perfecting the echo chamber - cheil uk · customer experience? loyalty, data and customer care...
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P E R F E C T I N G T H E E C H O C H A M B E R
P U T T I N G C R E A T I V I T Y I N T O D A T A - D R I V E N M A R K E T I N G
I N T R O D U C T I O N
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Is it about streamlining a process, introducing convenience
for the customer, finding a way to gather yet more data?
And when we have that data, do we know what we’re trying
to achieve?
Customers want great service from brands but both they
— and brands — are still in the process of discovering
exactly what that means. On the one hand, the customer is
shouting ‘treat me like an individual!’, on the other they’re
yelling ‘... but don’t be a creep!’. It’s clear that with all this
data, we’re still not hitting that customer sweet spot. We
still can’t find the trigger that guarantees a customer stays
loyal and is an advocate for the business.
The reason might be that we can’t see the wood for the
trees. We’re so obsessed with the forensic collection and
precise deployment of data, that we’re forgetting what
personalisation really means.
This report will look at what customers really think about all
this frantic data gathering, about what they expect to get
out of loyalty and what brands really should be doing with
all this information.
It shows that customers are sick of being treated like a
science project. We’re going to show that there is art
in the science and creativity in the data, and that loyalty
means so much more than ‘15% off.’
WHAT DOES PERSONALISATION MEAN TO BRANDS?
S E C T I O N O N EBrands are desperate to secure loyal customers. There
isn’t a sector out there that isn’t highly competitive,
with rivalry not just between players, but between
sectors too. Travel is vying with technology; retail with
experiences. It’s going to take more than a discount
to keep customers on-side.
To understand how customers feel about brands’ efforts
to bring them into the fold, Cheil conducted a wide-
ranging survey across 1,001 UK consumers. We set out
to discover their perceptions of loyalty and what they
think about the ‘value exchange’ for data. Do companies
really live up to their insistence that their top priority is great
customer experience?
LOYALTY, DATA AND CUSTOMER CARE TODAY
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0% 5% 10% 15% 20% 25% 30% 35%
Tailored offers to
personal circumstances
Access to partnership programmes,
e.g. airline rewards
Privileges, e.g. exclusive
access to events
Discount offers, e.g. wine club,
travel etc
Cashback
Discounts or cheaper premiums,
e.g. cheaper car or health insurance
Advanced money management
features on mobile apps or website
How likely is it that the following factors would encourage you to share your data with a brand?
13.9%
8.1%
35.2%
30.8%
12.1%
15.4%
9.5%
34.1%
28.7%
12.4%
14.0%
10.5%
33.3%
29.8%
12.5%
14.5%
9.5%
30.8%
30.1%
15.2%
9.0%
7.3%
24.4%
34.1%
25.3%
12.1%
7.6%
28.8%
34.5%
17.1%
18.3%
12.2%
35.8%
22.4%
11.4%
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Consumers are lukewarm at best when it comes to sharing
data for perks. The response was largely neutral (neither
likely nor unlikely) when it came to partnership programmes
(34% of respondents), money management features (36%)
or bespoke offers (35%).
They were not completely unreceptive, however. Financial
rewards spurred some action, with 35% of respondents
saying they’d be ‘somewhat likely’ to share data for cheaper
premiums, and 34% willing to trade it for cashback.
There wasn’t a significant gender split, with men (48%)
marginally more likely to share their data than women (42%).
The difference in age groups was much more marked, with
only a third of people over 55 willing to exchange data for a
prize, compared to 53% of younger people (25-54).
SWAPPING DATA FOR PERKS
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Few consumers wanted companies to use the data they
shared to provide recommendations, particularly if the data
seemed personal, such as tracking their movements. Of all
the personalisation options, ‘None of the above’ was the
most popular, with 34% of the survey audience selecting
this option, while more than half of over 55s ticked that box.
