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The Loyalty Loop: How small things add up to big business.

English

Transcript

Introduction

Andy: Welcome, welcome, welcome everybody! This is the very first episode. You're here for a little bit of history. We're launching today a new webinar about content marketing. And, like me, if you're here, you're probably a fan of the platform. 

I'm an evangelist, a long-time user of SEMrush. And when they asked me if I would be open to this, of course, I said yes because they're just the best collaborators.

I get to be your host for this new series on content marketing, which is my passion, my professional obsession. When they said I could invite anyone that I wanted to, to be on the show, I got even more excited. 

Especially since their little list of suggestions had one name at the top: Andrew Davis. We have Andrew Davis here with us today. And we are joined by Casey who is in yet another city. Say "hello" Casey.

Casey: Hey, Andy, I am in Boston.

Andy: Our format goes like this. Andrew is, if you don't know him yet, you really should. You will in a minute. Very well known for his beautifully structured and packed with insights presentations that he gives all over the world. 

I first met him at Content Marketing World. He rocked the stage. I saw the session where you were the top-rated speaker and I got your autograph afterwards. Andrew has his own style for his presentations as you'll see in a second. If you don't mind, let's just jump in. I'm ready.

Andrew Davis: This is great. Thanks for having me on. I wanted to talk about the loyalty loop today. I'm going to share my screen and we'll do that. How does that sound? 

All right, we're here to talk about the loyalty loop which is a concept I've been researching for the last three years. It really boils down to a problem I have with the funnel. I know you love the funnel, Andy. Casey, I don't know if you're a big funnel fan. Are you?

Casey: I mean, kind of. I'm a content marketer.

Problems with the Marketing Funnel

Andrew Davis: Yeah, I think marketers, in general, have become fans of the funnel. And we all know it works; you raise a bunch of awareness for your brand in the marketplace or your content in the marketplace, you get some people to consider working with your brand.

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Some of those people will show some intent to purchase a product from you, some of those people might purchase your product or service and some of those people might become loyal advocates. 

If you're having trouble getting people through the funnel or you don't have enough people trickling out the bottom, you've just got to raise more awareness. 

The framework we're using is fundamentally the same and there are two problems with this which we can dive into the chat if you want. Basically, one of the problems is it's linear, which I don't think represents the way people really buy. 

And two, it's, I think, it's media-centric and I have a whole conspiracy theory about why we still use this. At the end of the day, every media company wants to sell you ads because if you're having a marketing problem and you're not getting people through the funnel, it means you need to raise awareness which means you need to buy ads.

Here's the thing: if you get nothing out of this webinar and you leave right now, all I want you to do is challenge the funnel. Just start to think, "Is this the best way to represent the consumer journey in a modern world given that it was invented in 1898?" And if not, what's a better model? I don't have the answer. 

But I want to talk about the loops. The loyalty loops. This is a model that was inspired by something that McKinsey and Company did in 2008 and I've spent a lot of time researching and finding it. Let me just walk you through it quickly and then we can talk about how it works. 

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Essentially there are two things I want you to recognize immediately: It's not linear. They (people) don't buy in a linear fashion; they buy in a very cyclical, circular fashion that happens very quickly sometimes and long at others. 

The second thing is, I just want you to remember, you can start anywhere on the loyalty loop. I'm just going to walk through the big key elements and I'm going to do it with a very simple purchase. I'm going to talk about buying a car so we all know how this works. And then we can apply it. 

Andy: You've successfully challenged me. I knew it was never linear. It's going to be hard to put me off the funnel concept. But I'm ready. I'm listening. 

Moments of Inspiration in the Buyer’s Journey

Andrew Davis: Maybe we can talk about how, I think, if you stack these, you end up with a spiral, not a funnel. But we'll talk about that later. 

We're going to start at the moment of inspiration. A moment of inspiration is a moment in time that sends you on a journey you never expected. 

