Speaker 0 (0s): 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 for loyalty specialists around the world.
With so many changing consumer expectations over the last year, I was delighted to take part in the recent Epsilon Personalive event, alongside loyalty experts, Prabhu Cannon, Amy Lanzi, and Michelle Proctor.
I joined a session to discuss loyalty across the customer journey on my first “Let’s Talk Loyalty Live Podcast”, sharing how to create the best loyalty strategy for your organization’s goals.
Please enjoy this one-off bonus episode of Let’s Talk Loyalty in partnership with my friends at Epsilon.
Speaker 1 (1m 6s): My name is Prabhu Cannan and I lead Epsilon’s Loyalty business. I’ve been at the intersection of marketing and technology for over 20 years now. And I must say that winning customer loyalty has been never been more complicated or important as it is today. 50% of loyal customers who switch the brand. If it is required or acquiring additional 5% of new customers would assemble your loyal customers can have significant impact positive impact on your profitability.
As a result, loyalty is more than a program today. It’s no longer confined to loyalty marketing teams. Every moment across the customer journey with a brand is an opportunity to win their loyalty. And that’s what we’re going to discuss today. Before I welcome the three panelists, the three things that I want to highlight today are understanding customers is key creating a culture of loyalty across the organization and using loyalty mechanism as a mechanism to acquire new customers is paramount.
Please welcome to discuss these, Paula Thomas Host of Let’s Talk Loyalty, Michelle Procter, Managing Director of FedEx Services and Amy Lanzi commerce channel strategy lead producers group
Paula, take it away.
Speaker 0 (2m 32s): Wonderful. Thanks Prabhu. So, yes, I’m delighted to be here today. I’ve had plenty of Epsilon executives on my show. So it’s an honor to be back with you today on yours. So I’m going to start off with the definition of loyalty. So I think when we think about loyalty, particularly with marketing audience, we often think about our approach to customer retention, but I really like to think of it in a broader context. So the dictionary actually defines as a strong feeling of support or allegiance.
So that’s the kind of mindset that I really think is important for loyalty practitioners and marketeers. So I’m going to start with Michelle. I’m going to ask you to tell us how do you nurture customer loyalty for Fedex customers?
Speaker 2 (3m 18s): Yeah, it’s a great question. And really for us at FedEx, it all starts with our purple promise, which is this idea that we will make every customer experience outstanding. That goes from our frontline couriers to the team members that you interact with at a FedEx office location. So it’s all about making sure that loyalty goes beyond just our defined loyalty program, which is called my FedEx rewards. So it’s really about meeting those expectations of our brand to deliver a customer experience that our customers desire. So we want to make sure we’re exceeding our customer’s expectations and, and by doing that, we need to make sure that everyone is thinking about loyalty on those terms.
So within our organization, we really try to think about how to stretch and evolve my FedEx rewards to drive additional value for our members. We want them to know that we value them and their business and that they are important to us and we’re here to serve them and help them grow their business and be successful. So it’s, it’s really loyalty extends well beyond just the team that manages the loyalty program.
Speaker 0 (4m 18s): Wow. I love that, Michelle. I think that’s absolutely critical. One of my own guests actually described it as almost like the founder’s mindset. So I think if every member of a company like FedEx has that kind of intention to be loyal and have those extraordinary customer experiences, then I think customers really feel it. So they feel it in the indirect ways and the direct way. So, so fantastic to hear how you’re cultivating that. So I think the whole experience, obviously for loyalty does start with acquiring our customers in the first place.
So Amy, I know you have an extraordinary and career just dealing with lots of different clients, both in retail and in consumer goods. So can you tell us, what are you seeing in terms of acquisition focused marketing campaigns in order to start that loyalty journey?
