beyond clienteling - building loyalty and making it pay

BEYOND CLIENTELINGBuilding Loyalty and Making it Pay

Name Likes/Dislikes Contact Budget

Family members Important dates Payment terms

1.7x conversion

+26% profitability

GETTING LOYALTY RIGHT

HOW TO SHAPE YOUR FUTURE

WHERE DO WE GO WRONG?

6

LOYALTY IS AN EMOTION

…SO WHY DO WE TREAT IT LIKE A TRANSACTION?

WE HAVE BECOME VICTIMS OF HISTORY AND HABIT

1700sCOPPER TOKENS

1800sCOUPONS

1930s - 70sTRADING STAMPS

1980sDEREGULATION

1990sDIGITIZATION

2000sMOBILE TOOLS

-1% revenue growth

DONE WRONG =RISK MARGINS

-10% lower

EBITDA

DOING THE SAME AS OTHERS LEADS TO FAILING IN THE SAME WAY

Customerengagement

ROI over time

GETTING LOYALTY RIGHT

HOW TO SHAPE YOUR FUTURE

WHERE DO WE GO WRONG?

Connected

TransparentRelevant

Contextual

HumanCentered

GETTING IT RIGHT

A NEW APPROACH: “WHOLE BRAIN” UNDERSTANDING OF LOYALTY

TRUST HABITAFFINITY

“WHOLE BRAIN” LOYALTY

TRUST HABITAFFINITY

CONSISTENCY BUILDS TRUST

ANTICIPATETEST DELIVER RETEST REINFORCE DELIGHT

16

30% of customers don’t trust retailers with their information

HOW DO YOU USE WHAT YOU KNOW ABOUT ME?

18

TRANSPARENT

STITCH FIX

COLLECT INFORMATION IN AN ORGANIC WAY

“WHOLE BRAIN” LOYALTY

TRUST HABITAFFINITY

CONTEXTUAL

PLACEPURPOSE

CUSTOMERS EVALUATE PURCHASE RECOMMENDATIONS HOLISTICALLY

Onsite Behavior

Past Purchases

Buying Signals

Financial Preferences

Style Preferences

Shopping Objective

Physical Attributes

Vertical Knowledge

INSPIRE ENGAGE ADVISE/ ENABLE SUPPORT REINFORCE

DISCOVER EXPLORE BUY EXPERIENCE SHARE

shop

per

asso

ciat

e

THE SALE IS ONLY PART OF THE RELATIONSHIP

EXPERIENCES BUILD AFFINITY

Focusedon tasks

Focused onexperiences

FEW PROGRAMS CROSS THIS LINE

MEANINGFUL

PLEASURABLE

CONVENIENT

USABLE

RELIABLE

FUNCTIONAL

27

CONNECTEDCONNECTED

LOYALTY IS AN EMOTIONA crowd is a tribe without a leader.

A crowd is a tribe without communication. Most organisations spend their time marketing the crowd.

Smart organisations assemble the tribe.SETH GODIN

29

MOMENTS

PEOPLE

PLACES

“WHOLE BRAIN” LOYALTY

HABITTRUST AFFINITY

MOST BUYING BEHAVIOR IS HABIT

TRIGGER

REWARD

ACTION

Cue the right behavior at the right time

NUDGE

Build on an existing habit

Create a habit based on existing behavior

Reduce effort between trigger and action

1

2

3

BUILD ON AN EXISTING HABIT

36

CREATE A HABIT BASED ON BEHAVIOR

37

REDUCE EFFORT BETWEEN TRIGGER AND ACTION

InsightEngage

Anywhere/ Everywhere

Respond at moment of impact

Big Data Mobility

Cloud

Insight Engagement

Responsiveness

GETTING LOYALTY RIGHT

HOW TO SHAPE YOUR FUTURE

WHERE DO WE GO WRONG?

CREATE THE PLATFORM FOR EXPERIMENTATION AND GROWTH

Concept Ideas and prototypes

Explore with customers

Pilot Few segments/

sites

Continue learning

Scale up Refine and

expand

Manage capacity

Rollout Loyal, free and paid

Mainstream

Evolve Becomes

commodity

Change the game

Customer Experience

OrganizationalCapability

DEVELOPING CONTINUOUS LOYALTY REQUIRES EXTERNAL AND INTERNAL FOCUS

ALIGNING THESE DIMENSIONS IS LIKE TETRIS

Organizational CapabilitiesCustomer experience

Customer experience

ALIGNING THESE DIMENSIONS IS LIKE TETRIS: STEP 1

DOUBLE DIAMOND

Understand Define Explore Create

FIND SOLVE

EXPERIENCESCHOICESAVINGS PRESTIGEADVICEAUTONOMY

RELEVANT

46

FIND THE NEED

47

75 HAMBURGERS A SECOND

48

VALUE IS CREATED BY OUTCOMES

DESIGN EXPERIENCES FOR OUTCOMES

DOUBLE DIAMOND

Understand Define Explore Create

FIND SOLVE

51

CREATE A SOLUTION HYPOTHESIS

52

BUILD - MEASURE - LEARN

53

CONTINUITY

ALIGNING THE DIMENSIONS IS LIKE TETRIS

Organizational Capabilities

Organizational Design

ITCustomer

Experience

AND THERE ARE MORE THAN 2 PIECES

YOU NEVER KNOW WHAT MIGHT HIT YOU NEXT

56

A KATA FOR EVERY PIECE

IMPROVEMENT KATA BY TOYOTA

Baking innovation into the mindset

and culture of your brand and people

Creating a capability that

evolves with your customers over

time

• Emotion trumps transaction. Functional benefits have become an expectation not a differentiator.

• Trust-building is incremental. Delivery against expectations requires support of the whole value chain.

• Loyalty is a matter of habit. Create patterns that encourage a specific action and build variable rewards.

• Sustainable loyalty is built by design. Leaders in loyalty design experiences and platforms for continuous innovation.

TAKE-AWAYS

THANK YOU

Dianne Inniss @dianne_tweets

dinniss@thoughtworks.com