Tuesday, 15 April 2014

Airlines show how tablets create loyalty ESP

BA ESP sml

There’s a lot of talk within loyalty about the increasing volume of customer interactions and how these are being enabled through mobile devices, wearables and the Internet of things.

Indeed, Microsoft consider it so important that they’ve apparently setup a special task force to develop it further.  Whether it's Smart watches, fitness wristbands or intelligent eye-wear, there’s a whole host of new consumer channels, devices and ultimately data heading our way.

However the real benefit may not be in getting consumers to don these products, but getting the employees to instead.

Giving employees access to real-time information on a customer may be the thing that gives a brand the edge over it’s rivals.

As ever, the airlines are at the forefront of this revolution with many enabling access to customer information to front line staff through a variety of devices.  Delta for example recently announced that it’s equipping it’s flight attendants with tablets, highlighting the benefits by saying:-

"In addition to its functionality as an in-flight sales device and replacement for the on-board manual [it will] enable flight attendants to [..] provide information for personalized service, including customers' frequent flyer status and potential need for special services during flight."

British Airways was one of the first carriers to issue a mobile device to staff with the intention of improving customer service and interactions.  Called the Enhanced Service Platform or ESP for short, the naming of the device seems indicate their intention for staff to be empowered with what customers might perceive as an almost psychic capability. Their platform, developed in house,  is reported to allow staff to access details on key high spending customers including their previous travel arrangements, where they are seated, who they are travelling with and their loyalty status.  It can also be used to lodge customer complaints immediately.  

The service would seem to be valued by both the staff and customers with a flight attendant quoted as saying:-

“I’m ahead of myself in knowing where our corporate and high-value customers are sitting, and who needs help,” Kaur, a cabin-service director, BA’s highest rank of flight attendant, said in London following a flight from Istanbul. “They look at you and say ‘have you been on a special course?’”

It would also appear to get some great results with customer satisfaction for Gold members reportedly up 14% since the original rollout initiative.

Never happy to be a follower, Virgin Atlantic has gone one better by looking to equip it’s First Class concierge staff with wearables including the Sony SmartWatch and Google Glass to provide them with personalised information on the passenger they are interacting with.  One of the key aspects was the personal touch that the technology enabled, removing the barrier between the staff member and the customer.  Virgin reported that:-

“The trial helped reduce the number of times that a Virgin Atlantic agent had to go behind a desk to look something up for a passenger, which would break eye contact – apparently vital to ensuring a “VIP customer experience” [and] also negated the need for any radio communications between staff, as all the information needed for each passenger was available through the unit."

This is not just limited to airlines however.  

Retailers are also looking to equip staff with mobile technologies to enhance customer service.  In the UK for example, fashion retailer Monsoon has started equipping staff with an iPad that allows them access to the complete product range and stock, so they can help a customer locate an item wherever it may be.

AT&T in the US plans to go further and completely remove their traditional POS cash registers. Instead, AT&T store employees will be equipped with tablets and mobile POS systems to facilitate the purchase at the point of experience - when the customer is looking at and playing with the product.  AT&T Chief Marketing Officer David Christopher is quoted as saying:-

"It's a pretty radical departure from what we've done in the past, [..] We want people to try, play with and ultimately buy our products...If [shopping] was just transaction based, customers could do it on the web."

There does seem to be a difference however between how retailers and airlines are using tablets with staff.  

Whilst for the airline it is predominantly to improve the customer experience and to personalise the service, for retailers it seems to be to make the purchase process more streamlined and ensure they can get what the customer wants.  

For retailers however there doesn’t appear to be a desire to use previous customer purchase behaviour and preferences to actually personalise the shopping experience.  This would seem to be a missing piece of the puzzle as this is where loyalty data really comes into it’s own and would truly deliver on that retail loyalty promise of the “cornershop experience”.  A little of the BA ESP for retailers would probably go a long way.

Tuesday, 8 April 2014

Amazon - A dash for loyalty

Amazon Dash

Dash, the latest technical innovation from Amazon threatens to totally change the whole shopping experience… and retail loyalty.  

Using a combination of voice recognition and bar code scanning, the standalone “wand” allows anyone in the household to add to the shopping list when an item is running low, has run out or is simply needed.  Either by scanning the item that is about to be consumed or just saying what item is required, the dash adds it to your shopping list for later fulfilment.

Interestingly the idea is nothing new.  

Apps like Shopper Pro allow you to maintain a shopping list and scan items onto it. Back in 2000, LG launched one of the first connected devices with the Smart Fridge that incorporated a modem (remember those) and a touch screen to allow items to be inventoried, managed and re-ordered.

What Amazon have done though is different.

Whilst consumers have been happy to collapse many different gadgets into their smartphone such as a camera, videophone, GPS, fitness tracking or video games, they don’t always fit into every scenario.  When I’m in the middle of cooking, with dirty hands, liquids and a hot stove, getting my smartphone out and navigating the security and app selection is not going to be high on the agenda... Sometimes a specific, dedicated, connected device can be a much better user experience.

By creating a single-purpose device, Amazon have been able to hone the user experience to be exactly what’s needed.  

  • It had to recognise that a household is made up of many individuals, so a mobile app wouldn’t have shared well 
  • It had to recognise that not everything has a bar code - fresh produce for example, or an item not yet purchased which is required for a recipe - so voice input closed this gap
  • It had to recognise that the device would have to function within a busy kitchen environment so it’s wipe clean and includes a hanging loop so it can sit right alongside other utensils.

