loyalty management summer

powered by Loyalty 360

Volume 2 Number 3

August 2010

CPG: a recession-proof business?

Tattooing Your Brandbranding secrets of a tattoo artist

Who are your brand

influencers?

There’s a new game in town.

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%?

AUGUST 2010

DEPARTMENTS

LOYALTY FORUM

FEATURES

What’s on Loyalty360.orgLetter from the EditorContributors

Loyalty Forum: Your Voice

Behind the Brand/PeopleInterview with Kevin Grieve, CEO, Mocapay

Q & A: Ask the ExpertsLately we’ve been hearing from many b2b customer-focused marketers. These companies have instituted NPS and customer referral programs. While these strategies are working, there’s a need to take their customer relationship to the next level. Suggestions?

BooksLoyalty Reads

Step Away From the One-Way MirrorPeter Murane, BrandJuice Consulting

The 360˚ View: Customer Understanding Puts You Ahead of Your Customers Connie Hill, VeraCentra

Branding Secrets of a Tattoo ArtistNancy Porte, Vovici

CPG: A Recession-Proof Business?Andy Wright, Carlson Marketing

Mobilize or DieMatthew Silk, Waterfall Mobile

68

10

12

14

16

18

20

24

28

30

32

WWW.LOYALTY360.ORGVOLUME 2 NUMBER 3

3Loyalty Management™

This Month in

Step Away From the One-Way Mirror

pg20

An interview with Sprint’s Melinda ParksBehind the Brand/People

pg48

How is online gaming changing the loyalty game?

AUGUST 2010

TECHNOLOGY, TRENDS & REWARDS

BEST BUSINESS PRACTICES

Loyalty Programs: There’s a New Game in TownStephen Baer, The Game Agency

The Flexible Redemption RevolutionBen Ashwell, Loylogic

Four Ways to Win Elections in the New Marketing DemocracyChris Marriott, Acxiom’s Digital Agency

Target Your Social Media Tactics for Stronger Customer Bonds Sid Liebenson, Marketing Highway

Influencers Hold the Key to Capitalising Their Followers Ran Shaul, Pursway

Developing Relationships and Direct Content—How to Better Serve ConsumersSandra Zoratti and Lee Gallagher, InfoPrint Solutions

Behind the Brand/PeopleInterview with Melinda Parks, Director of Loyalty & Retention Marketing, Sprint

What We’re HearingMark Johnson, Loyalty 360

Loyalty Program ProfileBarnes and Noble

2010 Loyalty Expo In Review

34

36

38

40

44

46

48

50

52

55

WWW.LOYALTY360.ORGVOLUME 2 NUMBER 3


Loyalty ManagementEditorial & Production TeamErin Raese - Editor in ChiefMark Johnson - Contributing EditorKathleen (Ninneman) Ostoich - Graphic DesignerJaps-Olson Company - Print Production

Loyalty 360 TeamMark Johnson - President & CEOErin Raese - COOAmanda Chasteen - Manager, Marketing OperationsKathleen (Ninneman) Ostoich - Marketing ManagerAnnie Lerner - Marketing Coordinator

ContactsArticle 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 permis-sion is forbidden. The information contained herein has been obtained from sources be-lieved to be reliable. 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 reflective 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 in-terpretations 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

pg44

Influencers Hold the Key to Capitalising Their Followers

pg34

review the event on page 53!

LOYALTY 360 ON THE WEB

6 Loyalty Management™

what’s on loyalty360.orgLO

YALT

Y 3

60 P

ULS

E

forums + councils

Remember to check loyalty360.org daily for news updates from industry leaders. Want your news featured? Join the conversation today and email [email protected].

Head to page 50 to read excerpts from Mark Johnson’s recent States of the Industry & read the full texts at loyalty360.org/state_of_the_industry.

New to the Loyalty 360 website, fo-rums and councils. Now available to all Loyalty 360 members. Come join the discussion on www.loyalty360.org. Hot topics include: Mobile payments, mobile couponing, social media—Return on investment?Bringing together social media and CRMCommunities—Making them work for you cost effectively

Tips for engaging your CFO.

What ’ s st ressing

you out at w o rk?

O rganiz ational

Cult u re/Politics : 31%

Rewarding debit will change behavio r by:

Convert mo re t ransactions to debit :

6 0%

What ’ s driving empl oyee

engagement today?

career devel opment :27%

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 o!er include:

"a weekly e-newsletter “!is 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

As you can see by the variety of content in this issue of Loyalty Management, things have certainly been busy at Loyalty 360. Here’s a recap of what’s been happening and what you can find as you read through the magazine:

Thank you to everyone who joined us at Loyalty Expo 2010. The quality of the speakers and level of engagement of attendees made this year’s show a huge success! At Expo, you told us that you were interested in learning more about some key topics impacting your loyalty initiatives. In this issue, we’re exploring a number of these topics such as: taking my B2B customer loyalty initiatives to the next level (Ask the Experts, page 16), CPG and loyalty (two articles, pages 20 and 30), mobile and social.

And speaking of Expo—We’re excited to announce Loyalty Expo 2011 which is going to be held March 20-22 at the Hyatt Grand Cypress in Orlando. For more information, please visit www.loyaltyexpo.com.

I also encourage you to visit our just-relaunched website (loyalty360.org). More robust and interactive than ever, we’ve been hard at work creating an online community so that you—our members—have everything loyalty at the tip of your fingers. Be sure to check out the forums and councils, network with peers, access best practices and latest research, and join the discussion.

In his ongoing commitment to bringing you all the latest loyalty news and strategies, Mark Johnson, CEO of Loyalty 360, continues to attend a vast array of conferences. On pages 50 and 51 he shares what he’s been hearing in the marketplace, key loyalty trends and challenges, and best practices.

Lastly, we’re pleased to announce the launch of our Engagement 360 Awards! Think your company is effectively engendering engagement and loyalty with its employees and customers? Participate in the awards audit and find out! Created in conjunction with Performance Point, Engagement 360 Awards will celebrate those companies that connect employee engagement and customer engagement to achieve bottom line results. Companies that apply will receive a comprehensive review of your engagement efforts; plus, you’ll see where you rank among other organizations. Awards will be given at the Loyalty Expo 2011. For more details and to register visit www.engagement360.org.

Enjoy the issue!

Erin RaeseEditor-in-ChiefLoyalty [email protected]

Welcome new Loyalty 360 Members:

GNCSprint

USBankIntelispend

AcxiomSAS

VoviciGivexDell

GuessAmbius

Microsoft

CONTRIBUTORS

Ben Ashwell As the Sales Consultant and Marketing Man-ager at Loylogic, Ben Ashwell combines in-dustry thinking with multi-channel commu-nication and business development strategy, gathered from broad experience managing multiple loyalty business units.

Stephen BaerStephen Baer is a Managing Partner at The Game Agency (TGA) where he oversees campaign strategy and execution. TGA is a marketing services company focused on ex-panding their clients’ presence in the video game space to help them acquire and retain customers.

Tim CrankTim Crank is the Managing Director of En-gagement Marketing for Young America Cor-poration, a full-service loyalty, incentives and promotions company.

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.

Connie HillConnie Hill, President and Founder of Vera-Centra, brings more than twenty five years experience delivering strategy and execu-tion services to the marketing community. Ms. Hill’s passion for technology and process drives VeraCentra to innovate new platforms that help marketers manage the complexities of data driven, customer relevant programs and campaigns.

Mark JohnsonMark is the President and CEO of Loyalty 360. He has significant experience in selling, designing and administering prepaid, loyalty/CRM programs, as well as data-driven mar-keting communication programs.

Sid LiebensonSid Liebenson has more than 30 years of suc-cessful experience in direct, database, and customer relationship marketing. Named 2008 Chicago Direct Marketer of the Year, Sid is a Managing Partner of Marketing High-way, an agency dedicated to helping clients facilitate meaningful, effective, and produc-tive dialogue in the digital media environment.

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].

10

Chris MarriottA 15-year veteran of digital marketing, Chris Marriott is the Vice-President, Global Man-aging Director for Acxiom’s digital agency, a top 20 interactive agency with over 300 employees and offices in San Francisco, New York, Nashville, London and Singapore.

Peter MuraneMurane, President and Founder of BrandJuice, has twenty-two years of brand management, innovation and new product development ex-perience driving organizations such as P&G, The Clorox Company and General Mills.

Nancy PorteWith over 20 years experience, Nancy Porte, Vice President, Customer Experience, is re-sponsible for the Voice of the Customer pro-gram at Vovici, while managing customer support, customer training, and CRM sys-tems.

Ran ShaulRan, Co-founder and EVP Customer Solu-tions, is a marketing and customer relation-ship management expert and one of the lead-ing practitioners of influencer marketing. Ran has overall leadership over all customer proj-ects at Pursway, laying out the strategy and overseeing the implementation of influencer marketing initiatives.

Matthew SilkMatthew Silk is Senior Vice President for Wa-terfall Mobile, Inc., responsible for corporate development, strategic partnerships, and client services. He leads the marketing and media efforts for the company’s West coast operations as general manager of Waterfall’s Austin office.

Andy WrightAndy Wright joined Carlson Marketing Worldwide in 2005. As a member of Carlson Marketing’s Executive Team, Wright is known for his thought leadership and his ability to knit together the talent that exists across the global network that spans 16 countries.

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.

Ben Ashwell

Stephen Baer

Ran Shaul

Matthew Silk

Lee Gallagher

Tim Crank

Connie Hill

Sandra Zoratti

Andy Wright

Nancy Porte

Chris Marriott

Sid Liebenson

Peter Murane

Mark Johnson

LOYALTY FORUM: YOUR VOICE


Who will lead mobile payments? Issuers, telco providers or retailers?

s long as the wireless carriers own the client, the bill-ing and the network, they will “control” what happens in the space (at least this is the story in North America) This is one of the big roadblocks to innovation and adoption…

Barnard Crespi Founder, Marketing Executives International Group

onsumers. But we have to do a better job of explain-ing the features and benefits to them. AND selling them on security.

Parissa Behnia Idea Chef, 678 Partners LLC

A

C

t’s got to be issuers and providers. They are the only ones directly benefiting from this new form.

Telco’s and retailers will have to comply—but there is no direct benefit to them. Sure—there is significant indirect benefits including loyalty, promotions, messaging and so on.

So my take is: The issuer has to lead by gathering the right providers. For providers: Whomever can properly bridge the gaps of credit card entry, cash transactions will be the winner(s).

I think that a couple of important constituents were omitted from your list: device makers and card schemes.

Nokia took the lead on the device maker side by focusing on a device-based solution that hasn’t taken off—once they have attractive devices using the SIM as the secure element available this is likely to change. There is much speculation that Apple will try to drive this forward; however, Samsung is the most active currently and have devices available as seen in Mobile World Congress.

Visa and MasterCard are also taking an increasingly pro-active role and I think that the combination of card schemes, handset makers, issuers and telcos collaborating is required to grow the mobile payments business. While retailers will need to play a roll in adopting the POS solutions I think that they will be motivated to do so by loyalty and marketing ap-plications rather than payment.

Daniel Angel Head of Business Development, Orange Personal Communications Services, Ltd

So my take is: The issuer has to lead by gathering the right providers. Whomever can properly bridge the gaps of credit card entry, cash transactions will be the winner(s).

—Daniel Angel

I

bviously a chicken and egg issue, users must own an NFC enabled devices with Token or Encrypted elements, Issuers must have a way to provision Credit Card/Debit Card credentials to cloud or device, and Merchants must overhaul old POS devices to NFC enabled equipment.

MO’s, looking for a way to control the customer; however there is huge liability in letting consumers’ bill merchandise to their cell phone bills. Two issues, first, on average consumers’ do not pay their Credit Card bill in FULL and second, most cell phone consumers do not have bank accounts or credit cards! The screening for a mobile phone account is near non-existent.

Acquirers/Processors/Networks will want to certify any transactions going over the wire to ensure security. And that’s just the surface—we then can speak about the underlying Revenue/Costs such as Fraud, Cost of Fraud, Charge Backs, Overhead and Loyalty, etc.

What will it take? An inner circle of partners playing a key role in each part of the value chain with a vision of a disruptive technology that changes the paradigm.

Emilio J. Matt US Business Development Manager, Microsoft

Onteresting topic. However there is only one thing I miss in your question. The possibility that the User will lead mobile payments. For the user it needs to be a good, flexible, easy to use, usable in many places and an affordable solution.

I personally have my doubts if it is user friendly if a ‘deal’ is made between a telco and a bank to put the payment part on the SIM that is owned by a telco. It will make it a lot harder to change from bank or SIM card provider.

So I hope that a dual SIM system (one telco SIM and one bank/loyalty/NFCSIM or the SD card with payment solution will be adopted soon. To promote and get a mass adoption, it should be a solution that is available for mass public. This could be a telco who is offering this with SD cards or SIM cards for every phone. But it can also be Apple with all the speculations. If Apple will offer this in their phones, mass adoption and lead by and through Apple is a serious possibility. In that case, banks and telcos will see it going out of their hands.

So my answer is that is will be the company who will be able to distribute the NFC technology on mobile devices to the mass public. This need to be a company with control on certain mobile hardware parts.

Michel Bayings Mobile & RFID Business Consultant, Logica

What will it take? An inner circle of partners playing a key role in each part of the value chain with a vision of a disruptive technology that changes the paradigm.

As part of its weekly poll series, The Pulse, Loyalty 360 recently asked its members to weigh in on this hot-button issue. Here are the results:

Telco: 32%Providers: 27%Retailers: 27%Issuers: 14%Be sure to check loyalty360.org for upcoming poll questions.

—Emilio J. Matt


I

Telco

Providers

Retailers

Issuers

CEO, Mocapay

Many people are asking about mobile payments. Who’s going to lead the charge (suppliers, banks, consumers, telco) and will consumers really use it? We’d love your perspective.

It will vary by global region depending upon the current and historical market structure along with the payments and wireless infrastructure. For example, chip-based cards and corresponding readers were deployed in Europe in the 90s due to a poor telecommunications infrastructure to combat payments fraud. In the US, which had a robust telecommunications infrastructure, real-time payment authentication and authorization was viable and cost-effective, so there was no business case for smart cards or readers. In the US, there is not a compelling business case for merchants to spend capital for NFC-readers for several reasons.

