Does your culture eat, sleep, drink customer?

Culture shapes the norms within an organisation and drives the way things get done both behaviourally and systematically.

Many organisations forget this when trying to implement a new strategy into the business. This is particularly relevant when implementing a new loyalty strategy to drive a new loyalty programme for the business. There is no single mould for implementing a loyalty strategy and there are many factors to consider prior to developing & implementing it into your business. The phrase “culture eats strategy for breakfast” often used to describe how no matter how successful or bullet proof you think your strategy is, if it is not in line with the culture embedded in your business……then you are wasting your time. A strategy has to include culture as a core element.

We know that a loyalty strategy impacts the entire business. It should not only belong to your marketing or clients service department but it should be “owned” and adopted by the entire business from your board of directors to your frontline employees. Your aim should be to adopt a strategy that is both employee & customer centric too. Here are 3 “Cs” to consider on how to bring about a strategy to suit your company culture:

1. Communication:

Have a communication plan

• communicate change & communicate it in a timely fashion internally before externally
• communicate in stages & do so regularly
• communicate in such a manner, always taking the current culture/environment into consideration
• Provide insights/background into the strategy to all employees
• Allow for feedback

2. Collaboration:

• Once you have delivered your communication plan allow time for people to not only provide feedback but  allow for discussion groups, understand how the new strategy impacts them as individuals and as a company as a whole
• Allow your staff to spread their concern openly to get full consensus
• Provide workshops to all departments within the business enabling them to understand how their roles may change and how their role contributes to the success of the business as a whole. This is critical for landing a customer centric strategy

3. Commitment

• The customer centricity strategy needs commitment and buy-in from all parties. It will play an integral part of the company culture and daily operations. Across entire business from top management to front office
• E.g. cashier has main interaction with your customer – let her be your sales person!

• The person heading up the strategy should guide the execution of all the loyalty activities at all levels. Marketing, finance, suppliers, call centre agents to mention a few will all need to be led into the new strategy.

“People are loyal to culture, not strategies” says Joe Tye, CEO & Head Coach of Values Coach Inc. People are loyal to the culture they are accustomed to, not a strategy and this can easily cause resilience to any change within an organisation. When you fully understand your company’s culture and know how to execute any change, bearing in mind the complexities that may come along with such a change, you will be able to lead any new loyalty & customer centricity strategy and create competitive differentiation……nothing is more powerful than this.

To implement a customer centric strategy is simply a pipedream if your frontline & back office processes are not designed to be customer focused and if the culture does not eat, sleep, drink customer.

                                                                               Ros Siddle, Marketing & Loyalty Research Manager, Truth

Inoculate your most profitable customers against the inevitable seduction of a competitor!

Sounds easy doesn’t it?!  How do you start such a strategy? Do you even know who your most profitable customers are?

Typically most data led organisations understand the need to identify different segments of their customer base to drive better marketing plans.  However, there are so many organisations out there, which do not do any data led segment planning to derive stronger marketing results.  For those organisations, I hope this is a eye-opening read!

There are different types of segmentation models.  The one I am referring to today is the RFV segmentation model: simply known as the Value segmentation model – or the Recency, Frequency & Value segmentation model.  It does just that; it measures the recency of customer spend/transaction, the frequency and the value (e.g. value of financial transaction or retail basket size).  So how is this useful?

Such a model allows you to identify your most profitable customers.  It may, for example, show you that your top 4% of customers are worth 23% of your turnover. Equally, at the opposite end of the scale, you may see a huge amount of customers only yielding about 5% of revenue.  Globally, retailers seem to follow a trend of the top 3% customers, yield approximately 20% of turnover.  Amazingly, the gaming world tends to see their top 4% of customers are worth 58% of turnover….wow!!!!  You can rest assured that the gaming industry uses value segmentation in a very sophisticated manner and knows their top 4% customer behaviours, trends, likes, dislikes…intimately!

