Archive for the ‘Small Business’ Category

Luxury and Value

by on Wednesday, April 17th, 2013

In a lengthy and thoughtful post on MediaPost about the evolution of luxury, author Steve Kraus claims:

Luxury, historically about being expensive, evolved to become value-oriented. At [the Ipsos] November 2011 Point-of-View Forum on luxury, we presented data showing 89% of Affluents agreed, “When I decide to purchase a luxury item, I go out of my way to find the best price possible.”

via shutterstock

via Shutterstock

This is great news for online marketers, because shoppers have to do two searches: first for the product they want, then for the price they will accept. Indeed, the first search may include not just the web sites or Facebook pages of top of mind merchants, but also reviews, forums, blogs and other social media interactions that go into forming purchase intent. Why is this good news? More time on site is one obvious reason but more opportunity to interact with the brand and with friends is another. More time to shop means more time to be social.

How can brick and mortar merchants take advantage of this phenomenon? First, provide large amounts of actionable, sharable information. Have a photo of those shoes in blue? Let the customer tweet it to her friends. Second, do what online merchants can’t do: change you mind, turn on a dime, make an exception. Surprise and delight – and watch your customer post to Facebook with a smile on her face. Third, use a well-designed loyalty program to turn current customers into loyal customers, and loyal customers into high spenders who will tell their affluent friends about your business.

The takeaway:

  • Luxury may be back. Tacky isn’t.
  • Shopping for value is as much a part of retail therapy as shopping for products. Smart brands promote both.
  • Brick and mortar merchants can take advantage of their one-on-one customer relationships to surprise and delight customers who are or may become loyal.

Zavee News

by on Thursday, April 4th, 2013

Wondering what we have been up to lately?

Zavee has partnered with a firm called RewardsNOW to bring the Zavee platform to merchant networks sponsored by banks and credit unions. RewardsNOW is a leader in providing loyalty and rewards programs to mid-market financial institutions – over 200 of them.

Zavee is integrating its social loyalty platform with RewardsNOW’s existing loyalty suite to create an advanced loyalty program called Shop Main Street. Shop Main Street will provide marketing solutions to local merchants, valuable offers to local shoppers that are integrated with their current loyalty program, and a range of benefits to local financial institutions.

The first two markets for Shop Main Street are in suburban Boston and Metro Detroit. Detroit in particular is a great opportunity, because RewardsNOW has a dozen clients in that market which represent more than 250,000 registered cards! Integrating the two platforms has required extensive new development, much of which has improved the existing Zavee platform. Look for more great news from Zavee and Shop Main Street during 2013.

And thank you for your continued support.

Beyond the Handshake

by on Thursday, October 18th, 2012

Bryan Bottger of The Buddy Group has an insightful post on MediaPost’s Social Media Insider about the need for “Experiential Marketing”. That means taking a variety of actions that break down the wall between a brand’s online or conventional media presence and its actual or potential customers, and create human-to-human interactions. As Bryan puts it:

“Without your creating “real,” non-digital engagement, consumers will start to consider your digital engagements as fake and overly self-serving. A handshake still means something — that’s why travel on Southwest continues to increase….”

(via Creative Commons)

For big brands, experiential can be a big deal. Long after Felix Baumgartner will no longer instantly be recognized as the guy who jumped from space with a parachute, Red Bull will be leveraging the video of his record-setting feat. Those of us who watched this amazing event didn’t mind the signage and the product placement, because this crazy obsession seemed so entirely real.

Fortunately for local merchants, providing live interactions with your customers can be as easy as opening the door. Local merchants, as a rule, do real … real well.

But there is plenty of room for improvement, and creativity. Clothing boutiques are masters of the “trunk show”, an informal way to give loyal customers a head start on a new season’s merchandise. Why can’t a hardware store do the same, perhaps with demonstrations of the latest tools or building materials. Or even holding classes for budding builders or DIY-ers. Home Depot does that, why not you? Many wine shops now hold tastings, why not the frozen yoghurt store? Years ago, a group of karate students in Canada demolished an abandoned house in a try for the Guinness World Record. Suppose a group from a local school joined with, say, Habitat for Humanity to clear a building site.

