Loyalty Stories 19: From Functional Needs to Matching Beliefs – Ward de Kruiff

Michelle

Hi and welcome to Loyalty Stories, Antavo’s podcast on customer loyalty and loyalty programs. I am Michelle Ellicott-Taylor and I’m heading up the global partnership team at Antavo. And we’re a technology vendor who power award-winning loyalty programs all over the world. We work in fashion, retail, health and beauty with brands such as KFC and Benefit Cosmetics. In our podcast, Loyalty Stories, we dive into the trends around customer loyalty and loyalty programs.

And we get to talk with industry experts around the world to pick their brains and learn what’s next for loyalty programs. So today’s guest is Ward de Kruiff, Head of Web3 and Metaverse at EPAM Systems. So welcome to the program, Ward.

Ward

Thank you, Michelle, and good afternoon.

Michelle

Well, thank you very much for joining us. Would you like to just tell everyone a little bit about your background in loyalty?

Ward

Yeah, sure. So, I’ve got quite a rich background as a strategy consulting, taking care of developing winning strategies in loyalty, but within EPM, I’m predominantly focused on leveraging advanced technology for our enterprise clients. So, focus on Web3 and Metaverse. We went through the waves of the hype cycle and went deep on the realms of Web3 and Metaverse, and we surely would slowly evolved to Web3, AI, gaming and immersive experiences. And that has a lot of touch points and implications for loyalty as well.

Michelle

Yeah. Great. Excellent. Okay. Well, thanks very much for joining us. And I guess to kick off, it’s always very interesting to ask our guests about their favourite Loyalty programmes. So can you give me an example of something that’s been their favourite for you in this space?

Ward

Yeah, of course. Well, I think I might disappoint you, right? But by not having a favorite loyalty program, I think I’m too biased to say this is a favorite. I think if you look at the core of what does loyalty actually mean, right?

It’s a customer, that’s predetermined to actually buy a product. And I think from that regards, I’m a loyal customer to Adidas for buying Copa Mundials every two years. It’s not because of Adidas, it’s because of the quality of the product. So I think that takes the box on the loyal customer, but equally so, I think Nike for running, but also I’m quite addicted to the Sneakers app.

So every time I have a chance to enter a raffles, I’m either happy or I blame the algorithm for not selecting me to actually win it. And I think The North Face, I think, has really good elements to leverage as best practice. So whether it’s their member-only field testing, which I think is quite a clever element of the loyalty program or The North Face renewed program, right, which is really adding sustainability to the loyalty program and creating a circular ecosystem is also, I think, a best practice for those in fashion and luxury retail. 

I like Nordstrom because of the richness of their reward catalog, right, so they’re not a favorite, but I think they’re definitely best in class and good examples to look at.

Michelle

Yeah, I mean, that’s really interesting with the fashion brands that you’ve mentioned there and obviously on the kind of sporting side of things as well with the thinking about the ways that they would actually be having the touch points with rewarding somebody and what types of loyalty campaigns they would be. So, so great. Thanks for sharing that. 

And then are you able to share a little bit more around, I guess, some examples of loyalty programs that you’ve actually worked on? So examples of clients where you’ve been involved with their loyalty strategy.

Ward

Yeah, so I think I’ve been involved with the major sport retailers. So I won’t mention their name, right, but they’re amongst the market leaders. So I’ve been involved in innovating membership, changing or the customer journey from a member perspective. 

And I think ultimately what everything has in common, it’s about maximizing, the lifetime value of a customer, right? I think that that’s the primary goal and then purpose of loyalty, of driving membership. And I think it’s quite dynamic. It’s so fast paced and changing all the time that, yeah, within fashion, luxury retail and sports retail, I’m helping out quite a number of our clients. 

And that’s a fun journey. Focusing on, okay, how do we grow brand love, how do we deepen the emotional connection with a client? And what’s our strategy? And that is mostly or predominantly focused on changing engagements, shifting from transactional loyalty to more emotional loyalty. So, it’s really going beyond meeting a customer needs, a functional need to, to really symbolic ones, matching beliefs and values of clients.

Michelle

Yeah, okay. And it’s interesting you’re talking about emotional loyalty there, and also mentioning transactional. So just thinking about the changes in loyalty over the last couple of years, what would you say have been key changes in the loyalty industry?

Ward

I think technology is an enabler, is fueling digital transformation. And I think what we’re seeing within loyalty, obviously, are the rise of digital loyalty programs with integration into app, into e-commerce, into social media. So I think that’s the change that has already happened. And obviously we’re on top of the hype cycle of artificial intelligence, right? 

Which is nothing new. It’s part of data science as we have known it for many, many years. But now with OpenAI, it’s changing a shift and that is impacting loyalty in a positive way because it allows for personalization at scale. So it’s a real opportunity for those enterprises that are not truly data driven to become fully data driven and then foster deeper connections with their, with their customers, because the, the understanding of customer intent, knowing customer preferences allow for changing your loyalty strategy.

