THE HALLMARK PERSPECTIVE - Customer Engagement · o you ever watch classic TV commercials and laugh...

CUSTOMER ENGAGEMENT Boldly Transforming Your Customer Experience

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THE HALLMARK PERSPECTIVE:Boldly Transforming Your Customer Experience

Every time I speak at conferences, people are drawn in because they hear the name “Hallmark.”

There’s an immediate recognition factor as we think of buying and receiving greeting cards and Keepsake Ornaments or watching Hallmark Hall of Fame movies. It’s a brand that makes you feel emotionally connected to others, and people are naturally curious about what goes on behind-the-scenes.

The first question I typically get is: What is Hallmark doing in the B2B world? Easy. Hallmark is about relationships, and relationships are just as important in the business world as they are in our personal lives. People need to be recognized, treated well and seen as individuals. Those are the rock-solid truths about human nature. Hallmark Business Connections focuses on the relationships that make businesses thrive.

At Hallmark Business Connections, we’re thrilled to count half of the Fortune 100 companies as clients, as well as small- and medium-sized businesses from a range of industries, each with their own viewpoints, pain points and goals to achieve. It’s a fascinating experience to partner with and learn from such a diverse group.

When I talk to our many clients, we buzz about industry trends, customer experience, marketing and the bottom line. I hear about their challenges. Those conversations led to this ebook. Let’s explore where smart, right-minded CX strategies go wrong and what you can do to keep your CX initiatives on a path to success.

Rhonda Basler,Customer Engagement Director

Hallmark Business Connections


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Fellow Marketers, We’ve Created a MonsterUnderstanding Why We Must Embrace the Customer Like Never Before

Do you ever watch classic TV commercials and laugh that those ads could never stand up to the modern, sophisticated customers of

today? I’m a big fan of little Alka-Seltzer® and soaking in dishwashing liquid for a manicure, but when I look at many of today’s marketing campaigns, whether on TV, print or online, I can’t help but feel we updated the language and look, but in so many cases, it’s the same old technique.

When marketing dollars were plentiful (think pre-recession), we spent like crazy, trying to gain potential customers’ attention. Online gave us new horizons, and we invented thousands of ways to get our message in front of customers. We thought outside the Johnson Box big-time and put ourselves in our customers’ line of sight everywhere…to the point of becoming wallpaper. People became overloaded with marketing messages. So what did we do? We created even MORE advertising and ended up fading into the landscape altogether.

When we couldn’t find new advertising spaces, we got craftier…leaning into the shocking and unexpected like never before. Some ideas were brilliant; others were outright misleading and dishonest. Remember the ploy of handing out business cards and fliers that looked like dollar bills? The bigger the denomination, the better. Over time, consumers could hardly distinguish between an honest ad and a misleading one.

To what extent do you trust each type of advertising1

Brand/Product recommendation from friends/family67%

Income > $100,000Age 18+

57%

45%

41%

29%

<20%

Profressionally written online reviews

Consumer written online reviews

SEO results

Information on a company’s website

Ads in newspapers and magazinesPosts by companies on social networking sitesInformation on mobile apps from companies/brandsEmails from companies/brandsText messages

Forrester, Technographics

The social media

posts by friends,

family and people

you don’t even

know have a power

that goes beyond

creative, well-

designed ads.


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As we pushed the envelope to attract the attention we desired, we succeeded. But it came with a price. The inundation and misleading nature of some advertising taught people not to trust us, but they do trust each other.2

Think of where you’ve seen recommendations that influenced your purchasing behavior lately. Facebook? Amazon? Yelp? And that’s just for starters. The social media posts by friends, family and even strangers have a power that goes beyond creative, well-designed ads.

So what’s a savvy marketer to do?

It’s time to embrace the customer like never before and shift spending dollars out of the marketing pre-sales world and into the post-sale experience. Create human moments with your customers, and you’ll create meaningful, memorable experiences. Your customers will feel connected to your business and become your best marketers as they happily tell others about all the great things your business provides.


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I’ve talked to many companies that are very loyal to their loyalty programs.

Loyalty programs are great. Hallmark’s Crown Rewards program was one of the first to launch and is still in existence today. Reward programs provide a database of names that have opted in to receive your special offers, and that encourages repeat purchases. Fantastic start, but if you’re looking to build advocacy, a loyalty program might not get you there. Keep long-term loyalty program commitments, but try dating other strategies, as well.

