United Healthcare and OptumRx

How “Aggressive Marketing” Can Kill Great Customer Service

By Joni Newkirk -  CEO, Integrated Insight

I loved UnitedHealthcare. They’ve been my insurer for over four years and I’ve recommended them to friends and family as I found their coverage and service to be better than expected - until today.

Recently, UnitedHealthcare chose OptumRx as their mail order provider of pharmaceuticals. Despite the claim of lower cost, I chose to keep filling my prescriptions at my local pharmacy for a number of other, non-cost related reasons. We were automatically enrolled into the OptumRx program by UnitedHealthcare, and OptumRx has been aggressive about trying to get our business, but we’ve declined.

Today, we received a letter saying we would have to start paying 100% of our medication costs if we did not start using OptumRx, or, we could call and dis-enroll from the mail order provider program. Easy decision since we were not using mail order anyway. The OptumRx customer service agent was quick, helpful, and dis-enrolled us with no questions asked. She had obviously been to this rodeo before. She was also a bundle of insight as to what would happen next, letting me know that despite calling and dis-enrolling, UnitedHealthcare would automatically re-enroll us next year when our benefits came up for re-enrollment.

Think about it. On most health plans, if there are no changes, you do nothing. Having dis-enrolled from OptumRx, shouldn’t that now be part of my record? On the phone with UnitedHealthcare I go. The customer service agent tried to smooth over the issue, but when a corporate policy or process is just plain wrong, there is only so much an agent can do. He said we would get a letter, and we could choose to opt out at that time. I challenged him. There is a difference between a letter informing you about the service and giving directions to opt in, versus a letter saying you personally have to take action to dis-enroll – again. Further, he mentioned that if you do not dis-enroll – again - after a couple of retail pharmacy refills, you will be threatened with paying 100% of your medication costs. He offered up without asking that this was “aggressive” marketing, but confirmed that was how the process worked.

Forcing members to experience Groundhog Day every year - to make a phone call or go online to dis-enroll again from a program they intentionally dis-enrolled from the year before – is beyond poor customer service. It ignores what is right for the customer in an effort to hard sell a program that apparently does a poor job of selling itself. I’ll go through the pain each year as I’m otherwise satisfied, but I feel sad about this chink in their armor, and I’ve lost trust in the company. Now my enthusiastic “Yes!” recommendation will become “Yes, but…” You can do better, UnitedHealthcare.

My PSA for the TSA

By Kirsten Snyder - Director, Integrated Insight

After much prodding (and harassment) from my husband, I finally decided to apply for TSA Precheck.  Because I don’t frequently travel internationally, I didn’t think Global Entry was necessary.  However, after reviewing the application process and prices for both Global Entry and TSA Pre-check, the government got me to buy up.

Let’s start with what you get with each program.  TSA Precheck gives expedited security processing via a special line, where you don’t have to remove your laptop, take off your shoes, or any of the other annoying security measures normally required by the TSA.  Global Entry gives you the same benefits as TSA Precheck in addition to expedited and automated entry through customs and immigration.  And once you are approved, the program eligibility lasts for five years for both, after which time you have to go through the application process and pay the fee again.

Because Global Entry has been around for awhile, the introduction of TSA Precheck created a quite an attractive upsell structure, albeit accidental.  At just $85 for TSA Precheck, there is significant benefit for anyone who travels with even mild frequency.  And because they maintained the $100 price, now a mere $15 more you can get you Global Entry.  With most of my flying within the US, receiving expedited security access was of primary interest.  However, for $15 and a five year window to travel internationally, upgrading to Global Entry seemed like a no-brainer, even if I only traveled internationally once.

With one main objective of these programs being to reduce staffing requirements at airports, the strong value of the current pricing should attract frequent fliers in droves.  However, it seems that there is probably opportunity for the government to increase the prices while still continuing to attract new fliers to the program, in particular for Global Entry.  When you compare it to Clear, which costs $179 annually and arguably gives you fewer benefits, it can only be a matter of time before the government realizes the program is underpriced.  How does this apply to your company?  Strong product stratification can provide significant pricing leverage, creating upsell opportunities and generating incremental income.  A 1% increase in price realization can drive 5% to 10% plus increases on the bottom line.  

Survey Writing

When you emphasize everything, you emphasize nothing

By Laura Iles - Senior Consultant, Integrated Insight

This week, I took a survey to evaluate an online purchase I made with a major company. What I found was an interesting, though ultimately failed, attempt to direct attention through an excessive use of CAPITALIZATION, underlining, bold, and italics. The overall effect, far from helping me to identify key pieces of information, was to overwhelm me with awkwardly presented information.

When respondents find a survey difficult to read, they are more likely to abandon the survey entirely or, worse yet, select random answers. While market researchers put measures in place to identify randomly selected responses, it’s a much better use of resources to reduce the likelihood of capturing invalid data on the front end.

In today’s age of one-sentence updates and bulleted articles, yes, readers skim, and it is necessary to take this into account when designing survey questions. However, overemphasis makes it even more difficult to understand the content. Caps lock reads to most of us as yelling. Which is not to say that it’s never useful, but it is important to retain awareness of how the writing is interpreted by the end user.

The use of formatting to accent particular information is easy enough to get away with on a short question with one detail emphasized. What follows is a logical use of capitalization from the survey in question: the formatting emphasizes the main point of a very simple question.

Even skimming, I know immediately what the survey is asking, and what my answer will be.

It is more difficult to accomplish on the following question, because there are so many parts. By emphasizing everything, the author of the survey made it more difficult to extract the critical information.

I had to read the question multiple times to understand what was being asked; it’s overly verbose and convoluted. Underlining and capitalization do not make up for imprecise sentence structure. Further, the majority of each answer is underlined, rendering the emphasis invalid. When you emphasize everything, you emphasize nothing.

