#102: The Science & Psychology of Human Engagement for Customer Loyalty

PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.

PAULA: I’m your host, Paula Thomas.

PAULA: And if you work in Loyalty Marketing, join me every week to learn the latest ideas from Loyalty Specialists around the world.

PAULA: This episode is brought to you by Epsilon and their award-winning People Cloud Loyalty Solution.

PAULA: I’m always delighted to have Epsilon on board as a sponsor.

PAULA: And particularly today, as they were just named a leader in the Forrester Wave Loyalty Solutions Q2 2021 report, with the top score in the current offering category.

PAULA: This report is designed to help you as marketeers find the perfect partner for your loyalty program.

PAULA: So to download your copy of the report, visit epsilon.com forward slash let’s talk loyalty.

PAULA: So today’s interview is with Dr.

PAULA: Anil Pillai, who I came across recently when he was a keynote speaker at the Customer Fest Virtual Conference held in India.

PAULA: Now, Dr.

PAULA: Anil has a PhD based on his extraordinary work and research into cognitive, behavioral and human sciences.

PAULA: And I love his experience and perspective as he works across India, Europe and the Middle East.

PAULA: Now, Anil has helped some of the world’s biggest companies to understand their customers and not just from a transactional perspective that so many of us really focus on, but also really understanding the emotional context from a deep understanding of the human psyche and how that translates into engagement with our customers.

PAULA: So I really thought what a great way to understand and help build our customer loyalty.

PAULA: So Dr.

PAULA: Anil Pillai, please tell me, what are your favorite loyalty statistics?

ANIL: Right, so I have two of them for you, Paula.

ANIL: One is very interesting.

ANIL: 81% of customers trust recommendations from their family and their friends, as opposed to stories or propositions that come to them from brands and companies.

ANIL: That’s one.

ANIL: And the other one is very interesting.

ANIL: 78% of customers say they’re not loyal to any one brand.

PAULA: Oh my goodness, wow.

PAULA: You know, and here we are thinking we’re doing fantastic work, Anil.

PAULA: That’s pretty shocking if 78% and Nielsen obviously is a global organization.

PAULA: So for them to conclude that, I suppose on the positive side, it means there’s lots of work for those of us in the industry, but I guess for the brands that are listening, it’s probably a little disappointing.

PAULA: So there’s loads to explore, Anil.

PAULA: I think what I loved from when we first met is purely the extraordinary, both academic and I suppose business commercial experience that you have, really about this whole topic of the behavioral approach to loyalty.

PAULA: So I will ask you to define that in a second, but even before I get into that actually, what I picked up from one of your own websites, and I know you have a number of brands which we’ll talk about, but you’re based in India, and India currently has a population, I checked, of 1.366 billion, which is four times the population of the United States, where my main audience is actually listening.

PAULA: But what also interested me, Anil, is I believe India currently is about sixth in the world from an economic perspective, but projected to grow to third position.

PAULA: So it really seems to me that the consumer appetite is growing exponentially in India.

PAULA: So we have a lot to learn from you.

PAULA: So with that kind of background and context, please tell me and our listeners all about what is this idea of a behavioral approach to loyalty?

ANIL: Right, I’ll get to that, Paula.

ANIL: Before that, the work that I do staddles between Europe and Asia and India.

ANIL: So it gives me a very unique perspective on how consumers behave in a market like Germany or the Netherlands or Scandinavia and how they behave in a country like India.

ANIL: Right, so and it’s very fascinating given the background that you just mentioned.

ANIL: But having said that, coming to the question that you asked me on behavioral loyalty, at heart, I’m a human engagement focused person.

ANIL: That’s really where my interest lies.

ANIL: Why do humans behave the way they do?

ANIL: Why do we take the decisions that we may take?

ANIL: What is our interpersonal relationship in groups and as individuals?

ANIL: So human engagement is what I’m all about.

ANIL: And for me, when I look at loyalty, I go back to what we were as humans, as we evolved from the different versions of where we are today as homo sapiens.

ANIL: And to me, it all lies, the way we react, the way we make our decisions, it’s all wired very basic to our very basic being.

ANIL: That we could survive, that need to thrive as a species, that need to thrive as a tribe, the propagation of one’s self and one’s DNA and the propagation of one’s tribe’s DNA.

ANIL: Essentially, that’s what we are all about.

ANIL: And it manifests itself in some very fascinating ways in the business world.

ANIL: So when I look at behavioral loyalty, when I look at the behavioral dimensions of loyalty, there are three things that come to my mind, and that’s what we’ll kind of focus on today.

ANIL: One is what I call as attitudinal loyalty or emotional loyalty.

ANIL: The other is what I call as behavioral loyalty or transactional loyalty.

ANIL: The first thing that we’re going to talk about is the community, the creation of tribes and communities.

ANIL: So to me, these are the three very important aspects of loyalty as seen from a behavioral lens.

ANIL: So when one talks about behavioral loyalty or transactional loyalty, that’s the loyalty that you exhibit when you go and shop at a grocery store that’s on your way home from work.

ANIL: There’s a transactional ease that’s there because that person is on your way, and you don’t have to really go searching for another grocer.

