Financial Services Companies Focus on Delivering a Better Customer Experience

As I conduct more interviews with IT professionals, it’s clear financial services companies (banks, brokers and insurance) are investing a lot of money and resources into leveraging data to provide a better customer experience.

As I conduct more interviews with IT professionals, it’s clear financial services companies (banks, brokers and insurance) are investing a lot of money and resources into leveraging data to provide a better customer experience.

Better late than never. Banks have long had a plethora of information about clients; whereby, they should have been able to suggest products and anticipate needs based on life events (college, first job, marriage, home, children, job change, retirement, etc.). Unfortunately, the data was in silos and they were not taking a holistic view of their customers.

Slowly but surely, this is changing as:

  • Rocket Mortgage enables customers to get approval for a mortgage or an equity line of credit in minutes.
  • Square enables sellers to process credit card transactions via smartphones or tablets.
  • Mint provides free, web-based financial management software.
  • Robinhood provides zero-fee stock trading.
  • Personal Capital provides online financial advice, personal wealth management and algorithmic trading, for much less than a traditional broker.

These companies are providing a seamless user experience (UX) across a multi-platform and multi-device landscape. They’re providing real-time information of value to educate customers and prospects. In a recent study, Oracle found that 80% of consumers are accessing their financial institution digitally.

Several banks have automated their loan processing so they are able to get more accurate and complete information upfront and provide loan approval the same day, rather than in 30 or 45 days. The process is better for the financial institution, as well as the customer.

But Are Traditional Financial Institutions Too Late?

After having moved half of my investment portfolio to the algorithmic trading arm of Edward Jones, I decided to move it all to Personal Capital, the algorithmic trading arm of Pershing.

As with most things, I believe we will see a range of activity and acceptance based on the people I interview in the big data, artificial intelligence (AI), and machine learning (ML) space.

I’m still waiting for the first FinTech, using AI/ML, to guarantee the security of my personally identifiable information (PII) and my money. The first FinTech to do this will quickly become a market leader for more conservative consumers and investors.

We will continue to have FinTechs using AI/ML to make customers’ lives simpler, easier, saving them money and giving them incentives to share their information. Consumers who are less concerned with the security of PII and more concerned with “deals” and CX will be attracted to these FinTechs.

It will be fun to watch it shake out over the next couple of decades. I believe companies that remove friction, eliminate pain, make customers’ lives simpler and easier, and do so securely will ultimately win share of wallet.

What do you think?

Why Brands Like Shiny New Objects

While hanging onto shiny new objects may be the death trap for racoons, it’s just the opposite for brands. Brands like shiny new objects because customers do, too.

While hanging onto shiny new objects may be the death trap for racoons, it’s just the opposite for brands. Brands like shiny new objects because customers do, too.

Price, convenience, quality, variety and even good customer service is not enough to keep customers hanging on anymore. When a brand meets basic expectations, customers easily let go and move on in search of the shiny new object that sparks their interest, enthusiasm and fulfills their passion. However, when a brand offers the unexpected, customers often latch on and won’t let go; no matter how great competitors’ offers or incentives become.

But in a market where customer expectations run high, just what makes for a shiny object that keeps customers connected until the very end?

We know its not the clever ads, free content and rotating digital banners that chase consumers around the web. And we know its not reputation or how many likes your last Facebook post got over your competitors’ posts. One thing that does shine and shines bright is value. Extra value you can’t get anywhere else, even if it does not have a great monetary value, often gets consumers to latch on hard and long.

Just like the racoons, we consumers go for the shiniest value for most of what we choose and buy, luxury products excluded. We do silly things like drive in circles until we find the store that gives us more than we expected. Something as small as a free coffee with a gas tank refill, or the tenth carwash for free, or a free cookie with a deli sandwich purchase can do it. Value works for consumer purchases and business purchases, alike.

In the often cut-throat B2B market, the pressure is on to do more with less, and so purchasers seek greater value than the products they buy.

Negotiations for business contracts, whether it be for SaaS, ERP systems, paper supplies, printers or medical devices, are no longer just about price. They are about “what else can you give me” more often than not. And when asked, most suppliers negotiate and add in a few perks to close the deal. The key, however, is to offer that shiny new object, or maybe two or three, before they ask.

