What Sports Teams Teach Brands About Lovemarks

Back in 2004, Kevin Roberts, CEO of Saatchi & Saatchi, put out the idea of Lovemarks: Brands that rise to such a high level of love and respect that they separate from the rest of the pack. There are a lot of brands out there — most of them are ones that we might like, but not really love.

Back in 2004, Kevin Roberts, CEO of Saatchi & Saatchi, put out the idea of Lovemarks: Brands that rise to such a high level of love and respect that they separate from the rest of the pack. There are a lot of brands out there — most of them are ones that we might like, but not really love.

Think of a graph, with axes going low-to-high with love and respect. On the lower-left quadrant is a commodity. On the highest end is the Lovemark.

The easiest example is thinking of coffee. In the low end of love and respect, the coffee is a commodity. On the high end is, of course, Starbucks. But, there’s a place that’s high on respect, but lower on love … that’s where Folger’s lives.

Folger’s is an iconic, well-established, and long-lasting brand … people like Folger’s. But in today’s crowded space of higher-end tastes, liking a brand oftentimes isn’t enough. Because while people like Folger’s, people love the premium brand Starbucks has created.

One of the concepts of Lovemarks is that people have “loyalty beyond reason” to these kinds of brands. We have relationships with them. After teaching brand strategy for 10 years to hundreds of students, I can confidently think everyone has a Lovemark brand. Each person has a brand they pull into their heart, and show to the world as an expression of who they are. Like a form of self-expression, we choose to show the world glimpses of our inner selves by the brands we choose.

And one of the kinds of brands that many of us use to define who we are is a sports team.

I recently attended The National Sports Forum, an incredible event founded and lead by Ron Seaver, who created an annual gathering for sales and marketing talent in the sports industry. People who work for teams from NFL, NBA, MLB, MiLB, NHL, MLS are there, sharing stories and techniques that work and don’t work, and generally learning and meeting with one another in an environment that’s best described as “The Forum Family.”

What is beautiful about the event — besides the people — is it reminds me what I teach in my class: sports teams are great examples of Lovemarks.

Because I grew up in Pittsburgh, I’m a big-time Steelers and Penguins fan. Even though my entire adult life has been in San Diego, the roots of these teams are so deep in my mind and heart that I’ve held a life-long adoration for these brands. Now, it’s not reasonable for me to expect them to win championships each year, but I still buy in, and believe in the teams. Even when they lose. Even when they break my heart.

I have loyalty beyond reason.

Just ask a green-clad fan going to last year’s Seattle Sounders title game, or the die-harder attending the Kansas City Chiefs Super Bowl parade. These championship teams seared enduring, unabashed, deep loyalty that goes beyond reason, into memory and emotion, of every single one of those fans. Or, ask fans of the Los Angeles Galaxy or Cleveland Browns, who didn’t enjoy the championship revelry this past season. These teams still generate love and loyalty, even through some disappointment or despair. The loyalty transcends rational thinking, and drives to the heart of a person’s identity.

I teach that you don’t have to be a big brand to be a great brand (one of my favorite brands Vibram’s is great, but not big). The great brands communicate with both love and respect to its “fans,” and the fans bring that love and respect back to them. The brands move to a place where they become part of someone’s expression of their life.

So, how can consumer, business, or nonprofit brands create this kind of loyalty? How can they become a Lovemark?

Creating a brand strategy plan around this is the first step, of course. But a plan starts with the end in mind. Instead of thinking about “gaining mindshare” or “increasing awareness,” go bigger. Think about “We want to become a part of our customers’ lives.”

To do this, every interaction needs to originate with an attitude of love and respect. It seems perhaps over-simple, but think about how you write website copy, respond to emails, answer the phones, etc. Are you acting with the highest Love and Respect for your audience? Is that what they feel when they engage with you?

No matter the size of your business, become a brand that is highest on the axes of love and respect. Become something that instills Loyalty Beyond Reason. Because when you go beyond reason into memory and emotion, you can rise up into that rarefied Lovemark status for your customers.

3 Customer Experience Tips for Marketers to Reduce Churn

Here’s the backdrop for our customer experience story. It takes most organizations months to onboard new employees to get them to full productivity. In fact, according to the Society for Human Resources Management, an effective onboarding program can take 12 months.

Here’s the backdrop for our customer experience story. It takes most organizations months to onboard new employees to get them to full productivity. In fact, according to the Society for Human Resources Management, an effective onboarding program can take 12 months. (Opens as a PDF)

Onboarding, defined on Wikipedia as “organizational socialization,” is the process by which employees gain the knowledge and skills to succeed at their jobs, and assimilate into the culture of the organization, becoming valued and contributing members of the “tribe.”