ANIL: It’s simply that much more convenient.

ANIL: That’s transactional loyalty, or that’s what we call behavioral loyalty.

ANIL: Attitude or loyalty or emotional loyalty is when you go out of your way to seek a brand, you go out of a way, you put yourself to some amount of effort, right, and seek something out for yourself, right?

ANIL: That’s because there’s an emotional connect and we’ll talk about it as we go along.

ANIL: And the third part is community.

ANIL: You know, it may surprise you, human beings are not wired to be loyal.

ANIL: You know, and I know, I know this is going to be a little shocking, I’m afraid now.

ANIL: But we’re not, we’re not, you know why?

ANIL: Because we have something wired into us called the seeking behavior.

ANIL: We like to seek things out.

ANIL: Wonderful, wonderful experiment done by somebody called Jan Panskep, a scientist whom I admire a lot.

PAULA: Yeah.

ANIL: I was released, passed on.

ANIL: So Jan, Jan actually put rats in a little maze.

ANIL: And he, what he did, he and his team is, they would, you know, incrementally increase the amount of pain that’s inflicted on the, on the rats.

ANIL: Of course, a little cruel, but you know, he did that.

ANIL: And he would find, and he would see, and he would put a little piece of chocolate or cheese at the end of the maze and find out how much effort does a rat put in to go and get that piece of cheese or chocolate, right?

ANIL: And so despite the amount of increasing pain, the rat would still go and seek the chocolate out, would seek the cheese out simply because the cheese and chocolate gave a dopamine rush in the, in the, in the rat’s brain.

ANIL: So, and then of course it led to a larger, bigger study.

ANIL: So the point is that we are wired to seek.

ANIL: We have seeking behavior.

ANIL: The only, and therefore loyalty is not something that’s inherently wired in us as in our primordial brains.

ANIL: But this flips when we are in a tribe.

ANIL: We like, we like to stick to a tribe because the tribe gives us safety.

ANIL: It ensures survival.

ANIL: It ensures that we can navigate dinosaurs and, you know, all the other antediluvian monsters out there and the modern world, it gives us a sense of security.

ANIL: So, that’s the reason why community is so much very, so very important.

ANIL: And to my utter dismay, a lot of professionals, for some reason, don’t seem to see that.

PAULA: Yes, yes.

PAULA: Well, I think increasingly the listeners of this show are hearing it, Anil.

PAULA: You’re perhaps the most academically qualified, but actually not the first to say particularly this point about community.

PAULA: So I definitely want to explore it some more.

PAULA: I think as an industry, there’s a lot being said about moving beyond the transactional side.

PAULA: And if I’m right, that’s probably what’s leading to the Nielsen statistic you quoted earlier.

PAULA: So 78% say they’re not loyal to a brand, but in fact, they are behaving in a loyal way.

PAULA: So we’re getting a certain amount of complacency and a certain amount of, yeah, it just happens to be the best of a bad lot, perhaps.

PAULA: But I suppose it also gives insight to what you were talking about there, you know, flipping in a tribe and this whole piece around, you know, the safety and security of, you know, the recommendation from customers, because I really think that emotional loyalty piece is absolutely extraordinary.

PAULA: And it’s a fascinating way that I think more and more brands really need to think about.

PAULA: So any case studies or suggestions you have on that side would definitely be very welcome.

PAULA: But even before that, as well, Anil, you told me all fair.

PAULA: Just a really nice, again, I suppose, simple thing about the difference between I think it’s, you know, a fool goes seeking pleasure, seeking happiness.

PAULA: But the wise man seeks to avoid pain.

PAULA: So reducing friction, I think, is the business version of avoiding pain.

PAULA: So I’d love if you explain that concept a bit for listeners.

ANIL: You know, an inordinate amount of time and money has been spent by brands and loyalty professionals trying to create pleasure for their customers.

ANIL: And to my mind, it’s fine.

ANIL: I mean, it’s very good to create pleasure, but not at the cost of ignoring the pain that is there in the customer’s lives.

ANIL: So, you know, between pain and pleasure, human beings will always seek to eliminate pain first.

ANIL: Again, that’s the way we are wired.

ANIL: This wonderful example that I’ve always been taught that you can take the world’s most beautiful woman to a movie theater, but you will not enjoy the movie if you have a bad molar ache.

ANIL: You’re not going to enjoy the movie.

ANIL: However pleasurable the movie is, however pleasurable the companionship is, you’re in pain.

PAULA: Yes.

ANIL: You have to eliminate that pain first.

PAULA: Yes.

ANIL: Organizations and brands need to understand that.

ANIL: When we talk about behavioral loyalty, behavioral loyalty actually has three components to it.

ANIL: One, it requires ubiquity.

ANIL: It just needs to be there.

ANIL: The brand has to be there.

ANIL: The product has to be there.

ANIL: It has to be just available up front.

PAULA: For sure.

ANIL: The reason why you have the grocers on your way home to work is because there is ubiquity.

ANIL: The grocer is just around the corner.

ANIL: The second important is it has to be friction-free.

ANIL: You have to eliminate all kinds of friction when it comes to dealing with your customers.

