Emotion Marketing. The Hallmark Way of Winning Customers for Life. By: Scott Robinette, et al. PUBLISHED BY. McGraw-Hill ISBN:

Transcription

1 Emotion Marketing The Hallmark Way of Winning Customers for Life By: Scott Robinette, et al. PUBLISHED BY McGraw-Hill ISBN: Buy the Full Book!

2 Introduction Our intuition tells us there's something powerful about how emotion affects our daily lives. Most of us have experienced how the heart can lead us to make a decision against our better judgment. Human beings are emotional creatures who have a deep-rooted need to connect with each other and the world around them. Our emotions serve a critically important role in our quest to survive, thrive and realize our full potential. If there's something that Hallmark has learned after nearly 90 years of leadership in the relationship business, it's that emotion matters. From brand building and employee satisfaction to product leadership and customer loyalty, nearly every major success at Hallmark can be traced to the effective creation, utilization, delivery or exchange of emotional value. Since 1995, these ideas have been extended to hundreds of other leading companies that have sought the assistance of the Hallmark Loyalty Marketing Group in leveraging the power of emotion marketing. Emotion marketing is the enterprisewide pursuit of a sustainable connection that makes customers feel so valued and cared for that they will go out of their way to be loyal. It elevates emotion to the strategic level, recognizing its importance in creating or strengthening a relevant brand identity and managing the customer's experience. Emotion marketing leads to strategies that are almost impossible to replicate, providing a powerful competitive advantage. Advertising agencies have long known that tapping into an audience's emotions - be it love, fear, pride, jealousy or pleasure - works. Emotion marketing impels people to act on such feelings - and gives them a reason to go beyond a single purchase to long-term loyalty. And that can mean increased profits. In The Loyalty Effect, Frederick Reichheld reports that retaining just 5% more customers can boost profits by as much as 95%. Caring is essential to loyalty. Companies must go beyond seeking customer satisfaction to showing customers they genuinely care. Caring is the bridge between satisfaction and loyalty. And emotion marketing is a proven, practical way to let customers know you genuinely care. The Value Star Method Hallmark's Value Star system is a model for applying emotion marketing to your company. It's based on a five-pointed star, with each of the points representing a vital element in the marketing equation. The first two elements are familiar from traditional marketing: Money: Is the product affordable and offered at a competitive price? Are any promotions or discounts compelling? Product: Is the product or service desirable? Does it have the proper features and does it get the job done? As we now know, if customers are buying a product or a service based on price alone, the brand is at risk - unless it's a low-cost provider and that price advantage can be sustained over the long term. Even competition based on a product is becoming less practical. New features get duplicated very quickly today by "fast-following" competitors. Competitive pricing and quality products are the cost of entry to today's market. Even the considerable power of emotion can't overcome an obviously inferior or unreasonably priced product. But in the end, price and product are too easy to copy. You need other value drivers - the emotional E's in the Value Star model: Equity: This is the combination of the trust a brand earns and an identity that 1

3 allows consumers to feel emotionally connected to it. A company makes a promise, consistently delivers, and over time its customers come to rely on it. Simply seeing the logo or hearing the name tells them the product or service is worth the investment. "Emotionally loyal customers relate to the brand as they might to other human beings - feelings of affection, a common history, possibly a sense of trust and two-way commitment, which goes well beyond the satisfaction of a specific need," note Horacio Rozanski, Allen Baum and Bradley Wolfsen in Strategy & Business. Experience: This deals with customers' interactions with a brand. Customer attitudes are affected by visits to a store or web site, employee contacts, communications, loyalty programs and, of course, use of the product or service itself. In every encounter there's an opportunity to meet a need and make an emotional connection. Energy: This is the investment of time and effort a customer makes in a product or service. Is it easy? Accessible? Worthwhile? These days, with so many people feeling pressed for time, companies must pay attention to whether they are offering convenience and saving time for their customers. Equity, experience and energy are the emotional components of the Value Star. Money and product are the rational elements. Together, they offer a path for appealing to both the emotional and rational impulses that drive consumer buying decisions. Equity Equity is about trust. In fact, the two are so closely related that a company simply won't achieve equity without first earning trust. But once trust is earned, it becomes the foundation on which relationships develop and flourish. Hallmark is an example. When J.C. Hall was building his company, he began to talk to advertising agencies about sponsoring a program that would help to build his company's brand equity. The idea of branding greeting cards was consistently rebuffed. One agency head told him, "You'll never be able to advertise greeting cards if you expect people to turn them over and read the name." Another said bluntly, "Greeting cards can't be sold for a brand name like other products." But he built equity, as have many other companies, such as Harley-Davidson, which has even seen its logo tattooed on the bodies of some of its most enthusiastic users, and Disney, which parents automatically turn to for quality entertainment. The effort it takes to research, experience and evaluate many options for purchases these days is overwhelming compared to relying on a relationship that has passed the test of time. So often the simplest choice is to go with a trusted brand. Brand identity and brand image help to build equity. Although they sound the same, they are more like different sides of a coin. Brand identity is what a company aspires to be. It's the personality the company conveys, the decisions it makes, the messages it sends to consumers. Brand image, on the other hand, is how consumers actually perceive the brand. It's the opinions they form and the ways they interpret what a company does. Equity, therefore, depends on how the company presents itself versus how consumers perceive it. Brand identities that successfully speak to human emotions are rewarded with a sustainable competitive advantage. Once a company has identified its personality and message by leveraging emotion, a competitor will have difficulty doing the same without appearing less genuine. Compare that with the ease of matching another business' low price or copying a 2

