Merkle’s new global CEO on how to create next-gen customer loyalty

Nearing the end of his first month as global chief executive of Merkle, Michael Komasinski is laser-focused on expanding his workforce, helping organizations build loyalty and, well, having fun.Following the departure of Craig Dempster, who served for some 15 years on the executive leadership team at Merkle, the data- and performance marketing-focused branch of Dentsu, Michael Komasinski has taken the reins.Komasinski’s appointment, announced in October of last year, came at an especially pivotal moment, as Merkle shifts its focus toward customer experience across sales, marketing and commerce — an effort that’s been underway for the past year-plus and was accelerated with its acquisition of customer experience and commerce agency LiveArea last summer. Now, nearly a month into his tenure as Merkle’s global chief executive, Komasinski talks attracting and retaining talent, bringing social and environmental purpose into the customer experience and prioritizing diversity, equity and inclusion. Oh yeah, and he’s not all business. He likes to have fun, too.How have your first few weeks in your new role been? What are the top challenges you’re facing this year?Things are very good. We finished last year with a lot of momentum — across all three regions, we saw growth rates tick up nicely from September through the end of the year. And things continue to be really strong as we come into Q1.I am getting settled into my new role. I’m appointing and making a few leadership changes. We'll be announcing a backfill for my role in the Americas sometime in the next few months. So, I've got a lot going on with leadership and talent.Craig Dempster and [the executive team] set such a strong strategy for the business… we’re continuing to try to execute on that. The number one issue is scaling and getting enough headcount to deliver on the demand. That issue is similar whether you're in almost any industry these days, but especially in a space like ours, where we have incredible demand for the kind of cutting-edge services we do. The demand for talent is insatiable. We have big initiatives around our global delivery network and a ton of early career hiring, and we’re also focused on making our retention metrics as strong as they can be.From your perspective, what are the biggest challenges facing marketers today, and how is Merkle thinking about solving for those challenges?It is just the level of investment and time — it takes a long time [to move the needle].We released a study a couple of weeks ago about customer experience trends from a big, fielded research program that we did. One of the really interesting stats came back said that 14% of the consumers surveyed felt like brands know them really well. 14%! That’s a shockingly low number. If you use that question as a proxy, what would good, intimate, personalized, well-executed marketing look like?These results suggest that we're in the very, very early innings [of a long-term game]. Think about the amount of incremental spend and effort that have to go into changing that. To move results from 14% to 60, 70, or 80% could take half a trillion dollars of technology investments on behalf of the Fortune 2000 across the world.That just gives you some of that bigger perspective. It's a big journey — and it’s not dissimilar from maybe where we were on digital media types of questions in 2006 or 2007. If you were asking clients back then ‘How sophisticated do you think your digital media targeting strategies are?,’ it would have been really, really low. Then, what we saw over the next 15-year period was a massive amount of investment and effort going into developing amazing digital media and adtech solutions, which we now see today as a much more mature part of our industry. And there have been probably trillions of dollars that have gone into that.This week Merkle announced its 2022 Customer Experience Imperatives. Walk me through these objectives and the reasons for making them a focus this year.[Our first imperative is] ‘expand the vision for customer data’, which is more of a strategic imperative. This is about really thinking about the type of relationship that you want to have with your customers and then working backwards from there to decide whether you have the right experiences that are going to allow you to collect that data on those customers. It's really important for brands to think about how they want to know people, think about that value exchange and then build out their collection of programs — whether that's digital experience, promotions or aspects of their in store environment — so that they can collect and maintain a healthy first-party relationship with customers. You can't know somebody if you don't understand the data about them.The second one, ‘using measurement as a catalyst for change’ [speaks to clients’ need] to think about the KPIs or the business outcomes that they want to drive, and then breaking those down into the component marketing KPIs that drive those — like sales or units sold per month or other KPIs that really move shareholder performance for our clients. Clients really need to reengineer their enterprise systems and the way that they manage the business so that they don't end up either being siloed, or just measuring what's available — as opposed to measuring what's actually going to create the business outcomes they want. So, this really speaks to internal organization and the systems and KPIs that drive bigger business outcomes.Imperative number three combines commerce experiences and next-generation loyalty. It’s a dense imperative: commerce experiences need to be frictionless and fairly ubiquitous and available in a number of different touchpoints. And the way that those transactions are completed needs to feed into this concept of next-generation loyalty, which requires clients to have a point of view on what they stand for. They need to be able to bring their belief system closer to those interactions. Their perspective and actions on