Brand Autopsy

Customer Loyalty? Think High-Touch and Not High-Tech

As a part-time cynical marketer, I have ridiculed nearly every customer loyalty program that I have seen. I turn a super critical eye to customer loyalty programs from retailers whose marketing departments seem to be more energized by using high-tech means to build relationships with customers, than by using high-touch means to building enduring relationships with customers.

Retail marketers need to think high-touch and not high-tech to build loyal a loyal customer base.

For years, Starbucks Coffee has used high-touch methods to build and maintain a loyal customer base. In his book, “Pour Your Heart in It," Howard Schultz, in supremely succinct fashion said, “If we greet customers, exchange a few words with them and then custom-make a drink exactly to their taste, they will be eager to come back.” That is the true description of a high-touch way retailers can connect with customers to build enduring loyalty.

But the high-touch way requires companies to trust their employees to be human and to execute by connecting on a personal level with customers. And, too many companies are afraid to place that much trust and responsibility in the hands of their frontline employees. So instead of tapping into the human element to build enduring relationships with customers, companies seemingly compromise by turning to high-tech ways to create loyalty programs based upon reward cards that focus more on the value of lower prices than on the value of human relationships.

What is a retail marketer to do? How can they begin to design a high-touch program to build a more satisfied and more loyal customer base?

Be Nice. Be Clean. Those four words are all a retail marketer needs to know to begin building a program designed to create a more satisfied and thus more loyal customer base. Of all the customer satisfaction surveys for retailers that I have seen, nearly every one has listed clean store and friendly staff as two major attributes for developing a more satisfying customer experience.

Now, any customer loyalty initiative based upon Being Nice and Being Clean will require that the Marketing department connect with their Operations Team. After all, it is the retail employee who will be responsible for executing any high-touch customer program and the Operations team will most likely be the conduit to reach the store employee.

For 2004, I hope that retail-focused companies rely more on designing high-touch ways to build a loyal customer base and rely less on designing high-tech ways to connect with customers.

Is this loyalty or bribery?

I cringe most times I read Brandweek and Adweek these days because the marketing campaigns and brand partnerships they write about seem mindless and meaningless. For example, a few weeks ago I read about Pizza Hut’s inaugural consumer loyalty program called "VIP". (VIP as in Very Into Pizza.)

The program works like this… a customer pays $14.99 to join the Pizza Hut VIP club for a year. Then for each home delivery or carry-out order of $10 or more, participants will be rewarded with a free large pizza (up to two free pizzas per month). And, just for participating, VIP members will receive one free order of baked cinnamon sticks or breadsticks. (Members will not automatically receive their free cinnamon sticks or breadsticks with an order. Nope. Instead, they will be mailed coupons to redeem with their subsequent orders from Pizza Hut.)

This VIP program is only in test mode, but does Pizza Hut really think it will build customer preference for their pizzas by essentially bribing customers to choose Pizza Hut?

I’d like to think that a more enduring way to build consumer loyalty for Pizza Hut would be to focus on making a better pizza or improving some aspect of the customer service experience (faster delivery time, improved in-store experience/home delivery experience, or better telephone etiquette when placing a delivery order.) Instead, Pizza Hut seems to be focusing on bribing their customers to be loyal.

Am I being too much of a marketing gadfly and missing how this program is going to build sustaining customer loyalty for Pizza Hut? Tell me I’m wrong in my thinking.

Santa's Deja Vu

I can see ol' St. Nick now... flying over our housetops... dropping off loot for good girls and boys... I wonder if he's doing a double-take at some of the items in his bag. Some of these 'new' toys look very similar to some of the things he dropped off in the '70s and '80s (and earlier)!

Over the past several years, I've been pleased to see the come-back of toys, movies, and objects from when we were kids... It's the stuff WE and our younger brother's and sisters played with.

These include:

• Shrinky-Dinks
  
• Schoolhouse Rock - now a Disney property, a new generation can learn how bills become law and about how the number zero can be considered a hero! (I admit I bought the DVD collection!)
  
• Care Bears
  
• The Incredible Hulk
  
• Mattel's Electronic "Classic Football" game - the little red dashes and beeps and chirps from 1977
  
• Mattel's Electronic "Classic Baseball" game
  
• Atari Classics 10-in-1 TV Games - from Pong to Adventure to Missile Command

What's old is new again.

Here's my theory...

I was born in '69 and it seems like many folks "our age" (a range between 30 and 40-ish) have progressed to a point in our careers where we hold influential roles within our organizations. We’re bringing back stuff we appreciated from our childhood.

While some games and toys haven’t gone out of production, they are being re-packaged in their vintage looks featuring original graphics, game pieces, etc.

While out shopping, I have seen old-tyme versions of classic games like Monopoly (the 1935 commemorative edition), Sorry, Operation, Parcheesi, Clue (from the ‘50s)...

Now if they’d just come out with the Six Million Dollar Man again… I’d love to get an Oscar Madison doll with the suitcase that would look like it ‘exploded’ if you opened it the wrong way.

Happy Holidays!

Paul

Product Anti-Placement... can it be far behind?

