The standout example of this phenomenon is of course the Grand National, but world title boxing fights and the ubiquitous Football World Cup tournament are others. Punters will open an account, place one (in the case of the Grand National) or a few (in the case of the World Cup) bets and then disappear. The vast majority of these fly-by-night punters never log back into their accounts again in the two months after they join.

Other forms of attrition are tied to the highly promiscuous nature of the online gambler. This is a market in which new player bonuses abound. Players will join with the sole purpose of cashing in on the bonus. As soon as it is clears, they are never seen again. In games in which skill is important, such as poker, attrition often occurs because there is not enough support for the rookie player to help them become more skilled to the point they will want to stick around.

Attrition levels are high across all products within the online gaming industry but there are ways to reduce it by understanding at what point action might prevent attrition and that action needs to be. Through the appropriate use of analytics and ethnographic research it is possible to map players’ behaviour over the lifetime of their account, by looking at their habits, profiles, frustrations, motivations, touch points with gambling and gaming brands etc… It’s then possible to timestamp potential dropouts or dithering moments.

By ‘nudging’ players at the right time and in the right way, both the business and the player win. A ‘blanket’ e-mail campaign without proper targeting is both a waste of money for the company and a source of annoyance for players. Likewise, displaying casino adverts to all customers in the hope that some may click on high-revenue games, is a waste of valuable space for players that would never cross-sell to casinos, and could even scare off contended customers. Click-through rates must be monitored and behavioural targeting considered.

Foviance can provide recommendations for creating the optimal user journey from a Customer Lifetime Value (CLV) point of view, mapped against time. In a world of high acquisition costs, using this information as the basis for a CRM strategy will improve profitability by maximising CLV.

This type of information can also be used to define cross-sell and up-sell strategies. By knowing what motivates your players and at what stage of their player life they are at, website content can be easily tailored to suit those needs. Bingo companies are able to promote and games developers are able to sell the right games, or side-games, efficient advert space for cross selling from sportsbook to casino games can be achieved and decisions about whether to cross-sell or up-sell to certain high revenue punters can be made with confidence.

In the highly competitive online gaming space, maximising every player interaction is vital. By using the correct mix of techniques and tools it is possible to pinpoint user needs with extreme accuracy to a time in their playing life. Businesses can then make substantial savings and increase profits whilst providing users more precisely with what they want. Positive experiences naturally follow when they have been tailored to players, and brand attachment naturally follows from that. Everyone wins.

This article was written as part of our June newsletter

One of the things I like about my job working is a customer experience consultancy is that I’m surrounded by people with a very different outlook on life. Our user experience consultants tend to come from a behavioural psychology background and are great at using qualitative research techniques such as lab testing, eye tracking and ethnographic studies to get into the mind of users and to understand what makes for a good or bad experience. That’s obviously a different set of skill and tools from our quantitative, analytical approach to solving problems using vast quantities of data. Each approach is complimentary to the other with quantitative data good at asking the “what” and “when” type questions and qualitative techniques good at helping to understand the “why”.

Every now and then we get into one of those interesting conversations about which approach is best for solving a particular type of problem. Last week ones these conversations was around the topic of segmentation and which types of segmentation are best for addressing particular issues. Segmentation is one of those popular words that’s used a lot these days in the digital marking world and is usually means different things to different people.

Segmentation is the process of creating groups of individuals (customers, website visitors, prospects etc) that have something in common. Importantly what one group has in common is then different to the other groups. The purpose of segmentation is to make you, your marketing communications, your website experience, your product offering on so on more relevant where possible to these different groups. But how are these groups defined? There are three main ways:

• Demographic segmentation
• Behavioural segmentation
• Attitudinal segmentation

Segments can be defined by demographics, ie based on who someone is. Typically classical marketing approaches to segmentation use demographics as the basis as it can then be used for targeting purposes. Demographic segmentation in online can also be useful. For example, “gender” can be a useful segmentation split as the way that people behave online can be very different depending on whether they are male or female. So be able to segment your audience by gender, age, income etc can be really useful.

Another approach to segmentation is behavioural segmentation. This is not classifying people according to who they are but on the basis of what they do. This type of segmentation approach is very popular in digital marketing as it’s quite easy for us to understand how people behave as we have loads of behavioural data. Again it can be a very powerful technique to group people according to different behavioural criteria and to use that knowledge to improve the effectiveness of campaigns or to present different website experiences. For example, the way that people who are on their first visit to a website is often very different to the way that they behave on a subsequent visit and their needs are also often different. So why not present them with a different experience? Behavioural segmentation lies at the heart of personalisation.

