Archive for May, 2014

Shopper’s Stop – Loyalty Or Disloyalty Program?

Friday, May 23rd, 2014

AD-QR-SHOPPERSSTOP-01-13MAR2013Since I wrote Loyalty Or Disloyalty Programs? and Beware Of Losing Sales With Bad Loyalty Programs, a couple of companies have used technology in very innovative ways to design loyalty programs that truly foster loyalty.

But Shopper’s Stop is not one among them.

The pioneer of India’s organized retail industry recently introduced a mobile app variant of its First Citizen loyalty card. I went to the Google Play Store and downloaded the app. It installed without any problem on my smartphone. But, from there on, the enrollment process was full of friction: Fill a form, send an SMS, wait for a reply, enter the PIN code, yada yada yada.

Given the limited value of this app – it replaced only one of the several plastic cards in my wallet – it wasn’t worth my while to jump through so many hoops to activate it and I gave up as soon as I reached the form. Going by the reviews on the app’s Google Play Store page, I’m not alone. Some users reportedly abandoned the enrollment process even earlier.

Unlike Shopper’s Stop, popular mobile loyalty apps like Keyring and Apple Passport let people move their entire collection of plastic loyalty cards in a into a single mobile app. By doing so, they deliver the following compelling value to their users in a highly frictionless manner:

  • Ditch their fat leather wallets. Just for context, the average loyalty program member has 12-15 cards in America and 3-4 cards in India.
  • Earn rewards at a store they happen to visit even if they haven’t carried the store’s plastic card.

It makes no sense for Shopper’s Stop to develop a generic mobile loyalty app but the retailer could definitely draw a lot of inspiration from Keyring, Passport et al towards reducing friction from its loyalty app.

In a series of blog posts in the next few weeks, I’ll deep-dive into the loyalty programs of other brands that do a better job at building loyalty. Watch this space.

Omnichannel Fiasco #1: Standard Chartered Credit Card

Friday, May 16th, 2014

I recently went through two omnichannel experiences, one that started well but went downhill soon thereafter and another that was a disaster from the beginning.

Before I deep dive into my experiences, omnichannel is where a single business process is deliberately split across multiple channels so that each channel does what it’s really good at and every channel hop appears natural to the customer. Shopping behaviors like ROBO (Research Online Buy Offline), Showrooming (Research in store and buy online) and ROMBOW (Research On Mobile, Buy On Web) are a few examples of omnichannel. If you’re interested, click here to find out more about omnichannel.

In this post, I’ll describe my first omnichannel fiasco.

This was when I’d recently applied online for a Standard Chartered Bank credit card. After filling out my personal information, I came to the stage where I had to submit KYC documentation. Now, I know that you can scan documents and upload them online but I always have a problem with scanning passport, drivers license and any other document used for ID and address proof – the photophraph inevitably appears smudged. Therefore, I’m not a fan of online uploads of KYC documentation. Looks like I’m not alone since the portal didn’t have any UPLOAD DOCUMENTS button. Instead, it asked me to grant an appointment when someone from the bank would visit me and collect my documents in person.

This was the peak of my omnichannel experience. From there, things rapidly went downhill.

No one from the bank visited me on the said date and time. Several weeks have passed since then. I haven’t heard from the bank. I even tweeted a complaint but there’s radio silence from the bank’s side.

I’ve given up on my application. Since credit card is a buyer’s market, I can easily get one from any number of other banks. So, the loss is not mine.

In my next post, I’ll describe my second omnichannel experience that was a fiasco from the word go. Watch this space.

Three Reasons Why Conventional Résumés Are Thriving Despite LinkedIn

Friday, May 9th, 2014

res01I’ve been asked many times why, in this day and age of LinkedIn, I insist on job applicants sending me conventional résumés in DOC or PDF formats. Well, that’s not strictly true. I’ve been asked only twice, most recently by a man in Pune, Maharashtra*.

In my experience of helping a couple of customers with sourcing candidates for various sales, marketing and account management positions in their companies, I can cite at least three reasons why DOC / PDF résumés haven’t still gone out of fashion:

Travel Travails

People don’t always review job applications while sitting down in their offices. Many executives in the hiring company tend to attend to this inevitable backlog item when they’re traveling. Even in this day and age of 3G and 4G, there’s no guarantee that they’d have uninterrupted Internet access when they’re on the road. Under the circumstance, having to go online to look up a LinkedIn Profile is a non starter.

Email Rules

Hiring goes through profile screening, candidate rating, interviews, sending offers, receiving acceptances, and many more steps. Excel, Outlook and other office automation tools are used extensively during the process. This is true even in a company that has implemented a fully fledged HRMS system, since such systems are typically used only to store information about employees, not job candidates. The ratio of applicants to employees can be as high as 50:1, which makes HRMS unwieldy for tracking recruitment activities. While email is admittedly inefficient for exchanging status updates, evaluation reports, question banks and a plethora of other material involved in recruitment, it is used all the time – just as 70% of Fortune 500 companies have ERPs but over 90% of them use Excel to generate board reports. A DOC / PDF résumé suits this workflow better than LinkedIn.

res04

Data Mess

Many companies have started using ATS (Applicant Tracking System) for recruitment. Even then, the need for DOC / PDF résumés  hasn’t diminished: According to this TEC article, there’s so much inconsistency in data taxonomy and formats between such systems and LinkedIn Profiles that conventional résumés can’t be replaced by LinkedIn.

