Alibaba's Success; 3 TakeAways to Help Your Marketing

Article by Ernan Roman Featured on CMO.com

How did online retailer Alibaba leverage Singles Day into an event that will trump Cyber Monday in sales volume?

Singles Day, which originated at China’s Nanjing University in 1993 as an occasion for singles to party with fellow single friends, grew from a collegiate Internet sensation into a full-blown phenomenon when Alibaba transformed the Nov. 11 occasion into a day of sales.

Analysts expected this year’s Singles Day sales to surge to a new record. Six million products from approximately 40,000 merchants and 30,000 brands went on sale (as opposed to 1 million in 2014, according to Comscore). Chinese consumers were predicted to spend 1,761 yuan ($277) per person, which is a rise of 22% year over year (YoY).

Well, preliminary, unaudited numbers indicate that Alibaba broke records with sales of $14.3 billion, a 60% increase YoY.

As you plan for 2016, consider how Alibaba brilliantly listened to the needs of its target demographic and hit three key triggers to drive sales:

1. Singles Day is both a social/online event and a demographically targeted event: According to “The Millennial Consumer” study, events such as Single’s Day touch on many key points for this important segment: Millennials don’t associate with traditional media sources or advertising. To reach this group, brands need to use social media, events, and peer-to-peer connections; 33% said blogs are their top media source, fewer than 3% rank traditional media sources as purchase influencers, and only 1% said an advertisement would make them trust a brand.

Alibaba’s use of social media to unite this group around a common event was key because 62% of Millennials said they are more likely to become a loyal customer if a brand socially engages with them.

• Takeaway Tip: Listening to the voice of your ideal customer is more essential than ever. If your content and user experience are not relevant, relatable, and readily accessible to your audience, the impact will be diminished because you are not connecting with your audience.

2. Singles Day is a technology empowered event--specifically from mobile: According to the Millennial study, 87% of Millennials use between two and three tech devices at least once a day. This is critical when you consider that 43% of Alibaba’s transactions on Singles Day last year occurred on mobile.

According to Pew Research, “Nearly two-thirds of Americans are now smartphone owners, and for many these devices are a key entry point to the online world.” Additionally, one in five Americans stated that they “do not have broadband access at home, and also have relatively few options for getting online other than their cell phone.”

• Takeaway Tip: Developing specifically mobile strategies is no longer an option. It is essential.

3. Singles Day consumers favored U.S. brands, and that’s what they were provided: Chinese consumers like U.S. brands, and Alibaba said U.S. products were the top sellers on Singles Day. In all, 130 U.S. brands and retailers were a part of the Singles Day party in 2015.

What’s more, this year U.S. consumers got in on the buying at Singles Day discounts on several U.S. sites, such as Newegg Inc. and Nasty Gal Inc.

• Takeaway Tip: A sale for the sake of short-term revenue will not set you up for ongoing success. The event has to have meaning to the audience and comprise merchandise that conveys value, sparks excitement, and communicates time-driven urgency.

What you can learn from the success of Singles Day comes down to this: You must think holistically about your marketing and be a creative risk taker. Identify your priority segments and design the experience, merchandise, and meia mix to be special, differentiating, and an event consumers want to be a part of again and again.

In other words, create meaningful customer experiences that are more than just transactions.

The Customer is Wrong and Cannot Be Trusted

Article by Ernan Roman Featured on CustomerThink.com

Haven't we all had those beyond awful customer service experiences? I recently had one of "those" experiences and was stunned that every interaction and communication with this major brand assumed that the customer was wrong and could not be trusted. It is shocking that this kind of behavior is still so pervasive today.

According to Shep Hyken, customer service expert, "Customer service is not a department, it is a philosophy."

And, this is why so many companies still get it wrong. Most customer service departments are disconnected units built as battle grounds to defend corporate policies or disseminate complicated procedures that presume the customer is always wrong.

Companies must finally fix this by imposing customer engagement and retention behaviors and metrics for every channel used by customers.

According to the report Customers 2020 by Walker Information in collaboration with Customer Think and the Chief Customer Officer Council, by 2020 customer experience will overtake price and product as the key brand differentiator.

