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How To Create A Meaningful Brand Online

Michael Brenner

When a recent global analysis by Meaningful Brands took a look at content marketing efforts around the globe, covering 1,500 brands in 15 different industries, it uncovered a harsh reality for digital marketing – 60% of content being created is underperforming. This failing content is considered by consumers to be irrelevant and serves the sad purpose of adding to all the clutter on the web.

Good content marketing really does work. We’ve all seen the impact of insightful, relevant, optimized content that seems to effortlessly express a brand’s story. When done well, it goes way beyond eye-catching and interesting. It makes consumers feel like they are a part of something bigger.

Poor content, on the other hand, doesn’t work. It simply isn’t capable of building the necessary bridge to consumers, generating leads, and building long-term customer relationships. If you’re not offering something unique through your marketing, something that adds value to people’s lives, then consumers probably don’t care too much about your brand. In fact, if three-quarters of all the brands disappeared, most people wouldn’t care.

Look at companies like Google, Ikea, or Wikipedia. We’d all be upset if they disappeared. They offer too much value, too many benefits for a huge chunk of modern society. They are useful, almost necessary from the high-quality products they offer to the droves of people they employ.

As a marketer, one of the most important questions you should ask is – would people be disappointed if my brand fell off the face of the earth?

Consumers expect more from marketers today

Who knows if the chicken or the egg came first, or if brands became more meaningful in response to consumer expectations or if consumer expectations became more sophisticated because some brands started delivering more in order to compete online.

Either way, today’s consumers expect a lot. 75% of people expect the brands in their life to do something to increase their well-being. Those marketers that have understood this have been able to help bring in incredible revenue growth for their businesses. Those companies that ranked high as Meaningful Brands have outperformed the stock market by 206% over the past decade!

What exactly is it that consumers expect? The 2016 Edelman Brand Relationship Index found that consumers have a pretty demanding list of expectations:

  • Help solve societal issues
  • Share a strong story
  • Listen to them
  • Respond to consumer needs

Richard Edelman, the president and CEO of Edelman, points out that these deeper expectations actually provide a huge opportunity for businesses, and for shaping an evolved consumer-brand relationship in the future. “The study shows when a consumer moves from a relationship rooted in ‘me’ to one powered by ‘we,’ a new world of buying and advocacy potential opens up for a brand.”

How to be meaningful through your online marketing

Look at some of the brilliant examples online to give you an idea of meaningful content marketing done well.

Denny’s quaint, quirky Instagram photos combine enticing visuals with a fun, witty personality, the type of energy that everyone loves being around. This marketing style holds something even greater within its messaging – a down-to-earth, life-is-simple value system that offers a respite from our complicated, high-stress modern lives. Now that’s valuable!

The Living Food Kitchen, a plant-based health food delivery company in the UK, offers customers recipe ideas and information on healthy living.

Need inspiration to get out there and conquer – or maybe put on your Nike’s and go for a run? Nike excels at motivational messaging. The company has been doing this for decades, encouraging millions to stick with their workouts and to empower themselves with Nike activewear.

In order to make your online marketing meaningful, the trick is to ensure that every piece of content you publish has a purpose – for your customers. Also, this meaning has to be consistent through everything that is published. For example, Denny’s would lose its effectiveness if it tried to put out a series of blog posts on heart healthy eating. Even though this would be helpful to consumers, it would serve the purpose of putting people off from their brand. Not that piles of pancakes and bottomless coffee aren’t good for the soul, but the heart…

SEO Consultant Hannah Smith points to three core principles that brands use to be meaningful.

1. Making customers smile

Brands that take the time to interact with customers on social media in an artful way can help to encourage a stronger connection and make all consumers feel like they are “heard” by the brand. You may not be able to communicate with every question or concern. You don’t need to. It’s more about the quality and creativity of your responses.

2. Help customers define themselves

A New York Times study on the Psychology of Sharing, found that people carefully choose what they share in order to define their own personality to friends and followers. The study found that most people tend to fall into the following personas:

  • Altruist – shares helpful, thoughtful advice
  • Careerist – shares intelligent business articles with a focus on LinkedIn
  • Hipster – more concerned about their social identity, will only share what is considered to be hip, innovative, or cutting-edge
  • Boomerangs – share information with the goal of getting a reaction and validation from peers, heavy users of Twitter and Facebook
  • Connectors – focus on thoughtful information, relaxed and creative content that others would appreciate
  • Selectives – share resourceful, informative content

This knowledge can help you create content that your target audience can use to express themselves on their own social networking sites, whether they want to show others how cool they are because you posted edgy visuals they can share, or because they want to demonstrate how thoughtful they are by reposting your healthy recipe article to their personal networks. Understand your buyer personas, and then give them what they want.

