Customerland
Customerland is a podcast about …. Customers. How to get more of them. How to keep them. What makes them tick. We talk to the experts, the technologies and occasionally, actual people – you know, customers – to find out what they’re all about.So if you’re a CX pro, a loyalty marketer, a brand owner, an agency planner … if you’re a CRM & personalization geek, if you’re a customer service / CSAT / NPS nerd – you finally have a home.
Customerland
Strategic Synergies That Reshape Consumer Engagement
Join us as we sit down with David Slavick to explore the world of partnership innovation in business. In this conversation, we're not just discussing any collaborations; we're taking a closer look at the unique and imaginative partnership between Crocs and Taco Bell, as well as the philanthropic "Blind Loyalty" project led by Amanda Cromhout. We'll uncover why these collaborations click with consumers and discuss the importance of creativity and strategy in making a meaningful impact in today's market.
Understanding loyalty programs can be tricky, but we're here to help make sense of it all. We'll share insights into how to create programs that genuinely connect with customers, from using the latest technology like EMV chips to focusing on personalized experiences. Discover what makes programs from United Airlines and Peet's Coffee stand out, and learn about American Eagle Outfitters' innovative approaches to engaging with the next generation.
At the heart of any enduring business relationship is trust. In this episode, we delve into how trust can transform partner ecosystems. We'll share those pivotal moments when trust leads to innovative breakthroughs and highlight how recognizing each partner's strengths can result in remarkable achievements. Join us for a genuine conversation that promises to be enlightening and inspiring for anyone interested in building lasting alliances.
What's going on in Europe? What's going on in Asia? Where is the innovation coming from? What are companies doing to go and respond to the consumer? What about these inflationary pressures? What new solutions are you building that are part of your overall roadmap that we should be thinking about right now in response to the evolution of how consumers are?
Mike Giambattista:We do have to not name names. I don't want to get sued, I don't want to have my house firebombed, but what's really wrong with it? We've been talking about this for a decade or more. Are those same things wrong with it We've been talking about the whole time. Are we starting to kind of get it now? Are certain companies getting it better than others? Is it really a technology solution? I already know the answer to that.
David Slavick:I'm here with David Slavik, who knows the answers to these things, david, thanks for joining me. Slavik, who knows the answers to these things? David, thanks for joining me. Thank you for this, mike. It's a pleasure to be with you and you know, you said, I can be diplomatic, but I can also be very blunt and honest.
Mike Giambattista:I have known you to be that way.
David Slavick:Yeah, and just provide critique. I mean, if you just sit there and you know blow smoke, it could serve a purpose where oh, thank you very much for the compliment, but they're not going to call you to say so tell me some other great things about what you see and what I'm doing, that I'm doing all the right things. If they're doing all the right things, they don't need to hear it from me.
Mike Giambattista:Right and anyway. That's what LinkedIn is for. Right, that's for giving attaboys, pat on the backs and congratulations.
David Slavick:Sometimes for some people, yeah, Um, or commenting on other things that you know have nothing to do with business, which, uh. But if you, you know, if you have, um, a passion project, or like what Amanda Krumhout is doing with, uh, you know, with her book blind loyalty, and so she published over 100 chapters on various topics and then the proceeds from the book go to actually fund people who need the support to get their eyesight back.
Mike Giambattista:Which is phenomenal.
David Slavick:It's just wonderful. It's just the most wonderful charming thing she could possibly.
Mike Giambattista:She's exactly the person to do that for all kinds of reasons, but I mean, you know she's got that going for us and that's one of the great things. That's happening in loyalty right now has little to do with actual loyalty, you know performance, but, but here's one of the one of the key players doing something that's really special with her talents, from Africa and then and then getting worldwide attention from people and, you know, by myself.
