Customer Loyalty A few days ago I was asked for my top 5 tips for retailers on how to connect with their customers, limited to 100 words. For a topic that one could write a novel on … Well, here is my answer: -       Help customers solving their problem. This distinguishes and makes you found by the customer -       Marketing/loyalty programs offer your customers value and are not mere vehicles to gather more data points -       Simplify your customers’ life, e.g. with a card wallet instead of own app that directly integrates with your CRM and POS -       Relevant communications at the right time, place with the right content – without appearing intrusive. For this you need to know your customer -       Consistent communications across channels and interactions, optimized for used touch point They probably need some more elaboration, especially the last one. First and foremost, the reason for any business to exist is making profit for its owners. This is not equal to producing and selling things (or providing a service) with a margin. The business will succeed only if it focuses on identifying its customers needs and then delivering solutions for these needs. It is not about pushing a product into the market (mostly, consider that needs can be created by smart businesses). This thought is well in the domain of Service Dominant Logic although I am not a strong proponent. Marketing and loyalty programs are important interaction vehicles between businesses and their customers. Both, especially loyalty programs, need to be set up to be mutually beneficial. It is not only about gathering more customer data that can be used by the company. Still good data, voluntarily given by customers, is needed to be better able to serve to customers’ needs. It is also not about offering a better price to loyalty members. We all want a good price, but what does this help if the product does not work, as it should with no help being around? Similarly, marketing is not a one-way talking machine for businesses but a bi-directional interaction channel between businesses and (prospective) customers. In this sense good support can be considered marketing, too; the absence of a NEED for support is even more beneficial. At the same time it is a good idea to already simplify customers’ life at an early stage of their interaction with the business. This does not only apply to the solution for your customers’ requirements that a company provides, but also to services around. A simple example is a loyalty app that a company provides. Mostly one still needs a plastic cards to leverage any offer. On the other hand smart phones will get overloaded with apps if every business insists in having an own app. So, why not offering or participating in a card wallet system that is capable of holding multiple cards and integrates into the existing CRM- and POS systems? This immediately also addresses another point: Connecting these systems with the location awareness of a smart phone can provide instant benefit for all involved parties. It creates more relevance because only the information is sent to a customer that has a relation to current intentions at the current time and place. The customer does no more get bombarded with unsolicited e-mails or text messages that come at the time that is given by the businesses’ campaign plans but when they can take more advantage of the offers, they do not need to sift through a variety of applications, and they maintain control by just switching off communications of businesses, if they are not interested at a time – and switch it on again when there is more interest. This brings me to the last point of the list: Businesses communicate and interact with customers using a huge variety of channels; each of these have a number of “touch points". Every interaction between a business and a customer happens at a “touch point”. These touch points have been more limited in number and mostly less interactive some years before, but have become increasingly interactive now. Every single interaction with a customer influences brand perception and after all customer loyalty. Examples of touch points are: Store staff talking to me, a TV ad, a Facebook or Twitter ad, the layout of the loyalty card; the web site and its user interaction design offers many touch points, even the look and feel of the goods displayed for sales are touch points, not to talk of a customer using a purchased product to add value to the own life, or service interactions. As you can see from this list, possible interactions are very different in nature. It is fairly easy to convey different messages through different channels and different touch points. Some examples again to illustrate this point: Advertisements position a brand as a high end brand with the goods displayed in the shop in a careless manner, or having unresponsive in-store staff; or getting different or even contradicting information using different channels (calling, web site, Facebook, …). Lastly, all these channels with their touch points have different capabilities: Look at a web site vs. mobile web site vs. mobile app vs. representation on Facebook, Twitter, or Pinterest vs. the possibility of direct interaction with in-store personnel or service personnel. Because communication that happens across various channels and touch points is so diverse it needs to be consistent AND it needs to be optimised for the different touch points. picture courtesy of Jeanne Claire Maarbes / FreeDigitalPhotos.net

