loyalty management

powered by Loyalty 360

Volume 2 Number 4

November 2010

Measure your Customer Centricity

Communicate In-the-Moment

YOU& What Army?

Your Branding Moment of Truth

Loyalty Management™ • LOYALTY360.ORG

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Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ •NOVEMBER 2010

NOVEMBER 2010

DEPARTMENTS

LOYALTY FORUM FEATURES

What’s on Loyalty360.orgLetter from the EditorContributors

Loyalty Forum: Your Voice

Behind the Brand/PeopleRobin Korman, SVP of Loyalty and Strategic Partnerships, Wyndham Hotel Group

Q & A: Ask the ExpertsCouponing, A Strategy to Build Customer Loyalty?

BooksLoyalty Reads

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WWW.LOYALTY360.ORGVOLUME 2 NUMBER 3

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This Month in

Add a little bit of chance to your loyalty program

pg20

An Interview with Wyndham’s Robin KormanBehind the Brand/People

pg 14Keep Them Guessing: Why Loyalty Programs Need RandomnessBarry Kirk, Maritz Loyalty

The Care and Feeding of a Customer Robert A. Kobek, Mobius Vendor Partners

The Customer Contact Center: Your Branding Moment of Truth Mary Naylor, VIPdesk

Dead-On: Grateful Dead Has Taught Us So Much About Loyalty Erin Raese, Loyalty 360

In-the-Moment Communications: Loyalty Programs & Today’s Mobile Program Bob Gold, Gold Mobile

Loyalty Management™ • LOYALTY360.ORGSAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. © 2010 SAS Institute Inc. All rights reserved. 56265US.0610

SAS® Customer Intelligence

Campaign Management and Optimization | Online Analytics | Real-Time Decision Management

Social Media Analytics | E-Mail/Mobile Marketing

You can. SAS gives you The Power to Know.®

SAS Customer Intelligence provides a comprehensive suite of marketing solutions that drive pro� table growth through retention and acquisition of your most valuable customers.

www.sas.com/retention for a free white paper

What if you could reduce your customer attrition rate nearly 40%?


How do you create loyalty in the age of choice?

NOVEMBER 2010

TECHNOLOGY, TRENDS & REWARDS

BEST BUSINESS PRACTICES

Mobile Marketing: Top 10 Technology Strategies All Marketers Must KnowRobert Carroll, SDL

Loyalty in a Fickle AgeRender Dahiya, Arroweye Solutions

Loyalty Innovation

Implementing and Measuring a Customer Centricity Framework Carlos Dunlap, Kobie Marketing

Customer Data: The Essential Element of Your Enterprise Voice of the Customer Program Annette Glenneicki, Allegiance

Closing the 21st Century Service Capability Gap Christoph Goldenstern, Kepner-Tregoe

You and What Army?Kelly Passey, Access Development

Loyal Insurance Customers: An Untapped Market Sandra Zoratti & Lee Gallagher, InfoPrint Solutions

What We’re Hearing Mark Johnson, Loyalty 360

Loyalty Program Profile Best Buy’s Reward Zone

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WWW.LOYALTY360.ORGVOLUME 2 NUMBER 3

Loyalty Management

Editorial & Production Team

Erin Raese - Editor in Chief

Mark Johnson - Contributing Editor

Kathleen Ostoich - Graphic Designer

Crescent Printing Company - Print Production

Loyalty 360 Team

Mark Johnson - President & CEO

Erin Raese - COO

Amanda Chasteen - Manager, Marketing Operations

Kathleen Ostoich - Marketing Manager

Annie Lerner - Marketing Coordinator

Contacts

Article Submissions & Advertising: Erin [email protected] or 513.360.8680, ext. 210

To subscribe to Loyalty Management, visit loyalty360.org.

© 2010 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reli-able. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing uthors and not necessarily reflec-tive of Loyalty 360 and/or its affiliates. Loyalty 360 shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

We Want Your Feedback

As a “voice of the customer” focused publication we want to hear from you–our customers. What would you like to see included in these pages? Share your thoughts on articles and ideas for content.

This is your platform. We would like to hear from you.

Write us at: [email protected]

This Month in

pg48

You and What Army?Marshaling the Troops toward Merchant Adoption of POS Mobile Commerce

pg36

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. © 2010 SAS Institute Inc. All rights reserved. 56265US.0610

SAS® Customer Intelligence

Campaign Management and Optimization | Online Analytics | Real-Time Decision Management

Social Media Analytics | E-Mail/Mobile Marketing

You can. SAS gives you The Power to Know.®

SAS Customer Intelligence provides a comprehensive suite of marketing solutions that drive pro� table growth through retention and acquisition of your most valuable customers.

www.sas.com/retention for a free white paper

What if you could reduce your customer attrition rate nearly 40%?

If you would like to contribute to a future issue of Loyalty Management, please contact Erin Raese at 513.360.8680, ext. 210 or [email protected].

5


LOYALTY 360 ON THE WEB

6 Loyalty Management™ • LOYALTY360.ORG

what’s on loyalty360.org

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In addition to basic company information, we provide members with an area to:

•Interact and connect with other Loyalty 360 members

•Communicate their company’s capabilities and industries served for each, along with an area to add relevant information

•Highlight recent press, articles, research, white papers, case studies, and job openings posted on our site

•Communicate relevant sales information & documents

•Connect visitors and members directly to social networks such as Facebook, Twitter, LinkedIn, and others

•Directly connect to potential sales leads via a built in and unique contact information form, available for visitors and members of loyalty360.org

•Read any and all content members have submitted to Loyalty 360, such as press releases, articles, whitepapers, and case studies.

Loyalty 360 is happy to announce the upcoming launch of customizable member pages on loyalty360.org.

50% of you do! Of the 50% who do not, only 14% plan to implement one within the next 12 months.

Does your company have a CSR (corporate social responsibility) strategy?

LOYALTY 360 ASKED ITS MEMBERS: Which social media tool is the most important initiative in your marketing strategies?

WHAT ABOUT THE OTHERS?LinkedIn: 31%Twitter: 26%Foursquare: 3%

40% say facebook


The mission of Loyalty 360™, the Loyalty Marketer’s Association, is to provide an unbiased, market-driven, “voice of the customer”

focused clearinghouse and think tank for all loyalty, incentive/reward, and engagement marketing needs, insights and responses.

LEARN MORE ABOUT LOYALTY 360 &

JOIN TODAY AT WWW.LOYALTY360.ORG

We’re here for you

or a resource provided. a partner found,

when you need a question answered,

Loyalty 360 brings you the best of the best in loyalty marketing

and supports your customer strategy needs. Some of the tools we offer include:

•a weekly e-newsletter “This Week in Loyalty”•opportunity to view and post white papers, case studies, and research•access to past webinars and Loyalty Expo presentations•latest news and events happening in the marketplace•“State of the Industry,” an interactive dialogue with seasoned industry leaders•access to new community-driven forums on loyalty360.org


FROM THE EDITOR

8

Reports seem to be mixed about the state of the economy but as we talk to you, there appears to be a wealth of success, opportunity, growth and desire for more. The need for more knowledge and support is evident. Between this issue, our newly launched website—now complete with

extensive member pages—and the upcoming 2011 Loyalty Expo, Loyalty 360

will be there, providing you information, insights on trends, best practices and

forums for you to learn and share ideas with your peers.

We’re seeing a variety of trends,but those that appear to be the most

significant: consumer behavior, being more customer-focused/centric and

mobile as a technology for the future.

Consumer behavior—guess what? Consumers don’t do what they say they’ll

do (not necessarily a revelation but….). The good news is while this behavior

appears irrational, it is predictable. Loyalty Reads on pg 18 highlights a must

read: Predictably Irrational and on pg 20, Barry Kirk shares his views on how

to keep loyalty programs fresh by playing to this type of consumer behavior.

It’s time to focus on customer centricity. We’ve talked about it, but how do

your efforts stack up? Take Kobie Marketings’ Benchmark Assessment on

page 41 to find out.

Mobile. Mobile is the communication vehicle of the future. We’ve spent a lot

of time thinking about mobile as a way to send coupons. But we haven’t even

begun to tap this medium for what it really can be: a real “in-the-moment”

communication platform; across all industries and all marketing efforts.

Bob Gold shares his thoughts on pg 32; for ten best practices when choosing

mobile technology, visit page 34.

As always, we want to hear from you. Please continue to share your insights,

topics you’d like to learn more about and your stories (your peers want to hear

from you!).

Sincerely,

Erin RaeseEditor-in-Chief

Loyalty Management

[email protected]

P.S. Be sure to register for the 2011 Loyalty Expo—this year March 20 – 22 at

the Hyatt Grand Cypress in Orlando, FL—Early-bird registration ends at the

end of the year. Looking forward to seeing you there!

Welcome new Loyalty 360 Members:

SAPRewardsNow

BarclayCard UKWyndhamMedallia

PaP SolutionsRiteAidMobius

CIS SolutionsGeorgia Pacific


CONTRIBUTORS

Bob GoldBob has over 15 years of research and exper-tise in “digital-to-human persuasion and inti-macy” that has resulted in changing behav-iors. He is currently CEO of Gold Mobile, and has used his behavioral knowledge to create a robust mobile CRM platform and behavioral methodologies that drive consumer engage-ment and loyalty.

Robert Carroll Robert Carroll is CMO of SDL’s Web Content Management Solutions in North America. SDL accelerates delivery of high-quality mul-tilingual content to global markets.

Render Dahiya Render Dahiya has served as Arroweye’s CEO since 2007. He previously spent nearly 20 years at FedEx Kinko’s as a founding member, helping to build it into a nationally recognized brand.

Carlos DunlapCarlos is the Practice Director of Loyalty Con-sulting at Kobie Marketing. He has spent the past 16 years cultivating a rich background in customer engagement strategies, direct marketing, business development, customer acquisition, customer loyalty and strategic marketing through several key posts.

Lee GallagherLee Gallagher, Director of Precision Market-ing Solutions, InfoPrint Solutions, has exten-sive experience in teaching marketers on how to deliver relevant and meaningful communi-cations at each customer touchpoint.

Annette Gleneicki Annette Gleneicki is Senior Director of Cus-tomer Success at Allegiance, Inc. She has almost 20 years of experience in designing large global VOC and EFM initiatives for For-tune 1000 companies.

Annette Gleneicki

Robert Carroll

Render Dahiya

Lee Gallagher

Carlso DunlapBob Gold


CONTRIBUTORS

Christoph Goldenstern

Robert KobekKelly Passey

Mary Naylor

Barry Kirk Sandra Zoratti

Christoph Goldenstern Christoph is the Global Vice President of Ser-vice Excellence at Kepner-Tregoe. He leads a global team of consultants who serve clients in a range of high tech industries. Prior to joining KT, Christoph provided business and marketing strategy to a host of business-to-business clients.

Robert A. Kobek Robert is the President of Mobius Vendor Partners. Prior to forming Mobius, Robert spent more than 20 years in the direct mar-keting industry and government. He success-fully launched two companies with core com-petencies in the teleservices industry.

Barry Kirk Barry Kirk is Maritz’s chief provocateur in the Consumer Loyalty space, always looking to challenge where we are and helping to poke, prod and cajole loyalty marketing to its next iteration, including leading consultative en-gagements on customer loyalty and applying the latest thinking in the design of new pro-gram strategies.

Mary A. Naylor Mary is a 20-year veteran of the concierge services industry, is founder and CEO of VIP-desk. Global industry leaders trust VIPdesk to enhance their brands through our customer care and loyalty programs.

Kelly Passey Kelly, Executive Vice President of Incentive & Loyalty Services at Access Development, has over fifteen years of experience in the finan-cial bank card sector with specific focus on in-centive and loyalty solutions, including seven years at VISA managing Incentive Marketing Services.

Sandra ZorattiSandra Zoratti, Vice President, Global Mar-keting Solutions at InfoPrint Solutions, is re-sponsible for transforming the company from a pure hardware centric organization into a communications-based solutions business.

LOYALTY FORUM: YOUR VOICE

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What makes you loyal to your favorite brand?

am loyal to those companies and or products that appreciate, recognize and value my relationship with them. I feel like I bring something to the relationship with patronage and referral and I appreciate being recognized and offered preferred privileges, added value or special pricings as my reward.

I am loyal to those who differentiate themselves by doing the right thing at the right time. Empowered to make good calls in troubled situations.

Simply having the best product and or best technology is meaningless long-term. Without a relationship, you’re only as good as yesterday.

Roger Blier Passport Unlimited

am loyal to a brand when quality is consistent. Over the years I have tried to switch some of my favorite brands to try something new, because they had more variety, lower price, etc...But I usually come back to the tried and true favorites, because of the quality and I know they will work for me. The funny thing is there are some items I am fanatic on staying loyal, there are others I skip around pretty easily.

Lissa Daniels

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here are many staple items I buy, and for the most part I am loyal to those products. I have always choose products that provide a good “value”, but recently have been impacted by recommendations from co-workers, friends, etc.

If the item is more of a commodity, I will probably focus more on price, but I am willing to pay more if I am getting a good deal. If I can get an additional coupon/savings beyond the price, I will use it.

The most recent Brand change I made is yogurt. I was a loyal name-brand purchaser (once in a while purchasing our own brand—the Giant Brand). Recently, after hearing some buzz (from fellow co-workers) about a new Greek yogurt, I decided to give it a try, and I love it! It is more expensive, but I think the value I get (because it is better tasting than the national brand), is worth the additional price.

