Posts Tagged ‘Bill Hanifin’

Airlines and Loyalty … It’s Not Getting Better

by on Wednesday, June 29th, 2011

Bill Hanifin of Loyalty Truth recently posted about airlines and customer service, a post prompted by his trip around the world (Malaysia and back – that qualifies). My trips are rarely as exotic but I fly almost every week, primarily between Newark and either FLL or PBI, and primarily on Continental. Like Bill, I have a soft spot for airlines, having begun my career in aircraft finance. Again like Bill, I am amazed – and not in a good way – by the unforced errors airlines commit when it comes to customer service.

Bill writes that airlines should be using the wealth of data available to them to build in more flexibility in dealing with customers, some of whom may be very valuable to the airline. I agree, but I think that ignoring their own data is only half the problem. A lack of empowerment is the other. Associates can only be as flexible as the rules allow. And I have a hunch that consolidation has made carriers more rigid and reduced employees’ sense of ownership (anyone have similar – or different – experiences at newly-merged carriers?).

Bill isn’t a fan of unbundling, but my view is mixed. I think baggage fees are a slap in the face to passengers. Airlines ask us to cooperate in limiting what we carry aboard, then charge us for our cooperation. Nice. On the other hand, unbundling food is a win-win, because concourse food concessions are improving steadily at many airports just as on-board food is disappearing. Carrying on our own food is one of the few freedoms we have as passengers, and I wouldn’t want to turn back the clock.

via Flickr - where are the jonses

Maybe it’s because there aren’t any bosses or unions at 35,000 feet, or maybe it’s because the airlines know how to hire for the cabins, but most flight attendants do a great job despite more crowding and fewer amenities. One recent flight departed “on time” by pushing back before the aircraft was fully catered. Not surprisingly, grumbling ensued. Very surprisingly, the flight attendants up front decided to open bags of almonds left over from the inbound flight and serve them in wine glasses. It showed that the flight attendants cared and it put a smile on every face in first class. Airlines can’t teach that kind of resourcefulness, but I hope they reward it.

One of the biggest customer engagement problems the airlines face as they impose more rules, charges and limitations is that the customer-facing staff is constantly required to disappoint or frustrate the customer. The trick, whether in the cabin, at the gate or at the ticket counter is to avoid turning delivering bad news into delivering bad service. Being told your bag has to be gate-checked is bad news; being made to wait for it at baggage claim is bad service. Being handed your bag at the Jetway is a smart way to ease the sting.

Flexible rules, empowered associates and a premium on resourcefulness can do wonders for an airline’s word of mouth. At a time when consumers are increasingly willing and able to share their experiences effectively, bad service is just reckless. If I hated Continental – and I don’t – I’m sure I could find a different way to get to Florida every week. Travelers under fewer constraints can drive to a more distant airport or just drive to their destination. And many people would just as soon stay home. Customers like me who really have to fly can use social media to make sure that everyone in our social graph – including whoever runs social media at the airline – knows exactly how and what the airline is doing.

The Zavee takeaway:

  • Airlines need empowered, resourceful associates applying flexible, data-driven rules. The alternative is an ongoing low-intensity conflict with customers that the airlines can’t win.
  • Every customer has an alternative to a bad airline, even if it means staying home.
  • Social media levels the playing field for airline customers. They can sit us down, but they can’t shut us up.

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A Look at the Future of Location-Based Marketing

by on Friday, November 19th, 2010

Bill Hanifin of Loyalty Truth (and a friend of Zavee) was kind enough to point me toward the Location-Based Marketing Summit held recently in New York. Bill thought it would be worth my while and, as usual, he was right.

Although the conference organizers were interested in what comes next for location-based marketing, most of the speakers were oriented toward the here and now. I came away from the conference with a far greater understanding of the uses and limitations of the current technologies and platforms while getting a grasp on some of what lies just over the horizon in the location-based space.

The Wise Marketer, a leading UK-based site for forward-thinking marketers, asked Bill to provide a write-up on the conference. Bill’s report, with which I assisted, was first published in The Wise Marketer for this week and is reprinted below:

The conference blended strategic and tactical insights about location-based marketing techniques, and most of the speakers observed that this branch of mobile marketing is still in its infancy. The principal strategic focus of the conference, however, was on consumer engagement and how to increase it.

Several speakers referred to Forrester’s recent finding that regular use of the ‘check in’ model was still in single-digit percentages, and that consumer awareness of these services wasn’t much higher – a report that has however been disputed at least once.

