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Customer Science Blog

 

Published on AMA.org.

The grocery landscape is undergoing major changes as the multichannel movement becomes one of the biggest game-changers in the industry. According to our recent research, which analyzed the online and in-store shopping behavior of 7 million shoppers in 14 different countries around the globe, remarkable shifts in shopping will continue to impact brands and retailers, prompting change in both digital and bricks-and-mortar environments. Long gone are the days when brands and retailers had a singular in-store marketing strategy. Brands and retailers seeking to stay ahead of the online grocery channel will need to adapt to a “blended world” where consumers will be buying their groceries using both physical and digital shopping carts. Learning how to communicate with these multichannel customers is key, and shoppers are seeking greater flexibility and convenience now more than ever.

The concept of online shopping isn’t new, yet it’s experiencing significant growth, particularly in key categories of grocery retail. People around the world are increasingly turning to the Internet for their groceries. Online sales penetration is highest in the established markets and lowest in the nascent markets, according to our research. However, across all levels of market maturity, there is rapid growth in online grocery sales, with established market growth exceeding 30%, and around 90% growth in emerging and nascent markets.

The strongest factor impacting multichannel shopping is the continuing evolution of the Internet and logistics. Despite significant growth globally, the U.S. still lags behind markets such as France, South Korea and the U.K., which are more established in online grocery shopping. With broadband speed in South Korea and Europe being significantly faster, and condensed population in such areas, it is much easier for customers to order groceries online and have them delivered to their homes relatively quickly. In the U.S., the sheer size of the country makes delivery logistics much more challenging than other, more dense locations around the globe. Physical stores in the U.S. still are important when it comes to gaining acceptance for product trial. U.S. shoppers consider 26% of household items as an important online category, but only 8% would consider buying a new product for the first time online. In comparison, 36% of consumers in China would be likely to buy a new household product online, our research shows.

Multichannel shoppers purchase a wide array of products online that can be conveniently picked up at their local retailer or delivered to their door. Bulky, shelf-stable and frozen foods are categories that retailers sell high quantities of in the online channel. These categories also tend to serve as an entry point for customers new to online shopping. Categories with the highest shares of sales—frozen meat, baby care and canned foods—have an average annual growth rate of 21% online.

In terms of demographics, multichannel shoppers tend to be younger and more affluent consumers with children. In contrast, those who choose to continue shopping in-store tend to be older and more price sensitive, preferring to shop around for the best deal. Life events such as the birth of a baby tend to be a primary driver of an increased propensity to buy online. Young couples with children already are familiar with the online experience and appreciate the convenience that online shopping offers. They appreciate the freedom of being able to place an order for diapers and detergent from a mobile app at 2 a.m. while in their pajamas soothing a baby.​

To see how this trend impacts brands, dunnhumby’s research looked at online performance in relation to how well a brand’s audience matches the online shopper, as well as a brand’s understanding and response to shoppers’ path-to-purchase behavior. Brands have typically followed the standard guidelines of in-store merchandising to increase sales in the physical environment. Efforts such as eye level product placement, end of aisle support and in-store promotions obviously won’t work online. With the lack of in-store stimulus, consumers need to be marketed to in a way that follows their new path-to-purchase behavior. In response, brands are trying to redefine their online strategy with consumer’s new buying habits in mind.

Looking at these specific shopping habits, consumers select 53% of products that they have purchased previously online or in-store, acting on brand loyalty and experience. This path-to-purchase behavior is ideal for favorite brands where shoppers will continue to buy, but this makes it difficult for new brands trying to gain consideration for online purchases. Factors such as customer favorites, specific search terms, and special offers all play a role in the selection of products added to customer carts online. Based on customer behavior, promotions work very differently online vs. in-store; The end of aisle display is a staple of trade promotions in the physical world while the online equivalent only contributes to 6% of online purchases. The “in aisle” equivalents being far more important online. If brands can learn what specific search terms are being used online to find products they can utilize search terms that will result in their products being considered and ultimately purchased.

