tag:econsultancy.com,2008:/topics/product-management Latest Product Management content from Econsultancy 2016-04-19T09:36:37+01:00 tag:econsultancy.com,2008:BlogPost/67736 2016-04-19T09:36:37+01:00 2016-04-19T09:36:37+01:00 Five great examples of creative commerce Patricio Robles <p>Here are five examples of companies taking advantage of so-called 'creative commerce'.</p> <h3><a href="http://www.nike.com/us/en_us/c/nikeid">Nike</a></h3> <p>Nike's NIKEiD service gives customers the ability to create their own shoes, apparel and accessories.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4018/nikeid-blog-flyer.png" alt="" width="470" height="213"></p> <p>When it comes to shoes, the level of customization offered is significant.</p> <p>Not only can customers choose the colors of the shoes and design elements on the shoe, in many cases they can change the material style and select a symbol for the tongue of the shoe.</p> <p>And they have the option of adding personalized text to the heel of their shoes, making them a truly unique creation.</p> <p>At times Nike capitalizes on events, like the retirement of NBA basketball superstar Kobe Bryant, and entices customers with the opportunity to customize limited-edition products.</p> <blockquote class="twitter-tweet"> <p lang="en" dir="ltr">The Kobe XI <a href="https://twitter.com/hashtag/MambaDay?src=hash">#MambaDay</a> iD is now available for 24 hours only. Make the moment yours. <a href="https://t.co/MXTKUYqosM">https://t.co/MXTKUYqosM</a> <a href="https://t.co/ekULdW8EWT">pic.twitter.com/ekULdW8EWT</a></p> — NIKEiD (@NIKEiD) <a href="https://twitter.com/NIKEiD/status/720443813647544324">April 14, 2016</a> </blockquote> <h3><a href="http://www.buildabear.com/">Build-A-Bear Workshop</a></h3> <p>Most companies add customization to their product mix but Build-A-Bear Workshop is a brand that is built on customization.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4013/5616800137_3b50b5b261_z-blog-flyer.jpg" alt="" width="470" height="314"></p> <p>The retailer, which has been in business for nearly 20 years now, invites customers and their children into its stores where they can let their imaginations run wild as they build their own stuffed toys.</p> <p>Build-a-Bear Workshop is publicly traded and generated over $375m in revenue last year, proving that creative commerce isn't just fun for customers but also profitable when employed well.</p> <h3><a href="https://blendbee.com">BlendBee</a></h3> <p>Creative commerce isn't limited to products we wear or use. Case in point: BlendBee, which offers custom tea blends.</p> <p>Customers select a base tea, up to eight ingredients, and a name for their blend, and BlendBee's "tea expert will create the best tasting tea from your ingredients."</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4016/blendbee-blog-flyer.jpg" alt="" width="263" height="162"></p> <h3><a href="http://villycustoms.com/">Villy Custom</a></h3> <p>Creative entrepreneurs are finding ways to customize products that historically have been quite expensive.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4014/villycustoms-blog-flyer.jpg" alt="" width="470" height="243"></p> <p>Fleetwood, the founder of Villy Customs, created his company to allow customers to build their own "bad ass custom bikes."</p> <p>Claiming to be the "digital online cruiser bike builder," Villy Custom appeared on the television program Shark Tank in the United States, where he raised investment from billionaire internet entrepreneur Mark Cuban and real estate mogul Barbara Corcoran.</p> <h3><a href="http://www.funkysofa.com/">FunkySofa</a></h3> <p>True customization of large items, like furniture, is now accessible to everyday consumers through companies like FunkySofa.</p> <p>It allows customers to design custom sofas, as well as sleepers, loveseats, chairs, sectionals and ottomans. </p> <p>With many of the pieces customers have literally hundreds of combinations to choose from.</p> <p><img src="https://assets.econsultancy.com/images/0007/4017/funkysofa.jpg" alt="" width="706" height="280"></p> tag:econsultancy.com,2008:BlogPost/67500 2016-02-10T11:14:44+00:00 2016-02-10T11:14:44+00:00 What is digital product management? Ben Davis <h3>What is digital product management?</h3> <p><strong>A business <em>without</em> digital product managers:</strong></p> <p>Defined by waterfall processes, the I.T. department is isolated somewhere behind a locked door.</p> <p>Speed and safety of I.T. development is prioritised. These metrics are considered proportional to efficiency (and ultimately revenue) with less regard to customer satisfaction once requirements documents have been created.</p> <p>Application managers exist, if not in title, then in function. For example, there may be one developer who knows a customised <a href="https://econsultancy.com/blog/67153-is-it-time-to-trade-your-cms-for-a-static-website-generator">CMS</a> or <a href="https://econsultancy.com/reports/ecommerce-platforms-buyers-guide">ecommerce platform</a> better than anyone else.</p> <p>This means that a lot of important decisions are taken by an employee that isn't incentivised to improve customer experience. That's almost expediency in the eyes of some product management zealots.</p> <blockquote class="twitter-tweet"> <p lang="en" dir="ltr">"what the user wanted"... an illustrated <a href="https://twitter.com/hashtag/usability?src=hash">#usability</a> perspective on design/consumer research <a href="https://twitter.com/hashtag/mr?src=hash">#mr</a> <a href="http://t.co/IteNx8hE">pic.twitter.com/IteNx8hE</a></p> — Amy Santee (@amysantee) <a href="https://twitter.com/amysantee/status/193429307153068033">April 20, 2012</a> </blockquote> <p><strong>A business <em>with</em> digital product managers:</strong> </p> <p>Teams are held accountable for understanding customer needs and improving products or experiences to suit.</p> <p>Product management teams focus on creating minimum viable products (MVPs) quickly and then iterating ahead of full release.</p> <p>The development environment must facilitate product managers' involvement, individuals who should have both business and tech nous.</p> <h3>How is it implemented? </h3> <p><strong>1. Define your digital products</strong></p> <p>Businesses need to define their digital products. For a bank this could be a mobile banking app, a deposit machine in branch, the website homepage etc.</p> <p>These products are often identified through distinct customer need (banking on the go, avoiding queues) or business need (reducing call centre dependency, or speeding up service).</p> <p>How will improvement to these digital products be measured? This is another consideration - perhaps an increase in <a href="https://econsultancy.com/blog/67473-seven-conversion-rate-optimization-trends-to-take-advantage-of-in-2016">conversion rate</a>, a change in customer banking habits etc.</p> <p><em>Econsultancy's blog could be defined as a digital product</em></p> <p><img src="https://assets.econsultancy.com/images/0007/1608/Screen_Shot_2016-02-09_at_15.27.06.png" alt="econ blog" width="615"></p> <p><strong>2. Pair product managers with parts of the customer experience</strong></p> <p>This could mean assigning a product manager to money transfers within the banking app, for example.