9 ways to boost customer loyalty with Marketing Automation

I'm not a big fan of the lists, but it makes it convenient to talk about a few of the concepts.  Marketing automation is a very important tool for the digital marketer.  I will even go as far as saying it should be the center of the digital marketing universe.  Because digital marketing grew up as being web, this is not a popular view among digital marketers, but that doesn't mean it's not true.  

Gathering knowledge allows to build relationship: the more you know about customers, the more relevant offers you can address. Personalization is impossible without advanced behavioral and transactional analytics.

Marketing automation starts and ends with data.  Data is the basis for running any marketing automation tool.  Without a good data collection and architecture strategy, marketing automation will be hampered to a degree.  It also ends with data because the capturing of the behavior driven informs the next decision.  It is cyclical as far as data collection is concerned.

1:1 Marketing. Dynamic content and e-mails are the base of long-lasting bond with customer, because they show that you treat him individually and adjust offers to his/her particular needs. Also find opportunities to say thank you to them, ask for opinions and suggest complementary products

1-to-1 marketing is the dream.  To cost effectively do this is still farther out, but we are getting close.  The problem becomes content.  To effectively market to each person in the database is unrealistic, but start at the top.  What would it take to market to the top 10% of the database on a 1-to-1 basis.  Start from there and then try to go farther into the customer base.  

Use analytics to improve content quality: with content marketing you can not only educate your customers, but also discuss values you share, what is crucial for establishing loyalty. 30% of customers say that shared values are one of 3 top reasons for being loyal to a brand. Hence invest in content and optimize it. Read more about content marketing and marketing automation synergy.

Good content can be scary for marketers.  The time and effort to create such content is time consuming and costly, especially in the form of man hours.  It is also hard to quantify the results, which normally don't start to materialize for many months.  However, great content builds a relationship with the brand.  Storytelling and guides for customers help them relate to the brand better than most advertising.  Let the analytics guide the decision.  If customers are buying bathroom products from Home Depot, don't send them content about building a fence.  A great timed "how to" on bathroom design could go a long way to loyalty and upsell opportunities.

Measure: don’t just repeat common knowledge that making actual user buy is 7 times cheaper that bringing new one. Use advanced analytics offered by Marketing Automation Systems to measure ROI of your loyalty improving actions, and optimize them.

The crucial part to any marketing automation strategy, how are you going to measure the results?  This thought process usually comes at the end, but it should start at the beginning of your marketing automation journey.  The first thing your boss will ask after the marketing automation system goes live is "how are we doing"?  You need to not only be able to answer his questions, but you need to answer that question for yourself.  Marketing automation campaigns are living and breathing entities.  They are never finished and they need to continually evolve.  The only way to determine the evolution is by understanding the results.  

How To Win Customers Without Data-Driven Marketing

The human element – even for online businesses – always shapes the final judgment on customer retention and acquisition.

This is the exact reason why becoming a customer-driven organization is so important, even in the age of data-driven marketing.  In most cases a human interaction will determine whether customers remain loyal or churn.  This is part of the customer experience, just as much as delivering the right content to individuals to drive the desired behavior.  While data-driven marketing can handle most customer experience, for offline businesses and even online businesses, the human interaction is critical to handling the cases where things don't quite go as well as you hoped.  

The morale of this story is: make sure that your employees are your strongest, most amazing asset because the most sophisticated technology or data-driven marketing can’t replace what your employees can deliver – caring, thoughtful, on-the-spot customer happiness.

Period. Full stop.

here is so much talk about who owns the customer experience and why CMO's are reluctant to own the entire experience.  In this article the letter describes the interaction with Terry from the call-center.  Now this interaction is as much part of the brand as an advertisement driving a customer to a website or in-store.  This experience defines the brand, yet the overall person in charge of this is not the CMO, it is more than likely an callcenter manager that reports up through an operations division.  

This is where the customer-driven organization has to be a culture, not an individual.  It doesn't matter what the position title is, there is no one person that can be the customer advocate throughout large organizations.  The customer advocate has to be all employees, period.  There could be a person leading the charge, but until an organization has changed its culture to be truly customer-centric, data-driven marketing and great advertisement will never drive the most ROI possible because the organization is not focusing on the customer experience as a whole.  

For data-driven marketing to succeed doesn't need a customer-centric organization, there is a lot of value and areas to increase revenue.  My belief is all organizations should be customer-centric, this enhances all aspects of the business, not just the data-driven marketing side.

The State and Drivers of Data Marketing

What matters most is the optimization of the customer experience, relevance and (perceived) customer value as a driver of business value. Data-driven marketing certainly is not (just) about advertising and programmatic ad buying as some believe. Nor is it just about campaigns. On the contrary: if done well, data-driven marketing is part of digital marketing transformations whereby connecting around the customer across the customer life cycle is key.

Very succinct vision of what data-driven marketing is, it's all about the customer experience.  The advent of "big data" was nothing more than gathering extra data about the customers.  Gathering data is only the first step of the process, albeit a time-consuming one.  The good news is after the hard work of gathering the data has been completed, the harder part starts.  Once you have data, making sense of the data and creating actionable outcomes to enhance the customer experience becomes the goal.  This is very hard work.  It takes plenty of analysis and insight to reach this goal.  But the companies who will do this the best will be the ones that succeed in the digital age.

Among the key takeaways of the data-driven marketing report by the GlobalDMA:

• 77% of marketers are confident in the data-driven approach and 74% expect to increase data marketing budgets this year.

• Data efforts by far focus on offers, messages and content (marketing) first (69% of respondents). Second ranks a data-driven strategy or data-driven product development. Customer experience optimization unfortunately only ranks third with 49% of respondents.

• Among the key drivers of increased data marketing: first of all a need to be more customer-centric (reported by 53% of respondents). Maximizing efficiency and return ranks second followed by gaining more knowledge of customers and prospects.

I believe the first step in the process is understanding where the puck is going to be and skate in that direction.  Marketers are understanding this data revolution is coming and they are saying the right things in surveys.  The real question will be how to get there.  It's easy to identify problems, it's hard to implement solutions.  The marketers who will show they are adept at change will thrive in this new paradigm.  

Customer analytics is something I have focused my entire career.  In the casino industry we have had the optimal opt-in mechanism for many years and have collected amazing amounts of data about our customers behavior.  We have used this to create targeted marketing campaigns to our customers, so I believe in the direction the entire industry is taking.  Always start with the customer.  It will lead to creating better experiences and more profitable results.

