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Market Movers Learn How to Retain Your Customers in the Downturn Environment From Born

Al Lalani, Co-Founder of Annex Cloud talks with Dilip Keshu, CEO of BORN about how these unprecedented times have impacted companies and how they transition to a digital-first company to help support their customers.

Transcript

AL Lalani:

Hello and welcome to the next series of Annex Cloud Market Movers. This series is focused on industry influencers, partners, and luminaries, on what brands, manufacturers, and retailers need to do to reignite growth in this very special period that we are in. With me today is Dilip Keshu. He's the founder and CEO of BORN. BORN is an amazing partner and Dilip himself has a wealth of knowledge that he can impart on us. Welcome, Dilip. Great to have you here.

Dilip Keshu:

Thanks, Al. I'm very happy to be here.

Al Lalani:

Awesome. Dilip, we have been hit by the train. All of us are now a little bit in the shock mode, but what I have seen in the last week is, some of us are starting to get out of the shock mode and confront our new reality.

Whatever that definition of reality for us may be that remains to be seen. Broadly defined, you've seen this a few times in your career, in different places. According to you, are there any learnings we can take away from back in 2008 and 2001? Granted they were very different situations. We've never been hit by a pandemic like this. So, different but yet at the same time something similar.

Any thoughts on what we can learn from the past and maybe apply specifically, if you're in the shoes of a customer of ours, like a brand or a retailer or manufacturer in this case?

Dilip Keshu:

Yeah. It's an off discussed topic as you can tell. Everyone is asking, "What do we do now? What's the future? Have we seen something like this before? What can we learn from the past?"

My advice to the folks who have spoken to me is that they never underestimate the elasticity of the human spirit. In 2001, I was an entrepreneur, got hit by 9/11. We thought it was a terrorist attack, but it turned out to be a global event. It devastated many sectors, and it took many years to recover. But as you can see, we overcame that. It changed a lot of behavior. If you've been to the airport for travel, and you and I as` businessmen travel a lot. We've got accustomed to even our shoes being affected.

So, we've seen these things before. This is of course a different sort of and I think it affects many things affecting you and me. So, I've broken it down to a few structures. So, and as I was saying, we've seen a crisis like this before, and we've dealt with them. Our advice to companies is really to break the problem down into how that change might affect us. The first is methods, how we work, seeing how social distancing has been implemented. We don't like that oxymoron, social means be friendly, and distancing means the opposite. So we don't like to use it there. We call it nonphysical linking. We want people to be in touch, but we want them to be not physical physically together. So, that's certainly going to change.

We think that the tools that are going to be implemented facilitate this change is going to change dramatically. And you play a part in that. We think that if restaurants are empty, they can probably do pickup services and curbside services.

So they have to go online. So, that would change. I think we've also looked at behavioral changes. Not everyone deals with a crisis the same way. So it's the way you lead. It's the way you follow. It's the way you interact. That changes quite dramatically. Then the consumption patterns change. Businesses, I see people are consuming their brand differently on different channels. One thing I can tell you is that in retail, we've seen that empty out. So people will still engage with the brand if the medium is through broadcast, if the medium is through the second screen, if the medium is something that is not physical, you can still do business, but that consumption of the brand has changed. And that's where the business has to change. Then we've seen government and regulations change. You know, there are visa regulations. People can travel to certain countries.

So, that's going to have a huge effect on some companies. Then you have finance change. A lot of companies have had to take government loans and they have to consider whether they keep their stuff, furlough their stuff, lay off their staff. What do they do with that contingent labor that might be actually cheaper, but there's the model issue of who do you keep and who do you let go? And the last and the most important is how do you take care of yourself? You know, it's all, it's, everything is fine, but ultimately you have to boil all of this down. We call this the magnificent seven, right? Seven points of made to what does it mean to you, and how has it changed your life? How do you buy, how do you sell and how do you cope with this? So that's fairly our feedback to people that you have to make it personal and make it something. But we believe that we'll overcome this easily.

Al Lalani:

It's only a matter of time as we both agree that we will overcome, if people haven't read Dilip's post on the magnificent seven, I do recommend that people go and do that on LinkedIn and find it. And by the way, if you don't follow Dilip on LinkedIn. That's the first thing I would do is his posts are amazing. And, by the way, just on the sidebar, on the fun side, always there is that one about his cat, which I always look for. And, and so the cats missing from the video, but, but very excited to have you Dilip. And this is great. I think I wrote a little bit about this behavioral change as well. And my letter was an open letter to emerging brands, which was while we talk about all the doom and gloom, though many of our favorite brands, there are some emerging brands out there that are seeing some positives from this impact.

