What’s the heck is Experiential Marketing?

what-the-heck-is-experiential-marketingI have written extensively about Customer Experience management and Product Marketing rooted in Customer Experience Intelligence for years. In fact, I started practicing those methods well before the barrage of “tools” and technologies started to flood the enterprise software market. After awhile  Customer Experience became a keyword for tools to map points of customer interactions, tired market research software, re-packaged CRM tools and pretty much everything else that stopped selling.

In a way, this served to confirm that everything in business somehow exists to create and manage an outstanding customer experience. Therefore, another convoluted term “Experiential Marketing” started to be thrown around in the last few years. Wikipedia offers this definition of the term:

” Engagement marketing, sometimes called “experiential marketing,” “event marketing,” “on-ground marketing,” “live marketing,” or “participation marketing,” is a marketing strategy that directly engages consumers and invites and encourages them to participate in the evolution of a brand.”

I would like to propose that Experiential Marketing should be defined as any marketing strategy that leverages the direct or secondary experience of actual customers, with a specific product/service, to measurably impact a company’s revenue.

There are examples of Experiential Marketing activities directly associated with products or services, that produce well documented, substantial and measurable impact on revenue.

  • Any effort to encourage customers to share their experience with the product or service is a part of Experiential Marketing strategy. While you cannot often get a customer to experience your product or service prior to the purchase, hearing about the experience of others may be the second best thing. Stars and scores may not transmit actual emotions and influence the purchasing selection, but detailed accounts of how the product/service made another real person happy, may and do. The evidence is easily found with simple Google searches, but I will list a few at the bottom of this post. They also contain specific examples of measurable impact of the reviews on the revenue.
  • Food and Beverage demonstration/sampling/tasting events are great examples of Experiential Marketing, and the impact on revenue can be very immediate and dramatic. Since new brands cannot compete with the advertising budgets of Kraft and General Foods, they successfully flank major brand products with superior engagement, taste and delivery via demos/tastings  on grocery store floors. Surely, the in store product demonstration does not have the reach of  TV ad coverage, but the experience of “in your mouth” taste over an advertising image,  and  dramatically lower cost of customer acquisition, counterbalance the disparity in marketing budget. These factors led to an explosion in a number of new and emerging brands, particularly in the specialty foods category.

However, larger brands have taken notice and go on the offence. It was interesting to see Haagen Dazs setting sampling tables along Pokeman Go routes in San Francisco during the height of the game’s popularity.

The “Try-Before-You-Buy” method has been commonly practiced in B2B marketing for decades by software and other vendors. Many car buyers’ decisions were influenced by their previous experience of renting cars while traveling.

Here are the links to some references that provide data supporting the premise of this post:

The Psychology behind Costco’s Free Samples

McKinsey&Company: Developing a customer experience vision

Customer Reviews Can Improve Your Sales by 5 Times

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Attack of the Disruptor Brands: 5 Key Lessons for Retailers

Atack of the Disruptor BrandsThis is the guest post written by Kevin Leifer of ICC/Decision Support

They’re fierce. They’re hungry.

And they’re coming for you next.

Disruptor brands, that is. Scrappy startups turned consumer crazes. No one is safe; even the largest, most well-established retailers are running for their lives.

From Dollar Shave Club to Warby Parker to Birchbox, retail disruptors are taking advantage of the current industry landscape and redefining the retail customer experience. They’re challenging once dominant competitors to ramp up the pace of change. And more and more retailers are struggling to keep up.

Disruptor brands have a lot to teach us about the art and science of innovation. Whether you’re looking to enhance your brand experience or completely revamp your business model, you’d do well to heed these industry lessons. Your brand’s survival may depend on it.

1.  Innovation Is a Quest.

Successful innovators focus on tapping into consumers’ unmet needs (emotional and material) and maximizing convenience and customer satisfaction.

  • They look for new ways to reach their customers and beat their expectations.
  • They look to improve (perhaps by upending) the way they do business.
  • They make brand-relevant changes that reflect their brand promise.

