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How to lower staff turnover

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Getting to know cannabis consumers PM 4 0 0 5 0 8 0 3

vol. 33 • No. 1 • January 2020

The Authority on Data-Driven Engagement & Operations

Canada 2020 and beyond

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❱ 10 Where the subscription economy is going ❱ 12 Search, retail and privacy trends ❱ 13 Five predictions for the customer experience

Canada’s demographics are changing. Are marketers ready?


// 3 Customer Centricity

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Five predictions for the customer experience

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How to lower staff turnover Vol. 33 | No. 1 | January 2020 EDITOR Brendan Read - brendan@dmn.ca

On the cover

Advertising Sales Steve Lloyd - steve@dmn.ca

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CONTRIBUTING WRITERS Paul Chambers Jake Schwarzbaum Jim Davis Stephen Shaw Nali Giliana Daniel Skarlicki Sam Masri Rich Stuppy Doug Norris Mick Wilson

What will Amazon do in 2020? Events

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Fax: 905.201.6601 • Toll-free: 800.668.1838 home@dmn.ca • www.dmn.ca EDITORIAL CONTACT: DM Magazine is published monthly by Lloydmedia Inc. DM Magazine may be obtained through paid subscription. Rates: Canada 1 year (12 issues $48) 2 years (24 issues $70) U.S. 1 year (12 issues $60) 2 years (24 issues $100) DM Magazine is an independently-produced publication not affiliated in any way with any association or organized group nor with any publication produced either in Canada or the United States. Unsolicited manuscripts are welcome. However unused manuscripts will not be returned unless accompanied by sufficient postage. Occasionally DM Magazine provides its subscriber mailing list to other companies whose product or service may be of value to readers. If you do not want to receive information this way simply send your subscriber mailing label with this notice to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada. POSTMASTER: Please send all address changes and return all undeliverable copies to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada

Strategies & Tactics

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Canada 2020 and beyond What marketers should know about changing demographics

“F” content marketing? Interview with Randy Frisch, president and co-founder, Uberflip

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Become an intelligent enterprise

Where the subscription economy is going

Only a small percentage of Canadian businesses are leaders. Here are their insights.

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Protecting loyal customers Courtesy RIO SEO

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Search, retail and privacy trends January 2020

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Phone: 905.201.6600

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Markham ON L3P 1Y2

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DESIGN / PRODUCTION Jennifer O’Neill - jennifer@dmn.ca

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Marketing 2020

PRESIDENT Steve Lloyd - steve@dmn.ca

Excellent Execution

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Getting to know cannabis consumers DMN.ca ❰


Customer Centricity

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How to lower staff turnover By Daniel Skarlicki

I

Daniel Skarlicki is the Edgar F. Kaiser

Professor of Organizational Behaviour in the Marketing and Behavioural Science Division at the UBC Sauder School of Business. He is the co-author of the research paper “Unpacking the Relationship Between Customer (In)Justice and Employee Turnover Outcomes: Can Fair Supervisor Treatment Reduce Employees’ Emotional Turmoil?” with Danielle van Jaarsveld, David Walker and Pascal Fricke, which is forthcoming in the Journal of Service Research.

f you’ve ever worked a job at a retail store, waited tables at a restaurant or answered phones at a call centre, you know the service industry isn’t for the faint of heart. The pay can be low, the managers can be demanding, the hours can be long, and the work can be demoralizing, so it’s no surprise that many workers say, “I quit.” But when it comes to high employee turnover in customer service, there’s one key factor that has been almost entirely overlooked: the customer. Studies have shown that interacting with difficult customers can lead to a host of negative effects, among them emotional exhaustion, negative moods, poorer physical health, reduced performance and lower job satisfaction. But when customers are yelling about the food at a restaurant, arguing about a retailer’s return policy, blasting a cable company call taker over a service outage or demanding to talk to a manager, does it actually push those workers to leave? The answer is Yes. For our recent study, Unpacking the Relationship Between Customer (In)Justice and Employee Turnover Outcomes: Can Fair Supervisor Treatment Reduce Employees’ Emotional Turmoil? we surveyed over 1,700 retail, restaurant and call centre workers in both Canada and the Philippines. We looked specifically at customer mistreatment and its emotional effects, as well as the rates of turnover. We found that when employees are repeatedly subjected to difficult consumers, they were far more likely to leave, even when we controlled for other factors such as low pay, long hours and poor working conditions. The mistreatment begins to accumulate, and if their emotional resources aren’t getting replenished, workers eventually say, “I’ve got to get out of here.” The correlation was so strong, in fact, that we could predict which employees were likely to stay and which would go.

Companies live or die on the quality of their customer service. Role of supervisors But it turns out that supervisors have a significant role to play in preventing that turnover. We found that when employees feel supported and listened to by their supervisors, the effects of those belligerent customers are significantly buffered. So, if you’re a call centre worker who has just been berated by a customer, and you’re left to fend for yourself, or worse, your supervisor criticizes you, it’s going to have a negative effect. However, if your supervisor says, “That person was unreasonable, and I’m going to support you,” the impact is far less. The findings are important for all service industrybased businesses, because annual turnover rates can range from 26% to an astounding 200%. It can also ❱ DMN.ca

be very costly: in one company we examined turnover from poor management practices cost more than $300,000 in additional hiring and training. And that doesn’t take into account the loss of customers that can come with high employee churn. The conventional wisdom is that employees leave jobs because of things like salary and workload. But our research shows it has more to do with how they’re treated by customers and supervisors. In the customer service sector, the adage “Employees don’t leave companies, they leave managers” certainly rings true. The key is respecting employees Fortunately, there are many things employers can do to mitigate the effect of quarrelsome customers and replenish their workers’ emotional tanks, so that quitting is less likely. First and foremost, they need to treat their workers with dignity and respect. That doesn’t mean there can’t be performance targets and constructive feedback; it just means they need to be treated as equal human beings. In the same vein, employers should adequately explain the thinking behind the decisions they make and the actions they take. They should also ask for input from employees on how to improve processes and provide proper training on dealing with difficult customers. Giving workers plenty of notice about their schedules or duties can go a long way toward making them feel welcome and respected, as can allowing at least some flexibility in scheduling. Management should also organize opportunities for team-building — this doesn’t have to be elaborate or expensive — and regularly check in with staff either through one-on-one meetings or town halls. Along the way they should share the purpose and vision of the company and ask workers how they feel they can contribute to that vision. If possible, they should also help workers see opportunities for advancement in the company. But at a minimum, employers should let employees know they are respected and supported, and that they care about them as people, not just their work. It seems like common sense, but common sense doesn’t always equal common practice. Where managers tend to go wrong is they focus entirely on productivity, pushing employees to reach targets but not backing them in that aim, which leads to high turnover. These days, companies live or die on the quality of their customer service. It’s a critical source of competitive advantage, especially in the age of tight margins and online reviews. And as long as there are customer service-based businesses, there will likely be upset and abusive customers. It’s an inevitable reality. But even if customer satisfaction is an employer’s number one goal, our research shows that genuinely supporting their employees is one of the most effective places to start. January 2020


