Coffee may be for closers, but that’s about all the rewarding we should do. The relentless focus on transactions, conversion rates and closing statistics is well past its expiration date.
Sure you could get married on a first date, but I’ll wager that’s not the best idea.
Today the shift must be toward building relationships–and that starts with earning attention and establishing trust, not making a quick deal.
In a new model of retail KPIs we start first with awareness, which is mostly about breaking through the noise and achieving share of attention. We then focus on engagement that is intensely relevant and remarkable in the truest sense of that word. And we accept that one transaction doesn’t count for much, particularly if it’s achieved through uneconomic and unsustainable discounting. What does matter is continued engagement and interaction that, overtime, leads to loyalty (not mere frequency) and brand advocacy.
Brands that adopt this mindset and plan of action will be far better positioned for a digital-first, customer-in-charge world.
For everyone else, well, enjoy the steak knives.
Is there any?
If your experience is anything like mine, you know how seductive denial can be. Denial is the temptress that helps us avoid pain. Denial keeps us in our comfort zone like a warm bath at the end of a long day. Denial creates the sense that defending the status quo is working or that we can go around our problems rather than through them.
But mostly it creates an illusion of safety when the reality is anything but. It works incredibly well–until it doesn’t.
Denial is cunning and baffling. It’s the monster lurking beneath the surface, hiding in the closet and buried in the chatter of our monkey mind.
In a business setting, denial allows us to trumpet our booming customer acquisition statistics, while ignoring the other engagement metrics that are falling apart. It causes us to crow about our rapidly growing e-commerce business, while the reality is that it’s entirely channel shift. It’s the glowing press release, the clever Powerpoint, the rah-rah company-wide meeting or the slick investor presentation that contains all the right buzz-words, when everyone else knows it’s the proverbial lipstick on the pig.
Denial kept Sears from ever really dealing with Home Depot and Lowe’s. It kept Blockbuster and Borders from confronting digital. And on and on.
Too often denial feels like our friend, when in fact it is every inch our enemy.
As David Pell humorously reminds us: “Among the dinosaurs, there were many asteroid deniers.”
We are overwhelmed by choices. We are bombarded by information. Winning the battle for our precious attention gets more difficult by the minute.
Engage me from the outset, or lose the opportunity to build credibility, earn trust, cultivate a relationship.
Get to know me, show me you know me, show me you value me. Rinse and repeat.
So when you send me an e-mail encouraging redemption of my loyalty points when I don’t have any, you create an indelible message about your commitment to being personalized and relevant.
When your customer service reps initiate a conversation by emphasizing how much you value my loyalty, and then promptly do everything to show that those are hollow words, trust evaporates quickly (I won’t tell you who did this recently, but their initials are AT&T).
When you want to seen as a credible Presidential contender and you start a serious message with “I believe these words came from the Pokemon movie…” your fate is sealed (I’m going to miss you Herman!).
To win more than your fair share of attention, you need to start strong and engage quickly.
When you don’t, we stop listening to what comes next.
And the battle is lost.
We all know that consumers are faced with a myriad of choices. And the continuing explosion of data and connectivity often serves to make the buying process overwhelming.
This is why focusing on “The List” is critical.
We all have our Lists. If I ask you what restaurants you are likely to consider for your birthday celebration, I bet you already have your List. If I ask you what brand of car or tablet or phone or running shoes you are likely buy next, you probably have that List too.
If a consumer is already familiar with–and active in–a category, their List is largely set. If you aren’t on it already, you have virtually no chance of making the sale. And chances are if you aren’t at or near the top of their List, your odds are pretty low as well.
To make “The List” a key part of your customer growth strategy there are a few key questions you need to answer:
- For your target customer segments where do you stand on their List?
- If you aren’t at or near the top of their List, what are the factors you need to address to get there?
- If you are currently at the top of their List, what are the drivers of preserving your position and distancing your brand from the competition?
- What’s your plan to get to, and stay at, the top of “The List?”
In a world where commanding share of attention and breaking through the omni-channel blur gets more difficult by the minute, I’d get started if I were you.
And I’d probably hurry.
The retail graveyard is littered with once powerful brands that used to command strong market share and intense customer loyalty.
The current retail scene is filled with brands in–or on their way to–the intensive care unit, as they struggle to re-ignite comparable store sales and reverse declining margins.
Just this past week, former retail juggernaut the Gap announced they were closing one fifth of their US stores in yet another bid to restore their former luster. Will many of those customers that lose a nearby Gap location truly miss them, or will it be merely a minor void, quickly filled up by a myriad of other stores selling roughly similar merchandise with an equal or superior experience?
The brands that thrive in a world where mediocrity is readily apparent to all will maintain a relentless focus on their core customer segments. They will build deep insight and leverage that insight into value propositions that engage customers in unique and powerful ways. They will treat different customers differently. They will track the critical measures unique to each segment that correlate with strong share of wallet and compelling customer advocacy. They will aggressively attack any weaknesses in these measures.
And by doing so, they will build and retain relationships with the customers that matter.
The ones that would miss them if they were gone.
The retail graveyard and intensive care unit is filled with companies that failed to take these steps.
I hope you’re better than that. I hope you will act while you still have time.
