Blurring of the Marketing/CRM Line

by Jeanne Roué-Taylor

There is a significant blurring of the line between marketing and customer relationship management.  This blurring has enormous impact on the way we operate our businesses and engage with our customers.

We need to stop thinking about functions and start thinking about fans.

Traditional silos

Traditionally, marketing has been about defining market segments and delivering offers while CRM was about knowing the fine-grained details of your accounts.

Even though we call it CRM, it has been, for most companies, about the sales funnel more than customer relationships; leads go in, revenue comes out.  Marketing sat above that funnel.

Expanding roles

Marketing is expanding and is less about segmenting the potential customers you don’t know and much more about finding prospects to know and interact with as marketers, before they enter “the funnel”. CRM, meanwhile, is being used to continually interact with customers in new ways of cross selling and upselling that used to look like marketing.  Where does marketing end and CRM begin? It’s very blurry.

Technology/strategy breakthroughs in recent years and changing consumer patterns allow each end of the marketing-to-CRM spectrum to continue to widen even as the difference between them blurs. This, in a nutshell, creates friction between applications, databases, departments, business owners, platforms, and ultimately prevents cohesive management of the spectrum.

Conflict

It manifests as battles over budget, politics over positioning, and conflict over control. It doesn’t have to be that way, and it isn’t for companies that recognize the benefit of seeing this spectrum as turning customers into fans.

Turning customers into fans must be the over-arching goal of any 21st century company that wants to stay relevant, build trust, open lines of communication and find success despite turbulence and a constantly evolving customer. Are you ready?

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Return on Relationship™: The New Measure of Success

By Ted Rubin 

Social media is quickly becoming a way of life… and a way of business as more and more companies are realizing they need to integrate social media into their marketing strategies. We can’t, however, expect to do “business as usual” and succeed in building an eager audience around our brands.

If you want to continue to reach your market in this social media age, the marketing focus needs to be on building relationships, and metrics need to expand beyond ROI (Return on Investment) to include ROR: Return on Relationship™.

–Return on Relationship™…simply put the value that is accrued by a person or brand due to nurturing a relationship. ROI is simple $s and cents. ROR is the value (both perceived and real) that will accrue over time through loyalty, recommendations and sharing.–

Most measurements and empowerment stats that are used with regard to relationships (i.e. number of Facebook fans, Twitter followers, retweets, site visits, video views, positive ratings and vibrant communities) are not financial assets, but that doesn’t mean they are worthless. Instead, these are leading indicators that a brand is doing something that is creating value that will be with you for the long term and will drive ROI if developed and used effectively.

So how do you build and strengthen relationships with your audience (as a whole, and as individuals) to increase your ROR?

1. Listen

If you want to be heard above the growing social media “noise,” you need to first listen to your consumers so when you do speak, you get it right. What are they saying, what are they feeling, what are their pain points, what solutions do they need?

2. Make it be about THEM

First think about and first address what matters most to your audience. Give them a platform to show you what they need, want, are interested in, and expect. Whatever matters most to them should become what matters most to you! We marketers like to think that social media is primarily a set of tools for our marketing purposes, but in reality, social media is also a strong set of tools our consumers use to share and influence opinion about our brand. Our consumers now have “the channel of me.” Consumers’ opinions now create the “reality” of the brand — if enough consumers say negative things about your brand, your brand loses its credibility, and (thankfully) vice versa.

3. Ask “How can I serve you?”

Taking the “ME” mentality one step further, when we are advertising instead of building relationships, we are focused on what our consumers can give us instead of how we can best serve them.

Your consumers will recognize in a heartbeat if you are simply trying to get something from them – and they will not stick around. It’s not that you aren’t allowed to want anything from your consumers, it’s that there must be a give to go along with every take. If you truly want to make an impact, aim to always put more energy and attention in your “give” column than in your “take” column. It will pay off.

4. Aim for Ongoing Engagement

Building relationships is about starting meaningful dialogue and taking the time to thoughtfully and genuinely engage in ongoing conversation. Relationships focus on getting to know your consumer and giving them reasons to stay engaged — not just getting them to react. This needs to be all the time… not simply campaign or initiative based. That is the biggest mistake being made today by marketers and brands… with consumers, and especially with influencers.

5. Know the People in Your Audience

Short and simple: if you are only focused on the money, you risk completely overlooking the people. Don’t make that mistake! If you don’t know who your people are, you might as well toss your marketing money down the drain.

Relationships ARE the new currency – honor them, invest in them, and start measuring your ROR!