Therefore, as things stand, DOC / PDF résumés are here to stay.

LinkedIn gets this message, going by how it allows candidates to attach DOC / PDF résumés even when they’re submitting their applications directly inside its platform.

Job applicants ignore it at their own risk. A missing résumé could make all the difference between getting that interview call and finding their applications lost in the cyberspace.

* If Joseph Heller fans find a striking resemblance between the above passage and the opening lines of “Good As Gold”, they’re not alone! I hope the estate of my favorite novelist will excuse me for taking the liberty to paraphrase what is one of the most captivating starts of any novel I’ve read.

When Does Analytics End And Hair Splitting Start?

Friday, May 2nd, 2014

customer analysis-thumb-257x300With advances in Big Data, Internet of Things and other technologies contributing to an ever-increasing deluge of information in today’s digital world, analytics has once again become a hot topic.

But I sometimes wonder if there’s such a thing as “too much analytics”.

I’m not referring to “analysis paralysis” where no action results from all the analysis. I’m thinking of analysis that does lead to action. But action that starts to resemble hair splitting. (Not that there’s anything wrong with hair splitting per se).

I recently went through this “analysis or hair splitting?” debate in my mind when I read the following average figures for a checking account in this Bank Director article:

  • Balance: US$ 5600
  • Cost: US$ 250
  • Revenue: US$ 413

It doesn’t take a PhD in mathematics to calculate that the average profit is US$ 163. Therefore, it should be obvious to everyone that an average checking account is profitable for banks.

But not to the the authors of this article. They claimed that the average checking account “doesn’t pay for itself”. I pointed out their erroneous conclusion in my comment below the article. One of the authors emailed me to admit the faux paux, so I’ll let this pass.

But what really got my goat was the article’s assertion that averages don’t tell the real story of checking accounts.

Well, isn’t that true for everything? If averages told the whole story, who’d read the rest of the story?

Perhaps the best illustration of the misleading nature of averages can be found in this episode where a mathematically-obsessed but swimming-challenged guy drowned in a lake thinking he could comfortably wade across it because he was six foot tall and the lake was only four feet deep – on an average.

Anyway, proceeding with that platitude, the authors urge banks to take “action to cure the unprofitables and protect the profitables” by going beyond averages and drilling down to a more granular level.

There’s nothing wrong about this advice since FIs are under constant pressure from Wall Street / Dalal Street to trim their unprofitable businesses while simultaneously bolstering their profitable franchises. But, this is when analytics could morph into hair splitting.

Because the next question is, at what level should an FI carry out profitability analysis and recommend remedial action?

  1. Product level? e.g. Be happy if the overall checking account business is profitable.
  2. Geography level? e.g. Since checking accounts are unprofitable in rural areas, shut down all branches in villages.
  3. Account level, as recommended in this article? e.g. Close all unprofitable checking accounts.

angry_woman_megaphone_400To use consultant-speak to answer the above question, each bank should decide the optimum level for itself by evaluating the cost versus benefit of each additional level of analysis and the corresponding action it’d take from it.

Unfortunately, the classical business case approach is challenged by several qualitative factors – business ethics, reputation damage and regulatory rap on the knuckles, to name a few – inherent in this context.

For example, what happens if customers whose checking accounts are terminated unilaterally by banks because they’re unprofitable take to social media to vent their fury against the bank, the way Brett King did in a recent incident when HSBC USA canceled his account? The resultant public backlash could snowball into a PR crisis that could stop other – p0tentially profitable – customers shunning the said bank.

That said, I love analytics and, as I’d hinted at the beginning of this post, I’m somewhat ambivalent about hair-splitting myself. Therefore, I can’t resist the temptation of drilling down even one level below and proposing analysis and action at the sub-account level. Let me illustrate this approach with the following example:

On the whole, John Doe’s checking account is profitable but deeper analysis reveals that he uses ATMs a lot more than the average checking account customer, thereby adding more operating costs for the bank to service his account. Therefore, the bank should take remedial action to boost profits by weaning John Doe away from ATMs (while “doing nothing” in the case of other customers). 

In this pursuit, slapping excess-ATM-usage fees might appear to the most natural option but such a tactic might run afoul of the regulator.

Therefore, we suggest a different approach: Display a ghost-like image on the screen as soon as John Doe inserts his debit card into the ATM slot. Undeterred, if John Doe proceeds to enter his PIN number, replace the customary ATM usage instructions piped through the ATM speakers by blood-curdling screams.

Jokes apart, how do you draw the line between analytics and hair-splitting? Please share your thoughts in the comments below.