How The Fairmont San Francisco Messed The Bed

June 28, 2016 by Johnny Russo Leave a Comment

In the last 7 months, my wife and I have stayed at a Fairmont property 3 times.

The Fairmont is one of the most popular luxury hotel chains, and takes service to a whole new level, including calling the instant you enter your room to make sure everything is ok. We have stayed at the Fairmont in Montebello, Quebec and the Fairmont in Lake Louise, Alberta. Both of those properties are stunning and tranquil, extraordinary, yet with a boutique feel.

Fairmont San Francisco Early Check-in Fee: $75

So when a Google event was being hosted at the Fairmont in San Francisco last May, I was looking forward to the stay. It’s also at the top of San Francisco on Mason Street, which presents beautiful views, yet is also hard to navigate with steeps sidewalks that make your calves burn.

Anyhow, we got there at 10:00 a.m. after a weekend in Napa, which, granted, is way earlier than normal check-in. The lady at the front desk politely told us that our room was ready, but there was a $75 charge if we wanted to take early possession of the room. Since it was a company expense, we wanted to be fair and passed on the pricey early check-in, leaving our luggage with the concierge, and taking in the sights and sounds of one of the greatest cities in the U.S.

Good News: the Fairmont has Gone Digital

When our room was ready, we got a text saying we could now check-in (loving the Fairmont’s digital mindset. Their lobby bar also uses tablets as their menus).

We checked in a little while after receiving the text.

The next morning, I received a text asking how everything was, and asking me to rate the experience thus far, on a scale of 1-5, in which 5 was excellent. I shot back a text minutes later with a score of 3.5. I was not trying to be difficult or harsh, but I thought that was more than fair.

Service Fail: an Apology, But Nothing Else

They immediately apologized and asked why it was a poor experience. (You get the picture of their high standards). I assured them it was not poor, but that the room had a terrible view and the toilet made noise for a few minutes after each flush. Also added the fact about the early check-in fee for a room that was already ready.

And here was where they could have been customer service heroes.

They could have asked to upgrade me to a room with a nice view (I did mention it was our third time staying at the Fairmont in the last few months). Maybe there were no rooms left? I believe they did have availability, but say they didn’t. They could have done something special, perhaps a voucher for a restaurant, or a voucher for a potential next stay. But they simply apologized, missing the chance for me to become an evangelist, like I am for the Fairmont Montebello and the Fairmont Lake Louise, where the staff went over and above our expectations.

Customer Service Lesson For All Brands

As Damon Richards once said: “Your customer doesn’t care how much you know them until they know how much you care.”

There’s a lesson here for brands. We all say we take customer service very seriously. But brands that action that statement better, win more.

The Fairmont San Francisco is very, very nice. They just missed a chance to hit a homerun when the situation presented itself.

Tell a Story, Then Grow – My Etail Canada Keynote

May 29, 2016 by Johnny Russo Leave a Comment

Etail Canada took place from May 16-19 in Toronto, bringing together top retailers in Canada, as well as some of the brightest Digital Marketing and Ecommerce leaders in the field. It was the 5^th edition of the Etail Canada event, part of the WBR events series, and was one of the best.

I have the pleasure of being on the Etail Canada Board of Advisors. I also had the pleasure of being asked to speak on Day 1 of the event, and be the Chairperson for Day 2.

The name of my talk was Tell a Story, Then Grow – Twitter-worthy Stats and Benchmarks. It detailed some industry benchmarks where retailers should be in their digital journey, with many of the statistics focused on Canada.

I thought it would be useful to highlight the 5 key slides from my presentation, especially for those that could not attend.

5 Key Notes From My Etail Canada Session

1. Digital Marketing Spend in 2015

Probably one of the more useful takeaways from my Etail Canada talk was the topic on Digital Marketing spend. We all want to know where we stand in relation to other retailers’ spend. And these benchmarks from Listrak help us do just that. So this may look slightly different than how you may be spending on your Digital Marketing channels, but on average, retailers are spending over half their budgets on Search Engine Optimization and Search Engine Marketing. Talking to peers, this is actually quite accurate, give or take a few percentage points. The next largest channels in terms of spend are Email (14% of budget), Social (12%), and Affiliate (11%). Surprisingly, Mobile is only at 5%. Expect that number to grow significantly in the next 12-24 months.

I guess the point to take away from this data is if you are drastically over or under spending in one of these channels compared to the benchmarks, maybe you want to have another look at your spend levels.

Some more good news for digital marketers: eMarketer estimated an increase of 17% in 2015 digital marketing spending levels over 2014, so you should be seeing a growth in your digital spend. So ask yourself: did your 2016 digital spend grow by at least 17%? According to the benchmarks, it should have.

2. Mobile Commerce: The Rising Superstar

Still on the topic of mobile, don’t feel too bad, mobile conversions are a struggle in many places. But nowhere is there a better story of mobile’s success than in Asia.

