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Unknown Speaker A
Your brand may be staying on top of current trends, but are you agile enough to stay relevant, resilient and successful as customers, competition and the world continues to change at a breakneck pace? I'm thrilled to share the newly revised version of my first book, the Agile Brand. I'm calling it the Agile Brand Revisited. It's been updated to reflect our continually changing world and it provides seven principles that form the backbone of an agile brand, offering detailed insights and actionable steps for incorporating them into your business strategy. This is the book that started it all and I'm excited to share it with you. It's now available in print and digital formats and available everywhere. Learn more by going to the Agile Brand guide website at www.agilebrandguide.com.
Greg Kilstrom
The Agile Brand.
Unknown Speaker C
Welcome to season seven of the Agile Brand where we discuss the trend, trends and topics marketing leaders need to know. Stay curious, stay agile and join the top enterprise brands and Martech platforms as we explore marketing technology, AI, e commerce, and whatever's next for the Omnichannel customer experience. Together we'll discover what it takes to create an agile brand built for today and tomorrow and built for customers, employees and continued business growth. I'm your host Greg Kilstrom, advising Fortune 1000 brands on martech, AI and marketing operations. The Agile Brand Podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information, go to teksystems.com to make sure you always get the latest episodes, please hit subscribe on the app you listen to podcasts on and leave us a rating so others can find us as well. And now onto the show.
Greg Kilstrom
If brand loyalty is so critical, why does it feel like most companies are treating it like an afterthought by propping it up with outdated programs, programs and hoping customers won't notice? Agility often requires a complete rethinking of how we approach customer loyalty not as an afterthought at the end of the funnel, but as a core driver of long term brand value and experience strategy. Today we're going to talk about what brands need to do to keep up in a time when consumers have more choices, higher expectations, and less patience.
Unknown Speaker C
Tell me Discuss this topic I'd like.
Greg Kilstrom
To welcome Raj De Dada, CEO and co Founder of bloomreach. Raj, welcome to the show.
Raj De Dada
Greg, it's great to be here with you.
Greg Kilstrom
Yeah, looking forward to talking about this with you. Before we dive in though, why don't we start with you giving a little background on yourself and your Role at bloomreach.
Raj De Dada
Yeah, absolutely. I'm a multi time kind of Silicon Valley entrepreneur and so I've been at this using tech to drive innovation a few times over. My current business, Bloom Reach is very relevant to what, what you were just teeing up there around loyalty and brands because it's very much about using AI and data to personalize customer facing experiences. I'm CEO and co founder of Bloom Reefs. I started the company now 15 plus years ago and excited for the impact it's having on our ecosystem.
Greg Kilstrom
Yeah, yeah, I love it. Well, yeah, let's, let's dive in here and you know, as I, as I teed up at the, at the beginning of the show talking about redefining loyalty for today's customer, BloomReach recently released a report called the Winning Playbook for the New Era of Customer Loyalty. We'll have a link to that in the, in the show notes as well. From that report it's clear that customer loyalty has fundamentally changed. You call it a new era. What are some of the biggest shifts that you're seeing and how loyalty is formed or lost today?
Raj De Dada
Yeah, I think loyalty is at its lowest point that it's ever been in many ways. And you know, I think the data shows that almost 50% of consumers will switch to a different brand if they can find a lower cost for that product. And so cost sensitivity is the very definition of, of, of where the brand itself beyond its cost is matter less and less. And what we're seeing is that, you know, a lot of the root causes of that decline in loyalty are, you know, one that there's as much choice as ever, ever and, and maybe more. The digital friction online is lower than it ever was before. So the number of places I can go and click around to go find something are pretty high. You have, you know, the strength of a set of aggregators, people like, like the Walmarts and the Amazons of the world that, that carry lots of products and of course people ultimately become loyal to those retailers rather than the underlying brands themselves. And then I think the one that very much is in the control of brands which is that what consumers seem to care about more than ever before is the quality of the customer experience that they have with those brands. And I think we just simply haven't seen that customer experience improve or get a lot better while the number of choices has increased.
Greg Kilstrom
Yeah, yeah, well, and to that, to one of the points you were making, it's, I think a lot of focus has been made on ease of almost ease of Signing up and unsubscribe. You know, everybody's moving to subscriber models. And yet, you know, the key part of that is making a great experience so they stay right. So it's like they got one part right and making it, you know, reducing friction. But, you know, not, not so much, not so much on the other part. I think also it's, you know, how loyalty is measured. Right. So, you know, a lot of brands are still treating loyalty as a lagging indic cater rather than designing it upfront in the customer journey. Why would you say that?