Michelle

Yeah, I think the AI side of things is definitely something that’s coming up a lot. And I guess where you’ve mentioned about the changes that have happened there, we’re looking at, you know, what are the key trends that are coming up for the next two years in the loyalty industry? So, yeah, looking at AI and are there other things that you see that might be key trends that are evolving over the next couple of years?

Ward

Well, obviously I’m preaching for my own practice, right? And I think Web3, AI, gaming and immersive experiences are all intertwined. For me, it’s about next generation commerce, building community with next generation consumers. 

And I think two major trends are one gamification where in Asia, they’re way ahead of, for example, Europe or the U S. So I think gamification and building community, preferably on chain are two trends that are here to stay and to build upon.

Michelle

Yeah, okay, yeah, the gamification part is interesting as well, because I guess in your role, when you’re talking about these concepts and ideas and strategies, you’ve obviously got to be thinking about the platform itself and what it can deliver on. 

So what are you seeing from that perspective that’s important? Is it things like, I don’t know, the ease of integration and implementations? Is it ease of use? Is it gamification? What are all the things that you’re thinking about with the platform there?

Ward

Yeah, I want to go one step back, right, on painting the picture on what the real opportunity is. I think we’re currently experiencing Web2, and Web2, as we all know it, is data-led, but on centralized platforms, right? So data monetization by the likes of Meta and Google were used with, and we’re the ones fueling AI, right, by sharing our data or what have you.

And I think Web3 is a game changer to that effect that for me personally, my opinion is it’s only real enterprises with global consumer adoption today have a right to play, but it allows for building community and allow that community to co-create, to vote, to really go beyond, I mentioned the example of field testing of products that didn’t come to market yet by The North Face. 

But I think Web3 is an enabler of fueling sustainability, having that circular ecosystem because there’s proof of authentication, there’s real ownership. And then to gamify those customer experiences is all intertwined. So by really leveraging that, I think we will be a next shift in how we see loyalty evolve.

Also on gamification, I think with hardware getting better, I think enhancing the customer experience through augmented reality, virtual reality and mixed reality. That’s not the future that’s already here and that’s here to stay, but it will improve over time. So I think those trends represent the evolution of loyalty as we will see it.

Michelle

Yeah, and I think you mentioned there about sustainability as well. So we see that’s something that’s a trend that’s evolving, but it is already here as well. And how brand using that emotional loyalty exchange with something like sustainability. And it’s interesting to maybe get your thoughts on that.

Ward

Well, I think sustainability is one key trend, right? But also ethical consideration, so inclusion, diversity, and what have you. I think embedding that into loyalty and membership is key. So the freedom of choice of those community members and members that have that emotional connection with the brand.

Those are important aspect, right? It’s up to the community to say, Hey, I want to give back to society, to the brand. And it’s for the brand to actually enable and support that.

Michelle

Yes, yeah, excellent. Okay. And with your overview of, I guess, the global markets and looking at brands from an international viewpoint, what would you see as maybe commonalities in loyalty across different regions? Or do you see that, are there nuances or do you see differences in what works in different regions?

Ward

Well, obviously cultural aspects are very important to take into consideration. And I think because China was actually later in the digital transformation thing, they were actually better innovating and embracing or adopting to advanced technology. 

So I think in APEC, it’s a clear example of how culture actually is influencing loyalty of membership. So it’s more gamified, it’s heavily mobile driven and social media plays a very important role. I think we can learn from that regards from Asia. I think live shopping is a good example, right? 

Live shopping didn’t make it that much in Europe, in the US, but I think Alibaba used to be a customer of mine and I think already decades ago the Alibaba marketing team came up with the concept of the top of the pyramid will give in real life access to fashion shows, but we will enable live shopping directly from the screen to those that we invite to watch, right? So really giving that exclusivity and scarcity and gamifying the experience. So I think people in Europe and the US can learn from that.

In Europe, I think we’re more experimental compared to the US. So in the US, it’s still very much transactional and reward driven. And in the Middle East, it’s about high perceived value of rewards compared to other parts in the world. Think what’s the same for everyone. That’s the primary purpose, right? Maximizing, increasing customer lifetime value.

Michelle

Yes, definitely that’s the end goal, isn’t it? So, cool. Okay, and then I wanted to ask you about with the assignments that you get in this space, who’s driving those forwards? Is it coming from the CMO, the head of loyalty team, or are you seeing that there are other interested parties more recently from either different teams or an exec level, CFOs, are you seeing a change there?

Ward

Yeah, so I think in an ideal setup, I think the board is aligned, right? So the CMO, CDO, CTO or CEO, they all know the importance of what loyalty strategy can represent to the business. So there’s not a key decision maker, I think, from the enterprises that we service, they actually have head of customer experience, head of and customer engagement. So there are definitely important stakeholders where it comes to loyalty and membership. 

