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Ernan’s Insights on Marketing Best Practices

Monday, December 16, 2013

Montreal Transit's Innovative App Drives High Engagement

sales funnel


Deep consumer insights and personalized messaging and offerings are now essential requirements for marketers. But many companies are just beginning to understand the unprecedented opportunities that deeply connecting with consumers for engaging experiences can bring.
Today, engaging customers through ongoing, personalized, experience-based interactions is the key to developing loyalty and future sales.
Findings from our VoC (Voice of Customer) research indicate important new requirements for customer engagement:
    Montreal SML
  • Customers expect companies to maintain engagement and value throughout their lifecycles, not just during acquisition and renewal.
  • Marketers must improve the customer experience across every point of contact with their organization.
  • Customer experiences apply to all elements of the media mix and all departments within an organization.
In a powerful customer engagement experience, customers:
  • Discover and share information about your company
  • Learn about your products
  • Receive personalized offers and communications
To make this happen, companies need to:
  • Learn the most effective ways to monetize opportunities
  • Respond quickly to match inventory to customer demand
  • Be nimble enough to rapidly refine offers based on customer insights
  • Prep sales and other departments with critical customer information
Making the commitment to a customer experience strategy
According to  “The Integrated Customer Experience Report 2013” by eConsultancy, a survey of nearly 900 companies and agencies, data systems and processes are still the primary factors that hold companies back from improving their customer experiences. Additionally, the complexity of customer experience marketing leaves many respondents unsure of where and how to begin. Consider:
  • Fifty-eight percent of companies are still only developing strategies in this area, compared to just 20% of companies with well-developed strategies.
  • While more than half of the respondents see data (63%) and systems and processes (54%) as critical areas for delivering integrated customer experiences. Most companies have inadequate capabilities in both areas.
  • Nine out of 10 companies say improved customer retention/brand loyalty is a benefit of integrated customer experiences, but just more than half of companies surveyed (54%) have the means to measure retention and loyalty to quantify their experience marketing effectiveness.
Experience marketing drives engagement
I recently saw a presentation by Layla Sabourian Tarwé, senior product marketing manager, global marketing, at SAP, whose main focus is to help drive consumer engagement initiatives at SAP. During the presentation she explained how Société de Transport de Montréal (STM) leveraged SAP's Precision Marketing software to develop a new interactive mobile app call Merci.
Layla had these important insights to share about best practices regarding the customer engagement experience: “Marketers need to embrace change and understand the value of connecting with consumers in innovative new ways. The first step in engaging consumers more deeply is being able to generate deep insights about their preferences and preferably, in real time.”
Layla added this key point, “But now with all these new channels, we're at the point where we're actually starting to have too much information. The key is being able to analyze massive amounts of data from multiple sources to create a 360-degree view of each consumer and then act on these insights in real time. As consumers have started to use new channels, their expectations for how marketers should engage with them have increased dramatically.”
In fact, through co-innovation with SAP, Société de Transport de Montréal launched its Merci app to help improve its customer experience. Merci presents customers with exclusive, personalized offers based on their profiles and preferences. The program offers participants instant gratification without having to work or wait to collect points.
“STM wanted to avoid being ‘just another loyalty card that collected points.' It wanted to build an ecosystem of partners and offers that would ‘reward users on the spot' for their continued loyalty,” said Pierre Bourbonniére, STM's head of marketing. “In the backend, STM's ability to segment geo-localized promotions ensures that notifications are a match with the commuters' demographics and personal preferences, information they have volunteered in return for relevant offers. Whether they're waiting at a bus stop, or just enjoying the ride to downtown attractions, these customers access our award-winning mobile app—STM Merci—to to benefit from relevant offers—as well as a reward scheme—that respects their privacy and personal tastes. The program, which connects directly with commuters on the move, has the potential in all verticals, not just transport, to seek new ways to use mobile to reward individual consumers for their loyalty.”
STM encouraged riders to download the app and complete preference information about their interests. Half of the riders chose to complete their profiles.
STM designed the app to adhere to strict Canadian privacy compliance regulations. The back-end of the application splits commuter data into two separate databases, with key personal details "de-identified.” 
What marketers can learn from the Merci app 
  • The app allows STM to create and shape demand in real time and adjust marketing campaigns for partner organizations to maximize their ROI, instead of waiting to analyze their effectiveness.
  • The app enables the company to rapidly match supply to a changing market and optimize inventory levels and product assortment based on the latest consumer demand data.
  • It allows for the development of new offerings and business models—using consumer insights to refine existing offerings, uncover new consumer needs, and create new monetization opportunities through an incentive to travel more often or switch to an annual subscription.
  • Customers are able to receive geo-located offers based on wherever they happen to be.
And customers value this service. The click-through for the Merci app has been four-times greater than industry averages.  
Key takeaways for developing your customer engagement experience
  • Customer engagement experiences need to be highly personalized. Immersive experiences such as social media need to cultivate a sense of connection.
  • Consumers engage through a variety of media, so it's essential to give them the option to experience your brand effortlessly across multiple channels. 
  • Customers want to receive instant gratification for making transactions, accessing services, and providing feedback any time and on all media of their choice. 
  • Companies need to unify and integrate different sources of customer data to deliver consistent experiences at every point of contact.
  • Marketers should develop a fully rounded view of each customer that includes history, personalization preferences, usage and future intent information, and prediction of lifetime value.

Monday, December 9, 2013

4 Tips That Transform Holiday Shoppers Into Loyal Customers

Challenge: Tis the season for customers to think “sale.” However, while customers are concentrating on transactions, companies need to think beyond the holidays. We hope the following 4 tips will help you move beyond “quickie transactions” for the 2013 holiday season to creating relationships for 2014 and beyond.

