powered by Loyalty 360
Volume 2 Number 1
Winter 2010
2010: The year you invest in Social Media
GLOBAL PERSPECTIVES & COALITION
Across the Ocean Blue
The Private Label Credit Card Dilemma
Making the Connection: Employee Engagement and Customer Loyalty
TRENDS & PREDICTIONS FOR THE YEAR AHEADNEW YEAR, NEW WORLD
4 July 2009 | Loyalty Management
Building relationships, one person at a time.Carlson Marketing knows how to take care of your customers. We have unparalleled experience launching and managing relationship marketing programs.
Our deep understanding of customer data translates into insight – and value – for you. Our full suite of services, creativity, strategy, execution, end-to-end operational excellence and enthusiasm all combine to make us the perfect marketing partner.
When you’re looking for direction on how you can turn customer engagement into organizational value, contact us.
Let our experience work for you. carlsonmarketing.com | 763.212.4520
WINTER 2010
DEPARTMENTS
LOYALTY FORUM
FEATURES
What’s on Loyalty360.orgLetter from the EditorContributors
Your Voice: Loyalty Management Readership Survey Amanda Chasteen, Loyalty 360
Q & A: Ask the ExpertsWhat have you learned in 2009 that will shape 2010? What should be on every marketers’ list of
“Loyalty & Engagement Resolutions”?
Behind the Brand/PeopleInterview with Kim Marotta, Vice President of Corporate Social Responsibility, MillerCoors Llc
BooksLoyalty Reads
Redefining LeadershipRick Blabolil, Marketing Innovators International, Inc.
Evolutionary Trends: Driving stronger relationships for improved business results in 2010 Taylor Duersch & Catrina McAuliffe, Carlson Marketing
Approaching a New Decade with New Strategies: Partnership Marketing Brittany Simmer, Vesdia Corporation
Investing in Customers Ahead of the Recovery David Rosen & Michael Greenberg, Loyalty Lab
Across the Ocean Blue Alexander Meili, ICLP
10:10 Loyalty Trends for 2010 Robert Passikoff, Ph.D., Brand Keys, Inc.
The Confluence of Data, Dollars and Desires Nicole Nunn Walker, MetroSplash Systems Group
Keeping Up in a Down Economy Bob Nelson, Ph.D., Nelson Motivation, Inc.
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WWW.LOYALTY360.ORGVOLUME 2 NUMBER 1
3Loyalty Management™ • WINTER 2010
This Month in
Investing in Customers Ahead of the Recovery—a whitepaper by Loyalty Lab
28
As VP Corporate Social Responsibility for MillerCoors, Kim Marotta expands her passion and commitment to creating stronger communities.
What drives the success of American and European loyalty programs?Across the Ocean Blue, pg.32
16
32
Build true loyalty by buildingbetter relationships.
A more strategic, data driven approach can help you move to the next level of loyalty. With genuine insights into the needs and expectations of your customers, you can talk with, treat, and reward different customers in unique ways. This is what we call true loyalty.
Bring this approach to life with comprehensive services from Maritz. It's our business to understand what matters most to people. Enable them with knowledge and tools. And motivate them to change behaviors. To start working on your relationships, stop by booth #100 at the Loyalty Expo.
Ready to learn more now? Visit maritz.com or call (877) 4 MARITZ.
WINTER 2010
TECHNOLOGY, TRENDS & REWARDS
BEST BUSINESS PRACTICES
Rewards Trends 2010“Variable Rate Rewards,” James C. Purdy, Bridge2
Solutions, Inc.“Travel Loyalty Program Redemption Trends,”
John Miller, Connexions Loyalty Travel Solutions“Distinguishing Loyalty,” Render Dahiya, Arroweye
Solutions“Concierge,” Michael Breault, Circles
Expanding the Universe of International Coalition Redemption Options James Watts, First Annapolis Loyalty
Globiphonization Dominic Hofer, Loylogic
2010: The Year You Invest in Social Media Jared Stivers, Walker+Stivers Analytics
Mobile Applications Advertising and Marketing Amit Gupta, InMobi
Loyalty Innovation
The Private Label Credit Card Dilemma Jeffrey Harris, SHC Direct
Engagement and the ROI of Results Measurement Todd Hanson, Catalyst Performance Group, Inc.
Three Components for a Successful Business Model Eric Granado, CSH Consulting
Ten Ideas To Build Morale In Any Organization Billy Arcement, MEd, The Leadership Strategist
Trends, Implications and Solutions in Engagement Marketing Bob Fetter, Pluris Marketing
Engaging Employees in the Road to Customer Loyalty Barry Kirk & Melissa Van Dyke, Maritz
Pushing Loyalty: Connecting employee engagement to customer loyalty Michael Konikoff, Fairlane Group
Extended Loyalty Program Profile Air Miles & My Planet
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WWW.LOYALTY360.ORGVOLUME 2 NUMBER 1
5Loyalty Management™ • WINTER 2010
Loyalty Management
Editorial & Production Team
Erin Raese - Editor in Chief
Mark Johnson - Contributing Editor
Caitlin Schar - Editorial Director
Kathleen Ninneman - Graphic Designer
Jet Litho Inc. - Print Production
Loyalty 360 Team
Mark Johnson - President & CEO
Erin Raese - COO
Amanda Chasteen - Manager, Marketing Operations
Charlie Deye - Director of Sales
Julie Hellebusch - Controller
Contacts
Article Submissions: Erin Raese ([email protected])
Advertising: Charlie Deye (513.226.0925)
To subscribe to Loyalty Management, visit loyalty360.org.
© 2010 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permis-sion is forbidden. The information contained herein has been obtained from sources be-lieved to be reliable. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing uthors and not necessarily reflective of Loyalty 360 and/or its affiliates. Loyalty 360 shall have no liability for errors, omissions or inadequacies in the information contained herein or for in-terpretations thereof. The opinions expressed herein are subject to change without notice.
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Write us at: [email protected]
This Month in
2010: The Year You Invest in Social Media
50
LOYALTY 360 ON THE WEB
6 Loyalty Management™ • LOYALTY360.ORG
what’s on loyalty360.org
SUBSCRIBE TO LOYALTY MANAGEMENT ON SCRIBD!
NEW MEMBER FEATURES
OUR LOYALTY WEBINAR SERIESyou may have missed …
Subscribe to Loyalty Management Magazine on Scribd! Check us out at www.Scribd.com/loyalty360
View the current and previous editions of Loyalty Management. Have a comment, question or concern? Scribble on our wall!
Webinar recordings from the series are available for Loyalty 360 members to access. Log on to loyalty360.org and visit the Multimedia section for a full listing.
Epsilon: Successful Loyalty Marketing: Developing New Member Marketing That Works, an Instructional Case Study
Kobie Marketing: iPhonifying Loyalty - Leveraging Today’s Mobile Technologies to Drive an Integrated Customer Loyalty Experience
Member MessagingLoyalty 360 members can now direct message other Loyalty 360 members. Search and view Loyalty 360 member profiles and send messages with attachments directly, without an introduction. Browse by name, company or member level and organize messages in folders.
Have something to share with all Loyalty 360 members? Post or schedule a bulletin along with an expiration date.
Member ManagementDesignated members can assign and manage company associate and/or client memberships.
First Data: ReadyLift Loyalty
Maritz: Engaging Employees on the Road to Customer Loyalty
Carlson Marketing Worldwide: A Brighter Future, a Better Way: Loyalty Marketing for Consumer Goods Packaging
knowledge. delivery. results.how motivat ing.
Let us motivate you.At A nion Loyalty Group (ALG), we o� er ways to drive pro� table behaviors among your customers using any means possible: points, miles, rewards, incentives, enhancements.
Our years of experience ensure we acknowledge, understand and anticipate marketplace and consumer trends, helping us design programs to motivate your customers’ behavior. Some of the most recognizable brands have employed our services to develop loyalty solutions to meet their pro� tability goals. We believe loyalty should be a business strategy with a positive ROI. And our proven loyalty solutions repeatedly result in pro� tability for our clients.
Visit us at www.a� nionloyalty.com/loyalty or call 800.622.4863 to learn more about our loyalty marketing services and how we can help create loyalty between you and your customers.
to learn more about our loyalty
Loyalty Management ad.indd 1 1/5/2009 9:59:36 AM
FROM THE EDITOR
8 Loyalty Management™ • LOYALTY360.ORG
Welcome to our first anniversary issue!
This issue takes a look at what we’ve learned from 2009 and provides thoughts, insights and trends for 2010 and beyond. With the challenges of the last few years now behind us, it is truly amazing how we are embracing 2010 and beyond with optimism, enthusiasm and openness to change.
Each of our contributors has shared their predictions and resolutions for the
new year. Not surprising, many of us are focused on technology. Technology
has grown fast in the past decade rapidly changing and influencing how
we communicate with each other and our customer. In this issue, we’ve
highlighted a number of new technologies in Loyalty Innovation on pgs 54-5;
social media (50-1), and mobile strategies (48-49, 52) which will no doubt be
embraced, tested and re-engineered in 2010.
It’s not just a new year, but a new world in loyalty. Here in the states, we’re
seeing significant convergence of strategies and technologies from our
neighbors in Canada, Europe, and Asia. There is a lot to be learned from these
other cultures; the influences will surely affect the way we communicate
with our customers and employees. In this issue we take a deeper look into
what the world community is doing to influence and impact loyalty strategies
around the globe. Compare our differences in Across the Ocean Blue (32-4).
See what is working for our neighbors up north in a special Loyalty Program
profile on pg 70.
2009 was a year of learning; from how to run an association to producing a
publication to continually learning and understanding the dynamics of the
CUSTOMER. As Mark and I continue to speak with you, we’re listening to
your requests for insights, ideas and support, plus we’re taking your inquiries
and actively developing insightful articles and building a diverse, educational
agenda for the 2010 Loyalty Expo, in Orlando Florida. Be sure to join us June
6 – 8 at the Omni ChampionsGate.
Sincerely,
Erin Raese
Editor-in-Chief
Loyalty Management
Welcome new Loyalty 360 Members:
AlterianBoost Rewards
Citibankedo Interactive
IncentiumMarketing Innovators
MocapayNielsenSears
Young America
2010 predictions
•Submit expense reports within 48 hours of trips
•Practice the Power of Nice—Finish the book and work on being nice
2010
CONTRIBUTORS
10
Eric Granado Eric Granado is Director of Issuing & Alternative Payments for CSH Consulting, a recruiting firm focused on the payments industry. The CSH Consulting leadership team has over 50 years of combined experience recruiting in the payments arena.
Michael GreenbergMichael is Chief Operating Officer at Loyalty Lab. Michael has worked in several roles since joining the company in 2004, and currently oversees daily operations. Before joining Loyalty Lab, Michael was VP of Marketing for Galyans.
Amit GuptaAmit Gupta, Co-Founder and Head of Business Development, InMobi. Amit spearheads InMobi’s growth efforts by focusing on strategic alliances as well as managing publisher relationships.
Todd HansonTodd Hanson is president and founder of Catalyst Performance Group, Inc. and leads the ROI of Engagement Partnership. He conducts ROI evaluations and trains in ROI Methodology™
Jeffrey HarrisPresident and CEO, SHC Direct. Jeffrey founded SHC Direct and leads its management team. Jeffrey has over 20 years of marketing, sales, sales management and client services/operations experience in the incentive and loyalty marketing fields.
Dominic HoferDominic Hofer is the CEO and Co-Founder of Loylogic, Inc. He is a seasoned loyalty expert and helped building multiple award-winning frequent flyer programs. He has a Degree in Law from the University of Berne, Switzerland.
Barry KirkAs the Director of Strategic Consulting for Maritz Loyalty Marketing, Barry Kirk assists clients in identifying and refining their customer engagement objectives, as well as defining solutions to drive customer retention and loyalty.
Billy Arcement Billy Arcement—The Leadership Strategist— is a professional speaker, leadership consultant and author of two books. He provides solutions for business and education leaders by turning knowledge into results. Learn more about his services at SearchingForSuccess.com.
Richard A. BlabolilRick Blabolil is president of Marketing Innovators International, Inc. Providing thought leadership to the industry, Rick is past president of the Incentive Marketing Association and Forum for PPMM, and vice president of the Incentive Research Foundation.
Michael BreaultMichael Breault is CEO of Circles, a leading provider of concierge, events and loyalty marketing services to Fortune 1000 clients. Circles has revolutionized how companies build life-long relationships with their customers and employees, driving behaviors that increase engagement, satisfaction and profitability.
Render DahiyaPresident and CEO of Arroweye Solutions. Render Dahiya has led Arroweye Solutions since 2007. Previously, he spent nearly 20 years at FedEx Kinko’s as one of its founding members, helping to build it into a nationally recognized brand.
Taylor DuerschVP—Decision Sciences—Carlson Marketing. Taylor has more than 10 years of experience leading customer analytics, and managing and evaluating marketing solutions in the B2B and B2C space.
Bob FetterSenior Vice President, Pluris Marketing. With more than 20 years of experience in sales, marketing and operations, Bob helps leading marketing organizations implement breakthrough ideas, and has helped design more than 150 multi-channel marketing programs for major business-to-consumer and business-to-business companies.
Loyalty Management™ • LOYALTY360.ORG
CONTRIBUTORS
Michael KonikoffMichael has spent over 26 years in marketing with the last 16 spent within the loyalty sector. As Senior Vice President, Business Development- Fairlane Group, Michael heads up strategy, including business modeling, planning and consulting.
Catrina McAuliffeVice President, Brand Planning—Carlson Marketing. Catrina has more than 20 years of brand planning experience working with clients to develop consumer centric, strategic marketing plans and creative communications including advertising, public relations, digital, relationship marketing and design.
Alexander MeiliEuropean Planning Director, ICLP. Alexander is responsible for the strategic account planning of new and existing clients in Europe. He is influential in furthering ICLP European expansion and recently set up a new office in Madrid.
John MillerDirector of New Business Development for Connexions Loyalty Travel Solutions (CLTS), John brings over 10 years of loyalty travel experience and over 20 years of travel industry experience including positions within industry relations, product development and sales.
Bob Nelson, Ph.DBob Nelson, Ph.D., is president of Nelson Motivation Inc. (nelson-motivation.com) and author of the new book Keeping Up in a Down Economy: What the Best Companies Do to Get Results in Tough Times.
Robert Passikoff, Ph.DRobert is founder and president of Brand Keys, Inc., a customer loyalty and engagement research consultancy based in New York City. He is the author of the best-selling Predicting Market Success, and co-author of The Certainty Principle.
James C. Purdy Jim is a founder and executive vice president of Business Development for Bridge2 Solutions, Inc. His career spans three decades in awards development and strategy, managing sales teams and client programs in various executive roles.
David RosenDavid is SVP, Strategy and Channel Development at Loyalty Lab. Over the past two years, David has designed innovative loyalty programs for more than three dozen top national brands in the multi-channel retail, consumer goods and services, media and travel industries.
Brittany SimmerBrittany Simmer is the vice president of business development for Vesdia’s leading merchant-funded rewards network and partnership marketing programs for retailers, banks and the hospitality industry.
Jared StiversJared Stivers is the founding partner of Walker+Stivers Analytics Consulting a boutique agency based in San Francisco that focuses on quantifying social media for marketers.
Melissa Van DykeEmployee Engagement Practice Consultant for Maritz, Melissa consults with clients on how to build strategic recognition solutions that engage, align and motivate employees to higher levels of performance. Van Dyke’s strategic approach allows companies to harness the power of recognition that resonates to drive business results.
Nicole Nunn WalkerNicole has spent two decades in Marketing Management roles with Fortune 500 companies including CA, Sterling Software, AT&T, Amdocs and Texas Instruments. Nicole currently serves as VP of Marketing for MetroSplash System Group, providers of the FuelLinks loyalty platform.
James Watts James Watts is an Associate at First Annapolis with a focus on the card issuing practice area and has been a part of the Strategic Loyalty Initiative since its inception.
If you would like to contribute to a future issue of Loyalty Management please contact Erin Raese at (630) 235.8251 or [email protected].
11Loyalty Management™ • WINTER 2010
LOYALTY FORUM: YOUR VOICE
12 Loyalty Management™ • LOYALTY360.ORG
Loyalty Management Readership Survey
Here’s what you’re saying about the Loyalty Management magazine:
•41% want more information on financial loyalty programs
•44% want to see more about technology
•12% share the magazine with your friends and family
•88% want to read interviews with brand leaders•37% want to see less focus on restaurant loyalty•23% have reached out to our advertisers
•61% discovered new companies, products or services through the ads•50% want to see more coverage on Engagement
What topics interest you most?Eli Cohen, Polo Ralph Lauren
“Case studies with metrics pointing out successful and non-successful programs.”
Harmen Donker, FunMiles Antilles NV“Supporting teamwork within my own company as a means of developing loyal clients.”
Jean Eric Tousignant, Laurentian Bank of Canada
Best practices in direct marketing for engaging and on boarding new customers, reactivating lapsed customers, and retaining best customers.Heidi Brien, Sodexo
“Use of CRM techniques to develop loyalty programs.”
On average, how much do you read per issue?
44% Read Most
26% Read Some
9% Skim
21% Read All
by Amanda Chasteen, Loyalty 360
13
Ask the Experts
Q&AWhat have you learned in 2009 that will shape 2010? What should be on every marketers’ list of “Loyalty & Engagement Resolutions”?
Q:
A: What happens to consumer and employee loyalty
and engagement when an economy is in turmoil? How
do we define trends that are shifting month-to-month,
a society in reactionary mode, and plan for the future
of market satisfaction? 2009 has brought forth a set of
shifts which may immediately sting, but which carry
with them the promise of a more streamlined model
with the potential to benefit businesses and consum-
ers alike through its adaptability. Let’s consider two
trends which are of particular importance in looking
ahead to 2010.
2009 Business Trend:Restructuring & refocusing
2010 Business Advantage:As hard as the 2009 trend has been on individuals,
from an objective business perspective, consumers are
looking at more streamlined, focused providers who
realize the importance of serving their customers well.
Consumers will also find businesses who are thinking
outside traditional lines, creating partnerships and
hiring expert contractors to complete work instead
of carrying the overhead of maintaining burgeoning
departments. Narrowing focus also comes with a dis-
tinct advantage for loyalty and engagement programs:
the ability to more rapidly understand what is drawing
in consumers and keeping them coming back for more.
2009 Individual Trend:Fracturing & rethinking; a surplus of highly skilled
people in the market for work
2010 Individual Advantage:Entrepreneurship is on the rise and individuals are
gaining back a sense of empowerment regarding
their definition of work satisfaction and employ-
ment. Just as businesses are gaining focus, indi-
viduals who have been laid off are challenged to
hone in on their passions and springboard from
those into the next stage of their careers. For many,
this means talent actualization and a return to
looking at work as more than a job. What does this
mean for loyalty and engagement looking forward?
Paradigm shifts are powerful and workers are re-
defining what it means to be loyal in the workplace.