Kevin Grieve


First, Visa recently expanded its no-signature rules to most of the verticals they serve, which means “tap and go” (mobile) is not much different than “swipe and go” (plastic). Second, there is not a critical mass of NFC-enabled phones deployed in the US market. Third, unless merchant acceptance of NFC-based mobile payments achieves a critical mass of 30-40% merchant adoption, open loop tender is unlikely to gain consumer interest. And finally, payment associations are charging merchants a higher interchange rate to accept mobile payments and have not allowed PIN debit prompting for a mobile payment. With merchants focused on lowering their cost of payments, the combination of new hardware spend and higher interchange rates, NFC-based mobile payments is DOA in the US.

That means, mobile payments are likely to begin with merchant-issued tender such as gift cards, loyalty cards and coupons. Mobile payments innovation will be delivered by suppliers and technology enablers.

Mocapay, recently named a winner in this year’s Red Herring 100, continues to pave the way in mobile payments and loyalty innovation. Loyalty360 takes a deeper look into the man behind the brand – Kevin Grieve. Kevin Grieve is the CEO of Mocapay, a mobile marketing and mobile payments company including mGift, mLoyalty and mCoupons. Kevin is responsible for overall business strategy and market development.

LOYALTY FORUM: BEHIND THE BRAND/PEOPLE


How are you seeing organizations building mobile into their loyalty initiatives?

Mobile is a natural fit for loyalty programs. Many of the merchants with whom we speak are interested in cardless-based loyalty and/or gift programs.

What do you see for Mocapay into 2011?

We will see continued consumer and merchant adoption of mobile marketing and mobile payments.

Tell us about your last ah-ha customer experience (did it include mobile?).

After I purchased my first iPhone and then downloaded and used Shazam. That is when I realized everything just changed. My most recent ah-ha moment was when one of our customers issued a corporate edict that they were going 100% digital for their advertising.

What inspires you? I was recently on a mission trip with my family

to our sister church in the Ngaramtony district of Arusha, Tanzania. I was inspired by the people and was in awe of the beauty of the Serengeti.

Who has had the most influence on your life?

My parents, my wife and my children.

Which talent would you most like to have?

Fluency in kiSwahili.

If you were not doing what you do today, how would you be spending your time?

Full-time volunteer work.

Which book(s) are you currently recommending?

Given the recent economic crisis, I am revisiting the seminal works of FA Hayek’s, The Road to Serfdom, Milton Friedman’s, Capitalism and Freedom, and Adam Smith’s, The Wealth of Nations.

What’s your advice for a novice mobile marketer?

Put choice, convenience, and control in the hands of your customer. L

Mobile payments are likely to begin with merchant-issued tender such as gift cards, loyalty cards and coupons.

Kevin’s mission work in Arusha, Tanzania

Ask the Experts

Q&ALately we’ve been hearing from many b2b customer-focused marketers. These companies have instituted NPS and customer referral programs. While these strategies are working, there’s a need to take their customer relationship to the next level. Suggestions?

Q:

Business-to-business organizations have searched far and wide for a solution to create measurable and lasting customer loyalty—the kind of loyalty that results in sustainable profit growth. Traditional approaches to customer loyalty measure-ment fall short of addressing the two questions critical for the success of any B2B organization: 1) Do your customers make more money doing business with you? 2) Do you capture your fair share?

Organizations that answer these questions definitively and make continuous improvement are able to win with their cus-tomers now and in the future. While it is good to have loyal customers, it is better to have customers whose profits are more positively impacted by doing business with you versus your competitors. These customers continue to do more and more business with you and have a vested interest in your fi-nancial success. This goes beyond loyalty—it is the winning equation.

This redefinition of what it means to win with customers is made possible by a new business management system—Cus-tomer Value Creation or CVC. It creates a direct link between a company’s value proposition and the resulting impact on a cus-tomer’s operating profit. CVC delivers four important break-throughs that help organizations overcome the shortcomings of traditional customer loyalty measurement systems:


LOYALTY FORUM: Q&A

A: 1. A rigorous quantitative assessment of your value proposi-tion and the identification of components that contribute measurable differential value.

2. A new financial metric called the Differential Value Propo-sition or DVP that measures how much more money cus-tomers make doing business with you—a true measure of competitive advantage.

3. Software tools, Render™, that help organizations manage customer data to sustain the effort and implement CVC in-house without relying on costly consultants.

4. A prioritized list of opportunities to deliver financial value to customers that creates new levels of accountability with customers and organizational alignment with what mat-ters to the customer.

The result is truly differentiated value propositions with products, services, programs that deliver measurable value to customers—more value than those of competitors. This is the sign of a winner.

—Keith PiguesChief Marketing Officer, Ply Gem Industries

L

While it is good to have loyal customers, it is better to have customers whose profits are more positively impacted by doing business with you versus your competitors.

Driving up NPS scores and number of customer referrals is a great goal.

To elevate these programs to the next level, focus on the scores and referrals coming from influencers and decision makers within your customer accounts. How? Start by establish-ing a Customer Advisory Council.

A Customer Advisory Council initiative is made up of 20-30 decision makers from your best accounts. Unlike other marketing or sales activities that are focused on generating leads

Moving b2b relationships to the next level requires a commitment both

to listen and to respond to customer feed-back. As techniques that collect valuable customer information, NPS (Net Promoter Scores) and customer referral pro-grams cover the listening piece. But to truly ad-vance customer relation-ships we have found that companies also need to get the “respond” piece right, and ensure they are using the information col-lected to spur action.

As a first step, many companies will seg-ment customers into categories—such as those that are loyal, those that may be at risk, and those that are vulnerable or “trapped” in

or closing deals, Customer Advisory Councils are focused on building and enhancing rela-tionships at higher levels and securing market insight necessary to keep your business ahead of the competition.

The results: In addition to the insight, and market direction, organizations who have im-plemented Councils have seen, on average:

-sion maker level

maker level

Marketing

If moving up the value chain is the goal within your customers, the Customer Advi-sory Council is the ultimate B2B weapon.

the relationship. We use a series of ques-tions to assign customers to these seg-ments based on their anticipated behavior

(whether or not they intend to continue doing business with you) and their atti-tude (how they like doing business with you). We have found this approach has a stronger correlation to business metrics such as revenue, growth, and profitability. It also pro-vides a practical break-down to understanding the stability of your customer base that allows for the implementation of target-

ed action plans.

A structured closed loop process can also be established to ensure that the right

L

A:

A:

—Sean GeehanFounder, Geehan Group

Typical Optimal

Decision MakerFinal authority/signature

10% 30%

InfluencerEvaluator

15% 35%

User 60% 30%

Purchasing 15% 5%

Customer Advisory Councils are focused on building and enhancing relationships at higher levels.

Moving b2b relationships to the next level requires a commitment both to listen and to respond to customer feedback.

people from a company take appropriate follow-up mea-sures and communicate those measures directly with cus-tomers who have had issues or represent upsell opportunities. This process may include ‘hot alerts’ which trigger immediate intervention in the most seri-ous cases. While every com-pany will have a unique set of follow-up triggers, they com-monly include customers who are at risk or who have provided low ratings of experience areas known to be highly influential in determining customer loyalty. L


—Jennifer BatleyStrategic Account Manager, Walker

18

Loyalty ReadsDELIVERING AND MEASURING CUSTOMER SERVICE: This Isn’t Rocket Surgeryby Richard D. HanksMarch 2010 | Duff Road Endeavors

What should I aim for? Your end goal should be generating loyal customers. (There are lots of books and plenty of consultants itching to sell you “their special sauce”

to help you transform satisfied customers into loyal ones.) But I believe good old customer satisfaction should not be left on the side of the road, sacrificed to the enticements of the goal of loyalty. Why? Because, as I mentioned in the Introduction, my experience has led me to conclude that significantly more companies are failing due to poor execution than are failing due to poor strategy (including a zealous attachment to overanalyzing loyalty).

For example, let’s say that in a seafood restaurant, the most loyal of all customers bites into a piece of greasy, under-cooked fish – suddenly her loyalty evaporates. Larry Loyalty phones a reservations call center to book his next hotel room and is treated so rudely that he never calls again. And, after getting your haircut at the same place for 12 years, you finally can’t take the excruciating wait any longer, so you go to a salon down the street.

Each of these real-life examples illustrates why I wrote this book – because I believe a concerted focus on executing the basics is the single most important thing your business can do today. In simple terms, I think there is more bang for the buck in stopping customers from leaving you in the first place, than in spending your life trying to make them fit some definition of loyalty. There is also more money to be made in customer retention than in new customer acquisition.

That’s why the focus of this book is on real-time feedback, leading to local accountability, and continuously focusing on improving operations – so that you can keep customers coming back long enough to allow them to become emotionally involved – to become loyal!

-EXCERPT, PG. 18-19, “LOYALTY: WALLET, MIND, AND MOUTH”

LOYALTY FORUM: BOOKS

Loyalty Management™

SOCIALNOMICS: How Social Media Transforms the Way We Live and Do Business by Erik QualmanAugust 2009 | Wiley

Social media platforms like Facebook, YouTube, and Twitter are fundamentally changing the way businesses and consumers behave, connecting hundreds of millions of people to each other via instant communication. This is a massive socio-economic shift that is fundamentally changing the way consumers and companies communicate and interact with each other.

Welcome to the world of Socialnomics—where consumers and the societies they create online have a profound influence on our economy and the businesses that operate within it. Online word of mouth and the powerful influ-ence of peer groups have already made many traditional marketing strategies obsolete. Today’s best businesses are learning to profitably navigate this new landscape.

In Socialnomics, Erik Qualman offers a look at the impact of social media on business to reveal what the future holds and how businesses can best take advantage of it. He explores how social media is changing the way busi-nesses produce, market, and sell products; how it eliminates inefficient marketing tactics and middlemen; and how businesses are connecting directly with their customers through popular social media platforms.

In Socialnomics, Qualman brilliantly prescribes that the key to social media success is

doing rather than deliberating. This is a must read for anyone trying to leverage the

social graph rather than be squashed by it. –Steve Kaufer, CEO, TripAdvisor


EXCEPTIONAL SERVICE, EXCEPTIONAL PROFIT: The Secrets of Building a Five-Star Customer Service Organization by Leonardo Inghilleri and Micah SolomonApril 2010 | AMACOM

GETTING NAKED: A Business Fable About Shedding The Three Fears That Sabotage Client Loyaltyby Patrick LencioniFebruary 2010 | Jossey-Bass

In Getting Naked, Pat challenges service providers to be com-pletely transparent and vulnerable with clients in order to overcome the three fears that ultimately sabotage client allegiance. Written for internal or external consultants, financial advisors or any-one serving long-term clients, Getting Naked will provide powerful, actionable tools to help readers overcome the three fears and gain a real, lasting competitive advantage.

The ApproachAt its core, naked service boils down to the abil-

ity of a service provider to be vulnerable, to embraceuncommon levels of humility, selflessness and trans-parency for the good of a client. Most of us live our lives trying to avoid awkward and painful situations, which is why it is no surprise that we are all susceptible to the three fears that sabotage client loyalty which include:

Fear of Losing the Business - Worrying about losing a client’s busi-ness may cause service providers and consultants to avoid the very things that ultimately engender trust and loyalty.Fear of Being Embarrassed - Rooted in pride, this fear can lead ser-vice providers to withhold their best ideas from clients.

In this book, an acclaimed entrepreneur and cus-tomer service systems designer, Micah Solomon, teams up with an architect of the legendary Ritz-Carlton hospi-tality experience, Leonardo Inghilleri, to explain the core loyalty-building principles and techniques pioneered at the highly successful companies they have worked with or benchmarked—companies that include Oasis, The Ritz-Carlton, Lexus, Netflix, CD Baby, and more. Solomon and Inghilleri also explain exactly how to adapt their extremely profitable system to any type or size business -- at nearly any price point.

Exceptional Service, Exceptional Profit is brimming with practical techniques that produce an unusual de-gree of customer loyalty – the kind of loyalty that pays huge dividends. “These techniques yield enormous profits because truly loyal customers behave differently from aver-age customers,” Micah Solomon explains. “Once a customer has become loyal, she is nowhere near as sensitive to price competi-tion, she’s more willing to forgive your errors, and she’s even likely to volunteer to promote your brand. This all comes about because loyal customers think of themselves as your allies; they want to help you succeed.”

Here are three examples of the crucial principles and techniques that are detailed in Exceptional Service, Exceptional Profit:

profitable way.-

liness and quantity

your website, and in every step of their e-commerce encounters

What you read here will allow you to recalibrate your business—on any scale—to truly know your customers and keep them coming back for more.-Horst H. Schulze, Founding President & COO, The Ritz-Carlton Hotel Company

Fear of Feeling Inferior - To avoid feeling irrelevant or being overlooked, consultants try to achieve and pre-serve a high level of importance in clients’ minds.

The Naked Service ProviderWhat does being naked look like in practice? Naked

service providers and consultants confront clients (kind-ly) with difficult information and perspectives, even if the client might not like hearing it. Naked consultants ask potentially dumb questions, and make potentially dumb suggestions, because if those questions or suggestions ultimately help their client, it is worth the potential em-barrassment. They also admit their weaknesses and celebrate their mistakes. Even before landing a client, a naked consultant will demonstrate vulnerability and take risks. In fact, they’ll do no real selling at all, fore-going that activity in order to find a way to help a client

even if they never actually become one.Even beyond the world of clients, being naked has its benefits and ad-

vantages. When we can be vulnerable with the people we live and work with on a daily basis, we build stronger relationships, demonstrate our trust in them, and inspire them to improve by being vulnerable them-selves. And that is certainly worth getting naked for.


FEATURES

he innovation model inside many companies is broken. How could it not be when up to 90% of new products fail within their first year?

To succeed, companies must develop fresh approaches to innovation and consumer engage-ment frameworks; doing so can unearth actionable insights and strategies to drive greater in-market success and brand differentiation.

