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Sorted Magazine: How data enhances the customer experience

Bryan Pearson speaks about the crucial role data plays in enhancing the customer experience.

As president and CEO of LoyaltyOne, Bryan Pearson oversees one of the world’s most successful loyalty programs, AIR MILES. He is also the author of the bestselling book The Loyalty Leap – Turning Customer Information into Customer Intimacy.

S: There seems be a nice symbiosis between loyalty programs such as AIR MILES and direct mail. Why is that?
BP: It’s evolving, and the reason it’s evolving is businesses are trying to figure out how to connect with the consumer and build some form of relationship so they will share that information. It’s a great platform not only to get that information sharing happening, but also for sharing a dialogue back and forth with a consumer. Different consumers want to be communicated to via different channels. Some of them are going to prefer direct mail, some are going to prefer email. Certain things just work better from a direct mail environment.

S: Relevance is increasingly becoming a key marketing battleground. What role does data play in distinguish- ing the combatants?
BP: Database marketing, customer management, CRM, at their root they’re all about the same thing – leveraging what you know about the customer to create a better experience for that customer. Companies compete on three things: efficiency, innovation and customer intimacy. Walmart is the poster child for efficiency, and a lot of people argue that Apple is the poster child for innovation. There’s only going to be one Apple and one Walmart, so while you can’t be a complete laggard in efficiency and innovation, the vast majority of companies are going to have to compete on customer intimacy or service – enhancing the experience they provide. Customer information is critical to fulfilling that promise.

S: Consumers still complain of being bombarded with marketing that doesn’t matter to them – why is this?
BP: Our research showed that almost two thirds of consumers said that they expected organizations would do more to create relevant communications with the information that they’re sharing. The vast majority of consumers are aware that information is being collected on them and are underwhelmed by the way companies are utilizing it to create relevant communications pertaining to the products and services they use. A good example is the grocery store environment. A consumer goes in and buys hundreds of different items, and yet what happens when the flyer is stuffed into your mailbox? It’s a generic view of what they think should be on sale and how those products are going to be priced.

S: How can direct mail transform that approach?
BP: One of the best examples of where you see relevance being articulated through the mail is through the programs we run through our grocery store partners, where we’re working with them to identify the categories and products consumers buy in-store and create targeted direct mail pieces where the consumer is receiving one-to-one communication. It’s not one-to- one because it’s tailored and customized, reflecting that you’re shopping at one store uptown versus another store downtown. It’s customized, because the product offers are reflective of the products you are buying in store – the way you interact with the grocery store. The way we think about marketing is you start with who you’re going to target, the products and services that will most likely cause them to pay attention to the material that comes through the mail, and lastly what is the kind of offer response history that they’ve had – which will tailor whether you give somebody double points or whether you have to give them $3 off.

S: So you’re able to determine the different trigger points for different customers?
BP: It’s not without its complexities, but you can get a lot more targeted and a lot more specific than the efforts most companies are putting out there. A lot of people are don`t realize that through selective lasering technology for print, and the ability for databases to be scored and offers prioritized that these mass efforts are in effect one-to-one executions – these approaches are entirely within the grasp of many companies.

S: How is direct mail positioned within the current advertising hierarchy?
BP: I was at a conference where somebody from Starbucks stood up and said that one of the pieces in their marketing arsenal that gets the most positive feedback is a postcard sent out to their customers. That’s about as old school as you can get, but her comment was that it’s almost retro – there’s so little in your mailbox compared to what might have been there 10 or 15 years ago given the advent of email and mobile and social marketing, that when you send something through the mail there’s an added level of cache or recognition associated with it. The mailbox is almost becoming virgin territory again because everything’s shifted to lower cost or what is perceived to be a more flexible environment. I believe that if you’re doing email, the cost of direct mail might be higher, but the impact of sending something through the mail would be disproportionately higher. In most instances, if we want to maximize response rates, we’re using a multi-channel approach. We’re using mass media for awareness, although less and less, but we’re definitely using a combination of digital channels and digital print – and I use that word specifically because it is about target, not mass – marketing through the mail.

S: It’s almost like direct remains the workhorse of marketing.
BP: I think it’s still highly relevant for a lot of consumers. There’s a tactile component to having something that’s paper arrive in the mail – whether it’s a reminder or recognition and when you look at the relative response rates to similar offers, mail performs extremely well.

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