Shade Pulled over Many Virtual Storefronts

Imagine owning a store in which you diligently opened for business daily but opted to leave the lights turned off and the door covered. Safe to say, such practices would lead to certain failure and defeat the purpose of being in business. Unfortunately, this analogy is reality for the online presence of many small- and medium-sized businesses (SMBs). A recent audit by digital marketing firm vSplash of nearly 4 million SMB websites found that a startling percentage of them were not fully prepared to conduct business online.

Some of the most surprising findings in the vSplash study include:

  • 26% of SMB websites cannot be found on a Google search because their Google page rank is zero (or has no rank)
  • 49% have no contact phone number on their homepage
  • 94% have no contact email address and are not mobile optimized
  • 95% do not have an e-commerce shopping cart

To say the least, these findings represent significant opportunities for digital marketing service providers to help SMBs strengthen their online presence. The lack of an apparent digital strategy and the absence of essential online marketing elements like contact channels and e-commerce capabilities are surprising, but we should not chastise SMBs. Many SMBs are good at the product or service that they provide but lack marketing expertise or resources of their larger corporate counterparts. It is not that they do not care; they do not know how.

Results of the vSplash study also serve as a call to my chosen profession, marketing education. The low frequencies of use for basic digital marketing tactics can be traced to SMB managers lacking knowledge. For some, the issue is that the rapidly changing world of digital marketing makes it difficult for them to keep up with the latest best practices (although the statistics cited above relate to basics that are hardly cutting edge). For other managers, they were failed by business schools that have been slow to adapt to the rapid rate of change in marketing. I see more job descriptions seeking new graduates with search engine optimization and blogging skills; it is further evidence to me that B-schools must be nimble with curriculum in response to the pace of change in digital marketing to better serve employers and students.

"C" is for Consistency in Customer Experience

More than a few eyebrows were raised when a recent study by ForeSee revealed that consumers believe Apple is losing its polish when it comes to a great customer experience. In an annual survey of customer satisfaction with online retailers, Amazon maintained its hold on the number one spot among the top 100 e-retailers with a score of 88. Apple’s score dropped from 84 to 80, changing the website’s ranking from top 5 status in 2011 to top 15. In general, pure online retailers fared better than their brick-and-mortar counterparts. Two examples include Barnes and Noble losing two points to 79 and JC Penney falling five points to 78.

It is suggested that one reason why e-retailers may fare better than their multichannel competitors is they have honed a more consistent online customer experience. Companies like Amazon, LL Bean, and QVC serve their customers through direct channels. The customer experience is well scripted and because it is driven by technology, there is little variation in the interaction we have with online sellers. In contrast, brick-and-mortar stores are challenged during the holiday season to balance larger inventories, increased store traffic, and temporary employees in addition to striving to deliver a great customer experience. Moreover, it is challenging to create consistency in the customer experience to the point that shopping in-store and on the store’s website have a similar feel.

E-commerce offers the “wow” factor to buyers. E-tailers like Amazon have tremendous merchandise assortments. Also, the convenience of shopping on your computer, tablet, or smartphone makes fighting crowds in stores less appealing. Free and expedited shipping is another way online sellers add value to the shopping experience. These factors combined give e-tailers a significant advantage over brick-and-mortar stores. And, the factors listed here can be offered consistently. Whenever a person logs on to an e-commerce site these factors will be present. In contrast, brick-and-mortar stores may be short-staffed, too busy to deliver the best possible merchandise presentation, or run out of merchandise in individual stores. But, regardless of the channel used to sell products, striving for consistency in the customer experience must be a priority. Add value by “wowing” customers in 2013.

ForeSee Holiday Customer Satisfaction Study: Amazon Sets Standard; JC Penney, Apple, Dell Drop

Why Loyalty is Not Enough

Have you ever realized that the way you are looking at something has been wrong all along? Your view changes in an instant, and you wonder why you did not see the flaws in your thinking long before now? It definitely happens to me; in fact it most recently occurred a couple of days ago when reading an article about customer loyalty. Larry Freed, president and CEO of marketing analytics firm ForeSee, took the stance in his headline that “all loyalty is not created equally.” He got my attention, but was this another hyped-up headline with little substance to follow? No, it was mindset changing for me.

Mr.Freed contends customer loyalty is not a single-dimension construct. Two types of loyalty are behavioral loyalty and emotional loyalty. Behavioral loyalty seems to be the aspiration that most marketers have for their customer relationships. After we acquire customers, the aim is to develop repeat purchase behavior. They buy our brand and not competitive offerings. Loyalty can be encouraged by rewards programs, incentives, and price breaks. If we achieve repeat buying behavior from enough customers we win, right? Unfortunately, Mr. Freed says “no.”

