Category — CRM

One brand’s innovation is another’s price-of-entry. By Spencer L. Hapoineu. Have you noticed that when you take Steve Jobs out of the equation there isn’t all that much innovation going on? Or is it just that our definition of innovation is the problem, and we’re seeing innovation disguised as other things? For example, would you say that creating a truly great hamburger is an innovation? Isn’t it all in the definition of “truly great?”

About 20 years ago, a chef named Henry Meer and a butcher’s son named Pat LaFrieda decided to create what they thought would be a truly great hamburger. Chef Meer was opening his now-successful City Hall restaurant in Lower Manhattan, and Mr. LaFrieda was taking over his father’s struggling meat supply business. Together, they combined short-rib, chuck, and brisket in a secret mixture that delivers a truly great hamburger every time. Now, this helped establish Mr. Meer’s restaurant while also reviving the LaFrieda’s meat business … read >>

Technology is no substitute for shopper-focused collaboration. By Spencer L. Hapoienu. How often do you get an offer that is truly relevant to you? What percentage of the offers that you receive online or in the mail are actually of interest? Of the billions of dollars spent by manufacturers and retailers on marketing, it’s likely that less than five percent of the money spent is actually customer-specific and relevant.

With all of the technology and data horsepower available to track purchases, behavior, and lifestyles — which makes it so much easier than ever before to know which customers fall into which categories and to market to them with specific offers and creative messaging — retailer-manufacturer partnership marketing is still way down on the list of priorities and way down on the percent of dollars invested … read>>

Less can be more when it comes to creating meaningful brand distinctions. By Spencer L. Hapoienu. Youngme Moon has written a remarkable book called Different: Escaping The Competitive Herd.

Of course, that’s a broad generalization, but one that she aptly demonstrates to be true. At the same time, it provides Moon with a platform to showcase what she calls “reverse brands” … read >>

"Since information helps markets work better, the cost of privacy is less efficient markets," writes Paul H. Rubin in the Wall Street Journal (8/30/10). That’s the first of Paul’s ten rebuttals to what he sees as "fallacies" about privacy. His point is that, contrary to what some may believe, our privacy is not free, given "a strong trade-off between privacy and information." Paul also says that the costs of privacy are not "borne by companies" because "consumers get tremendous benefits from the use of information."

He notes, for example, that Google’s various free services are "all ultimately funded by targeted advertising based on the use of information." Naturally, Paul also forwards the most common anti-privacy argument — that when ads are targeted, consumers "get better and more useful information more quickly." He further contends that the quality of those services would decline if Google didn’t have the information required to "better target searches," for example. "Shorter retained search histories mean less effective targeting, " he writes.

Refuting the argument that privacy invades our personal space, Paul points out that most information is used anonymously. He says that information-based price discrimination "makes it possible for firms to provide goods and services that would otherwise not be available, "and that less privacy creates greater safety, since information is used to combat identity theft." Opt-in doesn’t benefit consumers, says Paul, "since the use of information is generally benign and valuable." And he says consumers should not be irate over how their information is used, "because there is no harm from the way it is used."

"I understand that advertising supports the internet, but I am a little spooked out," says Senator Claire McCaskill in a New York Times piece by Miguel Helft and Tanzina Vega (8/30/10). She adds: "This is creepy." The senator is among several lawmakers considering regulations on "remarketing," or the practice of tracking consumer behavior online to serve up targeted ads. Zappos is among the most enthusiastic proponents of the practice, but it appears that some backlash may be brewing.

If you’ve ever shopped at Zappos, you may have noticed that items you viewed but didn’t purchase show up in ads on sites — YouTube, Facebook or MySpace — that you subsequently visit. "It’s a pretty clever marketing tool," says Julie Matlin, who found herself being followed around by a pair of shoes she had viewed on Zappos. "But it’s a little creepy, especially if you don’t know what’s going on." Julie was even more chagrined when she found out she was being followed by ads for a dieting service.

Aaron Magness of Zappos says that’s why each ad has a link to an explanation for it along with an opt-out option (which few apparently take advantage of). However, Joseph Turow of the Annenberg School says that simply telling people what’s going on isn’t enough. "When you begin to give people a sense of how this is happening, they don’t like it," he says. And Alan Pearlstein of Cross Pixel Media, suggests it’s overkill and thinks the approach could be more subtle by featuring general coupons versus specific items, for example. "What is the benefit of freaking customers out?" he says.