Either way, with estimates of more than 12 million people playing what consumers will initially consider “the location game”, smartphone penetration reaching 9% of the handset market, and SMS usage covering 95% of all wireless customers, it is clear that almost all consumers can be reached with marketing messages via a mobile handset.

Ian Schafer, CEO for Deep Focus, discussed ways in which marketers could use the technique for more effective marketing, suggesting that it can grow customer loyalty, increase relevance, and provide useful data and insights. He considers the smartphone to be “the next generation loyalty card”, with targeted deals and discounts being available upon check-in (or perhaps even without a digital check-in). By way of example, he highlighted ShopKick, which has a hardware platform that pushes reward currency to the consumer as soon as they enter the merchant’s store (without the consumer even having to check-in or make a purchase).

Android Phone

Android Phone (by Johan Larsson - Creative Commons)

Most of the speakers, including Schafer, took it as read that delivering more relevant marketing messages increases their effectiveness. And, in a highly fragmented communications environment, the relationship between relevance and effectiveness is even more essential.

Overall, it was agreed that location-based applications can at least provide:

  • People – other users who might have something in common with the user;
  • Content – messages or offers based on what the user likes that is at/near her location;
  • Time and Place – targeted, timely messages or offers based on where the user is right now;
  • Context – communications based on prior behaviour, as tracked by the location-based device.

The potential of location-based data is that it can drive better business decisions by adding additional dimensions (i.e. time and place, captured over time in real-time) to what is otherwise known about each consumer’s behaviour. One great example cited was the Microsoft Bing ‘Home Turf Finder’ for the World Cup, which identified certain bars in New York City as “home turf” for fans of a particular team. The determinations were based in part on editorial sources such as Thrillist, but were mostly derived from ‘heat maps’ of consumers who had checked in or tweeted their support as well as their location.

Several speakers also noted Google‘s recent announcement that 30% of mobile searches and 20% of all internet searches have local intent, and said that all of the major players (e.g. Facebook, Google, and even wireless carriers) were already focusing on local information.

There was also considerable discussion of ‘Groupon’, although some panellists expressed doubts that the “deep discount, deal of the day” model provides sustainable customer growth. Speakers agreed, however, that geo-targeting adds value by increasing both relevance and personalisation. And, in order to thrive, it was agreed that location-based applications must provide the consumer with something of value, preferably in terms of relevant and personalised content.

Overall, panellists agreed that there is great demand for marketers to engage with consumers at “the right place and the right time, all the time”. Mobile couponing, despite being a fragmented space, seems to have taken hold. As a result, one area in which technological developments are anticipated is indoor navigation, where GPS signals are sometimes degraded and are not designed to be accurate enough for navigation within a store.

Finally, the issue of consumer privacy arose in almost every session. John Nicholson of law firm Pillsbury Winthrop Shaw Pittman concluded that “the more value a marketer delivers, the more information a consumer is likely to share”, and that an application that seems to exist only for marketing purposes is unlikely to gain the consumer’s trust.

(Article copyright 2010 The Wise Marketer)

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What Can We Learn From Airline “Unbundling”?

by on Tuesday, August 24th, 2010

Anyone who has flown recently has experienced what the airlines call “unbundling”: separate fees for optional services that used to be bound up in the ticket price. Unbundling means, for example, that a passenger who flies with just a laptop bag will pay less than a passenger who checks baggage in the hold. The passenger who fills up at McDonalds or Starbucks before boarding will pay less than the passenger who wants an airline meal. The economics of unbundling fees for ancillary services have been amply discussed elsewhere: The airlines do well and the passengers … well, it depends.

From the passenger’s perspective, unbundling works best when (1) the service really is optional (i.e, the passenger isn’t coerced to to incur the fee) and (2) the fee itself doesn’t seem like an unreasonable money grab by the airline. Airlines are most likely to be successful unbundling services that a substantial number of passengers either don’t want or need or that they can easily live without or replace on their own.

Suitcases (via Malias - Creative Commons)

Airline food is a perfect candidate for unbundling: It’s easy to get cheaper and better food on the concourse and the airlines no longer forbid passengers from bringing their own on board. Seating is another example. Want a reserved seat? Pay for it. Willing to take your chances on your seatmate? Save your money. Some airlines charge more for seats that are larger or closer to the exit. Worth the extra fee? You decide. These fees are relatively easy to explain to passengers, but airlines on the whole have been lax in communicating with their customers.


