Personalization, Mobilization, And The Fight To Not Be Creepy

July 2015 Integrated Solutions For Retailers

By Liz Miller, SVP marketing, CMO Council

I know you really like chocolate. Heck, you ate $10 dollars worth last Saturday. So because I value you and put you first above all others, I went ahead and filled a basket with nothing but chocolate. Don’t worry; I have coupons, and I’ll use the credit card you used last Thursday. I’ll meet you by your car, unless you want me to just meet you at your house.

To the normal person, this sounds like the terrifying rant of a stalker. To marketers, it sounds like an omni-channel engagement strategy. As technology enables brands to know more and connect more often with their customers, marketers are debating where the line between being relevant and valuable ends and where creepy and intrusive begins. This has never been truer as marketers grapple with developing a comprehensive mobile engagement strategy.

We all know we need to do much more to reach our customers who are being bombarded with an avalanche of digital experiences. Our shoppers are getting more selective and discerning with their dollars. According to Catalina Marketing, when you look across an entire year, the average consumer buys just 0.7 percent of available UPCs. Even our top shoppers, who account for 80 percent of all store purchases, buy just 1 percent of UPCs. The traditional answer used to be to turn to the circular to drive sales and volume, yet when Catalina examined a major retailer’s Memorial Day shopping circular that had 1,172 items advertised, it found that two-thirds of all shopping baskets didn’t include a single advertised item.

The answer must be to go digital — and for the truly adventurous — mobile, right? Today’s customer journey is infinitely more nuanced than in years past, but the impact of mobile on the customer journey cannot be denied. According to eMarketer, there are an estimated 4.55 billion mobile phone users globally as of this writing, with some 1.74 billion of them representing smartphone users. Mobile commerce now accounts for 15 percent of total U.S. e-commerce revenue, and in the U.S., mobile media consumption now accounts for 12 percent of a typical consumer’s media consumption time.

The mobile promise is even more intoxicating when you see demos outlining a data-driven experience. Imagine a shopper walking by your store, and, to her thrill and delight, she receives a message with an image of the boots she was just coveting online, along with a coupon for 10 percent off if she just comes into the store. In every technology pitch, our hypothetical customer is always “thrilled and delighted.”

If only sales pitches and demos matched reality.

What if that shopper already bought the shoes using a different online account? What do we need to know about mobile in order to move to personalization and engagement without going too far into downright creepy and disruptive?

Craft A Mobile Strategy. Now.
First, and perhaps easiest, is to understand a core customer truth — customers will tell you what they do and do not want. In fact, according to Yahoo’s report, The Balancing Act: Getting Personalization Right, some 58 percent of consumers actually want personalization, but personalization based only on user information they proactively provide. Another group (38 percent) would like to specify their individual interests so that brands can personalize in a highly relevant manner defined by the customer. There is also a thirst for total transparency, with some 60 percent of consumers wanting to know why, what, and how brands have selected personalized content.

Second, we need to actually develop a mobile strategy. This might be the most shocking part of the equation as the reality — beyond the creepy line and beyond our own customers’ desires for relevance — is that we simply have not developed meaningful mobile strategies that connect with our overall marketing plans.

The CMO Council fielded research that tapped into the mobile mindset of more than 500 senior marketing executives, 13 percent of whom represent the retail industry. The goal was to understand how marketers were getting in sync with the mobile customer. The good news on the surface is that the majority of retail marketers believe they have already engaged with customers via mobile channels, while the remaining 13 percent are actively assessing mobile channels and experiences.

More than one in three say that mobile is actually a critical component to the customer’s journey. And half believe that mobile actually helps their brand deliver more personalized experiences. Even more impressive is that 23 percent of retail marketers already have a comprehensive mobile strategy in place — higher than the total average of 17 percent of marketers who feel they have achieved total integration between marketing and mobile. These are the brands that are creating an actual experience for their customers, instead of creating more “random acts of marketing.”

But this is where the party ends.

The majority of retail marketers (38 percent) admit that while they have executed some mobile campaigns, there is still no strategy in place. In fact, 42 percent say that for their organizations, mobile is just not a strategy and is just a campaign. As for the performance of those campaigns, 62 percent of retail marketers admit that initiatives are only “moderately effective.” This could explain why, while 51 percent of all marketers surveyed feel mobile is critical to reach and engage their customers and 31 percent say that the channel is growing in importance but isn’t the most important engagement channel, retail marketers have a far different view.