Without carefully planned and executed employee onboarding programs, employee attrition goes up, and so does corporate waste, as it costs about nine months of an employees’ salary to terminate and start over again.

This same principle applies to customer loyalty and the very high cost of losing even just one customer. Yet it’s hard to find “onboarding” programs for customers that are as robust as those for employees. Even with the cost of losing a customer being much higher than the loss of a middle management employee. When you lose a customer, you lose not just the cost of acquiring that customer, you lose the next transaction you were counting on, and you lose their entire lifetime value, which can be pretty substantial in the B2B world.

This is where a carefully concerted and executed customer experience becomes mission-critical to any businesses’ success. Interestingly enough, Qualtrics-owned Temkin Group, which conducts regular customer experience rating studies, shows that customers’ satisfaction with brand experiences is dropping. Those rating customers’ experiences as “good” or “excellent” has dropped to 38 percent, or 7 percent lower in 2018 than in 2017.

customer experience graph
Credit: Temkin Group

David Morris, CMO of Proformex, marketing advisor to Resilience Capital, and respected authority on SaaS marketing, has founded and led many businesses to exceptional growth by focusing on customer experience above all else. His mantra for success is really one simple step that if neglected could put any business out of business:

ONCE YOU GET A CUSTOMER, DO EVERYTHING IN YOUR POWER TO FURTHER ENGAGE THEM.

This simple mandate seems like one of those no-brainers for most of you reading this article; yet, if you really did an audit of your business, you’d likely find, like most businesses today, that many of your team members are so focused on getting more and more customers to meet those sales quotas that they are not all that engaged with whom they just sold.

Per Morris, “We spend thousands of dollars and huge amounts of time marketing to customers, and in some cases, a year or more to convert a lead to a customer. And then we lose a customer in a matter of months. When this happens, you spend a lot more money getting customers than you get back in revenue, and that is not a sustainable way to operate a business.”

To stop the craziness and profit bleeding from the above cycle, Morris suggests some simple tactics to re-engage customers through experiences that create the kind of partnerships and added values that take competitors and price out of the equation.

Make Sure Your Customers Are Actually Using Your Product

Nothing kills customer satisfaction ratings like customers who have not gotten around to using the products you sell them. Again, this sounds obvious. But it’s not. Professionals often sign up for SaaS licenses, marketing tools, and systems that they don’t get around to using or put off when training becomes more timely than planned. And quite often, they never get around to telling you. So when it’s time to renew, they go elsewhere.

Utilize the Tool of Face Time

And Morris doesn’t mean online. Get out to your customers office, take them to lunch, talk about the weather, sport teams, your kids. Just get out there and establish some positive energy in real time. In a world where time is one of the most valuable assets we have, giving time to someone is often more valuable than anything tangible you can offer. Customer satisfaction goes up when customers feel they are appreciated, valued and recognized for their achievements, roles and needs. Spending “real time” in the “real” vs. digital world is one of the strongest methods for building long-term customer relations, as Morris teaches his staff and uses himself.

Establish Reciprocal Transparency

Ask customers the tough questions, suggests Morris. And his definition of tough does not include, “What is your budget,” or “How quickly can you buy?” Tough to him includes, “How are we doing? What can we do better? How do we compare to others you’ve used? And how do we need to change to earn your loyalty?” Its tough when someone points out your failures and shortcomings, but until you face them and buck up to change them, you cannot succeed in securing customer loyalty, and frankly many other areas of business and life, in general.

Conclusion

To succeed in business today, you must have a plan for a customer journey that addresses every step of the way, every touchpoint, and is aligned with KPIs across your business. Creating customer journeys and experiences that result in customer satisfaction is really a simple process, as Morris points out. The key is commitment. Get commitment to a consistent process, experience and outcome for every customer, every day, vertically and horizontally within your organization. Start small, grow big and enjoy long-lasting relationships that generate sustainable revenue streams and strong ROMIs.

4 Customer Experience Lessons From Your Wait Staff

It’s not very often I give a 40% tip at a restaurant, and it’s not because I’m cheap. But the other night was a different kind of customer experience, with lessons for marketers about successful customer engagement strategies.

It’s not very often I give a 40% tip at a restaurant, and it’s not because I’m cheap. But the other night was a different kind of customer experience, with lessons for marketers about successful customer engagement strategies.

It was a crazy night and hard to find a restaurant that could take our party of seven. We were stressed and so was the wait staff, who had plenty of reasons to be stressed and just go through the motions to get the job done.

