Don’t Let Irrelevant Messaging Cause Your Customers to Leave. Learn What ULTA Is Doing.

Article by Ernan Roman Featured on CustomerThink.com

“…It’s worrying how many consumers feel misunderstood and [feel] that brands aren’t listening to them.”

These are the thoughts of Jeremy King, CEO of Attest, regarding his company’s consumer study, which revealed that over a third of UK consumers feel ‘misunderstood’ by brands. This could be why, according to Teradata, nearly all (90%) of marketers now believe individualized messaging is the future of marketing moving forward, “beyond segmentation to true one-to-one personalization.

If you don’t already have voice of consumer-driven relevancy at the top of your marketing priority list consider this; in a study by Janrain and Blue Research it was noted that 94% of survey respondents took at least one of these actions in response to irrelevant messaging:

• Automatically deleted the emails (68%);
• Unsubscribed from emails (54%);
• Categorized emails as “junk” or “spam” (45%);
• Became less likely to buy products (29%);
• Visited the website less frequently (13%); and
• Never visited the website again (10%).

The study also found that the irritation threshold is now so low that it takes only a few mistakes to turn off consumers: almost half said they automatically delete emails or categorize them as “junk” after being mis-targeted twice; 38% unsubscribe after receiving two mis-targeted emails.

One brand that has re-evaluated how they personalize the customer experience to ensure relevance is beauty retailer, ULTA, which has more than 16 million active loyalty members. And, Fortune recently selected ULTA’s CEO, Mary Dillon as one of the most powerful women for 2016.

One of the main reasons ULTA has grown so quickly was the realization that because their products are available through multiple channels, their differentiating factor had to be their consumer experience. To facilitate their omnichannel personalization strategies, they leveraged technology in a campaign they named “connected beauty,” which integrates in-store, mobile, social, online and app experiences. “Our concept of connected beauty is really about making sure that we connect with our guests across all touch-points in the same way,” says Diane Randolph, CIO at ULTA Beauty.

And according to Lockie Antonopoulos, IT director of mobility at ULTA Beauty, “Technology is giving ULTA the opportunity to strive toward its goals. By giving information at a quicker pace to both our executive team and our store associates, they are able to react in a more timely manner.”

Technology allows ULTA customers to get real-time inventory for their local store so they know whether their chosen product is available before they arrive. Consultants can use tablets in-store to access customer information such as shopping history, previous purchases, loyalty point balances, and previous loyalty program redemptions. “We’re thinking about the loyalty experience every day…We then attach the info we get from the [in store] consultation to our loyalty program, which enables further personalization,” Antonopoulos stated.

ULTA’s CMO Dave Kimbell goes on to state, “We’re trying to innovate to meet her needs and get ahead of her expectations to personalize the experience whenever she wants it in the store, online or on an app. It’s critical to our competitive success because that’s how she wants to shop and other retailers that are focused on one or the other can’t do that.”

TakeAways

1. Irrelevant marketing now has unprecedented consequences. It has become a reason to sever ties with a brand. If consumers feel their preferences aren’t requested or respected, they see little reason to buy from that brand, given the many other choices.

2. True relevancy is based on an omnichannel strategy which prioritizes getting to know your customer’s individual preferences.

3. Understand how your customer shops your brand and their preferred touchpoints. Build ways to connect these touchpoints so no matter how they engage, they are getting relevance and consistency.

How Dove Engages Customers with Sincere and Authentic Cause Marketing

Article by Ernan Roman Featured on CustomerThink.com

According to Adam Kleinberg, CEO of Traction, consumers are increasingly skeptical about insincere cause marketing efforts which just push products. Almost half (41 percent) of the agency’s survey respondents said that insincere cause marketing was perceived as “just a spin” and 25 percent are annoyed by it. “Every brand has a corporate social responsibility … [but it shouldn’t] be furthered as a marketing opportunity,” said Kleinberg. “You have to put your money where your mouth is, and the consumers will see that.”

This is consistent with our ERDM Learnings from 15,000+ hours of VoC Interviews regarding innovation-based customer listening. Here’s what consumers said:

• “With today’s technology, I expect brand communications to reflect my interests.”
• “I don’t want marketing when it comes to major issues.”

Aligning your brand with a cause which is meaningful to your customers is an effective way to build long term relationships—if done authentically. According to statistics from the Cause Marketing Forum:

• 72% of consumers have donated to charity at the register and 65% of consumers felt positively about the retailer after giving.
• 80% of global consumers agree that business must play a role in addressing societal issues.

The “Dove Self Esteem Project” is a prime example of a brand listening to consumers and supporting their interests and concerns. The campaign offers resources for parents, educators, youth leaders and mentors to run their own “self esteem workshops.” Additionally, The Dove Global Beauty and Confidence Report demonstrated the brand’s sincere dedication to help its consumers by interviewing 10,500 women across 13 countries to get viewpoints and thoughts regarding body image.

According to Victoria Sjardin, Senior Global Director, Dove Masterbrand. “For over 50 years, Dove has been committed to creating a world where beauty is a source of confidence, not anxiety. With this new research, we hope to inspire women and girls everywhere to develop a positive relationship with the way they look.”

The company states that since its campaign launch, the “Self Esteem Project” has impacted the lives of more than 19 million young people across 128 countries. It now has a new goal to up its social reach by 2020 – committing to positively impact an additional 20 million over the next four years.

TakeAways

1. Aligning your brand authentically with a cause of importance to your customers is vital among all demographic groups, but especially significant with Millennials.

According to the Deloitte Millennial Survey, 87 percent of Millennials believe that a company should have a larger purpose than sales and profits. Additionally in the Cone Millennial Cause Study, 79 percent indicate they’re likely to purchase a product from a company they consider socially responsible.

