Daniel Burstein

The Radical Idea: Customer-first marketing prioritizes customer experience over upsells

June 2nd, 2017
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I stopped by Barnes & Noble on Sunday, early enough that our open-air mall — St. Johns Town Center — was nice and quiet.

It was a more pleasant experience than simply buying on Amazon.com. Got Starbucks for my daughter and hung out with her in the café. Purchased a Harry Potter book for her. Bought myself those chunky Sunday editions of The Florida Times-Union and The New York Times.

It was a more pleasant experience than Amazon.com…until I got to the cashier. Because that’s when I got hit by the dreaded upsell.

In this latest edition of The Radical Idea on the MarketingSherpa Blog, here’s my op-ed about ideas for revisiting your checkout process as well as adding humanity to customer touchpoints, using my recent experience at Barnes & Noble as an example.

First: The argument for the verbal upsell

Anytime I see something in the world that I think needs a radical change, I always try to put myself in the shoes of the other party involved. It’s all too easy for an outsider to look at something and point out faults, falsely assuming the other party is simply being foolish.

However, people and corporations tend to be rational actors, doing what they perceive to be in their best interests based on the incentives placed before them. Even the people behind Nigerian email scams are rational actors. I’m not defending the practice at all. I’m just saying, the best way to institute change is to understand where the other party is coming from — not merely assume they are foolish and wrong. And then identify a possible knowledge gap they may not realize.

So, before I disagree with the way Barnes & Noble handles upsells in store, let me acknowledge why they might have instituted this practice. When I tweeted to the brand that this wasn’t the best customer experience, the response they tweeted back stated, “We ask booksellers to mention the benefits of Membership, in a professional manner. We appreciate your feedback.”

The upsell Barnes & Noble cashiers offer is a membership that costs $25 and offers 10% off purchases for one year. And, they likely have a good reason for doing this. The retail bookseller might have discovered that members spend more than other customers or shop more frequently. There also might be a healthy margin on the memberships themselves. After all, they are essentially selling a coupon to their store.

The cashiers likely receive incentives for each membership signup, so it’s understandable why they would want to push membership at checkout. Or, it may simply be a requirement of the job.

These are all rational reasons for behavior. So, the only reason I would suggest the business practice could hurt Barnes & Noble is if I believe there is a knowledge gap in their decision making.

The tyranny of the urgent wages a daily battle with the existential importance of the strategic

Here’s the challenge with the long term. It’s fuzzy. Even with my contact lenses on, I can’t make it out well. If a few years ago I told you about the political events of today, I doubt you would have believed me. Heck, I wouldn’t have believed me.

In stark contrast, the short term is bright. And clear. And screaming. And smacking you in the face.

And that’s why companies make decisions like hitting customers with an upsell every single time they check out instead of adding value to the customer’s life.

However, if your brand overlooks the long term, it creates an existential threat. I read a great example in a recent issue of Bloomberg Businessweek. In the short term, it appears that natural gas will benefit under the new presidential administration here in the U.S.

But according to the article by Jennifer A Dlouhy and Mark Chediak, natural gas companies aren’t resting on their laurels — “To keep its product from falling out of favor, the gas industry has spent at least $10 billion developing technologies to capture carbon emissions.”

What does that long-term view look like in a marketing context? Investing in customer-first marketing. According to our research, customer-first marketing is a key differentiator between satisfied and unsatisfied customers. And, if you have satisfied customers, you are more likely to be able to meet a whole slew of your short-term marketing goals. For example, a satisfied customer is 154% more likely to stay on your email list than an unsatisfied customer.

And this is where I believe the knowledge gap is for Barnes & Noble. And many other brands. Because the full, long-term impact of customer-first marketing is so hard to measure. But, that doesn’t make it any less real.

Taking a customer-first marketing approach like adding humanity to the sales process is likely to increase satisfied customers. And as we discovered in our survey of 2,400 consumers, satisfied customers are 713% more likely to continue purchasing products and services from your company.

A customer-first approach to the Barnes & Noble bricks-and-mortar checkout process

So, what could a customer-first approach to this checkout process look like?

Well, there could still be an upsell. Barnes & Noble could simply switch to a soft (passive) upsell to membership instead of using a hard (active) upsell. A few elements this could (and already does) include:

  • Point-of-sale signage and table tents
  • Other in-store signage
  • Prominent display of physical, in-store sign-up forms
  • Advertising (print, TV, digital, etc)
  • T-shirts or buttons for the cashiers, “Ask me how to save 10% with a membership”
  • Pricing (on products, shelves, etc) that shows the membership discount
  • Special members-only events that are visible to non-members

I’m sure the list could go on and on. My point is, Barnes & Noble has a viable business reason to want to sell a membership, and there are other ways to do it. Might they have an overall lower conversion rate than a hard sell? Perhaps. However, what is in the best long-term interests of the customer and, therefore, the brand? What is the opportunity cost of the cashier hard sell and how could it be repurposed?