This young man was different. He replaced the stress of the night with a calm smile. He asked about our evening and totally empathized with our “issues,” never mentioning his own. He told us in advance that the cook was a little behind but he would do his best to get us served quickly.

He noticed we were hungry and it was late so while our order was being processed, he brought us a complimentary appetizer; nothing expensive, but enough to tide us over. When he brought us our order, it was faster than we expected  given the crowd, and it was clear he had listened to our special needs, made sure that everything was just as we asked it to be, and had even gone a step further to make sure my gluten-free daughter was not exposed to any gluten indirectly.

And throughout dinner, he checked in. With a smile. And asked how we liked our food, did we have any other needs or even suggestions? His conversations were relevant and cheerful to the point that we left feeling like we had made a new friend.

It was a pleasure to leave him a $40 tip.

Waiting tables may seem like a simple process that is simply a routine. Yet there are a lot of insights to gain here for customer engagement strategies and success. Let’s change this scenario to a sales call:

  • You have a customer who is stressed, tired and needs a solution soon.
  • You have a big backlog or a long queue of customer orders.
  • Timing is critical for this customer and, if you can’t deliver, they may go elsewhere.
  • They have some very specific needs that have to be met with precision.

Implementing What We Learned

So how do you “serve” them to get them to purchase,then to satisfaction and loyalty?

Recognize upfront and immediately a customers’ stress, anxiety, and needs. Empathy for those needs and issues goes a long way. We connect with people who are like us, understand our pain and concerns, and give us even a little hope that they will be resolved.

While challenges and obstacles can’t be overcome in a day in most cases, find a way to minimize the pain (or hunger) with a small service or added value while they wait for the full resolution. Be transparent about any shortcomings you might have for providing the products or services needed and assure customers you will do your best to meet their needs. Regardless of your business, you can almost always find something to ease the process. If your wait time is longer than normal, offer a discount for their patience, which gives them a reason to stay with you vs. shop for a faster solution.

Follow up. It is simply amazing how much money is left on the table (and I don’t mean tips) after sparking interest in your products and then not following up personally with a close. With all of the emails and ads and messages we are exposed to daily, while multitasking at home or at work, we simply do not respond to messages of interest immediately. But when someone calls us a few days later to see if we have all we need, we often go for the order, just like we often go for dessert when we had no intention to before being asked if we wanted that tiramisu or chocolate mousse vs. the fresh key lime pie?

Conclusion

Pay attention next time you have a really good waiter and watch how subtlety and skillfully they earn a good tip by following these simple steps above. Try the same kind of touchpoints in your customer journey and watch your sales and stickiness take off!

Psychology of Choice for B2B Marketing

Addressing personal values matters in B2B marketing — more than most might think. In fact, research from Motista and ThinkGoogle shows that B2B brands have more emotional bonds with their customers than B2C brands. Their findings showed that B2B brands had emotional connections with around 50% of their customers.

Addressing personal values matters in B2B marketing — more than most might think. In fact, research from Motista and ThinkGoogle shows that B2B brands have more emotional bonds with their customers than B2C brands. Their findings, which involved researching more than 3,000 brands, showed that B2B brands had emotional connections with around 50% of their customers and B2C brands had that coveted connection with only 10% – 40%.

So how do you get someone emotional about buying accounting software? Ordering a machine repair? Paper supplies and other products and services that are not known for creating warm fuzzies?

Its actually really simple: You don’t.

You get them excited about what really matters? Self actualization.

Remember Maslow’s hierarchy of needs? And that little tiny part at the apex of the pyramid he labeled “actualization”? Well, whether we get there or not, we aspire to be there. One way or another. Down deep, we aspire to do something greater than our parents did. Greater than most think we can do. Greater than our current routine?

We want to be that next great writer. Artist. Rapper. Comic. Or top-achieving business executive.

We think about these things, and then we go right back to the moment at-hand. Being the best we can be at what we are doing day-to-day. This is what we marketers need to focus on. First.

If we can provide customers and prospects with the hope that we can help them succeed at their jobs, get a promotion, maintain stability to provide for their families, achieve their short- and long-term goals, we will capture their attention.

And if we can provide more than hope, such as actionable advice that helps them refine their skills, do something better than before, we will trigger that very important response — dopamine rushes — that creates emotional bonds and passion that will be hard for anyone to break.

How do you go about doing the above? Ask your customers. Instead of asking about ways you can better serve them, keep their business, and so on, ask what they need help with beyond your products.

Start with:

  1. What are your greatest challenges each day?
  2. How are you being evaluated for your job performance?
  3. What skill gaps do you feel are holding you back?

Then create materials and activities that help them overcome these challenges. If you can do this, you will create emotional bonds that are much stronger than price, and even convenience to some degree.

