#452:The 7 Essential Components for Cultivating Customer Loyalty Marigold
Creating customer loyalty is both an art and a science, and the best brands invest in expert advice as well as the best technology.
In today’s interview, we’ll explore how to optimise these key success factors, what works, and why!
Simon Jeffs is the Principal Marketing Strategist at Marigold, and today he shares the seven underlying principles of any loyalty programme, as well as some inspiration from global brands, which together can shape compelling propositions that truly harness a brands unique capabilities.
Simon’s expertise will help you ensure your strategic foundations are based on sound loyalty principles that are compelling to customers and commercial stakeholders in equal measure.
This episode is sponsored by Marigold.
Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
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Hello and welcome to today’s episode of Let’s Talk Loyalty, which is also being recorded as an exclusive webinar for our friends in Marigold. My guest is Simon Jeffs, Principal Marketing Strategist for Marigold based in the UK. With responsibilities for shaping strong strategic solutions and valuable client partnerships, Simon joins us today to discuss their seven foundational principles which are essential considerations for anyone focused on cultivating customer loyalty. Along with these important principles, he shares examples of some inspiring loyalty initiatives we can all look to, to continually evolve our programs, to delight and retain our customers in 2024.
I hope you enjoy our conversation.
So Simon Jeffs, welcome to Let’s Talk Loyalty and the Marigold Webinar.
Simon: Thanks, Paula. How are you? Good to be here.
Paula: Great. I’m super well. I’m hoping you are as well, Simon. I know you’ve been on the speaker circuit for the last couple of months, haven’t you?
Simon: I’ve done a few events. Yeah. Mainly, Marigold hosted events, but it sort of kept me sort of traveling around a little bit. It’s been quite exciting. So nothing planned moving forward now. So it’s good to get off the planes.
Paula: Amazing. Amazing. Yes. And hopefully we get to share some of that incredible knowledge that you’ve been compiling and sharing. And of course, making sure our own audience has access to it as well. So that’s the topic for our conversation today.
But of course, as you know, Simon, before we get into a detailed conversation, we always like to just start with a general observation from, I suppose, other loyalty professionals like yourself to get a sense of what is your perhaps favorite loyalty program and why would it be that so you can explain it for the audience.
Simon: Sure. Well, I think I’m probably bending the rules a little bit. It’s not, I would say sort of a pure play loyalty program. Certainly contains, I think, a lot of elements that a lot of loyalty programs would like to leverage. So I’m going to sort of, yeah, I’m. When I was sort of, you know, asked about this, I just kept thinking about Peloton.
So, you know, I am a Peloton subscriber. I’ve increasingly enjoyed, you know, the, you know, the workouts, you know, it’s the Peloton bike. I’m loving the community elements of it. I’m loving the challenges. And I say this as a bit of a cynic, really. I always sort of find being talked at and, you know, egged on, cheered on, cajoled into sort of exercise and enjoyment a little bit, you know, you know, a little bit much.
Perhaps that’s just me being really British, but I’m actually, really enjoying it. And, it’s just got so much about it. You know, the, you know, it’s that whole gamified experience. It’s all about the challenges. It’s all about, you know, their health and wellbeing. It’s all about, you know, personal development.
It’s, it’s, as I said, it’s a community piece as well. You can be taking part in classes. You can interact with people that are there at the same time. It’s this whole on demand element of it as well. I’m enjoying, you know, I enjoy it and I can see, you know, a lot of parallels with, you know, a lot of programs who are trying to achieve the same thing.
And, you know, from a loyalty standpoint, you know, it’s probably keeping me out of a gym, you know, you know, Peloton’s getting my monthly subscription as opposed to a, as a gym. And I can’t see that necessarily changing. And I’m, you know, I’m sure we’ll touch on it later, but I just think sort of Peloton’s really nailed down a lot of really sort of key, emotional aspects, emotional, you know, loyalty elements really nicely. So, you know, that was where I was landed, you know, in answer to that question.
Paula: Yeah. It’s a brilliant example, Simon. I’m trying to remember if anybody else has ever answered that, but maybe once or twice, but I definitely feel it deserves more actual acknowledgement and respect in our industry.
And I remember reading actually an article probably back in 2016, and it would have been, of course, a lot less well developed back then. But I do remember reading an article about, members of the Peloton community actually getting tattoos of the logo on their skin. So when we talk about loyalty and you get to that level of extreme, which, you know, maybe I’ve only heard about, for example, with the likes of say Harley Davidson.
So for a brand like Peloton to start creating that level of emotional connection, I think I’m hoping that at some point we’ll have a conversation. You’ll tell me you’ve got the Peloton logo.
Simon: I’ve not, but I did miss and I’ve, I’m reading this. I did say like my 150th ride, which I think qualified me for a t shirt. Right. And they know they notified me and that the email just went completely missed in my inbox. And by the time I got to it, my window of opportunity to claim it had gone. so I’m, I can only assume I’ve probably got to do several hundred more before, the opportunity arises, but, yeah, no, no ambitions yet to get that logo tattooed.
Paula: There you go.
Simon: But who knows?
Paula: Who knows? Absolutely. So clearly loyalty is all about driving a behavior change and of course profitable behavior change. So the mere fact that you wear, you know, excited about that t shirt and you do want to go back and further connect and engage. So what I’m hearing coming through actually is the breadth of the proposition that Peloton has developed, very much seems personalized to exactly what you needed to do.