</p> <p>Product managers here have freedom to both iterate existing functionality, as well as conducting more fundamental changes if they're shown to be achievable and valuable.</p> <p>For example, this product manager might recognise that a wholly separate mobile method of transfer would be preferred by users.</p> <p><strong>3. Create and test MVPs</strong></p> <p>End users are involved early on in the <a href="https://econsultancy.com/blog/67341-digital-marketing-incubation-how-to-develop-a-test-learn-culture-2">testing phase</a>, providing feedback on product utility that could provide a counterpoint to the views of internal stakeholders.</p> <p>Businesses transitioning to this style of iteration often begin with a siloed project in a lab environment, demonstrating proof of concept before moving into the broader business. </p> <p><em>Image via Lean Startup</em></p> <p><img src="https://assets.econsultancy.com/images/0007/1612/mvp.jpg" alt="mvp" width="349" height="278"></p> <p><strong>4. Foster developer and manager interaction</strong></p> <p>Frequent two-way interaction between product managers and developers, who are preferably co-located, is the only way to ensure that customer needs are met in the production process.</p> <p>This necessitates developers and managers who understand each others' roles and can therefore approach development in the same way.</p> <p><strong>5. Measure and incentivise performance</strong></p> <p>Conversion rates and direct customer feedback are more important than their preceding business outcomes (such as platform change).</p> <p>That's to say that appropriate customer-focused metrics should be in place to determine the success of any new or improved product.</p> <p>Outcome for the customer is prioritised above clean handovers and untouched specifications. Failure, as we all know, is not necessarily a bad thing, but it should be defined in the right way (and as quickly as possible).</p> <p><img src="https://assets.econsultancy.com/images/0007/1614/incentive.png" alt="incentives" width="600"></p> <h3>Who is a digital product manager?</h3> <p>Digital is maturing quicker than employee skills. That means tech-savvy businessmen and business-savvy techies are still gold dust.</p> <p>Digital product managers can be C-suite in waiting, such should be their grasp of technology, user experience, <a href="https://econsultancy.com/blog/67346-agile-development-what-do-marketers-need-to-know">agile methodology</a>, finance and marketing.</p> <p>Interpersonal skills are also important, given the sprawling nature of a product manager's role (liaising with multiple departments).</p> <h3>Why take this approach?</h3> <p>Failure is faster and more diverse, leading to greater innovation. This ultimately should lead to increased and possibly new revenue streams.</p> <p>Customer loyalty is engendered by a business that is transparently innovating. Brand advocates are further brought into the fold and frustrated customers are heard.</p> <p>An agile environment is also more exciting and empowering for the best and the brightest recruits.</p> <p>For more information on digital transformation, <a href="https://econsultancy.com/training/digital-transformation/">see the Econsultancy digital transformation hub</a>.</p> tag:econsultancy.com,2008:BlogPost/67105 2015-10-29T14:12:50+00:00 2015-10-29T14:12:50+00:00 Knowing what you're not: defining your design principles Ben Davis <h3>GoCardless</h3> <p>At #canvasconf last week, I listened to Tom Petty, Head of UX and Design at GoCardless.</p> <p>Tom detailed how the team at GoCardless went about creating a new product and defining design principles in the process.</p> <h3>Creating a new product</h3> <p>Initially, the company had two products; a Direct Debit payment dashboard for small companies and an API allowing integration with large corporations such as The Guardian and Trip Advisor.</p> <p>The challenge was to cater for those companies that were falling down the gap. These were companies that didn't want full integration but needed more control than the small business product provided.</p> <p>Whilst there was a rationale for developing a new product, the team knew the danger in creating a middle option which might be all things to all people.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/8359/screen_shot_2015-10-25_at_18.17.08-blog-flyer.png" alt="gocardless on mobile" width="300"></p> <h3>People, provocations, principles</h3> <p>In designing this new product, the GoCardless team followed a loose philosophy that Tom termed 'people, provocations, principles'.</p> <p>'People' is about knowing who the customers (merchants) are who will use this new product. Design necessitates deep knowledge of the prospective user and GoCardless needed to know exactly what sort of companies they would be targeting.</p> <p>Provocations (or questions - though sadly this doesn't start with a P) refers to how a company can respond to a customer's needs. Tom discussed the creation of a product roadmap constructed out of customer questions, rather than merely product functions or presumed answers.</p> <p>This roadmap of questions allows for much more focused and relevant product development, as a form of customer problem solving. </p> <h3>Creating principles that can be disagreed with</h3> <p>Design principles should be framed as decisions. They need to be points of view that can be disagreed with.</p> <p>Phrases such as 'keep things simple' do not convey an opinion (who would opt to overcomplicate for the sake of it?) and the GoCardless team took a while to come up with principles they could stand by.</p> <p>Looking at other companies for inspiration, Tom cited Amazon's brand principle of 'investment over profits' as an example of a definite point of view, one that other companies may disagree with or even flip on its head.</p> <p>So, after much trial and error, GoCardless settled on three design principles. Tom highlighted how they have to be memorable (perhaps make them rhyme), otherwise they will be quickly filed away and forgotten, rather than becoming rules to work by.</p> <ul> <li><strong>Small users over all users</strong></li> <ul> <li>Start simple and hide the gnarly stuff. Customers should land at a product aimed for the small business, then can gradually take control of more features.</li> <li>One example of this is the ability to sign up to the service by adding the minimum required information. With this principle, small users are not allenated by a complex product.</li> </ul> <li><strong>Attention over retention</strong></li> <ul> <li>Design to prioritise features that demand attention. Don’t take users down the rabbit hole, give them what they need first and allow these functions to be performed as quickly as possible.</li> </ul> <li><strong>Hammer over the handyman</strong></li> <ul> <li>Focus on doing one thing really well. Be the best at recurring payments, don't diversify into loans, invoicing, analytics, commerce, or become a bank.