Lluis Martinez-Ribes – Retail innovation through neuromarketing strategy header image 1

Lluis
Martinez-Ribes

Innovation in
MARKETING & RETAIL
Transforming business with latest generation marketing

ANOTHER WAY IS POSSIBLE. Achieving differentiation

July 24th, 2015 · No Comments

Here’s some bad news, some really bad news: in most sectors, products (or services) tend to become increasingly similar through time. I am often told this by the executives and participants on the MBA on the programmes I run at ESADE and universities in other countries.

When products are seen as similar, the most likely outcome is a price war, with the corresponding reduction in the gross margin. A decreasing profit margin leaves companies with less energy to face the future.

It should come as no surprise, therefore, that the quest for differentiation is such a common goal.

The usual way of differentiating

Kotler (1999) describes differentiation as “the process of adding significant and valued differences in order to make the company’s goods or services stand out from the competition’s”.

Usually, when a company sets out to differentiate its products (which includes services or, in other words, the solution that the company offers its customers), they tend to do so by adding some feature that makes the solution better than the competition’s.

For instance, our airline is the most punctual, we have added vitamin C to our soft drink or we give you more points on your loyalty card.

We could summarize by saying that the usual route for achieving differentiation is underpinned by highlighting the Do and Have features of the product.

dif-eng-1

This approach is very much in line with the definition put forward by Kotler (1999) or product-based differentiation (Michael, 2010) as it is known, and it is a response to the traditional and predominant view of how customers make decisions when shopping: if they did so consciously, objective improvements in the product should logically lead to an increase in sales.

However, it is not always the product with the best features that triumphs. For instance, the iPhone 6 has been a market leader, even though it is not the best at a technical level. It even has features that are far from new.

Alternative route to differentiation: phase 1

Another way is possible.
I suggest starting with our prime customers or potential customers. What are they like? How do they live? What concerns them? What do they do on Fridays? How are things going for them in the factory? Do they find making shopping lists a pain in the neck? And so on. It is not enough simply to describe them, but you rather need to philosophize on their life and contexts, with the aim of understanding them.

After empathizing with customers, the first stage of differentiation begins: conceptualizing the product or, to put it another way, deciding the role that it will play in the customer’s life.

This is not a matter of inventing a slogan or a claim, but rather thinking of the response that we would really like customers to give if we asked them “Product, what do you mean to my life?”.

Such a question can’t be answered by the typical clichés such as ‘value’, quality, ‘value for money’, service, choice, etc.

If a product does not manage to become part of the customer’s life, the customer can do without it because it is irrelevant to them. It does not give them anything special or different that would make it worth buying.

It is all about the verb ‘Be’: what the product is to me, for my life.

If IKEA asked its customers “How do I feature in your life?”, there would be a big difference between them answering “You are a reasonably priced furniture store’ and ‘It’s thanks to you that I can afford to live with my girlfriend”.

If somebody said to the director of Ferrari “I like the new Ferrari car”, he would probably faint: Ferrari is not a car! Because it plays a very distinct role in its owners’ lives.

Alternative route to differentiation: phase 2

Now is a good time to shift to a verb that the brain understands better: “Feel”. You have to decide what is the predominant emotion that this product should make your customers feel.

Communicating is not just a question of saying things or ideas, but making somebody feel a certain thing, and then being open to hearing what your interlocutor wants to make you feel in return.

Just as Volvo has traditionally evoked the emotion of safety and Red Bull makes you feel like a risk-taker, each product-brand must define the central emotion that it wants to evoke when a customer sees it.

dif-eng-2

Alternative route to differentiation: phase 3

Once we have been inspired by the Be (what the product is for their life) and the Feel (the dominant emotion), we can move on to the procedure for making it a reality, capturing it and now expressing what it would be good to Do and Have.

differentiation-2015

For instance, if an industrial company sells technical products so that its customers have a better quality of life at work, and it wants to symbolize that its is focused on making their lives easier, it can differentiate itself at its stand at a trade fair by offering the system in the image to customers so that they can comfortably take a break.