Many are no longer focused on finding a long term
fit, but instead on finding a project-based align-
ment of skills. For consumers, the trends in flex-
ibility and specialization will trickle into buying
habits and expectations, as people learn to rethink
their priorities and how they define careers, they
will rethink what they expect of companies, shat-
tering the definition of what it means to be loyal
and taking engagement to a new depths.
Loyalty Management™ • WINTER 2010
—Connie ChesnerFounder and Consumer Behavior Strategist,Right Brain Discovery
continued on next page »
Write us at [email protected]
Do you have a question for our panel of experts?Q:
14
Loyalty Forum: Q & A (continued)
A: This past year marked a complete para-
digm shift in the financial services industry. In the
aftermath of the financial collapse, lawmakers quickly ush-
ered in legislative and regulatory changes that are forcing
banks to reconsider their business models and envision new
ways of doing business. The CARD Act of 2009, for example,
changed the game for issuers. By limiting rate and fee in-
creases, and regulating marketing practices, the law makes
it more challenging for issuers to manage risk and maintain
profitability. In addition, new regulations on overdraft fees
that require consumers to opt-in threaten to further reduce
fee income. To compensate, many banks may pass costs along
to customers who will bear more direct expense for formerly
free or low-cost services like free checking accounts. In other
cases, customers may be denied services altogether. Further-
more, pending legislation related to interchange and a pro-
posed Consumer Financial Protection Agency could bring
more blows to the embattled banking system.
In addition to these legislative developments, changes in
consumer behavior that took shape in 2009 promise to be-
come further entrenched in the years to come. The era of free
spending came to a halt in late 2008, replaced by a new era of
accountability where consumers are reasserting control over
their finances. Fifty-nine percent of Americans say they will
resist spending at pre-recession levels; thirty-eight percent
are reducing their use of credit cards, while the savings rate is
projected to average 4% next year—the highest rate since 1998.
One major beneficiary of these changes is the debit card. As
consumers seek to entrench their newfound frugality, they’re
migrating to debit and prepaid products. In fact, Visa reported
that their debit volume surpassed credit for the first time ever
in late 2008. Even though debit and prepaid products are ex-
periencing growth, deciding how to maximize profits within
these product lines remains an area of uncertainty.
Loyalty Management™ • LOYALTY360.ORG
Today’s customers demand engagement from those companies they do business with throughout every stage of their relationship with products and services that provide value and a sense of control.
—Marti BellerPresident Affinion Loyalty GroupAny time the status quo is
shaken up, it’s easy to focus
on the resulting threats that emerge. However, these shake-
ups present new opportunities for those who can view threats
as a chance to improve upon business as usual. For instance,
some financial services firms have chosen to view consumers’
renewed interest in budgeting as an opportunity to position
themselves as partners who can help customers to better man-
age their finances. Take Chase’s new offering, Blueprint. Blue-
print is a financial management tool that allows customers to
select which purchases they wish to pay off immediately and
which they prefer to finance over time. Spend tracking tools
that help customers manage spending in various categories
round out the offering. While the net effect of this service is
not new, the way in which it is implemented is visionary. It
promotes customer engagement by encouraging consumers to
actively participate in managing their spending at a detailed
level. This kind of engagement will help Chase to retain their
most valued customers despite regulatory and economic head-
winds. Other banks are also seizing upon these trends. Bank of
America’s ‘Add it Up’ program and Discover’s ‘Spend Analyzer’
tool, both introduced this year, seek to align themselves with
current customer needs.
As loyalty managers emerge from 2009 and look forward
to the years ahead, they will need to adapt to a landscape
where accountability and restraint dominate the new con-
sumer mindset. Today’s customers demand engagement
from those companies they do business with throughout
every stage of their relationship with products and servic-
es that provide value and a sense of control. Those orga-
nizations that can fill those expectations by transforming
negative news into positive strategies will earn long-term
customers and increased market share.
I’m beIng pulled In a mIllIon dIfferent dIrectIons. except yours.
www.acxiom.com • 888-3ACXIOMGLOBAL INTERACTIVE MARKETING SERVICES
mobileemail website display ads direct mail call center point of sale
connect wIth more people In more ways.In a world where consumers are bombarded by marketing impressions, Acxiom enables marketers to reach the right people with the right message across all key marketing channels: email, mobile, website, display ads, as well as offline.
A:
—Dan ZimanDirector, Marketing ProgramsLithium Technologies, Inc
When it comes to social marketing, customer communities, and other sharing activities on the web, 2009 appears to
be the year that social networking solutions began to address real enterprise objectives for both B2B and B2C businesses. What we learned
is that top level marketing messages are being heard less, and the top buying influence has shifted to the voice of the customer. Keeping the
attention of consumers has gone from difficult to nearly impossible.
2010 opens up new realms of possibilities. Those businesses that invest in the online customer experience will be the winners of tomorrow.
You have already seen how prospects and customers want to listen and engage with friends on social networks, get recommendations on buy-
ing decisions, blog and tweet about their interactions, and obtain expert support quickly and easily through the web. Right now would be a
great time to build a plan as to how you will reach your target audience and ensure they engage with your brand to incentivize repeat visitors.
Here are some of the areas you many need
to jump-start or revamp: 1.Larger focus and investment into mobile interactions. Mobile
phone browsers are vastly improved along with
hardware that can search and display content
(text, images and video) faster than ever. 2. Look at how multiple touch points (corpo-rate web site, mobile, call centers, commu-nity, and other social sites) with customers can be integrated so that you are leveraging a
multi-channel experience and not being seen as
a disparate company. And, 3. Measurement—as
in knowing the net effect. When it comes to so-
cial, many companies have just begun to evalu-
ate their efforts, while others have had strict
performance metrics from the start. Either way,
it’s more important that you measure what ac-
tion your prospect or customer took as a result.
For example, if you’re measuring web referrals from
social, then measure how those visits are converting
to buyers. If you’re measuring page views, find out how
many of those were paying customers.
2009 was one of the greatest evolutions in social web
interaction, and no doubt 2010 will bring a new set of
ways to engage. I know we have got to take those extra
steps to stay ahead of the competition and maximize our
marketing investments.
2009 appears to be the year that social networking solutions began to address real enterprise objectives for both B2B & B2C businesses.
L
Vice President Corporate Social ResponsibilityMillerCoors, Llc
Before MillerCoors you were a trial lawyer. How did you decide to make the change from lawyer to corporate executive? I truly enjoyed being a trial lawyer but after thirteen years of practicing criminal
defense law, I was looking for the opportunity to expand my skill set and
challenge my capabilities in a different profession. When I was a trial lawyer,
I worked closely with the local and state non-profit agencies and tried to
partner on initiatives that created jobs, offered alcohol and drug treatment,
and improved our communities. My role as Vice President Corporate Social
Responsibility for MillerCoors has allowed me to expand my passion and
commitment to creating better and stronger communities while continuing
to create sustainable partnerships with local, state and federal non-profit
organizations.
You’re responsible for Corporate Responsibility. What exactly does that mean?At MillerCoors, we wholeheartedly believe that with great beer, comes great
responsibility. That’s why we’re working to grow our business the right way
by focusing on five key responsibilities: alcohol responsibility, environmental
sustainability, people and community investment, a sustainable supply chain,
and ethics and transparency. My job, along with my team, is to create and
implement programs and initiatives in each of these areas. You can check out
our new web site GreatBeerGreatResponsibility.com to learn more about what
we do.
If you weren’t working for MillerCoors, what would you be doing?I’d be working in some capacity in the legal profession, preferably as a judge.
What do you consider your greatest achievement? Being a mother of four healthy, happy children.
When you’re fortunate enough to have free time, how do you spend it?I am passionate about golf—although there are days when my game seems
more like work than pleasure.
For years, I was proud that all of my children enjoyed the game, that is until
my twelve-year old son and fourteen-year old daughter both started driving
their balls thirty yards past mine grinning and laughing all the way. The game
really lends itself to great camaraderie among friends and family.
Kim Marotta is Vice President Corporate
Social Responsibility at MillerCoors. In
her role, Ms. Marotta is responsible for
implementing MillerCoors' sustainable
development strategy and managing
MillerCoors' alcohol responsibility initiatives.
She also works closely with both parent
organizations, SABMiller and Molson Coors,
to drive performance in these key areas.
My role as Vice President Corporate Social Responsibility for MillerCoors has allowed me to expand my passion and commitment to creating better and stronger communities while continuing to create sustainable partnerships with local, state and federal non-profit organizations.
Kim Marotta
16
LOYALTY FORUM: BEHIND THE BRAND/PEOPLE
Loyalty Management™ • LOYALTY360.ORG
Which book(s) are you currently recommending?I would recommend Loving Frank by Nancy Horan. It’s a riveting story about Frank Lloyd Wright
and his mistress, Mamah Cheney, and their much publicized affair. While Mamah made
tremendous personal sacrifice to pursue her love for Frank, in the end she died tragically.
Which talent would you most like to have? I wish I had a beautiful singing voice…Actually, any singing voice would be great with me. I love
music, but know better than to sing out loud for fear that I may bring down the rafters—but not
in a good way.
Which person has made the most impact in your life?The person who had the most impact on my life is my grandmother, who we affectionately
referred to as Nonnie. Not only did she help raise me and my brother and two sisters, but she
also moved in with us after our first child was born and helped us raise our children. She lived
with us for over ten years—until the age of 87—and brought a lot of love into our home. She also
taught me many valuable life lessons such as:
• Sit down with your family and have dinner every night no matter what time the food gets on
the table. It’s more important to spend the time with your children than to be prompt with the
meat and potatoes.
• Always buy the kids snow boots before the first snowfall because after that you’ll never be able
to find them on the shelves.
• Never give up on the Chicago Cubs.
Please tell us about your last ah-ha customer experience.Recognizing that a company’s commitment to
sustainability is important to consumers and that it
influences their purchasing decisions and brand affinity.
What can we expect from MillerCoors in 2010?We’ll continue to make the best beer in the world. We’ll
also continue to promote responsible consumption of
our products, support our communities and enhance our
efforts on sustainability.
Word of advice for a novice marketer:While my marketing expertise at MillerCoors is limited
to the areas of alcohol responsibility and sustainability, I
believe it’s important to have a strategic vision and theme
that’s reflective of that vision. More importantly, you must
believe in that vision and commit resources to it in order
to inspire others to do the same.
What’s your personal motto?Laugh often and love much.
L
17
2010 Resolutions
1. I will celebrate life’s special moments—Starting on New Year’s Eve by making the most of the rare, blue moon which only occurs approximately every 20 years and celebrating with an equally rare brew: the limited-edition Blue Moon Grand Cru.
2. I will cut calories—And enjoy MGD 64, a light-refreshing beer with only 64 calories.
3. I will be responsible—And plan ahead to always designate a driver.
Loyalty Management™ • WINTER 2010
2010
18
Loyalty Reads“I LOVE YOU MORE THAN MY DOG”Five Decisions That Drive Extreme Customer Loyalty in Good Times and Badby Jeanne Bliss (A 2010 Loyalty Expo Speaker!)October 2009 | Portfolio
Consumers now more than ever are carefully considering how they spend every dollar. At the same time, social
media that gives buyers a public forum for their thoughts and experiences is enjoying a meteoric rise. Together, they’ve created a
completely new business culture, one where businesses need not just loyal buyers, but passionate, vocal fans—the kind that rave about you to
friends, neighbors and even complete strangers and drive explosive growth via Twitter, Facebook and e-mail.
Only an elite few businesses have these true advocates, and no one knows how to create them better than Jeanne Bliss, who has served as the
senior customer executive at Lands’ End, Allstate, Coldwell Banker, Microsoft and Mazda. Her new book, “I LOVE YOU MORE THAN MY DOG”
Five Decisions That Drive Extreme Customer Loyalty in Good Times and Bad, outlines the five decisions that a company must make in order to catapult
itself from mere business to beloved company—deciding to believe, deciding with clarity of purpose, deciding to be there, deciding to be “real” and
deciding to say sorry.
The book pulls examples from companies who have enjoyed almost cult-like status among their customers, including Trader Joe’s, Harley
Davidson, Zappos and Zane’s Cycles, which sells more than $13 million worth of bikes from a single store. In “I LOVE YOU MORE THAN MY DOG”
Bliss explains how implementing these five decisions can truly transform your company, elevating it to beloved status and inspiring customers to
begin telling your story for you, forming an army of cheerleaders who will, in essence, do your promoting for you.
THE SOCIAL MEDIA MANIFESTO: The Revolutionary Guide to Build, Manage, and Measure Online Networks in Businessby Brian SolisFebruary 2010 | Wiley
What if you had an instruction manual for Social
Media? Now you do. The Social Media Manifes-
to is the ultimate guide to branding and building
your business in the era of the Social Web.
The Social Media Manifesto thoroughly exam-
ines the social media landscape and how to ef-
fectively use it in business—one network and
one tool at a time. The guide for branding your
business in the era of the social web, this book leads
you through the detailed and specific steps required for conceptualizing,
implementing, managing, and measuring a social media program. Both
small businesses and Fortune 500 companies will increase visibility over
their competition, build communities of loyal brand enthusiasts, and ul-
timately increase profits.
•Everything you need to know about social media marketing, start-
ing with where you need to start and how to determine which social
networks to participate in and why
LOYALTY FORUM: BOOKS
READ AN EXCERPT FROM JEANNE’S BOOK. Chapter One from “I Love You More Than My Dog” is available at Loyalty360.org
Enter to win one of ten copies of “I Love You More Than My Dog” by Jeanne Bliss. Tell us what company (or brand) has earned your love & devotion. Who do you “Love More Than Your Dog?” Write: [email protected]
•How to come up with effective ideas based on the proven examples
of other peers and companies
•How to get buy-in from the team
•Ways to establish a supportive ecosystem for these new activities
•Specific advice for building a brand and community in each network
•Direction in participating in each network in ways that benefit your
personal and professional brands
•Keys to increasing revenue and inspiring action based on goals
•Defining and measuring ROI and adapting it to existing benchmarks
and metrics, while defining new methods for measuring success over
time
•Advice for creating new opportunities and marketing programs us-
ing lessons learned in social media
This is the first book that includes everything readers need to learn, begin,
and accelerate effective social media programs. Readers will walk away
with everything they need to know in order to turn the Social Web into a
powerful tool for branding and building their businesses.
Loyalty Management™ • LOYALTY360.ORG 19
EMPLOYEE ENGAGEMENT: A Roadmap for Creating Profits, Optimizing Performance, and Increasing Loyalty by Brad Federman August 2009 | Jossey-Bass
“If you think you know everything it takes to attain associate/employee engagement, put yourself to the test. This book provides a holistic approach to engagement that will create the competitive edge required to succeed in this economy.”
-Sharon S. Bilgischer, senior manager, logistics global talent, curriculum and documentation, Wal-Mart Stores, Inc.
There is clear and mounting evidence that employee engagement keenly correlates to individual, group, and corporate
performance in areas such as retention, productivity, customer service, and loyalty. This timely treatment provides a
comprehensive framework, language, and process that genuinely connects People Strategy with Business Strategy. It
offers a research-based blueprint for looking at employee engagement with the same regularity and importance as any
other aspect of the organization.
TAKE THEIR BREATH AWAY: How Imaginative Service Creates Devoted Customers by Chip R. Bell, John R. PattersonMay 2009 | Wiley
“Are you bored? We’re so spoiled that when something is merely good enough,
we just walk away. Chip and John explain that the surefire method for growth and
customer loyalty is simple: don’t be boring.” —Seth Godin, author of Purple Cow
and Tribes
“Take Their Breath Away shows how legendary customer service delivery can win
and keep devoted customers for life. I LUV this fantastic book.” —Colleen Barrett,
President Emeritus, Southwest Airlines Company
“No one knows more about creating profit through service than Chip and John. If you want to know the best way to do it, read Take Their Breath Away. The examples in this book will certainly start your creative juices flowing and help your organization take your customers’ breath away.
—Howard Beharformer, President, Starbucks Coffee International
Take Their Breath Away shows you how to create exuberantly devoted customers by providing peerless, mind-blowing customer experi-
ences that leave them stunned. Like casting a magic spell, inventive customer experiences transform people from simple buyers into
faithful brand advocates. In an era when value-added has gotten way too expensive, value-unique can provide a fresh approach to
getting bottom-line impact.
Using real examples, this provocative guide shows you how the best brands create unique, customer-endearing practices that lead to
irrational loyalty. The book reveals twelve amazing and imaginative strategies, explaining how they work and how to implement them.
Whether you operate a giant corporation, a small business, or the department down the hall, these strategies will amaze you and
surprise customers.
There is a huge difference between good customers and those who are truly, passionately devoted to a brand or organization. The kind
of customers you really want are those who forgive your brand when it makes mistakes, recommend your business to everyone else,
and defend it when others are critical. Those aren’t just customers; those are devoted followers—and they can make all the difference
between chasing after your competitors or leaving them in the dust.
Take Their Breath Away gives you the inspiration, practical strategies, and creative ideas to enchant, surprise, and treat your customers
to something more than just an encounter. Learn to take your customers’ breath away and they’ll take your brand to heart.
Loyalty Management™ • WINTER 2010
by Rick Blabolil, Marketing Innovators International, Inc.
LEADERSHIP with a capital P... for People
Redefining Leadership
We all can attest to a changed world. 2009 has set the next standard for the speed by which
we will inevitably live. Whether you call it change, transformation or evolution, business will
remain in a constant state of flux. The flow of information, global interaction and the variability
in decision making are the ingredients of a perfect storm. These observations are not about doom
and gloom—they are perceptions and reality. How we deal with them will be the test of our
optimism and our leadership.
What have we witnessed in relation to incentives, recognition and loyalty?
20
FEATURES
Loyalty Management™ • LOYALTY360.ORG 21
n 2009, companies have been just
trying to persevere. They didn’t really
know what to do with their people initia-
tives. The world was injected with mixed
messages. We talk about the fact that people
aren’t motivated by “cash” and yet we reflect
on the drivers of corporate behavior such as
AIG and Bernie Madoff—where greed is the
apparent elixir. The toxic behavior of certain
leaders derailed the trust relationship be-
tween many groups of people: manager and
employee, shareholder and company, govern-
ment and corporate governance, and general
public and the establishment. The resulting
knee-jerk reaction of the business commu-
nity was to pull back spending on programs
aimed at motivating employees and channel
partners.
The supply side of the equation was para-
lyzed by political and resultant negative pop-
ular opinion. While companies ran for cover
on the supply side they needed to stem the
tide of lost customers, and established loyalty
programs to keep or earn their business.
The irony is that corporations treated
“worker” separate from “consumer” and
failed to realize that they are two sides of the
same coin. When we live as a consumer we
are aware of the way we want to be treated,
and realize that this is the way we should
treat those we serve. This becomes more
obvious in difficult times. We become more
empathetic with others. But too often this
wide spread empathy is short circuited by
the senior leadership of big companies. Such
was the case this year as too many companies
I
continued on next page »
reduced their work force, reduced benefits
and expected people to produce more and
wait blindly to be acknowledged or appreci-
ated for their efforts while serving their best
customers.
While companies sense the world is pass-
ing through a profound transformation, they
are frequently looking for answers to guide
their understanding and help them make the
best decisions. Those that are quick to adapt
have a rare opportunity to create a competi-
tive edge by selling in the “new normal.” The
name of the game is transformation…and a
new kind of leadership.