</li> </ul> </ul> <p><img src="https://assets.econsultancy.com/images/0006/8360/Screen_Shot_2015-10-25_at_18.16.11.png" alt="GoCardless website" width="615"></p> <h3>Organisational culture</h3> <p>This is just a short case study about design principles, but I thought GoCardless' three principles were eloquent enough to provide food for thought for companies in the midst of <a href="https://econsultancy.com/blog/66223-with-a-blank-sheet-what-organisational-structure-would-you-choose-for-marketing-and-digital">organisational change</a>. </p> <p>Celebrating the fact that you can’t please all of the people all of the time is a necessity when defining great digital products for a defined audience.</p> <p>In organisations still failing to compete in digital and wondering how to meet the needs of customers online, creating new design principles may be one vital weapon in the <a href="https://econsultancy.com/blog/67031-chief-customer-officers-ccos-a-fad-or-the-future">Chief Digital Officer</a>'s arsenal.</p> tag:econsultancy.com,2008:BlogPost/67099 2015-10-28T11:57:00+00:00 2015-10-28T11:57:00+00:00 Hive: A startup culture in a corporate behemoth Ben Davis <h3>A startup with a strategic investor</h3> <p>Hive was set up in 2012 to act as a startup classically would. British Gas is effectively the strategic investor, bringing not only cash but a source of distribution.</p> <p>The decision to create an insulated startup-like team was not taken because British Gas was doing anything wrong, rather because of how nascent the connected home idea was.</p> <h3>People, location and 'air cover'</h3> <p>Take a look at the Hive <a href="https://www.hivehome.com/about">About page</a> and you'll get a good impression of the type of project and working practices Hive wanted to embody.</p> <p>70% of the team was recruited externally and previously had startup experience.</p> <p>Tom stressed location was key to attracting the right people, with the most talented product people wanting to work in London.</p> <p>Lean principles and <a href="https://econsultancy.com/blog/64975-the-guardian-s-agile-processes-showcase-digital-best-practice/">agile methodology</a> were both adopted without losing some form of 'docking' or integration back into the mothership of British Gas.</p> <p>'Air cover' was sought from the core business, with appropriate British Gas sponsors giving the project the freedom to proceed.</p> <p>The project's culture, Tom argues, comes from each of these constituent parts and was designed not to compete with other energy companies but with tech giants in silicon valley.</p> <p><img src="https://assets.econsultancy.com/images/0006/8313/Screen_Shot_2015-10-23_at_10.01.41.png" alt="hive offices" width="1050"></p> <h3>Using the strengths of British Gas</h3> <p>Though Hive was a new brand with a new tone of voice, the team was well aware of the benefits of being associated with British Gas.</p> <p>One of the most obvious of these is security - the British public trusts British Gas engineers (Tom even claimed that, not so long ago, mothers were happy to leave their children with an engineer).</p> <h3>Creating a frictionless customer journey</h3> <p>The aim of a frictionless journey is summed up in four steps.</p> <ul> <li> <strong>Choice:</strong> Allowing customers to purchase the system from electrical retailers such as Dixons Carphone.</li> <li> <strong>Installation:</strong> By British Gas trusted engineers.</li> <li> <strong>Use:</strong> Via a beautiful device alongside an award-winning app.</li> <li> <strong>Support:</strong> Via the Hive hub in Glasgow where customer service is delivered in plain English (so good that the NPS is higher for those who have encountered a problem). </li> </ul> <p>The stats from a consumer survey of Hive 1 customers show the product was incredibly successful.</p> <p>70% believed they had saved energy. 98% felt they were in control of their heating. 92% would recommend the product, and 58% used the app every day.</p> <p>That's astounding given that Tom said there was previously a stat in the sector suggesting customers thought about their thermostat for little more than five minutes every year.</p> <h3>Iterating with a religious belief </h3> <p>Hive 2 was the next step, needed to improve on the actual thermostat product to match the experience of the app.</p> <p>The team brought in Yves Behar, an influential designer of products including Jawbone and SodaStream.</p> <p>Yves' opinion was that there are too many screens in our home, so it was vital to avoid a smart thermostat simply appearing to be a tablet stuck to a wall. The thermostat should be familiar as a functional unit.</p> <p>The team created three prototypes. What interested me about the design process was a reliance on customer feedback but within a process where the Hive team remained convinced that one of their three prototypes would be right.</p> <p>This belief had to border on the religious for the product development team to be able to forge ahead with purpose.</p> <h3>Conviction alongside feedback</h3> <p>Creating Hive 2 involved designing journeys by flipping from industrial design to UX whilst understanding that even if you build the best paths possible, the user will always pick another.</p> <p>The design team included specialists in UX, industrial design, energy, procurement and sourcing.</p> <p>The project team was accountable to many consumers whilst believing in the strong leadership of its design head.</p> <p>So, one world class designer worked with a team of product experts, hundreds of engineers and thousands of customers.</p> <p>This ability to take customer feedback very seriously but also rely on design instincts is vital to deal with a new technology where the customer may not always know what they want.</p> <h3>Common user niggles and creating an aesthetic</h3> <p>Solutions to user niggles became a focus, including filing new patents around the battery change process and making the product easier to set up.</p> <p>This was achieved, with 95% of customers setting up the technology correctly first time and achieving a usability score of 78 (with above 70 understood as very good).</p> <p>A partnership with Dulux has led to a range of colour surrounds, to suit each individual. </p> <p>Rather soberingly, the most popular colours in the UK are black, grey and wood effect. Hey, connected thermostats are one thing, but pink connected thermostats...</p> <p><img src="https://assets.econsultancy.com/images/0006/8335/hive_product.png" alt="hive" width="615"></p> <h3>Expanding into the connected home (brings whole new UX challenge)</h3> <p>With 200,000 Hive customers acvross Hive 1 and Hive 2, the team are now releasing<a href="https://www.hivehome.com/new-products"> a new range of products </a>including window and door sensors, a motion sensor, an active plug (with one of its oft-cited possible uses during customer research being the ability to switch off straighteners remotely) and a Hive hub, to run the <a href="https://econsultancy.com/blog/64460-the-home-of-the-future-today-how-smart-is-that/">connected home</a> from and unite these products.