All Things Experience: Edition 35

Welcome back to All Things Experience, the newsletter that keeps you updated on the most recent happenings in the world of experience.?

This week, we’re bringing you original insights on the two critical halves of the modern? customer loyalty equation and how to maximize each lever to bring more customers back, time and again.

For quick takeaways, check out our three questions with Medallia’s own Mike Debnar , VP, Executive Advisor for Retail. His deep expertise comes from a long-standing, successful career leading customer experience and digital innovation at companies like 7-Eleven , and he has over 10 years experience helping Medallia customers redefine their CX strategies and drive more revenue.

Q: One of the major ways retailers are currently trying to encourage sales is through deals. But what can brands do to go beyond deals and cultivate loyalty that brings customers back time and again?

Mike: There are two parts to modern loyalty, and the first — and most powerful — loyalty lever is experience.

While there’s ambiguity as to what makes up the customer experience, what’s most important is to determine the aspects of the customer experience that provide value to customers and double down on these factors.

And then, secondly, brands need to identify any elements of the customer experience that don’t provide value and make smart decisions about how to eliminate these points of friction.

That’s the first part of loyalty, the experiential side, which is super powerful.

To give you an idea of just how powerful experiential loyalty is, consider this: When I took a look at this year’s Forbes’ Customer Experience All-Stars list, which is based on feedback from 175,000 participants and an analysis of more than 4 million ratings of 3,100 unique brands, the thing that jumped out at me was that of the top 20, most of these brands differentiate themselves through experiential loyalty, meaning that customers are loyalty to the brand because of the experience they get with the brand.

The second half of the loyalty equation is programmatic loyalty. That’s the type of loyalty that’s driven by points, deals, and offers designed to attract and retain customers.?

Experiential loyalty and programmatic loyalty are symbiotic. They work in concert together.

Q: How can brands determine when to focus on experiential loyalty vs. programmatic loyalty?

Mike: It’s important to understand your brand and where you should make investments in one or both of these areas. For instance, I worked for a long time in the convenience store industry, and that’s a sector where it’s tough to have experiential loyalty. The product assortment is similar across convenience stores, making it hard for brands to differentiate themselves. In that case, programmatic loyalty becomes more of a factor as it’s a way for companies to set themselves apart.

Meanwhile, other brands in other industries, such as specialty quick service restaurants with unique secret menus or niche grocery store chains with their own private label products that have a cult following, may not need to rely on loyalty or rewards programs as much because they’re able to lean into their unique product offerings and the quality of the service provided by their employees to deliver an exceptional experience that customers can’t find anywhere else.

Q: What’s the one thing leaders need to understand about the difference between programmatic loyalty and experiential loyalty?

Mike: Loyalty programs are not a silver bullet. The most effective way to cultivate loyalty is to hone in on the customer experience and make experience your loyalty lever — not deals, not points. Those can work, but when brands tap into a combination of experience and rewards working in tandem, that’s transformative.?

Worth a Listen | Quick Ways to Improve Your EX

The Super Amazing Show’s co-hosts, Brittany Hodak , author of “Creating Superfans: How To Turn Your Customers Into Lifelong Advocates,” and CX expert and author ?Shep Hyken , highlight CX and EX expert Ryan Minton ’s book "@Thanks for Coming In Today” and share practical and budget-friendly ideas for improving both customer and employee experience featured in the book. Find out Minton’s best practices from his firsthand experiences as a hotel executive for taking care of your team so they take care of your customers in the podcast episode.?

Save the Date | CXM 360, Oct. 8-9, 2024

美国密歇根州立大学 ’s master’s in customer experience management program’s in-person conference is coming up next month. Each year CXM@MSU brings together industry leaders to share case studies and practice solutions for everyday CX challenges. View the speakers, agenda, and register.?

Quick Hits | Notable News & Notes

Before you go, here are a few more insights you might find interesting:

• Each year, $8.9 trillion is lost in global GDP due to low employee engagement. One potential solution? Prioritizing fulfillment at work. Find out why this might be an effective approach on Forbes.?

• What can Taylor Swift’s Eras Tours teach us about customer loyalty? CMSWire shares these four powerful lessons for CX success.?

• Where does the responsibility of marketing end and CX begin? For Industry Dive ’s CX Dive , Medallia’s own Tim Duranleau , SVP of Marketing, weighs in on how both functions can work together to ensure customer journeys are as painless and simple as possible.

Thanks for reading, and we’ll see you in a couple of weeks!

- Madeline Buyers , Content Marketing & Social Media Senior Specialist at Medallia