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.