There has also been a significant impact on retailers as shoppers seek the “click and collect” experience. Traditional brick-and-mortar retailers have recognized the need to develop an online presence or risk losing their market share. With companies like Amazon, Target and Wal-Mart offering online ordering, delivery and in-store pick-up, the convenience of online shopping may trump hunting in-store for the lowest price. To compare the shift in experience, brick-and-mortar locations allow customers to engage with employees, ask questions, soak in visual merchandising and be persuaded to try new things. Retailers and brands are trying to replicate that experience with online promotions, live chat to answer questions and helpful tips or tricks in the form of blogs, newsletters and social media.  If retailers and brands can create a compelling online offer, equivalent to in-store offers, customers new to multichannel will embrace the shift to buy online.

Take the scenario of a busy working mom who spends a majority of her time in the office or at home taking care of the kids, with little time to make trips to the grocery store. If she can easily search for specific food and baby care products, order online, have the order delivered or pick up her selected items in-store, the retailer has saved her a significant amount of time and effort. For consumers to embrace the online channel, retailers will need to ensure the quality of products sold online and create an easy experience for grocery delivery or pick-up.

Multichannel shopping will continue to shape the future of the retail industry, as grocery and health & beauty brands are seeing 20% to 50% of sales through online shopping. Retailers and brands that develop a winning online strategy will be positioned to capitalize on future growth. Though there’s no formula for how to create the perfect online approach, strategically utilizing data and forward-looking strategies will ensure brand marketers and retailers stay one step ahead of the multichannel trend. As multichannel shopper data is incorporated into marketing plans, brands and retailers will be well on their way to embracing a new revenue stream and increasing brand loyalty in online grocery shopping.

 

Published on AMA.org.

The grocery landscape is undergoing major changes as the multichannel movement becomes one of the biggest game-changers in the industry. According to our recent research, which analyzed the online and in-store shopping behavior of 7 million shoppers in 14 different countries around the globe, remarkable shifts in shopping will continue to impact brands and retailers, prompting change in both digital and bricks-and-mortar environments. Long gone are the days when brands and retailers had a singular in-store marketing strategy. Brands and retailers seeking to stay ahead of the online grocery channel will need to adapt to a “blended world” where consumers will be buying their groceries using both physical and digital shopping carts. Learning how to communicate with these multichannel customers is key, and shoppers are seeking greater flexibility and convenience now more than ever.

The concept of online shopping isn’t new, yet it’s experiencing significant growth, particularly in key categories of grocery retail. People around the world are increasingly turning to the Internet for their groceries. Online sales penetration is highest in the established markets and lowest in the nascent markets, according to our research. However, across all levels of market maturity, there is rapid growth in online grocery sales, with established market growth exceeding 30%, and around 90% growth in emerging and nascent markets.

The strongest factor impacting multichannel shopping is the continuing evolution of the Internet and logistics. Despite significant growth globally, the U.S. still lags behind markets such as France, South Korea and the U.K., which are more established in online grocery shopping. With broadband speed in South Korea and Europe being significantly faster, and condensed population in such areas, it is much easier for customers to order groceries online and have them delivered to their homes relatively quickly. In the U.S., the sheer size of the country makes delivery logistics much more challenging than other, more dense locations around the globe. Physical stores in the U.S. still are important when it comes to gaining acceptance for product trial. U.S. shoppers consider 26% of household items as an important online category, but only 8% would consider buying a new product for the first time online. In comparison, 36% of consumers in China would be likely to buy a new household product online, our research shows.

Multichannel shoppers purchase a wide array of products online that can be conveniently picked up at their local retailer or delivered to their door. Bulky, shelf-stable and frozen foods are categories that retailers sell high quantities of in the online channel. These categories also tend to serve as an entry point for customers new to online shopping. Categories with the highest shares of sales—frozen meat, baby care and canned foods—have an average annual growth rate of 21% online.

