Given the recent developments in the automotive industry, with automakers experiencing declining sales and unsteady customer base, we have reached out to Michal Szaniecki to hear his opinion on loyalty.
The Managing Director for SEAT & Cupra at Volkswagen Group is also an international keynote speaker on the business of non-conscious choice and CX (customer experience) who has been shaping the marketing landscape as a member of various international marketing associations, along with juries such as Effie, Drum Marketing, and Young Creatives. Besides being a juror, he has been named Marketing Director of the Year and is a frequently awarded Leader of Change in automotive and FMCG in CEE, Germany, and Switzerland.
We’ve had the pleasure of interviewing Michal while he was a speaker at Brand Marketing Summit.
Brandingmag: Millennials have disrupted marketing through their values, but also through their way of consuming the Internet and advertising. Could the next generation bring even more disruption?
Michal Szaniecki: Every generation brings disruption, especially now, fueled with technological advancements that shape people’s behaviors. However, not only will we experience more advanced touchpoints almost biologically integrated with consumers – but also the brand content they “communicate” will have to evolve – much more into the social relevance direction. The ever-rising need for brands’ meaningfulness will be equally disruptive as AI, VR, and other technologies accompanying the next generations.
Bm: Marketing was (and still is) about markets – about masses, segments, and collective typologies – but now, the norm is personal, data-driven individual interactions. Is it still right to call it ‘marketing’ when it is clearly not about masses anymore?
MS: I interpret marketing rather as a collective talent of a brand to bring an idea to people in a way that naturally satisfies their needs and goals – irrespective of whether the ‘market’ encompasses millions or just a couple of consumers. Amazon successfully delivers individual experiences on an unprecedented scale.
Also, being individually relevant does not necessarily mean being unable to address the masses. With AI-based marketing automation, we can discern patterns of consumer implicit behaviors and decide with the budget and time we have at our disposal whether we intend to leverage the major patterns only or activate niche paths.
Bm: Al Ries and Jack Trout have long advocated for the ‘positioning theory’, which now stands at the core of modern branding, yet many marketing strategies are still about moving the needle for the now. Why is that and how can brands efficiently split their marketing efforts into both short and long term?
MS: In an ideal scenario, brands should never split the efforts into short and long-term thinking. Every short-term activation shapes the long-term brand resonance, that’s how the psychology works with building contextual brand associations. So if the CEO requires a needle to budge tomorrow – and this push happens now more often than before – a marketer should make sure this tactical action will be 100% supporting of what her/his brand stands for. This is why brand positioning has become much more challenging task today. It has to be more intelligent, built with true motivations, understanding, and insight (coming more from big, data-driven behavioral patterns rather than focus groups) as well as open, agile, and simple. This approach brings consistency and speed to market. Consistency brings loyalty. Speed brings profit to a pioneer.
Bm: How do you map the customer journey and what essential takeaways do you extract from it? Furthermore, do you apply this fresh knowledge on quick marketing campaigns, to capitalize on the findings, or do you incorporate them in the long game?
MS: For me, the ‘customer journey’ (CJ) is the core of everything we do. Understanding what triggers consumers to move from one CJ stage to another is essential in bringing more profitable and sustainable growth for the brand. We did it with the worldwide best available explicit and implicit research methodologies to truly understand the non-linear CJ of our consumers. And I recommend investing time and budget into the process. E.g., we face 900 consumer interactions with our brands along the way to sell just one product. These interactions are possible wins or losses in converting our consumers to finalise transactions and increasing loyalty in the long run. With this intelligence we halved the cost per lead and accelerated conversions, hence selling more cars more profitably – behind no more physical efforts.
Bm: Should brands map the customer journeys of their competitors? Could this result in misleading conclusions due to a lack of insider information?
MS: That’s tricky. We humans are biased with not-invented-here fallacy and instead of inspiring ourselves with what competition does, we may falsely fortify the argumentation in favor of our way of thinking, not necessarily optimal. Also, certain CJ logic for a given brand may bring contrasting effects than for another due to their differing contexts and purchase motivation schemes. I always recommend observing the market and staying alert to the news – but as a priority we are building customer experiences around our CJ, trying to start with consumer behavior patterns and triggers, not the competition’s.
Bm: When evaluating the customer’s road from ‘lead’ to ‘loyal’, how do you differentiate between altering the brand’s strategy and further educating the customer’s habits/preferences?
MS: It’s very easy. The brand strategy is just the most intelligent reflection and response to the natural set of behaviors and habits of our customers, wherever they are on the CJ. Whether it’s a lead or a loyal consumer, we just need to deliver on 2 dimensions: simplify their life or add value to their life. Only by pulling this off can we dare to assume that we’re going to establish a new consumer’s habit for the benefit of our brand, like switching to an electric car. A loyal customer is the same person as a lead, just with the brand promise delivered successfully. Therefore, the strategy should not change across the CJ as for what the brand promises, and should just follow the goals of a person.
Bm: Do you believe that AI and automation will, eventually, allow brands to identify, create, and deploy individual marketing strategies for each individual customer? If so, do you think that it will still be possible to keep an overview of the events and maintain an overarching strategy?
MS: Yes, we’re not far from that, selling thousands of products a year. Once you’ve identified behavioral patterns that drive consumers from one stage to the next on the CJ, you can automate the deployment of “nudges” and can – fairly easy – personalize the marketing communication that accompanies them. It’s not unheard of to deploy 10.000 different creatives for one campaign – all done with AI. Of course, it depends on what data is available for you from the CJ. Sometimes, it’s only the beginning of the funnel, like for FMCG brands, sometimes it will encompass the full reiterative CJ cycle with the unsettlingly deep individualization potential.
Bm: What notable mistakes do you recall making in your early marketing days and how did they change your view on how customer loyalty (and its importance for a brand) works?
MS: I thought that loyalty can be easily attained by inviting consumers to new routines. For that, you typically pay with all kinds of loyalty programs. Then I started to look at loyalty differently. A consumer stays loyal to a brand because it’s easier. It liberates scarce resources of the brain which does not need to make all the choice analysis again. And it does so only when the experience with a brand did superiorly satisfy her/his goal, bringing both positive associations and emotional reward. Fortunately, this way of addressing loyalty is much less budget-intensive and brings much higher returns.
Bm: What are your recommendations for brands that struggle with customer loyalty?
MS: Across different industries and brands, I tried different routes to loyalty, including ‘bribing’ consumers to stay with loyalty schemes. One particular way has always yield the best ROI and loyalty scores – and that is a superior level of customer experience. As simple as that. Hence, what I do and recommend is to build your team, processes, and organizational mindset calibrated to the true CJ and make every single talent in your team responsible for delivering an unrivaled customer experience. It’s much more effective and efficient, it integrates silos in an organization, saves time and money – and makes consumers happier.