Episode 1: Welcome to the Reimagine Marketing Podcast
WILSON: Consumers today are capitalizing on AI, IoT, mixed reality, and other emerging technologies. These forces exert tremendous pressure on marketing organizations to reinvent themselves for the future. The question is, are brands and consumers ready?
This podcast series will answer that question and many others as we consider the future of customer experience and marketing. Thanks, everyone, for joining us on this first episode of Reimagine Marketing. I’m joined by my co-hosts Steven Hofmans and Justin Theng. Welcome, guys.
STEVEN HOFMANS: Hi, Wilson.
JUSTIN THENG: Thanks, Wilson. Good to be here.
WILSON: Now as you get to know us, we will provide sort of our viewpoints on how this show is going to unfold for the rest of the series. So we’re going to start with Steven Hofmans. And I find that the best way to get into someone’s perspective is to ask them for their favorite or one of their memorable quotes that helps shape their craft. So Steven, by way of intro, what is your quote and tell us a little bit about yourself.
STEVEN HOFMANS: So I’ve worked like for seven years for a marketing technology provider and I’ve seen many industries implementing marketing technology and trying to take the best of it. And one of my favorite quotes is, “A fool with a tool is still a fool.” And the reason why is because I really see a lot of companies invest in different kind of hypes and innovation.
And for me, you have two type of motivational factors that decide to work with innovation. You have the companies that really understand how they can take advantage of market innovation and improve customer experience and really create value out of it. And these are the companies that when they’re launched– when they launch, for example a chatbot, it really can answer your questions, artificial-intelligence driven, and it improves customer experience and brings down the cost to serve.
Then you have the companies that invest in innovation because their competitors are having it. And those are the chatbots that refer you to the call center after one or two questions. Where the problem is, they were not able to take advantage of the marketing innovation that happens and they were not able to translate that really into customer experience improvement. And often in reality, the technology gets the blame. So my advice there is always wonder if it’s the technology that needs to be changed or the business that needs to change.
WILSON RAJ: That’s awesome, Steven. So everyone, that’ll be sort of that lens. It is really coming from that strategy perspective, right, Steven? So I like that. So basically separating the tools from the fools. There’ll be some of– definitely a big part of Steven’s perspective. Justin, what about you? Your favorite quote and your angle on this.
JUSTIN THENG: Thanks, Wilson. You know what, Steven? I had a quote that was about a tool, as well, so I’m not going to use that one. I’m going to choose another one. My second favorite quote is, “I know that 50% of my marketing is working, I just don’t know which 50%.”
That’s kind of the line that stuck with me throughout my career. Speaking of which, I have a career ADD. And I also have real ADD, just for the record. So you know, I’ve jumped around a lot, Wilson, as you know. I’ve come from traditional advertising, above-the-line TV, I went into digital, I ran my own agency, sold it, became a marketing coach, and then decided I should probably broaden my horizons again, and here I am at SAS, looking at AI.
WILSON RAJ: Fantastic. Fantastic, Justin. Again, I think that rich background but coming in from a performance perspective. But you know, it’s certainly not restricted to that as you’ll see in the rest of the podcast. But they’ll be certainly some of the elements there. And everyone–
STEVEN HOFMANS: That’s right. And what about you, Wilson?
WILSON RAJ: Well, I don’t have any quotes on tools or fools, although I think they are absolutely salient here. But one of my early quotes was actually from a gentleman named Scott Bradbury. He was actually the first CMO of Nike that really did all those amazing brand campaigns. And then he moved off to another amazing brand, Starbucks, in the Seattle — in the Pacific Northwest area.
And he wrote a book many years ago called A New Brand World. And this is one of the quotes around brand. He says, “Cracking your brand’s genetic code is not strictly about product, about the past, or even about things.” And here it comes. “It is about tapping into an essence and an ethos that defines who you are to the folks who matter, your core customers, your potential customers, and your employees.”
So I use this a lot during my agency days, just like you, Justin. I think we share a background there. I was I was on the client side, I was on the vendor side, on the agency side. And for me, my journey is simply that of a marketing explorer, a traveler trying to explore as many facets of marketing.
But ultimately it really nets down to what Scott Bradbury– how do you tap into this essence or ethos that defines a brand? So a lot of my perspective will be that, all right, what’s the human aspect of that? How do we unpack that into a marketing execution. It’s not just now but into the future.
JUSTIN THENG: That’s awesome, Wilson. Wow, you guys– you chose such philosophical responses. I really should have– I think we should have written it down and I should have probably read it. I thought, you know what? I’d rather the candor.
WILSON RAJ: Well, I’ll try to memorize these quotes.
STEVEN HOFMANS: That’s right.
JUSTIN THENG: Hey, Steven. You spoke a little bit about hype and innovation. Are there kind of two categories that companies fall into typically that you see?
STEVEN HOFMANS: That’s actually a very good question and not an easy one to answer. When I look at hype and innovation, I think of companies that are able to stand out by putting a smile on people’s face and really by providing what I call frictionless customer journey. These are companies that are actually combining convenience, personalization, and timing to really deliver and excel at bringing customer satisfaction.
And one of the companies I found in my region– I am from Belgium– that is able to do this is actually Coolblue. And Coolblue is an e-retailer that was founded in 1999. And they managed to double their growth rate every 20 months, resulting in this year turnover of 1.5 billion euros.
So really a company that took advantage of innovation and their slogan is, “We do everything for a smile.” I like that. And the idea behind it is really that when they are doing commercials, when they are delivering their packages around the Benelux, they always have the intention to put a smile on your face as a customer. I think that’s a very important value.
Let me give you an example of how they look at frictionless journeys. The standard delivery services for Coolblue were just not good enough. They were using the public post and some other distribution services. So they looked at really how can we create a delivery service that can meet our expectations, our customer values?
So they looked at different pains in the delivery journey. And one of the businesses– they are very successful in is what they call themselves white goods. These are dishwashers and washing machines, really low-involvement products. And the way you buy a washing machine is simply not the same as the way you buy a TV.
And they looked at first at the basics. So when people buy a washing machine and it gets delivered at home, they need on-site explanation, they need to take back the old washing machine because it’s a heavy product and nobody can lift it. So they said, OK, these are the basics and when we give an on-site explanation and when we take back the old washing machine, we are meeting expectations.
And then they change their view, and they were really looking from a satisfaction point of view at the journey. And they realize that whenever somebody is bringing in a washing machine to a customer, they ring the door. And when the customer opens, you actually say, I have nothing for you, because the washing machine– you will not take it out up front because first you want to be sure that the customer is at home.
So you have that awkward moment where the delivery person is ringing the door and actually have nothing in their hands and say, we have a washing machine for you. Now wait like five minutes while we are now going to take the washing machine out of the truck. So he said, we need to change that. We need to get rid of that awkward moment.
So what they did is now every time they ring– they do a delivery– they have a small package, a small gift, with them. They ring the door, say, here’s your washing machine. And then the customer looks a bit odd, seeing a washing machine is such a small package.
So and while they are opening the package, they have the time to go to the truck, get the washing machine, bring it ready. The customer is surprised because he gets a package and there is a few sample washing samples in there. And you know, it puts a smile on a person’s face. And the best thing is that they were able to turn it into value.
So Procter & Gamble is paying five euros to be actually in the surprise package to get washing delivery samples. So I think that’s one way of creating customer delight and improving the customer experience. And it will also be one of the upcoming podcasts where we’ll talk about how companies need to prepare for customer experience 2030.
A second example is for me, Netflix. I think it became a commodity but especially with kids at home, it is a lifesaver these days, really. I think we take it for granted but it’s still a product that is relevant for every member of the family. It’s convenient because it’s available on every device. So I think convenience is very important. It’s personal so everybody can reach it.
And their commercials don’t follow me around the globe. You have these companies that when you visit them or you see their promotions, they follow you all around the internet. And I think that says a lot about sensitivity and how to be personalized with the right timing and the right tone for every individual.
And we’ll have a talk around data-driven marketing, and especially with the recent documentary of the social dilemma. And we’ll have discussions with Mieke, who is the program director of Artificial Intelligence at imec, on ethical marketing, AI and privacy, and what is good digital guardianship.
WILSON RAJ: Sounds good, Steven. Sounds like there are a lot of great things to look forward to. And I think just to play back to the audience, I think the two takeaways were innovation is all about adding unexpected, surprising, and helpful value. That was one of the first examples. And the second one is all about that hyper-personalization, making it super relevant at the point of need across a household, across different personas. So those are great examples.
Now Justin, you’ve been, I think, very similar to me. You’ve been on both sides of the marketing fence, so to speak.
JUSTIN THENG: Yeah.
WILSON RAJ: Be on the client’s side or brand’s side. You’ve also been on the agency’s side–
JUSTIN THENG: That’s it.
WILSON RAJ: –and consulting. So I think you’ve got a unique vantage point as we talk about in this podcast, and the whole theme of it is evolution of marketing. So standing on the middle of that fence, what is your take on what’s happening now and how marketing is evolving?
JUSTIN THENG: Yeah, it’s an interesting question, Wilson, because you know the examples that Steven gave reminds me of Zappos. It’s really that question of how do we take a customer from liking us to absolutely loving us? How do we create that customer delight?
The evolution of marketing as I see it, Wilson, has gone from this one-to-one selling into the creative advertising revolution, where we went to mass-market and tried to delight the customer that way. And then we created segments– you know like sociodemographic segments that we could talk to. Then we went to buyer personas in the digital marketing, inbound era. And now we’ve come back full circle to the individual again.
And it isn’t that we wanted to move away from that. We’ve always wanted to speak to the individual. It’s just that we weren’t able to using the technology that we had. And now now that we have it, we’ve evolved– or I guess you could say we devolved and then re-evolved. I don’t know how you put that, but we’ve come back to being able to speak to the individual.
And that really comes back to what you were saying. I mean, brands call it hyper-personalization, but I think your customer would call it convenience, understanding my context, understanding my need. How about yourself?
WILSON RAJ: Yeah, I think for me, it’s really back to that core basics. Even back in the good old days, especially with Covid-19, we have seen that return to that essence, what Bradbury talked about with the essence and the ethos of what brands are all about. And we saw examples with Covid-19 and the whole pandemic, how brands pivoted, right? They were willing to suffer short-term revenue losses– some even maybe longer than short term– but they were doing it in order to build that brand affinity to eventually ensure a faster recovery.
So for example, I saw, I think even globally, Crocs. They make those ubiquitous, rubberized sandals with lots of holes on it. They are super ugly but very convenient. Unfortunately, I think my whole family– each of us have a pair. But what they did was they started donating their sandals to front-line workers like health care, hospital staff, nurses, doctors. And they didn’t put profitably ahead of customers.
Another one was a lot of hotel chains like in the New York area, for example. They used their rooms to provide temporary to mid-term lodging for emergency care workers. Another one that I saw– even in advertising, it was returning back to that ethos– Miller Lite, for example. Of course they couldn’t sell beverages any more, or beer, and so on. So they started the hashtag #VirtualTipJar to support out-of-work bartenders in the different cities that they ran this campaign.
And then Taco Bell, on top of it, they suspended all their advertising. They toned it down, they revamped it, and they did basically a user-generated content showing people coming through the drive-thru window and then showing that connection with the consumer.
So I think at the end of the day, the lessons here were really, hey, focus on customer purpose, align with brand values if possible. And here’s a caveat to that, don’t force-fit. The flip side to that was that some brands are inauthentic. They try to be caring.
I mean, I think each of us got emails from brands that we probably never– you know, we did business with like 10 years ago. I got like– all of a sudden, everyone say, hey, I’m thinking about you. I hope you’re well. I’m like, gee, when did that happen?
JUSTIN THENG: Not just brands, Wilson, but LinkedIn as well.
WILSON RAJ: Yeah.
JUSTIN THENG: Everybody I’ve never spoken to on LinkedIn hit me up and said, you know, just thinking about you. Hope you and the team are well. They don’t know my team.
WILSON RAJ: Right? Exactly. And I think that ethos, that focus, should have been there all along whether there’s a pandemic or not. And I think I like what you said. Like it was sort of swung to one end– devolved, so to speak– and then now, kind of coming back.
JUSTIN THENG: Yeah. I mean, it reminds me of– the way that I think about things is when I’m, I guess, advising or consulting on brand, I always challenge and play with people’s heads and say, well, a brand isn’t what you say it is. It’s what people say it is when you stop talking.
So when you can’t communicate anymore and you can’t go to market with your typical channel communications like what happened in Covid, you discover what your brand actually is because when you can’t talk anything other than, are you OK? You know, we’re here for you. Our delivery times are blah, blah, blah. And I’m being blunt deliberately because that’s when you find out in that silence, well, what do our customers actually think about us? Do we actually have loyalty here? Do we actually have brand affinity?
And the flip side of course– Wilson and Steve, I’m sure you have commentary on this as well– is how do we achieve the business objectives? I mean, us as marketers or practitioners, we can say, OK, focus on the customer. And at this point, everybody else who’s not in marketing rolls their eyes and go, oh, my gosh. How do we achieve our business objective?
At the end of the day, we have shareholders, we have profit margins to hit, that kind of thing. So it’s really an evolution, isn’t it? Because it’s kind of like a 1900s thing, focusing on profit first and profit only and forgetting about customer satisfaction and making people happy, to be frank.
And if we think about marketing in an environment where the customer has the power, take that to the nth degree and give them all the power, all the privacy rights, all the privacy choices, and communication choices, I mean even price choices, and you really discover that sometimes they’re at odds with each other– this kind of brand objective and the business objective. Not always but sometimes.
WILSON RAJ: I think that’s a great– now sort of getting into the how. Initially we talked about the context of why we are reimagining marketing and why this series exists. And Justin, I think you give a nice summary from your perspective, like what are some of the elements that make up that change. And you can definitely get back to that a little bit.
But I want to hear from Steven in terms of how have– in light of consumer expectations, not just with a pandemic but how they change overall, and what are some of the how topics that you’ll be focusing on for some of the subsequent episodes in our series?
STEVEN HOFMANS: So when you look at how customer experience has changed in 2020, I think we did experience the biggest digitalization wave ever. Some online shops had to adapt in one week from 30% online sales to going 100% online sales because people couldn’t visit the store. And we don’t have to neglect the impact on what that brings from a customer experience perspective.
I’m very interested in how it looks like in your regions. But from us, the reality is that we are moving from a fear of missing out when it comes to expectation to a reality of missing out. No traveling, no instant delivery anymore, no live sports games, and no barbecue with friends.
And I think it really adds on on how do you reimagine customer experience because the question is, the market has changed but did the customer expectations change with it or are people still living in their previous customer experience– do people still have their previous customer experience expectations or do they still have their old expectations?
And I think it’s very important when you think about how to reimagine customer experience that there is a challenge for companies that they need to cope with the old expectations and keep on delivering the hopes and dreams of the new expectations to the customer. And they need to find out, OK, if we are not delivering time, if they cannot go for travel, if they can’t visit a football game. And saying, how do you cope with that reality of missing out and how do you keep loyalty to these customers that you maybe not always be able to serve.
I think that’s a very important challenge for companies to address in 2021 and moving forward because I’m not sure if customer expectations already changed with the new reality that is being put in place. And we’ll discuss with some of the people around what you can do on the short term with Bernard Marr around what should you plan for 2021?
We’ll have a discussion with Sandy from Office Depot around how do you reimagine marketing planning and how do you make sure, in the age of agility, that you can adapt fast enough? And then we’ll have Manu or Michael from the Belgium soccer association talking about how will we need to reimagine fan experience. And I think the last one is very interesting, how do you bring a stadium experience to people that no longer can visit the stadium? How do you cope with that? I think that’s a very interesting topic.
So I’m looking forward to these discussions and I’m really also interested in on your side, Wilson, what is happening from an experience perspective? How are our customer expectations changing?
WILSON RAJ: And to that end, I mean, that is the big question, isn’t it, as we move forward. And I think one of the key things that we did even before the disruption happened is really to ask that question. What will the future of CX look like 5 years from now, 10 years from now into 2030 and perhaps even beyond?
So what we’ll be doing through the series, unpacking findings from our worldwide survey called Experience 2030 that looked at some of the core drivers of evolving CX — and very quickly. I mean, they are all about smart tech, immersive tech, which is all that to say that the consumer is not using digital, they are digital. Another factor there will be around privacy adjusting. You mentioned that balance. So we talk about privacy in the digital age.
Steve, you mentioned loyalty. So that’s also one of the key drivers that will still persist, except that now it’ll be less about the program but more about loyalty being infused into a customer journey. And the last piece of it will be around the technology in terms of how agile and how automated the brands can be in their marketing while leaving room for humanity or empathy.