A significant limitation of building behavioral loyalty is that the willingness to buy over and over may have less to do with the brand and more to do with the system that promotes loyalty. An episode of Seinfeld makes light of the limitations of behavioral loyalty. Elaine is on a quest to get a loyalty card punched 24 times at a sandwich shop so she can be a “submarine captain” good for a free sandwich and a captain’s hat. She did not have loyalty to the shop (she said she had eaten “23 bad subs”) but she really wanted the rewards. Of course Elaine is a fictional character, but does her behavior mirror that of some customers who are hooked on the system, not the brand or customer experience?

What is the alternative, you might be asking. According to Larry Freed it is building emotional loyalty. Unlike behavioral loyalty that can be bought using incentives, emotional loyalty is a true feeling of connection with a brand resulting from satisfaction with the brand experience. It is true loyalty in that such a bond with your brand not only results in repeat purchases, but it leads to other behaviors like advocating for your brand via word-of-mouth and willingness to pay price premiums. To get to this point, Freed encourages a focus on customer satisfaction as the catalyst for building emotional loyalty. Simply put, what do customers want from their experience with your product or service?

Loyalty is the holy grail of marketing, but understand the difference between loyalty to your marketing system and loyalty to your brand. Reaching the pinnacle can be achieved by starting at the foundation, returning to basics having a better understanding of what customers want from you.

Customer Experience is the New Black

Marketers sling the words “engagement” and “experience” like politicians trade barbs about their opponents – often and sometimes recklessly. They are ideas talked about a lot but tend to fall short in being realized. So, when good customer experience is recognized it can be like a breath of fresh air (instead of hot air). The Chief Customer Officer Council has named its Chief Customer Officer of the Year for 2013, an award that acknowledges a leader whose organization demonstrates a commitment to building customer relationships, cultivating profitable customer behaviors, and creates a customer-centric culture.

The recipient is Pete Winemiller, Senior Vice President of Guest Relations, for the Oklahoma City Thunder NBA franchise. The team has a reputation for offering one of the most exciting game atmospheres in the NBA and was number one in ESPN the Magazine Ultimate Fan Rankings this year. The fact that Winemiller and the OKC Thunder received the award is not surprising when you consider the mindset of the organization:

  • The Thunder aspires to be “the most fan-centric organization in professional sports”
  • The dedication of all employees, particularly front-line service personnel, is cited as a key to success
  • The experience created is seen as a way to reinforce the organization’s core values to customers

Curtis Bingham, CCO Council executive director, says that the customer is the most important ingredient for business success, not product, service, or technology. Bingham refers to customer experience as “the new black,” a popular mindset that must become ingrained in an organization’s values in order for it to reach its potential as a source of competitive advantage.  Bingham adds that products and services are increasingly becoming commodities, making customer experience the most powerful differentiator available to a marketer.

Customer experience may be the new black, but it should not be viewed merely as a fad or trend. When a business desires to have ongoing relationships with customers, a focus on experiences that convey the firm’s values as well as delivers value will be appreciated by customers and stand out in an environment in which many companies talk a good game about experiences but often do not deliver.

Direct Marketing News – “Aligning Customer Experience and Marketing at NBA’s Oklahoma City Thunder”

Price for the Tie, Experience for the Win

Optimism abounds for the upcoming holiday shopping season as retailing industry analysts predict sales gains in the neighborhood of 4 percent. Christmas sales are key to a successful year for retailers, so they are preparing to be very competitive this year. One area in which many retailers are focusing is pricing, specifically being price competitive with online sellers like Amazon. Brick-and-mortar retailers are fully aware of savvy shoppers roaming their stores armed with mobile apps that enable foster price comparisons with a quick swipe of a bar code as well as the ability to search the Internet for information and reviews. Fearful that shoppers will walk out of their stores to buy online, many retailers are touting their willingness to match price.

Meeting competitors’ prices is hardly a new practice in retailing. During my four years spent in retail management in the late 1980s, competitive shopping trips were a regular item on my to-do list. Technology has made price shopping easier for retailers and of course, customers. While a retailer does not want to lose a customer just because a competitor down the road (or online) is selling the same product for $5 less, a sole focus on price as a competitive tool is not productive long-term.

Matching competitors’ prices should be used as a move to negate any advantage competitors might realize from charging less. Communicating a price matching policy is wise, particularly for a retailer like Target that is proactively promoting price matching to inform potential customers that lower prices found elsewhere, including online, can be matched by Target. However, a long-term view should be taken with regards to what will keep a customer coming back to a store.

As a consumer, I am grateful when a store is willing to meet a lower price offered by a competitor. I will gladly take them up on their offer. But, meeting competitors’ prices does not inspire me to visit a store again in the future. The total experience of doing business with a retailer is much more influential – merchandise presentation, customer service, and feeling like my business is valued matter to me. Meeting price is a cost of doing business, not a customer relationship strategy.

