Sunday, 25 April 2010

The art of collecting

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I was never a big sports fan, but for some reason collecting Panini football stickers was a big part of my childhood. I couldn't really care less about the teams or the players - most of whom I'd never have recognised - it was just the collecting itself which was exciting. Being able to swap with friends and if you were really lucky, getting the silver ones with the club badges on.

It seems nothing has changed - Panini are still pushing out sticker books and kids are still collecting them.

It's not just kids though - many people like to collect - whether it's shoes or stamps.

I'm not talking about pathological collectors -those who feel a need to collect things so that it affects their ordinary life. Like the guy from California (why is it always California) who just had to recently sell his banana themed collection.

I'm also not talking about those who's desire to collect something first drives them to extraordinary lengths. For example, the 15 year old Parker Liautaud who was first to collect the FourSquare Last Degree Badge by checking in at the North Pole.

What I'm talking about is those more normal people who just feel compelled to make that next purchase or seek out that next item.

Given that collecting is such as powerful force within frequency marketing programmes - whether its people collecting points or the sales promotions at the local petrol station where you collect glasses - understanding how people start collecting is important to get a loyalty programme up and running.

At a simple level the act of collecting is essentially one behaviour that is linked to a previous one - to be a collector you must by definition have started.

In the famous article on The Endowed Progress Effect by Nunes & Dr├Ęze, they showed how you can kick start people into collecting by simply making them feel they have already started. By awarding people with points upfront, the members were more likely to continue collecting and would actually collect faster - showing increased engagement or desire to collect. They described the reasons for this saying:-

[Previous research] demonstrated that interrupted or uncompleted actions engender a strong motivation to complete the action and psychologists agree that once a person accepts a task, for whatever reason, he or she tends to stay on that course until the goal is achieved

So part of getting people to collect is to get them to feel their collection is both incomplete - so there is more to do - and that they have already started collecting and so feel compelled to continue.

It's one thing to get people started however, but how do you keep the behaviour going. How do you get them from one behaviour to the next, and more importantly, how do you get them making increasingly larger commitments - giving you a greater share of wallet or opening up a new category they haven't purchased in before.

In the book Yes! 50 Secrets from the Science of Persuasionthey discussed ways of getting one large behaviour change by essentially "softening" people up in the first instance. Linking one action to another by starting with something small and seemingly insignificant to then get them to do something bigger which they wouldn't ordinarily have accepted.

The example given was an experiment that asked home owners in a posh neighbourhood to display a large sign on their lawn (6' x 3') saying "DRIVE CAREFULLLY". When asked first off for this, only 17% complied. However when they were asked two weeks before to display a small sign in their window saying "BE A CAREFUL DRIVER", the compliance rate shot up to 76% for the larger sign.

The book goes on to explain why this happened saying:-

"The evidence suggests that after agreeing to the request, the residents came to see themselves as committed to worthy causes such as safe driving. When [..] approached a couple of weeks later, they were motivated to act consistently with this perception of themselves."

This softening or "Priming" as it's described in the book Nudge: Improving Decisions About Health, Wealth and Happinessworks by aligning peoples thinking - for example, simply asking people who they might vote for makes them more likely to actually go out and vote.

This becomes key within loyalty through ongoing communications. We know for example that communications sent across multiple channels increase overall response rates within a campaign and this is probably in part because the first communication "primes" for the subsequent one. Combining this with some form of low risk call to action suggests that subsequent messages for a larger commitment would get a far greater response rate.

Members of a loyalty programme have traditionally been called collectors. To get the best out of a programme though it is probably also worth treating them as collectors and building in specific mechanisms which encourage both the initial behaviour to get them started in their collection as well as helping to direct them ongoing to maximise it.

Sunday, 11 April 2010

Social CRM - evolution or revolution?

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CRM is going Social. But isn't Social CRM just CRM done across social networks?

[pause] [wait for the flames]

The answer if you listen to the promoters of S-CRM is (quite vehemently) no, Social CRM is not a channel. It is not about using social networks to execute standard CRM practices.

