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Loyalty Program Marketing in the Digital Era
50 Plays5 years ago
Who doesn't want to keep their loyal customers? After all, it's cheaper to retain business than it is to close earn new customers. That's why this week, we're talking about loyalty program marketing with Sean Duclaux, Vice President of Product Management and Marketing for iSeatz, a loyalty tech company that enables travel and lifestyle bookings with point bank integrations.
During this episode, Sean tells us:
- How loyalty marketing programs have evolved
- About the importance of customer experience when it comes to loyalty marketing
- More about membership and participation trends when it comes to member rewards programs
- Where most companies fail when it comes to executing customer loyalty programs
- Out of the box thinking for loyalty programs
- And how B2B marketers can use loyalty marketing
Want to connect with Sean online?
Catch him on LinkedIn at linkedin.com/in/seanduclaux.
Or connect with iSeatz:
Website - iSeatz.com
LinkedIn - @iSeatz
Twitter - @iSeatzcom
Facebook - @Iseatz
—
About The B2B Mix Show:
The B2B Mix Show with Alanna Jackson and Stacy Jackson is brought to you by Jackson Marketing. Need help with your B2B online presence? Let’s talk!
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Transcript
Introduction to B2B Mix Show
00:00:00
Speaker
Welcome to the B2B Mix Show with Elena and Stacey. In each episode, we'll bring you ideas that you can implement in your sales and marketing strategy. We'll share what we know along with advice from industry experts who will join us on the show. Are you ready to mix it up? Let's get started.
00:00:19
Speaker
Hi, everyone. I'm Stacey Jackson. And I'm Elena Jackson. We are the co-founders of Jackson Marketing. And in case you still haven't heard, we are also sisters. Stacey, what's the topic of today's episode?
Exploring Customer Loyalty Programs
00:00:33
Speaker
Today we are talking about customer loyalty programs and loyalty marketing. And Elena, have you ever had a credit card or belonged to any kind of club where you've racked up points to earn something?
00:00:48
Speaker
a prize or reward? I have and sometimes I'm very dissatisfied with all the points I have and the options I get.
00:00:58
Speaker
Right. It's sometimes a little disheartening to know that you can spend so much money to earn such a small reward. But today's guest works with a company that has tried to take customer loyalty programs and those point banks to a new level that combines practicality and still
00:01:21
Speaker
offers those luxury perks to the people who want to earn them and receive
Interview with Shawn DeCloe from iSeats
00:01:27
Speaker
them. Elena, why don't you tell us a little bit about today's guest? Shawn DeCloe is an accomplished, growth-focused technology industry executive with 20-plus years of proven success of enterprise software and innovation. As vice president of product management and marketing for iSeats, the worldwide leader in loyalty technology,
00:01:48
Speaker
Sean balances strategic vision with the execution excellence enabling travel and lifestyle bookings with point bank integrations for global, hotel, financial service, and airline brands. Prior to ICEDS, Sean held diverse roles in startup ventures and technology mainstays. As a senior executive, he is known for his strong technology skills, market sensing ability, and agile project management discipline.
00:02:14
Speaker
Sean earned his MBA from the University of Houston, a Master of Science in Computer Science from the University of New Orleans, and a Bachelor of Science in Computer Science from Springhill College. When Sean is not collaborating with customers to drive technology innovation, he enjoys being on the water throughout the Gulf Coast. He is a rugby veteran following the NOLA Gold Rugby and enjoys quality time with his wife and two dollars. Sean, welcome to the B2B mix show.
00:02:44
Speaker
Hey, thank you so much. Good morning to y'all. I'm sorry. I've got a little scratchy voice. I'm getting sick. And so I apologize for that. No, no worries. I just hope it's not the Corona virus. I'm good. So Sean, before we get into the nitty gritty about customer loyalty programs, would you give us a little more insight into what ICES does and what you do there?
00:03:09
Speaker
Sure, no. We're the best known secret, powering some of the largest global loyalty programs. And I say that because we were founded in 1999, right? So we are far from a startup. We are based out of New Orleans, which is known certainly for lifestyle and travel as a destination, but not really a software company. Although the city is beginning to bring a lot of technology
00:03:37
Speaker
solutions and a lot of startups. But we're far from that, again, based on our 20 plus years of being in business. Where we're focused is really leading travel commerce and ancillary merchandising technology. So that's where it really fits into loyalty tech and enabling travel and lifestyle bookings.