2. Efforts in cause marketing need to be authentic or you run the risk of turning off consumers.

“There has been a shift in perception among customers of what an authentic expression of a brand is,” said Max Lenderman, CEO of cause-marketing specialist agency, School. “And jumping on a cause is increasingly being viewed as not authentic.”

“With every passing day, it’s getting harder and harder to pull the wool over people’s eyes … ” notes Jim Moriarty, director of Brand Citizenship. “We all crave authenticity. Brands can and should change the world. And the best way to do that is to initiate, support and amplify causes that are connected to the brand’s business and mission.”

3. For a cause campaign to be perceived as sincere, brands need to back up their commitment by providing resources, information, and opportunities for involvement rather than merely marketing messages.

The Harvard Business Review looked at top cause marketing campaigns and put together a list of key factors for success which included inspiring messaging; an element that people can experience in the real world and a big issue coupled with a request for a small personal action. Their bottom line recommendation? “[Create] public service engagement, not a public service announcement.”

While consumers are looking to brands to take action on matters of importance to them, insincere cause marketing is perceived as simply another sales opportunity, and consumers do not want blatant marketing on major issues. Listening to your consumers and developing innovative means of reacting sincerely to meet their needs is a key way to build long term relationships—but only if done authentically.

Are You Delivering Cross-Channel Personalization? Learn What Under Armour and Saks Are Doing Right

Article by Ernan Roman Featured on CustomerThink.com

There is a chasm between what customers are expecting in terms of personalization and what marketers are providing. According to findings from research conducted by TimeTrade; “93 percent of retail decision makers claim that personalization is a strategic focus but only 25 percent of shoppers say they receive a consistent, personal experience across channels.” According to TimeTrade CEO, Gary Ambrosino, “to remain successful … brands must … ensure that service is prompt, personalized and consistent across channels.”

Personalizing per your customer’s individual needs is a 360-degree pursuit. It doesn’t stop at the home page of your website or your consumer’s email inbox. Personalizing the entire brand experience with Human Data that addresses individual’s lifestyle and interests is critical for building long term relationships versus one-shot sales.

Per recent research conducted by our firm, marketers must make a profound shift from implicit data (information data mined or provided by customers for short-term interests or needs) to explicit self-profiled preference Human data (information provided by customers in the Preference Center of a site or through dialogue boxes). Findings from 2500+ hours of VoC research interviews for clients such as Gilt, MassMutual, IBM, HP and QVC, indicate that implicit data is simply not delivering on customer’s expectations of value. To drive high levels of relevance and personalization, Millennials in particular, are willing to provide deep explicit Human Data regarding their preferences.

Fitness company, Under Armour offers “UA Shop”, a lifestyle-based Custom Shopping App for their customer that provides a deeply personalized experience based on a shopper’s athlete inspiration, workout history, and previous purchase history. For example, depending on the type of activity logged into a connected fitness tracker and their geographical location, a shopper will be presented with specific product suggestions relevant to their situation.

Jason LaRose, Senior Vice President, Revenue, at Under Armour noted about the app, “This app was created to … complement our existing in-store experiences … We are now able to provide custom experiences across our various categories specific to our diverse customer base.”

High-end retailers such as Saks Fifth Avenue have long offered in-store shopping services, but with today’s busy on-the-go consumer, that service needed to be upgraded and expanded to include a virtual component. Today, Saks lets its customers connect with Saks Associates 24/7 to create personally curated saks.com boutique pages, via a dedicated URL. Interaction also includes live chat, email or scheduled appointments. In addition, Saks Associates can showcase personalized “storefronts” to customers through email and social media or via a mobile app.

“This is a highly personalized online solution to selling …” commented Marc Metrick, President, Saks Fifth Avenue, “with access to Associates 24/7, personalized services and more, we finally have the ability to bring the high-touch Saks experience and store environment online.”

TakeAways

1. Your customer, BtoB or BtoC, is a human being, not a cohort or data segment. Personalizing their full brand experience across all channels and touchpoints lets them know that you are listening and customizing interactions/solutions per their individual needs.
2. Showing your shoppers how a product can solve a problem or enhance their lifestyle in a meaningful way lets them envision the brand as a true partner in their life. The brand becomes less about the sale of and more about a long-term ongoing solution.
3. Today personalization is about putting the consumer in the driver’s seat to determine how they want to engage, what they want to engage about, and when that engagement should take place. Brands need to become nimble in order to provide the types of personalized experiences their unique customers require.

Using Human Data for 360-degree personalization is about using consumer-supplied preference data to address lifestyle and interests, not to sell, but to build long-term relationships. Consumers now expect brands to know their needs and present them with highly personalized solutions and experiences.

Is Your Brand Committed To A Personalized Customer Experience? (Part 2)

Article by Ernan Roman Featured on CMO.com

Recently I wrote about how to determine whether your company is truly committed to personalizing the customer experience (CX) and building loyalty. I presented the first half of eight questions to ask yourself; now I offer the rest.

My goal: to help you develop the strategies, action plans, and employee initiatives to satisfy unprecedented customer expectations for high-value engagement, personalization, and loyalty.

Question 5: Do you have in place the necessary CX/loyalty/CRM technology to connect with customers?
“Forward-looking organizations are making strides by focusing on three key ingredients: technology, data, and ownership," said Jefrey Gomez, managing director, Asia Pacific at Econsultancy, in this B&T article. Michael Kustreba, managing director of Epsilon, Asia Pacific, agreed: “The good news is that there are valuable insights from data, technology and proven methodologies that organizations can adopt to help them improve their customer experience delivery.”

