Retail Reimagined
Yours, Digitally!
| Episode
38 mins

The Customer Experience Trap: Why CRM & Loyalty Programs Aren't Enough


Learn how the Hospitality industry has changed post the pandemic in this episode of Retail Reimagined with Dilpreet Singh, Head of CRM, loyalty and Customer Analytics, ITC Hotels as he talks in-depth about the true owners of customer experience in a business, the 4Cs model of CRM, and how Loyalty programs have evolved over the years. This 40 min conversation is no less than a myth buster about the misconceptions of CRM & Loyalty.


00:00 - 01:08 - Introduction
01:08 - 04:06 - Dilpreet's journey of exploring Retail
04:06 - 07:07 - The significant change in Customer Loyalty: from Punch Cards to CRM
07:07 - 10:50 - Who are the true owners of Customer Experience in the Business?
10:50 - 13:25 - The post-pandemic effect on Hospitality & How!
13:25 - 15:29 - Understanding the 4-box Framework of the Hospitality Industry
15:29 -18:32 -  The sustained validity of the 4-box customer experience model in Retail
18:32 - 24:30 - Digital Transformation of CRM & Loyalty: The 4Cs of CRM24:30 - 27:58 - Are CRM & Loyalty Different? Uncovering The Big Misconception!27:58 - 32:39 - Customer Retention is the New Acquisition?32:39 - 40:00 - The upcoming trends of CRM & Loyalty Programs for Brands.


Dilpreet Singh

Head of CRM, Loyalty & Customer Analytics, ITC Hotels

Dilpreet is a seasoned CRM and Loyalty professional with 17 years of experience across varied industries like Hospitality, QSR, Retail, and BFSI. He has been instrumental in developing and managing scalable Loyalty programs powering the two greatest growth levers – Retention and Lifetime value. Dilpreet's area of interest and experience lies in understanding the consumer psychi\problem and working on a solution to enhance their experience. He has worked with top brands like Amex, Oberoi Hotels & Resorts, and Dominos and in his current role he is leading the digital transformation initiatives through the implementation of CRM and Loyalty programs.


Jitendranath Patri

Consulting Partner

Jitendranath Patri is a seasoned business professional with over 25 years of experience in the retail industry. He has deep knowledge in retail management, marketing, CRM, and customer loyalty. He works with Xeno as a consulting partner, driving innovation in CRM and loyalty strategies for retailers. Jitendranath also hosts a podcast called Retail Reimagined where he engages experienced retail professionals in insightful discussions.

[00:00:00] Jitendranath Patri: Hi everybody. This is Jiten from Xeno and you are listening to Retail Reimagined, the podcast where we'll talk to CEOs, CMOs, CTOs from the retail industry and uncover the future of retail. So tune into the podcast and learn what's happening in the retail industry.

[00:00:16] Jiten: Hi folks, and welcome to Retail Reimagined. I do hope you're enjoying the set of podcasts that we have brought out so far, and if there's any particular topic or someone you'd like to listen to, please leave a note, comment and I shall try my best to make that happen.

[00:00:31] Retail Reimagined is where I get to speak to CXOs from the retail world and get them to speak about their journeys, experiences, and even share a few business secrets if that's possible. And today I'm gonna be overtly hospital and I'm going across to speak to a seasoned CRM and loyalty professional who comes with loads of experience.

[00:00:52] As he mentioned to me during our initial call, he is working on quote, "digital transformation initiatives for the implementation of CRM and loyalty programs", close quote, and I would like to ask him more about this. But before that, let me introduce him to you. So please welcome, Dilpreet Singh, Head of CRM, Loyalty and Customer Analytics, the ITC Hotels.

[00:01:14] Dilpreet, welcome to the show. Pleasure to have you here as my guest today. And the emphasis is on guest. And thank you for making the time. 

[00:01:22] Dilpreet: Thanks JP. Thanks for having me. 

[00:01:24] Jiten: Just before the call, you send me a brief reply about yourself and I thought, I'll, I'll read it out. But I'll not do justice to it. So could you just walk us through a journey and kind of give us your story?

[00:01:37] Dilpreet: Sure, sure. So my journey, it has been quite fruitful, has been a rollercoaster journey also like, ever since I've started my career, which was almost 17 years back. I got this opportunity to work across varied industries and with some of the top brands in the area of customer analytics, loyalty, CRM and customer experience also.

[00:01:57] So I've also kind of evolved over the period of time with the kind of skill sets which I've adopted, I've learned, and then I've applied to my workplace also, both in personal and professional capacity. So, to start with the, I, I started off my career with one of the pioneers of the credit card industry, American Express, in the account service vertical.

[00:02:17] Then I moved to the analytics and quality vertical because I was having inclination towards challenging the status quo, or if something is happening, then there there can be a way where we are able to kind of do it in a better way and optimize the thing. So walk down certain, critical Six Sigma projects also, which led to enhancement of the processes and ultimately bringing down the cost also.

