Loyalty360 Loyalty Live | Kim Welther, Baesman

Mark Johnson, CEO of Loyalty360, spoke with Kim Welther, Vice President, CRM & Loyalty for Baesman, about the challenges and opportunities in the year ahead, including defining and measuring success, metrics to consider, and what it takes to stand out in a crowd. 

Transcript

Trends Shaking Customer Loyalty in 2024

Speaker 1 0:04

Good afternoon , good morning . It's Mark Johnson from Loyalty 360 . I hope everyone's happy , safe and well . Welcome back to another edition of Loyalty Live . In this series , we speak to lead agencies , technology partners and consultants and customer channel and brand loyalty about the technology trends and best practices that impact the ability of brands to drive unique experiences , enhance engagement but , most importantly , impact customer loyalty . Today's focus is going to be on the trends that will likely shake the customer loyalty industry in 2024 and beyond . We have the pleasure to speak with Kim Welter she is the vice president of CRM and Loyalty for Basement about some of the challenges and opportunities in the year ahead , what they're seeing . So , kim , thank you very much for taking the time to join us today .

Speaker 2 0:47

Yeah , awesome , very happy to be here .

Speaker 1 0:49

Absolutely . First off , for those who may not know , can you tell us a little bit about yourself and all your current role at Basement and a little bit about your background ? It'd be great to know .

Speaker 2 0:58

Yeah , sure . So I've been at Basement . Actually , this month will be 13 years that I've been working there and I lead our CRM and Loyalty Agency division . As you mentioned my former life , I was on the brand side I spent about eight years working for Victoria's Secret but at Basement we really work with brands to help them better understand their customer data , how to build a more personalized relationship with them , really unlocking the journey of that one to many to one to one . We have a lot of retail clients , but we also have home service healthcare and do a lot of the brand's data work , as we have a lot of the data in-house and it's critical for the work that we're doing .

Speaker 1 1:35

Okay , and over the last 12 months we've seen and heard and discussed with brands about their interest in improving or revamping their customer loyalty efforts . You know there's an interest in additional adding functionality , changing program structures , looking at the customer value propositions and change of benefits for the members you know . Is that something you're seeing and , if so , you know what changes are your clients most focused on ?

Speaker 2 1:58

Yeah , absolutely Lots . I would say change is good . Please don't be afraid to change in your loyalty program . I think that that's probably one thing that a lot of people lock in on and don't change . So we are seeing it a lot more often , Brands shifting from the focus used to be , you know , creating and launching loyalty , to now that a lot of brands have loyalty . It's okay . Is it working ? How are we growing ? Are we optimizing ? How do we make it better ? So I think that's the biggest change right now is that brands are starting to realize that maybe they need to change a little bit faster and a little bit more .

Speaker 1 2:32

Okay , and what are some of the program changes and enhancements that you think brands should be focused on in 2024 ?

Speaker 2 2:39

I think the biggest enhancement we really are going to be seeing is that connection outside of the transaction , whether that's emotional loyalty , experiential loyalty . Once you've created kind of that perceived value of the program and that hard , tangible benefit , I think it's important that we really start to look to driving engagement in those softer benefits , engagement within the brand , customers wanting you know , early access , stay in the know , making sure that the program is developing more of that brand loyalist and not focus so much on the tangible hard benefit .

Speaker 1 3:12

And how should brands be defining and measuring success of these program enhancements ? Because that's a big concern , right , CFO ? The auditors are looking more and more and more kind of the return of the program . At least we see that . How should they be defining success ? Thank ?

Speaker 2 3:28

you . Yeah , I think this is one of the biggest challenges for brands as they look at program changes . Most people will set kind of here's where we're at pre , here's what we're looking to be post from a KPI perspective . But I think what's important understand is there are a lot of outside factors that are going to play into that . That maybe not be the loyalty program . So you have to be really careful as you're measuring results really align the success metrics to the goals of the redesign . You got to make sure that you're aligning those program objectives . If you pull back on your funding rate , your goal shouldn't be to increase your reward demand sales because those aren't aligning . So you really got to make sure that that financial model is pretty solid , to make sure that your metrics and you're hitting the right goals , to make sure that you those enhancements improved versus kind of put a detriment to the program .