Jerry Griffin Giant Eagle

he brands I remain loyal to are those that bring me consistent product quality and value at a reasonable price. They include food products like Quaker oatmeal, Old Spice, Subaru, HP, Sony and others. I pick up on new brands like Visio and Kindle if they bring something special. I tend to stick with Blackberry even though the technology is inferior to iPhone because of embedded information and knowledge of the device. I believe MAC is free from viruses and hackers but will not use it because I do not see it as user friendly compared to PC. In summary I choose brands and stay loyal because they fit my lifestyle and therefore make my experience as a consumer easier.

Les Deck

onsistently great quality at a reasonable price.

Joni Newkirk

I am loyal to those who differentiate themselves by doing the right thing at the right time.—Roger Blier

T

TC


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Let our experience work for you. carlsonmarketing.com | 763.212.4520

Senior Vice President of Loyalty and Strategic Partnerships , Wyndham Hotel Group

Robin Korman

14

Robin joined Wyndham Hotel Group as Senior Vice President of Loyalty and Strategic Partnerships one year ago. She has extensive loyalty experience in financial services and hospitality and is currently changing the face of Wyndham Rewards, the world’s largest hotel loyalty program with 11 brands and more than 6,500 participating hotels.

Previously, Robin was Vice President of Global Loyalty for Starwood Hotels & Resorts, where she transformed the Starwood Preferred Guest program from a “one-size-fits-all” point-accrual program to a customer-centric rewards and recognition program. She has also held senior marketing roles at JPMorgan Chase and Citibank building loyalty among credit card customers. Loyalty Management takes a closer look at the woman changing this brand—Robin Korman, SVP, Loyalty Marketing and Strategic Partnerships.

LOYALTY FORUM: BEHIND THE BRAND/PEOPLE

Wyndham has over 6,500 locations under its umbrella and its loyalty program, Wyndham Rewards, is only 6 years old. This must mean a variety of new initiatives and opportunity.

We are a relatively new player in the hotel loyalty space and we have been growing aggressively. We have 8 million active members who can rack up points quickly as we have the most brands (11) and the greatest number of hotels to earn and redeem points.

Research showed us that loyalty program members are skeptical that they can get to reward levels quickly. We are capitalizing on our competi-tive advantage—the most hotels to earn and redeem—by relaunching Wyndham Rewards with new posi-tioning based on reward attainabil-ity and with a new tagline, Rewards Right Around the Corner. We also have a new GPS-inspired creative look which showcases our hotel brands and shows travelers who easy it is to attain rewards because of our ubiquity.

Congratulations on the co-brand card launch. How has this been received?

Our new Wyndham Rewards Visa card with Barclays launched in July and has already exceeded our expecta-tions. We offer a card with no-fee and one with a $39 fee,

rich acquisitions bonuses of up to three free nights and an extra point/$1 when used at Wyndham hotels.

Wyndham ran a summer promotion via mobile. Have you found your customer base responsive to mobile promotions?

We are just getting into mobile. For travel, it is the wave of the future since most frequent travelers are not

sitting in front of computers all day. Like many loyalty marketers, we are trying different things, but the pen-etration of smart phones is in its in-fancy in the US (only about 20%) so it limits the ability to fully penetrate your customer base.

We have done more with mobile in China as that market is ahead of the US in adoption. We push pro-motions out through our members’ mobile phones and they can regis-ter right from their devices. We also send reminders texts to book and stay during the promotional period, tailoring the messages depending

on whether they have made a booking.

What’s your loyalty philosophy?Always treat the customer better than they expect

and, when you don’t, make it right. People appreciate be-ing heard. Loyalty is something you have to keep earning. Consumers are fickle and one bad experience with no resolution can change their allegiance.

Always treat the customer better than they expect and, when you don’t, make it right. People appreciate being heard.


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Share with us your last “ah-ha” experience as a customer.

My last “ah-ha” was realizing how much better cus-tomer service has become. Many companies are truly empowering their agents to solve (not just listen to) is-sues by immediately offering replacements or small goodwill gestures. Most customers just want to be heard and treated as if their issues matter.

One example of a company standing by their custom-er promise is 1-800-Contacts who offers a refund for un-opened contact lenses. I recently called about old lenses I found in a drawer. The agent informed me they were 8 years old, laughed, and then gave me a full refund—and even credited me for the return shipping!

What one experience has had the most affect on your life / most shaped your life?

Coming out of college with a psychology degree does not qualify you for too many things so I took a job work-ing in Japan teaching culture and language for 18 months. I was fascinated with the cultural differences and the

wacky advertising which led to my decision to get an MBA in international management, and then to start working in advertising agencies. Unfortunately, I started after the era of the three martini lunch.

If you could have dinner with anyone (past or present) who would it be?

Jerry Seinfeld. I love the way he shows the insanity of customer service situations such as the car rental compa-ny that knows how to take—but not hold—the reservation, the horror of air travel and the frustration of waiting for a table at a restaurant, or buying soup from a surly deli guy. His show should be the “what not to do” for any customer-focused organization and a whole night of these insights

would keep me laughing forever! (and give me material for future articles!)

If you weren’t working for Wyndham, how would you be spending your time?

Traveling to exotic places using my points and miles.

What can we expect from Wyndham in 2011?We just redesigned our logo and creative look which

we think will break through the clutter.

We recently relaunched our website with better navi-gation and new redemption options such as airline tickets and tickets to sports, music and theatrical events. We are exploring new opportunities in social and mobile so look for some new things to happen there.

What’s your advice for a novice loyalty marketer?

Data is your friend. Many creative marketers are afraid of numbers but data is the way to truly understand who your best customers are—sometimes your most fre-quent customers are not your most profitable (they are often the deal seekers) and you need to understand the difference. Creatively, just try things (but always have a matched control group). You never know what will work!

My last “ah-ha” was realizing how much better customer service has become. Many companies are truly empowering their agents to solve (not just listen to) issues.


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Robin and her team; Enjoying Halloween festivities (right)


Ask the Experts

Q&ACouponing, a strategy to build customer loyalty? Q:

Couponing can encourage a prospect to try a company or product. But you may be attracting a customer that will always be price-sensitive, and will either wait for your next coupon, or be swayed by a competitive coupon.

To build that one-time purchaser into a long-term customer, you should ideally deliver some other benefit than price (unique product, fabulous customer service, unique add-on services, etc.).

If the only communications you have with your clients are your sales or coupon advisories, you are training your customers to wait for your next sale or coupon.

But if your email retention series of messages also contains other types of communications—info on how to get more value from your products, case studies on how other customers are using your products, copies of articles giving your company/product positive reviews, etc.—you can help emphasize your unique benefits other than price (and help your customers see your key points of differentiation, emphasize the value of your products, etc.).

Sending an occasional “private sale” notice that is available ONLY to your customers can help build loyalty. Sending a special offer for volume purchases at a special price can also prevent competitive inroads, by effectively taking your customer out of the market for consumable goods for a period of time.

Consumers need to be given a benefit for consistently shop-ping with you. This doesn’t have to be a form of discount, but it generally has to play a part. Whether this is a coupon, a vouch-er, an instant reward, an offer sent by email or sms or purl, is neither here or there.

The other point is that the reward or benefit, is of minor im-portance. The more important point is that any offer or per-sonalised message needs to be linked to a database of cus-tomers and transactions—otherwise the offer, regardless of the mechanic, is a blunt instrument that you can’t target and truly prove the benefit. If you do have a database of customers AND transactions, the opportunity is limitless, regardless of the mechanic vehicle.

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LOYALTY FORUM: Q&A

A: A:

—Karen J. MarchettiInternet & Direct Marketing Consultant & Copywriter, SVP Client Services , SMAresource.com & ResponseCoach.com

—Andy WoodOwner, GI Insight

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To build that one-time purchaser into a long-term customer, you should ideally deliver some other benefit than price like fabulous customer service.

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ •NOVEMBER 2010 17

Building loyalty through coupons is a formidable challenge today when

the numbers of the traditional coupon clippers are on the wane. The likes of those can be pri-marily found only during the holiday season, actively hunting for a good bargain.

1. Multichannel redemption: Tactics such as use physical coupon codes online or use e-coupons at stores.

2. Integrate e-coupons with loyalty cards: Customers should be allowed to tag their loyalty cards with with e-coupon codes. So, rather than carrying coupon clips, shoppers can use their loyalty cards to get coupon discounts as well.

3. Integrate with BI: Dig deep to understand your customer segments, communities, local events etc to derive a targeted cou-poning strategy.

Couponing is definite-ly a way to build trial

and gain long term customers. I would look at the category you are thinking of couponing and un-derstand the loyalty breakdown between brands and where your brand falls. That will have an im-pact on your results and give you a direction for which tactic and value will work. Some tactics like direct mail and checkout cou-poning using loyalty card data are great because you can target non-loyals. Some other tactics are much more broad and you can end up couponing loyal con-sumers that were already going to buy the product.

Coupons are a terrific method to build loyalty of

your brands. Tactics include in-pack coupons (if feasible based on packaging), in-store account specific, direct mail, and many on-line coupons methods (corpo-rate website and customer specif-ic). Especially, in these economic challenging times, coupons are a great way to increase loyalty and eliminate brand switching.

A: A: A:

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—Shijo ThomasBusiness Analysis, Software Paradigms International

—Brad WenselSenior Program Manager, Catapult Marketing

—Darlene MoriscoSenior Account Executive, Collaborative Marketing Group

Coupons are lazy marketing and they train the consumer to commod-

itize the product, store or service. It is well regarded in brand management

that to entice a consumer to try a new brand the marketer needs to offer an ‘equity enhanc-ing’ incentive.

There are two key points. 1. A new customer needs an incentive or

reason to try the unfamiliar brand. Loyalty comes from other things, so coupons to create loyalty is counter intuitive.

2. Coupons are not equity enhancing. In fact they destroy perceived value.

Discounting has its place in the overall marketing strategy but using coupons to de-velop loyalty is not appropriate.

Couponing existing customers does not build credible loyalty to a retail store, nor a product. Loyalty comes when the relationship is elevated past the transaction and taken to

“sustained emotional preference.” By definition

a coupon is a monetary tactical tool of limited time value. There is very little if any positive emotional attachment.

Our contention is loyalty isn’t a thing (cou-pon) but a state (feeling or emotion) and how you move to that requires emotional related tools. It is the way the consumer is treated, how they feel about the store, the staff, the surroundings, the product, the displays, etc. Do they feel valued? Rewards rather than dis-counts, for example are closer to the emotion-al side. Being “rewarded” carries a completely different connotation that can be traced back to early childhood.

But rewards are just a small part of creat-ing loyalty. There are a lot of other factors that go into developing a sustained emotional pref-erence with the customers. L

A:

—Peter D. Morris SCSM, SCMD, CLSCEO, Greenstead Group

Loyalty comes when the relationship is elevated past the transaction and taken to “sustained emotional preference.”

Customers should be allowed to tag their loyalty cards with e-coupon codes. So, rather than carrying coupon clips, shoppers can use their loyalty cards to get coupon discounts as well.

CUSTOMER EXPERIENCE STRATEGY: The Complete Guide from Innovation to Execution by Lior ArussyFebruary 2010 | Strativity Group, Inc.

Much have been written about the importance of customer experience. But how do you actually develop and

launch such strategy? The stories of the Ritz Carlton, Disney, Southwest and Zappos are very popular among cus-

tomer advocates. But how do you develop customer experience in your company?

These are the two core questions Customer Experience Strategy: The Complete Guide from Innovation to Execution

was designed to address. Following a close loop blueprint, the book delivers a ready to implement recipe that turns customer experience into a man-

ageable endeavor. Lior Arussy is the founder of Strativity Group, a global customer experience research and consulting firm with clients such as FedEx,

Capital One, Nokia, Crowne Plaza Hotels and Merck. Utilizing the successful methodology developed by Strativity, the book details the steps to take

and the pitfalls to avoid as you seek to differentiate your business based on customer experience. With examples of customer experience in consumer

environment, business to business relationships, employees as customers and the citizen experience, the book provide applicable guidelines to diverse

customers’ relationships.

From setting up the strategy to innovating the experience at every touch point, the book provides in depth guidelines from real time experience of

the author deploying these strategies at corporations around the world. Hot issues such as developing the business case and executive sponsorship

are receiving special attention in the book with practical ideas how to address these classic challenges. Especially fascinating is one of the case studies

detailed in the book in which a utility company transform their performance from a negative 30 net promoter score (NPS) to appositive 54 NPS in 12

months. For those struggling with moving the satisfaction needle, this and other case studies will be very useful.

Customer Experience Strategy is an indispensable tool for every manager serious enough to actually move from talking to doing. For managers who

attempt to transform their organization to deliver consistent, delightful experiences, the book will become a critical tool for success.

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Loyalty ReadsEMPOWERED: Unleash Your Employees, Energize Your Customers, And Transform Your Businessby Josh Bernoff and Ted SchadlerSeptember 2010 | Harvard Business Review Press

You know it’s happening within your organization. Your people, armed with cheap, accessible technology, are

connecting with customers and building innovative new solutions. But who are these creative problem-solvers? How can you be one? And just as

important—how can you lead them?

We call them HEROes: highly empowered and resourceful operatives. Your company needs them because in the age of Twitter, iPhones,

Facebook, YouTube, and an ever-evolving torrent of Web information, your customers now step up to the counter armed with more data and access

than ever before, and in many cases, your company is overmatched.

In Empowered, Forrester’s Josh Bernoff—co-author of the pioneering book Groundswell—and Ted Schadler explain how to transform your

company by unleashing the mighty force of these HEROes. Like John Bernier and Ben Hedrington at Best Buy, who built an army of 2,500 tweeting

employees to reach out to customers online. Or Ross Inglis, who tapped into Internet computing resources to open an entirely new customer channel

for Thomson Reuters. Or John Stadick, who equipped 600 sales staff with iPhones and boosted profits at his construction rental company.