Case in point: Online retailer Zappos has devised “Zappos Labs,” which focuses on solving consumers’ pain points and creating optimized customer experiences across all channels. The brand’s mobile app allows consumers to send Zappos employees a photograph of items seen on the street via text, email, or Instagram. A link is then sent back to the consumer to purchase it online.

Additionally, Zappos’ customer service agents are reminded of their CX commitment with a “Happiness Experience Form,” which reminds them to attempt at least two personal connections with consumers throughout interactions to address any needs and provide an ”overall wow experience.”

⇒ Action Items:

• Examine the technology your company has in place to see what measures can be put in place right now to boost CX, such as reminders to staff, per the Zappos example. Also, explore how you can expand the technical capabilities and possibilities at each touch point to deliver improved CX.
• Audit for the necessary level of collaboration of information sharing across the various departments and systems.

Question 6: Do you have a dedicated budget for new research to drive innovative CX/loyalty strategies?
Per research conducted by Epsilon, “Only 7% of companies have a single, dedicated budget for understanding the customer journey, and 27% have a dedicated budget split across different departments.”

Jonathan Serebrin, user experience researcher for The Home Depot, advises that companies include all teams in research results and learnings to make them part of the company culture. Make sure that all departments understand how customers feel about the brand and products, he said. Every step of the testing and development process needs to assure synchronization with customers.

While CMOs are now understanding that a dedicated CX budget is essential to transformation, in the “Spotlight On 2016 CX Helps And Hurts” study by Forrester, a notation was made regarding budgets: “CMOs won’t simply write blank checks. Instead they’ll require CX teams to prove that their projects improve key performance indicators that marketers care about, like customer acquisition and engagement.”

⇒ Action Items:

• Take a closer look at carving out a slice of digital, social, marketing, sales, and IT budgets for one combined CX budget. Rather than depleting one department’s funds, multiple stakeholder departments should contribute to the overall CX cause.
• Be sure you have in place a solid benchmark of customer value and how/when milestones can be measured so that budget investments can be justified or adjusted in the future.

Question 7: Do the highest levels of management in your company support CX programs and staff?
The “Shifting Sands Of Marketing: Gartner 2015-2016 CMO Spend Survey” reported, “Business leaders understand that consumer expectations for fast, informative, convenient, and personalized transactions will continue to grow and that staying ahead of the competition is paramount.”

And according to the Forrester/Heidrick & Struggles “2016 Evolved CMO report,” “Evolved CMOs will need to commit to understanding customers and to driving that philosophy throughout their organizations with a customer-obsessed mindset.”

⇒ Action Items:

• In order for CX to succeed in your company, it is essential that there is buy in and commitment from every involved department at all levels.
• CX innovation is a top-down change process.
• However, it is marketing’s responsibility to provide the vision and criteria for success.

Question 8: Does your company have a cross-functional and integrated culture?
The Deloitte “Global Human Capital Trends 2016” report stated that in today’s evolving marketplace, companies need to adopt a new organizational structure to be more of a “network of teams” with strong communication and rapid information flow cross functionally. Additional data points from the report include:

• 92% of companies said they believe redesigning the organization is very important. More than 80% of respondents reported that they are either currently restructuring their organizations or have recently completed the process.
• The growth of the Millennial demographic, the diversity of global teams, and the need to innovate and work more closely with customers are driving a new organizational flexibility.

⇒ Action Items:

• Understand what employees can bring to your CX efforts and place them in mission-focused teams by their contribution potential and experience.
• Empower teams to set their own goals and make their own decisions in order to achieve CX goals.
• Replace silos of information with information sharing cross functionally.

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.

Holiday Inn's Ortiz Answers 4 Questions For Marketing Innovators

Article by Ernan Roman Featured on CMO.com

Raul Ortiz is marketing director for the Holiday Inn and Crowne Plaza brands in the Americas. He has oversight for the teams that develop the annual marketing plans for the brands, execute integrated marketing programs behind one big brand campaign idea, and develop long-range, demand-generating, brand-building capabilities.

Ortiz 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?
Building and developing advertising that adds value to consumers’ lives. Most brand and product leaders have put the consumer at the heart of their innovation strategy. Usually this is done by focusing on improving some aspect of their target’s life. Unfortunately, we are not always as disciplined when it comes to advertising, and we far too often put our needs and wants ahead of those of our audience.

2. Why is this so important?
Technology has allowed consumers to be bombarded with more advertising than ever before. When you add this to the fact that there are a plethora of brands asking consumers to buy this or that, overcoming consumer apathy toward advertising is one of the biggest challenges to marketing ROI. In order to break through to consumers and drive purchase behavior, we need to be smarter about developing creative that connects with consumers’ minds and their hearts. Technology has narrowed competitive product advantages so significantly in the past couple of decades. While striving to build continually improving product experiences, we also need to have holistic advertising that is relatable and improves the lives of our viewers/readers after experiencing it.

3. How will the customer experience be improved by this?
This disciplined approach to advertising would help consumers in numerous ways. Call me idealistic, but I aspire to help create a world where commercial breaks are a source of intrigue versus a source for groans. I want to be in a world where digital advertising anticipates the needs of our guests and connects them proactively not just with a product but, ultimately, to answers to questions they have at a life level.

If we are able to meet these ideals, we are giving consumers something no product or solution can replace, and that is time. The less time they spend fretting over where they’re going on vacation or where they’ll stay for their next big business trip, the more time they have for doing things that drive the most enjoyment or productivity in their lives.