So those are some of the key things, and so we’ll be unpacking that. In fact, we’ve been talking to some of these elements in this episode but we’ll get to focus a little bit more. And Justin, we talked about some of those drivers from my end. Steven talked about some of the expectation and how future episodes. What about you? You work a lot. You consult a lot with customers SAS. How do you see them respond to reimagining marketing towards 2030?
JUSTIN THENG: Yeah, I think it’s a big scary question, Wilson, because you feel like you’re trying to plot a course on shifting sands sometimes. And how much of our previous data is usable now? How much is relevant? How do we avoid locking people– or what I call lane-locking– into workflows or automation? How do we not make assumptions and then lock people in accidentally? How do we make sure that we’re educating our internal teams as well as educating our customers about what they can do next without being creepy?
So there’s all these big questions that come into how we imagine marketing, which I suppose is why technology is an easy framework to go off. We can look at how technology is evolving and we can somewhat predict how customer behavior shapes around that because it’s true when technology provides a framework, customers’ behavior fills that framework.
So look at voice search for example. I mean, if you were just to pull on that thread for a second, if 40% of search traffic in America– in the United States– is voice, what does that mean for being on the first page on Google? Absolutely nothing. There is no first page in voice search. There’s just the first answer.
So who gets to be first? Is it the advertiser or is it the search engine’s recommendation on the best human intent? So it’s all these questions that really factor in. And as you said, this CX 2030 report was fascinating to me because the perception of where brands think things will head and what customers say they want, it’s almost chalk and cheese, isn’t it, Wilson?
WILSON RAJ: Right.
JUSTIN THENG: And then we start looking at things like holographs, drone delivery, automated vehicles, and you start to think, well, maybe I can imagine a future where brands aren’t just trying to sell more but brands as infrastructure can happen in our world and economy. You know, where your Teslas are providing space travel or hyper loops, where you’ve got Amazon that was once just a shopping company now providing infrastructure for anyone who wants to start a business. We’re talking about a whole new landscape, really.
WILSON RAJ: I like that term, brands as infrastructure. That’s a great perspective to base a lot of our future conversations on in terms of, yeah, it’s not just this– well, Scott Bradbury says there’s an ethos, there’s an essence. But I think as we get inundated with all this technology, yeah, it also now functions as an infrastructure, a foundation. So–
JUSTIN THENG: Yeah, lots to talk about, isn’t there?
WILSON RAJ: –lots to unpack there. Yeah. It’s pretty neat. Well, as we draw to a close, let’s do this. We know that it’s a start of a new year, 2021. It’s looming, it’s coming hard and fast.
So for each of us, let’s give one prediction for the year. Now we know predictions can just go sideways and backwards, but from your perspective, what is this one marketing or martech or customer experience prediction that you see coming– maybe not to fruition, but certainly expressing itself a lot more in 2021?
JUSTIN THENG: Ooh, that’s a–
WILSON RAJ: Any takers?
JUSTIN THENG: –hard one. Wilson, you threw you through a random one in there. I like that. I think it comes back down to the human. I think it’s really a culture of curiosity. I think we are going to need to dig into facts and get a little bit creative again. Can you believe it? Marketers relying on intuition again.
WILSON RAJ: All right, so we have prediction number one from Justin. Creativity will be in, intuition will sort of take a– not to diminish data and analytics. All that’s great stuff but there will be a greater focus on that creativity, intuition, and that human mindset. I love it. Steven, what’s your prediction for 2021?
STEVEN HOFMANS: I want to build on that. And I think that companies that are willing to take risks and put themselves out there for their customers– and I really mean really experiment and test on how they can make a difference in the customer experience and are willing to take risks and bet on that angle– I think they will learn the fastest and they’ll grow the fastest.
If you’re really out there and not stay in your comfort zone but really get out of your comfort zone and try new stuff to bring new journeys into place– to rethink experience and really turn the world upside down– I think that’s very important as a marketing organization moving forward to 2030.
WILSON RAJ: Awesome. I think I hear the word– it’s almost sort of a revolution of sorts, I guess in a good way, for marketers and customer experience leaders. So awesome. I think for me, I’m going to go I guess a little bit more functional in my prediction.
We talked a lot about data and insights and that hyper-personalization, and Justin, you mentioned creepy in that same sentence as well. So I think definitely we’ll see a rise of ethical AI. As AI is fantastic, is automating a lot of really cumbersome, boring, manual tasks that allow marketers to be creative– as Justin talked about– to be thinking out of the box, to be revolutionary, as Steven comments on.
And I think at the same time, there will be some forces in play coming from the brands, the clients, vendors, government organization, other kinds of structures to infuse some ethics into AI. So I think that will be on the rise. So there we have it. So we’ll see–
STEVEN HOFMANS: I like that one.
WILSON RAJ: –as we go through 2021, how we stacked against some of these predictions. And there will be more.
JUSTIN THENG: And I’ll hold you guys to it.
WILSON RAJ: We’ll be good for it.
JUSTIN THENG: In episode 230, we’re going to be looking back and going, how did your prediction go, Wilson?
WILSON RAJ: There we go. Yeah. We’ll see. All right–
JUSTIN THENG: So what should listeners do next, Wilson?
WILSON RAJ: Number one, subscribe. Again, this is just the kickoff. There’ll be plenty, as Steven and Justin alluded to, in terms of Reimagine Marketing. That’s the first thing. Also Justin, we talked about having different folks. You want to share a little bit of that?
JUSTIN THENG: Yeah, that’s right. We thought it would be a cool idea to the listeners listening to have some of you even as guests. I know that we’ve got colleagues and friends who are chief marketing officers and CX professionals who are listening right now. And we thought it’d be great to have them on the show.
So if you would like to be a guest on the show, you can actually register to do so. And yeah, throw in some topics. And we would love to have you on and chat about it. How about you, Wilson? What do you think we should do next?
WILSON RAJ: Well, the last thing I would say is some of the reports and resources that we reference in this podcast will be in the show notes. One of them obviously will be Experience 2030 research paper and some other additional resources. So check those out.
This is episode one, and we look forward to seeing you on subsequent episodes of Reimagine Marketing. So on behalf of Steven and Justin, this is Wilson Raj saying, thank you and we’ll see you on the next podcast. Take care.
JUSTIN THENG: Take care, everyone.
Episode 2: Butcher Shop as Math House – Connecting with Tomorrow’s Digital Consumer, Today
WILSON RAJ: In a socially distant market the use of digital, mobile, and immersive technology isn’t just an option. It’s an imperative. Consumers are looking for experiences that provide relevance, convenience, and safety, from the increased use of telemedicine to contactless payments and checkout. I’m Wilson Raj, and welcome to Reimagine Marketing Podcast, “Episode Number Two, Connecting with Tomorrow’s Digital Consumer Today.”
Hi, everyone, and welcome to this podcast. I am joined by my special guest, Bernard Marr, who is a best-selling author, futurist, and expert in digital transformation strategies and technologies. Hello, Bernard.
BERNARD MARR: Thank you so much for having me, Wilson. It’s really good to be with you again. We did some webinars together recently, and I’m really looking forward to doing this podcast with you.
WILSON RAJ: Absolutely, and I think the last webcast that we did was around this topic around the digital consumer and what has happened in the last year, the effects of the pandemic, economic disruptions, and then how are consumers responding to that, and then how brands are responding back. So we had a great webcast just recently, and this is really an extension of that because there are so many great points and things that you were sharing that we felt, hey, we got to get this out to the audience.
BERNARD MARR: Great. No, I’m looking forward to it.
WILSON RAJ: To get things started, I think it’d be great to talk a little bit about, again, sort of your journey. This topic is certainly not new. You’ve addressed it many times, but tell us a little bit about your journey up to this point as an author. And I think I’m more interested in the futurist part.
BERNARD MARR: Yeah, so I started my career at Cambridge University. I grew up in Germany, then came over to Cambridge to finish my degree. And they then offered me a job, which I thought was a great place to start your career, so I joined the faculty there.
And then I moved from Cambridge to Cranfield School of Management, where I did lots of research and also consulting work on business strategy, on technologies, on digital transformation, and how companies use data. And I’ve literally never done anything else. I’ve always been in this space, initially helping companies to use data more effectively.
Then it moved into analytics into big data, into AI. Then I broadened this out into all major technologies because AI impact everything, and then I started to write for Forbes on all future technology trends. And this is how I started.
WILSON RAJ: Fantastic. And this is something I ask pretty much all my guests on the show, at least. Do you have a favorite quote or a saying? You probably have a lot of them yourself. Something that you use as a principle when you talk to customers and clients and think about current technology and future scenarios.
BERNARD MARR: For me, the key thing when I talk to my customers is that they have to start with their customers, and they have to make sure that they really think about how they’re adding value to their customers. And then they need to translate this into their business strategy, and then they need to make sure that their digital transformation is in line with their business strategy. And then their data strategy is in line with all of this. So for me, it starts with the customer, and if you always remember this, then you will be a successful business.
WILSON RAJ: All right, so there you have it. Starting with the customer, not with anything else. I think that’s a huge, salient point. So to get on to our topic today, the first part we’re going to talk about is really the dynamics of this new digital consumer, or we can call him or her the “tech-infused buyer.” And some of the content we’re going to talk about was taken from a very recent Experience 2030 pulse report that surveyed in excess of 600 respondents globally around their consumer behaviors and how brands were responding during the COVID-19 pandemic, so pretty much the latter half of last year. And some interesting stats came out.
For example, we found there’s a faster, a greater, a deeper adoption of these immersive technologies. Almost 70% of consumers said they expect to use augmented reality, virtual reality, mixed reality to experience products and services in the coming year, so there’s an uptick there. And then about 60% said they would visit a remote location or venue using these very same technologies. In other words, less in-live events. So the question is, how are consumers adapting to this new digital reality, and how is this affecting personalization from a brand standpoint?
BERNARD MARR: Very good question. So for me, we’ve all experienced this now that we simply had to adapt to talk to all of this because of the pandemic. Because suddenly, from one day to the other, everyone was stuck at home. We had to work from home, shop from home, bank from home, have more home-based entertainment, and more digital events.
So I think we’ve adopted incredibly well to all of this as a population of this world, and for me, what we are now seeing is that lots of things have shifted to digital first. And we’ve obviously all started to upgrade our systems at home. Initially, people were struggling. They might not have had the cameras, the microphones, the networks at home and all of this in place. Nowadays, we can do this.
WILSON RAJ: Right.
BERNARD MARR: And for me, personalization has simply become an expectation of consumers, of me. I get really frustrated when I speak to a company I’m dealing with and think they should really understand me as a customer. Let’s take my bank or an insurance company. And when they don’t, I get really annoyed. And I think there are lots of companies still struggling with this.
I was working with a telecom company, for example, and when we started working with them, they had lots of silos. So they couldn’t even see their customers holistically because if you think about this, you might have a broadband subscription. You might have an entertainment package. You have a mobile phone subscription as a family.
You might have multiple of these, and they were seeing all of these as individual customers. So to get this holistic view was initially really difficult, and if you don’t have this, you then also haven’t got this holistic understanding of your customers, which then inhibits everything. And you can’t really do any of this personalization.
WILSON RAJ: Right, and I think when we had some previous conversations, there were some great personal examples that you showed around how organizations today are stepping up in this more holistic view, to your point, using data and these immersive technologies, but also really surprising the consumer. And we saw this acceleration of these things literally in the last year, so what are some of the things that stood out to you personally, some brand experiences, for example, that speak to what you said earlier?
BERNARD MARR: Yes, there are so many different examples, and for me, some of the companies that have started to use extended reality, I think, are great examples. Companies like Dulux, a paint manufacturer that is now enabling all of us to check out what our wall will actually look like with the different shades of greens and reds and whatever we might want to paint our walls with. I think I’ve definitely been there in the past where you head to the DIY shop.
You buy lots of samples. You put them on your wall, and then you choose one. And then when you end up painting the entire wall, you realize, actually, this wasn’t really the color I was hoping for.
WILSON RAJ: Absolutely.
BERNARD MARR: And for me, there are companies that do this really well, companies like Amazon, for example, that have really, reimagined themselves and have thought about, OK, how do we build customer relationships? I think when you first asked me about the mantra and some of my favorite quotes, I think what companies need to do, they need to think about how they solve customer problems, not how they sell products. And this, for me, is what companies like Apple are doing really well.
And then they need to think about how do they engage with those companies, so especially building a subscription model, where you can continuously engage with them. And where offline is online, and online is offline. So if I walk into an Apple shop, which I can’t do at the moment, but in the past, they know me digitally. I can pay digitally. They understand who I am as a customer.
At the same time, even at the beginning of this customer journey, I can browse their latest products, and I can even use augmented reality to put the latest iPhone right into my kitchen. I can walk around and zoom in, zoom out. And for me, they are some of the key things that they’re engaging with me. They’re building this continuous relationship and where I have this seamless experience from augmented reality to virtual reality to websites or physical stores, and they all seem to work in harmony, which I think is a great example.
WILSON RAJ: I think the big point you bring that is you talk about the continuity of experience more so than the consistency of experience. So the Dulux example is basically, that’s something that you’re trying before you’re buying, right? You’ve gone through all that purchase awareness, and you’ve cut all the way down to, all right. Let me put this on the wall with augmented reality.
And I think IKEA is another one. I read just recently where they have also partnered with an AR, an augmented reality, vendor where you can actually use their app on Instagram to be able to project what a shelving unit would look like. And I’ve put together IKEA products, and boy, it takes sometimes months for me.
But here, it actually projects on a wall what a unit would look like. The space, you can even envision putting things up there. And then if you like it, like the arrangement, you can move it around. You can just press a button, and boom, those pieces, those units are exactly shipped to you. It’s just frictionless.
BERNARD MARR: Yeah, and this is a great example for me. For me, it’s absolutely vital that we think about how do we make this whole customer experience better. So in the past, if you– and IKEA is a good example because I don’t particularly like walking through an IKEA building. Because you get channeled. It should really take 10 minutes. It takes 30 minutes because they want to see everything.
WILSON RAJ: And you always end up at the meatball section, right?
BERNARD MARR: Exactly. And for me, there’s still a challenge because sometimes, you look at furniture, and you still don’t know. OK, I’ve seen this in the shop now. It looks nicely set up, but what will this actually look like in my setting? And this is where, actually, VR and AR supercedes what we can do in the physical world, where you can actually place it into your room.
And we see the same in try before you buy in makeup. L’Oreal is now allowing you to try on different makeup shades. Where you can try on hats. You can try on jewelry. And for me, this is a real differentiator if companies get this right, this whole virtual channel using augmented and virtual reality to help customers experience the product before they even buy it.
WILSON RAJ: Right. Now, before we shift to the evolved strategies from a brand perspective, just one thought I just wanted to see what you think. So have consumer behavior– today, has it been forced into a sort of this kind of digital or physically distant model?
Is this something that’s temporary maybe for this year into next year, or is that something you think that we’ll carry on? Or at some point, it’ll just go away? I’m just curious as to what you think this digital physical balance would look like.
BERNARD MARR: So I very firmly believe that our world has changed forever, and I believe that this will last. I believe that many things will never come back, and if I just think about some of the clients I have, some of the biggest companies around the world, many of them are now selling their real estate, their headquarters because they realize people can work from home. And if we are working from home, we can do everything else from home, so what we will see in the future is this digital first and then maybe a hybrid model where it is appropriate.
For me, what is key is that companies need to think, what is actually the value of what we’ve had before? And is digital better?
And if you think about this whole idea of try before you buy, one of the examples I often talk about is buying glasses. So I’ve taken my daughter, who wears glasses, to the optician many, many times to have her annual eye check, and then what usually happens is that at the end of the check, you then end up in a showroom. And there, you then select your next pair of glasses.
But she now is a teenager. She wants some cool glasses, and the shop usually doesn’t have what she’s looking for. So she ends up buying something that is the closest to what she would really like. And obviously, now during the pandemic, you don’t want to go into any shop to try on anything.
And there are companies like Warby Parker that do this really well, that are offering a virtual interface. You can use your smartphone. You can use your computer, and you try on glasses virtually.
And not just this, they will use artificial intelligence to scan your face and see, OK, you’re a teenager. You are female. Your head is shaped in this way, and then they will recommend glasses to you.
And I think in an ideal world, you would have this when you go to a physical shop. You have someone that really understands what would suit me and then make recommendations, but the reality that I’ve experienced over my lifetime is very different, that the optician usually or the salesperson sits behind a counter and says, just try on all of them and see which ones you like. So actually, the new digital first experience is better. I have a better experience, a better recommendation, better choice, and it streamlines the entire process.
WILSON RAJ: That’s fantastic. And I think you really highlighted some of the key capabilities some of these successful brands, like Dulux or IKEA and Warby Parker are using. They’re using or they’re adopting technologies such as not just AR and VR, but they’re using artificial intelligence, such as Elements. They’re machine learning computer vision in that example, and they’re optimizing that.
