Video: You Can Do It, We Can (Still) Help

Slidedeck: You Can Do It, We Can (Still) Help

The Opportunity:

Home Depot found that previously overlooked “passionates” that sat outside the brand’s historic target audience were engaging with the Home Depot brand online.  The company would try to capitalize on this organic interest to use social media as a way to differentiate itself from competitors with the goal of recapturing a group of consumers they lost during the customer service slip.

The Plan:

(1)     Leverage Front-Line Staff:  Nick notes that social media provided Home Depot with a way to engage store associates in meaningful way.  By tapping into the collective knowledge of those store associates (ex: getting garden associate to blog about how he tends to plants; creating a video of craftsman giving tips on how to build a deck), Home Depot was able to provide different-in-kind value for potential customers.

(2)     Follow Your Audience:  Home Depot found that while homedepot.com is a destination, it’s not the only destination for home improvement information.  Rather than trying to boost homedepot.com higher in the rankings (it was typically consumers 4^th or 5^th stop), Home Depot could use video syndication to bring “how to” content to websites that customers were already frequenting like YouTube and howCast.

Case-in-Point:

One of Home Depot’s biggest opportunities was providing guidance and support during natural disasters, a time when home safety and repair was already top-of-mind for customers.  Home Depot hypothesized that Twitter could help them “reach further, faster” when it came to sharing advice on how to prepare for and recover from natural disasters.

MLC members, for more information on how you can leverage social to improve customer service, please visit our Social Media Topic Center and register for our July 15 webinar, Building a Socially Intelligent Enterprise: Closing the CEO Leadership Gap in Social Media.

(photo of a Home Depot store via Flickr user neubie)

What makes Twelpforce the right social media investment for Best Buy?

“First, it meets consumer needs. We sell stuff that can be hard to understand and consumers don’t want to do all the learning themselves. Second, competitors will struggle to replicate Twelpforce because it will take a long time to gain the experience we’ve collected over the years. When we say our employees are at the center of our strategy, we prove it in an initiative like this.  The more we demonstrate our savvy and offer this support service, the less consumers are willing to waste time working these things out themselves. That gives us an edge over the competition.”

How did you accelerate network growth (of both Twelpforce staff and consumers)?

“We used traditional media, such as TV ads and point-of-purchase notes, to accelerate consumer uptake. Internally, we tapped existing employee behavior and leveraged passionates.  It wasn’t a hard sell for staff who were already on Twitter.  We said, ‘You guys are already out there, would you like to help customers in this space while you’re working?’ That helped us get to critical mass quickly.”

Are there any incentives to encourage staff to participate in Twelpforce?

“Through heavy participation in Twelpforce, staff earn the right to help provide input to some of the strategic decisions made in the social space.  We’re also seeing more and more of our Twelpforce team members stepping into experimental “social” roles in-store that they are now more prepared for.”

What training do you offer Twelpforce staff?

“At the start, coaching took a lot of time and effort.  We had to keep reiterating that Twelpforce is about helping not selling.  Now though, the @twelpforce team is largely self-governing.  Those that have been with us for a while will mentor and coach those new to the effort.  While I lead the implementation of broad-reaching tools, the 1:1 coaching is a shared responsibility across the group.  If a new employee posts something suboptimal, someone will say ‘check out this FAQ on tone’. I make myself available for help at any time, but it’s rare that I step in and handle “issues”, as those are largely handled by the team.”

How do you help staff share knowledge?

“We have a tool – www.bbyfeed.com – that captures every interaction taking place on Twelforce (and will soon be expanding to capture interactions on a variety of platforms). It has simple search features that enable staff to pull up every conversation on a specific topic.  For a retail company, turnover is a fact of life, and knowledge sharing is essential.  Additionally, staff can post extra information without being bound to 140 characters. So, if one employee says, ‘I identified a new virus and found out how to box it in,’ another might add, ‘I found this cure for it…’ while a third could say, ‘and here’s how to prevent it.’”

How do you measure the returns on Twelpforce?

“We look at cost displacement (calls avoided) and quality and speed of service, as well as revenue influenced, and positive press generated. Although Twelpforce isn’t about Marketing or PR, we still measure its value in traditional Marketing/PR terms to demonstrate its full worth.”

What role did your CMO, Barry Judge, play in setting up Twelpforce?

“Without Barry, this stuff doesn’t happen. He put his capital on the line to pilot Twelpforce when it was an unknown idea. He is largely responsible for getting senior leaders on board and getting us involved in this space.”