ANIL: Now, when it comes to eliminating pain and friction, the topmost reaction is, let’s eliminate physical pain, physical friction, right?

ANIL: Let’s make it a physical standpoint, but that’s not how friction works.

ANIL: There are three elements to friction.

ANIL: There is physical friction or physical effort.

ANIL: There is time effort or temporal effort, the time that you need to solve a problem to get your objective.

ANIL: And then there is cognitive effort, right?

ANIL: Cognitive effort is when you put so much pressure on the customer’s working memory that the customer is completely frazzled and therefore does not know how to react.

ANIL: Remember, the human brain can at best keep four to seven things in their working memory.

ANIL: Wow.

ANIL: We just can’t hold that many items.

ANIL: But look at how confusing we make things for our customers in terms of choices, in terms of the amount of information that we present on screen.

ANIL: So this all adds to, or the language in which things are framed.

ANIL: So this is really, again, there’s a very nice experiment that was conducted many years ago at Vanderbilt University, where people were put under an fMRI and they were actually given cognitively difficult tasks to perform and their brain reading was taken.

ANIL: And it’s very interesting.

ANIL: So when you’re actually doing cognitively tough tasks like reading unintelligible contracts or reading things with half information, your brain actually signals to you the same reaction as if I had picked you with a pin.

ANIL: The part of the brain that gets affected is something called the insula.

ANIL: And the insula reacts exactly the same way as if I had inflicted physical pain on you.

ANIL: Now, this is underestimated by organizations.

ANIL: We just do not underestimate the amount of cognitive pain we put our customers through.

ANIL: We focus on making things faster.

ANIL: That’s temporal effort.

ANIL: We focus on making physical effort, but we don’t understand cognitive effort.

ANIL: That’s because we don’t measure cognitive effort.

ANIL: And the only way you can actually measure something like cognitive effort is to use consumer neuroscience.

ANIL: And that’s what we’ve been doing over the last decade.

ANIL: I use consumer neuroscience.

ANIL: When I say neuroscience, people’s eyes glaze over.

ANIL: They think of white coated lab, attendance, FMRI, but that’s not how it works.

ANIL: You have many, many, many methods using consumer neuroscience.

ANIL: We, for example, have done a very interesting case where there is this organization that actually processes visas all across the world.

ANIL: They process visas in 120 different countries.

ANIL: They came to us and said, can you figure out how to eliminate friction in the visa processing journey for a customer who’s from, let’s say, Sub-Saharan Africa to London, for example, from Chad or Beijing to Dubai?

ANIL: So we looked at this globally.

ANIL: And we did the study over 118 countries, 10 million consumers or 10 million travelers in 22 different languages.

ANIL: We ran a consumer neuroscience plus data study on where exactly is the cognitive friction, which part of the customer journey is the friction at the highest, where exactly is the temporal friction or the time friction, where exactly is the physical friction.

ANIL: And we re-engineered the entire process, both on the digital journey as well as the physical journey.

ANIL: And fascinating results, very, very fascinating things that you assumed were friction-free.

ANIL: Suddenly you found out that customers couldn’t understand our visa form was structured in a certain manner.

ANIL: Why was it structured in a certain manner?

ANIL: Because there was no transparency and hence anxiety, hence cognitive effort.

ANIL: So, that’s the second, so friction is the second part of being a transaction loyalty.

ANIL: And the third is usually transaction loyalty has an exit barrier.

ANIL: A bank that you’ve been dealing with for the last two decades, a telecom company who you find it difficult to leave.

ANIL: Now, when loyalty professionals measure data from loyalty, what you’re actually doing is you’re actually measuring data from behavioral transaction loyalty.

ANIL: And you don’t discount exit barrier, you don’t discount friction, you don’t discount ubiquity.

ANIL: And therefore, the very, let’s say, not so right picture of loyalty.

ANIL: So that’s really how friction fits in.

ANIL: And the consumer neuroscience based framework that I was talking to you about was a framework called EASE.

ANIL: Play on the words of EASE, E-A-S-E-A-S.

ANIL: And yeah, so it’s been a pretty interesting, and we’ve done it for financial services, we’ve done it for visas, we’ve done it for manufacturing, we’ve done it for health care, a whole bunch of different things.

PAULA: Yeah.

PAULA: And you broke up there.

PAULA: So I’ll just repeat the name, Anil, for listeners.

PAULA: And of course, we’ll make sure to connect in the show notes as well.

PAULA: But EAS, so the effort assessment score is the framework that you guys have developed really to understand, as you said, that the combination of the physical, cognitive and time effort required in order to, I suppose, achieve success and by implication to achieve loyalty.

PAULA: So I also know that that work was presented by Mr.

PAULA: Don Peppers, who is obviously a world famous speaker on the subject of customer experience.

PAULA: And I think what I’m hearing coming through from you, Anil, is really that loyalty has to be seen through the lens, I suppose, of customer experience.

PAULA: And I’ve briefly touched on that in a couple of shows in the past.

PAULA: I love the insights of neuroscience.

PAULA: I probably glaze over a little bit because I don’t understand it, but I definitely have a passion to understand how neuroscience can be brought into loyalty.