Retailers should adopt a price matching policy but realize that it only gets them a tie with competitors. If parity is the goal, then playing for a tie is acceptable. But, if you are playing for the win the total customer experience still cannot be beaten.

Marketing Daily – “It’s Beginning to Look Like an Appy Holiday”

Quality is Taco Bell’s Newest Ingredient

Product quality is a key ingredient for marketing success. When customers judge you as having high quality products or services they are more likely to buy, pay more than comparable offerings, and tell others about their experiences with your brand. The benefits of being positioned high quality are clear; how to successfully arrive at that place is more elusive.

Brands that aspire to ratchet up their quality associations should look to Yum! Brands’ Taco Bell for inspiration. Taco Bell has competed effectively in the quick-service restaurant category by being positioned as a low-priced brand. The tradeoff for being perceived as low priced is that quality perceptions are lower. After all, is it realistic that we can get high quality and pay low prices?

Fortunately, brand associations are not permanent; they can be reshaped and image redefined. Taco Bell has used a new product line to shift quality perceptions. Its Cantina Bell menu, created by celebrity chef Lorena Garcia, touts premium ingredients and creative recipes that make for high quality products. The positioning for the Cantina Bell menu is a distinctively upscale move for Taco Bell.

Although the new product line launch occurred less than three months ago, the impact Cantina Bell has had on Taco Bell’s brand image is significant. The YouGov BrandIndex, which measures consumer quality perceptions daily and tracks over time, reveals that Taco Bell’s efforts to enhance menu quality has paid off in more positive quality perceptions. Noteworthy gains made by Taco Bell since launching Cantina Bell menu include:

  • Positive movement in brand quality score from 14.4 to a high of 25.9 in late September
  • Closed a six-point gap with industry average; Taco Bell’s score now at or slightly above industry score

Quality scores are influenced by two factors, observed an executive with YouGov:

  1. Communication – Advertising influenced perceptions
  2. In-store Experience – Confirms perceptions when quality expectations are met

These two factors remind me of one of my favorite sayings about products and marketing: “You can put lipstick on a pig, but it is still a pig.” The lipstick is the brand communications, messaging used to shift brand perceptions. Message content has to be real (i.e., quality must actually be improved) and relevant (claims made matter to customers).

Taco Bell has discovered a powerful ingredient that has the potential to attract customers and reposition its brand as a quality offering in its industry. Your brand’s quality is not a permanent condition. If you want to improve it, consider adding ingredients needed to enhance the quality recipe.

Nation’s Restaurant News: “Research: Cantina Bell Boosts Taco Bell’s Image among Consumers”

Showrooming: Be Resourceful, not Resistant

E-commerce has represented a threat to brick-and-mortar retailers ever since online sellers began hanging out their virtual shingles in the late 1990s. However, the threat has intensified thanks in large part to smartphone capabilities. Shoppers scan bar codes to do comparison shopping, look up user reviews, and visit retailers’ web sites to gather information. Any of the above actions can come between a potential buyer and a making a sale. But, according to research sponsored by mobile marketing company Vibes, retailers should adopt a different outlook than the fear created by “showrooming” customers going online to make purchases.

Findings of a survey of 1,000 phone users point to mobile marketing being a valuable information resource for shoppers as they make in-store purchases. Highlights from the survey include:

  • 84% said they used their phones to do research while shopping in a store
  • 48% of those who had used their phones to do research in-store said they felt better about their purchase
  • 6% abandoned a potential purchase in-store and bought from a competitor, even though 33% of those who had done research with a mobile device visited a store competitor’s website

 The main takeaway from the study is that consumers use mobile devices as a resource to aid in making buying decisions. It is not necessarily a competition to see which seller has the lowest price as much as it is which one delivers the best buying experience. Thus, retailers should embrace the mobile consumption habits of their customers, not loathe them.

The key is to meet customers’ desires for information by creating relevant mobile resources. QR codes, mobile-device-friendly websites, and custom applications are three mobile experiences that can be developed. “Relevant” is the key word – how many times have you scanned a QR code that takes you nowhere in particular, maybe the brand’s website home page? In other words, there is often no strategy behind the technology.

Shoppers want information. Retailers that act more like a friend and become a dependable resource for information via mobile marketing stand to benefit, both online and in their stores. Commit to being resourceful, not resistant, for customers showrooming in your stores.

Data and Targeting Insider – “Showrooming is More about Confidence than Comparison”

What’s Behind the Glass?

There are some things that captivate the attention and curiosity of almost everyone. For example, I was running recently when I saw stopped at the intersection in front of me a car with a clown in the passenger seat. I could feel a smile cross my face as I ran by, and I thought to myself “how can a clown not make you smile?” (OK – I know some people freak out at the sight of clowns, but that is a post for an expert in another field to tackle).