 

Don't Persuade Customers -- Just Change Their Behavior

Most businesses underestimate how hard it is to change people’s behavior.  There is an assumption built into most marketing and advertising campaigns that if a business can just get your attention, give you a crucial piece of information about their brand, tell you about new features, or associate their brand with warm and fuzzy emotions, that they will be able to convince you to buy.

On the basis of this assumption, most marketing departments focus too much on persuasion.  Each interaction with a potential customer is designed to change their beliefs and preferences.  Once the customer is convinced of the superiority of a product, they will naturally make a purchase. And once they’ve made a purchase, then that should lead to repeat purchases in the future.

This all seems quite intuitive until you stop thinking about customers as an abstract mass and start thinking about them as individuals.  In fact, start by thinking about your own behavior.  How easy is it for you to change?

It's very hard to change behavior.  Given to their own devices, individuals will continue to behave a certain way unless nudged in the right direction.  I often refer to this concept as proactive vs reactive marketing.  In proactive marketing, the business is using direct marketing to communicate in an effort to change behavior.  This often takes the form of an offer or incentive to  incite the behavior change.  In reactive marketing, money is spent to gain awareness and then it is left up to the customer to interact with the business by clicking on the ad that has been served up multiple times.  Both of these models are important for the overall marketing strategy, but one is much more cost effective than the other.

First, you have to optimize your goals. 

For marketers, this means focusing on how to get consumers to interact with products rather than just thinking about them.  As an example, our local Sunday newspaper often comes in a bag with a sample product attached that encourages potential consumers to engage with products.

Interaction is the most important part of proactive marketing.  Be sure to measure the results on the behavior you are trying to change.  Remember, the biggest thing to watch when analyzing behavior change is did you change enough behavior to compensate for any increases in offer to entice the change?  Inevitably there are many customers that won't change behavior, but will take you up on your increased offer, so you just reduced margins for the same behavior.   

I try to instill into my team to focus on the individual and try to understand the mindset of our customer.  Are the incentives we are giving going to change their behavior?  Try to ask, "if it were me, would this offer convince me to engage with this communication?"  Always put yourself in the shoes of your customer and focus on their experience to achieve the desired behavior change.

Why CEOs Say Yes to Marketing Automation

Ten short years ago, it was rare for a company to have a marketing automation platform in place. Since then, it’s become ever more clear that acquiring marketing automation (and applying the expertise to make it hum) is a huge competitive differentiator. SiriusDecisions research indicates that 80% of the organizations with the highest-performing demand waterfalls (based on the number of won deals per 1,000 inquiries) have implemented marketing automation platforms. This tallies with other research; the 2015 report “Rethinking the Role of Marketing” from Gleanster and Act-On found that Top Performers were 20% more likely than the average organization to use marketing automation technology..

I think it is still rare for most organizations to have a marketing automation platform, but what is even more rare are companies who are taking advantage of their platform.  The promise of marketing automation is very enticing as this article articulates.  The benefits of a well-run marketing automation program is an extreme competitive advantage.

1. Marketing Automation Lets You Put the Customer in the Center of Your World.

List management. Marketing automation lets makes it easier to segment your lists by field values (explicit data such as title, department, industry, company size) and by implicit, inferred factors (often actions) such as web pages visited, eBooks downloaded, emails clicked on. It also lets you sync chosen data back and forth with a CRM system.

Well beyond the realm of salespeople, marketing automation lets you manage your customer base on a level of personalization that is not possible otherwise.  Some say these platforms make the relationships with customers less personal, but that is a fallacy.  With the amount of personalization and targeting capable with these platforms, the customer gets a more personalized experience with marketing automation.  

The amount of time manual processes take to manage the customer, it is impossible for these processes to really give the best experience to the customer.  There is just not enough time in the day.  However, a marketing automation platform can create customized communications based on all of the data described above, including behavioral information, geo aware messaging and preferences of communication channels.

Campaign management. Automated programs can save time (which is money, yes) and take a little human error out of your programs. You can set them up to replicate successful lead nurturing or onboarding programs, for example, and they will run exactly as programmed, no matter who misses work on Tuesday. You can add prospects as they enter your world (perhaps through a form) and exit them (perhaps to another program, or to sales) as you learn more about them, or as they become increasingly qualified. You can set up trigger emails (thank-yous, congratulations, expiring trials) and landing pages that make offers or fulfill requests, showing how responsive you are.

Campaign management is a difficult process if you have different programs pulling lists, then fulfilling communications and measuring results.  The amount of time saved by having a platform where everything is integrated and can trigger off the behavior of the customer is very powerful.

6. Marketing Automation Takes Care of the Established Customer

The platform gives you a structure you can scale in your retention strategy. Start with using a nurturing educational strategy to support onboarding. Move on to keeping your customers in the loop, educating them about new features, showing them new plays with old features, and keeping them abreast of changes in the industry that affect them. Take the same techniques you use to notice when a lead is warming up and apply them to noticing when a customer is looking at an upsell … or needs attention to prevent churn.

Retention is the most important part of the database.  The greater the number of sales coming from your established customer base allows for the greatest growth in your business.  Marketing automation at its heart is best for the established customers.  The platform is designed to drive more business from this segment.  Since the majority of most companies revenue comes from loyal customers, having the ability to grow this groups sales is essential to a longterm stable business model.  The marketing automation platform should be at the center of this model.

7. Marketing Automation Spurs Revenue and Growth

These benefits are all pieces of a puzzle that every company using marketing automation puts together in its own unique way. The common denominator is that most companies that apply marketing automation – whether they use every feature or just the basics – will see faster growth and post more top-line revenue.

Well who doesn't want that?

How CMOs Can Make Sure Their Companies Are Customer-Obsessed

CMOs are charged with making their companies customer-obsessed — so they can win in an age where customers are highly empowered. But the irony is that many marketing shops themselves are not customer-obsessed.

I am continually thinking about the customer-centric approach and who should own it in the organization.  The CMO is the obvious choice, however are they the best choice?  I have seen where organizations have a C-level position, something to the tune of Chief Customer Officer.  This is also thought because it ends up being another level in the organization, another potential touchpoint in the organization that has to bring different groups in the organization together around one common goal.  I think it comes down to having the right person.

