Thinking on Loyalty & Customer Experience

How do loyalty and customer experience connect to each other in this podcast

Kahran: Hi, I'm Kahran.

Divya: 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 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 3 hours a week. Those are the times when I'm wearing my workout shoes. But the fact that they're so amazing makes sure that I'm gonna buy my next pair of shoes from Nike as well.

Divya: 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, I'll just buy from this brand again and again and again.

Kahran: What, did you start using Nike run club first? Or did you start buying Nike shoes first?

Divya: Yes. At the same time.

Kahran: Completely at the same time.

Divya: 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 Nikes.

Kahran: 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 nothing. Like, it's just the brand has created multiple ways for you to kind of hang out with it. And 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 haven't, obviously, I haven't spent that much time in it. 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, I mean, like, I'm.

Divya: Not as attached to any of those.

Kahran: 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 at 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, I think we talked about it in the context of, BTS and how there's all these different ways for fans to engage with the band. Like they can 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 the loyalty journey.

Divya: 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 on Nike Run club app, ah, has had like such a positive, just shifting the outlook of how I look at run. 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.

You feel like the brand has done something for you, right?

Kahran: Can I just pause you for 1 second though? Like, I think what's so interesting right there, because 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 be, 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, you were saying that and I got excited.

Divya: no, that is very fair. I also feel that way about BTS. I was telling my partner recently that, 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.

Kahran: Wow.

Divya: Like, it was obsessive degrees, but I know that, like, their music made me so happy.

Kahran: Yeah.

Divya: but you're right. Like, I got so much joy out of it that I was like, huh? I'm gonna be your.

Kahran: 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 have this goodwill built up, that, you know, obviously it will affect the relationship more.

Divya: 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.

Kahran: Maybe she's confused.

Divya: yeah, she's an old lady. Maybe she doesn't understand things.

Kahran: maybe she'll stop soon, and then she just won't stop.

Divya: I mean, yeah, she's a billionaire. Nobody can stop her.

Kahran: Yeah, I mean, she can stop herself, but.

Divya: Yeah, well.

Kahran: You know, I think that's.

Divya: Maybe some part of.

Kahran: No, but. Sorry, sorry. I was gonna just 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, we're putting together on your website, and so I've been putting the podcast in different places, and then I'm pretty certain we have a mention in description somewhere that we Lampoon JK Rowling. Anyway, I'm so sorry, you were saying something?

Divya: No, 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.

Kahran: And you feel like that's what's taking you down the path of loyalty.

Divya: Hm. 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, I'll listen to their music if it comes out. There is nothing like, oh, my God, 100% must listen to everything the day it comes out.

Kahran: Interesting.

Divya: 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.

Kahran: That's really great.

Having multiple channels available to your potential customer can deepen the relationship

so on one aspect I think we both agree on, 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 your 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 here 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, is there something about values? Because I think that's where I started from and I still don't feel like I have a better answer than that. 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.

Divya: 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?

Kahran: Some things don't even move down the journey, though, much less. I'm not even saying super fan.

Divya: but like, if you use, like, let's say, 100 brands in a year, sure, you might become super fan of one.

Kahran: Okay.

Divya: 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. superfan is like, you know, I'm assuming more than five years of random, yeah, of 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 gonna go to people like, you're gonna. So 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?

Kahran: 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, but 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 don't know, is it like surf Excel? Right? Like back where we started?

Divya: Yeah.

Kahran: 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. but I'm like, it's good enough for my purposes right now. It's like, how much more can I invest and how much value could 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 ten days, right? And it's just like, it's very beautiful. Every day, like new, 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, I've 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 and like, using things are in season. And I'm just like, oh, the more I learn 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.

Divya: Okay, very interesting. Because what you are saying is, sure, statistically, surf Excel is also a winner of your knowledge.

Kahran: Correct?

Divya: Because you turned around to it. But qualitatively it's different what you feel about that brand versus what you feel about this flower brand that I haven't.

Kahran: Even ordered from yet, that I'm like, excited about ordering from m 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 figure out more about this. Like, I've recommended 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, hm. 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 that are very frustrating. about, like, they'll, I don't know, from the way they handle, like, like, delivery charges to the way they, like, will handle, like, just timing and things, like showing up way later than they would expect. And even the, like, the kind of people that are picking up the phone are like, they're just 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.

Divya: Okay, so, I'm not sure if this is the correct distillation of it, but as you were saying, 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.