Here are a few ideas:

  1. Rewards for Quantity: It’s nothing new to offer something for free in exchange for volume of purchases. So if you’re not doing this right now, find a way to do it. And soon. You can do this in any industry and it works. Consider your own purchases. You’re still with a specific airline or hotel brand, as you know you’ll get rewarded for volume with free stays or flights.
  2. Consulting or Tech Support at No Extra Cost: While tech support and training is a good revenue stream for many industries, it’s also something you can afford to offer for free, at some level, to those customers who impact your bottom line the most. Find ways to chunk out your training or support offerings into modules you can give away as added value for VIP customers without ruining your revenue streams.
  3. Offer Your Experts: Every brand has experts who are industry-leading in one way or another. Who are yours? And how can you offer their expertise to customers as part of an added value program?

Whatever you do, don’t fall into the trap of promoting the dull objects that have lost their appeal. And likely won’t be appealing again.

Essentially, there are many forms of shiny objects that attract customers and/or keep customers. It’s really all about understanding your customers, what matters most to them and what you have to offer that shines far brighter than offerings from others in your space.

Improved Marketing ROI Shouldn’t Be Your Metric, This Should

My team often engages in client projects designed to improve marketing outcomes. Many times, clients describe their primary objective as an increased return on marketing dollars or return on investment (ROI). However, this is often the wrong object and their real goal should be improved marketing effectiveness.

My team often engages in client projects designed to improve marketing outcomes. Many times, clients describe their primary objective as an increased return on marketing dollars or return on investment (ROI). However, this is often the wrong object and their real goal should be improved marketing effectiveness.

“That sounds like semantics,” you say? Yes, this is an argument over semantics, and in this case, semantics matter.

When stating the primary objective as improved marketing ROI, the aperture is usually focused on an optimization exercise, which pits financial resources on one side of the equation and levers — such as channel spend, targeting algorithms and A/B testing — on the other side.

A couple of decades ago, marketing analytics recognized that specific activities were easier to link, with outcomes based on data that was readily available. Over time, this became the marketing ROI playbook and was popularized by consultants, academics and practitioners. This led to improved targeting, ad buys and ad content. These improvements are very important, and I would argue that they are still a must-do for most marketing departments today. However, resources are optimally allocated across channels, winning ads identified and targeting algorithms improved, marketing is still not as effective as it can be. Now is when the hard part of building a more effective marketing function actually begins.

For a moment, let’s imagine a typical marketing ROI project from the customer’s perspective. Imagine you are actively shopping for a refrigerator. A retailer uses data to appropriately target you at the right time, across multiple channels, with the right banner ad and a purchase naturally follows, right? Of course not.

  • What about helping you understand the variety of features, prices and brands available?
  • What about helping you understand the value of selecting them over other retailers?
  • What about the brand affinity and trust this process is developing in the consumer’s mind?

Because this purchase journey can play out over weeks or months, these marketing activities are more difficult (but not impossible) to measure and are often left out of the standard ROI project. However, these activities are as impactful as the finely tuned targeting algorithm that brought you to the retailer’s website in the first place.

Back to why semantics over ROI and marketing effectiveness matter. Today, the term “marketing ROI” is calcified within a relatively narrow set of analytical exercises. I have found that using marketing effectiveness as the alternative objective gives license to a broader conversation about how to improve marketing and customer interaction. It also lessens the imperative to link all activities directly to sales. Campaigns designed to inform, develop relationships or assist in eventual purchase decisions are then able to be measured against more appropriate intermediate metrics, such as online activity, repeat visits, downloads, sign-ups, etc.

What makes this work more challenging is that it requires marketers to develop a purposeful and measurable purchase journey. In addition, it requires a clear analytics plan, which drives and captures specific customer behavior, identifies an immediate need and provides a solution so the customer can move further down the purchase journey.

Finally, it requires developing an understanding of how these intermediate interactions and metrics eventually build up to a holistic view of marketing effectiveness. Until marketers can develop an analytical framework which provides a comprehensive perspective of all marketing activity, marketing ROI is merely a game of finding more customers, at the right time and place who will overlook a poorly measured (and, by extension, poorly managed) purchase journey.