Speaker 2 (5m 4s): Sure. Well, first thanks. It’s great to be here today. It’s, you know, it’s a fascinating times in terms of how we think about loyalty and a little bit of this overarching experience that is required to really acquire and retain customers. So when we first think about, and I think about through, through the lens of commerce, we’re all about our acquire consumers by mining for signals. So we can quickly move them from intent to purchase, or sometimes it’s from intent to whatever the next best action as we want them to take. And as we think about our ability to acquire shoppers or consumers, consumers shop much faster than we think that they do.
So, yeah, we very careful about that first experience so that we’re giving them the best experience the first time, and then enabling ourselves to be able to build loyalty with them. And it’s, it’s such an interesting space for many of our brands today, because many of our are sold through what we’ll call rented channels channels in which you don’t own that experience. So think about a brand that might be sold on Amazon or inside of the Walmart ecosystem or brands that are playing with social commerce. So these are places where it’s easier to acquire a consumer, but you can’t keep them.
You can’t retain them. So this is where they’re, these are recruiting grounds. So we can start to understand how we can deliver some sort of value there with them and move from that transactional loyalty into this more emotional loyalty. So our brands are now enabling or able to really serve consumers. So moving out of just selling the products into brands of service, and that’s really how we can future-proof our brands and be able to really build long-term loyalty. So for categories like toys, for example, we have a toy client and the job to be done is using content and experiences to make parents feel like they are going to be better parents in their path to parenthood.
That’s a great example of moving out of just buying the next toy and more into empowering parents through this purchase. And of course, creating this relationship that they’re able to become better parents. And of course, feel better about that brand that they’re choosing to bring into their, their household and how they’re engaging with it. As an example,
Speaker 0 (7m 14s): That’s lovely, Amy. Yes. We talk a lot actually in the world of loyalty about the transition, I think from transactional loyalty, really into the emotional loyalty space. So I can hear that coming through when you talk about brands being of service. So Michelle, is that something that you’re seeing coming through in your own experience with FedEx?
Speaker 2 (7m 31s): Oh, absolutely. And I think loyalty goes well beyond acquisition and retention. I would throw optimization in there as well. For consideration. It’s often hard to quantify the value that a loyalty program can bring in hard numbers. So setting that optimization goal is really for us, it’s about those stretch goals. So taking in data, and you’re going to hear us talk about data a lot today. I’m sure you guys already talked about data a lot, but data that we see we can create different offers for our members that we know are definitively a stretch goal for them.
And so that helps us when they attain that and they, they, they redeem and they attain that goal helps us to show the demonstrable value that we can tie that activity directly back to that stretch goal. So when we think about position, don’t forget about optimization and retention as well. Obviously people lean towards acquisition and retention, but optimization is against that as well.
Speaker 0 (8m 25s): Yeah, I like that. It sounds like that X customers are pretty competitive.
Speaker 2 (8m 29s): Are they? They can be for sure. Absolutely.
Speaker 0 (8m 33s): Wow. But you’re absolutely right. I think the commercial objective that we have the imperative is actually to drive mutually beneficial behavior. So love to hear those stretch goals coming through and with that kind of context as well, Michelle, I guess, and the last year a lot has changed all of our behavior. I think as consumers and as businesses have changed dramatically. So I know you’ve with FedEx actually quite a long time. I think I saw 27 years on your LinkedIn, which I think is extraordinary. And so that was amazing as context, but specifically then in the last year with the pandemic and hopefully post pandemic world, how has creating loyalty changed over the past year in your view?
Speaker 2 (9m 12s): That’s a great question. And you know, for us, we really doubled down with our focus on small businesses. I mean, small businesses are the lifeblood of the American economy and they needed all the help they could get at that time. So when the pandemic hit, we all know that small businesses were really struggling to figure out what to do. It was a very dramatic and quick time and quick turns where things were shutting down, people didn’t know what was happening next and they needed to act quickly to survive. So, you know, we were one of the many corporations that we actually gave away COVID grants to help small businesses survive.