Happy Loyal Customers

1. Understand the journey customers take with your company, from prospect to loyal customer. Know what each customer segment requires and deliver on your brand promise at every stage of their customer journey. See our previous article DM News Spotlight Article, The Sales Funnel is Dead.

2. Be a Holiday Shopping Resource.
Consumers will be receiving hundreds, if not thousands, of sales offers. By asking them to tell you about their needs and then helping with personalized solutions, you will cut through the clutter and create a competitively differentiating shopping experience.

3. Be Multi Channel.

Showrooming is not a threat, it is a reality. Showrooming occurs when shoppers are at a retail location and use their mobile devices to research prices or terms at competitive online merchants. More than three quarters of shoppers have examined merchandise in a brick-and-mortar store and ultimately purchased that merchandise at a lower price, online, according to new data from CFI Group’s Holiday Retail Spending Survey

Additionally, a recent survey conducted by Deloitte found that two-thirds of smartphone owners planned to use their phones during holiday shopping, to find store locations, compare prices and look for product information.

Therefore, make it easy for customers to interact with your company effortlessly, via the media of their choice.

4. Be consistent across channels.
During holiday shopping season customers and prospects are doing a lot of research. Make sure you are providing a consistent multichannel experience, not multichannel frustration. A frictionless experience is key for customers who will give up on your company when information is different across media, or difficult to find;

» Walmart is partnering with online resources such as Google to enable shoppers to not only search for a product, but also find out if it is available in their local store. Stephen F. Quinn, chief marketing officer at Walmart explained, “Google will tell you if your local Walmart has Weber grills in stock, and it will tell you that store’s location.” Walmart started experimenting with this process earlier this year and has increased its efforts for the holidays.

» And, most retailers are taking to Facebook for ads and Pinterest to setup online showrooms. Target and many other retailers, are using Pinterest, which Casey Carl, president of multichannel at Target says they are using for holiday-party-planning boards for their Red Card holders. Pinterest itself is starting a new “Holiday Gift” category that will not only offer shoppers gift ideas but will give retailers another display window for their items.

Monday, December 2, 2013

Walgreens: Tips for Transforming the Customer Experience

“Never in my 31 years with this company have I ever seen customer satisfaction jump like it does in these [Well] Experience stores. Customers keep telling [us] they want to stay in those stores longer, which is music to a retailer's ears.”
Walgreens Technology Innovators
This quote is from Gregory D. Wasson, President and CEO of Walgreens. The company ranked 89th on this year’s InformationWeek 500, a list of the top technology innovators in the U.S and also listed as the highest-ranked company in the retail category.
Walgreens is moving away from a product-based approach and towards a fully encompassing consumer experience they call, “the Well Experience.” This new approach seeks to transform the customer experience across all of the company’s touch points, channels and formats.
“We are taking a multi-pronged approach to delivering the Well Experience. We increased engagement [between] team members and customers, and an omni-channel approach that blends our brick-and-mortar stores with e-commerce and mobile commerce. We are deliberately blurring many retail channels to fit how consumers shop today.
» Walgreens is expanding across channels to combine physical locations with superior online experiences such as the company's acquisition of Drugstore.com which advances meeting that objective.
» They have added mobile device capabilities in the past year to include prescription refills and transfers by scanning the pill bottle; QuickPrints, an application that enables users to print photos directly from their devices to any Walgreens store; and in-store maps that allow customers to use a digital shopping list to map and locate items in a store.
» The company’s Balance Rewards loyalty program has seen more than 50 million people enroll since its introduction.
This shift is in line with ERDM findings regarding how consumers, (BtoB and BtoC) define the customer experience:
» Preferences must drive high quality personalization of communications and experiences.
» Consumers have shifted from being passive recipients of ‘push’ marketing, to selecting companies which engage, listen to, and act on, input from customers and prospects.
» Satisfaction with a product is now a given, engagement is what counts.
5 Key Takeaways
Give customers what they want... and they will want to do business with you.
As a result of preference-based interactions, consumers are more willing to respond to communications and offers.
Customers expect a multichannel experience.
Marketers must deliver on the expectations of improved customer experiences with consistency across every channel and point of contact.
Be Flexible and open to change
Make customer listening part of every functional area, not just marketing. And, be flexible about acting on what you learn from customers.
Continually monitor how your company interactions impact every customer experience
Be sure your policies and communications are in line with customer preferences… across every channel and every company department.
Designate a Team
Establish a dedicated customer experience team to develop and execute an enterprise-wide plan to set customer experience standards and set milestones for adoption by every employee and department.

Monday, November 11, 2013

Preference Centers: Are CMOs Overlooking Their Importance?

