How Kmart knows you’re pregnant before your family does.

March 1, 2012 By Leave a Comment

This is a fascinating insight into the state of the art in triggered and reactive marketing. In a longish, but very good article, the New York Times provides some great case study material on how Target in the US identifies and targets, no pun intended, women who are pregnant BEFORE they buy any pregnancy related goods or services. With this head start on the competition they are able to generate excellent returns on their marketing.

Do you know any companies working at this level of sophistication? Let me know.

Here is the full article: How Companies Learn Your Secrets

Filed Under: Best Practices, Customer Analytics, Customer Strategy, Trigger Marketing

Customer delight can be worse than a baby bonus

December 20, 2011 By Leave a Comment

Recently there was much ado in Australia as the Federal Government slightly reduced (less than 10%) the amount of money that it gives to new parents: the so called Baby Bonus. The reduction in this grant has caused a lot of dissatisfaction in the community. Could your customer delight program cause a similar backlash?

Customer Delight can be counter-productive

Introduced about 5 years ago the $5,400 baby bonus was given to parents on the birth of each child and was seen as a true bonus by families who had no prior expectation of receiving it. However, that was when the world economy was not on the financial edge and Federal Government finances were flush. At the time, at the Federal Government level, Australia had a net government surplus, i.e. cash in the bank. Almost unheard of in the Western world.

Well times change and in the November mini-budget the government cut the amount to $5,000 and the media was full of unhappy people: it’s just not fair they shouted in chorus. “How dare the Government take my money”. How did we go from voters delighted at an unexpected windfall to voters decrying the government taking what is “rightfully mine”?

Now it’s fair to say that there may have been a level of media beat up in the response to this announcement but it doesn’t mean that there was no impact on the perception of government.

The problem that the Government faced is very similar to the one that many customer loyalty programs suffer. One you get a customer used to a certain level of service or functionality it is very difficult to reduce that level without backlash and dissatisfaction.

If you give them a Gold Card with exclusive benefits because they travel X thousand miles a year they will love you but try taking it away when they change jobs and only travel twice a year.

What is the solution?

I think that the current mantra to delight the customer is over rated and most organizations are unable to convert the idea into a reliable process [1]. More importantly delighted customers have their basic expectations upgraded and are less satisfied and loyal if you try to return to the previous level of service.

Even though I do not subscribe to all the points made in “Stop Trying to Delight your Customers” I do agree with the concept that delivering your core offering efficiently, accurately and consistently is key to long-term success.

Why do I buy from Amazon: because they deliver on the core requirements and make it easy.

If I want a book I can be 99% sure that Amazon will have it. When I find it I know that I can buy it with one click and have it delivered in hard copy in a few days (I live in Australia) or instantly via Kindle. Total time to complete the task, maybe  30 seconds. Really, there is no delight in the process but there is loads of competent, easy to use, service offering.

Customer delight may seem like a good idea but you are more likely to generate long-term, loyal customers by consistently delivering your core offering and making it easy for your customer. Plus it is a lot easy to implement than customer delight.

More Information

Customer Loyalty Program Health Check

Even the best and most effective customer loyalty programs need to be monitored and assessed on a regular basis to ensure they are operating at peak effectiveness. See our Customer Loyalty Program Health Check for a check-up on your program.

 

 

[1] If you can’t convert an idea into a process it has no place in business. While it’s nice to believe that every employee is an individual and can star in their own right and in their own way, it’s not practical, scalable or fair. How can it be fair to exhort staff to delight customers but not give them any way to reliably to do it or measure their success?

By Adam Ramshaw

 

Filed Under: Customer Loyalty Management, Customer Strategy Tagged With:

How to use customer feedback to directly drive revenue

November 8, 2011 By Leave a Comment

using customer feedback to drive revenueIt’s been a busy six months.  You’ve rolled out a best practice transactional customer feedback process using Net Promoter Score as your KPI of choice.

The whole thing is going great with customer feedback comments flooding in.  You’re driving tactical service recovery processes and starting to look at strategic customer experience changes.