And actually, this pulse report showed that these technologies, the adoption of this is accelerating. Literally, they’ve been shortened from a three-year span or a four-year span to an 18 to 24-months span. So the acceleration, this integrated technology investments so that brands are now rethinking operation models.
And it’s not just these technologies. They’re also looking at, as you mentioned, automated subscription, chatbots, 5G, distributed ledgers, blockchain, and so on. So the adoption of technology is so fast. So what are some of the things that brands, now shifting from the consumer now to the brand side, what do they need to think about to put this in a way that’s not just a tech stack, but something that adds value to this new digital consumer that we’ve been talking about?
BERNARD MARR: Yes, so for me, the key here is that you actually start with the customer. So the biggest mistake you can make is you look at all this really exciting technology, saying, oh, virtual reality. Oh, artificial intelligence, 5G, let’s put all of this in place, and hopefully, we will have a successful business. This will never work unless we start with the customer in mind and really think, how do we add value? How do we solve their problems?
And for me, Amazon is a great example because as a business, they’ve always done this. One of their strategic mantras is to be customer-obsessed, and they actually have created this really nice process. So whenever they think about digital transformation, they are starting with a press release that will outline how this digital transformation has made the customer experience better. And this is their starting point, and then they go backwards and say, OK, how can we now use technology to actually implement this and make this better?
So for me, it has to start with value creation, really thinking about how I’m adding value, how I’m making the journey for my customers easier and better. And then once you’ve done this, you can then think about, OK, how do we establish a better relationship with our customers? This is also something really important, having this continuous engagement.
And companies like Body Shop here in the UK, they’ve done this really well. So they’re a cosmetics company, and they have now started a direct channel that is very successful. So something that companies like Avon have done initially, but they are now building this. So they have this continuous dialogue with their customers. They have this ability to understand what customers actually want and how their behaviors are shifting.
And we’ve seen this in other companies, like Netflix, have had this for a very long time. They have all the insights about what consumers actually are consuming, what they’re interested in, and this is why Disney was so keen to start Disney Plus because they didn’t really have this. They didn’t have the intelligence and the understanding of what customers want.
They can produce a great film. They can then put this out on their channels, but all the organizations, the cinemas, the streaming services that are then showing this, they’re getting all the data back, saying, obviously, they’re not just watching Disney films. They’re also watching all these other films. So this consumer understanding was lacking, and this is what Disney is now doing well. So for me, start with value, then build relationships, and then use that understanding of your customers to drive insights to get the data and the insights that can help you to reshape your customer value proposition.
WILSON RAJ: You know, Bernard, what you talked about, starting with the customer, the value, the relationship, and then it’s really this virtuous cycle. And to me, I’ve seen examples like this, and the term for me is this customer experience. But it’s really becoming more as relevant as a service. Just like you have software as a service, basically, the customer is just expecting organizations to anticipate their needs and act on their behalf in a continuous manner, using AI to eliminate navigation here, or complex navigation, or anticipate needs, and then making smart decisions. And the one other example I’ve had some experience with is an online insurer, Lemonade. It’s a small company. It used to be a startup in New York.
And they’re using the things, Bernard, that you talked about, AI, data, forecasting, a chatbot that reviews an insurance claim, and then it checks it against the customer policy. It runs about 15 to 20 anti-fraud algorithms on it. It approves the claim, sends the wiring instructions to the customer’s bank, and then lets the customer know like, hey, you’ve got the money in the bank. All this within 3 and 1/2 seconds.
I mean, that is truly a great example of relevance as a service, and again, all the examples that you talked about, I think the new operating model is this notion of relevance as a service. Now along with that, Bernard, I think the fundamental thing here is the data. Are brands overlooking– are there types of data that is left uncaptured or underutilized that could really drive some of this virtuous cycle of value and engagement and relation that you’ve been talking about?
BERNARD MARR: Absolutely, and there’s lots of untapped data out there. But this also comes with a big warning here from me because what I don’t want companies to do is to fall into the trap of collecting everything just in case. Sometimes, when you listen to analytics companies and data vendors and storage vendors, they tell you, collect everything because at some point it could become useful. I think this is a really dangerous route to go along because what you want to do is you want to really figure out what data do I actually need.
And so for me, with lots of my clients, we approach this almost from a data minimization perspective where we say, let’s figure out the 20% of the data that we really need that will drive 80% of our value. So when I worked with Shell, the global energy company, on their data strategy, what we then made sure is that for every bit of data they were now putting into their cloud, we said, OK. Well, let’s make a business case for this. Why do we need this? What’s the value of having this data?
And for me, there are too many organizations that fall into the trap of simply dumping everything they could possibly measure and collect in terms of data, and dump this into a big data lake, and then hope that at some point, this would become useful. So at the same time, there are huge untapped sources of data, so we now have data on almost anything. I remember working with a local butcher’s shop here in London, and when we started working with them, the founder, the dad, who set up the business 50 odd years ago was very skeptical, saying, hey, we don’t need data. We don’t need AI. We have some real world challenges here that we need to face.
And so I said, OK, what are some of your real world challenges? And he said, OK. Recently, the library closed down. Now a supermarket has moved in, and I now have some real competition here. And I don’t even know what I’m competing on here. Am I competing against them on price, on something else?
So I said, OK. They’re all really good questions. Let’s figure out how we can start answering some of these questions. So they needed to understand footfall conversion ratios, what marketing messages would work and didn’t work, and what we did is we installed a little device in the shopping window, a little Euclid device that picks up our mobile phone signals. Because we all carry smartphones, and these smartphones always look for Bluetooth and Wi-Fi connections, you have this little device that simply counts how many smartphones come past that try to connect to Bluetooth. And therefore, you have a very accurate footfall.
What we then did is once they had this information, they could then experiment with new marketing messages, saying, OK. Let’s put a sign out for a week saying we beat the supermarket on all beef and then see what the impact is. The next week, let’s try something different.
Let’s say, OK. Come in for this family recipe that has been passed on through generations on lamb, and not only this, you get all the other ingredients, as well. You get the recipe card, and it is all locally sourced. And what was interesting is– and of course, yes. Those messages really worked, so what this butcher realized once they had the data is actually, it was not about price.
It was really about engaging the community. It was about locally produced meat. It was about their tradition.
And so this really gave them a new focus. So for me, it’s absolutely important to understand the question first and then collect the data and find the data. And there’s so much data out there, but we shouldn’t fall into the trap of just collecting data for the sake of it.
WILSON RAJ: Wow. Bernard, I think this is one of the coolest examples I’ve heard. I mean, this is a family owned butcher, and they’re using data in such an immersive way, the foot traffic, the digital devices are passing by, to be able to really understand and test their messages and their value and some of the offerings they’re doing.
BERNARD MARR: What is interesting, Wilson, is that this device cost $100, and they simply subscribe to a little software as a service subscription. And when they started realizing how useful this is, they then also started to think, OK. What other data can we use? What other questions have we got?
And they are now pulling in some weather data that the government makes available for free, and they can now use this to predict demand. So they know a week before the weather is going to be good at the weekend, so let’s make some more sausages and burgers to get ready for barbecues and so on. So they’ve become a really data-driven company throughout this process, which is nice.
WILSON RAJ: It is. It’s a spectacular example. I think, for them, they didn’t start with all data. They started with some core data and then started incrementally adding because they were asking bigger questions, either related questions or adjacent questions.
And then from there, it’s like, OK, to answer this question, I need this sort of data. I need weather data. I need traffic data, for example, and so on. So I think this operating model is something that I think all brands, all enterprises– I mean, if this family-owned butcher shop can do something like that and be a math house and use that data in very creative ways, then I think the opportunity is available for everyone, as well.
So as we pivot to just a couple more elements, one of the things that the pulse report also talked about was around the convergence for the consumer around not just personalization, but also trust and loyalty. How does that factor in? So we’ve been talking all about immersion and value. There’s also a trust factor because of all this data that’s connected and collected. So what are some of the guidance you would have for CX professionals around balancing the personalization of privacy?
BERNARD MARR: So trust, for me, is vitally important. I’ve talked about the importance of building relationships and engaging with your customers, and you can’t do this unless you have trust. It’s a bit like in our real world, where we make friends, and over time, we build those relationships. And these are usually built on trust.
And companies that are building trust are the ones that are able to offer customers some real value and where customers really understand, OK. This company is actually on my side. So VitalityHealth, for me, is a really good example. They are a health insurance company, and what they do is they want you to be healthier. When you join them, you want to be healthier, so they are saying this is a win-win relationship.
So when you join them, they send you an Apple Watch. So you can track your own activity levels. They can track how active you are. You can then link your online shopping account to them to demonstrate that you’re buying healthy food, and then you earn rewards.
So you then say, OK. I’m healthier. I then pay less for my health insurance, for example. I get benefits for this.
Or in the financial services world, where I’ve done some work with the Royal Bank of Scotland, for example, that wanted to develop better relationships with their customers. And I think in the past, financial services firms have always used data against their customers. So they offer them a great deal on a new financial product, and then they know that after six months or after a year, this will drop to almost zero interest rate. But we’re not going to tell our customers this for a long time, and we will then earn lots of money.
So what they said is that you can’t have this engagement and relationship if we are exploiting our customers, so what they now do is they actually tell their customers, OK. Your banking product, the interest rate will drop to zero in six months time, in three months time. Do you want us to find you a better product? They will now tell you when you’re paying twice for, let’s say, travel insurance, because as a premium customer, you get travel insurance included. And this, for me, is how you build trust, really delivering some value to your customers.
WILSON RAJ: Yeah. It’s not it’s not exploitative. It’s not optimizing your sales numbers by selling this stuff, by saying, hey, you know what? You can save money if you do these things with us. That is a switching of that script to build that trust and obviously, to make sure that trust and data protection is part and parcel of this new customer experience.
BERNARD MARR: 100%.
WILSON RAJ: All right. This has been a great conversation, and we’re going to head into the home stretch here. As we think about the ability to deliver these products and services and experience in this new era, as a futurist, I mean, you’ve probably seen this, and you’ve shared some of the ideas. What are the key one, two trends that you see will be coming up this year and into the next?
BERNARD MARR: OK. I’ve written a book about the 25 biggest technology trends that will define this fourth industrial revolution, but if I look across all these 25, the key ones are that data is now becoming a core asset for organizations, helping them to understand their customers and everything else. Once they have the data, they can then use AI to automate their business, using things like chatbots and machine vision. They can also augment and automate some of the analysis of the data.
Then 5G is a huge enabler that will transform so many business models. I feel 5G is not really recognized across businesses of how transformative it will be. Then this whole as a service revolution, so more subscription based businesses that are delivered via the cloud, and then extended reality, so augmented and virtual reality that will transform our customer experiences. They are, for me, the key trends that I am watching very closely and that are helping my clients to understand and prepare for.
WILSON RAJ: Excellent. In fact, the pulse report did surface some of these key areas around the data uptake, the acceleration of automation and smart technologies, such as AI, within the brand to do exactly those things. So that’s a key part. Now, you’ve been speaking a lot at different events and so on, so what is the one thing that you would have CMOs or customer experience leaders focus on in response to the pandemic after-effects? If you’ve got to give them advice on one thing, what would that be?
BERNARD MARR: Yeah, so for me, there are two key words here. One is humility, and the other one is courage. So for me, what businesses and business leaders need to do is they need to really understand and listen and learn to what is going on around them.
So we’ve gone through this. We’re still going through this pandemic, so really understanding what customers are dealing with, how this is transforming their world, and then having the courage to actually respond to this in a really authentic manner and where you try to experiment and try out new technology that will then help you engage with those customers better. So they are, for me, the key things, humility and courage.
WILSON RAJ: Fantastic. I think those are absolutely key principles to live by, whether you’re in a state of disruption or even if things are going well. Bernard, where can they find more information? You reference a book that you have. Where else can they find more information to learn about some of the things that you’re doing with regard to digital transformation and customer experience?
BERNARD MARR: There’s so much content out there. There are literally thousands of articles and case studies on all of this on my website at bernardmarr.com. I have a YouTube channel where I talk about all of these technology trends. I have a podcast on the future of business and technology that people can subscribe to, and they can find me on social media, on LinkedIn where I share all my content, on Twitter, on Instagram. So there are plenty of ways to stay in touch, and I would love anyone listening to connect with me.
WILSON RAJ: Wow, those were some powerful points you made there, Bernard. It’s critical to create a customer strategy that is both tech-focused and human-driven, but I think your points around having humility and the courage to be able to execute on the strategies is probably the force that really drives everything. So there we have it. I would like to thank our listeners for joining us on today’s episode. Subscribe to our Reimagine Marketing Podcast via your favorite platforms so you won’t miss future episodes.
We’ll put all the resources that we mentioned, the Experience 2030 pulse report, the resources that Bernard mentioned, into the show notes. And I would like you all to join me in the next episode, “Episode Number Three, Experience 2030, the Future of Customer Experience,” where we’ll talk more about these macro trends that impact customers today and how brands can respond to them in real time. Thank you, and have a great day.
BERNARD MARR: Thank you so much.
Episode 3: Experience 2030 – Future-Proof Your Customer Strategy
Welcome to the Reimagine Marketing podcast. My name is Wilson Raj, and today’s episode is “Experience 2030, Future-proof Your Customer Strategy. What will the future of customer experience look like? How will technologies like AI, smart devices, drones, virtual and augmented reality change the way consumers and brands relate to each other? This episode and some of the subsequent ones will feature “Experience 2030,” an ambitious global survey on the future of marketing and customer experience.
I’m joined by Daniel Newman, principal analyst and founding partner of Futurum Research, who worked with us in this global research. The genesis of this research was, of course, at a marketing event. We had a good time in Boston last year at a MarTech conference. And again, all the topics were very salient in terms of AI and IoT and the future of customer experience. And there were all these technology vendors there. And I remember, after the event, we were sitting down by a– wasn’t it a trash can, Daniel?
DANIEL NEWMAN: Yeah, it’s the trash can story.
WILSON RAJ: It was a trash can. And that goes to show, one person’s garbage is someone else’s treasure. But while sitting around that trash can and just musing about the conference and what we felt about it, the idea popped into our head as, wow, what would the future of customer experience look like? And what would be the implications for both consumers and brands? And remember, that set off a spark in your eyes, as I think that you were on the same track, right, Daniel?
DANIEL NEWMAN: Absolutely. And for everyone out there, I’m Daniel Newman, principal analyst and founder at Futurum Research. I’m a seven-times best-selling author, including my newest book, Human/Machine. But for the longest time, I focused on everything from the new rules of customer engagement to future-proofing your organization to, now, the relationship that’s being created between humans and machines, as things like AI and analytics and IoT proliferate to change the way we experience the world.
And yeah, Wilson, I do think you tell the story very well. And for people to try to imagine it, there’s a MarTech conference. It’s like many conferences that take place at a small conference center or hotel. You walk in, and you’re thinking, it’s a tech conference. This thing should be awesome. There should be big displays everywhere. You should be seeing analytics flashing before your eyes, people wandering around with virtual and augmented-reality glasses. But that’s not what tech conferences look like today, right? You and I are–
WILSON RAJ: Not at all.
DANIEL NEWMAN: –planted eating lunch, trying to find a beverage, some coffee, in two chairs that look like they came straight out of any banquet hall, next to a garbage can. And we’re just like, it can’t look like this forever. The future is going to have to be different.
And as we sat there, we started saying, I wonder if we could take a lot of data, ask a lot of questions– not just of brands, like a lot of researchers do, but of consumers and brands. And we can couple all this together to come back and say, what is the world going to look like in 10 years?
And that’s bold. And as an analyst, I can tell you that’s bold, because predicting 2020 or 2021– that doesn’t take a lot of risk. I actually write those posts. You can go on Forbes and read my Digital Transformation Trends post. And you’ll see I’m pretty sound at figuring out, 80% of the time, what’s going to happen in the next 12 to 24 months. There’s a lot of indicators. The data is pretty clear and widely available.
But going out over that horizon, Wilson– that’s what I thought was exciting. And I think you and I sat there. And by the time we left that conversation, we said, oh, yeah. We’ve got to figure out how to do this. But just figuring out how to do it and then even coming to the conclusion to work together– that was only the beginning of what’s been really a year of building to where we are today.
WILSON RAJ: Absolutely, Daniel. And I think the spark for this was certainly that there had been a lot of prognostications around the future of experience. We’ve read it in all the media, in all great publications, a lot of good research papers talking about the future of experience. And to some degree, now, the word “robotics”, or “automation”, or those kinds of things come in.
But I think the question we were trying to delve into was, do consumers really care? Where are they on this journey on the future of customer experience? Are they leading it? Are they lagging? And the other question that we were also interested in is– as we unfolded the research and went about the questions and surveys and so on– was, are brands in line with those expectations? Now, we know that consumer expectations are always sky high. They’re always ahead of the brand. But to what degree are brands lagging? Or are they on par?
