October 2013

Move Over FMOT….There’s a New Player In Town

FMOT…..the first moment of truth.

In the retail world, this is known as the moment a customer has an intent to make a purchase, and is standing in a store aisle faced with products to choose from. Proctor & Gamble coined this term to describe the 3-7 second period in which a consumer makes up their mind about a product on the shelf. Placement and in store marketing were factors in determining the FMOT for any given product. But that was then…..

Move over FMOT, because we’ve got something else to worry about. That, as recently coined in the retail world, as ZMOT – the zero moment of truth.

This is more urgent than FMOT, as the zero moment of truth happens before the consumer is even in front of the product in a store aisle. Google explains this as online decision making prior to making that purchase. According to the Google trailer, 84% of Americans engage in this “Zero Moment of Truth” behavior before making a purchase, with consumers using an average of 10.4 sources before making a decision on a purchase. That statistic is from 2011, so it’s likely higher than that now.

What formats are consumers finding the information they are using the make purchasing decisions in the zero moment of truth?

1. Word of mouth – friends and family

2. Online review sites

3. Retailer websites for comparison shopping

4. Social media

5. Online product searches

The trailer below gives you a sneak peek into the ZMOT phenomenon…..there is an e-book available for download from our friends at Google. Next week we’ll be sharing some highlights and what it means to make the most of the zero moment of truth.

Baseline Mystery Shopping

When companies have not used mystery shopping to measure the customer experience, they typically find out more than what they bargained for.

Typically, they start with a standard evaluation to get a baseline of what is happening in their locations. In most cases, employees are not informed that this baseline program will be happening so that companies can get a true picture of what is happening in each of their locations. This covert baseline allows for true measurement, as employees will not be “on their toes” knowing this is happening. The program typically runs with shops at a higher frequency, once or more per week, over a four to six week period across a variety of days and times of the day. This is a great start to see where employees are the strongest, and what operational procedures need to improve.

However, it often time reveals information that the company may not have been looking for, yet is very useful when measuring the customer experience. This is most true when companies are not already using customer feedback programs or asking the right questions.

Take, for example, the retail store that has several locations. They started a baseline program to evaluate the employees, determine strengths and challenges, and roll out a new training program. In the evaluation report, they asked mystery shoppers to indicate whether they’d return in the future, and their reasoning for it.

While their operational checkpoints were strong, with employees tending to stick to the correct policies and procedures, they found that many of the shoppers would not return because of their selection of products. A secondary theme they found among the baseline reports revolved around the way cashiers were bagging items – while this was not a part of the standard evaluation, comments in the last section asking why a shopper would or would not return revealed that many cashiers were not bagging items correctly, often times placing lighter items underneath heavier items, or not double bagging heavier items. While this was not something the company set out to find, this was an issue that was affecting the customer experience and one that could easily rectified now that they were aware of it.

Another beneficial question to ask is “If there was one way your visit could have been improved, what would it be?” or the offshoot “What is one thing we can do to improve?” Companies have received helpful and valuable feedback by asking these two simple questions as part of their program, especially when it’s part of a baseline evaluation.

It’s the little things sometimes that can really stand out when companies are measured using a mystery shopping program. Make the most of your program by asking these types of questions in addition to the objective, operational based questions to get the most impact from your program.

Walgreens Sees Success In Loyalty Program

In attempt to stay competitive, Walgreens launched their Balance Rewards Card in hopes of gaining customer traction, especially where prescriptions are concerned. The company lost market share in prescriptions in the recent past and was looking to regain some of its ground.

While the Balance Rewards Card helped in that respect, they also used the data to increase profits. Earlier this month, the company reported an 86% increase in fiscal fourth quarter profit. This is great news for the company, who still experiences challenges with customer traffic.

What are they doing to improve their numbers?

One simple task is looking at the data from their loyalty card holders to improve product offerings within their stores. Referred to as “the front of the store”, the company looked at purchasing habits to offer a selection of products that were well received and attributed to the higher sales in its locations.

This is a great example of using consumer data to its fullest potential. The analysis and action yieled positive results for Walgreens, and the boost will likely encourage the company to continually monitor consumer buying habits as well as feedback to continue on this financial upswing.

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