Building a Data-Driven Loyalty Program Webinar
Discover how loyalty emails boost open rates and conversions with personalized messages and dynamic content. Learn from experts about successful strategies and real-life examples that enhance email marketing and build stronger customer relationships. Don't miss these valuable insights!
[MUSIC]
For those that don't know a masses, we are part of the SAP family and
are a leading customer engagement platform with Empower's businesses to
deliver truly personalized experiences at scale.
So our solution helps you to create seamless impactful loyalty programs that
not only boost customer retention, but also drive significant business growth.
In addition to this as a true omni-channel solution,
one of our many channels is a loyalty program.
So, loyalty really is at the heart of everything we do.
So, now let's meet our guests.
So joining us from annex club today, we have Mutchek and Alex and
loyalty expert and royalty, as you can see from his background, is David Palf
raman.
So, Mutchek, maybe kind of start with yourself.
Can you please tell us a little bit about yourself, the role, and annex cloud,
of course.
And maybe a little bit around why you live in Brave loyalty.
And you're on mute.
[LAUGH]
>> Good to start.
Hi, my name is Mutchek Gurskowski, tough name for everybody, but
I want to, we recorded this in case you want to practice later on.
I've been in loyalty for over 12 years, my entire career at annex cloud.
Prior to that, I had a marketing career in an advertising capacity for
roughly 20 years prior to annex cloud.
We end cloud is a loyalty platform with clients all around the globe,
including APAC, Europe, and the US.
All in all kinds of areas, whether it's manufacturing, whether it's fintech,
health, wellness, cosmetics, apparel, retail, everything.
So across the board and others, if you ever want to learn to
learn more about that, we are, although our office is in the claim,
Virginia, we are completely distributed at this moment.
So as I said, we're all over the world.
And my role at annex cloud is SVP of customer success, which so
my team manages all clients post implementation and
making sure that your programs are successful.
>> Thank you, Mutchek.
Alex, up to you.
>> Yeah, sounds good.
Hi everyone, Alex, and I had a strategy for annex cloud.
So I get to support our clients on program design, program redesigns,
and then also thinking about how to sophisticated and
enhance their loyalty program and strategy.
I've been in loyalty for over a decade now.
Prior to that, I was with Target doing the merchandising fun thing.
But fell in love with loyalty after coming in and
doing consulting for it for loyalty strategy.
And really what I love about it is just that it touches every aspect of the
business.
And it really, when it's done effectively, becomes the heart of marketing
strategy and
really company strategy, because these are your best customers.
And it's great to reward them and send them and excite them while also
partnering with the entire organization, finance, creative, IT, etc.
So it's been really fun coming, I've run my own programs as well.
And then now coming into the agency side to support all of these great clients
at annex cloud.
So thanks for having me.
>> Thank you, Alex and David, over to you.
>> Thank you, thanks really.
Yeah, my name is David Palferman.
I'm a CRM and loyalty specialist.
So I've worked for the last 25 years on CRM and
loyalty programs with various companies around the world.
Supermarkets, banks, airlines, all over the place.
Use lots of different vendors, lots of different platforms and lots of learn
ings.
Thank you for having me on board today.
>> Beautiful, thanks for having, great, great to have you on board.
So thank you guys.
So without further ado, let's get started.
So first topic for today was unlock the secret of engaged subscribers.
So the claim is loyalty emails boost high open rates and
click throughs driving more traffic conversions to your site with automated
campaigns.
So how can a loyalty emails achieve higher open rates and
click throughs compared to a standard marketing email?
Alex, I might start with yourself.
>> Yeah, it's exciting.
I recently came from a large retailer in the US.
Building and running their program and overseeing all of retention.
And it was fascinating to see how successful the loyalty emails became.
We put in 14 automations when we did it.
Talking about the excitement of, hey, you're really close to next year or
you have enough points to redeem or congratulations, you've succeeded in one
a badge or you've referred a friend, right?
So creating all these different ways to create relevancy.
And the other part that we did too was we ensured that there was personal
ization
in those emails.
So it says, hi Rudy, we know your gold tier.
And we're excited to let you know that we're running a double points campaign
just for your segment or again, congratulations, you have enough points.
So those did really well.
And the one thing that we also did that was interesting was in our promotional
sense, we actually started creating dynamic cartridges in there.
So that if you did have enough points to redeem, we were reminding you,
while also talking about a great campaign that we were doing.
Massive uptick in our promotional emails as well in terms of
conversion and click through.
So not just the automations, but also like playing with that idea and
incorporating it into the promotional sense was also very successful.
So I think it's all about relevancy.
It's exciting to be like, oh yeah, I am gold status.
That does feel good.
And it feels good with a retailer or with a, you know, a CPG, an airline,
whatever it is that you're a part of.
It creates a little bit of that bond.
So I would say that's how I think, you know, people leveraging it in the right
way can see a lot of success and the KPIs naturally follow.
Perfect.
And David, what are your thoughts on that?
What kind of examples do you have around loyalty email campaigns that are
driving
that engagement?
Yeah, I mean, just Bill and Alex have said, absolutely, you need to make it
relevant and engaging for the customer.
And, you know, we've done lots of various clients at work time.
We've looked at, you know, we've done the batch and blast where we send mass
market emails out and you compare those to the event driven emails, which are
triggered from a customer's action or interaction.
The open rates, the buy rates are just out of this world compared to those.
So some great examples we worked at an automated parts company, Auto Bar.
We put in SAP and Mars in there with their loyalty platform.
We did some things like some, just some basic stuff, you know, abandoned
browse, abandoned car, wishlist.
Wishlist was brilliant.
So if, you know, you have something on your wishlist, it means you're not ready
to buy
it yet because for a number of reasons, but maybe the price is too high.
