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Ernan’s Insights on Marketing Best Practices

Monday, July 27, 2015

Lowe's Innovation Labs Director Answers 4 Questions For Marketing Innovators

Article by Ernan Roman
Featured on CMO.com
Kyle Nel is executive director of Lowe's Innovation Labs, where he has developed the Lowe's Holoroom, an augmented and virtual-reality home improvement design tool, the OSHbot autonomous retail service robot, and in-store and online 3D scanning and printing.
In Nel’s words: “I (and my team) build new technologies that solve consumer problems, as envisioned through science fiction prototyping, by creating uncommon partnerships to quickly make science fiction a reality.”
Nel, who serves on a variety of advisory committees and boards, including Google Consumer Surveys, Fringe Factory, and the Insights and Innovation Exchange, recently participated in our “4 Questions for Marketing Innovators” series.
Kyle Nel1. What is one marketing topic that is most important to you as an innovator?
Technology and marketing are both fields that have been completely transformed over the past decade, and the pace of change is only accelerating. The critical piece to keep in mind, though, is the human component. Cramming tech in any context just to say you are innovating is not enough. Particularly in the retail setting, tech has to make that experience simpler, more intuitive, and add real value to the customer, or it’s just noise.
2. Why is this so important?
Without a focus on people, technology is often a solution looking for a problem. We start innovation with a process called science-fiction prototyping that grounds our work in true narrative and enables us to explore possible ways that technology could impact our lives in the future and address the challenges we know our customers face every day.
This process has helped our teams bridge the “chasm of how” that puzzles entrepreneurs and innovators all around the world, and provides a shared understanding of how technology and market needs intersect. By beginning with a story, we create a common language and vision for the organization from which we seek out partners and build new technologies further and faster than we ever predicted at the start.
3. How will the customer experience be improved by this?
Customers have many choices of where to shop, and little time or patience or attention for innovation efforts that don’t solve their problems. Lowe’s Innovation Labs has introduced three projects so far that each address a specific need for our customers.
The Lowe’s Holoroom was our first project. It is an augmented and virtual-reality home improvement design tool that helps our customers visualize a completed home improvement project and share that vision with their families and friends. We know that the visualization challenge alone stops many projects in their tracks.
Our most recently introduced project is an in-store 3D scanning and printing service that puts the power of personalization right in the hands of our customers as they can choose to customize home improvement objects and scan in their own items. These objects can then be printed in a wide range of materials and shipped directly to a customer’s home.
4. How will this improve the effectiveness of marketing?
Customers get excited about innovation when it’s accessible and fun, and this strengthens the trust they have that a brand understands and can meet their unique needs. Our OSHbot autonomous retail service robot is a great example of this phenomenon. The initial excitement at launch drove significant foot traffic into the store to see the first retail robot, but what we are really excited about is that as the novelty wears off, our customers and employees are highly engaged and responding to the robot as a useful tool to make shopping our stores more efficient and therefore enjoyable.
Bonus: Favorite activity outside of work?
Playing the mandolin.

Monday, July 20, 2015

Days Of 'Spray And Pray' Marketing Are Done

Article by Ernan Roman
Featured on CMO.com
Too much marketing communication and too little targeting has been behind a sharp uptick in brand damage.
Millenials are high volume sensitive consumersIn a recent study on Millennials, the Aimia Institute coined the term “High Volume Sensitive Consumers” for those segments across all generations most likely to permanently disengage with brands if they receive high volumes of generic email communications.
Of this group, Millennials are the generation most likely (44% more likely) to permanently disengage.
"Millennials are the 'always on' generation, but it is a mistake for marketers to make assumptions about their communications preferences. Just because a person shares their details with a brand does not mean they want to be inundated with lots of generic messages," said Martin Hayward, senior vice president, global digital strategy and futures, at Aimia. "Marketers must work harder to listen to individual customer preferences and tailor communications appropriately."
Additional insights from Aimia also reveal that High Volume Sensitive Consumers, across all generations, have the same willingness as others to share their personal data. However, they are 2.3 times more likely to disengage when bombarded with large numbers of irrelevant messages.
High Volume Sensitive Consumers will only engage if the content they receive by email, for example, is tailored to them. If it is not personalized and too frequent, they will:
  • Block numbers (80%)
  • Close accounts and unsubscribe from email lists (84%)
  • Delete apps because of push notifications (82%)
  • Unfollow brands on social channels (86%)
Regardless of which generation you're targeting, it's imperative to understand that cohort's content and media preferences when segmenting your database for marketing communications. Let's take a look at two successful brand examples.
Malibu Meets Millennials Memorably
Malibu Rum recently ran a mobile-only video campaign to target 18- to 24-year-old men and women for National Pina Colada Day. The campaign ran solely on video for smartphones with time-specific, location-based feeds in a ticker format for brand interaction.
The campaign drove more than 8 million views across four months. According to Adam Boita, head of marketing at Pernod Ricard UK, “With pinpointed audience targeting, the campaign successfully cemented mobile as a vital component in making Malibu synonymous with summer for our target audiences.”
Swanson Health Products Connects With Boomers Online
Many marketers assume that Baby Boomers are not tech savvy and limit digital messaging, but this is wrong because:
  • According to Google, 83% of Boomers use the Internet to find information before any other medium.
  • Forty-nine percent of people over the age of 45 have made a purchase on their smartphones and even more use mobile devices to gather information about a product or company.
  • The number of Boomers using social media has tripled to 43%.
Swanson understands that firsthand. "We own the Baby Boomer market for vitamins and supplements," said Swanson chief executive officer Ken Harris.
Approximately 93% of Swanson's new customers are acquired on the Internet, thanks to its Web marketing programs geared to acquire Baby Boomers.
"Baby Boomer women know how to use the Internet," Harris said. So the company targets its marketing to Baby Boomer women because, it says, they are interested in maintaining heart, joint, and digestive health.
3 TakeAways
Consumers' tolerance for "spray and pray" marketing blasts is at an all-time low. Sending quantities of irrelevant messaging is an invitation for key segments of your file to opt out, causing damage to your brand. So keep in mind:
1. When segmenting your database for marketing communications, be sure you understand the generational segment's content and media preferences. Identify the High Volume Sensitive segment within your customer base, across all generations, and track their expectations and tolerance levels for marketing communications.
2. Understand that too much irrelevant messaging could be the tipping point for those who would rather opt out than wait for marketers to learn their preferences.
3. Consumer's tolerance for "spray and pray" marketing blasts is at an all-time low. Sending quantities of irrelevant messaging is an invitation for key segments of your file to opt out and cause damage to your brand.

