Thinking on Loyalty & Customer Experiences

Hi, I'm Kahran. Hi, I'm Divya. And this is the 14th episode of Thinking on Thinking. In this episode, we started with an open question of how do loyalty and customer experience connect to each other.

And we knew that we wanted to talk something around brand values, but we weren't sure what it was that connected them. But somehow we waded our way through this entire conversation. And we think that we have arrived at both an interesting insight around what makes people loyal to a particular brand.

And we have also arrived at what we could be doing with our podcast in future. We hope you enjoyed this episode. Let's say on my best weeks, I'm probably working out three hours a day. Those are the times when I'm wearing my workout shoes. And the fact that they're so amazing, make sure that I'm going to buy my next pair of

shoes from Nike as well. I'm doing a lot of other things while I'm working out. Like I have clothes, like I haven't settled on clothes for workout, which are perfect. I'm still rotating through things. Nothing feels amazing, but like the shoe decision just feels like, huh, I'll just buy from this

brand again and again and again. Did you start using Nike Run Club first or did you start buying Nike shoes first? Yes, at the same time. Completely at the same time. Maybe Nike Run Club.

Maybe Nike Run Club first, but we are a Nike household. So everyone in our house has Nike shoes. But I've tried like before this, I had Puma shoes. And March before I had Reebok, but I didn't like any of those as much as I like the Nike's. You'll have to like, you know, give me the benefit of doubt slightly.

But, you know, if you think about your experience as a consumer, if you, so you've, you have some sort of a positive association with the brand, right? Because as you're saying people around you already have exposure and they have positive things to say about it, but you, you experience this Nike Run Club, you use it. And then there's another way for you to hang out with it, right?

By having the shoes. And now when you're running, the shoes are always with you regardless of whether you're using Run Club or not. Like it's just the brand has created multiple ways for you to kind of hang out with it. And for, for even more engaged or, you know, or people who are a different point in that

loyalty journey, there's other things they could be doing, right? There's like all sorts of like, I don't know, like there's activities you can do. I don't know. I have the Nike app, but I have it. I'll just say I haven't said that much.

I mean, I know there's like a shopping section, but then there's these like other sections that I can like connect with people, I think. Um, I mean, like I'm not as attached to any of those. I know, I know. I don't think you're on that point in the journey.

What I'm saying is that other people who want to go further on that journey or who had a different place, they have those other ways for them to be spending time as well. So I look at that brand and I'm like, Oh, you've created all these different levels. I think actually it's something you and I talked about a long time ago and I think I'm actually parroting your own words back to you.

But, um, I think we talked about it in the context of, um, BTS and how there's all these different ways for fans to engage with the band. Like they can write across their music, across their videos, across their lifestyle. Like there's all these different levels and types of engagement you can do. And I think that's what takes you on a journey.

Hmm. So I would say it's combination of both. So multiple welding points definitely help multiple entry points in the world will also help. Like I agree with you that like definitely coach Bennett or Nike club app has had like such a positive just shifting the outlook of how I look at.

Yeah. Um, and then that is incredible. Like that is qualitatively and quantitatively so deep, like changing how I live my life kind of a thing. So definitely a massive positive association there.

But I think that the qualitative part also matters a lot. Can I just pause you for one second though? Like I think what's so interesting right there? Cause you feel like the brand has done something for you. Right.

And then this like element of reciprocity, just that right. That is a cognitive bias. We will push you further down the path of loyalty because you feel like you owe something to it in some small way, right? Like you won't, we won't necessarily be cognizant, but when you feel like you've

gotten this value, it's an unequal. It's just really interesting the way you were saying that. And I got excited. Yeah. No, that is very fair.

I also feel that way about BTS. I was telling my partner recently that, um, I don't think I could have gotten through the first part of pandemic without BTS. Like I just kept listening to like my favorite song. I heard it 500 times the first month.

Wow. Like it was obsessive degrees, but I know that like their music made me so happy. Yeah. But you're right. Like I got so much joy out of it that I was like, huh, I'm going to be a fan.

