Capillary Technologies describes itself as “Asia’s leading SaaS product company” and is the proud technology partner for global clients like Dominos, Shell, and Tata Group, as well as other leading loyalty programs in North America and around the world.
The firm is also a new partner for “Let’s Talk Loyalty”, so we were delighted to meet two of their top executives for a masterclass in loyalty marketing, with a truly global perspective.
2) Aneesh Reddy
3) Jim Sturm
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.
Capillary’s Loyalty Solutions offer AI powered next generational technology, making them a catalyst for enabling meaningful human connections across the globe. The platform is deep and wide, yet flexible enough to meet the needs of any company looking to take its customer loyalty to new heights. Visit capillarytech.com now to see how they can transform your loyalty future.
Hello and welcome to episode 288 of Let’s Talk Loyalty. Today, I’m delighted to be interviewing a loyalty technology brand that has recently joined us as a new partner on the show, and one I can’t believe I didn’t already know about. Capillary Technologies describes itself as Asia’s leading SaaS product company.
And now with global clients like Domino’s, Shell and Tata Group, they’re an increasingly popular choice for loyalty programs in North America and around the world. My guests today are Aneesh Reddy, Executive Director and CEO based in India, and Jim Sturm, Senior Executive responsible for strategy based in North America.
Our conversation features the latest loyalty strategies, global industry trends, and best in class brand examples of successful loyalty programs at scale.
Paula: So Jim, and Aneesh welcome to Let’s Talk Loyalty.
Jim: Thank you, Paula. It’s great to be here.
Aneesh: Thanks Paula. Really good. Be here.
Paula: Yes, and I know it’s difficult to align the, the time zones given where we’re all located, so super appreciate the early start and late start for both of you. So let’s get into it straight away.
As you know, we always start this show talking about our favorite loyalty programs, so Aneesh, I might come to you first and foremost, I would love to hear from your career, what is your favorite loyalty program?
Aneesh: Uh, well, I think it’ll be the Taj Hotels one for me, Taj is the hotel brand of the Tata Group. And, uh, uh, you know, I’ve been a member for a few years now. Mm-hmm. . And what I love about the program is there’s something for everyone, right? So you, you really start, uh, you know, on one of your business trips in when you sign up. And, uh, you know, then they slowly graduate you out, uh, at the end is what they call us Epicure, uh, which is actually a subscription program.
It’s pretty expensive. $300 is something to sign up. Mm. Uh, and, and they’ve a good set of benefits right through. So it’s almost like they’re hand holding you through the whole 3, 4, 5 year, uh, uh, journey. And what I love about it is also that, you know, as you go higher, I think some of the, stuff that they give you are, are just, uh, uh, uh, so aspirational, such aspirational rewards, uh, that, you know, uh, you keep getting a amazed with the program all the time, right? So.
Paula: I love that. I love that. Aneesh, I seem to recall, somebody told me they were involved in the development of the Taj Hotel’s loyalty program, and I mean, like 20 years ago. So I must try and remember that. But I do remember, I mean, of course it’s a luxury brand, its absolutely gorgeous. But the hotel loyalty sector, I would say is super competitive.
So if Taj Hotels has done stuff to consistently, as you said, hold your hand and take you on a journey, sounds very effective.
Aneesh: Yep. Uh, I, I, I encourage you to sign up for them as well as you come in this part of the world.
Paula: I will, of course. I’m not sure we have one in Dubai, but listen over to you, g. I’d love to hear what’s your favorite loyalty program?
Jim: Uh, so I’ve been obviously in the industry for quite a while and, and I’m members of lots of programs and, you know, Amazon’s done a great job with, with Prime and a lot of the quick service restaurants have done a really nice job of blending and digital experiences. But my favorite, uh, is a local restaurant called Burnt Bbq.
Um, and the guy has three or four locations. And the reason it’s my favorite is because, um, it gets down to relationships. He knows me, he knows how I like my food cooked when I call or I order online. It’s like, this is Jim ordering and here’s how he likes his barbecue cooked and here’s the sauce he likes.
And it makes my experience wonderful. Yeah. And the food, the food, uh, is amazing. So it’s got to do with personalization and the experience.
Paula: Okay, I love it. Yes. And local Jim. Where, where exactly are you based?
Jim: So I live in Dallas, Texas. Um, Okay. And, and, and the food story is interesting. I grew up in Buffalo, New York, and chicken wings and now I’m here in Texas eating barbecue. So.
Paula: Super, great. Well listen guys, you know, it’s my first time I suppose, talking with you, learning about the company. So I guess from a foundation perspective, Aneesh, I’d love to start with you. Will you just tell us a bit about, you know, Capillary Technologies, where did it come from, and why did you start the company?
