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Market Movers Discussion about How to Leverage a Loyalty Program to Build a Relationship with the End Consumers

Are deep discounts the response to getting customers to buy during these times? How can B2B2B2C brands leverage a loyalty program to build a relationship with the end consumer? In this brief chat between Suhas Hiwale, Co-Founder and CEO of SAI Digital and Al Lalani, Co-Founder of Annex Cloud they uncover these topics.

Transcript

Al Lalani:

Welcome to another discussion of Annex Cloud Market Movers, where we bring in industry experts and market luminaries to help us navigate through some of these challenging times. As followers of Annex Cloud Market Movers have seen, we've had some amazing discussions and today I'm extremely excited to bring in Suhas. Suhas is the co-founder and CEO of SAI Digital, which is an amazing implementation and digital marketing agency. And Suhas, welcome to the discussion.

Suhas Hiwale:

Thank you. It's my pleasure to be part of this video series.

Al Lalani:

Wonderful. And Suhas, through these discussions, we have been having a lot of conversations around the advent of digital transformation or the acceleration of digital transformation. One of the notes that I saw last week, or this week across LinkedIn that was really trending, is the movement towards digital very, very quickly. One of the trend graphics I saw, is digital commerce specifically, from 2009 to 2019 in a decade, grew from about 5.6% to about 15%. And then in two weeks in 2020, it grew from 15 to 27%.

What would have happened normally in about another decade has happened in less than two weeks? That means a lot of things to our customers. That has happened, some of it because of necessity, but can this be sustained? And at the same time, there are operational challenges, there are implementation challenges, there are marketing challenges, that these things bring to sustain some of these things.

So my first question is more broadly around what advice would you give to marketers, as well as to CMOs around what digital marketing techniques and things that they can do to adapt to this new normal? And from an infrastructure perspective, whether it's commerce or other customer experience infrastructure, what should they think about to adapt and keep up with this growth?

Suhas Hiwale:

Yeah. So yes, I think my observation on this has been similar and my observation comes part from the Asia Pacific, and that which is what our playing field is. And we have met a lot of customers during this time, for example in QC Singapore, then Singapore actually, there has been almost 40% growth in online buying. And that's a huge number actually. And then they'll celebrate that and people went back and then they found that three-quarters of those people, they're saying that they're not going to go back to their old normal, they're going to stick with us. And so that means it is going to be staying here actually. And I think that is phenomenal growth, and that also means that every company will have to strengthen there digital channel, every company will have to focus on the right messaging. And I think that during this time, of course, I think that emotional connection is very, very important.

And I think the marketing strategy and the marketing activity will have to be driven by that. And how can you connect people who actually put weeks together? And I think that's something that a lot of companies are figuring out. And especially the companies who have actually managed their businesses, mostly with the physical setup, I think they need to figure that out actually. So for example, if we take gyms, it's the whole social distancing and hence most of the gyms are closed. But I think most of the gyms actually started a lot of online courses and they're connecting with their members so that they can physically and mentally stay healthy.

So I think a lot of the marketing in the current times has been or could be emotionally connecting and saving that consumer, saving the customer, so that then the business comes back to normal, you can be able to get all of that back and your traffic will actually go up rather than going down. And you will have a seamless entry to the new normal when you relaunch and restart your operation and the business climate gets better and better. So that's about marketing and about the e-commerce infrastructure digital, I think that's something that will just become normal. I don't think anybody will be able to run those businesses without that.

I think that B2C businesses already have a lot of that and they're pretty well connected digitally with consumers, but it's B2B, which will see a big change, right? The manufacturers, the distributors, the retailers, these are all very, very physical businesses actually and all of these guys could not even have a problem with e-ordering systems. I think these are the guys that make the smart investment if they want to get into them and they will. And we have seen, we have had a lot of conversations with the manufacturers, retailers during this pandemic time and we had some busy time with these guys, but besides that, there would be a big change in the B2B industry that I can foresee when the end of new normal comes back.

Al Lalani:

I think you mentioned two really important things that I want to repeat so that everyone sort of gets. One is about the emotional connection we in our world call it emotional loyalty. And if you're going to create that lasting time and lasting impact with your customers, you don't just connect on transactional loyalty, not just on what you buy, but an emotional loyalty, which keeps that connection fresh and keeps with the customer. So that's a great point that you brought up. The second part is the focus on B2B and, and you're right. B2C infrastructure when it comes to digital marketing and digital commerce was significantly ahead of the times than B2B was. B2B will be significantly more accelerated now with this process, and still have to catch up with the times when it comes to digital techniques or customer experience or whatnot.