Speaking more broadly, how do you see social media changing the way brands market to consumers?

“Social media is about relationship building, not marketing and not even relationship-based marketing. You could say that Twelpforce is marketing without marketing. It uses other parts of the enterprise to fulfill brand promises. There is a time and place for broadcast, but it isn’t here – here it’s about providing value and relevance. We give more than we take, but ultimately that will lead to more purchases.”

Check out the latest advice on Twelpforce here: http://twitter.com/TWELPFORCE

MLC members, learn how to identify your brand’s social media “sweet spot” using our Social Media Strategy Builder.

1. Individualize—fun read in the New York Times this weekend about Sam’s Club personalizing discounts.  In short, Sam’s uses predictive analytics to mine data and customize a set of coupons for the customer, who can print them out at a store kiosk.  This is a potentially very powerful way of boosting the relevance of coupons for “club” members, which feeds through to stronger sales and profits.  In one case, a gentleman came into Sam’s to buy food, but left with two TV’s (so much for self control).  The coupon redemption rate in these cases can increase by 10x, from 2% to over 20%.  If this approach sounds data intensive to you, it should.  Because it is.  More here on boosting your organization’s analytics capability.
2. Socialize—Tasti D-Lite, a chain of ice cream treat shops, has linked its loyalty program to FourSquare (not sure what FourSquare is? See this post) and Twitter in an effort to get consumers to socialize their loyalty to Tasti D.  When you sign up for the program, you have the option to link your account to Twitter and FourSquare.  Of course, you get extra points for doing so.  In return for the extra points, each time you use your card, a message is broadcast to your Twitter/FourSquare network that you’ve earned Tasti points.  Clever. 
3. Monetize—okay, “monetize” isn’t exactly right, but “currency-ize” (more accurate for this category of innovation) isn’t a word.  We’ve heard from a handful of brands across the MLC membership that are looking to elevate their loyalty programs to currency status—along the lines of what the airlines have done in the past 20 years.  These brands are trying to broaden the applicability of rewards points to enable consumers to advance the cause they share with the brand; trial related products or services outside of the reward brand itself; acquire and display new degrees of status; access exclusive content or events; and so on.  Degree of difficulty here is high, but the prize is equally large. 

Our advice? Watch out for brand dilutive moves, and beware making promises with points that your brand can’t keep. There are 9 trillion unused frequent flyer miles, chasing increasingly scarce seats.  That’s making frequent flyer membership less and less appealing for consumers—or downright disappointing.  Don’t let your loyalty program land you in the customer service ranks of the major airlines.

MLC Members: See our Loyalty Program Resource Center for handy planning and management tools.

• 78 percent said they use two or more channels to browse, research and make purchases; 30 percent said they use three channels or more
• 43 percent said they start their research online or through a mobile device, but then need to call a customer service or call center representative to complete the transaction because the necessary product or service information cannot be found online
• 39 percent said they browse via the online or mobile channel and then make purchases in the store because they prefer to touch and feel the product; 36 percent said they do this to compare several brands of the same product

Consumers are embracing the freedom the new multi-channel environment provides them in evaluating products and services to ensure that whatever purchase they make is the right one.  Retailers are starting to follow suit, but they face some significant barriers in doing so:

• Touchpoint Coordination—Many retail organizations manage in-store experience, e-commerce, customer service, and marketing communications in separate silos, making it hard to coordinate and synchronize efforts across touchpoints and leading to inconsistency and mixed messages to customers.
• Brand Differentiation—Gone are the days where a cool website will get you noticed.   As more retailers embrace emerging touchpoints—social media, mobile, apps, etc.—it will become increasingly difficult for any one retailer to differentiate in such a high-noise environment.  Retailers need to bulletproof the value propositions that drive all go-to-market activities, reinforcing the company’s key differentiators that best meet customer needs.
• Data Collection and Capture—New channels are both a blessing and a curse: while they can provide retailers with the chance to collect previously impossible amounts of customer data, rarely do they have the systems or people in place to use this data to build a single customer view.  This problem is often exacerbated by the same org structure issues that make touchpoint coordination difficult: if the groups don’t report into a single source, their data probably doesn’t get aggregated either.

