How much money are you leaving on the table because your ROI plans are not shared?

These articles outline the six steps that are the components pivoting you towards being able to achieve ultimate success for content or commerce driven websites and other channels of engagement:

ü  Executive engagement

ü  Needs Assessment/Analytics and the Science of ROI

ü  IT:  Collaboration and Balance

• Marketing
• Operational Execution/Employee Engagement 
• Customer Care and Centricity 

In the previous articles, Executive Engagement and Needs Assessment/Analytics were focused upon as the first two crucial steps on the path to ultimate success of a value driven and robust customer experience and solution across channels.  In this section, we will be discussing the importance of IT Department collaboration and balance in maintaining focus, prioritization and fixing and enhancing functionality, leading towards successful deployments of YOUR selected roadmap components.

The IT (technology) Team is the support of the business team, and provides the business, as a service, the ability to make enhancements in functionality (existing or new), changes in content that are hard coded and the ability to evolve your channels of sales or content by providing backend technological development.  Very often, the IT department is a shared resource, supporting enterprise or company initiatives as well as cross channel evolution. In rare instances, there are assigned and dedicated resources from IT for your other channels, but this is not common. Consequently, it makes it difficult to ensure alignment and focus on other channels besides the brick and mortar. Non -contingent upon this, however, the driver of the online business as well as other channels needs to be the business, with the IT team supporting the decisions and assisting. This is not usually the case for many reasons. Sometimes, this has to do with the capital expenditures that are required because they are in the IT budget, not the business budget.  Often it is because there is no real governance over the interdepartmental processes and procedures that need to be adhered to in order to embrace a holistic approach which incorporates  IT work efforts as part of the enterprise that has stakeholders involved, particularly at the beginning of the prioritization process for the greater enterprise. IT appears to be driving the business in many companies, writing business cases as well as deciding on components of releases. And even when the business is prioritizing the enhancements of bug fixes or changes, the final say as to what goes into a release is often IT determined, and determined for reasons that were not about the end user, the customer. Time factors, work efforts and feasibility studies can change the business plan to a watered town version of the original, sometimes with major positioning pieces left out or moved to later in the calendar year.  Determining what will be deployed based upon man hours available or complexity of functionality or even difficulty, is a huge mistake. Resource limitations and difficulty of work can result in important customer facing changes being put off for an extended period of time. Basing your business decisions on how many staff or resources you have, is not going to align you properly with your desired end results.  Your business plan comes first and then you figure out how to implement it. Start with the customer and move backwards from there. The customer doesn’t care how many man hours it takes for you to provide them the value. They just care about the value. The question then becomes, “how do we do this?”,  not, “we can’t do this”. The first step in balancing out the relationship with IT and cross channel venues is some sort of IT engagement model.

Today, IT groups are charged with a huge amount of goals. These goals are sometimes company wide, often enterprise wide and very often amidst conflicting single or multiple project goals for other corporate departments. As we detailed earlier, IT departments rarely have dedicated resources for alternate channels of business. These same resources are also charged with maintaining the current projects (channels). The very best way to ensure that enough attention is given to alternate channels is with some form of IT engagement modeling. MIT CISR research (Center for Information Systems Research, Nils Fonstad and David Robertson) provide an excellent definition complete with key elements of providing an IT engagement model which not only has governance, but can address immediate business needs,  combined with long term enterprise goals and engaging key stakeholders. Some form of engagement model is necessary to bring people and programs together (with sometimes conflicting objectives) and be able to then make decisions that address the challenges holistically.

Without some form of engagement model, the silos we talked about in the prior sections are not only erected, but fortified. Silos in the IT department and the business department lead only to very resource heavy, non- holistic and challenging solutions implementations. We’ve all been faced with wanting to integrate a solution for a piece of our website and being told that we could not do so because there were other projects that were more important, or because this would involve too much integration, or too many man hours to achieve. We sit in meetings, aggressively touting our solutions for our verticals. Not only do the conversations get heated, but often end up with incorrect decisions being made. Yes, with the science of analytics, this will become easier over time, using ROI proof. We need to share this information with the other stakeholders, including the IT department. We can’t run our business around limitations. Rather we need to govern the process and IT engagement so that the decisions that are made are focused on the customer and what we need to do to engage and keep them for ultimate revenue, profit, retention and loyalty.

Defining the roles and responsibilities within the IT department is crucial and will involve many stakeholders. IT staff are all working many hours to provide the very best level of support that they can, but if roles and responsibilities are not crystal clear, the end result often enables redundant work efforts combined with other project components being left out and again enables siloed work efforts. Sometimes, project failures can be due partially to the confusion in the definition of some of the roles and how they interact. Recently, with executive teams trying to cut costs and share resources, business analysts are a shared resource between IT and the business. This can assist in providing the best in class planning and solutioning if done properly, but can become a very difficult push/pull relationship if not defined clearly and precisely. Business leaders are engaging directly with their off-shore counterparts instead of going through IT first. Be careful with engaging off -shore counterparts as doing so can be a great solution to cost reduction and may help quicken the development process, but can also cause challenges if this information is not communicated back properly.

Collaboration is key,  but when push comes to shove, it needs to be the decision of the executive team with regard to different channels and the prioritization and deployment of fixes or enhancements. By focusing on Executive Engagement , we have alignment and  the numbers to back up the prioritization of initiatives based upon the science of ROI.  We are in a much better position to transfer this critical path knowledge to the IT department for a final shared determination of focus and planning that will take into account the customer experience.