To sum up

  1. Let’s be practical; let’s start with the abstract. The proposed differentiation process ends just where the traditional route begins: Do and Have. However, by first completing two abstract stages (Be and Feel), we can achieve better synergy, consistency, visibility, relevance and much better commercial results.
  2. Differentiation is not achieved by adding more features or benefits to the product. This is almost sure to add more cost and organizational complexity and, if these features do not reflect a shared sensation, focus can be lost in the customer’s mind. You need more than worms to catch the big fish.

________________________________________
Bibliography

  • Kotler, P. (1999) Kotler on marketing. Simon and Schuster.
  • Levitt, T. (1980) Marketing success through differentiation – of anything. Harvard Business Review, January.
  • Michael, A. (2010) Differentiation strategy: how to gain competitive advantage through product leadership. BrandUniq

________________________________________
Lluis Martinez-Ribes

Source: Código 84, number 189

July 2015

→ No CommentsTags: centricidad en cliente · decisión de compra · Diferentiation · emociones · emotions · empathy · empatia · product · producto · purchasing decision · Quality of life · sentir

NO IMAGINATION, NO PARTY. The two founding pillars of the shopping experience

June 18th, 2015 · No Comments

You walk into the supermarket one evening after a hard day at work. You are frankly exhausted. You have just been to pick up your two kids from school – gorgeous, the pair of them, but they’ve had an argument and now won’t stop crying. But where is the children’s food section? Oh, they’ve moved it! You ask a shelf stacker who, barely looking at you, disinterestedly points to the new location of the kids’ food section. You eventually find what you are looking for but, when you get to the checkout, you are faced with a queue ten people long. There are no two ways about it, today is not your day. You can’t take any more, so you leave the trolley where it is, grab the kids and walk out. On your way to the car, you take out your smartphone, order food to be delivered home and swear that you will never go back to that supermarket again.

main-purchasing-blocks-lm

Let’s repeat the scene

I walk into the supermarket one evening after a hard day at work. I am frankly exhausted. I have just been to pick up your two kids from school – gorgeous, the pair of them, but they’ve had an argument and now won’t stop crying. At the entrance, I see a monitored play area for kids and they ask if they can stay there while I shop. They are both smiling again. I head over to the kids’ food section where I find a notice telling me where it has been relocated. A shelf stacker notices that I hesitate and offers to accompany me with a smile. The music is not abrasive and there is a nice atmosphere. My wife is coming back from a trip tonight so I decide to surprise her with one of those cheese selections she likes so much. Next to the cheese, I see a bottle of wine that would go with it perfectly. She’s worth it! She’ll love the surprise. I make my way over to the checkout where there is no queue and I scan the items myself and then pay. Right, now to pick the kids up. Look how lovely they are! I head home in no time at all to get there before my wife arrives.

The shopping experience

The situations described above are the same but with remarkably different outcomes.

This issue is hugely important for businesses because the same soft drink tastes different depending on where you drink it (try it if you don’t believe me). Therefore, a customer’s predisposition, price sensitively and actual shopping behaviour can end up varying greatly depending on how they feel as they shop.

We speak about the “shopping experience”, a term used casually with as many different definitions as there are articles written on the topic.

There was a long-established theory about how consumers decide what to buy, for instance as proposed by Court et al.(2009), who state that customers consider a range of goods/brands to buy, evaluate each of them based on their characteristics and choose one. After using it, they develop expectations for the next shopping process. However, we now know that the vast majority of decisions, including shopping choices, are made unconsciously. In other words, consumers do not create a mental spreadsheet of pros and cons.

The are two key methods not only for improving customers’ shopping experience, but also for increasing the average spend and getting them to come back:

  1. Reducing effort.
  2. Stimulating their imagination.

Less effort required, please

In an article published in 2010 in Harvard Business Review (Dixon, Freeman & Toman), the authors argue that we do not maintain customer loyalty by offering an excellent service, but rather we lose it when we give them a bad service. Customer loyalty is not achieved by delighting them but rather by reducing the effort they have to make.