Aneesh: Paula, we, uh, as Capillary, we, we are about 14 years old. Uh, you know, so we started in 2008 exactly a month before, uh, Lehman Brothers time. Okay. Very opportune time to really start a company. And, uh, the starting story is, look, we really took kids out of college. And, uh, as we went and asked, uh, folks, we new in business saying, look, what are you struggling with?
What do you want us to build for? Uh, there was this recession right then, uh, and everyone said, Look, uh, customers aren’t coming back. We don’t know what to do to get customers back. So if you can help us, uh, if you can build something on, on that side, you know, we’d love to, uh, even though it’s a recession, we don’t mind, uh, uh, you know, uh, uh, working with you guys on.
So, yeah. Uh, so we spent six months doing that and. And we realized that, look, I think loyalty is a great way to get customers back in, uh, and that’s kind of how we started up. Uh, so, uh, so we really play in the loyalty and customer engagement, uh, space, you know, so, uh, and so for us, loyalty is more of driving the result of, you know, increased retention or increased, uh, engagement or increased sales for the brand. You know, when you start in a recession, you know, you have to drive numbers, right? I mean, that, that’s what, that’s what, uh, really gets people to, uh, you know, work with you. And that’s kinda how we, started off, uh, about 14 years ago. Wow. Uh, God’s been kind, you know, we’ve, we’ve been able to work with some of the best brands globally. The Tata’s are a large customers Shell, Metro, Saber, Taj Hotels, uh, among others. So yeah, it’s been a good, nice journey over the last, uh, uh, 14 years or so.
Paula: Wow. You know, there, there’s a a lot in common with my own journey, Aneesh, because I exactly got into loyalty as a result of the global recession.
So certainly in the Irish market, I was made redundant in 2008. And like you, I was very lucky in that one of the biggest brands in the country had realized that they really needed loyal customer. And they needed my skillset actually to deliver a loyalty proposition. So like you, I fell in love with loyalty and being able just to be loyal to your customers.
Um, so congrats on a wonderful story in 14 years and some incredible clients there. I always think actually that, you know, particularly, I mean, India is, I think still the second biggest population in the world, .Maybe about to become the biggest. And brands like Tata group for example, they’re just extraordinary in terms of their scale.
What kind of member base you managing for them?
Aneesh: Uh, you know, so, uh, they just, uh, we on a group program for the Tata’s. Okay. So it’s one program across all the, they, they have a hundred different businesses. Right? So it’s one program. Wow. Uh, across all the consumer businesses that they have. Yeah. Uh, we are, we, we’ve crossed about a hundred million members there, uh, for the, for the entire group.
Uh, and, you know, it’s, it’s a coalition, right? So a member can join from any of the other programs and, and stuff like that. So it’s a hundred million members there, you know, on the platform, last year we crossed, uh, a billion users. Thanks for the brands who work with us. So yeah.
Paula: That’s extraordinary. I used to start by asking my favorite statistics, so that would definitely have, uh, qualified for that.
So listen, Jim, I saw some wonderful, um, career in loyalty for yourself as well. So maybe you just tell us a bit about your career and all the work you’ve done, uh, in the loyalty sector.
Jim: Um, so yeah, I’ve been in the loyalty industry, uh, for quite a while, well over 20 years. You know, I grew up as a technical person, uh, writing in code long, long, long ago.
But to me, life’s about relationships and, and I had the special opportunity to meet an individual by the name of Hal Brierley. Uh, I’ll tell you how is. Uh, I call him the father of loyalty, uh, because he was there in the beginning on many of the airline hotel programs were, which were the beginnings of, of structured loyalty.
Um, and so I ran a company called Brierly and Partners and I learned so much about the industry, um, and, and, uh, really about how these programs work. It’s a very unique. Cal call it almost in unique, uh, niche industry loyalty. It’s kind of a mix of science and art and human psychology to a degree, because it’s all about, it’s all about relationships.
Yeah. It’s all about, you know, if you take what. If, you know, if I’m loyal to a friend or another individual, um, many of the same concepts apply, uh, in the business world. So, yeah, many businesses have realized, number one, we, we must take care of our best customers. We must make sure our customers are coming back.
But it’s very important that the relationship is based on great product and also great experience and great mutual benefits. So, yeah, you know, I worked for Brierley for, for 20 plus years and then, uh, Then we, this company was sold and, and had the unique opportunity to meet Aneesh and, and, uh, it was an immediate, uh, you know, the, it was amazing to me how powerful their platform is. And Aneesh gave you a few numbers. Um, but their objective at that time was very much around, we we’re doing great in Asia, but we figure out, gotta figure out this US thing. and kind of timing was perfect. Yeah, kind. Timing was perfect. Kind of serendipitous and, and so I said, Well, let me help you. So here, here we are growing very fast in the US market.