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Marketing 2020

Canada 2020 and beyond

What marketers should know about changing demographics

â?ą DMN.ca

January 2020


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Marketing 2020

By Doug Norris

T

he size and makeup of Canada’s population is continuously changing in response to various demographic trends. Understanding these trends is essential for making decisions, such as where to locate a new facility or how to determine the best mix of product and service offerings. And more change is ahead. Here is what to expect over the next decade. Population growth In 2019 Canada’s population is estimated to be 37.6 million. For many years the annual growth rate has averaged around 1% a year; however, recent growth has increased to 1.4% a year as a result of higher immigration. But going forward there will likely be a slowdown in population growth as a result of the increasing number of deaths due to our aging population. Future population growth is likely to be highest in the largest metropolitan areas that attract most immigrants. Other urban areas will likely grow at belowaverage rates while there may be an increasing number of rural and small-town areas that experience population declines. These different growth patterns point to possibilities for business expansion in large urban areas but perhaps some consolidation in small town and rural areas. In the larger urban areas, the increasing popularity of high-rise condos in the downtowns will likely result in increasing demand of tech-enabled services, such as online grocery stores and transportation alternatives like Uber, car-sharing and bicyclesharing. An aging population The population aged 65 and over will increase by close to 60% over the period 2019-2036 as compared to an increase of under 10% for the younger population. This means that the older households’ share of consumer expenditures January 2020

will also increase and marketing to the older population will be increasingly important for the bottom line. The aging of the suburbs presents challenges for both businesses and governments. Companies will likely experience a change in product needs as young families are replaced by emptynesting couples and older women living on their own. Marketers, more than ever, will need to identify smaller niche markets. And businesses offering e-shopping and home delivery of products targeted to seniors are likely to become even more popular. With a population characterized by decreased mobility and many seniors living alone, municipalities will also face a need for better public transportation and more programs oriented to seniors.

Boomer cohort ahead of them. This smaller cohort will also cause only a slight increase in the younger age group, 25-34, who are the children of the baby bust cohort. Immigration and cultural diversity Today, 23% of the population are immigrants: the highest since Confederation. Over much of the past decade immigration averaged 250,000 permanent residents a year; however, the numbers have increased in recent years in direct response to government policy. For the past two decades, China, India and the Philippines were the top countries for immigration. For the period 2001-2015, China and India averaged around 30,000 immigrants per year while immigration from the Philippines increased from 14,000 in 2001 to 50,000 in 2015. In the last few

Marketers, more than ever, will need to identify smaller niche markets. The growing older population in their 70s and 80s is also likely to have a significant impact on the real estate industry as they look for suitable accommodations for their later years. Some will decide to downsize, others move to a retirement community or retirement home while still others will decide to remain in their homes but renovate to make them more accessible. Regardless of location, the older population will increasingly look at new technology devices, such as monitoring devices or robotic adaptive living products, that will support and enable them to live longer and more independently in the community. Aside from the high growth at older ages, marketers need to recognize the change in population sizes at the younger ages. The most dramatic change is expected to be a decline of 8% in the population aged 55-64 as this smaller “baby bust” generation replaces the larger

years though, immigration from the Philippines has declined to 27,000 in 2019, immigration from China is estimated at 31,000 in 2019 and immigration from India has increased substantially and is expected to reach 80,000 in 2019. Past immigration trends have resulted in a changing face of Canada, especially in the larger metropolitan areas. In 2019, the “visible minority” population is now a majority in both the Toronto and Vancouver urban areas. However, as immigration spreads out and more immigrants are attracted to places other than Toronto and Vancouver, cultural diversity is increasing in other metropolitan areas. The visible minority population accounts for close to 40% of the population of Calgary and from 20%-35% of the population in 11 different metropolitan areas. With immigration accounting for most of the future growth of the population, the cultural diversity

of Canada’s larger urban areas will continue to increase. With Canada’s population drawn from many parts of the world, marketers need to understand how the needs and preferences of immigrants vary. Their past may shape the way new consumers hear and interpret messages, and marketers will need to consider these influences when developing promotion campaigns. A related question for consideration is the extent to which various groups consume ethnic media. Increasing diversity presents both opportunities and challenges for marketers. A minority of households with children It is estimated that in 2019 less than 40% of households have children at home. Approximately 28% of households are one-person households and 26% are couples without children. For the future, there is likely to be little change in the number of households with children, while there should be a considerable increase in the number of empty nest couples and perhaps a modest increase in one-person households. Smaller and older households have implications for packaging size as well as the labelling and design of products. Women Today, most women are in the paid labour force and the female labour force is increasingly educated. Women now account for 53% of the university-educated labour force and an increasing share of all managerial and professional occupations. The high level of labour force participation, coupled with increasing levels of education, resulted in higher income increases for women over the period 20012017; median income increased by 27% in real terms compared to a rise of only 6% for males. However, there remains a considerable wage gap. But the increasing income of women means that their share of total income continues to rise, reaching 42% in 2017 compared with 25% in 1976. Young women with increased spending power will look for DMN.ca ❰


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Marketing 2020 ways of better balancing work and family pressures but will also be looking to spend on themselves. In the mid-age years (25-64), over one third are either lone parents or are living in a non-family environment. These women have considerable spending power. And the large group of older Baby Boom women are a new breed of older female consumers. They are well educated, many having been in the labour force, and now with increased leisure time in an empty nest or solo living environment, they are looking for experiences and products that they could not afford while bringing up their children. A look at the generations In Canada, we can define the generations as PreBoomers (age 74+ in 2019), Boomers (54-73), Gen X (40-53), Millennials (24-39) and Gen Z (under 24). Relatively little can be said about the youngest Generation Z, many of whom are living at home and still in school. However, over the next decade, this generation of digital natives will replace the Millennials as a focus for marketers. Millennials Today there are 8.3 million Millennials, but it is vital to recognize the diversity within the generation. Older Millennials are established in their jobs, have started families and have purchased their first homes, often in the suburbs. On the other hand, many younger Millennials are still in school or have recently graduated and are more likely to be found living alone in downtown apartments and condos. Family life and suburban living are ahead of them over the next decade.