A few days ago I came across a blog entry by @MikeBoysen titled Customers Don”t Want Relationships…PERIOD! A really intriguing title and read – perhaps written to stir up a discussion. Works for me, as it stirs me up from of my absence from this blog of mine… Mike, after this very strong claim the starts with another one: CRM is dead. Well, CRM seems to be pretty alive for a dead one; as a strategy and also as a technology. And here is exactly the point where Mike and other influencers – I had discussions about this topic e.g. with @bob_thompson from CustomerThink as well – are dead wrong (I couldn’t resist this pun). Their argumentation is solely based upon CRM being a technology. And then they compare CRM with another acronym that they claim is a strategy, concluding that the other one is far better. Apples vs. pears. Technology vs strategy. CRM is not a technology. It is also not a process area. CRM is a strategy. CEM is another, related, strategy. Buying a technology without a strategy to implement is bound to fail. It is like entering a road without a destination in mind. This holds true for whatever acronym is used, including CRM, SCRM, or CEM, but also “Loyalty Management”, or “Social Media”, or “Big Data”. What do I need “Big Data” for? Or what is the purpose of doing “Social Media” in an enterprise context? Are customers loyal to a vendor or does a vendor simply manage to create the impression that he is better able to deliver to customers’ needs than other vendors? “Big Data” mitigates our inability to know about what and how to collect and analyze data beforehand and thus enables us to decide faster and better based upon data. It is nothing without a strong ability to analyze data in order to prove or disprove hypotheses, to find the needle in the haystack. “Social Media” is a way of using more and other communication channels to interact with prospects and customers. And yes, it overlaps with “Big Data”. It also overlaps with “CRM” and “CEM”, and “Loyalty Management”. “Loyalty Management” is a strategy to bind customers to a vendor. It will not work without delivery on promise and thus not without supporting CRM and CEM strategies. I would even go as far as saying that implementing a CRM strategy involves customer experience management, CEM. The reasons for pursuing these (and other) strategies and implementing the corresponding processes and technologies should be the same (and I deliberately do not say “IS”): Increase the measurable success of the enterprise according to its key performance indicators by implementing a strategy using one or more technologies. And, by the way: All these strategies are targeted towards customers getting involved into a relationship, whether they want a relationship or not; customers also might not perceive it as a relationship. What is a relationship? There are at least two useful definitions that one retrieves googling “define:relationship”: • “The way in which two or more people or things are connected, or the state of being connected” • “The way in which two or more people or groups regard and behave towards each other” Can we measure this? I think, yes; starting with simple behavioural metrics like RFM, (email-) subscriptions, opening rates, forwarding rates, campaign reactions – it tells a lot if a customer only buys the deals - but also using surveys, customer satisfaction scores including the not-so-liked net promoter score. Add into the mix the participation in forums and statements on social media, like Instagram, Facebook, Twitter and the willingness to give away personal data (in return for better targeted offers or better prices, or…?) and the ever-increasing ability to perform sentiment analysis on what we are saying and writing. This, together with a customer-oriented approach of delivering solutions to needs, and adapting over time, helps customers and thus the business. Having said this CRM is by no means the only customer oriented strategy that businesses need to look at. The best solutions are of no or low value if the experience is not right – maybe a bad example here, but think of the perception that SAP is still struggling with. tl;dr CRM is a strategy and is far from dead; customer relationships are measurable and whether we as customers like it or not, we are in a relationship with vendors. Vendors, on the other hand, cannot rely on systems as a panacea: They need to implement a set of customer oriented strategies including relationship management and experience management in order to be able to repeatedly help customers getting their job done (provide a solution to their problem).

SocialMeetsCRM and AreteN Ltd are happy to announce our newly forged partnership. "Combining the solution strength of SocialMeetsCRM with the strong sales capabilities of the AreteN team will bring both of our businesses ahead and it will help SocialMeetsCRM enter an important European market and give us more momentum in our internationalization efforts. This is an exciting opportunity for us." says Thomas Wieberneit, co-CEO of SocialMeetsCRM Ltd. AreteN will be the exclusive reseller for SocialMeetsCRM solutions in UK and Northern Ireland and initialy focus on the UK retail market, offering a uniquely integrated social mobile loyalty and couponing solution. This solution enables retail companies to efficiently get more reach via social networks while at the same time giving them the opportunity to engage with their customers on their smartphones taking advantage of toha, the mobile social networking app. Scenarios include the maintenance of loyalty cards and coupons on the phone, where thy matter to their customers, at reduced cost for the creation and management of loyalty accounts and coupon campaigns. Cards and coupons can be scanned at the POS directly from the phone.

SocialMeetsCRM is happy to announce our presence at the retail australasia Expo & Summit that takes place on May 21 and 22. Together with our partner AdvanceRetail we will exhibit our integrated loyalty and coupon solution for Retail. Offer your customers the ease and convenience of a mobile loyalty card and coupons sent directly to their smartphones and their redemption with a simple scan directly at the POS. Expand your reach and have direct communications with your customers on important social networks and smartphones leveraging our Social-Mobile Collaboration Platform and our toha app. toha is available for iOS and Android.

Some time ago my wife Nicole posted a small series of blogs about the topic of Loyalty on ciber.com. In these readable blogs she identified and summarised three main strategies of acquiring loyal customers, which are

• Every day low price
• Classic loyalty programs that base upon cash-back options or that are points based
• Hybrid models