Raj De Dada
So, you know, I think there's a little bit of a hangover from, you know, the way the web grew up. E commerce grew up in the first kind of 20 years of its existence. So, you know, if you look at that period of time, it was characterized by cheap customer acquisition costs. And so the fastest way to grow was place an ad on Google, place an ad on Facebook, you know, acquire more customers. And so you could see budgets move dramatically in the direction of customer acquisition. And, you know, what you haven't seen is the same kind of dollars and investing going into creating loyalty, creating upsell, creating lifetime value, all the things that, that cause people to stay on after they've made the first purchase. But, you know, that's changing and it has to change because the economics are changing and the cost of that customer acquisition is now incredibly high. The profit expectations are higher with cost of capital going up. And so there's really an impetus for, for businesses to rethink that.
Greg Kilstrom
Yeah. Yeah. I mean, do you think that the. There was so much focus on acquisition because it was easier to do? I mean, it's easier to track a click than it is to track customer lifetime value. Like it's, it's. And is some of that changing because it's getting easier to track lifetime value?
Raj De Dada
I think that you're absolutely right that like the fastest path and easiest path to growth was always just let me ship my advertising budget.
Greg Kilstrom
Yeah.
Raj De Dada
Put it against these systems that I'm going to grow because I'm going to acquire more customers, are going to buy more stuff. And that those days being behind us now we have to do the hard work of actually creating the kind of quality experiences that nurture lifetime value. I do think there's a lot of tools that help. And you, you were mentioning kind of reporting tools that can track lifetime value. And I think that's for sure true. You mentioned subscription business models that engineers that loyalty directly into the business model, which then, you know, isn't is a motivator to keep that healthy. And then there's, you know, with AI and data, which I'm sure we'll get to a lot of this, there's now an opportunity to auto optimize in a way that doesn't require the level of human intervention and capital that it once did.
Greg Kilstrom
Yeah, yeah. And that's a great segue because I do want to get to the component of AI here and AI is loyalty infrastructure. So you make a compelling case for what you call consequential AI. AI that fundamentally changes outcomes, not just automation. Can you talk a little bit more about how do you think about consequential AI and what does that mean in terms of customer loyalty?
Raj De Dada
Well, we talk about consequential AI because frankly there's just so much noise around AI that it's really hard for marketers, for chief digital officers, for others to determine what to spend time on. And our perspective is if it doesn't move the needle by double digits on growth, if it can't 2x improve the quality or the costs as an input, or if it isn't profoundly impactful to your customer experience and differentiation, don't spend time on it. And if it meets those, any one of those criteria, it's consequential. And that's, that's sort of the way, way we think about it and very much there are a set of consequential AI opportunities available to marketers and to, to businesses in a way that that wasn't before.
Unknown Speaker C
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Unknown Speaker A
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Greg Kilstrom
I used to joke that we had to talk about AI at least once on the show and now I don't even joke about it because it's, it's, you know, I, I, I'm not the first person to say this either but like I always say, like I don't think we're even going to call it AI in five years. You know, it's just going to be like air, but we'll still call it AI at least for, for the time being. You know, to your point about the noise, like there's lots of, you know, I think as there's a lot of hyped technologies and things like that, I think I, some of it is, is well justified, some of it is, is purely hype. A lot of what's talked about is the efficiency gains and, and things like that. How do you think that marketers and, and CX leaders should think about balancing, you know, automation and hey, let's automate everything that we possibly can versus human insight and you know, when we're talking about customer loyalty and customer experiences.
Raj De Dada
Yeah. I think we see three, you know, kind of impacts of AI as it relates to marketing and digital. The first is the most obvious and with the era of marketing agents we are increasingly seeing, and we see it with BloomReach with our autonomous marketing agents, that these things have the ability to complete a set of tasks that until now have required human beings. That includes things like assembling content for emails or figuring out exactly which audience to target a campaign or you know, generating reports for my boss on what's working and what's not working. So there's some fairly straightforward marketing use cases that agents are going to take on. The second is really moving the needle on outcomes. And, and the way we move the needle on outcomes is we harness the power of sort of the best marketers. Imagine if every business could, could employ the Smartest and best marketers that understood the industry that could drive value. Now that wisdom exists in the AI to make that possible. And the third is, is the one that's actually least talked about, I think, which is the profound change in the way consumers are going to interact. And so if, if I am a B2C brand and I target consumers, obviously I, I built, I've, I've built my career targeting them on Google, targeting them on, on Instagram and wherever else. Now you have AI out there, you have ChatGPT. That's a change. But also importantly, we're seeing increasingly a very large percentage of consumers expect conversational and chat like experiences, almost digital sales associate type experiences on the websites of the brands they shop at. So the consumers are changing how they interact, which means marketing to them looks different too.
