Michael’s Stores Links CX And Marketing

Last month I met Paula Puleo, CMO of Michael’s Stores, at a SAS event in Orlando. She gave a presentation that I really enjoyed, describing activities at the arts and crafts retailer that blends marketing with customer experience.

The importance of customer experience comes out loud and clear in what Puleo presented as the three elements of Michael’s corporate mission:

  • Inspires and enables consumers to experience creativity
  • Leads industry growth and innovation
  • Creates a fun and rewarding place to work that fosters meaningful connections with our communities

I was really impressed with Puleo’s presentation, so I caught up with her after the event. In her presentation, Puleo listed her six marketing priorities. Here are some of the additional details that she provided for each of them:

  • Live The Brand: Puleo talked about trying to foster connections with customers and associates. The company runs events like craft cruises and craft days at baseball stadiums (they’ve had them at Arizona Diamondbacks and Texas Rangers games and expect to expand to other sporting venues). Puleo also pointed to Michael’s participation in the Festival of the Masters at the Walt Disney World. The goal is to bring crafts to venues that are more family oriented. She said that these activities bring a level of inspiration to all of their messages.
  • Real Time/Face Time = The New Prime Time. Puleo talked about having a dialogue with customers. Michael’s uses a dedicated Social media team to keep Twitter and Facebook alive. Each store has dedicated customer experience managers that aren’t focused on other store operations. Puleo says that these employees make the environment happy, friendly, and fresh and she called them “our people-people.”
  • Make the private brand not so private. Michael’s has a large private brand business, which provides strong financial benefits. Rather than positioning these store brands as boring alternatives, Michael’s wants to celebrate them and make them a strong value proposition. So the company introduced its product designers to customers. Influential bloggers, for instance, are periodically invited to spend the day with product designers. Connecting customers and influential crafts bloggers with product designers make the private brands come to life and creates what Puleo called a “playground for customer co-creation.”
  • Compete in the trenches. Puleo said that they need to compete at a local level. So corporate marketing helps the stores understand who their customers are and any local competitive threats.The company is investing in deeper data insights to better understand customers and provide the stores with even more insights. The corporate marketing team also creates experiential events and demos that can be used in the stores.
  • Remove the angst. Puleo talked about finding what’s in the belly of your customers. if you remove that angst then you will eventually sell them something. She understands that shoppers are anxious about spending, so they lead with value. She also recognizes that Michaels customers have angst about having quality family time. That’s why Michael’s came up with the idea for The Knack, which is a site with simple ideas for family crafts projects.
  • What works. Puleo discusses the importance of measurement and having good KPIs in place. She works closely with her finance partners to understand what’s working and what’s not, to measure the ROI of the marketing spend.

Puleo also discussed Michael’s loyalty program.They’ve just started offering experiential benefits for Gold customers (that spend $250+ per year). In about 275 of its stores, Michael’s invites its top customers to events with stores designers and celebrities in the crafts world. In St. Louis they had an event with The Crochet Dude and in Dallas they had a contest where customers pitched their projects to Puleo, Michael’s chief designer Joe Pearson, and “rock stars” like the Double Stitch Twins. Puleo says that “access” is the currency that they try to give to good clients; it’s all about surprise and delight.

I asked Puleo about what’s next. She recognizes that many of their customers come to a Michael’s store because they have to come – to get materials for a kids project or to buy a widget. She wants to inspire customers into coming into the stores because they want to. Her goal is to get everyone, even non-customers, to realize that they have some talent and creativity and have them think about coming to Michael’s to express it.

The bottom line: Michael’s sells products, but it markets the love of arts & crafts

Your Company Does Not Own Its Brand

I’ve been discussing brands a lot with my clients lately. Without a strong brand to guide them, customer experience efforts can wander aimlessly. That’s why “compelling brand values” is one of the four customer experience core competencies.

As I’ve said before, a true brand is:

The fabric that aligns all employees with customers in the pursuit of a common cause

There’s a very important implication of my definition: Companies don’t own their brands. Let me say that in another way: You don’t own your own brand.

True brands are an asset that are jointly owned by organizations and their customers… and it’s a fragile relationship. Even if your brand represents something today, there’s no guarantee that it will continue to be perceived in the same way or have the same impact in the future.

So how do you build true brands? With promises. Brand building is based on three ingredients…

  1. Making promises. Companies need to be explicit about the purpose of their organization which translates into promises that they make to customers.
  2. Embracing promises. It’s nearly impossible to keep a promise that you don’t know about, so everyone in an organization needs to understand the customer promises.
  3. Keeping promises. Companies need to make sure that they live up to their promises during every interaction in every channel.

