What to watch out for when researching and testing journeys

Previously:

Why you need to pay attention to customer experience

What to watch out for when researching and testing journeys

 

1. Last Click  can be a costly mistake

The customer journey does not begin with the last click before they visited your ecommerce site. No assumption could be more damaging than this one.

Here’s an example of what happens before “LastClick” (Uses App to order)

 UJ1

You need to take off that blindfold and clean your glasses if you’ve been ignoring this part of the journey.
Once you have got ahead, next you will need to criss cross this journey with the interactions with your competitors if you want to stay ahead for any length of time.  And don’t forget all those potential customers who have been influenced by this on-line saga.

For an interesting interactive tool that can be filtered by industry classification to get a glimpse of how last click relates to the other channels and influencers, check out the ink below

http://www.thinkwithgoogle.com/tools/customer-journey-to-online-purchase.html

 

2. Its not what they say, or what they do, or even what they say compared to what they do, but it’s what they tell their friends that is interesting.

If you have spent any time working with professional market research you probably noticed that people tell you what think you want to hear, what they think makes them sound clever, or mostly what they believe the group will be impressed with.

It takes a great deal of skill to capture useful insight from market research and to make large investments on the basis of just a market research report, however good, is a fatally risky thing to do.
People invariably do entirely different things to what they expected they would do in a particular situation and even from what they planned to do.  It can be very difficult to explain why you did this, you can read the underlying Social Psychology theories and decide whether to believe them, or not, but it wont change the facts at all.
People are more driven by their acceptance in, or leadership of groups than any other thing and hence, once they announce to the group what they are going to do,  it is more likely that they will do it than not.  Hence the most valuable insight into what someone will do is what they are wittering about in social media.
Be warned of course, just like other forms of research, this is one more voice to add to the conversation, not the single source of truth.
Just in case you are thinking it, most people ask this , there is a big difference between what people say in idle chatter to their friends and what they tell you in focus groups. The latter is not populated with their peers and it ends when they leave.

 

3.    The journey does not end at purchase, or anywhere close to it.

If you have been following the series so far, you will remember that in paragraph 5 of the last section I presented some hypothesis about the power of referral from your customers.  This is a very valid argument indeed for being switched on to the journey after purchase. In many sectors of course ,there is an ongoing relationship with the brand.

First of all the product may be one that is repeatedly used over time, each repeated use will therefore be another interaction with the brand and the quality of that interaction does count. Additionally there will be the difficult period when customers are learning to use your product and later there may be issues that require active support.

If you take the view that once they have purchased and you have their cash, there is little motivation to spend more money on them, then you are greatly mistaken, because even if they never plan to make another purchase of your product, they will talk to everyone they know and their influence will cost you dearly. Put together enough of these negative voices and it will put you out of business.

A far more constructive way of thinking is to ask yourself what up-sells, or cross-sells you might be able to introduce as a result of providing high quality personal support. If you don’t have other products, this may be the catalyst you needed to re-think your brand and product strategy

4.  Pay special attention to understanding Critical touch points (Moments of truth)

A user journey can be and usually is very complex, even when we only represent the main points. Even this however, is a potentially misleading picture. Thee are always Moments Of Truth when you win or lose on the tiniest of margins and these are the ones you must identify and focus your closest attention on.

For example: When the customer finally returns to your store feeling really happy with her decision, clicks buy and you don’t have her size in stock. That’s not a good situation.

When she clicks buy and gets a spinning thingy that goes on and on. Not good.

When she buys and although being a regular customer she is asked to enter a lot of information yet again despite being on a sunny bench with her HTC One and her longest nail extensions. You are really pushing your luck here.

It’s not all about clicking buy, it could be when she decides to see what people are saying about you and the first thing she finds is a blog by an irate customer of yours that you didn’t even bother to respond to let alone apologise for. The writing is on the wall.

These moments of truth may differ for different customer segments and personas, so you really need to know this and it may even differ at different times of day or seasons or with different devices.
For cheap flights customers I would say that, certainly for me it is “Paying the bill”,” Leaving on time”, “Arriving on time”.  The other stuff in this case is far less important and if it can only be done at the cost of these three, I hope they just ignore it.

“Learn what the Moments of truth are for your customers and focus a lot of your attention on getting them right, it will make a huge impact on your top and bottom lines.”

ZMOT-GRAPHIC1

According to Google, there’s a Zero Moment of  Truth.