4. How will this improve the effectiveness of marketing?
The more we respect the time of our audiences and consumers, the more they will reward us with trial and brand loyalty. The more trial and loyalty we drive with every dollar we spend, our brands will be rewarded with improved ROI. In order for advertising to have an effect, consumers have to engage with it. As I mentioned before, consumers are flooded with advertising, which means we need to give them a reason to engage with our social posts, content marketing, or 30-second ads.

I think that our campaign for the Holiday Inn brand, “Journey to Extraordinary,” provides a great case study on the impact that heart- and mind-opening advertising can have on a business. The campaign started in 2014 as a traditional campaign, called “Change Your View,” that had the goal of informing consumers about the significant investment our franchisees have made to improve our hotels and our service. We were effective with this approach, but our creative lead at Ogilvy & Mather, Jason Aspes, challenged us to tweak our approach and have our real guests tell consumers about their Holiday Inn travel experiences and share how the brand is helping them to make travel more memorable, more productive, and ultimately more enjoyable. The change to move the campaign from the perspective of the brand to that of our guests has worked out brilliantly for the business. We have been able to build the equity attributes we are targeting and drive unaided awareness and consideration in consecutive years. We have also seen big decreases in cost per conversion in both our TV and digital buys.

Bonus: Favorite activity outside of work?
Just one? I really love coaching my son’s soccer team, but I probably most enjoy exploring the awesome restaurant scene in Atlanta with my wife and friends.

For additional Marketing Innovator stories, click here.

"Sorry, We'll Fix It" Seem To Be The Hardest Words

Article by Ernan Roman Featured on CustomerThink.com

In speaking about the Volkswagen emissions scandal, Johns Hopkins Professor Sylvia Long-Tolbert noted, “I don’t think people will be able to understand… a company that has misled consumers and been dishonest… people aren’t going to feel very confident in buying that [brand]… People want companies to acknowledge that a problem exists.”

Brand problems will always happen. But it’s how brands respond that will make or break consumer trust. According to an Ohio State University study on the power of apology, it was noted that the most important thing you can do is admit responsibility, “Say it is your fault, that you made a mistake.” A concern about apologies is that talk is cheap. It’s different if you say ‘I’ll fix what is wrong.’

And while Mattias Mueller, the chief executive of Volkswagen did have a “2 minute conversation” with President Obama to “personally apologize to him for our behavior,” the company has not extended that same courtesy to the U.S. public. Instead, in his prepared apology remarks to the U.S. public Mueller was somewhat defensive regarding the problem stating, “it was an ethical problem? I cannot understand why you say that… We didn’t lie.”

As expected, Volkswagen’s lack of ownership of its emission problems has had a dramatic effect on sales, with March the 16th month with a drop in sales over the last past 18 months.

In contrast, IKEA, which has had problems recently with dressers that tip over, has taken the issue head on. In one of the largest U.S. Consumer Product Safety Commission recalls involving over 29 Million IKEA products the company is now attempting to lead the charge in consumer safety.

U.S. IKEA President, Lars Petersson took to the airwaves to alert consumers about the issues, “You may have heard about the recall of IKEA MALM and other chests of drawers models… .At IKEA, we want to help create a better life for our customers. Part of that is helping our customers create a safe home for their families.” The company has created a campaign called, “Secure It” to educate consumers about tip over accidents.

And while this is not exactly an apology, IKEA is acknowledging the issue and offering help to consumers. It has received the backing of The American Academy of Pediatrics, Consumers Union, Consumer Federation of America, Kids In Danger, The National Center for Health Research, Public Citizen and Shane’s Foundation.

TakeAways on Brand Problem Resolution:
1. Findings from our VoC Research indicate that consumers want immediate and honest resolution to negative experiences. Brands need to own the problem and define actions to correct the error.

2. Additionally, our VoC research indicates that there needs to be a change in company culture and thinking; from “how does this benefit us?” to “how does this benefit the customer?” If brands portray themselves as defensive or dishonest on hot-button issues, consumers will develop distrust towards the brand.

3. In the report, How to Save Brand after Crises? it was noted, “After a brand crisis, how the firm responds eventually determines the extent to which the brand can be saved… consumers have the right to determine whether to forgive the brand or not… individuals … are more likely to trust the transgressor following an apology.” But the study goes on to state that consumers can get even angrier when, “[the company does not] acknowledge its responsibility in the apology letter.”

Brand crises have enormous immediate and far-reaching implications. Rapid acknowledgement and a sincere, human apology are the determining factors as to whether consumers will ultimately forgive, and continue the brand relationship, or not.

Citi's Managing Director, Global Rewards, Answers 4 Questions For Marketing Innovators

As Citi’s managing director, benefits, new product development and global rewards, Mary Hines oversees the growth and development of the company’s ThankYou Rewards loyalty program, as well as the benefit offerings associated with Citi’s Branded Cards portfolio. She is also responsible for leading innovation efforts within the Branded Cards portfolio and bringing new products to market.

Hines 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?
Nearly every business model on the planet is being impacted by a powerful, disruptive force: digitization. And with more consumers relying on mobile devices to interact with brands--in 2015, almost two-thirds of U.S. adults had a smartphone, up from one-third in 2011, according to the Pew Research Center--brands have no choice but to adapt or die. Adapting to the changing landscape isn’t just smart, it’s a matter of survival.

2. Why is this so important?
For Citi, leading what’s next and digitizing our model is central to our strategy. From 2014 to 2015, we saw a 25% increase in our global customer base interacting with us via mobile, and this trajectory continues. In order to remain relevant and innovate for growth, we need to ensure we’re interacting with consumers when they want and where they want, and increasingly, this is via mobile.

