Epiphany Marketing's Strategic Marketing Blog

Today I walked into a local Starbucks and was greeted by a prominently-placed offer for the new Starbucks Gold card. You probably know by now that I’m a Starbucks regular. But I’ll admit, I’ve spent a lot less time (and yes, money) in Starbucks locations in recent history.

A quick scan of my unread e-mail shows that they sent me something about this card a month ago. I missed that message. No big surprise, since e-mail has been a background process for me with a few minor exceptions in recent weeks.

Here’s the quick skinny on the card: $25 annual membership, 10% off (nearly) all purchases, sneak peeks and surprise offers via e-mail and postal mail. On top of that, you get a free drink (anything you can dream up) when you buy the card in-store, a free drink on your birthday (evidently an old-school card arrives snail-mail-style), and a very classy exclusive-looking card ensconced in a booklet with free “guest” offers you can give to friends. One added bonus: a gorgeous high-usability “private” website for members of the Starbucks card where you can manage your account and benefits, including up to 2 hours of free wi-fi at AT&T hotspots within company-owned stores.

Lessons for Businesses Working to Beat the Recession

The introduction of this loyalty program serves up a number of great takeaways for any business tackling the challenges in this economy. Here are a few:

Listen to Your Customers

Starbucks started by bringing back Howard Schultz, who is almost single-handedly responsible for creating the famous Starbucks experience. His first move? Start listening.

The company has engaged in any number of efforts to solicit and obtain feedback from its customer base to determine where it had missed the mark. The bottom line? It’s done a great job of listening.

Give a Little

Customers wanted free wi-fi (something the company had famously sworn off forever). The solution? It’s available for the company’s loyal customers only, and within reasonable limits. Others may continue to pay, thank you very much. Customers wanted free flavoring syrups and other little bonuses to help counteract the escalating prices of their addictions. Again: available for customers willing to use a prepaid rewards card.

These and other relatively low-cost accommodations will pay off handsomely for the company when given to those of its customers willing to give up a little bit of information (the rewards cards are certainly being tracked, more so when registered online).

Let Your Biggest Fans Self-Identify

Another important facet of this process is that those customers who felt snubbed as the company went through changes resulting from rapid growth were given an opportunity to identify themselves and sound off. The result? The company has elegantly reached out to them and strengthened its relationship with them. These are now the people who are receiving Starbucks’ most frequent e-mail communications. Remember: this is a very high ROI marketing medium.

Be Creative

Listening to your customers can be a risky business. Taken at face value, raw feedback and suggestions from customers — especially ones you may have injured — may not be directly actionable. They’ll ask for things you may not be capable of delivering. (And, your feelings may get hurt — especially if you’re a small business.)

Starbucks’ promotion belies a lot of intentional effort on their part to hear what was behind the complaints and the feedback they got. They worked to create a viable solution that capitalized on their own need to market to their customer base and to give where they were able to give while still delivering great value.

We all know it costs a lot less to keep existing customers happy than it does to acquire new ones. So, Starbucks used some of its marketing budget on discounts to loyal customers.

At the same time, charging a $25 annual fee for the Gold card created a great income stream while filtering out customers who don’t spend enough in the stores to justify the purchase. For me, between my occasional cappuccinos, the beans I go out of my way to purchase for my home brewing setup (burr grinder & french press), occasional entertaining at Starbucks locations, and the days like today where I want someplace different to work, the purchase was a no-brainer. It will pay for itself in short order.

Can you find creative ways to reward your loyal customers? Absolutely. And in times like these when your customers are vulnerable to being picked off by low-priced competition or by other economic factors, now’s the time to nurture those relationships like never before. But do yourself a favor: start by asking what they want and need. Customers who feel neglected are the first ones to go.

Personally, I’m feeling a bit less neglected by Starbucks. Now if only they’d bring back the almond syrup.

Now It’s Your Turn

What creative ideas have you seen (or used!) to reward loyal customers on a budget?

Use the comment box below to sound off!

Yesterday, we talked about focusing on your customers. I’ll be the first to admit that without intentional effort, it’s easy to begin to drift away from listening closely to them. But in business, this can be a costly mistake – even when times are good and business is strong. In those times, missing out on subtle cues from your customers can cause you to miss the opportunities to serve them that you’re leaving on the table.
In the 21^st century, however, we have some amazing new tools for listening to what customers want. If you have a website, for example, you should be able to monitor a variety of statistical information that lends remarkable insight into what your customer base is looking for and, in fact, how close to the mark you’re getting.

Visits

For example, which pages on your website are getting visited? Where is the traffic coming from. If your website is strategically set up (in other words, it doesn’t just “look” good), you’ll have different “pages” of content that focus on various product or service offerings. Websites that are set up according to the methods that I use are getting large percentages of their traffic from search engines. This means that traffic coming in to the site is arriving because our content is attracting them to the particular pages they are visiting. By evaluating traffic data to your site, you can see which offerings are doing all that attracting.

Search Terms

Your website statistical information should also tell you exactly someone typed into Google (for example) to cause them to arrive at your site. This helps you in a couple of important ways. First, it tells you if you’re attracting the folks you want to attract. If your website talks about auto repair in Indianapolis, and you’re getting traffic for the Indy 500, then you need to re-evaluate your content (or if better yet: sell ads!). If the search terms line up with what you have to offer, then the second thing those terms are telling you – very specifically – is what your customers are asking for. If you evaluate this data over a meaningful period of time, you can check your product and/or service offerings and see if you should consider doing some repackaging or some new promotions.

What I’m describing in today’s content is really the tip of the iceberg. But, this is the type of strategic information that most companies who have invested in the web have not been trained how to use. I hope you find it useful to you.

