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Friday, December 25, 2020

Magical Marketing - Houdini's Secrets [13] *


Harry Houdini, born Ehrich Weiss in 1874, dazzled American and European audiences with spectacular magic and illusion feats until his death on Halloween, 1926. Adapting his name from his hero, J. E. Robert-Houdin, a French magician, Houdini quickly established himself as the top entertainer in the world in the late 19th and early 20th centuries. While everyone knows about his marvels as a legendary magician and escape artist, few know that much of his success was due to superb marketing.
Here are 5 marketing lessons learned from Houdini that you can apply to your entrepreneurial venture (and you don't need to wear a strait-jacket or be handcuffed to pull off this marketing magic).
1. Always be prepared! Houdini always had a plan and was very resourceful. He was ready for any physical or mental challenge. While Houdini clearly took chances, he believed in managing risk. He used his superior intellect to conduct research and obtain knowledge of all situations and always had the right tools to get the job done. It was not uncommon for Houdini to spend up to 10 hours a day practicing challenging escapes.
2. Leap-frog the competition. Houdini constantly studied the market and prepared for imitators and new competitors. He dissected strategies used by his rivals and never let his competitors know what he would do next. He read every book that was published on magic acquiring a personal library of more than 5,000 volumes on the subject. While rivals were content to break out of handcuffs, Houdini did this while suspended upside down from skyscrapers, on top of bridges or immersed in water.
3. Fine-tune your positioning strategy. Houdini understood the sheer power of a brand name a century before this became all the rage in marketing. Quality was at the heart of his value proposition, always exceeding customers' expectations in his live performances. He knew that perception was reality and had every detail worked out in advance to provide a superior customer experience. While other magicians made rabbits disappear, Houdini vanished a full-grown elephant in plain sight. To extend his brand, Houdini went global and conquered Europe, as well as America.
4. Build a world-class product. Houdini carefully guarded his trade secrets and invested in his product. He diversified to build his product line and product mix. An advocate of the kaizen approach (continuous improvement), Houdini regularly sought incredible new offerings while enhancing his existing repertoire of tried and true stunts. His three-minute water torture escape from a steel-encased cabinet was world renowned. This was one of his several signature acts that could not be replicated.
5. Be creative and never stop promoting. Houdini was the consummate sales pro as well as the master showman and publicist. He stimulated word-of-mouth promotion in every city he visited by promising unimaginable events that he later successfully executed. Houdini often dropped in on local police stations during the day in the cities he was visiting and challenged them to keep him from escaping their most secure chains/restraints, handcuffs, jail cells, or locks (his arsenal of four hidden keys/picks always got the job done). The publicity gained from these teaser appearances drew huge interest to his evening shows. The word spread nationally and internationally in an era that had no television or internet!

Art Weinstein, Ph.D., is a Professor of Marketing at Nova Southeastern University. His research interests are customer value, market segmentation and entrepreneurial marketing strategies. He may be reached at art@nova.edu 

* This post is extracted from his article "Houdini's Magical Marketing Strategies" published in the Journal of Strategic Marketing (2020).  Full article: Houdini’s magical marketing strategies (tandfonline.com)

 


Global Customer Satisfaction and Experience Management [12] *


Customer satisfaction (CS) is a key performance measure for global marketers. Recently, there has been a shift to applying newer digital metrics. Others contend that customer delight may be a more relevant construct than customer satisfaction. How has customer satisfaction measurement changed in the past few years? Does it differ by country and industry sector?

Many marketers believe that customer satisfaction is the one customer value metric that matters the most.  A large research study (70,000 customers, 1,068 managers, and 97 countries) revealed that managerial perceptions of CS is not aligned with customer perceptions. Managers overstated CS and loyalty rates and underestimated the impact of customer complaints on future loyalty (Hult, et al., 2016).  The University of Michigan’s American Customer Satisfaction Index (ACSI) has found a strong correlation between CS and firm’s financial performance. Customer satisfaction analysis can predict and improve financial outcomes such as sales growth, gross margin, operating cash flow, market share, and shareholder return (Mittal & Frennea, 2010). 