The truth is, one in three of your information workers already use easily accessible technologies that your company does not sanction.

Empowered gives you a prescription for embracing this covert innovation. At the heart of a HERO-powered business is a new pact between these

critical employees, company managers, and the IT department: HEROes build new solutions to meet customer needs, management sets clear rules

while encouraging more experimentation, and IT expands its role to both support and secure these business solutions.

LOYALTY FORUM: BOOKS


Loyalty Management™ • LOYALTY360.ORG 19Loyalty Management™ •NOVEMBER 2010

TRUST AGENTS: Using the Web to Build Influence, Improve Reputation, and Earn Trust by Chris Brogan and Julien SmithApril 2010 | Wiley

PREDICTABLY IRRATIONAL: The Hidden Forces That Shape Our Decisionsby Dan ArielyApril 2010 | Harper Perennial

There’s no question that the Internet has changed

the way we do business—especially when it comes to

marketing. Consumer environments are short on trust

and populated by consumers who are cynical, savvy and

informed. Though it’s easier than ever to reach your cus-

tomers, it’s less likely that they’ll listen. Today, the most

valuable online currency isn’t the dollar, but trust itself.

At the same time, social networks and personal

connections have far more influence on consumers

that your marketing messages ever will—unless your

business knows how to harness them. In Trust Agents,

two social media veterans show you how to tap into the

power of these networks to build your brand’s influence,

reputation, and profits.

Trust agents aren’t necessarily marketers or sales-

people; they’re the digitally savvy people who use the Web to

humanize businesses using transparency, honesty, and genuine

Do you know why you still have a headache after taking a one-

cent aspirin, but why that same headache disappears if the aspirin

costs fifty cents? Do you know why recalling the Ten Command-

ments reduces people’s tendency to lie, or why honor codes are

actually effective in reducing dishonesty at the workplace? Do you

know why, after doing careful and extensive research on which car

to buy, a random meeting with someone who had an awful experi-

ence with that car changes your decision? Why do we make deci-

sions contrary to our better judgment? What is better judgment?

Predictably Irrational challenges us to ponder these questions

and demonstrates how irrationality manifests itself in situations

(often very peculiar and hilarious situations) where rational thought

is expected. We all succumb to irrationality, it s about time we find

out how it affects our daily lives in a significant way. In this astound-

ing new book, groundbreaking in scope and totally original, Dan

Ariely cuts to the heart of our strange behaviors and presents out-

standing material that will keep every reader transfixed.

Predictably Irrational comes from Dr. Ariely’s work as a behav-

ioral economist, but it’s not for economists. Well, it is, but mainly

to the extent that it can help them the same way it can help anyone.

If the behaviors that skew our judgments were random or sense-

less, we’d be hard put to sort them out and make better decisions.

But research has shown that our irrationality is, in fact, systematic.

relationships. As a result, they wield enough online

influence to build up or bring down a business’s repu-

tation. This book will show you how to build profit-

able relationships with trust agents, or become one

yourself.

In an online world defined by its transparency, be-

coming a trust agent is no easy task, but once you’ve

established your reputation, you can build influence,

share it and reap the benefits of it for your business.

When you’ve learned a trust agent’s secrets, your

words can carry more power and more weight than

any PR firm or big corporate marketing department.

Learn to use the power of the Web and social net-

works for your business now. Trust Agents gives you

all the tools and strategies you need to do it the right

way—honestly, effectively, and profitably.

People will make the same types of mistakes over and over, in a predictable

manner, because the behaviors have structural origins. So recognizing them

and understanding them offers us a way to do better. And that’s the aim of

this book: to leave you with new knowledge of human nature, derived from

a wide range of scientific experiments and findings, that will help you make

better decisions in your personal life, your business life, and in the choices we

all need to make about our collective welfare.

Two social media veterans show you how to tap into the power of these networks to build your brand’s influence, reputation, & profits.

This sly and lucid book is not about your grandfather’s dismal science. Ariely’s trade is behavioral economics, which is the study, by experiments, of what people actually do when they buy, sell, change jobs, marry and make other real-life decisions…[Predictably Irrational is] a concise summary of why today’s social science increasingly treats the markets-know-best model as a fairy tale.

—David Berreby, The New York Times

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FEATURES

Keep Them Guessing: Why Loyalty Programs Need Randomnessby Barry Kirk, Maritz Loyalty

redictability is reassuring. It’s also totally boring. Think about it—when did you last you call IHOP to see if they still served pancakes? Or had any doubts whether the fall TV lineup would include a reality show where a houseful of beautiful people competes for televised validation? Some things are just a sure bet. The upside of the predictable things in life is that we don’t waste any brain power worrying about them. The down side is…we don’t waste any brain power paying attention to them, either. For anyone trying to influence human behavior, that’s a problem.

Game designers have intuitively known this for centuries. Randomness, or “chance,” is woven into most great game experiences, through the draw of a card or a roll of the dice. Randomness is novel, and novelty always gets our atten-tion and keeps us interested. The trick, of course, is balancing the random with the predictable to create a compelling experience, but not a frustrating one. As Carnegie Mellon professor and game designer Jesse Schell puts it:

“Risk and randomness are like spices. A game without a hint of them can be com-pletely bland, but put in too much and you overwhelm everything else.”

But game designers aren’t unique in their ability to understand how humans think. Thanks to the growing fields of neuroscience and behavioral economics, loyalty marketers now have a larger window into how human beings connect with what’s important to them. We’re coming to understand that humans are more than rational. Our brains are wired for social experience more than any others. We are biologically driven to engage in competition and raise our status amongst peers. We enjoy playing and learning through play. Rewards motivate and intrigue us. We desire to master skills, and we set goals to achieve that mastery. When we find these elements in an experience, we “play” harder, lon-

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ger and with more enthusiasm. We become more involved and more engaged.

Through this new lens, we’re also learning that typical loyalty programs are stale. Marketers are focusing too much on structuring programs for a mythical consumer who only thinks rationally about the program value proposition. For instance, marketers using this “rational consumer model” are tending to react to the current economic con-ditions by turning their loyalty initiative into a dis-count program. Marketers start out thinking they need to be more aggressive in offering discounts. With the rise of so much “social couponing”—just think about Groupon.com and its imitators—the discount offer is ev-erywhere now, and essentially it deval-ues the brand. It’s a zero-sum game, and brands are going to continually have to up the ante to keep peo-ple engaged at that level.

As marketers we also misguidedly pride ourselves on creating rules struc-tures that are fair, in part, because they are highly predictable—members know ex-actly how the program works, how to earn their points, and when they can redeem for a reward. Unfortunately, this focus on the rational and predictable means we’re also missing major opportunities for engagement, since it’s really a recipe for asking your members to put their brains on auto-pilot.

The model of “rational economic benefit” is not the right strategy for building true loyalty because it’s based on a very limited understanding of how the human brain responds to experiences.

Neuroscience studies are helping us under-stand that all human beings are both rational and emotional, and that consumers attach more meaningfully when there’s an opportunity for an emotional connection with the brand or program. This emotional connection may take the form of a chemical—the neurotransmitter called dopa-mine – being released into the body which trans-lates into a feeling of pleasure. Studies show this same “pleasure chemical” is released when we receive rewards. We now also know that people experience the same feeling with other program attributes that are often underdeveloped in a loy-

alty program, such as status, social interaction and randomness.

The impact of randomness in this chemical in-teraction is that unpredictable wins produce the greatest pleasure response in the human brain. Neuroscience shows that unexpected rewards have a heightened emotional effect, compared to the rewards participants know are coming. The effect applies even when the extrinsic value of the reward is less than the expected reward. This means “surprise and delight” isn’t just a good idea; it’s a smart financial choice for a loyalty program. When you bring a sense of randomness into a loyalty program, you can provide less expensive

rewards (because the intrinsic value is greater) and receive the same engagement benefits.

Unpredictability also equals attention, as it is part of the deep programming of the human brain to focus on the novel and to seek patterns even in those experiences that are truly random. Think about it—if you were a busy caveman hunting on the savan-nah, you needed to quickly shift your fo-cus to anything unex-pected on the horizon because of the possi-

bility that it might be something intent on eating you. Our modern brain retains that tendency, find-ing itself drawn to novelty and attempting to find patterns in almost everything. This is why we take note of the sudden death of a celebrity, and then wait for two more well-known people to pass away so we can declare with erroneous certainty, “See, celebrities always die in threes.” And while our re-sponse to it is not always rational, randomness is a very effective way of telling the brain to wake up, pay attention and try to figure out what is happen-ing in the moment.

A random element can be applied to literally any part of your program. Charter Communica-tion’s Live It With Charter program includes ran-dom redemption periods for which members only receive a 24-hour notice each month. Starbuck’s loyalty program is well known for sending loyalty program members unexpected direct mail cou-pons for new product trial and discounts. And upstart location-based service Whrrl has recently launched their Society Rewards loyalty program

Neuroscience shows that unexpected rewards have a heightened emotional effect, compared to the rewards participants know are coming. This means

“surprise and delight” isn’t just a good idea; it’s a smart financial choice for a loyalty program.

continued on next page »


Loyalty Management™ • LOYALTY360.ORG22

where the rewards are structured as “prizes of chance” that members might win by participating in engagement behaviors.

Even in Foursquare (a more established geo-location service), the aspect of randomness can delight and surprise. Say I visit my neighborhood pub and check in. I take a minute to see who’s visited, and how recently. The pub’s e-marketing team sees that I’m back and tweets me the details on today’s special, with an offer to enjoy a bever-age on the house. Using Foursquare, the pub can deliver random experiences that don’t cost more than a few bucks. In turn, I’m a happy patron who is thrilled to come back again and again to vie for pub “mayorship” and the mere possibility of an un-expected reward.

However you choose to introduce a random el-ement into your program, the best approach is to adopt a test-and-learn methodology to determine where you can have the optimal impact on behav-ior. Keep in mind the need to occasionally switch things up—ironically, even randomness becomes boring if it starts to feel too predictable. It’s also important not to overdo it—randomness should be an element of your program, but not the entire program since the predictable also serves a func-tion in giving the participant’s brain a mental mod-el of the program it can reliably attach to.

Each brain is unique in how it responds to stim-ulation, but there are clear advantages in looking to neuroscience to help improve loyalty marketing initiatives. When you shift your program’s sole fo-cus from providing extrinsic rewards—the “stuff” participants get with points—you may be amazed by the world of options available to create a more intriguing program experience. The mixing of in-trinsic wins—such as the “pleasure chemical” ex-perienced from a surprise—with more traditional extrinsic rewards will strengthen brand marketers’ ability to build both lasting and meaningful con-sumers connections.

Keep in mind the need to occasionally switch things up—ironically, even randomness becomes boring if it starts to feel too predictable.

Keep Them Guessing: Why Loyalty Programs Need Randomness (continued)

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Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ •NOVEMBER 2010 23Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ | November 2009 9

Loyalty. Reinvented.

Loyalty programs are a strategic asset. To capitalize on them requires going beyond rewards. First Data provides intelligent, data-driven loyalty solutions that provide insight to make your loyalty program more effective. Utilizing state of the art analytics, First Data enables you to understand your customers, predict purchasing behavior and maximize revenue. First Data is uniquely skilled at providing our clients with more relevant and valuable rewards for their customers, increasing customer acquisition and retention and creating stronger relationships.

To learn more visit firstdata.com

©2009 First Data Corporation. All rights reserved. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.

Loyalty Management™ | November 2009 9

Loyalty. Reinvented.

Loyalty programs are a strategic asset. To capitalize on them requires going beyond rewards. First Data provides intelligent, data-driven loyalty solutions that provide insight to make your loyalty program more effective. Utilizing state of the art analytics, First Data enables you to understand your customers, predict purchasing behavior and maximize revenue. First Data is uniquely skilled at providing our clients with more relevant and valuable rewards for their customers, increasing customer acquisition and retention and creating stronger relationships.

To learn more visit firstdata.com

©2009 First Data Corporation. All rights reserved. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.

24

t is very hard for me to imagine a discussion surrounding customer care is really necessary. But for some reason all businesses swat at the issue as if it is a breaking story on a major news network.

Concentrating on what it takes to ensure a pleasant customer vacation experience is a natural part of busi-ness, at least I think it is. But there are other areas we touch, or should touch, our owners and guests.

Often “care” is confused with service, which is, no doubt, a part of caring for a customer. Caring for a cus-tomer goes beyond customer service. Customers are assets that should be protected with every fiber of the company’s being.

First, the definition of a customer lies in the attitude of the beholder. Dictionary.com defines it as:cus·tom·er [kuhs-tuh-mer] –noun 1. a person who purchases goods or services from another; buyer; patron.2. Informal. a person one has to deal with: a tough customer; a cool customer.

I will throw in a 3rd definition: Those who provide goods or services on behalf of others. syn. Employees.

For the intellectuals among us, how hard is this to understand?

by Robert A. Kobek, Mobius Vendor Partners

The Care and Feeding of a Customer

Adam Smith conjured up the notion of supply and demand in his 1776 publication The Wealth of Nations and Theodore Levitt bolstered the argu-ment in his 1960 Harvard Business Review mani-festo (Marketing Myopia) “that companies should stop defining themselves by what they produced and instead reorient themselves toward customer needs.”

Adam Smith’s premise was that increasing rev-enues and decreasing expenses results in a profit. It was Benjamin Franklin that took that premise and installed it into what we know as capitalism in the United States.

