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August 2010
powered by Loyalty 360
Tattooing Your
Brand
branding secrets of a tattoo artist
CPG:
a recession-proof
business?
There’s
a new
game in
town.
Who are
your brand
influencers?
SAS® Customer Intelligence
Campaign Management and Optimization | Online Analytics | Real-Time Decision Management
Social Media Analytics | E-Mail/Mobile Marketing
www.sas.com/retention
for a free white paper
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
This Month in
AUGUST 2010 VOLUME 2 NUMBER 3 WWW.LOYALTY360.ORG
DEPARTMENTS
6 What’s on Loyalty360.org
8 Letter from the Editor
10 Contributors
LOYALTY FORUM
12 Loyalty Forum: Your Voice
14 Behind the Brand/People
Interview with Kevin Grieve,
CEO, Mocapay
16 Q & A: Ask the Experts
Lately we’ve been hearing from
many b2b customer-focused
marketers. These companies have
FEATURES
20 Step Away From the One-Way Mirror
Peter Murane, BrandJuice Consulting
24 The 360˚ View: Customer
Understanding Puts You Ahead of
Your Customers
Connie Hill, VeraCentra
28 Branding Secrets of a Tattoo Artist An interview with Sprint’s
Nancy Porte, Vovici Melinda Parks
30 CPG: A Recession-Proof Business? Behind the Brand/People
pg
48
Andy Wright, Carlson Marketing
32 Mobilize or Die
Matthew Silk, Waterfall Mobile
Loyalty Management™8L>LJK)'(' 3
This Month in
AUGUST 2010 VOLUME 2 NUMBER 3 WWW.LOYALTY360.ORG
TECHNOLOGY,
TRENDS & REWARDS
How is online gaming
34 Loyalty Programs: There’s a New Game in Town
changing the loyalty Stephen Baer, The Game Agency
34
game? 36 The Flexible Redemption Revolution
Ben Ashwell, Loylogic
pg
38 Four Ways to Win Elections in the New Marketing
Democracy
Chris Marriott, Acxiom’s Digital Agency
44
Loyalty 360 Team
Mark Johnson - President & CEO
Erin Raese - COO
Amanda Chasteen - Manager, Marketing Operations pg
Kathleen (Ninneman) Ostoich - Marketing Manager
Annie Lerner - Marketing Coordinator BEST BUSINESS PRACTICES
Contacts 40 Target Your Social Media Tactics for Stronger
Article Submissions & Advertising: Erin Raese Customer Bonds
erinraese@loyalty360.org or 513.360.8680, ext. 210 Sid Liebenson, Marketing Highway
To subscribe to Loyalty Management, visit loyalty360.org. 44 Influencers Hold the Key to Capitalising Their
Followers
Ran Shaul, Pursway
We Want Your Feedback 46 Developing Relationships and Direct Content—How
to Better Serve Consumers
As a “voice of the customer” focused publication we
want to hear from you–our customers. What would Sandra Zoratti and Lee Gallagher, InfoPrint Solutions
you like to see included in these pages? Share your 48 Behind the Brand/People
thoughts on articles and ideas for content. Interview with Melinda Parks, Director of Loyalty &
This is your platform. We would like to hear from you. Retention Marketing, Sprint
Loyalty Management™8L>LJK)'(' 5
LOYALTY 360 ON THE WEB
what’s on loyalty360.org
forums + councils
New to the Loyalty 360 website, fo- Head to page 50 to read excerpts
rums and councils. Now available to from Mark Johnson’s recent States of
all Loyalty 360 members. Come join the Industry & read the full texts at
the discussion on www.loyalty360.org. loyalty360.org/state_of_the_industry.
Hot topics include:
Mobile payments, mobile couponing,
social media—Return on investment? Remember to check
Bringing together social media and loyalty360.org daily for news
CRM updates from industry leaders.
Communities—Making them work for Want your news featured? Join
you cost effectively the conversation today and email
WdZTips for engaging your CFO.
pr@loyalty360.org.
LOYALTY 360 PULSE
60%
Convert more transactions to debit:
:h_l[iWb[i0(-
CW_djW_diWb[i0')
6 Loyalty Management™CFP8CKP*-'%FI>
We’re here for you
when you need a question
answered,
a partner found,
or a resource provided.
Loyalty 360 brings you the best of the best in loyalty marketing
and supports your customer strategy needs. Some of the tools we offer include:
Welcome new Loyalty In his ongoing commitment to bringing you all the latest loyalty news
360 Members: 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
GNC the marketplace, key loyalty trends and challenges, and best practices.
Sprint Lastly, we’re pleased to announce the launch of our Engagement 360
USBank Awards! Think your company is effectively engendering engagement and
loyalty with its employees and customers? Participate in the awards audit and
Intelispend
find out! Created in conjunction with Performance Point, Engagement 360
Acxiom Awards will celebrate those companies that connect employee engagement
SAS and customer engagement to achieve bottom line results. Companies that
Vovici apply will receive a comprehensive review of your engagement efforts; plus,
Givex 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
Dell
www.engagement360.org.
Guess
Ambius Enjoy the issue!
Microsoft
Erin Raese
Editor-in-Chief
Loyalty Management
erinraese@loyalty360.org
8 CfpXckpDXeX^\d\ek CFP8CKP*-'%FI>
CONTRIBUTORS
I t’s got to be issuers and providers. They are the only ones
directly benefiting from this new form.
A s long as the wireless carriers own the client, the bill-
ing and the network, they will “control” what happens in
Telco’s and retailers will have to comply—but there is the space (at least this is the story in North America) This
no direct benefit to them. Sure—there is significant indirect is one of the big roadblocks to innovation and adoption…
benefits including loyalty, promotions, messaging and so on.
Barnard Crespi Founder, Marketing Executives International
So my take is: The issuer has to lead by gathering the
Group
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
C onsumers. But we have to do a better job of explain-
ing the features and benefits to them. AND selling them
omitted from your list: device makers and card schemes. on security.
Nokia took the lead on the device maker side by focusing Parissa Behnia Idea Chef, 678 Partners LLC
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 So my take is: The issuer has
in Mobile World Congress.
Visa and MasterCard are also taking an increasingly pro- to lead by gathering the right
active role and I think that the combination of card schemes,
handset makers, issuers and telcos collaborating is required providers. Whomever can
to grow the mobile payments business. While retailers will
need to play a roll in adopting the POS solutions I think that properly bridge the gaps of credit
they will be motivated to do so by loyalty and marketing ap-
plications rather than payment. card entry, cash transactions will
Daniel Angel Head of Business Development, Orange Personal
Communications Services, Ltd be the winner(s).
—Daniel Angel
12 Loyalty Management™CFP8CKP*-'%FI>
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
Loyalty Management™8L>LJK)'(' 13
LOYALTY FORUM: BEHIND THE BRAND/PEOPLE
Kevin Grieve
CEO, Mocapay
Many people are asking about mobile First, Visa recently expanded its no-signature rules
payments. Who’s going to lead the charge to most of the verticals they serve, which means “tap and
(suppliers, banks, consumers, telco) and go” (mobile) is not much different than “swipe and go”
(plastic). Second, there is not a critical mass of NFC-enabled
will consumers really use it? We’d love your phones deployed in the US market. Third, unless merchant
perspective. acceptance of NFC-based mobile payments achieves a
It will vary by global region depending upon the critical mass of 30-40% merchant adoption, open loop
current and historical market structure along with the tender is unlikely to gain consumer interest. And finally,
payments and wireless infrastructure. For example, chip- payment associations are charging merchants a higher
based cards and corresponding readers were deployed interchange rate to accept mobile payments and have not
in Europe in the 90s due to a poor telecommunications allowed PIN debit prompting for a mobile payment. With
infrastructure to combat payments fraud. In the US, merchants focused on lowering their cost of payments, the
which had a robust telecommunications infrastructure, combination of new hardware spend and higher interchange
real-time payment authentication and authorization rates, NFC-based mobile payments is DOA in the US.
was viable and cost-effective, so there was no business That means, mobile payments are likely to begin with
case for smart cards or readers. In the US, there is not a merchant-issued tender such as gift cards, loyalty cards and
compelling business case for merchants to spend capital coupons. Mobile payments innovation will be delivered by
for NFC-readers for several reasons. suppliers and technology enablers.
