Comcast looks to boost customer experience by mimicking the Apple retail strategy

Stores are less and less a place to buy something, and more and more a place you go to do something else. Businesses which realize this will have greater customer engagement and loyalty. 

USA Today: Coffee, iPhones, Wi-Fi? If you thought this was Starbucks or Apple, surprise! It’s Comcast, 2018-May-21 by Charisse Jones

Comcast is betting its new retail stores with giant video screens and comfy couches will help strengthen its connection to customers. There will be zones where they can try out products ranging from Comcast's X1 video player to smart locks controlled with the tap of an iPad.

Comcast plans to set up shop in malls and shopping centers, sometimes moving into spaces that more traditional chains have left empty after struggling with slipping sales.

The stores will be more akin to the sleek, interactive spaces pioneered by tech titan Apple, designed as much around experiencing gadgets as they are to selling them.... 

Comcast customers will be able to continue taking care of routine tasks such as paying bills or swapping out equipment at the new stores. But they will also be able to try out Xfinity apps with various devices in different sections of the store. 

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How loyalty has become a hobby for customers at Marriott

The absolute best result we can get from a loyalty program is that it gets customers more involved with the brand. 

NY Times: Meet the People Who Can’t Get Enough Hotel Points (You’ll Learn Something), 2018-May-15 by Alan Blinder

“I’ve had a chance to read some of your posts,” Mr. Flueck [David Flueck, SVP Global Loyalty] told the group in a tone that set off a roar of laughter.

“We were just kidding,” a woman called out.

Except they almost certainly weren’t.

A gathering of self-educated points experts — and the notion that Marriott would send an executive to spend Saturday night at it — is a reflection of simultaneous eras: one in which travel loyalty currencies have come to stand as both a hobby and cottage industry, and one in which the internet has seemingly transformed everyone into an airline, hotel or restaurant critic.

In the early 1980s, when the most consequential frequent flier programs made their debuts, industry executives thought they were giving rise only to a clever marketing effort that would discourage travelers from toggling among brands. They did not foresee that, decades later, people would be weaving together weekends built around pub crawls and points strategies.

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Loyalty from the inside out at Hilton Hotels

Making sure the employees appreciate and have access to our company's products is key to building loyalty.

Quartz at Work: Hilton Hotels' newest upgrades are strictly for staff, 2018-Apr-2 by Oliver Staley

“Our mission is to be the most hospitable company in the world, and you can’t do that without great people, and you can’t get great people without being a great workplace,” says Matt Schuyler, Hilton’s chief human resources officer. “We can’t have a dungeonous back of house and expect people to have a great workplace.”... 

Hilton and Hyatt are part of growing wave of companies recognizing that money spent on blue-collar workers should be viewed less as an expense to be eliminated, but rather an investment that can reduce costs and improve revenues. Costco, the warehouse retailer, was a prominent early adopter of what MIT lecturer and author Zeynep Ton has dubbed “the Good Jobs Strategy” and other companies have followed, including Starbucks, JetBlue, and Trader Joe’s. Even Walmart, long notorious for its low wages, has realized it needs to improve pay and working conditions if it wants to compete with Amazon....

At Hilton, the investments in service workers are paying for themselves in the higher quality of applicants for vacancies and lower turnover, says Gareth Fox, a vice president for human resources in the Americas, who heads the initiative that Hilton calls Heart of House. Turnover at all US properties fell 6% in 2017, saving about $30 million annually. Among millennials, a famously restless demographic, turnover in the US fell 13% last year, Fox says.... 

The company also overhauled its program for employee discounts at its 5,000-plus hotels....

Employees can book up to 30 nights a year for a fee equal to the cost for cleaning a room. At the budget Hampton Inn, it’s $35 a night. Friends and family of employees are eligible for a discount of 50% off the hotel’s best rate, also up to 30 nights a year. There are additional lifetime benefits for long-tenured employees, who can take advantage of the rates even after they leave the company or retire.

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How Warby Parker recognizes the opportunity in unhappy customers

A frustrated or disappointed customer = an opportunity.

MyCustomer.com: How to be more human, 2018-May-8 by Jeanne Bliss

The first ground rule at Warby Parker is “treat customers the way you’d want to be treated”. When you call them, with those crumpled up glasses in your hand, or for any other reason, a human being answers your call within six seconds. They are a company of people with common values and a series of rituals that fuse them together (such as receiving a copy of Kerouac’s “Dharma Bums,” whose early characters were names Warby Pepper and Zagg Parker). So you are always greeted with someone happy to be on that phone with you – because they work for a company whose values let them take selfless actions that put others before themselves: actions which help them to grow their business.

Through a culture and operation built on value, trust and personality, the number one driver of sales for Warby Parker is word-of-mouth. Their Net Promoter Score is near 84 – eclipsing other optical retailers performing in single digits. They have grown to an estimated valuation exceeding 1.2 billion. US sales are projected to increase 20% in 2017, on top of a 28% growth in 2016, according to market research firm 1010data. When other retailers are closing stores, they are opening 25. 

