TMW #022 | Peloton’s loyalty program, tech is killing the dining room and the news media bargaining code
Welcome to The Martech Weekly, where every week I review some of the most interesting ideas, research, and latest news. I try to look to where the industry is going and make sense of it all.
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👌Top #3
🍴 The death of the dining room. An unfortunate long term causality of the pandemic will be restaurant dining rooms, but it will also be a big opportunity for those of us working in marketing and tech. As retail and hospitality continues to be shaken up, many players are innovating ways to do business without having to have a location to do it in. The growing popularity of the Ghost Kitchen, enables restaurant brands to trade without a physical presence which has only accelerated during the pandemic. This week it was announced that Walmart will be laying off 1,200 staff in the US in what they are calling an “omnichannel reorganisation” which is latin for “we don’t need floor staff anymore.” Walmart has been integrating offline and online channel teams over the year in an effort to improve acquisition of the customer and opening up new ways for customers to receive their products.
It’s not only Walmart, the largest global restaurant chains (McDonald’s, KFC, Burger King, Chipotle, to name a few) are announcing new drive through tech, improving app and digital channels to purchase and build out personalised experiences for customers before, during and after buying dinner. Last year McDonald’s made news with their acquisition of Dynamic Yield, a personalisation engine. And with many brands now acquiring or adopting similar tech, it’s now clear that predictive selling, targeted personalisation and tailored experiences will be the norm moving forward for fast food chains. It was already happening before the pandemic hit us, but now the marketing, data and tech departments of the restaurant world have only accelerated in a post pandemic world where you won’t be able to buy a cheeseburger without giving away your email address and 36 other data points. Link
📰 The news media and digital platform bragaining code. A couple of months ago, it was announced that the Australian federal government was pursuing a mandatory bargaining code forcing Google and Facebook to pay media and news companies for the content produced and distributed on their platforms. Google put up a PSA under the Australian search bar, and the PR wars started (see TMW #006). Now a few months later, that bill has been introduced to government and is closer to being finalised. It’s a big deal, because this is the only instance globally of a deal like this being made by a government. Australia has a tiny population, and no real leverage over these tech giants, so asking them for concessions for using their content on platform is a challenging arrangement. Especially when these platforms can easily move away from having news media on their platforms in Australia with other digital first publications taking up the news vacuum. It will also impact Australian advertisers, as lower traffic on news mastheads means less data and even worse targeting options.
The idea with the bill is that each party should have to bargain for a price, but the issue is with quantifying the value. How do you count website traffic? How many of them turn into paying subscribers? How many ad dollars does the news publisher get? This will make discussions extremely challenging and open to all sorts of litigation. With the pressures of regulation, Government forced break ups and intensified privacy obligations, big tech are responding with a combination of compliance and outright rejection. I don’t think that a bargaining code will really change much, purely because paying news companies for their content just opens up more opportunities for digital first competitors, than a real way to bring equilibrium between tech and news. Link
🚲 Peloton and Loyalty. If there’s been only one topic marketers have been thinking about non-stop since the pandemic started, it’s loyalty and retention. Everyone is investing into loyalty in attempts to keep their customers happy and connected to brands. This is also in conjunction with the arms race for first party data, with a consensus among marketers that they are far better off collecting and using known customer data today for an uncertain advertising future tomorrow. Loyal customers are profitable, productive and promoters of the brand, so no wonder this has been such a core focus area for brands dealing with the economy shattering consequences of COVID-19. With so many marketers changing up their loyalty programs to increase incentives and even offering bitcoin instead of loyalty points, some newer companies are taking a different route to build long lasting relationships with their customers.
Enter a story that came out this week on Peloton, who has built a community of raving customers, achieved an NPS of 91 (greater than Apple and Netflix) and is seeing explosive growth as a consequence. What’s different with Peloton is that they don’t use points or incentives to create loyalty, instead, they use tech and community to build long lasting relationships. A few examples. One, they direct new customers to sign up for community channels because of this they open up opportunities to connect with the brand in places where people are already communicating. Second, they use these communities to inform product updates and strategy (like where to put Peloton bikes in hotels) directly listening to the needs of their customers and doing something about it. Third, they make the experience with the product really personal. Right down to sending specialised free products and perks to customers who complain or give great feedback. Fourth, they have a point in the week which is open to feedback from their community and they share product updates and responses to that feedback, creating a ritual with their customers. The point is this, not every loyalty program needs monetary incentives to create those relationships, but every loyalty program needs a direct, no nonsense interface with the customer to hear them out and act on their feedback. Link
📈Chart Of The Week
CXL has released their state of optimization report. Some interesting stats on the impact optimisation programs are making during the pandemic. Sign up here to get a link to the full version with a link to the chart.
📚 Everything Else
Santa’s brand strategy. A brand marketing agency in the UK created a fully fledged brand strategy document for Santa. Logos, typography, positioning. A hilarious dig at brand marketers. Link
Facebook and antitrust. Some big and also unsurprising news this week that 48 US States and the federal Government will file suit against Facebook on antitrust and anti competitive laws. The company has been accused of predatory M&A practices that stifle competition. Facebook thinks it’s revisionist history. Link
An Apple search engine? If I were working in SEO, I’d be preparing for this. Apple has been on a years long crusade on privacy, and with a search engine product definitely on the roadmap it is likely to change how 44% of smartphone users do search in the market. This could be the biggest tech power move in the 20s. Link
The politics of calendar bots. Companies like Calendly have seen some amazing growth, but there's still a problem with scheduling apps, it turns the recipients into your own personal assistants. Link
Global AI maturity index. Tortoise have done a global AI index across key countries, tracking investment, innovation, use of and implementation of artificial intelligence. Link
Facebook and Kustomer. A great deep dive into why Facebook is purchasing multi channel customer service software, Kustomer for $1 Billion. They want to own service channels, Kustomer will help them get there. Link
Establishing a growth program in early stage companies.There are three roads. Most of them involve multidisciplinary skill sets and appetite for rapid change. Growth as a profession (GaaP, acronym mine) is not only prevalent in startups, but in big enterprises looking to compete. Link
Please stop comparing Adobe with Google. Google dominates the web analytics space and will continue to do so. Adobe is not really competing, but rather finding its own niche in enterprise and connected cloud analytics. Link
An honest assessment of third party data. A lot of noise in the space about the diminishing value of third party data, this is a reasonable perspective on what this data could mean to marketers heading into 2021. Link
Social media plus. Social media has been around for more than 20 years now. Brands are still grappling with how to use it. You can tell when marketers still drop in CTAs in every single social post. An interesting analysis from a16z on the continuing promise of social media. Link
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