In terms of demographics, multichannel shoppers tend to be younger and more affluent consumers with children. In contrast, those who choose to continue shopping in-store tend to be older and more price sensitive, preferring to shop around for the best deal. Life events such as the birth of a baby tend to be a primary driver of an increased propensity to buy online. Young couples with children already are familiar with the online experience and appreciate the convenience that online shopping offers. They appreciate the freedom of being able to place an order for diapers and detergent from a mobile app at 2 a.m. while in their pajamas soothing a baby.​

To see how this trend impacts brands, dunnhumby’s research looked at online performance in relation to how well a brand’s audience matches the online shopper, as well as a brand’s understanding and response to shoppers’ path-to-purchase behavior. Brands have typically followed the standard guidelines of in-store merchandising to increase sales in the physical environment. Efforts such as eye level product placement, end of aisle support and in-store promotions obviously won’t work online. With the lack of in-store stimulus, consumers need to be marketed to in a way that follows their new path-to-purchase behavior. In response, brands are trying to redefine their online strategy with consumer’s new buying habits in mind.

Looking at these specific shopping habits, consumers select 53% of products that they have purchased previously online or in-store, acting on brand loyalty and experience. This path-to-purchase behavior is ideal for favorite brands where shoppers will continue to buy, but this makes it difficult for new brands trying to gain consideration for online purchases. Factors such as customer favorites, specific search terms, and special offers all play a role in the selection of products added to customer carts online. Based on customer behavior, promotions work very differently online vs. in-store; The end of aisle display is a staple of trade promotions in the physical world while the online equivalent only contributes to 6% of online purchases. The “in aisle” equivalents being far more important online. If brands can learn what specific search terms are being used online to find products they can utilize search terms that will result in their products being considered and ultimately purchased.

There has also been a significant impact on retailers as shoppers seek the “click and collect” experience. Traditional brick-and-mortar retailers have recognized the need to develop an online presence or risk losing their market share. With companies like Amazon, Target and Wal-Mart offering online ordering, delivery and in-store pick-up, the convenience of online shopping may trump hunting in-store for the lowest price. To compare the shift in experience, brick-and-mortar locations allow customers to engage with employees, ask questions, soak in visual merchandising and be persuaded to try new things. Retailers and brands are trying to replicate that experience with online promotions, live chat to answer questions and helpful tips or tricks in the form of blogs, newsletters and social media.  If retailers and brands can create a compelling online offer, equivalent to in-store offers, customers new to multichannel will embrace the shift to buy online.

Take the scenario of a busy working mom who spends a majority of her time in the office or at home taking care of the kids, with little time to make trips to the grocery store. If she can easily search for specific food and baby care products, order online, have the order delivered or pick up her selected items in-store, the retailer has saved her a significant amount of time and effort. For consumers to embrace the online channel, retailers will need to ensure the quality of products sold online and create an easy experience for grocery delivery or pick-up.

Multichannel shopping will continue to shape the future of the retail industry, as grocery and health & beauty brands are seeing 20% to 50% of sales through online shopping. Retailers and brands that develop a winning online strategy will be positioned to capitalize on future growth. Though there’s no formula for how to create the perfect online approach, strategically utilizing data and forward-looking strategies will ensure brand marketers and retailers stay one step ahead of the multichannel trend. As multichannel shopper data is incorporated into marketing plans, brands and retailers will be well on their way to embracing a new revenue stream and increasing brand loyalty in online grocery shopping.

20 May 2015

It’s an all too common scenario these days: busy lives + busy jobs + busy families = little time left to do the things that really matter. Increasing numbers of women in the workplace, urbanisation, changing household structures and the growth in adoption of mobile technology are all resulting in a shift towards ‘frictionless’ solutions that make life ‘quick, easy and simple’. This growing trend gives retailers and brands a great opportunity to make a real difference to today’s consumers - across the globe - eager for stress-free initiatives that allow them to maximise their leisure time.

Winning propositions will deliver a ‘frictionless experience’ across the entire shopping trip and cut across the traditional CPG/retailer silos. Western countries are largely the pioneers of the frictionless trend, but there is huge potential for other global markets to develop innovative offerings that delight customers by making their lives simpler. The latest report in our ‘2020 trends’ series explores the activation of this trend around the globe, from in-store meal assembly concepts in the USA to 24-hour home delivery services in Asia.

Download the report here.

It’s an all too common scenario these days: busy lives + busy jobs + busy families = little time left to do the things that really matter. Increasing numbers of women in the workplace, urbanisation, changing household structures and the growth in adoption of mobile technology are all resulting in a shift towards ‘frictionless’ solutions that make life ‘quick, easy and simple’. This growing trend gives retailers and brands a great opportunity to make a real difference to today’s consumers - across the globe - eager for stress-free initiatives that allow them to maximise their leisure time.

