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The Top 10 Strategic Technology Trends For 2019

 

Gartner has just released its insight for the ten key trends you can’t afford to ignore in the next year. These Gartner Top 10 Strategic Technology trends are expected to impact and transform industries through 2023.
The core concepts presented are all about shift and change and disruption, as technology is becoming an inextricable part of our world.

Three themes dominated the speech:

  • Intelligence. Increasingly the engine that drives future capabilities. An intelligence-ai driven future;
  • second is digital, in an increasingly blended fashion;
  • then mesh, as the importance of ecosystems.

In 2019 we will look at these three things coming together in an increasingly integrated fashion.

1: Autonomous things
Whether it’s cars, robots or agriculture, autonomous things use AI to perform tasks traditionally done by humans. By 2021 10% of new vehicles will have autonomous driving capabilities.

2: Augmented analytics
Data scientists have increasing amounts of data to prepare and analyze. Organizations can miss key insights from hypotheses the data scientists can't explore. That’s why “By 2020, more than 40% of data science tasks will be automated.”

3: AI-driven development
Developers will embed AI into applications and use AI to create AI-powered tools for the development process.

4: Digital twins
A digital twin is a digital representation that mirrors a real-life object, process, or system. The focus today is on digital twins in the IoT, which can improve enterprise decision making by providing information on maintenance and reliability, Expect this to grow in 2019.

5: Empowered edge
Expect information processing and content collection and delivery placed closer to the sources of the information, with the idea that keeping traffic local will reduce latency. “Technology and thinking will shift to a point where the experience will connect people with hundreds of edge devices.”

6: Immersive technologies
Conversational platforms, which change how users interact with the world, and technologies such as augmented reality (AR), mixed reality (MR) and virtual reality (VR), which change how users perceive the world, will lead to new immersive experiences.

7: Blockchain
The blockchain is a type of distributed ledger, an expanding chronologically ordered list of signed, permanent transactional records shared by all participants in a network. Expect blockchain to take off in many industries in 2019.

8: Smart Spaces
Connected to the digital twins concept, a smart space is a physical or digital environment in which humans and technology-enabled systems interact forming an open, connected, coordinated and intelligent ecosystem.

9: Digital ethics and privacy
Customers will have a growing awareness of the value of their personal information and will be increasingly concerned with how it’s being used

10: Quantum computing
Still not ready for prime time, quantum computing will evolve, as an exponentially scalable and highly parallel computing model.

Last but not least, seven digital disruptions you might not see coming in 2019, as they are infused in your day-to-day experience, and their expected impact:

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Topics: customer loyalty Digital Customer Experience customer engagement digital transformation Innovation

The New Marketing is People Centric: Know Your Customer Personality!

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Every day, enormous amounts of money around the world are spent on advertising tailored for socio-demographic groups. But demographic analysis is only part of the story about your customers.

If you want to get the whole story you must start considering your customers as people, rather than merely seeing them as someone buying the product that you’ve got. To do so, you need to stop relying solely on an objective-based perspective and start getting a more in-depth view of your customers.

Qualitative information such as customer personality can show you more clearly what is important to them and how they make buying decisions. Moreover, as customer personality relates to their attitudes and behavior, it can be useful for developing your products and services as well as for creating powerful communications.

For example, you probably didn't know that extroverts:

  • Look for the hedonic value of products (see notes 5; 4)
  • Feel more positive consumption emotions and affective commitment towards brands (6; 7)
  • Use more word-of-mouth communication (11)
  • Tend to be highly fashion-conscious (9)
  • Are more favorable toward transformational ads than informational ads (8)

While if you are dealing with conscientious customers, you should mind that they:

  • Look for the utilitarian, functional, task-related, and rational value of shopping (4)
  • Tend to be prestige-sensitive (9)
  • Manage their money more because they are future oriented and have positive financial attitudes (3)
  • Are more favorable toward comparative ads than non-comparative ads and informational ads than transformational ads (8)

And if your customers are open-minded, consider that they: 

  • Support technological innovation (13)
  • Place greater importance on reliability rather than on style when buying a computer (10)
  • Are less prestige-sensitive (2)
  • Tend to make more online purchases (1)
  • Are more favorable to recycled and sustainable products (12)

These are some of the personality traits included in the Big Five Model, also known with the acronym OCEAN: Openness to experience; Conscientiousness, Extroversion; Agreeableness; Neuroticism.

One of the major arguments against the use of the Big Five Model - and personality traits in general - in marketing is the difficulty of obtaining such kind of information about customers.

However, the expanding of digital and social platforms makes available terabytes of data about users, including subjective qualitative data. This gives marketers the unprecedented opportunity to understand customer personality and deliver AI-driven personalized contents on a large scale.

This is more than moving from a partial view of customers to a more comprehensive one; it is shifting from a merely commercial approach, what we know as "customer-centricity", to a more intimate and long-term relationship, what we will call "people-centricity".

To enter this new era, start thinking about it: how will you enhance your marketing when you also get the human side of customers?


Photo by Marina Vitale on Unsplash

Notes:
(1) Bosnjak, M., Bochmann, V., & Hufschmidt, T. (2007). Dimensions of brand personality attributions: a person-centric aproach in the German cultural context. Social Behavior and Personality: an international journal, 35(3), 303-316.