If you do a price drop on wishlist, like the open rates and buy, even the buy
rate,
I huge on that, you know, we had a 2% buy rate from some of our emails so far.
Every hundred emails we sent out, 2%, 2 people bought from it.
It was just crazy, really, really good.
So just making sure those emails are relevant, personalized and based on what
they're interested
in.
If they put it in their wishlist, they obviously want to buy it, but not just
yet.
So when they get something like a price drop on that, it's a great incentive
for them
to go, "Great, I'll buy this now."
Back in stock as well, you know, they've looked on the, they've looked at
something on the
website a couple of times.
It's not being in stock.
When it comes back in stock, we automated that with a masses.
Again, great uptake, great buy rates from that.
Customers really interested in it.
So again, making it really relevant and using that customer data because
customers giving
you their data for you to use it appropriately.
And obviously, you know, that isn't appropriate use for it.
Those things work really, really well for us.
And I'm at a comment too about the usage of data.
What I found really fun about this too is that a lot of marketing leaders and
people
supporting loyalty and supporting retention and email, they're able to get
their team
really excited because when you have the loyalty program and you have more data
coming into
your ESP, the team members start getting excited.
They're like, "Oh, I'm going to create this new journey or I'm going to put
this eyebrow
inside my emails or, you know, I want to try something new."
That was another really fun thing that ideas start getting sparked by your team
And that just creates this whirlwind of success with, again, just leveraging
that new data.
And I'll layer on that.
You know, if you just speak about all the things that David and Alex were
saying, you know,
let's say you crossed into a new tier, you earned a reward all the way down to
like maybe
something where you're prompting people.
We haven't seen you in a while, right?
And then so doing those things and then layering all those things with some
type of point value
or something, some incentive for doing that, loyalty gives you such an
opportunity to go
back and ask more from the customers and then feeling like there's something in
return.
That's not just purely, the transaction has a reciprocal effect, right?
So, you know, we've seen loyalty emails literally have double the open rates.
Like we had one client that had roughly 20% of 18 and change and they had over
40% open
rates when there was loyalty element in it.
We had a client that actually includes a loyalty element every single time in
the header.
And to ensure that you know what tier you're in, how many points you have, how
many points
those points, how many points, what the value of those points are and then run
promotions
constantly to try to get you to earn more and actually spend those points in
order to
reduce liability.
So two and a hundred, all I heard there was two and a hundred customers bought.
That was the impressive stat they are.
We could all have a loyalty program where that happens, I think all involved
would be very
happy.
So I'd throw it out to the people joining.
Do you have any questions at all around that piece at all?
Feel free to raise your hand.
Nope, okay.
If we don't have anything else, I'll go to the second topic, which is around
slashing
custom acquisition costs.
So loyalty programs called Big Repeat Business significantly reducing your
dependence on
expensive advertising like Google ads.
So Alex, I might throw to you again, what have you seen there here?
How does it really reduce that paid advertising piece?
Yeah, we just came back from a conference and it was amazing to see how many
new brands
were getting interested in loyalty and trying to suss it out and how do we do
this?
How do we make this work?
And then a number of different brands that were looking to sophisticated or
redesign
their programs because they were trying to figure out how to monetize them more
and also
because the cost of acquisition has gone up so much and as well as the changes
in privacy
laws, cookies, the price of bidding and paid advertising has really skyrocketed
And so they were like, we got to figure this out.
One was if we're going to pay this much and try and acquire someone, it takes
me $60
to get them.
I need to have a loyalty program that's really solid.
So I capture them, capture all their data and then can action off of that in a
much more
affordable channel like email, SMS, app, push, et cetera and engage them with
relevant content.
So that's I think one way where you can reduce the dependence because you're
actually capturing
and your retention side becomes a bigger part of your business than new
customer.
But I would say the other piece too is that you can leverage your loyalty
program and
monetize it by leveraging partners.
And so I know a few clients that will negotiate with different brands or
different partners
to market to their loyalty members and take a little bit of revenue for that,
right?
Some vendor income to pay and offset that.
So that helps fund the loyalty program, but it also helps fund these types of
efforts with acquisition.
And so I think that in the second part is using the data, or the third part,
sorry, is using
the data to find local likes.
Who are these people?
What do they do?
What do they like?
What do they like about their lifestyle?
Can I then use that to better target and paid advertising and find those types
of people
to pull into, you know, my website, my store, et cetera.
So just a few ways that I've been seeing it, and I think a great way to help
you because
that costs us skyrocketed.
Very good.
What have you seen, David, and in this pace, have you seen some examples of
reduced advertising
costs of the backability?
Yeah.
I mean, some of the things we did after some of our clients when we've launched
loyalty
programs and getting people to sign up can be quite difficult sometimes, and it
depends
on how you position it.
So if you say, "Give us your email address, join our loyalty program," no one
really wants
to sign up.
They think they're going to be spam to death.
So it's how you do the messaging and how you actually give the value
proposition to that
customer.
And the value proposition I found is often not what you think it is.
So a great example we're working with some automated parts, companies, and some
tools
companies, what the customer's value isn't what you think.
So we thought we had these great special offers for members, these member
discounts,
the points.
Yeah, they liked that, but what they actually really, really loved was the fact
that we
kept all their receipts online.
And that was a huge bonus for them because it had a couple of big benefits for
them.
One, it meant that if there's a problem with anything they bought, they could
come back
into any store in 12 months later, 11 months later, this doesn't work, this is
broken.
Have you got the receipt?
No.
Remember our loyalty program?
Yes.
Let me look you up.
Oh, yeah.
It's a fantastic customer experience.
They spread the word.
