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A New Framework for the Marketing Mix: The Customer Mix or 6W’s

10th August 2018

Many of you will have studied marketing at university. You will have learnt all about the marketing mix. My question is whether or not the Marketing Mix is still meaningful in this day and age?

 

The Marketing Mix

Developed in 1960, the original Marketing Mix framework for creating a marketing strategy – as conceived by American academic E. Jerome McCarthy – included four aspects (the 4 Ps):

  • Product
  • Price
  • Place
  • Promotion

The above four aspects were subsequently complemented by three more aspects to make the 7 Ps: (McCarthy, 1960)

  • People
  • Process
  • Physical Evidence

This framework continues to be espoused and used to this day. But is it fit for purpose in the Internet age, when the balance of power has fundamentally shifted from suppliers (retailers and product manufacturers) in favour of consumers? And, in particular, is it fit for purpose for a multichannel retailer or any other consumer facing brand? I don’t think so, the main reason being that it’s not customer-focused. The People aspect of the 7 Ps refers to staff, not customers. While it may have been a useful framework in its day, the marketing mix has never spoken to the fact that the customer is king. Without customers, we have nothing. So why is it that we continue to focus so much on the top of the funnel and on acquiring new customers, when retaining them is so much more cost-effective?

 

It’s a war out there, how far are you prepared to go to fight for customers?

Winning and retaining customers should be like going to war. It is a battlefield out there, requiring careful strategy and deliverance with a lot at stake.  There are many other businesses who will gladly poach your customers. Customers should consume your every waking moment, at least when you’re at work. If they don’t, then you’re simply not working hard enough for them.

Amazon has a role in their team known as ‘the customer experience bar raiser.’ There is a bar raiser in every project and their role is to push the team and the approach to consider whether or not the project they’re working on will deliver all it can for customers or whether ‘the bar could be raised’ even further.

The Marketing Mix framework was originally created in a time long before everyone had access to the inter net. Car dealers, travel companies, restaurants and retailers were not serving customers who have extreme choice, extreme price and product features transparency, and an almost limitless number of different customer journeys they can follow. Today all of these consumer sectors have a much harder time acquiring their customers, and an even harder time trying to retain them. As many businesses declare themselves to be customer-focused, surely there should be a framework that really puts the customer at the heart of what’s being delivered and give them a chance of winning the battle for the customer?

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INTRODUCING THE CUSTOMER MIX

How different would the framework be if we really put ourselves in customers’ shoes, rather than simply thinking about what we want to deliver to potential customers and how we deliver it? So, instead of the 7 Ps, I’ve created a Customer Mix framework with 6 Ws that aims to do just that. The following explains why it’s the right framework for consumer brands today.

The Marketing Mix doesn’t properly consider customers’ motivations, preferences and loyalties (or lack of). It doesn’t consider that different groups and segments of customers might want very different things from the same business. The Customer Mix addresses this.

The Marketing Mix considers each purchase as a standalone transaction, rather than one of a potential group of transactions over time. For example, the Process element of the Marketing Mix refers to the customer experience delivered primarily before and during a single transaction. Due to the costs incurred in acquiring and serving customers, and the increasing levels of competition from the disruptors, modern multichannel businesses need customers who they can build relationships with, and so must focus on customer lifetime value.

If you don’t focus on the customers lifetime value, how can you possibly know how much you should invest in recruiting a customer in the first place if you don’t have some idea of their potential worth to you? Again, customer segmentation will enable you to recruit more profitable customers with better lifetime value potential. I talk more about this in chapter 17 of my book, when I discuss CRM and customer insight.  The Customer Mix looks past the next transaction and thinks about what’s required not just to sell an item, but to keep the customer’s loyalty for future purchases.

So, what does each of the Ws within the Customer Mix really stand for and, more importantly what do they mean for a multichannel consumer-facing business?

WHO

There’s no P in the Marketing Mix that is focused on customers. In the Customer Mix we directly consider Who the different target customers are. Few retailers are niche enough to have a single customer type with one set of needs and desires. The majority of multichannel businesses have created a variety of ways to shop primarily because they do not serve a homogenous customer base. You need to analyse your customer data to understand who your best customers are and create key customer segments. In customer-centric organisations, these customer segments are developed into customer personas. Staff across the business can consider how their decisions on everything from products, to prices to service will likely impact on these target groups.  As Professor McDonald pointed out earlier, there is no such thing as ‘the customer.’ There are lots of customer segments. Without trying to be all things to all people, the key is to understand how best to serve your core customer segments.

