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February 2016

January 2016

How the "internet of things" will affect loyalty management

Deloitte just published a paper about what we can expect when our devices start reporting their usage back to the manufacturer. Thanks to Corey Hill for noting how much this new data will affect the management of customer loyalty. The first three big changes are

  1. Better product usage understanding
  2. New hooks for customer relationships
  3. More responsibility to keep customer data safe. 

Business-to-business relationships, where suppliers are expected to help their clients save money and be more effective, will generate the lion's share of profits. 

We have to be careful our competition doesn't beat us to the enhanced customer relationships. 


AdWeek: The Top 3 Things Every CMO Should Know about the Internet of Things, 2016-Jan-11 by Corey Hill

Rather than focusing strictly on optimizing algorithms, turn your attention to the highly predictable, highly actionable data that the IoT provides. Being able to recognize a customer's need and act on it almost instantaneously in real time is the modern marketer's dream. Using your current data and algorithms in combination with the immediacy of IoT data brings a new meaning to "right place, right message, right time."

The trade-offs we make when using CRM technology

Photo by Daniel Ramirez on Flickr

Customer relationship management seems like a pure virtue to us. Who wouldn't want to develop a great relationship with all their customers? However, a small business can over-invest in customer relations, then slip behind in other vital business operations. It's all a matter of balance. 

And with the use of technology, a new set of forces come into play. Chris Bucholtz, Director of Content Marketing for CallidusCloud, is the first person I've seen point out the competition between

  • sales productivity
  • customer experience
  • customer loyalty. 

CRM Buyer: Spotting the Critical Connections, 2015-Dec-22 by Christopher J. Bucholtz

... these three dynamics push and pull on one another -- what may be good for today's sales productivity may damage customer experience and ultimately loyalty, and what's good for loyalty may result in reduced sales productivity.

Getting the balance correct while satisfying all the needs of the buyer, the seller and all the other parties involved in the relationship is easy in a vacuum -- but other economic, social and business trends will conspire to throw off the equilibrium... 

General Motors regaining loyalty

Photo by Shiny Things on Flickr

After the faulty ignition switch betrayal, we wouldn't have been surprised if GM lagged in customer loyalty. Instead, GM just won a major award for customer loyalty. 

Customer marketing is becoming more important for the auto industry, and GM seems to have the hang of it. Customers are more persuaded by recognition and personal attention than the news. 

Automotive News: GM takes customer loyalty crown from Ford, 2016-Jan-12 by Jamie LaReau

General Motors finished the 2015 model year with the most loyal customers, unseating Ford Motor Co., which had won the distinction for five consecutive years.

That’s according to IHS Automotive, which presented its the 20th Annual Automotive Loyalty Awards Tuesday at the Automotive News World Congress.

“GM does an incredible job of cultivating Super Loyalists -- those customers who come in and buy again and again and again,” Steve Had, vice president of sales and marketing solutions for IHS told Automotive News. When you have success at the top with the Super Loyalists, it pulls your overall rate up. That’s what put GM over the top this year.”

With Nest Thermostats, loyalty is driven by design

Photo by Digital Aesthetica on Flickr

For the most part, loyalty programs are bolted onto a product after launch. They are patches.

The best marketers engineer loyalty rewards into their product or service from the very beginning. Look at the example with Nest Thermostats. 

Chief Marketer: Nest Thermostats Turns Old Loyalty Mechanics New Again, 2016-Jan-4 by Sean Claessen

If you’re one of more than a million people who own a Nest Thermostat, you were probably intrigued when a little green leaf appeared on the screen to signal energy efficiency. ... [Nest] uses the leaf as a badge to reciprocally train users to know when and how they’re conserving energy....

Through the lens of loyalty design, that leaf isn’t simply an indicator of conservation, it’s a non-monetary currency that Nest users align with their values and are trained to pursue....

Nest sends each user a monthly energy report with information on how many kilowatt hours all Nest Thermostat schedules have saved since 2011, as well as lets people know how much energy they have used to heat or cool their homes.

Did you catch the nuance? ... Nest is able to communicate to its users how close they are to their goals and how far they’ve come, which taps into those parts of the brain where our feelings of motivation live (which just happens to be a bit of a holy grail for marketers...).


Gym owners of the world, please don't forget us!

Photo by Ashley Mather, Mather93 on Flickr

How would we like our gym to communicate with us? Wouldn't it be great if they could entice us to get in there? Not just nag us but remind us they care about our health and are ready to serve us. 

A recent survey of gym marketing found that we can sign up for an email newsletter, but inexpensive gyms are unlikely to follow through and deliver one. The more high-end gyms appear to have full-fledged marketing departments. So I guess we have to pay for good communications. 

When we stop and think about the life of a personal trainer or gym owner, we realize that maintaining a healthy email newsletter is probably not even something they aspire to. They probably aspire to finding someone to maintain the web site and the Facebook page at a reasonable cost. 

Instead of thinking newsletter, we need the gym owner to think about keeping in touch with customers, which is easiest done with a simple newsletter that's posted to the web site and Facebook page every month. Finding a good gym is hard work, but once they are sucking $50/month out of your bank account, it's too easy for them. 

Gym owners of the world, please don't forget us!

ClickZ: Why do gyms’ email marketing suck so much?15-Dec-23 by Mike O'Brien

Jonah Lupton, founder of Lupton Media Group and very large man who belongs to multiple gyms, points out that Equinox and SoulCycle are significantly more expensive than Planet Fitness and Gold’s.

“They’ve got better profit margins when they’re getting $150 to $175 a month. The local gym costs $25 or $30 a month, and probably can’t spend too much to acquire a customer through email marketing when the best channel is probably word of mouth of a big old sign in front of a building,” says Lupton.

