Analytics & Neuroscience

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We first wrote the piece below back in 2012 and it is interesting to see how everything predicted at that time has, in fact, come to pass. Ultimately resulting in the election victory for Donald Trump and the near-election victory for Jeremy Crobyn. The key point is about how you can use the fusion of data on rational and emotional measures of human opinions to predict what they do next. In reality the underlying basis of such modelling and analyses relies only on understanding the primeval instincts behind the “Fight or Flight” decision process so well-documented by anthropologists. But if you understand that process, and then align your data in the right way, you can make powerful insights into what people will like and not like, and do and not do. It even ‘predicts’ the findings observed in “behavioural economics”, which is itself the study of actual as opposed to ideal situations.

We begin in the 1960’s. It was the computer in the 1960s that changed the way that companies took marketing decisions. They were able to process masses of quantitative data, which promised greater scientific number-based decision making. Gradually this was enhanced by more and more data on buying habits – Nielsen Retail Audit data, Consumer Panel data from Audits of Great Britain (which went on to be what we known today as WorldPanel), then transaction data direct from retailer scanning systems and loyalty cards and the creation of mathematical models based on recorded behaviour, income, geography and anything else that could be tangibly measured. Then came the era of “Big Data”, fuelled largely by social media.

But much of this reliance on hard data analytics and hard data modelling to analyse and plan the marketing effort was focussed on the mechanics of the sale rather than on data to understand the psychology of why consumers buy. For most companies, the results that came from all the analytical work on the hard data were disappointing – marketing programmes didn’t quite deliver the expectations that the modelling said they should deliver.

By the 1980s, scientists were beginning to explore the brain and the way it handles information and makes decisions. Called neuroscience, this, combined with the resurrection of Behavioural Economic theory, not new but becoming fashionable once again, combined to create what is commonly known as ‘behavioural research’ and promoted as the only way to understand and predict consumer buying behaviour.

Of course, none of this is new – what goes around, comes around. Between the 1930s and the 1960s, it was known as ‘motivational research’. A term that we at RedRoute International prefer to use.

Classic economic theory works on the principle that we take rational buying decisions by weighing up cost against benefit and making a logical choice based on this. Of course, this is not what we do at all. We all, at one time or another, buy things we don’t need, at arbitrary prices and for silly reasons.

As America moved into the era of plenty, where supply outstripped demand creating competitive battles between brands for a share of the consumer’s wallet, advertising agencies in particular needed better insights into consumer preferences than they were able to get from quantitative data that polling techniques had been supplying since the late 19th century.

Then, in 1938, along came Dr Ernest Dichter. His development of motivational research and the insights he extracted from this changed advertising, brands and the fortunes of companies such as Proctor & Gamble, Chrysler and General Mills.

Dr Dichter’s principles were based on the theories of Sigmund Freud, formulated over a century ago. Of course, this meant that many of his insights had strong sexual connotations – not in itself necessarily wrong, but sometimes a bit odd. He explained that smoking was like sucking on a nipple; a phallic shaped lipstick sells more because it offers a subconscious fellatio; baking is an expression of femininity, pulling a cake from an oven being the equivalent of giving birth; and, perhaps oddest of all, to increase sales of typewriters they should be modelled on the female body so that the keyboard was more concave and receptive. Some people like to fantasise.

From 1946 and through the 1950s, Dichter’s business boomed as companies queued up for his insights and advice, but inevitably, like all charismatic salesmen with implacable self-belief, he went too far. He was hired by Pepsi to advise on their new television campaign. He told them that they must never show Pepsi served with ice, because ice meant death. Dismissed as bonkers, he was thrown out.

He sank into obscurity, a discarded guru, long before his death in 1991, his motivational research tools and techniques pushed out by the new science of analytics driven by ever cheaper computers and data storage. But the core problem facing brand owners is that all the data and all the analytics didn’t give them the insight as to why consumers preferred one brand over another. Human behaviour continued to remain mysterious.

