Leaders in Customer Loyalty, Powered by Loyalty360
Leaders in Customer Loyalty, Powered by Loyalty360
Loyalty360 Loyalty Live | Don Smith, Brierley – Capillary
Capillary Technologies, has made waves in the loyalty industry, thanks to its recent acquisitions of two prominent companies: Brierley and Tenerity's Digital Connect Assets. Since its inception in 2012, Capillary has served companies worldwide with its customer data platform. Through the utilization of its AI-powered loyalty management platform, Capillary can enhance a brand’s loyalty program to improve the customer experience and enhance program strategies.
In an exclusive interview with Loyalty360, Don Smith, the Global Consulting Officer and Chief Marketing Officer (CMO) at Brierley – Capillary, gave an inside look at Capillary's recent acquisitions. Smith also delved into the concept of generative loyalty and the potential impacts the latest technology will have on the future of the loyalty industry.
Good afternoon and good morning, Mark Johnson from Loyalty 360. Hope everyone's happy, safe and well. I want to welcome you back to another edition of Loyalty Live. In this series we speak with leading agencies, technology partners and consultants in customer channel and brand loyalty about the technology trends and best practices that impact a brand's ability to drive unique experiences, enhance engagement and, most importantly, impact customer loyalty. Today we had the pleasure of speaking with Don Smith, the global chief consulting officer representing capillary technologies in Brierley. Brierley is now a Capillary Services Company. Nice to speak with you again, Don. How are you?
Don Smith:I'm doing well, Mark. Thank you for having me.
Mark Johnson:Absolutely. Thank you for taking the time. First off, we like to start these on a personal level, so we'd like to know a little bit more about you for those who may not be familiar with you, and also your current role at Capillary.
Don Smith:Yeah, great, so my name is Don. My passion is data-driven insights. I started my career as a university professor for the first 11 years teaching people to analyze data and mind programs and look at whether or not things were working. I love doing that, but I transitioned 16 years ago into consulting and specifically that's when I started with Brierley. My passion is really building effective engagement solutions, whether they're structured or they're just fantastic lowercase L loyalty ideas or constructs that go into market. I love to mine data Brierley. Right now I lead analytics, I lead strategy and research, and it's very exciting for us to bring those components to bear to the larger set of capillary products and services.
Mark Johnson:Okay, excellent. I touched on a little bit but for those who may not be familiar, in the last six months Capillary acquired both Brierley and Tenerity's digital connected assets. Can you tell us about the integration, how it's going, what's happened since the acquisitions and anything of interest?
Don Smith:Yeah, Mark, it has moved at 1,000 miles per hour. But I think these acquisitions were very, very strategic and very well thought through and I kind of think of it as you know there's chocolate and there's peanut butter and there's marshmallow and all of it comes together in a way that's very complementary and that's been exciting. You know so, if you're not folks of Brierley, we're bringing the consultancy and that perspective to bear and that's been fantastic to narrative, or whether the digital connect assets, which have been rebranded rewards plus under the capillary product catalogs for those that aren't familiar at really this platform rewards plus it identifies sources, catalogs, thousands of intelligence based offers that could be like cash back or card linked offers, vouchers, discounts. For us, especially its experiences that members can source and enjoy, and that's what we love.
Don Smith:The idea is that every reward will inspire greater customer loyalty and it will be very, very personalized, and so we think that with that that rewards plus acquisition, we have the broadest offer and partner network of any company and market today doing loyalty, and we've got tremendous commercial flexibility. That means we can deliver value back to customers into the business and really generate profitable loyalty. It's been a. You know, Brierley brings the consulting, rewards plus brings the platform and it all fits into what we think is a best in class solution with Capillary's, loyalty plus, engage plus and insights plus platform. I mean it's the most feature rich platform and market for loyalty with the greatest functionality, and we've added on these things that truly complemented and rounded out, couldn't be more excited. Really smart set of acquisitions and integrations that's awesome.
Mark Johnson:Let's let's dig into this a little bit on a couple different fronts. So the Brierley name will remain and you'll be positions that capillary services company
Don Smith:I think it's so Brierley you know, really they're just the Brierley name aroun around for the consulting and that means it's the analytics, it's the strategy and program design, it's the research capability, emotional loyalty measurement, and I think that's where we've had our highest reputational capital as a brand. We've been at it for 35 plus years. People know us and they trust us for consulting. It's been a growth area for us over the past decade and so it just makes sense to bring Brierley, with the reputational capital in North America and in Europe, to bear in the larger Capillary family of products, and that just makes a lot of sense. But what I'm most excited about it is we're keeping that consulting capability and then within Brierley we've also incorporated Capillary's, digital platform and services and we're all part of one team now.
