Recession, Retention, and Loyalty

Consumer Research reveals that brand loyalty hasn't priest, but the question is why. In this podcast, we'll discuss the latest research on loyalty trends and reveal omnichannel marketing strategies that deepen customer relationships, improve retention, and drive business growth faster than ever before. After the break, we'll be joined by Kelsey Jones, Global Head of Product Marketing and SAP of Marsis and Pamela Erlickman, chief evangelist officer at debit to discuss this and owe so much more. Kelsey, Pam, thank you so much for joining us, and I wanna dive right on in. Thirty three percent of marketing leaders will prioritize customer loyalty in twenty twenty three. And I know loyalty is an important thing for both SAP and Marsis, and Jevid, and a key part of your business. So what does building true loyalty mean to you, Kelsey? Yeah. And I absolutely love this topic, JD. I think, you know, we think we're all consumers in some way, shape, or form, and it's a very relatable topic even thinking about kind of who are we loyal to, loyal to over the past, you know, two, three, even five years and and it's changed tremendously, which is a lot of why we're here talking about this topic today is loyalty has changed. You know, historically, you know, marketers and brands have really focused a lot of their time on incentivize loyalty. Right? When we think about discounts or rewards, that are particular to that brand. But this is really only one piece or one type of loyalty within that purchasing decision or that purchasing machine. You know, when we think about, you know, brands really aspiring to have true loyal customers, they need to consider a truly omnichannel customer engagement approach. And what we mean by that is it's not just about one email that's going out, one engagement in a store, one push message that's being sent. It's really about that entire experience all the way from every kind of marketing message down to the shipping and the delivery and that package even arriving at your doorstep. It's that entire experience that is inclusive of of all those omnichannel touch points that's going to create kind of those different experiences, that that a customer has throughout that entire life cycle. I think the real difference we've seen in this shift of loyalty. It's not just about kind of that one and done game around kind of discounts or purchasing. Those are still important things and they are meaningful. To consumers, but I think we now have to look from a brand perspective at all of those different omnichannel touch points across the customer experience to really drive that knew kind of true loyalty. Pam, you wanna add on to that? Yeah. Sure. I'd love to. From our standpoint, You know, when, when we think about loyalty, especially in a world where competition's increasing, you've got, you've got D to C businesses popping up everywhere, against traditional, traditional brands. We really think about who knows their customer best. And not just knowing what products they want, but who's really focused on understanding the why behind the buy and, and their wants and needs. So For us, when we, when we think about this, we are, we are really truly thinking about how do you understand your consumer better than your competition? And how do you align not just the product, but how are you aligning, you know, shared values and experiences in going again way beyond the trans to deliver a better experience because the stakes are higher and consumers expect more now. To add on to that then, Pam, thirty one percent of of customers cite personal shopping experiences as the reason they stay loyal to a brand. So how are companies prioritizing personalization to build relationships with customers? Yeah. I think it's a huge focus. And I think before personalization was talked about in this, like, trying to create this utopian world of everything being perfect and seamless. And it's just not that. You you won't get out of the gate if you're trying to focus on having all of it to to perfection. I also think personalization went awry in trying to guess from inferred data sources. You know, so you started to see personalization that you know, went from either just using my name, which isn't really personalization, or using what I clicked on and things like that. And that might not be right either So the paradigm shift that we have seen is really asking consumers directly. So through interactive experiences, you're asked asking consumers what they want, what they're looking for, why they want it, what, you know, all of these things, and putting control in the hands of the consumers, in letting them tell you because if they're telling you, then you'll never be wrong. You're you'll be able to, you know, personalize the experience based on exactly what they're asking for. So last year's customer loyalty index report, we measured five different types of loyalty, incentivized loyalty, inherited loyalty, silent loyalty, ethical loyalty, and true loyalty. Interesting enough, compared to this year, true loyalty is the only type that has not fallen in popularity. Chelsea, I'm curious your thoughts on why this type has remained despite the economic impacts facing consumers across the globe. Yeah. I think kind of these first two topics that we just talked about around kind of loyalty is it can't just happen in a silo. It has to be across many different touch points from an omnichannel perspective. But then as Pam was saying, right, we have to think about personalization. It's not just about one aspect of personal about your name and an email or one click or two clicks that you website. It has to be thought about more holistically and considering all of those touch points across the entire customer experience. And that's, you know, I think is the key to why it's fallen in popularity. Kind of as we think about that over time, it it's all of those different touch points. It's not easy to do. I think even as we look at brands and even some of our customers today, it's find