Behavioral Insider: What was the motivation for developing your technologies -- and how do they expand conventional understandings and the practice of how behavioral data can be deployed -- especially across channels?
David Rosen: Loyalty Lab was founded as an alternative to traditional, legacy CRM platforms. Our direct exposure to retailers and consumer product brands told us that there was a very high level of demand for managing best-customer relationships across numerous touch points and channels. There was not, however, an appetite for the cost or time required to implement what had been the only technology options.
We addressed this challenge by using software as a service (SaaS) approach to deliver a leading-edge CRM and loyalty platform in as few as two months.
The platform itself is first and foremost a means of expanding marketers' understanding of their understanding of how their customers behave. We never meant for behavior to be limited to merely transactions. From the start, we committed ourselves to capturing actions such as viral behavior, community engagement, user-generated content (UGC), customer service interactions, and Web browsing to be part of the overall equation of customer value.
BI: How does the behavioral targeting aspect specifically relate to branding?
Rosen: Behavioral activities that go beyond transactional activities are beginning to rival the mass media investment that great brands are spending in terms of their overall effectiveness (well at least that's the trend that we are seeing). Simply put, we have proven analytically that there are no better advocates of a brand than best customers. For example, the two single characteristics that I would want to know about my customers are: To what extent had they successfully referred friends to purchase or join a program -- was the source of their own acquisition refer-a-friend? Or another way to think about this is the notion that best customers in terms of purchase value are worth at least that much more in terms of their true value based on their viral and behavioral activities.
BI: What are some of the most important things brands have to learn to deploy relevancy driven menus effectively? What changes in conventional understandings or skill sets are necessary?
Rosen: Brands must deploy programs and campaigns that align with their overall goals. It's cute to have a Facebook application that people are willing to share. It's valuable to have a Facebook application connects buyers back to the brand. We're not saying that fun, viral, smart applications must be overtly commercial -- in fact the opposite is probably true. They must, however, have a reason, to bring people back.
Consistent with that thought is the notion of relevance. An average customer -- even better, a highly valued customer -- must see the logical connectivity. A good logic check is whether someone new to the brand (e.g., someone referred to the application) immediately gets the connection.
BI: What are the main challenges in particular in integrating social media behavior into a brand strategy?
Rosen: There has yet to emerge a standard for marketers to follow when embarking upon social media activities. Uncertainty has proven to be the single largest barrier to entry but a few marketers have braved it. Our client, 1-800-Flowers.com, for example, launched 'Gimme Love,' and application we developed that linked activities common to the social media environment, such as sending gifts, to the tangible rewards of its loyalty program, Fresh Rewards.
Currently there is a lot of frenzy, a lot of competition and a lot of confusion among traditional marketers around entering the social media/web 2.0 sphere of engaging their customers. It's clearly not done by the same rules as mass media or even direct marketing, but basic marketing principles of originality, segmentation and great offers are still inherently at the heart of what marketers must do.
By keeping in mind a few key guidelines, marketers can achieve the necessary comfort level to embrace this new channel. A few things to keep in mind are that applications must be smart -- even the silly ones need to be pretty sophisticated and not insult the audience. They must also be strong enough that the average person is compelled to pass along, and warrant repeat visits. You also need to make sure applications don't usurp the core brand proposition or put the brand at risk. They should finally be complemented by other forms of media in order to increase the 'effective reach and frequencies.'
BI: Can you give some examples of your platform being successfully deployed in each of the main channels? Any case study details would be appreciated.
Rosen: Our platform is truly multichannel. Consumers interact in various combinations of the following channels, including branded Web sites, social media sites (e.g. Facebook), retail POS systems, retail kiosks, telephone IVR systems, mobile applications, email and direct mail.
The real benefit of the platform is, it's channel-agnostic. Great brands need to be able to speak to and hear from their customers wherever they interact, wherever they transact and wherever they share with their circle of friends and colleagues.
BI: What are the most important challenges to effectively deploying and growing the platform you see on the horizon for 2008?
Rosen: There is no question that new challenges arise on a constant basis. Just when we think that we can slow down for a minute, the demands of more innovative program designs and more sophisticated clients pushes us to new levels of sophistication. Clearly the growth into social media has been a driving force. More generically, the ability to capture a much looser defined customer action wherever it takes place spurred us on to open up our architecture and our concept of what it meant to engage with a brand.
We are also seeing a real step up in analytical sophistication among our clients. Because the platform is becoming the only customer database that collects and manages such a wide array of customer interactions, the ability to dig deeply into those actions and report on how every marketing interaction impacts customer value has been a major focus of platform enhancement.