Sainsbury’s has this whole Twitter thing down cold. Earlier this week, popular U.K. blogger October Jones complained that his chicken sandwich from the grocery chain “tastes like it was beaten to death by Hulk Hogan.” The company’s official PR account promptly responded: “Really sorry it wasn’t up to scratch. We will replace Mr. Hogan with Ultimate Warrior on our production line immediately.” (If you’re not a child of 1980s pop culture, you can rediscover both of the poultry pounders here). Completing a nice Twitter tandem, another Sainsbury’s corporate account replied with a phone number for Jones to call and said the company sincerely regrets that “you had to wrestle your way through the sandwich.”
Sainsbury’s is proving quite responsive to all sorts of unconventional customer complaints. Earlier this year it pledged to change the name of its Tiger Bread to Giraffe Bread thanks to an online campaign that began with a 3-year-old’s letter.
Source: AdWeek.com, May 29, 2012. Author, David Griner.
What would your reaction be if you were October Jones? Would Sainsbury’s use of humor satisfy you, amuse you or make you even more disgruntled?
How you tried to use non-conventional response types (like humor) to customer complaints? Did they work?
In what ways does this major retailers’ example lead you to evaluate and potentially change the way you interact with your customers on social media platforms?
What’s the most incredible act of customer service you have ever performed for a customer, and did it inspire their undying loyalty? In this story by Peter Shankman, he recounts how after a long travel day he boarded a plane, tired and hungry. As a joke, he tweeted out to Morton’s steakhouse to please have a Porterhouse waiting for him at the airport when he landed. Of course he was not expecting any response, but guess what? At the airport Morton’s was there, waiting for him with a Porterhouse.
Shoe purveyor Zappos is also well-known for its great customer service. When this blogger’s mother was suffering from health issues and related problems with her feet, she had to return some shoes to Zappos and ended up getting into a long conversation with the customer service agent. The customer service person sent a bouquet of flowers to the mother and gave the mother, daughter and sister VIP memberships. The sister vowed to buy every pair of shoes from Zappos from then on.
And there’s the famous example of Southwest Airlines holding a plane flight for a grandfather who was flying to Denver to see his three-year old grandchild who had been beaten to death by his daughter’s live-in boyfriend, and who was scheduled to be taken off life support that night. When the grandfather arrived at the gate twelve minutes late for his flight he was shocked to find the plane still there. The pilot said, “They can’t go anywhere without me and I wasn’t going anywhere without you.” Cost of delaying flight: who knows and who cares? The knowledge that Southwest did the right thing and the amount of goodwill it created: priceless.
Of course, you don’t have to be a restaurant, retailer or an airline to provide outstanding customer service. Opportunities exist every day in your business.
When was the last time you dealt with an upset customer or noticed that a customer seemed stressed? What did you do? Did you avoid them, get defensive, or did you ask questions so you would understand their concerns, stresses, problems or fears? Then did you go out of your way to provide a service that was above and beyond what was expected?
What is the best customer service experience that you have ever had? Did it inspire your loyalty to that company?
What acts of customer service have you or your co-workers provided that created loyal customers for your dealership?
With the viral advent of social media into the business and marketing worlds, many companies are asking, “Is social media marketing something my business needs to use?” A recent blog post on Hay There Social Media, a social media consulting business, provides insight on why social media is effective for both businesses and individuals.
Team Member Deanna Rose uses DSW (Designer Shoe Warehouse) Rewards as an example of how large businesses are attracting more customers – and potential customers – to their products and services by reaching out on social media. “Every Tuesday, DSW gives away 25 free pairs of shoes to their loyal Facebook followers. The requirements for this ‘Free Shoesday’ giveaway? Entrants must like the DSW Facebook page, be a DSW Rewards member (which is free to join), and be one of the first 25 people to email the correct answer to a random question posed on the DSW Facebook page at noon. That’s it.” The results speak for themselves, as DSW attributes much of its success in a down economy to customer loyalty and the DSW Rewards program.
But this isn’t a benefit only limited to major retailers. Rose writes that, “regardless of the size of business you have, if you’re not actively participating in social media, then you’re not hanging out with your customers as much as you can.” This leads to countless missed opportunities for businesses to connect with their current customers and to prospect new ones because, Rose continues, “your customers want to hang out with you. It’s the cool – and smart – thing to do.”