Once you have an IT engagement model, and have clearly defined roles on the business side as well as the IT side, the next key piece is transparency and disclosure. For even with the best engagement model, information is sometimes hidden and in rare instances even falsified.  It is never too early to get the IT department involved. This only help in preparation and planning that takes into account all of the technical aspects of the project that the business may or may not be thinking about combined with the greater enterprise initiatives in which the business leaders may not be aware. Balance is the key here. People get defensive when there are limited resources combined with off-shore resources and this high exposure can lead to mistakes being made. Disclosure and transparency need to occur on both sides, because there are challenges that cause issues with exposures on both sides of the business, but can be avoided with honesty and communication. Get everything out on the table using your back up analytic information and then address each challenge, systematically and with urgency. Break down the silos that are causing faulty deployments, inconsistent project planning and implementation when looked at enterprise wide and changes that are being mapped out from a myopic approach, leaving out key pieces on either the Business or the IT side.

Using the science of analytics, disclosure and transparency is no longer just a good name for a movie, but a doable and necessary predecessor for the facilitation of full collaboration and the balance of interacting departments with occasionally conflicting goals and priorities. For example, the analytics illustrate your pain points on the site, but not what is causing them. Taking this information to the IT team sends several messages. One of collaborative spirit and another which facilitates solving for functionality challenges from a combined technical and business combined perspective. For example, understanding that 30% of your customers cannot successfully log in may be a result of your analysis. The next step is determining why this is the case.  Here is where the IT Department needs to come forward with any other possible  issues which may be contributing to or enabling this. (I remember once not knowing until I received a “fix” list, that there was an issue on the back end that was prohibiting customers with names longer than a certain amount of characters to log in).  Sometimes a new release with other changes can cause problems with a piece of existing or supporting functionality. IT and the business need complementary full disclosure so that they can be solutioning for the customer. By sharing all information back and forth, it will be easier to set up a valid and reliable set of procedures and processes that will take a project from inception to requirements to development to deployment (the full lifecycle of the project) and then to ongoing maintenance.

Ensuring the above will enable you to move digital functionality ahead (higher on the list) of what may appear to be other more other vital initiatives. The consumer is the tipping point and moves faster than you. Catering to other channels besides the brick and mortar store is required or you risk remaining relevant.  The customer experience is not in the domain of the IT department. It is the business’ responsibility to transfer this information to the IT department so that we are presenting the science on behalf of the customer and to our service provider and client, the IT department.

IT prioritization of work efforts needs to take into account existing functionality, whether content or commerce based as well as planning for new functionality. Customer facing exposures and subsequent solutions can be separated out and prioritized first. Core architecture and components that currently exist need to be monitored and maintained.  These usually include sign in, registration, bonus card, circular, cart, promotions, content functionality, store locator, global navigation and  log in  as well as other pieces of functionality unique to your business. Supporting architecture and components that currently exist need to be monitored and maintained. These usually include search, referral websites, vendor integration for all programs that are added on to your solutions, sister sites, gift cards, content linking and others. User interface and navigability are important components of providing your customer a best in class solution and should be factored into each iteration of your channels as they evolve. Customer usability review is handled best with focus groups, customer feedback and testing prior and subsequent to deployment by both the IT Department and the business.

Non- customer facing architecture may be a different prioritization process. This includes back end solutions to automate or change infrastructure that does not affect the customer experience across your channels. Combining this fix list with the fixes or improvements is akin to comparing apples to oranges. They are differently driven, solutioned differently and the customer exposure is not a factor. Maintain and work on these separately.

Final Serious Recommendations:

• Get in the driver’s seat
• Ensure that there is an IT engagement  model including role definition
• Be transparent and forthcoming
• Prioritize your work efforts with a balance of fixing existing painpoints
• If you are far behind the curve, budget for a developer or a temporary person who can be dedicated to the other channels or channel integration.
• Your other channels of content and commerce must have equal representation or your vendors will go with options that already exist…and so will your customers.  Integrate and align your customer service department so that your incoming information is comprehensive
• IT departments are notorious for having a set of defects, a set of change requests and a different set of new bugs being called in. Be transparent and support full disclosure on the business and the IT side.  It is not uncommon for a website to maintain a list with hundreds or even thousands of existing bugs with various levels of severity. (Critical, major, minor and cosmetic bugs). Make sure that you are addressing the minor and cosmetic bugs because over time, the cumulative affect of these can serve up a very inconsistent sloppy presentation to the customer which will result in a lack of trust and subsequent difficulty in building  their loyalty
• Requirements documents are a critical path issue for both the business and the IT department. This is where fatal errors occur, oftentimes errors of omission which lead to huge work efforts subsequent to deployment. Business analysts need to write these with the help of the business. This is key to ensuring that the end result is what the business is looking for. Your customers will be unforgiving when they encounter the results of these errors while on the site
• In house versus out source solutions for resource support or new enhancements: Keep the door open to entertain external solutions that can be monitored properly. Vendors are now collaborating and partnering to provide more robust and highly monitored solutions. This can help take the “heat” off the IT department
• Content management. You need it. Having a content management system or resource will assist the IT department immeasurably as well as allowing the business to remain dynamic is a critical path issue for the business and IT department.
• Testing and usability – often cut with attempts to cut labor, testing hours are vital to the pre-deployment phase. Testing by the business as well as the IT department is mandatory.  If you haven’t dedicated resources to this, do so. I don’t remember seeing one budget that ever included resources for testing, quality control pre-implementation and contingency planning on the business side. Deploy usability testing and focus groups annually, detailed by what the analytics tell you.
• The business writes the business cases, not the IT department.
• Invest in your core infrastructure

Online grows despite the numbers in the retail store and needs to be prioritized as a major component for dedication of time, resources and budgetary considerations. The end result will be a recession-friendly approach that enables faster project delivery with better returns. Keep in mind that not only your web channel is growing. It is predicted that in less than twelve months greater usage will come from/through mobile viewership. Accordingly, protect, nurture and grow your full digital core.

