Is Your Brand Committed To A Personalized Customer Experience? (Part 1)

Article by Ernan Roman Featured on CMO.com

Too many companies are still struggling to achieve deep and high-value relationships with customers. As a result, churn, attrition, and high opt-out rates continue to be significant problems. This is especially true among Millennial customers, who expect unprecedented levels of value and personalization from brands.

These findings are based on results from more than 160 VoC research studies our firm, ERDM, has conducted for brands such as Microsoft, HP, MassMutual, Gilt, and QVC.

In response to requests from CMOs, who are understandably frustrated and concerned by these persistent issues, we prepared eight questions to help determine whether your company is truly committed to personalizing the customer experience (CX) and building loyalty.

This article will be presented in two parts. Here are the first four questions, along with some possible answers and action items.

Question 1: What is your company’s true appetite for CX and loyalty transformation?
According to Mike Polner, director of product marketing for Five Stars, a mobile loyalty app provider: “The most successful businesses ensure their staff is engaged and understand the value of loyalty."

And according to Jeroen Hoencamp, CEO of Vodafone UK: “Transformation needs to take place both internally and externally. ... Listening to customers and understanding customer value from their perspective will allow customer-centric transformation to take place.”

⇒ Action Items:

• Your brand culture and senior management need to support CX and loyalty initiatives by creating a customer-focused culture, customer-focused metrics, CX-based compensation, integrated consumer communication across all touch points, and an adequate CX budget allocation.
• Keep the company engaged in the CX journey by establishing formal and regular means of providing the organization with progress report cards and performance against CX metrics.

Question 2: Do your fellow execs have a deep understanding of why you are focusing on CX and loyalty?
Brands that have successful consumer engagement strategies put consumer understanding at the top of their priority lists.

Bloomingdale chairman and CEO Tony Spring noted that consumer understanding is paramount in every aspect of the company’s marketing. Here are some key quotes:

• “This is the age of empowered consumers. We need to connect with customers on their terms.”
• “Consumers demand personalization and privacy. It’s a push-and-pull thing. We must instill trust as we build our relationship with our customers.”

Additionally, John Gerhardt, senior vice president, creative branding direction, at LVMH-owned DFS Group, noted: “Every person has a story to tell about where their loyalty lies, and we were thrilled to explore that concept ... to celebrate and thank our customers for the immense loyalty they show us. ... We wanted to celebrate the value of loyalty, which is at the core of all these experiences."

⇒ Action Items:

• A CX program without a clear-cut goal is a useless CX program. Know what you want to accomplish by engaging your customers, understand what engagement actually means to your customers, and understand what it will take to accomplish this goal.
• Define the criteria for evaluating the success of your CX and loyalty strategies. Set benchmarks and determine what factors and data will be monitored on a regular basis to determine progress, success, and improvements.

Question 3: Do you have the right data, metrics, and segments to measure CX impact and success?
In structuring its loyalty program, Safeway examined many data factors, some of which were surprising. Here is an important note from the agency that structured the program: “You will run the danger of cannibalizing your business by giving rewards to people who are going to shop with you anyway. ... It is better to target your programs mainly to those whose behavior you want to change.”

Prior to instituting the program, Safeway surveyed its customers and asked: How much do you spend on groceries every week, and where else do you shop? Answers were combined with the actual spending data to determine Safeway’s “share of wallet” and gain understanding of new opportunities that could be uncovered with a loyalty program.

⇒ Action Items:

• How are consumers interacting with your brand? Does your data provide that answer? If not, it’s time to rethink how you collect and interpret incoming information to be sure that the data you are collecting is useful and brings actual insights to drive marketing initiatives.
• Reinvent your data to put consumers into segments based on preferences, purchases, communication methods, inquiries/customer service issues, lapsed, new, loyal, etc. Then rethink communication and engagement strategies for each segment, not for customers in general.

Question 4: Does your staff have the right CX and loyalty skills, and do you have a customer advisory group?
Nick Mehta, CEO of marketing firm Gainsight, noted that having a dedicated customer success team, as well as a group of consumer advocates, is a necessity for building successful loyalty and CX. “The customer success team should be your eyes and ears. ... CS can tell you which users love using your service. ... Many times, users can offer informal advocacy and on-the-ground feedback that decision makers can’t. In addition, there are usually far more users than decision makers.”

⇒ Action Items:

• Who on your team could offer customer success insights? Take a look at your entire staff and handpick representatives who can report on real-life CX interactions, problems, and successes for key learnings that can prompt new actions.
• Arrange a consumer advocacy program with your most engaged customers to gain insights on how and why consumers are or aren’t motivated to engage with the brand.

Part 1 Takeaways
1. Active consumer listening with a goal of deep understanding is a key element of CX transformation because it lets brands look at touch points and interactions from a value-driven experience standpoint that cultivates ongoing loyalty, not just an end-point transaction goal.

2. Building CX means building trust. If consumers do not trust a brand or trust that the brand will deliver value or appreciation for their loyalty, the consumer will go elsewhere for a better experience.

3. Correct data interpretation is essential in developing CX innovation. True understanding of who and how consumers interact with the brand will shape every strategy, communication, and the CX program’s success.

4. Put together a customer success team with representatives from all aspects of CX and loyalty so that your company can continually have a 360-degree view of engagement wins and losses. Cultivate consumer advocacy so that you are regularly receiving input from those who interact with the brand most.