Is the future of loyalty pointless?
I had the pleasure of being interviewed in advance of a panel session run by Red Badger discussing the future of loyalty.
A transcript of the interview with Gary Gould , Red Badger’s Marketing Director is below, along with a link to the original post and the on demand video
Gary Gould, Marketing Director, Red Badger (GG): Many of Natura & Co’s brands are championed as forward-thinking and your Commitment to Life programme is a testament to the ethos of the group, do you believe this vision and purpose is a driver of loyalty and community?
And if so, what do you do to foster those communities and keep them engaged?
Gianfranco Cuzziol (GC): So yes, absolutely. As I imagine is the case with many other brands, customers are loyal for many reasons; Vision and Purpose, Trust, Product (Quality and Price), Customer Experience (including convenience) and dare I say it, the value they get from any loyalty programme.
In reality, it’s usually a combination of all those and the challenge for brands is to recognise the level of importance each plays for each customer.
I’m not convinced there is always a need to create formal communities around vision or purpose but there is often an opportunity for brands to create moments for purpose to be celebrated.
For example, Aesop globally has cleared the shelves of product in some stores to showcase fiction, non-fiction and poetry by LGBTQIA+ authors, in a gesture aimed at raising awareness and empathy.
We then share the event across relevant touchpoints and allow our customers to engage should they wish to
GG: That’s interesting, loyalty or engagement can’t be forced, it has to be natural and I guess that is all wrapped up in your brand and how it engages customers.
In what ways has your role as CRM & Personalisation head changed over recent years? With a growing emphasis on building a fiercely loyal customer base, what are some of the things that you find you are dedicating your time to?
GC: Delivering relevant and frictionless experiences has always been key to CRM which I see as being the bridge between the brand promise and each touchpoint the customer has with the brand.
Customer expectations have of course evolved, and expectations are higher than ever across all the loyalty parameters.
Customer experience (CX) demands have been accelerated by macro-economic influences, technology and of course service levels brought to market by brands in completely different sectors that have created an ongoing battle to outdo each other in delivering the ultimate relevant experience.
The agenda is set by Amazon, Netflix, Monzo etc. We now have to ensure consistent, connected and seamless experiences from store to mobile to in-game and more, but also show that we know the customer.
Consequently, one of the areas that I’m interested in is actually how a subscription model can be a de facto loyalty programme. Subscription has many of the components of what a loyalty programme should include in its thinking.
From a Group perspective it’s also about figuring out, taking a page out of the automotive playbook, what is the shared set of ideals, technology, resources and processes upon which four very distinctive brands can continue to deliver something unique to their loyal customer base
GG: Subscription and paid loyalty schemes are certainly emerging as entirely new operating models - particularly by digital natives.
Centred around a product and a community, there seems to be an acceptance and almost expectation from consumers that they can ‘buy in’ to a brand in some way.
With that in mind, what do you think the future of loyalty programmes looks like? If you could design one from scratch right now, what do you think it would look like?
GC: There’s obviously no cookie-cutter for the ultimate loyalty programme. The shape is so dependent on the business model, audience and competition but I would certainly bear in mind:
What’s the ultimate goal of the programme (LTV, retention or acquisition)?
What behaviours are you seeking to influence/recognise?
How do you make it relevant and accessible to your customers?
But I think a key premise for any programme is flexibility. How do you take the key pillars and create something that can flex according to business and customer needs?
GG: Digital tools and technologies have made all three of those questions easier to answer and yet infuriatingly nuanced when it comes to implementation. Experimentation and a constant test-and-learn approach are critical - as is including the customer in the process.
What three things do you think all loyalty and CRM leaders should be thinking about today to build better loyalty programmes and engage their customers better?
GC: I can’t help thinking about how loyalty and CRM have three inextricably linked elements that must be considered.
Trust is key in loyalty and CRM in particular when only roughly 50% of consumers trust brands.
Trust has many facets to it as well: product, data, and provenance to name but a few. At a very human level, I’m not going to be loyal to someone if I don’t trust them.
Trust is linked to Consistency - do what you say you’re going to do. Don’t overpromise and underdeliver. That also means being transparent about how the loyalty/CRM programme will use the data collected.
But also linking back to the purpose and vision, I don’t believe consumers think all brands they are loyal to are perfect so being transparent about how far you are into your purpose and vision is important.
And the last element that supports trust, consistency and ultimately loyalty is being Personal. Notice I don’t use the term personalisation which I often think is a very one-way street.
Being personal is about finding the right balance of personalisation and customisation by the customer and where possible adding the human connection which is often a point of difference that consumers value.
We often forget that data isn’t generated by an app or a till receipt. It’s generated by humans.
The original interview can be found the Red Badger blog and the on demand panel session here