In this episode of Market Movers, Jeff Herrera, CMO of Annex Cloud and Jason Asher, VP of Commerce, discuss the rapid shift to digital that many brands had to make due to the effect of Covid-19 and the challenges of doing so along the way.
Jason, how are you? It's great to see you. Thanks so much for joining us. How are you today? You doing okay?
Good. Yeah, Jeff. I'm doing phenomenal, never better.
Thank you for having me and really looking forward to our discussion today.
Yeah. It's going to be fun. We're talking about things that we do every minute of the day. So I want to make sure that we provide some good insight for brands and manufacturers and retailers. And that's the whole point of Market Movers, right? We put this together to get out in front of this crazy 2020 year and start talking about some of the things that are happening. And try and provide some really good insights in terms of how businesses should pivot in terms of this 2020 year and more importantly, how do they set themselves up for success once the recovery starts? And we all know it's going to happen, it's just a matter of the right time in 2021, right? God willing, we'll get there.
So let's kick this off and talk a little bit about the customer experience, customer engagement in this fast acceleration to digital. And that's your world, right? Kodella, one of the best in the business in providing services support to clients and prospects. Talk a little bit about what you've seen in this year related to how fast people have had to get online, and then also have the right experience to keep them engaged and keep them attached to brands. I'd love to get your thoughts on that and how you're assisting clients and prospects with that.
Absolutely. Yeah. Jeff, thank you. Thank you. So at Kodella what we've seen a lot in terms of the first part of your question about how quickly brands need to move. We've come across a lot of different prospects I think in the beginning of the pandemic who were hybrid on-prem and in the cloud, and they rapidly needed to shift to cloud in order to just have the simplicity of remote working. And then with the simplicity of that remote working, then they're kind of reestablishing the operational narrative. So that everything that you pointed out in your first comments about how brands are going to pivot and adapt, it really begins in the back office. Many times it kind of settled down those operations. So we've seen quite a few customers, recent signings who have needed to pivot quickly. And whereas in our world, the operationalizing of everything that you've said begins and ends with data. And it begins and ends with how well that data is structured and then how it moves into an ERP. And then how the ERP drives a user experience within a digital context.
So we've seen that a lot, and we've seen a lot of brands who have kind of gone with these technology platforms for 10 to 20 years, all of a sudden wake up and go, "Oh my gosh, I really have to make a move now." And then strategically many, many times we do a reset on the user experience of the website. By a reset, meaning coming to the prospect with a templated conversion experience. And then having that dictate the kind of new world of the customer experience to business experience and the overall kind of UX around the brand, to create a baseline of gathering data. Then from that baseline of gathering data, working with these companies, sometimes on a weekly basis. Reviewing behaviors to quickly make changes with existing tools within CMS systems that we currently have in NetSuite and e-Spirit and other vendors that we deal with.
So that's really what we've seen a lot. And I think the one lesson learned, at least over our time at Kodella. And I think in prior roles in our careers, is that it's wonderful to be able to talk about digital adoption, getting into the cloud quickly, pivoting to a commerce strategy. But the bottom line is to operationalize the real value of that user experience. Again, we pay so much attention to detail when it comes to the structure of data because a lot of times that is the critical path to really achieve a great user experience.
Yeah. No question about it. And those kinds of conversations that you've had with clients and prospects, and through your account directors or even yourself or somebody on the team. Are you seeing more in terms of taking advantage of the various channels very specifically like social, right? Social. What does a social channel now mean to really engage customers, right? It's an opportunity, right? Because we don't have the physical store presence, like we used to. You want to go to your local restaurant, you have to sort of do curbside pickup or go eat in the parking lot.
Right. Which is always very decadent. It's always very decadent.
Exactly, right? It's crazy, right?
Exactly. So I'm just curious to see what you've seen in terms of, what are some of the social elements that are now an opportunity, right? Or now an opportunity for brands to relate to now.
Right. I think that the way I want to answer your question is giving a bit of historical context in order to operationalize the answer or the result, if you will. I think that right now I could say that a lot of brands come to us and are like, "We want to do social." It's great, what is it that you're going to do? And I think what the internet did to retail was bringing out the introvert in all of us and enable us to really hide in our selves in a way. And I think that Annex Cloud does for the world is enable that to go away a bit. And I think one of the great things that Annex Cloud has done for the last 10 years and more, from a social standpoint is give brands a baseline workflow of behaviors that they need to operationalize against their brand.
And the one example that I could give, I think that would really articulate what we're seeing is that, ever since I was a child, my grandfather, my father, even my great, great grandfather, all owned menswear stores. I'm the first one of four generations not to own one yet. And I joke around about that because eventually it's probably going to happen. My grandfather, may he rest in peace. He taught me people. And he would stand in his store and I would be five, six years old. He'd be like, "Jason, look. You see that guy? That's so-and-so, he lives on Avenue S and Flatbush. I've known his family for years. Here are the type of shirts that he likes to buy, the pants. Here's what his wife likes in terms of cuff links. I know what kind of ties he likes." So my grandfather knew when he called over the sales person to help that customer, there was a certain level of knowledge there that Grandpa knew about, right?