[00:02:39] So the cost optimization is something which today every organization is aiming for. Post that I moved to one of the giants of the QSR industry Dominos, where I would say like, it, it really helped me to work in a very scaled environment with over 30 million customer records at that point of time, giving me a lot of flexibility to play around with the data and the marketing.

[00:03:03] So I tested a lot of things. I failed also, but then just kind of evolved, from those, let's say, experimentation, which were done. And it gives a very good, I would say, understanding of the industry also and my domain also. Then I would say the real, change or the twist, which actually came to my, professional journey was moving to the hospitality because they, it really changed my perspective towards the CRM and the retention domain.

[00:03:29] When I figured out that customers can be retained and engaged without giving the discount and in this industry with the Oberoi Group or the ITC Hotels, I actually learned that experience is something which everyone is expecting. And as a responsible brand, you need to understand the customer and enable the engagement through relevance.

[00:03:49] Because again, when I'm talking about, increasing the frequency which ultimately every brand wants to do, like it is easy to do that by giving discount, by giving value added services, by giving some of the freebies. Something like that, but like adding some relevance and reaching out to your consumer in a more scientific manner, in a more relevant manner, so that they also know that the brand knows me well and I want to engage with them also, like in nutshell, this has been my journey so far.

[00:04:16] Jiten: Super, super. And you mentioned a very interesting point, right? Your journey started off with Amex. You're right. I think they, they kind of pioneered the credit card business, literally. Yeah. And especially analytics and CRM in that space. Yeah. Was your journey into analytics, CRM, did you plan it out?

[00:04:36] Was it, was it just serendipity? 

[00:04:39] Dilpreet: I would say it was very impulsive and spontaneous because like, again, I had this knack of kind of, challenging the status quo and understanding in terms of, like how, how things work and getting into, I would say at a very micro level to understand maybe something is being done in a particular way.

[00:04:59] Can there be something new, which we can add to that because of that, like the analytics plays a very impart for corporate role in terms of how things are being done. If you want to change it, what are some of the drivers, what are some of the parameters which, which needs to be bogged upon? Be the customer marketing, be it the loyalty or, or anything pertaining to the customer analytics, which would be there, like I, I had those kind of things and like, again, initially say something, decade back or 15 years back, I, I used to work on small, small things on Excel.

[00:05:32] Then like that change into the MS Excel, then the SQL and then the other a nalytics tools, which have absolutely kinda evolved over the period of time. But yeah, one of the personality trait which I'm having, which actually kind of helped me in going in this direction to enhance my passion into my profession.

[00:05:49] Jiten: Super. And in all of all these years, you would've seen a lot of change, right? Especially , from the loyalty ecosystem. Right. I'm glad you mentioned Excel and SQL and so on and so forth. Right. So what have you really noticed across all these years that change? Especially on the change.

[00:06:04] Yeah. What has shifted? What has changed? 

[00:06:06] Dilpreet: Mm-hmm. Mm-hmm. So, talking specifically about, the loyalty, so how it has actually changed over time. Loyalty has actually evolved from a time when like loyalty was all about the punch cards, which used to be there, like whether it is retail, QSR, or any other industry which was there.

[00:06:23] So the customers were handed over. In fact, in certain cases, employees is also the case. So both employees and the customers were handed over these punch. Which they just have to kind of swipe to get the points, back into their kitty again. In terms of the construct of the loyalty program, which has been there, it is a kind of a typical construct where you spend more, you earn more like basis, certain stipulated criteria, which will be there, you will be elevated to different tiers.

[00:06:52] Based on that, your benefits and your privileges will also increase, I would say, yeah, from point cards environment, we have actually moved to the customer relationship management of the CRM, which today, more or less every organization or brand is doing. Right. And finally the transition which has happened is to the customer experience.

[00:07:09] Jiten: Mm-hmm. 

[00:07:10] Dilpreet: So the core has remained the same which is to put the customer at the center.

[00:07:14] Jiten: Correct. 

[00:07:14] Dilpreet: And then make your customer feel special by providing him or her the benefits and the great seamless experience, which everyone is looking forward. So today also, like when we, talk about the customer experience, like again, there is a kind of a misconception in terms of who actually owns the customer experience. So as, as per my experience and my belief, I, I, definitely want to convey this point that the owners of providing the seamless customer experience actually lies with everyone. Any person who is working for the organization, irrespective of which department or vertical they work for, the onus is on them to provide the seamless customer experience and the reason for that is that at the end of the day, whether the customer is not interacting with the department or the vertical. What an organization or a brand, if the experience is hampered at any point of time, at any stage, whether it's, I would say the transactional stage or the interaction stage, which is there, the brand will lose the customer and no service recovery can revive the broken relationship and experience which customer had. 