So what is this magic segmentation model used for?  Firstly, it is used for good old fashioned direct marketing.  However, surprisingly, you may not always get the results you expect.  A novice CRM marketer may feel that they must communicate offers and campaigns to their top tier customers.  However, imagine in a retailer that your top customers are in the store most frequently and most often.  They know and love your brand, so they may not be the most responsive to a seasonal trend release email campaign.  They probably have already purchased or know of your trend release dates, as they are more emotionally involved in your brand.  You are more likely to see positive results from your middle tiered customers who are slightly ambivalent about your brand.  They shop more than once but not frequently.  You have the most to gain by enticing them to your store if you offer the right offer, product and in a personalised and targeted manner.

However, you must not ignore the top and bottom tiered customers.  Remember that even your most loyal customers are spending a significant amount at competitor brands.  Not even the most entrenched customers seem to spend 100% of their wallet in one place.  You need to inoculate your most profitable customers against the inevitable seduction of your competitors!  Make sure you reward these customers appropriately and keep them engaged in your brand so they can not only continue to spend frequently and with great value, but they can become your brand ambassadors, on and off line.

So what about the bottom tiered customers in the value segmentation model?  Typically, you may not get much uplift from a direct marketing campaign, as they seem to not be interested in your brand.  Maybe a very deep discount offer would yield some results, but at what cost to margin and brand perception?  However, we need to overlay a more sophisticated approach.  These customers may be brand ‘detractors’.  You may or may not use the Net Promoter Score research tool, but basically, after 1 simple question: “Would you recommend brand X to others?” - you get a sense of how many of your customers will ‘promote’ your brand, ‘detract’ from your brand or are ‘passive’ about your brand.

Imagine if there is a strong bias of ‘detractors’ amongst your lower tiered value customers.  It may be worth creating a brand perception/win-back campaign to at least stop the negative influence of these detractors, even if you don’t expect to see an increase in sales from a campaign.  Equally if you know your promoters and where they sit within your value segmentation, you must seek to engage these customers so you can successfully achieve positive word of mouth at a lower cost, rather than a broadcast brand campaign.  Let your most loyal customers do the talking for you.

Finally, in my experience, if organisations know how to use value segmentation properly, they begin to use it as a long-term strategic tool.  You can see year on year trends across different customer tiers.  You may see a decline in your most profitable customers as a clear indication of poor sales performance on the horizon.  It is a more powerful strategic indicator than simply being used for marketing campaign customer selections.

Such customer tools are available to assist all brands to run their customer strategies.  Are you doing so?  Do you know and love your most profitable customers!?
                                                                                                        
                                                                                                         Amanda Cromhout, founder & CEO, Truth

"Listen respond, resolve…”

This was highlighted by Craig Smee, Nedbank’s Head of Social Medisa Communication at the International Customer Experience World Conference (ICEW) in Johannesburg last month.

“Nedbank’s social media strategy’s first two months comprised of only listening to what their customers (and/or fans, non-fans) had to say about them”  Craig Smee

"Provocative presentation by @tweetstruth (Amanda Cromhout) about how to use data as part of your business strategy #ICEW " tweet from The Focus Group

Businesses are forced to become "social" businesses allowing for better connectedness, interactions, collaboration between employees allowing them form a relationship with your brand beyond their day job. Mike Stopforth , CEO of Cerebra says that businesses should be more interested in trends & behavioural shifts on society that impacts your own employees remembering that they are your true advocates.

A businesses communication needs to change too. Think about your community and the way you currently communicate to them..move away from campaign thinking to community thinking by talking to your community about things they want to hear, not about what you think they want to hear about.

                                                                          Ros Siddle, Marketing & Loyalty Research Manager, Truth

The beauty and the beast of social media: Turning a bad experience into a good one in a split second

That defining moment when you have seconds to turn a situation around…...I’m talking customer experience

As a consumer, I feel somewhat obliged to make the first move to rectify a horrible customer experience which usually entails a call to the manager or a long descriptive email about every inch of my negative experience with the hope that I'll get some form of sympathy & reimbursement back.

However, I was pleasantly surprised last week with an incident I had at a yoga class hosted by the V&A Waterfront & Virgin Active (South Africa). For a few weeks the V&A Waterfront has opened its facilities to both exercise novices & enthusiasts to attend wide range of free classes. This particular class was set to take place at 6 a.m. on a chilly autumn Friday morning, only to realise upon arrival that the yoga instructor had not pitched.  There were a few of us who hung around in hope that she would pitch but no luck.