Customer Satisfaction and Experience Management Applications

HappyOrNot is a Finnish company and innovator in customer satisfaction research. Their experience shows that if product/service assessment is made easy, people will readily provide feedback without the need for consumer incentives. Their core research tool is a terminal with four large buttons -- dark green/smiley (very happy), light green/less smiley (happy), light red/frowny (unhappy) and dark red (very unhappy) – accompanied with a sign asking customers to rate today’s experience by pushing one of the buttons. This simple premise has been used effectively by their global clients. This includes: a European gas station chain which measured managers’ overall performance; a Swedish sofa retailer for understanding why sales varied greatly throughout the day; medical facilities that evaluated doctors’ care and treatment; and the San Francisco 49ers football team to monitor the NFL game-day fan experience. In the latter application, more than 20,000 responses were recorded during the first game of the season via 60 devices – this was equivalent to the total feedback the team received for the entire previous season. The HappyOrNot devices track responses instantaneously to provide data-based, real-time feedback to organizations (Owens, 2018).      

The Temkin Experience Ratings (headed by Bruce Temkin, formerly of Forrester) ranks 331 companies in 20 industries based on feedback from 10,000 U.S. consumers. Three dimensions of customer experience are evaluated -- success, effort, and emotion. For example, in 2017, the wireless industry tied for 16th place with a 65.5% customer experience rating which is up 7.5% from 2011. While AT&T matched the industry average (66%), they did increase their customer experience rating an impressive 10% from 2016 showing a strong commitment to improving customer service. (Their overall rank in the study was number 224). The top wireless carrier was US Cellular at 71%, ranked number 137, overall (Temkin Group, 2017).            

Customer Experience Impacts Business Performance

While under-performing firms may survive in the short term, they will not last long-term unless they change their ways and become truly value creating for customers. Two global billion-dollar companies clearly illustrate this point. A transaction-based company learned that customers with the best experiences spend 140% more than those with the poorest experiences. The second firm was subscription-based; they found that customers with the best experiences had a 74% likelihood of renewing for another year versus 43% of those with the worst experiences. Furthermore, those with the highest customer experience scores were likely to remain members for six more years (Demere, 2017).

METHODOLOGY

The “State of Marketing – Fifth Edition” provides insights and trends on customer satisfaction and related metrics from 4,100 marketing leaders in 17 countries in 13 business sectors (Salesforce Research, 2018). This report identifies the top 13 marketing metrics used by global companies and contrasts high- performing from under-performing organizations. Four metrics – revenue growth (74%), sales effectiveness (64%), web traffic analytics (61%), and customer satisfaction (60%) were used by 60% or more of the respondents. Nine other popular metrics – customer retention, customer acquisition rates, qualified leads, digital engagement, social analytics, customer referrals, customer acquisition cost, mobile analytics, and customer lifetime value – were used by 43-59% of the global marketing organizations.

Research Questions

RQ1. The usage of customer satisfaction as a marketing metric varies by country

RQ2. The usage of customer satisfaction as a marketing metric varies by business sector

RQ3. High-performing organizations are more likely to track customer satisfaction than low- performing organizations.

RQ4. The use of customer satisfaction as a performance measure has declined as global organizations are prioritizing new marketing metrics.

RESULTS AND DISCUSSION                                                                                                           

The following findings are based on the “State of Marketing” report. Customer satisfaction was rated as a top 5 marketing metric in 11 countries - Australia, Belgium, Canada, France, Ireland, Mexico, Netherlands, New Zealand, Singapore, The Nordics, and the United Kingdom. Surprisingly, it was not ranked as a top 5 metric in 6 major countries -  Brazil, Germany, Hong Kong, India, Japan, and the United States (see Table 1). Hence, RQ1 was supported.

Customer satisfaction was rated as a top 5 marketing metric in 9 business sectors – communications, financial services, healthcare, hospitality, life sciences, manufacturing, media, transportation, and travel. It was not ranked as a top 5 metric in automotive, professional services, retail and consumer services, and various business sectors (see Table 2). Hence, RQ2 was supported.

