During last month’s NRF Big Show, executives from Puma and Mention Me took to the SAP Theatre stage to discuss marketing strategies in this post-pandemic period. The session, titled, “How Smart Brands Future-Proof Growth through Customer Advocacy,” featured David Witts, senior manager, CRM, Puma, and Darren Loveday, vice president, business development and solutions consulting, Mention Me.
Here, Witts, Loveday, and Robin Barrett Wilson, industry executive adviser, fashion, SAP, discuss the evolving role of data and segmentation in marketing as well as customer acquisition, retention, and the growing importance of advocacy.
WWD: How has the marketing funnel changed? Is it more about acquisition and retention? Or referral?
David Witts: The focus is increasingly on retaining existing customers. It’s getting more expensive to acquire new customers. The third-party, cookie-less world that is coming is going to make it even more challenging. Retaining existing customers, building a relationship with them, building higher customer lifetime values, and focusing on that is where we are going. I think the whole industry is moving in that direction.
Darren Loveday: It’s no longer just about getting customers through the door. It’s about acquiring high-quality customers and nurturing them through the funnel to become loyal brand advocates who drive organic growth. That requires knowing who these customers are and then using AI to find more like them across your marketing channels.
That’s the fundamental solution to sustainably growing a business. We see every customer as on a journey through the advocacy life cycle. There are several stages of the advocacy journey, with no right or wrong as to how quickly a customer moves through it. If I buy a product that arrives on time and does what it says it does, then there’s nothing stopping me from leaving a positive review, telling my friends about it and progressing through that journey.
Robin Barret Wilson: Customer acquisition is something that publicly traded companies talk about often. When you acquire a new customer, your revenue increases — a very positive result. However, COVID-19 has put a strain on brand loyalty. This notion of being able to advocate for a brand that you love is brilliant. We all remember during COVID-19, when our favorite brand was out of stock, we bought the next brand. Customers then switched loyalty to the new brand, which meant lots of attrition.
This type of consumer behavior brought loyalty top of mind for brands and refined how they interact with their consumers. Consumers don’t want three or four emails in their inboxes daily. They want a personalized experience. They are shopping holistically; they are online and going to the stores because they want to interact with somebody and want a personalized experience.
The ability to advocate for a brand lends to further brand loyalty and the ability for the loyalty to go viral. This type of approach to the marketplace is robust across all the fashion customers that we talk to, and the ability to promote loyalty and really grow that lifetime value is important.
D.W.: I think we can’t underestimate the importance of acquiring new customers, but when they become customers, we need to then build a dialogue with them. When they give us an opt-in, we need to respect it. We need to understand that the customer is not going to stay with us and stay subscribed to our marketing communications if we’re sending them stuff that they’re not interested in.
The key thing for us is that every communication is talking to the right customer about the right product, at the right time, through the right channel — ultimately getting to that one-on-one, hyper-personalized, relevant communications.
That’s what we’re trying to do through many of the tools that Emarsys and SAP provide. The first-party data we’re getting helps us really understand what customers are interested in buying, so we need to make sure that we are sending them messages that are completely relevant and targeted to them. That’s building segments to target our messages, and within those messages being really personalized, using one-to-one product recommendations features.
We want to get to the point where every communication we send is individual to that customer. That’s our goal, and that’s what we’re trying to get to, and that’s what Emarsys and SAP are helping us to do.
D.L.: We all have stories as consumers about where brands have treated us well and where brands have treated us not so well. Even if a brand makes a mistake but then is quick to rectify it, that can give us as much of a good feeling and build customer love as if they did everything perfectly every time. There’s more than one way to earn brand loyalty and the kind of brand affinity that motivates customers to introduce their friends.
By feeding first-party advocacy data into SAP Commerce Cloud, Emarsys and Customer Data Platform (CDP), Mention Me equips brands like Puma to see the extended customer revenue of each customer — their own value plus the value of those they refer — and speak to them accordingly.