It was at this moment where we could have simply be sent home empty handed, irritated and put off committing to doing any form of exercise with either of these institutions.....But this was not the case, the Virgin Active representative immediately took down our details and promised to make it up to us in some way, apologising profusely as we left the venue. Within 1 hour, I received an email from Virgin Active, apologising again for the inconvenience caused.

“Hello Ros,
Just wanted to apologize once again for the cancelled class this morning. Please can you let me know which club you normally train at and I will send a gift pack there for you.
Hope you have a fantastic day!” Regards Kate Linder, Events Manager Virgin Active South Africa

After responding, my gift pack was ready for collection on Monday at my preferred gym.
When people are faced with a bad customer experience, naturally their expectations of you are lowered. Admittingly, my expectations were lowered but heightened immediately with this swift response and follow through from Virgin Active.

I happily tweeted my gift pack, thanking them for their great service, quickly forgetting the early Friday a.m. wake up call for a yoga class that was cancelled.

I believe that Virgin Active understands the power of word of mouth, especially when it comes to testing the success of a new initiative such as the outdoor active classes, which in their case could have turned horribly sour.

We often highlight the power of word of mouth and in this instance it is no different.

Key lessons:
* The most powerful tool you can have is the ability to spot & adapt to your customer’s attitudes to an experience they have had with your business (both positive & negative).
* No company is perfect; negative customer experiences are inevitable. You cannot pretend they won’t happen, and you cannot wait for them to happen before having a plan in place to combat them. So plan ahead for them. Align your employees to combat these situations the same way you would.
* When things turn south, you only have a few seconds to react. The quicker and more efficiently you respond the less damage there is to your brand.
* Don’t be afraid to communicate openly where you went wrong and let your customers know that you have done what you can to fix the problem.
The beauty and the beast social media comes into play here where you are able to react to a customer’s bad experience in real time to an audience who will see your solution focused strategy solving the problem.

Happy customers will happily spread the bad-turned-good experience with their social networks just like I did.


                                                                               Ros Siddle, Marketing & Loyalty Research Manager, Truth

Tesco Clubcard TV - the next level in data mining

Tesco Clubcard TV has arrived! After a successful month of beta testing to Tesco’s employees, it is now available to all 16 million Tesco Clubcard members.

Clubcard TV, powered by Blink box, is an online service streaming a variety of movies & TV shows, free to all Clubcard members. However, it is unlike any online streaming service out there. Clubcard TV will use data mined from the Tesco Clubcard loyalty programme to enable participating brands to target advertisements to individual members based on their shopping habits.

Like the current loyalty programme, data is mined to better understand the spending habits of its members to offer them relevant, tailored vouchers & coupons. In this case, relevant, tailored advertisements will be aired to members based on their shopping behaviour, demographic & location data.

The ad-funded model will air advertisements before, during and after playbacks requiring only a member’s loyalty membership number for registration.

The video –on –demand industry has grown quickly over the years with many companies such as Netflix & Lovefilm reaping the benefits of this online demand, however none have managed to offer, not only a free service with no subscription or contract required, but one that has tailored, “purposeful” advertisements that are more relevant to the end user (member) than mass advertisements.

Taking it one step further, Tesco’s Scott Deutrom, MD Clubcard TV says “Better still, we can target adverts based on what our customers bought yesterday, we can show that we are listening to our customers in ‘real’ time.”

Post campaign analytics will be made available to advertisers who would like to track their brands actual sales as a result of targeted advertisements.

Just when we thought Tesco’s innovation cap may have run dry, it has certainly proved it still has what it takes to compete and be ahead of the loyalty game. Good on you Tesco!

Ros Siddle, Marketing & Loyalty Research Manager, Truth

O2 giving us reasons to sit up and listen, watch and learn

I have never really taken any notice of the O2 brand in the UK, even though I am English. I do of course notice it when I support the English rugby side! Graham Webster, Director of Customer Experience at Telefonica Europe presented at the International Customer Experience World conference (Johannesburg, March 2013) and gave us some riveting insights to their O2 customer experience strategy.