User experience would have been key to the product design.

Amazon also had another advantage though and that is the closed loop ordering.  As a supplier of the goods through AmazonFresh, the dash connects the consumer from the moment of need to the moment of purchase seamlessly.

This is the real benefit of the dash - frictionless shopping and the loyalty effect this creates.

One of the main aims of loyalty marketing is to use knowledge about a customer and their purchase habits to reduce friction in the relationship to make it easier for them to do business with you.  In that respect, the dash is a fantastic loyalty play.

It provides the consumer with utility - a useful product/service.  It reduces friction in the purchase process by streamlining the process of shopping.  It provides stickiness as I’m unlikely to build my shopping list in AmazonFresh and then go and order it from competitor.

Like the Evian “smart object” launched back in 2012 to enable product re-ordering at  the point of consumption, the dash cuts through decision making and in the process is likely to increase loyalty, reduce price sensitivity and reduce the paradox of choice.

Whilst AmazonFresh is fairly niche at present, it will be interesting to see if dash will create competitor offerings from other retailers, all fighting for that newly created “front of kitchen draw” position. 

Sunday, 16 March 2014

Sales Promotion Comes of Age

Target

I was speaking at the Retail Business Technology Expo last week and what was interesting is how payments, coupons and loyalty have all merged into a single entity.

Whether you were a POS vendor or a payments solution, everyone had a solution that included coupons and loyalty.

It’s interesting because coupons and loyalty have traditionally existed in separate universes.

Sure, a retail loyalty program may have sent out coupons and increasingly these may have been targeted to the member based on previous purchases.  However, coupons have tended to exist in the world of Sales Promotion rather than Loyalty Marketing.  Whilst both below-the-line activities, they have always had different aims.

Sales promotion is normally used for a push of a particular product or service.  Typically in support of a wider advertising campaign, a sale promotion is short term with specific aims - to get (more of) the product moving.  Indeed, the latin for promotion (prōmovēre)  means “to push onward”.

Due to the typically short term nature of many sales promotions, any customer data collected is normally transitory - being used to facilitate the promotion itself with additional calls to action, encouragement to continue with the promotion and identification of winning behaviours.  Once the campaign is complete however the data is typically lost - either immediately or simply due to the data ageing over time as there is no real reason to continue a dialogue.

Indeed, I remember conversations in the past when asking clients if they had a customer database where they referred to the competition entries currently lying dormant in a mailing sack in the corner.

Loyalty on the other hand is in it for the long term.  It’s not typically concerned with that single purchase and is instead aimed at getting a continued and regular purchase pattern.  By definition, to be a loyalty programme it needs to be able to both identify the customer uniquely AND be able to see customer behaviours (e.g. purchases).  This tends to necessitate having up to date data and frequent communications with customers.  It also tends to lead to insight driven decisions, promotions and communications.

As a loyalty marketer, you tended to feel you occupied a higher ground when it came to customer led marketing.  Looking down on sales promotion as it stuffed product into random customers baskets for free (really, how hard is buy 1 get 1 free!), with many of these being the very same customers who were going to buy it anyway!

However, what sales promotion did have which loyalty didn’t was that immediacy.  That ability to change customer opinion there and then.  To be able to shift product sales immediately, typically at point of purchase (or decision).  Sales promotion was glossy, it dangled from the shelf edge and lit up the packaging.

Loyalty on the other hand tended to be after the fact.  After the customer had made the decision and paid for the goods the loyalty programme would wake up and suddenly recognise that great decision you’d already made without us.  Sure we could communicate with you later and hope you remember our messages as you walk around the store, but we just weren’t as “shiny” as the sales promotion guys.

That really is all changing though and so are the rules that go along with it.

Sales promotion is tending to run via social media tools and smartphones.  Customer data flows from the moment they connect with the promotion.  Even when the promotion ends, the conversation continues through branded social media campaigns.  Whereas before it was a random affair, promotions can now be targeted based on previous purchases, previous campaign usage, friends campaign usage.

Just take a look at Target Cartwheel to see this in action.  

The customer signs-up using their Facebook account (now they know who the customer is and how to talk to them), then they select the coupons they want to use (purchase intent), then they let the customer scan their single “barcode” (sounds very much like a customer loyalty id) to make savings (and obviously link ALL their purchases to their customer account).

While they could have stopped there and had a very capable mobile coupon app, they’ve gone further and included gamification features as well.  New customers start off with just 10 coupons slots; however over time the customers can earn badges which help to unlock additional coupon slots to get even greater savings.  These badges are awarded for various behaviours including sharing the app and offers socially, using in-store features like self-scanning and through frequency of usage (based on amount saved).

Is this sales promotion or loyalty?  Well, it’s both and it means the customer gets the best of both.

Target get to know the customer uniquely, see their behaviours, target further offers and encourage frequent usage - that pretty much sounds like a loyalty program to me.  The offers though are still good old fashioned sales promotions providing money off, BOGOF, etc. and will be largely funded by the manufacturers.

Retail loyalty is changing as mobile, payments, coupons and loyalty all seamlessly blend together.  This is great news for consumers but will create a real battle in the industry as these areas increasingly converge.