</p> <p>The challenge with new products is not about hardware but about changing the UX of a single use app so it can function as a multiuse app, with rules, notifications and more.</p> <p>Hive is currently trialling a honeycomb layout to the app dashboard (see below).</p> <p>If this incubated startup continues to work so well, perhaps British Gas will be the first to crack the connected home market.</p> <p><img src="https://assets.econsultancy.com/images/0006/8336/Screen_Shot_2015-10-23_at_17.24.58.png" alt="hive multiuse" width="615"> </p> tag:econsultancy.com,2008:BlogPost/66946 2015-09-21T10:43:00+01:00 2015-09-21T10:43:00+01:00 Starbucks, Costa & Caffè Nero: how do they build customer loyalty? Ritchie Mehta <p>It’s a booming business for the thousands of coffee stores out there. However there are only three that dominate our high streets and all of them acutely aware of the low barriers to entry and switching costs of consumers, so they do all they can to keep their customers coming back for more.</p> <p>Starbucks, Costa and Caffè Nero all operate some kind of <a href="https://econsultancy.com/blog/66904-do-retailers-really-need-a-customer-loyalty-program">loyalty program</a> to entice you to stay with them but how do consumers really know they are getting the best deal? And furthermore, is there really a relationship between these programs and customer loyalty? Let's take a closer look…</p> <h3>Which coffee chain offers the best 'value for money' loyalty program?</h3> <p>Here is a quick sum up of the top 3 coffee chain programs out there:</p> <table border="0" cellspacing="0" cellpadding="0"> <tbody> <tr> <td nowrap width="65"> <p>Starbucks</p> </td> <td width="340"> <p>Starbucks operates a two tier loyalty program:<br> Green tier: Get one free beverage when you use your Starbucks card to pay 15 times (earning 15 stars)<br> Gold tier: If you earn over 50 stars a year you get Green benefits plus extras e.g. free caffiene shots</p> </td> </tr> <tr> <td nowrap width="65"> <p>Costa</p> </td> <td nowrap width="340"> <p>For every £1 spent in store you get 5 points, each point worth a penny to spend in store anyway you like</p> </td> </tr> <tr> <td nowrap width="65"> <p>Caffè Nero</p> </td> <td nowrap width="340"> <p>Get your tenth coffee free when you buy 9 coffees and collect the stamps on their paper-based loyalty card</p> </td> </tr> </tbody> </table> <p>But which one represents the best value for money? For ease of comparison lets say your regular drink is a medium-sized cappuccino in each of the stores, here is how it breaks down: </p> <table border="0" cellspacing="0" cellpadding="0"> <tbody> <tr> <td width="65"> </td> <td width="71"> <p>Price per coffee</p> </td> <td width="92"> <p>Promotion</p> </td> <td width="92"> <p>Overall cost to get a free equivalent coffee</p> </td> <td width="85"> <p>Average % discount per coffee</p> </td> </tr> <tr> <td width="65"> <p>Starbucks</p> </td> <td width="71"> <p>£2.60</p> </td> <td width="92"> <p>15 Stars to earn a free coffee</p> </td> <td width="92"> <p>£39*</p> </td> <td width="85"> <p>7%</p> </td> </tr> <tr> <td width="65"> <p>Costa</p> </td> <td width="71"> <p>£2.45</p> </td> <td width="92"> <p>£1 = 5 points<br> 1 point = £0.01p</p> </td> <td width="92"> <p>£50</p> </td> <td width="85"> <p>5%</p> </td> </tr> <tr> <td width="65"> <p>Caffè Nero</p> </td> <td width="71"> <p>£2.35</p> </td> <td width="92"> <p>Buy 9 get 1 free</p> </td> <td width="92"> <p>£21.15</p> </td> <td width="85"> <p>11%</p> </td> </tr> <tr> <td colspan="5" width="405"> <p>* Assuming you only purchase one coffee at a time</p> </td> </tr> </tbody> </table> <p>So there you have it, Caffè Nero’s simple stamp based system delivers their customers the best value for money by far. Furthermore, it would appear that its program (if you can call it that) is by far the most straightforward which makes it even more appealing.</p> <p>From your own perspective, would this make you walk those extra few steps into a Caffè Nero (as lets face it there are fewer of them on our high streets) then the others? Well, lets take a look at the numbers…</p> <h3>Is there a relationship between the ‘value for money’ element of a loyalty program and customer loyalty in coffee? </h3> <p>What you may find interesting is that despite Costa’s lowest performing loyalty program on value for money, according to Allegra Strategies it is number one on the high street with 47% market share. </p> <p>This is despite offering less than half the value of the Caffè Nero loyalty program and it does not look to be slowing down either, with Whitbread looking to take on 20% more stores by 2018.</p> <p>Conversely, the same report suggests that Caffè Nero has 13% market share of the coffee business in the UK, while Starbucks has around 27%.</p> <p> So if we take market share as a proxy for repeat purchase, as lets face it the coffee market in the UK is rather saturated, than the ‘value for money’ element of a loyalty program is less important then perhaps other aspects of an offering. (Also see <a href="https://econsultancy.com/blog/66919-four-steps-to-help-build-customer-loyalty-in-retail/">Four Steps to Build Customer Loyalty in Retail</a>).</p> <p>Are there any other factors at play? Well, one can draw one of two conclusions. </p> <p>The first is that a loyalty program does not in isolation lead to greater customer loyalty and that there are a host of factors that drive this. </p> <p>The second, is slightly less damning of loyalty programs, in that the ‘value for money’ aspect of a loyalty program may well be less important in driving repeat purchase then other aspects of the program.</p> <p>For instance, both the Costa and Starbucks programs are able to capture customer data and deploy much greater levels of personalisation in both the offers and communications to their customers. This itself may act as a stronger influencing factor in creating a relationship then simply offering discounts off coffee.</p> <p>We'll let you decide which floats your boat in the morning.   </p> tag:econsultancy.com,2008:BlogPost/66919 2015-09-14T09:25:00+01:00 2015-09-14T09:25:00+01:00 Four steps to help build customer loyalty in retail Ritchie Mehta <p>I’m a regular visitor to the various mainstream coffee chains that sprawl our high streets. While holding a client meeting at one of these establishments, we got talking about the all singing, all dancing Starbucks Rewards program...</p> <p>“I can redeem my points anywhere in the world… they even give me a free coffee on my birthday!” I heard rather enthusiastically.</p> <p>So, I asked, “you must be the biggest Starbucks coffee drinker ever?”. “Nah, I don’t actually like their coffee!”</p> <p>The conversation struck a cord with me as so many organisations constantly churn out offers and rewards as a way to entice customers back through their doors, when surely a more holistic approach should be taken. </p> <p>There is certainly a place for the <a href="https://econsultancy.com/blog/66904-do-retailers-really-need-a-customer-loyalty-program">loyalty program</a> lever but for me it needs to be the icing on the cake rather than the cake itself.