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CX: The Art Behind the Science

May 08, 2019

Sam Richardson

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CX measurement software has made it possible for virtually any company to collect feedback from its customers and distribute it to the organization. The efficiency and scalability of customer experience input has been welcomed by CX practitioners and insight professionals – attracting multi-billion-dollar valuations and acquisitions. While this has been a positive development for the CX discipline, many companies have not realized the Customer Experience and financial gains they expected. Why? Because technology alone is not enough to drive results. Here’s a few reasons why:

It Takes More than Tech to Maximize the Value of CX

Measuring and understanding Customer Experience (CX) can be as much of an art as a science, something lost with a “tech-only” approach.  Technology is a tool in the process and an indispensable one, but in and of itself it’s not enough to maximize the value of CX for companies and brands.

What do you lose?  A lot. This “one-size-fits-all” approach means you give up the ability to evolve and customize your program right out of the gate and as the market changes.  Behind the tool there is, or should be, an advisory process that helps fine-tune questionnaires, integrate the data, and apply the appropriate analytics for each brand’s specific needs.  A  tech-only platform puts a heavy burden on the company, which may or may not have the internal resources to follow through. The result is an incomplete picture of the customer journey.

What, not why

Technology platforms are built for operational customer experience management. They’re fast and effective at providing feedback to managers in the field.  But they lack the strategic dimension that a knowledgeable insights firm brings to the task. They talk only to current customers ( “during” the journey), and fail to capture data on the “before” and the “after” of the customer experience.  They don’t have the capability to incorporate the longer-term influences of ‘brand’ in the process, and brand, as we have repeatedly seen, is a critical element in influencing buying decisions.

The result is that the  operational CX program delivers little or no insight into the company’s potential customers and their movement along the customer journey. This translates into lost sales.  Much the same is true of former customers: there’s no ability to answer the critical question “why”?  Why are they no longer customers?  Could something have been done to prevent their defection?  Is there an offer that would potentially win them back?  The platforms can identify who is no longer a customer but the critical insight into the motivation behind the churn is lost.

There is also the question of “future proofing.”  A tech-only platform will only evolve so fast in keeping with broader market demands.  CX measurement software firms   are reluctant to make changes just to accommodate a single user.  Once again, companies are forced to rely on their own internal resource to address versioning issues, another example of how what is billed as a relatively simple solution can quickly spiral into something much more complex and demanding.

Data is everywhere

At this point, capturing CX data is no longer an issue for most companies.  Platforms in place are delivering massive amounts of information to brand teams and marketing managers in something approximating real time.  Maximizing the insights derived from that data will separate companies that are capable of delivering an exceptional customer experience from those that are just average. That can’t be done with technology alone.

Brand Health Measurement: Developing Your Brand's Core Strength

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Brand is back

April 29, 2019

Sam Richardson

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For marketers, tactics often trump brand as companies seek new ways to track and activate short-term sales.  There’s nothing wrong with that; we’ve written extensively on the benefits of omnichannel path-to-purchase analytics in this regard.  But it does overlook one key point: when investing in communications, a strong, sustainable brand is a critical component in generating long-term sales.

So you just can’t ignore brand.  CMOs are recognizing this, according to a report from Forrester, with half now saying they plan to bring brand back as a top .  That would be a big change. The current share of market spending for tactical vs. brand is 72%/28%, while an (Field and Binet – 2017).  There’s plenty of evidence that the failure to support brand can hurt both short-term sales and the brand itself. For example, an electronics retailer that reduced its above the line spending in brand-related media by about 30% saw sales fall by 9% while the value of brand fell by 18%.  An unfortunate result all around.

In reallocating resources in the direction of brand there has to be a plan, and it has to be based on data and an understanding of how brand impacts both long- and short-term sales. That means having well-defined ownership of media and putting in place a platform to continuously measure KPIs, including brand, that allows you to isolate the impact of brand and connect it to long-term sales.  Media Mix Modelling (MMM) can be a good tool for this when brand health measurements are associated with media spend to provide insight into the best places to put money to support brand development and sales.

Through years’ of marketing analytics experience, including MMM, we’ve found that some media tend to have greater impact on brand than others – TV and web TV, to name two (where there’s time to tell a story) – while search and banner ads are much less effective.  At the same time, short- and long-term strategies will produce a different set of media priorities.  But what really matters here is ongoing tracking of the impact of each approach on brand and sales to see which delivers the best results over time.  You can’t optimize what you don’t measure.