Rose then provides specific reasons for why social media works for businesses and their customers:
WHY SOCIAL MEDIA WORKS (FOR THE INDIVIDUAL):
It’s easy - and instant. People check up on their friends and happen to see that you’re unveiling a new product, having a sale or sharing a photo. Or maybe you’re having some sort of contest or posing an interesting question. Which brings us to the next point:
It’s fun. The thrill of hanging out where everyone has the same chance to engage and provide feedback is enjoyable, and being the first to see a special news is exciting. And it keeps the customer around. Why? Because:
It’s personal. To be interactive directly with a brand makes customers feel like they matter, that their opinion - and their dollar - counts. It builds a bond.
WHY SOCIAL MEDIA WORKS (FOR THE BUSINESS):
It’s direct. Really, how much more direct marketing can you get – to have potential customers voluntarily sign up to receive all the info you want to give them? Yes, please!
It keeps customers participating. Current and potential customers “like” the page for an initial contest or promo and then keep their eye out for your company’s updates of new offerings, sales and anything else your company posts about. When you keep them actively seeking you out, that means they’re thinking of you. Which means:
It gets customers talking – about you. They’re talking about your company to their family and friends, who will likely go follow your social media profiles. And when customers talk about you, they usually buy from you, too.
Rose concludes that “if you’re not promoting your business via social media, then you’re not getting as much exposure as you can. When your company is engaging on social media platforms, everyone is making sure that they are connected to you. They’re reading your post updates and thinking of you… a lot.”
If you’re just getting started in the social media marketing world, take a look at the Twitter or Facebook sites for major businesses – both locally and nationally. What trends do you notice? What seems to work best? How can you apply these practices as you launch your own marketing efforts through various social media platforms?
Many of the so-called loyalty programs in operation today don’t really develop loyal customers at all; rather, they create “frequent” customers. Loyal customers do more than just visit your business more frequently than other customers; they are your businesses’ best marketing tool and your biggest fans! They want your business to do well, and they ensure that you’re there for them when they need you by sending more business your way. Besides bringing their own business to you, they encourage others to do the same.
These loyal customers are the most valuable assets businesses have, and yet many loyalty programs provide these customers with the same standard treatment every other customer receives. Good loyalty programs, rather than ”frequent customer” programs, recognize and value customers for their loyalty, rewarding them for more than simple patronage. And by keeping its best customers happiest, businesses reap their own rewards through several channels of business growth.
Below are 15 key business benefits of properly implemented loyalty programs. We recommend you evaluate each one to determine how well your loyalty program is providing each benefit:
1. Retain Existing Customers: Not only do loyalty programs provide tangible incentives for continued patronage (via earned points, etc.), programs collect customer data that allows a business to better meet the needs of its individual customers. This provides for more targeted and customized service, making the consumers more likely to remain customers.
2. Acquire New Customers: While it should not be the central focus of any loyalty program, acquiring new customers is essential to any business and should be a benefit of your loyalty program. How effectively your program attracts new customers will depend on how exciting and how valuable the rewards seem to the target audience. Use your program data to determine demographics of your most loyal customers; then target prospective customers with similar demographics in acquisition campaigns.
3. Move Customers Up to Higher Tiered Rewards Levels: Build into your program the ability for customers to “graduate” to higher rewards when certain thresholds are met. This will encourage lower spenders to increase their spend in order to move up to better rewards brackets.
4. Filter Out Unprofitable Customers: It can be more expensive to retain bad customers than it is to acquire new ones. Customers who only purchase during times of sales and discounts can cost you money rather than increase sales. Design your loyalty program to reward better customers without rewarding those just watching for the bargain buys. Professor Philip Kotler’s adaptation of the Pareto Principle states that while the top 20% of your customers generate 80% of the profits, the bottom 30% of your customers eat up 50% of the profits generated by the 20%. Ensure your program is only rewarding the customers actually bringing in business.
5. Recover Orphan Customers: Salvaging former customers can be infinitely more effective – and much less expensive – than acquiring new customers. Discover what it takes to win back old customers and target this group with “We’ve Missed You” campaigns. Then ensure their new experiences with your business are positive and meet their needs.
