Enhancing digital coupon recall and usage

If asked, could you draw the Apple logo unaided?  

Can you remember all it’s simple features?  Is there a leaf or not?  Is there a bite out of it?  Which side?

Given the ubiquity of the logo on our devices and in the media, many of us would be fairly confident we could create a reasonable facsimile of the logo.

Researchers however put this to the test - or more accurately, put their participants memory to the test - and as expected, most participants were confident of their ability before starting out.  However the research showed that despite this confidence, only 1 in 85 actually got all aspects of the logo correct and less than 50% managed to correctly identify the logo when presented with a number of alternatives.

So, despite seeing it every day, we don’t really “see it” - we haven’t really committed it to memory sufficiently that we can recall its detail.  Remembering a logo is one thing, but what if we need to remember something more important.

From a marketing perspective, one of the most important things we need is for consumers to “remember to remember”.  

We’ve created the perfect conditions for the consumer to form an intent, we just now need them to carry that intent out at some future date.  We’re essentially relying on the consumers memory to prompt them at the right time; whether that’s to further research the purchase or to actually go on to buy it.

This ability to remember to remember is termed prospective memory and is basically defined as where an individual intends to perform an action at a later time.  This could be an event based prospective memory such as "give a message to a friend at the next meeting” or could be time based such as "remember to go to the dentist at 10am on Friday”.

As marketers, we rely on a consumers prospective memory for the call to action to be executed and unfortunately we're relying on something that is extremely fallible.  

Despite our reliance on this prospective memory, there has been little understanding of how it works or how it could be improved.  This is changing though and in recent years there has been a real surge in research studies around prospective memory - and this couldn’t come at a better time.

With the ever increasing transition of marketing from paper based coupons to digital, we are potentially removing an important aide to memory recall.

One of the key parts of prospective memory recall has been found to be a target cue.  Using the example of a grocery coupon, where the consumer has seen the offer and made a decision to take up the offer they would traditionally have taken the paper coupon and put it somewhere to act as a cue when at some point later they went shopping.  This may have been within their wallet or purse or next to their shopping list.  The point is, the physical coupon would have acted as a target cue to trigger the intention at the point it was required.

As coupons move digital however, it’s very easy to browse offers in an email or via an app and select which ones you intend to take up, but then the offer is gone; the email disappears or the app remains unopened. For these digital offers, we’re relying on the prospective memory of the consumer to help them remember they signed up to the offer and to then go on to purchase the product at some point in the near future.

There could still be a target cue -  the event of shopping - but even then, if they have signed up to a number of offers, how likely is it that each offer will be remembered.  At this point we’re then relying on the target cue of the product itself - when (if) they see it and that they remember it’s on offer.

We’re putting a lot of pressure on someones prospective memory - to recall they have signed up to offers and to then recall what offers they have signed up to.

So how can we counter this to ensure we more fully link the intent to take up the offer with the activity of shopping.

Well this is potentially a two step process:-

• First - We need to get the consumer to remember to check for offers so that they can be reminded of which products to look for.  
• Second - We need to get consumers to do this every time the shop - we need it to become habitual.

It makes sense to start with the second step first as this is the end state we want.  Essentially, we want the process of checking for offers to become habitual for the customer.  When an activity is habitual we don’t think about it directly, it’s just linked into a wider script we have for the parent task.

As an example, when we drive a car, we don’t have to remember to put the key into the ignition or make sure the gear is in neutral, we just do this automatically.  This task is not being held in prospective memory; we don’t have to remember it.  Getting the use of offers routine then and linked into the wider task can help it to become habitual and move it from something that needs to be specifically remembered to something that simply gets done.  Checking the offers available/opted into then allows individual product offers to provide a reminder - a target cue - which can help to prompt the consumer to find and select the product.

Before this can become an habitual activity however, we need the consumer to start doing it and remember to continue to do it. This essentially relies on prospective memory, with the consumer forming an intent to check the offers when they go shopping and to then actually carry this out.

Anything we can do to help strengthen activation of a prospective memory will be key to helping to turn the task into something that becomes habitual.

One approach that researches have showed works well is when people form implementation intentions.  This involves identifying when and where they will execute the intention and what cues will be present - basically visualising themselves carrying out the task.