The concept of transactional learning pushes the innovator to embrace new process models and approaches. Transactional learning allows consumers to vote on marketing innovations with their wallets instead of their opinions. Because it ventures beyond the safety of the focus group facility, it offers the ultimate proof point – did the consumer buy?

In order to help clients learn from a transaction-based model, BrandJuice developed a propri-etary system called Battle Testing®. The system generates reliable consumer insights and helps ideas become stronger more quickly by allowing them to adapt. A byproduct of our process is en-hanced confidence of teams driving major innovation or re-positioning work. These teams know they are making the right decisions because they can measure the impact of strategy and execu-tion.

The following excerpt from my book, Lessons from the Vinyl Sofa, the Street Smart Way to Win at Innovation, offers a case study highlighting unique consumer engagement tactics from our cli-ent, Clorox, to illustrate this methodology in practice.

Step Away from the One-Way Mirrorby Peter Murane, BrandJuice Consulting

ENGAGE CONSUMERS WHERE THEY LIVE, WORK…& SHOP!

T

Loyalty Management™ 21Loyalty Management™

continued on next page »

Two Ideas Go To Market BrandJuice was hired by The

Clorox Company’s new venture team to help develop a portfolio of new consumer products and to bring the best of those new products to mar-ket in a more entrepreneurial fash-ion. We focused on the creation of new brands and our initial portfolio of ideas included a small number of ideas that Clorox had already cre-ated as well as a dozen ideas that my company brought to the table as part of our pitch to win the business. At the beginning, we had little intuition as to which ideas were the strongest. But we were about to find out.

Over the course of a three-year engagement, we explored five new product platforms in great detail, eventually recommending that three of the platforms be killed. We were simply practicing the art of inno-vation portfolio strategy – killing weaker ideas as early as possible so that the maximum amount of time and money could be spent on the most promising business opportuni-ties.

In the end, we helped create two important new businesses for the company: GreenWorks, an all-natu-ral line of cleaning products with an iconic yellow daisy on the label and a product line I’ll call “Macho” for purposes of this book because it is in

the midst of its national rollout and not yet public.

My company did the first year’s footwork on GreenWorks, discov-ering key consumer needs and de-veloping the early positioning and product line. The idea was so big it was quickly transitioned from the Clorox New Ventures Team to the company’s Laundry Home Care op-erating division for commercializa-tion by a huge team of internal re-sources. GreenWorks is projected by some analysts to hit $300 million in revenue in its first year, making it the most successful Clorox new product launch in decades.

On the Macho venture, my com-pany acted as the General Manager on the business from initial concept creation up through extensive in-market testing at major customers like WAL-MART.

Not surprisingly, our first step was not the focus group facility. In-stead, we went out and watched con-sumers clean their homes. We initial-ly went to fifty different households across the country and watched consumers go through their cleaning routines. We came during the week and on Saturdays when many people

“deep clean” the house. We came at different times of the day when children were present and when they were at school. We shot video,

took pictures and asked consumers to tell us stories and draw pictures. Some completed diaries for us. Oth-ers made collages. We looked in con-sumer closets, cabinets, garages and car trunks to see what products were close at-hand and what were in deep storage.

After we talked to consumers about their lives and watched them clean we went shopping with them to a range of retailers from grocery to dollar stores. These in-home and in-store observations yielded a range of consumer insights that were piv-otal in the development of our ideas.

For example, we learned that a segment of consumers fears the job of cleaning because of health con-cerns. We learned that consumers put cleaners in dozens of categories of their own creation and that these categories have no linkage to the “of-ficial” category definitions provided by IRI and Nielsen. We learned that men and women approach cleaning differently. They shop stores differ-ently. They look for different per-formance claims. They seek differ-ent cues of effectiveness during the cleaning process. They have differ-ent underlying motivations around why to clean. And, ironically, each gender thinks it does a superior job.

These insights were developed from fairly straightforward research

Transactional learning allows consumers to vote on marketing innovations with their wallets instead of their opinions. Because it ventures beyond the safety of the focus group facility, it offers the ultimate proof point—did the consumer buy?


Step Away From the One-Way Mirror (continued)

methodologies that put us in real world consumer environments, re-moving the safety of a one-way mirror.

All of the steps summarized below were undertaken with the primary goal of informing our intuition and unearthing deep consumer insights:

help us set up “Girlfriend Groups” in their homes. These are gather-ings where one consumer invites her friends to come talk about a topic—in this case home care. This research format told us a lot about what was important in home care and what wasn’t. Doing this work in-home provided ample oppor-tunities for show-and-tell so that we could truly understand what consumers were talking about. The added dimension of speak-ing to friends helped us contain what I call the “bullshit” factor. Consumers were literally kept honest by their peers, creating an amazing environment of candor. I sometimes wonder if consumers are telling the truth during focus groups. With Girlfriend Groups I never wonder.

of the new brands we were creat-ing, we asked three graphic de-signers to independently develop

rough logo concepts against our creative brief. We took what we felt were the best of their ideas, mounted them on boards and took them out to the Denver Bronco stadium parking lot dur-ing pre-game tailgate parties. We gave tailgaters coupons for free Kingsford Charcoal in exchange for their time and opinions. They gave us an earful (and a few beers in some instances), and we quick-ly learned which visual brand-ing elements had the most power to bring our idea to life. Equally important, we learned which el-ements were weak or polarizing and not worth pursuing.

of our ideas we literally scoured the world looking for stock bottle options but struck out. So we cre-ated a new bottle with Brand-Juice industrial design resources and a bottle manufacturing part-ner. Each time we received a new wooden bottle mold prototype we went out on the pedestrian mall adjacent to our building and in-tercepted consumers to ask them to hold the bottle in their hands and give us their opinions. We also put the prototype on store shelves to make sure it would

stand-out and have appropriate height and width dimensions.

-tles off of a unit cavity mold that cost only $10,000 to manufac-ture, we tested a range of fully-rendered package designs. We set up a booth at Mall of America in Minneapolis under a fictitious company name, and for a day we stood there and intercepted about a hundred consumers. Each was asked to rank the different bot-tle designs and to comment on a paper positioning concept state-ment we had developed. Just by reading the body language of the people who stopped by it was easy to identify our best package design execution and, critically, to understand what made it the best option. Knowing why our best idea won was instrumental in shaping our judgment for ad-ditional decisions around adver-tising strategy and in-store mer-chandising.

Undertaking work like this is not easy. Getting your hands dirty is not for the faint of heart, but it sure beats failing at innovation because you were unwilling to venture beyond the safety of the one-way mirror.

Consumers were literally kept honest by their peers, creating an amazing environment of candor. I sometimes wonder if consumers are telling the truth during focus groups. With “Girlfriend Groups” I never wonder.

L


TALK TO YOUR CUSTOMERS IN THEIR LANGUAGE. MOBILE.

Integrated Mobile Marketing.

Gift and Loyalty Programs.

Pay with Your Phone.

Mocapay knows how to put your business

into consumers’ hands. Literally. Mocapay

is the only mobile experience platform for

innovative merchants.

CONTACT MOCAPAY TODAY.

[email protected]

www.mocapay.com


ccording to Aberdeen Group’s new research study, Providing a 360° View of the Customer - Better Service - Higher Sales, customers benefit from better service and efficiency, and sellers derive improved loyalty and, inevi-tably, more repeat business from established customers. Moreover, access to data and two-way communications form the basis of strategic actions being taken in pursuit of a true 360° view of the customer. The results of the study underscore the critical importance of data integra-tion in building a 360° view of the customer and creat-ing a more customer centric marketing organization. The research goes on to say that integration of multiple data sources will be impacted by the underlying technology in-frastructure.

We hope today’s article will provide loyalty marketers with insight on how to leverage existing sources of data and evolve technology infrastructure to create a more complete view of the customer, and spark a more produc-tive dialogue with customers.

We begin by understanding that loyalty is a journey that builds on customer experience. Once we understand this, we have an opportunity to create excitement about their brand, stimulate positive word of mouth and see in-creased returns.

The 360° View:Customer Understanding Puts You Ahead of Your Customers

by Connie Hill, VeraCentra

The Direct Link Between Customer Experience and Loyalty

Customer experience has been around for many years, but lately customer experience is becoming more tangible in terms of how customer experience impacts profitability—and there is a direct link between customer experience and loyalty.

Last year Forrester conducted a study entitled “Cus-tomer Experience Boosts Revenue.” In this study, For-rester identified a direct correlation between loyalty and customer experience. By measuring three elements of

By measuring three elements of loyalty behavior—willingness to buy more, reluctance to switch and likelihood to recommend—Forrester found that a change in customer experience rating directly corresponded to a change in customer loyalty.

A

FEATURES

25Loyalty Management™ UST 2010

loyalty behavior—willingness to buy more, reluctance to switch and likelihood to recommend—Forrester found that a change in customer experience rating directly cor-responded to a change in customer loyalty. For companies that are unable to manage customer experience, loyalty and revenues can suffer. In fact, Forrester summarizes the impact as, “a modest improvement in customer experi-ence can bring in $177 million to $311 million per year!

It’s no secret that today’s customers expect more from the companies they interact with. The explosion of social media and rapid growth of new communication channels illustrates how customers expect to be deeply involved in both the company and community dialogue that shapes the products and services they use. They expect their voices to be heard in order for their dollars to be received.

Yet, despite all the evidence of customer driven inter-action, and the availability of powerful technologies for in-teracting directly with customers—collecting and mining information about them, and tailoring offerings accord-ingly—we remain woefully unfocused on cultivating cus-tomers, focusing on product marketing and transactions instead. So why aren’t we more focused on delivering a positive customer experience to create long term profit-able customer relationships? The short answer is tradi-

tion—nearly 40 years of mass markets and mass media. Most traditional businesses think in terms of transac-

tions more than in terms of customers. When businesses do think about customers, they do so in terms of identify-ing which ones will drive more product transactions. We value revenues and rarely measure our customer value. We push our product campaigns over and over to pros-pects that really don’t care, when we should be dialoging with customers, engaging them into relationships with our brand. And think about how we define success– it’s a race for market share when we should be racing for customer equity!

Old traditions affect several aspects of our organiza-tions- from processes to people, to structure, to technol-ogy tools. And old habits are hard to break.

In fact, in a February 2010 Harvard Business Review article, “Rethinking Marketing,” the authors state that management needs to stop giving lip service to building customer relationships and start the strategy shift from transactions to relationships, creating the culture, struc-ture and incentives necessary to execute on that strategy. The article further states that no matter how daunting, the shift is inevitable and will soon be the only way to serve customers.

Breaking all those habits is no small hurdle. Companies

seriously considering this migration to a more customer experience driven view of the world understand that it will be transforming organizational change initiative.

An Integrated 360 Degree View of the Customer

So how do we get over this hurdle, and sooner rather than later? Is there one thing that’s low in investment, quick to implement and would have an immediate impact on loyalty, churn prevention and profitability? An inte-grated 360 degree view of the customer.

As long as companies operate in functional silos with separate systems, the customer experience will be frag-mented and impossible to manage. It doesn’t matter the industry, or what systems you use to collect customer information, customer data can be found and integrated into one data mart to yield a 360 view of the customer.

While this is a team effort, requiring cooperation from others who have customer data, the customer marketer is in the ideal position to take the lead on creating a 360 cus-tomer view. After all, it is the customer marketer that is charged with growing revenue by customer, and reducing churn by managing a positive and consistent experience for customers.

Integrating data into a single view is one small step that empowers marketers to perform the activities neces-sary to manage customer experience. Technology tools, applied to a customer data mart, enable activities that yield improved customer strategies and decision making.

These activities include:

and triggers that automatically launch communica-tions

-nications

organization

Even more surprisingly, all this can be achieved with-out ongoing IT Support. Integrating customer data, there-fore, is the one step that takes time, but won’t break the bank. More importantly, it will provide immediate value through customer insight and associated high returns on customer communications.

Calculating the ImpactThis may be one small step, but the impact is great.

The recent aforementioned Aberdeen study offers evi-

To install the 360 view capability within your organization, think in terms of combining process, knowledge and technology tools.



dence to support the value of integrating customer data.The April 2010 study revealed four key performance

criteria that distinguish the Best in Class from Industry Average and Laggard organizations. Top performance was defined in terms of achieving a 360 degree view of the customer and reaping the appropriate business ben-efits from that achievement—namely, better service and higher sales from existing customers.

In the study companies were measured on their abil-ity to deliver customer retention and improved customer experience. Metrics were calculated for customer reten-tion, customer satisfaction, net client value and efficiency.

These metrics are defined as:

that remained customers since the last fiscal period

customers formally reporting “better than average” satisfaction with a company’s product or services

spend, measured consistently as either revenue or bookings

searching for and combining customer data from vari-ous sources

Survey results demonstrated a significant gap be-tween the top performers and the average and laggard performers. Top performers maintained 91% customer retention; the average and laggard performers retained 78% and 62% respectively. Top performers maintained 88% customer satisfaction, while the average and lag-gard companies received 71% and 32% comparatively.

And when measuring efficiency, top performers only spent 6% of their time searching for customer data, while average performers and laggards spent 12% and 16% re-spectively. However, the biggest gap was between the in-crease in net customer value for the top performers (6%) versus a value decrease in both average (2%) and laggard performers (9%)!

Simply taking no action to create a 360 view is not an option. In fact, the wait creates an even higher hurdle to jump, because if your competitor is that top performer and your performance lags your competitor has a huge head start!

Connect the Dots: Process, Technology and Knowledge

To install the 360 view capability within your organiza-tion, think in terms of combining process, knowledge and technology tools. Recognize, however, that all the right tools, knowledge and process design skills aren’t always available within an organization.

The first step in connecting the dots is to understand where customer data resides, and know what is meaning-ful to capture for future analysis, trigger setting and per-sonalization. A data audit, or basic inventory of company customer data, will provide the sources and contents of all customer data located within an organization.

Technology tools then enable you to aggregate that customer data into a single data repository or data mart from which the key capabilities—analysis, segmentation and measurement—can be achieved. Finally, knowledge and skills to create standardized customer value measure, or to help in behavior analysis or modeling, maybe found internally with your CFO, or can be outsourced to a ser-vice provider that specializes in combining analysis tools and consulting.

