Voices: the CMB Blog

How many of you are always looking for another minute in the day? Or perhaps some of you want something new, but don’t have time to get to a store? And how many others of you just simply hate going to brick and mortar stores? Stitch Fix, an online personal shopping stylist, is a service in which you set up a profile and pay a $20 styling fee to have five items shipped to your door. The styling fee is applied to the items you keep, and anything you don’t want has to be sent back within three days (in the pre-paid postage package provided). The service appeals to those busy women needing convenience. 

I ordered my first “fix” last December and loved it. Like the 70% of customers, I returned for a second time. Not only is this service convenient (after setting up your profile, you literally click a button to order your next fix and select a date), but it offers fairly reasonable prices. I get excited every time Stitch Fix sends me a box, and that excitement quickly accelerates or disappears after I see what’s inside. While I loved every piece in my first fix, I’ve since had mixed results, loving and hating certain pieces.

Since launching in 2011, Stitch Fix has done several things right as it continues to build its brand and enhance the customer experience. Here are a few:

1. Knowing the target audience.  

Stitch Fix does this well. Even though the company states that its customers range from teenagers to senior citizens, it realizes that busy women in their late twenties to thirties are its primary audience. This is why convenience is at the company’s core. For busy women, the experience needs to be quick, easy, and stress-free, and Stitch Fix has been able to do just that. The company is also appealing to those women who take fashion risks, dislike brick and mortar shopping, look for the latest and greatest trends, and are perhaps less price sensitive than others. 

2. Leveraging word of mouth and building advocates.  

An integral part of this service is its referral code system. The referral codes allow customers to earn $25 toward another fix if a friend uses the referral code for her first fix. I have seen countless friends post about Stitch Fix online. Even I have told some friends about the service—especially when I receive a compliment on one of my Stitch Fix pieces—so it doesn’t surprise me that word of mouth referrals account for 95% of Stitch Fix’s new customers.

3. Listening customers and making adjustments.

Several months ago, Stich Fix began to get a lot of publicity. Thus, demand increased and wait times became significantly longer. The company quickly realized that this resulted in a not-so-positive customer experience, so it expanded its team of stylists and shipment centers, which ultimately reduced wait times. Stitch Fix’s goal is to provide the best possible “fix” for each customer, so it continues to encourage customers to communicate through a variety of ways such as writing notes to stylists, setting up a Pinterest board to show pieces you like, and sending specific feedback on the clothing pieces you receive.

It’s not difficult to see that Stitch Fix has no shortage of data to analyze or algorithms to apply when determining which pieces customers will enjoy, but it doesn’t rely solely on the data. It takes the data and combines it with the expertise of a stylist. In the market research world, I see this as the delicate blend of art and science.

It’s been a few months since I’ve gotten a fix, and with the season change, it’s about time I click that button to order my next one! 

Amy is an Account Director and a mother of two small kids, which makes her an ideal target for this service. She’s willing to give her Stitch Fix referral code to anyone who wants to try it.

New Webinar: The New Hotel Path to Purchase: The Mobile, Social, and Online Journey – As part of CMB’s Consumer Pulse program, we asked 2,000 leisure travelers to share their journey from awareness to booking. This webinar will give insight into the role of mobile, apps, customer reviews, and social media. 

Please join CMB's Amy Modini and UPMC's Jim Villella today at 12:30pm ET for our latest webinar: Using discrete choice to better position your brand in a complex changing market

Is your industry evolving?  In this webinar you'll learn how UPMC and CMB applied a discrete choice methodology, accounting for various factors to estimate shifting consumer preferences, make key product development and marketing strategy decisions, and ultimately position UPMC for success.

The health insurance industry faces an urgent need to prepare for a new competitive market introduced by healthcare reform. UPMC recognized the opportunity to gain competitive strength in the market through innovation and new product development. However, the research supporting these decisions would need to account for a wide range of market changes and influences. To apply a trade-off exercise UPMC needed to address many challenges, including:

• New shopping and purchase channels

• Controlling the effect of discounts and subsidies on price

• Introduction of entirely new consumer segments for whom purchase behavior is unknown

• Product optimization for multi-tier offerings

Register here

Did you miss one? All of our webinars are available here

What do Crayola, Amazon, Cheerios, Apple, and Subway have in common?

Over the years they’ve each been named one of America’s most loved brands. Of course there are lots of strong brands (nearly as many as there are “most loved brands” lists) but what is it that makes those brands so strong? No one will deny the importance of the brand name, positioning, or communications, but what these beloved brands have in common is how they deliver their brand experience.When M3 Insurance, Wisconsin’s largest privately held provider of commercial insurance, decided they wanted to strengthen their brand position, they had a few options. One common approach is to invest time and money into a brand’s value proposition and the brand promises they’re making to their customers. A company that takes this approach will spend a lot of time building enthusiasm and energy around a brand position, both internally and externally.  They might have banners, posters, and many companywide meetings to communicate the brand to employees.

There’s a lot of good stuff in this traditional approach, but our experience tells us that it rarely, if ever, goes far enough. Brands that stand out are able to find ways that empower their employees to make decisions that support the brand.  They’re able to articulate how employees can/should act to deliver on the brand promises and benefits—they use each interaction with their customers as a chance to deliver brand value—something even the best company-wide meetings can’t inspire alone.

With M3, our approach was both practical and comprehensive. At center, was the need to ensure customers’ experience aligned with M3’s brand promise. Guided by that core principle we developed a plan to determine how (customer facing) employees should behave to deliver the brand promise. Want to learn how we did it? Join M3’s Traci Mandell and me this Thursday to learn a new approach to developing and measuring truly brand-building customer experiences.

