Why You Need Human Data For Real Customer Engagement

Article by Ernan Roman
Featured on Forbes.com

A cataclysmic shift is occurring in BtoB and BtoC marketing. Customers are ignoring generic messaging and demanding personalized and relevant communications based on their individual preferences.

Based on research findings, the good news is that customers and prospects are willing to provide personal or business information in exchange for more personalized offers, communications and experiences.

Marketers must meet these consumer demands by transitioning from impersonal transaction-based marketing to highly personalized, preference-based, experiences.

The Reciprocity of Value Equation

A profound finding has emerged from more than 12,000 hours of Voice of Customer (VoC) research our firm has conducted for companies including MassMutual, IBM, Norton AntiVirus, QVC, NBC, Microsoft and Songza. Notwithstanding privacy concerns, BtoB and BtoC customers are willing to provide detailed information in exchange for increased value and relevance.

To satisfy these demands, marketers must adopt transformational strategies that recognize the value of human data; true personalization of communications, offers and experiences driven by deep opt-in individual preference information provided by customers in exchange for receiving unprecedented levels of preference-driven personalization.

We call this the Reciprocity of Value Equation.

Customer Reciprocity: Recognition by customers that to receive more relevant and personalized communications and offers, they need to provide marketers with personal or business preference information.

Plus

Business Reciprocity: Recognition by marketers that they have to provide significantly more personalized communications and offers. To be truly personalized these have to be based on more than just transactional, overlay and inferential data.

Plus

"Human Data:" BtoB or BtoC opt-in self-profiled information regarding key issues, needs and expectations; decision-making process, messaging and media preferences; self-described personality types/attitudes/life stages.

Equals

Customer Experience Transformation.

But, Marketers Have to Earn the Right to Request Human Data

By earning trust through value propositions that motivate customers to opt-in and provide deep preference information, marketers will create a high quality database of responsive customers who truly want your messages.

Based on the VoC research findings, customers (BtoB and BtoC) confirmed that human data has to be earned by going through specific steps that comprise a Pyramid of Trust:

•	Do what you promised: Deliver on your fundamental brand promise.
•	Treat me fairly: Fair pricing and customer service policies.
•	Protect my information: Explain the reasons for the opt-in information requests and assure me of the privacy and safety of my data.
•	Improve my experiences: Use my stated preferences and aversions, to significantly improve my experiences.

Gilt Earns Trust and Engagement

Gilt, a top internet retailer, has used high levels of personalization to deliver relevance and drive engagement for both new and existing customers. Results of these efforts have included increased orders, decreased email and mobile push notification unsubscribe rates and boosted higher repeat-purchase rates.

According to Welington Fonseca, VP of marketing and digital analytics, “Gilt’s commitment to a personalized experience is evident when customers return to the home page of the web site or mobile app. Sales within the store (men, women, kids, home) with the highest affinity to a consumer’s past behavior and preferences (browse, purchase, favorite brands, wish list) are presented at the top of their home page with all other sales ranked according to relevance based on previous shopping behavior and collaborative filtering.”

Another example of personalization is “Your Personal Sale,” which displays the most relevant brands and products based on shopping patterns and self-stated preferences and provide Gilt with another way to interact with the customer to understand preferences in order to further refine their personalization algorithm.

According to Fonseca, “All communication is personalized, with the company sending [more than] 2,500 versions of personalized emails and mobile push notifications on a daily basis, eight times per week. Results have been a double-digit increase in orders and reduction in email and mobile push notification unsubscribes.”

Five Takeaways:

1.	Differentiate your business by providing highly personalized communications, offers and experiences.
2.	True personalization must be based on preference-based “human data,” not just traditional inferred or transactional data.
3.	The right to ask for increasingly deep levels of preference-based information is not a “given.” It must be earned.
4.	Deliver clear and obvious value based on preference information.
5.	Customers see reciprocity as a valuable exchange of information that improves their experience.

3 Questions You Need To Ask Now For 2015 Success

Article by Ernan Roman Featured on CMO.com

Right now is the time to re-evaluate your marketing in terms of the new expectations your customers have developed in the past 6 months. What new insights are they providing regarding what they want—or do not want—from your customer experience, communications and company interactions?

Here are 3 key questions to ask right now. The answers will ensure that you take the smart actions for success in 2015.

1. Are You Ignoring Key Customer Segments? 
You could be missing out on new business because of perceived brand positioning. Take stock at year-end to audit your overall brand message and determine whether it is moving you toward your full potential--or limiting your growth.

