Showing posts with label KPIs. Show all posts
Showing posts with label KPIs. Show all posts

Friday, September 4, 2020

Push VS Pull Marketing


Push versus Pull Marketing aka Outbound versus Inbound Marketing respectively describes a marketer's approach when communicating with the market. Since each approach type is better at helping marketers to meet different aims and objectives, marketers can benefit from evaluating their marketing design plans based on how well the chosen approach meets the desired objective. In short, marketers can use such an assessment as a type of KPI when designing promotions or other forms of communication. This post explains these 2 approaches, gives examples and discusses their ideal application
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If considered in a visual way, the concepts of push and pull occur from the perspective of the marketer at the moment of engagement, where 'engagement' refers to interaction between your brand and customer. Push marketing can be likened to the marketer pushing a message onto the public via a megaphone with the hope of capturing the attention of at least some individuals, ie  lead generation. The messages are usually general, non-personalized in nature like your business' name, the announcement of a new product launch, the announcement of a store wide sale and so on. Since the public encounters your message when people are likely just getting on with their lives, this form of interaction is somewhat forceful, intrusive and even interruptive. Another analogy is that of a fisherman casting a huge net in search of tuna. However, of the thousand organisms he reaches with his net, he only captures 2 tunas. In short, push marketing provides a relatively low return. This approach  to advertising is mostly what large companies used before the age of the internet.

Conversely, pull marketing involves establishing a form of passive and continuous marketing  to attract customers to find your brand and initiate the engagement, ie to initiate the interaction with your brand with the use of tools like content marketing with appropriate search engine optimization (SEO) and automatic email nurturing. Quite fittingly, pull marketing is often illustrated as a magnet that is set up beforehand but which exerts a magnetic pull on customers towards itself. This form of engagement allows marketers to demonstrate the brand's expertise which will engender a sense of trust in potential customers. So thanks to the new age of the internet, it is possible to use techniques like search engine optimization to attract customers who already have an interest in finding the solution that your product provides when their search is based on something like "how to treat acne" or "how to unclog pores naturally?". Consequently and in contrast with the more general approach of push marketing, your pull marketing message is related to resolving very specific problems. In many cases, your potential customers no longer need the overly general nature of the push approach. This is because they are already advancing beyond those preliminary stages within their buying decision process / funnel. As a marketer, you only have to 'pull' them (deeper) through your sales funnel (with further engagement). To apply the earlier fishing analogy again; this time, the fishing gear would have a smaller reach of only 30 hooks that are left suspended while the fisherman waits for fish to bite before he attempts to pull up the fish. However, each hook has bait that comprises a favorite food for tunas. In the end, of the 30 bites, 20 are tunas. In contrast to push marketing, pull marketing is so targeted that it generally renders considerably higher conversion rates. 

In short, 'push' marketing aims to create demand while 'pull' marketing aims to satisfy that demand

Example: Your company sells 'natural' cosmetics through several product lines.

Your push advertisements may include paid Facebook ads, posters on the noticeboard of your gym and an ad in the free tourist magazine. Such ads offer limited opportunity for more than a basic and general message. So they mention the name of your company and show before and after images for avatars that represent target customers for each product line. 

On the other hand, my pull advertisements may include content marketing with blogs about skin care. One blog may be titled something highly specific like 'All natural solutions for acne'. This post allows you to showcase your business as an industry expert. For instance, you can discuss the structure of the skin and how sulfur dissolves dead skin on the epidermis. You may also mention findings of peer reviewed scientific studies that showed a significant change at the usage rate of 10% and how sulfur offers a gentler, less drying effect than a competing ingredient like salicylic acid. At some point, you can introduce your product which has 10% sulfur, along with other secondary ingredients that together provide an amplified synergistic effect against acne. Your communication need not be such an overt advertisement either. For instance, you may also simply discuss matters that generally keep the attention of your target like how they can correctly identify their skin type, correct techniques  for hand washing and so on.


Is one approach better than the other?

Neither approach is inherently better than the other. Rather, one may be better suited than the other for meeting current objectives. Here are some examples.

  • Objective: brand awareness of a new unknown product or brand; to reach a wide audience.
  • Approach: Push marketing of a general, non-personalized message that simply allows the public to know that the product exists that helps with lead generation. The brand is not yet known like Coca Cola for instance and therefore needs your definite manipulation to get recognition. Examples include the use of billboards, advertisements on the back of buses, radio and television advertisements, curbside store promoters handing out fliers, Point of Purchase (PoP) displays like shelf talkers that say 'New', a social media post that says 'New Line' and so on. NB In addition to applying push marketing, a new product and brand may also need to use pull markering within a single store. 


