Creating "wow" at the Retail front end?

Last week, Cequity was speaking at an event hosted by the Retailers Association of India(RAI) and the topic was really about how Retailers can make Customer experience their true diffrentiator!

The interesting thing in Retail is that eventually ,competitive advantage in location,merchandize assortments & price can be replicated by competition ,but Customer experience can be a unique diffrentiator. The difficult thing about this is that Retail brands have so many touch points with customers and how do you make each of these interactions "memorable".

Many organizations,especially in growth markets & industries are already dangerously "out of synch" from their customers.  One of the indicators of this is this Bain’s research that found 80% of companies believed they were delivering a superior customer experience while only 8% of their customers thought they were receiving a superior experience.

I believe that the key lies in not making the "customer experience" the accountability for any one function but rather making it a key company competency across function. Bruce Temkin of Forrester has this interesting perspective "Treat customer experience as a competence, not a function. Delivering great customer experiences isn’t something that a small group of people can do on their own — everyone in the company needs to be fully engaged in the effort. It all starts at the top; the CEO and his executive team need to be fully engaged in the effort. To keep a companywide focus on customers, companies need a systematic and continuous approach for incorporating customer insights into all of their efforts. That’s why we recommend building a voice-of-the-customer program".

In the last 12 months Customer experience management (CEM) has started to get more profile but it is still just a good idea emerging into an area of marketing thought currently dominated by CRM. CEM is currently a poor cousin to CRM. If it is to grow up and become a powerful business tool it must move out of marketing and directly link itself to business outcomes.  See what Adam Ramshaw has to say about ‘Will Customer Experience Management grow up big and strong like its rich cousin CRM?

http://crmguru.custhelp.com/cgi-bin/crmguru.cfg/php/enduser/std_adp.php?p_faqid=1638

 

 

HOW TO DESIGN SMART BUSINESS EXPERIMENTS?

Gut feeling based decision making! All of us do it all the time. But doesn't data have a role to play? Wouldn't we be more effective if we can use data to conduct the equivalent of laboratory experiments! Managers now have the tools to conduct small-scale tests and gain real insight. More than the tools however,testing is actually about the discipline that an organization has to put in place a "fact based decisioning environment". Often many companies find it difficult to build the "eveidence based culture"-an environment in which everyone needs compelling data to take important decisions.

But what is too much testing? Thomas H. Davenport explains the ups and downs of testing in analytics.

http://hbr.harvardbusiness.org/2009/02/how-to-design-smart-business-experiments/ar/1

The Complaining Customer-predict her!

The complaining customer - we just can’t stand them! Well, most of us can’t stand them.  The reality is that business organizations should love them.  Shep Hyken comments that "A complaining customer tells you where you can improve.  They actually come forward and show us where we make mistakes. But, most of the time, people hate to hear the complaints. First, a few facts you should know about people who complain.  Most of the time, when people have a complaint, they complain to everyone else rather than the person or people who caused the complaint. If you resolve your customers’ complaints, you will keep them most of the time.  But first you have to know there is a complaint.  So, how can we find those complainers? Well, most likely customers won’t tell us, so, we have to ask them. It is that simple.  Call them up or ask them in person.  Actively solicit feedback to find out what they are thinking." 

And most criticaly use Customer behaviour data to spot Customer service failures as they occur. Customers are constantly leaving behind a data footprint of "failed brand promises". Direct data analytics to spot incidents of customer promises "not met". The crux of " Analytical marketing" is using data to drive an improved customer experience. Imagine if a bank were to call you up and say " I am sorry sir ,we are one day behind schedule on your cheque book request,please accept our apologies and your cheque book will be with you tomorrow morning". Or better still build predictive models to find customers where "service levels are likely to slip" and then proactively monitor that customer's transactions to create a moment of delight.

And when you find a problem or complaint, resolve it on the spot. No company is perfect.  So find out what those imperfections might be. And, when you hear about a problem, fix it.  And make sure you give that customer a reason to come back so you can do it right the next time.  Take that moment of misery and turn it into a MOMENT OF MAGIC.See what Shep Hyken has to say about ‘The Complaining Customer’http://www.hyken.com/Article_11.html

Extract greater value from existing CRM applications!