Only 23% overall were content for tracking to be part
of recommendations, while even fewer (13%) were happy
for their credit information to be used to recommend cards
or loans. A glasses company recommending eyewear was
deemed ‘Okay’ with 33% of respondents.
Women were less happy with sharing their data than men,
and the latter were primarily concerned with saving time
(queueing) or money (discounts).
However, this position reversed when it came to the
spectacles recommendations, above (26% versus 17%
of men). Consumers in general were happy to share their
health data when it was likely to serve the common good,
such as improving diagnosis (62%).
Similarly, highly personal health devices whose data had
an immediate benefit to the wearer such as a watch
were also okay by 61% of respondents. One astonishing
finding is that a third of consumers would be happy
to share data as intimate as their own DNA information
with supermarkets in exchange for health advice. This
is growing evidence that it is not necessarily about
how famous your brand is when using customer data
(although being a fundamentally trustworthy brand is a
given), but what you do with the information.
SHARING FOR A WORTHY CAUSE
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
TOTAL MALE FEMALE
A company uses your credit information to recommend the best credit cards andloans based on your individual circumstances
A company that recommends what products you should buy or content you shouldwatch based on previous activity
A coffee shop that remembers your regular order and allows you to order and skipthe line with the click of a button
A glasses company that recommends what glasses will look best based on your faceshape based on facial tech
None
Some brands are now tailoring their experience to the consumer based on
shared data. Which of the below do you think would be most useful?
Strongly agree Somewhat agree Somewhat agree Strongly disagreeNeither agree or disagree
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
A Supermarket storing DNAdata to recommend the best diet
for you to maintain healthy weight
A skin care brand using your DNAto recommend the best skincare
and anti-aging solutions tailored to you
A watch that is able to store health dataand detect when something may be wrong
(e.g. a heart attack)
Your GP sharing data with doctors andhealthcare providers, comparing your data
with other patients to help make a diagnosis
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Customers appear to base their loyalty to high street
retailers on a quality value proposition and heritage.
The bargain basement, pile them high, sell them low
environments, where it’s all about the price and the
experience is a very low priority, seems to turn customers
off. Here, we outline what customers say they prefer but in
Section two we’ll see there’s more behind the numbers.
Boots, Marks and Spencer and John Lewis all score highly
for best in-store experience with 43% of consumers from
Northern Ireland giving it top spot and 27% of respondents
overall. Women were most attuned to the Boots experience
(31%) compared to less than a quarter (23%) of men.
However, it tended to be the youngsters (16-44) who
preferred Boots as their top high street draw, while the
over 45s preferred the Marks and Spencer experience. This
is somewhat surprising, given the restructuring and job
cutting programme Boots is currently undertaking in 2019.
Functional, deal-based retailers earned the wooden spoon,
with JD Sports disappointing consumers in Northern Ireland
and Scotland in particular. WHSmith and Aldi didn’t fare
much better, although women were less critical, as were
older generations.
RETAIL LOYALTY IS A COMPLICATED PICTURE
It’s clear that the old model of reward — or incentive —
to elicit the desired customer behaviour has moved on.
Saturated markets delivering extensive choice and high
price competition have diminished (although not destroyed)
the value of old-style points systems. Customers want
more than a small discount, they want recognition for their
loyalty. But even here, it’s a tricky landscape to navigate.
Companies are equipped with ever more sophisticated
technology to discover intimate details about individual
customers’ lives. With it, and a dash of automation, it is
possible to deliver highly personalised, relevant experiences —
in real time. However, customers appear ambivalent at best
about such close surveillance without full permission and
demonstration of the value.
We clearly stand at the crossroads between an out-
dated but not entirely obsolete model and the power to
deliver services that, in their current form, customers do
not feel represent enough value for their data. In Section
Two we look at the challenges businesses, particularly those
in Travel, FMCG, Automotive and Retail, are facing when it
comes to securing growth through customer loyalty.
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RETAIL LOYALTY IS A COMPLICATED PICTURE
Which of the following high street retailers do you feel
offers the best in-store experience?