And sometimes all it means is that you're willing to give it more of the benefit of the doubt further down the road, right? Because you have this, you're like, Oh, when you have a negative experience, you're like, Oh, you know, must have just been a one off. Whereas if you haven't had this goodwill built up, then, you know, obviously

it will affect the relationship more. I mean, like how JK Rowling initially got a lot of benefit of the doubt from all the Harry Potter fans who are like, you know, so many people. Maybe she's confused. Yeah.

She's an old lady. Maybe she doesn't understand things. Maybe she'll stop soon. And then she just won't stop. I mean, yeah, she's a billionaire.

Nobody can stop her. Yeah. I mean, she can stop herself. But yeah. Well.

You know, I think that's maybe some part of the size. I was going to say, I think this is the second time we're mentioning JK Rowling on the podcast. I know because I've been reading the descriptions because I was, we're putting together a new website.

And so I've been putting the podcast in different places. And then pretty soon we have a mention in description somewhere that we lampoon JK Rowling. Anyway, I'm so sorry. You were saying something.

No, I was just saying, like I do think that is a good thing. I mean, I think that's a good thing. I mean, I think that's a good thing. I was just saying, like I do think that the qualitative part definitely comes from me feeling like I have gotten disproportionately high value.

Either it's initially or over time it is exponentially high value. And you feel like that's what's taking you down the path of loyalty. At least to the brands that I can think of. But like there are brands where long term loyalty also dies down. Like I was a massive BTS fan for a couple of years.

And now I'm like, huh, I'll listen to their music if it comes out. It's nothing like, oh my God, 100% must listen to everything the day it comes out. Interesting. Taylor Swift on the other hand. I didn't think I was a massive fan of hers, but apparently I do listen to

our stuff as soon as it comes out. That's really great. So, so on one aspect, I think we both agree on, right? It's important to have these kind of decision points or kind of moments that can deepen the relationship.

So being present in multiple channels available to your potential customer or actual customer, you know, just having different ways you can engage with them, you know, potentially, and then having kind of trigger points for those moments to be exposed to the customer. Fine.

So I think that's a necessary component. The part I'm wondering about is like, then what? There's so many brands that we see their social media posts. We engage with them in real life. You know, we, I don't know, hear their jingles, right?

So we engage with them on all these levels, but you don't feel a sense of loyalty. And I'm wondering, you know, is there something about values? Because I think that's where I started from. I still don't feel like I have a better answer than that. But it's that as you learn more about a company's values, you start to feel like

these are my people, people like me do things like this. But I would also, so that is true. But I would also add more on to that. How many things are you going to be a super fan of? Some things don't even move down the journey, though.

Much less, I'm not even saying super fan. Huh. But like if you use like, let's say 100 brands in a year, you might become super fan of one. Okay.

You might be loyal to seven or eight for like, you know, maybe let's say half life of greater than a year in that case for loyalty. Super fan is like, you know, I'm assuming more than five years of random loyalty. Basically, like, oh, this person is a friend.

This person is a good friend. That kind of like distinction I'm doing. And most of them would be non-remarkable. And now I'm just thinking, is it just a statistical? Well, you have XYZ amount of attention and some of it is going to go to people

like you're going to ask the identity point is very true. But would you just attach your identity to whatever is a best fit in a certain area amongst the brands that you have encountered? Well, sometimes it's not worth additional investment. You know, like, I'll give you this example.

Like I was trying to buy some sort of like organic detergent for a while. Right. And that I was only willing to order detergent from Amazon, you know, for a while I kept iterating through ones and just they weren't a lot of them were not cleaning the clothes properly.

So eventually I think we've like ended up, I know, is it like surf Excel, right? Like back where we started. Yeah. Am I loyal?

I'm loyal out of convenience. I know it works for me. I haven't looked too much into the brand because I'm pretty certain that I won't like what I find. Um, but I'm like, it's good enough for my purposes right now.

It's like, how much more can I invest in how much value can I get from it? I don't know. There's this flower bouquet that a friend of mine gave me and my husband in celebration of our wedding and we like have it sitting in this bowl and it's been like a week or I think it's been like 10 days, right?

And it's just like, it's very beautiful every day. Like you like, like lilacs are opening and just every time I look at it, I'm like, Oh, this is so lovely. So I like figured out like, I went and found the card. I looked at the company and been on the website like a couple of times now and

everything about it. I'm just like, Oh, this is so lovely. Right. Like they aren't crazily expensive, but they're trying to like be thinking about different kinds of flowers, like, and how dry flowers are more sustainable.