Gen X Sometimes referred to as the forgotten generation, Gen Xers are well established in their careers and family life and are struggling to balance the two. Over the next decade, they will be in their prime earning years and will account for a high level of expenditures. Boomers In 2019 Boomers numbered 9.3 million. Like Millennials, Boomers are a very diverse group. Younger Boomers are mostly employed and have older children living at home. Over the next decade they will face decisions about retirement and how to live out the next 20-30 years. Many of the older Boomers are retired and many are living as empty nesters or in the case of women, living alone. In the past marketers and advertisers have virtually ignored the older population, instead focusing on the young Millennials. However, marketers are slowly recognizing the potential of the older population. But successfully marketing to this population requires that businesses change their historical approach. The Boomers are very different than their predecessors. They are more educated, more demanding and many have good incomes and considerable wealth. They look to enjoy their retirement years, filling it with many learning or leisure activities that they couldn’t do or perhaps afford while fully employed and raising a family. In many ways, they can be said to be re-defining retirement years. And they don’t want to be perceived as “old” but instead, view themselves as active and productive with much to contribute. Advertisers take note! The consumer base will continue to evolve over the next decade and businesses will need to assess how the many trends play out in their trade or service areas. The growth, or in some cases the decline of the population, the changing age structure of consumers, the evolving cultural mix and the changing roles of women will all need to be carefully monitored by organizations if they plan to succeed in the coming years. Doug Norris is a senior vice president and the

chief demographer at Environics Analytics. January 2020

DMN.ca ❰


YogaClub: Windsor, Ont.-based YogaClub delivers a three-piece yoga outfit on a monthly or bi-monthly basis.

Courtesy YogaClub

// 10

Marketing 2020

Where the subscription economy is going S

ubscriptionbased businesses are some of the fastest growing companies today, and for good reason. With ongoing, regular reminders of business value and the customized experience that the subscription economy has become famous for, it’s no wonder that everyone from independent businesses to multibillion dollar retailers have begun to offer some type of ongoing subscription-based offering. The Subscription Trade Association (SUBTA) recently released our 2019 State of the Subscription Commerce Economy Annual Report and the information is an eye-opening look at the shifting demands of consumers ❱ DMN.ca

and how smart retailers are responding to them. Two subscription-based services most consumers are aware of are digital subscriptions — which includes streaming services such as Netflix and Disney+ — and subscription boxes, both of which have become quite popular over the last several years. And while most of these services are U.S.-based, many of these subscription retailers across the board are starting to see their potential for growth by expanding in Canada, which is typically the first point of expansion outside of the U.S. Subscription boxes such as YogaClub for activewear, Adore Me for lingerie and BarBella Box for fitness apparel have all begun expanding shipments into

Courtesy BarBella Box

By Paul Chambers

BarBella Box: Fitness subscription BarBella Box delivers four to six pieces of “Functional Fitness” athletic apparel, gear, snacks, supplements and more for women each month.

Canada, and we expect this trend to continue into 2020. Clothing retailers branching out Subscription boxes are still a large segment of the subscription

economy. Boxes focused on personal grooming are the most popular, with more than 200 million site visits each year. But as this industry grows and enters a new phase of consumer January 2020


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Marketing 2020 acceptance, our team at SUBTA has begun to track some noticeable shifts in how the subscription economy serves consumers on a regular basis. Pet-focused subscription boxes have seen the most market growth in the past year with a 15% increase in site visits since 2018. However, clothing rental subscription is one of the fastest-growing segments of the subscription economy. It has seen 11% market growth in the past year: and this is where we believe we will see the most growth in the coming years. Rent The Runway pioneered the market with demand for renting high-end dresses for one-time special occasions, which made sense to consumers. Why spend thousands of dollars on a dress, or settle for a less expensive dress that fits your budget, when you can rent a designer dress of a much higher quality (and cost) than you’d be willing to spend for one event? But this concept has started to branch out beyond the fancy

January 2020

evening out. Consumers have started to look at their everyday wardrobes the same way. Fashionand eco-conscious shoppers are beginning to see that consistently purchasing items to keep up with trends can often equate to a waste of money and materials, particularly when these items end up in either donation centres or landfills just a season or two later. Clothing rental subscriptions allow consumers to consistently try new styles with less risk. As a result, we’re starting to see that more well-known clothing retailers are also starting to see the benefits of this model for their markets as well. We found in our study that by 2023, 75% of organizations selling direct-to-consumer (D2C) will offer subscription services. We’re already starting to see this happening with several well-known retailers like Banana Republic and Ann Taylor Loft offering clothing rental subscription services. And why wouldn’t they? As

subscription services continue to build consumer confidence and longer-term engagement with brands, retailers offering clothing rental subscriptions are able to create deeper relationships with customers that are no longer transactional. As a result, we expect the clothing rental trend to continue to grow as we enter this new decade. These brands start to learn each customer’s style much better than in a traditional retail environment, thereby building a more personalized, stronger connection as well as better feedback for their offerings to better meet customer demand. The subscription model also allows retailers to strengthen relationships for off times when they can’t get customers into a brick-and-mortar store location, or when they might not have a location near them. New participants In addition, this market growth has spurred new industries to

support the subscription economy. CaaStle, one of Fast Company’s Most Innovative Companies, was built from the successful everyday clothing rental company Gwynnie Bee and provides a technology solution for other clothing rental companies to build and grow their businesses. This approach has helped bring a crucial element — technology and a digital presence — to clothing rental subscriptions to help encourage greater public acceptance of the clothing rental subscription model. With all these elements finally coming together — and greater consumer demand for a customized, personal approach to every aspect of their daily lives —we anticipate that 2020 will be an exciting year for the subscription economy. One where both new and established brands will create transformational business models to carry them into this new phase of retail. Paul Chambers is CEO and co-founder,

Subscription Trade Association (SUBTA).

DMN.ca ❰


// 12

Marketing 2020

Search, retail and privacy trends By Mick Wilson

A

s digital marketing continues to expand and change, here are several insights into market and technology trends that will become more prevalent in 2020 and beyond.

1

2

AI will begin to think like you.

Suggestive search is on the rise as artificial intelligence (AI) technology becomes more enhanced and intuitive. Consumers will no longer need to think through the logistics of getting to work, running an errand or taking a trip; the evolving software will be one step ahead of consumers’ wants and needs.

3

Zero-click searches on the uptick.

Google’s zero-click (a.k.a. no-click) search results will continue to reduce the need for consumers to visit other web sites for information. With instant answers, Map Packs, translators, knowledge panels, calculators and definitions featured at the top of the page, Google will further confine consumers to the search engine results pages (SERP), strengthening its role as the “king of data.” Also expect to find richer top-of-page results such ❱ DMN.ca

as instructions, recipes, how-tos, menus and more that include images, videos and other rich content.

4

The “Amazon Effect”.

If/when Amazon starts taking pages out of Google’s book, it will empower buyers and sellers to take back control over their companies’ profiles, reputation and data straight from Amazon’s site. Though once seen solely as an eCommerce site, Amazon’s recent purchase of Whole Foods Market showcases its expansion into different verticals with new capabilities. Expect these efforts to ramp up in 2020.

Expect to find richer top-ofpage results.

5

Brick-and-mortar isn’t dead yet.