Co-founded by a grad student who couldn’t afford glasses for an entire semester, Warby Parker has taken what once was a dull, expensive, time-consuming chore (buying glasses) and turned it into a hip, affordable, enjoyable experience—both online and in store.

2.  It’s an Unwavering Commitment.

Disruptor brands have people who are dedicated to pushing the boundaries and pushing the business forward. These companies keep trying new things; they take what hasn’t worked, and they make the next iteration better.

These brands aren’t afraid to fail. In fact, they expect to fail from time to time (see lesson #4). But they understand that a home run can change the shape of the business and, perhaps, the entire retail category.

Amazon, for example, continues to charge ahead without fear (and without equal). The company could settle for $88 billion in sales and roughly 47 million Amazon Prime members, but it’s far from complacent. Today, Amazon is working on replacing third-party shippers with its own shipping operation.

 

3.  It’s a Discipline.

Successful innovation isn’t an assumptions game. It’s a practice of constant listening—of culminating all customer input mechanisms company wide. These include customer satisfaction surveys (CSATs), social media interactions, and internal discussions—anywhere and everywhere contact is made.

Feedback (via social media) and measurement (via CSATs) serve two different purposes. But they’re equally important.

  • Feedback is what’s on customers’ minds. It’s unsolicited and unstructured. It raises issues and ideas that might not occur to retailers otherwise.
  • Measurement involves asking specific questions about the customer experience and analyzing responses in the aggregate, over time.

Online beauty retailer Birchbox relies heavily on customer data, requesting customer feedback on every product it ships in order to continuously refine customer/product matches. Founded in 2010, Birchbox now has over 1 million subscribers and over 800 brand partners.

 

4.  It Can Happen in Unexpected Ways.

Some innovations result from structured data collection and analysis. Others come from far left field (or seemingly from nowhere).

Disruptor brands step outside their comfortable retail space. They stay attuned to buyers, competitors, and cultural shifts. They don’t react to developments; they create trends. They go bold in ways that resonate with consumers and make sense for the brand.

In 2010, a digital marketing guru and a product development expert met at a holiday party. In the course of their conversation, they came up with the idea for Dollar Shave Club—now a $615 million company known for its unabashed marketing and intensely loyal members.

 

5.  It Won’t Succeed Every Time.

Even retail giants lose their way now and then.

  • Amazon Fresh hasn’t performed nearly as well as FreshDirect. But Jeff Bezos says the experience has taught him valuable lessons.
  • Walmart Express was the retail giant’s ill-fated attempt to compete with dollar stores. The company’s operational model (go big to keep costs low) made the express-store concept a bad fit. Walmart’s decision to locate these stores in rural areas, not far from its superstores, didn’t help.

Industry observers are often dismissive of failed ideas (“How could they not see this coming?”). But when retailers score a runaway hit, the question is always, “How did they know this would take off?”

Disruptor brands tune out the noise, the fear, and the uncertainty. When they fail, they take detailed notes. They internalize the lessons. And they move ahead at full speed, poised for even greater success.

 

 “The only real mistake is the one from which we learn nothing.” – Henry Ford

 

What’s Stopping You?

Innovation isn’t easy. Success is hard won. But with the right mindset, the right customer research tools, and people dedicated to the cause, you can position your brand to achieve industry-leading breakthroughs.

What do you see as the biggest barriers to retail innovation? Which retail success stories inspire you (or baffle you) the most? We’d love to hear your thoughts in the comment section below.

 

 

kevin from icc-decision supportKevin’s Bio:

Kevin is passionate about retail, specifically aligning a brand’s expectations of their customers’ experience with consistent execution in-store.  With expertise in leading clients toward a transparent omnichannel (on-line, in-store, call center and mobile) experience, Kevin and the ICC/Decision Services team work with clients to define the desired customer experience and use a suite of tools (including Mystery Shopping, Customer Satisfaction Surveys and Customer Intercepts) to measure that experience.

