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J.D. Power – insight from one of the founders of Customer Experience
We had the pleasure of interviewing J.D. Power recently regarding the upcoming release of his new book titled, “Power.” Over the next couple of weeks, we will be sharing insight from the interviews in a series of articles and Q&A’s. It was a very compelling series of interviews where we discussed the formation of his company and the challenges he faced from the automobile industry – among others -- to looking at data in a different, unbiased, and necessary perspective. Dave was a champion for empowering the customer and making sure their voice was heard. Yet, he still believes there is a much that can be accomplished.
Through the discussions with Mr. Power, it was interesting to hear the challenges he faced then (and now) in getting companies to understand the complexities of the customers, data, and how surveys should not be constructed, implemented, and measured (given meaning) in-house by the same entities with the products/services produced. He implemented an amazing paradigm shift in the feedback/survey industry – a long, arduous journey -- and still believes there is room for improvement.
Dave believes that the expectations of individuals are as complex now (if not more so) than they were then, and still often misunderstood. He feels that brands are still struggling to understand the “perceptions” of their customers and are missing a very unique opportunity to create long-term loyalty. The first article will be available early during the week of June 24th, 2013.
Saying farewell to a loyalty program while another gets an increased focus!
In an article that we posted this week (Albertsons Stores Get Rid of Loyalty Card); we discussed the fact that Albertsons was phasing out its loyalty program, yet we see another grocer (Kroger’s) who is ramping up its program to improve the shopping/customer experience (in a manner that Mr. Power would hopefully appreciate). What gives here?
To see one program being phased out, and another using data-driven insight to increase its operating margins, and increase same-store sales by 3.3% is a testament to the uniqueness and POWER of a loyalty offering. Kroger is an example of program that is not about points, rewards, or thresholds. Kroger’s realizes there is inherent value in its loyalty program and its ability to create reciprocity in its relationship with its customers and impact behavior. Kroger’s takes great pride and uses great precision to glean as much insight from the “data” that leads to brand champions.
But we know to properly execute on a customer-centricity promise can be quite challenging. During a conference calk with investors and analysts, Kroger’s Chief Operating Officer Rodney McMullen said shoppers made more trips to stores and bought more per visit during the quarter.
Loyalty is about creating a behavioral shift in your consumers and having consumers take more trips and purchase more per trip is the best behavioral shift you can ask for. The mutually beneficial data insight you can attain from a well-run program can help you (as Kroger’s did) shorten wait times at checkouts, expand store-brand lineup, and also experiment with different store formats customers are seeking. This impetus for change comes from listening to the customer and creating behavioral-based loyalty – where a brand looks beyond price and places a high value on service. That is the POWER of loyalty.
Yet to tell customers that their card is no longer required (Albertsons) is a bit confusing. I agree that it’s better to shutter a program that may not be driving sufficient results. But I think allowing other programs, (fuel and Upromise programs) to continue to operate is going to be quite confusing for the consumer. The service level expectations are quite important as we wrote in the recent white paper with Kana (Understanding Customer Engagement: The Opportunities & Challenges Marketers Face Today). There are still ways to create a dialogue with customer sans a loyalty “card,” yet they (as we know) become a bit more challenging. We look forward to watching this one play out.
The dearth of statistically talented employees and it is getting worse!
A constant theme seemed to evolve in conversations I had this week with marketers. We continue to hear more from senior-level marketers about the challenges they are seeing in the market and one of the most frequent -- and most challenging -- is lack of qualified individuals that have the statistical/math acumen needed to run the complex marketing/CRM/ loyalty programs. The Wall Street Journal recently did a piece on this and we heard time and time again regarding the number of “unskilled” jobs that go unfilled. With the rapid (and increasing) expansion of data, the ability to run successful Voice of the Customer programs is going to be challenging. You can build a data center the size of the one in Utah, yet if the algorithms are not correct -- much like the NSA – you are going to have a growing number of “false positives.” This is a challenge, yet a great opportunity for loyalty marketers.
Written By: Mark Johnson, CEO, Loyalty 360 - The Loyalty Marketer's Association