Building Loyalty Beyond Reason

It seemed like everything changed in business overnight.

At one, unique moment in time, we shifted from a world where we dreamed about being able to collect data and information about our customers, to a world where personal computing was a reality. Not only was this a world where there was a computer on every desktop, but Moore’s Law (the notion that computation power doubles every two years) started kicking in, and we were able to capture, slice and dice larger and more powerful data sets and output them into offers for customers that were more personalized and relevant.

The truth is that business technology actually got too good at capturing customer information.

We went from a dry and desolate data desert to drowning in a sea of data. Marketers spent decades trying to crack the code and come up with cost-effective and timely ways to capture, slice and dice this endless depth of customer information gold. Few companies had the financial wherewithal, human capital and marketing resources to harness this information fully. With the onslaught of social technologies and mobility we have arrived at a moment in time where the technology is both cost effective and consumers are sharing more and more in public forums. This combination of customer data captured at the business level and people self-identifying themselves in spaces like Facebook, Twitter, YouTube and Pinterest creates the perfect storm for brands to leverage the power of social commerce and the value of a strong loyalty program.

Imagine a world…

Imagine a world where you swipe your Air Miles card at your local supermarket and you’re suddenly getting coupons, discounts and offers that are one hundred percent personalized and customized to the brands you like. Imagine a world where companies (like that supermarket) are sending out unique offers to each and every one of their customers. Hundreds of thousand of different coupon books. Does it sound like something we might see in the near future? It’s happening today. Right now. And, it’s the work of Bryan Pearson and his two thousand-plus employees at LoyaltyOne where he is President and CEO. Pearson heads six global enterprises (including Air Miles – which seventy percent of Canadians use) that connects to a knowledge base of more than one hundred and twenty million customer relationships. In short, Pearson not only knows why you buy, but when, how much and how often you’ll come back. With a passion for enhancing shopper experiences and over twenty years under his marketing belt, Pearson just released his first business book, The Loyalty Leap – Turning customer information into customer intimacy (Portfolio – 2012).

Making The Loyalty Leap.

“Inside of me, I always felt that there was a book that was screaming to get out,” Pearson said during a conversation held last week in Toronto at the Canadian Marketing Association‘s 2012 CMA Summit. “What I saw in the marketplace was that all of the concepts we bring forward in the loyalty game… and have been talking about for over fifteen years… have come to the point where we are truly enabled to capitalize on all of this potential. I felt that there was this opportunity  – a moment in time – to publish a book and see if this can create a sea change of movement. Despite everything we hear about digital media, the vast majority of companies are very much stuck in an old paradigm.”

What is this old paradigm?

Pearson thinks that it begins when companies spend way too much time being, what he calls, “product obsessed” while the customer becomes this thing on the side (the group of people that we sell our stuff to). “It starts in the infancy of the business,” says Pearson on the genesis of this traditional paradigm. “They know who they’re trying to serve, because they grow, develop and expand the product line but then they start to lose track of that customer. The idea of the leap is an attempt to shake the organization up from being product obsessed and focused on operation efficiencies, to shift the corporate conversation to start thinking about what they would do differently if they really became customer committed. I want businesses to take advantage and use this data analytics and technology that the world has to deliver what is possible: which is a true one to one and unique experience. Businesses need to start thinking about how that would change who they are, and how much more loyal it would make their consumers.”

This is less about manipulating consumers and much more about creating a better marketing experience.

The challenge with data is always around the social contract between the consumer and the brand. Without trust and a candid understanding about how all of this data gets captured and used, consumers have a low-level of trust. When done well, the relationship can be magical for businesses. Pearson acknowledges that consumers should, rightfully, be skeptical, but he still believes that we’re in the very nascent days of having a consumer that is truly social and engaged with a social business that delivers a much more relevant experience. Consumers are demanding it and now, businesses of all shapes and sizes are capable of delivering on it. This is less about “if” loyalty will continue on with its massive growth and potential to do that much more at creating better consumer experiences, and more of a question of “when.” For Pearson and many others, that “when” is now (and that’s why businesses need to make this loyalty leap). Technology is no longer the roadblock.

The roadblock has become our traditional and non-consumer centric ways of thinking.

The above post is my twice-monthly column for the Montreal Gazette and Vancouver Sun newspapers called, New Business – Six Pixels of Separation. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original versions online here:

• Montreal Gazette – Focus back on the consumer, loyalty lord says.
• Vancouver Sun – not yet published.

You can listen to my conversation with Bryan Pearson in its entirety in an upcoming episode of Six Pixels of Separation – The Twist Image Podcast (which will be published in the coming weeks).