00:03:55
Speaker
Our key markets are travel, financial services, hospitality brands. So if you think about customers like American Express and their loyalty program, iSeats actually powers their loyalty program. And the key to that loyalty program is really point bank integration, right? Because everyone in loyalty programs want to be able to earn rewards and then gain rewards
Evolution and Experience in Loyalty Programs
00:04:20
Speaker
as well. Right. So
00:04:22
Speaker
having all of that experience, you're one of the best people we could talk to about loyalty programs. So let's go ahead and dig into some of that. And maybe you can tell us like over the years, how have loyalty programs evolved? And do you have some background you can share with us about it? And a lot of the brands are still using them, but not all of them, especially in the B2B world, are there consumers joining and participating when they are using them?
00:04:49
Speaker
It's interesting if you look back into the 1980s and that's really where some of the loyalty program started and it was really around cash back. So trying to put cash back into the consumers or the card holders wallet and that was kind of the popular program and the card holder benefit there.
00:05:10
Speaker
But really, when you take a step back and the loyalty executives look at that, their goal was to drive more spend of that card holder and the particular card. Not the results, though, were not really loyal and they really struggled to push cars to the top of the wallet. So again, I wouldn't say it was a failed effort, but it certainly has evolved to today.
00:05:35
Speaker
And if we focus just on the financial services side as a contrast, travel rewards cards and you're looking at even co-branded cards, you know, a Delta American Express, if it were, you know, they are trying to build genuine, meaningful connections with their card holders. So again,
00:05:54
Speaker
As an example or a use case going back to one of our key customers, American Express, their car has become the most synonymous with travelers and their travel rewards platform because they are allowed to directly book flights, hotels, cars, and activities, and even some experiences from that platform. And so that's a good evolution, if you were to look at that from
00:06:22
Speaker
give cash back to now building in more of a direct connection with that card holder or the consumer. I think where they go in the future, so if you're looking a little bit further out, is the drive today is really around experiential marketing. So customers are looking for
00:06:41
Speaker
the surprising stimulating experience. And that was really called out by a course chief marketing officer, Steven Taylor. And I think having two daughters, as you refer to, it's, it's certainly in, I hear it all the time. It's an Instagrammable moment. And that's really what Steven Taylor looks for. And those folks, the card holders, the travel, the travelers are looking for those Instagrammable moments and how do.
00:07:09
Speaker
the programs connect with the consumer. So as an example, American Express connected to offer or they partnered with Coachella. And that's a very exclusive cardholder reward. And what they saw as a direct result, 36% of new signups into the program were along over amongst millennials. So being able to drive to
00:07:36
Speaker
a lower, different demographic than you would actually think through that Instagrammable Coachella moment. So interesting developments, of course.
00:07:46
Speaker
And when you think about millennials, like you were saying, they are big with the Instagram and wanting to share all of their experiences, like everything that they are doing, and they're sharing those on Instagram.
Engagement Strategies in Loyalty Programs
00:07:58
Speaker
So that is a key thing about, like what you said, creating those Instagrammable moments. Right, exactly. Much to the demise of a father of two daughters, too. FOMO will keep you in business.
00:08:15
Speaker
All right, Sean, from what we've learned about loyalty marketing and memberships, we did a little digging and McKinsey and company reports that membership in loyalty programs has increased in recent years, but they've also noticed that participation has slipped. What are your thoughts on why that has declined as far as participation goes? Yeah. So I think it's a, it's a great observation. And while participate, while the, the membership has risen,
00:08:45
Speaker
right? Not, you know, depending on who you look for for a statistic, some will quote, you know, numbers as 64% report increases of membership, which is positive. But it's really not just a sign up, it's the engagement. And that's really where you'll see a lot of the programs begin to fall down. And I think that's why some of the the membership has increased. But participation is because the organizations still look at this
00:09:15
Speaker
from a transactional nature. So a customer, a card holder, a loyalty member wants to earn points and then redeem points. And if you look at that from a transactional nature, I don't think it really captures the essence of what it could be. So it needs to mean something to be a loyalty member.