We’ve done the tracking, and here’s what we’ve found: while both approaches can improve sales, the monetary value of the long-term, brand-oriented approach can be much higher than that of a short-term approach that focuses almost exclusively on activations.  Short-term tactics drive online and store sales, but fall short in longer-term, brand-driven sales.

A lot of resources have been dedicated to short-term activations, in part because the result is immediately apparent and easy to measure. The effect of brand is more difficult to capture, but longer lasting. But when you track brand impact more closely it quickly becomes clear that investing in brand works.  The bottom line: brand is back.

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Catch the Second Wave

April 10, 2019

Wave

Sam Richardson

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When digital commerce began its ascent, it looked like we were living in a binary world: Online vs. offline, with the smart money mostly on the former.  In the first wave of Omnichannel (more like a “dual” channel), Amazon was going to take over the brick and mortar universe as all commerce went digital.

It turns out that this view of the world was a little simplistic. Brick and mortar retailers were seriously challenged, and some disappeared if they were unwilling or unable to adapt. but they didn’t all disappear.  Shopper behavior evolved away from this “either/or online/offline” framework to something more dynamic and intertwined.  For example, Amazon started opening physical locations and bought a grocery chain with hundreds of stores. Some brands became retailers, marketing direct to consumers and seeking to own the sales channels to shoppers (and the first party data that provides).

Shoppers researched items online and went to the store to buy them, and vice versa. They went from websites to Instagram to check out influencers and back to a third-party website for a price check. Having looked at a dress, they responded to an email offer of a swatch sample to get a feel for the fabric, and then went to the store to try it on.

All this activity is giving rise to what we call the Second Wave of Omnichannel. Now the framework is no longer “either/or;” “it’s either/and.”  This scenario recognizes that the path to purchase has become infinitely more complex, as has the challenge of measuring and understanding shopper behavior across all the touchpoints that  influence buying decisions and brand perception.  Many retailers and CPG companies have yet to understand the full implications of this new phase and what it means for marketing strategy and measurement.  One reason: Measurement in particular often remains siloed in organizations, with one group tracking digital and another responsible for more traditional marketing mix metrics, for example.

This approach doesn’t fully appreciate, or capture, how the world has changed.  A better way is to adopt a whole new perspective – the shopper’s – and to track the omnichannel path to purchase (P2P) from his or her point of view. This allows you to collect data on all the touchpoints along the way – including digital, social, in store, out of home and more – and quantify their impact on purchasing decisions.  It also puts all behaviors and need states in context. For example, you’d learn that when someone who goes to a website, looks at a product, and doesn’t buy it there, that doesn’t necessarily represent an abandoned sale.  The shopper may have completed their online research preceding a purchase in a physical store. An omnichannel P2P measurement approach has to be able to close the loop on purchases, no matter where the purchase happens.

As the Second Wave of Omnichannel keeps rolling, many organizations are looking for a way to accurately understand the entirety of shoppers’ behaviors while distilling the data into actionable insights that drive strategy, tactics, and profitable growth. Embracing the “either/and” framework opens the door to a better understanding of what matters most shoppers and to your bottom line.

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Thriving in a Transformational Time

April 09, 2019

Sam Richardson

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This year’s Food Marketing Conference at Western Michigan University focused on the ongoing transformation of the industry, which is being driven by the maturation of omnichannel shopping behaviors and expectations. Below are some important takeaways that resonated with me during my time at the conference:

1. Learning isn’t hard; forgetting the old ways of doing things is hard

The fact is, the new realities call for lots of letting go. Among the most important things to forget? Thinking that (a) “channel” comes before “shopper,” (b) today’s competitors are your biggest threats, and (c) your brand is tied to a specific physical product. As an example of this last item, one alcohol beverage company is riding the wave of cannabis legalization by transforming its purpose to “mood management.”

2. There’s a big difference between digital sales and digitally-influenced sales

The first may be small for many brands, and the second may be large. Today’s omnichannel path to purchase (P2P) creates many interactive touchpoints, with instore and online research and purchasing influencing each other. As a result, many ecommerce teams are misreading shoppers’ online research as missed sales when they are actually a purposeful part of the P2P. Understanding this interaction is critical to mastering the omnichannel P2P.

3. The Customer Experience (CX) grading curve isn’t the same as the academic grading curve.

The speaker’s example: 99 – 100 = A; 96 – 98 = A-; 93 – 95 = B; 91 – 92 = C; < 91 = F. He further suggested that this “Tiger Mom” scale is going to further tighten as shoppers raise their expectations based on the best customer experiences they encounter. If you’re not creating better and better customer and brand experiences, you’re falling behind.