A little over a year ago, everyone was talk-
ing about the war for talent. The threat of
losing the baby boomers in the workforce
to retirement fostered a concern that expe-
rienced leadership would leave a vacuum in
corporate management. The recession has
changed this assumption dramatically. Baby
boomers, along with most of the workforce,
are desperately hanging on to their jobs.
With individual retirement funds and sav-
ings in crisis, most boomers will not be retir-
ing for another five years or more. Boomers
staying in their jobs, combined with those
who have been laid off this year, will create a
long jobless line for younger workers. The re-
cession is also forcing people to take any job
to generate income and health care benefits.
This has created a diverse mix of ages and de-
mographic profiles in jobs at all levels.
The atmosphere in the workforce is ten-
able at best. Unemployment is rampant and
will plague our society for several years. The
capital markets have recovered a certain
amount of corporate value, but there re-
mains immense volatility in light of wide-
spread uncertainty. Three-digit swings in
the DOW are common place. Productivity
is up, but national unemployment is 10.2%.
As such, “job satisfaction” is up for the
mere reason that having a job is satisfying
enough. In cases where hiring is occurring,
it’s now common that the skill sets of those
being hired are “overqualified.” Companies
are taking advantage of this phenomenon of
high value, low cost.
Market volatility and focusing on short-
term rather than long-term will force a
rethinking of how decisions are made and
money is earned. The masses are making
their statement; the consumer will cast
their vote through purchasing. “Corpo-
rate social responsibility” is being pulled
through by the public. In reaction to the
economic downturn, companies have taken
notice of thinking more broadly—beyond
their boardrooms. Our planet and our peo-
ple belong in the same dialog as profit.
So who will consumers be loyal to? Due
to the distrust, loss of wealth, higher costs,
government intervention and recession,
people will look for “good people” to work
with, work for and buy from. Do they trust
the company, the brand, the people run-
ning the company or the people in the front
lines? Corporations will have to step up to
corporate social responsibility in order to
create loyalty from both internal and exter-
nal audiences.
Loyalty Management™ • WINTER 2010
Corporations treated “worker” separate from “consumer” and failed to realize that they are two sides of the same coin. When we live as a consumer we are aware of the way we want to be treated, and realize that this is the way we should treat those we serve.
22
Leadership will need to redefine itself.Based on the combination of these factors, leadership will have to be redefined.
Successful leaders will need to be focused on people. They will need to be authentic
and genuine in seeking conversation and collaboration—and mean it. There cannot
be lip service; this will get flushed out in these market conditions. The intent of
leadership and its purpose will be rewarded or rebuked, depending on the level of
trust and loyalty it has built with its employees and partners. This is when people
will become the defining factor.
Leaders will need to know that people are a company’s greatest assets, and their
front line of defense in tough economic times. Working with their employees, suc-
cessful leaders can weather the storm and position themselves advantageously for
better economic days. They understand that their employees and channel partners
are the means to innovation, cost savings, increased profitability, organizational
growth, and more satisfied and loyal customers.
Leaders will need the fortitude and courage to run against Wall Street’s addic-
tion with short-term results (quarter by quarter) and manage for the long-term—a
series of quarters strung together with a vision of continued success over time.
So what is profound in 2009? The wave of economic success driven by think-
ing only of “me” has washed up on the beach. Society and business must redirect
itself to the mentality of “us.” It’s no longer about how great an individual we are,
it’s about how we function together. The sales proposition will be about the buyer
not the seller. Competition will remain important, but winning at the expense of
someone else, or by negatively impacting our society or environment, should not be
part of the win/win strategy.
This is not a story of “kumbaya”—it is about changing a mindset in light of an eco-
nomic downturn. Unemployment is likely to remain high for the next 24 months
and consumer credit will be tight. Corporations will need to value the contribu-
tions of their key asset—people—while they navigate cost containment. The busi-
nesses that truly do the right things for the right reasons will attract the top talent,
customers and investors. Loyalty will be a function of clearly communicating the
heart of a company, its intent and purpose. That’s capitalism at its best.
Flexibility is the new normal.The baby boomers have a new timeline, and
those who were set to retire will remain
in the workforce for several more years.
The interesting aspect is that not only will
companies choose the “over-qualified”
workers because they are available at a low
cost, but they will incent them. Companies
realize their value and will find a way to
hold on to them as long as possible. As
the economy turns around there will
be new fluctuation and turnover. In the
meantime, there will be wide variance
of the demographics and skills of people
holding similar jobs in the workforce, and
it will confound the norm. Job performance
will blur beyond job descriptions and
compensation. Recognition and incentives
will become more creative to accommodate
the over-qualified, and reward systems will
become very personal.
It’s a conversation economy.The “sales proposition” has evolved into the
“buyer’s proposition.” Sales 2.0 is about the
alignment, collaboration and acceleration
that results from embracing the buyer’s
perspective and needs in your company’s
go-to-market strategy. It combines
customer-focused processes with Web 2.0
productivity and technologies to enhance
the art and science of selling while creating
customer value. This is not a fad, it is a
paradigm shift. The old top-down “push”
approach has become obsolete in today’s
marketplace. The power has switched
from the seller to the buyer in the new
“value provider” mindset. Companies must
demonstrate a real understanding of their
customer’s needs and be ready to deliver a
solution tailored to align with each client’s
business objectives. Are sales people nimble
and agile enough? Incentives, loyalty and
engagement initiatives can play a key role
in driving and rewarding behaviors that help
create the required change and lead to the
desired results.
This is not a story of “kumbaya”—it is about changing a mindset in light of an economic downturn.
Predictions for 2010
L
Redefining Leadership (continued)
Loyalty Management™ • LOYALTY360.ORG
2010
Does your brand have a loyal following?
Loyalty goes beyond points and transactions. It is the mechanism that engages your brand with consumers.
Epsilon knows loyalty.Our loyalty marketing thought leaders can help you build
loyalty solutions that create meaningful customer interactions.
Loyalty is Earned.
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24
oyalty marketing is evolving, and the trends year to year aren’t
dramatic; they’re evolutions. When you look at what really drives suc-
cessful relationship marketing, the foundations haven’t changed that
much—nor should they. What’s changed are the cultural and techno-
logical advances to support the core elements of good marketing to
drive customer relationships, engagement and loyalty.
We’ve highlighted some trends and made some predictions for 2010
around analytics and customer dialogue specifically that we’re seeing
locally and globally, across the street and around the world. The com-
mon denominator? All roads lead to building stronger customer rela-
tionships.
Fueling The Analytics Engine A golden age of marketing analytics is upon us. Over the past few
years several bestselling books have espoused the value of analytics
to drive decision making in every aspect of business and across every
industry. At the same time customer loyalty programs continue to pro-
liferate as a means of capturing and linking the data required to fuel the
analytics engine. Two prominent analytic objectives are being adopted
almost everywhere we look.
1. Improve the efficiency and effectiveness of marketing spend down
to the penny.
2. Find opportunities in the customer data to get partner participa-
tion and funding to offset loyalty program costs, increase revenue
streams, acquire new customers.
In 2010 companies will go after these objectives in a ways that will
eventually lead to the Holy Grail of customer relationship management.
Here’s how:
First, companies will continue to get bigger and faster in terms of the data available for analysis and the degree to which every useful nuance in the data can be discovered. Companies
will increase their use of data appliances which speed data processing
and analysis by factors of 10 or even 100. Suppliers like Kognitio, Ne-
tezza and Xtreme Data are enabling marketers to sift every transaction
from every customer over extended periods of time revealing opportu-
nities to increase sales via strategic offers and product bundling.
This is true in industries from telecom to grocery.
The volume of analytics that can be done in the presence of
these data processing speeds and the innovations that will occur
will be staggering when compared to what was being done even
two years ago. Best of all, the price is right when compared to the
cost of the infrastructure many large and mid-sized companies
have employed to enable even the most rudimentary of analytics.
Second, companies will get smarter. They will get smarter
about how they make money from customer relationships and will
realize that the relationship outcomes matter just as much as the
effectiveness of programs and tactics. This will motivate market-
ers to find and implement marketing tactics that not only improve
the effectiveness and efficiency of marketing spend, but that do so
while building the strongest possible relationships with customers
and prospects. Don’t think this matters? Then watch out for those
that do. Soon we will see the emergence of companies that can
and do profitably build one-on-one customer relationships, with
every customer, in a way that destroys customer consideration for
competitors and puts out every relevant product and service of-
fered by the company, building that relationship into play.
Interactions Not Just Transactions Drive Stronger Customer Relationships.
To build successful customer relationships, and to build loyalty
marketing programs that will “win” in today’s market, requires
that companies recognize customer interactions count as much
as customer transactions. This means looking at a customer from
more than just the economic side. But primarily we see a continual
focus on companies recognizing the economic side of the equa-
tion, rather than recognizing the value of every interaction of that
customer—whether it’s using multiple communication channels,
writing reviews, referring peers, etc. The value of building relation-
ships based on the “whole” person will drive a new perspective
and greater understanding of your customer to put you on the path
to building stronger relationships and improved business results.
FEATURES
by Taylor Duersch & Catrina McAuliffe, Carslon Marketing
Evolutionary Trends:Driving stronger relationships for improved business results in 2010
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Loyalty Management™ • LOYALTY360.ORG
Customer Dialogue - It’s All About Me. And Me.We all know from personal experience life is busy. There’s fast-talking dia-
logue on television; advertising on the internet, and even in the bathroom stall;
it’s on the television, the subway, the highway; and there’s direct mail, junk
mail and e-mail that’s anything but relevant to me. At the same time, we all
have more control than ever to choose who we engage with visually and con-
versationally—DVR’s, no-call lists, email opt-out, and the ability to ignore con-
nection requests. So what’s going to happen in 2010? We see three key trends:
1. Make it About Me - Emergence (or Resurgence) of “Me”There is so much going on, consumers are spacing everything out, except
when it is obviously and demonstrably personally relevant. This has a few key
consequences.
Be seen as wanting to know, hear, acknowledge and respond to customer
concerns. Listening has never been more important or relevant. Standard an-
swers (ex. FAQs) only take you so far, logic also has to play a part of the con-
versation—making sure that the answer takes into account the situation, the
customer value, their emotional state and their ability to influence others. It is
a challenge to do this without dialogue.
An interesting outcome of this has been the emergence of “we research”
both among consumers and corporations. A recognition of the importance of
trusting our own judgment and similarity to our consumers in our decision-
making ability.
2. Today’s Cause Is “Me”Recent proprietary research conducted by Carlson Marketing examined
two concepts, one for a cause-related program and one that helped consum-
ers save money. When rated monadically both appeared to perform identi-
cally. However, when asked to choose between the two, consumers chose the
one that directly benefited them. We believe the recent economic events have
forced consumers to protect their own and their families interests first, in spite
of good intentions. Consumers are often interested in a deeper relationship as
long as there is something in it for “me”:
•make “my” life simpler
•meet “my” need for products, emotions, experiences and connections
•let “me” serve myself until “I” need you, then be ready to help “me”—
whatever it takes
This trend is likely to continue both metaphorically and literally.
Literally, “causes” today act as “Merit Badges” (Iconoculture).
In 2010, it’s worth thinking through “what does your brand/
company represent that resonates with the consumer?”
•Are you connecting with causes that are relevant to them?
•Are your positive actions making it easier for them to jump
on the bandwagons they believe in, but wouldn’t otherwise
have a reason, understanding or connection?
•environmentally-friendly
•natural/organic
•locally produced
•fair trade
•humane
Metaphorically, the economy has made it not only socially ac-
ceptable, but cool to be a smart shopper. Thrift is a “badge” for
many consumers and a reflection of concern for themselves and
family. Recognizing this in dialogue is important to remember
and defining the “right” value proposition is key.
•ostentation is out, and savings and “smarts” are in
•belonging to rewards programs and earning “something for
nothing” is a sign of “smarts” rather than miserliness
•understanding the balance of emotional and rational reci-
procity is crucial; rewarding loyalty and advocacy is a ne-
cessity for successful long-term customer retention; soft
benefits are as potentially important as hard benefits
3. Consumers are seeking reliable sources they can trust Today these sources tend to be their peers rather than tradi-
tional icons like “brands” or “experts.” Those companies who ad-
vocate for consumers (or their causes) will also engender greater
trust. But credibility, or the lack thereof, has never been so chal-
lenging. That’s the draw of social media like Facebook or Twitter,
where you can engage with people you know and trust. But even
here, among friends, there’s competition for your time—do you
connect with friends, play the games, connect to the links, take
the quiz, test your intelligence, read the fan pages, connect with
your favorite brand(s)? Conversation is interactive, but how can
you have a conversation with someone you don’t know?
Listening is key to successful conversations and the core ele-
ment essential for consumer dialogue to building better relation-
ships. Listening can enable understanding of personal interests
and motivations. Relevance will drive engagement, recognizing
“I am the cause.” And transparency of intent and behavior are in-
creasingly essential for credibility.
So, the net of this for 2010 is that evolutionary trends will drive
stronger customer relationships for improved business results,
locally and globally, across the street and around the world.
There is so much going on, consumers are spacing everything out, except when it is obviously and demonstrably personally relevant.
L
25Loyalty Management™ • WINTER 2010
First, companies will continue to get bigger and faster in terms of the data available for analysis and the degree to which every useful nuance in the data can be discovered. Second, companies will get smarter.
Predictions for 20102010
26 Loyalty Management™ • LOYALTY360.ORG
s we begin to recover from holiday festivities, it might feel
like there’s not much to celebrate in the world of marketing. There’s
no question that 2009 has been a tough year. During an economic down-
turn, often the prevailing mindset is to cut marketing dollars. Recent
studies have taught us better, but it’s still difficult for CMOs and CEOs
to cut big checks for programs which may or may not show a real ROI—
and even more difficult for CFOs. Measurable results—not just impres-
sions—have never been more important. According to iMedia, 59 percent
of marketers said that they plan over the coming months to “heavy up” on
measurable, result-driven strategies, stating that if “we can’t prove it’s
working, we’ll slash it.”¹ At the same time, consumers are in the midst
of trying to increase the value of each dollar spent, often throwing past
loyalties out the window. Merchants, in turn, are challenged with the cost
of acquisition.
With all those challenges we faced in the economic upheaval of 2009,
marketers may be ending this year feeling a bit beaten up. But, we at Ves-
dia are optimistic and by this time next year we’ll be singing “Auld Lang
Syne” to some out-of-date marketing strategies and tactics and raising
our glass to the next generation of partnership marketing.
Leading the Way: Reward ProgramsPartnership marketing is a measurable marketing medium with the abil-
ity to cross into the growing world of multi-channel customer and retailer.
Reward programs, armed with partnership marketing in a multi-channel
environment, are increasingly the most important feature of payment
cards. These programs are becoming the foundation of differentiation, of-
fer a competitive advantage, and have grown to cater to vastly diverse con-
sumer needs.² Consider the brand experience stages:
1.Before the Purchase:
•Over 60% of U.S. households said that loyalty card programs were
important in their shopping decisions. (AC Nielson Survey)
2.During the Purchase:
•Consumer spending is 46% higher with companies that offer loyalty
card programs. (Loyalty Monitor study by Total Research Corp. and
Custom Marketing Corp.)
Approaching a New Decade with New Strategies: Partnership Marketing
¹iMedia, Brand Summit, February 8, 2009²The Future of Credit Card Rewards Programs
by Brittany Simmer, Vesdia Corporation
When used properly, partnership marketing can
reduce operating costs while establishing a meaningful dialogue with consumers, building a
relationship with the customer that marketers could
never achieve before.
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FEATURES
27
3.After the Purchase:
•Companies can increase revenues by nearly 50% by retain-
ing only 5% of their customer base. (Frederick Reichheid, au-
thor of "The Loyalty Effect")
But currently, participation in reward programs is an under-uti-
lized tool in every marketers arsenal. This is due in part to a historic
lack of attention paid by reward program operators to merchants,
even before the purchase takes place. Reward programs’ focus has
been traditionally after the purchase has been made, how a con-
sumer can redeem their reward currency, without acknowledging
how, why or, most importantly, where the consumer made their
purchases to achieve their reward. However, loyalty providers are
leading the way into a new era of marketing: a pay-for-performance
model which creates a foothold in partnership marketing, giving
consumers the opportunity to earn desired rewards faster, opera-
tors more value to their reward program, and merchants a much
lower cost of acquisition and the ability to develop lasting loyalty.
There are three distinct constituencies that help create a pow-
erful partnership marketing solution: consumers, reward program
operators and merchants. Each of these constituencies has a unique
set of interests their loyalty provider need to satisfy:
•Consumers are looking for enhanced earning opportunities,
and the ability to earn rewards at a higher rate for purchases,
tied to a payment card routinely carried in their wallet.
•Reward Program Operators, which are usually defined as cred-
it card loyalty or frequent flyer programs, find that when con-
sumers are earning at a higher rate they can also anticipate an
overall increase in card usage, higher customer retention rates
and increased satisfaction and activity over time.
•The Merchants, the least understood from the perspective of
the loyalty industry, are the most important component to these
programs. Merchants have the opportunity to take advantage
of million dollars worth of multi-channel, reward program
marketing communications, leverage existing brand equity and
access an engaged audience inclined to purchase loyally.
Proving the Mettle of the Marketing: ReportingWhen it comes to proving marketing’s ROI to your CMO, CEO
and that lovable CFO, wouldn’t it be fantastic to provide meticulous
reporting, tracking of performance over time and various other
types of measurements to prove the business case over and over
again? While some metrics have value (e.g. CMPs), the most power-
ful data will ultimately drive business growth and use insight from
current activities to determine where the dollars should be going.
Partnering with a loyalty provider, due to their strategic relation-
ships with reward program operators, allows merchants to “slice
and dice” shopper spending data to demonstrate the true value of
their marketing. Other popular attributes of partnership market-
ing are “before and after” tests to track purchase volume through a
particular base of consumers, measuring marketing share of mer-
chant partners vs. competitors, allows for various types of reward
currency, and reporting down to the individual transaction level.
The long-term results of utilizing partnership marketing via a
reward program go beyond sales. Research by Colloquy, a loyalty
marketing consultancy, found that reward program members are
70 percent more likely than others to actively recommend products,
services, and brands.³ It’s those consumers who will keep coming
back, helping to grow your brand in any economy.
Regardless of the economic environment, spending millions of
dollars on traditional media without the ability to measure success
or target consumers is no longer an effective or viable consider-
ation. Data shows partnership marketing solutions drive consumer
spending in a more meaningful, measurable and cost-effective
manner. We must understand, however, that partnership market-
ing is hard work and there are no short cuts. Setting goals, consis-
tent communications and adjustments based on feedback are the
keys to success.
I invite the industry to enter 2010 embracing that idea. Develop
these types of alternative marketing strategies that can be proven
to help grow business. If that happens, we’ll all be ready to celebrate
this time next year and toast to something more substantial then
just surviving.³MediaPost, Reward Programs Members are Brand’s Best Friends, By Les Luchter
Reward programs, armed with partnership marketing in a multi-channel environment, are increasingly the most important feature of payment cards.