I think the CMO, right, is key for driving customer retention. Then again, with the ongoing digital transformation, integrating loyalty into app, e-commerce, social media, the CDO is of real importance as well. So ultimately it’s a team effort and it should be a team effort where everyone is aligned on, okay, this is the importance of loyalty. And I think some examples out there actually may get a revenue generating exercise by introducing subscription-based loyalty models.

And there the chief revenue officer or how you wanna call that person should have a seat at the table as well, right? Because it can actually, well, it should generate revenue, but I think a subscription-based model, again is one step in the evolution of what loyalty can mean to some verticals.

Michelle

Yes, yeah, I mean, that’s an interesting point on the subscription side, because that’s coming up more and more in loyalty and how brands can work with the end customers to adopt that type of model. 

Ward

Correct.

Michelle

Yeah, OK. And then I wanted to see if you could give some advice to someone who’s maybe starting out in loyalty. So with the experience that you have, if there’s somebody in a junior loyalty role who’s looking to excel over the next couple of years and be leading a loyalty team. What are the kind of things they should be thinking about in this space?

Ward

Well, I think a few takeaways for a person with that ambition, right? Is one core competencies that will always be important for any role, but is building internal and external relationships. I think that’s important, but I think where it comes to loyalty, having a mindset where the customer is key, right? 

So being really customer centric, understanding their needs, pain points, preferences, their intent. So having that understanding be truly data driven from that regard. I think those are important factors for somebody that wants to be successful with, with loyalty.

Michelle

Excellent, yeah, I think it’s become a more and more sort of focus area within marketing teams to drive the loyalty division and it’s becoming more and more popular for people wanting to work in this space and I’ve had some really interesting stats around how many loyalty programmes each individual is generally associated to, so we’re all experiencing loyalty in some way, so yeah, it’s definitely proving a popular space at the moment.

Ward

Yeah, no, absolutely. And I think the nice challenge today is to go beyond the transaction, right? So really for me, loyalty is actually about creating a sense of belonging, brand desirability, and that for me is not just about customer experience alone, right? It’s the sum of brand, user and customer experience that’s key to basically be synonym to brand desirability.

And that should come with an emotional connection to the brand. So I think for everybody within a loyalty team or within the marketing team, that’s quite exciting to work on and to really focus on that.

Michelle

Yeah, and I think it’s coming up more and more as well that it’s like it’s loyalty, membership, community. These are all, you know, keep things working together, aren’t they? So, yeah, excellent. Okay. And then it’s nearly time for us to wrap up, but I would like to ask you as well about something that’s maybe surprised you in the loyalty space. 

So not necessarily, you know, a favourite programme or something, but is there something that’s maybe been done a bit differently with loyalty? Something that yeah, that has stuck with you.

Ward

Yeah, I think we touched on AI, right? Which is really on top of the hype cycle at the moment. But I think leveraging the true power of artificial intelligence that can really mean a lot, right? So I think what impressed me was, for example, the fact that Carrefour introduced Carrefour Hopla within four weeks and implemented it into an e-commerce site that generates more than a billion, by actually supporting that their clients who say, Hey, you’ve got a grocery budget of 50 euros per week. 

Then based on the offers or promotions we actually have, we recommend this as a shopping basket, or if you want to eat healthy, you feel like I want to eat chicken or spinach tonight, we will actually generate the recipe for you. 

So I was quite impressed with that, but also I think similar to the Carrefour Hopla initiatives, they worked with Google and they introduced AI Marketing Studio, which basically departs on a brief from the marketeer, where the marketeer writes a brief and then AI generates the entire campaign with the right content for the right channels, with the right message. 

So I think that was a recent example, which was quite impressive on, if you talk about innovation, digital transformation, and you want to positively impact the customer journey and the customer experience to fuel loyalty and membership, I think that was quite an impressive example.

Michelle

Yeah, definitely. I haven’t heard about that one before. So it’s interesting to hear about that. It’s doing something different. So, well, that’s great. Thank you so much. I’ve really enjoyed having you on the show and being able to share all that content with us. 

And it’s interesting with some of the topics that you’ve picked up on there, but there’s definitely a trend around AI and it’s gonna be very interesting, like you say, with Web3 and how that’s evolving. So yeah, thank you so much, Ward. Thank you.

Ward

You’re very welcome, Michelle. Thank you.

Michelle

And thanks to everyone for joining us and listening and watching this loyalty podcast. We really appreciate it. Please come and see us at antavo.com to hear more about how we can support you from a loyalty perspective. 

And also feel free to reach out to Ward at EPAM with any questions you have around Web3, etc. 

So thanks again and we look forward to seeing you soon.