Case in point: Buffalo Wings & Rings, a chain of 55-plus sports restaurants in the U.S. and abroad, has spent the past couple of years refining its image and brand appeal to women and families in order to reach a larger universe of customers.

As part of that effort, the brand embarked on a total redesign of its locations. Specific changes included soundproofing the restaurant area to reduce noise from the bar, where sports events are broadcast; adding cushions to seats and benches for more comfort; and relocating games for children away from the front door and the bar area.

In addition, Buffalo Wings revamped it Web site to give customers the ability to interact, get information, and become part of a community. "We wanted to create a new experience for the sports and wings category... Your brand is created by customers and how they use you," said Buffalo Wings chief executive Nader Masadeh. Added Diane Matheson, director of marketing, "[We] wanted to refine the brand and strengthen the concept with a distinct point of view." Results: This year sales have grown 12.5 percent to $72 million. Next year, the company plans to add up to eight new stores in the U.S. and 10 overseas.

2. Are You Communicating Effectively?
Different types of customers have different preferences for communication. Just because you have a communication method available does not mean it’s the best option for your core customers. So pause now to challenge your assumptions regarding content, clarity of communications, sales channels, and preferred customer media. This will provide insights regarding key improvements for 2015.

Also, consider: Per Voice of Customer research conducted by our firm for client MassMutual, the majority of customers indicated that they want proactive and customized communications that are personalized by their needs and life stage.

Case in point: Multibillion-dollar telecom service provider CenturyLink needed to understand why its call centers were receiving such a high call volume. It discovered that its own processes required customers to call multiple times to establish or modify service. To solve this pain point, CenturyLink revamped its processes. It also developed a new system, called Digital Dialogue, to integrate more than 35 disparate systems from multiple communication channels, and transformed the CenturyLink Web site into a seamless self-service experience.

“We’re trying to give customers better information. ... If we can give customers information before they have to ask for it, they feel that we’re having intelligent dialogue with them, and that we’re on top of things,” noted Lindsey Pardun, IT principal architect at CenturyLink. “And if we do need to talk to them, we can have a much more efficient conversation.”

Results: In the first two months after the launch of Digital Dialogue, 187,000 calls were automatically routed to the right agents.  

3. Do You Have An Effective Retention Strategy?
A recent Retention Science study noted that only 23% of marketers track the rate at which customers churn, less than 40% track customer lifetime value, and, not surprisingly, 70% believe their retention marketing efforts are average, poor, or need improvement. In dollars and cents, an Adobe study found that online retailers would double their revenues if they retained 10% of their existing customers. Instead, 80% of marketers were using their digital marketing budgets to acquire new shoppers.

Case in point: Groupon realized that its initial business model of daily deals and a bombardment of email with heavy discounts did not turn out to be a sound strategy. To better retain customers and give them a reason to come back, the company had to rethink its relationship with both its business partners and end-user consumers.

Groupon is now focusing on its online marketplace, reducing reliance on email, and improving relevance. It encourages subscribers to search for deals and explore its marketplace (a pull strategy) instead of relying on email (push strategy).

The company is also creating a tablet-based operating system for merchants called Gnome, which empowers it to improve customer retention by better managing transactions, keeping track of customers to launch specific marketing campaigns, and simplifying the whole process of redemptions.

While the company is not out of the woods yet, its efforts are paying off. Groupon saw 23% revenue growth to $751.6 million in Q2 2014, with a 29% rise in global gross billings. The total active customer count rose by 25% year-on-year during the quarter, with North American customer count rising by 18%. The North American transactions percentage resulting from search was 24% in the third quarter, compared to 9% in the same quarter last year.

TakeawaysThe needs and expectations of your customers are changing with astonishing velocity. Now is the time to:

• Investigate where your missing opportunities are hiding, and develop new strategies and methods of presenting your company to new customers.
• Understand whether your communication avenues are effective and make necessary changes to embrace customer needs and resolve pain points.
• Strengthen your customer-acquisition plan. Don’t rely solely on recruiting new business.

Use these final few weeks of the year to reflect on how much you don't know about customers’ evolving needs and what you must change to maintain relevance and competitive differentiation. Use multiple methods to learn from the voice of your customer and then act on those insights. The wisdom of the customer is unfailingly correct.

Preference Centers: Are CMOs Overlooking Their Importance?