A recent study of over 60 major retailers found that despite having a well-built loyalty program, they’re failing to emotionally connect with their customers.3

Every time I go to the store and am asked if I have my card, I shuffle through the deck, search for the right color and logo or scan my phone screen for the right app. Turns out, my loyalty only goes as deep as the consideration that the store’s location was convenient on my route of morning errands.

REWARDSLOYALTY

BIG loyalty programs, meaning that over time the program has grown to be a substantial way the company goes to market, can make it easy to hide behind as the go-to interface with customers. The points or rewards system and rules can be structured logically, be easy to understand and offer good value, but if you’re not engaging your customer, the loyalty you’re getting is on an as-needed basis. The member feels like account #5216720 and nothing more.

My advice: Create a customer engagement strategy that personally

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Being Loyal To LoyaltyConnecting Has to Go Beyond a Rewards Program

Customers of

retailers who offer

a loyalty program

are no more loyal to

those retailers than

they are to those who

do not offer one. The

average consumer

is enrolled in 18

programs with many

structured similarly.4


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and emotionally connects with your customer. Find all the touchpoints between your company and your customer and look for little ways to surprise and delight them. Once again, create human moments in your customers’ day. When you engage their hearts as well as their minds, they’ll become megaphones for your brand.


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Companies that have created roles such as Chief Customer Officer (CCO) or Head of Customer Experience have taken a significant step

toward realizing the value of customers. But let’s not put them into an unwinnable space.

While companies are making the commitment to hire these roles, are they giving these advocate leaders the real power and authority to make changes in the organization? The investment starts with a salary, but needs to go beyond that to changing reporting structures and moving budget dollars from one functional area to another.

This is a touchy subject. How many leaders want to give up resources in the form of people and dollars? If it is perceived as a loss of influence, there’s conflict. It’s also hard on the employees who have to go through the restructure. Loyalty is tested when having to deal with new bosses and reports, not to mention getting on board with shifts in strategy. Change is hard. It takes time, money and patience to get through it.

At Hallmark Business Connections, we work with a company that created a CCO role. The individual was smart, dynamic, truly competent and capable. Unfortunately, the many customer service departments in the organization didn’t ladder up to his reporting structure. He was the army of one. When he outlined the steps the company could take to enhance the customer experience, he was immediately mired in politics and negotiations. In the end, there was no change, no improved net promoter scores and no business results attributable to his efforts.

Having the title in place doesn’t necessarily mean the company has put the stake in the ground to improve the customer experience. Without the right reallocation of human and financial resources, action plans don’t get acted on and the focus on customer experience bears no results.

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The CCO IslandA CCO Alone Will Not Create CX Change


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Net Promoter Score (NPS), Customer Satisfaction Score, Client Experience Index—finding and using the right Key Performance

Indicators (KPI) is vital to knowing how CX is contributing to business results.

Don’t just jump on the NPS bandwagon. NPS is absolutely the right measure for some companies, but not for all. Kerry Bodine of Forrester® mused on just that topic in her blog entry 2013 Customer Experience Predictions:

EMOTIONAL INSIGHTS WILL TAKE CENTER STAGE. The idea that happy customers are more likely to remain loyal, try new products and services, and spread good news about their experiences has started to catch on. Over the past several months, we’ve seen a rise in the number of companies pondering the connection between enjoyment and metrics like satisfaction and Net Promoter Score (NPS). In fact, one global company statistically demonstrated that several emotional factors trump NPS in predicting customer loyalty, effectively dethroning “would you recommend?” as the ultimate question.5

These measurements are the guiding light for focusing on and improving the customer experiences that lead to advocacy. It’s important to continually ask yourself if you’re measuring the right things. B2B companies often find they have a hard time correlating NPS directly to business results. Basic satisfaction measures become more actionable than NPS for some companies. While it does take some analysis, survey results combined with behavioral and historical purchase data can be used to create a predictive model so that you can assume satisfaction levels for customers who have never taken your survey. This gives you a way to take your CX efforts to a highly individualized action plan for each customer.

Just improving your average KPI number isn’t enough. Knowing where your scores fit in on the KPI spectrum gives you a competitive advantage.