David Slavick:You know, writing a check. I didn't need to buy a book. I, you know, wrote a check and she included me in the book, which was very nice. We've known each other for 20 years and did a chapter on partnerships, collaborations. So when you talk about what's new or where people are actually trying to do things differently, that's one area which is exciting because why there's creativity that's involved, there's planning that needs to be involved, there's a need for a commitment from both companies to deliver on that vision associated with that collaboration. Just recently I was at Shop Talk in Vegas and Crocs, the shoe company, did a collaboration. They didn't use the word partnership. It's now collaborations, by the way, with Taco Bell. So you have customers that love Taco Bell, like their food, love the advertising. It's a fun environment. Actually, you know it's not. You know it's a fun fast food environment. I consider it. And they make shoes and it's got Taco Bell all over the shoes.
Mike Giambattista:So smart.
David Slavick:It's, it's brilliant. And then Croc, you know, is, you know, they're very innovative. And they say to their designers bring us some big ideas, you know, and where. If it started with the designer who loved Taco Bell and said I want to do an ode to Taco Bell, Great, If that was the point of origination, it could have also been from the folks in loyalty at taco bell that are doing brilliant things like pay us $30 and get a free talk and get a taco every day, right?
Mike Giambattista:Well, we're talking about something that is near and dear to both of us, which is partnerships in their various forms. We've had these conversations before, but it seems to me that that's this is the area where the most creativity in loyalty is taking place. There's all those adjacent relationships, things that or maybe some that aren't even quite adjacent, but just things you could associate yourself with. That might bring more value. Associate yourself with that might bring more value, unexpected value to the relationship. And I love the Crocs thing. We saw a Crocs partnership of sorts with the curling people I was just mentioned. They had curling shoes made out of Crocs, which you can't do it. It's a joke, it's a ha-ha, but it got a lot of traction out there. People were, because they just decided to go in a direction that was very unexpected, with some people who that was kind of funny.
David Slavick:Mike, that was a good pun. Yeah, funny. Yeah, traction on the ice Can't do that either.
Mike Giambattista:No, you can't do that either At all.
David Slavick:No matter how good you are were in terms of how people are missing the mark or why they're missing them, and what's being implemented or changed in programs. It's an interesting time right now in the sense that, on the one hand, people are investing in artificial intelligence, leveraging the data in a more optimized way whether it's generative AI, which is text or imagery, or it's machine learning, to empower the data to improve the overall efficiency, effectiveness, triggers, response, response analysis, which then drives the next best action and drives, ultimately, profitability and how people are investing there. But at the same time, you've got program owners or the financial part of the company saying you know what, the program is too generous, let's pull back on the value proposition, and still the customer is going to participate. Still the customer is going to interact, still the customer is going to be an influencer or an advocate, but reducing the overall give and get, ultimately the get. And that can be dangerous because consumers are smart evaluators of what it is that they're getting for their money For their money. So you saw that about 10 years ago even 15 years ago, but at least 10 years ago where companies did like these three step sort of value propositions if there was a co-brand credit card and it's like get 5% back if you're using the card in our store so basically the proprietary model but you're using it exclusively at Best Buy or 3% back if you use it in grocery and the reason why they do grocery is because it's high frequency and then that keeps the card front of wallet, and then 1% back everywhere else and then we'll pulse in other categories with other bonusing along. Then, all of a sudden, the five changed to three and the three changed to two and the one stayed at one, and so we created a mature portfolio of co-brand credit cards, whether it was a Visa co-brand or a MasterCard co-brand or even an Amex or a Discover issuance, but they've pulled back on the overall funding rate in partnership or the company has a proprietary card and they do the same thing.
David Slavick:You see that, like a Target used to have a Visa card and I actually managed that Visa card relationship when they actually put a chip in the Visa card which was pretty innovative way back when and Visa paid to have the point of sale converted to EMV, compliant with a Schlumberger chip, and that was pretty darn cool because then you could go onto your computer and you could download the coupons right onto the chip and insert the card into the reader and you know, your Charmin got 30 percent, you know 30 cents off, and your Tide detergent got 40 cents off, and it was. You didn't have to clip a single coupon, it came right straight off of the slots on the chip. Pretty neat. Then they dumped the Visa card and now today the red card gives you 5%.
