Exploring the Synergy of Human Insight and Technological Innovation to Redefine Customer Loyalty in a Digital Age
When was the last time you felt genuinely delighted by an interaction you had with a brand? So pleased that you told your partner, family member, or friend about that brand and how they made you feel? Was it an email a brand sent you? A social media post they made? Or was it a human interaction? Perhaps a sales associate went out of their way to help you, a customer service agent truly solved your issue, or a waiter remembered your “usual”.
If you follow the news and loyalty industry trends, it can sometimes seem like the human element in building customer loyalty is becoming obsolete. However, while technology is critical for achieving scale and consistency, it works best when it augments, complements, and ultimately follows human direction.
At Kobie, we believe that humans and technology should work together to build deeper, more loyal connections with customers. And the industry agrees. This year’s CRMC conference theme was Humanity > Technology. We work with clients often as they strive to achieve this synergy.
The What
Brands need a level of automated loyalty decisioning for program operations such as point calculation, benefit eligibility, and tier migration. However, when brands rely solely on automated loyalty decisioning for things like personalized offers, experiences, or customer service resolutions, the results can range from irrelevant to offensive recommendations, a lack of empathy in messaging, and reduced overall control of the customer experience.
The brands that truly understand the powerful role technology can play in augmenting their customer experience focus on establishing ecosystems that are human-guided, ethically used, and foster deeper connections.
Human Guided
When it comes to personalization, our 2024 Kobie Research Study, “The Heart of Loyalty,” revealed that customers expect brands to collect information on them, use it wisely, and aren’t averse to sharing, especially when there is an incentive.
To meet personalization expectations, technology plays a significant role in managing data, sorting it, and identifying differences. However, humans have an even bigger role in determining what data should be collected and how to collect it.
For inspiration, look at Stitch Fix. Stitch Fix uses AI to curate customer data, including style preferences, body measurements, and feedback on previous selections. Human stylists then provide additional context, creativity, and expertise to finalize clothing selections.
Ethical Use
Leveraging technology and collecting zero-party data requires transparent and safe data practices. However, to use data ethically, loyalty marketers must go beyond just keeping it safe, to understanding and minimizing as many biases as possible.
By nature, a loyalty program introduces a level of bias: your most engaged customers will sign up for your program and that self-selection and measurement needs to be transparently considered and understood. Introducing a human feedback loop into the process to acknowledge, identify, and provide oversight into the bias and systematically accommodate through data collection and algorithms helps reduce the risk of misleading insights or unethical use of data.
A great example of this is Sephora. As customers create an account, Sephora provides clear prompts on how they will use the data, in addition to the necessary privacy and consent policies. Sephora is renowned for their loyalty strategy, including channel consistency and hyper-relevant product recommendations. The foundation of Sephora’s loyalty strategy is built off the rich zero-party dataset they have earned from members based on their transparent and ethical data practices.
Fostering Connection
The entire reason we are doing the hard work of figuring out how humans and technology can best work together is to enhance the customer experience, deepen our relationships, and drive more profitable interactions. There are reasons to be excited about this prospect. The Royal Bank of Canada (RBC) and their AI-enabled assistant, NOMI, provides a great blueprint. One of the strengths of NOMI is its continual evolution to deliver more value to members – from starting in 2016 with insights and savings to adding a budgeting tool in 2021 – RBC is constantly considering how to deliver more value. That evolution is human guided, based on what matters to members. And the engagement from members leveraging NOMI are significant – with more overall digital interactions and 600 basis points improvement in churn.
Think back to the last time you were truly delighted by a brand. Did they foster a connection with you? For me, Spotify’s Wrapped campaign gets me every year. I love seeing who my top artists and top songs were. I was surprised that Rainbow Kitten Surprise made my #1 artist in 2023 and not surprised that Anti-Hero was my #1 song. It’s a social moment, a moment of human connection as I compare my Wrapped results with friends and family. This campaign highlights the best of how humans and technology can work together to deliver an excellent customer experience that builds loyalty. I noticed the Apple Music copycat this year, but my loyalty remains with the OG—Spotify.
