Loyalty State of Mind: Q&A with Brad Rukstales, President and CEO of CAC Group, Inc.

On the tails of announcing CAC Group’s new division to focus on loyalty program performance – Truth in Loyalty™, President and CEO Brad Rukstales shares insights on the state of loyalty today. He challenges marketers to take on the hard tasks related to data, customer feedback and new technologies in order to build customer loyalty. 

Loyalty 360 (L360): How do you define loyalty?

Rukstales: Loyalty today must be more than a program – it is a state of mind, imbedded in the brand that is lived out every day by everyone in the company. While executed in the form of programs, the strategy needs to be experiential in all aspects of how employees interact with consumers and a company needs to measure how a consumer interacts with them (financial impact, social impact, customer relationship). In short, it's not a program anymore - it's an integrated business strategy on a whole new level.

L360: How has this definition changed for you and how do you anticipate it changing?

Rukstales: The competitive landscape has had an impact on consumer perceptions of loyalty-based programs.  If program-based engagement is a barometer, recent studies have shown a significant decline in program participation and activation, both in the US and in Canada.  This is a challenge for companies considering a “me too” program.

This has fostered a newfound interest in understanding the foundational financial performance of programs, as all marketers seek to justify every dollar in their budget.

That's why our approach is really to bring a granular understanding of the program financial impact to the business, covering system-wide impact, program impact, customer/member impact, plus total operations. The strategy must live in the C-Suite, with CEO/CFO/CMO champions.

L360: Marketers are tasked to be more data centric than ever before, yet the challenge of creating actionable insight from data is more challenging than before. Advice for marketers?

Rukstales: Collect everything!  Valuable data can come from anywhere regardless of source, structure, or format.  The smartest organizations work to capture every customer interaction, and leverage data experts to identify and extract the valuable pieces into permanent data structures.  The value of data may not be easy to identify in a single source, rather the insights and capabilities that can be gained when sources are used together. 

The second piece of advice I can give is to invest in analytics expertise before you invest in technology.  Learn what is important before you invest in database technology, cloud solutions, and applications.  Good data scientists can make even the most disparate data sources talk to each other.  Our company’s expertise has its heritage of over 20 years of data analysis and sophisticated statistical modeling and predictive sciences.  This experience means we are able to quickly discern the numerous possibilities of raw data use, as well as utilize proven tools and insights to identify the value of information.

L360: Engaging experiences are the baseline for creating loyal customers. How should brands create the culture by which engaging experiences (even though they may be more expensive to put in place and more difficult to measure) are table stakes for brands?

Rukstales: Ten new customers.  That is typically what it takes to replace the value of losing one of your best customers.   Internal cultural change can only be accomplished when everyone buys in to a concept and agrees that it must be a priority for the health of the organization AND for their individual success.  Driving this type of consensus and change can be done with policies and mandates, gimmicky programs, or employee competitions, but the impact typically is short-lived and does not truly change the culture.  To truly get everyone on-board there needs to be a balance of fact, motivation/emotion, and empowerment.   Showing an in-store employee that their next customer may be worth 10 new customers is the type of fact that makes an impact.   If coupled with training about what they individually can do to retain that customer we have now created a sustainable change in behavior and ultimately culture. 

 

Where analytics and insight come in is in customizing the experience to the value, needs, and behaviors of each customer, both online and offline, so that loyalty is created.  Consumers in today’s world expect companies to pay attention to the information that is available about them.

L360: What will be the biggest challenge for marketing in the next 3-5 years?

Rukstales: There are several monumental shifts occurring in marketing today.  As the Publicis-Omnicom merger shows, even the largest agencies see vulnerabilities of the technological sea-change that is impacting media, marketing services, CRM, and customer experience.  Digital channels are inherently less expensive to utilize, but also less productive in terms of engaging prospects and customers.  The biggest challenge for marketers will be to ensure that they have the discipline to test and measure continually.  The consumer will tell you if your channels, messages, and offers are on track.   Listening to the consumer, both explicitly through research, as well as implicitly through data mining, will always pay off.  While there is more data today than ever, the tried and true approach to test and learn will always be relevant.  Even with the growth of omni-channel marketing, real-time communications, and big data, keeping test and learn alive in the promises of new channels and approaches will be key over the next 3-5 years.

L360: Give us a high level overview of your customer philosophy and share how this perspective helps drive more effective engagement and therefore better marketing outcomes?

Rukstales: Customers are the single most important asset of a brand, as such our philosophy is that everything should start and end with the customer.  We believe that every customer should be identified and treated at the individual level, using the information they provide as well as their behaviors and needs to drive intimacy with the brand.  In addition to traditional means of individualizing WHAT we say based on demographics and behaviors, customers are now telling us HOW and WHEN to engage and they expect us to listen.  Creating true engagement is the byproduct of moving beyond marketing based on an internal calendar and driving towards marketing based on the customer.  Surprising and delighting customers with the personalization of your brand’s values to their lives is where data, insight, and action meet.  Do this well, and customers will become more loyal.  Easy? No.  Important? You bet

 

About CAC Group:
Since 2002, CAC Group has been evaluating and improving many types of marketing programs. It focuses specifically on quantifying the incremental impact of customer-focused marketing activities.

The company's heritage in customer-level predictive modeling, incremental measurement and analytic excellence is aligned with loyalty marketing expertise to meet the needs of the board room and the back room.

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