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(c) 2016 rDialogue LLC. All rights reserved.
Customer Experience Is The New Loyalty:Or Is It The Other Way Around?NOEW March 17, 2016
CONFIDENTIAL INFORMATION2
“If you're competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
− Jeff BezosCEO, Amazon
CONFIDENTIAL INFORMATION3
Why are you in business?
“The purpose of a business is to create a customer”
“Nothing happens in a business until somebody sells something.”
Peter Drucker knew the answer
The purpose is also then, to retain that customer.
The Age Of The Customer Is Here
“What’s the top imperative at your company? If it’s not a transformation to make the company more customer-focused, you’re making a mistake.”
4
What’s Your Definition?
Customer Experience Loyalty
5
=Great customer experiences turn occasional customers into loyal customers, and ultimately into brand advocates.
Customer Experience
New Loyalty
Promise
6
The reality today is that most customers have low expectations from brands. And with good reason.
=Customer Experience
New Loyalty
Promise
There’s no shortage of marketing “words du jour” aka bright shiny objects
Customer Experience =
Sum total of all customer interactions, at all touch points, both online and offline, throughout the customer
lifecycle
Why pursue a “Great CX” strategy?
Own the customer relationshipDrive organic growthRelevance (differentiation) vs. mass promotionValue of Big DataFewer technology gapsAlign investments with value
Loyal Customers Make A Business Great
Economics
Loyalty impacts merchant after merchant, well beyond a single brand
Average Sales Lift Per Loyalty Member
Retailer 3Retailer 1
36% 56% 70%
Retailer 4
140%¹
92%98% 121% 151%
Retailer 2 Retailer 5Retailer 6 Retailer 7
Source: ¹Huffington Post, 2014, Other Retailers: rDialogue Proprietary Data
On par with Amazon Visa cardholders1
Deliver three times the value to the
brand a year
3X5X
Source: Rosetta Customer Engagement 2014
Engaged and loyal customers make a business grow
More likely to indicate it is the only brand they purchase in the future
“We will continue to focus relentlessly on our customers.”
For Jeff Bezos, the “Age of the Customer” started last century, professing to “Obsess over customers”
Start with a vision for customers: What is your goal?A single purchase? A community of buyers? A long-term relationship? Wildly devoted customers who…Drive an extra mile? Have your app on their home screen? Will buy full price without a second thought? Get excited when they talk and share – with friends, with strangers?
CONFIDENTIAL INFORMATION15
“What we really need is a mind-set shift that will make us relevant to today’s consumers, a mindset shift from ‘telling and selling’ to building relationships.”
− Jim StengelFormer CMO, Procter & Gamble
For CX and loyalty, brands need a 180° turn
Today Tomorrow
Brands should be loyal to customers
LoyalCustomers
LoyalBrands
The quid pro quo of CX and loyalty
The BrandThe Customer
“Allow us to pay attention to you and we’ll
make it worth your while.”
“If I share my data and let you track me,be relevant, make it
worth my while,and don’t waste
my time.”
A differentiated experience is unique and relevant to each customer
“Customers will not tolerate companies that have amnesia when it comes to remembering them and their preferences for recognition.[They] ...believe that they have a relationship with a provider once they have transacted with that provider...the experience should be mutually beneficial, and therefore designed with them in mind – similar to most relationships.”
CX and Loyalty work hand-in-glove with relationship marketing to fuel the brand experience
Delivery Data
RelationshipMarketing & Delivery
Brand PromiseCX/Loyalty
Measurement
CX / LoyaltyDrives enrollment and opt-in
Provides a reason to identify, explore and trial
Builds the emotional brand relationship
Relationship Marketing Drives brand vs. transactional loyalty
Allows flexibility to deliver by segment
Drives profit and prevents entitlement
Data collected via CX raises the bar for relevance
Explore/ Browse
Opt-In / Opt-Up
Shop
BuyUse
Repair
Advocate
At the center of CX and Loyalty is ongoing data collection
Segment / Model
Assignment
Channel Preferences
Demographic NPS, Profile
Explicitly Gathered Data
Implicitly Gathered / Created Insights
Product & Services
Bought/Used
Wish List, Shopped /
Gifted Items
Purchase Patterns &
Preferences
Service Needs & Channels
Competitive Threats
Loyalty (at brand, via card)
Value / Response
Drivers
Research / External Data
Engagement – Social,
Mobile, etc.