A good preference center is akin to a good first date. It is all about initial appropriateness, understanding, and communication. Once accomplished, you have earned the right to a second date and deeper levels of discussion.         

“Is Your Preference Center Hurting Your Customer Experience?”--the first article in this two-part series--discussed why marketing executives should be concerned about the role of preference centers in enabling their companies to capture the deep customer insights necessary to drive personalized communications.

This article focuses on recommendations from CMOs and senior execs regarding preference center functions and experiences that are critical--whether you are about to build a new center or make improvements to an existing one.

Before You Invest. . .Research When Thomson Reuters decided to build a preference center, research was its first step. “We did market research ahead of deploying our new email preference center,” said Diangelo Tyler, Thomson Reuters’ director of online marketing. “Our objective was to determine what was most important to the customer.”

Tyler offered the following tips:

• Do your homework prior to building the preference center. Refined requirements are the key to success.
• Seek answers to the tough questions.
• Keep in mind that the preference center is for the customer, and they hold the power of voice.

Don’t Be Afraid Of Opt-Outs
Tyler went on to discuss a topic noted by many of the CMOs who my company, ERDM, interviewed while preparing this article. “It’s better to be transparent and open about your intent. It was critical that we make it as quick and simple as possible for our customers to manage their preferences and [for] marketers to get access to their permissions,” he said.

Many marketers shy away from creating truly customer-focused preference centers because they fear mass opt-outs. However, giving customers the ability to provide you with their preferences regarding communications and experiences actually provides you with a powerful competitive advantage.

Per findings from our Voice of Customer Relationship (VoC) research, customers and prospects consistently stated they were willing to provide trusted brands with deeper levels of information in exchange for more personalized information and experiences.

B2B and B2C consumers cited that willingness so frequently we gave it a name: the Reciprocity of Value Equation. Following are some key VoC findings regarding Reciprocity of Value:

• Consumers recognize that to receive or access relevant information, they must provide preference information.
• If they trust the brand and receive a useful value proposition, then consumers will opt-in to sharing increasingly detailed preference information.
• Reciprocity is seen as a valuable exchange of information. This information will constantly change, grow, and be enriched through ongoing interactions with consumers.
  
• This customer-driven information exchange results in uniquely accurate databases that consistently achieve 25 percent to 50 percent increases in revenue.

“The key is to establish an ongoing dialogue with the customer. As they give personal information to you, they are building a relationship with your brand,” said Jennifer Downes, director of direct response marketing at Lenovo NA. “Critical to the learning process is the level of engagement that a customer has with your preference center. The customer must perceive value in your preference center so they proactively update their preferences as they evolve in their journey.”

Another issue marketers face in this space is compliance. “We have to comply with telemarketing regulations and the new cell phone rules, so we’ve used this opportunity to build customer preferences for phone contact,” explained Jane Bulman, VP of telesales at Comcast. “We ask them and are transparent about the benefits of future calls--special offers and notifications about new products, for example. Over 70 percent who purchased previously said, ‘Yes, contact me again.’ If we ask how customers want to be contacted--and for what purposes--we gain marketing efficiency, customers welcome the call, and we follow the law.”

Preference-Based, Not Transaction-Based, Data Is Key It is important for executives to realize that transaction-based spray-and-pray blasts are causing significant damage to their brands. Irrelevant communications are training customers to associate their e-mail and direct mail with “delete” or “throwaway” behaviors.

Per our VoC research findings, consumers believe that transaction-based data is inadequate and an inaccurate indicator of their true preferences regarding future communications they would consider relevant. They stated repeatedly that they want brands to treat them “as more than just a sale.”

Rather, they want relevant and engaging communications:

• “I want more than just buying history-based e-mail.”
• “With today’s technology, I expect the experiences and e-mail to reflect my preferences.”
• “I think being able to select just what I’m interested in would be very helpful. It would mean a lot less searching on the Web site and a lot less email I don’t usually open anyway.”

Key Takeaways

Following are recommendations regarding what you need to consider in order to develop a high-quality preference center. These were provided by Scott Frey, a preference management innovator and president and CEO of Possible Now, which provides enterprise preference management solutions.

Tip 1: Account for all of the systems currently in use to collect and store preference information from customers. There are multiple touch points--e-mail, mail, point of sale, social, and mobile--that must be taken into account to ensure the preference center is as comprehensive and effective as possible.

