Bond Brand Loyalty announced the acquisition of rDialogue on Feb 11.
The press release provides the first level of information about the transaction, but we wanted to know more. Bob Macdonald, CEO Bond Brand Loyalty and Phil Rubin, CEO rDialogue were kind enough to spend time with The Wise Marketer following the announcement to unpack what this means for the competitive marketplace. Here’s a summary of the conversation we had on Feb. 12, the day after the announcement was made.
The Wise Marketer (TWM): Congratulations on this announcement. It came as quite a surprise.
Phil Rubin (Phil): Many thanks! Overall, even just in the short time since we announced this combination, the feedback we’ve received has been just overwhelming and wonderful.
TWM: Can you share some background on how this deal came together and where you found common ground?
Bob Macdonald (Bob): From the beginning, Bond has focused its work on building thoughtful, experience-driven strategies that enable brands to engage consumers at every stage of their journey with that brand. In meeting Phil, we found a very similar philosophy. This meeting of the minds was very important to us. Adding Phil and his smart talented team to our organization makes this a merger that ultimately will produce even greater thought leadership, with new strategies and approaches for the marketplace.
TWM: So, I’m guessing that this combination didn’t happen overnight? I think you mentioned you’ve been talking for 10 months or so?
Bob: Phil and I met through one of my colleagues almost a year ago and we started exploring different ways of working together. The talks evolved through the summer and it just took some time as we all get distracted by our day jobs. Throughout, we’ve always had a meeting of the minds between us. That’s not to say that we agree all the time, and I welcome a little bit of pressure or friction.
TWM: Would you call that “productive friction”.
Phil: Yes, let me jump in on that. My dad is a psychiatrist and when one of our kids was going through some growth issues, he said, “there’s no such thing as growth without conflict”. That doesn’t imply something negative. Following on Bob’s point, I agree that healthy tension is how we all grow and learn and get better. And I think the same applies to how you work with clients. After all, if we just sit in the same room violently agreeing together, what’s going to change?
TWM: A couple of practical questions about the announcement. Should we call it an alliance, combination, acquisition, merger, or something else?
Bob: It is an acquisition in practicality and a merger in reality.
Creating better connections between Customer Loyalty and Employee Loyalty
TWM: Any other thoughts on the journey that brought you to this point in time?
Phil: It’s interesting to reflect on our last 14 years. We started getting approached by companies with an interest to acquire rDialogue in probably our 3rd or 4th year. From the first meeting we had with Bond, we found such a natural alignment of our views regarding the dynamics of the customer. This combination with Bond was so different than any of the other conversations we ever had. It just felt like a natural and perfect fit. I really believe it’s transformative, which is what we’ve all been working towards.
TWM: Tell me something that you’ve found from this opportunity that you might not have expected?
Phil: I’m super excited about extending our work to make more connections between customer loyalty and employee loyalty, while translating that connection into a more powerful customer experience. This linkage goes all the way back to what Fred Reichheld talked about in the very beginning of his book The Loyalty Effect.
TWM: It’s interesting you mention the importance of employee loyalty. You might have seen that Bryan Pearson (former CEO Loyalty One) just took an advisory position with Nudge Rewards, a company that is focused on empowering employees to improve customer experience.
Bob: Yes, we are familiar with Nudge and work with them.
Building community, sustainability, and happy employees
TWM: Great, well we we’ve been studying the linkages of behavioral science with customer loyalty, including understanding more about “nudge groups” and we found a lot of good research on the topic. We also found many examples of CEOs citing the importance of investing in human capital, and how creating a positive culture in the workforce has a direct and positive impact on the business. Do you think we are truly entering an era where employee loyalty will become kind of synonymous with business success? Will this be part of your vision for the combined companies?
Bob: From a pure business standpoint, there’s a movement afoot reinforcing the importance and relationship among community, sustainability, and happy employees. Brands are recognizing that loyalty is about much more than one stakeholder representing shareholder value. A long-time Bond thesis holds that the brand’s culture is its major resilient differentiator, and the most difficult thing for a competitor to copy or replicate.
Phil: I would echo all of that. We always challenged ourselves at rDialogue with the question “how do we create a place where I always wanted to work?” This is not only the right thing to do, but it is clearly the right time for the market.