Brick-and-mortar is making a comeback, but in a different way than one might expect. As a majority of brands’ revenues comes from their physical presences, they will continue to reinvent themselves to appeal to consumers’ demands for digitization and convenience. In 2020, expect brickand-mortar stores and restaurants to downsize their physical locations and focus on experiential

concepts that will leave an impact on consumers and help them stand out from the competition.

6

Ethics, privacy and public opinion will impact businesses. Whether it’s “fake news” or cannabis-based (CBD) products, major tech platforms such as YouTube and Facebook will have to pick a side when it comes to enabling, promoting or endorsing a company, campaign or product. With the power to alter listings algorithms, increase censorship and/or promote certain products/opinions over others, these tech conglomerates will need to pay close attention to their roles in disseminating information — whether false or simply controversial — and the effects on consumers. Similarly, 2020 will see big tech companies rolling out more privacy-centred

Courtesy RIO SEO

In 2020, more consumer searches will originate from Google Maps. In fact, expect an increasing number of consumers to bypass Google search altogether and utilize Google apps on their phones (i.e. Google Maps) to seek answers to their queries. Additionally, consumers using Google search will see more examples of product searches returning map results. For example, searching for “AirPods” might yield Apple Store, Best Buy and Target map listings with an “in-stock” label powered by Google’s Local Inventory Ads.

Courtesy RIO SEO

Google Maps will become the ”New Search”.

features — such as Google Maps’ new incognito mode — to limit sharing consumers’ location data with brands in an effort to protect consumers’ privacy. Mick Wilson is vice president of customer

success at Rio SEO. January 2020


// 13

Marketing 2020

5

Five predictions for the customer experience

By Nali Giliana

C

ustomer experience is more important than ever. Marketers have access to incredible amounts of information about their potential customers,

1

but it is how this data is analyzed and put to use that will separate the most successful companies from everyone else. Personalization of messages is nothing new to marketing (or to customers), and a new level

Hyper-personalization driven by data democratization.

2020 will be the year of hyper-personalization across the consumer journey. The implementation of data democratization strategies will be one of the main focal points for marketers in 2020. This will see brands leveraging predictive analytics, utilizing data from throughout the business — across departments, partners, suppliers and customers — to build marketing strategies which will allow for contextual and hyperpersonalized experiences relevant to the target audiences. Leading brands will also push beyond the customer experience, and look into delivering individualized products, services and pricing.

2

Rise of multisensory brand experiences.

The ways in which customers will engage with brands will transcend the usual digital and physical touchpoints. In 2020, we can expect to see the user experience undergo a significant change in how customers perceive the digital world and engage with brands. Key technologies, such as augmented reality (AR), virtual reality (VR) and mixed reality (MR), will shift the horizon of experience design by combining perception and interaction models to help create a multisensory approach to brand experiences. As a result, customers will look beyond products and will be loyal to brands that can deliver consistent experiences across all of the sensory touchpoints.

3

IoT and the user experience.

The Internet of Things (IoT) will be a critical component in the creation of hyper-personalized experiences driven by data. There are billions of Internet-connected devices, each capturing a wealth of valuable consumer insights that marketers will leverage to deliver custom, contextual messages in real-time and provide personalized customer experiences that January 2020

of hyper-customization across multiple platforms, underpinned by access and analysis of information, will focus on truly improving customer experience in the next year. While these improvements could

be revolutionary, this reliance on data will be grounded in a renewed focus on customer data privacy and security. Here’s how we are predicting these developments will play out.

will guide the way customers interact with brands. Adapting to a multisensory experience culture, IoT will also continue to help brands bridge the gap between the digital and the physical to create personalized connections with customers across all sensory touchpoints. Furthermore, we will see new and unique IoT implementations focused on the user experience that will further enhance how brands develop, market and deliver their products to their customers.

4

Voice search will become a key component.

Data generated from customer interactions driven by AI will help marketers a great deal in creating more authentic digital communication experiences beyond the traditional digital channels. Voice search, in particular, will see significant uptake next year due to its simplicity. With the adoption of AI-supported intelligent assistants like Google Assistant and Amazon Alexa slated to expand, brands will face added pressure to change the design of their customer experience to include voice search.

5

Transparency and privacy concerns gain steam.

While demand for hyper-personalized customer experiences is increasing brands’ dependency on data, consumer concern about the control of their personal information is also increasing. This dynamic is making organizations more aware of the importance of securing and managing personal data, and governments are implementing strict legislation to ensure organizations do so. In 2020 enterprises will be called to place greater emphasis on transparency and traceability to support digital ethics and privacy needs. They will need to implement practices designed to address regulatory requirements, preserve an ethical approach to the use of advanced technologies and repair the growing lack of trust in companies. The common thread among these five predictions is a grounding in data. The year ahead will demonstrate the competitive advantage that can be created from the proper use of data across businesses. Nali Giliana is vice president, Omnichannel Experiences, OpenText. DMN.ca ❰


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Marketing 2020

What will Amazon do in 2020? By Jake Schwarzbaum

Amazon Posts (beta) Amazon is beta-testing its new Posts browsing and sharing application. With Posts, Amazon has arguably adapted the most successful social media formula on its massive eCommerce platform. Here’s how Posts works. A brand’s posts show up on a feed like many other social media platforms. Brand owners will be able to create engaging content that can link directly to product pages for purchases. Formatting is similar to Instagram, which enables a lot of content to be repurposed for this new platform. ❱ DMN.ca

Since Amazon is a trusted buying platform, its shoppers and visitors are much more likely to make purchases than those browsing other social media sites. Brands should take advantage of Posts, quickly and aggressively. Posts will work like any other social media platform, where early adopters and frequent content providers are rewarded. There is no limit to the amount you can post, but make sure that the content is high quality and consistent with the brand. Make sure also that you are tracking the analytics and metrics that Posts provide. Learn from successful content in your content strategy plan.

talk about and demonstrate the products available on Amazon. This is Amazon’s latest effort to combine two very successful platforms: live television shopping channels such as QVC and Home Shopping Network with online streaming platforms such as Facebook, YouTube and Twitch (owned by Amazon). With Amazon Live, brands now have a long-form channel to promote their products with video without the limited time slots of traditional TV. They can host their own streams and promote their products where shoppers can chat with and ask questions to the hosts before making purchases. Live

Amazon U.S. if they are not already doing so.