(2) Casidy, R. (2012). An empirical investigation of the relationship between personality traits, prestige sensitivity, and fashion consciousness of Generation Y in Australia. Australasian Marketing Journal (AMJ), 20(4), 242-249.

(3) Donnelly, G., Iyer, R., & Howell, R. T. (2012). The Big Five personality traits, material values, and financial well-being of self-described money managers. Journal of Economic Psychology, 33(6), 1129-1142.

(4) Guido, G. (2005). Shopping motives and the hedonic/utilitarian shopping value: a preliminary study. ACR European Advances.

(5) Matzler, K., Bidmon, S., & Grabner-Kräuter, S. (2006). Individual determinants of brand affect: the role of the personality traits of extraversion and openness to experience. Journal of Product & Brand Management, 15(7), 427-434.

(6) Matzler, K., Faullant, R., Renzl, B., & Leiter, V. (2005). The relationship between personality traits (extraversion and neuroticism), emotions and customer self-satisfaction. Innovative Marketing, 1(2), 32-39.

(7) Mooradian, T. A., & Olver, J. M. (1997). “I can't get no satisfaction:” The impact of personality and emotion on postpurchase processes. Psychology & Marketing, 14(4), 379-393.

(8) Myers, S. D., Sen, S., & Alexandrov, A. (2010). The moderating effect of personality traits on attitudes toward advertisements: a contingency framework. Management & Marketing, 5(3), 3.

(9) Myszkowski, N., & Storme, M. (2012). How personality traits predict design-driven consumer choices. Europe’s Journal of Psychology, 8(4), 641-650.

(10) Nevid, J. S., & Pastva, A. (2014). “I'm a Mac” versus “I'm a PC”: Personality Differences between Mac and PC Users in a College Sample. Psychology & Marketing, 31(1), 31-37.

(11) Ranjbarian, B., Forghani, M. H., & Ghafari, M. (2013). Personality traits and the use of word of mouth communication as a source of travel information among inbound tourists who visited Isfahan. International Journal of Academic Research in Economics and Management Sciences, 2(3), 20.

(12) Sandy, C. J., Gosling, S. D., & Durant, J. (2013). Predicting consumer behavior and media preferences: The comparative validity of personality traits and demographic variables. Psychology & Marketing, 30(11), 937-949.

(13) Wood, S. (2012). Prone to progress: Using personality to identify supporters of innovative social entrepreneurship. Journal of Public Policy & Marketing, 31(1), 129-141.

 

Download The 7 Pillars Of The New Customer Loyalty to define the foundations on which to build your engagement and loyalty strategy, create innovative experiences and establish a lasting and valuable relationship with your customers.

The 7 Pillars Of The New Customer Loyalty

Topics: psychographics customer loyalty

Nudge Marketing: 3 Psychological Strategies to Grow Your Business

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We are not always rational beings. Most of the times, we make decisions on an irrational basis, and afterward, we look for logical explanations to justify them.

The same as consumers. Our emotional states and moods play a fundamental role in determining our preferences and choices so that leveraging on these subconscious drivers becomes an excellent way for marketers to promote desired, more valuable behaviors.
In this scenario, nudging may make your marketing more powerful as it shifts the focus towards subtly creating new habits rather than explicitly asking consumers to do something with the promise of 'extrinsic' rewards - usually financial - such as discounts or prizes.

Most of you probably already know what 'nudging' is: a method that uses positive reinforcement and indirect suggestions to influence people's behavior, thus making a certain choice easier than an alternative path without the person actively being aware of it.

But, perhaps, fewer know what nudging is NOT:
- A substitute for marketing, which compliments but not replace. Simply put, marketing makes the need salient and creates the desire while nudging facilitates the follow-through.
- A way to mislead or confuse the consumer. Instead, it should be transparent to be effective.
- A trap or a manipulation, as opting out of nudging should be as simple as the tap of a button.

If McDonald’s employees are trained to offer only medium or large options to customers when taking orders for drinks and desserts and emit the small alternative unless the consumer explicitly asks for it, this is a 'bad nudge'.

We see a lot of bad nudges in advertising, sales, and human relations in general.

Good nudges, on the other hand, are those that benefit the person - whether it is the consumer or citizen - not (only) your business. And there are countless examples out there too: many schools in the USA are using nudging to move students towards healthy choices, as well as to improve learning and academic outcomes; some virtuous companies are applying similar strategies to promote a safer workplace culture; and the UK government has its dedicated Nudge Unit to encourage people to make better choices for themselves and society.

So, how can you harness the power of good nudge to grow your business too? Look at these 3 examples of easy-to-implement strategies.

COGNITIVE EASE

It is pretty intuitive. Our brains are lazy, and we are less likely to do something if we think it’s going to be hard – whether it’s losing weight, quitting to smoke, buying a product or signing up for a service.

One major reason is that perceived difficulty undermines people's self-efficacy - the belief in someone's capacity to execute behaviors necessary to achieve specific goals.

