When recommendation engines go terribly wrong

When recommendation engines go terribly wrong

One of the most popular forms of personalization used on eCommerce sites is the “people who bought this, also bought that” recommendation. The assumption is that people have similar tastes and so if other people are buying the same things, so should you. Sometimes, the intention is to ensure that someone who buys an item requiring additional accessories be reminded of all that is needed before checking out their shopping cart.

Some sites use an algorithm to predict which products should be paired with each other. Others simply tag products and bucket them into groups. Now the latter can same time and money, but sometimes leads to some strange recommendations as seen below on the Tiger Direct website.

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Do you and your customers speak the same language?

One of the guiding principles of B2Me is to use simple language and familiar terms in order to clearly communicate what you need to say to your customers. Get rid of jargon and marketing speak — Make it a priority!

American insurer Cygna clearly understands the importance of simple and effective communication. The company prides itself on systematically simplifying the language it uses in its marketing communication and more important, in its contact between their employees and customers.

If you’re trying to persuade people to do or buy something, it seems to me you should use the language they use every day. -David Ogilvy

To help achieve this goal, they created a program for first-line staff that dictates what words should be used to describe insurance concepts, products, terms and conditions. The program is called “Let’s be clear”, and is designed to help employees “translate” the obscure language of the insurance industry into plain English.

Here are a few examples: “you” instead of “claimant”, “process your claim for payment” instead of “adjudication” and “start date” instead of “activation”.

The goal is to make customers feel comfortable, to create a climate of trust and allow the customer to feel valued – not diminished by the use of language they don’t understand.

Cigna even created a website that provides a dictionary of common insurance terms and their translation into plain English in order to be clearly understood by a customer.

At the end of the day, it simply a question of respect for “me”, the customer. Do you speak the same language as your customer? Or are you forcing your customers to speak yours?

Five benefits of B2Me™ on

There’s an interesting article on B2Me™ on the Retail Experience Blog, by Paul Flanigan, former director of brand communications for Best Buy.
Here are a few lines from his post:

We have all heard B2B (business to business) and B2C (business to consumer). But this has now evolved into B2ME. The simple definition is the practice of marketing to the individual based on the desires of that individual. It’s not about closing a sale, it’s about developing a relationship with every single unique individual.

This doesn’t (or shouldn’t) seem like a new way to market. We have been doing this all along, right? Well, the advent of personal technology has quite a bit to do with it. Marketing has had to catch up with individuals who are mobile, savvy, and in control of the sales cycle in pretty much every type of buyer/seller relationship.


How much is a customer worth? Probably more than you think!

How much is a customer worth? Probably more than you think!

When you look at marketing from a purely transactional perspective, you often lose sight of an important dimension: the long-term value of a customer. Or more precisely, the cumulative net revenue that a customer provides during the “lifetime” of the relationship between the customer and a business, or a brand.

This transaction perspective focuses on the immediate sale of good and services through marketing campaigns of all nature. From that point of view, the customer value is equal to the amount of the sale produced as a result of that campaign. Transactional marketers will work to reduce the cost per transaction in order to maximize short term revenue. Nothing wrong with increasing revenue… far from it. But this narrow vision often forces us to make choices that as purely short-term.

More often than not, when the focus is purely on short-term revenue, marketers will discard any initiative that produces a customer acquisition cost that is deemed to high when compared to the value of the transaction, without taking into account the future value of a customer. Such decisions do not take into account differences in customer quality, potential loyalty and future purchase value. Why pay ten dollars to sell a five dollar item? And yet…

Customer lifetime value

From a relationship marketing perspective however, we will take into account the actual value of a customer — what is known as Customer Lifetime Value (CLV) – in order to better understand how much we can afford to invest to acquire a new customer with whom we can engage and maintain a long-term relationship over the course of several years.

In fact, when you think about it, this value is often much greater than we suspect. Calculating CLV is based on three variables: gross revenue per average transaction, average frequency of purchase and the average lifetime of a customer relationship. Regardless of your industry, when you start to look at what a customer is worth, you quickly understand why it is so critical to retain customers and increase loyalty.

In the infographic show below, KissMetrics looks at the lifetime value of a Starbucks customer. That Grande Latte you buy from the little mermaid from Seattle starts to look even more expensive than you ever imagined. According to KissMetrics, the average lifetime value of a Starbucks customer is $14,099 over a 20 year period. This value is based on an average purchase value of $5,90 and a purchase frequency of 4,2 purchases per week. Now imagine the coffeeholic who shows up twice or three times a day, at break time, for lunch or an afterwork snack. The value goes through the roof!

Acceptable acquisition cost

Rather surprizing isn’t it? So now, if I ask you how much Starbucks could afford to spend in order to acquire and retain a new customer, you would start to see that it is much more than the cost of a single Latte. Instead, you would use the CLV as a basis to set this amount. All of a sudden, you would probably be tempted to invest a little more. Now imagine you’re Second Cup — how much would you spend to win over a Starbucks customer?