For example, I was sitting at my kitchen table reading my mail one morning and in the mail, I get a letter from Nissan and it's from Nissan Finance. I open it thinking, "Oh, I didn't pay my bill this month, I have to get on that". 

When I open it, it's a letter from this woman, Rachel, and she's basically telling me, "Hey, Mr. Davis, sorry your lease is expired. It's going to expire in 30 days. We assume you're going to return your car, so here's a list of things you need to do before you return your vehicle to Nissan. If you have any questions call me. I'm Rachel, leasing maturity manager.”

If you could just fathom the inspirational tone. It was like, "Dear Mr. Davis, we want to inform you that in the next thirty days...". It was like that. 

But this is what I want to point out; these moments of inspiration happen all the time. I didn't wake up that morning thinking I need to buy a car, but I'm sitting in my pajamas drinking a cup of coffee and now I'm inspired. I've been sent on a journey I didn't expect that morning to buy a vehicle. 

Two things happen immediately any time you have a moment of inspiration. They happen very quickly and they're subconscious and unintentional. The first thing that happens is a trigger question pops into your mind. 

I'm sitting there. I'm like, "Oh my gosh, I have to return my car in thirty days and buy a new one". The first question that pops into my mind subconsciously and unintentionally is, "What kind of car am I going to buy next?"

Because our minds don't like ambiguity, they want an answer to every question, they have a deep desire for closure, a prime brand pops into our head to try to answer that as quick as possible. 

I'm sitting at my kitchen counter, I just read the first three lines of this letter from Rachel, she's sending me on a journey to buy a new car, the first question I ask is, "What kind of car am I going to buy next?", what's the first brand that's going to pop into my head?

Casey: Nissan?

Andrew Davis: Exactly! Exactly, it's Nissan. My brain just wants to answer it as soon as possible. That's all I'm doing. And so my brain is like, "Oh, thank goodness you answered it, you're going to buy a Nissan".

Active Evaluation of Different Brand Choices

Now we move into the next phase as soon as I shower and get in the car. I'm driving to work. I don't have time to go online and research vehicles right now, I have to get to the office. 

I'm driving down the street and I see a Jeep Grand Cherokee coming towards me. It's got the new body style and I'm like, "I like the Jeep Grand Cherokee". I add it to my list and now I've got two brands. I've got Nissan and I've got the Jeep Grand Cherokee. 

Then I see an Audi Q3. It's taking a left turn right in front of me. I'm like, "Audi Q3. I kind of like that car. Maybe we should test drive the Audi Q3. We tried it three years ago, let's give it a shot". 

Now I've got three brands. This is only a twenty-minute drive, but every car is a potential opportunity for me. Then all of a sudden I see this car pull up next to me. It's a Porsche Macan. I've never noticed this car before. It's a very nice car.

This is active evaluation. We're adding and subtracting brands as we move closer and closer to what I call a moment of commitment, okay? In active evaluation... let's say I test drive the Jeep Grand Cherokee. I don't like it. I test drive the Audi Q3. I like it, I filled out those online forms to get an Audi Q3 appointment to talk to somebody and actually negotiate, right? 

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The Loyalty Loop: An Alternative Model of Buyer Behavior

That Audi Q3 appointment form is what I call a moment of commitment. It's not a purchase necessarily. I want to be really clear. A moment of commitment is an instant in time where you trade money, data or time for information to support a cause or to buy a product or a service. 

Even if you email someone and say, "Hey, could we set up a twenty min phone call to chat", that is a moment of commitment. Even if you share a link and somebody clicks that link and they start reading your content, you could even consider that a moment of commitment because they are now going to trade some time to consume this content. 

Every moment of commitment has the ability to move into the next phase: a loyalty loop. But, time out on our purchase because I never should have got this far with Audi, right? If I've committed to filling out this form, they've sent me an email saying "Come on Saturday at 10 a.m.", I never should have got that far from Nissan's perspective. Does that make sense?

