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powered by Loyalty 360 Volume 3 Number 3 September 2011 2011 Engagement Expo Sneak Peek! Thirty Years of Loyalty Congratulations to Affinion Loyalty Group The Rise of Social Media as a Lever for Employee Engagement The Consumer Packaged Goods Dilemma Embracing Corporate Social Responsibility with Russ Reynolds of Batteries Plus
Transcript

powered by Loyalty 360

Volume 3 Number 3

September 2011

2011 Engagement Expo Sneak Peek!

Thirty Years of LoyaltyCongratulations to Affinion Loyalty Group

The Rise of Social Media as a Lever for Employee Engagement

The Consumer Packaged Goods Dilemma

Embracing Corporate Social Responsibility with Russ Reynolds of Batteries Plus

Loyalty Management™ • LOYALTY360.ORG

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011

SEPTEMBER 2011

DEPARTMENTS

LOYALTY FORUM

FEATURES

What’s on Loyalty360.orgLetter from the EditorContributors

Your Voice

Behind the BrandJeff Robertson, Delta Air Lines

Q & A: Ask the ExpertsWhat are your recommendations to help retain customers in today’s marketplace?

Loyalty Reads

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WWW.LOYALTY360.ORGVOLUME 3 NUMBER 3

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This Month in

Learn what affluent customers want from your program

pg28pg24

Get a backstage look at Delta Air Lines' successful SkyMiles programBehind the Brand: Jeff Robertson

pg

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Thirty Years of LoyaltyMark Johnson, Loyalty 360

Engaging Partners through Communities in Today's "New Normal"Melissa Fruend, Maritz Loyalty & Motivation

What Do Affluent Customers Want From Their Loyalty Programs?Linda Dickerhoof, VIPdesk

The Consumer Packaged Goods Dilemma Carlos Dunlap, Kobie Marketing

A Mobile Wallet? Near Field Communications, the New Frontier in Customer Experience, Engagement & Loyalty

Accounting for Loyalty Programs Brian Jones & John Kryczka, PricewaterhouseCoopers

Engaging Partners through Communities in Today's "New Normal"

Loyalty Management™ • LOYALTY360.ORG

WE’RE SOLVING YOURBUSINESS PROBLEMSRIGHT NOW.

digital data direct local retail

Call us today 415.289.1110 or visit solutionset.com

We are SolutionSet, a fully integrated, multi-channel marketing services company. We develop real-world solutions to business, marketing and technology problems. The kind of solutions that help build brands and drive transactions — brilliantly.

BSC021Q2C08_NATURALIZER_WINTER_08_USLOYALTY360_070711 PAROUND 1 ADCWAMPR

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011

SEPTEMBER 2011

TECHNOLOGY, TRENDS & REWARDS

BEST BUSINESS PRACTICES

Making the Audible Actionable: The Value of Voice AnalyticsErich Dietz, Mindshare Technologies

Three Ways to Make Your Loyalty Programs More SocialSanjay Dholakia, Crowd Factory

The 360˚ of Mobile Marketing: Benefits & Best PracticesDoug Dwyre, Mocapay

Social Loyalty: Beyond the LikeMatthew Kates, ePrize

The Rise of Social Media as a Lever for Employee EngagementDavid Schroeder, LoyalNation

Loyalty Innovation

How Healthy is Your Customer Base? Measuring Through Unified Customer Experience Management Russ Haswell, Medallia, Inc.

Embracing Corporate Social Responsibility Interview with Russ Reynolds, Batteries Plus

Knowledge is Power: Helping Your Customers Understand Their Loyalty Programs Christopher Barnard, Points.com

Establishing a Dialogue with the Consumer Inside the Business CustomerInterview with Toni DeWitt, XO Communications

Using Social Technologies to Co-Innovate Product Evolution Stephanie Logerot, National Instruments

A New Era of Customer Loyalty Nick Afonsky, 5one

The Inside Scoop: Viewpoint Voice of the Customer Nancy Porte, Vovici & Pam Snodgrass, Viewpoint Construction Software

Behind the Brand Christopher Barnard, Points.com

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WWW.LOYALTY360.ORGVOLUME 3 NUMBER 3

Loyalty Management

Editorial & Production Team

Erin Raese - Editor in Chief

Mark Johnson - Contributing Editor

Caitlin Schar - Editorial Director

Kathleen Ostoich - Graphic Designer

Crescent Printing Company - Print Production

Loyalty 360 Team

Mark Johnson - President & CEO

Erin Raese - COO

Caitlin Schar - VP Account Management

Amanda Chasteen - Manager, Marketing Operations

Kathleen Ostoich - Marketing Manager

Jillian Hensley - Corporate Marketing Manager

Lindsay Wagner - Sales Manager

Contacts

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

To subscribe to Loyalty Management, visit loyalty360.org.

© 2011 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reli-able. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing authors and not necessarily reflec-tive of Loyalty 360 and/or its affiliates. Loyalty 360 shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

This Month in

pg44

Three Ways to Make Your Loyalty Programs More Social

5

WE’RE SOLVING YOURBUSINESS PROBLEMSRIGHT NOW.

digital data direct local retail

Call us today 415.289.1110 or visit solutionset.com

We are SolutionSet, a fully integrated, multi-channel marketing services company. We develop real-world solutions to business, marketing and technology problems. The kind of solutions that help build brands and drive transactions — brilliantly.

BSC021Q2C08_NATURALIZER_WINTER_08_USLOYALTY360_070711 PAROUND 1 ADCWAMPR

ENGAGEMENT EXPO2011 Expo Sneak Peek71

sneak preview on page 71!

LOYALTY 360 ON THE WEB

6 Loyalty Management™ • LOYALTY360.ORG

»Near Field Communications (NFC). Google recently announced Google Wallet, the latest app to the NFC platform; joining the ranks Orange and O2 who brought contactless payments to the market this summer in the UK. Heads up USA, NFC is a new technology with loyalty and engagement opportunities to watch.

»The Cloud. A resource that allows data and software to be accessible through an internet connection rather than a localized computer. The cloud provides a real-time extension of IT capabilities including Infrastructure –as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). Read more about the cloud on Loyalty360.org in, “Will Loyalty Marketing Embrace the Cloud?” by Bhavana Yerrumreddy

NOWtrending

NFC

The Cloud

Here's a snapshot of some of the findings from our weekly poll series, The Pulse.

65%are not currently using analytics to monitor and measure your social media efforts. But,

40% plan to do so in

the next six months.

36%Nearly 36% say YES, they would pay

to play in a loyalty program!

42%say hotels & casinos are leading the way when it comes to implementing the most innovative and

effective loyalty strategies

LOYALTY 360 THOUGHT LEADERSHIP SERIES WEBINARSThis fall, attend a Loyalty 360 webinar, learn from industry leaders and gain access to valuable insights, trends, tools and advancements.

DID YOU MISS A WEBINAR? Check the Loyalty360 archives and catch up on what you missed.

Loyalty Management™ • LOYALTY360.ORG 7Loyalty Management™ • MAY 2011

LOYALTY TODAYLoyalty Today is an aggregation of leading blogs focusing on customer loyalty, engagement, CEM and CRM. Interact with the best minds in the business and find content from a wide variety of blogs all in one place. Loyalty Today is quick to become your favorite stop for daily marketplace insights.

As a Loyalty 360 member, you have the opportunity to share your blog or original content through Loyalty Today to increase exposure and readership and engage with other Loyalty Today users by exchanging comments. Plus, each member who contributes content to Loyalty Today is eligible to become a Loyalty Leader and receive a featured spot on the Loyalty Today homepage.

For information on submitting your blog and becoming a Loyalty Leader – visit Loyalty360.org.

COMING SOON…CouncilsLoyalty 360 Councils are online communities for thought leaders to connect with their peers to share and discuss hot topics, pressing issues and experiences within a specific industry or marketing focus.

Membership in Councils is a Loyalty 360 member exclusive. Council, benefits and functionality include:

•Initiating discussions and engaging in conversations with council members•Sharing resources such as research, case studies and assorted multimedia•Viewing recent activity within your councils from a personalized mini-feed•Privately messaging other members of the councils you belong to•Attending virtual monthly meetings led by council moderators

Councils will be launching soon. Join Loyalty360 today and be part of the council community!

NEWwhat's

on LOYALTY360.ORG

Loyalty Management™ • LOYALTY360.ORG

FROM THE EDITOR

8

It's About the Experience!A focused approach to improving the customer experience is a shared goal for

consumers and marketers alike. 78% of you say that the customer experience is

the key to your loyalty. While the market has been spending a lot of time talking

about Facebook, twitter, emails, loyalty programs, points, etc., hearing “ 78%”

made me take a step back. Yes, this new media is important. But, what's most

important is how these new media outlets fit into our core brand message and

work in tandem to elevate the consumer experience. It's integrated marketing 101.

One message, one vision, one goal. Simple.

In this issue, we take a look at using the various tools and tactics available to

spearhead engagement from a variety of viewpoints, including employee and B2B

strategies in the mix!

David Schroeder of LoyalNation, shares, “Management teams that can

harness the power of social media to connect and engage employees will enjoy

a significant competitive advantage…” as he illustrates the value of integrating

social media into your employee engagement strategies in, "The Rise of Social

Media as a Lever for Employee Engagement."

As we examine B2B engagement, read Melissa Fruend’s of Martiz Loyalty &

Motivation article, "Engaging Partners through Communities in Today’s ‘New

Normal,’" and then join her at Engagement Expo this fall to hear more on the

topic.

In addition, we were honored to speak with XO Communications' Toni DeWitt

for exclusive insights into how engagement, loyalty and retention efforts can

have significant influence and play at one of the nation’s largest communications

service providers. Learn more about how her approach to integrating engagement

efforts may influence opportunities in your workplace as well in, "Establishing a

Dialogue with the Consumer Inside the Business Customer."

We continue on the engagement journey with National Instruments and

Batteries Plus. Both companies have shared stories and insights about how their

approach to engaging the consumer and enhancing the customer experience

leveraged brand goals to engage fans and lead the way to creating a loyal customer

following in: "Embracing Corporate Social Responsibility," an interview with Russ

Reynolds, CEO of Batteries Plus, and "Using Social Technologies to Co-Innovate

Product Evolution," by Stephanie Logerot of National Instruments.

We wrap this issue with a preview of some of the great speakers, workshops

and presentations from Loyalty 360’s Inaugural Engagement Expo. Join us

November 6th – 8th at The Westin Stonebriar, Frisco, TX (just outside of Dallas),

we look forward to seeing you there!

Enjoy the issue!

Sincerely,

Erin RaeseEditor-in-Chief

Loyalty Management

[email protected]

Welcome new Loyalty 360 Members:Hawkeye

Profit PointGiftango

Pilot Flying JuSampFiserv

HasbroDirty Harry's

RestaurantAllant

Loyalty Edge, American Express

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011

loyalty is a journey.we're here to guide you along the way.

Find tools, tips, and connect with your peers to find the answers to your loyalty questions at loyalty360.org

Looking to build your organization's engagement and loyalty strategies? Loyalty 360 makes it easy to find a partner with the capabilities to help you reach your goals.

Want to be a part of the largest engagement and loyalty supplier directory? For only $2500/year, sign up to be listed with your own customizable member page.

Loyalty Management™ • LOYALTY360.ORG

Russ Haswell

Carlos Dunlap

Erich Dietz

Doug Dwyre

Mark Johnson

Brian Jones

CONTRIBUTORS

Nick AfonskySVP Business Development at 5one, Nick has 19 years of experience as a solutions consulting and sales executive in interna-tional Retail and FMCG.

Christopher Barnard Christopher, President and co-founder of Points International Ltd., is responsible for corporate strategy, product development and investor relations. In 1998, he also co-founded Canada's first internet business incubator, Exclamation International.

Toni Dewitt Toni DeWitt is a loyalty marketing practitio-ner with over 15 years in consumer-centric marketing strategy to include both con-sumer and B2B marketing, customer lifecy-cle management, and customer experience initiatives.

Sanjay Dholakia Sanjay Dholakia is CEO of Crowd Factory, the leading provider of crowd-powered marketing applications that add a quantifi-able social boost to every digital interaction.

Linda Dickerhoof Linda Dickerhoof is the Director of Market-ing Communications with VIPdesk, which is trusted by global industry leaders to en-hance their brands through its concierge, loyalty, and customer care programs.

Erich DietzErich Dietz has been the Senior Sales Direc-tor for Contact Centers at Mindshare Tech-nologies since 2003, deploying successful customer feedback solutions for several recognizable brands.

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

Doug Dwyre Doug Dwyre, president of Mocapay, is a seasoned executive with 24 years of ex-perience in the financial services industry delivering innovative payment solutions to issuers, merchants and consumers.

Melissa Fruend Melissa Fruend is Solution Vice President for B-to-B Loyalty at Maritz Loyalty and Motivation. In her role, Melissa provides the thought leadership for the solution by introducing innovative strategies and mar-keting solutions to deliver on clients’ objec-tives for direct and channel sales models.

Russ HaswellRuss Haswell is Vice President of Sales for Medallia, Inc., a CEM vendor headquar-tered in Palo Alto, CA. With over 12 years of experience in customer experience man-agement and enterprise software-as-a-service solutions, Russ heads up sales and business development efforts for Medallia.

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

Brian Jones Brian Jones is a Principal of Pricewater-houseCoopers LLP in Los Angeles leading the US casualty actuarial consulting prac-tices in the West Coast and Southeast re-gions.

Christopher Barnard

Toni Dewitt

Sanjay Dholakia

Linda Dickerhoof

Nick Afonsky

10

Melissa Fruend

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011

We create memorable customer experiencesthat people will talk about through our full suite of customer loyalty offerings:

Concierge and Customer Loyalty Programs, Customer Care, Experiential Programs, Travel Assistance and Medical Assistance

To learn more about us, visit:www.VIPdesk.com

Or call 1.800.631.3341

NOW SHOWING

CONCIERGE & LOYALTY

DELIGHT

NOW SHOWING

CUSTOMER CARE

ENGAGE

NOW SHOWING

EXPERIENTIAL PROGRAMS

ACCESS

NOW SHOWING

TRAVEL ASSISTANCE

ASSIST

NOW SHOWING

MEDICAL ASSISTANCE

PROTECT

NOW SHOWING

GLOBAL SERVICE DELIVERY

DELIVER

FINAL_VIPdesk_HP4C_LoyaltyMgmt_Ad_Q3.indd 1 7/11/11 8:45 AM

John Kryczka

Stephanie Logerot

Russ ReynoldsMatthew Kates

David Schroeder

Pam Snodgrass

Matthew Kates Matthew Kates, Vice President, Strategic Services, ePrize, is responsible for leading all areas of loyalty and promotion concept development, client metrics, research, analysis and program development.

John Kryczka John Kryczka is a Managing Director of PricewaterhouseCoopers LLP in Chicago leading the firms customer loyalty actu-arial practice. His clients include many of the world's premier airline, credit card, and hospitality loyalty programs.

Stephanie Logerot Stephanie Logerot is a social media and marketing content strategist at National Instruments.

Nancy Porte With over 20 years experience, Nancy Porte is responsible for the Voice of the Customer program while managing cus-tomer support, customer training, and CRM systems.

Russ Reynolds Russ Reynolds is President & CEO of Bat-teries Plus, the largest U.S. battery and light bulb franchise system focused on the expanding $30.7 billion battery and $14 bil-lion light bulb categories.

David Schroeder David Schroeder is the President of Loyal-Nation, dedicated to the development of employee engagement through employee recognition and incentives.

Pam Snodgrass Although Pam has worn many hats during her 30+ years with Viewpoint Construc-tion Software, there was a common theme–customer focus. As Manager of Customer Quality, Pam is the company’s #1 nag about the importance of both gathering and act-ing upon customer feedback–to ensure all customers go home happy.

Nancy Porte

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 at [email protected].

LOYALTY FORUM: YOUR VOICE

12 Loyalty Management™ • LOYALTY360.ORG

What is the link between customer experience and loyalty?

am the Marketing Director for the Loyalty Re-search Center, a marketing research company specializing in customer loyalty. Our scien-tifically validated hierarchical model of loyalty shows how daily interactions between custom-ers and companies drive overall company per-ceptions that lead to loyalty (or not) and posi-tive or negative behaviors. Positive behaviors include willingness to recommend the company, continue to do business with the company, do more business (greater share of wallet) with the company. While negative behaviors include discontinuing doing business with the company and sharing negative experiences about doing business with the company with other current or prospective customers.

A poor experience that is unresolved will im-pact loyalty toward a company as mentioned above. However, a poor or bad experience that is quickly resolved goes a long way toward enhancing customer loyalty—"that company listened to my problem and really took care of me." Experiences help form attitudes and atti-tudes drive behaviors.

Tracie Mrakich

I

here are some things that are core to the experience; things that

the typical risk/reward scale goes off balance for. I can't remember the

source but the example that cemented the topic for me was a trip to

Disneyland. If the artist portrays Sleeping Beauty perfectly that is an ex-

pectation. We don't 'reward' DL with loyalty. If we see her smoking and

cursing at young children we never go back. So for perfection there is

very little reward, and for failure the ultimate punishment. On the other

hand if someone from the janitorial crew shows your family of six the

perfect place on the hill to watch the parade from—wow! Fireworks. Be-

cause it wasn't an expectation it 'delights' the family. I think it was Fred

Reichheld that referred to these things as frugal wows...Things that don't

cost much, but have an inordinate positive impact.

I don't appreciate, as well meaning as it may be, a database approach

to customer experience, especially one that does not have transparency.

It's like the checker that tries to read my name off a receipt or credit card.

It's not genuine. I rather that you look me in the eye the next time and say,

‘thanks for coming back, how was that watermelon...’

My favorite dry cleaner, EVER, within three visits knew, and I mean

knew—not looking up in computer—all of my preferences. What got

starch, what didn't; what to fold, what to hang; recognized ME—not my

car—before I got to the window.

Dale Halvorson

T

n terms of offers and discounts, loyalty schemes cannot compete with organizations providing instant gratification, deals and discounts (Grou-pon and latest Google Offer) as by nature loyalty programs are delayed gratification....

Thus the experience as the most important aspect in loyalty...Do things extraordinarily well, delight the most loyal customers with dif-ferentiated services, recognition and address their prestige quotient. Ex-traordinary experience is what would be and is the important part of any successful loyalty program. It’s the operations/delivery which drives such experiences, so empower them.

Ravi Shankar

I

Loyalty Management™ • LOYALTY360.ORG

ustomer Loyalty is cemented through Cus-tomer Experience or rather, Customer Delight. Bring in extraordinary differentiated services and loyalty will automatically be built in. The 'catalyst' (loyalty cards/mobile services/etc.) should be such that it captures instances of experiences and brings forth customer delight at the right time of interaction.

I would like to share a small experience about customer delight and loyalty; small, but powerful enough. Recently I had travelled to the same place thrice and during each visit I stayed in the same hotel. In my room there was a basket of fruits containing three types of fruits. During my first two visits I had eaten only apples from the basket. When I visited the same hotel for the third time, I went my room and was pleasantly surprised to see just apples in the basket. This I believe is “cus-tomer delight” and personalization and obviously loyalty will follow. Now, the hotel is assured of my visit the next time I come [to town], creating auto-matic loyalty. I think today’s operations should be such that they drive the loyalty program, and they are bound to be successful.

Rakesh Jadhav

C

n important factor to remember too, is that which a com-pany perceives as loyalty. The common mistake is believing that if a customer is repeat purchasing or staying with a service (e.g. renewing gym membership) that this is characteristic of loy-al behavior. Yes it is in a sense loyalty, not the most profitable though. Look a little deeper and you may find that the customer is repeat purchasing due to lack of alternatives, or because the price is right. If they are staying with you because of price, they may leave if a competitor offers the same service at a lower cost. As Frederick Reichheld so eloquently puts it, ‘the customers who glide into your arms for a minimal price discount are the same customers who will dance away with someone else at the slight-est enticement.’ Of course, it’s still of benefit to the company if a customer is staying because of an attractive price. The most prof-itable customers however, are those that will refer friends, family etc..., ultimately becoming your marketers; with budget cuts in marketing departments, these are the customers you want. You want to reap the benefits of the loyalty ripple effect. Apostle like loyalists emerge from organizations that exhibit a behavior that mirrors this loyalty.

Linda Donegan

A

I would highly recommend a book called, the "Loyalty Link" by Dennis McCarthy. In this wonderful book, Dennis talks about the link between EMPLOYEE and customer loyalty. To paraphrase, if you focus on creating employee loyalty, you won't have to worry about cus-tomer loyalty—your employees will WANT to create the exceptional experience that leads to the loyalty you desire. Given that we cannot deliver the exceptional customer experience without our employees, this makes sense.

Steve Saenz

78% say great customer experience makes me loyal!

Loyalty 360 asked its members a series of questions concerning customer experience. Here's what you had to say.

30% Want You to Anticipate MY Needs21% Recognize ME21% Surprise ME

LOY

ALT

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13Loyalty Management™ • SEPTEMBER 2011

Loyalty Management™ • LOYALTY360.ORG14

LOYALTY FORUM: BEHIND THE BRAND

Through the years, Delta has maintained an amazing reputation. How do you think things are going after the acquisition of Northwest Airlines?

Over the last couple of years, Delta has invested heavily and IS investing more in the customer experience. This past year, we announced that we will be investing more than $2 bil-lion in improving the customer experience—whether that be in-flight entertainment on our long-haul aircraft, Wi-Fi on all of our mainline aircraft and larger regional planes, or fully flat beds in Business Elite. The combination of those investments, the work around fine tuning the customer experience and moving beyond to actually improve it, is where we’re heading

and what we’re focusing on right now.

How about the merger of the two loyalty programs?

Merging the two loyalty programs was definitely one of the top three challenges we faced within the integration of the air-lines. Customer expectations were high. And they wanted it to go as fast as possible. We moved really quickly to get it done.

The two largest pieces of that integration were the technol-ogy components and communications. The complexity of bringing two different reservations systems into one and two loyalty platforms into one, while transitioning 45 million program members from one program to the other was sig-nificant. And most important was communicating. We sent almost 100 million communication pieces (both direct and email) and repeated at least 20 times over and over “your miles are safe. Your elite status is safe. We will pool your fre-quent flyer program miles.” So you have to repeat it over and over again until the message finally sinks in. As many times as you hear it internally, doesn’t necessarily mean that it’s

resonating with the customer yet.

Why do you think the Delta SkyMiles program does so well?

If you look at a variety of metrics, we’ve fared well over the last four to five years. We look at customer satisfaction metrics compared to competitors, their customers’ percep-tions of their program and our satisfaction has improved. We

Jeff RobertsonVice President, SkyMiles - Delta Air Lines, Inc.

Loyalty Management™ • LOYALTY360.ORG

On behalf of Loyalty Management, Laura Hewitt of Carlson Marketing sat with Jeff Robertson, Vice President, SkyMiles for Delta Air Lines, Inc. Jeff supports Delta's efforts to provide high-value, world-class loyalty and partnership programs for the airline’s 81 million SkyMiles members worldwide. Now in its 30th year, SkyMiles is one of the largest and longest-running loyalty programs in the travel industry.

There are a variety of ways we are trying to improve the customer experience and most metrics would say it is paying off.