David Slavick:Or you go to Whole Foods and you're now owned by Amazon and if you're an Amazon Prime member I think it's still this way you get 10% off on your ticket. Well considering I think it's still this way you get 10% off on your ticket. Well, considering I think it's still 10. Yeah, and so you know, you think about whole paycheck. You get 10% off at Whole Foods and get great quality. That's a pretty neat thing.
David Slavick:So these connections are all important and the consumer is sharing their data, or they know that you're picking up on their information. Or post-purchase, you know you're doing a Medelia survey and you're coming back on the relationship. They're expecting you to show me that. You know me and so where the breakdown is, and you're even seeing it with the different studies that are out there, whether it's Bond putting it out, or Merkle, or Deloitte, kobe, et cetera, accenture the customer's coming back and saying you're not doing enough, you're not showing me that you know me, you're not differentiating the reasons why I should be shopping you and your competition, and it is a share of market game. And where the breakdown is is a lack of innovation, it's a lack of differentiation, it's a lack of exclusivity, and that takes work.
Mike Giambattista:Picture your organization as a solitary island amidst a vast churning sea of opportunities. On the horizon lie other islands, relationships waiting to be built, partnerships waiting to be formed. But between your island and those distant shores stretches a turbulent expanse filled with uncertainty and risk. You're going to need a bridge or bridges plural to span this divide, connecting you to new horizons. Those bridges are strategic partnerships. Yet building bridges and partnerships is no simple task. They both require careful planning, precise engineering and a deep understanding of the terrain. Missteps can lead to collapse, leaving your business stranded on its island. Tectonic builds strategic partnerships, helping organizations navigate the treacherous waters, ensuring that those bridges are strong and resilient and scalable. There's a reason why some of the largest, most progressive companies in the world are retooling their revenue models and investing in partnerships. Find out more at tectonicco. That's T-E-C-T-O-N-I-Q, dot C-O.
Mike Giambattista:The lack of differentiation I think you know, because you operate deeply in the loyalty space. You're probably more aware than almost anybody else out there of the subtle differentiators and the big ones between all these programs. But as a user, consumer, somebody, I'm deep in the loyalty space as well, but not as deep as you are, and I have to tell you that, beyond a certain point, everything looks too gray and complex and fuzzy down there. So am I really really counting points across all my loyalty programs to discern? Am I going to use this one, am I going to use that one?
Mike Giambattista:And you find anecdotally and I think there's data to bear this out is that the complexity hasn't worked? Is that the complexity hasn't worked? I mean, we can fine tune dials all day long for the sake of the issuer or program owner, but from a consumer standpoint it starts to blend together at some point and that differentiation becomes harder and harder to maintain. And you compound that with the fact that consumer expectations are always increasing. You know, category by category. You know what we once expected even let's just call it two years ago has statistically increased to the point where you know a brand needs to understand that status quo is no longer good enough. I mean you wait six months and what is a groundbreaking, successful aspect of a loyalty program is going to start to look and feel. You know the shine's going to come off of it pretty quickly.
David Slavick:It does and the huge challenge I mean this is an indictment of the whole industry we're talking about here. Right, we could all do better and it's incumbent upon consultants like ourselves at Ascendant Loyalty, as well as other consultants out there like Jen McMillan at Incendio that's quite brilliant and love her to death and folks at Concentric like Jody Rauch. We all try to inspire, we all try to lead the client to implement something that everybody can be proud of, the CEO can be proud of, the investors, the Wall Street you know at the analyst level, can say you know, they're really doing it well, they're differentiating themselves and they're showing that they're continuing to evolve and innovate. Because if you do things and only stay within the tried and true and don't keep testing and learning and finding out what's new or how the consumer is evolving over time by having a continuous feedback loop, if you're only listening to yourselves and you're in your little echo chamber, that's problematical and that's the reason why a lot of companies from best practice want community. That's the reason why a lot of companies will aspire to have panels. That's the reason why a company like American Eagle Outfitters when I was there and I assume they're still doing it we would have the wearers and their parent or guardian so they were underage we'd fly them to Pittsburgh and they would tour the company for at least three days and we'd talk to them about what's happening.