Marketers are predisposed to think about the market first. So why are marketers not naturally predisposed to be customer-obsessed? The answer lies in gravity — the gravity of the P&L and the associated product, solution or service performance.

It's always about the customer.  Everything should come back to customer analytics.  I think Finance departments have too much power in some organizations where high-level KPI's are all about a product or a service.  The problem with these KPI's is they don't go far enough down to the "people" who are driving those metrics.  It is similar to fixing a symptom instead of the actual source of the problem.

For example, the company sells 1,000,000 widgets and they want to grow this by 3% in the next quarter.  This is the entire wrong approach to the problem.  Widgets don't grow by 3%.  3% more customers buy widgets in the quarter.  It is imperative to start with the customer because they are the ones that are purchasing these widgets.  So to grow those numbers, marketers need to embrace the customers to grow their numbers.

I have spoken with many CMOs — across industries and geographies — and this common theme has emerged: Marketing’s relevance and performance is now predicated on putting the customer at the center of the universe. This is neither elective nor minor surgery. Most believe an overhaul — not a simple refinement — is needed to make marketing customer-obsessed and truly able to drive growth.

Changing to a customer-centric organization is a complete change in culture.  This does not happen overnight.  It takes a dedicated team with a singular focus many months to accomplish.  I once read to change a culture, a great organization with amazing focus will take 18 months.  There are not that many of these organizations out there.  The average is 4 years.  So organizations need to start their culture change today.  There is no time to waste.  The customer-obsessed organization will be the most successful in the new customer empowered buying dynamic.  

The App Store is in Trouble Without Paid Upgrades

I want to preface this by saying I am not an app developer, however I have watched the app store and Apple for a long time now.  I have also lead very successful digital marketing teams for billion dollar revenue companies, so I know a thing or two about marketing ad driving revenue for products and services.  

Ever since the app store was introduced in 2008 it has been a boon for many developers, but more and more I hear their revenues are down even though the app store as a whole is up.  I hear a lot of complaints about the app store is geared to only help the top grossing apps or the apps Apple wants to help.  All of this is true, it is hard to find the app you want in the app store and their curation definitely has some favoritism happening, but that's business.  These are problems that still need to be solved, but the biggest problem in my eyes is the lack of paid upgrades.

Being a consumer of apps I have enjoyed the lack of paid upgrades, it allows me to reap the benefits from the app for a long time.  However, I paid for Instapaper 6 years ago and I have not paid a dime since, this is not a good model for the app developers.  I am a loyal customer, but I don't need the upgrades that come with the monthly fee, which I think is spending too much for the extras.

Loyal customers are the best source of additional revenue

For any business to thrive, they have to be able to establish a base of business that provides the bulk of the revenue.  This is the loyal customer base that equates to 70-80% of the revenue, but accounts for only 30-50% of the investment in advertising and marketing.  These are the customers that love the products, tell all their friends about the products and buy new products when available.  This is why Apple is crushing their competition because they have a loyal base of customers that buy new products from Apple when available.

For app developers, without a model for paid upgrades, they are forced into a model of perpetually finding new customers or create a subscription type model.  For game developers this is fine, because they can create an experience that is easier and more enjoyable for the gamer when purchasing extra coins to make getting through levels faster.  People are willing to pay for these and that is great.  For the indie app developer making polished apps, this model does not work.  For that reason, they are constantly trying to find another customer who will buy their app for $2.99 and then forget about them.  This is not a sustainable business model.  Eventually there are not enough customers to buy the new app to make a living.  As more people buy the app, the less people there are to buy the app in the pool, so it is inevitable that revenues will not be maintained.

Beautiful apps will become fewer and far between

The Apple app store is filled with a lot of garbage, but it is also filled with amazing apps.  Apps that developers have put their heart and soul into.  Even back in the days of only the Mac, an application on that platform was much nicer than applications on the PC.  This is a trend that continued on iOS and continues to this day.  But that may all change soon.

A developer has to feel confident they will get a return on their investment for the time they put into an app.  There are never certainties in this business, but someone who takes pride in what they build will always take the time needed to make it beautiful, functional and have the best customer experience possible.  If there is not a business model that seems viable, the developer is then forced to create many apps or develop for multiple platforms to succeed.  This limits their time.  Limited time results in less polished, less amazing apps.  This hurts the app store.  This hurts Apples platform.

Paid Upgrades is a superior app business model

Paid upgrades give the app developer the opportunity to continue to work on their app while making money from current loyal customers and new customers alike.  This is a sustainable business model.  It is also a business model that will create and maintain amazing apps.  So many developers have created great apps and made very good money, only to see the app become less and less updated over time leaving the customer with the same experience they had 5 years ago. 

A paid upgrade model will allow developers to build apps that they want in their heart to build, continue to improve that app, while having a revenue stream that supports the added development work.  This will result in apps that have longer shelf lives.  Imagine if this model existed and Marco Arment was still toying with Instapaper because their was a revenue stream that could sustain the business?  Developers like him and many others would continually improve and push the envelope of what their apps can do.  All this would cost the customer $3.99 a year, or every other year, or whenever the developer decided the upgrades to the app warranted an upgrade?  And if the customer didn't want to upgrade, that's fine, they can stay with an older version.   

I would like to see Apple adopt this model.  I know app developers have been begging for years, but I am an app consumer that is now begging.  I don't want amazing, innovative apps to go away.  I want apps where developers spend many hours toying with the customer experience until it is just right.  Where they obsess over every little detail because they know their most loyal customers will remain loyal because of that obsession.  Where they create the next "pull to refresh" because they know there is a better way.  

I don't want to live within a platform where the developers don't improve upon their original design because it is not worth the effort from a revenue perspective.  Please Apple, just for us app consumers.

Is Loyalty Boring Customers?

Found an interesting article from September 2014 from Caroline Papadatos which discusses the gamification of loyalty programs.  It really gets the mind going, because I think the gasification side is not data driven enough and the opposite is true from the data side.

A few weeks ago, I had the privilege of judging the 2014 LoyaltyGames, an incredible week-long global challenge involving 1,500 practitioners and students from 102 countries, with 15 judges who were remarkably, never in the same room nor on the same continent.

