loyalty management q1 2015

First Quarter 2015VOLUME 7 NUMBER 1

Hyatt Builds Loyalty Around Experience

CPG : Creating a Holistic Customer View

Caesars Evolving Loyalty Program

2015 Conference Previews

IN THIS ISSUE:

Build a Customer Culture: Insights

from Forbes

ADAPTING TECHNOLOGY TO PEOPLE, NOT THE

OTHER WAY AROUND.

THE UX-FOCUSED TECHNOLOGY AGENCY 888.310.5327 EFFECTIVEUI.COM

3Loyalty Management FIRST QUARTER 2015

In this Issue...FIRST QUARTER 2015 WWW.LOYALTY360.ORGVOLUME 7 NUMBER 1

FEATURES

16 Hyatt Builds Customer Loyalty Around an Experience, Not a RoutineMark Johnson | Loyalty360

20 Building the Culture of the Customer: Insights from ForbesBill Brohaugh | Loyalty360

22 Creating a Holistic Customer View:CPG Insights from GoogleJim Tierney | Loyalty360

26 Building Brand Loyalty With Customers: NCR Corp. Case StudyJim Tierney | Loyalty360

28 Caesars Total Rewards: Evolving the Loyalty ProgramBill Brohaugh | Loyalty360

31 Grocery Powerhouse Ahold Surveys Changes in the Grocer-CPG RelationshipBill Brohaugh | Loyalty360

32 For Avis Budget Group, Customer Experience Drives Brand DifferentiationMark Johnson | Loyalty360

4 Letter from the Editor

6 Loyalty360 on the Web

8 Your Voice

10 Behind the Brand with Allyson Krichman | Rymax Marketing Services, Inc.

12 By the Numbers: Email Placement

14 By the Numbers: Program Behavior

18 Q & A: Ask the Experts

30 Trending Now

35 By the Numbers: The State of CX

36 Behind the Brand with Jose Costa MAACO

38 Loyalty Innovation

56 Loyalty Reads

LOYALTY FORUM: IN EVERY ISSUE

The nominations are in and judging has commenced for the inaugural Loyalty360

Awards! Winners will be announced at a celebration luncheon on April 27

during Loyalty Expo 2015.

To hear firsthand from the winners who are approaching customer loyalty in

innovative ways, join us at Loyalty Expo!

Loyalty360theAwards

register now!www.loyaltyexpo.com

Twenty years later, the Grateful Dead cripples a U.S. Postal Office and breaks Ticketmaster. For 50 years, the Grateful Dead has been an iconic story of experience, loyalty, and de(a)dication.

What does it take to build an iconic brand? What does it take to create those emotional ties that will not only stand the test of time, but create a lasting culture?

As much as I wish we could announce a prelude to the Fare Thee Well tour at our event, we are going to have other iconic brands and household names sharing their loyalty stories, how theyre keeping their brand true, yet evolving with the times, technology, and cultural changes. Join us in April to hear from the Pittsburgh Steelers, Harley Davidson, Walgreens, True Value, and many other esteemed brands.

This issue, deemed our loyalty issue, will demonstrate the imperative convergence of experience and loyalty strategies. Executives from Forbes, Google, and NCR share their insights on how brands can benefit by focusing on the customer experience to create long-term loyalty.

Still, other brands such as Caesars, Ahold, and Hyatt, discuss taking their initiatives to the next level, responding to the customer to improve each experience by using customer insights, analytics, and technology.

The end of the book includes a preview to our upcoming 8th annual Loyalty Expo in Orlando. I look forward to seeing you there.

Enjoy the read!

Erin

FROM THE EDITOR

Erin Raese Editor-in-Chief Loyalty Management [email protected]

How effective isyour loyalty programin attracting andengaging customers?

Assess Designprogram updates and/or

new pilot programsand differentiated

customer experiences

existing customer value and loyalty program

performance for optimal marketing initiatives

recommended program pilot and drive to 1:1

interactive relationships

Execute Measureprogram engagement, incremental customer

behaviors, andprogram ROI

We serve as trusted advisers to:

Go to www.cogensia.comor

Call Barb Olson at 847.805.9800

4 Loyalty Management LOYALTY360.ORG

Loyalty: What a long strange trip


TECHNOLOGY, TRENDS & REWARDS

BEST BUSINESS PRACTICES

46 Making Moments Matter: Thinking Beyond Tactics to Win Hearts Matt Stein | Kobie Marketing

48 Customer Journey Mapping: Pitfalls & Remedies Lauren Reus & Clay Walton-House | Lenati

50 Understanding your VIP-cravers and discount-hunters to better drive loyalty Laura Gardiner | Epsilon

52 The Right Process Drives the Next Generation of Value Propositions Sue Yasav | Synchrony Financial

WWW.LOYALTY360.ORG

2015 Loyalty360, 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 reliable. Loyalty360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing authors and not necessarily reflective of Loyalty360 and/or its affiliates. Loyalty360 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.

In this Issue...FIRST QUARTER 2015 VOLUME 7 NUMBER 1

Loyalty Management Editorial & Production TeamErin Raese - Editor in Chief

Mark Johnson - Contributing Editor

Christopher Schatzman - Design Director

Jim Tierney - Senior Writer

Crescent Printing Company - Print Production

ContactsArticle Submissions & Advertising:

Erin Raese

[email protected] or

513.800.0360, ext. 210

40 Experience First Jim Tierney | Loyalty360

42 So you dont want to reward your best customers? Barb Olson | Cogensia Loyalty

44 Change Management Its Time for Transformation Lior Arussy | Strativity Group

Change Management Its Time for Transformation

44

The Right Process Drives the Next Generation of Value Propositions

52

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2015

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C O N F E R E N C E P R E V I E W

LOYALTY360 ON THE WEB

Whats NewWhats NewON LOYALTY360.ORG

Whats New


The recently-launched My Member Page is a dashboard featuring content thats customized to the preferences of each member. The dashboard also provides easy access to member-only content, such as Brandbites reports, on-demand webinars, research and more. The My Member Page is a one stop shop for members to access the growing library of Loyalty360s exclusive content.

Recent Loyalty Management online articles include:Loyalty360 sat down with Papa Johns CEO John Schnatter to discuss the critical role of mobile in his companys customer experience strategy, among other things, in Papa Johns CEO: Mobile Strategy is a Key to Great Customer Experience.

Hilton Worldwide Vice President of Digital Innovation Joshual Sloser shares details about the companys focus on empowering guests to tailor their customer experience in Choice and Control Drive Customer Experience at Hilton Worldwide.

Hear from CEO Javier Flaim about how Reclcyclebanks customer initiatives are helping people achieve a more sustainable lifestyle in Recyclebank: Rewards, Education and Metrics to Achieve Real-World Impact.

NEW MEMBER-ONLY FEATURE: MY MEMBER PAGE

GROWING COLLECTION OF ARTICLES ABOUT CUSTOMER EFFORTS AT TOP BRANDS

Brand Panel is an online community available only for brand members of Loyalty360. The community is a b2b networking site for professionals in marketing, customer loyalty, customer experience, customer engagement and related fields to connect with each other in a secure environment. Brand Panel enables Loyalty360s members to make connections with each other and facilitates dialogue where news, ideas, advice and opinions are shared. This is a member-only and exclusive networking site, so users can be assured that the discussion will be relevant and non-soliciting in nature.

CONNECT WITH PEERS, SHARE ADVICE ON THE NEW BRAND PANELADVICE ON THE NEW BRAND PANEL

Learn more about Brand Panel and becoming a Loyalty360 member by contacting Mark Johnson at [email protected] or Erin Raese at [email protected].

Loyalty360 continues to talk with

executives at top brands about the

approach their companies are

taking to build lasting and

profitable relationships with

customers. Be sure to visit

Loyalty360.org daily to stay

on top of the interviews, articles

and news, and dont miss the

in-depth features published in

the monthly digital edition of

Loyalty Management.


Some platforms focuson acquisition

Clutch focuses on Maximizing the Value of your Best Customers

Some platforms focuson retention

Consumer Management Platform

Loyalty and Stored Value

Analytics and Segmentation

Campaign Design

Omni-Channel Engagement

Clutch's Consumer Management Platform empowers marketers with customer insights to drive measurable results.

Are you maximizing your best customers?

