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April 2019

6 posts from May 2019

How Fanatics is outmaneuvering Amazon: the fan of fans

Shopping at Amazon seems emotionless to me. We can shop where enthusiasm thrives. Who needs creepy customer stalkers when you could have someone make something special for you? 

Quartz: You might not have heard of Fanatics yet—but it’s taking over sports apparel one league at a time, 2019-Apr-25 by Mike Murphy

In the mid-1990s, you probably would not have noticed Fanatics, even if you lived near one of its handful of Florida mall locations. The stores, called Football Fanatics at the time, looked like any other sports memorabilia outfit. But if you’ve purchased any fan apparel online or at a major US sporting event in the past few years, chances are you’ve spent money with the modern Fanatics. Through a combination of technology, partnerships, and manufacturing, the company has muscled its way into the extremely competitive and unpredictable sports-apparel market. Fanatics is now valued at $4.5 billion, and took on a $1 billion investment from Japanese tech giant SoftBank and others in 2017. Most important, it may have found a way to guard its business against the ever-present threat of Amazon.

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Its new loyalty program is rewarding Starbucks, which is becoming a mobile-focused business

For Starbucks, managing growth is becoming a matter of their loyalty program. New stores will continue to be necessary, but profitability will be driven by customers using their mobile app. Not only are those customers rewarded, they are measured, tested and tracked in a way that retailers haven't known before. In the future, rents will still be paid, but managing a successful retail business will be more about a company's ability to leverage mobile-based relationships. 

The Motley Fool: How Important Is Starbucks' Loyalty Program?, 2019-May-5 by Daniel B. Kline

The program has grown steadily for two reasons. First, it's tied to the company's app, which has a mobile order and pay function that allows customers to skip the line in stores. Second, it offers real value beyond just the rewards you can earn, including access to events like Happy Hours (discounts for certain drinks on some afternoons), days where you can earn double "stars" (rewards points), and other special offers.

For consumers, it makes sense to join Starbucks Rewards because the app makes it easier to place and receive an order in a timely fashion. CEO Kevin Johnson gave an update on the program's growth during the company's second-quarter earnings call.

"With respect to driving digital relationships, we are pleased with the continued momentum of our Starbucks Rewards program," he said. "In the second quarter, we expanded our active member base by half a million customers, a 13% increase that takes active Rewards membership to 16.8 million."

Mobile Marketer: Starbucks boosts loyalty membership by 13% following switch to spend-based program, 2019-Apr-29 by Robert Williams

At the end of last year, Starbucks revamped its loyalty program, moving away from frequency-based rewards to spend-based ones, Group President John Culver said during the call. Since the change, the chain's 90-day active membership has increased 25% year-over year. "We now have 8.3 million active 90-day members, and that is a significant step change in terms of the growth rate from what we've seen previously in the program," Culver stated.... 

By switching the focus of the loyalty program from frequency of visits to how customers spend, Starbucks is attempting to broaden the appeal of the loyalty program beyond it most loyal customers with the expectation that once consumers become loyalty members, they will visit more regularly to earn rewards. The growth in Starbucks' rewards program also underscores the importance of mobile in helping to solidify its relationships with key customers who are most likely to visit its stores. 

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Pivoting to "between-purchase" loyalty with Ford

The car manufacturers have for years focused on creating and manufacturing cars that generate loyal repurchase. Now Ford has come to the realization that it needs to maintain a connection between purchases. One of the keys to a continuous positive experience is figuring out how to make service calls, handled by Ford dealers, more integrated with with the rest of the customer journey. 

The Detroit News: Ford rolls out rewards, moves to boost 'customer experience', 2019-May-02 by Ian Thibodeau

The automaker on Thursday announced a string of "customer experience" pushes under Elena Ford, the company's chief customer experience officer. They include a new rewards program through the FordPass smartphone app, a new call center in Houston focused on servicing truck customers, and pilot projects for vehicle service house-calls and early lease-renewal programs.

"We have good loyalty, but we need more," Elena Ford said. "We want customers to keep coming back. We benchmarked the best companies, and we said this is the way we want to go."

She and her team spent months meeting with executives at companies like Apple, Delta Airlines and Marriott International to rethink how the carmaker could give customers better reasons to use the FordPass app that was introduced nearly three years ago. The company also compared its dealerships and experience centers to those at Apple.

The customer-experience team is focused mainly on making people feel good about owning a Ford product. The new loyalty program would allow app users to rack up points for scheduling vehicle service through their dealer. In return, the points can be used toward oil changes and other regular maintenance, or saved to be used toward a new lease.

