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April 2017

What are people's benchmarks in store experiences?

95% of Americans were in Walmart last year, and 89% in McDonald's. Walgreens and Dollar Tree were experienced by over 70%, and Home Depot by 68%. When we look to understand consumer expectations, we should all have direct experience of those retailers as well. 

We can't project our buying experiences onto our customer. We have to meet them where they live. 

Quartz: Ninety-five percent of US consumers made at least one trip to Walmart last year, 2017-Apr-11 by Neha Thirani Bagri

NPD Group, a market research organization, which tracks millions of online and in-store receipts, says that 95% of all US consumers shopped at a Walmart store in 2016. By comparison, Amazon reached less than half of all US consumers last year—at 42%.


How to drive your customers away, the way Amazon and Overstock do

Most of us don't mind when an online store offers us a discount to buy before a deadline. We get that they know we may drift away and forget them. But ever-changing prices erode our confidence that we can find a fair deal. Jerry Useem has a great article about how it's growing and why. His article ends with an amazing interview with Executive Director of a nonprofit that works to protect consumers from deceptive marketing. This woman is also a mother who is responsible for buying things for her family. Do read the article, even if you're a consumer and not a business owner. 

And finally, devious pricing games (or tests, as they are called) will actually drive loyalty toward more reliable and transparent companies. Good bye Amazon, hello Everlane. 

The Atlantic: How Online Shopping Makes Suckers of Us All, 2071-May by Jerry Useem

“I do not shop,” Patten said.

In what sense?, I asked, confused.

“I just gave up,” she said. “I just stopped shopping.”

I thought about this after we hung up. Maybe it was a function of her job, which let her see too much. Maybe she was a certain type—“survival shopper” was the label she used—who simply didn’t experience the thrill of finding a pair of $30 moccasins for $8. Such thoughts helped stay the alternative explanation, the one Gabriel Tarde called “the madness of doubt”: that there’s a finite amount of uncertainty we can absorb, a limit to how much we can check the ticker to see whether the Swiffer’s price is up or down this morning; that somewhere in us is a shut-off point, and that Patten had hit it.


How Amazon leads their customers, reported by Neil Perkin

As I've mentioned before, I have some serious issues with the way Jeff Bezos manages Amazon. I believe he's too ready to sacrifice his employees and his values to his ambitions. 

Nevertheless, he's successful because he's committed to his customers, and there is much we can learn from him. We all compete with Amazon at one level or another, and if we want to survive we have to be realistic about what drives Amazon success. Neil Perkin has digested the best parts of Bezos' annual letter to shareholders, and Neil's analysis is quoted below. 

Like Amazon, we have to be attuned to what's dissatisfying our customers, not what's satisfying them. We have to help them succeed when they don't even recognize their problems. 

Only Dead Fish: Avoiding Day Two, 2071-Apr-24 by Neil Perkin

There are many ways to centre a business, says Bezos – competitor, technology, product or business model focused, but ‘obsessive customer focus’ is in his view the most useful since customers are always ‘beautifully, wonderfully dissatisfied, even when they report being happy and business is great’, and a desire to delight customers will therefore drive continuous invention and progression. He uses the example of Amazon Prime, as being something which customers didn’t ask for directly, but which has been built around an understanding of customer need and which has been enormously successful (they reportedly now have 66 million Prime customers)... 

Great customer experience, he says, doesn’t only come from surveys and research but ‘starts with heart, intuition, curiosity, play, guts, taste’. 

Embrace external trends:- he talks about the importance of getting on to the big, powerful trends quickly, where many large companies resist change: ‘If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind’.


Are Facebook, LinkedIn and Gmail CRM killers?

Two trends are coming at CRM from different directions. Many small businesses are integrating extensions into Gmail that turn it into a CRM. From the other direction, Facebook, LinkedIn, etc. are refusing to allow their products to integrate with CRM's forcing people to link out of the CRM to engage their customers there. 

CRM's will evolve, no doubt about it, but I pity the company that relies on Facebook or LinkedIn to stay connected with their customers. Neither of those platforms will ever support companies, instead they both have track records of exploiting their users and advertisers. The Gmail trend is different and probably valuable. If a young company is using all Google-based products and can cobble together a CRM out of Google tools, that makes sense. Although I wouldn't let my business become too dependent on one platform. 

A good CRM platform allows us to own our customer information. Integrating information from Facebook and LinkedIn is a necessary pain, but one we have to endure to secure our relationships. You have been warned!

VentureBeat Sponsored Post: CRMs are dying — and that’s a good thing, 2017-Apr-4 by Victor Iryniuk, Nethunt CRM 

(Note: the words below come from an advertisement in native form. VentureBeat does a good job of making that clear.)