Tapping the Psychology of Fun for Sales and ROI

Tapping the psychology of fun for sales and ROI takes work, because sometimes we marketers are so close to the trees, we can’t see the forest. Such is often the case with building customer experiences and journeys. It’s easy to download the latest template for mapping out each response to potential questions or needs along the customers pathway to “yes” and lifetime loyalty. And while that is critical for maintaining consistent touchpoints with a brand, it’s not where customer experience stops — or starts, for that matter.

Tapping the psychology of fun for sales and ROI takes work, because sometimes we marketers are so close to the trees, we can’t see the forest. Such is often the case with building customer experiences and journeys. It’s easy to download the latest template for mapping out each response to potential questions or needs along the customers pathway to “yes” and lifetime loyalty. And while that is critical for maintaining consistent touchpoints with a brand, it’s not where customer experience stops — or starts, for that matter.

Consumers are drawn to brands that make them smile, giggle or feel something beyond the routine by surprising them with creative experiences beyond any expectations. It’s not just experiences — like Apple’s Genius Bar and concierge style of selling — it’s little things that truly are delightful, fun and memorable. And its these little things that have a big impact.

Consider something as simple as this:

Every year, the charming town of Frisco, Colo., holds it annual BBQ challenge — featuring dozens of chefs, all competing for the People’s Choice award for best BBQ dish served. Most restauranteurs roll their retail trailers onto Main Street and set up their mobile kitchens in hopes of luring the crowd and getting votes for best brisket, ribs, pork and more. And to all the thousands of visitors roaming the streets for tasting and fun, they all look and smell the same. Except for one: The Golden Toad.

psychology of fun: golden toad
Credit: Jeanette McMurtry

Rather than just set up a food station and hope a colorful trailer and fun logo draw the crowds, the Golden Toad cooks up a crowd by making its food station about fun — not just food. Throughout the event, employees play fun, energizing music from their cook station, which is set up like a stage so people can see their chefs at work. And throughout each day, those same chefs take to the streets, playing air band with guitar-size spatulas, rallying attention — which quickly results in the longest line of all. They engage the crowd in their fun, too. They hand out those supersized grill spatulas to young kids and invite them to join their jam, sharing the fun and delighting parents who get to see their kids doing something beyond the routine, too. Its fun. Its contagious and it drives sales volume and People’s Choice votes, earning them this coveted honor many times over.

psychology of fun: Golden Toad's long lines
Credit: Jeanette McMurtry

Golden Toad doesn’t stop there, either. Once its attention-grabbing dance band draws a crowd for the performance and the food line, the commitment to making the customer experience positive and entertaining continues at a place most marketers neglect: the line for products or services. It’s no new news that we consumers are impatient and tend to abandon a purchasing mission if we get bored or antsy waiting in a long line. Golden Toad owners, “Toad” and Sara Jilbert counter this very real issue by installing a TV camera in their trailer, next to the cashiers, tuned strategically to whatever local sports are in play at the time. As a result, Golden Toad minimizes line abandonment from the consumers it drew with its fun, entertaining experience.

The psychology of fun and entertainment is real and needs to be front-and-center in all customer experiences for all brands. Wikipedia’s definition of “fun” includes the following insights:

“Fun is an experience often unexpected, informal or purposeless. It is an enjoyable distraction, diverting the mind and body from any serious task or contributing an extra dimension to it.”

We consumers live stressful lives. We need diversions from the stress of daily routines and the stress of shopping; especially when there are many choices to make, such as a huge BBQ challenge that lines several blocks on Main Street, USA. Little things that entertain and free our minds of routine energy and help ease our choices through fun diversions work. They work for all brands and in all industries. And they can work for you. All it takes is some imagination. Volkswagen, a few years ago, created a series of experiments and corresponding videos, called The Fun Theory. showing how behavior is changed for the better by adding fun to routine activities, such as choosing stairs over an escalator and using a bottle recycling station over a landfill-bound trash can. For example, by turning stairs into a musical keyboard, there was a 60% increase in usage.

Imagine if you could make your online or retail store shopping experience more fun and increase shopping transactions by 60%!

So change your routine. Go for a walk instead of sitting at your desk and let your mind have fun observing people around you — what draws them, what makes them stop their routine to engage and just have fun!