kind of one place to start and what experience you wanna optimize really well. Start there and kind of I always think of, like, the crawl walk run methodology, you know, where do you start? How can you create a really loyal experience then? What's the next piece of data? That you can drive for personalization that can make it easier. Once you start to put kind of those blocks together or those nuggets together, is where you can kinda consider that loyalty, true loyalty to happen across the experience because we all know. Right? You can't boil the ocean when it comes to personalization all of these channels, especially as you think about how many different teams and organizations within your own company are are in charge of those different touch points or those experiences. So start where you can kind of control and then figure out what are those different touch points that can enact true loyalty across the entire experience. Pan? Yeah. I would just add on. Buy now. Shop now. Do this. Do that is not loyalty. It's just not. And so I think, you know, as as we think about the changes in loyalty, like the buzz word is gamification, right? So, and and and better consumer experiences. And I think that's what's coming across in the study is sure you can give deals and discounts, but I think the interesting thing is we've proven you don't have to, you know, just a great experience that ends up giving me a product recommendation or an experience that unlocks a piece of content or exclusive access to something. You know, things like that in terms of communications instead of just, again, buy now. Shop now. Do this, do that. Is really getting consumers' interest in capturing their attention right now. So I'm gonna stay with you, Pam, then. How important is data when it comes to building relationships and increasing customer loyalty. Oh, you don't need it. No. I'm just kidding. I work for a zero party data company. Of course, data is important. Date so so what's critical? Data is critical. Let me just say that. What has shifted is how you get that data and what data matters. And so I came from, you know, but my past life of huge data lakes and trying aggregate anything and everything and just collect it all. In one, created the consumer, and we have data privacy regulation and things like letting us know that we, you know, the industry as a whole needs to kind of change its ways of it. And two, the data that matters in terms of, like, activating you know, getting to that purchase or getting them next step in the journey or things like that are not the traditional things that everyone's used to like demos and things of that nature. So as a brand, you really have to think about what are the critical, you know, three to four pieces of data that actually will help me put the right in front of them or give them the right experience. You know, just as an example, I will say, you know, all the time going back to the demo you know, if I'm selling jeans, knowing my age is probably not the most important thing to know about me, right, knowing the kind of jeans I want the fit all of that is way more important to help me in my journey. However, if I make skin care brands, and let's talk about fine lines and wrinkles for a hot second. You know, alright. Knowing my age, that makes sense to me as a consumer, and I'll give you that information because I see how it's going to help in your recommendation. So data, just to sum up that, data is massively important. It's really now about focusing on what is the data that moves the needle for your business depending on who you are and what you're trying to sell. And are you capturing it in a transparent and clear way to that consumer so they understand how they got that information from you? Well, I have a follow-up. And and Kelsey, I wanna start with you kind of a two parter here. What are some ways you leverage data to create loyalty building experiences. And what does your relationship look like with your IT team to accomplish this level of quality experience? Yeah. I think kind of it's two things in going back to Pam's exact point, like, data is. We used to say content is king. Now it's data is is king. And but those things have to go together. Right? It's what you're delivering with that content is is driven by the the insights from the data that you're getting from those consumers. And I I I think when we're looking at kind of those different relationships and what that looks like with an IT team is really important. Right? Because if those two things aren't in lock step of kind of IT knowing what data you need to unlock and what you have access to. Like privacy per first personalization is absolutely imperative. Right? We look at the the shift in consumers over the last, you know, several years. We're really moving to this privacy first personalization. If we're not adhering to that, right, we're gonna lose trust with those consumers. When we lose trust, we'll we we lose loyalty. Right? And loyalty is really what drives customers coming back time and time again, purchase after purchase. So I think It's really a balance of that. I'm really working with IT teams to know what data do I need and how do I make sure I'm getting that data and using it in the right way is truly critical. I think a great example from one of our customers in Nova Sport, they're a leading sports apparel a brand in Mexico. They spoke with us and shared, you know, they always say that loyalty is data, which I think is a really cool thing to think about and really If you put loyalty and data really at the center, if you wanna create that long term relationship with your customers, you have to use the data. You know, the first year of their loyalty program. It was really important for them to collect the data that they had, but then also collect new data every day and figure out how to use it in the best way possible. But in the most respectful way to those consumers, right? It's it's that value exchange. Making sure that we're we're they're we're getting data from consumers, but we're