DANIEL NEWMAN: Yeah, and I think the question that even builds off of that, Wilson, is, how similar are perceptions? Because some of the most interesting data that we’ll share throughout this series– and of course, we would love to have you download– check out the landing page at sas.com/experience2030, because there’s a ton of data.
And in these episodes, we will share some key data points and talk about what it all means. But we will only get to the tip of the iceberg of all the data that we found here. But not only, what do brands see and what do consumers see? But what do they see the same, and what do they see differently?
We are in an analytics, AI, machine learning-powered world. But yet, a lot of companies still make decisions on gut. They still make decisions on what has worked in the past. They still are guilty of those seven words that are the biggest risk of any company– “we’ve always done it that way.” And the data shows that this still happens.
So the data gives us this window into the future, this exciting window of what customers think they’re going to want. And then it tells what brands think that the customers think they’re going to want. And then there’s these perceptions.
So throughout this series, we’re going to dive in to topics like customer loyalty. And when you talk about loyalty, we’re not just talking about loyalty programs, but we’re talking about being loyalty brands. And we talk about immersive technologies. And what are those technologies? What are those technologies that are really going to change the way people are experiencing companies? We’ve mentioned some of those already.
Another area we’re going to talk about is privacy and trust. And this is an area that all of us knew was going to be near and dear to our hearts, because we’re all struggling with this. Do we want to give all of our data for a great experience? And it’s fascinating to see how people’s answers really differ here.
So we’re going to dive in to all these things, Wilson. But let me ask you this. Before we get into the show and start telling everybody what we found, what was maybe something that really surprised you? Or even better, what did you expect? Let’s tell everybody what we expected ahead of this research. And then when we dive in to the actual episodes, we’ll tell them what we found.
WILSON RAJ: Sure. I think my expectation, given a lot of the things we’re reading around consumer adoption of technologies, is that there’ll be more of a comfort level with technologies such as AR, such as VR, moving to the future. But then an interesting point there was around, there’s still a little bit of hesitation, even into the future, around how those technologies could be construed as being very intrusive. But then, of course, a caveat to that is that there’s still a need for personalization and relevance at all points of experience with the customer journey.
DANIEL NEWMAN: Yeah, I think you hit it on the head. And what I was really surprised by was, people seemed more aware of where they expect things to go. I expected people to be somewhat unsure or uncertain. Asking people to see 5 or 10 years ahead is a big task, and without all the data at their disposal for them to say, hey, when might we adopt a smart speaker? Or, when will I have multiple devices or be using sensors that will be extended the way I use my mobile device?
All these things– people are thinking about it. And I think it wasn’t necessarily expected. So when I came into it, I didn’t know if the data was going to indicate that we had a whole lot of guessing and prognosticating to do, or could we really discern some of the very real trends that are going to emerge? And this data, this project, even had the outcome of a 10-year roadmap.
Now, of course, this 10-year roadmap, where Futurum Research, on our end, actually tried to lay out, in each year, one major milestone that’s going to take place. And you’re going to have to download the report to see that. But we look all the way out over the next 10 years, everything from where a drone might fit in to topics like blockchain and their impact on trust. So we cover so much ground.
But overall, in the end, what we really hope for everybody out there is that you enjoy the data, you find insights that help you steer your business in the direction that you want to take it, and that you find it actionable. And that this actionable data becomes your roadmap, your playbook– which we will have an episode on the playbook– for the future of experience in your business powered by analytics, powered by AI, powered by machine learning, and powered by all of the ways you take those technological topics, and you implement them into your digital transformation to drive the future of your business.
WILSON RAJ: This is a great spot to wrap up this fun, interesting discussion. Thanks for listening, everyone. Join us in the next episode, where we’ll explore how immersive technologies can help marketers create more contextual and real-time engagement for your customers.
Episode 4: Experience 2030 – Immersive Technology > Bridging the Customer Experience Divide
WILSON RAJ: Consumers are dipping their toes in immersive technology, whether they even realize it or not. From Snapchat and Instagram filters, to heads up driving displays, to augmented reality shopping experiences. It’s all creating entirely new ways for brands to engage with their consumers.
Hi, I’m Wilson Raj. And welcome to Reimagine Marketing podcast. Today’s episode is Immersive Technology, Bridging the Customer Experience Divide. I’m joined by Daniel Newman, principal analyst and founding partner of Future in Research and we’re excited to talk about this topic.
When we think about immersive technologies, ultimately it really draws down to one huge thing, contextual and in real time. That’s immersive. The technologies around it are really cool as the research, by the way, you can find that on sas.com/experience2030. And we’re talking about augmented reality, virtual reality, beacons. I mean everything that envelops today’s modern consumer and also into the future. But ultimately, Daniel, when we net it out, when we look at these findings, and we look past the data and look at what consumers are really asking for, they want it to be contextual, situational. And they want it to be in real time.
And we need to talk about that, too. Because real time is not always every time, right? It’s more about the right time.
DANIEL NEWMAN: Yeah. And let’s talk about what consumers are saying.
WILSON RAJ: Yeah.
DANIEL NEWMAN: Because the start here, is most organizations are in some phase of digital transformation. Many organizations still are combing through what that even means. But when you ask consumers about technology, 48% of our 2000 consumer respondents said they have too much technology in their lives already.
Well, if we’re progressing towards more technology, this means we need to apply the technology better, because otherwise it’s fatiguing the customers. 42% are saying they’ve spent too much money on tech that hasn’t really helped them. So this is a gap. This means that consumers are making investments in devices and in hardware and in compute and in tools and technologies that aren’t actually making their lives better.
So immersive technologies can form the heart of customer experience. But that comes down to the technology being applied correctly. Now a little context on this, the long and short is, 360 degree view of customer has been and will be the epitome of what marketers are trying to get at.
WILSON RAJ: And that term, 360, I think that is something that we heard, at least my career , 20 years ago, in a different tech company. And it still resonates today. And I think moving into the future, that’s still going to be the mantra, around the 360 view. Now the question is, can we really get a 360 view, now?
Humbly, I would say probably not. Not a full 360. But we can certainly get close to that amount. And another data point here, that was interesting, is that consumers, they want to be enveloped, maybe to give us that 360 view. And they want a 360 view. So for example, with regards to AR and VR devices in their home today, 61% of consumers reported that they had no AR and VR devices today.
However, by 2025, 60% of them will expect to use these technologies as part of an event or a brand experience. So consumers are looking for a 360 view now. The question is, can us brands do something about that, in terms of what we talked about earlier, from the right context and interacting them at the right time.
DANIEL NEWMAN: And it’s such a big question. I can still remember the first time I put a Gear VR on my head with a S7 Samsung. And I experienced the World Cup, the 20– I think it was back in, was it 2014, the first time I tried it? And then it was really, really rough.
And then it was in 2018, it had completely hit the next phase. And I can only imagine, by the next time in 2022, when the lighter devices, the faster connectivity, we’re going to feel like we’re standing in the middle of the stadium. And that is where we are going.
But from where we have been, it has been a process. And it has taken some time for us to, ultimately, get to where we want to go, Wilson. It may be interesting though, to just kind of go piece by piece and talk about what the different technologies are.
Now as a reference of time, you know we’re in the early part of October in 2019. One major company that’s well known for having a lot of customer data is Amazon. And they recently launched 14 new hardware pieces, Amazon Echo. Everything from a oven, a smart oven, that can tell you, and you can watch what food is cooking at home, to a ring that you can put on your finger that has a haptic sensor that lets when you’re getting alerts on a device, and then can connect to the earbuds that they’ve now built, to read your messages in your ear.
Now people can say, oh, they want to be a competitor of a hardware tech company. To me, it’s the enablers of that 360 journey. Now there’s all kinds of implications here. Do people want that much connectivity? Do they want their data being shared? Do they want their smart assistant in their pocket all the time?
But to get to 360, we’ve got to get to people’s data outside of the home and in the home, outside of work and at work. And that’s kind of the direction we’re seeing go here. So as we go from, like I would say, the least to most immersive here, I would say, the first immersion is having technologies that are capturing all of our data inside and out, which is going to get us closest, Wilson, to that 360.
So you’re seeing companies start to do it. They’re starting to build tools and technologies that can start to– what are we buying? Where are we buying it from? Where are we shopping? Where are we eating? What are we doing? Where have we been?
That’s a good start. But to get the rest of the journey, people have to really participate and they have to stay connected all the way through the day.
WILSON RAJ: That’s absolutely right. And I think even that starting point, which I think we could safely call that the notion, whether it’s real time marketing or real time predictive analytics or real time intelligence, whatever you want to call it, that notion of real time is really key. And I think we need to parse that a little bit more. Because it goes beyond just the ability to market or to establish a connection in real time.
I think one way to look at this, especially today, and especially as we move into the future, is to differentiate between customer facing real time and what we call operational marketing real time. So a customer facing processes will be things that– how we executing on your strategies. And that’s where the data and analytics capabilities can allow customer experience leaders to create value for their consumers and prospects throughout the journey.
Now real time operational processes will be really more about the real time capture of data, analysis of that data, and then decisioning of that data to be used, either at that point of need, which is now, or it could be sometime later. So I think it’s a misnomer to call those things real time, because data capture is always done in real time, to your point, Daniel.
But then the execution has to be algorithmically done so that it is executed at the appropriate moment, along those touch points and across those media devices, whether it’s an oven or a ear bud or a smart TV or an Amazon Echo. And I think that therein lies that opportunity, to be able to hinge and connect all those things together for that immersive experience.
DANIEL NEWMAN: So we’ll call that immersive technology one, which is the bot, the AI, the smart speaker, voice assistant, that we’re going to see entrenched in our daily lives at home. But also we’re going to start to see more of that kind of technology being used in the workplace. There’s no question about it.
Whether it’s Microsoft assistant on your Windows machine or it’s Siri on your iPhone, we’re not just using that for personal. We’re using that to schedule meetings and appointments and to help us find documents on our computer, which is all immersive technologies. But then there’s the next one, and you mentioned a little bit about this, which is those augmented virtual mixed and extended reality experiences. Different companies use different vernacular.
But 54% of brands are investing in this. So companies, certainly, are seeing the point. I still remember, there’s one wine company that, you hold up your camera in front of it and it makes the labels go augmented reality. So you’re seeing basic things. You’re seeing Pokemon Go getting people chasing coins all over town. These are small immersive experiences.
I mentioned the first time I tried it for soccer, to watch soccer content, and how much that’s evolved. But companies are starting to think about, how do we create more immersion? And this can also be in the workplace. This could be on the manufacturing floor. How do we help employees? Which is all part of experience, to develop and build new products more quickly with instructions.
So we’re seeing AR and VR being rolled in, into the experiences. And you’ve kind of covered this one, so let’s talk another thing. What about automation, Wilson? Automation of processes, automation of engagement. What do you think automation is going to do to the future of customer experience?
WILSON RAJ: I think automation is, from a technology perspective, in a hierarchy, is going to be a necessity. When we look at things such as AR and VR, and to your point, lots of brands are using it. You know, Home Depot, you can have AR to be able to look at your room and look at paint swatches and place furniture. And so the immersion there is all about creating value and is experiential, not just experience.
And I think when you’re dealing with that level of data sets from AR, VR, from IoT, from sensors and beacons, that data set becomes unimaginably large. And therefore, some element of automation, in terms of automating aggregation of those, all those data sets, automating, using machine learning or artificial intelligence, in some cases, using computer vision or natural language processing, whatever the case may be as it accrues to those experiential senses, needs to occur to be able to handle that volume of data. And then to be able to orchestrate and synthesize that the right interactions in the right order.
And then after that, to be able to automatically refine those interactions on the fly. So automation now, becomes a key thing. And with automation comes automated decisioning. So we have things such as robotic process automation, RPA. The other things such as what we call intelligent process automation, which is something that we’re talking about here, that systematically automates decisions and actions and data and analytics, to the point where all the heavy lifting is done by machines.
But then the human can then exert some level of judgment or creativity or emotional coding to be able to make that experience, not just immersive, but emotionally engaging, as well.
DANIEL NEWMAN: And we’re looking at a future, by 2030, where brands believe that 2/3 of customer engagements will be done on digital devices. And it will be completed using smart machines. So basically, we’re going to a world of human machine relationships, where 2/3 of customer engagements, 2/3, 66%. I know, I reiterate it. But I think that’s important. In just 10 years, it’s more likely than not, that when you’re talking to a brand, you will be, at least in the very beginning, talking to a machine.
And some of us are probably already feeling that now, to some extent, with some of the chat bots. The difference is automation improves, as AI machine learning proliferates, is going to be the quality of the response. Right now, a lot of it’s programmatic. They can only answer a handful of things. If you think about turns in a conversation, each question resets the bot to the beginning again.
But in the future, conversational AI is going to dominate the type of engagements that humans and brands have, where you’ll have multi term conversations. It’ll be just like talking to another human being where it understands feelings. It can identify locations. It can tie together multiple activities, weather, in planning of your day, for instance.
So we’re going to see a lot of that continue to grow. We talked about real time analytics. One more area that’s going to be immersive, but may be somewhat ubiquitous to a lot of people, is going to be Edge. So there’s a huge amount of investment, I believe it’s about 86% of companies that we talked to, said that they’re spending significant resources to distribute computing to the Edge.
This is going to enable autonomous vehicles. This is going to enable smart cities. This is going to enable a next level retail shopping experience. So this is a pretty big one, Wilson. The Edge, while not necessarily another device, or not necessarily, in terms of what humans are feeling, that real time processing that you talked about and that ability for real time data to turn into a real time analytic, to turn into a real time experience, is really going to be heavily leveraging Edge computing.
WILSON RAJ: And that absolutely confirms that future of experience, where it is going to be more immersive. And you can’t have immersive experiences without an ecosystem. So it’s no longer just a brand, a consumer to brand experience. It’s consumer to multiple brands, over multiple devices, yet across multiple interfaces, all the way to the Edge.
And so you know, let’s say, if you take a financial, a bank, they’re not just doing the core banking needs, in terms of helping someone save money or spend money or borrow money or lend money. The person wants to be able to, say, plan a vacation. So from an Edge perspective, they will be interfacing with different providers, different media outlets, and different players to be able to plan, pay for that vacation, and then go on that trip.
Transportation is involved. So the bank now it has to look at it, and say hey, I’m not just a bank. I’m working in an ecosystem. So I have to be able to move to the edges so that I’m able to be part of that experience all the way through, whatever that journey is.
And that again, takes a lot of compute power, in terms of that data that is going to be amassed. And AI and machine learning is going to play a pivotal role in terms of managing that data set, applying a almost human like intelligence to that, and then orchestrating decisions on the fly.
DANIEL NEWMAN: I think the summation of all of this around immersive technologies, Wilson, is there’s so much interdependence that exists between all of these technologies. So AR and VR will expand as, not only hardware becomes more accessible and pricing becomes more affordable, but also with the growth of speed and connectivity. 5G and Wi-Fi six, which will turn into 6G and Wi-Fi seven likely by 2030, when this is turning the corner.
You are going to see Edge grow, which is going to power autonomous vehicles, but you’re going to need IoT to advance and that 5G technology to continue to become more dependable and reliable before autonomous vehicles reach their point. Real time analytics, all these things, again, tie together.
So immersive really comes down to the immersion, not just of the consumer and the technology, but all of the technologies into one another. And I want to wrap this up with just a couple of interesting data points that came from the survey. By 2025, Wilson mentioned, 60% of consumers believe they will be using AR or VR as part of their consumption.
But let’s jump ahead another five years. By 2030, 80% of consumers are expecting drones to be part of their brand experiences. The same 8 out of 10 consumers expect to be leveraging smart assistance in their lives. And that will completely shape the way that they are engaging with organizations and brands.
So this is just a start. But people aren’t only expecting to talk to smart assistants, they’re expecting the drones to be delivering their packages to their doorstep. They’re expecting to be immersed in technologies that are going to be wearables, they’re going to wear over their eyes. And I’ve said for a long time, that brands really could stand to benefit by putting technologies in front of consumers and actually reinstate our posture vertically.
Meaning, we’ve spent a lot of time over the last decade looking down at our devices. And I do see a huge opportunity, when we immerse people in reality, using digital as a extenuation of their experience rather than the experience itself.
WILSON RAJ: Great discussion, Daniel. Thank you. That’s all the time we have for today’s episode. Join us in the next episode, where we’ll talk about how brands can move beyond traditional loyalty programs to become loyalty companies.
Now you’ve enjoyed today’s show. Please head over to sas.com/experience2030 to gain access to our free resources and more content.
Episode 5: Experience 2030 – Loyalty in the Digital Age
WILSON RAJ: Loyalty begins before a customer becomes a customer. Brands that succeed in the coming decade will be the ones that transform themselves into loyalty companies, and not just have loyalty programs.