3. How will the customer experience be improved by this?
Through Citi’s ThankYou Rewards loyalty program, we’ve been on a journey to transform the offering so that we’re providing relevance in a digital world. We are optimizing the program for our mobile-savvy member base and enabling redemption where customers are. Our digital catalog has been mobile-optimized, and, through this, we’ve seen a twofold increase in digital engagement over the program’s analogue counterpart.

What we’ve found is that when we’re engaging customers where they want to be engaged, it’s a powerful relationship. In a study we’re about to release, nearly 90% of consumers said they are less likely to switch credit-card providers or banks when they use their credit-card rewards. So by interacting with customers where they are, we’re not only providing ease and simplicity, we’re laying the groundwork for a long-term relationship that will extend far past this mobile moment through technological innovations of the future.

4. How will this improve the effectiveness of marketing?
At the core of marketing, it’s being where customers are. However, the “where” has and will continue to shift as technology transforms at a rapid pace. And brands need to stay ahead of the game to stay in it.

Bonus: Favorite activity outside of work?
Being class parent for my son’s pre-K class—never a dull moment.

For additional Marketing Innovator stories, click here.

Retailers Seeking Brand Loyalty Challenged by Volatile Store Traffic Environment

Article by Ernan Roman Featured on Loyalty360

In the past year, a plethora of retailers made assertions pertaining to a “challenging store traffic environment,” and its negative impact on sales and, ultimately, brand loyalty.

What’s more, these retailers have spoken of a challenging environment, with volatile macros globally, and an increasingly competitive landscape replete with digital technologies disrupting many aspects of their respective business models.

Ernan Roman, President of ERDM, told Loyalty360 that the challenging store traffic environment can certainly have a direct impact on loyalty marketers.

“Our firm, ERDM, recently conducted 2000-plus hours of voice of customer research interviews with millennials to understand their expectations of the retail shopping experience,” Roman explained. “The findings explain why many retailers are finding this to be a challenging time in terms of store traffic. Per the findings, millennials take for granted these factors in the shopping experience; choice, price value, service, speed, convenience, contextual relevance, and frictionless purchasing.”

A retailer’s shopping experience has to satisfy all these criteria in every element of the omnichannel mix, Roman noted.

“If the retail shopping experience does not bring additional value to the online and mobile shopping experience, why visit a store?” Roman said. “Marketers must learn from the omnichannel convenience, personalization, service, engagement and magic of the retail experience provided by leaders such as Burberry, Rebecca Minkoff, and Sephora.”

Based on the research findings, Roman recently visited a Sephora store and observed how the use of in-store technology, tutorials, and demos enhanced the customer shopping experience.

“But, the really thrilling part was how sales reps entered customers’ personal preference information on their tablets so customers would have their updated information as part of their profiles, therefore improving their future online or retail shopping experiences!” Roman said. “The Sephora reps were focused on improving the customers’ omnichannel experience and providing guidance to help them make informed decisions across all channels. The sales flowed naturally from this value-added engagement. Retailers that are not embracing this holistic, customer-focused and omnichannel vision will not win.”

Are Your Policies Helping Or Hurting Customer Engagement?

Article by Ernan Roman Featured on CMO.com

“You can only eat so much plain white cake. The 30 percent is the icing.” This is just one of the statements Joe McFarland, J.C. Penney’s executive vice president, made during a recent company conference. He then went on to instruct attendees, “We want you to stop doing things that don’t focus on the customer.”

Additionally, J.C. Penney CEO Marvin Ellison made the following statements: “Our marketing has to be more specialized,” “We have great data; we just aren’t using it,” and, “The customer loves us, and we need to love them back.”

Shifts from traditional corporate policies toward customer experience-focused improvements are reinforced by two important research reports:

• Forrester principal analyst Laura Ramos noted: “Customer-centric companies must figure out how to engage customers on their terms throughout the customer journey. ... In order to become a customer-centric company, old metrics and models need to be thrown out. ... It doesn’t work that way anymore.”
• A McKinsey report advised, “As improving customer experience becomes a bigger component of corporate strategy, more and more executives will face the decision to commit their organizations to a broad customer-experience transformation.”

One company that has put both money and policy behind its commitment to better its consumer experience via corporate policy is Chick-fil-A, which is currently the highest-scoring restaurant brand in the U.S. Customer Experience Excellence rankings.

The company spends more than a $1 million evaluating its service. In addition to traditional focus groups, the company conducts a quarterly phone survey with customers from each restaurant. Each location receives a two-page report detailing what's working and what needs improving.

“My business grew on the understanding that customers are always looking for someone who is dependable, polite, and will take care of them,” said S. Truett Cathy, founder of Chick-fil-A.

The company has a dedicated area on its site for Chick-fil-A stories. Additionally, its 80,000-square-foot Hatch Innovation and Learning Center is dedicated to helping the company invent next-generation customer experiences.

My three takeaways for marketers:

1. Make it a priority to challenge your corporate policies and procedures to determine whether they are creating obstacles or facilitating employees' ability to provide the best possible customer experiences.

2. Regularly engage consumers in “real life” customer experience surveys and conversations to determine what is and isn’t working. Listen. Learn. Make changes.

3. Do you have a formal training to make sure your CS strategy is put into action, with clear benchmarks to measure success? If the answer is no, fix that right away.

“Marketing can’t deliver a great customer experience independent of sales, service, and any other part of the organization. ... Without a holistic approach, you are really only hoping that you can deliver a great experience,” said Gartner analyst Jake Sorofman.

It is now no longer an option that marketers in every industry challenge their corporate structure to understand whether legacy policies are building barriers to, rather than enabling, customer engagement.