As a writer, it’s tempting to think every piece of information you write is important, and should be accentuated. It’s not. The primary job is to convey information with clarity, and that almost always requires heavy editing.

Knowing how to identify the important information, eliminate the rest, and direct the reader’s attention without causing overwhelm is a critical skill for survey-writing, just as it is in a business plan or the next bestselling novel.

Let’s take a look at a potential rewrite of the offending question:

Extraneous and repetitive information have been eliminated in favor of clarity, and only the details which differentiate each of the answers are emphasized.

Quite a bit of skilled work goes into survey-writing and design, and even small details will impact response rates and reliability. Good surveys start with clearly written questions.

Too Much of a Good Thing is Bad

By Candy Parks - Vice President, Integrated Insight

I love to shop at CVS on Sunday afternoons.  It’s routine – it’s therapy.  I browse the circular in the newspaper, take my coupons, and scan my rewards card the minute I walk in the door to see if there are extra savings surprises awaiting me.  I see the same people every Sunday – they always greet me as I come in and they remember things about me that I appreciate.  They know I buy diapers for my niece who had a baby.  They know I was out last week because I was traveling on business.  This kind of attention is fine with me.

Last Sunday I walked in and was greeted by someone new.  His greeting was a bit exuberant, and considering I’m a fairly bubbly person, for me to say something was exuberant is saying something.  Not only could I hear him, but I’m quite certain shoppers in all four corners of the store and outside in the parking lot could hear him as well.  Just a bit over the top.  I chalked it up to ‘new guy trying to make good’, smiled, responded, and went on my merry way.

Or so I thought.  I’m browsing make-up, and boom – there he is.  He loudly tells me a story about helping a woman pick out lipstick, but he’s not sure he did a good job.  I smile and walk away.  Clearly a clue I’d like to be left alone.  I browse pet treats and boom – there he is to tell me about his Pomeranian who just died.  I nod sympathetically and move along, wishing he would leave.  I hit the greeting cards and boom – there he is to tell me how smart I am to buy my Easter and Mother’s Day cards early.  By now, I’m more than annoyed.  

I’m all about customer service and being attentive. But hounding customers can be as bad as ignoring them.  When ignored, I’m annoyed, but I can ask for help.  If hounded, it’s difficult to say ‘leave me alone.’  I left CVS that day with a receipt totaling $14.27, far less than the $100 plus I usually spend, having literally been chased from the store.   There are some folks who would dearly love to have someone to talk to and walk the store with them, while others will find the attention overbearing.  Teaching employees to “read” the customer is a critical component of exceptional service, and a skill well worth developing.  

An Unexpectedly Polite Marketing Campaign

By Laura Iles - Sr. Consultant, Integrated Insight

My friend was recently in the market for a new smartphone and service plan. Of course, we knew all the major providers, and had a long discussion about our past experiences with the various firms.

While driving around one day running errands, she was listening to the radio when she heard MetroPCS was sponsoring the station that afternoon. They promised to play only one Metro commercial each 15 minutes, and leave the rest of the time completely commercial free.

She later told me that it was a nice break from the usual influx of commercials, and Metro’s commercial was played just often enough to stick in her mind, but not so often that it became aggravating.

To be honest, Metro had not even occurred to us as a possibility. While they previously merged with T-Mobile, they are still struggling against the existing consumer perception of having a lower-quality network, at least among the individuals with whom I've spoken. Neither my friend nor I would have thought of them as a potential new service provider on our own;  they just weren't top of mind for us in the telecom industry.

But, by the end of the day, she had heard the commercials enough times that Metro was ingrained as a contender for her next purchase. Feeling grateful for the fact that they actually made the drive more pleasant by reducing the number of commercials overall, my friend decided it couldn't hurt to go in and talk with them.

On impulse, she stopped at a store on the way home. Within an hour, she signed up for service with MetroPCS and bought her new phone from them.

A simple, unexpectedly polite, radio marketing strategy drove incremental sales. Metro profited from not only her phone purchase that day, but the ongoing monthly service, and positive word of mouth as well. It’s been over a month and she’s still happy.

While the commercials themselves were nothing special, displaying a little goodwill toward customers can sometimes make all the difference. It’s such a refreshing change from the back to back commercials that, often quite literally, scream at you to BUY NOW!

For Metro to purchase the airtime, and then be gracious enough to resist filling it up nonstop with their firm's commercials, was an unexpected generosity. Customers often switch providers for reasons other than price. Could something so simple, yet unexpected, be your firm’s point of differentiation in marketing?

Why the Airlines Created Premium Economy to Solve a Pricing Problem

By Brett Snyder

Brett Snyder is the author of the award-winning airline industry blog, “The Cranky Flier," and president and chief airline dork of Cranky Concierge air travel assistance, for which he has been named one of the Top Travel Specialists for the past three years by Conde Nast Traveler.  He is a contributing editor for PlaneBusiness and he writes for both CNTraveler.com and the Intuit Small Business Blog.  Snyder previously worked in pricing, marketing and strategy roles with several airlines, including America West and United.  In 2005, Snyder created the travel search site for leading comparison shopping company PriceGrabber.com.  Snyder graduated from The George Washington University with a bachelor’s in business in 1999 and Master of Business Administration from Stanford University in 2004.

Part of having an effective pricing strategy is ensuring that you have the right products in the market to cater to interested consumers.  This might sound like a startup issue, but it's not.  Product and pricing are constantly evolving, so ongoing reviews are very important.

One needs to look no further than the airline industry to see an example of how the product offerings have evolved.

Initially there was only one class of service, and it was expensive.  Travelers were treated well (or as well as possible flying small, slow airplanes for hours and hours on end), and they paid for it.  But eventually the airlines began to realize that there was real opportunity at a lower price point.  Coach travel was born.

