How Apple iBeacon Will Transform Local Commerce

Overall, one thing is clear: mobile platforms are set to change the way we buy, transact and consume in our local environment.  Local commerce is a massive carrot for growth, a $1 trillion opportunity in the US alone. And somewhat ironically, it may end up being Apple’s “closed platform” which helps unify how online to offline commerce evolves, while fragmentation within Android actually slows adoption of these technologies down.

I am fascinated by this technology.  I never liked NFC.  I used it in the gaming industry to track bets on table games.  The chips were imbedded in the table chip and the antennas were placed under the layout.  It was so fickle.  Granted, it was new technology, but there were so many little nuances.  For instance, you couldn't have any metal anywhere around, or it could ruin the results.  The antenna had to be placed "just right" under the felt.

That's what I felt when NFC was touted as the payment mechanism of the future.  Anything you have to be so close to and there are many ways to interfere, that is not the future.  I can send a picture to my friend across the table, why do I need to touch my phone to theirs?  Same with payments.  If I have to take something out of my pocket or purse, how is that better than what we have today?  

Google Tabs happened, now marketers must step up their game

Marketing is always most effective when it is delivered with something else of value. If you open your postal mailbox and its nothing but ads, you tend to throw the whole bunch away. But, if one offer comes along with other interesting pieces of mail or if it includes something valuable like a gift card or a coupon, you tend to give it more attention.

Very profound statement.  It is not worth delivering a piece of mail or email without an offer.  The offer doesn't have to be something that cheapens your brand, but it has to deliver value to the customer receiving it, or else you will become junk mail or unsubscribed.

The new Gmail tabs obviously create an interesting challenge.  Even though they are being viewed less, it may provide customers a better way to interact with brands.  When all email is together, emails can get skipped or just ignored as they scan through.  However with the tabs, a customer has to be going and looking for a promotion.  Isn;t that what digital marketing is all about?  Engage with the customer when they want to be engaged, instead of the bombarding of their email feeds?

We asked nearly 5,000 consumers their attitudes toward the switch to Gmail Tabs inbox view. About 40 percent of respondents say they now spend less time with promotional messages from their favorite brand, while only 7 percent of users say they spend more time with promotions. This large percentage of respondents revealing they don’t spend as much time with their favorite brands shows that marketers must up their game.

Marketers should always be stepping up their game.  I get so many emails from companies on a daily basis, maybe this will make them stop and think about the "spam" strategy that seems to be the norm in this channel.  When emails are targeted and offers are valuable and thought out, customers will engage with your brand no matter what tab they are on.  Continue to over communicate and your brand will never make it out of the promotions tab.

The Three Tribes of Social Shopping

Do people share what they plan to buy, or buy what they share?

That’s the question my colleagues and I had to ask after discovering that a significant number of Pinterest users go on to buy the items they have pinned.  As we reported in Harvard Business Review, 21% of Pinterest users say they have purchased an item in-store after pinning, re-pinning, or liking it on Twitter, and 36% of users under 35 said they had done so. Look beyond in-store purchases, and the numbers are even bigger:

29% of Pinterest users have purchased something (in-store or online) after sharing or favoriting it on Pinterest

22% of Twitter users have purchased something after tweeting, retweeting, or favoriting on on Twitter

38% of Facebook users have purchased something after liking, sharing, or commenting on it on Facebook

Very interesting article.  What they still didn't answer is the act of sharing a driver?  Does the customer share because it is available to share or does the share drive a purchase? And the outcome is to monitor and ask a lot of questions from people who share your products on social media channels.  Sounds pretty pricey.  

For marketers, the opportunity of social lies in the ability to reach and inspire the “thinkers” and “leapers” — to find and drive sales from people who might never otherwise move from interest to commitment.

First you have to identify these people.  The key is predicting who is not going to purchase and nudge those potential buyers, that will optimize revenue.  If you nudge everyone with discounts or more ads, you might have just spent money on people who were already going to purchase. 