On the contrary, the perception of ease can be a powerful nudge towards engagement and purchasing, as it enhances consumers' self-efficacy and their intention to move on.

This way, Zipcar managed to go over a major barrier to car share use - the belief that shared cars are scarce and hard to find - by subtly showing to users on its website's map how easy a Zipcar is to find and use.

OPTION RESTRICTION 

It may seem counterproductive, but streamlining your offer can help you increase conversions as you nudge customers towards making a decision, rather than being paralyzed by too many options.

For example, having too many social share buttons in a webpage or too many form fields in a drop-down menu cripples users' decision making, thus decreasing conversions.

The same happens in the offline world. An experiment conducted by the New York Times in a grocery store on two different Saturdays found that, after exposing 24 different flavors of jam on the first day and only 6 on the second day, purchases increased from 3% to 30%, meaning that the store sold 600% more jam by just reducing the set of options.

INTERNAL CONSISTENCY 

Once we make a choice or take a position, we feel the need to behave consistently with that commitment.

That is notoriously what door-to-door salespeople rely on: they ask a series of 'easy-to-answer-yes' questions (such as ‘Do you think that a more comfortable bed could improve the quality of your sleep?’) and, once you’ve said yes to one, it becomes harder to say no to the next. They managed to get in; that's why this technique is called 'foot-in-the-door'.

Petitions rely on the same principle because agreeing to take part sets people up to make a more significant commitment further down the line, from a simple signature to event participation and financial support.

Nudging works most effectively when it is used for good, creating a “win-win” situation for both companies and individuals.

We've seen examples here that make one thing clear: nudging holds the potential to move the marketing paradigm towards a proper understanding of the subconscious drivers of consumer behavior. But it is equally clear that it works most effectively when used to create a win-win situation for both companies and individuals.

If this belief becomes a premise, the current distinction between good and bad nudging will turn into a separation of what is nudging from what is not. And naturally, this is our hope.

Photo by Caleb Frith on Unsplash

Download The 7 Pillars Of The New Customer Loyalty to define the foundations on which to build your engagement and loyalty strategy, create innovative experiences and establish a lasting and valuable relationship with your customers.

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Topics: Nudging customer loyalty Digital Customer Experience customer engagement

Travel Customer Journey - The Evolution Of Planning and Purchasing

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Brace Yourself; Vacation days coming!

Whether it is the summer or winter season, the desire to travel never misses the opportunity. For those who want to plan their trip, but also those who produce and sell vacation-related products and services.

The desire to explore the world has not changed over the last century, and will not change in the next future. What has evolved dramatically - in the last decade - is the way we research, plan and purchase our trips. What Google has called The Travel Customer Journey. A disruption made possible - again - by the smartphone. 

Long gone are the days when planning a vacation (a honeymoon or a business trip) meant you had to trust a specialized agency, with little control over the final result. In the nineties, the Internet has opened a whole world of information for the customers, and then mobile technology did the rest, switching the balance of power definitely.

Today, the smartphone is the first point of reference whenever we need to find the solution to a problem or the product that perfectly fits our needs. Travel planning makes no exception, as perfectly summed up by a series of reports released by Google on Think With Google.

As more research happens in the traveler's customer journey, there are more micro moments - when people turn to a device with intent to answer an immediate need. In these moments, the stakes are high for travel brands as preferences are shaped, and decisions are made. What happens in these micro-moments ultimately affects the travel decision-making process.” 

In our times of economic constraints, organizing a vacation can be tricky business:

  • People see the travel as an investment, and so take all the time needed to research the possibilities (mostly using their mobile devices).
  • Travelers usually worry they are not finding the best solution or making the best decision, even while they are paying and booking.
  • Even when they find a last minute opportunity, most customers bounce back and forth between destinations, websites, agencies, and price comparison engines.  

Customers are much more conscious and demanding than in the past. They spend more time researching and comparing the alternatives (in terms of destinations and providers). They go through a multitude of touchpoints and, even though they take quick decisions, ultimately ponder every single detail.

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If your brand plays in this industry, the task is clear and simple:

  • You must show up during the critical micro moments of travel research process;
  • You must be there, reachable whenever customers need your attention or help;
  • You must be useful, engaging them with relevant, useful, personalized contents and offers;
  • You must be quick. If you do not convert your customers, someone else will (namely a competitor).

The main reference for this article is the ‘Travel Micro-Moments Guide’ published by Google. The underlying assumption is that “travelers increasingly turn to mobile in real time and on-the-go, making informed decisions faster than ever before. For marketers, this means there are new opportunities to connect throughout the entire travel customer journey, across devices and channels.

Researchers have defined four main travel micro moments that matter:

I Want To Get Away - We explore options and ideas, looking for inspiration.

Time To Make a Plan - We have a destination, and look for dates, flights, accommodation.

Let’s Book It - We are ready to book and look for extra activities to reserve.

Can’t Wait To Explore - We prepare to live the experience, and share it with the others.

Given the premise, we see a huge opportunity for those who provide products and services related to the various the steps of the travel experience. The digital customer journey of the travelers has become more complex than ever, and so you have multiple chances to engage customers. 

