Rajesh Jain

Experiences

In Part 13 of the Loyalty 2.0 essay, I discussed various ideas for brands and their customers to exchange value via MuCo. In a sense, MuCo could enable a barter system – not linked to the products and services offered by brands, and delinked from the money being spent by customers. This barter system would help drive many actions that brands want done and power experiences customers want – both of which are not possible today because the entire focus is on driving transactions.

Brands miss out on the upstream (attention and data) and downstream (referrals and reviews). As I had written: “Attention is critical for everything else that follows. In a world of too much information, individuals can be lost; messages find it hard to get through; connections cannot be easily established. To instill loyalty, brands must solve the attention problem. This means building a pipe, a hotline to their customers … After attention comes data. Brands need to understand their customers better. While they can decode actions of individual customers on the website and app, the better approach is to simply ask customers and incentivise their actions (in this case, the data being provided voluntarily) … Revealing ourselves is both an opportunity to earn points and to ensure future communications are targeted for our particular tastes.”

Customers miss out on the softer experiences that could create a richer relationship with the brands. Think of these as the equivalent of “Community Chest” cards in Monopoly! As I had written: “[Mu Tokens could be used for] paying for unique and differentiated experiences on the three axes of access, ease and exclusivity. These are “priceless” in that brands (or influencers) are not “selling them”. For example, a bookstore can provide me early access to a book for some of my Mu tokens. So could the OTT platforms. A new electric car company could offer me a priority test drive. Artistes (creators) could offer priority access to their works in exchange for Mu tokens.”

In an essay on Velvet Rope Marketing (Part 2), I had written about three dimensions for providing differentiated experiences for Best customers – exclusivity, ease and access:

Exclusivity

• Get premium samples free – from wishlist and new launches
• Get a special page designed based on preferences – likes, new season, offers
• Get notifications on topics of interest
• Participate in product co-development
• Cancel tickets or orders without loss

Ease

• Pre-book a slot based on visit patterns, etc; get an assigned concierge
• Get free exchange opportunities
• Pick their own seats in advance (flight, theatre etc.)
• Order service/product before arriving on-premise
• Preferential treatment from customer service; first-in-line always

Access

• Get invited to media events celebrating the brand’s loyal customers, to get first-look at products
• First opportunity to book an order for limited edition apparel
• Offers for orders similar to previous purchases
• An earlier opportunity to buy tickets for upcoming events

Similar ideas could be used to power Loyalty 2.0 experiences which can only be unlocked by Mu tokens, thus demonstrating the value and utility of Mu tokens. Ideally, these should be costless for a brand and priceless for a customer.

Loyalty 2.0

We are all members of various loyalty programs. We earn points proportionate to the spend we do with brands. Airlines, credit cards, hotels, restaurants, bookstores, high street fashion, ecommerce sites – many of them give us points linked to our transactions. This is what I call Loyalty 1.0.

Then there is Loyalty 2.0, a new idea I proposed in a recent essay. It is about rewarding our non-monetary assets in our engagement with brands: attention and data to begin with, and extending to our network (referrals) and voice (reviews). The common theme across these is time. The more time we spend with the brand, the greater the likelihood of present and future purchases. As I wrote:

Loyalty 1.0 programs are all around us; Loyalty 2.0 platform has yet to be created. To begin with, there is almost no overlap between the two types of programs. While the sole focus of Loyalty 1.0 is to drive and reward transactions, Loyalty 2.0 focuses on the upstream: attention, whether it is in push messages or later on the brand’s digital or physical properties.

Loyalty 1.0 aims for retention and repeat purchases in commoditised markets. It aims to influence behaviour with the prospect of a future reward. Loyalty 2.0 solves the problems of attention recession and customer data poverty, both of which are the priors in the customer journey. If a customer is not listening to a brand, it is hard to get them to the brand’s property for a transaction. In the pre-digital world, when it was not easy to know each individual customer, the only possibility of a loyalty program was based on transactions. The digital world has opened by the prospect of nurturing customer relationships via targeted messages, nudges and personalised recommendations.

… Loyalty 1.0 was built for the offline world; Loyalty 2.0 is made for the digital-first world. Loyalty 2.0 builds on the work done through the decades in loyalty. It moves loyalty higher in the funnel and earlier in the journey; attention retention is the first step in the customer relationship. Without attention, there is no retention; brands face churn and continuous high spending on acquisition and reacquisition which erodes profitability.

