Who doesn’t want to keep their loyal customers? After all, it’s cheaper to retain business than it is to close earn new customers. That’s why this week, we’re talking about loyalty program marketing with Sean Duclaux, Vice President of Product Management and Marketing for iSeatz, a loyalty tech company that enables travel and lifestyle bookings with point bank integrations.
During this episode, Sean tells us:
- How loyalty marketing programs have evolved
- About the importance of customer experience when it comes to loyalty marketing
- More about membership and participation trends when it comes to member rewards programs
- Where most companies fail when it comes to executing customer loyalty programs
- Out of the box thinking for loyalty programs
- And how B2B marketers can use loyalty marketing
Stacy Jackson: Hi, everyone. I'm Stacy Jackson.
Alanna Jackson: I'm Alanna Jackson. We are the co-founders of Jackson Marketing. In case you still haven't heard, we are also sisters. Stacy, what's the topic of today's episode?
Stacy Jackson: Today we are talking about customer loyalty programs and loyalty marketing. Alanna, have you ever had a credit card or belonged to any kind of club where you've racked up points to earn something, a prize or a reward?
Alanna Jackson: I have. Sometimes I'm very dissatisfied with all the points I have and the options I get right.
Stacy Jackson: Yeah. Right. It's sometimes a little disheartening to know that you can spend so much money to earn such a small reward, but today's guest works with a company that has tried to take customer loyalty programs and those point banks to a new level that combines practicality and still offers those luxury perks to the people who want to earn them and receive them. Alanna, why don't you tell us a little bit about today's guest?
Alanna Jackson: Sean Duclaux is an accomplished, growth-focused technology industry executive with 20 plus years of proven success of enterprise software in innovation. As vice president of product management and marketing for iSeatz, the worldwide leader in loyalty technology, Sean balances strategic vision with execution excellence, enabling travel and lifestyle bookings with point bank integrations for global, hotel, financial service, and airline brands. Prior to iSeatz, Sean held diverse roles in startup ventures and technology mainstays. As a senior executive, he is known for his strong technology skills, market-sensing ability, and agile project management discipline. Sean earned his MBA from the University of Houston, a master of science and computer science from the University of New Orleans, and a bachelor of science in computer science from Spring Hill College. When Sean is not collaborating with customers to drive technology innovation, he enjoys being on the water throughout the Gulf Coast. He is a rugby veteran following the NOLA Gold Rugby and enjoys quality time with his wife and two daughters. Sean, welcome to the B2B Mix Show.
Sean Duclaux: Hey, thank you so much. Good morning to y'all.
Alanna Jackson: I'm sorry. I've got a little scratchy voice. I'm getting sick, and so I apologize for that.
Sean Duclaux: No worries. I just hope it's not the coronavirus.
Alanna Jackson: No. I got tested. I'm good.
Stacy Jackson: Sean, before we get into the nitty gritty about customer loyalty programs, would you give us a little more insight into what iSeatz does and want you to do there?
Sean Duclaux: Sure. No. iSeatz, we're the best-known secret powering some of the largest global loyalty programs, and I say that we were founded in 1999. Right? We are far from a start-up. We are based out of New Orleans, which is known certainly for lifestyle and travel as a destination, but not really a software company, although the city is beginning to bring a lot of technology solutions and a lot of start-ups, but we're far from that, again, based on our 20 plus years of being in business. Where we're focused is really leading travel commerce in ancillary merchandising technology, so that's where it really fits into loyalty tech, and enabling travel in lifestyle bookings. Our key markets are travel, financial services, hospitality brands. If you think about customers like American Express and their loyalty program, iSeatz actually powers their loyalty program. The key to that loyalty program is really point bank integration, right? Because everyone in loyalty programs want to be able to earn rewards and then game rewards as well.
Alanna Jackson: Right. Having all of that experience, you're one of the best people we could talk to about loyalty programs. Let's go ahead and dig into some of that. Maybe you can tell us, over the years, how have loyalty programs you evolved? Do you have some background you can share with us about it? A lot of the brands are still using them, but not all of them, especially in the B2B world. Are there consumers joining and participating when they are using them?
Sean Duclaux: Yeah. It's interesting. If you look back into the 1980s, and that's really where some of the loyalty programs started, and it was really around cash back, right? Trying to put cash back into the consumer's or the cardholder's wallet. That was kind of the popular program and the card cardholder benefit there. But really, when you take a step back, and the loyalty executives look at that, their goal was to drive more spend of that card holder and that particular card, not... The results though were not really loyal, and they really struggled to push cards to the top of the wallet. Again, I wouldn't say it was a failed effort, but it certainly has evolved to today. If we focus just on the financial services side as a contrast, travel rewards cards, and you're looking at even co-branded cards, a Delta American Express, if it were, they are trying to build genuine, meaningful connections with their card holders.
