Digital loyalty expert Sarah Judd Welch discusses the importance of community building and the evolving expectations of consumers
In today’s marketplace with a wealth of options for every product and category, it is more important than ever for brands to form strong connections with their customers and create a loyal relationship. This of course goes both ways, and it is incumbent on the brand to give consumers incentives to stay with them. As part of our Future of Retail 2016 report, PSFK spoke with Sarah Judd Welch, CEO and Head of Community Design of Loyal, about brand loyalty and cultivating community.
At Loyal, Judd manages and leads community design and strategy for businesses. Prior to Loyal, she worked on community with TaskRabbit, Contently, Kik and Catchafire, as well as for Hillary Clinton and Goldman Sachs. Judd believes that community is the future of society and economy on the Internet.
Below is a short excerpt from our full interview. Download the report to read the article in full.
PSFK: As CEO of Loyal, you have built an entire company around forging strong bonds between brands and consumers. Why is cultivating loyalty important for businesses?
Sarah Judd: Part of the reason is because it’s really expensive to acquire customers, particularly when they don’t stick around. For traditional marketing channels the cost or the ROI for other channels are declining year over year, which means that marketers are having to constantly seek out new marketing channels, like Snapchat, which is really exhausting and has a very unclear ROI.
Because of all this, marketers are basically being forced to focus more on loyalty, retention, customer satisfaction, and the relationship as opposed to pure acquisition plays. It’s no longer a game of what brand a retailer can grow fastest, but who can keep their existing customer happiest. This is something that I’ve been focused on for a very long time, but it’s only in the past year that we’ve started having conversations with brands where we don’t need to sell them on why this is important. They already know.
PSFK: Why did brands resist in the past?
Many higher-ups in brands are still sold on this idea that it’s about acquisition. Incentives impact results quicker when you’re focusing on acquisition and on the media ROI. Loyalty is definitely a longer-term play. It takes longer for results. That can be very discouraging for people who like to see results immediately.
There also are a lot of other challenges like the technical expertise in execution. Tying together and translating marketing and brand loyalty objectives into technical specifications is really hard for a lot of marketers. These can range from an online community platform to a new type of CMS or even something like beacon technology.
PSFK: What are some of the more technical challenges brands face when creating better loyalty programs?
There is a significant lack of data. Consumers are definitely less willing than ever to hand over their personal information, including email addresses and definitely phone numbers. In order to get that, brands and retailers need to be comfortable with integrating with other parties that act as aggregators, like Facebook or Twitter. Otherwise, they need to have an incredibly significant value that makes it worthwhile for a consumer to hand over their information.
PSFK: How have the techniques for fostering community evolved in the digital age?
In order for a brand to cultivate a community, it has to be something that people genuinely care about, right? If you’re a fitness company, there are a ton of fitness communities that preexist, whether or not your brand exists. Usually companies are looking to build their brand communities. They start out by leveraging those communities.
Often a community will organically start to form around a brand before they even make initial efforts. There can be that opposition of organic and organized or forced groups. It just has to be done in a way that is incredibly well protected. When a brand becomes more loyalty-minded, they have to start operating as a better business.
Built on a robust study of trends and patterns in the market, the 6th edition of the Future of Retail 2016 report offers a directional playbook for brands and retailers to build value, drive sales and boost loyalty. PSFK Labs defines 10 pillars to build a modern and engaging shopper experience strategy to go beyond changing expectations and to create an enhanced shopper experience. Download the full report here, view our trend summary on Slideshare and check back daily for exclusive content about the latest trends moving retail forward.