Posted by S Swaminathan on Fri, Jan 30, 2009
Here's an interesting article from 1:1 Media on how even a well established company like Sony wants to embrace customer-centricity:
At last week's Conference Board Customer Loyalty conference, Sony Electronics Senior Vice President of Service Platfom Dan Wiersma asked attendees how many of them owned Sony devices. Every hand in the room went up.
So why would a company like Sony, which has so many customers, look at customer-focused initiatives to drive loyalty programmes? "Customer loyalty is the pathway to long-term sustainable growth," he said. Even a company as successful as Sony can't rest on its laurels as competitors flood the marketplace. "Technology is still important, but the customer experience is critical."
Sony discovered that customers have very high expectations of quality across the customer experience, from the products themselves to the packaging. "In some cases the packaging inside the box was just a pile of papers," Wiersma said. "Customers expected something more sophisticated and organized from Sony."
In another example, Sony discovered that customers shopping in a Sony Style store consider it a high-end experience. They wanted a nice box and bag for their purchases, so they could walk around showing off their purchase [à la the very recognizable Tiffany's blue bag.] As a result, in November the company redesigned its Vaio computer box and reorganized its packaging. As an added touch, each box now contains a thank-you card from Vaio's senior general manager, containing his direct phone number and email address.
These are just some of the first steps in Sony's loyalty journey, Wiersma said. While the Vaio product group has been very aggressive with its loyalty programme strategy, some other groups are a little slower to take action. In addition, Sony plans to start working with retailers to identify and interact with the majority of Sony consumers who remain anonymous.
Wiersma hopes to keep internal momentum going with assigned "loyalty leads" for each business unit to help support the loyalty programme strategy. Sony has also set up an internal website called Customer Experience Excellence, where every employee can view loyalty data such as customer verbatim, survey results, and business unit action plans. "It gives employees the opportunity to leverage their capabilities and compare themselves to other business units," Wiersma said.
Posted by S Swaminathan on Sun, Dec 28, 2008
Business Week has a great article on the approach of Del Taco to customer loyalty programmes. Sometimes building customer loyalty schemes is a simple affair of getting some basics right :
Del Taco has become the second largest Mexican fast-food chain in the U.S., behind Taco Bell (YUM). How did it manage this? Walk into almost any Del Taco restaurant and you'll find a counter card promoting the chain's new shakes (it also offers burgers and fries, in addition to tacos, burritos, and quesadillas). On the back of the card, visible to employees, is a reminder to smile and make eye contact with customers. The card is one example of the simple tools Del Taco President Shirlene Lopez uses to build customer loyalty.
Don't miss the little things. Effective communication skills played a prominent role in Lopez's career advancement and she sees such skills as crucial in the way Del Taco builds customer loyalty. "I learned at an early age that customers respond differently based on how you communicate with them. How you greet them and thank them makes all the difference in the world,"
Respect your employees and customers. Respect is a theme for Lopez. It extends to how she believes employees should treat customers as well as how employees should be treated by management. And she thinks eye contact and body language are necessary to convey respect.
Turn transactions into interactions. Lopez believes there is a difference between a satisfied customer and a loyal customer who returns to the same restaurant more than once a week-and tells people about it. According to Lopez, moving beyond merely "satisfied" customers to creating loyal ones is crucial in tough economic times when customers have fewer dollars to spend.
Posted by S Swaminathan on Fri, Dec 19, 2008
According to a Nielsen report on consumer insights, stronger and longer-lasting customer relationship can be achieved by a sound analysis of shopping behavior, leading to targeted marketing programmes.
At Cequity, our belief is that loyalty marketers don't really use their customer loyalty marketing data effectively for creating tangible business impact. Our belief is that loyalty schemes data has to be effectively used real-time(week after week in grocery retail or month after month in lifestyle, CD/IT retail) in target marketing campaign services to build " value perception" & " personalized service/rewards privileges" amongst loyal customers.
Take a look at what the Nielsen Report has to say:
Foundations of loyalty
In an increasingly competitive marketplace, companies that use their loyalty programmes to establish a deeper relationship with their customers are better positioned to prosper. Two foundational factors are especially important within any loyalty scheme:
- Maintaining good customer data with insights, which can be easily distributed throughout the organization for decision-making;
- Developing a business culture that constantly looks for ways to improve programmes that benefit customers by applying shopper insights.