But in addition, we really focused and pivoted our loyalty program to help those small businesses that might have had just a brick and mortar location or two or three to create an online presence for themselves or, or maybe their challenge was growing during an existing online presence to make sure they could ship to additional locations or that they could ship even internationally. We had people ask us about how to handle returns and we had things that were suddenly when everyone needed signage, you know, they needed to have place markers that said, Hey, we’re open for business or here contact us this way.
When people were doing curbside, they need to have signs that said curbside pickup, one curbside pickup, two or markers on the floor that said, stay in here so that it could show the socially distance ways that they were operating the business and guidance with CDC guidance there. So we’re lucky that we had set X office in our operating companies to help them print those types of signage and vantage and even the floor spacing markers to help them operate effectively during the pandemic. And especially with so much uncertainty going on, but we also know a thing or two about supply chains, and we were able to help a lot of small businesses when they had questions about how to properly pack items and, and shipped them.
Maybe it was something that was perishable and they never shipped it before because people came into their store and picked it up. And so there was a lot of questions about even local moves. How do I get something from one part of town to another part of town? Can you guys handle that for me? So every business had a very unique need and we were really pivoting and adapting to make sure that information and assistance was available to them and easily accessible to help them grow and defend their business during that time.
Speaker 0 (11m 22s): Wow. That’s extraordinary Michelle, because I can absolutely say, you know, as a small business myself, that’s when you know who your partners are, the ones that show up and are loyal to you when you absolutely need them. So yes, I think we had a collective gasp, I think, you know, across the marketing world, obviously within the pandemic kit. And I do think bigger companies have plenty of resources internally, but small businesses do not. So congratulate you on that extraordinary way to drive loyalty. And then Amy, from your perspective, what would you be saying that you have seen over the past year?
Speaker 2 (11m 52s): Sure. I, I just have to reiterate what you said in terms of so grateful that FedEx has done such a great job with small business. Talk about creating, becoming a brand of service, proving out what we’re talking about here and really, you know, enabling small businesses to be able to, you know, pivot from a brick and mortar world into 24 7, 365. So I just love all the work that you’ve done. So thank you. Okay. So I’m going to give you my perspective through the lens of our consumers and some of the different behaviors we saw during the pandemic and what it means for loyalty.
And really this was a major recruitment moment for new digital buyers because consumers or somewhat forced to try digital commerce for the first time, or to continue in terms of how they were engaging through digital commerce, whether it’s, you know, curbside pickup or delivered to home, whatever ways they modes they wanted to shop, it was definitely happening. And in fact, 55% of shoppers purchase from a new retailer during the pandemic, which to me is amazing. And 75 then of our shoppers purchased a product from a brand that they hadn’t purchased from previously.
So although it was an amazing recruitment moment for digital commerce, it was also a huge problem in terms of loyalty, because if you didn’t have the experience in place, if you had an out-of-stock situation, you suddenly had a high level of switching and that of course puts you at risk for losing your most loyal consumers. So for us, it was a really interesting time in a balance of how we are sharing that we have the digital commerce experiences in place and we’re managing supply chain and all the different things there, but then also how we’re using it to assure we’re defending our territory and the fact that we didn’t have those things in place.
So there’s this balance of, you know, some consumers have become disloyal and how are we either bringing in the back and now as we go forward, how are we thinking more and more about maintaining those new consumers, that it might’ve tried our brands for the first time? We all. Yeah. So we also saw a really interesting movement into subscription loyalty. So knowing that so many, I’ll give you a really good example. One of our clients is blue apron, where there was this whole in-home cooking became such a huge deal for many, and this is a subscription available that was available pre COVID, but now has really flourished in this because it’s been able to first fit the need of our consumers at home, and second, really be able to use the data that they have about those consumers to really make sure that they’re providing with them, which makes the most sense in terms of utility.
So that’s been an interesting sort of new route to consumer as well as service mechanism that we’ve seen that we’re forecasting will continue to be really important for our brands. As they’re trying to, as we’ve talked about on this Le merge, the world of experience, loyalty and plumbers, you think? Yeah. So then, and as we think about brands and, you know, going back up and, you know, opening back up and, you know, getting back to whatever we call as the new is again, thinking about following the shopper and where they’re going in terms of omni-channel.