Winning propositions will deliver a ‘frictionless experience’ across the entire shopping trip and cut across the traditional CPG/retailer silos. Western countries are largely the pioneers of the frictionless trend, but there is huge potential for other global markets to develop innovative offerings that delight customers by making their lives simpler. The latest report in our ‘2020 trends’ series explores the activation of this trend around the globe, from in-store meal assembly concepts in the USA to 24-hour home delivery services in Asia.

Download the report here.

14 May 2015

 

Published on Loyalty360

Loyalty programs are frequently clustered into “types.” These categories include points or currency based programs that give customers a real or fictitious currency in exchange for “good behavior.” Good behaviors might be shopping again, shopping within a certain timeframe, buying a specific product or buying a product from a certain promoted category. Good behaviors also contribute in some way to the organization learning, for example, providing feedback, contributing new ideas, or sharing and engaging on social media to promote the brand. These programs are a bit like being back at school - getting good marks for good behavior.

There are other types of programs as well. Membership programs that include select customers in an insider track - giving them access to content or offers that non-members don’t receive. Cashback programs that simply call a spade a spade and give customers a percentage back on what they spend with the brand. And lastly, Surprise and Delight programs that aim to create unexpected thank you moments that customers are willing to hold out for, encouraging them to return and spend with the brand.

With so many options for programs and special offerings – it’s easy for brands to feel like they are in over-drive and at a loss for what method works best.

While, “if you do X then we will do Y and you will love will us for it,” used to be the dominant logic, it’s time for that to be forgotten and other approaches to be considered. What if a surprise approach could generate the same brand engagement and equate to a bigger impact on the emotional loyalty for the long run? Does that mean the overly scientific approach to program rules and mechanics is dead? Can data marketers then throw their program business case spreadsheets out of the window?

In our UK and US study of loyalty drivers, the feeling of surprise circled close to the top of what customers care about most, especially in the ‘discover’ experience. This surprise could be a deal that customers were not expecting, a product/solution that they didn’t know they might need, or a special thank you that shows the customer that the brand has been noticing them and appreciates their loyalty. Surprising customers with something special can create a connection stronger than many businesses care to notice.

Amongst UK study participants, 55% reported that they do tell someone if they had a bad experience. Given the risk of such bad experiences turning into a ripple effect of negative sentiment amongst other customers, loyalty programs have an important role to help create and foster a positive, coherent and mindful connection with customers every day. Loyalty programs won’t rescue your business if your service, products and pricing sucks…but they can offer a feeling of surprise and interest that can set a business apart from competitors.

We all love a surprise. Our brains are hardwired for it. The Hassles and Uplifts Scale developed in the 80s debunked the myth that big events in our lives are the most important. Major life events are often not as directly important to our happiness as the little things that happen every day.

However, this isn’t about random acts of surprise pushed towards customers; just because you have a program that is based on surprise, the delight part isn’t a given. Brands still need to think carefully about what they expect customers to think and do - and make sure the proposition fulfils a clear need. Brands need to think about the psychology of a surprise and its appropriate deployment as part of a loyalty program. When the surprise element is determined, it’s vital that the proper message is being conveyed to the customer so they can truly delight in the offering – making them more likely to buy.

In our UK study almost a quarter of our study participants, told us that new products, product inspiration and ideas were of primary importance as to what drives their choice of retailer. We also learned that this is really only the case in the ‘discover’ part of their shopping experience. When customers are mindfully shopping, almost half connect ‘surprise’ to a deal hunting need.

If businesses truly listen well to their customers and pay attention to the emotional outcomes customers share about what they buy and where they buy it, a new way of looking at loyalty programs would be implemented. Looking through a different lens as to how businesses can better surprise and delight customers, traditional loyalty programs could be revaluated to better assist customers in getting what they want, in a tailored way.