If the premise that it takes five times the re-sources to gain a new customer than it does to keep one is correct, the following information is meant to establish a new or renewed attitude toward timeshare owners, guests and employees.

If a timeshare tour hovers around $500 then it seems logical to point at least $100 per customer to take care of their needs. Add to that the cost of the

sale and a light bulb should go off in the head of every property manager in timeshare that the bud-get dedicated to the care and feeding of an existing customer is most likely far too low.

And, there are efficient tools that can be used to continue to touch customers who cost nothing, or very little at all. Most fall into the category of com-munications. Talk to them, and let them talk back. Ask questions and respond to the answers, provide information, good information, not “so what” stuff.

The vehicles are there; mail, phone, internet, and on site interaction should all meld with the vacation experience to create the warm fuzzy for our customers that will decrease default rates, in-crease visits, decrease complaints and increase compliments. What could be wrong with intelli-gent and planned efforts to find out what they are thinking instead of talking to ourselves about what will and won’t work?

As a matter of respect for this forum, a com-mercial about a product we offer is inappropri-

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Once a customer has been acquired, the key is to keep him. A company retains its customers by delivering on its value proposition, so that the customer has no need to look elsewhere. Therefore, ensuring high-quality service is fundamental.

ate; however, it is a great example. Our product can touch every owner, guest and exchanger that visits your property, and is a proven profit cen-ter that has its focus on customer care and experiences.

Yet at times we are informed, “It is not in our budget”. Since I am no rookie to sales, the “budget” objec-tion is a very weak objection and ev-ery sales professional knows that is a blow off.

Or, if it is a real issue, it is more often than not the musing of that person who only looks at expenses and forgets there is revenue opportu-nity associated with caring for a cus-tomer. In caring for a customer the budget issue is a weak excuse for not wanting to change, alter or delete a process that most of us inherited and figure that since it is a legacy, it has some place of honor. We get bolted to outdated processes and it just seems like too much hassle to change them. There is so much affinity to the old ball and chain that we continue our old ways of treating customers with policy rather than service.

A result is a surprise issue that could have been resolved for very

little money and becomes a larger problem with a non-budget price tag attached that costs far, far more. I know about this phenomenon be-cause we provide other services to fix things that could have been avoided.

However, think about the ques-tion and answer. Why would you not want to take every opportunity to touch your customers? Each time you do, you gain loyalty, and every time they come back, they make you money. As a possible unintended consequence, the more pleasant the experience, the greater the likeli-hood they will refer a friend or fam-ily member.

In the marketing and sales of timeshare today, the collapse of end loan financing forced us to kick up,

“owner referral” programs. Offer the owner something of perceived value and they will inundate us with the names, addresses, phone numbers and email information of all kinds of relationships.

More importantly, the success of an owner referral program is wholly dependent on the owners start to fin-ish experiences. If they love it, they will refer; if they like it, they might



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refer; if they hate it, they won’t refer. (The same is true in ensuring main-tenance fees and other payments are made in timely fashion).

Today the acquisition cost for new business is the same. There is no decrease in the per tour expense, just fewer tours. The decrease in the variable side of the ledger is be-cause we are selling less, but the cost per sale is the same. There is no increase in profit, just holding our own until things get better and the bankers tell us it’s ok to go back to the old ways of marketing and selling.

And, the owner (customer) is getting creamed with offers that will eventually lead to a dry well. While some-what valuable today, there are a finite number of owners (4 million +/- depending on who you ask).

The proper care and feeding of a customer will produce referrals, in-crease traffic at a resort, and cause money to flow. It minimizes com-plaints and creates efficiencies in areas you may never have thought of (like savings on your toll free lines).

Try these “rules of thumb” as a guide and add them to what you al-ready have to ensure the proper care and feeding of your customers.

•Treat employees like customers. There is a direct correlation be-tween employee satisfaction and service delivery. Employees who like their jobs will better serve customers and stay on the job longer thereby decreasing cost and increasing revenue.

•Satisfied customers are not nec-essarily loyal customers.

•The vacation experience begins before check in. The tone of the experience starts in your call center when the owner, exchang-er or guest calls to inquire and/or make a reservation. If your man-date is to “save on seconds”, the caller knows and will leave the experience with a lukewarm per-

ception, at best.•Dress well, everywhere, every-

one, every time. The next per-son to call you or walk in the door is a VIP. Get rid of clutter, expect everyone to have shined or new shoes regardless of their function and there is never an acceptable time when property and personal hygiene should not be impecca-ble. Be mindful of language and grammar.

•It is the little things. The devil is not in the details, the answers are in the details.

•Quality is a path, not a result. Only you can define the quality standards and only you can in-sist they be met and only you can decide on the commitment you make to maintain and grow on the quality path.

•Document all your processes.

The Care and Feeding of a Customer (continued)


If you don’t know how, find someone who does. Just as you can’t tell the players without a program, you can’t know what needs fixing unless you identify the gaps in service.

•Measure, consistently, con-stantly and regularly. Do more of what pops up as

being good and less of what is bad. Ask genuine questions regularly and consistently. Act on the answers.

•Customers and em-ployees are the center of your universe. All good things sprout from them and all bad things fester from them.

•The speed of light is 442,000,000 miles an hour. Coincidently that is the same speed bad new travels.

Good news moves at the speed of a snail relaxing.

•There are no shortcuts to care. Every time you think there is, you end up breaking a rule and you will be reminded why it was a rule in the first place.

•Mind your etiquette. Answer every email and return every call. Be responsive. Learn to write in business speak. Teach your employees to write in business speak. Please and thank you go a very long way. And, finally, none of us knows it

all. Keep learning, keep caring and stop talking to yourself. Instead of swatting at the issue do something. Stop trying and take action.

In the words of Charlie Weis, head football coach of Notre Dame,

“yesterday is over, tomorrow may not come, there is only today”.

The notion that; “if it ain’t broke, don’t fix it” is old, tired and wrong. Imagine the cave dweller who slipped on a rock and figured out that he could invent a ball bearing, then alas, the wheel. Neither of them budget items.

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owever given all of the time, money, and attention that is being spent to drive customers to action—what are we doing with our customers once we actually have them where we want them—what are we doing at the “moment of truth”? When a marketing campaign is successful, and customers reach out and engage with our brand, the first (and often times only) interac-tion they have with us is via our customer contact center. Does the experience that your customer has with your brand continue through their experience with your contact center?

Does the promise of your brand match the reality of the cus-tomer experience?

Brand Experience Management: Aligning Your Brand Promise and Ultimate Customer Experience Into the Contact Center

The old adage about first impressions making lasting impres-sions still rings true today. Every interaction a consumer has with your company is so much more than just an information session or sale, however all too often very little attention is paid to how the brand experience continues for the customer once they leave your store or navigate off of your corporate website.

The bottom line is that no matter where they are or what the venue, every interaction your customers have with your brand is a unique marketing event. Every impression that they have—from the window display in your retail outlet at the local shopping mall to the contact center representative who helps them when they call your toll-free number to what they read on your corporate Facebook wall—is a branding experience.

In order to be effective, a brand strategy must extend all the way to the most critical, personal point of contact: when a cus-tomer or prospect calls, sends an email, or initiates a chat to find out more. This personal contact is what is going to determine whether your customer continues to remain loyal to your brand, or whether they transfer allegiances to a competitor—a 2007 Ac-centure study revealed that 50% of customers who switch brand allegiances do so because of poor contact center experiences.

The Customer Contact Center: Your Branding Moment of Truthby Mary Naylor, VIPdesk

Is what you deliver—your ultimate customer experience—aligned with your brand promise?

Six Strategies for Aligning Your Brand Promise and Ultimate Customer ExperienceGive your customer service team a test drive.

Have you ever called your own toll-free number? I’m sure you have heard sample calls, however every marketing execu-tive should call their own toll-free number at least once. When you do, call from your home or cell phone, preferably in the evening or on a weekend. Don’t call the “employee hotline”—call the number which is printed on your packaging, published on your website, and promoted in your advertising and direct mail. Then when someone answers—be a customer. Ask a few questions, then make a purchase, and see what happens next. Chances are, you will be very surprised at the results.

Listen to the voice of the customerIf you aren’t making decisions based on customer feed-

back—how are you sure your decisions will resonate with your customers? Your customer service and quality assurance teams are already capturing the voice of your customer with every interaction—and trust me, they will look forward to shar-ing it with you. Every member of your marketing and executive team should review customer feedback on a regular basis—ideally weekly—in order to gain strategic insight into what your customers are saying about your brand.

Build a customer-centric corporate cultureDo you truly empower employees to act as champions

for your customers, or is customer-centricity merely an af-terthought? A customer-centric corporate culture must be embedded throughout the organization—not just in the con-tact center. Southwest Airlines is a company that empowers its employees to go the extra mile to ensure customer satis-faction—employees have been known to even give their own companion tickets to passengers they have never met before,

s much as $40 billion/month is spent in the U.S. on marketing—to build brand recognition, differentiate brands from their competitors, and ultimately win sales. Much of this well-honed and refined corporate branding, marketing and advertising—ranging from more traditional outreach such as newspaper and television advertising to online advertising and social media marketing—is being implemented to drive consumers to take action. We want consumers to visit our stores and websites, to call us and e-mail us, and ultimately spend money with us.

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to ensure that they make it to their final destination. The result? 2009 was South-west’s 37th consecutive year of profitabil-ity.

Replace your call center agents with brand advocates

Does your front line have a true pas-sion for your brand and what it stands for? Your contact center is your front line—the first, and oftentimes only, contact that your customers have with your brand. In order to deliver upon your brand promise, your front line must have not only a clear understanding of, but authentic passion for, your brand. Passionate contact center agents are true advocates of your brand—both serving your customer’s immediate needs and leaving a lasting impression that will strengthen customer loyalty and truly differentiate your brand from that of your competitors.

It’s the little things that make a brandDo you think of the little things that

give your customers a complete brand ex-perience? If you spend hours debating the font used in your corporate email signa-ture, take a few minutes to think about the little things that add up to really express your brand. Such as hold music. I recently called the toll-free number of a very trendy retailer in order to purchase some back-to-school clothing for my niece—and spent several minutes listening to smooth jazz while on hold. This was a very different mu-sical experience than the latest Lady GaGa

hit (extremely popular with the retailer’s tar-get demographic) heard by everyone pass-ing within 25 feet of the same brand’s retail outlet in the local mall.

Mix up your metricsIs your contact center being evaluated

on metrics conducive to a positive brand ex-perience? Often, contact centers measure success based on key performance indica-tors (KPI’s) such as average speed of answer,

average handle time, cost per contact, and first contact resolution. While these metrics are certainly indicative of a contact center functioning as a well-oiled machine, they aren’t necessarily those that are going to

provide the ultimate brand experience.For instance, if your agents are being

measured—and potentially compensated—partially on average handle time (AHT), they are literally being rewarded for getting your customers off of the phone as quickly as they possibly can. Even if every call ends with “Is there anything else I can help you with?” they don’t really mean it. They want to end the call and move onto the next one. In contrast, there is a direct correlation between first contact resolution and over-all customer satisfaction. A simple shift in focus from AHT to that of first contact resolution can dramatically shift the overall brand experience your contact center pro-vides.

Memorable Customer Experiences Produce Memorable Results

It is hard to turn your customer service center into a branding powerhouse over-night, especially if you have historically looked at your contact center as a cost center, and not the strategic business unit that it can be. An enterprise-wide shift to a customer experience more in line with your brand promise, versus a customer ex-perience more in line with a contact center that operates like a well-oiled machine can be a challenge, as this is a dramatic shift in mindset for many companies. However time and time again, a dedication to creat-ing memorable customer experiences pro-duces memorable results—just ask South-west Airlines. L

Does your front line have a true passion for your brand and what it stands for?

30

ention the iconic band, The Grateful Dead, and most people think about peace, love and rock ‘n’ roll. What should also come to mind, however, is the band’s indisputable best-practice lessons about building a base of devoted fans. Well before the advent of the Internet and viral marketing. The Dead were visionary geniuses in the way they built community and spearheaded the concept of social networking to create a solid base of loyal, devoted fans.

It’s all about the communityWe all want to feel a part of some-

thing, to connect with others that share common interests. And for the evangelic base of Grateful Dead Fans, known affec-tionately as “Deadheads,” being a part of the band’s familial community drives their emotional connection to the band. For these loyal fans, it’s not just about listening to the music, it’s about being part of the experience. For hours (even days) before Dead shows, fans would fill the parking lot dancing, celebrating and interacting with one another. Don’t know each others’ names? Doesn’t mat-ter. Deadheads share an immediate and intimate bond through which friendships are born and memories are made. And through these experiences, fans’ devotion to The Dead inten-sifies.

Because of this strong, dynamic community, The Dead has not only sold out shows even in the toughest of economic times, but they have achieved this primarily via word of mouth. There’s no need (and never has been one) to advertise a Grate-ful Dead concert. Once the Deadhead community hears about upcoming concerts, the news travels like wildfire (even before the Internet)—with shows typically being sold out in the mat-ter of minutes. And for those fans unable to score that sought-after ticket, no worries. Most will just head to the parking lot before the show to soak up that part of the experience.

Content is kingPeople unfamiliar with the Dead’s “content marketing”

value proposition may also wonder why the band has always allowed their fans to tape record their shows and then freely distribute these bootlegs.

