Data Transparency Delivers Long Term Benefits

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I was interviewed by DMNews for a piece on the challenges of delivering personalization to consumers who are skeptical about sharing their data.  It’s a good piece that underscores the importance of telling consumers the truth about what you intend to do with their data and the benefits they will receive.

 

How aligned are your values with your customers?

As part of our research for Marketing to the Entitled Consumer, we surveyed 7,000 consumers in six countries. From the survey data, we define four segments of consumer – three of which are entitled in some form – and define those that show both dimensions of entitlement as “Fully Entitled”. Of these Fully Entitled consumers, 34% told us that they “only shop from places that support the same causes that I do,” and we write in the book that one way to demonstrate reciprocal value with consumers is to align your company with your consumers’ values.

But, what happens when you change direction? I just came across a Washington Post article that highlights how customers of Bonobos, Moosejaw, and ModCloth stopped shopping from these retailers after they were acquired by Walmart. As one former Bonobos devotee comments in the article: “I don’t begrudge a company for selling itself, but there’s something particularly egregious about the Walmart deal. I don’t like the way they treat their employees or how they’ve put smaller retailers out of business. It’s not a company I want to support.” In other words, their values no longer align with mine.

Time will tell whether this is a smart move by Walmart to broaden its customer base by appealing to non-traditional Walmart buyers. But, I don’t think it will be enough ultimately to simply own those businesses and expect the customers to stay. Walmart will need to change some of its corporate values to retain them.

It’s too easy in this day and age for consumers to understand corporate structures, track corporate behavior, and assess whether their values align. And, consumers are more willing than ever to vote with their wallets. If you don’t know what your customers care about, it’s time to start finding out! You don’t have to slavishly succumb to every demand, but you shouldn’t be surprised when customers notice and act accordingly.

Best Buy thrives by delivering value to customers

Best Buy should be dead

Bloomberg Businessweek; July 19, 2018

In Marketing to the Entitled Consumer, we demonstrate how a focus on reciprocal value forges strong customer relationships. We show how companies can gain a sustainable edge by finding new ways to deliver value to consumers. And, we argue that once you have created value for customers, you must build on that value, creating a consistent reputation for giving customers what they feel entitled to—or what they will feel entitled to once they get used to it.

During my Forrester Research days, I always enjoyed speaking to the CRM team at Best Buy and often quoted one of their communications mantras: “give, don’t take.” What they meant was that they tried to find ways to provide value to customers in their communications, and not to focus on extracting value from them. In the years since, like many other retailers, Best Buy struggled. In fact, it almost collapsed during the great recession, losing $1.7 billion in one quarter in early 2012.

Yet, with a new CEO and a significant focus on delivering reciprocal value, Bloomburg Businessweek recently published a feature emphasizing that Best Buy is not only still alive, but thriving. I saw a few of the examples that we recommend companies follow to build reciprocal value:

  • Enhance your product or service. Best Buy introduced the role of “in-home advisors” which it describes as personal chief technology officers. Hubert Joly, Best Buy’s CEO who has led the change at the company, describes how advisors “…can talk about what’s possible, be human, make it real.” And, he adds that it can be “a great way to make a sale, but it’s also the beginning of a beautiful friendship.” We love this way of thinking, In Marketing to the Entitled Consumer, we point out that “a marketer who treats you like a friend is always to going to be looking for opportunities to give you a little bit more of the things you like best.”
  • Reduce consumer effort. One of the things that’s really cool about the advisor role is how they seemlessly coordinate with Best Buy’s Geek Squad team which helps with repairs and installations. In the Bloomberg Businessweek story, an advisor identifies a customer need to connect their electronics and she is able to arrange for a Geek Squad member to show up within the hour. No hassle. No battery of phone calls. No effort on the customer’s behalf.
  • Solve the consumer’s broader problem. The in-home advisory program grew out of Best Buy’s strategic growth office, which the article refers to as “a safe space for ideas.” The program has three rules: no job is too small; we will come to your home for free; and we will be comfortable not closing a deal. Advisors are tasked with, and trained to, identify a customers need and to speak with the customer in terms of value. They set out to help customers achieve a broad objective, such as making their home “smart” or connecting all of their disparate technologies.

If this all feels too daunting or too far above your pay grade. Don’t despair. Pick ideas that you can implement and start small. One of my favorite aspects of the article is a theory that Joly refers to as the bicycle theory. He points out that “If you try to direct a bicycle at standstill, you fall. The key is to get moving,”

 

Why do brands so offend to make offense a skill?

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16th-century imaginary painting of Henry IV, National Portrait Gallery, London

In Ireland, secondary school students take two national exams when we are about 15 and 18 years old. The Junior Certificate helps determine where students will track for their Leaving Certificate, which then determines entry for college programs. They both take place during a three-ish week period in early June, and I don’t think I’ve ever studied more intensely than preparing for those exams.

Maybe that’s why I remember random German phrases, obscure mountain ranges in Eastern Europe, and snippets of poetry as Gaeilge.

This weekend, a famous speech from Henry IV, Part I (which I studied for my Intermediate Certificate, as the Junior Cert used to be known) came to mind in relation to a phenomena Nick and I call the “transference of entitlement.” We use this phrase to describe the effect of experiences we have with one company that set expectations for other companies. We usually think of it as a steady build-up of expectation rather than something triggered by a specific event. The reason Prince Henry’s soliloquy came to mind though was the result of back-to-back experiences that I had with car rental companies that couldn’t have been more different, and “like bright metal on a sullen ground” one of the experiences glittered, while the other offended.

Budget/Avis – the company that used to ‘try harder’ – offended. When picking up a car last Thursday in Boston to go visit our daughter, we stood in line for an hour and a half to get to the counter to pick up the car we had ordered (I know, I could have skipped the line if I joined the loyalty program). When we got to the counter, the agent didn’t apologize, or even reference the time we had spent in line. He was surly and just acted like he didn’t want to be there. Then, when we dropped the car off on Sunday we were about an hour later than we had scheduled. By the time they checked us in, they registered us as an hour and a quarter late (yes, there was a long line again). And, as a result, they charged us an extra $95. I was so incensed, but had the good sense to let my wife discuss it with them. I don’t think I would have been particularly diplomatic. My wife handled it very well, and ultimately they removed the charge. But, we were left with a bitter feeling towards the brand.

We went from the Avis return counter to the Alamo counter to get a new car to drive to New York to visit my wife’s family. The lady checking us in couldn’t have been more pleasant. When I questioned the price she quoted versus what we had been quoted online, she seemed genuinely concerned, and when it turned out she had been right and I was wrong, she remained pleasant and gracious. Returning the car in Manhattan was a smooth process where all of the employees were friendly and responsive. I left with a significantly enhanced impression of the Alamo brand, and it even restored a bit of my faith rental car companies.

Maybe if I hadn’t had the Budget/Avis experience, the Alamo experience would have been unremarkable. But, coming so quickly in succession, the positive Alamo experience seemed to “show more goodly and attract more eyes; Than that which hath no foil to set it off.”

I’ll stop torturing the analogy, but suffice to say that your customers’ perceptions of your brand experience is influenced not only by what you do, and not only what your competitors do, but by what every company does. The transference of entitlement is driven by our experiences with every brand – good and bad. When those experiences come in close proximity, the benefit or harm is only accentuated.