Andy: Yeah, you're in a different funnel. Traditionally, what Casey and I are probably thinking is, "Wait, now you've become aware of a different brand and now you're in a different funnel. They didn't capture you entirely". 

Andrew Davis: They missed the biggest opportunity, right? Because Nissan was the prime brand for me, right? I had a moment of inspiration that they triggered, I had a trigger question that popped into my mind, they were the prime brand, but they did nothing to get me quicker to a new moment of commitment. Does that make sense?

Andy: Yeah, right.

Andrew Davis: Any marketer can come up, within two seconds, anything they could have done to just try to get me into another Nissan. The easiest thing would be, "Hey, I included a brochure for our new Nissan Murano. For $5 more a month, we'll deliver it to your house tomorrow and you can sign the paperwork.” 

I think, as marketers, we very quickly forget that the loyalty loop experience is the first place we should focus. When we're the prime brand, we have to keep people coming to new moments of commitment and giving them an experience that adds something. 

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Andy: You've certainly pointed out an issue with the funnel which is that the funnel assumes one brand and that's not how anybody makes decisions. Your awareness, consideration, interest, commitment is just for one brand, even though they may be in the consideration step in ten different funnels. 

Andrew Davis: Basically, that was all of the presentation I wanted to get through anyway and I'm glad we're already talking about it. You point out one of the biggest problems with the funnel that I have. The funnel is purportedly how consumers buy, but it's from a brand's perspective. 

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Any new model I think you consider has to be really about the consumer's actual journey. What brands do they actually add and subtract in active evaluation and, more importantly, in active evaluation, how can you interrupt active evaluation and get someone to a moment of commitment very quickly?

Andy: I can certainly appreciate user-centered thinking, user-centered design. It's true that the funnel is brand-centric.I'm looking for a way to argue with you and I'm agreeing too much right now, but it's true. Casey, what was your first impression?

Prime Brands

Casey: The one thing that I was thinking of is, what if you aren't aware of the brands that are out there? Let's say I find myself with a problem and I don't know who the brands are?

I just started golfing and I don't know which club that I need to use when I'm 100 yards out or whatever it might be. Because I'm new, I don't necessarily know the brands I should be looking for.

Andrew Davis: Your moment of inspiration, right, is that, "I just started golfing", and your trigger question is, "What club should I use for different types of shots?". Is that fair?

Casey: Correct.

Andrew Davis: What is your prime brand? Where are you going to answer that question? Just yell it out, don't even think. 

Casey: The Internet, I guess.

Andrew Davis: Look, Google is one of a lot of people's prime brand when they don't have a prime brand in our marketing sense's mind. If you go to Google, if you were going to map this journey, you would go to Google right now and you would type in your trigger question and the first thing that comes up might be a Golf Digest article. 

That's a brand you're adding to active evaluation and you're going to consume the content there. That would mean you're here in active evaluation. Let's say Golf Digest, on their page, says, "Hey, download a pocket guide to choosing the right club for the right shot, so that when you're on the green you can actually make a determination with this little thing. Sign up here". That would be their moment of commitment to download that. Does that make sense?

Andy: Yup.

Casey: It does make sense.

Andrew Davis: If your consumer has a question that they don't answer with a brand they already know or maybe even five brands they already know, we assume that they're going to call a friend, they're going to go to the web, or they're going to go to a social network, which is a friend, and ask the same trigger question.

Where Marketers Fall Short

This is where a lot of people, especially us marketers, fall short. I think most of us are getting better and better at actually trying to interrupt active evaluation. We're not that great at getting people to commit for the right kinds of reasons. 

Inviting them to sign up for something that's relevant to their moment of inspiration; usually, there's a gap. Or a lot of times as marketers, we try to come up with something that's a catch-all for fifty moments of inspiration, but the truth is, it never really speaks to the consumer. 

After the moment of commitment, though, we're not great at delivering a really good loyalty loop experience. A loyalty loop experience is a series. We're very quick to try to go to the sale, most of us.