They say this is a really great experience.
The other great thing for them, especially for businesses and a financial year,
where
all those receipts go on for all that stuff I bought, they don't know.
They go online, all the transactions are there.
They can print out all the tax receipts.
A great advantage.
Now, not something we thought as developing the loyalty program, this was going
to be
something customers value.
They actually valued it more than the points.
So it was very, very cheap for us to operate, but great value for the customer.
We found that everything was like with all that I bought, it was things that we
were
giving that we didn't think were great value for the customers, but I actually
loved it.
Some of those benefits we were really great that were very, very cheap for us
to offer.
I worked with a company that, a trade company that was selling paints.
And for their trade practice, we were giving out, we offered free t-shirts to
the trade
painters and we couldn't understand why they just flew out the door, like the
trade painters
loved them.
And the reason was when they go to quote for a job, they wore a t-shirt with
the name of
this company on it.
And it made them look professional because when you go to quote for a painting
job, it's
difficult to know what to wear.
You wear a suit, you look like a bit of an idiot.
If you wear your normal painting gear, you look like a scruffy mess, but if you
wear
a t-shirt with the name of this paint brand on it, it looks really professional
And they loved it.
That's why they joined the program because they got these free t-shirts.
Very low cost for us, great for our branding, great for the customer, great for
everyone.
So I think that's one of the things you've got to focus on is what do your
customers
actually value?
And it's not always what you think it is.
And that was one of the great lessons from me is talk to your customers and
find out
what they're actually interested in because sometimes it's not what you expect.
So how did you find out about the resets piece?
Was that an after the fact?
No, just talking to customers.
So we talked to some other people that have been implemented.
We talked to a lot of other organizations, a lot of partners, what do the
customers value,
and a big thing for me is going and actually meeting the customers.
So when I was working with Audubon, I was in store.
We're talking to customers.
We're talking to the staff.
We're talking to people on tour.
What is it the customers want?
When I was working with the paint company, I was out on site, on building sites
, talking
to painters, finding what they're interested in.
And you get some really great insights from that.
Actually getting out on the cold face and meeting people is the best way to get
those
insights.
You can glean a lot from the data, data analysis, but nothing beats being on
the cold
face.
Well said.
Well said.
Marcia, what are your thoughts on this?
What have you seen amongst the customer base at the NX Cloud?
So much to unpack here, right?
Because David talked about the whole idea of finding out more about your
customers, right?
So again, we have a survey tool.
So we can ask people and actually reward them for doing that.
So doing an ongoing surveying of, are we sharing with you the benefits we have,
the rewards
we have, the points, values, do those job you do?
Are those things, do they work for you?
Are they incentivizing you?
And as the program kind of gets older, right, has been there for a while, it
allows you
to make changes real time without having to make these like major shifts once
every
time you're doing that.
It's kind of jarring for customers.
So I think that's great.
I love that.
I love finding out what customers do and you can do that in scale or you can do
that
in person, right?
So it's both.
Both of them.
You know, can't do everyone in person, so it's great to do it in scale.
And on the receipt side, again, it's a great acquisition tool, especially for
those manufacturers
that use, you know, the majority of the product is sold to retailers using
receipts to bring
them back and finding out more information about what did you buy and looking
at the
baskets, what else is in a basket and being able to start marketing to them and
saying,
hey, we know you bought this.
How about extra points on this?
Or how about registering this product so we can give you, can ensure that when
the product
comes up from Candy Canavob has any updates, we can give you that.
So, you know, I was going to mention a couple of promotions for acquisition.
You know, we had this super successful join and win.
Very simple, right?
It's a very simple on Instagram.
So an owned channel, forget like, you know, this is an owned channel.
So whether it's obviously SMS, but you know, from an Instagram perspective,
this customer,
it was a cosmetics customer, they used to get 22,000 signups a month.
They had 22,000 signups in five days.
It was so successful that the existing members were saying, hey, what about us?
So they've actually extended it to a six day.
So they had a promotion for existing customers.
So, you know, it seems very simple, but you know, they're using your own
channels.
You can really drive down the acquisition costs, right?
And get the right kind of consumer because they're already in, you know, on
or in your app, but they may not be members.
So they're already interested.
You already have them kind of look alike, you know, look alike.
So you already have that by definition, right?
They just haven't joined the program yet.
One of the things we found on that was that the smaller the prize, the bigger
the impact.
So we did some, you know, some of our business parts we talked to them about.
They had exactly the same issue that they offer this grand prize, which was
worth, you
know, $20,000 a holiday and all this great stuff.
Not a very big, not a very big uptake.
Like it was actually a bit of a train wreck.
But when he did a smaller prize, win a hundred dollar gift card, that was more
achievable,
but actually got more engagement, more people interested in winning a smaller
prize, which
was a fantastic learning for me.
Yeah.
This was a daily, a daily prize for five days they had in the six day data for
the, and
it worked.
I mean, it was genius.
And they, they did that every quarter after that because it was, it just drove,
you know,
you can't, you got to be careful, like, you know, being able to do that too
often.
But every quarter they did that and they had very similar result results.
We got a question online, Rudy.
Oh, beautiful.
What do we got here?
How can I get leverage loyalty without capitalizing it up channel business?
I'd like to take that one.
Well, I can, can I just grab that one first?
Because it's, again, it's actually same client we just talked about.
And for like for receipts, right?
So is, you know, they, there's again, there were loyalty points given in that,
but the
way that the business sold it to their, to their channel was this is for
marketing purposes
to understand what our consumers want and need.
And we're going to adjust the product and develop the product, which you can
sell, right?
All we're doing is basically, this is market research for them, right?