Whether you are an online or offline business, you may tap into one of the main micro moments or everywhere in between those, proposing suitable and innovative solutions. In example: a micro-insurance delivered on the smartphone at the right time; a local transportation mobile app filled with shopping and entertainment suggestions; a conversational interface or Facebook Messenger chatbot that helps customers find the best prices or deal.

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Of course, mobile is the keyword to understand the new scenario, because the micro moments mostly unravel online: 

Recent data show that there are already more searches on mobile than desktop for select travel categories, such as family vacations and luxury travel. And when it comes to planning holiday activities, mobile devices are giving travelers increased flexibility. Many travelers are willing to plan activities on the fly, while they are at their destination. 

The optimization for mobile is mandatory now that customers take faster decisions and expect faster experiences: 

Over 90% of travelers using mobile devices will switch to another site or app if their needs are not being met. 79% of mobile travelers say that when researching on their smartphones, they are looking for the most relevant information available, regardless of where it comes from.

The continuous transition from the real world to the digital dimension generate a whole new set of data that you can use to get a better understanding of customers. When it comes to travels, in fact, not all customers are equal.

Also, this type of experiences is heavily influenced by the emotional and psychological traits. Data-backed psychographics research becomes essential if you want to sketch a proper customer journey map, build a successful digital strategy, and ultimately deliver truly personalized contents linked to the emotional profiles of the different customers.

Once you determine customers’ behaviors and deepest needs, you can anticipate their needs and desires. You will also be able to prioritize the right audience and target the most valuable customers with tailor-cut contents, notifications, and promotions. 

Travel marketers need to account for the new multi-device, multi-channel landscape. And those who are moments-ready—and consistently manage their share of intent to meet consumer demand—will take the lion's share of the reward.

Photo by Deanna Ritchie on Unsplash

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Topics: Customer Journey customer engagement customer loyalty Digital Customer Experience Mobile

Be Human - Matching Customer Personality is the New Key to Relevance

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There came a time when the digital era took over the analog world and completely changed the face of marketing, with no possible turning back.

If you ask how things changed, most marketers will likely point at three main areas of marketing that have been disrupted: Speed, Relevance, Reach. The rise of digital means you can (must) be incredibly fast and get an unprecedented coverage - something you could only dream two decades ago.  

If we focus on the mere numbers, there is no comparison between the analog and the digital worlds. It gets a bit more complicated when it comes to relevance, a purely subjective concept.

When we say or hear that digital technology has given us highly relevant marketing and branding campaigns, what are we referring to?

In our previous article about the Psychographics we have emphasized how a good seller always understands his customer, and has an easy game knowing how to communicate with him - not just what to propose but how to sell it. In his own way, he is surely relevant.

In the digital communication, this kind of ‘human’ relevance is lost: messages are targeted to specific groups of users, which are segmented and profiled based on some objective, explicit and observable data (typically demographic and behavioral).

Attitudes, emotions, and personality are almost never considered, although they are a big part of what makes the human communication so appropriate, empathic, and relevant.

Here, we are talking about the importance of psychology and the influence it has on the development of marketing and technology. What can psychology do to increase the relevance of your Brand’s communication on digital channels, where technology - with its speed and reach - has replaced the human touch?

For decades now, psychological studies have played a prominent role by identifying strategies to improve the effectiveness of marketing campaigns through the principles of persuasion. One such strategy, known as message tailoring, involves the adaptation of communication to the characteristics of the customer.

As researchers have shown, messages that fit with an individual’s attitudes and dispositional motives are processed more fluently and evaluated more positively than incongruent messages. These effects have been observed across several domains, including prevention, behavioral change, and consumer purchases.

For marketing and advertising professionals, this means that tailoring the messages so that they match customer personality can be a promising tactic to increase the effectiveness of campaigns.

To better understand this interweaving of disciplines, we have to pass from theory to practice. For example, by framing the messages through the well known Big Five model of personality, it becomes possible to target a broad variety of motives, including:

  • Desire for excitement, social rewards, energy, and fun - powerful drivers for Extroverts.
  • Sympathy, interpersonal harmony, connection with family and community - values more significant for Agreeable people.
  • Efficiency, order and goal pursuit - primary motives for Conscientious people.
  • Quiet, carefree, safety and security - people with lower Emotional stability pay more attention to these benefits.
  • Creativity, curiosity, innovation, imagination and intellectual stimulation - perfect features when interacting with people Open to experience.

As a result, an advertisement emphasizing a specific motivational concern, congruent with the user’s personality traits, would be more effective in term of attention, evaluation, and impact.

To sum up, in an era where the customer centricity is more and more about personalization, understanding customers as human beings in their uniqueness is the only way to anticipate their needs and desires.

If you know what they are about to do before they actually do it, you will unlock the true power of digital and mobile technologies; Technology may make giant leaps forward in all areas, but communication is definitely where Natural Intelligence still wins.

We are empathetic human beings, and we can flexibly adapt our attitude, language, and relational approach. In this perspective, machines are still far away from us, and will probably always be.

That is why you should strive not to replace human with technology, but to fill the gap between the two by infusing more human capabilities into technology. Talk to your customers as humans, and you will ultimately build strong, intimate, long lasting relationships.