3. Stand for something

Give consumers something that they can be a part of. Toms does a great job of this, selling earthy, practical, yet fashionable footwear – that makes a statement of social awareness. They use their online branding efforts to help get people involved, while also offering consumers a product that they can feel good about wearing.

Your brand doesn’t have to be eco-conscious or politically active to stand for something – it can be about standing for a value or life philosophy, just like Nike do for inner strength, Apple for the spirit of innovation, or Rolex for luxury living.

Meaningful brands have figured out the boon of online marketing – that quality, value-driven, meaningful content is a gift that will keep on giving. Not only does it generate leads, but it builds a formidable brand presence – one that the world wouldn’t want to be without.

For more online marketing strategies that get results, see What Are The New Rules For Engaging An Online Community?

Image: pixabay

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About Michael Brenner

Michael Brenner is a globally-recognized keynote speaker, author of  The Content Formula and the CEO of Marketing Insider GroupHe has worked in leadership positions in sales and marketing for global brands like SAP and Nielsen, as well as for thriving startups. Today, Michael shares his passion on leadership and marketing strategies that deliver customer value and business impact. He is recognized by the Huffington Post as a Top Business Keynote Speaker and   a top  CMO influencer by Forbes.

Social Selling: Building A Network And Business Brand

Lorraine Maurice

Today’s buyers want and need a more rewarding experience, especially when seeking technology solutions to meet critical needs. Businesses must adapt to buyers’ changes or face losing a share of their target market to competitors.

For business partners, social selling is becoming a vitally important strategy for reaching prospects early enough in the decision-making process to influence eventual purchases.

What is social selling?

Relationships between the business and the consumer can mean the difference between increasing revenue or losing customers to competitors. Social selling involves using social networks to build relationships with prospects in your target market.

The popularity of Facebook, LinkedIn, Twitter, and other platforms has made social selling a viable marketing tool for large and small businesses. Business partners can also use these platforms to increase brand awareness and drive traffic to their websites and in-person events.

How does social selling improve brand awareness and increase customer loyalty?

Savvy marketers today know that 75% of B2B buyers are going online to be more informed about vendors. Using social selling to build a reputation, share relevant and interesting content and industry information, engage in conversation with consumers and clients, and seek out new prospects are all key to achieving sales success.

Vigilance and consistency are always important with this approach. A business that takes a lackadaisical approach to its marketing efforts will likely lose prospects to a competitor. However, a business that consistently updates and repurposes content, promotes itself as an expert in the industry, and actively engages others is more likely to stay top-of-mind with its target audience.

5 social selling techniques that work

  1. Businesses that are successful at social selling understand that delivering consistent, high-quality content is the key to building relationships with their target markets and current clients. A social network must be nurtured, just as real-world networks were in the past through meetings, business lunches, phone calls, and seminars.
  1. Sharing content related to the industry, informative videos, pictures of a product in use, and general content relevant to the target market is another important aspect of social selling.
  1. Positioning a business as an industry thought leader also serves to showcase products and services in a manner that improves brand recognition and marketplace credibility.
  1. Keeping online profiles up to date and detailed ensures that interested buyers can learn more about your business. A strong LinkedIn profile is especially important for those seeking B2B sales. Taking advantage of the Lead Builder function in the LinkedIn Sales Navigator is a great way for businesses to find and make new connections.
  1. Stepping back from selling and instead listening to buyer concerns can provide a wealth of information about what a buyer is looking for, enable you to provide useful information and solutions, and build trust with important decision makers.

Social selling is quickly becoming the primary method of revenue generation in today’s changing economic landscape.  Want to learn more?  Visit the SAP Marketing Academy, choose “SAP SME Academy Live Series,” and find the “Social Selling” series.

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Lorraine Maurice

About Lorraine Maurice

Lorraine Maurice is the Senior Director of Global Indirect Channel Marketing at SAP. She is responsible for the launch of SAP partner programs, solutions and communications into the Indirect Partner Ecosystem, which includes many partner types such as VARs, Distributors and DRCs.

Social Media Engagement: 2017’s Surprising Best And Worst Performers

Michael Brenner

Spoiler alert: Facebook is not the most engaging social media channel! Despite its sheer numbers of active users and maturity, this social media network may no longer be the top platform to focus on for your social media marketing strategies.

