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Greetings and welcome to the Loyalty program builders podcast, where we work with leading loyalty experts to address business and technical challenges in program development, guided by a strong customer loyalty strategy.
In this episode, we talk with Gianfranco Cuzziol about how to achieve successful personalization. We learn that it's not only about storing combining name and purchase history into personalized emails or personalized subject lines: it's about connecting with the customers.
Gianfranco Cuzziol boasts over two decades of customer relationship management (CRM) and personalization experience. He currently leads these functions for a group encompassing Aesop, Avon, Natura, and The Body Shop.
Previously, he managed Global CRM, including Recognition and Replenishment, at Aesop, where he implemented innovative customer engagement strategies.Â
Gianfranco's prior agency career involved collaboration with diverse brands such as BMW, Adidas, BT, Disney, and easyJet. Armed with a first degree in Astrophysics, he emphasizes that effective customer engagement doesn't require rocket science.
Gianfranco explains how personalization requires a purpose and a balanced approach. It's essential to have the right data and a capable team driving personalization efforts. Over-personalization can lead to overspending, while under-personalization wastes the opportunity of existing customers.
He argues that personalized marketing efforts in loyalty programs are about fostering emotional connections and relevance. And warns that, with heightened competition, long-term retention is vital, and understanding the customer journey is key to delivering a satisfying experience.
You can listen to the full episode on Spotify, Apple Music, Google Podcasts, and here:
About marketing personalization efforts:
About personalization:
The three pillars of a successful personalized marketing strategy:
About the role of personalized marketing strategies in loyalty programs:
About the future of personalization and personalized content:
"Personalization without purpose is pointless. It must solve a problem or fulfill a customer's desire. If it doesn't offer value to the customer, it's not valuable."
“Personalization should empower customers rather than manipulate or coerce them into making decisions.”
“Don't think you have to do the nth degree of personalization from day one. Start with the data you have and work towards your long-term goal.”
The following transcript has been edited for clarity.
Irek: Hi Gianfranco, great to have you on the podcast.
Gianfranco: Thank you, Irek.
Irek: When I was going through your bio, one bit stuck with me because you mentioned your role in charge of customer relationship management (CRM) and continuing the conversation with customers after they leave the store. How do you approach CRM?
Gianfranco: Exactly. The example you mentioned is from when I was the global head of CRM at Aesop. It was about continuing the conversation, as you said, that customers had with the store consultant, which used to stop once they left the store five years ago.
My task was to continue that conversation after they left, ensuring their satisfaction with their purchases and encouraging further engagement with the store. My approach is about continuing the conversation between the brand and the customer, regardless of where it begins. Whether it starts in-store, online, or in an app, the brand must be prepared to continue through the customer's chosen channel.
Irek: Great, because this actually gives you the feeling of personal conversation.
Gianfranco: It does. And that's where you have that conversation around “Do you always need personalization?” And this is where personalization comes in many guises, right? Sometimes it's called personalization, it's called segmentation, customization, optimization, recommendations? But I think I'm not going to talk about all of that because I think that's a whole podcast on its own. So for now, let's just stick with the word personalization.
And I think we have to try and not forget that personalization doesn't happen on its own. So there's no silver bullet platform that will deliver it for you without the right data, without the right team that's driving the thinking, the implementation, the execution of your personalization strategy. And there are lots of reasons why you might not tackle personalization, because you don't have the right data. You think it's too hard. You don't believe that the return on investment is there.
Again, what is the definition of personalization? I've just given you four or five different titles that it might have. It takes time, it takes effort, it takes budget. And to be honest, it requires a sprinkling of faith in some instances, right? To just kind of say that, at the end of the day, “This works.”
But we have to bear in mind a phrase that I've been using for the last two, three years, which is “Personalization without purpose is pointless,” right? To put simply, unless you're solving a problem or meeting a desire from the customer's perspective, personalization and by extension, a loyalty scheme, is pointless. If it offers no value to the customer, then it's of no value, full stop.