[00:08:15] Jiten: I'm, I'm, I'm glad you kind of said who owns CX because I think, sorry, CX means customer experience and I'm kind of, I'm glad you highlighted that because that sometimes becomes this, a point of contention at times.

[00:08:26] Right. Is it, especially from a department perspective, should somebody from the marketing owner, should somebody from the operations owner should somebody from whichever other departments. 

[00:08:37] Dilpreet: True, true. 

[00:08:38] Jiten: Yeah. 

[00:08:38] Dilpreet: I feel like everyone would be able to relate it to also cause when I'm talking about the owner liaison, key department and key person who is engaged, associated with the brand.

[00:08:47] Cause if you just take a very simple example of e-commerce, which today, like almost every person would be using whether for retail, for food or for anything. Today we just take a very simple scenario of browsing product on my, on, on any of the website later.

[00:09:01] So hypothetically, I'm talking about a Levi's jeans. So today if I want to take a Levi's jeans and I, go to any of the e-com giant, like Amazon, Myntra, Flipkart and any of them, but for some reason I'm not able to find that. So in that case, the website and the product team, they are at the fault and the onus lies with them. You were able to find the product.

[00:09:21] You were promised that the delivery will be done within five days, where it got delayed to seven to eight days. In that case, the logistics is something which has actually kind of hampered the experience. You contacted the contact center. You didn't get the post call resolution. That is the customer services, the department. Due to which your customer, experience, got, got hampered in this case, like I believe it's a kind of a loop which the brand has to make sure is, is, closed so that the seamless experience can be provided. 

[00:09:50] Jiten: Super. I understood now. Got it. Right. So which brings me to my next question, and I think I'll break it up into two parts.

[00:09:56] Yeah. One is obviously I really wanna know and I'm sure a lot of listeners do. Over the last few years, you've kind of, I think, seen the hospitality industry pre and post pandemic. Right. Do you think something has changed? Nothing has changed. Has it changed if, if something has changed? Has it been quite drastic? Yeah. 

[00:10:15] Dilpreet: So, again barring I would say a few operational things which got changed, which I'll just be covering in the later stage. But yeah, today when I'm talking about the hospitality industry, so it is unlike the other industries, it is completely experience driven. It is not a product driven industry which is there, and in case the experience is hampered.

[00:10:34] So no service recovery will be able to bring back that experience with the person intended to have. So whenever you are there at a hotel whether for business purpose or leisure purpose, what you want is the experience which is there.

[00:10:47] Jiten: Right.

[00:10:47] Dilpreet: So today when I'm talking about the hospitality, I believe the sense of the hospitality service, and in case you want to take one to take it to the next level, which is the personalized service, you need to work on two great levers, which is data and technology.

[00:11:01] So traditionally, if I just talk about maybe some seven, eight years back, so hospitality industry was only measuring the effectiveness at a very macro level. So if I'm saying that today, if I want to understand how my business is performing, so I will simply be saying what is the total ARR which is the average room rent into the number of guests who have come. If I just do that. So that is a total revenue. So marketing as a business or as a department was just operating on a kind of a spray and pray mechanism, which intended to have more people which will giving you the more business. So more people you are able to reach out to, they'll be giving you more business.

[00:11:38] Jiten: Right. 

[00:11:38] Dilpreet: Unfortunately, that is a kind of a wrong assumption, which was the 

[00:11:41] Jiten: Mm-hmm. Mm-hmm. 

[00:11:41] Dilpreet: So the micro lens, which, which, should have been there was missing at that point of time. In, in terms of understanding who my customer are, where they're coming from, who is a profitable customer, who I want to chase out to get additional business, which companies working, which is not working, what are some of the areas where every department has to work on. So that, that was not there.

[00:12:01] So ultimately, I would say the unified view and the holistic picture, which a brand needs to see was missing. And energies, which were, every, every department or every person was putting in. So they were actually going into the wrong direction. So this was the case, a decade back or so, but yeah slowly, more or less each brand in the hospitality industry, they have also realized the need of that thing. How, how we worked on that, how we were able to kinda, cracked it, in, in the hospitality vertical. So we actually worked on four box frameworks. So starting with the first, which was know your guest because ultimately, like, everything as I told you, that if you want to give a seamless experience and a personal service, you need to, kind of work on the data which is available.

[00:12:43] So know your guest actually works on the complete data captured mechanism in terms of what are the prominent data sources through which I will be able to get the data. Once the data is there, you need to clean the data. You need to kind of work on the identity resolution problem, which most of the hospitality industry brands are going through.

[00:13:02] The standardization, which needs to be there, once that thing is there. Then the second, boxes, mindful insights, which actually works on now the data is there. We just need to segment the data, profile the data. What are some of the variables which you are having for your guest basis that you need to do the scoring in terms of hope.