David Slavick:What are you talking with your friends about? What is your style? What's your fashion? Where are you innovating as far as the clothes that you're wearing? We're thinking about doing this. What do you think about that? Do you think that your peers would like these colors, these styles, this look? Okay, here's what we're seeing overseas, in Japan, where they're very, very innovative in the clothes that they wear and how they wear it. You know, that's where the camo thing started was in Japan, of all places, right, and so we listened one-on-one and they went from one department to the next, they went from men's to women's, to undergarments, et cetera, and formed the Aerie brand to compete with a pink, and so on.
David Slavick:That's what you need to do. You need to continually listen to your customer at a one-to-one level and continue to get feedback and then continue to innovate over time. So one of the biggest weaknesses that most programs have is set it and forget it. So they spend two years developing the program, from technology to design, to strategy, to operating model, to the business case, to set up all your operating guidelines, your reporting, your analytics and everything else. You'll launch the program. You train the associates. Those associates turn over quite frequently. Do you retrain them? Probably not. Can employees participate in the program so that they're completely intimate with it and they can explain it to the associate? Sometimes yes, sometimes no, because the value that you're providing the associate is already getting a 40% or 50% discount If it's retail, for example. Or you're afraid to include employees as a fraud. Don't be afraid, set up fraud mechanisms and you don't refresh the communication to your customer to explain to them how it works. So to your point. The guideline should be it should be simple, easily understood, easy to play.
David Slavick:A free program to start. Forget about trying to be Amazon and say, oh, we could do a membership program and get incremental revenue. Maybe you don't have enough to offer for it to be a membership program and get incremental revenue. Maybe you don't have enough to offer for it to be a membership program and charge $139. Not everybody can do that and justify it, let alone chase after renewals. So set it and forget it is your biggest problem.
David Slavick:Because what is that second phase of the program. What's that third phase of the program where innovation is coming into play? You launch a program and you say we'll do two tiers. Then eventually we'll revise it because we'll see what the value segments are and we can actually split that second tier and make it a high, high tier. Third, what about a private tier? What about a segment of customers where you purely test and learn and invest incrementally and say, if I really give tremendous value to a certain segment of my population a half of 1% and really do some special things, some really emotional connection and experiences, how would they ultimately respond?
Mike Giambattista:Right. What can you learn from that?
David Slavick:What can you learn from it? How much share can I steal from the competition? That's where the innovation comes from, because you're observing the customer, you're seeing it in real time. You're getting that real-time feedback. So that's sometimes hard because now that's incrementally more that you have to manage. But if you had your choice between doing a paid program and chasing after renewals, let alone providing a value proposition that if you're charging $49.99, you better deliver over $100 in value back, it needs to be 2x of what you're charging, otherwise the consumer smells it out and doesn't bother renewing. Right, and it has to be an obvious.
Mike Giambattista:2X too. Well, I mean, you said that the set and forget it is the biggest problem. It is, and you would. So what's the best solution? Because there are some companies out there that have a continual cycle of innovation. They're always looking at this stuff, but the truth is, in loyalty and so many other realms, those innovators are kind of rare. That's not the norm. So, of the companies that you interact with through Ascendant, who's doing it well and how is it that they're doing it differently? What are they doing? Is it a cultural approach that just means we are always looking at newer, better ways to do things, which is entirely cultural, or are there kind of just program triggers that are probably more simpler to envision and execute?
David Slavick:If the margins are thin, like grocery, you're never going to see any innovation. So just check that one off the box. They'd rather spend the money repaving their parking lot and buying new freezers than spend the money on actual, true innovation in grocery, generally speaking, as an example. It is cultural and it's actually a commitment to listen to the customer. There's no substitute for any of it. And another part of cultural is actually investing in AI. It's true, that's what everybody's talking about. It's what everybody was talking about at Shop Talk, talking about at eTail CRMC coming up May 20th to 22nd. That's their key theme. Devin Wiley is very, very sharp that way, and the rest of the committee that advises them in terms of content and what to focus on and what's key. And so that's adding a pressure for that program owner that now they need to find an analytical partner that can help them. You're not going to add an analytics team that is all of a sudden going to start building these algorithms for you from scratch. It's just too much. You need to outsource and find a good partner, like an Entail that we partnered with, and Mark Crystal as an example. So who's doing it really well?
