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What Amazon Can Teach Us About Delivering on Customer Loyalty

Posted by Ashley Harrington

Wed, Apr 25, 2018

 

amazon packages (resized)

I live in a historic Boston neighborhood rich in restaurants and charm, but poor in parking. If you have a car, you have two choices: spend a fortune on a dedicated monthly parking spot or drive in circles until you find free street parking.  I don’t like to waste money or time, so I don’t own a car.

I don’t own a car, but I do have two kids. So, I need stuff and I need it all the time. Enter, Amazon.

I use Amazon on all my devices and have multiple apps. I use it for both planned purchases and impulse buys. I Subscribe and Save for everything from baby wipes to granola bars. I order groceries from Amazon Fresh. I try on clothes with Amazon Wardrobe. I buy e-books. I watch movies and TV shows on Prime. I use Now to get emergency toddler bribes delivered in an hour.

On top of all that, I pay Amazon for the privilege of buying things with them with an annual Prime membership. If that’s not the ultimate sign of customer loyalty, I don’t know what is.

If I was responding to an Amazon loyalty study, I would certainly make it into the “Super User” group, checking all the boxes for how we might define loyalty: frequency of purchases, cross shopping, willingness to try new categories, likelihood to recommend, etc. 

My “Super User” status didn’t happen all at once—it was gradual thanks to the “Amazon Effect.” Over time, Amazon plucked one more category of our household expenses from another retailer.

I work with clients every day to help measure, understand, and improve their customer loyalty. While few companies have the infrastructure and the sheer breadth of product and services in such a frictionless way, there are lessons any brand can learn from Amazon’s excellence in curating a faithful customer base.

 Here’s how Amazon keeps me loyal:

  • Anticipates my needs: I wasn’t actively thinking about how great life would be with a paper towel subscription. But, I gave Subscribe and Save a shot and now we never run out and I can't imagine my household without it.
  • Gives me back my time: With Fresh, I can enjoy time with my family instead of spending it in the grocery store (if you enjoy taking your children to the grocery store, I nominate you for a Parent-of-the-Year Award!)
  • Provides me with flawless execution and problem resolution: Amazon’s apps and website are easy, fast, and intuitive. Once I order something, I know exactly when it’ll arrive on my doorstep. If there is an error, Amazon’s customer experience team is polite and fair in resolving an issue.

While I am a loyal customer, there are certain things I don’t buy on Amazon. Some because they aren’t sold (yet) (e.g., wine) and others because I enjoy shopping elsewhere. And there are Amazon services that aren’t for me. For example, I don’t need to tell Alexa to turn on my lights.

 So, even for this Super User, loyalty has its limits.

 Ashley Harrington is a Research Director at CMB who recently starting using “Amazon” as a verb and probably has goldfish crackers in her bag.

Topics: brand health and positioning, customer experience and loyalty, retail, ecommerce

NASCAR Races to Stay Relevant for the Next Generation

Posted by Brian Jones

Wed, Apr 18, 2018

As a stock car racing fan who makes an annual pilgrimage to the Daytona 500, I’ve experienced the evolution of the NASCAR brand from the seats of the iconic 2.5-mile track.

No place is the emotional connection between brand and customer more palpable than at an event where drivers enter the stadium in a gladiator-style procession before climbing into their cars for a 200+ mph chariot-like battle on a 31-degree banked asphalt track.

NASCAR 1

It is exhilarating.

But while NASCAR excels at creating an emotional experience for its current loyal fan base, the organization is challenged to deliver a branding experience that will attract the next generation of fans—while how people consume sports continues to evolve.

On top of that, NASCAR must motivate existing and new fans to view/attend/buy not only its own brand, but the myriad co-sponsors.

NASCAR is built on cobranded endorsements on all levels—including individual athletes (e.g., Dale Earnhardt and Jeff Gordon), teams (e.g., logo-plastered M&M’s Toyota racecar), tracks (e.g., Lowe’s Motor Speedway), and even the race series themselves (e.g., NASCAR’s Xfinity Series). More recently, at the 2017 Daytona 500, NASCAR rolled out Monster Energy NASCAR Cup SeriesTM—the latest sponsor of the premiere racing series.

So how is NASCAR adapting to meet changing consumer demands?