Local businesses have an advantage over big brands: the distance between the brand and the customer isn’t nearly so far. Why not take advantage of that shorter distance and connect with your customers … as people.

Hope Is Not A Strategy

by on Wednesday, September 19th, 2012

So said Hillary Clinton, and she wasn’t talking about marketing. Still, when local merchants think about word of mouth marketing, hope is often their only strategy.

It shouldn’t be. If your business consistently provides a rewarding customer experience you can do a lot more than simply hope that customers spread the word. Here are some steps you can take to extend the reach and effectiveness of your word of mouth marketing well beyond what hope alone can provide.

One happy customer tells another (via abardwell, Flickr)

There are 3 basic things you should do to amplify your word of mouth:

  1. Identify the most likely potential brand advocates
  2. Engage with them frequently and consistently
  3. Make it easy for them to be your advocate

Who are a business’ most likely brand advocates? In a recent post on All Things WOM, Cara Fuggetta of Zuberance outlined 5 characteristics of potential advocates’ “social DNA”:

  • They are inherently social people
  • They want to be looked at as experts
  • They recommend many brands and do so often
  • They are avid content creators and sharers
  • They want to help others

In short, they are not your typical customers, or even your typical satisfied customers. The reason they may become your advocates may have more to do with their own interests and motivations than with your business, but if you can get them sufficiently engaged they will be happy to be your advocates, too.

Even if you know what they are like, how do you find them? One way is to search: cross referencing valuable customers (you do know who your most valuable customers are, don’t you?) against social media activity should give you a starting point. But an even simpler way is to ask. Send your customers an email survey asking some of the questions Cara answered in her post. It isn’t a scientific survey but it doesn’t need to be.

Once you have identified at least some of your potential advocates, open a dialog. Ask for their feedback, and implement reasonable suggestions. And make sure they get the credit. Draw them closer with special offers just for them. Use soft benefits, too: early access to new products, or a cocktail reception after hours can strengthen the bonds between your business and your advocates.

Then do what you can to make it easy for them to spread the word. At the very least, return their emails, texts and phone calls. If they need content for Facebook, Twitter, or (recently) Pinterest, make it available – and in a format that makes it easy to use. Let them guest edit a catalogue, if you have one, or post to your blog. If they want you to speak at a local organization, jump at the chance. Remember, there is no shortage of media channels through which you – and your advocates – can communicate.

The Zavee takeaway:

  • Brand advocates are special people. Treat them that way.
  • They may have their own reasons for becoming your advocate. Insisting on your reasons won’t be helpful.
  • Brand advocates can be tremendously helpful. Don’t stand in their way.

4 Ways Local Merchants Can Take Advantage of Deal Fatigue

by on Wednesday, August 22nd, 2012

Business Insider recently noted that LivingSocial is “still burning money at an incredible rate”. The same publication also reported on an analyst’s downgrade of Groupon despite improved results for the first quarter of 2012. Publications from Businessweek to Yahoo are reporting on the new phenomenon of “deal fatigue”.

What is it? Is it for real? And what does it mean for local merchants?

Focus group participants expressing their perspective on coupons.

Not long ago, consumers were eager to sift through their inbox for the latest from Groupon, LivingSocial or one of their many clones for the latest version of “something for nothing”. Deal sites offered compelling discounts on a wide array of consumer products and services. Restaurants were common deal sellers, but consumer also could purchase “bucket list” experiences such as skydiving, drag racing, even pole dancing lessons. Consumers buy a lot, merchants sell a lot, what could possibly go wrong?

Here is one answer: Consumer behavior and merchant expectations were completely out of sync. The only surprise is that so few of the smart people noticed before the deal space took off. Daily deals were great for the type of consumer that treats shopping as an exploration. Deal hunters are (usually) younger consumers without much disposable income who want the make it go the furthest. So the opportunity to purchase something they may never be able to afford again is compelling.

Deal hunting can be fun and can expose consumers to a lot of new products, but building a long term relationship with the merchant that offers a daily deal is the furthest thing from deal hunter’s mind. Deal hunting is about the next cool offer, not the last one.