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011 15

also look at complaint volumes on the program through the Department of Transportation and actual internal customer complaints. Those are down significantly over the last three to five years. We are winning more industry awards (and there are a lot out there) than we have in the past, and I think it’s being driven primarily by our investment in our elite custom-ers. Our Medallion program and the elite experience are really driving that differential.

So it’s the things that we have done that attempt to dif-ferentiate ourselves; whether it’s introducing a new elite tier at 125k that has industry-leading benefits ( Diamond Medal-lion) or whether it’s rollover elite qualifying miles –and being the only one to offer that in the world. Customers love that – it came with 100% positive feedback from customers. We re-cently announced the non-expiration of frequent flyer program miles. So granted, for elites it wasn’t as relevant, but there are a lot of elites who stop flying and they don’t want to have to worry for 18-24 months that their miles will expire. We have eliminated reward redemption fees. Those types of changes are things we are doing to invest in the program. We are try-ing to get rid of the punitive nature of how airlines often are positioned. So there are a variety of ways we are trying to im-prove the customer experience and most metrics would say it

is paying off.

What can other industries like retail or financial services learn about customer loyalty from Delta?

I believe the travel industry probably does the best job in managing rewards programs AND loyalty programs all in one. There are things that we have done as an airline sector or ho-tel sector that if we could have started over again we would have done differently. And I think other industries have learned from that. I credit them for perhaps designing their rewards programs more linked to customer profitability than maybe our programs are linked. Where I do think they are failing, on a personal level, is in the loyalty space. I am a member of sev-eral high-end retailer programs. I receive rewards points and coupons and use them, but when I walk in the store or have any type of experience, I don’t feel that they’re appreciating my business more than anyone else. It feels like it’s just about the transaction. There is nothing programmatically that is driv-ing me to be more loyal to a particular retailer. That is where I

struggle with retailers.

How has your program evolved with the addition of social media/mobile/new technologies?

We have done a lot in the last 12-18 months to move more into the social area. We are also doing some small things that add up; like putting places on our web site to go to interact and talk to other customers, like creating places to interact with our staff online through the site.

We still do national advertising, but we’ve gone more digi-tal, much more online and targeted using the web site. We’ve made a big shift in what would have been hundreds of millions

Loyalty Management™ • LOYALTY360.ORG

we would have spent in advertising - now we’re much more in a targeted and social media place. We’ve hired a couple of folks exclusively for social media out there blogging, staying in the know, listening for news and seeing what customers think about us. We’ve increased our presence on Facebook and Twitter and our @DeltaAssist Twitter handle has proven to be both helpful and popular for customers.

What is your customer loyalty philosophy?From the baseline perspective, I think it’s important as an

airline or as any industry that we treat customers, employees and people fairly. Anything I do in my life, I always say I want to treat somebody fairly. It could be my friends, my employees, colleagues asking for the same thing and in many cases it is our customers. So, if a customer is asking something from me or wants to talk to me about something, and it’s reasonable and fair, the answer is always yes. If it’s unreasonable, unfair and would not be appropriate for all the other customers who have not called me to ask for that favor or question, then the answer

is no. Then I explain why it needs to be out of respect to others.In terms of “super” loyalty (those customers who would re-

ally die on the sword for you,) you have to go out of your way to show respect for that. From a customer perspective, it’s reach-ing out to them when they are in need and taking care of it. Or pulling that customer aside when they’re in the airport – and saying “hey, you’re at the gate, you’re a ‘Diamond,’ I am going to help you out. The agent can’t do it, but don’t worry, we will take care of it and make a call to get it fixed.” Those are the kind of things you have to do. I have seen customers do some un-believable things on planes before. When that happens, I will almost always go back and acknowledge that somehow and take care of them. Good deeds come back around. The elite experience needs to be fair, equitable and reasonable both bal-ancing customer interest and financial interest, but going out

of your way for customers who do go out of their way, as well.

continued on next page »

The Delta SkyMiles Gold Credit Card & Diamond Medallion Status Materials

Loyalty Management™ • SEPTEMBER 2011

16

LOYALTY FORUM: THE INSIDE SCOOP

Tell us about the last time you had an “ah-ha” customer experience.

A couple of years ago, a “Platinum Medallion” wrote me a letter telling me he was one of our top flyers on a flight from LA to Atlanta in First Class, waiting for the flight to depart, think-ing about all he needed to do when he got back home. The flight attendant announced there would be a delay for some very important passengers waiting to board the plane. He was annoyed. After about an hour, he was even more miffed. How-ever, he then realized the delay was to wait for two military guys coming back from Iraq who were boarding the plane. He recognized how petty we can all be sometimes over customer experiences or outraged about something that really isn’t as big of an issue. Really what we are doing is being human and doing what makes sense. Would a shareholder think we were

smart to hold up 180 passengers to wait for two? Probably not. But there are times in business you make decisions because you feel like they are right and you go with your gut. It makes a difference.

Another customer wrote to me and told us he was around a seven million miler – having been a Gold and Platinum Me-dallion customer over the last 30 years and had been with the program since its inception. He simply wanted to send a thank you to say “I was thinking about what you’ve done for me over the last 30 some odd years since I flew you. I am now retired and realize there were a lot of times where you did great things for me – customer experiences that were great, phone calls that were wonderful with your agents where you took care of me. And, there were bad experiences with the weather caus-ing cancellations when I was frazzled and not sure what to do, but looking back over 34 years, the only thing that really mat-tered was that you carried me safely across the world for 34 years, so that I can spend time with my family today, and my grandchildren can see me alive. To me, that’s the kind of story I want to read. Those are the things that make a difference and the reason why I come back to work every day.

What inspires you?Knowing that I can always do more inspires me and that

I can always improve upon the “existing.” Knowing that the business in which I work is constantly changing and knowing the expectations of customers go higher and higher, my own expectations of myself go higher. I’m also inspired to stay bal-anced, making sure to strike the right path, focusing on work and on what really is important in life; family and friends. Working for a company that I love, in an industry I love, work-ing for customers who I respect and appreciate, and having a good personal life is what inspires me to get up every day and go back to work.

Who has had the most influence in your life?It’s a great question and there is a quote from Alfred Lord

Tennyson who once said “I am part of all that I have met.” I think that’s sort of my philosophy in life. I am the culmination of what everybody has taught me and that’s what makes me unique.

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

Not working! One of the biggest disadvantages of being in a leadership position at any company is we never have enough time to spend giving back, so probably if I had the financial resources to be able to move on, I would give back to the com-munities somehow and dedicate what I think might be either the managerial experience, strategic advice or analytics or

anything that I have and use that for providing greater value back to society than necessarily through driving profit for a company.

What can we expect from Delta in 2011 and beyond?

I think having the merger behind us is now a competitive advantage. We can focus on our core business to move ahead. It’s about leadership, it’s about doing what’s right for Delta and I think you will see a lot of that. The same will apply to the frequent flyer program. We are looking at everything in our program to ensure we invest our money wisely. Are our most profitable customers happy with their experience? Are we truly business-focused? Are we more leisure-focused? And looking at a variety of those things, assessing where we want to go next to stay ahead of the competition is exactly where we will get ahead.

What have you learned from your experiences that could help others in the loyalty industry?

Never accept the norm. Never feel like you have to copy. Be a leader. Be a thought leader. Be thought provoking. Ask

“why it is that way?” If you get shut down every time you ask “why?” and people tell you “that’s because it’s the way it’s al-ways been,” leave. Don’t stay. Because you’re not valued. Push for what you think is right in a great company. The CEO and the highest leadership will have your back if what you are do-ing is right, appropriate and fair. And it makes sense. If anyone comes to work in my organization, those are the things I tell them – and I tell them not to be afraid to challenge me, just because I have been around for a while. L

Push for what you think is right in a great company. The CEO and the highest leadership will have your back if what you are doing is right, appropriate and fair.

Loyalty Management™ • LOYALTY360.ORG

SAVE THE DATE FOR THE 2012

march 18 - 20, 2012

www.loyaltyexpo.com

interested in speaking or exhibiting?

contact Erin Raese: [email protected]

ROSEN SHINGLE CREEK HOTEL

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&CLIENT RELATIONSHIPSfocus on maximizing customer, employee,

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Loyalty Management™ • LOYALTY360.ORG

Loyalty Management™ • LOYALTY360.ORG

Ask the Experts

Q&AQ:

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LOYALTY FORUM: Q&A

My company is a service provider and it has become necessary to update our pricing structure. We are currently evaluating our customer retention strategy to ensure we don’t lose our regular customers during this transition. What are your recommendations to help retain customers in today’s marketplace?

In the short term, leverage your ex-perience and customer data to help

identify those more or less likely to attrite and their corresponding lifetime value. Use the resulting segmentation to develop mea-sured save strategies that can be deployed to mitigate attrition, e.g., unbundling of services, down sell, staggered price increase, price lock with extended terms, special offer, other. You will want to be most aggressive with those high value/high risk customers compared to those low value/high risk customers. The former are critical while the latter may not be worth saving.

In the longer term, a strategy you may want to consider to complement your cur-rent efforts is what we refer to as “preemptive retention”. Simply put, preemptive retention looks holistically at customer relationships to determine opportunities to add additional val-ue that is both meaningful to consumers and affordable to the business. The strategy looks to extend the relationship beyond the service offering to help establish additional goodwill—

it is an investment in furthering the lifetime value of the customer and a forward-looking retention tool. It is different from most loyalty or reward programs in that it provides immedi-ate gratification or access to benefits without anything to earn.

There are a number of program configu-rations to consider to best align with your economics and demographics, but most will include the addition of lifestyle benefits that consumers can use everyday. You can use tac-tically for example as part of a new customer acquisition, award customers for length of service and/or deploy as a save technique to help combat a customer’s desire to cancel. Ul-timately, it is the experience with your service that counts but this can help to influence con-sumer behavior particularly when there are service hiccups, a not so good customer ex-perience, or even a price increase. It becomes part of the leverage to help you weather the storm as customers have a more defined rela-tionship and investment with you than just the services you provide. L

A:

—Michael PtakVP, Sales & Strategy,Teleformix, LLC

Preemptive retention looks holistically at customer relationships to determine opportunities to add additional value that is both meaningful to consumers and affordable to the business.

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011

In times of economic challenges that leave many households bud-

geting conservatively, it becomes im-perative to reinforce the value of services provided. This can be done by answering three key questions:

1. Who is receiving the value?2. What will be the perceived value?3. How is the value communicated to the intended audience?Understand the customer audience

to the best level data resources allow. Identify key segments of that audience to have a better understanding of how core customers may react to a strategic deci-sion. If data is limited, look into answer-ing why. Are the right mechanisms not in place to collect it? Are there technical limitations that are being worked around? Are there short term solutions that can be implemented to give customers a voice- a survey, Twitter or a Facebook forum? Look for key indicators like length of time as a customer and demographic information including income and age. Are there any audiences that it is cost prohibitive to pro-vide service to? Can service or value be

differentiated by the audience segments created? Will the value being proposed change the response model for any of the audiences?

Enhancing the value of any retention strategy must be relevant to the audience and ideally unique to the service provider. Providing something that another com-petitor can’t gives more reason for the customer to stay with a particular service. Be the customer and brainstorm about the process a customer goes through and

A:

—Natalie BeanStrategy Manager Customer Loyalty | Partnerships,The Boston Globe

A:Price increases are like death and taxes—often they are unavoidable.

I think your first question is going to be how proactive do you want to be with your existing customers? You may choose to just increase prices and "not make a big deal about it", or you may want to proactively reach out to your existing customers ahead of time to allow them to prepare for the increase. This is not an easy decision, and it depends on a number of specifics to your situation, but I feel a pro-active and transparent approach builds long-term retention.

You should also be prepared for two questions custom-ers always ask:

•Why did the price go up? For example, your costs could have increased because the costs of materials or ser-vices you use have gone up. Regardless of the reason, I think it is important to think through explaining the cost increase to the customer. If you are unable to explain the reason, the customer will assume you are raising prices just to increase profit at their expense.

•Is there any way for me to lower the price? Offering your customers options for savings is always helpful. For ex-ample, can they change the way they do business with you to save money? Even if you are unable to lower a customer price back to the level it was before, custom-ers will give you credit for trying to react to their needs.

—Bart BlackburnMarketing Process Manager, Progressive Insurance

Offering your customers options for savings is always

helpful. For example, can they change the way they do business with you to save money?

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Be the customer and brainstorm about the process a customer goes through and ask where can the value get added?

Despite all efforts, I would expect your price increase to neg-atively affect your retention. Any price increase draws the atten-tion of the customer and they are more likely to shop around to make sure they are still getting a good deal.

One final point: customers are not always logical about price increases. A price increase from $85 to $102 will hurt retention more than increasing the price to $97. Crossing "psychological thresholds" such as $100 draws a lot of attention from your cur-rent customers.

ask where can the value get added? Are there any small conveniences that could be provided, and enhance the customer experience? E-mail communication is cost effective and thank you or custom-er appreciation messages can create a positive experience. Keep the concept of surprise and delight in mind when deter-mining what offers are being evaluated to add value and drive retention. Having a communication channel that reaches customers will is essential in how value is perceived.

After answering the three questions, compare the results to the existing value offers. Decide what can afford to be test-ed and if anything extensive can be done to test the new offers before going to mar-ket. And be sure to review the existing values, new values and evaluate or test as offers mature. L

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Loyalty ReadsLOYALTY FORUM: BOOKS

Loyalty Management™ • LOYALTY360.ORG

The Amazement Revolution: Seven Customer Service Strategies to Create an Amazing Customer (and Employee) Experience by Shep HykenGreenleaf Book Group | April 2011

What is the amazement revolution? It is the culture that can drive any organiza-tion—from one employee to tens of thou-sands—to focus completely on delivering an amazing customer-service experience

In this sequel to the Wall Street Jour-nal bestselling book The Cult of the Cus-tomer, Shep Hyken shares seven powerful strategies that any organization can im-plement to create greater customer and employee loyalty. In a tough, competi-tive, and price-sensitive economy, cus-tomer service is one of the most essential tools to separate your business from the

competition. These strategies work, as evidenced by the more than seventy case studies and examples that Hyken shares throughout the book. These examples provide dozens of lessons that can and should be implemented immediately.

Corporate and industry clients from all over the world have tapped into the exper-tise of Shep Hyken. His client list is a who’s who in the business world. As an author and speaker, Hyken is known for his sim-ple and direct strategies that help his cli-ents build successful, customer-focused organizations.

Customer Service: New Rules for a Social Media WorldBy Peter ShankmanQue | December 2010

Use Social and Viral Tech-nologies to Supercharge your Customer Service!

Using social media, you can deliver amazing cus-tomer service–and gener-ate an army of fans who’ll promote you in good times,

and rescue you from disaster. Now, legendary online market-ing expert Peter Shankman shows you exactly how to do all that–without spending a fortune! Shankman draws on his im-mense experience as founder of the online growth company HARO and marketing consultant to multiple Fortune 500 cli-ents. He presents straight-to-the-point solutions for building customer loyalty, trust, and credibility online–and rebuilding it when catastrophe strikes. Companies around the world are driving enormous value from online customer service at re-markably low cost. You can, too. Peter Shankman will show you how–step-by-step, right now!

Books to Know About NowBOLD: How to Be Brave in Business and WinBy Shaun Smith & Andy MilliganKogan Page | June 2011

Renowned brand-experts unveil secrets of the brav-est companies in the world and what makes each business epic.

Shaun Smith and Andy Milligan’s new book, BOLD: How to Be Brave in Business and Win, which hit U.S. bookstores on June 1st, offers in-depth, one-on-one ‘interviews’ with executives from fourteen of the worlds’ most elite and well-known brands—including Burberry, Umpqua Bank, Virgin Galactic, The Geek Squad, World

Wildlife Fund and Zappos. The results reveal unique company cultures, innova-tive marketing, dynamic customer experiences and purpose-driven profits. That’s right; these fourteen featured companies put purpose before profit. BOLD is the story of companies who ‘do it their own way.’ The book highlights how building brands is now about completely rethinking the end-to-end experience and rede-fining the customer-company relationship.

“More than ever, business success depends on standing out from the crowd and delivering authentic, memorable experiences for your customers and em-ployees,” says Smith. “BOLD offers all readers a C-suite, birds-eye look at compa-nies that are brave enough to challenge industry norms and relentlessly differenti-ate themselves.”

Loyalty Management™ • LOYALTY360.ORG 21Loyalty Management™ • MAY 2011

The Social Media Business Equation By Eve Mayer OrsburnCourse Technology PTR | April 27, 2011

Facebook, Twitter, LinkedIn, and YouTube™ have changed the way consumers communicate today and businesses today must be a part of this so-cial phenomenon or risk losing significant mar-keting opportunities. The Social Media Business Equation: Using Online Connections to Grow Your Bottom Line clearly demonstrates how you and your organization can use social media to unlock exponential growth and immediate opportuni-

ties, no matter what your business size or industry. Author Eve Mayer Orsburn, CEO of one of the largest social media optimiza-

tion companies in the world, introduces a proven, step-by-step methodology -- The Social Media Equation™ -- in this quick, practical read. Fourteen case studies highlight social media at work in companies large and small, including the Mayo Clinic and General Motors. This book focuses on results-oriented strategies as the author dispels the myths and reveals the true secrets of using social media for amazing business growth.

This book presents practical, useful insights and proven successful tech-niques that readers can immediately apply. The Social Media Business Equation's clear presentation provides early emphasis on the growing importance of social media today to help readers fully understand the impact of social media on mar-keting results today.

Kiss Your Customer:

77 Reasons Why Sales & Service Are Just Like Dating & Relationships.By Andy MastersHawthorn Publishing | January 2011

Kiss Your Customer is a "business humor with a pur-pose" book which provides

the ultimate "learn through laughter" experience for sales and service professionals. Author and international speaker Andy Masters takes the reader on a journey through the highs-and-lows world of relationship-building, utilizing the clever irony between business and romance. Common principles include

"Never Underestimate the Power of First Impressions", "Have a GREAT Sense of Humor", "Maximize the Internet & Social Media", and "Know How to Build A Long-Term Relationship". Andy's creative and insightful spin on proven principles im-pact sales and improve customer loyalty, while also enhanc-ing our personal lives. Enjoy this entertaining and impactful treat.

The Customer Experience Edge By Reza Soudagar, Vinay Iyer, and Dr. Volker Hildebrand McGraw Hill | September 2011

One of the most important strategic priorities for most companies is providing customers with a positive and differentiated ex-perience, but few achieve this goal, according to a survey commissioned as part of the research for the new book, The Customer Experience Edge: Technology and Techniques for Delivering an Enduring, Profitable and Positive Experience to Your Customers, to be published in the fall 2011 by McGraw Hill.

However, while a great customer experience may be the imperative, it is difficult to deliver a great customer experience to a lot of people and achieve profitable outcome. Indeed, trying to delight all customers all the time, or aiming only at increasing customer satisfaction scores or following traditional paths of focusing only on a select group of customers, can result in a costly, unsustainable project that falls short.

This book fills the gap. It provides actionable insights about how companies can improve their customers' experience in a way that supports their bottom line goals. The authors explain, using scores of case studies, surveys and comments from leading practitioners, how to develop a profitable customer experience program by combining strategy, leadership and organizational change with the smart use of technology.

The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven WorldBy Fred Reichheld (Author) & Rob Markey (Contributor)Harvard Business Press; Rev Exp edition | September 2011

In the first edition of this landmark book, business loyalty guru Fred Reichheld revealed the question most critical to your com-pany’s future: “Would you recommend us to a friend?” By asking customers this question, you identify detractors, who sully your firm’s reputation and readily switch to competitors, and promoters, who generate good profits and true, sustainable growth.

You also generate a vital metric: your Net Promoter Score. Since the book was first published, Net Promoter has transformed companies, across industries and sectors, constituting a game-changing system and ethos that rivals Six Sigma in its power.

In this thoroughly updated and expanded edition, Reichheld, with Bain colleague Rob Markey, explains how practitioners have built Net Promoter into a full-fledged management system that drives extraordinary financial and competitive results. With his trademark clarity, Reichheld:

• Defines the fundamental concept of Net Promoter, explaining its connection to your company’s growth and sustained success

• Presents the closed-loop feedback process and demonstrates its power to energize employees and delight customers• Shares new and compelling stories of companies that have transformed their performance by putting Net Promoter at the center of their business

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Thirty Years of LoyaltyAs Affinion Loyalty Group celebrates their thirtieth anniversary this year, we reflect on how the loyalty industry has changed and grown during the past three decades!

By Mark Johnson – Loyalty 360

uring the past 30 years, Affinion Loyalty Group (ALG) has become a powerhouse in the loyalty space by believing that this mantra, “Converting Customers into Fans,” is key to their clients’ success.

Thirty years is a long time. And in an industry as dynamic as loyalty marketing—rife with rapid change, consolidation, influ-ences of governmental regulation, and a confluence of social, mobile and other media—30 years is an eternity.

Launched in 1981 as National Card Control, Inc., Affinion Loyalty Group has grown into an industry thought leader and driver by listening and responding to the market. Whether its leadership team is moderating panel discussions at trade shows, conducting webinars, or developing new products, ALG keeps, and often sets the industry’s pace.

ALG’s beginnings in the loyalty industry are worth reflec-tion. In the early 1990s, credit card issuers that had co-brand-ed relationships with airlines dominated the loyalty space. The idea of a bank-owned and bank-controlled loyalty currency was new and there wasn’t a system in the marketplace that could provide it. Identifying this need, ALG developed a pri-vate-label loyalty program enabling a bank to effectively cre-ate its own currency and build its brand. These non-cobranded loyalty programs allowed banks to differentiate themselves from competitors and in so doing, segment and expand their customer bases.

Today, in 2011, as ALG launches the Bank of America Value Portal platform, the company remains focused on delivering the kinds of technology-driven solutions that will ensure their clients’ success for years to come. ALG remains at the forefront of the loyalty industry as they monitor the latest work in the areas of engagement, digital convergence, the neuroscience of

behavior, enhanced behavioral modeling, proxim-ity marketing, and multi-channel communication management. Employing that depth of knowledge, ALG will design loyalty solutions around technolo-gies (social, mobile, NFC) to create the next-gener-ation loyalty and engagement marketing platforms.

The key to future success will be enabling choice. Customers’ ability to choose their relation-ship and interaction with a brand based on their needs and wants will increase the effectiveness of the one-to-one marketing platform.

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Customers’ ability to choose their relationship and interaction with a brand based on their needs and wants will increase the efficacy of the one-to-one marketing platform.

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Converting Customers Into FansAs Affinion Loyalty Group (ALG) celebrates its 30th anniversary, Scott Lazear, President, reflects on the early years, the current business climate and initiatives, and what he sees on the horizon:

Our tagline at ALG is Convert-ing Customers Into Fans. Simply, that’s what we have worked to do for the last thirty years—cre-ate fans of our clients’ brands. There is no great-er compliment that clients can give than when they trust you with their brands. In our clients’ programs, points redemption typically leads to even higher earnings per account, as customer loyalty and usage increases after a redemption. This is a major indicator of engagement and loy-alty to a brand.

As financial institutions have been faced with the evolution of their loyalty programs, ALG has assisted them in numerous ways, from finding delivery channels to forging strategic rewards partnerships to expanding into new areas such as social media.