So a lot of the foundational practices and principles of loyalty that were exactly here to talk about today, with our audience. So before we get into all of the kind of key messages and particularly your strategic framework for, you know, I suppose, designing a loyalty program, something I think I’ve said to you, I really wish I’d had the opportunity to do in the same way you do now in your role with Marigold.
But take us back a little bit first of all, Simon, in terms of how did you get to where you are today in terms of learning about loyalty and practicing it in the way that you’re now doing with Marigold?
Simon: I would say I probably got to it fairly late and via a fairly circuitous route because I, when I originally started my working career, I worked for a, well, I worked for a business which has now been consumed by Acxiom.
So my background is fundamentally in customer data, B2C data. And it was all about the collection of data, the insight and analytics you get from consumer data and it sort of, and then how it was deployed and used by advertisers. And, I sort of then sort of found myself in a lot of sort of data orientated roles.
So sort of planning and sort of managing sort of CRM activity, you know, within organizations like Associated News or specialist ECRM agencies and sort of working with a pretty broad range of clients, you know, sort of across sort of farmer across sort of telecoms, retail travel. So real blend, but I mean, data was always the common denominator.
And it wasn’t until I guess, sort of fairly sort of late on, I ended up MRM in a, sort of a pure sort of strategic role that, you know, got to thinking, you know, you know, about how we take a perhaps a slightly sort of more sort of science to a scientific, a slightly more sort of structured planning approach to sort of crafting campaigns.
And yeah, you know, then I sort of ultimately sort of found myself with within the sort of Brierley organization, which is now Capillary. So sort of working with them and the sort of strategy side. So it wasn’t really until that point that got it got into the, you know, the world of loyalty, you know, what it actually looks like.
I mean, you know, certainly from a sort of a programmatic and structured standpoint, and that really opens up a whole new way of looking at loyalty. You know, you’d think that, you know, sort of CRM and sort of ECRM and, you know, the development of customer relations relationships is, I’m not going to say sort of straightforward.
But, you know, I think loyalty, you know, the world of loyalty takes it to a, to another level, you know, you really are looking at sort of tethering, you know, your highest value customers really strongly and actually being able to do that and finding the innovative and exciting ways to doing that is, is quite sort of fascinating.
So I pretty much landed here through, through data and it’s still a massive part about what we do.
Paula: Absolutely. Yeah. Data. Yeah, definitely part of what I call the clever stuff. You know, I think I said to you before when we had a conversation, there’s parts I love about loyalty. And again, have done a lot of myself in terms of the operationalizing some elements of design. But I know you absolutely cover it end to end. So, and of course you have, you know, both, I suppose, potential brands that are looking to develop loyalty for the first time, as well as very experienced loyalty programs and practitioners who have absolutely got very sophisticated methodology.
So before we get into your particular framework in terms of how you look at programs and advise brands, will you give us a bit of the context and I suppose the backdrop, Simon, in terms of what are you hearing? Like, what’s the scale and the process that brands go through in terms of, I suppose, moving from unknown customers, which some brands still have, all the way up through to, I suppose, what we’re all aspiring to in terms of advocacy.
Simon: I mean, I guess in terms of process, these sort of brands go through, I mean, I think largely, you know, they’ve got similar challenges, you know, it’s the acquisition piece, getting a customer on board, sort of presenting them with a proposition, which is compelling enough for them to sort of start that conversation for your eye to make that sort of initial transaction.
And I think once you’ve piqued that interest, provoke that first sort of transaction, then it’s incumbent on that brand to try and keep that conversation going and make it interesting and make it worthwhile over the long term. So whether you’re a, you know, coffee shop, you know, small chain of coffee shops or whether you’re a big sort of multinational business, you know, once you’ve recruited that customer, you want to keep them close.
You want to sort of tether them to your brand. You want to be seen as the singular choice for their sort of ongoing purchase. And I think it’s just a process of ongoing discovery. So it’s actually sort of finding out more about, you know, the individuals wants and needs, you know, what’s important, you know, what, you know, sort of attitudes and sentiments are sort of valuable to them so that you can sort of nurture and sort of foster that relationship over the long term.
And I don’t think it’s necessarily particularly easy. I think a lot of brands, you know, find it quite difficult. But I think if you’re fortunate enough, then, yeah, to have developed, you know, a really sort of strong cohort of customers. You can then start to think, well, you know, perhaps a loyalty proposition, formal programmatic, you know, initiative is going to make sense. And it’s perhaps at that point, you know, you might look to, to recruit your sort of top prospects, you know, your, you know, your highest value customers into that type of, environment. But I think a lot of the hard work has to be done in advance of that.
I don’t think necessarily the loyalty program can, you know. It’s not a switch you can flick and people will gravitate towards your, you know, your proposition. I think you’ve got to earn their loyalty and then sort of migrate them into an environment where they’re treated. You know, extreme, you know, with, you know, you know, as VIPs, you know, you know, they are your high value customers, you know, they want something a little bit different.
Paula: Absolutely. Yeah. And my own experience, I’d be interested in your view on this is, you know, particularly if it’s a brand that is, let’s say less mature in the loyalty space. Sometimes what happens is, you know, they start doing the research again, looking at competitors. And often end up calling platform providers like Marigold to look for a solution to actually implement a loyalty program.