Clutch.com 888-541-6789 [email protected]

LOYALTY FORUM: YOUR VOICE


Loyalty360Loyalty360

Data from the 2nd annual Loyalty Landscape report shows that differentiation is one of biggest challenges facing loyalty marketers today. Loyalty programs have proliferated in recent years and evidence shows that consumers are no longer motivated to be loyal to a brand solely because of the loyalty program. Standing out from the crowd is critical in an era when consumers are saturated with options and discounts and promotions are the norm.

We sought the opinion of our Twitter community on the best companies to learn from or emulate regarding differentiation. Several common themes emerged. What we found was the loyalty programs that set themselves apart not only meet basic criteria of being easy, convenient and offer rewards that are relatively easy to attain, but integrate the program with the companys core values and customer experience to make the customer truly feel valued.

EASY, CONVENIENT, ATTAINABLE

The Gap and Banana Republic. Easy & redeemable online and on sales. I'm a busy mother and most of those things expire before I get to them.

@KC_Francophile

Southwest - easy to use points, sends drink coupons, easy to change flights, no high change fees, no baggage fees.

@BlaineButtermor

Starbucks! Why? Mobile first, predictable rewards, payment and loyalty program are embedded in the same app.

@fpizarro

Starbucks and Uber are the best. Why? Both of them are very tightly integrated to their core customer experience and mobile payments

@janluuk

INTEGRATED

Ritz Carlton. I think their customer experience helps drive their customers' loyalty regardless of the 'points'.

@cjyoung900

Virgin America. Their loyalty mimics most in the same group - but their customer service when applied to that, puts them over.

@kargoe

CUSTOMER EXPERIENCE

Differentiating with Impact voice

Diageo, Natura and Vogue, because those brands always make different and stunning activities and experiences

@petrapak

EXPERIENTIAL MARKETING

REI because of the financial structure, cash-back rewards, culture, and community service benefits. It feels good to shop there.

@C2Cseh

SOCIAL GOOD

your

LOYALTY FORUM: BEHIND THE BRAND

BehindtheBrand


WITH ALLYSON KRICHMAN | RYMAX MARKETING SERVICES, INC.

Allyson manages the product sales team overseeing the growth of key accounts and developing new client relationships. Allyson strategically aligns our brands and innovative product offerings within client programs by developing solution-oriented strategies and implementing best practices to ensure clients receive the highest level of service. Recognized as an industry expert by Incentive Magazine in 2007 as one of the Rising Stars: One to Watch, Allysons performance continues to rise as an industry expert. She is an active member of the Incentive Marketing Association, The Incentive Manufacturers & Representatives Alliance Strategic Industry Group, Advertising Specialty Institute, and Promotional Products Association International. With over 10 years of experience at Rymax, Allyson has seen firsthand how Rymax has evolved throughout the years and continues to lead the industry in reward offerings and loyalty program services.

IF YOU COULD PICK ONLY ONE THING, WHAT DO YOU BELIEVE MOST INFLUENCES A GREAT CUSTOMER AND/OR EMPLOYEE EXPERIENCE? AND WHY?

Customer/employee experience starts with the idea to drive behavior that our clients want repeated and I believe the influence on their experience derives from our team producing the highest level of performance. As a premier full service loyalty and rewards organization, we handle our clients demands one-on-one and tailor to the needs of their customers firsthand. This interactive, collaborative relationship, and our mission to under promise and over deliver is what keeps our clients loyal to us. Our team at Rymax puts 100% effort into building strong and trusted relationships with our clients and their customers to ensure their experience leaves them satisfied and well taken care of.

WHAT IS YOUR PERSONAL MOTTO?

Ride the curve is something I say almost every day. When I started in this role at Rymax I told my team, celebrate your success but remember to continue to keep pushing forward. Be proud of your success but always stay on track to achieving your next goal. Not everyday is going to be a success, but when you hit a challenge take a step back. Remember tomorrow is a new day to start up again and ride back to success.

WHO HAS HAD THE MOST INFLUENCE ON YOUR PROFESSIONAL LIFE? AND WHY?

My grandfather, Joseph Finkel was my biggest influence. My grandfather saw things in me that, at times I did not see in myself, his support has pushed me to get where I am today. He taught me to be fair, fight for what I believe in, listen to what everyone has to say and give back to others. The life lessons that he had taught me when I was younger were harder to fully understand at that point in my life, but they are things that now I can relate to and reflect on almost every day.

WHAT WAS YOUR LAST AH-HA CUSTOMER EXPERIENCE? WHAT MAKES THIS MEMORABLE?

There is one customer that stands out in my mind. I received a phone call from one of our clients who said they felt that they were not contributing enough to their program and our relationship. The reason they were not doing anything was because we offered everything their customers needed from the delivery process to customer service. I have to admit I was a bit stuck on how to answer but it was then that I realized how incredible this company is. The Rymax team understands the importance of customer service and our proactive approach for superior service is what our clients need.

performance continues to rise as an industry expert. She is performance continues to rise as an industry expert. She is


WHAT IS YOUR FAVORITE WORD? CHAMPS.

WHAT IS YOUR LEAST FAVORITE WORD? COOL BEANS.

WHAT TURNS YOU ON CREATIVELY, SPIRITUALLY,

OR EMOTIONALLY?GREAT UPBEAT MUSIC.

WHAT TURNS YOU OFF? CHEAPNESS.

WHAT SOUND OR NOISE DO YOU LOVE?

LAUGHTER; NOTHING IS BETTER THEN THE SOUND OF HAPPINESS.

WHAT SOUND OR NOISE DO YOU HATE?

THE SOUND OF SOMEONE SCRATCHING STYROFOAM, IT IS LIKE NAILS ON A CHALK BOARD FOR ME.

WHAT PROFESSION OTHER THAN YOUR OWN WOULD

YOU LIKE TO ATTEMPT?

SINCE I LOVE MUSIC, I WOULD WANT TO BE A DJ, OR TAKE OVER FOR EITHER KATHIE LEE OR HODA KOTB ON THE TODAY SHOW!

WHAT PROFESSION WOULD YOU NOT LIKE TO DO?

ANYTHING THAT WORKS WITH SNAKES.

* Inspired by James Lipton on Inside the Actors Studio we asked Allyson to share her quick fire responses to the questions originating from the French series, Bouillon de Culture hosted by Bernard Pivot.

12345678

QUICK FIRE QUESTIONS*WHAT BOOK ARE YOU RECOMMENDING & WHY?

I recently read The Last Lecture by Randy Pausch. I am now having my sales team read the book and watch his speech at Carnegie Melon. After listening to his anecdotes about his childhood dreams and the lessons that he learned from them, you see that they were not out of the ordinary and are relatable to anyones life. I always try to find new ways to motivate my team and every time I read a passage or listen to his speech I pick up on new ways to apply his insights to my work and life. This book is definitely something I recommend to all managers.

IF YOU COULD INVITE ANY THREE PEOPLE TO DINNER (PAST OR PRESENT), WHO WOULD THEY BE AND WHY?

The three people I would invite to dinner would be my grandfather, Sir Richard Branson and Jackie O. I would invite my grandfather first, so he can see where I am today and share the lessons that I know from his many stories but never had the chance to hear first hand. The second invite would be to Sir Richard Branson. He is involved in so many different aspects of business and humanitarian initiatives and although others think his goals to be a bit crazy, he never seems to be afraid to go after them. I would like to think we could be friends and vacation to Necker Island together. Lastly, I would choose the incredible and sophisticated, Jackie O. I recently went to Daley Plaza in Chicago and visited the museum where I saw the story of JFKs assassination in 1963. To see how she came through that time and carried herself with such grace and poise in the public eye is impactful and truly inspirational.

IF YOU WERE GRANTED 3 WISHES WHAT WOULD THEY BE?

1. Eternal Health: I am very health conscious and love to be active so if I can ensure my health for eternity that would be my top wish.

2. The ability to stop time.

3. The power to read minds.

WHAT TRENDS ARE YOU SEEING IN THE MARKETPLACE TODAY?

As trends are constantly changing, our team at Rymax is always adapting and developing new and creative turnkey solutions to meet these ongoing trends. Everything is cyclical and things that were once popular years ago, such as contests, are making their way back into loyalty programs especially on the merchandise side. Rymax always wants to make sure that when implementing a program for our clients, it is relevant and engages all generations of program participants. Rymax specializes in using segmentation tools that target rewards to meet the desires of every generation and keep participants engaged in the program. One of the major factors is making sure the reward emotional connects to the recipient.

