Immersion Quarter Reflection: Internal Communications at Mondelēz

As part of the Medill IMC full-time graduate program, students are required to work for a company over the summer in what is known as the Immersion Quarter. Students have the option to work in a group with others in the IMC program, or they can venture out on their own in an individual assignment. I decided to work as part of a larger group, as many jobs rely heavily on working with others. As a result, we were provided a list of about twenty companies who had designed IMC-related projects and we were asked to select our top ten, one of which we would ultimately be assigned to.

Having taken a number of classes related to communications, I selected projects that centered around that aspect of IMC. A project that was of particular interest to me was one surrounding internal communications at Mondelēz International, the company that owns Oreo’s and Ritz Crackers, among other brands. I was very excited to find out that I had been assigned to the Mondelez project, and was glad to find out that I liked the people who I was assigned to work with.

For me, working at Mondelēz was a completely new experience. While I had taken a year off between college and graduate school, I was unable to find a full-time job during that period and the internships I had found were for relatively smaller companies. Walking into Mondelēz, a global organization with more than 100,000 employees, was a bit daunting on my first day. Here was a real company, and I was supposed to help develop a solution that impacted the entire business. I knew that I had a unique set of skills, but being an outsider and never having actually worked as an employee on internal communications I felt like it might be difficult to actually affect change in the organization.

While the task we were faced with initially seemed like it might be difficult, we knew that we had the ability to succeed. Starting out, we utilized some of the information we had learned in Professor Michelle Weinberger’s Consumer Insights class and tried to discover significant pain points among employees (for our project, employees were the ones who would be using our “product,” and in this way were similar to customers). While we did not do full-scale ethnography, we conducted a number of interviews and distributed surveys to different stakeholders in the company, not just at the organization’s Chicago-area headquarters, but around the world. As a team of five, we also used these interviews to better understand the company and its culture so that we could create recommendations that would be impactful and accepted by the organization.

From the responses we obtained, we were able to gauge some of the pain points experienced by company employees, as well as suggestions for improvement going forward. This information proved to be essential in developing our ultimate recommendations for the company, directly influencing a number of our suggestions. In developing our ideas, we also incorporated concepts from Professor Dan Gruber’s Managing Integration course, such as engaging employees on a deeper, more personal level beyond their work. When we delivered our ideas, the employees that we presented to seemed very happy with the work that we had done, which was nice to hear and showed that our hard work paid off.

As a whole, the project was really enjoyable. The people that we worked with at Mondelēz were very helpful and open to sharing their thoughts with us. It was nice going in every day knowing that the company supported what we were doing. While the project itself helped our team grow, it was also very enjoyable going to and from work as a team. This gave me an opportunity to learn more about my team members, as I had not worked with some of them before.

Another benefit of working at a snack company like Mondelēz is that there was an employee store where one could buy products from all over the world at a discounted price. Personally, I know that I often would go to the store in the morning and buy some chocolate to give me a boost through the rest of the day. People should pay attention to things like this when looking for a job!

Chocolate and bonding aside, spending my Immersion Quarter at Mondelēz really helped me grow as someone about to enter the professional world for the first time. The experience allowed me to utilize what I learned in IMC within a real organization and to gain valuable experience with a large company. I will certainly use what I learned from at Mondelēz in my work going forward.

Why the Voice of the Customer Matters

A perspective combining lessons from fundamental IMC principles and the IMC’s course on Managing Integration

It’s Sunday night and I’m starving. My weekly grocery delivery is late. My meal prep is ruined and there’s nothing to eat.

My grocery delivery had previously notified me that my delivery would only be 2 hours late, but it is fifteen minutes away from extending past that time and I had received no new notification of an update on when it would be arriving. This is the third time a delivery has been late in as many months. I had previously let these issues slide, but I’ve had enough.

Fueled by low blood sugar, I call the grocery delivery service’s customer service line. I explain my grievance. The delivery is 4 hours late. The customer service rep apologizes. I can hear the powerlessness in his voice. He’s gracious, but clearly not empowered to do anything to alleviate this issue. I’m calm though – despite the growling in my stomach – because I know it isn’t this person’s fault. It’s obvious to me that this employee’s hands are tied. I feel bad for him. How disheartening is it for an employee to have to listen to customer complaints but not be given the power to do something about it? The only action he can take is to apologize. The one consolation he can give is to give me an update on when the driver might arrive. Even though it’s clear to me this person cannot help me, I feel the urge to vent. I tell him that the entire purpose of the service is for busy people to not have to go through the trouble of going to the store to buy food and that the fundamental principle underneath that is convenience. Yet, it is violating the whole business model by being grossly inconvenient when the delivery is consistently late. The rep agrees with me and says he will make a note of it. I thank him and get off the phone.