Hello, I’m Wilson Raj. And welcome to the Reimagine Marketing podcast. Today’s episode is Loyalty in the Digital Age. I’m joined by Daniel Newman, principal analyst and founding partner of Futurum Research. And we’re going to talk about how brands can build, sustain, and strengthen this elusive brand loyalty.
DANIEL NEWMAN: Wilson, we all know what and a good loyalty program looks like. And we know the importance of a good loyalty program. You and I, for instance, we’re travelers. Our work has us all over the world. You were just in South America. I make multiple trips– six continents in the last year. I’m a One World flyer. I’ve memorized my American Airlines rewards. I’d read it out, but no one would care. But the fact is, I know it. And it’s because these companies have built programs to earn loyalty.
But as a whole, there’s some industries, whether it’s your airlines, whether it’s your favorite cup of coffee, or maybe where you like to eat out for your quick take meal all the time, where a program is the difference between success and we’ll say failure in terms of building a customer program that keeps people coming back.
But in a lot of industries, it’s not programmatic. It’s not having a rewards card, it’s not an app. But it really comes down to doing so much more as it pertains to building customer loyalty.
Wilson, welcome back to this show. Big topic, excited to talk about it?
WILSON RAJ: Absolutely, I think you and I, between the two of us, we probably have, like, 20 loyalty cards, right, as it relates to hotel rewards, and airline travel, and car rental? And I think therein lies the opportunity but also the challenge.
Because loyalty programs, by and large while some are better than others, is predicated on one thing and one thing only. It’s all about transactions. It’s all about how much we bought, how much we flew, how much we stayed in different hotels, how much we purchased.
And so that is something I think I’m excited talk about this research, is going to the future, just basing loyalty programs on the volume of transactions or whatever those metrics may be for different industries isn’t going to cut it. In fact, I think we would be bold enough to say that loyalty programs are dead. Long live loyalty. And so let’s unpack that a little bit more.
DANIEL NEWMAN: Absolutely. And I think we could start with some data. Because, well, we talked to 4,000-plus respondents. And in case you haven’t tuned in to any of our earlier episodes, this is a global study. 4,000-plus, 2,000 brands, 2,000 consumers. You can get the full report at SAS.com/experience2030. There’s so much info. Let’s unpack it.
42% of consumers say three or fewer brands provide a high level of customer satisfaction. Now, to give a little more context, it’s three or fewer consistently provide that, of brands that people engage with. Overall, people don’t find, Wilson, that they get a great experience.
And so when you say brands, they’re talking about every experience in their day. They’re talking about where they eat. But they’re also talking about B2B relationships that they might have through work. Three or fewer, when people on average engage with hundreds of brands. It’s a very significant data point. And as I’ve said in some past episodes, it’s an opportunity.
But it’s also somewhat alarming. Because when you go up to, say, six or 10 brands that consistently create a great experience– 12%, Wilson. People only have a few brands in their mind that really consistently create great experiences.
And I want to give you one more data point. But there was a study that came out a few years ago that said something like 89% of companies in the year 2017 intended to compete and differentiate themselves on customer experience.
So all these companies that, a few years back now– we’re looking into 2030 and this is a few years ago, said that they were going to differentiate and compete on customer experience. But our survey panel doesn’t agree. Our survey panel does not feel. So this is a perception gap right here.
WILSON RAJ: It’s absolutely a perception gap where brands are putting a lot of effort into building customer journeys, into personalizing and making them really real-time and contextual, while there’s still that value around special recognition, right, or rewards from a consumer perspective?
And I think there was another stat in there that also caught my attention, around that 50% of the brands consider quality as the highest rated factor that drives consumer loyalty. So the quality of the products or services offered in terms of not just the price, but the quality. And I think the touchpoints have to be considered as drivers of loyalty. Brands have to close that perception gap.
So not just again, we talked about earlier as an end loyalty program, but around the journey itself as they’re interacting, how can they build loyalty and efficacy in terms of that brand affinity? That is really the challenge. I think from a data perspective, there’s a lot that can be done.
Brands can help consumers what I call save attention. That means do the thinking for them. Outsource, deploy, use AI or hidden intelligence to make recommendations and free up that attention that is so crucial to brand affinity.
The other one is they could shorten these journeys by incrementally improving each step of the journey, removing any kind of barriers or any kind of pain points, and then defining those expectations on the fly in terms of quality and expectation. So those things can be done on an incremental basis and not just to have an end loyalty program in mind.
DANIEL NEWMAN: Yeah, I think there’s so much about continuous improvement that’s going to be key for experience and experience creation heading into the next five and 10 years. I think a lot of companies want to solve it overnight. But a lot of it does start with things like getting your data in order, having the right set of data, start building the right analytics, incorporating machine learning. And we’ll talk more about that when we dive into the tech.
But from a loyalty standpoint, one of the areas we really focused on was the attributes that create customer loyalty. So we looked at today, what drives loyalty. And then it’s Experience 2030, so we asked well, what about five and 10 years out, what’s going to drive loyalty? And just to kind of give a top three today, the top three is pricing, which is a little scary because so many companies believe that you can overcome pricing by providing more quality. But quality comes in second. So right now it’s still special pricing at 39%, with high quality products coming in at 35%, and speed– and you can ask Amazon, who has made massive investments to get to same day delivery in so many instances– that came in third at 31%. So that’s today.
Now let’s just jettison into the future. People seem to think pricing will be surpassed, usurped by quality. So well, 39% say low price is number one today, 56% say quality in the future. So maybe brands are onto the right track by moving towards a quality model. Pricing then falls in behind at 53%.
And then there’s a big drop off. But in third at 24% comes to special recommendations and upgrades. So companies personalizing experiences seems to be shooting up. Now, I would actually suggest put my analyst and futurist hat on and say that number will be higher. That’s the difference of people who can’t quite see what’s going to happen and what will happen. But they’re on the right track. They get the fact that getting more personalized, getting more specialized is going to make a difference. When you saw this top 10 list, sort of, how did you react?
WILSON RAJ: You know, I’m in the same– putting the SAS hat on, I would say that the third component around contextualisation, around personalization, rising to the top will become the key impetus for building loyalty. As we talked about earlier, you know, the early activators of loyalty, they’re still around rewards, based on transaction, right, points, amount spent, miles flown, et cetera.
But as we move into five years from now, 10 years from now, the quality is always a given, right? That’s your brand promise. But more and more as we talk about loyalty being embedded into the customer journey, it is really about adding two more dimensions to the reward and transaction.
The second element that we added is value. What value, what incremental value along the journey, whether even before you become a customer all the way until you become a brand ambassador, and all points in-between, what value are you offering them in terms of ease, convenience? There could be an emotional component to the brand, whatever that may be.
And then the third element is recognition. Are you recognizing me not just as an individual, but also my lifetime value to the organization? And I think when you add the rewards, the recognition, and the value components along the customer journey, then that journey becomes a pivotal enabler for loyalty.
So I think the key thing here to remember is that loyalty starts even before you become a customer. So when I’m trying out things on your site, when I’m checking out something on your shopping cart for the first time, wow, that is an opportunity to build loyalty by the experiences that are being provided through that interaction.
DANIEL NEWMAN: Absolutely. And one of the things that we keep coming back to, because of how we designed the survey to have brands and consumers, is this perception and reality gap. And so I started off the show talking about it’s not about brands and consumers having a lack of alignment. But to some extent, there is some lacking alignment that needs to be discussed.
So I earlier provided those top three being today, the low cost, high quality, and immediacy of availability. Well, those were at 39%, 35%, and 31% respectively, by the consumers. Well, brands seem to think quality is number one, with 58% believing it’s that, then at 50% being cost, and 45% saying availability. So it’s interesting. Because they actually had the same top three. So it means they’re able to put their consumer hat on and they’re sort of empathic to the customer and what the consumer is thinking.
However, they’re overrating how one thing can be a differentiator. And clearly, how I see this, Wilson, is that consumers actually probably weigh three or four or five factors into loyalty, whereas brands might feel like it’s one or two. And that’s why such a high percentage is being attributed to a single attribute.
So for instance, we see 39% at number one being the low cost by consumers right now, with 20% being the 10th item, which was consistency of brand and image. Well, the brands just overrated each of them. And their number one was high quality at 58%, and offers, adds information different than consumers expressed interest but relevant– so that would be recommendation engines, for instance– at 40%.
So consumers are putting a number of items together to get to maybe that 100% if you add them in aggregate. And brands are putting everything– they’re seeing them at 40% and 50% rankings for their importance. And so it comes back to a thing of the alignment is they see similar, but they’re overestimating. And I think that’s an opportunity for brands to realize it’s not going to be one or two things, it really does come down to how you do each thing correctly. And with technology, everything from recommendation engines, to corporate social responsibility, to app-based notifications, to just being available to pick up the phone, these are all things that aggregate to create loyalty.
WILSON RAJ: Absolutely. It is a cumulative effect, right? Just as you can’t– the loyalty program itself enough– to be a loyalty company, you have to be cumulative. There’s just absolutely no way around it. In other words, all your business functions, whether it’s marketing, sales, service, support, there could be mid-office operations, has to be gelled in to that notion of loyalty.
How am I rewarding? How am I building value for the consumer? And how am I recognizing them along those points? And I think from a data perspective, this is where it’s exciting from SAS, because we see a lot of our customers using data along the journey to build those points.
So a good example of that multifaceted loyalty engine would be Orlando Magic. Now, for them of course, for sports franchises like that, the season ticket holder is the epitome of the loyal customer, right? Because I bought a season’s worth of tickets and I’m guaranteed– well, at least from a revenue perspective, right, I spent that money.
But they go beyond that. For them, it’s an immersive experience from the time you leave the home to go to a Orlando Magic game, you sign into the mobile app and you’re getting pre-game data about your favorite players in real-time. As you near the venue, the app directs you to your parking spot and then gives you turn-by-turn signals to your seat where now you can actually order what you had the last time, you know, a hot dog or a burger. And then you could even– while you’re enjoying your food and watching the game, you could call the mascot to do a selfie with you.
Now, along all those points, what Orlando is building is experiential loyalty, not transactional loyalty. And that’s what five years from now, 10 years from now, is going to be that difference. And so they’re building fan experience. I think to me, a good reminder for our audience today is hey, we all want to make– not just make it a customer experience, but make it a fan experience of your brand.
DANIEL NEWMAN: I think the owners in marketing leadership at the Orlando Magic have spent a little time experiencing the magic of Disney, not so far away.
WILSON RAJ: Yeah.
DANIEL NEWMAN: Because so much of what you’re saying makes me think about the princess that shows up at the dinner of your seven-year-old daughter, and the eyes light up. And I say, that child will grow up someday, and have a family, and return to Disney. And it will be a moment like that, that immersive experience.
And it happens in other places too, Wilson. It happens– I talk about Starbucks all the time. They really do understand how to do immersive experience. From end-to-end, their stores, starting with their whole third place concept, it’s a place where people come, and they settle in, and they work. And the baristas are very personable.
They’re also well-compensated and cared for because that translates into better experience, because they get tuition reimbursement and they feel like they’re part of a company where they can grow. And they pass that along to the consumer.
But then it actually continues to expand to the app, right? Where the app is very well-designed. It tells you what you’ve ordered, it tells you– you’ve got your little stars, and you can get your items after you spend so much. It connects to your pay systems, whatever your preferred method of payment is.
And it just makes that whole– from the time I decide I want a cup of coffee to the time I get my cup of coffee– experience so seamless. So you have your loyalty program. But the loyalty really is in the fact that they’re getting to know you, they’re delivering relevant information to you. Each time you go into the store, it’s consistent. That journey, each shopping journey is similar, and familiar, and makes people feel good.
So it can be the Orlando Magic at a stadium. It could be your favorite theme park. But it could also be something as simple as your everyday cup of coffee. And one of the things specific that I thought Starbucks does so well is the utilization of technology. And that kind of brings us to the last part of our loyalty section, was what are the technology features that drive consumer loyalty? Wilson. What were some of your takes on some of the tech data that came back from the survey?
WILSON RAJ: You know, I think all the examples that you mentioned in terms of Starbucks, and Disney, Orlando Magic, and Carnival, even the cruise lines, they’re using the same sort of point of presence, beacons, et cetera to be able to harness a more immersive experience for folks on the cruise, right, whether they’re on the ship or off the ship.
And I think a couple of things, coming in from a technology perspective, number one is a sort of a customer data platform. And I use that term very openly. To me, I’m not going to a specific CDP definition. But there is a customer identity capability in terms of trying to identify folks on a one-to-one basis in terms of not just all the transactions I’ve done, but also with Wi-Fi, with beacons, you know, location-based services in terms of where they are physically, where they are digitally on a journey. So having an ability to be able to collate and coalesce all those different data points that speak to my customer state is absolutely crucial.
And number two, there has to be obviously an application of analytics. So all the things that we talked about, whether it’s Disney, or Starbucks, or Orlando Magic, these brands are using advanced analytics, generally powered by machine learning or AI to be able to do those recommendation engines.
Now, if you look at Amazon, which is another good example, they have about 20-plus, maybe 21, 25 data science systems. So you have recommendation engines, which are connected to pricing systems, which are then connected to content, which are then connected to inventory, and so on.
And any time there is a signal in one of these systems, let’s say from a consumer demand, it sets off a chain of events that then orchestrates the right pricing, the right inventory, the right content recommendations, delivery options to that specific signal. So again, the application of analytics along the customer journey, not just broad customer journey, but specific points, and articulating that and orchestrating that from an experience perspective is something else from a technology perspective that really weaves everything together.
DANIEL NEWMAN: Yeah, and it was interesting to see what consumers and brands look at when it comes to driving loyalty around technology. Consumers are quite simple in this. The number one thing– real-time product order tracking. That’s what they want, 31% said that. Ironically, brands didn’t have that in their top five.
So either a, the brands have skipped to the future and they’re not even thinking about the blocking and tackling, pardon the sports analogy, or they just don’t rate that as highly. But I can say as a consumer, even as a business buyer, the first thing I think about after I procure anything is, when do I get it?
WILSON RAJ: Right.
DANIEL NEWMAN: So that, to me, is either, like I said, almost a survey faux pas where they just missed that answer, or it’s a little bit of a wake up, like hey, do the basics first. Because the first thing that the brands were focused on was mobile, mobile apps, having a mobile app experience. And that was number two for the consumer. So they weren’t wrong there. But start with the basics.
Some of the other areas that were interesting was high-speed access to site. We’ve heard those stats probably over time. And if you’re a marketer, or an experienced designer, or a business owner, you’ve probably heard things like consumers only spend a few seconds waiting for a site to load. Or if an app is slow or difficult, they bail. So that certainly ranks very, very highly.
Brands are very driven by things like tracking offline. And you’re starting to see that with the proliferation of IoT. Consumers don’t have that high up on their list. And that kind of goes back to our Trust episode, which I hope you’ll take some time to tune into, which is another area that Wilson and I cover and that’s covered throughout this study. So that’s kind of like that today.
But let’s just flip for a minute and look into the future. So when we asked people to start thinking ahead, this kind of shows maybe not so much even a gap, but where brands are probably spending a little more time thinking to the future and individuals are spending a little less time. Individuals, consumers are saying from 2025 to 2030, they’re now becoming very interested in that mobile experience.
Well, I think brands are like, we’re past that. Now they’re starting to think about ordering from your smart speaker in your home. They’re thinking about 5G and how important it’s going to be that, when you’re in the subway underground, that you’re still getting one gigabyte per second speed so that you can shop and buy an experience.
So consumers, I think are– this is where they really need brands to start tying in and helping them see the journey and experience it themselves. Because consumers don’t have always the full picture. If you’re talking about over 2,000 consumers, not all are tech savvy. Not all of them necessarily are focused on what might be next. And that’s where CMOs, and chief digital officers, and analytics leaders need to start to sort of paint the picture for consumers so they can see the future.
And this became very, very clear because topics like automation, artificial intelligence, 5G, and smart speakers– only smart speakers really made it onto the list for consumers. But those were all on the lists for building loyalty through technology in 2025 to 2030.
WILSON RAJ: I think this is a good example of where now this time the brands are over indexing on technology. Because through this research, we have seen how consumers are adopting technology typically generally at a faster pace than marketers are adopting marketing technologies, right?
But here’s where there’s an over-index, and then leaving the fundamentals behind in terms of, again, you know, how easy it is, how handy is the experience, how enjoyable is the experience. These are all hallmarks of loyalty. And I think if brands would just to fixate on a couple of the key things, what makes a moment of truth is really– there are three elements, right? There’s informational– I want to know something, I want to know how to get a price quote, I want to know how to return something. So that’s all these informational elements that are baked in throughout the journey.
There are transactional moments where they want to do something. They want to actually order something or they want to exchange as an action. And the last one is they need help. So they want to do something, they want to know something, and they need help with something.