L
Loyalty Management™ • WINTER 2010
Here at Vesdia, we’re optimists. We believe the contraction in consumer spending will rebound by 50%
in 2010. Though we also believe it will be the Year of the Consumer, with loyalty being redefined, companies will have
to provide consumers with additional perceived value in order win their business. I also believe the USC Trojans will
go 13-0 in the regular season.
New Year Predictions2010
Investing in Customers Ahead of the Recoveryby David Rosen & Michael Greenburg, Loyalty Lab
28
FEATURES
Loyalty Management™ • LOYALTY360.ORG
2010 will likely be known as the year the global economy emerged from the Great Recession. While loyalty marketing was
one of the few sectors that benefited from the downturn, the industry must now shift the tone of its message towards growth.
Loyalty Lab’s David Rosen and Michael Greenberg outline the six most important areas where marketers can maximize their loyalty
investments as their focus moves from retaining best customers to creating significant numbers of new ones.
Investing in Customers Ahead of the Recovery2009 has been a difficult year to justify additional business investment. Inventories have been depleted to save cash, factory orders as a result
have softened. Imports, production, consumption are stagnant, and most impactful on a daily basis: unemployment continues at near double-
digits levels.
Signs of recovery are mixed but hopeful. In Q3 several signals showed a bottom in economic conditions, including the highest level of the
consumer confidence index in a couple of years plus an upturn in the S&P/Case-Shiller Real Estate Index. But retailers, CPGs, and manufacturers
are experiencing significant anxiety regarding whether consumers will open their wallets in the 2009 holiday season. The NRF recently forecasted
a 1% decline in 2009 holiday sales from already poor 2008 results.
29
An Economic Bright SpotDespite the slow recovery and cautious budgeting, one area
clearly not affected by the recession is marketers’ investment in
retaining and enhancing the value of their existing customers. Simply
put, smart marketers are investing in customer loyalty when nearly
all other areas of spending are being cut.
The logic is simple: Why tap into limited dollars on largely
unquantifiable advertising and promotion to boost new customer
acquisition when focusing on preserving and growing the value of
an existing customer base is so obvious? The loss of a single “best
customer” requires the acquisition of ten to twenty new “average
customers.” In a world where typically seven out of ten newly
acquired customers fail to make a repeat purchase, converting a
fraction to a second purchase alone would drive consistent year-
over-year comparable sales. Identifying and cultivating as few as two
percent of a customer base as advocates infuses a brand with new
customers with the highest likelihood of consistent, year-over-year
spend.
Independent research backs this up. “Of the marketers in our
survey, 71% report that their 2009 budgets have been reduced
relative to the budgets they had in 2008—and the cuts are hardly
insignificant. Just more than half of respondents report cuts of 20%
or higher.”1 As this chart from Forrester Research shows, loyalty
programs and email marketing, two of the most directly retention-
oriented marketing line items, are the 2nd and 3rd least impacted
areas of marketing, coming just after social media, which is in its
growth stage.
Maximizing Loyalty InvestmentWhile loyalty has clearly been a bright spot in the dark economy—
more than 50% of the top 200 national retailers have made
meaningful investments in their existing or new consumer loyalty
programs in 2009 with large consumer household brands rapidly
following suit—strong return on that investment is not guaranteed
based merely on desire and a checkbook.
Using our basic loyalty framework—connecting strategies to
segments with outcomes impacting frequency, retention, and
advocacy; and based on our close work
with nearly 100 retailers, travel providers
and consumer brands over the past
two years, we’ve identified six keys to
maximizing investment in customer
loyalty.
1.Drive Customer Centricity from the Top
Loyalty is not a promotional tactic—
for that matter, loyalty is not really a
marketing strategy. Cultivating the
relationship that brands have with their
customers lies at the core of companies’
cultures. The notion of customer
centricity is an old one, but companies
getting the most out of their loyalty
investment put customer experience at
the center of their culture. This cultural
change inevitably comes from the
leadership team—most often from the
CEO. Culture inspires a proactive focus
on the customer, leading to initiatives
and ideas that improve the customer
experience and drive market share gains
and advocacy. Culture instills a sense
of purpose around every customer
interaction and every business decision
that aligns to a more loyal customer base.
TV, print, radio, or magazines
Staff and training
Branding and advertising
Direct mail
Marketing technology
Online advertising
Web site development
Loyalty programs
Email marketing
Social media
Figure 1 – 2009 Marketing Reductions By Media Type2Given your decreased budget, how much has your spending decreased in each of the following areas?
Base: 45 marketing leadership CMOs who have had their 2009 marketing budgets reducedSource: “Marketing Budgets Suffer Significant Cuts”, Forrester Research, Inc., July 2009
2010 predictions
1.Loyalty programs will seamlessly integrate their social media and community efforts by explicitly rewarding engagement more broadly.
2.Mobile will rapidly become the preferred channel and devise for engaging with loyalty programs including the adoption of targeted offers, delivered via mobile based on where members physically are at that moment.
3.Gaming will take on an even more prominent role in loyalty program engagement while gaming will increasingly look and behave like loyalty programs.
continued on next page »
1 “Marketing Budgets Suffer Significant Cuts”, Forrester Research, Inc., July 2009.
Loyalty Management™ • WINTER 2010
30
2.Segment Priorities RationallyMarketers cannot and should not attempt to place equal effort
against every customer. By going very wide, companies fail to go
sufficiently deep. But do not interpret this as a tacit recommendation
to ignore certain customers when they come through the door. Do,
however, recognize that there are many current and past customers
that just aren’t listening. Best in class loyalty marketers focus on
three basic segments:
•Retain Highest Value Customers: Typically 3% of customers
represent 25% or more of total value based on their own
spending and significantly more based on their influence and
advocacy. While they’ve behaved loyal in the past, the downside
of losing them in the future is huge. Their demonstrated
spending makes them ideal targets for competitors. Frequency
isn’t the issue here—retention is most important, with advocacy
a close second.
•Retain and Grow Next Best Customers: Often the next best
spenders, but more often those that have the potential to be best
customers based on category purchases, acquisition channel,
demographics or other brandaffinity traits. Generally the focus
is frequency, to take market share from competitors and other
substitutes. If it is still early in the relationship, there is an
opportunity to establish a connection that will endure for months
or years.
•Grow New Customers: Often the only time marketers have
customers’ attention is in the first few days of the relationship.
The window is very short—the experience must be special. Thirty
days later, they could be gone forever. In many cases, a simple
focus on a second interaction, whether it be a purchase or a
social interaction, is all that is needed to establish a relationship
that will lead to a loyal customer.
3.Separate Rewards From LoyaltyMany retailers, credit card companies, travel and consumer
brands confuse rewards with loyalty. Rewards and points are merely
a tactic for holding customers’ attention and managing the “give
to get” relationship with loyalty members. Real loyalty emanates
from superior products and services, great value, relevance of
communications, and in some cases, a shared set of values and
purpose. Rewards have a role in developing customer loyalty in
three areas:
•Gaining Permission to Track Activity: By rewarding activity,
companies give value in exchange for good data, which is also
of value. For many companies, the insights and other tactics
available from richer customer data alone is worth the price
of rewards.
•Financial Incentives For Relevant Customer Segments: Some
customers are responsive to financial incentives, whether it be
coupons, sales, or rebates. This group will change behavior solely
based on the program rewards. While this will not be 100%
of your customers, it will be a large enough segment to justify
investment and resources to maximize your return.
•Recognition For Relevant Customer Segments: Just as some
customers respond to financial incentives, other segments
respond to recognition. Again, this will not be 100% of your
customers, but it will be large enough to justify resources and
attention to maximize your return.
4. Model Consumer Value On More Than PurchasesBest customers should be quantified and identified based not
only what they individually spend, but on who they know, how well
they promote the brand and to what extend their influence leads to
more purchases by others. A customer who makes a single purchase
of a product online, but follows up with a well-crafted review of the
product can influence hundreds of subsequent purchases. Marketers
must learn to identify customers who have influence and recognize
and reward that behavior as richly as they reward purchases.
5.Keep It SimpleThe best programs are not necessarily the ones with the most
sophisticated rules. The opposite is more often true. Customers are
often members of many programs, often within the same category
of product. As a result, the easier it is for customers to understand
the program’s value proposition, the higher levels of participation,
engagement and return on marketers’ efforts. Great marketers lead
with basic programs and innovate based on testing and learning.
Great programs are successful based on very simple metrics of
enrollment, engagement, repeat purchase and retention—not the
most elaborate program design.
6.Learn and AdaptPrograms which are successful in the short term and long term
share one common trait—ongoing improvement and engagement.
Consumers are engaged on a regular basis through entertaining,
relevant, and timely interactions, whether they be promotional or
informational.
Look Forward to the FutureA consensus of opinion exists that those companies that have
been most effective investing in customer loyalty in the recession
will be best positioned to grow most quickly when the economy
stabilizes and emerges from its current state.
Our internal experience with many top brands shows ROI turns
positive very quickly, as enrollment grows. Reaching a critical mass
of program members is the most important component of return in
the first year of a program, as fixed costs are quickly spread across a
wide base of members. Smart tactics can drive that ROI even higher,
as marketers leverage what they learn from early enrollees to tweak
messaging, funding, offers, recognition, and rewards. By starting
sooner, marketers will achieve this first milestone before (or just
as) the economy starts to accelerate, positioning their program for
greater success.
Rewards help drive activity and retention, but shouldn’t be confused with customer loyalty.
L
Investing in Customers Ahead of the Recovery (continued)
Loyalty Management™ • LOYALTY360.ORG
www.alterian.com
Request your complimentary “Little Book” of Integrated Marketing, Integrated Email Marketing, Web Engagement or Social Media Marketing – Visit www.alterian.com/littlebooks today.
Tel: 312 704 1700 | Web: www.alterian.com | Blog: www.engagingtimes.com | @engagingtimes
Link analytics toexecution
Make email a strategic channel
Make your website engaging for the individual
Listen to how your brand is perceived
We needto talk
Build loyalty with Alterian
Are you engaging with your
customers?
www.
by Alexander Meili, ICLP
The differences between European and American loyalty programs and what drives the success of each
Across the Ocean Blue
oyalty programs have been a staple of North American customer strategies for more than two decades, having successfully penetrated a variety of sectors, including airlines, hotels, banking and retail. European programs, on the other hand, have had a slow start and, in some areas, still lag behind North America in participation and innovation. Many European programs are a copy of American programs applied globally. Some, however, are following an altogether different philosophy about relationship marketing, delivering brand loyalty and claiming true competitive differentiation. Here, we’ll compare and contrast the two strategies.
Understanding the historyEuropean programs took root in the early to mid-1990s (roughly 10-15 years after American loyalty programs) with the
launch of frequent flyer programs such as Iberia Plus, Swissair’s Qualiflyer and British Airways Executive Club. Programs
from hotels such as Accor and Sol Meliá followed shortly thereafter. This pattern has continued and today, there is a tre-
mendous push in the European region to implement loyalty programs in sectors other than travel, for example SNCF’s
Grand Voyageur rail program; Germany’s retail Payback program; Belgium’s Carte Plus by retailer Delhaize, Italian retailer
Esselunga with Fidaty, UK’s Nectar and Tesco Clubcard, as well as European versions of Air Miles in the UK, Netherlands
and Spain. Arguably, European programs (particularly in the UK, Germany and France) tend to have a strong focus on the
customer proposition whilst US programs are ahead in terms of number of members.
However for traditional loyalty programs both regions are approaching maturity and saturation. The average affluent
North American consumer belongs to seven programs; the European consumer belongs to four. Eighty percent of European
consumers say they have at least one loyalty card or belong to a loyalty program; for American consumers, that number
rises to three.1 Both regions also report significantly more memberships than population. US loyalty programs collectively
have more than 1.8 billion members2; European programs, 900 million.3
As well as being less promiscuous than their US counterparts, the European consumer also claims to be less influenced by
loyalty programs. 80 percent of North American respondents said they always show their loyalty card when shopping, com-
pared to 50-60 percent in Europe.4 However, significant numbers of additional respondents across both regions reported
using their card frequently, which shows an overall engagement level not to ignore in either market.
Different approaches to communicationResults from ICLP studies on cross industry B2C programs from Europe and North America show that one of the most
apparent differences between programs in each region is communication with members. European loyalty programs are
typically marketed through below-the-line (BTL) methods and are seen as ‘relationship building’ exercises to develop long
term customer profitability. Because of this, they tend to have a strong focus on personal and targeted communications.
1Loyaltycard and ICLP research 2Colloquy 2009 3ICLP 4Nielson, 2007
32
FEATURES
Loyalty Management™ • LOYALTY360.ORG
L Different approaches to communicationResults from ICLP studies on cross industry B2C programs from
Europe and North America show that one of the most apparent
differences between programs in each region is communication
with members. European loyalty programs are typically marketed
through below-the-line (BTL) methods and are seen as ‘relation-
ship building’ exercises to develop long-term customer profitability.
Because of this they tend to have a strong focus on personal and
targeted communications.
Tesco is one of the world leaders in segmentation marketing, with
a 121-point contact strategy utilizing more than 9 million variants of
their Clubcard statement where
no three customers get the same
statement. Conversely, American
programs tend to also use tacti-
cal above-the-line (ATL) media
such as radio, television and bill-
boards to ‘sell miles’ or promote
this week’s special offer for dou-
ble points, which typically require
much higher budgets and have
not been widely seen in Europe.
Hence programs in the US could
be regarded as being more of a short term tactical sales promotion
tool rather than using more elaborate techniques like their European
cousins.
Europeans were the first to actively engage mobile communica-
tions to promote interactivity with members. This is not surprising
given the fragmented nature of the US telecoms and cellular market
compared to the EU, where most countries have one home domestic
carrier. Between 2006 and 2007, European programs operated by
Finnair, Aeroflot, Lufthansa and others began offering direct member
account access via SMS and WAP technology.
Today, American programs have caught up and are possibly mov-
ing ahead with smart phone applications in the travel and finance
sectors, while those in retail have begun offering mobile coupons.
This channel is effectively being driven by the hugely successful
iPhone application platform. With over one billion iPhone applica-
tion downloads to date, no program can ignore this medium.
With major US hotel and airline brands providing customers with
open choice but little to choose between, US programs have had
to innovate faster than European programs to create greater dif-
ferentiation to their audiences. American programs have therefore
maintained first-mover advantage in innovations like social media
and web 2.0. This is particularly true of larger programs, such as
Starwood Preferred Guest, InterContinental Hotels Priority Club,
American Airlines’ AAdvantage and even Procter & Gamble’s Vocal
Point. Dell is a shining example of this sophistication in social media
strategy, and in June 2009 reported that it had earned $3million in
revenue directly through Twitter since 2007. Dell Outlet curently has
624,000 followers on Twitter.
Given the above short term
tactical versus long term relation-
ship variations between program
objectives in the US and Europe
it is not surprising there is an ap-
parently large disparity in the
frequency of program commu-
nication. Many travel and retail
companies in North America will
communicate weekly with their
members and importantly, that
is what their members expect. European customers, on the other
hand, receive monthly or quarterly mailers detailing activity, points
accruals and corresponding rewards along with targeted offers. Any
more communication than this would be seen as overtly selling and
detrimental to a relationship. This can be largely attributed to differ-
ent cultural perceptions of how often customers like to be contacted
before it is viewed as an invasion of privacy. Both adhere to official
legislation in this area, although Europeans maintain greater focus
on the emotional implications of excess customer communication.
This also helps to explain noticeable differences in the ‘look and
feel’ of creative. European communications favors a more mod-
est design, using space generously to build a quality brand image.
American communications tend to favor striking colors and strong
copy, more like adverts and direct response sales mechanics, result-
ing from having to stand out from a greater number of competitors
and more frequent messages.
European loyalty programs are typically marketed through below-the-line (BTL) methods and are seen as ‘relationship building’ exercises to develop long term customer profitability. Because of this they tend to have a strong focus on personal and targeted communications.
33continued on next page »
Loyalty Management™ • WINTER 2010
European programs still require elite status to be earned through
activity. This is to protect the exclusivity of their earned benefits.
Another culturally required practice that has been unique to Eu-
ropean programs (primarily British Airways) is ‘account pooling’, in-
spired by practices in the Middle East, in which multiple members of
the household can collectively pool their points, benefiting families
especially those with more than one wife. To date this household ap-
proach has not yet been adopted widely in America as it does require
policing, by using one mailing address to ensure there is no pooling
of miles by corporate accounts resulting in a disastrous change in
mileage breakage rates.
Customer relationship resultsIn summary, both markets are rather mature in program develop-
ment and market penetration, with the US having a more competitive
background and environment leading to both innovation and a rela-
tively short-termist view on their customer relationships. In Europe
however, brands have implemented programs as a way of gathering
customer data for better business decision making and the ability to
better understand and meet customer needs in the future. Therefore
programs in Europe need to offer benefits at just the lowest cost of
customer self identification, often not so competitively.
Over time, primarily through the proliferation of global programs,
as well as web 2.0 and social media sharing information across cus-
tomer groups, the gaps will continue to close. Cultural differences
between customer sets will remain, due to Europe’s greater com-
plexity in geodemographic segmentation and the need to tailor an
approach based on languages, cultures and countries.
Loyalty programs which have been properly designed to support
corporate strategy and are executed according to market culture,
customer needs, and value, will continue to play an integral part
in driving company performance and success on both sides of the
ocean for many years to come.
Differences in messaging/creativeAlthough the overall program structures are fundamentally the
same (partners, elite status, bonus points, membership cards, etc.),
there are some interesting distinctions between U.S. and European
travel programs:
Loyalty programs in North America (primarily travel) are significantly
more generous with points/mileage crediting with open access to
masses of redemption inventory, while European programs tend to
reward strictly on transaction and revenue to avoid dilution and dis-
placement, especially on key routes that drive each carriers’ premium
revenues. In addition, American programs have eliminated point ex-
piration dates, while currencies of European programs tend to expire
after 2-3 years.
Free or discounted upgrades are seen as the most valued program
commodity in the US but are not as frequently offered in European
programs to protect premium revenue. Also, the US leads the way
in electronic gift cards for customer service issues or redemptions,
while Europe is working to close the gap across the prepaid market
given the commercial opportunities of both breakage and overspend.
The US programs are reaping the benefits of this. Conversely, awards
like one-way tickets, carbon offsets or charity donations are quite
common in socially and environmentally conscious Europe, but are
either new or have not yet found popularity in the US5, which could be
for opposing cultural reasons.
Finally there are differences in program rules that further reflect the
short term US versus longer term European view of customer relation-
ships. For example European programs such as Miles & More have a
benefit that is rare in the US. The ‘baby break’ (i.e. maternity leave),
allows new mothers with elite status to request a one-year extension
on their re-qualification. However, the ability to buy elite status is a
common practice in the US as a cash generative option, but larger
5“The vast majority of [U.S.] members redeem awards for their own benefits”, Colloquy, June 2009.