[00:13:19] Like these are the people who are, I would say more prone to stay on a weekend. These are the people who would be spending on F&B. These are the people who will be spending on laundry, something like that.

[00:13:30] Jiten: Right.

[00:13:30] Dilpreet: Once that thing is there. Then the third part is the build relevance. So you have the data, you have kind of done the complete segmentation and the providing.

[00:13:37] The third part is the build relevance because like without relevance, everything would, not, not lead to the outcome which you desire for. In terms of building the relevance, like again, the focus has to be on all the key performance indicators, which should be there, the personalization, the customer journey mapping, which you will be doing at the campaign management. The last important aspect to that is the monetizing the relationship, which we're actually, the end result is the loyalty, which would be there.

[00:14:02] So when you map the customer engagement, map the customer journey also, like it will lead to enhanced retention, increased share of wallet and more and more reference, which we'll be getting from your loyal customer. So there you can say okay like, this is something which we intended to do and now we have monetized the relationship, which, which was there.

[00:14:23] Jiten: Interesting point. And, I would like to quiz you a little more on this the four box framework. I think you kind of beautifully put it and explained it. Do you think something like this which the hospitality industry is using, do you think something like this would really fit in well with the retailer industry?

[00:14:41] I know there is some similarity between hospitality and retail,

[00:14:43] Dilpreet: mm-hmm. Mm-hmm. 

[00:14:44] Jiten: That we all start with the customer, but do you think a framework like this would really help in the retail space. 

[00:14:50] Dilpreet: See, I believe it would definitely help because as I said that irrespective of the industry, irrespective of the brand, at the end of the day you are catering to end customers.

[00:15:00] So today, when I'm talking about the customers, so each and every individual is driven by certain incentive. For certain people, it might be the commercial aspect which is like the pricing aspect, which is there.

[00:15:12] Jiten: Right. 

[00:15:12] Dilpreet: For certain people, it would be the quality which would be there. Today you would be hearing a lot of stories or the complaints which many commerce customers are putting on Twitter or some other social platforms. That, I, I bought a product but the quality was not good. I, I bought the same product from another e-commerce platform, but it was good. But again, the trust factor is there. The quality is something which everyone is aiming for. The third would be, again, the loyalty programs. Like again, today I'm talking about, Amazon.

[00:15:40] If Amazon is having Amazon Prime and the person is a member of Amazon Prime, he knows that I will be getting certain additional privileges and benefits when I, shop from here. Then again, that will also make a lot of. So, like, again, as a brand, you just need to identify that what are some of the incentives, which the, your, your customer is driven by.

[00:16:00] And then at a timely basis, you need to put these nudges in place so that you are able to get attention of your customer and you are able to convert that customer. But yeah prima facie, I believe like model like this would definitely help any of the brand irrespective of the industry they operating. Like today, when I'm talking about, specifically from marketing point of view. So there are, three important questions which every marketer, wants to have an answer to. The first is whom to target, what to offer and how to reach. So whom to target is definitely the complete segmentation, which you're doing.

[00:16:33] What to offer is the offer optimization. What kinda nudges, what kinda incentives the person you looking forward to. The third is like today when we are living in a connected, digital environment, so there are like, what channel is being preferred by which customer? For someone it might be email, for someone it might be WhatsApp, for someone it might be the social platform.

[00:16:51] So in, it's a kinda a multi-dimensional framework which every brand needs to work on to get more out the effort we're putting in.

[00:16:59] Jiten: Super, super. Four box framework, I think four box framework kind of equates to whom to target. Obviously it helps you because you're collecting data and then learning more about the customer.

[00:17:12] Dilpreet: True. 

[00:17:12] Jiten: Based on that, based on that, then you kind of do the segmentation. You're gonna do the analysis and say, what do I offer each of those customers? Right. 

[00:17:19] Dilpreet: Based on their behavior. That's correct. Yeah. 

[00:17:21] Jiten: And how do I reach, how do I reach them? Super. Right. And come back to the point when you, when you knew we had the initial call and you told me you're working on digital transformation initiatives through the implementation of CRM and loyalty. I wanna know more. So is this, is this part of it, but what else does it constitute? And because digital transformation obviously is a large topic and it encompasses multi-facets of the business.

[00:17:47] Dilpreet: Mm-hmm. Mm-hmm. Mm-hmm.

[00:17:48] Jiten: But specifically CRM and loyalty programs, how is it kind of, feeding into both? Right. 

[00:17:53] Dilpreet: So again, like as you said, the digital transformation is, kind of a talk of the town, today. So I would say like in today's digital era where we are living in more like a kind of an experience economy environment, where consumers are dealing and engaging with multiple brands across varied industries at the same time, and, the customer behavior has changed so much and the expectations have changed so much that customer actually expects the same kind of experience irrespective of the industry, they are dealing with. So today, I would say like, let's suppose I'm, Apple iPhone or iPad user or a Netflix user would expect the same level of experience when they are buying, pizza or when they're buying burger, or even if they're staying at the hotel. 