It is important to make programs, events and experiences tangible. In the digital age we are always on-the-go and have everything stored in our tablet or smartphone but sometimes we forget how impactful a memory is; especially when it is retained by using the handbag you redeemed for, watching your favorite movie on the TV you won or simply looking at a printed picture from a past event. The trophy value of seeing and using rewards is invaluable to a companys overall success as it reinforces the memory of how an individual can be recognized and valued by a company and be rewarded for their participation.

WE LIKE TO END THESE INTERVIEWS WITH SOME WORDS OF WISDOM. WOULD YOU PLEASE SHARE A TIP OR KEY LESSON YOUVE LEARNED OVER THE YEARS THAT COULD HELP THE NOVICE MARKETER?

The biggest advice I give anyone is, get involved. Dont let your title or role limit your involvement in all aspects of the company. If you have an idea, make sure you speak up and share; this might open the eyes of your colleagues to things they might not have seen before. You are creating a collaborative environment and this will also show your worth to the company. A few years ago a friend sent me some-thing called, Reason, Season or Lifetime.Its message is something I apply to my work but it could be applied to any business model.

Reason ask the why and the goal of the program you are going to execute.

Season make sure the program is launched to get the best traction and ROI for your clients and end results.

Lifetime all programs need to have a positive impact that will have traction and carry forward throughout the years. L

20 yearsLoyalty360 congratulates Rymax on


LOYALTY FORUM: BY THE NUMBERS

A Report on Email Placement Rates

Signed, Sealed and Delivered?

Email remains one of the most valuable tools for marketers to stay connected with customers. Yet, the proliferation of mobile and constantly evolving filtering tactics employed by mailbox providers make it increasingly difficult to reach customers inboxes. A recent study by Return Path showed how marketers are performing with inbox placement a critical metric for generating strong return on email marketing programs!

of emails land in the inbox

go to a spam folder or are missing altogether

83%

of emails from U.S. senders

reached the inbox87%of emails from

Health and Beauty senders

Health and Beauty 96%

of emails from Insurance

senders 92%

of emails from Apparel, Atomotive and

Food & Beverage senders

Apparel, Atomotive and91%of emails from

Canadian senders reached the inbox83%

of emails from German and

Austrian senders reached the inbox89%

of emails from Brazilian senders reached the inbox60%

11%

of emails arrive during the months of November, December and January

85%When looking at inbox placement by country

Inbox placement rates are strongest for the following industries

2015,000

365

EXCLUSIVELY

THROUGH RYMAX

For 20 years Rymax Marketing Services has been the trusted loyalty marketing provider solely focused on creating programs and events to drive ROI through brand name rewards. Organizations partnered with Rymax see increased employee performance and retention, customer loyalty, and overall revenue. Contact us today to see what 20 years as the industry leader can do for your business.

www.rymaxinc.com/L360 1.866.879.2581Copyright 2015 Rymax Marketing Services, Inc. All rights reserved.

Incentive Solutions Delivered. Worldwide.

YEARS

PRODUCTS

DAYS OF ENGAGEMENT

202020THROUGH RYMAX36536520

LOYALTY FORUM: BY THE NUMBERS analyze

understandProgram Behavior

Consumer Loyalty

26%Increase in loyalty program

memberships from 2013

Amount of loyalty program memberships US consumers hold

3.3 BILLION

Where consumers are participating

578 Million

434 Million

356 Million

Credit Cards (up 5%)

Specialty Stores

Airline Frequent Flyer (down 4%)

Source: 2015 COLLOQUY Loyalty Census 14 Loyalty Management LOYALTY360.ORG

Increase in program memberships 29 from 22;

activation fell 4.5%

Programs per householdPrograms per household29 Number of programs theyre actually involved in12

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2015

April 27 - 29, 2015 | Loews Royal Pacific Resort at Universal Orlando | Orlando, Florida

retainretainretainretainretainLoyalty Expo is a true Voice of the Customer-driven, best practice-focused customer loyalty and reward

conference. By attending, youll have the opportunity to network with hundreds of your fellow marketers

and hear how they are reaching their customer relationship-building goals. Market leaders will be sharing

their experiences and insights on customer retention strategies and trends. Attendees will leave Loyalty

Expo with an understanding of new research, technologies and solutions to aid their organizations on the

customer loyalty journey.

powered by

registernow!www.loyaltyexpo.com


FEATURES

When talking about building customer loyalty, Hyatt Hotels & Resorts eschews relying on the word program.

For Hyatt, a program often implies a set of narrowly defined steps that attempts to invoke a sterile cause and effect reaction. But Hyatt officials understand that fostering genuine customer loyalty involves so much more.

This is especially true in the hotel business, where tremendous vari-ability can exist among the expectations of business and leisure travelers.

Simply put: Different people expect to be treated differently. And this is why Hyatt is moving toward the loyalty experience.

Building a loyalty experience means effectively understanding the dynamic nature of customer interactions, adapting quickly to changing needs and expectations, and developing a high degree of empathetic acumen.

You cant commodify customers, Jeff Zidell, Senior Vice President of Hyatt Gold Passport, says. Youve got to be able to read them and deliver accordingly. We have employed a lot of new techniques to ensure that we are engaging with them and being very empathetic, and listening and understanding the cues on how that customer wants to be treated.

The unique environment of the hotel industry makes this need for a highly personalized approach to customer engagement all the more

Hyatt Builds Customer Loyalty Around an

Mark Johnson Loyalty360

Experience, Not a Routine


crucial. Guests interact with hotels in a number of ways that transcend their typical relationships with most other brands.

Since one does not sleep at a restaurant or shower at a retailer, a hotel provides a much more intimate setting. It is a temporary home away from home and, therefore, elicits an incredibly varied range of particular habits, wants, needs, and expectations among customers.

A business traveler might be all about efficiency and efficacybe quick, be easy and Im gone, Zidell explains. A leisure traveler might want the best hole-in-the-wall restaurant or that undiscovered find. A big piece of our business is understanding how you read customers and give them service in real time based on who they are.

To accomplish these goals, Hyatt begins by looking within. The espoused company philosophies must be truly embraced internally before they can be effectively demonstrated externally. And this starts by valuing and empowering associates at every level of the organization.

Hyatt, in effect, leads by example, and Zidell sees a definite link between how Hyatt treats its colleagues, and the way they in turn treat customers.

The onus is upon us to treat our people just the way we want them to treat our guests, Zidell explains. We have to provide a spirit and a culture of care and generosity, and sincerity and empathy internally. Our colleagues around the world feel good about coming to work and they feel that we uphold and help them to be their best.

With a focus on their work force and their guests, Hyatt always strives to create experiences that are increasingly more memorable, more respectful, and more uniquely personal. And thats what suitably keeps colleagues happy and guests coming back.

In the end, it all returns to Hyatts attempt to build customer loyalty around an experience, and not a routine.

Loyalty is customer advocacy, Zidell says. Why do you choose [a] brand? Not because they give you something thats prescribed. Its how they make you feel. You want customers who believe in your brand, beyond what you deliver to them day in and day out. Customers who believe in the promise of what you stand for.

Mark is CEO & CMO of Loyalty360. He has signicant experience in selling, designing and administering prepaid, loyalty/CRM programs, as well as data-driven marketing communication programs.

The onus is upon us to treat our people just the way we want them to treat our guests.


LOYALTY FORUM: Q&A

What are best practices for creating consumer awareness for programs or initiatives that are designed to build customer loyalty?

-Barb Olson | Cogensia Loyalty Solutions

Arm the Front Line! Your front line touchpoint with your customers is the most critical to make them aware of your initiative, and get them to enroll and engage in your program. This is when its most relevant. Display signage in-store or at your front line touch point and train your employees to simply introduce and invite customers to enroll. This is the most effective means to create awareness and engagement.

For retailers, typically over 80% of enrollees are from stores. For example, Walgreens does a tremendous job of this by prompting every customer at every transaction to enroll and use their Balanced Rewards program. Its fast, easy and consistent. Walgreens has over 85 million enrollees today!

For non-retailers, the same principle holds. What is the front door to your business? Is it your website, front desk, reservation agent? Educate and arm your team members to introduce and invite your customers to participate. Keep it simple and immediate. Also, be sure your team members understand the big picture of how your initiative will help both them and your company win.

Ask the Experts:

-Kevin Nix | Stellar Loyalty

-Chris Teso | Chirpify

From a strategic perspective, there are 3 principles we recommend:

1. Be Unobtrusive: Tailor your message by using Personas as your guide. Sign-up should be 30 seconds or less.

2. Create a Narrative: Help your customers imagine themselves as the protagonist in the story you are telling.

3. Share the Details: Deliver the right balance of simplicity and specificity. Make it easy to understand what the program entails and benefits.