So they use that they, from, from that perspective, they thought they, they've
managed that and
their, their channel was very happy with that kind of approach.
Yeah, we, we've had this before too, especially in beauty.
There's a lot of, a lot of brands that actually have their own program and are
obviously trying
to drive D to C sales.
The reality is that in, in the conversations that were had, it was, you know,
you're, you're
a one stop shop retailer where they can buy a number of other brands.
And that's why they favor you.
But we want to reward them for any purchase anywhere.
Otherwise, they might come to your, you know, customer service and say, why don
't you give
me these points?
I want these points for the brand that I love and I also buy some other stuff
with you.
So it's still in sending them to go to your store.
It's just being able to reward them as the brand.
And then like Mach X said, learn a lot more about the consumer and make the
product, the
experience and everything even better.
So I think a lot of brands get shy away from that.
They're like worried about this conversation with a big retailer, you know,
that might
be, you know, 15 or 20% of their business is coming through that.
But I think there's some really thoughtful ways that you can have that
conversation and
the retailers will understand or your channel partner from my experience.
Yeah.
I mean, I think the other thing to that point is with loyalty, with some brands
, some companies
I work with, you know, they have some suppliers who do not want to discount.
Like you just cannot discount their products at all.
Yeah.
Loyalty is a great way of actually getting around that to say, you buy this
product, won't
give you discount, but we'll give you bonus points.
And the supplies are generally pretty happy with that because you're not deval
uing the
sort of market value of it.
But the customer's going, well, I'll go to you because I'm actually, although
the price
is the same, I'm actually getting more value because I'm getting more bonus
points.
And that, that I found works really well.
Yeah, I was talking to a brand last week and I said, how's business?
And I said, they'd love to sell something that wasn't 40% off right now.
So maybe we'll be talking to them.
Yeah.
And that's, you know, with points, you know, again, depending on the, on the
program, not
all points will be used by, I would say, by definition, by fact, right?
So you're not given for, and you're providing so much more value and maybe
stored value,
even if it's value because of the different tiers you can achieve, then a kind
of a quick,
you know, 40% off feels good.
I got the sale, but, you know, but I lost margin.
So the margin, you can retain so much more of the margin and you can create the
story,
right?
Your points are, you just got to reward.
Your points are going to expire.
You know, so many different things that can happen as a result of that and the
communications
you can set off because of that, right?
Again, that's what I was saying at the very beginning, right?
Which gives you such a platform for communicating.
Danielle, does that answer your question?
Yeah, good question, Danielle.
Thank you.
Did anybody else have any questions?
If not, I think we might go to the next topic.
Alex, did you have anything else to say on this topic?
No, no.
Okay.
Okay.
We'll move on.
So the topic is unlock new revenue with co-funded loyalty.
So I might, I think it'd be good for everyone joining, actually.
What is a co-funded loyalty program?
Like, what does that look like?
Can we start there?
Maybe Alex can start with you again.
Sure.
I mean, there's a number of ways to get funding.
So some retailers will offer up placements and emails or a specific targeted
campaign
for a brand.
So if it's L'Oreal at whatever, selling at Macy's, Macy's might say it's double
stars
day, triple stars day on these types of products.
L'Oreal might want to fund that, right?
And like Machik said, it sells at Reg Retail, which works really well for
Beauty because they
want to sell at Reg Retail and have their brand look premier and luxurious,
right?
So that's one way.
And then other ways that we've seen this work is through models where they're
funding the
points that are also issued.
So they might pay a placement fee, they might pay for the bonus points where
you're actually
selling the amount of points that go out.
Maybe you're charging a penny a point or 140 basis points.
And then you're collecting that revenue off of the end of the sale whenever
that period
was.
And then another way too is if you're going into a bank relationship or with a
financial
institution where you might be getting a co-branded credit card, all of those
points are co-funded
that are being used or when the card is used at other locations.
So there's just three high level ways that you can start monetizing your
program and
start generating revenue, whether it's through direct partners that you're
selling, partners
outside that might be complementary to your brand that want to market.
And obviously getting into the big situation, which is usually a co-branded
card.
So how do you get to that point, Alex?
What have you seen?
How do people approach this?
How do they get to the situation where they're able to leverage this?
It's really sizing KPIs.
So you have to show that you have an engaged loyalty base that will clearly
enjoy the card.
And there's a decent amount of either purchase frequency or basket size that
they're purchasing
that will be meaningful for them to accelerate their point earning and get
additional benefits
with the card and that they will likely use that as a front of wallet or second
card and
wallet for purchases outside of that store.
That's a big factor that you want to focus on when you're doing the bank
relationships
and the negotiations.
And then I would say again, it has to show scale that you have probably at
least two, three,
four million active members.
The other good thing to show partners too is how they redeem.
If you have strong redemption rates, you know that these people are big care
about that
currency, which means they're going to want to spend on a card and do that.
Or same thing with the partners.
Showing these redemption rates and the engagement, the higher open rates, the
higher click rates
on emails for this, that's really going to get you the partnership deal.
And again, you need to show them, hey, to acquire this base net net, it might
cost you
six bucks a person, right?
And like to my other point about cost of acquisition, you're paying $60 to deal
with that advertising
on meta or Google.
But you can go with us and a partner and it's a hyper focused market.
You're paying six bucks ahead when it comes through.
So that's another way that they really are able to get the partners to want to
buy in.
So just an interesting negotiating tactic.
Yeah, I think the other thing is really making sure that the people you're
dealing with, the
brands you're dealing with, the complimentary and that they fit in well with
your brand
scene.
I was working with one of the airlines and Kahaia is a great example, making
sure it's
a very much a complimentary product.
You've got an airline, people get off playing in one of Kahaia.
