More than ever, consumers are demanding personalized experiences. And brands are looking for solutions to achieve this by better understanding customer preferences and underlying motivations, to create timely, relevant, and individualized messages. This will in turn increase engagement and drive loyalty. However, this is no easy feat, especially at scale.
As an enterprise software solution, this sentiment is core to Formation’s offering. Using advanced machine learning to model customer interests and motivations, Formation helps some of the world’s largest brands create hyper-personalized offers, experiences, and incentives.
Loyalty360 recently spoke with Christian Selchau-Hansen, CEO of
Formation, to learn more about Formation, how they help brands, and his advice for those looking to navigate short and mid-term obstacles to build and maintain customer trust.
Can you tell us a little bit about Formation? What you do? How you do it? What industries you play in?
We’re an enterprise software company. We’re headquartered in the San Francisco area and with our solution, we help our customers by building and strengthening their customer relationships by automating the deployment of individualized offers across digital and physical channels. Typically our focus is with companies who have a known customer base, whether that’s explicitly as part of a loyalty program or they simply have done a good job of matching up their data for their current customers, and then helping them connect those customers to content and offers that matter. And, ultimately, driving and increasing lifetime value.
Can you tell us a little bit about your role in the organization?
I’m one of the co-founders. I’m also a former partner at BCG Digital Ventures and have lived and worked in the Bay Area for about 15 years. My background is in a variety of different software startups, including places like Zenga and Square.
We started Formation about four years ago, and really wanted to leverage advances in AI and machine learning and automation to help big companies connect with their customers on an individual level.
Can you talk to us about a brand that is leveraging your technology in unique ways and seeing positive results?
One of our customers is a major US airline and we help them power individualized offers for all the members in their loyalty program. It ranges across millions of people in the program and is available at all the various touchpoints, whether it’s web, mobile, e-mail, or customer contact center. These offers really help connect all the customers, whether they’re highly engaged, moderately engaged or very lightly engaged, to different products and services that they can engage with as part of the loyalty program, beyond just flying. So, it could be flying, could be credit cards, could be relationships with various partners including hotels, rental cars, shopping, dining, kind of all the different ways the airlines have connected their loyalty program to different things they can do.
Why do you believe should brands be focusing on loyalty strategies during this era of uncertainty?
In just an instant, it felt like we all have changed the way that we live, we work, and we shop, in response to COVID-19. And these changes have created a high level of uncertainty, not just for consumers but also for businesses, and even more, for how businesses can best connect with their customers. We think traditionally about what loyalty has meant. Your best customers are going to be responsible for about 80 percent of your future profits, and really what that means is in this time of uncertainty, these are the customers you should be doubling down on. You should look to deeply understand how their behavior is changing and what they need from you and recognize that has changed as well. Also look at when you can adapt your approaches, your strategies, your tactics and your communications to those changing customer needs, that’s going to ultimately build a much stronger relationship and that’s, particularly, important in today’s environment.
Do you have any advice for brands looking to adapt their strategies?
One way to think about it is to break it down into three different steps. One is to recognize that you must update your understanding of the customer, and what I would say is you focus on not just nearterm needs but the mid-term and thinking of what it means by near-term. If you are shopping, for example, and you work with grocery as one of the verticals, across retail and travel hospitality, as well as restaurant. In a grocery setting, it’s clearly become an even higher level of need. People are going to the store more than ever because their alternatives, going to restaurants, for example, is something that you no longer can do. And, as you move into that phase where you’re also a consumer, very concerned about your own health, and as a business, you’re concerned about the health of your consumers as well as your employees. You need to recognize that the needs have changed, and so in talking with a grocery leader, it’s not about price and selection right now as much as am I safe going into the store? And are you going to have the essentials that I need for myself or for my family, and that becomes the overriding concern. Again, it’s recognizing that shift in need and focusing on how do you help fill that initial need or that near-term need in a time of crisis?
When I say mid-term, what that means is we are undergoing these rapid changes in behavior and it’s important to recognize those but also make sure that you’re creating a good path for the medium-term. That you’re not creating unsustainable behaviors or ones that could be detrimental in the longer-term to the customer experience and to your relationship.
How do you think marketers should navigate the short-term and mid-term while maintaining trust with customers?
In any time of rapid change, you can strengthen the relationship by being on point and understanding those customer needs. As consumers, we’re seeing those cases of both. We’re seeing programmed marketing communications continue to go out the door saying, “Hey. It’s springtime. Buy a bunch of stuff.” That’s not relevant, and if anything, resonates really off-tune to today’s consumer. Whereas, if you’re concerned about getting milk for your family, one of the other things that is important from that grocery point of view is that not to allow you to go in and buy out all of the milk. Recognize that putting in place some recommendations and some education for the consumer saying, “Look. We’re going to continue to get supply. You don’t need to worry about over-supply.” That’s also important, so, generally, the way that we’re talking with our customers, is to think of it a little bit in three phases. The first phase is we need to support our communities, we need to support the employees, we need to support our customers, educating them on how these changes and how they can continue to be safe, like what we’re doing and the actions we’re taking as a business.
Second, is as we move into, ideally, the areas where the curve is not just flattened, but declining. Where we are seeing the beginning of a recovery or the potential for it. To, again, educate on, what does this mean? How should we be safe coming out of the recovery? How should we be safe moving into the next phase?
The third phase that we’re seeing, how do you start bringing back some of those, and enabling some of the, behaviors that we know people will want to engage in, but they may not be sure about how? And that’s really where you have to, as a business opportunity, bring your customers back to rebuild your market share and, if you do it really well, you will capture new share and be able to serve populations in ways you hadn’t been able to do before.
Stay tuned for the second part of this interview through Loyalty360.
To visit Formation's website, click
here.