</p> <p>It’s simple, if you can get customers to love your brand for what it stands for and what it delivers (earned loyalty), they will only appreciate you more when you give them great offers to spend more time with you (bought loyalty).</p> <p>So to do this, organisations should consider winning ‘earned’ before ‘bought’ loyalty to be sure to create stickier relationships. Here’s a four step guide to doing just that:</p> <p><img src="https://assets.econsultancy.com/images/0006/6995/earned_bought_loyalty-blog-flyer.png" alt="" width="470" height="350"></p> <h3>1) Align your brand and customer’s values</h3> <p>As a foundation, your brand purpose must align and resonate with that of your audience and be demonstrated in everything you do. </p> <p>This will ensure you stay relevant and favoured in the eyes of your customers, leading to an increased emotional connection.</p> <p>Starbucks didn't do itself any favours by being embroiled in the tax avoidance issue that goes against one of their core values to ‘connect with transparency, dignity and respect’. After a massive boycott the brand is still recovering and many customers have not returned to its doors.</p> <p>So to create ‘earned’ loyalty, its important for organisations to reflect on their brand position and determine if it is both clear and truly aligned to their target market. </p> <p>At the end of it, all other activities flow from delivering the brand promise so it’s important to get right.</p> <h3>2) Propositions must meet and exceed customer requirements</h3> <p>The second stage of ‘earned’ loyalty is to ensure your value proposition spot on. It must align to your customer’s wants and needs, otherwise no matter what else you do, they will not come back for more.</p> <p>As an example: on a recent visit to Soho, I walked into a very reasonably priced all-you-can-eat buffet. The quality of the food was terribly disappointing to the point I even got resentful paying the reasonably priced price tag. </p> <p>The real kicker came at the end when I was handed a half-priced voucher for my next visit. Would I ever go back to redeem it? I’ll let you decide.</p> <h3>3) Deliver an exceptional and novel experience</h3> <p>The final stage in the ‘earned’ loyalty category is to deliver an exceptional experience. </p> <p>If you can meet a consumer's wants and needs AND deliver it in a place (digital or physical) that is convenient to them AND in a way that is aligned to their tastes, they will make you a regular thing.</p> <p>I recently had my first experience of immersive theatre at Alice Underground Wonderland (sadly its now finished for the year), where the experience was second to none and exceeded all expectations. </p> <p>It encapsulated the audience, made you anticipate what was around the next corner and took you into its own world for that space in time. </p> <p>I ended up taking another set of friends two weeks later and even paid for the premium tickets the next time around. If only brands could replicate these emotions, clearly in their own way. </p> <h3>4) Giving customers that little bit extra</h3> <p>The final step in building loyalty is to generate ‘bought’ loyalty. </p> <p>This is where you offer incentives, rewards and surprises to encourage repeat purchase and re-visits. </p> <p>There are some great programs out there, my personal favourite being the Nandos loyalty app. It’s simple and hence effective, as you always know how far away you are from your next free chicken. </p> <p>But if I didn't associate with the brand (Cheeky Nandos!), love the food and enjoy the experience, the app would simply not exist on my phone.</p> <p>So all in all, it's a simple equation to building stronger customer loyalty: '3 to 1' - Three steps to building ‘earned’ loyalty and one step to building ‘bought’ loyalty. To me, it should be in that order.   </p> <p><em>You can learn even more about customer experience at our two day <a href="http://bit.ly/1M8uMOA">Festival of Marketing</a> event in November. Book your ticket today and see how you can create a customer-focused culture.</em></p> tag:econsultancy.com,2008:BlogPost/66904 2015-09-08T09:25:00+01:00 2015-09-08T09:25:00+01:00 Do retailers really need a customer loyalty program? Ritchie Mehta <p>I would say we Brits are a discerning bunch, always after a deal or two. I’m as guilty as the next person and decided to make the most of the weekend by finding some killer bargains on <a href="https://econsultancy.com/blog/66504-how-18-retailers-in-central-london-are-integrating-digital-in-store">Oxford Street</a>.</p> <p>Making my way on the tube was the first ordeal as I held up a queue of increasingly angry people as I waded through my wallet, which contained five loyalty cards, till I found my debit card.</p> <p>I couldn’t help but wonder, how often do I use these loyalty cards? Have I actually ever received any rewards? And honestly, do I really care? </p> <p>My journey that day opened my eyes to a number of ways retailers build customer loyalty without the need for cards or points. Here are my five observations: </p> <h3>1) The best deals are ‘Always-on’ </h3> <p>So as I get off at Bond Street I walk to my first port of call, Primark. It seems like everyone on Oxford Street had the same idea as every second person had a Primark bag. “I must join their loyalty program”, I thought to myself. Unfortunately there isn’t one.</p> <p><img src="https://assets.econsultancy.com/images/0006/3476/IMG_4563.JPG" alt="" width="464" height="348"></p> <p>What’s Primark's key to generating customer loyalty? Ask anyone why they keep going back to Primark and they say it’s because they know they will always be offered great value stuff that's in season and of reasonable quality. It’s that simple.</p> <p>So rather then collecting a gazillion points to be eligible for a free gift (that most customers don't redeem anyway), the new mantra in loyalty is to offer customers ‘always-on deals’ by giving them the best value each and every time they interact with you. No doubt they will appreciate it.</p> <h3>2) Make me feel special</h3> <p>I was in need of a coffee so walked into the Pret a Manger at Marble Arch. I always find the staff really inviting and service efficient, so for me Pret is just easy. I order a latte and about to tap my contactless when a smiling face said, “don't worry it’s on the house.” I must admit I got a warm feeling.</p> <p>Pret do not have a loyalty program but empower their staff to give out free coffee to a few lucky customers each day. No clever CRM systems or points, just a human touch. </p> <p>I think sometimes this is exactly what is missing in customer service today. One thing’s for sure if Pret did have a loyalty program I’d be a platinum member.</p> <h3>3) Don't lock me in, convince me to stay</h3> <p>Revived by my caffeine high, I decide to call a friend using my O2 sim-only deal. I love the convenience of getting a bill each month, whilst not feeling like I’m stuck with them for a lifetime (I exaggerate, but it sure feels like that when you really want a new phone).