The 2014 contest had three components: awareness building, game design and loyalty building.  The game experiences were clever and fun, and I was won over by the sheer creative genius of the contest submissions. The loyalty component was straightforward: reward and recognize customer / donor tiers without breaking the bank. With a gamification spin, it meant solving a conventional customer engagement problem with an unconventional tool set. Sounds simple enough, but as I scanned case submissions looking for earn ratios and attainability models, all I could find were badges, likes, certificates and pins.

It is fascinating how much badges and pins can get people excited.  The basis of these games has a lot of merit, but what I have a problem with is the same with social media as a channel, it is not targeted at all.  There's no meat behind the game.

My answer came from Gabe Zichermann who in a recent eight-part gamification series in COLLOQUY Magazine makes the bold statement that “loyalty isn’t fun enough anymore” and our customers are bored. Gabe clearly has a point – loyalty now competes for attention in a world where Angry Birds has been downloaded two billion times. It gets worse. At the LoyaltyGames award ceremony, a renowned gamification expert accused loyalty programs of “bribing” their customers. Now my back is up, but are we outraged or outdated? 

The truth is that loyalty programs need a shot in the arm, and while experience design always has a place in the loyalty tool set, few data practitioners are charming or entertaining. And gaming is not just for Millennials. The average social gamer is a 43-year-old-woman, which just happens to be the primary target market for grocers, drugstores and a host of other retailers. So why aren’t loyalty practitioners flocking to gaming? 

I totally agree, loyalty programs need a shot in the arm.  As I have written before, most people engaging with loyalty programs are just taking the free stuff, theres very little loyalty or behavior being driven from them.  It is fascinating to combine the rich data from the loyalty programs to the fun concepts in gamification to create a targeted loyalty gamification model.  I think this would work extremely well.

I could imagine a program where certain behaviors are awarded more points and a bounce back offer could include multiple point thresholds for buying everything in a market basket analysis.  So if the customer who usually buys a TV also buys cables, programmable remotes and a blue-ray player, the customer will get multipliers if these are purchased in the next 2 months.  This gives some fun to the loyalty program, while driving the behavior to purchase items that are typically purchased with TV's.  The best of both worlds.

There’s no doubt that loyalty programs lose their luster when they became overly programmatic, but where gaming meets transactional data analysis and customer behavior change, there are notable exceptions. BrandLoyalty’s Instant Loyalty Programs in Europe, Asia and South America have a huge fun-factor for retail shoppers – on the surface they’re a widely popular collectible game for children but there is a financial underpinning that drives incremental spend, participation and superior financial performance based on maximum turnover & transactions from family households.

Whether you’re pro-loyalty or gamification, you can certainly agree with Gabe on this: “taking something that’s crummy and putting some game frosting on it won’t magically change your customer”. But let’s face it, the mix of gaming techniques and data-driven loyalty can only be good for business. And be honest, if you were given the choice of getting on a plane for yet another industry slideshow or signing up for a multi-player gaming challenge, which would you choose?

Perfect combination, a shot in the arm.  The technology exists, lets gamify our programs.  This is what I have been harping on about for a month.  These are the types of things that create great customer experiences.    

The James Hotel Combines Beauty and Elite Customer Experience for its Loyalty Guests

Mark Johnson from Loyalty360.com writes:

The James is redefining luxury boutique hotels in New York, Chicago and soon in West Hollywood for its loyal guests. The hotel focuses on providing beautiful designs and outstanding customer service.

Lisa Zandee, Senior Vice President of Brand Management, told Loyalty360 that The James is a leader in creating design and guest centric services. “Both are extremely important,” she explained. “It’s about form and function. It has to work and look good.”

An interesting interview with the Senior Vice President of Brand for the boutique chain.  Many of the points Zandee brings up are very true to run a successful hospitality operation, especially in the high-end boutique industry.  Customer service and differentiated experiences are the key for these types of properties to thrive.  Being a small hotel allows for personalized service which is the definition of a boutique experience.  

Where I think problems will start to occur is the lack of respect for data in driving decisions.  Zandee dismisses data as something that clouds the teams judgement when developing initiatives.  I think this will come back to haunt this team.  Again, there is an art and science to marketing in the digital age and The James is disregarding the science portion.  Creating a loyal database is key to surviving in the hospitality industry and solely relying on social media and your loyalty rewards program is leaving profit on the table.  

Most CRM programs make the most money from customers who aren't giving you the loyalty you are looking for, so to minimize this group can lead to reservations coming through less profitable and less loyal channels.  Increasing the base of the business coming from known customers increases profits while enabling control of the customer experience.  Delivering great customer experiences in the digital age relies on data as an important component.    

Eliminating the “Graffiti” in Your Customer Experience Program

Leadership Behaviors Drive Change
Executive behavior is as much of an influence on employee behavior as graffiti is on the behavior of those who use the subway. It’s symbolic of the success of the system, and leadership needs to drive the cultural change required.  

A superb article by Nancy Porte regarding the cultural change needed to truly deliver on the customer experience and the role executives play to ensure its success. I recommend reading this article, very thoughtful writing.  

As I've been harping on for the past couple of weeks, customer experience goes well beyond creating teams and having initiatives.  Customer Experience is a culture, one that revolves around the customer and makes sure every decision the company makes is for the customer.  The rationale behind this theory is that great customer experiences will result in happy, loyal customers who will buy more and become advocates for the brand.  

Enrollment vs Engagement: Loyalty In Action

Getting to the checkout without hearing that phrase is a modern feat of humankind. Retailers, financial services, and expanding sectors like drugstores and restaurants know that loyalty membership programs are one of the easiest ways to get individual data on shoppers while enhancing the brand-to-consumer relationship. But when shoppers are asked (and asked, and asked again), they often can’t see the forest for the trees—that a loyalty program is an opportunity for consumers themselves to customize a relationship with brands.

The average number of loyalty programs per US household has grown to 29, based on data gathered by Colloquy. That same loyalty data shows that only 42 percent of those memberships are currently active. Just imagine what advantages consumers are missing out on when over half of their memberships are disused. Enrollment doesn’t necessarily mean engagement.

In an offline world the enrollment of a customer into the loyalty program is the main metric associates are measured to determine if they are pushing the loyalty program.  I have never liked this metric, because it doesn't measure the true purpose of a loyalty program.  