Another example of how people are captivated is what I observe when visiting a Krispy Kreme location. People of all ages are spellbound by the “show” going on behind the glass. The production process is in full view as we witness dough transformed into delicious glazed goodness. What makes the cooking process so interesting? Perhaps it is that it reveals how a product that is enjoyed by so many people takes its final form. For other people, the curiosity of how stuff works is fulfilled by getting a glimpse into how the product is made. In either case, Krispy Kreme engages customers by inviting them to have an up-close experience with the brand.

You may not market a product as tasty as Krispy Kreme doughnuts, but that does not mean that you do not have an interesting story taking place “behind the glass” in your business. Is there unique craftsmanship or manufacturing processes used to build your product? Are there interesting stories related to the products made or the people who make them? Offering a peek at the inner workings of your organization can make your brand more personable, potentially strengthening customers’ connections with your brand.

Do not discount the potential interest that exists for people to look behind the glass to see you in new ways. Whether it is factory tours, customer site visits, or a video series posted on YouTube, draw people closer to your brand by giving behind-the-scenes access when appropriate. While you do not want to give away proprietary information, invite those people who care most about your brand to share in your world.

Turn Customers into Participants

 

Baseball legend Jackie Robinson was quoted as saying “life is not a spectator sport.” His sentiment has a great deal of validity. We can choose to be passive observers, but there is much that we must do (work), can do (entertainment), and ought to do (well being). Thus, being a spectator is not a viable option. The “ought to do” aspect of our lives has implications for healthcare marketing. A study done by Accenture reveals that when it comes to managing our health, Americans want to come out of the grandstand and get in the game.
Findings from the Accenture study show a desire for being engaged in communication with healthcare providers:
  • 90% want to use digital media to manage their personal healthcare
  • 88% want to receive reminders via email when it is time for preventative or follow-up care
  • 83% want to access personal medical information
  • 76% want to communicate with their doctor via email
  • 72% want to book, change or cancel appointments
  • 72% want to request prescription refills
Digital channels are significant for enabling patients to be participants in their health care. Survey respondents placed particular emphasis on email as a communications channel, but information access and communication options via mobile devices is important, too. The one statistic that cannot be overlooked in all of the interest in digital management of healthcare: 85% said they still want to be able to communicate with their doctor in person.
For healthcare marketers, findings from the Accenture study send a clear message: Figure out how to turn patients into participants. Many healthcare marketers may have some of these digital media in place already, but the survey also found that about one-third of patients were unaware that they could manage aspects of their healthcare using digital channels. Communicating options for self-service and encouraging patients to be engaged on an ongoing basis are two rather obvious solutions. Firms in other industries can reflect on findings of this survey, too. How can customers get involved as participants in managing their relationship with your company? Is interacting with your company easy to do, or are barriers in place (intentional or unintentional) that send a message of “don’t bother us.”
Life is not a spectator sport, nor is the customer experience with your brand. Get your customers into the game to deepen their relationships with your business.

Dialing Up a Better In-Store Experience

The retailing industry is going through a period of significant change in terms of how customers interact with retailers. The days of the in-store experience being the dominant customer touchpoint are over. The advent of the World Wide Web gave shoppers a virtual shopping option. Despite predictions to the contrary, brick-and-mortar stores have not disappeared due to the emergence of e-commerce. Now, the evolution of mobile communication leads many retailers to again predict a revolution in shopper behavior.

According to a recent study by Motorola Solutions, 74% of retailers surveyed believe creating a more engaging in-store experience will be critical to business success over the next five years. Technology-assisted interactions are expected to play a significant role in shoppers’ behavior. Among key findings pointing to a more significant role for technology in retailing:

  • 56% of all transactions will occur via mobile point of sale, self-service checkout, or a shopper’s mobile device
  • 42% of sales will come from online, mobile, and social commerce sites

Exciting news – shoppers are embracing technology to make purchases… or is it exciting news? These trends should serve as a wake-up call for retailers that have resisted enhancing their interactive experiences for shoppers. It is understandable why retailers might be reluctant to quickly react to the forecasts – we have heard similar proclamations before. The Web did not make traditional stores obsolete, and while smartphone capabilities have definitely changed how we shop, brick-and-mortar stores are not going away anytime soon.

Regardless of whether the forecast for mobile commerce over the next five years comes to fruition, the survey’s findings should serve as a call for retailers to step up their m-commerce game. It is evident that retailers know the stakes are higher to meet shoppers where they are and deliver value by providing information, coupon offers, and transaction convenience. The key for retailers will be make understanding the customer shopping experience a priority – not what they think shoppers will want but committing resources to learn and understand what customers expect from retailers.

Marketing Charts – “3 in 4 Retailers See Improved In-Store Experience as Critical”