Monday, November 6, 2017

Brands Proving That Knowing Your Audience Is Key

Last month, I covered the importance of customer experience for the Millennial generation. Just in case you missed it, I’ll restate my disclaimer:

I am Lauren Hlavin, and I’m a Millennial.

It’s true, I’m one of the 92 million Millennials that are currently coming of age into peak buying power. We’re making big life decisions and big purchasing decisions, too. While it’s more important now than ever to make sure products, services, and messaging are being catered to the largest and most connected generation in U.S. history, there’s an even larger lesson hidden in this race to win over Millennial wallets–brands must know their audience (no matter the generation). My two favorite examples of companies winning at “knowing their audience” and turning it into strong revenue streams are Spotify, Amazon Prime, and Starbucks (Incredibly Millennial of me, right?) But the reasons they stand out aren’t generation-specific: it’s all about a personalized customer experience.

Spotify
Spotify offered a student rate for their premium streaming services. They met me where I was–an hourly-income earning, study-crazed student who wanted accessible music to pass the hours. They gave me access to billions of artists, songs, playlists based on mood, and of course I was hooked. So when it came time to fight the good fight in the post-grad world, there was never any hesitation that I would pay up for the once discounted premium service. I’d become attached to my Spotify experience, which continuously enhanced with new technologies. For example, Spotify began to learn what kind of music I liked and curated playlists personalized just for me, whether I wanted to listen to a carefully crafted playlist of my tried-and-true favorites, or explore new artists I might like via my Discover Weekly playlist. Algorithmic customer experiences like Spotify’s help customers like me not only fall in love with brands, but build relationships with the product–so much so that I’m willing to fork over an extra chunk of cash every month in order to not give it up.

Amazon Prime
It’s not uncommon for me to get antsy and quickly irritable when I am expecting a delivery, which left me constantly questioning, “Why does this delivery have to take two weeks?” Amazon didn’t understand that timeline either and presto: Amazon Prime transformed my online shopping habits. PrimeNow’s release in 2014 took that typical two week wait and slimmed it down to a mere two hour wait for some basic necessities. It paid off, with Amazon’s total revenue growing from $74 billion in 2013, to $89 billion in 2014, and Prime customers spending two times the amount that non-Prime customers do per year. Amazon Prime’s mastery of satisfying the “I want it now and not a minute later” customers is remarkable and well worth the Prime membership fee that hits my checking account at the end of the year.

Starbucks
Are Millennials really that unpredictable when it comes to spending money? Or, is it that our tendencies are polar opposite of our parents? Our parents were brand loyalists–no matter the experience they had to endure. We are referenced as “unpredictable” because if we don’t have a quality experience there’s nothing stopping us from switching to a brand who will give one. Starbucks is an outstanding example of owning customer loyalty. Take their in-app mobile ordering capability for instance: I can send in my order before I leave my house in the morning, make a quick right into the parking lot, go in, grab my coffee, and I’m back on the road in under 30 seconds. Talk about catering to the “microwave generation” that survives off of instant gratification. Starbucks’ mobile order initiative has not only made it incredibly easy for me to get my favorite latte and still be on-time for work but it’s also driven me to spend more money. In its Q2 earnings, Starbucks said that mobile payments made up 30 percent of all transactions. In the past I’ve evaded the Starbucks money-drain because the line was too long and I didn’t feel like waiting. Now? My drink is waiting patiently for me the moment I open the door. I’m not just paying for coffee, I’m paying for the experience and convenience factor.