The true purpose of a loyalty program is to get your customers to engage with it.  Enrollments are a byproduct of engagement.  The metric that should be used is an engagement %.  Instead of measuring the Enrollments by associate, a better metric would be to measure the amount of sales tracked with a loyalty rewards number versus the total amount of sales for each associate.  The higher the %, the better the associate.  When this engagement % increases, I will guarantee the enrollments will increase with it.  Plus it enforces associates to be on the lookout for the best customers, not just the customers that will help them reach their goal of enrollments.

Great Brand Apps Create Loyal Happy Customers

Mobile apps are the way we will interact with all of our loyalty programs in the digital age.  Smartphone apps can do so much more than a piece of plastic or punchcard could have ever imagined, yet so many companies have built half-baked, poorly thought out attempts at creating a customer experience.  But the good news is there are some leaders that are nailing it.

The 4 qualities a mobile app should possess are:

A mechanism to capture transactions 

At the heart of the mobile experience should be the mechanism to capture data about the customer.  This data should feed into the loyalty program of the brand.  This should come in the form of transactional, interests, surveys and geo location data.  Data is the building block for a loyalty program to succeed.  

Frictionless transactions

A mobile app has the ability to eliminate the frictions of the transaction.  For example, at an Apple Store the customer can enter the store, open the app, scan the item they would like to purchase and then leave the store, all without having to interact with a human or wait in line.  That is eliminating friction.

A mechanism to communicate with your customers

Mobile is a channel.  It is perhaps the most important channel in the new digital marketing era.  The phone is always on your customers body and that will soon include wearables.  The ability to push messages to your customers through this channel is extremely important.  The ability for your customer to open the app and see their loyalty program details makes communicating with your customer more personal than ever before.  This includes beacon support to guide the customer through the offline experience as well.  This should be the channel that receives the most focus in the coming years.

An engaging experience without a transaction

Mobile apps hold a space on the customers phone.  If you make your app engaging, even when the customer is not making a transaction with you, you may keep a good position on the phone.  Think of it as search rankings, the more prominent position, the more engagement with your brand.  Get stuck in a folder on the third page, you will only be utilized as a mechanism for transactions which is not the worst thing in the world, but doesn't drive behavior. 

Starbucks has been on the forefront in the mobile app space since it introduced its mobile app in 2011.  Starbucks took the approach of creating an app that engages customers when not in a Starbucks, along with making the transaction process frictionless.  Starbucks has long partnered with Apple by giving away free music and apps, but they also moved this functionality to the app.  By doing this, Starbucks has been able to engage their customers with their application outside of the brick and mortar stores.  I consistently look at my badges from Starbucks to see what free apps or music they are giving away this week.  Most of the time I don't get the freebies because they are not to my liking, but every once in awhile I do.  But it also has trained me to constantly go to the app.  I check my points and how far away I am for a free award and I am not even a big free award kind of a guy.

Starbucks has also made a frictionless payment process that also tracks my behavior.  I always received gift cards from Starbucks and had them strewn all over the place.  Some made it to the wallet, some were in drawers, but they were never consolidated.  Starbucks also had a loyalty program that was tied into a gift card, but it was confusing on how to interact with the program when I wasn't using that particular gift card.  Plus having to manually add money to the specific gift card was far from frictionless.  So I never really used the loyalty program and I was going to Starbucks less.  The app has removed all of this friction.  It is easy to transfer gift card money to the main loyalty account, which was a main pain point for me.  It also allowed for easy addition of funds into the card through the app.  These two items made using the program much easier.  

The other app that I have been very impressed with is the Chipotle app.  This app is a little different from the Starbucks app because it is just solving one problem, waiting in line.  The app allows you to place a Chipotle order and skip the line to pick it up at a designated time.  Now I don't know if any of you have been in a Chipotle and have to wait in the line to order, but it could be a fifteen minute exercise in browsing Twitter.  The app saves your favorites and recents so it takes approximately 20 seconds to place an order.  Pay online, just walk to the cashier and they hand you your bag of goodness and you are off.  Simple, frictionless and awesome.   

Improvements can be made in both of these apps to include more of the 4 qualities.  The Starbucks app nails 3 out of the 4, but can do a better job at using the app as a personal, targeted channel.  Right now the offers they have are not very tailored to my experience.  This is a big opportunity to make the app even more engaging.  For Chipotle, they only possess 1 out of the 4.  They might be monitoring my transactions, but they don't have a loyalty program tied to the app, so I am not sure.  The app is a great start, but they could hit a home run with the addition of some functionality.  Either way, I will still use it weekly to avoid the lines.

Are You Ready for an Omnichannel World?

One of my favorite title for an article.  I think it's a funny title to be honest, because it doesn't matter if you are ready, this is the current state of the customer experience.  Customers for a few years have been living in this world and we as digital marketers are finding it hard to catch up.  What's even more scary is the rate at which technology is moving.  If digital marketers don't become more agile, they will always be playing catch up.  The issue may be is that the distance they will have to catch up will widen.

Today’s customers engage with companies in multichannel and multitouchpoint journeys, which they pause and resume over time. For example, according to the Corporate Executive Board (CEB):

• 58% of callers have visited the web before calling, and

• 34% of callers are on the web while talking to a rep

For a customer to complete a single task – buy a product, answer a question, understand a bill – they often require multiple, disconnected interactions with an organization. When a customer needs assisted service to supplement self-service, they typically must start over when they engage with the organization.  In the case of voice, it’s calling a contact center, using an IVR, and explaining their issue. In the case of chat, it’s starting a dialog with an agent without any context to their journey. These time-consuming and disconnected ‘channel shift’ experiences are one of the leading causes of missed sales opportunities and high operating expense for organizations – as well as a major source of frustration for costumers.

I remember back in 2001 having this journey with AT&T landlines.  At that time AT&T was broken into local and long distance.  Well the bills came and they looked exactly the same and this was when online banking was just getting started.  Well I was paying all the bills to long distance, because I believed they were one in the same.  The bill looked exactly the same.  I was quite surprised when they turned off my phone because I hadn't been paying.  I mean, here I was I felt like I was always paying.  When I set up my phone service I didn't call 2 numbers.  

This is something that needs to be front and center.  This is nothing more than creating great customer experiences, just using customer service as an example.  The customer doesn't want to think about telling their story over and over, they want the context of their issue to move with them as they reach each touch point.  This is expected in the digital age.  The only thing really holding organizations back is their structure.  Organizations have to structure themselves to handle the guest through this omni-channel journey.  No amount of software will help if they don't start there.   

