What’s Loyalty | Ragnarokast #4

Steven

I’m Steven. 

Spencer

And I’m Spencer. Welcome to Ragnarokast, your podcast for all things marketing and MarTech. 

Steven

Hello everyone. 

Both

We’re the Co-CEOs of Ragnarok. 

Spencer

Hi there, I’m Spencer. 

Loretta

I’m Loretta. I’m guest hosting today, filling in for Steven. I’ve been a strategist on the Ragnarok team for a few years now, and excited to be here. 

Spencer

Awesome. Happy to have you. Cool. So when the general population thinks of brand loyalty, it’s usually, “We are a Pepsi family, no Coke here,” or “I would never use generic Band-aids.” In the marketing world, loyalty is a little more nuanced. On today’s podcast, we’re gonna break down loyalty with today’s guest, Zach from Talon.One, and yes, that is his last name. 

Zach

Thank you, Spencer. Yes. Talon.One is, is now my new last name. My old last name  was Edelman. So I’m Zach Ettelman, and I lead the solutions partnerships team here at Talon.One. So we work with agencies, consultancies, systems integrators that provide the strategy, the integration, the implementation work behind everything that we do from our promotions and loyalty standpoint here at Talon.One. So great to be here. Loretta, Spencer, really looking forward to this. 

Spencer

I want you to talk to me as if I’m a plebe when it comes to loyalty and Talon.One, don’t talk to Loretta that way or we’re gonna have a problem, but talk to me as if I’m a plebe. You know, just, just assume I know absolutely nothing and, and I’m not gonna reveal whether I know anything or not, because that would be giving too much away basically. Can you give us like a, you know, a, a just a quick overview of Talon.One itself, like what is it? 

Zach

Absolutely. Yeah, I’ll throw out all of my jargon here and really just talk about really what we do. We are a flexible API first platform that enables you to build any type of customer incentive program. What is it? A customer incentive program, anything that consists of promotions, discounts, coupons, product bundling, loyalty. The list kind of goes on and on, but really we’re a rule engine and we really empower our users to build simple rules using if-this-than-that logic to create any type of or customizable engaging incentive out there for, for any type of customer. We, we work across all these different types of industries, but some of our big clients are Adidas or Ah-didas, if you’re in Europe. Live Nation and Ticketmaster, Carlsburg, if you, if you like a little alcohol, Reebok, Eddie Bauer. And then we even work within financial services with Afterpay. 

Spencer

I’m gonna go off, off-script here for a second. And first of all, did you say Ah-didas? Because that’d blow in my mind. Is that how you actually say it? 

Zach

That is actually how you say it, but it, it bothers me when people say that. It’s, it’s Adidas here in America. 

Spencer

Mind blown. Absolutely. Just floored right now. I, I think I have to leave the room. 

 Zach, can you start us off with, to you, what is a loyalty program and then Loretta, how do you view it from not just a town one angle, but like just from a holistic, you know, marketing view? 

Zach

Definitely, and I’ll even go one step further. We’ll do the ChatGPT version of what a loyalty program is. In one sentence it gave me a full response, we don’t need that. Then I’ll kind of give you the Talon.One view and, and then really interested to see what, what Loretta has to say. 

So ChatGPT, this is what a loyalty program is to them: It’s a marketing strategy employed by businesses to encourage customers to continue purchasing their products or services to foster customer loyalty. Pretty spot on. I it gets pretty good. Alright, here’s here’s the talent one view, here’s the Zach speak a loyalty program. 

Truly the, the way we view it is a, is a way to incentivize customers with a personalized, meaningful reward or experience that entices them to take some desired action that the brand wants ’em to take. What is that? Typically it’s typically engaging more with the brand. So think non-transactional, think I’m following them on social or I’m attending an event in real life and I’m engaging with that brand or transactional I’m purchasing from that brand, whether it be through a social channel, maybe like through a Facebook marketplace on the website, through a mobile app, maybe through a third party distributor, but I’m repeating a purchase with that brand. 