The How
As a loyalty marketer, you likely possess a wealth of rich data poised to drive personalization and deepen customer connections. But do you know where to get started? Do you have disconnected systems and disparate data sources? Do you struggle with personalizing beyond the basics like name and tier?
If you are dealing with these challenges, you are ripe for a technology solution that augments, complements, and ultimately follows human direction. Where to start depends on your brand’s unique circumstances, but three common entry points include designing a robust data strategy, gaining deeper insights into your customer base, and pinpointing optimization needs within your current architecture.
Humans + Technology: Design a Data Strategy
If you aren’t sure where to start, one of the best places to start is with the outcomes you are trying to drive and identifying what data really matters to achieve that outcome.
If that data doesn’t already exist in your organization, you need to consider how you can go collect that data in a successful and scalable manner. This is where humans and technology work together:
- Human Insight: Human input is crucial for discerning what data is essential and aligns with the brand’s ethos. Humans bring nuanced perspectives to consider information boundary theory and determine the appropriateness of data collection in various contexts.
- Technological Implementation: On the technology side, zero-party data solutions such as game science and progressive profiling enable brands to acquire targeted data efficiently.
At Kobie we have found that starting with the data strategy helps prioritize how to best collect, augment, and activate that data.
Humans + Technology: Understand your Customers
If you have (or think you have) most of the data you need, you may want to start with a customer segmentation or persona project to better contextualize and personalize experiences beyond basic demographics. At Kobie, we initiate projects with machine learning-driven segmentation, ensuring scalability as a brand’s customer base expands. This approach scores new customers based on their transactional and behavioral interactions.
However, relying solely on transactional and behavioral data limits personalization. To deepen insights, we conduct primary research to understand customer motivations, habits, and interests. We also measure emotional connections through Kobie’s proprietary Emotional Loyalty Scoring (ELS) tool, assessing how segments perceive their connection to a brand based on Habit, Status, or Reciprocity. This framework facilitates more meaningful future personalization efforts.
By integrating machine learning-driven segmentation with primary research, we have transformed our client’s thinking on the growth potential and treatment of multiple key segments.
Humans + Technology: Uplevel your CRM
If you know what data matters and have it organized in an actionable manner, but still feel stuck, you may need to uplevel your CRM. At Kobie, we offer a composable loyalty CRM solution to help clients create greater relevancy for customers, optimize processes and resource usage and reduce costs while leveraging their existing CRM technology investment. This solution is powered through human-guided technology that:
- Leverages loyalty data and loyalty strategy to differentially support CRM initiatives.
- Is longitudinally focused shifting from next best offer to maximizing spend, satisfaction, and engagement over time.
- Powers personal, 1:1 trigger communication leveraging Kobie’s proprietary Signal Cloud.
- Is technology agnostic with the ability to integrate seamlessly on top of a tech stack without a full replacement.
- Is experiential agnostic to enable zero-party data collection through a range of partners.
Put simply, this tool helps clients augment weak spots within their current infrastructure to maximize the depth of experiences humans and technology can deliver together to build customer loyalty.
How Kobie can Help
From strategic loyalty services to better segment your members, to technological consulting to design the right data strategy, Kobie offers robust solutions to help brands move from stuck to unstuck when it comes to designing the best human-centered, human-guided technology solutions. As the only named Leader in both Loyalty Technology and Loyalty Services by Forrester, we are ready to help you navigate the future of loyalty marketing.
Reach out to Kobie to learn more about solutions and other strategic services, as the only named Leader in Loyalty Services by Forrester.
Written By: Katie Cassidy
Katie Cassidy, Kobie’s AVP of Strategic Consulting leads loyalty experience design and loyalty best practice engagements focused on meeting client program and profitability objectives. She is committed to having a data-driven and customer-centric approach towards delivering client value to every project. She specializes in value proposition development, traditional and digital CRM planning and execution, customer lifecycle and retention framework and short and long-range strategy development.