environmental and social good… are not just news headlines; they're very real. Next-generation loyalty is really defined by clients being able to find their voice on those topics and appropriately bring those into the loyalty conversation, which is increasingly driven by a successful and frictionless commerce experience.Talk a little bit more about how you imagine customer loyalty will evolve in commerce, especially in light of all the changes happening in the data privacy and cookie deprecation space.The whole Merkle ecosystem thrives on first-party data. It's why we got into the promotion space many years ago and it's why we're now getting into the commerce space — because these are programs that you support for a client that involve the direct first-party data capture of consumer information. In a promotion, for instance, you're going to put your name and email address in there. And if we execute that promotion correctly, now we've got permission to engage with you in other ways. Commerce is sort of the ultimate expression of that: I've brought you on some kind of a customer journey and now you're going to give me your name, your address, your credit card information. Now I really know you. And if I engage you in that next-generation loyalty way [that ties social and environmental purpose into the interaction], then I get to keep that relationship with you.Getting a bit existential, that's the whole Merkle philosophy on what modern marketing is. And in some ways, it insulates our clients from third-party and device ID deprecation and all that noise that's out there that they can't control. We are advocating that they set up a way of marketing and interacting with customers that makes some of the downside of those things like much less impactful. Identity resolution in its various forms will continue to be important — especially as you think about it globally, because the data landscape is very different as you get outside the US — but if I were a client, I would put first-party at the heart of my strategy.The third imperative you mentioned for this year emphasizes the need for organizations to put social and environmental purpose at the heart of their efforts. Earlier this month, Merkle announced a new partnership with Prospanica, a national association of Hispanic business professionals. Can you talk more broadly about Merkle’s vision for social good and diversity, equity and inclusion?We have built a very strong and broad DEI program, and I give our chief equity officer Kirt Morris a lot of credit for that. It includes things like partnerships — we have a partnership with Howard University where we provide the curriculum, get to know students in that program very well and potentially bring some of them onboard to Merkle. We also have the partnership with Prospanica. Those partnerships have been great for us.We've also done a lot on the internal retention and development side of things. One of the things I like the best that we've done is an internal program called Seat at the Table, where we assign mentoring relationships and look at the inclusiveness of our leadership meeting structures, which sometimes are quite dependent on existing hierarchy and organizational reporting. And we look at like, ‘How are we giving people access to rooms that they might not otherwise be in?’ It’s about access to mentoring and access to the way that the company is run. In terms of results, we've made some nice increases in our recruiting pipeline, both in terms of gender and in terms of our BIPOC candidates. And we've hired some dedicated recruiters to that space as well as a management team to carve out the time to look at how we're cultivating talent and helping to manage people's career paths.We have work to do, but the program that we've built seems to have a lot of the right things in place, whether it's attracting new candidates in places that we didn't know where to look in the past or focusing on retention and development of the diverse executives that we already have. [Our focus is on] continuing to build that out and work on some of those places where maybe the metrics aren't moving quite as much as we want.There’s a lot of buzz around the metaverse and about web3 these days. How are new and emerging technologies factoring into your calculus for the future?I do think that the metaverse is a big opportunity, and we're working on a strategy for how we play there. The virtualization of life, in some ways, I think is a pretty undeniable trend — so money and investment will flow there.One of the other big ones is the 5G rollout. It makes the experience and commerce platforms easier to deploy and it makes them more seamless. It will allow our technologists to come up with more innovative solutions, where they might have been a little more constrained on some of the 4G platforms today. I don't know exactly what the future looks like, but I think 5G going to be really strong for our commerce and experience agenda.As far as the AI and machine learning agenda goes, we've been on to that for some time, because so much of that is driven by algorithm development and things that are core to the Merkel DNA. I see almost like a Moore's Law progression of that over the next several years. The capabilities and what's being processed in that manner will probably continue to double every 12 to 18 months.Any other goals for this year?It's going to be an interesting year in terms of getting to a new paradigm. I don't even want to say ‘return to office,’ because I think flex and hybrid working is here to stay. But [I want to bring] a little more fluidity, and maybe put a little bit of the fun back into work.The pandemic has been tough on people, especially our working mothers. As a society and as a company, we need to get past some of these things and put the right balance and fun back into the workplace. That’s top-of-mind for me.For more, sign up for The Drum’s daily US newsletter here.

Merkle’s new global CEO on how to create next-gen customer loyalty

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