It’s true that whomever provides the guidance, insights and confidence that make a difference in our world becomes a partner, not a supplier. And that distinction is what creates those bonds that secure loyalty, sales and marketing ROI.

How Blockchain Is Beginning to Increase Customer Loyalty

Customer acquisition vs. retention is a debate that has continued to rage for decades. But in a digital age of personalized experiences, customer loyalty is once again a very hot topic and many of the biggest brands are turning to blockchain technology. Now some of the biggest airlines are replacing Airmiles with crypto.

According to Forrester Research, most online retailers invest around 80% of their online marketing budgets on acquiring new customers. However, most people reading this already know that it costs five times more to secure a new customer than it does to keep an existing one.

Customer acquisition vs. retention is a debate that has continued to rage for decades. But in a digital age of personalized experiences, customer loyalty is once again a very hot topic, and an increasing number of companies are turning to blockchain to finally disrupt and bring the loyalty business into the 21st century.

Although it could be described as the epitome of first world problems, many of us don’t want to download an app on our smartphone for every airline we travel on. We have unwittingly created a never-ending list of exchanging points from a myriad of program partners and it’s cumbersome at best, and it shouldn’t be. Thankfully, there seems to be a wind of change in the air and blockchain technology is already beginning to prove it’s much more than another buzzword.

Airline Loyalty Programs Go Crypto

When thinking of blockchain and cryptocurrencies, you could be forgiven for thinking of pie in the sky projects built on empty promises that never come to fruition. But, maybe we should be thinking differently, especially now that Singapore Airlines is introducing a blockchain-based loyalty program and even replacing its air miles with cryptocurrency.

It seems that we are moving into a phase of real-world adoption and although this technology is still in its infancy. We are looking at the radical transformation of traditional loyalty programs as we know them. The current system does not work and is leaving many people with a strong sense of loyalty program fatigue.

What if Blockchain could provide a frictionless system that was both cost-effective for both brands and customers. It would be much easier to increase engagement if you could store all of your collected points in a singular digital wallet. The good news is that this could be one of the many reasons why some of the worlds most prominent airlines are replacing air miles with crypto.

In July, Singapore airlines launched KrisPay and proudly declared that it was the world’s first blockchain-based airline loyalty digital wallet. The technology behind the new system was developed in collaboration with KPMG Digital Village and Microsoft.

“By creating a miles-based digital wallet which integrates the use of miles into their daily lives, KrisFlyer members have yet another way to use miles instantly on everyday transactions.”
—Singapore Airlines CEO, Mr. Goh Choon Phong.

The Blockchain Loyalty Platform Happy Hour

Elsewhere, qiibee, the decentralized blockchain-based loyalty ecosystem, is aiming to provide a loyalty platform and developer interface on which every loyalty application can be tokenized. But, it is attempting to revolutionize the loyalty industry and refreshingly not with promises of technological innovations, but with partnerships and real-world adoption.

Germany´s leading cocktail bar and restaurant chain, Sausalitos is already on board rolling out a new loyalty program. Elsewhere in Europe, Swiss coffee brand Lattesso is also releasing a blockchain-powered loyalty program on the qiibee ecosystem, but this is just the beginning.

Italian Retail Association Confimprese recently formed a strategic partnership that will bring together relationships with some of the world’s most renowned brands across multiple industries. Confimprese’s members include KFC, Disney, Pandora, and petrol station network Agip, with over 6,000 points of sale in Italy.

Although it’s unclear at the moment at which brands will be taking part, the Swiss loyalty token protocol is already helping brands around the world run their loyalty programs on the blockchain. But, this is just a handful of examples of how customer loyalty programs are on course for inevitable transformation.

“Customers worldwide are familiar with air mile programs and loyalty points, and although these are important practices for retailers and brands, customers are limited and restricted in how they can utilize their points and rewards. Now Lattesso customers will be able to exchange their loyalty points for cryptocurrencies from their smartphones.”
—Gabriele Giancola, Co-founder, and CEO of qiibee.

There are many more examples of how the worlds biggest brands are beginning to rethink customer loyalty using blockchain. Now that we all know that it’s merely a decentralized ledger that is unchangeable and fully transparent, maybe the buzzword itself can be retired so that the tech can become invisible.

By providing greater transparency to consumers and more control over their loyalty programs to improve the customer experience. Early indicators suggest that loyalty points will eventually be replaced by tokens that enable users to transfer between friends or redeem for purchases.

It will take several years for this technology to truly enter the mainstream, but with the world’s biggest airlines already embracing it, maybe the future is much closer than any of us realize.