Boots M&S John Lewis None of the above
Wilko Waitrose Apple Lush Specsavers Metro Bank
4.2%
12.4%
15.6%
27.4%
15.7%
16.2%
19.3%
20.7%
21.8%
27.3%
Which of the following high street retailers do you feel
offers the worst in-store experience?
None of the above ArgosJD Sports WHSmith Aldi Carphone Warehouse
Currys Halfords B&Q Boots John Lewis Marks & Spencer Sainsburys
5.9%6%
6.4%
6.8%
31.6%
9.5%
9.1%
11.6%
12.5%
14.6%13.8%
15.2%
18.5%
S E C T I O N T W OOne thing is clear from our research. Customers know
marketers want their data. They’re even reasonably content
to share it. A financial perk in return is certainly welcome,
although not the be all and end all. But so far, consumers
remain unimpressed about what we are managing to
deliver in terms of goods and services with their data.
Take their complete ambivalence towards recommendations.
Even when it comes to something useful, like comparing
complex financial products, consumers are not too excited.
Why is that? Because recommendations have become
suffocating. Marketers believe they have painted such an
intricate picture of their customer, real or imagined, that
they absolutely know what’s best for them. In a bid to
deliver the best, most convenient, seamless customer
experience, we’re locking our customers in an echo chamber,
featuring only the narrowest of options.
Take Netflix, for example. Some of us will remember
Blockbuster Video stores and the paralysis of choice
standing under the striplighting, staring at ranks of DVDs
(or VHS videos if you’re really old) and worrying that you
were about to ruin Friday night with a bad choice. So
hurrah for Netflix and its suggestions based on what
you’ve watched before.
Except, it only takes a brief binge on cheesy martial arts
films for your recommendations to be filled with kickboxing
schlock for evermore. Check out your partner’s profile and
suddenly there’s a whole new world of diverse entertainment
gems you didn’t know about it available. That’s the danger
of over-targeting.
BALANCE DATA AND CREATIVITY
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Customers end up parked in these echo chambers because
of over-targeting and a lack of understanding about what
personalisation really is.
The mantra is data is the new oil. And so we have
developed a mania for gathering as much of it as possible
and then trying to squeeze until the pips squeak. There are
two problems with this. We have lots of data, but we
still don’t have all of it. We can find out a lot about what
customers have done, but their likes and motivations?
Those are still a bit of a mystery. And secondly, customer
activity, however much we gather of it, is still too narrow a
data set to make customers happy.
Brands need to relax the reins a little. Stop thinking about
personalisation as a 100% sales hit rate every time. Instead,
start thinking about it as the starting point on a voyage
of discovery.
TARGETING VS PERSONALISATION
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Personalisation isn’t personalisation at al l . It ’s systematisation and standardisation.
A personalised approach provides the opportunity to be creative.” Says Chris MacLeod, Director, Customer and Revenue at Transport for London.
“
BRING BACK THE ELEMENT OF SURPRISE
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People are designed to crave the unexpected.” According to Dr Read Montague, associate professor of neuroscience
at University College London (UCL).
That doesn’t mean trying to sell a Lamborghini to a tractor enthusiast,
but it does mean getting creative now and again.
“Social network TikTok serves users content based on their
likes, behaviours and who they follow — so far, so social
media. But it also dishes out a healthy amount of random
content. Easily skippable if it’s wide of the mark, utterly
compelling and suddenly attention-grabbing otherwise.
It works in the real world too. Perhaps in a backlash against
the utterly boring predictability of online shopping, there
has been a rapid rise in ‘surprise’ monthly subscription
boxes from companies such as Geek Gear, Bookfulness,
Papergang and Birchbox. Grown adults, fed up of getting
just what they want as presents thanks to wish lists, are
actively sending themselves monthly surprise gifts of
make-up, books and film merchandise.