David Slavick:Believe it or not, I think United Airlines is doing it really well. Everything is associated with personalization. There's a constant contact with me to encourage me to continue to use my United Mileage Plus card. They give me free passes to use the private club when I'm there at O'Hare. It isn't a big leap for me to be loyal to United when I live in Chicago, just like it isn't a big leap for someone that's into SkyMiles and they live in Atlanta. But that's a really good spot, believe it or not, pete's Coffee does a great job. They see that I go and I order direct. I don't walk into a physical store because I don't have a physical store here. There's a physical store in Shirlington, virginia, that I'll go and visit next week when I'm there in DC and I'll buy coffee right from the store and they'll give me a free cup of coffee when I buy a pound. But they're constantly communicating with me and finding out which flavors that I like. Is it a dark roast or a light roast? If it's more dark roast, then the only communication that I get is dark roast and so the more flavorful beans, and they get it. So they do a customization with the email communication and they do a customization with the SMS as well and they do a really nice job of observing how much I buy and what my replenishment rate is, so they don't overwhelm me with my communications. They have figured out the sequencing and the communication. Communications. They have figured out the sequencing and the communication.
David Slavick:A company like American Eagle Outfitters, where I got the program started with the all-access pass in 2004 with a great team, so you had a commitment to product and innovation and expansion and you also had a fabulous store operations culture where the customer was always right and you would always take care of them and have really fast throughput at the cash and wrap and great display and everything else. But they really weren't into digital, even though they needed to. Originally it was all about mom buying for her three kids and she was the one that was shopping for the clothes brought it in, you know, brought it, the kids tried it on or whatever it was, and some got returned, no problem. But as far as they were concerned, the identified customer was a 40-year-old woman. She wasn't wearing your clothes. Maybe a few women were that could fit into the jeans, but mostly it was the kids, right? So we created the all access pass so the 13 year old could be identified. How else did we innovate? We partnered with the credit card company GE Consumer Finance, which is now Synchrony, and they would always come to us with really fun ideas. Like we created a kid's credit card. The mom took out the card, authorized the size of the credit limit and the child, at age 13, had their own credit card that they could walk, got dropped off at the mall, had a $200 credit limit present the card, run the transaction, walk out with the clothes and they could actually pick the skin. That was a graphic T on those cards. It was brilliant. Who's doing that? You just have to continue to work with your partners.
David Slavick:One last thing which I always feel is underutilized is don't think of your technology partners, your analytics partners, your SMS partner, your email service partner. Whether you're using Salesforce Marketing Cloud or Oracle Responsys or Epsilon for email or Attentive for SMS or Cinch, they're there to help you. They're not just there to take direction from you or respond to a particular need. Have a get-together a day, a day and a half. Have them all come to your offices in advance of when you go into your annual planning and say what are you hearing out there?
David Slavick:Who are the best practitioners? What's going on in Europe? What's going on in Asia? Where is the innovation coming from? What are companies doing to go and respond to the consumer? What about these inflationary pressures? What new solutions are you building that are part of your overall roadmap that we should be thinking about right now in response to the evolution of how consumers are? So bring all of your partners to your offices, host them, delight them, treat them, and they will come to that meeting with great ideas that can certainly kick your loyalty program, your CRM efforts, your one-to-one customer centricity efforts to a whole new level.
Mike Giambattista:So, um, boiling this down, I'm going to attempt to the so you've, you've named three big items here, which, which are each, you know, their own, separate, significantly sized consulting engagements just to unpack them. But, but, categorically, there's a problem with companies who, uh, the tendency, a strong tendency, is to set it and forget it. I got the program, we've hit the switch, we're good to go and go on to something else, Right?
