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Julia Walker

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Personalization, Privacy and the Creep Factor

Posted by Julia Walker

Wed, Jul 25, 2018

online shopping

You’ve seen it before: a pair of shoes that follow you all the way from Zappos.com to Facebook, or even creepier, when you have a conversation about Patagonia and suddenly, Instagram serves you an ad for their latest down jacket. Today’s marketers don’t have to guess where to place their ads anymore. Instead, they track online behavior to tailor ads, offers, products, and experiences to the specific consumer.

Leveraging online consumer behavioral data for personalization is now a standard marketing strategy, but what are the implications for brands and consumers?

Personalization drives consumer behavior. In fact, 80% of people are more likely to do business with a company if it offers them a personalized experience. Amazon revolutionized personalization when they rolled out their product recommendation algorithm—a feature some attribute to their huge sales increase (29% in the second fiscal quarter) in 2012. And it’s only advanced since then. With the help of AI and big data, brands can deliver highly custom experiences to consumers. Now, personalization spans devices, following you from your tablet to your desktop, and can recommend your next TV binge or anticipate an unmet need.

Personalization can also inspire loyalty, which means a greater customer lifetime value and possible advocacy. With forty-four percent of consumers saying they will likely make additional purchases after a personalized shopping experience, this is a tremendous opportunity for brands to break through the clutter with tailored messaging and offers.

But is there such thing as too much personalization? As brands continue to collect data to better understand and serve their customers, where does the line between service and invasion of privacy begin to blur? InMoment's 2018 CX Trends Report found that 75% of consumers find most forms of personalization at least somewhat “creepy”. And while half of consumers admitted they’d still shop with the brand after a creepy experience, almost a quarter reported it would drive them to a competitor.

The stakes are high for companies collecting customer data: 70% of consumers would stop doing business with a company that experienced a data breach. And this data is exactly what enables brands to personalize their offerings.

So, we’ll continue to see this tension play out across industries—while consumers continue to expect more personalization, brands must deliver tailored experiences without risking the creep factor.

Julia Walker is a Project Manager at CMB and an avid online shopper whose decisions are often influenced by algorithm recommendations.

Topics: retail research, Artificial Intelligence, ecommerce, data privacy

The Scarcity Effect: Read now before it's gone!

Posted by Julia Walker

Wed, Dec 06, 2017


red cups.png

The super busy Q4 at CMB is fueled by adrenaline, sweets from clients and vendors, and of course, caffeinated beverages served up in Starbuck’s famous (or infamous) red holiday cups. But this year, one red cup isn’t enough as the Seattle-based coffee giant introduced a second limited time only red cup on November 28. The cup features a simple red background with two hands holding a white heart—according to Starbuck’s the design symbolizes warmth, love, and goodness this holiday season. Customers are encouraged to write the name of a loved one in the center of the heart and share on social media using the hashtag #GiveGood.

So, what is it about these holiday cups that people go crazy for? It’s not just the aesthetics—though, the 20-year evolution of Starbucks’ red cup is pretty cool.

It’s the scarcity factor.

Scarcity is a tactic employed by brands in nearly every industry to boost the implied value of the product. From Book now!” banners on travel sites to retail flash sales, brands use scarcity marketing to motivate consumers to make purchases. The effect can be immensely powerful—witness the rise of a black market for rare craft beers that aren’t demonstrably better than what’s available at your local beer distributor. The “limited time” or “limited product” feeling creates a sense of urgency to act before it’s too late.

Scarcity factor: We want what we can’t have

Scarcity is an economic principle that posits when a good or service is limited in availability (or perceived as being limited), it becomes more attractive to consumers. This results in a mismatched supply/demand scenario—incredibly high demand for a low supply.

Psychologically, scarcity is an intuitive concept—remember as a child you wanted something more after your parents told you, “No”?

One of most well-known scarcity studies was conducted by Stephen Worchel in 1975. Participants were offered cookies from two identical jars—one had ten cookies while the other had only two. Worchel and his colleagues observed that despite the jars and cookies being identical, participants preferred the cookies from the jar that had two. The jar with two cookies (compared to ten) evoked a sense of scarcity from participants, which propelled them to choose that one.

