Boomerang Commerce is all about price sensitivity.  Mercent is all about marketing effectiveness.

Both of those companies are on the right path, to be sure, but there is a larger universe of customer interests to take into account.

The problem that I called the “Jed Clampett scenario” in my last post is that employees facing customers don’t know anything about that customer in terms of their buying potential, their purchase history, their tipping history (for restaurants), their customer service history – none of that (unless it’s your neighborhood barista who sees you every morning and knows you want a latte and a breakfast sandwich).  Because they don’t know that, they great every customer equally, and that only works well in some places (Disney has an awesome policy which is that no Guest can get observably different treatment).  If you know these things about a customer – you can instruct your employee to say just the right thing to the customer, whether they are a first timer or a 1,000th timer.

Over the last couple of years with work we have done with Disney, Starbucks, and others it has become clear to me that when a customer initiates an experience, be it in a retail store, a theme park, a restaurant, a hotel, or even an online purchase, they have chosen where they are for one of five reasons.  Some of them are pretty obvious, one in particular is not, and it might be the most valuable.

1) Best Price.  Some people know what they want and will go to great lengths to get the best price.  If you have ever heard of the chaos theory of economics (from 2000 Nobel prize winner Dan McFadden) – people will do things like drive 100 miles, and burn $10 in gas, to save $5 on a leather jacket.  So it’s by no means a rational mathematical model, but in general, in physical experiences like retail stores, it’s generally a race to the bottom with Amazon for the best price for something, but that’s what Boomerang Commerce is working to help everyone address.  That’s a big mountain to climb, but they are on the right track.

2) That Product.  Some products you can’t get anywhere else.  In Seattle there is a burger place with only six locations called Dick’s, and if you have ever tried their burgers, you know you can’t get them anywhere else.  Some products are like that and they will cause customers to go to great lengths for that one product.

3) Speed of Service.  Some people are not in a rush and don’t mind shopping for hours, or waiting half an hour to get served their food after they order.  Others are in a rush, and they may be willing to compromise on selection, price, and service, to get in and get out as fast as possible.  It can be hard to figure this out unless they say this is their #1 priority, but many places aren’t trained or equipped to treat them any differently from any other customer – and speed of service people aren’t likely to return there when they are in a hurry next time.    Even with fast food places, there is a spectrum of just how fast it is.

4) Loyalty Recognition. Some people go back to the same place because they like to be recognized, sometimes being recognized is reward enough, other times people want free things, or discounts, or selections of items not available to the less loyal.  Remember Norm from the TV show Cheers? Everyone knew his name and shouted it when he walked into the bar.  The trick here is getting through the nuance of how the customer wants to be rewarded and getting away from spending money on your already loyal customers (you want to spend money on the almost loyal).  BigDoor’s non-dollar backed rewards are a great way to recognize the loyal, almost loyal, or previously loyal with things that don’t cost anything.  I see Kimpton and others have embarked on new loyalty programs and it’s clear that organizations are seeing that it’s not just discreet customer transactions that contribute to a customer loyalty “score” it’s Tweets on Twitter, Facebook likes, everything.  So just as customer relationship management (CRM) is becoming a more real-time Customer Experience Management function, Customer Loyalty Management is very likely one of the next big enterprise software plays.  My money is on BigDoor.

5) Anonymity.  This is the one the catches everyone off guard, but when they hear it, it makes all the sense in the world.  We heard of the case study at Jack-in-the-box where they added kiosks in their quick service burger restaurants.  Initially the idea was for them to be a bit like airport check in kiosks as a way to break up the line and have people stand, waiting patiently for their  number to be called so they can receive their white and red bag with the Jack-in-Box logo in the side.  It did break up the line, as planned, but it did something totally unplanned – ticket prices doubled at the kiosk.  DOUBLED.   Some of it was explained away as being a result of people not feeling the pressure of the person behind them in line, so they could take their time and order more stuff, but what turned out to be the big reason was the realization that people order more indulgent things at Jack-in-the-box when they are not face to face with an order taker who might judge them for ordering the triple cheeseburger with bacon.  It’s probably coarsely analogous to being in the confessional booth.  Something similar to this happens in places like Starbucks when people order a drink like a mocha, and they ask you if you want whipped cream – some people probably wish there was a way to wink or gesture the “yes” so people wouldn’t hear they are indulging today.  This is really powerful to know that in some cases people behave very differently, and pay double, when they are anonymous.