Initially, the difference between coach and what became First Class wasn't all that different.  And the pricing reflected that.  But as countries moved toward deregulating their airline industries, pricing diverged dramatically.

In the US, coach prices plunged as airlines raced to add capacity and serve this growing demand.  First Class prices, however, stayed high.  They were meant to cater to the original air traveler who wanted a superior experience.

In the intercontinental market, the price differential became so great that eventually a middle tier was introduced.  That was Business Class.  Business Class was created as a way for travelers to get something better than coach without having to pay the many multiples above the coach price to sit in First Class.

That lasted for some time until the same trends from before took hold in the new three-cabin environment.  Many airlines decided to remove First Class or shrink the First Class section while improving their Business Class product, hoping to take traffic from those who flew First Class on competitors.  When British Airways and Virgin Atlantic introduced flat beds in Business Class more than a decade ago, it was the first shot fired in a race that would make flat beds the standard.

First Class became something for the super rich with small, intimate cabins on fewer and fewer flights.  Business Class continued to be a premium product but one that was at a price point that could appeal to more people.  At the same time, coach prices continued to plunge in inflation-adjusted dollars.

The result was yet again a massive divergence between coach prices and the next class up.  How could this conflict be resolved?  The airlines began introducing another class.  This has manifested itself differently in the US than it has elsewhere.

In the US, airlines have simply increased legroom in a few rows at the front of coach and they sell those for a few dollars over the coach fare.  But around the world, airlines like ANA, Japan Air Lines, Air France, British Airways, and, just recently, Lufthansa have introduced a truly new premium economy class.  

[Lufthansa link: http://www.lufthansagroup.com/en/press/news-releases/singleview/archive/2014/march/05/article/2828.html].

Now if a flight from the US to Europe is running about $1,000 in coach, $6,000 in Business, and $9,000 in First, there is now a premium economy option in the $2,500 range.

Having products that fill in the gap like this become important because they provide a real upsell opportunity for the price-conscious consumer who also values a premium offering.  For the airlines, Business Class had become too much of an upsell to tempt the average coach traveler.  But premium economy provides the right product at the right price.

Please Don’t Make Me Think

Keeping Promotions Simple

Laura Iles - Senior Consultant, Integrated Insight

My favorite grocery store runs a weekly ad, Thursday through Wednesday. It took me a little while to remember that the ad doesn't run with the calendar week, but I grew accustomed to it quickly enough. The challenge is, the store also gives out coupons in the flier. Coupons that run through Sunday.

Interestingly enough, it’s often the same coupons from week to week, but they are only available half the time. If I want to take advantage of the sales pricing and the coupon, I now have a 4 day window each week to do my shopping. 

I never remember in time. I can’t tell you how many coupons I've thrown away, sadly unused.

A friend who used to work as a cashier at the store rolled his eyes when he saw the most recent coupon. “Oh yes, and come Monday, half the customers will come in and try to use that coupon, since it’s a weekly flier. Explaining why we would put out coupons with different dates than the fliers they are in was always a treat.” 

I thought about that for a minute, relieved that I wasn't the only one who had made that mistake. “Why would the store do that?” I wondered. “They’re just making it harder on everyone.” 

For every customer who tries to use an expired coupon, the manager either has to honor an out-of-date offer (in which case, why limit it at all?) or risk upsetting the client. That’s a losing situation for someone, no matter how it is resolved. And it slows down the checkout process, frustrating other waiting customers. But still the out of sync promotions keep coming, week after week. 

Certain offers need to be fenced, and consumers understand that. But, why is the store running the promotion in the first place? Perhaps it’s driving incrementality, keeping the store front-of-mind, or rewarding longstanding customers. No matter the end goal, if the offer is confusing enough that half the customers consistently misunderstand, is it really driving behavior the way it was intended to? 

So please don’t make me think. We’re all on information overload, and for many of us, we just aren't interested in expending additional mental resources on a company’s promotions. The design team can emblazon “4 DAYS ONLY” in capital letters and bold typeface at the top of the coupon, but when it’s buried in a visually busy flier, it’s still easy to overlook. Online, in print, on TV – we've all learned to tune out the clutter. 

If it isn't necessary, don’t complicate the promotion. Run the coupon for the full week, but don’t run it every single week. Or put out a special insert, separate from the weekly flier. I’ll happily try a new product or buy extras of something if you give me a coupon – but not if I have to rearrange my schedule for it.

This store is not a discount store and, like most of the regulars, I am not an avid coupon clipper. I pay a little more for the service, the selection and the convenience. When promotions are out of sync with each other, it muddies the waters for the customer, which in turn makes work more difficult for the front-line employees. No one wins in that scenario. Whenever possible, keep it simple.

Common Courtesy Counts in the Customer Experience

By Candy Parks - Director, Integrated Insight

As children, some of the first words we learn are ‘please’ and ‘thank you’ - the common courtesies. Another important one is ‘you’re welcome’ - one we seem to forget as we grow up. In years of doing customer satisfaction research, I’m always amazed at how wowed consumers are by courteous behavior from businesses with which they interact. It’s often this common courtesy that sets one grocery store, bank, or hotel apart from another. As consumers, they are taught to HOPE for courteous behavior, but not to EXPECT it. So when a business delivers, it sets them apart. And voila, a consumer advocate is born. Consider how people talk about Publix, Nordstrom, Disney, Ritz Carlton, American Express, and Chase banks.

I’ve learned there are few acceptable replacements for the common courtesies, especially ‘you’re welcome.’ Ritz Carlton and Chick-Fil-A use ‘It’s my pleasure’ and that’s a winner. It conveys that they were happy to be of service. What customer doesn’t appreciate that?