Predictions for 2010:
1.The winners in social and new media will be those who are willing to try and fail, not those who fail to try.2.Brands who haven’t refocused on core differentiation strategy will struggle to compete in this increas-
ingly aggressive market.3.At least two new major players in the loyalty space will emerge from new market entrants and innovative
business models.
L
Across the Ocean Blue (continued)
34
Differences in Travel Program Elements
Categories U.S. Europe
Redemptions Upgrades (automatic) One-way tickets
Gift cards Environment and charity
Accruals Higher tier (executive) bonuses
Revenue-based metrics
Program Rules No expiration of points/miles
Baby break (status extension)
Program Features Can buy elite status Account pooling
Another culturally required practice that has been unique to European programs is ‘account pooling,’ inspired by practices in the Middle East.
Loyalty Management™ • LOYALTY360.ORG
2010
iels Bohr once noted that “prediction is very difficult, especially about the future,” but then he didn’t have access to predictive loyalty
metrics, which are leading indicators for behavior of the increasingly more-wily consumer. Consumers now have greater control over the brand and
marketing messages that enter their personal touch point zone; this is entirely changing consumer tendencies. Add to that a sea of brands where it’s hard to
differentiate one from the next, and you see what we’re seeing now: category drivers—and the category and customer attributes and benefits, they consist
of—are shifting like crazy. These “drivers” are critically important to understanding loyalty and engagement, and to getting it right when dealing with today’s
‘bionic’ consumers. Properly configured, category drivers can tell you far more than just who a consumer is—a typical demographic and attitudinal point-of-
view. These drivers tell you what consumers will actually do in the real marketplace. This matters if you’re keeping score by counting your sales and profits,
and not merely awareness levels or recommendations to friends.
Having examined these measures in the Customer Loyalty Engagement Index (26,000 consumers assessing 440 brands in 63 categories), Brand Keys
offers trends for marketers in 2010 that will have direct consequences to the success—or failure—of next year’s branding and marketing efforts.
1) Value is the new black Excessive spending, even on sale items, will continue to be
replaced by a reason-to-buy at all. This is trouble for brands
with no authentic meaning, whether high-end or low.
2) Brands increasingly a surrogate for “value”What makes goods and services valuable will increasingly be
what’s wrapped up in the brand and what it stands for. Why
J Crew instead of The Gap? J Crew stands for a new era in
careful chic—being smart and stylish. And the first family’s
support of the brand doesn’t hurt either.
3) Brand Differentiation is Brand ValueThe unique meaning of a brand will increase in importance
as generic features continue to plague the brand landscape.
Awareness as a meaningful market force has long been obso-
lete, and differentiation will be critical for success—meaning
sales and profitability.
4) “Because I Said So” is so overBrand values can be established as a brand identity, but they
must believably exist in the mind of the consumer. A brand
can’t just say it stands for something and make it so. The con-
sumer will decide, making it more important than ever for a
brand to have measures of authenticity that will aid in brand
differentiation and consumer engagement.
5) Consumer expectations are growing Brands are barely keeping up with loyalty expectations now.
Every day consumers adopt and devour the latest technolo-
gies and innovations, and only hunger for more. Smarter
marketers will identify and capitalize on unmet expectations.
Those brands that understand where the strongest expecta-
tions exist will be the brands that survive—and prosper.
6) Old tricks don’t work/won’t work In case your brand didn’t get the memo, here it is: consumers are on to brands trying
to play their emotions for profit. In the wake of the financial debacle of this past year,
people are more aware then ever of the hollowness of bank ads that claim “we’re all
in this together” when those same banks have rescinded their credit and turned their
retirement plan into case studies. The same is true for insincere celebrity pairings: think
Seinfeld & Microsoft or Tiger Woods & Buick. Celebrity values and brand values need
to be in concert, like Tiger Woods & Accenture. That’s authenticity.
7) They won’t need to know you to love youAs the buying space becomes even more online-driven and international (and uncon-
trolled by brands and corporations), front-end awareness will become less important.
A brand with the right street cred can go viral in days, with awareness following, not
leading, the conversation. After all, everybody knows GM, but nobody’s buying the cars.
8) It’s not just buzzConversation and community is all. Ebay, for example, thrives on consumer feedback.
If consumers trust the community, they will extend trust to the brand. Not just word of
mouth, but the right word of mouth within the community. This means the coming of a
new era of customer care.
9) They’re talking to each other before talking to the brandSocial Networking and exchange of information outside of the brand space will increase.
Look for more websites using Facebook Connect to share information with friends from
those sites. More companies will become members of Linkedin. Twitter users will spend
more money on the Internet than those who don’t tweet.
10) Loyalty & engagement are not a fad; They’re the way today’s consumers do business Marketers will come to accept that there are four engagement methods including Plat-
form (TV/online), Context (Program/webpage), Message (Ad/Communication), and
Experience (Store/Event). But there is only one objective for the future: Brand Engage-
ment. Marketers will continue to realize that attaining real brand engagement is impos-
sible using out-dated attitudinal models. The watchword is “loyalty.”
The future may not be what it used to be, but marketers that have loyalty and engagement metrics in place will have a handle on the trends that are
going to show up in their offices. Accommodating these trends will require a paradigm change on the parts of some companies. But, whether a brand
does something about it or not, the future is where it’s going to spend the rest of its life. How long that life is up to the brand, determined by how it
responds to today’s reality.
N
L
10:10Loyalty Trends for 2010by Robert Passikoff, Ph.D., Brand Keys, Inc.
35Loyalty Management™ • WINTER 2010
Dare to be different!
You don’t have to settle for a “me too” program.
Discover loyalty strategies that stand out.
At Fairlane Group, it’s all about results!“Engaging People for Better Results”
Loyalty • Incentives • Recognition
For more info, please contact [email protected]
www.fairlanegroup.com
FairlaneLoyalty360Ad:Layout 1 6/1/09 2:55 PM Page 1
Dare to be different!
You don’t have to settle for a “me too” program.
Discover loyalty strategies that stand out.
At Fairlane Group, it’s all about results!“Engaging People for Better Results”
Loyalty • Incentives • Recognition
For more info, please contact [email protected]
www.fairlanegroup.com
FairlaneLoyalty360Ad:Layout 1 6/1/09 2:55 PM Page 1
by Nicole Nunn Walker, Metrosplash Systems Group
THE CONFLUENCE OF
Data, Dollars and Desires
ow more than ever, there is need for marketing account-
ability, to maximize ROI by investing in programs that quickly and
measurably influence consumer behavior at the lowest possible cost. Add
to this the need for programs that give consumers a reason to look be-
yond price when making a choice, and which bring them back on a regu-
lar, even habitual basis.
To create consumer influence or “confluence” it is essential to look at
what the consumer wants or desires. To identify a consumer desire is
to understand what influences their behavior. At the convergence of a
marketing plan influencing consumer behavior stands a well executed
loyalty program with a truly desirable reward for the consumer.
There have long been loyalty programs with incentives that reward con-
sumer behavior at the retailer level: retention, frequency and total spend.
Obviously retailers like the Grocery and Supermarket channel are lead-
ers at this practice. The travel industry service providers like airlines,
hotels and rental cars have also seen great success in rewarding the loyal
behavior from their consumer.
38
The question is: Has the Manufacturer or the Brand been repre-sented in the process of rewarding the consumer and ultimately influencing their purchasing behavior?
There are a handful of super brands like Coca-Cola with mycoke®
rewards who have ventured into the arena of supplier-level or brand-lev-
el loyalty but for the most part this is unchartered territory. The brands
are heavily dependent on the retail channel to entice the consumer to-
wards their brands obviously subsidizing them with trade and promo-
tional dollars.
The retailers or merchants have a rich-source of data coming from their
Point-of-Sale systems and loyalty programs that when analyzed properly
can tell a very diagnostic story about which consumer is buying what
and why. This insightful data is typically analyzed and used for promo-
tion planning only at the retailer level. Very rarely is this data shared
with the supplier or offered as reference point for collaborative reward
funding that can truly influence the consumer’s buying behavior for a
specific brand.
N
FEATURES
Loyalty Management™ • LOYALTY360.ORG
The supplier is typically very motivated to create
brand loyalty and rely heavily on investing in di-
rect marketing techniques like coupons, direct mail
and advertising. The suppliers often offer market-
ing development funds (MDF) to the retail chan-
nel in support of brand promotion, but are given
very little visibility as to the effectiveness of those
funds and limited correlation metrics around MDF
investment and product/brand movement. The re-
porting that is available tends to be manual/paper-
based and somewhat subjective.
With the sophistication of supply chain manage-
ment technology today and the landfill of loyalty/
transaction data that is being captured there is an
opportunity for the two channels, supplier and re-
tailer, to collaborate on better promotions that ac-
tually influence the consumer and create sales lift
for both channels. The term of confluence is also ap-
propriate in this concept: streams of disparate data
flowing together to provide meaningful trends and
analysis. Confluence by definition means a place
where things merge or flow together. To converge
promotional spend data with loyalty data and fi-
nally supply-chain management data both the Sup-
plier and Retailer can speak the same language and
optimize performance for profitability of the brand
and the merchant outlet. Other industry luminaries
have referred to this notion as collaborative com-
merce, a true collaborative transaction between the
Manufacturer, the Retailer and the Consumer.
From the consumer perspective, if the Supplier
and Retailer use the data provided to them by the
consumer (transactions) to both anticipate their
desires and reward their behavior, they will create
an undeniably devoted customer: loyalty again for
both the brand and the retail outlet.
Financial institutions have been doing this type of
transaction analysis with their payment processors
and rewards programs for nearly a decade. Trans-
actions are their business and they study consumer
transaction trends carefully. For the supplier, mov-
ing products is their business and they study sup-
ply-chain management techniques carefully. The
supplier now has the opportunity to evolve to the
next level of analytics by harvesting trends from
retailer-level data and investing MDF in hyper-tar-
geted promotions that move their products specifi-
cally.
One very tangible example of this confluence in
action is when P&G collaborates with a grocery
retailer to fund a very specific fuel reward promo-
tion around a specific market basket of P&G brands.
Nothing has proven to have a stronger influence on
the grocery shopper than fuel rewards (cents-per-
gallon discounts). Consumers are acutely aware of
fuel prices and will drive well out of their way to
save a penny or two per gallon. P&G has acknowl-
edged the consumer’s desire (lower gas price) and
promoted their brands in a highly visible way (fuel
discounts) to move more product (SKU-level sales
lift). Meanwhile, the retailer has used the fuel re-
ward as a “token” in their own sticky loyalty sche-
ma. Win, win, win for the Consumer, the Supplier
and the Retailer.
While the big-box retailers appear to be the obvious
choice for rich transaction and loyalty data there is
an untapped conduit of this meaningful data in the
convenience-store (C-store) channel. The c-store
retailer interacts more frequently with the cus-
tomer and typically carries the top high-movers of
a Supplier’s brand at even a convenience price. Sup-
pliers should consider a collaborative commerce
model with a confluence of the data, desires and
dollars transacted in the c-store channel now ap-
proaching 148k outlets in the United States.
One very tangible example of this confluence in action is when P&G collaborates with a grocery retailer to fund a very specific fuel reward promotion around a specific market basket of P&G brands.
39
One-way websites will become obsolete. More and more, companies will create websites that operate in two directions with chat and status update functionality.
2010 predictions
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Loyalty Management™ • WINTER 2010
2010
40
Keeping Up in a Down Economyby Bob Nelson, Ph.D., Nelson Motivation, Inc.
FEATURES
Loyalty Management™ • LOYALTY360.ORG
Create a Clear and Compelling DirectionThe starting point of any organizational change is setting a clear and compelling
vision for the organization. If employees are not inspired by what the organization
is trying to do, it will be more difficult for them to have the motivation and direction
to succeed—especially in tough times. Frances Hesselbein, President of Leader-to-
Leader Foundation, once put it this way, “No matter what business you’re in, every-
one in the organization needs to know why.” Do a reality check and ask employees
what the mission and purpose of the organization is. If you get a different answer
from each person you ask, it’s a good indication that things have drifted, or perhaps
have not been clear for some time.
Direct Open and Honest CommunicationCommunicating opening and honestly was the top-reported employee motivator,
cited by 95 percent of employees as the variable they most wanted—and needed—at
work to do a good job.
Everyone needs to have answers to their questions and adequate information
about their jobs, as well as information about what’s going on in other parts of the
organization, new products and services, and the organization’s strategies for suc-
cess. Even when the firm is struggling, it’s critical to be honest with employees. Do-
ing so will almost always lead to an increase in teamwork, respect and dedication,
especially if delivery the of the bad news is also used as an opportunity to brainstorm
and communicate with employees about ideas and plans for turning things around.
Involve Employees and Encourage InitiativeGiving employees explicit permission to act in the organization’s behalf whether
that is through idea suggestions, problem solving, exceptional customer service, or
a host of other possibilities is also very motivating. My research found 92 percent
of employees feel it is important for managers to ask for their opinions and ideas at
work, and 89 percent feel it is important for their managers to involve them when
making decisions at work.
As Martin Edelston, chairman and CEO of Boardroom, says, “Sometimes the
best idea can come from the newest, least experienced person on your staff.” Like
the hourly paid shipping clerk who suggested that the company trim the paper size
of one of its books in order to get under the 4-pound rate and save some postage.
Boardroom made the change and did indeed save some postage: $500 million the
first year and several years since. Explains Edelston, “I had been working in mail-
order for over 20 years and never realized there was a 4-pound shipping rate. But the
person who was doing the job knew it, as do most employees know how their jobs
can be improved.”
It’s critical to be honest with employees. Doing so will almost always lead to an increase in teamwork, respect and dedication.
ecessionary time can be very scary. Stories of
economic woes fill the headlines, but the real toll
of the recession is its impact on everyday people: those
who have lost their jobs, benefits or wages—and those
who are concerned about losing these things, which in-
cludes most everybody else.
Tight economic times bring more stress, anxiety and
fear to all employees, which, if left unchecked, create
a negative work environment that leads to declining
morale, eroding trust and loss of productivity for the
company. A recent survey by Quantum Workplace, a
company that tracks employee engagement scores of
over 1.5 million employees within 5,000 companies
nationwide, found that 66 percent of the firms report a
decrease in employee engagement that appears to be
in direct response to the negative circumstances of the
recent recession.
According to Peter Capelli, a professor of manage-
ment at Wharton, “Workers in a downturn can get so
nervous that they just freeze up and aren’t able to do
good work, especially if they’re afraid of being laid off
and it’s not clear what the standards are.” The key, then,
is to focus on the right things that help to motivate your
workers to improved performance, and overcome their
inherent fears.
Just what are these “right” things? To answer this
question, I examined employee motivation research I
have conducted with variances in management prac-
tices of those companies whose employee engagement
scores have increased during the current recession,
compared with organizations whose scores nosedived
over a comparable period. Based on this research, I
identified six clear dimensions that any manager or or-
ganization can implement to create a more motivating
work environment for their employees today:
•Create a Clear and Compelling Direction
•Direct, Open and Honest Communication
•Involve Employees and Encourage Initiative
•Increase Employee Autonomy, Flexibility
and Support
•Continued Focus on Career Growth and
Development
•Recognize and Reward High Performance
R 1.
2.
3.
Increase Employee Autonomy, Flexibility and SupportOnce employees have been enlisted to get involved and make suggestions and
improvements, they need to be encouraged to run with their ideas, take responsi-
bility, and champion those ideas through to closure and completion. My research
revealed that “autonomy and authority” and “flexibility of working hours” were
marked as being important by 89 percent and 85 percent of employees, respec-
tively. To the extent that managers and the organization are able to provide these
motivators for employees, it can greatly impact their morale and performance in
having them do their best work possible.
No one likes to be micromanaged. Employees prefer to be assigned a task and
allowed the freedom to develop a work plan that suits them. Roles and responsibili-
ties may be previously defined, but a job varies with the individual who occupies the
position. Here is where truly knowing your employees becomes important: under-
standing their strengths and weaknesses allows a manager to best assign projects
and tasks in a more meaningful way. Take it a step further by allowing employees to
pick and choose the projects and responsibilities on which they would like to work.
Continued Focus on Career Growth and Development On first glance, it may not seem like employee learning and development should
be a priority during tough times. After all, if things are tight, does the organization
really have the money, resources and time to spend on helping employees learn and
grow? Shouldn’t employees instead be focused just on keeping their jobs instead of
developing new skills?
But, there is no better time than a downturn to help employees learn new skills
and new ways to contribute to the organization’s success. Taking an action-orient-
ed approach in helping top performers further develop their skills and strengths
can help in bad times as well as good. In my research with employees, management
support of employees who want to learn new skills was one of the top motivators—
reported by 90 percent of employees as being important to them. Since all devel-
opment is essentially self development, providing opportunities for employees to
learn and grow benefits both them and the organization.
Recognize and Reward High PerformanceThe most significant driver of desired behavior and performance known to man-
kind is the notion that “you get what you reward.” As a manager in any organiza-
tion you will get more of the desired behavior and performance you want from your
employees by taking the time to notice, recognize and reward them when they excel
in their work.
In my research I’ve found that it’s almost universal that today’s employees want
and expect to be recognized when they do good work, although only 12 percent
report that they are consistently recognized in ways that are important to them and
85 percent of employees say they feel over worked and under-appreciated where
they work today. What is the best way to motivate employees in tough times? Sur-
veys, studies and discussions with employees from all industries have revealed a
very simple formula for successfully rewarding employees: Treat your employees
with respect, pay them fairly, and notice, recognize and reward them when they do a
good job. Sure, money is a motivator, but it is not the only motivator and it does have
its limitations. Often, simple, creative, no-cost ways to show your appreciation in a
timely way can have a larger impact on your employees in making them feel special
and motivating them to rise to the occasion in difficult times.
There are many circumstances managers cannot control, but there are many
more they can directly impact in positive ways. By focusing on those things that
can be controlled, managers can help buffer employees from the negative impact
of the economy and help them focus their energies to achieve better results. While
none of us can individually change economic conditions, all of us can decide how we
react to poor economic times and focus our efforts in specific ways that can have a
positive impact where we work. In so doing, we can create a more positive and pro-
ductive work environment that will help your company thrive in challenging times. L
41Loyalty Management™ • WINTER 2010
5.
6.
4.
Proven Ways to Support Employees in Difficult Times
•Include employees in the decision making process, especially as it relates to their roles and responsibilities
•Encourage employees to develop existing skills and provide ample opportunities for career development
•Identify employees who show the most promise as leaders and offer them the chance to participate in leadership training and development
•Establish policies that allow employees flexibility in their schedules, and let them work directly with their managers to develop a plan that benefits them as well as the company
•Develop company-wide healthy living programs that promote a healthy lifestyle such as fitness, nutrition, and mental well-being
Predictions for 2010
•Unemployment will continue to be at a record high through mid-2011
•Workplace stress will continue to increase and employees will become numb and fatigued at the ongoing demands of their jobs
•Employer interest in employee motivation and engagement will increase as employers become more concerned with retaining their best workers
2010
During 2009 the face of business and the entire financial structure of the U.S.
and the world changed. What remained constant was the need to retain loyalty from
employees, and customers and reward them for certain positive quantifiable business
actions. Adapting to the ever growing pressure to retain loyal customers while reducing
cost, Variable Rate Rewards have proven to deliver new results for our new world.