  • Less prominent onsite branding: At the 2017 and 2018 Daytona 500’s, gone were the prominent product swag and logo placements of its former series sponsors, Sprint (2008-2016), Nextel (2004-2007), and NASCAR’s 31-year relationship with RJ Reynolds (1971-2003). In its place, I witnessed Monster Energy bringing its next generation youthful appeal—less signage and more experiential, like offering fans ride-alongs on off-road vehicles.
  • New marketing channels: NASCAR is supplementing real-time coverage with exciting social media experiences geared towards the digital-savvy generation of younger driver-athletes.
  • Improved customer experience: The International Speedway Corporation (ISC) has invested $400+ million in a venue retool of Daytona’s Speedway and the surrounding property to improve fan experience.
  • Investment in content strategy: NASCAR recently created a Content Strategy Group to centralize its creative, digital, social marketing, and advertising operations.
  • Revamp of scoring system: Perhaps the most surprising change is NASCAR’s recent revamp of its point system. In 2017 NASCAR rewrote the rules for how drivers compete and earn championship points during the season. No other major sport has changed its product so completely in response to changing consumer opinion about how they want to experience their sports entertainment.

At the time of the Monster Energy deal announcement in 2017, Mitch Covington, Monster’s VP of Sports Marketing said, "I think you'll see a little more Monster at the Daytona 500. But at the same time, the sponsorship's not about painting it all green. It's really about doing some really cool things with sponsorship."

NASCAR 2

But last week, NASCAR and Monster Energy announced it’s “highly unlikely” the partnership will continue beyond the 2019 race season—a sign NASCAR is reevaluating its current sponsorship model.

To simplify sponsorship opportunities for brands, NASCAR may bundle its top sponsorship with the sanctioning body to include the tracks and tv partners, omitting series naming rights which has been used in the past.

NASCAR Chief Operating Officer Steve Phelps told ESPN, “Our competitive advantage is that our fans understand the importance of sponsorship and they go out and support our sponsors… we just think there’s a better model to make sure that sponsors want to stay involved more broadly.”

The future of NASCAR’s sponsorship model is still unknown, but Covington’s quote sums up their efforts. For sponsorship to be effective, NASCAR must strike a balance between honoring what fans have always loved about the NASCAR brand (+ sponsors) while embracing innovation and change.

Brian is a loyal NASCAR fan who also enjoys helping clients solve their biggest business needs using advanced market research methodologies like CMB’s Brand FX— a solution that measures the social, emotional, and functional benefits a brand provides to customers.

Topics: brand health and positioning, customer experience and loyalty, BrandFx

How L.L. Bean Weathers Customer Loyalty

Posted by Nicole Battaglia

Wed, Apr 11, 2018

 LL Bean Boots_cropped

Sorry outdoor apparel fans, L.L. Bean isn’t accepting your beat-up duck boots anymore. The Maine-based outdoor retailer recently ended its flagship Lifetime Return Policy.

 L.L. Bean founder Leon Leonwood Bean introduced this policy over 100 years ago to prove their commitment to quality products and ensure customer satisfaction. And since then, generations of Bean-loving customers have enjoyed the forgiving policy.

But not everyone’s been so kind. A growing number of customers have taken advantage of L.L. Bean’s generosity by treating it more like a free exchange policy. According to the Associated Press, the company has lost $250 million on returned items that cannot be salvaged or resoled in the last five years alone!

From a financial perspective, this move makes sense. But the loyal Bean boot enthusiast and market researcher in me is curious about potential branding implications—will this alienate lifelong customers who might view this as L.L. Bean as “breaking its promise”?

For more than 100 years, L.L. Bean has built its brand image around “designing products that make it easier for families of all kinds to spend time outside together”. Enduring Northeast winters as a kid, I can vouch for the quality of their products—they are truly second to none. L.L. Bean isn’t ‘cheap’, but I don’t balk at their prices because I know I’m getting something proven to withstand harsh winters.

But, my loyalty for L.L. Bean runs deeper than the quality of my boots. Growing up in a Bean-loving home, I have a strong emotional connection to the brand.  I have memories of flipping through the catalog (back when that was the popular way to shop) and getting excited about when it was time to order a new backpack and matching lunchbox—monogrammed, of course.

