Disney Finds Magic In Reciprocity Marketing

A healthy change is taking place: Consumers are demanding that brands engage them in conversations versus one-way blasts.

But for this to be effective, both consumers and marketers have to change previous behaviors.

» Consumers have to recognize that to receive more relevant and personalized communications, offers, and experiences, they need to provide deeper personal or business information.

» Marketers have to recognize that to competitively differentiate, they have to provide significantly more personalized communications, offers, and experiences. However, true personalization is based on much more than traditional transactional data. Marketers must earn the right to collect increasingly deeper levels of preference-based data.

How is this accomplished? With trust. According to the 2014 BrandSpark Most Trusted Awards, “Across categories when considering [a] purchase of a new product, shoppers consider it extremely or very important that it comes from a brand they trust.”

Trust is the basis for obtaining deeper engagement with customers. It is a cycle:

• Trust makes customers receptive to a reciprocity-based exchange of data in order to receive enhanced experiences.

• The improved customer experience reinforces trust.

• That, in turn, enhances trust.

• Now customers are more motivated to provide deeper additional information.

• Marketers can now engage customers in a deeper level of reciprocity-based interaction.

• And the cycle continues, based on ever-deepening personalization and value.

An exciting example of reciprocity-based marketing is Disney’s MagicBand bracelet app. In return for the collection of consumer data, Disney offers guests the ability to “enter the parks, unlock Disney Resort hotel room[s], and buy food and merchandise. Plus, [the] MagicBand gives FastPass+ access to all the experiences selected online.” Users of the band and app can receive an email or text message about availability of reservations or rides noted as being preferred experiences.

In terms of data collection, MagicBands link electronically to an encrypted database of visitor information. The bands contain a radio frequency identification (RFID) chip that allows for the collection of intelligence that is coupled with guest input into the My Disney Experience app and Web site (input is voluntary.) All of this data gives Disney valuable information about customer preferences, which are then used to provide high-value experiences.

The Disney value proposition is in sync with findings that have emerged from Relationship Research our firm has conducted regarding what customers expect in a reciprocity-based relationship:

Trust: The marketer can be trusted to deliver on a fundamental brand promise.

Listen: The brand will listen to customers’ needs, suggestions, and concerns.

Deliver: The brand will provide communications and experiences relevant to customers based on their individual preferences.

Key Takeaways

Following are four key takeaways for implementing reciprocity-based marketing strategies:

• It is not customers’ responsibility tell marketers what they want. Marketers must ask--and then respond with reciprocity-based customer experiences based on feedback.

• Competitive differentiation is rooted in the ability to deliver offers, communications, and experiences based on the exchange of deep customer data and preferences.

• Multichannel reciprocity-based marketing addresses the customer experience across all touch points, departments, locations, and company levels.

• A high value, reciprocity-based customer relationship needs to be maintained throughout the life cycle of the customer, not just during the points of initial sale or add-on sales.

5 Tips for Using Customer Data to Deliver High Value

Customers have learned that in order to have a more customized experience they need to provide the data to drive those high-value communications and experiences. However, the burden is on marketers to become better in delivering on that expectation in order to give customers a reason to supply the necessary data.

In a recent study by Consulting firm Emnos, it was noted that shoppers want relevant solutions – tips and advice that will simplify their lives, save on time, and deliver information. However, 83% feel that retailers are not providing sufficient information and resources.

This should be a wakeup call to marketers to do more than just collect data. They should use customer information to provide a clear and obvious improvement in the customer experience.

This fact is reinforced by a recent survey from data insight company ClickFox, which stated that about 32% of consumers said they're most willing to share personal data if they feel loyal to a brand.

Data influences every decision that Avis Budget makes, from product, to distribution, to communication.

With records from 40 million customers, finding data to analyze wasn’t an issue, it was how to structure the use of data that was the challenge. Understanding the value of the “total” customer through data helped the company to determine communication strategies and helped to differentiate customer service solutions.

Jeannine Haas, CMO, Avis Budget Group stated, “...we look for ways to infuse the customer experience with data… It helps us organize our contact strategy..., which in turn increases [its] effectiveness ... The most critical achievement of the project may be the “single view” of the customers...Information is consolidated into a web-based dashboard that the front-line customer-facing employees can access.”

The company used data technology to get a single 360-degree view of its customer by applying a segmentation strategy called 'customer lifetime value.' They looked for ways to infuse the customer experience with intelligence Tim Doolittle, vice president of CRM, Avis Budget noted that “Differentiation today is based on customer service and customer experience... We lacked an organized process and analytics infrastructure to leverage our data assets, to improve marketing ROI and the customer experience and to drive long-term customer value...”

“...We've added win-back and peer prospecting for a total of six segments, and that's how we organize our contact strategy group. That approach has increased the effectiveness of our contact strategy, in many cases above 30% over control.”

5 Takeaways for Using Customer Information to Drive High Value Customer Experiences

1. Use Data to Provide Useful Information - Make it easy for shoppers to understand that you’re collecting data in order to give them a better experience.

2. Use Data to Solve Problems - Identify issues and solve problems based on customer input and customer communications.

3. Positive Experiences Drive Customers to Share Data - Marketers need to continuously provide excellent customer experiences because this is what proves knowledge of customers as more than a transaction--but as a person.

4. Use Data to Actionably Improve Customer Communication - Due to lack of customer insights companies are often only able to provide generic responses, leaving the customer feeling more frustrated. Personalize communication, responses, and experiences.