The research also shows that people better remember to perform a delayed task when the target cue (the trigger) is encountered in the context of an ongoing task associated with the delayed intention than when the cue is encountered in a different context.  To put it another way, someone trying to remember to use a grocery product coupon will be more likely to recall the offer when in the supermarket - if this was the implementation intention - than when they see the product in their cupboard at home.  

The real trick here is what is termed the encoding - ensuring that the thing to remember (the offer) was specifically linked to the right target cue (being in the supermarket) and to the time (when you plan to shop).  

Encoding implementation intentions has been shown to improve prospective memory performance substantially - between 2-4x - so this works.

This linking of prospective memory intentions into a wider task can also help them to become habitual as it ties them to the bigger task such as grocery shopping which is much easier to remember due to more obvious target cues (i.e. empty cupboards!!)

Thinking about the issue with digital offers, it may well be good practice to not only allow someone to indicate their intention to take up the offers, but also to indicate when they will do it.  This could involve them flagging a likely location for the shop and a date when they may carry this out - forming an implementation intention for checking offers and linking it to a wider task of grocery shopping.

Doing this would also have the added advantage of allowing us to switch the prospective memory task from being an event based one (going shopping), for which we can’t influence the trigger cues, to a time based one which we can.  For example, knowing the intended date and time of the shop we could use an additional target cue such as adding a diary reminder to flag up at the agreed time as well as a location based notification when the customer is in the vicinity of the selected store at the appointed time.

Strong target cues which we can control also help to overcome another weakness within prospective remembering - which is that prospective memory is typically impaired when the current task is demanding.  

So if someone is busy doing something requiring a lot of memory based thinking, then it is less likely they will remember an intended action unless the target cue is highly salient.  Using the context of remembering a grocery offer, you could argue that the mere act of grocery shopping in a busy store with kids in tow is a taxing enough task on its own - trying to remember something that was on offer to you 5 days before will be less likely.  However, using time and location based notifications which are closely linked to the broader task of shopping makes it more likely that the intended task - using offers - will be remembered.

Retrieval of the intended task is also interesting as its not just triggered based on target cues - although these are shown to be very powerful.  

Interestingly, in one study by Kvavilashvili and Fisher (2007), they found that when participants were given a task of phoning the researchers back the following week, the participants typically recalled that task over the week around 8-11 times.  Many times this recall was found to be associated with trigger cues related to the task such as seeing a telephone.  However, more interestingly, around 40-50% of recollections were completely untriggered - they just popped into the participants head.

Knowing we recall an intention 8-10 times before its intended implementation could be a useful characteristic if directly catered for within a digital offers solution.

If consumers will randomly remember the need to check for offers a number times during the week, it may be possible to include functionality to reward this recall.  

For example, building in a “need” to review offers in the app - maybe to check for changes such as a better offer - could create a reason to check the offers regularly, helping to reinforce them and also ensuring that any date/time based implementation intention is still correct.

This whole area of prospective memory is still an emerging research area with differences of opinion as to exactly how we remember things and how this could be improved.  That said, given our increased reliance on the consumers memory as we remove physical target cues, combined with our ability to intelligently create new, highly relevant ones suggests this is an area we should pay more attention to as marketers.

Periscope and Meerkat lead the way on creating a new kind of shared experience

"What if you could see through the eyes of a protester in Ukraine? Or watch the sunrise from a hot-air balloon in Cappadocia? It may sound crazy, but we wanted to build the closest thing to teleportation."

Rather poetically (and much quoted), this is how new live video streaming app provider Periscope describe their service - one of two new high profile launches of live video streaming apps with the other being Meerkat.

This is not a new market, apps such as LiveStream and UStream have been around for a while.  However, with increasing 4G coverage and investment from the likes of Twitter (they recently purchased Periscope for just under $100m 2 weeks after it launched), this sector is hotting up as the next big thing.

Meerkat founder Ben Rubin describes the trend as "spontaneous togetherness” and this to me is the most interesting aspect of it.

In a media world where everything is available at the touch of a button; TV can be paused and rewound; films are available on demand (and sometimes before they're even in the cinema); the “magic” of TV has been lost.  That shared experience we used to have when a new TV show aired is increasingly becoming extinct.  With so much choice, technology and platforms, people are watching it at different times or even not watching it at all.