Click here to register.

Posted by Amy Modini. Amy is Account Director for CMB’s Healthcare and Insurance Practice, when she gets the time she loves going to the beach with her two kids.

Along with millions of Americans-patients,doctors,lawyers and, politicians-health insurers also waited with bated breath for last week's Supreme Court’s ruling on health reform. Now that the Supreme Court has upheld the basic provisions of the law, health insurers face the challenge of understanding how traditional markets will be impacted by the individual mandate and implementation of health insurance exchanges.  

Even with the ruling, there is still much that remains unknown about the law’s impact, and significant uncertainty about how the law will be enforced in each state.  But there are still critical questions insurers must consider now as they adapt to a new era in health reform, including:

• How will this ruling and the establishment of exchanges impact company revenue and profitability?  Are there ways to take advantage of this ruling and increase company margins and revenues?

• How do we compete effectively in an open exchange?  If price is the key criteria to consumer decision making, is there a way to minimize its influence and yet be successful?

• Is there a need to re-examine the existing client base beyond the traditional demographics? Will an alternate classification help create a competitive advantage?

• How do we move beyond the traditional employer sponsored channel?  How can we take advantage of technological shifts?

• How relevant is the present communication strategy? Is there an opportunity to approach the future in a new, cohesive way that complements the product and distribution strategy?

Addressing these questions and mitigating the coming challenges will not be easy; surviving and flourishing in a changing market requires a truly new and innovative approach. We believe insurers must:

• Reconsider how they approach product development – the insurers who will be successful in this new reality will be those who are able and willing to stretch boundaries of what insurance products look like to meet the needs of the customers, including offering supplemental insurance, wellness programs, incentives and monetary gains for meeting health goals, etc.

• Go beyond traditional ways of looking at the market – motivations, attitudes, goals, and behaviors will become as, if not more, important to understanding and effectively messaging to insurance customers. Alternate classification of consumers could help insurance companies underwrite consumers in a more effective and efficient manner.  This could be especially advantageous for smaller insurance companies that cannot compete solely on price; perhaps it is time to start looking at a niche strategy. For a more detailed look at alternative market segmentation for health insurance, read our white paper: A New Approach to Segmentation for the Changing Insurance Industry.

• Embrace the leaps in technology – insurers must explore the possibility of reaching consumers directly (internet, smartphone, etc.), and simplifying the purchasing process.  A simple product lineup with an easy buying process can go a long way in increasing an insurer’s favorability rating.

• Consider a new messaging strategy – the health industry’s transition is a great time to consider resetting the existing image. Great products and great service need great messaging.  What are the goals people are trying to achieve? What is it that truly motivates them? What is it that truly sets us apart and does it add value to our customers’ lives? Is there a need to have specific messages to specific groups of consumers? Think about the answers to these questions. Insurers in the end must be able to convince consumers that they are partners in this journey and are mutually dependent on each other’s success.

Amidst all the uncertainty insurers are facing, we believe that to mitigate the uncertainties of the reform landscape, insurers will have to go back to the drawing board, rethink how they look at the market, engage in product development and address the fundamental goals of their customers. Insurers must recognize and leverage core capabilities that others cannot replicate. Competitive advantages stem from not one but from a series of strategic decisions. The correct mix of product, distribution, message and market coupled with inherent operational strengths (e.g., knowledge of a local market, ability to underwrite at low costs,  relationships with existing customers) can set insurers apart from competition and pave the way to long term success.

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice, when she gets the time she loves going to the beach with her two kids.

I heard great things about the Shopper Insights conference in Chicago a few weeks ago. While I couldn’t attend, others from CMB said the conference had a great vibe, and was filled with excitement and information about the latest trends in the shopping experience. One of the major takeaways was that the combination of customers’ shopping preferences and new technologies continues to drive change in the retail shopping experience.  We’ve seen this first hand in our Consumer Pulse detailing how smartphones are changing the retail experience.

Appropriately enough, and just in time for the conference in Chicago, I read an article in Marketing Daily about Walgreens new “Pick Up Today” service rolling out in Chicago. We have seen this multichannel trend in other retailers like Wal-Mart and Best Buy and at many grocery stores, but this is the first I have seen for a pharmacy. This really caught my eye as my focus is on the healthcare industry and we recently looked at consumer digital communications trends in the healthcare market.

Walgreens is timing things right - our research shows one-third of consumers are already communicating with their pharmacy digitally (through websites, email, portals, or mobile apps). And it’s not just the young, 36% of those over the age of 50 say they’re communicating with their pharmacy digitally. For now most are simply refilling a prescription or asking a question, but this is another opportunity for a customer touch point. While 31% of consumers say they are currently communicating digitally with their pharmacy, 76% say they expect to communicate digitally with their pharmacy in the future.  

With only 16% of consumers saying they would never communicate digitally with their pharmacy, health insurer, or provider, the trend is clear.  Consumers have certain expectations with regard to digital communications based on what they’ve done in other industries.  It seems like there is a lot of potential here for pharmacies and other healthcare companies (e.g., insurers, providers) and security is really not an issue for consumers even with topics such as prescription drugs and health-related issues. 

So I ask those healthcare companies out there….are you prepared for what consumers expect to be able to do digitally in the future?

 

Download the CMB Consumer Pulse report sharing the consumers' perspective around digital communications with their healthcare providers. Download the report.

 

 

 

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice and enjoys spending time at the beach and trying to keep up with her almost two year old son.