Marketing Automation with Neolane

Building a capture program is something that usually is untouchable with most marketing automation tools.  We built ours in 3 days with Neolane.  Very complex offers built dynamically based on previous behavior of redemption or no redemption.  Yet another tool I am becoming quite a big fan of.

How to Keep Your Customers by Thinking Ahead of Them

...more important to deepen your connection to your existing customers than to spend a lot of time and money trying to figure out why certain customers left.

That’s not to say that you shouldn’t care about losing customers. Customer attrition and churn can kill your bottom line. But once customers are gone, they’re gone. The best way to hang on to them is with a process I call “closing the backdoor.”

Great points in this article.  So many people focus on bringing a customer back, instead of focusing on keeping the customers you have.  The most profits to be made is by increasing the frequency of your current customers.  By striving to satisfy and get out in front of your current customers needs, you will have more current customers (because new customers will outnumber your churned) and they will be more frequent purchasers.

​

There are many lifecycle charts, this one is more transactional with each purchase.  For instance, in selling hotel rooms we have a much better shot at getting a guest to return if they are ready to return.  Any communication preceding that will usually be met with indifference.  It won't hurt the cause, but you likely won't get a booking either.  If you can send, i know this is going to be cliche, the right offer at the right time, you will increase frequency and redemption percentages.  ​

Marketers, Go Back to Basics

"There's so much that's sexy in social media and in mobile right now," he said. "Anyone who's bought a smartphone in the last 18 months is doing some things they hadn't imagined yet." When they read about a big company launching a cutting-edge initiative, they want in — but the economics usually only make sense for large companies that have experimental budgets. Instead, he says it often pays to focus on bread-and-butter marketing (like direct mail) or even on technical innovations of the past few years that are effective, but less novel (like mobile websites).

In the gaming industry, direct mail is still king.  In fact, it's not really close with a response rate of over 4X then email alone.  Yet, many marketers get caught up in the sexy new marketing trends.  Social gets more attention than direct marketing, even though direct marketing brings much more profit.  Likes are revered, yet direct mail is boring and so yesterday.  Sometimes whats worked in the past is what will work in the future.  

Best Time To Send Email

Interesting article on times to send emails.  The research included 21 million different emails and the findings are similar to what I have seen in my career.​

One of the most important conclusions is that sending newsletters during readers’ top engagement times of 8 a.m. – 10 a.m. and 3 p.m. – 4 p.m. can increase their average open rates and CTR by 6%.

However, optimizing email timing takes more than awareness of top engagement times. As our research points out, it’s a combination of many factors, including knowledge of time zone differences, your subscribers’ daily routines and the practices of other marketers. Find out more for yourself:

Remember to test on your own data.  I have seen different optimal open rate times between properties in the gaming industry, so test many different times and days and determine what the optimal time for your organization.

Emails have the best results within the 1st hour after delivery. This is when 23.63% of all emails are opened. But 24 hours after delivery, the average open rate is close to zero.

Almost 40% of all messages are sent between 6 a.m. and noon. This can result in inbox clutter, and significantly decrease results for these emails.

Messages sent in the early afternoon have a better chance of being noticed and consequently achieve better results: up to 10.61% open ratio and up to 2.38% CTR.

Subscribers’ top engagement times are 8 a.m. – 10 a.m. and 3 p.m.- 4 p.m. with up to 6.8% average open rates and CTR.

​I like the afternoon hours.  It has a high engagement rate and most emails are sent in the morning hours.  The more you can stand out, without being too late to be stale, the better success your email campaigns will have.  

Remember, once an email sits for 24 hours, there is hardly any chance you will get a conversion.  ​

Will Data Science Become the New Bottleneck? - Forbes

many have posited that recalcitrant IT departments, hidebound by a history of rigid organization, have been a bottleneck to the adoption of new technologies and, by extension, the ability to distill business value from data.

We’ve also examined the potential and difficulties of analyzing big data, arguing that a new class of analyst, the data scientist, is on the rise in many organizations.