More tactically, here are several best practices to consider:

In Context

The ideal moment to generate awareness is when your customer is already interacting with you. From online browsing, in store shopping, checking-in at a kiosk or on their smartphone to registering new products for warranty on your web site. These captive moments are your most golden opportunities to promote new loyalty programs or initiatives. As such, it is imperative that you train your sales and service personnel to tell your story in a compelling manner.

Empower Customer Advocates

Your customers are your most credible marketing source. Build a VIP network of customer advocates to be your promoters. Engage them early on in design and feedback for your new loyalty initiative, and then empower them to build awareness through referral offers, crowdsourced content via communities, etc.

Align to a Cause

Customers want to be associated with brands who share their values. Align with a cause and build awareness for your brand and programs within this context. It must be authentic and true to your brand.


As consumer communication channels proliferate, a solid omni- channel approach to generating awareness for initiatives and/or programs designed to drive loyalty grows in importance. In doing so, marketers have to meet their customers where they are at with the right message. The days of spray and pray are over. Rather, best practices today dictate that brands personalize communication to consumers, sharing specific meaning and value. Practically what that means is creating a 360 degree view of consumers, understanding who they are on- and off-line and pairing that data for personalizationeven down to how that consumer likes to receive their informationwith the right message at the right time. In this way, brands can evangelize programs to consumers with the right communications vehicle at the right time, with the right message. In turn, consumers will help share the word, creating earned media opportunities.

For example, if a retailer wanted to promote a new initiative to drive loyalty, they might blend in-store signage with a CTA to engage on social media. This gives consumers a public remote control to convert to a call-to-action or advertisement. By connecting off-line to online you can better understand the customer while increasing your brand visibility. The retailer in this case would also seek to connect the consumers social handle(s) with their CRM profile to gain a holistic consumer view, marrying it with email, location and other specific data to tailor future program outreach. To kick-start your efforts, try socializing an existing email list. For example, a hotelier might combine a Twitter or Instragram intent with an element of the loyalty-building initiative sent over email to link social handles with email addresses. In this way, brands are able to socialize traditional communications vehicles, taking them from 1:1 to 1:many.


FEATURES

Bill Brohaugh Loyalty360

Bruce Rogers, Chief Insights Officer at Forbes Media, illustrates an example of how to build a customer-centric culture.

When Polaris, the manufacturer of snowmobiles and other vehicles, brought in Tim Larson as VP of Global Customer Excellence, Larson focused on changing the conversation from units to customers. Statements such as: We added 1,000 customers this month took power.

The only way such statements became meaningful was because data was attached to them, Rogers says. The change was an amazing, dramatic, and transformational moment. It changed the conversations between Polaris and its dealers, and it helped turn the culture around. The result seemed to be a great success. Polaris exceeded all of its goals, the stock went up, and the Board was pleased.

Rogers said that developing customer loyalty is difficult in an organization that talks only about units sold or interactions and users, or just uses the language of numbers alone, and doesnt talk about people-centric data.

Rogers admits that the phrase people-centric data sounds like an oxymoron, yet companies risk losing customer focus as they grow, and work to scale their business.

In order to scale, organizations must get good about process, Rogers explains. That presents the innovators dilemma: Process becomes more important than anything else and doesnt necessarily help build interactions with customers.

The Role of Data in the Culture of the CustomerCustomer numbers must resonate internally, and they must motivate customer action. In fact, this is the core of Rogers advice for taking that first best step to become simultaneously data-centric and customer-centric.

First, understand where data is elevated within the organization.

Mapping data to the overall business KPIs gets everyones attention, Rogers says. In our research about characteristics of highly effective marketing organizations, we see that as the single most important distinction.

Rogers points to a delta of 20 percentage points between high-performing and low-performing marketing organizations, based on the KPI factor alone.

How do you roll up marketing activity and customer interaction into KPIs that drives the business? he says. Is marketing held accountable to those KPIs? Making that connection initiates the efforts to connect the data points, so that you have a better, fuller view of the customer.

KPIs, however, can also stand in the way of evolving to customer-centricity.

Legacy KPIs that are soft or fuzzy were based on what youre capable of measuring, Rogers says. Customer satisfaction ratings and Net Promoter Scores, brand tracking, measuring the presence and growth of your social media engagementall of those are important. Yet, those are not the type of metrics that the entire business runs off of. They are elements of it. Those are going to change.

Building the Culture of the Customer: Insights from


Depending on such metrics has a small-sample flaw: Your customer satisfaction score and the answer to that one question about intent to refer a brand to someone else can be based on a temporary foible that you had that can obviously be addressed. That factor challenges brands.

Although accountability is key, so is measuring that accountability. As revealed in Loyalty360s 2014 Customer Experience Landscape survey, organizations that do very well have a good grasp of the more challenging metrics: Loyalty program ROI, profitability of customer experience, and the ROI of technology, for instance. They measured their customer experience efforts 9.5 different ways on average, where other organizations measured 5.5. And the long-term metrics were challenging: marketing organizations measure such things as response rates and return on a promotion, as opposed to a more long-term perspective.

Thats because people tend to measure what they control, Rogers explains. All too often, a marketing organization controls communications assets, and not the touch points with the cus-tomer. Customers dont care that organizations are siloed. They dont care that your call center is run by your operations group, or that your social media is not connected to your CRM. Say a customer has a bad experience and tweets about it. Whose responsibility is it to respond to that and to do something about it? Is it marketing? Customer service? Operations? Logistics?

Rogers notes that when all customer touch points, including data related to those points of contact, sit in separate silos and are owned by different parts of the organization, the company struggles.

The siloed organization is probably the biggest problem to a customer-centric approach, Rogers says.

The Undercover CEOThis then takes us back to concept of the C-suite mandating and facilitating corporate-wide communication, interaction, and sharing customer dataand taking responsibility for it.

Highly effective CEOs assume the obligation of taking the 360 view of the organization, Rogers says. Even if they dont have responsibility for all touch points, they become advocates for the customer across those touch points, and help break down silos. Maybe theyre not going to own the CRM database and maybe theyre not going to own the call centers in India or the Philippines, but they make the point to connect those dots so that they are indelibly the voice of the customer within the organization.

And none of this will be easy.

Maintaining that customer-centric culture is going to take enormous energy and focus on the part of the CEO and some evangelists within the organization, Rogers says, adding that evangelists refer to people

who join the C-suite in promoting customer-centricity within the company.

From that standpoint, sometimes its not about numbers, Rogers says.

Sometimes its not data, he explains. Sometimes its going out and going through the experience yourself.

Rogers advises decision-makers to, in a sense, go the Undercover Boss/mystery shopper route. Shop as a customer. Phone the call center. Use the ecommerce website.

Experience your service or your product as your customer experiences it, he says. Then the answers are pretty evident.

Easing the Transition to Customer-culture The journey to a "culture of customer" is never a quick, seamless transition. Many companies make the mistake of taking "the Manhattan Project approach"a single-focused, concentrated endeavorRogers says.

Its hard to get organizational buy-in when things take a long time, Rogers explains. Transitions are expensive and the world changes before the grand integration. One solution? Create small incremental wins, particularly around algorithmic or machine learnings that can dramatically drive marketing efficiency and improve customer interaction.

Rogers shares an example of this strategy.

Lets put this in the perspective of those that are incrementally winning their way up to earn the right to integrate data solutions throughout the organization: If marketing within the organization is showing a 400% return and an increase in efficiency in a certain marketing initiative because of data and its effective use, and if this is an enhancement from machine learning, the right to use that information works its way up the food chain, he says.

Viewing such incremental wins motivates the rest of the organization to apply the thinking of using the data to measure everything we do and tie it back to ROI.

Of course, every CEO wants to do that, but its extremely complex to do it globally in an organization, Rogers explains. To change the culture, start at a project level and build it up with an evangelist who has the potential to share the message with the higher ups in an organization.

Like Polaris, says Rogers, Changing the culture, changing how the organization thinks and refers to customers, is the first, foremost, and most transformative step that an organization can take. L

Changing the culture, changing how the organization thinks and refers to customers, is the first, foremost, and most transformative step that an organization can take.


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A recent study* noted that CPG brands can realize significant gains in cross-channel growth through digital collaboration with retailers and distributors and better internal integration. But, the study shows that a large majority (70%) of CPG heads of sales believe this potential may not be realized because there is a lack of consistent, shared consumer data to improve decision-making. What is your take on this survey and what are CPG brands doing well, related to customer loyalty/engagement, and what areas do they need to improve in?