[00:18:34] Jiten: Mm-hmm.

[00:18:35] Dilpreet: Cause, I would say, well, unlike what would used to happen from five to seven years back, It was a lot of dependency was on the brand. So today most of the customers want to do it themselves. So wherein like they want the control to be in their hand. So like I'm talking about today, again as a industry specific numbers, I'm talking about, the contribution of the reservation, which are coming from the brand website.

[00:19:04] So that is somehow, somewhere in the range of 10-15%, which is there. Which is again, like, taking into consideration of volume. The customers are browsing your websites. The kinda experience they are looking forward to is good into any digital app, which they will be browsing for. Now, coming specifically to the loyalty and CRM. Loyalty and CRM are the two, key aspects of their digital transformation, which actually enhance the customer experience, thereby increasing the retention also.

[00:19:32] Now when I'm talking about hospitality industry or maybe some other traditional brands or the industry which would be there. So unfortunately, I would say a lot of traditional brands have this issue. And it is common across all these industries would be the fragmented databases which would be there.

[00:19:49] That would be one. The second would be the non unified brand experience. And if the data part is not there. So again, whenever the customer is interacting with them. So every time that person is getting a different experience. So that's a Nonunified brand experience, which would be there. Organizations are not having a single view of the customer because of which they are doing a kind of a mass communication which is non-personalized.

[00:20:11] There is no such tracking on the marketing campaign effectiveness, which is there. So here also will, like again at this point of time, I might be able to reveal all the details since it's I would say a bit, confidential at the moment. But yeah, in a very generic, environment, if I just have to speak about that. Cause like, I've been working on this for the last decade or so. I would say, again, to summarize, I believe like the brand needs to have a kind of a four C framework, through the CRM loyalty. It's a very simplified version of what exactly is the expectation you have and how CRM loyalty would be able to help you.

[00:20:44] Four C Framework is capture, cluster, communicate, and control. So when I'm talking about the captures, like again, which all data sources are there, which you, want to have for the data from. The standardization needs to be done basis, which you will be getting a unified view of the customer. Once you have captured the data, the second point is the cluster wherein again, you'll be working on the segmentation basis, the RFM, which is recency frequency, or the monetary value, or like, again, there has been a lot of dynamism in terms of, how the segmentation has also changed. Like today, I would say most of the brands are operating on a kinda a segment of fund where they have moved away from macro segmentation or the clustering. So places, multiple, I would say variables or variables. They're kinda having a micro level segmentation. So each customer is different irrespective of whatever action they are taking. So that is the clustering, which is there. The third part is the communication.

[00:21:40] So like, again, communication can be enabled through, mapping the end-to-end customer journey. By having the CLM, which is the customer lifecycle management, the drip campaigns, which can be used where the human intervention is almost zero, the technology would be able to enable it. 

[00:21:55] Jiten: Mm-hmm. 

[00:21:56] Dilpreet: And the last part is the control. So again, under the control, it would be the analytics, the reporting, the dashboarding, the KPI. It give you a clear perspective in terms of focus. Right. You have captured the data, you have clustered that thing, you are communicating and then you are controlling whether it is working, not working. Cause again, unlike the traditional setup and talking about the CRM loyalty, which is actually kind working the through the digital transformation.

[00:22:17] So the campaigns are not working, I don't have to wait for days, right? Within minutes or within hours, I will be able to change that. So today, I believe for all the, transactional, all the traditional industries and the brands, the objective has to be that they need to get kinda a single view of the customer to identify the opportunities for relevant personalized communication, which would enable higher level of repeat, higher level of retention.

[00:22:47] Therby creating the brand loyalist.

[00:22:49] Jiten: Interesting. Super. I've learned, I think. Glad that you mentioned the post network and I kind of, again, capture it. So a lot of, I think, very interesting insights coming out of this podcast and I'm, I'm so glad Dilpreet, I got you on.

[00:23:01] Dilpreet: Pleasure. Pleasure. 

[00:23:02] Jiten: And one of the questions I wanted to ask, and I think you answered part of it, is, how is CRM and loyalty helping experience, right? I think you kind of touched upon it, 

[00:23:10] Dilpreet: mm-hmm. 

[00:23:12] Jiten: But is there anything is, is our brands doing enough. And when I say brands, I say generically. It is not 

[00:23:17] Dilpreet: mm-hmm.

[00:23:18] Jiten: specific to any industry or, but generically are brands doing enough?

[00:23:22] Dilpreet: Okay. So again, like again, I I will, should I be saying this or not? But like, again, there's a kind 

[00:23:28] Jiten: Go ahead.