As you work to establish this view and connect the dots, you should bear the following questions in mind:

-tion?

-tive customer experience versus that of our competi-tors?

Getting the Full PictureThe new consumer has changed the marketing dy-

namic—increasing defection and reducing loyalty—and poor customer experience only accelerates the negative impact on overall customer loyalty. Companies mired in traditional business processes struggle to deliver positive customer experiences because they lack customer cen-tric focus and are therefore missing the deep customer understanding necessary for developing customer strat-egy and empowering people within their organization to ensure personalized customer experience.

By embracing companywide change that focuses on building a 360 degree view of every customer, compa-nies have a significant opportunity to increase customer satisfaction, customer retention, efficiency and customer value. With only some effort and a diligent data audit, or-ganizations that leverage process, technology tools and people can create a 360 view of the customer and can share that customer data across the organization to cre-ate a personalized customer experience—connecting the dots that complete the customer picture and improve customer retention and loyalty. L

Simply taking no action to create a 360 view is not an option. In fact, the wait creates an even higher hurdle to jump.

The 360° View: Customer Understanding Puts You Ahead of Your Customers (continued)

Learn how you can activate dormant or past customers, retain and engage current ones, and cross-sell and up-sell your best ones through Precision Marketing solutions from InfoPrint.

Contact us today to learn more about our low-cost assessment and pilot programs, and see the ROI for yourself.

Precision Marketing solutions from InfoPrint: Visit InfoPrint.com/PrecisionMarketing

Strengthen your marketing ROI with Precision Marketing solutions from InfoPrint.

The cost of sending irrelevant messages is increasing. People aren’t just ignoring you anymore, they are opting out and disengaging from your brand. In fact, 54% of customers surveyed have ended a brand relationship as a result of poor communications1.

Ricoh, InfoPrint, and the InfoPrint logo are trademarks or registered trademarks of Ricoh Co., Ltd, in Japan, the United States, and other countries, and are used under license from the trademark owner. InfoPrint Solutions and InfoPrint Solutions Company are tradenames of InfoPrint Solutions Company, LLC. 1http://www.outputlinks.com/html/news/infoprint_CMO_Council_012510.aspx

It’s all possible. And it starts here.

Deliver only what matters the most: relevance


n a recent trip to a conference at the Hard Rock Hotel in Las Vegas, I found myself intrigued by an advertisement for one of the hotel services. Although I had never heard of Hart & Huntington, their claim of “offering a great customer experience for both veterans of the tattoo community and first time clients, as well as building [a] brand around high-quality tattoo artwork” told me two things. First, Hart & Huntington was a tattoo company and, second, they were focused on providing a great customer experience. Knowing that the principles of branding the customer experience can be transferrable from one industry to another, I visited Hart & Huntington to find what secrets might unfold.

After some brief confusion about my request to talk with a manager about the company’s customer experience—and after politely declining their offer of learning first hand by getting a tattoo—I had the pleasure of chatting with Ronnie “Mooch” Mendoza, Operations Manager for the Las Vegas H & H location. We talked about what made the customer ex-perience so exceptional in his store. Here is a summary of that discussion and Mooch’s recommendations for creating a great customer experience.

Hire the right people When interviewing applicants for tattoo artists or recep-

tionists, Mooch assesses their skills and experience. How-ever, most of his interview questions drill down on how cus-tomer-focused the candidate is. If the candidate is unable to demonstrate a commitment to customer service, Mooch will not hire him/her. No exceptions.

Provide a personalized experience From the time customers enter H & H, they receive prompt

and personalized attention. (As evidence, two people offered me assistance within 30 seconds of entering the store!) They can either choose their artist or someone will help them re-view online images from each artist’s portfolio, allowing them to determine which style they prefer. Once an artist is chosen, the tattoo design and customer feedback process be-gins. The artist will find out if the customer has had a tattoo before and tailor the approach to the customer’s level of ex-perience as they discuss the vision. Every step of the way, the artist provides expertise and recommendations. At the end of the discussion, the artist produces a template of what the tattoo will look like. Final changes are made and, only when the customer is completely satisfied with the design, will the actual procedure begin. Finally, the store is designed with ut-most consideration for customer comfort, from the cool room temperature to options for partial or complete privacy.

Branding Secretsby Nancy Porte, Vovici, Inc.

O

FEATURES

of a Tattoo Artist


Build the brand through the customer community Mooch noted that many customers plan their trip to Las

Vegas around their plan to get a tattoo from H & H. They are familiar with the business through either the A&E TV Series, Inked (no longer in production, but you can view previously taped episodes) or they have seen customer testimonials on the H & H Message Board. A quick visit to the Message Board reveals comments like “I had the best experience with H & H this last Sunday thanks to Josh! I was in contact with him be-fore traveling to Vegas and set up a good time to come in and work out what I wanted to have done. He took my idea, gave me some advice, drew it up, and did the tattoo in just a short

time. It was a great experience!! Highly recommend him if you are in there!” and “The whole thing was a great experi-ence - he put me at ease right away and kept me laughing the whole time. The rest of the guys in the shop were really nice too. Definitely recommend the shop.”

Hart & Huntington delivers on the brand promise. They know that each interaction represents a “moment of truth” that can enhance or erode their brand, heighten or undermine customer loyalty, and positively or negatively affect company revenue. Like customers in other industries, H & H clients expect fast service, convenience and a quality outcome. The ability to achieve customer satisfaction on a consistent basis is powering Hart & Huntington’s strong reputation and in-dustry leadership.

Although most of us work in industries very different from a tattoo company, we are similar in our goals to provide supe-rior and consistent customer service – not to mention achieve industry domination! But before we can achieve greatness, we must first understand our own business from the cus-tomer’s perspective. Whether you use surveys, focus groups or online community discussions, the exercise of finding out how customers feel about doing business with you is invalu-

able. Once you understand how customers rank and rate their interactions with you, you’ll have a clearer picture of your customer experience branding. That knowledge will provide the necessary focus for which interactions need to be prioritized for improvement.

The next step is to customize each customer’s experi-ence. H & H knows a lot about what their customers ex-pect. Then they take it to the next level by interviewing each customer about what image and style of tattoo they want. With that information they match the customer with the right artist who assists them through the pro-cess. Is that very different for us in the software business?

Not really. We already know most of our customers expect fast service with a quality solution. If a customer with Product ABC contacts your service department, are they immediately matched up with the Product ABC expert in your department? Or do they go through a triage process with a less qualified team? While it may be more efficient for your business to provide a triage team, an opportunity is missed to provide a superior experience by customizing the interaction to the customer.

So, when you think of branding customer experience, think of tattoos – indelible marks that possess deeper meaning – and ask yourself these questions: Do you pri-oritize customer focus as a key criteria when evaluating a potential hire? Do you customize the experience to the customer’s needs from beginning to end? Have you made a positive, lasting impression? Do you have customers that look forward to doing business with you and tell others how great you are?

At the end of our discussion, Mooch proved his com-mitment to customer satisfaction by giving me a tattoo sticker and inviting me back if I changed my mind about a real tattoo!

They know that each interaction represents a “moment of truth” that can enhance or erode their brand, heighten or undermine customer loyalty, and positively or negatively affect company revenue.

L

Tattoo Artist



FEATURES

CPG: A recession-proof business?by Andy Wright, Carlson Marketing

am sure most people are familiar with some of the consumer pack-aged goods loyalty programs that have been running over the last few years, of which perhaps MyCokeRewards™ is the most famous.

However, since a burst of loyalty experimentation by the sector some 10 years ago, these programs are the exception rather than the rule. All that is about to change and I predict loyalty programs will become as much the norm in packaged goods as they are in retail. As recent as last year, two thirds of food manufacturers either have, or are planning to introduce loyalty initiatives according to data from the Aberdeen Group.

So, why the sudden flurry of activity?Firstly, the current recession has driven consumer loyalty for pack-

aged brands to a new low. Two recent notable surveys underline this. Recently, comScore published the results of a March, 2010 study

on brand loyalty among consumer goods products, and showed a sig-nificant decline in all categories. The study showed that consumers will trade down in price during a recession. Over the past two years, alle-giance to some brand categories such as health and beauty aids, aver-aged a 15 percent drop in loyalty.

Retail partners are providing plenty of opportunities for the loyalty switch; if consumers want to go cheaper, private label brands are a vi-able option. Nielsen Research showed private label sales in the CPG cat-egory are up substantially. In the US, private label brands account for 17.3% share of dollars and a 21.9% share of units by March 2010—up 2.1 and 1.9 points respectively from 2007. Once again, on the CPG scale, share points are huge. Branded products, however, still drive the vast majority of dollar (82.7%) and of unit (78.1%) sales.

Secondly, in addition to driving traffic to private labels, retailers have made big advances in gathering consumer purchase data through their own loyalty efforts. Whilst it is true that many retailers are providing this data to their manufacturing ‘partners’ and at the same time have provid-ed access for manufacturers to their own loyalty-based communications channels, it does put all the cards in their own hands. Manufacturers are realizing that they now need to gather their own customer data in order to drive innovation, targeted communications and ultimately drive sales.

Thirdly, whilst early loyalty efforts were exciting, they were always doomed to failure because the costs of infrastructure and one-to-one communication were too high to make the effort pay off. Today, the huge advances in all types of digital communication and the ubiquity of the web have made the true promise of loyalty programs deliverable.

So where does a loyalty program fit with other marketing activity?

From my point of view, it certainly does not replace mass consumer awareness advertising that is essen-tial to many consumer brands. Nor does it replace effective retail promotion. Done well, it does replace existing CRM efforts with something much more ef-fective. You have better targeting, you can focus pro-motions on key individuals in the right way. The pro-motion can sit on the loyalty site as a place to put it even if you do mass work to let people know it’s there. Here is how it works:

A new media channelBuilding a loyalty program involves the creation of

a destination for customers to experience and engage with the brand. This is always largely in the digital space and if executed well is like creating a completely new private media channel directly to the customer. This is incredibly important in today’s splintered me-dia universe, creating huge efficiencies. You can think of ‘points’ pretty much as media expenditure—driving your most important customers to your own market-ing channel every day.

Partnership FundsOnce this loyalty ‘destination’ has momentum, it

has worth as a medium to other partner brands that are only too happy to provide partnership funds to rid-ing on these rails and engaging directly with the con-sumer base. This not only provides more engagement and stickiness for brand users, but also helps pay for the cost of the program.

Reduction in promotional expensesPromotional expenditure is also reduced as this

destination provides an effective portal for all pro-motions, allowing them to persist longer and reduc-ing costs as a result. For one client, in the first year of loyalty program operation, we reduced promotional expenditure by over a third and still grew share over target growth rates.

I


Tracking actual purchasesA key goal of CRM is to provide a dialogue and

gather data from customers in order to make future communications more effective and drive the busi-ness. However, all CRM activity within packaged goods marketing today relies on reported consump-tion data, which is notoriously inaccurate. A loyalty program tracks actual purchase behavior and is there-fore much more powerful for decision-making.

It has to be said that even with advances in com-munication technology and operational effectiveness, a loyalty initiative isn’t right for every CPG brand. It does require a certain combination of purchase value and frequency to get the economics right, but even then it is instructive to understand that very small monetary rewards if made in the right way with the right brand/emotional appeal can move share mark-edly. It is also worth noting that pulling together a coalition of brands appealing to the same consumer segments can bring a very effective value proposition together to power loyalty economics.

Here’s an example: Pampers. Its “Gifts to Grow” loyalty program was lacking the partner reward infra-structure to continually attract customers and their earning structure needed refinement. After all, diaper customers are only in market for a finite period of time. The program collected plenty of data and rewarded consumers for sharing that data with them, but that was it. Now we have the ability to offer bonuses on products and define targeted trigger offers that move behavior at appropriate times, to keep members at vulnerable switch points in their relationship with Pampers. By changing up some program elements, Pampers was able to improve results on all fronts. Active participation among consumers increased by 20%, the program rewards budget became more ef-ficient by 10% and overall ROI improved by 12.5%. Most importantly, Pampers customers had a reason to stick with the brand that transcended price.

With lift, shelf space, and future growth at stake, a loyalty approach isn’t really a question of “if” anymore, it’s a question of “when.” The challenges are easy to see for CPG brands right now. Consumers are price sensitive, retail partners have the data, the direct con-nection to consumers and will take advantage of that.

With continuing market and economic pressures, now that the issues of cost of deployment have been overcome, and now that there are effective ways of gathering consumer purchase data and delivering value in exchange, we are about to see major shift to-wards loyalty programs across the whole sector. L


really dislike carrying a lot of loyalty cards around in my wallet, and I hate those little key chain cards even more.

Surprisingly my grocery stores have always been innovative enough to link my customer loyalty card to my mobile device. When I am checking out, I simply key in my mobile phone number and I instantly see the savings being deducted from all my items.

It has me wondering: why haven’t other retailers figured this out yet? Cell phones are essentially universal at this point, and thus they are a simple replace-

ment for retail customers who, like me, would prefer to avoid a wallet or keychain over-stuffed with loyalty program cards. Like a lot of big ideas, this innovation is equal parts simple and completely brilliant.

Obviously there is no need to sell you, reader, on loyalty programs – you wouldn’t be reading this if you didn’t already know they work, and that it is seven to ten times more expensive to acquire a new customer than it is to keep an existing one.

Since customers who belong to a loyalty program visit twice as often and spend an aver-age as four times a much as those that are not in the program, I think it’s time to figure out what loyalty programs can do to mobilize their solutions and get with the times.

After all, there are 270 million mobile phones in the US, and 82 percent of Americans admit to never leaving home without their phone. Mobile provides one of the easiest and most direct ways to improve engagement with loyal customers. The loyalty industry can leverage the mobile channel to extend its programs.

Here are some impactful ways to mobilize your loyalty program:

Provide a Mobile EntryRetailers can increase participation in loyalty programs by offering a mobile entry meth-

od. All entries – and the metadata that comes with them – can be captured and program-matically passed to existing loyalty platforms.

