Artificial Intelligence in the food safety industry
When I think of artificial intelligence I conjure up images of robots that are highly intelligent and able to make decisions without human intervention. In my mind it is Jarvis from The Avengers movie series. In reality we are far, far away from that type of Artificial Intelligence. Still the future is very exciting and if you come away with one thing from this article I hope it is I want to know more.
What is artificial intelligence?
In computer science, artificial intelligence (AI), sometimes called machine intelligence, is intelligence demonstrated by machines, in contrast to the natural intelligence displayed by humans and animals.
So where are we?
When we say Artificial Intelligence we really mean machine learning. In this article we will look at how a machine or machine learning has the ability to make clear concise accurate decisions based on enough quality data to reduce or eliminate the risk of arriving at incorrect conclusions. In this case, how can we plant, pick, pack, process and distribute food from farm to table and improve the quality at each point along the way. Improvement in the food supply chain can help increase production, reduce waste and by small incremental improvement, make a significant impact by the time a product reaches the store shelf.
Ok, so when we say AI we are referring to machine learning. i.e. the ability for a machine to learn over time through the acquisition of data. The critical element of this process is over time. Understand that two things have to happen. One, machine learning has to be introduced into the equation with some knowledge based on data already mined and two machines have to be on the job long enough to acquire new data to then make decisions to improve the process. The addition of machine learning alone will not immediately solve problems and there is a substantial cost to introduce these new tools. For the moment let’s put the cost aside, because it is always about the ROI and there could be a substantial ROI.
Business is always looking for new tools and methods to understand how consumers tastes evolve over time. If you are in the business and chances are you are, then you know that Consumers tastes are extremely diverse and fickle. For that reason and a number of others businesses are turning to new means to not only find ways to please consumers, but to also improve the quality of foods that are being produced.
Imagine that you could improve by just a small amount at each point along the path everything from the raw material through transportation and manufacturing up until the product reaches the consumers hands. Unless you own the means of production of the raw material, distribution, processing and final shipment to the store the cost of machine learning will not be borne by a single business, but by all. Does that mean prices will rise at first and then fall because there is a cost to absorb? Good question! The initial introduction will be at significant cost and not all will be able to afford it. Over time, like all technologies the price will come down and more and more businesses will be able to use the technology.
Cost will definitely be a factor, but will machine learning change the landscape? It should be imperceptible to the consumer because growers, distributors and producers will still need to compete. Over time those who adopt it first will have a significant edge over their competition and as always speed to market will be a differentiator. And we know that by introducing this new technology into the chain we can improve at every point along the way.
How does it work and why do we need it?
Harvesting data to ensure the food you eat is a huge application for Machine Learning. More than likely in ways that we have not even thought of yet. Farmers will use machine learning to deploy drones that can map topography and look at crops from above to make determinations about quality in real-time and make adjustments. E.g. how much to water the crops and where, to yield the greatest harvest. Also, machines that will harvest the crops can be made out of alloys so they are not susceptible to bacteria and temperature fluctuations and can be cleaned and sterilized at the end of the day. More data will come from temperature sensors attached to intelligent shipping to providing optimal environments in transit. Facial recognition software will be deployed to determine if an item is blemished and other sensors can determine if a product is emitting an odor indicating spoilage.
Over time the acquisition of data will result in increasing the quality of the food that will reach your table. Think about it for a moment if we could improve the quality by a small fraction across the entire food chain there would be a major impact by the time the product reaches the store shelf.
One more thing. I hope to write more about Artificial Intelligence or for now Machine Learning algorithms. If you do decide to keep reading about Machine Learning may I suggestion you grab a copy of Pedro Domingos “The Master Algorithm”. https://en.wikipedia.org/wiki/The_Master_Algorithm
I got mine from my local library.
First things First
When you think of Block what is the first thing that comes to mind? Usually, it is some form of crypto-currency. However, you may not realize that Block Chain Technology can have a life outside of crypto-currency trading. In fact, Block chain Technology has promised to solve issues ranging from crypto-currency trading to tracking shipments of food from the ground to the table ,from origin to the shelf of your supermarket. The application of Block Chain Technology is particular good when it comes to logistics and it has the potential to disrupt the supply chain where many of the process today are done with pen, pencil and paper.
A Use Case
Let’s look at a use case. Your supermarket has received a shipment of produce. Not only has your supermarket received the produce, but all supermarkets in the area, region and in many parts of the country have received the same product. Several customers have complained that they got sick from the product they purchased from your store. What do you do first? Track the product, get all of the details and prepare to find out what happened before you take your next step. However, you want to be cautious, so do you pull the product off of the shelf? What if it was not that product? How can you verify it was that particular product?
When will it be implemented?
How many companies can put the technology in place and how many producers will utilize Block Chain Technology? Walmart has already started to push for the implementation of block chain technology for certain products. They have started a program with IBM specifically to add Block Chain Technology to leafy greens that will land on their store shelves as well as in their Sam’s Club stores. Producers must upload their data into the block chain by September 2019 to be part of the distribution channel. If not, it is very simple, you will not do business with Walmart1. Afterwards, they will expand their program to 100 more companies. Will Block Chain technology be a distinguishing factor for customers the same way that organic or sugar free or fat free has been or will it be even more of a disrupter? Or, will it be a distinguishing factor for supermarkets when deciding where they will source their products, perhaps both. Time will tell if it will make difference to a customer, but more and more businesses see transparency as key to grow their customer base and retain existing customers.
What would you choose?
If you had a choice to eat a meal where you knew where, when and how all of the ingredients were sourced vs. just some of the ingredients vs. none of the ingredients and there was slight price difference, which meal would you choose to eat? Leafy greens, all produce for the that matter, fish, poultry and beef, all of which can be traced from source to table. There is not a product on a store shelf that cannot or should not be traced back to origin and all stops in between. Again, if given the choice to choose between three meals which would you choose? My guess it will be the meal that has full traceability.
Currently, it can take a supermarket several people, 7 days or more to track and get all of the details around a product like a leafy green. Through the use of Block Chain technology it can take one person several seconds 1. That is a huge time savings and time is money, so the ROI can be easily calculated. Also, knowing you can track a problem back to origin means you can take care of the issue quicker. You can help the customer with valuable information so they can seek the right sort of treatment. Take into account the recent problem with e-coli tainted Romain lettuce that had affected 16 states and parts of Canada in October 2018. Since October 2018 up to December 2018, 62 people have reported illnesses, 25 of which were hospitalized and 2 of which developed further complications. As of January 9, 2019 no other cases have been reported and the outbreak appears to be over8. Getting information regarding the details of the product can mean you can get to the heart of the matter faster and that is intelligent business.
There is a tremendous amount of information regarding block chain technology and its use in the food safety industry? My guess is that it is only a matter of time before full implementation is a reality and you and I will be making decisions based on traceability. How long it will take will depend on how much supermarkets and restaurants value their customers and customers push for full transparency.
“A brand is a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers”
1. American Marketing Association
Brand awareness is the degree of consumer awareness of a brand and its related products. Creating brand awareness is one of the key steps in promoting and marketing a product. Brand awareness is particularly important when launching new products and services.
Developing Brand Awareness
Developing Brand Awareness is key to the success of a brand or product in the market. Success will be measured by sales as you acquire customers and by keeping them as you acquire new customers. In today’s market you need an omni-channel strategy weighted towards digital to create Brand Awareness and stickiness in the minds of the consumer. Why, because, consumers have access to information at arm’s length in the form of a smart phone. They have the ability to learn all there is to know about your Brand, your product or your service all in a matter of moments. It is important to show customers that you have already thought out how to engage them during this process. Developing Digital Brand Awareness through Customer Engagement strategies has to be at the tip of the spear. Customer are looking to see if you are Customer Centric or Brand Centric. There is no middle ground. Focusing on the customer helps gain brand awareness.
Focus on the Customer
A colleague of mine sent over a link to a YouTube video and wrote “Watch this and see if you can find where Jeff Bezos talks about the key to Amazon’s success. Let’s chat next week
Jeff Bezos At The Economic Club Of Washington (9/13/18) | CNBC
I watched the video and there it was! “The secret sauce behind Amazon’s success is…… Obsessive compulsive focus on the customer as opposed to obsession over the competition”.