Doing deals with Kahaiaia companies is a really good way to earn and redeem
points.
That works really well.
But what was really interesting, one of the airlines that I dealt with, they
were dealing
with their B&B.
And one of the things I wanted to do was really make sure they were authentic
to their brand
and the partner brand.
So what I was really impressed with their B&B with all the photography, all the
imagery
that was used, it was all real air B&Bs and none of the people were paid talent
So it was all actual guests or actual owners.
And it really gave some authenticity to it and some credibility to the airline
like this
is actually very, very good.
But making sure it's an equivalent brand.
So if you've got a premium brand, you need to partner with a premium product.
The auto-bound social media, which I absolutely love, it works really well with
their audience,
but it's only going to work with certain sorts of brands.
And it does work really well.
And one of the things that auto-bound do really well, they've got a brand that
works
with chicane tools.
And the partnership with them is that they've partnered with one of the racing
teams.
And part of the deal is that the pit crew and mechanics all uses chain tools,
the logos
are all over the pit crew stuff.
So it's really visible.
And it's a really great partnership with that racing team because whenever it's
on the
telly, everyone can see in the background this chicane toolbox, this chicane
branding
there and they can see the mechanics actually using it.
So it gives real credibility and authenticity to that brand.
I think that's a real key element to make sure that if you're doing a
partnership, people
can see it's a real partnership and it's authentic.
And that makes a huge difference making it incredible.
I think the other thing is being really transparent with your partner.
This is what we're planning to do.
This is what we're achieving.
And then at the end of it, this is why it works, it didn't work.
And sometimes these partnerships don't work.
You'll do a campaign, you'll do a promotion, and it doesn't work.
But if you've been transparent with that partner and said, well, this is why
this is
the lesson and this is what we can do next time, then actually they're pretty
open to
going, okay, let's give it another try.
Or let's see what we can improve on.
I think that transparency and authenticity is absolutely key.
That's really interesting.
That's a great point, right?
It's about if you're doing it once, it's not always going to work.
It's not always going to work.
And I think these partnerships have to be aspirational to your customer.
At the very least, they have to be something that matches their expectation.
From a brand perspective, it has to have somewhat similar ethos as far as it
can't be because
it can't be completely different.
You know, like you're maybe a tobacco client and someone comes in and it's kind
of a health
and fitness.
You've got to be sure, just be careful that just because they give you the
money, because
you have to be careful that it's not just about, hey, it's going to lower my
cost for
the points, right?
So I think just making sure there's value to the customer and you do something
that is
aspirational to them.
And then obviously, on the other side is you have to make sure that you have
enough volume
to be able to justify what you're asking for.
But we have two clients.
Sorry, just real quick.
So we have a footwork client that does this placement, what you talked about,
placement
every single month with a different manufacturer.
And it works great.
And it's a double points event, very simple.
It's just, you know, they just each month, they have a different, so it becomes
kind
of this thing that people do expect, which is great.
It's actually not a bad thing.
You know, you want to introduce new things, but also some level of expectation
too.
Yeah, I was just going to share, I like the example of Walmart and Expedia's
new relationship
that I think launched a couple of months ago, where you can earn the Walmart
cashback if
you're a Walmart plus member buying on Expedia through their site.
And the reason being is that it extended the connection to the consumer's
lifestyle, because
they like to go on trips and Walmart doesn't sell that, right?
But now through that relationship and partnership, they're maximizing their
currency and value.
They're allowing for deals to work.
And then the partner Expedia is getting a massive customer base coming through
them.
And then they're being able to fund, you know, with whatever they would have
paid as an affiliate
fee or a commission fee, they're funding that with the cash back to Walmart and
then getting
the benefit of purchases.
So I think that's a great example of that partnership just really working in a
lot of
different ways for both sides, because it has to be reciprocal for both sides
too to
work.
I mean, look at like Walmart and Amex, right?
You got free, you know, you get an account with because you have, you're an Am
ex holder,
which is a great for a Platinum Amex holders.
And it introduces, they were just talking about how Walmart is kind of scaling
up as far as
the type of audience that goes there because deals like this, they're kind of,
they're
trying to aspire to be higher, right?
And they're really capturing an audience that has a larger disposable income.
So on that, from a targeting perspective within these loyalty programs, is
there any
like, like ways that we can target based on past purchase history or
demographics to
make sure that the promotions are reaching the right customer?
I'll start with Alex and start with it.
No, I mean, absolutely.
I mean, I think that's the beauty of loyalty is once you have all the data, you
can then
segment in these tools and then decide the right campaign, the right brands to
put in
front of them, the right partner to put in front of them.
You can also segment for your highest value consumers to give them an even
bigger reward
that they really deserve versus having to do something that's brought across
everyone
and reducing or diluting the value.
So no, I mean, I think that's one of the most crucial and exciting parts about
loyalty
platforms is you can do that and then you can pass it to your marketing
communications
to perfectly segment into the audience.
Through the channel, they want to be communicated with a really relevant and
exciting offer to
that exact segment based on demographic or behavioral or their behavior.
Yeah, that's absolutely right.
And also, you know, just looking at what other customers have bought, you know,
one customer
has bought this product and they bought these complimentary products and
offering that to
the customer.
They're like, oh, I didn't realize you sold that.
You know, often we found out that all the bar and then people have, don't
realize we
sell these other products and you say, oh, you recently bought this, do you
realize we've
got these other things as well?
And it's a, they love it as a customer, you know, it's like, oh, good.
I actually need that.
Well, I'm just trying to flog them, whatever we got too much of a stock.
It's, you know, it can be done behaviorally.