High-performing organizations were 1.4 times more likely to track customer satisfaction than under-performing organizations (RQ3 was supported). The use of customer satisfaction has declined as global organizations are prioritizing new marketing metrics. Overall, CS has slipped from the number 1 marketing metric in 2016 to the number 4 marketing metric in 2018 by global companies (RQ4 was supported).

CONCLUSIONS AND IMPLICATIONS FOR THEORY AND PRACTICE

Undoubtedly, customer satisfaction is a key metric for global marketing. New digital metrics (e.g., customer acquisition and retention, mobile analytics, social engagement, and web traffic)  have grown in  importance in recent years. As a result, CS now shares the marketing dashboard with other insightful performance measures. Nonetheless, the effective use of customer satisfaction tracking is a strong differentiator for how high performing companies outpace their rivals.  Since customer satisfaction usage varies by country and business sector, specialized multi-country, multi-market studies represent  a useful stream of inquiry. Marketing scholars may emulate the research approach used by John L. Graham and his team as they studied international sales negotiations in many countries for more than two decades (e.g., Campbell, Graham, Jolbert, and Meissner, 1988).

In addition, customer delight is related to customer satisfaction and has received much attention in the marketing literature. Barnes & Krallman (2019) advocate that customer delight is a distinct marketing construct – i.e., “an emotional state where customer expectations are exceeded.” Others believe that customer delight is an extreme form of customer satisfaction (i.e., highly satisfied) or a customer-centric business philosophy (marketing strategy). It is  recommended that this variable be incorporated into future studies.

Art Weinstein, Ph.D., is a Professor of Marketing at Nova Southeastern University. His research interests are customer value, market segmentation and entrepreneurial marketing strategies. He may be reached at art@nova.edu 

* This material was presented at the Academy of Marketing Science, Annual Conference (virtual), December 14, 2020. Here's the 10 minute video 2020 AMS Annual Conference (conferencespot.org)

Key References

Barnes, D.C. and Krallman, A. (2019), “Customer Delight: A Review and Agenda for Research,” Journal of Marketing Theory and Practice, 27 (2), 174-195.

Campbell, N.C.G.,  Graham, J.L, Jolbert, A. and Meissner, H.G. (1988), “Marketing Negotiations in France, Germany, the United Kingdom, and the United States,” Journal of Marketing, 52 (2), 49-62.

Demere, N.E. (2017), There’s a Correlation between CX and Revenue – and Here’s the Data to Back it Up”, Medium.com (January 25).

Hult, T., et al. (2016), “Do Managers Know What Their Customers Think and Why?,” Journal of the Academy of Marketing Science, 45 (1), 1-18.

Mittal,V. and Frennea, C. (2010), Customer Satisfaction: A  Strategic Review and Guidelines for Managers, Cambridge, MA: Marketing Science Institute, msi.org/.

Owens, D. (2018), Customer Satisfaction at the Push of a Button,” New Yorker (February 5).

Salesforce Research (2018), State of Marketing – Insights and Trends from over 4,100 Marketing Leaders Worldwide, Fifth Edition.

Temkin Group (2017), Temkin Ranking, Temkin Group Q1 2017 Consumer Benchmark Study, temkingroup.com/.

Table 1.  Customer Satisfaction as a Marketing Metric – A Global Perspective *

 

Countries

Respondents/

Percent of Sample

Customer Satisfaction Rating   in Top 5 Metrics

Belgium

    150 / 3.7 %

1st

Singapore

    150 / 3.7 %

2nd

France, Mexico, Netherlands

    800/ 19.5%

3rd

The Nordics, United Kingdom/ Ireland

                   450/ 11.0%

4th

Australia/New Zealand, Canada

                   600/  14.6%

5th

Brazil, Germany, Hong Kong, India , Japan, United States

                 1,950/ 47.6% 

Not ranked in top 5

17 countries

                 4,100/ 100%

                       Varies

*Adapted from State of Marketing 2018

Table 2. Customer Satisfaction as a Marketing Metric by Global Business Sector *

 