3. Jeff Bezos
Do you want to be like Amazon?
Amazon doesn’t make anything (for consumers), but they do an amazing job of making what they sell available and easily accessible. Amazon makes it easy to order products and return products and they have amazing customer service. Amazon’s focus is clearly on their customer.
In order to be as good as Amazon, be like Amazon, focus on the customer and on their evolving desires. It is the Brands job, to inform, educate and drive Brand Awareness. Unlike Amazon most brands don’t have armies of customer service agents at the ready or advanced technology to pick, process and ship orders or huge piles of money to throw at marketing efforts. Amazon created a great infrastructure to get products out into the hands of consumers. Brands know that customer’s needs evolve over time. Engaging and interacting with them in the digital landscaped to understand their changing desires will not only give you Brand Awareness, it will show that you are customer centric and get you valuable data that will help align your brand with the consumer’s needs as they evolve. Consumers are willing to communicate if you do two things; Listen & Respond. Many brands simply don’t do either or they don’t do it enough. Consistency is key and working with customers is a give and take scenario.
Know your Customer, create your product
In order to be successful you have you have to know your customer to create a successful product. That means constant communication and reassessing your product and product strategy. Give your customer the ability to interact and communicate with you with the least amount of friction. Understand that listening is only half of the equation and that you will need to respond. Responding to customers on social media alone increases their chances to purchase by almost 50% 5. It is important to your customers they know that have been heard. Make the response a critical element in the communication loop because it is the best way to build customer loyalty. Keep them in mind when responding and use rewards e.g. coupons or incentives and give them advanced notice on new products or services that are in queue. You can make these communicators your influencers and brand advocates and create word-of-mouth strategies that can ripple through social media.
Start the Conversation
Don’t be afraid to start the conversation and keep it going. Customers have to know you have the ability to communicate and will continue the conversation. Use all of your digital channels e.g. website, apps, branded campaigns and social media as a mechanism for customer engagement and interaction. Developing Brand Awareness is not a fire and forget job. It is a constant battle and you have to be in front of your customers constantly while trying to gain awareness with new customers. The job of the marketer is not easy, especially in the face of mounting competition and noise in the market. It is hard to capture the minds of consumers let alone their hearts. Good Brand Awareness Strategies start with the customer in mind. Be mindful of what they are looking for and be ready to create the products and services to meet their evolving desires.
- American Marketing Association
- Jeff Bezos At The Economic Club Of Washington (9/13/18) | CNBC
What do you see?
When you look at the world what do you see? When I look at the world I see things that I like and things that I would like to see get better. Or at least in my eyes what it means to be better.
If you had a choice to be one of two people would you: choose to be someone that looked at the world and made a critique or one that can recognize the need for change and was able to contribute?
Lets be clear, it is not a matter of time it is a matter of focus. Some people choose to see the world and say I don’t like that. While, others can see the world and say I think there is a way to make it better. Now, when you see things from that perspective does it make it clearer as to which one I think you would want to become. Hopefully, you are already a creator or an innovator and by the way, if you are not, that is not an issue. Now, you have your chance to change your thought process and become an agent for change.
What people say!
I hear many people say, well that is just not who I am. I cannot not always think of ways to change something. I think this is where people get confused. It is not that they do not have that ability, because I believe everyone has the ability. It is for me two things; first they feel what they can share does not have value and second that they do not wish to share it because of FEAR of REJECTION.
Well, I am here to say if not YOU then WHO and if not NOW then WHEN? Creativity, innovation and critical thinking can be taught and it does not require you to be Albert Einstein or Elon Mush or Tony Stark for that matter. What it requires is just a bit of creative spirit and the ability to let it out.
One of my favorite Einstein quotes
“The true sign of intelligence is not knowledge but imagination”.
Great quote! More than likely from a person that felt that his true genius sprang from his ability to apply creative thought.
Not Always a Genius
Albert Einstein was not always a genius. He had to apply himself in a way to get there. And you and I (definitely not me) are not striving to be Einstein. But we can use our imaginations to exercise creative thought to create new ways of looking at the same problem. It is our unique perspective. Our history, our culture, our upbringing and our philosophy that leads us down a certain path. We can use this to fuel our creative spirit. The best way to do this is to begin by writing things down. Does not have to be big thoughts. Little thoughts will do just was well. As you will see over time is that you will build up a number of thoughts. You may see a pattern or a method or something that stands out. Don’t worry if you don’t. That may be even better since it shows your interests are varied.
But if you do then you are then looking deeper at who you are, what drives you and focuses your attention and where you may see yourself going. The great thing about this little exercise is that everyone can write and all you need is a piece of paper and a pencil or pen. Computer are not necessary either.
The Art of War and the Art of Business.
What if I was to say that that war and business run often on parallel tracks, what would you say? Would you say all is fair in love and war. Does that include business?
If you are going into business or if you are going to war what is the first thing that you should do? In business you see what is out there and try to build something that nobody else has. In war you send your troops (small band maybe 2- 4 ) To see what lies ahead. What is the enemy’s strength, where are they, where are they going? Do they know that we are here? How prepared are they for a fight? If they are loved by the people they protect? What is the morale of the army? etc.
More than likely what you think will happen won’t and what you think can’t happen very well can, but more often the things you never thought of that end up happening. That is reality!
More to come……
Brand Vs. Brand
(Thanks for the Idea Mom!)
Today we have an exciting bout between two amazing, fan favorite brands. They will battle it out to become the leading Brand in their segment!
In this corner we have the reigning champ. This brand has market share; a great marketing campaign; well-thought-out packaging and recently changed their formula to be non-GMO and gluten free! They have been using focus groups to stay close to their customers; have 10,000 consumers at the ready; geographically dispersed; aged 25 – 39; earning $50K per year and able to answer surveys; test new products and give feedback. They have been the segment leader for 25 years and look like they can go for 25 more. Give it up for your favorite brand, Brrrraaaaannnnd AAAAAAAAA!
I this corner we have the contender. They are the upstarts, rebels with a great new product, organic, taste amazing with biodegradable packaging, certified not harmful to the environment. They have carefully crafted their image finding a niche that has tremendous demand and with the ability to create a wedge, gain momentum and unseat the reigning champ. They are focused and sharp and have been relying heavily on social media to get the message out. They are conducting tastes tests in strategic test markets to stay on top of possible new trends and gain brand awareness. They are pulling their product through the channel and are using e-Commerce to get their products into the hands of consumers. They are hyper-focused on customer satisfaction, are hungry and are eager to stand toe-to-toe with the champ. Give it up for the Rebel with a Cause, your favorite upstart brand Brrrrraaaannnnnd Beeeeeeeeeeeeee!
Have a little Fun
We have to have a little fun with this one. Everyday these toe-to-toe bouts are taking place. Whether you consider it a horse race, title bout in the boxing ring or tennis match, new Brands are popping up all over with new ideas and new products ready to take on the big enterprise brands. We like smaller and mid-sized brands, because they represent everything that makes us feel good. They are challengers and usually the underdog and everyone routes for the underdog. They are connected at the grass roots level, humble and willing to come out with new products quicker. They are focused on quality control, have a smaller footprint and have a good chance of being bought out by a larger brand.
Enterprise brands can offer discounts and can rely on other brands in their portfolio to bring in cash just to maintain market share. They have the distribution and can be found at many places. They may lack the ability to bring new products to market quickly, because of their size and complexity. They may rely on the purchase of smaller brands to get into new markets and segments. They can push their product through the channel by offering better margins to their channel partners.
Innovation through Acquisition
How many new brands have come out in the last 10 years and how many have been bought out by enterprise brands? An entrepreneur or a group of entrepreneurs will put their heart and soul into these new products till they represent the individual(s). They are in fact their brain child and may have been for some time. As Mr. Gary Vaynerchuk, so aptly put it, “No one will love your business as much as you do”. In this case, the founders or that single person who brings this great new product to market. Kind of makes you jealous in a way. All the glory for those who have the guts to lay it on the line. If you have built your brand for acquisition and are in the right place at the right time, you stand a good chance of getting the attention of a large-enterprise brand and could hit a big payday. However, that is not the norm, and you better be good at your craft and have discovered something that can either not be replicated easily or at all. Finding small markets that can grow because of a new idea is better (in my mind) than purely taking on the big guys just to be better at what they do. Market share, price and the ton of marketing dollars they can throw at a product campaign are hard to beat when you are a start up. Better to be a small fish in a small pond first.