In contrast, here are some that I think should be stricken from the customer-facing vocabulary. When a customer says ‘thank you,’ it is not appropriate to say:

• ‘No problem.’ I just gave you $500 and I say ‘thank you’ for the service/attention/product/etc. And you say, ‘no problem.’ Really? Of course it’s not a problem for you. You just got $500 of my money!
• ‘Sure thing.’ Well, yes, I guess I was a sure thing, but you’re not making me feel very good about it.
• ‘Yeah,’ ‘Yep,’ ‘Uh huh’ or any other variation of ‘yes.’ I didn’t just ask you a question!
• And the absolute worst response to ‘thank you’ is NO RESPONSE AT ALL. A head nod is not a substitution for actual words. Surely you can trouble yourself to say ‘you’re welcome’ or ‘thank YOU, I hope to see you again.’

If you want to create a customer experience that is outstanding in your field, create a culture of courtesy. Make it a basic expectation of how you deal with each other in the workplace (because you are modeling the behavior), and how you deal with your customers. Train for it, monitor it, and hold people accountable for the behavior. It will cost you nothing in capital, but could net you loyalty and increased revenue. I drive past two other grocery stores to get to my Publix – and I pay more for my groceries – because I like the atmosphere and the way I’m treated. I don’t think I’m alone.

Why Pizza Should be Square

By Kirsten Snyder - Director, Integrated Insight

The announcement of Sbarro’s bankruptcy filing this week got me thinking about Pizza. And although Sbarro’s problems are much bigger than just the price of their pizza, I wonder if traditional pizza chains couldn’t benefit from abandoning their traditional round pies.

Have you ever ordered a pizza and asked how many pieces are in a medium vs. a large?  Chances are that you have been told 8 in one and 10 in other.  However, in the world of round pizza not all slices are created equal. So, how much pizza do you really get?

Pizza companies try to answer this question by using the diameter or with large and overlapping ranges of the number of people it feeds. Both of these methods still leave much interpretation to the customers.

Think back to your high school geometry class. When you calculate the area of a 12” circle versus a 14” circle, although there is only a 2” difference in diameter the difference in area is about a third.

So, the more difficult it is to understand the difference in size, the more difficult it is to see the value in the buy up structure. This makes it challenging for pizza companies to ideally stratify pricing by the size of the pie.

For example, at my local Domino’s a small 10” cheese pizza is $5.99, a medium 12” is $7.99 and a large 14” is $9.99.

As customers contemplate what size pizza they actually need, the buy up structure easily draws them into the largest pie without a second thought.  But it might not be optimal for the customer or for the pizza company.

That leads me to my point:  square pizzas are better. I will admit that square pizzas create the undesirable middle pieces with no crust. And in Naples, Italy the mention of square pizza would probably cause a riot, but financially it gives companies more pricing leverage through a clearer buy up structure. It is easier to communicate that a small square pizza gives you nine 3-inch pieces while a large pizza gives you 25 3-inch pieces – more than double that of a small pizza. So, now pizza companies can optimize their pricing structure, allowing them to take more pricing, while still providing the strong value proposition on the largest size pizzas.

Consumer products and overwhelming choice

How much is too much?

By Joni Newkirk - CEO, Integrated Insight

I see it frequently:  The blank stare at a shelf in the grocery store or the menu board at a fast food restaurant.  I know it well as I often find myself in the same situation, looking for a certain item and finding everything but.  It doesn’t seem to stem from too many brands, but rather, the ever increasing number of choices for almost identical products within a brand.   Sometimes, it seems the simpler the product, the more complicated the choice, like ordering a Starbucks coffee.

Take for example, Triscuits.  I love the original Triscuit, but more than once I’ve walked out of the store empty handed.  The original was either sold out or shoved so far away that it became difficult and time consuming to find.  Today, you can buy Triscuits in at least 15 flavors, not including Thin Crisps.  This photo, posted by Ted Parsnips at www.tedparsnips.com, sums up the resulting display that consumers are faced with every day.

  

Drive-thru menus arguably provide an elevated level of frustration for the consumer.   Even younger generations who have been raised in the world of overwhelming choice can find it less than inviting as evident from this post by my 22 year old son:

“Taco Bell’s drive thru menu is really big and intimidating and I just can’t handle it sometimes.  You’ve got someone behind you in line, the lady in the box waiting on my order, and I’m trying to sort through what seems like thousands of grandes, chalupas, locos, cantinas and whatever the hell a gordita is to find what I want.  It’s like the first world problem of our generation.”

Which led me to wonder how often companies study “non-purchasers” versus mining the transactional data among those who did purchase.  Do they really know why consumers behave as they do?  Does my neighborhood grocery store know how often I didn’t buy a product because I lacked the patience to spend more time searching?  Does a fast food restaurant realize how many customers balked because the line was moving too slow as others studied a menu of overwhelming choice?   Does an online merchant know how often their carts are abandoned because consumers run out of time studying the long lists of almost identical items?  A recent article in QSR confirms drive-thru transactions are indeed becoming longer, but is the increased choice really paying off?  According to a now infamous study on the purchase of jam, when faced with significantly more choice, consumers were far less likely to make a purchase.

“Congratulations! You’ve created a taco grand burrito.”  

Working toward more streamlined and simplified selling may help manage the choice. For those that know what they want – “I’ll have the Beefy Crunch Burrito with Flamin' Hot Fritos, please” - have at it. Perhaps mobile apps to pre-order will alleviate some of the pain, but others may be better served by throwing them a “build your own” lifeline, much like the Cantina Bell menu attempts to do for a limited portion of the overall Taco Bell offering. 

We all want it our way, so the trend toward more choice is likely to continue. Just don’t make us think too hard. 

“What’s in it for me?”

Writing Compelling Website Copy

By Sue O’Shea - Director, Integrated Insight

Often times my “go-to” resource for all things website is Smashing Magazine, the online magazine for professional website designers and developers. In their article “A Quick Course on Effective Website Copywriting,” the author, Peep Laja, reminds copywriters that “the goal of Web copy (and ideally your website in general) is to get people to do something—to sign up, make a purchase, or something similar.”