Tip 2: Understand the business rules and needs of the business owners. An effective preference center must take into account all of the existing business rules and needs of the business owners who are impacted by the data collected by the preference center. Bringing those parties together early and keeping them informed throughout the build of the preference center is crucial.

Tip 3: Start with the end in mind. Creating a plan for how the information collected through the preference center will impact marketing campaigns and customer correspondence assures that all of the right elements are accounted for in the preference center and provides a guideline for reporting.

Tip 4: Viewing from the customer’s perspective. Companies must think about building preference centers from the customer’s (user’s) perspective. Avoid internal language and make sure the preference choices are clear and descriptive. The content within the preference center is important to the center’s effectiveness in decreasing opt-outs and increasing opt-ins.

In conclusion, keep in mind that preference centers enable you to deliver truly personalized offers, communications, and experiences. These, in turn, will drive significant increases in response to cross-sell offers, new product introductions, and loyalty-building initiatives.

“As our markets become increasingly fragmented on interests and needs, delivering the right message at the right time in the right way will be impossible without a solid preference management practice,” said Denice Hasty, Comcast’s SVP of consumer marketing.

Is Your Preference Center Hurting Your Customer Experience?

Feature story from CMO.com

“I’m in a cold sweat.” So began the call from the CMO of a prominent Fortune 100 company. “We’ve invested millions in new customer engagement technology and just realized that we never actually asked our customers how they define more relevant communications and experiences.”

Perhaps you, too, have had the awakening that the yield you’ll receive from the millions invested in new technology rests on your ability to deliver a personalized, preference-based customer experience. Research conducted by our firm, ERDM, for clients such as IBM, MassMutual, QVC, and Norton AntiVirus indicates that for many consumers--B2B and B2C--preference centers presumably designed to engage them are, in fact, alienating them.

This article, the first installment of a two-part series, provides insights regarding the special role preference centers play in enabling companies to capture the deep preference information necessary to drive truly personalized communications. Unfortunately, many brands are falling short. While conducting our ERDM VoC research, customers told us they are not receiving the expected value from preference centers. Among their statements:

» “Misleading--they are focused on the company’s sales goals, not on learning the customer’s preferences.”

» “They’re not focused on my preferences. The focus is on the stuff they want to sell my company.”

A summary of findings indicates that many preference centers don’t provide a resource that is:

» customer-focused

» comprehensive across different product lines and channels

» easy to find, use, and update as customers’ needs change

Insights such as these are helping CMOs and CIOs realize they need a far deeper understanding of how customers define preference-driven engagement. This includes understanding how customers define a value-based relationship with their brands, personalization, and appropriate questions to ask regarding their preferences.

The Only Votes That Count Come From Your Customers And Prospects

For today's empowered consumers, personalization is a basic expectation. To achieve this heightened level of personalization, more accurate customer data is required.

“For customers, the preference center is the mechanism to voice how they wish to interact with a brand. For marketers, it allows them to develop a deeper understanding of their customers,” Jennifer Downes, Lenovo NA’s director of direct response marketing, told me. “That said, the reality is that marketers as business people have metrics to meet, which may be at odds with providing the best customer experience. The key to success is for the marketer to find creative ways to meet these metrics without creating a conflict with the customer's desire for relevant engagement.”

Added Diangelo Tyler, director of online marketing at Thomson Reuters: “Keep in mind that the preference center is for the customer, and they hold the power of voice. The criteria for a truly customer-centric preference center is simplicity. As marketers we must honor the choices of our customers if we want to keep them engaged from that point forward.”

Satisfaction A Given--Engagement Now The Critical Differentiator

Our VoC research also indicated that relevance and personalization is viewed as a service and benefit, not just a sales tool.

“As marketers, more relevant, preference-driven communication ensures greater audience engagement and maximizes marketing efficiency,” Denice Hasty, SVP of consumer marketing at Comcast, told me. “I think governance and vetting the strategy and tactical plan across multiple business functions is key. Strong execution requires maximum coordination. One misstep can cause a really bad experience.”

B2B and B2C consumers understand that in order to receive more relevant information, they need to share personal information. Among ERDM clients, we have witnessed preference-based engagement drives consistent double-digit increases in response, revenue, and customer lifetime value.

Takeaways From Execs Who Have Been Through The Preference Center Experience

In summary, customer-focused preference centers are essential for encouraging customers and prospects to opt in and provide deep preference information. This also provides marketers with unprecedented amounts of rich and accurate customer data, which will drive dramatic increases in response, revenue and customer engagement.

