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Ernan’s Insights on Marketing Best Practices

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.”

Monday, July 11, 2016

Are Your Policies Helping Or Hurting Customer Engagement?

Article by Ernan Roman
Featured on CMO.com
Are your policies helping or hurting customer engagement“You can only eat so much plain white cake. The 30 percent is the icing.” This is just one of the statements Joe McFarland, J.C. Penney’s executive vice president, made during a recent company conference. He then went on to instruct attendees, “We want you to stop doing things that don’t focus on the customer.”
Additionally, J.C. Penney CEO Marvin Ellison made the following statements: “Our marketing has to be more specialized,” “We have great data; we just aren’t using it,” and, “The customer loves us, and we need to love them back.”
Shifts from traditional corporate policies toward customer experience-focused improvements are reinforced by two important research reports:
  • Forrester principal analyst Laura Ramos noted: “Customer-centric companies must figure out how to engage customers on their terms throughout the customer journey. ... In order to become a customer-centric company, old metrics and models need to be thrown out. ... It doesn’t work that way anymore.”
  • A McKinsey report advised, “As improving customer experience becomes a bigger component of corporate strategy, more and more executives will face the decision to commit their organizations to a broad customer-experience transformation.”
One company that has put both money and policy behind its commitment to better its consumer experience via corporate policy is Chick-fil-A, which is currently the highest-scoring restaurant brand in the U.S. Customer Experience Excellence rankings.
The company spends more than a $1 million evaluating its service. In addition to traditional focus groups, the company conducts a quarterly phone survey with customers from each restaurant. Each location receives a two-page report detailing what's working and what needs improving.
“My business grew on the understanding that customers are always looking for someone who is dependable, polite, and will take care of them,” said S. Truett Cathy, founder of Chick-fil-A.
The company has a dedicated area on its site for Chick-fil-A stories. Additionally, its 80,000-square-foot Hatch Innovation and Learning Center is dedicated to helping the company invent next-generation customer experiences.
My three takeaways for marketers:
1. Make it a priority to challenge your corporate policies and procedures to determine whether they are creating obstacles or facilitating employees' ability to provide the best possible customer experiences.
2. Regularly engage consumers in “real life” customer experience surveys and conversations to determine what is and isn’t working. Listen. Learn. Make changes.
3. Do you have a formal training to make sure your CS strategy is put into action, with clear benchmarks to measure success? If the answer is no, fix that right away.
“Marketing can’t deliver a great customer experience independent of sales, service, and any other part of the organization. ... Without a holistic approach, you are really only hoping that you can deliver a great experience,” said Gartner analyst Jake Sorofman.
It is now no longer an option that marketers in every industry challenge their corporate structure to understand whether legacy policies are building barriers to, rather than enabling, customer engagement.

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.