I'm like using things are in season. And I'm just like, Oh, the more I learned about this, the more I'm like, Oh, I want next time I order flowers, I'm going to order from you because it seems like you care about things I care about. Okay.

Very interesting because what you are saying is your statistically surf Excel is also a winner of your loyalty because you turned around to it, but qualitatively it's different. What do you feel about that brand versus what you feel about this? They haven't even ordered from yet, but I'm like excited about ordering from.

And like similarly, maybe I'll give you another example. There's this bakery I've started getting bread from and I've stopped kind of baking myself because the bread is just so great. Right. The product is just so great.

Now I've tried out some of their other things. They've been reasonable, but I haven't branched out too much, but I haven't tried the too hard to like figure out more about this. Like I've recommended it to some people, but I'm like, you know, this bread is nice. I'm happy with where I am.

Now I don't know why is it because I haven't had decision points. I think I've had some interactions with them and I'm just like, oh, the way you actually, I know what it is. So I think I've had some interactions with them and I've looked and I've been like, hmm, the way you run is not that well, right?

Like it's just they're not thinking about their customer that much. There's a lot of just like small things are very frustrating about like, I don't know, from the way they handle like, like delivery charges to the way they like, well handle like just timing and things like showing up way later than they would expect.

And even the like the kind of people that they're picking up the phone or like there's not like the bread is so much better product than the experience around the bread. So now I've been like, okay, I'm happy with this product. I don't necessarily need to move closer down into being like, I'm happy with my

level of loyalty. I would try out something else if it came along, but I'm happy like being loyal right now. I think, and I think this is the best I can do. Okay.

So, um, I'm not sure if this is the correct distillation of it, but as you were saying, um, this bread brand, it just made me realize that there is almost this understanding of the brand values that a customer gets through their experience. Okay.

Like what does this brand care about? What does this brand stand for? And of course, sometimes there wouldn't be a better fit in the market. Doesn't mean that the needs of the customers have, you know, customers have gotten removed.

Yeah. They have. Um, sometimes six out of 10 is the best that you can get. So you get six out of 10 and you live with it. Like for example, India is a fairly brand-starved market.

There aren't a lot of brands and like only now as people are improving in their luxury space for the lack of a better term, um, more and more smaller brands are cropping up. Um, and like more and more people are trying out different things, exploring and all of that.

Um, but it's still very, very nascent in its development. Um, so like the brand awareness and people are generally just not people in India generally, at least especially 10 years ago, did not have the money to spend on thinking about better experience. They were like, if I can save money, I'm okay with a six out of 10 experience.

And now that's no longer the truth for many, many people. So in that, for enough of. At that, in that era, you think what was building loyalty was pricing. Yeah. So like if you look at, um, startups which came up in India in the past day,

yeah, they were all focused on like just cutting the cost. And the general wisdom from people who have done sales at that point is also always, you just deliver the cheapest product and people will buy it. That is no longer the truth. There is a, there is a significant chunk of people who will like, you know,

price pay, like who will make decisions based on price. But there is also a reasonable market size, which will not, they will be willing to pay a little bit extra. They will be like, Oh, I can compromise a little bit on the price. If my experience goes from a six to an eight or I'm okay with that.

Or convenience or some other attribute that yeah. Yeah. Interesting. Like, so I would say that like people are generally thinking about even in the first case, the value that the customer holds is cost and the brand that shows

that low cost is what we can offer that is the thing that we value. Those are the brands that people are going to be most, um, I guess loyal to are inclined to purchase from or inclined to build a relationship with. And as the market evolves and so the customer's values evolve, the brands which have those newer values and can communicate those newer values in their

customer experience are the ones that are able to build that bond, which also means that like the market segment that has the values that you also have is going to be the market segment that has the most chance of building loyalty. So for example, even today, I'm sure that there would be people who would be, um, like very going hard on what is the cheapest thing.

Yeah. Right. Like price is their highest value, right? That's their P zero, but that market is not no longer 90% of the market. That market is maybe like, you know, 60% of the market.

