Category Archives: CRM

Anonymous @ Starbucks

Coffee is an important part of my day.  I love a good cup of joe – and I’m clearly not alone – as the proliferation of coffee shops in every neighborhood and business district seems to go on unabated (Starbucks now has over 24,000 locations in 70 countries).

I’ve been a  Starbucks customer a long time – from way back when the doubters questioned consumer willingness to pay more than a dollar for a cup of coffee.  Funny that many of those same people now spend $3 and up on a latte.  I’ve enjoyed a Starbucks Venti Americano in San Francisco, LA, Portland, Seattle, Vancouver, Chicago, Dallas, Atlanta, Boston, Pittsburgh, New York, Orlando, @ the Louvre in Paris and the airport in Mexico City.  The Starbucks app is one of my most frequently used.

Imagine the quantity of data Starbucks has on me.  They know if I’m local or traveling.  They know if i’m alone or with my family.  They know that calories now matter, given my switch to a pack of almonds from a (delicious) blueberry scone.  They know if I’m commuting to the city or working from the home office.  I could go on for days – as the insight possibilities seem almost endless.

Our local Starbucks has a Clover machine.  If you’ve never had a cup of coffee from one of these – you really should try it.  (here’s a video  from Wired on the $11,000 coffee maker) The Clover machine presents the Starbucks customer with a completely different customer experience – as they can choose from a selection of premium coffee beans and have a cup specially brewed – instead of settling for whatever’s been brewed in the larger vat.  It’s not cheap: $4 vs. $2.45 for a standard grande size coffee.   Probably safe to assume that customers choosing Clover: a) spend more than an average customer; and b) buy more of the higher priced beans to take home.

So given the wealth of customer data I’ve generated over the years and a clear preference that I’ve signaled for a premium coffee experience, I have one simple question:

Why do I get the same marketing content as any other Starbucks customer?

Compare what I’ve described about myself above against a few recent Starbucks communications:

  • I opened my Starbucks app this morning to “A Splash of Spice – New Spiced Cold Brew” and a “Merry Mondays” offer to get 40 bonus stars if I spend $20 or more after 2pm”.
  • Found a similar Starbucks email in my inbox this morning alerting me to “Merry Monday”.

Pretty sure these are national promotions.  Going back through the almost daily email communications I receive from Starbucks & Starbucks Rewards shows a constant focus on “buy this…get x number of reward stars” promotions.  They certainly have nothing to do with the Sumatra I’ve been loving the last few months.

So what?  Why does it matter?  I’ll tell you why:  Starbucks is selling a Reserve Roastery subscription on starbucks.com.  For $19 a month you get “rare, small-lot coffees hand-selected exclusively for subscribers”.  What customer profile is most likely to sign-up for a subscription?  My bet: the Clover customer.  I’m a Clover customer.  Have I heard about the Reserve Roastery subscription from Starbucks?  No.

To Starbucks, I’m just like any other “star hungry” loyalty member.  Do X, get Y stars.  Admittedly, if you ask anyone in the loyalty marketing space,  they won’t be able to contain their enthusiasm for the success of the Starbucks Rewards program.  But in ignoring my data and the preferences it signals, a coffee enthusiast like myself can easily be swayed to try, for instance, the unique experience offered at Philz – or other local third wave coffee providers.

Marketers are forever searching for a silver bullet – and from a distance it might look like the Starbucks Rewards is just that (and I’m sure many loyalty marketing vendors adamantly agree).  But to ignore a wealth of customer data in favor of executing a one-size-fits-all national marketing calendar leaves the door open to competitors willing and able to focus on unique customer niches.

Instead of choosing loyalty marketing over a CRM strategy – a better alternative is to have them both compliment each other.  Fine to acknowledge that I’m a Starbucks Rewards member, but then feed me the coffee enthusiast experience that is clearly available and integral to the Starbucks brand.  Go ahead and give me 20 stars for a Reserve Roastery subscription – but learn from my data and understand that, for the coffee enthusiast segment, the experience may be a higher priority than star accumulation.  You don’t have to make a choice between CRM or loyalty.  You get to have them both.

 

The Importance of a Good Ground Game

Just as NFL teams devise complex blocking schemes to unleash their running game – and political campaigns canvas county by county to harvest every possible vote –  marketing organizations need to develop a good ground game to drive ongoing consumer engagement.