PAULA: And it’s exactly the reason, I suppose, I wanted you on the show today to really bring that opportunity for listeners.

ANIL: Absolutely, like I said, eliminating friction is the two points you made, very important points.

ANIL: One is loyalty and customer experience now are inseparable.

ANIL: You can’t have these little compartments anymore.

ANIL: And the other thing is, eliminating friction is not just a component of customer experience.

ANIL: It’s also a very important component of loyalty, engagement.

ANIL: For example, you take the area that customer loyalty professionals focus the largest, and that’s on customer recognition.

ANIL: Look at the customer recognition journey, which includes onboarding a customer with their welcome kits, their points reward system, the way they are gifted, the way they are rewarded.

ANIL: This is a journey in itself.

ANIL: If this is a high friction journey, I will not be loyal to despite how many points I’ve accumulated or how good is the reward system.

ANIL: Now very, very few loyalty practitioners actually map their loyalty journey and very few and much fewer of them actually look at eliminating friction in that loyalty journey.

ANIL: So eliminating friction is not simply a component of their customer journey, but it’s also a component of the loyalty journey.

PAULA: And in my experience, Anil, again, I’m sure everybody listening is a very well-intentioned professional loyalty practitioner.

PAULA: And certainly the programs I worked on, we would probably have mapped our customer loyalty journey at the outset.

PAULA: So when we first designed the program.

PAULA: But what I do believe really does happen, and I think it’s a really important point you’re mentioning is, you know, three, four, five or 10 years later, how has that customer loyalty journey evolved and, you know, I really think there’s an important opportunity to go back and reassess, you know, how is the design now working?

PAULA: How is the experience of loyalty in its structured format?

PAULA: How is that coming through?

PAULA: So I definitely agree with you.

PAULA: And again, with the best will in the world, I think we’re all so busy.

PAULA: But it’s important to touch on these things, you know, regularly over the loyalty program’s journey.

ANIL: I’ll give you an example.

ANIL: We were working with a very, very large global bank.

ANIL: And they have this loyalty program for their very top end of their customers, the top maybe 5, 7 percent of their customers.

ANIL: Now, you might imagine that these are very important customers who accumulate a lot of points because they’re global travelers and so on and so forth.

ANIL: Now, we found a very interesting thing.

ANIL: The bank had a process where the minute you hit a certain number of points, let’s say 100,000 points, their outbound marketing team would start calling up those customers, wanting to know if those 100,000 points can be converted into a higher graded card or a higher graded product on the bank.

ANIL: Now, this is very irritating.

ANIL: If I had 100,000 points, I know what to do with them.

ANIL: I don’t want to keep calling me.

PAULA: Yeah.

ANIL: Right?

ANIL: This is a very trivial example.

ANIL: But when we were doing this loyalty journey, friction elimination process design, we found a lot of customers were very irritated that the outbound of the bank was calling them to sell a product trading in their own hard earned points.

ANIL: They saw it like the bank trying to cash in on their hard earned loyalty points and make money out of them.

PAULA: Yeah.

ANIL: Look at the implicit thinking and the bias that customers were carrying.

PAULA: Yeah.

ANIL: Whereas this is not having the intention of the bank.

ANIL: Right?

PAULA: Yeah.

PAULA: And the intention again, usually starts in a really good place, but to actually go and talk to the customer and see if that’s what they’re experiencing, particularly if these are VVIP customers and you’re doing damage to the loyal relationship by what you’re saying.

ANIL: Yeah.

ANIL: And this nobody notices because this goes on and on and on.

PAULA: Yeah.

ANIL: And because you process.

PAULA: Yeah.

ANIL: And then when we presented this, the VVIP who was heading the loyalty program, he actually jumped out of his chair.

ANIL: He said, are you sure?

ANIL: We said, this is the top three reasons why customers are here, they don’t want to hear from your marketing team.

ANIL: They don’t want to hear the sales guy trying to push the product on their own loyalty points.

PAULA: Yeah.

PAULA: Yeah.

ANIL: It’s very interesting from that perspective.

PAULA: And actually, I do think as I suppose, external people in general, both you and I, coming into advice companies, sometimes we have the blessing of being able to say things that maybe internal people have been expressing as well in terms of knowing what the issues might be.

PAULA: But yes, I think the validation, doing the research and getting the customer perspective, feeding it back to those kind of senior people, gives it a credibility.

PAULA: It needs to be heard in a very explicit way to make sure that the action is taken.

ANIL: Again, we spoke about friction and its correlation with transactional loyalty and behavioral loyalty.

ANIL: Now, let me flip this a little bit and talk to you a little bit about what are the three things?

ANIL: To my mind, there are three things that are very key for emotional loyalty.

ANIL: Of course, there has to be ubiquity, there has to be a friction-free in your purchase process, etc.

ANIL: But there are three very important things based on the work that we’ve done.

ANIL: One is customer involvement.

ANIL: How aligned is the brand to me?

ANIL: I’ll give a very good example of this.

ANIL: Recently, we all know this example.