Even better, let customers text in to join, reply with my e-mail address to send them a form to fill out later. Give them the savings on the spot but don’t “activate” the program for future purchases until the customer finishes the registration online.

This eliminates customers taking up time at checkout filling out forms. As we all know, anytime you can make something easier you will up the amount of user engagement.

Mobilize or Dieby Matthew Silk, Waterfall Mobile

I

FEATURES


Start a Mobile Referral ProgramBy incorporating mobile solutions into existing loyalty pro-

grams, brands can incentivize loyal customers to refer friends via mobile – and will reap the benefits of a broader program mem-bership.

Alpine Meadows Ski Resort in Lake Tahoe, California recently successfully launched a social media campaign with a referral tie-in and experienced great results. Alpine had skiers texting in to win a pair of weekday ski passes and encouraged visitors to spread the word to friends. Each referral entry counted as an ad-ditional entry for the original customer. In the end, 45 percent of the entries came from referrals.

Provide Customers with Real-time Account Activity Financial institutions could allow customers to register their

cell phone numbers and text in for the most up-to-date account information even when they are on the go. For balance updates, customers could text BAL to the bank’s short code. For recent transactions, they could text TXNS.

SMS could also be used to alert clients when there are chang-

es to their accounts – for example when a home address, phone number or email on an account has been changed. This immedi-ately gives the customer an opportunity to contact the business and let them know if they did not make the change – saving the client a huge hassle.

Mobile can also be helpful when an account has been locked out because someone has entered the wrong password the set number of times. Instead of having to call the bank or the bank needing to send a confirmation e-mail, a text message could be sent with an unlock code and next steps. SMS could also be used to notify an account holder when they have overdrawn an ac-count, or when a large sum of money has been withdrawn.

Sale RemindersEvery couple of weeks my local grocery store has a big 8-hour

sale. They generally send out a mailer to advertise the sale. Inevi-tably, the mailer comes mixed in with a bunch of other market-ing offers, and many times I just recycle the entire stack without looking at them.

But here’s the thing: I actually do like those 8-hour sales, and want to know when it’s happening. As a loyal customer and part of the loyalty program, it would be great if they sent me a text message saying, “Reminder: our 8-hour sale starts today at noon. Chicken $1.99/lb and many other great deals.”

How many additional people do you think my store could at-tract if they sent out a text reminder the day of the sale?

Apparel and other types of retail stores also benefit greatly from mobile. They should be texting store coupons to customers

regularly as a way of generating foot traffic. Stores should include calls-to-action on print, TV and radio ads so customers can text in to get a code delivered straight to their mobile phones.

Retailers are also seeing success with send-to-phone pro-grams. Customers can select coupons online and choose to have those specific codes sent directly to the phone. Or even better, like my grocery store, customers can add the coupon to their loy-alty program and it will automatically give the deal at check out when customers use their phone.

Again, people never forget their phones – so mobile coupon codes have a higher redemption rate then clipped coupons. As Mobile Marketer has reported, mobile coupons enjoy a five to 15 percent conversion rate, as compared to less than one percent for print coupons. Better still: mobile coupons are good for the environment, and reduce printing, paper and distribution costs.

Appointment and Deadline RemindersAs we all know, a great way to build loyalty is to provide ex-

cellent customer service. Businesses should be using text mes-sages to inform customers of upcoming deadlines or events. This

helps to minimize or prevent future incoming calls from custom-ers about missed payment deadlines or appointments. A text message is an easy and unobtrusive way to remind a client of that deadline before it is missed. Most of all, mobile provides a rich, real-time data set of customer behavior – one that can help companies develop key insights into their shoppers’ behavior and values. Retailers can also use mo-bile to assess the success of loyalty programs themselves to find out what’s working, what’s driving foot traffic, and what could use some tinkering.

Once you’ve developed your mobile program and begin digi-tally engaging with your customers, you can take it to the next level and start consider location-based services (LBS), which have been getting an enormous amount of attention lately.

Foursquare keeps growing in popularity with people eager to “check-in” in hopes of becoming Mayor in the fictional game. Just because people are checking in to a location doesn’t mean they are actually engaging with the brand in a meaningful way. Instead of having someone vying to become your fake mayor, it would be smarter to have them text a special keyword of the day that can give them points, deals or privileges in the program and will actu-ally get people to walk through the doors and spend money. It’s a simple way to reward them for their loyalty.

Obviously, the ability to target customers based on where they are at that exact moment is a huge benefit for a brand. But, for now, focus on the simple – and get your current program ex-tended to utilize mobile and it clear advantages. And we’ll talk more on LBS another time.

82 percent of Americans admit to never leaving home without their phone. Mobile provides one of the easiest and most direct ways to improve engagement with loyal customers.

L

There’s a New Game in Town!by Stephen Baer, The Game Agency

oyalty programs are designed to be easy as 1, 2, 3: spend, earn, redeem. But if so simple, why do very few loyalty programs succeed in providing consumers a compelling reason to increase their participation? In a world where companies are fighting for consumer atten-tion and their communication are increasingly moving online, it’s time to enhance loyalty programs with video game mechanics.

Today, gamers come in all shapes and sizes, ages and genders. According to the Pew Re-search Center, more than half of all U.S. adults, from Baby Boomers to Generation Y, identify themselves as active gamers. They play games at home, at school, in the office and on the road. The growth in game play and expansion across demographics is due in part to them being more elaborate, immersive and social than any other medium. In addition, a new trend of playful competition has risen in the consumer society and everyone wants to raise his or her social status.

Consider Farmville, a wildly popular Facebook game leveraging casual Role Playing Game mechanics. The game employs a continuous reward mechanic to addict more than 66.5 mil-lion monthly active users (a number larger than the population of France), to keep coming back almost daily. Most loyalty programs have a similar template to games, but what makes Farmville succeed where these loyalty programs do not? In the case of a credit card pro-grams, dollars are spent and points are earned to get more stuff. In Farmville, players com-plete tasks on their plot of land, and earn points to get more land, plants, and animals. It’s the same concept of earning more to get more. On the surface, the same game mechanics are in place, however, the difference is in the addictive qualities that continually brings people back into the game. At its core, Farmville engages through easy fun vs. the difficulty of logging into your credit card account, a task that is not associated with “fun”.

L Today, gamers come in all shapes and sizes, ages and genders. According to the Pew Research Center, more than half of all U.S. adults, from Baby Boomers to Generation Y, identify themselves as active gamers.



The largest difference between a reward system like that of Farmville and, say, American Express, is how participants are be-ing rewarded. Constant rewards are key to an addictive experi-ence. Games reward players every few minutes, hours or days while most loyalty programs require a long term approach. Every little task that is done in Farmville is advancing the player to their next level upon which they can earn more space, animals, crops, etc. Simple tasks like watering crops will grant players some sense of accomplishment as they work towards that next level. In the case of American Express, buying that fast food hamburger doesn’t offer a sense of accomplishment when two points are granted towards that 100,000 point trip. With that established, there’s not much reason for checking into the rewards page un-less you’re close to your goal. And in a rewards world where most points are equal to a dollar spent, the average consumer waits quite a while to reach 100,000 points.

Loyalty programs can benefit from taking a page out of Farm-ville’s leveling system by rewarding members early and often. Give consumers a reason to go back to the site regularly to check on progress and to engage with your brand. Give members small rewards (games, music, ringtones, etc.) along the way. And add leader-boards among friends to your programs building competi-tion and adding depth to your loyalty game campaign. A great ex-ample of a successful reward program is McDonald’s monopoly:

“The McDonald’s Monopoly Game drives tremendous excite-ment from our consumers and really has become a part of pop culture that people love and anticipate each fall,” say Rick Wion, Director of Social Media. He adds “each year we try to evolve the program so that it stays relevant.” McDonald’s has done a great job of reinforcing the notion of both smaller goals and big hope with a combination of small prizes and big prizes with their An-nual Monopoly game. With each piece earned, consumers are either one third, or one half of the way to a reaching a major re-ward. According to Game-Based Marketing, a book recently pub-lished by John Wiley & Sons, McDonald’s Monopoly game gen-erates nearly one hundred million dollars in incremental revenue per year. The beauty of this campaign is that consumers barely know they’re in the game. What’s a small soda here or some fries there? It’s a lot of extra revenue in McDonald’s pocket, but more importantly, it’s visual progress that is clearly noticeable when that Marvin Gardens slot is filled and there are only two more yellow pieces to go. And for all the consumer knows, that could be on the next coffee they drink.

Let’s look at one more industry; Casinos. Casino loyalty pro-grams are all about leveling up. Most casinos reward comp dol-lars for every personal dollar spent on their floor. Entry-level pro-

grams are free, but getting to higher levels takes time and money. Stretch goals aren’t a problem at casinos because consumers go there to play games and have fun. However, while Casinos sell fun, they sell it on a part time basis. Harrah’s has tried to turn their fun into a full-time experience by offering a virtual casino on their website. This strategy keeps their brand front and center, allow-ing consumers to play slots and craps risk-free. The only problem is, these online games don’t tie to their in casino rewards system. Even though Harrah’s offers games on their website, they are doing little to differentiate these games from other free-to-play casino games on the web. By tying their loyalty reward system to their website games, Harrah’s could accomplish three things:

play on hundreds of other free game websites

-plishments in a virtual world

increase the frequency in which they return to their real world properties

Using games to drive consumer loyalty and engagement with your brand is easy. You can start by adding game mechanics to your loyalty programs in four simple steps:

1. Define what consumer behavior you need to drive. Don’t just think about broad or bottom line objectives, but rather, focus on easy-to-achieve activities that will have an overall impact on your bottom line. For example: incentivize the sending of product endorsements to friends. The more specific you can be, the easier it is to build the right game mechanic.

2. Assign points to those behaviors. Think about how much value each of the behaviors has to your business and assign points to each action accordingly. Points should be weighed relatively, so if opening a new account is ten times more valu-able than clicking on an advertiser’s link, make sure the point system reflects that reality.

3. Create a leader board to display points. Just like the Employee of the Month plaques at restaurants, create a socially-net-worked leader board that allows users to feel like they are ac-complishing something relative to their friends and peers—A little encouragement goes a long way.

4. Make “fun” the tool you use to drive your goal! Whether your business is finance or funerary, making fun a principal objec-tive will substantially increase consumer engagement and drive consumers to remarkable new revenue opportunities.

As it stands, there are fundamental game mechanics in place with today’s traditional loyalty programs. But these mechanics need to evolve with the consumer mentality—which is becom-ing accustomed to more frequent reward satisfaction through popular casual games. The human desire for instant gratification must be enhanced and celebrated if reward programs are going to achieve the next echelon of adoption. Consumer motivation, involvement and immediate rewards are the trifecta of success for brand loyalty outreach. Existing brands must act on these principles and implement new, engaging programs for their con-sumers. If they don’t, they run the risk of losing market-share.

Don’t just think about broad or bottom line objectives. Focus on easy-to-achieve activities that will have an overall impact on your bottom line.

L




he greatest challenge facing loyalty programs is to find the perfect reward mix: the combination of tried and tested redemption options in order to whet the appe-tite of every customer ensuring their engagement levels are high, and to drive their loyalty whenever possible.

Customers have become aware of their right to behave as an individual, so program segmentation is becoming more challenging for the loyalty manager. Loyalty pro-grams are being led in a common direction: a program must afford the customer flexibility to use the program in any way they wish.

The largest loyalty programs are those with the most diverse customer base which require the most diverse re-wards mix. Segments can be endless with demographics; through behaviours such as travel redemption activities to their product usage history. The loyalty program man-ager’s challenge is to satisfy their customers’ needs within these segments.

A loyalty program’s travel component is the most es-tablished, but recently, non-air redemption options have become progressively more common, and increasingly im-portant to their success. While travel options remain a key component, as do cash-based rewards such as fee waivers, a broad and unique merchandise selection is where true diversity can be found. With a mixture of global and local brands, loyalty programs can offer their customers items that are aspirational and unique in value.

A merchandise network can have its challenges. Send-ing items across borders has complications from delivery imports to tax implications, including individual market logistics such as offering an electronic plug to fit the des-tination country’s wall socket. Items must be presented in

The Flexible Redemption Revolutionby Ben Ashwell, Loylogic

the language the customer understands, and they must be able to pay in their preferred currency. They must also be able to receive it in a competitive timeframe. These are a few components that are required by truly global, best-in-class loyalty programs. This is not the time for a customer to question the quality of the service of their program.

A merchandise rich program can provide widespread benefits to program managers and the end customer alike:

Program benefits

rooms, fee waivers, etc.)

-ferred revenues

Customer benefits:

member profiles

levels

However, keeping diverse customer options at the forefront of the program dynamic does not stop with the reward catalogue.

Customers need to be given the freedom of choice with the ability to integrate their own reward aspirations with their lifestyles. If they want to redeem an award sooner, they should be able to do so. If they want to burn as many

T


points as they can, they should have this option. Obtaining a reward with points plus a cash contri-

bution, allowing the customer to call the shots, is where points plus cash payments is of paramount importance. Customers need to be able to choose the construct of their payments as small as 1 point, with the remainder in cash, or the other way around. At the same time, the program sponsor can manage costs and determine where the re-ward is greatest; by increasing value on a greater contri-bution of points, or a greater contribution of cash.

In 2008, in an online survey with more than 9,000 members from 60 frequent flyer programs worldwide participating, one powerful message was heard: 94% of frequent flyers want a flexible points-plus-cash payment option when redeeming rewards. It is an essential com-ponent of the flexible loyalty journey customers require.

There are a number of tools on the marketplace, known as ‘Sliders’ which allow customers to split their total purchase value by cash and points. However some sliders have many more capabilities than others. The most sophisticated generate dynamic per-point-values giv-ing the customer flexibility to determine the value of the points they input. This is done at unchanged costs to the program sponsor. This enables program sponsors with a powerful engagement differentiator, thereby providing a feeling of intimacy with the program.

Advantages can also be felt throughout the redemption journey. Credit card payments can be limited to selected payment providers or partners by enhancing their busi-ness. This can stimulate another section of the customer loyalty journey through credit card spend, acquisition or even activation.

