When I read about Boomerang Commerce on Geekwire yesterday, I knew it was time for this post. They get it. Mercent gets it. BigDoor gets it. And from what I understand, PushSpring and HealthSparq get it.
I talk a lot about telemetry data and behavior vectors. This is all about the intersection of knowing what’s most important to the customer (it’s one of five things – which I will elaborate on in my next post), and what their sentiment is (are they happy, angry and as a result are they almost loyal, or becoming less loyal). But I am getting ahead myself.
What I call the “Jed Clampett Scenario” runs rampant in too many businesses today, and for those that serve numerous customers on their premises, it is killing them: ignoring valuable customers who appear to be anything but. Clampett was the patriarch of the popular 1960s’ TV series Beverly Hillbillies family, which came into oil wealth but maintained their backwoods ways after moving to that tony Los Angeles suburb. Proprietors who didn’t know about the Clampett’s wealth often treated them shabbily – until they found out about their money.
But a growing number of firms from Walt Disney Co. and Macy’s Inc. to Starbucks and Jack in the Box are making big investments to end the Jed Clampett Scenario. They are using mobile, big data, data science, and other technologies to identify customers when they come onsite, simplify their logistics (especially finding and ordering things) and dramatically improve their experience. Their customers are purchasing more, obtaining more value out of their trip, and getting more reasons to come again.
These companies are at the bleeding edge of on-site customer experience management. Until the last decade, this was largely the concern of a select few industries, especially luxury hotels and resorts. But creating a great on-site experience has become the Holy Grail for retailers, restaurant chains, airlines, theme park operators, hospitals, and sports teams, to name a few. Still, given the large and often-bewildering number of technology options, understanding what to do (and not do) without going broke has become paramount.
To comprehend this technology Tower of Babel, it helps to think about how companies are improving their onsite experiences in five ways:
- Sensing When Customers are Nearby and Reeling Them in
Strictly speaking, this is not an “onsite” problem. It is about trying to reel in customers who are close to a location and might stop by if they knew you were there or needed a nudge – e.g., a promotion they couldn’t resist. This is a major opportunity today for companies because about 25% of the world’s 7.1 billion people will use smartphones this year.[1] Starbucks realized this back in 2009 when it created its first mobile apps to help customers find the closest Starbucks store. Macy’s mobile apps tell customers about special events in their local stores.
2. Helping Customers Plan and Maximize Their Visit
Consumers want to get the most out of every visit – whether to a store, hotel, theme park, or restaurant. But that’s particularly difficult when stores are immense (the average Macy’s store is 179,000 square feet and Wegman’s newest grocery stores can be 138,000 square feet), hotels are sprawling, and major theme parks can’t be done in a day or two. Companies that don’t help customers navigate their locations are leaving experiences untapped and money in their wallets. Walt Disney Co. came to that realization when it embarked on its “MyMagic+” initiative. Its theme park unit executives want visitors to spend more of their average eight-day central Florida vacation at the Walt Disney World resort than at non-Disney sites. MyMagic+ lets visitors to plan their trip on a Disney website before they embark for central Florida. Those that have used the website “tend to plan a lot more of their time at Walt Disney World,” said Disney’s chief financial officer in a UBS investment conference in December. The company also developed an RFID-enabled wristband called MagicBand to help visitors make the most of their visits. Tested in 2013 with more than 200,000 park visitors, it began rolling out earlier this year, MagicBand is mailed to visitors before their trip to the resort. They can use it to enter their hotel rooms, get on rides, book restaurant reservations, and make purchases.
3. Improving the Ability to Recognize Customers on Your Premises
Smartphones, Bluetooth (which enables mobile devices to connect with other technology a short distance away) and other technologies allow companies today to end the Jed Clampett Scenario that I discussed earlier. They can now understand exactly who they are dealing with when a customer is on their premises — without having to ask the customer directly. This lets companies quickly recognize and roll out the red carpet for their highest-value customers. Gimbal, which started within Qualcomm, offers a highly flexible platform that uses Bluetooth Low Energy (BLE) beacons that can detect, or be detected by, smartphones with BLE technology.