4. Know whether your Brand is in line with the experiences your customers are expecting

Customer Experience is the new Brand, and vice versa. Brands are becoming retailers through direct-to-consumer platforms, and retailers are becoming (stronger) brands through their own-label products and an increasing array of services, like delivery. Brand equity is created – and tested – through every experience in which consumers and shoppers experience the brand. Is your premium brand is found in off-price stores, that’s a disconnect. And if your “better for the environment” brand is advertised on a show or network that downplays the risks of climate change, that’s a disconnect, too.

5. When it comes to omnichannel, are you all in, or just all over the place?

As businesses accelerate and execute their omnichannel strategies and tactics, there’s often more emphasis on activation than integration. Make sure your efforts are coordinated and evaluated holistically. Being “all in” in omnichannel means seeing it and building it from the shopper’s perspective, making the most of each touchpoint, and knowing which ones matter most to shoppers and your bottom line.

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Lessons From Retail Smarter 2019 – University of Florida

April 05, 2019

Sam Richardson

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Occasionally it’s good to go back to school. Last week, I had the opportunity to attend Retail Smarter 2019 at the University of Florida in Gainesville. As we read about the retail apocalypse, with as many as 5,800 stores already scheduled to close in 2019, it would be easy to say that retail is dead.  After a few days discussing with leading academics and experts, it’s clear that retail isn’t dying – it’s just changing.

Challenges today bring about opportunities for retailers to be on the forefront of innovation. Here are my four key takeaways from experts in topics spanning trends, best practices, technology, e-commerce, customer experience and HR:

1. Kim Kaupe, Co-founder-The Superfan Company, brought a unique take from a sport’s perspective. It’s all about the “SuperFan.” Reviews are good, but “braggable” and “Instagramable” moments make a strong personal connection that makes a recommendation real.

2. Jake Annear from Louis Vuitton/Moët Hennessy focused his conversation on consumer and customer driven insights.  His perspective – there should be no decisions made without consumer/customer inputs.  Some memorable comments included:

  • Often retailers try to “drive the customer strategy” instead of letting the customers dictate the future.  A great example of that is where retailers try to push customers online, rather it is more important to just make the omnichannel experience exceptional.
  • Avoid timed communications. Too often we focus on frequency of communications, when really we should be focused on tailoring the offer for the customer’s needs. There are billions of conversations between brands and consumers on an annual basis (CRM, Social Media, Interactions), but very few of them are truly engaging.

3. Kevin Moffit, Chief Retail Officer at Office Depot, stated that they have to go beyond being just an office supplies retailer by becoming a place that serves to inform and educate their small business clients to help them succeed.  Furthermore, he emphasized that organizational change shouldn’t (and in their case doesn’t) come just from the top. Rather, the change must come from the front-line employees and the rest of the team as a whole.

4. Finally, Steve Knopik, Chairman & CEO at Beall’s Inc., had one of the most insightful statements regarding the Death of Retail; “While stores and retailers are facing some fundamental challenges, no industry has seen more disruption in the past 50-75 years, yet retail is still alive.”

Overall, it was a great week of insights from significant thought leaders in the industry. We’d like to thank University of Florida Warrington College of Business for a great event and we hope to see you at Retail Smarter next year!

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Omnichannel Revolution Requires New Marketing Measurement

April 04, 2019

Sam Richardson

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The new solutions that help marketers thrive

Marketing measurement and analytics needs a new playbook. Learn how understanding the new omnichannel Path to Purchase and a revamped Marketing Mix Modeling strategy can tee up your organization for success in today’s omnichannel environment. Enjoy the following sections:

– Looking beyond traditional methods and metrics to map a better understanding of the shopper journey

– A shopper-centric approach to understanding the omnichannel Path to Purchase

– A better understanding of Marketing Mix Modeling, which has had a breakthrough of improvements powered by advances in technology and data integrations

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When Season Ticket Holders Don’t Renew

April 02, 2019

Sam Richardson

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Getting repeat customers is the holy grail of most businesses, and what’s better for that than a sports fan and season ticket holder? Fan loyalty is huge, and for many franchises tickets are hard to come by. In some cases, families pass them down from generation to generation. So when fans stop renewing it suggests something is going seriously wrong.

