Ernan’s Insights on Marketing Best Practices

Tuesday, May 31, 2011

Useless Technology... Cautionary Tales from Ford and Fairmont Hotels

Our suite at the Fairmont Pacific Rim in Vancouver was gorgeous. We had checked in at 3 am after a red-eye flight and I went into the bathroom and looked for the light switch. I was confronted by a panel which gave me 6 choices. There were 3 "light scenes" including "night", "spa" and "groom", (why nothing for bride?). Then another 3 choices: "main", "vanity" and "off". With the exception of "off", none of the options made much sense.

Plus, I kept feeling badly that "bride" had been omitted. My daughter pointed out that my failure to realize that it meant "groom" as in "groom
oneself" probably explained why I did so poorly on the SATs.

Four hours later, we were woken by the sound of our daughter's angry voice. She was on the phone, insisting that the front desk manager come to the room immediately, because no one had responded to her previous calls explaining
that the high-tech drapes on the floor-to-ceiling windows had been opening and closing by themselves for the last two hours, letting in the blinding

Engineering and the manager eventually came to the room with a laptop and offered to re-program the drape settings. We stated that clearly, we were not the only people who had experienced this problem and that, evidently, a lasting fix had not been found. They admitted this was true.

The solution? We all agreed that the only guaranteed solution would be to remove the motors from each of the 8 drape sections in the suite!

Don't get me wrong ... I love technology. Some of my best friends are technology geeks and some of our best clients are technology companies. But, there is a difference between technology which is functional and useful and attempts at "gee whiz" which aren't.

Consider my wife's new Lincoln MKS. Advertised as the super high-tech offspring resulting from the union of Ford and Microsoft, it is a nice car generally, but there is one persistent problem: it often won't start.

The push button ignition technology is flawed and often leaves my wife stranded and anxious on dark streets or parking lots, pushing the ignition 12 to 17 times before it will decide to start.

The Ford dealer mechanics can't fix it because the computer system is too complex, and the Ford engineers "cannot duplicate the problem" and therefore, after 3 months of this persistent issue, have decided that they can't do anything.

Ford has washed it's hands of the situation and left my wife in a dangerous situation, not knowing if her car will start.

But I stray, the customer dis-service attitude of Ford is a topic for another blog...

Back to technology. Companies have to ask themselves ...is certain technology necessary? Who does it benefit? Is it a useful application of technology? Will the user be better off than with a simpler solution?

No matter what my daughter says, I still feel badly that the bathroom setting only thinks of the "groom" and not the bride.

Monday, May 23, 2011

5 Steps for Recalibrating Your Marketing in Case of a Double Dip Recession

THE PROBLEM: Some economists warn that the global economy could slip back into recession at some point during 2011, a prospect that has marketers who barely survived the last recession deeply concerned.
THE SOLUTION: Implement 5 key strategies for winning more repeat orders and gaining market share during the next economic slowdown.

Consumers now expect more for every dollar spent, they expect to be listened to, and they are empowered by online and social media vehicles to voice their expectations. Therefore, marketing strategies and messaging which have not been recalibrated within the past 24 months are out-of-sync with the marketplace.

Why wait to find out whether or not that predicted downturn materializes this year? Implement the 5 critical marketing action steps below, and be prepared!

STEP I. Use Voice of Customer Research, (VOC), to Determine What Your Customers Expect In This Uncertain Economy.

This involves in-depth interviews with prospects and customers to understand how they expect you to satisfy their needs for a high-value relationship based on increasingly relevant offers, services, and communications. To learn how Microsoft leveraged voice of customer guidance to develop a powerful customer engagement program which generated “unprecedented “ results, refer to this case study.

STEP II. Create VOC-Driven Opt-In Relationship Strategies

This means engaging prospects and consumers to tell you exactly what they value and want as part of a Reciprocal Value Exchange. Learn what you must offer in order to motivate customers and prospective customers to provide you with information about themselves, their organization, and their goals. The result: you will create a uniquely powerful Opt-In database.