Now, when brands wrap all those things up into a nice emotional experience, right, which is really the brand promise, then you have something that can always be building loyalty throughout. And again, this is where that data that could be used in analytics can be used to inform the intelligence to power those experiences.
DANIEL NEWMAN: Yeah, there’s so much to loyalty. And it’s such an important topic for the customer experience of the future. As we head into the next 10 years, attention spans continue to get shorter. The options become greater. The world has been opened up. Everybody can pretty much access all goods, products, services, supplies.
Disruptive forces are coming out of nowhere. And this is going to increase the need for brands to basically pay attention to customer experience and to building loyalty for their customers. Is it overshooting on technology? I think it’s making it easy, is what it comes down to. If the technology makes it easy, people are going to adopt it. If technology feels like it’s a lift, if it feels like you’re asking me to do more work in order to embrace the new technology, then it’s not going to drive things forward for loyalty programs.
But that’s going to be really a key activity of the brands over the next five, 10 years, to make technology transparent, utilize it in ways that consumers are having that better experience but don’t really realize it. And we see this every day. We mentioned our examples throughout this show when we talked about the Magic, when we talked about at Starbucks. Most people haven’t thought about all the technology that has gone into making these great experiences great. But the results have been happier customers.
So loyalty really starts with the basic building blocks of what do consumers want, how do we make it possible to deliver in the most seamless way possible? But don’t underestimate the importance of the aggregate of several different attributes. And that’s probably my one other big tip here. Don’t put too much weight into just quality or just pricing. Put effort into everything. And understand that your experiences are being weighed across the board. Your company’s social corporate– corporate social responsibility statements to having immediate availability are all weighing in on what makes loyalty for a customer.
Wilson, I’m going to give you the last word here on the topic of loyalty before we bring this one to an end.
WILSON RAJ: I think at the end of the day, especially into the future, loyalty will be a cross-team game. So it’s not just the marketing department or the loyalty group, for that matter, or even support and service. It is going to be an all-team game. It’s going to be full collaboration. There has to be full data transfer and transparency between all these groups to be able to build loyalty into moments of truth. And that’s where the battle will be won.
And thank you, everyone, for tuning in. If you enjoyed today’s show, head over to SAS.com/experience2030 to access more free resources and great content.
Join us in the next episode, where we’ll address the issue of Digital Trust and how brands can offer the perfect blend of trust and technology. Until then this is Wilson Raj, signing off.
Episode 6: Experience 2030 – The Evolving Nature of Digital Trust
WILSON RAJ: It’s clear that consumers consider personalization a key aspect of a rewarding customer experience. There’s no doubt that those brands that can create personalized engagements with smart, immersive tech will also boost loyalty and profitability. But there’s a catch. Customers have serious concerns about how their data is being used, stored, and shared.
Hello, I’m Wilson Raj. And welcome to the Reimagine Marketing Podcast. Today’s episode is “The Evolving Nature of Digital Trust.” I’m joined by my guest, Daniel Newman, principal analyst and founding partner of Futurum Research. And we’re excited to talk about how brands can offer that perfect blend of trust and technology.
DANIEL NEWMAN: I think anybody who’s provided their data, who uses social media, understands that sort of balance between giving their data and receiving an experience. And as time has gone on, we’ve seen more and more visibility out there in the market, from data breaches, to how my data is being used, to even very, very world issues, like elections and how privacy and data can be utilized to possibly manipulate or change outcomes. Well, in the world of customer experience, our relationship with brands comes down to our ability to trust that we can give data and get an experience.
Wilson, I was told early on that nobody will complain when an experience is too good. So as long as the data being given creates an experience that is really, really good, people will never mind it. But in our survey, we dug deep into this topic. We wanted to find out, is that true? And in the future, will that be true?
But before we dig into some of the data, I always am curious when I meet people or when I talk to people, how do you feel about trust? Are you willing to just splash your data out there, Wilson? Or you like me, and being in this business, have you become a little bit jaded, a little bit cautious with how you share your data with brands?
WILSON RAJ: You know, Daniel, I would certainly count myself within the masses. And certainly, the research “Experience 2030, The Future of Customer Experience”– and by the way, you can find this research on sas.com/experience2030 in all of this detail. And certainly, this area of digital trust is well handled in that paper.
But coming back to on my experience, I’m like probably all consumers, where I’m willing to trade some privacy for relevant, real-time personalization. Now, there is a fine balance to strike in between my desire for privacy and my desire for personalization. I think this is really the hinge point from the brands I interact with– whether they are retailers, or banks, or telcos, or whatever the situation would be– in terms of, how do they make me feel known and welcome while preserving my privacy? That’s the hinge point.
DANIEL NEWMAN: And it doesn’t seem like there’s a lot of consensus just yet on how that’s accomplished. It seems a lot of brands are actively out trying to collect data, both actively and passively. And if you want to understand what I mean by that, well, if you want to download an asset, “Experience 2030” at sas.com/experience2030, you may have to fill out a form. That’s an active participation in sharing data in return for a very, very good report
But a passive experience might be something like location services turned on when you’re using an app on your phone, or cookies that a website can collect that look at how you’re shopping or what you’re looking at when you’re on a website. So there are many ways that we’re giving privacy and giving data in exchange for experiences.
And there are some really interesting stats in this study. We looked at things like, do people believe that brands can keep their data private? And about 54% of people said yes, they believe so. And so while that is the majority, Wilson, that also kind of is concerning, because that means a lot of people don’t trust brands right now.
And I’ll give you another stat. 73% of people are concerned with how brands are using their personal data. Now, you, your work, day in and day out, serves the purpose of helping brands use analytics more effectively to get better insights about their customers. So this is probably a data point that you’re really going to have to take into the boardrooms and into the meeting rooms. 73% concerned with how brands are using their personal data. How do brands correct that?
WILSON RAJ: Now, I think that the onus is back on the brands. So from a SAS perspective, clearly, our whole mission is really to turn a world of data into a world of intelligence for our customers across the world. And because we deal with data, one of the things that we have incorporated into our operating rhythm or our mindset is this notion of the principle of digital guardianship, where as a company, as SAS, because we deal with data, because we deal with lots of data that come from both passive and active interactions from a customer perspective, we are certainly putting in mechanisms in place that help meet those expectations of rising privacy.
So for example, things such as model governance, things such as data governance and data security, putting in protocols in place to secure all that data. Whether it’s on the cloud, whether it was on premise, or whether it’s in a hybrid mode, it does not matter. So we are actually putting in those digital guardianship principles in play from a governance, but also from a technology perspective. How do you limit the lifespan of a model before it ages out and before it starts collecting other extraneous data?
So I think that’s the key thing from our perspective. And I suspect that other brands will have some element of digital guardianship for themselves. For example, having retention dates for how long they keep data, securing that data. And also from the other perspective, how do you communicate how that data is used through very clear terms and conditions? So to me, all that comes under digital guardianship.
DANIEL NEWMAN: Yeah, I think that’s an important topic. And I think another insight that we really pulled out of this, our team of analysts that reviewed all this at Futurum, is control. And I think we’re going to have to move towards a future where there is more control that the individuals have over their data. Because one of the big takeaways was people’s lack of trust kind of comes back to a feeling of being out of control with how their data is collected and then where it goes. And I’ll give you a couple of data points there.
One, people’s fears and concerns about how they’re being tracked when they shop. That can be online, but also in a store. 64% said they don’t like when they’re tracked or recorded on camera, at an event or any public place. So people don’t really like being on camera. And 57% of people don’t want to be part of any facial recognition. And we already know it’s moving that way, but the majority of people don’t want it.
Now, that’s sort of a lack of control on premises, if you looked at it that way. Now, let’s talk about a lack of control in the background. People want to know if they can get to the data and say, hey, Facebook, what do you know about me?
We all have heard those stories. There’s hundreds if not thousands of pages on all of us that these data companies, these social companies, for instance, have. But asking for that info, it’s almost impossible to gather, because there’s really no responsibility at this point for that to be clearly showed.
Well, 78% of people want to be able to know what’s been captured. And then they want to be able to change it. They want to be able to update it. They want to be able to delete it. Well, as of right now, that’s not a reality.
And this is kind of an interesting thing looking towards the future, Wilson, is 61% feel they have no control over the privacy they need for themselves, their family, and their children. So there’s a trust issue that’s being created by control. But I also think that’s an opportunity from the data for brands to utilize that to differentiate themselves. And we’ll talk about that more in a future podcast where we really dig into recommendations for each section of the study. But that was really, really interesting, and we see it as a clear opportunity.
Now, I want to move into a new topic, because another part of the survey we focused on was trust and untrusted brands/industries. And there was a lot of very interesting data. We looked at over 10 different industries, and we looked at what was most trusted and what was least trusted.
And Wilson, I’d love to hear from you. I’m sure going into that, you probably had some thoughts of how that would land. How did the rankings land compared to how you kind of felt they would land, and any takeaways you have from that?
WILSON RAJ: I think that the findings aren’t very surprising. Typically, even in other surveys, we’ve found that folks who are dealing with banks or with health care or health data, there seems to be a higher sense of secure data, simply because there’s higher legislative forces that may exert it on those organizations in terms of a higher standard of data governance, a higher standard of data access and security.
Now, I think to your earlier point, brands, regardless of whether they’re on the low trust or on the high trust spectrum, regardless, moving to the futures, data privacy now becomes a competitive customer experience differentiator. I think that’s a key thing. So instead of looking at it as a negative, as a governance thing, organizations can look at that as a customer experience enabler.
So the more they can make consumers or prospects feel that their data is secure and is used for the express purpose of providing them with relevant, contextualized, personalized interactions, then the more consumers will trust those brands. And I think part of it, as we alluded to, is providing mechanisms for individuals to be able to check and review their personal data to ensure accuracy, to ensure that the data is used properly.
And also to your other point, you gave the other word, “control.” There’s giving them complete control to be able to take that data out, so there’s data portability there, and also to be able to request different dimensions of that data to be used in different ways. And that’s all that is the consumer power right there.
DANIEL NEWMAN: Yeah, I have to say– and to be clear, we actually looked at over 25 industries and then broke it into kind of top 10’s. And then the way we broke it down further was we looked at most trusted and least trusted, or you could, quote unquote, call it “not trusted.” And there were some fascinating data points that came out of this.
First of all, Wilson, and what really blew my mind was, of all 25 industries, only one, one industry, actually had a greater level of trust than distrust from the 4,000 respondents, and that was health care. And that number came in at 51% trust, so just over the line. That’s a huge opportunity. It would be easy for me to jump in and say, that’s a huge problem. But what I see is the cream of these industries are going to rise to the top and leverage technologies, utilize communications and transparencies, to end up helping consumers trust individual brands within industries.
Because there’s always going to be the best of breed. There’s always going to be your outliers. There’s always going to be those that, unfortunately, abuse and take advantage. And hopefully, what ends up happening is those companies that really embrace this opportunity are able to differentiate themselves, and not only carry their industries forward respectively to having greater trust levels, but carry their companies to being those more successful organizations at 2025, 2030, and beyond.
It was interesting to look at who’s not trusted, because the top three are really– it’s crazy, but top three are all areas where we would typically garner the information we use in our lives to make decisions, from elections to where we make decisions on what things we buy. The highest not trusted number came out at 47% for social media. And we all know– and we’ll talk more about this throughout this series– that’s a big recommendation engine for where we decide to buy things.
The next one was news, advertising, and publishing. Well, that’s another source of information that consumers use to make decisions in B2B, B2C, B2B2C. Those are big outlets, right? We read and we learn and we consume.
And the third one was government and public services. So we’re saying we don’t trust our social media, we don’t trust our news, advertising, and publishing, and we don’t trust government and public services. So that kind of creates this scary divide between where we get our information and how do we use this information to make purchasing decisions.
WILSON RAJ: Absolutely. And I think a lot of it, if you look at the back of these things, such as social media and some of these other things, is driven back by algorithms. Look at, like, recommendation engines and so on. More and more, you would read in the news how companies such as Google and Facebook are using very advanced data analytics to parse through that data to be able to provide in surface content, which the algorithm, however it’s tuned, thinks is the right one that the consumer or the audience wants to look at.
Now, again, I think that brings up another point around the efficacy of those algorithms. How are they tuned? Most of this is black box, where, from a SAS perspective, we believe more in a blue box, where we lock it down so that you don’t mess around with it. But however, data scientists have an opportunity to govern those models, to test those models, and to make sure that they are reducing bias in those things.
So I think the interesting concept here is that as we get to a more data-driven, more algorithmic construct of customer experience, there’s also this danger of distrust, because now these models or algorithms somehow are not necessarily neutral. They’ve been tuned, and they may be acting off data sets and recommending things but then maybe masking others.
Now, I’m not saying that’s intentional. But that’s why I think, when I maybe talk about digital guardianship, it’s not just making sure that your data is secure. It’s making sure your algorithms are secure and making sure your algorithms are updated and they are truly learning and taking into account all those data points to provide the most optimal recommendation or next best action.
DANIEL NEWMAN: Great omnichannel experiences really should take into consideration where the customer, where the consumer, wants to be contacted and enable that. And so to your point, though, some people want automation, and some people want an AI chatbot to communicate with. Some people want a company to pick up the phone and answer their questions.
And trust is created through those different channels. If they have a great experience, some people are completely willing for that passive, automation, technologically driven, algorithmic communication, and other people really still want human-to-human. And companies being able to deal with that will be able to create trust faster by enabling the right experience in the right channel.
I want to talk about one more thing in these industries. In this study, one of the things we did– it is a global study, and we covered the whole world. So we had 4,000 respondents from all over the world. And it was sort of interesting. We looked at Asia-Pac, Europe, Lat Am, Middle East, and North America separately.
And just a quick stat on each. I figured I’ll give that, because depending where in the world you are– and we hope you’re all over the world. Asia-Pac actually, for instance, had a higher level of trust overall. There wasn’t a single industry where their level of distrust was higher than their level of trust, which is a positive thing to see in parts of the world. And that might mean there’s some learnings from the way Asia-Pacific based companies are run that they’ve been able to garner this greater level of trust.
However, in several other regions, specifically Europe and North America, there’s a trust crisis. So in Europe, it’s an average of 39% are not trusted versus only 32% trusted. In North America, no industry has 50% plus consumer trust, and 18 of the 25 have negative trust rankings.
And then you have areas like Lat Am, where the government is their highest distrusted, quote unquote, “industry,” which if you follow the news, there’s probably a lot of reasons you could get to that. And then in the Middle East and Africa, it’s their media.
So you see, Wilson, this disconnect between where we get our information and who we trust is so significant. I can only imagine that as we move on to the final part of this show and we start to talk about overcoming the trust gap, it really does start with the companies. It starts with the brands and the industries being able to communicate to people information that they can use. So let’s talk about that as we come together. Did you want to chime in on the regions? WILSON RAJ: Yeah, absolutely.
DANIEL NEWMAN: All right, go ahead.
WILSON RAJ: On the Asia-Pac stuff, you’re absolute right. They are way ahead in the use of digital, in terms of algorithms, to be able to just do their daily lives. And let’s take facial recognition as a form of authentication, right? Now, that market is projected to double to 9 billion between 2018 and 2024, just a couple of years from now. That’s research by Model Intelligence.
And then if you look at in China particularly, companies like Ant Financial services group, which is an Alibaba entity that operates Alipay, and then Tencent Holdings, which runs WeChat, they already launched facial recognition machines at pretty much tons of these point of sales, in retail, in banks, and so on. So they’re basically removing that last barrier between the body and payments, right? So even taking away wearables and whatnot and just using biometrics, facial recognition, to be able to pay bills. That’s happening right now in China. Now, the adoption then, I won’t say that they trust those brands, but there definitely is an aggressive adoption of technology where it’s now run by biometrics.
So I think in Europe, with things such as the Data Privacy Act and so on, there’s an opposite shift where the notion of data portability and privacy is paramount to the consumer. And those are having impacts also in the US in terms of consumer protection laws and so on.
So I think at the end of the day, it still goes back to the fundamental question we talked about earlier. From a customer perspective, there are two expectations. Number one, know me as an individual. But at the same time, you have to do what it takes to protect my privacy. So that those dual expectations, which seem to be in opposition to each other, is what brands have to reconcile today and into the future.
DANIEL NEWMAN: Yeah, so let’s talk about some of the ideas overcoming consumer trust. First, securing their data. About 6 out of 10 companies say that’s the number one thing. That number is too low. It really needs to be 10 out of 10. Every company needs to prioritize that.
And then when it comes to the evaluation of that, less than half of companies actually think they need a continuous evaluation of their privacy security policies. That number needs to go up and needs to be more frequent, because those that are trying to breach and take advantage of data and abuse data are always going to be evolving. It’s the same black hat/white hat issue that’s always taken place with cyber security. So that number needs to go up.