Kells: This survey brings up a major pain point for CPG brands. Its very difficult to put the pieces together in the customer journey across channels, and now particular to digital, across devices. In general, CPG companies have a firm grasp on understanding each channel and its sales effect as a silo. As this study indicates, understanding the whole picture is where both brands and their partners need improvement.

Jim Tierney Loyalty360

Creating a Holistic Customer View:

Consumer Packaged Goods (CPG) brands, according to a recent study, can realize significant gains in cross-channel growth through digital

collaboration with retailers and distributors and better internal integration. But the research shows that a large majority (70%) of CPG heads

of sales believe this potential may not be realized because there is a lack of consistent, shared consumer data to improve decision-making.

Kevin Kells, Director, Global Client Solutions, at Google, weighs in on this issue and several other critical ones facing CPG marketers in this highly competitive landscape where customer loyalty and customer engagement are the esteemed pots of gold. Kells offers fascinating and comprehensive insight regarding CPG brands and their place in the loyalty marketing arena.

CPG Insights from Google

*The study, CPG Sales Leaders Go Multichannel; A Guide To CPG Sales And Channel Management In A Digital World, conducted by Forrester Consulting on behalf of Accenture.


Looking at this through the digital lens, theres a disconnect in understanding the overlap of reaching the same customers on different platforms and retailers sites. Its all about reaching customers at the moments that matter, not bombarding them with ads.

I have no doubt this will get massively easier and better over the next decade, as the industry (manufacturers, agencies, data and technology companies, and media partners) find ways to share information in ways that protects consumers privacy, yet allows CPG marketers, for instance, to better understand how each and every dollar is spent and also to look across all channels on an apples to apples comparison. This will take shape not only on the efficiency side of the equation, but also on the effectiveness side of the equation; what are people actually doing after they have heard about or engaged with my brand. As the study points out, thats not an easy thing to do now, but it will get easier and it has to because the CPG companies will demand it.

Can investments in Big Data capabilities make direct customer loyalty or CRM programs achievable for CPG brands?

Kells: I would try to not get tripped up by the term Big Data. The reality is it is just what it is: data. And that data will be full of all sorts of interesting facts, actions and engagement metrics. Whats the big idea is using often very simple tools to start to organize the data in a way that allows us to glean real insights from all of it. Insights that lead us to new ways of thinking and new ways to grow categories and brands.

These insights allow CPG brands to get smarter about who their customer is in a way that respects their privacy. Using data to find macro-level consumer trends allows marketers to move beyond thinking in traditional demographic buckets and targeting the most relevant customer groups for their brand based on psychographics and real consumer behavior.

In the digital space brands can look at insights and trends in order to be smarter about how, when and where they talk to their customers. For example, if a brand knows

that a customer has engaged with their site or purchased from them in the past, they can tailor their approach creating more savvy and advanced communications.

How can CPG brands differentiate themselves in todays crowded marketplace and build brand advocacy?

Kells: The most differentiated and successful brands are able to tap into what we frequently refer to at Google as moments that matter. These are the key times when consumers have a genuine need. It can be something as small as grabbing breakfast on the go Monday morning, or something bigger like preparing for an interview or becoming a parent. Brands that are able to be a trusted partner in these moments and solve the customers need are able to build true, lasting brand advocacy. Also, the most trusted brands build loyalty again and again because they fit into peoples lives, not the other way around. That is especially true to watch out for as folks can often get lost in trying the latest, greatest technology to either solve a problem that doesnt really exist or try to get the person to do something that they would never do in real life.

How do you define customer loyalty and has that definition evolved in recent years?

Kells: The definition of customer loyalty varies depending on the brand and product. For lower consideration products, it might mean that the customer grabs the product off the shelf every time they need a refill. For other products, it might mean by using or wearing the product, the customer sees the brand as a definition of their values and who they are as a person. While most marketers likely want to achieve the latter, the most important part is to keep customers happy.

In recent years, this spectrum of loyalty has become more apparent as customers have more and more places to publicly display their likes and dislikes, which is forcing brands to adapt to how they manage customer service to be more immediate and personalized.

Engaging experiences are the baseline for creating loyal customers. How should brands create the culture by which engaging experiences (even though they may be more expensive to put in place and more difficult to measure) are table stakes for brands?

Kells: In an environment of increased account-ability, companies should remember that not all programs can or should be evaluated in the same way. Any marketing activity should have clear and realistic goals set up front and celebrated when reached (emphasis on clear and realistic). Creating engaging experiences for customers shouldnt be expected to drive the same action as traditional tactics. Encouraging innovation and not being afraid to fail is key to keeping brands relevant and fresh. New ideas and taking calculated risks should be regularly recognized and rewarded to encourage marketers to think outside the traditional box.

How can we influence the employees in the channel / process to make sure they are bought in and engaged in the loyalty methodology for the consumer?

Kells: Its always a best practice to put checks and balances in any business decisions such as how the decision will impact costs, revenue or company employees. Ingraining the impact on the customer as one of the checks keeps this top of mind for employees. One of our core beliefs at Google is to put

Continued on page 24

Encouraging innovation and not being afraid to fail is key to

keeping brands relevant and fresh.


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the user first. This is always top of mind in our decisions across the company, so other companies can do this as well by prompting employees to think how will our customers react to this?

Marketers are tasked to be more data-centric than ever before, yet the challenge of creating actionable insight from data is more challenging than before. What is your advice for marketers?

Kells: Simplify. Many times marketers get bogged down in data dumps and granular analyses. The most powerful insights are easy to articulate in one sentence and always tie back to a human truth, and best stated in plain spoken language. Use the data to find a trend and then humanize it because the data is really just an aggregate of what your customers do, need and believe. Use it to listen to their needs and actions.

One of the strengths of digital is that measurement can be real time, making it immediately actionable versus waiting for after the fact reports. At Google, we now offer metrics like viewability and Brand Lift in near real-time, which allow advertisers to hone in on their key KPIs and adjust campaigns still in market based on their performance. Staying up to speed on these types of tools and the available levers help simplify taking action when it makes sense.

In traditional push marketing, we measured effectiveness by response rates and CPMs and the ability to hit as many eyeballs as possible to increase trial and conversion rates? How is today different? How do you effect change with a CMO who still may be push focused?

Kells: Push can still be valuable, but the conversations are shifting from simply CPMs and impressions to quality of delivery. Viewability is a big industry buzzword these days, but basically it means did my viewer actually have the opportunity to see my brand, and was the view from the right customer.

Also, many brands are focusing on more engaging programs that facilitate the two-way conversation with a customer. And that type of back and forth helps build brand loyalty and ultimately advocacy over time. New types of digital formats that invite user choice like skippable video or engagement ads allow marketers to only pay when customers engage and ensure they only reach those who are truly open to the message.

As far as CMOs, our experiences at Google have shown we can help drive business for CMOs the most when we are 100% in sync on a few key areas: what are their biggest challenges and opportunities, what do they feel is holding them back, and how ready are both of our companies to attack the issues head on, together. We are big believers in joint business plans, and where we have seen things change over the past few years is moving from corporate or centralized plans, to ones more specifically focused on their most important categories or brands. The great thing is that all the basics are still the same at the core; its still largely about insights and listening/storytelling. What has changed is what you then actually do, and those choices for marketers are infinite now. So a tight plan, focused and done together, helps put a filter in place to make sure were moving with pace and pushing the biggest areas for growth.

Can you offer a high level overview of your customer philosophy and share how this perspective helps drive more effective engagement and therefore better marketing outcomes?

Kells: Treat your customers as people. Behind all the data, sales numbers, and marketing strategies, customers are people who have needs and desires and buy products to fulfill those. Taking the time to truly understand the human element and speaking to customers in their own language will naturally lead to more brand affinity leading to engagement.

In the move toward customer-centricity; if you could give one piece of advice to a brand to help them increase loyalty and engagement with their customers; what would it be?

Kells: Listen. There are so many avenues now to understand customers intentions. Tap into all of them. Whether that be traditional research, social media, Google search trends, or any other source. When customers openly express themselves, take advantage of that opportunity to listen to what they want. Take the time to identify the moments that matter and use those keys times to build loyalty and engagement.

What are the challenges you see with multichannel communication for todays marketers and how do we best address this opportunity for increased engagement?