STEP III. Create a VOC-driven Multichannel Mix

Preference-Driven Multichannel Marketing is the VOC-driven process for deployment of the social and traditional multichannel media mix, per individual preferences.

The optimal deployment of media should be driven by VOC learnings to ensure both relevance and effectiveness. Note that key elements of the multichannel mix must be deployed per the opt-in preferences of individual customers and prospects.

STEP IV. Create a VOC-Driven Social Media Presence

This means, not "selling" per se, but creating customer-driven strategies for real-time engagement with your customers and prospects. Use VOC research to understand how customers and prospects define a strong relationship with your company ... and learn how customers want that relationship supported via social media.

Your goal with any social media campaign is to build loyalty through engagement. People who participate in an effective online community return to a site nine times as often and stay five times as long.

STEP V. Invest in an Excellent Customer Service Experience

This means not pretending that customer service is something for Operations to worry about.

It means repositioning customer service strategically, as a profit center for your organization, and judging its effectiveness by its ability to generate excellent customer experiences, that drive repeat business and word-of-mouth referrals which generate new business.

Life Line Screening Case Study Results: 40% increase in returning customers, based on implementing VOC-driven relationship strategies per the five steps above.

These 5 steps will ensure that you are aligned with your customer’s key needs and priorities and will set you apart from competitors who are doing the same old thing.

The 5 steps should become part of your company’s core culture to help you attract and retain the customer evangelists who will help your business to grow -- even in a down market.


Start with a commitment to simply listen, in-depth, to your customers and prospects and learn what they feel must happen for you to “do right” by them.

In “doing right” by the customer, you pay no price, but instead generate loyalty that outlasts economic ups and downs.

Monday, May 16, 2011

Powerful Customer Service Drives New Customers, Retention, and Revenue

THE PROBLEM: Customer loyalty is decreasing, attrition is increasing and so is the cost of generating new customers.
THE SOLUTION: Re-think the role of customer service. Deploy it as a revenue generating resource focused on retaining customers and generating positive word of mouth which drives new customers.
Innovative marketers are proving once and for all that customer service, long perceived as a cost center, can be deployed as a strategic resource that generates revenue. Following are examples of how two Relationship Marketing Innovators, QVC and Songza, are effectively leveraging the power of high impact customer service.
The legendary merchandiser QVC has built a long-standing record of customer loyalty by focusing on improving the front-line customer experience. Executive leadership for change and innovation in the customer experience has been provided by John Hunter, EVP of Customer Fulfillment Services. According to John, “The penalty for not listening to the customer today is a lot steeper than it was in years past; similarly, the penalty for service failures becomes steeper in a social media environment with more impact to your brand”.
“Reducing customer wait time, providing customers with the information that they need to buy the product, and making buying fun and simple are all critical deliverables for our customers. As a result, our percentage of repeat customers continues to rise."
QVC's many initiatives to drive constant improvements in the customer experience include:
*Frequent Voice of Customer tracking surveys.
*A culture that constantly rewards the circulation of customer recommendations and suggestions about new product offerings.
*Regular customer roundtables with call center employees to identify new ways of improving customer satisfaction.
Songza is the social music service that helps users discover and stream music which is curated based on their interests and their friends. They have achieved significant user loyalty by prioritizing the role of high impact customer service. The goal: memorably prompt, upbeat responses to customer inquiries or problems. Elias Roman, CEO of Songza, explains the importance of this goal from a marketing perspective: "Invariably, even customers with complaints are shocked that a) they got a quick response, b) they got a quick response from a human being and c) the human being was responding with in-depth information, positive tonality, and perkiness”.
“Creating positive perceptions about your brand is all about positive engagement, and that is possible, almost regardless of the content of your communication, if your response is sent quickly, with honesty, and with positive emotion. The service response is a very important marketing opportunity for companies that are aggressive about immediately responding to customers".
As CEO, Elias is making customer service both a personal and organizational priority. His belief: the job of a CEO is to drive maximum return on all company resources, and the ROI from customer service is exceptionally high, which makes service a critical component of Songza's marketing mix. Far from delegating, cutting back, or outsourcing his organization's service operations, he is personally committed to managing it as a profit center.
arrowRe-think the role of customer service, from a cost center to a revenue generating, high ROI operation. High quality customer service drives positive word-of-mouth, which drives high quality new customers.
arrowMake it a corporate priority to provide rapid response, as measured in minutes, not days or hours.
arrowUse messaging that is honest , positive, and personalized in addressing the person’s need or question.
arrowIf you’ve made an error...take responsibility for it. Deal with it honestly and openly, don't beat around the bush by using tired, meaningless phrases such as “sorry for any inconvenience”.

