Big Data and Customer Loyalty

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Big data isn’t just for acquisition, it also plays an important role in building loyalty among existing customers. Some may even argue that the key to achieving the ultimate customer experience lies in advanced analytics. However, according to Forrester, 81% of firms have immature customer experience management programs.

It’s no surprise this is the case when we consider how vast data collection has become and how complex it can be to interpret and communicate across various departments. One way Marriott is addressing this is through the newly created role of Chief Customer Experience Officer (CXO). Marriott’s CXO is responsible for coordinating the customer experience across the sales, marketing, brand and IT teams. The position helps ensure that the company is looking at the customer holistically and provides a consistent experience across the website, mobile application and physical presence on property.

Another major player in the hospitality industry, Wyndham, has relied heavily on data to build and refine its loyalty program. According to Noah Brodsky, senior vice president, worldwide loyalty and engagement at Wyndham Hotel Group, the loyalty program is the brand’s competitive advantage. Brodsky added that it’s extremely important to always be able to answer the question: “What are our customers asking for?” Through a cycle of customer research and testing, Wyndham gets closer and closer to the answer.

It’s important that marketers don’t view big data and the customer experience as a one and done project. Building loyalty requires constant evaluation, research and insight into customer data.

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Tools for Market Research

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According to S. Tamer Cavusgil, “Managers need objective information and insights in order to make the best decisions for superior performance in international business.” You should strive to make data-driven decisions as much as possible. In conducting market research, you should aim to achieve the “Knowledge Pyramid.” The pyramid consists of data, information and intelligence, and knowledge and insights.

  • Data refer to raw facts, figures, and observations that have not been organized or arranged.
  • Information and intelligence refer to facts, figures, and observations that have been organized or arranged around a specific theme.
  • Knowledge and insights refer to information and intelligence that have been processed, analyzed, and interpreted, and can lead to action

There are several tools available to help companies achieve the Knowledge Pyramid. Below is a list of some good tools.

  1. Geert-Hofstede.com (Free)
    1. Description: National Culture is about the value differences between groups of nations and/or region. Using research data from a multinational company (IBM) with subsidiaries in more than 60 countries, Geert Hofstede identified four largely independent dimensions: Power Distance (large versus small), Uncertainty Avoidance (strong versus weak), Individualism versus Collectivism and Masculinity versus Femininity. The relative positions of 40 countries on these four dimensions were expressed in a score on a 0-100 point scale
    2. Example: At a score of 20 on the Individualism dimension, China is a highly collectivist culture where people act in the interests of the group and not necessarily of themselves. This might be helpful during your negotiations with Chinese business associates.

This is a great tool when you’re trying to assess national culture values and how you might tailor your marketing strategies to be successful in a new market or how you might approach foreign business associates.

  1. export.gov (Free)
    1. Description: An introduction on where to find current sources for market research. This information is part of “A Basic Guide to Exporting” provided by the U.S. Commercial Service to assist companies in exporting
    2. Example: If you’re thinking of exporting products to Australia, you can use the Country Commercial Guide on the site, which will provide you with information such as: market challenges/opportunities, entry strategies, political and economic environment, trade regulations, etc.
  2. countrywatch.com (Paid)
    1. Description: Provides detailed information about a county, including: political environment, social environment, economic environment, investment overview, etc.
  3. Euromonitor.com (Paid)
    1. Description: Provides detailed information industries, economies, consumers, and companies.

This database is comprehensive; however, it can be very costly to access certain reports.

 

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Share a Coke Campaign: An International Success

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Coca-Cola recently announced that its “Share a Coke” campaign will return this summer with some exciting new additions. The campaign will now be called “Share An Ice Cold Coke” and will extend across five products, including Coca-Cola Life. The soft drink giant will also be taking personalization one step further by introducing last names on bottles in the U.S. Consumers can expect to see surnames in stores this May.

Share a Coke” originally debuted in Australia in 2011 as a way for the brand to connect with young adults. Let’s take a look at how global marketing intelligence was at the core of this campaign.

Know Your Audience

Coke needed a way to connect with a younger audience. “Our research showed that while teens and young adults loved that Coca-Cola was big and iconic, many felt we were not talking to them at eye level.” said Lucie Austin, director of marketing for Coca-Cola South Pacific. By putting first names on the bottles, Coke believed they could reach Australian teens and millennials in a direct and meaningful way.

Get Personal

Coke started with the most popular 150 names in Australia, though it represented less than half of the population. While this initial research enabled them to effectively launch the campaign, Coke knew continued success would require evolution. As part of the second release of names, Coke invited consumers to drive the selection by allowing them to vote. From the beginning, Coke designed the campaign to be about the people and adapted it overtime according to their feedback.