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How Foot Locker is evolving their stores to support local partners

Like West Elm, Foot Locker is strengthening the appeal of their stores by supporting local businesses. As more of us avoid national (non-local) retailers as much as possible, this strategy will become more common.

Quartz: Foot Locker’s CEO says “retail apocalypse” headlines are missing the point, 2018-May-4 by Marc Bain

One thing they’re doing is tailoring stores to specific markets by working with local artists and influencers. They’re also considering services you can’t get online, whether that means putting a barber shop in the back, or having a sneaker cleaner come in once a week so folks can get their shoes freshened up.

“The real headline wasn’t that we’re closing 100 doors,” Johnson insisted. “It’s that we’re opening 40 and they’re going to be really special places for our consumer to come and engage with our brand.”

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24 Hour Fitness understands why their customers lapse

When we look at our value exchange with a gym, the most challenging part is maintaining our participation. For years, shortsighted gyms have enjoyed excess profits from people who pay but don't use the facilities. Now 24 Hour Fitness is confronting the issue and testing many different ways to keep their customers involved.

AdExchanger: 24 Hour Fitness Markets Mindset, Not Just Amenities, 2018-Apr-30, Interview of CMO Tom Lapcevic by Kelly Liyakasa

How are you balancing new member acquisition vs. retention?

We used to try to bring people in with offers, but our goal now is to reach out and get people engaged with fitness.

We look at information we have where we can help people, deliver them workouts, improve their ability to work out at home with video and help them overcome the intimidation of fitness. So, our first goal is to help people get started with fitness, whether they come to us or a competitor. We send millions of communications per month with the primary goal of helping people get engaged with fitness, and we hope, from a business perspective, we help them progress.

What’s your top challenge?

We don’t lose members to competitive facilities. We lose them to inactivity. It’s why we’re so focused on each phase of the consumer journey. When people do join us, we need to onboard them in an appropriate way, and when they walk into our clubs, we push a personalized workout to them because we’ll know what amenities and services they’ll have access to within a specific facility. We also wanted to create a delivery vehicle of programming and content to keep them engaged.

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How Zara is setting new marketing standards with retail customers

With all the changes flying around the brick-and-mortar channel of retail commerce, it can be very difficult to organize what we're learning and figure out how to apply it. A professor at the Fashion Institute of Technology, Shelley Kohan, offers an excellent way to organize a strategy, based on her study of Zara. And consultant Pamela Danziger paints a great picture of how it plays out on the store floor. 

The 4 E's describe how Zara has put the customer in charge... For a company to do that, it has to be organized to learn from the customer and keep up with them in its operations. Are you interested in more loyal retail customers? Then consider:

Forbes contributor: Why Zara Succeeds, 2018-Apr-23 by Pamela N. Danziger

Creating customer curiosity is a most powerful pull marketing strategy. Every human being is innately programmed to satisfy it. With this new AR application and in so many other ways, Zara excels by pulling customers into the brand, unlike its closest competitor H&M, which remains fixed on pushing its brand and product out to the customer.

In studying these two oft-compared brands, the essential differences revolve around their overall approach to marketing. H&M still is fixed on the old 4Ps of marketing model—Product, Price, Promotion and Place—where the company and the brand is the focus.

By contrast Zara has evolved to the new 4Es of marketing strategy—Experience replaces Product; Exchange is new Price; Evangelism is now Promotion; and Every Place is new Place—that puts the customer at the center around which the company and brand revolve.... 

Shelley E. Kohan, assistant professor Fashion Institute of Technology, recently shared an analysis of the Zara difference based upon the 4Es marketing concept.... 

Zara has a deep understanding of the entire value proposition it exchanges with the customers. Its fast-fashion deliverable is available in the quantity, format and time in which the customer needs the product. That translates into great value.

In planning a loyalty program, we need to keep our eye on the "exchange" of value. Most customers join a loyalty program because they do plan to spend with a retailer, and the program will help them maximize the value they realize in that exchange. 

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Marriott innovates at Coachella, lets loyalty members bid on yurts

This Marriott promotion is so much fun. It makes it such a privilege to be a member of their loyalty program. 

Adweek: Why Marriott Continues to Bet Big on These Incredible Pop-Up Hotel Rooms at Coachella, 2018-Apr-12 by Katie Richards

Marriott is offering guests a chance to stay in yurts, a circular tent, decked out with all the essential music festival necessities including Wi-Fi, a private restroom and shower, a stocked minifridge and 24-hour security....

“Everything we are seeing now is all about the experiences,” said Ed Horne, evp of Endeavor Global Marketing, which partnered with Marriott on its 2017 activation at Coachella as well as the latest effort. “It is all about elevating the experience and sharing that out socially and digitally with your friends and followers.”

Instead of paying with real money for the yurts, Marriott opened a bidding platform on SPG Moments on Starwood’s website—Marriott acquired Starwood Hotels & Resorts in September 2016—and let members bid for the rooms using their accumulated loyalty points. The yurts went for as many as 822,500 points. 