We don’t just see the results in opinion surveys—the statistics speak for themselves. Members who redeem only their points go on to accrue or spend seven times more than those who don’t redeem. For those redeem-ing with cash and points, that statistic increases to eleven times more, equating to 1.5 times as much additional ac-crual from points and cash customers. These statistics support accelerating accrual patterns and become even more pronounced for customers with lower point bal-ances.

It is not hard to see why. From a customer perspective, reward flexibility presents a host of advantages. Custom-ers don’t need to accumulate thousands of points to get benefit from their points. In fact, with flexible points-plus-cash payments, customers can get value from as little as one point, which will present them with a discount on the total buying price.

This drives an opportunity for earlier redemption, leading to deeper engagement with the loyalty program once they reach their ‘golden moment’—the point at which they redeem—thus a dramatically improved affili-ation with the loyalty program. The most frequent busi-ness travelers and the highest spenders are no longer the sole true beneficiaries.

In the current consumer world, customers need em-powerment and customers need choice. The reward programs that offer the greatest selection of redemption options will offer rewards to the most segments of their customer base, and will ultimately be the most success-ful. The flexible redemption revolution has arrived, and is here to stay.

How would fully flexible miles-plus-cash reward payment increase the value of your FFP miles?

Would change my world

I would really like it

Not at all

Loylogic secured a United States patent for

their dynamic slider in Spring 2010, giving their clients exclusive access

to the most flexible points-plus-cash tool on

the market today.

L


e live in an age when the consumer is lodged more firmly than ever behind the wheel. While technology has produced many new and innovative ways in which to market to our customers, we have also witnessed a proliferation of ways in which those same customers can choose not to be marketed to. Welcome to the new Marketing Democracy.

I like to think of an organization’s marketing strategy as a faucet, and the consumer’s hand is on the tap. Customers control the amount of marketing they receive, plus how and when they receive it, and are free to ignore the rest. Effec-tive campaigning requires skilled, direct marketing execution, and when the customer is ready to ‘vote’ with their hard-earned attention, you would be wise to demonstrate a healthy respect for their preferences.

Elections are held daily in the Mar-keting Democracy, whether or not you have claimed a position on the podium. The reason? Consumers trust each other far more than a product or brand, and the digital age has allowed word to spread faster and linger longer than ever. The slickest and most expensive of ad campaigns can never erase the nega-tive web chatter your product may have previously gener-ated. For better or worse, consumer reviews, social network forums and blogs now wield the weight of public opinion. Prevailing requires that you enter the race, and exert a fa-vorable influence wherever possible.

Cultivating advocates and supporters will help you win elections in the Marketing Democracy, and your customers can actively campaign on your behalf. Improving marketing and services across all channels both makes your company easier to transact with, generating more long-term business, and enhances the customer experience for more positive word-of-mouth.

Four Ways to Win Elections in the New Marketing Democracyby Chris Marriott, Acxiom’s Digital Agency

Here are four critical success factors to consider when outlin-ing your election tactics:

1. Recognize: Recognize your customers across all channels through which they engage with you and treat them like an old friend

2. Relevance: Provide offers and services that reflect what they have done with you in the past, and what they are most likely to need now

3. Execute: Insight without execution is pointless, so if you can’t use what you learn in your ongoing marketing communica-

tions you are merely creating overhead4. Incentivize: Design a campaign en-couraging customers to work on your brand’s behalf and create a benefit for customers who display loyalty

The aforementioned concept of loyalty is one that works both ways. In hoping for fidelity from our customers, let us repay them by recognizing them, regardless of where and when they ap-pear, and displaying sufficient insight to extend timely, relevant offers.

Failure to treat every customer interaction as a unique oppor-tunity to learn, understand and predict the nature of future com-munications won’t profit us in the long run. Gathering information about explicit and inferred customer preferences, their wants, needs, motivations and attitudes, cross-channel behavior and circle of social influence helps us create strategies to market to them, and others like them.

Winners in the new Marketing Democracy era fuse insight with media to create high-performing campaigns that are more relevant at every interaction. By utilizing the real-time tools of customer recognition, data insight, personalization and communi-cation across multiple media channels you can better understand your voters and how they research, shop, purchase and expand their use of services. This helps you to identify your best prospects and high value customers, and to focus resources more effectively.

Cultivating advocates and supporters will help you win elections in the Marketing Democracy, and your customers can actively campaign on your behalf.

W

L



The cowrie shell served as both ornamental jewelry and money in China during the Shang dynasty (approx. 1000 B.C.).

The tetradrachma, which depicted the Athens Owl, fi rst appeared in 165 B.C. and was used widely for 75 years.

Modern U.S. currency only appears simple. In addition to being watermarked, paper bills are threaded with a fl uorescent plastic security strip that’s barely detectable.

Prepaid cards were designed by pioneers like American Express Incentive Services to create more fl exible and powerful rewards at the turn of the millennium.

TM

American Express Incentive Services is now InteliSpend Prepaid SolutionsTM. And the change is more than just a name. It represents our renewed dedication to thoughtful, strategic partnerships. Our desire to fi nd solutions beyond the obvious. And our commitment to creating real business results. Visit InteliSpend.com for details.

Currency evolved.SM So have we.

The mark, American Express, marks containing “American Express”, and abbreviations of such marks (i.e. Amex, AEIS, AE, etc.) are trademarks of an affi liate of American Express Company and are used under limited license while American Express Incentive Services, LLC. and AEIS Canada, U.L.C. (“AEIS Companies”) change their corporate names and rebrand. The AEIS Companies are now subsidiaries or affi liated companies of Maritz Holdings Inc. (formerly Maritz, Inc.) and neither American Express Company nor its subsidiaries hold any ownership interest in AEIS Companies.

© 2010 InteliSpend Prepaid Solutions, LLC

IncentiveAd_070710.indd 1 7/7/10 4:43:12 PM


Target Your Social Media Tactics for Stronger Customer Bonds

by Sid Liebenson, Marketing Highway

here is no question that social media communications exert a strong influence on customer loyalty. People trust the opinions of other people far more than they trust companies. Recommendations from absolute strangers online carry more weight than adver-tising in swaying consumer purchase decisions. And the voice of the online consumer commentator grows louder every day as the number of social media participants steadily increase.

Today, all marketers need to understand social media and how to engage with customers through social channels to build and enhance loyalty. Understandably, many marketers have plunged into the social media waters just to test the currents. But is there a better way than just diving in? Can social media activities be used tactically to move customers up the ladder of loyalty?

Nearly 20 years ago, Richard Cross introduced the “Five Degrees of Customer Bonding”:

The concept, as customers progress to a higher degree of binding, different methods of communication carry greater impact, with direct, personalized messaging having greater influence past the Relationship stage. The continual collection and intelligent deployment of customer data help push the customer towards Advocacy.

T



Cross’ “Five Degrees” concept still makes sense. But it was developed at a time when mar-keters still controlled the brand conversation and email was an emerging technology. How does this construct hold up when social media enter the picture? We decided to look at how social media can fit into every phase of the cus-tomer bonding process.

First, don’t think of the process as a linear hierarchy. Even in the 1990s, it could be seen as a loop. At that time, however, the loop meant that the intelligence derived from dialogue with Advocates could be used to better address methods of establishing Awareness, Identity, Relationship, and so on. With the overlay of so-cial media, it also means that the Advocates can help lead consumers through each phase.

Awareness. This is the stage when consum-ers first become aware of a brand. Awareness is built through advertising, promotion, and word of mouth. Of these methods, it is word of mouth that creates the most relevant awareness. As social media is the online equivalent to word of mouth, social media can be extremely effective.

Tapping into “social influencers” can help get the word out about your brand. Connect with bloggers who have credentials in your product category and/or a strong following with your target audience. Encourage customers to self-identify through Fan or Group pages on Face-book, YouTube, and other sites, and give them a reason to pass along brand messages to their friends.

Place a Wikipedia entry. Post photos and vid-eos on content sharing sites. When any brand is marketed, people will want to know more about it—and they’ll go online. So make it a goal to have your brand message where people are likely to look. And encourage online dialogue. Add “share with social networks” functionality to emails, ads, and other brand communications.

Identity. A good job by the marketer at the Awareness stage leads the consumer to the Identity stage. This is when people not only know the brand name, they understand and agree with its promise and values. At this stage,

a brand is seen as appropriate, relevant, and worth consideration. The marketer should address consumers not as a general popula-tion, but as actual brand prospects.

Buyer advice is crucial at this stage, especially if a purchase represents significant cost or risk. The more a brand is a “considered purchase”, the greater the sway of consumer ratings and reviews. Marketers should facilitate and promote product reviews on their own Web sites and link consumers to third party sites that compare and rate brands within the product category. Brands can even partici-pate in conversations by address-ing issues brought up in reviews.

Bloggers can be given prod-uct to test and discuss. Marketers can host Webinars and podcasts, post product demonstrations, and place sharing tools on their sites.

At the same time, marketers should be listening to what’s be-ing said about the brand in social media. What are the product attri-butes that are valued, and what is found deficient? It’s possible that a portion of the audience might value one attribute, say product design, while another audience segment is highly enthused about product efficacy. Messages that reinforce these different attributes can be targeted to social media vehicles that reach the appropriate audience segment.

Relationship. At this point, the consumer has had a brand expe-rience. If the product performs as promised—i.e., lives up to expec-tations derived from advertising, packaging, word of mouth (includ-ing social media), and online research—the Relationship stage gets off to a positive start. Give new customers the opportunity to share their brand experience. Ask for feedback, reviews, etc.

Of course, not everyone will have a great brand experience, and by asking for feedback, even the best product will garner some neg-ative reviews. However, by monitoring the reviews you can often address issues early and directly with less-than-satisfied custom-ers, thus reversing the trajectory of the relationship.

Marketers should be listening to what’s being said about the brand in social media. What are the product attributes that are valued, and what is found deficient?



Target Your Social Media Tactics for Stronger Customer Bonds (continued)

It makes sense to initiate direct contact with custom-ers at this stage. Invite customers to follow or “friend” your brand, or join your groups on social networks. Offer incentives to get them to register with you and share con-tact information (and product usage information as well), and respond with something of value, like upgrades, help-ful information, apps, or entertaining online experiences. Enroll customers in frequency programs that reward them for repeated purchases.

Be sure that your communications allow for two-way dialogue. Capture additional demographic, behavioral, and attitudinal data over time to move towards increas-ingly personalized messaging. Expand the online relation-ship off line, with direct mail and/or mobile marketing to demonstrate customer appreciation...and be sure to link these efforts with social media channels.

Community. At this stage, the brand becomes integral to the consumer’s life and lifestyle. Consumers have a definite preference for your brand and seek to join with others who are similarly disposed.

Not every customer with whom you have a brand Re-lationship will rise to Community status. Some customers are just not that into your product category. While some customers will care deeply about every detail of your wid-get, others might be perfectly happy with yours, yet just as likely to pick up a substitute. Even frequent customers are not necessarily in your brand Community. Some trav-elers will join Delta SkyMiles because they love the Delta experience. Others are members because they fly to or from Atlanta often and Delta offers more flights, but they have no strong preference for the brand.

Customers that do reach Community status are very engaged with the brand. Give them a chance to partici-pate in discussion groups and forums, or to comment on blogs. Invite them to customer-only pages on your Web site. Provide “behind the scenes” information. Solicit their ideas and comments on new or upgraded products. En-courage them to upload photos and videos showing how they use the brand. Give them opportunities to connect with other strong brand enthusiasts through Webinars or simple Q&A boards.

Exclusivity and recognition become more important at this stage. Brand messaging should be increasingly rel-

evant and personal, as more and more consumer data are collected and analyzed. Brand relationship activities can move into the real world with events that bring customers together, like conferences, rallies, or advanced product in-struction (such as “driving schools” for high-performance car owners). And, by documenting these events, activi-ties can move back online with posts to proprietary brand sites and photo/video sharing sites.

Advocacy. Now we’ve reached the gold standard of customer bonding. These customers are so loyal and en-thusiastic that they’ll gladly do your marketing for you.

Customers at this level need to feel enfranchised with the brand at a very personal level. They may be given en-try to an exclusive micro-site where they receive exclu-sive customer services. They might have direct access to brand representatives. Brand communications should go beyond product-specific messaging to focus more on the customer as an individual. In essence, when communicat-ing with Advocates, you’re not talking to customers as much as you’re talking with friends.

Invite Advocates to host groups and start groups of their own through social media channels. Ask them to blog on your site, a third-party site, or a site of their own. Treat them as ultimate insiders with access to new prod-uct previews, pre-release orders, or samples if possible. Encourage them to share their thoughts through Twitter and other social networks.

This group is eager to spread the word about why they like your brand, which reinforces your efforts with customers at the earlier phases of the bonding hierarchy. Moreover, your Advocates comprise your best source for authentic word of mouth. Give them a reason to refer new potential customers, and you’re likely to get the most qualified prospect list you’ve ever seen. You can even en-list them in customer recruitment programs.

At every level of customer bonding the scale of rela-tionship marketing increases, as the brand’s database of customer information grows more robust. Similarly, at every level there are actions marketers can take in social media that can enrich these relationships. By adding tacti-cally deployed social media efforts to a database-focused loyalty program, marketers can enhance their success in moving customers from Awareness to Advocacy.

When communicating with Advocates, you’re not talking to customers as much as you’re talking with friends.

L


The Human Connection® is about the people who affect your business success:

employees, channel partners and customers.

Solving business challenges with people solutions

MarketingInnovators.com 800.543.7373

...referring someone to your brand. ...a trusted partner. ...a crucial measure of success. ...The Human Connection.®

Loyalty is...

Sales IncentivesEmployee EngagementChannel PerformanceCustomer LoyaltyRecognition


onsumers are increasingly ignoring corporate marketing and rely instead on the experiences and recommenda-tions of friends, family, co-workers, and online peers. The fundamental marketing challenge today is more strategic than tactical.