</p> <p>I’ve now had the deal going for four years, I can get out at anytime and perhaps this is exactly the reason I stay. Coupled with the O2 Priority Rewards where I keep receiving offers and freebies, perhaps it’s all about the small things in life that make us feel valued. </p> <h3>4) Give me extra</h3> <p>After a natter, we decide to meet at Five Guys in Covent Garden. Walking into the joint one gets a real sense of energy and enthusiasm from the staff. Also, their simple optional menu makes sure you always get more than you bargained for (literally), as you can have all the frills on your burger for the same price.</p> <p>But the real icing on the cake (or bun) is when they hand over your burger bag filled to the brim with fries. Did I ask for them? No. Am I happy (and a little surprised)? Absolutely. </p> <p>They just gave me something for nothing, and that's something I really valued. A little surprise and delight does not go unnoticed.</p> <h3>5) Look after everyone</h3> <p>I ended my trek to Oxford Street and called it a night by relaxing on my sofa and switching on the box. All I wanted to do was turn on Netflix and watch the new series of Marcos. However, my other half had other ideas. </p> <p>Thank you Netflix for enabling us to watch two different programs using the same subscription. It’s a nice way to add value for the whole family while not trying to grab every penny. It shows you understand how we like to do things and care.</p> <p>I must admit I was not overjoyed that I had to watch Marcos on my iPad (you can see who gets their way in my house). Hey ho! Guess Netflix can’t solve all my problems but I still won’t be leaving its service anytime soon.</p> <p><em>You can learn even more about customer experience at our two day <a href="http://ecly.co/1EmHi7L">Festival of Marketing</a> event in November. Book your ticket today and see how you can create a customer-focused culture.</em></p> tag:econsultancy.com,2008:BlogPost/66702 2015-07-15T14:38:42+01:00 2015-07-15T14:38:42+01:00 How DevOps is changing the business of IT consulting Jacob McMillen <h2>Overview of DevOps</h2> <p>The <a href="http://www.jedi.be/blog/2010/02/12/what-is-this-devops-thing-anyway/" target="_blank">idea of DevOps</a> is relatively new, started by a group of like-minded IT professionals in 2009 in Belgium. It used to be more popularly known as “DevOps Days” in reference to the conferences conducted on the subject. For brevity’s sake and hashtag viability, the term was shortened to DevOps.</p> <p>What DevOps aims to accomplish is enhanced efficiency within software development. It intends to help organizations more quickly produce software products and services, in addition to boosting operations performance.</p> <p>DevOps enables cross-departmental integration with IT operations, connecting functions that have been traditionally separated. It connects software engineering (development), quality assurance or analysis, and technology operations. Moreover, DevOps covers the entire delivery pipeline, rather than limiting itself to a subset of functions or development stages. </p><p>DevOps most notably creates palpable improvements when it comes to product (software) delivery, feature development, quality analysis, and maintenance releases, all of which contribute to improvements in the reliability, security, and deployment cycles of the software products being developed.</p> <p>In terms of software release management, DevOps also creates benefits by standardizing the development environments.</p> <p>Finally, it provides developers with greater control over the development environment by establishing a more application-centered understanding.</p> <h2>A change in perspective</h2> <p>Your IT consulting professionals are typically the same people who make up the groups collectively referred to as “DevOps teams.”</p> <p>These include software engineers, system engineers, system administrators, operations engineers, infrastructure engineers, software developers, operations managers, IT managers, software architects, project managers, web developers, security engineers, QA engineers, platform engineers, security managers, and backend developers.</p> <p>Accordingly, there are easily noticeable changes in IT consulting that can be attributed to DevOps.</p><p>For this discussion, DevOps professionals and IT consultants can be taken to mean the same information technology specialists who provide IT services that benefit businesses. However, the whole point of DevOps is to veer away from the traditions of typical IT consulting.</p> <p>DevOps has <a href="http://devops.com/2015/02/17/comparing-devops-traditional-eight-key-differences/" target="_blank">key differences from traditional IT consulting</a>. Members of DevOps teams work as one integrated unit, rather than separately performing individual functions. Instead of focusing on "getting my job done", every member of the team is focused on getting the project ready for deployment.</p> <p>The perspective change from "my job" to "our project" can result in massive benefits for the business.</p> <h2>Impact of DevOps on IT consulting</h2> <p>The benefits of DevOps can be summarized as follows:</p> <ol> <li>Pay (revenue) differences</li> <li>Team empowerment</li> <li>Tractability in deployment and maintenance</li> <li>Enhanced end product reliability</li> <li>Speedier time-to-market</li> <li>Greater efficiency</li> </ol> <h3>1. Pay (Revenue) Differences</h3> <p>For the most part, DevOps has allowed IT professionals to earn better. Figures gathered in this <a href="https://www.incapsula.com/blog/devops-salary-survey.html" target="_blank">2015 DevOps survey</a> look rather bright for IT professionals thinking of hopping on the DevOps bandwagon.</p> <p>Most DevOps professionals tend to earn better in comparison to the prevailing salaries surveyed by Payscale. DevOps system administrators, for example, earn a median salary of $86,000 compared to the $58,897 average of traditional sysadmins.</p> <p>DevOps web developers and security engineers also have a higher median pay,</p> <p>The median salary for all surveyed DevOps professionals is $105,600.</p> <h3>2. Team empowerment</h3> <p>Another excellent benefit of the DevOps movement is the empowerment of the different IT professionals who work together on a project.</p> <p>This is mostly due to the idea that all members in a DevOps team are allowed to offer input and across all areas of the project.</p> <p>Members are empowered to take ownership of the entire project, rather than being limited to a single set of tasks.</p> <h3>3. Deployment and maintenance tractability</h3> <p>Tractability means the ease with which individuals allow themselves to be managed - how receptive they are to influence and suggestion.</p> <p>Team tractability is a highly coveted benefit enable by DevOps' cross-disciplinary approach.</p> <p>Sysadmins and developers are no longer able to engage in the notorious blame game, where developers accuse sysadmins of creating an unreliable platform, and sysadmins complain that code from the developers is unreliable.