1. Compare your ratings to others in your industry. If you can’t make a direct comparison, do research to have an apples-to-apples comparison of your scores to your competitors’. Wouldn’t you like to know how many points better you are? (Or, heaven forbid…worse.)

2. Look outside your industry at highly rated companies. They’re vying for your customers’ attention, too. Remember that the

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THE CX KPI CHALLENGEFinding and Utilizing the Right Customer Experience Measurements


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companies that really excel at customer satisfaction not only excel within their industry but across industries as well.

Even if your numbers are looking great, it’s not time to pop the cork. The 2013 Temkin Experience Ratings looked at 246 companies across three dimensions: functional, accessible, and emotional. Their assessment was chilling:

EMOTIONAL EXPERIENCE IS THE WEAKEST.Across all 18 industries, the emotional experience scores fall well below the functional and accessible scores. Only five industries…earned an average rate of okay.6

If you really want customers to sit up and take notice, foster an authentic emotional relationship with them. Emotions tend to run high in boardrooms, but not many C-Suite executives like to talk about, let alone measure, emotions. To know if you are making an impact, include measuring emotional engagement in your KPIs.


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I’ve talked to many companies who have a hard time proving the value of their customer experience efforts. They may have tried some CX-

focused initiatives, but didn’t see immediate results and abandoned ship too soon. The key is to prove that individual tactics are making an impact on the KPIs, and those efforts will lead to long-term improvements in loyalty, retention rates, advocacy and profitable revenue.

Like any typical direct marketing effort, when a touchpoint is deployed, a measurement plan should be in place that includes a control group that does not participate in that touchpoint. Many times traditional measures are useful: response rate, lift and ROI. But to get to the numbers you need, you have to look at the impact to your CX KPIs.

After the touchpoint is initiated, conduct a survey including your KPIs. Compare the results between the control group and those that received the deployment. It will give you a quick read on the emotional impact to customers and your CS KPI.

Touchpoint

Positive Impact to Customer ExperienceExample of Individual Touchpoint Measurement

No Touchpoint(control group)

200200No. of Surveys(typically via phone)

Average Score 7.56.2

45%45%Retention Rate

In this example, the KPI for those who received the touchpoint is 1.3 points higher, a quantifiable indicator that the impact of the touchpoint will improve overall loyalty and retention. Notice that the retention rate is the same for both groups. This is typical. The measurement of the touchpoint typically happens within 1-2 weeks of the activity, but that’s not enough time to show an improvement in retention rate. Continue to analyze the correlation between the touchpoint measurement and retention rate to ensure your short-term improvement is translating to long-term impact.

The measurement may seem simple, but the power comes in knowing what touchpoints are making inroads so you can continue to test, measure, learn and improve.

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ABANDONING SHIP TOO SOONMeasuring Short-Term Impact Leads to Long-Term Business Results


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THE INTERSECTION OF CX AND SOCIAL MEDIAGetting Your Customers to Convey Your Brand Essence

When I collaborate with companies on the intersection between their customer experience journey and their social media strategy,

I sometimes run across an unspoken attitude: Social media is just another way to showcase product and send offers. As a result, people will naturally think the company is awesome and cool.

These companies fail to realize that the biggest benefit of social media is the ability to listen and learn. With the right responses, these dialogues pay huge dividends in creating great experiences. They not only foster brand advocacy but inspire customers to convey your brand values to others.

How many times have you heard, “That should be a Hallmark card!” One of the ways we connect with our consumers is by giving would-be greeting card writers and designers the opportunity to create cards for us. The winner’s card is then sold in our many distribution channels. Through this customer-focused experience, Hallmark has realized the benefits of building genuine relationships with its fans. Using two main access points—Facebook and hallmarkcontest.com—the competition has become a vital way for our company to connect with a collaborative, engaged group of followers who get behind-the-scenes access.

The Hallmarkers involved in this project take the time to get to know the contestants, not because they have to but because they want to. These employees listen and learn what’s important to our customers. They take care to note important trends and insights about our products that we

Smart consumers—

and their buddies—

are no longer dealing

with businesses,

they’re forming

relationships with

them, and the most

trustworthy brands

will establish the most

loyal and engaged

customers.7

The Facebook cover of Hallmark’s your GREETING CARD COMPETITION

is a photo of our contest team and 47 fans who attended a recent

Fandemonium event.