David Slavick:Or assume that you know the financial model is just going to work and you'll deliver on the business proposition, when the fact of the matter is, there's always unevenness and you're not observing the differences in performance and then reacting to those differences in performance Because you've got other pressures or God forbid they cut your staff in half, and so now you're just trying to stay one step ahead and you can't do the extra stuff, right.
Mike Giambattista:The other thing you mentioned, which is closely related to that but a little different, is a culture of innovation. To look over the next hilltop, what's on the horizon that you know, that may not quite be so evident in the marketplace you're operating in. To look outside of that. And then, thirdly, to bring into and listen to your partners as sources for those inspirations.
David Slavick:Yes, and don't think that the partners are trying to sell you something Like. Don't be afraid that if they come in and they bring you value, that they're trying to sell you something. They want it to be appreciated, they want it to be your partner, they want it to deliver value to you, they want to lift overall satisfaction and, naturally, they want a renewal at the end of the three-year contract for another three years. At American Eagle, I signed a contract with Briarley. We stayed with them as our platform for 17 years. It was a long time but they earned it.
David Slavick:Right Now, you know, tearing a technology out and putting a new one in when you've got other priorities and that's like your sixth one, like you know, is Briarley still doing great work for us? Well, they were. So we kept them, you know, with us for a long long time. It's a beautiful thing, right? Companies like Kobe have clients, you know, for many, many years, for all the right reasons. They've been with AMC theaters Since the beginning and AMC loves them with the Stubbs program and they're doing outstanding work for them. So there's loyalty there. But you know, in in many cases, um you, you keep the partner at bay because somehow or another they're going to you know. Change your way of thinking.
Mike Giambattista:Try and sell me something, yeah.
David Slavick:Sell you something or cause you to not be as uh as objective about things. Don't be afraid.
Mike Giambattista:I mean I have. I have conversations with people all the time about their partnerships, building out their partner ecosystems and trying to set up mutual value exchanges between our partners ecosystems, and trying to set up mutual value exchanges between our partners, and it seems to me like the light bulbs tend to go off when they recognized that both parties have already crossed the trust threshold. It's the hardest thing to do and then you kind of forget about oh, I sold them this thing so, or they sold me this thing and let's just, you know, make it a linear thing, but but the relationships can have all kinds of legs to them and go in all kinds of directions if you want to do that.
David Slavick:Yeah. People understand their swim length, they, they, they understand what, you know where their core is and they're not trying to steal a piece of business from somebody. I mean, if you brought an Epsilon into the same meeting as a Salesforce and both of them have ESP services and one's doing loyalty and the other one is doing the ESP off of the old exact target, it's not like you know Epsilon's thinking, oh, or Salesforce is worried that you know Epsilon's going to.
David Slavick:You know spoil the pool and steal the business. It doesn't work that way, or it shouldn't. Well, yeah it may in some cases, but you're right.
Mike Giambattista:I mean you have to assume trust Once you've crossed that threshold, assume the trust is there and leverage it. You know, if they trust you, they know you and that's the-.
David Slavick:Yeah, if you're the client, like me, you walk into the meeting with brass knuckles and say, no, everybody, play nice, but we're going to really have some great results and everybody's going to be able to celebrate this. And, by the way, it opens things up as to how they can work optimally together.
Mike Giambattista:Even outside of the core conversation. Yeah, completely agree, all kinds of opportunities there. Yeah, yeah, completely agree, all kinds of opportunities there. So I'm going to do your schedule and my schedule mostly your schedule of favor, and say we've covered a lot of ground already today. There's certainly enough here to be continuing. You know people, my listeners and readers forgive me for saying this, uh are just like me, have a short attention span. So, um, you know, with all due respect, I'll defer to uh, to everyone's schedules and say thank you, david, for this time. The, the conversations uh between David and I end up being a lot of fun. They're always energizing, always informative. Uh, david, if you can't tell, is uh, is uh, uh, a known quantity in the loyalty space, knows his stuff really, really well, is trusted by dozens and dozens of companies to bring good advice, their way and guidance and ideas. And, uh, I'm honored that we get to do this once in a while.