Sean Duclaux: Again, as an example or a use case, going back to one of our key customers, American Express, their card has become the most synonymous with travellers and their travel rewards platform because they are allowed to directly book flights, hotels, cars, and activities, and even some experiences, from that platform. That's a good evolution if you were to look at it from give cash back to now building in more of a direct connection with that card holder or the consumer. I think where they go in the future, so if you're looking a little bit further out, is the drive today is really around experiential marketing. Customers are looking for the surprising, stimulating experience, and that was really called out by Accor's chief marketing officer, Steven Taylor. I think having two daughters, as you referred to, it's certainly... I hear it all the time. It's an Instagram-able moment.
Alanna Jackson: Yeah.
Sean Duclaux: That's really what Steven Taylor looks for, and those folks, the cardholders, the travellers are looking for those Instagram-able moments. How do the programs connect with the consumer? As an example, American Express connected to offer... or they partnered with Coachella. That's a very exclusive cardholder reward. What they saw as a direct result, 36% of new signups into the program were amongst millennials. Being able to drive to a different demographic than you would actually think through that Instagram-able Coachella moment, so interesting developments, of course.
Alanna Jackson: When you think about millennials, like you were saying, they are big with the Instagram and wanting to share all of their experiences, like everything that they are doing, and they're sharing those on Instagram. That is a key thing about, like what you said, creating those Instagram-able moments.
Sean Duclaux: Right, right. Exactly, much to the demise of a father of two daughters too.
Stacy Jackson: FOMO will keep you in business.
Sean Duclaux: Yes, it will.
Stacy Jackson: All right, Sean. From what we've learned about loyalty marketing and memberships, we did a little digging. McKinsey & Company reports that membership in loyalty programs has increased in recent years, but they've also noticed that participation has slipped. What are your thoughts on why that has declined as far as participation goes?
Sean Duclaux: Yeah. I think it's a great observation. While the membership has risen, depending on who you look for a statistic, some will quote numbers 64% report increases of membership, which is positive, but it's really not just a signup. It's the engagement. That's really where you'll see a lot of the programs begin to fall down. I think that's why some of the membership has increased with participation is because the organizations still look at this from a transactional nature. A customer, a cardholder, a loyalty member wants to earn points and then redeem points. If you look at that from a transactional nature, I don't think it really captures the essence of what it could be. It needs to mean something to be a loyalty member. Right? It's creating that meaning at every engagement point within the program.
Sean Duclaux: Again, not to belabour the point of the Instagram-able moment, but if you're able to earn points or redeem points on a vacation or use your points to buy a concert, or perhaps it's food delivery on Valentines at home because you're trying to create that romantic moment, and wow, you're going to pay for that with perhaps reward points, then the member uniquely remembers the connection, the connection brings the brand, and then the brand is top of mind when they think about that experience and the time that they had. Right? I'm not certainly going to be the one to order food for my wife during Valentine's, but you get the concept. It's capturing that moment or that concert, but connecting it to the brand as well. That's where folks are struggling to change the business and then change the mindset.
Alanna Jackson: Right. It comes down to kind of that customer experience, which is a big, hot topic these days. I look at some of the rewards cards that I have. Granted, that's not a B2B thing, but I'll go and I'll look. I'm like, "Yeah, I've got 50,000 points. What can I get? Yay, I can get a bag." That's not a good customer experience for me. I think, like you were saying, that's where a lot of them miss that mark. What role do you feel like customer experience plays in improving a company loyalty program?
Sean Duclaux: It's interesting. In my role at iSeatz, I'm responsible not only for product management and marketing, so the strategic aspect, but also for the customer experience and the user interaction. I think looking at one of our other customers, International Hotel Group, IHG, one of their vice presidents used this quote when he told this to me, and it's really around... I think it's the essence of customer experience. Speaking from his point of view, the more that IHG can serve the needs in a one-stop for their customers, the more they are building a loyal proposition that's harder to unwind. Right? If you think about that, the approach is adding value to that loyalty program members, every interaction. Right? In this case, with IHG, it is bringing that brand to the forefront of their mind when they engage as a member, but it's the right message at the right time in the right location.