00:09:39
Speaker
Right? And it's creating that meaning at every engagement point within the program. So again, not to belabor the point of the Instagram mobile moment, but if you're able to earn points or redeem points on a vacation.
00:09:55
Speaker
or use your points to buy a concert or perhaps it's food delivery on Valentine's at home because you're trying to create that romantic moment and wow you're going to pay for that with perhaps reward points. Then the member uniquely remembers the connection
00:10:18
Speaker
The connection brings the brand and then the brand is top of mind when they think about that experience and the time that they had, right? So I'm not certainly going to be the one to order food for my white-thorn valentines, but you get the concept. It's capturing that moment or that concert, but connecting it to the brand as well. And that's where folks are struggling to change the business and then change the mindset.
00:10:45
Speaker
Right. So it comes down to kind of like that customer experience, which is a big hot topic these days. And, you know, I look at some of the rewards cards that I have. It's been granted that's not a B2B thing, but, you know, I'll go and I'll look at my, Oh yeah, I've got 50,000 points. What can I get? Oh, yay. I can get a bag. You know, it's like, that's not a good customer experience for me. And so I think that like you were saying, that's where a lot of them miss that mark. So what role
00:11:12
Speaker
Do you feel like customer experience plays in improving a company loyalty so interested in my role at i see i'm responsible not only for product management marketing so the strategic aspect but also for the customer experience in the user interaction.
00:11:28
Speaker
And so I think looking at one of our other customers, International Hotel Group, IHG, they're one of their vice presidents used this quote when he told this to me. And it's really around, I think it's the essence of customer experience. Speaking from his point of view, the more that IHG can serve the needs in a one stop for their customers, the more they are building a loyal proposition that's harder to unwind.
00:11:58
Speaker
Right? So if you think about that, it's the approach is adding value to that loyalty program members, every interaction, right? So in this case with IHG, it is bringing that brand to the forefront of their mind when they engage as a member, but it's the right message at the right time in the right location.
Data Privacy and its Impact on Loyalty Programs
00:12:24
Speaker
So if you think about as an example, if you're going to go to a concert,
00:12:28
Speaker
or a football game, or it's a sports activity. A great one would be the Super Bowl right now. In Miami, when you're purchasing, are you going to purchase a ticket for that event first? Or are you going to say, let me buy a flight in a hotel to Miami, and then I'll worry about the ticket to the Super Bowl? The studies that we have done for an experience like a ticketed event
00:12:56
Speaker
The behavior is very much, let me buy the ticket to the event and I will fill in around that program, you know, with flights and hotels. But if it's for a different type of activity, you know, I'm going to go on vacation with my family. I'm certainly going to book my flights and my hotels.
00:13:18
Speaker
And then closer to the day of the activity of the trip, will you look for an attraction, a general admission tour, or a ticket? So that's key to being the right message at the right time. The second part of that, it has to be easy. And whether you are in a desktop environment, a tablet environment, or a mobile phone,
00:13:46
Speaker
We have statistics that around food delivery, people are doing it from or ordering food from their laptop or from their phone, not from a tablet. So if you think about that, if I'm delivering a message that's not in a responsive framework and it's distorted at any one of those three communication channels, you're just, it's not going to be frictionless and it's going to prove to be a poor customer experience. And I think that third one is really personalization.
00:14:14
Speaker
We are in a time where we collect a tremendous amount of data about our customers and being able to leverage that to provide and serve up those experiences those messages in at the right time.
00:14:31
Speaker
at the right location and with the right message. So as an example, what, Alana, what's your favorite cuisine? Pizza. Well, great. Well, if I'm going to serve up, hey, Alana, today, wouldn't you like to go eat a vegetarian meal? A new restaurant just opened up around the corner. It's not
00:14:53
Speaker
aligned with your preference. It's not going to speak to me. So really it's looking at that personalization with the data that we've collected. But if it's 1130 on a Thursday like it is today, then perhaps serving up a pizza message.