We need to help build an experience that does one of six things. Either it raises anticipation for another moment of inspiration or it scales camaraderie between the brand and the person you're actually targeting. We could remove friction from some of the other experiences that we know they're going down in active evaluation. 

We can talk more about those, but the key is to not end the experience and the content you're delivering at the moment of delivery with the thing you've promised, but building an experience that lasts longer so they build more trust over time so they have a new moment of inspiration that you actually triggered. Am I going too deep?

Casey: I think that makes sense. I mean, even when we think about what we're doing as marketers, whether you're a content marketer or doing everything as a whole, we're trying to get people to a certain point and then we have things like retargeting, like personalization. 

We're personalizing things for them to get them to continue through. I still think there's a funnel element to it. We're trying to push them into the next step by giving them the right things. Someone comes to my site and, yes, it's me. I'm trying to figure out what club I need to hit. I find this pocket guide. Well, what's my next step? 

If it's Golf Digest, what are they trying to get me to do? Is it commit to Golf Digest? Maybe they have a club, maybe they have an affiliate program, whatever it is. Now the next thing they might send me that makes sense is tips on buying wedges or something along those lines. That's not the end.

It's not the end, but it's not a funnel though either. It's a spiral.

A never-ending spiral.

Building Loyalty Loop Spirals

Andrew Davis: We need to constantly identify two things when you're building a spiral of loyalty loops. 

The first thing you have to identify is the first moment of commitment, and before you worry about the experience you're going to provide you need to design and identify the next moment of inspiration you're trying to create. 

Let's just play out your Golf Digest. You download the pocket guide and they say, "Great, thanks for downloading the pocket guide". Let's say that the next moment of inspiration they want you to have is that your current clubs suck. 

They need you to have that moment of inspiration. If that's the case, you need to build a little experience that builds to that moment where you go, "Oh my gosh, my clubs do suck. It's like they read my mind". 

In that experience, you might send an email that says, "How often do you play golf? Every two weeks, every one week, every day?" If it's every two weeks, I know that two weeks from now I can say, "How was your game this weekend? Was it terrible? Because if it was terrible, it was probably your clubs because you're a great golfer ".

Casey: It's definitely not me.

Andrew Davis: Exactly. Now you're on the second moment of inspiration that you're creating and you're designing the next moment of commitment again after that. If Nissan thought this way, I never would have bought my next car. Tens of thousands of leases for Nissan alone come up every year and most of them do not renew because they aren't thinking, "This is a moment of inspiration. What would be the best possible outcome for us? Committing to another Nissan.” 

How can we remove the friction? How could we actually build an experience that's designed to get them into another Nissan as fast and easily as possible with an increase in revenue?".

Let's assume that it takes three loops to get to a sale. After the sale, we still need to figure out what are the next moments of inspiration that we're going to create and one of the ones we miss the most are what I call the honeymoon phase. 

When you've just signed up for a new product or service, you're not going to be unbelievably excited about it forever. There's a very finite time to do it.

Rent the Runway, by the way, if you ever look at Rent the Runway's reviews, they are so well-timed. When we're coming to the next moment of inspiration and moment of commitment, we're trying to get people inspired to write a great review and commit to writing that review. What's the next moment of inspiration? Tell a friend.

Getting into the Minds of Target Customers

Andy: What I like about this is the context. You're connecting the inspiration to the commitment. I think one of the problems with funnels is that people look at it with data and...if you think of it as moments, which you keep mentioning and I like that. The context of what's in their mind and then what do they need? Casey's got to hit this ball 100 yards and she's not sure she's got the club.

Andrew Davis: I think you're dead on. At the end of the day, for me, it really is kind of about extreme empathy. The whole idea is, "How can we really get into the mind of our consumers that we're targeting?" 

It's really important that if you're going to build the right kind of experience you have to have a clear understanding of their moment of inspiration. What sent them on the journey for that step? What was the question they were trying to answer? What did they think the answer was before they went on this journey and got to us or are reading our stuff?