Brands need to enhance the requirements of their partners. About 51% of companies really want to see a standardization among their data security with all of their customers. This is a best practice. You can’t have an ecosystem where you’re very secure but then the data is being released out to partners that you don’t really know how the data is being used. This is a big deal moving forward.
And transparency is a big deal. 48% of companies strongly agree on the value of a proactive approach to transparency. Well, to me, that feels low. We know that companies need to sometimes investigate an issue before they publicize it because of all the collateral damage. We’re business people. We’re understanding of that.
But at the same time, having breaches and then hearing later, 6 months, 12 months, 18 months, that executives had time to unload their stock before they actually announced a breach is problematic. There’s no coming back from that.
And well, in the age of the internet, people’s memories are very short, Wilson. I think we are getting to the point where we’re tired of it. We’re tired of hearing about our data is being breached. This goes back to that lack of control. Putting people back in control starts with getting your house in order. It means getting your data secure, having policies, making your ecosystem work. What recommendations did I miss, or any others that you want to give to people?
WILSON RAJ: To the last point around governance and security, I think the point is absolutely crucial, that things such as fraud and risk assessment– now, you don’t have to be in banking to do fraud and risk assessment, or insurance. Basically any vertical– You could be in education. You could be in government. You could be in retail, hospitality.
But things such as fraud detection, risk assessments, credit risk, all those kinds of things from an analytic perspective are not just confined to the back end, but now have direct impact to the customer experience. So I think looking at those kind of functions within organizations today and bringing that to the fore in terms of asking, now, how can I use my fraud or my risk assessment capabilities, not just to mitigate risk, but to enhance consumer trust? That becomes a pivotal question.
So now it becomes more strategic. As opposed to playing defense, now you’re playing offense and trying to really build that trust. I said earlier, doing what it takes so it’s not just the great campaigns or great personalization or great relevance, but it’s the entire company and all the different functions working together to, number one, secure that data, and then number two, provide transparency in ways that we mentioned here to earn that trust.
And that’s it for this week’s episode of the Reimagine Marketing Podcast. Thank you all for tuning in. If you enjoyed today’s show, please head on over to sas.com/experience2030 to gain access to our free resources. And don’t forget to join us next week for another episode. Thank you for listening.
Episode 7: Experience 2030 – Actions for a New CX Operating Model
WILSON RAJ: In prior episodes, we focused on the key themes of the global Experience 2030 study, smart and immersive technologies, loyalty in the digital age, and the evolving nature of trust. Hi, I’m Wilson Raj. And welcome to the Reimagine Marketing podcast. Today’s episode is “Experience 2030– actions for a new operating model.” And we’ll talk about some key actions that brands can take now to prepare for customer experiences in the future. I’m joined by Daniel Newman, Principal Analyst and Founding Partner of Futurum Research.
DANIEL NEWMAN: Let’s start at the very top. We’ve acknowledged that the world is largely digital. The consumer is more connected than ever before. How do brands engage the digital consumer?
WILSON RAJ: It’s multifaceted for this one. Firstly, it’s obviously to use their technologies that are prevalent, in terms of whether it’s AR, VR, artificial intelligence, drones. And the fundamental question to ask there is what value is being added to that customer journey or those moments of truth? And really, at the end of the day, look at the technology and translate that to human terms. Put the human into every engagement.
What emotional needs are we looking into– what informational needs, what transactional needs, what support needs? And I think once we get that, again, that outside in view, then we can then put the technologies around those need states, and be able to use things such as data management, or AI, and other technologies to be able to then start building those moments of truth or experiences in a very streamlined fashion. And I think part of it, too, we cannot overlook the importance of privacy and security as we delve into those interactions.
DANIEL NEWMAN: So the other thing I think is really important, too, is that we put the humans back into every engagement. See, I think because technology is proliferating, because we are more connected, a lot of companies are sort of mistaking the fact that we are human data points, and replacing that we’re also human. And so companies that are going to be very good at engaging the consumer are going to make the technology more transparent, and they’re going to put people really at the front, but knowing that people want digital experiences. So it kind of comes back to being tech focused, but understanding that deep below lies humans.
And then, I think the other thing that they’re going to be very, very focused on that stays on that particular topic is security and privacy. Now, in the edition where we talked about that at in depth, we basically looked at the fact that customers feel largely out of control. So in order to engage the digital consumer, giving them back control, it’s giving them control of the experience, but it’s also making them feel like they have some level of control in their data.
So let’s talk about this CX divide. How do you think brands can work towards narrowing the gap between the perceptions that they have versus what consumers really feel?
WILSON RAJ: I think the big gap here is really in the uptake of technology. What we have found here through this research, or the research seems to suggest that consumers are a little bit ahead in terms of their embrace of technology and their use of technology. Albeit there are some areas where consumers are a little bit reticent, or they’re exercising caution, such as facial recognition and other kinds of things that we saw in this report. But by and large, they are pretty open to adopting.
Now, I think that part of this perception gap is also a technology gap, because the marketing or the customer experience platforms on the brand side is not accelerating, or is not upscaling, at the same level that consumer tech is taking off. So I think fundamentally, if we were to boil it down, how can they bridge that gap? But then also, how can they prioritize– from all these endless touch points, from all these endless permutations of customer journeys, and moments of truth, what are the most salient ones that truly make a brand preference powerful, and delivers profitability and loyalty?
So to that, they have to turn to that data, maybe use technology such as AI and other advanced analytics, to help do all that heavy lifting for them, so that the people there– the customer experience leaders and marketing leaders– can now reframe, redefine, and be more strategic in their thinking, and augment the technologies to be able to build those and bridge that divide.
DANIEL NEWMAN: And this study is ripe with data. And if you haven’t read the whole thing, sas.com/experience2030, it’s available for you. But data really is the key. There’s still too big of a gap between data available, the insights it could create, and decisions being made.
And one of the big opportunities to improve is simply stop making decisions that data doesn’t support. Get the data organized, move it quickly, fail fast in order to innovate forward. It’s not about failing is good, but it’s about the data will help you get through some of your biggest challenges. And I think that’s one of the biggest ways to narrow the gap.
I will, having said that, give a little bit of word of caution to marketers out there. There is fatigue. Our research did prove you can be overzealous. You can overcommunicate. You can drive your customers wild with too much– too much engagement.
So make sure you’re balancing that. And by the way, the data will tell you. The data in terms of things like response rates, and open rates– well, those were the old days. But that data told you something. And the data now that’s available for how people engage, where they fall off sites, where their carts get abandoned, that’s all hints and clues of over engagement and under engagement and how to get deals done.
So don’t forget to use the data, and then pay attention to where those fall points are. Because you can create a lot of loyalty, but concurrently, you can also create kind of a bitter or irritated group of customers. And the last thing you want out there are consumers that are saying the experience is overwhelming. It’s almost as bad as the opposite.
So let’s talk about digital trust. This was an important topic. Our show went deep into this. But let’s give some quick tips to the brands that are out there listening to this about what can they do to build trust while staying data driven? Because, of course, you could stop collecting data, but that’s not a real option.
WILSON RAJ: Absolutely. I think the first thing that brands must do and should do is that they should view data privacy as a competitive differentiator for customer experience, rather than the necessary evil of compliance or governance. So flip the script. Don’t look at it as an albatross hanging on your neck. But take the opportunity to look at data privacy, the balancing personalization and privacy as a strategic differentiator.
And so look at a couple of ways where you could build that trust. Ultimately, it’s a trust exchange between consumer and brand. One tip here is to internally look at your data stewardship capabilities. Make sure that you have governance, authentication, security protocols in play.
Make sure that you have properly defined retention times for data. How long are you going to use that? How are you going to get rid of those things? Who has access to what? So there are a whole plethora of things in the report that we have shown to be able to do better data stewardship, or what we at SAS call digital guardianship.
Another element is communicate transparently. Not just in your comms– outbound comms around the use of data– but provide avenues or mechanisms where the consumer can look at their data, check on it, make sure that it’s in compliance with their requests, and to remove it if possible. And then, the last tip I would say is use as little data as possible to be able to understand the customer.
I know, coming from an analyst company, that seems to be an opposite. But again, you have at your disposal very advanced predictive algorithms and models. You can use that, on very little data, to get very accurate signals and be able to orchestrate interactions with the customer without asking for a lot.
DANIEL NEWMAN: It’s not always about more data. It’s about the right data.
WILSON RAJ: Right.
DANIEL NEWMAN: And I would say, the only ads I’d have is every industry can benefit. Some industries, as our research showed, have much more of a distrust. Don’t let that discourage you from making investments in trust. I think every industry will have outliers that will actually take advantage of something like this to differentiate themselves. I do see the divide getting bigger with digital trust, and companies that embrace transparencies, companies that invest in trust, and make consumers feel like they have some level of control are actually going to step ahead and differentiate themselves significantly.
Onto loyalty, another big topic– Wilson, what can brands do to be more loyal or to create more loyalty from their customers?
WILSON RAJ: I think we said it succinctly in our– one of our episodes that dealt solely with loyalty is don’t just do loyalty programs, be, be a loyalty company. That means infusing points of interaction that are building trust, and loyalty, and affinity even before they become customers at every step of the journey.
And that is through either saving them a lot of attention by outsourcing the thinking for them, by reducing barriers to their journey, or by truly surprising them– giving them those moments where we are shocking them in a good way, and surprising them by giving them contextual relevant interactions. I think that’s a key thing. And don’t make that a program. Make it programmatic around the journey.
DANIEL NEWMAN: Yeah, and definitely make it easy for people to do business with you, and not just the procurement part, not just the swipe the credit card or pay. Think about every step. Think about the fact that every industry has a slightly different journey, but where the customer tends to come on the ramp and where the customer tends to go off the ramp. And how do you A– keep them on the ramp longer, and how do you B– make it easy.
So when they want to learn about the product, when they want to ask questions about the product, when they want to engage with a service, all these different things, how do you make it easy enough, create that visibility, reduce attrition, convert at a greater rate, and then make them want to become advocates? So it’s really about building advocacy. So it’s beyond even loyalty to creating advocates that are going to go out on social, and into their digital realms, and really talk positively about your brand. That’s going to be a big part of loyalty into the future and into 2030.
So here we go, advancing the customer experience into 2030, what recommendations do you have for brands as they drive towards the customer experience of the future?
WILSON RAJ: I think ultimately, it goes back– I think Daniel, as you said, it is about the customer as a human. So our technologies are not supposed to replace the human elements that we are accruing to in terms of their purpose, their passions, their proclivities, in terms of why and how they’re engaging with you as a brand. So I think that technology should make us more human in dealing with customers, not more technical or more technological in dealing with them.
So I think it seems to be often state– a statement that’s very common– be customer-centric. But I think it takes on a different nuance into the future. And again, for us at SAS it’s around that use of data in a very responsible way to create those moments of truth, those touch points that resonate with customers as humans first, and then customers second.
DANIEL NEWMAN: Yeah, start with people. Put the people at the center, the customer at the center. I’d say commit to innovation. What is innovative today won’t be innovative tomorrow, so don’t ever be stagnant and complacent.
Embrace privacy, as I mentioned earlier. I won’t touch on that much, because I already covered it. And we talk a lot about failing fast, and failing forward. And I will continue to beat that drum. It’s not ever about failing, and failing is never the actual intent. But it’s about how quickly can you understand the customer, understand what works and what doesn’t work, leverage innovation, and technology, and data, and analytics to gather and garner that insight, and move on to the things that are working?
Use data as your guide. Incorporate the tools and technologies– AI, machine learning– to help you do it faster. And then, put people to use. Because with all this automation and all this technology, we’re going to have a chance to upscale our workforce, to get more out of every single person that’s part of our organization.
And at the core, those people will always be critical. The best people will always be critical to creating the best companies, no matter how much technology is involved in any experience that is created. And with that, that is the playbook. If you want to see it, we give a checklist at the end of this– detail, 4,000 respondent, 2030 forward-looking research that we did over the last year.
WILSON RAJ: Absolutely, and yes, there are tons of helpful, practical resources.
Well, that’s all the time we have today. Thanks, everyone, for tuning in. If you enjoyed today’s show, head on over to sas.com/experience2030 to get more resources and content.
You just listened to the Reimagine Marketing podcast. Subscribe to our podcast on iTunes, or Google Play, or any of your favorite podcast platforms. And we’ll see you at our next episode. Take care.
Episode 8: Ethical AI Meets Privacy – Avoid the Paparazzi Effect
STEVEN HOFMANS: Hi there, and welcome to the SAS Reimagine Marketing Podcast. My name is Steven Hofmans and I will be your host for today’s session on artificial intelligence and ethics. During this podcast, we want to answer questions like, what is ethical and unethical customer experience? Do we, as consumers, need to act to have better ethical AI, and how do you organize yourself from a company perspective to have ethical customer conversations?
To do this, I have invited two experts in the domain of ethics and AI. The first guest I would like to introduce is Mieke De Ketalaere. Mieke is currently the Program Director AI at IMEC and has specialized in robotics and artificial intelligence during her studies. Over the last 25 years, she has worked for several multinationals, including IBM, Microsoft, SAP, and SAS on all aspects of data and analytics. She’s a frequently asked speaker on the topics of digitalization, demystifying AI, and data privacy, and recently released a new book, Wanted AI Translators.
The second guest is a well-known person in the Belgium retail scene and probably sitting on one of the biggest data mines in Belgium, the shopping behavior of millions of Belgian citizens. Ruben Missinne is the Division Manager of Business Analytics, Intelligence, and Digital Transformation at Colruyt Group.
Colruyt is known and proud to be very active around ethical and sustainable business practices, and Ruben holds a Master’s in history and business administration, helping different teams grow across departments and making an impact on customer experience and society. Welcome to the both of you and thanks for accepting my invitation to this podcast. I’m super excited to have you both here today.
MIEKE DE KETALAERE: Thank you, Steven.
RUBEN MISSINNE: Thank you.
STEVEN HOFMANS: So let’s start with my favorite part of the show, your quote. You both have prepared a quote. And Ruben, I hope you don’t mind the courtesy tells me that ladies should go first so, Mieke–
RUBEN MISSINNE: Absolutely.
STEVEN HOFMANS: –what is your quote, and why did you choose it?
MIEKE DE KETALAERE: So my quote for today was that digital privacy is like celebrity, so we should be able to decide ourselves when to use it when we want something, and then to turn it off when we don’t want something. And I very much refer it to an attitude of a celebrity who decides when he or she wants to be seen in the external world and who gets angry when too much information is being given away for free about her or him, and so that’s just like digital privacy to me.
STEVEN HOFMANS: Yeah. That’s actually very interesting. I like the angle of the celebrity because today, you also have paparazzi, so you don’t always control what is being shared of your private life and what is being shared. So very interesting angle, thanks for that. Ruben, what have you prepared for today?
RUBEN MISSINNE: I also brought a quote. Artificial intelligence has the potential of democratizing big data, but it will be the most trustworthy organization that will prevail, not the most competent. I see today a lot of organizations struggle with building up the craftmanship around AI, but I don’t think, in the long run, that will make the difference. I really believe that it will be the ones who keep the trust with their customers who do this in a nice way, this whole AI thing, looking at data, using data, and giving back to the customers, those are the organizations that will do good in the long run.
STEVEN HOFMANS: Absolutely. So actually, it’s also a callout to not the technique itself, where you have people who are very, very well driven in building models and being experts at that, but it makes me think of Mieke’s book as well, AI Translators Wanted, that the people who are best in translating AI into meaningful value for the consumer that actually, they will prevail. They will win the business. Does that make sense?
MIEKE DE KETALAERE: Yeah, absolutely. And it’s the fact is that it’s more than data technology, it’s the people and processes behind the whole thing all combined together that will make a successful company, increase the adoption rate.
RUBEN MISSINNE: That’s absolutely also how we look at Colruyt Group towards this AI. It will never take over the role of a colleague of us. It will never do something a co-worker is responsible of. It’ll help our coworkers and make sure that they got extra information, they got extra insights on a certain situation and the realities of our customers, but it will never take over the responsibilities that stays with the people within our organization.
STEVEN HOFMANS: To rephrase it there, then, it’s like a smart assistant that is helping you, guiding you, but actually the decision is always taken by a human, a person that actually will then go for the best offer or the best solution at that time?
RUBEN MISSINNE: Absolutely.
STEVEN HOFMANS: Very, very, very interesting. A bit about your backgrounds. Mieke, you have worked for a long time in artificial intelligence. What was your first encounter with artificial intelligence, and what were the challenges back then when it comes to artificial intelligence?
MIEKE DE KETALAERE: Yeah, that’s a very good question. In fact, my first encounter with artificial intelligence was in 1992 during my studies, where I was one of those lazy students that wanted to automate everything in my life. And so when I encountered the fact that artificial intelligence was basically a system that had the ability to learn by itself, to make decisions by itself, I was quite intrigued by the fact you could create systems that would give a forecast without doing many, many calculations yourself.