While there is no quick fix for any of these issues, there are a couple of ways retailers can begin to close the gap to ensure success in the new multi-channel environment:

• Use a jobs/outcomes framework to organize customer understanding. Retailers should use the consumer data they collect to better understand the specific tasks customers are trying to complete when they interact with the company at specific touchpoints and how customers will measure the success of those interactions.  In organizations where individual touchpoints and data sources are owned by many different groups, cross-functional coordination will be necessary to build a holistic picture.  Framing customer understanding in this way can help identify the most critical customer touchpoints that retailers need to get right. MLC members, check out this tutorial for more information on jobs and outcomes.
• Ensure that key touchpoints demonstrate the brand’s unique strengths. Rather than try to improve performance across all channels, retailers should instead focus on ensuring that the critical few key touchpoints will shape customer opinion and engagement, accurately reflect the brand’s unique differentiating strengths.   Check out Pat’s post from a few weeks back for a framework for shaping the customer experience this way.
• Identify and fix misaligned touchpoints. Once the critical touchpoints have been optimized, it’s important to make sure that the others don’t detract from the experience with off-brand service delivery or inconsistent messaging.  Retailers need to identify these “brand busters” quickly and find simple solutions for bringing them in line with other touchpoints.   MLC members, if you’re interested in seeing a framework for ensuring touchpoint alignment, click here.

Taking this approach to customer experience will help retailers move from merely interacting with customers across multiple touchpoints to creating a seamless, truly multi-channel experience.

Well, which is it?  Of course, we’d all like to have an experience that is as good as can be, both functionally and emotionally.  However, we as marketers have limited time and financial resources.  We appreciate advice that steers us on how to prioritize. 

So, here is MLC’s take on how to make those tradeoffs. 

"Thank you, I will have one...it looks very functionally appealing"

Start by stealing a page from Lion-Nathan’s playbook.  Lion-Nathan is an Australian beer brewer, and has taken a clever approach to focusing the organization on the one or two most important pressure points to drive deeper consumer engagement.  High level, here’s how you would do this (there’s more detail in this case study for MLC members):

1. Gather attitudinal and behavioral data across your current and potential customer base.
2. Define the threshold attitudes AND behaviors that characterize different levels of engagement across a spectrum. 
3. Now, estimate the profit that those slices comprise, and spot one (or two, but not more) of the most leveraged audience slices to focus on. 
4. For those slices, study the differences in behavior and attitude that separate them from similar-looking audience slices at the next higher level of engagement.
5. Then, focus your marketing and experience efforts on those behavioral and/or attitudinal barriers, specifically.

Note: depending on your situation, you may find that either improving the functionality of the experience or creating a stronger emotional bond is higher return.  Regardless of which it is, with this approach, it will be easier to structure marketing and experience improvements because you’ll have an audience in mind with specific barriers to focus on.

Depending on where you land, I’ll recommend two important pieces of research and best practice:

• If it’s the functional part of the experience that you need to improve on, focus on reducing customer effort. MLC’s sister program, the Customer Contact Council, has done groundbreaking research here.
• If it’s the emotional connection you’re looking for, take a look at MLC’s  loyalty work focusing on shared values.  Read this short blog post and give the embedded podcast a listen.  Or, MLC members, you can access the full body of that work here.

But frankly, this too often turns retailers into myopic, proximity-biased incrementalists in their customer strategy (too harsh again?). Imagine my encouragement when I see retail CMOs begin to tout the very elements of customer-focused strategy their CPG peers have long known.

This new focus on the customer take two forms: organizational structure and marketing communications execution. Take Express, for instance. Organizationally, Express CMO Lisa Gavales (follow her on Twitter here) now owns all e-commerce activity. From a communications perspective, every touchpoint – be it on the store floor or the web homepage – displays the same visual branding. Express is Express, no matter where the customer encounters it. While a recent development at Express, MLC research would clearly indicate that customer-focused, channel-agnostic marketing communications will yield far higher returns to the whole portfolio than category- or channel-specific campaigns.

At Macy’s, you practically have CMO Peter Sachse committing marketing treason, saying, “What we don’t need to do is get new customers.” Yet he’s right, because he too has placed the customer at the forefront of marketing’s strategy, rather than a distant second to classic merchandising techniques. And what better way to do this than. . .wait for it. . .asking the customer! Sifting through NPD Group data, interviewing shoppers as they left the store, all in an effort to generate customer centricity. Much like Express, the end result is an inevitable broadening of Marketing’s scope of control (which of course we as marketers enjoy). Sachse states specifically that the web should be the brand’s hub, which can lead to innovative uses of the web as a marketing communications vehicle, as in this recent Macy’s campaign.