Amazon Live Amazon Live, which features live-streamed videos by Amazon and from brands featuring their broadcast live streams, gives shoppers an all new way to gather details on Amazon’s products for sale. During live shows, hosts

streaming can be done directly through the Amazon Creator Live mobile app on iOS. Both Amazon Posts and Amazon Live are available now in the U.S. and will come to Canada in 2020. Canadian sellers should also strongly consider selling across

to Amazon. There are three main reasons why Amazon Attribution has become such a popular solution. It provides an easy to understand format for tracking and measuring advertising effectiveness. Also, Amazon Attribution allows simple

Attribution Program (beta) Recently Amazon Attribution has been getting a lot of buzz in the marketing and advertising sectors. Even though the software is still in beta, it has already become quite popular and highly acclaimed. Amazon Attribution tracks the effectiveness of various types of advertising in driving sales for Amazon sellers from outside sources, such as social media posts, search engine advertising campaigns, email marketing campaigns and any other source that use a link to direct traffic

Courtesy Amazon

I

n 2018 Amazon’s net sales reached $232 billion USD with its biggest revenue segment in retail products, according to recent research. As an industry expert in Amazon and Amazon Marketplace, it’s crucial that my company, Velocity Sellers, and I watch every update, change and new regulation Amazon crosses to better help our clients deliver strategic measurable improvements for their Amazonbased sales operations. Amazon is known to vertically integrate different parts of eCommerce from hosting its own platform on Amazon Web Services (AWS) servers to developing their own fulfillment network. It is now targeting different parts of the customer experience through increased engagement, video and improved advertisement tracking. Currently, Amazon lacks the variety of tools to grow sellers’ brands within its platform. Instead it heavily relies on other platforms such as Facebook and Instagram to promote content and the brands’ stories. While those social platforms are not going anywhere, Amazon has recognized the opportunity to leverage its platform to allow deeper engagement between brands and customers. This has led the company to introduce some new features that will make a big difference in 2020.

January 2020


// 15

Marketing 2020 on-demand Attribution reporting. Finally, the program also gives campaign managers in-depth current data, which allows them to tweak active campaigns and more effectively plan future campaigns. Amazon content Content marketing is becoming more important every year for Amazon and eCommerce as the market becomes more saturated with products, and as companies work harder and harder to get ahead. Video content in particular drives results and have been increasing its presence on Amazon, such as in mobile video ads on the Amazon app. Brands should create a marketing strategy that includes creating written content, but also invest in an efficient way to develop video, whether it’s with a simple in-office studio or working with a video production company. In order to stay ahead of the curve, brands will need to focus more time, energy and money

It’s going to be a busy year ahead for Amazon and its brands. into creating meaningful content. Time should also be dedicated to analyzing results with Amazon’s new Attribution tools. Vendor Central vs. Seller Central There have been several changes to these two platforms in the last few years. In 2019, Amazon made a push for small vendors to move toward Seller Central before quickly backing away from that initiative. It is likely that Amazon still plans to follow through with this, while brands under a certain threshold (varying per category) may be cut off from Vendor Central. This isn’t all bad though, as Seller Central has been reaching near feature parity with Vendor Central and in fact provides many benefits. For example, one of the last strongholds of marketing

exclusivity for Vendor Central is the Vine review program, where trusted Amazon reviewers post product opinions, which has not moved to Seller Central. Even so, most businesses should start planning for a transition to Seller Central just in case. Bonus predictions ❯❯ Amazon has and will continue to crack down on review manipulations. This is good for both customers and sellers who follow the rules; ❯❯ Brick-and-mortar will make a comeback, but not as it used to be. Brands will go direct-toconsumer similar to Casper Mattresses and Peloton, using their physical retail locations to create experiences that complements their online

❯❯

presences; and Amazon has a political target on its back. The U.S. Government awarded a $10 billion contract to competitor Microsoft for cloud services with suspected bias. On the other side of the aisle, some U.S. presidential candidates are promising to break up large companies like Amazon.

It’s going to be a busy year ahead for Amazon and its brands. With the implementation of more engaged features for brands, and potential regulatory changes on the horizon, Amazon continues to fiercely push ahead in the industry. Brands need to stay up to date with the latest or risk being left behind. My company and I know firsthand the challenges brands face when creating a successful Amazon business because we’ve helped several companies reach their goal. Jake Schwarzbaum is co-founder of Velocity

Sellers (www.velocitysellers.com).

Events Calendar February

April

February 7-8 Digital Media at the Crossroads Toronto, Ont. www.digitalmediaatthecrossroads.com

April 16-17 Customer Experience Strategies Summit Toronto, Ont. www.customerexperiencecanada.com

February 13 Digital Marketing Summit Toronto, Ont. www.marketingglobalevent.com/ digitalmarketing/toronto/february/#

April 19-21 FITC Toronto 2020 Toronto, Ont. https://fitc.ca/event/to20/

February 19-21 The Gathering Banff, Alta. https://cultgathering.com/?utm_ source=online.marketing

March March 10-11 DX3 Canada Toronto, Ont. www.dx3canada.com

January 2020

May May 11-14 Gartner IT Symposium Xpo Toronto, Ont. www.gartner.com/en/conferences/na/ symposium-canada May 12 The Canadian Email Summit 2020 Toronto, Ont. https://emailsummit.ca

May 13-14 DigiMarCon Canada Toronto, Ont. https://digimarconcanada.ca Product Marketing Summit Toronto, Ont. https://productmarketingworld.com/ location/toronto May 26-27 Store 2020 Toronto, Ont. https://www.storeconference.ca

Visit us online for complete list

www.dmn.ca DMN.ca ❰


2020

ISSUES & EDITORIAL THEMES

May Issue theme: Customer experience (CX)

June Issue theme: Mail marketing

January Issue theme: Strategies and tactics

February Issue theme: Digital marketing

Spotlight: Marketing 2020

Spotlight: Content management

Editorial deadline: December 12, 2019

Editorial deadline: January 15, 2020

March

April

Issue theme: Data marketing

Issue theme: Retail

Spotlight: List management

Spotlight: eCommerce

Editorial deadline: February 14

Editorial deadline: March 13

July

August

Issue theme: Security

Issue theme: Fulfillment and shipping

Spotlight: CRM

Spotlight: Lettershop and printing

Spotlight: Compliance

Spotlight: Returns management

Editorial deadline: April 15

Editorial deadline: May 15

Editorial deadline: June 12

Editorial deadline: July 17

September

October

November

December

Issue theme: Direct response

Issue theme: Segmentation

Spotlight: Customer personas

Spotlight: Personalization

Spotlight: Marketing politics

Spotlight: B2B

Editorial deadline: August 14

Editorial deadline: September 11

Editorial deadline: October 16

Editorial deadline: November 13

Issue theme: Contact management

Issue theme: Loyalty

DM Magazine is your partner in leveraging editorial opportunities. We can facilitate your advertising needs, as well as developing online campaigns, editorial roundtables and more. For advertising opportunities contact

For editorial opportunities contact

Steve Lloyd, steve@dmn.ca

Brendan Read, brendan@dmn.ca


// 17

Strategies & Tactics

“F” content marketing? Interview with Randy Frisch, president and co-founder, Uberflip By Stephen Shaw

Stephen Shaw is the chief strategy officer of

Kenna. Stephen can be reached via email at sshaw@kenna.ca.