Matt Gratze, Digital Director at Halfords:
“The online world is changing how efficient we expect a
business to be, and the ‘always on’ culture leads to
customers expecting 24/7 service (or as close as
possible), and this is expected across all devices and
touchpoints as a part of an omnichannel service.
Customers expect personalisation, through promotions
and special offers, useful product feedback, which
ultimately provides a data loop for us to improve our
products, services and marketing activity.”
Understanding the customer and putting yourself in their
shoes is true personalisation, not just looking at their data
and matching it to inventory to put the square peg in the
square hole. Instead of using that data to target, we need
to use it to be creative and to deliver surprises. We need to
keep it interesting.
S E C T I O N T H R E EPersonalisation that shows how much you know a customer,
rather than how much you know about a customer, is the
key to finding those surprise and delight moments. Being
willing to tell the story of your relationship and develop
your customer’s interest further is how you move data
beyond process and into creativity.
“Personalisation comes at the cost of creativity if the
content is algorithmic. But it can also have creative flair if
the customers are in cohorts and there’s different
creative for each. Clearly, the cost and complexity of
creating cohort creative [has to be] offset by the
improved commercial return. There is a balance to be held.”
Gary Kibble, Marketing Director, Sainsbury’s Argos.
CREATIVE DATA IN ACTION
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Surprise doesn’t always come from fireworks. Yes, even
email personalisation can be creative and surprising — two
things you really want from a travel company but two things
that can often be sadly lacking.
EasyJet showed best practice with nearly 12 and a half
million unique emails sent to customers, detailing each
individual’s travel journey with them so far, as the airline
celebrated its 20th anniversary.
Each individual story featured where and when they first
flew with EasyJet and then made a suggestion about where
they might fly next. But while a single suggestion was based
on the customer’s flying history, the airline didn’t just
stick to the algorithm. In fact, the copy quite clearly
stated ‘your journey’s only just begun’, flagging up the 250
destinations to choose from as well as offering a portal to
the top 20 as chosen by easyJet themselves. Open rates
were 100% higher than its typical newsletters.
CREATIVITY ONE-TO-ONE
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It ’s hard to be good at [personal isat ion].Even the best peopleare bad. When it works,it works, but you haveto be good at it.” Chris MacLeod, TfL.
“
While it’s clear that the consumer finds too much tracking
during a physical journey an unsettling experience, that
doesn’t mean they’re not open to genuinely useful, intuitive
experiences. Technology from a practical perspective is
particularly welcomed.
Our survey found that consumers want to feel in control
when technology affects their shopping experience. Useful
facilities such as ticking a screen in-store to arrange quick
home delivery was popular with 30% of respondents.
The chance to return an item was something 29% would
appreciate. Most weren’t fans of revealing their online
product search habits to in-store staff, however (only 12%).
Women value technology as a bringer of convenience more
than men (34% for home delivery versus 26%). Men, on the
other hand, were more enticed by technology as in-store
entertainment than women (18% versus 13% would enjoy
a VR or AR experience). Older consumers have yet to be
convinced that technology would add any value at all, with
39% of 55+ year olds choosing no tech solutions at all.
In 2018, Samsung revealed first-of-its-kind retail technology
that joins up the online and offline experience for customer
looking to buy a mobile phone. Dynamic in-store wall
bays provide the link between digital and in-store, giving
individual shoppers relevant, tailored information at the
point of purchase. It gathers in demographics and device
preferences to help customers make decisions.
CREATIVITY ON THE SHOP FLOOR
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Only 20% of customers purchase a new mobile device on the internet, [so] customers in-store account for the large majority of purchases. Historically it ’s been very difficult to understand and tai lor to.” Stephanie Doyle, Senior Omni-Shopper Initiatives Manager — Omni-Channel Innovation Team (SEUK).
Data-driven creativity doesn’t just surprise and delight, it delivers results. Samsung saw a 41% uplift
in the first 12 weeks, coupled with a significant increase in engagement.