Now think about your own customers. What is the CLV of your average customer? Better yet, forget the Average Joe. Think about your best customers—the top 15% to 20%. Your most active, loyal and profitable customers. Now thank about what you are doing to keep them loyal… If your answer is nothing, what are you waiting for? It’s a matter of survival!

This infographic was created by KissMetrics

How To Calculate Customer Lifetime Value
Source: How To Calculate Lifetime Value

How good is your elevator pitch? Are you making these 7 mistakes?

How good is your elevator pitch? Are you making these 7 mistakes?

Do you know your real value? Can you explain it clearly to a total stranger? To a prospective customer? To a member of your family?

A lot of what is said and written about branding relates to brand personality. How a business or a brand is expressed visually, the tone and manner and nature of the message. But the essence of branding is simply a question of clearly expressing how you, your product or your business are unique. In B2B (business-to-business) marketing, this differentiation is expressed through the value statement. A few short sentences that succinctly express the value that you bring to your customers.

You’ve probably heard the expression “elevator pitch” or “elevator speech”: a short statement that would allow you to explain to a total stranger who you are and what you do best in the time it takes to travel from the lobby to the top floor of an office building by elevator. Your value proposition is in essence your elevator pitch and it focuses on the value that you could provide to a prospective customer.

Everyone believes — often wrongly so — that they truly know what value they provide. But expressing it clearly and succinctly is a lot harder than it looks.

Here are seven common mistakes to avoid in your elevator pitch:

1 – Talk about yourself and your accomplishments: Your success and professional achievements are no doubt a source of pride. That you are a leader in the industry is certainly something to be proud of. But claiming this in an elevator pitch actually creates a distance between you and your customers. It can make you sound like you think you’re somehow better than them.

The objective of the value statement is quite the opposite. It is to build proximity by linking what you do with a need or pressing challenge that your client is facing and to express this in the form of a benefit. For example: the loyalty programs that we build for our clients help them keep customers longer, so they can focus their resources and energy on other pressing issues, like new product launches, rather than on customer acquisition.

2 – Talk about the tenure of your business: Nobody cares that you’ve been in business for 22 years! The fact that you have survived all these years is a tribute to your resolve. But it doesn’t demonstrate that the experience you’ve acquired over the years brings value to your clients. So drop any reference to years in business from your elevator pitch.

3 – Use technical buzzwords: the purpose of the elevator pitch is not to demonstrate your extensive vocabulary. If you use technical jargon and buzzwords, you create a communication barrier between you and your customers and will quickly loose their attention. Nobody likes to feel dumb, so using words people don’t understand actually works against you.

4 – Talk about your equipment, your technology and capabilities: your customer doesn’t really care what platform or process you use to achieve your results. At the end of the day, what’s in it for me is all that counts

5 – Use “marketing speak”: Don’t say that you “optimize the customer relationship”. That doesn’t really mean anything, or can have so many meanings as to be confusing. Simply say that you get customers to buy more.

6 – Talk generically about what you do: Be specific! Whenever possible, tie what value you provide to the customer’s industry or job function. You’re talking to a CA, a lawyer, an architect? Tell them how you help professionals service firms find new customers. You’re talking to a sales manager? Tell her how you help sales people make better use of their time in order to close more sales. An elevator pitch should be as relevant as possible.

7 – Fail to make your value tangible : Numbers often speak louder than words! So your elevator pitch should make good use of them. Use a concrete example and interesting facts and figures to prove your value and create interest. For example, you could say: For one of our clients in the cosmetics industry, we multiplied campaign results by ten through the use of personalization.

Always remember… you only have a few brief seconds to grab attention. You should be compelling, impactful and to the point. But more important: everything you say in your elevator pitch must be memorable.

Where all those choices got started… according to Malcolm Gladwell

Where all those choices got started… according to Malcolm Gladwell

As a fan of all things Gladwell, I would like to share with you this excellent video produced by TED TV that chronicles the history of how Howard Moskowitz changed the way we shop for groceries — a change that led to the avalanche of choices that we face in our lives, day-to-day. Presented in typical Gladwellian style, this is a fascinating tale of innovation that began in the ’80s.

The unexpected impact of choice on customer satisfaction

The unexpected impact of choice on customer satisfaction

In this video from TED TV, american social psychologist Barry Schwartz, author of The Paradox of Choice explains how too much choice has a negative impact on our level of satisfaction with the things we buy in our day-to-day lives.

Unrealistic expectations, or persisting doubt over the choices we make: these are the reasons why we must limit the number of products and services we offer our customers. By personalizing content and product recommendations, B2Me allows us to reduce the number of products suggested to a limited set or a single item that best suit the customer’s needs… One customer at a time!