Yet for many retailers, the transition to a customer-driven marketing organization may not be as simple as having charismatic leaders like Gavales and Sachse. That’s where MLC research can help build the business case for customer focus:

• See how Tesco created an annual customer plan to implement improvements to the shopping experience grounded in customer insight.
• Read how Food Lion co-opted cross-functional partners by pre-committing them to next steps on customer-focused projects.
• See how Victoria’s Secret filters all customer-focused investments to ensure alignment with the brand and target customer.

The trend toward customer focus in retail is more urgent and necessary than ever before, as the sector seeks to reinvent its offering coming out of the recession. Those that fall behind in satisfying customers’ needs will likely get trampled in the next Black Friday rush.

Let’s face it – as the frontline for cutbacks in consumer spending, traditional retail has suffered through a miserable two years. Abercrombie & Fitch gambled that higher prices would keep its panache and lost terribly. Sears Holdings’ stores had their best quarter since 2005 – with a 2.3% year-on-year same store sales decline. Even the McDonald’s ‘I’m lovin’ it’ juggernaut stumbled to a 0.7% same store sales decrease this January. Does the rest of 2010 provide any hope for recovery? And if so, can retailers take advantage of it?

Before the good news, let’s dispense with the headwinds that still face the retail sector:

• Consumer spending, although rising across January and February, still has a long way to go to absorb the steep cutbacks felt across 2008 and 2009. Economists aren’t predicting rapid spending growth anytime soon because.
• Chronically high unemployment continues to limit the available dollars for discretionary spending. The unemployed don’t have the money required to reinvigorate the economy, while those who are employed have become far more frugal. That’s certainly a wise economic choice because. . .
• Wages aren’t rising. Although this typifies each recessionary period, wages tend to rise when the economy starts to tick up. That’s not the case now, with factors ranging from underemployment to the skyrocketing cost of non-wage benefits like health insurance.

What makes this potential recovery even more complex is the fundamentally different nature of the retail environment this time around. From Amazon and eBay to Craigslist and other secondary markets, this is the first recovery where the maturity of self-serve web retailing forces stand-alone retailers to adopt different strategic choices. Even with all these obstacles, there’s room to run, and here’s how the winners are leading the race:

• Inventory Management, Done Right – Slashing inventories (and the restocking that led to strong Q4 GDP growth) helped retailers weather the storm, but on the way back, consumers want leading brands on the shelves at the right price. Walmart’s already rethinking its SKU strategy; there’s an opening for competitors to recapture share by matching the right brands with the right target consumer.
• Revisit the Competitive Landscape – Best Buy doesn’t compete against Circuit City anymore; Amazon and Walmart pose the biggest threats. The former brands of May Company are distant memories; Macy’s only holds one price point within what was once a much broader spectrum. It’s time to take a wider and deeper view of retail competition, offline and online, to re-evaluate supposed differentiators.
• Reinvigorate the Brand – Readers of my posts know my faith in brand as a difference-maker. I can’t hold it up as success yet, but JC Penney’s brand re-launch during the Oscars was a bold step to move up-market and engage a new consumer audience.
• Harness Social Media – It’s as simple as this: if you’re not in social media, you’re behind. From its power as a one-to-one mechanism to the wealth of consumer data available, neglecting social technologies is an abdication of Marketing’s role in retail.

MLC would love your thoughts on what’s driving retail forward (or for that matter, still holding you back). We’re exploring the possibility of an informal retailer roundtable to better address the concerns of our B2C-direct members and I’d love your input. E-mail me at dhutton@executiveboard.com for more information; I look forward to hearing from you.

Granted, I was probably a little outside of the target segment for most wine makers, but what would have altered my decision? A catchy label or even a suggestion from one of the sales people could have nudged me in a different direction. The lesson for me here: while there is immense opportunity to influence a brand decision before a consumer goes shopping, the importance of the in-store experience—whether through product placement, point of purchase signage or a well trained store employee—cannot be minimized.

According to a recent study from the Grocery Manufacturers Association, Booz & Company, and SheSpeaks, shoppers choose 59% of the brands they buy in the store. Of those items, 85% of shoppers perceive in-store factors as more influential than out-of-store marketing. After price, communicating benefits on packaging is most influential, whether to reinforce existing brand preferences, drive competitive switching, capture purchase when there is no strong brand preference, or create impulse sales. In fact 77% of shoppers do not take detailed shopping lists into the store. Instead, they use “mental lists” that include “brand consideration sets,” but evolve as they are exposed to more marketing at home, in transit and in the store.