Photo by Clem Onojeghuo on Unsplash

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Topics: psychographics customer loyalty customer engagement

"Persona-lize" Your Strategy To Change the Face of Customer Centricity

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Recently, we have talked about Gamification as an unconventional way to engage customers and increase loyalty, in a world where the two go hand-in-hand and are intimately related.

Now we take a step back to move forward, shifting the focus from the engagement to the understanding. Even before thinking about ‘how’ to drive customer loyalty, in fact, you need to figure out ‘who’ your loyal customers are.

Behavioral science has done a lot of work to provide marketers with valuable insights. The aim is to put customers in a buying mood, by pushing the right buttons, finding the right needs to tap and shaping them with the right words.

As an effect, you will be able to drive customers’ preferences and other virtuous behaviors, including positive word-of-mouth, loyalty, and so on. These goals are of primary concern to all marketers, regardless of the industry or the competitive arena.

If word choices reveal - consciously or unconsciously - our state of mind, so the shared language reveals shared meanings, and shows a certain view of the world which continues to strengthen over time.

In the same way, marketing language says a lot about the relevant culture, mindset, and attitude amongst professionals, and the more we think about it, the more we get skeptical about the long-term effectiveness of this approach.

We can sum it up in two questions. The first one is of a purely linguistic nature.

Who Takes Center Stage?

Reach the target audience, shape customers’ needs, drive preferences and choices, stimulate customers to buy. All these expressions have something in common, beyond being overused: the brand takes action, not the customer.

We talk a lot about customer-centricity and the shift from passive to empowered customers, but the reality is that more is said (and “story-told”) than done.

Our language reveals what implicit stereotypes and beliefs are still embedded in our brains, including such of companies and brands actively shaping customers’ attitudes and thus driving desired behavior - but does this not represent a step back from the very concept of customer empowerment?

One of the most important - and most sensitive - issues for brands is customer loyalty. When it comes to loyalty, we use to say that loyal customers are typically those more satisfied, engaged, and delighted.

That is absolutely true, but we are again taking in account solely the perspective of the Brand, and so considering an oversimplified and incomplete version of the reality, the one that better explains marketers’ goals rather than those of the customers.

And here comes the second question:

What about individual differences?

This approach takes into account customers as if they were a single monolithic entity, to be treated in the same way. Of course, as human beings, we are not totally separable: we share common basic human needs, motives and cognitive patterns that determine our spontaneous behavior in response to certain stimuli.

Individual differences, however, play a crucial role in determining people’s preferences and choices, whether it comes to personal life, professional decisions, or purchase behaviors.

Sometimes consciously, sometimes not, our dispositional motives continually shape and drive the experiences that we have, including our buying experiences. So, why should these factors not be considered in your marketing and communication strategy?

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There is clear evidence that tailored messages are considerably more effective than one-size-fits-all campaigns, and that the effectiveness of tailoring increases with greater customization and adaptation to the unique features of the recipient.

For example, as suggested by Higgins in 2000, you should frame your message to match the recipient’s personal goals by focusing either on promoting gains (e.g., “Product X makes teeth stronger”) or on preventing losses (e.g., “Product X prevents cavities”).

Moreover, many other researchers have shown that messages that are consistent with an individual’s motivational orientation are processed more fluently and evaluated more positively than inconsistent ones.

The effects of what we can call the “message/person congruence” have been examined in correlation to differnt psychological characteristics, including the Big Five Factors, by changing the framing of a message to target specific motives, such as desires for excitement and social rewards, connection with family and community, efficiency and goal pursuit, safety and security, creativity and intellectual stimulation (i.e. see Personalized Persuasion).

For years, retailers have been using a variety of personal information, such as purchase and the website journey history, to tailor their online offers to individual customers. But an emerging literature in the field of Marketing Psychology says that personality traits are no less important.

If there is any one secret of success, it lies in the ability to get the other person's point of view and see things from that person's angle as well as from your own, Henry Ford said.

One of the first rules of persuasion is: Know your audience. In a world of companies and Brands striving for relevance, understanding your audience’s point of view is a strong element of differentiation. Understanding every single customer’s point of view? That would be the turning point!

First of all, customers are individuals, and every individual is unique - the way we think, behave, and act, we all do it differently. As the way we communicate to others reflects our mindset, even the way we respond to (and are attracted by) different communication styles changes significantly, depending on our personality. We are more likely to interact, listen, share, believe and be persuaded by communication styles tailored on our peculiarities.

To cut it short, understating customers’ ability to shape the world around them proactively gets into conflict with the very idea of customer-centricity. More, overlooking customers’ individual characteristics undermines the concept of personalization, turning it into a ‘buzzword’ without any substance.

Taken together, these two ‘gaps’ offer huge opportunities for those who are willing to overcome the ‘Business As Usual’ (to quote Brian Solis)  and define a real turning point in the world of customer experience. What would you do if you were able to “persona-lize” your marketing strategy?

Cover Photo by Bryan Minear on Unsplash

Download The 7 Pillars Of The New Customer Loyalty to define the foundations on which to build your engagement and loyalty strategy, create innovative experiences and establish a lasting and valuable relationship with your customers.

