Coupon Innovations: SMS Push Strategy Being Used By Kroger

Finding Coupons Online Has Increased to Stretch Grocery Budgets – WSJ.com.

At a time when consumers are cutting back on spending, and trying to make that which they spend go much further, Kroger is once again embracing innovation and technology to sustain its leadership position in the grocery space.  It is no surprise that Kroger continues to deliver stellar results to its shareholders as they always find ways to surprise and delight their customers by embracing and activating change.

Mobile marketing and SMS are something which many companies have talked about, but Kroger is one of the companies doing something about it which will pay dividends.  It is not just about activating a mobile strategy, but activating the right mobile strategy.  Kroger has been testing an SMS push strategy for the deployment of its coupons and will soon be rolling it out.  The coupons are pushed to customers via SMS, which are then loaded to their loyalty card for easy in store redemption.  This avoids the hassle of having to clip and carry paper based coupons and creates customer stickiness.  There are some exciting things Kroger can do in a later phase of their roll out, including pinging customers in store as a reminder to purchase the items that have received coupons for.  Additionally, they can add other cross sell promotions based on behavior and shelf adjacency.  Kroger has been brilliant in their strategies and innovation, thus I am fairly certain there will be many more advancements in this strategy, without over complicating the process or confusing the customer.  It is always best to crawl, walk, run.

The statistics for electronic coupon usage and redemption suggest this is a strategy that more companies should begin to incorporate into their marketing mix and loyalty programs.  Today online coupons only represent 1% of all issued coupons, but their usage is growing rapidly and redemption is up 140 percent year over year.  The key to increased redemption is less about the channel and more about the relevancy.  Those companies who are beginning to embrace electronic coupons are advocates and converts to one to one marketing.  Kroger is a leader in the grocery space, which can be attributed in large part to the effectiveness of their loyalty and couponing strategy, which will further be enhanced by the convenience of electronic deployment.  As smart phones become more pervasive, shoppers will be able to build their lists on their computer and push it to their phones and match items to eCoupons, or do it directly on their phone like my wife (but unfortunately we do not live in a state which has Kroger or other sister brands, thus we don’t get the benefit of participating in their loyalty program).

Kroger has embraced the power of customer data and continues to innovate their business, embracing technology to connect directly with their customers in a relevant and one to one manner.  This is not just a win for Kroger, it is a clear differentiator with Kroger customers who have often said that Kroger really knows their shopping habits and continually delivers relevant coupons based on what they buy, rather than being like most other grocers and retails who subscribe to a one to many saturation approach for their coupon programs.  A third critical participant and winner in this strategy are the CPG companies who work closely with Kroger, participating in the couponing matrix strategy based on customer behavior.  This is another success story, worthy of another blog post at another time.

My hat is off to Kroger for its continued innovation and continued belief that customers should be at the center of the decision making process.  Through their key partnership with dunnhumby, a global consultancy that has perfected the practice of using customer data to drive insights which lead to action, Kroger has continued to differentiate itself with its customers, winning greater share and delivering an impressive string of year of year earnings growth which they have directly attributed to how they have embraced their customer data to drive insights which have reshaped their strategy!  In these difficult economic times, more than ever, data is king and more companies should take a page out of Kroger’s playbook.  It is not acceptable to cut marketing budgets across the board or cut programs you do not like, but rather a triaz of your customer data should be performed to determine where you are getting ROI for your spend and where you can prove value.  This is not a time for keeping pet projects with soft benefits which cannot be proven as meeting a clear and measurable objectives.  We are entering into a new marketing era where accountability is more essential than ever.  A lot of what worked in the past, or could be sold as having value, is either not working or at risk.  This is not a short term situation, thus as marketers we must be strategic, accountable and put customers at the center of our decision making process, using the rich data that sits in our databases.

Winning or Losing the Minds, Hearts and Wallets of Our Customers

Over the weekend, I made a trip to the mall with my wife to the Cole Haan store. Last year I bought my wife a purse from Cole Haan for over $500. and after only having used the purse about 10 times in a year, the strap is beginning to fall apart. I figured since I spent over $500 on this purse, which has not been abused, I should see if Cole Haan will do something about it. The sales associate was extremely curtious and understanding. Without hesitation, she said it is obvious there is a flaw in the strap, thus we will gladly repair it for you and apologized for the inconvenience. I was quite impressed with the associates handling of this situation. She did not even look up my previous purchase history, which is several thousand dollars, nor did I have to tell her that I was a frequent shopper having spent several dollars over the years.

This is an excellent example of good customer service and a company that empowers its associates to make the right decision for the company and the customer alike. This is an act that will not go on unnoticed by me. In the future, I will certainly not hesitate to continue to shop at Cole Haan.

In these difficult economic times, it is vitally important that other companies take note of this type of behavior. It is very expensive to acquire customers and it take a lot of work to move customers from being uncommitted to being loyal. Customer loyalty is not about having the best price, in most instances. Those customers who shop just on price are typically not your most loyal customers. These customers, are merely transactors who will not hesitate to defect for a competitor who offers a better price.