Brands Don’t Know Their Customers As Well As They Think They Do

Chris Crum writes for webpronews.com:

IBM and Econsultancy have some new research out suggesting a “massive perception gap” between how well brands think they are marketing to their customers and how well customers actually think brands know them. Businesses think they’re doing a pretty good job. Consumers, not so much.

The study, which surveyed businesses and customers specifically in the United States, found that about 90% of marketers do agree that personalization of marketing campaigns is critical to their success. Even still, 80% of consumers polled don’t think the average brand understands them as individuals. This is despite consumers sharing more personal details with businesses than ever before. Some how, brands are still failing to make the most of it.

In my experience, marketers can be their own worst PR agents.  For the most part, they understand what their customers want, but they can't deliver.  However, they are constantly spinning what they are doing as to seem as though they are meeting the customers demands.  So this survey doesn't surprise me.  I'm surprised that 80% of customers don't feel like they are individuals.  It's hard to create great customer experiences with this stat.

The IBM/Econsultancy research found that 80% of marketers “strongly” believe they have a holistic view of individual customers and segments across interactions and channels. They also strongly believe in their ability to deliver “superior experiences” offline (75%), online (69%), and on mobile devices (57%). Yet just 47% of marketers say they’re able to deliver relevant communications.

Worse yet, customers don’t think they’re getting personalized experiences. Only 37% said their preferred retailer understands them as an individual. And that’s the preferred one. Only 22% said the average retailer understands them. 21% said communications from their average retailer are “usually relevant”. 35% said communications from their preferred retailers are “usually relevant”.

The biggest disconnect with marketers is in implementation.  In the survey they state they believe they can deliver "superior experiences", yet just 47% say they are "able".  So marketers believe they have the strategy to be great in the area of customer experience, the technology or knowhow to deliver these great strategies is lacking.  A lot of that comes down to the relationship with the CIO.  As I wrote in Across The Board, CMOs Struggling To Deliver An Integrated Customer Experience, until the CIO and CMO speak the same language and the CMO embraces technology, this will continue to be an issue for marketers in the future.  When only 37% of customers believe their preferred retailer knows them at all, there is an issue.

“One explanation for relevancy void may be a lack of innovation for the multi-channel lives we all lead,” IBM said. “According to the study, only 34 percent of marketers said they do a good job of linking their online and offline customer experiences. With the vast majority of dollars spent offline and the majority of product research happening on the Internet, the two are already linked for consumers but this gulf must close for marketers if they are to advance. One issue is the technology of integration, with only 37 percent of marketers saying they have the tools to deliver exceptional customer experiences.”

The technology exists today, marketers just have to embrace it.  The technology is nascent, so it is harder to implement, but this can be done today with hard work.  The results will be well worth the effort.

“The customer is in control but this is not the threat many marketers perceive it to be. It’s an opportunity to engage and serve the customer’s needs like never before,” said Deepak Advani, GM at IBM Commerce. “By increasing investments in marketing innovations, teams can examine consumers at unimaginable depths including specific behavior patterns from one channel to the next. With this level of insight brands can become of customer’s trusted partner rather than an unwanted intrusion.”  

Advani is correct in labeling this an opportunity.  For the marketers who dare to embrace the new realities of digital marketing, they will reap the benefits that come from delivering targeted content creating exceptional customer experiences.  For the marketers that don't embrace this sea-change, their companies will become less relevant in the digital age.  

Using Smartphones and Apps to Enhance Loyalty Programs - NYTimes.com

I am such a big fan of using rewards on a smartphone.  There is no better way to communicate with a customer than with the device they are carrying around in their pocket.  The next evolution for rewards programs is moving from a card in the hand or a punch card mentality to devices that allow even smaller businesses to compete against bigger competitors.  

Smartphones and loyalty apps have begun offering small businesses enhanced program features and automated administration capabilities once affordable only to large companies like airlines and hotel chains. These capabilities also offer the equivalent of a real-world psychology lab for easily evaluating the effects of offerings and incentives on customer loyalty.

The key to any reward program is to capture data about a customers behavior.  If your program isn't allowing you to capture transactional level data in conjunction with the program, there may be a need to consider this approach.  If only to capture the amount spend and the date, this will allow a lot more opportunity for the business.  As I wrote in The True Purpose of a Loyalty Rewards Program, it is imperative to have a program that incentivizes a customer to share their data with you, but not over-incentivize.  The key is to drive behavior by targeting the customer, rather than giving everyone the same rewards.

“Clearly, this is the best of times for loyalty programs,” said Mr. Bolden of the Boston Consulting Group, who recommended that small businesses “focus on the non-earn-and-burn aspects of the program.” He suggested that spas consider a separate waiting room for their app-identified best customers.

“Or when the treatment is over, you hand the customer a glass of Champagne and strawberries,” he added. “If you’re an apparel retailer and you get in a new line from a new designer, invite the top 5 percent of your customers in first so they can see it before anyone else.” The point is that many effective rewards need not cost much to bestow.

Driving behavior is not all about a discount.  Understanding what your customers want and delivering them an experience is more important than a discount.  Because a customer that is coming just for a discount is more than likely not your most loyal customer.

“With apps you now can target specific customers and influence specific behaviors and keep track of all the results and understand the results,” Mr. Smylie said. “Because the check-level detail is now tied to a customer’s profile, we can understand what their purchasing behavior is, what their interests are and cross-reference that against their social media profiles and market to them more effectively and involve them at a deeper level with our brand.”

 

Keeping Up With Today’s Loyalty Demands

Originally posted on IBM’s Smarter Commerce blog:

Loyalty marketing is more and more prominent in today’s retail landscape. It is becoming common knowledge that customer acquisition costs are increasingly rising, and data-driven customer retention is a key area filled with untapped growth potential. But loyalty marketing is evolving and is more intricate than just offering discounts to existing customers. As many marketers realize, there are three common problems that they run into when trying to implement an effective loyalty program:

1. They often feel stuck offering dollars-off discounts and are losing their margins without sustainably changing their customer behavior.

2. Personalization is not going further than using much more than a first and last name, and is not connecting to the customer and building customer relationships.