Paula: For sure. And I actually think serendipity is exactly a point, Jim, where it’s, it’s probably underappreciated, but actually makes a lot of relationships really feel good. So the fact that you guys met and the US has so much potential for you, and I know we’re gonna get into talking, you know, about a couple of your kind of clients and case studies, um, in that market now.
So super exciting times. Um, 14 years so far and plenty to go. So I guess what I wanted to, to maybe get into talking about is, you know, I suppose first of all, there’s lots of ideas out there, and maybe Jim, you’ll speak to this, you know, I suppose from a, a US perspective, given all of the programs there, Like, I’m particularly passionate about innovation and things that are really interesting and exciting for consumers because one of the things we talk a lot on this show about is, you know, you know, points can be something that that customers just kind of maybe don’t always understand or maybe just get a bit jaded with.
So just with all that wonderful experience and career behind you, I do know of Brierley, of course. Tell us about some of the innovation that you’ve seen in your career or across the industry.
Jim: Um, so that, that, that’s a good question and um, fortunately and unfortunately I’ve been in the industry for a while and it’s unfortunate cuz it means I’m getting old.
But with age comes with age comes experience. So I’ve seen a lot. And these programs started long ago. I mean, I remember going to the supermarket with my mother when I was young and she would get S&H green stamps and we bring the green stamps home and put ’em in a book and at the end if we filled the book up, she got something free, free piece of cookware or something.
And, you know, The concept of customer loyalty’s been around forever, but these structured programs, you’re right, they started with spend and get the hotels and airlines were there first. The innovation became, okay, let’s be get beyond, you know, come nine times and get the 10th, free the spend and get. And then the introduction of points and currency was innovative at the time, very innovative around, let’s not just give something to someone, let’s give them a currency that they have to earn more of. So we’re stretching their spend, right? We’re really driving this accrual stretch. Then the industry came up with tiers and then tiers turned into paid tiers, and subscription programs are very popular now, uh, in terms of, you know, spend $10 a month and, and get free coffee every time you visit.
I, I, I actually just joined the Taco Bell, Taco Club, and I, I can go every day and get a taco and, and then, now we’re at this innovative state of, I’ll call the three E’s, Engagement, Experiences and Emotions. Um, so we’ve now evolved away from transactional, and this is kind of loyalty, to that loyalty, transactional behavior, whether it’s spend or whether it’s points or whether it’s tiers, to now engagement behavior. Yeah. Um, we’re actually working with Purina, and Purina wants people to know about their brand. So you can watch videos to learn about the brand. Yeah. Highlights for Children is another one. They, they want people to really understand how much they care about the family. And so watching videos and, and social engagement and community experiences mm uh, are so important because it drives, emotional loyalty. So Mary Pilecki out of uh, Forrester really is driven a lot around emotional loyalty. Um, because at the end of the day, Loyalty programs themselves don’t make us do more. They do, but indirectly, we, we first have to love the product. Right. You still, we, Our favorite programs are typically around a product we love Aneesh mentions travel.
I mentioned food. Um, but this emotional bond comes from your experience with the brand, how convenient they’ve made it. Product is of course important. and then you have developed this emotional relationship. It’s just like our friends, we have friends and we have really strong friends, and some we’re very emotional with.
And yeah, it’s the same thing. So this innovation has occurred, one in concept of loyalty, but number two, now personalization is so important. So the biggest innovation now I’m seeing is around data and artificial intelligence. So taking those concepts I just mentioned to you. Mm-hmm. and embedding them into the platform.
So the best platforms of today have now taken these loyalty, best practices that I kind of walked us through. And put them into the platform. So these predictive and prescriptive models in taking what was once done by humans. And I’m not, I’m not an advocate of eliminating human jobs, but I am an advocate of saying the platform should make a human job easier.
So let’s take, predictive models and prescriptive models, and we even have something called Nudge. Let’s nudge brands for how to take these breast practices, put ’em into programs, and significantly enhance their relationships with their customers.
Paula: For sure. For sure. Lots in there. I like the Engagement, Experience and Emotion piece Jim.
That’s super nice and simple.
Jim: Yeah, that I’ll call threes. I think we once talked about four Ps, price and promotion and, and, and part of promotion really has become loyalty in CRM and to me it is threes and, and it’s just a fun way to remember.
Paula: Yeah, for sure, for sure. And Aneesh, would you share that? I suppose from an Asian perspective, you know, based in India, huge clients like you’ve just talked about. This whole concept of moving away from transactional loyalty is, I suppose a very big theme for us on this show. And as Jim says, it is all about emotional loyalty and achieving that can be done in obviously hundreds of different ways.