So if you can know which of these things is most important to your customer, and you know their lifetime buying history, and you know whether or not they had a great, or poor. customer service experience last time – not only can you get all sorts of cool management graphs around customer trends and patterns to inform future product management as well as marketing and training efforts, arguably more importantly, you can direct the employee facing “that” customer to say just the right thing to that customer as they arrive whether it’s  “Hi Bob, can I get your favorite martini started for you” or “Hi Bob, so sorry you had such a long wait last time, we will seat you right away” or “Hi Bob, today your martini is on us” 0r something else.

 

It’s all possible now, places like Disney, Macy’s, Amazon, Starbucks, and Jack-in-the-box have figured out what they are going to do about these.

Have you?

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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:

 

1. 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.

*      *      *

 

 

By now everyone has heard of the Nest thermostat and the Fitbit.  But have you heard about Automatic.com?  I have been using mine for a couple of months and I love it – it tells me when I accelerate too fast, break too hard, or drive over 70 MPH.  And like the Nest it gives me comparative statistics on how I compare with other drivers (last week it told me I am in the top 11%).

When I look at technology vectors and telemetry data opportunities in data science, it’s clear that everything we do is being instrumented to capture data in real time, and in the next couple of years, we will all expect this.  That’s on the viewable horizon.

What’s not on the viewable horizon is the next step of that – being predictive of when my tires are going to need changing.  If Automatic knows that I am braking too hard an accelerating too fast, that would shorten the timeline for when I will need to get new tires, and probably even set a date, or more likely a window of time, out in the future that could be adjusted for when I should expect to need new tires.  Cool.

Beyond that, wearables like the Fitbit should be able to predict when we will lose a certain amount of weight, and if more data like cholesterol and heart rate are tracked, it call show us trajectories for high blood pressure, diabetes, and other conditions – and do the same sorts of comparisons that we already get from Nike Fuel, Nest, Automatic, and others.

What this should do is create a series of metrics that are analogous to credit scores that can create risk profiles for insurance companies (I can’t believe that’s not already in place, frankly), but also when it comes to selling my VW Passat. If I have the actual usage data for a car, that’s very complimentary to the Carfax.com data that exists and is much more detailed – that can tell my buyer how the car has been driven, not just whether or not it was in an accident.

Self-diagnosis will change many industries and there are lots of new business opportunities out there for people who can figure out the right trajectories.

-Ric

 

P.S. Per my last post about customer service, I was delighted to learn that someone recorded that Comcast call – they are so overdue for that it’s shocking.

Last week I had a problem with a Network Solutions account, an account I have had for almost ten years with no issue.

I don’t call customer support lines much these days.  Comcast’s third rung of hell support essentially amounts to an application of what Pavlov learned with the dogs I avoid those calls as much as I can.

So I get on the phone while I am driving in to work last week, and after being on hold for 20 minutes, the very friendly gentleman on the line says – “I would be happy to help with you – I can solve this problem for you today” – at which point I felt pretty good.  Then about 30 seconds later he said he needed to transfer me to someone else, which he did, and this time I sat on hold for 25 minutes (I have a long drive to work).  Once that person got on the line he said it wasn’t a Network Solutions problem and I needed to call Google Mail.

My Web Master Dawud Miracle (I recommend him) helped me figure out the issue later, so all is well on that front – but it struck me that every time I have a terrible customer service experience, it seems really, really simple to solve this issue.

I have learned, most recently in my work with Disney, that one of five things is most important to a customer at any one time (stay tuned for the blog about all five – later this week).  In the case of a call center issue, it’s even simpler than that – it’s one of just two things, and those are:

1) How urgent it is to solve the problem

2) How much the customer values their time

 

Therefore, the simple solution to this issue that will result in the creation of a new profit center for the likes of Comcast and Network Solutions, is to give the customer one of three choices:

1) Have them call you back as soon as a call center agent can deal with it.  Not urgent, and they value their time, this adds no cost to the call center operation and it gets issues resolved.

2) Wait on the line until the person gets the help they need. Urgent, but time is not the biggest concern of the customer.

3) Allow the customer to pay an amount for immediate service.  Urgent and the customer values their time (could also be extremely urgent in this case).  Here you hire a new group of paid call center people (so as not to dilute the already backlogged group) and staff it based on revenue/profit targets.  There would have to be some experimentation on pricing, but that’s some pretty simple A/B testing to get to that

 

This is a clear path to much happier customers, with better revenue.

 

Stay tuned for the blog later this week with all five customer priorities, including references to PushSpring, Jack-in-the-Box, Nordstrom, Disney, and more.  The key is looking at the really basic vectors of what’s most important to customers and what’s brand aligned.  Not a new idea, just a lot of new data science that’s leading to rapidly changing customer expectation vector / telemetry opportunities.