And it's being mandated with that process. On the B2B side specifically, one of the examples I like giving is, there are brands that are out there, and I actually wrote a piece of content around it; emerging brands. And emerging brands are getting a lot of purchases happening through third-party retailers that are selling those brands out of necessity. So for example, if you're a CPG brand or if you're a fast consumer goods brand, or if you're a brand that sells a new grocery retailer, for example. Because distribution is affected right now, they are seeing out of necessity, people buying their products, but does that mean that they will continue buying after this is done? That's dicey because when the big manufacturers are able to figure out the distribution challenges, that won't be the case. Similarly, B2B, where you're not only connecting with those retailers as a manufacturer, as a distributor, those relationships work very much manual.

And when that long-tail adapts to more, kind of commerce and digital, that infrastructure will need to adapt significantly better as well. So those are very, very big points that you bring up. I think just on that topic of keeping the relationship and keeping retention and loyalty, the emotional piece that you mentioned, I want to add and ask some more questions around that. You've acquired some new customers. You mentioned about keeping that emotional connection. What are some of the retention and loyalty techniques that you think some of these B2B brands might think about if they can, or maybe even B2C, that's open for both sides, where they can think about how to build a better relationship, but digitally with their end customer, and if we can start with B2B, if you have an example, there are some thoughts there?

Suhas Hiwale:

Yeah. Yeah. So I think, I mean you're right, the B2B businesses, not all of them, but I think some of them are at a very preliminary stage of connecting with their customers. And I think what the pain, a lot of businesses is saying, is they have a relationship with distributors and that their relationship further, sometimes it's with retailers, but that's, again most of the time to get distributed is stopped. And the connection to the main consumer is missing for B2B businesses and also I think that technology that is there currently in the market, actually really helps you connect with the distributor. And I think this is one big issue that B2B customers have.

And this also actually, since they are not interacting with any consumers, that obviously also impacts loyalty and creating a loyal base for them. So I think there will have to be a conscious effort for them to connect to the main consumer, without cannibalizing the whole infrastructure of distributors and retailers and keep that whole thing smooth. And I think, since not much exist in terms of the relationship with the end consumer, I think even the basic things, if they start doing, I think that's going to impact a lot in terms of getting them some loyal customers.

Al Lalani:

Yeah, absolutely. And this is a great point, we released a product in the market to address that point specifically, and it's called a native receipt scanner. And so, in the example you mentioned, it's a B2B, to B, to C, right? You've got the manufacturer to the distributor, the distributor to the retailer, the retailer to the consumer, you are two levels away from the consumer. So how are you going to build a relationship with an end buyer of your product who is buying it from two levels away from you? This native receipt scanner, what it does is it allows you to, as a consumer, you put some messaging on the packaging saying we have a loyalty program of our own as a brand, as a manufacturer.

Now you, as a consumer can take a picture of the receipt and send it to rewards at brandname.com or manufacturer name.com, and now we're able to scan the receipt and say, and add you to the manufacturer's loyalty program, right? So now it helps you to build that relationship. And so, I think some of these things from a technology perspective can help address some of these challenges. I'm sure as we go along, there are more solutions to be had because you're right. The current relationship exists between the manufacturer and the distributor. It may not exist to the end consumer, but if you are going to build retention, truly, you have to incentivize the entire supply chain all the way to the consumer.

Suhas Hiwale:

Absolutely. Yeah. Yeah.

Al Lalani:

That's great.

Suhas Hiwale:

I think this would be a very, very interesting area in the coming days. So I just wanted to give an example of our customer in India, with whom we are at a very early stage of the conversation, and this is an interesting company, this is a ride-sharing company wanting to get into the manufacturing business and they want to be, they want to provide the batteries on the subscription basis to the end consumer so that the electric vehicles can run. And now this whole supply chain actually is going to have many elements, it's going to have distributors, retailers. It's going to have gas station on where you would be able to get batteries. And I think for customers like this, they will have to figure out how their customers would become loyal customers actually. And as you said, I think that a program that would connect with the end consumer, will have to be devised for these kinds of customers and we see lot of such customers, and most of the beverage companies fall in this kind of category. Then we have very little connection with the end consumer and FMCG companies come under this category, and I think I can see more of this.