Kells: One of the biggest challenges for multichannel engagement is the sheer number of channels that now exist. The media landscape has exploded and become increasingly more fragmented as more platforms and networks emerge. To best increase engagement, marketers should keep consistent messaging but customize as needed for customer experience on different platforms. At YouTube we frequently see that made for YouTube content better resonates with viewers versus TV content repurposed for digital. The brand message should be the same across channels, but be tailored enough to feel authentic to the environment.

We believe in a process of expectation matching; the understanding that the consumers expectation change based on their engagement with a brand and the stage of the customer lifecycle. Brands struggle with this dynamic and this idea; yet want to see it put in practice? What is your advice to marketers?

Kells: Similar to what we discussed above, use the data available to you to understand these different customer lifecycles, and also deeply try to understand what goes on in an average persons day. Search is a great opportunity to customize your message as the searches themselves give a clear indication of where in the purchase cycle someone is. Being strategic about how you answer peoples questions, you can tailor your message to those who are further upstream in the research phase versus those who are ready to buy right now. L

Google continued...

When customers openly express themselves, take

advantage of that opportunity to listen to what they want.

[ empower me ]

Each of your customers is unique their needs, how they communicate, what they expect. We can help you uncover those differencesand deliver truly personalized engagement.

For more information about customer engagement optimization, visit www.verint.com.

Customer engagement optimizationDont just deliver experiences.

engage. 2015 Verint Systems Inc. All Rights Reserved Worldwide.

VerEngageEmpower8.375x10.875.indd 1 12/4/14 6:42 AM


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Jim Tierney Loyalty360

NCR Corporation, a global leader in consumer transaction technologies, always wants to build brand loyalty by helping its customers/clients develop loyal customers.

And for Jon Lawrence, NCRs Senior Director of Solution Management, the idea of helping customers build loyalty for their customers is not new.

As a platform, weve been a provider of loyalty solutions for the past 10-12 years, Lawrence says. When you look at a restaurant, its very interesting and fascinating because more than 70% of a restaurants revenue comes from repeat customers. So, really, loyal customers drive that. Whether it relates to QSRs or fine dining, theres some reason to come back. Finding ways to build that loyalty has been a goal of many operators for quite some time. The challenge, historically, has been how do you make that connection evolve into a relationship.

Lawrence points to the massive rise in smartphone usage globally as a critical piece of todays customer loyalty puzzle.

Whats changed in the past three years is the explosive growth in smartphones, Lawrence explains. People who didnt have smartphones before or carry cards or had gone through a more challenging process when signing up for loyalty programs, now those barriers now have either been removed or are much more seamless.

Lawrence says NCR has seen the lift over the past few years from the growth of mobile.

Its all about the idea of being a seamless or frictionless experience, he says. It has grown from loyalty discussions to a broader customer engagement level. Fast forward to today and consumers are able to place an order from their smartphone, pay from their smartphone, and the benefits of loyalty are embedded in the experience.

Whats more, the operator side of it is even more fascinating, Lawrence adds.

Because were able to do a whole lot more in personalizing each transaction, he explains. More traditional loyalty marketers look at dollars spent, visits, and provide a reward. Now with more information available, those things can evolve to something like surprise and delight, or finding ways to engage consumers differently based on how they engage with a certain establishment.

In taking something thats a core part of a persons life - like a smartphone - and making it part of a more seamless way of interacting is what makes this loyalty equation so powerful, Lawrence explains.

Merchants want consumers to download their apps, Lawrence says. Some data has shown that as much as ninety percent of apps downloaded are only used once or less so you want an

experience to create stickiness to the brand.

For restaurants, in particular, engaging customers from the point they are greeted to the point they exit is crucial. According to Gartner Research, restaurants with a loyalty program see a 4%-5% lift in total sales, while a 5% improvement in customer retention can increase profits from 25%-125%.

We, as consumers, love to give feedback, Lawrence says. Finding ways to enable consumers to provide that feedback in a way that feels like a seamless part of the overall guest experience can add even more value to the overall goal of developing more repeat customers. Weve been working with our customers to improve survey response rates through applications that are integrated into the mobile consumer experience.

NCR Corp. Case Study

Building Brand Loyalty With Customers:


ARE YOU REPLACING HOSPITALITY SERVICE WITH THE MOBILE PHONE?

A mobile guest engagement strategy can enable customers to connect on their own terms, Lawrence explains. Some customers want to turn their mobile phone into a remote control for the restaurants while others want a more conversational experience. A well designed consumer engagement platform can allow the operator to tailor the experience to their brandwhile still developing loyal customers.

As far as buzzworthy customer engagement methods, youll be hard pressed to find topics that are as popular as mobile, Lawrence says.

The level of interest is very, very significant, he says. For those companies implementing or researching strategies, you have multiple points of consideration including loyalty as well as payment, ordering, feedback, and location awareness. All of those things can tie into the transaction which is generating a whole lot of interest and excitement.

Brands are moving to mobile to drive customer engagement because its really what consumers are looking for, he says.

Millennials are digital by nature, Lawrence says. That demographic is really the future customer for our customers market.

Mobile is a very important part of the transaction.

The future of these businesses is having fewer terminals that face the staff and more that face the consumer, Lawrence says. Digital spend is becoming more and more important.

CHAMPION OF CUSTOMER EXPERIENCE AT NCR

From NCRs perspective, were a consumer transaction leader, Lawrence says. But in terms of Customer Experience, were focused on our customers, and whatever branded experience theyre trying to achieve. For us, its a combination of our product development and product strategy teams getting more engaged with our customers through individual meetings, conferences, events, and trade shows.

NCR focuses on helping companies better understand some of the challenges they have as it relates to creating a great customer experience and then using our technology platforms to solve those challenges, Lawrence explains.

The tendency is to look more at technology as enabler of customer experience, Lawrence says.

We want to help create unique and great guest experiences end-to-end and we are starting to see more and more success by leveraging technology, he says.

More and more Internet traffic is from mobile devices than ever before, Lawrence says, and we want to take our technology platforms, help our customers leverage this trend, and solve challenges around creating fantastic guest experiences.

CUSTOMER LOYALTY

The perspective of loyalty is becoming one of a creating a more personalized experience, Lawrence says. Historically, loyalty programs might have been viewed more as a one size fits all approach. However, great experiences can be very different for two people. Yet, more consumers almost expect to be rewarded for loyalty. A key goal for any loyalty program is to create an incentive and desire for the guest to want to come back. By strengthening the connection between the merchant and the guest into one that moves closer to a personalized relationship, the merchant can not only help build a more loyal customer base but also help turn those loyal customers into promoters.

Understanding and quantifying the value of each guest and particularly loyal customers is significant, Lawrence notes.

From the marketing side of it, restaurants want to acquire new customers and more deeply engage existing customers, he says. A key part is figuring out how to engage your customers whenever they want, however they choose.

NO MORE ANONYMOUS TRANSACTIONS

What used to be an anonymous transaction is now becoming more personalized, Lawrence says. Systems are generating a lot more data and what we help our customers do with that data is very important. CRM and other analytic tools now are becoming a more element as the need to turn the data into information becomes more important to the overall guest experience. For example, should everyone get the same promotion or should the promotion be tailored to a given customers traffic pattern and buying preferences?

When brands communicate with customers, it should never feel intrusive, Lawrence notes.

It has to feel like an experience and not one that is overwhelming and intrusive, he says. When brands try to be more customer-centric in their engagement strategy, its important for them to look at platforms to support an evolving consumer landscape. Everything is changing so fast, and its often hard to know what is going to be the answer or if there will be a single approach, but were all pretty sure the consumer will ultimately make that decision. L

Understanding and quantifying the value of each guest and particularly loyal customers is significant.


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Yes, there are laurels in the logo of Caesars Entertainment. But when it comes to customer engagement and customer loyalty, the company doesnt rest on those laurels.For this organization, every customer is a king, a Caesarthus the company name. But despite this iconic reference and its glorious past, the gaming and hospitality company is firmly lodged in the present and the future. Its groundbreaking Total Rewards customer loyalty program set standards in loyalty marketing and cus-tomer data analysis, and Caesars is working to reach new standards through expansion and evolution.

Total Rewards began by rewarding customers for their gaming activityslot machine play, for instance. Caesars wisely expanded Total Rewards to reward activity (and track customer data) at Caesars hospitality assetsincluding hotels, retail shops, concert venues, night clubs, and day clubsthink night club with sun, a pool, and customer swim suits instead of dresses and jeans). The day club engages the customer at what traditionally was a slow time.