  • Objective: customer engagement to encourage a long term relationship via continual engagement.
  • Approach: Examples include the use of shelf talkers that promote specific benefits of individual products, announcements of a limited or special editions whose design is based on the usual theme of the already liked brand, a blog with topics that are relevant to the target market.

  • Objective: to differentiate your brand in a saturated industry (like clothing).
  • Approach: Use pull marketing. Examples include celebrity (including influencers) posts showing them using the product. 

  • Objective: A salesman wants his high commission brand to compete favorably with other competing brands in an environment with lots of 'competitive noise'.
  • Approach: Use push marketing.  This approach is far more capable of manipulating the outcome (than pull which allows the customer to take action when or if he wants). However, beware, pushing can force people into sales with which they are dis-satisfied and is less likely to help in building long lasting customer relationships. It is therefore better used for small ticket items that do not require research or any form of due diligence. Examples include the salesman tells customers about the brand he tries to sell them. He does not allow customers to amble through the store alone to allow the shelf talkers to work.

  • Objective: To sell a high end, high consideration big-ticket product.
  • Approach: Use pull marketing that is not pushy or manipulative (like push marketing). This approach encourages greater trust. You listen more closely, responding directly to personal concerns. Examples include one-on-one discussions, live chat technology, encourage customers to leave reviews.

  • CONTENT RELATED TO PUSH AND PULL MARKETING

    • Tribal marketing relies on pull marketing messages to connect with tribe members.

    Friday, August 7, 2020

    Rewards Catlog for Loyalty Rewards Programs


    The rewards catalog is a critical element of any loyalty & rewards program whose design can predict the level of customer participation and ultimately the program’s success. If you consider it a type of product you offer, you will appreciate just how much it needs to add 'excitement value' to your target market. 

    Since the rewards catalog is the reason that customers participate, a cardinal sin is to relegate its curation to an afterthought. As with any other product, it requires due research and development, testing and responsive adjustments. 

    The stakes are high! A mild negative reaction is one of 'redemption inertia', ie a situation in which customers do not bother to redeem rewards even though they have accumulated sufficient points. In such a case, customers likely find the rewards unattractive. However, in the worse worse case scenario; the failure of the program will very likely adversely affect future initiatives.

    Here are factors that affect customer engagement and, in turn, the effectiveness of a rewards catalog. Also include them as your program's key performance indicators (KPIs).
    • Level of 'excitement value' to the target market
    • Inclusion of 'big' / aspirational rewards and the perceived level of their attainability. Aspirational rewards relate to those aspirations that help customers achieve some type of social prestige and perceived success. If well conceptualized, aspirational rewards can create much needed 'excitement value' for your program. Additionally, these rewards must be deemed attainable in order to prevent the lack thereof from depressing engagement among customers who feel that there is no point in attempting to earn the big rewards. Example of aspirational rewards: Exclusivity marketing in the airline industry creates strong aspirations for first class airline tickets
    • Level of variety of rewards.
    • Reward intervals. Reward intervals relate to the time period it takes to gain some reward. If reward intervals are too wide, members will become frustrated. 

    DOs & DONTs
    • Create customer segments based on psychographic classifications that help you to personalize your interaction with each customer. For instance, incentivize customers to provide this information during their account signup.
    • Analyze member distribution re tiers, reward price tolerances, etc. For instance, many rewards catalogs allocate a single price to a group of reward items. In other cases, modern programs also have distinct tiers. What is the distribution of members according to their price tolerance in points? What is the average redemption order value per group? What are each group's key performance indicators (KPIs) regarding the loyalty rewards program in general?
    • Analyze and adjust the distribution of catalog items according to past and current data based on details that include the following.
      • most redeemed items
      • most ignored items
      • Are the prices in points of items related to their redemption rates? If you changed the rate, was there a 'reservation price' in points?
    • Analyze the meaningfulness of attainable aspirational rewards. Customers need something for which they strive. Analyze the information on individual member profiles along with their ability to earn points to determine whether their attainable rewards can offer sustainable 'excitement value'.
    • Wherever possible, provide fun participation.


    CONTENT RELATED TO REWARDS CATALOGS FOR LOYALTY REWARDS PROGRAMS

    Sunday, July 19, 2020

    Measure Success: Loyalty Rewards Programs: Monitor & Control

    A loyalty rewards program is designed to promote repeat high value sales. It creates a type of marriage with your customer that aims to keep them from looking elsewhere. Consequently, if your customers are not seeing value in buying again or even enjoying the rewards, your program is likely failing at its objective. 