Monday, May 9, 2011

Powerful Strategies for Customer Retention and Engagement

THE PROBLEM: Given the soaring cost of customer acquisition, retaining customers has become a major priority.
THE SOLUTION: New strategies for effective customer engagement are required. Traditional customer satisfaction indicators do not provide sufficiently detailed information to help you re-engineer your complex customer retention strategies. You need in-depth customer insights to guide you regarding how customers define true engagement and what you need to change to increase retention.

Life Line Screening is a leading provider of community-based preventive health services. The company provides affordable, high-quality screenings that are essential to the early detection of risk for stroke, heart disease, diabetes, osteoporosis and other conditions. This Relationship Marketing Innovator’s direct-to-consumer model is at the forefront of consumer-driven healthcare.

According to Eric Greenberg, Life Line's Executive Vice President of Marketing, “Our goal was ambitious: To double the total number of returning customers from 2009 to 2012. Initially, our focus had been on the familiar Net Promoter Score (NPS), which measures the consumer’s answer on a one-to-ten scale to the question, “How likely is it that you would recommend our company to a friend or colleague?” In support of increasing scores using that metric, senior management undertook a number of important initiatives, including improvements in customer feedback and response systems, “training blasts,” internal incentives, the “adoption” of certain lower-performing teams, and the circulation of a fourteen-point Customer Guarantee”.

These initiatives led to improvements in the NPS scores, which already were at very high levels. But, management felt the improvements weren’t as significant as they expected. According to Eric, “We knew that what we had been doing was adequate, but we weren’t convinced it was superior. Our customers are quite satisfied with the service we provide and the value for the money. Yet, sometimes customer satisfaction is not enough. Your customers can be quite satisfied with your product or service but view their experience with you as a worthwhile single event, not the beginning of an ongoing relationship.”

Life Line Screening realized that in order to achieve the projected magnitude of increases in customer retention, they needed a much deeper understanding of customer’s expectations for a more satisfying experience and relationship. So, they initiated a research study using in-depth, 60 minute Voice of the Customer (VOC) interviews, with a cross-section of customers. As Eric explains:“What we are learning from the VOC research is that our customers trust us and value what we provide them. But, they are looking for deeper and ongoing engagement. This means that they are looking for us to be more proactive across all the customer touch points. If we want customers to truly value us as a part of their health-care team, we have to more proactively engage with them. Whether that means an outbound service call to allay their fears before their first screening, or a call to ask if they understood their screening results, or ways to help them feel comfortable and at-ease during the screening process. They want us to provide information, solutions, and ideas that can help them stay healthy and independent.”

Results: By implementing retention programs per the in-depth feedback from their customers, Life Line Screening has already achieved a 40% increase in returning customers. Ongoing changes will drive further increases in retention.

arrow Develop strategies for providing deeper and ongoing engagement. These strategies should enable you to be more proactive across all the customer touch points.
arrow Pre-test these strategies with customers to determine if these are appropriate and effective.
arrow Don’t rely on just one research methodology. Deploy different techniques based on the complexity of your objectives.
arrow In-depth VOC research is appropriate when you have complex objectives which require detailed information to guide development of strategies and action plans. The 60 minute interviews enabled Life Line Screening to benefit from in-depth discussion with customers which enabled them to identify, in great detail, the many steps required to significantly improve the customer experience.
arrow NPS was helpful to Life Line Screening because it helped them to launch important new initiatives that ultimately led to greater customer satisfaction. However, since NPS is based on responses to just one question, it is limited in the detailed guidance and direction it can provide for making changes.