Our success is a tribute to our strongest asset, our employees. The unwavering dedication and tenacity of our employees, both past and present, has built and maintained our pioneering spirit and industry leadership.

—Scott Lazear, President, Affinion Loyalty Group

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Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011 23

The S&H Green Stamp program—one of the earliest efforts to win the hearts, minds and wallets of customers—was launched. Just how popular was the program? S&H Green Stamps once issued three times as many stamps as the US Post Office, and by the 1960s, S&H was the largest purchaser of consumer products in the world.

General Mills launched its long-standing Betty Crocker Points Program in which custom-ers collected points which were redeemable for kitchenware from a catalog.

The process of attaching a magnetic stripe to a plastic card was invented by IBM under a contract with the U.S. government for a security system. This would later have a huge impact on loyalty card data integration, prepaid, member cards, and most obviously credit cards and credit card rewards.

Affinion Loyalty Group started as National Card Control, Inc. (NCCI) in 1981 by Wes Hall. At that time, banks were implementing fees on credit cards and Wes recognized the need for financial institutions to retain customers and build customer loyalty.

American Airlines introduced AAdvantage, one of the most renowned customer loyalty programs in which the company tracked how many miles each member flew and

offered free tickets and upgrades to frequent customers. United, Delta and TWA all fol-lowed suite later that year.

Hotels initially partnered with airlines in customer loyalty ventures, but many eventually started their own initiatives as they discovered the power of the programs and the costs of participating in those hosted by airlines. In January, 1983, Holiday Inn launched the hotel industry’s first loyalty program, and was followed by Marriott later that year.

-Catalina marketing started in 1983—and would become the backbone for grocery and CPG loyalty

Diners Club introduced the first credit card linked to an airline loyalty program—a move destined to have implications almost as significant as the launch of FFP’s themselves. To-day, there is one or more credit cards affiliated with virtually every travel loyalty program.

LoyaltyOne launched its pioneering coalition loyalty program

AT&T launched the first credit card rewards program, providing cash back on purchases which could be used toward the account holder’s phone bill

-The first smart phone, IBM Simon, was released to the public and sold by BellSouth. By 2011, 75 million Americans use smart phones—33% of all mobile phone users. This inven-tion will take customer loyalty programs well past simple punch cards.

Neiman-Marcus launched the industry-changing InCircle loyalty program—formalizing Stanley Marcus’s industry-changing strategy to integrate branding, customer service and promotions into a customer loyalty strategy.

Internet was commercialized when NSFNET was decommissioned, removing the last re-strictions on the use of the Internet to carry commercial traffic—and, the world of loyalty marketing was forever changed.

-The launch of Linkshare in 1996, ebates in 1998 and UPromise in 1999 brought the start of the "merchant-funded" loyalty concept

Points.com was launched, enabling customers to manage their loyalty memberships, learn about new promotions, and exchange points and miles between programs.

Apple introduced the iPhone. Although cell phones started carrying GPS in the mid ‘00s, the debut of the iPhone allowed third-party applications to develop programs to take ad-vantage of built-in satellite positioning—fueling the growth of geo-based loyalty programs.

New technologies such as QR codes, analytics, and data mining tools, are poised to take customer loyalty programs to the next level. These and others allow the “gamification” and social network integration of loyalty marketing programs at a level that was impos-sible just a few years ago.

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19311960

1981

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200020072010

…and beyond

THE HISTORY OF LOYALTY A look back at the evolution of the modern day loyalty programLoyalty programs have changed the way consumers interact with the companies from which they purchase products or services. Fast forward some 100 years since the first initiatives were launched, and companies now spend more than $2 billion on loyalty programs annually. More than 75% of consumers, according to Jupiter Research, are enrolled in at least one loyalty program, and the number of people in two or more is estimated to be one third of the shopping population. Here’s a brief look at some of the key milestones in the evolution of customer loyalty programs:

vintage Betty Crocker advertisement

first National Card Control advertisement

Neiman- Marcus InCircle advertisement

points.com

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ow can we better connect our business partners to our goals, messages and brand?”

It’s a question that has been asked time and time again. While the problem is nothing new, the uncertainty brought on by recent economic turmoil and inten-sified competition has added urgency to the need to create strong, lasting bonds with your most valuable sales channel partners. Adding fuel to the fire is the continuing decrease in engagement by partners that you rely on to represent your brand to customers in the channel.

From a customer perspective, today’s “New Normal” business environment has brought with it a new set of expectations, among them the desire for greater transparency, trustworthiness and the delivery of value that benefits all to cre-ate both better business and better lives.

Clearly, fresh thinking is needed. The influential management academic Henry Mintzberg provides important insight when he says: “Companies must remake themselves into places of engagement. People are social animals who cannot function without a social system larger than ourselves.” In fact, one way that companies are beginning to realize the power of social interaction among their key stakeholders is by creating brand communities.

What do we mean by “community?” Online or offline, a community is a group of individuals who share common values, interests and sense of purpose. And, remembering that channel partners are people first, communities offer the opportunity to connect in a supportive social environment to create relation-ships that serve as resources to advance individual members both profession-ally and personally.

Engaging Partners through Communities in Today’s “New Normal”by Melissa Fruend, Maritz Loyalty & Motivation

Loyalty Management™ • LOYALTY360.ORG

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Reframing How We Look at Business PartnersAs we all know, companies usually have very specific

objectives when it comes to their channel partner rela-tionships. These typically include:

•Improve vendor/partner business relationships•Ensure competency and focus•Improve sales capabilities•Grow business for both paritiesWhen thinking about creating a brand community, it’s

helpful to not only begin with the frame of shared inter-est and stretch to grow beyond the transactional nature of most partner relationships. Building a community can enable channel partners to build more personal relation-ships with individuals from across your organization who best represent your brand. And, possibly just as impor-tant to your partners, a community also enables them to build their personal network of peers for the purpose of learning and collaborating in ways that they’ve perhaps not been able to do before.

For this reason, it’s critical to begin planning with a deep understanding of what channel partners would val-

ue most as an outcome of their participation. One way to capture this insight and provide a mechanism for guiding the overall “gover-nance” of the community is by establishing an advisory panel selected from a cross-section of partner business types. Such a group can provide insight on what content and practices will effectively engage com-munity members and help establish guidelines for how members will interact and in what venues.

Putting Communities into Practice

In order to build a com-munity that engages people and builds sustained loyalty, we must personalize the ex-perience. Communities are launched every day, but we believe the most success-ful share the five following characteristics:

1. People First: Channel partners and their employ-ees are PEOPLE first, so build it for THEM not for you. This means taking the time and effort to under-

stand what they value most from their relationship with you – and where they see benefit in connecting with their peers in other organizations with similar interests. Begin by putting the partner in the center of your community strategy and you’re on the right path.

2. Brand Effect: Community will be perceived as an ex-tension of your brand. So, while the community is not ALL about your brand, your brand represents the central, unifying component. Sometimes, when communities are launched they look and sound very different from core brand values, creating dissonance with brand messaging and confusion around the shared purpose of the commu-nity itself. The lesson here is to make sure brand values are consistently represented in all virtual and offline com-munity touch points.

3. Enrich while you Educate: While the first step is to de-fine what is meaningful and motivating to your partners, it’s equally important to be diligent in your efforts to sup-ply valuable content … with frequency. This is one of the biggest challenges for companies but it doesn’t have to

When we think of communities, we usually associate with online, but studies show that the face-to-face interaction can contribute greatly to the experience.

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be. Who are your thought leaders in product, education and sales? Enlist these experts and develop an integrated content calendar. It can also be very productive to solicit content ideas and input from organizational resources out-side of marketing’s domain. Don’t underestimate the hid-den desire of others to contribute if given the opportunity

– or the value to your channel of hearing from voices out-side of leaders, experts and marketers. Outside and third-party resources can also be highly-valued by community members—based on areas they’ve identified for learning or business development.

For example, Maritz designed a targeted communica-tions platform to support and elevate engagement rates in an already existing incentive program. As expected, these communications increased overall engagement rates; how-ever, the introduction of a blog by a company expert, who happened to be named Cindy (her real name) with a photo attached (her actual photo) gave the company the impact they were looking for. Cindy established her reputation as a caring, smart technical expert who the partners came to know and trust as a positive representative of the brand.

4. A Case for Face-to-Face: When we think of communi-ties, we usually associate with online, but studies show that the face-to-face interaction can contribute greatly to the experience. Consider including the opportunity for both

virtual and face-to-face community interactions. A suc-cessful channel community might include frequent oppor-tunities for regional conferences and an annual conference.

For example, a large software company sought Maritz’ assistance in creating immediate sales momentum for a new product. The company hosted a meeting that had three core objectives:

•To expand audience reach past a one-city stand-alone meeting

•To ensure presentation of a consistent message by con-necting product experts and senior management with key business partners

•To make it memorable but keep it cost-effectiveThe solution was to host a live satellite broadcast and

dinner event in 21 cities. This approach enabled both the delivery of high-impact product information and the op-portunity for partners to network with local sales leader-ship and reseller partners face-to-face and virtually. The result was a tenfold increase in the number of resellers participating.

5. Create a “go to” Place: Utilize game science and so-cial networking to elicit active participation and a general feeling of “fun” in your community. Game science is one design approach to leverage the basics of neuroscience and the growing social gaming trend. The power of games

Contact SVS to learn how to increase sales with our state-of-the-art loyalty platform. Call 502-326-4600 or visit us online at www.storedvalue.com.

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to motivate and shape consumer behavior is well known. Games tap into our primal urges for competition, status, reward, achievement, prestige, social interaction and skills mastery. And any experience that heightens the emotions sticks in our memory, shapes our attitude and contributes to greater engagement. Communities are also an opportu-nity to build the status as a reward to those most willing to participate and share their ideas and best practices.

Giving members of the community the opportunity to not only respond to the content you provide but provide their own perspectives, ideas and success stories is a criti-cal success factor for any healthy community. And, as you begin to build a two-way communication with member-ship, you will receive great feedback on what’s important to them and adjust accordingly.

Today’s ever-changing business environment and peo-ples’ desires for greater connection are the driving forces behind the need to refresh traditional practices to better engage channel stakeholders. Building communities based on the mutual benefits inherent in advancing business and personal capabilities represents a powerful tool for today’s marketer. It all begins by remembering that channel part-ners are people first and their desire to create a network of valuable relationships and to be recognized for their contri-butions with increased status can benefit your brand in a myriad of ways over time. L

Affinity Solutions delivers innovative loyalty solutions to financial institutions worldwide. We develop online and offline relationship marketing programs by integrating merchant-funded, bank funded, and enterprise reward solutions.

• Customized loyalty platform • Accelerated merchant-funded earning of rewards • Strategic consulting • End-to-end portfolio management platform • FI decisioning engine • Multi-channel, targeted marketing

Our customized programs deepen customer loyalty, improve acquisition and retention, boost card usage, and increase revenues. Learn more about what we can do for your financial institution today.

Think Outside the Bank.

INTELLIGENT PARTNERSHIPS. SMART SOLUTIONS.

Hear Melissa explore this topic in "The Game Has Changed: Engaging Partners in the New Normal" at the Engagement Expo with Stacy DeLong from the HON Company.

28

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What Do Affluent Customers Want From Their Loyalty Programs?

What Do Affluent Customers Want From Their Loyalty Programs?by Linda Dickerhoof, VIPdesk

ver 50% of all household spending in the United States—$4.2 trillion annually—is attributed to affluent consumers. In addition, according to the U.S. Census Bureau, affluent consumers spend 2.5 times more than the average consumer—annually, the average U.S. consumer spends approximately $50,000, while the top affluent consumer spends over $124,000. As such, the affluent demographic has become one of the most sought-after by loyalty marketers due to the increased spending ability they possess.

In order to discover what affluent customers want from their loyalty programs, it is necessary to look at their overall motivators. Charles Christianson, VP of Sales and Marketing with Affinion Loyalty Group and Mark Robeson, VP of Mar-keting and Strategic Accounts with VIPdesk, recently presented a webinar for Loyalty 360 members, “What Do Affluent Consumers Want From Their Loyalty Programs?” In this webinar, they outlined a “motivation formula” highlighting the drivers of brand loyalty for this market:

In order to understand the affluent market, you must understand who they are as consumers, what they value, how they behave, and empower them. Empowerment is what affluent consumers want from a loyalty program. In return, they will seek you out, trust you, be loyal to your brand, and rave about you to others.

Who Are Affluent Consumers?Affluent consumers, defined by the U.S. Bureau of Labor Statistics, are households that earn $100,000 or more. Ap-

proximately 22% of U.S. households (25.4 million households) are classified as affluent. The affluent demographic can further be broken down into five segments:

1. Aspirational mass market: trendy metropolitans, tend to have average jobs and backgrounds but aspire to an above-average lifestyle.

2. Rising middle class: middle-class background with well-paying jobs.3. New money: high net-worth consumers who earned the wealth themselves.4. Old money: high net-worth consumers who have inherited their wealth.5. Beyond money: similar to old money, but these consumers have a complete indifference to status, avoiding ostentatious

displays of wealth.

Loyalty Management™ • LOYALTY360.ORG

Approximately 22% of U.S. households (25.4 million households) are classified as affluent.

continued on next page »

When looking at the affluent consumer, it is necessary to cast aside stereotypes often seen in the mass media. First and foremost, looks can be deceiving—the outward appearance of affluent consumers rarely reflects their spending ability or net worth. Instead, the average affluent consumer—especially in the higher net-worth subsets of this demographic—is the antithesis of the stereotype that you see in the media. They tend to live below their means, drive domestic cars, wear less expensive clothes, and drive less expensive automobiles than you would imagine.

Values of the Affluent ConsumerAffluent customers value luxury, but it must be luxury that is worth

the price. Given that much of the net worth of affluent consumers re-sides in the stock market—which lost 2.4 trillion dollars in 2007-2008—it is no surprise that this demographic values a good deal.

Affluent consumers are more likely than the average consumer to use coupons. With this demographic, there is no stigma related to coupons or discounts—on the contrary, coupons can be viewed as rep-resentative of a new status symbol of fiscal responsibility. Along with coupons, the prevalence of group-buying sites such as Groupon and Living Social has not gone un-noticed by the affluent market—instead they are embracing this trend. One such example is group buying site, Gilt.com. Gilt has been very successful targeting luxury consumers with discounts on premier quality fashion, housewares, and travel items.

Affluent customers also value quality service, as shown through the success of retailers Nordstrom and Zappos, both of whom are known for their customer service. The importance of quality customer service to this demographic is shown in recent research from Harvard Business School to indicate that affluent consumers are likely to be the first to switch allegiances to a competitor providing superior customer service. This research also shows that even though high-end custom-ers can be fickle, a company that sustains a superior service position in its local market can attract and retain customers who are more valu-able over time.

Behavior of the Affluent ConsumerThree behaviors of the affluent consumer that should

be taken into consideration by loyalty marketers are brand loyalty, online/mobile savvy, and travel focus.

1. Brand loyal. The affluent are far more likely to look for brand names than other demographics—as long as it is a brand that is providing a product or service that is worth the price. Not unsurprisingly, given the importance of service to this demographic, brands that provide a stellar customer service experience are the most likely to gain and maintain brand loyalty from the affluent consumer. This is especially true in the travel and hospitality indus-tries, where brands such as Starwood and Marriott un-derstand the importance of service to keeping long-term brand loyalty, which is shown through their service-cen-tric loyalty programs.

2. Online and mobile savvy. Affluent consumers want to simplify their lives with technology, while still obtaining a high level of service regardless of the channel they use. A recent survey of millionaires from Fidelity Investments shows that 85% use text-messaging, smartphone applica-tions and social media—proof that this demographic is wired across the spectrum of channels offering online and mobile content and customer interaction.

3. Travel Focused. The affluent demographic is travel fo-cused—82% of affluent Americans took a domestic vaca-tion or personal trip in the past year. As such, this market values a loyalty program that can help them make travel easier. Brands such as the American Express Platinum card and the Merrill Lynch Beyond Rewards card are responding by offering travel-focused benefits including priority international lounge access, room upgrades, and dedicated Concierge service.

Loyalty Management™ • LOYALTY360.ORG 29Loyalty Management™ • SEPTEMBER 2011

Non-affluent households

Portion of U.S. households classified as affluent*

Top affluent consumer units$150,000+

All U.S. consumer units

$50,486

$124,678

Average annual spendingper consumer unit

Portion of U.S. household spendinggenerated by all affluent households

Affluence in the U.S.

Sources: Packaged Facts, U.S. Bureau of Labor Statistics, U.S. Census Bureau GRAPHIC BY ALG BRAND COMMUNICATIONS

Note: Consumer units include families, single persons living alone or sharing a household with others but who are financially independent, or two or more persons living together who share expenses.

*Households earning $100,000 or more in 2008

All affluenthouseholds

22%

Non-affluent households

$4.2 tril.

25.4 mil.52%

What Do Affluent Customers Want From Their Loyalty Programs? (continued)

30

Empowering the Affluent ConsumerAffluent consumers seek out loyalty programs that will

empower them in a way that is different from the rest of the marketplace, meeting these needs:

•Help me feel less busy. Affluent consumers want a loy-alty program that will help them feel less busy—this is a demographic that won’t use a service if they can just as easily do a better job themselves. Remember their pref-erences, which will save them time in the future. Offer online and mobile access to program features. Provide program features such as Concierge service specifically designed to make them feel less busy.

•Give me exclusive access. This is a demographic that val-ues luxury that is worth its price. A loyalty program that stands out from the crowd, providing access and expe-riences that they can’t get anywhere else is certainly a luxury that is worth the price.

•Provide holistic services. The affluent demographic values service, especially holistic service. Make sure to ask them the right questions, and anticipate their needs. Offer flexible redemption options through a “one voice” single point of contact.

•Make me feel truly special. The ultimate way to empow-er the affluent customer through a loyalty program is to make them feel special. A personal touch, exclusive ac-cess, and stellar customer service all combine to do just that—provide an interaction that makes your customer feel valued, and thus value your service. L

Loyalty Management™ • LOYALTY360.ORG

Survey Reveals Exceptional Customer Service Most Important Aspect of Customer Loyalty for Affluent Consumers

Over 50 percent of loyalty marketers identify exceptional custom-er service as the most important aspect of customer loyalty programs geared towards affluent consumers, according to a survey conducted by Affinion Loyalty Group and VIPdesk during their recent webinar.

Survey results include the following:·57% find exceptional customer service to be the most impor-tant aspect of customer loyalty programs geared towards afflu-ent consumers

·44% identified exclusive rewards or concierge service as the most important aspect of customer loyalty programs geared towards affluent consumers

·52% believe that affluent consumers are most influenced in their customer loyalty decisions by recognition/personaliza-tion

·32% find affluent consumers most influenced by desire for ex-clusive access

·15% feel this demographic is most influenced by desire for sta-tus

Loyalty 360 members can access a recording of the webinar, “What do Affluent Consumers Want from their Loyalty Programs?” at Loyalty360.org.

*

Loyalty Management™ • LOYALTY360.ORG

Pay ment s n Processing Ser v ices n R isk & Compl iance n Cus tomer & Channel Management n Insight s & Opt imizat ion

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of your loyalty program from strategy and analytics to creative and production. With Fiserv you have the power to win your

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n recent months I’ve had in-depth discussions with consumer products marketing teams, es-pecially within the packaged goods sector. Our conversations revolve around what type of loy-alty marketing strategy, if any, can be developed to help them identify best customers, grow their business and ultimately increase patronage and loyalty toward their brand. Most of these brand stewards admit they don’t know what they want to do, but they want to do something. CPGs want to establish strategies based on unique insights into their customer base, but the distribution channel makes connecting with customers dif-ficult. It is the classic CPG loyalty marketing di-lemma.

As the digital frontier has emerged, it is safe to say that most of these brands have developed some type of online community, social network presence or consumer friendly web site. Some customer specific data is being captured, which is then added to an existing database of promotion-al responders, customer service inquiries or war-ranty card registrations. Despite these resources, the vast majority of a CPG brand’s customer base remains invisible on an individual level.

Will putting up Facebook pages and gener-ating a few thousand “likes” get the CPG brands into the loyalty game? Like everything else about Facebook-related marketing and social media, it is only one tactic, a single prong that in and of it-self will not create an integrated loyalty strategy.

While most travel, financial, retail and tele-com loyalty programs around the world use a points based model, or some variation of it, many CPG companies avoid it like the plague. The unique needs of CPGs warrant a closer look at a model that addresses their different needs—one that provides the benefits of a loyalty program without the liability they believe points create for their industry. Simply put, accrual-based loyalty programs are not designed to drive incremental behavior or brand loyalty with the CPG industry. They claim points are stale and they seek fresh.

The Consumer Packaged Goods Dilemm aby Carlos Dunlap, Kobie Marketing

I

Loyalty Management™ • LOYALTY360.ORG

In addition, CPG firms experience a disconnect between tracking individual purchase behavior in traditional accrual-based programs. This disconnect occurs as a result of being separated from the end user by the distribution channel and the retailer. In fact, many consumer product companies struggle to implement strategies that will identify the individual’s value, po-tential and attrition associated with the brand or with the larger enterprise.

Given this model, the historical CPG “loyalty” program has been communications-based. New media and digital en-vironments have accelerated this approach, but most of the communications have followed old patterns of push market-ing developed for older technologies and media by traditional advertising agencies. Few brands have embraced the power of true consumer dialogue. Customer engagement offers real opportunity, but the implementation of such programs can be very hard to execute. Primary consumer research is useful in un-derstanding broad trends, target audiences, demographic and attitudinal segments, however it fails to deliver CPGs person-able snapshots of their most valuable customers—those who buy more and inspire others to adopt their brand. Scanner data and associated panel information can yield extremely valuable metrics around marketing actions, but fall short in helping them identify the individuals who are responsible for the action’s suc-cess or failure.

The Consumer Packaged Goods Dilemm a

Loyalty Management™ • LOYALTY360.ORG 33Loyalty Management™ • SEPTEMBER 2011

Today, enabling technologies can be leveraged to help CPG brands evolve from a mass marketing approach to a highly seg-mented strategy based on individual behaviors and desires. The consumer today will embrace such an approach if something of value is offered in return. Delivering on the WIIFM (what’s in it for me) is the secret ingredient to any great loyalty strategy. To complicate things, the definition of value varies from person to person. The delivery of relevant value, the two-way deliv-ery/collection of information and the corresponding engage-ment chain that can result is possible today via the web, social networks, mobile devices, tablets, kiosks and other interactive devices. But the consumer is not going to play, at least not play the traditional loyalty marketing game, unless the CPGs create a true value exchange.

What type of value can be offered? 1. Taking another look at points, or similar manner of keeping score of the consumer, may be the natural place to begin. Points work for some brands and clearly offer an accelerated benefit across a family of brands within an enterprise because they re-flect the individual value of each participating consumer. 2. If you need to avoid liability, you may want to consider an auction-based currency, which allows consumers to bid on meaningful, experiential rewards where the CPG can control the budget, timing and size of the reward. 3. In addition, you may want to consider targeted sampling, or participation in research surrounding new products. Addition-ally, special privileges extended by the brand—access to some-thing, even if it costs the consumer money—can be a powerful motivator when demand exceeds supply. 4. Another strategy to consider is one that supports the devel-opment of platforms to capture valuable information, product trial, product review and advocacy around specific lifestyle, social, entertainment or cultural segments that align with the brand. Try experimenting with the new tools such as gamifica-tion—the use of games to engage consumers and drive behavior, in this case measurable brand engagement, loyalty in the form of repeat purchases and advocacy. 5. Recognizing and rewarding referrals, as well as responding to best customer inbound inquiries in a fast, value-oriented man-ner—and with a solid human touch—can also have a meaningful impact on your loyalty initiatives.