Dead-On: Grateful Dead Has Taught Us So Much About Customer Loyaltyby Erin Raese, Loyalty 360

Unlike the vast majority of bands that banned recording at concerts, the Dead encouraged fans to tape and then dis-tribute their legendary live shows. In fact, they didn’t just en-courage fans to record their legendary live shows. The band proactively set up “taper sections” where fans’ equipment could be set up for the best sound quality. Their belief was simple (yet radical): If we give our music to 10 people, and they give it to 10 people who give it to 10 people and so on,

soon everybody knows about us and our reputation and value as musicians, artists and creators are enhanced.

What’s more, this broad, genuine ex-posure led to millions of people wanting to take part in The Grateful Dead concert experience. As new fans were drawn to the live shows, ticket sales increased and a key profit center for the band—mer-chandise sales—grew.

At the core, this is what content mar-keting is all about: giving away something of value in order to drive the sale of some-thing related. Selling studio albums (or even bootlegs recordings of the shows) was not the goal of the Dead’s business strategy. The holy grail of their marketing efforts was getting more people to expe-rience the live show. With the explosion

of social media we have seen this strategy become increas-ingly commonplace for musicians to do via MySpace, Face-book, YouTube, etc. But when The Dead adopted this ap-proach they were light years ahead of their time.

As Brian Halligan and David Meerman Scott pointed out in their book, “Marketing Lessons From The Grateful Dead,” marketers would be wise to create great content that is meaningful for an audience instead of being all about prod-ucts and services. Business opportunities and sales results follow as a content strategy develops awareness, reach and trust.

Sure, The Grateful Dead may prompt images of tie-dyed shirts and twirling dancers, but for the marketing commu-nity the band should also prompt images of sheer customer loyalty genius. Fifteen years after the death of Jerry Garcia, the Deadhead community remains strong and vibrant—thanks to seeds that were sown years before the social me-dia explosion.

Marketers would be wise to create great content that is meaningful for an audience instead of being all about products and services.

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ave you ever thought about the way we think about loyalty? As marketers we spend much of our time trying to make people loyal to us, to our brand. When you really think about it, that’s not what loyalty is about. If we want someone to be loyal to us (like our spouse), we need to demonstrate loyalty first, right? Think about it, we have loyalty backward. As marketers we should be demonstrating loyalty to our cus-tomers not telling them to be loyal to us.

It really is the retailer or brand who needs to be loyal to the customer and not the other way around. This simple, but subtle, reversal of a retention and loyalty mindset will pro-duce a much higher ROI for your CRM and loyalty program spend.

Anecdotally, this “reversal of approaches” is much more consistent with today’s consumer perceptions of their entitle-ments as demonstrated by the digital social media phenom-ena. For example, accepting a “Friend” is considered a right and privilege of the individual and people make that decision based on trust and credibility (consciously or sub-conscious-

In-the-Moment Communications Loyalty Programs & Today’s Mobile Consumer

ly) of the requesting party. By deploying concrete actions that demonstrate your brand’s desire to truly understand an individual consumer before bombarding them with incentives, places you in the same category of what they truly want out of any friendship—a reciprocal and mutu-ally beneficial relationship. The brand elevation to a real

“friend” should derive a much higher return on invest-ment.

So, if we are willing to admit (even quietly to our-selves) that our loyalty solution design is backward, what is the core new strategy to become an integral part of a consumer’s mobile lifestyle? Let me introduce to you a new loyalty paradigm called “In-The-Moment”. After all, In-The-Moment is how people experience their life events; but how does your plastic loyalty card talk to your customer during their hectic day? Or when your custom-er wants to know their entitlements right then and there? You can increase spend and satisfaction by enabling your loyalty members to engage in a two-way digital dialogue

by Bob Gold, Gold Mobile

FEATURES


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during their “moment-of-truth.” Mobile CRM platforms can be configured to read content and searches on the fly and re-act based on programmable and personalized business rules.

The following represent specific In-The-Moment insights and tactics to transform your loyalty program to be better aligned with today’s mobile consumer.

To our loyalty point above, who gives who points? Maybe the smartest loyalty program empowers the customer to rate the retailer/brand in various interactions by giving them loy-alty points for aligning with their lifestyle? Isn’t that the ul-timate motivator for all of us?—Where we can voice and rate others through our own “lens” and set of experiences. Let’s erase our old beliefs on the roles of the retailer and the cus-tomer in building a deep and intimate relationship. The in-volvement and empowerment of people will create a deeper

bond, increased trust, and earned credibility…leading direct-ly to the cash register! This is a great example where you can apply In-the-Moment surveys that provide immediate feed-back on how to capture their business—now.

Self ManagementWe have heard of self-managed IRA accounts and holistic care programs where the individual has more control; What about “self-managed” loyalty programs (within certain rules and guidelines)? This can be an ideal framework for today’s consumer and is now practical given the advances in mobile technology and tools.

•Self management means that emotionally it becomes “their” loyalty program and with that comes pride of own-ership. They will have renewed interest in sharing and wanting it to succeed—sub-consciously they will perform actions to achieve greater rewards. It just makes sense. Moreover, in today’s connected world where it is so easy to comparison shop, you need an extra level of emotional bond to your loyalty program, so why not let the customer provide it themselves! Look for platforms that provide preference-based opt-ins and management enabling con-sumers to only receive their selected categories of content and offers.

InfluenceMany people feel special when you ask their opinion—now there are easy and cost effective mobile surveys and feed-back techniques (with incentives for participation)…so ask away!

•Behavioral science shows more people identify and recip-

rocate with another person, community, or a brand the more they feel the ability to influence a situation. Plus you can reduce a lot of analysis time and costs if the consum-er is telling you exactly what to do to get more business! Look for platforms that have automated survey creator and real-time feedback mechanisms.

Either Party InitiateUsing GPS techniques on cell phones can work but they have many lurking emotional and real physical issues; by empow-ering your customer to find the deal she is looking for when she wants to engage is totally in line with how people com-municate in their social media networks. For example, your analytics determine Mary should get a coupon for shoes this week, but she is now shopping for her brother’s birthday gift during her lunch break and has 30 minutes to complete a pur-

chase and wants to know the men’s special offer items based on her loyalty status.

•The answer is to construct a loyalty communications sys-tem that enables the member to initiate the communica-tions on their terms—it is not just about the weekly email/mail or website communications.

AHA MomentFor your customers, how do you create a sudden “insight” that motivates a purchase? Insights typically result in a new cog-nitive interpretation of a situation that point people to a solu-tion to a problem (since you want the consumer to reach the

“right” conclusion—right then and there). One simple answer is Comedy/Fun: Behavioral scientific research has shown when people are in a positive mood they are more receptive to being insightful and solving problems. Mobile is a great way to stimulate that “AHA Moment” by creating a multimedia

“coupon” or special offer that delivers both smiles and finan-cial incentives to increase conversion and redemption.

•The overarching tenet is to have a platform that can pro-vide you and your agency with the ‘Freedom to Create” by enabling campaigns to mix and match video, images, text, 2D barcodes, and voice in the consumer engagement ex-perience.

In summary, we’re now in a world of consumers who are socialized for instant access and gratification. Technol-ogy and access to information has exceeded what the human mind can truly absorb and act on. Retailers and brands that successfully deliver “in-the-moment” contextually relevant lifestyle communications will elevate their image and win both mindshare and dollar share.

Think about it, we have loyalty backward. As marketers we should be demonstrating loyalty to our customers not telling them to be loyal to us.

33Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ •NOVEMBER 2010

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he mobile channel is playing an increas-ingly strategic role in marketing. According to industry analysts at Gartner, worldwide sales of mobile devices were up nearly 14 percent in the second quarter of 2010 over the previ-ous year. Sales of smartphones are booming despite the lackluster economy. To address the challenges associated with this growing market, companies have to take a hard look at their technology strategies, not only their business ones.

It used to be that marketers’ only had to worry about adjusting their companies’ web-site format to fit mobile devices. But now companies need to figure out how to incor-porate geo-targeting, profiling, and time and location-based marketing to better support and engage their customers, anytime and anywhere.

Smart and forward-looking marketers are already leveraging a new breed of marketing technology platform to engage the mobile channel. For example, more than two dozen international airports are already engaging mobile customers in ways never thought pos-sible. We all know that the travel experience can be burdensome and irritating, but the ser-vices supported by this new type of marketing platform can make the time spent at an air-port pleasurable and stimulating. The Denver International Airport, for example, recently rolled out a new mobile phone app, web site and digital signage. All of these marketing channels use geo-location marketing to al-low concessionaires, advertisers and others to provide travelers with relevant content and real-time, personalized prompts on their mo-bile devices as they move through the airport.

Travelers waiting for a flight can also reap benefits while killing time at a shopping con-course or food court. Based on their profile,

Mobile Marketing: Top 10 Technology Strategies All Marketers Must Knowby Robert Carroll, SDL

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location, time of day, and user-generated ratings and re-views, travelers can now receive high-value targeted pro-motions and coupons. Once they are ready to depart, those same travelers receive weather information and discount coupons valid for their destination city.

The ability to identify and message to such a highly con-vertible consumer in real-time is new to the industry, but airports and concessionaires are already seeing the ability to offer the best customer service and build loyalty among travelers.

How It’s DoneAll of us know that to empower marketers to create, de-

liver and manage truly personal and valuable Web engage-ments requires a new breed of multi-channel communica-tions and marketing platform. A ‘one-site-fits-all’ website won’t cut it. What’s more, the mobile channel should be integrated into all of your systems in a uniform fashion. The goal is to have customers enjoy the same consistent, brand-ed experience, whether they’re engaging via a desktop, lap-top, smartphone or even the company-managed online tech center or community forum.

These days, even marketers must have a basic under-standing of mobile technology requirements to ensure their success. Here are the Top 10 technology issues that market-ers should keep in mind when choosing a technical platform for their mobile channel:

1. Look closely at your current architecture to ensure it can support all your possible use case scenarios, now and in the future. The design of your Content Management System (CMS) should involve all needs, including those around governance, localization, device type, and communication. You can mini-mize the potential for disparate systems by ensuring robust read-and-write functionality to all deployed back-office sys-tems.

2. A CMS that is components-based is ideal for support-ing the mobile channel. Web page components such as content, digital assets or ap-plications can be easily repurposed within channel-specific templates, dramatically reducing the complexity of manag-ing content and release processes.

3. Localization, localization, localization! The global marketplace demands that a CMS enable com-panies to create language variants easily, and manage the translation process and regional go-to-market strategies. However, you have to consider how content variants will individually address the limited screen space of a mobile device. Being able to create customer-experience variants delivered specifically for devices with different form factors will help companies gain huge cost savings, management efficiencies, and time-to-market velocity.

4. Companies want to be able to repurpose content from a single source to all of their channels. The CMS can enable companies to do this easily by separat-ing content and application components from the presenta-tion layer. The marketer need only follow the rules that ap-ply to the specific channel. For the mobile channel, you also need to address presentation technologies that vary per device, network and operating system.

5. Size does matter! At a minimum, a CMS should offer templates that ensure proper component re-sizing, and pre-sized assets to be uploaded and approved within your workflow before they can be used for a spe-cific channel.

6. The best CMS user interface is browser-agnostic. Most content authors and approvers typically work at a standard

workstation, but designers, developers and managers of the mo-bile channel often work with different kinds of technologies.

7. Customer engagement can vary greatly based on the device in use, so companies have to plan for the full spectrum of devices used to browse the mobile Web. It is essential to capture device specifics such as type of browser, screen resolution, javascript/cookies enabled, etc., before serv-ing back the requested content. At the time of the request, the device/browser identifies itself, allowing the CMS to read its specifics from a database and render the appropriate device ex-perience.

8. Publishing models vary depending on the company and its objectives. A CMS that renders and publishes static mobile pages seems good enough if a company needs only a limited mobile strategy, delivering a finite set of transactions. But considering how quick-ly the customer experience is changing, will that be enough? Can your CMS support dynamic or even hybrid publishing scenarios? Your CMS should build pages dynamically based on login, per-sonalization and/or referrals, to deliver both a personalized ex-perience but also one relevant to multiple audiences.

9. The CMS should let users preview the mobile channel con-tent in a multitude of renderings, typically in a low, medium and full experience view. Not only does preview functionality support the content author, it also has added workflow benefits for content approvers by showing content rendered specifically for a channel.

10. A mobile site may not be enough. Marketers may want to allow content to be published and displayed in an “app,” or to a location from where it can be packed using the appropriate SDK (Software Development Kit). Throughout this process, your CMS should track usage by creat-ing a content audit trail, and deploy updates to all needed loca-tions.

Knowledge is power. By understanding these top technology issues, marketers can better deploy powerful functionality to their mobile marketing channel—archive management/compli-ancy, login/security, personalization and profiling, among others. Not only will they effectively enhance the customer experience, but also deepen engagements, build brand value and increase the lifetime value of every customer. L


Smart and forward-looking marketers are already leveraging a new breed of marketing technology platform to engage the mobile channel.


n the surface, there is something inherently futile about being a loyalty marketer in an era when consumers are increasingly empowered to waver. It’s never been easier for them to change habits, shift allegiances—or to find information or messages encouraging them to do so.So what’s someone selling loyalty in a fickle age to do? The answer, paradoxically, is to embrace the trend by tailoring your programs toward the ever-wavering set. You know the type: They want what they want, when they want it, built to spec and online.

If you can deliver what they’re asking for,

you’ve got a better chance at connecting with today’s customer. And many of the world’s sav-viest marketers are expanding their offerings to do exactly that. By now, everyone is familiar with how Apple’s iTunes turned the music industry’s album model on its head. But did you know that the online shoe-customizing service Nike intro-duced in 2006 already does more than $100 mil-lion in annual revenue? Even brewers are getting in on the act. Heineken started letting consumers customize their own beer bottles online last year.