2009 Results Validate Variable Rate Rewardsby James C. Purdy, Bridge2 Solutions, Inc.
Variable Rate Rewards
Variable Rate Rewards allow the sponsoring
organization to provide reward pricing to cus-
tomers calculated in real-time by category-spe-
cific formulas. This practice gives the sponsor
the benefit of real-time price drops while en-
suring an expected ROI, regardless of the cur-
rent item price. Variable Rate Reward systems
integrate directly with best-in-class inventory
and fulfillment databases to provide millions of
reward choices and the most current models at
current prices.
Combining the benefits of the Variable Rate
Reward systems with active program manage-
ment, measurement and feedback produces
significant positive program results. This com-
bination creates a win/win for both program
sponsors and their customers/participants.
•Increased Program Engagement
•Participants have been measured to visit
the program site a multiple of 4-6 times
more frequently due to the ever chang-
ing inventory that mirrors the consumer
marketplace
•Redemption Mix Change
•Participant redemption has moved fa-
vorably towards merchandise given the
breadth of selection, ease of catalog navi-
gation/selection and quick fulfillment.
TECHNOLOGY, TRENDS & REWARDS
2010 Rewards Trends
42
•In a six month period, top redeeming items
in the Bridge2 Solutions catalog decreased
in price by an average greater than 20%. Ad-
ditionally, within nine months, most of the
items had been discontinued and replaced
Business markets change and adapt to new
pressures, and currently Variable Rate Rewards
reflect the new standard for customer engage-
ment. As a silver lining to an otherwise tough
commercial year in 2009, watch for contin-
ued innovation, new products and emerging
services that reflect tomorrow’s new world of
business and consumer loyalty. Just as today’s
reward products change quickly, so will the
technology and services available for future
loyalty initiatives.
2010 promises to be an exciting year of new,
improved and remarkable solutions!
•Reward Value
•Real-time reward pricing allows the re-
ward price to fluctuate while retaining
the program sponsor’s ROI goals.
•Customer Satisfaction
•Leveraging world-class fulfillment orga-
nizations, participants can track reward
fulfillment and receive their rewards in
an average of 4-6 business days.
With such significant advantages in the reward
marketplace, you may be wondering if there
is truth to all the hype. Do participants really
want choice and does real-time pricing really
make a difference? A quick question to ask your-
self as a consumer, “Am I satisfied to look at 4 or
5 digital cameras, 5 or 6 TV’s, 3 kitchen mixers,
one set of bedding and overall a choice of only
hundreds of items when shopping for personal
‘wants’?” I offer some staggering statistics that
Bridge2 Solutions has monitored from redemp-
tion trends on our 400+ operating catalogs.
•As compared with a traditional merchandise
catalog of 1,000+ items, Bridge2 Solutions
will fulfill over 150,000 unique reward items
(SKU’s) in 2009, proving personal choice to
be a significant driver and differentiator in
loyalty programs
Loyalty Management™ • LOYALTY360.ORG 43
Travel Loyalty Program Redemption Trends by John Miller, Connexions Loyalty Travel Solutions
As airlines and hotel companies continue to seek incremental
revenue and create more value for their brands, they are unlocking
the value of their loyalty programs by expanding reward options for
their members and allowing them to redeem their loyalty miles/points
for ancillary travel products. Until recently, airline and hotel loyalty
programs have required members to go through a cumbersome process
to transfer their reward currency into another loyalty program in order
to redeem for an alternative travel product.
continued on next page »
Through new technology these programs are able to provide travel
reward and purchase options similar to that of full service online travel
agencies (OTAs), with customizable branding to create a more compel-
ling reason to stay on the program’s website. Members no longer have to
transfer miles/points and then wait days or weeks for processing to be
completed before redeeming the transferred reward currency. By com-
bining full service online travel capabilities along with the flexibility to
use program currency to redeem a wider array of travel products, cus-
tomers gain additional value from their rewards program, resulting in
enhanced loyalty to the brand and commitment to the rewards program.
For example, in 2009 United Airlines began to allow Mileage Plus
members the option to redeem miles for hotel stays and rental cars on
the Mileage Plus site. Around that same time, Starwood Hotels provided
members the ability to redeem SPG Points for flights on the Starwood
site. These programs are unique because of the technology being used
to facilitate the redemption, which does not require transferring miles/
points to another program, but rather keeps the member experience on
the brand’s site while providing more robust redemption options. Now
members have the benefit and ease of using each program’s single cur-
rency to book flights and hotel stays on their own sites. This trend is also
seen in many bank card programs.
By combining full service online travel capabilities along with the flexibility to use program currency to redeem a wider array of travel products, customers gain additional value from their rewards program.
By converting to a “points plus cash” model, programs can even fur-
ther increase the value of the brand’s website; offering the ability to add
a cash payment to offset any miles/points shortage. Points plus cash re-
demptions allow program members the ability to earn travel rewards
faster, and is a compelling reason for the customer to increase spend
with the program. More redemption options on a single website provide
a better customer experience and drives incremental revenue to the
brand’s own site instead of a third party’s site thus allowing the brand
to regain control of its inventory and gain valuable information about
program members.
The ancillary travel product redemption option along with the “points
plus cash” model are catching on with smart loyalty program managers
as they look for ways to increase the value proposition of both new and
mature customer loyalty programs.
Loyalty Management™ • WINTER 2010
Travel
Loyalty, One Card At a TimeWith the goal of increasing usage, marketers and loy-
alty providers are seeking new solutions, increased flex-
ibility and more customization to reinforce their brand.
They want differentiation, and a generic prepaid card
mailed in a windowed envelope just doesn’t cut it any-
more. Those who succeed in delivering a more personal
experience will likely come out ahead. We’re seeing more
companies looking to customize the images and designs
of cards, add their logos and distribute the programs
in a unique and branded card carrier. Why? To break
through the clutter and build a connection. Traditionally,
production methods and ordering processes have made
it cost-prohibitive to achieve this level of customization.
2010 is the year we recognize the possibilities and ef-
ficiencies of a digital on-demand prepaid card solution. A
digital environment means cards are produced as need-
ed, when needed, giving program managers the opportu-
nity to quickly respond to their customers. Technology is
available today to produce completely customized cards
within 24 hours. The beauty of this solution for the loy-
alty market is threefold. First, it allows loyalty managers
to tailor their card designs and carriers to be meaning-
ful to the recipient. Second, it simplifies and expedites
the process of getting a new program to market. Lastly, it
lowers inventory costs by eliminating spoilage and lim-
iting fulfillment expenses. The economic woes in 2009
remind us that the programs we invest in need to be ef-
fective, but also efficient and smart.
The economic woes in 2009 remind us that the programs we invest in need to be effective, but also efficient and smart.
44
2010 Rewards Trends (continued)
Distinguishing Loyaltyby Render Dahiya, Arroweye Solutions
I think we can all agree that 2009
was a turbulent year. But I believe the
story will read quite differently for the
prepaid card industry, which is fore-
casted to come out ahead amidst the
shakey economy. In fact, industry ex-
perts agree that the prepaid cards are in
a high growth category. And according
to Mercator Advisory Group, authors of
an annual prepaid market assessment,
this growth is attributed to “being in the
right channel with the right product.” I
couldn’t agree more, especially when it
comes to loyalty and incentive.
Making a Connection Loyalty is personal. It’s rooted in
building affinity between companies
and each of their employees or custom-
ers—and building affinity is dependent
on consumers having a consistently posi-
tive experience with the brand at every
touch-point. This is true in the aisles of
an airliner, on the pages of a Web site
or through the experience of receiving
a plastic card as a reward. It’s clear that
prepaid cards can be an important part
of a company’s loyalty strategy—they can
reinforce a brand and establish long-term
relationships.
On the Horizon for 2010All signs point to continued growth for the prepaid market in 2010. Increasingly, prepaid cards will become a mainstream offering. As more options are made available to loyalty providers, the more critical it will be to tailor card programs to stand out. Ultimately, on-demand production is a vehicle that makes this possible.
Like every industry, there will be winners and losers. The companies that succeed in the loyalty and incentive space will be those that can quickly respond to demand and create a meaningful, relevant connection with their target.
Loyalty Management™ • LOYALTY360.ORG
2010
Prepaid
There are two key trends that are impacting today’s
customer loyalty programs:
•Desire to further sub-segment customers in loyalty and
rewards programs. Driven by the need to balance increas-
ingly tighter marketing budgets with the need to be laser-
focused on retaining their “best” customers, companies
must continue to better understand the profiles of their
customers.
•Even greater focus on differentiation. Brands need to cut
through the “market clutter” and have their messages come
through clearly to their desired customer base. In this
tighter economic market, me-too loyalty programs will not
deliver the ROI companies need.
Fueled by these trends, brands are increasingly turning to
non-traditional marketing channels such as concierge to drive
the permission-based, two-way dialogue through which they
can more fully engage their customers.
For the most part, companies have an understanding of
their client base, but it is limited. The general demographic
and purchase behavior information (such as transactions, en-
rollments, response to direct marketing, satisfaction surveys)
they have is not enough to effectively guide them in forging
strong, personal relationships with their customers.
More and more brands are realizing, however, that interac-
tions with concierge offer an incredible opportunity to cap-
ture customer information they cannot capture in any other
way, and that leveraging that information in real time deliv-
ers value to the customer and drives heightened engagement.
Because concierge is a powerful, interactive, and conversa-
tion-based marketing channel, there are direct and frequent
interactions with customers as they rely on concierge to help
them with travel planning, individual and group dining, per-
sonal and business gifts, business meeting arrangements, etc.
Not only are we seeing that users of concierge are increasingly
accepting of information and offers delivered through this
channel, in fact, but that their satisfaction actually increases
because they view these offers as personalized and relevant—
a welcome change from the barrage of typical marketing to
which they are subjected.
Through these conversations with customers and the
various levels on which they are serviced, concierge is also
uniquely able to help the brand sub-segment its customer
base. Every interaction between concierge and the customer
not only increases the relevance of the brand, but also builds a
unique store of personal knowledge such as hobbies and pas-
sions, likes and dislikes, important dates and milestones, and
business needs. This cache of customer information—infor-
mation that’s very intimate, personal, and valuable—arms the
brand with the insights into individual behaviors, preferences
and patterns they need to sub-segment their customer base in
a meaningful way.
At the same time, concierge can cross-sell smartly and de-
liver key messages and information, test product ideas, etc. in
a lower cost, more dynamic fashion. No battling with clutter
or marketing overload. By knowing customer behavior and
preferences, concierge is uniquely positioned to talk directly
to their customers in a unique and proactive way—delivering
targeted, relevant, value-add messages via an intelligent, per-
mission-based conversation.
And in the end, this ongoing dialogue and the value it pro-
vides to the customer, coupled with the leverageable customer
insights it provides to the brand, drives engagement more
effectively than traditional marketing ever can. And this en-
gagement is what brands desperately need.
Predictions & Trends 2010•We will continue to see a customer-centric shift that is forcing organizations to rethink customer engagement. Engagement is now about attention: Are your customers paying attention to what you have to say? Are they interacting with you?
•How we evaluate the success of loyalty programs has evolved. Participation, and no longer membership, is the metric: on average, people belong to 14.1 loyalty programs but participate in only 6.2 of them. Brands need to be looking at redemption: Statistics show that someone who redeems is much more engaged than someone who’s simply earning.
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45
Trends: Concierge viewed as strategic marketing channelby Michael Breault, Circles
Loyalty Management™ • WINTER 2010
2010
Concierge
by James Watts, First Annapolis Loyalty
Redemption OptionsInternational CoalitionEXPANDING THE UNIVERSE OF
o matter the international market (from Canada and Europe to Asia), the goal of any successful coalition program
manager is to find the right balance between offering a compelling value proposition to the consumer and to the coalition program spon-
sor. From a consumer standpoint, as long as coalition is able to sign up sponsor merchants with significant market share, and offer a reasonable
value proposition in everyday spend categories, there should hypothetically be enough incentive to sustain a viable program. However, the mer-
chant side of the equation can be slightly more complicated. As a coalition program matures and markets change, coalition managers become
increasingly reliant on the program’s sponsor merchants, and must find ways to demonstrate program effectiveness and value.
This issue is compounded by the fact that many sponsor mer-
chants in coalition markets are facing international price-based
competition. For example, in 1993 when Safeway became Air Miles
Canada’s exclusive Western Canadian grocery store program spon-
sor, the company had over 30% market share in country. As the
competitive landscape evolved, the grocery store chain quickly
saw its market share erode to big box retailers like Costco, a com-
pany that operates with scale and slightly thinner margins. Safeway
Canada’s market share in Western Canada is now over 5% less than
when the alliance was formed.
To address this trend, coalition managers have been expanding
the universe of redemption options for their programs. For example,
Air Miles has moved far away from its mantra “a travel mile is a
mile,” a testament to a time when one Air Mile travel mile could
literally only be used to fly a mile on an airline like Air Canada. To-
day, an Air Miles cardholder can redeem for gift cards (which are
primarily sponsor branded), merchandise, experiences, and travel
rewards. In 2006 Payback, a German based merchant coalition, re-
ported that redemption for gift vouchers at sponsors accounted for
over 70% of redemption activity in the program.
This expansion in redemption options not only creates a stron-
ger value proposition for sponsoring merchants, but also acts as a
key differentiator. Increasing competition has caused coalitions to
appeal to broader consumer demands for a wider range of redemp-
tion options. Payback, which reports almost 60 million members,
competes against other coalitions within Germany that cumula-
tively claim similar member totals.
In 2006 Payback, a German based merchant coalition, reported that redemption for gift vouchers at sponsors accounted for over 70% of redemption activity in the program.
N
TECHNOLOGY, TRENDS & REWARDS
46 Loyalty Management™ • LOYALTY360.ORG
Merchant contractual cost per point $0.0150
Discount given on gift card by merchant $0.0010
Merchant breakage on gift card (15%) ($0.0015)
Redemption margin (25%) ($0.0025)
New effective cost per point (25% decrease)
$0.0120
Sources: First Annapolis Analysis of coalition investor materials & conference material
Illustrative Cost per Point Impact of the Integration of a Sponsor Gift Card Redemption Option
Although a merchant redemption option seems
like a win-win, many of the world’s largest coalitions
have yet to implement a merchant redemption op-
tion. For example, Air Miles Canada started offering
the option in 2006 and Air Miles U.K. still relies exclusively on
air redemption.
Increased competition and decreased reliance on key pro-
gram sponsors will continue to shape the direction of coalition
rewards program. Vanilla rewards programs such as Air Miles
Canada circa 1993 are quickly becoming a thing of the past as
coalition programs are continually evolving to strike a balance
between a strong consumer and merchant value proposition.
While true coalition programs are currently isolated to cer-
tain regions of the globe, the changes being made abroad to
strengthen merchant value proposition may help to bring co-
alitions closer to feasibility in other parts of the world.
New Year Predictions:
•2010 will see at least a couple of the nation’s largest banks launch enterprise-wide rewards programs.
•U.S. retailers will increase their focus on data-driven marketing and loyalty, much like Tesco in the U.K.
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2010
47Loyalty Management™ • WINTER 2010
Increasing competition has caused coalitions to appeal to broader consumer demands for a wider range of redemption options.
48
by Dominic Hofer, Loylogic, Inc.
GlobiphonizationLOYALTY AFTER THE ECONOMIC DOWNTURN
hile 2009 was the expected challenging year
for many companies and industries, we also find
some winners; one of them definitely being the loyalty in-
dustry. Over the last couple of months, many companies
stress-tested their existing loyalty programs and learned
that they have a great tool at hand to navigate through eco-
nomic downturns.
For 2010 we can surely expect some major technology
initiatives from the loyalty industry. Going ‘global’ and go-
ing ‘iPhone’ will lead the way. Are you ready to ‘globipho-
nize’ your loyalty program?
What worked in 2009: The Economic DownturnLoyalty winners in 2009 came from loyalty programs
that carefully studied the impact of the economic crisis on
their members’ household budgets.
A very good example of this is (again) Tesco Clubcard. In
May 2009, Tesco re-launched Clubcard in the UK, includ-
ing £150 million worth of investment, with the aim to add
another 1 million members to the program. The objective
was met on October 12, when Clubcard added the 16-mil-
lionth UK member. Shortly after, Tesco’s CEO Terry Leahy
also revealed that its offer of double points on the Clubcard
loyalty scheme had improved its performance amidst the
recession.
Smart marketers quickly re-worked their reward portfo-
lios and showed their members how valuable their loyalty
points can be; especially when times get harder for fami-
lies. In September 2009, American Express introduced op-
tions to redeem Membership Rewards points for everyday
charges such as groceries, gas, phone, wireless and cable
bills. Other examples can be found within the airline indus-
try, where airlines such as Delta, Alaska Airlines, TACA and
many more dealt with overcapacity by adding additional re-
ward seat capacity or offering one-way reward flights.
What didn’t work in 2009: Frequent Flyer Program Spin-offsThere is no need to spend many more words about the very suc-
cessful spin-off of Aeroplan from Air Canada back in 2005. Even if
the Aeroplan share price got hit hard, the FFP spin-off model re-
mains a success. It even proved again its value to Air Canada when
the program ‘accelerated’ CAD 70 million to buy reward tickets back
in December 2008 and issued another loan of CAD 100 million on
June 29, 2009.
However, where is the next
airline spin-off? Weren’t we
all leaning across the Pacific
to follow the development of
the previously announced Qa-
ntas Frequent Flyer spin-off?
Well, it won’t happen. On Au-
gust 7, Qantas CEO Alan Joyce
said that “Qantas will be post-
poning the spin-off of its Frequent Flyer program indefinitely”.
Why has no airline followed the successful model of Aeroplan?
Why does Groupe Aeroplan not succeed in acquiring another Fre-
quent Flyer Program? Well, Alan Joyce made another statement on
August 19, 2009: “Given the strategic value of Qantas Frequent Flyer
to the Group, we will be retaining full ownership for the foreseeable
future.” Maybe airlines should keep close hold of their most valuable
assets—their ‘affluent frequent flyer customers’—and gather as many
earn partners around the program to provide cash advances when
needed. An example comes from December 9, 2008: “Delta will re-
ceive an immediate $1 billion boost to its liquidity from a purchase of
SkyMiles that American Express will use in part for its membership
rewards program. Delta said it expects to receive an additional $1
billion from contract improvements through 2010.”
Tesco’s CEO Terry Leahy also revealed that its offer of double points on the Clubcard loyalty scheme had improved its performance amidst the recession.
TECHNOLOGY, TRENDS & REWARDS
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Loyalty Management™ • LOYALTY360.ORG 49
Best Practice in 2010: Global EngagementToday, the World’s biggest loyalty programs can be
found in the airline, hotel and financial services indus-
tries. Most of them manage global member bases but
face difficulties in engaging them across the globe. No
doubt, these programs lose out on hundreds of millions
of points-sales revenue and probably spend too much
money building an infrastructure that ultimately only
delivers a ‘quasi-global experience’ to their program
members.