Enter the new discipline of neuroscience, which, (surprise, surprise), came with scientific findings that concluded that it is emotion and not reason that drives purchasing decisions. The resurrection of ‘Behavioural Economics’ – which is not new, but the old ‘re-branded’ – takes us back to the days of Dr Dichter, but this time with men wearing white lab coats.

But before you get carried away with neuroscience or measuring the pupil dilation response to brand logos, just pause and reflect on what this little piece of history tells us.

Numbers without attitudes give you an incomplete picture; attitudes without numbers is the same. But having attitudes and numbers combined – that’s how you create actionable insights to help improve your business.

That, in turn, is the basis of RedRoute’s Marketing Effectiveness service. Using Attitudes and Circumstances to predict Behaviours using our Motivational Modelling approach that we call “Effective Net Preference” or ENP™.

The data sources you have at your disposal these days to do this are legion. What is needed is a process. RedRoute is working with the Institute of Promotional Marketing to understand the impact and ROI in Experiential Marketing using exactly this technique – and it is proving to be highly beneficial to agencies and clients alike. We also use it in our CRM service, OPIUM, where optimising insights into customer personas enables you to be your customer’s or your consumer’s best friend in the category. And, ultimately, it is used to predict future behaviour like, for example, when one of our clients asked us to predict the impact of the post-Brexit devaluation on their sales. The situation was new and unique and many people thought it was a hard task. Our models, however, produced predictions which the client later described spontaneously as “Spot on”. We’ll take that as an endorsement of our approach!

To find out more about RedRoute’s ENP model and how it is applied, just review our web pages or get in touch and we’ll be delighted to help talk things through.

Read more Schezzer’s Blog articles at
https://www.linkedin.com/pulse/analytics-neuroscience-schezzer-scheherazade/


Turning Nectar into Honey

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Many suppliers to Sainsbury’s, Tesco and other leading supermarkets and convenience stores already take advantage of the ability to target offers to identifiable shoppers to encourage trial and repeat purchase amongst particular customer groups.

Tesco Clubcard, Sainsburys Nectar Card, and schemes like Spar’s “Shop’n’Win” (which enables suppliers to target customers via their mobile phone using i-movo coupons) have been around for many years and are now well used by all the big FMCG companies.

Whether this drives brand loyalty or simply increases promiscuity is open to debate but the reality is that the answer to this question is entirely influenced by what you send to people.

I am not talking here just about whether you send them a money-off coupon. It is true that money-off coupons do not drive brand loyalty, they only drive trial. Worse still, they encourage existing loyal buyers to become less frequent shoppers – encouraging them to wait until they get a coupon or, even more damaging if you do extensive reductions, undermining their perceptions of brand value.

At this time of year, you will see many retailers fighting for “floating customers” by offering the lowest price they can on beers, wines and spirits. That is because alcohol is a “cross-the-road” category – people will readily switch stores to get the lowest price gin, whisky, vodka, brandy and so on. And they then bring the rest of the basket with them – which is fine for the retailer but the supplier who pays for the discount gets nothing out of the deal – in most cases they would have earned much the same overall revenue and profit (or even more) by not discounting.

Price discounting is a useful tactic for driving short term volume but it hardly ever pays back for the supplier unless it is supported by other in-store activity such as Feature and Display. We know this to be true because we have been working with suppliers to measure these effects for decades.

The new frontier, is collaborative CRM.

“Marketers at many manufacturers still do not seem to appreciate that retailer data gives them the opportunity to know exactly how loyal each of their individual consumers are to their brands and to their companies within that retail channel. And not just in aggregate, but person by person.” That is the view of RedRoute CEO Steve Messenger. “Instead of using the opportunity to communicate with customers to actively manage their level of loyalty to both the channel and the brand, almost all only ever seem to use it to deliver ‘one-dimensional’ money-off coupons. This is a travesty.”

It is well known that the supermarkets have for sometime been targeting offers according to the consumer’s past purchases and attempting to get them to “trade-up” or try new products by offering bigger discounts to switchers. Tesco even went through a period of offering, at those stores facing high level of local competition, to redeem vouchers issued by other supermarkets. All this does, however, is simply encourage consumers to shop around.