When ‘Customer Service’ Makes Things Worse

When a customer has to contact customer service, you’ve already messed up. When that customer service is lacking, lazy or downright stupid, it might as well be an ad for your worst competitor. And this weekend, a Windows 10 glitch and bonehead customer service nearly sent my household to the waiting arms of Apple.

When a customer has to contact customer service, you’ve already messed up. When that customer service is lacking, lazy or downright stupid, it might as well be an ad for your worst competitor. And this weekend, a Windows 10 glitch and bonehead customer service nearly sent my household to the waiting arms of Apple.

So, the situation was this: With the latest updates, some Windows 10 computers are running into an issue where the PC suddenly stops recognizing the mouse and keyboard. This isn’t even a new issue, some users have been experiencing issues with this since the upgrades started. And this weekend, that happened to my home desktop (right in the middle of my wife using it, too). Both devices worked fine in the system boot menu — so the issue wasn’t with the hardware or USB drives — but once Windows started … nothing.

Smash computer gifSince our desktop does not have a touchscreen, voice interface or mind-reading attachment, it was effectively bricked. All I could do was restart it and access the boot menus during start-up, and the only useful thing there was a full hard drive factory image rest. (This was also how I found out Windows 10 no longer has the old reliable safe mode.)

OK, I know this game. I need to go find a driver or something and figure out a way to install it with a rescue disk of some sort. … I’m never, ever getting this time back,  but I should be able to find what I need to fix it.

To the Googles I Go!

(Side note: Don’t mistake that for a chipper mood. There is no wasted time I resent more than time wasted fixing a computer problem the OS created.)

One of the trends that’s emerged in customer service, especially around computing, is the customer service forum. Rather than man countless customer service lines, a manufacturer sets up a forum where it hopes customers will help each other with their problems. It may even staff the forum with CSRs (perhaps AI CSRs).

So I find my way to the Microsoft forum where at least a few other users are running into the same problem. And the reply from the Microsoft support person is to launch the hardware device troubleshooter by pressing the Windows Key and X. …

Remember, this is to fix a computer where the keyboard and mouse are not working.

Oh, but he has other advice: Uninstall and reinstall the keyboard and mouse drivers … Also by pressing Windows Key and X …

After some incredulous replies, another Microsoft rep posts a different answer: Perform a “clean boot” (apparently this replaced safe mode) by … using the mouse to pull up the system configuration menu and navigate around that to start the clean boot.

Now, I’ve been a lifelong Windows user at home. I’ve used Apple machines at work for years because that’s what publishers tend to provide for the creative teams, but at home I’ve been a pretty loyal Windows user. I even have an Xbox.

And I swear by the time I was done this weekend, I was pricing out Macs for my home. I’ve never seen a more effective ad for Apple products in my entire life than the idiocy of some of the Windows customer service.

So, I did the only logical thing and performed a hard disk factory image restore via the manufacturer’s boot menu (not Microsoft) … And now I am once again the owner of a Windows 7 machine.

This is not the outcome Microsoft wanted.

So, my advice to all marketers, especially IT marketers, is mind your customer service. Because it only takes a few stupid customer service replies to make a loyal customer rethink your entire ecosystem.

1 Ingredient for a Happy New (Marketing) Year

Business success has long been founded on making products that make people happy and making people happy about products. For most, the driving vision and mantra has been: Make people happy with my product and service and they will come back for more.

Business success has long been founded on making products that make people happy and making people happy about products. For most, the driving vision and mantra has been: Make people happy with my product and service and they will come back for more.

Yes. And no. Many studies on human happiness find that “Happiness” from materialistic, external things is fleeting and does not always result in repeat business. In fact, it rarely does. We may be happy with a buying experience. And we may tell people about it as it occurs — and intend to go back for more. But then once the novelty of the product purchased wears off, we move on to new things and find new sources of “happiness.”

This kind of happiness, the kind that comes and goes — and is assigned to new products, places or people — is often no more than a dopamine or oxytocin rush. They’re hormonal experiences that make us feel exuberant, ecstatic, on top of the world, loved and appreciated. At least for a moment.  Creating these feelings among our customers can bring them back for more product when they need that happy rush again. But it is not sustainable for the long-term in a market where they can get similar rushes of “happy” feelings from competitors who can imitate, duplicate and replicate anything you do faster than ever before. Or in a market with customers who are well-conditioned for instant gratification, and so the demands and expectations to keep them happy change instantly, too!

So what’s a product marketer to do? Ugh.

Do we buy more technology? Clean more databases? Create more content and social dialog and push it out more often?