You can probably guess which platform ranks as the most potent channel for engagement. Since its inception as a photo-sharing app in 2010, Instagram has risen to become one of the largest social media networks with well over 500 million active monthly users.

According to a new report, Instagram isn’t just growing. It may be the most powerful social media channel available to businesses on the internet.

There are a few other surprises, such as Twitter’s waning significance and LinkedIn’s strength in certain industries.

Are you focusing your efforts on the right social media channels for your brand? Even more crucial, as we marketers strive to work smarter with the shift towards agile methods, are we wasting our time on others?

How social media sites add up – new digital marketing analysis report

This year’s official analysis of the digital marketing industry by TrackMaven – a comprehensive look at more than 700 leading businesses across 13 industries, found that Instagram isn’t simply the most engaging. This network crushes the other social media platforms when it comes to social media engagement in every industry except real estate.

Image source: trackmaven.com

And the least engaging? Of Facebook, Twitter, Instagram, LinkedIn, and Pinterest, our old friend Twitter inspires the least engagement across the board. As with the Instagram phenomena, where the site was wildly engaging when compared to other networks, the report found that Twitter looks pallid next to all of its brighter, more engaging social network colleagues.

Again, with one exception. Construction equipment – which received, on average, 21.26 interactions per post per 1,000 followers. When it comes to the world of dump trucks, cranes and plow trucks, marketers get about the same amount of engagement across channels.

What’s even more surprising is that Facebook isn’t getting that much engagement, at least not enough to warrant its popularity among marketers. Still, today:

  • 55% of marketers say Facebook is their most important platform for marketing – with the second in line being LinkedIn, favored by 18% of marketers
  • 67% of marketers plan on increasing their activity on Facebook in 2017

Are we way off when it comes to our social media strategies? Should we be working on filling our photography skills gap for our brand’s Instagram account?

Industry does matter

Before you sign up for an evening photography class, what industry you are marketing for does make a difference. For example, in the healthcare industry, as well as in food services and accommodations, Facebook is still incredibly useful for engagement.

This makes sense – Facebook is great for restaurants and hotels who need a channel to regularly post updates, specials, and news about their location that locals would be interested in. Facebook also comes with the ability to let customers check in, often in exchange for deals.

This is like getting people to wear your brand’s t-shirt. They become a walking ad for your business and feel pretty good about it because they get something out of the deal as well.

Appealing to all demographics, including older adults, Facebook is ideal for health awareness campaigns and posting announcements about health classes, services, and general health tips. Also, this is an industry that tends to be very community-driven, just like your local pizzeria and coffee shop, which meshes with Facebook’s local business appeal.

Anne Arundel’s Medical Center has been a fantastic example of an engaging Facebook presence since their Facebook contest to raise awareness for men’s health in 2015, encouraging users to share their best “stachie” (mustache) photos. The company also does a great job tackling local issues that people are interested in, like addiction recovery and infant health. This type of marketing really fits with Facebook and wouldn’t work as well with a platform like Instagram.

Image source: Facebook

Real estate, on the other hand, gets the most engagement with LinkedIn – the network known to appeal the most to professionals. This industry also does well with the visual sites, Pinterest and Instagram, which offer agents the chance to showcase their properties.

For higher education, which is marketing towards a younger audience, Instagram is a powerful engagement channel. Instagram is known to be extremely popular with millennials. In 2016, just under 60% of internet users between the ages of 18 and 29 were on Instagram – only 8% of users aged 65 and over had accounts.

Perhaps this has something to do with the popularity of Instagram with consumer goods companies. The power of Instagram for the finance and insurance industry may be a shock to marketers. This idea may sum up industry sentiment:

“Instagram probably isn’t going to move the needle for the majority of financial institutions. It could be a gigantic waste of time for many banks and credit unions.”

Well, it’s moving the needle. The visual, personal feel of Instagram appears to have an impact on customers. Financial services company, US Bank is a great Instagram example. It uses the platform to tell the story of their brand values, through regular posts about community involvement using #communitypossible.

 

 

Image source: Instagram

Engagement does matter

Social media engagement isn’t everything. You may have great activity on your brand’s social media channels, but this isn’t necessarily going to directly translate into sales. What it will do is bring more attention to your brand and help to build loyalty and trust. 53% of Americans who follow brands are likely to be loyal to them. It also helps to make your brand feel more human, which eases those conversion rates. People are more interested in doing business with other humans.