India is a fairly brand starved market

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 gotten removed. They haven't. sometimes six out of ten is the best that you can get. So you get six out of ten 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 spend for the lack of a better term, more and more smaller brands are cropping up, and like, more and more people are trying out different things, exploring and all of that, but it's still very, very nascent in its development. so, like, the brand awareness and people are generally just not. People in India generally, at least especially ten 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 ten experience, and now that's no longer the truth for many, many people.

Kahran: So in that, for enough of, in that era, you think what was building loyalty was pricing?

Divya: Yeah. So, like, if you look at, startups, which came up in India in the past decade, 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 sign there is a significant chunk of people who will 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.

Kahran: Or convenience or some other attribute that, Yeah, yeah, interesting.

Divya: 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 a thing that we value. Those are the brands that people are going to be most, I guess, loyal to or inclined to purchase from, or inclined to build a relationship with. And as the market evolves, and so the customers 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, 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?

Kahran: No, it's not dissatisfying. I mean, I. I just wonder if it's enough. I think, for example, in the way we've started thinking about models and how you can bring different models to kind of help you, break down problems in different ways. 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. 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's trying to grow his business and he has a lead generation tactic right now. 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 a year is very hard. 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, I, you know, it was a great experience working with you. Hope you have a nice life.

Divya: Do you, 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.

Kahran: 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, when I say quickly there, I mean within years of, or months of starting, and a lot of times it's just a reflection of who started them, frankly. Right. 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, 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 kind of, like, alert when you see issues 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 organizations that I'm leading relatively quickly.

Divya: Isn't it also because you are self aware, like, I will give you a, I don't know, a counterpoint to this.

Many of the startups that I have worked with have lacked visionary thinking

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 or 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 power triangle was very skewed. Like, one person basically was relegated to doing operational stuff and, like, had no seat at the table.

Kahran: Okay.

Divya: 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.

Kahran: Okay.

Divya: but he just wasn't given the space to speak.

Kahran: But when you looked at the way that company presented to the customers, do you not feel like that value was.

Divya: Represented except that the founders never realized it?

Kahran: No, but I would. I like, they go ahead.

Divya: So the customers would realize it. Right, because the business shows that. Yeah, that you don't have, like, let's say, 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, but, 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 how a 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.

Kahran: But I would say it differently than that. Right. I would say that you need to show that you value visionary thinking.

Divya: Correct.

Kahran: And sometimes you. Right. Like, sometimes that might mean you need a visionary. But I think I'm just. I think I would contend that you. You can solve that in different ways if, it's just like, it's identifying.

Divya: If you don't have to embody. You don't have to embody the personality trait. Correct. Correct.

Kahran: Or.

Divya: But I'm just saying, like, I think most people are resistant to it. Well, yeah, exactly.

Kahran: That's what. Yeah, because if there also things that feel yden, like, they're stupid, they're bad at something.

Divya: 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.

Kahran: 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.

Divya: 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 where only one 10th of it is visible?

Kahran: 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.

This idea of, like, your customer is able to see your values

Divya: 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.

Kahran: Maybe it is just a simple summation.

Divya: 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, ten minutes ago. I think it's fair that we don't understand it fully.

Kahran: Okay. Very well. We will take it up in future weeks, I think.

Divya: I like this structure of how we have been having more. it's almost like the first season was us having random conversations, and now it feels like we are bringing those conversations together into, oh, this is where it all connects, or this is where I think it's.

Kahran: Because I put them all on a page with, you know, top level headings. That's one of my special abilities. I mean, your special abilities, too.

Divya: Don't feel so before you did that. No, no, no. I'm saying we started recording before you did that, but. Okay.

Kahran: Like, we started the season before I did that. Oh, I see. Yeah. Fair, fair.

Divya: I feel like it's like convergent evolution.

Kahran: Who's convergent evolution?

Divya: when.

Kahran: Oh, yes.

Divya: Species develop the same solution for the same thing. Like bats and birds both have wings.

Kahran: Yeah, yeah, 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, 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.

Divya: Oh.

Divya: 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 models 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?

Kahran: That's interesting. You think of that as being a mental model?

Divya: No, no, no. I was giving multiple examples. 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?

Kahran: I see what you're saying.

Divya: Like, we have discussed a lot of whats, but not a lot of hows.

Kahran: Yeah, I guess. Yeah. okay. Im excited about that. We can talk about the next time we visit this topic. How do you converge to this place?

Divya: Yeah, I like that idea.

Kahran: Okay, bye. Good talk. Bye bye.

Divya: 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.