When it comes to Mcommerce, the U.S. is actually not a global benchmark. According to Soasta, in the U.S., currently only about 15% of online transactions take place via mobile devices. In Japan, South Korea, and even the UK, that number is approaching – or in Japan’s case – exceeding 50%.

Mobile commerce conversion rates are climbing as well. Again, we can look to Japan for an idea of where this trajectory is headed for North American shoppers. Currently, mobile shopping in the U.S. has an average conversion rate of almost 2.5%. In Japan, the average mobile conversion rate is more than 9%. The U.S. will catch up here, and that will trickle slowly down into the Canadian market, where mobile conversion rate for the most part is below 1%.

And if we don’t think mobile will turn into a transactional channel, we’d be wrong. According to ABI Research, Mobile commerce will account for 24% of overall Ecommerce revenues by the end of 2017.

And if you think of Ecommerce growth vs Mobile Commerce, we are simply at the beginning of this Mobile Commerce disruption. According to comScore, Ecommerce as a whole is growing at 11%, but Mobile Commerce is growing at 47%.

Mobile shopping adoption has been lagging, but it seems to be on the verge of breaking through.

3. Digital Influence on Shopping…Up, Up, and Away!

While traditional marketers will tell you that traditional media still plays a role in shopping research and influence, it can’t be argued that the pendulum is indeed swinging over to digital, and if they don’t join, they’ll be hit by it.

Scott Galloway, an NYU Marketing Professor and retail guru, gave a great talk called The Death of Pure Play Retail. In it, he mentioned that digital influence on shopping behaviour is currently at about 50%. In 2017, that is forecast to be 80%. Think about that. If your budgets and time spent preparing for this are not following that trend, your brand may not survive. You must fight for that shift to occur with your brand. You may need to change mind set and culture, but the research is there to support it.

As technology continues to advance, it has been equally influential in changing the way consumers are shopping – before, during, and after store or online visits.

4. Conversion Rate is a Silo Metric for Multi-Channel Retailers

Should I repeat that? Yes. Ecommerce conversion rate has become a silo metric for multi-channel retailers. Why? This probably warrants a full blog post on this topic, but many retailers with brick and mortar stores not only use their websites for online transactions, they use it as a drive-to-store vehicle or research (product, store hours, price, etc.) avenue. So in short, lots of that traffic is not there to convert online, but they are interested in visiting a physical store and shopping there.

2.5% is the average conversion rate for the Internet Retailer Top 500 (mostly made up of U.S. companies).

Now, if I ask many of you reading this in 2016, if you’re hitting that, the answer is likely no. And that’s ok, because this number is mostly U.S.-based and also includes pure play.

So is conversion rate as we know it outdated as a main KPI for multi-channel retailers? Interesting debate and I think the answer is yes. Is attribution a more important metric for the future of retail? It may just be. So how does digital influence in-store sales and traffic and vice versa? As we saw above, digital has about a 50% influence on in-store traffic. That’s a good business case for more Omni-Channel or Digital dollars.

The future of retail is measuring the contribution that one experience or channel has on the next experience, whether or not the customer converts in the original channel.

5. Ecommerce Employee Growth: 27% Year Over Year Since 2012

If you’ve ever asked for headcount, the image above generally depicts how it goes with HR. I know I’ve been hit with my fair share of chairs. While it should be, hiring before we need to is not always an option, especially in retail. And while those of us in this industry may know of the digital growth taking place, your HR teams may not. So it’s important to educate them and senior management on the shifts in budget, increases in online traffic and sales, and the complexity of this industry.

According to the Internet Retail Top 500 Guide year-over- year growth of Ecommerce employees since 2012 is about 27%. So if you are a team of 4, did your team grow by 1 team member? If you have a team of 10, did you plan for 3 additional people? If you’re team is 25 people, you should be hiring about 7 people. Other retailers who are your competitors are doing just that.

We often take for granted that our bosses and our senior leadership teams know the exact nature of the digital disruption that is taking place. But we are in the thick of this digital disruption, they are not always privy to some of the info we have. So we are seeing shifts possible before some senior leaders or traditional marketers or brands recognize them. It’s our job to tell them why we need to adapt; it’s not their job to tell us. That’s why they hired us!

Are any of the benchmarks listed above totally different than what you’re seeing? Which ones are on track with what you’ve seen in the last 12-18 months?

Achieving Ecommerce Buy-In Within Your Organization (Video)

March 12, 2016 by Johnny Russo Leave a Comment

My Interview With Marketing Sherpa at IRCE 2015

The Internet Retailer Conference and Exhibition (IRCE) show is one of the best conferences on the Ecommerce and Digital Marketing circuit. It takes place every year in the month of June, usually in Chicago, one of the great cities in North America.