And it will drive traffic to your website.

Image source: socialbakers.com

Research done by Social Bakers found a direct correlation between activity in response to social media posts and website page views.

Getting the most out of your engagement

There’s a lot more to marketing than social media engagement, but marketers should really take a look at how they are using social media to engage in order to get the most out of their efforts. Is it worth spending as much time and resources on Facebook and Twitter?

Are you measuring how your engagement changes on each site over time? A good question to ask – and to test: Would you be better off automating more of your interactions with the channels that aren’t getting much engagement?

Or have you already put your eggs in the Instagram basket – if so, are you using this site well to tell your brand’s story? Are you getting the intense response from your audience that your competitors are getting?

The most important insight to take from this report is that social media marketing perhaps is changing faster than we assumed. Sure, digital marketing is a rapidly evolving field, but social…this is an arena where there is so much freedom and flexibility.

With so many new entrants changing the game every few months or so, perhaps there will never be hard-and-fast rules. There’s no best single social network, or most popular, or most effective. It’s just what works, for you, right now. Thank goodness for Fridays and agile marketing.

What do you think? Do you agree with the data?

For more social media marketing strategies, see How To Master Social Media Marketing In 2017.

Image Source: Unsplash.com

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About Michael Brenner

Michael Brenner is a globally-recognized keynote speaker, author of  The Content Formula and the CEO of Marketing Insider GroupHe has worked in leadership positions in sales and marketing for global brands like SAP and Nielsen, as well as for thriving startups. Today, Michael shares his passion on leadership and marketing strategies that deliver customer value and business impact. He is recognized by the Huffington Post as a Top Business Keynote Speaker and   a top  CMO influencer by Forbes.

Primed: Prompting Customers to Buy

Volker Hildebrand, Sam Yen, and Fawn Fitter

When it comes to buying things—even big-ticket items—the way we make decisions makes no sense. One person makes an impulsive offer on a house because of the way the light comes in through the kitchen windows. Another gleefully drives a high-end sports car off the lot even though it will probably never approach the limits it was designed to push.

We can (and usually do) rationalize these decisions after the fact by talking about needing more closet space or wanting to out-accelerate an 18-wheeler as we merge onto the highway, but years of study have arrived at a clear conclusion:

When it comes to the customer experience, human beings are fundamentally irrational.

In the brick-and-mortar past, companies could leverage that irrationality in time-tested ways. They relied heavily on physical context, such as an inviting retail space, to make products and services as psychologically appealing as possible. They used well-trained salespeople and employees to maximize positive interactions and rescue negative ones. They carefully sequenced customer experiences, such as having a captain’s dinner on the final night of a cruise, to play on our hard-wired craving to end experiences on a high note.

Today, though, customer interactions are increasingly moving online. Fortune reports that on 2016’s Black Friday, the day after Thanksgiving that is so crucial to holiday retail results, 108.5 million Americans shopped online, while only 99.1 million visited brick-and-mortar stores. The 9.4% gap between the two was a dramatic change from just one year prior, when on- and offline Black Friday shopping were more or less equal.

When people browse in a store for a few minutes, an astute salesperson can read the telltale signs that they’re losing interest and heading for the exit. The salesperson can then intervene, answering questions and closing the sale.

Replicating that in a digital environment isn’t as easy, however. Despite all the investments companies have made to counteract e-shopping cart abandonment, they lack the data that would let them anticipate when a shopper is on the verge of opting out of a transaction, and the actions they take to lure someone back afterwards can easily come across as less helpful than intrusive.

In a digital environment, companies need to figure out how to use Big Data analysis and digital design to compensate for the absence of persuasive human communication and physical sights, sounds, and sensations. What’s more, a 2014 Gartner survey found that 89% of marketers expected customer experience to be their primary differentiator by 2016, and we’re already well into 2017.

As transactions continue to shift toward the digital and omnichannel, companies need to figure out new ways to gently push customers along the customer journey—and to do so without frustrating, offending, or otherwise alienating them.

The quest to understand online customers better in order to influence them more effectively is built on a decades-old foundation: behavioral psychology, the study of the connections between what people believe and what they actually do. All of marketing and advertising is based on changing people’s thoughts in order to influence their actions. However, it wasn’t until 2001 that a now-famous article in the Harvard Business Review formally introduced the idea of applying behavioral psychology to customer service in particular.

