Merge ahead

More and more, your web presence is the front-door to your brand, not just a sales channel.

More and more, mobile, and all things digital, blur the lines between e-commerce and brick-and-mortar.

More and more, your channel-centric thinking–and organization, metrics, incentives and budgeting–are becoming barriers to meeting the customer where she is.

More and more, your mission, if you choose to accept it, is embrace the world of channel hop and focus on delivering a frictionless customer experience.

Merge ahead.

Or risk being side-swiped.

 

 

Incongruous

Earlier this week I needed to call Apple support to get help with my iCloud account.  I was bounced to three different customer service folks over an hour or so before I finally got to Craig (who ultimately did a great job of handling my issues).

Most of the hour plus that I was on the phone I was on hold and had to listen to loud, tinny and static-filled bad 90′s music (I know that’s redundant).

I was struck by how incongruous this all was.  Apple stands for an easy customer experience, yet they could not manage to come close to being “one and done” in resolving my customer service issue.  Apple is the paragon of innovation, yet their hold music sound quality was an abomination.  Apple stands for hip and cool, yet their music offering was anything but.

Apple is hardly alone in delivering an incongruent brand experience.  As the distinctions blur between channels and touch-points, far too many brands still fail to create a seamlessly integrated experience regardless of how the customer chooses to engage and shop.

In a world of ever-expanding choices–where, increasingly, the consumer holds most of the power–your brand is only as good as your weakest link.

Incongruous may make you superfluous.

Blaming the hole

None of the top 10 retail profit leaders in 1970 remain on the list today, and only half are still around at all.

Leading brands like Best Buy and Barnes & Noble, that just a few years ago were building stores as fast as good sites could be found, are dramatically shrinking their store base and scrambling to re-imagine the customer experience.

Smart phones and tablets, that barely existed 5 years ago, are putting unprecedented power in the hands of consumers and blurring the lines between the physical and digital worlds.

More and more people are finding that what worked for them in the past isn’t getting the job done today. Sometimes painfully so.

That feeling of being a round peg in a square hole isn’t going away. Call it the “New Normal” or whatever you want, but it’s here to stay.

You can scream that this isn’t fair, or you can accept that there is no such thing as fairness. There is simply reality.

You can hang on to the illusion that you can control the way the universe unfolds, or you can get to work on the things that matter than you can actually affect.

You can stop blaming the hole.

Holes are going to change in size and number and complexity. New holes will emerge all the time. And probably at a faster rate than ever imagined.

But let’s be clear. If you find yourself being a round peg in a square hole, it’s the peg that’s the problem.

 

The multi-channel customer is your best customer. Duh.

This is the 3rd straight year that I’ve attended a National Retail Federation “Big Show” session and a senior retail executive takes the stage and proclaims that the multichannel–or “omni-channel” if you want to be trendy–customer spends more than a single channel customer.

In fact, they say–pausing to create a little extra anticipation as they prepare to bestow another morsel of massive insight–the more channels she shops in, the more she spends.

I then scan the crowd and notice dozens, maybe hundreds, of my fellow attendees furiously taking notes. I check the Twitter feed and there is a sudden burst of activity as these pearls of wisdom. Must. Be. Shared.

From where I sit, if you care about such things and this is actually news to you, it only proves on thing. You haven’t been paying attention. At all. Let’s hope the boss doesn’t find out.

The reality is that Sears and JC Penney were reporting that their multi-channel customers outspent single channel customer by 3 or 4X nearly a decade ago.

At Neiman Marcus we reported the same phenomenon in public statements in 2006 and 2007.  Lots of other brands have said essentially the same thing over the last several years. Look it up. I’ll wait.

So now that we know to be skeptical about how NRF selects its speakers–and you’re aware that you need to up your market research game–so what?

First of all, it might be better to state things this way: your best customer is a multi-channel customer. The distinction being that if someone is already a good customer they are more likely to start engaging with you in other forms (web, mobile, social, etc.). Understanding cause and effect, and segmenting your customers by pathway to profitability, is well worth the effort.

Second, stating facts about customer behavior isn’t a strategy. You aren’t going to win in an increasingly omni-channel (see how trendy I am!) world unless you fully embrace customer-centricity, are committed to treating different customers differently AND you have a clear idea of how each channel or touch-point delivers a remarkable customer experience.

So if you are just learning to appreciate the multi-channel customer and are thinking about an omni-channel initiative, I’d get started.

And I’d hurry. It’s later than you think.

 

My Top Ten Blog Posts of 2012

Happy New Year.

And now, as has become my custom, here are my top ten posts of the past year. Enjoy. Comment. Debate. Share.