Indeed, if you’re in the Millennial Generation, there’s a good chance you never even tuned in.  

Something that hasn’t really made the headlines, is that in 2015 there has been a double digit decline in traditional TV viewing for millennials (18-34).  This has been happening since 2012 with a fall of around 4 percent year on year.  However at the end of 2014 this fell an amazing 10.6 percent.  Overall this has translated as almost 20% fewer young adults watching traditional TV than 4 years ago.

Alan Wurtzel, NBCUniversal’s audience research chief is quoted as saying:-

“The change in behavior is stunning. The use of streaming and smartphones just year-on-year is double-digit increases […] I’ve never seen that kind of change in behavior.”

This doesn’t mean of course that they’re not watching video content, it’s just not the content that the media industry wants them to watch.  Instead, they are reportedly watching 11.3 hours of “free” online video per week and interestingly the major ways young people are selecting online content to watch is based firstly on content that has been viewed/liked by a lot of people (59%) and secondly content that was sent by “someone I respect” (58%).  

So no surprise - peoples viewing habits are now more likely to be influenced by their personal social network.

This is where both Periscope of Meerkat have a distinct advantage.  They both tie into twitter as a means of making people aware of live broadcasts and given that tweets are heavily influenced by the people you’ve chosen to follow, these broadcasts are more likely to be relevant to the viewers.

But it goes further than this.  These are not static video feeds like you see on Youtube, instead the audience is positively encouraged to participate, to help direct the production.  

In an article on the Verge they reported that "In their early tests [of Meerkat], they found something delightful in the interactions between the broadcaster and their audience: the audience always wound up helping direct the broadcast with their comments, to the general enjoyment of everyone involved”… and this is where the “spontaneous togetherness” comes in.

There is something powerful about being in the moment; this ephemeral experience which can only happen at that time, which places you at the centre of the action, allows you to take part and which happens within your social network - this could be a truly compelling mix.

Having played with Periscope, it’s funny how much it differs from a traditional pre-recorded video stream.  Even when the vloggers have created tailored content for their audience and speak to them like a personal friend, its still not as compelling as actually being in the moment.

It’s like we’ve gone back to that shared experience, but at a hyper relevant level.

So whats the implications for loyalty marketing?  Well I’ve no doubt that marketers generally will find ways to create “brand engagement” and “brand experiences” through live videos - whether product launches, celebrity moments or just regular brand ambassadors creating content to watch and interact with.

What I think will be interesting though is if that personal connection - that in the moment experience - becomes as common place as the Facebook wall-post or the Tweet.  If that happens, people are going to have greater expectations of their interactions, whether personal or business.  Imagine what online banking looks like through live video streaming or being able to access customer service at your online retailer through video.

In fact, stop imagining it as that’s what Amazon has already done with it’s Mayday button on the Kindle Fire, launched in late 2013.

Described by CEO Jeff Bezos as “the greatest feature we’ve ever made”, they may truly have hit on something at the beginning of a new trend.  As consumers are conditioned by apps like Periscope and Meerkat to want “real” connections, you can imagine them increasingly seeking out brands that provide a similar experience.

Amazon is reportedly fielding 75% of questions from Kindle Fire customers through Mayday with questions ranging from how to beat a level on Angry Birds to singing Happy Birthday to a new Kindle Fire owner.

Loyalty is all about customer experience and it would seem that what Periscope, Meerkat (and Amazon) are showing is that a new kind of customer experience can be created.  One centred around real moments of truth in real time.

 

 

 

 

 

 

 

Digital - A Coming of Age

Within any generation there is always someone who is a link between the old order of things and the new.

We’ve just commemorated 100 years since the First World War started, and for me it feels remote, but real.  I didn’t know anyone who served, but my grandparents did who I knew, so I feel a connection.  With the Second World War, things are different.  When I was 10, I remember celebrating at school 40 years since the end of the war.  At 10 that seemed a long way past, but my grandparents served in it and could bring it to life with stories and artefacts.  For my kids though, all of this is a fading memory - stories we tell, but it may as well be like the Battle of Waterloo.