And then the last piece that we kind of view of loyalty is you, you like the brand so much, you’ve got so much brand affinity for them. The, the rewards that you’re getting, the satisfaction you’re getting from their products entices you so much that you’re willing to go kind of sing the praises of that brand and tell all your friends and family all about it. That’s really kind of how we view a loyalty program. 

Loretta

Yeah, and I would say that everything that you said there is really in line with how I think about loyalty too. But my, I tend to be a little bit more on the fluffier side. So I always think what I learned is that your brand is how you make people feel. It’s how they feel when you walk into a store of the brand that you love, how you feel when you’re opening that package, how you feel when everything’s going just right or how you feel when something goes wrong and they fix it for you. And loyalty to me is kind of when you’re taking what people love about your brand, the way that your brand makes them feel, and you’re reminding them of that on an ongoing basis in the right way and the way that’s going to get them to think positively about you even when they weren’t thinking about you before. 

So kind of taking the structure that you talked about, I think is always really interesting because there’s that emotional connection that you need to make. And tools like Talon.One are really awesome, I think for just kind of like powering that relationship that you have with the customer. 

Spencer

Awesome. So while you guys were explaining loyalty, I was paying close attention, actually I wasn’t at all. So here’s, here’s what happened. I, Zach, you mentioned chat, GPT. So I went to chat GPT and I wrote, tell me a story about a guy named Zach Edelman who lives in Denver. Loyalty is important to him, and this is what chat GPT spit out. Once upon a time the bustling city of Denver, there lived a man named Zach Edelman. Zach was a kindhearted individual with a strong sense of loyalty, ingrained deep within his core. He valued trust, friendship, and commitment above all else. These values guided his actions throughout his life. 

I’ll just read you the last paragraph In the end, Zach’s story became a testament to the power of loyalty. His unwavering commitment to his loved ones, his friends and his community created a ripple effect fostering a culture of trust and support. In Denver. Zach Edelman, the man whose loyalty knew no bounds, left an indelible mark on the city in the hearts of those who knew him, reminding everyone that loyalty is not just a word, but a way of life. 

Speaker 4

Well, I think I just found my new brand and if we’re going off of Loretta was talking about, I mean, I think I’ve got some brand loyalists behind me. They like the way I treat them and I’m taking over the bustling city of Denver. 

Loretta

They’re picking up what we’re putting down. 

Spencer

I have to read one more thing here. Once upon a time in a whimsical land, there lives a remarkable woman named Loretta. What set Loretta apart from others when not just her captivating personality, but also her extraordinary feet of 17 feet tall. Despite her towering stature, Loretta embraced her uniqueness and radiated confidence wherever she went. So yeah, so there you go. That didn’t have anything to do with the loyalty, but I put it in there. 

Speaker 3

I’m, I’m very curious what you put in there. 

Spencer

Okay. I’ll tell you, tell me a story about a woman named Loretta who thinks loyalty is really cool also. She’s 17 feet tall. Okay. 

Loretta

Relevant to the context. Yeah, 

Spencer

For sure. Yeah, very relevant. It’s actually 

Loretta

The one thing when people meet me in person, they always say I’m shorter than they expect. And I take that as a compliment. I think, 

Spencer

Oh, okay, I don’t know, you know, when you like don’t see PE meet people in person for a while and then it’s, the conversation is like, oh, you’re taller than I thought or shorter. Then I thought that that tends to be on, on the shorter side of their expectations. 

I always get, wow, you’re way shorter than I thought. Thanks for saying that out loud, really. Thank you. Great. I really appreciate that. Short people power. Woo. Listen, you just gotta own being a short king, you know, that’s what I’ve learned in this life. All right, question number two, what does loyalty mean in the grand scheme of retention? All 

Zach

Right, I, I will give the the business answer and I know Loretta’s gonna fluff this up, which is, which is great. It’s exactly what we want. Let’s make it out. So we, we think about loyalty and, and how it really goes into retention. Like who we’re working with. They, they wanna know am I gonna get an ROI, what are the business impacts that this investment into a loyalty platform, into the strategy, into new creative that we need to develop. What is it all gonna equate to? Am I gonna retain my customers? And you know, those metrics might change a little bit based on what the economic conditions that we’re in right now. 