00:15:10
Speaker
do you would spray you into action and then again being allow you to order that on your desktop or on your phone and delivery to back to the office so it's really about all encompassing that customer the inclusiveness of what defines a customer experience.
00:15:26
Speaker
As far as personal experiences go and making the experience online custom to that user who's coming back to engage with you, how does the recent announcement by Google about third party cookies being going away or even GDPR where you can't track certain things about customers, how does that impact personalization?
00:15:47
Speaker
It impacts personalization, certainly, but that is really a cognizant decision around the way a customer wants to be treated.
00:16:03
Speaker
So with GDPR or the California Protection Act CCPA, as a customer or as a cardholder, I am asking you as the provider to not track that information. So it certainly makes it more difficult. But what's more hazardous to a loyalty program is if you're not complying with PCI DSS with protecting credit card information
00:16:33
Speaker
You mentioned GDPR and CCPA around the personalized data. And even around system and organizational controls, SOC 1, 2, and 3 for compliance around process and controls governance. If you were, as an organization, unfortunately to be hacked and that data is stolen, 64% of consumers say they are unlikely to do business
00:17:02
Speaker
with that company ever again. So if you think about... That's painful. The question is real, right? The pain is real. Is signing up for a loyalty program as a consumer even worth the risk of that personal exposure with data breaches, right? And so I would put that back on the consumer if they want those types of messages. The companies who are sponsoring the loyalty programs
00:17:29
Speaker
certainly have to understand the tremendous consequences and the tremendous risk that they have to manage and adhere to. So if you look at a company like iSeats, we've been in business since 1999.
Innovative Loyalty Program Strategies
00:17:44
Speaker
We process over $3 billion of annual bookings and over 150 billion loyalty points a year.
00:17:52
Speaker
So security, compliance, the confidentiality is something that we as a company hold very dear and take very, very seriously. Hey folks, let's take a break to hear about today's sponsor. And we are back.
00:18:12
Speaker
What would you say or tell someone about out of the box ways that companies should begin thinking about loyalty programs? Cause I think a lot of them just kind of don't know what to do, where to begin and things like that. So what are some of those out of the box things that you could share with them? Yeah. So I think most, if you look at the, the travel brands, hotels and airlines as an example, they all have a sense of a, of a loyalty program.
00:18:40
Speaker
But what we find when we look and work with our partners and our customers is that they are traditionally individually managed by even different parts of a company or different business development managers. So what happens there? There are individual programs with different terms, different benefits, certainly driven by bespoke technologies.
00:19:07
Speaker
And that leads to, again, what we talked about earlier today is a disjointed customer experience. So number one, being able to look holistically at the loyalty programs in your partnerships to unify those. Because again, if it's an experiences vendor, an airline vendor, and a restaurant reservation vendor,
00:19:31
Speaker
being able to unify that into a single loyalty program, customer experience is really where I would start. The second thing to look at is promotion. And we talk about that, you know, the adage, if you've heard it is you can't succeed if you're screaming in the closet, right? Well, you need to be able to not only attract new members,
00:19:56
Speaker
New members, as we talked about earlier, they're growing. That's not the problem. But it's making sure that those members are engaged loyalty program members. And if you think about it was another study that I've referred to as done by McKinsey. Only 13% of customers are brand loyalists who won't shop around.
00:20:18
Speaker
Right. So that is a tremendous number who say they're low. It's low. Look on the other side of that is the engagement factor. And you know, we talked about it today. How many loyalty programs do you belong to today? Like a lot of them. But it's that of that 87% of people who say they aren't brand loyalists, about 30% stuck with the incumbent brand.
00:20:46
Speaker
So again, that's again, 70% of that already very large number, where are they going? They're going to the competition. So being able to find- Yeah, they're going to somebody who's going to meet their needs. Yeah. Exactly. And if it's an easy switching cost, and I could do it today because there's a better benefit, and maybe I want to have a dozen different loyalty reward program members, and I can pick and choose which one,
00:21:14
Speaker
But that's not serving the needs of the loyalty program for collecting, for finding new members as well as engaging them. And I think the third one is really looking at the rewards or the why. So we've talked about a frictionless customer experience. We've talked about the ability to enable earning points as well as redeeming points.