“that moment when you grab your laptop, mobile phone or some other wired device and start learning about a product or service you’re thinking about trying, or buying.”

When I talked previously about taking a hit to let customers realise how badly they want your product, this was ZMOT.
When Henry Ford gave them a smelly noisy Iron horse and changed their lives, that too was ZMOT.  For you and I, winning at ZMOT means deeply understanding our customers habits and preferences so that we can be there at the moment when the inspirtaion hits them and showing the the right messages to take them to the next level in the journey.

1MOT

In bricks and mortar terminology, this is nothing more or less than “First Impressions”.  Until Google gives you the time machine, you can’t go back and redo first impressions.
We spoke in the last instalment about how People see what they expect to see and feel what they expect to feel,  well this is ground zero. Here is where you set that expectation and it had better be good.

2MOT

This is when they open that box and your shiny product falls on their toe and puts them in hospital, or they struggle with one point white print instructions on grey papaer in broken Korean. You may well have thier money in the bank right now, but dont fool yourself about the importance of getting this right.

3MOT

Is the remebered sensations of using your product and how they compare to the expectation.  Wow that requires some thought.
Its not enough to have a great product, but it should be at least up to the expectation. Not only do they need to like the product, but they need to trust you to give them an even better one when your competitor moves the goal posts with a new offering, otherwise you’ll be saying an early farewell. Don’t forget that it is not just your product, but everything your business does in the public eye as well as how you answer your phones, or not and help them when they have a problem.

4MOT

This is when they talk about you to their friends and social media contacts. This is one you absolutely must win

Why you need to pay attention to customer experience

Why you need to pay attention to customer experience

Next        What to watch out for when researching and testing journeys

 

The chicken and egg question always fascinated me. When it comes to business models I find the same conundrum with customers and profits. Michael Porter once said that the purpose of a business is “to create value for customers”. Although we all assume it was inferred in there, he never bothered to mention profits.
The reality every business faces however it that creating value comes first and monetization follows.

1. Compare the debacle of the great Thatcherite privatisations to the often maligned success story of dot com.
In the UK we have a raft of privatised utilities who still have not “got it”, they still think in terms of Oligopoly, force, bullying, price rigging. They think and act like tax collectors. The total innovation from all of them over two decades could be written on the back of a credit card along with a full list of their happy loyal customers.
Amazon, ebay, Paypal, Google and many more have on the other hand built world beating businesses on the back of profitless customer satisfaction and only now are monetising these business models. They operate at P/Es up to 500 and have no shortage of investors.

The message is clear, the customer is king and until you can demonstrate value to them you don’t have a business model.
“ Sooner or later regardless how much cash you have stashed away, you will learn to create value for customers or fail.” We even see this law apply itself to dictatorships.

2. What is customer value and how can you create it?
The biggest possible blunder any business can make is to quantify customer value in terms of product features. I cringe when I see these neat spreadsheets listing product x competitior1, competitor2 etc and how well they score on each (in the marketing trainees opinion).
Customers buy an experience, even hard nosed corporate customers. That begins with the interaction with “People” in the supplier side, or “friendly” and human like ecommerce site and carries right through to anticipating delivery, opening the package, using it for the first time, bragging to friends, interacting with support and many more. Many of these are remarkably powerful influencers and even though supported at times by product features, most of the time they are a separate source of value, or indeed antagonism.
Next we return to the chicken and the egg.

3. Does customer experience exist without customer value and who foots the bill?
The problem here is thus: If you ask the customer how much extra they would pay for their phone to float up out of the box on a mechanism with a Jingle playing, be fully charged, sense the old phone and offer to copy the contacts and messages etc in a sweet voice, accept a voice answer. The customer might well offer a price that made this simply not feasible. However, when that same customer experiences it once, the likelihood is that she won’t want to be without it and when she hears her friends talking glowingly about it, it becomes a must-have at almost any price. Soon it is talked about and develops a cult status and then we have a brand value to take into account. That’s a whole new ball game.
I’m not suggesting we deliver high quality customer experience at all costs, I’m simply saying that you must understand the true value and what people do is far more revealing than what they say.

The point I’m making here is that sometimes you have to take a small hit to let customers realise what they value before it becomes indispensible to them. Henry Ford would have built a more comfortable horse carriage if he had asked the customer what to do. The distinction in marketing terms is between “True value” (product features) and perceived value ( How the customer sees it)
“There’s more than one way to ask the customer and more than one way to interpret the answer, if you listen with an open mind, sometimes you will be surprised pleasantly.”