So if a particular customer enjoys hunting for deals and feeling like a hero when he or she scores a great find, perhaps the ‘surprise’ is that the brand or retailer will help them discover a deal. The program could offer membership benefits which include signing up for advance notice of particular deals, alerts on thresholds for when the deal gets so good the shopper should buy now, and/or providing a way for customers to create their own custom deal. When businesses think differently about the emotional outcomes customers are looking for, customers are more likely to notice what the brands are telling them and, as a result, will be more prone to buy. Loyalty programs should work harder to appeal to customers in the ways in which they wish to shop, thus improving their shopper experience and building long-term loyalty.

Loyalty programs are frequently clustered into “types.” These categories include points or currency based programs that give customers a real or fictitious currency in exchange for “good behavior.” Good behaviors might be shopping again, shopping within a certain timeframe, buying a specific product or buying a product from a certain promoted category. Good behaviors also contribute in some way to the organization learning, for example, providing feedback, contributing new ideas, or sharing and engaging on social media to promote the brand. These programs are a bit like being back at school - getting good marks for good behavior.

There are other types of programs as well. Membership programs that include select customers in an insider track - giving them access to content or offers that non-members don’t receive. Cashback programs that simply call a spade a spade and give customers a percentage back on what they spend with the brand. And lastly, Surprise and Delight programs that aim to create unexpected thank you moments that customers are willing to hold out for, encouraging them to return and spend with the brand. 

With so many options for programs and special offerings – it’s easy for brands to feel like they are in over-drive and at a loss for what method works best.

While, “if you do X then we will do Y and you will love will us for it,” used to be the dominant logic, it’s time for that to be forgotten and other approaches to be considered. What if a surprise approach could generate the same brand engagement and equate to a bigger impact on the emotional loyalty for the long run? Does that mean the overly scientific approach to program rules and mechanics is dead? Can data marketers then throw their program business case spreadsheets out of the window?

In our UK and US study of loyalty drivers, the feeling of surprise circled close to the top of what customers care about most, especially in the ‘discover’ experience. This surprise could be a deal that customers were not expecting, a product/solution that they didn’t know they might need, or a special thank you that shows the customer that the brand has been noticing them and appreciates their loyalty. Surprising customers with something special can create a connection stronger than many businesses care to notice.

Amongst UK study participants, 55% reported that they do tell someone if they had a bad experience. Given the risk of such bad experiences turning into a ripple effect of negative sentiment amongst other customers, loyalty programs have an important role to help create and foster a positive, coherent and mindful connection with customers every day. Loyalty programs won’t rescue your business if your service, products and pricing sucks…but they can offer a feeling of surprise and interest that can set a business apart from competitors.

We all love a surprise. Our brains are hardwired for it. The Hassles and Uplifts Scale developed in the 80s debunked the myth that big events in our lives are the most important. Major life events are often not as directly important to our happiness as the little things that happen every day.

However, this isn’t about random acts of surprise pushed towards customers; just because you have a program that is based on surprise, the delight part isn’t a given. Brands still need to think carefully about what they expect customers to think and do - and make sure the proposition fulfils a clear need. Brands need to think about the psychology of a surprise and its appropriate deployment as part of a loyalty program. When the surprise element is determined, it’s vital that the proper message is being conveyed to the customer so they can truly delight in the offering – making them more likely to buy.

In our UK study almost a quarter of our study participants, told us that new products, product inspiration and ideas were of primary importance as to what drives their choice of retailer. We also learned that this is really only the case in the ‘discover’ part of their shopping experience. When customers are mindfully shopping, almost half connect ‘surprise’ to a deal hunting need. 

If businesses truly listen well to their customers and pay attention to the emotional outcomes customers share about what they buy and where they buy it, a new way of looking at loyalty programs would be implemented. Looking through a different lens as to how businesses can better surprise and delight customers, traditional loyalty programs could be revaluated to better assist customers in getting what they want, in a tailored way.

So if a particular customer enjoys hunting for deals and feeling like a hero when he or she scores a great find, perhaps the ‘surprise’ is that the brand or retailer will help them discover a deal. The program could offer membership benefits which include signing up for advance notice of particular deals, alerts on thresholds for when the deal gets so good the shopper should buy now, and/or providing a way for customers to create their own custom deal. When businesses think differently about the emotional outcomes customers are looking for, customers are more likely to notice what the brands are telling them and, as a result, will be more prone to buy. Loyalty programs should work harder to appeal to customers in the ways in which they wish to shop, thus improving their shopper experience and building long-term loyalty. 