00:21:40
Speaker
But, and like you had said earlier, you had 500 war points. Great. What can you do with those? It's probably not enough to get you a free room or certainly not a free flight. So what happens to those? They just sit and they stagnate, but we need to be able to find additional opportunities for low point balances. And so if you think about looking for what we call micro burn opportunities,
00:22:07
Speaker
So can you order that pizza and use your points? Is 500 points enough to get a pizza? Maybe it's a slice of pizza. But again, it's better for that engagement.
00:22:21
Speaker
you are a happier customer or loyalty program member because you're using your points. And again, you're engaging with that brand at a low point balance. Yeah. And I'll more likely come back. If you've given me something at that low point place, I'll be like, Oh, what, what am I going to get if I go even higher? Exactly. And I seats is when we look at experiences is the first first vendor
00:22:48
Speaker
that in the loyalty technology space to offer point redemption for experiences through our partner Viator. So if you could take again that low point balance and there's a walking tour, maybe you want to go see the Hollywood stars and you want to get that tour for a low point balance. That's a fantastic opportunity to be able to use that.
00:23:14
Speaker
Now, if you want to, if you have more points, perhaps you want to take a helicopter flight through the Grand Canyon, right? But maybe you want to earn up to those. And again, I think the last one to call out is something that again, we look, we look for innovation in the market and iSeats is the first vendor to innovate loyalty reward programs with food delivery.
00:23:43
Speaker
with our partners DoorDash and Grubhub. So being able to earn points if you order food in or redeem your points to pay for that is certainly something that's interested for the low point member.
Leveraging Loyalty in B2B Contexts
00:23:58
Speaker
as well as an earning opportunity or perhaps you want to have a steak dinner delivered to you. You know so I think the ability when you think about out of the box looking at how do you unify around a common rewards program structure and that could be terms as well as technology and customer experience. Don't scream in the closet so don't just focus on
00:24:25
Speaker
I have 64% new members, but I also am engaged with them. And then think about some unique and differentiating rewards. So redeeming points for experiences or perhaps off-property engagement for food delivery. So a couple of different ways to think about innovations around that. So Sean, a lot of our listeners work in B2B marketing, and I know customer loyalty people have in mind
00:24:54
Speaker
that B2C experience, how can B2B leverage customer loyalty programs? Yeah, so when you look at a loyalty program in general, and I think this is true for either B2C or B2B, we have to move it beyond a transactional relationship. There is certainly a revenue aspect to that. There is a loyalty value, so that goes to the engagement that we talked about.
00:25:25
Speaker
It goes to engagement. I have customers that are engaging with my brand. So example, eyeballs on a website. And then ultimately, customer happiness. So you have a happy customer, whether you measure it by CSAT or NPS. But they are happy with you as a partner. And I think that goes, those transcend either B2C or B2B. Now, when we drill down specifically to B2B,
00:25:55
Speaker
You have to start first of all with B2B purchasers or those purchasing decisions. They're not impulse decisions, right? It's not impulse driven because the vast majority of B2B buyers, they're rational to the bone, right? And so you're going to be taking money. It's not like, Oh, I can use points to buy, you know, a ticket or to this attraction. That would seem fun.
00:26:21
Speaker
We are going as a business leader, right? The focus primarily has to be on what the business benefits are within the program. So that's number one, aligning the value proposition to your market and to your members. But again, it goes to promotion and rewarding. So think about if you are an email marketing provider and you want to engage with webinars like this, make those free.
00:26:50
Speaker
Perhaps there are paid conferences that you want to provide complimentary access and admission to the conferences or the trade shows or maybe the meetups. Because those types of engagements allow that B2B purchaser an opportunity to learn and educate within the industry, but it also allows that engagement. So you're engaging with the brand and that B2B owner or that B2B customer is receiving benefit.
00:27:21
Speaker
Another one, again, we touched on the B2C, but I think it's applicable, the personalized buying experience. It's the messages at the right time. So think about if you're a distributor, can I set up leveraging some e-commerce technology, a customized product catalog that is focused just on you with product lists with your
00:27:48
Speaker
discounts, maybe it's bulk purchase opportunities, but it's just for your customer. You have a lot of CRM data, so you could use that to further customize and you have 24 by seven full service capabilities. So in the middle of the night, maybe you're a small business and you're up having coffee and you realize you get a message to buy printer supplies. As an example, here is the way you can serve that customer at the right time.