Approaching copy from the “What’s in it for me?” viewpoint – the benefit visitors will receive by taking action - helps keep copy focused on the end goal. Visitors come for information and solutions to their problems. Don’t make it hard for them to find by using unnecessary lines of descriptive or flowery copy to describe your product or service. Another land mine, especially for organizations offering professional services, can be going on too long about your company, its history, and the many awards its won – all your readers really care about is how you can help them. Retail sites are discovering that giving consumers a reason to come to their sites other than to shop can create sales. By adding copy and content that offers advice on using a product, the best styles for your body type, or answers to common problems will enhance your shoppers experience and increase the odds of purchasing and returning again and again.

Another practice I try to employ is the avoidance of industry jargon and “insider terms.” It can confuse readers and make them work too hard to understand what you’re trying to communicate. I suggest asking a co-worker to act as the “jargon police” to keep the copy as lingo free as possible. Keep it simple, straight forward, and specific.

Your Home Page is your first impression. Therefore it is important it include your company’s value proposition – the primary reason a customer should buy from you.  Smashing Magazine indicates that there is no one right way to go about it, but suggests you start with the following formula and work from there:

• Headline: What is the end-benefit you’re offering, in one short sentence. The Attention grabber.
• Sub-headline or a two-to-three sentence paragraph: A specific explanation of what you do/offer, for whom, and why is it useful.
• Bullet points: List the key benefits or features, but focus mostly on the benefits.

The product page is where you sell the value of your product and where the user takes action (adds to cart, signs up, makes a purchase, etc.). This is the place to drive home the benefits of your product and how your product or service will solve the issue at hand. There is always the question of how much information is too much, but an IDC (International Data Corporation) study showed that 50% of the uncompleted purchases were due to lack of information. Include as much of the product information as practical, and be sure to have a strong call to action. Studies have shown website visitors want to be led through the process, therefore the call to action must be clear and compelling. The article “Five Copywriting Errors That Can Ruin A Company’sWebsite” offers these examples:

•  “Order now to save 15%,”
• “Get your artist’s rendering within 24 hours,”
• “Learn the 5 secrets to permanent weight loss.”

Call to action is further strengthened with testimonials (it worked!), credibility statements (it’s reliable!), high value (it’s worth having!) and urgency (it’s now or never!). It is recommended that your site have a primary and secondary call to action such as a down loadable white paper or case study. A potential client may not be ready to order, but they may be willing to learn more. Today’s white paper could be tomorrow’s conversion.

The above is only a short primer on compelling website copy. The two articles I referenced provide additional outlines and tips to help along the way. To quote Smashing Magazine’s contributor Peep Laja, “The best Web copy is not the one that uses sophisticated persuasion and mind manipulation techniques. The best copy provides full information about the product, its benefits, and makes it clear whether it’s the right one for the user.”

Customer Service and Stereotyping

By Bennett Parks -  Research Associate, Integrated Insight

I recently had a disappointing, albeit somewhat expected experience at a jewelry store.  I bought a charm bracelet online for my girlfriend for Christmas, and not a cheap one.  (Hello Pandora!)  We needed to exchange the bracelet for a slightly longer one.  Being 21 years old and walking into a jewelry store, I feared the experience I would probably have.  We walked inside and were basically ignored by the saleswoman behind the counter.  About 10 seconds later, a gentleman in his mid-40’s walked in and she instantly looked up and began interacting with him.  Disappointing?  Yes.  Expected? Sadly, yes. 

We waited for a good five minutes before another saleswoman came over to help us. She was extremely friendly and kind, but was also closer to our age than the first saleswoman.  I overheard the gentleman that came in after us being helped.  He didn’t purchase anything beforehand, nor did he purchase anything during his brief stint in the store.  Granted, we didn’t purchase anything while we were in the store, but I did make a fairly large purchase online.  My point is, just because someone young walks in to a nicer store or restaurant doesn’t automatically mean they are going to misbehave, or be cheap, or waste the time of the staff.  I understand why many salespeople have this attitude about young people, because many in my generation do behave like the stereotype.  But that doesn’t excuse the stereotyping behavior of service personnel.

It’s this lack of customer service and respect for all customers driving many to online shopping.  Why bother going to a store when you have the convenience of shopping from your computer where the search bar offers more customer service than the staff in a physical store?!  Being a former valet manager at Disney, I know good customer service and I expect it anywhere I might spend money.  I used to train my valet staff to treat every guest with the best customer service possible, partly because it was Disney but also because it’s the golden rule “treat others the way you want to be treated” and experience shows it makes great business sense.  It is well documented that companies with strong customer service capabilities and competencies for delivering customer experience excellence are outperforming their competition.  According to Lee Resource Institute, about ninety percent of unhappy customers will choose to not do business with you again and unhappy customers are twice as likely to tell others about their experience as compared to a happy customer.  Further, attracting a new customer costs five times as much as keeping an existing one. (Peppers and Rodgers 2009 Guest Customer experience monitor)  A staff that is considerate and respectful is more likely to have kind and respectful customers.  You get what you give. 

Granted I’m young, but I think it’s just good business sense to treat each person who walks in your store like you would want to be treated.  Young adults are very quick to jump on social media and share about their good or bad experience.  Don’t judge a book by its cover.  Don’t judge a customer by their age.  

Taking the Sting Out of Surge Pricing

An Uber Experience

By Kirsten Snyder - Director, Integrated Insight

With two kids under the age of two, I don’t really get out much.  However, when my husband and I were invited to the Delta GRAMMY party featuring Lorde, I immediately began to prepare for the evening.  Since the party required us to drive up to Hollywood from Long Beach during rush hour, we decided to Uber it.  For those of you not familiar with Uber, it’s an app-based car service with offerings that range from affordable everyday cars to high-end luxury cars.