Creating a process for gathering insights, testing programmes and learning about customer response is important. While a few interesting facts about a cardholder's household composition might come from the initial card application, such information and even deeper insights may also be derived by capturing sales history and assessing information about customers from transactional-level purchase data.
Sales data not only tells an analyst about additional family members in a cardholder's household, but it also identifies opportunities to target the household more uniquely through a better understanding of preferences for specific categories, products and brands to satisfy the special needs of a child or any other household member.
Analytical models
Increasingly-sophisticated models also enable analysts to understand why customers shop, how they shop, what they buy and how sensitive they are to various price structures. If properly collected and assessed, sales data can point out everything from pets in the home to family health and nutrition needs. Analysis of the data becomes one way to answer those burning business questions:
· What do customers want?
· How can I keep them shopping in my stores?
· What opportunities exist to increase sales?
Understanding data, analysis, and decision-making are only as good as the commitment by business leaders to continuously apply the insights to developing programmes that positively impact customer behavior. This kind of transformational change and the impact it has on the enterprise takes time. If leadership embraces the use and application of customer data, the business will follow. Even then, the business must adapt in other ways.
Structural changes needed
Organizational and structural changes are required to re-align goals and incentives or develop planning processes that place a focus on the customer. The end result, however, works. Nielsen Loyalty has witnessed established retailer programmes achieve:
- Sales effect increases of 1% to 5% in same store sales;
- Loyal customer basket sales increases of 5% and 9%;
- New customer retention rate increases from 20% to 40%;
- Supplier funding for insight and communications rises from 0.05% to 0.1% of sales;
- Promotional budget savings from 20% to 40%;
- At least 75% of sales tracked at customer-item level.
Every aspect of a retail business and the interaction with supplier partners must embrace the needed changes for these levels of success to occur. It does not happen quickly, but the sooner the shift in focus occurs, the sooner all parties can begin trialing new solutions.
A good example
One North American retailer, well known for rewarding it best "Platinum Fans" customers, wanted to use its Loyalty programmes to further build customer affinity and grow sales. By all accounts, this grocery chain has earned some measure of success-achieving over 85% of sales on card by reinforcing a message of customer value, targeted offers, and special services. These loyal customers received periodic special in-store gift cards and coupons presented to them directly by the store manager for maintaining high loyalty thresholds.
Posted by S Swaminathan on Fri, Dec 12, 2008
A slow economy does not always mean death-knell for brand marketers. The ones who mine customer data, identify purchase patterns and discover useful insights will be the ones who will win in this environment. At Cequity, we continue to advice companies to walk this path with 3 specific strategies:
- 1. Accelerate your customer database management strategy
- 2. Embed analytical thinking within marketing teams where use of data & analysis is made mandatory
- 3. Micro-market - Identify smaller & smaller segments and increase campaign velocity with relevant offers
Here's what the article has to say:
According to Experian, companies that can gain useful customer insights through integrated marketing techniques will benefit from greater agility than their competitors and will be able to more quickly adapt to market changes and provide products, services, and value propositions that are more closely tuned to customer needs and purchasing patterns.
Collect insights, not just data
According to Marie Myles, director of marketing consulting at Experian's Integrated Marketing division, "Based on our experience with some of the world's largest consumer brands, the turbulent economy simply means a re-doubling of efforts to derive even more valuable intelligence from every consumer interaction."
Actions for brand growth
- 1. Understand customers and their needs
Customer insight needs to be continually revisited to ensure that it is up to date, focusing research investment on this area and not solely on the brand. Marketers need to use this intelligence to create engaging and relevant messages based on a solid understanding of each customer's preferences, needs and behaviors. This will pave the way for true one-to-one communication and enhanced brand loyalty.
- 2. Analyze and segment
Customer profiling, clusters or RFV models are essential to identify which customers are spending the most, how to uplift sales and to detect high value customers that show signs of diminishing value. As new trends emerge, marketers can use this insight to adapt and refine retention marketing techniques on a personalized basis.
- 3. Adapt products and services
It is imperative to assess the environment and for marketers to re-evaluate their propositions. In a changing economic climate brands need to be responsive to evolving buying habits. By taking this approach, marketers will be able to offer a better service to customers, making it harder for competitors to lure them away.
- 4. Integrate channels to increase customer engagement
Customers expect to be contacted through different media. Companies need to understand these media links and weave different online and offline messages to build compelling, engaging and personal experiences. Integrating channels at different stages of the customer buying cycle and customer management programme will drive benefits including a more consistent and persistent message.