There are a number of examples of companies who do a good job of differentiating themsevles against their competition. Their differentiation in on service, those little extras, or better trained associates, coupled with a strong in stock position if it is retail. or personal recognition of customer behavior orchestrated through an effective one to one marketing campaign based upon your purchase behavior and preferences.

Many companies are focused today on cutting costs to make it through the other side of these tough economic times. I submit to you, it is the companies who keep their customers first that will service and continue to win the minds, hearts and wallets of their cherished best customers, as well as dong the best job at converting uncommitted customers to best customers.

I have had the good fortune of working with, and being a customer of many companies who do an outstanding job of putting the customer first. It is a part of their corporate culture, from the CEO down to the sales associates, or waiters, or flight attendants. Those companies who do a good job know who they are, but they can all do better. I am not going to make this post about who else is doing a good job. If anyone is interested in my list of who is doing it right, feel free to email me and I will respond to you directly. Additonally, I am not going to out the companies who are not doing a good job, or those who have gone from good to great to gone or soon to be gone, I think they know who they are as well.

If you find a company who does a good job like Cole Haan has, return the favor and tell your friends and continue to open your wallet in their stores rather than going to a competitor. If you show loyalty to a company and they do not show it back, you are certainly free to flee. If you are trapped because there is not another company that provides the goods or services you need, let them know. Most companies, the good ones anyway, want to here from their customers; the good, the bad and the ugly.

You do not have to spend a lot of money on a product or service to expect good service in return. It can be as simple and inexpensive as a newspaper on a street corner or a coffee at your favorite coffee shop. The point is, these are competitive times and companies need to work hard to provide customers with service that wins the minds and hearts of their customers, which will translate into maximizing the customers share of wallet. When companies we engage with make an effort to win our minds and hearts, we should return the favor in kind by being loyal to them. There is a great old Midas commercial that says “pay me now or pay me later”. This is a two way street. If companies treat us poorly it will cost them lost customers and revenue; conversely if they treat us well and provide the products and services we seek, we will reward them with our business. If we leave a company that has treated us well to save a few dollars, what happens when that company goes out of business or if you have to return a product and they are not accommodating. The few dollars you saved are lost in spades. Companies and customers alike, think about the end to end life cycle of the value of committing to each other.

Thanks Cole Haan for going that extra mile for me, I will be back soon and hopefully so will my friends.

A Customer For All Seasons

There are many marketers today who are concerned about slowed revenue growth, or even shrinking revenues, as well as fleeting customers. What can you do to truly recession proof your business… Listen To Your Customers. I have often been bewildered by how many marketers will rally their teams in a war room to strategize on how to increase revenues, acquire new customers, gain greater revenues per customer, by adding a new feature or function, price changes, new ads, etc., but they often neglect the most important part of the equation: talking with and listening to their customers before making changes. It is o.k. to develop concepts from an inside out perspective, but they must be market tested or vetted by those who pay for the salaries and overhead of our companies – The Customer.

A critical customer segment, Mavens, as defined in Malcolm Gladwell’s The Tipping Point, are twice as likely to talk to others about their experiences with our brands. Not only are they twice as likely, but they tend to have very developed social networks that listen to them, trusting in their opinions. It is critical to fully understand and respond to the opinions of your Mavens in advance as they can play a significant role in the successes and failures of our brands. A good practice for all marketers to embrace on a daily basis is to ensure their products and services appeal to people’s aspirations and their dreams. As marketers, we must inspire prospects and consumers alike as we move them from awareness to trial and hopefully loyal customers.

When trying to decide what the next new product or service is you should be focusing on developing, I would suggest trying not to be one of the many “me to” products and services that exist today, unless you have a unique hook that can gain you share. A better approach, however, is to focus on creating products and services that are game changers, that can be tomorrows market leaders not followers. Don’t be afraid to think big, break the rules, challenge the current conventions within your industry and kill some “sacred cows”. Develop your products and services from the point of view of the customer. What latent need is not being met efficiently today. How many times have you thought, “boy I wish I had thought of that, it is so obvious”. Focus on differentiating yourself. As you think about your business, focus your product development on the needs and wants of your current Mavens and those you would like to attract to become Mavens. If you haven’t done so in the past, begin to spend a disproportionate amount of time focusing on keeping these key individuals happy. You can do this by providing them with exceptional service and the products they are demanding. Do not attempt to do this by sitting in an ivory tower, speculating on where your next share gains can come from, but go to the source, the Mavens, for your answers. It is also important to always be extremely respectful of their time and privacy. That said, you still must not forget to solicit feedback from them whenever possible, preferably before undertaking actions that might affect their future experiences with your brand. Always avoid, at all costs, going to market with new products and/or services without first engaging with your customers (those who pay) and, if appropriate, their end users (those who use). Establishing a simple customer feedback loop or echo chamber, before implementation or product launch is an essential element to maximize the chances of success .

If you can follow these simply rules and make it part of your operating disciplines, you are assured of having better success at keeping your custommers through all seasons, as well as attracting new ones.