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.

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.

How Viral Emails Can Drive More Sales than Promotional Emails

The Challenge: Viral emails can often generate greater response and revenue than sales-focused emails. Following are examples and tips for sending engaging/interactive emails that do not contain sales pitches or feature products.

Airbnb Case Study

The holidays are an important time for the travel company Airbnb. They recognized that holiday greeting emails are very common and devised a unique campaign. They developed a way not just to send a holiday message, but an interactive campaign that encouraged customers to send a thank you note to travel hosts that assisted Airbnb’s travelers during the year. The email was sent with the purpose of getting the audience to engage with one another, not to drive revenue.

Response and engagement rates were very strong:

• 52.3% open rate — up from the previous average of 27% to 30% on regular marketing emails.

• 26.5% click through rate — increase over the 8% to 12% on regular marketing emails.

• The subscribers who used the tool sent an average of 7.5 emails.

• Airbnb increased sales with 600 bookings as a result of this non-promotional email.

Career Builder Case Study

Career Builder tied in a very successful viral email campaign to their widely acclaimed Super Bowl ad featuring chimpanzees performing common office duties. The campaign was named Monk-E-Mail and uses personalization to engage email subscribers and ease of use to ensure follow through of customizing and forwarding emails.

The engagement and increase in the site’s popularity as a result of the campaign was staggering:

• CareerBuilder was rated the #1 career site.

• 29 million unique users visited the site within the first four months (25% increase in traffic); more than 55 million total visitors.

• More than 150 million Monk-e-Mails have been sent and played.

• 22% of message recipients went on to send their own messages.

5 TAKEAWAYS:

1. Timing is important. Airbnb is in an industry where travel is not an everyday event; the holiday email campaign was good timing because December is a time for travel or planning future travel.

2. Personalization is key. Airbnb pre-populated the emails with each customer’s bookings from the previous year and included images of each user’s profile, making it easy to send the message.

3. Be Humorous. As CareerBuilder showed, a viral email is your chance to lose the serious sales attitude.

4. Ease of Use is essential to enable a high volume of viral actions.

5. Do Not Muddy the Message. Once you decide to go non-promotional, do not include any promotional content. Concentrate on the focus of engagement.