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Heidi Chapnick – About the Author:

Currently retained by mid-sized to large content and commerce retailers, my focus is on peeking under the covers and understanding the  ‘as is’ situation for the retailer, the internal and external landscapes, followed by prioritization of critical path opportunities and proceeded by roadmaps and deployment of business plans based upon an innovative six step holistic problem solving approach.

Selected Accomplishments:

• Establishing a profitable model for online shopping and delivery of perishable items
• Partnering with external vendors within an established brick and mortar grocer
• Establishing the same day delivery of grocery items
• Establishing a ‘wareroom’ model for fulfillment
• Pick up at store after ordering online 

Content site: How many minutes does a customer stay on your site?

These articles outline the six steps that are the components pivoting you towards being able to achieve ultimate success for content or commerce driven websites and other channels of engagement:

ü Executive engagement (discussed in former series piece)
ü Needs Assessment/Analytics and the Science of ROI

• IT
• Marketing
• Operational Execution/Employee Engagement
• Customer Care and Centricity.

In the last article, we discussed Executive Engagement as the first mandatory step in working towards having successful and ROI positive multi- channel content or commerce sites and their ultimate integration. In this piece, we will be focusing on Step 2 – Needs Assessment, which uncovers what is under the covers of your existing business. This step needs to be taken prior to making any decisions about planning and deploying solutions. Now that we have a clear vision from the executive team which aligns and can alert the analytics team properly, you can begin to research the “as is” situation across each channel of the business, whether content or commerce driven. And with software solutions technology becoming more and more robust and entering the arena at an alarmingly quickened pace, you need to work urgently to assess and understand what is going on currently with respect to all critical measurable components of your business channels and the metrics which will help you to understand your current situation. During this assessment period, you will begin to automatically problem solve and solution as things come into focus. Interpreting the data will give you the information to make crystal clear choices, guided by the scientific numbers we now have with our analytics tools. If you have a static website, you will find the information you need to understand what the next step is (content first, then commerce or content without commerce or directly to commerce). If you don’t an have analytics tool or a customer feedback tool, deploy them first and then come back and continue reading. If you do have analytics, read on.

Bravo. You have the tools implemented. There is a lot of work that needs to be done now to understand what the critical path metrics are for your business based upon the executive positioning of the enterprise as a whole. But now you are armed. At this point, you may find that the reports you are getting (if you outsource) or the reports that your team are providing (if in house) are not customized enough for you based upon your new knowledge about the criteria that are important to you. (Keep in mind that while your URL may have no ecommerce capabilities or have sales that may not even represent single digit percentages of your gross revenues, the time is now to set the stage and this requires a no holds barred approach with analytics as its predecessor).

Customization of reports and requirements for analysis is different for commerce and content sites with respect to the metrics that need to be measured as criteria for benchmarking and subsequent improvement with specific and focused calls to action. For example, it might not be enough to know that your customer stayed on a certain page for a certain time, but where they went next and what percent went from that page to another page. This is called scenario analysis.

Scenario analysis is a process of analyzing possible future events by considering alternative possible outcomes (scenarios), and this point- to- point tracking is very helpful in identifying customer patterns as well as checking existing or new functionality on your website. Scenario analysis is also helpful when setting up customized reports. Scenario analysis allows tracking of customer behavior as they interact with your site to track whether the customer went from point A to point B and at what percentage they did so. For example, do customers move from “sign in” to “shopping” to “add to cart” to “complete order”? By defining a scenario analysis, you can learn where visitors abandon a process and identify areas of weakness in your site. Using this information, you can make changes to your site to help improve visitor retention and conversions. As you continue your deep dive in information collection, other areas of interest, like where the customer came from prior to going on your site and where they then went when they left your site, will become key pieces of data to use for future marketing efforts.

Visitor Intelligence is a relatively new module that can be added to most analytics tools, if not already there and waiting for set up and implementation. Visitor intelligence takes the next step in understanding the customer psychodynamics in a more segmented way, allowing for future targeting of personalized messages and experiences for your customers, optimizing your strategy and helping to set up campaigns that will increase the success of marketing endeavors, conversion rates and ultimately, sales. Examples include demographic information, gender and age information as well as other data perfect for email segmentation and loyalty marketing efforts. “Visitor Intelligence” is a dynamic method of accumulating and analyzing information about online visitors, their behavior and specifications. This allows us to finally make an in-depth 360 degree visitor view to extend knowledge and insights about online visitors and to use this to build stronger engagement and retentive relationships with customers.

Online intelligence combined with offline information from your CRM (customer relationship management) system for the perfect complement of information that can lead to the individualization and personalization of your relationships with customers. By understanding the real needs of your online visitors you are able to anticipate by targeted marketing and content optimization. Visitor Intelligence enables you to outrank competitors by enabling the building of bridges first to segregate out groups and finally to the individual level. Today online customers are looking for interaction and personalization. It is important to fully understand your online customers to be able to communicate with them individually to provide this personalized user experience.

Visitor Loyalty can be achieved through the use of these tools and provide the scientific basis for moving forward with decisions that will increase loyalty and preference with your customer base while they engage with you online. If you can use this information to target promotions that are segmented, at least into groups, and ultimately to individuals and personalize the experience across channels, thus achieving the objective of loyalty. You might have noticed that I snuck in, “across channels”. We have not discussed this yet, but as you are just becoming adept at putting together proper reporting and analysis online, the mobile revolution has begun. With it, its own set of criteria and analytics will be necessary as the mobile customer is not necessarily the same at this point in time. My estimate is that in within five years, customers will be able to use other channels interoperably and at that point, we are really providing the value that a customer needs to have convenience with choice, leading to the best value. They will then use the channel they want when they want it, for each channel will provide the same value and reliable experience. For right now, early adopters of cross channel commerce or content may not be the same customer as the traditional brick and mortar customer. Until we integrate our channels fully, we will not see this evolution. But, we will need to catch up very quickly and start benchmarking the mobile customer as we are the online customer. Let’s save mobile strategies for understanding customer behavior for another time.