Enabling technologies can be leveraged to help CPG brands evolve from a mass marketing approach to a highly segmented strategy based on individual behaviors and desires.

continued on next page »

Luckily, the technology exists to help you op-erate, communicate, report, analyze and fulfill all aspects of your newfound loyalty strategy. Mak-ing slight modifications to packaging or by includ-ing in-pack codes, you can make tracking and self-reporting of purchase behavior more convenient and even fun for end-users. Profile information can be collected with each value exchange, da-tabases built, and new segments defined. When it comes time for your market research team to evaluate a special sample of brand users, you’ll be prepared to help them discover and utilize valu-able insights at a fraction of the cost.

Are you looking for some examples to get your loyalty marketing planning jumpstarted? Check out Dove’s Real Beauty program that provides a powerful combination of recognition and so-cial movement while driving the brand’s market shares forward around the world. Or, check out the Maker’s Mark Ambassador’s Club, which trades the transactional tracking device for the power of a single brand advocate to get his friends involved in the fun, rewards, privileges and special accessibility offered to members-on-ly. If you’d like to play the auction or points game you can register on-line with Stouffer’s Dinner Rewards, Huggies Enjoy the Ride or Aveda Pure Privilege, just to name a few. If your brand aligns with a mobile strategy, check out the Chivas Re-gal Brotherhood. And of course, there is always My Coke Rewards.

We all know that the consumer is in con-trol. The next cycle of marketing innovation will focus on discovering techniques and delivering experiences that enhance and support the daily lives of consumers. We can no longer count on feature-function, product based differentiation to drive CPG results. And we can’t keep discounting forever or there will be no margin left to create customer loyalty. To help spur the required inno-vation consider unleashing a small group within your marketing department to experiment with several loyalty strategies. A few other words of wisdom: obtain cross-functional support, mea-sure everything and most importantly, foster a culture that accelerates entrepreneurship, allows for failure without punishment and keeps the con-sumer the focus of your loyalty strategy.

My Coke RewardsA look at how one brand is approaching CPG loyalty

How Consumers Earn Points:Consumers can purchase their favorite Coca-Cola beverages

for unique My Coke Rewards codes. Codes can be found on caps, inside tear off on twelve packs and on multi-pack wraps from 15 different brands, including: Coca-Cola, Sprite, DASANI, POWERADE, Minute Maid, NESTEA and others.

Codes = points. The more codes a member collects and submit, the more points one accrues.

Opportunities Available for Consumers to Share their Personal/Purchase Data

My Coke Rewards members register online at MyCokeRewards.com providing: name, gender, birthday, mailing address and email information. Including a mobile phone number is also an optional field to register (for Mobile News Flashes).

There are a variety of options for consumers to log their codes. My Coke Rewards codes can be entered: online at the My Cokes Rewards website, via a desktop widget, by text, or through My Coke Rewards Mobile.

Burn Opportunities•Rewards: Exchange points for merchandise from the My Coke

Rewards Catalog (gift cards and merchandise). •Sweepstakes: Use points for a chance to win sweepstakes prizes. •Instant Win: Use points for a chance to win a prize instantly.•MCRPointsPlus: Use points to pay for a portion of a purchase. •Donate Points to support a cause •Donate Points to a School

How Coke Rewards CommunicatesAll communications are opt-in and presented at registration.

•Email: Sending up to five email communications per month; with information about program rewards, bonus points and member exclusives.

•Text Messaging: Up to five messages highlighting rewards and free offers directly to a mobile device.

•Social Networks: Become a Fan on Facebook and follow on Twitter

For more information visit, MyCokeRewards.com

The next cycle of marketing innovation will focus on discovering techniques and delivering experiences that enhance and support the daily lives of consumers.

34 Loyalty Management™ • LOYALTY360.ORG

I’ll leave you with a few guiding principles:Leverage the power of your brand.

Most brands have spent an enormous amount of time, en-ergy and money building a unique and defensible position in their respective category. While many loyalty strategies can be duplicated—some easier than others—your brand’s positioning belongs only to you. Leverage all elements of this positioning in your loyalty plan and your eventual program execution by layer-ing in specific program components, benefits, communications and technologies consistent with your target audience and the unique characteristics of your brand. Don’t be lazy; don’t follow copycat tactics that detract from your brand’s overall image in the marketplace.

Think brand. Act enterprise.The world of CPG Marketing is often characterized by com-

partmentalized responsibilities associated with brand manag-ers and their agencies. While your loyalty strategy needs to be totally focused on the special circumstances surrounding your brand and program objectives, there may be resources, tools and systems available to you within the enterprise which can make your efforts easier, faster, less expensive and reflective of best practices. Don’t fall victim to “my brand, my budget and my system.” If multiple brands that serve a common audience can pool their efforts and budgets, not only will the effort be worthwhile, but it'll also improve the overall value proposition to the consumer. If a similar platform can be cost-shared and supported among brands, the entire enterprise wins.

Evolve or die.Before you unveil your loyalty effort in the marketplace, you

should already be thinking two steps ahead. The next two evo-lutionary program enhancements should be planned, approved and queued up for execution. Programs must evolve or they will quickly become stale. Some competitors will quickly match your efforts. Some will automatically play “one-up” and raise

Making slight modifications to packaging or by including in-pack codes, you can make tracking and self-reporting of purchase behavior more convenient and even fun for end-users.

the stakes as soon as you launch. Don’t fall victim to compla-cency. Have your targets already defined, your bullets loaded and ready to fire, then reload and fire again. The best loyalty programs in the world are constantly moving down an evolu-tionary path.

Engage, don’t preach.CPG marketers are especially good communicators. The

traditional agencies that support CPG brands usually like more communications, new campaigns, greater reach and frequency and other tactics that generate increases in overall brand spend. Unfortunately, the historical directions of the communications effort have been one-way from brand to consumer. The loyalty game changes all of that. You must re-focus your efforts on dialogue, true listening to and learning from, sharing and col-laborating with, your brand’s franchise. We have the tools and tactics today to accomplish engagement marketing across a myriad of channels, networks and technology platforms. We have to start using them in the manner for which they were cre-ated.

Keep score.Your loyalty marketing program must be measurable. The

ability to identify best customers and advocates, maintain their business, possibly increase their yield and/or potential to your brands, are all hallmarks of loyalty marketing measurement plans. While all CPG brands may not be able to track purchase behavior at the specific customer level, each loyalty initiative must find the specific behavioral, attitudinal and emotional metrics that can be correlated to business results in order to justify the investment. A shake out is coming, especially in the social media marketplace. Unabated spending and experimen-tation will quickly take a back seat to performance. Develop and refine your scorecard. Don’t shy away from the scrutiny that loyalty marketing brings to your brand reviews. L

Loyalty Management™ • LOYALTY360.ORG 35Loyalty Management™ • SEPTEMBER 2011

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ear Field Communications (NFC) is the latest innovation to revolutionize a technology driven world marketplace. With developing opportunities in mobile payments, ticketing, couponing, loyalty and engagement tactics, NFC applica-tions are sure to capture consumer attention quickly. Orange and O2 have been testing the waters and have the population in the UK anxiously awaiting the rollout of this technology. A recent survey conducted by Acxiom, finds 1 in 5 consumers in the UK are ready and waiting to make purchases and receive targeted promotions directly through their mobile device. With Google’s recent announcement of Google wallet, the US marketplace is soon to follow.

We had the chance to hear from a variety of perspectives on NFC and mobile wallet applications. Learn what is hap-pening today from experts leading the market with exclusive insights from: First Data, The Container Store and Acxiom.

A Mobile Wallet? Near Field Communications, the New Frontier in Customer Experience, Engagement & Loyalty

L360: What drove First Data to be a leader in the space alongside, Google, Citi, MasterCard and Sprint? FD: First Data had a vision of an open, connected commerce fu-ture which aligned Google’s vision. We brought to the partner-ship:

•An ability to play a central role in simplifying a complex pay-ment ecosystem to create value for our partners

•Scale of millions of merchants and thousands of financial in-stitutions

•An unparalleled infrastructure on top of which we innovate and deliver a suite of solutions that span the entire mobile experienceNo other company has the reach that First Data does across

both the issuing and acquiring sides of the payments industry. We look at ourselves as both a partner and a catalyst on this project by helping get enough merchants on board to attract consumers as well as helping get enough consumers on board to attract merchants to quickly ignite the platform of mobile com-merce.

What marketplace conditions are driving the need/desire for these applications?

According to a recent study by MasterCard, two-thirds (62%) of Americans who use a mobile phone would be open to using their device to make purchases wherever their errands may take them. As more consumers go mobile while managing their busy lives, an increasing number of smartphones equipped with NFC technology are now being deployed across a range of carriers and handsets. We’re nearing a tipping point where these “connected consumers” with access to a range of NFC-enabled devices and

mobile wallets will be able to migrate all of the accounts in their physical wallet to their mobile device in order to make payments anytime or exchange value, anywhere.

Why should companies integrate NFC technologies into their business and marketing strategies?

NFC technologies like Google Wallet can help merchants bet-ter serve their customers by offering a new payment choice that is faster and safer. Merchants also have the potential to increase sales with the Wallet by driving more traffic to their stores and through the ability to push targeted offers to shoppers. Addi-tionally, Google Wallet can help increase the speed of check-out (contactless payments are 40% faster than swipe transactions) and attract valuable customer segments such as higher income, early adopters and younger audiences who do everything mobile.

Which merchants or types of merchants will be (or should be) the first to deploy contactless payment terminals in the US?

Several top retail brands including American Eagle Outfitters, Bloomingdale’s, Champs Sports, The Container Store, Duane Reade, Einstein Bros. Bagels, Foot Locker, Guess, Jamba Juice, Macy’s, Noah's Bagels, Peet’s Coffee & Tea, RadioShack, Subway, Toys“R”Us and Walgreens have already started accepting con-tactless payments at the point of sale.

Driving contactless adoption has been a priority for First Data for years, knowing that this day has been coming. Now that it’s here, we’re accelerating our efforts to make sure small merchants can also participate in this project and ensure Google Wallet is accepted in a growing number of locations. With over 4.1 million merchant locations in the US, we’re reaching out to

First Data Explores Near Field Communications (NFC) TechnologyDom Morea, SVP and Division Manager, Advanced Solutions and Innovations

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our customers and upgrading them to accept contactless. At the time of launch, First Data had signed over 1000 new mer-chants in New York City alone to accept Google Wallet and we’re launching new programs today to ramp that even higher.

What are some possible opportunities to use NFC as part of an engagement or loyalty strategy?

NFC technologies such as Google Wallet will enrich the con-sumer’s shopping experience by integrating the payment func-tion of the mobile wallet with other value-add loyalty programs and offers from their favorite local retailers.

How is First Data addressing the concern of security for NFC payment applications?

As Trusted Service Manager (TSM) for Google Wallet, First Data provides the infrastructure, functionality and services to provide end-to-end lifecycle management of payment accounts on the Secure Elements of mobile devices. Simply put, the TSM is the underlying technology that securely connects physical pay-ment cards into Google Wallet.

The Secure Element is a highly robust device with many fea-tures designed to protect the data is stores. It’s basically a stand-alone computer—it’s separate from the phone’s main operating system and hardware. Only trusted programs like Google Wallet can access the Secure Element to initiate a transaction. Strong cryptography is enforced on the chip itself, so only authorized entities can communicate with it (such as when payment creden-tials are being provisioned into it).

The Secure Element also contains hardware protections to prevent tampering. For example, there are multiple sensors (heat, light) to determine the integrity of the device so that any tamper-

ing (such as opening the case) will make the data unreadable. But even if data could be read with a very sensitive instrument, it’s stored in a way that makes it extremely difficult to piece together.

A recent Axciom survey found 1 in 5 consumers in the UK were ready to use NFC. Any predictions for how this will translate to a US audience? When do you anticipate seeing widespread use of NFC in the US marketplace?

The mobile revolution is affecting every part of life from mu-sic, to computing, to photography. And very soon, the millions of Americans who own mobile phones will no longer need their old leather wallets either. The U.S. consumer has come to expect mobile banking at their financial institutions and has grown in-creasingly comfortable using it. As they do so, they become more comfortable using their mobile devices for other things that can make their life easier and more convenient. Mobile commerce is the next step.

Each day, we are growing closer to true mobile commerce becoming mainstream in the U.S. The availability of Google Wal-let surely takes us one step closer to achieving that. With con-sumers ready to embrace the technology, a growing number of merchants implementing contactless POS systems and financial intuitions seeing the power of a deeper understanding of and en-gagement with their customers through this new channel, mobile commerce’s arrival into our personal mobile devices is not only imminent, its time has come.

We expect huge growth rates in NFC in the coming years with mobile contactless transactions predicted to top 2.2 billion in 2011. We believe widespread adoption in the U.S. will happen the coming year or so.

Loyalty Management™ • MAY 2011

Each day, we are growing closer to true mobile commerce becoming mainstream in the U.S. The availability of Google Wallet surely takes us one step closer to achieving that.

continued on next page »

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L360: How many stores are testing NFC/Single Tap technologies?TCS: 20 stores in five markets

What marketplace conditions are driving the need/de-sire for these applications?

Customer service is a priority for The Container Store, and we see this being a natural extension of that commitment to our customers. Mobile is the way customers will shop in the not so distant future—we need to provide the customer with the ability to shop this way and on their own personal terms. We just launched our mobile site and see this as another extension of service for our customers. We know customers access information like prod-uct reviews and product pricing while they are in our stores. It just makes sense that they also are able to use their phone to pay at checkout. We’re all about making life more convenient for our customers through our organized solutions, so the Google Wallet payment option just makes perfect sense.

Why is it important to The Container Store to offer NFC and Single Tap experience to their customers?

At The Container Store, we have a passion for customer service. We’re always eager to advance new technologies that elevate our cus-tomers shopping experience. Beyond providing our customers with more payment options, this technology is an improvement in both convenience and ultimately security. It's also a fun way to pay and that adds to the air of excitement our customers experience in our stores.

What are some possible opportunities to use NFC as part of an engagement or loyalty strategy?

The options are many. Google Wallet allows customers to save information to their virtual wallet related to payment options, gift cards, loyalty programs and special offers and incentives. This is a very convenient service, keeping it all in one place. No more digging through your bag to find any of this information! We know custom-

The Container Store Explores NFC TechnologyThe Container Store is a leader in the retail marketplace, testing the use of the Single Tap experience in their stores.

ers don’t always like to carry around loyalty cards, and they can lose special offers that were mailed to them. This takes the burden off the customer and keeps them organized and engaged with our brand.

What are some of the advantages and/or hurdles to prepare for as an early adopter of NFC technologies and applications?

Our core competency is customer service and we work hard to deliver on that brand promise every single day for every single cus-tomer. Our participation in Google Wallet shows us as a leading re-tail innovator, and that is what our customer expects from The Con-tainer Store.

How do you educate your customers about NFC and Single Tap experience options and advantages?

We’ll make sure our sales people are very ed-ucated about this neat new technology. We will also have information in stores at point of sale showcasing this service.

Any predictions for the customer response to NFC applications and of-ferings?

Our customer is female, with a high house-hold income; she’s well-educated, may work in-side of the home or outside of the home, might be juggling a family, a career, community in-volvement or all of it. Bottom line is that she is

a busy woman. We want to enable her to get in and out of the store as quickly and easily as possible so she can get her organization proj-ects accomplished in order to spend more time doing what she wants to do. That’s why we developed services like our GoShop Click & Pickup that even delivers a customers product to them in their car and also and Scan & Deliver in our New York markets. We see this falling in line with these other services.

She also wants, and is used to having, the newest gadget, and is comfortable and quick in adapting to all of its bells and whistles like the Google Wallet application.

The use of NFC technology will hopefully increase frequency of customer visit—since it makes it even easier to shop with us.

Beyond providing our customers with more payment options, [mobile] technology is an improvement in both convenience and ultimately security.

Loyalty 360 surveyed thought leaders and marketers in the customer experience, loyalty and engagement space to seek insights around NFC and mobile wallet applications. What do you know, what is your interest level, and how do you plan to use NFC in your marketing & communications strategies?

Almost of those surveyed expressed interest in learning more about NFC technology and its potential applications!

What is the current level of interest & concern for integrating NFC technologies and application strategies into a business model and marketing strategy? What survey respondents had to say…

Over 30% of surveyed are likely early adopters, or have plans in the works, to integrate NFC technologies and applications into a business or marketing strategy!

retailer insights

A Mobile Wallet? (continued)

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Survey95%

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L360: Acxiom recently conducted a survey garnering responses from 17,000 consumers in the UK, what inspired the survey creation?Vartikar: NFC was the hot topic at the World Mobile Conference held during February in Barcelona. I recently joined Acxiom as head of mobile for Europe, and attended this event.

As Acxiom had not seen any consumer stats about the take-up of NFC in the UK, we decided to use our own online consumer sur-vey to ask the public key questions about whether they would use the ‘mobile wallet’, and what for. The findings were mapped against Acxiom’s Personicx Household consumer data segmentation solu-tion to give a clear picture of this audience.

What learnings can you share from your recent sur-vey?

Topline findings include:•20.5% of respondents (equal to 6.8 million UK consumers) are willing to use NFC when it’s introduced

•Those people who are open to using NFC would do so to make payments, receive loyalty points, acquire coupons and even download ads to their phones

•Some 15% are happy to share their information as long as a brand is transparent about what information they collect

•Single female homeowners aged 25 to 44, living in urban areas and earning up to £40k, are more likely to use NFC for coupons and loyalty points than for making payments

•Students and large families showed a greater amount of inter-est in using their mobile devices to make day-to-day payments, but are still interested in receiving coupons and loyalty points via NFC.

Acxiom survey findings uncovered 1 in 5 consumers in the UK were ready to use NFC. How has the public been made aware of this new technology? What has them so anxious and excited about its release?

The public is being drip-fed information about NFC in the UK, through media stories. In 2010, consumers were told that a hand-ful of UK cities would trial the new technology, while over the last couple of months major brands (including Google) and network op-

erators have issued statements about their intention to enter this market. While the UK public may not fully understand the benefits of and issues around the introduction of NFC, they appear to know enough to embrace it in large numbers already.

What companies are (will be) first to participate in the launch of NFC technology in the UK?

We believe the best way to reach early adopters would be tri-als at their favorite retail stores, which are Sainsbury’s Local, Tesco Metro, Waitrose and Marks & Spencer, as consumers seem willing to trial in-store use of cell phone readers in these environments.

How are current market conditions in the UK driving the desire to lead the world as early adopters of NFC technology?

High penetration of mobile phones and growing use of Smart-phones are factors that make the UK ripe and ready for NFC.

What are some possible opportunities, being tested in the UK, to use NFC as part of an engagement or loyalty strategy?

Contactless data transfer opens up a world of possibilities for marketers. From new payment options to marketing and peer-to-peer communications, the opportunities are immense and yet to be fully understood. Our research indicated that 15% of respondents are willing to share their details with brands via NFC. Brands now need to quickly understand who these supporters of NFC are, what they spend their money on and what they will use the new services for in order to send them targeted, relevant offers.

s marketers, in the midst of the technological evolution, there is a constant bombardment of new technologies to adopt, adapt and embrace as the consumer demands more ease, more play and greater functionality. It’s hard to know when to jump in and when to wait for the dust to settle in the hopes that your predecessors have left a clear marked path to follow. Follow Loyalty 360 as we explore the rise of NFC technologies and their play in the cus-tomer loyalty and engagement marketplace. We will be sharing research on consumer and marketer insights and global perspec-tives in an upcoming study exclusively from Loyalty 360.

Acxiom Survey Explores Desire For NFC Technology in the UKGaurang Vartikar, Acxiom Europe Head of Mobile shared details with Loyalty 360 about a recent Acxiom survey and the adoption of NFC technologies in the UK.

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global insights

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of survey respondents believe their customers would be interested in using the technology!

90%What is the best use for NFC technologies in business & marketing strategies?

•Loyalty program: 40%•Payments: 30%•Engagement/Targeted Couponing: 17%

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s consumers become increasingly savvy about rewards, loyalty programs often are a significant expense for companies in a variety of industries includ-ing travel and hospitality, financial, and consumer/retail. Accordingly, these companies need to address fundamental accounting issues for the recognition and measurement of 1) revenues and expenses on the income statement and 2) related liabilities on the balance sheet.

US GAAP has offered little specific, authoritative guidance on accounting for loyalty programs, so diverging accounting practices have emerged. New international accounting rules have triggered changes in some major pro-grams, and possible modifications in US GAAP have generated further discus-sion. Depending on the nature and size of the program, accounting changes to loyalty programs can significantly impact a company's balance sheet, profits, shareholder value, and financial disclosures. As a result, it is critically impor-tant for companies to be aware of current accounting treatment and emerging industry developments.

US GAAP recognition of revenue for customer loyalty programsUnder US GAAP, two dominant accounting approaches have emerged to

recognize and measure loyalty program benefits and costs.

•Cost/provision. Under this approach, the nature of the awards are viewed as a marketing expense so a company immediately recognizes the full payment received from the customer as revenue in the period of the qualifying purchase (e.g., when points are earned). At the same time, the company records a provision for the internal cost associated with the company's future obligation to its customers. Divergent practices have emerged as to how this internal cost is determined, ranging from incre-mental to full cost calculations. The program liability is subsequently ex-tinguished when customers redeem points.

•Deferred revenue. Under this alternative approach, the issuance of points is viewed as a separate component of a sale. Therefore, a company defers the recognition of a portion of the company's revenue, which is directly related to the earning of loyalty points, to a future period in which the customer either redeems the points or the points expire.

Aside from the different revenue recognition points, both approaches es-tablish a liability on the balance sheet—"program liability" under the cost/pro-vision approach or "unearned program revenue" under the deferred revenue approach—between the time points are earned by customers and the time

the points are redeemed. The amount of the liability, and therefore the impact on net income, will often be larger under the deferred revenue approach than under the cost/provision approach as the revenue associated with re-wards is typically greater than its costs, particularly if only incremental costs are considered.

With little guidance related to the derivation of loyalty program costs under US GAAP, "fresh-start" accounting rules applicable to reorganizations or bankruptcy proceed-ings are an important exception. These "fresh-start" rules, which require loyalty program liabilities to be stated at fair market value, have been applied in a number of recent bankruptcy proceedings in the airline industry.

Since 2002, the US Financial Standards Accounting Board (FASB) and the International Accounting Standards Board (IASB) have been working on a joint project to clar-ify the principles for recognizing revenue and to develop a common revenue standard. In June 2010, the FASB and the IASB issued the Exposure Draft, Revenue from Contracts with Customers, for commentary. This standard could require a more conservative approach (e.g., deferred rev-enue and/or fair market value concepts) than current US practices. Such a change could dramatically impact loyalty program accounting in the US in a manner similar to that of recent changes in international accounting standards (discussed below).