We have to think about, "What the customer needs at that stage of the customer journey on the channel that they're wanting to have that need fulfilled?” You know, “Are they researching online? Are they buying in store? Are they returning a product through the post?” So it's not about personalizing just because the tech allows you to personalize.Â
There's an author called Laurent Berland, who uses this term called cruel optimism. And this thing around cruel optimism, something that you desire is actually an obstacle to flourishing. Marketers often have that relationship with tech. So we see this new shiny toy that starts to dictate what we do rather than allow the customer, the customer needs to dictate the path. We end up serving the tech, not the customer.
Irek: True, I've seen it many times where you actually want to use technology to enhance your possibilities, but in fact, you are limiting yourself just to the tech that you have. You rarely go beyond the tech.
Gianfranco: Yeah, and it's with having all the tools that you have to find the right balance, the right equilibrium with personalization. So, can we under-personalize? Yes, right? And I'm always hesitant to criticize what a brand is doing in terms of personalization because I don't know what's behind the scenes. I don't know whether they have the right data, or whether they have the capability to deliver this.Â
But if we have the data and capability to add value to a part of the customer's journey or experience, then yes, I think you can and you're not doing it. You can under-personalize.Â
I belong to a subscription loyalty program with Pretzler Coffee Shop, a sandwich shop in the UK, which a couple of months ago rewarded me with a free pastry. But they needed to be redeemed by a certain date.Â
Imagine my disappointment when they didn't send me a reminder to collect my pastry on the day I needed to redeem it, right? The day after I'd lost my pastry – which for a man who was born in the North of England, and we're quite tight with our money in some instances, losing our pastry was important to me.Â
There's another culture in the UK, Caffe Nero. They send me a monthly statement of the coffee that I've drunk that month. For the last two months, they've actually let me know that I haven't drunk any coffee with them.
But there's no prompt for me to, one, perhaps use my digital loyalty card if I am buying coffee but I'm not using the card, or indeed an incentive for me to drink coffee with them because I legitimately haven't had coffee with them in the last two months.Â
Again, they have the data and they're talking to me, but they're not in some way not using that data.
Can we over-personalize? Absolutely, I'd say yes again.
I worked with a sports broadcaster who had this fantastic breadth of sport on offer, but they wanted to personalize the communications, not just to the subscriber level, not just to the sport level, but to the individual club level.Â
We were talking about football at the time. They wanted to personalize at Manchester United or Liverpool or Chelsea. And the data and the technology gave them the power to do this.Â
We ran a program with them creating new content and content isn't always the cheapest thing to produce. AI these days allows you to produce more content but it does not allow you to really interview individuals properly.Â
The extra content was expensive, but the engagement bombed. Even though we thought we were doing the right thing and personalizing at club level. But what they'd forgotten to consider was why the subscribers had come to them, right?Â
In fact, they hadn't come to them because they wanted content at club level – because if they'd wanted that, they would have subscribed to Manchester United TV or Liverpool TV or Chelsea TV. They'd come to the broadcaster because of the breadth of content.Â
And here we were effectively reducing the content or the breadth of content that we were putting on offer in front of them.
And the customers didn't like it. In fact, if anything, the marketeers had failed to consider that ultimately the marketing KPI should ladder up to the business KPI. And one of the big business KPIs, one of the MPS questions or customer satisfaction questions that they had was, they asked the customers whether the customer was happy with the breadth of sports coverage, that was sports coverage and content that was on offer. And here was the marketing team limiting the breadth of content, right? They were focusing on their marketing KPI, not the business KPI.
So you can over-personalize. Can you reach a point where the return on investment you're getting by adding more levels of personalization just doesn't stack up? Yes, again. And sometimes that happens because you think you need to spend an extra, you know, 100,000 pounds on the next level up of technology when in fact you don't need that. And do you always need personalization?