The bottom line: Make, embrace, and keep your promises

XFINITY Is (Unfortunately) More Of The Same

After seeing multiple Comcast ads about it’s seemingly new super-duper offering, I was left with a nagging question: What exactly is XFINITY?

So on a recent trip to a Comcast office to replace a modem, I asked the Comcast employee behind the counter my question: What exactly is XFINITY? After about 30 seconds of her saying seemingly random things about platforms and content that I couldn’t understand, she finally said that it was just a new name for the products that we already use from Comcast.

I went to the website to verify that finding. After sorting my way through flashy graphics that disrupt the usability, I found a definition for XFINITY — and it sure sounds like just a new name for some additional features to the existing Comcast products.

My take: What a lost opportunity.

It would have been great if XFINITY was a new offering with a redesigned service model. Why? Because Comcast can definitely use a customer experience makeover. In Forrester’s 2010 Customer Experience Ranking of 133 companies, Comcast came in 126th for it’s Internet business and 125th for its TV service. It also came in 105th/109th out of 114 companies in the 2008 rankings and 95th/101st out of 112 firms in the 2007 rankings.

Repositioning a company or brand is a great opportunity for improving your entire operations. I’ve discussed how Alaska Airlines engaged its employees with its North of Expected campaign, Ford engaged its employees with its Drive One campaign, Staples redesigned customer interactions as part of its That Was Easy campaign, and JetBlue embedded its value across touchpoints in its Happy Jetting campaign.

But Comcast chose a different path with XFINITY; resembling marketing campaigns that I’ve chided in the past from JP Morgan ChaseCircuit City, and John Hancock for being empty promises:

Probability Of Success For Branding Efforts

Positioning And Scope Of Effort

The bottom line: Comcast needs more than just XFINITY ads

My Marketing/Branding Favs Over 2 Years

In a continuation of the look back at my first two years of blogging, today I’m listing some of my…

Favorite Marketing/Branding Posts

From my perspective, brands aren’t color palettes or logos. They’re not tag lines or advertising campaigns. They’re an organization’s raison d’être. Here’s how I describe branding:

True brands are more than just marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause.

The bottom line: Most organizations need to re-establish their raison d’être.

CMOs: Start Building (Real) Loyalty

As I’ve mentioned before, brands are dying. While there are some exceptions (Zappos, Apple, Southwest Airlines, etc.), firms just aren’t developing strong brands. Why does it matter? Because weak brands can’t build strong loyalty.

People often say that prices are being driven down by customers empowered with information. But I don’t really buy it. Price competition is being driven by the lack of strong brands. Here’s what I said about brands in an earlier post:

True brands are more than just marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause.

I just completed an analysis of what consumers want from different companies in 12 different industries. It turns out that good customer services was preferred more frequently than low prices across every industry.

But my research isn’t the only source of insight about the importance of strong brands. Here are a few recent studies that I’ve read…

1. Emotional Advertising Lowers Price Sensitivity

In a new book called “Brand Immortality,” Hamish Pringle, Director General of The Institute of Practitioners in Advertising, shows that emotional advertising is much more powerful than rational, hard-selling ads. Here’s an excerpt:

What the data show us is that emotional campaigns are almost twice as likely to generate large profit gains than rational ones…  It turns out that emotional campaigns… excel in one noteworthy area: reducing price sensitivity, and hence strengthening the ability of brands to secure a premium in the marketplace.

2. Advertising Price Is Not Very Effective

In a recent post called Time Is More Valuable Than Money, I discussed research that shows how advertising that mentions time drives more sales than ads that mention price. Here’s some of the research from Stanford:

Because a person’s experience with a product tends to foster feelings of personal connection with it, referring to time typically leads to more favorable attitudes-and to more purchases

3. Loyalty Programs Must Build Attitudinal Loyalty

An article in AdAge called Redesigning Loyalty Programs to Last Beyond the Next Purchase discusses the difference between behavioral loyalty (temporary) and attitudinal loyalty (which is lasting). According to the authors:

Behavioral loyalty might be described as consumers doing what you want them to do, while attitudinal loyalty involves consumers believing what you want them to… As a result, loyalty programs that provide only economic benefits may be appropriate in some instances but may actually conflict with brand-building efforts that ultimately attempt to create attitudinal loyalty.

The bottom line: Don’t let your brand go to waste!