Like, like what you bought, when you bought it, where you bought it, things
like that,
you know, like what kind of data you gave while you, you know, but also I think
there's,
you know, it's got a zero party data where let's just say demos, you may not
have demographic
information because unless you get that during sign up process, you won't have
that, right?
So the, you can actually go and whether you use a survey product or use kind of
a profile
manager and incentivize people adding elements about their demo, you know, age,
whatever,
again, depending on what you're looking at, what you need in order to make
better segmentation
decisions to drive the outcomes, right?
So it's a great way, loyalty is a great way of either capturing the behavioral
things
that happen in every day, you know, interaction with the brand and as well as
kind of engaging
and forcing that other information that you may want to get by giving the end
user or
giving the member something in return.
Yeah.
I mean, the supermarkets are really good at using that data to extrapolate a
lot of other
information.
So they'll look at how many toilet rolls you buy per week so they can get a
pretty good
estimate of your household size.
They can look at what you're shopping to see what sort of household you are.
So if you're buying lots of nappies, obviously you've got young children.
If you're buying nappies once a month, you're possibly a grandparent and they
can look at
those things to really make some reasonably accurate segmentation in fact.
And use that sort of drive some decent campaigns.
Or make sure that if you bought whatever product you bought, you should run out
within this
period of time.
So you send a communication before that with some type of incentive or not to
say, hey,
it's time to replenish.
Here's something in return.
Yeah.
And I think monitoring the behavior and assessing and kind of glinging the
insight of where you
think that segment is.
But even just verifying it by asking them, are you a parent or putting that
into profile
so that they're actually selecting that.
I also like what one of our clients does out of the UK, they have clubs.
So they have a coffee club.
They also have a kids club.
So if you join that club, you get exclusive offers that are associated with
kids, clothes,
shoes, apparel, et cetera.
And what's great about that is it's clearly a pending, you are a parent.
Now they can then say, hell, who's the child?
Is it a boy or a girl?
Right?
And it's not, you join the clubs.
So me asking that question isn't odd.
I then hold that information and then I can age the kid.
Oh, now I know that your kid is like going to moving into a teenager.
Oh, now I want that kid to join the program too because they're an adult, go to
college.
So I think I think some really interesting ways you can play with it.
And pet stores too do a good job.
What's the name of the pet?
What kind of pet, et cetera?
And people love sharing that.
It's their pet.
So yeah, I think both self-reported data or self-reported info as well as using
the behavioral metrics.
Perfect.
So this all sounds great.
But what are the challenges right implementing something like this?
And how do you mitigate that?
I might start with you, David, if that's right.
Yeah, I mean, sometimes the data you get is not, the data lies to you.
So if you look at my shopping history, I buy a lot of sardines.
You'd think I'm a big sardine eater.
Everyone in our family hates sardines.
We can't stand them.
My grayer hound, however, scoffs there are a lot of them.
So you've got to be sometimes a little bit cautious of how you use the data and
not make
too many inferences from it.
Try to assess gender from purchasing animal.
You might be buying stuff on behalf of your partner.
So you've got to be a little bit careful about making too many assumptions with
it.
But yeah, I mean, what supermarkets are really, really good at doing is looking
at that purchasing
history he's talking about before about those regular buying hounds.
Both calls them all worth here.
Very, very collaborative seeing how your spending patterns change over time.
You know, if you're shopping, they can work out.
You're shopping exclusively with them or with one or the other based on how
often you're
buying what you're buying.
And then they give you offers appropriately.
And you know, well, they're also really good at doing.
We're talking about this with the shame of the partners.
They will obviously know what products you're buying.
They will actually use that information, select to their suppliers and say, "
Hey, we've
got this customer, David, who is buying this brand of hummus."
If you want to sell your brand of hummus, you can target them with a bonus
points offer
and we can tell you when him and when he switches and how long he keeps buying
from when he
stops buying it, then he can give them another offer.
So they're basically making a lot of money out of actually selling this data to
their
suppliers and doing it very well because I am incentivized by those points
offers.
Every week I'm looking through going, "Oh, okay, yeah, I'm getting double
points on this
brand of hummus rather than that one.
I will switch."
And Rudy, I think too, because it does sound really amazing.
So I think that's part of it is ensuring that you use the right type of experts
to help
you build out the strategy and to really think about it in phases.
What can I do as an MVP?
What can I do to prove it's worth?
What is this expert telling me about what to expect?
What are the economics behind that?
Can we achieve that?
And then, okay, what do we got to plug in?
And so you start figuring out the integrations, you start figuring out that
piece.
I think a lot of people start assessing build versus buy.
Do I build my whole loyalty program and it's all custom, but it's all in house
and it might
take two years to do that.
Or do I look for a platform that already does this services, multiple clients,
multiple
industries and can help me do it a lot faster, right?
And has more expertise.
But then from there, how do you then unlock those phases of, okay, we stood it
up, we're
seeing the excitement, we're getting enrollment.
And then let's add another tier.
Okay, let's now try and add partner offers.
Let's now get to a credit card, right?
So there's ways that you kind of step into it, but you want a really good
partner that
can help you through that.
Either an internal loyalty expert or using vendors that can support you in
thinking critically
about that and getting you those types of insights.
But it sounds big and hairy and scary, but part of it too is a great loyalty
leader,
collaborates and gets their other partners excited and creates a team that says
, let's
do the loyalty initiative together and it's a celebrated win across the company
Then all of a sudden it becomes the heart of the strategy and you're a chief
loyalty
officer.
But yeah, I think that's, it takes a second to get there, but it can be a
really fun ride
and really, really a wonderful thing to celebrate as a team.
Yeah, I think the other thing to be aware of of course is that sometimes
actually you
don't need to do anything.
