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Before establishing Talon.One in 2015, Christoph Gerber founded a popular food delivery app. During his time there, he spent a majority of his time focusing on what kinds of promotions would drive return purchases, things like bundles or special discounts. He set out to discover the best way to reactivate customers in spaces with a surplus of competitors and realized that this problem was not unique to his industry. As a result, Gerber founded Talon.One to help other companies drive customer loyalty and repeat purchases through promotions.
Talon.One is a headless loyalty and promotion engine, which means the company has a deep understanding of how consumers interact with their checkout carts and how to create promotions that will inspire specific purchases and return sales. This all starts by building an intimate knowledge of the checkout and cart at scale, and then determining what that means for the individual.
Mark Johnson, CEO of Loyalty360, spoke with Chris Mills, Chief Revenue Officer of Talon.One, about how brands should think about customer loyalty, how to drive engagement with the brand and loyalty program, and which trends and technologies brands should consider for their loyalty strategy.
Customer Loyalty: More than a Rewards Program
Customer loyalty is often equated with the traditional loyalty program. While many brands used — and sometimes still use — the terms interchangeably, customer loyalty is much more than a platform to provide members with discounts on products.
“We’ve realized that when you overlay promotions, incentives, and rewards with personalization and understanding of loyalty ledgers and consumers, it’s the perfect mix of what loyalty should mean,” says Mills.
For Talon.One, customer loyalty is about creating a unified experience by understanding all points of the customer journey and driving emotional connections. While point earn and burn does play a role in this journey, building a holistic loyalty strategy involves combining promotions with customer data.
When brands choose not to focus on holistic customer loyalty — allowing it to sit off to the side with the platform — they miss out on a highly effective means to connect with and better understand customers. To Mills, this is the difference between “Loyalty with a capital L versus loyalty as a function of your platform.”
This kind of loyalty must be ingrained in the customer journey for brands to build meaningful and authentic connections with their members. Brands need to think about all the parts of the journey. This helps drive emotional loyalty and creates engagement.
“So, that customer value piece is critical when we ask, ‘What does loyalty mean?’” says Mills. “It’s incentivize anywhere, incentivize everywhere. What does Mark want to see, at the right time? What does Chris want to see? How is that different? What do we care about, and how do we operationalize that effectively?”
How Understanding Customers Inspires Brand Engagement
Driving engagement begins with a brand understanding of who its customers are as individuals and creating meaningful personalization for that specific audience. Much of this involves non-monetary benefits a company provides its members. This could be exclusive access to products or events or personalized marketing communications. These kinds of interactions build emotional loyalty, which encourages customers to make the next purchase, even in industries that don’t offer discounts, like high-end fashion. Talon.One has done extensive research on how to build emotional bonds with customers, and recently published a whitepaper on loyalty psychology.
For Mills, “Loyalty starts with knowing who your customer is and what matters to them — then work backward from there.”
The concept of working backward is a large part of the Talon.One process. To become experts in understanding how to use promotions to drive the next sale, the company needed to start with the specific product a brand wanted to sell, then learn what kind of behaviors drive that brand’s customers to a sale, then determine what kind of promotion would cause those behaviors. The key is collecting and acting on customer data.
“This requires thinking about who the end customer is and what’s required of them to incentivize that behavior change,” says Mills. “A lot of that comes down to being able to test and iterate quickly.”
In addition to personalizing the customer experience, understanding individual customers also allows brands to stand out from their competitors. In the loyalty space, many programs fall into the “sea of sameness” — the concept where loyalty and rewards programs function similarly to each other. To drive engagement, brands need to show customers why they should interact with their specific program.
Over the last ten years, business and digital transformations have made building loyalty programs more efficient, but many look the same. As a result, brands need to consider who they are and how they connect with their individual customers in a way that changes KPIs.
“We talk about engineering repeat purchases or driving reengagement, especially when acquisition is expensive,” says Mills. “With the economic uncertainty, there’s a revised need to own the customers brands already have and monetize them as well.”
This level of engagement requires a brand to step out of the sea of sameness and move away from a static point system. Mills believes this movement comes from two trends in customer loyalty: gamification and emotional connection.
Leveraging New Trends in Loyalty
Leaning into new trends in customer loyalty begins with acting on meaningful data. As digital spaces leave third-party data behind, brands are looking more into collecting data directly from the customer. This kind of data is called first- or zero-party data. First-party data is collected through customer interactions with a brand’s platform: purchases, saved items, rewards redemptions, etc. Zero-party data is collected directly from the customer through surveys, preferences centers, or other forms of direct communication.
Brands seeking to build meaningful customer relationships need to find more ways to collect and act on zero-party data. This kind of data builds trust with customers because they know where the brand received the information on their specific preferences. Loyalty programs can — and should — be a catalyst for collecting this data.
“If you think about all the attributes associated with a session, checkout, an individual, or the geography of where they are and where they’re located in, all of those things should come into play when you think about your incentive and reward structure to drive loyalty,” says Mills.
Emotional loyalty comes out of this data and understanding customer journeys. One of Talon.One’s clients broke down all their customers into six personas and used them to drive all marketing communication. Through understanding those journeys, the brand sends personalized promotions that connect with the values of everyone.
For example, the super saver persona values discounts and deals. So, the brand only sends them the best promotions and offers. The luxury buyer persona, however, cares more about the experience and status of the purchase. The brand does not send them promotions, but instead invites them to exclusive events and new releases. This connection helps those customers feel understood by the brand and drives engagement through that targeted communication.
Additionally, Talon.One also sees gamified experiences helping brands drive engagement through non-economic benefits. Gamification inspires customers to interact with the program outside of traditional transactions. While not always directly leading to a sale, these kinds of programs keep customers returning to the brand. To help brands learn more about gamification mechanisms and how to set up gamified promotions, Talon.One released a Gamification Promotion whitepaper.
"We want to think about the often non-economic benefits that aren’t margin killers, but help a client’s business move forward. Gamification is a great example of that,” says Mills. “Brands need to think about the behaviors they want to change and dictate that will help move the needle for their businesses.”
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