5 Marketing Requirements for Luxury Customer Engagement in 2015

Article by Ernan Roman Featured on mobilemarketer.com

In 2015, the biggest challenge for luxury marketers will be to gain a much better understanding of what customers expect in terms of significantly improved customer experiences.

In the 2015 Luxury Multichannel Engagement Index it was noted that “wealthy consumers have come to expect a lot from luxury retailers both online and in stores ... they must have top people, both online and offline, in place to deliver superior service and experiences."

Here then, are the 5 key requirements for luxury brands in meeting the high expectations of these unique consumers.

1. Use human data to drive deep engagement
Findings from 12,000-plus hours of Voice of Customer Research conducted by us for clients including MassMutual, IBM, Norton AntiVirus, QVC, NBC, Microsoft and Songza indicates that consumers have little patience for searching for relevant offers and communications. This is especially true for the luxury segment.

Therefore keep these points in mind so you can engage your customers as individuals and capture their individual human preferences;

• Your customer is a human, not an account number.
• Each person defines “relevant” differently.
• Nurture and educate customers.
• Develop experiences to delight.
• Add competitively differentiating value to engage customers over time.

In keeping with its efforts to provide competitively differentiating shopping experiences for their customers, Nordstrom Inc. acquired Trunk Club a free online stylist service that builds one-on-one relationships between personal stylists and members to understand their individual lifestyles and styling preferences and uses this information to hand select items which are shipped to customers who keep what they like and return the rest for free.

Erik Nordstrom, president of Nordstrom Direct, said, “We want to evolve with customers ...This complimentary service is an important and successful volume driver for us that our customers appreciate ... What Trunk Club does adds to our service capabilities – we can learn from them about what they call ‘assisted commerce' so we can continue to meet the evolving needs of customers."

2. Achieve new levels of personalization
Empower consumers to achieve high levels of personalization based on their specific behavior and actions. Use this information to provide unique information, product selection and experiences that are created solely for them.

Mallzee, a new interactive and intelligent mobile application, allows users to create “style feeds” and set everything from color to brand preferences.

The app sifts through preferred retailers to find items that match their individual style.

Users can also set personal price drop notifications as well as notifications when retailers update their offerings. The app “learns” a user’s personal style as they swipe through products, so the next time they log on, offerings are presented per their preferences.

3. Be everywhere your customers are
Today, luxury consumers are multimedia/multichannel shoppers. Consumers are in store, on their phone or tablet doing research. They are watching television while chatting on social media and they are using apps to define their shopping and entertainment experiences.

To keep up with the demands of these multi-dimensional, multichannel buyers, marketers must develop options that blend individual media channels into one omni-available experience.

Burberry enables shoppers to explore and buy the latest products not only online, but online within the store via shopping assistants armed with iPads who provide suggestions, show new arrivals and check stock levels.

RF tags on in-store products can trigger video screens based on an item that a customer is carrying. And Burberry's Twitter provides its 3.36 million followers engaging product and shopping information.

4. Empower customers to create their own products and solutions
Allowing consumers to actually create their own product to purchase enables them to literally become a part of the brand.

Enhanced levels of engagement encourage feelings of product ownership and product pride because they allow online buyers to take an active role in the product development process.

NikeiD offers customers the ability to customize their shoes. Buyers can pick the color, pattern, shoelace color, and even have an inspirational message put onto the tongue of the shoe.

Then the new creation can be shared online. According to Brand Channel, NikeiD has seen its online business triple since 2004.

5. Be creative in solving customer needs
What is useful to one group of consumers may not be perceived as useful to another group.

Deep customer knowledge will enable marketers to develop services to solve problems of individual customer segments and therefore drive deeper and sustained loyalty and engagement.

Barneys New York will be launching a niche-based personalized program with stationer Connor that is geared towards its busy, upscale customers.

The Web site and app will enable customers to design cards to be sent digitally via email and social media.

The platform will have event management capabilities for guest lists and tracking of RSVPs.

Barneys chief operating officer Daniella Vitale notes, “This project fills a void and will allow our customer an opportunity to communicate quickly and elegantly.”

Connor co-founder Justin Felber agreed: “This is really a social and sophisticated way to communicate.”

IN SUMMARY, as you prepare for 2015, keep in mind the mandate to create luxury experiences and brand interactions that are deeply and intelligently personalized and based on more than transactional, overlay and inferential data. This will be a critical element for significantly increasing long-term engagement and brand loyalty.

6 Customer Experience Mistakes You Don't Want to Make

   Loyalty 360 Feature Story.

Per results from recent Voice of Customer (VoC) research, Customer Experience strategies are failing to deliver the quality of experience customers expect. Notwithstanding today's technology, tools and analytics, it is sobering that customers are not experiencing a significantly improved customer experience.