3. Their loyalty members are not actively participating and being engaged, and consequently not influencing long term results.

It is a buyers market as they would say in the real-estate business.  Customers have the ability to buy from a multitude of companies with fairly frictionless transactions.  Years ago, a customer would be limited to their location to buy many of the items they can now purchase online, which makes loyalty marketing a much harder task today.  If the customer does not like an experience they have with your company, the friction to switch providers is much easier than in the past.

This has led to a race to the bottom with most companies.  Instead of competing on differentiation, companies rely on sales and discounting to compete in this new world.  Relying on discounts is not differentiated at all.  Any competitor can match a price or beat the price if they are willing to decrease their margins for the business.  As I wrote in Busy is Not a Strategy, many of your competitors will look at metrics like volume as their key metric which will force them to decrease margins and hurt your business.  

Increasing Self-Identification

Loyalty incentivizes customers to provide more information about themselves and engage across channels, which leads to a richer understanding of your customers and how they interact with your brand. You may be surprised how many of them are open to providing information about themselves in order to receive more relevant communications and offers.

Spending most of my time in the casino industry has shown me that consumers willingly give away information in return for a richer experience.  In the case of the casinos this comes in the form of comps, but in other industries this does not have to be a giveaway.  This could be access to sales, in the case of grocery stores.  Find out what your version of the comp is to increase customer self-identification.  It may start off as a giveaway, but don't let it drive the future customer experiences with that customer.  

Taking Personalization to the Next Level

In addition to increasing customer self-identification, you should track and analyze metrics such as order frequency, average order value, and from which channels customers are purchasing. Modern loyalty programs gather this customer data and provide a centralized hub which is used to personalize meaningful incentives and rewards for higher customer redemption and satisfaction, and also to send personalized messages. These messages can be targeted towards specific actions and customer segments, and are used to maintain relevance and build upon customer-brand relationships by making customers feel like you are paying attention to what they want.

If you aren't tracking the purchases of your customers then you aren't going to be successful in loyalty marketing.  Creating meaningful customer experiences relies on gaining insight to the behavior of the customer.  By getting the customer to opt-in, it allows the business to create the true value from the loyalty program as I wrote here.  Targeted content will create meaningful customer experiences and this rich data is at the core.  

Cohesive Omni-Channel Capabilities

With today’s consumer having the ability to interact with your brand across all channels, it is essential to have cohesive communication, connectivity of data, and customer access to your program and rewards at all touch points. Different consumers like to interact with brands through different channels – whether in-store, social media, or email – and your program should be available in their preferred channel.

Providing the same experience for the customer, no matter what channel they are using, is the key to creating meaningful customer experiences.  This is the hard part of the new customer experience paradigm.  Keeping the content and messaging across channels in an online and offline world can be complex, but is very rewarding.  Customers don't care that different divisions in the company have different responsibilities and the online team doesn't communicate effectively with the operations team.  Customers expect their experience to be seamless across channels and it is imperative that businesses adjust to create this seamless customer experience. 

Marketers, You’re Thinking About Loyalty Programs All Wrong, And Other Consumer Disconnects [Study]

By Ginny Marvin:

Companies expecting to sit back and rely on their loyalty programs need to take a hard look at how their programs connect with key customers.

I wrote about the true purpose of loyalty programs earlier and this survey really brings to light that piece.  Marketers want to sit back and let the loyalty program be the driver of loyalty business, when that is just a piece of the puzzle.  There's so much rich, valuable data that comes with the loyalty program, that is what should be the focus, using the program as the carrot to give as much data about the customer as possible.  

Nearly three-quarters of consumers (73 percent) said that loyalty programs should be for brands to show appreciation for their loyal customers. And yet, two-thirds (66 percent) of marketers see it the other way around: loyalty programs are for consumers to show their commitment to their businesses.  “Businesses must revise their strategy and prove to consumers that loyalty goes both ways,” the report’s authors point out.  

It is troubling to see so many marketers looking upon their loyalty programs like this.  We all know that customers will want the most they can get out of the program and nothing is ever enough, but marketers need to be more strategic.

Similar to the complaints about loyalty programs being used by companies to get the sale rather than develop customer relationships, consumers also have gripes about email marketing practices. Interestingly, businesses seem to know their is a problem but can’t seem to change bad habits.

While 58 percent of the marketing executives polled acknowledged that customers don’t want to be sold, companies continue to pummel consumers with untargeted, untimely offers. Many businesses know this is a problem. Over a quarter (28 percent) of companies said they believe the reason consumers most often unsubscribe is because they’re sending too many emails and irrelevant offers. Consumers agree: just 10 percent said the majority of promotional marketing they receive is relevant to their purchase interest.

Marketers need to combine the practices of the loyalty program and email marketing (all of digital marketing for that matter) under one umbrella.  All of these disciplines need to work hand in hand.  I talked about companies changing their organizational structure to accommodate the new digital marketing age.  

When 90 percent of the promotional marketing customers receive is irrelevant, there is a problem.  I know in the emails I receive this is the case.  With so much data about customers, it is a wonder this still is happening in 2015.  As has been my mantra since Adobe Summit, relevant content will be the key to better customer experiences.   

Even though companies are getting better about the frequency of emails, there is still a faction of email marketers that believe more is better.  The secret to frequency of emails is to engage the customer a little more than the frequency in which they buy from you.  This way there is not an over saturation of emails, but there is also the opportunity to drive more frequency.

DIB Digital Trends Report 2015_EMEA

I'm reading through the DIB Digital Trends Report for 2015 and there is some interesting tidbits.  For one, on Figure 5, what is the most exciting opportunity in 2015 vs last year.  Customer Experience has jumped into a huge lead, while Mobile and Social have fallen.  Why is this?  I believe organizations are starting to realize that both of those decliners are just channels.  Channels for your content to create great customer experiences.  Mobile shouldn't be your strategy any more than email.  I view content marketing and personalization as the same thing.  If your content isn't personal, then work needs to be done on your content.  However, I understand why they are separated here.  I believe multi channel campaign management needs to rate higher on these lists.  This is the engine that will run most of this,

Another interesting section is asking what companies plan on how they will differentiate themselves from their competitors within the next 5 years.  The report states they are surprised that price is only 5%.  I believe organizations will try to differentiate through customer experience, and maybe there is some bias in the respondents, because these companies are probably a little more innovative than the typical organization.  I believe companies tend to fall to price differentiation because it is the easiest way to gain sales and market share.  