But what are you seeing in terms of the evolution of loyalty?
Aneesh: Uh, Paula, I think, uh, very similar stuff in Asia as well. I think the purpose of loyalty really is, uh, you know, to, to bring up that subconscious preference for a brand, right? Mm-hmm. , you know, that subconsciously I prefer something, right? If, and if you’re able to deliver that, we deliver loyalty to the brand or to the product, right?
I love it. Yeah, and I think at some point in time, That preference was built through knowing, look, uh, that this brand offers the best value to me. Mm-hmm. , which is the stamps that Jim was talking about, or. Sure. But, you know, I think today’s generation has changed significantly. Right? Yeah. Today, you know, I think there must be 10, 15% of people who look for value mm-hmm.
uh, but there are others who look for something else, Right. So, I think. What’s fundamentally happened in loyalty is this whole one size fits all approach of a points program, I think is, is is kind of broken, right? I mean I’m look at us as a generation now. Yeah. We, we just so different from each other, right? I mean, in the same house, my brother is so different from me, right?
So, uh, and uh, so I think, I think what we, what we are beginning to see, at least in Asia also is loyalty moving to becoming, more personalized. So the program is also has a few things in it. Think of it like a Swiss, uh, I mean I, and you know, different people want different stuff from the program, right? So there are folks who would want the value, uh, side, so you might still have the points. There are folks who really want very aspirational, uh, benefits, you know, that, uh, you know, you really got a very nice bump up when you were, uh, there with your family, you know, And that’s gonna stick with you for, yeah, the next five years, right? So, uh, so things like that.
So I, I, I do see a lot of, uh, programs moving out from just doing points and transactions and, uh, stuff to more habit forming stuff. Yeah. Uh, you know, or, you know, trying to, uh, get you a much better experience. I. When you can wow, someone with great experience. I think they just, you just, uh, you know, take a switch off on the subconsciously for them.
Aneesh: So, yeah. Loyal for life. So you see a lot of that happening.
Paula: Yeah. Yeah.
Jim: You know, Paula, I, I, I’d wanna add one thing, and it’s a concept of, of value. So today our most precious comodities is time and the ability to create a digital experience that really is very personalized for me. In other words, I can order really quickly.
I can get first in line, I can pick up fast. They, they make sure it’s done to my personal likings. Yeah. This, this really gets to the true value becomes the, the, the, the, the experience, the digital experience that’s created and loyalty advances that significantly.
Paula: For sure. And the one that actually I’ve written a lot about in the past, um, is I know a client of yours and I do believe that this is exactly why, that they’ve won so many awards, for example, and that’s Domino’s.
Who, you know, they’re so innovative. I think at one stage when I was researching them, they had something like 13 different channels to order. And to me that’s an immediate way to drive loyalty, make it easy, make it accessible, and again, build in alongside the loyalty proposition. So I’d love to hear a bit about that.
Cause I know it’s a, a global client for you guys.
Aneesh: Paula, I think Domino’s has a great program globally. You know, I think they’ve really been able to build, uh, loyalty for, you know, their users and, uh, and, and you know, we’ve had a relationship with them for many years now, uh, and to the point that Jim made on, uh, personalization and time, right? Uh, sure. What we realize is, uh, pizza ordering is one such thing. I’ll just give you an example. We, we ran this experiment to saying, look, there are three offers and there’s one offer only that is going out to two very statistically similar cohorts. Okay. Uh, which, which emailer do you think got like a better response rate?
There were three offers. So a customer could choose from three. Yeah. And there was just one single offer. Right. Which, was, uh, sent to like, uh, sent to a group?
Paula: What a great question. So, I’m gonna guess that, uh, giving people the choice of three pizzas means that more people can choose their favorites. So I would guess I would have a higher conversion rate now.
Aneesh: No, actually, so we saw that, you know, the, the one that we sent where there was a single thing mind, lesser, you know, lesser cognitive load and okay, we actually saw that look. Uh, and so now, uh, whenever we run campaigns or whenever we done anything in terms of communication, yeah, it’s always personalized.
You know, the idea is that, look, if I have to give you three and you ever think, be seeing very clearly where data that look most people don’t want that. They want something that works for them 80, 90% of the time. Okay. You know, and, uh, so some pretty good learnings there. In fact, uh, with, with a lot of the, uh, uh, we see that behavior of consumers just wanting to do the same thing, okay?
Again and again and again for at least 30, 35% of, uh, the, the, the user group, right? They just want the same thing. They don’t wanna know what new, what this, what that, so. And there are others who want the new stuff all the time. Right. So, Totally. So I I, I do think, uh, Domino’s in that sense is, is actually, you know, the 13, uh, uh, uh, ordering channels you spoke of, or Yeah.
