Held at the New World Hotel last October 24, 2014, the 3rd Customer Loyalty Conference focus on omni-channel customer experience management strategy since it is being regarded as an imperative marketing approach in today’s marketplace. Omni-channel customer experience management strategy uses multiple channels or touchpoints (e.g. social media, in-store , website , email) to engage their customers, establishing consistency and focus on devices and experiences involved in their client interaction ; meaning customers receive the same message and experience through difference channels and devices involved on their interaction with the company. The topic was creatively explored through five speakers whose inputs were equally valuable and insightful for marketing practitioners across all industries and size of business .
AGE OF ENGAGEMENT: Loyalty Programs and campaigns today
The first speaker Ms. Yayu Javier, President of Philippine Marketing Association and President & COO of Avanza Inc. talked about AGE OF ENGAGEMENT: Loyalty Programs and campaigns today . She advised the delegates the following:
- Engage with your customer by knowing who they are, their purchase behavior and providing offerings at the right time using the right channel. To know who they are, data should at least contain the Time of purchase, Basket analysis, Branch purchased at, Spend per visit , Frequency, Recency and Customer profile. While it is a challenge to draw customer profile, Ms. Javer advised to collect only the personal data you need.
- Once data is gathered , tiering strategies include – continuously communicate to make them understand their tiers, focus on middle tiers to move up and keep the benefits simple.
- Build sites and apps around customers behavior and preferences. Engage in various channels maximizing engagement online and offline. She cited Social CRM as another new way of engagement as 4 out of 5 consumers will go online to verify those recommendations ( from clicks to bricks). Social CRM is the use social media services techniques in technology to enable organizations to engage with their customers. Companies, brands or advocates may witness how the market move from fans and followers to customers and advocates.
- On offline / in-store experience for retail companies, studies show that frontliners are the primary influencers for loyalty; as in 70% of influence come from this portion. Companies are advised to consider the services of mystery shoppers to check on frontliners. Analysis should be aligned with KVIs (Known Valued Item). Company should extend from online networking to offline in-person. Incorporate employee and loyalty program as well.
- Give them the customer experience that will inspire them emphasizing that Loyalty Programs are not just about points, some about emotional connections and customer experience
- Consider gaming as a challenging activity that can engage customers.
- Another advice was to “make your brand be part of engaging with their loved ones”, citing the Burberry, The world of kisses (kisses.burberry.com) as an example.
- Learn to surprise. Citing WestJet Christmas as an example, the element of surprise and the experience of being treated “special” never fails to engage.
Ms. Javier holds that when you inspire your customers and they will be your best sales people.
- Reward them not just for spend but for other activities in other channels. The moments of truth, the touch points. Why not change point system and not money back system.
- Provide a seamless experience through a single-customer view and communications.
Ms. Javier further advised during the Q&A portion that most sources of failure are as follows:
- Giving points that are not enough for them to redeem. Ideally points system run from 6months to 1 year, it will be a failure if forever.
- Failure to send relevant communications. “We ask them to pay and we don’t even communicate with them.”
What’s one thing they are doing right as a company is continuously communicating with the customers based on profile and behavior. As a take-away, Ms. Javier stressed that “ the trends now goes to customer experience , so companies should go mapping out your customer journey , from website to store, guard, touchpoint, add on points, perks, benefits, events, online, have to review your customer journey. Have to always have that element of surprise. Once inawhile you have to do something that they will never forget and they will become your best advocates.”
CREATING EVANGELISTS: The ROI of engaging your loyal customers.
Mr. Mark Mullinix, Founder & Managing Director of Loyalty Advantage tackled this issue with more technical insights on achieved revenues against expenses made on loyalty programmes . He encouraged companies to review what are these figures worth to the company as it isn’t all about numbers. Loyalty program is nothing without costumer data and companies should know these customers based on analytics and insights; as to which customer behavior becomes more profitable, or which ones should be rewarded .