Speaker 1 4:18

That makes sense . So when you look at the measurement of programs as mentioned , it's a big focus , interesting to your perspective , on funding rates and maybe kind of the unintended consequences that may have . What do you believe are the top three or four metrics ? Branch is focused ?

Speaker 2 4:36

on . I would say , from a loyalty program perspective , definitely number one is that active membership and that retention rate . I kind of think those go hand in hand . The reward redemption rate is important at measuring kind of engagement , but if it's not a reward redemption , whatever that top perceived value benefit is , we really need to be looking at that engagement level . And then I also think there's a metric around , kind of an activity engagement score . I think that's the newest thing that we're seeing . A lot of brands want to understand . Well , outside of the transaction , how are active members engaging with us ? Are they opening emails , are they writing reviews , are they getting points for activity ? That's an important metric that I think isn't talked about enough .

Speaker 1 5:18

Okay , interesting . I think that's something we see as well and also the whole idea around initial onboarding the program to that first transaction or subsequent transaction as well , and looking for the kind of the most optimal journey for the customer , absolutely so . Are your clients asking you for different metrics now than they may have in the past ?

Speaker 2 5:41

I think it's two parts . One is there's still a lot of metrics that we've had in the past that are still important . So the study metrics we just talked about within the KPI is very important , but we do see some new things . I think some of the newer things around how do we stack up against other programs has been an interesting kind of conversation lately , as businesses might be a little bit more challenging in 2024 . There's always that interest of how are everyone else doing so ? I think that's a good benchmark as well . And then layering on that engagement score and that we just talked about , I think that's critical in kind of a new way of thinking of metrics . So always , the old is still important but the new is just as important .

Speaker 1 6:24

When you look at your current clients , maybe sales prospects , what are they asking you for regarding your customer experience , customer loyalty efforts ? Is it the same as last year , a little bit different and , potentially , how do you see that change again in 2024 ?

Speaker 2 6:39

I think what we're really seeing in 2024 is most are looking for that differentiator , Like how was our program not just a spend and get and looks like everyone else ? I think that's the biggest thing from the past that we're seeing right now is how do we kind of harness a differentiator and make that roll through our loyalty program and make it more successful ?

Speaker 1 7:00

How can customer loyalty and kind of a brand's commitment to their customers address some of the potential challenges ?

Speaker 2 7:08

I think brands really need to recognize how they meet their customers in 2024 . I think value is going to be something that's going to be critical and value is going to be delivered in price . It could be customer service , it could be convenience in service , but I think it really needs to be around brands' loyalty in 2024 to put the customer first and we try and create that value in all ways possible .

Speaker 1 7:33

When you look at customer loyalty programs . One of the things we saw last year in our loyalty trends report is this whole idea of seeing a sameness kind of an overused kind of moniker . But differentiating your customer loyalty , customer experience offers programs can be challenging . Is this something that you see in the market as well ?

Speaker 2 7:53

Yeah , as more and more brands have loyalty that main hard benefit it's hard to get that differentiator . You really want to look to your program and answer do we have a good program ? Is it not only driving retention in the next purchase , but is it also building brand loyalists through our products , our customer experience ? The top programs are going to be able to do both of those and you really want to put yourself under a microscope to make sure that you're doing both of those things .

Speaker 1 8:21

Okay , and when you look at advice suggestions you may give to a brand who are looking to differentiate their customer loyalty rewards , their programs or their strategy , what do you suggest ?

Speaker 2 8:34

Yeah , I think people probably make that a bigger challenge than it really is . As we work with a lot of brands , it's really interesting how we can find a way to focus on a brand's uniqueness and the value they can bring . I think a good example of that is Sephora . I think Sephora has done a really good way of creating a community of makeup tips , tricks , tutorials . They offer something that really helps their customer and that you really need to be able to take that and harness that uniqueness and bring value to the customer . There's a lot of brands that have done that pretty well and I think anyone who doesn't feel like they have that differentiator needs to work and spend time in really optimizing that .

Speaker 1 9:12

Okay , what do you see as the next big thing in customer loyalty , customer experience ? What do you see ?