This connection between the old order and the new is explored in a book I’m currently reading called The End of Absence by Michael Harris.  In it, he discusses the time we’re in now and how anyone born after 1985 is essentially a digital native - someone who has never experienced a world without the internet; a world without always on connectivity.  For us others - those born before this time - we’re essentially digital immigrants.  Describing this group, Harris says:-

“For those of us who have lived both with and without the vast, crowded connectivity the Internet provides, these are the few days when we can still notice the difference between Before and After […] there’s a single difference that we feel most keenly; and it’s also the difference that future generations find hardest to grasp.  That is the end of absence - the loss of lack.  The day dreaming silences in our lives are filled; the burning solitudes are extinguished."

This is thought provoking stuff.  Realising that my kids (and a lot of those I now work with), just simply think differently.  They’ve never experienced a time when there was genuinely nothing there.  No kids telly on, nothing on demand, no chat, no connectedness.  When I tell my son to get off his computer, I turn around to see him on his phone.  Kick him off his phone and he’s flicked the telly on.  It takes real effort to switch everything off so he’ll actually consider walking out the door to call for friends… and then they sit around their house playing Xbox.  I tried.

So this got me thinking about the implication of this within the working environment.

For many of us, we work in companies established pre-1985 or staffed with management from before this time.  We have computers, tablets and smartphones; intranets, instant messaging and email.  We even have social networks for staff, with “friends” and wall posts and “status updates”. We’re thoroughly modern and fill every piece of time, every empty space within some activity.  Responding to a ping on the phone, an email arrived - we sit in meetings only half listening as we type on our laptops and then check our phones.  This is a state Harris references and one that writer Linda Stone referred to back in 1998 as “continuous partial attention”.

Yet despite this, we’re not as modern as we like to think.  

Many companies still have a Digital department of some kind or a Head of Digital role - as if all things digital is somehow separate to what we do.  It’s as if we’re in both the Before and the After - one part of the company in the pre-1985, pre-digital age and the other ring-fenced in the digital age.  This does some ludicrous and you can’t imagine a company such as Facebook or Google having a Head of Digital role - they are simply digital companies (although strangely they do).  The point is, the world has changed, people have changed, but the way we do business seems to still be a mismatch of old and new.

This point was brought to life in an article I was reading about airlines entitled Passengers Become Data Mines as Ryanair to Emirates Hone Offers.  In it, Ryanair CEO Michael O’Leary is quoted as saying:-

"I used to say that my ideal customer had a pulse and a credit card, but I’ve revised that view radically. […] In the next five years, with each of my 90 million customers, I’ll know when you’re traveling, where you’re traveling, and I can send you a direct offer.”

This shocked me.  

We’re in 2014, this is a relatively new airline (setup in the 1980’s) and yet it seemed a surprise to them that there may be value in the data they hold and process for 90m customers.  This is though also understandable because companies still aren’t digital natives - they still have their digital marketing and data analysis functions somehow separate to their older, more established traditional sales and marketing functions.  They’re an add on or an extension rather just being one single company.

If we go back to Marketing 101 and the 4Ps of the marketing mix we have Product, Place, Price and Promotion - this was something created in the 1960s by marketer Edmund Jerome McCarthy - a set of marketing tools based on the age but which is still taught today.  

A company like Ryanair has really focused on these 4P’s - it’s “Price” has been refined by pairing back its “Product".  By choosing carefully the airports it uses to get the best rate for a given destination even if it’s not quite the best airport in terms of distance, it has truly honed “Place”.  Promotion you could argue has been a mixed affair, but there probably isn’t a person alive in the UK who doesn’t know the airline, it’s CEO and the kind of message he had long stood for (such as removing toilets from planes).

But within this 4Ps mix, there is nothing about the customer.  It’s the old world order of making a product people want, at a price they are willing to pay - and then shouting about it loudly in the right places.  It’s all push.

Take a look at the new world however through a different lens.

Freemium models support many of the latests products/services, with apps (and some products) giving away their product in the knowledge that they can monetise customers either through targeted advertising or in-app purchases - and this is where data comes into play as a key part of the marketing mix.  Even airlines have a form of this with their ancillary services - the basic service is paired right back and then customers are encouraged to top this up with ancillary services as they need - a kind of pick and mix of products.  This is all pull.  