Sean Duclaux: As an example, if you're going to go to a concert or a football game, or it's a sports activity, and a great one would be the Super Bowl right now. In Miami, when you're purchasing, are you going to purchase a ticket for that event first, or are you going to say, "Let me buy a flight and a hotel to Miami, and then I'll worry about the ticket to the Superbowl"? The studies that we have done, for an experience like a ticketed event, the behaviour is very much, "Let me buy the ticket to the event, and I will fill in around that program with flights and hotels." But if it's for a different type of activity, I'm going to go on vacation with my family, I'm certainly going to book my flights and my hotels, and then closer to the day of the activity, of the trip, will you look for an attraction, a general admission tour, or a ticket. That's key to being the right message at the right time.
Sean Duclaux: The second part of that, it has to be easy. Whether you are in a desktop environment, a tablet environment, or a mobile phone, we have statistics out around food delivery. People are doing it, from ordering food from their laptop or from their phone, not from a tablet. If you think about that, if I'm delivering a message that's not in a responsive framework, and it's distorted at any one of those three communication channels, it's not going to be frictionless, and it's going to prove to be a poor customer experience. I think that third one is really personalization. We are in a time where we collect a tremendous amount of data about our customers. Being able to leverage that to provide and serve up those experiences, those messages at the right time, at the right location, and with the right message... As an example, Alanna, what's your favourite cuisine?
Alanna Jackson: Pizza.
Sean Duclaux: Well, great. Well, if I'm going to serve up, "Hey, Alanna. Today, wouldn't you like to go eat a vegetarian meal? A new restaurant just opened up around the corner?" it's not aligned with your preference.
Alanna Jackson: It's not going to speak to me.
Sean Duclaux: Exactly.
Alanna Jackson: Yeah.
Sean Duclaux: Really, it's looking at that personalization with the data that we've collected. But if it's 11:30 on a Thursday, like it is today, then perhaps serving up a pizza message to you would spur you into action and then, again, being allow you to order that on your desktop or on your phone, and delivery back to the office. It's really about all-encompassing that customer, the inclusiveness of what defines a customer experience.
Stacy Jackson: As far as personal experiences go and making the experience online custom to that user who's coming back to engage with you, how does the recent announcement by Google about third party cookies going away or even GDPR, where you can't track certain things about customers... How does that impact personalization?
Sean Duclaux: It impacts personalization certainly, but that is really a cognitive decision around the way a customer wants to be treated. With GDPR or the California protection act, CCPA, as a customer or as a card holder, I am asking you as the provider to not track that information. It certainly makes it more difficult, but what's more hazardous to a loyalty program is if you're not complying with PCI DSS with protecting credit card information, you mentioned GDPR and CCPA around the personalized data, and even around system and organizational controls. SOC 1, 2, and 3 for compliance around process and controls governance. If you were, as an organization, unfortunately to be hacked and that data is stolen, 64% of consumers say they are unlikely to do business with that company ever again. If you think about it-
Alanna Jackson: That's painful.
Sean Duclaux: Yeah. The question is real, right? The pain is real. Is signing up for a loyalty program as a consumer even worth the risk of that personal exposure with data breaches, right? I'll put that back on the consumer. If they want those types of messages, the companies who are sponsoring the loyalty programs certainly have to understand the tremendous consequences and the tremendous risk that they have to manage and adhere to. If you look at a company like iSeatz, we've been in business since 1999. We process over $3 billion of annual bookings and over 150 billion loyalty points a year. Security compliance, the confidentiality is something that we as a company hold very dear and take very, very serious.
Alanna Jackson: What would you say or tell someone about out-of-the-box ways that companies should begin thinking loyalty programs? Because I think a lot of them just kind of don't know what to do, where to begin, and things like that. What are some of those out-of-the-box things that you could share with them?
Sean Duclaux: Yeah. If you look at the travel brands, hotels and airlines, as an example, they all have a sense of a loyalty program. Right? But what we find when we look and work with our partners and our customers is that they are traditionally individually managed by even different parts of a company or different business development managers. What happens there? They're individual programs with different terms, different benefits, certainly driven by bespoke technologies, and that leads to, again, what we talked about earlier today is a disjointed customer experience. Number one, being able to look holistically at the loyalty programs and your partnerships to unify those. Because again, if it's an experiences vendor, an airline vendor, and a restaurant reservation vendor, being able to unify that into a single loyalty program customer experience is really where I would start. The second thing to look at is promotion. We talk about that. The adage, if you've heard, is, "You can't succeed if you're screaming in the closet." Right?
Alanna Jackson: Right.