4. We can’t have a discussion on customer experience without discussing the brand.
There are many definitions out there of a brand and I’ll leave that to those with little to do, for me the important point is that expectation which a customer carries as a result of the brand. That is what drives her through our door or to our site.
Let’s not gloss over the word “expectation”. Whether you are playing poker, editing movies, or doing magic tricks for your children, you will quickly realise that everyone, and that includes market researchers, sees what they expect to see, hears what they expect to hear and feels what they expect to feel. Most people could probably say yes to that statement glibly, but very few would appreciate the profound power of it.
In a previous blog I described the experiment when scientists used MRI brain scans to identify the increased satisfaction enjoyed by a coke drinker who had poured it from a branded can into a branded glass over that of another drinking it from a plain glass, all in stark contrast to the memorable testimonials of thousands who preferred Pepsi over coke when offered both in unmarked glasses and could only focus on taste.
Expectation is created in many ways, but primarily by the chatter of others and the perceived opinion of peers. That is the territory of Brand managers, Marketing people and Social Media experts.

The key Point here is that creating an expectation associated with your product is the most powerful way to create value for your customers and often the cheapest and mot certain way also.
“Innovation is critical, but don’t confine it to the engineers and inventors, the ultimate playing field is inside the customer’s head”

5. Customer Lifetime Value is not an old, or boring idea it has never been more relevant, or more critical.
One of the first things we tend to look at with a new product is a breakdown of the cost of product, cost of selling it and gross margin. The cost of selling a product usually surprises newcomers to the field.
In competitive markets with a lot of equal offerings a small price advantage can drive large sales increases so price is critical and it is driven primarily by cost. i.e you cant reduce price below a level that is profitable. In most markets price is sensitive and if it isn’t then investors are sensitive to margins, earnings and dividends. In all cases no business can indefinitely carry unnecessary cost and in a competitive market. Sooner or later the competition will do it and steal a march. Of course there are many pricing strategies and this is not a discussion on price
The money you spend on marketing and selling your product is critical to the success of your product, yet it comes under less scrutiny than any other budget apart from the CEOs expense account.
Let’s say you sell 1m units of a product at £100 retail. Your production cost is 20 and your marketing/selling costs are £30 operating costs are £40 and net profit is £10
That’s 100m t/o, 30m spent on selling 40m operating profit and 10m net profit

Suppose you convinced 1% of your customers to recommend the product to a friend
Now your t/o is 101m selling and operating costs stay the same and net profit is 11m.
That’s a ten percent increase in earnings- a darling of the markets if you can repeat it.

Let’s say that you have a Million customers, every customer has to be replaced after 4 years and they pay £1000 a year for your product. That’s t/o of £1b
To maintain that t/o you have find 250,000 new customers at a cost of £1000 each
That’s £250m a year in marketing/selling costs.
Now suppose you are so nice to these customers that they stay for 5 years instead of 4

Now your costs are reduced to £200m a saving of £50m
if your net profits were, for arguments sake, £100m on £1b now they would be increased to 150m a 50% increase in earnings. What would that do for your stock?

These are simplified figures used to demonstrate a point, so lets not get into a investment analysis discussion. The message is clear:
“Treating your customers well enough to retain them a little longer can deliver huge dividends while enlisting them onto your salesforce is the next killer app and make no mistake about it.”
That means paying attention to the user journey long after the “order to pay “ stream has completed.

The trap of settling for mediocrity

The trap of settling for mediocrity

Without boring you with a treatise on macro-economics, I can only get my point across by saying that, not only is every professional and tradesperson in our world challenged to know less and possess fewer skills, but most business we are employed by will have not a single individual who understands what the business does from end to end even at a fairly high level. I have met more than a few CEOs who didn’t consider it important to them to understand the business they were charged with, but focused on a small handful of KPIs to get him out of jail this year.
The guy who scans a label and uses another tool to locate the good, before handing it to someone else to pack and pass on to the loader . . .  is no less dumbed down than the Financial controller who receives the chart identifies the KPI and barks out an instruction via email.
Mediocrity is everywhere and it is tempting to succumb to it but if you are not seduced by warnings of the long term damage to our world then pay some heed to this:

Skill and competency is 98.5% self-esteem and 1 % knowhow, the other stuff isn’t even worth talking about. Although I have never met you, I know without any fear of contradiction which of these you most fall short on. The reason I know is that a confident person can be taught almost anything while others can make almost anything go wrong.   Have you ever noticed how football players go on runs of scoring and always return from a lean patch to push the boundaries even further.  The tool they are using is deep seated self-belief.  Sure, some aspects of this are probably learned from Mom and Dad or even inherited in their genetic make-up, but don’t start making excuses again. The world is full of superstars who had no running start and plenty who got their inner strength from facing adversity.