They, they get that really well that look. People just want to know how much they need to know. They don’t wanna know everything that you have about them or Yeah, just make it like really personalized, uh, in that sense, so.
Paula: Totally. I have a favorite pizza Aneesh and I know exactly, and Domino’s do an exceptional sauce that I can’t get anywhere else.
So totally gets my vo uh, my vote, but I wanna just go back as well. Aneesh, um, you talked there about, uh, the subconscious part of loyalty and that’s something to me that is, um, absolutely true. Like with every fiber of my being, I know that there are brands that I’m just loyal to because along the way they’ve done things right for me.
But I guess, you know, when I’m thinking about the audience listening to the show, as you know, loyalty directors and practitioner. You know, a lot of the time we’re challenged with proving that we have created, for example, transactional loyalty and measuring those kind of things and the results of our investment can be extremely difficult.
So what would you be saying to your kind of clients in terms of measuring success when they’re building their loyalty propositions?
Aneesh: Well, I think that’s a great question, Paula, and like you said, you know, I think the industry struggles with that. Uh, you know, over the last 14 years, I think the first 6, 7, 8 years even we, you know, spent a lot of time thinking, you know, how do you measure ROI?
How do you measure, you know, what’s the incremental value of what, uh, uh, what loyalty, uh, is delivering, Right? So, yeah, and I kind of filter that down into two things now when we talk to our, our customers. Ok. I think the first part, first part, is just how interested is your user, user base in the, in the program?
Okay. How much interest are you able to create? Okay. I think that comes from very simple. Are you able to sign enough people up? You know, is 40, 50% of the user base signing up and are you creating a habit? Right? Uh, you know, which is, are they opening the app three times? What are they using the, the, uh, the program every time they come into the store or something like that, right?
So, okay. The second thing, which is where we actually link it to transactions is, uh, you know, we, we believe that loyalty actually starts delivering after a redemption or after, you know, that subconscious switch has to get switched on, right? Something has to drive that, right? So either they’ve had a wow experience or either they’ve had a redemption or you’ve given them something, you know, which kind of wow them, Yeah.
So we actually start measuring impact of loyalty after that first, the first wow moment. Wow. Right? So, Uh, so let’s say there are two cohorts of customers. One who’s not gone on to already redeem anything, ever. Yeah. Right. They’re still coming to you and spending, right? Yeah. So, and then there is a second cohort of customers where, you know, they did their first three, four transactions, got to a place, redeemed something, got a nice wow experience. You know, you send them something on their birthday, something, Right. But you know, that look, yeah. This could have switched something subconsciously. Yeah. And we measure how these two cohorts have behaved subsequently.
Yeah. You know, and, and, and like, we’ve generally seen the second cohort. At least 40, 50, 60% more in terms of spend than the first one. Wow. And once you do that, you know, there’s a very clear view, even subconsciously, Right. I mean, like I’m speaking toward Taj. Yeah. You know, once I got a great experience at Taj, the next time I’m looking a hotel, I’ll first look for Taj.
Yeah. So it’s just, we are just trying to measure that, you know, what’s the value of that subconscious switch? Ah, and we’ve generally seen that to be very, very clean ROI. Right. So you see the cohorts starting to diverge. Yeah. Quite nicely. You know, once that redemption event or that surprise event, uh, ends up happening.
Paula: Yeah. I love that Aneesh and I think only once before on the show, um, a very big airline out of the US uh, talked to me that their first KPI was measuring the speed to the first redemption. So exactly to your point, really, this idea that the moment of truth actually only comes through exactly when you’ve closed the loop delivered from your side.
So that’s super interesting from a measurement perspective. And I’m guessing, Jim, you’ve probably got a lot of lessons along the way as well. So tell us any, you know, maybe important lesson that you think loyalty professionals listening, um, you know, could learn or, or should learn in terms of their loyalty programs?
Jim: Um, Let me start with what Aneesh just spoke, spoke about, and you asked cuz this is a really important lesson. So traditionally, um, first of all, CFOs would tend to say, Look, my best customers come back no matter what. So why do I need to spend a bunch of money on loyalty? Right? Sure. Our best, my best customers would come back no matter what.
And then the industry became this, this incrementality measure of measuring. Members of the program versus non-members of program or post-launch versus pre-launch? Well, there’s a lot of other factors that can influence those, those, uh, increases that you see. But we’ve found, um, in Capillary that the, exactly what Aneesh described around taking a look at people that have redeemed versus non redeemers.
So now we’re even comparing to members of a program, but folks that haven’t redeemed versus those that have, and the results are significant and drastic and we’ve gotten a lot of CFOs to acknowledge, yes, this is the best measure I’ve seen. So it’s unique. And so therefore, what you need to do as part of a program, strategically, these programs are about how do I develop a relationship?
