Ernan’s Insights on Marketing Best Practices

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.

» 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:
  • Focus on providing easy, hassle-free, personalized solutions.
  • Learn customers' opt-in messaging and communication preferences.
  • Engage customers across the multichannel mix.
  • 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.