I think it helps build better experiences that speak directly to the consumer's needs in a much deeper way. And doesn't try to do everything at once, which is another problem. 

The whole goal of keyword research is trying to actually get into the mind of the consumer in a deeper way. If you're looking for great proposal design, you could try to own that main keyword, but the fact is that people that are doing proposals today are using Google Docs for their proposals or they're using Word for their proposals and they want to make them better. Their prime brand, when they have their moment of inspiration... 

Let's say you're sitting at your desk and somebody that you were trying to sell sends you a proposal from a competitor and it looks awesome and you're like, "Well, I'd go with them too". Your first thought, that's your moment of inspiration. Your trigger question is how can I make my proposals look that good so I close more deals. Your prime brand is going to be, well, I use Google Docs. 

When you go into active evaluation, what you're searching for is, "How do I make Google Docs look better for proposals?" Again, that's only 700 or 800 searches for the month. That's not going to be the most important one. But if you take that moment of inspiration, you can get in their minds so well that you could build this experience that I guarantee in a few days will get them on your proposal software. I guarantee it.

Andy: We've given examples so far both positive and negative in inspiration. Your proposal inspiration was an insecurity, right? You're like, "I look bad". Casey or Andrew, what are your thoughts about those triggers and using language targeting T words or doing any kind of marketing that is designed to trigger an insecurity or a fear or a FOMO? That kind of thing. 

Casey: I actually just gave a presentation two weeks ago...and one of the things I was talking about is there is a swimsuit brand and one of the things they do that I just absolutely loved and I just had to use this as an example was, "What is my size? What size swimsuit do I need?" 

Because as a woman online, finding your swimsuit size is essentially impossible, but they built this brilliant piece of content that takes you through the steps of what are the things that are important to you? So, fit, and sizes, and whatever it might be and then not only did it give you a suggested size, it gave you suggested swimsuits. 

I thought that was really fantastic and their whole brand is all about inclusivity and regardless of size and age and whatever and their marketing around it is so brilliant. 

I thought they really capitalize on that idea because as a woman you want to look good in your swimsuit so whether it's a fear or whatever it is, their branding has enabled their user or the person to feel like, "Oh, okay, I can get behind this. This suits me." The language that they use, I think, really just resonates with their audience and I just think they do a brilliant job of it.

I was thinking about software. I think one of the things that gets me is I've been going through the process of trying to get an HR tool, so what are the things I need? 

Well, some of it's based on seats, right? Licenses, number of people, the different features that I need. Well, wouldn't it be great if there were just a tool that took me through here are the things that I need instead of me having to dig through 8,000 pieces of material that all I got was, "Here's what we recommend for you." That would be nice.

Find out What Inspires People to Start the Buyer’s Journey

Andrew Davis: Let me ask you, what inspired you to go on this journey to find an HR tool?

Casey: Well, one, our company grew, but two, I've been using email to keep track of everybody, right? All of a sudden it's like, this is too much. I missed a review or I missed a check-in.

Andrew Davis: If you're listening, when you ask any customer or client or prospect what inspired them to go on the journey for this, what you're listening for is not the first two things you said, Casey. It's the, "I missed a review". That is the moment of inspiration. 

If I was going to run an ad for you as your moment of inspiration, I would run an ad and say, "Did you just miss an employee review or forget this or can't find that email with the employee that you just hired? Well, here. We should chat" or "Here's a thing. 13 things you need to do". I wouldn't try to sell you the software yet, I would just try to help you not miss your next review.

Casey: Sure, right, that makes sense.

I guess I would question too, I love how you got me to say that. That's great. We talk a lot about content specifically and using questions and whatever it might be, like talking to support, but how would you say you find that information? 

Because a lot of the times I'm thinking of places... Like, I'll talk to the sales team or the support team or whatever it is, but those people are already on my site. How do you find that info before people have gotten to you for that?