Q:

The state of content marketing reminds me of CRM back in the ‘90s, when its

January 2020

Courtesy Randy Frisch

O

ver the past decade, as brands aspired to become media publishers, the volume of content has grown to the point where it may have reached a saturation point. Today, no matter how good that content may be, the chances of it being noticed are remote. 70% of brand content reportedly goes unnoticed. Which is probably why 86% of companies say that their content marketing efforts aren’t generating much business value, according to Forrester Research. Nevertheless, marketers are undeterred; content marketing budgets are expected to keep growing. But that means the content glut will only get worse. The solution, according to Randy Frisch, is to say “F#CK to Content Marketing”, which also just happens to be the provocative title of his recently published book. Despite the attention-grabbing title, he’s been an ardent proponent of content marketing ever since he and his partner Yoav Schwartz (CEO) founded their company Uberflip in 2012. Uberflip competes in the hotly contested arena of content marketing platforms (CMPs). But unlike a lot of its CMP competitors, which function as publishing workflow engines, Uberflip prefers to optimize what it likes to call the “content experience”: allowing marketers to offer a more personalized and interactive way for people to engage with content. The main thesis of Randy’s book is that marketers have spent too much time worrying about content scalability and not enough about content discoverability. Even the best content can get buried in a chronological scroll. And often the content is too elementary or generic to be of much value to prospective buyers who are deep into self-education. Marketers should be thinking about how to map the content journey to the purchase journey, Randy argues, and design a dynamic experience that aligns with the varying knowledge level and decision stages of individual buyers.

Randy Frisch, author of F#CK Content Marketing.

effectiveness was being universally challenged due to one epic failure after another. Is the title of your book shorthand for, “nobody’s getting this right yet”? Exactly. It’s funny. My team wanted me to go with the title “Stop Content Marketing” at one point. But I said, “No, I don’t want people to stop creating content. I just don’t think there’s a point creating it if it goes unused: if it’s never seen by anyone”.

A:

Q: A:

Is the core thesis of your book that content is only useful to someone if it’s relevant and useful to them at a point in time? I think that’s part of it. I think delivering the right content to the right person at the right time is a big part of being more strategic about content creation. But it goes beyond whether the content is good or bad: beyond the quality versus quantity debate. When we create content, we have to ask ourselves: “What are we creating it for? To serve what purpose?” Defining content marketing

Q:

Part of the issue may be that the definition of content marketing has become quite fuzzy. Does content marketing encompass all forms of marketing communication? For example, DMN.ca ❰


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Strategies & Tactics

“When we create content, we have to ask ourselves: ‘What are we creating it for?’” some argue that ad copy is content. Or is the definition narrower than that? That’s a great question. Content marketing is content that is relevant, valuable and consistent to attract an audience. We need content at the top of the sales funnel which is different than the middle and bottom of the funnel to drive profitable customer action. What we need to be aware of though is the sequencing of the content. Just think how content typically gets organized on a web site: by format or chronologically by date. When was the last time you went to a web site and said, “I’m going to figure out what these guys do by looking at their e-books”? Instead, what if we organized content by the different challenges that people have? It’s all about rethinking how we organize content. It’s about thinking about how we tee up that next asset in a more systematic way. IDG states that a buyer typically consumes seven pieces of content before they’re ready to buy. But how do you get people to consume all seven assets in one session or two? My book is not about how to create the right content. It’s about how to serve up the right content when you have it.

A:

State of industry

Q:

In business-to-business (B2B), salespeople today are being shut out of the conversation with buyers early in the decision cycle because they’re not providing sufficient value. Is the onus now on marketing to shoulder the burden of that dialogue with potential buyers? Yeah, there’s a Gartner stat on that. Across the entire buyer journey 82% of a buyer’s time is now spent doing research versus speaking to sales.

A:

❱ DMN.ca

Q:

Let’s talk about your own personal journey. What was your inspiration to start Uberflip? What Yoav and I recognized was a growing need for marketers to leverage content in a more meaningful way. We looked at the CMPs at the time and said, “They’re only solving for creation.” At the time I had joined Yoav at his company Mygazines where we were working primarily with media publishers and marketers and helping them create interactive PDFs. Some customers were using our “Flipbook” technology for their e-books. They told us it’d be really nice if we had a web page where we could organize all our e-books. They also talked about all these other content formats like their blogs, the latest YouTube videos and so on. We realized that it wasn’t so much about a page for e-books: it was about a way to expose their huge repository of content.

A:

other solutions like Outbrain and Tabula that help with the distribution of content. Inevitably, though, there will be convergence. Starting from scratch

Q:

If you’re talking to a company starting from scratch with content marketing what would your advice be? Usually you would start with a content creator to lead that team. But that’s not always the best answer. You end up with a brand journalism team. If you’re trying to map content to a buyer journey, I would argue that you need a demand generation marketer. We’ve also seen a lot of people start to use the term content experience manager. That individual should be someone who’s created content but more importantly understands the buyer path and where content is going to be used. It should be someone who understands the complexity of integrating the different touchpoints.

A:

Q:

Which companies today would you point to as reference examples for success in content marketing? There’s a SaaS company called Snowflake [data warehousing software] that I like

A:

“We need content at the top of the sales funnel which is different than the middle and bottom of the funnel.”

Q:

How would you describe the state of the content marketing software industry today? First off, I think it’s all very confusing to marketers. The definition of content marketing software is still very much around creation and workflow. You’ve got Kapost, NewsCred, Contently: they’re creation tools. You have us, Path Factory and other companies like that: they’re focused on experience. And then you’ve got

A:

to reference. They practice accountbased marketing: focusing their content efforts on a select group of target accounts. They create content of interest to all of their accounts but then they handpick specific content assets that might be more relevant to a particular account. It’s like the Spotify experience. Spotify is not composing new music for me. I simply get the best songs in their library that match up to my individual preferences and tastes.

Q:

Do you make distinctions in the different types of content marketing? For example, brand storytelling versus conversion content, where the goal is to move someone through the sales funnel? We need both. The corporate marketing team are the brand storytellers: “This is what our brand stands for, this is our rally cry”. But then the demand generation team is responsible for the buyer journey.

A:

Making the business case

Q: A:

How do you make the business case for content marketing? Just tracking “likes” or social shares is no longer enough. I think what we really need to do is understand if it’s actually driving the outcomes we’re looking for. The tricky part is, who’s responsible for that? Is it the responsibility of the content creator? The demand generation marketer? I would argue it’s actually the marketing team as a whole.

Q:

Are we about to enter a “the trough of disillusionment” where companies give up or cut back on content marketing because they can’t justify the expense? When I use Spotify or Netflix, they always know what I want: there’s no such thing as having too much content. The question is, how do we serve up what’s next? Because that’s what leaves us stranded. How do we emulate LinkedIn and Instagram and Facebook by keeping people engaged? Where people want to stick around because everything you offer them is relevant and worth their time to explore.