Monday, July 13, 2015

Human Data: The Powerful Differentiator

Article by Ernan Roman
Featured on the DMA Advance Blog.
Human Data: The Powerful Differentiator
“We believed that with tighter targeting we could increase engagement. By acting on insights from Voice of Customer research, we were able to go far beyond our previous segmentation strategies and now use in-depth self-defined life stages and attitudes toward certain product categories. As a result, we are seeing significantly improved responses in a category that has low consumer engagement and inertia.” Kris Gates, VP, Consumer Experience Marketing, MassMutual Retirement Services.
True Personalization is a 2-Step Process: Listen & Respond
Human Data
Findings from the latest B2B and B2C VoC research conducted by our firm, ERDM, indicate that the key drivers for achieving deep customer engagement are self-defined life stages and attitudes toward the company and the product categories. So, today more than ever;
  • Marketers must listen to customers, understand their individual needs and build experiences and products that are competitively differentiating.
  • Use customer insights to understand how your different customer segments define engagement and positive experiences. Then put those insights into action to improve the customer experience across every point of contact with your organization.
  • High quality experiences must be maintained and experientially adjusted throughout the relationship to remain relevant across the individual’s ever-changing life stages. This applies to B2B and B2C customer life cycles.
Here's an important insight from Mike Rude who is responsible for innovating the freight solutions customer experience at FedEx, including FedEx Freight and FedEx Express Freight. He co-authored the original article upon which this blog is based, “Human data: The powerful differentiator for FedEx, MassMutual and Gilt.” The article appeared in the Journal of Digital & Social Media Marketing, Vol. 3 No. 1. Download the article by clicking here.
According to Mike, “We work hard to first understand the needs of the customer. This enables us to ensure that technology deployment will focus on delivering the optimal customer experience at every point of contact and every channel important to our customers. Focus on understanding what the customer wants and how to use technology to deliver on those expectations.”
Gilt, a respected online retailer, also uses customer insights to drive deep personalization across all channels and all touchpoints. Results of these efforts have netted the company increased orders, decreased unsubscribes and higher repeat-purchase rates. “Gilt's commitment to a personalized experience [starts at] the home page of the web site or mobile app ” states Welington Fonseca, former VP of marketing and digital analytics. He continues, “All communication is personalized…Sales [are presented according to] the highest affinity to a consumer's past behavior and preferences (browse, purchase, favorite brands, wish list) with all other sales ranked according to relevance based on previous shopping behavior and collaborative filtering.”
Elements of Human Data and 4 Levels of Trust
Factors in acquiring actionable human data include the following B2B or B2C opt-in self-profiled information regarding;
  • Key issues, needs, expectations of that individual.
  • Decision-making process, roles and titles of influencers and decision makers. This applies to B2C and B2B customers.
  • Messaging and media preferences.
  • And critically, self-described personality types, attitudes, life stages.
However, in order to acquire the precious human data necessary to achieve true personalization, your company must be seen as worthy this information. Four Levels of Trust emerged from the VoC research:
  1. Do what you promised: Deliver on your fundamental brand promise.
  2. Treat me fairly: Fair and customer focused pricing and customer service policies.
  3. Protect my information: Explain the reasons for the opt-in information requests and assure me of the privacy and safety of my data.
  4. Improve my experiences: Use my stated preferences and aversions, to dramatically improve my experiences.
In Summary
A deep understanding of how different customer segments define high-value, personal experiences with your specific company and products will enable you to learn what human data customers want you to use to significantly improve their customer experiences.
The numbers from MassMutual say it all. Following are the results from initial pilots run by Kris Gates and his team using human data versus the control groups;
  • 94 per cent higher open rates
  • 1,062 per cent higher engagement with content
  • Zero Unsubscribes
  • 100 percent deliverability
  • 400% increase in response.
Best wishes for success with your customer experience innovation. For 12 takeaways to help you implement your own human data driven customer engagement strategies, click here.