As I mentioned in the beginning of the article, shopping in a Barnes & Noble physical store is not just about product acquisition just like buying a Starbucks coffee isn’t about caffeine acquisition. It is a positive, enjoyable customer experience.

Of course, I’m not making a new or breakthrough observation by writing this. In 1998, Joseph Pine II and James H. Gilmore introduced for the first time the term “The Experience Economy” and a view of “The Progression of Economic Value.”

“Commodities are fungible, goods tangible, services intangible, and experiences memorable…An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event,” Pine and Gilmore said in the Harvard Business Review Article “Welcome to the Experience Economy.”

What defines an experiences-based brand? Authenticity. “Authenticity is becoming the new consumer sensibility, the buying criteria by which consumers are choosing who they are going to buy from, and what they are going to buy,” Pine said.

Now, let me ask, have you ever had an authentic conversation where you asked, “Did you know you could save 10% with a membership?”

However, if you were a passionate reader, perhaps you would like suggestions from an informed source. From a real, human bookseller. Having an authentic conversation about the topics that interested you most.

For example, I love to peruse the newsstands at Barnes & Noble on a Sunday morning. Much more pleasant, but far less efficient than an Amazon search. So, perhaps I’m overlooking a publication I might like. A cashier could say to me, “Ah, Jacksonville Magazine. I love to be in the know about what’s going on locally as well. Have you read First Coast Magazine? Didn’t know we had it? Oh yeah, let me show you where it is.”

That would be an actual human conversation — even though it technically includes an upsell. Or it could just be a conversation not related to any upsell at all. But, it would change the tone and posture of the conversation — from one that puts the customers on the defensive, forcing them to swat down a direct ask to one that engages customers on friendly terms about a topic they are most passionate about.

I used this example from Barnes & Noble to illustrate a point. However, Barnes & Noble is not alone. Endless brands lack humanity. And in the age of increasing capabilities of artificial intelligence, chatbots, marketing automation and ecommerce, brands can harken back to the earliest days of human-to-human commerce to find a competitive advantage.

In the age of Amazon, humanity is a competitive advantage

Every retailer’s biggest competitor is Amazon.

Customers can get 99% of products cheaper and more efficiently through Amazon. Want a book, magazine or newspaper? You don’t have to drive or walk down to the Barnes & Noble. Simply push a button on your bookshelf and Robocop will deliver whatever you want in seven minutes or less on a hoverboard.

So, as Pine and Gilmore prophesized almost 20 years ago, brands must differentiate with experiences. One experience that Amazon has yet to match is humanity.

Not only does approach have significant long-term benefits with your customers, there are benefits to your employees as well. As a former employee wrote on the (likely somewhat skewed) jobs review site Glassdoor, “The biggest problem is the amount of upselling required by management. Expect to ask EVERY customer if they want a membership, tell them two benefits of the membership, ask if they want to buy a giftcard, demand they tell you their email address (actual suggested wording: “Give me your email address”), and if they have a kid, ask if they want to join the Kid’s Club.”

In fairness to Barnes & Noble, it takes a brave executive to overlook the short-term quick buck of an upsell for the squishy, longer-term value of a delighted customer — a customer who feels like the bookstore prioritized his needs over the company’s short-term business goals.

And besides, I could be wrong. What do you think of my radical idea? What radical ideas do you have? Tell me on Twitter using my handle mentioned below.

You can follow Daniel Burstein, Senior Director of Editorial Content, MarketingSherpa, on Twitter @DanielBurstein.

Related Resources

Humanizing Your Email Program: How to transcend the digital revolution by using the essential ability to communicate person-to-person

The Radical Idea: Why investing in the physical world should be part of your social media marketing budget

Ecommerce: 6 Takeaways From A 42-Day Analysis Of Major Retailers’ Holiday Marketing

The Radical Idea: Outsourcing that touches the customer is penny wise, but pound foolish

The Marketer’s (Abbreviated) Guide to Love: How to overcome your own self-interest and become a better marketer

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Daniel Burstein

About Daniel Burstein

Daniel Burstein, Senior Director of Editorial Content, MECLABS, Daniel oversees all editorial content coming from the MarketingExperiments and MarketingSherpa brands while helping to shape the editorial direction for MECLABS – working with our team of reporters to dig for actionable information while serving as an advocate for the audience. Daniel is also a frequent speaker and moderator at live events and on webinars. Previously, he was the main writer powering MarketingExperiments publishing engine. Prior to joining the team, Daniel was Vice President of MindPulse Communications, specializing in IT clients such as IBM, VMware and BEA Systems. Daniel has more than 15 years of experience in copywriting, editing, internal communications, sales enablement, and field marketing communications.

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