To gain and retain loyal customers it is necessary for Retailers (or brands, or …) to get into a mutual engagement with the customers. In order to achieve this it needs something like a WOW!-factor. An important way to get this factor for Retailers is the usage of social media (or social CRM when being more advanced). Every day low price of course means plain ole price competition. No WOW!-factor whatsoever involved here. On top of that there can be only one competitor that actually has the lowest price. All the others go in from second place onwards. Given that, competition only on price is the surefire way to a Retailer’s death if the Retailer is not the one with the lowest price. Price competition kills margin, service levels, shopping experience, ability to gather and analyze more data on customers, as it needs an investment, which needs to be paid out of lowering margins. Every day low price works well for highly commoditized products and services, else it is dangerous. Customers will not see the real price of a good or service anymore but ask/search for a discount. It is extremely difficult to change this behavior once it shows up – and we consumers are already educated about the fact that the same product can come cheaper, so why pay the full price? How do Groupon or other, less known similar providers (like steals4all.com, an aggregator on Groupon, or 1-day.co.nz, to name but a few) fit into this – at various levels? Well, Groupon basically adds some WOW!-factor to price competition by adding a community feeling and some lottery atmosphere. But essentially Groupon is about low prices, which widely opens the road towards price competition, with all its risks. Having said that, Groupon has hit a nerve, as rising user numbers and soaring valuation show. There is a demand. Still it needs to be used wisely and as a part of a wider social strategy, or preferably by Retailers who follow low price strategies – with the caveat that Groupon, being a business, takes an additional part of the remaining margin for itself, of course. Leading Retailers who want to take real advantage of social environments (not social media, not social CRM) will get further. These Retailers will provide added value to their customers, be it via a consistent user experience in the different channels, ease of use, solutions to challenges that I, as a customer always have, co-creating it with their customers and so on. These Retailers will also successfully integrate their social media endeavours with their traditional CRM strategy and implementation, in order to learn and be able to act on the learning, to their customers benefits, which is the ultimate way to the Retailers’ nirvana. Mark Tamis , I and others have blogged about this before, so there is no real need to repeat possible value adding scenarios, but probably much scope to look into taking more advantage of value adding and possibly co-creation (I need to thank @grahamhill for a good discussion and links to this topic, which I still need to digest). Groupon and its likes are by far not the end of the road – merely only the beginning.

We trust those sources most, who are like us. “A company like me”, as Paul Greenberg dubbed it in an article for destinationCRM, is a vision that depicts a trustworthy, almost human, company; maybe this vision is not an achievable one, but it still is a very good one since easily related to and understood. It clearly shows the path to the ultimate goal of each company: To add value to customers by being trustworthy. Adding value to customers increases their loyalty and having more loyal customers directly translates into an improved bottom line since loyal customers have a higher value than irregular customers. They spend more and more often. Loyal customers furthermore often act as ambassadors for “their” companies and brands thus providing a free-of-charge marketing- and sales force which results in a better top line. As a matter of fact and as stated in several blogs before, people – customers – are more connected than ever. They get information they trust on products and services anytime and anywhere via their personal networks and can easily confirm or prove wrong all information that is pushed out by companies. They achieve this via usage of services like Epinions, Tripadvisor, Facebook, Priceme, and so on. Customers use these sites from their home computers and via their smart phones, so that they even take ad-hoc decisions informed. As a result the push approach does not work anymore. Companies are no more in control of the information that is available about them and their brands. Successful companies embrace this. As an example (and sorry to all the not mentioned ones, ...) we find pages for different brands like Coca Cola, Miele, Nestle, Adidas, Nike or New Zealand’s Icebreaker on Facebook. Coca Cola also embarked on a marketing campaign “Expedition 206” in 2010 that fully embraces social media - and sparked quite some discussion about whether this is social CRM or only social marketing. These companies, as well as other ones, have understood that they need to become part of their customers’ networks of trust and act accordingly. The first step towards achieving this is engaging and fostering a bi directional communication that involves customers into marketing-, sales- and service processes and ultimately also into product development processes, while following a clear brand message. This engagement can start by targeted campaigns, loyalty activities or questionnaires, to give but some examples. Each customer participation, or non participation to that regard, in campaigns, loyalty programs, surveys, participation in forums, etc, is a valuable answer. Answers may be given in forms that are immediately ready for automated processing or in human readable format that needs further processing before it can be used by an automated system. Analysis of click streams gives hints on what gets customers’ attention and what not. Successfully engaging customers into a longer dialogue creates transparency for customers. They know what a company stands for and where it heads to, in other words what they can expect. The longer the dialogue lasts the higher are the chances of increasing a customer’s loyalty. However: Action without measurement is nothing! It is important to collect, analyse, and use the data that is gathered in the course of this dialogue, to convert the data into information, to learn from this information, thereby turning it into actionable knowledge, and last but not least to properly apply the new knowledge. By using this knowledge resulting from their dialogue with the customers and combining it with the transactional data that is readily available it is possible for companies to conduct a conversation with customers like they know them the way a friend (at least an acquaintance) is known. This creates (the impression of) a personal connection although it is independent of any company employee. By means of a CRM system that is able to integrate the social knowledge with the knowledge gained from customer transactions a company can ensure that the customer is addressed the right way, regardless of the channel. A company then may appear almost human. By getting closer to this ideal of a humanised “company like me” a company gets deeper and deeper into their customers’ networks of trust. As a result the customers are not only providing more and more valuable information but are also increasingly advocating the company and/or its products or services. This way a mutual give and take and an eye-to-eye relationship evolve. Companies that are able to get close to this vision will be able to solidify their market position since they have a loyal customer base and know that they are providing the right products and services to them. This is a revised version of the article A way towards Nirvana - Embracing Social CRM is Key, posted ealier on ciber.com and has been republished with the permission of the author.