While the Boards originally intended to issue a final revenue standard by 2011, they have recently decided to re-expose the proposed revenue standard, pushing the expected timeline for issuing a final standard into 2012. Based on this timetable, the effective date of the standard would not be earlier than annual periods beginning on or after January 1, 2015.

The consequences of IFRIC 13Because of diverging accounting practices, Internation-

al Financial Reporting Interpretations Committee 13 (IFRIC 13) was issued in 2007 (effective July 1, 2008) to provide

Accounting for Loyalty Programsby Brian Jones & John Kryczka, PricewaterhouseCoopers

FEATURES

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more specific guidance and to bring greater consistency regarding the treatment of loyalty program liabilities. Two major concepts underlying the application of IFRIC 13 to loyalty program accounting include:

1. The issuance of credits or points must be accounted for as a separate compo-nent of the sale. In essence, this requires a deferred revenue approach, where-by the income statement immediately recognizes the portion of revenue relat-ed to the sale of a good or service and defers the remaining revenue allocable to the value of loyalty points. This deferred revenue is recognized when the loyalty point is redeemed or has expired.

2. The process of calculating the amount of deferred revenue when issuing points must be calculated based upon the fair market value of those points to the customer. This guidance means that a company must defer the face value of the points (less expected "breakage"). In contrast, US GAAP allows an alternative approach for the recording of points at face value based upon the internal cost of goods sold.

IFRIC's starting position for determining fair value is "the amount for which the award credits could be sold separately." In practice, this definition can require sig-nificant estimation and judgment by management, particularly in the absence of significant sales of points to third parties. Where third party point sales are sig-nificant, this definition often is the most appropriate and compelling evidence of the fair value of the points. In the absence of third-party point sales, the fair value of goods and services for which the rewards may be redeemed likely would be the fair value basis.

The following table summarizes the difference in current US accounting prac-tices in accordance with US GAAP and IFRIC 13:

Although not required in the US, IFRIC 13 accounting for loyalty programs is becoming more pervasive as companies domiciled in other countries, e.g., Europe, Canada, Australia, etc. are required to use it.

Understand how accounting changes in loyalty programs could affect you

Changing accounting treatments for loyalty programs could well be a painful process. For example, converting from a US GAAP approach to IFRIC 13 likely would increase liabilities for most loyalty programs. Such a conversion could require a one-time adjustment to increase liabilities and decrease net equity if a company previously accrued the liability based on the actual cost of the points and rewards issued rather than upon the deferred revenue approach at fair market value. Even if a company previously used a deferred revenue approach, stating the liabilities at fair market value could significantly increase the amount of liability. In recent years, certain international airlines have recorded significant increases in loyalty program liabilities upon adoption of IFRIC 13, as have some domestic carriers undergoing reorganization or bankruptcy for which the relevant accounting guidance required

"day one" recognition of the liabilities at their fair market value.Although loyalty program costs intrinsically are unchanged, the timing of rev-

enue and profit recognition can be significantly different under the alternative accounting treatments. Therefore, a thorough understanding of the current ac-counting treatment is critical for effectively planning for possible future accounting changes or alternatives.

Current US Practice IFRic 13

Income Statement Classification

Deduction of revenue ("deferred revenue") or marketing expense ("incremental cost")

Deduction of revenue ("deferred revenue")

Balance sheet classification

Accrual / provision, e.g., program liabilities

Accrual / provision, e.g., deferred program revenues

Measurement Various, but generally at related cost to fulfil the obligation for the company

Fair value to the customer

Recognition of the awards

Varies at earning or at redemption

At redemption

A thorough understanding of the current accounting treatment is critical for effectively planning for possible future accounting changes or alternatives.

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TECHNOLOGY, TRENDS & REWARDS

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’m at the drive-thru of a national burger chain last week, craving that juicy super-burger that melts as it slides down my throat and becomes 800 calories of fat that I’ll probably never work off. As I grab my bag of food at the pick-up window, the employee informs me that if I call the number on the back of the receipt and take the survey, I’ll get a free burger next time I visit.

The quickest way to a man’s heart is up his wallet pocket and through his stomach, so the words “free burger” sold me. Plus, I had a bone to pick—they for-got my ketchup and a straw. As I pulled out of the drive-thru, I was already dialing the survey number with my cell. After all, texting is illegal in most states, but talking isn’t. So I can provide feedback, eat, and drive all at one time!

The easiest and most effective surveying method for the customer is over-the-phone responses to an automated survey. Automated phone surveys allow you to rant and rave to a company without an awk-ward exchange between you and another person. You can let it fly! Plus, neither your hands nor your eyes are busy while responding to a phone survey. In fact, I JUST took a phone survey while I wrote that last sen-tence! That’s how simple they are!

Ease of Method Trumps TechnologyAccording to our research at Mindshare Technolo-

gies, when customers are given the option to take ei-

by Erich Dietz, Mindshare Technologies

ther a phone survey or an online survey, they choose to use their phone approximately 60% of the time— no matter the size of the company or its industry.

Though web surveys still take almost half the cake, they’re not as hot as everyone expected. When the in-ternet became a regular household appliance nation-wide about 10 years ago, customer feedback experts expected it to overtake phone surveying methods.

Web surveys never made phone surveys obsolete because technology doesn’t dictate your custom-ers’ surveying preference; ease of method does. And for most, automated phone surveys are the simplest, quickest, most comfortable feedback method for cus-tomers.

Regardless, both web and phone surveys are here to stay. To collect the most surveys, your customer feedback program should offer customers the option to provide feedback via phone, web, text message, kiosk, iPad, social media, or whatever method they choose. After all, the more feedback you collect, the more usable information you receive. And with proper analysis for all that info, you’ll find more specific, ac-tionable insights from your feedback to improve op-erations and increase revenue.

With customers taking as many or more phone surveys as web surveys, you need an analytics en-gine that digests both audible and textual comments equally well, combining all comments into one system.

Making the Audible Actionable: The Value of Voice Analytics

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Your Voice Analytics Should Be Equal to Your Text Analytics

Text Analytics is a hot topic right now. Companies with successful cus-tomer feedback programs are using Text Analytics. At its very basic form, Text Analytics provides keyword search and a word cloud of topic frequencies so businesses know what’s important to their customers. But, many Text Analytics engines do much more than that: trending, root-cause analysis, au-tomatic comment categorization, and much more.

What about Text Analytics’ up-and-coming brother, Voice Analytics? Only a hand-ful of VoC (Voice of the Customer, or EFM – En-terprise Feedback Man-agement) vendors even offer Voice Analytics. And most of those Voice Analytics engines only provide the ba-sics: keyword search and word cloud topics. Why? Because Voice Analyt-ics engines don’t transcribe the whole comment, they listen for keywords within the comment predetermined by the user. For example, if a fast-food manager wants to stay on top of his location’s french fry quality, his Voice Analytics will be tuned to flag com-ments that mention “fries.” Then, the manager has to listen to that comment to find out what it says.

Frankly, that’s pretty weak tech-nology. But, that’s the state of current Voice Analytics engines.

If customers are speaking to com-panies as much as they type or text, shouldn’t Voice Analytics engines be as insightful as Text Analytics engines?

The answer is yes, they should have equal importance. The best way to uti-lize Voice Analytics and Text Analytics is to transcribe your audible comments into text and then feed them through your Text Analytics engine. The two methods become equal in the qual-ity and quantity of their results. Valu-able, actionable insights are extracted from both. Plus, transcribed comments make for easy referencing and provide retainable data for use over and over again.

Just remember, transcribed audible comments provide potential insights. Transcription is near-worthless if you don’t analyze the comments to find us-able information.

Actions Speak Louder Than Insights

If you’re going to collect feedback, you need to act on it. Like Text Analytics, your Voice Analytics results should be actionable and drive decisions that re-sult in operational improvements. All an-alytics must pass the “now what?” test. When you see Voice Analytics results, ask yourself, “now what?” The answer should be an action that drives measur-able results for a Return on Investment (ROI).

Let’s put this test to work. Here are a

few common, less useful Voice Analytics scenarios:

• “I know the top ten keywords used by my customers in phone survey feedback.” (Now what?)

• “I am told I need to have a word cloud.” (Now what?)

• “My competitors were mentioned 143 times by customers!” (Now what?)

See? It’s that simple. The above sce-narios cannot easily and usefully answer the “now what?” question. While they are all very interesting factoids, what practical action steps do they drive? If you cannot take action with your Voice Analytics, why bother with it at all?

Contrast those with the following useful cases:

• “My least satisfied customers complain about long hold times.” (Now what? Hire more contact center agents and/or reduce talk times.)

• “When dissatisfied with order ac-curacy, my drive-thru custom-ers most often use the phrase ‘missing...toy’.” (Now what? Change the assembly process and train employees to double check that toys are included in every bag.)

These Voice Analytics scenarios easily pass the test because they lead to actions that produce measurable op-erational improvements. When creating your Voice Analytics strategy, make sure your solution can answer the all-impor-tant “now what?” test.

The Future of Voice CommentsAs social media platforms, mobile

phones, tablets, and other technology advancements continue to make com-munication instant and easy, surveys will also become easier. At Mindshare, we believe that Voice Analytics engines will become more effective and eventually traditional surveys will change dramati-cally. Let me explain: Imagine leaving a retail store with a receipt and a customer feedback number. You call the number and the automated machine collects your satisfaction ratings and tells you to

leave your voice feedback after the beep. You then talk about your experi-ence in your own words! Instead of being saved and analyzed at a later time, your comments are instantly analyzed for ac-tionable insights pertinent to the retail location.

Obviously, surveys won’t become extinct. Businesses will still occasion-ally survey their customers for market research needs. But for pure customer service insights that improve operations, customers won’t be tied down by formal, structured questions about their experi-ences’ specifics. No more “Did you visit the _____ department? Did the employ-ee greet you with a smile?” and other questions that only improve very minute details of your operations. Instead, you will simply talk or type, providing free-form, unstructured feedback in your own words as you remember the experience.

For that future to become main-stream, you’ll need to have extremely intelligent Voice and Text Analytics systems that actually listen to the voice of the customer, not just listen for key-words.

ConclusionThe easiest and most effective sur-

veying method for the customer is over-the-phone responses to an automated survey. Those comments empower cus-tomers to rant and rave to their hearts’ content using their own voice. Those powerful comments are useless un-less your Voice Analytics system is as insight-focused as the best Text Analyt-ics engine. After all, the two should be equal. With an intuitive, intelligent Voice Analytics system, businesses can use audible comments to their fullest poten-tial, and thus maximize their profits with improved operations.

When creating your Voice Analytics strategy, make sure your solution can answer the all-important “now what?” test.

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TECHNOLOGY, TRENDS & REWARDS

Customer loyalty programs need a makeover. The old-school methods of driving loyalty – by providing frequent-user benefits or VIP access to services or information – certainly help build a bond between brands and existing customers, but they don’t offer ways for happy customers to spread the word about their good experience. They don’t inherently let custom-ers get social with other potential customers, and they don’t have mechanisms for letting customers advocate for the brand.

Marketers can evolve their loyalty programs by layering so-cial capabilities into all of their loyalty activities. By integrating social engagement into these programs, brands empower their loyal customers to become brand advocates. This is “phase

two,” if you will, of marketers’ recent efforts to connect with customers on social networks, which has become standard practice. The task now is to make all marketing programs so-cial, including loyalty programs.

Here’s how you can build social into your loyalty programs (and all of your marketing), and give customers motivation to build buzz around your brand.

1. Combine group buying with loyalty programs.A great way to reward loyalty while adding a social as-

pect to marketing programs is through group incentives. This approach uses the loyalty of current customers to gain new ones – and in the process, loyal customers become even more connected to the brand, earlier in the customer lifecycle.

Three Ways to Make Your Loyalty Programs More Socialby Sanjay Dholakia, Crowd Factory

Group incentives offer consumers benefits – such as dis-counts or premium access to products and content – in exchange for mobilizing a team of other consumers. They bring together two elements that encourage consumer engagement: social

“gaming,” in which people are encouraged to meet goals (like get-ting five friends to take part in an incentive), and deals, which appeal to shoppers who love a discount or bonus.

Standard loyalty programs such as frequent-flier clubs also require a significant time investment before customers see ben-efits: they have to wait until they fly several times, stay at a hotel, etc. before they see benefits. But with group incentives, custom-ers can reap benefits such as valuable discounts or exclusive ac-

cess to premium content right away by assembling their group of friends. This accelerates the process of advocacy and loyalty.

2. Recognize customers for their social activity.Customers who become frequent participants in your social

and group offer programs should get recognized for their hard work. Badging is a great way to let customers show off their spe-cial status – for instance, customers who share a certain number of incentives, or whose friends sign up for group deals, can get an exclusive icon or avatar to show off on social networks or in customer communities.

You can also give customers benefits that accrue with the de-gree of sharing. For example, Razor & Tie recently ran a con-test for artist Vanessa Carlton where fans had an opportunity to

Involved, engaged customers are more loyal customers, so give them a chance to make decisions about how they want to connect with the brand.

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www.veracentra.comFollow us on Twitter @veracentra

win an exclusive meet-and-greet with Vanessa at one of her shows. Fans entered the contest by sharing the contest link with friends via Facebook or Twitter, and they received an additional contest entry every time they shared with a friend.

Also try to identify your "superfans" – people who take sharing to the next level and promote your programs through their own tweets, Facebook posts and other means to recruit hundreds of new fans or more. It’s not uncommon for one of these people to bring back a hundred or more of their friends. Smart marketers will look to reward these su-

perfans on an ongoing basis and make them part of the mar-keting mix. Give them preferential or early access to new items, and reward them with recognition on your Facebook page, on Twitter, or on your website.

3. Encourage “co-creation.”Involved, engaged customers are more loyal customers,

so give them a chance to make decisions about how they want to connect with the brand. For instance, let custom-ers choose which version of a product should be offered, or vote for the discounts or special offers they want to receive. HarperCollins’ Bookperk.com website, which keeps readers up to date on new books and special deals, lets members pick which books will be offered at a discount. Once mem-bers have chosen a book, they have the option to log in to their Facebook page and share their selection with Facebook friends – spreading the word about the discount.

The social strategies above build customer loyalty, but they have the added benefit of turning customers into advocates. When customers share their brand enthusiasm with friends across their social networks, they play a powerful role in en-gaging new customers to join in the fun.

With group incentives, customers can reap benefits such as valuable discounts or exclusive access to premium content right away by assembling their group of friends.

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TECHNOLOGY, TRENDS & REWARDS

With over 303 million mobile phone users in the U.S., which ac-counts for 90 percent of Americans, it is no wonder why merchants and brands are asking for mobile solutions to increase sales and engagement among customers and prospective consumers. A variety of current market-ing offers are providing customers incentives to visit merchant locations. These types of digital or group coupon companies lower the risk of discov-ery for consumers, but don’t necessarily increase loyalty. In fact, new re-search shows that only 20 percent return to the merchant for a full-time purchase. Marketing practices, including mobile, need to benefit all parties involved, including merchants, existing customers, and prospective cus-tomers, in order to be successful. If one is missing, offers cease, participa-tion dwindles, or sales become stagnant.

The increasing use of mobile devices is providing merchants and con-sumers a new channel to market and receive offers. Mobile marketing is ex-pected to grow to $56.6 billion by 2015. Below are a few benefits to launch-ing a mobile marketing campaign.

The 360° of Mobile Marketing: Benefits & Best Practicesby Doug Dwyre, Mocapay

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Purchasing BehaviorCustomer purchasing behavior can be a merchant’s most

valuable property in delivering better customer service, promot-ing new menu selections, promotions and offers. Each purchase may collect time of purchase, location, ticket price, and whether or not they redeemed an offer. Building upon that data over time

can also provide frequency to better inform management of busy times, best times to offer samples, and business slumps where a promotion might boost business. With all of this data, marketers can create tailored campaigns that target specific demographics and times of day.

Location Based ServicesLocation-based services continue to grow as GPS chips embed-

ded in mobile devices continue to gain popularity. According to stats from the Mobile Marketing Association, 26 percent of mo-bile users regularly use a map, navigation tool or similar service that automatically determines their current location. Merchants and mobile marketers can use this advanced feature to better tar-get customers with promotions and offers in a radius around the customer. What about customers without GPS-enabled devices? Merchants can target customers using historical data of when and where this person typically makes purchases (office, neighbor-hood, etc.) and target offers accordingly. Location is an important feature of mobile marketing, as it allows marketers to reach cus-tomers anytime, anywhere, but because of targeting; it reduces the feeling of obtrusiveness.

Redemption DataUnlike a direct mailing, merchants have the ability to link re-

demptions with an individual customer, telling a larger story of who that customer is and which offers are attractive to specific demographics. Mobile in general has a larger redemption rate, as the coupon or promotion is always with the customer, unlike di-rect mail which is typically three to four times lower.

Future of MobileAs mobile usage continues to grow around the world and con-

sumers increasingly move daily activities and tasks to these de-vices, merchants will see a significant ROI in engaging with con-sumers through mobile marketing.Just in its infancy, mobile marketing has great potential as devices become more advanced and consumers adapt to receiving offers

through their phones. Technologies such as geo-fencing, mobile applications, and payment technology are advancing customer usability as a one-device-fits-all potential.

Best PracticesMobile marketing provides merchants a

clearer sense of their customer, which allows marketers the ability to offer distinctly tar-geted marketing messages. There are a few best practices to keep in mind when executing a mo-bile marketing campaign.

1. Integrate mobile into existing marketing collateral.

Customer discovery is crucial with any new service and mobile marketing is no differ-ent. Consumers will seek out solutions that offer them both value and a simple and straightforward registration process. The use of in-store posters, receipt messages, or other store materials, can make discov-ering that much easier for customers to sign-up. Mobile should be integrated into a merchant’s current marketing strategy, not used as a standalone channel.

2. Leverage a solution that allows the great-est number of customers to participate.

Of the 303 million mobile phone users in the U.S., not all are equipped with a smart phone or browser enabled device. The so-lution you choose should reach the largest portion of your customer base and custom-ers should be able to manage all aspects of the solution from their phone. According to CTIA, two trillion texts were sent in the second half of 2010 alone. SMS is the best option, as 99 percent of phones are enabled to send and receive.

3. Listen, measure, and adapt campaigns to suit customer needs.

Mobile offers a unique opportunity for merchants to adapt campaigns as customer sentiment and behavior changes. Using re-demption data along with the purchasing behavior of current customers, merchants can shape campaigns to show customers that they are listening to their needs. Mer-chants can also track performance and identify opportunities throughout the cam-paign.

Mobile should be integrated into a merchant’s current marketing strategy, not used as a standalone channel.

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Many brands are successful at recruiting consumers to Like their Facebook page or follow them on Twitter. However, the perpetual challenge is keeping consumers engaged with their brand in the social media environment and motivating beneficial social media behavior, trying to prevent the "Like it and Leave It" phenomenon. The solution is found in the long-established marketing discipline of loyalty programs. Tradi-tional loyalty strategies such as points and reward catalogs that successfully retain consumers and motivate purchase behavior can be used to create "stickiness" to a brand's social media presence and deepen behaviors. Ultimately, a consumer makes the final decision on how to communicate with brands through social media, but social loyalty is a powerful tool that can encourage and influence interaction.

Five Ways to Make Your Fans More Loyal1. Matching the Right Platforms with the Right Behaviors

Based on the brand's objectives and target consumers, a so-cial loyalty program can be tailored to fit one social media platform, or it can be leveraged across multiple platforms. If the program is going to include multiple platforms, don't use a "one size fits all" approach. Each form of social media offers a different way to engage with your consumers. Understand the value of each platform and how your consumers can con-tribute and benefit from them.

2. Compliment and Encourage, Don't Disrupt the ConversationYour program should naturally fit into the social media eco-system, not disrupt it. According to a recent survey, the top three reasons why people unlike brands on Facebook are "The company posted too frequently," "My wall was becoming too crowded with marketing posts," and "The content became repetitive or boring over time," (source: Exact Target, 2011). To maintain your brand and program authenticity, encourage consumers to engage in behavior that is both natural to them and benefits them. Your goal should be to add value to the social media experience instead of being a noisy distraction.

3. Applying the Right Value to Each BehaviorFor traditional purchase-based loyalty programs, determin-ing member payback is fairly straightforward. Based on a brand's margin economics, the member earns a pre-defined

Social Loyalty: Beyond the LikeBy Matthew Kates, ePrize

credit for each dollar spent or mile traveled. The reward mechanics of non-purchase loyalty programs are less straightforward. How do you value an action? Is a tweet worth more than a like? Is a referral worth more than a testimonial? Assess the relative value of different actions based on value to the brand, the ease to consumer of participating and potential frequency of the action. This will provide a balanced viewpoint of the brand value and member effort while ensuring that no single action domi-nates that program.

4. Provide Value, Earn Value and Keep Your ROISocial actions are extremely valuable in a macro sense but each individual's behavior is worth a small amount. This creates a challenge of providing meaningful member pay-back while being fiscally responsible. It is a critical equa-tion to solve because the majority of people who leave re-ward programs say the key factor for dis-engaging is the length of time it takes to earn rewards. The key is to pro-vide strong perceived value while managing costs. Fixed liability rewards, such as allowing members to use their points to purchase sweepstakes entries to bid on auctions

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DOING IT RIGHTFan It is an affinity game that gives members a chance to earn real rewards by watching, sharing and interacting with your fa-vorite NBC shows. Once you sign up, you can participate in a se-ries of fun and easy online challenges to earn Fan It points. Op-portunities to earn points include following on a show on Twitter, checking in at events, watching a video or taking a trivia challenge. Once you have accumulated enough points, there are plenty of rewards to help show your true fandom. Points can be redeemed for exclusive virtual badge to post to your Facebook page, NBC merchandise such as a cool new Dunder Mifflin t-shirt from The Office or the chance to win a big prize, such as signed script from your favorite TV show.

In celebration of the launch of Degree with motionSENSE™, De-gree is rewarding women for staying active. The “Get into the Move” application on Facebook allows fans to earn motionMILES, virtual currency redeemable toward chances to win thousands of prizes. These motionMILES are earned for various ways women move, including checking in with Facebook places, going to the gym, answering daily trivia questions on the Facebook application and inviting friends to “Get into the Move.” Prizes include a surfing trip to Hawaii, designer shoes, gift certificates for Zumba classes and much more. Fans can also choose to donate motionMILES in a dollar amount to one of two charities.

or access content, are compelling, cost-efficient options. An-other tactic is to use rewards to drive future purchases by allowing members to spend points to purchase special dis-counts or a limited quantity of first-to-get items. All of these rewards are consistent with the reasons people become fans of brands.

5. Balance Creativity with SimplicityThere are endless ways to apply traditional loyalty tactics to your social media efforts. Use them to develop not only long-term programs but also short-term campaigns. They can take on a variety of themes, incorporate sponsorships, or be used to generate awareness, trial and advocacy for new product launches. Don't let the preconceived notions of traditional loyalty constrain your ability to apply loyalty techniques in this evolving medium. The application is limited only by your creativity. Lastly, make your program straightforward and the value proposition easily understood. Social media offers a wide range of behaviors to incent; but just because you can do something, doesn't mean you should—complexity can lead to confusion and lack of adoption. Simple elegance al-ways wins over complex design.