And this is something that I'll probably might sometimes have some of my
customers that
they are wanting to chuck out all these offers, wanting to do all these
promotions.
But sometimes you get customers who are just buying stuff like they're a
regular customer.
They're buying with you every week.
You don't actually need to give them discounts and incentives.
Because if you do, you're giving margin away and had a classic example of this
with one
of the airlines I was working with.
They did a special offer on a particular route.
They then looked at the numbers and they said, this is great.
This many people open email and click through and booked and this is our
attribution.
We made all this money out of this.
And I kind of went through the numbers and I was like, well actually you haven
't.
Because if we look at that, a good percentage of those people you send that
offer to are
flying that route anyway every single week.
So they were going to book that flight anyway.
And what you've actually done is given a discount on something they were
already going
to buy.
You've actually eaten into our margin.
You've actually made a loss on this.
So sometimes you need to think about what it is you want to achieve.
What you're trying to do with loyalty is have a change in behavior to get
customers to
nudge them to do something they wouldn't do anyway.
You know, loyalty should be about driving future behavior, not rewarding past
behavior.
You should be having a loyalty program that incentivizes people to do something
they wouldn't
already do, not just rewarding them for past behavior.
Again, with one of the companies I worked with recently we had an instance
where we went
through all the data before the loyalty program and after.
And they had given a huge amount of gift cards to a customer.
That's it implemented this loyalty program and it made no impact to all on the
sales
figures.
Because they were just buying this product anyway month after month and the
gift cards
were just basically an extra discount.
And it was over $100,000 worth.
Yeah, I think you can figure out what probably you're trying to solve.
Right?
And it'd be very clear about it, right?
Just like, you know, people say, I have a, you know, our relationship is not
great.
So we're going to get a cat or a dog or a kid and that will make it better.
Right?
And, you know, so you got to be careful, you know, like, and also it depends,
it depends
on the industry.
If you're maybe in the very kind of like, there's like, there's a hierarchy of
industry
level.
Like if it's, if someone's buying your product because it's cheap, you're super
vulnerable.
If someone's bought into maybe a set of products or maybe a little higher in
the bottom two,
you know, the brand, then you, then you, then you have a little more safety net
because
you have some, you can have some issues and still be okay.
If they're buying into your mission, let's say you're Patagonia or someone like
that,
or you may be Apple, there's, you probably don't have to be the best.
They give away the most or whatever it is, but you are probably going to have
that the
loyal people are going to stay loyal because they love the mission.
They love the products and they're not just going to go away because you're a
little,
you're more expensive or a little more expensive or even a lot more expensive.
Right.
So I think you have to just go through that process and whoever is your, would
you do
that internally or you do it with a third party to kind of vent that out to a
David
was saying, so you're not giving away something that for, because they're
already going to
buy anyway and you just lose margin.
I think if you do, if you go through that process, I think you'll get a much
better idea
and, and fewer surprises on the other side from a negative perspective.
We got another question, Rudy.
Yes.
Steve, the question, is there any use cases you can share using AI to organize
the data
and segments?
Where does the AI reside to execute this capability, marketing cloud or some
sort of
data lake?
I'd like to take that one.
That's a tough one.
It is.
Look, I think AI is, obviously, a lot of talk about that in the moment.
AI is a tool and you've got to be the master of that tool and, you know, we've
seen a number
of organizations trying to, trying to use AI.
I think you've got to use AI to help you, not drive it.
You've got to be the master of it.
We've, I think, segmentation.
We've used, done a lot of data segmentation and things with probably not using
exactly
AI, but using, using smart and automations.
I haven't used AI to actually build a segment.
No, what we've done, we've decided what is the best segment, what are the
groups you
want to do and what, what is the data show.
I think some of you have had the experience with that.
No, I mean, I think there's, there are vendors in the space that we've
partnered with and
the way that we've seen use cases work together with, you know, the potential
opportunities
that have been engaging to clients and even prospects.
It is using the AI to help, like you said, you want to be the master of it and
it needs
to help you.
So it can help recommend and quickly find opportunity potentially within your
customer
days, for example, or like a CDP, it might be sitting on there and it finds
interesting
segments for you to play off of that are large and meaty and that look like
there's a connection
between it and then you can leverage that by saying, okay, this is made now in
the CDP.
That's connected to my ESP.
That's connected to my loyalty platform.
Push the segment, create the campaign, push the email, right?
And so that's nice because you're, you're, it's helping you kind of think
critically
about or it's thinking critically for you quickly and then you have to be the
person
to say, well, is this actually going to work, right?
Like I know my business.
I know my consumer the best.
This was helpful.
And then now let me see if I can use it.
So that's where we've seen use cases built together where clients are getting
very interested
and excited about how all of it compared together.
But I would always do it on your entire database, not just within like a
loyalty platform or
just in an ESP, I think it makes a lot more sense kind of sitting on top of a
data lake
or a CDP.
Yeah, I mean, we're obviously AI work really well.
It's actually a delivery end when you're looking at designing and building your
campaigns and content that it's worked fantastically in terms of making sure
that, you know, you're
not going to get hit by spam filters, putting rewording emails.
So they actually sound a lot better and we'll get through a spam filter is AI
is really
going to quite a few of the tools.
We've got some really good capability in that area.
But yeah, not so seen so much on the on the segmentation, as you say.
I think it will get there.
We probably, you know, it's like a hierarchy, right?
You want to start maybe with some better email messaging, right?
So you can so that you can create more versions of that.
And I think that it'll get down to the point where you can do some more market
micro targeting
and faster, easier and more scalable.
And then on the other side, the analysis can also they could be some faster
analysis and
kind of wash rinse repeat, right?