But at the end of the day, and the way we view this with loyalty is probably the way they should be doing everything else they’re doing from a marketing investment perspective. If they’re putting the time into creating personalized experiences, having meaningful offers that people care about, putting out incentives and some of those that actually are financial, like that should always equate to a higher customer lifetime value. 

That’s going to absolutely be putting out more new user acquisition. We should be lowering churn of our existing customers. That’s extremely important right now as it’s never been harder to acquire new customers. How can we make sure that the customers we do have are not leaving? Those are the big things that we see with, with loyalty programs, the ROI and and what it really equates to from a retention standpoint. 

Loretta

Yeah, I think loyalty is really all about securing advocacy and helping to grow your brand. So the reason that you want a loyalty program or you even think about a loyalty strategy is because you want to make it easy to let your best customers share their love for your brand. And that’s how you’re going to grow. And through the process of creating a loyalty strategy, you often learn a lot about your customers. You can really personify who they are and what they care about and then bring that back to the broader customer base, the people who are maybe not even your customers yet, and help to bring them into your world by showing them what a good experience can look like and who it’s really working for. 

Is that fluffy enough? 

Spencer

Super fluffy, Super fluffy, okay. It always goes back to the ROI. That’s why brands are going to invest. That’s why any CEO or CMO is going to approve your plan to launch a loyalty program. It’s about the ROI that you’re bringing to the bottom line and it’s the numbers in the spreadsheet that will make the story clear. 

How can loyalty actually be achieved? Like what are some of the things that brands should be thinking about, especially right now as Zach pointed out, you know, during this not recession, whatever we’re calling it, you know, like what are, what are some of the ways that we can, we can achieve like true loyalty from from customers? Yeah, I 

Loretta

Think it’s grounding in your goal and where you need to make the most progress and the customer’s true mental state at that time. And I think when I think about personalization, it’s like meeting people where they are. If you’re trying to get somebody from their first purchase to a second purchase, it’s not about tricking them into making that purchase, but it’s about understanding what’s could be going right, but also what could be going wrong at that stage. And there’s a true education component that I think goes into a strategy that is tailored towards getting your trials to make their second purchase versus somebody who’s already on their fifth or sixth purchase with you. 

So I think it’s really like being precise about your goals in the beginning so that you’re not trying to boil the ocean with a program that does everything for everyone, but really honing in on what do we want out of this? Why do we think that’s our our biggest bet? Or why do we need to focus on that? And then come up with a structure that makes it really simple to engage and gives people not just the incentives, but also the information that they need at every step to get them to the point of reaching your goal. 

Zach

Yeah, I think this is where a lot of the, like the human psychology comes into marketing, but, but yeah, definitely more specifically loyalty. Like we, we really have to listen to what people want and understand what’s gonna motivate them to take the response that the company that’s building out the loyalty program multiple new needs. So like where do we start from that? Like we work backwards, we know what our company goals are, we know what our, our customers want, then we’ve gotta understand where that data lives. So we’ve, we’re probably sitting on a good amount of it. 

Maybe we need to go get some more. Maybe it’s pretty messy and maybe it’s across the org. This is where like the Ragnarok team comes in and helps and tries to really create a strategy around it, cleans it up. We start getting segments here, really thinking about more segmentation that leads that personalization. And I think it’s, it’s a lot of testing and iterating. I think people’s behaviors and preferences changed, especially with the pandemic. Like the incentives that maybe got us before have changed. Let’s think about it from a company benefits or perks perspective. What people wanted before was when they were in the office, you know, free food, the big four tech companies we’re offering dry cleaning and childcare support services. 