A:

Q:

In an ad-free world, if that ever comes to pass, will content marketing become the only option for brands? We just need to make sure that at some point we’ve got to convince people to buy our products. And we’ve got to lead them there without them feeling like they’re being led. That’s the real benefit of content marketing.

A:

January 2020


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Strategies & Tactics

Become an intelligent enterprise Only a small percentage of Canadian businesses are leaders. Here are their insights. By Sam Masri

Defining the intelligent enterprise So, what is the intelligent enterprise? It is a strategy that allows enterprises to transform data into action across all lines of business in order to drive process automation and innovation that, in turn, unlocks new areas of growth and delivers exceptional experiences. To identify how far along Canadian organizations are in their transformation to succeed in the digital economy, IDC Canada developed this four-stage progress scale: Observer Participant  Challenger  Leader January 2020

Courtesy SAP Canada

O

ver the past half-decade Canada’s business leaders have been hearing the message loud and clear about the need to establish a digital transformation strategy. And to their credit, 85% of Canadian enterprises have now developed one, up from 76% in 2017, according to a new SAP study conducted in partnership with IDC Canada, A Vision & Pathway to the Intelligent Enterprise. However, simply having a digital strategy is no longer enough. Leaders must now be able to execute on it. Facing shifting customer demands, emerging global competition, a growing skills shortage and a quickening pace of innovation, Canadian businesses need guidance on how to progress on their digital transformation journeys. With the SAP-IDC study now in its fourth year, we wanted to examine the characteristics that distinguished more digitally advanced organizations, so we could provide insights that other leaders can emulate on their paths to becoming an intelligent enterprise (IE).

Canadian companies need to become intelligent enterprise leaders in order to succeed in today’s markets.

Of the 303 Canadian organizations we surveyed, only 12% are currently identified as IE Leaders. While these IE Leaders are well ahead of their peers in the adoption of innovative technologies, our study revealed that the real “secret sauce” to undergoing a successful digital transformation was succeeding in the human side of business. With that in mind, here are three key learnings that you can use to advance your organization’s digital agenda:

1

Establish a solid IT foundation.

Executing on a digital strategy means that organizations need to be agile and have the foundation in place to sustain changes in demand for computing capacity, real-time analytics and digital customer service. Building block technologies, such as cloud infrastructure, productivity collaboration tools, data management and analytics tools, and newer innovative technologies such as the Internet of Things (IoT), artificial intelligence (AI)

and machine learning enable an organization to become an IE. Our survey revealed that IE Leaders are more likely to be ready across all these technologies, particularly cloud server and storage and productivity collaboration solutions. Innovative technology adoption is foundational for organizations that are looking to take the next step in their digital transformation journeys.

2

Ensure that senior leadership is fully engaged. Beyond the technology itself, a mindset or culture within the organization is required to become an IE. Specifically, the level of engagement among senior leaders and the clarity to which the digital strategy is articulated, contributes to success. The SAP-IDC study found that 80% of IE Leaders have executive management enthusiastically engaged in digital strategy execution, compared to a mere 9% of the IE Observers who are falling short in their transformation efforts.

Those results echoed a finding from our 2018 report about the significance of “digital change agents”: leaders who, with vision and energy, are able to gain consensus both within and across teams and through different levels of their organizations. For without this enthusiasm, organizations ultimately fail to shift the culture of teams that ultimately execute the digital strategies.

3

Focus on the human side of the business.

There are four critical and related elements of the IE. They are customer experience (CX), employee experience, product experience and brand experience. Together, these are referred to as experience management, which is the human side of business. Experience management is essential to becoming an IE. According to our study, CX is the second most common measure of performance of digital strategy and is clearly linked to financial performance. Keep in mind that over two in three (68%) IE Leaders believe that a stronger CX had DMN.ca ❰


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Strategies & Tactics

significantly improved financial performance within their business over the previous year. For this reason, it’s no surprise that 59% of IE Leaders plan to increase their focus on the CX versus 44% of IE Observers. Additionally, 73% of IE Leaders will increase their focus on employee experience next year, compared to only 44% of IE Observers. This means implementing digital programs, resources and tools to track employee engagement, performance and well-being. Human resources and employee engagement programs are of course nothing new within most organizations. However, advanced enterprises are now recognizing the importance of linking customer and employee experience, with almost nine in ten (89%) IE Leaders saying it is very important or critical to improve both at the same time as compared to just 44% of IE Observers. Taking the next steps While there may be multiple pathways to becoming an IE, there are several common attributes that can help your organization get on the right track. Take bold steps. Establish a clear vision and strategy for the business and communicate that clearly throughout the organization. Invest in the foundations: cloud and analytics form the basis for any organization’s ability to scale up and derive business value from data. Advancements in the areas of machine learning/AI and IoT will come after the building blocks are in place. Effectively deploy these technologies. Empower your teams to use the intelligence and insights to impact the business positively. Ensure experience management is included in strategy and has a holistic view by tying CX to employee experience. Finally, Build agility into the talent plan. The most progressive organizations succeed by anticipating change skill requirements and changing the mix of employees and training programs as needed. Sam Masri is chief operating officer,

SAP Canada. ❱ DMN.ca

Protecting loyal customers By Rich Stuppy

A

n evening at the movies recently turned into a frustrating experience for many Canadians: when they discovered that the valuable points they had collected on their movie rewards cards had disappeared into a black hole. No, this isn’t the premise of the latest crime-action blockbuster. It’s a true story of loyalty card fraud that befell the Scene program, which is one of the largest points-based loyalty programs in Canada. Scene allows members to earn free movie tickets as well as rewards at restaurants and sporting goods stores. Cineplex Entertainment, which operates the Scene program in conjunction with Scotiabank, said in a press statement that it had “identified some patterns of attempted fraudulent redemption activity in certain markets across Canada.” Many consumers reported losing thousands of points, which meant many lost evenings at the movies. In cases like these, the pilfered points are just the coming attraction. Often fraudsters use stolen points to fund illegal transactions, such as booking plane tickets for human traffickers and drug smugglers. They also cash in points on the dark web to finance criminal schemes. The vulnerability: and criminal appeal The Scene breach shows just how vulnerable consumers are to loyalty program attacks. That’s partly because most consumers don’t monitor and protect their loyalty points as they would the money in their bank accounts. This has resulted in a broadening fraud epidemic in Canada, with leading loyalty programs like Air Miles, WestJet and PC Optimum being hit by breaches in recent years. One reason fraudsters target Canadians is that they’re such avid collectors of rewards points. The average Canadian participates in

12.9 different loyalty programs, according to Bond Brand Loyalty’s The Loyalty Report 2019. What’s more, the typical Canadian holds $832 worth of loyalty points says a new study by PC Financial Mastercard. On a national scale, that’s billions of dollars in unredeemed points sitting in loyalty accounts: a very large pot of gold for fraudsters.