Looking at the big picture of Loyalty
TWM: Let me ask you both about how you view “Loyalty” in a broader context. I’ve read two articles in the past few weeks that lead with titles like “Points are Dead” or “Loyalty programs aren’t doing the job”. In both cases, the body of the articles told a different story than the headline would have led you to believe. As you lead the industry with this new business combination, what would tell your fellow marketers about customer loyalty in 2020?
Phil: We’ve been deliberate about delineating the differences between Customer Loyalty, Loyalty Marketing and Loyalty Programs. We start with the idea that loyalty is the goal. It’s a state of mind that we’re all striving to achieve and has an emotional component. There are a lot of traditional definitions, but in the research we’ve done, the way customers describe loyalty is a willingness to pay a premium or go out of their way to do business with a brand.
This is different from the way we define Loyalty Marketing, which is an organization’s commitment to pay attention to key stakeholders, employees, customers and act accordingly, something that has all kinds of implications in terms of data collection insights and what is relevant for customers and employees. That’s where our Loyalty 3.0 ecosystem and the five drivers we’ve identified really come to bear. To your point, Bill (TWM), it’s not all transactional. There’s a point where financial benefits do make sense for some customers and segments, but the other four drivers in our model are all about the experience.
The Loyalty Program is the means to the end. Both the requirements and the definition as well as the compliance factors related to GDPR and CCPA make the planning of Loyalty Programs more important today.
Bob: To address the term Loyalty Marketing, we see that as the highest form of hand raising in a privacy legislation-rich environment. It enables a dialogue between the brand and its audiences when they’re not shopping or thinking about them in a transactional way. We like our expression that “points are not the only point” when talking about Loyalty Programs. It’s really about the value exchange and the dialogue.
When we chose the name Bond Brand Loyalty, the word “bond” was the most important, representing the connection between people. We think that loyalty mechanics help create those connections on a scale that allows you to offer up value to unlock a series of trade offs between information, data, and experiences. That is the future.
I agree with the notion that says it’s not about points. Points, at the end of the day, from the brand’s perspective, is a scoring engine. That’s about it. From our perspective, it’s about serving the audience and offering up a value exchange that enables an ongoing relationship.
Defining buzzwords around Loyalty Marketing and Customer Loyalty
TWM: Amongst the battle of all the buzzwords, what do you consider the most important among Customer Engagement, Customer Experience, Customer Loyalty, and maybe Emotional Loyalty? Is there a hierarchy?
Bob: There are an awful lot of buzzwords these days and everybody is using them in different forms that tend to debase the actual meaning at times. Our belief is that bonds build business and experiences create bonds. And obviously there is an embedded pun in that, but we believe it very strongly. And we believe that the data, the relevant experiences, is what ultimately creates connections. And those connections create and build business.
Phil: I would just add one thing. Brand loyalty needs to start with the brand making a priority commitment to these stakeholders and demonstrate loyalty to them before they can expect loyalty to come back. And that was the very first stake in the ground for us in the Loyalty 3.0 evolution.
“We want to be known for solving complex customer issues”
TWM: As a combined group, what do you most want to be known for in terms of services?
Bob: As Bond, we are expanding dramatically, but in an appropriate fashion by doing great work for our customers. This is all very practical. We know where we can help our clients best and will grow in that direction. On the most basic level, we’ve added great people and offices in Atlanta, Denver, and New York.
We’ve got an amazing group of clients and rDialogue has an equally well-established and great set of brands that it serves. Together, we have a much larger talent base to bring even greater value to rDialogue clients. By the same token, we now have additional expertise to add into our customer base and bring that.
Ultimately, beyond anything else, we want to be known for solving complex customer issues on behalf of the brands who are our clients, and that extends well beyond customer experience, even loyalty. We’re in the long-term customer relationship business and are trying to build deep, loyal relationships with our customers because we provide great service and expertise to those customers.
Phil: We’ve got some very big global enterprise sized clients, and the feedback we’ve gotten is they trust us, we’re smart, and easy to work with. We’re so excited about being part of the Bond family, working together to try to accomplish more than we can do independently.
TWM: What didn’t I ask, or did you have something on your mind that you really wanted to share?
Bob: We do a wide range of things. Some of them have been defined as Loyalty Marketing, but across a wide range of service offerings we believe that we’ve reached a time when our collective skills and capabilities are building towards the same outcome, which is this idea of solving complex customer issues for our brands we work with.