Greg Kilstrom
Yeah, yeah, yeah. And to your point, I, I think they're, their consumers are very quickly adapting, just like marketers have pretty quickly adapted to using AI in their workflows. I think the, the, the customer expectations are, they're, they're not decreasing, that's for sure, but they're changing to, you know, to be more, more open to, to AI and things like that. Right, exactly. Yeah, yeah. And so, you know, another theme in the report is that personalization has all but replaced perks as the driver of true, true loyalty. So, you know, personalization versus points, you know, what's your view on the role of tailored experiences versus traditional loyalty programs?
Raj De Dada
Well, you know, I think, I think firstly, yes, you know, personalization is a table stakes expectation. I think, you know, what everybody's experience with Amazon, with Netflix, you know, means that they expect that quality of personalization from every brand. They, they, they're out there. You expect that your rental car company knows your preferences. You expect that, that if you're a cook and you know, you buy a lot of cookware from a store, that they know what you're into. So this, this expectation is what drives loyalty and it manifests in products and, and the selection of products, it manifests in services. It means that that sur la table and the cooking class it offers me should be different than what it offers you. So that expectation of personalization we think is very real. Now it's not at odds with traditional loyalty programs. I think what we fully expect is that traditional loyalty programs that have been points based will themselves become richer and themselves become personalized. So it becomes an arrow in the quiver to offer incentives and perks. But it is not the only arrow in the quiver.
Greg Kilstrom
Right. And it's, which Perks and which incentives. Right. You know, as opposed to a, a blanket cover like the, the cooking class. I don't know if they teach making toast or peanut butter and jelly, but that would be a good one for me, probably. But. But yeah, I mean, I think, I think this idea of, you know, personalized as opposed to just everybody gets the same thing. Right. Regardless of that's. Is that kind of where personalization is leading, is personalized perks. It's not that they're going away more, it's just that, yeah, they're. They're tailored. Right?
Raj De Dada
You're tailored. And they're tailored not just in what the offer is, but even when the offer is made.
Greg Kilstrom
Yeah.
Raj De Dada
As an example, you know, we have a partner that can detect as you're shopping online, whether you're a price sensitive shopper or a BRI brand sensitive shopper or you have an affinity to this product or that product. Well, ideally they'd be using that data to then determine what to pop up based on your intent.
Greg Kilstrom
Yeah, yeah, got it. So last topic I want to talk about is, you know, in addition to rising customer expectations and kind of this shift in loyalty is just what we all are talking about quite often is the omnichannel customer experience. Right. So, you know, what, channel switching or just, you know, the, the currently fragmented way that a lot of customers end up experiencing brands. So, you know, and the report certainly underscores this as well as, you know, one of the biggest pain points in loyalty is fragmentation. You know, online versus offline, email versus social, whatever the case may be. Can you give some examples of, you know, where have you seen brands truly getting omnichannel loyalty? Right.
Raj De Dada
Yeah, I mean, I think, I think the, the best Omnichannel, you know, kind of experiences are ones where I don't think of the brand as associated with really any channel.
Greg Kilstrom
Yeah, it's.
Raj De Dada
I, I think of the brand for its uber presence in my life. And so as an example, you know, we, we at Bloom Rage serve a lot of, you know, some of the, some of the best outerwear companies that are out there. And a good example of that is, is Patagonia, which, which represents a set of brand values that go much beyond the store. And so, you know, whether you walk into the Patagonia store or whether you buy a Patagonia jacket or sweater offline or online, or whether you receive communications from them in a wide set of channels, it's going to be true to the essence of who the brand is, which is the very definition of omni. Channel, the brand cuts through each of the different ways by which consumers interact with them and represents itself beautifully.
Greg Kilstrom
Yeah. So for those brands that aren't the.
Unknown Speaker C
Patagonians of the world that are, that.
Greg Kilstrom
Are struggling with this, you know, what, what should they be doing differently to avoid, you know, disjointed and, or even generic experiences that, that, you know, compromise, trust, loyalty, all those things.