This argument is along the same lines as the theory put forward by Blake Morgan (2015), who uses a highly illustrative example to capture this situation: “Can you imagine a customer climbing up 1,000 stairs to reach you for help only to be told they need to go back down the staircase and climb another one?” Many customers feel this way, for instance, when they have to contract telephone packages and similar services.

It is often the case that the efforts that customers have to make are not detected because they are considered to be ‘normal’: queues, unintelligible information, not being able to locate products, doubts caused by excessive options, unsuitable timetables, sales assistants that can’t answer your questions or who don’t give you the time of day, etc. The effortless shopping experience is not simply a question of the points of interaction between customers and the company, but rather it involves the customers’ entire “journey from start to finish” (Rawson, Duncan & Jones, 2013), including the phase before and after going into the store (whether it is physical or digital).

In the digital world, a click is an example of an effort. Each click reduces the conversion rate by 20%. In other words, if a potential customer has to click five times, it is highly likely that they do not end up making the purchase.

Other statistics show that a shopping experience involving lots of effort for the customer means a high risk of losing them. According to research conducted by Avaya into the impact of customer effort (Wilson, 2014), a bad experience has greater capacity to negatively influence future shopping behaviour than a good experience to have a positive affect. Looking at it from a different perspective, according to a study by McKinsey cited in Blake (2015), companies that focus on providing an effortless shopping experience reap positive rewards, with an increase in revenue of10-15%.

The statistics are closely linked to human biology. When we are faced with problems when shopping, we need to pay conscious attention, which means our slow cortex is activated and we consume high levels of glucose. As a result, we get tired and eventually get fed up. Our brain likes being on ‘automatic pilot. It loves routine (which should not be confused with boredom).
Therefore, the best purchasing decision is the one in which no decision is required.

The rise to power of imagination

Imagination makes us human, as we are the only animal that can imagine. Imagination is the capacity to picture in one’s mind things that are not present for our senses at that time (Robinson, 2006).

When we do something that we like, our brain generates dopamine and we feel good. The latest research (Kent Berridge, 2014) shows that more dopamine is generated when we are preparing or imagining something that we like than when we actually experience it. This is known as the brain’s ‘as if circuit’: the same parts of the brain are activated when we imagine something pleasant as are activated when we are actually enjoying it.

The interesting thing is that retail can act as this moment of preparation/imagination of subsequent enjoyment. To do so, the store must not simply be a transactional space (I swap you a nice bottle of wine for some money), but rather in must be a launch pad for the customers’ imagination. This is achieved through stimuli that trigger certain emotions and make customers visualize a future moment of enjoyment, such as a family meal next Sunday.

If the imagination is triggered, I can assure you that revenue will rise.

One experience and two roles

We have seen that, if we want customers to choose us repeatedly, we have to ensure that we make things easy for them and that they can make their purchase with hardly any effort. We have to be engineers of frictionless shopping processes.

However, we also have to be scriptwriters, creating a sequence of sensations (the shopping process) in such a way that their imagination generates the sense of wellbeing that dopamine gives.

In short, we have to take on two roles, firstly as engineers and then as scriptwriters of an exciting story. It is well worth the effort.

___________________________
Bibliography

  • Castro, D.C. & Berridge, K.C. Advances in the neurobiological bases for food ‘liking’ and ‘wanting’. Physiology & Behavior, 136, 22-30, 2014.
  • Court, D., et al. (2009) The consumer decision journey. McKinsey, June.
  • Dixon, M., Freeman, K. & Toman, N. (2010) Stop trying to delight your customers. Harvard Business Review, July.
  • Morgan, B. (2015) Want a powerful customer experience? Make it easy for the customer. Forbes, 13th January.
  • Rawson, A., Duncan, E. & Jones, C. (2013) The truth about customer experience. Harvard Business Review, September.
  • Robinson, K. (2006) Out of our minds: Learning to be creative. TEDTalks, February.
  • Wilson, M. (2014) Avaya Customer Effort Impact Study Reveals the Cost of Inconvenience. Avaya.