Merchants, unfortunately, had the opposite expectation. The rationale for giving up a substantial portion of a day’s receipts was that exceptionally high traffic and trial would result in sufficient repeat business to justify the cost and disruption of the daily deal. Restaurants especially anticipated increased sales off the regular menu and tips paid on the full price before coupon. It didn’t work that way.

In many cases, traffic was plentiful – too plentiful. Merchants were overwhelmed and their associates were overworked. In restaurants, this brought down the overall service level – which annoyed regular customers – while deal users didn’t spend extra (because they couldn’t) and didn’t tip on the full amount because most people expect to tip on what they pay.

The result, from an anaylst quoted in the Businessweek story linked above, is simple: “‘It appears the daily deal business has run into a wall,’ wrote Clayton Moran, an analyst with Benchmark Co., in a research note. ‘From what we can tell, the bears were right.’”

How can local merchants take advantage of deal fatigue?

  1. Discounts can promote trial, but merchants should avoid discounts that are so deep that they attract consumers who are motivated solely by the deal, and have no interest or ability to form a long term relationship with the merchant.
  2. Daily deals can be very expensive. Merchants should look for programs that can promote trial and stimulate development of long term customer relationships without disrupting the business, either operationally or financially.
  3. With the end in sight for the daily deals arms race, the most compelling offers will provide value in ways that go beyond discounts. Merchants that can use offers to facilitate engagement will weed out the deal hunters and be able to focus better on potential customers
  4. Merchants who don’t buy daily deals no longer have to worry that they are missing out on a game-changer. Instead, they can look at different ways to create long term customer relationships that will yield value throughout the customer life cycle.

Any other suggestions for how local merchants can find the opportunities in deal fatigue? Let us know in the comments.

What Makes A Review Trustworthy?

by on Tuesday, June 19th, 2012

There is no shortage of research demonstrating the rise of the user review as a valuable component of consumer decision-making. One of the first sites to make reviews a central part of their business model was TripAdvisor. I read reviews on the site almost every time I travel to someplace new. I recently needed a hotel in Chicago, and read reviews on TripAdvisor before booking my room on Expedia.

Turns out Expedia has reviews now, too. I wanted to see how the sites differed, so I reviewed my hotel on both. There is only one difference between the two that I found significant: On TripAdvisor, reviewers must accept the site’s Terms and Conditions, which include a promise that the reviewed transaction actually took place. On Expedia, the site can detect whether booked travel was used (or at least not cancelled) and only solicits reviews from its so-called “verified reviewers”. So, on one site reviewers promise that reviews aren’t fake, while on the other the system operates to prevent fake reviews.

Zavee’s review engine is far closer to Expedia’s than to TripAdvisor’s. In addition to accepting reviews only from Zavee members who have actually shopped at the merchant, we only accept reviews of transactions less than 30 days old. So, in addition to reducing the chance of fake reviews, we also limit reviews that are dated.

Yelp and TripAdvisor both suffer from an absence of limits on false and dated reviews, but Yelp seems to handle the issue better. How? Community. Perhaps because most people eat out more frequently than they travel, it appears that more people are active on Yelp, and they are more inclined to react to each other. Whatever the reason, Yelpers at least give the appearance of policing themselves and each other to a greater extent than the (presumably less frequent) posters on TripAdvisor. TripAdvisor appears to be trying to create a greater sense of community among its users, but it isn’t an easy task.

Which site’s reviews do you trust most? Let us know in the comments.

When Is a Sale Not a Sale?

by on Thursday, June 7th, 2012

Discount retailer J.C. Penney announced in January something they call “fair and square” pricing. It is supposed to do away with discounting in favor of everyday low prices. Penney did not invent the everyday low price (EDLP) strategy but it is a pivot for a company that in the past was very discount-oriented.

Fair and square?

Several media outlets are now reporting that, six months later, Penney has pivoted again. According to Retail Wire:

CEO Ron Johnson told attendees at a Piper Jaffray investor conference that substituting terms such as “month long values” in place of “sale” was “kind of confusing” to the chain’s regular shoppers. So, from this point forward, Penney will call a sale “a sale” and nothing else.