And when you look at the state of retail today, what the 1980s and '90s did to retail was destroy the context of really knowing who your customer is, where they come from, what their struggles are. How to position them to buy something that's going to help them become successful. And when you're dealing with menswear, it was a lot about get me a suit for an interview, get me a suit for this special occasion, get me a suit because I have a big deal to close, and I want to look like I belong there.
And there are brands who are very, very dialed into that because it's part of their core, pre 1990s, if you will. But I think a lot of what happens today is that there's a disconnect between understanding the context of why that person came to your store. Whether it's a physical store or an online store and the result that they need. And again, one of the great things that Annex Cloud does for the world is that they enable the stores, when the right integration is done and the right concepts are applied to an Annex Cloud type platform, all of that gets to be operationalized.
So going back to your original question, how are companies actually dealing with this? Well, the truth is that they're not. They know that they need a mechanism to drive an interaction, but in terms of having the strategy around that interaction to really have a net result of a sale, or have a net result of getting a new customer on board. That's where we at Kodella kind of fit in with our strategic approach, and where we bring in third party strategy agencies, if you will. To help operationalize the approach.
So I think as a digital transformation happens, it's kind of waking up a sleeping lion, whereas they're like, "Wow, we have to do this, we have to do that." And it's like, "Well then, what's your plan?" "We don't have one, can you help us?" And that's usually where we'll call Annex Cloud to come in, to show what you can do. We'll tell them what our approaches would be to your market. We'll make those associations and then have a baseline to move forward. But I think that what we are seeing today in a lot of companies that need to pivot, is that they know that the need is there and then strategically we're there to help them. But there's a very big disconnect right now between the brand really knowing their customer and knowing how to approach social. That's really where we're seeing the most disconnect and again, where platforms like Facebook and Twitter and used with the loyalty platform really deliver a ton of value. Because you really give them direction on the what, where and how, but most of all in the why.
Once that establishes, a strategy occurs. Once that baseline strategy is established, then the value is delivered. But the notion that during this time of a pandemic, during this time of need to change. The need is there, but there's still a lot of work to do on the backend when it comes to the strategy and operationalizing. So it actually delivers value for the end customer.
Yeah. You touched on something that I thought was really compelling. You talked about kind of the emotional, right? There's an emotional play. And I love your family example, with menswear. That's what we're talking about in terms of engaging the right brands and having the right experiences. And that's where we talk about having a laser focus on customer retention, not just on the transaction. The transaction is critically important, but that's not going to give you the loyalty connection that you need and want for your customer base. So let's hit on that for a second, because I think that's really important.
So we've been talking a lot about, we think loyalty and customer retention should always be a core strategic focus. And we're seeing more of that, right? We're seeing more of that now than ever before. And I think that's largely due because the pandemic, right? So like for example, Gartner did a 2020, 2021 CMO spend survey. And their top eight finding, the number five in their top eight finding was, existing customers drive recovery strategies, right? So it's not just us, right? It's not just Gartner and the analyst talking about this. This is really important elements to engaging your most valuable and profitable customers emotionally. So we've been talking about it, right? We have the analysts talk about that. But in terms of how you guys are perceiving customer retention and using it as a platform of, hey, this is your fastest path to recovery through this global pandemic, right? What are your sort of experiences in making sure that brands and retailers and manufacturers and your clients and prospects, really understand? And are they embracing it now more than ever? Have you seen that with some of your clients and prospects too? I'm sure it's not where we all want it to be.
It's not, it's not. Yeah. Let's start there, Jeff. Yeah. It's not. I don't think it's where we want it to be. And a lot of times, as the experts in the room, I think one of the things that we're really working on at Kodella, that we're getting better at, is that we come to the table knowing about the Gartner reports that you just referenced. Knowing that the core customer base and your highest spending customers, if you will, highest profitable customers are the ones who are going to lead the recovery. So it was like we come to the table knowing that, and we come to the table knowing the historical context of the pandemic. How this has happened multiple times over the course of human history. How economies, whether it's in America, it's in Europe, it's an Asia, it's in South America or whatnot. Have all bounced back from this multiple times in human history.
So when you approach it with that historical context, you could add a layer of calmness to the disruptive nature of what your client's going through. So I think that the first way to solve the problem is to really get the customer or the client into a mindset that it's going to be okay. We have a plan here of how to engage or the why of engaging. And now with doing that, let's look at what you have in your existing digital infrastructure, and how we can take that existing digital infrastructure and create more personalized experiences for your most highly profitable customers to make them feel good. To make them feel that they're part of the family. But also how are we going to deliver value to them, especially if you're not an essential brand or you haven't been deemed an essential product. What is it that we can do to help you become that essential product or had that notion planted in your customer's minds? That, okay, fine. If you're a camera company, if you're a clothing company, if you're home goods or sporting goods or this, that, or the other thing. And you're an edge case right not. According to all these analyst reports and everything that we're learning about the market, how do you get back? What can you do?
So I think getting back to your points earlier, when you look at loyalty and retention, and you'll look at what feature functions you have available within your existing platforms. And how you can make a strategic connection between personalizing and getting stories and context around that infrastructure. Marry that with the loyalty and social strategies, and then building almost a mini economy around that, if you will, strategically. That's really the how of how we're guiding our customers and how we're seeing this come to life.