CMOs, Here's Why You Should Care About Explicit Data

Article by Ernan Roman Featured on Forbes.com

It’s time to take the next step with your data strategies. According to our recent research, customers, especially Millennials, want to drive the customized experiences and interactions they have with brands. To meet these expectations, marketers must make a profound shift and enrich their implicit data with the power of explicit, self-profiled preference data.

You have no doubt been using implicit data, that is, information which you’ve data mined or your customers provided to indicate short-term interests or needs—but not to intentionally indicate deeper or longer-term preferences. Examples of implicit data include web browsing behavior such as page views, items placed in the shopping cart, wait-listed items, items purchased and data mined from social media sites such as Twitter or Facebook.

This implicit data certainly has value, but per findings from our more than 2,000 hours of VoC research interviews for clients such as Gilt, MassMutual, IBM, HP and QVC, it is not delivering the response rates or meeting the expectations of many BtoB and BtoC customers. Research findings indicate that today’s customers want to drive high levels of relevance and personalization through explicit preferences they provide.

Explicit data is self-profiled preference information customers provide in the Preference Center of a site or through dialogue boxes. Here’s a b-to-c example: A customer specifically tells a merchant she is interested in trendy professional clothing for the workplace. Here’s a b-to-b example: A customer tells a company that they want training programs on digital marketing for new hires.

In an IBM blog it was noted, “from a customer loyalty perspective, personalization is more than just using some fancy technology to message a customer by name or upsell them a complementary product based on “people like me.” True personalization … [offers] the right incentive, in the right amount, targeting the right behavior, in the right channel, at the right time. In essence, it means building a unique strategy and set of program rules for each customer, not a one-size-fits-all approach.”

The VoC research also identified eight critical points in brand lifecycles where customers want explicit data-driven personalized engagement:

1. Purchase
2. Onboarding
3. Anticipatory responses to decreasing engagement (visits, responses, purchases)
4. Immediate responses to negative experiences
5. Surprise-and-delight thank-yous
6. Value-added cross-selling and upselling
7. Repeat sales
8. Renewals

Life Time Fitness uses personalized content to improve the health of their marketing. The company sets consumer journeys and sends 7 million personalized emails per month according to predetermined segments and has seen a 154% return on its investment.

Personalized content improved Life Time Fitness’ open rates by 80% over two years to help the company add memberships and increase conversion rates. Member experiences were improved by adding communications before, during and after their time at a Life Time facility. Targeted follow-up emails addressed any issues or concerns which reduced unsubscribes by 15% and created additional cross-channel sales from existing members.

“As marketers, it’s less about us understanding what products and services we put in front of [members]. It’s more about how we continue to enrich the experience that they’¬re having … as well as the relationship they have with Life Time,” said Keith Dieruf, vice president of digital marketing.

“The content of every communication via email, online, mobile texts, or mobile notifications [help members] walk through that journey to get them to where they personally want to go,” said Renee Main, VP of marketing, member acquisition, and retention.

Explicit Data Takeaways

1. Use customer insights to determine:

• How your customers define appropriate explicit data
• Value exchange for requesting explicit information
• Earning the right for progressive profiling
• Design of high value Preference Centers

2. Test to determine the right mix between implicit and explicit data. Using only implicit data is not enough to drive true personalization.

3. Design preference data capture for every channel, digital and physical. Every channel must respect preferences and aversions.

Customers understand personalization. But they want it to be appropriate and they want to explicitly customize it. Test this and you will see that it drives increased conversion rates, return visits, overall engagement and decreases email unsubscribe rates.

Current State of Customer Experience and Personalization: Not a Pretty Picture

Article by Ernan Roman Featured on Loyalty360

During the May 26 session titled, Today’s Personalization is Broken. Learn the Breakthroughs that Work!” at the 9th annual Loyalty Expo, presented by Loyalty360, Ernan Roman, President, ERDM Corp. talked about the current state of customer experience and personalization among loyalty marketers.

Roman’s findings were based on learnings from more than 15,000 hours of Voice of the Customer interviews.

“The perception is we’re just putting lipstick on a pig,” Roman said.

To give a better picture of that, Roman offered several quotes:

“What we receive is not smart personalization. They aren’t personalizing the things that matter to me!”
“What they consider personalization is so old-fashioned.”
“I want more than just buying history-based emails.”
“With today’s technology, I expect emails to reflect my interests and preferences.”

A CMO of a Fortune Company added: “We are using new CRM technology to automate old bad behaviors … not guided by how customers define improved CX. Result; high tech, irritating and brand damaging spray and pray.”

Roman said that customers want deeper engagement at eight lifecycle points:

- Acquisition
- Onboarding
- Anticipating responses to decreasing engagement
- Immediate responses to negative experiences
- Surprise and delight thank-yous
- Value-added cross-selling/upselling
- Repeat sales
- Renewal/activation

Despite increased privacy concerns, Roman said B2B and B2C customers are willing to provide trusted brands with deep business and personal information in exchange for more personalized offers and communications. “This fundamentally reframes data privacy concerns because of reciprocity of value!” Roman said.

Roman touted the VoC-based Reciprocity of Value Equation.

Consumer Reciprocity
Recognition that, to receive true personalization, must provide deep personal or business preference information. This marks the shift to explicit vs. implicit personalization.

Business Reciprocity
Commitment by marketers to provide smart personalization; to be truly personalized, must be based on more than transactional, overlay, and inferential data.

Human Data
B2B or B2C opt-in self profiled information
Key issues, needs, expectations
Decision-making process
Messaging and media preferences
Self-described personality types, attitudes, life stages

Consumer reciprocity + Business reciprocity + Deep Human Data = CX innovation.

