Have you heard the story of the blind men and the elephant? In this famous Indian legend, a group of blind men touch an elephant. However, each man feels just one part and it is a different part of the elephant for each man. They compare notes on what they felt and are in complete disagreement. In many ways, this is how the customer is seen by some companies. The digital marketing team has one view of the customer, the product marketing managers have another view and creative might have a third view. Here are five reasons why you should hire a Chief Customer Intelligence Officer who will integrate and disseminate insights for a holistic customer-centric approach:
1. Grow revenue. An integrated understanding of your customers and their journey with your company will enable you to up-sell and cross-sell effectively to them. Only with a comprehensive view of the customer will you know whether he wants more of the same or if he needs something different. Rather than the product managers focusing on promoting their products and meeting their sales goals, customer preferences and needs would take precedence.
2. Reduce acquisition costs. Consolidating insights across channels and products will enable you to segment your customers by purchase history, demographics, lifestyle, lifetime value, etc. Thus, you can provide the right message to each segment and find new customers who look like these segments. With better targeting and identification of your best customers, you can find new customers who are similiar.
3. Enhance customer retention. Customers expect a coherent and consistent customer experience across channels. If you integrate insights and provide an experience tailored to their needs, behavior, and attitudes, they are more likely to be retained and become advocates of your brand.
4. Improve campaign performance. Customer insights from the direct marketing channel can inform strategies used in the digital marketing channels and vice versa. For example, you could re-target visitors to your website or social media advocates via direct marketing.
5. Increase customer satisfaction. Customers will reward your focus on their needs and preferences with increased satisfaction and willingness to recommend your brand to others.
I am currently interviewing candidates for an Analyst position on my team. It is hard enough to find someone with the right skills and experience. But there are other considerations as well:
1. Any new hire needs to compliment the rest of the team. A variety of skills, personalities and experience are needed for the team to be successful. In Walter Isaacson’s great book on the digital revolution, he quotes Steve Wozniak as saying, “Every time I’d design something great, Steve [Jobs] would find a way to make money for us”. Wozniak was the engineer and Jobs was the marketer. Both were needed to make Apple successful.
2. It is not enough to be smart. I am looking for people who will collaborate and be a team player. Lee Iacocca captured it well. “A major reason capable people fail to advance is that they don’t work well with their colleagues.”
3. Team members need to talk and listen to each other. The best ideas often result from the back and forth of discussion and reflect a combination of insights and suggestions. Further, we learn and grow professionally by listening to and potentially challenging the ideas of others.
As I think of all of the reasons I have to be thankful this year, one is the continued focus on marketing analytics and the value it can provide across industries:
1. Spend on marketing analytics is expected to increase. Currently analytics represents 6.7% of marketing budgets but it will rise to 11.1% over the next three years according to this CMO survey
2. Analysts are in demand. In a list of the hottest skills on LinkedIn, the top was statistical analysis and data mining
2. Analytics add value by increasing company profits. According to a McKinsey study, “a one-unit change in the use of marketing analytics … yields a 0.39 percent increase in profits”
I am very thankful that what I love to do is valued and in demand.
An interviewer once told me he was thinking of creating a loyalty program and wanted to know what he should do. Loyalty programs can be a valuable tool for driving revenue and fostering customer loyalty as I have written about here. As I noted in another post, they can help you make smart marketing and merchandising decisions.
However, a loyalty program needs to be grounded by your business needs. Ask yourself first:
- What am I trying to achieve? Do I want to improve customer retention, drive revenue or encourage customers to purchase multiple products and services from my company?
- How will I measure success? What metrics will I use to measure if I am achieving my goal and can I track those metrics on an ongoing basis?
- Will my program be public or private? Some luxury brands enroll customers in loyalty programs based on their spending habits and reward their best customers without letting them know they are in a loyalty program.
- Will my program have tiers? Explicit tiers can encourage customers to stretch and reach the next level.
- How will I reward my customers? It is important that customers value what they receive in return for their loyalty.
There are significant financial considerations to any loyalty program so Finance will need to be involved in the development and design of the loyalty program. But these questions will begin the dialogue about what the loyalty program should look like. Once you have it in place, you should monitor the program’s health.
The new year has begun. Now is the time to measure the success of your holiday campaigns. How did your campaigns perform? This is an opportunity to look at their effectiveness in terms of building awareness, generating revenue, increasing retention and aiding customer acquisition? How do your metrics compare to industry benchmarks as well as internal benchmarks? How much revenue did they generate and were they profitable? In addition, what worked and what didn’t? Now is the time to evaluate any tests that were done – date/time, subject line, creative, etc. Finally, compare the results of this past holiday campaign to the one before and analyze the differences. The insights from the holidays can inform your strategy for 2012.