1.   The world’s best loyalty program.

2.  The end of e-commerce.

3.  JCPenney’s Road to Recovery (Part 2): The intervention.

4.  JCPenney swings for the fences (Part 1).

5.  JCPenney’s Road to Recovery (Part 1): The reality distortion field.

6.  JCPenney’s Road to Recovery (Part 3): The 10 point action plan.

7.  In gut we trust.

8.  Now you’re just somebody that I used to know.

9.  Honey, I shrunk the store.

10. 8 things that are wrong with your omni-channel strategy.

And one of my personal favorites that, in my humble opinion, was mostly overlooked: Knowing what ‘yes’ looks like.

But it did get excerpted in Seth Godin’s new book The Icarus Deception.  So I got that going for me. Which is nice.

The shopper genome project

No doubt you’ve heard of The Human Genome Project–the effort to decode our species by identifying and mapping all of our genes. Ultimately it’s an effort to better understand what makes us tick, from both a functional and physical standpoint.

As a business or brand leader you have a similar challenge when it comes to decoding your current and potential consumers’ attitudes, needs and behaviors.

In a world of vast and growing choices, the pressure is only increasing to develop deep, actionable insight into your customer base.

In a world where most segments are growing slowly, your only chance for out-sized growth is to gain market share. And that requires understanding which levers to pull that are compelling enough to win new clients or grow share of wallet with existing ones.

In a world where most competitors are either engaged in a race to the bottom or stuck in tired old mass marketing techniques, you have the chance to win big by embracing a “treat different customers differently” strategy. But you need to understand how to meaningfully segment your customer base and exactly which value propositions to deliver to which segments. And you need to get into action.

In a world where smart devices are growing like crazy and (finally!) offer the promise of the right offer to the right customer at the right time, you had better be able to follow consumers as they channel hop and to deliver permission-based, highly relevant and personalized communications.

More than a decade ago Don Peppers and Martha Rodgers opined that the only true lasting competitive advantage is to know more about your customers than the competition–and to be willing to act on that insight.

That’s never been more true than right now.

 

Learning to harmonize

Let’s face it, nobody’s likely to be happy to hear you join Mumford & Sons on stage–or Crosby, Stills & Nash if you are old like me–to belt out a few tunes together. But that’s just some incredibly unlikely scenario.

What’s much more real is the need to harmonize in your business.

Your brick and mortar presence, e-commerce business, mobile offering, call center, marketing, and all other branded consumer touch-points, don’t need to be identical, but they need to be harmonious.

Perhaps you’ve experienced a musical performance where someone hits a discordant note. It’s obvious and not very pleasing. If it persists you’re not likely to want to hear more and you’re not likely to want to come back.

Chances are there are quite a few discordant notes in your marketing and your customer experience.

Maybe it’s time to hold a choir practice?

8 things that are wrong with your omni-channel strategy

Read anything about retail, attend a conference, get pitched by a consultant, evaluate a new software product, and chances are you hear “omni-channel” mentioned early and often.

So with geniuses like me throwing the term around ad nauseam, let’s get specific about what is probably wrong with your current strategy and what you need to do to go from meaningless words to remarkable action.

1. Focusing on semantics rather than strategy. I’m often asked what’s the difference between “multi-channel” and “omni-channel” and my answer is typically: “Not much and who cares.” The point is having a strategy that reflects how customers shop today. The point is designing a value proposition that fights and wins in an increasingly blurred channel world. The point is delivering a compelling customer experience day in and day out. Call it whatever the hell you want. It’s what you do that matters.
2. An appalling lack of customer insight. If you are blessed with a killer offering and virtually no competition, go straight to #3. But if you don’t work at Apple or Google, chances are you need an actionable customer segmentation. Chances are you need far better insight around consumer behavior. Chances are you need to be able to differentiate your target customers by needs and value. If you don’t have the data to treat different customers differently, you are at a huge disadvantage.
3. Your mileage may vary. On one side, you have pundits screaming that if you aren’t “omni-channel” today you will be out of business tomorrow. On the other side, there are those that find that sentiment preposterous; just look at Amazon, they don’t have retail stores and they are doing fine. The truth is that every brand’s situation is different. An omni-channel strategy as an abstract concept is useless. An omni-channel strategy that reflects the reality of YOUR consumers, YOUR competition and YOUR current and future capabilities is all that matters. You aren’t Amazon. You aren’t Nordstrom. You aren’t Macy’s. Take what you like from some of the leaders and leave the rest.
4. Screwed up metrics. Ask a retailer about their  “same store sales” and “gross margin rates” and “sales per square foot” and the growth in their brick and mortar stores compared with e-commerce sales and you are inundated with data and commentary. Ask them about growth in key customer segments, segment profitability, traffic conversion or retention rates, cross-channel browsing behavior and the like, and you are probably met with silence or meaningless babble. What gets measured gets done. But if you are focused on the wrong data you are going to do the wrong things.
5. A dumb organization structure with dopey incentives. Most of the time I was at Neiman Marcus our then CEO would get on analyst calls and talk about our “compelling multi-channel strategy.” We included similar words in our annual reports and investor presentations. In reality, we were organized by channel, had no meaningful truly customer-centric efforts and all the top executives had incentives to maximize their own fiefdoms. Silos belong on farms. If are serious about “omni-channel’ you need to set a structure that reflects customers first, and channels and/or products, second. You need to pay your people on those things that truly advance key customer segment growth, engagement, loyalty and advocacy over the long-term.
6. Confusing the vehicle with the destination. Yes, the web can be a sales channel, but for most retailers it is mostly a tool. Having a social media or mobile strategy is critical, but only as a means to your customer growth strategy ends. If you don’t know where you are going, any road will get you there.
7. Failure to ship. The era of months of intensive market planning, controlled testing and the big reveal are over. In case you haven’t noticed, things move a lot faster today, communication channels are increasingly blurred, and customer desires are far less predictable. Trial and error works far better than spectacular planning and flawless execution. Better to ship often and fix it in the mix.
8. Neglecting relevance. Retailers are great at talking to themselves. And passing to where the receiver used to be. And wallowing in me-too-ism. And going big and easy, rather than small and challenging. Treat different customers differently. Make it relevant. Extra points for remarkable.