Finally attitudinal segmentation is about classifying people not according to who they are, or what they do, but about what they think. Attitudinal segmentation is about getting into the minds of customers and understanding what makes them tick. People of different genders and ages may have similar needs when it comes to interacting with product and services, they may be trying to pursue the same goal or trying to achieve the same outcome. Often attitudinal segmentation is used for the development of “personas” which are used as tool to help designers get closer to the people they are designing for.

So which type of segmentation is best? Well, of course, the answer is that “it depends”. What problem are you trying to solve? What will you do with the segmentation when you’ve got one? The other questions then are “What data do I need and where do I get the data from?” I’ll be looking at the answers to these questions next time. Til then…

The past few weeks I have been looking at the need for organisations to focus more heavily on the user experience and to more rigouroulsy understand what their customers want online and how best to deliver that to them. Good customer insight is core to that process and insight comes from a range of systems, methodologies and techniques. Last time  I looked at the use of quantitative approaches to customer insight and this week I want to look at some of the more qualitative approaches.

For years in “offline” marketing quantitative and qualitative approaches have been used side by side to understand consumers’ preferences and behaviours. It is only relatively recently that in the online channel that businesses are pulling these disparate sources of insight together to get a fuller picture into what is happening in the online channel and why. Part of the problem has been technological – it’s been hard to integrate data – but another part of the problem has been organisational with different functional silos focussed on different aspects of the customer journey or the customer experience. Certainly here in the UK and I’m sure it’s the same in the US and some of the other more sophisticated digital economies that we are beginning to see roles and job titles such as “Director of Customer Experience”. Something we didn’t see a couple of years ago. With functional integration we are beginning to see more data integration as joined up thinking requires joined up data. Part of that integration involves the “blending” of hard quantitative based data with softer qualitative data collected using a variety of predominantly observational techniques.

Website usability testing has been around for ages (in digital marketing terms) and has been a core tool in the website development process for many organisations. But I am still constantly amazed by how many organisations don’t do any usability testing either during or after the product development process and still spend large amounts of time and money on developing sites or functionality without testing to see whether typical users can actually do what they wanted or expected to do. Simple usability testing can tell you a lot about why things don’t work that you would never get from staring a bunch of web analytics reports and given that often the respondent will be talking about their experience at the same time, you not only get to see why things may not be working, you get to hear it from the horse’s mouth as well. Usability testing techniques are evolving all the time and methodologies like eye tracking are becoming standard features of most tests rather than expensive optional extras. Eye tracking shows where the user is looking and combined with other data such as a click map from a web analytics system is really useful for page level optimisation requirements such as merchandising and promotional work.

One of the criticisms about usability testing is that labs can be an artificial environment in which to observe the user experience. As a result we have seen more use of “ethnographic” style research in which customers are observed interacting with websites in their “natural habitat” such as their home or their work place. For one piece of research we conducted for a retailer we went out into the homes of customers to see how they managed to use the website in their own environment. Pictures fed back to the client showed users balancing laptops on their knees on the sofa or standing in the kitchen with the laptop on a worktop. We might think that customers are focused on the site but the reality is that they could be in an environment which is full of noise and distractions and it certainly puts a different perspective on the kind of experience they may be having.

Some of the newer and more innovative qualitative approaches to understanding the user experience include techniques such as electroencephalography (EEG) to try and measure emotional engagement. This approach uses brain scanning techniques to monitor subconscious responses in the brain when users are subjected to different stimuli on a website. How do they emotional react, for example, to different types of messaging, images or layouts? It’s like eye-tracking on steroids.

With all these innovative developments though the fundamentals remain the same and that’s the recognition that good user experiences cannot be built in a vacuum and without a deep insight into, and empathy with, the goals, aspirations and expectations of our customers. The data, the tools and the techniques just help us to get there.

There has been grumbling in customer service forums, but it’s had little effect. Businesses have been looking at improvements, but they have been focused on adding and optimising single channels. Integration has been a relatively recent phenomenon.

I believe the recession will be a catalyst for change, as it has been so many times before. The need to save money has placed business operations under a microscope and this will drive businesses to integrate previously disparate channels so that cross-channel service delivery becomes a reality.

Foviance has already seen a big increase in the number of organisations that are asking us to map out their customers’ journeys across all channels. We have then identified how the lower cost channels can be used to save money, without causing damage to the customer experience.