Al Lalani:

Great. And so, if I may ask one broader question, which is, we fell into this amazing shock mode, right? So everyone is just, have their guard up and rightfully so, right? I mean, many people really suffered through this. They are, if they're retailers, they have to figure out store openings. If they're manufacturers, they have to figure out distribution, they have to figure out their own factories that may have been closed, that they have to restart. So a lot of things have to be worked out individually, right? But at the same time, we have a two-prong challenge.

A, we focus on just that, with fair, with less resources, potentially in some cases and figure out how we can get back to normal. But at the same time, the normal is not the same as normal. So what do I focus on and is as always a challenge, especially in 2020, right? And 2021, as when I'm starting to plan, am I going to focus on operational challenges? Am I going to focus on future work? When you talk to brands and you are, or will when you will talk to certain brands like this in the future, what is your advice to people? I mean, how do they balance the operational issues and figuring this out with the future planning issues on fixing or improving certain things, whether it's digital marketing, whether it's their customer experience process, or technology, to adapt to the new normal? How will, how should people think about this?

Suhas Hiwale:

Yeah. So actually, we have actually been speaking to a lot of these customers and we understand that at this point of time, they're challenging, but getting the people to work in the factories and the factories are closed and they need get back to the normal as soon as the right time comes. But what we also see is that that may not be a very difficult process for them since they will be able to manufacture, since they have all the processes in place, and they have all the infrastructure in place. Of course it will have to be revitalized, will have to wait for new normal. It will have all of the social distancing and things like that.

But I think that challenge is something that they will overcome. That's my feeling. I think where they would really have to focus and that we have been equitizing, is that three things that we are telling them is: Invest in your loyal customers and create more loyal customers at this point of time. Some of these, some of our customers are waiting for deep discounts. And I think that can probably create some kind of financial instability, and bad customer service. So I think what they really need to do is focus on loyal customers, build their business around there and sell through this situation. And then I think when they restart, they would have this loyal base, which actually can help them. So one of them, that's one of the things, I advise. And the second one, of course, is to build out the digital channels, because I think the eCommerce will be a new normal. And so we're telling them to invest in the eCommerce, create the right marketing messaging and marketing automation in place. So these are the three things that we are telling them to invest.

Of course, the operational things, I know that there are challenges, but those are those kind of beyond what we can help them, actually. Of course, wherever we could help them to smoothen their supply chain by connecting the digital channel, we can help them with that. But the physical infrastructure is something that they will have to get back. And I think that would be less of a wary, it's a new customer that they will have to face. And I think they will have to be very good at. That's, that would be a bigger thing. That's my feeling that to me.

Al Lalani:

Wonderful. Focus on your loyal customers, make sure you invest in your digital commerce channel, and grow it, and focus, and double down on digital marketing, and marketing automation. And, so if customers in the Asia Pacific region want to reach out to you, Suhas, or reach out to your agency or your company, how do they find you or find your company?

Suhas Hiwale:

We are very active on LinkedIn, so I think our LinkedIn page is the right place to come to, our website, or even if they go to some of our partners like SAP. And I think, I'm sure they will be able to help, they can reach out to say to ‘Hi’, I think it's pretty simple for them to get to us.

Al Lalani:

Awesome. Suhas, this was a great discussion. I appreciate the time. Thank you again. And for everyone else, if you want to check out more such discussions like the one we had with Suhas, please go to annexcloud.com/marketmovers. Suhas, thanks again and bye for now.

Suhas Hiwale:

Thank you. Thanks, Al, it was very nice talking to you, and it was a great discussion

Featured Speakers

Al Lalani

Co-Founder, Annex Cloud

Suhas Hiwale

Co-Founder & CEO, SAI Digital

Annexcloud Logo

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.

sai digital logo

SAI Digital is a leading global Digital Agency specialising in Enterprise Ecommerce and Customer Experience technologies.

We are a customer-focused, technology agency that is part of a global conglomerate with over $250M USD in annual revenue and subsidiary companies in manufacturing, healthcare, digital and online education. With international offices spanning 9 countries including Vietnam, Singapore, Hongkong, Thailand, Indonesia, Japan, India, USA, Canada, our company is fast-moving, yet focused.

Our consulting and project services cover industries including manufacturing, retail, distribution, FMCG, automotive, and banking. We use the latest cloud-based platforms to ensure customers receive agile, scalable, secure, and easy to use applications.
SAI Digital is a leader in corporate responsibility and sustainability with our parent company operating some of the world’s greenest manufacturing facilities on the planet.

To learn more about SAI Digital, visit sai-digital.com