___________________________

Lluis Martinez-Ribes

Source: Código 84, number 188

June 2015

→ No CommentsTags: Dopamina · Efforts · Esfuerzos · imaginación · imagination · interacción · interaction · lealtad · loyalty · senses · sentidos · shopping experience

CREATING A BRAND IN THE 21st CENTURY

May 21st, 2015 · No Comments

Today has started off well. Last night, you slept like a log and, when you pulled open the curtains this morning, the sun streamed pleasantly into your bedroom. As you enjoy your coffee, you download today’s newspaper on your tablet. Straightaway, a headline on the front page grabs your eye: “Google announces its closure!”.

the-brand-XXI-century-martinez-ribes

image: artchandising

What face would have you pulled had this -completely fictitious- news story been true? What would you have felt?
If your overriding feeling in the face of such news was that somehow things were going to be worse from that point onwards, Google now forms part of your life.

Now change one aspect of the news story. Instead of Google, imagine the article was about your company. Would your customers feel the same way?

If the answer is yes, congratulations! But if the answer in no, it means that they can do without your brand.

What is all this brand stuff about?

When we talk about brands, there are almost as many different definitions as there are articles on the topic. Some of these are along the lines of Jerry McLaughlin’s proposal (2011): “what a customer thinks of when they hear the brand name”.

I feel reasonably comfortable with this approach, although, as I have stated in other articles, we know that we make the vast majority of decisions subconsciously using the ultra-fast limbic system, and we later dress the decision up with reasons and justifications. Therefore, rather than “what we think of when we hear the brand name”, we should say “what we feel when we hear the brand name”.

Lots of writers develop ideas along the same lines, such as Marty Neumeier in his book ‘The Brand Gap (2005)’: “‘Brand’ is the gut feeling people have about your product, service or company”. This very widespread approach focuses the issue on the emotions that a company, product or service generates in its customers.

In our hyper-connected society in which our saturation with stimuli is matched only by our attention deficit, emotion is the key resource to ensure that a product (or service) gets noticed. When something triggers an emotion, our attention is activated and, as such, it becomes visible, and perhaps later something we may buy.

Is triggering emotions enough?

However, is stimulating customers’ emotions enough to make them buy our product repeatedly?

The answer is obviously not. An emotion has a short-term effect on the body. In contrast, customer loyalty requires long-term energy.

For this reason, I find the proposal of Iglesias and Alfaro (2009) more accurate when they say that a brand is a “set of values, sensations, emotions and experiences that have value insofar as they have a meaning that is relevant to the customers”.

I would probably tweak this definition a little. A powerful brand, rather than having “meaning”, can convey a particular “feeling” at certain moments of the customers’ lives.

Nevertheless, the best aspect of Iglesias and Alfaro’s contribution is that the different elements it mentions pave the way to transform a fleeting emotion into feelings, which, by nature, last longer. A purely emotional brand would be a brand with little scope.

Are values enough to create feelings?

Iglesias and Alfaro introduce the idea of the meaning being “relevant” to the customers. In my opinion, this aspect is key.
There are two methods by which a meaning can be relevant, which ideally should be combined:

  • (A) Sharing really significant human values with customers, which are expressed through different media. For instance, ranging from traditional television channels, on to social media (what an impact this has in terms of persuading a customer to say good things about a brand!), right through to the most influential medium, according to Amancio Ortega, the founder of Inditex: “The store is the most powerful medium for creating a brand”. His statement is technically very accurate, because a message perceived through various senses simultaneously is more persuasive. Neuroscience tells us that experiences are more convincing and memorable than a PowerPoint presentation.
  • (B) Providing a solution that really makes their life better. The second approach for making a brand really relevant is for it to be associated to a solution or, in other words, a product or service that really improves the customer’s life in some respect.
    The Google brand is so powerful because it helps you avoid getting lost in an unfamiliar city, because it lets you find valid information in an instant, etc. The Google brand is extremely relevant, despite its logo changing constantly (What a contradiction for classical textbooks on Corporate Visual Identity!).