What's more, Roman offered a 13 point CX Innovation Check List:

1. Three strategies for delivering on customer expectations;
Capture individual preferences
Use preferences to drive true personalization
Establish guidelines for safeguarding data privacy.

2. Don’t ruin the hard fought gains by sending spray and pray blasts which disregard preferences in hopes of generating extra sales.

3. Find the right mix between implicit and explicit data; using only implicit data is not enough to power true personalization.

4. Consumers define personalization as much more than “those old-fashioned transaction-based communications.

5. Communications should reflect my individual preferences.

6. Change company culture and thinking;
From “How does this benefit us?” to “How does this benefit the customer?”

7. Insights from customers are a privilege, not something you are entitled to.

8. Understanding the Seller’s Journey (your sales channels) are as critical as knowing the Buyer’s Journey.

9. Enable preference-based personalization across every channel.

10. Motivate customers to provide ongoing feedback about the relevance of your offerings and communications.

11. To drive change, shift focus from E (Expense) to R (Revenue)

12. Ensure that every department and channel uses and respects customer preference information.

13. Create programs that recruit your best customers to drive social engagement.

Is Your Brand in Sync With Customer Expectations?

Article by Ernan Roman Featured on CustomerThink

Two events occurred during the past few months that are important to marketers: WalMart, known for a focus on discount pricing experienced a share tumble of 5% after they lowered their full-year sales forecast. However, Starbucks, known for its unabashedly high prices decided to raise its prices higher and consumers have decided to keep on paying.

What is behind these events? Customer alignment… or not.

Starbucks knows coffee. They also know the high-end coffee consumer. And, they have been laser-focused in developing a clear perception of their brand that is understood and embraced by its target audience.

Walmart had that – and then they decided to change – and lost it. As a retailer the company knew retail better than many of its discount-priced competitors. They also knew their lower end, bargain-shopping consumers. But then they took on trying to become a Grocery and trying to become a Pharmacy. And, in trying to capture a larger share of market, the company has actually lost.

Starbucks, Known for Being a High-End Brand with High Prices is Winning

Why does Starbucks work? It’s simple; consumers understand the perceived value. The company does not waiver from its core perception. No matter where or how they buy it, consumers know what they’ll get from the Starbucks brand (no matter how much they have to pay for it.)

On its brand equity, Starbucks CEO Howard Schultz noted, "The success of Starbucks demonstrates the fact we have built an emotional connection with our customers. I think we have a competitive advantage over classic brands in that every day we get to touch and interact with our customers directly."

Schultz went on to discuss the value of the Starbucks brand, "Tell your story, refusing to let others define you. Use authentic experiences to inspire. Stick to your values, they are your foundation."

When other companies are looking for ways to lower prices to lure customers, Starbucks has opened even higher priced luxury Roastery stores, where customers can get a more rarefied (and expensive) offering of coffees.

Caffeinated consumers have helped the company to achieve record revenues in 4Q2015 of $4.9 billion with double-digit percentage gains over the previous year.

WalMart Trying To Be All Things To All People is Losing

WalMart has always been the "Blue Light" special company. And, when they stuck to what they were good at, they prospered. Consumers understood the "home-spun" low-priced brand and knew that they’d find a selection of bargains when they walked through the door to say hello to the store "greeter."

But then the "greeters" went away along with the "down home" friendly feel and groceries and pharmacies showed up. And now, the company’s strategy is one of transition. It is taking on not only competition in its own retail industry, but now also taking on many other industries. In the immediate transition process this new strategy is proving to be an uphill undertaking.

Though Walmart is blaming lower margins in its pharmacy business, for a part of their recent troubles, the company has no plans to change even though its counterpart Target recently threw in the pharmacy towel, announcing that it was selling off its pharmacies to CVS.

When asked about the company’s recent decline, Chief Executive Officer Doug McMillon noted that they are working towards the future, "What we’re talking about is how we transform the company…We have got to get the company positioned to serve the customer in the long term."

TakeAways:

1. Consumers have many choices, so they need to believe that your brand understands them and is there to meet their needs.

2. If perception of your brand is blurred, targeted messaging is not possible because there is no differentiating value proposition.

3. Consumers want their voices heard and they will pay more for a buying experience they perceive to be specifically built around their "wants."

Generally, you get one chance to make a first impression with consumers. And then subsequent marketing efforts reinforce that perception and cultivate value around it. Knowing what consumers want from your brand and ensuring that you consistently meet or exceed those expectations pays off handsomely in customer retention and healthy profit margins.

Research: Marketers Overestimating How Well They Listen To Customers

Article by Ernan Roman Featured on CMO.com

Recently, we conducted VoC research for an innovative company that prides itself on having achieved high levels of customer personalization due to significant investments in technology, algorithms, and analysts. But the company was shocked when findings from our interviews uncovered that people were unsatisfied with the personalization, referring to it as “old-fashioned” and “not smart.”

Following are additional representative quotes from the research:

• “What we receive is not smart personalization. They aren’t personalizing the things that matter to me!”
• “With today’s technology, I expect emails to reflect my interests and preferences.”
• “I want more than just buying history-based emails.”

Results from more than 15,000 hours of VoC research for brands such as MassMutual, Gilt, and QVC have identified a unique convergence of three factors that present CMOs and marketers with unprecedented challenges:

Factor 1: The power of technology, especially mobile, is an unprecedented enabler of better informed and faster consumer actions and purchases. To keep up, marketers need to develop strategies for high speed and high relevance engagement. A recent report noted that 69% of Britons are unsubscribing, closing accounts, opting out of emails, and deleting apps due to poorly targeted communications.