A good preference center is akin to a good first date. It is all about initial appropriateness, understanding, and communication. Once accomplished, you have earned the right to a second date and deeper levels of discussion.         
Is Your Preference Center Hurting Your Customer Experience?”--the first article in this two-part series--discussed why marketing executives should be concerned about the role of preference centers in enabling their companies to capture the deep customer insights necessary to drive personalized communications.
This article focuses on recommendations from CMOs and senior execs regarding preference center functions and experiences that are critical--whether you are about to build a new center or make improvements to an existing one.
Before You Invest. . .Research When Thomson Reuters decided to build a preference center, research was its first step. “We did market research ahead of deploying our new email preference center,” said Diangelo Tyler, Thomson Reuters’ director of online marketing. “Our objective was to determine what was most important to the customer.”
Tyler offered the following tips:
  • Do your homework prior to building the preference center. Refined requirements are the key to success.
  • Seek answers to the tough questions.
  • Keep in mind that the preference center is for the customer, and they hold the power of voice.
Don’t Be Afraid Of Opt-Outs
Tyler went on to discuss a topic noted by many of the CMOs who my company, ERDM, interviewed while preparing this article. “It’s better to be transparent and open about your intent. It was critical that we make it as quick and simple as possible for our customers to manage their preferences and [for] marketers to get access to their permissions,” he said.
Many marketers shy away from creating truly customer-focused preference centers because they fear mass opt-outs. However, giving customers the ability to provide you with their preferences regarding communications and experiences actually provides you with a powerful competitive advantage.
Per findings from our Voice of Customer Relationship (VoC) research, customers and prospects consistently stated they were willing to provide trusted brands with deeper levels of information in exchange for more personalized information and experiences.
B2B and B2C consumers cited that willingness so frequently we gave it a name: the Reciprocity of Value Equation. Following are some key VoC findings regarding Reciprocity of Value:
  • Consumers recognize that to receive or access relevant information, they must provide preference information.
  • If they trust the brand and receive a useful value proposition, then consumers will opt-in to sharing increasingly detailed preference information.
  • Reciprocity is seen as a valuable exchange of information. This information will constantly change, grow, and be enriched through ongoing interactions with consumers.
  • This customer-driven information exchange results in uniquely accurate databases that consistently achieve 25 percent to 50 percent increases in revenue.
“The key is to establish an ongoing dialogue with the customer. As they give personal information to you, they are building a relationship with your brand,” said Jennifer Downes, director of direct response marketing at Lenovo NA. “Critical to the learning process is the level of engagement that a customer has with your preference center. The customer must perceive value in your preference center so they proactively update their preferences as they evolve in their journey.”
Another issue marketers face in this space is compliance. “We have to comply with telemarketing regulations and the new cell phone rules, so we’ve used this opportunity to build customer preferences for phone contact,” explained Jane Bulman, VP of telesales at Comcast. “We ask them and are transparent about the benefits of future calls--special offers and notifications about new products, for example. Over 70 percent who purchased previously said, ‘Yes, contact me again.’ If we ask how customers want to be contacted--and for what purposes--we gain marketing efficiency, customers welcome the call, and we follow the law.”
Preference-Based, Not Transaction-Based, Data Is Key It is important for executives to realize that transaction-based spray-and-pray blasts are causing significant damage to their brands. Irrelevant communications are training customers to associate their e-mail and direct mail with “delete” or “throwaway” behaviors.
Per our VoC research findings, consumers believe that transaction-based data is inadequate and an inaccurate indicator of their true preferences regarding future communications they would consider relevant. They stated repeatedly that they want brands to treat them “as more than just a sale.”
Rather, they want relevant and engaging communications:
  • “I want more than just buying history-based e-mail.”
  • “With today’s technology, I expect the experiences and e-mail to reflect my preferences.”
  • “I think being able to select just what I’m interested in would be very helpful. It would mean a lot less searching on the Web site and a lot less email I don’t usually open anyway.”
Key Takeaways
Following are recommendations regarding what you need to consider in order to develop a high-quality preference center. These were provided by Scott Frey, a preference management innovator and president and CEO of Possible Now, which provides enterprise preference management solutions.
Tip 1: Account for all of the systems currently in use to collect and store preference information from customers. There are multiple touch points--e-mail, mail, point of sale, social, and mobile--that must be taken into account to ensure the preference center is as comprehensive and effective as possible.
Tip 2: Understand the business rules and needs of the business owners. An effective preference center must take into account all of the existing business rules and needs of the business owners who are impacted by the data collected by the preference center. Bringing those parties together early and keeping them informed throughout the build of the preference center is crucial.
Tip 3: Start with the end in mind. Creating a plan for how the information collected through the preference center will impact marketing campaigns and customer correspondence assures that all of the right elements are accounted for in the preference center and provides a guideline for reporting.
Tip 4: Viewing from the customer’s perspective. Companies must think about building preference centers from the customer’s (user’s) perspective. Avoid internal language and make sure the preference choices are clear and descriptive. The content within the preference center is important to the center’s effectiveness in decreasing opt-outs and increasing opt-ins.
In conclusion, keep in mind that preference centers enable you to deliver truly personalized offers, communications, and experiences. These, in turn, will drive significant increases in response to cross-sell offers, new product introductions, and loyalty-building initiatives.
“As our markets become increasingly fragmented on interests and needs, delivering the right message at the right time in the right way will be impossible without a solid preference management practice,” said Denice Hasty, Comcast’s SVP of consumer marketing.

Friday, November 1, 2013

Is Your Preference Center Hurting Your Customer Experience?