That may be part of the problem, rather than the solution.

I think this will be a major problem as big data moves into the mainstream.  So many organizations struggle with IT getting data that is readily available in the organization, wait until 20 groups are pinging 2 data scientists, who by nature are slow and go down unnecessary rabbit holes to find the truth.   

In reality, most businesses don't need all this data.  They need to perfect using their current data to drive actionable results.  Until they do that, there is no need to bring big data into the organization.  ​

The Four Basic Forms of Customer Loyalty →

Great article about the types of loyalty you can achieve as a business.  It really shows there is only one form of loyalty, because the other forms are not lasting and don't represent a sustainable business.​

Purchased Loyalty

The best example of purchased loyalty is a customer rewards program. Other examples include memberships, coupons, and rebates.

Basically, purchased loyalty pays customers to be loyal, and there is nothing wrong with that practice. In many industries and market sectors the purchased loyalty strategy works extremely well.

The main problem with it is that purchased loyalty can be easily stolen because the customer is loyal to the program, not the company.

Purchased loyalty is a portion of the loyalty program, but can't be the basis for the business.  Someone can always come over the top and create a richer loyalty program and forces you to squeeze your margins even more to compete.​

Convenience Loyalty

The local market, the corner dry cleaner, the coffee shop on your way to work. You might be loyal to those businesses simply because they're convenient. You're likely to remain loyal unless competitors come along who are equally or even more convenient.

Location, location, location.  This loyalty is a great advantage as a business, but doesn't mean the guest will be truly loyal because of it.  When you have a convenience advantage, it takes a lot more for a customer to defect, but don't give your guest a reason and this advantage can be sustained for a long period of time. ​

Restricted Loyalty

Restricted loyalty exists when there is no other game in town. Your cable company may enjoy restricted loyalty, especially if you live in a rural setting and there is no competition. (Although it is easy to argue that other options do exist, like online services.)

Utilities tend to enjoy restricted loyalty. Most cities do not have multiple electricity providers.

Monopoly's are a wonderful thing if you find yourself in one.  They make life very easy as a business.  However, they rarely last for any period

of time because once someone else sees they can steal your market share, they will.​

Also, businesses tend to get lazy when they have a monopoly.  They don't take care of the customer and deploy strategies that are more bottom line ​driven, instead of customer focused.

True Loyalty

True loyalty is earned loyalty. True loyalty is undying allegiance to a brand or product based on an incredible level of satisfaction.

Customer satisfaction breeds true loyalty. When you are highly satisfied, when your needs are completely met and your expectations are consistently met and even exceeded, you simply cannot imagine using another product or service.

True loyalty is the holy grail of customer satisfaction and is something every business should aspire to create.

If you take care of your customer and provide a high level of satisfaction, you can overcome any of the other loyalty forms.  Customers will travel and accept less from you than your competitors if they truly feel cared for.  Always strive to build an organization around true loyalty, it's the only form of loyalty that is sustainable.​

FiveThirtyEight's Nate Silver Explains Why We Suck At Predictions (And How To Improve) | Fast Company

When human judgment and big data intersect there are some funny things that happen. On the one hand, we get access to more and more information that ought to help us make better decisions. On the other hand, the more information you have, the more selective you can be in which information you pick out to tell the narrative that might not be the true or accurate, or the one that helps your business, but the one that makes you feel good or that your friends agree with.

This is a great article on using data and predictions.  I just bought this book as a good friend of mine suggested it is a great read.  I always hear "You can make numbers tell whatever story you want."  Ain't that the truth?  So many times colleagues of mine hold on to a certain part of the data that tells the story they want to tell and soon it becomes truth, however this only helps them look good instead of moving the business forward.  

The Presentation Mistake You Don't Know You're Making - Heidi Grant Halvorson - Harvard Business Review

More is actually not better, if what you are adding is of lesser quality than the rest of your offerings. Highly favorable or positive things are diminished or diluted in the eye of the beholder when they are presented in the company of only moderately favorable or positive things.