According to Steve Messenger, “Instead of rewarding them for their disloyalty by sending them money-off coupons, FMCG manufacturers could dramatically increase the returns from their marketing spend by rewarding customers for their brand and channel loyalty over time, which they can do as the data allows the retailers to track spending person-by-person.” This would work, he says, by retailers and manufacturers rewarding people for their loyalty to the manufacturer’s brands, and the channel they purchase them from, retrospectively once a year or once every six months.

“It’s a clear win-win.” says Steve Messenger. “And it is the most effective way to offer differential value to consumers as you can reward loyal customers with added value items that cost you less than a price discount whilst only offering price discounts to those that are looking for them. It works for the retailer as well because they can reduce the reward costs for their loyal customers whilst still incentivising potential store switchers.”

Such cooperation is already happening in some places but we are always surprised it is not now extremely commonplace. “The manufacturers and retailers have much more to learn about how to work together to get the best out of these new data sources” he concludes.

RedRoute has been combining market research with customer transactional data for many years and have uncovered many insights from this work. “We now know that there are five key dimensions to providing effective customer loyalty management. Relevancy, Association, Accessibility, Value for money and Expected satisfaction are these 5 key dimensions. And they abbreviate to “RAAVE” – which is what you want your consumers to do about your product.

Using these five dimensions we have been able to show clients how to actively manage consumer loyalty at the one-to-one level, not just give away coupons, and have shown that the result is far more profitable both for the manufacturer and the retailer.

We have many case studies we can show, based on data from companies such as Sainsburys, Homebase (as was – Bunnings have scrapped the advantage they had), Carphone Warehouse, Viking Direct, East, Spar and many others.

The net increase we have found to exist is an increase in loyalty rate – i.e. the number of times out of ten that they choose your brand rather than the competition irrespective of short term discounts and other interventions – of more than 50%. That is a noticeable increase in brand share which not only outlasts the length of the activity but achieves it without giving away anything like same level of discount.

Sound interesting?

Then check out our web site to see some case study examples and / or contact us for more info. and we will help you turn Nectar into Honey.

Read more Schezzer’s Blog articles at
https://www.linkedin.com/pulse/turning-nectar-honey-schezzer-scheherazade/


The Art of Event Measurement

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Link to the live discussion

Recently I had the pleasure of being a panellist on the panel ‘The Art of Event Measurement’. During this panel Graeme Coombes, Tom Lovegrove and I discussed how to measure ROI on event measurement, for a client. ROI cannot always be measured in terms of money. Knowing how to measure ROI, and being able to show this to a client can improve loyalty, and therefore strengthen a business, and is thus a key element to any marketing company.

In the video we also discuss the effect of GDPR- and how this will protect a company and consequently make their experience with you better. Furthermore, we talk about the future of data science, how to collect this data (e.g. collecting data as a natural by-product of an event) and how this data should be influenced by the desired outcomes of an event (e.g. quality of the event vs size of the event).

Additionally, we discuss possibilities to make the events themselves better, for example training exhibitioners, finding the route objective for the event and ensuring to deliver against spend. By ensuring the events and the feedback produced by these events are of high quality it will ensure loyalty of customers, improve the reputation of a company and therefore improve business.

Read more Schezzer’s Blog articles at
https://www.linkedin.com/pulse/art-event-measurement-schezzer-scheherazade/


How to be happier

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Our brain is constantly rewriting memories- therefore trying new things, going out of our comfort zones and developing ourselves as best we can, will help us to expand on memories. Bad memories are suddenly seen from a new perspective and become more positive; our already happy memories grow in their importance and significance to how we view ourselves as today. All experiences and memories make us who we are today, so it is important to look back on the past positively to help us develop as a person.

It’s also important not to rely on our brain to rewrite these memories. Addressing painful memories in which you have felt hurt or lied to can be painful. However, by facing them directly, and even the people who caused them can help you deal with the memories and the pain associated with them. By doing this the memories become less painful, and less significant to you, allowing you to give greater significance to positive parts in your life.