Going through Northwestern’s Integrated Marketing Communications (IMC) program is like “getting religion.” By the time you reach the fifth quarter, the doctrine of IMC becomes thoroughly embedded into your fundamental values you can’t even imagine approaching a business problem without it. Annoyed with the situation, my IMC brain screams “This is not a customer-centric approach!”

I calm myself down and try to think rationally. If I’m such a good IMC student then what would I do about it? (Yes, this is what nerdy IMC students do for fun on Sunday nights!)  So I go into analysis mode:

  • First, I would set up my customer service representatives up for success with unhappy customers. I would give them the power to provide discounts on future grocery deliveries to extremely unhappy customers who call. This is a win-win on both sides. The customer feels valued by being offered something for the inconvenience, and the employee feels he or she has made a positive impact by taking action to alleviate an issue.
  • Second, I would take a serious look at the company’s operational issues. A quick bit of online research on Glassdoor.com reveals that there is high turnover in the warehouse and in delivery. These employees are the most customer-facing parts of the organization. I would examine why there was high turnover, and why these employees were not being valued more highly. If you can’t get the supply chain and delivery part right, what value are you really bringing?
  • Third, I would learn from the competition. Despite being in different industries, I find myself comparing this service to Zappos. One time Zappos accidentally sent me a duplicate of a piece of clothing I ordered. I notified them and asked if I should return it. I didn’t really want to go through the trouble of doing the return, but I told them about it anyway not wanting to be charged later. A cheerful sounding email from Zappos replied, “Our mistake. Keep it!” I was ecstatic. I got a free piece of clothing from Zappos! A small gesture, but now I’m a customer for life, and notably spreading the good word on Zappos now here in this very public forum.  Are Zappos and grocery delivery the same? Absolutely not. Zappos deals in apparel and the grocery delivery service in perishable food items, but that’s the reality of the world in which we do business. Customers will compare services across industries. The competition of a grocery delivery will not be only against other grocery delivery services. The customer experience across categories will be scrutinized and compared. Having a gold-standard customer-centric experience with one company will make your mediocre customer experience pale in comparison in a whole other industry. To win and retain customers you must compete on service. This is a matter of long term company survival.

My complaint is a symptom of a larger issue in the organization. Namely, that the customer isn’t a priority, and the organization hasn’t put into place an infrastructure to support this nor is it empowering its employees to do anything about it. It calls to mind what I learned in Professor Dan Gruber’s IMC 457 course, Managing Integration, this past spring. In class we read, Karl E. Weik and Kathleen M. Suttcliffe’s Managing the Unexpected, which explains the concept of reading into “weak signals” or signs of larger problems within organizations. My complaint is a weak signal that with time could snowball into an unexpected and serious consequence.

And here’s an example – I find myself wanting to do something about the lack of competition for grocery delivery in the area. I am frustrated enough to send an impassioned email to Amazon Fresh (Amazon’s grocery delivery service) to bring their service to Evanston. And here I am now, writing a blog article intended for public consumption detailing the gulf between the mission of this grocery delivery company and it failing to deliver on its value proposition.

So now the question is, how many other customers like myself are doing the same? Petitioning an e-commerce giant like Amazon who gets delivery and service so right to enter the area? Or which customers are going online to write negative reviews about the service received. Another quick bit of research on to Yelp, and I immediately see two negative reviews. Words like “it sucks” and “if I could give it zero stars I would,” have risen to the top.  Sure, there are some positive reviews, but how much longer till the negative outweighs the positive? As I’ve learned in Managing the Unexpected, it’s important to remain preoccupied with small failings rather than overhauling an entire organization. I don’t have an inside view into this grocery company. Perhaps they are working on improving operations as I write this. Perhaps, they are aware of these customer complaints and working on a strategy to deal with it.

Despite the negative bent on this article, I am a positive person. My purpose in writing this article is not to bash a company and lord over it the lessons I have learned from my graduate education. This is why I have left out the specific company name. The reason I have written this is because I want to channel a negative experience and use it as an opportunity to learn. To use IMC frameworks to understand what may have gone wrong, and to exercise my abilities to think about solutions to fix it. For the sake of this company my sincere hope is that it is working on a plan to solve these issues. It makes me happy to see companies getting customer-centricity right and succeeding because of it. So if there were a single piece of advice I could give to this company it would be this – listen to your customers. A single one is trying to tell you something. You can do better! This is your opportunity to prove that. Recognize how this one voice could represent many customers. Do something about it before it’s too late.

