I keep reading about the emergence of the value consumer, who, once driven by quality and exclusivity is now busily coupon-cutting for cheap or largely incentivized offers. Luke Johnson in the FT recently said that businesses must adapt and embrace this new order or asphyxiate.

Like most things there are two sides to this. Whilst discounting undoubtedly holds the strongest voice in today’s economic opera there is a concern over the level of customer commitment generated. Whilst the aria at the moment is purely about ‘bums on seats’ it is worthwhile considering the longer-term objective of loyalty and customer commitment.

I recently read ‘Neuro Web Design’ which refers to research by Caldini in 2007 showing that if a public commitment is not ‘owned’ by a person, and is mainly made to gain a large reward, the individual is not deeply committed and will not show deep commitment in future behaviour. However, if the action is made voluntarily because of ‘inner beliefs’ then the person will feel much more committed to the action. Crucially, to get commitment we need to engender ‘inner responsibility’.

To build ‘inner responsibility’ Caldini goes onto to say that it’s worthwhile giving a mild admonition or small threat of punishment as this can encourage us to behave in certain ways. Afterwards we’re more likely to display a tendency to want to be consistent and take responsibility for our behaviour. The pressure for consistency causes the commitment to deepen.

Let’s be clear – I don’t think that Caldini is advocating that you treat your customers as Basil Fawlty would, but sometimes making the customer conversion process more like joining an exclusive club may actually improve loyalty by making the customer emotionally engaged with the decision.

Many people have experienced this process over the last few years as they ditch their PC’s and embrace Apple Macs’ – it’s not easy making the change, and you avoid making the decision for quite a while until you are convinced that it’s really something you want to do. Once you make the choice, you expect pain on the way, but ultimately you believe the choice will be worthwhile and it’ll be for life….

If you’ve had the opportunity to visit our office you’ll have been struck by the black and white photos adorning the walls.

Louis Armstrong, The London Playboy Club, Black Power, Swinging London and the Beatles.

They’re left over from a ‘dot-com’ idea we had back in 2000 when we hoped to sell framed photographs via the web. The photos’ came via an ex Spitfire Pilot called Terry Spencer who amongst other things is in the Guinness book of records for the lowest ever parachute jump. After the war he bought a plane and flew with his new wife, without a map, down to South Africa. There he started working for Life magazine, returning to the UK in the 60’s to photograph the defining moments of the decade.

Terry was thrilled by the idea of selling his photos online and we spent many hours in his study carefully reviewing negatives and selecting the best ones for hand printing and drum scanning. Despite our best efforts we didn’t manage to sell sufficient prints to make the site a success and so shut it down and decorated our office with the remaining pictures.
Every one who visits the office comments on the pictures, how great they are and their depth of character. Whilst I’m sorry that we couldn’t get that business model to work I’m glad we tried because we learnt from the experience and have applied the lessons to make others a success. And heartfelt thanks to Terry who was prepared to have a go.

Terry Spencer died on February 8, 2009. His wife pre-deceased him by 24 hours. You can read his obituary at the Times Online:

http://www.timesonline.co.uk/tol/comment/obituaries/article5688664.ece

One side effect of Le Crunch (resorting to French for a fresh descriptor) is a boon in the discount voucher market online which has helped keep restaurants like Pizza Express full in the dog days of January with two for one and three courses for £10 offers.

Playing the discount voucher game is therefore an attractive option for restaurateurs with a cold wind on their back but there is a danger that in the frenzy to keep tables full, established, loyal customers may be ignored. If no distinction is made between them and the fly-by-night, voucher clutching one timers, what are you saying to your regular customers about how you value them?

Thankfully, it’s not an either or situation, restaurateurs can combine discount vouchers with rewards for loyalty. This could be as simple as mailing your existing customer base and offering a reward for passing on the discount vouchers to friends. Email and social media make this a wildfire solution for spreading the word if the offer is attractive enough. However it is executed, rewarding customer loyalty, rather than purely commoditising the offer will put restaurants and other retailers using vouchers in a stronger position come the financial thaw.

I’m tempted to start another dog metaphor here but will resist. By unleashing the beastly I mean that if your site doesn’t have a facility for customer feedback, the motivated customer will go somewhere else to post unfavourable comments and then you lose the opportunity to easily respond. And like magnets, complaints attract ‘me too’ complaints and all of a sudden there’s a rash of negative comment spreading across the internet which you need teams of people to locate.

Hopefully some of the UGC will be positive but customers need encouragement to share positive comments. With any product or service we should be asking the question ‘how was it for you?’ and include the option to rate your service. No lengthy surveys, just a simple rating and optional comment box.

If you bear in mind that someone who has made a repeat purchase is much more likely to buy again and again, their comments will help you understand better those people who could become brand ambassadors – important because personal referral is the number one influencer for purchases online.

Some of the larger mounds of snow were causing my dog some trouble this morning and it occurred to me that the way the short legged fellow would disappear from sight periodically behind one of them was a useful metaphor for customer service online. I’ll use that I thought.

For mounds of snow, read data silos where customer history literally disappears from sight when the customer changes channels from say a company’s telephone line to their website. What you really want is for the guys on the phone to see what you’ve done online and vice versa. Nothing can be more frustrating than having to personally act as go between for departments in the same company.

The go between should really be that technology known as API – application programming interface which rather like the amoeba in o level biology, allows one application to speak to another via a sort of fibrous membrane that holds things together.