Here are some other stats to consider:

• By 2016, 89% of companies expect to compete mostly on the basis of customer experience, [Tweet this] versus 36% four years ago.
• 40% of customers begin purchasing from a competitor because of their reputation for great customer service.
• 98% of the U.S. consumers surveyed said that customer service is very important or somewhat important in their choice of or loyalty to a brand

These insights are corroborated by findings from Voice of Customer Learnings from 15,000+ hours of research conducted by our firm, ERDM;

• High quality customer experiences must occur at every point of contact, every medium and every part of the customer journey.
• High value experiences are now a key competitive differentiator for consumers.

Marriott International Puts People First

With a slogan, putting people first, Marriot International has recently been named to the "2015 Customer Service Hall of Fame" by 24/7 Wall Street.

On their website Marriott International notes:

• We put people first – Take care of associates and they will take care of the customers.
• We pursue excellence – Marriott's reputation for superior customer service dates back to J. Willard Marriott's original goal for his business… We take pride in the details…
• We embrace change – We're driven to continually challenge the status quo and anticipate our customers' changing needs.

Marriott trains its staff to understand each other so that it can understand consumers. According to Nancy Curtin Morris, Marriott's National Director of Training:

"Our focus on customer service has been strong for more than 70 years. (The ability of) managers and their staff to understand and relate to customers—and that is where the payoff comes in…"

Marriott's Second quarter 2015 net income totaled $240 million, a 25 percent increase over 2014 second quarter net income.

TakeAways

1. Don't think of customer service as call-center or chat based. Think of customer service as a company-wide commitment that transcends every touchpoint throughout the customer journey.

2. Companies need to develop customer service policies and metrics that are relationship builders rather than merely avenues to defend company policies or disseminate impersonal information to customers who cannot be trusted.

3. Train employees on communication and empathy so they can better navigate situations with each other and with customers to more efficiently and effectively.

According to Scott Broetzmann, president of Customer Care Measurement & Consulting, "Many companies today are simply awful at resolving customer problems…" And in the Arizona State University's "customer rage" study it was noted that "satisfaction with service is actually no higher than it was in the 1970s."

Companies need to take a new look at old, outdated customer service that cultivates a combative "us vs. them mentality." Companies must rethink customer service as a revenue generating skill that builds, repairs and grows long-term relationships.

Customer-driven Innovations Deliver 8 Times the Revenue as Employee Ideas

Article by Ernan Roman Featured on CustomerThink.com

Once upon a time, brands made products and consumers bought them. But not anymore.

Today, it's all about what people want to buy — not what companies want to sell. Consumers have very smart and specific ideas about the products they are willing to purchase. And, it's the brands that listen who get their business.

In a study from the Institute of Management Sciences the following findings were reported:

• Customers can have very innovative ideas.
• User-created innovations have been successfully utilized to turn around "innovative slump periods."

Additionally the study followed products developed via employee input vs. customer input:

• Customer/User innovations had an average revenue of $146 million dollars (in 5 years).
• Internally generated/Employee innovations had an average revenue of $18 million (for the same span of time).

Nestlé Gets the Message – Less is More for Consumers

Consumers are increasingly outspoken about their expectations of the quality, content and information regarding food. Per Paul Grimwood, CEO of Nestlé USA, "The clock is on every one of our businesses to make sure there is consumer demand, that it ticks off the right boxes for us as a health and wellness company."

Consumers are telling all manufacturers that they want to recognize all of the ingredients in their food…" To meet the demand for more natural and simpler labels and ingredients, the corporation is transitioning the formulation of its most popular chocolate brands, keeping consumers apprised of the changes at every stage.

Nestlé CEO Paul Bulcke commented: "The consumer has changed what he values." To keep up with the wishes of consumers, the company used various research reports to understand the exact changes desired. Company executives noted, "We conducted consumer testing to ensure the new recipe delivers on our high standards for taste and appearance."

In its most recent financial call, the company noted that it is now moving on to innovate and adapt to consumer trends in regards to all of its brand products. Nestlé reported 4.5% organic growth for the first half of the year, which beat analysts' estimates.

Target Changes Store Signage to Gender Bias

According to its website, Target recently announced, "… we know that shopping preferences and needs change …we never want guests or their families to feel frustrated or limited by the way things are presented. Over the past year, guests have raised important questions about a handful of signs in our stores…We heard you, and we agree… We thank guests all the time for challenging us to get better at what we do and take the shopping trip to new levels. We're always listening."