While all of the above may work for generating sales and happy customers for the short-term, what is it that we can do to generate a lasting commitment, long after the novelty of our product or initial experience wears off? It’s kind of like asking what keeps couples together after the hormonal rushes and honeymoon become past tense.

You might be thinking, “build a better experience,” “create more emotional relevance and value through better relationships,” and many of the things discussed in my posts over the years. And yes, these matter, but there’s another element that is critical and not often thought of building customer bonds— culture.

There’s a lot of sociologists, bloggers and reporters out there trying to discover the “happiest place on earth” and many of those on this mission end up at the same place.

Denmark

Denmark was just named the “Happiest Country on Earth,” per the United Nations’ “World Happiness Report,” according to an article recently published by CBS News.

It may seem odd that the happiest place is not some tropical island where its always warm, sunny, and pina coladas run free for locals and tourists. Instead, it’s Denmark, where it can be cold, dark and a bit on the dreary side in terms of climate — with rain 50 percent of the time.

So why Denmark? It’s the perfect example of how a culture has more lasting impact than purchase alone.

Here are some insights:

While Denmark’s culture has many elements to it, there are three that stand out to me as elements we marketers can bring home to our brands. These are:

Equality

Loyalty programs have morphed into elitism for VIP customers. And while these programs may be profitable, they can also be limiting in terms of acquiring new customers and keeping a base of steady but lower transaction value customers who provide the long-term stability all brands need. In Denmark, equality reaches a different level. People view each other as equals, despite occupation and income, and thrive on socializing often with people who have like hobbies and interests, building bonds on common values — not common bank accounts. I loved the example shared on a site promoting tourism to Denmark, quoting a garbage man about how he feels comfortable with lawyers and doctors because wealth does not matter as much as time with friends and family, as well as what you do to bring light and warmth to your circle and to others around.

How Does This Apply to Marketing?

Quite simply. Instead of finding ways to elevate the elite in your customer base, find ways to make all customers feel equally important. One of the things that just baffles me is how airlines treat you so blatantly differently for boarding. Remember how airlines used to roll out a red carpet for first class and extremely high mileage customers? What a blatant statement of inequality to all of those whose collective value for economy fare far outweighed the value of the six to 10 first class tickets who were made to feel like superior human beings. Yes, give perks to high-transaction and high-value customers, but not in ways that make others feel worthless. Present experiences and interactions that make people feel like your most important customers. It’s not hard to do.

Social Values

Hygge (pronounced hug) refers to the Danish ritual of enjoying life’s simple pleasures and embracing friends, family and graciousness over wealth, status privileges and materialism. This translates into a culture where all feel welcome, appreciated and secure. These feelings translate into staying power and loyalty for consumers to brands. When people come together to celebrate bonds, relationships and kindness, they create a welcoming atmosphere of acceptance and safety that outweighs the fleeting joy of a new toy, digital widget or out-of-the-normal experience. People go back to social circles like chess clubs, book clubs, cooking groups and so on, where they can mingle with like minds and feel equal, despite their social status or wealth contribution to the hosting organization.

Marketing Application

Bring customers together just because. Not to try or buy a new product or to spark sales in any way, but to do what the Danes do — share light, warmth and friendship, and create an atmosphere of coziness and happiness. We will come back to these experiences and communities and stay loyal to those who continue to make us feel enlightened and valued at the same time.

Trust

Despite being one of the most written about and overly discussed topics, it still is and will always be the structural pillar of strength and success. Trust is one of the primary cornerstones in the Danish culture, and in ways that would be scary in our U.S. culture. Danes are comfortable using the honor system in business and letting kids play alone at parks while parents shop nearby.

Elevating Trust

Consumers need to have unbridled trust that they can count on brands to:

  • Deliver on the product and service promises made directly and indirectly in all communications, promotions and experiences.
  • Stand behind all purchases and meet customer expectations for service, refunds, returns, repairs and so on.
  • Create an atmosphere of transparency on all levels. By sharing financials, corporate values, updates on product and industry issues, and other insights to keep customers informed about your brand and related issues, you build indirect trust that creates that sense of hygge mentioned above and stronger emotional bonds that transcend price and other competitive elements.

Essentially, when you build a culture, you build a community. And building communities is critical in a world where consumerism is turning to minimalism; people are turning to experiences over materialism; and trust and respect for business is waning. It’s is critical for short- and long-term success. Largely because people flock to communities more than they do to products or brands that distribute them. As we learn from religious and political “communities,” we humans tend to stay aligned with people who reflect our values, as well as build our sense of belonging to a safe, secure group that understands us and what motivates us.