Mr. Mullinix advised that while loyalty programs get attention, it is quite a challenge if you are in an environment where everyone has one. With such lots of choices, all with their own loyalty programmes, consumers will still tend not to have a choice at all, unless your company or brand helps them make easy choices. He encouraged companies or brands to start from the end, because if the loyalty program is not tied to corporate goals, it is definitely falling behind competition. Define the goal, yet the goal is simple – drive more profits, revenue. Then analyze what you have, based on acquired data. Most of the time, you don’t need new customers. Loyalty for acquisition is for new companies only. Studies show that for existing companies with customer data on hand, 60 – 70% existing customers will buy new products and only 5% sales come from new customers. Hence “growing your existing customers is the key. Make sure you have data on Recency, Frequency and Value margin” . Then develop your Engagement Framework from this data.
Another interesting insight from this topic is about really scraping the data based on who’s premium in terms of the three factors mentioned above – recency, frequency and value margin. Should companies decide to economize on loyalty budget, they may cut down by prioritizing premium customers, and just as how studies show, the responses / results will be the same.
Mr. Mullinix asserted that creating evangelists , or an enthusiastic advocate, is the real ROI of engaging loyal customers. It will be nice to have a customer who would say “I love this company” to your company. He further advised that what motivates people to keep shopping that requires no cash discounts is good service and the priceless customer / user experience.
CUSTOMER EXPERIENCE: Creating Magnetic Touch points
Ms. Michelle Patel, First Customer Experience Advocate & Founder and Managing Director of SatisFIND, speaking from the heart as a ‘mystery shopper’, defined Magnetic Touchpoints , identified these touchpoints , presented thumbs-up touchpoints and explored the usual company failures on creating them. Magnetic touchpoints means the customer experience has to be in the context of the actual touchpoints that customers describe the interface of a product, service brand with customers and other stakeholders before, during and after a transaction. Defining further, “Magnetic” literally means being extraordinarily and irrepressibly attractive, however in marketing point of view, it may mean combining great functionality with intense emotional appeal; where functionality is enhanced, the more attraction there is towards the brand and customers.
Some examples Ms. Patel cited were those touchpoints that present 1) element of surprise, 2) those that tries to upsell , and 3) situations where customers just have nothing to complain about .
Here are the basic stages on identifying touch points across industries. Identify the customer journey by walking in your customers shoes . Note that at every stage, the touchpoints have to be defined.
- Welcome stage – how to welcome , both for online visitors and instore.
- Assess the business process from ordering to payment, to delivery
- During Delivery
- Closing (how do you end the experience for the customer)
- After sales
- Customer recovery (e.g. Complaint handling)
One classic example Ms. Patel provided was of a hotel customer journey
- First, research for good accommodation & rates – Agoda or Tripadvisor
- Make reservation – online mostly
- Arrive at the hotel (offline) – how do you want to meet the customer, maybe with a garland? How to make it more memorable, what about having a welcoming local band?
- Check-in (offline)
- Use guest room (moment of truth) offline – should give that wow moment , where customer will feel “1 got value for what I chose”
- Use amenities maybe – pool, comfort rooms, transport service, etc.
- Payment & check out – should be seamless and hassle free
- Customer feedback (online)
Managements should sit down and define, “what is the IDEAL customer experience that we want them to have. What should be the acceptable level that we settle for? Nowadays is not enough to offer the minimum requirements, ,offer something else, to be memorable and be assured to get business over again.” More questions that need to be answered during assessment :
- Where are we now vs. the ideal?
- How far are we from the acceptable level?
- How do we get there?
- Are we ready?
This exercise is important to do and it will help if the company or brand asks the same questions to their own customers and competitors as well.
Ms. Patel assessed though that while not all organizations have the system in place here are some guides or reminders to help the company through:
- Commitment from all the stakeholders, frontliners, supervisors, head office department heads, top management and even owner of the company should be sought and assured as this is more a holistic approach. Some common thumbs-down failure on delivering magnetic touchpoints cited were:
- “We’re on soft opening” but actually been on operations for like three months and staff continue to use that excuse to customers for not delivering fast enough or when selling procedures have holes in the process.
- “But our staff are contractual”
- “We are undermanned.” Its not about being under staff, its about efficiency.
- “But our store is doing well”
- “But they are GC customers”. Please remind frontliners and sales staff that GC customers are valued, VIP customers. Some frontliners feel not to bother, mistaking them for bargain hunters. Frontliners should never discriminate on providing service. They have this weird notion on their head that if it is a GC, it is a non-revenue transaction. To avoid these situations, it’s not enough to have a mechanics, need to really tell the sales people and frontliners who are you giving these GCs to.