When we told people that we took Uber to the party, it immediately sparked conversation about their controversial pricing model – as they call it surge pricing.  It is not a new concept – just a new term for demand based pricing.  If you Google “Uber surge pricing,” you will get a number of articles arguing both for and against the practice.  Supporters say it is common, and they compare it to airline pricing, while critics argue it is strictly price gouging. 

Uber’s CEO, Travis Kalanick, argues that the objective of surge pricing is to provide more supply -- higher fares incent drivers to get or stay on the road -- rather than to strictly maximize revenue.  In general, I don’t disagree with the pricing philosophy, and believe the Uber model provides customers with a more efficient and reliable service, which is often lacking in the traditional taxi industry.  The problem I have with Uber’s model is it doesn’t allow you to plan your trip based on pricing.  Although airfare changes often, once you book your ticket it doesn’t change, so if you want to fly on the Sunday after Thanksgiving you know that it will cost 50% more than the next Tuesday.  If you are planning to use Uber round trip, it could cost you $50 on the way there and $150 on the way home, but you won’t know the return price until you request the car.  Even if you wanted to request it in advance, you can’t.    Kalanick’s response to the critics is if you don’t like the price, then take a taxi.  But how do you know if you like the price until you actually know the price?

There are a couple relatively simple ways for Uber to offer surge pricing while developing goodwill with their customers.  The simplest solution would be for Uber to offer a round trip pricing guarantee, where you prepay for your return trip as long as it happens within the same day or night.  By getting customers to pay for a return trip in advance, Uber can also see how much demand to expect later that day which could help better align their supply and pricing.

Uber has created a unique business model that provides a great service.  As they continue to grow, creating pricing strategies that encourage use and positive word of mouth will likely improve performance even more.

How Your Salespeople May Be Diluting Your Rate

“I think we have a promotion I can give you!”

By Joni Newkirk - CEO, Integrated Insight

It happened again last weekend.  While I am thrilled to have traded my old iPhone 3G for a brand new Samsung Galaxy 4 for just $6, I still cringe when I think about the transaction.  A very competent and beyond helpful sales person offered me not one, but two special promotions.  Promotions I did not know about before entering the store, nor inquired about once there, just offered up in the context of being helpful.  And it happens on a regular basis at the grocery store.  I’m often asked if I have any coupons and the answer is always no.  But sometimes, I happen to buy something that is indeed listed in that week’s promotional flyer and almost always, the cashier feels obligated to find the coupon in her pile and use it on my purchase.  No asking required.  Just being a helpful cashier.

This is pure dilution for the company.  While one or two items at the grocery store may seem insignificant, over the course of the day and across many cashiers, it adds up.  In the case of the phone, it was a quick loss of $150 in just 30 minutes.  I walked in knowing what I wanted.   I wasn’t shopping price, hadn’t been elsewhere, and didn’t even have a contract to worry about - just needed a new phone with as little hassle as possible.   On the other hand, “save the sale” tactics can be quite effective if executed well.  On the same weekend shopping trip, our purchase of outdoor furniture included a “save the sale” item which the salesperson played like a pro.  Without squelching their desire to be great salespeople, companies need to make sure their employees understand the why behind basic pricing and promotional offers.    Consider the following for starters:

• Advertised promotions are designed to drive new customers or more frequent purchase from existing customers.  Those who are motivated by price will find the promotion and take action.  Those not motivated by price are unlikely to feel slighted if not offered something they knew nothing about, and surely do not expect you to do coupon clipping for them.
• “Save the sale” tactics are not promotions.  Use them sparingly and only when the sale is actually in jeopardy.  First offer the most logical choice or better, and revert to a lower price option only if the customer balks and is prepared to leave.  Let the lower price be driven by an alternative item, not just by dropping price.
• Unadvertised “promotions” have the greatest potential to backfire, calling into question the company’s price integrity.  It was after the “promotional offer” was applied to my phone that I began to feel as though I wasn’t paying a fair price to start – all because of the way in which pricing was manipulated on the fly.  Despite the great price on the phone, I no longer felt in control.

Effective promotions generally deliver on all of the following:

• Lend themselves to compelling marketing messages.
• Target specific audiences and time periods.
• Are fenced to avoid dilution.
• Have a strong sense of urgency.
• Can be yield managed.

Share your insights on pricing with your front line team.  The more in tune they are with your pricing strategy, the better they can help grow the business. 

Big Data is a Big Deal

By Sue O'Shea - Director, Integrated Insight

“Big Data” is a big deal.  It possesses one or more of the following characteristics – high volume, high velocity, or high variety and comes from sensors, devices, video/audio, networks, log files, transactional applications, web, and social media - much of it generated in real time and in a very large scale. Businesses are all collecting, organizing and analyzing data to some degree, but how do companies get the sheer volume under control and mine the data? Big data is only useful if you know how to analyze and glean insights and put the insights into action.  If not, it’s just another report on the desk.

Wired Magazine offered the below insights to help understand the clues that the data is providing.  Among the insights are:

• Treat Your data as a ‘Gold Mine’… and Mine the Gold –   Collecting this valuable information is the first step in truly understanding your customers’ experience.

• Don’t Always Assume You Know What Your Customer Wants or Needs – Allow the data to provide insight.

• Focus on Quality of Your Data rather Than Quantity – Focus on the data that matters most.

• Be Agile – You technology must be agile and able to adjust as quickly as your customers change their preferences.

• Your Business Operates in Real Time – So Should Your Analytics – The ability to gain insights into your customers’ experience and behavior in real time allows you to understand what’s happening as it’s happening.

• The Data is Yours, Use Every Bit of It – It is the granular information about your customers’ behavior and experience that will render the most valuable insights.