[00:23:28] Dilpreet: Misconception. Yeah, sure. That there is a kind, a misconception that, CRM and loyalty are different. So actually it is not so like to me, I would say both go hand in hand. Actually loyalty programs, per se. So these are one of the, I would say, important drivers and enabler for effective CRM platforms. So today when I'm talking about the CRMs, like again, it is a, I would say a combination of, three Ps, which is people, platform and processes.

[00:23:55] Cause ultimately, like technology would be helping you with, giving you a platform which would kind of automate a lot of the things, which you, were doing manually. Then the processes, which are there, you just need to kind of simplify the processes, both for the employees, also for the customer also.

[00:24:10] And at the end of the day, this platform and the processes will be used by people. So a lot of empowerment is something which needs to be given to the people so that the decision making is very, very fast. Again, it's a combination of these three Ps people, platform, and processors, which, which is, about the CRM also, like, again, when I'm talking about the CRM implementation, once starting is done, so like, the complete flow would be CRM would be enabling a good level of engagement, which would be increasing the loyalty.

[00:24:38] Now, this loyalty would be increased either by a loyalty program or through the tactical promotion, which the brand would be, 

[00:24:44] Jiten: right. 

[00:24:44] Dilpreet: So loyalty in a way is a kind of a subset of the CRM. And at the end of the day, like again, anything which is not having a kind of a proper measurement or proper expectation.

[00:24:55] So like you will not be able to get more outta that. So once the loyalty program is there, which you need to, kind of, implement, you need to have certain I would say objectives. Right today, irrespective of which industry you work for. So I would say at a very broad level though, there would be multiple, objectives, which most of the loyalty program would be having.

[00:25:16] But broadly, I would say, the objective, which every loyalty program should have or, or is having, is to drive the retention, increasing the share of wallet and creating the brand ambassadors. In, in nutshell, almost 95 to 97% of, the efforts which you're putting in should be aiming towards these three things, which are driving the retention, increasing the share of wallet, and creating a brand advocates, which are there.

[00:25:38] We need to understand that loyalty, would be addressing certain, I would say business challenges, which you would be having post would be the new acquisition, which you will be getting through an attractive, loyalty program construct, which you will be having. Second would be the referrals because like once you are having loyal and satisfied consumer, they will be going out in the market, will be becoming a brand ambassadors for your brand and bringing lot of referrals. Second thing is like once these people, start engaging with the brand more so like you will be able to increase the share of wallet whereby they increasing the, CLTV, which is the customer life-time value. The third important would be that you will be also enjoying a higher level of retention, since you will be able to reduce the churn by providing what customers are looking for by understanding.

[00:26:25] Jiten: Got it. Got it. Yeah. And I, I think during the whole conversation. I think you've kind of kept emphasizing on retention. Retention, right? 

[00:26:33] Dilpreet: Yeah. 

[00:26:33] Jiten: Yeah. And it's so, so very critical to do that because, and I, and I'm going back to one of the podcasts that I did maybe a couple of years ago where somebody said, retention is the new acquisition. And I think he was, 

[00:26:45] Dilpreet: I totally, I completely agree. Because again, like again, when I'm talking about, the loyalty also, like people do have this misconception that loyalty can be derived through loyalty program, unfortunately is not the case. So like, again, when you need to understand that again, like, it takes ages to create loyalty but overnight loyalty can be shattered by just one bad experience.

[00:27:10] Jiten: True, true. Absolutely. Which actually brings me to that question, in fact, and you, well you didn't specifically say retention, new acquisition, but I think your entire emphasis on retention, I think really meant that, hey what this is critical. 

[00:27:26] Dilpreet: So just, just to add on what you said, I believe with the acquisition, without the retention of retention, I think that is useless. 

[00:27:32] Jiten: Oh, okay. So when you focus on a very important point, CRM or loyalty, similar or different, right? So if for a, for a brand trend, again, I'm, I'm talking industry agnostic. What should the brand really start off first with, right, should be CRM or should they start with loyalty or should start with CRM and then move into a loyalty or rewards later on. What would you really suggest.

[00:27:58] Dilpreet: See, I believe like first and foremost is, you need to have a mechanism in place wherein you get better understanding of your consumers. When I'm talking about better understanding of consumers, like again, it depends on how scalable your business is. Like again, getting to know the problems over consumer than working with multiple stakeholders to get a resolution to that, that, that plays a very important role.

[00:28:22] Like, there are certain companies who are kind of, I'll just give you a very simple example. So like, again, again, it's a kind of a legacy, these things, like all these, people who, like they give them newspapers in the morning. So without maintaining any database, without maintaining any technology, so they are operating with a very high level of accuracy in terms of who needs Times of India, who needs Hindustan Times, who needs Indian Express.