Note that there is no excuse for bad service. Customers paid full price and expect to get what they paid for. To address this, more tips as follows:
- Train or orient staff how should we reply to excuses.
- Review the objectives
- Ask what support sales and frontliners need, marketing should come up with a better spiel.
- Come up with solutions together so that operations will feel that they are part of the problem resolution.
- Be realistic, identify resources and timeline to come up with touch points that will support the goals of the company.
- Make the exercise measurable and don’t start copy pasting touch points. Great companies have great touch points because they have a strong culture, system in place to support it. Every company is has unique approach and processes , never copy. In evaluating the performance of the program, identify issues and address them:
- Staff didn’t know what to do – conduct trainings and re-trainings. “Explain the WHY.”
- Staff didn’t want to do – this is a supervision issue. The “why do we have to bother” attitude are issues concerning management, policies and equipment, review them.
- Supply and demand issue – this is a financial planning concern so the CFO should be consulted.
- Isolated issues – track if this trend of problem is growing over time. It will be hard to measure performance without proper categorization of the problems.
- Identify and address customer pain points
- Own the touchpoints – marketing department has to be the custodians of the touch points, assess, measure, improve on a regular basis. Monitor performance, know which branches not performing up to par. Consistency is key.
- Welcome feedback , these are helpful on drawing improvements.
- Recognize excellence – need role models in the company
- Protect your uniqueness
- Change the rules of the game. Don’t be the brand that gets displaced because competitors came up with a better touch point.
- Include the following in the assessment – Employee loyalty, Customer loyalty, Customer advocacy
As an allusion, Ms. Patel compares marketing and customer loyalty to a Mother & Child relationship. This is nature’s example of a magnetic relationship where mothers organize and serve to suit the child’s needs.
THE PHABLET ERA: Effective Use of Mobile Apps in Engaging Your Customers
Mr. Andrew Roth, Founder of Perx (getperx.com ) guided the delegates on how to draw customer loyalty from a trending touch point , the mobile app. Note that the Philippines is the second most mobile-engaged country, with an average screen time per day of 5hrs. This in mind, plus the global studies that show users check their phone 150 times a day, companies should take action and grab some of that that 5hrs onscreen. It is also worthy to note that 90% of businesses agree to the 80:20 rule (80% revenues come from 20% of their customers), but no one knows that 20%. Mobile app may help reach out to more customers and at the same time identify who they are, to engage them better.
Here’s a snapshopt of Mr. Roth’s advice to marketers:
Benchmarks against competitors .
The power of mobile channel includes website, email, socials, and the availability of an app may benchmark against competitors. However , don’t get overwhelmed, here are the what- not- to- do when it comes to mobile:
- Don’t build a mobile app that’s basically a website.
- Don’t do one that has lack of customer engagement. Note that most people use only about 8 apps on their phone regularly, be one of that 8 apps by providing worthwhile information. Studies show that 30% MAU (monthly active user )rate is hard to maintain, so benchmark for a good mobile app. If say at about 100k download and only 10k use your app per month, reconfigure.
- Don’t treat mobile as just a discovery tool. Take advantage of the pre sale, POS , and post sale opportunities.
- Move away from the blind discounting. In this over saturated market (mobile coupons, “mouse traps”), blind discounting is not a mobile strategy but a slippery slope
Before delving in, here are more tips from Mr. Roth:
- Define the loyalty parameters . Don’t put all budgets to everyone, focus on more targeted profitable customers . Define your ideal loyalty profile. What is your wish-list? Put that wish list together , with mobile app it is easier to do.
- Set an NPS goal ( Net Promoter Score – it’s a way to measure customer loyalty and happiness. ) instead of just saying High Customer Satisfaction . Categorize customers based on promoters, passives, detractors, etc.
- Set a goal on the % of your customers you want to acquire thru all channels, then measure all those channels. Activate and measure in % in one year or so.
- Create your LTV/CAC budget (Life Time Value of a customer vs. Customer Acquisition Cost). Think on those terms, when you loose costly, customer retention affect your bottom line. Allocate budget to your top customers or promoters. Empower them to invite people to your brand. Note that they don’t want to hear direct from us anymore, they want to hear from friends or other users.
- Also draw your loyalty program not for points but more on feedback. Surely there’s no better time to get customer’s feedback, get right there, give them few points. Get that feedback while they are on the store. And this is achievable with a mobile app.