Yesterday, we talked about listening to your customers to pay attention to the “why” behind their purchases. Today, we’re focusing more on the “who.” It probably goes without saying that another critical component in getting to know your customers and clients is that you gather as much demographic and psychographic information about them as possible.

If you’re a larger company or if you serve multiple market segments, then you need to compile this data for each of your major product or service offerings. Look at factors such as whether they are businesses or individuals, single or multiple decision-makers, one-time or recurring purchasers, their age, gender, location, background, likes and dislikes, etc. My clients and students use a 16-point questionnaire as a starting point to build a profile of their typical buyer.

The main goal for this is that when you’re working to craft a message that will impact your customers (or future customers) meaningfully, you must be intentional about who you’re “talking” to in your marketing. Your customers will ignore (read: not take action on) your messages that they don’t connect with personally. This seems obvious, but for some reason we tend to get temporarily stupid when we get to this point. Many a potentially great marketing effort has been stymied when the intended audience is left out of the equation. We end up with efforts that are focused on us and not on them – in more ways than one.

I say it often: you are not your customer. I frequently have my clients and students find a photograph that represents their ideal customer, and hang it on the wall. Then we have them craft everything as if it were intended for that one person.

Take some time to look back at your previous marketing efforts. Be honest with yourself and ask yourself how narrowly focused you’ve been on your ideal customer. Notice any trends?

Tomorrow: why it’s so easy to focus on your customer in the 21^st century. Don’t miss it!

So far this week, we’ve focused on you and your identity as a business. Now it’s time to do something every bit as critical and just as important, if not more so: focus on your customer.

Something that continues to amaze me is how easy (and common) it is for businesses to lose touch with their customers and clients. Just as you must know your own identity, you must also get clear on the identity of your customer. This is both harder and easier than it sounds. Customers are diverse, which is why it seems to be a daunting task to keep in touch with who they are. That being said, it is critical to look for and discover the common factors in your customers that are keys to the big question: why are they buying from you?

One of the easiest – and most often overlooked – means of getting to that answer is to very simply ask the question. When was the last time you got a list of some of your best customers and called to ask them, out of the clear blue sky, “Why did you buy?”

Let me guarantee you something. If it’s been a while since you’ve done something like this, you may have some ideas about what they’ll say, but the answers will surprise you. You will learn something. And what you learn will be important.

The fact is, we tend to give lip service to the idea of listening to our customers. Listening to and getting to know them is something that occurs only deliberately and with focused, intentional effort. It’s a lot like a marriage. If it’s going to last, it’s going to take work. Sometimes it’s easier to let customers slip away due to neglect than it is to face the painful fact that they may tell you something that you don’t want to hear. I don’t know about you, but I’d rather hear that thing I don’t want to hear because I asked than by letting them speak with their dollars.

I may have to give up my pet project that is missing the mark. But, when there’s a good match between my identity (which I’m hopefully now clear on) and what the customers are begging for, shouldn’t that be my pet project anyway?

More on this subject next time…

In Part 1, we talked about getting clear on your identity. Knowing who you are is absolutely fundamental to marketing – no matter what business you’re in. So… what business are you really in?

The Starbucks example is a fun one. They definitely sell coffee. They make a variety of beverages. Legal addictive stimulants are in virtually every beverage they make (does anyone really buy decaf?). And they truly create an experience designed to bring pleasure to the senses… to truly entertain. Of course, this is the factor that adds the most value to the commodity they sell and… yes, it’s why people pay more than they have to pay every single day. Starbucks customers are not buying just a commodity. Are yours?

Given that they could key off of any of those options (there isn’t a “wrong” one in the list), do you see the far-reaching implications of their choice? That simple, critical decision will determine virtually everything about the marketing decisions they make. And yet, simple as it is, when you’re working on this for your own business, this step can be one of the most difficult. Why? Because most of us are dealing with some degree of fuzziness about our identity.

If you are fuzzy about your identity… how can your customers and future customers possibly be clear that you are the right choice to meet their needs? Fuzzy logic may be great in mathematics, but in marketing it’s deadly. It’s the difference between nailing the bullseye and missing the target entirely.

Don’t make another marketing decision until you settle this essential question. You’ll get your best results on this work when you pair up with someone outside your business who can serve as a “sounding board.” As my clients and trainees have all heard me say, you can’t read the label from inside the bottle.

Tomorrow: who are your customers?

In my work with clients over the years, one thing I’ve observed is that most marketing mistakes made by businesses both small and large come from a fundamentally poor understanding of the real identity of the business. If you don’t know who you are, how can you properly introduce yourself to your future customers? In truth, how can you have any real clear idea about who your future customers are if you aren’t crystal clear on who you are? It’s an extension of a personal identity crisis that gets carried over into the business world, and it’s much more common than I ever would have imagined had I not observed it first-hand again and again.

To illustrate this phenomenon, I’ll let you in on one of the processes that I take nearly every client through to help them better understand who they are. It’s actually a very simple process, but is typically overlooked. It begins by asking the very simple question:

What is your true product or service?

Before you respond with the most obvious answer, let me ask it a different way. What business are you really in?

Most companies (and this is particularly true of small businesses) define themselves too specifically and do not think about the answer behind their answer.

To illustrate this, let’s use a well-known company as an example. Starbucks roasts coffee beans purchased from growers all over the world and sells them primarily by making drinks out of them in their local retail stores. What business is Starbucks in?

a. Coffee
b. Beverages
c. Legal Addictive Stimulants
d. Entertainment

Give it some thought. We’ll pick this thought up in Part 2…