Well now that we’re working at home, that’s changed. Now we, we want more flex time off. So these benefits we think about from a work perspective, you know, I think they translate to a loyalty perspective with us as consumers and what we want. I think that’s gonna constantly change. And I think a lot of us want more like experiential pick of, of rewards. Sometimes I want to go have like a nice out and get outside of out of my house, maybe not just another $5 coupon to buy something online. So I think that’s, that’s an interesting angle too of, of how do we actually achieve loyalty in different ways that mean different things to different people. 

Spencer

I mean even though I’m working remotely now, I I, I still like free food and free childcare and you know, dry cleaning. So if there’s, you know, someone can come over and do all that for me, that’d be great. 

Zach

Yeah, I’m not gonna complain about that either. 

Spencer

So, you know, we’ve talked about some of the strategies to achieve this. Oh, on the opposite side, what are some of the common pitfalls? Like what are some things that you might recommend not doing or some missteps that you’ve seen? Yeah, 

Zach

I think the, the big first glaring red light linking signal we see is a lot of companies take the copycat approach and they say, I’m gonna go do it, my competitor does. But they’re not basing that decision off of any data. It’s a lot of pie in the sky thinking and it’s a very emotional response. So I think you have to have the data to back up what you’re doing. Loretta was talking about this with, you’ve gotta make sure the campaigns and the strategy you’re putting forth ultimately align with what’s feasible from a business perspective. And no’s gotta match up with what the business ultimately wants to achieve. 

And the second half of that, which is just as crucial, if not more crucial, is that the customers have to actually care about it. We’ve gotta give them things based on the data we do have. We know about them, what their past purchase history is, what their likeliness to to purchase something else in the future is. We’ve gotta use that at our advantage. So I think a lot of companies are making decisions not, not data backed, and that needs to change. Talked a little bit about this before, like the, the incentive has to be meaningful, has to be special. This is where the fluffy stuff comes in. Like I, I wanna feel like I’m part of something bigger, the community or I’m part of the mission that the company has and I wanna have an incentive that that adds to that experience. 

And if you’re not doing that and it’s pretty meaningless and it’s not personalized and everybody else is getting the same incentive for taking the action that’s, that’s probably not gonna go down the right path. Those are the two big common pitfalls that I see. 

Loretta

Yeah, I think Zach, what you just mentioned, I’ve seen companies really undervalue certain perks or certain reward that customers would really enjoy but you don’t think that it’s something that they would want. So something I’ve seen really work well for brands is having the ability to give input into what the brand is doing next. So being an ambassador in some form, being a product tester, testing things before they come out. I think when you’re kind of in-house sometimes you don’t think it’s as exciting as it is to a customer, but being able to give your input in the direction of a brand that you really believe in that you’re putting your your dollars towards. 

I’ve seen fear really like motivating perk in a loyalty program structure. So that’s something I think that brands, like you were saying, they kind of can not think about all the assets that they have available and can be a bit too cookie cutter sometimes in the way that they launch their programs when really it should be unique, it should be your own because you’re talking to your customers. It’s not the the population at large here. And then I think the other thing that I’ve seen as a pitfall is just kind of making the program too complicated. So just making sure that you don’t need a calculator to figure out how many, how to redeem your points and just kind of having some messaging around the program that helps to keep people focused on the next thing and understanding where they’re on the journey versus needing to understand 10 different layers to know how to get value out of the program. 

Zach

Yeah, that’s a really good point. I think simplicity is key, especially as it gets more complex and there’s different tiering systems or challenges as you have to hit that I think confuses consumers. But think about the companies that have to manage this, like the technology and the backend, all these different rule sets that they’re creating, like that can become a mess. And then the execution of these campaigns when the consumer actually gets it just completely falls apart and it actually ruins the brand experience compared to actually helping out the customer and trying to be, make them more loyal. 

So you have to be smart about it, but simple that it doesn’t ruin the customer experience with what you’re trying to create. 