WHY

Combined with WhoWhy informs us on our target customer segments and their motivations. It prompts retailers, banks, car dealers, restaurants and all consumer facing businesses to consider not just why a customer wants a particular product or service, but why the channels used during the customer journey may be important to the purchase decision, as well as the fulfilment timeframe. An understanding of Why helps businesses to become more relevant to their customers. It can inform marketing, merchandising and product or service design decisions. For example, if a customer segment is time-poor and cash-rich, thinking about motivation might lead to the creation of premium services to engage them better, rather than a change to the product range being required.

In my book “100 practical ways to improve customer experience”,  I provide an example of this in chapter 1 with “You Try, We Wait,” Net-A-Porter’s personal shopping assistants will deliver orders to their extremely important customers (EIP-extremely important people) at their home on the same day as they place their request. They will then wait until the customer has tried on the pieces they ordered, and take back anything that the customer doesn’t want to keep.

WHAT

This replaces Product in the marketing mix and focuses on what we believe our target customer segments will be most interested in purchasing. But it goes beyond product too, as What the customers want can include value, convenience or personalisation of the offer. It can also include services, and in the marketing mix, ‘Product’ doesn’t really lend itself to these additional requirements. Sometimes products and services cannot be separated. One example is the many online subscription-based ecommerce sites that have sprung up. The consumer isn’t just buying into the products provided, but the concept that they receive something in the post on a regular basis.  As I mentioned previously, retailers and other consumer-facing verticals need to think like service providers and what they can do to become more useful to their customers.

WHERE

Replacing Place in the Marketing Mix, Where considers locations for fulfilment, and also locations for every other aspect of the customer journey including research and purchase. In a complex multichannel customer journey we can no longer assume that a product is purchased in a store or at a desktop computer, and fulfilled by either home delivery or taken from the store at the point of purchase.

What’s offered at a variety of locations may be important to a customer’s overall decision to purchase, and remain a customer too. A good example of this is in China. Unencumbered by legacy technology, processes and store footprints, Alibaba has opened grocery outlets under the ‘Hema’ brand. They have installed a ship from store proposition with a fully automated system that takes the customer’s order from the shop floor to the back of house where it will be packed and dispatched for delivery to the customers home at a time of their choosing.

Another example is when an online grocery shopper can buy the same brands for a similar price from a number of supermarkets. In this case, having an app that allows the customer to add to their shopping list while they are commuting to work might be important, as might the grocer’s ability to offer click and collect at their supermarket.

Considering Where leads consumer-facing businesses to question every aspect of their multichannel strategy. For instance, do their apps, mobile site and any other infrastructure support customers wanting to shop on the move, or complete transactions within the store, restaurant, bank on their own device? And for online-only businesses without a brick and mortar environment, do they need to consider physical collection points for customers who don’t find delivery options convenient?

According to Salesforce, in 2017 stores remain the preferred channel globally. Even among technology-savvy Gen Z shoppers, 58% prefer the physical store shopping experience. But digital is where most end up starting their hunt: by nearly a 2:1 margin, 60% of respondents are likely to start their hunt on digital, versus just 37% in the physical store.  Retailers are finding success when combining digital and instore to work together seamlessly.  The research found that in-store activity generates almost half of all online activity. They interviewed people to see how instore events and engagement matters and found that 26% visited in store events and 58% were more like to purchase from that retailer in the future (Salesforce, 2017).

There are also an increasing number of good examples of brands that started as online pureplay ecommerce businesses who have opened up brick and mortar stores. One such example is the fashion brand Missguided. A highly successful internet business, they opened up stores in the two main Westfield malls in London. This enabled them to bring their brand to life in a physical environment, but also to provide the multichannel experience that many of their younger consumers demand. They have since gone into the wholesale channel and sell their brand through Nordstrom in the US.

WHEN

Combined with WhereWhen gives us a real sense of how important convenience is to the customer experience. But When is also important in its own right. Timeliness can be key to customer demand – in particular products such as flowers, food or gifts may only be demanded if they can be fulfilled within a very specific timeframe. As consumers in developed economies become more time-pressured, timeliness will only ever become a more important aspect of the Customer Mix. Again, questions about When can consider multiple points in the customer journey. Various clients of mine allow their loyalty cardholders early access to sales events, online and in store. Many retailers report differing success with their marketing emails depending on the time of day they are sent out. Flash offers and price changes can be enabled in moments on the web, which makes time a much more powerful aspect of a consumer facing businesses tactics. Optimising your marketing and trading calendars to maximise sales opportunities is crucial.

