Most brand representatives know that the customer loyalty space is changing. Transaction-based programs are still dominant, but because such programs are numerous, brands need to differentiate themselves, perhaps by thinking of loyalty as a two-way interaction. That is, brands should not only seek to create loyal customers. They should also seek to be loyal to their customers. To reach this goal, they need to treat data ethically and come up with better definitions of their metrics. Recently, Loyalty360 interviewed Evan Magliocca, Brand Marketing Manager at Baesman Insights & Marketing, to discuss these very issues.
Baesman Insights & Marketing is a full-service loyalty marketing agency that captures and manages customer data to generate insights, build loyalty, and create unified customer experiences for its clients. The agency offers strategic planning services and builds marketing programs founded on customer data. Its API-driven platform is designed to integrate with technologies that clients are already using, and the company offers program management to maintain incremental program growth.
How has customer loyalty changed over the last few years?
The biggest change has really been the brand mindset. Most brands start with the idea that they can just throw points at customers and they’ll keep coming back to them—but loyalty is much more than that and it starts with the brand showing their loyalty to customers first. Sure, points and promotions are a piece of the puzzle, but there’s a deeper mutual agreement of trust, lifestyle, or brand vision that also needs to be communicated to customers to create something stronger. Any program can simply ask, “Would my customers stick around if the points dried up?”
Even hotels and airlines—which are by far the closest to being purely points-based—are tapping into something deeper with prestige and privilege. Customers want that feeling and that’s the driving force behind some of the most successful transactional programs. On the other side, brands like Patagonia and Apple are capable of creating the most passionate, loyal bases simply by focusing on aligning vision and lifestyle to their customers. Brands are realizing the impact behavioral and emotional loyalty can have when they’re integrated within the same program.
What is “next big thing” for customer loyalty?
I think what brands talk about and the reality of what they implement are often dissociative. We talk so much about how far data has come, yet a recent study by Gartner told a different story. It showed how much pressure CMOs are under and that their main metrics still have very little definition.
They cited “awareness” as the most important metric, beating out even ROI. So, while we are moving much closer to a better understanding of our customer, there are still significant headwinds and the pressure on CMOs to produce quickly is mitigating their ability to take time to implement programs that are measurable and ultimately profitable. Another part of the problem is that most martech solutions are siloed and specialized. The bridges brands need to build for so many siloed technologies create integration and measurement problems. So, the next big thing for customer loyalty is really just aligning what we say with what we do.
How sophisticated are most brands’ customer experience and customer loyalty initiatives?
It really ranges quite a bit. We see some experiences that are extremely sophisticated and really beautifully designed, but the industry also has some experiences that are terribly choppy. They have clear lines of demarcation between marketing teams that want to go their own way. We can tell based on the experience that they aren’t working together for the customer. I think there’s a very strong correlation between leadership’s customer-first mentality and the overall sophistication of the customer experience. The more leadership makes the customer the priority, the better those experiences naturally become over time.
What strategies should brands adopt in relation to stricter data regulations?
So many of these issues become so complex. GDPR and American versions of that on the horizon are no different. Obviously, we need to obey and enforce those regulations within our brands, but there’s also a much simpler test. Would you want your data to be available and used in the same way you’re using your customer data? If the answer is no, even though it may not be breaking the law, you probably shouldn’t use it. The best way to understand your customers sometimes is simply to think like one.
What does the phrase “customer journey” mean to you?
The customer journey in it’s lowest common denominator is a seamless, consistent experience from consideration to post-purchase that customers could stop and return to at any point in the journey and resume right where they left off. Marketers treat customers as if they have no agency, no ability to find their way. We guide them too much—we create personas and go too far down the UX rabbit hole instead of focusing on consistency and repetition, which is what customers really value from a behavioral perspective.
What does authenticity and trust mean to you?
Authenticity and trust ARE loyalty. They’re the real foundation of every program—but it’s not a metric we can measure easily so it often gets lost when we think of KPI’s. Amazon Prime is effective, not because of points, not even just two-day shipping, but because everyone knows beyond a shadow of a doubt, they’ll get their package as quickly as humanly possible. It’s all built on trust. Bad experiences, poor customer service and disjointed shopping experiences all weigh negatively on trust and authenticity. And trust is synonymous with loyalty.
What is the future of customer loyalty?
Marketing has always been subject to the pendulum effect. We go too far one direction, then adjust and swing too far back in the other direction. Machine learning and personalization are current examples.
Those are both extremely important, but we often see that some brands sacrifice the whole program for the sake of just a couple of parts. Some aspects that will come forward in the future don’t have much to do with transactional loyalty. Consistent branding, trust-building strategies, hyper-focus on customer service—those are areas that will carry just as much weight as any other strategy in loyalty.
How important is personalization within loyalty?
Personalization is important, but only insofar as it takes marketers closer to reaching a desired goal. Personalizing marketing just for the sake of it is rather useless. We run into a lot of aimless personalization when we start talking to new clients. Everything must have a deliberate reason and purpose. Are you trying to build trust? Increase purchase frequency? Heighten engagement? Your personalization roadmap will be vastly different for each of those, so we need to treat personalization as a technique, not a strategy.
Conclusion
Our discussion with Evan Magliocca squares with a lot of information we’ve been getting from technology providers in recent weeks. The loyalty landscape is changing, and differentiating beyond transactional elements is a must. In this shift, keeping data secure, using it ethically, and defining priorities and metrics are requirements. In addition, brands need to project authenticity and build trust and make sure they personalize for good reasons, not just because it has become standard procedure. We expect that brands that follow these protocols will achieve greater success.