It is of great significance to create new memories. It is important to live for today, ensuring that all the new things you bring into your life help you develop into a more positive person. Trying to live without expectation for tomorrow can help benefit when that day comes as there is no opportunity for disappointment. It is important to remember that life is a journey, not a race. Making time to laugh, have fun and sleep in your day ensures that your needs are fulfilled. A lack of sleep makes you more vulnerable to negative emotions as it is harder to rationalise all the different ideas following through you day. Therefore enough time should always be put aside to rest and rejuvenate.

Remember that everyone has their own problems, and whenever you struggle you are not alone, or weaker than those around you. It is not a weakness to feel pain, or to be apprehensive to trust others because of the people who have lied to you in the past. But, we should use these memories to grow. By taking a negative memory and focusing on the positive can help us to have a whole new positive outlook on life. For example, do not let ignorant, rude people in life bring down your mood, but appreciate the positive things they have provided, for friends you would never have met without them.

When you focus on your problems you have more problems. When you focus on your possibilities you have more opportunities.

Read more Schezzer’s Blog articles at
https://www.linkedin.com/pulse/how-happier-schezzer-scheherazade/


Just because we can doesn’t mean we should!

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The attraction of new technology is often beguiling. David Mattin, Head of Trends and Insights at commentators trendwatching.com, has long advocated that the failures of technologies such as Google Glass was because they failed this basic test.

Allowing the technology to dictate what is launched to the world can sometimes yield success, but as the evidence of the high percentage of failures shows, often the hype exceeds the hope.

David Mattin argues that innovation must always think about people first and, more importantly, develop things where the benefit in terms of ease of use outweighs the cost and hassle of using it. Things like “Amazon Dash” seem like a good idea to some people and there may be a niche but widespread use seems unlikely. By contrast, Alexa, which has many multiple uses, will appeal to more of the people more of the time. And that is key.

Mattin recommends that innovators and start-ups should always view technology through the lens of ‘deep human needs and wants’, not through the lens of technological possibility. That is easy to say but somewhat harder to do without conducting market research. But market research has an issue.

Designing research studies for products or mobile phone apps that do not yet exist, may require the need to get respondents to think about doing everyday tasks in new ways to how they do them at the moment. Sometimes that is easy – it is not a big step to tell an electronic assistant to order a pizza versus speaking to someone on the phone – and the benefit in terms of time saving from not having to find the phone, dial the number, wait for the call to be answered, and then negotiate with someone who is capable of totally independent thought and of unknown intellectual competence is clear and tangible!

The question is whether there is a more straightforward way to judge the likely marketplace success of the product or service you are looking to develop. And, of course, there is.

Marketplace success is driven by five key elements – known as the RAAVE drivers.

  • Relevancy – Do I need this?
  • Association – Is this something or a company I would like to be associated with?
  • Accessibility – Is this easy to use and can I afford to use it?
  • Value – Does the benefit outweigh price and hassle involved in using it?
  • Expectation – Will it do what it says on the tin?

If you want to know whether or not your next venture will be a marketplace success then judge it on research that tells you the answers to these five questions – both in absolute terms and relative to the competitors you are up against, both old and new.


If you out-score the competition on these five criteria then you will be likely to have a success on your hands.

Lag behind on one or more of them and you may have a problem.

Success is never guaranteed as the world is dynamic, but knowing your score on these five dimensions will ensure you stack the odds in your favour.

Read more Schezzer’s Blog articles at https://www.linkedin.com/pulse/just-because-we-can-doesnt-mean-should-schezzer-scheherazade/


Post-Recession Priorities for UK Consumers

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Back in September 2013, in an article published in Marketing magazine, Andrew Curry, a Director at The Futures Company, said that the post-recession consumer will, for some years to come, have a very different set of priorities. His key points were that they would be:

- More cautious attitudes towards debt
– Wanting increased social connectivity (and the support network that engenders)
– Have greatly increased intolerance of “rewards for failure”
– Looking for value, not cheapness
– Needing assurance (in an increasing uncertain world)
– Seeking “purchase decision process simplification”

RedRoute’s view, by contrast, was that these were not that different to the priorities they had before the recession and that, in fact, the historically low level of interest rates may actually encourage borrowing.

