“We’re a family of four, three of us play hockey,” begins Jed Schneiderman.
The data-driven loyalty marketing and technology executive is not diving into a story about the winter sport, though. He’s talking about ways in which companies should think about profiling consumers.
“The retailer from whom we buy our sporting goods equipment or hockey equipment, doesn’t know the difference between the three people that play hockey,” he continues.
They don’t know that of those three, Schneiderman’s daughter plays competitively, which means she stays in hotels, eats at restaurants, purchases gas and otherwise spends money on activities that are adjacent to her time at the rink.
As the senior vice president of business development for Kognitiv in Canada, Schneiderman points out that this is a missed multi-enterprise loyalty opportunity.
If the sports retailer had a more fulsome picture of Schneiderman’s daughter as a customer — i.e. knew about these other activities — they could, for instance, partner with other vendors to offer her more targeted, attractive deals and increase loyalty for all brands involved.
But that’s a big “if.”
Schneiderman likes to take the guesswork out of understanding what attracts people to a brand and to products (not to mention, what keeps them hooked).
It’s a data-first approach to analyzing consumer behaviour, he says.
“The future of loyalty is brands owning direct relationships with consumers, not renting them, and partnering with other companies using data, AI and machine learning.”
The result: a personalized profile of your customer that’s targeted, timely and contextual.
Which is good timing, because personalization is more than a “nice to have” loyalty incentive — it’s becoming a business imperative. For instance, an Accenture study found that 91% of customers are “more likely to shop with brands who recognize, remember, and provide relevant offers and recommendations.”
But let’s back up, to before the consumer journey even begins. How do you develop a new product so that you can unlock loyalty when it’s launched?
Start by anchoring to your customers’ problems, says Schneiderman.
A five-step framework for launching a product
1. Define your customer’s problem
When developing a product or service you need to establish your one, overarching problem statement, Schneiderman advises.
Consider Uber, for instance. They solved the issue of unpredictability in the taxi industry. Unpredictable fares, payment methods and wait times were all major sources of friction for consumers, he explains. And these were the needs the app was anchored on.
2. Be clear on how to solve the problem
Once Uber identified the key unpredictability problem, they had to come up with a clear articulation of the solutions they could offer, says Schneiderman.
Then they even went one step further: Not only did they address all the major consumer pain points, they also added a ratings system that embedded quality control into the experience of the app, he says.
3. Prove that you can solve it
People (investors and the purchasers of your product or service) aren’t just going to take your word for it that your solution works, Schneiderman notes.
“What proof do you give to the buyer that de-risks adopting your product?” he asks.
How you do this might differ, based on whether you are serving a B2C or B2B audience, but in either scenario you need to showcase that you’ve got a workable solution — especially if the consumer has to move from another platform to yours.
4. Explain how you solve it differently than competitors
Schneiderman describes products as belonging to one of two camps: They either provide a “better, faster, cheaper” solution, or they are just offering up a “me too” experience that seems largely the same as competitors.
Take a guess as to which type of product will have a harder time when it comes to marketing and winning loyalty.
5. Be prepared to handle objections/challenges
Just because you have presented proof that your product works and is different, that doesn’t mean there won’t be objections to them, says Schneiderman.
But “if you can deal with objections, you might be able to refine your marketing message, you might be able to actually add new features to your product, or address other related items — for example, pricing or distribution or user experience.”
Unlock loyalty with data-driven consumer engagement
So now you’ve launched a product that was centered around solving your customers’ problems.
You’ve set the stage to drive loyalty, but still need to engage in a direct relationship with your consumer, says Schneiderman.
One approach to get this ball rolling is to do a test run, while of course gathering data, he says.
“There are some very large and successful tech companies that all built prototypes before they tried to expand their business. So if you can find 1,000 true fans, you can learn about your product before you’ve reached a point of no return.”
You can then use those initial fans as a baseline scorecard to measure your growth rate over time. And if you’ve done your job right, they also will become an army of people who go out and spread the word about your product, Schneiderman says.
As for building actual loyalty programs, once armed with data that contextualizes your target consumer, the goal should be to enhance user experience — because they are certainly expecting you to. In fact, Salesforce research has found that 63% of users expect companies to anticipate their needs.
Schneiderman points to Starbucks as an example.
Though consumer engagement with the coffee retailer consists of mostly in-person interactions, they’ve used digital tools to improve the in-store experience.
“With their loyalty program and mobile payment system, what they’ve done is leverage digital in order to create a better buying experience for the consumer. So that means you can pay on your phone, you can order ahead, you no longer have to carry your loyalty card separate from your gift card — it’s all combined into one.”
Bonus: they’re gathering even more customer data in the process, which will help improve the business over time.
Success begins and ends with a consumer-first focus, says Schneiderman. Talk directly to your customers, own your relationships with them and you’ll be laying the foundation to build products and experiences that people genuinely love.
For more insight on digital product development, dive into Vog App Developers’ content series.
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