Size can make a difference
The reason why smaller companies are taking on enterprise CPGs is simple. They can be innovative and move quickly into markets. If you want to succeed in the CPG industry as either a new or existing brand you have to be innovative. That means staying connected with your customers and look for ways to innovate and introduce new products. Better to imitate the good practices of companies like, Ben & Jerry’s, Arm & Hammer and MilkBone. They are great examples of companies that innovate through customer suggestions. Ben & Jerry’s introduces new flavors each year based on customer suggestions including Dairy Free options.
Nielsen said 88% of the about 900 food and beverage items that have been added to US store shelves the past five years came from small and medium sized companies. *1
Even though digital campaigns and e-Commerce is gaining tremendous ground you can’t forget about brick and mortar and traditional methods of advertising to get the word out, if you want to grow your brand. That being said, large enterprise brands realize the benefits of using social media to acquire new ideas and to get closer to their customers.
The CPG industry is where a creative entrepreneur can flourish. That being said, there are many brands that are strewn along the deep floor of this industries ocean of products. If you think you are jumping in the water with a bunch of placid marine life that look pretty underwater, well you may be. However, there are big fish in this ocean that are very hungry and very protective. If you find this as a passion and are willing to put in the time, then you can be successful, but after attending trade shows and seeing all of the would-be-products that have come and gone, it will be a hard fought battle. As always, my hat is off to those who try and succeed or fail and I cheer for the ones who fail, but get back up and try again.
Check out these reads!
Pizza with Corn, Anyone?
(Our First Tale)
The other night I went to pick up a pizza from my favorite pizza place. It is thin crust and delicious, and my only complaint is it never makes it past the dining room table. My little family just loves it and gobbles it up. As I was picking up my pizza, the customer in front of me was explaining that corn, ham, and mushrooms are one of the most popular topping combos where she is from. The woman behind the counter took out a pen and began to write.
Being the owner as well as the cashier makes it is easy to make decisions on the spot. The owner asked, “Where are you from?” The customer explained that she was from the border of Hungary and Slovenia and this type of pizza is one of the most loved there.
The owner of the pizza parlor was not only writing everything down, but also figuring out how she could get the ingredients, inform her customer, and make her happy.
Why do I love this type of customer/business interaction? Very simply, it is the best way to do business. It was one person making the request, not a hundred, and it was a simple, understandable, and easily satisfied request. Last, and most important, the business was ready to meet the customer’s need.
Who knows? Maybe it will take off. Ever have thin crust pizza with corn, ham, and mushrooms? In the near future, perhaps you will. My family may put it on the list to try next.
Want to Buy a Mattress?
(Our Second Tale)
I walked into a national mattress chain store to buy a bed frame after having purchased a mattress and box spring. The manager and I had already talked several times, so in this conversation he asked me what I do. I explain that my company helps brands figure out what their customers want to buy next. I give him a couple of examples, one of which we discuss: when cultures collide and influence local buying habits. The influx of a large group of people from a single area can influence the tastes and purchasing habits of a local community.
The manager points to the mattress directly behind me and says, “See that mattress?”
“That mattress is the most firm mattress that we make, and unless I asked for it special, I would have never received it.” He goes on to to explain. “There is a large Asian community in the area that recently arrived and they are used to buying very firm mattresses. We could never have sold what we had been stocking because they are all just too soft.” After convincing corporate he was right, they agreed to send him over a new, extremely firm, mattress. They sell for $3000.00 for a queen size mattress. He then explains that they sold five in the first week alone.
Why do I love this? Very simply, the manager had the experience, the knowledge of the market, and the insight to explain to corporate how they were missing out on sales. As a business and especially as a national brand, if you make the wrong product for the customer or fail to meet the tastes of a particular segment you will miss out on a significant return on your investment in new products.
Know your customer! Not every business has a salesperson/manager out on the street that can influence decisions to make new products—and not only get corporate to listen but have them do something about it.
Why Are These Tales Important?
(The Moral of the Stories)
Stories like these are important and need to be told: Some brands (however small or large) are meeting the needs of their customers. How they meet those needs is the interesting part. In both of these cases, they are actively listening to the customer and making decisions to meet the customer’s requests or needs.
It is harder to do this in a digital world. We gauge relationships in clicks and time on the page and hardly ever have a conversation with the customer. We see cart abandonment and connection loss and make every effort to speed up the process, making it easier for the customer to make a decision and make a purchase. Yet often the purchase is made only after they have been to the store to touch the product or hear from a friend that has it.
Not every sale is the same. Making sure there are enough ways to communicate with the customers is essential, regardless of the channel. In the digital world, you don’t have someone attentively listening behind the counter or observing the trends and habits of the local community, intuiting what will be the beginning of a trend and what is a one-off remark.
You know what your customers have purchased in the past, but do you know what they really want to buy next? Why not ask them?
For further thoughts on pizza toppings… http://www.mashed.com/83985/best-and-worst-pizza-toppings-ever/
And some fun facts about sleep… https://www.mattressinsider.com/blog/sleep-habits/
As retailers like Walmart and Amazon spread tentacles of distribution throughout e-commerce sites and brick-and-mortar superstores, increase their clout with wholesalers, and blur the lines between wholesale and retail with masses of generic and private label products and services, how can small and mid-size brands flourish?
The big guys have even-bigger data, and they use it, along with their ability to manipulate wholesale prices, produce private label goods, and take temporary losses for long-term gains. They, like all brands, use their data about past customer purchases (and views, and likes, etc.) to predict future purchases.
What they don’t have is authentic connections to their clients and customers. The bigger they get, the less personal their service becomes. Their customers do not co-create their next new product; there can be little collaboration or innovation with their clients to improve their services.
For smaller and mid-size brands, this offers a great opportunity to learn to connect with people searching for a voice in the consumer experience. But this requires a shift in how the brand uses social media.
Most brands monitor social media for mentions and trends, but this kind of passive listening—responding only when there’s a problem or threat—can be transformed into an active, authentic engagement with the people who already love your products or services and those who are considering trying them.
These proactive interactions can take place on any social media platform if you employ a team to respond in real time across the board. Or, for less time and money, you can use a social media version of a suggestion box: USuggest It.
Whether you’re a retailer or one of the many brands that wants to stock their (real and metaphorical) shelves, the answer is not ‘price.’
Customer Experience –> Customer Bond
Today’s customers have lofty expectations when it comes to spending their money. With more and more consumers moving to the Internet for their purchasing needs, companies of all sizes are focused on improving the customer experience.
As these larger companies put greater focus on e-commerce, smaller retailers will be forced to move in a similar direction. While these companies may not be able to compete on price, a unique opportunity exists to focus on something that larger organizations cannot do as easily: a personalized customer experience.
Opportunities abound for smaller retailers to provide a personalized, best-in-class customer experience through the use of real-time interactions.
Savvy retailers take advantage of digital services such as social media to listen to and interact with their customers about a wide variety of topics. Not only does this help smaller retailers differentiate from Walmart and Amazon, it can help these businesses build an incredibly loyal fanbase.
Big Data Describes the Past—Focus on the Future
Competing with the likes of Amazon and Walmart is an uphill battle for small and mid-size retailers today. It’s not enough to passively “listen in” on social media charter about your brand and jump in when there’s a problem or complaint. Your connections with your customers must become more proactive.
The huge retailers have access to lots of big-picture data on their consumers’ preferences, which we all need. Past preferences, of course, help predict future buying. However, that mass of data that Amazon has about its Prime members (and now about Whole Foods shoppers) is mostly just that— from the past.
Consumers’ preferences and needs now change not by the season, but by the week or by the day. Your brand can differentiate itself by focusing on your consumer’s wants, needs, and desires for the future.
Coming up: How do you tease out what your customers will want and need in the future?
