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.