The article’s authors, Richard B. Chase and Sriram Dasu, respectively a professor and assistant professor at the University of Southern California’s Marshall School of Business, describe how companies could apply fundamental tenets of behavioral psychology research to “optimize those extraordinarily important moments when the company touches its customers—for better and for worse.” Their five main points were simple but have proven effective across multiple industries:

  1. Finish strong. People evaluate experiences after the fact based on their high points and their endings, so the way a transaction ends is more important than how it begins.
  2. Front-load the negatives. To ensure a strong positive finish, get bad experiences out of the way early.
  3. Spread out the positives. Break up the pleasurable experiences into segments so they seem to last longer.
  4. Provide choices. People don’t like to be shoved toward an outcome; they prefer to feel in control. Giving them options within the boundaries of your ability to deliver builds their commitment.
  5. Be consistent. People like routine and predictability.

For example, McKinsey cites a major health insurance company that experimented with this framework in 2009 as part of its health management program. A test group of patients received regular coaching phone calls from nurses to help them meet health goals.

The front-loaded negative was inherent: the patients knew they had health problems that needed ongoing intervention, such as weight control or consistent use of medication. Nurses called each patient on a frequent, regular schedule to check their progress (consistency and spread-out positives), suggested next steps to keep them on track (choices), and cheered on their improvements (a strong finish).

McKinsey reports the patients in the test group were more satisfied with the health management program by seven percentage points, more satisfied with the insurance company by eight percentage points, and more likely to say the program motivated them to change their behavior by five percentage points.

The nurses who worked with the test group also reported increased job satisfaction. And these improvements all appeared in the first two weeks of the pilot program, without significantly affecting the company’s costs or tweaking key metrics, like the number and length of the calls.

Indeed, an ongoing body of research shows that positive reinforcements and indirect suggestions influence our decisions better and more subtly than blatant demands. This concept hit popular culture in 2008 with the bestselling book Nudge.

Written by University of Chicago economics professor Richard H. Thaler and Harvard Law School professor Cass R. Sunstein, Nudge first explains this principle, then explores it as a way to help people make decisions in their best interests, such as encouraging people to eat healthier by displaying fruits and vegetables at eye level or combatting credit card debt by placing a prominent notice on every credit card statement informing cardholders how much more they’ll spend over a year if they make only the minimum payment.

Whether they’re altruistic or commercial, nudges work because our decision-making is irrational in a predictable way. The question is how to apply that awareness to the digital economy.

In its early days, digital marketing assumed that online shopping would be purely rational, a tool that customers would use to help them zero in on the best product at the best price. The assumption was logical, but customer behavior remained irrational.

Our society is overloaded with information and short on time, says Brad Berens, Senior Fellow at the Center for the Digital Future at the University of Southern California, Annenberg, so it’s no surprise that the speed of the digital economy exacerbates our desire to make a fast decision rather than a perfect one, as well as increasing our tendency to make choices based on impulse rather than logic.

Buyers want what they want, but they don’t necessarily understand or care why they want it. They just want to get it and move on, with minimal friction, to the next thing. “Most of our decisions aren’t very important, and we only have so much time to interrogate and analyze them,” Berens points out.

But limited time and mental capacity for decision-making is only half the issue. The other half is that while our brains are both logical and emotional, the emotional side—also known as the limbic system or, more casually, the primitive lizard brain—is far older and more developed. It’s strong enough to override logic and drive our decisions, leaving rational thought to, well, rationalize our choices after the fact.

This is as true in the B2B realm as it is for consumers. The business purchasing process, governed as it is by requests for proposals, structured procurement processes, and permission gating, is designed to ensure that the people with spending authority make the most sensible deals possible. However, research shows that even in this supposedly rational process, the relationship with the seller is still more influential than product quality in driving customer commitment and loyalty.

Baba Shiv, a professor of marketing at Stanford University’s Graduate School of Business, studies how the emotional brain shapes decisions and experiences. In a popular TED Talk, he says that people in the process of making decisions fall into one of two mindsets: Type 1, which is stressed and wants to feel comforted and safe, and Type 2, which is bored or eager and wants to explore and take action.

People can move between these two mindsets, he says, but in both cases, the emotional brain is in control. Influencing it means first delivering a message that soothes or motivates, depending on the mindset the person happens to be in at the moment and only then presenting the logical argument to help rationalize the action.