Andrew Davis: This is a great question. I always recommend, when you have a question like this, starting with your loyalty loop. The next person who signs up for your service or buys a product from you, as soon as they finish the purchase, they bought it, they signed up, you should call them on the phone and say, "Hey, look, do you have fifteen minutes. I'm so excited you bought a product from us or you just bought from us or you just subscribed. I just wanted to know, what inspired you to...". 

Just ask that person, "What inspired you to?" And just listen. They'll actually talk you through it just like you saw Casey do. They'll say a bunch of other stuff, but in the meat of it is the instant where you could see that they were like, "I've got to get some software, I've got to get some software, I've got to get some software". Those are your three things that you're going to write down as your moments of inspiration. 

When you ask for what inspired you, even if you go to a furniture store: I did this exercise with a furniture company and their salespeople are trained to ask, "What brought you in today?" 

When you ask that question, you get, "Well, we need a new couch". "Well, let me walk you over to the new couch", right? You're getting the second thing in the journey instead of the moment of inspiration.

Instead, for a whole day, we had furniture salespeople ask people, "What inspired you to come in today?" The answers were vastly different. They would say, "We just moved into a new house, we redid our whole living room, but the living room is bigger and the furniture looks small". 

Now that, from a sales perspective, I just know two things; one, you just moved into a new house and it's certainly bigger and your furniture looks small. You don't just need a new couch, you need a whole house of stuff. I'm going to spend a lot of time with you to help you redesign your house instead of just walk you over to the couches, right?

Applying the Loyalty Loop Model in Marketing

Andy: Where will we be applying this if we've truly taken this to heart?

Andrew Davis: If you're truly taking this to heart, you're building experiences everywhere you can that are focused on understanding the commitment they just made and the next moment of inspiration they need to have.

You'll know that it's about the little things. It's the micro-moments between a moment of commitment and a moment of inspiration that will shape your success online, offline, billboards, billboard ads, display ads, SEO, website content, phone calls, actual in-store retail experiences, it doesn't matter. 

You have to understand, it's a series of these little steps that build a giant Slinky that never ends in building loyal fans and followers.

Andy: We're going to wrap up here in a minute, but let me just think through a couple of things I've learned. 

Of course, it's not linear, and I knew that and I've seen the funnel tear down. I appreciate that because we all know the funnel is linear and attribution is an insanely complex thing and multichannel attribution and multi-devices and “where's my audience”.

I love it partly because it's user-centric or customer- or audience-centric. Also because it's an oversimplification to say awareness, consideration, action⁠—if your model, the loyalty loop forces you to think about the context and moments, then you are more likely going to successfully connect the dot to keep the attention. 

I like to think of it as moments and I like the emphasis on context because it's too easy just to try to rank for a phrase and now our one metric went up. Traffic; I've got to convert people, I've got to change my button colors, see if I can get better conversion. 

People do that every day. People everywhere do that every day. Target a key phrase and make a call to action. Make a conversion. Cheese and mousetraps. “How come I'm not making money yet?". It's actually because you didn't think about what your visitor cares about.

Casey: At the end of the day, I would hope that good marketers are doing these things already. And to Andy's point, the funnel is obviously an oversimplification of what we're doing. What you're showing, in theory, should be what people are already doing.

Andy: Thank you both. Casey, where can people find you?

Casey: You can find me at coolmarketing.com or you can find me on Twitter @CaseyG. I'm one of the people that's still holding down Twitter. I refuse to let it die.

Andy: I'm there with you. Follow Casey please. Attendees, before you close your tab, go follow Casey. Andrew, where can people find you?

Andrew Davis: Hey, you can also find me on Twitter. I'm @DrewDavis on Twitter and I'm @DrewDavis on Instagram and you can find me on YouTube, just search for loyalty loop. Andrew Davis. I do a weekly video series. Or you can check out my website: akadrewdavis.com.

Andy: This was a blast. Thank you both.

Andrew Davis: Thank you guys. Bye.

Casey: Thanks, guys.

Andy: Thank you, SEMrush.

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