Loretta

A hundred percent. Bringing it back to like each of us, could each of you and I and I’ll go to, is there a brand that you’re loyal to and and why? Ooh, 

That’s a good question. I mean this is going to sound lame, but I really appreciate the way that Amazon predicts what I need. Even the little icon waving at me when I log in sometimes like those little like surprise and delight moments really go a long way. If you’re reminding me that I need to order vitamins for my kids, again, that’s not something that’s top of mind every second. So those little proactive nudges are something that, especially as a busy parent I need in my life. And even though Amazon is a huge company and we like kind of love to hate them in a lot of ways, I think in terms of customer experience, they have my loyalty because I feel like I’m continuing to unlock benefits of my prime membership and they’re just really proactive about reminding me of things that are actually useful to, to my day-to-Day, 

Spencer

Amazon is the the devil you need. And when you were like, I love Amazon as a brand and Jeff Bezos is just sitting there like, yes, yes you do. 

Zach

And he’s probably listening too right now. 

Spencer

Yes, he’s listening. We haven’t even published this yet and he’s listening right now. Yeah, 

Zach

There’s an Alexa device spying on us, we all know it, 

Loretta

But you know, I work with a lot of startup brands and it’s really important to, as a new brand, be aware of what you’re competing with. So there is an element of just kind of cutting through with the fluffy stuff as a new brand. That’s why I think it’s really important for new brands to like have a founder who’s very forward because people can easily get what they need off of Amazon, right? It’s like that day and age, but if they’re choosing to purchase from you, it’s that extra step and you’re, you need to tell your story to make it worth it for them. So that’s a lot of early stage brands and getting them on the charts is helping them to tell their stories and connect with customers and build loyalty in a way that creates that connection more than Amazon. 

I guess I’m talking on both sides of my mouth here a bit. 

Spencer

And Zach, what about you? Like what’s what, do you have a brand that you’re particularly loyal to or just admire? 

Zach

Yeah, I, I live in Denver, Colorado. Someone an outdoorsy matton man that didn’t come up in the chat GPT read out on me, but I am loyal to the outdoors. So REI is is one of my favorite brands. chainless Plug, they also happen to be a talent one customer, but I think they do a really unique way of creating customer loyalty. And some of it’s actually kind of personal buy-in from the consumer. So to be a part of their co-op program, you actually pay them. So you pay them a one-time lifetime membership fee of 30 bucks. So that’s pretty different than most loyalty programs out there. But I think you get a lot of value and benefit from that. 

Obviously like free shipping is a nice perk. You get some access to some membership only deals, which I think is nice, but it’s so addictive when I check my mail, my snail mail and I get my member dividend back at the end of the year ’cause I’m maybe getting 10% back on all of my purchases that I make on regular price items throughout the year. So when I get that dividend at the end of the year, like I’m giddy to go back online and see what I’m gonna buy or I’m gonna go back in store and it always is timed perfectly for camping season so they know exactly what they’re doing. They want you to go take that dividend and put it out on a five or $600 tent. 

So it’s really smart what they’re doing. So I think it’s a unique program from that perspective. Those are some nice benefits, but I think it also aligns not only with like with my values, but a lot of their other members’ values about how they give back when you sign up to be a member. Some of the money that’s in that $30 fee goes to, they are fun. They’ve got a public charity that, you know, promotes justice and equity and outdoor education and things like that. So I think that like, that’s one of those more fluffy benefits that we get from, from actually investing into a partnership from a loyalty perspective with the brand. 

The other thing is just like with breed services and repairs on items that you get there, it’s just a nice ad, you know, not every retailer does that. You actually kind of feel like you’re part of like the REI family, not just a regular customer who’s spending ungodly amounts of money on hiking backpack, hiking shoes, low cut socks for dress shoes and whatnot. 

Spencer

Yeah, I’m a, I’m an REI co-op member myself, so I understand, you know, in lieu of talking about, actually, you know what, I’ll just say a brand that I really am loyal to is, I dunno if we could see this here is Nike. 