Creating a brand in the 21st Century is not so much a matter of corporate colours, a witty slogan or even advertisements to trigger occasional emotions, but rather tuning into your customers’ lifestyle and ensuring that the solution that bears the brand name truly enhances their quality of life.

To sum up, creating a brand today requires three essential elements: awakening the emotions required for them to pay attention, creating lasting feelings by sharing deep-rooted values and designing solutions that improve customers’ lives.
This gives rise to the three roles of marketing professionals in the 21st Century: a philosopher contemplating their customers’ lives, an engineer of solutions and a scriptwriter creating a movie of emotions and feelings.

___________________________
Bibliography

  • Iglesias, O. & Alfaro, M. (2009) “La marca y la gestión de las emociones” in Harvard Deusto, Nᵒ 90.
  • McLaughlin, J. (2011) “What is a brand, anyway?” in Forbes, 21st December
  • Neumeier, M. (2005) The brand gap. Berkeley: New Riders.

___________________________

Lluis Martinez-Ribes

Source: Código 84, number 187

May 2015

→ No CommentsTags: Attention · brand · Decisiones humanas · emociones · emotions · experiencia de compra · Feel · Feelings · Human decisions · Hyperconnection · limbic system · marca · sentir · shopping experience · sistema límbico · Solución · Solution · valores compartidos · Values

WHAT IS A NAME?

May 14th, 2015 · No Comments

Do you know of any company that explicitly states that it pays no attention to its customers? It seems ridiculous to ignore the match referee: the current or potential customer.

It would de hard to find any company that admits that it is not customer-centric and most of them truly believe that they are. However, if we look closely, we see that many of them are really focused on their products or internal process (factories, logistics, etc.). They do not take the customer into account as an individual, with their own profile and contexts. In other words, their relation with the customer is transactional, as if a sale were a case of “I’ll swap you these quality molecules for money.”

How to make a company customer-centric

Many mindful directors undertake actions to make sure that the customer comes first in their company. One extremely interesting method of doing so is to calculate the Customer Lifetime Value (CLTV) or, to put it another way, the value in monetary terms of each customer in the long term if the continue buying as they have done to date (see my article ‘Data-driven retail’).This greatly helps us develop an understanding of the impact of decisions on customers.

Now, however, I would like to propose another method: changing the vocabulary that we use.

dentist-name-EN2

image: artchandising

According the Jean Berko Gleason, an expert in socio-linguistics, the words that we use are immensely powerful in terms of shaping how we see things. He refers to this phenomenon as “framing” (De Waal, 2011). The act of choosing a particular world to name a certain thing clearly affects how we perceive it.

Science has demonstrated that the words that we use have a direct and immediate impact on our emotional response and the way in which our brains react (Meacham, 2013). Recent research shows that the different words that we use activate different areas of the brain and end up influencing our behaviour in distinct ways (Sammarco, 2014).

The idea that the way we perceive the world is highly influenced by the concepts (words) that we use is far from new. In fact, throughout the 20th Century, this idea grabbed the interest of many scientists (Stanford Encyclopaedia of Philosophy). The most notable of these was Thomas Kuhn (1970) who believed that “what people see depends both on what they look at and on what their previous visual-conceptual experience has taught them to see”. When we change the way we refer to things, we change how we think, and this modifies how we interpret reality and, in the end, how we act.

Taking advantage of science

To emphasize the importance of the customers’ voice, we have to introduce a vocabulary in which they are the protagonists. A change in the language we use can help us to gain a better understanding of our customers (Ehman).