Customizing your analytic tool will become more important the more you learn and will set the stage for the correct information to be pulled. There is a lot of customization that analytics providers offer. Review these options with the stakeholders in their respective departments, not just the dotcom team. Decide upon the metric criteria you will use for evaluation and decision making in collaboration with all enterprise stakeholders for all channels. Set the criteria that are important to measure and isolate the metrics important to your business channels. This will enable you to then view and share the relevant information with your teams as well as to set goals for improvement and to ascertain success measurement of actionable items.
Not only will data and reporting requirements be different for each industry or competitor within an industry, but for your internal departments as well. For example, the marketing department will need to know if a campaign is pushing customers to the store or a promotion is being redeemed and by what percentage, while the content manager on a content driven site needs to know how long a reader is spending on a page (longer might very well be better in this instance), which will tell the content manager how engaged the person is in what they are reading and where they clicked off to after moving on. Even placement in certain areas on the page becomes important for your vendors with ads. Conversely, on the checkout pages, the customer should be breezing through these quickly, so the metric for time on those pages will naturally have as its goal a much shorter time spent on page. For content sites, you might want to know which placement offers the customer more of a likelihood to click through on the page or which types of links and articles are important. For a commerce site, you might want to know if a customer is having trouble on one of your checkout pages or difficulty logging in. There are at least fifty criteria and many more that you will discern as you learn. From interacting with the raw data, you will see that the criteria and benchmarks will be very different depending upon the end user.

Benchmarking from industry standards is a critical path to any sustainable action plan. Take the time to understand industry standards. Business verticals can have vastly different metric goals than other verticals. For example, conversion on a commerce site can range from .5% to 23% and higher, depending upon the industry, as many factors influence conversion (promotions, functionality, navigability, etc.). Your business is unique. Taking this into account will then facilitate evaluating the industry standard and then your own deviations from that industry and how that will affect your final actionable benchmark – your own uniqueness. This is key to successful benchmarking. (Many of the analytic companies offer interactive tools embedded in their reporting dashboard systems. You can actually play with quantity of orders combined with conversion rates and order size and other variables to learn the “what if” and teach others).
Personalizing a benchmarking system and so many metrics is complex, but necessary. Doing this with internal resources dedicated to analytics is the best in class way to achieve quick and sustainable results. But outsourcing reports is better than having none of this information. All industries have different benchmarks which indicate success. As mentioned previously, conversion rates are all quite diverse, depending upon the type of channel, content or commerce as well as differences in likeliness to purchase that will change based upon promotion and other criteria. Additionally, if the customer has challenges with the functionality on your website, you will see this by drop off on certain pages. Take this information and compare it with what the customers are saying with the feedback tool for that page on the site. Now you have a full analysis of what is going on. It could be functionality, pricing, in stock conditions or something as simple as broken links. If you don’t know what your conversion rate should be, you can’t set goals for improvement. To further complicate matters, there are different percentages for different pieces of the conversion funnel. Converting a new visitor to the site is different than converting a returning customer to the site. You will need to isolate these variables separately. Unique visitors to actual visits on the site are two very different pieces of information.

Customer service is handled differently around the Country. And because oftentimes, customer service is a separate entity or a conglomeration of service for various areas in the company, it is vital to obtain and use these customer service statistics as part of your overall analysis and roadmapping.

So, final serious recommendations for your Needs Assessment step:

• Understand your own metrics for success
• Benchmark for goal setting
• Pull out the criteria that you want to use (these will change and evolve over time with new implementations and enhancements)
• Customize reports by collaborating with intertwined departments (For content sites, you might want to know which placement offers the customer more of a likelihood to click through on the page or which types of links and articles are important. For a commerce site, you might want to know if a customer is having trouble on one of your checkout pages or difficulty logging in)

o Find your painpoints and where you excel. This can include core or supporting functionality (i.e., registration, log in, loyalty card integration, store locator, circular, broken links and navigability) or strategies (pricing challenges, assortment, content dynamism and robustness). I worked with a company who implemented an advertising solution that had brought 20M into a competitor yet failed in another. The reason had nothing to do with the solution, merely that the customer had difficulty logging in to their account. This should be no surprise, you should know monthly your core metrics of site performance and monitor and attack any challenges that crop up
o Share the information with internal and external stakeholders
o Prioritize work efforts, balancing existing challenges with the implementation of new enhancements but base these on the ROI and what the analytics tell you. You will most probably need to do phased deployments, because you are most likely sharing IT resources with the greater enterprise. Use the science to create ROI documents with actionable plans
o Blend customer service feedback and metrics from interactions with the call center and with the site analytics for a comprehensive and collaborative view
o Create a sustainable roadmap based upon ROI. Make sure that your roadmap clearly provides customer centric solutions and is consistent with the goals of the organization

A few quick tips:

• Following every release, analytics should be reviewed to ensure that the enhancements of fixes are causing no side effects. This should be part of the testing subsequent to launch. Remember that you need to have your baselines in order to notice spikes
• Let the science direct your decisions and planning
• It is predicted than in less than 12 months greater Internet usage will come from/ through mobile viewership. Accordingly, do what you need to protect your digital core
• Celebrate your successes by consistent communication with internal stakeholders and vendors with vested interests– before long, analytics dashboarding will be just a part of every day
• Understand Social Media, which is becoming a very integral part of the online experience. Using social media, such as facebook, allows customers with the same needs and interests to join and collaborate through online forums, called “social networks.” These are very helpful as they can provide information you can collect and use to optimize the experience for your customer. Search engine optimization allows you to index this information and become higher in rankings by using keywords to increase the likelihood of your website or product or information coming up in a search. Using the information you glean from analysis to optimize your search will be important to attract new visitors to your website.