No, I don't think you do. I've worked over the last four years in the Natura and Co group, with Aesop, Body Shop, Avon, and Natura Latin America. I found a lot about finding the right equilibrium and balance of personalization, depending on which brand you're working with at the time.Â
And that's why these fundamental ideas around “What are the pillars of personalization” that you need to talk about. That's where I think working through those three pillars of personalization is important depending on the brand that you're working in.
Irek: Great, if you could actually tell us more about the three pillars, I wanted to ask about the purpose because I really like what you've said that personalization without purpose is pointless. So I wanted to ask you about how to set the right purpose because as you said, sometimes if you don't follow the right KPIs you might be really successful but in the worst way.
Gianfranco: Yeah, I know. I completely agree. If we chat about these three pillars, in today's world of tech advancements, the availability of data, and the way AI can support you, it's really important for businesses to navigate that fine line between more personalized marketing experiences and respecting individual privacy and free will while meeting customer needs. So, you have to think about brand position, privacy, and the concept of free will within the context of personalization. Starting with brand position, right?
We all understand that as marketers, brand positioning is the cornerstone of successful marketing.Â
A brand's position is its unique identity in the marketplace, distinguishing itself from competitors. However, when we pursue personalization, brands often struggle to maintain their identity while catering to individual preferences. It's crucial to find the right balance and consider how personalization can enhance the brand without overshadowing its essence.Â
Effective personalization seamlessly aligns with the brand's core values and promises by harnessing data and insights to tailor messages, experiences, and offers to cater to specific customer needs. This fosters a strong connection and ultimately builds loyalty.
For example, at Aesop, a significant portion of the content wasn't personalized to the individual. Instead, we focused on aspects such as culture, the environment, food, and literature, which were integral to the brand's identity. We didn't feel the need to overly personalize these aspects.Â
In fact, our emails didn't even use name personalization, and it didn't negatively impact open rates or click-through rates. However, when it came to welcoming new customers and providing a personalized experience, 100% personalization was crucial.
The welcome program was tailored to the store of purchase to solidify the relationship between the customer and the store. We aimed to extend the conversation beyond the in-store experience.Â
As we discussed earlier, other brands in the portfolio used more aggressive personalization tactics, but that was suitable for their brand and competitive landscape. So, understanding brand position is vital.
Now, let's talk about the paramount concern of privacy in the digital age, one of the three pillars.Â
We now have vast quantities of customer data, making safeguarding personal information imperative.Â
At Natura, preserving privacy was not only an ethical obligation but pivotal in cultivating trust and credibility with customers. Trust and credibility are essential components of loyalty. Without trust, loyalty can't be achieved. We dedicated a lot of time and resources at Natura to develop a trust, ethics, and privacy framework for our four brands.
Irek: Yeah, I fully agree with this.
Gianfranco: We framed our ambition in a particular way. In the future, imagine that the quantity and quality of your data are reflected on your balance sheets. Quality is just as important as quantity, focusing on the depth of data and the level of permissions your customers have given you. These permissions are a real signifier of trust in the brand.Â
We need to ensure that we collect the minimum viable data – only what's necessary to move the customer to the next stage of their journey.Â
For instance, when a customer makes a purchase and creates a profile, all we need to ask for is their name and preferred communication channel – nothing more. That's how we continue the conversation outside of the store.
Now, let's move on to the third pillar.Â
We previously discussed the concept of free will within the realm of personalization.Â
Personalization should empower customers rather than manipulate or coerce them into making decisions. While we possess the capability to predict a customer's future needs, we must consider whether we're using technology to meet those needs or simply to maximize margins.