What does it take to drive these people away? Losing games isn’t usually enough. In fact, some of the worst-performing teams have some of the most loyal fans. For these folks a game is more than a game – it’s a social event, it’s a part of who they are. Most realize that teams will have their ups and downs and they’re willing to tolerate that, even when there’s more downs than ups.

But there are other aspects to the fan experience besides on-field performance, and they can alienate even the most loyal of customers. For management, the question is: how do you identify these issues?  How do you know what’s motivating your fans? What circumstance or combination of circumstances finally drove them away? Answer:  you have to measure it.

Fan Experience (FX) is the new battleground

The reality is that Fan Experience (FX) is the new battleground in sport.  Every sports organization needs actionable Fan Intelligence to compete and to maintain and build loyalty.  Questions management needs to ask (and answer) include:  what are fans saying online and in the stadium? How does that correlate with ticket purchasing?  With stadium behaviors? What are they saying about the food, the concession stand lines, the cost of tickets? And these need to be answered in as close to “real time” as possible.

Today’s CX technology allows sports teams to track fan reactions and the path to purchase across multiple channels and to correlate the data with business outcomes. It provides tools for understanding what works and what doesn’t and for quickly moving that information to the place in the organization where it can have the greatest impact. It has an Artificial Intelligence capability incorporating predictive behavior analysis to anticipate future fan needs.  All of this  reflects a simple principle: loyalty is built when management responds to customer issues – whether that’s at a department store or on the soccer pitch.

CX program gives better understanding

And this doesn’t just apply to season tickets. Sponsors are looking for better ways to measure their investments in on-field, broadcast and online advertising. They want to know the ‘true’ value – in dollars – of their sponsorship. They want to know how the fans react, and they want to see the numbers. A CX program can provide the framework essential to this understanding.

One recent example illustrates the point. Nepa was brought in by a sports franchise for purposes of sponsorship validation. We used multi-channel research (social media, TV, digital) along with traditional surveying to analyze and measure the impact of sponsorship on fan buying behavior. In this instance we found that the franchise was charging just $100,000 for a sponsorship that was delivering value worth more than $500,000.  A lot of money was being left on the table.

In another instance, our Sports Optimizer platform gave a franchise the ability to directly connect with its supporters and  gather feedback from thousands of regular fans and high value season ticket holders. Through this, we identified new ways for sponsors to interact with fans inside and outside of the stadium. And with real time analysis throughout the season, the team’s business management team could track progress after each home game. The result was a $1.3M increase in sponsorship value and an 18% boost in season ticket renewals.

In the past, teams mostly measured in-game exposure to signage and TV viewership and called it a day.  But now the competitive stakes have been raised.  For many franchises, it’s time to re-think the fan engagement process. A good way to get started is to establish a benchmark from which to measure progress for your organization in all areas including fan experience, retail and hospitality optimization, and sponsorship valuation. This can help identify problem areas and open the door to actionable and revenue-drive solutions.

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Empower Employees Win Customers

March 20, 2019

Sam Richardson

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Win in the Age of the Customer with Empowered Employees

Learn how measurement and analytics can lead a winning customer strategy by empowering employees with the information that matters most to meeting customer needs. Enjoy the following sections:

– Introduction from Jan Carlzon, former SAS CEO and visionary customer-centric management author

– Exclusive perspective from Forrester CX analysts about CX competencies in the “Age of the Customer”

– How to scope your CX measurement program to drive change in the business

– Practical tips to prioritize the CX actions that drive satisfaction and growth

– How to bring a CX strategy to life by empowering employees to meet customers needs.

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Does Your Sports Strategy Rely Too Much on GameDay Tactics?

March 15, 2019

Sam Richardson

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“Strategy without tactics is the slowest route to victory.

Tactics without strategy is the noise before defeat.”

Sun Tzu, Art of War

Since starting with Nepa Global Sports, I’ve been fortunate to attend many great professional sports conferences and seminars around the country. I’ve met great leaders, representing the best-known professional sports leagues and teams in the world, and had the pleasure of engaging with some really smart, cool and talented folks.

Sports is fun but it’s a business too, and leagues and teams are like everybody else trying to come to grips with rapidly changing business demands and consumer needs.  So, whether it’s trying to accurately evaluate the value of their sponsorships, monetize social media, engage more fully with their sponsors or better understand their fan bases there’s a need to know more.

Sports business professionals get it. They understand that they need to know what motivates their fans in order to guide the strategic direction and to bring value to their partners, but they have got to put in the time, effort and most importantly, the resources needed to capture this critical information and drive consumer insight.

