Customer Engagement, Loyalty Highs and Lows: The Week That Was

Mar 4, 2013

Last week was filled with many highs and lows in the customer engagement and loyalty universe. But one thing struck me more than anything else: the overwhelming conclusion that for consumers, genuine brand experiences matter more than deals and discounts – much more.

Just tell that to Groupon, the daily deals site struggling to maintain its relevance and profitability. After a tumultuous 4 ½ year run its 32-year-old CEO, Andrew Mason, got the boot. Once valued at $16.5 billion in late 2011, today the company is worth $2.9 billion. Ouch.

There’s also J.C. Penney, a troubled brand Kobie has written about before. CEO Ron Johnson went into damage control mode after the company reported a Q4 loss of $552 million. And about a year after the company riskily dropped its sales promotions campaign and offered low prices every day, J.C. Penney is reversing course.

So, if daily deals alone don’t guarantee customer engagement, what does?

Not surprisingly, it comes back to some human basics: communications, our high for the week. Rhythm NewMedia, a mobile video ad technology company, found that 61% of mobile users surveyed followed brands on Twitter based on natural support. This may not sound like an earth shattering statistic, but it is.

Whether through email, Twitter, push notifications, Facebook, other social media outlets and even traditional letter and post card tactics, consumers want to be spoken with and not talked at. In fact, many prefer such engagement in omnichannel ways: a personal handwritten note followed by a timely and relevant tweet that discusses a product or offer that matches their consumer habits and product preferences. You can learn more about ommichannel marketing approaches applied to loyalty in our infographic and in a great post by Kobie’s Bram Hechtkopf called The New Customer Connection, Omnichannel Loyalty Explained and Applied.

Delivered in real-time, it’s that type of experience-driven engagement that’s likely to continue turning “showrooming,” where consumers research products in-store via mobile only to buy elsewhere, on its head.

Feared throughout much of 2011 and 2012, there are growing signs that showrooming can be turned to brick-and-mortar retailers’ advantage. Data proves the showrooming “showdown” is far more nuanced than originally thought. A study by Ipsos MediaCT and the IAB finds that while 42% of shoppers using mobile in-store purchased a product online, 30% bought in-store too. They also found that 32% of respondents made unplanned purchases in-store versus 22% who did so online. Mobile-equipped shoppers were also found to spend more than non-mobile shoppers, $1,539 versus $929. So, rather than cannibalizing in-store sales, mobile is becoming a purchasing tool that helps both.

Key to ensuring mobile’s use in this beneficial and not bludgeoning manner comes down to a first-rate in-store experience. That means the use of interactive digital signage sending timely and relevant messages to consumers’ mobile devices and augmenting sales floors with engaging videos and promotions. But it also means an attentive and knowledgeable sales staff that manages consumers’ increasingly technological experience rather than being controlled by it. In electronics retailer Best Buy’s case, it’s taken this advice further and instituted some serious brick-and-mortar changes through its Renew Blue campaign, which includes revamped layouts, smaller stores, (read: less imposing) and early customer Geek Squad (tech support) interaction – similar to Apple’s approach. It also helps when you institute an internet price-matching guarantee over the 2012 holidays and make the Low Price Guarantee plan permanent in 2013.

Unlike J.C. Penney and Groupon, though, Best Buy knows price-matching is just one tool in the customer engagement arsenal.

Of course, when you’re worth nearly $3 billion or you’re a brand who’s been in business for over a century, you’re not going away any time soon. But whether you’re a successful brand or struggling one, genuine customer experiences, delivered in omnichannel ways, must be central to your business model.

So how do Groupon, J.C. Penney and others take this lesson to heart? I welcome your feedback on this topic, as well as suggestions on how mobile can continue to be, in the words of IAB Mobile Marketing Center of Excellence VP and GM Anna Bager, the “connective tissue… driving a more integrated shopping experience.”