Business Sector

Respondents/

Percent of Sample

Customer Satisfaction Rating   in Top 5 Metrics

Healthcare, Life Sciences

                   320/   7.8 %

2nd

Financial Services, Hospitality, Transportation, Travel

    838/ 20.4%

3rd

Communications, Media, Manufacturing

    674/ 16.4%

                        5th

Automotive, Professional Services, Retail and Consumer Services, Other

                 2,268 /55.3%

Not ranked in top 5

Various Business Sectors

                 4,100/ 100%

                       Varies

*Adapted from State of Marketing 2018

 

Saturday, July 25, 2020

Rethinking Customer Experience Management in the Novel Economy by Brian Solis * [113]


New research shows that brands that embrace innovation and agility with an aim on humanizing the customer’s experience, outperform their peers, especially in a global pandemic.

COVID-19 has disrupted markets and lives at levels not seen by many. As cases around the world soared, executives were stunned, unprepared for the rapid shifts that would test even the most experienced of experts. The disruption wreaked by this pandemic was swift, unprecedented, and underestimated. While it largely reset the world we once knew, the term “new normal” became a staple in how we defined these novel times. But the impact on, and shifts in, markets and human behaviors were far from normal and definitely elusive of offering insights necessary to recognize any sense of normalcy or clear path forward.

Businesses that don’t take the time to understand what’s changing and why, as times and trends continue to evolve, will miss their opportunity to earn relevance and thrive in this new world. The most meaningful way forward is to place the customer at the center of your vision and decision-making in two distinct strategic phases: one with-COVID and the other, post-COVID.

Like the Novel Coronavirus, businesses are operating in uncharted territory. I refer to these times as the Novel Economy, a socioeconomic period that is, just like its namesake, new and unusual. Brands don’t have access to a disruption vaccine nor do executives possess a playbook for responding to and thriving in a global pandemic. At the same time, decision-makers are without best practices and case studies to skillfully guide their actions. The most direct source of insights resides in the signals and inputs customers willfully share with those who are willing to pay attention. What executives don’t want to do right now is make assumptions about customer needs and predilections. This was clear in the unanimous customer response to seemingly timed marketing campaigns in the early days of COVID-19. 

This isn’t a time to upset anyone. It is a time to be a light in the lives of consumers, to find ways to add value or remove friction, especially when customers feel overwhelmed and anxious by the impact of the pandemic in their lives. I call this #IgniteMoments. It’s an opportunity to humanize and enliven touchpoints, to touch the customer in a novel and refreshing way that creates memorable experiences.

The digital transformation of legacy marketing to modern, personal customer experiences

With a global pandemic still raging, marketers must operate with compassion and attentiveness led by a “with COVID” mindset. The existing brand style guide and marketing playbooks do not account for these times nor the speed and breadth at which they’re operating. Traditional marketing will no longer have the same effect moving forward. If anything, it will negatively affect customer relationships rather than enhance them. 

In its research, Salesforce learned that 69% of marketers say that today’s traditional marketing roles limit customer engagement — up from 37% in 2018. This sets the stage for more meaningful, personalized engagement now and also in a “post COVID” world aka the next normal. 

As such, customer-centricity, whether you call it CX or marketing or digital transformation, will be rooted in empathy, purpose, and compassion. This means that the next generation of style guides and playbooks need development in real-time.

COVID-19 accelerates digital customer behaviors and amplifies importance of empathetic experiences

A significant majority of customers are more than ready for brand humanization. According to Salesforce research, 84% of customers say the experience a company provides is as important as its products and services — up from 80% in 2018. This means that marketing is evolving from a classical, one-to-many approach, toward delivering customer experiences that connect, build trust, and guide mutually beneficial outcomes. 

In time of a global pandemic, when emotions are running high, experience is personal. That’s what an experience is after all, an emotional, mental and physical reaction to a moment. This is why CX leaders define the customer’s experience as the sum of all experiences a customer has with their business. Each touchpoint counts in their own right, but also are keystones to the bridges that connect entire experiences together. 