14 Loyalty Management™CFP8CKP*-'%FI>
How are you seeing organizations
building mobile into their loyalty Mobile payments are
initiatives?
Mobile is a natural fit for loyalty programs.
Many of the merchants with whom we speak are
likely to begin with
interested in cardless-based loyalty and/or gift
programs. merchant-issued
What do you see for Mocapay into
2011?
tender such as gift
We will see continued consumer and
merchant adoption of mobile marketing and cards, loyalty cards and
mobile payments.
Loyalty Management™8L>LJK)'(' 15
Q&A
LOYALTY FORUM: Q&A
Ask the
Experts
Q: Lately 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?
16 Loyalty Management™CFP8CKP*-'%FI>
A: Driving up NPS scores and number
of customer referrals is a great goal.
To elevate these programs to the next level,
or closing deals, Customer Advisory Councils
are focused on building and enhancing rela-
tionships at higher levels and securing market
focus on the scores and referrals coming from
influencers and decision makers within your
insight necessary to keep your business ahead
of the competition.
Customer
customer accounts. How? Start by establish-
ing a Customer Advisory Council.
The results: In addition to the insight, and Advisory
market direction, organizations who have im-
plemented Councils have seen, on average: Councils are
Typical Optimal
Decision Maker 10% 30%
()$))`eZi\Xj\`eZljkfd\ii\k\ek`fe
('$),`eZi\Xj\`ee\njXc\j
focused on
Final authority/signature ,'$+'' `eZi\Xj\ `e i\]\i\eZ\j Xk [\Z`-
sion maker level
building and
Influencer 15% 35%
Evaluator
(,$), `eZi\Xj\ `e EGJ jZfi\ Xk [\Z`j`fe
maker level
enhancing
User 60% 30% <e_XeZ\[ Xc`^ed\ek Y\kn\\e JXc\j Xe[
Marketing
relationships
Purchasing 15% 5%
If moving up the value chain is the goal at higher
within your customers, the Customer Advi-
A Customer Advisory Council initiative is
made up of 20-30 decision makers from your sory Council is the ultimate B2B weapon. L levels.
best accounts. Unlike other marketing or sales
activities that are focused on generating leads —Sean Geehan
Founder, Geehan Group
Loyalty Management™8L>LJK)'(' 17
LOYALTY FORUM: BOOKS
Loyalty Reads
DELIVERING AND MEASURING CUSTOMER SERVICE:
This Isn’t Rocket Surgery
by Richard D. Hanks
March 2010 | Duff Road Endeavors
SOCIALNOMICS: How Social Media Transforms the Way We Live and Do Business
by Erik Qualman
August 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
18 Loyalty Management™CFP8CKP*-'%FI>
EXCEPTIONAL SERVICE, EXCEPTIONAL PROFIT: The Secrets of Building a Five-
Star Customer Service Organization
by Leonardo Inghilleri and Micah Solomon
April 2010 | AMACOM
GETTING NAKED: A Business Fable About Shedding The Three Fears That
Sabotage Client Loyalty
by Patrick Lencioni
February 2010 | Jossey-Bass
In Getting Naked, Pat challenges service providers to be com- Fear of Feeling Inferior - To avoid feeling irrelevant or
pletely transparent and vulnerable with clients in being overlooked, consultants try to achieve and pre-
order to overcome the three fears that ultimately serve a high level of importance in clients’ minds.
sabotage client allegiance. Written for internal or
The Naked Service Provider
external consultants, financial advisors or any-
What does being naked look like in practice? Naked
one serving long-term clients, Getting Naked will
service providers and consultants confront clients (kind-
provide powerful, actionable tools to help readers
ly) with difficult information and perspectives, even if the
overcome the three fears and gain a real, lasting
client might not like hearing it. Naked consultants ask
competitive advantage.
potentially dumb questions, and make potentially dumb
The Approach suggestions, because if those questions or suggestions
At its core, naked service boils down to the abil- ultimately help their client, it is worth the potential em-
ity of a service provider to be vulnerable, to embrace barrassment. They also admit their weaknesses and
uncommon levels of humility, selflessness and trans- celebrate their mistakes. Even before landing a client,
parency for the good of a client. Most of us live our lives a naked consultant will demonstrate vulnerability and
trying to avoid awkward and painful situations, which take risks. In fact, they’ll do no real selling at all, fore-
is why it is no surprise that we are all susceptible to the going that activity in order to find a way to help a client
three fears that sabotage client loyalty which include: even if they never actually become one.
Fear of Losing the Business - Worrying about losing a client’s busi- Even beyond the world of clients, being naked has its benefits and ad-
ness may cause service providers and consultants to avoid the very vantages. When we can be vulnerable with the people we live and work
things that ultimately engender trust and loyalty. with on a daily basis, we build stronger relationships, demonstrate our
Fear of Being Embarrassed - Rooted in pride, this fear can lead ser- trust in them, and inspire them to improve by being vulnerable them-
vice providers to withhold their best ideas from clients. selves. And that is certainly worth getting naked for.
Loyalty Management™8L>LJK)'(' 19
FEATURES
T 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.
20 Loyalty Management™CFP8CKP*-'%FI>
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?
Two Ideas Go To Market the midst of its national rollout and took pictures and asked consumers
BrandJuice was hired by The not yet public. to tell us stories and draw pictures.
Clorox Company’s new venture team My company did the first year’s Some completed diaries for us. Oth-
to help develop a portfolio of new footwork on GreenWorks, discov- ers made collages. We looked in con-
consumer products and to bring the ering key consumer needs and de- sumer closets, cabinets, garages and
best of those new products to mar- veloping the early positioning and car trunks to see what products were
ket in a more entrepreneurial fash- product line. The idea was so big it close at-hand and what were in deep
ion. We focused on the creation of was quickly transitioned from the storage.
new brands and our initial portfolio Clorox New Ventures Team to the After we talked to consumers
of ideas included a small number of company’s Laundry Home Care op- about their lives and watched them
ideas that Clorox had already cre- erating division for commercializa- clean we went shopping with them
ated as well as a dozen ideas that my tion by a huge team of internal re- to a range of retailers from grocery
company brought to the table as part sources. GreenWorks is projected by to dollar stores. These in-home and
of our pitch to win the business. At some analysts to hit $300 million in in-store observations yielded a range
the beginning, we had little intuition revenue in its first year, making it the of consumer insights that were piv-
as to which ideas were the strongest. most successful Clorox new product otal in the development of our ideas.