3 Tips to Market the Sprint/T-Mobile, Other Brand Mergers

When brands or businesses we’ve patronized for years change products, names, offerings or merge with other brands, we often see change as a not so good thing. In our minds, change can signal instability that could then lead to price changes, quality compromises, discontinued product, lackluster services and more.

Change is constant, and something we deal with daily in a rapidly changing world of business developments, technology breakthroughs and, of course, mobile apps that change how we do just about everything. In most cases, we embrace change. We like having a faster, smarter, better way to do routine business tasks, to connect with people, to manage our resources, play games, find information and much more. We like change that impacts our every day, like gas stations that offer 24/7 diners instead of just stale, often expired sandwiches mummified in plastic cartons.

Yet, when brands or businesses we’ve patronized for years change products, names, offerings or merge with other brands, we often see change as a not so good thing. In our minds, change can signal instability that could then lead to price changes, quality compromises, discontinued product, lackluster services and more.

For example, just this week we learn that T-Mobile and Sprint, both of whom had less than half the number of customers as industry-leader Verizon at the end of Q4 2017, are merging. And even though their combined size is still smaller than Verizon and AT&T, they will be a stronger third-place competitor with less than 30 million fewer customers than No. 1, Verizon vs. the nearly 100 million Sprint has as a standalone brand.

While this is good news for shareholders of each company, is it really change for the better for consumers? As quickly as the merger plan was announced, speculation consumed news and social media headlines worldwide as to what this merger really means for consumers: higher prices, the end of unlimited data, more control for the carriers and less competitive offers and perks for the consumers who rely on wireless plans 24/7 for every aspect of daily survival — not just phone calls home to Mom.

As reported in MarketWatch yesterday, the morning after, “It would be devastating for consumers in the long run,” said Chris Mills, news editor at BGR, a news website focused on mobile technology and consumer electronics.

True or not, Mills’ reaction is how many consumers react to change when brands they’ve known for years, and have established a comfortable and trusting relationship with, change. Even so slightly. Mergers, acquisitions, discontinuation or sell-offs of products lines or services, can be unsettling for consumers if not managed properly by brands.

The following are some tips for how to manage consumers’ reactions before they can change your bottom line.

  1. Put a Stake in the Ground That Matters: Define what this change means for your customers’ well-being, not just yours, and what market position this new change will allow you to own, develop and build upon. Does this prepare you for greater sustainability, future breakthroughs and developments through merged R&D efforts by leading minds? Does this improve shopping and service convenience for customers with more access to resources? What is the No. 1 promise and deliverable associated with this change?
  2. Speak Fast: Don’t wait to tell you story. If you are slow to explain how even a small change benefits customers and not just your bottom line, you open the door for competitors and analysts to explain why this could be a bad thing. As the first story heard is often the story that sticks, time is of the essence. Prepare a statement about the “why” and “what” it means, and get it out quickly.
  3. Speak Loudly: With today’s digital channels, loud is not about volume, but about relevance and reach. Send your story to analysts, news writers, influencers, consumers, shareholders, existing customers and more before they can read it elsewhere. Include statements from outsiders explaining why this change is good, and send your story across all channels. Train all your employees how to tell this story credibly at every customer touchpoint.

No matter how big or small your brand is, or the impact of the changes you make, managing change is critical, as our consumer minds will run amuck with all sorts of reasons to lose faith in trusted partners and even jump ship if left to speculate as to how change changes everything they know and trust. Yet change can be a beautiful thing for all involved when done right.

Wikipedia:

How Numbers Lead Us Astray So Easily

Frogs, fish, dogs, spiders, hyenas, chimps and others in the animal kingdom all have an innate ability for counting. But we humans are easily fooled by numbers, especially when they’re presented in context. Learning to exploit the power of context can pay off big for marketers, but at the same time, marketers need to be careful not to be fooled themselves.

numbers
Creative Commons license. | Credit: Pixabay by fotoblend

Frogs, fish, dogs, spiders, hyenas, chimps and others in the animal kingdom all have an innate ability for counting. But we humans are easily fooled by numbers, especially when they’re presented in context. Learning to exploit the power of context can pay off big for marketers, but at the same time, marketers need to be careful not to be fooled themselves.