Apple, Nike and Heineken were all moving to address the needs of these customers, and loyalty marketers who don’t do the same are ignoring this trend at their peril. The one-size-fits-whoever-signs-up card seems increasingly old-fashioned in an era where consumers can go online and design their own playlists, shoes and beer. If customers accustomed to that level of choice are buying a gift card—or even shopping for a Visa—do you think they’re going to opt for a card you designed, or the one they did? Are they going to respond better to a card that comes in a generic mailer, or one that comes in a carrier that is clearly targeted to their interests?

Loyalty in a Fickle Age

by Render Dahiya, Arroweye Solutions

At Arroweye, we’re in the business of enabling our clients to build a loyal customer base—helping plug the “how” into the loyalty equation in an innovative way. We’ve had many conver-sations with program managers whose sole job is to build affin-ity through their card programs. From their perspective, loyalty brings increased card usage, client retention and deeper con-nections. How to get there, well, it’s a customized approach.

Increasingly, program managers are moving to on-demand card manufacturing technology to help build their prepaid loy-alty programs. They’re doing so because of the flexibility the technology affords. In order to be relevant to the individual customer, businesses need to have the right tools to respond to market segments in an instant. The digital on-demand “tool-

box,” so to speak, allows card programs to:

•Stand Out in a Crowd – Differentiation is a huge selling point. Mass production is a thing of the past, as evidenced by the rise in on-demand. Unique product offerings and the ability to change designs and dynamically print carriers help marketers attain a competitive advantage.

•Issue Rewards with Ease and Speed – Simply put, an on-demand model will help get your cards in the hands of the end-customer more quickly and allow you to seamlessly manage the front-end process without the headache.

•Cut Program Costs – Forecasting a card program can be costly from an inventory perspective if you miss the mark. Digital on-demand produces the cards you need at the mo-ment they’re needed.

•Provide a Better Brand Experience – Companies know how essential it is to send the right message all the way through to the rewards. Being able to appeal to niche markets and tie in offers visually through a card and its packaging is a meaningful tactic to boost brand association.

The possibilities with digital on-demand can be endless. And the deeper connections established as a result can as well. Loy-alty is personal, after all, and the marketers who take this to heart will be the ones standing out in a crowd.

The one-size-fits-whoever-signs-up card seems increasingly old-fashioned in an era where consumers can go online and design their own playlists, shoes and beer.

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SocialTwistIn today’s competitive market, savvy brands are us-ing social media to help boost customer satisfaction

and increase customer loyalty.

SocialTwist, www.socialtwist.com, which enables marketers to turn social media into so-cial marketing, has helped major brands such as Barnes & Noble and Jamba produce a highly valuable ROI, cementing relationship ties with customers. SocialTwist harnesses the power of referrals—a key driver in consumer purchase decisions—to help marketers con-nect in a measurable way. SocialTwist’s flagship Tell-a-Friend (TAF) suite of services pro-

mote highly viral—and trusted—word-of-mouth marketing campaigns online by combining marketing messages, the power of referrals and the social platforms customers use most, from email to the most popular social networks.

While traditional sharing products are simple URL link pass-alongs more focused on data mining and behavioral targeting ads that capture user preferences and their shared data, SocialTwist relies on the fact that no algorithm can match human filtering, because a friend knows the interests and purchasing patterns of his or her other friends. TAF lets savvy marketers leverage their users’ influence on their friends and spread their product message while protecting consumer data privacy and maintaining the three-way trust re-lationship between the brand, its users and their referred friends. TAF’s ability to improve click-through to sites, generate new revenue and promote virality is proven and measurable. SocialTwist has serviced over 73,000 publishers and garnered over 4.5 billion impressions.

SquareAccept Payments. Everywhere.

Square, an application that works with a physical reader that enables cash and card payments on any device with and audio in-put jack, including your mobile phone, helps you build your business in real-time. Take payments, see how much you’ve made for the day, browse all of your receipts, set up virtual shelves on the iPad.

Square is focused on providing the best pay-ment experience in the world, and that includes cost. While taking cash is always free and easy, accepting cards can be confusing and costly. That’s why Square has simple pricing and no hid-den fees, monthly charges, or contracts. Square is constantly working with their partners to sim-plify and lower costs associated with accepting card payments.

While the payment abilities add ease and mobility to business operations, the behind-the-scenes functionality of Square is practi-cal and efficient. Your receipts are sent to your email, and through the application, you can see all of them in one simple view. You can browse through photos of every item you bought and share them with your friends, as well as set up

“shelves” of your products, complete with names, prices, pictures and descriptions when you use an iPad. Square automatically builds your own mobile store.

SocialTwist relies on the fact that no algorithm can match human filtering, because a friend knows the interests and purchasing patterns of his other friends.

LoyaltyInnovationPRODUCTS,

ADVANCEMENTS,

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YOUR LOYALTY STRATEGY ROI IS .

AND IF IT DOESN’T IMPROVE, YOUR CEO WILL .It’s not a question. It’s a decision. If you want to maximize the value of customer relationships and the ROI of your loyalty efforts with certainty, FILL IN THE BLANKS.

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Delivering Superior Customer Experiences Without a framework to create, continuously evolve, and

ensure a unified customer experience, a company’s best inten-tions in marketing, reward programs, and customer service can actually have a negative impact. It has been estimated that poor customer experiences undermine these investments and cost companies up to $100-billion annually in lost purchases and defections to the competition.

The key to successfully managing a customer experience initiative is the deliberate development of a Customer Cen-tric framework. Customer Centricity has been defined as “An approach to doing business in which a company focuses on creating a positive and consistent consumer experience at the point of sale, through the call center, online and via all com-munications, including mobile, email and print.

A Customer Centric framework requires connectivity across every channel of the organization, allowing the consis-tent delivery of the most appropriate level of service, benefits, and customer care to each segment of the customer base. Each channel should have customer collaboration as its prima-

Implementing and Measuring a Customer Centricity Framework

Learn to develop an internal framework dedicated to enhancing the overall customer experience while increasing customer retention and sales

ry focal point. This involves establishing direct accountability for the customer experience, as well as responsibility for com-municating the latest innovations, trends, data, and relevant industry news at constant and expanding levels.

A positive customer experience translates into greater customer loyalty. Forrester Research, in Customer Experience Boosts Revenue (June 22, 2009), has shown a high correlation between customer experience and three key elements of loyal behavior: willingness to buy more, reluctance to switch, and likelihood to recommend.

All members of the organization must be committed to de-livering a superior customer experience. Is your organization ready to deliver it? Do you want to know where you are and how far you have to go to be customer centric? You may be further along the continuum than you realize.

Kobie Marketing has developed the Customer Centricity Quotient – a tool to help companies identify functional areas of customer experience excellence and improvement across Marketing, IT, Analytics, and Strategy. This diagnostic tool is following. How does your organization rate?

by Carlos Dunlap, Kobie Marketing



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Assess where you see your organization in each key area:

5: Agree Completely

4: Agree Somewhat

3: Neither Agree nor Disagree

2: Disagree Somewhat

1: Disagree Completely

In order to gauge how your organization scores versus industry benchmarks in each of these areas, we encourage you to take a short Benchmark Assessment. By scoring your organization on a 1 to 5 bases across these various areas, you will identify areas which may need more concentration and could be holding back your overall strategies for building a more Customer Centric company.

1. Organizational Readiness

We have executive sponsorship to ensure commitment from key stakeholders.

Success metrics have been identified in order to gauge milestone achievements and overall results.

Our departments are aware, trained and tightly aligned to deliver a consistent experience in the moments that matter.

Each employee has a measurable customer experience objective that is measured and reviewed quarterly (or more frequently).

4. Analytics Team

We have a business intelligence/analytics department to focus on customer insights.

Our company uses a standard process to develop analytical products to deliver insights and segmentation.

We track marketing program and campaign results for ongoing reporting, success measurement and enhancements of the overall customer experience strategy and the campaigns.

Our marketing, program and attitudinal data are integrated into the customer transactional data for more comprehensive value analyses and segmentation.

2. Data

Our company has and can access at least 18 months of transaction data and can tie behaviors to unique customers.

We have customer demographic/profile/lifestyle data that is linked to individual customers.

Our company has conducted primary research to measure customer attitudes and better understand their needs.

We have customer experience metrics in place, routinely monitor progress and periodically enhance the process.

3. IT Support

Our IT department is integrated into our key marketing efforts with dedicated staff.

We invest in appropriate hardware, software and resources to support better understanding of our customers and delivery of our products/services.

We have access to user-friendly GUI tools that allow program managers to efficiently access information.

Our company’s IT department supplies tools that allow all customer facing employees to have insights into customer value and past behaviors in the moments that matter.

Enter Category Points:Please rate your capabilities based on

your performance in each area categoryMax 20 points









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5. Marketing/Comunication Team

Our company routinely projects campaign results and identifies success metrics, prior to implementation.

Before we initiate customer campaigns and programs, we first internally communicate program and campaign objectives to ensure employee understanding and participation.

Our customer promotions and marketing campaigns are targeted and personalized.

We ensure our marketing messages and offers are consistent across all channels.

6. Voice of the Customer

We have a mechanism in place to consistently obtain feedback from our customers.

Our company makes a consistent effort to promote 2-way dialogue in all campaigns and all channels.

Customer feedback is captured and incorporated into the marketing database and customer profiles.

We have a clear understanding of customer desires and satisfaction.

7.Execution/Fulfillment Readiness

Customers have access to live employees within minutes of their request.

Appropriate application of services/benefits are applied to the appropriate segments of customers.

Customer feedback/responses are incorporated into the operational plan to improve the customer experience.

Consistent delivery of communications/rewards is applied to deliver on the organization’s promise.

Cumulative Score:

Max score is 140

Category Preparedness Customer Centricity Levels

Excellent 19+ 135+ Culturization - ingrained in corporate culture

Good 16 to 18 110 to 134 Actualization - strong levels of execution

Average 12 to 15 90 to 109 Assimilation - overlaying/testing ideas

Poor 8 to 11 70 - 89 Inquisition - discovering ways to engage customer

Need help < 8 < 70 Comprehension - identifying need


your performance in each area categoryMax 20 pointsEnter Category Points:

Please rate your capabilities based on your performance in each area category

Max 20 points




Implementing and Measuring a Customer Centricity Framework (continued)

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Helpful Tips:If you find yourself in “Poor to Needs Help”

•Tackle the challenge with “Baby Steps.” Setting several easy-to-accomplish goals will help your organization build the momentum it needs to become more customer centric.

•Take the initiative to organize a cross functional team to better understand the situation. Remember: It’s not a problem that belongs to any single department, nor will the solution arise from a single point of view.

•Put your thoughts on paper and present them to management. Make sure you’ve properly documented the situation, as well as identified potential solutions and associated benefits.

•Talk with Operations and Technology to better understand the touch points, areas of opportunities and realistic solutions from those on the front line who interact with your customers.

If your score indicates your organization is “average” on the Customer Centricity continuum, then:

•You are better than many and yet have plenty of opportunity for improvement.

•There is a customer centric foundation within your organization, so you don’t have to start from the ground floor.

•Usually, the way to improve is through execution. The best strategies fall short due to poor delivery of the promise to the customers.

•Look at your touch points—e.g. in store, at the register, call center reps and others who directly impact the customer experience.

•Remember: Your brand is not what you say it is, but instead what your customers believe.

For those of you in the “Good to Excellent” rangesLife is good…and therefore, business should be as well. However, don’t take your results for granted:

•Continue to look for areas of improvement and growth. As good as you are, you can always be better. Note: being better doesn’t necessarily mean throwing more money at the situation. All decisions should be based on projected financial returns.

•Don’t cut back on your services and benefits. Incremental profits can be derived from efficiency gains, instead of decreasing benefits. The best way to find those efficiencies is by asking those who are entrusted with delivering the customer experience—the front line. This should be a process solution, not a line item reduction on the balance sheet.


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Types of Customer Data Customer feedback comes in many forms, all of which can

be categorized as either structured or unstructured. Struc-tured feedback comes from customers who receive a survey and answer the questions posed within that survey. Examples of unstructured feedback include customer posts to a blog, Facebook, Twitter, or elsewhere that your company has not solicited or prompted.

Structured Feedback Until recently, structured feedback was the main way that

companies could hear from their customers about their expe-riences. Sure, customers could write letters or emails or drop a card in a suggestion box. But let’s be real here. Those were all just “cosmetic” and “feel good.” Customers knew they had an outlet, but did companies really care about that feedback, respond to it, or change processes because of it? Probably not.

What follows is the various types of structured feedback, including what they are and what their place is in the overall VOC initiative. We won’t address every possible form of struc-tured feedback, but we’ll hit the big ones that should be part of any VOC effort.

Relationship Surveys Relationship surveys are conducted to get a point-in-

time read on customer satisfaction, loyalty, and engage-ment and provide high-level perceptions of your company. These surveys are conducted quarterly, semi-annually, or annually and contain questions that span the customer ex-perience with various departments or touchpoints. These surveys tend to be longer, sometimes 50 questions or

more, although the actual number of questions seen by the respondent may be much less due to skips and branching (as a result of questions asked or what’s in the customer file that can be linked to the survey on the backend).

Relationship surveys complement or supplement trans-actional surveys; they can often identify areas where you might require further drilldown through transactional sur-veys. Relationship surveys can also serve another purpose: they can help identify issues or preview your customers’ likelihood to renew a contract. For this particular purpose, the survey is served up once a year.