A Nielsen Global Online Consumer Survey found that recommendations from personal acquaintances and online con-sumer reviews topped the trust list for more than 25,000 consumers from 50 countries. In fact, 90% of consumers surveyed said they’d trust recommendations from people they know. But who are these trusted people?

Who Are Your Influencers?Marketers, understandably, put a lot of energy into identifying their most influential customers—the customers who are

the first to try new products, have large social networks, and are most vociferous in talking up (or down) their experiences online and offline. It seems obvious that these “hyperactive” customers would sit at the top of the list. The reality is that these customers are not necessarily any more influential in swaying the purchase behaviour of their networks than those with smaller networks and softer voices. In fact, it is a different subset of customers that truly serves as the “everyday influ-encers,” with much greater impact on peer purchase behaviour. These ‘influencers’ are already in your customer base—you just need to pinpoint them and start nurturing your relationship with them.

The reality is that it’s not easy to identify the true influencers for specific customers, never mind figuring out how to connect with these influencers once you’ve identified them. Typical market segmentation tools are irrelevant as influencers don’t conform to standard behavioural characteristics or demographics.

In addition, it’s been found that the people with the largest networks and loudest voices are not necessarily the most in-fluential. For example, a large European mobile operator found that only 20% of so-called “Alpha” users (a highly connected person that acts as a hub for their social network) were truly influential in driving purchase behaviour. At the same time, the customers who were actually the most influential rarely showed up among the most connected individuals.

Influencers Hold the Key to Capitalising Their Followers Influencer identification increases marketing ROI by five timesby Ran Shaul, Pursway

C



A Needle In A HaystackFirstly, no one said it was going to be easy but even needles can be found if

you use the right tool. When looking for influencers, rocket science is particu-larly useful!

Traditional CRM programs view each consumer in isolation, failing to cap-ture the social sphere that affects their behaviour. A new approach, Influencer Marketing Management (IMM), is beginning to emerge:

Step One - Focus on the InfluencerAccurately identifying purchase influencers is the foundation of the

approach. Within your customer base is a group of some 7–15% that serve as opinion leaders. Each of these opinion leaders typically influences pur-chase behaviour of 3-10 followers—which means that identifying and suc-ceeding with the influencers can affect your entire business.

Step Two - Focus on TransactionsFocus on transaction data since that is where real influence happens

(this is where the rocket science comes in). Analysing millions of transac-tions to uncover patterns of influence is not easy, but it is possible with the right approach and the right algorithms. Analysing purchase histories can uncover patterns that reveal meaningful social connections. For instance, two people shopping at the same time in the same store could be a coin-cidence, but if the same two people also shop at the same time in a differ-ent town, you start accumulating evidence for a social connection between them. Once you find enough similar patterns, you can be confident that there is a real social connection between the two shoppers. The next step is to identify who is the influencer and who is the follower which can be de-termined by overlaying behavioural data to the social connections. Crunch enough data with this approach and you can determine influence patterns with extremely high conviction (>99.95%).

Step Three – Focus on the Story, not the payoffWhen marketing to the influencers, it is important to remember that

the more meaningful payoff is in their ability to influence others, not the amount they shell out of their own pockets. What motivates influencers to tell a good story is related to their emotional connection to the brand. Things like price breaks or free products aren’t effective and may backfire, as the followers will expect similar incentives. Programs that create posi-tive emotional experiences—such as ”be the first to know”, high touch per-sonal contact, and early access to new products and services are far more effective in turning influencers into advocates.

Step Four – Measure what Counts Turning Influencer Marketing from an aspiration into a measurable

marketing discipline requires a focus on the metrics that the CMO can take to the boardroom. Counting tweets and “followers” may be an interesting exercise, but what really matters is whether targeting the influencers moves the needle when it comes to top-line and bottom-line business results.

A single influential customer has the ability to reach almost as many impressions as traditional marketing outlets, but with greater trust and targeted relevancy. Marketers not tapping into this resource are missing a chance to add to their tool boxes, expand their reach, and improve relevance. Source : Defining Influence as a Strategic Marketing Metric, Forrester Research, Inc., December 2009.

Once you have this insight focusing on the right customers with the right marketing activities and tracking the right metrics will achieve game-chang-ing results far beyond the incremental improvements possible with the best of CRM.

Particular issues can be identified such as churn rates, as was the case for Cellcom Networks. “We were able to use social network technology to increase churn prediction and consequently pre-vention by a factor of 10. We expect to be able to use the technology in most key areas of marketing activity.” Explains Adi Cohen, VP marketing, Cellcom Net-works.

Targeting customer apathy is anoth-er key area, as Aswyn Saktoe-Veenenbos, VP Marketing Database Intelligence, T-Mobile Netherlands explains. “Con-sumers are flooded with marketing messages and are increasingly tuning out of vendor communication. Tapping into the power of social influence gives us a whole new way to interact with our customers…It enables us to reach an au-dience that was otherwise difficult to communicate with, let alone get them to act.”

Companies typically realise between 5x to 10x improvement in marketing ROI as they’re able to magnify the reach and effectiveness of customer acquisition, cross-sell, and retention efforts follow-ing investment in IMM. By identifying, understanding, and cultivating the ener-gy of its advocates, companies can har-ness the power of viral marketing, reach customers and prospects that might not otherwise be reached, and strengthen long-term customer loyalty.

For more information, please read Ran’s ebook: http://resources.pursway.com/eBook-TheInf luencerMarketin-gRevolution.html?source=loyalty L




ow many spam messages, unwanted emails or irrelevant advertisements do consumers receive each day? Surely what-ever number it is, that number is one too many.

Unfortunately for most, it has become a monotonous part of life to tune out television commercials, toss out half of our mail, and immediately empty out spam folders each morning. Why should people have to accept this as a part of a routine?

To give you a rough estimate as to how many marketing messages consumers receive, on average customers receive 3,000 each day, the majority of which are actively ignored. Ob-viously, marketers need to better address why this is happen-ing, what can be changed, and how to better serve customers.

Now is especially not the time to be teetering on a fine line with customers. As consumers are being forced to make strict choices as to which brands and products they use, marketers need to continue to increase loyalty and bring in revenue. After all, without customer support, CMO’s would be without jobs and without profit. A 2009 study by the CMO Council found that 63 percent of consumers have considered abandoning a brand altogether, simply based on the amount of junk or spam

Developing Relationships and Direct Content—How to Better Serve Consumers

they’ve received from the company. Surely this is support that most companies cannot afford to lose.

To find out how to best serve consumer needs, InfoPrint Solutions and the CMO Council have teamed up to conduct a poll, discovering what marketing methods have worked best thus far.

As a result of the Relevancy Report, 91 percent found that email messages are both irrelevant and frustrating to receive. This was an eye-opening discovery for the CMO Council, who originally determined emailing as a cost-saving, direct option to reach customers. Almost half of this percentage also said they’d stop subscribing to that brand based on these irrelevant emails.

So where’s the balance between the ongoing battle of mar-keter versus consumer? Is there a way to compromise and sup-port the needs of both parties? Has slick marketing jargon such as “targeting” or “capturing” an audience completely turned off consumers? And is this jargon necessary for a marketer to succeed?

by Sandra Zoratti and Lee Gallagher, InfoPrint Solutions

H


All of these are valid questions, and ones that don’t necessarily have straight forward answers. Everyone has their own opinion as to what works and what doesn’t overall, but there are options to come to a common ground.

With precision marketing, marketers can deliver direct mar-keting messages that are both relevant and preferred by the cus-tomer. In the end, it should all come full circle – the customer data drives relevancy, relevancy drives brand loyalty, and loyalty drives revenue.

So what exactly does this process entail? There are five essen-tial steps one must take to successfully connect with a consumer. By abiding by these rules, marketers should be able to deliver direct market-ing messages that are useful, and in the end both the customer and the company will win.

Step 1: Identify the IssueBy first identifying the issue at hand and the problem that the consumer is having with the messaging, marketers can then identify what they need address. Once you’re clear as to what this is, you can move forward in the process.

Step 2: Leveraging What is Al-ready ThereInstead of starting from scratch, market-ers should utilize the tools they already have. By first developing a customer seg-ment with the desired level of engage-ment, marketers can then find custom-ers whose previous behavior indicates similar interests to this new group. Moving forward, this group can be divided into a target group, and then into a control group.

Step 3: Determine the Best MessageThe next step in the precision marketing process is to synchronize all of the messages to determine what the best message is for the channel. In a test case with Best Western International Inc., Info-Print and the CMO Council were able to demonstrate why this step is important and how it works. First, the active rewards members were examined and 100,000 were identified as comparable cus-tomers to Best Western’s high-value customers. In other words, those who were more likely to apply for a cobranded Master Card or engage in the “More Rewards, Faster” summer promotion. Half of this group was targeted with personalized messaging through monthly loyalty statements. These statements were leveraged as promotional documents, letting loyalty program members know that they could accumulate points faster during this promotional period.

Step 4: Measure the ResultsAfter the test campaign has been put in place, the results must be measured based on a wide range of criteria and bottom-line mea-sures. For example, the test case with Best Western proved to be a success, as there was a 39 percent increase in the number of stays and a 30 percent increase in revenue. These measurements are a sure sign that audience targeted for this campaign was relevant and interested in what Best Western had to offer.

Step 5: Refine and RepeatOnce marketers have gone through each of these four steps to

connect with a consumer, they must then reassess the results and produce the same or different results, depending on what the outcome was in the test. It is also essential to understand why the results occurred the way they did. For example working with a different hotel chain may result in a completely differ-ent outcome, depending on that chain’s customers and needs.

The key to this process is to have a strategy in place so that a successful communications channel can be created. In the case of Best Western, for example, both personalized and targeted promo-tional messaging resulted in a success-ful campaign in which revenue and cus-tomer engagement increased. A lesson to be learned for marketers out there is that there are ways to generate rev-enue through existing customers. There

is a lot of potential for revenue increase by simply creating more meaningful relationships with those who already are loyal to a par-ticular brand or company.

When it comes down to it, consumers know that with the tech-nology and opportunities available today, there are ways to avoid irrelevant, mass-messaging. Marketers need to take that extra step to show their consumers they care, and that they do want to provide the best and most relevant recommendations for them. By looking at consumer purchasing history and recognizing which companies that consumer has done business with in the past, mar-keters can determine what messages and promotions are relevant.

Marketers must realize that they can’t win without their cus-tomers, and if they aren’t able to address those customers’ needs, their business will quickly go out the window with the other 3,000 messages. So here is the bottom line – get to know who you’re do-ing business with, and they will continue their business with you.

Marketers must realize that they can’t win without their customers, and if they aren’t able to address those customers’ needs, their business will quickly go out the window with the other 3,000 messages.

L

Director, Loyalty & Retention MarketingSprint

Service industries traditionally have focused most marketing dollars on customer acquisition. It’s great to see Sprint so committed to its customer! How have you been able to make customer loyalty a priority?

We know that driving customer loyalty has to start with meeting basic customer needs. So we’ve made customer service, billing, and the network major priorities. We also realize the importance of de-veloping a trusting relationship with the customer as only then can you hope for the customer to be loyal to you and eventually, be an advocate. Part of our commitment to the customer was the launch of our Sprint Premier loyalty program which has gone a long way in driving customer satisfaction and loyalty with our highest value and longest tenured customers.

Share how this change in focus (toward customer retention) has changed your organization?

Over the last couple of years, we have had a company focus on improving the customer experience. That focus has been paying off in higher customer satisfaction overall. We’re also learning that we don’t have to trade off customer acquisition against customer retention. Retaining customers and trying to get them to become loyal advocates is a great acquisition strategy and we’re gradually changing the dynamics so that our employees understand that.

We’ve been hearing great things about the new Sprint customer loyalty initiatives. Loyalty Management takes a closer look at the woman behind the brand– Melinda Parks, Director, Loyalty and Retention Marketing. Melinda is responsible for all marketing and communications to Sprint’s consumer customers including new customer expectation setting, life-cycle management, direct marketing communications, loyalty program innovation and retention. Melinda has held previous marketing roles in field marketing, channel marketing and marketing integration. Prior to her marketing role at Sprint, Melinda held senior manager roles in finance operations and financial planning and analysis. She has been at the company for nearly 13 years!

48

TECHNOLOGY, TRENDS & REWARDS: BEHIND THE BRAND/PEOPLE


Melinda Parks

How many reward programs are you a member of? How many do you use regularly? Which is your favorite and why?

I’m a member of 10 or so loyalty reward programs. I regularly use 4-5 of them. My favorites are my

travel;

pretty quickly; and

simplicity of it, it’s good on everything in the store just like they advertise.

When you look back, what was your favorite ‘job’ experience and why?

The one I’m doing right now. I love this work because it is as much big picture as you can get in a big company. It combines customer insights, strategy, financial feasibility, marketing development and operational implementation.

Who has had the most influence in your life?

My par-ents are fan-tastic – they allowed me to be inde-pendent and learn to make my own decisions, which is critical in my role. (They might argue I was born a little independent...) As a youth and teen my piano teacher had significant influ-ence, she helped me see the possibilities in life beyond the small town where I grew up. I’ve also had three or four really influential bosses who helped me push be-yond what I could have imagined before.

What inspires you?The Cinderella story, I love to root for the under dog.

Which talent would you most like to have? I would love to have creative talent to be able to do more

of the creative development, telling the story with pictures and words. I have great managers and partners I work with that really help me out in that area.

What are the qualities you most admire in a person?

I’m from a small town in central Kansas, I really admire simple honesty and hard work. I love working with leaders who can see the big picture and think strategically, but can also roll up their sleeves and do the work when necessary.

Which book(s) are you currently recommending? The one I’ve

found most use-ful in my career is Hardball for Wom-en by Pat Heim and Susan Galant. I also found Habit, 95% of the Be-haviors Market-ers Ignore by Neal Martin to be very useful as we think about driving to loyalty.

What can we expect from Sprint into 2011?

We just cel-ebrated the one year anniversary of our loyalty pro-gram, Sprint Pre-mier, in 2010 by

announcing new benefits to the members. Going forward we’ll continue to evaluate our loyalty efforts, starting first with meeting basic needs and forming trusting relationships with our customers.