[00:28:46] I think the margin awareness is quite low cause they understand who the consumer is. So today, when I'm talking about whether it's a CRM thing or the loyalty campaign, like in certain level, just having the system in place, just having the program in place would not, give a, a resolution to your problem unless really want to, get into this.

[00:29:05] So the core to that is that you just need to understand the psyche of your consumer and who your consumer is, what they're looking forward to, and how you'll be able to give them. That would be the case also, when I'm talking about, like again today, a lot of the people and I just trust based upon that point, or also like again, loyalty program will not lead to high level of loyalty.

[00:29:23] Cause you just understand all these incentives and nudges. There are certain stages to loyalty. Like I believe there are three stages to effective loyalty, starting with the, transactional loyalty. So wherein like as and when the people would be getting some incentives. So they would be using these loyalty programs.

[00:29:41] The prime example to that would be to just go back maybe five, seven years back, when the emerge of these, I would say the mobile wallets was there, be it the PayTM, be it the PhonePe, or the Mobikwik or the likes of that. They were just doing, like for every transaction you were getting some gift for every transaction you were getting the, the cash back. So like, irrespective of whichever brand it was, who so ever was giving the highest level of discount or the cash back, people were doing that. So that's a transactional logic. The second is the behavioral loyalty. So like soon we realize that these players have stopped giving the discount and all, but like again, our behavior was so changed, like there is a typical example is that whenever you want to pay a utility bill, whether it's for the gas pipeline or for the electricity or for your phone just by click off a button, you will be able to pay that. So that's a kind of a behavioral loyalty cause they were able to shift the behavioral mindset which was there. The third is like, actually it's a kind of, nirvana for every brand is the irrational loyalty, whether the discount is there or not, whether some other factors attached to that as being fulfilled or not.

[00:30:47] If you have a good experience with the brand, irrespective of all the problems or so, you will be engaging with the brand. That's the irrational loyalty, which every brand should be. 

[00:30:57] Jiten: Irrational. Pretty interesting, very interesting, way you kind of put that together, right? So transactional, behavioral and irrational loyalty.

[00:31:05] Dilpreet: Yeah. 

[00:31:05] Jiten: So, you've been, you've spent a lot of time and have experience across different industries, different ecosystems or different, businesses. So to say, so the question again is in two parts. What do you think the next few years holds for the industry? Yeah, and the second part of the question is what suggestions or what, recommendations do you, would you have to share, with with brands who are here, which they can take off as a learnings?

[00:31:32] Dilpreet: Okay. So again, it, it has been a, as I told you, it has been good journey, a lot of ups and downs and a lot of learning also and adoption of the technology and other aspects also, actually helping them kind of enhancing the customer experience and getting seamless operational excellence, which is the every one of the thing, which most of the brands need to understand is the kind of the anatomy of the loyalty program. As I said that today, every, I would say one in four customers will be part of some other loyalty program. As a responsible brand, you just need to understand the anatomy of the loyalty program, which is again, to divide into three part, which is the goal, action, and reward.

[00:32:16] So brand just need to work on a course. Like what is the goal of which we are operating, this loyalty program, I want to have acquisition, I want to have retention, I want to increase the share of wallet, increase the customer lifetime value, optimize the cost. So this is the goal loyalty program would be having.

[00:32:31] Now, what is the action, which, which it requires to fulfill this thing? So action would be like, again, having a single view of the customer, providing a better, seamless customer, journey, which would be there having a good, level of segmentation wherein you are reaching out to the customer with a lot of relevance.

[00:32:48] That is the action, which needs to be there and on top of that, like when I just spoke about all these, incentives and the nudges, that is the reward. Like what is the best reward? Whether it's a kind of a, value driven reward or the perceived value reward, which is there, like, again, to differentiate between the two. If I just take example of the hospitality industry, depending, like if you stay in the next 90 days, I will be giving you a 20% off on the public rate, which is there. So that is the value driven reward, which is there. Second is like if you stay in the next 90 days, I'll give you an a guaranteed upgrade to the next room category that is more perceived.

[00:33:23] No particular value is attached. So that's a perceived value, which is there. Then the overall experience of which the brand needs to do the value proposition, which is there. So it's again, a kind of a multi-dimensional thing of, goal, action and reward, which, which, brands need to keep in mind, while creating the loyalty program.

[00:33:41] But again, just by having the loyalty program, it doesn't give you a guarantee that, people will be coming back to you unless, until you are having a very, I would say solid value proposition for it. Right. 

[00:33:51] Jiten: Right. And anything that the next few years hold, what, what do you think, what, what suggestions you would have for brands possibly who getting into it now?

[00:33:57] Dilpreet: Mm-hmm. Mm-hmm.

[00:33:58] Jiten: like what do they need, keep in mind for the next couple of years or so? What do you need to focus on? 