Following are the top 6 Customer Experience mistakes that emerged from our analysis of thousands of hours of VoC research our firm, ERDM, conducted for clients such as MassMutual, Norton AntiVirus, IBM, HMS National, Songza and others;

1. Customers do not feel that marketers are trying to understand the customer journey from the customer's point of view. To many, it feels like "customer journey" is another term for mapping the sales opportunity journey.

2. It is obvious to customers that companies are doing things piecemeal. Examples cited in the research include;

• Improving multichannel marketing but not fixing customer service.

• Installing CRM systems which only automate bad behaviors but don't improve the quality of communications and experiences.

• Building Preference Centers which don't ask the right preference questions. 

Thought Leader Insight:
Scott Frey, President, PossibleNow;
“Install an enterprise wide preference center. Go beyond preference centers for individual channels such as email and create an easy-to-use portal where customers can create individual profiles, select topics of interest, preferred delivery channels and pace of communications. Preference centers provide the ability for customers to maintain their preferences as their interests change over time. Connect the preference center to all customer touch points”. 

3. Customers want marketers to move from thinking about individual campaigns to a holistic engagement strategy with proactive value added touches at key points important to the customer, not the marketer. High quality experiences must be maintained throughout the relationship and per a quote from a VoC interview, “Not just when you are selling or renewing”. 

Thought Leader Insight:
Eric Nystrom, Dell, Director, Social Media Services Group;
“We need to think in terms of engaging customers at every stage of the customer lifecycle. This causes a shift from one-way communications to conversations and to think about content differently. Customers expect to engage with subject matter experts and empowered employees, not corporate spokespeople. Content needs to be relevant, interesting and engaging…and always on”.

4. Conflicting metrics for measuring success; Marketers are looking at short term sales and ROI from individual campaigns. Customers are judging companies based on the quality of the overall experience, over time.

5. Frustratingly poor data. Customers want marketers to improve the quality of their data and shift from transaction-based information to opt-in preference-based information which will drive truly personalized communications and offers. 

Thought Leader Insight:
Andrew Bailey, Marketing Principal, FedEx;
“FedEx has always valued the customer experience and continues to make strides in providing an optimal one. FedEx works to allow customers to tell us how often they’d like to receive email, and on which specific topics. This helps spark a dialogue that allows us to better serve our customers by meeting their individual needs with information for the right person, containing the right content, in the right place and at the right time”.

6. Viewing Customer Experience as being about a few campaigns, will ensure you’ll fail. Successful companies view Customer Experience as a transformation of their culture, impacting every business process. Culture change is hard but is the longest lasting. Individual campaigns do not result in sustained change. 

MassMutual is an excellent case study of a company which has committed to transforming the customer experience with the goal of creating customers for life. They began by conducting Voice of Customer research to understand how different customer segments define deeper relationships with MassMutual Retirement Services at key points in their lifecycle. 

Thought Leader Insight:
Kris Gates, VP Customer Experience, MassMutual Retirement Services;
"Based on the learnings from the VoC research, we have redesigned the way we look at relationships with customers. Taking a Learn – Pilot – Scale approach to our marketing efforts, we already have several VoC research-based initiatives underway. These range from redefining how we view the customer-focused value of CRM platforms and our data, to campaign targeting and preference based communications. 

One of the findings from our recent VoC research indicated that our customers wanted communications driven by their preferences and interests. We used the rollout of our new educational video series SmartView,to measure the difference in response between mass emails to an entire list versus preference-driven offers to those who had opted in and told us their preferences and interests. Results from customers who opted in to receive information versus the mass email population: 94 percent higher open rates, 1,062 percent higher video views, 100 percent deliverability and Zero unsubscribes".

8 Key Takeaways to Avoid Customer Experience Mistakes

1. “Digital has changed buyer and marketer behavior. Traditional campaigns are definitive…social is about long-term relationships…think about how to drive content streams to improve search, engagement and conversion”.
Eric Nystrom, Director, Social Media Services Group, Dell

2. “Engage your customers to provide their preferences regarding information they want to receive from you; right person, right content, right time, right place and right medium”.
Andrew Bailey, Marketing Principal, FedEx.

3. Help customers at every point of contact with your company; from information gathering, to purchasing, to ongoing engagement. Make every aspect of doing business with your company easy.

4. Communicate a consistent message and brand across all channels, and customer touch points, including customer service.

5. Constantly improve how you communicate your value proposition; this applies to your products and your company, so customers understand why they should continue to do business with you.

6. Learn the customer journey from the customer’s perspective. Know what customers want from you at each stage of their journey with your company and satisfy their needs.