Don Smith:And what's really exciting about that is when I go and we spend a lot of time designing or optimizing loyalty programs and getting them right, and while we're working that process, mark what we're also able to do is start digital design work at the same time. And so while we're concepting and ideating and refining the program mechanics, you know, and validating those through the usual things like financial modeling and voice of customer research. We're also building out clickable digital prototypes that start creating more digital assets and making the experience come to life while we're designing the program. And so at the end of these designs and we're just selling a lot of these integrated solutions our members are getting a best in class loyalty program ready to hit the ground running with a digital solution that's already there, and I think that's really a winning solution that that no one else is really offering today, so we're just couldn't be more excited about it.
Mark Johnson:It's definitely an interesting time. We see it with our growing brand membership the challenge of not only having the right technology but having the right strategy and the right incentives. Many brands are looking at the customer value proposition and make sure that there's alignment, make sure that it's driving engagement, and that requires out of the box thinking with a great strategy company that you leave, but also having the correct reward assets that can speak in a personalized manner can drive engagement. It's great to hear that the combination of the entities really addresses a market need.
Don Smith:Yeah, it feels really good. I think it was smart there's not round pegs going into square slots. This is really everything fits together.
Mark Johnson:That's good. Rewards Plus Tenerity's digital connected assets are now going to be rebranded Rewards Plus to align with the other products in the Cappilary suite. Can you talk about the value of Rewards Plus, A complimentary to what Capillary already had in its arsenal?
Don Smith:Yeah, if you think about it, Capillary's Loyalty Plus and Engage Plus solutions the loyalty engine in its communications platform clearly best in class, feature rich, saas-based and really and truly self-service, with an interface that is just so easy to use, been so impressed with it and it justifiably scored the highest on functionality in the Forester Wave that was put out.
Don Smith:We know we have a best in class technology platform.
Don Smith:The acquisition of, or rather the creation of, rewards Plus the rebranding is just the logical extension, I think, of that feature rich platform, because the Capillary platform has baked in analytics, it has AI.
Don Smith:In fact, the loyalty and insights plus modules have nudges that occur and it's mining data and it will actually suggest things to do it proactively, to improve campaigns and to improve program performance, and all of that is cast through cool decision models. Now enter this platform that offers all of these offers and rewards and experiences and that same type of AI and those same algorithms are being used to create a constellation of very personal and personalized I should say offers to consumers and it's constantly learning and adapting and really trying to build an authenticity so that members see values and what see value and what a program is offering. It just fits this focus on making sure programs is complementary to offering more solutions that will work hard and make loyalty programs work harder but really deliver value at the end of the day to the consumer and, done correctly, there's a monetization of loyalty assets. That can occur as well.
Mark Johnson:Okay, when you look at Capillary switching gears a little bit, the introduction. They recently introduced this concept of generative loyalty. Can you explain what that is? What does it really mean, because lots of terminology in the industries and what does this mean for the industry?
Don Smith:Yeah, we're excited about generative loyalty. It's a play on generative AI, which is clearly a trend. Everyone's talking about it. If you're to define generative AI, it's artificial intelligence capable of generating texts and images, content, other media using generative models. Now, what are generative models? Well, they're algorithms that learn the structure and the pattern of their input or training data. But what's so exciting about it is they take that and then they cast and populate new data. That's the generative and there's this training and simulation that occurs. That leads to greater optimization. That's the basis of AI.
Don Smith:Let's take that logic and extend it forward to generative loyalty. That's where these data assets that are enabled by loyalty we can mine. All of the customer data points, all of the transaction data points, get to greater personalization at scale, so that every campaign, every value proposition, every real-time inflection point where we're serving up content is part of this laboratory of data democracy. Generative loyalty is going. Let's uncover insights constantly, optimize the customer experience, constantly, enable the next best actions. If we do it right, it's a win-win solution. Customers see more value, it feels more authentic and the brands enjoy greater loyalty and might even make their loyalty programs profit centers If they really work in the right set of partner and affiliate networks Excellent.
Mark Johnson:Now, how does generative loyalty align to some of the most notable trends that you're seeing within the industry today?
Don Smith:Well one. It enables reward choice, which I think is table stakes. One size fits all loyalty programs aren't nearly as exciting as programs that put the member in the driver's seat and allow her or him to select the right flavor of rewards of the right style of a program. Generative loyalty is all about cast a constellation of offers and benefits to customers. Let them pick the ones that are the best and keep making them and keep tailoring those at the customer level to make them feel a little bit more authentic. It's that authenticity, I think, is the second trend, that is the greatest enabler of emotional loyalty. Finally, I think generative AI loyalty programs can be profit centers.