How do I motivate a customer to earn enough to achieve a reward? So you’ve gotta take a lot of those best practices that I talked about in loyalty tactics, and, launch a structured program, a promise program, and drive redemption. So the first lesson learned is redemption is good. Mm. Um, many times in the past I’ve heard people say, Yeah, let people learn.
And then hopefully they don’t redeem and breakage is good. No, that concept is completely flipped. Uh, number one, redemption is, is really good. Yeah. And then digital, you know, the second one, I could go on and on and on for, but for, for what’s really working. But digital experience is great. We’ve already talked about it.
Yeah. Uh, we are time starved and we also are, you know, there was a great commercial from Staples with the easy button. Okay? And remember the big red easy button, and I don’t know what it was, but they, you pressed the easy button, whatever you wanted was there, right? So as humans now we are overloaded, right?
I, I think I once read that today if you pick up a, a, a, a copy of the New York Times and, and read it. You’ve, you’ve been presented more information than you were in a lifetime back in like the 17 hundreds. So, so we, we are so overloaded as human beings and, and our minds cannot process all that’s happening.
So yeah, this digital experience, creating, creating experience of convenience and, and making my relationship with a brand easy. They know me. They, they tell, they remember me. They know my name. They, they, they, they make my experience easy. Yeah. Um. Driving towards that is really the end goal. Digital experience and loyalty have become the same.
And fortunately, the pandemic accelerated that because while beforehand it was tough to get budgets to make sure the brands truly had a truly omnichannel digital experience, well the pandemic forced that. So yeah, those are sort of two lessons learned.
Paula: Love it. Love it. And you’ve reminded me, actually, Jim, my favorite book title of all time was literally on exactly what you’ve talked about.
It was called Don’t Make Me Think. And as soon as I saw that title, I was like, that is genius. I feel so overwhelmed. Yeah. So that easy bot that you just referenced, that is exactly what loyalty needs to be, even if behind the scenes we have a lot of complexity and we need all the technology to be super clever.
At the end of the day, the simplification needs to happen for the consumer. And I, I definitely agree with this point about redemption. Um, just thinking about other loyalty programs as well, where, they might be bringing in more accessible rewards, for example. So, you know, something that’s very easy, Um, I’m thinking of coffee companies, for example.
You could even just redeem like a, a flavor shot, for example, is your first redemption instead of having to, to, to do 10, for example. So really, really good examples there. And I’m thinking as well, I suppose just globally, because you guys have this perspective, you know, Asia and you know the US. Would you say there’s very different, um, trends happening globally in terms of what you’re seeing with your clients?
Maybe Aneesh, you might talk on that one.
Aneesh: Yeah, I think, I think, uh uh, there’s some, some trends, which are quite global, right? Uh, Paula, one is the, uh, you know, I think the cookies are going to end, so there’s a need for zero party data. Uh, and that’s both sides of the world, right? Yeah. So I think, uh, so you, you, you’re starting to see that, uh, the second trend, which Jim spoke of is, again, I think very global, which is loyalty and experience coming together, right? So yeah, I’ve seen more brands wanting to launch loyalty through an app, whether it’s a Shell, where it’s an bought, which are all customers of us, uh, in the last 3, 4, 5 years, compared to, you know, the last many years, right. So, uh, cool. So I think that’s, that’s a big trend. Uh, I think, I think on the US side, another trend we are starting to see quite a bit, uh, which at least encourages me a lot is, uh, a lot of businesses wanting to move to good technology away from agencies and services and, you know, so that’s a trend that we seeing, like quite a, quite a bit that folks want good tech, you know, folks want a good bit of AI in the product. Uh, yeah, which, uh, unlike and wanna move away from, some of the recent ones have been saying, Look, we don’t wanna work with this agency we worked with for 15 years, but you wanna move to our tech, which is more self, uh, you know, on a click, I can do something.
You know? So that’s another big trend Yeah. That we starting to see, uh, in the US Yeah. In Asia, I think the bigger trends we are seeing is, uh, a lot of conglomerate, you know, like unlike the US, 50% of all business is owned by probably the top hundred conglomerates in Asia. Wow. Right. So it’s, it’s, it’s just the way Yeah.
Asia is, uh, in that sense, a lot of these folks coming up and saying, Look, okay, I have 50 businesses, but it’s the same consumer buying from all those businesses. Yeah. Right. So why shouldn’t I have one, one group program, like the Tata stuff, or we run something similar for the Alpha Themes. Uh, so that’s a big trend we seeing, uh, on this side of the world.
