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June 2016

When marketing to customers... "please buy again" is not enough

Many companies think that 'customer marketing' equals 'buy more.' Actually, customers want to be contacted for a variety of reasons--their reasons. 

Inc.: Why Winning Millennials' Loyalty Is Easier Than You Think, 2016-Jun-22 by Molly Reynolds

"[Crowdtwist] research indicates that Millennials are very brand loyal, so we wanted to get to the bottom of this misconception" says Geoff Smith, CMO of CrowdTwist. "What we found is that there is a profound shift in the way that Millennials perceive and engage with brands from previous generations. Millennial audiences want to be rewarded for all the ways they participate with a brand, including purchasing products, making recommendations, and engaging with brand content. So, naturally, the companies that rate their loyalty efforts as successful are engaging with their audience on multiple channels."

According to their newest report, a whopping eighty-eight percent of brands that rated their loyalty programs highest take this multi-channel approach.... TOMS, for example, rewards customers for an array of activities across channels, including shopping online, signing up for emails, connecting on social media, and even showing up to in-person events.

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How Sephora leads in loyalty by offering more customer experiences

At most companies, the customer journeys through knowledge toward a purchase. But loyalty leaders like Sephora recognize that they have to keep creating new experiences to keep the customer on the right path.  In our customer marketing we should always be asking ourselves, what can I do for the customer to intensify the relationship?

NY Times: Cultivating Brand Loyalty in Even the Toughest Customer, 2016-Jun-5 by Alina Tugend

Research also shows that while people say discounts are important, they also “overwhelmingly say they want special treatment and offers not available to others in a loyalty program,” Ms. [Emily] Collins [of Forrester Research] said. “They come for the perks, but they stay for the experience.”

Sephora, the cosmetics retailer, is a great example of that dynamic, said Scott Robinson, vice president for design and strategy at Bond Brand Loyalty. Sephora’s rewards program offers free samples and tutorials to loyal customers. It has three tiers, and the top spenders are invited to free closed-door events like Beauty Before Brunch, where they receive makeup lessons, discounts and a goody bag.

The samples don’t cost much, but are of great value to customers who want the newest makeup and hair products, he said, and store loyalists often share these discoveries on social media, which draws in more customers.

And that’s a crucial part of the equation: making sure customers aren’t just loyal, but also loud. Brands rely on them to spread the word far and wide about great loyalty programs.

The beauty industry, in general, has successfully developed one of the crucial elements of any loyalty program, Mr. [Brian] Gregg [of McKinsey and Company] said: that “the perceived value to the customer is greater than the cost to the company.”

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3 Ways the Loyalty Program Could Save Nordstrom

One million customers just joined the Nordstrom loyalty program after it was opened up to members not using a Nordstrom credit card. Nordstrom has been struggling against competition from online retailers as well as other economic trends, and they have good prospects of turning it around for three reasons. 

  1. Those one million people just gave Nordstrom their mobile phone number, which is now the primary way of managing memberships. 
  2. With more ways to participate, Nordstrom has more tuning control and more data to analyze.
  3. Changes were based on customer requests, and when customers see that, they feel more loyal. 

Retail Dive: Nordstrom expands loyalty program to lure in more big spenders, 2016-May-23 by Daphne Howland

Nordstrom co-president Erik Nordstrom said that, indeed, the changes to the company’s loyalty program came from customer requests. The company has a large incentive to listen to these requests, considering that, according to the company co-president and director, Blake Nordstrom, Nordstrom Rewards member spending contributes to around 40% of the retailer's sales, with members spending four times more annually than non-members. While only one in five customers are part of the program, the retailer plans to add five million customers in the next 12 months.

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Operating our lives with loyalty in mind

Once we focus on customer loyalty, we confront the challenges of defining and supporting it. For every company, organization, community and person, loyalty means something slightly different. A recent interview of Ines Temple reveals the complexity. 

I have boiled down her 15 points in order to better absorb them... (see her words here). I appreciate the way she ranges back and forth over difficult issues. Loyalty is not easy, but it's a keystone for building a sustainable business and life. 

  1. Loyalty is vital to long-term success.
  2. It's easy to recognize but hard to define.
  3. While we may not be able to maintain loyalty to specific people, we can stay loyal to our principles.
  4. Loyalty can be very expensive, but it's worth the price for our peace of mind.
  5. Loyalty will make us vulnerable, so it's even more important to watch for danger.
  6. We can show our loyalty by giving credit to the people who've helped us in the past. 
  7. To be recognized for our loyalty we have to provide it consistently across all aspects of our life. 
  8. Don't be loyal to the "takers" who always put themselves first.
  9. The worst disloyalty is to our own principles and dreams. 
  10. Forgiving disloyalty is so hard, it's probably one of the most important things we can do. 
  11. It's a pattern of disloyalty that should cause us to avoid people.
  12. Consistently disloyal people lack a moral compass, and should be distrusted on many levels. 
  13. At times, we have to be loyal to people who don't deserve it, especially when that loyalty serves our principles. 
  14. Gratitude and loyalty go hand-in-hand. 
  15. Our loyalty creates a strong circle of collaborators and supporters. 

