Are Customers Relevant?

CRMC 2015 highlights the “special sauce” that makes retailers and loyalty programs truly relevant.   

For the fifth straight year, we spent the first week of June in Chicago with some of our clients, partners and friends among the leading retail marketers talking loyalty, technology and Big Data. This year’s CRMC conference included a lot of the expected, ongoing discussion about marketing “journeys” and loyalty programs. A few speakers also called for true brand experiences that go beyond the program, something we have been saying for years. Similarly, we heard that while data is important, what we do with it, guided by the company’s brand and culture that’s tied to the customer’s emotion, is the “secret sauce”. It makes the difference between driving true loyalty vs. just another interaction or transaction. We couldn’t agree more! 

Our CEO, Phil Rubin, and our long time client, Kimpton Hotels & Restaurants, represented by Maggie Lang, embraced this in full, talking about the importance of Big Data − especially when a company’s culture allows it be used in little, personal and unexpected ways. The Kimpton customer experience continues to be superior because it’s fueled by Kimpton Karma loyalty activity data. The experience isn’t “programmed”, rather it’s the Kimpton culture that transforms the data into unique guest experiences like balloons and cake to celebrate a Karma member’s first Inner Circle stay.   

More highlights included:

  • Starbuck’s Aimee Johnson kicked off CRMC with a showcase of how My Starbucks Rewards fuels its business. Aimee shared some nice data points:
    • Members spend 3x non-members, comprising 39% of transactions with 8MM being made on the app each year. 
    • Starbucks’ “1:1 marketing” has grown 5x since 2012, fueled by MSR data. Yet Starbucks continues to be deliberate in how it uses data to make sure it’s “special sauce” isn’t over-engineered: for example, using data to fuel cross-sell training, and keeping the barista/ customer script and relationship organic.
  • Erik Medina from the Futures Group highlighted our next generation of buyers, Centennials. He noted that:
    • 68% of Centennials are worried about their future, but are willing to work toward that future. 60% would rather have a guarantee of not being poor, than the possibility of being rich. 
    • They are rooted in individuality, comfortable with differences in their peers, and looking for tailored clothes, experiences, products, etc. that fit them. 
    • They are problem solvers, who will leave your brand silently when friction hits, with no mention or second chances.
  • Eric Messerschmidt from Ulta Beauty showcased a loyalty environment to be envied: 
    • 20% YoY growth, a loyalty program that fuels relationship marketing and clienteling
    • 30% growth in opt-in last year alone; yet, Ulta’s email volume only grew 2% as they worked patiently to send fewer, smarter emails that generated the same, if not more, return. 
  • Gap’s Cari Roberts spoke about weaning from Gap discounts, and at the same time making the discounts they have more tightly tied to the brand. Gap’s 2014 Holiday Sweeps gave customers a chance to win one of 100 trips, inspired by their holiday clothes collection. It’s a well-branded sweepstakes if you stop there; however, they also integrated Sweeps trivia contests for customers as they stood in long holiday lines, for extra entries. 

It’s not surprising that our industry and clients are making progress. We have no choice, just as CMOs have no choice, but to deliver organic growth. This doesn’t come from advertising. It comes from customers. As much as we are making progress, too much of CRMC still covered the same discussions about data challenges, integration, omni-channel marketing and, of course, mobile. There are some things we still don’t hear enough about: the importance of being relevant to customers, doing less push and more pull. Too many brands are still “targeting” – aiming at customers – rather than bringing customers into the conversation. Ultimately, customer loyalty comes not from the customer, but from the other way around: brands being loyal to customers.

What do you think?