This is an area where co-creation is an excellent approach as the answers come from our consultants, customers and their customers working together, rather than in isolation. Indeed I would extend the group even further and include call centre consultancies. Many of these have already helped organisations identify a huge number of operational efficiencies. Without the constraint of a single channel, they could find new opportunities for further gains.

It is pleasing to see publications such as Customer Strategy, which has a long heritage in customer service and call centre strategy, embracing the change that is required and projecting itself as more cross-channel in its editorial approach and content. For example, the publication is currently running a series of masterclasses, the last of which in July is focussed on helping organisations establish a cross-channel approach to improving customer service and cutting costs. The masterclass will be run by RXperience. The course description includes the words “using a contact strategy that reinforces your brand”, and if organisations do start to take this approach, perhaps motivated by the recession, we will see a step change in the quality of customer experience delivery.

A mental model can be defined as: “An explanation of someone’s thought process for how something works in the real world” (Wikipedia, 2008). One of the best books I have read in this area is by Indi Young, titled ‘Mental Models – Aligning Design Strategy with Human Behaviour’. This book explains what mental models are, when and why you should use them and what they can bring to a project. It begins with the belief that good design depends on empathy, which in this case means “that you completely understand what a person wants to get done and that this is distinct from simply studying how a person uses something.” Young outlines a detailed methodology that involves conducting interviews, carefully combing through the transcript identifying tasks, feelings and philosophies, recognising patterns and then building an affinity style model.

Mental models will not only show the tasks that customers do, but also how and why customers accomplish something. Indeed, one of the most important elements is not only understanding customer and emotions but also underlying influencing factors. By understanding these factors it is possible to develop strategies to improve the overall experience. This year, we conducted some ethnographic research for one of our multi-channel clients in order to understand their current customer experience. As part of this research we mapped out the experience shaping factors and how these influenced the cross-channel journey of specific customers. This proved to be extremely valuable and the visual deliverables talked to stakeholders at all levels.

In conclusion, mental models can complement other techniques, such as Personas and Scenario or Journey Mapping in order to provide a more complete understanding of customers. This understanding can be valuable throughout the design lifecycle to align existing products or to trigger new concepts. I believe that many brands will benefit from a more strategic approach to customer research and that through investing in understanding customers’ minds they would develop a knowledge base upon which future design developments would flourish.

Multi-channel retailing provides an answer to this dilemma. If implemented effectively it can prove a catalyst for change across your business, moving away from product-centric operations to a more customer-centric organisation, thereby developing a model that meets the expectations of future customers whilst delivering profitability and growth. The opportunity lies in understanding how to win and retain those customers of the future demanding to buy what they want, when they want and where they want.

To achieve this, multi-channel retailers must first understand who their customers really are and then segment them into groups which share common characteristics. Only then can retailers understand the lifestyle touch points, wants, needs and influencing factors that their brand can be associated with. In order to achieve this, insight ‘personas’ are a must.

- What are personas?
Personas are fictional, but realistic, character sketches based on a break-down of the target audience into groups of users that exhibit common characteristics. They are created using knowledge drawn from customer experience research (qualitative), web analytics and survey data (quantitative), as well as interviewing influential stakeholders of the website.

- How are personas used?
Personas are used throughout a site review or re-design project. They help build a shared understanding of who will be affected by any site re-design, the relative importance of different groups to the site, and how different groups are motivated. In detailed design phases, personas can inform design decisions by allowing multi-channel retailers to explore a range of ideas, hypothesise the potential consequences on target audiences and select the best options.

I have worked with the largest and most successful retailers in the UK and globally over the past three years helping them achieve an enhanced online customer experience, and yet I often still take time to ask the question: “Who are your customers?” My clients know the answer to this based on research they have conducted and their perception of who they wish to target, however there is often a deeper requirement to understand more about the characteristics and buying behaviours of these customers.

How exactly does a retailer deliver the right online content for the core persona while satisfying the needs of secondary personas? The internet is the most measurable medium available and most organisations have rich data available to them in the form of web analytics, pre and post purchase online surveys and so on. This is a good starting point but further research must be done to truly develop an accurate persona, such as ethnographic research (this involves observing a customer or acquisition target in their natural environment), focus groups, usability testing and in a multi-channel environment, interviewing customers in-store.

Pulling all this data together is of course a skill in itself, as well as a core competence of Foviance.