Ernan’s Insights on Marketing Best Practices

Monday, June 20, 2016

CMOs, Here's Why You Should Care About Explicit Data

Article by Ernan Roman
Featured on Forbes.com
Marketing Personalization Misses the MarkIt’s time to take the next step with your data strategies. According to our recent research, customers, especially Millennials, want to drive the customized experiences and interactions they have with brands. To meet these expectations, marketers must make a profound shift and enrich their implicit data with the power of explicit, self-profiled preference data.
You have no doubt been using implicit data, that is, information which you’ve data mined or your customers provided to indicate short-term interests or needs—but not to intentionally indicate deeper or longer-term preferences. Examples of implicit data include web browsing behavior such as page views, items placed in the shopping cart, wait-listed items, items purchased and data mined from social media sites such as Twitter or Facebook.
This implicit data certainly has value, but per findings from our more than 2,000 hours of VoC research interviews for clients such as Gilt, MassMutual, IBM, HP and QVC, it is not delivering the response rates or meeting the expectations of many BtoB and BtoC customers. Research findings indicate that today’s customers want to drive high levels of relevance and personalization through explicit preferences they provide.
Explicit data is self-profiled preference information customers provide in the Preference Center of a site or through dialogue boxes. Here’s a b-to-c example: A customer specifically tells a merchant she is interested in trendy professional clothing for the workplace. Here’s a b-to-b example: A customer tells a company that they want training programs on digital marketing for new hires.
In an IBM blog it was noted, “from a customer loyalty perspective, personalization is more than just using some fancy technology to message a customer by name or upsell them a complementary product based on “people like me.” True personalization … [offers] the right incentive, in the right amount, targeting the right behavior, in the right channel, at the right time. In essence, it means building a unique strategy and set of program rules for each customer, not a one-size-fits-all approach.”
The VoC research also identified eight critical points in brand lifecycles where customers want explicit data-driven personalized engagement:
1. Purchase
2. Onboarding
3. Anticipatory responses to decreasing engagement (visits, responses, purchases)
4. Immediate responses to negative experiences
5. Surprise-and-delight thank-yous
6. Value-added cross-selling and upselling
7. Repeat sales
8. Renewals
Life Time Fitness uses personalized content to improve the health of their marketing. The company sets consumer journeys and sends 7 million personalized emails per month according to predetermined segments and has seen a 154% return on its investment.
Personalized content improved Life Time Fitness’ open rates by 80% over two years to help the company add memberships and increase conversion rates. Member experiences were improved by adding communications before, during and after their time at a Life Time facility. Targeted follow-up emails addressed any issues or concerns which reduced unsubscribes by 15% and created additional cross-channel sales from existing members.
“As marketers, it’s less about us understanding what products and services we put in front of [members]. It’s more about how we continue to enrich the experience that they’¬re having … as well as the relationship they have with Life Time,” said Keith Dieruf, vice president of digital marketing.
“The content of every communication via email, online, mobile texts, or mobile notifications [help members] walk through that journey to get them to where they personally want to go,” said Renee Main, VP of marketing, member acquisition, and retention.
Explicit Data Takeaways
1. Use customer insights to determine:
• How your customers define appropriate explicit data
• Value exchange for requesting explicit information
• Earning the right for progressive profiling
• Design of high value Preference Centers
2. Test to determine the right mix between implicit and explicit data. Using only implicit data is not enough to drive true personalization.
3. Design preference data capture for every channel, digital and physical. Every channel must respect preferences and aversions.
Customers understand personalization. But they want it to be appropriate and they want to explicitly customize it. Test this and you will see that it drives increased conversion rates, return visits, overall engagement and decreases email unsubscribe rates.

Monday, June 6, 2016

Current State of Customer Experience and Personalization: Not a Pretty Picture

Article by Ernan Roman
Featured on Loyalty360
Current State of Customer ExperienceDuring the May 26 session titled, Today’s Personalization is Broken. Learn the Breakthroughs that Work!” at the 9th annual Loyalty Expo, presented by Loyalty360, Ernan Roman, President, ERDM Corp. talked about the current state of customer experience and personalization among loyalty marketers.
Roman’s findings were based on learnings from more than 15,000 hours of Voice of the Customer interviews.
“The perception is we’re just putting lipstick on a pig,” Roman said.
To give a better picture of that, Roman offered several quotes:
“What we receive is not smart personalization. They aren’t personalizing the things that matter to me!”
“What they consider personalization is so old-fashioned.”
“I want more than just buying history-based emails.”
“With today’s technology, I expect emails to reflect my interests and preferences.”
A CMO of a Fortune Company added: “We are using new CRM technology to automate old bad behaviors … not guided by how customers define improved CX. Result; high tech, irritating and brand damaging spray and pray.”
Roman said that customers want deeper engagement at eight lifecycle points:
- Acquisition
- Onboarding
- Anticipating responses to decreasing engagement
- Immediate responses to negative experiences
- Surprise and delight thank-yous
- Value-added cross-selling/upselling
- Repeat sales
- Renewal/activation
Despite increased privacy concerns, Roman said B2B and B2C customers are willing to provide trusted brands with deep business and personal information in exchange for more personalized offers and communications. “This fundamentally reframes data privacy concerns because of reciprocity of value!” Roman said.
Roman touted the VoC-based Reciprocity of Value Equation.
Consumer Reciprocity
Recognition that, to receive true personalization, must provide deep personal or business preference information. This marks the shift to explicit vs. implicit personalization.
Business Reciprocity
Commitment by marketers to provide smart personalization; to be truly personalized, must be based on more than transactional, overlay, and inferential data.
Human Data
B2B or B2C opt-in self profiled information
Key issues, needs, expectations
Decision-making process
Messaging and media preferences
Self-described personality types, attitudes, life stages