It takes a certain amount of size, margin and brand equity to be able to make significant changes to pricing strategy. Penney has been positioned as a value retailer just about forever, so a change in pricing strategy doesn’t necessarily affect their brand.

But what about local retailers? Does it ever make sense for them to adopt an EDLP strategy? My guess is: rarely. Local retailers often charge higher prices than mass market chains. They justify these prices with more personalized service and a more carefully curated assortment. This “boutique” positioning makes sense for many consumers, even in categories which would never use that term.

My take is that local retailers would lose more than they gain if they tried to sacrifice the boutique factor for the higher volumes that EDLP can sometimes bring. Better for them to (1) make judicious use of sales and (2) find ways to incentivize and reward customer loyalty at prices that produce the margins they need.

3 Ways The Customer Isn’t Always Right – And What to Do About It

by on Wednesday, May 16th, 2012

In a recent post on MediaPost’s Marketing Tools: Customer Relationship Management blog, Kathleen Stockham writes about the appalling situation in which a terminally ill Spirit Airlines customer, who was medically advised not to fly after he bought his non-refundable ticket, was repeatedly rebuffed in his attempts to secure a refund. After taking a beating in mainstream and social media alike, Spirit relented, although none too graciously.

This event led Ms. Stockham to write her post, in which she posits the following three rules:

Rule #1 – We screw up; customers, brands, retailers. We all have our blind spots, but it is in how we recover that customers remember and react to.

Rule #2 – The customer is always right. Yes your mileage may vary but in the end, the customer is always right or rue the day you tell them otherwise.

Rule #3 – Social media is your best friend and your biggest adversary, when in doubt, see Rule #1 and #2.

No refund for dying man? That's NOT the Spirit!

I take issue with Rule #2, although Spirit should have found it easy to accommodate its customer and put him in the right. There are situations in which the customer is “wrong” and can’t be accommodated – and these have to be some of the most difficult customer relationship challenges around. Here are three examples:

  1. Accommodating one customer will severely inconvenience others. This actually happened to me. A few years ago, my family and I showed up at the airport check-in counter for a flight to the Dominican Republic one minute – one minute! – after the doors closed. The airline would not accommodate us (or anyone else on line) by putting us on that flight. The background is that the night before we had been hit by a disastrous ice storm. Our usual half hour trip to the airport took 2-1/2 hours and we passed countless accidents and abandoned cars on the way.

    The airline explained that if they held the flight it would lose its place in the de-icing queue and takeoff would be delayed by up to three hours. In addition, the airline put us on a flight to a different part of the island (waiving change fees) that took off only an hour later. And while it took us all day to traverse the DR – it’s a big place! – we believed we were treated very fairly. Here’s what the airline did right:

    • They explained the situation neutrally, without making the situation “us vs. them”.
    • They had the facts on their side. We could just imagine being “those people” responsible for a planeload of passengers spending hours sitting on a cold plane instead of a warm beach. No need to rub our noses in it, and they didn’t.
    • They tried to find a solution. The counter staff sent out a radio call for staff familiar with the DR. They got us on the next flight and gave us detailed directions to our original destination. Insisting on change fees would have left a bad taste but they waived them without being asked. In short, the airline successfully balanced our interests against those of a large number of other customers
  2. The customer has an agenda. The customer is angry that the company is unionized – or non-union. Sells products made in Israel – or has taken them off the shelves. The list of potential grievances is endless, and the ability of aggrieved customers to reach an audience is growing daily. What to do?

    • Take the customer, and the issue, seriously. The customer might be factually mistaken, and might be willing to share correct information, especially if he/she has already shared content that is misleading or untrue. If the customer is factually correct, it is a good idea to engage to the point of taking the complaint seriously. There is no need to agree with the customer’s position, but there is no need to treat him/her as a wingnut, either.
    • Promise consideration, not change. In most cases, it is reasonable to forward claims from advocates to the appropriate person in management, and it is therefore truthful to tell the consumer that that is what you will do. It’s probably true that management is open to feedback from customers on almost any subject, and if so, say so. If the issue is one like Chick-fil-A’s “Closed on Sundays” policy, which is well-known and immutable, it’s only fair to politely inform the customer that, although you respect his/her position, the company’s policy is not likely to change. The best that can be hoped for is that delicate handling defuses the customer’s hostility before he/she reaches the keyboard.
  3. The customer wants a benefit that hasn’t been earned. This is something that can give businesses fits. A free bottle of wine, an upgraded rental car, a pass to an airline lounge – these are just a few of the soft benefits that companies use to reward loyal customers. When the benefit is conferred right in front of a less deserving customer, feelings can be hurt and demands can be made. Here are some suggestions:

    • Always have access to customer profiles in real time. A customer who is one visit away from earning the benefit he wants probably should get it. The first time customer … not so much. It’s easier to deny a request for a benefit (politely, please!) if you know the facts and they are on your side.
    • Explain the rules. Even if eligibility for soft rewards is somewhat discretionary, explain to the customer what it takes to qualify. A customer who understands your expectations, and knows how to meet them, is less likely to go away angry.
    • Consider half a loaf. It’s important to determine whether this is a customer you want to retain, and it’s sometimes difficult to make these judgments on the fly. Associates should always feel free to bring in a supervisor without fear of an adverse evaluation. You don’t want to incentivize bad behavior, but if this is a customer you want to keep, and the request was made politely, consider trying to meet the customer part way. A free dessert instead of the wine, perhaps?

Is the customer always right, when he/she has ready access to social media? Let us know in the comments.

Making Social Media Easier

by on Monday, January 23rd, 2012

When we talk with local businesses about Social Media, the most frequent objection to becoming more socially engaged is time. Many local merchants believe that the time required to attend to Facebook and Twitter is better used for tasks more directly related to running the business. Rather than argue the importance of Social Media, we’d like to pass along a post on Mashable that introduces some tools that make it easier than ever for a small business to manage its Social Media presence and derive maximum value from this powerful marketing medium.

via Kevin Moore (Creative Commons)

Some of these tools are geared toward agencies or at least larger companies, but there are two that we have used successfully at Zavee: HootSuite and TweetDeck. Both applications live on the desktop although both have mobile versions. TweetDeck is free and HootSuite has a free version that should be fine for most businesses. Both apps let the user manage multiple streams (e.g., Facebook and Twitter) simultaneously, including posting the same content to several streams. Both apps make it easy to schedule posts, so an hour or two on the weekend can result in a week’s worth of posts.

It’s also easy to redirect content, so a link, image or other content that is found on Twitter can be shared out on Facebook (and vice versa). This can be especially valuable for Zavee merchants, because Zavee shoppers now can share merchant-related content on Social Media even more easily than before. So merchants that sees a good review or recommendation can increase its reach by putting that content in their own Social Media stream. Merchants also can push news announcements published on Zavee to their Facebook and Twitter streams. That gets their own content noticed by even more potential customers.

Social Media can’t be fully automated, any more than any other marketing tool. But these two apps (and others mentioned in the Mashable post) can make the time devoted to Social Media time well spent.

Tis The Season to … Shop Locally

by on Thursday, November 17th, 2011

Here’s an idea: let’s make December “National Shop Locally Month”. Big brands get lots of media attention with their Black Fridays and their door busters, on top of the biggest ad budgets of the year. Maybe a wristband and a car magnet aren’t much, but local businesses always have had to make do with less.

On second thought, there are better ways to raise awareness of the importance of local commerce and persuade consumers to spend more at local businesses this season. Shift Your Shopping is an umbrella site that provides a great deal of information about the impact of local business on the nation’s economy. Spend some time on the site and you can’t help but be impressed by local business as an economic driver. In addition, there are several organizations that support small business in the community. Take a look at their sites and consider making them part of your own community.

Black Friday (via lululemon athletica, creative commons)

Consumers want to save money, but studies show that most consumers don’t make purchase decisions solely on price. They want personalized service, a relevant product selection and a merchant whose integrity is beyond question. Those are your strengths as a local merchant, so make sure your customers know about them. Don’t overlook the power of social media to engage consumers about the importance of local businesses in general and value that yours adds in particular.

Best wishes from Zavee for a prosperous holiday season.