Then it hits you, even though you’re identifying customer advocates like never before, you’re doing nothing to directly drive new sales with that information!

Day in day out customers are putting their hand up and saying, in no uncertain terms, “I really, really, like your company”.  So why aren’t you helping them to spread the word?

Customer advocates can be a powerful sales driver

Working with your customer advocates can drive enormous value for your business.[1]

  • You don’t need to pay customer evangelists – most of the time you just need to get out of their way.
  • It’s effective – I shouldn’t need to convince you that customer recommendations are an incredibly powerful sales tool.
  • It’s fun - How much better can it get than working with people who love your product or service.

How do you find them?

That part is easy.  If you already have a transactional Net Promoter Score process up and running using, say, CustomerGauge, then everyone who scores you a 9 or 10 is likely to be a customer advocate.

If you haven’t implemented transactional Net Promoter Score perhaps you may have another customer feedback process or even a loyalty scheme that you can analyse for high rate purchasers who may also be advocates.  Or you may even have a social media monitoring process that will let you know who is saying great things about you.

Whichever approach you use, try to link it back to the person’s contact and purchasing history.  With that information you will be able to drive the most action.

How do you help them to help you?

Step 1: Segment

Just like the rest of your customers, not all advocates are the same.  You have to be craft an offer that will appeal to them in order to be successful.

Look to the segmentation approaches that have been successful for your business  the past and see if they are applicable in this program.  Perhaps you can create value sensitive programs for low value customers or custom programs for high value customers.  In short, start with what has been proven to work for your business.

Step 2: Craft your offers

Your first impulse may be to send your customer advocate a standard “refer a friend” or discount coupon offer.  Don’t. While these work in other situations, for your customer advocate they are a slap in the face.

Stop and think about it for a moment.  This person has indicated that they are an advocate for you.  If you send them a “refer a friend” coupon you become just another company wanting to use their good graces to grab some more sales.

Try a different approach 

How about an offer that goes:

“We really appreciate your recent feedback.  In it you indicated you were a strong supporter of our company.  Thank you. If you do recommend us to a friend or colleague please have them use this special telephone number/access code/restricted portal.  This is our priority customer line and will ensure that they get the very best service when they contact us.”

Why this works

  1. Acknowledging the person’s feedback in a sensible way.  Do this and their already high perception of you will go up.
  2. They feel special: almost like a Platinum Frequent Flyer but without the overhead of all those gate lounges.
  3. They are reassured that their friend will get a great customer experience so their innate fear that their friend might have a bad experience and think poorly of them is abated.
  4. They will want to pass on this special privilege as quickly as possible.

Of course you have to be able to deliver on that priority service experience, but that’s a given.

Step 3: Do it now

The program you see here is a classic triggered marketing program.  As in all such programs; speed of the essence.  In fact: speed beats perfection every time.

If you already have a transactional Net Promoter Score process then you probably already have the data source and initial processes you need to get this up and running.

 

More Information

If you’re looking for a transactional Net Promoter Score system check out CustomerGauge NPS data collection and reporting system (full disclosure: we sell the CustomerGauge system in Asia).

If you’re new to trigger based marketing why not download our free “Implementing Trigger-based Marketing to Drive Customer Loyalty” presentation.  It includes lots of success statistics, case studies and is a good introduction to this valuable approach.

For a full presentation of these ideas check out the full webinar: Harvesting you Company’s Advocates

 

[1] Adapted from Forward to the book, Creating customer evangelists, by Ben McConnell and Jackie Huba

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

By Adam Ramshaw

 

 

Filed Under: Customer Feedback Process, Customer Strategy, Marketing Automation, Net Promoter Score

Protecting Customers from your Marketing

September 27, 2011 By Leave a Comment

“Capturing Customers”, “Luring Customers”, “Attracting Customers” and “Keeping Customers” are all terms used daily in marketing departments.  They invoke images of carefully prepared fly patterns, practiced casts and the adrenalin of a good strike, ending with the satisfaction of a catch of the legal size, a ‘keeper’.