Checked baggage fees are also economically defensible, since every piece of checked baggage adds to the fuel required for the trip and thus to the airline’s cost. But airlines are fooling themselves, and doing a disservice to their customers, if they think the economic rationale is self explanatory. While many passengers, especially those on business, don’t check bags and don’t pay the fee, other passengers, especially families, find the policy coercive. One unintended consequence is that passengers have an economic incentive to carry on bags they might otherwise have checked. As the Steven Slater incident reminds us, trying to stuff oversized carry-ons into undersized bins can end badly.

As Bill Hanifin points out, it’s essential that airlines communicate the policy both on the plane and via social media. This is especially important with airline policies that are new, subject to change and may be perceived (rightly or wrongly) as unfair to the passenger. Why are airlines so lax about communicating with their customers? One guess is that there hasn’t been a storm of complaint about most of these fees. But the likely reason for such acquiescence is not consumer satisfaction, but its opposite. As a frequent flyer I hear a lot of grumbling, but most of it sounds more resigned than angry. Many airlines survive consumer dissatisfaction, but only because consumers often have few alternatives and, except for the most egregious service issues, have simply given up. This is the sign of an industry in trouble.


The Zavee takeaway:

  • Communication of any significant business change is essential. Customer dissatisfaction will fill the void if you let it.
  • Don’t assume that customers understand the economics of business decisions that affect them. They aren’t stupid, but economic rationales require explanation.
  • Don’t confuse the absence of complaint for approval. In fact, if you do something that should generate (some) complaints and don’t get them you have a problem that you need to address immediately. Unlike airlines, few small businesses can count on getting away with taking their customers for granted.

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Loyalty: More Than Just Points

by on Tuesday, August 3rd, 2010

In a recent post, Bill Hanifin observes a trend in loyalty marketing to develop programs that keep score “as much by social behaviors as by transactional.” What Bill is saying, I believe, is that marketers can and should look beyond points-based programs that are oriented solely toward attracting one more customer, one more sale and one more item in the basket.

Nurses at Veterans Hospital, 1951

Social behaviors can include writing a review, posting a video or playing an online game. All of these behaviors are evidence of increased customer engagement with the brand, all can result directly in increased sales and profitability, and all can be measured and evaluated. Some of these behaviors, especially recommendations and user-generated content, can leverage social media channels to result in astonishing ROI. For example, who could even guess at the value of the Old Spice social media campaign?

Marketers should not lose sight, however, of the benefits of old-fashioned “surprise and delight”. I recently had several of these experiences, all in unusual contexts. As readers are aware, my house caught fire last week and was saved by the alertness of our central station alarm company and the skill and bravery of our volunteer firefighters. As I mentioned in a post about the fire, the firefighters used tarps to cover furniture that was directly below the fire (and the water). That makes me “loyal”: our vollies are getting as big a check as I can afford this year – more than if they had just focused on the fire and ignored the contents, which the insurance adjuster fully expected.

My exciting couple of weeks also included a serious automobile accident, courtesy of a very drunk driver. I spent a few days in the hospital, where the doctors and staff did everything possible to make my stay easier. I’m not naming the hospital because I don’t want to get anyone in trouble, but I know I was bumped up in line for several procedures, had more visitors (and at later hours) than the rules allowed and generally was made to feel as much like a guest as a patient. And I’ll be happy to recommend the hospital in a private conversation.

The Zavee takeaway:

  • The most effective loyalty programs track behavior as well as transactions.
  • You don’t need a loyalty program to increase consumer loyalty.
  • Don’t forget to surprise and delight.

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Using Social Media for Marketing Research

by on Tuesday, April 20th, 2010

Bill Hanifin always poses the interesting questions every marketer should be asking – but might not be. In a recent post, Bill asks, “How do we gain insight into the customer preferences that drive purchase decisions?”

That’s almost a rhetorical question, because there many marketing research techniques available; Bill skewers discusses them in his post. Bill’s really fascinating question is, “How can we re-engineer our methods of collecting attitudinal data from consumers?” Bill proposes some ways in which Social Media can be part of the answer, and I’d like to suggest some others.

Lifestyle Boards/Moodboards/Market Research via designandtechnologystudentSome very quick background: Researchers use both quantitative and qualitative measures to figure out what consumers want and what makes them buy. Quantitative tools, such as telephone surveys, use statistical principles to draw inferences about a large group from the responses of a random sample of that group. However, they are subject to all sorts of bias (usually unintentional) that can affect the validity of the data. Online surveys are particularly tricky, since their self-selected sampling can never be truly random, which means they aren’t as quantitative as they might appear.