Just last week, Walmart made headlines when they announced that they expect online sales to increase by 40% in the next fiscal year. The news sent shares on their biggest intraday surge since May 2016. Amazon has purchased Whole Foods and currently adds 1 million square feet of warehouse space each week. Walmart has also purchased e-retailers Jet.com, Bonobos, and ModCloth.
When companies like Walmart and Amazon make big announcements, the market takes notice. These companies have vast resources to pour into new initiatives and business development. Those resources, coupled with their ability to offer products at cheaper prices, put smaller competitors in a difficult spot.
This news has major implications for other retailers who compete directly with Walmart and Amazon (and compete to stock their shelves and warehouses)—especially smaller companies. Since competing on price may not be an option, businesses have to look to other options as Walmart expects to grow.
What Does This Mean for Retailers and CPG Brands?
Last week’s news forecasts significant growth in Walmart’s online sales. Other large retailers, such as Amazon, also expect sales increases over the next fiscal year.
Both retailers have developed their private label products (formerly known as “generics”) at price points where most other retailers and CPG brands cannot compete. Steve Olenski points out in recent Forbes article that, just as Amazon has developed and promoted its own line of batteries that rival established battery brands and undercut their prices, it may now do the same with grocery products—and more—using Whole Foods’ private label as a start.
For your brand to control the potential damage of these huge mergers, you need to distinguish yourself based on something other than price. You need to connect to your customers in a way that establishes a bond that lower-priced options won’t break.
Next up: What small and mid-size brands can do to survive and flourish in this evolving environment.
Hint: Whether you’re a retailer or one of the many brands that wants to stock their (real and metaphorical) shelves, the answer is not ‘price.’
Mobile innovations abound in retail. We’ve gotten used to our phones and other devices telling us where we can buy specific items when we type or speak. Now mobile devices have begun to identify any number of consumer goods from a quick snapshot: a box of pistachio biscotti, a cowhide ottoman, a pair of oxblood shoes. Where can I buy this? Visual recognition apps will soon provide reliable buying options from a photo alone—and offer similar alternatives. ASOS, Craves, Slyce, ASAP54, and other companies offer visual recognition already.
At the same time, production lead time has moved from six months to three months to just a few weeks, responding faster to what happens on catwalks and city streets.
If production times continue to shorten, and technology makes it easier for consumers to quickly find alternatives to a coveted bag or dress (whether it’s one that’s less expensive, in a larger size range, or in a different hue) retailers get crunched in the middle. Mobile devices will soon reliably tell shoppers, after a click of the camera, where similar items are sold and for how much. How can retailers distinguish themselves other than by price?
The next wave of innovative interactions with consumers will involve getting their feedback on goods for sale—instantly. A digital suggestion box offers retailers a chance to hear in real time:
- What it would take for the customer to buy an item right now as they walk the store or showroom (Can you stock this tie in cobalt blue?) or try on an item (Can you carry jackets with more room in the shoulders?)
- What the customer notices as they use or wear the item in real life (The straps are adjustable, so I use this one most!).
More importantly, retailers get not just one person’s opinion at a time, as happens at check-out or in the occasional email, but a full analysis of which suggestions have traction with other customers—because a digital suggestion can be “liked” and build momentum.
The response that a retailer can make now based on a customer-created suggestion that gains momentum on social media can revolutionize the industry.
Personalizing and customizing products and services for each individual customer is not always profitable. When you can listen to your customers’ needs and desires in real time, watch which ones reach critical mass, and align your production capabilities to those, your products will feel customized as you build on that dialogue between fans and your brand.
All retailers benefit from better interaction with their customers. Right now technology is disrupting and compressing the chain from demand to supply.
A season may be three months, but your full-price window may only be two or three weeks. A digital suggestion box encourages and motivates customers to transform desires into suggestions and ideas. It also ‘educates’ them to change complaints into problem-solving statements that can truly help you improve your offerings and service. Positive input, supported by popular likes from social media, lets you see where customers preferences are changing, in real time. The helps you prioritize orders, change your presentations, and time your full-price items more accurately.
USuggest It is not a replacement for your designer, your merchandiser, your supplier, or your scout. It is a way to connect directly to your consumers in a way that feels individual to them and allows you to view the big picture with our broader analyses.
In addition to watching and hiring trend forecasters, add USuggest It to your toolbox. Make predictions based on analysis, not guesswork. Software and customer input cannot substitute for your skills, but it can be a powerful tool. Enhance your resources to stay nimble.
Get ahead of consumers’ tastes by going directly to them.
Elizabeth Silas, September 2017
Bain, M. (2017, April 6). A new generation of even faster fashion is leaving H&M and Zara in the dust. Quartz. https://qz.com/951055/a-new-generation-of-even-faster-fashion-is-leaving-hm-and-zara-in-the-dust/
Ewen, L. (2017, January 4). The 7 trends that will shape apparel retail in 2017. RetailDIVE. http://www.retaildive.com/news/the-7-trends-that-will-shape-apparel-retail-in-2017/433249/
Lomas, N. (2017, August 8). Asos adds search-by-photo to its fashion ecommerce app. TechCrunch. https://techcrunch.com/2017/08/10/asos-adds-search-by-photo-to-its-fashion-ecommerce-app/
I’ve met some impressive people in the years I’ve been in business. One of the professions that has always amazed me is that of the buyer/merchandiser, especially in fashion and apparel. These the people who can look into the future and tell you, precisely, what the demand will be for products two weeks to to fifteen months away, which, depending on the product, is the time it takes to bring a concept to market.
They go to fairs and shows, talk amongst themselves, run focus groups and surveys, contract out trend forecasting and analysis—but that doesn’t take away from them the phenomenal intuition they have. Big retailers depend on these people to get it right (or as close to right as possible). These people are paid enormously well; only big retailers can afford them.
A digital suggestion box, which lets people write suggestions in their own words at the moment of inspiration, which can be shared and liked on social media so the marketer gains a sense of its significance, is another, valuable marketing tool these buyers and merchandisers use to gauge demand.
But what of the smaller retailers who simply can’t afford the salaries and bonuses these buyers and merchandisers command? How can they get a bigger bang for that merchandising buck?
Here’s a case in point: Chuck Peters runs a sporting goods company based in New England. He’s done it for over a decade now. Five years ago he began to sell online. His idea was to sell online primarily to the local market, but within a short time people from across New England began buying from him, and he has received orders from as far away as Oregon. Revenue has gone up, along with the number of customers Chuck’s business has to deal with every day. His staff pride themselves on being close to the market. Nobody seems to complain; everyone is happy.
That leaves Chuck with time to be his own buyer, so he heads off to the fairs, reads the industry press, checks out the Internet and even has a box on the company website inviting people to write in comments. When he places orders, he does so for enough volume to keep the purchase price down, but he doesn’t want to keep too much stock as the products he sells are seasonal, and he has found that tastes can change fast. When negotiating price, he insists that orders can be filled within three weeks, because otherwise he can miss demand. Chuck’s sister, Louise Race, is a whiz with Excel and can tell him who bought what, when, and for how much (including discount) and what it costs, so he knows exactly where he stands.
Chuck is always worried he might get it wrong somewhere down the line. While he could correct a bad call, fixing it would certainly punch a hole in his pocket. Just as bad, he can see other retailers are coming into ‘his space’. Chuck knows competition is a fact of life; he just doesn’t want to start a price war if he can help it, as that would just eat into his margins.
Louise keeps telling him that constantly improving customer service and engagement is one way to do that, but he’s not quite sure how. Chuck also knows that adding new products to his range would attract more business, if only he knew which ones to order. How to do all that with the limited budget he can afford?
Here’s a few ways to achieve those goals
The key to deepening engagement with customers who are not able to walk into your physical store is to replicate in the digital world all the human activities you expect to find in the physical world. Chuck’s staff seem to be on the ball, and, for as long as there are enough skilled people ready to respond to demands instantly, customer service is fine. He could create a ‘digital assistant’ for the online store, as these can handle the majority of ‘predictable’ demands quite effectively, leaving more time for his real assistants to handle more detailed/difficult issues.
Chuck already has a ‘comments’ box on his website, which is really good forward thinking. A clever (and economical) thing to do is to transform that into a ‘digital suggestion box’. That will give him two things.
