Facebook Connects Nat'l to Local Businesses, But What About Loyalty?
Tim Glomb: Facebook ran a paid piece in AdAge this week that was titled How digital connects national brands and local businesses, but I think they left out a key piece of every brand's strategy, which is loyalty. I'm going to dig in, break down this article, and tell you why a customer engagement strategy should go beyond just advertising locally on Facebook. Okay, Tim Glomb here. I am missing my co- host, Richard Jones, this week, he's actually traveling, but I did want to bring you this piece because I think it's pretty interesting. Facebook paid piece in AdAge, again, the title How digital connects national brands and local businesses. It's marked as paid, so clearly, it's a Facebook story. And I'm not beating up on Facebook on this one. I think they did a pretty good job of explaining the power for a national brand that has local businesses. An example of that, and the article actually states it, so I'm going to quote it," We define local businesses as any small to medium- sized business that is part of a national brand, whether through agents, dealers, franchisees or owners." Now, we all know who these are. McDonald's is a national global brand with local franchisees. You have independent dealers for some other brands. And even, I'm going to show you some things from focus brands, which is a Cheetah Digital client, where they own John Bacchus, Schlotzsky's Deli, Moe's Grill, a bunch of different brands, Cinnabon in there as well. Yum! But what the article states is basically," Hey, we're Facebook, we're local." Totally agree. They have a great grip on local, they're incredibly good at it, they know where people live, and they can make that connection. But you need to enhance your local advertising budgets with a true customer engagement strategy, a loyalty strategy, and ideally one that you, the brand, own. And I'll explain why. First off, I'm going to quote the IAB because in March, the IAB came out with a report titled The 2021 Digital Ad Ecosystem, and that basically came out and said," You need to start using your advertising dollars to build long- term relationships with your customers." It's a great report. If you don't have it, you should google it, you should go find it. But they basically say in here, and I quote," Across the industry, there is a clear opportunity to up- level the consumer value exchange to one that fosters long- term consumer relevance and value." Essentially, if you read the report, they're getting at, build a relationship. And what are relationships? They're really loyalty programs. The old definition of loyalty program was points for rewards. If somebody's buying something, give them some rewards. But we all know that today, loyalty really means customer engagement, and that can start before someone even starts buying things from your brand or transacting with you revenue- wise. So it's really important that your brand have a customer engagement strategy, and recognize more than just the purchases, the emotional connections, the actions, and the information that they digest and discover from your brand, and that should start before they become a true customer from a revenue standpoint. So think about that. Do you have a great value exchange? Do you give recognition and rewards? Sure. Points for purchase can be part of that. But do you have an offering for your total addressable audience? That's what loyalty really is today in the modern marketing world of 2021. And I also want to bring up a great quote from a loyalty legend. He does not like that title, by the way, but he really is. He's been in the loyalty space for over 35 years, Mike Ribero. And Richard, my co- host, had the opportunity to interview him in June of 2021, and Mike gave some amazing insight. If you haven't seen his full interview, it's available on cheetahdigital. com under Resources, Client Stories, and Mike tells a good one. Mike started in loyalty back in Eastern Airlines in the'80s, he then was part of the architecture team of the Hilton Honors, which still today is a great loyalty and customer engagement plan, even in 2021. So Mike's been through it all. He now is the CEO of REACH, which is an emotional and amazing secondary loyalty group for brands. I'm not doing it justice. You need to go watch that video. But what I want to get to here is he talks about how everyone needs loyalty, and every brand should have some loyalty strategy, and beware though because there's always a middle layer. There's an intermediary and a middleman that's trying to get between you and your customers. And I'll give you an example, hotels. com. I'm not beating up on them for any given reason. They have a great business. I am actually a huge fan of it, but think about hotels. com. If you just own a small, maybe you own 1, 10 or 20 small hotels in a region of America or your country, hotels. com sits in between you and your consumers. They go out and market to consumers and they reward consumers for buying hotel nights, whether it's with your hotel or not. So imagine all these intermediaries that are getting between you. Instacart. Even your grocery chain, if you're a national brand, how do you not let these middlemen own that communication layer and own the relationship between your brand and the people consuming your products? So this quote from Mike, I think, is really relevant about what's happening there with the middleman, especially down at the local national brands with local businesses. Check out this quote from Mike.
Mike Ribero: Also potential of losing the customer. What's happened is because of the distance that's been created between customer and brand, it's opened the door for what I call disintermediators, platforms that are inserting themselves in between the relationship and either channeling all the business through them or literally taking the customer from the brand. Let me give you a couple of examples. You look at the popularity of platforms, the affiliate platforms like Rakuten and RetailMeNot. It started as a differentiator, but now every retailer's on that platform. And not only is it costing brands margin, but guess who gets credit for the discount? Not the brands. Rakuten does. The same thing in the travel industry with online travel agents. Hotels. com now has their own loyalty program, and they want the relationship and they want to take it away from their own hotel clients. And now, even with COVID, the emergence of platforms, like Instacart and Postmates, which are great platforms. But once the relationship's established, the supermarket is no longer getting the data because Instacart's getting the data. So it comes at a cost. And I think brands, if nothing, will be called to action by virtue of the fact that they want to reclaim their customers back, and the only way to do that is to give them a reason to re- engage and do so directly.
Tim Glomb: What Mike said there at the end is very important. Brands are going to want to reclaim their customers back. Well, if you're not only letting a middleman take it, maybe you haven't even started a loyalty program of your own. You need to claim your customers back. So now, let's segue a little bit into how does a national brand do that at the franchise level? Well, there are companies, like Cheetah Digital, that have that capability. You can go and buy something like the Customer Engagement Suite, which is an end- to- end solution that's well beyond loyalty. It's messaging, it's in- app messaging, it's wallet, and offer management at the local level, at the national level. And that's what we do. We do that for, as I mentioned, focused brands. So I want to actually show a couple of pages here where Jamba Juice. If you go to Jamba, whether you're in store or on their website, you can sign up for their loyalty program. Same thing for Schlotzsky's, same thing for Cinnabon here, same thing for Moe's. And focus brands, as the national owner with franchisees out there across the land, they can now pull all of their resources. They can have this platform that shares all the crucial data, the crucial insights, the machine learning, the AI, to better inform those franchisees. So a parent brand, a national brand like focus brands, can give a platform to its franchisees, give them limited access or scoped access that they need to engage their local audiences, message their local audiences, manage their local offers in their local region with the stores that they own, but the national brand still keeps that brand awareness and keeps all of that data flowing uphill to a larger insight. So if you're a national manager or a national brand with local businesses, you need to look at a loyalty platform. Of course, you're going to advertise on Facebook, but I strongly suggest why not advertise your loyalty program. Help out your franchisees, help out your directors, your independent dealers, get them into a loyalty program that everyone's going to benefit from the top- down. So that's all I have this week. Dig in, check out the Mike Ribero interview at cheetahdigital. com. At the top nav, you'll see Resources, you drop down to Client Stories, you'll see Mike Ribero in there. It's a great one. It's only 29 minutes long, but man, it's chock- full of good information. So I hope you found this one interesting. We'll see you next week. Rich is going to be in the UK and we'll have some more news and coverage for you. See you then.
Facebook ran a paid piece in AdAge talking about their ability to connect a local businesses which are part of national brands to their local audiences, but the trends and other marketing and advertising experts would tell you to start building a loyalty solution first and foremost. Hear why IAB and other experts also back up this theory, along with how technology can benefit both the national brand and local dealership.