Consider the example of the Economist subscription offer discussed by Dan Ariely in his book “Predictably Irrational.” Ariely duplicated this subscription offer with a group of 100 MBA students:

Chuck McLeester Chart 1
Credit: Chuck McLeester

Which would you have chosen?

Repeating the exercise without the “decoy” offer of the print only subscription yielded the following results:

Chuck McLeester Chart 2
Credit: Chuck McLeester

Which would you have chosen this time? Clearly, context will fool us into perceiving the value of offers differently.

Fish are not so easily fooled.

“Small fish benefit from living in schools, and the more numerous the group, the statistically better a fish’s odds of escaping predation. As a result, many shoaling fish are excellent appraisers of relative head counts. Three-spined sticklebacks are … able to tell six fellow fish from seven, or 18 from 21 — a comparative power that many birds, mammals and even humans might find hard to beat.” Beastly Arithmetic, NYTimes Feb 6 2018

Psychology-based marketing expert Jeanette McMurtry says,

“When marketers discover the inconsistencies and irrationalities about how consumers make choices, they can create messaging that engages consumers’ minds, both conscious and unconscious. When that happens, there’s a lot more to ‘count’ when it comes to sales, revenue, ROI and lifetime value.”

One of the reasons we’re so easily tricked by numbers is our reliance on verbal intuition. In his book, “Thinking Fast and Slow,” Daniel Kahneman provides several illustrations of how our intuition gets in the way of arithmetic when we’re presented with numerical problems in a verbal context. What is your initial response to Kahneman’s word problem?

  • A ball and a bat cost $1.10
  • The bat costs one dollar more than the ball.
  • How much does the ball cost?

You would not be alone if your initial response was 10 cents. But you would be wrong. Because if the ball cost 10 cents and the bat costs one dollar more than the ball then the total cost would be $1.20.

Consider how you might take advantage of people’s intuitive responses when constructing offers, but don’t let your own intuition get in the way of making decisions. Sometimes marketers are fooled by test results because they look for cause and effect in results that could easily have happened randomly. If you’re testing creative variations with samples of 25,000 impressions and your usual clickthrough rates are in the range of 1 percent (which yields a results pool of about 250 clicks), you should know with that sample size and that average response rate, your results can vary by 10 percent. So, statistically there’s a 90 percent chance that you could have gotten 225 clicks or 275 clicks. Yet, if you got both those extremes in an A/B test, it would be easy to conclude that one cell beat the other by a lot.

We are similarly confused by percentages. Psychologists Rochel Gelman of Rutgers University and Jennifer Jacobs Danan of the University of California, Los Angeles, have studied how often reasonably well-educated people miscalculate percentages. We hear that the price of something rose by 50 percent and then fell by 50 percent, and we reflexively, mistakenly conclude, “Oh good, we’re back to where we started.” Beastly Arithmetic, NYTimes Feb 6 2018

Feel free to comment with your answer to this percentage problem, or with any thoughts or experiences you have on using consumers’ proclivity for intuition over rationality to better your marketing efforts.

Use My Personal Data, But Don’t Offend Me

I’m fine with companies collecting my data; however, how about providing me something in return?

I’m fine with companies collecting my data; however, how about providing me something in return?

I’m a huge college football fan and watched most of the 41 bowl games that just wrapped up with Alabama beating Georgia in the second-best bowl game of the year, next to the Rose Bowl.

Nissan is a significant sponsor of college football. It runs commercials throughout the games and has spent a lot of money producing the humorous Heisman House series that appears before the kickoff of major games.

I noticed the addition of a five-second tag at the end of a few Nissan commercials, saying it was the official vehicle of “Duke Blue Devil” fans. I live in Raleigh, N.C. There are a lot more University of North Carolina (UNC), N.C. State University (NCSU), and East Carolina (ECU) alumni in Raleigh than Duke alumni.

I can only assume I was targeted to receive this tag with programmatic advertising because I have two degrees from Duke. You can pick this up from Facebook, LinkedIn or Twitter. However, if you look deeper at my profiles and posts, you’ll learn pretty quickly that I’m not a Duke fan, I’m a UNC fan because of Dean Smith — the person and the coach.