• Look at the Full Picture –Enrich data by correlating it with other data that resides in different data stores to make sure you are able to “connect the dots.”

However, before embarking on a big data quest, IBM, a provider of big data IT solutions, recommends getting these things right first:

•  Build a culture that infuses analytics everywhere. Empower all employees to make data-based decisions, instead of relying on instinct and past experience.

•  Be proactive about privacy, security and governance. Ensure that the data being analyzed is safe, secure and accurate.

•  Invest in a big data and analytics platform that is tuned to the task of handling all types of data, regardless of form or function.

Big data has the power to help companies gain a full understanding of customers—what makes them tick, why they buy, how they prefer to shop, why they switch, what they’ll buy next, and what factors lead them to recommend your company to others.  If done correctly, it can help marketers not only make better decisions but more profitable ones for their companies.

If you want to learn more about Big Data, take a look at www.bigdatauniversity.com.  The website offers a variety of free and fee based courses by experienced professionals and teachers.

I Spy...

By Lori Georganna

Chances are you have played I Spy, either as a child or with your own children to keep them occupied during a long trip. Beyond the distraction benefit, this game helps to build children’s observation skills. These same observation skills can help you uncover opportunities with your employees and customers. It requires slowing down, observing what is around you, taking notes on what you see, and discussing it with your employees and customers.

Marcel Proust, French novelist, said it best: “The real voyage of discovery consists not in seeking new landscapes but in having new eyes.”

Here are some ideas to get you started.

• Watch your customers while they are shopping or interacting with your product or service. What do you observe?  Note what they are doing and what is happening around them that may be impacting their behavior or mood?
• Play undercover boss. Employees who deal directly with customers have a lot of insight as to customer needs and behaviors. Step into front line roles periodically for a firsthand experience with customers. You will appreciate what your employees do and they will appreciate you even more for walking in their shoes!
• Be the customer. Go through the journey your customers take with your company. Make sure to take notes of any frustrations you encounter. Also note what your company does really well.
• Hire an objective observer or ethnographer. Sometimes we just can’t get out of our own way or we need an external partner for credibility.

Once you have some ideas, either on how to improve the existing experience, or for a new product or service, call in your market research experts if needed. Some ideas should just be implemented – either because they are low cost or it makes business sense. Other ideas may need additional exploration and research to determine if they will have the desired impact.

For more tips on how to up your observation game check out these links:

http://everydaylife.globalpost.com/improve-hyper-observation-skills-28842.html

http://lifehacker.com/5960811/how-to-develop-sherlock-holmes+like-powers-of-observation-and-deduction

Don’t Lose on Loss Leaders

By Laura Iles - Sr. Consultant, Integrated Insight

As I watch the ads this season, I’m reminded that loss leader strategies are a favorite holiday pricing tactic of the various establishments competing for our dollars. When used appropriately, discounting below cost can be a useful strategy for pulling repeat customers in the door, driving incremental sales, and establishing new clients. But this strategy is not appropriate for every business, nor for every occasion. Below, we’ll look at some of the critical factors to consider in determining whether this particular pricing tactic will achieve your goals.

Attracting the Right Customers

The first question is whether a loss leader strategy will attract the kind of customers that will remain with the company long term. While steep discounts can entice new customers with a low-risk chance to sample offerings, there is always the chance of drawing individuals who cannot afford to pay full price for the products / services once the offer is concluded, and have no intention of making incremental purchases on that first visit.

This is where market research becomes critical. Understanding existing customers and their motivations will enable the firm to decide whether a discount message of this level will be attractive. Price is not the only loyalty driver – Nielsen research demonstrates that globally, 59% of customers would be most enticed to switch brands, service providers, or retailers for an attribute other than price. Clearly, a dramatic savings message is not the only way to attract customers.

Maintaining the Customer Experience

Prior to execution, consider whether resources exist to manage the volume increases. Depending on how valuable the offer is perceived to be, the deal may end up attracting more customers than the firm is prepared to handle. A sudden spike in online traffic can crash servers and attendance increases may overwhelm stores. Consider whether a more modest savings message would be effective, while helping to preserve the customer experience.

Limitations

Specific limits around the campaign will help to prevent a devaluation of what current customers have already purchased. Loss leaders for specific times (Black Friday) or specific subsets of customers (local residents, particular email lists, etc.) will help to prevent a general weakening of your brand image, as well as shielding the firm from widespread losses if the strategy does not produce incremental sales. As time passes, it is useful to periodically review limitations for any ongoing loss leaders. There is always the hazard of training your customers to wait for discounts if such messages are provided too frequently.

Imaging

Think long term – does this tactic support the firm’s overall image? The danger with any loss leader strategy is the risk of creating a “discount” image. Many businesses utilize this approach successfully, just make sure it’s the most appropriate one for the company. Fencing the offers (e.g. limited time only, a subset of individuals only) will help to mitigate the discount appearance and retain value for the firm.

Create an Exit Strategy

As with any new strategic plan, be willing to utilize an exit strategy if the loss leader tactic is not creating the anticipated level of success. Develop guidelines around targets and time frames before implementation and establish metrics to use in evaluating success. You might cross-track elasticities to measure the impact a loss leader has on sales of additional items, as well as establish a process for tracking new customer retention. Discount messaging is an easy way to drive immediate sales, but determining whether it creates long-term profitability requires tracking the results.

Using a loss leader to drive penetration can be powerful, but it’s not the only pricing tactic available. Make sure it truly aligns with the company’s strategy and the customer’s needs before deciding which course to pursue. 

Inspiration in the Office

By Candy Parks - Director, Integrated Insight

There are people much smarter than me that have built a body of research on the psychology of office design and the impact on retention and productivity.  If you doubt me, follow this link:  http://www.facilitiesnet.com/designconstruction/article/Workplace-Design-Can-Help-Attract-Retain-Generation-Y-Employees--13859

All I know is that I like colors, and colors make me happy and boost my energy.  We read about this in medicine all the time – people focus their thoughts and their attitude and those positive thoughts have healing powers.  I believe office supplies have productivity powers!