Consumer reciprocity + Business reciprocity + Deep Human Data = CX innovation.
What's more, Roman offered a 13 point CX Innovation Check List:
1. Three strategies for delivering on customer expectations;
Capture individual preferences
Use preferences to drive true personalization
Establish guidelines for safeguarding data privacy.

2. Don’t ruin the hard fought gains by sending spray and pray blasts which disregard preferences in hopes of generating extra sales.

3. Find the right mix between implicit and explicit data; using only implicit data is not enough to power true personalization.

4. Consumers define personalization as much more than “those old-fashioned transaction-based communications.

5. Communications should reflect my individual preferences.

6. Change company culture and thinking;
From “How does this benefit us?” to “How does this benefit the customer?”

7. Insights from customers are a privilege, not something you are entitled to.

8. Understanding the Seller’s Journey (your sales channels) are as critical as knowing the Buyer’s Journey.

9. Enable preference-based personalization across every channel.

10. Motivate customers to provide ongoing feedback about the relevance of your offerings and communications.

11. To drive change, shift focus from E (Expense) to R (Revenue)

12. Ensure that every department and channel uses and respects customer preference information.

13. Create programs that recruit your best customers to drive social engagement.

Monday, May 23, 2016

Is Your Brand in Sync With Customer Expectations?

Article by Ernan Roman
Featured on CustomerThink
Marketing Personalization Misses the MarkTwo events occurred during the past few months that are important to marketers: WalMart, known for a focus on discount pricing experienced a share tumble of 5% after they lowered their full-year sales forecast. However, Starbucks, known for its unabashedly high prices decided to raise its prices higher and consumers have decided to keep on paying.
What is behind these events? Customer alignment… or not.
Starbucks knows coffee. They also know the high-end coffee consumer. And, they have been laser-focused in developing a clear perception of their brand that is understood and embraced by its target audience.
Walmart had that – and then they decided to change – and lost it. As a retailer the company knew retail better than many of its discount-priced competitors. They also knew their lower end, bargain-shopping consumers. But then they took on trying to become a Grocery and trying to become a Pharmacy. And, in trying to capture a larger share of market, the company has actually lost.
Starbucks, Known for Being a High-End Brand with High Prices is Winning
Why does Starbucks work? It’s simple; consumers understand the perceived value. The company does not waiver from its core perception. No matter where or how they buy it, consumers know what they’ll get from the Starbucks brand (no matter how much they have to pay for it.)
On its brand equity, Starbucks CEO Howard Schultz noted, "The success of Starbucks demonstrates the fact we have built an emotional connection with our customers. I think we have a competitive advantage over classic brands in that every day we get to touch and interact with our customers directly."
Schultz went on to discuss the value of the Starbucks brand, "Tell your story, refusing to let others define you. Use authentic experiences to inspire. Stick to your values, they are your foundation."
When other companies are looking for ways to lower prices to lure customers, Starbucks has opened even higher priced luxury Roastery stores, where customers can get a more rarefied (and expensive) offering of coffees.
Caffeinated consumers have helped the company to achieve record revenues in 4Q2015 of $4.9 billion with double-digit percentage gains over the previous year.
WalMart Trying To Be All Things To All People is Losing
WalMart has always been the "Blue Light" special company. And, when they stuck to what they were good at, they prospered. Consumers understood the "home-spun" low-priced brand and knew that they’d find a selection of bargains when they walked through the door to say hello to the store "greeter."
But then the "greeters" went away along with the "down home" friendly feel and groceries and pharmacies showed up. And now, the company’s strategy is one of transition. It is taking on not only competition in its own retail industry, but now also taking on many other industries. In the immediate transition process this new strategy is proving to be an uphill undertaking.
Though Walmart is blaming lower margins in its pharmacy business, for a part of their recent troubles, the company has no plans to change even though its counterpart Target recently threw in the pharmacy towel, announcing that it was selling off its pharmacies to CVS.
When asked about the company’s recent decline, Chief Executive Officer Doug McMillon noted that they are working towards the future, "What we’re talking about is how we transform the company…We have got to get the company positioned to serve the customer in the long term."
1. Consumers have many choices, so they need to believe that your brand understands them and is there to meet their needs.
2. If perception of your brand is blurred, targeted messaging is not possible because there is no differentiating value proposition.
3. Consumers want their voices heard and they will pay more for a buying experience they perceive to be specifically built around their "wants."
Generally, you get one chance to make a first impression with consumers. And then subsequent marketing efforts reinforce that perception and cultivate value around it. Knowing what consumers want from your brand and ensuring that you consistently meet or exceed those expectations pays off handsomely in customer retention and healthy profit margins.