Speaker 2 9:19

I think the next big thing in loyalty is that personalization having the right technology and the program to personalize the right program for each individual customer . As I'm sure many of our marketers know from market research , customers value different things , and so that is really how we harness the differentiator and the customer . So we could see one segment that values experience above all , one that values price , or one that values recognition and exclusivity , and I think the next big thing in loyalty is really building and delivering a program that allows the customer to choose the benefit that they value the most . And so , just to give another example of a brand I think that does this really really well . Rei is one who , if you haven't looked at their loyalty program , you should definitely check that out . They deliver on experience , profit sharing , extended returns , satisfaction guarantees , free shipping for all their members . They've really created this community of customers who are loyalists and passionate about the brand , and I think it's really about delivering that customer value in a unique way that it's valuable to them .

Transformation and Integration of Marketing Data

Speaker 1 10:26

Excellent . So when you look at the role of marketers , there used to be kind of a divergence between that kind of the left brain , right brain , the creative and the strategy , or creative and analytics . They were somewhat divergent . There's a coming together of that as well and they're both very integral into loyalty program design and management . And how do you see that transformation going on in the marketing side and how can brands better align data with the creative pieces , the content , to drive more engagement ?

Speaker 2 10:57

Yeah , I think that's actually a very unique kind of conversation that's going on , mark , especially where 10 or 15 years ago you saw creative and marketing very separate and now you see creative and marketing usually coming under the same umbrella , the same leader , and so I think there was that recognition that those need to work in lockstep with each other . And it's more important now than ever that the data , the strategy , is helping drive the creative and creative , goes through just as much testing and learning as the strategy and data . So I think it's critical that they are talking to each other , that they understand the synergies and the energy that they can bring when they're working together .

Speaker 1 11:34

Absolutely . When you look at the role of data in marketing , what's essential or what should the essential function of data be in marketing optimization or in optimal marketing outreach ?

Speaker 2 11:44

Yeah , I think looking at customer data is critical and making that move to that more personalized marketing strategy . It's as you mentioned . It's the way to look through and create those customer journeys , start to build and look a little differently where segmentation comes to life and creates that one to one strategy . So I think you always need to be thinking of data in a way of how do we talk to our customers better and how do we leverage data to do that ?

Speaker 1 12:11

When you look at the amount of data , the cleninless of data , it gets to be a challenge . A lot of times Consultants come in and try to sell them a huge transformation process that makes it very difficult to measure . But how can marketers determine whether a given dataset is valid or how much data they should have or they need ?

Speaker 2 12:32

Yeah , I agree there's a fine line between no data and then too much data and analysis paralysis . So I think it's really important to you know any data is better than no data . However , you need to be able to understand early indicators versus rollout indicators . When do we need to retest ? When is the wrong data in the wrong hands dangerous ? So we always go through you know , triple-tech your data . Make sure that you are telling the story of what the data was intended for and what we can pull from the data . You can't go wrong when you that need to know critical data is being used to drive strategy , but also understand kind of the dangerous pitfalls of too much or looking at it in the wrong way as well .

Speaker 1 13:13

When you look at customer loyalty offerings today , what do you think the biggest challenges that you see ?

Speaker 2 13:21

Well , probably based on my previous answers , you can probably guess what I'm going to say , but I do think consistently , technology is the biggest challenge by far for brands . A lot of other challenges are in the metrics strategy , lack of resources , but those can be supplemented with partner . I think that internal technology constraints are the biggest challenge for a lot of brands . I think the brands need to really commit to a brand strategy of loyalty above all else and allocating the team the resources to allow for a flexible and ever-evolving loyalty program and don't let the hurdles of technology stop the strategy from being done . That's what I would say is probably the biggest challenge .

Speaker 1 14:05

Well , thank you very much , Kim , for taking the time to speak with us today . It's a pleasure to speak with you . As always , you have a very unique insight into the market , and one thing I'd like to talk with you is not only you're smart , but you also are very succinct in how you approach the questions . There's not a lot of it extra , and so I think that makes the interviews with you more impactful for sure .

Speaker 2 14:26

Awesome . Thanks for having me , Mark .

Speaker 1 14:27

Absolutely . Thank you everyone for taking the time to listen and make sure you join us back for another edition of BulletLive soon . Until then , have a wonderful day .