Now that we have the actual science, our jobs have been made much easier. Understanding the customer across channels can be delivered through metric analysis and should guide and govern your decisions going forward. Prior to the inception of these analytic tools and feedback tools, there was a good deal of guesswork involved in making decisions as to which enhancements or new initiatives to deploy. There was very little evidence and proof of concept that could be shown quantifiably. But conversion is conversion and we can see this with absolute certainty across channels.

Looking at this scientific information and making decisions for action based upon these metrics is your key to unlocking future positive ROI initiatives and should guide and govern your decision making for your channels. The same philosophy and set of tools can be used for content and commerce sites and needs to be shared with the greater enterprise so that consistency of efforts will be agreed upon and lessen the push pull and possibly conflicting prioritization within the IT Department, our next step of focus on the path towards successful cross channel development.

Was this Helpful ?

Heidi Chapnick – About the Author:
Currently retained by mid-sized to large content and commerce retailers, my focus is on peeking under the covers and understanding the ‘as is’ situation for the retailer, the internal and external landscapes, followed by prioritization of critical path opportunities and proceeded by roadmaps and deployment of business plans based upon an innovative six step holistic problem solving approach.

• Establishing a profitable model for online shopping and delivery of perishable items
• Partnering with external vendors within an established brick and mortar grocer
• Establishing the same day delivery of grocery items
• Establishing a ‘wareroom’ model for fulfillment
• Pick up at store after ordering online

Ebusiness and cross channel content and commerce grew by 18% in 2009? Did your brick and mortar grow by that rate?

These articles outline the six steps that are the components pivoting you towards being able achieve ultimate success for content or commerce driven websites and other channels of engagement:

• Executive engagement
• Needs Assessment/Analytics and the Science of ROI
• IT Engagement Modeling
• Marketing
• Operational Execution/Employee Engagement
• Customer Centricity

With new technology coming out at an exponentially growing rate, retailers are forcefully thrust into a swirling dynamic and volatile euniverse, scrambling to understand which technologies will help and across which channels and with the best ROI. Success factors and expected profit have been plugged numbers, with little ability (in the past) to really guesstimate with andy degree of accuracy. Why? Because there was a lack of successful models and also a lack of understanding the factors that will either limit or facilitate success, causing retailers to make strategic decisions without all of the necessary information; expending thousands of shared IT hours on hit or miss solutions. But hold on! We are still missing something. What about what the customer needs and desires? Will your customers be fully and completely satisfied with what you are offering? Have you considered this in your plans? Have you seen the five -year roadmap for this piece of the business? If so, who is creating it and who is driving it? Are your cross channel priorities being defined by the ultimate stakeholders – you and your customers? Make no bones about it, it is about the customer. They are the single tipping point, the guide of the puck and our final redemption, or lack thereof (pun intended). It’s very easy to succeed when you start with the customer and then walk 360 degrees around them.
These are some of the questions to ask yourself if you offer supporting channels of engagement:

How do we deploy solutions that are both customer centric, ‘the cost of doing business’ and yet balanced with those initiatives that are profitable while catching up to and surpassing competitors?

Who is providing the foundation for the ship, steering the ship and guiding and governing its course?

Do our enterprise pillars of operation acknowledge other channels of sales besides the brick and mortar?

With vendors touting their many and robust solutions, where do you start? You start with the customer and move back from there. It’s that simple. What is the experience we desire to offer the customer? Instead of asking what the customer can do for us in the long run, what can we do for the customer? Simply, instead of asking how to get our customers to be loyal to us, how do we show our loyalty to our customers? How do we show consistency and integration of efforts to provide the ultimate experience. Who is making these decisions? Is your infrastructure set up to foster and facilitate collaboration, or are you building silos by not integrating your other channels with your core business? Look at your internal company landscape carefully…and read on.

For hundreds of years we have used science to explain methodically and with evidence, the many unexplained phenomena of the universe. So it is not a far stretch to use science to understand the parallel universe of the internet and digital space, now that it exists. Espace is a whole new universe, ripe with the potential for earnings, revenue and happy and informed customers that will rival and probably supersede any brick and mortar enterprise on this planet. We now have the easy answers for the less knowledgeable and the tough answers to the most complex challenges through science.

The idea of using the hard sciences (biology and chemistry) has always been a fundamental strategy in providing evidence and proof of hypothesis. The idea of using the soft sciences, psychology and psychiatry (the psychodynamics of retail customer centric behavior and subsequent solutioning) has only been internalized over the past ten years as an integral and pivotal touchpoint for proof of concept. But the available rewards of using this approach are reaped with viewing and analyzing hard science metrics…customer satisfaction indexes, increased trust and loyalty, increased basket size and frequency, increased retention and increased revenue.
In relation to all digital media, commerce, and content espace, hard science implies using ROI analytics for needs assessments, prioritization and planning . Soft/social’ sciences are used for the development and subsequent deployment of customer centric solutions to devise and deploy strategic business plans and roadmaps and in building interactive empires, just as we have built brick empires for hundreds of years. Although this enterprise may be different in offerings and services, it must be the same in value. And although this enterprise may have different competitors than the complementary retail brick competitors, integration is a pivotal and mandatory part of the retailer business, especially in this environment and economy. Finally, although the website or other channels may be for information and content, rather than transactions, unless you are willing to fully integrate all of your channels for content and commerce with your core business philosophy, and support and engage at the executive level, you will not likely enjoy the fruits of a successful future enterprise or ebusiness, whether transactional or content/informationally driven. Nor will your customers be fully and completely satisfied with what you are offering. Think about it like raising children. We don’t, as parents, leave our newborns alone to fend for themselves. We care for them, guide them and assist in their assimilation and growth. The guiding principle is the same.
So, again, where do you start? You start where the customer is standing and walk a circle around them.