Here’s what we’ve been told:

• Lenovo’s Downes: “It’s critical that we enter into the process with an open mind, accepting that we don’t have all the answers. We must be diligent in asking questions in an unobtrusive way and be willing to let the customer guide us in formulating a customer-centric preference center.”

• Thomson Reuters’ Tyler: “We did some market research ahead of deploying our new email preference center. Our objective was to determine what was most important to the customer. Simplicity was the conclusion. It was critical that we make it as quick and simple as possible for our customers to manage their preferences and marketers to get access to their permissions.”

• Comcast’s Hasty, SVP: “We are just scratching the surface of what we can do in this space. As our markets become increasingly fragmented on interests and needs, delivering the right message at the right time in the right way will be impossible without a solid preference management practice. Online, we believe in a value exchange–the best offers online to our most engaged online audiences, which also provide the best progressive profiling data to act upon in future interactions.”

In my next article, I’ll focus on specific tips and recommendations from CMOs and senior execs regarding preference center functions and experiences that are critical whether you are about to build a new center or make improvements to an existing preference center.

Pizza Hut: Preference Driven Communications and Pizzas

The Challenge: Many companies capture large quantities of customer data. But few use the data to deliver a competitively differentiating customer experience.

Pizza Hut is asking customers to provide their preferences and using that information to deliver preference driven communications and pizzas.

Recently, Pizza Hut shifted to more personalized customer interactions by segmenting its customer base into 6,000+ groups based on characteristics, purchase tendencies, and behavioral indicators. Juliana Lim, Senior Marketing Director for Pizza Hut, says, "We now run targeted campaigns built with intelligence around customers' preferred product categories, typical purchase times and channels of choice”. 

Here’s an overview:

	Pizza Hut provided customers with a registration process to define their personal communication and pizza preferences and delivery instructions.
	Customers can order online, via traditional call-in, via a mobile site, and even via an ordering app on an Xbox 360® system.

Online registration allows customers to get exclusive deals, save “fast favs” for quick reorders, and even set pre-orders for up to 7 days ahead.

Compared with Pizza Hut's former bulk promotions, this new preference driven communication process has generated:

	A 200% jump in average campaign hit rates across customer segments,
	A 38% improvement in Pizza Hut's customer retention rate,
	A 9% increase in customer visit/purchase frequency in just seven months,
	Up to 6% extra sales generated every month since the program started.

Findings from research conducted by our company ERDM, indicate that today’s savvy online shoppers understand that in order to receive more personalized offers and communications, they must provide more detailed personal preference information. If they trust the brand… they are willing to provide preference data in order to receive a significantly improved customer experience.

Additional research findings regarding preference based engagement and why consumers see it as a benefit:

	They receive fewer communications that are not relevant.
	Provides the flexibility to change their preferences as their needs or situations change.
	Increases their awareness of product, offer and ordering options.
	Allows them to spend less time looking for products.

Takeaways

» Personalization is perceived as a service. Customers want the ability to set personalization preferences. So, tell your customers that true personalization is available and the benefits they will experience.

» Customers want to be involved in their experience with your company. Customers want to contribute to, and define their relationship with your company. Make it easy for them to do so.

» Consumers recognize that in order to receive relevant information, they must share increasing amounts of information regarding personalization and preferences. By providing a way for customers to tell you what they want from your company they will be more likely to open, engage with, and respond to, communications and offers.

Delta; Preference-based Offers for Friendlier Flying

The Challenge: The airline industry has been fighting passenger negativity regarding a barrage of fees for services that were once free and taken for granted. Now airlines are following the path of retailers and using consumer preference data to create brand new personalized (fee-based) upgrades.

Airlines are learning what Voice of Customer research has shown time and time again—traditional transaction-based data is not sufficient to drive the level of truly personalized, preference-based, experiences and offers that consumers (BtoB and BtoC) now view as valuable and competitively differentiating.

Listening based on customer signals is key. Companies need to utilize information from analytics, customer-volunteered preferences, behavioral-inferred preferences, and triggers in order to develop personalized product/service offerings.

ERDM research indicates in order to offer consumers a valuable preference-based experience companies need to fully understand:

» Customer’s preferences
» BtoB and BtoC customer usage of products and services
» Customer purchase intent and decision behaviors

» Where a customer is in their BtoB or BtoC lifecycle relative to the product/service
» Appropriateness and acceptability of upsells/cross sells.