Alphabet Soup: Why Al Ries Missed the Mark with His Four M’s

marketing

KPI, ROI, ELM, CTR, LTV, SEO … Marketing students must navigate a world of acronyms and frameworks. However, three stand out as particularly overlapping and in need of resolution: The Four P’s (Product, Price, Promotion and Place), the SIVA model (Solution, Information, Value and Access), and the newest one to hit the presses, Al Ries’ Four M’s. Ries’ proposal to bring E. Jerome McCarthy’s Four P’s into the 21st Century acts as a perfect sounding board to understand which framework works best.

In his September 5 AdAge article, Ries suggests changing the first P – Product – to Merchandise, a somewhat nitpicky attempt to expand the idea of product beyond physical products and include services, movements, organizations, cities, ideas, et cetera. But merchandise carries an even stronger colloquial connection to physical products, conjuring up images of “merch” at sporting events or conferences. SIVA’s employment of the term “Solution” does a much better job of encompassing anything someone could purchase while also introducing a bigger idea: brands exist to serve customers. While Ries has the right intention to broaden the scope of marketing, his framework should use more than synonyms to find a word that better captures the essence of a brand’s “Product.”

In his discussion of the first letter in his acronym, Ries correctly dismisses “Price,” arguing that it should be wrapped up in Product. But he leaves the discussion at that. The SIVA model takes this argument a step further by encouraging a focus on “Value,” meaning products, merchandise or solutions should not be framed solely by dollars and cents but also by added-value and benefits. This once again necessitates an understanding of consumers’ problems and potential solutions, making it a much more consumer-centric way to approach marketing.

Next, Ries introduces “Market” as the second M in his framework, advising marketers with merchandise to “pick a segment of the market to appeal to.” Here Ries misses the mark completely: market should not come second to product, but should be ingrained in the production process itself. No product, merchandise or solution should be devised without a clear understanding of what, where and who the market is or of what consumer problem the product solves. The term is a useful element of the framework, but it is misplaced.

Ries uses his third M – “Media” – to replace McCarthy’s Place. While it is convenient that media begins with an M, there is much more to “Media” than what the term media implies and a different word could better reflect this. In the 21st Century, anything can be a medium and consumers come across products, merchandise and solutions everywhere. SIVA’s use of the term “Access,” which emphasizes that consumers should be able to access solutions however they want to, elevates the conversation further by framing it in terms of the consumer and by encouraging brands to seek out multiple paths to reach consumers, whether or not those paths involve places or media. Ries’ proposed term “Media” does not reflect marketing’s need to more seamlessly fit into the lives of 21st Century consumers.

Finally, Ries replaces “Promotion” with “Message,” but this near-synonym does little to clarify how messaging’s role in marketing has changed or should change. SIVA addresses this element with the term “Information,” which focuses on providing the consumer with what he needs to know to make a purchase. The term hints at the need for two-way conversations and engagement, each of which are at the heart of 21st Century marketing.

The Four P’s are still useful in that they cover a whole swath of operational concerns that a C-suite contends with on a daily basis: What am I selling? What does it cost? How do I sell it? Where should I put it? The problem is that it is operations-centered rather than market-focused. It ignores the consumer, who is a powerful force in today’s marketing. And Ries’ proposed Four M’s do little to address this shortcoming.

Marketers could spend years concocting the best mix of p’s, m’s, c’s, or any other letter but this is simply a distraction from the real task at hand. You don’t need acronyms to be a great marketer; just use the customer as your framework.

One Simple Marketing Procedure Drives Credibility, Sales, and Product Ratings

This blog was published as one of the Medill Spiegel Research Center’s series of articles written by the student Marketing Impact Team. 

The Spiegel Research Center studies how consumer engagement drives purchase behavior. Join the conversation and follow Spiegel on Twitter: @SpiegelResearch

For more information about the SRC please visit: http://spiegel.medill.northwestern.edu/

The Spiegel Research Center has partnered with online review platform PowerReviews to study which consumers write product reviews, why they post them, and how these factors are reflected in product ratings. As high ratings often drive high sales, understanding the factors involved is key to successful marketing.

Yorgos Askalidis, the newest addition to Spiegel’s research team, joins the Spiegel Research Center with the research goal to help marketers and consumers experience reviews that are “more credible, trustworthy, and representative.”

Askalidis’ initial research findings illustrate key differences between reviews consumers leave unsolicited on a provider’s web platform and reviews they post when prompted by emails from providers.

Reviews posted without prompting…

-Are often driven by strong reactions to a product. These reviews tend to be extremely positive or negative, and their average ratings fluctuate noticeably over time. Ratings can also be inflated by non-verified “customers” who may not have used the products themselves, but want it to succeed or fail.