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Meeting Your Customers Where They Are, Anytime, Anywhere

by Chris Taylor 

Many made predictions as 2013 kicked off, but one caught my eye. Forrester’s Nigel Fenwick called this new year the Year of Digital Business. As Fenwick points out, there has been a communications evolution that has many retailers scrambling to find ways to get closer to their customers with innovative new real-time marketing technology to beat the competition. Continue reading

Not Your Mother’s Holiday Shopping

Last week, Michael Greenberg, Loyalty Lab’s director of global solution strategy, penned an article in DM News about the holiday season. A veritable Superbowl for loyalty marketers, the holidays are, as Michael puts it, the time to “roll up our sleeves, cross our fingers, and set our plans in motion.”

Well, the dust has settled following Thanksgiving, Black Friday, and Cyber Monday. But the madness is far from over now that the holiday season is in full swing. Titled “Not Your Mother’s Holiday Shopping,” the piece details the ways in which loyalty marketers should be reassessing their strategies in order to stay ahead of the game —  specifically by putting a major emphasis on mobile, which has become a huge force in the commerce game over the past couple of years.

And, looking back on the opening shot of 2012 holiday shopping, it’s clear that Michael’s assertions about mobile are right on track. According to IBM, mobile traffic was up 28.5%, while overall online sales were up 20.7% from 2011. Mobile accounted for 16.3% of all online sales, with a 58.6%-41.4% split between mobile phones and tablets.

Convinced, yet? While 2012 may be rolling already, Michael’s top 5 tips for bulking up your mobile marketing strategy will have you well on your way to a killer season in 2013. His main points:

1. Don’t skimp on mobile development.

2. Stand out from the noise (and from the glut of mobile apps already out there).

3. Take an offensive and defensive position — protect your best customers while successfully going after your competitors’.

4. Ask your customers for feedback.

5. Start planning for 2013, on December 26.

Read about all of these in more detail over on DM News, and get geared up for next year! Pay extra attention to how your initiatives perform this year, and to what your competitors are up to. What does your holiday game plan look like? Tell us in the comments!

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Pharmacy Loyalty Programs: A Cure Sure to Make Customers Come Back

We have seen the changing face of airline loyalty, discussed the benefits of service-minded loyalty and dove into the lack of industry-wide wireless loyalty, but we have not yet touched on an industry that continues to see rapid loyalty growth.

The pharmacy health and wellness market is a lucrative one, expected to reach $170 billion by the end of 2012. Pharmacies such as CVSRiteAid and Pharmaca are by no means new to loyalty, but have recently been investing in programs with increased enthusiasm not seen in the past. Why have pharmacies become so loyalty-driven? Partly due to the numbers — customer spending and repeat shopping is on the rise.

Another driving factor is the ability to collect customer data through loyalty programs. When customers make purchases, pharmacies are able to track this spending. This enables them to offer personalized offers and rewards. Understanding where and how often customers are spending is crucial for growing loyalty, and for allowing pharmacies to remain competitive by better serving their customers’ needs. And, based on the positive numbers that pharmacies, Pharmaca included, are seeing, it looks like this personal touch has been the perfect remedy.

Pharmaca’s Feel Better Rewards program alone has seen a 50% increase in customers who are spending in both the pharmacy and store, with a 10% to 15% increase in spending per-member. This is not luck or the product of a growing industry; rather, it is the result of well-planned, thoughtful loyalty programs.

In today’s market, if you are not offering a loyalty program, good luck — you’re fighting a losing battle. Increased costs in healthcare and a weak economy have made pharmacy loyalty more effective than ever, bolstering membership and sales. When you have a loyalty program that delivers with increased customer spending and retention, it can be a boon for your bottom line.

It’s an easy choice from the customer perspective, too. Medical expenses can add up, but loyalty programs can help lesson this financial stress, making this approach a win-win for all parties. The customers feel valued and are saving money, while pharmacies and health and wellness stores are gaining better customer insight, increasing sales and retaining customers.

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But Does It Work? A Proof-Positive ROI For Pharmaca

We work with a number of clients who inspire us. Earlier this week, we spoke about Pharmaca’s new-and-improved approach to the pharmacy and health experience — a focus on natural products, a pleasant environment, and their Feel Better Rewards program, which allows customers to earn dollars back every time they fill a prescription or make purchases in Pharmaca stores.

But we build loyalty programs for a reason — to help grow businesses. And no matter how inspired we are by a company’s mission, we always have to ask ourselves, and them, is it working?

With the Feel Better Rewards program, the answer is a resounding yes. Since its launch about two years ago, the loyalty program includes 36% of Pharmaca’s customer base. 66% dollar-volume sales are on the program, and 56% of transactions go through it. What’s more, Feel Better Rewards has led customers to increase their spend at Pharmaca stores: more and more, pharmacy-only customers are crossing into retail, and retail customers have started filling their prescriptions through Pharmaca.