Average is a dangerous illusion

All my life I have sought relaxation, release and inspiration from games of chance. I know the numbers and I totally understand what you have to do over the long haul to come out ahead. I am happy to say that I have been coming out on top since my early twenties and if there is one thing you must learn if you are to stand a chance against bookmakers, poker players, or any other adversary it is this.  The averages are the things that make you profits, but to achieve an average that keeps you ahead you have to perform above average by a good margin at all times. You don’t just need a margin to win by, you also need a margin for error.  Then it all works out like the good book says. Sadly it is true that the level we aim at is always a shade higher than the one we actually achieve

Average, for all it’s flaws, is above and beyond the capabilities of so many and only because of their mind set. The Peter Principle : Why Things Always Go Wrong Paperback – August 19, 1998 was and still is  a master class in systems thinking.
Peter observes a phenomenon we are all familiar with, i.e. that once people begin on the promotion ladder, they will then, as members of the hierarchy, be promoted until they reach a level where they are totally incompetent.    Naturally this comes as no surprise to the reader, what still seems to surprise many is that the outcome of this apparently innocuous behaviour dictates that everybody in charge in too many businesses, then and indeed today is incompetent to some degree. Had I made this statement before presenting the evidence, you would have dismissed me as a crank and convinced yourself not to listen, or found another escape, but now that you have read this far, surely the conclusion is inescapably true even if the reasons for such behaviour are overly forgiving in many texts.

The average, therefore, is not only something that describes systemic incompetency, but over the long haul, it is indeed the result of settings ones sights somewhat above that level. Are you still content to get up tomorrow and set out to be average?
At the end of every good lesson is a stiff test and here is yours: What did you take from this little blog?

  1. The world of business is messed up and there is no point in even trying, what can I do?.
  2. The world of business is full of incompetent people, the opportunity for competent positive people has never been greater.

You can mark yourself on this one

Confirmation bias at the speed of light

The extraordinary world of the trader really opened my eyes

Image result for halo effect

Most readers will already be aware of confirmation bias and will no doubt believe they have it under control. Good for you. If however you are trader, or gambler the likelihood is that you have got it down to a fine art and it has become a heuristic behaviour.  What I mean by this simple, is that you’ve been doing for so long and become so attached to the theory that you are smarter than the rest, that now your brain does it in auto-mode without your intervention or even awareness.

Recently I spent some time developing trading tools for people earn a  living trading movements on a betting exchange.  The betting exchange, for those who are not familiar is a simplified clone of a stock exchange and is very similar to currency trading .

Some of these people act as bookmakers accepting bets form the public, while others simply trade the movements in the market or “SCALP” the market.
I was amazed to hear bookmakers of some standing use the phrase, “ Let’s get this one beaten”.
Quietly testing the intent of this over a period of time I realised that they actually associated their attempts to attract money and lay the runner with the runner losing.  Naturally they would never admit to it openly and they all know that such a thing is impossible, yet they daily select a weak runner and go about betting against it with the hope that it will be beaten and regularly it loses and bit by bit the brain has begun to associate tis intent and action with the outcome. Given they will be laying an 8: shot that really as a 1 in 12 chance of winning, the see it lose 11 times out of 12.
What is happening here is the brains own “Inspect and adapt learning process”, taking what it sees at face value and jumping to dangerous conclusions.
For years renowned physicians dispensed useless or even dangerous treatments to unsuspecting patients while convincing themselves and the patients that it was having a positive effect. After all, some of these people recovered. I wonder how much of this still goes on?
Economist and ex trader Max Keiser recently did a TV show on economics where he talked about stock traders believing they were changing the economy by their actions when in fact they are simply gambling with liquidity against other traders.
The UK government has been conspicuous in their inactivity in terms of fixing the economy, or even banking since the crash. They have sat back and conserved the status quo for all intents and purposes, yet George Osborne makes speeches in which he associates his office with a “reported “ improvement in the economy. Has it improved? If so, has it improved beyond a possible “ gently rising tide”?  Does he actually believe it?  What do you think?