ANIL: Burger King, when the pandemic was at its peak in the first wave, actually put out a Twitter where they actually told customers, please go and buy products from other fast food, quick service restaurants, including McDonald’s.

ANIL: Because this is a time when you have to show support to all your brands, just not to Burger King.

ANIL: That was a summer letter.

ANIL: And they ended the letter with, you know, buying a Whopper, which is a Burger King product, is great, but a Big Mac is not so bad either.

ANIL: Ended it.

ANIL: You will not believe the kind of reaction that came in from consumers.

ANIL: There’s a particular consumer comment that stayed in my mind, and the consumer said, I read through that letter, and when I reached the end, I actually had goose pimples.

ANIL: I could not believe that a brand would be so sensitive.

ANIL: Can you imagine the loyalty that Burger King generated at that point in time with that guy?

ANIL: Right?

PAULA: It’s a great example.

ANIL: It is brilliant, and so you have now aligned your interests with the consumer’s interests.

ANIL: You’re both in alignment and therefore in love with each other.

PAULA: Love us.

PAULA: Love us.

ANIL: To me, this is the first and very important component of emotional or attitudinal loyalty.

ANIL: The second component is customer empowerment, and I’m going to touch upon something called decision simplicity, which ties into what we spoke about in terms of eliminating friction.

PAULA: Yeah.

ANIL: Consumers, especially in today’s world, and today with the pandemic and with so much of uncertainty, anxiety and stress, people like things to be simple.

PAULA: Yes.

ANIL: And people like things to be simple, especially when it comes to making decisions, right?

ANIL: So decision simplicity is, the way I define it is the ease with which consumers can get trustworthy information about your product, trustworthy information about your product.

ANIL: And the ease with which therefore they can make a purchase decision that they think isn’t their benefit.

ANIL: Or to their benefit.

ANIL: Yeah.

ANIL: A trustworthy information about your product doesn’t count from you telling the customer what is good about your product.

PAULA: Sure.

ANIL: It comes from friends and family, which goes back to the statistic that I started off with.

PAULA: Yeah.

ANIL: They have 81% of customers, trust recommendations from their family and friends.

ANIL: Because they see that as helping in their decision simplicity journey or decision simplicity framework.

PAULA: Yeah.

ANIL: That is important.

ANIL: So the thing is that if you are going to create decision complexity for your customer, either through your app, or through your website, or through the devices that you present, right?

ANIL: You are never going to generate loyalty, right?

ANIL: So when you look at ease and elimination of friction, one is in the customer experience.

ANIL: We spoke about three areas, in the customer experience, in the loyalty journey itself.

ANIL: And now we’re touching upon the decision simplicity or the decision journey of the customer.

PAULA: Yeah.

ANIL: For those who are academically inclined, McKinsey has a great study on decision journeys.

ANIL: And you should probably delve into that a little bit as to how you can make it simpler for your customers in terms of them arriving at decisions.

ANIL: Now, one of the things, so we are, the last 12 months, we’ve been called in by a whole bunch of global organizations to look at their apps and their digital infrastructure because everybody is going digital.

ANIL: And we are coming in and looking at how decision simplicity can be built in or how friction can be eliminated.

ANIL: And I must tell you, so there are 105 or 110 different biases that human beings either violate or fall in line with.

ANIL: The single largest rule, single most violated rule of behavioral science that I have seen in the last 12 months is something called Higgs law.

ANIL: And Higgs law is the number of choices that you populate the screen with in terms of customers not having to make a choice between different options.

ANIL: So what is choice overload?

ANIL: It is simply astonishing how brands can be so obtuse when it comes to presenting choice to their customers.

ANIL: People do not want to be inundated with a million choices.

ANIL: They want you to present choices that are relevant to their context.

ANIL: So this is one thing that organizations are still grappling with.

ANIL: Again for the academically inclined, there’s a lovely paper by a lady called Sheena Iyengar from I think Harvard or Stanford, but Sheena is a well-known name in choice architecture and the need to reduce choices.

ANIL: Eliminating choices and choice overload, both on your app, on your digital journey, in your physical infrastructure is so very important towards this simplicity.

ANIL: So that was the second part.

ANIL: And the third, of course, is customer recognition, which all loyalty professionals know.

ANIL: Because that’s their wheelhouse.

PAULA: Red and butter, for sure.

ANIL: But that’s only one third of the whole game, right?

ANIL: You’re missing on the other two.

PAULA: Which is why you’re here, Anil, to enlighten us all.

PAULA: So I’ll definitely again make sure that we find those papers, Anil, and link to them for, as you said, the academically minded and just to support what you’ve been saying.

PAULA: Again, just looking at your own website, what I realized I thought was a really nice point you’re making was digital is often being seen as the panacea to solve all of these different or difficult journeys that customers are being expected to go through.

PAULA: But unfortunately, that expectation is not always being realized.

PAULA: And I think the point you made was that a lot of companies are focusing on digitalizing their current processes rather than redesigning them from a digital perspective, which I thought was a very, very clever insight, because that’s what I’ve seen in lots of companies I’ve worked in.