If the program is going to include multiple platforms, don't use a "one size fits all" approach. Each form of social media offers a different way to engage with your consumers.

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The Rise of Social Media as a Lever for Employee Engagementby David Schroeder, LoyalNation

ielsen recently reported that people are spending more time on Facebook than Google, Yahoo!, YouTube, and Wiki-pedia combined. Think about that for a second. It’s important not just as cocktail party conversation, but for what it tells us about how people spend their time and what they value. The latter sites are all information providers, while social media enables us to personally connect with people and groups we care most about.

Great companies and strong leaders understand that business is personal, too. Management teams that can harness the power of social media to connect and engage employees will enjoy a significant competitive advantage, especially when it comes to attracting and retaining the best possible talent. These tools gain even more importance as teams and entire workplaces become increasingly “virtual.” Social media is a powerful mechanism for human engagement in any environment, and successful companies will utilize it effectively to achieve their business goals.

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Three quick factoids about the business value of em-ployee engagement:

•Profitability: A Towers Perrin 2008 Global Workforce Study found that companies with high employee en-gagement achieved, on average, a 17% greater growth rate than those with low employee engagement (as measured by 12-month net income).

•Innovation: The 2011 World’s Most Admired Compa-nies (WMAC) results from Fortune / Hay Group show WMAC are 20% more likely to regularly solicit ideas from employees than their peer group.

•Customer Service: A 2011 study from American Express Global Customer Service Barometer shows that 70% of American consumers would be willing to spend 13% more if they receive excellent customer service.

While email gained its initial critical mass in business and science, social media first exploded as a personal ap-plication and has found its way to business. That’s impor-tant to remember as social media is yet another indicator of the blurring of lines between “personal” and “work” lives. Indeed, one of Gallup’s key 12 Elements of Great Managing is “I have a best friend at work,” and while the alignment of values and engagement of employees have always been critical, today’s instant global access showcases lapses in real time—reference one JetBlue Airways steward and his

“take this job and shove it” moment as a high profile example of late.

The utilization of “closed loop” social networks now af-fords companies a powerful new tool to develop and main-tain employee engagement. In considering this opportunity, keep four dimensions in mind:

Aesthetics: With apologies to the engineers among us, “look” and “feel” matter. In working to engage employees, it’s important to provide an environment that’s visually interesting, easy to interact with, and provides a mean-ingful output of information and ideas. Your IT team’s gap analysis for employee interaction tools may come back with Sharepoint as a solution, and functionally this may have merit. However, it’s important to note (and made famous by Daniel Pink of late) that it’s essential to engage people at a deeper level than pure function.

“Fun” isn’t a four-letter word. Rather, it supports the goal

of truly engaging the team in key themes and topics that drive the business.

Relationships: As we consider the always-on work life, it’s not a trivial matter to foster relationships between peers and managers that support open communica-tion, idea sharing, celebration, and accountability. Social media for business presents an amazing opportunity to achieve these goals in an environment that is both famil-iar to employees and entirely measurable as it relates to adoption and progress against objectives. A recent blog by Adam Richardson said it like this, “…the first thing to recognize about collaboration is that it is something that best happens over a period of time, with a ‘warm-up’ period before critical work happens. Just like a runner, you don't want to do a 10K cold. You need to get things loosened up first.” Getting things “loose” means building relationships and trust, and social media tools foster and accelerate this process.

Recognition: Recognition is a critical element in the de-velopment of employee engagement. Historically, rec-ognition has been limited to one-on-one interactions, infrequent meetings with public acknowledgement, and mass emails. All are generally beneficial and support the goal while having unique limitations. With social media, there is an opportunity to provide real time recognition that can then be seen, celebrated, and commented upon by the broader work group. This is meaningful for the recipient and team as positive reinforcement and a stan-dard of success. There’s also an opportunity to systemi-cally catalogue recognition trends at the unit or company level and to evaluate their alignment with corporate val-ues and strategies. Are our managers actually rewarding the behaviors and values that we deem to be important?

Incentives: While Frederick Taylor and Peter Drucker are under attack in some circles for process based incen-tives and management by objectives, there’s little doubt that much of our business performance is based on ex-ecution of fundamental behaviors AND that incentives can provide short term boosts in performance. I recently read an article from an academic that said “The only in-centives that work….are self-generated in the context of creating real value for customers and other stakehold-ers.” While the point is taken, it’s a virtual lock that the author has never worked on a sales or service team where short-term competitions and targeted awards are incredibly effective in creating camaraderie, spark en-ergy, and boosting results.

The notion of employee engagement as a competitive dif-ferentiator and driver of financial success is not new for the enlightened organization. What is new, and game-changing, is the emerging application of social media as a means to more fully operationalize and measure many best practices and social norms historically associated with strong cultures and motivated employee populations.

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Companies with high employee engagement achieved, on average, a 17% greater growth rate than those with low employee engagement.

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RewardLoopA universal consumer loyalty network for the mobile age.

Its patent-pending customer loyalty technology, which prints secure, transaction-identifying rewards program barcodes (QR codes) on bills and receipts, can measurably increase revenue 5% or more for

independent and chain merchants. Consumers simply scan a QR code with their mobile phones and use the company’s mobile applications to collect and redeem reward stamps in real time, thereby eliminating the need to carry physical cards.

The ProductUniversal POS Adaptor + Hosted Cloud-Based Application: RewardLoop’s flagship uni-

versal Point of Sale (POS) adaptor, RewardLoop Connect, enables merchants of any size to easily deploy a secure, ‘plug & play’ mobile loyalty program in minutes via their exist-

ing POS system. The patent-pending, ‘plug & play’ POS adaptor intercepts and interprets POS print data streams and adds transaction-identifying QR Codes to merchants’ bills and receipts. Scanning the QR code links the user to their loyalty account with that particular merchant inside RewardLoop’s cloud-hosted universal loyalty network.

Analytics & Re-Marketing Engine: A sophisticated data analytics engine provides deep and granular customer segmentation based on purchase behavior, spend, demographics, and geography. Marketers can identify the top 20% of their most profitable customers by categories such as frequency, total spend, and social influence (how many friends they bring), and then re-market to them with personalized communications via email and push notifications to Smartphones.

LoyaltyInnovationPRODUCTS,

ADVANCEMENTS,

& TECHNOLOGIES

TECHNOLOGY, TRENDS & REWARDS

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What Makes RewardLoop Better?An ever-growing number of mobile loy-

alty offerings reward customers based on location ‘check-ins’, QR code ‘check-ins’, or game mechanics, but when evaluating mo-bile loyalty platforms, merchants should be asking themselves: Would I rather reward a customer with a free cup of coffee for checking in 10 times, or for buying 10 cups of coffee?

In contrast to the security gaps posed by mobile “check-in” loyalty apps, Reward-Loop is unique in its ability to offer mer-chants a transactional mobile loyalty so-lution with security that is comparable to traditional card-based programs.

“For a mobile loyalty program to deliver value and be successful in our business, it needs to be transactional and secure. Re-wardLoop is the only solution we’ve seen that meets these criteria,” said Tim Kraus, Interactive Marketing Manager at Quiznos USA.

Customer AdoptionMerchants in the RewardLoop network

have seen customer enrolment rates as high as 5% to 8% of in-store customers per day. Program discovery, enrolment, and earning occur on a self-serve basis. To order RewardLoop Connect, please visit: www.rewardloop.com

RewardLoop is unique in its ability to offer merchants a transactional mobile loyalty solution with security that is comparable to traditional card-based programs.

appsbarappsbar has evolved the idea of putting the power to reward loyal customers in the hands of the business with the first DIY coupon generator.

This tool promises to eliminate third-parties from digital coupons

and directly reward the customers who want deals from businesses they fre-quent—all designed to keep more money in businesses’ pockets.

It’s never been so important for busi-nesses to do as much as they can, with what they have, and appsbar is redefin-ing loyalty management. When appsbar launched their free-to-use app developer in April of 2011, they changed how and why businesses build, publish and share professional-level mobile apps. For the first time, any business could design and publish a professional-level app that would cost thousands of dollars to hire a web developer to build—a process that can take months.

appsbar immediately responded to the business community-demand for a way to reward loyal customers, and only

The Big DealThis summer, MotivAction unveiled The Big Deal, a new pat-ent pending reward platform that enables participants to un-

lock deals and rewards based on their achievements.

The Big Deal is the first product that addresses the greatest needs of organi-zations searching for engagement and loyalty by providing high value rewards,

at a fraction of the cost, tied directly to achievement, behavior, and loyalty.

Unlike traditional reward programs which rely solely on the accrual of points, The Big Deal allows participants to unlock time sensitive deals based on their accomplishments. Participants benefit from immediate access to high value rewards that are meaningful and relevant. Program sponsors now have the ability to tie recognition directly to perfor-mance and benefit from a reward cost structure significantly below retail value. Applications for The Big Deal are unlimited and suit the needs of sales or channel incentives, employee recognition, and consumer promotions. In addition to supporting multiple audiences, the rule structure for unlocking deals is dynamic and allows for individual achieve-ment, team goals, time sensitive deals, progressive performance awards, chance based promotions, and a host of additional op-

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a few months later introduced a new way for any business to directly engage their customers. The proliferation of smart phones and social networks created the perfect, all-new way for businesses to directly make and deliver digital coupons without all the restrictions and without any of the cost of using third-party deal sites.

If a business builds and publishes their own app, and encourages their custom-ers to download the app for special deals, they are able to engage directly with the people who want their deals the most.

App-delivered digital coupon deals also let businesses be nimble. If they sud-denly have an overstock or want to invite people to a late breaking event, they can alert their customers in real time through the app. They can design and distribute a digital deal in a matter of minutes. Busi-nesses can make coupons in real time, at any time, with whatever level of discount they want to offer on whatever products they choose. Within minutes, a business can alert their customers through their app of long-term or limited time coupons and promotions using calendar event no-tifiers.

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The inherent ability of apps to con-nect with social networks also adds a layer of social sharing. Friends can share deals they find immediately across their. App builders such as appsbar add in lay-ers of calendars, menus, soundboards, graphics and GPS capabilities so busi-nesses can explore new ways to attract and reward customers.

With smart phones, customers are notified immediately that a coupon is available. With no need to print a cou-pon, the user simply shows the coupon, either simply presenting the onscreen image at the store or allowing the busi-ness to scan the bar code or QR codes that can be added.

Smart phones have opened the floodgates for development of a host of tools to help businesses get fast, free and efficient engagement with customers. Just like when websites, blogs, and social networks were introduced, the business community seized the opportunity to attract and reward loyal customers. Ap-psbar was the first company to democ-ratize app development and publishing for free.

tions. Now organizations can design reward programs that in-spire performance, are easily managed and tracked, and deliver bottom line results.

The Big Deal uses three simple steps to drive engagement and loyalty:

1. Goal setting (identify participants, segment audiences, es-tablish goals)

2. Deal determination (establish budget, select deal payout)3. Launch communication (extend offer via e-mail, web, mo-

bile)

The Big Deal is a seismic shift from the traditional point pro-gram. This platform and methodology reinforces the “golden

moment,” the time when par-ticipants redeem in a program and experience the benefit or reward for their efforts. In a tra-ditional point program partici-pants earn at a rate which often takes months and sometimes a year before they redeem. In The

Big Deal rewards are unlocked with achievement. Examples in-clude achieving quarterly sales goal, employee anniversaries, or in a consumer model servicing your vehicle three times at the dealership unlocks a free oil change. Redemption equals engage-ment and performance. Redemption is in fact the surest sign that participants are engaged in the program.

Now organizations can design reward programs that inspire performance, are easily managed and tracked, and deliver bottom line results.

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BEST BUSINESS PRACTICES

Imagine a world of customer experience management (CEM) unification. Where a CEO of a Fortune 500 company has his finger on the pulse of what millions of customers think about his company:

When he logs into his company’s metrics dashboard, he sees “Promoter Score: 62,” a high rating. By itself, that num-ber is a single measure of customer health, but, similar to key financial measures like Net Profit and Revenue Growth, it doesn’t tell him enough about what areas of the company are driving that number. To find out why customers value his company so much, he can, with one click, break down the score by touchpoint (brick-and-mortar, e-commerce, contact center), by brand, or even further—by individual stores or agents. He can also track performance over time.

The health of the organization from the perspective of the customer is at his fingertips. The information is not overwhelming, but it is not too simplistic, either.

Imagine, the call center agent in the same organization having real-time access to how the 50 customers he served today feel about his performance and, by extension, the company’s?

When the agent logs into his dashboard, which is custom-ized to his role, it displays “Promoter Score: 59.” To find out why customers value his service so much, he can, with one click, delve into verbatim customer comments. He can also benchmark himself against his top-performing co-workers to discover best practices that might help him improve.

This system unifies the organization around a single metric by making it relevant to everyone. It tells the CEO that his company is a leader in experience, which delivers value to customers and shareholders across the organiza-tion. It tells the call center agent that he is a leader in experi-ence whose performance impacts that of the overall orga-nization. This level of unification is possible only when the entire organization leverages a single platform to embrace a single metric.

The benefits of a unified system are measurable. When a global athletic merchandiser consolidated its multiple pro-grams—for stores, web channels, and call centers—onto one metric (Promoter Score) and one platform, it achieved a 5 to 7 percent score increase across channels, as well as a 10 percent decrease in dissatisfied customers. Other benefits include cost savings (one subscription vs. many) and inter-nal consistency (no need to train inside transfers).

Negative Consequences of Sticking with SilosUnfortunately, too often, companies end up with sepa-

rate, siloed programs by happenstance. They shop around for a contact center solution, then add a separate platform for point-of-sale surveying. And so it goes as the company grows until, before long, it has too many platforms to keep straight. The result is less than optimal. There’s:

•No centralized customer history. If a customer first makes a purchase online, then seeks tech support at a

How Healthy Is Your Customer Base? Measuring Through Unified Customer Experience Management (CEM)by Russ Haswell, Medallia, Inc.

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brick-and-mortar store, then calls the contact center about a billing issue, each piece of this record will be housed in a different system.

•No synchronized case manage-ment. An employee trying to close the loop with the customer will have no way of knowing the cus-tomer’s entire use history and pain points, so any follow-up risks be-ing either over- or underdone.

•No clarity at the executive level. With a handful of systems each generating different reports, ex-ecs have no way of monitoring and benchmarking the performance of the business on a single metric spanning touchpoints.

“You can’t have these silos of com-munication channels,” Forrester se-nior analyst Kate Leggett said in a re-cent interview with SearchCRM.com.

“You also have to understand that each communication channel has a cost as-sociated with it. Some are high cost, some are low cost and what a compa-ny is trying to do is balance the cost of doing business with how happy their customers are.”

Please consider the following case study as an example of best practices for implementing a unified CEM pro-gram.

Case Study: Global Apparel Company Launching Web-Based CEx Program

•Gain commitment to the launch from everyone—the frontlines to

corporate executives. This client embraced the customer satisfac-tion initiative as the single most important goal throughout the organization. From the CEO on down, the company was prepared to expend the resources neces-sary to build the program across two brands, thousands of stores, a wedding registry, furniture deliv-ery, the contact center, and more. In fact, the CEO informally added Chief Customer Office to his title to further reinforce the commit-ment. “No decision will be made without the customer at the table,” he said.

•Walk before you run, starting first with a pilot and then a full launch. The client wanted to implement a customer satisfaction program across stores, contact centers, and the website, so it began with its core—brick-and-mortar. Once brick-and-mortar embraced the system, this client was free to add contact centers, delivery, and other business aspects—and each feature became a seamless add-on rather than an entirely new imple-mentation. Breaking up adoption into manageable chunks may take more time, but by doing so, you gradually convert stakeholders rather than overwhelming them with a new system.

•Sustain your commitment to the program even after launch: This company expects over 1 million

pieces of feedback from customers in 2011—which puts employees on the hook to make 100,000+ follow-up calls to customers wanting to hear from them.

The effort to launch a unified program is greater than the effort to launch a siloed one, but so is the payoff. Since the kickoff of the program less than a year ago, brand promoters have in-creased, sales have grown 6.6 percent, and the company’s stock price has surged 60 percent.

Overall Business BenefitsCustomer experience is the lead-

ing indicator of business perfor-mance. Influential business thinker Peter Drucker argued that the one valid definition of business purpose is “to create customers” by deliver-ing value customers are willing to pay for. “What…customers value…is so complicated…it can only be answered by the customers themselves,” he said. In other words, customer experience—measured by asking customer directly what they value and, by extension, whether they will remain customers—is the leading measure of whether a company is fulfilling its core purpose: to create customers.

Unified CEM programs let cus-tomer experience be what it is: the leading indicator of overall business performance. Silos squelch the true potential of customer experience. It’s time to unify CEM.

Each communication channel has a cost associated with it. Some are high cost, some are low cost and what a company is trying to do is balance the cost of doing business with how happy their customers are.

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BEST BUSINESS PRACTICES

Tell us a bit about Batteries Plus, “Time to Care” program with USA Cares.

Reynolds: Batteries Plus created the “Time to Care” cam-paign to raise awareness about USA Cares and their Jobs for Vets program and raise funds to help veterans get placed back into the work force after serving their country. For one week in May (May 24th- May 30th Memorial Day) and one week in November (November 5th – November 11th Veterans Day) participating Bat-teries Plus locations, amongst our 460 stores across the nation, will be teaming up with USA Cares to:

•Donate $5 from each regular or lifetime watch battery re-placement to USA Cares during these two designated weeks.

•Accept “In-Kind” donations from customers which will go to USA Cares

Batteries Plus, LLC will also be contributing $1 for every per-son who “likes” the Batteries Plus Facebook page and “supports” the USA Cares Jobs for Vets Cause page – up to $25,000. (For more information, please visit http://tinyurl.com/5unmoa8)

What lead your organization to get involved? Reynolds: First and foremost, it’s the right thing to do. We

have always been a franchise system that gives back to the com-munity and one that believes in corporate citizenship and good-will. We were looking for a national organization to team up with so that all of our stores across 46 states and Puerto Rico could participate, in order to make the greatest impact and help the

lives of as many people as possible. We choose to partner with USA Cares because of the veteran connection with many of our store owners and employees. USA Cares assists post 9/11 veter-ans with a hand up to help them get acclimated back into civil-ian life once they return from active duty. Batteries Plus works with many military bases across the country, supplying them with their battery and light bulb needs, and many of our stores either employ veterans or are veteran owned. When we saw that the gap of unemployment percentages between veterans and the general population was nearly double for veterans, we decided we wanted to do something to help bridge that gap. So we teamed up with USA Cares and created the “Time to Care” campaign to help make a difference in the lives of unemployed veterans. We believe this donation campaign will mutually ben-efit both our organizations by building brand awareness, brand image, as well as making society aware of USA Cares initiatives, joblessness among vets, and providing them with information on how they can help.

Why does Batteries Plus believe that embracing a CSR strategy is a valuable approach in the customer engagement process?

Reynolds: Customer acquisition and retention goes far be-yond the transaction process. It’s about building a relationship based on outstanding customer service, trust, and a genuine be-lief that the company is looking out for the best interest of its customers and the local community it does business in. A CSR

Embracing Corporate Social Responsibility (CSR)Interview with Russ Reynolds, CEO of Batteries Plus

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or many, corporate social responsibility (CSR) has become part of the company culture. Integrating plans for community outreach, fundraising, green practices, or fair trade into efforts to take advantage of corporate influence and impact the world in a positive way. Con-sumers do take notice, and as more and more companies find ways to integrate these initiatives into their core strategies, CSR has had a positive influence and impact on both customer and employee engagement and loyalty.

Loyalty 360 had the opportunity to hear from Batteries Plus CEO, Russ Reynolds to learn more about their partnership with USA Cares and the creation of the, “Time to Care” program. We are happy to share the Batteries Plus story, discovering how they are taking action to support Vets and as a result engender trust, engagement and loyalty through their employees, community, and their customer.

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strategy allows for a mutual interest between a business and cus-tomers in the community to rally behind a common good cause. As it specifically relates to our partnership with USA Cares and the “Time to Care” campaign, there are veterans in every com-munity in America and by embracing a CSR strategy we are con-necting with our customers and the people in their lives in a per-sonal way.

From a business standpoint, a CSR strategy helps separate us from the competition and allows us to remain in the minds of our customers beyond the transaction and products we sell them. The “Time to Care” campaign has allowed us to engage customers in different ways and using different outlets that once were not available to us (i.e. USA Cares website, Facebook page, military blog sites, Dennis Miller Radio show, etc.). A CSR strat-egy plays in important role in building positive customer percep-tion and loyalty based on distinctive ethical values, and we feel this campaign has helped us attract new customers and engage our existing customers in new positive ways.

In what unique ways, are you integrating social media into your CSR program?

Reynolds: We have created a video detailing the experiences and story of one of our veteran franchisees, Paul Bessey, and why the “Time to Care” campaign hits home with him. We’ve posted the video on multiple video sites such as YouTube, and shared it on our social media channels (Facebook, Twitter, Google Buzz and LinkedIn ) along with other promotional info. We’ve also ac-tively created posts, sent tweets and blogged on many military sites to promote the “Time to Care” campaign and had some great online conversations with new and existing customers who are excited about what we’re doing and proud to support this cause.

What has been the overall consumer response? Reynolds: During the first week of the campaign, May 24th

– May 30th, our participating stores sold over 10,000 watch bat-tery replacements and accepted in-kind donations from cus-tomers, raising an estimated $60,000+ for USA Cares. Not all customers had a replacement watch battery that needed to be purchased, but they still wanted to donate to help this cause. We also heard some feedback from stores that many customers wanted to contact USA Cares to look for other ways they could get involved and help. Our website also saw a double digit in-crease in the percentage of visits during this week, so we believe the overall consumer response from a brand and traffic driving standpoint has been great.

What are the top three things to consider when beginning a CSR strategy?

Reynolds: The most important consideration before begin-ning a CSR strategy is to make sure you’re doing it for the right reasons and will be fully committed to it. When beginning a pro-gram the top 3 things to consider are:

1. The charity/organization you choose to partner with should

make sense and resonate with your employees and custom-ers, while also sharing your company’s values. Ensure senior management is on board with the strategy and willing to support the strategy. For franchise businesses, make sure franchise councils are on board as well, as they can help in-fluence fellow franchisees.

2. Plan ahead so that you have time to implement the pro-gram and clearly communicate the details in advance when getting the word out about it.

3. Work together with the organization you are helping to utilize each other’s resources to help increase the impact of the initiative. For instance, they may not have financial resources but they may have a huge database of contacts to help get the word out.

Is there value in incorporating social responsibility into an overall business model?

Reynolds: The rewards for us are immeasurable. First, to know that we raised over $60,000 for USA Cares’ Jobs for Vets program thus far and that the donations will help veterans in communities across the nation gives us a sense of pride and our franchisees a sense of community. Together we are making a difference and the more we embrace CSR initiatives the more valuable it becomes to all of us. Companies can and should play an important role in their communities and give back to the cus-tomers and communities that support them. Incorporating social responsibility in a business model helps increase your brand im-age and brand awareness and it can help give that company a competitive advantage in the marketplace. It also opens the door for future opportunities that also may be beneficial to your com-pany. Social responsibility can also add value through employee satisfaction and their appreciation for the company values. This can help enhance employee motivation and productivity. Know-ing you work for a company committed to doing the right thing and supporting worthy causes creates a great camaraderie and team environment in the workplace.

