ICF Next Executives Discuss Personalized Customer Loyalty 

Personalization remains a top priority for all brands. The goal of delivering personalized experiences is alive and well. Thanks in large part to significant developments in technology, brands have the power to meet this goal. Still, brands must harness a few different capabilities to achieve it. These include machine learning, data, and analytics, among other things.  
  
Recently, we chatted with two representatives from ICF Next: Andrew Kelly, Partner, Sales and Marketing; and Ken Seaton, Partner, Client Solutions. We heard their thoughts on personalization and the future of retail. They offered numerous insights that our brand representatives should find useful.    
 
What is the biggest challenge you are seeing in the market today?   
 
Andrew Kelly: Brands are facing a whole host of challenges these days. One that comes to mind and that we have seen surface quite a bit of late is addressing personalization. How do brands deliver that at scale across what can be a very non-linear customer experience in an effective way? Personalization isn’t new, but delivering it in a complex, evolving digital ecosystem at the customer level consistently throughout different parts of the journey requires a significant amount of preparation and knowledge in both analytics and digital experience platforms.  
 
How are you responding to this challenge?  
 
Andrew Kelly: Personalization is one element of what brands are trying to achieve these days. Successful personalization should be coupled with relevance, value, even utility in some cases, for it to resonate meaningfully with the consumer. An important aspect of that is understanding and analyzing the customer data available, assessing and mapping out what is achievable, what is possible in the customer experience in terms of personalization and what those expectations and outcomes are, KPIs, etc. That must be the starting point from which you build out.   
 
What is the future of retail? 
 
Andrew Kelly: The future of retail is uncertain. What we are seeing, however, is the continued blurring of lines between online and offline, the irrelevance of channels, supported by an increasingly complex digital ecosystem, powered by data and accelerated through advancements in supply chain technology and the commoditization of certain benefits or services. Leveraging a partner with the right expertise that can help retailers navigate these challenges and changes—one that not only consults on technology, analytics, strategy, design, and experience but also helps deliver and execute those initiatives—in a diagnostic, holistic, and future-facing way is an excellent place to start.   
 
Ken Seaton: The future of retail is changing at warp speed and, not surprisingly, many in retail are struggling to keep up, much less get ahead. In our view, we see three key areas that are driving the future of retail:   
  

  1. Consumer empowerment. Today’s consumer is radically different than those of the past, and they have much more power and control. Retailers who can’t align their brand with the personal brand of the consumer will have a difficult time swaying them into their retail channels. Retailers that can connect with consumers through relevance, timeliness, and highly targeted messaging—at an emotional level—will win often. Ultimately, the brand of the retailer is no longer dictated by the retailer. It’s dictated by the consumer. Retailers who view the customer experience holistically and are organized around the customer will fare better now and in the future. Another aspect of this is the power of referrals and recommendations from friends and social networks. Experiences, posts, shares, comments, and likes all serve as an emotional currency that carries cultural capital and clout across networks, and the retailers that are capturing the hearts and imaginations of consumers who participate with brands in these ways will cash in on their advocacy.   
  
  1. Customer experience. As stated above, understanding the customer experience and the journey they take from awareness through purchase and beyond is critical. This expands the purview of marketing beyond the CMO and forces the convergence of numerous functional areas within a retail organization. From HR, hiring, and training to technology, store operations, and merchandising. These functions all have an impact on the customer experience and will influence the journey. Organizations that can align around their customers will succeed while retailers who remain organized around business functions and the corresponding siloes will continue to struggle. Ultimately, retailers are selling an experience. How the consumer feels about that experience with the brand will impact their loyalty (and that of their networks).    
 
  1. Employee engagement. This area is often overlooked by retailers who are competing for talent in a tight job market. The further pressures of high turnover, and the looming threat of an increased minimum wage (and the cost implications) worry retailers, and their shareholders. Employees are often the greatest ongoing cost of a retailer, and struggling retailers refrain from increasing that cost—without looking at the long-term implications of having a highly engaged and empowered work force. When it comes to the experience in retail locations, a well-trained, empowered, and engaged employee can have a profound impact on the customer experience. Training for empathy, compassion, and understanding is difficult. But an employee who can relate to consumers on their terms and understand their needs will benefit a retailer greatly. When was the last time you heard a Starbuck’s or Trader Joe’s employee tell a customer “No, we don’t do that” or “Sorry, we can’t”? The odds are, probably not very often, if at all.   
  
Facebook’s Libra—what are your thoughts?  
 
Andrew Kelly: It’s the early days for Libra, expected to rollout in 2020. It’s a common misconception that Libra is Facebook’s wholly owned cryptocurrency. The Libra Association is actually a not-for-profit backed by founding members like Mastercard, Visa, PayPal, Uber, Mercy Corps, Facebook, and others. Facebook is creating a digital wallet for Libra through its Calibra subsidiary, through which consumers can transact and buy goods and services. The goal is to create a global currency to empower people around the world who don’t have access to traditional banks built on a software ledger. It’s too early to predict its adoption and subsequent impact, but digital or mobile payment applications are becoming a very important part of the loyalty program partner ecosystem. At the end of the day, integrating with payment applications helps to deliver more frictionless experiences for members, and offering different payment methods is an increasingly fundamental piece of that experience.   
 
How are you advising on data privacy and security standards?  
 
Andrew Kelly: As concerns around data privacy and security standards continue to foment consumer protection, they are impacting marketers in a significant way. In fact, we’ve already seen this with the roll out of GDPR last year in the EU, which resulted in marketers losing a substantial percentage of marketing data that didn’t meet GDPR requirements. Frankly, data protection is a good thing for both consumers and marketers. There is a lot of negative sentiment from consumers on behalf of brands that are collecting their data but who aren’t utilizing it, in some cases in very basic ways. Brands need to not only be responsible with their customers’ data, but also earn the trust of their consumers while demonstrating that they are giving something valuable in return for it. We talk about this is in our research. Loyalty is a two-way street; you’ve got to earn it.   
 
Ken Seaton: A comprehensive data strategy begins with viewing data on a continuum from data that will put a consumer at little to no risk to data that has the potential to put the consumer at a great risk. Our view is that retailers often have a great deal of data that falls on the lower end of the continuum. Things like transaction activity, level of engagement or interaction, annual spend, browsing history and channel, for example. Fewer transactions lean towards the other end of the spectrum. Things like payment method, payment/account numbers, SSN, passwords, etc. Overlaying data privacy requirements and standards established by governing bodies can then be used to ensure we are adhering to (or exceeding) those requirements.   
  
The key is getting the data, which requires retailers to build trusted relationships with consumers. Are you a credible brand that does the right thing by customers? Has there been unethical incidents in the past? (Think Wells Fargo and the fines they received for unethically opening accounts for customers without their knowledge, for example). If consumers recognize that the data they provide will be used to benefit them, and that data collected is grounded in what a consumer will like versus what the retailer would like, then the chances of capturing usable data that can enrich the customer experience increases. Amazon is a good example—suggestive selling that shows the customer’s purchase history and recommends accordingly.  
  
If we approach a broad data strategy in the same vein, we will comply with data standards while viewing the data strategy as a way to better serve the consumer. Surely data standards and regulations will continue to evolve. But retailers who put the customer at the center of their data strategy will be well positioned to benefit.  
 
 
 

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