-Create a self-perpetuating selection bias. In other words, moderately satisfied customers may be influenced by existing site reviews to post extreme reviews themselves.

While reviews prompted by reminder emails sellers send to customers…

-Express more moderate reactions. These reviews often include more mid-range ratings than site-sourced reviews do. Not only do their overall product ratings tend to stay the same over time, but they are generally higher than web-based rating averages because fewer of their ratings are extremely low.

-Are written by verified customers–who are not likely influenced by previous reviews. Also, as these reviewers may not have posted at all without the email, they form a larger, more representative sample of the customer population than those who write reviews independently.

Altogether, it seems ratings and content from email-based reviews may reflect users’ experience more accurately. Since they also lead to higher ratings, these reviews are also very likely, per the Spiegel Center’s body of research, to drive higher sales.

It’s tempting for platforms to eliminate site-sourced review bias by only allowing customers who have received email invitations to review on the official platform. This can be hard to execute, though, as timing the email to product use is both essential and almost impossible to manage. Using only email-sourced reviews also removes the valuable insight that rawer, unsolicited reviews could provide.

This research is still ongoing, but Askalidis does have suggestions for marketers to leverage both types of reviews, maximizing their accuracy, power, and representative value.

-Incentivize Reviews—For Free: Both Amazon and Yelp give “stars” or badges to frequent verified reviewers, designating them as opinion-leaders. This reward costs nothing and incentivizes other verified customers to write their own reviews and achieve the same status.

-Show Verified Reviews—As the Default: Setting the review platform to show only verified reviews hides unverified reviews, but does not censor them. Site visitors can still choose for themselves which reviews they read.

Askalidis identifies this as the “nudge” approach, which leaves customers free to choose their content but “nudges” them toward the more credible choice. This “nudge” could be especially effective on today’s savvy customers, who may already believe verified reviews are the most trustworthy.

Both of these options, as well as other custom solutions marketers can create for unique businesses and goals, work toward the “more credible, trustworthy, representative reviews” the Spiegel Center is working to provide for the benefit of providers and consumers alike.

 

How to Master the Art of Influencer Marketing

influencer marketing

Digital Marketers love influencer marketing and rightfully so. Given the threat of ad blocking technology and regulations, money and talent spent on influencer marketing helps you be ‘ wanted’ or even ‘sought out’ by your potential market. Additionally, with a fast morphing social media scene, the influencer can move from one platform to the next and brands can ride along with them.  Therefore, it is no surprise that Instagram – the inspiration repository of our time – is eyeing $2.81 billion mobile ad revenue in 2017 – accounting for about 10-14% of parent company Facebook’s revenue.

Influencer Marketing Pitfalls to Avoid:

So now that you are seriously considering influencers in your marketing scheme, take note! There are several brands attempting influencer marketing face:

  • Giving away freebies through the relationship with no ROI or uptick in sales
  • Consumers read about the product but do not respond the way the marketer expected
  • The influencer becomes controversial and years of brand building becomes jeopardized
  • And the worst of all – the consumer resents the presence of the brand and fails to find value from the influencer’s communication

Tim Bay, VP of Digital Marketing at Wilton Brands, executes masterful solutions to all of these problems. Bay has helped food decorating favorite Wilton Brands grow its subscriber base on YouTube alone by 290% in 2015.  As you may well expect of a company selling cake decorating tools, its audience base is mostly interested in fun, visually-appealing instruction videos that it uses for inspiration.

Of his strategy Bay says, “Our strategy is to empower our customers to do what they love. A decade ago we had catalogues and now we have Instagram and YouTube. While our goal to empower the customer and think about what she needs hasn’t changed, how we go about it has.”

Wilton brands has become more of a content publisher over the last year, with a strong creative department churning out over 2,500 new projects (how-to’s) per year.

Bay explains that, “We have our own decorators who churn out exciting creations using Wilton tools. However, working with influencers who organically include our products in their regular content, helps us to reach new customers. Also, we don’t want the content to just sit there, we want it to facilitate engagement.” These ideas may seem intuitive, but are tough to play out in real life!

Relevance Heaven

The difference in publishing one’s own content and working with influencers is very obvious in Wilton’s partnership with Baker/author/YouTube celebrity Rosanna Pansino.  Her YouTube channel with 6 million followers and Instagram account with 1.5 million followers have each become home to many quirky, creative baking concepts. Each is followed by a varied age group that that overall encompasses the ideal Wilton customer of both today and tomorrow. Pansino had been using Wilton tools in demonstrations long before the company approached her, so it was a very natural partnership.