What are the immediate benefits Batteries Plus has seen by embracing CSR initiatives?

Reynolds: The first immediate benefit is raising money to help the USA Cares Jobs for Vets Program. The other immediate ben-efit is the positive feedback we’ve received from our franchise community. Over 55% of our stores have agreed to participate in the program and we’re hoping to increase this number for the November portion of this donation campaign. We’ve received compliments from many owners saying the “Time to Care” cam-paign not only benefitted the brand nationally but also helped their stores leave a positive impression in their communities. The campaign has helped drive traffic to our stores and our website, increased brand awareness, and created a sense of community internally among our corporate employees and our franchise sys-tem. Most importantly, it has led to great partnership with USA Cares and allowed us to make a positive impact in the lives of those that have served our country.

The most important consideration before beginning a CSR strategy is to make sure you’re doing it for the right reasons and will be fully committed to it.

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In light of the recession, consumers today are smarter than ever when it comes to saving money, yet most are still woefully confused and overwhelmed by their loyalty pro-grams, especially how to leverage their various pools of points and miles to save even more. Only 18 percent* of air-line loyalty program members were able to correctly identify the value of their awards. Considering the average American household is a member of 18 loyalty programs, but only active in 8 (Colloquy, 2011), getting just 10 percent more people to understand how, when and why to earn, use and buy miles could have a tremendous impact on the industry. By provid-ing your customers with a few easy tips for understanding your brand’s loyalty program and how to use it, consumers will reap the benefits, become more engaged, save money and time, and will feel rewarded for the money they save on travel and accommodations. In the end, that will make them more loyal to your brand.

Track. The first step to understanding loyalty programs is tracking accounts and knowing the balance accumulated in each one. In fact, a recent survey of the Points.com user panel showed that 76 percent* of members belonging to multiple loyalty programs agreed it’s important to keep track of loy-alty program balances. Sites like Points.com allow users to manage all of their programs in one place with one central dashboard instead of signing in to several different websites to check balances – think of it as an online loyalty wallet. Imagine all the time that could be saved by aggregating all programs in one place to eliminate weekly check-ins to 8 loy-alty program websites.

Study (at least a little). Once your customers are easily keep-ing track of their balances, help them read up on the different redemption values of your program’s points and miles. No two programs are exactly the same and becoming fluent in the dif-ferent currencies will make it easier to manage and redeem for the awards they want, resulting in greater brand loyalty.

Part of being fluent is knowing when points expire. It can be difficult to keep up with expiring points even if members are aware of the policies and are constantly checking their bal-ances. Only 9 percent* of users surveyed by Points.com know all their programs’ expiry policies, with 60 percent* having lost points/miles due to expiration even though they were aware of the date. Customers could have avoided this fate sim-ply by purchasing 5 miles or redeeming miles for a $10 gift card, resulting in a much more positive experience with the loyalty brand. Until there is a better method for alerting customers about expiring points, the best way to recommend they log in to their accounts once a week to check.

Another easy way to help your customers boost their loy-alty wallet is to help them stay on the lookout for easy ways to earn. 78 percent* of members of multiple loyalty programs have gone out of their way to make sure they earn points or miles in their favorite program. Some people even stay in mul-tiple hotels in the same city during one trip just to maximize the points they accrue. Most loyalty programs offer promo-tions several times per year giving members bonuses for buy-ing points in bulk or taking advantage of earn opportunities like opening a new account.

Make sure your members enroll their children in your loyalty program as soon as they are old enough. Children can

Knowledge is Power: Helping your Customers Understand Their Loyalty Programs by Christopher Barnard, Points.com

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begin earning miles and points as early as age 2, when they re-quire their own seat. Parents can manage their programs until the child is old enough to do it themselves. They’ll be loyal to

your brand for life once their parents turn over a full loyalty program account to them! Travelers will be able to take more vacations with the whole family earning points and miles for their travel.

The loyalty point junkies know all these tips and tricks, but educating more of them will make the programs even more dynamic.

Redeem: Once the basics of managing multiple loyalty pro-grams are fully understood, that knowledge can be applied to wisely redeem points and miles for fun awards and trips. Points.com recently found that 40 percent* of all loyalty pro-gram members prefer to redeem their points/miles for an award flight and with proper management and a few easy tricks, those goals are easily attainable.

For starters, make sure to remind your customers to buy miles or points if they’re just short of their redemption goals. Rewards can cost as little as 2 cents per mile so it is often less expensive to buy the 10,000 miles needed for that cross coun-try flight, than to buy the entire flight at full price.

Planning ahead and booking early can also be beneficial because most flights have a limited number of award seats available. Seats also go quickly on flights during peak travel days. 62 percent* of members of multiple loyalty programs in a recent Points.com user panel survey found it difficult to redeem miles for award flights because of the blackout dates and restrictions. Being transparent with your customers and reminding them to plan ahead can remove some of this confu-sion and frustration so they get the flights they want. Happy customers breed loyal customers.

Sharing is caring: Buying flights for an entire family can get expensive, especially around the holidays. If customers travel frequently for work, you can recommend they consider trans-ferring or gifting their miles and points to other family mem-bers to pay for flights or accommodations. This is yet another untapped resource for loyalty members; only 31 percent* of Points.com users have ever transferred their miles or points to someone else to help them reach their travel goals or save money in the family. Gifting points is another great option for those distant relatives that have received far too many ties or scarves as gifts. Your customers can surprise their relatives this year with enough points to take their dream vacation – all at no cost to them!

Reap the benefits: All things considered, traveling and rack-ing up points doesn’t have to be as expensive or confusing as one would think. With the proper tools, education and tricks, a family of four can save up to $800 a year and still take the kids to Disneyland for Christmas.

78 percent* of members of multiple loyalty programs have gone out of their way to make sure they earn points or miles in their favorite program.

*Points.com survey of members of multiple loyalty programs, Novem-ber 2010-June 2011

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Insights from Points.com Member Survey

•18% of airline loyalty program members were able to correctly identify the value of their awards.

•76% of members belonging to multiple loyalty programs agreed it’s important to keep track of loyalty program balances.

•Only 9% of users surveyed by Points.com know all their programs’ expiry policies, with 60% having lost points/miles due to expiration even though they were aware of the date.

•78% of members of multiple loyalty programs have gone out of their way to make sure they earn points or miles in their favorite program.

•40% of all loyalty program members prefer to redeem their points/miles for an award flight

•62% of members of multiple loyalty programs found it difficult to redeem miles for award flights because of the blackout dates and restrictions.

•Only 31% of Points.com users have ever transferred their miles or points to someone else to help them reach their travel goals or save money in the family.

*All figures above from Points.com survey of members of multiple loyalty programs, November 2010-June 2011

BY THE NUMBERS

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Loyalty 360: Who is XO Communications & what differentiates your B2B approach to loyalty and raising the bar on customer experience?

DeWitt: XO Communications is one of the nation’s larg-est communications service providers focused exclusively on businesses, government, domestic and international telecom-munications carriers, cable companies, content providers and mobile wireless companies. Our B2B approach to loyalty begins “at home” by partnering with internal teams like Client Services and Customer Care that provide support to the customer base. We work as a coalition to ensure that our communications and marketing programs align with customer needs. In our minds, we cannot possibly develop programs without incorporating the feedback of the teams that are ultimately the face of XO Com-munications to our customers. They understand the “day in the life of an XO customer” better than anyone.

In an often sales driven B2B culture, how do you introduce the value of engagement and loyalty techniques?

DeWitt: First of all, let me say that introduction and adop-tion to these techniques take time. In a B2B environment, Sales is a tangible and easily measured entity, so most companies don’t consider loyalty techniques until they reach a point where they realize that they are losing customers just as fast as they are selling them. And while there are account and customer service employees who are managing the situation in the best way they know how, it just wouldn’t be fiscally responsible for them to staff enough of them to effectively address the churn alone. This presents a golden opportunity for introducing loyal-ty techniques. I have found that the best way to introduce them is through an internal coalition made up of Loyalty Marketing, Client Services/Account Teams and Customer Care. They un-derstand the needs of the customer, the challenges they face as teams, and can be allies in building and defending loyalty pro-grams and techniques.

Customer communications is key. How does a successful approach to engaging in dialogue differ through the various campaign strategies i.e.: up-sell, engagement and retention? Is there value/op-portunity in integrating these strategies?

DeWitt: There is a ton of opportunity in integrating the three types of campaign strategies. All of them are equally im-portant to a successful robust loyalty strategy, but timing and frequency of them may differ. Engagement strategies and sup-porting programs should continue throughout a customer’s lifecycle and be refined regularly so that the information shared through dialogue is fresh and relevant, and the channels used are appropriate for the audience and the message. Upsell and Retention campaigns are a little different because they have to be delivered at the right time and to the right person. Some marketers believe that you should upsell customers frequently and are after the “quick fix” road to revenue. I would argue that these methods tend to boost revenue for a short period, but the returns ultimately dwindle because the relationship may be sac-rificed (i.e. customers opt out of communications, feel they are being sold irrelevant products, etc.). To me, if a company can effectively engage their customers, they will build a viable rela-tionship with them based on trust, and then a consultative sell-ing approach can continue throughout the customer lifecycle.

L360: What role does trust play in developing a dialogue and creating a successful B2B relationship and engagement strategy?

DeWitt: Trust is paramount to any relationship. I think we, as marketers, can’t think of loyalty and engagement as just in-dustry buzz words. I tend to think of every loyalty strategy as a means of deepening a relationship. If you want to begin a rela-tionship with a person, you can’t misrepresent who you are or what you stand for. The same is true with B2B loyalty strategies. Be honest. Don’t misrepresent your brand. Own up to your mis-takes and apologize. Follow up with good will and good experi-ences. Sometimes customers will forgive you, and sometimes they won’t, but if there is no trust, there is no loyalty.

Establishing a Dialogue with the Consumer Inside the Business CustomerInterview with Toni DeWitt, XO Communications Senior Manager, Loyalty & Retention Marketing

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he B2B marketplace often requires a different approach to loyalty and engagement strategies. Knowing where to start and how to integrate tried and true practices with tactics specific to B2B can be a challenge for many organizations. We had the opportunity to hear from Toni DeWitt of XO Communications, to learn more about how a B2B loyalty & engagement strategy can be a unique and valuable addition to an organization’s marketing efforts.

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How are you using tools typically found in the B2C space, such as social media, within the B2B loyalty/experience strategy?

DeWitt: Over the past year, the larger marketing organi-zation has become more sophisticated in our corporate social media strategy. There is an XO Communications presence on Twitter, Facebook and LinkedIn and we share industry-related news and content that we feel will benefit our prospects and customers. This creates quite a following as consumption of relevant and useful content shows that we are a reliable source of information and thus experts at what we do.

What have you experienced with your clients as a result of this integration?

DeWitt: We are just beginning to incorporate Twitter in our customer communications to proactively engage with custom-ers, and our Customer Care organization recently began offer-ing customer service on Twitter. While this is very new, Cus-tomer Care has received a positive response and an increase in followers, which encourages us that the proactive channel will be just as successful.

How do you measure a program’s success? DeWitt: From a program perspective, the Loyalty Market-

ing team measures what and how we communicate with our customers. We consider ourselves somewhat of a conduit for our customer-facing teams. The experience teams measure customer satisfaction with our products, installation, billing, repair, and interactions with our customer-facing employees. A loyalty program or customer experience initiative is consid-ered successful if it results in active participation, retention, and if revenue is retained or increased.

What metrics can you suggest using to determine viability?

DeWitt: Generally, response and conversion metrics should be used and measured over time by program type (en-gagement, retention, upsell) and analyzed against retention and revenue metrics to determine program effectiveness.

Read more from our interview with Toni De Witt on a B2B ap-proach to customer loyalty as our conversation continues on-line at Loyalty 360.org.

Sometimes customers will forgive you, and sometimes they won’t, but if there is no trust, there is no loyalty.

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t National Instruments (NI), we develop intuitive soft-ware and modular hardware products that help engineers and scientists around the world design and deploy systems. Customers use our products for applications ranging from simply acquiring data to controlling the world’s largest supercollider.

We understand the importance of embracing our lead users and other customers when developing new product features and have successfully implemented a system for co-innovating the evolution of our flagship software platform, NI LabVIEW. Co-innovation is a hot topic among technology companies, and we have embraced this idea to incorporate user feedback into our development pro-cess. The online LabVIEW Idea Exchange (ni.com/ideas) is a fo-rum where users can provide ideas that help make our products better. It also serves as a way for us to show that we listen to and value their feedback.

Gathering DataAs we began to discuss the idea of building co-innovation into

our LabVIEW development process, we knew we needed to gather more information about our community members, as they would be a key part of the process. To accomplish this, we conducted an extensive survey of our community. We specifically wanted to em-brace the audience of innovators and evangelists in our community.

The survey showed that 41 percent of NI customers are “active” NI community users. Additionally, the more active customers are with the NI community, the more loyal they are, meaning they are

•satisfied overall with us as a company,•likely to recommend our products to a colleague,•likely to purchase the same products from us (repeat cus-

tomers), and•likely to purchase new products from us.

This data, shown in more detail in the following graphs, con-firmed that it would benefit us to embrace these customers in our software development process.

Using Social Technologies to Co-Innovate Product Evolution

by Stephanie Logerot, National Instruments

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ImplementationAfter evaluating our audience, we narrowed our focus down

to the following objectives, which helped us solidify our plan for a LabVIEW co-innovation system:

• Make it easy for NI customers to share, discuss, and vote on new software features.

• Gather feedback from lead users as we enter new markets. • Encourage customers to share their feedback in the com-

munity-driven software development areas.• Launch customer-driven software developments at NI-

Week, our annual user conference and trade show.• Integrate these ideas into traditional marketing efforts.

Our end product, the LabVIEW Idea Exchange, was born out of the need to implement the above objectives. Built using the Lithium community platform, it goes beyond the typical beta pro-gram by giving our online community a way to interact directly with NI R&D to provide candid feedback about our products. We then work to incorporate their feedback into LabVIEW as much as possible, which results in increased customer satisfaction because they see that we pay close attention to their needs and suggestions.

Users can submit and vote on features covering topics such as

user interface enhancements, performance improvements, com-putation capabilities, and hardware integration. Since August 2009, more than 2,000 ideas have been submitted for consider-ation in future versions of LabVIEW. In August 2010, we launched the newest version of LabVIEW, which incorporated 14 Idea Ex-change submissions.

ResultsOverall, we consider the LabVIEW Idea Exchange to be a great

success. One important measure is that it has decreased the num-ber of customer complaints. Before the Idea Exchange existed, customers requested new features for the product by emailing our

R&D team. Many users who had complaints just posted them to their own blogs. By launching an open, public idea board for users to share their feedback, we gave our customers a welcome hand in our software development process. Because of the success of the LabVIEW Idea Exchange, we now have eight Idea Exchanges covering multiple product lines.

We have also seen an increase in our own software develop-ment productivity because we no longer have to guess which features our users would prioritize. Now, the feedback our com-munity provides in the Idea Exchange gives us direct insight into which features they want to see most, and helps our R&D team prioritize accordingly.

Other specific metrics include the following:• 2,400 ideas submitted across several software product

lines (our initial goal was 500)• More than 47,800 votes on product ideas• 9,470 customer comments on ideas• More than 45,400 unique visitors to the Idea Exchange, for

a total of 99,100 visits• The LabVIEW 2011 beta includes 13 new features from the Idea Exchange

Companies are generally interested in customer feedback, but often don’t know the best way to gather and then implement their suggestions. The most innovative part of the Idea Exchange is that we not only use social technology to listen to our customers, but that we then incorporate the best feedback directly into our products and give customers access to our R&D team. Many com-panies are afraid of what their customers might say about their products; however, by embracing customers’ opinions and mak-ing co-innovation an important step in the product development cycle, we have been able to work with them to create better, more useful products.

The LabVIEW Idea Exchange includes ideas straight from customers interested in helping us develop the next version of LabVIEW.

Many companies are afraid of what their customers might say about their products; however, by embracing customers’ opinions and making co-innovation an important step in the product development cycle, we have been able to work with them to create better, more useful products.

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ustomer loyalty is always a top priority for any retailer, but with the effects of the economic downturn still being felt by many, it is now more important than ever for retailers to build a closer relationship with consumers.

Customer Centric RetailingTraditional mass media marketing no longer provides the means

to do this. The failure to recognise this development has been re-cently felt by a number of big name retailers across the US and Eu-rope. The battle to keep customers and to differentiate your retail brand is not easily won, but Customer Centric Retailing (CCR) pro-vides a solution.

It may seem counter-intuitive or idealistic to suggest that frequency, average baskets, margins, cross-sell-ing and ultimately customer loyalty can increase, while spending less mon-ey and using less energy on marketing. However, by developing a customer fo-cussed business strategy, based on “nuggets” of information from millions of cash register receipts, 5one has repeatedly shown that it is possible for retailers to give their customers exactly what they want in the way that they want it.

A New Era of Customer Loyaltyby Nick Afonsky, 5one

From the board room down to tactical decision making, customer insights drive value.

What not to do In the past, many retailers have amassed customer data and

analyzed the surface of it, or gone deep to support a number of tac-tical initiatives. With access to T-log, on-line, loyalty and payment card and other types of data, retailers need to be in a position now to quickly analyze the most relevant customer data, understand customer lifestyles and buying habits, and use these insights in bet-ter, more targeted decision making. One of the keys here is to imple-ment a durable customer analytics framework to measure progress towards customer objectives over the long haul.

From the board room down to tactical decision making, cus-tomer insights drive value. For example, one American retailer planned to remove a product from its shelf because transac-tional data showed that it wasn’t as popular as other brands sold in-store. However, using cus-tomer insights, the retailer un-

derstood that the less popular item was overwhelmingly bought by the store’s most loyal customers. So a potentially costly mistake was avoided.

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Come hear Nick speak with Rob Voase from GAME Group at the 2011 Engagement Expo where he explores this topic in an interactive discussion.

ImplementationBest practice implementation of CCR involves the retailer

changing the way they think about their customers from the boardroom to the shop floor. This includes the consideration of customer insights at the strategic level as well as day-to-day decisions on marketing, loyalty-strategy, promotions and product assortment, private label brands, store and category management. The most important thing here is to expand the use of customer insights from Marketing and Loyalty to the other key business functions.

It appears a huge undertaking for any retailer, especially for those with many hundreds or thousands of stores. It is also important not to disrupt existing organization and informa-tion systems. However, in just a few weeks a sample of just 5% of the customer base is all it takes to reveal relevant and actionable customer groups, from which point the review and potential realignment of existing business plans can take place.

Reaping the benefitsWhen used effectively, customer data and insights will

increase customer satisfaction and profitability and help re-sist the effects of the recession. For instance, when 5one ana-lyzed the sales of a leading European food retailer it showed that budget families, its key customer segment, were buying a lot of high-priced chocolate-flavoured cereals. The retailer then decided to produce and sell a similar product under its own brand, which was cheaper and proved an instant hit with shoppers. Once the proper customer analytics and insights are in place, these types of opportunities come into focus for the business as a part of day-to-day planning.

Furthermore, by using this insight in-store promotions and multi-product offers can be optimized to ensure that they are popular with existing customers as well as attracting new ones. In contrast, mass media marketing, which involves of-fering the same promotions to all shoppers, is more expensive and less effective than direct, insight-driven marketing.

The most effective marketing campaigns are those which are tailored to customers based on their shopping habits. Remarkably, this technique has yet to be fully appreciated by retailers, despite evidence that targeted marketing cam-paigns produce a greater return on investment than general mass marketing. One grocery retailer implemented a targeted multi-offer coupon campaign which resulted in an impressive 50% of those mailed using at least one coupon, and lead to $23 million increase in sales.

Looking to the future For retailers, the lesson is that by spending less and target-

ing their actions, shops are seeing their sales indicators, mar-gins, average baskets and loyalty grow within a short space of time. In the short-term this could be the deciding factor in a retailer’s survival. As Customer Centric Retailing is adopted across key retail functions, it can secure the long-term future of the business as well.

Best practice implementation of CCR involves the retailer changing the way they think about their customers from the boardroom to the shop floor.

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ith over 35 years of experience in the construction industry, Viewpoint Construction Software provides a lead-ing construction-specific software application and unparal-leled customer support, making sure businesses experience smoother, easier and ultimately more profitable job results. Viewpoint V6 Software is a fully scalable and integrated SQL/.NET solution tailored specifically for mid-to-large sized con-struction companies. Unifying all the unique departments in today’s construction companies from Accounting to Opera-tions to HR, V6 provides real-time data—wherever and when-ever needed.

Viewpoint has always taken pride in its customer satisfac-tion focus, but with significant growth initiatives underway, including expansion into Canada and Australia, there was con-cern about their ability to maintain that high standard. “Since our sales efforts are very dependent upon great references

and since we often heard that positive references tipped the scale in our direction, we were always pretty confident we had strong customer satisfaction and loyalty”, explained Pam Snodgrass, Manager of Customer Quality for Viewpoint Con-struction Software. “Our informal approach to gauging satis-faction had served us well in the past, but with new customers coming on board at a much more rapid pace we knew a formal program was needed to help us stay in touch with customer experiences and ensure continued and even improved satis-faction.”

Viewpoint had conducted customer satisfaction surveys in the past, but they weren’t administered on a routine ba-sis and didn’t provide valid, comparable metrics. Individual departments would gather feedback on specific topics from time to time, but there was no consistency in branding or best practices. Without a centralized database of participants and

Viewpoint Voice of the Customer

A look at how an annual customer survey, paired with a centralized database helps Viewpoint Construction Software identify important customer-focused initiatives

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the inside scoop

by Nancy Porte, Vovici & Pam Snodgrass, Viewpoint Construction Software

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responses, the company was missing feedback in key areas of the customer lifecycle.

The primary driving force behind searching for a Voice of the Customer (VoC) software platform was the de-cision by Viewpoint’s executives to implement an annual all-customer survey in 2009. This survey would be used as the baseline for future surveys, and would allow them to identify (and act upon) customer-focused initia-tives.

When choosing a VoC platform, Viewpoint had several requirements including integration with their CRM (Customer Relationship Manage-ment) system, so that they could eas-ily identify survey participants, the ability to limit survey frequency, and the ability to analyze responses based on a variety of track-able criteria such as customer location, type of contrac-tor, size of firm, etc. The software also needed to be rich in features and func-tionality with top of the line support.

In addition to implementing a sur-vey tool for their annual survey, an-other important goal for Viewpoint was to start gathering feedback on a continuous basis related to specific customer experiences. Examples of relevant experiences include support calls, on-site consulting engagements, technical services projects, and class-room training sessions. This informa-tion would allow both managers and employees to really keep their finger on the pulse of customer experiences and react much more quickly if atten-tion was needed.

Although conducting annual sur-veys and gathering feedback on vari-ous support and service needs were the primary goals, Viewpoint contin-ues to discover more and more survey uses. For example, Viewpoint’s Prod-uct Management team frequently surveys customers to gather input for software enhancement ideas and prioritization. Viewpoint also gathers input and feedback related to user

conferences, website features, on-line training courses, marketing cam-paigns, and various employee topics.