    Measuring customer loyalty is necessary to ensure that you are meeting your goals. Use different metrics to evaluate and adjust your program to ensure that you are growing a staunchly loyal customer base.

    This post is concerned with the monitor and control of your loyalty program. Specifically, it discusses different ways of measuring your program's success and offers suggestions for optimization.

    Repeat Purchase Rate (RPR)




    The repeat purchase rate (RPR) is the percentage of customers that return to make another purchase. The RPR is a great measure of customer loyalty. This information is also useful from the perspective of reducing advertising costs and increasing your bottom line because research shows that repeat customers convert at 12 times the rate of new ones. See how to calculate the RPR below.



    It is ideal if you already have a database of customers. Otherwise, your loyalty program will give you that opportunity to begin building one. 

    To calculate the RPR, establish the number of repeat buying customers, ie ones who purchased from you again. Divide that number by the total number of ALL customers in your database. Then multiply the result by 100 to arrive at the RPR expressed as a percentage. 
    BENCHMARK: 20% to 40% RPR is generally considered a good range. Consider this metric along with the average order value (below). 

    Average Order Value (AOV)


    The Average Order Value (AOV) refers to how much in dollars customers spend on each order. Some nickname it the measure of 'customer love'. Retailers can benefit a lot by tracking and increasing this metric. For instance, the AOV allows you to see how well you offset customer acquisition costs. Specifically, increasing AOV reduces acquisition cost and therefore improves your return on investment (ROI) re marketing. This metric is ideally considered along with others like the repeat purchase rate / RPR (above). After all, what benefit is there of having high repeat purchases that are too low in value to justify your service? Within the context of the Covid19 pandemic during which time brick and mortar retail businesses worked fewer hours, increasing this metric is helpful in raising overall revenue. 



    All the same, the AOV is sometimes useful in evaluating how well your customers are spending on each order. Calculate this metric by dividing total revenue in dollars divided by the number of orders. The AOV is expressed as that dollar value.

    NB. Also use the AOV for creating future success. For instance, if they can afford it, marketers may use the AOV as the base for establishing the value of rewards / reward points to offer advocating customers for referring friends. Ideally however, offer this reward to new referred customers only AFTER they have made purchases to ensure that you break even. In other words, the AOV will not only be the reward but also the minimum value of a new customer's purchases required for earning the rewards.

    Redemption Rates (RR) for Loyalty Rewards Programs

    The redemption rate for a loyalty reward program is the percent of points that have been redeemed for rewards, ie out of all those that had ever been previously earned. See the formula below. The score for 'total points spent' should include ALL points redeemed since the program's launch. That number must be divided by the total of ALL points ever issued since the program's launch, even those that expired. Then multiply the result by 100 to arrive at a percentage.


    Example: 
    Redemption rate = (15,700 points redeemed aka spent / 103,000 points ever issued, including expired points) X 100 = 15.24%.

    BENCHMARK: The average redemption rate for loyalty rewards programs vary around 14% to 20% and above. If yours is lower, consider making improvements.


    Average Customer Lifetime Value (CLV) of Loyalty members

    An effective loyalty rewards program should boast an average customer lifetime value (CLV) that is higher for loyalty members, ie over the CLV of non members. 

    If you have the wherewithal, I would suggest running statistical analyses that compare independent groups like T-tests (for 2 groups) or ANOVA (for 3 or more groups). Although a group will invariably have a higher CLV than another, eyeballing differences is not always useful because such differences are not always to a statistical degree and therefore may not always warrant attention. For help with this, write me, referencing this post and specifying that you need to statistically compare groups.

    A statistically higher member CLV suggests that the current program is performing well and deserving of further investment. Otherwise, the program may be based on an outdated approach and need to be redesigned to better adapt to modern consumers.


    Active Engagement Rate (within the loyalty rewards program)

    As previously discussed, including engagement in loyalty rewards programs has been shown to engender more meaningful loyalty than the old 'earn & burn' purchases-only based loyalty program. The active engagement rate (AER) indicates how many customers are not only participating but 'actively engaged' with your loyalty program. Engagement relates to non-purchasing activities like referring friends and using social media to review your products, comment on your posts and so on. 

    To calculate this metric; divide the number of customers who engaged within a period over the total number of customers within the program. To express the result as a percentage, multiply by 100.


    Redemption Cycle Time
    This metric refers to the amount of time it takes for customers to move from earning to redeeming awards. The rewards must appear attainable.

    To calculate this, consider using a calender calculator. Calculate the number of days between the first awarded rewards and first redemption.