6. Increase Customer Lifetime Value (CLV): It’s easy to get discouraged or underestimate a customer’s value when you are viewing their transactions in isolation. Look instead at the bigger picture. Determine what your best customers bring in through lifetime patronage and focus on that when interacting with them. When your customers are valued not simply for one purchase here and there, but for their lifetime business with your company, their loyalty – and their lifetime value – will increase.
7. Target Your Best Customers: Best Customer Marketing (BCM) involves spending more time, energy and resources on your best customers in order to maximize the ROI. Use your loyalty program data to determine who your best customers are, then recognize and reward them.
8. Build Relationships: Always remember that customers are people too. When your program is focused on the “human” aspect of customers, it will go further toward building customer relationships, which in turn leads to improved loyalty – and profits.
9. Create Advocates: Advocacy is one of the highest forms of loyalty a customer can show. They are so satisfied with your products and services that they feel compelled to share their experiences with friends and family. And any good marketer will tell you that word-of-mouth marketing is far more effective than any amount of promotional material.
10. Adjust Pricing Levels: A good loyalty program can help develop solid pricing structures. If customers are happy purchasing products at a particular price, why discount it? You can also use your loyalty program to study the effects of prices changes (e.g. what customer segments’ changed their buying habits when the price changed?).
11. Respond to Competitive Challenges: By monitoring customers’ purchase histories when new competition opens nearby, businesses can quickly and accurately identify what customers defect to the competition. These customers can then be enticed back with customer-specific incentives, special offers and even direct contact.
12. Select Product Lines Effectively: By knowing your best customers’ buying habits, you can more accurately predict which products lines to keep in stock, which to expand and which to discard entirely.
13. Plan Merchandising Optimization: Again, monitoring customers’ purchase history can allow businesses better determine which inventory items need to be ordered and when, as well as more strategically place merchandise on the sales floor.
14. Reduce Promotional & Advertising Costs: Targeted marketing efforts, through loyalty program data, allows businesses to zero in on specific customer segments, to reach the right customers with the right message at the right time.
15. Selecting New Business Locations: Your loyalty program provides you with valuable details on your customers’ demographics and geographics, allowing you to choose new business locations that would be the most profitable for you and beneficial for your customers.
Segmentation increases the relevancy of marketing messages, which can result in higher open and click-through rates, as well as stronger sales. When connected to different lifecycle marketing stages, marketers can more effectively message their customers to produce a better customer experience and stronger results, and increase retention rates.
Understanding which channel and what message consumers need is more important than ever. Segmentation helps you differentiate customers in your database so you can develop more relevant and impactful marketing tactics.
Lifecycle marketing is one of the most common segmentation approaches used today. For example, if customers in your database haven’t made a purchase in the last 12 months, they would be added to a reactivation program to incent additional engagement before they go dormant. To enhance a reactivation program, marketers might overlay a value-based segmentation using historical data to understand which customers to focus on to re-engage them. The more robust the segmentation, the more able you are to send tailored messages.
Choosing the right segmentation method depends on the data available and a clear understanding of marketing objectives. The most common segmentation techniques today to consider are:
RFM Segmentation: This helps companies that are looking for an inexpensive and simple solution to drive marketing communications based on the recency, frequency and monetary value of customer transactions.
Demographic Segmentation: This approach is ideal for when demand for a company’s products/services is influenced by characteristics such as age, income and home ownership.
Behavioral Segmentation: This technique groups consumers based on similarity of purchase behavior or affinities.
Attitudinal Segmentation: Businesses segment the market based on how attitudes and needs influence purchase behavior.
Value Segmentation: Marketers can define segmentation based on value place by customers on products.
As you get into trigger campaigns, like abandoned cart or browser behavior, the response rate starts to increase. When you add in lifecycle messaging, you get a higher response rate. Each layer adds an additional conversion rate and leads to a more successful marketing strategy with greater ROI.
Source: Database Marketing Guide, April, 2012. Author, Judy Loschen.
How have you used customer segmentation in your marketing efforts? What types of segments have you implemented?
In what ways has marketing segmentation influenced your customers’ experiences with your business?