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Consider how loyalty is built or destroyed by emotional experiences

I've been considering contacting ex-Houstonians for support in building a better image for the city. Their interest and support will be built on their having had positive emotional experiences here. In many instances, their bad experiences will be unrelated to the city itself, but affect their attitude. So when we reach out to ex-Houstonians, we'll need to be very sensitive and accepting of their sometimes bad opinion of the city, even if it's unfair. 

We cannot always prevent bad experiences and we have to allow others the space to be unhappy. Can we repair the relationship? Maybe. Sometimes. If we can afford to. 

CMS Wire: Positive Memories: The Shortcut to Customer Loyalty, 2019-May-08 by Liraz Margalit

When researchers at Forrester analyzed whether ease, effectiveness or emotion had the biggest impact on customer decision making and brand loyalty, they found that emotive connections won hands down.

Both long-term loyalty and memorability are built through experiences that drive positive emotions — even when that long-term loyalty is misplaced or fundamentally irrational. In fact, my company Clicktale’s research with data professionals suggests that as many as three quarters consider consumers to be “fundamentally irrational” in the way they shop. Clearly, feelings, not facts, are what drive our decisions — a factor that needs to influence the way that brands think about customer loyalty. 

Forrester: A Closer Look at the Monetary Value of Emotion, 2016-Sep-21 by Victor Milligan

Companies need a way to understand and measure emotion: to design experiences, to predict its impact, and to formally connect emotion to P&L performance. Specifically, companies need to know:

  • If the emotion driven by an experience is positive or negative, meaning did it create an emotion that has the potential to draw customers closer to you or push them further away?
  • What was the intensity of the emotion, meaning is it likely to alter the existing level of affinity or spending behavior?

Forrester’s Customer Emotion Matrix provides a simple yet powerful method to understand and ultimately quantify emotion by examining the two primary factors that determine if and how customers may alter behavior:

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Storytelling tips from the Nielsen Norman Group

As an analytical thinker, storytelling has always been a struggle for me. I tend to organize information differently than storytellers. But throughout my career it has become increasingly important. Anytime I find a good teaching tool for storytelling, I try to work with it and incorporate its lessons. 

I especially value the reminder here to pair our stories with artifacts. If we handle it correctly, a very complex story can be embedded in a single image or token. 

Nielsen Norman Group: 6 Rules for Persuasive Storytelling, 2019-Apr-28 by Rachel Krause

Stories help us explain difficult concepts.

Giving additional context helps our audience connect with a concept. This additional context can be in the form of behaviors, emotions, reactions, motivations, or goals. Unlike a flow chart or artifact, a narrative allows the audience to understand the reasons behind users’ actions; they remind our audience members that they are not the user.... 

Stories allow us to form a shared understanding.

Thinking about how to build a product usually involves feature lists and backlogs. Stories bring user pain points and goals to the forefront of the conversation and help teams create a shared language of why they’re building a product or feature and whom it benefits. These stories can also be used to rally around a product vision, painting an image of how life could be better with that product.

6 Rules for Persuasive Storytelling

    1. Adapt your vocabulary to match your audience.
    2. Appeal to the needs of your audience.
    3. Back up your points with real data. 
    4. Focus on the entire omnichannel experience, inside and outside the interface. 
    5. Pair your story with an artifact for memorability and alignment.
    6. Follow up with a summary. 

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How culture drives innovation

Too many people see innovation as a project when it's really a process. Or maybe it's a culture. 

Every business, every organization, every person has to decide what role innovation will play for them. If you crave stability, then innovation will be driven by necessity: fixing things that don't work anymore. But if you want to be a leader in building a better future, then you need to consider how innovation will be integrated into everything. 

Digital Tonto: How Experian’s Networked Culture Drives Innovation, 2019-Apr-24 by Greg Satell

In Who Says Elephants Can’t Dance, the bestselling memoir of the his historic turnaround at IBM, Lou Gerstner wrote, “I came to see, in my time at IBM, culture isn’t just one aspect of the game—It is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”

There has been endless discussion about whether change should be driven from the top-down or the bottom-up, but that is, for the most part, a red herring. True transformation tends to move side-to-side, driven through horizontal connections among peers.... 

[Satell gives three examples at Experian.]

Many firms have clubs, employee groups and volunteer efforts. Seminars aren’t particularly unusual, either. Yet it’s not any one program or platform, but how those initiatives are optimized to widen and deepen informal bonds across the organization, that makes the difference.

The truth is that, today, competitiveness is no longer determined by the sum of all efficiencies within a business, but the sum of all connections. 

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