Whether you have a commerce or a content website, or one that combines both, it is imperative that you have a full understanding of and are setting the guidelines and positioning for your website and other channels of engagement. Channels besides the retail store need to be properly directed, integrated and led by the people who have built your successful brick and mortar empire or at the very least, collaborated with. Use the other channels to support enterprise initiatives but using collaborative methods so that people are not working in silos with their own set of priorities. Your channels need to be consistent and provide the customer an experience that is of the same value and with the same positioning as your stores. Otherwise, your message will be confusing and your levels of functionality and enhancement will be based upon what the other channel leaders want, not thinking holistically about the enterprise and causing conflicting priorities. Customers should be able to use all channels in an interoperable manner. For example, if you have a loyalty card, its use and value must be the same across all channels. The experience online or on mobile must offer the customer the same value, because if it doesn’t, a customer will utilize the method that yields the highest value and become frustrated with your other channel(s). Example: I was once in a Company that didn’t have the necessary guidance and governance. The online channel actually decided to separate out photo and other services that were part of the enterprise. Although caught in time when it went for final review, the amount of work and resources (IT, marketing, etc.) spent to isolate and separate out these core services from the enterprise could have had disastrous results for the customer and the messaging. The collaboration and direction needs to be set prior to a final review. They need to be set by the executive team.

Siloed work efforts are caused by not setting executive level pillars of operation that clearly define these new channels and not hold accountable the leaders in the company that have spent their lives becoming experts in their fields. Cross channel merchandising can be a subset of the general merchandising department, but be housed in the general merchandising department for the silos to be broken down. Why are so many retailers not using our subject matter experts to evolve? The merchandisers are not responsible for their categories in any other channel, only the brick and mortar store. Yes, they will need training. Even though in five years, the customers will be the same, using each channel differently for convenience, the customer is not necessarily the same at this point in time. Online strategies for example, with respect to assortment, can be quite different at this point in the evolution. Ok, so they need training. But they also need P&L responsibility to truly be involved. Pricing strategies are pricing strategies. And although again, they might be different on line, they are still strategies for which there are experts within your organization who have made their careers by focusing on this. If they are not studying industry trending for other channels, they should be. Otherwise, you now have a different pricing strategy for other channels which may be discordant from your enterprise strategy. Yes, you may need to deploy different tactics and strategies for other channels, but these decisions need to be fully researched and understood by the experts within your organization, and they need ultimate accountability and facilitated integration. This is what looking at the internal landscape and infrastructure will tell you – are you set up for silos or collaboration?

Six steps outline the major areas in which focus and commitment is mandatory to not only integrate your commerce (or content) site and other channels, but to really excel and succeed in a turbulent economy. Below is a description of Step 1:

l. Executive Engagement –As outlined above, the fundamental pillar of pivoting towards success is to have people, directors and managers running a business that should get its guidance filtered down from the executive team.
Start with your pillars for the enterprise. Is there a pillar for the customer? Is there a pillar for channels of sales not inclusive of the brick and mortar?
All channels must have the same value (which does not necessarily mean the same exact offering) and YOU decide how to do that. For example; if the customer can’t use their loyalty card online, purchase and redeem gift cards, they will go elsewhere. Moreover, your loyalty leader probably doesn’t even know about the disjoints in functionality across channels. Email management is another example. How many databases do you have for your business? Do you have a separate database for email for your online customer and your in- store customer? How many emails are you sending a week? Is there governance over the process? How can there be if each area is working in their own silo? Do you have a single view of the customer across all shopping and engagement channels, content and commerce related interactions? And if your online business is used just to push customers to the store, then your focus should be on a content website because you don’t’ have a strong value proposition to be offering a cross channel experience.

We are sending a confusing internal and external message, or no message at all, about the importance of these channels. This avoidance of embracing or even acknowledging these other channels that are a part of your core business ends up with a confusing message to our customers as well , because the same care isn’t taken with other channels as being important and they are that important for the customer, whose main concern is convenience and convenience equals choice and choice creates value. Below are some final recommendations for serious review:

• Acknowledge other channels in company pillars- other channels, particularly the online space, have a much higher exposure rate for customers than the store. They need attention. You might also want to put in a customer experience pillar because then you will be automatically working towards a single view of the customer which will allow the ultimate personalization we are all striving for.

• Lead by example – Are YOU using your available channels regularly to show support? Are your employees? Donate to your own business. Shop across all channels and make it a company mandate for employees to do the same.

• Invest in the future- Executive committee commits to capital expenditure and resources with a full vision and a mission that will not change every year, but will be sustainable with small modifications.

• Lose it! – the segregated P&L- sure, keep it for tracking, but hold accountable your experts within the organization. Have one marketing department, one merchandising department, one pricing department. Once the P&L is integrated, all of the time, money and energy spent on showing the store lift (the necessary ‘Aha’ for engagement) will be spent on personalizing the relationships with customers across channels for the holistic growth of the company as a whole. Wouldn’t it be great not to have to spend hours negotiating as to which pot the funding is coming from and which it is going into? There are solid ways to facilitate integration that will benefit all. Don’t be afraid that you will be cannibalizing your retail empire- the multi channel customer is over 2x more valuable. Period. (Forrester)

• Look at your infrastructure and be prepared to make changes – are you set up to break down silos? If you keep segregated, you never break down the silos. moreover, you end up with renegade programs, conflicting solutions and haphazard deployments. Your end result will be poor customer service, band-aid solutions and a failing cross channel business. I worked once with a company, building a commerce website. The team wanted exposure in the circular. We thought this would just be a matter of planning. Instead, we were given a bill for $200,000 for a few inserts…to advertise with our own company!