Factor 2: Consumers, in general, and millennials, in particular, are feeling a sense of tremendous empowerment and entitlement in terms of what they expect from brands. In the Deloitte report “The Growing Power of Consumers,” the authors stated that “there is an increasing expectation gap as businesses struggle to keep pace with more informed, more connected and more demanding consumers ... consumers have come to expect more, making it harder for businesses to keep up ... empowered consumers are actively sharing their views ... and becoming more involved.”

Factor 3: As illustrated by the ongoing Apple controversy with the FBI, consumers understand the value of their personal information, yet they desire higher levels of personalization. And, per our VoC research findings, reciprocity of value is a fundamental requirement for earning the right to in-depth customer information in exchange for significantly improved preference-driven personalization.

How can marketers better listen to their customers? Here are a trio of action items:

1. Actions need to meet consumer personalization expectations. Capture individual preferences, use preferences to drive "smart" personalization, and establish guidelines for safeguarding data privacy.

2. Don’t ruin the hard fought gains by sending “spray and pray” blasts that disregard preferences in hopes of generating extra sales.

3. Find the right mix between implicit and explicit data. Using only implicit data is not enough to power true personalization.

Marketers are dealing with the most demanding consumers in history. Leveraging new listening and responding capabilities is now essential in order to acquire and retain this empowered consumer. By acting on these three listening factors, marketers will be able to provide the highest levels of customer experience, value, and personalization.

Nestle Waters' CMO Answers 4 Questions For Marketing Innovators

Article by Ernan Roman Featured on CMO.com

Before he was appointed executive vice president and chief marketing officer at Nestlé Waters North America in 2014, Antonio Sciuto oversaw the brand's digital transformation as its global head of e-commerce. Prior, he was global strategy and organization manager for customer and sales.

A graduate of Bocconi University in Milan, Sciuto began his career in 2000 at Procter & Gamble, where he spent seven years in marketing and sales roles. He then worked as a consultant for McKinsey and Co. from 2007 to 2010.

Sciuto 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?
The evolution of the marketer's role to win in the omnichannel consumer journey.

The centricity of the consumer journey is shifting marketing's focus from building databases to fostering communities by leveraging social and mobile platforms. In the past few years, we have focused on big data: building things like databases, consumer segmentation, and predictive behavior. All of these initiatives are still relevant, but we need to shift our mindset toward understanding that the best databases are ones that are available at our fingertips (e.g., Facebook, Twitter, Instagram, Pinterest, etc.). Data from these platforms may not be owned in the traditional sense, but they are certainly usable as long as we leverage the data to make better business and marketing decisions.

An important part of our job must be to leverage social databases and their roles in consumer behavior. We do this not only by engaging with consumers when responding to inquiries, but also by fostering a more modern, proactive approach to satisfy consumer needs and enrich their consumer experience. Our scope is no longer just limited to demand generation; our mission should be building a holistic relationship with our consumers by leveraging all engagement opportunities across all available channels and touch points on their journey.

2. Why is this so important?
This new reality is blurring boundaries between marketing, sales, customer service, and IT, requiring an end-to-end approach that will transform the entire organization, rather than merely adding incremental online revenue. This is critically important considering the implications on three key components: role of content, definition of community, and evolution of marketing approach.

Branded content is the new advertising. The development of the right content by touchpoint is key to driving conversion along the entire consumer journey, from basic product information to brand campaigns. Most importantly, it's critical to understand how content and the role of the touchpoint are changing.

Our definition of "community" has changed as well. We have seen that community is no longer a place where people gather around similar interests, but rather something that forms temporarily and elastically around content people share similar interests in.

Last but not least, the marketing approach needs to evolve to smarter brand campaign content, complementing the traditional agency model with a faster go-to-market model built for more intelligent, higher quality content creation and distribution. We've found this in both agency partners, like Deep Focus and its DFx platform, and new content partners (e.g., BuzzFeed, Tastemade), who are changing the rules of the game. They offer not only more collaborative content production, but guaranteed targeted distribution and engagement at scale as part of a turnkey offering.

3. How will the customer experience be improved by this?
In this changing environment, the integration between marketing and technology will allow brands to build a deeper relation with consumers. This integration will make a significant impact by supporting the collection of consumer data, mapping of consumer profiles, and building lookalike models to amplify campaign effectiveness. This offers new possibilities to build more valuable brands and businesses by personalizing the consumer experience. Now marketing is not a sequence of different campaigns but an integrated and automated journey to better satisfy consumers' needs.

At Nestlé Waters North America, our approach is to offer consumers a unique and complete set of omnichannel solutions aligned with their needs by offering the ideal product assortment in-store, e-retailer content to overcome online shopping barriers, content worth sharing in their social channels, and delivery directly to their home with "Ready Refresh," our direct-to-consumer business.

4. How will this improve the effectiveness of marketing?
This renewed digital approach, enabled by marketing cloud technology, will allow brands to amplify their marketing efforts beyond the main campaign. Marketers now have the opportunity to proactively engage with consumers on social platforms and to build additional consumer journey and content based on online consumer behavior amplifying campaign results.

To improve marketing effectiveness and capture this opportunity, there are three key enablers for success:

• Manage digital operations end-to-end by integrating digital, social media, and e-commerce into an e-business organization unit. This combines different teams with complementary roles and one common denominator: a relentless focus on the consumer journey.
• Accelerate a shift to digital media vs. traditional media in accordance with the opportunity of each brand's consumer targets
• Adopt a "learning by doing" approach. Accelerate the speed to market and not worry too much about perfection, but, rather, place emphasis on speed.

Bonus: Favorite activity outside of work?
Traveling and enjoying time with my lovely wife and my daughter.

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