For many years, companies focused on gaining share in a broadly defined market. Corporate mission statements often included phrases such as “become the undisputed leader” or “be recognized as the leading provider of X.” If you were General Electric you would exit a business segment if you could not obtain the #1 market share position (or at least a strong #2 spot).
Over time, some companies became increasingly customer-centric and started to identify more tightly defined target customer segments. Their focus became growing “share of wallet” to become their customers most preferred source of whatever it was they were selling.
While these notions remain important, a new concept is emerging, and while more difficult to measure, it is essential that brand leaders and marketers embrace it. I call it “share of attention.”
Consumers are faced with more and more demands for their time and attention. The literal and virtual mountain of e-mails, text messages, direct mail, billboards, banner ads and TV and radio advertising isn’t going away any time soon. The more time people spend on Facebook, Twitter and other social sites interacting with their “friends”, the less likely they are to engage with you and whatever it is you are selling. Yes, there is an app for that, but it’s fighting to be used with all the other apps on your customers’ smart phone or tablet.
As Seth pointed out way back in 1998, “Permission Marketing” is almost always superior to “Interruption Marketing”, but now it’s harder and harder to even get noticed–much less start building a relationship–in the growing omni-channel Blur.
The first step in building a “share of attention” growth strategy is to accept that without your customers’ attention you cannot begin to engage with them. And without engagement there is no chance to build a relationship, much less sell anything. The second step is to understand what captures your customers’ attention and why? Without awareness and insight there can be no action.
So now do I have your attention?
Social networking sites are experiencing explosive growth in membership and activity. And clearly most major organizations–corporate and otherwise–are dramatically scaling up their investment in all things social. Yet tangible evidence of success remains elusive.
Sure, it’s true that we are early in the development life-cycle, and undoubtedly it will be some time before we can measure the true impact of social media and commerce.
But I see something else going on. I believe that many brands fail to make the critical distinction between networks and tribes, and therefore risk getting it wrong. Connections lay the foundation. Tribes make things happen.
As Seth Godin lays out in his inspirational book, Tribes require a connection and an idea and a leader to propel meaningful change.
So attract more people to your site and continue to count your “followers” and your “friends” and how many people “like” your brand. It’s a good start. Necessary, but not sufficient.
But just showing up doesn’t cut it.
Activity is not engagement.
Visits don’t always lead to activation.
Interest is not passion.
When you convert your network to a tribe, that’s quality over quantity, that’s when the good stuff happens.
Do you have a loyalty program or a bribery program?
It’s one thing to recognize and reward a target customer for directing a large share of their wallet your way. It’s another thing to give blanket discounts to just about any random customer who signs up.
The best loyalty programs support a clearly articulated customer growth strategy, and use relevant and differentiated offers and experiences to retain and grow best customers. Let’s face it, customers are only truly loyal to your business when your value proposition meets their needs in a compelling and unique way–not because of a kick-back.
I’m not suggesting that cash-back and gift card promotions should not be part your promotional mix. Creating incentives for trial, to gain more customer insight or using reward points to direct specific behavior can be sensible, high ROI tactics.
But when you have to provide an extra incentive–i.e. bribe–someone to shop with you, you had better hope that you are on a trajectory to establish an on-going, profitable relationship. Signing yourself up to continually pay someone who doesn’t really fit your business model–or who is never going to be profitable–is an exercise in futility. Calling these efforts part of a loyalty program is delusion of the highest order.
If you missed the webinar that Jon Giegengack and I conducted earlier this week entitled Engaging Consumers and Growing Market Share in the “New Normal,” the recording of the session and presentation deck are now both available.
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The notion that a smart sales and marketing strategy distinguishes between suspects–consumers who MIGHT turn out to become profitable customers–and prospects–consumers who are highly likely to turn into valuable clients–is an old idea. Great sales people possess this intuition. Great marketers use customer insight, robust analytics and customer segmentation to do this more scientifically.
If you are anything like me, you may have noticed a lot of attention being given to companies that are posting seemingly impressive customer statistics.
The hot social media sites–from FourSquare to Yelp to Twitter to Facebook–have signed up millions of users (in the case of Facebook reportedly over 500 million!). But how many of these folks are actually buying anything?
Members-only “flash-sales” sites use free-shipping and high value gift cards to coax existing members to refer a friend. Are these newly acquired members turning out to be customers with a positive lifetime value, or is this mostly a land-grab to keep private equity money flowing and high-end vendors interested?
Groupon recently executed a promotion with Gap during which a reported 441,000 customers spent $11MM in just one day. That particular promotion offered $50 in merchandise for just $25. Most press reports deemed it “successful.” Really?
Successful in generating awareness? Apparently. Successful in acquiring a significant number of marketable e-mail addresses? Most likely. Successful in driving short-term revenue? Clearly. Successful in creating buzz about Groupon? You betcha.
But how many of these consumers were promiscuous shoppers, only enticed by the deep discount? And let’s face it, just about any reasonably desirable brand could generate an impressive incremental sales lift by cutting their prices in half.
Most of these hot brands are still dealing in the world of suspects. Only through time and more rigorous customer analysis will they know they are gaining prospects.
In the meantime, I remain suspicious.
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