So are we going to see, and we’re forecasting, there will be a continued use of digital commerce channels because it saves time and that’s, that’s sort of a new way for consumers to be shopping. But we also need to be thinking about to the lens of service, how we’re enabling the online and offline connection. There’s still work to be done there and how you’re using the fact that someone is starting a shop with a digital experience. What are the things you can do in terms of a chat bot or an in platform social messaging, to be able to enhance that service component so that you are either keeping those new ones that you’ve recruited, or you are getting you’re using innovation kits to get new consumers into your brand franchise.
So a couple of interesting points here in terms of a ton of innovation in this space, which I think is super exciting is your retailers and our brands using AR. So for example, with Kohl’s during the, during COVID, we were able to play with the new snap virtual closet experience through augmented reality. So we knew everyone wanted athleisure, but we knew they couldn’t necessarily go to the stores. This is a way to be able to shop a virtual closet using staff. Also, similarly, one of our brands, the only Sally Hansen, there was a new, they had a new nail product.
And of course, again, hard to, you know, play with that and in a place where you might typically go to a drug store. So with snap, we partnered with them so that you could do a virtual try-on of this new nail color so that you could actually buy it two clicks. And then even in other great retail example, as one of our clients fora in terms of how they’re using, trying on virtual trials and beauty products, to be able to make sure you’re buying the right thing. And of course make your most valuable consumers to you, even more loyal because you’re helping, you’re helping them make the right decisions at the point of purchase.
Speaker 0 (16m 43s): Wow. I wish we had a couple of hours to go through all of that. Amy there’s there, there’s an awful lot to discuss the one I will pick up particularly as subscription, because I do think there’s an incredible move towards that in lots of different sectors. And I think in some cases, for example, I know Panera bread, for example, would use AM’s subscription for coffee and it then becomes a prepayment. So it’s also contactless. So I think we’re driving loyalty in new ways as well. Fantastic. To hear all of your clients taking the opportunity to be innovative at a time when it’s, you know, it’s really important and valued.
So, and the third area wants to just touch on, was creating personalization across the customer journey. And Michelle, we’ll come back to you first on this one, if you don’t mind, how do you create personalization really for FedEx customers across the whole journey?
Speaker 2 (17m 31s): Sure. Well, you know, it’s a lot about the data of course, and having the right content and the right offer at the right time to the right consumer, to the right small business. So for us, some of the things we learned during the pandemic was really paying attention to your redemption strategies. So we grew our offerings and really tried to focus on personalization within redemptions specifically. So we added elements to our offerings that allowed our members to redeem based on their needs or interest or what they needed at a time. And it was really interesting because we saw four kind of key behaviors start to come through.
So they redeemed obviously for themselves, we all do, you know, I guilt it treats yes that we’ve earned, but we also started to see them if they’re a small business redeemed to invest in their team members. So they may have just had, you know, folks that stayed with them during the pandemic that they maybe didn’t pay as much, or maybe they took a pay cut or they came in to help them. And so they did a lot of redemption to reward their team members with gift cards or other types of things that really were important to them and really reinvesting in those team members that have been with them through it.
The third behavior we saw was they started to reinvest in their business. So they were looking for equipment and special offers or discounts or other types of things to help their small business grow and stay competitive. And so we started to see a lot of redemption behavior in that. And then the last one was around causes that matter to them. So sustainability, those types of things, other charities. And we started to see a lot of folks wanting to do carbon offset to be carbon neutral. So we started to see some redemption behavior that was really kind of unique. And it was really important that we give those options to our members so that they could redeem what was important to them at that point in time.
And it could have been any or all of these at where they were in their life cycle, but it was really interesting to see that it was really relevant to them in that moment and that we were able to help them meet those needs.