4 product feature, and again you will see the value of emotion marketing. After crafting a brand identity, the company must build brand image by consistently communicating it to every customer at every opportunity, from call centre to mass advertising to the retail sales floor. The entire company must fixate on identity if the desired image is to follow. One of the payoffs will be if the company decides to extend into other product lines, expand into new industries or command price premiums. The trust that has been built through emotion can be used to keep the customer loyal. Experience Experience is the collection of points at which companies exchange sensory stimuli, information and emotion. These exchanges may be transactional, when the product or service is delivered and payment is made; informational, when rational information is shared; or emotional, when the company and consumer connect emotionally. The best experiences are holistic, each exchange overlapping with and reflecting the others. The best experiences can often be seemingly minor touches. Somebody who requests a feather pillow while staying at a Ritz-Carlton hotel will find one waiting the next time he or she arrives. One auto repairman checks the favorite stations customers have programmed on their car radios and then adjusts the radios in loaner cars to correspond. That kind of experience elicits an immediate "Wow!" But it lasts longer as well, paying dividends down the road. People remember those kinds of experiences, make repeat visits because of them, and tell their friends. The core of an experience is use of the product itself, whether it's a Macintosh computer or a visit to a Hard Rock Cafe. At the same time, it's important to recognize that the best opportunity for a brand to make an impression on its customer is after the sale, because then it's less expected and more memorable. Some companies administer pointsbased frequency programs to build loyalty. But those frequent buyer programs are purely transactional in nature - one step down from emotional touchstones. They buy customer loyalty rather than earning it (and can subsequently lose it to a higher bidder). Hallmark has found that a company must recognize its customers first before setting up a points-based system. The sequence is critical. Only after a company establishes a connection and demonstrates it truly values its customers will people let the reward program take root at an emotional level. Rewards then become a symbol of how much the company values its customers, not how many points they have accumulated. When Hallmark started its loyalty program, for example, it selected top customers and gave them occasional certificates for free products that were always positioned as a pure, appreciative gesture rather than being conditional on any money spent. That program evolved into a points-based system but even now Hallmark continues to steep it in emotion. It recognizes best customers and thanks them - even sends birthday cards. It demonstrates appreciation and caring by giving away exclusive product samples with no quid pro quo or purchase requirements. Energy At first glance, energy may not seem to have the same strong emotional ties as equity and experience. But companies that demonstrate concern about people's time strengthen the connection that they share. 3

5 These days, after all, time is the new currency. Companies can make their products or services faster. But they can also make things more accessible, by opening new locations. They can make things easier, by saving steps for the customer, as gas stations have done by letting customers pay at the pump. And they can make things personalized, as United Airlines does by notifying customers who sign up about flight delays through and paging. Hertz has built an extraordinary following by creating its Gold program, which allows its best customers to speed through the rental and return processes. Implementation To implement emotion marketing, companies must begin by developing a Caring Index to track the degree of emotional attachment it's developing with customers. Customers need to be asked questions like: Equity: Does the company have your best interests at heart? Does the company share your values? Would you feel comfortable recommending the company to friends? What is your level of trust? Experience: Is the shopping environment engaging? Are the customer-service representatives attentive and helpful? Is it pleasant to interact with the company, regardless of the distribution channel? Energy: Is the process easy? Are the locations convenient? Does the company respect and value your time? The researchers, of course, have to probe beyond those questions to uncover the unconscious motives that drive the relationship and look for opportunities to improve. Once the Caring Index is established, however, the company has a sense of how it's doing on the emotional side and can now measure changes over time, as it boosts its emotion marketing efforts. 4