When I’m home for the holidays, I head out to the local L.L. Bean store to make my holiday gift purchases. In 2015, L.L. Bean featured a golden retriever puppy on the cover of its holiday catalogue. As someone who grew up with goldens, this ad resonated with me on an emotional level.

I also strongly identify with other L.L. Bean enthusiasts. Most kids I grew up with had the monogrammed backpacks, and when I went to college, everyone wore Bean boots. My image of the typical customer is clear, relatable and socially desirable—the three aspects of social and self-identity that drive purchase and loyalty.

 When it comes to analyzing a brand’s performance, it’s critical to look at the complete picture and account for the identity, emotional, and functional benefits it provides. For me, the functional benefits (e.g. keeps my feet dry during a Nor’easter) L.L. Bean provides me are undeniably important; however, the emotional and identity benefits ultimately rank higher.

 I can’t speak for every customer, but the move to end their Lifetime Return Policy won’t keep me from shopping at L.L. Bean. Yes, it’s a shame the retailer had to rescind its signature guarantee—one that underscores their commitment to the quality of their products. 

But, it’s a powerful lesson for brands in an increasingly disrupted age: the strength of the benefits you provide your customer—social, emotional, and functional—can mean the difference between weathering the storm and keeping and growing your customers.

Nicole Battaglia is a Sr. Associate Researcher who isn’t pleased she’s had to wear her Bean boots into April this year.

Topics: customer experience and loyalty, Identity, AffinID, emotion, BrandFx

Secret Segmentation Schemes: From the Backstreet Boys to JetBlue

Posted by Will Buxton

Wed, Nov 22, 2017

segmentation abstract.jpg

I learn something from every project I work on, and the sizable segmentation initiative I’m managing right now is no exception. The client is an incredible partner, and the work is challenging and rewarding—the trifecta! As a result, I’ve found myself more and more consumed with segmentation analysis and it’s begun to creep into my non-CMB life (doesn’t it always work like that??). Segmentation schemes are being implemented all around us, here are a few examples:

  • Airport food: Whether you’re the solo business traveler minutes away from missing your flight or the parent who gets their kids to the airport 3 hours early, there is an eating experience designed for you. The sit-down restaurant didn’t magically land next to the grab and go; restaurant options and placement are carefully cultivated to cater to all unique traveler types. Airport dining options are developed to provide an option to high-yield customers—paranoid parents and late travelers alike.
  • The Backstreet Boys: I was blessed to attend a Backstreet Boys concert (get off your high horse) at Fenway Park last summer. Throw Nelly and Florida Georgia Line into the mix and you’ve got yourself an unexpected synergy of musical talent. While my wife and friends argued over who their favorite BSB member is, to my right two cowboy-boot-wearing Gen Z-ers rolled their eyes in anticipation for Florida Georgia Line. Meanwhile, the guy in front of me lamented for the bygone days of “Hot in Herre”. I’ll admit on paper it seemed like an odd pairing, but this concert was in fact a carefully curated experience meant to cater to a variety of consumers.
  • Vacations: My wife and I tend to take the same beach/relaxation vacation every year, because as with most couples, “it’s what we did last year". But when JetBlue announced a partnership with UTrip, an AI-powered personalized itinerary travel platform, I thought I’d take a peek and see how it all worked… maybe it’d recommend we shake things up for 2018’s Buxton Bonanza. The gist is you answer a handful of questions about preferred types of travel activities (relaxation versus hiking, street food versus three course dinners, etc.) with the end result being a “traveler profile”. It’s a personalized experience designed just for you. Since we are, in fact, considering switching up our annual trip and going to Europe—trading little umbrella drinks for red wine—I chose Croatia as my destination of choice on the app and was immediately presented with a week-long personalized itinerary of activities, restaurants, and accommodations based on feedback from travelers with a similar profile as myself.

One of the joys of working in insights and for our incredible clients (not the Backstreet Boys) is in noticing how data is being turned into decisions all around us. As we head into the holiday season, take a look around and consider the vast amount of data, the advanced analytics, intensive qualitative research, and the thoughtful analysis that went into making every decision.

Will is a Project Manager II on the Financial Services team. He one day dreams of hosting a TV show with Chip and Joanna Gaines.

 

Topics: customer experience and loyalty, market strategy and segmentation

Namesake: The Next KPI?