Raj De Dada
Actually, fortunately, I think for most brands, there's really an opportunity to leapfrog. And that is a lot of what we do at Bloomreach is we work with brands and we say, hey, you've had this vision of personalization for a long time, but it's been really hard. You have to go buy a lot of systems, you have to get your data right. You have to, you have to have a lot of human capital to manually do a lot of stuff. Well, now there's an opportunity for you to first understand your customer. And that's always step one. Do you understand your customer and how they're interacting with you? And then do you put in place the kind of tools and systems that visualize that for marketers to act on, targeting those customers across a wide range of touch points in a really easy way? And if you can do that and leverage AI to help you do that, then I think you have the best chance of leapfrogging because you don't have to go and say, how do I optimize my email system, how do I optimize my Facebook spend or whatever it might be. You take a holistic view that starts with the customer and goes out to every touch point.
Greg Kilstrom
Yeah, yeah. And along those lines, I mean, you mentioned the, you know, the conversational AI aspect of this. And you know, I think to that Omni Channel, add that Omni Channel lens to it. It's not just a conversation with an AI, it's a conversation with the person in the store too. You know, it's like when you go, whether you're online offline, you're having like, is that, is that kind of the future is just this continuous like two way dialogue?
Raj De Dada
Exactly. I mean, and for that to be the case, the retailer or the brand, you know, the person in the store has to have access to the same data as the system online.
Greg Kilstrom
Right.
Raj De Dada
And that's why the bottleneck is very much, do you have a view of the customer across all the touch points? And then can an app help make a decision so that when you walk into a store, the store associate can understand who you are and have an interaction with, but when you're online. The digital sales associate has that same context.
Greg Kilstrom
Yeah, yeah. And so from a, from a leadership perspective, I mean there's, there's definitely, there's tools like, like Bloom Reach that, that make that easy. From a technology standpoint, what does that look like from a, like how can leaders support that? Because there's silos and organizational silos, there's data silos, there's all kinds of silos and large orgs. Like what can a leader do to facilitate that, to make it more seamless?
Raj De Dada
Yeah, I think, I think the first thing, the biggest thing a leader can do is set up the right incentive structure. You know, and so if you're, if your incentive structure is broken down by individual channels and you have an email team and you have a web team and you have a store team and you have a something else team and a data team, it gets really hard because they'll optimize for KPIs in each of those.
Greg Kilstrom
Right.
Raj De Dada
If it starts more with the customer and you say, hey, the goal here is to increase lifetime value per customer from X to Y. And you have a cross functional group of team members that have marketing skills, creative skills, analytical skills, some technical skills, and their job is simply to move the needle on that. All of a sudden the incentive structure totally changes to try to achieve, you know, longer term loyalty.
Greg Kilstrom
Yeah, yeah, I love that because I mean it also, it aligns the, the teams towards the same thing. Right. And it's, yeah, it's, it's a, as a. And I've, you know, I've worked, I've worked with some of those companies where it's like the email team was, they were beholden to their numbers. And I mean it's, it doesn't mean that you're still not trying to get your channel or channels to perform. But I like what you're saying and that, you know, if everybody's kind of working to that same goal, it should be the customer. Right. And customer success and then everybody kind of everybody wins. Right?
Raj De Dada
Yeah.
Greg Kilstrom
Great. Well, Raj, thanks so much for joining today. One last question for you before we wrap up. Like to ask this to everybody. What do you do to stay agile in your role and how do you find a way to do it consistently?
Raj De Dada
Yeah, I try to take a day zero approach to everything, which is if I were starting Bloom Reach all over again, which is ultimately my job, what would I be doing today, what would I be doing tomorrow? What would I be doing next, next week? And that way I don't, I'm not burdened by the decisions we have made in the past and the choices we have made. And I take a first principles approach to every day and every problem.
Greg Kilstrom
Yeah, I love that. That's great. Well again, I'd like to thank Raj Dadatta, CEO and Co Founder of bloomreach for joining the show. You can learn more about Raj and bloomreach and get a copy of the winning playbook for the new era of customer loyalty from bloomreach by following the links in the show Notes.
Unknown Speaker C
Thanks again for listening to the Agile Brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show as well.
Greg Kilstrom
You can access more episodes of the.
Unknown Speaker C
Show@Theagilebrand.Com that's theagile brand.com and contact me. If you're interested in consulting or advisory services or are looking for a speaker for your next event, go to www.greg kilstrom.com that's G R E G K I H L S t r o m.com the Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co. Op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay curious and stay agile.
Greg Kilstrom
The Agile Brand.