You might not have noticed it, but a drastic shift in CRM systems already happened once before. No system left standing exists without some sort of integration with other services that your company uses — such as a website, a messenger platform, or a social network.

But what we’re seeing now is the next transformation of integrated CRM apps. Many popular communication services are not only integrating with these systems but are starting to exercise the same capabilities previously associated with CRMs. And since these services are already the choice of a modern sales team, they might become new focal points of customer relationship management.


Avoid missteps such as Chili's made with loyalty launch

We can't let our competition pressure us into offering loyalty programs that simply drive down our prices. We have to analyze our best customer and figure out ways to strengthen the relationship. Or we've just instituted a discount program that will be hard to kill. 

Bain & Company: Turning Rewards into Loyalty, 2017-Feb-7 by Aaron Cheris, Gerard du Toit and Brian Kmet

The Chili’s chain, an early innovator in casual dining rewards, initially stumbled when it introduced My Chili’s Rewards, because it stopped its email marketing program and focused the wait staff on signing up customers, which took attention away from selling appetizers and drinks. Both traffic and average ticket size decreased temporarily. As Chili’s illustrates, the transition to a new system requires careful planning and testing.

Successful rewards programs reach a high return on investment by building loyalty through customers who stay longer, buy more, cost less to serve and recommend the company to others—all combining to increase the customer’s lifetime value. That stands in marked contrast to reward schemes that merely bribe customers with extra points, freebies or discounts in ways that layer on extra costs without producing incremental value.... 

Tomatina, an Italian restaurant chain in California, gets feedback from about 75 guests every week, and at last count between 20% and 25% took the time to add written comments in the Thanx [rewards] system. Thanx research has shown that consumers are 7% more likely to return in the next two months after being asked for feedback—regardless of their response.


How Everlane expects email to evolve and keep them connected with customers

Speaking as a parent of young adult children who has to text them to get them to check their email, I was surprised to see Everlane going back to email in some of their customer communications. However, even if email isn't top of mind for consumers anymore, it IS an archive for transactions, and it is capable of providing privacy and lots of extra information. 

Digging deeper, we find that Everlane does not expect to maintain just one communication channel with its customers. Facebook Messenger may be great for "your order just shipped," and maybe for customer service questions, but for driving new purchases and building loyalty, email is a vital tool. 

Sailthru: How Online Retailer Everlane Uses Email and Mobile to Bridge the Online and Offline Worlds, 2016-Aug-11 by Kristine Lowery interview with Aaron Ginn

Email has been a consistently performing channel for the last 15 or 20 years because there’s nothing in between you and your customer. Facebook, Twitter and Instagram insert a middle layer in between you and the consumer, and they’re always going to control that interaction in some way.... 

Marketers need to constantly rethink and reimagine email engagement. There are some interesting tools that are coming out for email, such as interactive emails and being able to buy a product through email. Google has a tool to send data signals from the static email back into your API or your service. Those types of things are going to create a sort of semi-Renaissance for email, because it is still the most commonly used communication tool and it generates a lot of revenue.

Recode: One of Facebook Messenger’s first retail partners has ditched it as a notification tool, 2017-Mar-1 by Jason Del Rey

Everlane had essentially used Messenger as an alternative to email, sending messages with order confirmations and shipping updates to customers who opted into the communication method. (From personal experience, I think it worked really smoothly.) It also allowed customers to send questions to customer service reps via Facebook messages. That last use case is still live.

When the partnership first started, CEO Michael Preysman told Recode that “over time we think this will become a way to not only build stronger relationships with customers, but to ultimately drive demand and new purchases.” It looks like that may not have happened.



What's loyalty got to do with the United Airlines incident?

I was really surprised when Quartz published an article shaming loyal United customers for defending the airline. That's bleed-over from partisan politics in my opinion. Everyone needs to stop vilifying people on the other side of an issue. A more thoughtful analysis of the incidence as an example of 'privilege' was offered up on the New York Times without saying that loyalty programs are a part of the problem. 

Here's why I think "loyalty" has little to do with what happened when United forcibly 're-accomodated' a physician recently. 

  • Loyalty flows both ways. The airlines reward people who comply with their rules. (Some rules are cruel and need to be outlawed. The rule that you couldn't get health insurance if you had a congenital health defect was cruel. Non-smoker discounts are not cruel.) Loyalty rules, in general, are a good thing, encouraging customers and companies to support each other.

  • The direct cause of the incident was poor decision making by United employees. Those employees could have presented their challenges to all their passengers differently and gotten compliance. They didn't need different rules, they needed better skills in using them. (That's good customer relationship management, which they definitely failed to provide.) 

  • United policies, culture and management are ultimately responsible for having front-line employees who behave poorly. The subsequent behavior by the CEO indicates that the problem goes very deep at United. The company is not "customer centric."