Delta Airlines has made a big push toward preference-based services. Delta CEO Richard Anderson noted that they have massive amounts of data, "We know who you are. We know what your history has been on the airline. We can customize our offerings."

Flight attendants will use on-board mobile devices to improve the customer experience:

» Offers per customer's preferences.
» Near real-time credit card processing for on-board purchases, including upgrades.
» Convenient eReceipts that can be emailed to customers.
» Customer's use of pre-paid credit cards for on-board purchases.
» Quicker transaction processing times.
» In the near future, the ability to read coupons displayed on a customer's mobile device.

Three Takeaways

1. Who are your customers? Categorize customers by groups based on when, why, and how they interact with your company and use your products. Understand unique group preferences and develop customer service, product suggestions, and communications based on their buying habits, perceived acceptable price points, and desired product upgrades/suggestions.

2. What kind of relationship do your customers want? Develop personalization data capture techniques via surveys, order-taker questions, and customer service calls in order to define customer preferences. Code the collected data by group segment so you have the actual answers needed to develop relationships, product offerings, and sales strategies based on customer requirements.

3. What is the actual customer experience your customers have now--and are they happy with it? If you do not have a real life view of what it is truly like to do business with your company from the customer perspective you will never know what to improve—or, how much more effectively you could be meeting their needs. Customers want be heard— so listen to their requests, suggestions, and comments. Monitor patterns in purchasing. Know what your “push back” points are from customers and know what they are willing to accept for a perceived value or benefit.

Preference-Driven Personalization; What Men’s Wearhouse Can Teach Us

The Challenge: Many companies are still not using preference based personalization. This compromises relevance and sacrifices engagement and potential sales.

40% of consumers say they prefer buying from retailers that cater to their preferences. According to research firm The E-tailing Group, respondents said they:

» Find it valuable if the retailer offers product recommendations tailored to their personal tastes and shopping histories.
» Purchase more often when retailers send e-mails that are personalized based on a shopper's past interactions.

One retailer who has embraced preference based personalization is Men's Wearhouse. With more than 1,100 stores nationwide, Men’s Wearhouse prides itself on providing personalized service to all of its customers. “Customer satisfaction is our highest priority, across all of our channels,” said Susan Neal, EVP, E-Business, Marketing and Digital Technology. “Just as our in-store tailors alter garments to perfectly fit each customer, we plan to deliver personalized emails individually tailored to each recipient."

• Men’s Wearhouse captures data from every customer touch point, mines behavioral signals using advanced predictive algorithms and overlays deep retail domain knowledge.

• They are extending their personalized experience to email as well.

• The company has in-store wardrobe consultants to help its customers. This service continues the online experience which offers a website for its full offerings as well as a separate website just for tuxedos by type of occasion. The Tux Sites features a dedicated Wedding Planner that can be contacted online or via an iPhone app.

• Overall Men’s Wearhouse is an example of a forward-looking retailer that understands the importance of delivering clients a consistent, personalized experience.

According to our firm’s VoC research on the Preference driven Reciprocity of Value Equation, consumers are willing to share personal preference information with trusted brands in exchange for “reciprocity of value” — in other words, receiving highly targeted and relevant offers and communications based on their individual preferences. This represents a powerful opportunity for marketers to transform how they engage with customers and prospects.

3 Research-based Takeaways

1. 59% of shoppers said that it is easier to find what they’re looking for when retailers personalize the shopping experience. So make it easy for your customers to find and buy what you have to sell.

2. 40% of consumers said they buy more from retailers that personalize shopping across all channels. So make sure your personalization experience extends to every aspect of your customer experience and interactions.

3. Retailers that remember the shopping behavior of individual consumers and use it to personalize future experiences are being rewarded — consumers are more engaged and purchase more. So be sure you have in place accurate and easily updated CRM practices and technology.

It's How They Want to Buy…Not How You Want to Sell

The Challenge: Companies that focus on what they want to sell — not how customers want to engage — miss the boat on opportunities to drive initial and ongoing sales.

Dunnhumby recently released results of its Customer Centricity Index (CCI) study which measured how well retailers are responding to the needs and wants of their customers — through the eyes of their customers.

The findings are important for all businesses wanting to better connect with customers:

• Companies with higher CCI scores tended to have higher long-term comparable sales growth over a two-year period.

• True understanding of what drives a customer to a brand is an insight that differentiates category leaders from competitors.