CMO.com

Feature story from CMO.com


“I’m in a cold sweat.” So began the call from the CMO of a prominent Fortune 100 company. “We’ve invested millions in new customer engagement technology and just realized that we never actually asked our customers how they define more relevant communications and experiences.”
Perhaps you, too, have had the awakening that the yield you’ll receive from the millions invested in new technology rests on your ability to deliver a personalized, preference-based customer experience. Research conducted by our firm, ERDM, for clients such as IBM, MassMutual, QVC, and Norton AntiVirus indicates that for many consumers--B2B and B2C--preference centers presumably designed to engage them are, in fact, alienating them.
This article, the first installment of a two-part series, provides insights regarding the special role preference centers play in enabling companies to capture the deep preference information necessary to drive truly personalized communications. Unfortunately, many brands are falling short. While conducting our ERDM VoC research, customers told us they are not receiving the expected value from preference centers. Among their statements:
» Misleading--they are focused on the company’s sales goals, not on learning the customer’s preferences.”
» They’re not focused on my preferences. The focus is on the stuff they want to sell my company.”
A summary of findings indicates that many preference centers don’t provide a resource that is:
» customer-focused
» comprehensive across different product lines and channels
» easy to find, use, and update as customers’ needs change
Insights such as these are helping CMOs and CIOs realize they need a far deeper understanding of how customers define preference-driven engagement. This includes understanding how customers define a value-based relationship with their brands, personalization, and appropriate questions to ask regarding their preferences.
The Only Votes That Count Come From Your Customers And Prospects
For today's empowered consumers, personalization is a basic expectation. To achieve this heightened level of personalization, more accurate customer data is required.
“For customers, the preference center is the mechanism to voice how they wish to interact with a brand. For marketers, it allows them to develop a deeper understanding of their customers,” Jennifer Downes, Lenovo NA’s director of direct response marketing, told me. “That said, the reality is that marketers as business people have metrics to meet, which may be at odds with providing the best customer experience. The key to success is for the marketer to find creative ways to meet these metrics without creating a conflict with the customer's desire for relevant engagement.”
Added Diangelo Tyler, director of online marketing at Thomson Reuters: “Keep in mind that the preference center is for the customer, and they hold the power of voice. The criteria for a truly customer-centric preference center is simplicity. As marketers we must honor the choices of our customers if we want to keep them engaged from that point forward.”
Satisfaction A Given--Engagement Now The Critical Differentiator
Our VoC research also indicated that relevance and personalization is viewed as a service and benefit, not just a sales tool.
“As marketers, more relevant, preference-driven communication ensures greater audience engagement and maximizes marketing efficiency,” Denice Hasty, SVP of consumer marketing at Comcast, told me. “I think governance and vetting the strategy and tactical plan across multiple business functions is key. Strong execution requires maximum coordination. One misstep can cause a really bad experience.”
B2B and B2C consumers understand that in order to receive more relevant information, they need to share personal information. Among ERDM clients, we have witnessed preference-based engagement drives consistent double-digit increases in response, revenue, and customer lifetime value.
Takeaways From Execs Who Have Been Through The Preference Center Experience
In summary, customer-focused preference centers are essential for encouraging customers and prospects to opt in and provide deep preference information. This also provides marketers with unprecedented amounts of rich and accurate customer data, which will drive dramatic increases in response, revenue and customer engagement.
Here’s what we’ve been told:
• Lenovo’s Downes: “It’s critical that we enter into the process with an open mind, accepting that we don’t have all the answers. We must be diligent in asking questions in an unobtrusive way and be willing to let the customer guide us in formulating a customer-centric preference center.”
• Thomson Reuters’ Tyler: “We did some market research ahead of deploying our new email preference center. Our objective was to determine what was most important to the customer. Simplicity was the conclusion. It was critical that we make it as quick and simple as possible for our customers to manage their preferences and marketers to get access to their permissions.”
• Comcast’s Hasty, SVP: “We are just scratching the surface of what we can do in this space. As our markets become increasingly fragmented on interests and needs, delivering the right message at the right time in the right way will be impossible without a solid preference management practice. Online, we believe in a value exchange–the best offers online to our most engaged online audiences, which also provide the best progressive profiling data to act upon in future interactions.”
In my next article, I’ll focus on specific tips and recommendations from CMOs and senior execs regarding preference center functions and experiences that are critical whether you are about to build a new center or make improvements to an existing preference center.

Monday, October 21, 2013

Pizza Hut: Preference Driven Communications and Pizzas

The Challenge: Many companies capture large quantities of customer data. But few use the data to deliver a competitively differentiating customer experience.Delta Customer Service
Pizza Hut is asking customers to provide their preferences and using that information to deliver preference driven communications and pizzas.
Recently, Pizza Hut shifted to more personalized customer interactions by segmenting its customer base into 6,000+ groups based on characteristics, purchase tendencies, and behavioral indicators. Juliana Lim, Senior Marketing Director for Pizza Hut, says, "We now run targeted campaigns built with intelligence around customers' preferred product categories, typical purchase times and channels of choice”. 
Here’s an overview:
arrow Pizza Hut provided customers with a registration process to define their personal communication and pizza preferences and delivery instructions.
arrow Customers can order online, via traditional call-in, via a mobile site, and even via an ordering app on an Xbox 360® system.
arrow Online registration allows customers to get exclusive deals, save “fast favs” for quick reorders, and even set pre-orders for up to 7 days ahead.
Compared with Pizza Hut's former bulk promotions, this new preference driven communication process has generated:
arrow A 200% jump in average campaign hit rates across customer segments,
arrow A 38% improvement in Pizza Hut's customer retention rate,
arrow A 9% increase in customer visit/purchase frequency in just seven months,
arrow Up to 6% extra sales generated every month since the program started.
Findings from research conducted by our company ERDM, indicate that today’s savvy online shoppers understand that in order to receive more personalized offers and communications, they must provide more detailed personal preference information. If they trust the brand… they are willing to provide preference data in order to receive a significantly improved customer experience.
Additional research findings regarding preference based engagement and why consumers see it as a benefit:
arrow They receive fewer communications that are not relevant.
arrow Provides the flexibility to change their preferences as their needs or situations change.
arrow Increases their awareness of product, offer and ordering options.
arrow Allows them to spend less time looking for products.

Takeaways
» Personalization is perceived as a service. Customers want the ability to set personalization preferences. So, tell your customers that true personalization is available and the benefits they will experience.
» Customers want to be involved in their experience with your company. Customers want to contribute to, and define their relationship with your company. Make it easy for them to do so.
» Consumers recognize that in order to receive relevant information, they must share increasing amounts of information regarding personalization and preferences. By providing a way for customers to tell you what they want from your company they will be more likely to open, engage with, and respond to, communications and offers.