If our vocabulary regularly talks about statistics, ratios and numbers of orders, our activity will tend to be transactional. If we add different facets regarding our customers to our control panels, we will have a far greater chance of becoming part of our customers’ lives.

For instance, it you went to a dentist, think how you would feel if you saw the appointment schedule (see the image above) depending on the different names used in the column showing the people who will be coming.

Let’s look at another example. If I talk about “the Internet of things”, what ideas come to mind? Probably devices connected via the Internet. However, if I say “I can change the colour of the lights in my house from work using my telephone”, you would probably smile, picturing somebody empowered.

In both cases, we are talking about the same thing, but the perception is very different. The terms used can change the understanding of something new and make it more client-centric.

Speaking in a different way is practical

Obviously, changing the vocabulary that we use does not instantly mean that the customer has become the focus of the company nor that the processes automatically change. It takes time. Our ideas flow with their own momentum, based on certain mindsets that we have inherited and use non-consciously.

In order to change our habits in terms of thinking (and taking action), we have to identify them and bring them into our consciousness. As soon as we are able to create a different habit, the mind, as it is can be molded, is reinforced and customer-centricity is achieved. It is well worth the effort.

_________________
Bibliography

  • De Waal, M. (2011) “Jean Berko Gleason on how words influence thought”. Daily Maverick, 26th October.
  • Meacham, M (2013) “How words affect our brains”. Talent Development, 11th July.
  • Sammarco, G (2014) “El futuro de tu cerebro está en tus palabras”. Semana económica, 21st November.
  • Stanford Encyclopaedia of Philosophy.
  • Kuhn, T. (1970) The structure of scientific revolution. Chicago: University of Chicago Press.
  • Ehman, L. “Create a customer-centric vocabulary”. Selling Power.

___________________________

Lluis Martinez-Ribes

Source: Código 84, number 186

April 2015

→ No CommentsTags: centricidad en cliente · customer centricity · Customer Lifetime Value · Emotional response · Language · Perception · Vocabulary · Words

THE SALES EQUATIONS Data-driven retail and neuromarketing

April 8th, 2015 · No Comments

Each year sees the publication of reports on the retail trends in store for us over the coming months, such as those published by Price Waterhouse Coopers and TNS Retail.

data-driven

Image: Carla Vallès

At the start of 2015, one forecast on which most of these reports are in agreement is the consolidation of data-driven marketing (Honaman, 2015). Applied to retail, this involves using business data to be able to carry out actions, such as special offers, for a particular customer based on their location in the store, whether through screens or the customer’s own smartphone. This can equally be applied to physical and digital stores.

Such personalized action activity is based on the use of technologies such as multimedia installations fitted with cameras to detect the sex and age of approaching customers, instantly showing them a promotion adapted to their profile on the screen. The other technology underpinning such initiatives is currently growing in double figures and is paid for by the customer: their smartphone, linked via Bluetooth, iBeacon, NFC (Near Field Communication) and, logically, the CRM.

The sales equation

The usual method of quantifying sales in a physical store and estimating potential growth applies the following parameters:

  • Size of the scope of influence.
  • Number of people of the main target segment.
  • Achievable market share, taking the competition in the area into consideration.
  • Frequency of visit.
  • Conversion rate (% of visits that end in a purchase).
  • Average purchase (= quantity of products x price).

The last of these parameters should be broken down into two parts, depending on the customers’ behaviour:

  • Items they planned to buy, that were on their ‘shopping list’.
  • Unplanned purchases. The relative weight of this part varies significantly depending on the sector and retail format.

It seems clear that many of the aforementioned technologies tend to focus on this last part of the equation nowadays. Lindsey (2014) also confirms that the majority of inter-related technologies on which data-driven retail is based are highly focused on increasing impulse purchases.

Neuroscience’s interpretation

Most people know that the vast majority of human decisions are subconscious or implicit, activated by the limbic system, one of the fastest parts of the brain which, paradoxically, consumes the least glucose. The cortex, the part of the brain that activates when we do something consciously, is much slower and consumes a lot of glucose.