But I think what you said is actually that whole design piece, that preparation, that thinking is something that increasingly, I suppose, to start to being respected as a really important part of the process before we get excited with the bells and whistles, because of course, the tech can do whatever you need it to do, but I think you’re hearing that more and more people are wanting to go through that, I suppose, understanding the fundamentals of what a loyalty program could be in order to get them to an outcome. Would that be fair to say?
Simon: Yes, I think so. I think there’s, I think there’s certainly sort of fundamental steps or considerations that brands and sort of, you know, internal stakeholders need to need to be aware of, just to create a stronger attachment to, to, to your customer or your prospect.
I think what happens at the point where you introduce the concept of a loyalty program, some of those sort of components, some of those principles, you know, need to be powered up, you know, you really need to sort of amplify them a little bit more. And that’s where the, you know, the program sort of really come, really come alive.
But I think there are sort of strong guiding principles for any brand, whether they’re looking at a program or not, which can help them sort of tie their customers a little bit closer and develop relationships, which are stronger and more valuable for, you know, for their customer base.
Paula: For sure. For sure. And given all of those different reasons, perhaps Simon, that brands. Can I suppose be thinking about this investment, which let’s be honest, is a significant investment. What are you hearing at the moment or are the main drivers for, I suppose, brands and businesses to think about investing in loyalty initiatives?
Simon: I mean, sort of typically, you know, if they’ve got sort of very sort of clear objectives, they’re going to be in and around all the slay things like you, they want their customers to spend more. They want them to spend, you know, take, make more visits to their outlets or to their website. You’re going to sort of retain customers longer.
They might even just simply want them to engage more, have more worthwhile conversations. It very much depends on the overarching sort of business objectives. And they’ve got to be really clear. Otherwise, you know, any program that you look to sort of implement is going to be a challenge, you know, you’ve got to be solving a, you know, a real problem.
And, you know, I think some of the best programs have, you know, a laser focused on exactly what it is that they want to, what they want to achieve, you know, to set up. So it’s a cross sell, you know, things like, you know, the engagement pace. Collecting more data. I mean, there’s any number of programs that are out there, which are sort of powering, you know, really effective, you know, data capture so that you can actually understand a little bit more about, you know, your eyes as consumers. So, you know, it’s any of those reasons and more.
Paula: Yeah, absolutely. Yeah, it is never ending and absolutely, given your background in the data side as well, you know, there is that holy grail of things like personalization that we talk so much about on this show. I do think a lot of programs are still struggling to deliver on that, but when it comes to advocacy, of course, the ultimate goal, the Holy grail, I do think that of course, great personalization can get us there.
So, so give us a sense then of your framework overall, what kind of process do you go through Simon? I know you’ve got, I suppose, three different steps that you would guide any particular brands on in terms of, how you would approach it. So talk us through the framework.
Simon: Yeah, I think in terms of, you know, if you’re looking at that sort of programmatic piece and that sort of standalone loyalty, loyalty initiative, you know, first step, you’ve you know, you’ve got to be answering, well, you know, well, what’s in it for me, there’s got to be mutual benefit, obviously. So, as a customer, it’s got to be worthwhile me, me joining, but obviously from a business sort of standpoint, you know, are there sort of objectives going to be, are they going to be met? Are they going to be able to capture, you know, the volume of data that they want? Are they going to be able to drive the, you know, incremental revenue that they’re looking to see? Are they going to get that repeat purchase? All the rest of it, you know, so that sort of proposition’s got to deliver on that side of things. And I think coupled with that, you’ve got to have a compelling customer experience.
Yeah, you know, so. You know, it’s about sort of enriching that sort of relationship or the engagement with the, with the brand and that will sort of typically sort of pivot off being able to personalize and make your sort of communications and the whole, you know, the, you know, the proposition is as relevant as possible, because that’s when you’re going to be able to sort of surprise and delight.
And I think it’s, you know, also as well, it’s being able to sort of build that sort of meaningful connection. So a third level,it’s creating that sort of connection through, through data, you know, it’s being able to sort of apply the insights, you know, and inspire the desired behavior change, whatever that may be for your business.
I think those three elements are, you know, absolutely essential. I think the third one in particular, if you get that right and you are able to, you know, to, to leverage the insights and, you know, really sort of hyper personalize, you then perhaps sort of at the door of this sort of nebulous world of, emotional loyalty where, you know, you are perhaps of crafting experiences and engagements, which are, you know, really quite compelling and perhaps ones that, you know, you would talk about and, you know, you know, you then become perhaps an advocate for that brand. I don’t think it’s easy, but that’s the, that’s the ambition. So I think, yeah,the three key areas are likely to be those, you know, for anyone working on a program proposition.
Paula: Amazing. Absolutely. Yeah. And definitely emotional loyalty is when we get the, the wonderful word of mouth, which everybody,is absolutely keen to achieve, hard to measure, of course, but, really that’s what advocacy does deliver.
And I’ve often said on this show that there’s no way that any brand in the world can afford the level of advertising that would be needed if we were just to rely on advertising to drive our business behaviors. So of course that advocacy is a key part of what we’re all aiming for.