Monday, October 7, 2013

Delta; Preference-based Offers for Friendlier Flying

The Challenge: The airline industry has been fighting passenger negativity regarding a barrage of fees for services that were once free and taken for granted. Now airlines are following the path of retailers and using consumer preference data to create brand new personalized (fee-based) upgrades.Delta Customer Service
Airlines are learning what Voice of Customer research has shown time and time again—traditional transaction-based data is not sufficient to drive the level of truly personalized, preference-based, experiences and offers that consumers (BtoB and BtoC) now view as valuable and competitively differentiating.
Listening based on customer signals is key. Companies need to utilize information from analytics, customer-volunteered preferences, behavioral-inferred preferences, and triggers in order to develop personalized product/service offerings.
ERDM research indicates in order to offer consumers a valuable preference-based experience companies need to fully understand:
» Customer’s preferences
» BtoB and BtoC customer usage of products and services
» Customer purchase intent and decision behaviors
» Where a customer is in their BtoB or BtoC lifecycle relative to the product/service
» Appropriateness and acceptability of upsells/cross sells.
Delta Airlines has made a big push toward preference-based services. Delta CEO Richard Anderson noted that they have massive amounts of data, "We know who you are. We know what your history has been on the airline. We can customize our offerings."
Flight attendants will use on-board mobile devices to improve the customer experience:
» Offers per customer's preferences.
» Near real-time credit card processing for on-board purchases, including upgrades.
» Convenient eReceipts that can be emailed to customers.
» Customer's use of pre-paid credit cards for on-board purchases.
» Quicker transaction processing times.
» In the near future, the ability to read coupons displayed on a customer's mobile device.

Three Takeaways
1. Who are your customers? Categorize customers by groups based on when, why, and how they interact with your company and use your products. Understand unique group preferences and develop customer service, product suggestions, and communications based on their buying habits, perceived acceptable price points, and desired product upgrades/suggestions.
2. What kind of relationship do your customers want? Develop personalization data capture techniques via surveys, order-taker questions, and customer service calls in order to define customer preferences. Code the collected data by group segment so you have the actual answers needed to develop relationships, product offerings, and sales strategies based on customer requirements.
3. What is the actual customer experience your customers have now--and are they happy with it? If you do not have a real life view of what it is truly like to do business with your company from the customer perspective you will never know what to improve—or, how much more effectively you could be meeting their needs. Customers want be heard— so listen to their requests, suggestions, and comments. Monitor patterns in purchasing. Know what your “push back” points are from customers and know what they are willing to accept for a perceived value or benefit.

Thursday, October 3, 2013

The Sales Funnel is Dead

sales funnel

Article posted on September 17, 2013
on Direct Marketing News (DMNews.com)

The sales funnel is dead.
A circle of continuous engagement is born.
We all grew up with the sales funnel. You know, the one where the company was in control and pushed the prospect through the sales grinder. Well, it's dead.
The good news is that it's been buried by empowered customers who don't see the sale as a “close”, but as the beginning of deeper value and engagement.
According to voice of the customer research we conducted, ongoing value and engagement post-sale are critical for retaining today's empowered consumers. During the past 12 months we included the following question in many of our research efforts: Which has more impact on retention and repeat purchases: customer satisfaction or customer engagement/relationship?
The answer was consistent across our B2B and B2C research: Engagement/relationship strength has 12 times more influence on retention and repeat purchases than satisfaction. Basic satisfaction is now table stakes. Today's consumers expect that the sale is just the beginning of a journey of increasingly personalized and sustained engagement.
sales funnel
The Traditional Funnel
The traditional sales funnel was created to “drive a sale” to closure. It worked—until customers decided that they were empowered to exert their preferences regarding how, when, and where they wanted to engage pre and post-sale.

Circle of Continuous Engagement
Given the tough economic times, companies recognize that increasing retention and renewal rates is more important than ever. Therefore, ongoing engagement post-sale is critical. This has caused today's sales process to become a circle focused on driving engagement over time. This circle encompasses three key phases of the customer lifecycle:
Pre-Sale
  • Focus on providing easy, hassle-free, personalized solutions.
  • Learn customers' opt-in messaging and communication preferences.
  • Engage customers across the multichannel mix.
Sale
  • Don't “close.” Instead, think of the sale as the beginning of proactive, value-based relationship development.
Customer Lifecycle
Growth and Retention
  • Develop a plan for ongoing proactive engagement, i.e. “How can we better serve you?”
  • Provide an ongoing value –add, which justifies a price premium.
  • Be relevant. Communications must be highly personalized, targeted, and delivered or accessed across the multichannel mix.
However, a note of caution: many companies are still not equipped to deliver this level of ongoing and multichannel engagement. In the 2013 benchmarking study by the Retail Systems Research (RSR) Institute, Retailing: Omni-Channel Approach Central to Strategies in 2013, 54% of respondents indicate that they do not have a view of customers across channels.
DHL Solves Problems to Grow
DHL is one company that has cultivated a commitment to being customer focused. It has developed processes that solve problems and create goodwill at every touchpoint—and and at every part of the shipping continuum. For example, it integrated formerly stand-alone business units to provide solutions and to support customers more effectively, and developed specific industry know-how and solution segments that specialize in providing niche service by industry to address specific customer concerns.  By adopting this customer-centric approach, the company increased profit from operating activities in the first half of 2013 by 7.8%.
The Key Takeaways
1. Shift from the obsolete sales funnel to a customer lifecycle view.
Focus on developing ever-deeper relationships with your customers across their ongoing customer experience with your company. 
2. Be actively engaged with prospects during their decision journey.
Provide easy-to-find information, access to reviews, etc., to enable prospects to evaluate your company, product, and services against others they're considering. Opinion influencers—such as product reviews, ratings, and testimonials—are critical. In addition, provide convenient contact resources, such as online chat that answers questions, while prospects are still on your website. This high-level of value and service sets an important tone at the beginning of the customer life cycle.
3. Understand your customer's journey from pre-sale to post-sale.
Understanding the factors that make customers want to purchase from you--and then stay with you after the sale—lets you highlight your company benefits and use these key selling points in your marketing. Put in place the means by which customers can easily access information and help along the way from pre- through post-sale phases.
4. Be easily accessible across channels.
Consumers are shopping via multiple channels and devices often at the same time. Don't create barriers by being unavailable or making it difficult to engage across the channels your customers prefer.
5. Don't forget about customers after you ring the register.
Keep customers actively engaged via preference-driven, personalized communications and experiences. Provide ongoing information to improve their lives, solicit feedback, and stimulate purchases of relevant new and add-on products. Make your customers feel as though they are a part of your company's community through a multichannel relationship-focused continuous cycle of engagement.