WHATS NEXT

There’s no P for lifetime value or ongoing customer relationships in the Marketing Mix. In the Customer Mix this is crucial. As I mention in my book in chapter 7, very few businesses have a dedicated customer retention role. This correlates with the lack of any customer retention element in the marketing mix. Also, implicit in the What’s Nextelement of the Customer Mix is the idea that in modern retailing, customer loyalty can rarely be earned with a single transaction.  At the point you convert a customer for the first time, the best retailers already have a strategy in place for how they will continue to engage with them to keep them coming back. This requires proactive customer relationship management (CRM), rather than the type of reactive and transaction-driven CRM programmes that are still widespread in the industry.

Customer lifetime value is a crucial measure of a retailer’s success with its customers, and should be an indicator of both future sales and profitability. Improving the value and longevity of customer relationships, involves considering some or all of the other five Ws to allow all consumer-facing businesses to meaningfully engage with their customers.

INSIGHT NOT REPORTING

There is way too much data floating around most customer-facing organisations. Without insight, it’s just numbers. Numbers on their own mean nothing. A KPI means nothing, unless you can explain why it’s trending up or down. What were the factors that impacted it from one week to another? To put the customer first, you must have insight about the customer. In chapter 17 of my book, I discuss how to generate insight and how to build relationships with customers based on your knowledge of them.

MARKETING

Too many businesses have siloed marketing teams. Brand marketing, which often looks after the ‘traditional channels in the business’ and digital marketing, which works across all the new channels, are more often than not, working separately. The person who loses out is the customer. Marketing communications has to be integrated.

I have received communications in the past from retailers whereby I was sent an incentive to buy online ‘for the first time’, when I was already an online customer and had been for many years. I’ve had the same scenario occur when I’ve been encouraged to shop instore.

A CULTURE WHICH SUPPORTS CUSTOMER FIRST

As I’ve discussed at various points throughout the book, if you want to change the culture of the business and its focus on customers, then you need to move towards KPIs and measures that give you a real sense of how customers feel about your business.  When you buy a new car, do you, like me, have a great fear that the minute you drive away, if anything goes wrong, it’s going to cost you? This is borne out of the focus on sales as opposed to service that you receive at most car dealerships. This can easily be remedied. But it’s a cultural challenge and requires a root and branch re-set away from a sales culture to a customer service culture. If you serve customers well, they buy and buy again.

MOBILE EXCELLENCE

It should go without saying. However, we really do need to think mobile first. We need to think about the customers cross channel journey and all the touch points along the way and how mobile can be leveraged to support and enhance their journey. Not only that, but we have to start planning for voice activation first with mobile. Within a very short time, we will no longer be pinching and scrolling on a mobile device. We’ll interact by voice alone.  If you ever hope to do business in Asia, then you need to be aware that consumers do everything on their mobile. In China, particularly in large tier 1 and 2 cities, you rarely see people pay with cash. They use WeChat, Alipay and other mobile payment services, often activated through a QR code.

TECHNICAL AND INNOVATION

This is about planning for technology and innovation and not the development of technology for technology’s sake. As I pointed out previously, you shouldn’t have to prove the business case for everything you do, otherwise you’ll never be agile enough to truly innovate. However, the reverse is that you develop technology where there’s simply no use case for it. It must be about enhancing the customers experience with a potential commercial benefit to the business as a result of doing so.

FULFILMENT AND SUPPLY

Here we talk about having flexibly delivery and returns processes.

There are still some retailers today who charge customers for online delivery and for returns. All that does is create a barrier straight from the off.

PRODUCT AND SERVICE

Product and service decisions should be made around the customer and not around the channel. Some very large retailers still struggle to surface all of their brands and products available in store on the website. So, guess what? Not only do they lose the potential additional demand they could generate, but they also suppress sales instore. Most customers use the web now as their first point of discovery before deciding whether or not to visit the store. If they can’t see the brands online on the retailer’s website that they want to buy they may not visit the store in the first place. An exception to this is in China, where most customers start their journey on marketplaces such as TMall or JD.com, as opposed to on the brands own website.

 

For more tips and insight on how to transform your business buy 100 practical ways to improve customer experience now with 20% using code 100CX20.