For example, if a customer has just referred someone, you might want to hold off on sending them a more generic campaign email. David has previously spoken about how that’s changed Puma’s contact strategy: If a customer hasn’t bought for a while but is referring friends, they’re no longer put into their lapsed segment.
Mention Me’s partnership with SAP is helping brands recognize and thank those loyal customers actively recommending them to others while serving them better experiences that keep them coming back with their friends.
WWD: What was the impetus behind the partnership between your three companies?
D.W.: Initially, we were looking for martech vendors who could help us with our overall CRM strategy. We had two major goals, which were to grow the customer lifetime value of our existing customer base, build those brand advocates and those loyal customers, increase the size of our contactable database and increase the number of people that we could talk to. Mention Me fits perfectly with both our goals. With referral, it helped encourage that customer back to make the second, third and fourth purchase, and it brought new customers in who we knew would be strong brand advocates because they’d been recommended by a friend. That kind of advocacy is such a great acquisition tool. That was the initial entry point.
What it’s grown into is beyond that. We are now using the data we’re getting from Mention Me to really change the way we perceive who our loyal customers are and do some interesting things with our segmentation, with the communications that we’re sending off the back of the data that we’re getting from the Mention Me platform. If we see someone who otherwise is showing very little propensity to buy from us is completely switched off, we might change how we talk to that customer and pull back.
We don’t want to harass them if they’re not showing any interest, but if we see they’re referring their friends, who are then coming in to buy, then they are still interested in the brand. They might not be buying now, but they’re still interested in what we have to say. That changes how we talk to that customer, what we send them, and the general view of how loyal as a customer we see them. The partnership is really helping us grow our whole segmentation model and our whole loyalty proposition.
WWD: Do you think brands and retailers are using data in the right way?
R.B.W.: This notion of omnichannel and one-to-one marketing has been around for a long time. This is not easy. It’s a really hard thing to do. As David just alluded to, customers go in and out of segments over various times within their shopping interactions with a brand. This idea that you are talking to your customers at the right time is an art and science.
The success Puma has had with Mention Me and Emarsys, increase in revenue, the increase in open rates, etc., are indicative of somebody who is getting closer to growing lifetime value and making repeat purchases. The more data you can capture from a customer, such as data from Mention Me or a survey or in-store, enables a company to identify other attributes that might be helpful and deliver an ROI.
Lots of customers are still struggling with trying to bring all this data together in all these different parts of their business. That’s something that needs to happen from the top down, bottom up. Executives need to really push for it. But if it’s done right, you can see very quick results, as David has at Puma and some great successes. Then again, it’s a rinse and repeat so it never ends. There’s always something new that you might want to focus on and you might learn from your customer as they tend to go through their life cycle with you.
WWD: Any closing thoughts?
D.L.: Marketing is constantly in a state of disruption, with channels and techniques trying to keep up with changing customer behavior. Amid that ongoing transformation is one constant and a brand’s best tool: their customer base.
The more that a brand can identify and then, like David is doing at Puma, nurture and deliver experiences for customers based on their stage of advocacy, the more sustainably they’ll drive organic growth. I don’t see that changing over the next 10, 15 or 20 years.
D.W.: I’d agree with that. The key thing is not easy to do, but you need to show the customer that you know them. You need to prove that to them and talk to them like a person and have more than just a transactional relationship with them. If you can get that right, then the opportunities are there, but it’s not easy. We’re still working on it, and I know everyone is, but if you’ve got the data, you can make it happen.
R.B.W.: For me, it all starts with a really great product, which, obviously, Puma has. Then it’s staying true to your message. Technology’s going to continue to change. We certainly weren’t thinking about talking to Alexa 10 years ago, and so the technology’s going to continue to evolve. But as Darren said, you’ve got to remember who your customers are and ensure you’re delivering a product that your customers are looking for and that you’re speaking to them in their language, so they want to respond and they want to purchase.