ANIL: Yesterday, I had a meeting with the head of strategy of a media house that publishes the world’s largest fashion magazine, the most iconic fashion magazine, and so on and so forth.

ANIL: So as the discussion was progressing, and we were talking about the whole thing of getting going digital.

ANIL: So the person made a very interesting comment.

ANIL: He said, and this was of course from the media industry, but I think it applies very well to other industries.

ANIL: He said that for the last 30 years, professionals have been working for the print media, and the same professionals are now having to work in the digital media.

ANIL: So they think print, execute in digital.

ANIL: So you have this mindset that’s very physical customer experience oriented, and now you’re testing it into a digital mode.

ANIL: Transition is not that easy.

ANIL: So what most people do is they latch on to technology as the crutch, or the coat hook to hang their digital strategy on.

ANIL: But that’s part of the story.

ANIL: Technology is an enabler, not really something that delivers without the final outcome.

PAULA: Absolutely.

PAULA: And I’ve heard somebody saying, actually, sometimes you just need to bring your children in, for example, so the digital natives and just ask them to design things or help you look at things through their eyes.

PAULA: So I think there’s a lot to be said for that.

ANIL: You know, one of the things that gets lost in the digital world is empathy.

PAULA: Yes, you’re right.

ANIL: But the thing with empathy is it’s very amorphous, right?

ANIL: Everybody thinks they understand empathy.

ANIL: But it’s not that easy to understand.

PAULA: Yeah.

ANIL: So we won’t get to the definitions of empathy.

ANIL: I have views on that.

ANIL: But the interesting thing here is this.

ANIL: That one of the reasons why empathy doesn’t get delivered is because customers feel a sense of loss of control.

ANIL: When we were working with an insurance organization, and we asked them, we asked the people who there was a large bunch of people who didn’t like the digital journey.

ANIL: And we said, why?

ANIL: So it’s a very interesting answer.

ANIL: The answer was, in the physical world, if something goes wrong, I know that I can pick up the phone and get hold of Paula, right?

ANIL: She’s a person called Paula Thomas, who I can track and trace.

ANIL: And if I can scream at and possibly, but there’s an interaction that can happen.

ANIL: In the digital world, I don’t know who to catch hold of.

ANIL: Something goes wrong.

ANIL: Right?

ANIL: It’s a number or it’s a disembodied chat.

PAULA: Yeah.

ANIL: But ideally, that gives me anxiety.

ANIL: That gives me a sense of lack of control.

ANIL: Now, this is a very important insight, especially for the older folks.

PAULA: Totally.

ANIL: Loss of control, lack of capability has a direct correlation to increase of anxiety and therefore anger and therefore dissonance with the brand.

PAULA: And that’s probably why certainly with my consumer hat on, Anil, I’m always so much more comfortable when there is just a little assistant sitting on the sideline, whether or not I access it, knowing that it’s live.

PAULA: And you’re absolutely right.

PAULA: I think that lack of control, there’s an unconscious anxiety there that I’m just like going, oh my God, how’s this going to go?

PAULA: Am I going to waste half a day trying to sort something out and just end up frustrated?

ANIL: We as a species hate losing control.

ANIL: We just don’t like it because again, that’s our primordial wiring.

ANIL: We like things that are predictable, repeatable and we perceive we can influence.

ANIL: We may not be able to influence it, but at least a perception of influence, just vanity.

PAULA: Okay, wonderful.

PAULA: So there was one other big area, Anil, that we talked about before that I want to make sure that we bring for listeners.

PAULA: And that’s the whole topic of communications and the opportunity for different communication strategies and channels to really connect with customers and again, ultimately engage them and ensure they feel loyal towards us.

PAULA: And I know you’ve done an awful lot of work, certainly in one sector, which we’re not saying is going to instantly translate for all listeners.

PAULA: But I thought it was fascinating that you did do a lot of research within the pharma sector about how to communicate effectively for them with doctors.

PAULA: So looking at different things, the different forms of communication.

PAULA: So I’d love you to share that story.

ANIL: Well, you know, in today’s day and age, when you want to influence somebody’s opinion, when you want to influence the way they think or the way they act or the way they behave or buy, you are going to communicate with them in some way.

ANIL: Either email or a SMS or WhatsApp.

ANIL: You’re going to use some channels.

ANIL: So brands are going to spend an enormous amount of money and energy in sending out communication to their target audience.

ANIL: The pharmaceutical industry has been doing this for ages now, because for them, influencing doctors and influencing healthcare practitioners is very important in their choice of products, brands, so on and so forth.

ANIL: But other industries are catching up, and there are industries that are again spending enormous amounts of money.

ANIL: But unfortunately today, it’s all about spray and pray.

ANIL: You send your message out and you pray that it hits the right audience at the right time.

ANIL: This is something that we found is very counterproductive.

ANIL: It doesn’t really work well.

ANIL: So if you look at communication, and again, I look at it from a behavioral perspective, there are two types of communication.

ANIL: One is what we call as prevention focused, and the other is promotion oriented or promotion focused.

ANIL: So promotion focused communication is when I come to you, Paula, and say, hey, this is what you gain by working with me.

ANIL: This is what we’ll make.

ANIL: This is what we will benefit from.