The 7 Pillars Of The New Customer Loyalty

Topics: customer engagement customer loyalty Digital Customer Experience

The Seven Pillars Of The New Customer Loyalty

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Is Brand Loyalty still relevant for customers? In a market where the limitations of space and time are canceled by technology - and we can buy everything we want directly with a tap on a mobile screen - does it make sense to talk about loyalty?

The answer is ‘Yes’ to both questions. Customer Loyalty is still relevant, but it is hard to get and even harder to retain as the competition is so tight. This is the starting point of The 7 Pillars Of The New Customer Loyalty, our new checklist that will help you improve your strategy and evolve to stay relevant. 

As said, loyalty is still important and will continue to be in the next future. Indeed, in times when we have become accustomed to brand switching and polygamous loyalty, the ability to attract and retain the attention and engagement of customers is even more critical.

The reason lies not only in the economic value of this long-lasting relationship - loyal customers buy more and more often - but also in exponential effects regarding competitive advantage (i.e. the sharing of 'positive vibrations' in their communities and social networks).

If the intrinsic value of the customer loyalty remains unchanged, however, the same can not be said of the relationship between companies and people. This connection has been deeply altered by the advent of the digital technology, that has shaped the market scenario in which we have been immersed for more than ten years now.

Not to mention that the pace of this change has further accelerated with the advent of the mobile devices. In a few years, in fact, the smartphone has become the primary point of reference we all turn to when we need information and make weighted decisions.

Whether it is a car purchase, a comparison between two TV models, a holiday booking, the choice of the perfect outfit for the evening, or the sharing of our opinions, the answer is always there, in the palm of our hand.

If we turn the focus on the Brand, the story remains the same: the smartphone is the primary means of spreading contents and messages. When it comes to digital customers (Millennials and Generation Z above all), there is no engagement and loyalty strategy without mobile technology.

We want to emphasize the fact that technology is, as always, a means and not the ultimate goal of your strategy: the solution is not to recreate, in the digital context, the old dynamics of engagement and fidelization typical of the offline world (a virtual loyalty card, to name one).

The reason is that today people do not just want to buy products or services. They want to live experiences. At the heart of any loyalty strategy, there should be the awareness of the value of customer experience as the primary factor of differentiation on the market.

According to Gartner, 89% of companies expect that the decisive battle for relevance on the digital markets will be fought in the field of customer experience. It is not a coincidence: people already consider the experience more important than price and the product itself.

In order to grow your business, you must build personal relationships with customers. Focusing on the experience is the only way to move from a utilitarian loyalty (I spend, and you give me a tangible prize in return) to an emotional loyalty (I choose you because I feel I am an integral part of the Brand).

The evolution from a traditional fidelization to the 'new customer loyalty' is not easy or immediate, but it is necessary if you want to survive in an ecosystem increasingly saturated and competitive. To move towards the future, you must first take a step back, admitting that you do not know your customers, despite the Big Data and your CRM.

The amount of information about customers that the technology makes available to companies is of no use if you do not know what to look for, how to move from macro to micro, and ultimately how to get an intimate understanding of the person.

Before even thinking about customer engagement and loyalty, you have to understand people. Choices are mainly driven by emotional elements, so you need another key to read the traits of personality, behaviors, attitudes, thought patterns, and prejudices.

We are talking about the final step from the study of the Demographics - which tell you who the customers are - to the Psychographics - which tell you what they think and what they want.

Only by studying these essential hidden traits you will be able to gather and select the data you need to personalize experiences and messages. Understanding is the basic requirement to convert customers into Brand Ambassadors.

The purpose of The 7 Pillars Of The New Customer Loyalty is to define the foundations on which to build your engagement and loyalty strategy, to create innovative experiences and establish a lasting and valuable relationship with your customers.

You can download it for free at the following link:

The 7 Pillars Of The New Customer Loyalty

Topics: customer loyalty customer engagement Digital Customer Experience Mobile

Generation Z - Understand And Engage The Mobile-First Customers

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We have barely started to understand millennial customers, and it is already time to move on. Say hi to the Generation Z, the first ‘truly mobile-first’ generation of customers, set to disrupt (again) the way you plan and execute your business.

Till now, the GenZ has been overlooked in marketing research, because younger customers did not have the same purchasing power of the previous generations. The spotlight was on Millennials, but things are swiftly changing.

Just so we are clear:

  • The Generation Y, what we call Millennials, includes those born between the early 1980s to the mid 1990s.
  • The Generation Z, also know as Post-Millennials or iGeneration, includes those born between the mid 1990s to the early 2000s.

Millennials have captivated marketers and researchers for the past five years or so because they have represented the final transition from an analog to a digital world. They were - and still are - the first digital customers, with a very peculiar mindset and unprecedented needs and desires.

The digital customer is, still today, the primary focus of business planning, but there are new kids in town, and you should not ignore them. We are talking about almost 60 million teens in the US alone, that translates into more than a quarter of the entire US population.

While the two generations have some traits in common, in fact, they also show different behaviors and approaches when it comes to technology. The GenZ grew up submerged in a digital world, shaped by mobile devices. They do not know other world but this.