Qualitative tools, such as focus groups, don’t provide the comfort of statistics, but instead are intended to produce insights by probing more deeply into the motivations of consumers. This can get marketers to think in new and different directions. Although our experience with focus groups and other qualitative tools was very successful, they can be compromised by the small number of participants, the group leader’s personality, bias and skill, and by personalities within the group. Whether quantitative or qualitative, however, the data never “speaks for itself.” It’s always subject to interpretation, and sometimes to wishful thinking and oversimplification.

Social Media opens up a world of possibilities for marketing researchers, agencies and marketers. Several characteristics of Social Media tools make them ideal for provoking creative thinking and producing insight:

  1. Penetration. Although it is not equally dispersed across age, education and income cohorts, access to Social Media is extensive and growing, even among older consumers.
  2. Speed. Social Media can be used quickly – almost in real time on mobile devices.
  3. Opt-in. Social Media is inherently permission-based. This may not make it easier to find a random sample for an online survey, but it does make it easier to find consumers who will share their opinions, insights and experiences because they want to rather than because – as in the case of focus groups – they are being paid and fed.
  4. Location-based. Social Media is increasingly being integrated with location-based applications. Location is a variable that does not exist for most focus groups, which usually take place in dedicated facilities.
  5. Interactivity. Social Media is … social. The interactions among participants in a focus group frequently are the most valuable part of the group. Social Media facilitates similar interactions on a vast scale.

How could researchers leverage these attributes? Here are a couple of ideas, all of which are qualitative in nature:

  • Discussions on Facebook pages. Marketers could start conversations on issues that range from very concrete questions, such as opinions on new packaging ideas, to strategic issues such as potential line extensions. Consumers also would be able to launch their own discussions, which the company could either moderate or simply monitor.
  • Scheduled conversations on Twitter. Marketers could use Twitter as an extension of the conventional focus group. Many more voices could be heard over the same period of time than with a typical group.
  • Location-based feedback. Suppose a large restaurant chain wanted a snapshot of server performance during the lunch rush, or a retailer wanted to evaluate restocking at every mall-based store. Consumers could check in at each location and provide real time feedback, including photos and video. This would provide data from a much larger, more varied and possibly more knowledgeable group than mystery shoppers, at a fraction of the cost.
  • Consumer-generated video. Focus groups rarely depart from a conversational model. But it might be very useful for consumers to shoot videos in response to specific solicitations by the marketer. “Make your own commercial” campaigns are a start in this direction, although to be valuable the campaign should encourage consumers not to be constrained by the company’s current marketing.
  • Meetups/Tweetups. Marketers could use Social Media as the nexus for live meetings with consumers. Moderators could ask questions of the group, which could be responded to with live Tweets.

I am sure that others can come up with further – and doubtless better – ideas. These techniques are likely to be low in cost, but they definitely have some kinks or at least raise some issues. For one thing, all research involving Social Media takes place in the open. This is not always a problem but if keeping the subject of the research away from competitors is a priority, the research is not a good candidate for Social Media. Second, there is no way to control – or even verify – the composition of the participants. A marketer who wants specific cohorts represented in a focus group will not be satisfied with Twitter-based groups. However, this lack of control doesn’t have to be a bad thing, if it’s dealt with creatively. For example, a marketer of adult diapers might be tempted to decide against using a Twitter-based focus group because Twitter users are too young; but men in their 20s may have valuable insights into a product that is marketed to women over 60. They have grandparents, after all, and their perspective on their grandparents’ experience with the product might be very valuable.

The discussion above involves using Social Media qualitatively. However, it may be possible to use Social Media for quantitative purposes. According to the Los Angeles Times, a team of researchers at HP Labs has developed a computational model that uses the volume of tweets about a movie and their overall sentiment about the film to predict its box office performance over its first two weeks of release better than any other standard measure. The rationale for this result is completely beyond me, but if the methodology stands up, and the results can be replicated in other areas, we may have to rethink what we mean when we say we are looking for statistically significant results.

The Zavee takeaway:

  • Marketing research is both art and science, and it influences decisions that affect all of us.
  • Social Media is expanding the range of marketing research techniques, usually while reducing costs.
  • If you think marketing research might be right for your business but the expense has kept you away, try to find a research firm that uses Social Media. You might have to make some compromises on methodology, but you may learn a lot more than you expect.

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