Despite Recognizing The Importance Of Personalization, Marketers Are Still Missing The Mark

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Intro & News

Welcome to episode number 13 of the Mobile Payments Today podcast. I am your host and the editor of Mobile Payments Today, Will Hernandez.

Interesting bit of news last week that I saw about how Walmart's basically going to force their rewards users to use a Walmart Pay going forward. I think that could either work out one of two ways. It seems obvious, but it's going to be one or two things that happen. People are going to rally against it or resign themselves and use Walmart Pay. So it's interesting that they're using that tactic. 

It makes me wonder just how successful Walmart Pay has been to the chain. I don't know if they're just having trouble getting people to use it more. They made this whole investment and do not see the returns that they want. But combining the loyalty aspect of the savings catcher with Walmart pay. I think it's a good thing. I mean, I think the more you get people getting used to paying with a phone, I think that trickles down into other things and you know, they're going to be some people who don't find that to be best way to do things in terms of consumers using a phone of the pay for thing. If you are already accessing that savings catcher through your mobile phone, what's it going to hurt to go ahead and use Walmart Pay to complete your purchases.


Q&A - Zach Goldstein, CEO Thanx

Will: Part of this conversation's going to be about loyalty. Loyalty is something that I know is important to merchants of all kinds. Thanx just released a new product offering called Thanx Campaigns. How is something like what you're offering here helping merchants build and retain loyalty going forward?

Zach: I think the idea of loyal customers is quite clear as an important driver of growth in a business. You think about the 80/20 rule and how much revenue comes from a small portion of customers. Loyalty has long been associated with loyalty programs and rewards that's missing the boat. That might be one step in the broader process of building deeper relationships with loyal customers, but it's about actually understanding customers personally and giving them that unique experience. 

Even when they're not in your business that is actually making them know that you care. Sure it's about rewarding customers, but it's also about personalizing your interactions with them, capturing feedback and engaging and responding and talking to them in a way that's relevant and not just the generic message that a lot of brands are doing, whether it's via email or SMS. It's about delivering a full suite of tools to engage with customers personally. And this is the way other industries side of restaurants and retailers have been using marketing automation tools for a long time. Look at that data and start treating customers in different unique segments or one to one as opposed to a screaming out blanket promotions to everyone that are all the same.

Will: You mentioned something really interesting there just about building that personalization and that connection. Is that getting harder to do nowadays because consumers are being pulled in so many different directions from different brands? Is it hard to capture that attention more nowadays than ever before?

Zach: That's right. Well, it was possible 10 years ago to send out emails and get very high open rates and believes that that was actually changing people's behavior. The data shows very clearly that it's not these days sending out the generic message to everyone. It doesn't get opened because Gmail and other tools are getting smarter at sorting those things out and knowing that same message went to 100,000 people. So it's probably not something the person cares very much about. Also consumer behavior is becoming different. We often talk about the promiscuous customer, the customer that is spending their money and a lot of different places what they want to change that behavior. Someone who, a brand that demonstrates they care. The way you do that, the same reason that a restaurant server comes by and asks you how is your dining experience? That's a personal touch. 

The marketing that you do in that consumers outside the four walls of your business has to also be personal, but the burden there has always been that's a lot of data to analyze. That's a lot of extra work to to engage with customers through a whole bunch of different segments personally. So we've made it one click, whether you're driving people to a slow time of day or a slow day of week, whether promoting a new menu item or a new location or whether something else has changed, like a customer that generally has a great experience, had a bad one and you want to engage with them personally and understand what went wrong. All that needs to be as easy as the click of a button. And that's what Thanx campaigns has enabled.

Will: You mentioned something about being able to analyze that data to come up with these targeted personalized offers and sometimes don't always live up to their billing. We always hear stories and read stories about consumers that receive a relevant offers that are supposed to be personalized. I'll give you an example. I was at CVS, been going to CVS for two or three years and we know they're what they're known for us as long receipts, but I'm getting offers for makeup. I've never purchased makeup, but yet that is coming up on my receipt. 

So my question to you is somebody who's working in this area, why is this continuing to be a problem in terms of the marketing not being exactly targeted the way you might want it to be?

Zach: Great question. What it comes down to is the incentives, those long CVS receipts are by the brands, the toothpaste or the makeup brand trying to get their promotion out there. They're not about delivering great experiences to consumers. We've taken a different approach. We are focused on working with a merchants that want to build deeper connections with their customers. That's their primary goal. And so when we optimize a campaign, it's about letting the consumer know here's something that we truly believe you care about.

It's talking to the customers who matter most. The ones that already have a relationship, we're not trying to find some random person off the street and get them to come in and make a purchase. We recognize that all the best growing brands that we've seen already have great customers that are like them. It's about locking in that loyalty by making sure that those people are recognized and rewarded for their repeat purchasing behavior.