 

Linkedin: https://www.linkedin.com/in/kevinleifer

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Do We Really Need “Unbiased” Customer Reviews?

Do we need unbiased reviewsSince the advent of digital commerce customer reviews became an integral and important part of marketing. As adoption of online retailing grew, the role of customer reviews, published on e-commerce (retail) sites and third party reputation sites, became irreplaceable. Consumers, product manufacturers, distributors and retailers greatly benefit from the appropriate mining of this customers’ experiences ore.

The fact that most consumers trust customer reviews more than advertising, does not escape attention of some marketing “geniuses” who try from time to time to manipulate consumers by generating fake reviews. Inevitably these attempts backfire resulting in devastating loss to a company’s reputation and crippling legal costs. However, greed and stupidity often produce very slow learners and such attempts will never stop.

Publicity about use of fake generates a lot of attention and gives rise to variety of beliefs, such as:

  • customers reviews are mostly fake and only fools trust them

  • customer reviews are mostly written by people who want to rant about their experience. Therefore most customer reviews are negative and have little value.

  • most customer ratings are inflated and cannot be taken seriously.

As someone who makes a living mining millions of customer reviews every year for a purpose of product marketing, I can testify that all of these beliefs are mostly unsubstantiated. I could provide evidence to this effect, but this post is not about customer reviews authenticity or accuracy. It is about a role of “encouraged” reviews in the marketing value chain.

I came across an excellent article “Is Amazon Doing Anything To Fight Latest Wave of Fake, Paid-For Reviews?” written by Chris Morris and published on Consumerist website recently. This article seemingly touched a nerve as it was shared via various social media channels over 1,000 times during the first day it was published. The article questions the practice of encouraging (compensating?) customer reviews contributors by providing products (to be reviewed) at discount or free of charge. There is nothing illegal or even unethical about this practice, as long as it is transparent and properly executed. The “reference” marketing practice has been a staple in B2B world for decades, even though it is common knowledge that there are financial incentives involved.

However, this question really made me think:

“Shouldn’t the very fact that someone received something for free call into question that person’s ability to provide an unbiased point of view?”

This poses a very valid question, at a first glance. Upon consideration however, I could not recall ever seeing an “unbiased” opinion in a context of customer’s experience. I can recall balanced opinions, but not an impartial ones. This is not an exercise in rhetoric, it is an inquiry into the practical value of customer reviews.

As a shopper I see the value of a product’s average score (sum of the Liekert scores given by customers in their reviews and divided by the number of reviews for the product) only as the first filter on my journey to reduce the uncertainty of the purchase. I eliminate any product with a low average score without further investigation. I completely agree with Chris

” ignore the star rating, not just the average rating for a product but for each individual review. What is a 3-star product for one person might be a 5-star product for another. Read the actual text of the review and decide for yourself if it’s of any relevance to your needs.”

The key to success is in finding reviews of the customers who “hired that product”1 to do a “job” that is similar to the job I have to do. Here I seek partiality, bias or relevance to me and my “job”. The sentiment, price paid, discounts, etc., as long as it’s transparent, is much less relevant.

For the product “owner” (or competitor) the opinions of people who did not pay for the product is much less important or interesting. However, even in this case I would not call them completely valueless as there are opportunities to learn and utilize this content for marketing intelligence and benchmarking.

I think the real question is – can I trust a person’s ability to provide an honest opinion about using a product if this person was “paid” for providing it. We all have opinions about all sort of experiences, whether we were paid for sharing them or not. If “paid” is the only criteria for trust, how do we still believe spokespeople, journalists, doctors and other professionals.

The quality of the actual content within customer review speaks volumes about the author’s authenticity, whether they are paid or not. Mindful people can easily spot the dividing line between Motivation and Manipulation. Even algorithms can be created to discount integrity challenged content.