Mobile seems to be a great experiment while it is table-steaks for our customers. Some 68 percent of retail marketers admit they are still experimenting with mobile, and what these experiments have revealed is that marketers might not be ready to meet the needs of their customers. Some 39 percent doubt they are able to meet customer expectations, and 38 percent admit that they are not very effective at actually assessing customer satisfaction with mobile experience, despite 69 percent of marketers feeling confident in knowing when customers are accessing mobile engagements.

What is standing in the way for nearly half of respondents is a sense that they lack the people and the bandwidth to actually execute highly personalized and relevant mobile engagements. While 46 percent doubt they have the right talent to develop and optimize mobile strategy, 38 percent say they are struggling to keep pace with the content and experiences required to fully optimize personalized mobile engagements.

Data is also at the heart of this challenge. Despite 54 percent of retail respondents confident that they have a single source of customer truth, they also admit that only select teams in the organization have access to it. This of course calls into question that if only select teams add to and access the data, is it really a single source of customer truth across every touch point and engagement that a customer has with a brand?

Where Do We Go From Here?
We must embrace and stop debating whether mobile is the path forward. Our customers have already made that decision and are not going to wait for us to get our acts together to meet them. Mobile is so much more than a messaging channel that delivers cost-effective advertising to a device the customer depends upon to the point of addiction. It is the way customers are connecting — and it isn’t just through phones. With Gartner estimating that 4.9 billion “things” are connecting to the Internet in 2015, we are at the point of Internet of everything and not just the mobile phone campaign delivery system.

We also have to realistically address data. Not all of it. But we need to start interrogating data with a fresh lens that starts exactly where you stand today — armed with social, transactional (if you are lucky), and lots and lots of campaign data. We also have service and support data, front-line insights from sales teams and in-store experience, billing, finance, and channel data. This needs to aggregate into a central point that serves as a single source of customer truth. Notice that I don’t call it the perfect source of absolute customer fact. But there must be a single point of truth that every stakeholder in the organization agrees is the truth, in that moment, about the customer.

In the end, marketers everywhere, be it in retail or well beyond, are all struggling with what to do with mobile. There is no perfect example. In fact, when we asked all marketing respondents to identify the brands they felt did a superior job at crafting and executing mobile strategies, no clear winners emerged. But, while no brand is winning completely today, the customers are also not waiting. They will turn to disruptors. They will gravitate to new players in the space, new business models that bring value, convenience, and relevance to their shopping engagements. At risk is revenue, and, in an age of almost constant technological evolution and disruption, mobile might just be the fastest route to revenue we have today.

If there is one request, it is that we all vow to be vigilant for that creepy line. The upside is that with a clear view of the customer and the strategy that binds value, content, and relevance together, steering clear should be easier.

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The Importance Of Location Data

By Asif Khan, founder & president, Location Based Marketing Association (LBMA)

Location is the new cookie. It represents a way to track the movements of consumers across day parts and media types, inclusive of radio, TV, and DOOH (digital out of home). Supported by next-generation GPS and improvements in indoor location technology like beacons, marketers will spend heavily on mobile/location infrastructure in support of this targeting. While there are privacy and ethical considerations, consumers will understand the premise of true value exchange and readily trade their data for content that is personally relevant.

There’s something intriguing about wandering anonymously through the day, going wherever you want, doing whatever you want — no questions asked. But it’s not something most people can do anymore.

Thanks to smartphones and a host of location-based technologies, there’s a good chance someone can pinpoint your location, give or take a few feet. For Asif Khan, that’s not only a good thing, it’s the key to virtually endless possibilities for retailers, advertisers, digital marketers, and a host of related businesses.

Location-Based Marketing Basics

Location-Based Marketing Is The Intersection Of People, Places, And Media.
By this, we mean it is important for digital marketers to know where their target customers are located. But location is most meaningful in relation to other events, people, and things. Once marketers know the locations of their customers, they should ask what media happens to be near them in that particular place. In other words, it’s not just about mobile. Billboards, TV, radio — any media can be location-based if we understand who is near it right now.