Future ‘Best Practice’ will go to global loyalty pro-
grams that deliver local experiences globally.
Technology in 2010: Earn-Burn Convergence
Key to the success of any
loyalty program are the ‘Re-
wards’ that it offers. Over the
last couple of years, the fi-
nancial services industry has
successfully demonstrated
that affluent cardholders can
be lured away from airline
co-brand credit cards when
offered valuable and liquid
points currencies together
with large selections of rel-
evant rewards. Most of these
programs are based on a new
breed of reward solution that
is completely e-commerce based.
Equally successful are the so called ‘Merchant Funded
Reward Malls’, offered primarily in the travel and finan-
cial services sector. These solutions integrate with hun-
dreds of leading online merchants through a number of
affiliate networks and provide loyalty program members
an opportunity to earn points while shopping online.
Both technologies are delivered by specialized ‘earn’ or
‘burn’ solution providers. In terms of future ‘Technology’ we
should certainly expect the convergence of global earn and
burn technologies.
Trend in 2010: iPhone AppsThere is no doubt that the best way to reach global affluent
consumers, i.e. members of the leading frequent flyer, frequent
guest and frequent buyer programs, is through their mobile
phone. It’s always in a traveler’s pocket and it is the most acces-
sible, most social communication channel. But so far, the mo-
bile communication channel has not been fully exploited by the
loyalty programs. The thing that changed last year is that Apple
discovered the holy grail of
mobile usability, and imple-
mented it in the iPhone.
Today, every user needs
one and every company
needs to be on the AppStore.
By the time this article is
published, Apple will offer
more than 100,000 iPhone
applications and we will
probably use ‘iPhoogle’ to
navigate through the App-
Store jungle.
So there is no doubt that
in 2010 we will see the first
loyalty program launching
an iPhone application that
covers all relevant loyalty processes to its members. From ac-
cessing their point balance to actually redeeming their points
from wherever they are located, this will be a big step forward
in providing a mobile channel that is powerful for both pro-
gram sponsor and program member alike.
Loyalty programs that lead the way in 2010 will develop
iPhone-based, global points earn and burn solutions to reach
out to their members—‘Globiphonization’.
All these applications are fully controlled by Apple and exclusively available to iPhone customers. That, for sure, is pretty powerful. Imagine if Microsoft invented the internet and would have controlled paid distribution and access to websites.
2010 predictions
Future ‘Best Practice’ will go to global loyalty programs that deliver local experiences globally.
In terms of future ‘Technology’ we should certainly expect the convergence of global earn and burn technologies.
Loyalty programs that lead the way in 2010 will develop iPhone-based, global points earn and burn solutions to reach out to their members—‘Globiphonization’.
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Loyalty Management™ • WINTER 2010
2010
50
ocial media as a whole is hands down the
most cost effective tool in driving engage-
ment and influencing purchase decisions. If you
look at some of the most effective social mar-
keters today, their costs are often measured in
terms of an employee’s time. There is absolutely
no upfront cost in setting up a social presence,
there is no media to buy and even the most ad-
vanced practitioners dedicated only a fraction of
their marketing budget.
Given these facts it would seem only a mat-
ter of time before a corporate social presence is
given the place at the table it rightfully deserves.
But this is a good thing for forward looking com-
panies who see the inherent benefits in social
media rather than focusing on the potential
threats. The opportunity to carve out your space
ahead of the competition is right now, and here’s
how to do it.
The BasicsThe first thing to do, if you haven’t already, is get a basic corporate presence set up. A
good starting point is to create a Facebook Fan page, sign up for a Twitter account and
create a corporate blog where you can interact with your customers. Let’s take a look
at those one by one.
Facebook Fan pages are free, feature-rich and allow you to become part of your
customers’ personal day to day lives in the way no other medium can. These pages
are exceptionally well suited for B2C businesses as people often use their consump-
tion choices as a way to express themselves. While many companies are taking this
first step they often miss one important concept: social media is a conversation not a
monologue. Simply posting your marketing on a Fan page every so often is not taking
advantage of the true nature of social media. Good social marketers, such as Absolut
Vodka, capitalize on the intimate relationship this social network provides by offering
their fans exclusive deals and a sense of access to the brand. The result for Absolut is
over 500,000 fans: brand ambassadors waiting to hear from them and willing to spread
the word.
Twitter has evolved to become more than a way to simply express your thoughts in
140 characters or less, but a new communication channel between a company and its
customers. Like a Facebook fan page, a Twitter account is only good if you use it, but
it can go far beyond the occasional product announcement. Dell recently announced it
made $6.5 million in sales due to Twitter with the number of followers increasing 23%
in the last three months alone. And while that’s a small percentage of their overall global
revenue, the cost per sale from this particular social media channel has inspired Dell to
ramp up the investment.
The final basic component of a social media strategy is a corporate blog. Blogs allow
for a more conversational approach to speaking with prospects and customers as well
as facilitate a dialog in ways a corporate web site cannot. Taking this one step further
you will often see employees blogging in a public forum not directly related to the com-
pany they work for but rather the industry. One of my favorite bloggers, David Berkowitz,
writes excellent posts for the social media community which in turn positions his em-
ployer as an agency more than capable of guiding clients through the social landscape.
Dell recently announced it made $6.5 million in sales due to Twitter with the number of followers increasing 23% in the last three months alone.
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Loyalty Management™ • LOYALTY360.ORG
by Jared Stivers, Walker+Stivers Analytics
The Year You Invest in Social Media2010You’ve most likely heard all the buzzwords surrounding social media: Tweeting, Facebook Fans, Mommy bloggers and the like. In fact, many of you are probably fairly well versed in social media in your private lives. Anyone who has posted a photo on Flickr, set up a Facebook page or simply commented on a blog has contributed to the social revolution. But despite the fact that even our parents are now setting up pages on Facebook, we have been remarkably slow as marketers to take advantage of this new medium.
TECHNOLOGY, TRENDS & REWARDS
51
Let Your Employees ContributeHaving an expert blogger on your payroll is cer-
tainly a good thing, but you can also take advantage
of the social nature of your employees. Often time
companies will make the news for imposing draconi-
an measures that seek to avoid an embarrassing em-
ployee mistake in the social world by outright banning
the use of Twitter or other social channels. However,
most companies simply ignore social media and the
role that employees should be playing.
Those on the forefront however, create a social
media policy that outlines how the company should
be portrayed and encourages its workforce to go out
and spread the message. Awareness, preference and
purchase no longer follows a linear path from the cor-
porate marketing dept. to the potential customer but
rather the marketing funnel is now interconnected
touching prospects several places on the social web.
This is a good thing; forward looking companies are
taking advantage of these connections and using their
employees to grow the bottom line.
Hitting Your NumbersIn the end, the goal of social media is the same as
all of your marketing; build the brand and increase
sales. In order to effectively achieve these goals with-
out spinning your wheels it’s important to set goals
and periodically take stock of where you are. Like
most online marketing there is no lack of metrics in
the social sphere but directly attributing your online
presence to sales can get a little tricky.
The best way to measure the contribution of your
social presence is to allow a customer to complete a
transaction directly from the social network. Cosmet-
ics giant Sephora has done an excellent job creating
a Facebook community where it showcases special
offers for its fans. One click gets you to the product
page where each transaction can be attributed to
Facebook.
For most of us, especially those with longer sales
cycles, it’s not that simple. This is where the brand
building aspect comes in. Continuing with the Face-
book example your best indicator of success is the
number of Fans you have. With Twitter it’s the num-
ber of followers and also your “retweets” or how many
of your posts are passed along by other people. One
simple metric is to benchmark yourself against your
competitors; the number of Facebook Fans and Twit-
ter followers is prominently displayed for all the world
to see.
The Bottom LineWhile social media is still a small part of most mar-
keting budgets the ROI provided from this channel
has gotten marketing managers to take notice. In-
vesting in social media should be a no-brainer given
the direct impact on sales as well as the deep level of
engagement provided by this medium. As we get bet-
ter at creating and nurturing conversations with our
customers and prospects a well thought out and ex-
ecuted social presence can be the difference between
good companies and great companies.
While many companies
not a monologue.social media is a conversation
one important concept:they often miss
are taking this first step
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Loyalty Management™ • WINTER 2010
2010 Predictions
•Real time search will index your facebook status updates so quickly when that special someone changes their relationship status to “single” the rest of the world will know about it before you do
•Your personal (facebook) and professional (LinkedIn) online personas will merge and become one so don’t post any status updates or cheeky comments you wouldn’t want to see on the cover of a newspaper
•As Twitter becomes more ubiquitous we will all speak in sentences 140 characters or less
•And one that I know will be true: Google will replace Microsoft as the 800 pound gorilla we all love to hate.
2010
by Amit Gupta, InMobi
Advertising andMarketing
Mobile Applications
obile applications are a fast growing area in the mobile eco-
system and are a hot topic in most industry forums these days. Due
to their unique format and captive audience they offer a huge potential for
mobile marketing and advertising. In fact, it has become one of the pre-
ferred mode of mobile advertising for many brands and agencies for a lot
of reasons. Though the appeal of in-application advertising is manifold, be-
low are some of the aspects.
52
It’s big, it’s great and it’s here.
Advertisers are also looking at application advertising &
marketing as a way to gain consumer loyalty. In one example,
McDonalds had a way to track the number of burgers bought
through the consumer’s mobile phone and every 10 burgers
would entitle the consumer to 1 free burger. We have indeed
witnessed a rising number of advertisers focusing on loyalty
management. But it has to be kept in mind that this needs a lot
of thought in terms of incentives, initiatives, procedure, man-
agement etc. So far, we have only witnessed some of the more
mature brands going in for mobile form of loyalty management.
For brands that already have a loyalty program in place, it is
just a matter of developing mobile applications so as to phase
out the use of membership cards and other forms of identity and
integrate it all into 1 device—the mobile. We have seen that the
mobile phones are being used for more and more applications
reducing the number of other devices needed. Phones now do
the job of a music player, a watch, camera, radio, computer and
many other applications. It is just a matter of time until mobile
phones become an instrument of identity. Loyalty management
through mobile phones is still in its nascent stage and brands
that are investing in it now are enjoying the benefits of being
first in the trade.
•The fundamental reason is that mobile applications can deliver a richer
and more compelling user experience than most other modes of mobile
advertising. As the phone capabilities start getting better, the feel of the ap-
plication also improves. For example, a game with motion sensors to move
in different directions is way more attractive than a game with button con-
trols. Hence as better phones begin to hit the market, more innovative apps
are developed that use the enhanced features of phones giving users a very
engaging experience. Hence, an increasing number of brands have begun to
sponsor an entire application and provide it for free for consumers creating
a big opportunity for brand awareness.
•The applications on mobile phones can avail all the mobile phone features
such as the camera, GPS, media player or 3D graphics. If ad campaigns are
designed to effectively utilize the mobile phone capabilities, then it can
lead to very engaging and successful ads. For example, since most phones
come with GPS capabilities, the ads could make use of the location based
information.
•Applications that provide value to the user, usually stay on the users phone
and potentially bring in a viral effect. Moreover, if the application is design
such that it does not need to be connected to the internet, then it can also
be used when the users are offline. This shoots up the amount of usage of
the application, in turn resulting in more impact of the brand to the user.
Some of the brands that use applications in this category are Zippo, Dock-
ers, Branded Games etc.
An increasing number of brands have begun to sponsor and entire application and provide it for free for consumers creating a big opportunity for brand awareness.
New Year Predictions:1.Usage of internet via smart phones in the eastern world will grow exponentially and will begin to catch up with the west.
2.mCommerce will see a higher levels of adoption and emphasis will be given to the user experience creating a seamless experience on mobile payments.
3.Location-based services will be the need of the hour resulting in increased penetration of GPS-enabled phones as well as phones with superior geo-tagging technology.
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TECHNOLOGY, TRENDS & REWARDS
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Loyalty Management™ • LOYALTY360.ORG
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BEST BUSINESS PRACTICES
54 Loyalty Management™ • LOYALTY360.ORG
OfferIQPartnership—now possible between instore
merchants and loyalty and affinity programs
OfferIQ’s Patent Pending proprietary Virtual In-
centive Platform (VIP)™ bridges the gap for successful partnerships between retailers and
card loyalty and affinity programs. Retailers can now tap these relationships to effectively
target different and unique offerings to potential new customers and existing ones.
Plus, consumers can now recognize the redemption of the offer at point of sale without
any point of sale hardware or software adjustment at all! OfferIQ brings mobile coupon
delivery and redemption to the physical shopping world.
With OfferIQ, any retailer (regardless of size) is armed
with the cost-effective, turnkey solution needed to create
an immediate, repeating, and strengthening interactive
cycle of offers and rewards with their customers. Through
OfferIQ’s embedded technology, retailers will effectively
gain a competitive edge by:
•Offering customers special, relevant, targeted offers in
real-time
•Easily and inexpensively targeting customers based on
individual behavior, preferences, location and buying pat-
terns
•Setting offer parameters based on customer segments and profiles
•Sending offers via email or location based mobile
•Analyzing each offer and offer segment using a flexible, online reporting dashboard
•Creating virtual “frequent shopper programs” to reward loyal customers.
•Gaining new customers driven by OfferIQ’s issuer/bank partners and consumer
aggregators
No POS changes. No associate training. And easy for your customer.
Find more at www.offeriq.com
CreditzIs the US
ready for a
new digital
currency?
The Creditz system was designed to offer merchants
the power to build relationships while motivating consum-
ers to stay loyal to specific establishments, increase visits
and spend more. Sophisticated technology was developed
based on listening to the customer—re-
tailers and their customers.
Utilizing IBM's latest db2 database and
Series I infrastructure technology, the
Creditz system allows merchants to of-
fer their customers general and targeted
offerings. Merchants are now able to of-
fer personalized promotions by customer
value, customer segment or by customer
preference and receive these offers online
via email, laser targeted mailings, or wire-
less personal devices.
In parallel, as transactions take place
the Creditz system will record, store, mine, filter, and ana-
lyze the buying patterns of the customers and merge this
data with personal preferences and survey data of each in-
dividual consumer. The result is true secure consumer data
like never before—flexible and personalized customer rec-
ognition with the power of market intelligence.
Creditz gives consumers digitalized cash they can redeem
at any Creditz merchant; instant digital cash, instant ability
to spend on any product and service the consumer wants.
Creditz gives consumers digitalized cash they can redeem at any Creditz merchant; instant digital cash, instant ability to spend
LoyaltyInnovationPRODUCTS,
ADVANCEMENTS,
& TECHNOLOGIES
FOR 2010
Convego Air MobileG&D unveiled a completely new form factor for debit cards. Con-
vego Air Mobile is a sticker which enables the user to pay contact-
lessly.
The sticker contains the full functionality of a credit or debit card.
Once the thin and pliable foil has been affixed to a cellphone or
PDA, the device can be used to pay bills at all cash terminals and
ticket machines supporting the worldwide contactless MasterCard
PayPass standard.
The Convego Air Mobile sticker is an important transitional
technology on the way to contactless payment transactions by cell-
phone. Current terminal infrastructure limitations present a clear
barrier to NFC and require targeted investment by MasterCard. A
key factor to trigger investment is consumer acceptance of NFC,
and sticker technology could help boost uptake until phones with
embedded NFC technology become widely available.
For instance, when G&D worked with O2 on an NFC trial in the
U.K last year, 85% of participants said the make and model of the
handset would influence their decision to adopt NFC services. The
Convego Air Mobile sticker addresses this consumer decision in the
short term, allowing the user to continue with their current handset.
What are the implications for prepaid? A companion contactless
sticker to a prepaid card account, or indeed the sticker acting as a
prepaid account in its own right presents all kinds of opportunities...
Bling NationBling Nation® is a payments network provider for com-
munity banks nationwide. Bling Nation enables financial
institutions to more profitably support payments be-
tween their local demand deposit accounts (DDA) and
merchant account holders by bypassing the current debit payment model.
Bling Nation’s Community Payments Service enables banks to convert potential
on-us debit transactions to actual on-us transactions by offering merchants and
consumers secure, contactless payments at the point of sale. Customers tap their
mobile phones on the contactless reader installed at the point of sale at local mer-
chants in the network. After every successful transaction, customers receive instant
payment confirmation via SMS text message to their mobile phone, which includes
their current bank account balance.
PCI compliant, Bling Nation provides a secure payment network that significantly
reduces instances of fraud that are associated with traditional debit and credit net-
works. Because no personal or bank account information is shared during the trans-
action, Bling Nation’s technology drastically reduces the risk associated with device
cloning or identity theft.
For community banks seeking to reduce operating expenses, while owning any
local debit transactions between their own DDA customers and their merchant cus-
tomers, Bling Nation delivers a closed-loop payment network in which the bank acts
as both the issuer of consumer payment mechanisms and the merchant acquirer. Al-
lowing participating customers to make contactless payments that are processed
entirely within the network reduces the number of participants in the payments value
chain and, as such, enables banks to claim a larger share of transaction values.
S2H REPLAYThe S2H REPLAY rewards
people for being physically
active (running, playing
sports, dancing, etc) by
measuring the amount of activity done over a period of time (see www.s2h.com). Currently each
60 minutes of activity generates a unique reward code which can be uploaded to a micro-site to
accumulate points.
These points can be used towards gaining rewards (free movie tickets, DVDs, sports equipment,
MP3s etc), and on S2H.com, they can be used for challenges to other users (i.e. parents challenge
children; friends challenge friends; teachers challenge students), play games or used to improve the
look of a user’s online avatar.
Businesses in pharma, healthcare, insurance, sports, education, retail and more can benefit from
customizing this promotional product, distributing this to their customers or employees and gain by:
•building valuable and unique brand awareness and loyalty
•rewarding their customers and employees for their physical activity
•distinguishing themselves as a promoter of healthy living
•driving traffic to their website & collecting valuable customer data
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Loyalty Management™ • WINTER 2010
The pilots being undertaken by Bling Nation in North America are definitely worth looking out for with the integration of loyalty & payments using mobile & rfid technologies.
—Upendra Namburi, loyaltyredefined.blogspot.com
BEST BUSINESS PRACTICES
56
The Private LabelCredit Card Dilemmaby Jeffrey Harris, SHC Direct
erhaps there has never been a time when it has been more important than it is right now to know and understand the shopping practices and preferences of your customers so that you may communicate with them in ways that they will find meaningful and inviting…that is, other than by besieging them with emailed discount offers.
But, what if the basis of your loyalty program and your main source of customer data and insight is your private label card?
Loyalty Management™ • LOYALTY360.ORG
P
But, what if the basis of your loyalty program and
your main source of customer data and insight is your
private label card? If this is the case, here’s a rather
critical question to consider: is your private label card
really as powerful a tool for cultivating customer loy-
alty—especially in today’s credit averse environment—
as it perhaps once was?
The fact is, a number of retail marketing leaders
have been determining that the answer is, “No…it is
not,” …and here are two major reasons why:
First, a large base of card-holders does not equate
to a high rate of active card use…and diminished card
use means diminished customer insight opportunity.
