Capillary Technologies using AI for Real Incremental Value of Loyalty

AneeshReddy2.jpgFor Aneesh Reddy, today’s customer loyalty and engagement is very much like comparing the days when we all drove without the use of Google maps as our co-pilot.
Reddy, the co-founder and CEO at India-based Capillary Technologies that helps global firms enhance their consumer experiences, recalls when a simple drive to another town often required someone with a map in hand next to you, calling out left and right turns as you maneuvered to your final destination.

Then came along Google with its sophisticated mapping that gave drivers faster and more up-to-date driving data to get there faster and more efficiently.

“The loyalty world today has been very similar to that,” Reddy says. “Brands have someone sitting on the side at an agency telling you it will take three days for the data to come back to tell you what you should do next.”

Advanced AI and Machine Learning
With the augment of advanced AI and machine learning, Reddy and Capillary Technologies say that turn-by-turn direction should come much faster, if not instantaneously.

“We’ve been doing some of those experiments, and we’re calling it a ‘nudge framework,” he says. “How do you nudge your user or the CRM manager, and we think it will be like Google maps where decision making will be through AI.”

Founded in 2008, Capillary has been at the forefront of the constant evolution in consumer experiences when Reddy started the company with Ajay Modani and Krishna Mehra to help consumer brands capture customer data, identify consumers visiting their stores, and to communicate effectively with them.

Since then, they have partnered in Asia with brands such as Starbucks, Shell, Walmart, 7-Eleven, Levi’s, and Tata, among others. Their platforms are in use by over 400 brands with more than 600 million end consumers who have made more than $200 billion in loyalty sales.

“We probably have amongst the richest data sets on loyalty globally with the 600 million consumers,” Reddy says. “And with $200 billion in loyalty sales, we have a very interesting model around what drives incrementality.”

What Occurs Between Customer Purchases
Aside from the incredible sales growth that Capillary Technologies’ clients have racked up, Reddy and his team are focused more important than that: what occurs between customer purchases. He says today’s customers are way beyond transactions, so what happens between two transactions is more important for consumers than what a brand is doing for them during an actual purchase.

“We really need to understand consumers a lot better,” Reddy says. “It really moves from doing something when I’m transacting with you to also doing something when I’m engaging with you.”

Engaging with customers every month or every quarter— even if it is not a transaction —can help lead to ‘top of mind’ recall from a consumer standpoint. The goal that Capillary Technologies works on with its clients is delivering a very personalized experience to that consumer that can drive convenience for them.

Real Incremental Value of Loyalty
Reddy says for many years, most loyalty programs have been a ‘me too’ type program, where brands see competitors launch the program and they will also launch one. Instead, Capillary Technologies works with clients to figure out what is the real incremental value of loyalty and then works to increase it with its engagement programs.

“You can really look at incrementality over next year or two and see if that’s really changed behavior in the consumer,” he says. “We call that ‘value delivery’ as what’s the real value delivery from loyalty. That’s been very useful in moving businesses to invest more on the loyalty side because finally, you’re able to say, ‘here are the actual incremental sales that loyalty is able to deliver for you,’ not campaigns or not some feel-good factor.”

Reddy says much like paper roadmaps compared to Google maps, information and data are getting faster to discern than ever before.

“I think a lot of the current agency model in the loyalty world will die because we have done this behavior a long loop of analysts and people churning data,” he says. “Now, with AI and machine learning, that’s a few clicks away.”

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