This is an intriguing article on add-ons.  It is based on an interview, but there are interesting tidbits later in the article on consumer behavior.

Psychologists Kimberlee Weaver, Stephen Garcia, and Norbert Schwarz recently illustrated the Presenter's Paradox in an elegant series of studies. For example, they showed that when buyers were presented with an iPod Touch package that contained either an iPod, cover, and one free song download, or just an iPod and cover, they were willing to pay an average of $177 for the package with the download, and $242 for the one without the download. So the addition of the low-value free song download brought down the perceived value of the package by a whopping $65! Perhaps most troubling, when a second set of participants were asked to play the role of marketer and choose which of the two packages they thought would be more attractive to buyers, 92% of them chose the package with the free download.

As marketers we tend to find more and more to throw in, we call them soft or no-cost add-ons.  This is intriguing to see that may be negatively impacting the offer.  I guess when I look at it as the consumer, the more stuff there is doesn't necessarily make it worth more in my eyes.  Something to test for sure.

How to Repair Your Data - Thomas C. Redman - Harvard Business Review

No matter what, do not underestimate the data quality problem, nor the effort required to solve it. You must get in front of data quality.

Data warehousing is hard.  To build a model that works for the business users and have data quality that truly delivers "one version of the truth" takes dedication and a group that truly understands the business.

Address preexisting issues.

 There are some problems that have been created already, and you have no choice but to address these before you use the data in any serious way. This is time-consuming, expensive, and demanding work. You must make sure you understand the provenance of all data, what they truly mean, and how good they are. In parallel, you must clean the data.

We are currently in the process of doing this in my organization.  In fact, we are going to rebuild the entire data model.  Sometimes it's easier to start from scratch instead of figuring out what is wrong with the current model.  Of course, our model isn't that wonderful for the business, so this made the rebuild decision quite easy.

Prevent the problems that haven't happened yet.

...build controls (such as calibrating test equipment) into data collection; identify and eliminate the root causes of error;

Data warehousing efforts also fail because end users find the errors most of the time.  When this occurs, getting the organization to trust the data becomes a challenge.  There is always the questioning of if this data is right.  Proactively fix data and let end users trust the data, they will spend more time discussing strategy instead of fighting over data quality.

David Allmark: What do you tell a team that has failed? | 30 Second MBA

I have always believed you don't celebrate the victories and punish the failures.  It leads to everyone focusing on the outcomes, instead of taking calculated risks and innovating.  When failure is punished, teams tend to lean towards conservative programs that are sure fire, but minimal growth.  This leads to a stagnate team that doesn't drive large incremental value.

Is This Driving Incremental Revenue?

So I went to lunch with my daughter today.  We were out and about and she loves Tony Roma's, saw that we passed one and asked if we could go to lunch there.  When walking up to the door there was a "check-in with foursquare" sign on the front door.  So I did.

Mind you I was already there, already made my decision to eat there, was going to pay full price before I saw this sign.  I checked in and they gave me 10% off of my meal, for essentially doing what I was already going to do.  So why is this a good strategy?

I understand the whole social aspect of this check in.  This goes to all of my "friends" and they get to see I ate there.  But how many of my "friends" are paying attention to what I am doing, aside from those stalkers I have, by the way, stop reading this, but I digress.  How many people am I really influencing, enough to make up 10% for a meal I was going to pay full price?  I don't see it.  That is a lot of cost to overcome to drive something that can't be measured.

Am I crazy?  I just don't see this as a good business decision.  Just my thoughts.

In Search of the Ideal Groupon Discount - Rafi Mohammed - Harvard Business Review

50% off discounts attract the wrong customers, who I call uber-deal hunters. These deal-maximizers come simply for the big discount with little intention of becoming full price patrons.