What is your advice for a novice loyalty marketer?

Recognize quickly that “loyalty” is much bigger than a loy-alty program, it’s an overall experience. L


We don’t have to trade off customer acquisition against customer retention. Retaining customers and trying to get them to become loyal advocates is a great acquisition strategy.

Melinda hiking in Colorado


2010 DMA Digital Marketing DaysJune 14-16, New York, NY

The 2010 DMA Digital Marketing Days event was filled with a variety of great sessions that focused on the turbulent, dynamic and exciting times for the direct marketing world. Two sessions really stood out above the pack:

As keynote speaker Crista Caroni, the CMO of Xerox, pointed out: “The future of marketing will resemble the past.” She explained (rightfully so) that the goal of every merchant should be a hastened return to the corner bread or shoe store where (to paraphrase Cheers), “Everybody knows your name.” Today, it is not as much about knowing your name, but your attitudes, interests, preferences, opinions and being able to craft this information into actionable insight to create a dialogue the end user wants to partake in and that can create sustainable behavioral change.

Carone explained how Xerox is engaging its constituencies. “It is always about making the best product available for the best audience, yet to do that you need to listen, understand and be honest with your audience.”

We live in exciting times. The next new technology could be upon us tomorrow. So whether it is direct/ digital or “i-direct,” we need to realize that the marketing communication mix is becoming more complex, data-focused and dynamic. While was applicable yesterday may change completely tomorrow, the end goal is the same: Creating loyal, engaged brand champions. And, by “ceding” them some control in the communication and the interaction, they will pay a premium for your products and services and in doing so will create a “digitally direct” interactive marketing that is good for all involved.

DMA Retail Marketing Conference 2010May 24-27, Orlando, FL

The marketing industry is in transition. That is the message that was trumpeted by the superb lineup at the DMA Retail Marketing Conference. Throughout the show it was apparent that the DMA understands the challenges of this transition and is committed to making their offering as detailed and comprehensive as possible.

Attendees were cautioned repeatedly during the show, “Do not waste the customer’s time.” Banal marketing strategies no longer work. Communicating effectively requires creating a brand language that will give the consumer a call to action, a reason to engage, a reason to give you the rich behavioral data needed to create the engaged and actionable dialogue you require. Anything less would be mendacious. Though there is a focus on price and efficiency, consumers will and do pay for value; they want to make their lives easier and products that help them accomplish that will command a premium of mind share, actionable market intelligence and profits.

The market is changing and the DMA is focused on helping their customers understand this evolution and making sure they are using their long-standing emotional commitment to their customer to help to define and expand the definition of, and therefore the importance of, direct marketing.

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


Communicating effectively requires creating a brand language that will give the consumer a call to action.


Gartner Customer 360 Summit 2010June 28-30, Los Angeles, CA

The main theme of the Gartner Customer Summit 360 was convergence, which encompassed the rapid and volatile dynamic in the market and the ability to deal effectively with the challenge this fast-paced change. One quote in particular that references research from Bain and Company paraphrases the focus of this conference: “80% of all brands believe their customers are engaging in the customer experience with the brand, while only 8% of the customers believe so.” That’s right. A whopping 72% difference—or a 10x magnitude—which clearly illustrates the paradox of this ever-changing marketing world we live in.

Not only do brands want and need assistance in navigating the turbulence they are faced with—but, they all seem to be asking for a pause. No one appears to be suffering from a paucity of consumer data, but are rather inundated from a mountain of data. And brands need to figure out how to make this plethora of data actionable in order to create the effective CRM programs that drive sustainable behavioral change, increase the share of wallet and therefore ROI! Most importantly brands need to engage with the customer to help lessen the engagement divide referenced by Bain.

So what can we discern from this? I walked away from the Summit convinced that while change (especially in this challenging economic environment) is going to be ever present, brands need to be flexible and they must be encouraged and supported by senior executives to try new media.

Aberdeen Retail Leadership Summit June 17-18, New York, NY

Aberdeen is one of the most strategic and tactical full service research and consultancies in the business. Their depth and breadth of contact, research based on “Voice of the Customer,” and stark realization that the retail industry is changing made this an extremely interesting event. Aberdeen’s keen insight into how retailers can deliver more effective marketing/loyalty/engagement communication was showcased at the Summit.

The key messages of the show centered on the ability to deal with change and how to leverage myriad data touch points and media channels to effectively listen and engage your audience. The primary areas of focus included:

1. The Five Step Turnaround Guide for Retailers: Retail Revival in 2010 and Beyond

2. Strategic Customer Strategies, Integration and Big Picture Retailing

3. De-Coding Cross - Channel Profitability4. In-Store Marketing and Maximizing Customer

ExperienceI am sure this conference will prove a great source

of insight for additional Aberdeen studies. Their commitment to having their finger on the pulse of the retail space bodes well for the retailers who tap into their unique thought leadership.

80% of all brands believe their customers are engaging in the customer experience with the brand, while only 8% of the customers believe so.-Bain and Company, Gartner Customer 360 Summit

Barnes & Nobleloyalty program profile

THE VERDICT

Two Thumbs Up!



ell, it’s summertime and while many Americans head to the beach, family reunions, theme parks and road trips—I head to the bookstore for my summer reading material. Summer has always been a time to catch up on the bestsellers list as well as recom-mendations from friends.

With a Barnes & Noble Membership card, membership ben-efits include discounts on Hardcover Bestsellers—40% off B&N’s 10 fiction bestsellers and 10 non-fiction bestsellers based on store sales; 20% off all Adult Hardcover books; and 10% on al-most* everything else. Yes, there are exceptions for free shipping, primarily electronics and 3rd party purchases including used or out of print books. A nice plus—Membership discounts are avail-able for used and 3rd party bestsellers. An annual Membership costs $25.00; Once purchased, discounts are available immedi-ately online.

Armed with my membership card, the first place for shopping is the website—bn.com—easy login, then a search for discounts on Today’s Offers under the Member banner. Today’s offer is Free shipping on 2 items offered (with no minimum purchase!)—a summer tote bag or 3 CDs.

The website shows the list price and the Member discount automatically—a nice reinforcement of the savings benefit be-fore checkout. There’s a “Community Section” containing blogs, book clubs, and reading recommendations for a variety of interest groups.

You can also scoop up discounts in retail stores. On a recent trip to B&N, I chatted up the B&N Membership with a sales as-sociate who reiterated the breadth of the discounts, ”everything in the store except Gift cards”; “CDs?” I inquired. “Sure, all CDs, magazines, calendars, and bookmarks.”

Friendly and helpful, she pointed out the magazine rack ex-tending over a wide wall and encouraged me to peruse the Em-ployee Recommended Reading section with personalized reviews accompanying the display books.

A special sale table had “Buy 2 and get the 3rd FREE”—the ca-veat being the free selection is on equal or lesser value. And, upon checkout, 10% additional as a Member, my total purchase earned a $7.70 member savings. My membership is well on its way to a satisfied break-even!

The sales associate mentioned that I’d receive a 10% discount on beverages and snacks in the Starbucks Café situated in the store, with purchases in hand, a Latte was next—another $.42 savings.

My summer reading list is now turning from a list to a stack…and summer’s almost over!

W

L

The website shows the list price and the Member discount automatically—a nice reinforcement of the savings benefit before checkout.


As the landscape for financial products and services continues to evolve, an increasingly competitive market requires businesses to work harder than ever to attract customers and establish brand loyalty. Even more important is translating loyalty into profits. Doing so requires a brand new approach.

In the face of these challenges, Dell Services delivers Enterprise Loyalty Solutions, including product management, consumer and commercial relationship pricing, and industry-leading incentive programs. From strategic advisor to implementation partner, we provide solutions that help you build trust and inspire loyalty among your customers. Dell Services leverages best practice loyalty programs that align next generation strategies with your organization's goals. Where would you like to go? The possibilities are wide open.

For more information about our Enterprise Loyalty Solutions and Services, contact Sean Breen at 949.679.1835 or [email protected]. Visit us at dell.com/services.

Applications Business Process Consulting Infrastructure Support

© 2010 Dell Inc. All Rights Reserved.

WIDE OPEN.YOUR POSSIBILITIES. NOW

Get it right.Know how, when and where to spend on your audience.

Get it right.Know how, when and where to spend on your audience.

Join Chris Marriott, VP & Global Managing Director for Acxiom’s Digital Agency, on Thursday, August 26th for an

entertaining live webinar hosted by Acxiom and Loyalty 360. Don’t Battle The Marketing Democracy, Join It!

Register at www.Loyalty360.org to save your spot.

There are 120,000

Bob Zbigniewguskis.

Will the correct Bob

please step forward?

If you are ready to “get it right” with

your loyalty program, give us a call at

1.888.3ACXIOM or visit us at www.acxiom.com.

Whether you’re acquiring new customers or creating more profi table and loyal relationships, Acxiom can help improve your marketing ROI and brand experience:

Manage your audience.Leverage multiple sources of data to recognize and target your highest value customers and prospects with certainty – not just in one channel, but across all channels.

Personalize the customer experience.Increase customer loyalty over time and the likelihood of getting the outcome you want out of each touchpoint.

OMNI CHAMPIONSGATE ORLANDO, FL

high-touch, high-tech, high-impact: building holistic relationships that engender customer & employee loyalty

2010 EXPO REVIEW

in

loyalty expo 2010 in review


HE 3-DAY CONFERENCE OPENED BY address-ing one of the most important (but often overlooked) aspects of loyalty programs—the human aspect. On Sunday, Barry Kirk of Maritz facilitated a workshop on The Neuroscience of Engagement. “Consum-ers are human beings first” says Kirk. “And human beings are much more irrational that we want to believe—yet most loyalty programs are designed around rational decisions.” Kirk demonstrated how loyalty marketers can be much more e!ective when they incorporate aspects neurosci-ence and behavioral economics into their programs.

The focus on “people” continued with Jeanne Bliss’ keynote address Monday morning as she energized the crowd with examples and insights on The Five Deci-sions of Beloved and Prosperous Com-panies. Bliss used real life examples to describe the five decisions common to companies that customers and employ-ees call “beloved”. She described how or-ganizations achieve prosperity (financial and human spirit) by putting the customer on the strategic agenda. This approach is detailed in her book “I LOVE YOU MORE

THAN MY DOG” Five Decisions That Drive Extreme Customer Loyalty in Good Times and Bad. Bliss was followed by Michael Hemsey from Kobie Marketing and Judy Cathey-Christi of Hampton Hotels div-ing deeper into the specifics of customer experience. And Morley Ivers of Recycle Bank demonstrated how his organization has instituted these strate-gies at great success.

If brown is the new black, then engagement is the new loyalty. Engage-ment was a central theme in several of the break-out sessions, including that of Robert Passiko!, Brand Keys, and Jim Har-ris, WSJ O"ce Media Net-work. Passiko! and Harris showed how customer en-gagement increases brand equity which in turn leads to loyalty and profits. Their session demonstrated how they were able to measure and evaluate the e!ectiveness of various marketing touch-points to de-termine the optimal mix for driving en-gagement.

If brown is the new black, then engagement is the new loyalty.

T



ILL HANIFIN, HANIFIN LOYALTY, LEAD a panel discus-sion on Nurturing Loyalty Through Social Media. The panelists represented brands who are on the leading edge of social media marketing. Where traditional loyalty programs only reward cus-tomers for purchases, MyCokeRewards, Grou-pon, and Tasti D-Lite are using social media as a means to rewards customers for other behaviors such referrals, recommendations, checking-in and other posts by linking their loyalty programs to Facebook, Twitter and FourSquare (to name a few).

Once again Loyalty Expo brought together the industry leaders in the field loyalty and en-gagement. It was a great opportunity to hear how colleagues and clients are evolving and adapting their programs to utilize mobile, social media and other techniques. I was pleasantly sur-prised at how much I came away with—in terms of insights and connections.

-Tim Crank, Young America

B



It was a great opportunity to hear how colleagues & clients are evolving and adapting their programs to utilize mobile, social media and other techniques.

I was pleasantly surprised at how much I came away with—in terms of insights and connections.

Once again Loyalty Expo brought together the

industry leaders in the field of loyalty & engagement.

-Tim Crank, Young America

Paybefore brings you the world of prepaid every business day. You know the importance of prepaid cards in today’s loyalty marketing.

Paybefore keeps your prepaid team at its most informed and most competitive, so you can devote your resources to loyalty programs that delight your clients.

Just see what our subscribers have to say:

“Paybefore is unmatched in o!ering the latest news, viewpoints and a growing focus on the international scene … they’re our industry source for everything prepaid.”

Matt Harris, Vice President of Marketing, InteliSpend Prepaid Solutions

“The Paybefore publications are required reading for everyone in prepaid including those of us in the loyalty business.”

Tracy Bailey, Senior Product Manager, Prepaid Card Services,

Carlson Marketing

Special Rate for Conference Attendees!CONTACT Alison MacDonald PHONE +1 617.671.1157 EMAIL [email protected]

a special thanks to our sponsors

ComminglingImaging

Lettershop

Print

We put it ALL together!

Japs-Olson

Name

Company

Address

City State Zip

Email:

Ph. Fax

Email: [email protected] Fax: 952-912-1900 Ph.: 952-912-1440Loyalty360

JAPS-OLSON COMPANY7500 Excelsior Blvd.St. Louis Park, MN 55426-4519952.932.9393 Fax: 952.912.1900www.japsolson.com

SAVE THE DATE FOR THE 2011

march 20 - 22, 2011

www.loyaltyexpo.com

interested in speaking or exhibiting?

contact Erin Raese: [email protected]

HYATT GRAND CYPRESS

THE CONFERENCE BRINGING PEOPLE TOGETHER TO

&CLIENT RELATIONSHIPSfocus on maximizing customer, employee,

ORLANDO, FLORIDA

AWARDS

ENGAGEMENT

presented by

to be considered for this award, register online at

ENGAGEMENT360.ORG

4120 Dumont StCincinnati, OH 45226

PRSRT STD

U.S. POSTAGE

CAROL STREAM, IL

PERMIT No. 475

PAID

loyalty management summer

Documents