Inc.com: 15 Surprising Things I Have Learned About Loyalty, 2016-Mar-31, Interview of Ines Temple by Peter Economy

Sometimes, one must be loyal even to those who don't deserve it or appreciate it. As we have already said, loyalty is an act of integrity and personal values. Many times, loyalty has to do more with oneself than with the subject of our loyalty.

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How automating our marketing increases the pressure to be creative and adaptive

Marketing automation has turned into a big headache for many companies. As it's very expensive, both in terms of money and time, management is putting pressure on marketing departments to show return on that investment. 

Unfortunately, these powerful marketing automation tools demand planning AND flexibility AND a surprising dose of creativity. Buyer beware!

VentureBeat: Why everything you think about marketing automation is wrong, 2016-Jun-14 by VB Staff 

Interview with the CMO's of Publisher's Clearing House and Casino del Sol, as well as the VP of Experience Planning at agency Allen and Gerritsen

“And that’s really key as we explore automation” says Parcell [Allen and Gerritsen]. “Having a really large quiver of things that are always on brand voice and tone, whatever that message is. How do we convince them to click on that email? What is the right number of messages? How many times a day?”

“We have some hypotheses,” he adds, “but test and learn.”

But, Jason [Publisher's Clearing House] says, “There’s always a blend of art and science. As scientific as we want to be, we always understand that you can’t always predict exactly what a consumer is going to want and need, no matter how much data you have, so there’s an art to it.”

Parcell agrees, adding, “If we get very precise and scientific, that can feel dismissive. The comfort level of the consumer and their expectations means we have to put in exploratory things. We have to play with that.”

“It’s just going to take longer than you think it will,” says Neely [Casino del Sol]. “The adoption rate is at their pace, no matter how hard we try to move them—we can get very interesting and very aggressive, put all this effort into the art side—but at the end of the day the consumer is the consumer, and they’re not going to move as fast as you want them to no matter how hard you try.”

“And you can’t get frustrated with that,” he adds. “It’s a process and it takes time. You just have to work through.”

 

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Image by Paul VanDerWerf on Flickr

How can we make our surveys a better customer experience?

The big design challenges for customer surveys...

  • Get it to the customer fast
  • Make it fast to read
  • Make it fast to take
  • Make it pretty... but not slow
  • Make it fun... but quick
  • Make it the beginning of a relationship by showing customers how you're using their feedback.

MyCustomer.com: 20 stats that will change the way you survey your customers, 2016-May-25 by Lindsay Willot

I’ve been looking into what’s driving these low response rates, and have uncovered key customer survey stats which go a long way to explaining the phenomenon.

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Image from Glacier NPS, by Tim Rains on Flickr

We deserve a better customer survey experience

I used to work for a company whose primary business was executing customer surveys. We focused on making customers feel appreciated, and if we were still together, we'd be horrified at the current state of the follow-up survey. I scarcely participate any more, and the last one I completed (for Honda) was awful, totally inconsiderate.

Marc Mandel just published a great post about reviving the customer survey. We should start by building an experience that would thrill our customers. 

LinkedIn: Customer Surveys are Dead. Or, Are they? 2016-May-31 by Marc Mandel

Design the survey experience. Let’s ask ourselves, “If one of the main reasons for customer surveys is to improve the customer experience, why is the experience of taking our survey so poor?” Interesting, huh? We put so much effort into transformational customer experiences, and yet our surveys create a terrible experience unto themselves.

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Image by Nicholas A. Tonelli on Flickr

 


Improve sales team performance by investing in sales support, according to Harvard Business Review

We recently encountered a sales person who was frustrated in trying to meet his sales manager's goals (not just sales but new business leads). He gave us a peek at this Salesforce application, and we were appalled. The lack of good administrative support was holding him back.

  • He was required to import data but ended up creating duplicates.
  • He couldn't review records already in the system because no one had shown how to use list views
  • He was dutifully logging calls but not creating followup tasks (at least not in Salesforce).
  • Phone support was outsourced to a company which had access to the system but no apparent responsibility to help improve it.

So the article below did not surprise me. 

Harvard Business Review: In the Best Sales Teams, About Half of the People Are in Support Roles, 2016-May-25 by Michael Viertler, David Sprengel, Sebastian Kuchler, and Jochen Ulrich

We found that devoting 50%–60% of sales employees to support functions is optimal. Many companies with low sales ROI devote less than 30% of their sales staff to support functions. But having too high a share of sales support has a negative impact on sales ROI, as it simply increases the cost base without adding additional support to the front line. Most of the companies with 60%–80% of sales support are in the bottom 75% of sales ROI. 
 
Sales efficiency can benefits from high levels of support in two ways. First, support frees up frontline sales employees to be more productive. A typical sales rep at one of the top companies we analyzed generates $5.7 million in gross margin; a typical rep at the other companies generates just $1.7 million. Second, companies in the sweet spot of support have a greater cost efficiency for their entire sales organization, because sales support staff are usually paid less than frontline sales reps. In our analysis, the top companies had a 15% lower average cost per sales employee than their peers. 

 

The makeup of sales support is just as important as its quantity. We found that the levels of operations and administrative support are what matters most. The top-performing sales organizations have roughly the same share of customer-facing support as their peers (30%) but twice the share of operations and administrative support (27% in top companies versus 12% in their peers).

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