FOMO: The fear of missing out is real

“FOMO” is more than a contemporary acronym coined for the “fear of missing out”. FOMO is a “pervasive apprehension that others might be having rewarding experiences from which one is absent” fueled by the “desire to stay continually connected with what others are doing.”

And in today’s connected world, social media only exacerbates FOMO—it’s easy for people to feel like they’re missing out when they’re Instagram-stalking friends out doing (or having) fun things.

Scarcity marketing: Playing on FOMO

Like I said, brands from nearly all industries will use scarcity to promote their products or services at some point. But to keep with the red cup theme, I’ll draw on two more Starbucks examples:

  • PSL Season: At the beginning of each September, Starbucks releases its perennial fall drink: the pumpkin spiced latte (PSL). PSL is only available for a limited time as people wait all year for this pumpkin-y treat. It’s grown to symbolize the fall season as much as back to school, sweaters, and football while helping bolster Starbucks’ fourth quarter sales.
  • Unicorn Frappuccino: Earlier this year, Starbucks added the “Unicorn Frappuccino” to its menu. Once customers learned this specialty drink would only be available for a few days, they flocked to their nearest store—resulting in the fruit and sour candy-flavored drink selling out in one day. This highly Instagrammable beverage garnered nearly 155,000 #unicornfrappuccino posts on Instagram.

Scarcity is not a silver bullet

In some cases, scarcity can have an adverse effect on consumers. A series of studies by researchers at McGill University in 2011 highlights instances where scarcity actually decreased the perceived value in a product or service. In short, if people are more aware of scarcity as a sales/persuasion tactic or are more exposed to scarcity claims (think repeated flash sales by the same store), they’re less likely to value a scarce product. Basically, if your scarcity claim isn’t true and your customers are smart (and they are!), this strategy won’t help your cause.

Conclusion—read now before it’s gone!

Scarcity can be an effective strategy for brands, but like most tactics, is dependent on the execution. Be authentic in your messaging and don’t manufacture the concept of scarcity. Even though we are prone to FOMO, consumers are smart and will see through your claims.

Scarcity isn't the only effective marketing tactic. Don't miss our latest 20-minute webinar on how brands can leverage social identity to create marketing strategies that drive customer purchase, loyalty, and advocacy. 

Watch Now


Innovation Requires Truly Understanding the Customer's Needs

Posted by Julia Walker

Thu, Dec 01, 2016

business-561387_1280.jpg“Innovation” has enjoyed a long reign as king of the business buzzwords—you’d be hard-pressed to attend an insights or marketing conference without hearing it.  But beyond the buzz, organizations pursue innovation for a number of reasons: to differentiate themselves from other brands, establish themselves as an industry leader, or to avoid producing stale products, services, ad campaigns or content.  Smart brands know that complacency is not an option and recognize they must adapt to accommodate the ever-changing consumer landscape. 

Innovation is a significant investment—the stakes are high for these new ideas to deliver meaningful results, whether by boosting the brand, successfully introducing a new product, growing the customer base, or adding to bottom line profitability. No matter how disruptive a product, service, or idea is, at the core there must be a deep understanding of customer needs. (Tweet this!) Let’s take a look at two very different attempts at innovation, and where they stumbled:

 The Case of Google Glass

For any new product (innovative or otherwise), organizations need to answer “yes” to two questions: (1) Is there a market? (2) Does it solve a legitimate problem?

No matter how revolutionary the product may be, it won’t succeed unless there’s a market for it. It's possible that a product can be too forward-thinking, leaving customers confused or unwilling to try it. Take the case of Google Glass:  though the product itself was revolutionary and consumers were intrigued, it was unclear why consumers needed Google Glass and what problem it was designed to solve.   Google Glass ended up generating low demand since there wasn’t an easily identifiable need for it. 

The key here would’ve been to first identify what customers need and then develop a product aimed to satisfy that need.  Here’s where market research can help with innovation. As market researchers we can help brands get into the mind of consumers and identify the gaps between what they are currently receiving and what they want to receive. By identifying these gaps, we can shed light on where there’s a need to be met.

 The Febreze Scentstories Flop

Other innovation flops in recent years have proven that beyond identifying customer/prospect needs, it’s also important to test how messages play to real consumers prior to launch.  