Eight Steps For CMOs In A Recession

While reading a post by Harvard Business School professor John Quelch called How CMOs Should Function in a Recession, I realized that my previous advice to new CMOs was extremely relevant to all CMOs in this economic environment. So here are the 8 steps I had outlined for new CMOs with some commentary about how to think about each one in a recession:

  1. Re-establish our brand. As companies eliminate some activities to match their slowing revenues, its very possible for those cut backs to cripple their brand. CMO’s need to make sure that their organization’s core brand promise is well defined and understood, and that it plays a prominent role in how the executive team makes trade-offs.
  2. Put our agency work out to bid. Just about all agencies are hurting in this environment, and would rather have low margin work than no work at all. Given the need to cut back, CMO’s should consider renegotiating all of their agency deals. It’s a great environment for dialogues about doing more with less.
  3. Refine our target segments. In this economic environment, firms need to become even more selective about the customers they are targeting; otherwise they’ll poorly serve everyone. CMOs need to proactively define the key segments and refine the company’s value propositions for each one. 
  4. Increase investment in customer insight. It may be hard to argue for more investment anywhere in this environment, but getting a better understanding of target customers is extremely important; especially as customer needs are shifting. CMOs should make sure that their companies maintain a strong understanding of customers. 
  5. Build-up employee brand advocates. Many companies are reducing their workforce, but the success of the company is based on the remaining employees. So it’s more important than ever to engage employees in the strategy and objectives of the brand; difficult times can create the opportunity for open communications.
  6. Prioritize digital channels. Without any money to waste, firms need to focus on the most cost-effective opportunities like digital channels. CMOs need to take full advantage of their online marketing opportunities. Having said that, there might also be some bargains available in non-digital media as well.
  7. Improve usability of everything. This is more true now than ever. Poor usability is like a veneer that turns valuable assets into worthless annoyances. For a fairly modest investment, companies can improve critical experiences form online purchases to mailed statements. CMOs need to push for usability improvements that can capture value from existing interaction platforms.
  8. Get people asking three questions. This advice remains universal. CMO’s should continue to shift people’s thinking from inside-out to outside-in. How? By getting people to regularly ask the 3 questions of a concept called “Scenario Design:” Who are your target users? What are their goals? How can we help them achieve those goals?

The bottom line: CMOs should treat this time like they’re in a new job.

Marketing Lessons From An Ex-Marine

When Marines get rifle lessons, they learn the acronym BRASS: Breathe, Relax, Aim, Squeeze, Shoot. Casey Jones, who has been both a Marine and VP-global marketing at Dell, discusses how those military lesson make sense when it comes to marketing. No surprise: he thinks marketers do a lot of shooting without aiming. Jones offers a lot of good advice, including this:

Breathe: Set aside time every week to focus on what your brand is communicating. Relax: Remember that the brand will not fail if you pause for a moment to focus. It may fail, however, if you continue to waste marketing shots that are off-target.

He also recommends that all messaging briefs contain these four elements:

  1. A clear definition of the target audience
  2. A clear statement of the audience’s current mental and emotional perceptions of your brand.
  3. A short statement of the “desired” perceptual state — one that is reasonable given your budget.
  4. A clear list of the minimum points you must communicate in order to achieve your goal.

The bottom line: Don’t forget to breathe, relax, and aim.

Walgreens’ New CMO Seems On Track

I just read an interview with Walgreens’ new CMO, Kim Feil. Here are some quotes from her in the article:

No drug retailer has a clear and distinctive position from the consumer’s perspective… we are all known for being a great pharmacy and for being convenient… Those are the cost of entry.

I believe that the fundamental caring that our organization has for people is something that will be one of the most distinguishing characteristics in defining who Walgreens is.

I want to see us elevate the Walgreens brand to… be consumers’ first choice for remedy and relief, including finding their beacon of health and personal wellness at Walgreens.

My take: Feil seems to have the right perspective. How am I evaluating her? By looking at how effectively she’s following my 8 steps for a new CMO. In this short interview, she’s demonstrated a bias towards three of those steps: Re-establishing the brand, increasing investment in customer insight, and building-up employee brand advocates. Nice job!

The bottom line: You can’t go wrong focusing on customers and employees.

8 Pieces Of Advice For RadioShack’s New CMO

Lee Applbaum has just been named as the new CMO for RadioShack. Congratulations Mr. Applbaum, you’ve got a lot of opportunities to improve!

As I mentioned in a recent post that talks about Radio Shack’s efforts to reformat its stores, the retailer does very poorly with customer experience. As a matter of fact, Radio Shack came in at the bottom of the 27 retailers in Forrester’s Customer Experience Index. That’s right, dead last. During other research, we found flaws in areas like Radio Shack’s in-store shopping experience and its Web-store cross-channel experience.