It follows that the arrangement between Wilton and Pansino does not feel like an imposition on her followers; Pansino posts a follow up or complementary video exclusively available on Wilton’s channel and simply invites her followers to check it out there. Then Wilton gets a chance to monetize the view on its own channel! Case in point: During the recent Star Wars movie release, Pansino made a Death Star cake for her channel. As a complement to that, Pansino invited her followers to check out how to get the perfect consistency for the cake’s icing on Wilton’s YouTube channel.

Where Wilton’s own videos get 5 digit views, Ro’s videos on the same channel usually have 6 to 7 digit views and a string of conversations around further product/process related advice. This is influencer marketing gold!

Innovation Shy? You Can’t Afford to Be!

Bay also suggests testing out various digital technologies as they become available. Marketers today cannot sit back and wait to see how others are using a platform. Wilton Brands tested Facebook live videos early on – it’s so easy to do and one can understand the results right away.

In conclusion: Here are Tim Bay’s solutions that can help you rock-out your influencer marketing :

  1. Be Non Prescriptive: Let the creators create and don’t be overly prescriptive in what they say in content created for you. The key is to find someone who would want to work with you even if you didn’t pay them, because it makes organic sense – and then pay them.
  2. Test innovation early – don’t be afraid/ shy
  3. Be Retailer Sensitive : Learn where to prioritize and spend money in an omnichannel environment. Choose paths that include and work for your partner retailers as well as your owned media.

Now go out there and prosper…

Check out Wilton brands’ videos at: https://www.youtube.com/user/wiltoncakedecorating

Reflecting on Creating Outstanding Digital Experiences (C.O.D.E.)

Taking Professor Andy Hullinger’s course “Creating Outstanding Digital Experiences” (C.O.D.E.) was a great feast for both the eyes and the mind. The purpose of this course is to motivate students to use their inspiration and creativity as they explore the art and science of crafting delightful digital content.

Professor Hullinger was full of enthusiasm during every lecture he gave and was extremely helpful when explaining a bunch of different coding puzzles to students. His passion seemed to have a magic power that allowed him to simplify the complexity of HTML5, CSS3, and a sprinkling of JavaScript. We students thus have great motivation to learn hands-on coding steps and immerse ourselves in the highly joyful programming environment.

This course provided an excellent learning experience for multiple reasons. First of all, this course really trained your patience and made you skilled at coding through practice. As a complete beginner without any prior programming experience, I harvested a lot from this course. To facilitate students’ better understanding of the fundamental syntaxes of HTML & CSS languages, there were weekly assignments, such as online readings, online programming teaching videos, and flipped-classroom coding exercises to keep students working at a steady pace. As the old saying goes, “Practice makes perfect.” Acquiring any new skill or talent is mostly a matter of practice, more practice, and then even more practice. The same works for coding. Through repetitive practice every week, even every day, I was amazed to find out that I was talents enough to create the online design effects I desired through lines of magical codes.

If the most important key to learning in this course is practice, then the second most important is to use your imagination and creative intelligence to apply web standards (HTML5/CSS3/JS) to create coherent, effective digital content. The digital culture and environment today is largely being created and affected by consumers. It is certain that thinking critically about problems and how you can transform your ideas into objects are of great importance. To find innovative solutions, here is a shortcut to the trick. Thinking back on the first class, I was astonished to the idea that “Everything is a remix” which Professor Hulling presented to us through a video illustrating how this concept is widely utilized in the evolutionary  process of  the entire world. Indeed nothing is actually original. Through borrowing, stealing, and transforming, everything is evolving to a higher level and our lives thus become easier. This is true for coding too. If we reference more from shining points in others’ masterpieces, try to extract the essence and then transform it into our own style, we might find ourselves with an endless store of innovation to pour into our own work.

Another noteworthy aspect of this class was “TeamTreehouse,” an online coding-learning source that Professor Hullinger used to help with students’ programming learning. TeamTreehouse provides a rich library of over six hundred videos organized into specific learning tracks. I personally think I got adequate training in HTML, CSS, and Javascript through this platform. On top of being able to watch course videos for each “format” using this tool, there are corresponding quizzes and challenges for students to use to reflect. Another thing that makes TeamTreehouse stand out from other online learning sources is that it is also a community-driven platform. When you encounter a problem during your learning, you can post your questions on the website. This allows the instructors or other web talent learners to actively respond to your questions to help you solve the problem.

In sum, this class is excellent for those who seek a pragmatic and inspiring introduction to the coding world. I have gained so many valuable web content design skills in this course. Trust me, you won’t regret engaging yourself in the relaxing and well-paced coding environment via taking this course!