Consumers reward superior quality by simply buying more. There are many examples that prove that a consistent focus on superior product quality across the cool chain leads to higher sales and profitability. Particularly, on items that are more perishable, this strategy can lead to enormous growth in sales. Focusing on quality in the retail channel is one of the best ways to add value and to drive sales.

On the cost side quality is having an equal impact. In the supermarket store alone, an average retailer will have shrinkage levels in fruit and vegetables of roughly 4-8%. With the millions of euros in sales that most retailers have it is clear how large the impact of quality is. For a retailer to optimize the cost of shrinkage is the single biggest opportunity to reduce cost in the cool chain. Actually, for all partners in the cool chain it is the single biggest opportunity to reduce integral costs.

It is very easy to see that investing in quality pays off; both in consumption and in costs. So why are we not all more committed to quality? How can we bring quality management and quality awareness to a higher level across the cool chain? If we are all focused on satisfying the consumer; how can we make quality management a key driver for consumer satisfaction?

We need to make quality management tangible!

That starts by taking our scientific understanding of how Perishables behave after harvest and elevate that. Instead of developing graphs of respiration rates at different temperatures or at different oxygen levels, we need to actually translate that information into a more actionable concept: Shelf Life Loss.

A temperature graph during transport only tells you if a certain temperature has been exceeded, but even the brightest professor can not estimate the effect of a specific temperature regime on Shelf Life Loss. For that you need to have mathematical formulas that calculate Shelf Life Loss. A number of leading companies in the industry is very advanced in developing these Shelf Life Loss models and incorporating them in RFID/Temperature technology. This will revolutionize the way we look at cool chains and perishables.

With control over Shelf Life Loss we will encounter another opportunity: to harvest products at higher maturity. This very often improves eating quality but by definition it shortens shelf life. With Shelf Life Loss under control we can start to optimize taste. The effect this can have on the perishables industry is enormous.

Collaboratively monitoring and managing Shelf Life Loss is a very powerful way to drive quality throughout the cool chain.

Once we control Shelf Life Loss of a specific product it is very easy to link that to shrinkage data in the retail store. Suddenly we no longer talk about scientific data such as respiration rates, but we talk Dollars and Euros. Suddenly we create a mutual and tangible responsibility and thus a shared accountability for quality in the cool chain and we can balance that with optimum eating quality.

I will even go one step further. When we are able to monitor Shelf Life Loss and we know the cost involved, we can translate this concept into product specifications. Retailers can then agree with their cool chain partners that all oranges arriving at their depot not only meet their normal quality specification, but that they also have a Remaining Shelf Life of, for instance, 5 to 8 days when stored at room temperature. That best guarantees optimum eating quality for consumers while optimizing shrinkage in the store and maximizing profit across the cool chain.

Science Fiction? Not really. Technologically we are not very far away from this world. Shelf life models are being developed and RFID/temperature integration is close to becoming commercially available. And leading retailers increasingly focus on “taste” as an important point of differentiation. More importantly we will need to all feel part of this Partnership for Quality; from field to retail shelf. We need to learn to deal with the transparency and responsibility it creates. We will need to move away from the world where temperature monitoring during transport is only done to “check” whether transport was according to specification; temperature monitoring has to serve optimization of shelf life and taste!

We should never forget; in the end we are all working for the consumer; let’s give her excellent products by revolutionizing the way we manage quality in the cool chain! In a Partnership for Quality.

So if this year is going to give even more price pressure; is there a way out of that discussion? We believe the answer is yes. And it starts with a much broader definition of “value”.

We generally have a narrow perception of consumer value. Most of the time, we consider it to be synonymous with “very low price”. But there is much more value to be added to the relationship between suppliers and key retail customers, and to the consumer. That is also what many full service supermarkets themselves do; don’t try to be continuously the cheapest but strengthen the relationship with your primary consumer by creating additional value.

So, how do we create value in the fresh produce world without being distracted by price?

Let’s start with a simple question; have you ever met a consumer that wants to buy bad tasting produce because it is cheaper? I didn’t think so. When “taste” is superior, “price” plays a minimal role. Anybody merchandising strawberries knows that the impulse character has little to do with price and everything to do with taste and smell.

Yet, instead of trying to give consumers products with great taste, our systems are focused on just meeting the minimum requirements. Think about it. We prefer varieties for their long shelf life, pretty much regardless of their taste. We harvest climacteric fruit as early as possible; even when it means that they never reach the optimal sugar content when ripe. We trade mango varieties that have a red color so that they look ripe, even though they are hard and contain fibers. Our quality systems are designed to assure that we bring products to the consumer with Brix levels that must be above a minimum; that is very far way from pursuing great taste. Meanwhile production is mostly driven by maximizing kilo’s. All this unfortunately contributes very little to satisfying the consumer.

By not focusing on optimizing quality and taste we have effectively helped the commoditization of our industry. To put it more positively; one of the biggest opportunities to decommoditize fresh produce is by focusing on quality and taste.

Because margins are thin as a result of the commoditization pressure, our fresh produce industry also gives itself little room to innovate. Sure, we’re not developing new mobile phones and of course it takes 7-12 years to breed a new tomato variety. But that should not keep us away from creating new forms and when it comes to innovation the only limiting factor is our imagination. There are so many ways to add value to the relationship between producers and retailers that it is amazing to see that we are mostly only able to discuss “price”.

A commitment to creating new levels of consumer value is the basis for a sustainable fresh produce world. This will require a concerted effort to drive innovation in the fresh produce world; from field to retail shelf.

We live in economically challenging times. But it is a great moment to go back to the essence of our business; to continuously deliver added value and to surprise the consumer with exciting and great tasting fresh fruit and vegetables.

As share of income, we deliver today the cheapest food in history. To put it more negatively; the “food at home” industry has consistently been loosing market share in the consumer market for more than 80 years.