Speaking of this, CEO O’Leary is quoted as saying:-

"Ryanair’s data will let the carrier know how often travelers head to particular destinations, whether they travel alone or as a couple or group, if they routinely book insurance or car rental, and be able to customize its offers accordingly and target the passengers with special offers […] We know who you are [and] the clever airlines are going to make a fortune in the next 10 years”

This thing which will make a fortune is the missing piece - it’s the digital native addition to the marketing mix.  It’s the bit about the customer, about what they do and about what they want.  

It’s personalisation and it is truly the 5th “P” of the marketing mix.  I’m not the first to point this out, but it really is the difference between the Before and the After.  The increased connectivity and the computing power, scale and flexibility this has afforded, as well as the increased expectation of a customer base in “continuous partial attention” mode means that personalisation is critical to success.

As we transition from companies and people born of this pre-digital age to the next generation of digital natives, there will be change, there will be new ways of doing things.  We cannot stop it but for many of us, and for many of the companies we work for, we’ve yet to embrace it.  In the book End of Absence, Harris says of this:-

“Technology is neither good nor evil.  The most we can say about it is this: It has come. […] We can only judge, only really profit from judging, the decisions we each make in our interactions with those technologies.  How shall we live now?  How will you?"

Challenge for CPG: Focus on the basket, not the trolley

I have to admit I love Shreddies.

Little woven parcels of wholegrain goodness which, if you listen to the marketing blurb from Nestle, are lovingly hand knitted by a nana called Pearl and her friends.  They have their own Facebook page and Twitter account.  Part of British life since 1953, over 3m people in the UK seem to agree that its a tasty start to the day.

When we go shopping, I ask the kids to go grab a box of Shreddies and they quickly grab it and drop it into the trolley.

The problem is, they didn’t grab a box of Shreddies.

Instead, they grabbed a box of Harvest Morn Malted Wheaties because I’m shopping in Aldi, now just about the 6th largest grocery chain in the UK.  In fact, Alid and Lidl between them have attracted over 50% of households to shop with them - thats 13m people.  With sales for Aldi up 30 percent on the previous period and an aim to double UK stores by 2021, it’s a trend that doesn’t look like it’s set to stop any time soon.

You only need to look at Germany, the heartland of the so called hard discounters to see the effect this could have where they dominate with 44% of the market.

The reason is obvious - consumers are saving a tonne of cash!

For example, I get around 625g of Malted Wheaties for 1/3 the price of 500g of Shreddies.  The price today for 500g of Shreddies is £2.49 (49.8p/100g), for Aldi Malted Wheaties its 99p (15.8p/100g).  Overall, these types of savings have translated to pretty much a 50% cut in my household food bill.  Great for me, not so great for Tesco who used to have my loyalty and my purchases.

However, whilst we hear a lot about the woes of Tesco et al., we don’t hear too much in the press about the packaged goods brands and the impact it’s having on them.  I buy Malted Wheaties not just because they are cheap, but also because thats the only choice I have - almost everything in Aldi is own-label which means the more market share they get, the less market share the consumer brands will have.

This isn’t something that might happen in the future - it’s happening now.  

A recent report from IRi showed that the UK saw the biggest decline in grocery sales since the second world war.  Compared to the first half of 2013, there was a decline in sales of CPG products across all UK supermarkets by 1.2% in value and 3.2% in volume.  This at a time when brand promotions themselves are at an all time high.

A report by McKinsey back in 2010 entitled "Trends that will shape consumer goods industry" forewarned of this when it highlighted one of the top 5 trends to be that of “The shift to value”, with consumers looking for ways to save money and to trade down.  The report suggested that CPG brands were looking to address the issue head on with more competitive pricing through the use of scale, product sizing and finding ways to work with or displace private label products.

The problem with fighting on price alone though is that this simply erodes category value over the long-term.  

Speaking about this issue last year, P&G UK Managing Director Irwin Lee indicated that 5 years ago, brands excluding P&G sold about two-thirds of their volume at an average of 33% off - this had now risen to 80% of volume with an average deal size of over 40%.  To address this, Lee set out the P&G strategy, saying:-

“Our focus is on value creation to complement, if not offset, the over-reliance on unsustainable value give away. There is nothing proprietary in price promotions. We believe promotions win quarters, but true innovation wins decades.”

