimizing the program for our mobile-savvy member base and enabling redemption where customers are. Our digital catalog has been mobile-optimized, and, through this, we’ve seen a twofold increase in digital engagement over the program’s analogue counterpart.
What we’ve found is that when we’re engaging customers where they want to be engaged, it’s a powerful relationship. In a study we’re about to release, nearly 90% of consumers said they are less likely to switch credit-card providers or banks when they use their credit-card rewards. So by interacting with customers where they are, we’re not only providing ease and simplicity, we’re laying the groundwork for a long-term relationship that will extend far past this mobile moment through technological innovations of the future.
4. How will this improve the effectiveness of marketing?
At the core of marketing, it’s being where customers are. However, the “where” has and will continue to shift as technology transforms at a rapid pace. And brands need to stay ahead of the game to stay in it.
Bonus: Favorite activity outside of work?
Being class parent for my son’s pre-K class—never a dull moment.
For additional Marketing Innovator stories, click here.

Thursday, July 14, 2016

Retailers Seeking Brand Loyalty Challenged by Volatile Store Traffic Environment

Article by Ernan Roman
Featured on Loyalty360
In the past year, a plethora of retailers made assertions pertaining to a “challenging store traffic environment,” and its negative impact on sales and, ultimately, brand loyalty.
Challenged by volatile store traffic
What’s more, these retailers have spoken of a challenging environment, with volatile macros globally, and an increasingly competitive landscape replete with digital technologies disrupting many aspects of their respective business models.
Ernan Roman, President of ERDM, told Loyalty360 that the challenging store traffic environment can certainly have a direct impact on loyalty marketers.
“Our firm, ERDM, recently conducted 2000-plus hours of voice of customer research interviews with millennials to understand their expectations of the retail shopping experience,” Roman explained. “The findings explain why many retailers are finding this to be a challenging time in terms of store traffic. Per the findings, millennials take for granted these factors in the shopping experience; choice, price value, service, speed, convenience, contextual relevance, and frictionless purchasing.”
A retailer’s shopping experience has to satisfy all these criteria in every element of the omnichannel mix, Roman noted.
“If the retail shopping experience does not bring additional value to the online and mobile shopping experience, why visit a store?” Roman said. “Marketers must learn from the omnichannel convenience, personalization, service, engagement and magic of the retail experience provided by leaders such as Burberry, Rebecca Minkoff, and Sephora.”
Based on the research findings, Roman recently visited a Sephora store and observed how the use of in-store technology, tutorials, and demos enhanced the customer shopping experience.
“But, the really thrilling part was how sales reps entered customers’ personal preference information on their tablets so customers would have their updated information as part of their profiles, therefore improving their future online or retail shopping experiences!” Roman said. “The Sephora reps were focused on improving the customers’ omnichannel experience and providing guidance to help them make informed decisions across all channels. The sales flowed naturally from this value-added engagement. Retailers that are not embracing this holistic, customer-focused and omnichannel vision will not win.”