Sean Duclaux: Well, you need to be able to not only attract new members. New members, as we talked about earlier, they're growing. That's not the problem, but it's making sure that those members are engaged loyalty program members. There was another study that I've referred to done by McKinsey. Only 13% of customers are brand loyalists who won't shop around. Right? That is a tremendous number who say they're-
Alanna Jackson: That's low.
Sean Duclaux: Yeah. It's low. Look, on the other side of that is the engagement factor. We talked about it today. How many loyalty programs do you belong to today? A lot of them. But of that 87% of people who say they aren't brand loyalists, about 30% stuck with the incumbent brand. That's, again, 70% of that already very large number. Where are they going? They're going to the competition. Being able to find-
Alanna Jackson: Yeah, they're going to somebody who's going to meet their needs.
Stacy Jackson: Yeah.
Sean Duclaux: Exactly. If it's an easy switching cost, and I could do it today because there's a better benefit, and maybe I want to have a dozen different loyalty reward program members, and I can pick and choose which one, but that's not serving the needs of the loyalty program for finding new members as well as engaging them. I think the third one is really looking at the rewards or the why. We've talked about a frictionless customer experience. We've talked about the ability to enable earning points as well as redeeming points. Like you had said earlier, you had 500 reward points. Great.
Sean Duclaux: What can you do with those? It's probably not enough to get you a free room or certainly not a free flight. What happens to those? They just sit, and they stagnate, but we need to be able to find additional opportunities for low point balances. If you think about looking for what we call micro-burn opportunities... So, can you order that pizza and use your points? Is 500 points enough to get a pizza? Maybe it's a slice of pizza, but again, it's better for that engagement. You are a happier customer or loyalty program member because you're using your points, and again, you're engaging with that brand at a low point balance.
Alanna Jackson: Yeah. I'll more likely come back if you've given me something at that low point place. I'll be like, "What am I going to get if I go even higher?"
Sean Duclaux: Right. Exactly. And iSeatz, when we look at experiences, is the first vendor in the loyalty technology space to offer point redemption for experiences through our partner Viator. If you could take, again, that low point balance and there's a walking tour, maybe you want to go see the Hollywood stars, and you want to get that tour for a low point balance, that's a fantastic opportunity to be able to use that. Now, if you have more points, perhaps you want to take a helicopter flight through the Grand Canyon. Right? But maybe you want to earn up to those. Again, I think the last one to call out is something that... Again, we look for innovation in the market, and iSeatz is the first vendor to innovate loyalty reward programs with food delivery, with our partners, DoorDash and Grubhub.
Sean Duclaux: Being able to earn points if you order food in or redeem your points to pay for that is certainly something that's interested for the low point member as well as an earning opportunity, or perhaps you want to have a steak dinner delivered to you. When you think about out of the box, looking at, "How do you unify around a common rewards program structure?" and that could be terms as well as technology and customer experience, don't scream in the closet. Don't just focus on, "I have 64% new members, but I also am engaged with them," and then think about some unique and differentiating rewards, so redeeming points for experiences or perhaps off-property engagement for food delivery, so a couple of different ways to think about innovations around that.
Stacy Jackson: Sean, a lot of our listeners work in B2B marketing, and I know customer loyalty people have in mind that B2C experience. How can B2B leverage customer loyalty programs?
Sean Duclaux: When you look at a loyalty program in general, and I think this is true for either B2C or B2B, we have to move it beyond a transactional relationship. There is certainly a revenue aspect to that. There is a loyalty value, so that goes to the engagement that we talked about. It goes to engagement. I have customers that are engaging with my brand, so example, eyeballs on a website, and then ultimately customer happiness. You have a happy customer, whether you measure it by CSAT or NPS, but they are happy with you as a partner. Those transcend either B2C or B2B. Now, when we drill down specifically to B2B, you have to start, first of all, with B2B purchasers or those purchasing decisions. They're not impulse decisions, right? It's not impulse-driven because the vast majority of B2B buyers, they're rational to the bone. Right?
Alanna Jackson: Right.
Sean Duclaux: You're going to be taking money. It's not like, "I can use points to buy a ticket or to this attraction. That would seem fun." As a business leader, the focus primarily has to be on what the business benefits are within the program. That's number one, aligning the value proposition to your market and to your members. But again, it goes to promotion and rewarding. Think about if you are an email marketing provider, and you want to engage with webinars like this, make those free. Perhaps there are paid conferences that you want to provide complementary access and admission to the conferences or the trade shows or maybe to meetups, because those types of engagements allow that B2B purchaser an opportunity to learn and educate within the industry, but it also allows that engagement.