Many organisations view customers in the same way that the fishing industry viewed Atlantic fish stocks.  Stay with me I’ll make this work.

Some marketers, (not you gentle reader) allow various product managers to fish the same customer waters day in day out.  They use nets, lines, perhaps even explosives,in fact  any technique they can to catch all the fish they can for their product line. Large fish, small fish, dolphins and seals, no matter, the sheer weight of fish is all that matters, catch them and the folks in accounts or risk management can sort them out later.

But it can’t go on forever and interesting things happen as fish stocks deplete.

The fish get smarter, other fishermen take too many fish, whatever the reason; basically the fish get harder to catch and the expense per fish climbs. Successful fishing campaigns become rare and marketing more superstitious as ‘luck’ starts to play an increasingly important role in determining which Product Manager gets the good haul. Internal competition for access to the schools of customers increases and increasingly intense fishing worsens the yields.

Sometimes marginal species are harvested in a, short-sighted, effort to keep the canning lines busy; the aquatic equivalent of aggressive discount programs.

Product Managers lobby for increased and more elaborate fishing rigs as they range further and further, perhaps even targeting species considered commercially marginal in the past.

If we are lucky, at some point, governments, alarmed by the threat to their fishing industries, step in. They appoint a governing body to preserve breeding stocks by limiting:

  • the number of product managers allowed to chase the fish,
  • the techniques they use and
  • the times of year they can operate.

Old and inefficient ships are mothballed, replaced with more efficient technology that reduces collateral damage to the customers.

As a group they legislate the number of campaigns allowed and the quality of the fish allowed in a catch.

Importantly they crack down on rouge product managers with “exciting new ways to catch fish” because the problem is not acquisition as much as it is sustained, quality yields. Poaching can ruin decades of planning so all parties sign treaties and help stop uncoordinated campaigns to unsuspecting customers.

They do NOT do this by relying on the self-restraint and self-regulation of individual ship-owning fishermen (product managers). Each and every one of who will insist that the other fishers show restraint first.

Enough fishing

Who “owns” the customer interactions in your company, who makes the rules that govern who does what to whom and when? Marketing? Sales? Accounts Receivables? Branch or Store Managers?

The real objective of defining customer ownership inside the organisation is to allow the enterprise to treat its customers rationally. If your answer is “all of the above”, you run the risk of looking irrational to your customers and overfishing your customer base.

There is nothing rational in offering me a credit card upgrade that is not available when I call the toll-free number provided. It is irrational to offer me a home equity loan and an increased credit card limit in the same mail delivery.  There is nothing rational about writing to me to combine my gas and electricity accounts into one with you when I already have. But I have received these within the last 30 days.

Customer Governor

So the question is; who is ensuring that you act rationally with your customer base and you don’t ruin your long term business?

One answer is establishing the role of Customer Governor, a person or team that researches your customers.  Your organisation needs to understand:

  • customer needs and behaviours,
  • the level of fishing they can sustain before costs exceed the value of the catch and
  • how to profitably sustain the long term relationship between them and your company.

And then sets rules defining customer interaction that are understood, followed and enforced within the company.

The Customer Governor takes on this role and ensures that long term value for the company is maintained and built over time, not squandered.

Customer Experience Management

If you’re looking to implement a customer experience management project why not start by downloading our free 4 Steps to Great Customer Experience Management report.

 

Filed Under: Customer Loyalty Management, Customer Strategy

Customer Loyalty Programs: 5 items for your next grease and oil change

August 19, 2011 By Leave a Comment

We all know what we want from our customer loyalty programs; more, and more profitable, customers.  The trouble is that customers are notoriously fickle, changeable, arbitrary, and our lifeblood.

What worked last month may not work today.

So Loyalty Programs need regular check-ups to make sure they are still achieving their objectives – in just the same way you need to regularly check and service your high performance automobile.

In fact, I sometimes think all Marketing professionals should drive old exotic sports cars, to get a feel for how much tinkering is required to keep relationship marketing initiatives on the road!