Contrarian marketers take note… Bob Odenkirk (Mr. Show with Bob and David and The Ben Stiller Show) sarcastically commented in a recent Adweek article about where he thinks the future of product placement is going. (I think Bob maybe onto to something.)

Product Anti-Placement
“That’s when you go to Subway and get them (Subway) to pay you to have McDonald’s in the movie and say how bad McDonald's food is”

Bob Odenkirk
(Adweek, 12.15.03, pg. 8)

A Hugely Profound and Evocative Branding Statement

A LEADING BRAND SHOULD PROMOTE THE CATEGORY, NOT THE BRAND

I was reminded of this "branding law" from Jon Strande who sent me his book summary of The 22 Immutable Laws of Branding (Al Reis and Laura Reis).

I find this “branding law” to be hugely profound and extremely evocative. Any emerging, mission-based company should heed this calling and not be tempted to stray from this law.

The brandscape is littered with companies that have violated this law and and have ultimately fallen from prominence. There are successful brands out there today that need to heed the calling of this law to avoid a painful fall. MTV and Krispy Kreme immediately come to mind.

MTV long ago stopped promoting the category of music videos and instead focused on promoting the MTV lifestyle experience. (Besides during TRL, when does MTV play music videos?) Admittedly, MTV is still successful but they have ceded their music video dominance and allowed FUSE, an upstart startup, the opportunity to become recognized as the more authentic leader in delivering music videos to viewers. I am not saying that MTV is dead. I am saying that MTV has violated the “law of category” because they egotistically promote the MTV brand and not the category of music and music videos.

Krispy Kreme is another company that is heading into dangerous territory by promoting the Krispy Kreme brand and not promoting the category of high-quality donuts. Yes, Krispy Kreme is successful but they are jeopardizing their future success by warp-speeding their evolution from supremely promoting the category of super-premium donuts to egotistically promoting the Krispy Kreme experience.

Once again, a leading brand should promote the category and not the brand.

Fee Fi Faux Forces

Tonight while scanning the news I came across a photo in the news photo gallery of Reuters that showed an innovative solution to reduce speeding. Mexico's Federal Highway Police are making their highways safer by creating fake speed traps using two-dimentional police car 'billboards' on the highway. They intermix real speed traps with the replicas to save money.

This reminds me of the deceptions used during World War II called Operation Fortitude where inflatable tanks and airplanes were used to confuse enemy forces. Reconnaissance aircraft pilots couldn't tell the fake from the real. This could mis-represent the size of a military force or (as mentioned below) divert the enemy from the actual army.

While searching for a link for inflatable tanks, I came across this story about a British magician, Jasper Maskelyne. During the second World War the military used his master of illusion skills to help defeat the German army in north Africa. Interesting too there is a movie coming out about his story called The War Magician.

Note: While researching the title 'The War Magician' on Amazon I found an out of print book that the movie will be based on. However if you read the customer critiques of the book, it sounds like others were involved in the illusions and Maskelyne has potentially received more credit than he actually contributed - you be the judge)

Cherry Picking Consumers

For any retailer, especially a retailer in a commoditized retail world like the supermarket industry, Cherry Pickers (bargain hunters, professional shoppers) are not always perceived as your most attractive shoppers. A recently published research paper does not dispel this perception, but it does give retailers a better understanding of who Cherry Pickers are and how their shopping behavior differs from other types of customers.

The study authored by Wharton marketing professor Stephen J. Hoch and Edward J. Fox, a marketing professor at the Cox School of Business at Southern Methodist University, found that not only do these professional shoppers save money, but the savings are significant enough to offset the extra time it takes them to seek and find low prices. The authors argue that retailers should accept the fact that cherry picking happens and that they should focus on cross-selling and cross-merchandising tactics to encourage Cherry Pickers to buy more, higher margin goods. (Duh!)

For those who are time deprived, read this summary report from the Knowledge@Wharton email newsletter.

For those more academic minded, you’ll want to read the full research report.

Executives ARE Blogging

While researching information for a future blog on “Why Companies Don’t Blog”, I came across a NY Times article on executives that do blog. (Yesterday I wrote about Why Executives Don't Blog.)

The article briefly mentioned that blogging can be a minefield because corporate execs may expose trade secrets and get caught up in disclosure rules.

But that hasn’t stopped these executives from blogging:

Alan Meckler, ceo JuniperMedia (technology research firm)

James Horton, senior director at Robert Martson & Associates (public relations agency)

Tim O’Reilly, president of O’Reilly & Associates (technology book production company)

Christopher Ireland, ceo of Cheskin (marketing consultant firm)

John Palfrey, executive director at Harvard Law School

Ray Ozzie, ceo Groove Networks (software company)
In this post, Ray offers blog guidelines for employees of his company who choose to identify themselves as an employee of Groove Networks. An interesting read.

Why Executives Don't Blog...

A blog I wrote for FC Now got pinged and I got intrigued and stumbled across the topic of "Why Don't Executives Blog?"

In a recent blog, Robert Scoble expressed his dismay that executives are not blogging. When he asks execs when they are going to start a blog the usual answer he recieves is that they're too busy.