So for example, one of our customers Peak Design. They decided that they're going to start to get products to market quicker. They're going to focus on imagery that's more about the product. It's more about how it helps and not so much these kind of aspirational lifestyle images of people walking around with their camera bags all over the world. Now it's more about how we can have contests, engaging with Instagram, engaging with Facebook. How those are contests are going to drive more engagement. For customers who are currently in build with us and going through the whole digital transformation thing, even prior to go live, right? How are we using these social channels to get more engagement, to get the word out there, to make the whole buying experience come to life with that level of engagement?
So I think that over time, I think brands are going to get a lot better at it. I think as the experts in the room, we have to remain patient. And we have to really not only remain patient, but just have just ultimate ear so that we can really listen well. And just know when is the inflection point that we can disperse the expertise so that the value is delivered. So it's an extremely complex situation, no matter how you wire it together. But we are seeing the adoption of these strategies and we are starting to see some pretty cool outcomes.
Awesome. I know we're running short on time. So let me just try and wrap this up with just a couple of key touch points on kind of market trends that we're seeing, right? So obviously the US economy suffered almost a 33% contraction in Q2. Unprecedented over the last 50 years, it's the worst ever that we've seen. You know about the unemployment situation here in the US, there's a strain on disposable income. But I think with the right focus, with your expertise on the services side, our expertise tied to the actual product and delivering that experiential, customer engaging, loyalty platform, that's not transactional. That's really tied into all of the things that are meaningful for a brand in order to maintain that relationship throughout the customer journey. In order to retain those most valuable and profitable customers. It's not like there's a ton of money out there for brands and retailers to go spend and acquire a bunch of new customers, right? That's not the right time to be doing this. There's going to be a time to do that, hopefully in 2021. But I think what we're saying is that given the current economic conditions and the right experiential reward/loyalty program tied to retaining your most valuable customers. That is probably the most prudent way to set yourself up for the recovery. Fair to say?
Yeah. Yeah. And in future, to your points earlier about eating in the parking lot. I think that if we go back to what you said before, rewarding your existing customer base for doing buy online, pick up at curbside. You're giving them extra points for telling the merchant, "You'll put this in my trunk, put it in my front seat. Wear a mask when you come see me." Using these programs, again, to do non-transactional things like reward the customers for following CDC guidelines. Or just behaving in certain ways. That is where ultimately your comments really come to life and where the loyalty notions and the loyalty programs could really deliver a ton of value. Because if you're going to get points and get rewarded for behaving correctly, and you're going to get rewarded for just being a great citizen. Once everything else opens up, it's like, oh brand so-and-so gave me 10,000 points because all I did was wear a mask and tell them, "Please put the bags in my trunk." And now I'm going to come back here. They looked out for me during a really critical time. And you know what? Now I'm going to return the favor and I'm going to remain loyal to them. So, yeah. I think there's definitely a bi-directional relationship here.
That's for sure.
And again, loyalty platforms fill the gap tremendously and deliver a lot of value in the process.
Awesome. Jason, thanks so much for your time, your expertise. All the great things that Kodella does for providing the services connected to ERP integration, and working with us and having our integration work very seamlessly across the board with these clients and prospects. It means the world and certainly drives the right amount of efficiencies, customer retention and loyalty. So thank you so much. And people can find you on LinkedIn, right? Easy. Because you're very accessible. Is that the right way?
LinkedIn is the best way. Wherever I am in the world, LinkedIn is the best way.
Awesome. Thanks so much for your time. Much appreciated. Let's do it again, Jason. Thanks. Take care.
Thank you, Jeff. Be well, take care. Be safe.
CMO, Annex Cloud
VP of Commerce, Kodella
Since 2010, Annex Cloud has provided industry leading loyalty solutions to more than 250 leading brands and retailers, including Jenni Kayne, Hewlett-Packard, Bed Bath & Beyond, e.l.f. Cosmetics, Olympus, Sugarfina, Mizuno, MacKenzie-Childs, VF Corp., with the ability to engage tens of millions of their customers one-to-one at scale.
The Annex Cloud platform provides fully integrated Customer Loyalty, Referral Marketing, and User Generated Content (UGC) solutions that seamlessly work together to optimize the customer journey and deliver a unified customer experience that is designed to accelerate revenue growth, retain valuable customers, increase average order values (AOV) and drive repeat order frequency.
Kodella is a software consulting firm with expertise in all things NetSuite, SaaS, and eCommerce. With over 35 years of collective experience, Kodella knows what it takes to deliver a complete ERP solution tailored to any business's needs. Our team stands ready to propel, manage, and optimize your business with NetSuite. We are a one-stop-shop for our clients and work tirelessly to provide one-of-a-kind solutions. Kodella has helped over 100 customers unlock the power of NetSuite's cloud-ERP in industries such as retail, manufacturing, distribution, and more. Our in-house experts work closely with your team, ensuring your business runs at peak performance on the #1 cloud ERP in the world.
To learn more about Kodella, visit http://www.kodella.com