7. Rethink all communications with customers to be personalized, relevant and helpful based on their individual preferences. Don’t just send transaction-based “spray and pray”.

8. Change your culture to be customer centric in all aspects of your company and unite these efforts across all departments.

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.”

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.

The Sales Funnel is Dead

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.

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.

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.

E-Mail: 3 Best Practices for Driving Engagement

The Challenge: Email is an essential element of almost every marketer’s multi-channel mix. But, it needs to do a better job of engaging readers. Here are 3 best practices.

Per the CMO (Chief Marketing Officer) Council, 67% of marketers worldwide rated email as the most successful digital marketing tactic. In today’s competitive marketing arena, however, the key to that success hinges on being able to engage your customers. According to ExactTarget, engagement and customer revenue are directly connected to the relevance of your content. RealMagnet holds a similar view, stating that relevant content is fundamental when it comes to maximizing the lifetime value of your customers.

ExactTarget’s research has shown that as marketers increase the level of relevance, the potential to drive revenue increases exponentially as marketers begin to utilize more personalized, one-to-one marketing tactics. Our own Voice of Customer research indicates a similar finding; the value consumers receive in exchange for providing their information must be obvious and compelling. To overcome the legacy of receiving untargeted and irrelevant communications, consumers must see an obvious increase in relevance.

The following 3 best practices about engaging your customers via e-mail will help you deliver obvious value and relevance. Remember: if the value is not obvious, consumers will assume you have betrayed their trust and expectations.

3 Best Practices for Engaging Customers
via E-mail

1. Segment your communications.
Use every piece of relevant data you have about your customers. Their gender, job title, hobbies, interests, purchase history, browsing habits, and social media presence all provide essential insights. Use this information to create messages tailored to their daily needs and expectations.

2. Integrate your e-mail marketing and CRM (customer relationship management) systems.
Instead of spreading customer data across multiple third-party and in-house CRMs (staff-compiled databases), you should consolidate your customer data into one integrated system. Doing so makes it easier to personalize your marketing to create precise segments, acquire new leads, and nurture leads through your sales cycle.

3. Test to discover what works.
Run an A/B test each time you create a new marketing piece, so that you can maximize your level of engagement. Test various subject lines and content - such as sales copy, promotional offers, and calls-to-action - to see what performs best. Simple tests like these are easy to perform and guarantee that you’re delivering the most relevant content that you can offer. You can also give consumers the ability to hear from you through multiple channels by sporadically testing the promotion of other channels within all of your social networks.

Burberry: 3 Powerful Ways To Engage Consumers Online

The Challenge: According to a study conducted by Martini Media, luxury brands have been gradually dropping TV from their multichannel marketing mix in favor of digital media. But will the move pay off in the end? Digital darling Burberry seems to think so, quickly taking the throne of luxury online marketing by creating entirely new levels of customer engagement.

While luxury marketers have traditionally trailed mass marketers in digital marketing spend, digital media has skyrocketed among luxury agencies over the past year. Context and targeting are quickly becoming the most important criteria for luxury brands, and luxury marketers are finding a need to achieve reach through the use of niche, passion-based sites.

Digital media is perceived to be more effective than offline marketing in driving favorability, as well as online and brick-and-mortar traffic. It appeals to affluent audiences on the go, who often have more money than time. And because luxury brands must deal with an extremely niche audience that is more privacy-sensitive and difficult to reach, these customers expect an engagement experience that mass marketers aren’t capable of delivering.

With its highly successful push into digital media earlier this year, Burberry has become luxury online marketing's champion. Creative officer Christopher Bailey claims it’s become “as much a media-content company as a design company.” As proof, the company has launched its recent AW(Autumn/Winter) 2012 collection across 10 different social platforms, tailoring the presentations to best leverage the advantages of each site.

Key Takeaways from Burberry

1. Use co-creation to drive brand awareness and engagement through
user-generated content.
Taking a cue from Threadless, Burberry’s Art of the Trench photo-sharing site allows consumers and fashion photographers to document how they wear the brand’s iconic trenchcoat. This unique use of user-generated content and customer engagement has generated a massive amount of brand awareness for the company.

2. Make your consumers feel exclusive by showing them exclusive content.
In its recent “Tweetwalk” event, Burberry partnered with Twitter to post backstage pictures of every look before models were sent out onto the runway, which meant that Burberry followers were seeing looks before most members of the fashion show audience.

3. Design your content to help guide your customers down the purchase path.
In a fresh twist on direct sales, Burberry live-streamed its London Fashion Week catwalk to 25 main stores as a “living catalog,” allowing existing customers to place immediate orders on upcoming collections before the looks became available to the public. Burberry also made it possible for consumers to directly purchase items by clicking through any of the image or video galleries on their social media posts.