ANIL: That’s promotion.

ANIL: Promotion focuses, hey, Paula, this is what you’ll lose if you don’t work with me.

ANIL: This is what you’ll lose if you don’t cash in your discount by tomorrow morning.

ANIL: So communication is of two types, broadly.

ANIL: I’m summarizing it very broadly.

ANIL: There are a lot of interesting, very academic papers on this.

ANIL: So prevention focused and promotion focused.

ANIL: Now, how do I know whether this communication, what is Paula?

ANIL: So each of us have a certain inclination towards promotion focused messaging or prevention focused messaging and of course, context based.

ANIL: So for example, in the context of money, I could be prevention focused, but in the context of let’s say buying new shoes or fashion, I could be promotion focused.

ANIL: Now, how do I get to understand that context?

PAULA: One.

ANIL: Two, how do I then frame my message to Paula, knowing that when it comes to money, I need to be prevention focused with Paula.

ANIL: But when it comes to selling fashion to her, I can be promotion focused because Paula loves to have the latest shoes in the whole of Dubai.

ANIL: Right.

ANIL: So good communication therefore has got three components to it.

ANIL: One is understanding the context that you’re communicating in.

PAULA: Yeah.

ANIL: Right.

PAULA: Yeah.

ANIL: What is the context that I’m communicating in?

ANIL: Two, is my audience prevention focused or promotion focused for that particular context?

ANIL: And again, we lean on consumer neuroscience and data for those insights.

ANIL: You can’t go on asking people, are you promotion focused or prevention focused?

ANIL: You have to actually discover that.

ANIL: And then how do you like to consume information?

ANIL: What is your attention span?

ANIL: So, for example, I know you love this statistic a lot.

ANIL: The fact that in the year 2000, our attention span collected was around 12 seconds.

ANIL: It went down to eight seconds in the year 2020.

ANIL: And the goldfish has an attention span of 10 seconds, right?

PAULA: I think that’s actually quite terrifying, Anil.

PAULA: If we have less attention available now than a goldfish, I don’t know where to start with that.

PAULA: But anyway, it’s a good point.

ANIL: You know, on an average, the average human being checks their phone 96 times a day.

PAULA: Oh, I’m sure I’m worse even than that, Anil.

PAULA: It’s shocking.

PAULA: Yeah.

PAULA: Yeah, we’re totally obsessed.

ANIL: Therefore, attention span becomes a very important ingredient of communication effectiveness, right?

ANIL: So if I’m going to send you a 10-minute video as opposed to you being some, for example, doctors in our work, we know they have an attention span that’s perhaps a couple of minutes at most.

ANIL: Not because they may be busy, but also because they’ve got to absorb so much of data.

PAULA: Yeah.

ANIL: Their lives depend on absorbing, processing data on a continuous real-time basis.

ANIL: And applying it.

ANIL: So when you’re communicating with an audience like that, you have to figure out what is the mode of communication, what is the medium of communication in terms of time.

ANIL: And am I going to be prevention-focused or promotion-focused in the context of that particular drug, product, molecule for that particular doctor?

ANIL: These components are not seen from that lens.

ANIL: The advertising industry understands this to an extent because they have done some seminal work in that area.

ANIL: But brands that pump consumers with SMSs and reminders and WhatsApp do not understand that this is spending a lot of money with really nothing happening.

PAULA: But I think absolutely.

PAULA: And what I even do, what I found was super fascinating was because there’s so much talk about video and of course, audio, with my own experience, really changing, I suppose, is the key thing.

PAULA: So for me, I’m trying to draw attention to the various forms of communication as a potential differentiator for loyalty, which you made the point, Anil, when we spoke before, that certainly for doctors, that video was seen actually as quite frivolous.

PAULA: So that to me was I hadn’t thought about the potential negatives, apart from the obvious of I have to sit at a computer.

PAULA: But actually the negative association, perhaps for certain audiences, I thought was a really important insight.

ANIL: Absolutely.

ANIL: So for example, for any…

ANIL: And the reason is that your mind gets anchored to certain mediums.

ANIL: For example, when many serious professionals from the scientific community look at content that comes on video, for them in their mind, it’s something that is to be consumed as like popcorn.

ANIL: It has a beautiful value, but it’s good fun to look at.

ANIL: But for serious work, I will go and look at print, I’ll look at text or I’ll look at some other form of content.

PAULA: Grocers and yeah.

ANIL: We found a similar thing with WhatsApp.

ANIL: We found that many customers and so a lot of brands that we work with have now moved their customer support channel to WhatsApp.

PAULA: Yes.

ANIL: It’s not a bad thing, actually.

ANIL: It’s a good thing.

ANIL: But there are many consumers who think that WhatsApp is for friends and family and for recreational communication.

ANIL: They have an inherent barrier when it comes to logging in customer complaints.

ANIL: So one of the largest telecom companies that I think is present in the UAE too, UK-based telecom company that we worked with, they moved their entire billing, customer support onto WhatsApp.

ANIL: A lot of customers are not accessing the WhatsApp channel.

ANIL: And so what did the brand do?