Millennial customers were mobile pioneers, but today’s teens are mobile natives. A huge difference. They live in symbiosis with their smartphone; they rely on Google, social networks, and communities for all daily activities.

They are not shy about buying online from their mobile devices and, even when they go to the retail store, they walk in expecting something fresh, innovative, engaging. A powerful customer experience, in a few words.

This generation of customers brings to completion the evolutionary trajectory started with the Millennials. They had phones when they were in elementary or middle school, and that shift is already shaping customer journeys that you need to study and understand.

Your business will be affected by their behaviors sooner or later. They are young but, even today, they spend something like 44 billion dollars annually (in the US alone). This figure is set to grow exponentially in the near future.

The first step to understanding the post-millennial customers is to compare them with the previous generation. Last year, in an article published on The Huffington Post, George Beall tried to identify how the GenZ differs from the GenY. What came out is something that you should bear in mind when you plan your next marketing moves.

Among other things, post-millennials teens are:

  • Less focused: They process information faster thanks to mobile apps, and their attention span is significantly lower than other customers.
  • Multi-Taskers: Whatever they do, they do it using multiple devices. This behavior is critical when you try to frame their purchase behaviors.
  • Less price-obsessed: They favor the experience over the bargain. Price is steadily losing weight in the list of factors that influence the purchase.
  • More demanding: “They expect businesses, brands, and retailers to be loyal to them. If they do not feel appreciated, they are going to move on. It is not about them being loyal to the business.”  (Marcie Merriman, Ernst & Young)
  • More social: born and grown with a smartphone in their hands, they are strictly linked to their social communities and communicate mainly through mobile apps (Snapchat, YouTube, Instagram).
  • More global: Millennials were the first global generation, thanks to the Internet, but the GenZ is even more ‘global’ in their thinking, interactions, purchase behaviors.

Putting all the pieces together we see that the smartphone is the pivot around which the whole existence of teenagers revolves. A further confirmation comes from a recent report by Google titled “Generation Z - New Insights Into The Mobile-First Mindset Of Teens”.

The first finding is precisely the importance of phones. Getting a phone is a life-changing event, up there with graduation and driving license. While teens have more devices than ever at their disposal, the smartphone is the most used. Moreover, they usually get it earlier than previous generations (the median age is 12).

GenZ - Cool Brands(Click on the picture to enlarge)

The smartphone acts as a bridge that connects the offline and online experiences of teens. Visual contents, messaging apps, social networks, and video games create the environment in which they share their life and find entertainment. Fun - or maybe not fun at all - fact: Nearly 3 in 10 teens say they text with people who they are physically with at the time.

Another research finding states something we have already said: GenZ is a mobile-first shopping generation. Teens have a peculiar idea of what is ‘Cool’, they know what they want, and they buy it online. Video games, books, and apparel are the most common products bought online.

What is really interesting is that they buy online not only because it is more convenient and they can find better deals, but also because they can see multiple brands and retailers without leaving home, and they can choose faster than going to the physical store.

All in all, 53% of those between 13 and 17 years old mostly use the smartphone to make online purchases. If you are a retail brand trying to establish your position in a hyper-crowded market, you might want to take note of this new habit.

The technology is ‘how’ they make purchases, and the ‘Cool Factor’ is the foundation of ‘why’ and ‘what’ they choose one product over another. What aspects make a product cool? The word-of-mouth (offline and online) is still the main factor affecting the choices, and the new forms of advertising come right after.

The third factor, though, is what draws our attention: Something is cool if it is personalized to me. Millennials have been called the Me-Generation because of their self-obsession; with the GenZ, this trend is expected to undergo a fast track.

Personalization is the foundation of cool contents, products, and experiences. Something is cool if it is unique, impressive, interesting, awesome. If they perceive that it is tailored to them, on their dreams and desires.

They expect big things. Your challenge is to live up to the standards and exceed their expectations. After all, these young customers represent the future of your business. A future that is already here.

 

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Topics: customer engagement customer loyalty Digital Customer Experience Mobile

What Drives Customer Loyalty? Look Beyond Traditional Programs

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What are the drivers of customer loyalty? One of the major challenges brands face today is to create meaningful, satisfying experiences for their customers. Experiences they will love so much that they will come back again and again.

The spread of disruptive technologies undermines the ability to conquer and retain customer’s heart using traditional loyalty programs. When technology changes, so do the drivers of trust and engagement. Are you willing to look beyond the usual way of doing things?

In the last few months, we have witnessed a wave of new, interesting researches on the issue of loyalty and its impact on what we call “the relevance of a brand”. Creating and retaining a customer base that is faithful to the company is the top priority. There is a direct link, in fact, between loyal customers and their profitability.

Back in 2015, we wrote a piece about customer retention, and how to improve the way you plan and execute your strategy. A few statistics, taken from that article, still give us valuable hints:

  • The probability of selling to an existing client is between 60 and 70%;
  • The probability of selling to a new customer is just 5-20%;
  • It costs six times more to attract a new client than to retain an existing one;
  • A 2% increase in customer retention has the same effect as decreasing costs by 10%;
  • A 10% increase in customer retention result in a 30% increase in the value of a brand.