In direct response to consumer feedback over the next few months, Target will change in store signage and labels on toys and other areas after it says customers raised raising concerns about unnecessary gender-based product associations. Besides accommodating consumer requests, this move immediately sparked (predominately) good will among consumers through social and blogger posts in which consumers acknowledged that their opinions and voices were heard and acted upon.

TakeAways:

1. Your most valuable business growth resource is the input of your consumers. By understanding how they want to buy, you can innovate your brand and products to increase value based on meeting customer demands.

2. Don't get so caught up in your corporate environment and historic brand or product positioning that do not hear essential consumer feedback. Cultivate avenues of communication and listening so that you can hear and act on customers' viewpoints and opinions.

3. Develop an ongoing process for gathering guidance from surveys, social media, customer service comments, etc. Then be prepared to take action so you can demonstrate to consumers that you are in fact responding to the voice of your customer.

In summary, understand that there has been a fundamental shift in the product creation-consumer purchase cycle. It is no longer about how brands want to sell, but how consumers want to buy. Missing the message on this is no longer an option. Your customers are now your brand partners and listening is now one of the primary keys to business growth.

J&J Worldwide Director of Digital Strategy Answers 4 Questions for Marketing Innovators

Article by Ernan Roman Featured on CMO.com

Jeremy Dalnes is worldwide director of digital strategy and platforms for Johnson & Johnson Medical Devices, where he is responsible for shaping global digital strategy, enhancing and extending digital platforms, and delivering digital activation programs to drive customer engagement and loyalty.

Prior to joining Johnson & Johnson/DePuy Synthes Companies, Dalnes served as vice president of e-business and mobile commerce for Zeo Inc., where he was responsible for customer acquisition, driving revenue through direct sales, and building strategic partnerships to expand Zeo's product and service offerings. Before that, he was VP of e-business for Panasonic North America, where he was responsible for all online sales and marketing for Consumer Electronics North America.

Dalnes recently participated in our "4 Questions for Marketing Innovators" series.

1. What is one marketing topic that is most important to you as an innovator?
Deep listening, which I define as understanding customer/prospect sentiment and automatically integrating that data with your existing analytics. In practical terms, it's understanding how a select visitor or group of visitors feels about an experience and then digging deep on how that same group behaves [Tweet this]. It involves asking very simple sentiment-based questions, like “Did this content inspire you?” “Do you believe in the solution we are offering?”—answers to which cannot be derived by standard analytics—and then using those responses to refract and understand online behavior through that lens. Some great examples of this in use by Facebook and others were recently highlighted in a New York Times article.

2. Why is this so important?
It's always a challenge to tease out of your big data the small data that really matters. With deep listening, we use microsurvey responses as a “trail head” into the big data that we’re constantly capturing but never know quite what to do with. Only then can we truly begin to understand the unmet needs of our customers/prospects, walk in their shoes, and deliver value back to them. One example of this at J&J is DePuy Synthes Advantage, where we are leveraging this tactic to calibrate and align our messaging hierarchy on the value-added services we offer to the needs of the health-care professional and provider (i.e., hospital) audience.

3. How will the customer experience be improved by this?
We can finally create value for the end user in exchange for giving us their feedback. Imagine if you could personalize every subsequent page view of your site/app based on your knowledge that a particular person feels that price/reputation/user reviews/brand/etc. is most important to them? Alternatively, what if you knew a particular user was extremely skeptical about your product/service? How might you approach your CRM, content strategy, and information hierarchy differently? It¹s hard to understate the application of responding in real time or almost real time to customer-expressed need.

4. How will this improve the effectiveness of marketing?
The current state-of-the-art in programmatic media buying and optimization relies on conversion events that are typically transaction-oriented: Did you buy something? Download something? Install an app? The algorithms that optimize against these events eventually reach a point of diminishing return where they simply can’t buy more of that super-high-performing traunch of media without breaking the cost-per-acquisition ceiling. However, if you could ask a simple question that would help you identify a prospect that’s just about ready’ to transact but hasn’t yet, you can enhance your optimization algorithm with that survey response answer, rather than a transaction event. This allows you to widen the net of your media buy to include those prospects and increase the size of the acquisition pie, not just optimize it.

Bonus: Favorite activity outside of work?
Playing electric cello in a few projects in and around the Boston area. I am a graduate of the Oberlin Conservatory of Music, so I try to stay connected to cello in one way or another. Lately it’s been watching my kids begin to explore and play a 1/4-size cello.