5. Don’t Just Collect Data ... Use it as a Tool - Look beyond the last click, or the most recent search, to provide an experience that covers a consumer's entire purchasing journey.

Transforming Intrusive Customer Tracking to Valued Information Exchanges

The Challenge: The bad news is that consumer resistance to unauthorized data tracking is growing. The good news is that many consumers understand that in order to receive more targeted and relevant communications, they need to provide companies with more of their personal information.

Extensive research conducted by our company, ERDM, over the past 12 months has shown that BtoB and BtoC customers are willing to provide in-depth information if they see the value and are assured of improved levels of personalization and customer engagement. This research finding has emerged so consistently that we refer to this as the Reciprocity of Value Equation. This fundamentally reframes data privacy concerns as a beneficial exchange of information that improves the customer experience.

Furthermore, customers have said that they will update and refresh their information as long as they keep receiving value from marketers. Therefore the significant takeaway for marketers is that:

» BtoB and BtoC customers will supply deep levels of information if they trust the brand and see value.
» Consumers will actively opt-in to sharing detailed personal preference information in exchange for the marketer’s promise to deliver relevant information and offers.
» Marketers need to understand how their customers define the Reciprocity of Value Equation with their company.

CVS-Caremark, a 2013 Apex Customer Award Winner understands the power of providing value in exchange for personal information and responsible behavior tracking.

They worked hard to improve consistency, reliability, and accountability in Member Communications – both across the organization and within the communications sent to Members. This heavy emphasis on putting customer needs front and center boosted CVS’ revenues in the pharmacy services by 7.2% to $11.5 billion, and in the retail pharmacy segment by 13.9% to $13.5 million.

This growth is due in part to a benefit-based reciprocal data exchange with customers.

• Within the Pharmacy “Information center” are details of all current and past prescriptions filled by a family at CVS. It allows subscribers to monitor all medications with pictures of each pill, dosage, refills remaining, and which medicines are due to be refilled or need a renewal prescription.

• Customers can order refills online and be altered to pickups by email, text, or both.

• Subscribers have one loyalty card and login to the prescription and retail sections of the stores, allowing them to add reward points for future discounts in both areas of the store.

• CVS sends personalized emails to members based on their current point levels and past buying history.

Takeaways

1. Customers want to be reassured that when they turn over their personal information, it will be used responsibly and for their benefit. Companies that reward customers for data by providing relevant offers and enhanced customer experiences will gain loyalty because customers expect a reciprocal value exchange.

2. Have an action plan for how you will use this precious customer data. If customers do not see obvious and immediate benefits from providing their information, not only will they unsubscribe from the service, they may also stop being a customer.

3. Understand what questions customers feel are appropriate to ask...and at what points in the lifecycle. Increasingly deeper levels of information must be earned.

New Value Exchange: Preference Info to Drive Personalization

THE CHALLENGE: Consumer frustration with Opt-Out marketing policies is growing; marketers need to convince them to share information regarding their preferences in exchange for a valuable, personalized relationship.

Unfortunately, Opt-Out Is the New Norm

There are now over 200 million numbers listed on the National Do Not Call Registry. Moreover, a number of states have introduced “Do-Not-Mail” bills and the topic of “Do Not Track” legislation is red hot. Overseas, governments are taking even more drastic actions. For example, the Italian government banned all unsolicited mail, phone, email, fax and mobile communications.

As consumers find more ways to avoid unsolicited marketing communications, panicked businesses are responding by creating opt-out relationships wherever they can. This is the wrong approach.

Customer Frustration is Growing

Today’s empowered consumers are questioning why the burden should be on them to Opt-Out. In fact, prominent Opt-In campaigns have resulted in enthusiastic customer response. Consider the case of comedian Louis C.K.

In recent years, Louis C.K. has risen to prominence as a stand-up comic, an actor, and, with his show Louie, a writer, director and editor. And with his self-produced and distributed “Live at the Beacon Theater” video, he’s setting an important example for online marketers. Rather than forcing his consumers to Opt-Out, he asked them to Opt-In—in a prominent, tongue-in-cheek way:

“I’m going to be offering other things through this site. Would you like to hear about them?

- Yes, I’d like to receive further emails about Louis C.K. things.
- No, leave me alone forever, you fat idiot.”

The latter was selected by default. The customer response was unequivocal: “‘Opt in’ as the default is such a minor thing, but it makes people feel good.”

Create a Reciprocity of Value

Rather than making “Opt-Out” the default, marketers should compete to engage consumers with compelling value propositions that motivate them to Opt-In.

The most compelling value you can offer is relevance. Consumers are eager for meaningful personalization. The challenge for marketers is to make them aware that, in order to receive or access increasingly relevant information, consumers must share increasing amounts of information regarding their preferences.

Microsoft used Voice of the Customer (VoC) research to create a highly personalized experience in their Business Resource Center, which asked over 14 detailed business questions in order to deliver targeted and relevant information. As a result, they have achieved opt-in rates as high as 95 percent.

3 Takeaways for Marketers

> Create a Reciprocity of Value
Consumers opt-in to share increasingly detailed personal preference information in exchange for marketer’s promises to deliver relevant information and offers.

> Opt-In Is Not About Passively Agreeing to Receive Email
It’s about actively opting-in to a relationship and self-profiling your preferences and aversions.

> Consumers Are Eager to Tell You How They Want to be Treated
The key is to ask.