Meet Them Where They Are

Coke had identified its target market and found a way to connect with them using personalization, but for any campaign to be a success, it needs to be where the audience is. For Coke’s target audience, this meant social media. Coke incorporated a digital experience that allowed people to send a “virtual Coke” via Facebook. By the summer of 2015, the #ShareaCoke hashtag garnered more than 500,000 photos and digital Coke bottles had been shared more than 6 million times. Coke also added 25 million fans on Facebook. By leveraging insight about where their target segments engaged, Coke was able to communicate with them via their mode of choice.

By the end of the summer of 2011, Coke had sold more than 250 million sodas as a result of the campaign. “Share a Coke” has since become an international success, launching in more than 70 countries. By leveraging the right research and market intelligence, Coke was able to execute one of the brand’s most memorable campaigns to date.

 

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Netflix’s Global Strategy

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When a firm opts to expand globally, it must first identify a strategy for creating value within these new markets. Companies can choose to adapt current products and services to better suit local markets or standardize offerings across the global market. International market segmentation can help firms determine the extent to which products and positioning need to be standardized or adapted.

After launching in a few international markets at first, Netflix made the announcement in January 2016 that its services would be available in nearly 200 countries around the world. While the company had previously aimed to cater offerings to local audiences, the major international expansion would be universal. In other words, Netflix planned to offer the same content to viewers around the world. At the time of the launch, Bloomberg called it, “a bold move based on two very optimistic assumptions: that Netflix can re-order the way media companies dole out rights to their television shows and movies, and that its algorithms are more powerful than the cultural differences between humans living in different countries.”

Localization vs. Standardization
Netflix opted to disaggregate market segments and leverage original programs with global appeal. In its Q1 letter to shareholders, the company shared that it is focusing on comedy as well as celebrities with strong international presence. This is starkly different from competitor Amazon’s approach, which is significantly more localized.

Critics argued that language barriers and limited local content would present “stumbling blocks” for Netflix. However, the streaming service added 5 million global members in the first quarter of 2017, and the firm recently crossed the 100 million subscriber mark worldwide.

Striking a Balance
While Netflix aims to create a universal service, it also recognizes that some localization is crucial for satisfying customers. To address this, Netflix is “developing a growing number of non-English language originals from places such as Mexico, France, Italy, Japan and Brazil. With global distribution, Netflix is well positioned to bring engaging stories from many cultures to people all across the globe.”

Will Netflix’s standardized approach ultimately beat Amazon’s localized focus lead to competitive advantage in the global market? We’ll have to stay tuned to find out.

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Amazon, E-Commerce Tech Giant Inching Along in China?

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It’s no secret that China is a coveted market for businesses looking to grow their business. It’s the second largest consumer economy in the world, primed to surpass the U.S. in a few years. Amazon has been wildly successful in the U.S., with 43% market share, but they’ve been “inching along in China, trying to figure out a combination of offerings that will allow it to gain a bigger piece of the market.” It’s no easy feat, considering they’re going up against the native market leader, Alibaba. To make matters more difficult, Amazon also faces strict government regulations and restrictions on foreign companies.

On a side note, Alibaba has taken full advantage of this challenge by offering to partner in joint ventures with foreign companies trying to break into the Chinese market.

Amazon has entered several foreign markets (Canada, China, Europe, etc) and they still haven’t found the “secret sauce” of success like they have in the U.S. Further, they’ve been slow to grow their Prime business internationally as well as it has grown in the U.S. The program consists of 80 million customers world-wide; however, 75% of these members are from the U.S. The remaining ~25% include Canada, India, Japan, U.K., and Germany.

According to Ovide and Abboud, Prime is essential to Jeff Bezos’s mission of making Amazon the sun of the consumer spending universe and analysts estimate the roughly 70 million Prime members spend at least twice as much as the typical Amazon shopper and more of their total spending on the site. Amazon began offering Prime membership in China in 2016, yet they haven’t realized the growth they desire.

As a result, they’ve resorted to launching a store on Alibaba’s Tmall site and a localized storefront with over “30 product categories, including those that appeal to Chinese consumers like apparel, shoes, baby, toys, home, kitchen and beauty.” Russ Grandinetti, Senior Vice President of Amazon, stated that “launching a unique program designed for our Chinese customers shows our obsession with Chinese customer needs, and demonstrates our long-term commitment to growing our business in China and we will continue to innovate for customers in China to deliver more value over time.” Amazon’s strategy is to enter the market at multiple angles. This seems like a good strategy to generate awareness in the minds of consumers, but is it enough to go up against Alibaba? Perhaps, Amazon could integrate with the WeChat app to streamline their benefits?

https://techcrunch.com/2016/10/28/amazon-prime-launches-in-china/

http://www.businessinsider.com/amazon-prime-subscribers-hit-80-million-2017-4

http://www.retaildive.com/news/amazon-delivers-cheaper-limited-version-of-prime-to-china/429331/

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