But we were about to find out. launch in decades. For example, we learned that a
Over the course of a three-year On the Macho venture, my com- segment of consumers fears the job
engagement, we explored five new pany acted as the General Manager of cleaning because of health con-
product platforms in great detail, on the business from initial concept cerns. We learned that consumers
eventually recommending that three creation up through extensive in- put cleaners in dozens of categories
of the platforms be killed. We were market testing at major customers of their own creation and that these
simply practicing the art of inno- like WAL-MART. categories have no linkage to the “of-
vation portfolio strategy – killing Not surprisingly, our first step ficial” category definitions provided
weaker ideas as early as possible so was not the focus group facility. In- by IRI and Nielsen. We learned that
that the maximum amount of time stead, we went out and watched con- men and women approach cleaning
and money could be spent on the sumers clean their homes. We initial- differently. They shop stores differ-
most promising business opportuni- ly went to fifty different households ently. They look for different per-
ties. across the country and watched formance claims. They seek differ-
In the end, we helped create two consumers go through their cleaning ent cues of effectiveness during the
important new businesses for the routines. We came during the week cleaning process. They have differ-
company: GreenWorks, an all-natu- and on Saturdays when many people ent underlying motivations around
ral line of cleaning products with an “deep clean” the house. We came why to clean. And, ironically, each
iconic yellow daisy on the label and at different times of the day when gender thinks it does a superior job.
a product line I’ll call “Macho” for children were present and when These insights were developed
purposes of this book because it is in they were at school. We shot video, from fairly straightforward research
Loyalty Management™8L>LJK)'(' 21
Step Away From the One-Way Mirror (continued)
methodologies that put us in real rough logo concepts against our stand-out and have appropriate
world consumer environments, re- creative brief. We took what we height and width dimensions.
moving the safety of a one-way mirror. felt were the best of their ideas, } ;PcTa fWT] fT WPS PRcdP[ Q^c-
All of the steps summarized below mounted them on boards and tles off of a unit cavity mold that
were undertaken with the primary took them out to the Denver cost only $10,000 to manufac-
goal of informing our intuition and Bronco stadium parking lot dur- ture, we tested a range of fully-
unearthing deep consumer insights: ing pre-game tailgate parties. We rendered package designs. We
} FT aTRadXcTS W^bc aTb_^]ST]cb c^ gave tailgaters coupons for free set up a booth at Mall of America
help us set up “Girlfriend Groups” Kingsford Charcoal in exchange in Minneapolis under a fictitious
in their homes. These are gather- for their time and opinions. They company name, and for a day we
ings where one consumer invites gave us an earful (and a few beers stood there and intercepted about
her friends to come talk about a in some instances), and we quick- a hundred consumers. Each was
topic—in this case home care. This ly learned which visual brand- asked to rank the different bot-
research format told us a lot about ing elements had the most power tle designs and to comment on a
what was important in home care to bring our idea to life. Equally paper positioning concept state-
and what wasn’t. Doing this work important, we learned which el- ment we had developed. Just by
in-home provided ample oppor- ements were weak or polarizing reading the body language of the
tunities for show-and-tell so that and not worth pursuing. people who stopped by it was
we could truly understand what }C^STeT[^_cWTQTbcQ^cc[TU^a^]T easy to identify our best package
consumers were talking about. of our ideas we literally scoured design execution and, critically,
The added dimension of speak- the world looking for stock bottle to understand what made it the
ing to friends helped us contain options but struck out. So we cre- best option. Knowing why our
what I call the “bullshit” factor. ated a new bottle with Brand- best idea won was instrumental
Consumers were literally kept Juice industrial design resources in shaping our judgment for ad-
honest by their peers, creating an and a bottle manufacturing part- ditional decisions around adver-
amazing environment of candor. I ner. Each time we received a new tising strategy and in-store mer-
sometimes wonder if consumers wooden bottle mold prototype we chandising.
are telling the truth during focus went out on the pedestrian mall
groups. With Girlfriend Groups I Undertaking work like this is not
adjacent to our building and in- easy. Getting your hands dirty is not
never wonder. tercepted consumers to ask them for the faint of heart, but it sure beats
} C^ STeT[^_ cWT QTbc [^V^ U^a ^]T to hold the bottle in their hands failing at innovation because you
of the new brands we were creat- and give us their opinions. We were unwilling to venture beyond
ing, we asked three graphic de- also put the prototype on store the safety of the one-way mirror. L
signers to independently develop shelves to make sure it would
22 Loyalty Management™CFP8CKP*-'%FI>
TALK TO YOUR CUSTOMERS
IN THEIR LANGUAGE. MOBILE.
innovative merchants.
24 Loyalty Management™CFP8CKP*-'%FI>
loyalty behavior—willingness to buy more, reluctance to seriously considering this migration to a more customer
switch and likelihood to recommend—Forrester found experience driven view of the world understand that it will
that a change in customer experience rating directly cor- be transforming organizational change initiative.
responded to a change in customer loyalty. For companies
that are unable to manage customer experience, loyalty An Integrated 360 Degree View of the
and revenues can suffer. In fact, Forrester summarizes the Customer
impact as, “a modest improvement in customer experi- So how do we get over this hurdle, and sooner rather
ence can bring in $177 million to $311 million per year! than later? Is there one thing that’s low in investment,
It’s no secret that today’s customers expect more from quick to implement and would have an immediate impact
the companies they interact with. The explosion of social on loyalty, churn prevention and profitability? An inte-
media and rapid growth of new communication channels grated 360 degree view of the customer.
illustrates how customers expect to be deeply involved in As long as companies operate in functional silos with
both the company and community dialogue that shapes separate systems, the customer experience will be frag-
the products and services they use. They expect their mented and impossible to manage. It doesn’t matter the
voices to be heard in order for their dollars to be received. industry, or what systems you use to collect customer
Yet, despite all the evidence of customer driven inter- information, customer data can be found and integrated
action, and the availability of powerful technologies for in- into one data mart to yield a 360 view of the customer.
teracting directly with customers—collecting and mining While this is a team effort, requiring cooperation from
information about them, and tailoring offerings accord- others who have customer data, the customer marketer is
ingly—we remain woefully unfocused on cultivating cus- in the ideal position to take the lead on creating a 360 cus-
tomers, focusing on product marketing and transactions tomer view. After all, it is the customer marketer that is
instead. So why aren’t we more focused on delivering a charged with growing revenue by customer, and reducing
positive customer experience to create long term profit- churn by managing a positive and consistent experience
able customer relationships? The short answer is tradi- for customers.
26 Loyalty Management™CFP8CKP*-'%FI>
Deliver only what matters
the most: relevance
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.
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.
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
FEATURES
Branding Secrets
Tattoo of a
by Nancy Porte, Vovici, Inc.
28 Loyalty Management™CFP8CKP*-'%FI>
Artist
Build the brand through the customer community able. Once you understand how customers rank and rate
Mooch noted that many customers plan their trip to Las their interactions with you, you’ll have a clearer picture of
Vegas around their plan to get a tattoo from H & H. They are your customer experience branding. That knowledge will
familiar with the business through either the A&E TV Series, provide the necessary focus for which interactions need
Inked (no longer in production, but you can view previously to be prioritized for improvement.
taped episodes) or they have seen customer testimonials on The next step is to customize each customer’s experi-
the H & H Message Board. A quick visit to the Message Board ence. H & H knows a lot about what their customers ex-
reveals comments like “I had the best experience with H & H pect. Then they take it to the next level by interviewing
this last Sunday thanks to Josh! I was in contact with him be- each customer about what image and style of tattoo they
fore traveling to Vegas and set up a good time to come in and want. With that information they match the customer
work out what I wanted to have done. He took my idea, gave with the right artist who assists them through the pro-
me some advice, drew it up, and did the tattoo in just a short cess. Is that very different for us in the software business?
