There are many challenges and opportunities facing loyalty marketers today, whether they involve measuring the efficacy of customer experiences or controlling and managing loyalty programs.
Kelly Crerar, senior vice president of strategy for IC Group, spoke to Loyalty360 about these and many other issues related to customer loyalty during a comprehensive interview.
What are the biggest opportunities/challenges for brands and marketers today? If you could recommend one thing to a client (or prospective client), what would it be?
Crerar: The biggest challenge brands are faced today, in respect to loyalty programs, is controlling and managing redemption liability of rewards. As membership in programs grows and marketing drives engagement and points awarding, claims will start piling up and become a costly aspect of your program. This is a bigger problem for engagement-focused reward programs where there is not a financial transaction for each point earning behavior. Our recommendation is to leverage promotions that drive low-cost points spend. Using products like REGN - IC Group’s always-on, ultra-low-cost and exciting Instant win game engine - should be a staple in every rewards program to manage the cost of redemptions.
What is the biggest challenge that your clients face today in creating measurable experiences to drive customer loyalty? How do you recommend they measure efficacy?
Crerar: The biggest challenge our customers face is the balance between delivering experiences that drive the intended behavior and the cost of those experiences. Our recommendations are to look at cause and effect and always measure this back to the overall “Cost per Credit” or “Cost per Point” model. If you’re able to stay within the ratios created, you will ultimately drive the best experiences while remaining profitable while doing so.
How sophisticated are the customer experience and customer loyalty initiatives of most brands today? From the very nascent stages of considering a program to the ability to assess and integrate an array of complex new technologies that create consistent and seamlessly connected programs, where do brands exist along this spectrum?
Crerar: Most brands today have fairly simple loyalty initiatives. Complexity can scare away the customers in many cases, so simplicity is not necessarily a negative attribute. Marketers for today’s strongest brands evaluate new technologies from a “results” of integration perspective, but it typically takes an IT team’s involvement to truly assess what requirements, configuration changes and, in some cases, security/privacy policies and procedures require a change to integrate.
Many brands have disconnected systems all bolted together over time that does not work harmoniously together; unwinding and replacing those is difficult and, in some cases, not cost effective. Rewriting the playbook on loyalty and rewards is much easier for new brands and integrations via the APIs and partnerships that exist today that didn’t five years ago. Systems are smarter. Automation and AI will play a significant role in improving these for the future.
We continue to hear about brands that are looking to create alignment between their customer loyalty efforts and the brand promise. Should all brands try to become the next “Apple” or “Amazon?” Or is it more realistic and/or beneficial for brands to understand their own unique brand identity, and then define objectives, process, and programs that align with that unique identity?
Crerar: Consumers are too smart and connected today to align with copycat brands who are not being original or aligning to their own brand promise. t is critical to carry the brand promise through every aspect of the business, including their loyalty efforts. Ensuring the promise is a key cornerstone of all loyalty marketing, programs, and processes. It is critical in the first step to driving consumer loyalty.
There is so much focus on customer data and around creating actionable insight now. So how should brands be managing data in a way that is less complex, easier to understand, and more impactful?
Crerar: We all talk-the-talk that data can drive marketing decision making, but the reality is many brands and marketers are not equipped with the tools, analysts, or systems to activate such information. Our role in the loyalty ecosystem is to ensure that member data helps the brands earn a greater share of wallet than non-members and this is only known through actionable data. Using data begins with understanding, having a solid plan that doesn’t just have it coming to you but sets out what to do with the data, what insights you can glean from it and how your action plan from that takes place. Automation and/or pre-developed action plans are critical as data changes by the hour, and decision making that has to wait for a meeting to discuss, can be too slow and quickly become yesterday’s news.
Can you define what the phrase “customer journey” means to you? What does it mean to brands? And how do you see it changing?
Crerar: Customer journey, to IC group, starts typically once the customer is capable of making the buying decision. Many of IC Group’s programs are used to hook the consumer into buying, from there the journey has begun and continues as long as we can keep them. Our goal is always to evaluate the lifetime value of the consumer and work to attain as much of that value for our clients as possible. In many cases, the customer journey is one in which we curate and manage to give the best experience to a customer and keep them buying or engaging.