Transactions & Payments
CRM Database + Personalization Rules + Campaign Mgmt. Tools
Owned & SharedSocialStore, EventsPartners
OwnedEmail, Web Brand, MobileProductServices
“You can’t have everything. Where would you put it?”
- Steven Wright
CX investment should be appropriate to the economics and opportunity for each segment
Value per Consumer
Not Ready: Treat Promo-tionally
Engage Quickly: Selectively & Cost Effectively
Prioritize Segment: Oppor-tunity & Volume Ideal
Upside Limited: Focus is to Protect, Not Grow
# of
Cus
tom
ers
The Pittsburgh Steelers: Recognition calibrated by segmentFan segments, needs, economics and priorities are the drivers of a differentiated experience
Season Ticket Holder
Game Attendee The Steelers Nation
Club Level MembersHigh Frequency
Low Incremental ValueExclusive stadium experiences and
product
Direct, 2nd and 3rd party purchasers
Mid FrequencyMid Incremental ValueGame day and stadium
experiences
Local, National, International Fans
Low-Mid FrequencyMid-High
Incremental ValuePart of the Steelers
Family
Delta Air Lines: A model for leveraging CX to transform and grow a business
Customer Inputs (Value Drivers) • Ticket Data,
Class of Service + Extras
• Travel Routes • Preference Data• Social / WOM
Activity• Booking Channel• Form of Payment• Spend and yield
Business Outputs (Business Tools) • Reserved seat / seat
quality• Seat Upgrade• Waived baggage fee• Security clearance• Lounge access• Boarding group• Thank you (explicit,
personal)• Tier Status
Airport Experience
Onboard ExperienceSkyMiles Credit Card
Digital & SocialPartners
Delta Call Center
CONFIDENTIAL INFORMATION26
Starbucks uses its tender to drive the CX and loyaltyCard registration drives customer addressability
27
Starbucks was ahead of the curve in being mobile first
CONFIDENTIAL INFORMATION
...card registration ties to the Starbucks app
CONFIDENTIAL INFORMATION28
The app integrates Starbucks CX and loyalty propositionRewards are secondary to payments, store experience and MOPIS
CONFIDENTIAL INFORMATION29
The app enables a Starbucks CX that serves allGood for customers, good for SBUX, good for associates
30
Answering the ultimate question...
CONFIDENTIAL INFORMATION
+223% +226%
+398%
Loyalty Leader 5-year Stock Performance vs. S&P 500as of 16 March 2016
AMZNSBUX
S&P 500 +54%DAL
CONFIDENTIAL INFORMATION31
The “How To”
CX has an essential role in driving business growth, regardless of the model
Type of Experience Examples
Personalized store experience driven by data
Enhanced customer experience driven by new technology
Expanded product experience and brand interaction
Brick and mortar store experience that extends the brand
Content-driven shopping experience
CONFIDENTIAL INFORMATION33
Developing and delivering a great customer experience, and engendering loyalty, is a disciplineDon’t solve for every customerExploit scarcityCollect and use dataNavigate for customers, set their path(s)Measureand most importantly,Leadership
Whether you call it CX or loyalty marketing, they both mean:
Pay attention to customers and act accordingly
This is where they unify
Thank You
For more information about rDialogue, please contact:
Phil RubinCEO
404.475.5801 office404.272.6400 mobile
115 Perimeter Center Place, Suite 945Atlanta, GA 30346
http://www.rDialogue.com/expowww.relevantdialogue.com (blog)
@rDialogue @phil_rubin