… Loyalty 2.0 is run by rules, not rulers. This is where the intersection with Web3 comes in. A DAO (decentralised autonomous organisation) is the right home for a pan-brand Loyalty 2.0 program.

… The economic opportunity is huge: $200 billion is being wasted annually in spending on the adtech platforms on reacquisition and wrong acquisition. This is money which should be split between customers and brands. To disintermediate Big Tech’s centralised monopolies needs the disruptive innovations of Web3: a decentralised blockchain-based DAO-managed Loyalty 2.0 platform.

In that essay, I went on to describe an entity called MuDAO, a pan-brand blockchain-based decentralised platform for earning and redeeming loyalty tokens not necessarily linked to spending. In this essay, I will dig deeper into the MuDAO entity – I call it MuCo in this series because it could have some parts which exist in the Web 2.0 world also.

In the context of MuCo, the one question that has come up in multiple conversations is: how will we demonstrate the utility and value of Mu tokens? Why will brands want to give them? Why will consumers want them? This is what I will dig deeper into in this series because only if it’s an exchange that both sides want will we be able to build a profitable business.

Short Takes

As I was writing this series, there were many ideas which came up but were not fully baked for me to write a longer note on each of them. These are possible threads for future thinking and discussion. So, here goes.

Many years ago, we needed to physically go to stores. The Internet brought these stores to us. Today, we go to the brand properties. New channels (Email 2.0, WhatsApp) are bringing these properties to us.

We have discussed the hotline in the context of a relationship between brands and customers. What about relationships between customers of a brand or product? I would love to connect with those who have read “The Crux” – could the book publisher or author enable that via their hotline to me?

Marketers spend a lot of time discussing funnels and journeys, but not enough on hotlines. This needs to change.

How can brands use the first connect (a visit to the website, an app download) to build the hotline? Many times, they miss the opportunity to get any of my credentials to enable a follow-up relationship.

What is the cost of not having a hotline? Existing customers, expensively acquired, churn or go dormant. And that leads to the doom loop of ad spending, cutting into profits.

How can hotlines be differentiated based on the lifetime value of customers? How can hotlines with Best customers provide exclusivity, ease and access? How can this be connected with the theme of extreme retention that I recently wrote about?

Look at hotlines around us. Friends and (some) family members have a hotline to each other. Pilots have a hotline to air traffic controllers. A manager has a hotline to the direct reports. Which brands would we as customers want hotlines with in our life? What would be our expectations from the hotline?

Recently, my 3-month old Samsung A52 stopped working. It just went dark. I took it to Croma where I had purchased it from. They said I could leave it with them and they would send it to the Samsung service centre the next day – or I could take it to that service centre myself, thus saving a day. I opted for the latter. It took 24 hours to get my phone back – apparently something had happened to put it into a “deep sleep” mode and there was nothing wrong with the phone. If Samsung had a hotline with me, could they have apologised for the inconvenience caused to me – knowing how many Samsung products (Smart TVs, other phones) I use? So far, not a word from Samsung even though I know they have my email address.

What would hotlines look like in a Web3 world?

How can brands measure the efficacy of the hotline? Perhaps, the Hooked Score can help.

Can the hotline with its 2-way interactivity and gamification increase interest in millennials and GenZ in email?

Could we see interactive ads in emails?

How would the hotline idea apply to B2B companies?

Can political parties and governments build hotlines with their voters and citizens, respectively?

So, to end, there are many questions and comments to ponder in our hotline future!

Getting Started

How can a brand get started on the hotline (and bottom line) journey? Here are the first three steps in building hotlines with customers:

1. AMP: Make every email AMP. Make AMP a mindset and think “Living Email” – how each email can become not just a broadcast or a blast, but interesting and interactive. The good thing about this is that if the mail client does not support AMP, it will simply show the alternative HTML email. So, there is no downside.
2. Atomic Rewards: Create a time-based rewards program that incentivizes the non-monetary assets customers have: attention, data, network and voice. Gamification must become central to all communications; it is the best way to nudge behaviour and create habits.
3. Progency: Instead of burdening internal teams with yet another thing to do, work with an external partner who brings in right- and left-brain skills to deliver “Performance Email” which creates a win-win partnership.