Don Smith:There's a lot of interest Mark, as you know, in paid membership and everyone wants to be the next Starbucks or the next American Airlines. But that's not going to work for every brand and for every vertical. But what brands can do is cast partnership networks and find ways that they build a really good loyalty program and members see value. Partners will join in and serve up additional content and experiences. There's ways to make that work very, very well as a profit center outside of paid membership.
Mark Johnson:Absolutely. There's definitely a number of unique trends that we see with regard to partnerships or huge area. If you can have them aligned and you can make sure that there is values, both brands and not just one brand, which they used to be a more of a one-way hash. But when you look at some of the key factors you are receiving driving customer loyalty in today's market, what are those are and what are the factors and what are some strategies or approaches that are effective in helping address them?
Don Smith:Yeah, I think the number one thing is factors for loyalty. There's got to be a marriage of value and brand alignment. What I mean by that is that there's rational loyalty, and you've got to have good products and services and keep a finger on the pulse of your customer. They should enjoy your product. I feel like. The pricing is fair, customer service is reliable. If you have that, it's a necessary precondition for emotional loyalty. It's that emotional loyalty that takes it to the next level.
Don Smith:And so being able to do both of those things rational and emotional is critical, and I think personalization is at the heart of it, and everyone throws that around like it's a buzzword. But let's be honest and think about all the marketing and communications you receive from brands and from programs. Are they really personalized or are they spray and pray? And I think there's still a lot of the latter generic marketing and market and true personalization at scale is what builds an authentic relationship.
Don Smith:If I start marketing to a customer in a way that reflects her or his unique choices and preferences, their transactions, the data they've shared about themselves, then I'm crafting something that feels really authentic and I'm taking it to the next level. Customers will be more interested in marketing, participating in a program, and I can build that kind of customer to brand connection that really leads to greater affect. And at the end of the day, simplicity would be the final thing that I would throw in there. You cannot overcomplicate a mechanic. It still has to be easy to understand for members to use. They want it to be quick and they want gratification.
Mark Johnson:Yeah, absolutely. When you look at the market customer loyalty, as you mentioned simplicity is a big thing, right. So, and understanding and listening to your customers we were actually just talking with Cracker Barrel. They're a new member of Loyalty360, just launched their program and they're blowing the doors off with regard to numbers, right, but they try to create a very simple program that's easy to understand. And just because you think it's easy to understand, does the customer? So simplicity, I think, is a great point. What are other pieces of advice? Maybe one piece of advice you would give to a brand that is looking to adapt or innovate their loyalty program add some value. What's a quick win they can implement in their current program.
Don Smith:Yeah, and I would even go back to you. You were talking about Cracker Barrel. I'm pretty excited about that too. Amy Barnett, who used to be with my company she was my first boss was really the architect behind that and drove it and I think it's a great program. I just saw the preview of it the other day. It has fun. It has a currency called Pegs. It plays in to kind of the stuff that's on the tables Really cool and really simple and probably long overdue for that brand. So it's really for me it's ticking all the boxes and Amy was a mentor to me so I'd say shout out, way to go. I hope that program kills it when it's out there.
Don Smith:But back to the piece of advice that I usually give to folks when they're trying to optimize their program is don't boil the ocean. I think too often folks feel like I have to take every box with every trend and loyalty and do it all at once, and usually what I say is let's sit down and the first thing you should do when you take stock of your loyalty program is say what is the small set of most desired customer behaviors? That would be game changers for me. What are they? And if you narrow down that set, start to leverage the structure of your program to incentivize and enable those most desired behaviors, and if you do that, I mean the key litmus test there really should be win-win. Your customer should win because he or she feels like, wow, I'm getting some benefit here, I'm getting greater offers, I'm gaming it a little bit, it's fun and I'm getting hooked up. And the brand should win because it's driving greater adjacency into their product or service hierarchy and their consolidating share of wallet with their brand.
Mark Johnson:Okay, excellent. And when you look towards the future, what's the next big thing brands can expect in the way of technology opportunities and tools from your organization?
Don Smith:Yeah, there are quite a few. Facial recognition is going to be big. I'm convinced of it. It's in market slowly. We have a partnership. It is going to be the most secure form of customer identification and probably just reduce friction points in a way that will be fantastic. Your phone number change is great, your face won't, and so I think that facial recognition I'm going to bet on it. I think it's going to be big. Zero-party data propagation as well, let's face it, sort of death of the cookie, and Google just announced some of their changes. Customers will share information about themselves. If we protect it and we also action it in authentic ways, that's going to happen.