Can you define Omnichannel/Multi-Channel? What does that mean to you? What does it mean to most brands? How can a brand manage the opportunity? How many brands understand these terms in relation to where they are, what they are doing, and where the market is?
Crerar: Most brands live in a multichannel marketing world. They operate, advertise, and drive consumers from two or more channels. Omnichannel is a holistic thinking where you have integrated your business into multiple sources to be in constant contact with your customers to improve their overall brand experience. For IC Group, we understand that the more points the consumer sees, hears, and can purchase, loyalty grows. Rewards programs that are integrated into the Omnichannel strategy will have the best chance for success.
The difficulty is what value each channel brings to the bottom line and whether there’s enough profit in the channel to support the expense. Measurement is key, understanding the costs of each channel you're integrating, what you’re doing in each channel and ensuring you’re measuring and constantly adapting the channel to ensure profitability.
Just because you’re Omnichannel integrated, this doesn’t make you profitable. It’s a constant set of “dials and levers” you’re working with to ensure they are doing their part in the overall profit ecosystem. We see that today’s marketers are Omnichannel focused, they understand the need for “selling diversification” and how this translates back into customer loyalty and purchase. However, Omnichannel is a team approach, and while the organization may understand the terms and what they are currently doing, the market and Omnichannel options change so frequently today, I’m not sure anyone can be 100 percent knowledgeable about all of the possibilities enough to have a confident reason to change their marketing strategy to take advantage.
What is the single most important thing that you have done (or do) over a period of engagement (say a year) that helps clients increase customer loyalty?
Crerar: The single most important things we do is help brands increase the frequency in how often a consumer spends their hard-earned points. Consumers need to be engaged in a rewards program at the redemption level more frequently than ever. We have developed products and experiences that allow the member to engage and spend their points every day. Since the spending part of the points is fun and exciting, we do our job to ensure this happens more often with great success.
REGN (Rewards Engine) helps deliver this experience at extremely low cost. The payoff is many more touch points and minutes for your brand to be in front of your customer when they are at their happiest moment, spending their hard-earned points. This is part of the loyalty model, the more time the consumer can be with you, the more loyalty they can become.
If you could ask a brand, a customer, or a competitor one question, what would it be? Effectively, if you had a crystal ball and could ask any question, what would it be?
Crerar: I would ask the customer what new Channel/App they will spend all their time on in two to five years. This would allow us to create a strategy to leverage that Channel/App and integrate it into our clients overall multi- or Omnichannel planning to properly budget and develop a strategic execution as it relates to loyalty.
What is the future of customer loyalty?
Crerar: I have a quantum leap-type theory on where Loyalty is going. Customer loyalty is going to go through a massive change where the Customer will stop joining the brand and the brand will have to join to the customer. That's a complex statement, right? Let me explain.
Control is now in the hands of the customer. They can talk, shop, buy, sell and do anything without ever talking to the brand or even showing up at their store. Rewards programs have always had customers “Join” to participate, and loyalty was derived from the fact you were trackable in the Omnichannel strategy. I believe the customer is going to become the rewards program and loyalty will have an entirely new model. If you want me, my money, and my network, you (brand) need to join me and here is what I expect. If the brand doesn't accept my terms, whatever, I won’t buy your products. If you do these things, I will buy your product until you can’t fulfill your part of the deal.
How does your technology address any of the previous questions? How could you see your platform evolving to address them / what does your road map look like?
Crerar: Our technology allows brands to reward their customers for pennies instead of quarters or money. We generate massive savings in redemption costs, and those can be re-allocated back to marketing to drive the front of the business. This is a monumental shift allowing brands to take back control over how they reward customers and how much it costs. Our road map has continuously added experiences to engage every consumer from every demographic allowing all rewards programs to activate their customers and drive costs down. Our goal is “Higher excitement” with “lowest possible cost,” and we are meeting our goals every day.