In the digital economy, working with those tendencies means designing digital experiences with the full awareness that people will not evaluate them objectively, says Ravi Dhar, director of the Center for Customer Insights at the Yale School of Management. Since any experience’s greatest subjective impact in retrospect depends on what happens at the beginning, the end, and the peaks in between, companies need to design digital experiences to optimize those moments—to rationally design experiences for limited rationality.

This often involves making multiple small changes in the way options are presented well before the final nudge into making a purchase. A paper that Dhar co-authored for McKinsey offers the example of a media company that puts most of its content behind a paywall but offers free access to a limited number of articles a month as an incentive to drive subscriptions.

Many nonsubscribers reached their limit of free articles in the morning, but they were least likely to respond to a subscription offer generated by the paywall at that hour, because they were reading just before rushing out the door for the day. When the company delayed offers until later in the day, when readers were less distracted, successful subscription conversions increased.

Pre-selecting default options for necessary choices is another way companies can design digital experiences to follow customers’ preference for the path of least resistance. “We know from a decade of research that…defaults are a de facto nudge,” Dhar says.

For example, many online retailers set a default shipping option because customers have to choose a way to receive their packages and are more likely to passively allow the default option than actively choose another one. Similarly, he says, customers are more likely to enroll in a program when the default choice is set to accept it rather than to opt out.

Another intriguing possibility lies in the way customers react differently to on-screen information based on how that information is presented. Even minor tweaks can have a disproportionate impact on the choices people make, as explained in depth by University of California, Los Angeles, behavioral economist Shlomo Benartzi in his 2015 book, The Smarter Screen.

A few of the conclusions Benartzi reached: items at the center of a laptop screen draw more attention than those at the edges. Those on the upper left of a screen split into quadrants attract more attention than those on the lower left. And intriguingly, demographics are important variables.

Benartzi cites research showing that people over 40 prefer more visually complicated, text-heavy screens than younger people, who are drawn to saturated colors and large images. Women like screens that use a lot of different colors, including pastels, while men prefer primary colors on a grey or white background. People in Malaysia like lots of color; people in Germany don’t.

This suggests companies need to design their online experiences very differently for middle-aged women than they do for teenage boys. And, as Benartzi writes, “it’s easy to imagine a future in which each Internet user has his or her own ‘aesthetic algorithm,’ customizing the appearance of every site they see.”

Applying behavioral psychology to the digital experience in more sophisticated ways will require additional formal research into recommendation algorithms, predictions, and other applications of customer data science, says Jim Guszcza, PhD, chief U.S. data scientist for Deloitte Consulting.

In fact, given customers’ tendency to make the fastest decisions, Guszcza believes that in some cases, companies may want to consider making choice environments more difficult to navigate— a process he calls “disfluencing”—in high-stakes situations, like making an important medical decision or an irreversible big-ticket purchase. Choosing a harder-to-read font and a layout that requires more time to navigate forces customers to work harder to process the information, sending a subtle signal that it deserves their close attention.

That said, a company can’t apply behavioral psychology to deliver a digital experience if customers don’t engage with its site or mobile app in the first place. Addressing this often means making the process as convenient as possible, itself a behavioral nudge.

A digital solution that’s easy to use and search, offers a variety of choices pre-screened for relevance, and provides a friction-free transaction process is the equivalent of putting a product at eye level—and that applies far beyond retail. Consider the Global Entry program, which streamlines border crossings into the U.S. for pre-approved international travelers. Members can skip long passport control lines in favor of scanning their passports and answering a few questions at a touchscreen kiosk. To date, 1.8 million people have decided this convenience far outweighs the slow pace of approvals.

The basics of influencing irrational customers are essentially the same whether they’re taking place in a store or on a screen. A business still needs to know who its customers are, understand their needs and motivations, and give them a reason to buy.

And despite the accelerating shift to digital commerce, we still live in a physical world. “There’s no divide between old-style analog retail and new-style digital retail,” Berens says. “Increasingly, the two are overlapping. One of the things we’ve seen for years is that people go into a store with their phones, shop for a better price, and buy online. Or vice versa: they shop online and then go to a store to negotiate for a better deal.”

Still, digital increases the number of touchpoints from which the business can gather, cluster, and filter more types of data to make great suggestions that delight and surprise customers. That’s why the hottest word in marketing today is omnichannel. Bringing behavioral psychology to bear on the right person in the right place in the right way at the right time requires companies to design customer experiences that bridge multiple channels, on- and offline.

Amazon, for example, is known for its friction-free online purchasing. The company’s pilot store in Seattle has no lines or checkout counters, extending the brand experience into the physical world in a way that aligns with what customers already expect of it, Dhar says.