1 “Customers want to “hire” a product to do a job, or, as legendary Harvard Business School marketing professor Theodore Levitt put it, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” What Customers Want from Your Products

 

 

 

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Big Data Is Not Just For Big Marketing

Big Data and NO PrivacyMost discussions involving big data focus on the needs of Big Sport, Big Businesses and Big Political parties, even though some of us find it difficult to see the difference between them. We all read about the big data technologies and methods deployed for the benefit of marketing organizations. Sometimes that was done to the detriment of consumers’ privacy and caused calls for additional regulation.

However, the advances in big data methods and technologies can directly benefit multiple constituencies, including consumers, and without infringing on their rights to privacy.  Here are some examples:

Deep analysis of online customer reviews in conjunction with pricing information can help consumers to find an outstanding value as illustrated in the example below. You can find the details by clicking on the link to the article. All the relevant data came from publicly available sources and was supplied voluntarily by the guests of the concerned hotels.

SB Best Value hotel

Deeper analysis and mining of the same data can help hotel managers to get a better understanding of what differentiates their property, in the guests’ perception, from  other properties in that area. Such mining reveals root causes behind NPS numbers. The traditional, not involving big data,  methods of uncovering such intelligence require series of relationship and transactional surveys. Correlation of such findings with occupancy rate patterns will likely to produce actions that result in gaining competitive advantage. Below is an example of intelligence that can be produced by such mining of opinions.

SB Hotels scorecard

The attributes in the table above are listed in order of frequency with which the guests have mentioned them in their reviews.

Similar analysis can be performed

In summary, big data is not about a size and number of data sets, it is not about mega technology investments or invasion of consumer privacy. It is about using more than one source of internal or external data to answer legitimate, real and practical questions that benefit your customers and your business.

 

 

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End of Product

Better Mousetrap catThe phrase “Build a better mousetrap, and the world will beat a path to your door” is often used as a metaphor about the power of innovation. If it is so simple, why has building a better mousetrap been so unrewarding? Why have most new product development efforts, that follow this wisdom, resulted in market failure?

Let’s start to peel this onion by asking what “better mousetrap” really means:

  • less expensive?
  • more effective, i.e. kills more mice?
  • more attractive in appearance?

the list can go on, and incorporation of these improvements may motivate a marginal increase in units sold, but the world rarely beats a path to a door proudly labeled “new and improved mousetraps”.

Those, who subscribe to the school of thought pioneered by Clayton Christensen, would argue convincingly that the “world” would rather not beat a path to a mousetrap, preferring the choice not to deal with mice at all. It is easy to understand that customers would prefer to pay for vermin being repelled from their dwellings, rather than to buy, set the traps, and deal with the dead mice disposal. In other words, a mousetrap is not a product at all – a vermin free dwelling is what customers want.

“The customers rarely buy what the business thinks it sells them. One reason for this is, of course, that nobody pays for a product.”  Peter Drucker.

Indeed, customers pay for obtaining a desirable outcome, they “hire” a product to do a “job”. From that perspective, they would likely pay more to obtain that outcome faster and with fewer complexities. In fact, minimizing the steps in the process of obtaining a desired outcome is at the roots of true innovation, the innovation that brings commercial success. In order to be successful an innovator has to be an expert in a “job” that customers would “hire” the new product to do. Yet, most want-to-be innovators are experts in products and/or technologies their companies sell. The critical pieces of the innovation puzzle are missing:

  1. clear understanding of the actual outcomes their customers desire,
  2. intimate knowledge of how customers experience the processes they use to obtain these outcomes, and
  3. empathy to motivate an innovator to find ways to simplify their experience.

Without these three ingredients, the “magic” of innovation is not likely to happen. For all intents and purposes, you are no longer set to design a “product”, but to design a “service” to deliver a simple and consistent experience for your customers, who are trying to obtain the outcome they actually desire. The degree of simplicity and consistency, and nothing else, will truly differentiate your offering from the others and will afford you to extract premium margins.

Posted in Customer Experience CX, Product Management, Product Marketing | Tagged , , | 3 Comments