It's important to maintain an element of serendipity, where customers can stumble upon something they haven't purchased before. Algorithms behind platforms like Spotify or Netflix are sometimes criticized for not being 100% accurate, but this imperfection allows for pleasant surprises.Â
Sometimes, it's quite beneficial to discover something you haven't explored before. For instance, one of the pleasures of wandering through a supermarket is stumbling upon a shelf featuring a product category you've never encountered. Within that shelf, you might find specific products or ingredients that leave you pondering, "How could I use that?" It's an amazing feeling.
That sense of exploration is something we shouldn't forfeit when we leverage technology and data in clever ways.
Irek: Yeah, I absolutely agree with you that sometimes those algorithms that you've mentioned, they actually create those bubbles and they tend to imprison people within the bubble. But there is so much joy in actually exploring and finding out about new products, about new stuff.Â
So it's true that you need to be able to sometimes point customers to a completely new direction because otherwise you might even be burned out with the brand if you only get suggestions based on something that you have already experienced.
Gianfranco: 100%. I agree. Because you know that someone else will offer you something different, right?Â
And sometimes it is that novelty factor that actually gets you to move from one brand to another, just because you're seeing something new, right? By doing that, you start to engender that sense of trust that we want with customers. And it's not about the brand, it's about the improved customer experience.
By doing that consistently, you start to build trust with a customer. And I think that consistency is really important.Â
I remember there's a famous quote, I'm going to forget now, who wrote it. But I think it's something like, “Consistency is the true foundation of trust. Either keep your promises or don't make them.” And then if we keep that in mind with personalization. I think we're on the right path to gain trust and loyalty.
Irek: I wanted to go back to the role of personalization in the loyalty program then, because as you've mentioned, it's about trust.Â
To me, a loyalty program is actually sort of a platform to build trust. And thank you so much for sharing those tips, because it just gives you a perspective on how to look at loyalty programs.Â
But you've also mentioned that loyalty programs should be ultimate personalization platforms or ultimate personalization programs, right? If you could elaborate on that..
Gianfranco: Yeah, I think the value of loyalty programs is that they're the pinnacle of personalization, right? I think that's actually self-evident. Loyalty programs allow brands to collect data at multiple touch points, whether it's purchase behavior, digital interactions, feedback.
And this data, when you pull it together and start looking at it and taking insights from it, gives a real granular view of customer preferences, habits and needs. When you use that data, when you use that data that you've collected, you can start to create, at the top level, those segment-specific offers.Â
And a personalized loyalty program isn't just about giving those points away for purchases, it's about providing value based on individual preferences.
We talked about coffee earlier. A coffee shop might offer a particular type of coffee at a discount or free every now and again to a customer in its segment because that's the coffee that they frequently purchase from you.Â
And I think that what the loyalty program does in terms of personalization is it allows or encourages customers to provide feedback, answer those surveys that you might want, participate in polls, and that dialogue just strengthens the brand-customer relationship, and again, gives you further personalization cues because you're collecting more information about customers.Â
The tools that we have now can integrate a loyalty platform with your marketing automation platforms, so you can send timely reminders, offers, personalized messages, personalized experiences.Â
Again, back to my day's work selling shower gels or body washes. Someone who buys a specific body wash, we should know using the data that we've got that they might be running out of that particular shower gel or body wash. And that's part of the function of a loyalty programme as well, right? Personalization programs, subscription programs, right? They're all, they're not the same thing, but they are similar. They're all faces of a dice, of a die, I think we need to consider.
