Clienteling

A few weeks ago, we talked about the idea of loyalty being “nothing more than ‘programmatic discounting.’”

And while we could talk for a whole newsletter—again—about why this is a good thing, there was a piece missing from that conversation that’s worth hitting on. It’s this: In order to make programmatic discounting work, the program has to make sense. 

From our previous newsletter on this topic: 

Perhaps unwittingly, brands end up discounting more for existing customers than new customers because of “event-based” discounting strategies. Black Friday/Cyber Monday, of course, is the biggest event-based discounting event, but it’s not uncommon for brands to run sales around every other holiday, too…

It’s easy, then, to set expectations with a customer that a discount event is around the corner. 

Loyalty, though dismissed as “programmatic discounting,” is a counter to this. It’s an earned-based strategy, whereby a customer and a brand agree that a discount will get offered once a customer earns his or her way to it.

If you adjusted your discounting strategy on the whole to be “earned-based,” instead of “event-based,” you could save yourself margin by not offering discounts (or, at least, not as severe a discount) during certain calendar periods.

One of the pieces that went unsaid here was that those event-based discounting strategies are successful, because the marketing around those cultural events is often stronger than the marketing around individual, everyday events.

If you zoom out, though, this runs counter to where the rest of commerce is heading. 

Social feeds are personalized. Music playlists are personalized. Ads are personalized. Merchandising blocks on retail sites are personalized. Consumer pricing for flights, Ubers, takeout, etc is dynamic and dependent on a variety of personalization-adjacent datapoints.

But DTC?

The bulk of the marketing is done in a broad-based fashion necessitated by the fact that brands don’t have anywhere close to the resources required to pull off the stuff listed above.

Algorithms are a platform game, yet smart merchandising has always had a component of human touch. In fact, it has a term: Clienteling.

Though not discussed as much as it used to be, clienteling was a hot topic in DTC when Bonobos popularized the use of guideshops (their term for retail stores) and “personalized” email campaigns from sales associates after visits. Those emails often pushed highlights of specific products, and sought feedback after delivery.

Delivering these experiences got harder instead of easier—because the bar of what good clienteling is got raised. 

This is what we’re solving. And this is, in part, why we acquired Repeat: To be the engine that integrates UGC and Loyalty with the rest of the retention marketing stack, specifically the channels used to keep customers engaged, and does so in a personalized manner.

“Programmatic discounting” allows for the same experiences—without the need to offer that discount to everyone. 

The challenge, though, is those personalized offers are never integrated throughout the retention stack.

If you have any doubt, ask yourself the following questions: 

• Do you have a “win-back” offer flow for at-risk customers? 

• Is it live in SMS? Or only email?

• Do you promote that code in your campaigns to that customer? Or does it only live in the flow? 

• Is it onsite? Or just in email? 

These are leading questions, sure, because I can’t think of a single brand that cross-promotes a win-back offer in any of the ways outlined above. And the reason is simple: No vendor has shown them how easy and impactful it can be.

To date, most vendors have sold the idea that these programs are valuable on their own for specific reasons. And while some of those reasons are viable, our core hypothesis at Stamped is that user-generated content and loyalty programs generate more business impact as combined levers in a merchandising strategy than they do on their own.

Treating these levers “programmatically” can allow brands to build those personalized offers, market them with as much strength as cultural events, and, in turn, reduce some of the reliance on those margin-eating campaigns.

We’ve seen with our customers that this type of personalization protects margins and drives profits, and profits are what matters. If you want to talk more about how all  of this fits together, let me know. We’d be happy to talk.