This may be due to the seasonal nature of sports; all too often, short-term tactical needs seem to take the priority over longer-term objectives. In baseball you would call that an error.

How many sports marketers look at their budgets based on long-term and short-term objectives? Consider:  what resources have you put aside for development, research, insight and understanding, and how much of that is being directed at tactics such as digital advertising or social media? To be really successful you have to measure, and not just once every five years, but constantly and in real time.

It’s all very well finding new fans to come through the turnstiles, but if you don’t know who they are or what your offer means to them, that turnstile effectively becomes a revolving door, churning revenues that have to be constantly replaced.

The sports success franchise that is riding high on the back of a winning streak and great attendance today is a potential headache tomorrow if the team’s management isn’t working to uncover how it can continue to get better by understanding and serving its customers.

In order to be successful over time, it’s estimated that marketers should be investing at least 60% of their resources in long-term brand building, with the remainder in short-term sales activation to achieve the best returns on their marketing investment.

I would guess that most sports marketing teams are probably putting less than 20% of their budgets aside for long-term strategy while fighting the weekly fires of life in seasonal sports by throwing the rest of the budget at short-term tactics.

A recent study from McKinsey on short-term vs long-term resourcing in business, reported the following:

“Among the firms we identified as focused on the long term, average revenue and earnings growth were 47 percent and 36 percent higher, respectively, … Companies that were managed for the long-term added nearly 12,000 more jobs on average than their peers from 2001 to 2015.”

Too many sports business professionals rely on on-field performance or worse still, their instinct or what they have done in the past, to gauge what their fans are thinking and feeling.

“Winning cures everything,” is the mantra. And it’s true, but only in the short term.

Sponsors have a different approach – they’re now looking for better ways to measure investment by analyzing specific KPIs, and they want to know the ‘true’ value – in dollars – of their sponsorship.

So how do you continue to grow your brands, provide value to partners and guard against complacency? The answer is surprisingly simple. Do the research!

Longer term sports organizations need to identify and optimize their fans’ path to purchase. And they also need to provide sponsors with a true valuation of what their sponsorship is worth in the eyes of consumers.

Fan Experience (FX) is the new battleground in sport and every sports organization needs actionable Fan Intelligence to compete. If you’re curious about how your organization’s fan experience measurement stacks up and how to take it to the next level, I’d love to talk with you.

We can start with a simple assessment.  It just takes a few minutes and you’ll receive an immediate analysis and a free copy of Nepa Sports “Cultivating FX measurement” eBook, based on decades of experience working with teams at all stages of maturity.

Click here to start your assessment.

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Tackling Your 2019 Marketing KPIs With a Unified Approach

March 07, 2019

Sam Richardson

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“How do you really feel about me?”

It’s an awkward question in a relationship. It’s also a difficult one for most brands to answer, but it can be key to a successful campaign. The problem is most brands don’t even bother to ask. Research has shown that as much as 95% of purchasing decisions are made based on fast, intuitive thinking as opposed to a slower, rationale process. In other words, emotion.

Emotion provides a pathway to activation. Recognizing this, market leaders are starting to move some resources in the direction of the upper funnel, e.g. brand building. This acknowledges that increasing marketing efficiency isn’t just about activation and sales; it’s about understanding and measuring brand and brand impact on ROI across channels. It’s about establishing an emotional beachhead in the consumer’s mind early in the decision-making process. Missing that window can mean missing the sale and, just as important, forgoing the chance to start a long-term relationship.

We live in an omnichannel world where customers search for product information and make buying decisions when and wherever it suits them. Tracking the path to purchase provides insight on key inflection points but it doesn’t always go to the emotional core of the decision-making process.  In spite of this, advertisers continue to invest more in activation focused communication than in building brands. One major reason: technology makes it increasingly possible to optimize and follow-up the short-term effects of communication.

An omnichannel perspective is key

Understanding activation is great, but it’s not enough.  Differentiating your brand from the competition and creating the kind of unique and compelling experience that drives customer loyalty and sales requires building an emotional connection, too. To achieve this, you have to adopt an omnichannel perspective, measuring brand performance across all media.  And you need to bring a similar view to measuring KPIs, seeing them in context, using data and analysis to understand not just what the consumer does but why.

If consumers walked a completely logical path to purchase, there would be no need to analyze the emotions that define the upper funnel (consideration for purchase). But they don’t, and there is. If you’re not asking (and answering), how do you really feel about me, you’re missing an opportunity to build brand and boost ROI.