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S E C T I O N F O U R
KNOW WHAT YOU WANT TO ACHIEVE
It sounds surprisingly basic but understanding what you want
a great customer experience to look like and how you expect
it to deliver results has to be the place to start.
What do you want engaged customers to do? Buy more
is always a priority, but it’s not the only objective. Do you
want customers to stay for longer, interact more regularly
with social, become vocal advocates across marketplaces,
self-serve on digital or visit physical stores more often?
Knowing what the expected outcome will be helps you
generate the metrics and KPIs by which you’ll measure
your success.
CENTRALISE, CENTRALISE, CENTRALISE
Commentators stress the importance of the single source
of truth when it comes to customer data and having one
central resource where all data flows converge and can be
accessed is critical to delivering on customer experience.
You can’t afford to have duplicate records, out-of-date
information or extra insights hidden from view.
It needn’t be a question of a wholesale transformation
of systems. Integrating technology, like a customer data
platform (CDP), pulls data from multiple sources, cleans it
and integrates it to create a single customer profile. Other
marketing systems can then access this data, safe in the
knowledge that it’s current and accurate.
Within that centralised framework, you also have to unify
your teams and break down silos. A holistic organisation
is one that has an awareness of the workings and needs
of the rest of the business. This is where you find those
serendipitous moments. The ones where someone points out
that customers are dropping off a loyalty scheme. Basket
size may be going up, but brand love could be declining. The
single customer view must go across a company’s actions, as
well as its data.
FIVE PILLARS FOR OPTIMISING DATA-DRIVEN CX
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3 4AUTOMATE
Artificial intelligence and machine learning shouldn’t strike
fear into the hearts of the less technologically minded. AI is
not taking over.
These two systems work in the background to analyse data,
finding patterns and links that it would take many humans
many, many months to discover. It is these systems that will
help you fill in the gaps in customer behaviour, personalise at
scale and find the insights that will underpin market-leading
customer experience.
INTEGRATE DATA AND CREATIVITY
Data can be seductive for its certainty. But, if you follow data
points too slavishly without incorporating creativity, you can
begin limiting, rather than expanding, your brand’s potential.
Allowing data to point to a range of possibilities helps you to
expand customers’ horizons as well as your own. Using data
to feed creativity builds brand strength, giving customers
experiences that have breadth, depth and emotional
resonance beyond transactional rationality. Data merged
with creativity can help you offer people things they were
not aware they wanted but data-derived insight tells you will
be well-received.
This is a big opportunity that not enough brands make
the most of. It’s time to take data and creativity out
of their respective silos and show them what magic they can
make together.
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5 TEST, LEARN AND MEASURE
If you set out the parameters of what you wanted to achieve
at the outset, finding the data to evaluate your progress
shouldn’t prove to be a challenge.
Building evaluation mechanisms into your personalisation
strategy will provide even more vital feedback (e.g.
encouraging reviews that feed into Net Promoter Scores
(NPS); affiliate marketing codes to boost sharing and advocacy).
Not every measure of success is financial. Encourage the
wider business to understand the impact of NPS, conversion
rates and customer lifetime value (CLV) as success metrics
that are of equal value to revenue.
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S E C T I O N F I V E
PRACTICAL ADVICE ON CHOOSING A PARTNER FOR PERSONALISATION
To work effectively with their cl ients, a supplier must be able to:
To make sure a supplier f its their needs, the cl ient should understand:
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By now, it is clear that data is the lynchpin of the
personalised customer experience. It therefore follows that
any suppliers, whether they are consultancies, marketing
technology (martech) suppliers or platforms, must be able to
offer the right level of support, whatever that may be.
● Unifydataandcreatesinglecustomerviews
• Use data to feed creativity
● Notmanagedatainsilos
● Alignonlineandofflinestrategies
● Developcustomerandmarketinsights
● Understandmacro-customertrends
● Provideinsightforclientsonhowto
activate and implement those insights
● Deliverastrategythatistruetothebrand
● Theirowninternalcapabilities— increasingly,
marketers of every stripe need to have a basic
understanding of how martech works and should
be supported.