- See more at: http://loyalty360.org/loyalty-management/may-2015-online-issue/surprising-and-delighting-customer-to-loyalty#sthash.PUmyAuxJ.dpuf

 

Published on Loyalty360

Loyalty programs are frequently clustered into “types.” These categories include points or currency based programs that give customers a real or fictitious currency in exchange for “good behavior.” Good behaviors might be shopping again, shopping within a certain timeframe, buying a specific product or buying a product from a certain promoted category. Good behaviors also contribute in some way to the organization learning, for example, providing feedback, contributing new ideas, or sharing and engaging on social media to promote the brand. These programs are a bit like being back at school - getting good marks for good behavior.

There are other types of programs as well. Membership programs that include select customers in an insider track - giving them access to content or offers that non-members don’t receive. Cashback programs that simply call a spade a spade and give customers a percentage back on what they spend with the brand. And lastly, Surprise and Delight programs that aim to create unexpected thank you moments that customers are willing to hold out for, encouraging them to return and spend with the brand.

With so many options for programs and special offerings – it’s easy for brands to feel like they are in over-drive and at a loss for what method works best.

While, “if you do X then we will do Y and you will love will us for it,” used to be the dominant logic, it’s time for that to be forgotten and other approaches to be considered. What if a surprise approach could generate the same brand engagement and equate to a bigger impact on the emotional loyalty for the long run? Does that mean the overly scientific approach to program rules and mechanics is dead? Can data marketers then throw their program business case spreadsheets out of the window?

In our UK and US study of loyalty drivers, the feeling of surprise circled close to the top of what customers care about most, especially in the ‘discover’ experience. This surprise could be a deal that customers were not expecting, a product/solution that they didn’t know they might need, or a special thank you that shows the customer that the brand has been noticing them and appreciates their loyalty. Surprising customers with something special can create a connection stronger than many businesses care to notice.

Amongst UK study participants, 55% reported that they do tell someone if they had a bad experience. Given the risk of such bad experiences turning into a ripple effect of negative sentiment amongst other customers, loyalty programs have an important role to help create and foster a positive, coherent and mindful connection with customers every day. Loyalty programs won’t rescue your business if your service, products and pricing sucks…but they can offer a feeling of surprise and interest that can set a business apart from competitors.

We all love a surprise. Our brains are hardwired for it. The Hassles and Uplifts Scale developed in the 80s debunked the myth that big events in our lives are the most important. Major life events are often not as directly important to our happiness as the little things that happen every day.

However, this isn’t about random acts of surprise pushed towards customers; just because you have a program that is based on surprise, the delight part isn’t a given. Brands still need to think carefully about what they expect customers to think and do - and make sure the proposition fulfils a clear need. Brands need to think about the psychology of a surprise and its appropriate deployment as part of a loyalty program. When the surprise element is determined, it’s vital that the proper message is being conveyed to the customer so they can truly delight in the offering – making them more likely to buy.

In our UK study almost a quarter of our study participants, told us that new products, product inspiration and ideas were of primary importance as to what drives their choice of retailer. We also learned that this is really only the case in the ‘discover’ part of their shopping experience. When customers are mindfully shopping, almost half connect ‘surprise’ to a deal hunting need.

If businesses truly listen well to their customers and pay attention to the emotional outcomes customers share about what they buy and where they buy it, a new way of looking at loyalty programs would be implemented. Looking through a different lens as to how businesses can better surprise and delight customers, traditional loyalty programs could be revaluated to better assist customers in getting what they want, in a tailored way.

So if a particular customer enjoys hunting for deals and feeling like a hero when he or she scores a great find, perhaps the ‘surprise’ is that the brand or retailer will help them discover a deal. The program could offer membership benefits which include signing up for advance notice of particular deals, alerts on thresholds for when the deal gets so good the shopper should buy now, and/or providing a way for customers to create their own custom deal. When businesses think differently about the emotional outcomes customers are looking for, customers are more likely to notice what the brands are telling them and, as a result, will be more prone to buy. Loyalty programs should work harder to appeal to customers in the ways in which they wish to shop, thus improving their shopper experience and building long-term loyalty.