This is exactly what I thought when Groupon first came out.  I remember doing 2-for-1 coupons at my families restaurant in California when I was a kid and we were very busy, but the customers never came back.  I quickly came to realize that the customers who look for those deals are always looking for the next big deal, not the next best product.  I like what Rafi has to say, ​smaller discounts for trial has a better opportunity for repeat guests.

Big Data's Human Component - Jim Stikeleather - Harvard Business Review

Machines don't make the essential and important connections among data and they don't create information. Humans do. Tools have the power to make work easier and solve problems. A tool is an enabler, facilitator, accelerator and magnifier of human capability, not its replacement or surrogate ... That's what the software architect Grady Booch had in mind when he uttered that famous phrase: "A fool with a tool is still a fool."

From my last post, I talked about humans being able to make the data actionable.  The understanding of the data that is used for the model is more important than understanding the ​math behind the algorithms.  Algorithms can find the patterns humans can't, however the algorithms can't determine if the answers are relevant. 

We forget that it is not about the data; it is about our customers having a deep, engaging, insightful, meaningful conversation with us

Exactly.​

Understand that expertise is more important than the tool.  Otherwise the tool will be used incorrectly and generate nonsense (logical, properly processed nonsense, but nonsense nonetheless).

The answers will be fancy, but will not help make decisions for frontline or CRM more effective.​

When we over-automate big-data tools, we get Target's faux pas of sending baby coupons to a teenager who hadn't yet told her parents she was pregnant, or the Flash Crash on Thursday May 6, 2010, in which the Dow Jones Industrial Average plunged about 1000 points — or about nine percent.

Humans should always be paying attention to the outcomes and put parameters around the use of automated answers.  Answers should be used in conjunction with other factors for the best decision.​

Although data does give rise to information and insight, they are not the same. Data's value to business relies on human intelligence, on how well managers and leaders formulate questions and interpret results. More data doesn't mean you will get "proportionately" more information. In fact, the more data you have, the less information you gain as a proportion of the data (concepts of marginal utility, signal to noise and diminishing returns). Understanding how to use the data we already have is what's going to matter most.

​

What Executives Don't Understand About Big Data - Michael Schrage - Harvard Business Review

too many organizations don't quite grasp that being "big data-driven" requires more qualified human judgment than cloud-enabled machine learning.

Human judgement also comes with a caveat, the human's have to be knowledgable about the business at hand.  So many times consultants come in and use terms like "big data" and "data modeling" with promises of transforming the business.  Much more goes into transforming the business with data and that is the knowledge to take the findings and apply those findings into the CRM efforts to make an impact.

What works best is not a C-suite commitment to "bigger data," ambitious algorithms or sophisticated analytics. A commitment to a desired business outcome is the critical success factor.

The desired outcome is so important.  Otherwise the result is usually not actionable, just informational.  ​

Executives need to understand that big data is not about subordinating managerial decisions to automated algorithms but deciding what kinds of data should enhance or transform user experiences. Big Data should be neither servant nor master; properly managed, it becomes a new medium for shaping how people and their technologies interact.

Without taking the findings and enhancing decisions made by frontline staff or database marketing experts, the data is not actionable. ​

The Power of Subtraction →

This is something I try to subscribe to everyday.  While I don't necessarily agree with all 5 of his subtractions, I do believe that maniacal focus is what it takes to be the best at what you do.  To focus, one needs to subtract all of the noise that consumes businesses.  ​

Can Big Data Smoke Out the Silent Majority? →

Of course sophisticated analytics are being used to find pockets of money, just as they have long been used by financial service companies.

The private sector has been using these tactics for years now.  It doesn't surprise me that sophisticated political campaigns are also using it.  Data mining is very powerful, everyone should be using it.​

Customer Experience Should Be Part of Your Business →

Appoint a chief customer officer

Over the past six years, we've seen an increase in the number of companies that have a single executive leading customer experience efforts across channels and business units. Whether firms call them a chief customer officer or give them some other label, these leaders sit at high levels of power in organizations...

There it is again, that title of Chief Customer Officer.  ​It makes a lot of sense.