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might not otherwise find out. Hallmarkers stay on this team for years because they’re having every bit as much fun as the participants. When you talk with them, you can feel the passion they have for their jobs, the brand and its products. They convey the company’s vision of creating a more emotionally connected world. (Yes, Hallmark is an extraordinary place to work!)

place to work!)

Because of its vibrant and strong culture, Hallmark has the confidence to empower its employees to represent corporate values in everything they do. The bonds they form create trust that transforms engaged customers into advocates who recommend Hallmark and its products in an organic way.

A typical Facebook dialogue between staff and contestants features inside jokes and their own vocabulary.


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How many of you have recently conducted your own stealthy secret shopping mission and experienced your company from a customer

point of view? Some companies like Credit Suisse Group and Adobe® are taking their top leadership through customer immersion programs. They soon find out first-hand the frustrations of being on the other side. Adobe, a world-class leader in digital experiences, found out they weren’t the easiest company to do business with. This realization resulted in a shift in their thinking and behavior.8 Hats off to these innovative CX companies, who are finding ways to drive business results by taking an honest look through the customer lens.

Advocates are five times more valuable than average customers based on their favorable ratings and reviews, positive testimonials, positive comments on social networks blogs and online forums, along with offline recommendations.9

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Upgrading Your Customer Experience StrategyWhy You Absolutely Have the Time, Energy and Budget to Focus on Advocacy

Research keeps proving that once customer experience is measured, improved and advanced, business results follow.

With 66% of the economy being influenced by personal recommendations11, how can companies not afford to concentrate their efforts toward creating advocates? It’s that simple. Customer experience creates advocacy, and advocacy drives business results.

Each affluent advocate is worth

3.5 times an average customer10


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WRAP UP

All Hallmark managers are trained in the Woodstone High Performance Model. As I’ve written this ebook, the Rules of Engagement keep going through my mind:

1. You are accountable for your own performance.

2. You are accountable for the success of your stakeholders.

3. You must be willing and able to subordinate your personal agenda for the good of the company goal.

As I consider the many changes, evolutions and revolutions that must happen before a company becomes the best customer-centric organization it can be, I focus on the third rule. When I see companies successfully navigating this journey, it is often because their leaders are able to set aside personal agendas and boldly transform the experience.

WHAT WOULD HAPPEN IF… Marketers collaborated with sales and service leaders to discover ways to create better experiences and were even willing to allocate budget to make those experiences happen?

Loyalty programs included creating relationships, not just points, awards and communications?

Companies determined the best way to align resources and report relationships to the Customer Experience leader?

We think differently about the right CX KPIs, including how to measure the emotional impact, and then compared scores to our competitors?

We become steadfast in our measurement of short-term, individual touchpoint measurement and how that impacts long-term business results?

We empower our employees to create experiences that cause our customers to convey our brand essence to others?

Your business grew by 3.5 times what it is today?

I invite you to boldly transform your customers’ experience.

Rhonda Basler leads the Customer Engagement team at Hallmark Business Connections. An avid business trend watcher and strategic thinker, her customer advocacy expertise stems from more than 15 years experience in data-driven and brand marketing.

[email protected] Business Connections121 South 8th StreetMinneapolis, MN 55402800-765-4438LinkedIn: www.linkedin.com/in/rhondabaslerTwitter: @rkbasler


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Immerse yourself in the very best customer experience thinking.

Customer Experience Professionals Association (CXPA). http://www.cxpa.org/

CXPA is a global, nonprofit organization created to “guide and enhance the growing field of customer experience management. CSPA brings together like-minded professionals focused on advancing the practice of customer experience management.” I attended a CXPA conference this spring, and it was a terrific, enlightening experience.

CustomerThink. http://www.customerthink.com/

A global online community of business leaders and a great place to learn about customer-centric business management through articles, blogs, interviews, and news.

Forrester Research, Inc.www.forrester.com.

Use the keywords “Customer Experience” in Search, and follow these analysts: Kerry Bodine, Megan Burns, Harley Manning, Paul Hagen and John Dalton. (You’re sure to find many more.) Every year, Forrester hosts two customer experience forums packed with information to help companies with their customer experience journeys.