Loyalty Management™8L>LJK)'(' 29
FEATURES
CPG: A recession-
proof business?
by Andy Wright, Carlson Marketing
I am sure most people are familiar with some of the consumer pack-
aged goods loyalty programs that have been running over the last few
From my point of view, it certainly does not replace
mass consumer awareness advertising that is essen-
years, of which perhaps MyCokeRewards™ is the most famous. tial to many consumer brands. Nor does it replace
However, since a burst of loyalty experimentation by the sector some effective retail promotion. Done well, it does replace
10 years ago, these programs are the exception rather than the rule. All existing CRM efforts with something much more ef-
that is about to change and I predict loyalty programs will become as fective. You have better targeting, you can focus pro-
much the norm in packaged goods as they are in retail. As recent as last motions on key individuals in the right way. The pro-
year, two thirds of food manufacturers either have, or are planning to motion can sit on the loyalty site as a place to put it
introduce loyalty initiatives according to data from the Aberdeen Group. even if you do mass work to let people know it’s there.
Here is how it works:
So, why the sudden flurry of activity?
Firstly, the current recession has driven consumer loyalty for pack- A new media channel
aged brands to a new low. Two recent notable surveys underline this. Building a loyalty program involves the creation of
Recently, comScore published the results of a March, 2010 study a destination for customers to experience and engage
on brand loyalty among consumer goods products, and showed a sig- with the brand. This is always largely in the digital
nificant decline in all categories. The study showed that consumers will space and if executed well is like creating a completely
trade down in price during a recession. Over the past two years, alle- new private media channel directly to the customer.
giance to some brand categories such as health and beauty aids, aver- This is incredibly important in today’s splintered me-
aged a 15 percent drop in loyalty. dia universe, creating huge efficiencies. You can think
Retail partners are providing plenty of opportunities for the loyalty of ‘points’ pretty much as media expenditure—driving
switch; if consumers want to go cheaper, private label brands are a vi- your most important customers to your own market-
able option. Nielsen Research showed private label sales in the CPG cat- ing channel every day.
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 Partnership Funds
2.1 and 1.9 points respectively from 2007. Once again, on the CPG scale, Once this loyalty ‘destination’ has momentum, it
share points are huge. Branded products, however, still drive the vast has worth as a medium to other partner brands that
majority of dollar (82.7%) and of unit (78.1%) sales. are only too happy to provide partnership funds to rid-
Secondly, in addition to driving traffic to private labels, retailers have ing on these rails and engaging directly with the con-
made big advances in gathering consumer purchase data through their sumer base. This not only provides more engagement
own loyalty efforts. Whilst it is true that many retailers are providing this and stickiness for brand users, but also helps pay for
data to their manufacturing ‘partners’ and at the same time have provid- the cost of the program.
ed access for manufacturers to their own loyalty-based communications
channels, it does put all the cards in their own hands. Manufacturers are Reduction in promotional expenses
realizing that they now need to gather their own customer data in order Promotional expenditure is also reduced as this
to drive innovation, targeted communications and ultimately drive sales. destination provides an effective portal for all pro-
Thirdly, whilst early loyalty efforts were exciting, they were always motions, allowing them to persist longer and reduc-
doomed to failure because the costs of infrastructure and one-to-one ing costs as a result. For one client, in the first year of
communication were too high to make the effort pay off. Today, the huge loyalty program operation, we reduced promotional
advances in all types of digital communication and the ubiquity of the expenditure by over a third and still grew share over
web have made the true promise of loyalty programs deliverable. target growth rates.
So where does a loyalty program fit with other marketing activity?
30 Loyalty Management™CFP8CKP*-'%FI>
Tracking actual purchases
A 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
Loyalty Management™8L>LJK)'(' 31
FEATURES
Mobilize or Die
by Matthew Silk, Waterfall Mobile
I 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:
32 Loyalty Management™CFP8CKP*-'%FI>
Start a Mobile Referral Program regularly as a way of generating foot traffic. Stores should include
By incorporating mobile solutions into existing loyalty pro- calls-to-action on print, TV and radio ads so customers can text
grams, brands can incentivize loyal customers to refer friends via in to get a code delivered straight to their mobile phones.
mobile – and will reap the benefits of a broader program mem- Retailers are also seeing success with send-to-phone pro-
bership. grams. Customers can select coupons online and choose to have
Alpine Meadows Ski Resort in Lake Tahoe, California recently those specific codes sent directly to the phone. Or even better,
successfully launched a social media campaign with a referral like my grocery store, customers can add the coupon to their loy-
tie-in and experienced great results. Alpine had skiers texting in alty program and it will automatically give the deal at check out
to win a pair of weekday ski passes and encouraged visitors to when customers use their phone.
spread the word to friends. Each referral entry counted as an ad- Again, people never forget their phones – so mobile coupon
ditional entry for the original customer. In the end, 45 percent of codes have a higher redemption rate then clipped coupons. As
the entries came from referrals. Mobile Marketer has reported, mobile coupons enjoy a five to 15
percent conversion rate, as compared to less than one percent
Provide Customers with Real-time Account Activity for print coupons. Better still: mobile coupons are good for the
Financial institutions could allow customers to register their environment, and reduce printing, paper and distribution costs.
cell phone numbers and text in for the most up-to-date account
information even when they are on the go. For balance updates, Appointment and Deadline Reminders
customers could text BAL to the bank’s short code. For recent As we all know, a great way to build loyalty is to provide ex-
transactions, they could text TXNS. cellent customer service. Businesses should be using text mes-
SMS could also be used to alert clients when there are chang- sages to inform customers of upcoming deadlines or events. This
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.
es to their accounts – for example when a home address, phone helps to minimize or prevent future incoming calls from custom-
number or email on an account has been changed. This immedi- ers about missed payment deadlines or appointments. A text
ately gives the customer an opportunity to contact the business message is an easy and unobtrusive way to remind a client of
and let them know if they did not make the change – saving the that deadline before it is missed.
client a huge hassle. Most of all, mobile provides a rich, real-time data set of customer
Mobile can also be helpful when an account has been locked behavior – one that can help companies develop key insights into
out because someone has entered the wrong password the set their shoppers’ behavior and values. Retailers can also use mo-
number of times. Instead of having to call the bank or the bank bile to assess the success of loyalty programs themselves to find
needing to send a confirmation e-mail, a text message could be out what’s working, what’s driving foot traffic, and what could
sent with an unlock code and next steps. SMS could also be used use some tinkering.
to notify an account holder when they have overdrawn an ac- Once you’ve developed your mobile program and begin digi-
count, or when a large sum of money has been withdrawn. tally engaging with your customers, you can take it to the next
level and start consider location-based services (LBS), which
Sale Reminders have been getting an enormous amount of attention lately.
Every couple of weeks my local grocery store has a big 8-hour Foursquare keeps growing in popularity with people eager to
sale. They generally send out a mailer to advertise the sale. Inevi- “check-in” in hopes of becoming Mayor in the fictional game. Just
tably, the mailer comes mixed in with a bunch of other market- because people are checking in to a location doesn’t mean they
ing offers, and many times I just recycle the entire stack without are actually engaging with the brand in a meaningful way. Instead
looking at them. of having someone vying to become your fake mayor, it would be
But here’s the thing: I actually do like those 8-hour sales, and smarter to have them text a special keyword of the day that can
want to know when it’s happening. As a loyal customer and part give them points, deals or privileges in the program and will actu-
of the loyalty program, it would be great if they sent me a text ally get people to walk through the doors and spend money. It’s a
message saying, “Reminder: our 8-hour sale starts today at noon. simple way to reward them for their loyalty.
Chicken $1.99/lb and many other great deals.” Obviously, the ability to target customers based on where
How many additional people do you think my store could at- they are at that exact moment is a huge benefit for a brand. But,
tract if they sent out a text reminder the day of the sale? for now, focus on the simple – and get your current program ex-
Apparel and other types of retail stores also benefit greatly tended to utilize mobile and it clear advantages. And we’ll talk
from mobile. They should be texting store coupons to customers more on LBS another time. L
Loyalty Management™8L>LJK)'(' 33
TECHNOLOGY, TRENDS & REWARDS
L 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 Today, gamers
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 come in all shapes
programs with video game mechanics.