Number 1 and 2 are intrinsically related.  As I wrote here, companies that focus on design will constantly look to improve on 1 and 2.  A design first mentality puts the experience and the quality ahead of all else.  Companies who are answering these questions should be looking to change their culture to a design culture before tackling these differentiators, or else the strategy may fail.

Strategy does not work without the culture to back it up.  The fact the respondents have listed strategy before culture leads me to believe these initiatives have a higher chance of failure.  If the culture of the company does not support the strategy, it will take too large of an effort to accomplish being customer first.

These are my thoughts halfway through the document.  Tomorrow I will comment on the next piece of the document.  Very interesting stuff.  Organizations are saying the right things, but with anything, it is all in the implementation.  The next 5 years will be very exciting indeed.

Customer Experience Focused Company? Focus on Design

I was just reading Ben Thompson's latest member post regarding Cyanogen in India.  On a side note, if you don't subscribe to the daily update, it is worth every penny, great insights.  Anyway, he mentions how Cyanogen is focused on engineering around Android so they don't have to be reliant on Google.  Thompson then went on to say the engineering solution is not focused on the customer experience, so it will have a hard time competing in the consumer market.

This got me thinking about the different kinds of companies there are and to dominate in the consumer space, what should a company be driven by to succeed.  I'm sure I'm missing different types of companies, so feel free to let me know if I missed any, but there are a few different types of companies that come to mind:

• Engineering driven companies
• Sales driven companies
• Marketing driven companies
• Financial driven companies
• Design driven companies

I contend the design driven company is the only company that can truly have long-term success in the consumer market.  The design driven company can beat low-cost competitors and drive sustainable profits.  This is the Apple story.

Engineering Driven Companies

These companies are engineer focused.  They look at the world through all the cool stuff they can build, whether it be technology or buildings, the engineer rules the roost in this company.  The problem with the engineering focused companies is they forget the customer experience and focus on the technology.  The need to create something cool outweighs the need to solve a problem.  Samsung fell into this trap with the Galaxy's, especially 4 and 5.  

By not first looking at the customer experience and then trying to solve the customers problems, a company will create cool technology and then try to fit a customer experience around the cool technology.  This will not have sustainability in the consumer space.  The mass consumer will be confused by the technology and get frustrated with the experience.  Eventually that consumer will choose to churn and choose another product that focuses more on their experiences rather than cool technology.

Sales Driven Companies

These companies are focused on making the next sale.  They look at the world through the need to solve the next customers problem, not the customer experience.  A sales driven organization tends to try to be everything to everyone, and we all know how that story ends.  The need to sell the most and constantly focusing on acquisition drives companies to lose focus on retaining customers.  Microsoft was led by a salesperson for many years and while they had success for many of those, they were disrupted many times over.    

By focusing on selling the most of something, the customer experience becomes muddled.  To serve many masters, a company must focus on creating many different experiences at many different price points for the customer.  This creates no expertise in one area and allows for disruption to come from all angles.  Focus is the key to customer experience and the sales driven company has a hard time selling when everyone is not their customer.  When the focus is on the customer experience, a company can acquire and retain at the same time

Marketing Driven Companies

These companies are focused on making the company well known.  They look at the world through their message.  They focus their time to try and get someone to buy a product or position themselves in the minds of the consumer through advertising and social media.  The infatuation with their own creativity and messaging tends to put the focus on the company, not on the customer experience.

By focusing on branding and messaging, the customer experience becomes secondary.  The metrics of this company is awareness and likes, instead of on customer satisfaction and experience.  The marketing company believes they can convince anyone to buy and the power of the brand will hide all sins.  Customers in the long run will not be loyal to the brand if the experience is not up to par.  They may want to stay with the brand, but they will churn for the fact that being cool and hip is not satisfying their ultimate need for the best experience.

Financial Driven Companies

These companies focus on making as much money for their shareholders as possible.  They look at the world through profits and cash flows, leaving the customer as a means to an end for those metrics.  The desire to make the most money trumps the customer experience in all cases, unless there is a clear-cut ROI for that experience.  These companies get uncomfortable with words like experience, because it can't necessarily be measured or used to create a proforma.  

By focusing on profits, the customer experience tends to fall off in favor of saving expenses.  This company will question R&D and figure out ways to save money now, while sacrificing the future of the company.  Wall Street may like the short term gains of focusing on profits, but when the customer experience erodes and the customers start to churn 3-5 years down the line, it then becomes a marketing or product issue.  These may be the least sustainable businesses in the long run.

Design Driven Companies

These companies focus on the design of what they are producing.  They look at the world through solving problems.  The desire to take a customer experience and make it better trumps profits and sales.  The belief in a design driven company is that if the customer experience is better than all others, the profits and sales will follow. Design is how it works, not just how it looks.  

I used to think that Apple was a marketing company.  Of course I did, I was a marketer and Steve Jobs would get up on stage and do great keynotes and their advertising was second to none.  They had to be a marketing company.  If they were just a marketing company, then they would have already been disrupted.  The iPhone would not be a dominate player and they would be a niche product company with nice profits.  

The fact Apple is a design company has kept them from being disrupted.  Their products are designed with the customer experience at the forefront.  Being able to pay for something without having to pull out your wallet with the touch of your finger is a simple solution.  That solution is not coming from a space of engineering, it is coming from a space of design.  Apple looked at the problem and designed a solution that was easy for the customer to use and that is why people use Apple Pay, otherwise Google would have already been the owner of the space because they were first.

When a company is design focused they don't have to be first.  These companies want to truly solve customer problems, not be fast to market.  If the design company can't solve a problem, they won't enter that market.  A design company will be long-lasting and survive into the future because they care about the people paying money to use their products and services.  Those products and services are designed for the customers they serve, not to take advantage of a need of the customer, but to truly solve their problems.  That is true design.   

Marketing Is Dead, and Loyalty Killed It - HBR

Hmmmmm.  I thought I would love this article from the title, but it really was lacking any real insight.  Sure, everyone can point to Apple and say look, they really didn't do any marketing and they sold 74 million devices at $700 a piece.  It took many years and building a sticky ecosystem for them to be able to get to that point.  Loyalty should always be the main goal of your business, but marketing is still an intricate part of that equation.