|
Friday, February 5, 2010
Tropicana Juicy Rewards – Really delivering VALUE?
Tropicana just rolled out a new marketing effort called Juicy Rewards.
Company representatives characterize it as the largest marketing investment for its orange juice brand.
It’s a points based program that promises to reward purchase behavior. The program strategy
is reportedly driven by a survey in which “98 percent of participants said they wanted
more value from the products and services that they buy”. Tropicana further states that the
program is “about engaging with them (customers) and building a relationship”.
I
could only shudder as I read the announcement. There are a lot of smart people over at Pepsi and I can’t
believe that someone hasn’t pointed out to the managers at Tropicana that customers are always in search of more value
(in fact you have to wonder if the 2% who didn’t report that they wanted more value actually read the question before
responding). After all, as consumers we are always seeking “value” in one form or another.
If we aren’t getting some form of rational or emotional value in return, why in the world would we be willing
to part with our hard earned dollars?
Perhaps
the real question comes down to understanding value. We encourage clients to think of value in the form
of an equation. The numerator including the entire product and service experience delivered by the brand,
and the denominator being everything you give up to acquire the product or service. In order to provide
more value and thereby increase purchase behavior the company can either add to the numerator or reduce the denominator.
Sounds simple. It’s not. The “experience” in Tropicana’s
case includes the look of the orange juice, the smell of the orange juice, the taste, the look of the packaging, the feel
of the packaging, the memories that are stirred by the packaging, the feelings created through advertising, the freshness
of the product, the availability of the product, experiences with Tropicana customer service at headquarters, and more.
The denominator surely does include price, but for a product like Tropicana orange juice it could
also include any special effort required of the customer in finding a convenient location to buy the brand, any negative reactions
they would encounter from their family upon changing brands, and any risk that might feel personally in switching brands. When you consider all that you might wonder what, as the market leader, Tropicana is hoping to gain from a points
program. How valuable are those points really going to be? Exactly what behavior is this program attempting
to drive? Considering that the company admits that it doesn’t expect current customers to buy any
more orange juice as a result of the program, why are they making the investment (remember they’ve characterized it
as the largest marketing investment ever for the brand)? Do they expect that the customers of their competitors
will make a switch to Tropicana (perhaps even pay a higher price) to be part of Juicy Rewards? (Based on
what has been announced to date it sounds like rewards will come in the form of discount coupons to be used for active lifestyle
goods and services.) One final thought. I always challenge the creators of points
programs like this to prove that they have delivered a reasonable ROI. In most cases we hear about how
much product participants in the program buy. But weren’t those largely loyal customers purchasing
even before the points program? Did the points program really provide incremental sales? New
customers? How do those incremental sales compare to the dollars (and time) spent to fund the points program?
I seldom get answers to those questions. It’s
difficult for me to envision a scenario in which Juicy Rewards will truly build “relationships” with customers.
It’s even more difficult to believe that it will produce an acceptable ROI.
9:49 am est
Wednesday, January 20, 2010
They Should Have Known - Even Without Twitter
It’s
great that GM has recognized the power of social media and invited David Meerman Scott to Detroit for an inside look a few
months ago. We all appreciate that American Airlines is learning and posting information about delays on the website and distributing
information via Twitter. Hopefully what corporations are hearing will lead to not only a better image, but also better service.
But negative word of mouth should have been a concern long before we had Tweets, blogs, and YouTube videos.
We’ve known for years that an unhappy customer tell 8-11 other people or more about their experience while happy
customer tells only 3-4 (if they bother to tell anyone). All the electronic media that is now part of all
our lives has simply amplified the voices of those unhappy customers while all the attention paid to social media has given
them greater visibility. Even as corporations tune in and respond to what is being written online, for every
prominent blogger reaching a thousand followers, there are likely 100 regular customers reaching out through text messages,
emails, phone calls, and even face-to-face conversations to share their experiences with 8-10 friends, co-workers, relatives,
and neighbors. When you do the math, the impact is the same.
Attention is needed is needed both online and offline if corporations are going to succeed in shifting the
balance between the negative communications that poisons the well for new customers, and the positive word of mouth that builds
awareness, consideration, trial, purchase and retention.
10:22 am est
Thursday, January 7, 2010
High Service Levels – Always the Best Answer?
In
its recently released "2009 Customer Experience Consumer Study", Strativity reports that “unhappy customers
are 10 times more likely to cease doing business with companies within the next 12 months than loyal ones” and that
“happy customers are three times as likely to continue doing business with a company for 10 years.”