These three areas: football, politics and marketing may at first seem completely unrelated.  Common to each, however, is a less flashy, less sexy and ultimately less expensive way to achieve success.

In American football, success is measured in points scored – which are typically produced by the offensive unit.  In the majority of cases (an exception is the Dan Marino reference below), offensive strategy requires what is referred to as a “balanced attack” – meaning a proportionate number of running to passing plays.  A team who can establish their ground game from the start of a game is able to keep the defensive team on their heels,  as the defense becomes unsure what type of play will be next.  Without a ground game, offensive teams rely entirely on the passing game, which becomes more predictable for the opposing team to defend.  That’s not a problem if you have a Hall of Fame quarterback like Dan Marino – but that type of quarterback is a rare occurrence.

“There is no defense against a perfect pass.  I can throw the perfect pass.”

-Dan Marino

The passing game in football has flair and panache – while the running game is more brutal and punishing.  Putting the ball in the air can achieve large yardage gains – but also increases the risk of an interception by the defense.   In contrast, a good ground game can be almost boring with gains averaging just a few yards for each running play.  When football was described as a “game of inches”, it was the ground game that was surely top of mind.

Ground game capabilities are a vital football team investment.  A playbook of detailed blocking schemes must be created, memorized and practiced.  The offensive line must be big, healthy and strong, and a stable full of fast, elusive and sure handed running backs are needed to carry the ball.

In politics, a good ground game means having an extensive network of grass roots organizers who can reach out at the local level, voter by voter.  Phone banks are manned by volunteers who do their best to sway individual voter opinions.  Compared to expensive television ads that are broadcast to millions of potential voters instantaneously, a political ground game is labor intensive and relies upon a database of voter profile and contact information.

In the 2016 presidential campaign, Democrat Bernie Sanders is using his reliance on grass roots organizing as an opportunity to distinguish himself from the Clinton campaign, which is more reliant upon big donor contributions to Super Pacs to fund campaign efforts.  With essentially a tie in Iowa and a win yesterday in New Hampshire, it looks like Senator Sander’s ground game is paying off.

So what does this all have to do with marketing?  Well compared to Super Bowl TV ads, building grass roots brand engagement can seem downright old fashioned.  No doubt, big creative ideas can attract plenty of attention (#puppymonkeybaby), but creating ongoing interest and interaction with a brand requires a consistent and personalized approach that TV campaigns can’t deliver.  Moreover, it wouldn’t be outrageous to say that you can pretty much fund your entire marketing ground game for a year with the $5 million cost of a 30 second Super Bowl ad spot.  Engaging at the ground level requires a few basics:

1) Non-Anonymous Data:

The reason so many companies want you to join their loyalty program is to get past this hurdle: being able to attribute consumer behavior data to a specific customer.  This is much easier if you’re Costco, REI or Kroger’s than for a CPG brand sold on retailers’ shelves.

2) Insight:

Data, in and of itself, is of limited value unless it can be turned into knowledge that can inform marketing strategies & tactics.  For example, insight into how your most valuable customers differ in profile and behavior from less valuable ones is a good starting point.

3) Content:

Here’s the customer’s payoff for allowing you to collect and store their data: an experience that is tailored to their situation.  Now that you know something about your customers, the question is: what are you going to deliver that’s unique & different?

4) Customer Touchpoints:

This is where it can get expensive.   To reach your customers within walled communities (like Facebook) or on search engines or external media properties requires a sufficient ad budget.  The reason email marketing persists as a popular marketing channel is it’s relatively low cost per touch and high response rates relative to other channels.  Even configuring owned touch points like commerce sites to deliver a tailored customer experience can involve expensive redesign and even replatforming efforts.

As in football, investment in a ground game gives the marketer a balanced attack, as lower cost, targeted engagement tactics are able to drive action and awareness during periods of low air cover (i.e. mass media spend).   And like grass roots political organizing, a marketing ground game enables stronger, more personal connections to be made and leveraged for years to come.

A marketing ground game is a workhouse that delivers each and every day.  It may not be as sexy as the big creative idea, but it will still be producing when brief flashes of attention have long been forgotten.