As Lee points out, consumers need more reasons to buy the product than price alone. Innovation is part of the equation, however all products can be copied as private label shows and with the emergence of the hard discounter “private label only” stores such as Aldi, this battle just got harder.  Brands are no longer fighting for premium shelf space but instead are fighting for customer head space.  

Consumers are now shopping in both hard discounters and traditional stores - buying the bulk of their weekly shop at a low price and the little extras at the one of the big 4.   Those little extras are also increasingly being done via an online trip from established e-commerce brands like Amazon or dedicated online grocers like Peapod or Ocado.  Some brands are even experimenting with their own dedicated online solutions such as P&G with its P&G e-store.

This is leading to the relationship between the brand and the consumer to become more fragmented.  No longer able to simply pay for in-store promotions and positioning to reach consumers, brands now need to look to build direct relationships with consumers.

The challenge for brands then is not how to get into the trolley - thats where the discounters win - but how to get into the basket; how to convince customers to make that extra trip just for them.  This is heart vs mind; emotion vs rational.

There are many tactics to achieve this such as advertising, digital couponing, receipt scanning or on-pack codes, but what is really needed is a co-ordinated and long-term customer relationship strategy.  Some might call this loyalty marketing - I’d call it the future of CPG marketing. 

Remarketing - Loyalty's "Groundhog Day"

On February 2nd 2013, famous groundhog Punxsutawney Phil didn't see his shadow in Pennsylvania.

This apparently meant that spring would come early this year - although i'm not sure anyone actually told spring about that as we had a long, drawn out winter - but then I guess it's asking too much of Phil to predict the weather in the UK as well.

Regardless of how accurate this phenomenon is, it was immortalised in the popular film Groundhog day whereby the main character is forced to relive the same day over and over again until he learns to become a better person.  Recently though, you'd be forgiven for thinking the same phenomenon was happening to you.  

Here's the scenario - you're busy surfing the web looking at different products/brands and then all of a sudden wherever you go you keep seeing the same brand that you visited just a little while ago.  Maybe you'd never noticed them before, but now they seem to be popping up everywhere - and days later you're still seeing them all over the web.

Wow, you think to yourself - these guys are everywhere, they must be _____ (fill in the blank accordingly with... amazing, spending a fortune, just right for me, desperate).

You could be forgiven for confusing this with with another effect you see in real-life called the Observation Selection Bias.  When you buy a new car you suddenly see your car everywhere and assume - wrongly - that the frequency has increased; that everyone is now buying that car.  This is not however the case here.

It's actually no coincidence that you now can't fail to miss the brand - they're using remarketing.

Remarketing is a process by which you see personalised advertisements across almost any website that shows ads based on your previous surfing habits.  Google describe it as:-

Remarketing is a powerful way to stay engaged with your target audience. Presenting them with highly relevant ads and offers across the Web -- and making sure your brand is top of mind when they’re ready to buy

Remarketing (or retargetting as it's also known) helps by:-

• Targetting users who visit but don't purchase (up to 97%)
• Helping with brand recall - especially as they're possibly visiting competitors
• Combining branding and direct response techniques to target users across different stages of the buying funnel

Using remarketing, companies have seen a 600% lift in response rates versus standard banner display campaigns.  This is not really surprising given these ads are now targeted at "soft" targets - customers who have already expressed an interest in the brand by visiting the website initially.  It doesn't do away with the initial acquisition marketing to drive traffic, it simply ensures you make the best use of this by having a second bite of the cherry.

At it's heart though, remarketing relies on the the familiarity principle or mere-exporsure effect.  This is the psychological phenomenon by which people tend to develop a preference for something merely because they are familiar with it - it's what advertising is based on!  By using remarketing you continue to remind people of your brand and provide compelling reasons to come back and consider you.  If you're trying to acquire new customers, this alone becomes very powerful.  Research has shown for example that remarketing using personalised ads is 6x more effective than standard banner ads.

While remarketing is now firmly established in online acquisition marketing, I think there is also huge opportunity here for retention marketing.

At it's heart, remarketing is a one-to-one messaging solution based on customer behaviours and it's this that really makes it powerful for loyalty marketing.  Consumers now actively interact with brands via their online websites, making purchases, researching products, writing reviews.  From a loyalty context, they are also checking points balances, reviewing reward options and making redemptions.