Loyalty programs must take fraud seriously. A lot of people view loyalty points as a perk, a fringe benefit. But cybercriminals see rewards points for what they are: currency. And they go to great lengths to target high-dollar accounts and steal those points. Indeed, account takeover attacks have tripled in the last year alone and have cost consumers more than $5.1 billion worldwide, according to the 2018 Identity Fraud Report published by Javelin Strategy & Research. And, with businesses themselves now discussing rewards points as currency, expect the attacks to continue in the future because of the potential value to thieves. Steps to take So, what can be done? It’s important for loyalty programs to tighten their security and assure program members that they can redeem their points easily and confidently, without worrying about digital heists and account takeovers. Loyalty programs must take fraud seriously and ensure that customers — not criminals — get full value from their points. Beyond lost rewards, missing loyalty points damages the customer experience and therefore brand reputation.

It’s also important for operators of loyalty programs to involve their members more closely in their own security. They can do this by encouraging members to sign up for fraud alerts, so they will receive texts or emails whenever their points are redeemed. Programs should also consider implementing multifactor authentication, which is much more secure than a simple username/password combination. Another critical step that loyalty programs can take is to raise fraud awareness both within their organizations and among their members. For example, companies that run loyalty programs should make their internal teams fully aware of the magnitude of the fraud problem and the potential reputation risk. Meanwhile, they should encourage their customers to think of their loyalty accounts as the equivalent of bank accounts: and monitor them the same way. To help in this regard, they should make it as easy as possible for customers to check their points balances and review their statements for suspicious transactions. Finally, retailers that operate loyalty programs should consider technology solutions that can automatically spot and stop loyalty program fraud. The best fraud prevention solutions use artificial intelligence (AI) to quickly and accurately detect loyalty fraud through a combination of supervised and unsupervised machine learning. With this capability, retailers can identify suspicious transactions with a high level of precision, then exercise real-time judgement to make the right calls for their businesses and their customers. Retailers especially should bear in mind the reputational damage that can be done to their brand by loyalty program fraud. When customers are the victim of points theft, they don’t only lose their points: they lose their loyalty to you. Rich Stuppy is chief customer experience

officer, Kount. January 2020


// 21

Resource Directory Data Analytics

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// 22

Excellent Execution

Getting to know cannabis consumers By Jim Davis

B

Jim Davis is head of cannabis industry,

ack in 2018 Canada legalized the sale and consumption of recreational cannabis: the only G20 nation so far to do so. In 2019 the laws around cannabis expanded further with cannabis derivatives like edibles, drinks, topical creams and vapes becoming legal. There is an opportunity for companies to build their businesses by attracting existing users and the cannabis-curious to these new types of products. The challenge for marketers is to find the appropriate audiences and learn more about them so they will become your customers. Our new report, Blazing a trail: the future of cannabis marketing in Canada, will help you understand the big picture. Here are some of the key findings:

MiQ Canada.

Know your audience There are some broad demographic insights you need to be aware of that might not be obvious. For instance, there is a profound gender split in the uptake of cannabis use. Since legalization the number of men using cannabis has increased 18%, but the percentage of female interest in legal cannabis-related products was down 1.8%. Age is also an interesting area to dissect. Unsurprisingly, younger consumers show the greatest interest in searching online for cannabis products, but older consumers are much more likely to buy cannabis legally. This suggests younger users are still purchasing from their illegal sources, even though the legal option is there. As is always the case though, big picture demographics are only the start. We looked at data from more than 550,000 individual consumers visiting cannabis sites and identified three distinct audiences the cannabis marketer needs to consider. Active users Active users make up 34% of the total cannabis audience. They tend to be over 35 and have a moderate household income ($40,000 to $75,000/year). They’re also disproportionately likely to live in urban areas. Active users have been consuming cannabis for a while and have a good idea of what they like. The way they search suggests an advanced understanding of the different forms and variants of cannabis. They’re generally interested in Sativa derivatives with higher THC (tetrahydrocannabinol, the prime psychoactive cannabis component) content, though that doesn’t mean they’re closed to trying new products. Experimenters The Experimenters group has two subsets: 1. Existing consumers who love to experiment with different types of cannabis. 2. Consumers who are curious about cannabis and are exploring to find out what they like. The existing consumer subset understands cannabis strains and levels and they continue to test out the different variants, such as Sativa, Indica and hybrid ❱ DMN.ca

products (see box). The cannabis-curious consumers are fairly new to the space and are interested in finding out what products work for them. Experimenters also tend to be a younger group than active users; 43% are between 18 and 34, and most are either still pursuing their education or employed in entry-level positions. Their spare time tends to be spent indoors doing things like watching TV or playing video games. What Experimenters are searching for online suggests they don’t know exactly what they want, which is an excellent opportunity for marketers to produce educational content. The kind of content they’re looking for tends to concern the health implications and effects of the different kinds of cannabis. Additionally, hybrids and Indica derivatives are popular with Experimenters. Researchers Researchers don’t use cannabis regularly, if at all. They like to keep up to date on new developments in the cannabis market. The content they look for tends to be news articles around legalization or journals about the health effects of cannabis. These consumers don’t weigh into any particular age group but tend to be female. They consume a lot of general news content and are interested in health and lifestyle content. Reaching your potential customers Understanding the different audiences is just the first step. Cannabis marketers need to develop strategies to reach potential customers while keeping in line with regulatory requirements. The landscape is evolving rapidly, both in terms of the kinds of cannabis products available and the rules and regulations around selling and marketing cannabis. Perhaps more than other industries, you need to stay abreast of these changes to make sure you are aware of the opportunities and compliant with the rules and regulations. To help with that look at our Blazing a trail report; The Canadian Marketing Association’s CMA Cannabis Marketing Guide is also a great resource.

A quick understanding of cannabis Cannabis has three principal variants. ❯❯

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Indicas are typically associated with fullbody effects, such as increasing deep relaxation and reducing insomnia. Sativas are known to induce an invigorating, energizing effect that can help reduce anxiety or stress and increase creativity and focus. Hybrids are typically grown on farms or greenhouses from a combination of Sativa and Indica strains.

January 2020


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Can you help our readers: • Create a strong financial structure and healthy economic ecosystem to ensure capital and cash flow keep their engines running? • Determine who their customers should be, how they can reach them most effectively, and how they can turn data-driven marketing into profitable sales? • Build efficient and effective financial systems to enhance payments and billings between their companies and their customers and vendors? • Convert all the data and information they collect from every contact point into tangible benefits that increase revenue and reduce costs? • Equip their companies with the tools, technology, systems and hardware needed to manage their operations, to create new services or products, and deliver them to their market? • Manage their customers with smoothly functioning support departments that are properly staffed and equipped to solve problems, foster loyalty and retain customers? • Make any or every step in that chain better, faster, cheaper, and more profitable?

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Steve Lloyd 905-201-6600 ext 225 | 1-800-668-1838 | steve@dmn.ca Visit our websites:

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