Will: I want to make sure that we talk about mobile payments. I know a lot of the times loyalty and mobile payments kind of get mixed together. There's a proximity based mobile payments with loyalty. That can be a big thing. You mentioned Starbucks, they've obviously done that with their loyalty program, but in general it's kind of been a struggle with the Apple Pay, Samsung Pay of the world. Do you think anything needs to change right now just in terms of that argument with linking loyalty and mobile payments?

Zach: At the end of the day, I think that what we need to see a for mobile payments to really take off is ubiquity, in ease of use and honestly, we're not quite there in most cases. People are willing to change their behavior with starbucks because it's a daily activity. And so it becomes routine and yet the majority of the places that you go, uh, it's way simpler just to follow the thing you've already been trained to do for 20 years, which is pull out your credit card, pay and leave. Uh, and so that, that ubiquity, that every place takes a mobile payment and that it becomes the obvious thing to do. What's going to be necessary for us to see that inflection point. In your question about linking it to loyalty, one of the things that we've seen very clearly in the data is most loyalty programs, think of those traditional plastic card programs have a really high breakage for every hundred people that sign up. 

Originally, only about 40 are still participating a year later. And so that's bad for consumers who were trying to get rewarded. It's bad for merchants who were trying to build better relationships with their customers and it's because of that friction of carrying a card or typing in your phone number, it just slows things down. And so one of the path or one of the magical things that happens with a Thanx power loyalty program is that it's all tied to the payment itself. You make a purchase with any payment card here automatically recognize you're automatically earning rewards. You haven't had to do anything different. I think that's a big step forward in terms of real time customer engagement in the store and mobile payments is moving in that direction. In many instances, paying with Apple Pay is now faster than waiting for the EMV chip to register. That's helping. That's absolutely helping. And as you see that trend continue and more places reached kind of the universal ubiquity of mobile payments, I think we're going to see that inflection point just as we're currently seeing it with the ease of use with loyalty.

Will: And this is something that comes up at various conferences that I've been to. Is that something that you're hearing a lot about from, from merchants and restaurants? Just in retailers and restaurants in general that they want something mobile based on what their loyalty programs?

Zach: I'll tell you something that might come as a surprise coming out of my mouth because we build mobile applications and branded mobile applications on behalf of the merchants we work with. We have a huge number of active users, those applications. I don't believe that the mobile application is the longterm winning venue for consumer engagement. I think you have to take a multichannel approach. We have millions and millions of active mobile app users and yet I don't believe that's the only approach. I think you have to take a mobile, you have to take a multichannel approach. We just launched a chat interface that you can activate via SMS and so you can communicate and earn loyalty rewards. Receive personalized promotions without downloading an app and a lot more chat based infrastructure is going to be in place, despite the fact that email, for instance, is not a good single customer engagement tool. It's an important arrow in the quiver.

It's an important tool among others. And so we still see that first for declining, but still sizable category of consumers' email is an important tool as well. The point being you have to use multiple channels to talk to customers and a mobile app, a maybe a really good one. It has particularly high response rates and very high engagement with push notifications, but it's a big ask if you're a small brand to have your consumer download your mobile app, and every other mobile app for all the other places they go. And so it's not going to be the only strategy that works. You have to have a multichannel approach.

Will: I do like the idea of interacting with chat box SMS and I've seen a couple of examples of that going forward. So I'll be curious to see how that plays out. And maybe that's one of the trends coming up here in the loyalty space. One last question before I let you go. What are some of the things that we should be keeping an eye on? Going forward and especially maybe as they relate to to payments and the payments industry when it comes to loyalty.

Zach: One is the one that you already highlighted. I think we're quickly finding that these big data technologies are actually approachable to smaller businesses that never thought that was possible and so you highlighted some of them but, but A.I and machine learning and a tool, we use natural language processing to actually analyze all the customer feedback coming through and highlight some of the trends before a problem could have been identified actually in the store. Those are really neat technologies that with the right partner, even smaller businesses are able to take advantage of another trend. We're seeing the elimination of friction at the point of checkout and I think the best place to see this is in convenience stores where Amazon Go and a whole host of other technologies are making it cashier, checkout, walk in, grab some items, walk out with them. 

Your card is automatically charged. Not only is this faster, and sometimes easier, but there's one other thing that's really important to note that makes the brand smarter about who's been in their store and enables them to do better. Merchandising enables them to build deeper connections with customers the same way it works online. So that's both important trends and a major threat to legacy players who have historically been pretty blind to those types of things. And then the last trend is another one that's maybe surprising. And despite all those things, I believe firmly brick and mortar is far from dead and main main street small businesses are far from dead. We're going to be that era and, and I'll give you several important examples, but perhaps leading, leading by example, is that Amazon is opening brick and mortar stores right now. No one ever thought they'd see that. And so, you know, ecommerce direct to consumer brands are opening up brick and mortar stores and so real world commerce is far from dead, but it's changing and most importantly in our mind, at the forefront of that is you gotta know who your customers are because of that 80/20 rule because a small number of customers drives the vast majority of your revenue focus on them. That's what's going to define winners and losers in brick and mortar businesses.

Source :

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