Loyalty programs are frequently clustered into “types.” These categories include points or currency based programs that give customers a real or fictitious currency in exchange for “good behavior.” Good behaviors might be shopping again, shopping within a certain timeframe, buying a specific product or buying a product from a certain promoted category. Good behaviors also contribute in some way to the organization learning, for example, providing feedback, contributing new ideas, or sharing and engaging on social media to promote the brand. These programs are a bit like being back at school - getting good marks for good behavior.

There are other types of programs as well. Membership programs that include select customers in an insider track - giving them access to content or offers that non-members don’t receive. Cashback programs that simply call a spade a spade and give customers a percentage back on what they spend with the brand. And lastly, Surprise and Delight programs that aim to create unexpected thank you moments that customers are willing to hold out for, encouraging them to return and spend with the brand. 

With so many options for programs and special offerings – it’s easy for brands to feel like they are in over-drive and at a loss for what method works best.

While, “if you do X then we will do Y and you will love will us for it,” used to be the dominant logic, it’s time for that to be forgotten and other approaches to be considered. What if a surprise approach could generate the same brand engagement and equate to a bigger impact on the emotional loyalty for the long run? Does that mean the overly scientific approach to program rules and mechanics is dead? Can data marketers then throw their program business case spreadsheets out of the window?

In our UK and US study of loyalty drivers, the feeling of surprise circled close to the top of what customers care about most, especially in the ‘discover’ experience. This surprise could be a deal that customers were not expecting, a product/solution that they didn’t know they might need, or a special thank you that shows the customer that the brand has been noticing them and appreciates their loyalty. Surprising customers with something special can create a connection stronger than many businesses care to notice.

Amongst UK study participants, 55% reported that they do tell someone if they had a bad experience. Given the risk of such bad experiences turning into a ripple effect of negative sentiment amongst other customers, loyalty programs have an important role to help create and foster a positive, coherent and mindful connection with customers every day. Loyalty programs won’t rescue your business if your service, products and pricing sucks…but they can offer a feeling of surprise and interest that can set a business apart from competitors.

We all love a surprise. Our brains are hardwired for it. The Hassles and Uplifts Scale developed in the 80s debunked the myth that big events in our lives are the most important. Major life events are often not as directly important to our happiness as the little things that happen every day.

However, this isn’t about random acts of surprise pushed towards customers; just because you have a program that is based on surprise, the delight part isn’t a given. Brands still need to think carefully about what they expect customers to think and do - and make sure the proposition fulfils a clear need. Brands need to think about the psychology of a surprise and its appropriate deployment as part of a loyalty program. When the surprise element is determined, it’s vital that the proper message is being conveyed to the customer so they can truly delight in the offering – making them more likely to buy.

In our UK study almost a quarter of our study participants, told us that new products, product inspiration and ideas were of primary importance as to what drives their choice of retailer. We also learned that this is really only the case in the ‘discover’ part of their shopping experience. When customers are mindfully shopping, almost half connect ‘surprise’ to a deal hunting need. 

If businesses truly listen well to their customers and pay attention to the emotional outcomes customers share about what they buy and where they buy it, a new way of looking at loyalty programs would be implemented. Looking through a different lens as to how businesses can better surprise and delight customers, traditional loyalty programs could be revaluated to better assist customers in getting what they want, in a tailored way.

So if a particular customer enjoys hunting for deals and feeling like a hero when he or she scores a great find, perhaps the ‘surprise’ is that the brand or retailer will help them discover a deal. The program could offer membership benefits which include signing up for advance notice of particular deals, alerts on thresholds for when the deal gets so good the shopper should buy now, and/or providing a way for customers to create their own custom deal. When businesses think differently about the emotional outcomes customers are looking for, customers are more likely to notice what the brands are telling them and, as a result, will be more prone to buy. Loyalty programs should work harder to appeal to customers in the ways in which they wish to shop, thus improving their shopper experience and building long-term loyalty. 