O2 use web chat to engage with clients at a rate of 250,000 web chat calls per month. From this, they see the highest customer satisfaction from the web chat channel and the lowest cost per channel. Why are so many more organisations not using this phenomenal tool?

O2 branded the potential white elephant: the London dome in the East end. Was this done purely for sponsorship purposes? An element maybe? It gives great brand exposure. I hear my friends referring to concert X at the "O2" and a tennis spectacular at the "O2". Awesome!  But actually, it was done so that their O2 customers always get a better customer experience. Early release tickets, better offer tickets, zoned off areas, especially for the cellphone clients of O2.

Much to my horror did I realise that O2 also sponsor the Irish rugby team (it's the English thing in me!). O2 have done the most amazing customer engagement competitions for their Irish rugby fans. Fans were able to pre-record their pre match rah-rah speech to the players, ad it was played on the stadium screens on match day.  Fans were able to submit their name to be incorporated into players numbers on the back of their shirts, and find these online – I.e. Which player is carrying my name? Such incredible customer engagement strategies to build longer term client retention.

So what? The bottom line is that O2 enjoyed a 28% reduction in client churn which was directly attributable to the combination of these client engagement/sponsorship activities. Simply a remarkable measurable by which clients engaged in either web chat, O2 dome experiences, rugby competitions, etc.

Having said all of this, Graham did refer to the fact that none of this makes any sense at all if the network falls over or there are basic service offering mishaps. As we have mentioned before, client engagement strategies, marketing and loyalty initiatives must not be 'lipstick on a pig'!

O2, we salute you. Any company would enjoy a 28% reduction in churn. Thank you for sharing your insights.

                                                       Amanda Cromhout, Founder & CEO, Truth

Your loyalty member: CRM strategist or promiscuous consumer?

Do we, as marketers, business owners, loyalty experts, forget to view our customers of our loyalty programmes just as they are…customers? 

Definition of a customer: “A party that receives or consumes products (goods or services) and has the ability to choose between different products and suppliers”*

Looking at the first part of this definition, “A party that receives or consumes products (goods or services)", you are reminded about how little you understand about your customer other than that they chose you to “receive or consume products” from.  Only after a thorough data analysis do you begin to define this type of customer a lot better (shopping habits, frequency, basket size, preferences etc.). However, without delving into too much detail about data and how to use it (read the Iceberg effect), I’d like to touch on one of the fundamental reasons why we find your customers are not redeeming the full benefits of your programme and in turn, losing interest in your programme.

Being in the loyalty industry, I am the owner of over 35 loyalty cards. I know this collection is more than what the average person would possess but the rate at which loyalty is growing in South Africa, the man on the street will soon start (or has started) to compete with my collection.

I also know I redeem way more than my peers by studying, interacting & fully “exploiting” the full benefits of these programmes as part of my day to day job. There may only be a very small percentage of us like minded loyalty folk out there…but what about our customers that do not have the same level of interest, time or patience to investigate how to reap the full benefits of a programme? How do you get them to find your programme worth while?

As mentioned above, the loyalty industry in South Africa is quickly catching up with the global loyalty landscape and with so many companies entering the loyalty playing field it is critical for one to realise this fact about your members and help them get the best out of your programme so that you become their first choice when it comes to choosing which card, of many, to use. Your customers, as defined above, have the “ability to choose between different products and suppliers” so give them reason to choose you, first.

·         Keep your loyalty programme simple, understandable and easy to use.

·         There is a serious lack of consistent communication about HOW to earn redeem.  All we seem to be communicated about is WHAT you can earn. Encourage ways for them to earn & redeem rewards faster.

·         Have a communication strategy that consistently informs your members on how to earn the broader benefits of your programme and this communication must be delivered in such a manner that is easily understood by your customers.

·         Make rewards obtainable – do not make your member feel that the rewards are out of reach.

·         This is just a smattering of considerations….there are so many more in a comprehensive list. 

It is time to stop assuming they (your customers) are members around your boardroom table but are normal people who promiscuously choose difference brands at different times. 

Ros Siddle, Marketing & Loyalty Research Manager, Truth

*definition of customer, source: www.businessdictionary.com