So today we’re going to talk through your exact, foundational loyalty principles, Simon. There’s seven of them. They’re super clear. And I’m going to just, I suppose, introduce them first and foremost, and then I’d love to kind of touch on some of them, you know, in a bit more detail and again, maybe even look to the market for some best practice, because at the end of the day, we’re all consumers as well as loyalty professionals.
So I know you have some very interesting insights in terms of case studies that you admired again from your own career. So in brief, you talk through the key loyalty components and this for me is exactly what I would have wanted when I was, I suppose thrown in the deep end, Simon, you know, as I’ve said many times on the show, I think a lot of people listening to this are coming into loyalty, maybe from another marketing discipline, whether it’s digital or something else, but really here to learn.
So principles, including authenticity, knowing your customers, moments that matter, a clear value proposition, a compelling customer experience, a holistic customer view, and making it personal. So, lots to talk about in this, and first of all, I will say for everybody listening, we do have a beautiful slide deck that Simon has kindly put together to summarize these key loyalty components. So, for anyone who might be thinking, I guess, as we come into 2024, you know, time to step back, refresh and relook at whether we are, I suppose, optimizing for success. We can definitely share this thinking in more detail, because we probably won’t do it fully justice in our conversation today.
But let’s get into the first one, Simon. Authenticity. I think for me, it was quite a surprising starting point, but as a content creator, it resonates. So tell us why this is so important for brands to be thinking about.
Simon: I think it’s almost like sort of table stakes starting point, isn’t it? I mean, it’s about brands who, you know, are they walking the wall? You know, you know, they’re talking the talk, but are they walking the wall, you know, and before they, you know, before they do anything, you know, and it, you hear so often, you know, we’re truly sort of customer centric brand. Well, I mean, it’s like, it’s a really easy question as a consumer to answer, you know, do I feel that you are truly sort of customer centric? You know, do you have my best interests at heart? You’re not jumping on some topical bandwagon to make yourself appeal to me, you know, is there sort of genuine integrity and credibility in play?
And I think we all make that sort of mental assessment to sort of, to start with, you know, is this, it’s just a brand I can do business with, you know, and our brands able to create that environment and sort of project that, position. I think some do it, I think some do it better than, better than others.
I think you see it often, yeah, into without door brands, because I think a lot of them are about, you know, sort of harnessing sort of passions and, you know, that the, you know, the love of the outdoors. So typically, you know, they will be concerned with things like environment to sustainability and have been for a lot longer than it’s ever been sort of fashionable.
So they’ve already won a whole cohort of, you know, you know, customers that are bought into them because of what they stand for. And I think, you know, I think that, you know, is a really important consideration that, you know, any brand can reflect on. Yeah, no, absolutely. I think as well, you see it in serve, you know, in your ability as a brand to service and provide quality service to customers.
I always talk about an example that I saw tweeted, which was from, Chewy, which is a US pet brand. And they’re fundamentally sort of service driven. So that the, I think almost at the expense of spending elsewhere, they empower their service teams, you know, to go above and beyond.
So the example, and if, you know, anyone does care to sort of take the deck afterwards, they’ll see this. This was somebody shared their experience of, speaking to a Chewy customer service rep, because their dog recently passed, they bought a full pack. They had a whole load of pet food that they could no longer obviously use.
And, you know, I think they sort of contacted you to say, well, you know, what can we do? What can we do with it? Can you sort of pass it on or whatever? And they offered a full refund. I think they told the individual to donate it to a, animal charity or sanctuary nearby, and then this customer service agent then sort of followed up with a bunch of flowers, you know, just to sort of mark, you know, you know, the conversation and the circumstances and, you know, that’s just a service.
It’s not just a service interaction. It’s a really powerful because this individual then went on. And sort of share this experience, tweeted it. I think, you know, it’s probably had knocking on the door of 700, 000 views. And that’s the type of advocacy, that’s the type of experience that is unbelievably powerful.
And that’s just through a business, just doing what it says it’s going to do. You know, sort of tracing his customer as well. So I think even before you talk about loyalty program, you know, if you think about an example like that is somebody who’s going to talk to their friends, you know, they are going to advocate for that brand. People are going to hear that story. You know, they are going to get a sense that, you know, this is a brand that’s really, you know, switched on and customer focus. I don’t think everyone can necessarily be like that, but I think it’s worth remembering that your sort of customer facing service staff are absolutely essential and they’ve got a massive role to play.
Paula: They really do, Simon. Yeah. And as a pet parent, I have to say, I’m lucky I haven’t lost a pet as yet, but I did see that same example on LinkedIn, actually. So I know it went absolutely viral. And given that we’re talking about authenticity, I think, Chewy, we have to absolutely demonstrated that foundational principle that you’re talking about.
First and foremost, it’s integrity. How can we be loyal to our customers and to our members before looking for all those business benefits that we talk about so much? So, you know, the upsell, the cross sell. So a wonderful starting point. And I’m hoping we can get Chewy on the show at some point because they must have really, you know, foundational principles as a business, I guess, coming from this place of authenticity.
Simon: I think they’ve got a lot of the hard yards already done. I mean, if you imagine a business like that is, is then going to say, well, do you know what, we’re thinking about a loyalty program.
I mean, you’ve got the perfect foundation and platform to launch that. So I think you’re definitely going to be sort of greasing the wheels of getting, you know, enrollments, enrollments on board for sure.
