Customer Experience Research

There are many incentive programs offered to customers by retailers, brands and businesses. Incentive meaning that they try to give customers motivation to spend money. That’s fine. But I wonder some time how many of these programs really provide an incentive that works for the company. I’ve seen research that speaks to the pros and cons, the benefits and drawbacks, the best practices and the pit falls. My conclusion is that companies do a good job of rewarding purchases that would have happened anyway. I’m not so sure companies create the surprise and delight that is spoken about in front of strategic white boards with an abundance of hand waving and passion. How much of it is translating down to the tactics that reaches the customer to make them surprised and delighted?

We all have the luxury of spending time as the customer at some point during our day. When I am that customer, I don’t find a lot that makes me surprise or delighted. Do you? Granted, perhaps I look at this from a jaded point of view because in my job I try to advise companies on how to do a better job exciting their customer. Let’s use a personal example to illustrate. I was at a local restaurant recently when I asked a female customer what provided an incentive for her to frequent the restaurant and it was interesting what she told me. A little background on this customer first. This woman is middle aged, with kids, who likes to shop, but can’t shop with the freedom of yesteryear, prior to the economic crunch – sounds pretty average, right?  Well her answer to her top of mind surprise and delight was a recent restaurant visit when the bartender, at the conclusion of the meal, prior to giving the bill, gave her and her husband a complimentary small glass of after dinner wine. He said that that the restaurant did not recognize them and wanted to welcome them and invite them to return.

Now you can read into this as you want, yet here is a one-off independent restaurant giving away a drink, which is easy but very effective. You may also say this does not scale, it could have been a one-time happening and what about X, Y, Z set of issues. Let’s put the compliance department aside for one moment. Any retailer worth their salt should be able to create a marketing program that can surprise and delight customers, especially their best customers. I should note that the restaurant customer went on to say that she is a member of many retailer’s point programs and she finds no difference between them; they all offer points for prizes that are out of reach, out of touch and uninteresting. Generic programs from blending brands. Great!

Pleasantly surprising someone is often not easy, yet it is worth the effort and shows you care. This generates a delightful experience that in turn creates engagement, strong relations and incremental lifetime customer value. If you don’t believe me, go and see our restaurant customer and her husband. I know there is very good chance you’ll find them back at the restaurant where our story began.

The “customer” is often spoken about by marketers in the same manner as politicians say “the American People.” It sounds like a group of people who now share similar characteristics because they happen to be buying from a company, just the same way a politician thinks that everyone in the electorate is buying from the same party platform. They say it because it makes them sound like they intimately understand whom they are speaking about,, yet they could not be further from the mark.

The customer and the customer experience are critcial to business success. When they interact with a brand, or a product the overall experience from research through purchase is the most important part of your company's value. The actual value of a business is made up of the sum total of their customers. The “customer” is not a faceless group. If this is true, and I believe emphatically that it is, then why do we know so little about this valuable asset? And why are we so frequently not concerned about the customer’s experience when they engage with our business?

I tell prospective and current clients that this concept of the “customer” is both a holistic and an individual entity. For example, when a fashion retailer tallies up the first week of spring collections, it’s easy to analyze who came to the store, what they wanted and how they percieved the same thing: New clothes. The larger the group of customers that can be analyized, the better. Put another way, the more people shopping for those clothes, the more complete the customer data picture can look. Perhaps the “customer” can be compared to a school of fish that all swim the same direction and periodically they will all zig or zag simultaneously and then set off together on a new course.

Yet, within that school we have the individuals. I am different from others and from a different school of thought. I am different from others my same age and same sex. I am different from my neighbor. I am even different from my spouse and my kids. For a business to make me happy, engaged and likely to shop again, they will be well off providing me a relevant and consistent customer experience. They have the data; why don’t they use it? If they understand what I like, when I like it, how I like it and what price or offer type is needed to get me off the couch, then they’ve got me, hook, line and sinker.

Customer data can be fed by the aggregate of customers and then it enables a company to serve individuals. It is not guesswork anymore.

Here at Customer Portfolios we’re feeling a little more than vindicated about our bullish view on e-commerce lately. Today comScore issued a report that shows 4 out of 5 US internet users visited a retail site during the month of November. For some categories such as consumer electronics, that’s a 33 percent jump over 2008. Overall holiday business was up four percent online, which is a good number considering the economy. According to a report in The New York Times on January 7, The industry collectively turned in a 2.9 percent year-over-year sales increase at stores open at least a year, according to Thomson Reuters. Some 75 percent of retailers beat analysts’ estimates — the most companies to do so since March 2007. Several retailers — including Macy’s, Nordstrom, Aéropostale, TJX Companies, Ross Stores, American Eagle Outfitters and Limited — expressed their growing confidence by raising their earnings estimates.

 
Here’s why we feel vindicated. This number, and some other success stories show, that it is customer engagement that will attract and keep customers. If a consumer visits a retail website, it’s because they are researching products, reacting to a brand or simply engaging with the retail brand experience. In our experience, consumers do not go to a website to earn points on a retail entitlement program. And it is not in the retailers best financial interest to push a loyalty program online when that program may or may not generate incremental business. Retailing is about excitement over entitlement. Look at Amazon (of course), which did not log its best holiday season because of a loyalty program, but because they did a great job using a new product (Kindle) to drive traffic and generate excitement.

The companies that do well in e-commerce understand that the future state of customer loyalty, behavior-based customer loyalty is based not on predictable behavior from the customer and the company, but on breaking the predictable patterns from the customer and appreciating those most valuable customers with exciting experiences, goods, and or services. Customers should not do the math or even understand the math around customer loyalty programs, they should be excited by them.


The ability to execute exciting loyalty programs depends on a customer command center, which must go beyond feeding simple revenue transactions. It needs to define and measure the more subtle ways in which customers share information and how often they touch a brand across all channels. Customers may sleep but customer information never rests. That’s where the goals of the company need to meet and use the wealth of information.

Here at CP we call this constant customer information “Lights-Out” marketing.  It can automatically execute programs that are relevant to the customer and more importantly relevant to encouraging and rewarding behavior that syncs with the companies marketing and sales priorities at that moment. Lights-Out programs will be executed if there is just one customer that meets those criteria or a million. The programs will be targeted even as the customer grows and their behavior modifies or the loyalty behavior changes. The integrated command center is a closed-loop marketing architecture that automates triggered programs and optimizes the relevance, frequency, and timing of marketing communications.  As stated earlier, customer information is easy and common. Using it to encourage profitable behavior is an art and a science.