Today, gamers come in all shapes and sizes, ages and genders. According to the Pew Re-
and sizes, ages and
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
genders. According
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
to the Pew
of playful competition has risen in the consumer society and everyone wants to raise his or
her social status.
Research Center,
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-
more than half of
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
all U.S. adults, from
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-
Baby Boomers
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
to Generation Y,
place, however, the difference is in the addictive qualities that continually brings people back identify themselves
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”. as active gamers.
34 Loyalty Management™CFP8CKP*-'%FI>
The largest difference between a reward system like that of grams are free, but getting to higher levels takes time and money.
Farmville and, say, American Express, is how participants are be- Stretch goals aren’t a problem at casinos because consumers go
ing rewarded. Constant rewards are key to an addictive experi- there to play games and have fun. However, while Casinos sell
ence. Games reward players every few minutes, hours or days fun, they sell it on a part time basis. Harrah’s has tried to turn their
while most loyalty programs require a long term approach. Every fun into a full-time experience by offering a virtual casino on their
little task that is done in Farmville is advancing the player to their website. This strategy keeps their brand front and center, allow-
next level upon which they can earn more space, animals, crops, ing consumers to play slots and craps risk-free. The only problem
etc. Simple tasks like watering crops will grant players some is, these online games don’t tie to their in casino rewards system.
sense of accomplishment as they work towards that next level. In Even though Harrah’s offers games on their website, they are
the case of American Express, buying that fast food hamburger doing little to differentiate these games from other free-to-play
doesn’t offer a sense of accomplishment when two points are casino games on the web. By tying their loyalty reward system
granted towards that 100,000 point trip. With that established, to their website games, Harrah’s could accomplish three things:
there’s not much reason for checking into the rewards page un- :Xgkli\ Zfejld\ij fe k_\`i n\Yj`k\ n_f nflc[ fk_\in`j\
less you’re close to your goal. And in a rewards world where most play on hundreds of other free game websites
points are equal to a dollar spent, the average consumer waits
quite a while to reach 100,000 points. Gifm`[\ X i\Xc$k`d\ i\nXi[ jpjk\d YXj\[ fe jdXcc XZZfd-
plishments in a virtual world
B\\gd\dY\ij\e^X^\[`ek_\`ii\nXi[jgif^iXdXe[`eklie
Don’t just think about broad or increase the frequency in which they return to their real world
bottom line objectives. Focus on properties
Using games to drive consumer loyalty and engagement with
easy-to-achieve activities that will your brand is easy. You can start by adding game mechanics to
your loyalty programs in four simple steps:
have an overall impact on your
1. Define what consumer behavior you need to drive. Don’t just
bottom line. 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
Loyalty programs can benefit from taking a page out of Farm- product endorsements to friends. The more specific you can
ville’s leveling system by rewarding members early and often. be, the easier it is to build the right game mechanic.
Give consumers a reason to go back to the site regularly to check
2. Assign points to those behaviors. Think about how much
on progress and to engage with your brand. Give members small
value each of the behaviors has to your business and assign
rewards (games, music, ringtones, etc.) along the way. And add
points to each action accordingly. Points should be weighed
leader-boards among friends to your programs building competi-
relatively, so if opening a new account is ten times more valu-
tion and adding depth to your loyalty game campaign. A great ex-
able than clicking on an advertiser’s link, make sure the point
ample of a successful reward program is McDonald’s monopoly:
system reflects that reality.
“The McDonald’s Monopoly Game drives tremendous excite-
ment from our consumers and really has become a part of pop 3. Create a leader board to display points. Just like the Employee
culture that people love and anticipate each fall,” say Rick Wion, of the Month plaques at restaurants, create a socially-net-
Director of Social Media. He adds “each year we try to evolve the worked leader board that allows users to feel like they are ac-
program so that it stays relevant.” McDonald’s has done a great complishing something relative to their friends and peers—A
job of reinforcing the notion of both smaller goals and big hope little encouragement goes a long way.
with a combination of small prizes and big prizes with their An- 4. Make “fun” the tool you use to drive your goal! Whether your
nual Monopoly game. With each piece earned, consumers are business is finance or funerary, making fun a principal objec-
either one third, or one half of the way to a reaching a major re- tive will substantially increase consumer engagement and
ward. According to Game-Based Marketing, a book recently pub- drive consumers to remarkable new revenue opportunities.
lished by John Wiley & Sons, McDonald’s Monopoly game gen-
erates nearly one hundred million dollars in incremental revenue As it stands, there are fundamental game mechanics in place
per year. The beauty of this campaign is that consumers barely with today’s traditional loyalty programs. But these mechanics
know they’re in the game. What’s a small soda here or some fries need to evolve with the consumer mentality—which is becom-
there? It’s a lot of extra revenue in McDonald’s pocket, but more ing accustomed to more frequent reward satisfaction through
importantly, it’s visual progress that is clearly noticeable when popular casual games. The human desire for instant gratification
that Marvin Gardens slot is filled and there are only two more must be enhanced and celebrated if reward programs are going
yellow pieces to go. And for all the consumer knows, that could to achieve the next echelon of adoption. Consumer motivation,
be on the next coffee they drink. involvement and immediate rewards are the trifecta of success
Let’s look at one more industry; Casinos. Casino loyalty pro- for brand loyalty outreach. Existing brands must act on these
grams are all about leveling up. Most casinos reward comp dol- principles and implement new, engaging programs for their con-
lars for every personal dollar spent on their floor. Entry-level pro- sumers. If they don’t, they run the risk of losing market-share. L
Loyalty Management™8L>LJK)'(' 35
TECHNOLOGY, TRENDS & REWARDS
The Flexible
Redemption
Revolution
by Ben Ashwell, Loylogic
36 Loyalty Management™CFP8CKP*-'%FI>
Loylogic secured a How would fully flexible miles-plus-cash reward
United States patent for payment increase the value of your FFP miles?
points-plus-cash tool on
the market today.
points as they can, they should have this option. We don’t just see the results in opinion surveys—the
Obtaining a reward with points plus a cash contri- statistics speak for themselves. Members who redeem
bution, allowing the customer to call the shots, is where only their points go on to accrue or spend seven times
points plus cash payments is of paramount importance. more than those who don’t redeem. For those redeem-
Customers need to be able to choose the construct of their ing with cash and points, that statistic increases to eleven
payments as small as 1 point, with the remainder in cash, times more, equating to 1.5 times as much additional ac-
or the other way around. At the same time, the program crual from points and cash customers. These statistics
sponsor can manage costs and determine where the re- support accelerating accrual patterns and become even
ward is greatest; by increasing value on a greater contri- more pronounced for customers with lower point bal-
bution of points, or a greater contribution of cash. ances.