Harvard Business Review. www.HBR.org

Check out the March, 2013, issue on “Advertising That Works,” and in particular, “Advertising’s New Medium: Human Experience.” The article offers good advice on how to integrate advertising into everyday life by providing relevance and value in each sphere of human experience.

Outside In: The Power of Putting Customers at the Center of Your Business. Harley Manning, Kerry Bodine, Josh Bernoff. Published by Forrester, this book is filled with strategic insights. Find it at: http://www.amazon.com/Outside-In-Putting-Customers-Business/dp/0547913982

Tempkin Group. www.temkingroup.com

Tempkin Group is a customer experience (CX) research and consulting firm founded by Bruce Tempkin, a widely praised expert in customer experience. Tempkin also co-founded the Customer Experience Professionals Association (CSPA). Subscribe to their monthly journal, Customer Experience Matters.

The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World.Fred Reichheld with Rob Markey. This book covers the basics plus metrics and applications. The case studies bring to light how corporations are using NPS as a cornerstone for sustainable growth. After this compelling read, you’ll understand why The Economist refers to Reichheld as the “high priest” of loyalty. Find it at: http://www.amazon.com/Ultimate-Question-Revised-Expanded-Edition/dp/1422173356

1to1® [email protected]

Subscribe 1to1 Magazine, a weekly online digest focusing on maximizing customer value. 1to1 Media is a division of Peppers & Rogers Group, who are recognized leaders in customer strategy and relationship marketing.

CUSTOMER EXPERIENCE RESOURCES


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ABOUT HALLMARK BUSINESS CONNECTIONS

Hallmark Business Connections is the business-to-business unit of the iconic Hallmark Cards brand.

We’re proud to work with over half of the Fortune 100 companies to provide strategic insights that draw on our communication expertise to create:

groundbreaking employee recognition programs to celebrate milestones and reward achievements

motivating wellness engagement initiatives to encourage a lifestyle and mindset of well-being

compelling customer engagement outreach that touches customers at a personal level and fosters brand advocacy

From turning customers into advocates, employees into champions, and companies into healthier environments, Hallmark Business Connections leverages over a century of crafting personal messages into innovative and customizable solutions that impact both customer and employee engagement. We help businesses build and strengthen the relationships that make them thrive.


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1 – Forrester Research, Inc. Consumer Technographics©

2 – Vickers, Amanda and Jackie Smith (Directors, Speak First). Why Consumer Trust Is The Key to Repeat Business. The Wise Marketer. January, 2005. http://www.thewisemarketer.com/features/read.asp?id=54

3 – January 2013 survey – Edgell Knowledge Network (EKN)’s State of the Industry Research Series: Customer Loyalty in Retail report. http://www.retailwire.com/discussion/16527/why-dont-loyalty-programs-connect-with-consumers)

4 – January 2013 survey – Edgell Knowledge Network (EKN)’s State of the Industry Research Series: Customer Loyalty in Retail report. http://www.retailwire.com/discussion/16527/why-dont-loyalty-programs-connect-with-consumers)

5 – Bodine, Kerry. Forrester Blogs. Forrester’s 2013 Customer Experience Predictions. January 4, 2013. http://blogs.forrester.com/kerry_bodine/13-01-04-

6 – Tempkin, Bruce. 2013 Temkin Experience Ratings. February 2013. www.temkingroup.com

7 – Baer, Drake. The Competitive Advantage of Gaining the Customer’s Trust Early. April 26, 2012. http://www.fastcompany.com/1835270/competitive-advantage-gaining-customers-trust-early

8 – Brown, Christopher. How Customer Immersion Programs Amplify a Customer Culture. Market Culture Blog. October 26, 2012. http://blog.marketculture.com/2012/10/26/how-customer-immersion-programs-amplify-a-customer-culture/

9 – © IBM Corporation Global Chief Marketing Officer Study.

10 – Bain & Company. 2011 in Wealth Management.

11 – Court, David, Dave Elzinga, Susan Mulder and Ole Jorgen Vetvik. The consumer decision journey. June 2009 | byDavid Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik McKinsey & Company http://www.mckinsey.com/insights/marketing_sales/the_consumer_decision_journey

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THE HALLMARK PERSPECTIVE - Customer Engagement · o you ever watch classic TV commercials and laugh...

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