While I personally question any piece of marketing research that asks consumers to envision what they will be doing
in 10 years, the basic tone of their findings is not surprising. But what makes a customer “happy”?
Based upon their survey data Strativity explains that: "Customers are seeking value -- it can come either from a great
experience at a fair price or a discount if they're not getting that experience”. Again we
have no disagreement with that position. Where we do differ is with their conclusion.
We agree that companies must choose how they want to play the Value Equation, but according to Strativity, "Smart
companies are getting it -- they realize that the experience must be exceptional." That sounds great,
but it contradicts the earlier discussion of VALUE. The fact is that different things are more or less IMPORTANT to different
individuals. It assumes that there aren’t consumers who are in fact most “happy” when
they buy at a low price (even when that means low service). Further their conclusion ignores the fact that
we all simply can’t afford to have the very best total customer experience with each and every product and service we
buy.
We are talking about business strategy here, and in virtually every category there is
likely a place for some brand to succeed at high price/high service, while another is equally profitable as a low price/low
service option (with most others in between the extremes). The issues for corporate managers is in understanding
the competition and finding the appropriate VALUE position space in which they can run a profitable business for the long
term or for the short term.
Our work at Customer Experience Partners is about helping clients manage the customer
experience to achieve greater retention and more positive word of mouth. It isn’t well matched for those taking the
low price/low service position, however that does not at all mean that low price/low service is not a valid business strategy
for some brands.
10:10 am est
Monday, November 30, 2009
Look Beyond The Headline - Or Take Your Chances
Having conducted
a study earlier this year for a prominent orthodontist, in which we found close to 75% of parents communicating their feelings
and opinions about the doctor and the category, but doing it off line, I was initially surprised by the findings from MomConnection,
The Parenting Group's research panel of 5,000 moms. According to their research, “60% of moms report
having used a social network in the past 24 hours, and turning to online communities and social networks
for advice, support and connection.” We are told that over 80% are members of Facebook and other
social networks. Facebook Is Moms'
Social Network Of Choice | Social Network | % of Moms Who Are Members | Facebook | 81% | Classmates.com | 39% | Myspace | 38% | YouTube
| 36% | CafeMom
| 31% | Twitter
| 23% | LinkedIn | 21% | Source: MomConnection,
November 2009 |
That’s the part of the
research that made the headlines.
For those who took the time to read a bit deeper
into the report we learn however that moms do not use social networks as a resource when it comes to product decision-making.
Moms are four times more likely to turn to their personal offline network of friends and family than online social networks
for product recommendations and buying advice.
The study found that the role of social networks
in moms' lives is not a channel where most moms are receptive to gathering product information, but rather is largely for
entertainment and personal communication. Only 24% of respondents have used Facebook for product
information and buying advice, while 5% have used Myspace for product info, and 3% have used
Twitter. In other words telephone calls and face-to-face communications
aren’t the only way to deliver information and recommendations any longer, but they still do matter most when making
those important decisions about home and family.
Wednesday, October 28, 2009
Should You Wine and Dine Your Badvocates?
Forbes.com recently ran a story about some of corporate America's big
players and their attempts to address the negative word of mouth being launched online by "BADVOCATES".
It's great that GM is recognizing the power of social media and inviting David Meerman Scott to Detroit for an inside look.
We all welcome that American Airlines is learning and posting information about delays on the website and distributing information
via Twitter. Hopefully what corporations are hearing online will lead to not only a better image, but also better service.
But negative word of mouth should have been a concern long before we had Tweets, blogs, and YouTube videos. We've
known for years that an unhappy customer tell 8-11 other people or more about their experience while happy customer tells
only 3-4 (if they bother to tell anyone). All the electronic media that is now part of all our lives has simply amplified
the voices of those unhappy customers while all the attention paid to social media has given them greater visibility.
Even as corporations tune in and respond to what is being written online, for every prominent blogger reaching a thousand
followers, there are likely 100 regular customers reaching out through text messages, emails, phone calls, and even face-to-face
conversations to share their experiences with 8-10 friends, co-workers, relatives, and neighbors. When you do the math, the
impact is the same.
Attention is needed is needed both online and offline if corporations are going to succeed
in shifting the balance between the negative communications that poisons the well for new customers, and the positive word
of mouth that builds awareness, consideration, trial, purchase and retention.
12:30 pm edt
|
