DMA Customer Engagement Manchester

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

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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.


A clever blend of data is key to building loyalty

Whenever I go to York railway station and decide I want a coffee, I make the subconscious choice to go to Starbucks rather than any of the other outlets. Is this because I feel loyalty to Starbucks? No – it’s because I can get my espresso in a china cup rather than a paper one. At what point does a customer become loyal to a particular brand, anyway? Do they ever actually think: ‘I’m loyal to Brand X’? I’m not sure we have these conscious Road to Damascus moments. 
However, buying coffee is often dictated by availability – and being desperate enough to choose the lesser of many evils. More considered choices, such as supermarket, insurance provider or next car purchase, are much more likely to bring loyalty into the equation.


We often talk about ‘choice architectures’ during the decision-making process, in which defaults, frames and price anchors have a bearing on consumer choices. Ideally, brands want our decisions to be based on experiences we have had with that brand, product or service. The abundance of data now available to brands gives them the opportunity to influence, and hopefully enhance, the experience that customers have. As a result, they can have a positive influence when that customer comes to re-evaluate their needs.


Take car insurance. Aviva offers Drive, an app that monitors driving skills. Once the driver has completed 200 miles, they get an individual score out of 10 based on things such as cornering, braking and acceleration. Drivers who score 7.1 or more save an average of £170 on Aviva’s comprehensive car insurance. So this piece of IoT thinking (a mobile phone in my car) not only potentially makes me a safer driver but could also save me money. Forget the tricks of behavioural economics theory on the insurance quote page – I’m in.


What would prevent me from cancelling my gym membership? Personalised prompts from my gym to keep coming back if I start missing sessions are useful. So the fact that gyms like Pure Gym provide usage statistics like this means that they can use the data to understand my behaviour and react when that behaviour changes.

And if one of the reasons I don’t come in is because I hate when it’s too busy to use my favourite machines, why not let me know when it’s busy so I can plan my sessions accordingly?

One of the biggest issues Telco companies have when considering churn is the impact of ‘bill shock’, when a customer is distraught at the size of their mobile phone or data usage bill. And yet, data can tell them in advance when a customer is likely to go over their minute or data limit. My bank warns me when I’m in danger of going overdrawn, therefore my Telco provider can easily do the same thing.
In a similar vein, my credit card provider reminds me when I haven’t looked at my online statement for a while. Yes, it shows a sense of corporate responsibility to make sure I keep an eye on my finances but it also makes sense from a business perspective. If I run into trouble financially, having a credit supplier that has an eye out for me means their card won’t go near the shredder.
This stuff isn’t rocket science, so why aren’t more brands doing it? For some older organisations, pulling together all of their various data can be a painful process, while some companies feel they need to have the perfect data set before getting the ball rolling (they don’t – just take some data offline and play with it). There is a (slightly controversial) theory that some marketers think they know best and are afraid that the data will tell them otherwise or even take their jobs away.
But really, it’s just about data making brands even better – by looking at some of the real influences on customer loyalty and tapping into the data available to shift the loyalty dial in their favour.
 

First published on Zone's site

Gamification is now the point when it comes to customer loyalty

The shop-ocalypse has arrived, and as the twin horsemen of Black Friday and Cyber Monday looming on the horizon, supermarket security guards and server-maintenance technicians alike were crossing themselves in fear.

And while retailers -  both of the bricks and mortar and e-commerce variety – are hopefully enjoying the benefits of the annual pre-Christmas shot in the arm (I say most as, of course, we know that Asda are giving this year a miss), a question that often gets forgotten by their marketers is: ‘What do we do with all these new customers?’. Wearing my CRM hat, all too often I see too little attempt to look beyond the sort of ‘stack ‘em high, sell ‘em low’ mentality that will prevail this weekend in terms of follow-up responses to first-time interactors. 

It’ll certainly be interesting to see if the increased embracing of a gamification approach to CRM – i.e the application of elements traditionally associated with gaming  ­– has an effect, and whether the marketing departments of any major retailers adopt that kind of approach specifically to post-Black Friday purchasers.

Even the most basic CRM model knows three things about customers post-purchase: who they are, what they bought and when they bought it. And this week the ‘when’ is crucial, because as it’s Black Friday marketers know they like a deal. That’s the kind of genuine, actionable intelligence that retailers need to exploit as they attempt to drive more value than occasional purchases of heavily discounted goods. It’s here where the gamification aspect of a sophisticated CRM approach kicks in.

Whereas the old temptation for marketers was to see these customers merely as prime fodder for end-of-line discounting sales and the like, a smart CRM approach will have identified the desired behaviours, and seek to encourage and reward them on an ongoing basis – as well as ensuring there is more than one route to success (and reward) for the customer.

By delivering genuinely meaningful rewards (such as free priority delivery or early access to new products) and increasing their scale (in line with greater, yet still attainable challenges), gamification can create an ongoing relationship that goes beyond the occasional interaction generated by specified discounting or the now increasingly dated accumulation of points approach.

Look at what Marks & Spencer has done with the recent launch of its Sparks loyalty scheme, which now has gamification at the heart of its structure. The retailer has identified frequency of spend, amount spent, advocacy (hopefully) via reviews and promotion of CSR credentials – via ‘Shwopping’ – as the behaviours it wants to influence.

Points in the form of ‘Sparks’ are given based on these behaviours and, by reaching key thresholds, the customer is rewarded with access to special events and priority notifications of sales etc. The scheme goes further by promising to tailor rewards based on a member’s interests.

It’s a similar story with ASOS, but because of the very nature of the brand’s audience the social aspect of ASOS rewards will do the bulk of the lifting to encourage engagement with the brand. Currently when users post an image of themselves on social channels using certain hashtags the content is used on the ASOS website.

Moving forward, those signed up to the loyalty scheme will be awarded points for posting on social channels and interacting with content thus recognising, promoting and rewarding an natural existing behaviour. 

In this age of big data, there’s no excuse not to use this kind of approach: one that both understands a customer’s existing behaviour and attempts to alter it through ongoing interaction. It’s certainly a far better way of winning a customer’s loyalty than straight discounting… after-all, a digitally empowered customer is a notoriously fickle one. 

Post first published in Marketing