In 2008, in an online survey with more than 9,000 It is not hard to see why. From a customer perspective,
members from 60 frequent flyer programs worldwide reward flexibility presents a host of advantages. Custom-
participating, one powerful message was heard: 94% of ers don’t need to accumulate thousands of points to get
frequent flyers want a flexible points-plus-cash payment benefit from their points. In fact, with flexible points-
option when redeeming rewards. It is an essential com- plus-cash payments, customers can get value from as little
ponent of the flexible loyalty journey customers require. as one point, which will present them with a discount on
There are a number of tools on the marketplace, the total buying price.
known as ‘Sliders’ which allow customers to split their This drives an opportunity for earlier redemption,
total purchase value by cash and points. However some leading to deeper engagement with the loyalty program
sliders have many more capabilities than others. The most once they reach their ‘golden moment’—the point at
sophisticated generate dynamic per-point-values giv- which they redeem—thus a dramatically improved affili-
ing the customer flexibility to determine the value of the ation with the loyalty program. The most frequent busi-
points they input. This is done at unchanged costs to the ness travelers and the highest spenders are no longer the
program sponsor. This enables program sponsors with a sole true beneficiaries.
powerful engagement differentiator, thereby providing a In the current consumer world, customers need em-
feeling of intimacy with the program. powerment and customers need choice. The reward
Advantages can also be felt throughout the redemption programs that offer the greatest selection of redemption
journey. Credit card payments can be limited to selected options will offer rewards to the most segments of their
payment providers or partners by enhancing their busi- customer base, and will ultimately be the most success-
ness. This can stimulate another section of the customer ful. The flexible redemption revolution has arrived, and
loyalty journey through credit card spend, acquisition or is here to stay. L
even activation.
Loyalty Management™8L>LJK)'(' 37
TECHNOLOGY, TRENDS & REWARDS
38 Loyalty Management™CFP8CKP*-'%FI>
The cowrie shell served as both ornamental
jewelry and money in China during the Shang
dynasty (approx. 1000 B.C.).
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 find solutions beyond the obvious. And our commitment to creating real business results.
Visit InteliSpend.com for details.
The mark, American Express, marks containing “American Express”, and abbreviations of such marks (i.e. Amex, AEIS, AE, etc.) are trademarks of an affiliate 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 affiliated companies of Maritz Holdings Inc. (formerly Maritz, Inc.) and
neither American Express Company nor its subsidiaries hold any ownership interest in AEIS Companies.
Target Your
Social Media
Tactics
for
Stronger
Customer
Bonds
by Sid Liebenson, Marketing Highway
T 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”:
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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.
40 Loyalty Management™CFP8CKP*-'%FI>
Cross’ “Five Degrees” concept still makes a brand is seen as appropriate, relevant, and worth consideration.
sense. But it was developed at a time when mar- The marketer should address consumers not as a general popula-
keters still controlled the brand conversation tion, but as actual brand prospects.
and email was an emerging technology. How Buyer advice is crucial at this
does this construct hold up when social media stage, especially if a purchase Marketers
enter the picture? We decided to look at how represents significant cost or risk.
social media can fit into every phase of the cus- The more a brand is a “considered should be
tomer bonding process. purchase”, the greater the sway
First, don’t think of the process as a linear of consumer ratings and reviews. listening to
hierarchy. Even in the 1990s, it could be seen Marketers should facilitate and
as a loop. At that time, however, the loop meant promote product reviews on their what’s being
that the intelligence derived from dialogue with
Advocates could be used to better address
own Web sites and link consumers
to third party sites that compare said about
methods of establishing Awareness, Identity,
Relationship, and so on. With the overlay of so-
and rate brands within the product
category. Brands can even partici- the brand in
cial media, it also means that the Advocates can
help lead consumers through each phase.
pate in conversations by address-
ing issues brought up in reviews. social media.
Awareness. This is the stage when consum-
ers first become aware of a brand. Awareness is
Bloggers can be given prod-
uct to test and discuss. Marketers What are
built through advertising, promotion, and word
of mouth. Of these methods, it is word of mouth
can host Webinars and podcasts,
post product demonstrations, and the product
that creates the most relevant awareness. As
social media is the online equivalent to word of
place sharing tools on their sites.
At the same time, marketers
attributes
mouth, social media can be extremely effective.
Tapping into “social influencers” can help get
should be listening to what’s be-
ing said about the brand in social
that are
the word out about your brand. Connect with
bloggers who have credentials in your product
media. What are the product attri-
butes that are valued, and what is
valued, and
category and/or a strong following with your
target audience. Encourage customers to self-
found deficient? It’s possible that
a portion of the audience might
what is found
identify through Fan or Group pages on Face-
book, YouTube, and other sites, and give them
value one attribute, say product
design, while another audience
deficient?
a reason to pass along brand messages to their segment is highly enthused about
friends. product efficacy. Messages that reinforce these different attributes
Place a Wikipedia entry. Post photos and vid- can be targeted to social media vehicles that reach the appropriate
eos on content sharing sites. When any brand audience segment.
is marketed, people will want to know more Relationship. At this point, the consumer has had a brand expe-
about it—and they’ll go online. So make it a goal rience. If the product performs as promised—i.e., lives up to expec-
to have your brand message where people are tations derived from advertising, packaging, word of mouth (includ-
likely to look. And encourage online dialogue. ing social media), and online research—the Relationship stage gets
Add “share with social networks” functionality off to a positive start. Give new customers the opportunity to share
to emails, ads, and other brand communications. their brand experience. Ask for feedback, reviews, etc.
Identity. A good job by the marketer at the Of course, not everyone will have a great brand experience, and
Awareness stage leads the consumer to the by asking for feedback, even the best product will garner some neg-
Identity stage. This is when people not only ative reviews. However, by monitoring the reviews you can often
know the brand name, they understand and address issues early and directly with less-than-satisfied custom-
agree with its promise and values. At this stage, ers, thus reversing the trajectory of the relationship.
Loyalty Management™8L>LJK)'(' 41
Target Your Social Media Tactics for Stronger Customer Bonds (continued)
42 Loyalty Management™CFP8CKP*-'%FI>
Loyalty is...
...referring someone to your brand.
...a trusted partner.
...a crucial measure of success.
...The Human Connection. ®
The Human Connection® is about the people who affect your business success:
employees, channel partners and customers.
Sales Incentives
Employee Engagement
Channel Performance
Customer Loyalty Solving business challenges with people solutions
C 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?
44 Loyalty Management™CFP8CKP*-'%FI>
A Needle In A Haystack Once you have this insight focusing
Firstly, no one said it was going to be easy but even needles can be found if on the right customers with the right
you use the right tool. When looking for influencers, rocket science is particu- marketing activities and tracking the
larly useful! right metrics will achieve game-chang-
Traditional CRM programs view each consumer in isolation, failing to cap- ing results far beyond the incremental
ture the social sphere that affects their behaviour. A new approach, Influencer improvements possible with the best of
Marketing Management (IMM), is beginning to emerge: CRM.
Particular issues can be identified
Step One - Focus on the Influencer such as churn rates, as was the case for
Accurately identifying purchase influencers is the foundation of the Cellcom Networks. “We were able to use
approach. Within your customer base is a group of some 7–15% that serve social network technology to increase
as opinion leaders. Each of these opinion leaders typically influences pur- churn prediction and consequently pre-
chase behaviour of 3-10 followers—which means that identifying and suc- vention by a factor of 10. We expect to
ceeding with the influencers can affect your entire business. be able to use the technology in most key
Step Two - Focus on Transactions areas of marketing activity.” Explains
Focus on transaction data since that is where real influence happens Adi Cohen, VP marketing, Cellcom Net-
(this is where the rocket science comes in). Analysing millions of transac- works.
tions to uncover patterns of influence is not easy, but it is possible with the Targeting customer apathy is anoth-
right approach and the right algorithms. Analysing purchase histories can er key area, as Aswyn Saktoe-Veenenbos,
uncover patterns that reveal meaningful social connections. For instance, VP Marketing Database Intelligence,
two people shopping at the same time in the same store could be a coin- T-Mobile Netherlands explains. “Con-
cidence, but if the same two people also shop at the same time in a differ- sumers are flooded with marketing
ent town, you start accumulating evidence for a social connection between messages and are increasingly tuning
them. Once you find enough similar patterns, you can be confident that out of vendor communication. Tapping
there is a real social connection between the two shoppers. The next step is into the power of social influence gives
to identify who is the influencer and who is the follower which can be de- us a whole new way to interact with our
termined by overlaying behavioural data to the social connections. Crunch customers…It enables us to reach an au-
enough data with this approach and you can determine influence patterns dience that was otherwise difficult to
with extremely high conviction (>99.95%). communicate with, let alone get them
to act.”