Firstly, it gives Chuck some positive, well thought-out ways that he can improve what he offers already, which always helps. Chuck could also recognize and reward people who send in suggestions. The mere act of doing that, even if Chuck doesn’t act on the suggestion, deepens engagement and loyalty, giving Chuck a long-term customer.
Recognizing and rewarding customers for their suggestions actually converts them into promoters, and that means new business from people they know, but whom Chuck doesn’t know—yet. Chuck could even take this one step further. He could create a section on the website publicly thanking people for their suggestions. Do that and those same people will like and share the recognition with their social friends, widening awareness even more. A very big bang for a very small buck.
Secondly, Chuck will inevitably get suggestions about the products he sells, and the products customers would like to buy from him, if he stocked them. I can’t tell you how important that is. People are telling Chuck what they want to buy. Every marketer, merchandiser, and buyer wants to know that. You can’t ask for more.
Better yet, with our digital suggestion box, suggestions can be shared and liked on social media. Those likes and shares are essentially votes; the more of them, the more market support there is for the suggestion. It gains a weight that will let Chuck assess its importance, do a quick cost-benefit analysis and build it into his action plan.
A digital suggestion box is a tool that helps Chuck reduce the risk of misjudging market demand, anticipate and plan for changing customer preferences, improve customer interaction, deepen customer engagement and broaden market awareness. That’s a lot of real merchandising power. The type the big guys go for, but within Chuck’s budget.
Chuck could also get someone to help him use some inexpensive tools to create some of the other things the big guys have: focus groups and surveys. The way to roll those out to his customers is with a digital newsletter, which would let him communicate other initiatives also, like promotions, new product lines, recognitions and rewards for suggestions received, and anything else that helps deepen his relationship with customers.
Those are some of the ways to get a bigger bang for your merchandising buck.
Some weeks ago my colleagues and I were talking to two different companies about the value of suggestions and how our service, which is best described as a socialized digital suggestion box, could help them.
“Yes of course I know how valuable customer suggestions can be”, the owners of both companies said. “I am always on the look-out to do better and I am really happy when the people I know come up with ideas about how I can do better, introduce a new service, and things like that. Since I have a business that really only runs from one location, I get a good share of suggestions when my customers pass by, and when they send me e-mails. I feel quite close to my customers already, and I know they feel close to me. Why would I need an additional service like yours?”
Perfectly valid points, and let me say the owners of both companies have invested serious quality time engaging with their customers over many years. They are both happily successful in their different lines of business. In fact we are probably going to become clients of theirs. Why indeed should they add more ways of engaging with consumers at this point in time, considering they only have one location, and their local markets know them well? Here’s why.
As Jack Ma of Alibaba fame says, “Even though you are local, if you have digital presence, you must think global.” Which basically means there are no time zones, you can’t be awake 24/7, you can’t know all of your customers personally, and what plays in Peoria doesn’t play in Pretoria. If you are selling on-line regionally or globally, you need to know about local preferences, or risk losing opportunities or, even worse, the investment made to date.
If you have a digital presence (even if you don’t sell on-line) then the experience must be as if the customer has just walked in to your real store. If you don’t do that, you won’t easily get them to come back through the ‘door’ – and that will lose you the long term business you really want. Basically, this means you need a digital substitute for every human activity you would normally have in the physical store – that’s why you see all those digital ‘assistants’ popping up when you go e-shopping. Just like you would happily receive a suggestion from a customer in your physical store, you should have a suggestion box in your digital store.
Something really important comes with a digital suggestion box: the ability to recognize and reward the contributor. Yes of course you can do this personally, and in the physical store you might even put up a “suggestion of the month” type plaque. What you do in the physical world you should replicate in the digital world. Having a web page where you publicly recognize people who make suggestions (even if you don’t necessarily act on them) can only do good. Recognition is a powerful motivator that binds your customers to you for a long time. Not only that, they become boosters for your business, praising your good name and deflecting any complaints you may receive. Enable all that with social media and you create a powerful, positive reinforcing effect which benefits your business, however big or small it may be.
A suggestion, given personally in the store or sent in by email, is just that: personal. Interesting to the power of one. A socialized digital suggestion box adds real value, because the suggestion is shared through social media and voted on by others – who can be in your community, the suggestor’s community and potentially the world at large. What does that give you? It gives you a suggestion with weight, the weight of popular interest and opinion. That creates for you ideas of what to do, make and offer, and the priority in which you could plan and action them. Regardless of the inherent value of the suggestion itself, it gives you greater exposure and awareness to a wider world, which potentially leads to more business coming in through your door.
And if your business is not at all ‘digital’? Well, you know when and where all the best ideas come from, don’t you? It isn’t in the shop during opening hours, right? So doesn’t it make sense to have a simple, tailored service your customer can send their personally crafted suggestion out straight after that famous moment of inspiration, that others can see and give their opinion on its value, as it gets delivered direct to you?
There is no downside in knowing more of what to offer more of.
What You Already Know
You already know your existing customer and what demographics they fall into. You may need to revise your customer profile as they and your product evolve to meet changing demands. You should also already have a good idea of customer behavior (e.g., how much they buy, when they buy and why they buy, etc.). You know who your competition is and your value prop: what you offer above and beyond your competition. In other words, why would someone want to buy your product and why would they want to keep coming back for more?
Now, on to what you need to learn as you launch something new.
1. What Is the Customer Need?
Let’s start with two reasons knowing the customer’s need is important. (There are many more, but let’s keep it to two here.) Right out of the gate, you’ve got to know what to make!
First, customers’ preferences change. If a brand has an existing product in the market that is losing ground or in danger of doing so, chances are they have not stayed current with their customers’ preferences. Especially if your product(s) are nice-to-have and not a need-to-have, brands must constantly ask the question “Have your needs changed?” Customers will not go out of their way to tell you, so you have to give them multiple outlets and ways to voice their response.
Focus groups are one way to keep abreast of your customers’ changing preferences, but that data can be skewed by the small sample. If you have a brick and mortar presence coupled with a growing digital presence, then using the two in conjunction can give you a great opportunity to stay in contact with the customer.
Whenever customers interact with the brand, you want to keep them engaged. Information has to go in both directions. As you are moving forward with new products—and just before they hit the market—loyal customers want to feel they are more in touch with the brand. Giving your loyal customers advance notice on new products and services will help maintain the relationship and make people feel more valued—and move a valued, loyal customer to a brand fan.
The second reason to stay on top of customer need is that technology changes, and your product has to keep up with the changes in the environment. Campbell Soup made major changes to the their brand because of changing tastes, but had to do so due to the rapid pace of change that has been lead by advances in technology. People educate themselves on the parts and pieces that make up your product. They are constantly taking in information about new options, and when they are ready to hear it, the message will hit home. Survey changing trends in any market and see how a whole host of technologies can impact a brand. Your customers are doing this all the time in the general media. If your brand does not keep pace with changing technology, your product can quickly fall behind.
The confluence and acceleration of the seismic shifts that are reshaping the established order of our industry — the rapid and monumental changes in demographics, consumer tastes, opinions and behaviors; the light-speed pace of technological change and the volatility of new global economic and political realities — creates the unprecedented context for our efforts. In essence, we have given Campbell an extreme makeover in a rapidly and fundamentally changing market. Our progress has been methodical. Undeniably, we have improved our company and shifted our center of gravity. But we are not satisfied. We have higher aspirations: for the food we make, the role we play in people’s lives and our growth trajectory. That is why it is necessary to relentlessly improve our food, our business and our culture to forge a meaningful and lasting place in the lives of new generations of consumers. —Campbell Soup Company 2016 Annual Report
2. What Can the Brand Successfully Produce?
Knowing the customer’s need means you know what to make. Being able to make it successfully is another thing! If your customer preference has changed from plastic to metal or from metal to wood, can you produce and match the customer’s new need?
This why your digital channel can be your best friend in staying far ahead of the curve. The last thing a brand wants to find out is that a change has happened and they are lagging behind the customer’s need. If your current customer has moved to a different product, can your product serve the need of a new customer? The biggest challenge for the brand is seeing far enough ahead to be in front of the curve and anticipate changes in the taste of the consumer so the brand can match up resources to the changes in expectation.
This is where knowing the market comes in.