</p> <p>With everyone working together at each stage of the process, problems can be solved by the team as they arise.</p> <h3>4. Better reliability</h3> <p>Because of the emphasis on communication, collaboration, integration, and automation, it is only logical to expect a better end product from the work done under the DevOps approach.</p> <p>As highlighted in point #3, since the entire team is working together throughout the development process, the vast majority of problems will be identified and solved by various branches of the team well before launch.</p> <h3>5. Faster time to market</h3> <p>There are convincing claims that DevOps results in faster time to market and continual improvement. The ratio, reportedly, could be at the vicinity of 1:30 (non-DevOps vs DevOps) in terms of deployment.</p> <p>This is because DevOps makes it easier to go from “idea” stage to a working software at the initial project development stage. This benefit allows developers to experiment on what can be done with the project and to continuously introduce incremental improvements.</p> <h3>6. Greater Efficiency</h3> <p>Enhanced efficiency is perhaps the major advantage of DevOps. It makes almost everything faster and leads to less resource wastage. </p> <p>This improved efficiency, in particular, can be observed in how companies no longer have to assign greater priority to stabilizing new features. In a DevOps setup, there is one team that takes responsibility for ensuring stability while creating new features.</p> <p>The team is able to do this efficiently because of the advantages afforded by a shared code base, test-driven techniques, continuous integration, automated deployments, and smaller change sets.</p> <h2><img style="vertical-align: middle;" src="http://i.imgur.com/pFw42L4.jpg" alt=""></h2><p>Is DevOps the future of IT consulting? </p><p>It’s still early to claim that DevOps is the revolution needed in the IT consulting world. However, it is doubtlessly a promising approach businesses should consider adopting.</p><p>While some critics see it as a ploy by northern European sysadmins to establish prominence in their field, at the end of the day, a development approach centered around cooperation and communication is the type of idea that solves longstanding problems in the software and IT consulting industries.</p> <p>Whether you want to adopt the "brand name" or not, when working on a given project, increasing communication and cooperation across all departments involved is, in my opinion, ALWAYS a good idea.</p> <p><em>For more Econsultancy content from Jacob McMillen, check out this <a href="https://www.incapsula.com/load-balancing/high-availability.html" target="_blank">article on website availability</a> or this <a href="https://econsultancy.com/blog/66101-five-mistakes-marketers-make-when-using-social-proof/" target="_blank">post on social proof mistakes</a>.</em></p> tag:econsultancy.com,2008:BlogPost/66086 2015-02-13T09:50:59+00:00 2015-02-13T09:50:59+00:00 Four product marketing reasons why Tinder got really, really big James Carson <p>Tinder is one of the biggest social media phenomenons of the last year. <a href="http://www.forbes.com/sites/stevenbertoni/2014/10/20/tinder-swipes-right-to-revenue-will-add-premium-service-in-november/">1.5bn Tinder profiles are swiped</a> through and there are 15m new matches per day.</p> <p>Instagram and Snapchat have gained most of the hype, but Tinder is soaring in a similar way. Meet anyone under 30 who is single, and they’ve almost certainly tried it.</p> <p>Chances are they’ve been on it in the last month. Actual user numbers and a real $$ valuation are not widely available; but it’s safe to say, they’re big.</p> <p>So what opportunities does a network like Tinder throw up to marketers? The truth is, not many.</p> <p>In April 2014 Fiona Salmon did a great job explaining how <a href="https://econsultancy.com/blog/64679-covert-native-ad-campaigns-can-catfish-consumers">native advertising on the network throws up ethical concerns</a>. As yet, the network also offers no advertising solutions.</p> <p>Even if it did, the options would be very limited to brands related to under 30s entertainment. But aside from the lack of advertising options, looking into the trends surrounding Tinder’s success does make for some intriguing reading.</p> <p>If you are looking to build an app or other online service<strong> there have been some clever product marketing plays that enabled Tinder’s incredible success </strong>- these should be taken seriously. </p> <p><strong> </strong></p> <p><img src="http://upload.wikimedia.org/wikipedia/en/archive/d/d5/20140906050022!Tinder_logo.png" alt="" width="390" height="156"></p> <h2>1. It's a collection of already existing services</h2> <p>Tinder really consists of three core services that existed long before it did. The use of these services is not particularly original, but <em>blending them together is.</em></p> <p>Technically it took existing user behaviours and melded them into one app.</p> <ul> <li> <strong>Hot or Not:</strong> This website was launched in 2000. It allowed you to rate users out of 10 according to how hot you thought they were. Tinder takes this concept and removes the rating system to be literally ‘Hot’ (swipe right) or ‘Not’ (swipe left). It is a simplification of this service but there is a clear similarity.</li> <li> <strong>Whatsapp:</strong> Text messaging has taken a nosedive for millenials and Tinder offers a near identical interface to its usurper. In one-on-one chats, there is no discernible difference between Tinder and Whatsapp.</li> <li> <strong>Mobile Location Services:</strong> Knowing whether another device is nearby is not a new technology. It’s been in development from 1990, with patented services arriving in the early 2000s. Tinder uses location services to find other users in a certain area. Tinder effectively ‘stole’ this entire concept from its precursor <a href="http://en.wikipedia.org/wiki/Grindr">Grindr</a>.</li> </ul> <p>A fourth key service ‘Moments’ is a clear steal from Snapchat. Launched in 2014, this service is barely used, but allows users to upload moments that are available for their matches to view within a 24 hour period.</p> <h2>2. It addressed market-wide user experience problems</h2> <p>While some of Tinder’s appeal is based on already existing technology, there was already a number of user experience issues in the market that it entered into.</p> <p>Different problems occurred according to gender. For many men, large numbers of messages would need to be sent before getting a response – which would be time consuming.</p> <p>For particularly attractive women, they’d need to read lots of messages and decide which ones to respond to – again time consuming.</p> <p>Obviously, these user experience problems are extremes, and there would be exceptions to these, but they were problems that would put many initial users off.</p> <p>Tinder addresses this issue by removing the first message opener altogether. Instead, it relies on matching with the look of a person. While considerable time may be spent swiping through profiles, it takes significantly less thought than sending a message.