Instead of making me feel an affinity to Nissan, it alienated me. Over the past 15 years, I’ve owned three Nissans, but just replaced my last one with a Hyundai. When it’s time to replace the current Hyundai, if we’re still owning cars, I will remember Nissan’s mistake. Is it significant enough for me to not consider a Nissan? We’ll see.

The amount of data companies have access to in order to identify the needs, wants, likes and dislikes of consumers is huge. Granted, we’re in the infancy of using this data to improve marketing; however, companies must be smarter about how they are going to use this data.

How about this? Focus on providing information of value to make customers’ and prospects’ lives simpler and easier instead of trying to make an emotional connection which, in fact, offends. It’s much less risky to tell your story than it is to attempt to make an emotional connection based on big data, which is inherently impersonal.

Europe’s Forthcoming Data ‘Freeze’ and Why We Need to Care

European policymakers are transfixed with setting personal information controls on the private sector, and — beginning May 2018 — will give its citizens “default” power to shut down all such data usage for advertising purposes unless consumers provide affirmative consent. It’s called the General Data Protection Regulation (GDPR) and its companion ePrivacy Regulation.

Paris
Eiffel Tower” | Credit: TOUREFFEL.PARIS THE OFFICIAL WEBSITE OF THE EIFFEL TOWER by Eiffel Tower

There was a modicum of good news recently when the U.S. Department of Commerce’s “Privacy Shield” program was given a passing grade by the European Union, enabling private-sector cross-border data flows on European citizens between the U.S. and Europe. Thousands of U.S. companies participate in Privacy Shield. They rely on the program to help collect, process and transfer responsibly information for more relevant advertising, human resources, and other commercial and operational purposes. (It applies to charities, too.)

European policymakers are transfixed with setting personal information controls on the private sector, and — beginning May 2018 — will give its citizens “default” power to shut down all such data usage for advertising purposes unless consumers provide affirmative consent. It’s called the General Data Protection Regulation (GDPR) and its companion ePrivacy Regulation.

In the U.S., much digital information about consumer devices and browsers — such as their browsing history and app usage — is painstakingly “anonymized” by companies according to industry-wide self-regulatory codes. [Disclosure: One of my clients is the Digital Advertising Alliance.] Sweat equity through independent accountability programs safeguard such data from being used without proper consumer notice (transparency) and opportunity to exercise control through an easy-to-find, easy-to-use “opt-out.” However, in Europe, any digital information that “could” be used to re-identify an individual — even if anonymized from a U.S. perspective, such as an IP address — is considered personal by definition. Affirmative consent — most likely an “opt-in” though “consent” details are yet to be articulated — will hold sway. Common U.S. notice-and-opt-out regimens won’t suffice.

Imagine all the responsible data flows — even those clearly beneficial to consumers and the global economy — that will simply stop May 25, 2018, in Europe because of a hugely stricter consent mandate. American companies can only watch and wait to see who may be called out by EU data protection authorities, eager to fine a company up to 4 percent of its global returns, as provided for in the law.

Good policy? Or good politics. In reality, EU lawmakers are asking its citizens to pay a huge price. And that’s not my opinion as an American — it’s a fact in a Europe-born study. Look at what’s at stake:

  • €535 billion of the European Union economy benefits directly and indirectly from digital advertising;
  • 66 percent of digital ad spend depends on data, and 90 percent of digital advertising growth depends on data;
  • Ad units tied to data are 300 percent more valuable than standard run-of-network ads (because they are more effective)

That’s part of the economic argument. But there are social and political ramifications, too.

  • Much like U.S. consumers, Europeans prefer data-supported ads to paying for content — eight in 10 report such a preference;
  • Fully 68 percent say they would never pay for online content or use services such as email if they had to pay for it;
  • And 92 percent would stop using their favorite site or app if they had to pay for it;
  • Even 42 percent are “happy”: to see data used to deliver personalized ads.

European businesses, agencies and publishers have gone so far as to press policymakers that their respective countries’ own democratic and economic health is at stake — inherent in the power of data used in advertising:

  • Up to 50 percent of advertising growth will simply disappear if data cannot be used to make more relevant ads;
  • 70 percent of European citizens would abandon the Internet for news if they had to pay to replace the news content financed by digital advertising;
  • Internet usage would crash by 88 percent if EU citizens were forced to pay for online content and services;
  • And what of competition, diversity of content and innovation? The impact on small, independent publishers would be five times more pronounced than the impact on large media companies.