Marketing Lessons from Starbucks “Red Cup Controversy”

Starbucks red cup controversy

This blog was published as one of the Medill Spiegel Research Center’s series of articles written by the student Marketing Impact Team.

The Spiegel Research Center studies how consumer engagement drives purchase behavior. Join the conversation and follow Spiegel on Twitter: @SpiegelResearch

For more information about the SRC please visit: http://spiegel.medill.northwestern.edu/

Marketing lessons from Starbucks “Red Cup Controversy”

In the midst of a social media marketing revolution, online word-of-mouth is the epitome of a customer’s honest opinion. Starbucks Coffee recently faced a “Red Cup Controversy” in 2015 that led to a backlash of its holiday cup design on social media, yet managed to earn higher-than-expected profits.

In November 2015, Starbucks Senior Vice President Terry Davenport, spoke at the Medill Integrated Marketing Communications talentQ Expo. In his presentation, “Building Brand Equity,” Davenport offered this piece of advice to marketers: “Listen and respond to your critics.” In a similar vein, in a recent study of online negative word-of-mouth (NWOM), the Spiegel Research Center (SRC) partnered with Canadian Air Miles Reward Program to understand customer critics and how marketers can utilize their online comments.

Starbucks is renowned for its annual holiday cup, which has featured winter and Christmas themes such as snowflakes and ornaments in the past. However, 2015 was a year for change as the coffee giant debuted a simple cup with shades of ombré red. To some, stripping the holiday designs meant Starbucks was taking a stance against Christmas.

What happened next was an explosion on social media.  In the first 48 hours, a photo of the holiday cup was shared on Instagram every 14 seconds.

“People were saying that removing snowflakes was removing Christmas,” said Northwestern IMC 2016 student and frequent Starbucks customer Elizabeth Fontana. “When religion gets thrown into the mix, people can suddenly become a lot more sensitive.”  Yet in light of the controversy, lines were still out the door at Starbucks locations around the world.

Spiegel research provides insight into the success of Starbucks amid controversy.  Customers who view NWOM online decreased future spending. However, customers who experienced the value of the brand, then took the time to write moderately negative online reviews actually increased future spending. Online reviews gave these customers the opportunity to vent their emotions, resulting in increased purchases. In choosing to write online comments, the consumer is emphasizing that the Starbucks brand is very important to them, and this phenomenon helps explain why Starbucks profits rose at the same time customers were posting criticism online.

Word-of-mouth is among the top influencers of purchase behavior, according to SRC, and acceleration of online conversations has a direct effect on sales. Despite a negative attitude towards the “anti-Christmas” Red Cups online, one in six Americans received a Starbucks gift card over the holidays, an increase from one in seven in 2014. (Link 2) This further supports research findings that vocal customer reactions do not always correlate to a decrease in the bottom line.

Spiegel insights for marketers

  • Encourage online opinions: Invite your customers to post comments, both positive and negative, in order to receive and utilize honest feedback about your brand
  • Respond and apologize: Allow your customers to vent about minor grievances online, and respond directly. Customers who are extremely upset online are likely to decrease spending unless steps are taken to correct the problem. Customer service representatives should reach out to these posters to resolve any issues
  • Create opportunities to re-experience the brand value: Provide your customers a second chance with your brand by offering refunds, discounts, or a sincere formal apology
  • Acknowledge happy customers: Thank posters who share positive reviews of your brand to reinforce loyalty

Reimagining CRM with Internet of Things (IoT)

Internet of Things

CRM Revisited

To me, Strategy and Connected data have always been the two most central pillars of Customer Relationship Management (CRM). Strategy is such an obvious one, and yet astonishingly some of the biggest global organizations lack it. We have all seen them getting replaced by smaller disruptive businesses much to the world’s disbelief. Connected data is even more obvious but the hardest to implement, and hence most experts are seen talking about how important it is rather than how one can go about doing it.

Enter IoT

Every day the amount of data organizations collect grows exponentially – way faster than the advancements in digital data aggregation, machine learning and other fancy algorithmic techniques. How then can we connect data from across channels, platforms, occasions and sources, and make it look utopian? Though we’re nowhere close to it, the Internet of Things (IoT) is enabling this transformation in unprecedented ways. It is tapping into people’s mundane lives and turning their pedestrian chores into data collection and optimization avenues. CRM is no longer about creating a sales funnel and turning hot leads into sales conversions. It is about understanding every aspect of your customers’ lives and delivering relevant and meaningful experiences based on what you learned. It is about making continuous iterations to what your business delivers to them and having a strategy that allows for such flexibilities while keeping the overarching mission unchanged.