Monday, September 23, 2013

Transforming Intrusive Customer Tracking to Valued Information Exchanges

The Challenge: The bad news is that consumer resistance to unauthorized data tracking is growing. The good news is that many consumers understand that in order to receive more targeted and relevant communications, they need to provide companies with more of their personal information.Men's Wearhouse
Extensive research conducted by our company, ERDM, over the past 12 months has shown that BtoB and BtoC customers are willing to provide in-depth information if they see the value and are assured of improved levels of personalization and customer engagement. This research finding has emerged so consistently that we refer to this as the Reciprocity of Value Equation. This fundamentally reframes data privacy concerns as a beneficial exchange of information that improves the customer experience.
Furthermore, customers have said that they will update and refresh their information as long as they keep receiving value from marketers. Therefore the significant takeaway for marketers is that:
» BtoB and BtoC customers will supply deep levels of information if they trust the brand and see value.
» Consumers will actively opt-in to sharing detailed personal preference information in exchange for the marketer’s promise to deliver relevant information and offers.
» Marketers need to understand how their customers define the Reciprocity of Value Equation with their company.
CVS-Caremark, a 2013 Apex Customer Award Winner understands the power of providing value in exchange for personal information and responsible behavior tracking.
They worked hard to improve consistency, reliability, and accountability in Member Communications – both across the organization and within the communications sent to Members. This heavy emphasis on putting customer needs front and center boosted CVS’ revenues in the pharmacy services by 7.2% to $11.5 billion, and in the retail pharmacy segment by 13.9% to $13.5 million.
This growth is due in part to a benefit-based reciprocal data exchange with customers.
Within the Pharmacy “Information center” are details of all current and past prescriptions filled by a family at CVS. It allows subscribers to monitor all medications with pictures of each pill, dosage, refills remaining, and which medicines are due to be refilled or need a renewal prescription.
Customers can order refills online and be altered to pickups by email, text, or both.
Subscribers have one loyalty card and login to the prescription and retail sections of the stores, allowing them to add reward points for future discounts in both areas of the store.
CVS sends personalized emails to members based on their current point levels and past buying history.
Takeaways
1. Customers want to be reassured that when they turn over their personal information, it will be used responsibly and for their benefit. Companies that reward customers for data by providing relevant offers and enhanced customer experiences will gain loyalty because customers expect a reciprocal value exchange.
2. Have an action plan for how you will use this precious customer data. If customers do not see obvious and immediate benefits from providing their information, not only will they unsubscribe from the service, they may also stop being a customer.
3. Understand what questions customers feel are appropriate to ask...and at what points in the lifecycle. Increasingly deeper levels of information must be earned.

Monday, September 9, 2013

Preference-Driven Personalization; What Men’s Wearhouse Can Teach Us

The Challenge: Many companies are still not using preference based personalization. This compromises relevance and sacrifices engagement and potential sales. Men's Wearhouse
40% of consumers say they prefer buying from retailers that cater to their preferences. According to research firm The E-tailing Group, respondents said they:
» Find it valuable if the retailer offers product recommendations tailored to their personal tastes and shopping histories.
» Purchase more often when retailers send e-mails that are personalized based on a shopper's past interactions.
One retailer who has embraced preference based personalization is Men's Wearhouse. With more than 1,100 stores nationwide, Men’s Wearhouse prides itself on providing personalized service to all of its customers. “Customer satisfaction is our highest priority, across all of our channels,” said Susan Neal, EVP, E-Business, Marketing and Digital Technology. “Just as our in-store tailors alter garments to perfectly fit each customer, we plan to deliver personalized emails individually tailored to each recipient."
Men’s Wearhouse captures data from every customer touch point, mines behavioral signals using advanced predictive algorithms and overlays deep retail domain knowledge.
They are extending their personalized experience to email as well.
The company has in-store wardrobe consultants to help its customers. This service continues the online experience which offers a website for its full offerings as well as a separate website just for tuxedos by type of occasion. The Tux Sites features a dedicated Wedding Planner that can be contacted online or via an iPhone app.
Overall Men’s Wearhouse is an example of a forward-looking retailer that understands the importance of delivering clients a consistent, personalized experience.
According to our firm’s VoC research on the Preference driven Reciprocity of Value Equation, consumers are willing to share personal preference information with trusted brands in exchange for “reciprocity of value” — in other words, receiving highly targeted and relevant offers and communications based on their individual preferences. This represents a powerful opportunity for marketers to transform how they engage with customers and prospects.
3 Research-based Takeaways
1. 59% of shoppers said that it is easier to find what they’re looking for when retailers personalize the shopping experience. So make it easy for your customers to find and buy what you have to sell.
2. 40% of consumers said they buy more from retailers that personalize shopping across all channels. So make sure your personalization experience extends to every aspect of your customer experience and interactions.
3. Retailers that remember the shopping behavior of individual consumers and use it to personalize future experiences are being rewarded — consumers are more engaged and purchase more. So be sure you have in place accurate and easily updated CRM practices and technology.