It is easy to see why investments in loyalty are booming. According to a recent report by Accenture Strategy, not coincidentally titled ‘Seeing Beyond The Loyalty Illusion’, “more than 90 percent of companies currently employ some form of customer engagement or loyalty program. In the United States, alone, loyalty program memberships grew at a rate of 26.7 percent from 2012 to 2014.

While the investments are growing, however, customer satisfaction remains an overlooked and underestimated field of study. This casual approach leads to an inevitable conclusion: the costs are increasing, and yet most loyalty programs fail to deliver valuable engagement or actual business results.

If something is not working, you put it down, right? Not this time. Traditional programs do not work, but they are still there; because sometimes it is easier - in terms of money and time - to keep them than shut them down. It is hard to admit a failure. So, billions are spent each year in traditional incentives, collections of points and non-cash rewards.

What is the result of this effort? Back to Accenture Strategy:

  • 71 percent of customers claim loyalty programs do not engender loyalty;
  • 77 percent of customers retract loyalty more quickly than they did three years ago;
  • 23 percent of customers show negative or non-existent reaction to companies’ loyalty efforts.

All in all, the propensity to switch from one brand/product to another “is six percentage points higher among customers for whom traditional programs have a negative or negligible effect.

This gap is destined to increase now that millennials - the first true digital native generation - are showing their full potential, becoming critical to driving revenue growth. The digital customers:

  • Take faster purchase decisions - The attention span lowers to 8 seconds.
  • Live online and offline at the same time - The customer journey gets disrupted.
  • Reward the most innovative brands - ‘Mobile-first’ becomes ‘Mobile-only’.
  • Show different purchase patterns - The 4 Ps of marketing change forever.
  • Choose experiences over products - The customer experience becomes the key.

Of course, retention is a long-term run, not a short term activity. However, given the premises, how can you react if loyalty programs cost significantly more, and deliver significantly less? How should you adapt to avoid that the value of loyal customers slips through your fingers?  

Tokyo, Japan view of Shibuya Crossing, one of the busiest crosswalks in the world..jpeg

You have to look beyond usual, and you can do it starting with your customers. ‘Engage’ and ‘Convert’ still are two critical keywords in the age of digital transformation, but they are now complemented by a third - and increasingly important - element: ‘Understand’.  

To keep it simple, you will never engage and monetize your customers if you do not know them in the first place. Knowledge is the foundation of today’s marketing. You must know who your customers are (Demographics) but also what moves and motivates them, what are their main psychological traits. Why they do what they do (Psychographics).

Loyalty is more than merely collecting points for every purchase. Loyalty involves an emotional investment, a personalized relationship, a relevant connection.

Even when you employ new technologies in your programs, you must remember that technology is the means by which you create value for customers, not the ultimate goal of the entire strategy.

We get tons of information from customer service, but it Is really important to know how to use that information and not just take it at face value. It Is necessary to interpret customers, not just take them word for word.” (Maryam Mohit, Vice President of Amazon)

In recent times, customer research and analysis have gained brand-new momentum. The most innovative companies have realized that the in-depth knowledge of clients is mandatory, in order to exceed their needs and provide the best customer experience.

All the data in this world, though, will not help if you keep focusing on the most obvious findings. Today more than ever, you have to understand and drive the important clusters of emotions that either destroy or drive added value and create loyal customers.

A wrong approach to customer research translates into wasted opportunities (and budgets). The investments grow but not the understanding of how customers behave, and why. Loyalty still matters but you need to move beyond the old rules, and rethink the way you build and deliver engagement through your entire brand essence.

In other words, you need to find the new drivers of customer loyalty, those that fits perfectly with your customer’s profile, habits, and behaviors.

According to the American Marketing Association, “there are five variables that have been uncovered to be potential drivers of brand loyalty; several have multiple indicators that are combined.” These variables are:

Dependable - When your brand can exceed expectations and create consistent experiences across all touch points of the customer journey.

Better - When you establish your brand as the best solution to fulfill customers’ needs, when and where it matters most.

Social media - When your brand is able to speak your customer's language and connect with them delivering engaging, personalized contents.

Light emotional connection (LEC) - When your brand can close the link to your customers as human beings, not just mere consumers.

Heavy emotional connection (HEC): When your brand can tap into your customer’s heart and mind, leveraging inspiration and emotional advocacy.

Study, analyze, act: this is the proper sequence. Today, loyalty is not just a program; it is a full-time commitment at all levels of your organization. If you make the necessary adjustments, you will unlock the power of technology, to create business value, sustain growth and gain competitive advantage.

 

Interested in Customer Loyalty? Check the following posts:

CUSTOMER LOYALTY - WHY IS IT SO IMPORTANT?

5 THINGS SPORTS CAN TEACH YOU ABOUT LOYALTY

GAMIFICATION - ENGAGE CUSTOMERS PLAYING WITH THEM

 

Download The Mobile Engagement Playbook, a collection of relevant insights based on many years of Neosperience's expertise that'll help you to overcome the challenges of the digital transformation and grow your business exponentially. 

Get The Mobile Engagement Playbook

Topics: Digital Customer Experience customer engagement customer loyalty