In fact, in an interesting blog post by Wim Rampen, he makes some really excellent points about why Social CRM is simply not a channel extension of CRM - another way to speak customers - and instead has many unique properties that make it a more interactive, two way dialogue.

Whilst I get all of that - and largely agree, I guess my problem isn't with the Social aspect of S-CRM, it's with the CRM aspect.

If marketing started out as a way of focusing on the benefit the product provided, rather than on the product itself (so called Marketing Myopia) then CRM was a step forward again, focusing instead on the customer that was receiving the benefit and not just on the benefit itself. All customers weren't equal and so knowing which product to sell, what benefits to highlight, at what quantity and at what price became the mantra.

The buzz words were all about personalisation or 1 to 1 marketing - delivering the right message, to the right person, at the right time.

If only we could anticipate what you wanted to buy and nip in there quickly enough on a channel you were likely to read then we'd make a sale. You'd be happy as you got something you wanted and we'd be happy as we had sold it to you.

I think times are moving on though and if the focus on the product rather than the benefit was essentially Marketing Myopia - a blinkered view of the business a company was in - then focusing on the customer is potentially another blinkered view - almost a Social Myopia - in that it assumes that customers fit into a single neat box. There may be many different boxes, but each customer fits into each box.

This however is just not true and Will makes a very good point in his blog when he says:-

If there is one thing we (should) learn from emergent on-line communities it is that people join these communities to perform a certain job. This can be a social job, functional job or emotional jobs, mostly formed around a shared interest. It is these jobs & interests that bond the people in a community.

What this suggests (and it seems obvious really) is that it is not just about a customer segment, but almost customer personalities - or customer communities as Will defines them.

The problem with this thinking though is that if you begin to segment customers not just by social-demographic measures or exhibited behaviours but instead by community, a customer no longer fits into a neat box. I may be part of many communities - whether they're based around a passion like football, an interest like gardening or a function like my job. Even more complicated, these communities or personalities may vary by time.

My needs when doing the weekly shopping with a large shopping trolley are very different to when I'm walking the aisles on a Saturday evening with a basket - browsing DVDs, wine and ready cooked meals. I'm the same customer, reading the same newspaper, watching the same TV programmes - but I have different needs, desires and approach.

This is obviously difficult to have a view of in the physical world - but in the online world it is much easier to have a view of a persons different personalities or communities, and to interact with these at the appropriate time.

Will makes another interesting observation in a related blog when he says:-
Social Customer Relationship Management is not about managing the relationships with your Customers, it is (increasingly) about managing the knowledge-flows through the relationships of your Customers. And yes, you as a company maybe part of this eco-system of your Customers’ relationships. But please, don’t put yourself at the center of it.

I agree with this and it is why I think Social CRM is not really the right phrase - it isn't really Customer Relationship Marketing - in the traditional sense of trying to build a direct, single relationship with the customer and may be better phrased Customer Context Marketing - building numerous relationships centred around the relevant communities or personalities for a customer and being part of the conversation, not trying to own the conversation.

Whatever it's called however, it's clear that you can't simply apply existing CRM techniques in a social context. This would be similar to brands which simply "mobilised" their websites to create a mobile site - only to find it wasn't relevant to customers in the mobile context.

In the social space, context is king - it's not just the right message at the right time, but more the right message in the right context. Interestingly, a Forrester report designated 2010 as the era of Social Context based on the evolution of the Social Web with the author of the report quoted as saying:-

"The community will take charge and that's going to happen whether or not marketers or brands participate."

I think it's fair to say this also applies to the evolution of CRM - and communities and social context need to be at the heart of it. As the quote suggests, the community will take charge and if the interaction is not relevant and in context, it will be ignored.

Sunday, 4 April 2010

How to train your dragon (or customers)

dragon.jpgHiccup is a teenager who's a little different - he doesn't really fit in with the rest of his Viking village who are dragon slayers - and have been for centuries. Instead of slaying dragons, he ends up befriending one and in the process changing the perceptions of the whole village.

The dragon he befriends is the most powerful and feared Night Fury dragon, but due to an injury, he cannot fly without assistance from Hiccup. Becoming friends the two of them go on to work together - Hiccup the rider providing direction and the newly named Toothless the dragon providing power and support.