● Thedesireddegreeofmanagedservice— technology
often moves far faster than the client organisation
can stay abreast of. How much help should you need
not just today but in the future?
● Sectorexperience— how much the supplier
understands the particular quirks of the sector and
can integrate that into their service proposition.
C O N C L U S I O N
“ I T ’ S T I M E T O T H I N K C R E A T I V E L Y.”
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It’s clear that consumers are more discerning about where
they share their data, and what they expect companies to do
with it. Trust is paramount.
But trust is just one way you keep hold of customers and
on its own, it’s not enough. To gain that elusive customer
lifetime value, you need to keep providing surprising and
yes, delight your customers afresh.
Businesses have been told repeatedly how vital the data
garnered from various interactions is to maintaining
customer relationships, but all too often the conversation
stops there.
It’s how it’s used that is critical. Personalisation will be
expected in everything from product recommendations
to content, but it has to go beyond funnelling the same
old offers, day in day out.
It’s time to think creatively.
Taking that data and really thinking about the story it
tells. That a customer might like to buy a lot of sneakers
is one story. But are they fitness fanatics or fashionistas is
another? Are they Kanye, or comfort? What is that data
telling you about them that perhaps even they themselves
don’t yet know?
Creativity can and does come from everywhere. From fresh
hires internally to partnering with suppliers who boast the
most exciting minds. Advancing technology has a place —
artificial intelligence and machine learning will increasingly
play their part in discovering new insights and avenues of
opportunity. But don’t forget the value of the human. Their
ability to inject empathy and a vital dose of business realism
is not to be underestimated.
What will the personalised customer experience landscape
look like in five, 10 or even 20 years’ time? Would any one
of us have predicted the ubiquity of the App 20 years ago?
Leave the crystal ball-gazing to the fortune tellers. What will
remain constant is listening to customers and meeting their
needs. All else comes from here.
It certainly drives better customer experiences and as long
as there is a connection between stronger CX delivering
stronger loyalty then it will deliver an output.
That said, all the other ‘hygiene’ factors need to be in play
before personalisation can play the role of loyalty accretion.
So, as an example, you must have the right product,
available, at the right price, with the right delivery or
collection proposition and broader experience/service
proposition to support. if you have all these in play then
personalisation can be the added piece that cements higher
loyalty. However, focus on personalisation at the cost of any
of those hygiene factors and it won’t drive loyalty and could,
create an opportunity cost that erodes loyalty.
In terms of ‘why’ customers draw a thin line between ‘intrusive,
big brother’ style personalisation and personalisation that
just makes life easier for the customer. Curating ranges (i.e.
if my browsing history is menswear and tech, don’t serve
me a homepage with womenswear and soft furnishings) and
knowing who I am and where I am (if relevant) can make
a large brand feel like it is talking to me about the things
that matter most to me. That deeper bond and a sense that
a brand knows what I want before I do can be incredibly
powerful. The opposite is also true. Herein lies the quandary
and the thin line between personalisation being accretive or
dilutive to loyalty.
Naturally a personalised approach to marketing will prevent
activity or communication having such a broad appeal. By its
very definition, the more personalised the content the less
broad appeal it will have.
Knowing my name, age, gender, interests and browsing and
buying behaviour will lead to a more personalised message
to me but if that same content was applied to Sarah, female,
likes reading, netball and keeping fit and lives in Scotland; it
will naturally lead to disengagement.
Therefore, personalisation does limit the ability for content
to have broad appeal.
CASE STUDY…Gary Kibble — Marketing Director Sainsbury’s Argos
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How does creating personalised experiences drive loyalty?”
Do you believe that a personalised approach comes at the cost of creativity and appeal?”
“ “
To get deeper into the possibilities personalised customer experience has for your organisation contact Victoria Sinclair, Client Engagement Director.
+44 (0) 20 7593 9300
[email protected] cheil.uk
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