To Put Location In Context, Learn To Listen.
Many businesses rely on check-ins via Foursquare or Facebook to get their location-based marketing data. However, it’s important to understand more than just check-ins. Many new tools are emerging to track the full location-based conversation around your property. Solutions like VenueLabs (a provider of location-based monitoring, measurement, and engagement solutions) provide the ability to listen to the social/location conversation by combining sentiment data from Twitter and other services with the location data.

Mobile-Only Marketing Campaigns Are Not Enough.
Running mobile-only location campaigns can generate poor results. The reality is that most mobile platforms just don’t provide enough reach and frequency. To solve this, we recommend that digital marketers look at their wider media plans and seek ways to add mobile location service on top of traditional media to make it more measurable and effective. Think about the ability to use mobile to determine who is standing in front of your print billboard or how to change the content on a digital screen to reflect passers-by. As well as providing a number of other game-changing benefits, the company Blippar is pioneering this movement by providing unrivaled location-based experiences over any ATL (above the line) media.

Personalize The Experience.
Many companies offer discounts when people are around a given location. But there should be a better focus around customer service and unique engagements. Your most loyal or frequent customers should not get the same deal as a one-time visitor. There is a unique opportunity for digital marketers to blend location data with customer purchase history data to create better customer experiences.

Get Creative — And Consider Location-Based Options Beyond Coupons.
Too often we look at location-based marketing as just about coupons, offers, and check-ins. Digital marketers should consider the opportunity to simply build brand affinity. Perhaps you can deliver art or music in response to a checkin at a particular location. Get creative. Think about what you have to offer that won’t erode your margins but will still be something the customer wants and will associate with a positive customer experience.

Location analytics has been gaining prominence as mobile technologies became the tool for increasing engagement with people in the physical world. For retailers, the common strategy of enticing customer opt-in to their applications with pricing discounts is meeting resistance from customers due to a variety of factors, including their concerns over privacy.

The LBS Influence

IDC has identified the expansion of LBS (location-based services) in the retail industry as a major industry disruption that will emerge in 2015. By 2016, the top 150 retailers globally will improve ROI on hyperpersonal loyalty based on unified customer engagement, according to Leslie Hand, vice president of IDC Retail Insights.

At the LBMA, we expect this market to be $16.2 billion by 2018. With location-based services and analytics, businesses are looking beyond pure connectivity to how the wireless infrastructure enables them to do things differently, get insights, and gain efficiencies that were not possible before.

What is interesting is the technology mix today. We are seeing growth across all major technologies, including BLE (Bluetooth low energy), Wi-Fi, and audio, with 2015 being an important year for handset-based location, sensor fusion, magnetic field, and LED.

Businesses that don’t start to embrace and use this type of technology to engage with their customers differently and with greater intimacy will be disintermediated. Where we are going with location-based services will transform not only businesses’ opportunity to engage differently with the customer but also the customers’ ability to engage and influence the businesses.

The cookie crumbs will be everywhere, and only location data will enable us to track users across devices and media types.

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Insights From The 2015 GRMA Executive Leadership Forum

By Stephanie Fischer, president and CEO, Global Retail Marketing Association

The Global Retail Marketing Association (GRMA) recently held its 10th annual Executive Leadership Forum, “Connect Today. Shape Tomorrow.” event in St. Pete Beach, FL. More than 175 CEOs, CMOs, and senior marketers from global retail, e-tail, restaurant and hospitality brands along with C-level executives from leading providers of marketing, e-commerce, Big Data, analytics, mobile, social, and digital solutions assembled to learn from the world’s foremost technology, finance, and consumer marketing experts and to share challenges and opportunities for driving success in the constantly evolving omni-channel marketplace.

Several key takeaways emerged at this year’s forum — from understanding the impact disruptive technologies will have on various industries in the not-so-distant future to how to think exponentially as an organization to drive success. In addition, we focused on core areas of leadership development and the neuroscience behind influencing organizational change and customer behavior. Based on a preforum survey provided by CMOs, we also addressed the hot topic of Big Data and how marketing leaders can leverage data for organizational and strategic planning.