-Ric

 

My next blog will be all about why I am closing all of my accounts at Wells Fargo.  They are stuck in the 20th century in so many ways it’s hard to believe they are still in business.

But before I get to that, I have some ideas for the Department of Licensing, and my bet is that this applies to most states, not just my home, and current, state of Washington.   My first such Driver’s License from that state is pictured to the left from 1982.

As much as I dread the notion of getting back in line at the DOL to renew a license, I have to give them a lot of credit – I just renewed my license online and that was fast and easy.

And even though the long lines are awful, I will give the state of Washington (and any other state that does this) some credit for the simplicity of their method of establishing whether someone is old enough to drink (helping bars and vendors that sell alcohol).  In Washington, you are not allowed to look into the camera until you are 21, so a bar or vendor doesn’t have to look at your birthday and do the math to see if you can buy alcohol, all they have to do is look at your photo.  Good thinking.

It does crack me up a bit that the way they could be sure it was an authentic license in 1982 was putting grooves in the orange section in the shape of the state of Washington so that when you tilted it back and forth in the light, the grooves would move like waves.  Wow. How low-tech can you get, by modern standards?

I am a little bit surprised they don’t need a more current photo, but unlike my 1982 photo, the photo they took of me in 2007 is pretty much what I look like today.

So when I mentioned it in passing to my friend Mary that I am so delighted to not have to  go to the DOL to renew this year, her reaction surprised me.  She said, “oh I know, so you don’t get the judgemental looks about whether you really weigh what you say you weigh.” Nope.  That’s not why. I really just don’t like standing in line for hours.

But it did get me rethinking.

What if they had a scale at the DOL that you had to use to verify your weight unless you paid a fee to waive the weigh-in?  Or the photo, for that matter.  Think about how much revenue states would generate if people (probably mostly women) could pay to fib on non-crucial details of their license.  Let’s face it, women can wear their hair differently and become unrecognizable, what good is that photo anyway?  Really.

There are 6.6 million people in Washington (presumbly about half are women).  Obviously a lot of women in their 20’s couldn’t care less about whether it’s their real weight, but after that, who knows.  If you charge $30 just for the waiver on the weigh-in, that’s upwards of $100 million (over five years) in additional revenue, and probably another $100 million to pay to re-use the same photo from last time.  And if they wanted to charge $50 for a professional photographer to take your photo .  . . Well, you get the idea.

Free money for states that need it.  Why not?

-Ric

THE BEST

The hands down best superbowl ad was the Audi vampire spot (click here).  I had seen an advertisement in print form for the new Audi A7, touting its new headlights as being the closest thing to simulated daylight ever, and thought that was interesting enough.  But to then marry that idea with the curent runaway popularity of, and fascination with, vampires was absolutely brilliant – with the idea that the driver unknowingly is about to kill all of his friends at the party because vampires can’t survive daylight. . .  Love it.  Not only great rethinking on the headlights, but to hang it on the coattails of something so edgy as vampires, with just the right tone, really well done.

 

Then Honda really hit a home run with its CR-V ad (here). Knowing that it needs to target the baby boomer generation with ads, getting Matthew Broderick to reprise his role in Ferris Beuller’s Day Off was probably not a bad idea for anyone, but to align it with its current marketing emphasis on spending time away, this really hit the nail on the head for them.  So while Audi reached into the what’s hot today, Honda reached back to what was hot when baby boomers were kids to get something to resonate with them.

Downy Unstoppables, here, did something a bit lot Honda in going back to the past, getting Mean Joe Green to to a repeat of his  Coke commercial from the ’70s (here) and it’s funny enough, especially if you are a fan of Amy Sedaris, but it seems to be off the mark in terms of target.  I don’t think people watching the superbowl want to hear about laundry.

Acura (full length and very funny version here) missed the mark in a similar way with it’s spot with Jerry Seinfeld.  While it’s true Seinfeld and Leno are famous for their love of cars, I just don’t buy that they would care about an Acura.  I can’t get there.  I thought Hyundai made the same mistake (here) with its cheetah spot – very clever, funny, and memorable, but I still think a Prius is faster zero to 60.  I’m just sayin.

 

OK those are the best ads, even if a bit off target.

THE WORST

The worst one was the Chevy end of the world ad (here). I was with them through the entire thing, and even thought the Twinkies were a funny ending, but to suggest that their buddy didn’t survive the apocolypse because he was in a Ford broke one of the basic rules of the game.  You never name your competition in a negative way, and suggesting that your competition is why one of your buddies is dead?  Ugh.

GoDaddy was also pretty bad.

 

Overall winner – Audi.  No question.

-Ric