Omnichannel helps counter some people’s tendency to believe their purchasing decision isn’t truly well informed unless they can see, touch, hear, and in some cases taste and smell a product. Until we have ubiquitous access to virtual reality systems with full haptic feedback, the best way to address these concerns is by providing personalized, timely, relevant information and feedback in the moment through whatever channel is appropriate. That could be an automated call center that answers frequently asked questions, a video that shows a product from every angle, or a demonstration wizard built into the product. Any of these channels could also suggest the customer visit the nearest store to receive help from a human.

The omnichannel approach gives businesses plenty of opportunities to apply subtle nudges across physical and digital channels. For example, a supermarket chain could use store-club card data to push personalized offers to customers’ smartphones while they shop. “If the data tells them that your goal is to feed a family while balancing nutrition and cost, they could send you an e-coupon offering a discount on a brand of breakfast cereal that tastes like what you usually buy but contains half the sugar,” Guszcza says.

Similarly, a car insurance company could provide periodic feedback to policyholders through an app or even the digital screens in their cars, he suggests. “Getting a warning that you’re more aggressive than 90% of comparable drivers and three tips to avoid risk and lower your rates would not only incentivize the driver to be more careful for financial reasons but reduce claims and make the road safer for everyone.”

Digital channels can also show shoppers what similar people or organizations are buying, let them solicit feedback from colleagues or friends, and read reviews from other people who have made the same purchases. This leverages one of the most familiar forms of behavioral psychology—reinforcement from peers—and reassures buyers with Shiv’s Type 1 mindset that they’re making a choice that meets their needs or encourages those with the Type 2 mindset to move forward with the purchase. The rational mind only has to ask at the end of the process “Am I getting the best deal?” And as Guszcza points out, “If you can create solutions that use behavioral design and digital technology to turn my personal data into insight to reach my goals, you’ve increased the value of your engagement with me so much that I might even be willing to pay you more.”

Many transactions take place through corporate procurement systems that allow a company to leverage not just its own purchasing patterns but all the data in a marketplace specifically designed to facilitate enterprise purchasing. Machine learning can leverage this vast database of information to provide the necessary nudge to optimize purchasing patterns, when to buy, how best to negotiate, and more. To some extent, this is an attempt to eliminate psychology and make choices more rational.

B2B spending is tied into financial systems and processes, logistics systems, transportation systems, and other operational requirements in a way no consumer spending can be. A B2B decision is less about making a purchase that satisfies a desire than it is about making a purchase that keeps the company functioning.

That said, the decision still isn’t entirely rational, Berens says. When organizations have to choose among vendors offering relatively similar products and services, they generally opt for the vendor whose salespeople they like the best.

This means B2B companies have to make sure they meet or exceed parity with competitors on product quality, pricing, and time to delivery to satisfy all the rational requirements of the decision process. Only then can they bring behavioral psychology to bear by delivering consistently superior customer service, starting as soon as the customer hits their app or website and spreading out positive interactions all the way through post-purchase support. Finishing strong with a satisfied customer reinforces the relationship with a business customer just as much as it does with a consumer.

The best nudges make the customer relationship easy and enjoyable by providing experiences that are effortless and fun to choose, on- or offline, Dhar says. What sets the digital nudge apart in accommodating irrational customers is its ability to turn data about them and their journey into more effective, personalized persuasion even in the absence of the human touch.

Yet the subtle art of influencing customers isn’t just about making a sale, and it certainly shouldn’t be about persuading people to act against their own best interests, as Nudge co-author Thaler reminds audiences by exhorting them to “nudge for good.”

Guszcza, who talks about influencing people to make the choices they would make if only they had unlimited rationality, says companies that leverage behavioral psychology in their digital experiences should do so with an eye to creating positive impact for the customer, the company, and, where appropriate, the society.

In keeping with that ethos, any customer experience designed along behavioral lines has to include the option of letting the customer make a different choice, such as presenting a confirmation screen at the end of the purchase process with the cold, hard numbers and letting them opt out of the transaction altogether.

“A nudge is directing people in a certain direction,” Dhar says. “But for an ethical vendor, the only right direction to nudge is the right direction as judged by the customers themselves.” D!

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.


About the Authors:

Volker Hildebrand is Global Vice President for SAP Hybris solutions.

Sam Yen is Chief Design Officer and Managing Director at SAP.

Fawn Fitter is a freelance writer specializing in business and technology.