Paula: Absolutely. So your second principle then, I know Simon is all around again, one of our favorite topics of balancing rational needs with emotional means. So I suppose starting to know your customers. So tell us a bit about this.
Simon: Yeah, I mean, it is that, isn’t it? It is that, I mean, yes, you can dive into the data, you can do the analysis, you can look at the attributes, you can sort of build out personas and profiles, and it’s all hugely important. I think the context of loyalty, it is that it’s understanding that interplay, isn’t it? Sort of, you know, rational and emotional attributes.
You know, and I think a lot of brands obviously get the rational ones, right? You know, or they’re easier to get, right? You know, it’s the pricing. It’s perhaps the, you know, it’s the convenience. It’s the service. It’s all of that. And we will expect that as customers. But it’s the more nebulous and slightly harder to manufacture and create. It’s the emotional,it’s the emotional side of things, which I think is, yeah, it’s quite challenging. You know, and, you know, we would talk to things about, you know, sort of brand love. How do we sort of build and sort of create brand love?
But it’s other things as well. You know, we have innate desires to sort of, sort of stand out for the crowd. You know, you know, we want to have, you know, we have our eye on the environment, for example, we all want to seal off, you know, feel a sort of sense of thrill and belonging. So how do brands do that?
I mean, and ultimately, if you can do that, you know, it’s, you know, somebody wants to describe it to me. And perfectly, I think is it’s loyalty without reason, you know, so you’re creating this. You’re creating this attachment to a brand, which is quite resilient. So the brands that I really love and the ones that I really engage with, they can probably treat me quite badly on a few occasions, you know, and I’m going to be very forgiving, you know, so I can be let down a couple of times, you know, but I’m still gonna, I’m going to still going to go back.
I’m not, there’s more of a rational relationship. I would just go and purchase elsewhere, you know, and it’s a very sort of easy decision to make. So, and I think it’s, you know. I think it’s often quite easy to talk about this sort of, oh, well, you know, we’re going to sort of build emotional loyalty.
I really don’t think it’s as straightforward. You touched on something quite interesting earlier when you talked about, I think the Peloton tattoo, right? Yes, yeah. I think one of the most fantastic examples I’ve ever seen is somebody who got their whole foot tattooed with a Nike Air Max trainer. Have you ever seen that?
Simon: It’s unbelievable. Right. So, I mean, and that by any measure, it’s not a rational decision, you know, someone that’s utterly invested. So, yeah, I think as brands, it’s like, yeah, well, we, you know, we all want a flavor of, you know, sort of, you know, getting it, you know, you know, that, that sort of ridiculous adoption and sort of passion for a brand that, you know, people are going to tattoo themselves, you know, I want to talk about, you know, you know, you remember when sort of Apple would release the new phone or the iPad and you’d see queues of people camping out on Regent Street or wherever the Apple store was, you know, that again, that’s not rational.
You know, queuing up outside the Nike store because a new, you know, limited edition runner trainers, you know, again, we all want to, we want a flavor of that. I think we can, you know, we can work towards it with sort of carefully sort of curated and crafted experiences. But I mean, I think, you know, that it’s pinnacle, you know, it’s, I think it’s a fascinating place to land if you can.
Paula: Totally. Yeah. I think what a lot of us wish on this show, you know, given that we’re working so hard to create this emotional loyalty is I almost wish I’d studied, you know, consumers and I guess, sorry, even human psychology, you know, just the actual basics of why do I feel this way? Why might I get a commercial brand tattooed on my foot or elsewhere?
So there is that understanding I think that brands need to think about that underlying customer needs and wants, and I suppose that leads quite nicely into this whole idea that I suppose, optimally, we do want to visualize the journey that our members and customers are going through and to get them from that very rational place all the way up to a sense of almost community that you articulated at the beginning in terms of the Peloton experience.
Simon: Yeah. No, definitely. I think there is a trajectory, isn’t there as a client, as a, sorry, as a customer. So, you know, you’re going through that consideration phase. You might be sort of weighing up your options, you know, within the brand, you might already have a, I think, you know, a relationship with all competitors, you know, that decisioning phase. So that’s going to be quite rational. You’re going to be in quite a rational phase, aren’t they? Aren’t you there? You know, you’re going to be looking at the pricing, the convenience, the compatibility, all those sort of types of things.
And as you work your way through that and, you know, you are engaged with different areas within the business, whether it’s, you know, a sales journey, a sort of a care function, you know, you want to be understood. You don’t want to be sort of keeping repeating yourself, you know, and then they might miss it. Successfully convert you into a customer and then there’s a whole range of, you know, interactions and sort of journeys that you will, you know, embark on then. And as I said, this whole loyalty piece is about sort of discovery and sort of finding out more about the individual, you know, their wants, their needs, the attributes.
So that ultimately is a sort of a as a satisfied customer, it’s fully on boarded, you know, they can then sort of start extending some of the experiences and some of the facets of what it means to sort of keep that customer close, keep you engaged, make you feel special. So, yeah, you are transitioning from sort of rational leads through to more emotional ones and the brands that can identify and isolate those and treat those along the way are going to be really quite successful. And it’s incredibly important to be able to, you know, identify those moments that matter and see if you can, you know, address and, engage the customer at those points.
