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Thursday, June 13, 2013
Does Your Loyalty Program Generate Incremental Income? Are you Sure?
Do you have a customer loyalty points
program? Does it work? A just heard about an automotive tune-up and oil change franchisee
that reports loyalty program members spending an average of $106.11 per transaction versus only $68.29 for nonmembers. In
addition to spending more money, members of the loyalty program are also visiting more often, an average of 1.4 visits per
year versus 1.1 avg. visits for nonmembers (that's 27% more visits from program members).
That all sounds great, but here’s the unanswered question. Did the loyalty program
really cause members to buy more and visit more frequently, or are customers who visit more frequently and spend more simply
the ones that are more likely to take the time to sign-up for the program? If it’s the former, then the program is generating additional income. But if it’s
the latter, then all the franchisee has done is spent marketing dollars and resources to run the program, and given away services
as awards. When the costs are taken into account they may even have lost money.Assuming cause and effect can be an expensive way to run a business. Yet most
loyalty programs never establish a process to objectively measure the real program costs or the true volume of incremental
sales that are generated.
9:57 am edt
Thursday, May 23, 2013
Would You Sue A Loyal Customer?
We continue to see examples of
corporations fighting the social media driven tide of change. We witness lawsuits filed against Yelp in
an effort to remove a bad review. We hear about company reps inserting themselves in blog discussions only
to end up in wars of words that they can’t possibly win. And now another brand, this time it’s
Nutella (part of Ferrero SpA), taking legal action to silence a loyal customer.
Yes, lawyers for Ferreo have requested a
cease and desist action against one Sara Rosso who is so fond of their product that she not only blogs about it, but has actually
had the nerve to establish an annual celebration which she calls World Nutella Day. She created
the event in 2007 and has celebrated it each year on February 5th with some 40,000 Facebook fans and 7,000 Twitter
followers.
When
will brand management catch on? When will they realize that a communications revolution has taken place
and that customers now own the brand images? Anyone with a cell phone can shoot a video, anyone can write
a blog or post a review, and anyone can write (or not write) about a brand however they please on Facebook or Twitter.
Communication channels are open to the masses and it no longer takes an advertising agency or a production company
to shoot a commercial or produce a print ad. Rather than fighting the inevitable it’s time for marketers
to accept and embrace this change. It’s time to: 1) build strategies that help assure that customers have a positive
experience, 2) strengthen relationships with their brands, and 3) help the customers to be more knowledgeable about the brands
and to have more quality content to share, online and offline, with their friends, neighbors, and co-workers.
11:30 am edt
Wednesday, April 24, 2013
Even the NFL needs "customer" relationships
The NFL (National Football League in the USA) is a hugely
successful, tremendously profitable business. Right? Well yes, as long as the fans keep
paying for tickets, personal-seat licenses, parking, expensive beer, team merchandise, etc. And as long
as they keep filling every seat so it looks good on television and continues to assure those mega deals for the league.
At
the heart of all that financial success are the season ticket holders. In many cities there’s a years-long
wait for the opportunity to buy. In some markets season-tickets are handed down from generation to generation.
As the result of such success, some management groups have taken those producing that stream of revenue for granted
-- Communications from the team in some cases consisting solely of the annual invoice and a schedule.
Recently however, some teams (especially those with less success on the field in recent years), have begun
to recognize the concept of the Total Customer Experience and the need to produce more VALUE for the customer.
They’ve been forced to start thinking of season-ticket holders as critically important paying “customers”
with whom they need to build relationships. Some examples:
The St. Louis Rams just holding a party today. Season-ticket
holders will have the chance to meet the coach and general manager. And shockingly the event is offered
to them free of charge. The
Indianapolis Colts went one step further last year with a luncheon for season-ticket holders at which they met both
coaches and players. The Atlanta Falcons gave their season-ticket holders the chance to privately
quiz both the coach and the owner. The Jacksonville Jaguars teamed with local restaurants
and retailers to offer season-ticket-holders packs of discounts they claim were worth up to $3,000 in savings (We think Jacksonville
might be off on the wrong track there – but that’s a story for another day. At least
they did try something.)
The big news of course is that NFL teams are beginning to recognize those who fund them and that customer
retention and customer relationships are critical.
1:54 pm edt
Monday, April 1, 2013
Should You Spend More on Search or Social?
There seems to be an ongoing debate regarding the relative
importance of search vs. social media.
On one side there’s Nathan Safran
and his recent article, “Can We Please Stop Hyping Social As The Marketing
Messiah?,” in which he reports that “during the 2012 holiday season
34% of retail website visits came from search. 40% were direct. (A mere) 2% were from social”. Safran
further reports “15% of respondents always or often turning to social for shopping or product research, while 97% say
they always or often turn to search”.
Opposing
Safran are numerous proponents claiming that it simply fear of the unknown and dependence upon “ineffective” programs
of the past that are preventing some marketers from taking advantage of social media and the word of mouth and two way conversations
it drives.
We would like to offer a third position.
While neither side seems to admit to it, we see obvious differences between corporate social media and individual social
media. While certainly corporations can produce temporary spikes in awareness and millions of likes or
views with a contest that offers great prizes, coupons and product discounts, or a great video that may not be the greatest
impact that social can offer. We instead believe that it is the social media content that is produced by
those tens of millions of individuals, and the mentions of their favorite movies, restaurants, doctors, baby strollers, etc.
that leads their personal friends, neighbors, relatives, and co-worker connections to be aware of and consider those brands
– which is what leads to all those searches and direct online visits that Safran references.
We
believe that individuals have taken control of social media and that the most cost-efficient way to achieve growth is by working
with them. And for a number of categories we know how to do it.
10:26 am edt
Thursday, February 28, 2013
In Consideration of Content Marketing
I just read an article titled: “What comes
after content marketing?”
It sounded like a familiar story I have seen too many times before
(e.g. “Customer Satisfaction, now what?, Where do we go after customer relationship management? etc.) We’ve barely
all learned the term, and someone has already decided that we have wrung all the benefits possible out of content marketing,
and that it’s time to move on. Just as with satisfaction and CRM, my only thought – you’ve
got to be kidding me! According to the Content Marketing Institute, “Content
marketing is a marketing technique of creating and distributing relevant and valuable content to attract, acquire, and engage
a clearly defined and understood target audience – with the objective of driving profitable customer action”.
A failure to fill-in the blanks in that definition might be what’s causing some marketers to believe that content
marketing has so little to offer them that it’s time to move on.
The issues in that definition that
we all need to address are: 1) Who is that target audience we are trying to deliver the content to? 2)
How can we efficiently and most effectively deliver the content to that audience? 3) What kind of action
can we reasonably expect to drive?
We
believe that the most effective uses of content marketing is to deliver shareable, bite-sized pieces that educate, build emotional
ties, and entertain existing customers, turning them into advocates, who build image, awareness and purchase consideration
for the brand with friends, relatives, neighbors, co-workers, and even strangers (online). If you accept
that strategy then we’ve got a long way to go before any of us have achieved the full advantages of content marketing.
10:31 pm est
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