Takeaway

Study what matters most to your consumers in terms of values, lifestyle and culture. Create events, experiences and communications around those values, and find ways to bring customers together around those values. State Farm is a good example of just this. If you go to the brand’s website, you can find a calendar of volunteer events you can join along with local agents in order to further good causes in your community, and of course experience “hygee” with agents and employees that can result in sales and loyalty.

The Secret Sauce for B2B Loyalty Marketing

Who’s likely to be your valuable customer? What will their value be in next few years? How long will they continue to do business with you? Which ones are in vulnerable positions, and who’s likely to churn in next three months? Wouldn’t it be great if you could identify who’s vulnerable among your valuable customers “before” they actually stop doing business with you?

B2B loyalty
“business-agreement,” Creative Commons license. | Credit: Flickr by Kevin Johnston

Properly measuring customer loyalty is often a difficult task in multichannel B2B marketing environment. The first question is often, “Where should we start digging when there are many data silos?” Before embarking on a massive data consolidation project throughout the organization, we suggest defining the problem statements by breaking down what customer loyalty means to you first, as that exercise will narrow down the list of data assets to be dealt with.

Who’s likely to be your valuable customer? What will their value be in next few years? How long will they continue to do business with you? Which ones are in vulnerable positions, and who’s likely to churn in next three months? Wouldn’t it be great if you could identify who’s vulnerable among your valuable customers “before” they actually stop doing business with you?

Marketers often rely on surveys to measure loyalty. Net Promoter Score, for example, is a good way to measure customer loyalty for the brand. But if you want to be proactive about each customer, you will need to know the loyalty score for everyone in your base. And asking “everyone” is too cost-prohibitive and impractical. On top of that, the respondents may not be completely honest about their intentions; especially when it comes to monetary transactions.

That’s where modeling techniques come in. Without asking direct questions, what are the leading indicators of loyalty or churn? What specific behaviors lead to longevity of the relationship or complete attrition? In answering those questions, past behavior is often proven to be a better predictor of future behavior than survey data, as what people say they would do and what they actually do are indeed different.

Modeling is also beneficial, as it fills inevitable data gaps, as well. No matter how much data you may have collected, you will never know everything about everyone in your base. Models are tools that make the most of available data assets, summarizing complex datasets into forms of answers to questions. How loyal is the Company XYZ? The loyalty model score will express that in a numeric form, such as a score between one and 10 for every entity in question. That would be a lot simpler than setting up rules by digging through a long data dictionary.

Our team recently developed a loyalty model for a leading computing service company in the U.S. The purposes of the modeling exercise were two-fold:

  1. Find a group of customers who are likely to be loyal customers, and
  2. Find the “vulnerable” segment in the base.

This way, the client can treat “potentially” loyal customers even before they show all of the signs of loyalty. At the opposite end of the spectrum, the client can proactively contact vulnerable customers, if their present or future value (need a customer value model for that) is high. We would call that the “valuable-vulnerable” segment.

We could have built a separate churn model more properly, but that would have required long historical data in forms of time-series variables (processes for those can be time-consuming and costly). To get to the answer fast with minimal data that we had access to, we chose to build one loyalty model, making sure that the bottom scores could be used to measure vulnerability, while the top scores indicate loyalty.

What did we need to build this model? Again, to provide a “usable” answer in the shortest time, we only used the past three years of transaction history, along with some third-party firmographic data. We considered promotion and response-history data, technical support data, non-transactional engagement data and client-initiated activity data, but we pushed them out for future enhancement due to difficulties in data procurement.

To define what “loyal” means in a mathematical term for modeling, we considered multiple options, as that word can mean lots of different things. Depending on the purpose, it could mean high value, frequent buyer, tenured customers, or other measurements of loyalty and levels of engagement. Because we are starting with the basic transaction data, we examined many possible combinations of RFM data.

In doing so, we observed that many indicators of loyalty behave radically differently among different segments, defined by spending level in this instance, which is a clear sign that separate models are required. For other cases, such overarching segments, they can be defined based on region, product line or target groups, too.

So we divided the base into small, medium and large segments, based on annual spending level, then started examining other types of indicators of loyalty for target definition. If we had some survey data, we could have used them to define what “loyal” means. In this case, we mixed the combinations of recency and frequency factors, where each segment ended up with different target definitions. For the first round, we defined the loyal customers with the last transaction date within the past 12 months and total transaction counts within the top 10 to 15 percent range, where the governing idea was to have the target universes that are “not too big” or “not too small.” During this exercise, we concluded that the small segment of big spenders was deemed to be loyal, and we didn’t need a model to further discriminate.