Honey, I shrunk the store

Until Amazon–and a handful of other pure-play concepts–emerged as power-house brands, a retail growth strategy largely consisted of two major components: build bigger stores and create a bigger retail footprint.

Whether you were Walmart, Office Depot, Coach or Lowe’s, your strategy was mostly about pushing the limits of market dominance: expanding your assortments to cover every related purchase occasion and expanding locations to cover every trade area perceived to be viable.

Then digital happened, and if a large part of your product offering could be delivered without the need of a physical location (think Best Buy, Blockbuster or Borders–and that’s just the “B’s”) this has proved to be a big problem indeed.

And show-rooming happened, and if you were in categories where the consumer likes the research service found in a brick and mortar location, but ultimately buys on price, you were losing a lot of business to direct-to-consumer players not burdened by your overhead structure.

Then there’s the emergence of omni-channel retailing, and if you aren’t making it frictionless for your customer to shop anytime, anywhere, anyway, you were losing share to those who have truly embraced customer-centric retailing.

Last, but not least, the recession happened, and many of the consumers you were counting on–you know, the ones that had become weapons of massive consumption fueled by easy credit–suddenly pulled back big time, and many of the locations you opened in the last five years or so are dead in the water.

So for most, it’s time to shrink.

Fewer, more productive stores. New, smaller formats that resonate more strongly with today’s blended channel realities and that can work in different kinds of trade areas.

But if you think getting smaller is just about physical space, think again.

When you think smaller, think more intimate. Become more personalized, more intensely relevant. Treat different customers differently.

In the future the customer shouldn’t walk away from interacting with your brand thinking that you have down-sized. They should feel that you know them, you get them and that your brand was built with them at the center of all that you do.

We’re all a bunch of hypocrites

If you are anything like me, you sometimes fail to live up to the values and principles you claim to espouse.

When I dispense advice to others that I don’t follow myself, I’m a hypocrite.

When I act in a way that is inconsistent with the ideals I claim to hold dear, I’m a hypocrite.

Every one has the right to believe whatever they wish and to freely express their point of view. But when you rail against gay marriage because you say the Bible is the word of God and that we must practice the “traditional values” it proscribes, and then conveniently ignore lots of other things the Bible clearly insists you must either do or avoid, you are a hypocrite.

If you are Senate Majority Leader Harry Reid and you call out Representative Bachmann for spinning a connection between Huma Abedin and the Muslim Brotherhood without presenting a shred of evidence, and then turn around barely a week later and suggest Mitt Romney hasn’t paid taxes in 10 years without providing any support whatsoever, you are a hypocrite.

Maybe you are one of those Hollywood types who commutes to an environmental event in a gas guzzling limo or private jet. Maybe you run a company that peppers your speeches and press releases with “customer-centric” this and “omni-channel” that, yet is still organized by–and pays your team based upon–channel or product centric metrics. Maybe you post your opposition to abusive child labor practices using your Iphone while wearing Nike athletic shoes.

As human beings we are perfectly imperfect. It’s not always easy to practice what we preach. Mistakes will be made regardless of how hard we try.

But here’s the rub. If what you want is for us to join your tribe, to follow your lead, to be part of your movement, then you must do your homework, you must demonstrate–as Scott Beck suggests–a commitment to reality at any cost.

We’ll give you a pass when you demonstrate your humanness. We’re all hypocrites at some point.

But when we start to question your motivations and your capacity to integrate your words into action, then we stop listening.

At that point you aren’t just a hypocrite. You become irrelevant.