I was driving by a shuttered Blockbuster store recently and naturally I thought about disruptive technologies.
When VCR tapes first became popular, Mom and Pop stores started catering to a newly created market for movie rentals. I remember the excitement of being able to rent movies and, for a time, the video store became the place where you regularly saw friends and neighbors. Then Blockbuster came along and pushed those small stores out of business. The selection was better and you could keep the movie for a few days. Now Blockbuster has been shoved aside by Netflix, despite launching its own website and providing a similar service whereby you receive and return DVDs by mail. With its bankruptcy and later sale to Dish Network, Blockbuster and the video rental store has been officially rendered obsolete.
Now Netflix offers on demand streaming video of movies and old television shows. They have also announced deals for original content. Blockbuster was too slow to evolve and see the value of a flat fee subscription service and the convenience of mail. Netflix has taken the concept of video rental and is now becoming an important distribution channel and could possibly complete with cable channels for content.
Every business needs to beware of disruptive technologies that will render its business model obsolete or redefine the market. You never know where the threats might come from or how much time you will have to react to them.
The recent discussions about parents promoting academic achievement had me thinking about what it means to be successful in the workplace. In case you missed the Wall Street Journal’s article, “Why Chinese Mothers Are Superior”, let me briefly summarize. Amy Chua writes about how she restricts her daughters’ activities (no sleepovers, play dates, school plays, TV or computer games) and requires that they get all As in school, be the number 1 student in every subject except gym and drama, and that they play only the violin or piano. Her point is that parents who raise successful children stress academics and tenacious practice.
However, what is the effect of promoting academic skills at the detriment of social skills? During play dates, sleep overs and other extracurricular activities, one learns important skills as well. Most workplaces require that you work in teams and to be successful you must be able to collaborate and work well with others. That means you need to be able to understand and deal effectively with a range of personalities. It starts on the play ground and continues during play dates and sleep overs.
Social skills are also needed outside of work. For example, in business school I was assigned to a team of fellow students during my first semester. There was no hierarchy but we had to work together to effectively learn and manage our considerable workload. Since no one person had positional authority, one needed persuasion, negotiation and hard work to insure that the team met deadlines, allocated tasks, and helped each other. One of my proudest moments was when a team member asked me to edit a team paper because he thought it could be improved upon. He valued my insight and recognized that I was an effective team player. Even though I had not been assigned to write this paper, I would help the team out.
Stressing academics will result in educated individuals. However, to effectively work well in an organization, you often need more than education and technical knowledge.
Much has been written about the value of Groupon and its power to drive traffic to participating retailers. The hope is that new consumers will try your store and buy additional items, above and beyond the promoted item or coupon threshold.
However, what if consumers come to your business and simply buy the item on offer? The Wall Street Journal recently reported on a toy retailer that had offered $20 worth of merchandise for $10. Most consumers bought just the minimum amount needed to redeem the coupon. According to the Journal, the toy company lost money on 75% of its Groupon sales. Further, most of the customers who used the coupon were existing customers. While this is just one story, it is a cautionary tale.
It is important to drive incremental trips and often coupons, discounts, and loyalty reward certificates are an effective means of doing so. However, it is also important that these trips at least break even.
As I mentioned in my prior post, loyalty programs are a valuable tool. They can help retain customers and companies can win greater share of wallet as a result. If a customer can buy the same goods or services from multiple sellers, a loyalty program encourages customers to consolidate their purchases. It might also create additional demand. For example, a reward certificate can spur an incremental trip or customers may splurge in order to meet a spending threshold.
Another benefit of loyalty programs is the insight into customer behavior. This has far reaching benefits. Take the example of a retailer. This customer insight can help both marketing and merchandising. Using the data collected, a retailer can segment their customers based on past behavior so that they can tailor their messages and offers appropriately. For example, marketers can use this information to personalize product promotions, cross-sell products and identify new customers that have the potential to become to best customers.
Further, this data will provide insight into what products bring new customers into the store, what products drive repeat purchases and what products are typically purchased together. Merchandisers can use this information to plan promotions and make buying decisions.
To be valuable, the data must drive actionable insights and be used to continually improve the loyalty program. I will write about using data to evaluate the health of a loyalty program in my next post.