3. What Is the Market?
Your product may complement another or be a competitor to another or, as mentioned just above, you may discover a new market that requires your product. If your product is a complement to another product and the market is expanding, then that is great for your brand. However, if the market is contracting or a competitor has now taken over your market share, you must be prepared to react and act quickly to move in a new direction. Being ready for changes in the market is accomplished is done by constantly testing the waters.
Market dynamics for consumer goods change quickly and can be affected by everything from the availability of resources to the cost of currency to weather—and so on. The availability of resources can affect your ability to get raw materials and produce enough to furnish demand. Companies like Mondelez have changed the size of their product—in this case, Toblerone candy bars, reducing the amount of chocolate in order to maintain price in the face of rising raw material costs. This was not met with cheers among customers; it was considered a real slap in the face.
The cost of currency may affect your ability to buy enough raw materials or to sell the finished product in a particular market. Weather can affect the speed with which you get the product to market—and fresh products beat out not-so-fresh ones. A prominent yogurt manufacturer lost market share when its product was shipped to shelves out of date. Consumers were treated to spoiled yogurt. Your product may not allow for the economies of shipping long distances when timing is of the essence; your market may demand you move the means of production closer to the consumer.
One big question in about your market is obvious: What kind of price change will consumers tolerate for your new product or service or can it fluctuate and not be affected by price changes? That is all worked out by the demand curve.
Starbucks has been leveraging its consumer loyalty and lack of elasticity among its consumers by continuously passing on increases in costs, due to wages and coffee prices, to its customers. As a result, in the period between 2014 and 2016 they have made four price hikes on their products, two of which were in 2016 alone. The rise in prices has been mainly aimed at protecting the company’s operating margins. In the financial year ended September 2016, Starbucks was able to expand its margin by 80 bps to 21.5%, and earnings by 17% y-o-y to $1.85 per share.
If the market is large enough and if the demand is great enough, you can weather the storms that will come your way if you are aware of your customer and you can be flexible enough to
- shift resources to new markets or
- modify your products
Like Starbucks has done, you can take a nice-to-have to a must-have, making a product that for the most part is elastic into one that is relatively inelastic. You will have little to worry about in the short term.
You will need to, like Starbucks, diversify your product portfolio, introducing new products to increase your profit margin. As some products lose favor, others will take their place. Although there is a natural life cycle to all products, by listening to your customer in real time and making changes based on your customer’s input, you can increase the life of any given product continuously.
Understanding your customer starts with understanding your brand. This is an introspective process that must be revisited regularly to see where you are on the mark. This means assessing internal strengths and weaknesses to ensure that competition, when it arises, is a source of innovation and not consternation.
Customers are people. As individuals and groups, we grow, we change, we evolve, and we can shift away from a brand. Brands are under constant pressure to deliver quality goods for the same price even as prices increase on raw materials and other factors affect quality. Knowledge and understanding of shifts in customer preferences can help align expectations and keep a brand in good standing even when the ground is shaky and things are in a constant state of flux.
It seems a bit silly talking about suggestions, when we are all so familiar with them in everyday life, at home, and in the office, right?
But then, why is it that when we are thinking about business, we seem to forget all about them?
When was the last time you asked a customer for a suggestion, rather than an opinion? Or a customer offered you one (and I don’t mean a complaint)? Or indeed you made a suggestion about something to someone with whom you do business?
And yet, we all know the value of one when we see one, whether epigrammatic or epic: its creator intends to help us—and often does.
By their very nature, suggestions are thought out, reasoned, logical, positive, have intent and are actionable. The maker is, by definition, inspired and engaged. Suggestions are imagination at work.
Suggestions arrive in many ways, and always will: through conversation and discussion, from proposals and submissions, by letter and email, from ‘free form’ responses to activities like polls, focus groups and surveys, and increasingly through social media as a message.
Now something new is being added to the mix. The Digital Age is giving consumers the power to influence product success, sales and the very products they buy. This is especially true of under-40s, who are happy to trade information, opinions and suggestions in exchange for something concrete, like recognition and rewards. This phenomenon is happening everywhere; for different reasons, perhaps, but global cultural preferences, even if distinct societally, are converging in the marketplace. Even locally focused businesses are influenced and impacted quite quickly by this.
I’m going to tell you the obvious, because I know you know it: getting a suggestion only makes you stronger. In business, the more times you hear people suggest the same thing, the more you know there is a clear demand to provide what they ask for. (Price and profit are different issues, but that’s for another article.) Having consumers tell you directly what they want is a “Holy Grail”; it’s one of the key marketing activities good companies invest in. After all, selling things that people want is always easier, quicker, and more profitable than selling them what you have. That’s Sales 101.
A suggestion is one of the clearest buying signals you can ever get: “If you did this for me, I would buy it.” But like two-faced gods, suggestions are also signals of shifting customer preferences, warning you to change or else ‘misfire.’ Either way: listen and act. The consequences for not responding are only bad.
Using Suggestions in Business
So, how can companies take advantage of the power of suggestions to build an even stronger, more loyal fan base?
By the simple, straightforward act of engaging with your audience, asking them for suggestions, letting them speak freely and rewarding them for their effort. Don’t take my word for it. The Customer Engagement Management (CEM) market, which nowadays includes all those customer-facing operations like call centers and software services like CRM providers, is set to grow from US$5 billion last year to over US$13 billion by 2021.
The main factors driving CEM are the effective use of always-cheaper technology that helps gain and retain customers; the need to engage customers with strong, positive experiences; and the profitable competitive differentiation that comes from getting it right. Just see what smartphones have done to the world in less than ten years.
More and more companies recognize the vital need to do this. Those that do tend to be more profitable than those who don’t. When asked, 90% of US CEOs said they are strengthening their customer engagement programs this year.
You really can engage with your audience if you want to. Frankly, there’s not much choice in the matter, if you want to grow your business beyond the audience you can personally deal with locally. If you have a (branded) digital presence, then you absolutely have to conceive of your potential globally, and without exception that means engaging with consumers and customers as broadly as you can to get insights into evolving preferences. Act quickly and effectively, encourage someone who wants to engage with you, and you can capture a customer for a lifetime.
The trick in getting this right is to keep conversations going with your audiences, and by that I mean real conversations where both your people and your audience are mutually engaged with deepening a relationship in which all see both value and benefit. This is not rocket science. It’s really nothing more than what a good corner shop owner does, expanded globally. It’s a back-to-roots people thing: technology is the very effective means to achieve it, not, as some companies persist in thinking, the substitute.
For example, instead of trying always to bend consumers’ preferences to what we want them to be (i.e., make them buy what we have got), give consumers a space where, in their own voices, they can tell you directly how they think you can increase their satisfaction. Make sure that as a business you have an ear to listen (not just hear), for otherwise you are just wasting time, effort, and money.
You should also recognize the value of suggestions with a good reward program that delivers something concrete; this can only strengthen the loyalty and interest the customer has when engaging with you. Even if suggestions aren’t immediately practicable, it is best to receive them instead of a thundering silence.
Suggestions come in all shapes and sizes, but, like it or not, right now the most popular arrive via email and the internet. If you have a ‘send us a message’ box on your website, a ‘comment box’ on your eCommerce platform, or branded pages on social media services like Facebook, LinkedIn, Twitter, Instagram or any of the others out there, then you know what I’m talking about. Let’s call them “socialized suggestions.”
The concept is great, as the format encourages positive, insightful thoughts, personally created by the consumer at the moment of inspiration, wherever they may be. Done well, the socialized suggestion arrives ’pre-structured,’ categorized, and in real time, not as fragments of narrative that have to be teased out of a stream of chatter and then stitched together—something which takes considerable time and effort. (That’s why media agencies and market research companies charge a lot of money.) Done brilliantly, socialized suggestions are shareable in social media and can be voted on by others, which gives you a clear sense of each one’s weight and market potential.
Since socialized suggestions arrive in real time, you can react swiftly to something that demands your attention, so reinforcing the interactive relationship with your audience. It can become part of your library of suggestions, from which, along with focus groups and surveys, you can build a pattern and a strategy. Plus, an organized source of customer data integrates effortlessly with your own CRM and Customer Experience Management (CEM) systems.