ANIL: They kept pumping advertising dollars and popularizing the WhatsApp channel.

ANIL: They tried to make it more simpler.

ANIL: They put a chat bot, all that.

ANIL: But customers think WhatsApp as a relevant medium of…

ANIL: Not all, but a significant portion didn’t see WhatsApp as a relevant medium for serious compatibility with the brand.

ANIL: Now, you need to change that perception first before you spend advertising dollars and money on trying to create a WhatsApp support channel.

PAULA: Yeah, and it may come to your point earlier, Anil, about the perception of loss of control.

PAULA: I am a fan of WhatsApp, and in most instances, it’s been well executed when I’ve engaged.

PAULA: And my most recent example was literally going to my GP.

PAULA: And when I left, she gave me her WhatsApp number.

PAULA: And because I know it’s a human being, it’s not friends or family, but it’s extremely valuable to me.

PAULA: And I trust it because I know, for example, it’s not a chat bot that doctor is at the other end.

PAULA: So I totally take your point.

PAULA: And I really, again, you know, at the risk of repeating myself, I love the insights on the opportunity for communications as a differentiator.

PAULA: And your experiences on that?

PAULA: I had one final thing I wanted to touch on, Anil.

PAULA: I feel like we could talk for hours today.

PAULA: There’s so much insight that you have.

PAULA: But I know you mentioned to me you do some work with the India Institute of Technology, which I know is the equivalent of MIT.

PAULA: And you’ve contributed a chapter to a book that’s being recently published or about to be published, pardon me, by the School of Happiness.

PAULA: So I’d love to just finish up by understanding that work that you do.

ANIL: All right.

ANIL: So, yeah, so the India Institute of Technology has a school called the Reiki School of Happiness.

ANIL: And they actually focus on…

ANIL: That’s very interesting.

ANIL: There are researchers on how do you create happiness in different facets of our lives, right?

ANIL: And one of them, of course, is customer happiness.

PAULA: Sure.

ANIL: Yeah, so yes, very excited to be looking forward to the book.

ANIL: There’s a bunch of authors from across the globe who have contributed.

ANIL: So my chapter is basically on cognitive dissonance.

ANIL: So I believe, and this is just not on consumer happiness, it’s also on human happiness.

ANIL: I believe that one of the largest sources of unhappiness is when your internal beliefs are not consistent with your external actions or your external beliefs.

ANIL: Yeah, and that’s what we call cognitive dissonance.

ANIL: So unfortunately, cognitive dissonance got boiled down to a very tight set of words called buyer’s remorse, which is horrible because that’s what cognitive dissonance is.

ANIL: Cognitive dissonance, as originated by Leon Festinger decades, decades ago, is a very powerful theory of understanding the human condition.

ANIL: So if I believe, for example, if I believe I’m a very honest, truthful guy, that’s what I strongly believe internally.

ANIL: But I go and bribe somebody in the course of my work.

ANIL: I’m trying to bribe somebody because that’s what my organization wants me to do.

ANIL: This is a completely theoretical example.

ANIL: What happens is that I am going to be unhappy because two opposing values have conflicted, have collided against each other.

ANIL: For example, when a brand says that we care for the environment and we care for carbon footprint, and that’s what they put in their advertising.

ANIL: But all their executives guzzle gallons of fuel, driving SUVs all across the world and flying jets all over the world.

ANIL: That’s an inconsistent kind of two-inconsistent colliding.

ANIL: And that creates influence and that creates unhappiness.

ANIL: So my chapter explores the role that cognitive dissonance has in happiness and therefore experience.

PAULA: Okay, well, listen, I will certainly be dying to see it when it comes out.

PAULA: And in fact, I’ve often talked about that whole thing about integrity.

PAULA: To me, that’s describing integrity.

PAULA: And I think the most important way to achieve customer loyalty is to start from a position of corporate integrity and obviously personal integrity.

PAULA: So no doubt, as I said, we could talk for hours on this topic, Anil.

PAULA: So that’s all of the questions I have from my side.

PAULA: Is there anything else you wanted to touch on before we finish up?

ANIL: No, I think we’ve covered a fair bit.

ANIL: We’ve covered lots of points.

ANIL: And I hope it will be useful for your audience.

PAULA: For sure.

ANIL: I think we’ve done a good job.

PAULA: For sure.

PAULA: Absolutely.

PAULA: It’s really hard to get so many different varied topics, Anil, into one coherent thing.

PAULA: So I’m really grateful to you.

PAULA: So yeah, from my side, as I said, we’ll make sure to link to your profile, obviously, and both Terragni Consulting and, of course, BuyerBrain, so the two companies that you’re director of.

PAULA: We’ll make sure that all of our listeners have access to your various solutions.

PAULA: So with that said, I will literally say Dr.

PAULA: Anil Pillai from Let’s Talk Loyalty.

PAULA: Thank you so much for joining us today.

ANIL: Thank you, Paula.

ANIL: It’s been an absolute pleasure.

ANIL: Thank you so much.

PAULA: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights and research.

PAULA: The Wise Marketeer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.

PAULA: For more information, check out thewisemarketeer.com and loyaltyacademy.org.

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