Paula: Absolutely. Yeah. And then I suppose the ultimate piece and one that I think also has its own journey is the development of the value proposition that you decide that you are going to launch in market. My own experience has been being that it can be a case that the marketing team, you know, I suppose, fueled by these conversations with customers can very often design something, but it doesn’t always get to market, I suppose, with the same proposition by the time you go through, I suppose, all of the various stakeholders in the business.
So, so what’s your advice in terms of developing value proposition, Simon, because I think it’s the hardest part and perhaps the single most important of these principles to really get right.
Simon: Yeah, I think so. I tend to think it might just be me, but I think the simplest ones are the best. And I say that because I, you know, perhaps I’m just easily confused, but you know, you think of some of the, you think of some of the, I guess, propositions that work best, you might talk to you know, the Starbucks program where you’ve got a very simple earned metric. It’s habitual behavior. I might be going to my sort of Starbucks fairly regularly. And, you know, over the course of a month, I’ve got the opportunity to earn quite easily, you know, a free drink.
My path to redemption is very straightforward. The earning mechanism is very straightforward. The way they can enrich that program, you know, through sort of, you know, the, you know, the added values that you get from using the apps and ordering ahead, you know, sort of making the experience, you know, less friction within that experience and sort of adding value to the sort of being able to build out your own drinks, you know, it’s simple. It’s sort of, it’s straightforward.
But I don’t think they necessarily, you know, any. Brand necessary lands on that straight out of the box. You’ve got a lot to work through. And I think the first thing you’ve got to do is, you know, you go to your customers or your prospective members and you ask them, you know, what do they want from a loyalty program?
If indeed they want one, they might tell you we’re not interested. Thank you. You know, and you know, you might be doing already a fantastically good job with your sort of CRM and your sort of relationship marketing activity. You’ve got to be careful, I think, to sort of steer away from, you know, diktats from within a business would say we need a loyalty program.
I think you’ve got to explore, you know, and get a temperature test from all the stakeholders within the business jobs, not just the marketers, finance teams, the care teams, you know, customer facing teams really get a good sense check of what that program is going to mean. And then you sort of work up, you know, your straw man, you know, what does my, what does our potential concept look like? And then you take that to your customers and you know, you, you get it validated, you know, and that concept, that value proposition, you know, the, you know, the program proposition that sits in there, as I said, it doesn’t have to be sort of hugely complicated, you know, it doesn’t, you know, you don’t want necessarily all the moving parts.
I think you just need to remember that any program is fairly organic and requires innovation and, you know, refresh over time. So, you know, you don’t want to be looking to boil the ocean all in one go. You want to sort of start with something that you think is going to work. It might just be sort of focused on a small cohort of potential members and then sort of build it up and work it through.
And who knows, you know, further down the line, you might well end up with the apps. You might well end up with the paid tier. You might end up with a sort of hidden VIP tier and all the other lovely moving parts of some of these sort of programs that have been around for a long time incorporate. But I think, you know, keep it simple to start with and compelling and also a point of difference. You know, you don’t necessarily want that cookie cutter approach. So by all means, be aware of what the competition is doing, but have a think about how you can do, you know, do it differently or add to the proposition and do it differently. I think would be a, you know, a really sort of sensible way to look at it.
Paula: Absolutely. Yeah, I think that is important to bear in mind. And again, certainly at the start of my loyalty journey, Simon, you know, I knew we had board level approval, for example, and this is in telecoms for three years in terms of, you know, building, designing, launching a loyalty program.
But what I hadn’t realized is, you know, it becomes very, I suppose, sexy and exciting internally in the business. at certain stages in the life cycle. But then after two or three years, in fact, there were other things and other propositions that marketing was working on. And the loyalty program, wasn’t necessarily top of mind internally.
So I think that’s a very important point around, you know, starting simple, evolving over time and taking the business on that journey because the value proposition has to be something that first of all, your members understand. We always had a load of research about people kind of who maybe weren’t aware of the proposition or didn’t really understand it.
So I know this slide deck that we’re going to share with people does have some wonderful examples. I think they’re all UK examples, but certainly there are plenty around the world that we can share with people because I think it’s really useful to kind of keep that value proposition in mind in terms of making sure we know what this practice looks like.
So your fifth principle then is around experience. Simon, what do you mean by experience?
Simon: I think, well, It’s how you’re sort of going to engage with that, with, you know, with the proposition, the program, you know, it’s the, you know, degree to which, you know, perhaps sort of being a member, being sort of treated as a loyal customer sort of sets you, it sets you apart, you know, it’s being able to sort of exceed those sort of customer expectations, you know, might sort of talk about, you know, that surprise or delight, you know, it’s being able to provoke.
Hopefully sort of maintain sort of meaningful, valuable and relevant engagement. You know, you can do that through a number of different sort of, you know, ways and means, you know, talk a lot about experiential reward, for example, you know, sort of giving people sort of those money can’t buy experiences, giving, you know, you know, individuals, those sort of opportunities to sort of engage with the brand or partnerships, which otherwise would necessarily be, be available. It’s that sort of, you know, VIP experience.
But it’s also simple things as well. It’s about sort of, you know, reducing the friction points, making things simpler. It’s making things, you know, access, easier. you know, it’s about sort of being sort of adaptable, you know, we’ll sort of talk about, you know, gamification quite a bit now, you know, as a way of sort of driving engagement.