• A strong customer experience that meets customer needs had the strongest impact on customer centricity and highest CCI scores/rankings.

• Price was important to customers but was less about "lowest price" and more heavily tied to perceived value.

• Companies that provided the opportunity to give feedback and have interaction were rated higher.

One company that took on the challenge of developing a customer focused business strategy is United Airlines. Starting in 2010 during their merger with Continental they began to build richer customer profiles to increase sales opportunities.

United groups customers by behaviors, such as customers who have been price sensitive. They then use these insights to create more relevant offers such as sending frequent business travelers an offer to purchase an airport day lounge pass, etc.

The company overlays demographic and lifestyle data on customer records and groups them into customer types. United tries to include basic demographic information in each member profile such as age, household income, and net worth, and interest-specific elements such as members who enjoy playing golf.

United's new policies include customer centric actions such as these:

• When a customers is about to reach a milestone, a local representative delivers a hand-written thank-you card to the customer as they scan their boarding passes upon boarding.

• Segmentation that accurately groups customers by behaviors creates more relevant offer opportunities.

Since the initiative was launched, United has been able to convert 4 percent of its non-members to the MileagePlus program, resulting in tens of millions of dollars in additional revenue.

Key Takeaways:

• Show customers that you are "involved" in their buying experience with actions such as a reminder notice about a product or service based on previous behaviors, a thank-you note, a preview of an upcoming sale, a birthday incentive, etc.

• Show customers you are listening by conducting ongoing Voice of Customer-driven assessments of your business and marketing strategies to ensure alignment with customer expectations.

• Increase the frequency of database updates so they reflect the ongoing changes in customer’s needs. Update information regarding preferences, demographics, behaviors, sales purchase history, etc.

JC Penney: If you don’t listen to your customer...you lose

The Challenge: Few companies know as much as they should about their customers and their expectations for meaningful engagement.

Being arrogant in disregarding customer expectations is dangerous. This is a lesson JC Penney found out the hard way when sales dropped 25 percent in 2012.

This is reinforced by the Accenture Study on customer-centricity in which they noted, that for too many companies, providing a tailored experience is an elusive goal; “...failing to deliver a high-quality customer experience can result in a staggering erosion of a company’s customer base—a loss of as much as 50 percent over a five-year period.”

Some of JC Penney's missteps included:

•  Customers have come to expect promotions around holidays. But the company did away with these sale events. They are bringing back event promotions 26 times a year, often around holidays like Mother’s Day.

•  Customers associate a company with the merchandise or services they traditionally provide. When the selection changes, it causes confusion. JC Penney will be returning to basic clothing and favorite brands.

•  Knowing your customers means knowing demographic aspects meaningful to sales. The company switched its focus to a trendier, younger and generally thinner audience, alienating longtime Penney customers who could not find items to suit their size or style.

Penney has been hurrying to welcome back customers. A few weeks ago, it apologized to customers in an ad that said: “Come back to J. C. Penney. We heard you. Now, we’d love to see you.”It then ran a second ad thanking customers for returning. New marketing materials also specifically state, “you asked, we listened” as well as “you can have it all”.

5 Takeaways:

» If you think “the customer doesn’t really know”, stop! You disregard the wisdom and preferences of your customers at great peril! Your business starts and ends with the customer.

» Build your value promise around the wants of your customers. Then, put measures in place at every level of the organization to deliver on that promise.
Customers should have a consistent experience with every employee and every situation. And every employee should know what you have promised.

» When is the last time you really asked your customers what you could do better? Before you add, change, or “improve” anything, make sure it is something that will be wanted and embraced by the people who count; your customers.

» If you have not recalibrated your strategies within the past 12 months, you are likely out of date with the needs of today's rapidly changing and greatly empowered consumers.

» Constantly monitor customer service complaints and sales statistics to identify and quickly resolve “hot button” issues.

4 Tips for Earning Consumer Preference Data

The Challenge: Marketers everywhere are fighting an uphill battle: trying to deliver more personalized communications but lacking the accurate data to do so. Without that information marketers are still stuck sending ‘Spray and Pray’ blasts of email.

According to Toronto-based anti-spam filtering and web security services provider, Perimetic, “roughly 130 billion spam emails are sent, worldwide, per day, accounting for roughly 70% of global emailing activity.”