Does that feel satisfying to you or does it feel like a dissatisfying resolution? No, it's not dissatisfying. I mean, I just wonder if it's enough. I think for example, in the way we've, we've started thinking about models and how you can bring different models to kind of help you, uh, break down problems in

different ways. Like I think there's so much to that. Right. And I think actually now that I've been organizing some of our podcast episodes, I think six different episodes talk about mental models in some way or form.

And I think here, I feel like this is kind of an insight. I don't think people are brands that like companies are thinking this way. Like for example, I was meeting with someone over lunch today and he was talking to me about how he was trying to grow his business. And he has a lead generation tactic right now, uh, but it's a big thing.

So his business is in film. And so what they do is they go out and do like big wedding films, but those wedding films are, they take forever to edit. It's, you know, it can take almost a year sometimes because there's so much footage. So doing more than two to three years, very hard.

Um, what he needs is to be able to do smaller things that are not going to take so many hours to edit and to be able to like have sustainable revenue coming into the business. Now, like we had a great conversation, but we didn't think about the thing that we're talking about right now, which is like, what will make people be more loyal

to you? And I think if people can understand your values, if your customers can understand your values as they're exposed to you, that is what's going to take them onto that loyalty ladder where then they're going to become your advocates and not just be like, Oh yeah, you know, it was a great experience working with

you. Hope you have a nice life. Do you think that that is because people don't have that lens or is it even more fundamental as a problem? Because I'm not sure if people understand what they value, whether within

themselves or within their business. No, I don't know if I agree with that. I think that most businesses, you can kind of get a sense of what they value pretty quickly. Right.

And I, when I say quickly there, I mean, within years of or months of starting. And a lot of times it's just reflection of who started them, frankly, right? And, and what they value. Like I'll give you an example. My sister's business is very much reflects her frugality in just thinking

about where money should go, frankly. So the businesses that I have been part of, particularly businesses in India, you know, I think that there's been more of an expectation that people will speak up, which is not always true in businesses in India, particularly if you're a more junior employee, a lot of businesses do not have that expectation of you that

you'll, you'll kind of like alert when you see issues or, or just even bring your ideas to the table. You know, I think that that happened relatively quickly because it's such an important value to me. It becomes part of the organizations, especially the organizations that I'm

leading, relatively quickly. Isn't it also because you are self aware? Like I will give you, I don't know, a counterpoint to this. Many of the startups that I have worked with as an external person to the founding team, I can often see where is the gap on what are you guys missing?

Right? Like what is the strength you're not leveraging on and what is the weakness that you are that is probably going to eat you up. Like for example, this company that I worked with in Mumbai, very quickly, it was visible out of the three co-founders.

The part at triangle was very skewed. Like one person basically was relegated to doing operational stuff and like had no seat at the table. Okay. And he wouldn't talk too much.

He wouldn't like, and I was, I would say that he was probably one of like the more capable of the three. Okay. Um, but like he just wasn't given the space to speak. But when you looked at the way that company presented to the customers, do

you not feel like that value was represented? Except that the founders never realized it. No, but I would, I like they, so the customers would realize it, right? Because the business shows that. Yeah.

That you don't have like, let's say, um, I would say this guy actually had a much more intellectual bend than the other two. If he had been given the space, the product would have gotten that empty thing. That was missing. Like the product lacked depth and this guy could have brought it, but he just was

never given enough of a say in the product. And the person who was running the product was like very egomaniacal almost. Very power hungry, cannot tolerate other people's opinions. Kind of a person. So the product also was very shallow.

Now, even as a part of the team and I know that the rest of the team could also see this, um, but the, like the founders couldn't. And I had tried to bring it up sometimes, but they just could not tolerate it. And I think that like that has happened multiple times. Like I've worked with one founder who wasn't a visionary.

I brought it to his attention multiple times. You will need to be a visionary if you want to be like thinking about changing how a particular domain operates. If you just want to build a business, that's a very different thing. But what you're trying to do is not just build a business.

You're trying to change our domain operates. You will need to be a visionary or you'll need to find someone on the founding team who is a visionary and nobody was. But I would say it differently than that. Right.