Caesars even partners with a combination bowling alley and concert venue in Vegas: Brooklyn Bowl is a 3,000 person concert facility, and you can bowl while enjoying such acts as Umphreys McGee and Jane's Addiction.

The expansion also went virtualplayers of the companys five mobile apps such as Caesars Casino and Slotomania earn Reward Credits and benefit from the Total Rewards experience via increasingly popular mobile gaming.

Partnerships with Visa, Starwood and Fuel Rewards have also accelerated program earn.

This expansion presented incredible opportunities, including customer awareness of the value of directing their gaming and hospitality dollars toward a single organization. Players earn Total Rewards across the enterpriseso Reward Credits can be earned, for example, in Vegas, Atlantic City or Cincinnati, and can be burned there or in Kansas City or Cleveland or at any Caesars property, whether its Caesars Palace, Horseshoe, Ballys or any of the other brands under the gaming companys umbrella.

Weve always used the idea that we are a hub-and-spokes network, VP of Customer Loyalty Michael Marino explains. Our network is more powerful than any individual property. If youre in Kansas City, the reason you spend your gaming dollars with us as opposed to walking across the street to the other property that's right there, is that you know that the more you game with us, the better your benefits are going to be if you go to Vegas or New Orleans or Atlantic City or Tahoe or Cincinnati. The bigger you are in our system, the better it is for you.

Expanding the program and its offerings gave Caesars a number of advantages:

It fills a need. What do you do on a Saturday, from 10-6? Marino asks. Sleep, maybe gamble a little bit. At the time, it was assumed that all you were going to do is gamble. Nowadays, were going to give you a lot of other options.

For instance, the bars in the casinos look much different than how they used to look. Now they are presented as places where youd like to hang out.

It provides opportunity for learning about good customers frequenting non-gaming locations, and giving those customers additional incentive to patronize the shops, concert venues and so on that are owned by Caesars.

There are more people interested in the other options we offer who we havent met yet in Total Rewards, than there are gamblers who we havent met yet, Marino says. We have a relationship with most of the gamblers out thereand while there are still plenty yet to meet, were trying to expand our appeal so we can meet those other hospitality oriented people.

And, in fact, recent Caesars investment has concentrated on hospitality offerings, with just three gaming locations (Baltimore, Cleveland and Cincinnati) introduced recently.

Reacting to shifts in the market. Twenty years ago, 70% of Vegas revenue came from gamingnowadays, its closer to 30% from gaming, Marino explains. The nightclub business has exploded, and the dayclub business didnt exist until a few years ago. The dayclub

Total Rewards:Bill Brohaugh Loyalty360

CaesarsEvolving the Loyalty Program


industry is a very big industry today and still growing. Its the same thing you would do at a night club, but its sunny out, and youre around a pool. The music, the sound, the feel are the same. People will pay as much or more to get a position at a day club as they would pay at a night club. And as he says, Its outrageous.

And, of course, it delivers additional revenue.

But the expansion also presented challenges that Caesars continues to address. Consolidating customer information from gaming, shopping and hospitality activity was one element to deal withbut internal software could handle that.

This is the hard part about expanding Total Rewards, Marino says. Total Rewards was built for the gamer. If you were a guy who came in and played penny slot machines for four or five hours, Id treat you pretty well. If you were a guy who ate at the steak house every single day, I didnt know your name or pay attention to you at all. And that person is likely spending a lot more than someone playing penny slots.

The perception of Total Rewards as a program only for gamblers lingers, and communicating the broad range of benefits to potential members has been a challenge. To help meet that challenge, Caesars has hired more hospitality hosts to interact with customers, upsell Caesars attractions and services, and acquire new Total Rewards members.

Were trying to give our hospitality hosts a reason to sell the program to customers and to tell them Whats in it for me? The host can outline the various benefits, and point out how the customers recent purchase be it a big meal or something elsecan be applied toward earning status by joining Total Rewards.

Simplicity was key, but as Marino notes, Its hard to be simple while being differentiated. The art was in the balance.

One tack Caesars took was to make rewards consistent. In the past, customer spend at the slot machine was rewarded with five times as many Tier Credits as the same spend at the hotel or a restaurant. Caesars recently changed the Total Rewards structure to make the earn proposition equal. Part of the rationale is moving customers into higher tiers faster.

We want people who spend money at the night clubs, the restaurants, on entertainment, golf, the spas, and so on to gain higher-level status with the program, Marino says. In the past two years, weve invested more in our high-end hospitality offerings and weve seen our membership increase in both years.

But Caesars still struggled with the hospitality customers who didnt understand or even want the benefits offeredbasically gaming benefits, not very attractive to people who come to Vegas for non-gaming recreation. Yes, they could take advantage of perks like dedicated short lines, but Marino often heard, I dont feel like Im getting enough out of the program.

Caesars recently brought in rewards that aligned with where customers spent their money. For example, elite customers in the Diamond or Seven Stars tiers automatically are given a 15% discount on room rates. Or free appetizers or other advantages of joining the program. This is a huge leap from what we normally do, Marino says.

When Marino joined the organization, he and other Caesars principalssuch as Joshua Kanter, former head of Total Rewards now leading the Hospitality Marketing divisionformed (as Marino phrases it) a SWAT team to consider solving the challenges that

expansion caused. Caesars considered distinct gaming and hospitality programs, But its too confusing.

The two-program discussion evolved into considering giving customers at a certain tier the option of selecting what type of rewards they wanted to receive.

At first all these things sound like good ideas, but the more you get into how this is going to work operationally and how to communicate to our customers, it just doesnt work, Marino explains. Soagain with simplicity in mindCaesars decided to make the rewards available to all members, despite their main interest. The point is that we shouldnt restrict those who like to gamble from rewards like going to the pool, and vice versa. We shouldnt restrict those who like going to the spa from taking advantage of the gaming offers if thats something they want to engage in. It gives you more flexibility to choose your own adventure through the program.

Marino notes that the contract between Caesars and Total Rewards members is the exchange of data for value, And I want to make sure I use the data to deliver something relevant in return. Rather than giving you $20 at the spa and $20 at the night club and $20 of gaming and $20 of food, if we know that all you care about is food, lets give you $80 dollars of food.

Ultimately, Were striving for a program with broad appeal, Marino says. Theres value to everybody. From the really big customerwell do anything for youto the customer who shows up every single day, we have something for you. With the customer who shows up once a month, we have something for you as well. L

30 Loyalty Management LOYALTY360.ORG30 Loyalty Management LOYALTY360.ORG

LOYALTY FORUM: TRENDING NOW

SOCIAL NETWORKS AS SHOPPING PLATFORMSSocial networking sites are adding purchase functionality, enabling brands to connect commerce with community and content what some call the internet trifecta. In mid-2014 Facebook and Twitter announced testing of Buy functions with a limited set of retailers; look for the functionality to be widely available soon. The Like2buy platform from Curalate is already being used on Instragram by brands such as Target and Nordstrom. Houzz.com, a social network for home design, connects consumers with professionals in the industry, displays of their work and the ability to purchase the products featured in the content.

Brands Selling

on Social:

Who is Reimagining

the Customer Experience?

Where to Use Mobile or

Chip and Pin:

NEW PAYMENT SOLUTIONSBrands are tapping into new technologies to enhance the payment experience and make it more secure. The release of Apples mobile digital wallet and payment service Apple Pay has created an increase in overall adoption of mobile payment functionality by merchants. In the wake of widespread security breaches, the increased security provided by mobile payment services is an added bonus. In the U.S., a looming October, 2015 EMV liability shift mandate is driving merchants to accept Chip and PIN credit cards (rather than the swipe and signature technology used widely up to this point). Merchants that arent equipped to accept credit cards with Chip and Pin technology will be held liable for costs if and when credit card fraud takes place. Likewise, banks that do not issue chip and pin cards will be held liable. Chip and PIN technology is also expected to enhance security.

REIMAGINING RETAILThe Greek philosopher Heraclitus may have been predicting the current state of retail customer experience when he said The only thing that is constant is change. Change is afoot in customer experience for many retailers, driven by evolving demands and expectations of customers. Same day local delivery is being offered more widely, most recently by grocery chains. Free shipping is becoming commonplace to the point where consumers have almost come to expect it. Online-only retailers are expanding to brick-and-mortar locations in order to expand their market share. Brick-and-mortar stores are turning into lifestyle destinations in hopes to take the customer experience to a whole new level.

TrendingNow

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Bill Brohaugh Loyalty360

The initials CPG do not stand for Changing the Promotion Game but they should.

