We Introduce Ellipsis Principal, Alex Lehwaldt. Alex leads the delivery of client projects and is an experienced Loyalty Consultant. Find out his tips on how to create a data driven strategy and what he sees as the next industry innovations.
Tell us a bit about your background
I started my career at a blue chip company in Germany and was fortunate enough to travel to Australia with the business, where I spent a few months and absolutely loved it. After returning to Europe, I moved into Strategy Consulting with one of the big 4 consulting firms. I started in the Technology Strategy team and during my time there also worked across other disciplines such as innovation and customer experience.
While working in Europe I travelled a lot and discovered the world of loyalty from a consumer perspective. I signed up for many hotel, airline and other travel programs and found them fascinating. Their value proposition and the level of engagement they can create is intriguing. I’ve seen many people do extreme things for loyalty points such as booking a flight they don’t need, just to retain their airline status.
In 2017 I moved to Australia and soon after met 2 of the Ellipsis Managing Partners (Adam and David). We shared very similar views on customer experience, loyalty and strategy and I loved Ellipsis’ strong customer focus and loyalty expertise, so joining the team was a no brainer.
What’s your role at Ellipsis?
When joining Ellipsis I was excited to dive in, build customer loyalty strategies, and help clients create sustainable relationships with their customers – no matter whether this includes a loyalty program or not.
As a Principal, I’m leading our project teams but am also a contributor to our project deliverables. A significant part of my work also includes contributing to the development of Ellipsis capabilities and tools.
What do you like about working at Ellipsis?
We’ve got a fantastic team that’s enthusiastic and a joy to work with. Everyone is passionate about solving customer challenges. What’s unique about our approach is that we put a strong emphasis on data and analytics. We focus on what the data is telling us, and use it to build a strong strategic approach.
Tell us your process to create a Data Driven Strategy?
Fundamentally, the purpose of any strategy is to get you from point A to point B. When you start thinking about how to create a strategy in a data driven way, it’s important to start with the basics and understand what is point A (where you are) and what is point B (the end point). Most of the answers will often start to become obvious as you’re working through this process of discovery and iteration. There are a few important steps to go through:
- Define the Problem. When working with our clients, we first try to understand the challenge and objectives in as much detail as possible. The answers we get are often wide ranging. Some already have a clear understanding and position, and some require more help. It’s important to drill down to understand the key requirements. For example, an objective to increase customer loyalty requires more definition and understanding. Are you trying to create emotional relationships with customers, are you trying to increase retention, is increasing revenue or selling more products more important? Clearly understanding the purpose will help define your hypothesis and your points A and B to build an effective data driven strategy.
- Establish a Hypothesis. Although it might appear counter-intuitive, I believe it’s crucial to start with the answer first. Document all the things you believe to be true, along with the unknowns and open questions. This quickly provides a perspective on which assumptions need to be proven or challenged throughout the strategy definition process.
- Create a Structure. Having documented all of your assumptions, organise them in a logical construct by linking them and creating a hierarchy. Doing this lets you structure your thinking, understand dependencies, and understand the gaps in your thinking that need to be filled. It also helps you identify the analysis and data required to prove or disprove your hypotheses and fill the gaps you’ve identified.
- Identify Critical Points. What part of the hypothesis if proven or disproven will change the answer and strategy you’re trying to create? From here you can clearly see the data points to look at first to create a logical framework that expands until the strategy is almost complete.
- Iterate and Refine. It’s important to go over and test your hypotheses from various angles until they become facts, supported by data points. Discussing and challenging the structure with team members and other stakeholders helps consider different viewpoints and getting everyone on board with the story.
What would be your top 3 tips to create a Data Driven Strategy?
- Start with the outcome in mind. Create awareness of what you’re trying to achieve and why. This must be done before diving into the data.
- Identify required data early. What data and analysis do you need to prove/disprove your hypothesis and answer the questions you have?
- Always try to look beyond the data that’s available to you. There’s a rich world of data sources and they can be internal and also external. Try thinking about other data sources that might be available to help build your strategy. From an external perspective it could be market data to help understand the size of the market, or customer segments you haven’t acquired. This enriches the data you have and helps you build a bigger and more complete picture.
What do you see as emerging industry trends and innovations?
- Companies will start re-thinking their approach to retaining customers and managing customer value.
COVID 19 is driving innovations that are having an impact on our world including in loyalty and customer experience. There’s an obvious shift to working from home and people are becoming more comfortable with technology such a Zoom and Microsoft Teams (from a professional and personal perspective). People and companies are adapting to the new normal. Grocers had to improve their online experience and capabilities. Netflix created a feature where viewers can select to watch the same show across different homes so families and friends can enjoy the experience of watching together. In pretty much every industry there are new questions companies need to tackle. One example where we are already seeing this are airlines. Due to the significant drop in travel, that is likely to be sustained beyond Covid 19, new urgent questions airlines need to deal with are ‘how should I communicate with a traveler that’s not travelling?’ and, ‘how do I keep customers engaged until they’re ready to travel?’.
- Subscription Loyalty.
We’ve seen an increase in subscription loyalty driven by big players such as Amazon and we will see more subscription programs as they become more established as a viable business model. This is due to the popularity of subscription loyalty but also because traditional funding sources for loyalty such as interchange are under scrutiny.
- Customers claiming back control of their data.
The Consumer Data Rights in California and Europe (The California Consumer Privacy Act and the European Union General Data Protection Regulation) have introduced stricter laws to provide customers with more control of their data and the capability to control who they want to share their data with, and if they want to share their data. We will see a shift in behaviour as it becomes easier for customers to claim control of their data and switch brands. Companies will no longer be able to use customer data like they’ve done in the past which will create challenges around managing loyalty programs and marketing campaigns. It will also pave the way for new business models.
We are Ellipsis, the Customer Loyalty Experts. We help businesses thrive through solving complex customer problems. Please get in touch, we’d love to talk.