Posted by S Swaminathan on Sun, Dec 07, 2008
At Cequity, we have always believed that "earning points" in a loyalty program is a means to an end and not the end itself. Many companies fail to see the data from such programs holistically and tend to treat it too tactically leading to managing the points rather than an effective customer management service intent with which they started these programs. One of the few companies that have made this transition happen is Harrah's Entertainment. Here's what David Norton, CMO of Harrah's Entertainment had to say on loyalty card scheme:
Pointillism is a painting style in which the artist dabs small dots of primary colors on the canvas. Viewing the artwork at nose-distance, you see nothing but adjacent points. But step back, and suddenly you see Georges-Pierre Seurat's A Sunday Afternoon on the Island of La Grande Jatte.
Analysis of customer behavioral and transactional data can similarly suffer from such granular myopia. Individual data points viewed without an overall perspective not only masks the larger view, it also blinds you to opportunity.
When I joined the company in 1998, we designated customers who played $400 in a given visit to one of our casinos as VIPs who received preferential treatment. But a customer who played $402 during one visit, triggering VIP treatment, might play only $398 on a subsequent visit and receive no such treatment. More importantly, customers who played only $50 a day but visited 50 times a year received no differentiated service at all.
As our goal is to see the total picture of a customer's play with Harrah's casinos, members earn credits across any one of our 12 casino brands. This feature not only benefits our members; it also allows us to measure their cross-market play. A third of our revenue comes from members playing in a property other than their home property-whether home is Las Vegas, Atlantic City, Reno, New Orleans or Tunica.
Our Total Rewards database also gives us unique insight into our customers' total relationship with Harrah's-including their non-gaming spend. Historically, Harrah's Entertainment earned 80 percent of its revenue from gaming; our initial data analysis revealed that we received less than a third of our customers' non-gaming budget. Once we acquired the Caesars Entertainment family of properties, however, non-gaming revenue-from hotel stays to fine dining to entertainment to shopping-became a significant portion of our business. Caesars Palace provides a strong gaming revenue stream from a relatively small number of VIP players, but many Caesars customers come to Vegas for non-gaming entertainment. We can now encourage non-gamers to use their Total Rewards card, for stays at Caesars Palace, trips to the spa and on our shows and still receive all the benefits of our loyalty programmes. Today, $2.1 billion of our revenue comes from non-gaming activity-and we want the total picture of those customer relationships too so we can customize their marketing and service interactions and thus increase marketing roi.
Posted by Ajay Kelkar on Sun, Nov 30, 2008
Customer loyalty is such an overused term today. Every brand wants it and the common thinking seems to be to just launch a card based loyalty program to buy customer loyalty. In fact recent reports from Forrester find an increasing emphasis on customer experience and a payoff in terms of customer retention. It is of course much harder to truly create a strong customer experience. Inadvertently companies make it more difficult for customers to engage and do business with them. How often in a bank, the relationship manager does not have a single view of all your financial investments with the same bank!! But make no mistake about it, building a superior customer experience is a difficult task and often “silo” based organization structures come in the way. Here is an interesting article by Christopher Musico on how to improve customer loyalty using improved customer experience
Posted by S Swaminathan on Sat, Nov 22, 2008
According to a loyalty programme survey by Maritz Research, Younger Generation of Customers are less loyal to Banks.
At Cequity, we agree this is a challenge for banks and we do recommend banks must change the way they service this generation. They need a whole host of new services which makes it convenient for the young generation to bank with them. Also, there is a need to understand their financial needs and configure products that can fit into their life. Take a look at what the research revealed:
"For the most part, the current customer experience model at banks caters to the Silent Generation and Boomers, who more frequently bank in-person at branches. But, younger generation customers are much more mobile and rely more heavily on online interactions," says Thad Peterson, division vice president, sector strategy and solutions for Maritz' financial services sector.
- 37 percent of Gen Y and 36 percent of Gen X believe they would get better customer service at a different bank, compared with only 24 percent of Boomer and 16 percent of Silent Generation respondents.
- 22 percent of Gen Y and 21 percent of Gen X reported being upset in the past year about high fees, whereas only 14 percent of Boomer and six percent of the Silent Generation respondents reported the same.