00:28:19
Speaker
at the right message within the right communication channel that they want. So I think that's a couple of opportunities which are based at a fundamental level for a loyalty program, but certainly leaning more toward a B2B type structure or that side of the industry. But I think it's no matter what the business model is, if you are customer focused,
00:28:43
Speaker
and you're willing to design that program to cultivate loyalty with your
Personal Insights and Conclusion
00:28:49
Speaker
clients.
00:28:49
Speaker
You can certainly do that by establishing and rewarding the relationship within your customer base, making sure you're not just looking for that one time purchase, but that ongoing engagement. Do you have any additional tips that you can share with everybody that maybe we haven't touched on that you have in mind? So some of the innovations that we're looking at with iSeats, a lot of if you're designing or developing the program,
00:29:17
Speaker
continually test your messages and optimize the experience. So if you think about A-B testing or A-B-N testing, you know, so those are some of the things that we're really focused on. This is not a one and done. It is a continual learning experience around the technology with A-B tests,
00:29:43
Speaker
around personalization. And even where we're looking at is some exciting developments around chatbots. So the ability to not engage with a website, but maybe it's a chatbot and then be an order just online through free text. So I want an airline ticket to go from New Orleans to LaGuardia. Type that in so I don't have to go through a booking path. So some some education or some innovation around that.
00:30:13
Speaker
again, goes back to making it frictionless with the consumer or with that rewards member. And I think the A-B testing is huge because you kind of get a better idea of what works and what doesn't for your customers. Yes, exactly. So again, within the personas and within that experience, continuing to optimize that.
00:30:35
Speaker
So we have one last question, and it's just for fun. So if you weren't busy being the vice president of product management and marketing for ICs, what would your dream job be? What would my dream job be? So because I'm well up in age, I'm going to take out the football player and rugby player, although playing rugby for 30 years was probably pretty good, but bad on my body. I think I would have to say at this stage in my life,
00:31:02
Speaker
going back to what we had talked about being on the Gulf Coast, something on the water. So think about a fishing guide. Maybe it's a... That's the first thing that came to my mind. Oh, 100%. I could own a little hotel on the water with a fishing boat to bring guests out. Maybe that's part of the reward program.
00:31:27
Speaker
You know, and catch fish and then cook that for them. So I do being from the South again, every person that's born here loves to cook or is at least familiar with it, which is one of my hobbies as well. So doing something outside with cuisine somewhere on the Gulf Coast or maybe an island. So maybe it'll be a dream come true soon enough. Yeah, but we'll have to visit. Well, sure. You can join the reward program. You'll be the inaugural numbers.
00:31:56
Speaker
There you go. Well, Sean, thank you so much for joining us and sharing your insights on customer loyalty programs. If our audience would like to get in touch with you or follow you online, what's the best way for them to do that?
00:32:09
Speaker
Sure. So I would go to, in general, the I-SEATS website, which is I-S-E-A-T-Z.com. Secondly, my email address is S for Sean Duclod, D-U-C-L-A-U-X, at I-SEATS.com. And then my LinkedIn, Sean S-E-A-N Duclod, D-U-C-L-A-U-X. Love to engage any way we can. All right. We'll make sure to put that in the show notes.
00:32:34
Speaker
And make sure that you follow Sean and connect with him. If you want to get in touch with me or Stacy, you can hit us up on social. On Twitter, you can find Stacy at STACY underscore JAX. And you can find me at Elena underscore JAX. That's A-L-A-N-N-A underscore JAX. And if you're not a Twitter fan, you can always look us up on LinkedIn. And don't forget, you can leave us a voicemail on the Anchor mobile app or on our anchor.fm show page. See you next week.
00:33:06
Speaker
The B2B Mix Show is hosted by Stacy Jackson and Elena Jackson of, you guessed it, Jackson Marketing. If you need help with your B2B inbound marketing efforts, visit us at JacksonMarketingServices.com.