What we said instead, in our article on 25th November 2013, was that the best way to understand the future demand for your business is to use the five key drivers of customer preference as we explain further below.

Looking back at what has happened since the recession, we can now see that consumer debt has actually grown continuously since 2013, as shown by the chart below taken from the Guardian article by Phillip Inman and Caelainn Barr, published on 18th September 2017 (“The UK’s Debt Crisis”).


The following extract from their article gives the context to this rise:

In 2007 unsecured consumer debt – mainly on credit cards, store cards, loans and overdrafts – peaked at 45% of household income. In the years immediately following the financial crash, households were more inclined to kick their credit habit. Saving increased and borrowing declined, as the level of unsecured debt fell to 35% of income by 2012. But since 2012 households have increasingly failed to clear their credit and store card bills at the end of the month. High interest rates on those cards had sent their debts rocketing and the OBR [the Office for Budget Responsibility] now predicts unsecured household debt will reach 47% of income by 2021.

Bank of England figures show unsecured consumer credit jumped 4.9% in the past year when adjusted for inflation. The total increased from £192bn (in today’s money) in July 2016 to £201.5bn in July 2017.

This marks a slowdown on the previous two years when growth hit 12% and inflation was almost non-existent, but maintains the trend for UK GDP growth to come almost entirely from an increasing population and consumer spending with borrowed money.

It wasn’t supposed to be this way. The government’s official forecaster, the Office for Budget Responsibility, once predicted that the UK’s economic revival would be built on the foundations of business investment, higher exports and an improvement in productivity that would lead to higher wages. It didn’t materialise. Instead a mix of low wages growth, government cutbacks on welfare and public services, and more recently the uncertainty created by the Brexit vote have forced millions of households to borrow to buy essentials.”

So old habits die hard, both for businesses and for consumers.

As for social connectivity, well in one sense – the use of social media – that was more-or-less a one-way bet. As the “internet of things” connects more and more devices in ever more ingenious and seamless ways, people become connected whether they want to or not! But things are changing.

Social media is increasingly being brought into disrepute and there is growing calls for further and further regulation. In a similar vein, the “sharing economy” is also coming under fire for being “unsocial” – with rulings against Uber growing around the world typifying the pressures.

With regular stories about “fake news”, “the need for authenticity and objective verification”, and stigmatism emerging with regard to “online cliques” with self-reinforcing narrow views, the future may look very different to the one envisaged back in 2013.

Our prediction is that, ultimately, Facebook and YouTube will be re-classified as publishing houses not software platforms, because that is the easiest route by which society will wield the pressure to get them to take responsibility for what appears on their services.

In the short term, whilst new regulations such as the General Data Protection Regulations (GDPR) which are being introduced from May 2018, are seeking to ensure companies of all sizes take greater care of personal data, people in general have already lost confidence in the security of data held online. That will lead to changes in behaviour by individuals which, encouraged by GDPR, will to lead them to be much more cautious about what they share online and what permissions they give.

Again, not quite the outcome anticipated. So, what about less tolerance of “Rewards for Failure”?

Unfortunately, the outcome on that score is not that good either. As Kara Scannell and Richard Milne reported in their article in the Financial Times on 9th August 2017, there have been hardly any prosecutions for malpractice resulting from the Financial Crisis and, worse still, the proposed “stronger regulations” on everything from Bankers Bonuses to Trading Rules and Financial Robustness requirements have gradually been quietly either reduced or completely eliminated. Meanwhile we see stories in the paper about earnings and payoffs for senior roles in the public sector that seem way out of line with those of the workers responsible for delivering the services.

To quote from the article by Scannell and Milne:

“One of the enduring mysteries of the 2008 financial crisis has been why the Justice Department made so few attempts to prosecute the individuals responsible for it, given the abundance of tangible evidence of wrongdoing by Wall Street bankers, traders and executives in the years leading up to the great unwinding.