Yes, American companies are in the cross-hairs once GDPR and ePrivacy take some combination of enforcement effect next May — perhaps bad policy for seemingly good politics. Yet Europeans themselves are challenging such an objective — overreaching data controls punish consumers, employers and even democracies.

That’s a mindful lesson for all of us.

Slow Down to Go Faster, Marketers

Sometimes you have to slow down to go faster. Those wise words of wisdom don’t just apply to business strategy, they are highly applicable to marketing.

Sometimes you have to slow down to go faster.

Those wise words of wisdom don’t just apply to business strategy, they are highly applicable to marketing.

We live in an age of extreme digital addiction, consumers glued to digital devices every waking hour. As a result, marketers rush to buy up all of the digital channels they can to be present and steal mindshare from all of the other brands tweeting, posting, sharing and hoping to get attention, engagement and sales. Yet, the simple truth is that most brands can’t really tell if its working, if they are getting sales and they don’t really know if consumers are really focused on their messages, even when data analytics say they were.

The secret is quite clear: to create meaningful engagement with customers in ways that build brands for the moment, as fleeting as it is today, and brands for the long-term despite technological changes, brands must slow down in order to go faster. Faster toward securing meaningful, purposeful engagement that results in what matters most to brands, now, in the past and in the future – lifetime value.

As old-fashioned as it may seem, print is one of the best ways to do this. And one of the oldest forms of print at its best is the catalog. In 1845, Tiffany and Company put out the first mail order catalog in North America, which they called the “Blue Book.” Shortly after the most commonly known catalogs like Sears and JCPenney took hold and the American catalog industry took off. Yet with online stores taking off and minimizing the cost to entry the retail world, print started to die off. Fewer ads in magazines, fewer catalogs and eventually, for companies that dropped their catalogs, that  meant fewer sales. A lot fewer.

Here’s just one example:

In 2000, Lands’ End cut back on sending catalogs to consumers. The result was a mere drop in sales of $100 million.  When the company conducted a survey among its customers to see what happened, they discovered that 76 percent of their online customers reviewed their printed catalog before going online. (Research by Kurt Salmon)

Xerox has helped add even more life to catalogs by using its variable data printing machines to create personalized catalogs.  Like personalized direct mail which enables customers to see their names and transaction history in a letter written “just for them,” customers can now see their names and other personalized information references in a multipage catalog.

According to Shelley Sweeney, a VP/General Manager at Xerox, brands are seeing big increases in results.

Catalogs are re-surging, not just because they can be personalized, but because they appeal to some key psychological drivers that digital just can’t. We humans are tactile people. We seem to trust more, believe more, like more and act more when we can reach out and touch something or someone. When we hold a magazine in our hands, carry it in our bags, and feel it with our finger tips, we feel connected. And when those catalogs present stories about the products, about the people who use the products, about the lifestyle qualities, values and causes associated with those brands and products, we feel connected with brands with a veracity that is hard to get from the fleeting digital screen with all of its moving parts, pop up distractions and links to click.

Patagonia’s catalog is a great example. This epic catalog features products alongside stories from its ambassadors and customers, sharing their personal stories in ways that inspire passion and evoke bonds with the brand telling the story. They use world-class photography to showcase the lifestyle of those who love their brand. And people love the art, story and products in the catalogs to the point that it not only creates product sales, but another life of its own. You can now purchase a book called “Unexpected,” which features some of the best catalog photographs from over the years.

The Patagonia catalog is not a quick read. It’s not a fast project and it’s not about fast and furious sales. It’s about slowing down for a moment, to read, to touch, to ponder the life you want to live and can live with brands that provide you tips, ideas, inspiration, and connection with themselves and with others just like you.

Its just like Dmitri Siegel, executive creative director and vice president of e-commerce for Patagonia, says, according to a recent New York Times article.

“Catalogs are a way we’re speaking to our closest friends and people who know the brand really well.”