Another trend we seeing is, uh, loyalty, getting into the small business space that is the B 2 smallB. You know, earlier loyalty would be very consumer focused. Right. But we starting to see, Yeah, a lot of large consumer brands saying, Look, there’s this small retailer who buys from us. Can I do something for him?
There’s a small painter. Yeah. Who’s my primary customer? Can, I don’t know, influence a program for the painter. Yeah. I think some of these are, I think in that sense, we seeing loyalty expand out from the usual retail travel hospitality into much more of conglomerates, much more of a small business focus businesses as well, so.
Paula: So it seems to be loyalty is relevant for everyone in business if they’re particularly consumer and we know there’s plenty of B2B and B to E as well.
But, um, yeah, no interesting observations. Particularly agree with the move away from agencies, Aneesh. Um, you know, there definitely is this idea that actually I want a tech company that feels like a partner and the future proofing, I think is something they want a lot of visibility on as well. So a lot of reassurance I guess, in terms of, you know, what you guys are building, uh, longer term, which I don’t think anyone can represent as well as you guys can yourselves. Um, and I guess Jim, the same question to you then, in terms of global trends. Would you have any other observations, you know, sitting in the US compared to, uh, to what Aneesh has seen.
Jim: It’s been fa the last years have been fascinating because being a loyalty industry, passionate, uh, member of, it’s been fun to watch what’s happening throughout Asia.
And I think Aneesh hit on all, all the main points, but I’ll resonate a few. Number one, this conglomerate business model and holding companies is very predominant throughout, throughout Asia. And if in fact, especially with some of the smaller companies, so, It’s very popular, um, and the need for a highly flexible platform.
The other point to emphasize is really this move from agency to software as a service cloud providers that have taken much of the, you know, the data analytics and the strategy that was traditionally done by agencies embedded it into the platform. Not all of it, but some of the core essences of it. Yeah.
Making sure every day you’re sent reminders of what you, what could be done to make your program more powerful. But this is something that’s universally, uh, applicable. Mm-hmm. . Um, so, you know, the only other thing I’ve seen is really, is really besides the, the time star of human beings that we are, um, totally, This is one, this is one category that the US market has been a little bit ahead of Asia, uh, in.
Yeah. However, um, um, Asia is very strong from a tech perspective, so I found that these platforms like Capillary, uh, have been built and are extremely powerful and are, we’re seeing a tremendous, tremendous appetite for, Yeah.
Paula: Yeah. And I totally agree actually. I think on both sides of the world, there are things to learn.
Um, and I always look to Asia for, you know, the, the, the coolest idea. Again, the scale is astronomical. Um, and perhaps it has been developed more recently. Uh, I did love when you mentioned earlier, Jim, about S&H stamps because I don’t think there’s a lot of people who really realize the origins of the history of loyalty.
But I, I love that. I did read, actually a statistic that I think was in the nineteen sixties, there was more S&H stamps in, um, in issuance than the US Postal Service. So there you go.
Jim: I’m certain there was, there was, I used, I used to present, when I presented to clients, I present, uh, two slides just to tell what loyalty is.
Yeah. And one was from the TV show. Cheers. Do you remember the show? Cheers. Course Norm would come in the bar and everyone knew Norm’s name. Yeah. And the other one was the Easy button that I mentioned. And then I realized after I showed the Cheer slide and I was getting blank stares, I realized, Uhoh Jim, you’re getting too old.
Nobody knows what Cheers, . Oh dear. But that’s the essence of, of what these programs are about. It’s about knowing, simply saying thank you is still, critically important. Oh, I totally agree. Want to be known and said thank you.
Paula: Totally. Yeah. Shouldn’t be about just getting them to buy something all the time.
That’s one of my favorite recommendations. So, totally aligned. So I guess my final question for both of you is, You know, so many people listening to this show have very well established loyalty programs. Um, they listen to it, I guess, for new ideas. We’ve talked about some of the innovations, but I do think it’s important to be thinking ahead.
So again, To both of you. Maybe Aneesh I’ll come to you first. You know, given that we’re coming into 2023, I’m sure everybody’s planning some fantastic new activities for next year. But what do you think loyalty directors should be thinking about in terms of refreshing their program as we come into the new year?
Aneesh: I think, uh, for the best programs that we are seeing, uh, work, uh, other ones where they have something for everyone. You know, I think as individuals we’ve just become so different, uh, you know, and it’s very visible, Right. As a community, I think very different as individuals now than probably were 10 years ago.