[00:34:03] Dilpreet: So, I believe again, it's, it's a very it's a dynamic, environment where we are operating in like certain things, which, which are going to remain same. It just some enhancement is required. First and foremost is I would select brand needs to invest in culture.

[00:34:16] Again, talking about any industry, ultimately, people are the one who are giving the end month delivery, for that thing. So like, again, you have to kind invest in the culture. Second thing is like, again, the complete transformation or the complete funnel, which is there is happy employees lead to happy customers and happy customers lead to happy shareholders.

[00:34:35] Jiten: Mm-hmm. 

[00:34:36] Dilpreet: Again like unless and until your customers are not happy cause your employees are your internal customers. So you need to take care of that by creating your culture privilege where they feel, I would say, someone who's being heard of and, their opinion actually matters that would be great. The next important part is again, don't, like fall in the track of these buzzwords like AI ML and other things like this kind. Do things with a lot of, simplification. The focus, I would say focus would be more on the loyalty rather than the loyalty program. Again, having more and more people in your loyalty program is just a kind of a vanity metric. Are these people engaged with your brand? These people kind of having good in mind, good amount of business which they're giving to, your brand that that matters lot.

[00:35:22] So focus on loyalty rather than the program. Another thing would be, I would say technology is more like a kind to deliver the seamless experience at the end of the, the proposition and customer experience matters, which is just focus on the, kind of services and the products which you are, able to give to your consumer.

[00:35:41] Cause technology will just be kinda an enabler to that. Yeah. These would, be certain things based on my experience. I understand. Right. 

[00:35:49] Jiten: So these are some of the things that you think brands should really focus on.

[00:35:53] Dilpreet: True. True.

[00:35:54] Jiten: Okay. No, absolutely, I think the environment becomes so dynamic that you don't know what's gonna happen tomorrow.

[00:35:59] Dilpreet: Yeah. Yeah. 

[00:36:01] Jiten: Super. Yeah. I think just one last point. Something that you, mentioned in the beginning. 

[00:36:06] Dilpreet: Mm-hmm. 

[00:36:07] Jiten: Yeah. And cost optimization. 

[00:36:09] Dilpreet: Yeah. 

[00:36:09] Jiten: Right. I think pre pandemic a lot of brands, I've been also on the other side, so, we never really, never really looked at cost optimization as a very serious,

[00:36:19] Dilpreet: mm-hmm.

[00:36:20] Jiten: Saying, okay, let's see what happens. 

[00:36:23] Dilpreet: Yeah. 

[00:36:23] Jiten: As a kind of approach, but think it's become extremely relevant today. Not just relevant, I think it's being imposed, on, on brands. 

[00:36:31] Dilpreet: Mm-hmm. 

[00:36:32] Jiten: In terms of , how, how to really work on this. And then, and I guess a lot of what you said, allows for this to happen. If you're really streamlining your, operations, especially on marketing perspective, and you're focusing your attention, you're focusing on wallet share. 

[00:36:44] Dilpreet: Yep. 

[00:36:45] Jiten: You're focusing on relevancy of communication. You're focusing 

[00:36:48] Dilpreet: mm-hmm. 

[00:36:48] Jiten: Focusing on the right channel to communicate to the customer with. Right. I think hopefully all of this adds to, all adds to the cost optimization bit where I think the overall lifetime value of the customer on the profitability, I think really increases. 

[00:37:05] Dilpreet: Yeah, it would be there because like again, like if you're customers acquisition is.

[00:37:10] Invested in your own channels, like your brand website or the Google app. Then the dependency which you are having on the aggregator, that would definitely go down so your distribution cost is something to kinda control. These are some of the examples, like again, the list would be endless. 

[00:37:27] Jiten: Dilpreet, thank you so much for taking your time. I think it's been an absolute masterclass today. Listening to you walk us through, the key facets of CRM and loyalty and how all of this really are interconnected and help improve customer experience. 

[00:37:45] Dilpreet: Thanks. Yeah. Thank you for having me. And it was indeed a pleasure, speaking with you. 

[00:37:49] Jiten: Absolutely, absolutely. And, and thanks so much for sharing some of the frameworks of putting it very simply, right, like Four C's, capture, cluster, communicate, and control. Or even if you wanna look at a complete program, then how do you put it maybe in a different perspective by via the four box framework.

[00:38:05] Dilpreet: True. True. 

[00:38:06] Jiten: Yeah. I think excellent. I think so beautifully put. Thank you so much once again and absolute pleasure. 

[00:38:13] Dilpreet: Thanks JP, thank you. 

Retail Reimagined is a podcast series that features CXOs from the retail industry who are at the forefront of digital transformation and customer-centricity.

Yours, Digitally! is a digital personalisation podcast dedicated to leadership & marketing teams of retail brands who are looking to shift from conventional marketing to digital personalized marketing like Amazon, Spotify & Netflix have already done.




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