using it in the right way, to make sure we're giving our consumers you know, a value exchange for giving us and providing us the information. Yeah, Pam? Yeah. I'll talk value exchange all day long to Kelsey's point. Because at at Jevit, that's really what we've been focusing on. And there's six there's six forms of value that we find, you know, work time and time again. And I touched on some of those earlier, but just just to echo what Kelsey was talking about, give me a recommendation, save me time, you know, entertain me, teach me, test my knowledge, unlock a benefit for me. As I mentioned before, you can give deals and discounts we've proven over and over again, you don't have to. If you're giving that genuine value in building a relationship with a consumer, that is going to get you the results, you know, the the high completion rates, the highly captured rates in the case of loyalty, keep repeat purchases, and and lifetime value. Speaking of building relationships, we found that brands are customer obsessed and are more likely to be using an omnichannel strategy, and we see up to sixty two percent higher margins, fifty two percent improved customer interactions and fifty four percent stronger customer retention and loyalty. So do you yourselves see any correlation between being customer obsessed in incorporating an omni channel strategy among the clients you serve, Kelsey? Yeah. It's a great question. And I think, you know, Pam spoke to this a lot earlier about talking about the customer and being at at the center of of making those different decisions and understanding the data you need around that customer So, you know, when we think about kind of customer obsessed businesses defined even by Forrester Consulting, right, it's about putting customers at the center of leadership. At the center of strategy and truly at the center of operations and processes. And, you know, with Columbia, you know, they're doing just that to achieve an omnichannel experience, right? It takes different teams to, to pull all of those pieces together to put the customer at the center because there's many different touch points. And they've empowered, you know, different program managers across their marketing channels and their different teams to really own their strategy in their brand and in their domain, but then also enable really quick agile innovation. And when we think about marketers today, like, being agile is is the name of the game. Like, things are moving so fast that if we're not able to put in you know, processes and programs can adapt that we can adapt to and even technology, quite frankly, that can adapt to those different speed and agility. We're gonna be left in the dust by our competitors. Right? So to do that, you know, Columbia built out this really cool center of excellence, that really focus on bringing together different teams. Different processes, and they could share those across the different brands, that they had. And they have their technology team, right, that we talked about, including you know, different, you know, Amarcic success teams who put the support into all of their their different brands and really learning from each other. Whether they have their acquisition marketing teams, their paid search, you know, even their social teams. And then their retention teams when they talked about bringing those in and representing those loyalty programs. And even their email teams, all of those different areas and teams had to come together to say How do we put the customer at the center? What data do we need to make sure that we are understanding those insights and then implementing those best practices not just in one brand that we're supporting, but in multiple brands that we have across, the different ecosystem. And specifically when we think about Columbia, right, in multiple different brands that they're supporting. How do they do that with operational efficiency? I think creating those different programs with the customer and loyalty at the center is is really key to success for them. Pam? Yeah. I would say I fully support and agree with the fact that brands who are customer obsessed are focused on omnichannel because they're focused on connect connecting the dots across for the consumer. It's not about the channel silos, right? And that's the hardest part I think in a lot of the big brands that we work with today is how do you break down these silos so that the email team gets some great insights and passes it to the social team for better audience building and and and things of that nature. And so that's That's where I see the Achilles heel for a lot of, like, truly, truly connecting the dots is those teams still operating in those siloed fashions. Just to just to give a couple of examples, ASIX, for example, does a great job with a welcome onboarding. When you join the one loyalty program, you get met with this, what type of runner are you personality quiz. They are collecting twenty two data points in that experience. Because if you think about that moment in time of just joining a new a new program, you're never gonna be more committed and more involved and more willing to give your time and attention at that point. And so the the most important part though is they're not just holding that data themselves. They are sharing that with all of the other channels to make sure, again, that that consumer's experience is seamless across touch points. So activating the data in, again, better personalized email follow-up. We do that all the time with with our friends at Marsis. We, you know, be building better, loyalty audit, you know, built better new audiences by uploading that zero party data and building local likes off of that, you know, better retargeting based on answers that they've given you in the quiz, those are all just, you know, some of the ways that you can truly connect the dot, like, real time and for real, not just in theory, but for real with with the data you're capturing. So what challenges, Kelsey, do you anticipate with loyalty for the second