When we do the shopping, we pick out the planned items almost semi-automatically. However, when an offer catches our eye or we get a promo message on our smartphone, we switch from the ‘automatic pilot’ of the limbic system and turn our newly-activated attention to the message we have received. This is when the cortex kicks in, meaning that we are making a mental effort, as we consume more glucose that just a moment earlier.

As Dr. Ralf Ebert explains, when somebody makes effort while shopping, the same part of the brain is activated as when we suffer physical pain: our brain interprets it as an implicit pain. For this reason, when we ask for customers’ conscious attention, it must be compensated for with a relatively large reward (for instance, a real bargain or a moment of happiness).

Customer loyalty is quantifiable

It is well-known that customer loyalty is one of the two founding pillars of the retail business model. Nobody can make a living from customers that buy just once. We want and need them to keep coming back and purchasing repeatedly.

As such, in other words, the company must perceive itself not as a seller of products or services, but rather as a customer cultivator.

This can be quantified. The measurement for calculating the value of a specific customer over the long term is the Customer Lifetime Value (CLTV) or, to put it another way, how much each customer is worth (in € or $) if they continue shopping with the same pattern and habits as they have done so far.

On the following website, Harvard Business School has developed a simple tool for simulating CLTV.

So, how can we stimulate loyalty? Many people think that the key is a fascinating and highly sensory shopping experience. However, one study (Dixon, Freeman and Toman, 2010) shows that customer loyalty is achieved more effectively by reducing the efforts they have to make while shopping, providing what could be referred to as a friction-free shopping experience.

Do these trends work against customer loyalty?

If enhancing the sales equation involves tiring out our customer’s brain, we need to get rid of any unnecessary loads on this journey. To put it in a more contemporary way, if sales are encouraged using ‘push’ promotional strategies, tired out customers may stop coming to our store. This is what many tourists end up doing, crossing the street to avoid waiters who stop them to persuade them to enter their restaurant.

To avoid such problems, the following seven tips may be of use:

  1. 1. Interlinked with the CRM, commercial and contextual data (weather, events, etc.) represents a powerful source of opportunities for gaining greater understanding of the customers, to later be able to implement suitable actions to grow the business. Market intelligence is a key part of any good marketing and sales department.
  2. When we do the sums, the CLTV is greater when customers keep coming back to the store, despite their average purchase each time being lower.
  3. Take full advantage of the fact that smartphones know their owners’ context (space and time) so that they can receive offers adapted to their present situation.
  4. Avoid excessive promotions or communications that force customers to pay too much conscious attention. If we fail to do so, we contaminate the store and cause their psychological self-defence mechanisms to kick in.
  5. Whenever we want to grab the customer’s attention, we have to offer them some kind of reward by way of compensation.
  6. As far as the customer’s brain is concerned, one strong promotion is far better than twenty weak ones.
  7. The rewards must be relevant. In other words, if we possess customer data, we have to be able to offer them something that is truly adapted to their needs. There is no point sending them a promotion for nappies if their kids are all grown up. If we do not manage this, the store may be seen as rude or, even worse, irrelevant to the customer’s life.

____________________________

Bibliography

  • Price Waterhouse Coopers & TNS Retail (2007) “Retailing 2015: New frontiers”.
  • Honaman, J. (2015) “Top 6 retail trends to watch in 2015” in Retail Info System News, 5th January
  • Lindsey, K. (2014) “Sealing the deal: Six digital tools targeting impulse shoppers” in Retail Dive, 27th May
  • Dixon, M., Freeman, K. & Toman, N. (2010) “Stop trying to delight your customers” in Harvard Business Review, July.

___________________________

Lluis Martinez-Ribes

Source: Código 84, number 185

March 2015

→ No CommentsTags: Customer Lifetime Value · Data-driven · Efforts · Esfuerzos · lealtad · loyalty · Neuromarketing · promotions · retail · sales · smartphone · venta