A lesson illustrated by the failure of P&G’s “Febreze Scentstories”. In 2005, the company caused confusion because they failed to educate customers properly about what the product actually was. Febreze Scentstories resembled a disc player that emitted different scents every 30 minutes (they looked an awful lot like CDs). The ads told consumers with Febreze Scentstories they could "play scents like you play music."  And while P&G partnered with superstar Shania Twain to drum up excitement, its advertising campaign confused consumers by making them think the product actually involved music.  Clearer messaging that would’ve helped prevent this misunderstanding.

Advanced analytical techniques along with strategic qualitative methodologies are a boon to brands. There has never been so much information available nor computing power capable of parsing and modeling it. But as two very different product innovations demonstrate, that sheer volume of data is not enough. What is needed for successful innovation are insights grounded in a truly consumer-centric approach. After all, only the consumer knows what the consumer wants (and needs).

Julia Walker is a Senior Associate Researcher at CMB who enjoys being innovative in her everyday life.  For instance, she loves to find creative ways to eat healthy without sacrificing taste. 

Topics: consumer insights, customer experience and loyalty, growth and innovation

What’s in a Name? ABC Family Grows Up

Posted by Julia Walker

Thu, Nov 12, 2015

This January, the ABC Family channel will become “Freeform.” The name change, triggered by a misalignment between ABC Family’s current brand strategy and associations the current name conjures, aims to appeal to the brand’s target audience—a more mature, young adult demographic. President Tom Ascheim calls this group "Becomers," males and females ages 14-34 who are going through an exciting life stage of firsts, ranging from "first kiss to first kid."

So, what can viewers expect from Freeform? According to the company, at least some things will stay the same. Freeform will keep a number of popular shows (e.g., Pretty Little Liars and The Fosters) and continue beloved traditions like Harry Potter Weekends and 25 Days of Christmas. But viewers can also expect new programming that takes the brand further from its family-friendly image. 

While the name change seems warranted, a rebrand can certainly flop if not carried out thoughtfully (think: when Radio Shack became “The Shack”). Here are four steps worth following to ensure long-term success in launching a rebrand:

1. Conduct thorough research about the competitive landscape and your target market. Rebranding involves a tremendous amount of preparation, time, and effort, and it risks confusing customers and losing brand equity. It’s wise to consider the repercussions before making changes that might not solve the underlying problems. Renaming infamous private security firm Blackwater to the shorter XE, for instance, hasn’t done the trick. For ABC Family’s part, research revealed many respondents unaware of the brand see it as “wholesome,” which is an indication that the channel’s name was a real sticking point to broadening its audience.

2. Communicate early and often. Being proactive about communication is essential during a rebranding campaign to avoid confusion and to dissuade potential rumors. All marketing and promotional materials should be honest and clarify any questions customers may have, such as the reasoning behind the change or what to expect from the new brand. On ABC Family's social media pages, for instance, some viewers expressed concerns about whether or not the new network would continue its popular 25 Days of Christmas campaign. The channel is leveraging these platforms as a way to answer questions and ease viewers’ fears.

3. Engage customers. Getting the consumer involved is a productive way to create buzz around the rebrand. One way ABC Family has done this is through a user-generated campaign (UGC) in which fans can create content to be posted on the channel’s website. This effectively generates hype around the launch just in time for the January television premieres. Social media can also be used to cultivate engagement with fans. ABC Family already has an impressive social media presence around hit show Pretty Little Liars, which is cable's second most tweeted-about series, but the channel will need to continue encouraging active participation throughout the rebrand.

4. Don’t let the name change stand alone. The name change itself should only be part of a rebrand, and it should be accompanied by an internal strategic shift. The branding must deliver on its promises, or the rebrand will fail to bring about any brand lift. A rebrand can’t be a "superficial facelift," but a sustainable strategic change that allows for the brand to flourish. 

Only time will tell if Freeform can create new content that attracts Becomers and evokes viewers’ "spirit and adventure," while also leveraging existing brand equity to maintain its current core audience.  

Julia Walker is an Associate Researcher who is very excited to continue watching Harry Potter marathons on the new Freeform network. 

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Topics: television, brand health and positioning, customer experience and loyalty, digital media and entertainment research