Marketing transformation takes on a new sense of urgency, requiring true 360 customer understanding and engagement

It’s critical for marketers to have a real-time 360 view and understanding of a customer’s full journey, at every stage, from discovery to engagement to retention and loyalty to advocacy. Sixty-nine percent of customers are reporting that they expect connected experiences. 

Legacy roles that only focus on stages of the customer journey, in isolation, without coordinating with those who manage other connected touchpoints, will lose favor with customers. By design, the brand message and the experiences they deliver will be disconnected and likely confusing. Said another way, if it’s not complementary, intuitive, and additive, individual experiences are likely taking away from its total potential. 

Data-driven empathy helps marketers deliver personalized and meaningful customer experiences as customer expectations and preferences evolve

Customers are changing as a result of COVID-19 and the emotions and health advisories guiding their well-being. Shelter-in-place, physical distancing, concern for their own health and well-being, as well as for their loved ones, is accelerating digital-first behaviors in every touchpoint across their journey. 

During these times of disruption, data-driven empathy enables empathetic marketing, customer engagement, and genuine experiences. As customers’ circumstances, needs, and sentiments evolve rapidly, accumulating a clear understanding becomes mission critical for AI-powered platforms and CX and marketing strategies.  Marketers are turning to an ever-increasing number of digital signals and data sources to assess transactional data, declared interests and preferences, known digital IDs, offline IDs, second-party data, inferred interests and preferences, and more. In fact, progressive marketers plan to use 60% more data this year than the overall industry average. Combined with AI, marketers can achieve personalization across the journey at scale by distilling insights from data and guiding teams on how best to take action.

The experiences that customers have in each touchpoint must also not only meet their needs, but also strive to surpass their expectations. High performance marketers report that they are increasingly turning to a sophisticated array of modern digital tools and intelligent, connected platforms. Artificial intelligence (AI), for example is helping marketers learn from real-time customer activity and corresponding data signals to personalize engagement with the right context at the right time in the right channel on the right device. Eighty-four percent of marketers report using AI, which is up from 29% in 2018 (an increase of 186% in two years).

Customer-centric metrics matter, count what counts to the brand and to the customer’s experience

CX is dependent on the “customer’s experience and as such, their experience, hence the apostrophe, becomes a key CPI (customer performance indicator). New and upgraded metrics, beyond those of vanity and general engagement, need to demonstrate performance and also customer-centered benefits. 

High performance marketers (72%), for example, are already analyzing performance in real time, versus 49% of underperformers. And, fewer than half (48%) of marketing organizations today track important experience metrics such as customer lifetime value (CLV/LTV).  There’s plenty of room for growth here.

Customer-centric metrics correlate to business performance. Experienced marketers are being more strategic about ways to invest in customer experiences to showcase customer satisfaction and retention in addition to complementing customer acquisition strategies. By measuring the customer’s real-time and aggregated experience, marketers can learn exactly how and where to improve them, in times with-COVID and post-COVID markets.

Innovation is the ability to see change as an opportunity

Innovation is defined as many things. But at its core, innovation is about creating new value that didn’t exist before. This is different than iteration, which incrementally improves existing value. Both are important.

During this pandemic, and even after there’s universal treatment, a vaccine, we establish herd immunity, or all of the above, the customer’s experience is not only an ongoing priority, but also a primary driver of innovation. 

Following the series of disruptive events, shutdowns, impacts on public health and global economies, and waves of setbacks, customer preferences and behaviors evolved rapidly and will continue to evolve as the Novel Economy unfolds. Even as the world starts to open up as it learns to co-exist with a novel coronavirus and even after its eradication, CX must always be human-centered to genuinely and effectively engage customers. The same is true for CX innovation. Research found that 76% of high performers say they do a great job at innovating marketing technology, tactics, and strategies, versus 47% of underperformers. 