These may be brands that sell to grocery chains. One example is a soup brand that is selling significantly because Campbell's soup is out of distribution and their divisions suffered through this process. And for some brands, this is an amazing, amazing opportunity while for many others, it's a very big challenge. And my letter was to go to brands that are on the positive side, which no one talks about. Not many people talk about that may not be Zoom, but they're still seeing a significant upsurge that they will see this drop off when people's distributions get better and what they can also focus on while they're working on the challenging aspects as to how to keep up that demand. Once this is all done, and distribution gets back to normal, can they keep those customers around that they have a got? because of this challenge.

And in some of these grants, don't have the digital techniques in place to stay in touch with those customers because, they weren't natively selling through retailers maybe, or they were one level away from that customer. We've been talking about digital acceleration for a good 25 years and every year it's more important. But now this topic is coming up even more often is how you get in touch directly with your customer, especially when you are a brand, how do you accelerate digital? Can you, what are your thoughts for those brands that either are suffering because they now got shut down and digital was not a channel for them, or they are doing great, but digital is a channel they didn't invest in, but they want to keep their customers going forward. Any advice for those brands that are not digitally native?

Dilip Keshu:

They all have a choice, right? Every crisis in society adjusts to normal. And those are brands that have focused largely on stores and events, you can call center sales, right? You'll have to make a change. There are all the call centers outsource. They don't have telephonic, a lot of channels out and in order for them to survive. You have to move at some stage, find the money, the issue is really this because store sales have gone down they don't have the money to press through.

So you have to go digital but don't have the money. And then you're in a bind at this stage. So it would take, I would say for a couple of quarters for these brands to bounce back, and of course the challenge of brands that have gone natively digital, we'll see a huge uptake because they're going to have, they're going to grab market share at least until the other brands catch up. And that's why someone like you play a big part because, at the end of the day, when you have a crisis, the one thing that gets embedded is the ability to discover a new brand. If you're on a certain channel and you're looking out for a new brand, you will find those that are digitally native, but if you have a brand that's already on, let's say the web, you will generally stick with the ones that you know because you have an experience with them.

So loyalty plays a very big part and a lot of companies have implemented custom solutions for that. You know, if they have a solution that can changes rapidly because of the changing new normal, which is what a system like yours can do, I think it will help, but really they don't have a choice. I mean, I think people will have to get adjusted to this new thing.

Al Lalani:

Now Dilip, you brought up a topic that's near and dear to our hearts, which is, in a recessionary downturn environment, the first thing you think about is how do I keep my customers? How do I re-earn my customers? One of the things I was telling my wife I've suddenly realized I don't need another pair of jeans anymore because I don't wear them. And I'm not going to try another brand that I have not bought before. If I need one, I will go back to the brand I probably have and if that brand is in touch with me, I think that'll be much better. So retention is the new norm. And it's something that will really stay and become an important part of the marketing initiative. That trust-building initiative that is important.

You brought up an important point that a lot of brands have invested in maybe homegrown solutions they may have something there, but they haven't really engineered a true retention solution. One of the things that we believe is retention needs to be truly engineered. You have to work at it. You have to work at it across all channels. One more story I can tell you even now is we've got retailers that have all their stores closed and suddenly its become digital-only, or digital-first. And in that case, what they've done is done cross channel promotions to get all their store customers, to buy online, and using that loyalty umbrella, they have been able to effectively do that and stay in business.

So all of those factors are what we are seeing, as you think of the mix of retention and growth, how do you advise potential customers to think about when they are thinking about coming out of this downturn and focusing back on growth. What channels? Retention is one, our loyalty is one, but what channels do you think will work from a marketing perspective that you feel that customers should continue investing in, in this new norm?

Dilip Keshu:

I think I don't have the answers yet, but I think we've seen three things that somewhat safer. One is digital. That's all good. People are spending more time on the web. The second is the emails. We do look at emails and then the third is broadcast. People do watch TV, and that channel has sort of decreased to a great extent because not everything is suitable for broadcast ads. Even if it's the second screen, I don't mean this, but it's also on the second screen, social media channels. I think these are the three big channels that I think we see there's also gaming, but you know, that's very specialized, but more than the channels, I think loyalty is a function of four experience, people always think inexperienced. I don't think it's our strong views of loyalty is an outcome of experiences. And there are four experiences.

The first experience is the experience of discovery. If you like a brand during the process of looking for something, that's the discovery process. You get a bachelor, it's related to. The second experience is the experience of interaction where you have discovered a brand, you start to interact with it. And if it's not personalized, they're using imagery that doesn't even look remotely close to what you're interested in. It won't work. So mass personalization of content is the interaction piece, and that's very important. The next piece is after you have the attraction and the interaction, you have the transaction, you have to buy something, right?

That has to be a very smooth, frictionless part to purchase.