Sean Duclaux: You're engaging with the brand, and that B2B owner or that B2B customer is receiving benefit. Another one, again, we touched on the B2C, but I think it's applicable, the personalized buying experience. It's the messages at the right time. Think about if you're a distributor, "Can I set up leveraging some e-commerce technology?" a customized product catalogue that is focused just on you with product lists, with your discounts. Maybe it's bulk purchase opportunities, but it's just for your customer. You have a lot of CRM data, so you could use that to further customize, and you have 24x7 full-service capabilities.
Sean Duclaux: In the middle of the night, maybe you're a small business, and you're up having coffee, and you realize you get a message to buy printer supplies, as an example. Here is the way you can serve that customer at the right time, at the right message, within the right communication channel that they want. I think that's a couple of opportunities, which are based at a fundamental level for a loyalty program, but certainly leaning more toward a B2B-type structure or that side of the industry. But I think it's, no matter what the business model is, if you are customer focused, and you're willing to design that program to cultivate loyalty with your clients, you can certainly do that by establishing and rewarding the relationship within your customer base, making sure you're not just looking for that one-time purchase, but that ongoing engagement.
Alanna Jackson: Do you have any additional tips that you can share with everybody that maybe we haven't touched on that you have in mind?
Sean Duclaux: Yeah. Some of the innovations that we're looking at with iSeatz, a lot of... If you're designing or developing the program, continually test your messages and optimize the experience. If you think about AB testing or ABN testing, so those are some of the things that we're really focused on, this is not a one-and-done. It is a continual learning experience around the technology with AB tests, around personalization, and even where we're looking at is some exciting developments around chat bots, so the ability to not engage with a website, but maybe it's a chat bot, and then being [inaudible 00:29:28] online through free text. I want an airline ticket to go from New Orleans to LaGuardia. I type that in, so I don't have to go through a booking path. Some education or some innovation around that, again, goes back to making it frictionless with the consumer or with that rewards member.
Alanna Jackson: Yeah. I think the AB testing is huge because you kind of get a better idea of what works and what doesn't for your customers.
Sean Duclaux: Yes. Exactly. Exactly. Again, within the personas and within that experience, continuing to optimize that.
Alanna Jackson: We have one last question, and it's just for fun.
Sean Duclaux: Okay.
Alanna Jackson: If you weren't busy being the vice president of product management and marketing for iSeatz, what would your dream job be?
Sean Duclaux: What would my dream job be? Because I'm well up in age, I'm going to take out the football player and rugby player, although playing rugby for 30 years was probably pretty good but bad on my body. I think I would have to say at this stage in my life, going back to what we had talked about, being on the Gulf Coast, something on the water. Think about a fishing guide. Maybe it's a small-
Alanna Jackson: That's the first thing that came to my mind.
Sean Duclaux: 100%. I could own a little hotel on the water with a fishing boat to bring guests out, maybe that's part of the reward program, and catch fish and then cook that for them. Being from the South, again, every person that's born here loves to cook or is at least familiar with it, which is one of my hobbies as well. Doing something outside with cuisine somewhere on the Gulf Coast or maybe an island. Maybe it'll be a dream come true soon enough.
Stacy Jackson: Yeah.
Alanna Jackson: If that happens, we'll have to visit.
Stacy Jackson: Right.
Sean Duclaux: Well, sure. You can join the reward program. You'll be the inaugural numbers.
Alanna Jackson: There you go.
Stacy Jackson: Great. Well, Sean, thank you so much for joining us and sharing your insights on customer and loyalty programs. If our audience would like to get in touch with you or follow you online, what's the best way for them to do that?
Sean Duclaux: Sure. I would go to in general the iSeatz website, which is I-S-E-A-T-Z dot com, secondly, my email address is S, for Sean Duclaux, D-U-C-L-A-U-X at iSeatz dot com, and then my LinkedIn, Sean, S-E-A-N, Duclaux, D-U-C-L-A-U-X. Love to engage any way we can.
Alanna Jackson: All right. We'll make sure to put that in the show notes. Make sure that you follow Sean and connect with him. If you want to get in touch with me or Stacy, you can hit us up on social. On Twitter, you can find Stacy at S-T-A-C-Y underscore J-A-X, and you can find me at Alanna_Jax. That's A-L-A-N-N-A underscore J-A-X. If you're not a Twitter fan, you can always look us up on LinkedIn. Don't forget, you can leave us a voicemail on the Anchor mobile app or on our Anchor.fm show page. See you next week.
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