As the official blurb puts it for new film "How to train your dragon":-
Hiccups world is turned upside down when he encounters a dragon that challenges he and his fellow Vikings to see the world from an entirely different point of view.
Whether it changing from slaying dragons or changing your diet - change itself can be hard.

It is normally easier to do what you've always done. Sometimes you may think about change, dwell on it, work out the alternatives - but ultimately do nothing.

This is also the topic of a new booked called Switch: How to Change Things When Change is Hardby authors Chip and Dan Heath which discusses why change is difficult for us and techniques that help.

Unlike the film however where Hiccup is the rider of a dragon, the book describes how decision making for us is similar to a rider and an elephant, saying:-
Our emotional side is an Elephant and our rational side it's Rider. Perched atop the Elephant, the Rider holds the reins and seems to be the leader. But the Riders control is precarious because the Rider is so small relative to the Elephant. Anytime the six-ton Elephant and the Rider disagree about which direction to go, the Rider is going to lose. He's completely overmatched.
Whilst this is a great book for looking at how to manage personal change - and I highly recommend reading it - it does raise some interesting thoughts about how to make change easier for other people, providing three simple rules:-

  1. Direct the Rider - Resistance to change is more often lack of clarity about what needs to be done

  2. Motivate the Elephant - The Rider can't get his way by force for long - it's critical to engage peoples emotional side

  3. Shape the Path - Normally a people problem is actually a situation problem - you may need to make changes to make change easier (think Nudge)

For example, they describe a case study in the book about a campaign to encourage healthy eating. Rather than use a standard message of "eat a healthier diet" or provide a long list of good and bad foods the campaign had a simple message - drink low fat milk.

Knowing that milk is the largest source of saturated fat in a typical Americans diet, it was felt that if they could change this to low-fat it could make a big difference.

To support this the campaign had two messages.

The first, directed to the Rider was simple and provided crystal clear direction - "Next time you're in the dairy aisle of the grocery store, reach for a jug of 1% milk instead of whole milk"

The second message was to the Elephant - looking to appeal to the emotional side by visualising the problem saying for example that a single glass of milk had the same fat as five strips of bacon.

The campaign worked in changing behaviour - resulting in a shift in market share for low fat milk from 18% before the campaign to 41% after it.

These same techniques apply in a commercial sense when looking to change consumers behaviour. For example, a credit card issuer is always looking to increase card usage - to make their card front of wallet and to increase it's usage across a customers share of wallet.

Whilst you could send a communication pointing out how using the card more will provide greater rewards - this is just too generic. The Rider - the rational side - will be contemplating various options - but not taking any action.
If instead to drive card usage you provide crystal clear direction - use your card in this category - then it suggests you are more likely to get people actually doing it.
A typical example of this would be to suggest using the card within supermarkets as for a card issuer, this represents both a large and regular transaction - something which is more likely to drive increased usage across other categories.

This can be seen in the example below from the new Amex Express Rewards card which highlights increased points earning in supermarkets:-

points.jpg

Amex have then combined this with simple messsages about the reward that can be obtained for the points earned - providing something to appeal to the Elephant - the emotional side.
rewards.jpg

However, this is nothing new and there are many campaigns of this nature across reward credit cards.

One thing that is missing from these types of campaigns though is the shaping of the path - in essence removing barriers which may still confuse the Rider or make them operate on autopilot.

For example, the problem with getting people to use their credit card in supermarkets may not be as simple as just asking.
  • There may be concerns about what people think - Does using a credit card mean I can't afford to buy food?

  • There may be concerns about managing personal finances - If I use my card for everyday spend, will I remember to pay it off; will I overspend?

In order to ask people to use their credit card in supermarkets, we may need to first address the reasons why they aren't, helping to alleviate concerns and Shaping the Path.

One thing is clear though, simply asking people to spend more on their card is probably never going to work in the same way that simply asking people to eat healthier rarely works.

If you want change - if you want to train your customers - then this new book suggests that you'll need to think about how you speak to the Rider, engage the Elephant and ultimately make it easier to do business with you by Shaping the Path.