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.

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.

 

Netflix’s Global Strategy

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.

Three Big Lessons from Big Data Fails

Big data has many implications for marketers, including better insights into the customer experience and more opportunities for personalization along the sales funnel. But with so much information at our fingertips, there is also greater potential for things to go wrong. Thankfully, missteps by major brands can be lessons for us all. Here are three learnings to consider before using consumer data in your next campaign:

  1. Avoid using data that’s not critical for achieving your objective

Marketers should be mindful of the data they’re collecting and how it will help meet campaign objectives. In other words, don’t collect data just because you can. OfficeMax learned this lesson the hard way after mailing a letter addressed to “Mike Seay, Daughter Killed in Car Crash.” The recipient, an off-and-on customer of OfficeMax, had indeed lost his daughter a year prior to an auto accident. As it turns out, the mailing list came from a third-party provider but the PR disaster that followed placed all eyes on OfficeMax.

  1. Be careful not to extrapolate

Big data can sometimes tell us when wedding bells will be ringing or when a family has moved to a new neighborhood. While these major life changes can create thousands of marketing opportunities, we need to be sure that the conclusions we’re making are not our interpretations of the data. Pinterest made this misstep when it sent emails to some of its users congratulating them on their upcoming nuptials. The problem was that many of the women who received them weren’t actually getting married.

Pinterest jumped to conclusions about users based on the content they were pinning. However, it failed to recognize that many may be pinning for a friend or just dreaming of their big (some)day. Avoid making inferences that can lead you to thinking about your audience too broadly or too narrowly.

  1. Don’t be creepy

Target won the creepiest-brand-of-the-year-award when it figured out a teen girl was pregnant before her father did. As the story goes, an angry father walked into his local Target, accusing the store of encouraging his teenage daughter to get pregnant. His daughter had been receiving coupons for baby clothes and cribs. The manager apologized to the man and followed up a few days later over the phone to say sorry again. However, this time it was the father who was apologizing: “It turns out there’s been some activities in my house I haven’t been completely aware of,” he said. “She’s due in August.”

It’s not surprising that expecting mothers were uncomfortable with Target knowing about their pregnancies. What is surprising, however, is that the women were less likely to use the coupons if they felt they were being “spied on.” Target quickly addressed this by mixing in ads for other goods, so the targeted ads looked random. What can be learned from Target’s stocker-esq behavior? Just because we have information available doesn’t mean our customers are comfortable with it. Be respectful of how you use it. Put simply, don’t be creepy.