Sure, lack of time is an issue, but maybe this could be solved by "audblogging" -- an idea proposed by Phil Wolff.

Besides the lack of time, I see the following as major reasons why execs don't blog:

1. UNAWARE. Most execs outside of high-tech are unaware of blogs.

2. HUGE RISK FACTOR. Due to the viral nature of blogs, any comment from an exec could spread so far/so wide/so fast and if that comment was contrary or damaging to their company, then they would have some explaining to do. The potential for bad PR would scare off most execs from blogging.

3. TEMPTATION TO OVER-SHARE. Execs are fearful that they may over-share proprietary and confidential company information and with the wide reach of the web… competitors could be reading.

4. DON'T APPRECIATE THE VALUE. Execs do not appreciate the value of blogging. They have not learned that by engaging in conversation with the blog community, that they might learn something new or might gain inspiration for news ideas and new solutions.

5. BEHAVIOR NOT BECOMING. I bet that many execs would prefer not to engage in blogging simply because they would perceive blogging to be for underlings and not for senior leadership types.

I would classify myself as an executive and in the very short time that I have been blogging, I have been amazed at how much more I am on my game and engaged at work. In my marketing role I do not interact with a lot thinkers. Instead, I interact with a lot of "doers". So, blogging is filling my void for creative inspiration and creative thinking.

Is Your Company Closing the Gap? II

Curt Rosengren posted an interesting reply to this blog entry that bascially pointed out that there may be two aspirational gaps - "those aspirations that can be fulfilled in a concrete way and those that sell dreams and deliver a shell." Curt went on to ask, "does anybody else see a difference between these kinds of lifestyle aspirations, or is it just my own bias against the concept of people trying to shop their way to fulfillment?"

In other words, are there any differences between aspirational gaps that are “meaningful” versus “superficial”?

From a strictly marketing perspective I do not see any differences between the two. Both gaps, meaningful and superficial, tap into one’s emotions and that is a sweet spot for any marketer. Aspirations are all about emotions and any time a company/brand can make an emotional connection with a customer is powerful... no matter if it is meaningful or superficial.

Zingerman’s in Ann Arbor, MI helps folks actualize their aspirations to be a foodie.

Barneys New York helps folks actualize their aspirations of living a more glamorous and fabulous life (even if they have to max out their credit cards to do so).

Heck, even ESPN helps folks actualize their aspirations to be a sports know-it-all.

While I do not see any differences between a meaningful aspirational gap versus a superficial aspirational gap... how a marketer would go about trying to tap into those emotions from a creative and program perspective would be drastically different. But, that's another blog for another time.

Is Your Company Closing the Gap?

the following was first posted on the FC Now blog site on December 12:

Is Your Company Closing the Gap? The Aspirational Gap that is.

Ever heard of it? If you are marketing a lifestyle brand then you must do everything to close the Aspirational Gap.

A gap exists between a consumer's aspirations and their actual lifestyle. All consumers aspire to live a certain lifestyle but most times they settle for living a life below their aspirations. Successful lifestyle brands are designed to tap into people's aspirations and then offer these consumers a way to actualize their aspirations.

Customers who shop at Whole Foods Market seek to live a lifestyle that is healthier, more authentic, and more flavorful by seeking artisan foods and avoiding artificial ingredients, preservatives, sweeteners, and colors found in most mass produced foods. These customers aspire to live a healthier and more rewarding life and Whole Foods Market makes it easy for consumers to actualize their aspirations.

Go ahead, fall into the gap - the Aspirational Gap.

Welcome to Brand Autopsy

Paul and I began the conversation as guest hosts for the Fast Company blog (FC Now) during the week of December 8th. We had so much fun that we decided to continue the conversation on our own blog.

Paul and I go back to 1997 when we were both field marketers for Starbucks Coffee. I was in Dallas and Paul was in New York City. Two years later, we were both recruited to infuse some field marketing perspective into the corporate Starbucks marketing department. At the beginning of this year I left Starbucks to be the national marketing director at Whole Foods Market and Paul transitioned into a new position at Starbucks, customer care manager - focusing on increasing customer satisfaction.

I’m a bit of a marketing goad and some might even say gadfly while Paul’s approach is focused on creative thinking and designing marketing strategies that deliver great customer experiences. So expect some lively and thought-provoking discussion on all things marketing from two marketers with extensive experience in managing lifestyle brands.

Now, our opinions are not necessarily those of Starbucks Coffee Company or Whole Foods Market. Our discussions will represent our own take and what we've learned and experienced through our marketing careers. Void where prohibited. Not valid with other offers. No cash value. No purchase necessary.

Let's get to blogging!

John Moore, Baylor University

I'm just leaving my internet echo in case someone from my Baylor University days Googles me.

From the fall of 1988 to the spring of 1992, I spent my life studying radio/tv/film in Waco. I also spent far too many enjoyable nights at the closest bar to the campus, Bill Bill's. Ahh ... those were the days.

If you knew me at Baylor, contact me via email ... john(at)brandautopsy.com