There's a I think that's where I think it can be a really good valuable tool in
kind of
writing the copy or the, you know, the messaging, trying different messaging
and seeing which
messaging works best.
Yeah.
And we've used AI.
So we've used that.
It's actually check checks and things with maybe testing where we've automated
it saying
which of these works better and then automatically switch over to that better
version.
Yeah.
I think through Z, right?
You could like you can start rather than just doing, you know, just quick AB,
you could
actually scale that massively because you know, and you find some really weird
insights
like, you know, buttons with rounded edges perform a lot better than square
buttons,
things like that.
But you go, wow, why is that?
But it works.
So let's go with it.
Well, and I think even like using a pet example, right?
Like, I remember doing a segmentation for a large pet retailer and you can find
like,
oh, this is fancy dog and or like this is fancy cat and this is like rich kitty
And then this one is like, they don't like to spend a lot.
This is budget cat.
Right.
And so I think what's interesting is if you find those segments, but then to
your point,
if this, if a tool is helping you find those, you're then able to create
campaigns off of
it, but you're also able to then, you know, update the content that's going to
go out
there, right?
Because I might want to send different imagery.
I definitely want to send a cat and I want to send something, maybe one sitting
in the,
you know, the palace behind David's head, you know, with the right products and
the right
copy, right?
But then budget cat, that's different, right?
And so I think it's like, how do you, how do you kind of come up with those
strategies
and then leverage AI like you said, until like, just help you make, make that
stuff faster
and easier than having to do it, you know, for eight different segments all by
yourself.
So just thinking through some different ideas or content of like how you could
use it across
the board base and what we just talked about.
So hope that helps.
Beautiful.
Yes.
So it wouldn't be a webinar without AI being mentioned.
So I'm glad.
Thank you for that, Steve.
So, and I think it's important to note as well that a master's has a lot of AI
in our
roadmap.
So if you haven't had the chance to view that roadmap session that just went
live a few
days ago, yeah, please reach out and we'll share the link for the recording.
From one last final question from me before we tie everything up.
Let's say you're looking at doing a loyalty program, you've never done it
before.
What are the steps that you should take?
What are the first steps to make sure that success?
I might go to you, David, given that you've done a lot of this.
So can you run us through the pre-work before you launch a new program?
You need to be really clear on what your strategy is and what you're trying to
achieve
out of it.
Be really clear, like we're launching a loyalty program to do X.
It's going to give us this incremental revenue.
It's going to make our customers more loyal, spend more, spend more regularly.
If it's not doing those fundamental things, I've worked with companies that
have had a
loyalty program and it's literally rewarding past behavior.
We just choose and to margin.
It's not having any impact on future behavior.
The loyalty program should be designed to get people to do something they're
not doing
at the moment.
Fundamentally, and you need to work around that and have the strategy around
that.
You need to make sure you're engaged with a whole business.
It's not just if you're a bricks and mortar and e-commerce.
You need to make sure you're engaged with the bricks and mortar side of the
business.
How that's going to impact the...
If you're doing something on e-commerce, how that's going to impact bricks and
mortar.
You can perhaps incorporate that loyalty program into them as well.
Really think about those customer journeys and the customer experience right
from the
very start.
That's one of the things we did with Auto Barn was make sure we really thought
about how
we're going to capture customer data.
Do you really want someone at a till trying to type in an email address?
Because I think with almost everyone that's cool, they'd probably get that
wrong.
Make it easy for the customer.
Have a QR code they can scan.
They can self register all those things.
Really think about that strategy.
Think about what you're trying to do.
The other thing I'd say is work with a selector partner that is not just a
vendor but is a
partner that you're actually going to be able to work with and is not just
going to deliver
your software product that's going to deliver your solution and help you along
the way.
Deliver real value to the business.
Yeah.
That's it.
Just to call that out too.
I think, yeah, at the start, I love that.
It's alignment sessions.
What are the goals and objectives?
And is everybody on the same page?
Does everybody have a voice in the conversation?
Store ops, IT, creative.
Let them have a seat at the tables because again, they want to be part of the
team.
You want them to be part of the team.
And then as you get to that strategy design, things that we've seen that have
been very
beneficial are thoughtful, competitive analysis, going out and going to the
other competitors
and seeing if you can learn more about what they're doing and how you can find
white space
and what they're not doing.
Maybe that's a full-blown loyalty program or maybe they have a program but they
don't
have paid membership.
They don't have other cool things that you could incorporate in your program.
Do surveys, do focus groups, talk to that customer like David said.
They'll tell you a lot about what they want and what they don't want in a
program which
helps you prioritize and then run the economics.
You got to have an economic model and you got to have those customer journeys
and use
cases because you want to create a program that holistically is really exciting
but maybe
parts of it are really interesting to specific segments.
So again, like David said, that holding of receipts is really important to this
group
but this other group really likes the points because other groups really likes
getting free
t-shirts.
So finding those things and then showing those customer journeys and making
sure you've
action off of those and can do it with your partner and with your platform.
But just to pepper in some things that I've always seen successful in helping
you build
your strategy.
We're a time guys.
So yeah, again, thank you all for joining us today.
I think it's been an incredibly insightful session.
I've learned a lot myself.
We've covered a lot of ground, power of loyalty programs, the cost reductions
around acquisition
and unlocking additional revenue there with those programs.
And we also learned that David's a very poor loyal customer when it comes to
hummus.
So he will switch for a bonus point.
So as we wrap, I just want to thank our guests, Marchek, Alex and David.
Thank you for sharing your insights and your expertise.
Thank you.
It was really good.
And I'd like to thank you all for joining.
We'll reach out and share the recording.
And if you want us to learn more, please let us know.
Have a good day.
And thank you guys.
Thank you.
Bye.
Bye.