Given the power of such self-delusion, would it be a shock if we found traders fixing things like exchange rates, or would it be far-fetched to imagine it might then stretch to bribing politicians and officials.
If those same people had gone into the munitions business instead of banking, do you think they might find a way to start wars? Do PMs and  generals ever admit that they achieved nothing ( best case scenario) or created a catastrophe?

Systems thinking

Negative bias the damage it can cause

Specialist in Smarties, Chocolate Beer consultant, or Expert in customer complaints from Obese women on Tuesday afternoons.

Are you a specialist?
By the way these specialisms do exist and I have no doubt you could add to my collection. If you want a light hearted look visit this article.

As an interim connected to the technology world, I get a lot of calls and emails from recruiters and over the years the, the most notable change is the degree to which these people expect me to be specialised. Why, I wonder, did I spend five years studying the subject to get a broad and deep understanding and then spend the next ten deliberately learning the different aspects of the industry on the ground. This is what we did, what every professional did.  Do you know a lawyer who can only handle attempted fraud by Orientals on diabetic white Americans living in London on Fridays?  I doubt it somehow.

The need for specialisation is the back-bone of economic theory
If you are drawn into a discussion about why some African states have failed to develop a modern economy despite being richer in resources than we are, you will generally find yourself in two separate discussions: One about availability of capital ( An Adam smith fan) and the other about specialisation, or lack thereof.  Given that many of these economies have weak currencies, micro-loans can now finance substantial start-ups and there has ever been more lost money ( for want of a better description) looking for a legitimate looking home, so arguments about lack of capital no longer work. The problem is inability or unwillingness to specialise. The scenario: I grow vegetables, hunt for meat, make my furniture from bamboo, make beer from fruit and find herbal medicines when I am sick.  I am always poor and I lack equipment and skills to do all of this stuff well.
Far better, if I could just grow vegetables and swap some with the hunter for meat and with the carpenter for furniture.  Each could enjoy a margin because of their specialist skills, tools and experience. That is the fundamental theory that still underpins economics. For some reason, in some places it is slow to happen.

 

It gets boring just placing the full stops at the end of sentences, can I have a real job?

The problems rarely lies with the client who needs help, but with the  recruiter who calls himself a “Consultant” but is in fact a commission only salesman who last year was an Estate agent or rather a  “Property consultant”  and knows as much about what I do and what my potential client needs as I do about life on Mars.    For an insight from a legitimate HR person have a read of this

The problem begins sometimes because the client who either doesn’t really know what precise skillset would be best for his needs and either by habit or misconception expects a recruiter to help with this problem. What a very large error that is.
A rough guide goes off to the recruiter who then places adverts via an “autoposter”. This tool is preconfigured and whacks his advert out onto numerous job boards where his agency has accounts.
He then instructs a resourcer to do some searching on the main databases, e.g. Jobserve and Jobsite for IT and these are imported directly into the system and emailed with a standard mailing.

Now the fun begins. The resourcer has not yet been promoted to recruiter and is supposedly learning the business by pouring through millions of CVs starting with keywords searches Now we have identified the first problem.  Just like Google SEO, if you want to appear in the SERPs you must include the keywords.

I sometimes help businesses to profile skills and to shortlist  CVs, so I know just how tricky this can be even for a seasoned professional. A resourcer, or a recruiter with no grasp of the IT profession or the task at hand stands no chance at all. It is simply a random matter of chance whether or not they find a remotely applicable CV and it is no more or less efficient than asking Siri or saying “OK Google” to your phone.
If you’ve ever engaged an agency, you’ll be familiar with the bombardment of pointless CVs and then the ever more pestering phone calls for feedback and pressure to hire.  There is a reason why it feels so pointless, it mostly is exactly that and there is a reason why it is so expensive, all that pointless effort has to be paid for. Don’t be deluded by commission only, that is always the most expensive purchase. If you have two agencies at work and one has submitted what they think are strong candidates, they well be calling every other candidate in the market pretending they are submitting them in order to rule them out for the competition.  Don’t kid yourself that there is efficiency in this.
Why am I telling you all this?