Yeah. Right. So it’s very different sub segments and very different. Um, personalities and what we identify with, et cetera. Right. So, yeah, and I do think hence loyalty also needs to move from this one size, one program fits all approach to a, a personalized loyalty view. Like a, you know, so, uh, I think it has to start with, you know, understanding what each of these segments want, and then kind of having a Swiss Army knife, I mean, good tech, which can deliver all that without showing that complexity to the consumer. Yeah. Right. So, uh, I think, uh, yeah, as, as, and we seeing a lot of that, which is as people think of redoing their loyalty, that the whole personalization segmenting it.
Right. I think some of those is what I would, uh, I would recommend very strongly.
Paula: Yeah, I think we’ve been talking about it for a long time, Aneesh. Um, but not everybody’s managed to achieve it. I think sometimes people do find it super complex, so absolutely, it, it’s, it’s, you know, non-negotiable now it just has to be delivered.
So, really good point. And Jim then, from your perspective, what do you think, uh, loyalty marketers should be thinking about for 2023?
Jim: So I don’t think they should overthink it. It gets down to know who your customer. So many of the points in niche made. You really need to know who your customer is in, in today’s data practices and, and the ability to, to build a program that brings people in. You learn so much about them, so know who your customer is. Ask, talk to your customer. Ask them. It’s give them surveys. Uh, get feedback in every mannerism that you can, and then, like good relationships, uh, be very relevant and conversational and really give customers what they want. Um, whether it’s a, whether it’s a great digital experience, uh, whether it’s a rich reward, uh, whatever, uh, it may be.
But it, it really gets today’s technologies. Make it so that you can deploy, platforms that really help you know who your customer is, but get back to the basics of relationships. Know your customer, develop the relationship and, and treat them like the human being that they are.
Paula: Totally. And would you say it’s the same then, Jim, the same advice I guess for maybe people who are starting for the first time to build a loyalty program versus those who are, you know, further along the journey that we talked about.
Would you have any different advice for people maybe just starting on the loyalty journey.
Jim: Uh, no, except a stronger emphasis on starting to understand who your customer is. Right. Got it, Cause most companies that have don’t have a program. Yeah. You know, Aneesh mentioned multiple industries like the CPG and manufacturing industry are, are really starting out.
And the first question I’ll ask, Well, who is your customer and how do you know? Well, we’ve done. We’ve done syndicated research and we get feedback, but we, we really don’t know who our customer is. We don’t have any segmentation. We can’t decile, we can’t profile, We have very little demographics except for using our eyes to, And so it really gets down to find a way to figure out how to get to know your customer better, um, and, and, and, and start to gather this, uh, rich insights and this rich data, and then use it for your customer’s benefits.
Yeah. Stop the focus of using it for your benefit. And use it for your customer’s benefit to make their experience truly better.
Paula: And that is, again, totally aligned, Jim, That is my, my single most strongly held view about loyalty. Our responsibility is to be loyal to our customers. So, uh, yes. Wonderful piece of advice.
Yeah. So that’s all from my perspective. Um, I might just give you one final opportunity, maybe Aneesh to you first, if there’s anything else that you think you wanted to mention before we wrap up today.
Aneesh: I think they’re at a very interesting time when digital data loyalty of these are kind of nicely coming together.
Uh, totally. You know, so super excited on where the industry is heading.
Paula: Okay, great. And Jim, any final words of wisdom?
Jim: Yeah, I’m glad you asked this cause I forgot to mention something. So actually, the number one criteria of success for a loyalty program is the people on the front end. So whether it’s a store associate or whether it’s the customer service organization, and, I will tell you back to your last question, you really need people starting this out to really understand how important those individuals are cuz they will make or bake your program. Yeah. My favorite thing to do, so having been in the industry for so long, my favorite thing to do is go places and then people will say, Hey, do you wanna join a loyalty program,
And I’ll say, You know what? I don’t get these things. How do these work? And I, I just don’t understand them. Yeah. And that person can either, Convince me why I should join. Yeah. Or they can be like, Ah, well forget it. It probably isn’t any good. And I don’t, So I think, Yeah. Um, that we cannot forget about the human beings and the technology that you put that customers first experience when we’re talking to them about a partner.
Paula: Yes, Yes. Yeah. And I’ve said it on the show a few times, Jim, you know, if they can’t, you know, sell it to me literally in a way that they genuinely believe at the point of sale, right? Then they’ve already lost me and I, and I pity the poor loyalty manager who, who really thinks they’ve done a good job, if they can’t deliver.
So, um, so wonderful advice. Listen guys, I have really enjoyed the conversation already, looking forward, I’m sure we’ll have plenty to talk about in the future again. So with all of that said, Aneesh Reddy, Executive Director and CEO, and Jim Sturm, Senior Executive responsible for strategy, both for Capillary Technologies.
Thank you so much from Let’s Talk Loyalty.
Jim: Thank you, Paula.
Aneesh: Thanks, Paula.
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