TCS Digital Software & Solutions: Hyper-personalization, Experiential Marketing, and Authenticity Move Brands from Transactional Loyalty to Emotional Loyalty

Launched in 2014, TCS Digital Software & Solutions is a strategic growth business within Tata Consultancy Services (TCS) – an IT services, consulting, and business solutions organization that has worked alongside large businesses worldwide for the past 50 years. The unit helps businesses navigate critical digital transformations with modular, scalable, and fully integrated industry-tailored licensed software products.
Mark Johnson, CEO of Loyalty360, spoke with Padmashwini Raghunathan, Product Manager for CI&I Retail and TCS Loyalty Management at the Digital Software & Solutions Group, about gaining a deep understanding of customers and their relationship with the brand, the keys to transforming an organization from transactional to emotional loyalty, and building a foundation of customer knowledge.
Tell us a little bit about yourself and your background. What is your current role with CI&I Retail and TCS?

Raghunathan: I’m the Product Manager for TCS Customer Intelligence & Insights™ for retail and loyalty management. I have a passion for innovation and nearly 13 years of experience in providing best-in-class solutions to retailers in the areas of customer engagement, personalization, and loyalty. When earning my MBA, my concentration centered on marketing and operations. I’m a pragmatic problem solver known for enabling quick value realization for customers.
For those who may not know about TCS, could you share more about your organization, the technology and services you offer, and the industries you specialize in?

Raghunathan: Tata Consultancy Services is an IT services, consulting, and business solutions organization that’s partnered with many of the world’s largest businesses in their transformation journeys for over 50 years.

As part of the Tata group, India’s largest multinational business group, TCS has over 613,000 employees in 55 countries. The company generated consolidated revenues of $25.7 billion (U.S.) in its fiscal year ending March 31, 2022. It’s listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India.
Launched in 2014, TCS Digital Software & Solutions is a strategic growth business within TCS that helps customers undergo critical digital transformations with modular, scalable, and fully integrated industry-tailored licensed software and solutions.
The AI-powered analytics solutions help accelerate sustainability journeys and net zero initiatives, as well as improve customer experience and customer lifetime value in retail, banking, financial services, insurance, and manufacturing industries.

Recently TCS released its latest research report, Beyond Transaction: Improving Customer Engagement with Emotional Loyalty. There are three keys to transforming an organization from transactional loyalty to emotional loyalty. Could you tell us about these key drivers and how they set the stage for the report?
Raghunathan: The three keys to transforming an organization from transactional loyalty to emotional loyalty are Hyper-personalization, Experiential Marketing, and Authenticity.

While personalization uses basic customer data such as name, gender, location, transaction history, browsing information, and similar factors to tailor messages, offers, and recommendations that speak to a customer as an individual, hyper-personalized experiences go much further. They leverage analytics, artificial intelligence, and machine-learning capabilities to create detailed customer personas based on multiple attributes including demographic, psychographic, and transactional data collected from shoppers.
Hyper-personalization models customer journeys based on product or persona and links relevant offers and next-best-action recommendations at each step of the customer journey to ensure higher conversion rates and improved customer satisfaction.
The next key is experiential marketing. The best way to demonstrate shared brand values is through experiential customer journeys that are customer-centric and involve direct engagement. By creating participatory, purpose-driven experiences, brands can align themselves with causes supported by their customers and build emotional connections – forming the basis of stronger relationships.
And finally, authenticity rounds out the three keys. A brand’s loyalty programs, including hyper-personalization and experiential marketing, must align with its broader purpose. Based on the brand’s actions, consistency, and commitments, customers know when a brand is authentic. Authenticity creates believability, confidence, and deep bonds with customers through its purpose-driven actions.
The report references Customer Data Platforms (CDPs) and artificial intelligence and machine learning (AI/ML) analytics as required technology features for emotional loyalty. Can you elaborate on how your team defines these technologies and how features of both can impact and enhance emotional loyalty?
Raghunathan: Emotional loyalty is built when there is a marriage of goals, values, and purposes between a customer and a brand based on mutual trust and respect.  
To build this kind of relationship, it is imperative to gain a deep understanding of the customer and their relationship with the brand. Each customer may have a different motivation for the association. The herculean task is to uncover this understanding based on all the cues the customer leaves behind in their interactions and transactions with the brand.
Building emotional loyalty requires two primary capabilities.
First, the ability to understand the single ‘customer’ who is interacting with the brand across multiple channels and devices – and many times not revealing their identity – is necessary. This requires ‘human-centric’ intelligent matching capabilities that a real-time CDP provides. A technology solution should focus on understanding and mapping who the customer is and then stitch together what the customer does where, when, and how.

Secondly, once the who-what-where-when-how is established, it is important to get to the why or to what motivates the customer to behave in the way they did. This is where advanced AI/ML capabilities come into the picture and build a deep analytics profile of the customer, revealing their intrinsic goals and motivations. This information is then used to deliver contextual experiences to customers by marrying the brand’s goals and values to those of the customer. 
How should brands view emotional loyalty if they already have a transactional loyalty program in place? How should, or can, the two work together?

Raghunathan: The most successful loyalty programs combine both transactional and experiential benefits.
Transactional benefits are commonly used to hook a customer and may be the first experience customers have with a brand. Programs can include points, instant discounts, member-only offers, and free shipping. These rational benefits are needed as the customer is in a price-sensitive zone – still comparing the benefits with those of a competitor. They may be ready to switch.
These rational benefits help with repeat purchases and can drive customers to share more data about their preferences. 
With this, brands can start building a foundation of customer knowledge, connecting the dots while understanding customers’ needs, preferences, values, and goals. Brands can then deliver emotional benefits which will help move the customer from a price-sensitive zone to a price-insensitive zone.
For customers at different stages of their relationship with the brand, both these benefits need to work together to achieve loyalty as an outcome.
Emotionally loyal customers are willing to spend more, support and promote a brand, and provide genuine feedback. How do you leverage this support to aid in your customer success strategies?

Raghunathan: Emotionally loyal customers are those who share the brand’s values, and purposes and are willing to go the extra mile to advocate for the brand. 

These customers can be effectively leveraged to spread brand awareness among their social circles and networks. Encouraging these customers to share testimonials serves as an effective tool in customer acquisition and motivating other customers to increase their participation with the brand.

Such customers can also be leveraged to create the ‘community effect’ where like-minded customers share thoughts and beliefs in an environment facilitated by the brand. ‘Expert’ customers educate their communities about the brand’s products, services, and benefits.
What’s one piece of advice you would give a brand looking to build stronger emotional connections with its best customers? Where should brands start? 
Raghunathan: Any brand wanting to build stronger and emotional connections with customers can start wherever they currently are with the most powerful tool in hand – their customer data. Even with transaction data, brands can begin to analyze their customer’s intrinsic needs and motivations. This is the stepping stone to forming deeper connections with customers. A data-driven intelligent loyalty solution can help a brand get there – even if the current amount of gathered data is small.
(Padmashwini Raghunathan, Product Manager for CI&I Retail and TCS Loyalty Management, a Loyalty360 supplier member, contributed valuable insights to 2023 Customer Loyalty Trends and Perspectives: Loyalty360 Research & Reports.)

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