Monday, August 26, 2013

How Viral Emails Can Drive More Sales than Promotional Emails

The Challenge: Viral emails can often generate greater response and revenue than sales-focused emails. Following are examples and tips for sending engaging/interactive emails that do not contain sales pitches or feature products.
HP Social MediaAirbnb Case Study
The holidays are an important time for the travel company Airbnb. They recognized that holiday greeting emails are very common and devised a unique campaign. They developed a way not just to send a holiday message, but an interactive campaign that encouraged customers to send a thank you note to travel hosts that assisted Airbnb’s travelers during the year. The email was sent with the purpose of getting the audience to engage with one another, not to drive revenue.
Response and engagement rates were very strong:
• 52.3% open rate — up from the previous average of 27% to 30% on regular marketing emails.
• 26.5% click through rate — increase over the 8% to 12% on regular marketing emails.
The subscribers who used the tool sent an average of 7.5 emails.
Airbnb increased sales with 600 bookings as a result of this non-promotional email.
Career Builder Case Study
Career Builder tied in a very successful viral email campaign to their widely acclaimed Super Bowl ad featuring chimpanzees performing common office duties. The campaign was named Monk-E-Mail and uses personalization to engage email subscribers and ease of use to ensure follow through of customizing and forwarding emails.
The engagement and increase in the site’s popularity as a result of the campaign was staggering:
• CareerBuilder was rated the #1 career site.
• 29 million unique users visited the site within the first four months (25% increase in traffic); more than 55 million total visitors.
• More than 150 million Monk-e-Mails have been sent and played.
• 22% of message recipients went on to send their own messages.
5 TAKEAWAYS:
1. Timing is important. Airbnb is in an industry where travel is not an everyday event; the holiday email campaign was good timing because December is a time for travel or planning future travel.
2. Personalization is key. Airbnb pre-populated the emails with each customer’s bookings from the previous year and included images of each user’s profile, making it easy to send the message.
3. Be Humorous. As CareerBuilder showed, a viral email is your chance to lose the serious sales attitude.
4. Ease of Use is essential to enable a high volume of viral actions.
5. Do Not Muddy the Message. Once you decide to go non-promotional, do not include any promotional content. Concentrate on the focus of engagement.

Monday, August 12, 2013

Hewlett-Packard - 5 Actions to Improve Social Media Effectiveness

The Challenge: Social media has become one of the most important points of contact for consumers. Marketers however, seldom access the gold mine of information waiting on their fan pages. Tech giant, HP does. They’re raising the bar for social interaction by developing an innovative strategy that’s setting the standard for customer engagement through social media.

Happy CustomerSo, while it is evident that companies are “in” social media they need to start becoming actively involved. A J.D. Power and Associates report notes that “businesses need to understand how their consumers use social media and then develop a strategy that addresses their usage patterns.“

One company who fully embraces this concept is Hewlett Packard. They entered the space by taking two full years to listen to their customs and determine where they were having conversations.

They grew their social media community from its original 350+ members to over 2.4 million likes/fans on Facebook. Referrals from social networking sites have doubled.

Referrals from social networking sites have doubled.

HP’s online "Expert Days" have attracted hundreds of thousands of customers since their inception in 2009.

This activity has empowered employees to directly reach and converse with customers. There has been a ten time increase in blogging and social media activity by employees who go through the company’s social media training program prior to any customer communication involvement.

A key element in HP’s social interactions is that they integrate their social media with all customer touch points, not just for offers and contests. They also optimize and scale social media to ensure consistent customer experiences for different customer segments, geographies and languages.

5 KEY TAKEAWAYS FROM HEWLETT PACKARD:

• Give Customers a Platform for Product Feedback. Through social media channels the company gets valuable feedback about products. They then feed this information to product and content teams for valuable insight into the development of future technology.

• Encourage Community Engagement.  A dedicated staff manages community engagement to provide value for customers. They also recognize customers who assist their fellow social page fans. This program is set to expand for top community contributors.

• Designate Community Ambassadors. HP has over 100 people called "Experts" who answer questions on the Forums. They include both HP customers and HP employees, and provide expert, free, 24-hour real-time access and advice on various topics of customer interest.

• Create Channel Integration. The company is working on a system by which customers can post a question in Facebook that can automatically tap into the HP Support Forum.

• Set Policies and Train Social Staff. HP sets specific social media policy standards. They train all staff involved in social media so that there is both consistency in social experience as well as consistency in brand messaging.