Competitive Surveys When designing a VOC initiative, avoid viewing insights

about your company in a vacuum. Having an understand-ing of your placement in the marketplace relative to your competitors by identifying your customers’ consideration sets and competitive perceptions, combined with the mea-surement of their relationship with you, is quite powerful.

Two different approaches can be taken to collect com-petitive insights, including: (1) asking your customers to evaluate competitors they have done business with by asking a similar, but often limited set of questions they answered about your company, or (2) conducting a blind competitive survey among your target audience. The lat-ter, which is the preferred and more-robust (yet more-ex-pensive) approach, typically entails renting a list of names from a list or panel provider, asking respondents to identify companies they have worked with, and then having them evaluate their experiences with each of them (or some sub-set of them).

Customer Data: The Essential Element of Your Enterprise Voice of the Customer Program by Annette Gleneicki, Allegiance

very company wants to make measuring customer satisfaction and loyalty a top priority. They all talk about it; most of them do it. But are they doing it right? To help answer that question, this article provides an overview of just one of the very elements of a successful, enterprise-wide Voice of the Customer (VOC) program: customer data—both survey and non-survey.

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Transactional Surveys Transactional surveys are also known as post-event

surveys, a phrase that clearly defines the scope as after some event or interaction has occurred. The customer is surveyed about his experience with the company during that specific interaction. Examples of transactional surveys along the customer lifecycle include win/loss, purchase experience, support, training, fulfillment, and churn.

Transactional surveys are, by nature, extremely action-able and present service-recovery opportunities for which the organization must be prepared to take advantage. The feedback received can be used to make both tactical and strategic improvements.

The surveys are typically brief, perhaps 10-20 questions if not fewer, and are designed to measure the customer experience with a particular touchpoint. The surveys only contain questions that are specific to the transaction in question and should not veer off into other directions or bring in other topics.

Brand/Marketing Surveys Relationship and transactional surveys are meant to fo-

cus on customer satisfaction with the experience. Brand research and customer satisfaction/experience research should be a coordinated effort to (a) limit respondent fa-tigue from the surveying perspective and (b) coordinate questions, analysis, and follow-up on the backend.

Advisory Board Surveys In a B2B environment, Customer Advisory Boards (CAB)

typically consist of a small number of executives who rep-resent the 20% of customers who account for 80% of your revenues. CABs are a great way to engage your customers, to show them some love (and get loyalty in return), and to allow them to help drive the direction of product develop-ment, customer experience, and more.

Listening Labs Listening Labs are an effective way to receive input from

customers about their experiences and actions with your organization throughout the customer lifecycle.

Unstructured Feedback Unstructured feedback is unsolicited. It comes in many

forms, including social media, online forums and communities, blogs, “Contact Us” pages, and letters or emails to the com-pany. Customers want to share their experiences with other customers and do so in whatever forum is available. This feed-back is just as valuable as structured feedback.

Using the Internet, your customers are free to share prod-uct reviews and their experiences with you and with anyone who wants to listen—in a very public format, 24 hours a day. Blogs, Twitter, Facebook, online forums and communities, websites, etc. create a lot of data that you need to pull together and manage in one place. For you, the challenges are to: (a) find a way to harness all of this data; and then (b) put someone in charge of analyzing/gleaning insights from it and acting on it—right alongside of (or in conjunction with) your structured feedback.

Non-Survey Metrics and Data Non-survey customer data and metrics are a solid compo-

nent of any VOC initiative, as they tie actual, behavioral data to the attitudinal data from your structured and unstructured feedback. Non-survey data may come in the form of variables such as demographics, purchase information, purchase behav-ior, etc., included with your customer list (used to send survey invitations), or they can be financial data, such as profitability, total revenue, lifetime value, attrition, etc., used to segment and analyze the data later. Incorporating these data into your VOC strategy will allow you to get the full picture of individual customers, target customer segments, or your entire custom-er population.

Conclusion And Next Steps There are many inputs to consider for your VOC initiative.

The next step is to consider how to pull them all together, push them out into the organization, and operationalize, respond to, and analyze them to improve your business processes and de-liver a superior customer experience.

Briefly, You’ll Need To: •Disseminate: Get the data into the hands of the appropriate department(s).

•Respond: If your customers take the time to post feedback, someone ought to take the time to respond to them. There’s an opportunity for service recovery here—don’t miss it—as well as an opportunity to show that you care—to hundreds of thousands of people who read that same blog, Tweet, etc.

•Analyze: Mine the data, segment your customers, and identify areas on which to focus and areas to maintain.

•Operationalize: Once you’ve analyzed the feedback, opera-tionalize it—act on it, whether that’s a tactical approach or strategic action planning and process improvements—and in-corporate it into your daily business processes.

Utilizing a VOC solution you can collect, disseminate, analyze, and act on your data all in one place. L

Understand your placement in the marketplace relative to your competitors


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he natural affinity of technology service orga-nizations towards software and technical training as the predominant solutions to their service challenges leaves them with a widening gap between customer expecta-tions and actual service capability.

The changing service landscapeWith the ongoing commoditization of products driven

through globalization and the omnipresence of the inter-net, the pressure is more than ever on the service busi-ness to come to the rescue. Not only to provide additional sources for revenue growth and defending sliding product margins, but as a way to provide a level of differentiation from other technology providers by establishing an inti-mate relationship with the customer that goes over and above the product functionality. This value-added ser-vice approach has to go beyond the traditional “break-fix” model of technical product support to provide true cus-tomer service, i.e. supporting the business of the customer.

Furthermore, Customer Service needs to be able to support the rapid evolution of converging technologies—the CEO of Nokia once called this “the clash of IT and Telecom”. The resulting, steadily increasing complexity of technology leaves service organizations with a wid-ening gap between the capability of the technology they are supporting and service engineers’ understanding of it, which can no longer be bridged through purely product training—the speed of technological innovation is simply too high.

Closing the 21st Century Service Capability Gap by Christoph Goldenstern, Kepner-Tregoe

The Service Capability GapAutomation strategies are failing in a an increasingly

complex world.With the above market trends, many service orga-

nizations have shifted their focus increasingly towards customer satisfaction as a key metric and managing the Total Customer Experience. Yet, most service organiza-tions’ investments in the last 10 years have been made into CRM (Client Relationship Management) systems and self-service tools, trying to automate the customer service process for mostly efficiency reasons. The result? According to the American Customer Satisfaction Index, many organizations have at best stagnated in customer satisfaction performance while in some industries, like Personal Computers, customer satisfaction has plum-meted by an average of 3.8% since 1995. These outcomes suggest that a change in strategy is required.

While service executives universally agree that cus-tomer satisfaction is a strategic goal of any service busi-ness, as it represents a key driver of customer retention, they often fail to analyze what the major drivers of sat-isfaction are in their business when it comes to resolv-ing complex customer issues. KM (Knowledge Manage-ment) systems and online support tools have helped to push more support to the web and resolving simple and known problems faster, but they only go so far in a world where the complexity of technology is continuously in-creasing, which in turn drives up the percentage of com-plex incidents faced by a service organization.

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It’s about the relationship stupid!Service is about relationships and relationships are

ultimately about human interactions. When looking at what truly drives customer satisfaction in a business, we suggest taking a random, “post-mortem” sample of customer cases and comparing “good cases” (high cus-tomer satisfaction) with “bad cases” (low customer sat-isfaction). You will quickly find out that there is a pat-tern to what behaviors drive a positive versus a negative customer experience in your business. While quality and speed of resolution are generally good predictors of customer satisfaction, the real question is what con-stitutes quality in the eye of the customer and what is the perceived speed of resolution, given the nature and complexity of customer issues they experience.

Setting the context for closing the gap by defining the Service Strategy

Another contributing factor to the widening Service Capability Gap is the general lack of direction and priority setting in service businesses on how to close the gap in critical areas of the business. This often stems from a lack of strategic clarity around the service portfolio that is being provided and the missing segmen-tation of different customer types and their needs.

The three major sources of ser-vice gaps: Process, People, Perfor-mance System

Critical Customer Service is ultimately delivered through Peo-ple as part of a Process. Problems are solved by people and relation-ships are created by people, not software! However, software can play a critical role as an enabler to make this process as efficient as possible by helping to capture, store and retrieve the in-formation in the way you want your service engineers to think, engage with customers and create knowledge! If the design of the software is not modeled after the service work flow—which it is supposed to enable—ser-vice engineers will soon find creative ways to minimize their need to use the system or circumvent it completely in order to reduce, what they would consider, bureau-cratic, non-value-added work.

We suggest that service organizations need to focus on two basic performance outputs:

•Providing a high-quality customer experience•Providing a consistent customer experience

Both of the above are primarily behavior driven and therefore require a renewed focus on “the human service interface”, which is largely driven by service processes, the skills of service engineers and their per-formance system.

ProcessesServices Processes are about “how work gets done”

in a service business, i.e. how the service is actually be-ing delivered to customers. The service process design informs the quality and quantity of the service resourc-es required in terms of people, tools and the organiza-

tion’s performance environment and links them back with the service strategy and its performance goals. Without effective service process management, invest-ments into people and software happen in a vacuum and without a clear link to the strategic goals of the ser-vice business.

People Two major factors will further widen the service

capability gap: the speed of innovation and the conver-gence of technologies.

The underlying complexity of networked hardware and software cannot be coped with by sheer technical product training of service engineers. Consequently, service businesses need to recalibrate their training ef-forts towards critical thinking skills that are indepen-dent of the technologies or products in order to bridge the service capability gap. Service organizations will

only be able to provide a consistent customer service experience to their customers if they develop the ability to partially decouple their service engineers’ level of service provision capability from the level of technical knowledge, i.e. they need to reduce their dependence on product knowledge.

Performance SystemThe reality is that the service in-

dustry has developed an obsession with measurement. That’s not per se a bad thing. However, if we mea-sure the wrong things and make them part of the service engineers’ performance system, the results can be disastrous because we are driv-ing the entirely wrong behaviors. The Harvard Business study “Goals

Gone Wild” pointed to the negative side-effects of over-prescribed goal-setting.

We typically find two major shortfalls with mea-surement systems:

•Too much focus on quantitative vs. qualitative metrics

•Too much focus on lagging vs. leading indicators Clearly, the performance system is about more

than just how we measure performance and provide rewards to service engineers, but is much more about what we do to actively influence behaviors to align with the organizational goals.

Where do we go from here?Reducing the Service Capability gap will require a

new type of thinking, away from blindly investing into tools and measurement systems towards understand-ing what truly drives a repeatable, high-quality cus-tomer service experience and efficiency in how services are being delivered. If we can get it right, the price to be won will be worth the effort: customers that not only are loyal to our business, but that act as willing apostles for our products and services. It is then that customer service will become a genuine competitive advantage and a driver of future revenue and profits.

Critical Customer Service is ultimately delivered through People as part of a Process. Problems are solved by people and relationships are created by people, not software!

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Smart Card fought bravely. Contactless Card launched a full-scale assault. Yet we consumers still are rung up with 20th century payment technology at almost every merchant point of sale. If these, the biggest initia-tives by some of the biggest players in the industry, have failed to get brick-and-mortar merchants to adopt the new terminals that promised to bring us into this millen-nium, is there any hope for m-commerce—passing the register with a single wave of the handset?

Today, many believe that using mobile phones to pay for purchases is the new promised land—but the proven reluctance on behalf of the merchants begs the question: will you be swiping your cell at checkout anytime soon?

For merchants, it is a simple cost-benefit equation. The C-Suite folks have yet to be convinced that new point-of-sale technology will bring new customers, larger pur-chases, or more frequent visits. If the same people will continue to make the same purchases regardless of how

You and What Army?Marshaling the Troops toward Merchant Adoption of POS Mobile Commerce

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by Kelly Passey, Access Development


Some of the biggest names in next-generation payment technology have been unable to bring about merchant POS retooling—perhaps the humble coupon can finally spark the revolution.

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they pay, why buy shiny new point of sale (POS) payment systems? For now, the risk outweighs the unproven profit potential. It will take more than indus-try and consumer anticipation to get the merchants’ budgetary walls to start tumbling down.

For those of us anxious to see m-commerce become a reality, there is hope in a time-tested, classic strategy that has been boosting merchant bot-tom lines for years: the trusty coupon. This well-worn tactic may be just the right weapon in this high-tech battle for the hearts and minds of the merchant decision makers.

From the humble beginnings of S&H green stamps over 100 years ago, mer-chants, retailers, restaurants and all the rest, have used deals and discounts to drive consumer engagement at the POS to generate foot traffic and sales. Yet, in its digital, mobile form—where the phone is shown, scanned or waved at the point of sale— the age-old cou-pon now has the power to show mer-chants how a mobile-friendly POS can effectively drive even higher traffic and spending levels—a potentially potent gateway drug into a true m-commerce world.

Merchants already understand that consumers want, even expect, a deal or discount before making a buying deci-sion. Especially in recent years, they have seen an increase in the power of

the old-school coupon as usage has expanded across all income levels. One recent report documented this substan-tial increase in coupon use specifically in higher income households, showing 38% of “super heavy” users and 41% of

“enthusiasts” coming from households with incomes $70K+ (Nielsen Com-pany Report).

Incidentally, this also represents the dominant demographic of heavy mobile phone enthusiasts—and that is what many merchants may not yet fully understand. Yes, consumers love a deal, but with each passing day those same consumers are coming to expect that deal to be delivered to their mobile handset.