The authorities …take pride in the “record-breaking” amount of money collected from the banks in the form of civil penalties. But forcing big banks to hand over their shareholders’ money in exchange for burying forever the evidence of wrongdoing is not nearly the same as holding people accountable for their behaviour.”

And not to mention any efforts to return the gains they walked away with which ultimately everyone else paid for.

On the quest for value for money, that is a perennial desire and it did not start in 2012. In fact, one of the things we find in our data modelling is that despite what everyone says, price elasticities do not “increase during recessions” except in a purely technical sense. What changes is the ability to spend at any level of price due to the reduction in real income.

If you want to predict how well your company will do in the marketplace in the future then the most predictive measure is what we call “Effective Net Preference”. ENP is a “balanced scorecard”-measure of the five key dimensions that influence customer purchasing behaviour (both consumers and businesses). These five dimensions are:

Relevancy (right solution)
Association (right image or brand identity)
Accessibility (perceived – and actual – obtainability)
Value (right cost-benefit trade-off)
Expectation (expected reliability that the brand promise will be delivered)

Value for money is one of these five.

Interestingly, though, each of the items listed by Andrew Curry are all part of one of these five dimensions. Consider:

Taking on debt is simply about “Accessibility” – what you can afford. And “simplifying the purchase process” is again about the preference to use services that are quick and easy. Which is why services such as Just Eat have been successful.

Social connectivity is about the need to be accepted socially – and one way to achieve that is to buy brands you are proud to be associated with. Feelings of injustice, by contrast, will mean you avoid companies that you believe do not “play fair” – and that is where brands like Uber are coming unstuck.

Meanwhile the need for assurance has been met by many online services from Trivago, to TripAdvisor to moneysupermarket.com, to uSwitch, and ultimately to meerkats… who now personify the concept of trusted advisers.

So, if we analyse the winners and losers in the post-recession years we can see how the winners are the companies that have been delivering successfully across each of the five key drivers. The losers are those who have underperformed on one or more of those.

The companies that are under threat – and that includes Facebook and Google – are those who are not in control of their performance on all of those five drivers. Think Uber as a classic case in point. Expect Deliveroo, Airbnb, and other services that are not in total control of the service they provide as potential risks for the future.

The priorities for the post-recession consumer are Relevancy, Association, Accessibility, Value and Expectation – or RAAVE for short. If you want your customers to be your “raving fans” in the years ahead then concentrate on tracking your relative performance on these five dimensions and you will succeed. Ignore them and you trust your future success to decisions that are beyond your control.

For more evidence on the power of ENP and the RAAVE metrics contact us for further details.


Is Big Brother alive and well and living in your fridge?

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Back in 2009 we wrote a blog post called “Is Big Brother Alive and Well and Living in Your Fridge?”  That was long before people were talking about “the internet of things” but now that the topic is back in fashion we’d thought we’d re-publish it!

Enjoy!

What is the only appliance in your house you are unlikely to ever switch off? Your heating? Your TV? Your computer? Your broadband?

If you think about it, the most likely “always on” device in everyone’s home is their fridge.

So, if your fridge has a mobile wireless internet connection (probably paid for by the fridge manufacturer rather than you) it could become a key hub within your home for all sorts of applications from automated home controls to CCTV. This is quite apart from all the commonly discussed aspects about it being able to send shopping lists to your grocer (and then telling your robotic assistant when they’re ready to collect).

Have you bought a new fridge lately? Ever checked what electronics it has built-in that you might not know are there? In future that could become a decision-criteria on what fridge you buy.

Now the scary part. What if it had a built-in web cam?


AIME Tracker Launched at CX Summit, London, Oct 15th & 16th 2014

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Steve Messenger, Robert Whiteford and former Office Deport Business Insights Manager, Tony Dobbs, launched the RedRoute AIME Tracker service at the CX Summit in London on Oct 15th and 16th 2014.

AIME stands for Analysis and Improvement of Marketing Effectiveness and the AIME Tracker measures the most important brand metric you have never heard of – Effective Net Preference (ENP). This measure is predictive of future brand sales, customer loyalty, willingness to recommend and (hence also) future underlying average NPS performance.