Most women love to spend hours shopping for shoes at Nordstrom.  I, on the other hand, get my retail therapy in Office Depot.  Maybe because in one of my first jobs, I had to get office supplies from someone we’ll call Helga.  If I checked her resume, I think I’d find that Helga managed inventory for the Nazi forces.

If you needed pens, she informed you that black ball points were all you needed.  And yellow post-it notes fit the bill – the other colors were simply frivolous.  And according to Helga, the only binders fit for use were 2” and black!  Helga also thought colored file folders were from the devil.

Poor Helga would CROAK if she could see my office today.  Luckily, I now work in an environment where my leaders say, ‘Get what you need to do your job.’  Sooooooo, I have 3 ring binders in polka dots, paisleys, and bright stripes.  I put my most challenging projects in my favorite binders, and psychologically, that perks me up when I have to reach for that binder.  I have post it notes in every size and color and I use them all.  I have flair pens in 12 colors, and I have REAL pencils – not mechanical pencils.  Of course, my pencils are from Vera Bradley and are beautiful, but I use them happily and admire them as I do so.  I have note-taking books in bright yellow, pink, and lime green.  And my bookshelves are lined with colorful cloth baskets to store all my fun supplies.  When a project is done, I transfer it to a boring folder – not manila, but a boring solid color and put it away.  But while something is active, it LOOKS active on my desk or on my shelf.  And I feel active and energized while I work on it. 

Of course, there is a time and a place for everything.  No, I’m not going to take my bright polka dot binder to a corporate meeting – I’ll transfer to basic black – but I WILL take my purple flair pen.  If you’re a leader, please don’t underestimate the simple pleasures of office supplies and their potential impact on employee satisfaction and productivity.  It’s so much cheaper than redesigning your office and buying new furniture!

Pricing 101: Taking a Page from Pawn Stars

By Kirsten Snyder - Director, Integrated Insight

If you haven’t checked out the show Pawn Stars on the History channel, then you are really missing out.  The show follows about 3 or 4 items that people bring into the Gold and Silver Pawn shop in Las Vegas.  The items range from old military weapons to pop culture collectibles.  Think of it as Antique Roadshow, only at a pawn shop.  Besides the history you learn from the experts on the show, it teaches important lessons in pricing and maximizing profit.

Understand the price customers are willing to pay.

The pawn shop understands that they need to buy an item at the right price in order to be able to mark it up to make a profit.  In order to buy at the right price, understanding how much an end customer is willing to pay is critical.  Not knowing the price the market will bear runs the risk of overpaying and being forced to sell at a loss.  It can also lead to a slower than expected sales pace.

Understand the size of the market interested in the item.

Another important factor to consider when buying a product is how quickly the item will sell, otherwise known as carrying costs.  The pawn shop can estimate this by understanding how many people are interested in, or able to afford a certain item.  For example, if they buy a first edition Mark Twain Novel worth $10,000, management first has to project how many Mark Twain collectors are in the market and willing to spend $10,000.  Carrying costs are important to consider given money tied up in inventory isn’t available for purchase of new items.

The best channel may not be your own.

The pawn shop may buy an item that’s too good to pass up, but if they need a specific audience to sell to, then the pawn shop may not be the best place for the sale to take place.  Some items may sell quickest and fetch the highest price through a different channel.  For example, the pawn shop purchased a car driven by Steve McQueen in his last movie, The Hunter.  Because this item has a very specific audience, they considered how much profit could be made if they sold it through an auction, in spite of the auction fees.  The pawn shop knew they would have the best audience willing to pay the most money through this channel, as opposed to their own store.

The moral of the story, “Maximize profits by understanding your consumer.  Offer the right product, to the right customer, through the right channel, at the right time and price”.

Black Friday Frenzy or Cyber Monday Mania?

Shoppers are increasingly trading early morning ‘door-busting’ deals for the comfort of online shopping at home

By Sue O’Shea – Director, Integrated Insight

Are you a Black Friday Soldier, a Cyber Monday Surfer, or both?  If all the indicators are accurate, holiday shoppers seem, more and more, to prefer shopping for deals from the comfort of home rather than braving the early hours and frenzy of Black Friday. 

The internet has certainly transformed the shopping experience, and the long held post-Thanksgiving tradition of arriving at 4 a.m. for “door-busting” deals might be its next casualty.  Nielsen recently conducted research that indicated 85 percent of consumers plan on skipping the stores on Black Friday this year. Instead, nearly half of consumers (46%) stated that they will shop online on Cyber Monday, compared with 30 percent in 2012, a significant 16-point increase.  The research also stated that the percent of respondents planning to shop in physical stores this Black Friday is down 4 points from 2012. This is part of a four-year downward trend, where consumers report a declining interest in shopping the Friday after Thanksgiving.

ComScore reported that Americans spent $4.3 billion online from Thanksgiving through Cyber Monday in 2012, with double-digit increases on every day compared with 2011. On Black Friday itself, online sales rose 28% while in-store sales dropped 1.8%. Clearly, consumers increasingly favor online deals over those in stores, especially since they can find the same items online at the same price and with free shipping.  Internet shopping also gives the consumer an easier way to comparison shop without having to drive all over town.

Despite the comfort and ease of internet shopping, there is a certain segment of shopper who thrives on the thrill of the chase and competitive shopping on Black Friday.  I bet some are camping out in front of Best Buy already, so the Black Friday tradition seems safe for now. These intrepid souls may be decreasing in numbers but they do make for a good story on a slow news day.

More power to them, but I will be at home clicking away with a cup of Christmas cheer!