So this is briefly how IoT works: You collect data from a promising source, transmit it to other nodes in your network, aggregate and make some sense out of it, deliver a response back, get feedback about your performance and re-learn from it to enable you to respond better the next time. A simple example would be your car sensing that it is low on gas, telling you to refuel over a quick SMS and you obliging. Why is IoT pervading CRM and possibly transforming it? Simply because more information creates more value and suddenly you’re not just selling things but actually building relationships based on give and take, caring and trust.

Back to the claim that IoT is adding to the idea of “connected data” and transforming CRM. A good example of this is retail tracking at the SKU-level. Manufacturers can now sense how retail customers behave with their products, get notified before the stock on the shelves gets wiped out so that a fresh lot can be added and who bought it can be understood via transaction data. This is helping nurture three important relationships – consider all pair-wise combinations between manufacturer, retailer and customer. A toothbrush you bought can send data about your oral care habits to the manufacturer who can recommend relevant oral health tips to you.  This might sound creepy today but in the future it will become widely accepted. Baby monitors will suddenly look so old-fashioned when you can track your pet and baby with a band and escape for a tension-free evening. Of course, some babies might need to be tracked even when they turn fifteen. Door knob sensors will let businesses when their best customers walk in.

Implications for businesses and beyond

For consumers it means a whole lot of tracking (more than is palatable at this point) and a whole lot of personalized conversations with brands. It isn’t this simple for businesses though – they are all trying to grab your attention and data and encroach on one another’s territory. If Amazon’s Alexa takes off as envisioned, it is a slow but sure shot threat to Google’s search business. If Facebook’s Lead Ads take off as envisioned, no one will ever again daresay that Facebook’s Marketing ROI cannot be justified. Salesforce is already out with IoT cloud solutions that let businesses extend their traditional CRM programs to include all hardware and software components of their brand’s IoT ecosystem whether they be wearables, smartphones, cars – you name it.

It is tempting to get overwhelmed by IoT and think that becoming a break-through marketer today means venturing into the glamorous IoT. However, the technologies and networks within IoT ecosystems are merely enablers and conduits respectively. All they do is magnify the spectrum of possibilities without changing the basics of strategy, relevance and context that still beg for justice. As marketers we’re trying to solve our customers’ problems by building relationships and reimagining unquestioned systems and processes. This very humane aspect of CRM allows us to not just solve problems for businesses and their customers but for the world at large – telemedicine delivered remotely to the world’s underprivileged, and tailored education delivered to each child that fosters curiosity – are just the beginning of a whole new chapter in IoT-enabled CRM. Let us take it one step at a time.

The Starbucks and Spiegel Secret to Customer Loyalty

This blog was published as one of the Medill Spiegel Research Center’s series of articles

written by the student Marketing Impact Team.

The Spiegel Research Center studies how consumer engagement drives purchase behavior.

Join the conversation and follow Spiegel on Twitter: @SpiegelResearch

For more information about the SRC please visit: http://spiegel.medill.northwestern.edu/

In an effort to engage consumers on a deeper level, companies are implementing loyalty

programs that adapt to the vast mobile landscape. A recent study by the Spiegel Research Center

(SRC), in partnership with the Canadian Air Miles Program, showed the effect of rewards

programs in driving purchase behavior. Starbucks Senior Vice President of Marketing Terry

Davenport and his team of marketers have discovered the recipe to build and maintain customer

loyalty, which serves as a real world example that affirms Spiegel’s recent findings.

Davenport spoke about Starbucks success and strategies in November, as a keynote speaker for

the Medill Integrated Marketing Communications talentQ Expo. In his presentation, “Building

Iconic Brand Equity,” Davenport recalled his experiences as the company launched a new

loyalty program, My Starbucks Rewards.

“We talked to everybody who had loyalty programs, like the airlines, and one of the things they

said is ‘you know, the hardest thing is getting that card in people’s wallets,’” said Davenport.

In reaction, Starbucks marketers transformed what loyal customers already had in their wallets:

gift cards. Customers could register Starbucks gift cards online and use them to access free

coffee refills, WiFi, and other rewards. Shortly after, Davenport realized that in order to remain

current with marketing trends, Starbucks needed to adapt to the mobile landscape.

“Let’s use all that technology and all those tools to continue to own that one place Starbucks

uniquely owns,” said Davenport, and soon a mobile app linked to the Starbucks card was

launched.

The app’s primary purpose is a method of payment, but it can also be used to access exclusive

offers and collect stars after purchasing products. Once a user collects enough stars to move up

in rewards levels, from “Green” to “Gold,” they receive a physical Gold Card in the mail.