Why have we been unable to seduce consumers in spending a considerable part of their income on food at home?

For too many years we’ve primarily focused on delivering competitively priced products. We’ve been very good at reducing costs and increasing productivity. Food had to be cheap, widely available, safe and it had to look good. And we delivered.

However, when consumers give their final verdict about fruits and vegetables they rarely talk about price and appearance. Sure, price and appearance are important to drive initial sales. But how about that final verdict from the consumer? After consumption?

Have you ever met a consumer that said; “I ate an apple and it tasted terrible. But I am satisfied because the price was low”. No, I am pretty sure you haven’t.

We continuously find that more than halve of that final consumer satisfaction in fresh produce comes from flavor. Price and appearance play only a small role in that final verdict.

That final verdict about fresh produce is mostly driven by flavor. We repeatedly find that if flavor is right, price is largely irrelevant. And when flavor is great, superior consumer satisfaction will lead to repeat purchase.

It is this repeat purchase that increases fresh produce consumption.

We want consumers to have a great flavor experience and come back for more. That is how we increase consumption. Sales of many seasonal and impulse products is purely driven by this flavor experience and by intensified repeat purchasing.

If we want to increase fresh produce consumption and drive produce sales we have to deliver a superior flavor experience.

André Michelin said it in 1926 when he introduced the Michelin stars; “exceptional flavor is worth a special journey”. The best journey we can let our consumers make is back to their local store; for that superior produce flavor!

Value includes your knowledge, technology, information, and stewardship.

Unqualified value is unmarketable value.

Learn more about Value Selling through this Value Selling (Quicktime required).

To learn more about Social Media watch the presentation below. Quicktime is required.

Social Media Intro



Scenario No. 1:

Customers were moving along quickly in a local supermarket, eager to get home. Hostile weather was beginning to threaten the area with a massive thunderstorm and high winds predicted. Meanwhile, the produce department was loaded with product on all displays and ready for a big sales weekend. Later that evening, several inches of rain caused flooding and crippled the town. In the ensuing week, the produce department lost a substantial amount of sales and experienced a huge shrink in product.


Scenario No. 2:

A major supermarket chain decided to cut back on a portion of its advertising as part of a cost-cutting initiative. The produce manager in one of its stores was on vacation. Poor display conditions were evident throughout the department, with product was not fresh and priced much higher than the competition’s. Total produce sales for the week in this store ran substantially behind last year.
Where does the blame lay for the lost sales in each of these scenarios? A business does not run on automatic pilot. People push the buttons and pull the switches. But two “forces” actually dominate all businesses: uncontrollable forces and controllable forces.

The two scenarios reveal examples of both uncontrollable and controllable forces. In the first example, stormy weather and flooding are to blame for lagging sales during that week. Because it is not possible to manage the weather, this could be considered an uncontrollable external force since the supermarket management could not influence the storm by stopping the heavy rainfall.

The second scenario demonstrates four areas that a company has full control over and could have acted upon to prevent sales from slipping. The reduction in advertising, overall poor condition of the produce department, tired product and high prices all could be considered controllable internal forces. Every one of these examples was a contributor to the sales deficit caused by inattentive day-to-day responsibilities within the company.


Leading forces at work:
A company controls its own destiny by managing the business it operates within the guidelines it sets toward success. Those guidelines are usually in the form of a business plan that includes all the specific sections accompanied by job responsibilities of individual management people. It is imperative that those who carry the operating responsibilities have full knowledge of the forces that separate internal and external control. Here are just a few of the leading forces that play important roles in the business world.


External forces:
(uncontrollable)
Customers — They shop wherever they choose and buy what they want. You can’t physically pull people off the street into your place of business. Competition – It operates its own programs and sets its own retails. Each rival company runs its own business as it chooses.

Economy-stock market — Its pace is based on business progress, consumer behavior and other worldly conditions.
Weather — We can predict, but cannot control the weather. Warm sunny days allow customers to easily get to places of business and spend money. Stormy weather keeps them and their wallets at home.

Technology — New modern high-tech programs, equipment and material forces change. It will always be on the rise and businesses cannot stop it. Government – All laws, regulations and rules must be followed. There are no options to do otherwise.

Wars and terrorism — It is painful, dangerous, damaging and alters business in many different ways. It is especially accompanied by decreased sales.


Internal forces:
(controllable)
Advertising and marketing — Wise program spending will entice consumers to increase their shopping desires.
Prices — Retails make a difference in deciding where customers will shop.

Budgets — Companies make operating decisions based on specific financial budgets. Spending or cutting costs can control a big part of the sales results.

Merchandising — Increased sales come from product presentation and stocking levels. Conservative displays reduce sales, while aggressive displays boost sales.

Cleanliness and sanitation — Poorly maintained packing plants, warehouses, offices and stores send customers elsewhere.

New products — Creating new product lines and packaging ideas stimulates incremental sales volume.

Shopping environment — Business interiors and shopping surroundings make a difference in customer buying moods. Shopping ease and good service are part of the ambience customers desire.

Food safety — Growing, packing, manufacturing, shipping, warehousing and retailing of all foods need to be kept wholesome and safe for consumers. Fresh, in-date products are the responsibility of suppliers and retailers.
There are many additional forces to consider other than those listed above. Be concerned about all of the internal areas under your control. If you do that the majority of the time, it will contribute greatly toward your success. Since you cannot control external forces, don’t waste time worrying about them. It’s really up to a company to manage itself by paying strict attention to all of the internal areas that can be managed and organized. No one else is going to do it. Again, every company controls its own destiny.

(Ron Pelger is the owner of RonProCon, a consulting firm for the produce industry, and a member of the FreshXperts consortium of produce professionals. He can be reached by phone at 775/853-7056, by e-mail at ron@power-produce.com or check his web site at www.power-produce.com.)