I was lucky enough to be invited to sit on the panel once Tim Bond Head of PR and Insight at the DMA went through the highlights of the latest research, ‘’How to win trust and loyalty: The marketers view’’.( A copy can be downloaded here)
Chris Pearce CEO of TMW Unlimited, picked up on the notion on actually how it is even more important for brands to be consistent in front of potential customers to at the very least allow them to stand out amongst the choice now available to us, courtesy of Amazon and the like.
What struck me when the topic of choice came up was actually just how important is choice to consumers? I actually don't think that is an easy question to answer. We all say we love choice. But not if that choice is overwhelming or non sensical? Have you gone down the cereal aisle of a supermarket recently? Well I went down a small Sainsburys aisle yesterday and I counted 225 ! Still that’s nothing in comparison to this shot from a snack aisle in a Korean supermarket
In a physical environment it becomes overwhelming. Amazon can deliver an ‘infinite aisle’, but then has to rely on AI to help you make selections. Retailers such as Aldi and Lidl have succeeded partly because consumers are not overwhelmed with choice. An average supermarket has 35000 different products but on average consumers buy approx 300 different ones (Of course the issue is that we all buy a different combination of 300)
The same applies with comms. I think that it is part of the brands obligations to present the consumer with the right channels for the right point in the engagement journey, whether that be email for useful content, videos for tech help, websites for baking recipes. We can't always rely on allowing the customer to know what they want. I'll have a faster horse please Mr. Ford!
As Chris highlighted, acquisition and retention are very different things. And yes they do they require different strategies but can they legitimately both be served by ‘engagement’?
I'm a firm believer that engagement can be used for both. O2 used their gurus as a free to all engagement programme that allowed existing customers to get the most from their phones, but also provided a strong reason for potential customers to pick the brand because of the expertise and help they shared. I'm often surprised about how infrequently brands don't use the content they already create for retention engagement to serve their acquisition teams better. I remember the resource and budget out into a clients weekly newsletter that went to several million sport customers that was the most successful engagement program they had but that they refused to use as an acquisition tool.
Another area that struck me was the high percentage of brands that didn't have some form of loyalty program. In their defence there are probably a couple to reasons why.
Firstly, it's actually difficult to understand how customers want to be rewarded for their loyalty. Ok, so ask someone if they want a discount or a freebie and I'm pretty sure they will say they want it. But not all and aren’t you at risk of getting out discounted by a competitor? We can't treat a customer base as a homogeneous set (take my word for it 'homogeneous' is easier to write than say when sat in front of an audience. Thanks for helping me out Chris). Last year I worked with a global sports brand whose products were sold to the masses via their wholesale partners where often price was a strong motivator. But for a very small but influential cohort of fans, their reward for loyalty was actually being the first to know about a particular 'drop' of a new sneaker. It was good of Javinder Singh from Go Inspire to pick up on that and his 'sneakerhead' experience. Actually he then pointed to me an interesting article that you could argue goes in the opposite direction. Exclusive sneakers by lottery!
I think recognition is an often under used loyalty tactic. There’s a beautiful hotel in Kings Cross I often stay at and I noticed one day on the reception desk a sheet of paper with a list of guests and their expected check in times. Alongside the more frequent guests were photos of them enabling the reception team to recognise them and greet them . Nice touch. So why should we so uptight about facial recognition making it easier for that to happen? There’s a great ‘candy’ store in the US doing just that. Intel has been installing entrance-facing cameras at Lolli & Pops stores and providing the store assistants with tablets that are synced with a camera so when loyalty members enter the store they can be offered recommendations based on their previous purchases.
And second, without having established exactly what the loyalty program is meant to deliver, once set up it can be difficult to prove its value. I once inherited a loyalty scheme for a cruise brand where ‘loyal’ cruisers were rewarded with quite lavish gifts. The problem was in trying to understand if a leather bound shoe cleaning kit actually had any bearing on the second cruise which might occur 3 years later!
During the questions Anthony McLaughlan from Swinton Insurance Group (nice to see you again Ant) kindly highlighted the influence of Amazon in all of this. Anthony rightly pointed out that undoubtedly, as shown in the research, that the functionality and ease with which you can shop with Amazon is disrupting us all. So, I can guess we can see Amazon as a challenge and a benchmark. While we might not beat Amazon in the e-commerce space ( or indeed as Tim Bond mentioned AliBaba, ebay or Rakuten ) we can certainly work with them but also refocus the experience we give customers who want to engage with us . The like of Nike have started to develop intelligent stores where loyal customers are recognised using GPS and smartphones as they come into the store, and in the background AI highlights their recent purchases and online browsing to suggest products and even have the right pair in the right size available to try on. The shop is also intelligent enough to understand what is trending locally and will change the stock holding and retail activations to suit! I don’t believe the research when it tells me that consumers don’t want face to face interaction. A proportion do, and relish the recognition they get!
Talking of recognition, thanks for the round of applause at the end and LinkedIn requests.