Based on more than 15 years of analysis of combined market research and customer level transactional data – in sectors ranging from supermarket shopping to supersonic travel – the RedRoute ENP model of customer preference and loyalty is both very robust and extremely valuable.

Our launch presentation, which includes case study examples from supermarkets, office supplies, DIY home improvement, and telecoms, is available from the conference organisers via this web link http://www.wplgroup.com/aci/conferences/eu-qcx1.asp or from the “Treasures” section of our corporate web site (it’s free to register and then simply view online by going to the “Free Stuff” tab and clicking on “AIME Tracker Launch Presentation”.

You can also read our AIME Tracker White Paper by clicking this link: http://www.redrouteinternational.com/downloads/AIME_A-new-tracker-for-a-new-age.pdf

The AIME Tracker was very well received by the audience at the CX Summit with many delegates requesting further information because it is entirely consistent with the NPS approach and, like the NPS method, can be easily and cost-effectively deployed whilst providing maximum leverage. Moreover it can use data from any source or combination of sources: conventional surveys, Tweets and Social Media posts, call centre interactions, and customer emails. It provides the best, most well-structured and most comprehensive review of decision-maker opinion, compiled in a way that predicts actual future behaviour most reliably.

To find out some more about the methodology behind the service you can also view this training video at http://www.youtube.com/watch?v=4A5AO7NHp3s

If you are interested to know how it could be used in your own business then contact us either by phone or email.

Our contact details are here: http://www.redrouteinternational.com//contact.php


Most Strategy is Actually Nothing of the Sort

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According to management consultant Alastair Dryburgh, most “strategy work” is simpler than many consultants and academics would have you believe.

When you engage in ‘strategy’ you are not re-inventing the company, redefining your industry, or creating the next Facebook.

You are simply looking at what’s going on in your markets to identify what customers (mostly your existing customers) are likely to be asking for in the future. You are looking inside the company to see where you are making money and where you are not. Often, you end up with something quite like what you already have, with some parts expanded, others shrunk or eliminated, and a few things added.

Recognise this and you will see that you probably already have all the strategic knowledge you need. The value is not in radical new concepts or techniques, but in the ability to see clearly and act accordingly.

Alastair Dryburgh is chief contrarian at Akenhurst Consultants and author of the book “Everything You Know About Business is Wrong”


Tesco Woes Predicted by NPS as Early as 2011

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Back in 2011 Tesco was still riding high with over 31% market share but even at that stage it was the only one of the big 4 supermarkets to have a negative NPS value. Moreover, the 2011 NPS scores for each of the top 4, as measured at the time by research company PRmoment.com, proved to be a very reliable to their long term market share performance, as can be seen below.


The problem with NPS, however, it that it is does not, of itself, tell you what the problem is. For that you need underlying diagnostics. In Tesco’s case we can find such evidence in the general YouGov tracking study, BrandIndex™. As can be seen in the chart below, the tracker showed how perceptions of value had been falling like a stone throughout the whole of 2011 and by 2012 Tesco was being rated the worst of all the major supermarkets.


Tracking your NPS but only having individual customer feedback to help diagnose what the big issues are means that companies can fail to get the big picture and take the right strategic steps to correct the problems.

That is where RedRoute’s AIME Tracker gives companies a vital edge. It tracks the 5 key aspects that determine whether customer prefer your service to the competition. Its overall metric, Effective Net Preference (ENP), not only explains movements on NPS but also predicts them. So you know what the causes of your low NPS are, whether it makes a difference to your sales, and in what direction it is likely to move in the future. It is based on the five dimensions shown below:


More colloquially, these five dimensions can be thought of being customer perception of whether your offer provides:

- The Right Solution from
– The Right Brand for
– The Right Effort for
– The Right Value in
– The Right Way

To find out more, come along the Customer Experience Summit in London on October 15th and 16th and see how our analysis of the Tesco situation and how you can avoid similar problems when using managing your NPS programme.

Steve Messenger
Director
RedRoute International Ltd