4. Creating a Winning Onsite Experience
With personal information in hand (provided by customers who opt-in to these programs), companies can treat their visitors as individuals — catering to their personal needs and wants. Disney’s MyMagic+ promises to take this to a new level. Those who sign up for the program will have photos taken of them at the rides and other attractions. In addition, Mickey Mouse and other Disney characters will be able to talk to children using their names (e.g., to wish them a happy birthday).
5. Reducing the Checkout Line
Long lines are a problem in virtually every business that serves numerous on-premises customers. But companies are using technology to reduce such queuing problems. Disney’s MagicPass lets theme park visitors book dining reservations ahead of time and skip waiting in line (which gives them more time to spend at stores and rides). Starbucks is working on technology that will help it determine which store customers to serve first. It knows that different customers want different things: some want speed of service; others will sacrifice speed for special treatment (more purchasing points, etc.); and others are in no hurry at all. They just want to hang out at Starbucks.
Transforming the Onsite Customer Experience Without Going Broke
The cost to fund such initiatives can be staggering. One company alone will reportedly spend more than a billion dollars on its onsite customer experience initiative. So how do companies increase the odds of success? We’ve found these factors to be important.
- Determine which customer segments to focus on. Not all customers are created equal. A few spend far more than others – and these few are the ones to focus on. Lululemon is singularly focused on baby boom generation women; the staff is trained to ignore men. A customer experience that pleases the men more than the women in its stores is not likely to boost sales, loyalty and profits.
- Collect the right data, and lots of it. One of the biggest risks of an onsite customer experience management initiative is collecting enormous amounts of data that doesn’t significantly boost sales or customer loyalty. Knowing exactly what types of customer data will increase sales and loyalty is crucial.
- Deeply understand why customers buy from you. Is it because your products are superior? Your locations are more convenient? They offer greater variety? Without knowing what aspects of the customer experience to improve the most, you could go broke trying to improve everything at once. Disney World customers can travel long distances to visit the park, and thus need to experience to the maximum while they’re there. The company MyMagic website educates customers about why Disney World is best experienced over more days (not fewer) and then helping them efficiently achieve that full experience.
- Put someone in charge of analyzing the financial impact of the initiative. Because the investments can grow rapidly, someone needs to be put in charge of collecting the evidence that they are working – i.e., improving customer visits, duration, and purchases. Dashboards that show how the systems are working in real time can lower operational costs, while improving the opportunity for real time customer services when an individual (high value) or a group has a bad experience – and to the bullet above, if you know why they buy from you, you can help them in a way they value (does the airline passenger value a free drink, a free flight, or a free upgrade more)?. The executives at fast-food chain Jack in the Box quickly saw how average ticket sizes doubled; it was all the evidence they needed to continue funding the effort.
- Discern great customer experiences from “so-so” ones. The people who run these initiatives must be able to discern “great” experiences from “so-so” ones and provide more of the former. The term that Disney employees use about the firm’s onsite customer experience initiative is “magic.” Walking into a restaurant where you have booked a reservation and being greeted at the door by name by someone you have never met before is much more magical than being told by an employee that you are about to hit your credit card limit.
- Rigorously determine how to get customers to opt into these digital initiatives. Privacy of data is a huge concern for many consumers. Convincing consumers to give data up on their onsite behaviors is difficult. But four rewards can work: low prices or discounts; personalized service; faster service; and purchasing privacy (not letting others know that they’ve bought).
The way hotel, theme park, restaurant, retail, sports and others industries that serve numerous customers on their sites is undergoing a renaissance. The technology is here for companies to tremendously simplify the complex logistics of customers who visit their place of business. The companies that do this best will have far many more customers going to their stores, restaurants, hotels, and theme parks – and coming back to them time and again.
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