And, you know, I think there’s some sort of fantastic examples of, you know, how sort of brands have used sort of gamification, partnerships. Well, I mean, there’s one in particular that I, you know, thinking of with Fortnite, who did a fantastic piece of work with O2, where they created within the realms of Fortnite, a virtual O2 arena.
And as an O2 priority member, if I was playing the game and immersed in this Fortnite game, I could go along to the virtual O2 arena and watch a virtual performance by a band. I think that’s really, I think that’s really clever. And I think, it’s at the pinnacle of gamification. And certainly, you know, you see things like, you know, sort of quizzes, surveys, sort of scratch to reveal, spin to win.
But it’s the same, it’s the same principle. It’s offering something, giving something and sort of creating a way to engage, which is a little bit unusual, you know, and, yeah, these techniques are available certainly to sort of most brands. Not everybody’s necessarily going to have, you know, the ability to sort of craft partnerships with, you know, brands like fortnight, but I do, I get quite excited by the opportunities within the, you know, the world of gaming. I think there’s going to be a, you know, we’re going to see a lot of really interesting stuff going on there because I think it’s, yeah.
I mean, it’s the audience, isn’t it? That, you know, that plays these games as well, typically hard to reach. Where are you going to find them? Well, you might find them buried within, you know, you know, an immersive video game. you know, yeah, I think there’s a lot to come in that area.
Paula: I totally agree. Yeah. We just did an episode. In fact, if anybody has inherited with Circle K, they immerse themselves in a Pokemon experience. So, exactly that same kind of like augmented reality kind of concept and unbelievable results. So, I totally agree.
I think historically, I would have thought about gamification perhaps, or let’s say gaming and now gamification. Historically, I didn’t consider myself a gamer. Because I consider that like the world of Warcraft or those kind of games. But now, of course, I do, you know, play games, whether it’s word games, you know, those kind of things on the phone, whether it’s standing in line at a Starbucks, for example, there are so many ways that we can make, everyday behavior much more fun. So totally agree with that.
And when you mentioned Surprise and Delight, Simon, as well, I had a wonderful one this week where literally a brand realized that I had put up a post on social media and they were super happy with it. And it was of course a really positive post and they gave me some bonus points for that.
And you know, surprise and delight. I know as an industry professional is very effective, but it was the first time I was on the receiving end of one. So I do think that’s something that we shouldn’t forget is super powerful and actually a very affordable mechanic.
Simon: Yeah, definitely. And I think there’s a lot that can be done with sort of rewarding sort of, you know, non transactional engagement. I think, you know, it’s very, you know, it’s nice, elegant way of, you know, you know, letting people, you know, and getting that sort of step, you know, towards that, reward. And again, it’s mutually beneficial, isn’t it? You know, I’m perhaps providing a bit of information, which I’m happy to give in return for some points.
And, you know, it might sort of get me, you know, a little bit closer to that sort of, you know, tier change, whatever it may be. And, yeah, we certainly see that as a, you know, major factor in, or a major way of sort of, you know, engaging,client customers. It’s really interesting.
Paula: Amazing. More to come on that one for sure. So listen, we have two final points, which I think are both, we could probably do a full episode on each of them, but let’s just briefly touch on them again. We can send out the slide deck for anyone who wants to reach out either to me or directly to you, of course, but it’s all around this, I suppose, holy grail of, you know, capturing customer data and then using it in a way that is beneficial to those members, to achieve the ultimate behavior change.
And you did start with a startling statistic, Simon. and I’ll just quote it for anybody who hasn’t seen the deck as yet. And this comes from Deloitte Digital, where you mentioned that 62 percent of US retailers have over 50 systems housing customer data. That blew my mind.
Simon: Yeah, I mean, it talks doesn’t it to this sort of data fragmentation and I think there’s almost like this appetite within businesses that you’ve got a system for this, a platform for that, you know, and yeah, it really just reminds us that I think, you know, we need to be able to sort of organize data effectively. I mean, there’s so many different entry points into the, into any business, you know, we talked about the journey mapping and, you know, you know, that is in no small part relies on being able to sort of collate information from multiple different sources, multiple different touch points, which in turn have multiple different platforms.
So, yeah, I mean, you’re, you know, there are any number of ways. Businesses will collect data, but ultimately, and it’s not exclusive to, to, to loyalty by any stretch, but I mean, if you’re trying to create a view of customer and use data effectively,you do need it centralized. You do need it, it’s accessible, you know, it has to provide utility. So, you know, you want to be able to sort of use it so that you can craft insights, you know, you know, undertake the necessary analytics and, you know, even if it’s just a sort of personalized sequence of emails or text or, you know, identify those people within the business who are more likely to engage on social platforms, you know, you need to have a view of, you know, what these customers look like, their preferences and their attributes.
So, you know, as I said, it, you know, creating a holistic single customer view is essential, I think, for any sort of business marketing focused, or, certainly sort of focused on, you know, developing a one to one relationship with a customer, you know, it’s absolute table stakes. You’ve got to be working towards creating that type of environment.
And I think, yeah, it goes hand in hand with the seventh principle is sort of making things personal, you know, because you can’t effectively sort of personalize, you know, until, you know, you’ve got a, you’ve got a platform to, to build from customers absolutely expect it, you know, we are.