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Podcast Summary: Episode #682 - Consequential AI and Customer Loyalty with Raj De Datta, CEO of Bloomreach
Released on May 28, 2025
Introduction
In Episode #682 of The Agile Brand with Greg Kihlström®, host Greg Kilstrom engages in a deep dive into the evolving landscape of customer loyalty and the transformative role of artificial intelligence (AI) with Raj De Datta, CEO and Co-Founder of Bloomreach. This episode explores the critical shifts in customer loyalty, the integration of AI in enhancing customer experiences, and strategies for building an omnichannel approach to foster long-term brand value.
Redefining Customer Loyalty in the Modern Era
Greg opens the discussion by addressing the paradox of brands prioritizing customer loyalty superficially while using outdated programs that fail to resonate with today’s consumers. He emphasizes the necessity of repositioning loyalty as a foundational element of brand strategy rather than a peripheral concern.
Key Insights:
Notable Quote:
“Almost 50% of consumers will switch to a different brand if they can find a lower cost for that product.” — Raj De Datta ([03:43])
The Shift from Acquisition to Retention
The conversation transitions to the traditional focus on customer acquisition over retention. Raj explains that the early digital marketing landscape favored aggressive customer acquisition due to low costs, but the rising cost of acquisition now necessitates a shift towards nurturing existing customers.
Key Insights:
Notable Quote:
“We have to do the hard work of actually creating the kind of quality experiences that nurture lifetime value.” — Raj De Datta ([06:50])
Consequential AI: Transforming Customer Loyalty
Greg introduces the concept of "consequential AI," referring to AI applications that significantly impact growth, quality, or customer experience. Raj elaborates on how AI can revolutionize marketing by automating tasks, enhancing decision-making, and reshaping customer interactions.
Key Insights:
Notable Quote:
“If it doesn't move the needle by double digits on growth, if it can't 2x improve the quality or the costs as an input, or if it isn't profoundly impactful to your customer experience and differentiation, don't spend time on it.” — Raj De Datta ([08:31])
Personalization vs. Traditional Loyalty Programs
The discussion moves to the evolving nature of loyalty programs, contrasting personalized experiences with traditional points-based systems. Raj argues that while personalization has become a baseline expectation, it complements rather than replaces traditional loyalty incentives.
Key Insights:
Notable Quote:
“Personalization is table stakes expectation...it’s very real.” — Raj De Datta ([15:52])
Building an Omnichannel Customer Experience
Omnichannel experiences are crucial for mitigating customer frustration caused by fragmented interactions across different touchpoints. Raj emphasizes that true omnichannel loyalty is achieved when the brand presents a consistent and cohesive presence, irrespective of the channel.
Key Insights:
Notable Quote:
“If you can do that and leverage AI to help you do that, then I think you have the best chance of leapfrogging.” — Raj De Datta ([18:58])
Leadership Strategies for Overcoming Silos
Raj provides actionable advice for leaders aiming to create a unified, customer-centric approach within their organizations. He underscores the importance of restructuring incentive systems to align teams towards shared customer-centric goals.
Key Insights:
Notable Quote:
“Set up the right incentive structure...the goal here is to increase lifetime value per customer from X to Y.” — Raj De Datta ([21:22])
Staying Agile: Raj’s Approach
In closing, Raj shares his personal strategy for maintaining agility within his role at Bloomreach. His "day zero" approach ensures continuous innovation and adaptability by consistently re-evaluating strategies as if starting the business anew.
Key Insights:
Notable Quote:
“I try to take a day zero approach to everything...I take a first principles approach to every day and every problem.” — Raj De Datta ([22:52])
Conclusion
Episode #682 offers a comprehensive exploration of the shifting dynamics in customer loyalty and the pivotal role of AI in fostering long-term brand value. Raj De Datta provides valuable insights into how brands can leverage AI to create personalized, omnichannel experiences that resonate with today’s discerning consumers. Leaders are encouraged to rethink their strategies, prioritize customer-centric approaches, and harness advanced technologies to stay agile and competitive in an ever-evolving market.
For more information on Raj De Datta and Bloomreach, as well as to access the "Winning Playbook for the New Era of Customer Loyalty," listeners can follow the links provided in the show notes.
About the Podcast
The Agile Brand with Greg Kihlström® is a premier podcast offering expert insights into marketing technology, AI, and customer experience from top brands and Martech platforms. Hosted by Greg Kilstrom, the podcast serves as a vital resource for leaders seeking to build customer lifetime value and sustain long-term business growth in a rapidly changing world.