  • Loyal United customer could have intervened for the guy, but I'm thinking they were just too stunned to see the situation go off the rails. I know I would have been cowering in my seat. If I had been asked to participate, I hope I would have said, "He's a physician, I'll take his place." United didn't give the other customers a chance to help, as far as I know. 

United deserves to be punished but the loyal customers who complied with the rules are not the ones who got violent with a customer. I've seen many veteran customers intervene and help new customers over the years. I don't believe a loyalty program interferes with kindness. 

If you are a United customer with a high status in the loyalty program, what do you think United should do? Do you think they should change their policies? 


With Turnstyle, Yelp can help retailers and restaurants manage customer relationships

We have to wait and see if it's executed correctly, but adding Turnstyle's customer-tracking capabilities to the Yelp ecosystem could be a game-changer for retail/restaurant loyalty programs. It alleviates a TON of data collection bottlenecks. We'll also have to see if customers object to the loss of privacy. Myself, as a customer, I would rather participate for the convenience of being rewarded, but I expect not everyone would appreciate being tracked.

Recently, a restaurant owner shared a snapshot on Facebook that included a view of one of his best customers in the background. And that customer had promised his wife he was NOT going to the cafe that day. Gotcha!

Marketing Land: Yelp buys Turnstyle to expand targeting and offline attribution capabilities, 2017-Apr-5 by Greg Sterling

Earlier this week, Yelp bought a company called Turnstyle for a reported $20 million. Turnstyle can be characterized in various ways; it calls itself a WiFi-based marketing and loyalty platform....

Turnstyle enables businesses to offer guest WiFi in exchange for customer email addresses (opt-in). The company uses the phone’s MAC address to identify the device, when it returns to the venue, for either loyalty or attribution purposes or both.

Yelp has been building out its marketing capabilities and programs relatively quietly over the past couple of years. Late last year, it introduced loyalty program Yelp Cashback (using Empyr). It has also been beefing up booking, messaging and transactional tools.

Turnstyle gives Yelp an intriguing new set of capabilities to help businesses market to customers and figure out if those efforts are working. Here’s what Yelp could do with Turnstyle:

  • Help businesses build customer lists.
  • Help them identify and segment audiences (e.g., frequent guests, lapsed customers).
  • Find/segment audiences in other ways (i.e., demographic, behavioral) when combined with other data.
  • Track online ads or email to store/venue visits.
  • Retarget in-store customers online on Yelp or third-party networks.
  • Offer email marketing or an enhancement to its customers, based on offline visits (combined with other data).

I’m not saying that Yelp will do all these things, but Turnstyle provides the technical capability to do them.

TechCrunch: Yelp acquires Wi-Fi marketing company Turnstyle Analytics for $20 million, 2017-Apr-4 by Sarah Perez 

The move, Yelp explains, is aimed at expanding the types of business marketing services Yelp already offers beyond those that are focused on customer acquisition, to also include those that help businesses with customer retention and loyalty.

Toronto-based Turnstyle was founded in 2012 that today supports nearly 3,500 businesses, primarily across the U.S. and Canada. According to the logos on its website, these customers include Back Alley Burger, Burger King, Broncos Slider Bar, Subway, and others.... 

Yelp explains that the average consumer today spend more than five hours per day online, but still makes approximately 93 percent of their purchases offline. With Turnstyle, Yelp aims to give its small-to-medium sized business customers a means of connecting with those offline customers.

In addition, it points out that free Wi-Fi has been shown to increase foot traffic and sales figures. 62 percent of customers spend more time in places that provide free Wi-Fi and 50 percent of those customers spend more money on services and products as a result of the extra time spend in the establishment, Yelp noted, pointing to a Small Biz Trends survey.... 

The [Turnstyle] product is currently used by a number of clients, including restaurants, cafes, retail stores, auto dealers, spas, salons and others – basically, anywhere a consumer may be spending time and lingering around, and expects there to be free Wi-Fi.


Defining ours customers they way that Disney does

In developing a system of 'steady crm,' we start by defining the ideal relationship with our customers. We define what loyal behavior means for us and for them. Using non-standard language can be extremely helpful. By defining customers as guests and employees as cast members, Disney establishes expectations for both. 

What do your employees and customers expect? 

Mediapost IOT Daily: Turning Customers Into Members, 2017-Mar-13 by Jame Gagliardi

One of the first things a company can do to help build relationships is to identify the nomenclature that best describes the ideal relationship between their brand and customer

Disney, for example, has stood by the adage ‘Be Our Guest,’ referring to their customers as guests for years. Everyone at Disney is involved as a cast member and everything is a show. Cable companies refer to their customers as “subscribers”; LinkedIn has always called users members.

Creating the right relationships means finding the inclusive vocabulary that will make members out of loyal customers. As members, they share the experience and the story of the brand, rather than just execute a basic business transaction.