And so my first encounter was during my master thesis, where I was asked to create a system that was going to forecast the energy consumption of a certain region in Germany. And back then, I already realized that there was a direct link between the computer power that I had, the data that I had to my availability, and the accuracy of the decision it was going to make.
So it’s something that escalated over the last 25 years, that those that had access to bigger systems and bigger data sets actually also won that level of accuracy. And so yeah, that was my first encounter and that was also the limitation that I saw back then.
STEVEN HOFMANS: So the access to data and energy or power will result in, back then, in competitive edge. How did that change today? Is it still the case or did it change these days?
MIEKE DE KETALAERE: Well, it was still the case of the last 20, 25 years, that those that got access to bigger environments to do the many calculations that the AI needs basically also had the opportunity to create models that were more accurate, which meet certain competitions or research tracks, which give them more money for true investors that give them, again, a possibility to increase their investments in data and in systems.
And it became a circle that was going around, and around, and around, because the focus was on accuracy of the systems, not on energy efficiency. And that’s something we’ve seen changing over the last two or three years that we look behind the fact that our system should just be accurate. They should be accurate and they should be energy efficient. So it is something we definitely see changing now the last two, three years.
STEVEN HOFMANS: No, especially with the global warming, I think that’s a very important topic. Thanks, Mieke, for the insight. Ruben, to your background. In 2005, you graduated as a historian with a thesis on the student life in Leiden during the 17th century, which actually is, for me, a very interesting background, looking at the fact that today you had a data analytics and digital transformation, two worlds that seem actually quite distant from each other. What sparked your interest for artificial intelligence?
RUBEN MISSINNE: Well, to be honest, I don’t think that those worlds are so much farther away from each other. If you look at what we are doing as a historian, looking at that information from the past, looking at your sources, and checking them out, making sure they’re reliable, and you’re putting your conclusions down. In fact, what AI does, it’s also all about understanding the context today. I think the world and society has gone a little bit more complex in the last past years, and we’ll head up to do so.
So I think we really need technology. We really need solutions like AI to really understand our environment very well, or our context very well. So it’s also about looking at information, making your conclusions, and bringing in the insights to the decision makers within Colruyt Group or any other organization in that fact. So I think it’s a small step.
And to be very honest, it was not a choice for me to go and do this on AI. It was an opportunity within Colruyt Group, where I had the possibility to bring in some teams to create a new corporate department on information management within Colruyt group, I think already five years ago. And that included, of course, also data science and everything around analytics.
STEVEN HOFMANS: Very impressive. I think maybe for me, as an outsider, it seemed distant, but the way you explain it, you see that you base yourself on all data and then you try to make conclusions. Actually, historians make perfect sense to be drawn to the business analysis and the data world. And it’s maybe a callout to historians to join the AI practice.
RUBEN MISSINNE: Absolutely. I don’t think it’s my fault, but within BA&I, we have several historians working.
STEVEN HOFMANS: It’s interesting. It’s interesting.
RUBEN MISSINNE: Don’t think there’s positive discrimination, but you never know, of course.
STEVEN HOFMANS: There’s a higher likelihood that you get accepted. So if there are any historians on the show, please try Colruyt. I think there is a nice opportunity there.
Taking us further down to the ethics part, because the show is about artificial intelligence and ethics, Mieke, when we think about artificial intelligence and the dangers that come with it, people often think about weaponizing artificial intelligence, which is indeed a known risk. But when we talk about ethics in AI, when it comes to serving citizens and customers, how do you define what is ethical and what is not ethical, and should we be vigilant as citizens for artificial intelligence towards consumers?
MIEKE DE KETALAERE: Well, I think, first of all, ethics by itself is a very broad domain, so you can tackle ethics from different sides. You can tackle it from the fairness that all the major decisions are making. Who is going to define what’s fair and what’s not fair? Is that the person who creates the system? Is that the business who wants to implement the decision, et cetera?
So I’m requesting for that part to have a multi-disciplinary team that looks into it before, so prior to a system gets created, to define altogether what’s going to be a fair decision, if it’s from an HR perspective, or if it’s from a decision that needs to be made on who gets hired and who doesn’t get hired. And we see that fairness has a contextual link to wherever you live in the world or even in the regions, even in Belgium, fairness can be defined in a different way. Let me give you a simple example.
If we would look into a Google search and we would say we look for a CEO, typically in the past, there were only male pictures shown. You can say, OK, well, that’s because the data that was used to locate the training for that system was mainly filled images from male CEOs. So Google had to artificially change that, but then they had a choice to make either they say, well, we make it 30/70 because there’s 30% female CEOs and 70% male CEOs, or you can say no, no, let’s make it 50/50 because in the world, there’s 50% women, 50% men.
So who is going to define what the system should spit out? Is it 30/70, 50/50, or 5/95? So these are very difficult things to tackle and I think every company going into an AI system where you’re going to make a decision on a humans or not on an industrial environment, you have to do this by design, which means at the time you’re going to define the system, you’re going to have to define the fairness part. That’s a difficult one.
But then ethics has much broader field as well. It’s about unconscious bias that might be in your system. So let’s say that if we would dig the CVs from Colruyt, I understand, though, if you have studied history, there might be unconscious bias in the systems to make sure that the historians get the more quicker access to getting a job at Colruyt– and I’m just joking.
RUBEN MISSINNE: Yeah, I was also.
MIEKE DE KETALAERE: That’s how it works. It takes data from the past in order to make predictions towards a future. And so getting out unconscious bias that’s in the systems. As well, it’s not always on gender because people think wait, if we don’t take the gender part, we’re fine, but that’s not what it really is.
For example, even email address can say something about your age. If I have an email address that ends with Google, that might say something about the fact that I’m between 20 and 50 years old, whereas my parents will never have a Google email address. So it’s not that transparent as people think of this. It’s not that easy as just taking out a couple of variables in order to make sure that you have no conscious bias in your system. So these are all points that needs to be tackled, so ethics is a very broad domain.
STEVEN HOFMANS: So I think the first thing I take away from your answer is that by definition, data is almost biased because of the way it’s been generated, right? And what you’re saying is when you are starting to work with data and towards humans and taking decisions, that somehow, there needs to be a human touch in there. And there’s maybe a ethical or moral compass, like the example you gave, saying maybe we should do 50/50 for CEOs, while naturally grown because of society, it has been different in the past.
So does that mean we should have rules or somehow society defining what are moral guidelines to take into account when you are developing artificial intelligence, or how do you see that in practice?
MIEKE DE KETALAERE: But it’s contextually different answers. Something that can be very well accepted here in Belgium might be completely different than India. And there is the question, so if you have your systems developed in India, or in Poland, or overseas, who is going to define that? So this transparency needs to be happening much earlier in the system and that’s not done yet.
RUBEN MISSINNE: And so it’s about being aware, I believe, about the context and then it’s not about rules. It’s what is implied underneath and what is the context that is creating around it. Would we be doing projects with a data science team to look at the usage of data, and which kind of data you should use for specific solution on creating as less bias as possible. And if you’re creating any, then be very aware of it and make sure that it doesn’t steer too much towards a specific solution. Absolutely.
STEVEN HOFMANS: OK. That makes sense. So bias is something very important. When I look at personalization in the cases that have happened, I always had one known story is the Target story. There is a rumor saying that one day, a dad called up the Target store or the Target marketing organization saying he received baby promotions, but actually, nobody’s pregnant in his house. And a couple of days later, it turned out that his daughter was pregnant.
And while you can say it’s inappropriate, the models were very effective in having those kind of promotions. Ruben, from an artificial intelligence manager’s point of view, did you experience any ethical artificial intelligence issues when solving or handling requests from your business partners, and how do you make sure that everything remains ethical at Colruyt?
RUBEN MISSINNE: And I think it’s very important that you know what is the level of craftsmanship and the level of maturity you have as an organization around AI. This is something new. This is something where biases get in. So if you’re not aware of your maturity level, you’re doing things that are on the edge. For Colruyt Group, we’re really experimenting with these opportunities, where we’re doing some nice pilots.
But those are pilots that not– and in the range of creating problems like these, these are mostly the pilots we do, look at optimizing our internal processes, helping our co-workers that they can spend more time and interaction with the customers, for example, and so on. So I really think this is an example that speaks for itself. But if you’re not totally aware of where you are with artificial intelligence in your organization, then it shouldn’t try to do problems like this.
STEVEN HOFMANS: I think very clear what I see is that you actually using experimentation in the first place to see what is possible, and then, first, focus on improving your internal operations, which is actually a way to get to know what the possibilities are for artificial intelligence, and then you move on and once you’re familiar with the topic, you move on to more complex issues. I think that is actually a very nice step for the audience on how to grow your artificial intelligence capabilities, analytical–
RUBEN MISSINNE: And you can already create some impact for your customers. For example, we did a test in one of the shops where, with a camera, we can determine which kind of fruit or vegetable somebody is bringing to the checkout register. By doing this and allowing the AI algorithm to recognize the products, the person who is at the checkout doesn’t know the code by head and giving it into the system, but the algorithm sees this as a tomato or this is a banana, this is whatever.
This gives the co-worker the opportunity to really go into interaction with the customer and create an impact with our customers with somebody who has time to communicate a little bit to you, to be friendly, and so on. What we think at Colruyt Group is very important to go into a good connection our customers, and you create these kind of possibilities by bringing these innovations into that well-known checkout process. So you really can do something with an impact on the customer. We didn’t focus on AI and innovations, but without creating too much trouble, absolutely.
STEVEN HOFMANS: I like that perspective because it’s not only about how do you serve the customer in their shopping journey, but it’s also about how can you put a smile on the customer face by doing small things and making time for him so you can interact for him. So that takes a whole different lens than when you’re just looking at interaction points and trying to improve that customer experience, but you’re really going by using artificial intelligence, freeing up time to get to that customer delight. I really like that lens that you’re taking there.
If we go back to the organization of the society, Mieke, and how consumers can be protected from unethical artificial intelligence, I saw in your book you were talking about oath of Hippocrates. You have notaries and you have, in this case, doctors that need to lay down a note that they will respect the patient and do good. Do we need something similar to protect us from bad artificial intelligence?
MIEKE DE KETALAERE: Yeah, I think the responsibility should be with all people involved in the AI. So, of course, the oath is one that I proposed to bring in to the engineers, but I wouldn’t say that it’s only the engineers that need to take responsibility in order to be complete, but indeed. So engineers get all excited or data scientists get all excited to use technology to do something innovative, but they sometimes lack the complete picture of how it will end in the complex processes we have in our world.
And so that’s where bringing ethics into the courses at University or having to sign an oath to understand the impact they can have with the solutions they’re building, that’s absolutely something important to highlight. However, when we look at the word fate which is always linked to ethics, I explain the fairness in the accountability, but it’s also about bringing in the transparency and explainability.
And so in the oaths, what should also be there is that if you create a system that makes an automated decision, you should have the ability to make sure that as far as you can go with these systems to make them explainable and transparent. So I believe that by creating systems like this, it will increase the adoption ratio and it will also recreate a trust that’s sometimes lacking right now. Citizens or customers or even business sometimes don’t trust the systems because they’re not explainable enough.
And so in this oath, next to the responsibility you take, it should also highlight the fact that, as far as you can go, make sure that you make systems that are transparent and explainable in order to reinstall the trust that’s very hard needed right now.
STEVEN HOFMANS: So next to fairness, transparency is very, very important. Ruben, Colruyt, being a company that really finds doing ethical business practices very important, how do you develop an inner compass to guide you and your teams to giving transparent and fair AI to the different consumers? Is there is a kind of self-assessment they need to do, or how do you organize that to make sure that the values are in there?
RUBEN MISSINNE: I can see that the focus on ethics around AI, but to be clear, this is not something new for Colruyt Group. AI activities are activities such as we have any others within the organization, and everything we do is based on the culture and the values and the identity we have as Colruyt Group. So it’s not because, oh, here comes AI, now we need an ethical framework, no, we have our framework, we have our values such as simplicity, respect, togetherness, readiness to serve, and so on.
And those are stay and will be the guidelines for all our colleagues to handle the activities they approach within Colruyt Group. And of course, this also stands for the data scientists who are building up the models and doing AI, but it’s not something new.
I think it’s very important as an organization that you really make sure that those fundaments are created are into place and you can translate those kind of values towards frameworks on the rules and how to handle things. But it’s important that the framework is shared, and that’s already a very big step, I believe.
STEVEN HOFMANS: So what you’re saying is it needs to be embedded in the culture, in the company culture, and when it’s embedded in the company culture, it’s not because there’s a new kid on the block. And being the combination of ethics and artificial intelligence, that you should panic as an artificial intelligence manager normally. Those things are covered from a corporate culture. It should be in your values and you should translate it to the practices you’re doing. But if you have that covered, probably that should be fine for an organization. Is that correct?
RUBEN MISSINNE: Yeah, I believe so. If you have these strong fundamentals we have, a very cultured organization, and we put a lot of effort in our values and making sure that everybody knows them, everybody follows them. Everybody has the opportunity to really learn what they stand for, and how they can be applied. Absolutely. If that fundament is there, that’s OK.
MIEKE DE KETALAERE: And I really liked that statement, that it should be in culture from right from the start because you see too many companies that now are creating, around the AI, ethical codes and ethical committees, and that’s just a tick in the box. You really feel that it’s just to have something in case they got a question from the press. But like Colruyt and Ruben are doing, it’s absolutely great to be an example for many out there that you just put it into the basic culture of company.
STEVEN HOFMANS: Yeah. Even one interesting thing I saw was a self-assessment of the European institution around trustworthy artificial intelligence and for me, it was I know Europe is busy on it, but they’re also working on framers, and they’re working on those practices, but actually, if you have it governed at the right level in your company, there shouldn’t be any involvement or any further steering from Europe. Is that the way I can understand this as well? That the self assessments of Europe, they’re interesting, but actually, every company should find out themselves what is ideal for their customer, yes or no?
RUBEN MISSINNE: I really think this can help, such an assessment from the EU. It’s like a checkbox. You can bring it over, look at your activities and what you are doing, and making sure that all the things that are out there are also taken into account within the activities you have as an organization. But once again, when the fundament is right, it just a reference check afterwards, then it is something that should be implied.
STEVEN HOFMANS: OK. OK.
MIEKE DE KETALAERE: I think it’s a bit more complex than that. I mean, our AI’s no bigger than medicine. At the moment, you can’t be an AI expert. There’s so many flavors to AI. There’s so many sectors involved in AI. And I think that Europe is doing a fantastic job in making the first steps towards that ethical framework.
However, what I see, and we also analyze that in a questionnaire towards companies, is that the translation on the how to do it. So it gives us a good answer to what needs to be done, but not how to. I think we can meet the next year to translate into how to because whatever you’re going to use, if it’s an image recognition, voice recognition, whatever, there are different technologies behind it to make it transparent.
You can’t expect a company that starts with AI to know all these techniques. So we are currently helping companies through a structured approach and methodology to find the right techniques for the AI solutions they’re implementing, and so that’s where I think we still need to work and collaborate from an engineering point of view together with Europe to put up framework into a workable methodology.
STEVEN HOFMANS: OK. So Mieke, continuing on that point, my last question is, is how should companies then prepare for what’s coming for the future when they didn’t think about we need to still do business in 2030 with the setting we have, what should they prepare for? What is your best tip you can give them to the audience?
MIEKE DE KETALAERE: Well, I think what it is is you see they’re jumping too much still on the hype. We are walking through Disneyland getting inspired by use cases we’ve seen in the press, et cetera, not knowing what’s happening behind the scenes. So I think if there would be basic knowledge at all levels within the company of what AI is and what it’s not, and based on that knowledge, create a multidisciplinary team around it and have the discussions on what they’re going to develop by design.
So that’s ethics by design. That’s security by design. That’s customer experience by design, et cetera. I think if this would be in place, I think the solution that will be out there will be less intrusive and it’ll be less dangerous as what we see right now. So it’s bringing everything back to the design phase on the table and then talking a multidisciplinary approach about it. I think that’s what’s needed.
STEVEN HOFMANS: OK. Interesting. I would like to really thank you for this very interesting discussion. My key takeaways for me are fairness, it was one of the key words that was mentioned a lot in this conversation, transparency towards your customers, and transparency on data, and then multidisciplinary teams that can help set the right boundaries around ethics. I think that’s also very interesting. I would like to thank you again and on this bombshell, I wish you all a pleasant day.
RUBEN MISSINNE: You’re very welcome.
MIEKE DE KETALAERE: Thank you, Steven. Thank you, Ruben.
RUBEN MISSINNE: You as well.
This article first appeared in www.sas.com