- See more at: http://loyalty360.org/loyalty-management/may-2015-online-issue/surprising-and-delighting-customer-to-loyalty#sthash.PUmyAuxJ.dpuf
11 May 2015

 

ImageThe power of the crowd has been around now for quite a while. It was nearly ten years ago, back in 2006, when Doritos first launched their ‘Crash the Superbowl’ crowdsourced television advert. Ten years! That’s quite something, as a trend it has legs and in that time crowdsourcing hasn’t died, it’s just evolved. The next step in its evolution is ‘co-creation’, don’t use the power of a crowd, collaborate with the power of a crowd and co-create, ideate and above all take your customer’s involvement to the next level.

When the Orchard at Tesco launched back in November 2013, co-creation was a key strategy alongside advocacy and content. We played hard in the latter two areas, generating positive brand advocacy and rich user generated content through word of mouth, but six months in we wanted to experiment more with co-creation. What would happen if we empowered this community of Tesco’s most loyal and best customers as part of develop successful product ideation through a co-creation programme?

To explore this we worked with Tesco we created the #MyTescoSandwich programme which launched in September 2014, a mini programme designed to give members of the Orchard at Tesco the opportunity to co-create a sandwich which would be made and sold in store.

All we asked of members was to submit details of their favourite sandwich, (including a photo and most importantly recipe), via the Orchard website or through social media using #MyTescoSandwich. The programme ran for two weeks and during that time over 400 sandwiches were submitted.

After the two weeks, the entries were reviewed by the Tesco Sandwich Category team and shortlisted to four finalists who were put to a public vote across Facebook, Twitter and Google+. Over 7,000 votes were cast with the overall winner being…Honey-Lime Chicken, with the winner receiving a £100 Tesco gift card and the chance to see their sandwich being made.

The effectiveness of the programme lies in its simplicity. If crowdsourcing has taught us anything, it’s keep the barrier to entry as low as possible and engage your customers along the journey so you do exactly what it says on the tin, co-create.

This was the first co-creation programme that we have run through the Orchard and it’s opened the door for more, including opportunities for brands. But it’s not just about co-creation it’s about customer experiences, stories and truly listening to customers.

Image

 

ImageThe power of the crowd has been around now for quite a while. It was nearly ten years ago, back in 2006, when Doritos first launched their ‘Crash the Superbowl’ crowdsourced television advert. Ten years! That’s quite something, as a trend it has legs and in that time crowdsourcing hasn’t died, it’s just evolved. The next step in its evolution is ‘co-creation’, don’t use the power of a crowd, collaborate with the power of a crowd and co-create, ideate and above all take your customer’s involvement to the next level.

When the Orchard at Tesco launched back in November 2013, co-creation was a key strategy alongside advocacy and content. We played hard in the latter two areas, generating positive brand advocacy and rich user generated content through word of mouth, but six months in we wanted to experiment more with co-creation. What would happen if we empowered this community of Tesco’s most loyal and best customers as part of develop successful product ideation through a co-creation programme?

To explore this we worked with Tesco we created the #MyTescoSandwich programme which launched in September 2014, a mini programme designed to give members of the Orchard at Tesco the opportunity to co-create a sandwich which would be made and sold in store.

All we asked of members was to submit details of their favourite sandwich, (including a photo and most importantly recipe), via the Orchard website or through social media using #MyTescoSandwich. The programme ran for two weeks and during that time over 400 sandwiches were submitted.

After the two weeks, the entries were reviewed by the Tesco Sandwich Category team and shortlisted to four finalists who were put to a public vote across Facebook, Twitter and Google+. Over 7,000 votes were cast with the overall winner being…Honey-Lime Chicken, with the winner receiving a £100 Tesco gift card and the chance to see their sandwich being made.

The effectiveness of the programme lies in its simplicity. If crowdsourcing has taught us anything, it’s keep the barrier to entry as low as possible and engage your customers along the journey so you do exactly what it says on the tin, co-create.

This was the first co-creation programme that we have run through the Orchard and it’s opened the door for more, including opportunities for brands. But it’s not just about co-creation it’s about customer experiences, stories and truly listening to customers.

Image

11 May 2015