Stephen Yu's B2B loyalty marketing chart
Credit: Stephen H. Yu

As expected, models built for small- and medium-level spenders were quite different, in terms of usage of data and weight assigned to each variable. For example, even for the same product category purchases, a recency variable (weeks since the last transaction within the category) showed up as a leading indicator for one model, while various bands of categorical spending levels were important factors for the other. Common variables, such as industry classification code (SIC code) also behaved very differently, validating our decision to build separate models for each spending level segment.

United Airlines: Securing Customer Loyalty That Money Can’t Buy

It’s not about points or free gifts anymore; it’s about what money can’t buy.

United brand image
(Image via United Airlines)

It’s not about points or free gifts anymore; it’s about what money can’t buy.

This is what Praveen Sharma, VP of loyalty for United Airlines, tells me about what it takes to keep customers loyal to brands in an age where consumers have more power and options than ever before.

MileagePlus, one of the airline industry’s most successful loyalty programs, is built around creating customer experiences — not just free flights, like most frequent flyer programs. According to Sharma, these experiences can include a training day with your favorite pro sports team, or a session in a flight simulator, VIP luxury venues and other experiences that are not for “sale.”

By allowing MileagePlus members to use their points for aspirational experiences that deliver emotional fulfillment vs. just a free airline ticket or upgrade to First Class, United Airlines’ customers remain loyal to a brand, regardless of price. As a result of rewarding customers in unexpected ways, and by allowing members to choose their rewards, MileagePlus is the largest loyalty program in the industry, with more than 100 million members.

So what’s in your loyalty program? Chances are, you’re still offering one free product for every 10 purchased, or points redeemable for a free hotel night, for 10 percent off their next purchase of $200 (not a big deal by the way), and other way-too-common ways for rewarding customers.

Loyalty today is not about price. It’s not about “free” anything. As United Airlines has discovered and proven under Sharma’s leadership and dedication to providing emotional value over monetary value, it’s about the “feelings” you create among the customers you serve. Feelings come from how you are treated, unexpectedly and expectedly.

For example, a friend of mine flies United almost weekly, all over the world for his business. When he had a tight connection at a large airport with terminals far apart, there was a car waiting for him at his gate, ready to take him to the next gate. That kind of attention to individual customers’ issues and acting on imminent needs is what creates brands like United Airlines that last not only for a customers’ lifetime, but for generations of customers over decades of change.

No matter how large or small your brand may be, there are many lessons here for every business for creating loyalty programs that enable your sales, profits and marketing ROI to soar to new heights.

Here’s just a few tips from Sharma and myself:

  • Build an Ecosystem: Build a network of partner brands that reflect your brand’s standards and value, and complement or support your offerings. Align with brands that can provide experiences for your customers beyond your product line, that offer supplemental experiences, services and products, and are as eager as you are to reward each others’ customers with new offerings and ideas.
  • Build Your Data Capabilities for learning and communicating instantly across all channels your customers use: mobile, phone, email, social. Communicate on what matters to customers, not just what matters to you.
  • Use the Rule of Five to send tips, ideas, informational notices, updates on services, products or, in the case of United, changed gates or ETAs. Send five messages about the customer before you send one message about what you have to sell.
  • Create Points of Engagement that enable you to learn. Surveys still work, but so do other tools. Consider creating a loyalty board with a diverse mix of customers to learn firsthand what you need to do to keep loyalty up and growing via evangelism. And insert a one-question survey each week on your website to keep the dialogue and insights flowing.
  • Never Set the Loyalty Trap. Some companies and business models wittingly and unwittingly “trap” customer loyalty with sales models that make it really hard to switch brands. SaaS contracts are an example of how this can happen, because of the upfront time and energy required for most subscription-based services. Once you get clients set up to use your product, trained and “vested” with time and money, it is hard for them to cancel that contract, even though you’ve given them many outs, because they will lose too much time and money to start over. However, these traps, when set intentionally, rarely work. If your onboarding, product functionality, service, support and other aspects do not meet expectations and trigger satisfaction more often than not, customers will make the effort to change and will tell everyone they know to go with them.
  • Reward Loyalty With Experiences, not just product. Consumers define a brand’s value to them by the experience and emotional value delivered more than anything else. Price and customer service can be replicated quickly and easily by just about any competitor. But experiences and feelings of achievement, appreciation, joy and security, not so much. This is why MileagePlus offers experiences of a lifetime that money can’t buy; like the training day with a professional sports team or flight simulator sessions mentioned above.

Takeaway

No matter how big or small your business reach, or how large your customer database is, you can define and deploy strategies and experiences to create loyalty. Think big, think differently, and think about the “emotionally rewarding” value that your brand is uniquely set up to deliver — time and time again.