The reason we are being driven to specialise is to a large degree so that recruitment agencies can understand a tiny bit more about what we do.
Let’s face it the way to make it big in recruitment is to specialise in Saturday morning perfume demonstrators and get them all in your database. Easy to understand, no search issues, you can truly be a specialist and maybe even a consultant and all is well with the world.
The problem is that IT doesn’t work this way.  Every system that is implemented impacts and is impacted by many others, all different and employing different infrastructure, protocols, languages, data structures, security arrangements and so on.  You can’t simplify IT to suit your needs and every attempt to do so has ended in tears. Understanding the IT impacts is only the final mile, before that you have to understand the process impacts and manage the stakeholder culture and much more. All of this is heavily entwined and all absolutely unavoidable and critical. When you need a specialist to solve critical problems in your business, ask a specialist for advice not a recruiter.

Using information to support the entire customer journey

Previously

The customer journey  begins when she becomes aware of your existence and never ends, though it is at its most fruitful when she places an order and subsequent orders.

Previously we discussed the folly of looking at “Last Click” as the beginning of this purchase journey, the reality is that it began some time in the past when she stumbled on your business either through a friends, in a blog, or via a search or advertisement. In reality every purchase is generally precluded to a greater or lesser degree by a process of discovery, comparison, discussions, eavesdropping, information gathering, price comparison and leading finally to an order being placed.

Whether and when that order is placed will be contingent and whether she found sufficient information to support a decision, what information she found, what advice she got, what her peer group are doing whether she is in front of her favoured device for ordering, whether she has the cash available yet  and a probably many more issues. For example it matters little that she made her mind up on day one, if she wont have the cash until her salary clears in three weeks. It wont matter how good a deal you offer her if all her friends are advising against your product and so forth.

It is never possible to know all of these inputs and be aware of the state of play, but at least being aware of what it takes to sell an item is very important in determining what steps you take to improve that user journey in a way that is profitable. Below are some examples of information you may collect and use to improve the user experience and deliver revenue upside. This will of course vary from one situation to another.

  1. It begins with being found. You must know where the hungry crowd are going and make sure your food stand is right in their path. Being there when they are hungry is just as important as part of serving your customer as it is to your revenue targets. How to do this is a little off topic for today.
  2. Making sure that the gossip they hear and the advice they receive is unlikely to be negative is critically important. The means of promoting positive vibes in social media are well documented and to a lesser degree we know of business that can help deal with negative comment when it occurs.
  3.  Making the right first impression is critical. The expectation you set is a key metric against which your performance  will be measured.
  4. Becoming memorable and easy to find again is now a key goal. Any way of beginning a relationship that allows you to communicate further is great, getting the customer to download something that will act as a reminder for them is also very valuable. E.G. a useful app for their phone.
  5. Storing a cookie that helps you track their consequent visits and actions will make it much easer to judge their likely needs at any time.
  6. Running multivariate tests allows you to not just find out which inputs drive the most orders, which combinations pf inputs are most successful. This drives very accurate views of customer behavior and allows you to optimise everything.
  7. Once you understand the average customer journey you can provide content and services that help the customer at key junctures while updating your understanding of where they are at with their buying process.
  8. Understanding a little more about the type of product they shortlisted and what they rejected may also help you to understand their needs and preferences.
  9. Knowing the times of week, day, month, or year when they are most likely to make a purchase may help you in selecting an irresistible offer.
  10. Knowing which devices they use for purchase may help you to time your offer better

Here is a simplified example.

Background

My company sells widgets to consumers and the customers come form all walks of life. They purchase from the ecommerce channel. There is a lot of competition online  and customers tend to switch suppliers regularly as offers change. Price is important, but its not the whole picture.
We use advertising via keywords to drive customers to landing pages where they find information on exactly what they searched for. They can also follow links to the main site where they can  learn more

Mrs Jones

Our best customer is Mrs Jones. She uses search engines a lot but not just for finding products but also searching the news and gossip sites. She talks to a lot of people on forums and uses them extensively for advice before purchasing. Mrs Jones enjoys the purchasing process so she does not mind seeing plenty of offers, but she is rarely swayed from her initial choice. Often she decides what she wants and then goes looking for proof that she is right.

After she first selects a product, we know she is giving it strong consideration because she then visits our comparison charts and follows links to some of our competitors.

Our strategy

We think she trusts us because we are not hiding from our competitors and we give her honest comparison. We also help her out with the evidence she is looking for.