For large companies with many databases, integration of this type takes a lot of money and planning but its also achievable for smaller entities using a customer audit trail approach which means your phone call conversation is confirmed by email and also recorded on the website for future reference.

Going back to the doggy metaphor, gaining a centralised view of your customer across all channels isn’t a walk in the park, but your customers will thank you for removing obstacles between them.

Just in case the ‘Obama bounce’ fails to cross the Atlantic and relieve some of our economic woes, online marketers need to look to their laurels and focus harder than ever on servicing their existing customers in 2009. Here’s my top 6 resolutions for online marketers this year.

1) Don’t forget Pareto. His advice maybe 100 years old now but his 20/80 rule is one of the ineluctable truths of marketing; 20% of your customers are responsible for 80% of your income so segment and reward them for their loyalty and help them become advocates for your brand.

2) Make your website as friendly and easy to use as possible and make sure it contains lots of information. There’s been lots of development in how to improve online experience in the past 12 months so apply the latest techniques to ensure your website is super sticky.

3) Be clear about what you want your website to do and make the calls to that action clear. Websites are all about funnelling people to a certain outcome.

4) Clarify your email communications strategy. The market is seeing a lot more email being sent out with brands more comfortable with sending out three or four emails a month. However be careful that each message is unique and offers something not available on your website – otherwise customers may start to experience ‘email blindness.’

5) Differentiate or die, as Jack Trout dramatically titled book has it. Make sure you’re offering customers something they can’t readily get elsewhere. There are thousands of companies out there offering products and services online but it’s the ones who personalise their pitch and have great customer service that hold on to customers and even turn them into brand advocates.

6) Cycle more!

It’s Christmas and ‘tis the season for banging out emails and so amongst the work mail and penile related spam my inbox attracts are an increasing number of commercial offers from retailers I shop with regularly.

A lot of these are welcome – offering discounts on goods I often buy, from traders I respect. However there is a problem. Some offers are starting to arrive so frequently as to appear desperate and as any person being courted will tell you, the cologne of desperation is not an attractive one.

In contrast to the retailer offering hourly discounts on everything from their granny to the kitchen sink are those absent who won’t or can’t compete in the currently rampant discount market – their brand value stubbornly intact, at least until the year’s profit figures come out.

Of course it’s proving hard for retailers to steer a straight ship in these unusual trading conditions – the route is somewhere between the rocks of discounting in the short term and the hard place of not devaluing your brand over the long term.

To do this takes resource – one of the prevailing myths is that email is cheap – it isn’t, at least not to do well and it also takes long term strategic thought. Some retailers may be in the fight for Christmas but what about January, February & March? Rather than the 12 days of Christmas, retailers should be thinking in terms of the 12 months of Christmas.

It’s not just congestion zone stakeholders who are obsessed with traffic, so too it seems are some start-ups, and not in a good way.

I use a couple of web services, one is for builders (a service which is both creditable and painful). Annoyingly, when a builder posts a message against my enquiry I get an email or text message asking me to login to see it. This is a bit like a receptionist phoning to say they have a message for you and would you mind going down to reception to hear it. Why not just give them the message? Of course this has nothing to do with making the customer’s life easier and everything to do with boosting the website’s visitor figures.

People rapidly get fed up with this. What they really want is to receive information by their preferred channel – usually email and have the option to start a dialogue if they need to. This is essential in some sectors – for example restaurants where customers will often have questions they need answering before and after they book.

Start-ups (indeed all sites) need to understand that customer experience drives the success of the site and that increased traffic is just a by-product of that. Trying to recycle customers through the site will just lead to them cycling off.

In these unprecedented times, confidence it seems, is everything. A lack of it has had unbelievable consequences for some former giants of the financial markets and trickling down, smaller businesses now have to factor in the potential fallout.

Consumers don’t want to order something from a supplier that might be bought out, sold off or floated off on a bankrupt debt raft. To gain trust, the onus is on businesses to be open and inform customers if there are changes in ownership that might impact on supply of goods.

This is partly a question of nerve and whether businesses are looking at the long term picture. A failure to do this got the banking sector into trouble and it could cause retailers problems too.

Looking around at all the pre Christmas discounts available, it makes you wonder what everyone is going to do in January? If customers continue to be offered discounts everywhere, they’ll eventually consider that the norm and we’ll have devalued our own market.

We need to get our eyes back off our stumbling feet and on the near horizon.

It’s heartening to read this week that you don’t have to be a mega brand to survive the retail slump. A top ten retailers ‘survivability index’ commissioned by BDDO Stoy Hayward and Verdict published in The Times online this week features the expected big brands – Tesco, John Lewis, Sainsbury’s but also a few clever minnows – Howies, Boden and Fat Face.

Howies, which started life in 1996 selling T-Shirts in a mountain bike magazine, can be found at number 6 in the index, sandwiched between the mighty John Lewis and Waitrose. The reason Howies can compete in such esteemed company is that they have invested in developing a special relationship with their customers.

Howies are selling not just a good product but also a set of values their customers feel wedded to. Online, the shopping environment they’ve created has a community feel to it and this brand experience extends to their catalogue in which only half of the pages feature their products, the remainder being articles on subjects they think their customers will be interested in.

With consumers cutting down on non-essentials, businesses have to work hard to win ‘discretionary spend’ and it’s those online vendors, big or small, who can inspire their customers, giving them something they want rather than need, who’ll weather the storm well.