"We are looking at different ways that customers can provide us value for the value we provide," says Bank of America spokesperson Robert Stickler in a Wall Street Journal piece by Dan Fitzpatrick (7/16/10). "That can be the way they interact with us," he continues, "how much business they bring us, and if all else fails it can be a monthly fee." That’s the strategy at Bank of America, which has "some sort of banking relationship with half of all US households," once "the expected new era of regulatory restrictions" takes effect.

It’s a strategy involving the "retraining employees in its 6,000 branches" and it is captured in a single word, "Guest." It’s actually an acronym: "G is for ‘genuine welcome,’ U means ‘undivided attention,’ E is for ‘empowered,’ S stands for ‘solutions’ and T is for ‘thank you.’" But its effect, apparently, is to invite customers to stop talking to tellers and use the ATM machines outside instead because it’s cheaper, for the bank. Soon, it will be cheaper for its 55 million customers, too.

Bank of America is introducing a new type of account where if you agree to bank only online and by ATM, your account is free. But if you still want to talk to a teller and receive paper statements, it’s $8.95 a month. The bank is doing this, in part, because the new banking regulations outlaw overdraft fees, which will eliminate $2.2 billion of its revenues. In fact, as of last year, "fees and service charges generated $6.8 billion, or nearly half the revenue in the bank’s deposit business." Next window please.

Retailers need more than fun-and-cool stores to win shopper favor. By Spencer L. Hapoienu. (more)

"The U.S. system with regard to privacy is not working," says Marc Rotenberg in a New York Times article by Natasha Singer (5/2/10). Marc is president of the Electronic Privacy Information Center, and his point is that, unlike financial data, American consumers have no way of gaining access to their shopping data. The situation is different in the U.K., where shoppers can take "advantage of a data protection law … that requires public agencies and private businesses to release a person’s data file upon his or her written request."

David Bond, a London-based filmmaker made such a request and received "a phonebook-thick printout from Amazon.com listing everything he ever bought on the site; the addresses of every person to whom he had ever sent a gift; and even the products he perused but did not ultimately buy. He also received a file from his bank, including a transcript of an irate phone call he once made after the bank lost one of his checks. The transcript noted that he seemed angry and raised his voice."

David points out that when consumers are taped "for training and quality assurance purposes," the recordings could end up in their files. In today’s "post-privacy society" we not only "have lost track of how many entities are tracking us" but also "what they are doing with our personal information, how they are storing it, whom they might be selling our dossiers to and, yes, how much money they are making from them." Perhaps some hope ahead: The F.TC. plans to introduce "comprehensive new privacy guidelines intended to provide greater tools for transparency and better consumer control of information" this fall.

What comes after the circular?  Retailers pinpoint better ideas. By Spencer Hapoienu. (more)

"The 19th-century satirist Ambrose Bierce defined fidelity as ‘a virtue peculiar to those who are about to be betrayed,’" writes Joanne Kaufman in the Wall Street Journal (2/19/10). This came to mind, for Joanne, when her son came home from a trip to Duane Reed and reported that her loyalty card was no longer valid. It seems the retailer was in a blackout period pending regulatory approval of its acquisition by Walgreens. But when the new program was introduced, the terms had changed.

It used to be you’d get a five dollar coupon for every $100 spent; now she has to spend $250 for the five-dollar gift. Unfortunately, this wasn’t an isolated incident. Joanne had also paid $25 for a Starbucks card offering two free lattes (one for signing on and the other on her birthday), plus ten percent off every drink. This was working out great until Joanne’s daughter came home with news that Starbucks had replaced the program "with a tiered system of rewards involving stars."

Under the new plan, Joanne gets a star with each transaction, and a free drink for every 15 stars. It doesn’t matter if each transaction includes several drinks. A company spokesperson told her, "We wanted a program that was more inclusive. And the new card is free." Except it really isn’t because it only works if you load the loyalty card with cash. As Joanne notes, "Just think of those stars as the chain’s way of thanking caffeinistas for what amounts to an interest-free loan," adding, "You’re welcome and you’ll find me at Dunkin’ Donuts."