Acquire better data, not just customers
Before committing to a loyalty program, come up with goals first, get down to the specific number, and talk about LTV (Life Time Value) of a customer. At least establish the answers to the following :
- What s the average spend per year per customer
- What is your budget to acquire new customers
- Which channels can you acquire new customers?
- How does customer satisfaction score compare to industry averages?
- What % of promoters are highly engaged with your brand?
- Are you recognizing them in return across all channels
Take action on big data
Once you acquired, do a simple segmentation. Then do a mix of triggered and mass emails , email based on behavior, spend, time, etc. Note that trigger email has 75% higher rate than a mass email. Companies can also gamify, to make it fun. In the process you will be able to identify your influential promoters , don’t forget to recognize profitable customers. Examples Mr. Roth gave referred to surprise and delight activities and in-store campaigns. Again he reminds that the secret weapons are 1) A better and actionable customer database , and 2) customer empowerment ( let them do the referring) , making a reference to Apple Inc. “Creating a community of advocates drives revenue & growth.”
Mr. Roth cited the Perx’s Approach which basically follows above methodology. He holds that brands that build better customer database tied into mobile strategies will win. Further encourages everyone to take action, mobile creates loyalty and helps to deliver touch points at the right time, right customer and right place. “Set it , get the measurements and go for it.” He ended the talk with his favorite quote “When your work speaks for itself, don’t interrupt “ by Henry Kaiser.
POWER-UP: Using LOCATION ANALYTICS to make your loyalty program effective
Mr. Jojo Ajero , Founder & CEO of XSite Solutions imparts there are 3 ways to differentiate in retailing – location, location, location. However , a good location is not a guarantee ! There are many factors that affect loyalty program.
- Creating a stronger retail brand identity still add magnetic personality and this provides differentiating dimensions which creates demand .
- Understand what are your consumers UBS (unique buying situation ) in terms of retail positioning, Convenience , Price , Variety, Experience, Benefit, Time /money , Accessibility
- Consider also the brand positioning type in terms of accessibility, culture , merchandize. To relate to this, Mr. Ajero made a comparison between Mang Inasal and Bacolod Chicken.
- Boiling down to the traditional Marketing mix model, demand is still affected by the P’s – products, process, pricing, place, people, physical env, promotion
- Note that there are 900 Psycho-geographic variables that affect a certain client, these determine the behavior if to pursue the purchase or stop the purchase. Such are Olfactory cues, Visual cues, Auditory cues, Traffic volume , Safety and security etc. There are Specific variables and environment variables .
- Demand and loyalty can also be influenced by Establishment mix (linked errands) , Competition mix (direct competition), Substitution mix (indirect competition).
With these explanations, location, location, location simply means – location of the physical store relating to proximity to customers, location of the merchandise in line with the other merchandise in the area or the establishment (mall, tyangge, row of stores, etc), or location of the product in terms of accessibility. What a way to impart the knowledge!
The 3rd Customer Loyalty Conference succeeded in providing more insights on customer loyalty and presented new or trending concepts that will definitely help marketers as they draw their own Customer Loyalty Programs. Great learnings include:
- Customer Loyalty is not all about points and discounts, it is more on touch points, magnetic touch points driven towards the personal feelings, preferences and treatments of the individual, delivered through different channels at the right time, right place and even right situations.
- Understanding its purpose, drawing its clear objectives and setting the goals on running a Customer Loyalty Programme should be cascaded to all stakeholders in the company so that procedures are streamlined and problems do not happen in the process.
- Take advantage of available channels , like mobile apps, but acquire data in the process in order to support the loyalty program. Consider the Lifetime Value of a customer.
- Customer Loyalty is not a separate entity or project of a marketing department, it is a holistic approach which involves , still, and again, creating and maintaining a strong brand, having the right location, having a streamlined procedure, creating magnetic touch points making the brand unforgettable for each customer, leveraging on technology to be able to deliver the touchpoint well.
Congratulations to the organizers of the 3rd Customer Loyalty Conference #loyaltyconexpH for a successful, insightful, loyalty-driving event! For those who missed it, you missed a lot so don’t miss the next one!
Note: The author would like to thank Ms. Janette Toral of Digital Filipino for the opportunity to be a delegate in this worthwhile event.