Don Smith:Generative loyalty is a big trend and there's a couple other I'd talk about too. I think there's post-materialist loyalty concurrence. That sounds fantastically academic, but what I mean is we keep seeing it in the data. Younger consumers want to feel that they're aligned with brands, missions and purposes. They want a commitment to philanthropy. They want sustainability. Even some factors like social responsibility work into the calculus of consumers and programs, and we've been doing a lot of this in our design process. Mark. Good programs can find ways to look at philanthropic commitments that they're making and tie them to the loyalty program. Keep the self-interest for the member so that she's earning rewards and being rewarded and enjoys the benefits, but also find ways to let her or him co-earn with their favorite charity and maybe even pick it, and I think doing those things is going to be very, very exciting and clearly adaptive. Modeling at inbound inflection points, big and emotional loyalty measurement in total and in moment, will be the next big frontiers.
Mark Johnson:Excellent. And then when you look at initiatives you may be working on you talked about the official recognition, some others. Do you have any other closing thoughts or areas of advice about the market and also, or maybe even where you are going to see your new, uniquely combined entity going forward?
Don Smith:Yeah, we've got a lot going on right now. If I were to give advice, I would say look one, create value for your customer and you create value for your brand, and that win-win is critically important. And advice I always give is every cent you invest in creating and cultivating emotional loyalty will be amortized over an extended customer lifetime value. We know it to be true and that's so incredibly important. Some of the things that I'm really focused on right now with my partners at Capillary is we're working on a real-time measurement of emotional loyalty at an inflection point where customers are providing real-time feedback, and that's working into the scoring and complimenting the BLQ, which is the Brierley Loyalty Quotient, which we're also really proud of and most of our customers are using, and, I think, just finding new ways to bring the fun and make loyalty transcend the transaction. That's what folks want and that's what gives loyalty a life of its own and a power of its own.
Mark Johnson:Excellent. I look forward to seeing that. Also looking forward to what you guys do, and it's great to hear that the combined entity is making such an impact. It's always good to hear within the industry, for sure, yeah it's been exciting. Absolutely. So now we have our quickfire questions. You should be good. You're a little locations, but this may be challenging here. What is your favorite word?
Don Smith:Win. You should win with loyalty.
Mark Johnson:There you go. What is your least favorite word?
Don Smith:Impossible because nothing is.
Mark Johnson:Mark Johnson: What excites you? Don Smith: Innovation Excellent. Mark Johnson: What do you find tiresome?
Don Smith:Analysis, paralysis, find an insight, put it into market and go make decisions and have a bias to action.
Mark Johnson:What's the best show you've ever attended?
Don Smith:I should probably give an industry answer, but I think it was the REM Green Tour would be my absolute favorite concert from life. But at the risk of being obsequious, I'd also say my favorite show that I attended last year in the industry was the Loyalty Expo, and I mean that sincerely because I don't know any other place where you could see that many brands present actual results as part of that awards process. I mean, it was just insight laden and rich.
Mark Johnson:That's awesome. If not for the position you have now, what other profession would you like to attempt?
Don Smith:I've always wanted to be a professional actor. I had a theater scholarship in undergrad and, yeah, that would be where my passion would be. I don't think I'd be successful, mark, but I'd love to do it.
Mark Johnson:You're definitely animated, so I could see you do that, doing that for sure. What profession would you avoid?
Don Smith:Probably accounting Boring. Can I build models and generate liability forecasts? Yes, but accounting itself not for me. Black and white.
Mark Johnson:Who inspired you to become the person you are today.
Don Smith:My mother and father, and also a handful of really powerful educators from high school through college.
Mark Johnson:What do you typically think about at the end of the day?
Don Smith:Oh, I do a gratitude check every night and I just think about what I'm grateful for and I try to find something. Even in the worst of days where it seems like everything went wrong, just try to find something to be thankful and grateful for.
Mark Johnson:And last question how do you want to be remembered by your friends and family?
Don Smith:You know what? That I was hardworking, I was enthusiastic, maybe a little bit irreverent, but ultimately empathetic and a good person, which is all I think anyone should really want.
Mark Johnson:That's good. That's good. I think those are great responses and looking forward to seeing how this wraps up, and thank you very much for taking the time to speak with us today. It was great hearing your perspective on customer loyalty and we look forward to learning more about the acquisition and how the conditions come together, and more from the team throughout the year. So thank you.
Don Smith:Thank you, mark, always good to talk to you.
Mark Johnson:Absolutely Everyone. Thanks for joining and make sure you join us again for another edition of World. Good Live, and until then, have a great day.