We have her email in an opted-in list and we know when to send her a little extra information if she goes quiet. We have a clickstream that identifies a quest (product she searched for) and the different types of investigation she did so far, so we can guess where she is in the purchasing journey.

Sometimes, when she goes quiet, it means she has bought elsewhere, but often she is just waiting to get paid or some other reason, so we keep in touch, but we are careful not to upset her. We rely on her to visit again and to recommend us. On average she makes five visit before purchase.

She is very influenced by social media so we spend a lot of effort on maintaining a good reputation.

Our content is tagged to match the different stages in the quest such as price comparison, features comparison, evidence gathering etc. These tags help us to develop the clickstream that places her on a purchase journey. Because she has purchased before, she is able to purchase with a single click.

Pre-visit

She visits an exhibition  where she sees our stand and meets a polite person who gives her a free pen.

She searches google for comments and finds a positive attitude towards us and our products

First visit

She spends some time reading the general information, downloads a calculator tool and leaves via our comparator to go to a competitor site.

 

Still collecting information

The following week our advertising network presents her a little reminder advert while she is on a competitor site and she returns to ours. This tells us she is still actively and seriously searching and we are high on her list

Decided now

She returns at the weekend and spends some time on the cost of ownership calculator using her tablet.

We know that she likes to purchase using her PC and she might still feel like this. We also believe that price is the only thing now influencing her.
We email her a very hot offer that needs a response before Tuesday and we give her a special hotline for telephone advice promising no switchboard and 12 hours a day of service.

Finally an order

She immediately calls our sales staff explaining a slight issue she has yet not resolved. The sales staff are able to put her mind at rest and she places a n order there and then. It is completed in seconds and she has an email confirmation

Delivery and service continues

Delivery occurs on Wednesday and our service staff phone her unexpectedly to talk her through getting started seeing that she expressed concerns. She expresses her delight with the service.

Recommendations

On  Thursday our sales staff call to make sure she is OK and ask her if she would be happy to recommend us on a social network, she agrees readily and goes public with her satisfaction. This has three important implications:
1. We are committed to keeping Mrs Jones happy.
2. Mrs Jones has publicly praised us and it would be extra hard for her to ever contradict this.  She will make allowances if ever called on to do so.
3. Others who see her comments will be encouraged to do business with us

We have not just sold a product, we have bought a supporter and gained valuable advertising of the best kind. If we worked out the Cost of Goods Sold on customers like Mrs Jones, it would be in low or even negative figures.

 

 

Are you wondering if a recommendation engine is the next big purchase for you?

Some retailers in particular have made a great deal of extra profit through offering clever recommendations to their customers so much so that the notion of the recommendation engine came of age in the last three or our years spurring a wave of new offerings form software vendors and plenty of noise in the blogosphere. Before you go running off to buy one or even nurturing plans t build one, you should give due consideration to exactly what you expect it to do for you and from there you will be better equipped to decide if it is the right thing and finally what type of engine you need and how to acquire or build the right thing.

Ins and outs of recommendations and personalization

Perhaps the oldest and best known recommendation engine is the one used by Amazon.com. This is sometimes claimed to be responsible for 35% of sales. If that’s the case then it’s not hard to see why there is a strong interest from the ecommerce community.  Every customer who selects s product then receives a number of recommendations to other products she may like . Since the customer s usually there to browse, she can live with the annoyance of being sold to and is statistically reasonably likely to find the suggested product worth looking at even if it were driven by a schoolboy randomizer function. A portion of that 35% would undoubtedly be equally achieved by a placebo tool and I would strongly recommend some experimentation before spending large sums.

The down side of recommendation engines can also be potentially substantial.  When Microsoft first experimented with personalization on their website they were a leader in innovation on the internet. I was a regular user at the time  and I remember being frustrated by my inability to find something that a colleague was recommending me to. The fact was that when I visited, my cookie told them I was of type A and these widgets were only of interest to type B. I t  took them about a year to realize their mistake and loosen off the personalization  rules.

In the past year I have had similar experiences with Google search. It is now so focused on commerce that it sends me results it believes I want to see rather than a list of cold hard facts that I want and need.  These are only the few occasions when I became aware of the filters. How much of my online activity is tailored  to a weird misconception of me created by a mad algorithm. Even I don’t have a great idea of what I’ll like tomorrow and that’s how I like it.
Do you want to risk excluding products from your customers because Mr customer looked at something last year that suggests he would not be interested in X. Imagine buying a Vegan book for your best friend and never again being offered a meat menu. Ugh!