 

This extract from 100 Practical Ways to Improve Customer Experience by Martin Newman and Malcolm McDonald is ©2018 and reproduced with permission from Kogan Page Ltd.

 

This article was published by Digital Doughnut on 6th August 2018. Read it again here.

The article has also been shared on LinkedIn. Like and share it here.

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Culture eats strategy for breakfast

28th July 2018

Does your business spend more time thinking about its strategy or its culture? I’m fairly sure that in most cases, the focus is on strategy. The culture of the company is often forgotten about when it’s one of the key building blocks for success.

But, as the great Peter Drucker said, “Culture eats strategy for breakfast!”  A strategy cannot be implemented successfully if the culture of the business is not appropriate.

Too often culture is articulated as part of a vision or mission statement, but not something that is at the heart of the business being lived and breathed by all on a daily basis.

More than anyone else in the business the CEO must be obsessed with their business’ culture, to ensure that it permeates the whole organisation. A customer-centric culture has to come from the top, however the bottom up can support this if all of an organisation’s people are empowered to do the right thing for the customer.

To achieve this, the culture of the business must play a part in hiring decisions and induction programmes.

Earlier this year I had the privilege of meeting Jack Mitchell. His family run a fantastic fashion retail business – Richards – a high-end fashion retailer in Greenwich, Connecticut, with stores across the US (including the Mitchells and Mario’s fascias). It’s the epitome of a truly customer-centric business with a business culture to match.

At Richards the staff – some of whom have been with them for decades – know most, if not all, of their customers by name. Jack is the son of the founder and has himself written a book about ‘hugging your customer’; a metaphor for being customer centric. This tells you all you need to know about the culture.

To have a business as customer focused as Jack’s you might find it more effective to adopt an approach of recruiting for attitude and training for skills. AO.com, the pureplay retailer of household appliances, has a focus on hiring people who are both humble and ambitious. Both are key components of its culture.

Big data, small data, whatever-you-want-to-call-it-data, we have more of it than we ever had before. However, data is not insight, and therefore we need to ensure we instil a culture of wanting to understand what the data is telling us, and the actions required to improve performance.

We need to measure KPIs that truly inform us of how our customers see us and our levels of service. It is that constant measuring of net promoter scores, sentiment analysis, ratings and reviews and other customer feedback measures that will inform us how our culture needs to have a customer-centric purpose to it and to everything we do as a business.

Most of us have worked for businesses that penalise failure, the antithesis of a test-and-learn culture or are rife with politics. Neither allows everyone in the business to pull in the same direction.

Wikipedia’s definition of organisational culture is that it encompasses values and behaviours that “contribute to the unique social and psychological environment of an organisation”.

Beware allowing values and behaviours that don’t support the increasing requirement to put the customer at the heart of everything you do.

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Retailers must put customers in the driving seat

1st June 2018

We all know retail is a difficult place to be right now. Consumer expectations have been raised to an extremely high level by disruptive brands such as Amazon, Asos and Wiggle et al.

Traditional multichannel retailers are struggling to keep up. And retail is not alone in facing this challenge.

Think about the experience of buying a car.

Why are car dealerships mainly out of town? They’re not exactly convenient to get to. And what if you don’t have a car to begin with?

When it comes to the deal I’m offered, I almost always feel as if I’ve been ripped off as I’ve been sold to. And the experience of buying a car can be a patronising one for women, where too often they are made to feel less than knowledgeable on all things car-related.

Buying a car is probably the second biggest purchase you’ll make after buying a house. Why is it then that car dealers make no attempt to maintain a relationship with you and build your lifetime value?

There is a very clear customer lifecycle to manage. Most cars are bought on a contract, yet you’re lucky if you hear from the dealer a few weeks before the contract is up.

If you’ve purchased a high-end car, then you might get a magazine sent through the post or an invite to a track day. They’re hardly pushing the boat out to ensure they’re front of mind.

Hence brands such as Tesla and Jaguar Land Rover are disintermediating, and going direct to consumer – which also involves opening ‘car stores’ in more convenient locations such as shopping malls.

I recently had a fairly serious complaint with one of the world’s major airlines, who pride themselves on their ability to serve.

After having written to the chief executive, I was palmed off to someone in the ‘customer care’ team who wasn’t empowered to resolve my issues.

I wrote back to the chief executive. Guess what? I got another call from another person in the ‘customer care’ team, who wasn’t able to resolve my issues but did assure me that my feedback would be fed back to someone, somewhere.