So here are five things you should check when you raise the hood of your Customer Loyalty Program;

1. Is it still mechanically sound? Brakes, steering, fluid levels all OK?

It’s easy to assume that because there are no rattles that nothing has fallen off.  However, a quiet customer is sometimes an absent customer, so regularly run through the program operations. For example, though programs vary widely, make sure you are meeting member expectations in yours;

  • Point balances accurate and timely
  • redemptions being fulfilled in a reasonable time
  • web site availability close to 100%
  • if you have earn partners, what percentage of their points are ‘missed points’ claims from customers
  • how long are welcome packs taking to get to new members
  • is my cost per point for the program steady, in my comfort range
  • are my operator SLAs all being measured, reported and met…

Make sure ‘BAU’ does mean ‘Business as Usual’, not ‘Best Are Upset’.

2. Is the ignition system still tuned correctly?

Poorly tuned programs can cost you money by rewarding the ‘wrong’ behaviours. This comes about as prices creep, or sometimes just because the program has succeeded in distilling membership to your loyal and committed customers. When this happens, tier thresholds stop becoming aspirational and start rewarding customer’s regular behaviour.  Worse still, tier advancement and privileges become an entitlement in the eyes of the member, not a thank you for a stretch.

You end up paying more for business you stood a good chance of getting anyway.

Even if your program does not have membership tiers, reward thresholds are subject to the same ‘bracket creep’, and should be reviewed regularly.

Thank Mr Pareto and plot your members into a curve by their value and the percentage of your business they represent.  Make explicit decisions about what percentage of your customers you want to reward and by how much.  Then recalibrate tier thresholds and reward point values. Build in planned value ‘stretches’ where customer types change to encourage members on the ‘cusp’ to spend a little more to achieve the next level/reward.

This is the loyalty program equivalent of the ignition timing light in that exotic sports car.

3. What is your fuel economy?

It is not always easy to measure the mileage you are getting from your customer loyalty program. Proving which action caused customers to stay and spend is difficult. But you do need a fuel flow meter on your program or inevitably the accounting types will question why you don’t take the bus instead.

For Loyalty Programs the flow meter is generally the measure of customer churn and the potential value that a customer who leaves takes with them. Customer Lifetime value measures that look at member retention, segment population and average member value allow us to take a snapshot of the current value of current & future customer cash flow (in today’s dollars), just like a Balance Sheet takes a snapshot of the companies physical assets.

These snapshots, compared over time show the impact your relationship marketing investment is having on member value.

For a more direct measure, or if customer churn is not an issue for you, calculate the sales lift that is required to pay for the program operation and relate this figure to the relative spending of customers who have redeemed in your program versus those who have not in the last X months (determined by your customers shopping frequency). If the difference covers the sales lift required, you have evidence the program is paying its way.

4. Does the car still look good? Paint and body work perfect?

The more a member has to do to earn rewards in your program, i.e. the more valuable the customer, the more important it is that the rewards include status, recognition, and exclusivity. Would your Platinum members be proud to pull your membership card from their wallet? Is your program an MG or a Ferrari? Which image would your target customers prefer; driving cap or helmet?

What others are saying about the program and its image is growing in importance, so a social media strategy is now a critical factor in Loyalty Program success for the members most interested in membership as a badge.

5. And finally, the most important question; is it still fun to drive?

Are customers actively accumulating and spending your currency, joining in your facebook discussions, redeeming  a mix of your rewards (versus cash back)?
Some measures of customer engagement are important to monitor;

  • New enrolments
  • Redemption rates and time to first redemption
  • Points breakage rates and average life of a point
  • Dead spots in the reward catalogue (if you have one)
  • Participation rates in feedback requests

If these measures are falling, perhaps it’s time to think about that super charger or more comfortable suspension?

Getting Help

Genroe offer a Customer Loyalty Program Health Check that covers all of these areas and provides independent, practical advice on how to improve your customer loyalty program.  For more information, please contact us.

Filed Under: Best Practices, Customer Loyalty Management, Customer Strategy
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