Monday, May 2, 2011

As Facebook, Apple and Google are Learning, Consumers Want Privacy ... But They Want Something Else, Too

THE PROBLEM: Restrictive on-line privacy legislation is looming in Congress ... legislation that could make some of the most common methods of gathering and using information about consumers illegal.
THE SOLUTION: We need to create Reciprocity of Value-based relationships with consumers where they trust marketers to deliver more personalized online (and offline) customer experiences based on the in-depth preferences consumers opt-in to share with us.
Senators John McCain (R-AZ) and John Kerry (D-MA) recently introduced a bill mandating that web sites must warn consumers explicitly about what data will be collected when they visit the site, why it will be collected, and how it will be shared with other entities.
Rather than debating the pros and cons of this bill or some of the well-publicized data privacy miss-steps of Facebook, Google and Apple, I would like to make a suggestion to my fellow marketers: Let’s ask ourselves: Do we honestly expect consumers to put up indefinitely with our collecting information about them.... without explaining what benefits and value we will offer in exchange for that precious information?
Years ago, many marketers expected consumers to put up with unsolicited, irrelevant telemarketing calls to their homes. Eventually, consumers had enough. That led to a nationwide consumer revolt -- the largest grass-roots movement in American history, and the creation of the national Do Not Call Registry. We now have another, potentially larger grass-roots initiative: The Do Not Track movement. Both movements are a response to a deep desire from consumers, not just for privacy, but also for something that too few marketers are providing: true customer engagement and respect.
Our biggest challenge as marketers is not about technology. It's not about social media. It's about whether we, as marketers, are willing to listen closely to, and respect, the Voice of the Customer... and learn how customers define the ideal value exchange in his or her relationship with our company. Once that engaged, informed discussion takes place, new horizons of opportunity open up for both consumer and marketer.
The irony for marketers is that, if we give consumers the respect they want and deserve ... if we actually engage in a dialogue with them about the value we want to provide in terms of relevant and targeted offers…and if we clearly explain that we need their information regarding their preferences .. they will, in large numbers, provide us with that information. This level of respect for the consumer is rare. Yet it is something today's consumers will reward with deep loyalty and double-digit increases in purchase levels.
We need to create Reciprocity of Value-based relationships with consumers where they trust marketers to deliver more personalized online (and offline) customer experiences based on the in-depth preferences consumers opt-in to share with us. This is the essence of a true opt-in relationship.
Solid brands don’t have trouble building strong Twitter or Facebook followings, so why should they have trouble getting people to opt-in?
Based on our experience advising many Fortune companies, we know that people who actively choose to opt-in will provide rich information regarding their preferences. This detailed customer-generated information enables marketers to provide targeted and relevant communications and offers as determined by the Individual preferences of consumers. This is a major win for both consumers and marketers. Microsoft, for instance, worked with us to create a Voice of the Customer- driven program for its Small Business Relationship Marketing Program. It delivered the following unprecedented results:
arrow Opt-in rates up to 95%
arrow Open rates greater than 50%
arrow Response rates performing in the double digits
arrow Volume license revenue from those in the opt-in driven program was
2 times greater than the control group.
arrow Develop strategies which will create far deeper engagement with customers and prospects.
arrow Use Voice of Customer research to pre-test those strategies with segments of your customers and prospects.
arrow Also use the VOC research to understand how your customers define the compelling Reciprocity of Value equation with your company whereby they will trust you to deliver a more personalized online (and offline) customer experience based on in-depth preference information they opt-in to share with you.
arrow Per our experience, these strategies will generate double-digit increases in response and revenue. And ... you will have established the groundwork for respectful opt-in based relationships that will last and deepen over time.