The traditional business model of food is changing, says Rick Swinkels, Vice President of Global Customer Loyalty at grocery conglomerate Ahold, with stores in the U.S. (including Giant Food, Stop & Shop and Peapod), the Czech Republic, and The Netherlands. And such change impacts grocers relationship with CPGs (which of course refers to the manufacturers of Consumer Packaged Goods).

In the old days, we looked at activity on the shelvessuch as rotation and profitability of SKUs, says Swinkels. A SKU that didnt rotate didnt get on the shelf. Now we know that some low-sellers are extremely important to our best customers. Not stocking those important low-sellers erodes the value of the store to best customers, and erodes their loyalty to that store. For CPGs, thats a totally new business model. We dont challenge the CPGs on their campaigns, but on whats in it for the best customers. What drives their loyalty and what makes them more loyal to the CPG brand as well as to the store?

Swinkels notes that CPGs go for mass communications, which become less and less relevant day by day, and they struggle. They need platforms and solutions to reach their most loyal customers. Those solutions allow the CPGs to shift marketing allocations from mass promotions to targeted promotions. And they can place products with greater margin and lesser frequency because they're important to the best customers.

Expending resources on discounts and mass promotions leads to rewarding disloyalty instead of loyalty, says Swinkels. In other words, such blind efforts court the cherry-pickers instead of the best customers.

The new approach impacts such factors as relations with CPGs, delivery mechanisms, and ways to make purchases. Our culture is innovation, says Swinkels. We stand for strong brands and we stand for innovation for bringing new things alive. We saw that our customers are getting more into online and digital. Also in the Netherlands, we have an online food-delivery serviceone thats been around for 25 years, though it began by taking orders by telephone. We never made any money on it until recently. We

saw the customer moving into new worlds, we saw new business models rising, and we saw enormous growth

for the future. If you want to be relevant for your customers and offer them the

right experience, you really need to be where your customers are.

In fact, Swinkels notes that a customer using the online channel spends 20% more than any other customer.

As an example, diapers take up a lot of shelf space in the small stores in the Netherlands. It's all about dividing the assortment in these smaller stores, says Swinkels. If you don't pay attention and adjust to these trends, you leave a

lot of profitable and, from a customer standpoint, very important shelf space that we use for products

that don't sell.

And for promotional purposes with diapersfor example, for five weeks out of the year, we are selling 70% of our volume, and that was in the old world. So now you still have the same volume, but you have over 50% of diapers being sold online.

We believe that because we can build the right solution to each customer, we can offer much more to CPGs than has been possible. We can be extremely relevant for our customers and for our CPGs in targeting the customers who are important to the CPGs. As well, new products from CPGs can be promoted to amenable customersfor example, customers who have made consistent

purchases in a particular category or from a particular brand.

For example, If a CPG wants to introduce a big innovation, sampling is good. The retailer and the CPG know who the customers are, invite a certain group to

sample the product, and then reach out to that group after the sample. Such an approach also allows for the use of focus groups. Swinkels points to a test by Coke Zero as an example. A sampling promotion was sent to non-buyers, and results analysis eight weeks afterwards showed a sales uplift of 13-18%.

As Swinkels concludes, "That's the new way of retailing. L

Bill Brohaugh

Grocery Powerhouse Ahold Surveys Changes in the

Grocer-CPG Relationship

Grocery Powerhouse Ahold Surveys Changes in the

Grocer-CPG Relationship

...a customer using the online channel spends 20% more than any other customer.


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We inherited a brand portfolio that offered many advantages, but also many challenges, Haas explains. Avis and Budget were well-established around the world, but not well differentiated from each other or competitors. In our industry, the major competitors offer similar products and services at similar price points at the same major airports and urban centers. Given this commoditized nature of our industry, developing and deploying a robust and differentiated brand portfolio strategy was a key priority for us.

Avis Budget Group today consists of Avis Car Rental, Budget Car Rental, Budget Truck Rental, Payless Car Rental, Apex Car Rentals, and Zipcar.

My first priority was to build a world-class marketing team with proven expertise in digital and in international marketing, which would align our talents with the companys global strategic plan, Haas says. From there, we hired a brand consultancy to help us redefine our brand strategy. We spent several months analyzing data, understanding our strengths, opportunities and competitive set. We engaged with customers and as importantly with our employees and, armed with these insights, we developed a redefined brand positioning for our Avis and Budget brands.

What was the conclusion after that time of redefining the role of the Avis and Budget brands?

Both brands had tremendous equity our goal was to refine the brand specific personality, voice and positioning to ensure each brand delivered a differentiated customer experience that was consistent across the brand touch points, Haas says. But this was going to require sacrificing some sacred cows in favor of solutions appropriate to the fast-changing consumer expectations of our current times.

Haas notes that being lined up side-by-side with our competitors at airports forces a company to delineate a clear customer experience.

What had successfully distinguished us from our major competitors in the past had been our dual-brand approach, she explains. But following our success our industry underwent further consolidation, leaving the three major international competitors each with a portfolio of two to three well-established brands. So this forced us to segment our customers, and today we view our industry segments as including premium brands like Avis, which offer the ultimate in service and amenities; mid-tier value brands like Budget, which offer the same great clean late-model vehicles as premium brands, but at lower prices and with fewer amenities. Deep-value brands, like Payless, typically provide vehicles that are older and have higher mileage compared with premium and mid-tier value brands, and tend to compete primarily on price. Then theres the self-service car sharing industry that is led internationally by Zipcar; we do not view the peer-to-peer car sharing companies as occupying a segment within the vehicle rental industry.

Drives Mark Johnson Loyalty360

When Jeannine Haas, Chief Marketing Officer, North America, at Avis Budget Group, joined the

company three years ago, she was excited about the opportunity to

redefine and build upon the heritage of the companys global brands.

For Avis Budget Group, Customer Experience

Brand Differentiation

The result of this consolidation was an even greater challenge to differentiate brands within specific segments and create a clear distinction in the minds of consumers so that no matter what their travel requirements and preferences, Avis Budget Group has a brand that serves these needs better than the rest.

Our global strategic plan has four pillars: Accelerating growth, expanding our global footprint, putting the customer first, and driving efficiency throughout the organization, Haas explains. My team has had to play a key role in each of these strategies, and that requires having the best people.

The Challenge of Listening and Understanding CustomersUpon her arrival at Avis Budget Group, one of the new hires Haas brought in was Neal Zamore, Vice President, Consumer Marketing.

Neal has a wealth of digital experience and is a great asset to our team, Haas explains. In addition to managing our digital and ecommerce business, he also manages our Customer Relationship Management (CRM) and loyalty initiatives.

Most marketers face the challenge of listening and understanding customer needs in different ways, Zamore says. Avis has a tradition of being a technology innovator and leader, being the first in the vehicle industry to offer computerized reservations and the first to launch a mobile app.

We have been significantly increasing our investment in technology, Zamore explains, driven largely, if not entirely, by marketing insights. Our Marketing and IT groups used to live in different worlds, but not anymore. We have an integrated approach to capitalizing on the opportunities inherent in digital.

For example, Zamore explains, there was a time when customers had to fit into the companys operating system.

Now its quite the opposite, he says. About a year ago, we prioritized social media as an important channel to have a two-way conversation. Not only are we committed to listening in to what our customers have to say, we pride ourselves on being responsive and when possible, proactive. In this way, we can see the ways we can enhance our brand value and drive positive differentiation that helps drive revenue growth and improves brand loyalty.

As a key step to make this happen, Zamore says Avis Budget Group has enhanced its customer database.

Years ago, when we launched our customer data system, it was all about the transaction, but now there are other attributes, there are preferences, what are they saying in social, how often are they opening

emails and what types of emails, and what are they clicking on so we can better understand the preferences of the customers so we can deliver a differentiated experience that meets their needs, Zamore explains.

The challenge then becomes maintaining a strategy of engagement and retention to deepen customer loyalty.

At Avis Budget Group, we have invested in our owned channels as well as in building strategic relationships with key travel brand partners and membership associations to fuel our customer

acquisition pipeline, Haas says. We leverage customer information to deliver business value and ensure we meet customer needs. We provide multiple options for our customers to do business with us across channels. We want our customers to choose the channel that works best for them.

Continued on page 34

Our global strategic plan has four pillars: Accelerating growth,

expanding our global footprint, putting the customer first, and driving efficiency throughout

the organization,


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Harnessing Customer DataObtaining data isnt an issue, Haas says.

loyalty management q1 2015

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