</p> <h2>3. Its success was enabled by advances in mobile technology <em>and </em>subsequent changes in behaviour</h2> <p>2014 was apparently ‘the year of mobile’ we’ve been waiting for (just search ‘year of mobile’ on Google). Internet traffic from mobile phones has now overtaken that from desktop. This is a crucial factor in the app’s success.</p> <p>It has also been reliant on the explosion of smartphone powered photography, notably through Instagram, and the subsequent increases in young people taking selfies and holiday shots on their phones.</p> <p>Mobile phones are regularly used in periods of casual downtime. Many people now sit around in front of the TV, Tindering away hoping for their next match. Making the app incredibly easy to use, while offering the potential of a high prize has helped its addictiveness.</p> <p>The swipe left / swipe right mechanism is the primary use of the app; there is no login and it requires very little thought to use – just a reaction to a picture. Compare this to a dating website, where you need to login, browse, click through images, compose a message, send and then check for a response. Tinder has removed this entire process.</p> <p><img src="http://infospace.ischool.syr.edu/files/2013/01/Tinder-Featured-IMG.jpg" alt="" width="810" height="480"></p> <h2>4. It's market disruptive</h2> <p>As yet, Tinder doesn’t have a clear business model; it’s still focused on building users. But like most startups (although I’d argue that Tinder isn’t really a true startup), it has been extremely disruptive to the online dating market.</p> <p>It’s abandoned subscriptions altogether – very few successful sites have done this previously. Currently, it is an entirely ad free experience that you don’t have to pay to use. Contrastingly on Match.com (owned by the same company), users need to pay around £30 a month for subscription.</p> <p>Tinder completely undercut a large part of the existing online dating market. Online dating websites will need to transfer their existing (desktop) user experiences and subscription models to mobile to compete. It’s not a 'mobile first' way of thinking, and that’s why Tinder has been able to usurp them.</p> <h2>Conclusion</h2> <p>Scratching below the surface we can see that Tinder is really a collection of other services, and therefore nothing particularly new. It then simply takes advantage existing user experience problems and behaviours driven by advances in smartphone technology.</p> <p>The factors in its explosive growth are something that anyone who wants to develop an app and a user base can learn from.</p> tag:econsultancy.com,2008:BlogPost/65919 2014-12-22T12:12:40+00:00 2014-12-22T12:12:40+00:00 Leaping towards localisation: Worldwide sales in 2014 Christian Arno <p>I’m a big believer in learning from the market, in order to be best-placed to deliver according to its demands.</p> <p>For me and my business, the trends that have been of particular interest include:</p> <ul> <li>The rise in global tourism and “authentic” holidaymaking.</li> <li>Wearable technology.</li> <li>Mobile technology.</li> <li>API usage and the importance of localisation.</li> </ul> <p>I recently had a very pleasant Sunday morning reading through Euromonitor’s latest report on trends and predictions for the tourism industry, and how some people are now taking localisation to a whole new level.</p> <h3>Going “glocal”</h3> <p>While I strongly advocate the importance of local culture and adapting to it, it seems that consumers now want to get really “local” on their holidays around the world.</p> <p>The <a href="https://econsultancy.com/blog/65149-nine-user-experience-lessons-travel-sites-can-learn-from-airbnb/">rise of Airbnb</a> is one obvious example of this, but there has also been significant interest in travellers choosing to take their meals in private homes, hosted by regular families in regular communities.</p> <p><img src="https://assets.econsultancy.com/images/0005/7712/Screen_Shot_2014-12-22_at_11.45.35.png" alt="" width="1469" height="597"></p> <p>With the help of various websites and apps, holidaymakers looking for more authentic local culture can be paired with willing hosts who can provide cooking lessons and meals, and afterwards, meal visitors can review their hosts in terms of food quality, venue and cleanliness.</p> <h3>Integrating technology</h3> <p>To me, this signals advancements in both the leisure industry and in the technology industry, in being able to provide localised and fit-for-purpose software and devices to meet consumer needs.</p> <p>The increased popularity of sites such as Airbnb has paved the way for new apps which have been built to respond to a demand from the '<a href="https://econsultancy.com/blog/65876-how-the-sharing-economy-will-develop-in-2015/">sharing economy</a>'. </p> <p>Indeed, being into my gadgets, I’m really excited about the new wave of wearable technology we can expect to see on the market next year.</p> <p>Some pieces are designed specifically with the traveller in mind (ever considered that your watch could also be your hotel room key?), while developments like <a href="https://econsultancy.com/blog/63292-what-we-learned-from-trying-google-glass/">Google Glass</a> and the Apple Watch have been on the cards for some time.</p> <p>However, that’s not to overlook the impact of and developments in mobile technology of course, as often the two can go hand-in hand.</p> <h3>Mobile madness</h3> <p>What interested me the most about the sales reports produced relating to <a href="https://econsultancy.com/blog/65847-all-the-stats-you-need-from-black-friday-cyber-monday-2014/">Black Friday and Cyber Monday</a> this year was the rise of purchases made through mobile devices.</p> <p>Depending on whose figures you look at, proportions of all transactions made via mobiles vary from 20-40% (check the <a href="https://econsultancy.com/reports/internet-statistics-compendium/">Econsultancy Internet Statistics Compendium</a> for up-to-date figures).</p> <p>That’s a staggering amount, when to think not so long ago most of us barely had access to the internet on our phones.</p> <p>In order to facilitate many of these transactions APIs are now absolutely commonplace. But the sites that are most successful are those that are able to localise themselves according to their market, including accurate and relevant translations.</p> <p>Instant translation for instant messages and cultural empathy in communication are vital to connecting with foreign markets.</p> <p>So while globalisation may have been last year’s buzzword, we think localisation is what’s going to stick around.</p> <p><em><strong>For more on this topic, read our posts on <a href="https://econsultancy.com/blog/64260-website-localisation-three-examples-of-best-practice/">best practices for website localisation</a> and <a href="https://econsultancy.com/blog/64438-the-importance-of-data-personalisation-and-localisation/">the importance of data personalisation and localisation</a>.</strong></em></p>