I was listening to something the other day and, you know, the reality of it is that we’re of, you know, I’m of a sort of a generation where I’m both digital and analog. So, you know, I would have perhaps previously bought rail tickets, but I’m now equally comfortable using something like the train line. My mother, people are perhaps of her generation are perhaps more entrenched in a sort of the analog world where, you know, the actual sort of ticket is in hand. That piece of paper is more important.
Yet my kids now are digital natives. They don’t watch TV. They don’t experience the world, you know, or their youth in any way that I did. So their expectation now is content and communication is served up to them and yeah, and they are expected to be understood. It was actually Tom Peace that was talking about this. He’s sort of, you know, you know, really nice description, but it’s absolutely true. And, you know, I think we’ve got to make efforts and accept that. You know, we are increasingly demanding to be sort of understood. We want stuff available now. We want our wants and needs to be understood.
You know, we don’t, we’ve perhaps we’ve got a lower threshold, lower patients threshold for irrelevance. Right. So, you know, With this, you know, you know, creating these sort of data environments and then being able to power, you know, and deploy and orchestrate that data more effectively to make things more personal is, you know, absolutely, absolutely essential.
And I think obviously within the context of the loyalty ecosystem, where you’ve got all this sort of data coming into the business, it’s a, you know, a really significant engine and powerhouse for delivering that. And that’s why I think it’s such an important component piece in this sort of discussion.
Paula: Yeah. And I think you’re right. I think historically it was probably the business that was driving this intention for personalization, realizing that if we can obviously guide people to the next best action, of course, that’s going to be good for the business. But now I suppose as consumers of all ages do become more sophisticated, then yes, of course, the expectations change again, very different by demographic, but I totally agree that, you know, I don’t want my time wasted.
I absolutely want a brand that does understand me. And I’ve said many times on the show here, so even things as simple as my birthday, when it comes around every year, I’m always paying extra attention to how brands do reach out on that particular occasion. If I know I’ve given them my particular date of birth, for example, just to see, you know, have they taken action with that data for me or have they taken it for them? So I think there’s a, an important principle back to your thing about integrity.
Simon: Absolutely. And I think as a just a little cheeky extension to that, you know, the discussion about knowing my birthday, I quite like every now and again, that let’s say you go through that checkout process and then deliberately abandon your basket, but specifically doing it on something that you want and to see if they then actually follow up with a, with a discount.
Paula: Yeah. A hundred percent.
Simon: Top tip. Yeah. One, one to try once you try. Yeah. I’m not sure if I’m gonna get in trouble for recommending that, but I just, yeah. it’s, you know, how effectively are they using that data, you know? Oh, you know, and to what extent, do they know that you are in the market to, to buy something? You know, it’s quite interesting.
Paula: Indeed. Yeah. So we can certainly gamify our e commerce experiences without that top tip. So my only concern with that, with airlines, for example, I feel like when I do all my research, sometimes I think they put the price up when I know I really want to go to a certain place, so I don’t know how it all behaves. I guess every industry is different.
Simon: Yeah, exactly. I think, you know, there is a spectacular amount that is done with sort of sort of data intelligence and it’s, you know, it’s the underlying sort of algorithms that can sort of work out, you know, you know, deploying a pricing model according to what they know about individual and, you know, when they’re going, you know, their appetite, you know, the urgency. I think, yeah,it’s compelling. Absolutely
Paula: Clever stuff. Yeah. So listen, Simon, we’ve talked through a lot here today. Again, I suppose the key thing we want is to make sure we can share these principles with people who are either designing for the first time, optimizing, or anywhere on that, I suppose, entire process, whether it’s discovery.
Designing, validating, or optimizing their programs. I know of course you’re available, with lots more, insights and information, if anybody does want to reach out directly to you for a bit of guidance, and I suppose it’s important to mention that’s available, I suppose, purely as a standalone, almost consulting service, completely independent to any platform discussions, would that be fair to say?
Simon: Yeah, no, absolutely. I think what we sort of recognize is that, you know, there’s no shortage of work and planning and thinking that needs to be done before operationalizing a program. And we’re very much there to help navigate that landscape. So, yeah, absolutely. We’d be delighted to discuss that with anybody that would wish to.
Paula: Amazing. Brilliant. So listen, I don’t have any more questions from my side, Simon. Was there anything else that you wanted to mention before we wrap up?
Simon: No, I think it’s been a really good conversation. I think, as you know, as you said, we’re here to sort of help and sort of expand upon anything that we’ve discussed. So more than happy to sort of chat through any requirements that might resolve from this. And it’s been a pleasure talking to you.
Paula: Wonderful stuff. So we’ll make sure to link to your profile, of course, in the LinkedIn notes. So Simon Jeffs, Principal Marketing Strategist at Marigold. Thank you so much from Let’s Talk Loyalty.
Simon: Thanks, Paula.
Paula: This show is sponsored by The Loyalty People, a global strategic consultancy with a laser focus. CRM and customer engagement. The Loyalty People work with clients in lots of different ways, whether it’s the strategic design of your loyalty program or a full service including loyalty project execution. And they can also advise you on choosing the right technology and service partners.
On their website, The Loyalty People also runs a free global community for loyalty practitioners. And they also publish their own loyalty expert insights. So for more information and to subscribe, check out theloyaltypeople.global.
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