- 18 percent of Gen Y and 17 percent of Gen X reported being upset about a lack of ATM locations, compared with only 11 percent of Boomer and three percent of Silent Generation respondents.
Washington Mutual is one institution that successfully caters to the needs of younger customers. WaMu no longer requires a signature to open a checking account. The bank simply uses the first signed check as the authorization signature -- incenting new customers to do business with the bank by simplifying the process and eliminating a trip to the bank. It appeals to the Gen X and Y customer desire to just "get it done,"
Read to find out more about banking loyalty solutions.
Posted by S Swaminathan on Fri, Nov 21, 2008
1959 was the year The Marketing Society was founded and the birth of modern marketing. Today, The Marketing Society is the most influential network of senior marketers dedicated to championing marketing in the UK.
Selecting a brand for each of the past 50 years was not easy. Their shortlist was assembled using a variety of different criteria. Which brands were launched, relaunched or revamped? Who was winning awards? Who were the top spenders and the top sellers? And which brands encapsulated the zeitgeist of the year?
Take a look
Posted by S Swaminathan on Mon, Sep 08, 2008
Allegiance and Peppers & Rogers write on how to manage Loyalty Schemes:
..the traditional axes of competition - product, price, place, promotion will no longer propel growth but will simply allow parity with competition perpetuated. Winning today requires a new competitive advantage: people - both employees and customers - who are not only satisfied, not only loyal, but also engaged.
.. the new view of engagement involves five levels. At the most basic level, an engaged customer or employee must be satisfied.... If this is achieved, then there exists opportunities to build loyalty schemes...Loyal individuals have the option of recommending the company to friends.... The last tier in the continuum involves an emotional connection...reflected in an employee proud to work for the company or customer being excited about the direction of the company.
Posted by S Swaminathan on Mon, Sep 01, 2008
Here are the latest trends in B2B loyalty schemes, technology and analytics that can help business build a bond with other businesses:
How do you transform your company from a mere vendor into a valued partner? By building a loyalty platform on a strong foundation of customer data-and leveraging that platform to identify, understand and influence the consumer behind the account number.
Here are some best practices that you should consider:
IDENTIFY: People, not account numbers
Here's a look at a few of the predominant models for identifying critical B2B contacts:
Give them some face time.
Jeff Hayzlett, Chief Business Development Officer for Eastman Kodak Company, is intimately familiar with the B2B identification challenge. Given the vast variety of customer types, Eastman Kodak's approach is to facilitate meetings and events with end users who value the chance to interact with the company on a personal level. Kodak's annual Graphic Users Association Conference brings Kodak product managers and software developers face-to-face with their end-users, while a series of customer councils for publishers, commercial printers, and database marketers helps Kodak identify key decision-makers and influencers and give them tools to help them grow their businesses.
Use Web 2.0 tools-but warily.
One in three small-business owners now cultivate leads and choose suppliers based on recommendations from social-networking web sites such as Facebook or LinkedIn. "Increasingly, small-business owners are getting referrals and searching for supplier recommendations through their networks. Direct mail, newspaper and broadcast advertising are becoming less efficient mediums for reaching small businesses."
UNDERSTAND: It's the database, stupid
Once you have identified your sweet spot of small-business customers, the next step is to spend some time understanding their current behavior and comparing it to that of your best customers. Your goal is to isolate behavioral gaps that can be overcome with the right offer.
Treat your database like an asset.
B2B data degrades much more quickly than consumer data. While a consumer might keep the same email address for most of her adult life, a small-business buyer might change jobs, get a new title or return to the corporate world. That makes data refreshment a continual challenge.
Thou shalt not live on transactional data alone.
A 2008 Marketing Leadership Council study found that, because the cost of switching suppliers is higher and more complex in B2B, "attitudes"-in other words, the customer's emotional connection to the brand-are often better indicators of B2B loyalty than pure transactional behavior. Small-business customers can look loyal in the transaction file, but a survey might find pockets of disgruntled customers who could benefit from an intervention.
Become a data conduit.
In the consumer world, data tends to flow one way, from the consumer to the database. B2B marketers, by contrast, can also learn a lot about their small-business customers by reversing the data stream. Small-business credit cardholders who lack accounting departments, for example, can benefit from information on their business purchases. AT&T Universal Business Rewards cardholders not only earn Citi ThankYou Rewards points on all purchases, but also gain access to a wealth of tools to help track and analyze business expenses.
Read more on Customer Loyalty Marketing