Socialized suggestions are a smart tool to have in your kit to gauge how consumer preferences are trending. There is enormous intrinsic value in consumer-contributed suggestions: they are contextual, data rich, relevant and directly related to intent. They help create a mutually rewarding, ongoing relationship with consumers that binds them closer to you so you can leverage the information that provide cost effectively.
From the consumer’s side, the value is something completely different. What they are after is to positively influence the purpose and value of the products and services they buy and use. They want to change the world. They have the power to do so, and they want to be recognized and rewarded, socially and economically, along the way. Don’t forget: You are someone’s consumer and customer too. Wouldn’t you like to be rewarded for contributing a thought-out, positive, and actionable suggestion?
As a company, a product owner, a brand manager, you need suggestions, you need to encourage your audience to provide them, and you need to publicly reward contributors for them. Who’s to say your competitor won’t?
For years, advertisers have been using the power of suggestion on consumers.
They suggest how you can look better, feel better, and be better—if only you use, consume, or apply their product.
Good advertisers have hooked consumers into buying products with one suggestive image.
The scotch tumbler contains three perfectly formed ice cubes. Imagine the pour. It rolls the single malt Scotch along the sides of the cubes. The liquid cascades until it covers just enough of the ice to bring down the temperature to your taste. The image beckons you to prop up your feet, get contemplative, and enjoy life. It is a symbol of wealth and power, bringing to mind the confident person we each want to be—someone who has earned that glass after hours of dedicated effort. Good advertisers know how to suggest and sell with one photo or a few words.
But that is not the power of suggestion that I am thinking of
Nope. Today, the consumer has this power. Why? Because it is the consumer who is buying the product, and it is the business that needs to listen.
This is certainly not new. Manufacturers have been using focus groups and surveys for years to elicit feedback from customers. But focus groups can provide contrived, paid-for responses, and surveys often generate little interest (except among consumers who are dissatisfied).
How about getting input in real time, at the point of sale or use, when the consumer is most honest?
A brand today needs access at the right time to allow the consumer to communicate a need or an innovation—one that has been percolating for some time and now has risen to the top or, better yet, an impromptu response to an issue that has just presented itself for that customer. For example: “Hey, manufacturer of my fish oil supplements: I know that if you made this in a blue bottle that is only 7 ounces and made it out of glass, it would probably block out the light and heat better, reducing spoilage, and fit inside of my medicine cabinet.”
Consumers do this through social media already, but they are often not speaking directly to the brand. They speak to their social media circle, and the brand works hard to overhear what they’re saying. Those fragmented, overheard conversations can take a lot of legwork to piece together and analyze.
More importantly, the consumer usually doesn’t feel like he’s building a relationship with the brand
From the consumer’s perspective, his post or tweet has floated into the ether and bounced around his social circle. He has little expectation that his suggested innovation, upgrade, or fix will produce much more than a superficial response. The consumer cannot see the analytics—whether they show that he’s an outlier and no one else cares about his issue, or that his suggestion has consensus and will influence the brand’s next move.
In addition, a number of effective companies have developed review sites for e-commerce and dining experiences (Bazaarvoice, Yelp, etc.). These allow a consumer to chime in or check in: How did the product work? How many stars or thumbs-up, so that our readers can quickly pinpoint the product that makes the most sense to purchase? How was the meal or the service?
That approach can solve specific issues for certain companies: We’d better fix that handle or make this product heat faster. Or: People think our main courses are overpriced, so let’s focus on getting them in for appetizers and drinks. But what about consumer goods and services, like potato chips or video games or car rentals or vacation resorts or power tools? And what about the consumer’s awareness that many reviews are skewed by who is willing to write them for free—as well as how many people are paid to write them?
A few companies have done an amazing job building relationships with people
We typically think of a few newer brands that have done this, like Apple and its fans. Here’s one example of an “old” company that did it well: Frito-Lay developed and rolled out a campaign nationally to make a new potato chip flavor. This campaign spoke to consumers on a level they had not achieved before. 2017 is their fourth year building bonds with consumers in their “Do Us a Flavor” contest.
More companies will be asking consumers to join in on product development
It makes sense, right? Who is your greatest stakeholder, if not the person using your product or service—right at the moment of use and inspiration?
We have seen far too many interrupted on-page experiences and lots of useless surveys. Worldwide, only 10-45% of American Express’s survey respondents said they think companies ‘value their business and go the extra mile’ (with percentages varying by country and the U.S. coming in at 24%). A considerable majority of people in each country said companies ‘don’t seem to care,’ ‘take their business for granted,’ or ‘don’t do anything extra’ when asked about customer service.
If you want to be in that small group of brands that people feel a connection to, it’s time for the consumer to take suggestions straight to your business and develop a relationship with you.
American Express and Echo. 2011. “Global Customer Service Barometer.” http://about.americanexpress.com/news/docs/2011x/axp_2011_csbar_market.pdf
Frito-Lay. 2017, January 12. “Pitch Your Best Potato Chip Flavor Idea for Lay’s ‘Do Us A Flavor’ Contest.” http://www.fritolay.com/blog/blog-post/snack-chat/2017/01/12/pitch-your-best-potato-chip-flavor-idea-for-lay-s-do-us-a-flavor-contest.htm
The answer is, very simply, “No.” As my colleague put it: “You can listen, but then you (the brand) have to act.”
VoC (voice of the customer) platforms and Customer Experience Management companies are all over. One thing is sure: They are all saying the same thing. Better listen up, brands, or your customers will surely go elsewhere, quickly and without warning.
(For those of you expecting graphs and bullet points: You will not find them here.)
The keys: Interaction. Response.
There are plenty of ways to interact with brands, especially online. There are popup surveys that hit you when you least expect it and there are feedback buttons that take you down a rabbit hole. If you are lucky, after filling one out, you get a generic thank you note. After that, dead air. No knowledge of what has happened to your request, query, recommendation, complaint, suggestion, or survey response.
That is the problem. Someone forgot when building the platform that there is a person filling it out who has little time, is inspired to try to connect, and wants to be treated as a person.
Every time I talk about our business, people ask the same question. What is the incentive to leave the feedback and what is the incentive to stay or come back?
What a great question. I use social media to post pictures of my family and my vacation and only want others to appreciate them. In the world of social media, the currency is psychic income: Hey look, 75 likes! In many cases, psychic income may be enough for people to talk to brands, too—particularly when the community involves both employees of the brand and fellow fans of the brand. I post a comment about features I love in my new car or a suggestion for services I would use at my fitness center: Hey look, 75 people agree!
Some brands may have to get creative to build this kind of community. We give brands ideas and specific recommendations for this, but they are the masters of their own destiny. In reality, their responses are only limited by their imaginations.
Which issues do you choose?
So how do you take a cold experience and inject a little humanity into it to give someone the feeling that not only have they been heard but also that something is going to be done? That is hard—because as much as you, the brand, would like to deal with every situation, it is impossible to solve every problem and develop every suggestion.
You have to figure out which issues are the ones that need to be resolved now and which ones can wait.
The easiest way to do this is by determining which issues affect the greatest number of people and are causing the most negative chatter. (We are talking more about the B2C world here—in B2B sometimes a few customers can make or break your business.) After that, you can determine whether it is aesthetics, or functionality, or something else that is affecting the quality of the product or service.
Every customer does really matter.
Here is where the customer experience management comes into foreground. Years ago, I had a salon, and in the back of the house, on a small piece of paper on a board, there were two sentences to remind stylists: “You are our hearts and our hands. The customer experience begins the moment they walk in the door until the moment they leave.”
In reality, it lasts a lot longer. It included every time they looked down at their nails, or in the mirror at their hair, and each time someone looked at them and mentioned how nice they looked. Each one of those moments reflected on us—and if they were not satisfied each and every time, they would not be back again.
Take your time and put out your best product (given also that competition is on your heels prodding you to work fast). Then remember that there are many moments AFTER the point of sale at which the customer reflects on you and your brand. Let them easily share with you what happens during those moments: both what they love and what they would change.
Being able to rely on your customers as a source of good information is critical. They are, after all, the sole source of revenue for your brand.
Keep it simple.