While continuously gathering data in a formal manner was an important step, Viewpoint knew this was just one piece of a successful customer feed-back program. “We knew if we didn’t follow through with the other steps of learning, sharing, and seeking feed-back again, that we shouldn’t bother starting the process”, explained Snod-grass. Viewpoint learns from their survey data in a variety of ways, such as automatic alerts that notify related managers when survey responses are less than positive or if the customer specifically requests additional fol-low-up. Department leaders also rou-tinely review survey reports that pro-vide both quantitative and qualitative information. These processes allow Viewpoint to quickly become aware of situations that require immediate attention and adjustment, and helps identify larger improvement initiatives.

For their annual survey, Viewpoint goes through an extensive process that includes analysis of both ratings and comments. Snodgrass explained,

“We ask several essay questions, such as “If you could change one aspect of the Viewpoint V6 Software, what would it be?” and “If you could change one thing about our customer support, what would it be?” While those take a great deal of time to digest and cat-egorize, they are essential for helping us better understand customer senti-ments, identify trends, and ultimately make improvements.”

Shortly after a presentation of the annual survey results and shar-ing of detailed ratings and comments, Viewpoint’s leadership team identifies what they call their ‘Key Customer-Focused Initiatives’. While each leader identifies a variety of potential im-provements specific to their team, the key initiatives require cross-functional commitment. For example as a result of their 2009 annual survey, one of

their key initiatives was “Customer Communication”. “Feedback from our 2009 annual survey indicated we could to do a better job keeping cus-tomers informed of important news, providing them access to needed in-formation, and allow more opportu-nity for them to provide us with input and feedback”, explained Snodgrass.

“Related projects fell in a variety of ar-eas such as switching from a quarterly to monthly newsletter (and related improvements), a complete reengi-neering of our customer website, and the implementation of various surveys to gather feedback on daily experi-ences.”

Initiatives are shared in their cus-tomer newsletter and customer web-site when first established, progress updates are shared throughout the year, and then the annual survey spe-cifically asks customers to evaluate progress. Viewpoint’s 2010 annual survey asked customers to evaluate progress related to each 2009 initia-tive. Based on the results some initia-tives (such as Customer Communica-tion) were dropped from the “key” list, some remained and some were added. Then the process continues for 2011 and beyond.

Viewpoint’s 3rd annual all-cus-tomer survey recently closed and they are looking forward to having three years of solid data to compare. Al-though more detailed analysis is still underway they are pleased to report that ‘overall satisfaction’ and ‘willing-ness to recommend’ ratings contin-ued an upward trend for the 3rd year in a row; something they attribute to their ongoing customer focus. “It’s great to have the ability to easily reach out to our customers to gather and analyze information, but there’s more to the process. Taking action on that information to ensure we meet and hopefully exceed the changing needs and expectations of our customers— that’s the real end game,” concluded Snodgrass.

“It’s great to have the ability to easily reach out to our customers to gather and analyze information, but there’s more to the process. Taking action on that information to ensure we meet, and hopefully exceed, the changing needs and expectations of our customers—that’s the real end game.”

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Loyalty Management™ • LOYALTY360.ORG

President, Points International Ltd.

Christopher BarnardChristopher is responsible for corporate strategy, product development, corporate development and financing activities as well as investor relations and has also held various additional interim operating positions including CFO and VP of Product Development and Marketing. In 1998 Christopher also co-founded Canada's first internet business incubator, Exclamation International, from which Points.com was created.

What is your personal motto?Be flexible enough not to have a motto...

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

As a self-proclaimed recovering golf addict, my dream “job” would be squeezing in 36 holes a day.

If you could invite 4 people to dinner (past or present) who would they be?

•Muhammad Ali: With a nickname of “The Greatest” and an unorthodox fighting style best described by his catch-phrase, “Float like a butterfly, sting like a bee,” there has really been no other role model to hold a candle to Cassius Clay.

•Gandhi: The guy single-handedly started a phenomenon of peace. The phrase, “An eye for an eye will make you blind,” will always resonate with me.

•Leonardo Da Vinci: The archetypal Renaissance man. What more can I say?If I had these icons, I would be willing to give up my fourth

dinner guest. Oh, and I’d be sure we had a prix fixe menu so no time was wasted on ordering.

Which book(s) are you currently reading? What must-read book(s) do you recommend?

I drank the e-reader Kool-Aid and never leave home with-out my Kindle. I have the following books in rotation right now:

•The Wonder of Girls by Micheal Gurian: In an effort to try and understand my 6 year old daughter.

•Enchantment by Guy Kawasaki: To keep Points.com as en-gaging as possible.

•The Art of Learning: A Journey in the Pursuit of Excellence by Josh Waitzkin: To teach my children to become better learners.

•The 4-Hour Body by Tim Ferriss: I’m a minimalist when it comes to exercise so this book is showing me how I can stay fit with little effort exerted.

•Hardcore Zen: Punk Rock, Monster Movies, and the Truth About Reality by Brad Warner: To understand how much I don’t understand.

What recent advancement in technology are you most excited about?

I think mobile payment platforms are really going to be sig-nificant change drivers over the next few years (by eliminating change actually...). From Square to PayPal, Google Wallet to Groupon there are going go be increasingly more options for consumers very soon. I think that the presence of easy pay-ment options has very much been the under appreciated driver

BEHIND THE BRAND

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Loyalty programs have the opportunity to be leaders in this area [mobile payment platforms] on both the earn and the burn sides.

Photo credit: Karla Burns Photography

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011

Christopher and his team celebrating their success.

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of some recent notable successes. Take my answer to the previous ques-tion. Sure the Kindle is a terrifically well designed product with an awe-some amount of content but one of the reasons that I'm reading five books at the same time is that they were just so damn easy to pay for. The same goes for the 92 apps on my iPad.

Roll that dynamic out to the broader economy through NFC, QR codes and 2D bar codes and I think we are going to see quite an impact.

Loyalty programs have the opportunity to be leaders in this area on both the earn and the burn sides. Enabling any merchant to offer any currency as an incentive will get a whole lot easier. Conversely, mobile payment will also open up a virtually unlimited redemption catalog that will make programs with the right vision very at-tractive indeed.

What’s your favorite social media outlet personally? For marketing?

I know it’s very retro, but email is still my personal social tool of choice. For marketing, it is clearly Points.com. Sure there are some notable social networks that have a significant portion of the world's population as users but as they continue to grow, I think that they will present much of the same challenges as mass media has always presented. Getting a corporate message to appear relevant between posts of Aunt Mary's new puppies and niece Jenny's birthday pictures is going to get increasingly difficult. Much of LinkedIn's success lies in its relevant context - I'm looking for networking/business opportunities and I know I'm not going to get birthdays and puppies. So too with Points.com, where a growing base of almost 3 million users are managing their loyalty lives through our platform and are seek-ing more ways to get engaged in their multitude of pro-grams. We believe that getting directly relevant infor-mation from these programs is a fantastic way to help any loyalty program ramp up its member engagement. L

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ANALYTICS

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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. © 2011 SAS Institute Inc. All rights reserved. S77664US.0711

Understand the impact.

Scan the QR code* with your mobile device to view us on Facebook or visit sas.com/conversation for a free white paper.

*Requires reader app to be installed on your mobile device

Your customers are embracing public forums like social media to make buying decisions. SAS® helps you analyze and act on conversation data to increase sales and drive brand loyalty. Decide with con� dence.

ANALYTICS

Loyalty Management™ • LOYALTY360.ORG72

On the Road to Loyalty: Engagement is the Journey, Loyalty is the Destination.While “engagement” and “loyalty” are terms that are often used interchangeably, understanding the differences and interconnection between the two is key to building and maintaining strong, sustainable customer relationships.

Engagement Expo 2011, “The Road to Customer Loyalty: Engagement is the Journey, Loyalty is the Destination” will examine the role engagement plays in the journey to customer loyalty and advocacy.

The degree to which a company succeeds in building and maintaining an intimate, strong relationship with the customer starts the first time a person is introduced to the brand and continues as you initiate a dialogue, get to know each other, and develop a rapport. Increasingly, brands are realizing that achieving high levels of engagement is the key to driving loyalty and advocacy and delivering a competitive advantage.

For more information, registration details, or to read more about all of the speakers presenting at Engagement Expo this fall, please visit www.engagementexpo.com.

We look forward to seeing you at the show!

Powered by Loyalty 360 – The Loyalty Marketers’ Association, Engagement Expo 2011 will feature a dynamic mix of research, panel discussions, case studies, proven tools and techniques, and focus groups to help marketers optimize their customer engagement strategies. The robust agenda features many of the greatest minds in customer engagement including:

• WORKSHOP: Partner Optimization Lead by David Andreadakis & Rick Boubelik, Carlson Marketing• WORKSHOP: Optimizing ROI Driven Communications Across the Prospect/Customer/Partner Lifecycle Lead by Mike

Carney & Claudio Ayub, Hawkeye• WORKSHOP: In-the-Moment Lifestyle Engagement Attendees Create and Experience Mobile & Social Engagement,

Payments and Rewards Lead by Bob Gold, Gold Mobile

B2C• Customer Data, Segmentation and Analysis: Driving Engagement and Customer Strategy Moderated by Connie Hill,

VeraCentra. Panelists include: Heidi Shurtz, Allergan; David Sims, GNC & Sarah Mendez, Mister Carwash• Radio Silence is Costly, NPR Listens and Succeeds with Panels Presented by Nancy Porte, Vovici & Ben Robins, National

Public Radio• Time to Grow Up: Youth Acquisition Beyond the Transactional Presented by Edwina Doyle, Research In Motion; Sean

Claessen, Maritz Canada Inc. & Barry Kirk, Maritz Loyalty and Motivation

B2B• CEMEX USA Constructs a Concrete Competitive Advantage by Being Customer-Centric Presented by Ven Bontha, CEMEX

USA• Using Defined Touchpoints to Ensure a Superior Customer Experience Presented by Jeffrey Bouchard & Michelle Edwards,

FARO Technologies, Inc.• Why B2B Customer Satisfaction Doesn’t Create Loyalty Presented by Rob Urbanowicz, Geehan Group

November 6 - 8, 2011 • Dallas, Texas

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Partner Optimization

In-the-Moment Lifestyle Engagement Attendees Create and Experience Mobile & Social Engagement, Payments and Rewards

Optimizing ROI Driven Communications Across the Prospect/Customer/Partner Lifecycle

In this breakthrough workshop, we will examine selected strategies and tactics of optimizing partners to drive customer engagement.

Partner optimization is a series of management strategies, tactics, and supporting analytics used to optimize partner programs within the engagement

and loyalty space. Opportunities exist when the exchange of value between partners, the loyalty program, and customers is out of balance. This leads to decreased customer engagement in the loyalty program, loss of core business profits, and weakened partner offers.

We will look at partner selection, offer relevancy, and program structure as it relates to ROI from the program, increased partner value, and core business growth. Participants will walk away with an understanding of core partnership optimization principles, ready to use strategies, and models for improvement.

Attendees will actively participate in the following scenario:

(1) Be executives for a simulated consumer brand and actively participate in making the final decisions and tradeoffs on deploying a new mobile and social engagement program with a “transactional mobile wallet”

(2) Switch to being the consumers and experiencing the full cycle of engagement, purchase, and rewards including using (on your cell phone) a real-life mobile wallet and performing an NFC transaction (Near Field Communications).

The workshop will address questions such as: How easy is it for your prospects and customers to engage and transact with your brand during their hectic day and lifestyle? On any device they may have? Two way personalized dialogue? When they are “In-the-Moment” and feel like being social, getting entertained, or checking off a “to-do” item on their list – is your brand available to capture that moment? Even more important, can you create that “AHA” moment that stimulates an immediate action?

Engagement varies throughout the Prospect/Customer/Partner lifecycle and data-driven communication ensures that your audience receives the right messages, at the right time, differentiating you from your competition.

At this session you’ll learn how to: •Implement data-driven strategies that target both decision makers and influencers•Reward strategies that support both indirect and direct sales channels and drive incremental ROI•Segment communications solutions that boost response rates and build prospect dialogue•Cultivate strategies that create sales-ready leads and significantly enhance sales conversion rates•Maximize customer lifetime value up-sell/cross-sell opportunities through data intelligence

David Andreadakis Manager, Decision Sciences - Carlson Marketing

Bob Gold CEO - Gold Mobile

Mike Carney Chief Marketing Officer - Hawkeye

Rick Boubelik VP, Loyalty Strategy - Carlson Marketing

Claudio Ayub VP, Chief Channel Strategist - Hawkeye

2011 WORKSHOP

2011 WORKSHOP

2011 WORKSHOP

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Customer Data, Segmentation &

Analysis: Driving Engagement

and Customer Strategy

In this new age of customer centric marketing, engagement and loyalty marketers are leading the customer strategy “charge” for their organizations. Armed with volumes of customer data, the task at hand is using that data to create true competitive advantage by building long term relationships with customers.

For many marketers, turning customer data into competitive strategy is new and uncharted territory. During this session the panel leader, along with three panelists from different industries, will take an in-depth, “how we did it” view into the three primary areas that can help marketers chart their own journey from volumes of customer data to true customer strategy that delivers increased profitability. Panelists will also discuss the steps they took to secure executive buy-in for their data collection and analytics programs.

The three primary areas that will be covered are:1. How to identify meaningful data and best practices for data collection;2. How to create a segmentation strategy that meets the marketer’s specific objectives and3. the use of analytics to yield customer intelligence that drives customer strategy.

The session leader will introduce each topic area and will lead questions of the individual panelist to secure real life examples that describe their approaches to successful customer data collection, segmentation and analytics for strategic customer intelligence.

The audience will gain tremendous value with the “how to introduction” of each area, followed by real life experiences provided by each panelist, including processes and best practices for:

•Collecting customer data•Customer segmentation•Using analytics to yield customer intelligence

Connie Hill Heidi Shurtz Sarah MendezDavid SimsPresident & Founder - Vera Centra

Senior Manager, Customer Rela-tionship Marketing - Allergan

Marketing Director - Mister Carwash

VP, Direct Marketing - GNC

Interested in hearing from our featured speakers? Register NOW at engagementexpo.com – Spaces are limited.

“The challenge is knowing where all your information is, how it got there and how you can translate it to current and future marketing

objectives. The value is in the data. The more you know about consumer habits the better you can interact with them in the most

relevant way. Loyalty pays, both ways.”-Heidi Shurtz, Senior Manager, Customer Relationship Marketing - Allergan

B2C FOCUSED SESSION

Loyalty Management™ • LOYALTY360.ORG

Imagine your ROI in the best possible position.

Stop by to register for our workshop, Optimizing ROI Driven Communications Across the Prospect/Customer/Partner Lifecycle.

Mike Carney, CMO • 214.659.5656 • hawkeyeww.com

Our integrated campaigns make it a reality.

To get your ROI in top form, visit booth 15.

social · mobile · digital · events · direct

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Nancy Porte

Edwina Doyle

Ben Robins

Sean Claessen Barry Kirk

VP, Customer Experience - Vovici

Senior Manager, Carrier Marketing - Research In Motion

Research Manager - NPR

Executive Creative Director - Maritz Canada Inc.

Solution VP of Consumer Loyalty - Maritz Loyalty and Motivation

Online communities are one of the most efficient ways to listen to the customer. When a company hosts an online community for its customers, and the goal is truly to listen and be a valuable resource for them, something special starts to happen. The good intentions

and efforts will begin to translate into actual business results for the customers, and ultimately the company. As an organization opens up to customer’s thoughts, concerns and complaints, the company can gain respect and confidence, moving them beyond a vendor who provides a service, but rather an indispensible partner.

NPR is an award-winning, multimedia news organization. In collaboration with more than 900 independent public radio stations nationwide, NPR reaches a growing audience of more than 26.4 million listeners weekly. To better understand the audience's experience, interests and needs in an ever-expanding media landscape, NPR required a mechanism to create a feedback loop with its core audience. In 2007, NPR launched an audience advisory Web panel, called NPR Listens, to better understand evolving listener preferences and bring the audience to the center of NPR decision making. To date, the panel has attracted participants from all 50 states, more than 65 countries, and now comprises over 22,000 listeners. Over the past four years, NPR has gathered hundreds of thousands of responses on topics ranging from monthly feedback on the NPR shows that listeners hear on the radio each day on their local NPR member stations to iPhone application testing, and from gathering feedback on end-of-year fundraising to measuring the impact that social media has had on listeners. NPR bucked the trend in declining new audiences in traditional media by enjoying record-high broadcast audience ratings in the past year, reaching more than 26 million listeners each week. NPR used audience research to launch its NPR News iPhone app, which saw more than 1 million downloads in its first five weeks and has dramatically enhanced NPR's presence in the mobile space. NPR held usability interviews with NPR.org visitors for feedback on their site's redesign, which now attracts more than 11 million listeners each month.

Millennials are a new breed of consumer with expectations for brand experiences that go beyond the transactional to something more engaging, interactive and mobile. Increasingly, smart marketers will meet this challenge with brand interactions that mix elements of game science and social/mobile media, playing on the human drives to bond and to explore. This session will offer concepts for making a brand interaction social, mobile and gamified, focusing on a Maritz case study from the Make Friends with BlackBerry program, an initiative that engaged youth in Canada, from coast-to-coast, for an entire summer – leveraging RIM’s BlackBerry Messenger (BBM) platform. Maritz will demonstrate how the coolest part of this program was the combination of a strong mobile aspect along with rich measurement, which allowed RIM and Maritz Canada to draw a direct line of causality between in-field and digital activity -- distinct from any traditional advertising -- to reveal tangible, real-world results. Maritz will share all parts of the case study, from client brief & assignment, to dissecting our approach and sharing key consumer insights. We’ll also flesh out the solution detailing the nuances that tie the brand to this particular audience through a shared set of values. The Make Friends with BlackBerry case study will offer a compelling glimpse into this emerging realm of marketing, with an unusual level of visibility into the granularity of consumer engagement and conversion throughout the program's funnel. It will give insight into how to engage the youth market with a peek at a new standard for what we should expect out of database marketing in the future.

Radio Silence is Costly, NPR Listens and Succeeds with Panels

Time to Grow Up: Youth Acquisition Beyond the Transactional

B2C FOCUSED SESSION

B2C FOCUSED SESSION

Loyalty Management™ • LOYALTY360.ORG Loyalty Management™ • SEPTEMBER 2011

Why B2B Customer Satisfaction Doesn't Create Loyalty

According to a most studies including the latest from Business Week, over 60% of defecting customers indicated they are satisfied right before they leave. Learn why satisfaction doesn’t equal loyalty or retention and what to do about it. Marketing and Sales must now play a role in driving beyond satisfaction to loyalty and ultimately advocacy. This session will explore best practices and lessons learned in developing customer advocacy.

Attendees will learn:•Understand the key differences in B2B vs. B2C loyalty and customer satisfaction metrics•Understand the three layers of loyalty in B2B•How loyalty programs can transform a B2B company, making the marketing team look like a hero•Best practices of leading B2B firms to drive loyalty and retention•How to engage the internal support necessary to deliver B2B loyalty

Viki Cooney Karen PoseyVice President, Health Systems Marketing - AmerisourceBergen

Senior Consultant - Geehan Group

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B2B FOCUSED SESSION

Fueled by the success of the Loyalty 360 and Geehan Group B2B Marketing Track at the 2011 Loyalty Expo, Engagement Expo is bringing together a thought-provoking array of B2B marketing insiders to examine a myriad of the most compelling issues facing B2B marketers today.

Engagement Expo's B2B Marketing Track

To view additional B2B sessions and learn more about the Engagement Expo agenda, please visit engagementexpo.com/agenda

Loyalty Management™ • LOYALTY360.ORG

Ven R. Bontha

Jeffrey Bouchard Michelle Edwards

Head of Customer Experience - CEMEX USA

Director, Learning and Organization Development - FARO Technologies

Manager, Applications Engineering - FARO Technologies

Building materials provider, CEMEX USA, faced many challenges that are often associated with rapid growth. After back-to-back acquisitions, the company’s U.S.–based operations rapidly grew to 14 cement plants, multiple distribution terminals, more than 100 quarries and several hundred ready-mix concrete plants. Learn how CEMEX USA, the recipient of the 2011 Customer Relationship Management (CRM) Excellence Award, met those challenges with its successful and comprehensive approach to customer experience that enables CEMEX USA to continually deliver high quality customer service while improving the efficiency of its service operations.

FARO Technologies, Inc., a high tech company in Lake Mary, Florida, provides 3D Imaging and Metrology solutions to our customers. We have always believed that we provide more than a tool or even more than a solution to our customers' problems. We provide a “total customer experience.” Three years ago we began defining this experience in terms of our applications engineers’ touchpoints with our customers. We designed and implemented processes and standard templates for the touchpoints. This approach accomplished two things: first, it enhanced our customers’ involvement with us; second, it has enabled our Account Managers to describe to prospective FARO buyers exactly what makes our customer experience unique and exceptional.

This session will describe the pre-touchpoint environment, the evolution of the touchpoints and the significant impact of one touchpoint in particular, the FaroBDA™ process.

CEMEX USA Constructs a Concrete Competitive Advantage by Being Customer-Centric

Using Defined Touchpoints to Ensure a Superior Customer Experience

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B2B FOCUSED SESSION

B2B FOCUSED SESSION

“Whenever you provide anything for customers, think about why you are providing it. What will it enable them to do that they otherwise

could not do – and – what will be the ultimate benefit?”-Jeffrey Bouchard, Director, Learning and Organization Development - FARO Technologies

Loyalty Management™ • LOYALTY360.ORG

COME NETWORK WITH OUR SPONSORS & EXHIBITORS

GOLD SPONSORS

TO LE ARN MORE OR SEE ADDITIONAL SPONSOR AND E XHIBITOR DETAILS, VISIT W W W.ENGAGEMENTE XPO.COM/SPONSORS

Come meet our sponsors, register today. The first 100 people to register will get a free membership to Loyalty 360 for the rest of the year. Register now at www.engagementexpo.com/register

November 6 - 8, 2011 • The Westin Stonebriar • Dallas, Texas

4120 Dumont StCincinnati, OH 45226

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CAROL STREAM, IL

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NOVEMBER6 - 8, 2011

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PLEASE VISIT ENGAGEMENTEXPO.COM FOR SPEAKER INFORMATION & TO REGISTERIf you're interested in sponsoring at this conference, please contact Erin Raese at [email protected]

Customer engagement begins the first time a person is introduced to your brand and continues as you initiate a dialogue, get to know each other and develop a rapport. Are you creating positive experiences to engage your customers? How do you begin the conversation? How do you keep them interested and involved?

Engagement Expo 2011 is bringing together a slate of best-in-class speakers and partners to arm attendees with the education, insights, and proven tools they need to present their customers with the most inviting, interactive and personalized experience possible.

Key areas of focus will include:

•Insight into what engagement means and how to manage that across the multi-cultural and multi-faceted client/customer constituencies.

•Customer experience – Are you offering the best first experience possible? What about the second and third?•Building customer trust – Using positive customer experiences and learning the best questions to ask (when and how) to engender the trust needed to begin to build a successful two-way dialogue.

•Social networking and how to leverage this in your marketing communication strategies to create more engaged participants. Tools such as best practices, processes and analytics will give you much more granular insight.

•Cross-over of emerging (wireless, mobile) and traditional medium to make the most of your engagement/marketing strategies.


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