I would say that like you need to show that you value visionary thinking. Correct. And sometimes you, right? Like sometimes that might mean you need a visionary, but I think I, I, I'm just, I think I would contend that you, you can solve that in different ways.

It's just like it's identifying it. You don't have to embody, you don't have to embody the personality trait. Correct. Correct. Or, but I'm just saying like, I think most people are resistant to it.

Well, people feel like a personal. Yeah, exactly. That's what I'm saying. Yeah. Cause people are always just the things that feel like they're stupid.

They're bad at something. Correct. The fact that you are able to say, for example, that the businesses that you have started have a certain thread. I'm sure I can also say that like the kind of work that I have generally done,

for example, tends to be fairly chaotic because I love sorting things into mental models. Oh, what could be a model that I can apply here? What could be a thing that I can apply here? And so even if it's exhausting, I really like being in middle of the chaos

because I know that I can sort the chaos. It's almost like this weird, masochistic urge of getting into a very dirty room and cleaning it up. But like, I don't think that everybody can do that. So this is why I feel like it is a really kind of a bigger point, but it doesn't

feel like as big of a point as it is when you're asking if it feels satisfying. Do you feel like we have arrived at something, but we haven't arrived uncovered the whole thing? Like we haven't removed the curtains from the stage.

We have just seen, oh, there is a big stage, but we haven't, like, you know, revealed what is behind the curtains. Or do you feel like it's kind of like an iceberg problem? There are only one tenth of it is visible. Yeah, I was going to say it's like we revealed the curtain, but then there was

another curtain, but there was like a small prize. But then it's not clear if the other curtain is a curtain or if it's just like the backdrop. So maybe it's like an iceberg. I wonder if like it would be better to spend and think, like spend some more

time thinking about this idea, because like I agree, this idea of like your customer is able to see through the experience, what are the values that you hold true and loyalty or connection, like deeper connection is built through those values. If the customer has the same values as you have or whatever, like, you know,

you are able to communicate to them. Um, maybe it is just a simple summation. Or maybe we need to explore more and we don't know what are the different, because it almost feels like we have seen one aspect of it, but then we haven't seen all of the different aspects of how does that, how does this work?

Yeah. I mean, we just landed on it like 10 minutes ago. I think it's fair that we don't understand it fully. Okay. Very well.

We will take it up in the future weeks. Hmm. I think I like this structure of how we have been having more. Um, it's almost like the first season was us having random conversations. And now it feels like we're bringing those conversations together into this is

where it all connects. So this is where I think it's because I put them on a page and with, you know, top level headings. It's one of my special abilities. I mean, you're special.

Don't feel sorry. No, no, no. I'm saying we started recording before you did that, but okay. Like we started the season before I did that. Oh, I see.

Yeah. Yeah. I feel like it's like convergent evolution. Who's convergent evolution? Um, when species develop the same solution for the same thing, like bats and

birds, both have wings. Yeah. I like that. Oh, maybe that is the point. So maybe what we've arrived at is the place, right?

Which is that people need to be able to understand the values of the brands that they're, that they're, um, getting closer to and kind of taking them on that loyalty journey is a big part of that is showing them the values, but we haven't realized how you get there yet. And there may be different ways you converge there.

Oh. Huh. I don't think that we have approached that question anywhere. Yeah. That was a very good insight.

That was an awesome insight because like, I don't think that we have approached that anywhere, right? Like how do you build good mental models or how do you find the right mental model in a particular place? In this case, like how would you communicate your values properly?

What does it look like if you are not communicating? And what does it look like when you are communicating? That's interesting. You think of that as being a mental model. No, no, no.

I was giving multiple examples. Uh, like even in, you know, improving our thinking, I don't think that we've talked too much about how do we evaluate that our thinking is improving? What do we mean by improving and sharpening our thinking? I see what you're saying.

Like we have discussed a lot of what's, but not a lot of how. Yeah. I guess. Yeah. Okay.

I'm excited about that. We can talk about the next time we visit this topic. How do you converge to this place? Yeah, I like that idea. Okay.

Bye. Okay. Good talk. Bye. Bye.

Yes. Bye. Thanks for listening to this episode of thinking on thinking. Our theme music is by Steve Gomes and you can find a link to it in the show notes.