And you have to be clear on your return policy. You will have to be clear whether you're going to give them a discount. Is this a premium product? All of this plays in a very smooth; that's the transact piece. And the last piece is actually what we call the react piece. So I was attracted to the brand, I interacted with the brand, I transacted with the brand. Now I want to react because the experience was not good. And so that is actually the loop. If you get all four of these anchors, correct. Then only is someone willing to amplify an advocate and become an advocate, right? So that's the fundamentals of loyalty. It's not just an experience in itself. It's an outcome. So if you don't get these first four pieces correct. You won't have a loyal customer in my opinion.

And there are a lot of people who make mistakes in one of these four, because they don't have the feedback mechanism, they don't care about reviews and ratings or worry about it. Well, if I go to them the hotel and I don't have a good experience, I'm going to go to TripAdvisor and say something about it, and so most people, because we've become publishers at an Epic scale, thanks to social media. They tend to expect they're entitled to a good experience. So they really react when you have a bad experience. So people are not so motivated to put a good comment when they get a good service, because they expect good service. They will only put a comment when it's an extraordinary service, but if you get a service that's slightly just slightly below the norm, they will put it, but they will detract you on social media. So there is a disproportionately between the positive and the negative, the negative being more massively amplified.

So these are the things that I would suggest brands look at when they build a loyalty program.

Al Lalani:

Absolutely. And this is why I mentioned the engineering of the loyalty program comes into play. You cannot change the experience per se, but you can create the right incentives or the right needs for those audiences that are happy, which a majority of their audience are happy to be able to vocalize those happiness pieces. I'll give you an example, from many of our customers if you are not giving or engineering or reason for those happy customers to talk, you're absolutely right.

There was a brand whose average reviews were 2.3, which was 2.3 on 5 scales. Now, this is a very happy brand with a family, good NPS score, but reviews we're showing something the opposite, that the reason was as he exactly said the happy customers weren't saying anything, because that was their expectation, that was the norm.

And so engineering that on the other side took them from 2.3 to 4.6 on that scale, and that's where you can kind of change the curve so to speak, as we all talk about. In the next 3, 12, 36 months, if you have seen one of these brands that are affected either positively or in most cases negatively, what is your advice in the short term 3 months? Like maybe stabilize, maybe do certain things. What would that advice be now in a 9 month or I would say like the midterm, and then what would that advice be over the next 36 months, and how's business changing and how do I categorize what act on quickly? What do I sort of bridge around on a midterm basis? And what should I build for the long term to cover, and bring me back into where it was.

Dilip Keshu:

In the short term it's about survival driving, keeping your workforce intact and your products and company intact, that's really about survival. Once we've understood the new normal and how we've chosen to react to this, you'll have a business model that will work for you. Often models will the same because of everyone's situations. I think in the medium term and the longterm, I'm a firm believer that if you want to succeed, the product has to be good, a lot of people focus on the discounts. And they think that that's the measure of loyalty to get it up, to discount the product people buy, and when this happens there's a theme where the customer expects to be rewarded. And it's almost pathalotian,

You're training the customer to expect something from you like a redemption of points, of need and benefits, but really, if you look at a truly loyal customer in a really good brand, the focus is only one. The customer wants the next best thing. They want a product that's absolutely the best. And is somewhere, the message is lost, but my advice to all the brands goes back to your core offerings and look at in the six months because we've got time now, we all have a bank. I'm carrying a large pension. Different companies have set different strategies, but this is a time to sit back and use this quiet time and think about; when I come back, how will I create a product that the market would want.

I think if people focused on that, all the rest is an outcome of what's the next step, so I think if we look at the demand and supply chain. It starts from, What are you offering? All the rest can adjust one thing that cannot really adjust, I would suggest to everyone.

Al Lalani:

Perfect. Great advice. The short term survives, mid-term, start figuring out, go back into the core and scale it, longterm thrive. Great advice Dilip here. Dilip if people want to reach out to you for advice, if people want to reach out to Born for help, how do they reach Born? How do they reach you?

Dilip Keshu:

So I'm on LinkedIn. They can reach me LinkedIn. They can also come to our website, it's borngroup.com and a lot of people reach us through that. And of course, they can write to a partner manager whose contacts are on the website.

Al Lalani:

Dilip, Thank you so much. This was a pleasure speaking with you again from Annex Cloud. Thank you everyone for joining us on this series, where we invite industry luminaries like Dilip to help us navigate this crisis. If you want to follow us on these market movers series, you can go to annexcloud.com/marketmovers, where you will see a lot of these videos as we add to this list. I appreciate everyone's time. Thank you again.

Dilip Keshu:

Thank you. Thank you so much.

Featured Speakers

Al

Al Lalani

Co-Founder, Annex Cloud

Dilip

Dilip Keshu

CEO, BORN

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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.

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Born is an award-winning global digital agency with a core focus on creative, content and commerce. We Provide a holistic suite of market-leading services, from large-scale image production to bespoke content experiences and innovative ecommerce solutions. Our evolution over 25 years represents our passion for delivering fully integrated creative work to our global clients experiences.