And if enough people complained about the same issue, they’d do something about it!

The airlines who will win the in the long run are those such as Emirates, who have a can-do as opposed to a can’t-do, mind-set when it comes to the customer.

What’s the moral of the story?

The retailers who will emerge from the current realignment of the high street are those who understand what putting the customer first means.

They will empower their colleagues to do right by their customers.

They will have the right insight, technology, processes and capabilities to deliver on their promises to customers.

They will have leaders who empower colleagues to put the customer at the heart of all they do and then lead by example, driving the cultural change required to become truly customer-centric organisations.

Retailers that can do this will engender loyalty, which in turn will increase customer lifetime value.

To address the above and many other challenges when it comes to organisations being truly customer centric, I’ve written a book called ‘100 Practical Ways to Improve Customer Experience’. It’s out on 3rd August and can be pre-ordered now from goo.gl/Y41yfd and get 20% off using code 100CX20

 

This article first appeared in RetailWeek on May 21st, 2018. Read it again here.

The article was reproduced on LinkedIn on May 30th, 2018. Like it here.

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Alibaba – Take a look. You might like what you see

10th December 2017

I’m sure like me, most of you find China a bit of an enigma. Therefore, you probably also don’t really know what Alibaba is all about. Neither did I until I recently had the privilege to attend Singles’ Day or 11/11 as it’s known locally (now, re-branded as the ‘global shopping festival’). With over 140,000 brands, of which 100,000 are international brands, and with $25.4 billion of sales from over 200 countries (in one-day), I think that’s an appropriate title.

I previously thought Alibaba was a Titan who would disrupt retail and potentially destroy lots of established retailers. I fundamentally got that wrong.

While they both provide a platform for us to sell through, and they bring traffic and potential customers, in my humble opinion, Amazon want to sell us stuff while Alibaba want to provide an environment for others to sell us their products.

Alibaba has a strong community aspect to its business. A good example of this is Ling Shou Tong, which is an Alibaba business that provides small independent retailers with a POS system, analytics, digital ordering, supply chain, merchandising and mobile payment solutions; as well as a team of advisers who are able to help them maximise various aspects of their operation such as promotions and in-store merchandising.

I’ve been asking myself for a while why Alibaba hasn’t visibly stepped up its presence in the UK or US? There are a couple of key reasons for this:

Its objective is to get to two billion customers. It already has a customer base of more than 600 million in Asia. There are 1.4 billion consumers in China, nearly the same number in India and another 1.6 billion or so throughout Asia to go after.

These emerging markets have fewer barriers to entry, mobile-first consumer behaviour, a significant middle class with high levels of disposable income, and they also provide a physical retail infrastructure lacking in legacy issues around technology and store footprint.

This all provides an opportunity for Alibaba to extend its HEMA grocery concept. Unencumbered by legacy, HEMA has created a highly experiential retail space with a fusion of live produce, multiple in-store dining options and solutions such as home delivery trollies. Shopping carts even have kids’ toy cars built into the frame. There is a gym, nail bar and other community-based services, all of which increase footfall, dwell time and potential spend per customer.

Alibaba is reinventing retail. Executives call it ‘the new retail.’ I call it ‘customer first.’ The business is taking its immense technical capabilities and marrying this up with consumer needs and use cases, to deliver convenience and experiential retail on a level previously unseen before.

This is leading digital innovation globally. ‘See now, buy now’ allows customers to order items worn or displayed during its gala countdown show in the lead up to 11/11. It is leveraging artificial intelligence to drive more efficient and effective customer service. Its mobile virtual fitting rooms enable customers to ‘virtually try on outfits,’. And Alipay is revolutionising payment solutions.

It’s a shame Alibaba is not currently focused on the West for expansion, as consumers we’d definitely benefit from having it here.

 

This article was first published by RetailWeek on 4th December 2017. Read it again here.

The article was reproduced on LinkedIn on 6th December 2017. Like and share it here.

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Every retailer needs a strategy for Amazon

27th August 2017

Amazon: co-operate or compete?

I’m a Practicologist, and while I’m not a soothsayer, I do have a reasonably good idea of what’s coming down the track.

This last paragraph of my Retail Week column from October 2013 predicted fairly accurately how Amazon would begin to colonise retail:

“A move into multichannel retailing is highly probable, with bricks-and-mortar to enable its customers to ‘choose how they shop’… It has incredible opportunities to scale its business and remains a serious threat to a large number of established multichannel retailers.”