You know, personalization and loyalty programs, it's not just about product recommendations. It's about connecting emotionally with a product. And by emotional I don't just mean sending a tailored happy birthday, because that's something that we've been doing for the last 10, 20 years – but it's about celebrating milestones of the customer journey, right?Â
“It's been a year since you made your first transaction for us. It's been 10 years since you first made your first product purchase with us.” It's things like that build that emotional bond with customers.Â
And I think it allows you to remain relevant, because that's one of the key things about a loyalty program and a personalization program or a CRM program: ultimately you have to use the data that you've got to remain relevant to the customer, right? It doesn't matter how many points you give away, if you're not talking about the right product, services, experiences, you're going to fall out of favor with a customer.Â
You know, it's about personalization and loyalty, creating that well-hammered term, omnichannel, right? Creating the right omnichannel experience for customers, making sure that you know what customers are trying to do through different channels. They're not always making the purchase through that channel. Sometimes it's about using that channel for research. Yeah. And another channel might be for, they might be researching online, but buying in store or the other way around.Â
It's about the customer expectations and making sure that we know what the customer's wanting to do. It's not always the same thing, because customers are quite fickle and will do things at different times in different orders. It's about long-term relationship building. That's important. Again, that's what a loyalty programme allows you to do, building on personalization.
Ultimately, I think that personalization is about increasing marketing effectiveness, if it's done the right way and created in the right way. You have to think about the framework that you're using.
We created this framework called the axes of recognition, which is very simplistic.
I have a degree in astrophysics, but I don't believe that things need to be rocket science when you're developing these programs. We asked simple questions about the behaviors we wanted to recognize and acknowledge. And I say acknowledge because it wasn't just about offering a reward. Sometimes recognition was a simple thank you because that's a reward, like saying thank you for making a purchase.
We looked at why, what, when, which, and how customers were buying. For example, we found a cohort of loyal customers for the parsley seed antioxidant serum.Â
We acknowledged those customers who'd been buying that product for the last five, 10 years, religiously, by involving those customers as part of the product development phase when we reformulated the product. So we got them to try the product, see what they felt about the product, its new way of being applied before it was launched, and took their feedback on board. And then of course, they were offered access to the new product as a priority, right? Again, it's a very simple way of doing that.Â
And a loyalty program, when executed correctly, isn't just that mechanism for rewarding purchases. It's about the ultimate vehicle for understanding, engaging and delivering value to each customer in a… I was about to say a deeply personal way, but it's not, I think it's a deeply relevant way, right? Because I think relevancy is different for each customer.Â
And I think that's the way that you engender trust, loyalty and long-term relationships, which I think in this world that, you know, in a very competitive world where customers over the last five, 10 years in particular, have become more promiscuous, if you like.Â
And not just because they're more promiscuous inherently, but there is more choice, right? There is easy access to that choice because of the way that you can buy digitally, right?Â
So I think in that world, loyalty, engendering loyalty, retention, and personalization, whatever you want to call it, has become even more important than it was 10, 20 years ago, even though we have been talking about it for 10, 20 years, if not longer.
Irek: I totally agree with you. It's true that we are also aware of the magnitude of products and I think that we are also wired for exploration, so well-structured loyalty programs give you this feeling that we're in this together.
Gianfranco: Yeah, and exploration is great, guided exploration, right? So part of my role as a brand is to help customers along that journey.
Irek: Yeah, and this is great about trust, building trust between the brand and customers. That I trust the brand will know what I need, acknowledge it, and develop something new based on what I need. I feel safe here.
Gianfranco: Yes, 100%. But don't do all that work and then abuse that trust.
Irek: It's a great power and great responsibility, right?
Gianfranco: Absolutely. I don't know if you've ever seen the film “The Conversation”. It's quite an old film, I might be showing my age here, Irek, right? But it came out in 1974, a Francis Ford Coppola film. It has Gene Hackman in it, and a very young Harrison Ford. Watch out, he's in there.Â
But Gene Hackman plays a surveillance expert called Harry Cole. And he's been tasked by someone called The Director to listen into this conversation between a man and a woman in this park. I think it's in San Francisco.
And as he collects the information, he uses all these different technologies so that he can get the conversation as they move through the park. And you can see him in his room, in his lab at the end of the day, pulling in the different sources of data, right? To try and get a picture of what the conversation is and how he can fill the gaps in the conversation.