Speaker 0 (19m 24s): I love that Michelle, because I remember worrying at the beginning of the pandemic, that things like sustainability made surfer and, you know, in the middle of everything else. So thank you for making it an ethical and sustainable and personal. So thank you for that, Michelle, and over to you, Amy, just on this point, how do you create personalization then for your clients across their customer journeys?
Speaker 2 (19m 43s): Yes. I love, I love this question because it is the big question in terms of virtualization across the consumer journey. And you know, the one thing that we always think about is the importance of having an identity solution to be able to do this. We don’t have the data. It’s impossible to really do it at scale. In fact, we did some research that says about three to 4% of consumer journeys actually overlap. So yeah, so we, you know, when tiny and when we think about things, you know, we, we like to think that everyone’s sort of pays similarly in some things like if you’re going to buy milk on the way home, or you’re stepping out to get something that you might need, even on some of those more routine missions, we’re still seeing a significant difference in terms of the types of touch points and the steps that consumers go through.
So the only real way to be able to deliver personalization at scale across the consumer journey is if you have a strong identity solution and you have a great handle on this consumer and how they specifically behave, you can look for signals to then determine, like, what is the right personalized content? Is it something that is a, you know, an impulse purchase or is it something that is a high considered purchase? So the, you need more storytelling and you need more opportunities to really, again, be a brand of service so that you are giving consumers the right things and the right types of information for them to buy.
It’s a magical subsystems and stories in order to really be able to do this at scale and then ultimately be able to create loyalty. So that again, you’re moving them out of that rented place that they might be buying your brand. And they’re actually now wanting to engage with you as a brand directly from your own channels.
Speaker 0 (21m 24s): Wonderful. Amy. Yeah. Great expertise coming through there. Thank you so much for all of that.
Speaker 2 (21m 30s): Yes. Well, speaking of, I think we get to ask you a few questions and you’re incredible. So you have interviewed over a hundred brand marketers on your podcast and will you share some of the key trends you’ve seen over the past year when it comes to loyalty? What are you, what are your different brand partners telling you?
Speaker 0 (21m 48s): Thanks, Jamie. Yeah, it’s a great question actually for me, actually, the most extraordinary thing that has struck me in fact is the real shift of the mindset because when I started in loyalty marketing Amy, and really, it was obviously a very commercial business and my sole objective was to change customer behavior. And obviously that is, as we said earlier, that’s a really important commercial imperative, but I think what has happened and, you know, particularly, I think accentuated in the last 12 months, there’s, there’s a real importance to first of all, show up and be loyal to your customers.
As we’ve heard with FedEx, those will be paired with all of your clients. So I think that’s probably the most dramatic thing that struck me actually. So there was a statistic quoted that 73% of customers think that the purpose of the loyalty program is so that the brands can be loyal to them. Whereas actually, if you talk to an audience like this, we believe it’s for them to be loyal to us. So I think there’s a fundamental difference. So in terms of trends, that’s the single most important thing that more and more brands and there’s research coming out now, which is saying actually, how loyal is this brand being to me and therefore, will I be loyal to them?
So that’s probably the single most important thing. And a second one, I like to talk about a lot. Amy is as simplification. And I think, you know, we’ve probably even been illustrated in this short webinar, you know, how complex loyalty can be at customer journeys and this entire experience. So how can we simplify that so that the customer doesn’t get confused? I think there’s a real risk of cognitive overload and overwhelm. So it’s really important. And my most listened to show it really shocked me because it was on literally the subject of simplification.
So every research report that I hear coming out says it’s really important to be simple. So another really big trend that again, we could talk an awful lot about.
Speaker 2 (23m 41s): I love that. I love the idea of changing through the lens of commerce, talk about how the consumers and shoppers are more in control. And that is very much in line with this idea of making it, you know, we want consumers to be loyal to us really as brands and modern brands, we really want to be able to, you know, recruit those in so that, that they feel like we are on their side if you will. So I think that’s really interesting and it goes along with the simplicity of things, right? How simple naked, how much easier we make consumers live their lives, which is the goal.