During the 2015 edition, Marketing Sherpa asked me to sit down with them for an interview centering on achieving Ecommerce buy-in within your organization. I sat down with Courtney Eckerle, Reporting and Managing Editor for MEC LABS/Marketing Sherpa.

We spoke about team-building, process building, being agile, digital culture shifts, winning most of the time but leaving room for testing and failure, incremental improvements, and just doing it.

Here is the full interview on achieving Ecommerce buy-in within your organization from IRCE 2015:

When Loyalty is Right for Your Business

December 24, 2015 by Johnny Russo Leave a Comment

Loyalty. It’s a term that has a lot of buzz, but plenty of fizz. Every company wants loyalty from customers, and many believe loyalty programs are the way to go. And customers scream back that they have enough programs they are a part of. But do they have enough good programs? Before we talk about how, let’s talk about why or if you should have a loyalty program, with a specific focus on the B2C segment.

When and Why You Need a Loyalty Program

There are a number of reasons why you may want to invest in a loyalty program. Here are the top 5:

Frequent shoppers: If you have frequent customers but very little differentiation in your product (coffee, grocery, etc), it may be a necessity to have a loyalty program. Think of the success Starbucks has had with its loyalty program. Many people are loyal to them just to get additional stars, levels, or because they can pay with their phone (innovation in loyalty for sure). If customers come shop at your store or site once every few years (think of cars or computers), maybe a loyalty program is not the first thing to check off your marketing wishlist. But that’s not to say it would be wrong.
Keep customers from defecting: Whether because of price, service, or product quality and selection, your customers have thought about leaving you for the competition. So all things being equal, and not wanting to get into a price war (unless that’s your thing and you’re Walmart), you should start thinking hard about creating loyalty amongst these customers on the edge of churning. I think we’ve all been to gas stations and chose them solely for the price they showed, regardless of the quality.
Increase top line: Some loyalty programs work great at incentivizing customers enough that they either buy more frequently, or they buy more (as in items per transaction). Victoria’s Secret or Sephora’s loyalty programs come to mind, as does Shoppers Drug Mart/Pharmaprix’s Optimum Program. You want to get free gifts or more discounts sooner, and you will add more items to your cart to get them, virtual or otherwise.
Need for data: Loyalty programs are known by brands as a great way to obtain data. They exchange the chance for incentives for a better view of their customers – what they shop for, when they shop, when they are latent, whether they are bargain hunters or fashion seekers, etc. Loyalty programs can be instrumental in getting good data on customers. So if you’re struggling with obtaining quality data, a loyalty program may be the quickest way to fix that. Think of your favourite grocery chain, where you probably shop once per week, and the little data they have available on you unless they have a loyalty program.
Attract new customers: Loyalty programs are often used to acquire new customers, often times with a large incentive at sign-up. We all know that attracting new customers can be difficult and costly. But positioning a hefty incentive in front of a customer for purchasing from your brand or switching brands can be a huge windfall of savings in marketing acquisition campaigns. Think of RBC and their Avion program, where you get thousands of points just for signing up to their credit card.

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Stop The Archaic Sales Pitch!

October 11, 2015 by Johnny Russo 2 Comments

First off, my apologies to all my sales friends out there, and also to the awesome sales people who truly understand relationship building. This post is not aimed at them.

I can’t pinpoint when it all started to go downhill, but I assume that Linked, social media, and the fact we all have websites has made it easier to get in touch. There is also more information out there on potential prospects then there has ever been. And therein lies the problem. With more info at sales peoples’ disposal (for the sake of this post, I will loop you all in together), their selling habits have not changed.

They are aggressive on first touch point. They know very little about you or the company you represent. They throw out numbers that have little true meaning. Or they offer a client roster that is irrelevant to your business, industry, or department. And they over-confidently ask for budget or the sale way too early.

So let’s get started on what annoys us – your potential prospects – the most.

**Change the *!c%en Font!**

Through discussions and informal polls of what irks us as digital marketers and Ecommerce professionals the most, none is further up the list than the template email. Here is what it looks like. “Hi Johnny…” which is followed up by a 2,000 word novel that borders on a diatribe throwing out some industry terms like ROI, SEO, SEM, and social commerce. There are a few flags as to why we know this happens (so listen up, and fix this, pretty please).

The “Hi Johnny” font and font size are completely different than the text that follows. (Sarcasm coming). Well done on the copy and paste.
You have forgotten to insert the current company I am working at, so for instance, instead of writing in “Bentley Leathers,” it reads “insert company name.” Or possibly worse, you call us by the wrong name (damn CRM system) or insert the wrong company name.
Your sign off name is a completely different font than all the text above.

I understand. You are likely using a marketing automation tool to get this all done. But if you can’t make the effort to personalize the experience, then why should we take the time to respond?