half of the year and into twenty twenty four? How can companies overcome them? Yeah. And I think, right, we're all leading into holidays no longer just the last month or two of the year anymore. Right? We just look at Amazon. I'm having prime day in July, right? Almost like Christmas in July. All of these moments are are now becoming across the entire year. So there's no longer just you know looking at loyalty and and all of those data points that Pam was just talking about in in one go. It's really finding those different moments that are happening across the entire year. That are gonna be really impactful to how you're using that data in your different loyalty programs. When we look at the second half of this year, you know, What's gonna be important, I think, for brands is is really seeing the challenge around keeping up with actually business expectations. And having really clear visibility into how specific loyalty programs are just loyalty in general is performing. And understanding, you know, what stage of the customer life cycle should you be, you know, focused or spending your time and your resources on. You know, it's all about kind of agility, which we talked about, just a minute ago, and having that connecting leadership and strategy and operations to really make sure that's tight alignment. Between your marketing and IT team. So I think it's not just about like putting our marketer hat on. We're we're both left brain and right brain, creative and analytical. I think as we go into the second half of the year, how do we make the most of these different moments of driving, you know, data and content from all of these consumers but making sure we're putting our our consumer at the center and measuring that. Right? How do we make sure that we are being the most efficient with our time and our resources? Is gonna be super critical as we head into the second half of this year. Pam? Yeah. You you say challenge. I say opportunity because in a down economy, right, all eyes turn to retention. And so loyalty marketers have a chance to be the stars here. And the thing I would say just in general is when budgets get tight and and, you know, if focus needs to happen, I think what a lot of brands tend to do is just stick with the playbooks that work, and they don't innovate. And I'm gonna challenge everyone to say that is actually you should be doing the opposite because everyone else is now doing the sea of sameness, and this is your chance to innovate and break out and do something different. Money. So, so as a whole, that that that's my recommendation. And then to Kelsey's point about holiday, in us talking about data and what's important, you know, I always call it the season of dirty data because this is when everyone shopping for other people and everybody's databases now get yucky because they think all of these people purchase for themselves. And so and then as consumers again, you get this endless barrage of emails and retargeting and everything going on and you're like, wait a minute. That was a gift for someone else. That wasn't for me. And so going back to our point about asking and letting consumers drive the personalization in the holiday time, the most important question you can ask is is it a gift or is it for you? And I I recently did a presentation with our clients at free people. And last year, they did a holiday gift guide. And I asked the audience, you know, what percentage of people said they were shopping for themselves versus someone else. And the answer was fifty percent answered that they were shopping for themselves. And so my point to the audience was if you had guessed, you would have been wrong with half your consumers. So it is critical to ask them and get context correctly, especially during the holidays. Wonderful stuff. This has been great. Pam, I'm gonna start with you final thoughts for us today. Yeah. I think, number one, thanks for having This this has been super fun. I think for for me, my my words of wisdom here are, again, in a world of more data privacy, Google, and Apple, and messing with everybody, all marketers' lives. I think, you know, my recommendation is, again, put put it in the hands of the consumers, let them tell you. We have a saying over here of just ask, and they will tell you. And I think, I think that's the most important advice I can give is just ask them, put it in their hands, and you're going to get way better outcomes and more accurate and better data by doing so. Kelsey? Yeah. I love that. And I think you're exactly right. Just ask, but also listen. Right? What are you gonna do with information? How are you gonna make it contextually relevant? I love that stat of I even think for myself the holidays. I am shopping half the time for someone else. Listening to those different context and pieces and making sure you're implementing those into if it's a loyalty program, whatever strategy you are, I think, to your point, it's not always about doing the next thing and innovating on the next thing. What's working and working really well and refining those into your programs measure those. Make sure it's driving the ROI that you need. And if it's not, where do you need to optimize internally to say, hey, what teams do we need to get aligned to be more focused on this creative or this content or these data sets? Where do we need to come together with marketing and IT to make things more efficient? So I think it is listening, understanding what is and isn't working, and make sure you're making the right right tweaks and and not changing the ship completely when something is going going well from a loyalty perspective. But so those would be, my thoughts, but this has been a fantastic conversation. Thank you again for having us. Kelsey Pam. This has been great. Thank you again for joining us here today. What a great discussion, and thank you again to Pam and Kelsey. To learn more, check out Amarsa's white paper. Four steps for better relationships, retention, and revenue at w w w dot amarsis dot com. Thank you for listening.