In fact, one study earlier this year surveyed 4,534 shoppers ages 18-65 in late 2009 and found that a stun-ning 39% of consumers were willing to abandon their purchase if they could not obtain coupons or discounts via their mobile device—an average lost sale of $109. Additionally, the study found that majority of those abandoned purchases could have been recovered (54% elec-tronic retailers, 46% retailers/clothiers, and 42% auto parts/stores) if coupons or discounts were more readily avail-able, both for brick-and-mortar and online retailers. (Source: Motorola with e-Rewards and TNS International, Jan-uary 2010.)

Not every merchant is behind this curve. Early adopters include brands like Kroger and Target, which have both begun issuing mobile coupons that can be downloaded and scanned against purchases at their store. Overseas, where mobile payment platforms are more fully evolved, McDonald’s is test-ing the ability to download a coupon and then wave the phone over a reader at the register to receive a discounted price. JCPenney has begun testing a similar program using a special Mo-torola image scanner. And, traditional mobile banking companies like Qual-comm’s Firethorn are teasing it up a new mobile product called SWAGG that partners with many national and local merchants. While many other merchants and restaurants have simply chosen to honor patrons who wish to hold up their smart phone at the regis-

ter rather than print out that coupon at home from the website or email inbox. A ‘Show Your Phone’ solution similar to the ‘Show your Card’ discount card uti-lized by AAA and others.

As more merchants venture into testing, the results are starting to make the case. IHOP recently began to see higher response rates from mobile couponing and SMS text-based offers. Shakey’s Pizza has reported better than 10% redemption rates with mobile cou-poning—and the evidence continues to pour in.

Armed only with what we know to-day, retailers can make a strong busi-ness case to invest in the terminals and readers necessary to support m-com-merce. It seems evident that this new channel can better tap into the needs of on-the-go customers, bridging the gap with more usage and engagement at the point of sale. We already know coupons effectively deliver more new, frequent, and larger purchases. Now, merchants have an unprecedented op-portunity to merge this proven sales incentive with the ease-of-use and ubiquitous nature of the mobile device to bring even greater returns.

Still we wait—the merchant is in control. When it comes to making costly infrastructure upgrades, buzz and technophilia won’t make the case—only actual spending patterns driven by less-costly mobile-based campaigns will. However, if mobile couponing has increasing success, more viable tests are conducted and results are care-fully tallied, we could have a winning catalyst to help us towards the future of on-the-go transactions. It will soon be-come very clear that the mobile phone not only can serve as a powerful sales generation vehicle, but also a payment vehicle that can deliver a stronger ROI.

The original idea of a ‘smart card’ with the micro-processor/chip that could help you manage all of your ac-counts has been swallowed up in the multi-faceted wonder of the ever-smarter mobile phone. But the winning technology that may lead us to true m-commerce victory may very well be found in a very low-tech solution—the humble coupon.

It will soon become very clear that the mobile phone not only can serve as a powerful sales generation vehicle, but also a payment vehicle that can deliver a stronger ROI.

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Loyal Insurance Customers: An Untapped Marketby Sandra Zoratti & Lee Gallagher, InfoPrint Solutions

Customer loyalty is irrefutable proof that a company listens to its customers and works hard to satisfy them. According to a recent CMO Council survey report sponsored by InfoPrint Solutions Company, “What’s Critical in the Insurance Verti-cal,” more than 60 percent of insurance consumers polled are happy with their providers. They value the ease and reli-ability of the working relationship, yet they report concerns related to policy language, billing and service. Customers want to learn more about the products and services of their providers, yet they, like many consumers, are shopping and comparing costs.


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he insurance industry clearly benefits from its loyal customers—55 percent purchased policies more than five years ago. But how are insurance companies responding to customer concerns, eco-nomic pressures and the need to increase revenue? A majority of survey respondents are devoting marketing resources to the acquisition of new cus-tomers. Only 14 percent expect to focus on reten-tion, advocacy and loyalty development with cur-rent customers.

Acquiring new customers takes time, and high acquisition costs can take a big bite out of market-ing budgets. The alternative—to more fully engage loyal customers—represents a substantial opportu-nity for insurance company marketers to capture incremental revenue fairly quickly.

Engagement thrives on relevant communica-tions that are designed to inform, cross sell and up sell. Consumers are overwhelmed with irrelevant information, and many want to simplify their lives.

By providing meaningful information, insurance companies can satisfy this desire and deepen the relationship.

Precision marketing—a data-driven system for designing and delivering personalized, relevant messaging—enables marketers to achieve ROI that is far more cost effective compared to the expense of acquiring new customers. And the good news is that the data needed for precision marketing al-ready exists.

The steps of precision marketing are:•Define objectives or what business issue or op-portunity needs to be solved

•Collect data on what your customers spending in your portfolio

•Analyze it and look for behavioral patterns•Send relevant communications. Test by starting test cells and measure if the expected behavior converted to the product promoted.

•Adjust campaign tactics, repeat to a larger test cells

Many insurance companies are fortunate enough to have data about their customers that has been collected over several years. This data can yield important insights, and marketers can apply analytics and algorithms to extract the data and use it. Yet only two percent of marketers in the survey reported increasing investment in data ana-lytics to better segment and target key customers.

Let’s say an objective is to cross sell or up sell your anchor products, for example, auto insurance for children of existing customers who reach driv-ing age. The customers who match specific criteria receive information about a relevant auto product such as decreased premiums based on their chil-dren’s academic performance. When the infor-mation arrives at the right time in a personalized manner, response rates can be impressive—some-

times reaching double to triple digits. This allows the conversation approach to nurture customer trust and loyalty and remove the relationship from transactional mode.

Loyal insurance customers, who frequently do not hear from their providers until renewal time, are an untapped market. Precision marketing is a winning strategy for consumers and insurance companies. It makes customers feel known and valued and gives them information and choices that are timely and relevant. It enables marketers to easily analyze results, calculate ROI and fine tune communications based on clear metrics—all of which can improve business in a challenging marketplace.

Download the “What’s Critical in the Insur-ance Vertical” report from http://www.precision-promotion.org/ or www.loyalty360.org/white_pa-pers to review the survey results and key findings.

Engagement thrives on relevant communications that are designed to inform, cross sell and up sell. Consumers are overwhelmed with irrelevant information, and many want to simplify their lives. By providing meaningful information, insurance companies can satisfy this desire and deepen the relationship.

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2010 ATM, Debit, and Prepaid ConferenceOctober 3-5, Phoenix, AZ

After attending the 2010 ATM, Debit and Prepaid conference, I realized again that this economy (and the banking industry in particular) is in a unique state of transition that has led to the increased interest and inclination of the attendees to achieve a more detailed and comprehensive understanding of loyalty and engagement best practices.

This understanding is sought through best practices, actionable insight and case studies that can impact ROI and create

“sustainable behavioral change.” The continued need for this knowledge is part of a concerted effort from financial institutions to achieve a better understanding of their customers given the fluid and dynamic state of the market. The market we live in is filled with an ever expanding set of traditional marketing channels and external market and governmental forces that have caused banks and other financial institutions to adapt to and try to comprehend this new landscape in order to make sure they retain and better understand their customers.

Attendees learned there has been a shift in the way people are paying for products. We have seen the increase in the use of cash and debit products, and have witnessed the consumer saving rate inch up to 6-7%, which had been around 0% for the better part of 15 years. PNC, a leader in the bank-based loyalty business, has witnessed significant interest in loyalty/rewards programs for both consumers and their business customers. They have seen better

What We’re HearingLoyalty Management’s review of relevant conferences in the marketplaceby Mark Johnson, Loyalty 360


The need for engaging, relevant and timely rewards that create loyalty and engagement is the goal of today’s programs.

retention and when this group begins to redeem, it creates a new level of “stickiness“ for the bank, as well as an increase in the number of products an individual or business will have with the bank.

There was also talk of debit rewards. According to Jonathan Silver, President and CEO of Affinity Solutions, “The future of

debit rewards is going to change. The whole loyalty model is going to be dynamic and changing rapidly over the next couple of years.” He sees a much more integrated model for loyalty that will function across industries. As Silver pointed out, “Merchant funded was traditionally a bolt on. 1 plus 1 equals three. The coalition model is coming around, but the key is creating a currency that works.”

There is going to be a change in the debit card programs, yet the consensus is that the demise of the debit card loyalty program is greatly exaggerated. Cynthia Smith of Zion’s Bank mentioned that some of their customers get $2,000 dollars back a year from their

programs, yet there is a push to simplify rewards and to make them more targeted, relevant and engaging. She suggested banks should not look for short-term profitability on their programs, but rather on the long-term engagement, detailed understanding and profitability of the client.

I continued to hear from the conference that consumers want to be rewarded. The need for engaging, relevant and timely rewards that create loyalty and engagement—but more importantly sustainable behavioral change—is the goal of today’s programs and more imperative now than ever.


The Motivation Show October 12-14, Chicago, IL

At the 2010 Motivation Show, I noticed that this show is changing along with the incentive industry itself. While

the goal of creating behavioral change for employees and channel partners remains, I spoke with a number of people who felt that Incentives are now a “four letter word;” that the old school “trinkets and trash” incentives are being replaced with more measurable methods of rewards. I heard time and time again from the vanguard of the industry that their clients want to understand, influence and measure the changes their loyalty/reward programs are creating.

I had the opportunity to speak at this year’s Show. As Loyalty 360 is focused on hearing the “Voice of the Customer”, the session was structured as interactive discussion with the audience; the goal being to get a sense from them of where the market is, where is it going, what the financials are looking like for them, what they felt the challenges were and how should one solve them? As always, I was (am) looking for market-driven insight.

What I can tell you is that there is as much confusion in this market as in any other. I was surprised how open and candid the individuals in my session were. They spoke of meetings with HR representatives that now would have operational and financial representatives in their sales/process meetings with an inclination to push the vendor for a more thorough understanding of how their spend can be more effectively targeted to increase the efficacy of these internal programs; to drive behavior. I asked the audience: “Does a bike in a catalog impact behavior?” Most responded either “no” or “don’t know”—but indicated that this is the same type of question they were being asked

-Mark Johnson, about The Motivation Show

by their clients. When I raised the issue of what does drive behavior, and many responded that the answer to this exact question is the Holy Grail that they were looking for.

I also asked my audience where they thought the market was going, and I received both ambiguous and uncertain responses. Some felt that employers/clients were beginning to loosen up their purse strings, but doing so very cautiously. Others believed that employers could be divided into the proactive (reward focused), active (looking for solutions) and inactive (you should feel lucky to have a job) categories. Yet, while more companies over the past two years were in the inactive category, we were seeing more interest—not necessarily spend, but interest—in moving to the other categories.

Behavior is a complex idea. The focus on the neuroscience, behavioral psychology and attribution theory are areas of increased interest, but the complexities involved with them are leading to a new paradigm in the marketing world. We saw that the Motivation Show dedicated a one-day pre-conference workshop to the ROI of engagement. I found this unique in that not only are we trying to give a new connotative and denotative meaning to engagement, but we are now fixated with the ROI component. I think this is the direction we will see the Motivation Show continue to move towards. The case study approach they are bringing to the show is very much welcomed by Loyalty 360 and Loyalty Management because we believe—and what we’re hearing from our members—these are the areas of interest to the market. Without them the old school view of incentives may be in trouble.

I heard time and time again from the vanguard of the industry that their clients want to understand, influence and measure the changes their loyalty programs are creating.

Best Buy Reward Zoneloyalty program profile

THE VERDICT

Two Thumbs Up!



re you ready for some football? The leaves are starting to fall and the air is crisp and cool. Autumn is here, and for many, there’s nothing better than rounding up your friends to eat, drink, and be merry while your favorite team battles it out on the field. But what to do when your tv just doesn’t cut it anymore? Time to upgrade to a flatscreen and watch the weekend’s games in style. And who better to help than Best Buy.

Best Buy’s Reward Zone is free to join and takes just minutes in-store at checkout and online, where you create your profile and customize the program to your liking. Once you join, you earn one point for every dollar you spend and are able to redeem points for $5 reward certificates after you earn 250 points. Depending on your preferences, you can increase the limit to 500 ($10) or 1000 points ($20). But make sure you redeem your points and certificates quickly! They do expire. For members wanting to earn rewards quicker, you can sign up for the Reward Zone Mastercard. This enables members to earn double the rewards—two points for every dollar.

Membership also gets members access to Reward Zone Partners that can earn significant points. With our new home theater, Netflix was the perfect option! Members can join for 500 points rewards and earn an additional 100 per month for the first six months. Getting re-wards to watch my favorite movies and tv shows? Yes please! Reward Zone Members can also shop the online mall, which not only offers rewards points on purchases, but also offers exclusive member dis-counts. You can find anything from books to clothes for the family to that new lamp you need in your living room—even deals on your next vacation!

In-store, it was easy to start earning. The sales staff was friendly and knowledgeable, helping us pick out the perfect tv and reminding us to take advantage of the Geek Squad who could come help us set up the tv and mount it in its place of honor just in time for kickoff. Online shopping was just as easy. The website features articles and reviews from technology experts at CNet and allows you to instant-ly compare items the way a sales associate could in the store. The website also features community forums where you can ask ques-tions from other members and chat on forums about music, movies, games—whatever your interest.

With my home theater all set up and ready for the big games and cozy movie nights, fall just got much more exciting. And who knows, with all my Reward Zone certificates rolling in, winter might be a good time to sharpen my photography skills or get that new laptop. Hint, hint Santa! L

The website also features community forums where you can ask questions from other members and chat on forums about music, movies, games—whatever your interest.

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Two thumbs up! Despite the points’ expiration dates, the program is quick and easy to use and with the diverse product offerings both in-store, and through the online Reward Zone mall, you can always find a way to earn rewards.

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