So here’s my advice to Applbaum: Take a look at My First 8 Steps As A New CMO. As I think about the situation at Radio Shack, all 8 items in that post make sense. Hopefully the RadioShack leadership team views their efforts as part of a long-term journey; evolving through the five stages defined in The Customer Experience Journey. To guide the company’s evolution, Applbaum should also introduce the entire leadership team to The 6 Laws Of Customer Experience.

The bottom line: When it comes to customer experience, Radio Shack has much to gain and little to lose.

My First 8 Steps As A New CMO

A lot of Chief Marketing Officers (CMOs) are changing jobs. Over the past few months, companies with new CMOs include: Blockbuster, Domino’s Pizza, KMART, Cheesecake FactorySears, Monster, Hertz, HeinekenPepsiCo, Booz & Company, Target, Barclaycard USOmni Hotels, and T-Mobile.

Since there are so many new CMOs, I thought I’d offer some advice on how to get going in the role. So here are the first 8 steps that I’d take as a new CMO:

  1. Re-establish our brand. Many companies have lost site of who they really are; they’ve lost their souls. One of my first steps will be to redefine our brand attributes through a process of internal interviews/workshops (to uncover what we believe) and customer testing (to see how we’re perceived).
  2. Put our agency work out to bid. Let’s face it, even the best agencies can get complacent. So I’d put all of our agencies (advertising, interactive, PR, etc) on notice that they’ll need to compete to keep our business. This should help drive innovation, get the “A” teams assigned to our account, and cut some costs.
  3. Refine our target segments. Most companies don’t know which segments are most important or they haven’t truly focused on some key segments. So I’d kick-off an effort to figure out the segments that can provide us with the highest lifetime value and examine what drives the purchase decisions of those segments.
  4. Increase investment in customer insight. In all of my work with large organizations, I’ve never heard anyone say “we spent too much on customer insight.” That’s because most companies spend too little in this area. I’d find a way to do more customer research, including ethnographic field studies, to make sure that we truly understand our customers’ needs, interests, and desires.
  5. Build-up employee brand advocates. One of my 6 rules of customer experience is that unengaged employees don’t create engaged customers. So if we want to engage our customers, we need to start with our employees. I’d plan to spend up to 50% of my time working on employee communications and outreach; and build up internal brand advocates.
  6. Prioritize digital channels. Even if our company has focused on digital marketing channels, we are probably not moving as fast as we could be; especially if any of our target markets are younger consumers. I’d look to do more with online channels and weave together our online and offline campaigns.
  7. Improve usability of everything. I’ve evaluated the usability of 100’s of Websites as well as a bunch of phone, Web, store, IVR, and cross-channel experiences. And there are always a lot of problems. So I’d champion efforts to make sure that it’s much easier for customers to do business with us in every channel.
  8. Get people asking three questions. I’d make our company more customer-centric; shifting people’s thinking from inside-out to outside-in. How? By getting as many people as possible to regularly ask the 3 questions of a concept called “Scenario Design:” Who are your target users? What are their goals? How can we help them achieve those goals?

The bottom line: CMOs have a lot of opportunity to make a difference.

Ford (Finally) Turns Employees Into Brand Ambassadors

I just read a BrandWeek article called Ford Asks Employees, Dealers to Spread Ad Message that talks about Ford’s new campaign called “Drive one” which includes a push for employees and dealers to spread the word. Jim Farley group vp-marketing and communications for Ford explains it this way:

The whole idea behind this campaign is not fancy ads. It’s talking to the customer, who talks to a friend. It’s the only chance we have to break the apathy.

My take: As I talked about in my previous post about John Hancock, advertising alone can’t dramatically change a company’s positioning. It takes a shift in how you interact with customers. That means you need to get employees involved (and for car makers, it means dealers as well). So this approach makes absolute sense. Yet, something is wrong.

The fact that Ford is making such a big deal out of this approach means that it’s an unusual occurance. So the car maker does NOT regularly engage employees and dealers in its advertising efforts. That’s a problem. Employees and the entire front line need to be developed into ambassadors for any campaign. And if they can’t promote it, then that’s probably a good sign that the campaign is not a good one. 

When I interviewed the CMO for JetBlue several years ago, she told me that she spent half of her time communicating the brand message internally. Sounds like a good benchmark.

The bottom line: CMOs need to become CMMOs, Chief Marketing And Motivational Officers.

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