Step Three – Focus on the Story, not the payoff
Companies typically realise between
When marketing to the influencers, it is important to remember that
5x to 10x improvement in marketing ROI
the more meaningful payoff is in their ability to influence others, not the
as they’re able to magnify the reach and
amount they shell out of their own pockets. What motivates influencers
effectiveness of customer acquisition,
to tell a good story is related to their emotional connection to the brand.
cross-sell, and retention efforts follow-
Things like price breaks or free products aren’t effective and may backfire,
ing investment in IMM. By identifying,
as the followers will expect similar incentives. Programs that create posi-
understanding, and cultivating the ener-
tive emotional experiences—such as ”be the first to know”, high touch per-
gy of its advocates, companies can har-
sonal contact, and early access to new products and services are far more
ness the power of viral marketing, reach
effective in turning influencers into advocates.
customers and prospects that might not
Step Four – Measure what Counts otherwise be reached, and strengthen
Turning Influencer Marketing from an aspiration into a measurable long-term customer loyalty.
marketing discipline requires a focus on the metrics that the CMO can take For more information, please read
to the boardroom. Counting tweets and “followers” may be an interesting Ran’s ebook: http://resources.pursway.
exercise, but what really matters is whether targeting the influencers moves com/eBook-TheInf luencerMarketin-
the needle when it comes to top-line and bottom-line business results. gRevolution.html?source=loyalty L
Loyalty Management™8L>LJK)'(' 45
BEST BUSINESS PRACTICES
Developing Relationships
and Direct Content—How
to Better Serve Consumers
by Sandra Zoratti and Lee Gallagher, InfoPrint Solutions
46 Loyalty Management™CFP8CKP*-'%FI>
All of these are valid questions, and ones that don’t necessarily Step 4: Measure the Results
have straight forward answers. Everyone has their own opinion as After the test campaign has been put in place, the results must be
to what works and what doesn’t overall, but there are options to measured based on a wide range of criteria and bottom-line mea-
come to a common ground. sures. For example, the test case with Best Western proved to be a
With precision marketing, marketers can deliver direct mar- success, as there was a 39 percent increase in the number of stays
keting messages that are both relevant and preferred by the cus- and a 30 percent increase in revenue. These measurements are a
tomer. In the end, it should all come full circle – the customer data sure sign that audience targeted for this campaign was relevant
drives relevancy, relevancy drives brand loyalty, and loyalty drives and interested in what Best Western had to offer.
revenue.
So what exactly does this process entail? There are five essen- Step 5: Refine and Repeat
tial steps one must take to successfully connect with a consumer. Once marketers have gone through each of these four steps to
By abiding by these rules, marketers connect with a consumer, they must
should be able to deliver direct market- then reassess the results and produce
ing messages that are useful, and in the
end both the customer and the company Marketers must realize the same or different results, depending
on what the outcome was in the test. It
will win.
that they can’t win is also essential to understand why the
results occurred the way they did. For
Step 1: Identify the Issue
By first identifying the issue at hand and without their customers, example working with a different hotel
chain may result in a completely differ-
the problem that the consumer is having
with the messaging, marketers can then and if they aren’t ent outcome, depending on that chain’s
customers and needs.
identify what they need address. Once
you’re clear as to what this is, you can able to address those The key to this process is to have a
move forward in the process.
customers’ needs, their strategy in place so that a successful
communications channel can be created.
Step 2: Leveraging What is Al-
ready There business will quickly go In the case of Best Western, for example,
both personalized and targeted promo-
Instead of starting from scratch, market-
ers should utilize the tools they already out the window with the tional messaging resulted in a success-
ful campaign in which revenue and cus-
have. By first developing a customer seg-
ment with the desired level of engage- other 3,000 messages. tomer engagement increased. A lesson
to be learned for marketers out there
ment, marketers can then find custom- is that there are ways to generate rev-
ers whose previous behavior indicates enue through existing customers. There
similar interests to this new group. Moving forward, this group is a lot of potential for revenue increase by simply creating more
can be divided into a target group, and then into a control group. meaningful relationships with those who already are loyal to a par-
ticular brand or company.
Step 3: Determine the Best Message When it comes down to it, consumers know that with the tech-
The next step in the precision marketing process is to synchronize nology and opportunities available today, there are ways to avoid
all of the messages to determine what the best message is for the irrelevant, mass-messaging. Marketers need to take that extra
channel. In a test case with Best Western International Inc., Info- step to show their consumers they care, and that they do want
Print and the CMO Council were able to demonstrate why this step to provide the best and most relevant recommendations for them.
is important and how it works. First, the active rewards members By looking at consumer purchasing history and recognizing which
were examined and 100,000 were identified as comparable cus- companies that consumer has done business with in the past, mar-
tomers to Best Western’s high-value customers. In other words, keters can determine what messages and promotions are relevant.
those who were more likely to apply for a cobranded Master Card Marketers must realize that they can’t win without their cus-
or engage in the “More Rewards, Faster” summer promotion. Half tomers, and if they aren’t able to address those customers’ needs,
of this group was targeted with personalized messaging through their business will quickly go out the window with the other 3,000
monthly loyalty statements. These statements were leveraged as messages. So here is the bottom line – get to know who you’re do-
promotional documents, letting loyalty program members know ing business with, and they will continue their business with you. L
that they could accumulate points faster during this promotional
period.
Loyalty Management™8L>LJK)'(' 47
TECHNOLOGY, TRENDS & REWARDS: BEHIND THE BRAND/PEOPLE
Melinda
Parks
Director, Loyalty & Retention Marketing
Sprint
We’ve been hearing great things Service industries traditionally have focused most
about the new Sprint customer marketing dollars on customer acquisition. It’s great
loyalty initiatives. Loyalty to see Sprint so committed to its customer! How have
Management takes a closer look you been able to make customer loyalty a priority?
We know that driving customer loyalty has to start with meeting
at the woman behind the brand– basic customer needs. So we’ve made customer service, billing, and
Melinda Parks, Director, Loyalty the network major priorities. We also realize the importance of de-
and Retention Marketing. Melinda 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
is responsible for all marketing advocate. Part of our commitment to the customer was the launch
and communications to Sprint’s of our Sprint Premier loyalty program which has gone a long way in
consumer customers including new driving customer satisfaction and loyalty with our highest value and
longest tenured customers.
customer expectation setting, life-
cycle management, direct marketing Share how this change in focus (toward customer
communications, loyalty program retention) has changed your organization?
innovation and retention. Melinda Over the last couple of years, we have had a company focus on
improving the customer experience. That focus has been paying
has held previous marketing roles in off in higher customer satisfaction overall. We’re also learning that
field marketing, channel marketing we don’t have to trade off customer acquisition against customer
and marketing integration. Prior retention. Retaining customers and trying to get them to become
loyal advocates is a great acquisition strategy and we’re gradually
to her marketing role at Sprint, changing the dynamics so that our employees understand that.
Melinda held senior manager roles
in finance operations and financial
planning and analysis. She has been
at the company for nearly 13 years!
48 Loyalty Management™CFP8CKP*-'%FI>
How many reward programs are you Which talent would you most like to have?
a member of? How many do you use I would love to have creative talent to be able to do more
regularly? Which is your favorite and why? of the creative development, telling the story with pictures
I’m a member of 10 or so loyalty reward programs. I and words. I have great managers and partners I work with
regularly use 4-5 of them. My favorites are my that really help me out in that area.