Every one of these activities can provide a trigger point for remarketing.  While the messages (displayed as ads) maybe be relatively fixed, the timing of them is highly personalised.

Recognising when someone has checked their balance, has enough to redeem but has not looked at a reward gives you an opportunity to highlight relevant rewards and pull them back.  Members looking at rewards, but not redeeming provides the opportunity to pull them back in to redeem.  However, the opportunity is wider than this.  

It's not just about the single next best action, it's about the journey.  

Using a well designed remarketing campaign, it's possible to track the behaviours of both prospects and members and to tailor the right messaging based on this to deliver the next best action as part of an overall journey.

It's a misnomer to think that 1-2-1 marketing means a single, personalised message for every customer.  Instead, it's about the right message to the right customer at the right time.  You may only have 7 key steps within the overall customer journey, but knowing which step a customer is at and which is the next right step is the key.  We do need to be careful however when myopically driving customers along a predetermined journey.

Knowing the customers journey, not your journey is more important

In a recent (2013) research study by Lambrecht and Tucker entitled "When Does Retargeting Work? Information Specificity in Online Advertising", it was shown that dynamically remarketing to customers based on their browsing habits only worked well if you understand where the customer is in their own journey.  

Based on an example with a travel provider, the study suggests that making the remarketing message highly personalised  - down to the product or product category level - can be less effective than more generic remarketing.   In the study they found that ads which feature hotels that a customer had previously browsed or were similar only prove more effective when the customer is known to be looking for something specific (narrowly construed preferences) and that this was best demonstrated by understanding their wider browsing behaviour with both review websites and/or competitor sites.

This isn't to say remarketing as a whole wasn't working, but that the message used within the remarketing, whether generic or highly personalised needed to be aligned to where the customer was within the buying process - something which may not be apparent from just the behaviours the customer has shown with that brand/site.

Given the wealth of data contained with a loyalty programme and the increasing requirement for loyalty programmes to bring together wider customer interactions, this provides a real and tangible opportunity to increase programme effectiveness.  Whether this is to directly target brand customers for repeat purchase or to more subtly drive up loyalty programme adoption and engagement, both approaches are like to provide compelling returns.

If Punxsutawney Phil comes out next year and sees your loyalty programme using remarketing as part of it's overall marketing strategy, I think he'll be predicting both a very early spring and a bountiful summer.

The customer is always right (unless they're wrong)

I was reading a loyalty white paper today from Accenture on retail loyalty. It was discussing a survey they carried out asking customers what they wanted from a loyalty programme. As expected (and as shown in many surveys before it), customers said that price was one of the top reasons for continued loyalty. The article continued by pointing out that one of the top reasons for loyal customers defecting to another retailer was also price.

Does this suggest that customers are only loyal to the retailer providing the lowest prices? Well evidently not or else there would be just one retailer in each sector with some very long queues. When was the last time you actually checked the price of things though?

Do you know how much a pint of milk costs - and if you do are you aware of how much it costs at the retailer next door? In practice customers say they care about "price" - but most are not actually aware of the price they are paying. This was born out last week when I attended some research focus groups for a credit card loyalty programme - customers were asked what elements of a credit card they considered important and almost all customers agreed that APR was top of the list. When asked though what the current APR was on their existing cards, no one could provide an answer.

Price it seems is more important in initial customer acquisition when customers will research the best options available, but for existing customers the price ceases to be something they really use to evaluate their relationship with the retailer. Many financial companies have actually taken advantage of this fact which is why there are financial products where the interest rate declines overtime - with the companies hoping that customers will not actively re-evaluate their relationship.

Rather than price, customers defect from retailers because of other factors including service, relevance and benefits.

If a store you frequent changes its range, ceases to keep up with your requirements or tastes or removes benefits it provided (or doesn't offer benefits competitors are promoting) then this will create moments of reflection when you'll begin to consider other retailer options. If this consideration turns into trial then price may well come back into the equation - more likely however a customer will actually defect if the service and experience they receive from the new retailer is considered better than they've been used to.

I'd argue that retaining customers is not about providing discounts, promotions or everyday low prices - its about how you treat customers and the service you provide. Feel free to ask your own customers - but I suspect they'll be wrong.