Since then, Amazon has begun to establish a physical presence with book stores, Amazon Fresh, its acquisition of Wholefoods and Amazon Go; in addition to same-day delivery.

This trend is only going to accelerate. So how should you respond?

Retailers tend to look at their traditional competitive set when thinking about their positioning, customer value propositions, range, marketing etc. This, I believe, is missing the point.

Market share is being taken by marketplaces. Just ask the CEOs of large US retailers such as Macy’s, Nordstrom, Neiman Marcus, JC Penney et al.

Amazon took 53% of all the ecommerce growth in the US last year, and 43% of total US online revenue, according to research firm Slice Intelligence.

Amazon’s value chain is far superior to most:

·     It has a better logistics network and proposition than anyone else. Once you’ve paid for its Prime delivery service, why go elsewhere?

·     It has a broader range of products than anyone else

·     It has a better supply chain

·     It has a stronger price proposition than anyone else

·     It uses customer, product and pricing data more effectively than probably any other retailer; to the level that its ultimate objective is to send you something before you even know you want it!

·     It has better overall customer service than most

Of course, it’s not only about Amazon. Alibaba’s Tmall Global will undoubtedly take share, in addition to the vertical and sector specific marketplaces such as Zalando in the fashion space.

Here’s a few tips to ensure your continued growth:

·     Create a P&L line for the attribution of the web on your store business. That way you’ll invest appropriately in digital

·     Offer click and collect, next-day delivery and free returns to give the customer what they want and expect

·     Empower your people to do the right thing for customers

·     More product searches start on Amazon than Google. So, while the latter is still hugely important, the former may need to become a channel to market for you

·     Adopt a fail fast, test and learn culture. If you have to prove the business case for every initiative, you may not be around in five years’ time

·     Segment your customers to offer more personalised experiences

·     Re-think the role of stores and how to leverage digital to remove friction and deliver engaging customer experiences

·     Become a service provider. Start by thinking of yourself as a customer service business that just happens to sell stuff.

Amazon will recruit 5,000 additional UK employees during 2017, at a time when many UK retail stalwarts are shedding roles. Whether you choose to embrace Amazon as a channel to market or address your value chain to compete, it’s crucial that every retailer has an Amazon strategy.

 

This article first appeared on Retail Week on August 21st, 2017. Read it here.

The article was reproduced on Linkedin on August 22nd, 2017. Like it here.

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Social media is about fast customer service, not just chat

10th June 2017

The “feedback” British Airways’ customers have recently provided via social media, and the airline’s largely inadequate responses, remind me of how big businesses can still get social very wrong.

Too many consumer-focused businesses treat social as a tactical engagement channel. It should actually be a pillar of their customer engagement strategy. Here’s my thoughts on where they are going wrong, and what needs to change.

Customer service

Increasingly, customers expect instantaneous feedback through social channels, particularly Facebook or Twitter. Even more so if they’ve made a purchase online.

But many brands operate with 24-hour response times. This is simply not good enough. It leaves the brand owner exposed as customers grow angrier by the minute.

Customer frustration turns into word of web. Word of mouth has the potential to reach dozens of other consumers, but word of web could easily reach a few thousand on Facebook.

And if it gets picked up by the press it could go further. This week H&M has had much press coverage after a young customer, Lowri Byrne, used the brand’s Facebook page to highlight sizing issues. Lowri showed her struggle to squeeze herself into a size 16 H&M dress, when she normally wears a size 12.

Meanwhile, United Airlines saw exactly how bad word of web gets, when a video of an elderly customer being forcibly removed from a plane was replayed online around the world.

Today, treating an individual customer badly can knock $1 billion off your market capitalisation. The fear of a social media backlash should impact on the standard of the offline customer service you deliver too.

Marketing

This is the opportunity to promote products or services and engage with customers, ultimately to drive sales.

AO.com sells fridge freezers, tumble dryers and washing machines – not the most exciting products – yet its focus on fun, content-led social marketing means it has around 1.7 million followers on Facebook, over 150,000 views of videos on YouTube every week and significant engagement across all social channels.

AO.com founder and ex-CEO John Roberts’ dedication to sending customers written replies to customer complaints also pushed many customers back onto social to sing his company’s praises, even if their initial experience was negative.