Posted by Laura Blazej

Wed, Aug 16, 2017

Pharah II.jpg

When my fiancé and I adopted our first dog a few months ago, we wanted to name her something meaningful… something that we wouldn’t grow tired of saying over and over. We landed on “Pharah,” after the rocket-launcher-wielding, jetpack-flying, altogether-badass character from one our favorite video games, Overwatch. As a market researcher charged with measuring brand health and loyalty, I started to wonder what naming my new pup “Pharah” says about my relationship with Overwatch?

This is the kind of question we ask when we’re measuring brand health. To gauge the strength of the relationship between consumers and a particular brand, we look at metrics—called Key Performance Indicators (KPIs)—to help indicate how a brand is doing. While namesake might not be a legitimate KPI (yet!), there are loads of others we measure in order to help our clients understand their brand health:

Unaided Awareness

  • Definition: The ability to recall a brand without help (This is different from Aided Awareness, which is the ability to recognize a listed brand)
  • Common question to gauge this metric: “Thinking about [industry], what brands come to mind?” (Respondent provides open ended answers)
  • Goal: Unaided awareness determines whether there is an existing relationship between the consumer and brand
  • Fit: Unaided awareness is a useful metric for smaller, newer, or regional brands who are working on improving their brand recognition. For example, the regional brand, University of Pittsburg Medical Center, would focus on unaided awareness, whereas the universal brand, Google, wouldn’t

Top of Mind Awareness

  • Definition: The first brand recalled without help in an open-end response
  • Common question wording: “Thinking about [industry], what brand first comes to mind?”
  • Goal: Top of mind awareness gauges either the most loved, the most hated, or the most prevalent brand to each consumer in any given industry
  • Fit: Useful for established brands who want to be first in consumers’ consideration set

Net Promoter Score (NPS)

  • Definition: The willingness of customers to recommend a company’s products or services to others. To calculate NPS score, we subtract the percentage of those unlikely to recommend the brand from the percentage of those likely to promote it
  • Common question wording: “How likely are you to recommend this brand to a friend or family member?”
  • Goal: This metric determines the magnitude and valence of the relationship between consumer and brand—that is, how strong or weak the relationship is (farther or closer to 0), and whether the relationship is positive or negative
  • Fit: NPS is useful to measure holistic loyalty since it accounts for both the high and low end of the scale in a single metric

Funnel/Pyramid Metrics

  • Definition: Often comprised of awareness, familiarity, favorability, preference, likelihood to purchase, and/or likelihood to recommend shown as descending or ascending bar lengths, forming a funnel or pyramid shape
  • Common question wording: Surveyed as a series of questions that touch on the aforementioned metrics
  • Goal: This metric focuses on the whole picture by following the entire journey to purchase/loyalty and the conversion ratios between each step
  • Fit: Useful as a big-picture approach to pinpoint where along the journey to focus marketing efforts

Preference

  • Definition: Likelihood to choose a brand over its competitors
  • Common question wording: “Which brand is the one you prefer?” among a list of brands
  • Goal: Preference is like NPS in that it measures loyalty, however it does so by comparing the brand against the competitive market
  • Fit: This metric is useful for brands that are already well-known and working on improving loyalty in a competitive market
Pharah-1.jpg

And very often we create a unique secret-sauce combination of some or all of these metrics, called Brand Strength Scores, for some clients. These special scores use several metrics at varying weights determined specifically for the clients’ goals, industry, and competitive market to calculate a single score to compare against competitors and evaluate change over time.

The point is, there’s no prescribed “right” set of KPIs to track when measuring brand health. These metrics are used to answer different questions, and what KPI a brand like Bank of America might use is probably a lot different than what makes sense for a regional credit union.

However, and this MAY be a stretch, I’d argue namesake would be a great way to gauge ultimate commitment and loyalty to a brand—regardless of size. When I was thinking about what to name Pharah, I thought about the things I love and wouldn't mind repeating (shouting?) for the next decade. To name a pet, or even a person, after a character or brand indicates a level of commitment to that brand that isn’t measured by the conventional KPIs described above.

Who knows, maybe “How likely are you to name a pet after this brand?” will start to show up in our brand health questionnaires.

Laura Blazej is a Senior Associate Researcher at CMB who enjoys playing video games with her new pup.

Topics: brand health and positioning, customer experience and loyalty