Specifically, Pharmaca has seen a 50% increase in cross-shopping customers, and the per-member spend has gone up across the board by 15%. Also notable — a 5.2% increase in prescription count, and a 9.3% increase in overall sales.

The numbers prove that this approach, both of Pharmaca and the Feel Better Rewards program, is working. But perhaps even more significantly, this loyalty program has given Pharmaca hugely informative insights into their customers’ shopping and spending behaviors. In addition to using this information to better grow their offerings and become even more profitable, Pharmaca is able to tailor their services to what their customers want, and need.

That desire, coupled with a proof-positive ROI, is what sets Pharmaca apart, and makes them a pleasure to do business with.

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A Look at Mobile — Why Don’t More Carriers Have Loyalty Programs?

Loyalty programs are nothing new. If anything we are approaching an era where loyalty stretches far beyond traditional rewards and offers. We have seen the new and innovative ways companies like Virgin America are rewarding customers with Elevate, and even Thrivent Financial has found its own unique niche through its service-minded Thrivent Choice.

Why, then, with all of the information and positive examples out there, have some industries been slow to jump on the loyalty bandwagon?

With the exception of U.S. Cellular, the first wireless company to offer a loyalty program, wireless is one industry that has been hesitant to take advantage of the benefits of loyalty. This is counterintuitive, considering the makeup of wireless companies screams loyalty.

The way that contracts are structured, upgrades are offered, and overages are charged has a history of frustrating customers to the point of no return. Switching providers is a fairly straightforward process, making it easy for customers to flip-flop from one provider to the next when dissatisfied. All of this combined makes for one unstable customer base. But what if a loyalty plan could turn these traditional wireless experiences around? Well it can, and it has — for U.S. Celluar at least.

U.S. Cellular’s Belief Project has been able to achieve what other wireless providers struggle to grasp — satisfied, happy customers who feel appreciated. Not being forced to sign another contract after the first two years doesn’t hurt things, either.

Other wireless providers are starting to take the hint from U.S. Cellular and are considering integrating loyalty into their programs. It’s about time! According to a recent Pricewaterhouse Coopers survey, the average length of postpaid customer relationships has declined to 48 months, down from 59 months in 2010.  Customer retention is flailing and AT&T is a provider that has decided to take action by testing a new AT&T ‘Plus’ loyalty program. This is one in what will hopefully become a trend of loyalty programs popping up in wireless.

The point is, customer loyalty is there for the taking. It is a proven method for attracting and retaining customers. If you are in an industry where customer turnover is high, then consider how a loyalty program can set you apart and positively impact your retention rates. After all, as we all know, the benefits of keeping a long time customer far out weight a new one. It’s worked wonders for U.S. Cellular. Maybe it’s time for your provider to consider the possibilities that loyalty has to offer.

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Customer Testimonial: U.S. Cellular’s Choice Program Works With Me, Not Against Me

It all started with a ski trip. I was up at Heavenly in the Sierra Nevada Mountains with a group of friends, getting set for a day of shredding the slopes and carving out some powder. It was snowing that day, seemingly harmless little flurries. Then we boarded the chairlift up the mountain — the flurries turned thick, coating the strands of my hair until it turned icy.

mobile

“No way other way to get down!” we said cheerily. I patted my phone, safely zipped (or so I thought) in the pocket of my coat. Pointing my skis downhill, I sped off — and promptly face-planted in a swiftly growing snowdrift. Spitting the snow from my mouth and wiping off my goggles, I tucked down the mountain, already anticipating a hot beverage.

It was there, over a much-deserved winter drink, that I realized that my phone was gone. My zipped pocket sat tauntingly half-open. “Ugh,” I thought. “Here comes another two-year contract.”

I was spot-on with that prediction. My provider at the time said that, in order to get a new phone on my current plan, I would have to sign on for another two years. Otherwise, I would have to pay an exorbitant fee to break the contract. I’d been planning on doing this as soon as my current contract had run out — until my ill-fated ski trip and my sudden need for a new phone. What’s more, I had been anticipating upgrading to a phone that was being released in about a month — this forced me to settle for the same model I had lost.

That’s where the providers get you. They know you need your phone, and they know you need it now. I sucked it up that time, but as soon as that contract ran out, I left my provider and moved on to U.S. Cellular. I’d read about the launch of their Belief Project, that allowed users to break free from the two-year contract system after signing once. Once! That’s all that was needed to prove that I was a loyal customer. My old provider had forced that new contract on me after I had been a customer for years.

U.S. Cellular makes me feel like they actually value my business; it’s a nice change from feeling forced to stay. I earn points through the Belief Project, and even used them to update to a cool, new smartphone shortly after it was released. I had a particularly heavy texting month recently, and used points to soften the overage charge. Thanks to the Belief Project, I finally feel like I have a mobile provider who’s working with me, not against me.

