Sears Could Disrupt Throwaway Tech Culture

It's funny the timing of this article.  I was just talking with my wife about Sears and how it seems they have no future, it's only a matter of time before the Sears retail store as we know it will no longer exist.  Then to read a headline about Sears disrupting?  Heck ya I'm interested.

The company has launched a Seattle office, and recruited retail tech execs to help it get a handle on the data it has amassed from the 40,000+ daily service queries its Home Services group collects on washing machines, refrigerators, and other appliances. It turns out that the industry average is that about 1 out of every 4 customers don’t get their appliance woes fixed on the first visit. 

“Each truck carries about 400 parts, yet those annual service calls require something like 168,000 different parts,” explained Arun Arora, the group’s president. “We’d have to have our 7,000 certified technicians driving semis around to anticipate them.”

"Big data" has so many applications and to see Sears trying to disrupt in a way that doesn't make headlines is impressive.  This kind of disruption, even though on the surface looks like a cost-savings initiative, can revolutionize the service of appliances.  Why does that matter?  Because loyalty is the name of the game.  If they make the experience of owning a machine better, even when it is getting old and needs some new life breathed into it, they can increase their base of loyal active customers.  

The more customers that are active with a company the more they will make.  If Sears can increase the number of loyal customers by offering a superior customer experience of ownership, they can drive more sales in other areas.  It is the process of rebuilding trust with a brand.  If I knew buying an oven will have a longer shelf-life and the company where I was buying it can make that happen, then it makes where I buy more interesting.  

So many times in the retail space it comes down to price.  Everyone sells ovens and mostly from the same manufacturers, so there is very little to differentiate.  The easiest rode to differentiation is price.  The problem is when competing on price, the business can never win.  They are not cultivating loyal customers, in fact they are probably selling to the exact wrong customer.  If a customer is only going to choose on price, they are by definition not loyal customers.  If Sears can differentiate beyond price and experience in the stores, they can grow their loyal database.  That's a big win.   

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?

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.