:i\[`kZXi[n`k_;`je\pi\nXi[jY\ZXlj\@cfm\kf
travel; What are the qualities you most admire in a
Jflk_n\jkY\ZXlj\pfl\Xiejfd\k_`e^kXe^`Yc\ person?
pretty quickly; and I’m from a small town in central Kansas, I really admire
Bf_cËjY\ZXlj\@cfm\k_\`i[`jZflekjXe[k_\ simple honesty and hard work. I love working with leaders
simplicity of it, it’s good on everything in the store who can see the big picture and think strategically, but can
just like they advertise. also roll up their sleeves and do the work when necessary.
When you look back, what was your favorite Which book(s) are you currently recommending?
‘job’ experience and The one I’ve
why? found most use-
The one I’m doing right now. We don’t have to trade off customer ful in my career is
I love this work because it is as Hardball for Wom-
much big picture as you can get acquisition against customer retention. en by Pat Heim
in a big company. It combines and Susan Galant.
customer insights, strategy,
Retaining customers and trying to get I also found Habit,
95% of the Be-
financial feasibility, marketing them to become loyal advocates is a haviors Market-
development and operational
implementation. great acquisition strategy. ers Ignore by Neal
Martin to be very
Who has useful as we think
had the about driving to
loyalty.
most
influence What can we
in your expect from
life? Sprint into
My par-
ents are fan-
2011?
We just cel-
tastic – they
ebrated the one
allowed me
year anniversary
to be inde-
of our loyalty pro-
pendent and Melinda hiking in Colorado
gram, Sprint Pre-
learn to make
mier, in 2010 by
my own decisions, which is critical in my role. (They
announcing new benefits to the members. Going forward
might argue I was born a little independent...) As a
we’ll continue to evaluate our loyalty efforts, starting first
youth and teen my piano teacher had significant influ-
with meeting basic needs and forming trusting relationships
ence, she helped me see the possibilities in life beyond
with our customers.
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 is your advice for a novice loyalty
marketer?
What inspires you? Recognize quickly that “loyalty” is much bigger than a loy-
The Cinderella story, I love to root for the under dog. alty program, it’s an overall experience. L
Loyalty Management™8L>LJK)'(' 49
BEST BUSINESS PRACTICES
DMA Retail Marketing Conference 2010 2010 DMA Digital Marketing Days
May 24-27, Orlando, FL June 14-16, New York, NY
The marketing industry is in transition. That is the message The 2010 DMA Digital Marketing Days event was filled
that was trumpeted by the superb lineup at the DMA with a variety of great sessions that focused on the
Retail Marketing Conference. Throughout the show it was turbulent, dynamic and exciting times for the direct
apparent that the DMA understands the challenges of this marketing world. Two sessions really stood out above
the pack:
transition and is committed
As keynote speaker Crista Caroni, the CMO of
to making their offering as Communicating Xerox, pointed out: “The future of marketing will
detailed and comprehensive
as possible. effectively resemble the past.” She explained (rightfully so) that
the goal of every merchant should be a hastened return
Attendees were requires creating to the corner bread or shoe store where (to paraphrase
cautioned repeatedly during Cheers), “Everybody knows your name.” Today, it is not
the show, “Do not waste a brand language as much about knowing your name, but your attitudes,
the customer’s time.” Banal that will give the interests, preferences, opinions and being able to craft
marketing strategies no this information into actionable insight to create a
longer work. Communicating
consumer a call dialogue the end user wants to partake in and that can
effectively requires creating to action. create sustainable behavioral change.
a brand language that will Carone explained how Xerox is engaging its
constituencies. “It is always about making the best
give the consumer a call to action, a reason to engage, a
product available for the best audience, yet to do that
reason to give you the rich behavioral data needed to create
you need to listen, understand and be honest with your
the engaged and actionable dialogue you require. Anything audience.”
less would be mendacious. Though there is a focus on price We live in exciting times. The next new technology
and efficiency, consumers will and do pay for value; they could be upon us tomorrow. So whether it is direct/
want to make their lives easier and products that help them digital or “i-direct,” we need to realize that the
accomplish that will command a premium of mind share, marketing communication mix is becoming more
actionable market intelligence and profits. complex, data-focused and dynamic. While was
The market is changing and the DMA is focused on applicable yesterday may change completely tomorrow,
helping their customers understand this evolution and the end goal is the same: Creating loyal, engaged brand
making sure they are using their long-standing emotional champions. And, by “ceding” them some control in
commitment to their customer to help to define and expand the communication and the interaction, they will pay a
premium for your products and services and in doing so
the definition of, and therefore the importance of, direct
will create a “digitally direct” interactive marketing that
marketing.
is good for all involved.
50 Loyalty Management™CFP8CKP*-'%FI>
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
Aberdeen is one of the most strategic and tactical full The main theme of the Gartner Customer Summit 360 was
service research and consultancies in the business. Their convergence, which encompassed the rapid and volatile
depth and breadth of contact, research based on “Voice dynamic in the market and the ability to deal effectively with
of the Customer,” and stark realization that the retail the challenge this fast-paced change. One quote in particular
industry is changing made this an extremely interesting that references research from Bain and Company paraphrases
event. Aberdeen’s keen insight into how retailers can the focus of this conference: “80% of all brands believe their
deliver more effective marketing/loyalty/engagement customers are engaging in the customer experience with the
communication was showcased at the Summit. brand, while only 8% of the customers believe so.” That’s right.
The key messages of the show centered on the ability A whopping 72% difference—or a 10x magnitude—which
to deal with change and how to leverage myriad data clearly illustrates the paradox of this ever-changing marketing
touch points and media channels to effectively listen world we live in.
and engage your audience. The primary areas of focus Not only do brands want and need assistance in navigating
included: the turbulence they are faced with—but, they all seem to
1. The Five Step Turnaround Guide for Retailers: Retail be asking for a pause. No one appears to be suffering from
Revival in 2010 and Beyond a paucity of consumer data, but are rather inundated from
2. Strategic Customer Strategies, Integration and Big a mountain of data. And brands need to figure out how to
Picture Retailing make this plethora of data actionable in order to create the
3. De-Coding Cross - Channel Profitability effective CRM programs that drive sustainable behavioral
4. In-Store Marketing and Maximizing Customer change, increase the share of wallet and therefore ROI! Most
Experience importantly brands need to engage with the customer to help
I am sure this conference will prove a great source lessen the engagement divide referenced by Bain.
of insight for additional Aberdeen studies. Their So what can we discern from this? I walked away from
commitment to having their finger on the pulse of the the Summit convinced that while change (especially in this
retail space bodes well for the retailers who tap into their challenging economic environment) is going to be ever present,
unique thought leadership. brands need to be flexible and they must be encouraged and
supported by senior executives to try new media.
Loyalty Management™8L>LJK)'(' 51
BEST BUSINESS PRACTICES
THE VERDICT
WIDE OPEN.
Personalize the
customer experience.
Increase
customer
loyalty
over
time
and
the
likelihood
of
getting
the
outcome
you
want
out
of
each
touchpoint.
REVIEW
high-touch, high-tech, high-impact: building holistic relationships
that engender customer & employee loyalty
Cng^/&1%+)*)OMNI CHAMPIONSGATEORLANDO, FL
loyalty expo 2010 in review
56 Loyalty Management™CFP8CKP*-'%FI>
loyalty expo 2010 in review
Loyalty Management™8L>LJK)'(' 57
loyalty expo 2010 in review
Loyalty Management™8L>LJK)'(' 59
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