In this down economy, organizations must maximize the value they get from every available resource. Often CRM has been thought of as a long term strategy and companies have looked for long term returns from these investments.What gets missed out is that there are many ways to get "quick wins" from CRM. Too many CRM initiatives have failed becuase too much effort was spent on creating effective capability and not enough effort spent on "finding and extracting short term profit opportunities". Have a look at this interesting article from Mc Kinsey which talks about how you can use CRM to drive short term profitability enhancement.Take a look at what Mc Kinsey calls Tactical CRM !!

Also with the advent of software-as-a-service (SaaS) technologies, your organization can easily and cost-effectively extract greater value from your CRM - and demonstrate greater value to your customers. Often building organization capability takes years ,but using the SaaS technologies allows you to bring in a specialist team along with a customized technology application.

See what Michael Zirngibl, CEO, Angel.com has to say about ‘Extract greater value from existing CRM applications'.

http://www.dmnews.com/Extract-greater-value-from-existing-CRM-applications/article/126869/

Air Miles to Help Others Manage Loyalty Programs

Airmiles, the rewards program owned by British Airways, is launching a new company devoted to managing white label loyalty programs for other businesses.

 It is interesting to see how the core proposition of a Loyalty program,which is to enable "profitable growth from loyal customers" can get quickly re directed to an entirely new business model. Why would a business transfer its core strategic diffrentiator on a platform and make it available to others?

The Mileage Company, which went public this week, will run the existing Airmiles program and British Airways' frequent flier program, BA Miles. Andrew Swaffield, managing director of The Mileage Company feels that since the recession has really started to bite around the world, loyalty points are more valuable to customers, and loyalty schemes are more valuable to businesses who are looking for ways of keeping customers loyal and ensuring they don't lose them to the competition.

The Mileage Company will use some major lessons gleaned from 20 years in the business to drive strategy for its new clients. It will stick to the tenets that successful reward schemes must be simple and consistent, with rewards that are attainable. The Mileage Company will use its particular expertise in the travel arena to woo new clients from that industry. Retailers and service providers also have shown interest in working with the company, Swaffield said, particularly those with higher-income customers. Airmiles' recent success could help encourage new clients to climb aboard with The Mileage Company.

See what Lauren Bell has to say about ‘Airmiles to help others manage loyalty programs'.

http://www.dmnews.com/Airmiles-to-help-others-manage-loyalty-programs/article/130696/

Making experimentation work "in store"!!

What do Silly Putty, Viagra, and penicillin have in common? They are all accidental discoveries or unexpected applications of existing products that came about when researchers were looking for something else. What does this have to do with grocery retailing - especially with tools that promote the cross-sale of national and store brands as well as using communications in fresh departments to drive shoppers into center-store? Maybe the point that can be made is that Retail stores can be used as a great platform for experimentation and the sales data can provide very strong linkages to Marketing strategies that work! But how often do Store managers actually experiment within their stores and do they set up scientific experiments which can be measured with sales & loyalty card data.

In an intensive, long-range in-store test, Miller Zell did indeed "accidentally" find a unique set of strategies and tactics that drove significant incremental revenue across a broad selection of store brands, including a notable lift in both national brands as well as fresh-food sales.

Hear Chip Miller's Innovation on Retail Strategies.

http://www.hubmagazine.com/content/store-brand-surprise-0

The One-to-One Marketing Myth

We have all fallen into the "one-to-one" marketing trap. Songwriter Randy Newman once penned, "One is the loneliest number," yet we promote one-to-one marketing as a strategy to be embraced.

Often it is hard to support the strategy in the "trenches" and then not only does "one to one" lose its value-it can even do damage. An example could be a Retailer who promise Express check out lines to PLatinum customers on paper but at the store they do not have the manpower to run the extra line! 

Many companies manage some powerful database-driven, relationship-marketing programs. All have the overriding objectives of driving frequency and building individual consumer sales. But it's a bumpy road and "one to one" marketing should not become the art of compromise argues Bart Foreman in a compelling article! For example, one client has almost 1,400 stores, so management says it's impossible to keep a list of store managers current and all communications come from the vice president of marketing. The net result is that one of the "ones" in one-to-one marketing is a faceless manager in a big company.

Every customer has potential: Your best customers have the potential to leave; your marginal customers have the potential to buy more; and other consumers have the potential to buy. A carefully crafted relationship marketing strategy, coupled with a customer-centric focus from your front-line sales associates, will bring marketing and service closer together. The end result should be sustainable, long-term growth one customer at a time.