HR

Think about how you use social to build your employer brand too. When was the last time you checked Glassdoor to see what your employees really think about you? Prospective employees increasingly will be, so if you want the best candidates then your HR team needs a strategy to ensure your reviews are positive.

CRM

Retailers want to build relationships with their customers, ultimately so they become loyal and buy more. But if you sell one or limited product categories then there’s limited opportunities for engagements.

Clever brands don’t let this stop them.

Jeweller Tiffany introduced the #TiffanyBlue hashtag on Instagram, that encourages anyone posting a picture that includes its duck egg blue brand colour to add the hashtag. It’s since been used nearly 350,000 times, and allows fans of its brand to enter the conversation even when they are not active customers.

 

Social media isn’t simply about being social. It’s a core strategic opportunity for your business and, as such, needs to be taken more seriously.

 

This article was first published by RetailWeek on June 6th, 2017. Read it again here.

The article was also reproduced on LinkedIn on June 6th, 2017. Like and share it here.

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Time to trade in the ‘Great Mall of China’

25th March 2017

Brexit, the fear of a declining domestic market and Amazon’s impending move into Australia are just some of the factors driving China market entry to the top of retailers’ wishlists.

I’ve recently returned from a trip to Hong Kong and mainland China; and as the market there is moving so quickly, I thought it was worth providing a round-up of some up-to-date market statistics.

The dominant Tmall marketplace should still be the first channel for any brand wanting reach and exposure in China, with around 56% of the total market. JD.com (around 22% of the market) should also be considered, along with a direct online offer in China, to reinforce the brand proposition.

Historically, direct to consumer (D2C) has been more of a brand play than a significant revenue driver, but is now a serious opportunity. And WeChat is the game-changer for that. Nearly 72% of all online sales in China are via mobile, says eMarketer.

Margins have been a challenge, as marketplaces have generally been discount driven. However, trustworthiness and customer service are becoming more important.

52% of Chinese consumers say they are loyal to companies with excellent customer support, compared to 44% who are swayed by special promotions, according to recent KPMG research. And the Chinese Government has cracked down on counterfeit products to prop up local market confidence in buying products domestically.

There are several key trading peaks in online. Singles Day is the most well-known, and the single biggest online trading day in China, generating $17.8 billion sales in 2016 (bigger than Brazil’s projected ecommerce sales for the whole of 2016). 82% of the sales were made on a mobile device, and 27% of sales were with international brands.

Double 12 Day is another big ecommerce day, and the Autumn moon festival in mid-September is another important holiday for small gift giving.

Propensity to buy online is higher in China than the West. 49% of Chinese consumers have purchased products online at least two to three times in the past 12 months, compared to 31% in Western Europe and 32% in the US.

In contrast to the West, food and grocery is one of the most popular categories of products purchased online. Women’s apparel, electronics and men’s apparel all also have relatively high online penetration rates.

Chinese consumers are heavily influenced by their peers (and key opinion leaders) with 22.2% buying a product their friend owns, compared to 8.2% in the UK. They are three times more likely to share a review or opinion about an online purchase compared to UK consumers.

Payment barriers are coming down too. Chinese consumers are less concerned about cash on delivery, with only 9.7% preferring this method in 2016 compared to 22.1% in 2015. Credit cards are the top payment method at 78.8%, followed by Alipay at 72.2%. WeChat at 34.6% is the leading mobile payment method.

Despite the challenges, the sheer scale of the market makes it worthwhile to test the opportunity. A client of Practicology sold more than a million pairs of sneakers on Singles Day alone!

And with 70% buying online because they trust global brands more than smaller or local brands, there may never have been a better time for UK retailers to add China to their roadmap.

 

This article was published by RetailWeek on 27th March 2017. Read it again here.

The article has also been reproduced on LinkedIn. Like and share it here.

Videos

Martin interviews Andy Harding – Practicology Conference 2016

13th February 2017
andy harding interviewed by martin newman

Andy Harding, former Chief Customer Officer for House of Fraser, speaks to Martin at the Practicology Conference in 2016.

 

In the video, Andy talks about the experience gained in the role, and offers up some of the lessons he has learned. He and Martin discuss customer-centricity in the retail space, as well as how Andy applied this at House of Fraser.

They also touch on the use of technology within House of Fraser and the development needed to push your brand forward.

 

 

 

About Andy

Andy Harding is currently the CEO of Alamy. In the past he has held key roles with other brands such as Carphone Warehouse, Ryman and BHS. He is also an advisor to Poq and Yext.