Catalogs, now commonly called “magalogs,” are critical tools that build connections like few other channels can. Some things just never go out of style and this form of communication is not heading that way fast. In fact, while catalogs might seem to some like taking a step backward, they are truly becoming one of the fastest steps forward. And all by slowing down to regroup on what we humans like most: tangible, credible communications about things that matter to me.

Amazon Accused of ‘Surge Pricing,’ Misleading Consumers During Prime Day

According to a recent report, a vendor who sells direct through Amazon has stepped forward to accuse the e-commerce giant of misleading business practices. Specifically, the vendor said that Amazon jacked up the suggested retail price of its product on Prime Day 2017 to make it seem like the discount consumers were getting was far better than it actually was.

According to a recent report, a vendor who sells direct through Amazon has stepped forward to accuse the e-commerce giant of misleading business practices. Specifically, the vendor said that Amazon jacked up the suggested retail price of its product on Prime Day 2017 to make it seem like the discount consumers were getting was far better than it actually was.

In the report, Jason Jacobs, founder of Remodeez — a company that makes nontoxic foot deodorizers and other odor-defense products — said he’s been doing business with Amazon since 2015 and has an agreement with the company that lists his product with a suggested retail price of $9.99. However, he found that on Prime Day, that price was nearly doubled.

“They showed the product at $15.42 and then exed it out to put ‘$9.99 for Amazon Prime Day,’” Jacobs told FOX Business. “And on the final day, the price was like $18.44. So, we put a support ticket in right away and I rallied some friends through social media to go to their complaint board and complain.”

Credit: FOX Business by Remodeez

Jacobs said the suggested price came back down to $9.99 the following day, but a little more digging showed that this wasn’t the first time Amazon did this to this product. Over the past year, Jacobs found that the suggested price of the product had been bumped up on two different occasions to more than $15. Important to note, Amazon’s agreement with Remodeez does enable it (Amazon) to set its own pricing as it sees fit.

Jacobs noticed that each time the price was increased over the past year, it correlated with media attention directed at its product. That coverage, in BuzzFeed on numerous occasions and in Forbes, led to an increase in demand for the product and, as it turns out, an increase in the suggested retail price. And those increases, according to Jacobs, caused sales to tank.

“It’s not like they’re bumping it by a buck and making a little bit more money,” he said. “They are really tanking sales and it kind of has a ripple effect to us, being a small company trying to do demand planning.”

Dynamic Surge Pricing

This kind of business practice from retailers isn’t uncommon. In fact, dynamic surge pricing — where retailers quickly change the price of products based on data-driven algorithms that look at things like demand, inventory and competitors’ prices — is a hot trend in the industry.

Think of it like surge pricing on an app like Uber. Though it did get out of hand and cause quite a controversy at one point (because of a screwy algorithm), Uber’s surge pricing is designed to enable the cost of a ride to reflect the current level of demand at any particular point in time.

It’s a practice that could make sense if executed correctly at retail. But without proper explanation to the customer, it more or less reads as a shady business practice. And the Federal Trade Commission keeps an eye out for that type of misleading sales information. Its recommendation is to make an item available at “list price on a regular basis for a reasonably substantial period of time” before setting a sale price. If a retailer appears to be veering away from that recommendation, the FTC can go after it.

Customer-Centric?

And that’s the case right now with Amazon. As part of its review of the company’s agreement to buy Whole Foods, the FTC is reportedly looking into whether the discounts that Amazon offers are actually as good as they seem to be. The FTC’s interest, more specifically, stems from a Consumer Watchdog complaint. In a report published in early July, the organization claimed that Amazon “routinely uses inflated and fictitious previous prices” to offer misleading discounts.

Not the kind of thing you expect from a company that claims right there in its mission statement that it puts the customer first…

Amazon refuted the Consumer Watchdog report, calling the study “deeply flawed” and based on incomplete data and improper assumptions. “The conclusions the Consumer Watchdog group reached are flat-out wrong,” the company said in a statement. “We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”

And in response to the vendor accusations reported by FOX Business, Amazon said “Our customers expect to come to Amazon and find the lowest prices and we work hard to meet or beat them for all customers, across our entire retail selection. The world’s prices fluctuate all the time and we seek to match the lowest price.”