According to Davenport, consumers went “crazy” over the cards that began to serve as a status

symbol.

The Spiegel Research Center has conclusively affirmed the success of implementing a loyalty

program in order to engage consumers. In the recent Air Miles study, researchers concluded

loyalty programs are a proven, strategic method to increase customer sales and retention.

According to the SRC’s research, rewarding consumers for their purchase behaviors reinforces

their loyalty to the brand. Providing a mobile app also engages the consumer in ways that go

beyond the physical stores. The more a consumer engages with a brand, the more they spend on

that brand over the short- and long-term.

Davenport’s comments on the Starbucks loyalty program reflect the Spiegel findings in support

of a loyalty program as a part of a company’s strategic marketing mix. To replicate some of

Starbucks’ success, below are key findings to guide marketers in improving loyalty programs.

Spiegel Loyalty Program Insights for Marketers

-Make it multi-tiered: Spiegel Research shows consumers increase spending +22-68% when

they can choose how they receive rewards. Giving customers a way to control their level of

engagement provides a more personalized experience. Starbucks’ use of different rewards levels

encourages consumers to “level up” by collecting more stars, a strategy that acts as a game.

-Balance Instant Rewards with Long Term Ones:  Spiegel research found that offering long-

term rewards inspires customers to remain loyal to the brand, resulting in more purchases. For

Starbucks, a drink refill may be an instant reward, and the physical gift, the Gold Card, is a long-

term reward that users must actively work towards.

-Make it mobile: Many consumers may not carry their loyalty cards in their wallets, but they

probably have their cell phones. Capitalize on the growing use of mobile devices with a user-

friendly app to make your loyalty program seamlessly accessible.

An In-Depth Look at Medill’s Cause Marketing Initiative

If you want to get involved outside of classroom at Medill, definitely consider joining Medill’s Cause Marketing Initiative, a student-run committee that provides pro-bono marketing support for Chicago area non-profits. Since 2008, CMI has been providing strategic, creative, and effective marketing communications solutions for organizations based in Evanston, Chicago, and beyond.

Lindsay Menk, the PR Co-Director of the CMI leadership team, positions CMI as “a unique organization that offers benefits to both the non-profits we partner with and the students who sign up for projects.” Throughout the process of working with non-profits, students are able to use the marketing and communications skills they develop in the program such as branding strategy, digital marketing, content marketing, public relations and marketing data analysis in a real-world setting. Moreover, students have the chance to network professionally with community leaders, which is beneficial for job-hunting in the future.

This year, CMI is partnered with eleven non-profits in the Chicago area including Bernie’s Book Bank, Safe Humane Chicago, Ronald McDonald House Chicagoland, Chicago Cultural Alliance, Northern Suburban Special Recreation Association, Leukemia Research Foundation, Northwestern Settlement, The Arts of Life, LYDIA Home Association, The Pink Agenda, Why Not Me. Each CMI team is composed of 5-6 members led by a student leader, working on a project for about two quarters. Each team is responsible for completing the tasks they are assigned by the non-profits. Commitment differs from weekly meetings to bi-weekly updates. At the end of May, each team will present its work to its non-profit partner.

Personally, I’m on the CMI team for Safe Humane Chicago this year because of my love of cute dogs. Safe Humane Chicago is a nonprofit organization that strives to create a community based on the inspiring relationship between people and animals. Our task is to help Safe Humane develop a creative and effective marketing strategy to sustain specific corporate sponsorships and potentially attract more sponsors to denote. The process involves researching local businesses that echo with Safe Humane’s vision, drafting tailored email/letter to send out to corporations, and following up with the corporations. Our challenge is to come up with an effective email/letter to successfully attract potential donors. Luckily, we have professors and leadership team to support us throughout the entire process.

Yumeng Du, the student leader of Northern Suburban Special Recreation Association team shared her thoughts about the project with me. Her team is responsible for creating and implementing a comprehensive SEO strategy for the non-profit. One of the most beneficial parts of the project is the opportunity to utilize her newly acquired knowledge about SEO from class into practice.

“I feel a sense of achievement when I get to use classroom knowledge to help a non-profit achieve its goals,” Yumen says. However, as the group leader, she also faces obstacles. “One of the biggest challenges is to organize team meetings. Everyone is very busy with schoolwork. Finding a time to meet that works for everyone is hard”, says Yumeng. To overcome this challenge, she sometimes virtually meets with her teammates and collaborates online. She really appreciates the opportunity to build up her leadership experience and does work with a great cause.

To learn more and get involved with Medill’s Cause Marketing Initiative, please check out their website: http://cmi.medill.northwestern.edu