 

Types of recommendation engine and what they can do

The Amazon, or Netflix type of engine with which we are all familiar is sometimes referred to as content based because it uses knowledge of your stock database (i.e. content) to decide what Ms H might like and make a recommendation.

The simple version is that:

Product (a) has been tagged to be about [1,2 and 3] Product (b) has been tagged to about [3,4 and 5] You looked at products A and B from a long list therefore there is a strong likelihood you will like other products about [3]  but possibly also about [1.2.4 and 5].
Of course the algorithms are somewhat more complex, but hopefully  you get the gist.

It can also mine the records of previous customers and genuinely say, people who selected product A also Bought product Y and Z. This will have a reasonable potential to be useful also to the customer.

Provided you are searching with intent, this type of implied logic can quickly build a useful picture of what to recommend. If you are just browsing then this interference could be just plain annoying.
The most reliable statistic however when it comes to shopping is that the more things a customer sees the more she is likely to spend, so even the mistakes are not that serious. Remember also that what works for books or movies may not work so well for other products or services.

The key to this type of engine is that it needs little knowledge of you the customer, it takes as inputs knowledge of the content and of what you searched for and how you reacted to the search results.
That is good behaviour, it has no preconceptions and it takes you at face value based on what you do.

Other engines receiving a lot of attention now are referred to as  collaborative filtering  engines.

These engines use vast amounts of data collected in various ways to form opinions about you and use those opinions to show what they think you will like. Some of the data in uses is controversial third party cookie data that is collected without your explicit permission.

Every action by a customer is a piece of information that potentially says something about that customer and the combination of these actions says a little more.

A simple method id to mine click streams and create segments based on identical click streams. Suppose that a high proportion of customers form segment B purchase product Y and your clickstream data puts you in segment B then guess which recommendation my engine will make.

Other information that may be collected and used against you is your interaction in social media. Who you are connected to says the type of people you like and a profile created from the commonest likes expressed by members of this group can be applied by default to you the moment you are seen to me a member of the group, any accuracy this profile has will then improve as a result of your on-going interactions with the engine via its recommendations plus any likes or other social sharing you, or your associates may express.

What is different about this method is that very little needs to be known about the content or stock in order to make predictions about the customers interests, it all comes from social an other interactions.

In theory at least, such an engine can recommend the white box to you with confidence, not knowing what it contains, simply because your colleagues whose tastes most resemble yours all bought the white box.

In reality a combination of the two methods works better because it uses some knowledge of the customer alongside some knowledge of the content to make a more intelligent match with a better likelihood of success. For the second method you do of course need to spend a considerable time collecting the useful data before you can make a start on creating recommendations, though many commentators grossly overestimate just how much data is required. Analysing 10m transactions (data points) wont necessarily give you a significantly better result than analysing 100,000 and certainly not sufficiently better to cover the extra cost.
A further problem with the big data approach is that data is time bound and therefore data form last year may or may not be valid this year. It may as easily be detracting form the result as adding to it.
A large amount of user data may well be relevant to a surprisingly small segment of heavy users whose needs are very different from most of the people you want to offer recommendations to.

People learn and change and the world changes. In 2014  attitudes are very different indeed to what they were on 2004 or even 2010. Most people I know have changed substantially in the past five years and a great deal of surfing is without doubt serendipitous. Google’s Z Moment of Truth is an interesting approach to discussing this subject.

Currently there are armies of start ups offering to find you the perfect restaurant, or movie or whatever and to my experience they are a long way from way form delivering on the promise even if I wanted to be told what to do.

My personal experimentation with Siri ended in abrupt divorce after just a few days and google’s sad attempts at knowing me have gone via the same route. The owner of  Ness claims as his mission to: “become that trusted source for people to find out the next thing they’ll like.”
Isn’t that what advertisers have been doing since the first  TV invaded the first living room?

There is no doubt that at a certain level for certain industries, recommendation engines can deliver substantial extra revenue and that is always a vote in favour, but the right one for the job is important.

For others a revenue upside sufficient to justify the cost can be achieved without causing damage to the user experience, but for some industries, some or maybe most recommendation engines will struggle to improve revenue an may well have serious detrimental effect of your user experience and therefore your brand

 

http://thebridger.co.uk/using-personalisation-cleverly-to-grow-your-customer-relationship-and-keep-your-sanity/