This probably explains the surge in interest from MLC’s membership on Shopper Marketing. We recently hosted a round robin discussion with a few of our CPG members to discuss the future of the function.  We discussed questions such as:

• Where should Shopper Marketing sit within the organization? (Centralized Under Sales / a Center of Excellence / Centralized Under Marketing)
• What skill sets should we look to hire and develop?
• What are the right metrics to measure our performance?

MLC Members, We’re also seeing increased interest from retailers to partner with manufacturers on Shopper Marketing. Look out for more discussion groups from us in early 2010. In the meantime, please email me if you want to see the key takeaways from our most recent discussion group.

To get started, break touchpoints into two categories: secondary touchpoints (the outer circle in the graphic below) and supporting touchpoints (the middle circle):

Click Image to Enlarge | Secondary and supporting touchpoints establish a mental link and then drive the target audience to the social experience focal point.

1.  Secondary Touchpoints link the social experience to your brand for the target audience.  They’re often mass in nature—TV, out-of-home, print, and so on.  Best Buy’s TV ads showcasing Twelpforce are one example of such a secondary touchpoint.

2.   Supporting Touchpoints drive the target audience to the desired social experience.  Targeted banner ads, paid search, and direct marketing often do well here.  Best deployed, these touchpoints will:

• Engage a target audience at moments when they are susceptible to or desirous of the social experience
• Enable easy entry to the experience.

Once you’ve assigned roles to touchpoints, you can choose the metrics best suited for those roles.  You’ll find that the focus of the metrics can be much more specific now, because each touchpoint has a specific role to play.  See the chart above for guidance on primary and secondary metrics for each touchpoint category.

In addition to tracking more specific metrics, be sure to think through how long you actually need mass media to establish that link between the brand and the social experience.  At some point, it will make sense to dial down these secondary, mass touchpoints and shift some part of those (expensive) resources to (often more affordable) supporting touchpoints.

Note how different this approach is compared to traditional B2C media planning.  Instead of planning around TV and bolting on social media as an afterthought (unlikely to be well integrated), social experience is now at the center.

Consequently, one side benefit is that social media dollars won’t be the first on the chopping block when budgets get tight.  Protecting that funding is critical for supporting the longer-term asset that many social media investments represent.

MLC Members: Download the full case study, illustrating examples of touchpoint role assignment and measurement.  Happy planning!  In the social revolution, you’ve nothing to lose but your mass media chains.

One of the open questions for marketers: How should one go about identifying the right social experience?

Answer: Identify an imprinting experience that best highlights your brand’s differentiating attributes or benefits.

That’s a mouthful.  Let’s unpack it.  An “imprinting experience” is one that is likely to stick with a consumer.  The best experiences therefore should be meaningful—they would help a consumer solve a problem or connect with others around a shared passion or challenge.  (MLC Members: for help finding these opportunities for your brand, see our work on emotional differentiation and Shared Values)

So far, so good.  But how do you choose amongst multiple social experience options?

Ultimately, you’d want to filter the list of potential experiences to choose one that best highlights your brand’s differentiators.  If you can spur these kinds of social experiences for your consumers, you’re much more likely to create lasting advantage in the marketplace.

Let’s go back to Best Buy and Twelpforce.  Against its prime competitors—Amazon and Walmart—Best Buy has a unique differentiator: an army of Blue Shirts who have a passion for electronics and are social media savvy.  Perfect!

The experience that Best Buy would love to create for its target audience, then, is a strong service interaction with a Blue Shirt via Twelpforce.  And Best Buy would want that interaction to help its customers solve a problem—maybe setting up a new home theater system or identifying a compatible backup mobile phone battery. 

Why put a Twelpforce experience and not an in-store experience at the center of a communications strategy?  In-store isn’t a bad idea, but think about the Twelpforce experience for a minute:

• It’s novel to have a great support experience via social media, and
• It’s easy to pass that interaction virally, and
• The interaction is captured digitally for all to see on Twitter, whereas a good in-store interaction is seen by the customer himself, and maybe a few others around him.

Very tough for Amazon or Walmart to mimic that kind of experience.

Once you’ve identified the experience, you want to scale it with your integrated communications.  You can do that by assigning specific roles to each touchpoint in the mix.  I’ll explain how in my next post.

MLC members can take a look at an illustrative example of a beer brand applying this sort of thinking to choose its social experience in our case on Experience Driven Touchpoint Planning.