As I started out in this business not long ago, a mentor of mine told me, “Keep it simple. Just make it easy for people to use.” The overly complex, the long and drawn-out, are better for physics professors and hedge fund managers—and even there, simplicity can do wonders.
If something as complex as physics can made brilliantly elegant (e=mc2) then so, too, can customer interaction online. The beauty of today’s world is that much of what we do can be distilled into a form that fits neatly into the palm of a hand.
Just make sure that at the end of the day it fits neatly, looks good, and is easy to use.
Healthy discussion is always appreciated. Please feel free to leave your comments and exchange thoughts with us and our colleagues.
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Open any publicly traded company’s annual report and what do you find? Right near the top will be a statement to the effect of “the needs and preferences of consumers evolve and change over time.” Each company realizes that we have to understand our customers‘ changing preferences—and create products that meet those needs.
There is significant investment made in the research and development of any new product. If we do not understand consumer needs, we risk losing the initial investment.
Brands now seek a marketing platform and technology that helps identify those needs to reduce the risk of producing the wrong product. Brands used to seek marketing and advertising that generated needs, or brought needs to life—but today things are different.
The most important, and I mean THE most important mission, for any business is to know what consumers want to buy next.
The questions that brands want to resolve:
- What makes a customer?
- What makes a repeat customer?
- What makes a loyal customer?
- What makes a happy customer?
- What can turn a passive consumer into a customer?
- What can turn a customer into a fan?
Needs vs. Wants vs. Desires
What you need, what you want, and what you desire: We can place any purchase into one of these three categories.
For example, I like the new Caterpillar work boots. They are stylish, rugged enough to be worn every day, and they go well with several pairs of jeans I own. How would you classify this purchase? It is a want. I may not really need to make the purchase because I do not work in construction; however, I want the boots.
The boots and shoes I have in the closet work well enough. So new work boots are not a need. But what is the difference between a want and a desire?
Work boots are not a desire for me simply because I can afford them right now. I can pick them up at will.
A desire has a longer time frame: I long for something that is out of reach—usually because it has a cost that is out of my economic range.
I desire to have a 1968 Mustang Fastback, but for several reasons it is not on the short-term agenda; it is a desire of mine.
However, if I am a construction worker who needs a boot that protects, fits well, and is going to last, then the same purchase is a need rather than a want.
Regardless of the purchase type—need or want or desire—the customer has criteria that must be met.
A brand may have initially set itself up to service the needs of construction workers but now find itself with the opportunity of a new type of consumer and a new market (with wants or desires—or simply different needs). However, the brand must:
- notice this by listening to its existing customers and its potential customers about needs, wants, and desires; and
- respond to those new needs, wants, and desires quickly.
How does the brand know how the product is being used? In our example, clothing and fashion, consumer use changes often and quickly. In the case of a work boot for construction workers, it must be created with current technology and be durable, flexible, and protective—these are the needs of the original market. Technology supersedes fashion statement.
If the brand can then repurpose the materials for fashion as consumers’ wants and desires arise, they’ve got a new market to expand into.
However, what these customers want today is not what they are going to want in six months—or six weeks, in some industries!
Communication Goes Two Ways
How do you keep up with consumers’ changing preferences? In the B2B world, businesses have regular meetings with their customers to keep communication channels open and to stay receptive to requests. In the B2C world, customers are scattered and more obviously prone to leave for the next best thing. (In the case of fashion and many other industries, trends and influencers can play havoc with the changing wants and desires of consumers.)
In some ways, the same is true with B2B. Brands must keep an open channel of communication and be receptive—and communicate back to the consumer that they are listening and what they are doing about it.
This second part is important: Customers need to know that brands are actively listening, not just passively eavesdropping. Social listening tools don’t offer enough responsiveness in real time with recognition of customers’ individual and aggregate changing preferences. There are more cost-effective (and relationship-effective!) ways to communicate.
Brands must also be aware that a consumer’s needs and preferences in New England are not the same as those in Arizona, Florida, or France. Build flexibility into your plan to keep up with the consumer.
Be Available to Align
Accessibility is the reason we love mobile devices. Whichever way your brand tackles the opportunity of communicating with the consumer, it should be accessible from many angles. On the other end, from the your internal stakeholders’ point of view, the result—the message—should be in a single location and accessible to everyone in the brand. That data should also be easily shareable across teams.
Good information across the brand will help align resources to meet the consumers’ need. That is really what it is all about: aligning resources in order to create products that meet the needs, wants, and desires of the consumer.
Need a Good Pair of Boots?
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Every person has that moment when he holds a product or has an experience with a service and thinks, “Wow! This is awesome. And wouldn’t it be better if they just did this one little thing?” It happens so often that we are not always aware of it.
The feeling can be an impulse—a quick reaction to an event that takes place—and, within a flash, as quick as it comes, it evaporates. Gone.
Sometimes the feeling returns and, as it happens again and again, it crystallizes, takes shape, and fleshes itself out. At that precise moment, the person wants to reach out and convey that all-important thought.
That is the mind of the consumer. That is the mind of your customer.
For the brand, the challenge is how to capture “the moment,” harness it, and send it through the organization so that everyone knows what the customer is thinking about our product.
How do we, the brand, make our product better? How can we bridge the gap between the customer and ourselves? How do we get their thoughts and feelings and ensure the customer feels like he or she is appreciated?
If we can do this, we can transform a casual consumer into a loyal customer and build a better product that meets that person’s changing needs, wants, and desires.
Why focus on customer suggestions? Suggestions are born out of a need derived from the repeated use of a product or task. Humans are driven to develop, improve, and evolve. It is in our bones to seek out new ways to improve repetitive tasks and to create new products for doing so.
Everything we do on a daily basis has been improved upon over time. The computer I use to write this article; the chair that I sit on; the coffee that I drink.
Suggestions or improvements will always find a way of making themselves evident. But can you catch them in time, and before your competitors do?
Brands have built a wonderful digital presence to engage customers and to spread their message. The benefits of a digital footprint are that it global and never closed, making the brand accessible from anywhere, 24 hours a day, 7 days a week.
Capitalize on the hard work and keep the momentum of your digital presence going by developing your proprietary digital domains to gather valuable consumer contributed direct data in real time. This allows you to improve on your products and services. Gathering suggestions directly from your customers on your digital properties is the easiest and most productive way of collecting valuable real-time structured data.
For the Brand
Brands want to and need to improve on products and services. However, for brands, change is harder. Sometimes, it is extremely difficult. Especially when it comes to the development of a new product. Produce the wrong product or introduce it at the wrong time and lose money. Get it right and you cash in.
Even small improvements can be costly. Small changes to production can affect all aspects of the business and raise costs. However, the risk is far too great not to evolve. Thus, real-time knowledge of customer needs and wants is paramount.
Competition and Disruption
There are two things you have to do to use competition and disruption to your own ends. First, listen to your customer. Second, respond. Consumers will always find other means of obtaining what they ultimately want if you’re not actively listening and responding.
The brands most heavily affected and that stand to lose the greatest are the more conservative, more established brands that are slow to make change. Competition in the form of innovative and nimble brands will creep in, seek out the need, and furnish the product or service. Competitors can carve out a niche, causing a wedge, and soon take over the segment.
You can learn to love competition. It spurs on the brand to improve. Understanding needs/wants/desires and evolving your brand is a way of keeping pace, and customers’ suggestions are the easiest way to gain insight.
There is no “finally.” The good thing about product improvement is that we can always continue to work on the success of the brand. Our hats are off to those intrepid people who start a brand and to those who move the brand forward, for their work will never be done.
As you engage with your stakeholders and improve your products, don’t forget to listen to the people that matter the most: the people who buy the product/service and use it. The best way to do that is to listen to their suggestions.
They want you to succeed, too, you know. Your customers are your experts and they look forward to the days when the product grows, changes, and evolves as they do. When you listen to your customers, you become innovators of a great brand and you leave it in a better state.
Definition of the Day
- Kaizen – The Japanese word kaizen simply means “change for better,” with no inherent meaning of either “continuous” or “philosophy” in Japanese dictionaries or in everyday use. The word refers to any improvement, one-time or continuous, large or small, in the same sense as the English word “improvement.”
Wikipedia. 2017. “Kaizen.” https://en.wikipedia.org/wiki/Kaizen
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