Here are some takeaways from two insightful sessions. The first session featured Andreas Weigend, former chief scientist at Amazon. The second session was an engaging CMO panel featuring Trish Mueller, SVP, chief marketing officer, The Home Depot, and Julie Cary, EVP, chief marketing officer, La Quinta Inns and Suites, about how they have embarked on the data journey.

Dr. Andreas Weigend: Turning Big Data Into Smart Decisions
If you had all the data in the world at your fingertips, what would you do to delight your customers? Dr. Weigend, an expert on the future of Big Data, social-mobile technologies, and consumer behavior, led the Forum audience beyond the traditional transaction economy, rewriting the equations of business in the “customer-centric” terms of the new relationship economy. According to Dr. Weigend, Big Data is a mindset that there’s an abundance of data to use. It’s the ability to turn “mess into meaning” and to allow for experimentation.

Understanding A, B, C, D Intelligence
There are several kinds of intelligence: Artificial, Business, Customer, and Data or Decision Intelligence. “Customer Intelligence” can be described as helping customers make better decisions where the “better” is truly viewed from their perspective, not from the perspective of traditional KPIs (key performance indicators). Customer Intelligence is one of the most important aspects to creating better strategies. How your company then uses this data for “Decision Intelligence” to create a one-to-one relationship with your customer will set you apart from the competition.

Rules On How To Use Data To Your Advantage

• Start with a decision (as the problem or question) and not with data. Many people start with the data and mine insights to make decisions, but it is imperative to start with a decision. You need to make and use the data to support this decision and make it stronger. Make sure your decision is written through a customer lens vs. a business lens.
• Make sure your company has a “fitness function” and base it on metrics that matter to your customer. Fitness function considers your brand’s delivery on promise (e.g., what the “cost of unhappiness” of your customer is if your product does not arrive on a promised delivery date).
• Your fitness function will allow you to assess how to best use data to solve a problem that is meaningful to your customer. Combine implicit and explicit data, evaluate experiments, and drop irrelevant constraints.
• It’s important to ask yourself two questions when using data to your advantage:
  1. Does the customer understand the value they get when they give you data?
  2. Does your product or service get better over time with data?
• Play nicely in the data ecosystem — give data to get data. If the consumer sees value in what they give you and they get something back in exchange, they will reciprocate.
• Embrace data symmetry and transparency across your organization for consistency in the customer experience.
• Design for abundance not scarcity. Data is abundant; start with the decisions, not the data.

Remember The ABCs Of Marketing
Attention: How do you use data/technology to get the attention of the consumer?

Belonging: In a fragmented world, people are hungrier than ever to belong to something.

Connection: Always make it easier for people to connect and contribute (e.g., reviews of products or services), which helps the customer understand the value they receive by sharing their data with you. They will be more willing to contribute when they understand the value they receive in return.

CMO Panel: Top Things To Consider When Helping Your Organization Utilize Big Data
Trish Mueller, SVP, CMO, The Home Depot, and Julie Cary, EVP, CMO, La Quinta Inns & Suites, provided an insider view of their respective companies’ data journeys. Their organizations’ unique dynamics and resources provided a rich discussion and critical insights into effective strategies for today’s Big Data challenges.

• Get the right people and keep them: Build an analytical team who understands your business and give them the right tools they need to succeed. Without the business application, it’s just numbers on a page.
• Your best business leaders don’t need to be data scientists, but they need to have a solid understanding of analytics to effectively partner with and guide the analytics team.
• Build the trust for Big Data: Leaders can have a hard time believing something they can’t understand. Advanced statistics is not understood by most. Start with small wins to build trust.
• Begin with the end in mind: Before exerting effort to supply data to anyone inside your organization, establish the business case (i.e., theory you have to validate, the expected financial benefit, and the action to be taken if the data confirms the hypothesis).
• Establish criteria for prioritization of data usage: Not all efforts will have high value, but some may be strategic in nature. Determine who “wins” in a resource-constrained world to reduce stress on your team and ensure relevant wins for the company.
• And throughout all data efforts, always protect the customer and the company. Establish, document, and have your team and suppliers sign off on your policies for handling customer data.
• It is a journey, not a destination. Big Data is constantly changing and evolving with new sources of data, tools, and applications. You are never done.