And it's like that's what we do as marketers, right? We're kind of trying to find out what's going on, right? And, but he suddenly realizes that there might be some hidden agenda behind why the director, this chap we call The Director, is trying to piece this conversation together. And ultimately he faces this moral dilemma around why am I doing this, right? Am I collecting this information and then putting this couple's lives at risk?
Irek: Yeah, I mean, I'm definitely going to watch the movie. Thank you so much for recommending it. Because when you talk about misinterpreting, very often I misinterpret myself. I have doubts about certain products that I need or want. "Do I want it or do I need it? Do I need this one?" It's deep.
Gianfranco: Perhaps a bit philosophical because hopefully we don't put any of our customers' lives at risk but it's a great film. If you or any members of the audience get to watch it, definitely do. It's a real likeness for this balance between privacy and personalization that we're trying to achieve as marketeers.
Irek: I also wanted to ask you about some common challenges, because you know you obviously explained to us the three pillars of personalization and it's a huge help because it just gives you the idea of how to approach personalization.Â
But I wanted to ask you about maybe some common challenges, any hurdles you know that loyalty managers might find when implementing personalized loyalty programs.
Gianfranco: I think the main challenge is understanding the customer journey.Â
Fundamentally, still a lot of organizations don't look at the basics of what a customer is trying to achieve through that customer journey. Because if I follow this tried and trusted route of “I understand the customer journey,” I can start to understand “What are the highs and lows of that customer journey? What are the prospective customers trying to do at each stage?”
That then allows me to think about, “Okay, so what is my role as a brand at that point in the journey? And what do I need to deliver that high or improve that low that the customer has, right? So what is the right customer data platform that I need? What is the, then ultimately, what is the right tech that I need to deliver this?”
And actually fundamentally it also helps you understand the organizational structure that you need to deliver on that as well. Think about the journey, data, team that you need, and then the technology that you need. And I think if you follow that route, the numbers fall out of that route.Â
Because you start to understand, for example, what are the choke points in that customer journey, right? You start to understand “I'm not converting enough prospects to customers.I'm not converting enough first-time customers to second-time customers. I'm not getting enough people buying three times a year.”
Because that's where I think that we start to make real value and build out lifetime value for a customer because we know that once they've shopped with us three times, they're with us for five years.Â
And by understanding those choke points, again, by using that framework of the axis of recognition, then you can start building out, well, “What does my loyalty program need to look like?”
Because ultimately, the loyalty program looks at customer behavior, rewards customer behavior, but we're all here to make money. It helps you by understanding those choke points. You understand where a loyalty program needs to intervene, if you like, to remove that choke point, because you know that by getting more customers to go from first to second time purchase, here's the value that I bring to the business.Â
Everyone knows that one of the fundamental reasons why often loyalty programs don't succeed is because you haven't thought about the return that you're gonna get from that loyalty program. By following that process, I think that designing and then implementing a loyalty program becomes easier.
Irek: My next question is about the future. If we look ahead, what trends do you anticipate shaping the future of personalization within loyalty programs? How can loyalty managers prepare for what's coming next?
Gianfranco: We're getting good at personalizing messaging and content. AI is helping with segmentation and product recommendations.Â
The real future is further personalizing services and products, allowing customers to customize and personalize products at a deeper level. 3D printing and technology will enable unique, highly personalized products.
Irek: Thank you. Thank you so much for everything we have covered so far. And I believe that we have covered everything we planned to. Is there anything else you would like to share with the audience before we wrap up?
Gianfranco: No, I think you're right. I think we've covered a lot.Â
I think one last nugget is don't think you have to do the nth degree of personalization from day one. That's a mistake that people often make, which is “I haven't got everything, so I can't start.” Personalization can actually start very, very simply with the data that you already have.Â
Don't overcomplicate things because by complicating things, you'll never get going. Think about where you want to be in two years' time and work towards that, but start with what you've got.
Irek: Brilliant. Thank you for the interview. It was a pleasure.
Gianfranco: The pleasure was mine. Thank you, Irek.
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