    Redemption Cycle = Date of redemption - Date of first awarded reward(s) 

    BENCHMARK: Your high-value customers should be able to redeem a reward within 3 to 6 months. However, your next most valuable tier should be able to redeem within 6 to 9 months.


    DO's & DON'TS 
    Example: Implement some form of data collection. The ideal for those with a sufficiently large budget is to integrate a CRM with the point of sale that tracks all data required to run the analyses.
    • To increase the average order value;

    • establish minimum purchase thresholds that qualify customers to enjoy desirable benefits. 
      Example. Free shipping on orders over $100

    • offer volume discounts
      Example. Get $3 off if you spend $30.
    • offer product bundle
      Example. Rather than buy only product x, also buy products y and z for an overall lower price of $105.
    • cross sell
      Example. With that hair brush, you can also get a bag that was custom made to hold it perfectly.
    For instance, beyond rewarding for transactions. also reward customers for engagement, interactions, social sharing, health or other goals related to your brand's core values
    • Provide cues that remind customers to redeem their rewards. Cues may include visual reminders on your website or brick and mortar store. Cues may also include verbal reminders at checkout or other points of contact.
    • Encourage frequent participation. The earning rate and frequency of participation in general have been shown to relate to a customer's redemption rate. 
      Example: Send messages to customers who have been inactive over an extended period

    • Just as you would with new or pre-existing products, promote your loyalty rewards program. Ensure its memory is alive and well in the minds of your customers.

    • Make the process clear and easy to follow. Get tips on how to make an explainer page.
    • Ensure that rewards have perceived value. Some examples include the following.
      • Personalize rewards as much as possible. In fact, this was the single most desirable factor identified in one research study (by Wells Fargo. 77% surveyed consumers agreed).
      • Allow customers to select their rewards whenever possible. This is why I personally like the idea of having a rewards catalog.
      • Collaborate with other complementary brands to create rewards. Ensure collaborating brands share your core values and honor your target market's lifestyle. (Wells Fargo found that 70% of consumers agreed with this).
      • Offer rewards that are exclusive.
    • Remind customers of their total available rewards. Ideally, use email services that integrate with your points database to automatically insert the total points within the body of emails. 
    • Reward customers for mentioning their redemption over social media. By rewarding evangelists, you also motivate them to resume the process of earning points.
    • Conduct market research on your program to get customer feedback that can inform how you can improve your program.
    • Recognize that, outside of your efforts, many other variables impact on the redemption rate. They may include industry, location, ease of redemption, program awareness, the perceived value of rewards and the age of your loyalty program. 


    CONTENT RELATED TO MEASURING THE SUCCESS OF THE LOYALTY REWARDS PROGRAMS

    Monday, July 6, 2020

    Brand Awareness Measurement

    This post focuses on measuring brand awareness is an extension of the discussion on brand awareness and brand awareness strategy. Measurements of brand awareness include the following. Perform this form of research at regular intervals while maintaining as many variables the same like the target respondents, location and so on. Although this type of research is the most costly, it produces the most internally valid form of data.
    • Brand Recognition / Aided-Awareness checkbox survey. Provide a list of brands to customers and ask something along the lines of, "Which of these brands do you recognize as offering product X?". This is an internally valid way of measuring recognition through aided-awareness.
    • Recall , unaided awareness, open-ended survey. This involves asking an open ended question for the brands that people know offer product X. Example, you leave a blank space to allow respondents to respond to the question; "When it comes to brands in this market, what brands have you heard of that offer product X?"

    The following methods of measurement are common but arguably not as internally valid as the first two.
    • Direct traffic. Direct traffic refers to situations in which someone types in your brand's web address in order to find information, ie as opposed to writing generic text in order to find options. For instance, compare traffic periods 1 against 2. If direct traffic is growing over time, it means that brand awareness is growing.
    • Search volume. How often do people search for your particular product by name? Of course, this also depends on the uniqueness of your brandname as some names like 'Apple'  can be the subject of searches regarding the fruit and not the technology company.
    • Impressions. This refers to how many times your advertisement or content was viewed, regardless of whether the audience clicked through. If you also maintain YouTube content, the views can count also.
    • Reach & Frequency. Reach refers to the unique number of people to whom your advertisement or content was served. However, the frequency (ie impressions) may be a higher number as the same person may see your content multiple times over a specified period of time.
    • Social listening aka Media monitoringSocial listening is the process of monitoring unpaid online discussions about your brand. (This helps you to understand what customers are saying about your brand.


    CONTENT RELATED TO BRAND AWARENESS MEASUREMENTS