The goal of consumer-provided preference data is to deliver personally relevant offers, communications, and experiences. However instead of making consumers comfortable with sharing personal information, the ‘Spray and Pray’ practices of marketers have caused consumers not to trust them. This certainly applies to providing them with personal information.

Based on Voice of Customer research conducted by our firm, we have learned that there are 4 ways that brands can earn consumer preference data. These findings were consistent across B2B and B2C research.

4 Key Takeaways for Marketers:

1. Demonstrate to Consumers That You’ll Safeguard Their Information and Use it in a Responsible Way.
Successfully doing so requires that you follow two important steps:

•  One, promise consumers that you’ll safeguard their personal preferences by assuring them at each stage of the sign-up process and in all subsequent messages.

•  Two, follow through on that promise.

Violating these steps can do serious harm to brands. Conversely, demonstrating that you’re trustworthy will only help to strengthen the consumer-brand relationship.

2. Assure Consumers That “Responsible” Means That You’ll Never Rent or Sell Their Information to Third Parties.
This assurance cannot be subtle: it must be undeniable.

Email Marketing Services Provider, MailChimp, offers a great example of this. The message on their website support page is plain and unmistakable: “MailChimp does not provide, sell, share, or rent lists. Ever.”

It’s that kind of conciseness that puts consumers’ minds at ease. Do it.

3. Honor Consumer Expectations That Preference Data Will Be Used to Drive Increasingly Targeted Offers.
Aligning your brand with this expectation requires that you demonstrate your commitment to honor expectations from the outset of a relationship.

Boston Store’s Fashion and Sales News email sign-up form requests customers to provide the store with 10 essential preference criteria, thereby assuring customers that they’ll only receive relevant offers.

We applaud Boston Store for using detailed preference criteria to deliver a more personal experience.

4. Clearly Demonstrate to the Consumer That You’re Working to Provide an Improved Experience With Their Preference Information.
If value is not obvious, consumers will assume that you’ve betrayed their trust.

This expectation of relevance applies to both online and offline experiences and communications. Be sure that you’re demonstrating the value to the consumer consistently and over time. There’s a lot of bad history you need to overcome.

We urge you to test these 4 Tips. Per the experience of our clients, your customers will reward you with increased loyalty and sales.

Facebook, Twitter, and Google: Too Big To Care?

The Challenge: Major Internet companies like Google, Facebook, and Twitter have decided that customer service call centers are obsolete. Many customers disagree.

Last week, The New York Times reported on the fact that nearly all major Internet and social media sites, including Google, Facebook and LinkedIn, have done away with call centers altogether. "The companies argue that with millions of users every day, they cannot possibly pick up the phone."

Facebook's automatic phone message explains that they cannot provide phone support because they are an "Internet-based company." This claim neglects a crucial fact: there are no "Internet" companies. All companies must be multichannel.

The key to successful multichannel service and marketing is not just to deliver "the right message to the right person at the right time”, but to do it per that customer's media preferences. As we've repeatedly emphasized, "If you focus on a single channel at the expense of others, you're neglecting a significant portion of your customer base."

Single channel service and support is based on the assumption that most customers prefer email. As The Times wrote, " Voice calls have been falling out of fashion with teenagers and people in their 20s for some time (text only, please)." This assumption neglects a huge percentage of customers―and it's false.

As ExactTarget reported in their 2012 Channel Preference Survey, "consumers still do prefer the phone under certain circumstances. ... 37% of US online consumers told us that they’ll call a company when they have an issue with its product or service."

If Facebook, Twitter, Google, and LinkedIn keep their phones off the hook, they'll be neglecting over a third of their customers.

These companies were brilliant enough to create transformational services. If they cared enough, they would figure out how to provide high quality, affordable, live customer service.

KEY TAKEAWAYS FOR MARKETERS

» Multichannel businesses provide value to all customers.
Effective businesses serve all their customers, and that's not possible without multichannel service. Give customers a full range of options, including email, live chat, social media, F.A.Q.'s―and phone support.

» Phone support is an investment, not a sunk cost.
American Express has repeatedly demonstrated the tremendous value of engaging customers on the phone., For businesses to argue that they cannot "afford" to speak with millions of customers is to miss an opportunity to grow engagement and revenue.

» Support quality directly impacts customer perceptions and brand equity.
Studies and statistics aside, one customer The New York Times spoke with made the essential point. After failing to reach Twitter via phone for two days, he said, "The plain and simple fact is that they’re too busy or too important to talk to us." Brand perception doesn't get much worse.