Bart Foreman replaces the original concept of one-to-one marketing with a literal, but convincing view in this article.

http://promomagazine.com/mag/marketing_onetoone_marketing_myth/

How do CIOs tame the CRM beast?

MOST chief information officers (CIOs) may believe that these are not the right times for new projects with expensive funding requirements. But this might prove myopic, especially where customer relationship management (CRM) is concerned.

The last thing an organization would want now is to lose customers. This is the time to deepen relationships with customers. It is on the strength of these relationships that companies will survive the downturn. In fact, most market analysts are telling companies to invest in the most suitable CRM technology before the competition beats them to it.

I also feel that the key point here is that it takes time for key benefits to accrue out of a CRM strategy. For a large organization,it may take 2 to 4 years to extract enough value to make Business impact happen. This is largely because the Change management required in process,people,structure & incentives takes time to play out!

Most companies have invested huge quantities of capital in their back-office environments. To move forward in today's economic reality, these companies need to free investments in one area of the business to fund more important business strategies such as CRM.

See what Nitin Pradhan,has to say about the Customer being King.

http://www.blonnet.com/ew/2002/02/27/stories/2002022700100200.htm

The Data Deluge Makes the Scientific Method Obsolete

 

Chris Anderson has written a great article in Wired on the data deluge and how it poses new challenges to the companies. He writes that the petabyte age that we live in information is not a matter of simple three- and four-dimensional taxonomy and order but of dimensionally agnostic statistics. For companies, that have or gather loads and loads of data, the implications are about how can they quickly sift thro' this massive volumes of data and the successful ones will be the ones who can track and measure this with unprecedented precision and scale. Take a look:

Speaking at the O'Reilly Emerging Technology Conference this past March, Peter Norvig, Google's research director, offered an update to George Box's maxim: "All models are wrong, and increasingly you can succeed without them."

This is a world where massive amounts of data and applied mathematics replace every other tool that might be brought to bear. Out with every theory of human behavior, from linguistics to sociology. Forget taxonomy, ontology, and psychology. Who knows why people do what they do? The point is they do it, and we can track and measure it with unprecedented fidelity. With enough data, the numbers speak for themselves.

The big target here isn't advertising, though. It's science. The scientific method is built around testable hypotheses. These models, for the most part, are systems visualized in the minds of scientists. The models are then tested, and experiments confirm or falsify theoretical models of how the world works. This is the way science has worked for hundreds of years.

Scientists are trained to recognize that correlation is not causation, that no conclusions should be drawn simply on the basis of correlation between X and Y (it could just be a coincidence). Instead, you must understand the underlying mechanisms that connect the two. Once you have a model, you can connect the data sets with confidence. Data without a model is just noise.

But faced with massive data, this approach to science - hypothesize, model, test - is becoming obsolete. Consider physics: Newtonian models were crude approximations of the truth (wrong at the atomic level, but still useful). A hundred years ago, statistically based quantum mechanics offered a better picture - but quantum mechanics is yet another model, and as such it, too, is flawed, no doubt a caricature of a more complex underlying reality. The reason physics has drifted into theoretical speculation about n-dimensional grand unified models over the past few decades (the "beautiful story" phase of a discipline starved of data) is that we don't know how to run the experiments that would falsify the hypotheses - the energies are too high, the accelerators too expensive, and so on.

Read more on understanding data

Content on-demand will open more information about customers

 

Here's an interesting trend from emarketer on what to expect in the next couple of years on content and data of what & how customers will watch TV and consume entertainment which will become available for analytics &  customer centric marketing.

"At eMarketer, we believe TV viewers will watch more, not less, TV content in the future," says Ben Macklin, senior analyst at eMarketer and author of the new report, TV Trends: Consumers Demand Control. "But they will be accessing and viewing it in different ways from the past."

eMarketer estimates that by 2012 nearly 25% of all TV content watched each day will be time-shifted, on-demand, on the Web or on a mobile device.

"Video-on-demand, digital video recorders, the broadband Web and 3G mobile phones are giving consumers new ways to access and watch TV," says Mr. Macklin. This does not spell the end of the traditional live TV broadcast or the traditional 30-second ad break, but TV advertising will need to evolve if it is to keep pace with consumer usage.

"Traditional TV broadcasters and advertisers have little time to wait to reinvent themselves and their organizations to take advantage of the interactive, on-demand and mobile video future," says Mr. Macklin.