Stay alive in an era of disruption, aim to survive in this interim normal, and learn to thrive in the Novel Economy

To thrive in the Novel Economy, during and following COVID-19 disruption, it’s imperative to unlearn BC (legacy) mindsets, learn from the high performers, and most importantly, learn from your customers. Furthermore, embrace a growth mindset and an empathetic heartset to effectively…

1.      Shift from classical marketing to a relentless focus on the customer experience.

2.     Embrace an ethos and commitment to helpfulness, relevancy, and trustworthiness.

3.     Create a culture of innovation in parallel with the continual practice of iteration.

4.     Also create a culture of data-driven empathy.

5.     Empower and incentivize employees to do the right thing while also learning the next thing.

6.     Personalize all forms of engagement and use modern technology to humanize experiences.

7.     Make the offline and online customer journey integrated, intuitive, productive, true, and even joyful.

8.    Transform touchpoints into #IgniteMoments to articulate and project what your brand stands for and empower mutually beneficial, memorable experiences; values beget value.

* Brian Solis studies disruptive technology and its impact on business and society. This post is an excerpt from his recent article in Forbes.com.  He may be reached at brian@briansolis.com and @briansolis (Twitter). 

Friday, May 15, 2020

The Value of a Value Proposition [11]

One of the most critical challenges for organizations is to differentiate themselves from competitors. It is easy to be like everyone else but great companies have their own identities and carefully conceived value propositions. Realize that different isn’t always better, but better is always different!

Think about the following 5 questions (and answers)

1. What is a customer value proposition (CVP)? How does it differ from a mission and vision, slogan, or positioning?

A value proposition is a brief but powerful statement of overall business strategy, such as Lexus’ ‘passionate pursuit of perfection.’ It is the company’s promise to the customer. It should be clear, concise, comprehensive and company-specific. A well-designed CVP is a strategic business tool that considers customer needs and wants, offerings, pricing, promotion, channels, and  a competitive advantage via people, processes and technology. Mission statements explain what the business is doing today while vision statements are forward-thinking. Slogans are creative advertising phrases that capture attention. Positioning may be product- or image-based and relate to designing and delivering value to target markets.

2. How about some great examples of customer value propositions?

  • Amazon.com and you're done
  • Citrix Systems - work anywhere and on any device
  • FedEx - when it absolutely, positively has to get there overnight
  • Gillette - the best a man can get
  • Intel inside
  • Office Depot - taking care of business
  • Target - expect more, pay less
  •  Uber - the smartest way to get around
  •  Visa - it’s everywhere you want to be. 

3. How should managers build a customer value proposition?

Customer value consists of four core components: service, quality, image and price. These elements provide the basis of an organization’s value proposition. The S-Q-I-P diamond can be used to create value for customers, establish a solid business philosophy for the organization, guide strategic decisions and, ultimately, affect business performance. The vertical axis on the diamond — service and quality — represents the backbone of the firm’s offerings, while the horizontal axis — image and price — provide signaling/communicating cues to the target market. The key is to select one or two dimensions to dominate and stay competitive in the other areas. Examples include ‘where shopping is a pleasure’ for Publix’s service; ‘solutions for a small planet’ for IBM’s quality; ‘what can brown can do for you’ for UPS’ image; and ‘always low prices’ for Walmart’s pricing.

4. How does a customer value proposition relate to competitive strategy?

According to Treacy & Wiersema’s influential book, ‘The Discipline of Market Leaders,’ companies can excel by practicing one of three business strategies: best product like Nike’s product leadership, best deal like Target’s operational excellence, or best friend like Nordstrom’s customer intimacy. Innovation, process efficiency, low cost and relationship building are key in implementing value-based strategies.

5. How can organizations improve customer value propositions?

Current CVPs can be enhanced via innovation and adding value. Think about offering legendary customer service like Ritz-Carlton, cutting-edge products like Apple, unique customer experiences like the Virgin Group or pricing innovations like eBay. There are many ways to add value, such as adding benefits, branding, breaking ‘accepted’ industry rules, customization, dominant merchandise
assortments, frequency marketing programs, hassle reduction, internet options, segmented marketing, solving problems, supply chain management or technological superiority.

This blog post is the 11th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .    



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Magical Marketing - Houdini's Secrets [13] *

Harry Houdini, born Ehrich Weiss in 1874, dazzled American and European audiences with spectacular magic and illusion feats until h...

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