Once the Email 2.0 program has delivered on its hotline promise, brands can start expanding the Atomic Rewards to other channels. The Micronbox is an idea which will come – it needs a WhatsApp-like entrepreneur to challenge the status quo of the existing inbox providers.

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A few weeks ago, I wrote in my essay on profit-centric marketing: “The path to exponential forever profitable growth comes down to something as basic as solving the problems of attention and data. In a world of digital and direct relationships, these are the two things that matter most. If a brand’s customers are not listening and if a brand does not have adequate data, it becomes hard to build a hotline to customers. Without the hotline, it becomes difficult to bring customers back to the properties for transactions … Email is not what it once was – 1-way broadcast and semi-spam. Email is now ready in its new avatar: Email 2.0. This email can be interactive, informative, gamified, fun and exciting. It is email like customers and marketers have not seen or imagined. Email 2.0 is a way to convert the delete mindset into delight. It can become a powerful channel for getting customers to volunteer data about themselves. For this, Email 2.0 needs to be combined with Loyalty 2.0. Tokens for attention and data with a new spam-free inbox which delivers surprises and rewards can bring brands and customers closer in a win-win relationship.”

If brands can build their hotlines right, especially with their Best customers, they will find that they no longer need to keep spending big bucks on wasteful and cash-guzzling new customer acquisition. That money freed up can power better relationships with existing customers – and help with the bottom line. Profits don’t come from newly acquired customers; they come from existing customers coming back for more and bringing along their friends. In a world where capital is no longer free and investors are demanding clear paths of (growing) profitably, the hotline can become the marketer’s best friend in delivering customer delight – it not only bridges the chasm between acquisition and retention but is also the crux of the profitable growth challenge CEOs and CMOs must solve for.

Brands in My Life

Here is a thought exercise with the brands that I engage with. How could they build hotlines to me and how could I engage with them?

Let’s start with the media brands. Most of them send out email newsletters. The goal is to bring us to their website or app so our attention can be monetised with ads. In recent years, they have also started subscriptions but the ads continue to remain a dominant revenue stream. The newsletters today offer a list of headlines to click on. The only change in the past decade or so is some degree of personalisation based on either what I have been reading or the preferences I set when I created my account. Three changes could make the newsletters come alive: a “top headlines” section which fetches the main stories dynamically when I open the email rather than being constructed when the newsletter was created, a “search” box within the email, and a “comments” box which lets me give feedback right inside the email. In fact, some new and interesting comments could even be surfaced with the story headline when I open the email.

The OTT brands could allow me to do a 1-click add right inside the email, and perhaps even edit my watchlist. In fact, some Indian OTT brands don’t even send emails – preferring push notifications. I think that’s a mistake because many of their subscribers may have switched off notifications in which case the brand has no communication channel.

Some brands like Raymond or ASIC where the purchase cycles are less frequent will need to figure out ways to make the hotline alive during the non-engagement zone. They could send out “Ems” (short informative emails which can be consumed in 15 seconds or so) with tips on their category. Or ask customers to share photographs with their products in return for rewards. The goal is to be top-of-mind when the time for the next purchase comes.

Hypercasual games would be fun to add as part of the hotlines to drive engagement. So, instead of me going to the Wordle page daily, could the Wordle play be done inside of the email? Could I create my own Wordle and share it with friends in groups to see who can guess it first?

Book publishers could also set up a hotline with me after I purchase a book. (They have no idea today – having always relied on intermediaries for sales.) They could send suggestions on new books, online events with the author, latest tweets by the author. I could send back some of my favourite passages from the book – in return for rewards or an opportunity to participate in an exclusive interaction with the author.

eGrocery marketplaces could make ordering trivially simple with the use of the hotline – almost as easy as me calling up the kirana store owner. Some of it is just the use of AMP within an email, but the comfort of having a 2-way relationship where someone is actually listening on the other side can be comforting.

On a personal note, as a WordPress blogger, I could add a comments “AMPlet” inside of the email that goes out to all who have subscribed to my updates. This is much better than having to go to my blog and login to control the spam.

These are just some starting ideas. It is up to each brand to creatively think of the possibilities. Listening to customers and readers is a great way to get feedback, engage and co-create new products. The Email 2.0 and omnichannel hotline is an important leap forward to bring that future to life.