He adds that email marketing is a much better way to engage existing members, rather than woo new ones. The gyms know who goes; they email those people to promote referral programs, or discounts on apparel or training packages.

Loyalty is a natural result for MW Cleaners

Sc160106ngPhoto by Nicholas A. Tonelli, Nicholas_T on Flickr

At MW Cleaners, founder Mike Nesbit works tirelessly to break new ground in customer convenience. “The Main Thing” is to delight customers with exceptional service, anticipating their needs.

MW Cleaners has grown to be the largest dry cleaning chain by tracking customers and operations with a robust information system. As customers and competitors evolve, Nesbit and his team are the first to detect new patterns. “When specialty cleaners began driving down the price for cleaning shirts, we held fast to our role in customers’ lives. We made sure the value was in being loyal to MW Cleaners,” says Nesbit.

Customers discover a wide variety of rewards, among which they can pick and choose, changing it up as their life changes. Maybe free home delivery is a big incentive for a young professional couple until the children arrive, and then they begin anticipating the monthly discounts on big-ticket cleaning for items like bed linens. Actually, Nesbit’s delight is to surprise regular customers with rewards printed on their receipt, allocated by MW Cleaner’s customer tracking system. He also innovates rewards like the “Shirt off our back” program where 20 cleanings of the same shirt results in a $50 coupon to get a new shirt at the parent company, The Men’s Wearhouse.

Loyalty is not a scheme at MW Cleaners. Customer loyalty is how they measure their success. Their goal is to find more and better ways to make their customers’ lives easier. When guiding his team, Nesbit reminds them to focus on the customer: “The main thing is to keep the main thing the main thing!”

Business-to-business loyalty is support

Ch160106frPhoto by "ThinkActLove" on Flickr

 Building loyalty within the B2B category can be very challenging, especially if price negotiation has taken place. Suppliers may feel they've already invested in a customer.  Unfortunately, the B2B customer may not feel the same way. After the sale, the best way to support a B2B customer is to help them succeed. For instance Jim Griffing, founder of Griffing & Company accounting, always helps his clients understand if their expenses are in line with the industry. IBM helps its customers with original marketing research on their customers, and American Express helps its small business customers with advertising.

The Essence of a Fine Relationship


Photo by BrianPotterVideo on Flickr

Loyalty means honoring what the other one wants—not necessarily giving it, but respecting it.

Quinn Norton has written an amazing article where she makes explicit what many of us take for granted. I encourage to read the whole article, but here are the most universal points... 

Medium's The Message: How to be Polite... for Geeks, 2014-Aug-25 by Quinn Norton:

  • Whether a relationship lasts as long as an elevator conversation or a 46-year-long marriage, it has no winners or losers, only participants.
  • Trying to get an upper hand destroys the essence of any relationship, which is communication. It dehumanizes the other person, and becomes a grab for resources.
  • Many people enter into conversations to get what they want, which is fine, but in contemporary life that’s usually achieved by cooperation rather than competition.
  • Being polite, being flexible and willing to change your tone or even your mind creates the possibility of change and cooperation over time.

We’ve all been somebody we’d rather not have been, and we’re all hoping to look back from the future and think we’ve learned a lot since what we think right now. We should give that to each other, over time, space, and even Twitter.

At SunGard, CX leadership is evangelism

As CX leader Milista Anderson sees it, having a Customer Experience department is a disadvantage. Unless everyone in the company understands they are responsible for the customer experience, the customer's experience is in jeopardy. 

Loyalty360: SunGard Encourages Adaptability, 2015-Nov-20 by Steve Taggart

Anderson explained that assuming a dedicated CX role means taking on three personas: A teacher, a preacher, and a screecher. In other words, creating better CX requires a leader to teach others about what great customer experience looks like, preach the message over and over in order to begin the companywide shift, and “screech” loudly enough to create change.

“I don’t have a customer experience team behind me, and I don’t want one,” Anderson said. “I would rather create evangelists out of everyone else in the organization than to have a full customer experience department.”

In pursuing better customer experience as a company leader, Anderson stressed the importance of forming relationships throughout every part of the company.

Simplicity drives loyalty for Google, Netflix, Amazon, Chipotle...

Recently recognized for their ability to delight customers with simplicity of use, Google, Netflix, Amazon and Chipotle made it to the top five of the "simple brands" identified by customer experience strategy consultant Siegel+Gage. 

Among the up-and-coming "simple brands," Dollar Shave Club says "Dollar Shave Club couldn't be simpler. Select one of our great blades, pay only for the cost of your blades, and we send ’em right to your door every month." At Seamless, they say "we make ordering food for delivery and takeout seamless!"

Harvard Business Review: Why Simple Brands Win, 2015-Nov-9 by Margaret Molloy:

Customer experience is the new battleground for loyalty. Years of findings in the Global Brand Simplicity Index demonstrate that when brands build cultures of simplicity, all parties benefit. Employees have the clarity to innovate and deliver superior customer service, consumers have better brand experiences, and ultimately reward brands with their loyalty.

Growth is welcome and inevitable for any successful company—but complexity is an unavoidable side-effect of growth. Companies must be on the lookout to simplify processes and create fresh and clear brand experiences. A commitment to simplicity starts at the top. Senior management must be committed to implementing practices that encourage simplicity. Brand purpose—what a brand does and why it does it—should be articulated in a way that is easy for employees to internalize, and customers must view a brand and its services in a manner consistent with this purpose. While it is necessary to look inward to refine and simplify, ultimately the customer’s perspective matters most.