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The Starbucks approach being adapted by loyalty startup MunchMoney

When we first heard about MunchMoney innovating restaurant loyalty, we thought hmmm... maybe we'll wait and see if this succeeds before we talk about it.  Then we saw an article about an investment analyst who downgraded Starbucks stock because they had lagging loyalty-card signups. 

Loyalty programs can drive both profits and revenue growth, especially by improving share of wallet--the amount that existing customers are spending. It's unusual to see them slammed so hard for not driving new customer growth, but we have an interesting situation here. Because the Starbucks loyalty card must be preloaded with funds (like a gift card), analysts are extrapolating revenue growth from new signups. Low signups become a leading indicator of lower future revenue. Hmm... again.*

BUT... we are not about investing—we are about designing loyalty programs, and the most important feature of MunchMoney is that, like the Starbucks program, it requires users to preload the card. However, there are major differences. 

InnovateLI: Ready to Roll, MunchMoney Already Tastes the Big Time, 2018-Mar-29 by Gregory Zeller

One day, the munchies struck again and Kane was rummaging his wallet to fund a Chipotle run – and suddenly the final piece of this creative puzzle fell into place, in the form of a nostalgic memory. The James Madison graduate found himself longing for his old college meal plan, that no-fuss, no-muss prepaid account that eschewed cash and ensured his plate was always filled with his personal dining hall favorites.

Entrepreneurial instincts twitching, Kane dove deep into Quick Serve Restaurant industry customer-loyalty programs and learned most failed to significantly drive up business. Save one: The loyalty program sponsored by ubiquitous coffee chain Starbucks is “massively successful,” according to Kane, who notes one key difference in the coffee king’s model. Starbucks works on a pre-payment model (like a phone card), wherein customers load up their accounts with cash first, then enjoy the cumulative benefits of loyalty. “So now they’re capturing this massive upfront cashflow, which is a huge advantage to them,” Kane noted. “They’re sitting on a billion dollars in cash because of their loyalty app.”

... Kane and friends officially launched West Islip-based MunchMoney Inc. in January 2017. Its mission: to become “the college meal plan for real life,” according to the CEO, while “reinventing how people interact with fast-casual restaurants.”... Debuting [in May 2018] on both Android and iOS devices, the app will allow users to deposit funds directly into accounts at participating restaurants – already a step beyond the typical loyalty program (and closer to that Starbucks model), Kane noted, with the user “paying up front and giving up the choice of spending that money somewhere else.” [Emphasis added.] ... 

MunchMoney will also guarantee a 10 percent discount on the total bill every time a customer pays through the app, while giving its member restaurants the opportunity to tack on additional incentives.

The app launches with two Hauppauge restaurants aboard, The Sexy Salad and Build a Burger, whom Kane framed as brave first adopters, willing to roll where other restaurateurs fear to tread.

*We've actually heard about another way investors may use loyalty data: Japan's Loyalty Cards Provide a Sneak Peek at Company Profits, from Bloomberg, January 2018. 

More details about the Starbucks situation. 

PYMNTS.com: Retail Analysts Whack Starbucks Over Flatlined Consumer Loyalty, 2018-Apr-16

Concerns over customer loyalty — as well as increasing competition in the craft coffee market — have caused one Wall Street analyst to cut his price target on Starbucks. In fact, Cowen analyst Andrew Charles said both factors are likely to hinder Starbucks sales over the next two years, according to CNBC. As a result, he downgraded the coffee company to market perform from outperform. The analyst also cut his price target on shares of Starbucks to $65 from $68, implying 9 percent upside over the next 12 months. Starbucks did not immediately respond to comment, but its shares fell 0.3 percent on Friday.

One of the biggest concerns for the coffee retailer is customer loyalty. Starbucks experienced an unusually light period of gift card activations during last year’s holiday season, which will have an impact on the success of loyalty efforts for 2018.

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Content designed to drive loyalty at Marriott

Branded content thrives on customer curiosity. I think that's an amazing insight!

Campaign (Asia edition): Brands needs to make loyalty, not content for content's sake: Marriott marketer, 2018-Mar-28, Interview of Tony Chow, APAC director of creative and content marketing for Marriott International, by Soon Chen Kang

Citing American Express as an example of a brand using content marketing effectively, Chow said that content is not a short-term game. “You can’t expect it to be an instant, overnight success," he said. "Content marketing needs a long-term investment. Building trust and loyalty is a relationship, just like falling in love, going through the whole courtship before getting married."

Having a content studio and being its own publisher is one way for Marriott to grow its audience organically, Chow told Campaign Asia-Pacific after his on-stage appearance. Having said that, he agreed that paid media provides a good balance in driving awareness and audience to the brand’s distribution channel. “We want to focus on our own platform to engage more with our consumers, tell them about our new developments," he said. "A part of the process about getting loyalty is building a community."

In terms of content that audiences will find engaging, Chow said storytelling thrives on curiosity, and the hospitality brand did not have to look further than using its own staff as cast. “The best way to tell stories is to leverage on authenticity," he said. "Real stories are more powerful. We want to utilitize people that we don’t see all the time—the bartenders, the chefs. That will build a connection with the audience based on what they experience when staying at a hotel.”

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