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Small And Midsize Businesses Have The Capacity To Drive Europe’s Future As A Digital Superpower

Katja Mehl

Part 10 of the “Road to Digital Transformation” series

Representing 99.8% of all companies throughout Europe, small and midsize businesses have tremendous power when it comes to impacting the region’s economy. One innovation at a time, they’re transforming entire industries, propelling emerging industries forward with adjacent offerings, and even supersizing a favorite childhood toy to make living conditions better for the poor and homeless. But perhaps the greatest evolution is found in the growing adoption of technology among firms.

According to the IDC InfoBrief “The Next Steps in Digital Transformation: How Small and Midsize Companies Are Applying Technology to Meet Key Business Goals with Insights for Europe,” sponsored by SAP, 35.4% of all European firms feel that their adoption of digital technology is either advanced or well underway. Germany and France are great examples of countries that are embracing advanced business networks and automation technology – such as the Internet of Things – to boost productivity and computerize or consolidate roles left empty due to long-term labor shortages.

Despite the progress made in some countries, I am also aware of others that are still resistant to digitizing their economy and automating operations. What’s the difference between firms that are digital leaders and those that are slow to mature? From my perspective in working with a variety of businesses throughout Europe, it’s a combination of diversity and technology availability.

digital transformation self-assessment

Source: “The Next Steps in Digital Transformation: How Small and Midsize Companies Are Applying Technology to Meet Key Business Goals with Insights for Europe,” IDC InfoBrief, sponsored by SAP, 2017. 

Opportunities abound with digital transformation

European companies are hardly homogenous. Comprising 47 countries across the continent, they serve communities that speak any of 225 spoken languages. Each one is experiencing various stages of digital development, economic stability, and workforce needs.

Nevertheless, as a whole, European firms do prioritize customer acquisition as well as improving efficiency and reducing costs. Over one-third of small and midsize companies are investing in collaboration software, customer relationship management solutions, e-commerce platforms, analytics, and talent management applications. Steadily, business leaders are finding better ways to go beyond data collection by applying predictive analytics to gain real-time insight from predictive analytics and machine learning to automate processes where possible.

Small and midsize businesses have a distinct advantage in this area over their larger rivals because they can, by nature, adopt new technology and practices quickly and act on decisions with greater agility. Nearly two-thirds (64%) of European firms are embracing the early stages of digitalization and planning to mature over time. Yet, the level of adoption depends solely on the leadership team’s commitment.

For many small and midsize companies across this region, the path to digital maturity resides in the cloud, more so than on-premise software deployment. For example, the flexibility associated with cloud deployment is viewed as a top attribute, especially among U.K. firms. This brings us back to the diversity of our region. Some countries prioritize personal data security while others may be more concerned with the ability to access the information they need in even the most remote of areas.

Technology alone does not deliver digital transformation

Digital transformation is certainly worth the effort for European firms. Between 60%–90% of small and midsize European businesses say their technology investments have met or exceeded their expectations – indicative of the steady, powerhouse transitions enabled by cloud computing. Companies are now getting the same access to the latest technology, data storage, and IT resources.

However, it is also important to note that a cloud platform is only as effective as the long-term digital strategy that it enables. To invigorate transformative changes, leadership needs to go beyond technology and adopt a mindset that embraces new ideas, tests the fitness of business models and processes continuously, and allows the flexibility to evolve the company as quickly as market dynamics change. By taking a step back and integrating digital objectives throughout the business strategy, leadership can pull together the elements needed to turn technology investments into differentiating, sustainable change. For example, the best talent with the right skills is hired. Plus, partners and suppliers with a complementary or shared digital vision and capability are onboarded.

The IDC Infobrief confirms what I have known all along: Small and midsize businesses are beginning to digitally mature and maintain a strategy that is relevant to their end-to-end processes. And furthering their digital transformation go hand in hand with the firms’ ability to ignite a transformational force that will likely progress Europe’s culture, social structure, and economy. 

To learn how small and midsize businesses across Europe are digitally transforming themselves to advance their future success, check out the IDC InfoBrief “The Next Steps in Digital Transformation: How Small and Midsize Companies Are Applying Technology to Meet Key Business Goals with Insights for Europe,” sponsored by SAP. For more region-specific perspectives on digital transformation, be sure to check every Tuesday for new installments to our blog series “The Road to Digital Transformation.”

 

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Katja Mehl

About Katja Mehl

Katja Mehl is Head of Marketing for Europe, Middle East, and Africa at SAP.