I know it’s like kind of a big one, but I’m actually flatfooted and their shoes actually fit in my feet and they have like a, a lifestyle they call it like line or or type, they tend to be flat-footed. And so like a lot of the other brands are sort of for people who actually have arches in their feet and I appreciate that they have like this, this option and then like they have an app where you can get special discounts, you can actually make your own shoes and they’re, the quality is great. Like I’ll drop a lot of money on an individual pair of Nikes, but whether or not you want to just admire it and wear it once or wear it every day, like I have one that I, I bought during the pandemic and I’ve worn them for hundreds of days over the past three years and they still look great. 

So the, it’s really just a great quality product, which for me is really important. I, I wanna, I want to quickly harken back before we start to wrap up here to a quote from Zach, which was, Zach said that he’s an outdoorsy mountain man and I asked chat GPT is Zach an outdoorsy mountain man? And you know what? Chat GBTT actually agreed with me. Yes, Zach is indeed an outdoorsy mountain man living in Denver, surrounded by the breathtaking beauty of the Rocky Mountains. Zach has developed a deep love and appreciation for nature. He finds solace and inspiration in the great outdoors and he seeks every opportunity to immerse himself in its splendor. 

Sounds pretty accurate to me. 

Zach

It’s pretty good. Pretty good. This is where I seek out an endorsement deal from REI and they do like a customer stories podcast and they, we just generate everything through chat GPT. It’ll be perfect. 

Spencer

Well, I mean, it said, if you ever find yourself in Denver and in need of a guide to explore the wonders of the Rocky Mountains look no further than Zach Edelman, the epitome of an outdoorsy mountain man who is always ready to embrace the beauty and challenges of nature’s playground. 

Wow, that’s a, that’s quite an endorsement there. Alright, so, you know, we gotta start wrapping up, but, you know, quick, quick bites from both of you guys for, for those listening out there and is ready to start a loyalty program, especially now when it’s really important, what’s the thing that they should do first? 

Zach

I think you start with the why. Like why are, why are you doing this in the first place? What are you trying to optimize from a business perspective? Or, you know, maybe your, your margins and your growth pretty good. Maybe you’re really trying to surprise and delight customers. Maybe your, your social reputation’s taken a hit for some reason. Maybe something that happened around, you know, revolving around your brand and maybe you really just need to get more of that positive sentiment back. So I think about that obviously if we, if we’re talking about how do we increase revenue, increase margin costs, decrease customer acquisition costs, those are other big reasons of why you should be thinking about a loyalty program. 

It’s really difficult to get net new customers right now. It’s expensive. There’s a lot of eyeballs that they’re all being chased by from all these different brands. So I would start with the why. Then you figure out the how, the how with the help of smart competent tech companies and partners like Ragnarok. They’re gonna help you figure out the how and you really take that crawl, walk, run mentality testing and iterating. And that’s where talent one can come in and help. You know, as you’re kind of evolving on that journey. But if you start with the why, then you go to the how I think you’re on something and you can really figure out what’s meaningful for your customers, what’s gonna help them take the next step and help you move the needle from a business perspective. 

Loretta

Yeah, I think the why and the how for sure. And also the who. So I think if you haven’t already sit in a room with your customers, like actually connect with them, do some research, like really understand what they need. There’s a lot of internal bias around like what your customers might want that you can cut through very quickly simply by talking to them and doing it in a structured way so that you kind of go into building your strategy with the clear mind about like what your customer actually caress about. 

Spencer

Couldn’t have said it better myself. Literally, I couldn’t have. Zach, thanks for joining us today. Loretta, thank you for being a great co-host and very importantly thanks to all those listening and watching if you happen to be watching now, that’s an option. Also, I wanna thank Sale and Kat for putting all this together. You can’t see her, but Salem’s over there in our last podcast, I want her to do a, a break dance, but she wouldn’t do it. So I was a little disappointed. But it’s okay. You know, for everyone out there, if you haven’t already, please visit our website, ragnarok marketing.com, figure out how Ragnarok can help you. 

Also check out Talent one if you are looking to start up a loyalty program, and don’t forget to do all the social actions, like, and click and share and back, back cartwheel and all the other things. Do it. Awesome. Thank you.