Oh, and my next ski trip? I’m putting my phone on the inner pocket of my jacket. The snowdrifts won’t have me beat, this time.

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U.S. Cellular’s Belief Project — Making Us Believers in Mobile Loyalty

When it comes to loyalty programs, it seems like a no-brainer that a mobile provider would want to reward its loyal customers. Because these days, it’s basically a given that everyone has a cell phone. And in the U.S., going the pay-as-you-go route is a rarity. We have family plans, two-year contracts, and obligations to stick around if we want to upgrade to the coolest new smartphone — at least, if we want to avoid massive contract-breaking fees.

So it’s hard to believe that U.S. Cellular’s Belief Project, a rewards program that actually benefits its loyal customers, is just two years old. And beyond that, the Belief Project really was the first of its kind.

The Belief Project’s components still feel fresh. Customers are required to sign one two-year contract — once. After that, they are free to switch to paying by the month, allowing them to terminate their contract should something change.

What’s more, switching to the month-by-month option doesn’t prevent members from accessing the rewards that U.S. Cellular has to offer. Actually, just by opting in to the Belief Project, you automatically earn points. The longer you are a member, the more points you earn; you’re even gifted points for your birthday.

And these points are actual valuable entities, something any customer stuck in a frustrating mobile plan can appreciate. You can use your Belief-earned points to add a line to your plan for free; to buy fun ringtones and ringback radio subscriptions; to set up a voicemail-to-text service.

Most significantly, however, you can apply points towards overage forgiveness, and to upgrade to a new phone whenever you’d like. Gone is the frustration of being stuck with your old-school Blackberry, or even a (gasp) flip phone for an extended period of time because you’re forced to wait out your two-year contract. And, your phone upgrade doesn’t necessitate a new contract.

It’s refreshing that U.S. Cellular has made serious efforts to earn its customer’s loyalty over these past two years — rather than forcing them to remain with them by making contracts a necessity. For an industry such as mobile, this kind of consideration and appreciation for loyalty is all the more stand-out — if everyone has a cell phone, many people will end up suckered in to a plan that is not beneficial to, or conscientious of, their needs.

At least, customers not with U.S. Cellular. Their Belief Project has made believers out of us, and has set the standard for loyalty in the mobile space.

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The Thrivent Community: Loyalty From the Heart

We have seen the impact loyalty programs have on consumer participation and retention. Over the years, programs have been successful focusing around offers and rewards that pull the consumer back in for more. Holding the proverbial carrot over their head; enticing them to remain loyal so they can continue benefitting from deals. But is there another way? Can you create deep rooted loyalty without the constant give and take?

A number of organizations believe that you can.  We’ve spent time this week talking about Thrivent Financial, and how they have managed to successfully cultivate this brand of philanthropic loyalty. What’s particularly impressive is how much of an impact they’ve managed to have considering they were founded in 2001. Within this brief time they have managed to develop a devoted membership of more than 2.5 million. How? Through a strong chapter oriented program that is deeply invested in the unique communities of its members.

Thrivent has a broad stretch of influence focused on building, enhancing and maintaining strong communities, thanks to those members’ involvement in local community chapters (1,336 nationwide). And then there are the personalized benefits, like Thrivent Choice, which we discussed as a prime example of ways to directly involve members, and reward them by giving them the opportunity to give back.  With the power to influence the allocation of more than $100 million to benefit people you know in your community, you can imagine the loyalty this can garner.

This concept of developing loyalty at the grassroots level is undeniably gaining traction. Building relationships with members from within a community by personalizing the loyalty experience at its core has its benefits. After all, what solidifies a relationship more than helping build a Habitat for Humanity home in someone’s community, or funding their neighbor’s child as they undergo treatment at St. Jude’s Children’s Hospital? Sometimes the greatest form of loyalty is created through the investment that is made in one’s own community by a complete stranger.

A study by The Center for Philanthropy shows that charitable giving in the United States totaled almost $300 billion in 2011 and is on the rise from 2010. With numbers like these it’s interesting to find only 5% of corporations participate in charitable giving each year. There is a gap in the philanthropic loyalty market that Thrivent Financial has taken the first stab at filling. Clearly there is room for further growth with statistics to back it up. According to Cone Cause Evolution, 79% of Americans say that charitable giving does have an impact on their product choices. When price and quality are close to equal they will likely switch brands if one is associated with a good cause.

In many ways this is an untapped variation of loyalty that has gone overlooked by a vast majority of corporations. It worthwhile to consider including philanthropic benefits to your loyalty program. Just take a look at Thrivent Financial who built their loyalty foundation on this basic principle – “we succeed when our member’s communities thrive”.

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