Monday, July 29, 2013

It's How They Want to Buy…Not How You Want to Sell

The Challenge: Companies that focus on what they want to sell — not how customers want to engage — miss the boat on opportunities to drive initial and ongoing sales.
Happy CustomerDunnhumby recently released results of its Customer Centricity Index (CCI) study which measured how well retailers are responding to the needs and wants of their customers — through the eyes of their customers.
The findings are important for all businesses wanting to better connect with customers:
Companies with higher CCI scores tended to have higher long-term comparable sales growth over a two-year period.
True understanding of what drives a customer to a brand is an insight that differentiates category leaders from competitors.
A strong customer experience that meets customer needs had the strongest impact on customer centricity and highest CCI scores/rankings.
Price was important to customers but was less about "lowest price" and more heavily tied to perceived value.
Companies that provided the opportunity to give feedback and have interaction were rated higher.
One company that took on the challenge of developing a customer focused business strategy is United Airlines. Starting in 2010 during their merger with Continental they began to build richer customer profiles to increase sales opportunities.
United groups customers by behaviors, such as customers who have been price sensitive. They then use these insights to create more relevant offers such as sending frequent business travelers an offer to purchase an airport day lounge pass, etc.
The company overlays demographic and lifestyle data on customer records and groups them into customer types. United tries to include basic demographic information in each member profile such as age, household income, and net worth, and interest-specific elements such as members who enjoy playing golf.
United's new policies include customer centric actions such as these:
When a customers is about to reach a milestone, a local representative delivers a hand-written thank-you card to the customer as they scan their boarding passes upon boarding.
Segmentation that accurately groups customers by behaviors creates more relevant offer opportunities.
Since the initiative was launched, United has been able to convert 4 percent of its non-members to the MileagePlus program, resulting in tens of millions of dollars in additional revenue.
Key Takeaways:
• Show customers that you are "involved" in their buying experience with actions such as a reminder notice about a product or service based on previous behaviors, a thank-you note, a preview of an upcoming sale, a birthday incentive, etc.
Show customers you are listening by conducting ongoing Voice of Customer-driven assessments of your business and marketing strategies to ensure alignment with customer expectations.
• Increase the frequency of database updates so they reflect the ongoing changes in customer’s needs. Update information regarding preferences, demographics, behaviors, sales purchase history, etc.

Monday, July 15, 2013

Free Shipping and Returns: Cost, Value, and ROI

The Challenge: It’s no secret that online shoppers don’t like to pay for shipping. With carrier rates on the rise, ecommerce businesses are fully aware that there is no such thing as “free shipping”, it is an expense that has to be factored into pricing one way or another.
Free Shipping
Many successful ecommerce marketers offer free shipping, and even free return shipping, as part of a “no hassle returns” policy. Zappos is famous for offering free shipping and free 365 day returns as part of their efforts to deliver a “wow” experience. The reward and ROI Zappos receives in exchange for this policy; 75% repeat buyers, even though their products are priced higher than competitors in order to cover the costs associated with delivering that excellent customer experience.
Studies on the Benefits of Offering Free Shipping
Compete.com shows a comparison between two similar retailers and the difference between Patagonia, offering everyday low shipping and The North Face, offering free shipping for holidays.
GraphThe numbers also indicate that offering free shipping increases search traffic as well as conversions for The North Face.
The Find is an online shopping comparison site where retailers can list products and offers, including free shipping. Their Quick Promotion tool showed 23% traffic increase for retailers running Free Shipping promotions.
ShopRunner/Harris Interactive study of over 2,800 online consumers provides the following results from offering free return shipping:
81% of shoppers are less likely to make additional purchases on websites that charge for return shipping
Consumers who paid for return shipping at a given retailer decreased their purchases 75% to 100% within a two-year period.
Takeaways:
Evaluate Costs Involved in Offering Free Shipping: The question for your business is whether or not shipping costs can be factored into your margins, or if it means raising the price. Free shipping does not always have to mean a reduction in your bottom line. Consider these 10 Ways to Offer Free Shipping.
• Test Different Offers: A/B testing of different offers will provide insight into how your customers react to different models. Also compare sales and returns over time to see how the conversion rate and the bottom line are affected. A ProImpact7.com survey shows that 72% of website shoppers abandon the checkout process because shipping rate was higher than expected. The word expected is key. In many cases offering a flat rate or lower shipping might achieve the increased conversion rate you are looking for without decreasing your profit margin.
Consider the Increased Lifetime Value of Satisfied Customers: Increased customer satisfaction often leads to repeat customers, so the lifetime value of your customer can be another factor in the equation for free shipping and returns. BusinessNewsDaily reports that companies who offer free shipping on returns can see between a 58% to 357% increase in sales in the next two years.

Monday, July 1, 2013

Is Social Media Damaging Your Brand?

The Challenge: Companies who do not monitor what customers are saying about them online—can wind up using social media for damage control rather than for profit.

In a report by Stanford University it was reported that

90% of executives claim to understand the impact that social media can have on their organization, however, only 24% of senior managers and 8% of directors surveyed actually receive ongoing reports.

Approximately half of the companies do not collect this social media information at all.  

Dislike!If you are not allocating time for brand reputation management, you will never fully know what your customers are saying to you—and more damaging, saying about you to others.

In a study by JD Power, over 60% of surveyed consumers said they want companies to listen to what they say about them online and to respond.

And an Aberdeen study on Brand Reputation Management, it was noted that companies that take the time to stay on top of their reputation management are more likely to have a higher customer retention rate.

While many companies have been put in the position of rapid damage control after negative social media chatter, Reebok recently demonstrated their ability to respond quickly, make adjustments, and move forward when consumer voices were raised in protest over a product spokesperson, Rick Ross, after he rapped about drugging a woman and having sex with her without her knowledge.

A well orchestrated campaign by the feminist group, UltraViolet included an online petition signed 50,000 times in 24 hours, a video viewed over 17,000 times, ads on Facebook, and messages to Reebok’s Twitter page. The group called out Reebok regarding its contradictory position of a controversial spokesperson versus its marketing of products to young men and boys and marketing to women and investing in women’s athletics.

As a result the company rapidly severed ties with Rick Ross.

The lesson for all businesses is to truly understand your customers and put in place the ability to listen in every element of the media mix, and react with speed when the voices of your customers are raised--in any medium.

Takeaways:

It is far easier to cultivate high brand reputation ratings than to do damage control. Create dedicated staff positions to monitor social media on a daily basis to find out what is being said about your business.

Your monitoring should include searches on all media; search engines, all social media comments on your page(s) or through hash tags, rating sites such as Yelp, and customer complaint sites.

If a problem arises, don’t delay in acknowledging the situation. Respond honestly and authentically. Do not engage in “corporate speak”.