I think of all of us, but like those from that simplistic planning. So on that point of connecting with consumers, and as we think about all the different chants became the complexity, all the different channels and media, we’re having the opportunity to engage with. Can you talk about what you have seen in terms of podcasts and what you, you know, the key learnings you have there
Speaker 0 (24m 36s): For sure. Amy and I started my podcast coming up to two years ago and I think I started it because I realized I had more questions than answers. And again, to the point about complexity, I thought, well, what better way to talk to extraordinary marketeers and discuss a subject that I’m super passionate about? I think what I underestimated was the extraordinary, I suppose, positioning and the incredible amount of trust that I seem to have earned literally by showing up with the intention of adding value every single week and was challenging.
We all know content is challenging. We all have busy jobs, but there is an inherent piece. I think that podcasting brings just the human authenticity and the power of human voice and people that I meet who have listened to my podcast. They almost behave as my friends. And rather than just people like who are strangers, they’re listening to my show. I don’t know them at all, but there is something about the human voice where I might be in the car with somebody I might be at home in the kitchen with them. So it’s a passive form of communication and genuinely, I think it’s the most effective marketing I have ever done for myself.
And I probably wouldn’t even be here with you today, if it wasn’t for that podcast and the power of voice,
Speaker 2 (25m 46s): It’s, it’s amazing. I, I love the everything you’re saying and it rings so true for me. I’m a huge podcast fan and I do feel like I’m best friends with some of my favorite people to listen to because I brought them into my home or into my ear on my run. So I think it go Jodi huge space to play. So my last question for you is what do you think are the three things every brand needs to do to future-proof through loyalty? What are those places that you must play?
Speaker 0 (26m 13s): Okay. Okay. I think the first, most important thing for me is when you capture data, please use it for the purpose that I have supplied it. And I have often said that if you’ve asked for my date of birth so that you can segment me in personalized to me, then please remember on my birthday to actually wish me a happy birthday. So I think it is, you know, don’t just gap, capture data for, for the sake of it. You really do use it for the purpose it’s applied. I think, I think about community. I think that’s really important.
Customers are craving connection at this particular time. So by, you know, creating a loyalty program, there’s almost immediately a sense of commonality. So can we create a community with our loyalty program? I think that’s a huge, big opportunity to be playing in and finally to the point about podcasting. And I know you’re a thought of voice search as well, so I would absolutely be thinking about your audio strategy and what can you do to connect with customers using the power of your voice.
Speaker 2 (27m 10s): Fantastic. Thank you so much, especially the replace search. Great.
Speaker 1 (27m 16s): Thank you, Paula and Amy and Michelle great conversation. I don’t think I have written down so much in my, in the last few years and I’ve got a ton of notes and I want to kind of for viewers summarize the, you know, a few of those points, I think Amy, you talked about identity knowing your customers. And that’s a great point. You know, you know, FedEx is a classic example, not only knowing your customers, but doing what is relevant for them at that time that they needed you. So that’s great points there around knowing customers and being loyal to them first before asking them to be loyal to you.
That’s great. Second point, you know, make every experience outstanding, find your own purple promise, so to speak, right? So you know how to make it relevant and important in every engagement that you’re having with your customers is an important one. I love the fact that there is stretch goals that you’re talking about optimization is a dimension that actually, you know, stretches ourselves. That’s great. The third point I want to leave you with is essentially don’t provide a sampling moment for another brand for your customers.
And I think that’s a great point that I, Amy made in terms of really retention is getting your experiences right at the right moment, right. For the right customers, you know, what they need, right. So that’s key as well. Right? So I think it’s, it’s important, a great set of conversation. I took a ton of notes and thank you very much for sharing all your experiences here. Thank you very much.
Speaker 0 (28m 54s): This show is sponsored by the wise market here. The world’s most popular source of loyalty, marketing news insights and research. The Ys 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. For more information, check out the wise market, tier.com and loyalty academy.org.
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