The Future of CRM

Long before the hype of big data and personalized marketing came along, CRM utilized customer data to drive results.   Stereotyped as a function that largely provides data & infrastructure, today’s CRM is shedding the shackles of its technology platform roots to become the standard, common sense approach to driving company-wide Customer Experience (CX) improvements.

does CRM equal CX v2What is CRM?  Even the acronym is up for debate:  is it Customer Relationship Marketing?  or Customer Relationship Management?  In a desire to symbolize the evolution of CRM, some – like Disney – have boldly swapped letters in the acronym – to CMR – or Customer Managed Relationships.

CRM was born from the early days of direct marketing and grew with an insatiable desire to integrate any data about a customer from across an organization’s multitude of touchpoints.  As the internet and data warehousing have evolved, so too have the ways an organization can interact with a customer:  new marketing channels (late 90’s: email marketing & online commerce; 2004: Facebook); multiple customer service interaction points (call centers, online chat, Twitter).  The concept of a “360 degree view of the customer”- whereby all of an organization’s data about a customer resides in one accessible place – has fueled CRM technology sales for the last two decades.  But CRM hasn’t always been popular.

Back in the late ’90’s, marketers quickly realized that storing email addresses and blasting out weekly marketing emails was a relatively inexpensive and effective way to drive traffic to their newly built ecommerce sites.  When the internet bubble burst in 2000, budgets to drive eyeballs & impressions evaporated, making the email lists even more valuable.  While CRM isn’t singularly focused on email marketing, the revenue that email could drive resulted in many CRM platforms having a heavy emphasis on the first digital marketing channel.

Personal mobile devices (I recall the Blackberry being the most popular mobile device prior to the first iPhone arriving in 2007) and social networks quickly became the shiny objects that shifted executive attention away from CRM and first party data.  Why invest in a CRM ecosystem when Facebook will do it for you?  The shift of ad budgets to “digital” began in earnest – largely to drive Facebook Likes and Twitter Followers.

The social networks provided a window into the profiles and lives of actual consumers (are they buyers?  this remains a difficult question).  The portrait of real, live consumers previously produced through internal data analytics and outside primary research investments paled in comparison.  Whether “likes” equal engagement mattered little to the marketer who could, at any moment, pull up the company’s Facebook page and show actual consumer profile photos and an ever increasing Like count.  So it’s not at all surprising that just yesterday, Facebook enjoyed an enormous earnings announcement: $18 Billon (with a B) 2015 revenue (see “Facebook Reports Soaring Revenue, Buoyed by Mobile” Jan. 27, 2016, The New York Times)

Those who have invested in building millions of Facebook fans are now paying Facebook a ton of money to be able to talk to them.  On a separate path are companies who continue to pursue channel integration, whether a retailer trying to align their bricks & mortar experience with the mobile/online shopping experience, or a banks that must now consider how their online banking experience aligns with that of the local branch.  When you begin to think about multi-channel scenarios, even if within the context of what would be considered traditional CRM, the lines between CRM and CX begin to blur.  Utter the words “customer journey” and you’ve taken a big step into the land of CX.

CRM and CX holding CJ 3

So what’s the difference? (and who cares?)

As both CRM and CX are increasingly participating in a similar customer centered dialog, an opportunity exists to pursue customer experience improvements from both the top-down (CX), as well as the bottom-up (CRM).  A unified vision of the future customer journey becomes the guiding beacon to align both perspectives.

In the majority of cases, a CRM team will be significantly challenged to persuade their organization to become more “customer centric”.  However, a frustrated CEO looking to transform her company’s culture (and results) is likely to be open to a CX approach that delves into topics like an “outside-in” perspective, CX maturity and employee engagement.  Any highly qualified CX team licks their chops at the chance to facilitate an organizational transformation dialog.

On the other hand, CRM people, by nature, are cross-functional ninjas.  They’ve had to be, else they wouldn’t get good data, new analytic views or a critical customer communication mode programmed into the new app or website.   CRM jobs can also become painstakingly tactical – down deep into the weeds of program execution.  The opportunity exists to pull these folks into journey mapping discussions and provide them with a much needed view of the broader picture.  The same journey mapping discussions are key to aligning cross-functional partners and their initiatives and budget priorities.  Forget getting everyone on the same page, this is your chance to “get everyone on the same journey”.

If you work in CRM and haven’t started extending contact strategies into more holistic customer journeys – there’s no better time than the present. By talking in terms of customer scenarios and the potential impact on the customer’s experience…you can build a common vision from the ground up – one that anyone in the organization can understand and support.

There’s never been a better time to be in CRM/CX.