We all know why customers sign up for private label
cards. It’s a response to the opportunity to get a 10%
or 15% discount on everything purchased that day (or
as soon as the card is approved). The tactic definitely
works for stimulating applications. But what matters
much more is the percentage of card holders who con-
tinue to use the card. Few retailers claim that more
than 40% to 50% of their cards are actively used. What
that means is that if “loyalty” is tied solely to a branded
credit card, all those inactive card holders are essen-
tially invisible to analysis, development of insight into
their shopping behavior and, consequently, your abil-
ity to communicate with them in a targeted and cost
effective manner.
Secondly, some percentage of the customer base—
even best customers for a given brand—have never
accepted the card and will not ever do so. They have
other cards they use—airline mileage cards, rebate
cards, etc., or have determined instead to utilize debit
cards or simply pay with cash.
So the question becomes even broader, e.g., what percentage of the
total customer base—and their associated shopping activity—is gen-
erally invisible? In cases where most loyalty cultivation efforts are
associated with a retailer’s credit card, the answer simply cannot be
known. Without insight, what is there to do but extend one discount
offer after another to the world in hopes of increasing store traffic?
Changing the Customer Conversation A better way is to get promptly to work on the development of a
data base that is not dependent upon the use of any particular credit
card. Assuming your POS system can link a customer identity number
(email address, for instance, loyalty program member number or even
phone number) to a specific transaction, you may begin the process
of gaining insight into all the important aspects of your customer’s
purchasing behavior…shopping frequency, locations visited, transac-
tion value, what items are purchased, and based on intense analysis
of customer preferences, what other products might be appropriately
suggested for trial. The goal is a stronger, more personalized relation-
ship…it’s the best hope for success in a difficult retail environment.
Don’t have the resources “in house” to make the most of the data
you are able to gather? Then move quickly to find an outside provider
of specialized expertise in data management, segmentation, analyt-
ics campaign design and testing, and overall fact-based strategy de-
velopment. The right partner will contribute to your ongoing success
by helping you improve your communications ROI, increasing incre-
mental sales per customer and optimizing your investment (e.g., re-
ducing expense) in direct marketing.
The goal is a stronger, more personalized relationship—it’s the best hope for success in a difficult retail environment.
New Year Predictions:As customer relationship marketing experts and based on our discussions with many and diverse retailers …
•We anticipate consumer spending will be up by at least 2% during the course of 2010, as compared to 2009.
•We Look for a larger portion of marketing funds to be funneled away from traditional media in 2010 (as compared to 2009) in favor of mobile and electronic marketing.
•Significant progress by retailers will be made in 2010 in the effort to monetize the use of social media.
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57
If “loyalty” is tied solely to a branded credit card, all those inactive card holders are essentially invisible to analysis.
Loyalty Management™ • WINTER 2010
2010
58
The Definition of EngagementDon Peppers, Founding Partner of Peppers & Rogers Group, has
worked to clear the confusion regarding the amorphous term “en-
gagement.” During a recent conversation, Don shared, “I think the
world is full of fuzzy acronyms and names for things. Engagement
was in danger of being one of those very fuzzy concepts.” In order
to help clarify the concept, Peppers blogged about the term and re-
ceived a couple dozen comments through the blog and on Twitter.
This helped him hone a definition.
“Engagement implies that somebody is involved. And more than
involved it means that you, in fact, take initiative, initiative that is
positive. We have a very simple definition of engagement,” Peppers
continued. “Engagement is most simply defined as positive and pro-
active involvement."
Engagement as a DriverThere is growing evidence that engaged employees and custom-
ers drive business results. In 2008, the Human Capital Institute and
IBM partnered on a study that looked at three-year financial track
records of 287 publicly traded companies. The findings included that
companies focused on measuring and addressing engagement and
aligning incentives, a powerful engagement tool, were more likely to
outperform others in their industries.
The Center for Talent Solutions, CTS, (formerly “Center for Tal-
ent Retention”) has been helping firms increase engagement levels of
employees and measuring individual performance for years. It has
found that what it calls “fully engaged” employees deliver, on aver-
age, 22% better performance than normally engaged employees.
In a case study undertaken by CTS, one company went
from a $112,000,000 loss to a $56,000,000 gain while ac-
tively pursuing specific programs designed to improve en-
gagement levels. This study and others like it are highlighted
Engagement is good for business. In fact, a large percentage of businesses measure it and billions of
dollars are spent attempting to improve it through incentives, motivational meetings, rewards, recognition
and loyalty programs. Unfortunately, program results are rarely measured so there is little proof that the
investments pay off. This shocking reality is troublesome at best. At its worst, the inability to prove value
makes a company’s investment in engagement questionable.
by Todd Hanson, Catalyst Performance Group, Inc.
of Results MeasurementEngagement and the ROI
BEST BUSINESS PRACTICES
Loyalty Management™ • LOYALTY360.ORG
in “The Engagement of Economics” whitepaper available at
www.ROIofEngagement.com.
The Results Measurement GapReturn on investment, or ROI, has been the buzz in the incentive,
rewards, recognition, meetings and loyalty arena for 10-plus years.
Countless articles have been written about it, keynotes presented
and more. In fact, search “ROI” in Google and the result is a stun-
ning 99 million hits. Yet, rarely do companies measure results of
their engagement programs.
One example of the gap in results measurement was apparent
during a recent Human Capital Institute webinar on recognition,
attended by more than 300 participants. A poll revealed that ap-
proximately 50% of the respondents measured results by consider-
ing engagement scores, yet only 10% measured ROI of their engage-
ment programs.
So, why don’t companies measure ROI of engagement programs?
According to a study conducted by the Incentive Research Foun-
dation, IRF, the two most common reasons are that the company
views the program as a necessary expense and the program does
not have the visibility of senior level management.
When asked why more companies don’t measure results, Rodger
Stotz, Principal at Delta Qi Consulting and Chief Research Officer
at Incentive Research Foundation, said, “I think that many com-
panies rely on literature that illustrates higher engagement scores
correlating with improved financial results. In addition, most
companies don’t know how to do it. Unless the program is under
scrutiny, the need isn’t perceived as compelling enough.” When
questioned regarding the wisdom of such a mindset, Stotz added,
“When a program is under scrutiny, ROI is exactly what is needed
to defend or justify a program.”
The Silver BulletIn the early 70’s, a young professional
named Jack Phillips completed his first impact
study for a top executive at his firm. It was to
be the first of many. As his skills developed, he
began to write and speak about the ROI meth-
odology he developed. 1983 marked the pub-
lishing of his first book on the subject and in
1993, The ROI Institute was launched. Today,
the methodology is used in more than 50 coun-
tries on thousands of studies each year.
The now trademarked ROI Methodology
has become a widely-accepted formula for
measuring results, up to and including return
on investment. When asked about
whether engagement programs
are typically measured, Phillips
said “Not many. Most of these
programs are developed with a
logical, common sense approach,
particularly a goal or objective is
achieved and the reward is matched to meet
that need. Unfortunately, there is not much
analysis around these programs, particularly
the type of analysis that we recommend.”
Phillip’s ROI Methodology is a systematic
approach that takes a potentially complicated
task and breaks it down into logical, sequential
steps. It generates six types of data and all six
types are needed to fully understand the suc-
cess (or lack of success) of a program. In the
process of calculating ROI, Phillips insists on
using very conservative “Guiding Principles”
to assure that standards are met, especially
when converting data to money. This helps
assure credibility with discerning CFOs and
CEOs.
Another important part of the process is
isolating the effects of the program. For ex-
ample, sometimes objectives are met or not
met for reasons other than the program itself.
There are other factors impacting results that
create static. The development and use of iso-
lation techniques has been a major contributor
to the overall acceptance of studies completed
using the ROI Methodology.
Lastly, the methodology insists that when
comparing financial benefits to a program’s
cost, the cost is to be “fully loaded.” As a result,
all direct and indirect expenses are included
in these calculations.
The ROI of Results MeasurementCurrent events and a flagging global econ-
omy have only amplified the interest in and
need for results measurement. Although ROI
Methodology™ makes it doable and credible,
is it really worth the effort?
According to Phillips, “This process is need-
ed in this industry now. It can be implemented
with a minimum amount of resources and
cost. An organization must be proactive and
not wait for the request to prove value. Mea-
59
Engagement is most simply defined as positive and proactive involvement.
–Don Peppers, Founding Partner, Peppers & Rogers Group
Loyalty Management™ • WINTER 2010
2010 trends and resolution
•2010 will be a year of unprecedented opportunity with both big losers and big winners. Innovation will be the differentiator.
•Increased use of holistic engagement strategies that integrate loyalty, reward, recognition, incentive, meeting and event best practices targeting employees, customers and even vendors.
Win. Celebrate. Repeat. Lose. Learn. Try again.
2010
surement, routine accountability, and process
improvement should be a part of the culture.”
At its core, measuring results serves as a
process improvement tool. Data is collected,
insight is gained and the insight fuels continu-
ous improvement that is evidence-based. It
almost assures a strong ROI for results mea-
surement. For example, a pharmaceutical
company gained insight into the challenges
its sales force experienced with program
communication and registration. Not only
did the evaluation identify a previously un-
known problem, it provided valuable insight
that pointed to a solution. The net result was a
small investment improved par-
ticipant satisfaction, reduced
administrative errors and saved
countless hours of time with
sales professionals. That alone
provided a good ROI.
In addition to driving evi-
dence-based continuous improvement, results
measurement enables companies to defend
existing engagement initiatives and justify
future investments. Imagine the power asso-
ciated with being able to prove the value of an
investment with a credible evaluation.
Rodger Stotz said, “Despite the compel-
ling evidence that improving engagement
improves business results, we still should be
measuring ROI. And when we do, we should
share the results in order to learn from each
other.” L
60
ust recently, I was having a conversation with a po-
tential client; the CEO was searching for an individual to
formulate a sales team. I started with the progression of usual
questions (type of professional background needed, years of
experience, preference to candidates from particular com-
panies, etc). The CEO stopped me and said “I’d like this ex-
ecutive to have payments experience, but beyond that, it’s all
about finding the right personality. Our company is here to
develop people and we need to find individuals that want to
excel. We look for energetic leaders and someone that can de-
velop others into leaders.”
What a refreshing take. This country was founded on the
premises that if you work hard, do your job well, then you will
succeed. In fact, part of the blame for the recent economic cri-
sis can be attributed to people that sat back, made investments
they knew were questionable and just watched the money fall
from the sky. As a result, many employees who worked hard
and did a great job were laid off. Trust and loyalty was bro-
ken—employees have lost faith and belief in their company.
Fewer organizations can assure employees will have a job to-
morrow and deals with clients are lost even more due to the
Three Components for a Successful Business Model
economic turbulence. Banks are receiving TARP funds, but
not putting that money back into the economy through small
business loans because they don’t trust the economy to hold up.
This pattern is not only exclusive to the current housing, in-
surance and auto crisis. Who in the payments industry hasn’t
run into a small business owner and got to talking about trans-
action processing, and the next thing you know the merchant
is telling you a horror story of their last or current processor,
the fees they are paying, or the problems they’re having with
customer service? Because of unethical behavior or misrepre-
sentation from others in the payments industry, we’re all pay-
ing that price in bringing on merchants now.
It’s time for a new business model. A model that isn’t about the bottom line, but a model that understands that everything contributes to the bottom line.
When we encourage our employees to excel, we as a com-
pany are going to ultimately be stronger. If you behave with
complete integrity and openness with your clients, you can
build that loyalty so that you are more than good on your word
and that you are their consultant for the long term.
by Eric Granado, CSH Consulting
J
BEST BUSINESS PRACTICES
Loyalty Management™ • LOYALTY360.ORG 61
Once you’ve accepted that everything you do as a company
contributes to the company’s success, it’s time to start active
employee development. This can be broken down to three key
components:
Career PathEveryone in the organization should have a clear, career
path defined. This doesn’t mean you tell your Call Center
Manager to target and assign different people to go to Risk
or Sales, accordingly. What this entails is sitting down with
your management team and having a conversation about their
goals and interests within the company, and where they see
themselves headed. The management team should then do the
same with all employees. This is a great chance to get feedback
on what can be improved or enhanced. The goal is to increase
employee loyalty because the focus is changed from this be-
ing their job to establishing a career path. When the company
views employees as an asset, they will be more inclined to in-
vest in the company.
Industry-Specific TrainingThe more your employees know about their industry, the
better able they are to perform in all aspects. For example, be-
ing thoroughly knowledgeable of the key indicators and value
added propositions that keep customers loyal to your brand
and making the distinction between frequency and loyalty
programs are significant. This can make a huge difference on
profits and garnering long term customer loyalty and exceed-
ing their expectations.
Encourage your employees to learn as much as they can
about the gift and loyalty industry, in any venue possible. This
doesn’t necessarily mean you’re taking employees away from
their daily duties to do a training class. You can distribute
trade publications/magazines, encourage employees to sign
up for industry related webinars and join networks so that
they are receiving real-time information on what’s going on in
the gift and loyalty space.
CommunicationHave you ever gotten upset after receiving an email or
voicemail only to realize later that you misunderstood what
the other person said? I’m a firm believer that 90% of business
problems can be solved with effective communication. Com-
munication is not only telling clients, employees, and partners
exactly what you can do for them, but also listening effectively.
A client is not often looking for just the least expensive option.
Their needs will vary and it’s up to you to provide the best
solution for their specific needs. It is best to train employees
to first listen to what the client or partner is saying, and then
clarify any potential problems that are mentioned in the con-
versation. Suddenly, your sales person turns into a consultant,
and is better adept to provide superior customer service, and
ultimately, is able to suggest the best possible solution.
To conclude, when you have a full staff of employees who
are professional and excited about their career path, experts
in their field and extremely efficient communicators, you have
the recipe for a successful organization. This new business
model isn’t about simply increasing fees in the fine print or
giving top execs a haircut when profits are down. This model
is about understanding the needs of your clients and employ-
ees and creating solutions that work for everyone. Your clients
will recognize that you understand their needs on more than
just a transactional level. You will be able to build a firm foun-
dation within the business world.
In the payments groups I belong to, I see conversations
about instituting regulations and mandatory certifications to
increase the quality of business that’s being given. If we want
the industry to change, if we want low turnover with maxi-
mum employee development, if we want merchant and cus-
tomer loyalty, the way to change the business world is to start
changing the way we do things now. Building up trust and
communication will ensure you have a steady client stream
for years to come.
Communication is not only telling clients, employees, and partners exactly what you can do for them, but also listening effectively.
L
Loyalty Management™ • WINTER 2010
2010 Loyalty & Engagement Resolutions
1. Take as many risks as possible without letting myself say no; even if I think the entire idea is completely, utterly crazy!
2. Read one personal development book each month.
3. Get out of the comfort zone and dare to be different; identify what’s missing & find solutions.
2010
62
In today’s competitive business environment, an organization cannot afford to have employees give a half-hearted ef-fort. Their contribution must be all that it can be in order to foster organizational prosperity. And, any businessperson worth their salt knows that without growth, an organization will falter and die. What can managers and supervisors do to foster growth and build employee contributions? Here are ten ideas that will achieve both goals—increased employee contributions and organizational profits. They are not presented in any order of importance because all are important. Why not use these ideas to evaluate what is going on in your organization?
1. Lead by ExampleI’m probably from the old school but, as a manager, I al-
ways felt that I could not ask anyone working for me to do
something that I would not be willing to do. If employees feel
that the work they are assigned is a task they know you would
do, resistance is dramatically reduced. Secondly, walk your
talk. If you say everyone should come to work on time and you
never do, that message sends a mixed signal. Workers under-
stand that rank has its privileges, but they also understand
excess. There is a converse relationship on this point. That is,
the more excess they see their leaders practice, the greater
the morale gap. What is the privilege gap in your organization?
2. Grow Your EmployeesThe success of your organization will be in direct propor-
tion to how well you educate employees on their responsibili-
ties. In my observations on this practice, the worst violation
of this idea is in the ranks of management. We find a good
worker, make them a supervisor and then believe they are go-
ing to receive divine intervention to help with their decision
process. There must be constant support to help a new su-
pervisor or employee understand the rudiments of their job
responsibilities. Osmosis does not work in these cases. By
constantly evaluating individual progress and making the nec-
essary adjustments and providing more training for every em-
ployee serves as a great morale builder. Professional growth
is a stimulator. Do you have a growth plan for every employee
in your organization?
3. Compensate FairlyWhile money may not always be the magic motivator, it certainly is judged as
a reward for our efforts. Compensation (pay and benefits) is best gauged by how
well an individual performs their job, the need for what they do, and the difficulty
of replacing them. Use these three points to measure the fitness of your entire
compensation package. Staying competitive builds longevity in the work force
and that lends itself to continual growth and ultimately survival in competitive
markets. Good employees deserve good compensation. Keeping everyone feel-
ing that they are being treated fairly in this arena is an important morale builder.
How does your compensation package compare to your competitors?
4. Involve WorkersOften times, the best ideas for improvement come from individuals doing the
work in areas that are being evaluated for improvement potential. Don’t ever
overlook the fertile ground collectively know as the brainpower of your employ-
ees. Managers who understand this rank among the best, and their departments
are among the most efficient and effective within the organization. Toyota is
famous for the thousands of suggestions provided by employees. Few can argue
that Toyota is not a successful enterprise. How many suggestions have you imple-
mented from your employees in the last year?
by Billy Arcement, MEd, The Leadership Strategist
Ten Ideas to Build Morale in any Organization
BEST BUSINESS PRACTICES
Loyalty Management™ • LOYALTY360.ORG 63
5. Stay InformedA few years ago a popular term was “managing while walking around.”
Staying locked in your office is not the way to find out what is going
on in your department. Talk to employees. Watch as you walk where
your employees work. This can be a powerful learning tool. I recall a top
manager with whom I was working as a consultant who rarely left the
office to wander through the organization. The result was a minimum
degree of loyalty and commitment to carrying out work responsibili-
ties, and a lack of information regarding how things were affecting the
work force. And, this ultimately was a contributing factor in the loss of
the leadership role by this individual. On the other hand, Herb Kelleher,
former CEO of Southwest Airlines is a prime example of a leader who
always knew what was going on in his organization. Kelleher placed
employees high on his list of relationships to grow. He was beloved
and very effective leading his airline. Can anyone doubt the success
of Southwest? How informed are you about what is going on within the
walls of your department or company?
6. Make Work InterestingMany miss the significance of this statement. Few things can mas-
sacre morale and motivation more than working at an uninteresting job.
Yes, most jobs are not fascinating all the time. But one way to assure
continual interest is to match job requirements with the skills and tal-
ents of workers. The more closely you can create congruency with work
responsibilities and employee skills, the greater the work satisfaction
will be. And, managers who do this have incredible results. Do you know
the skill and interest level of your employees and are you matching them
to their work requirements?
7. Bring a Cheerful Personality to WorkAdmittedly, there are times when being cheerful is difficult. But, as
a leader, you have the obligation to set the attitude atmosphere. Your
demeanor is critical to the success of the organization. Be friendly,
genuinely caring for all employees under your charge, and approach
all with as positive an attitude as you can muster. Therefore, it’s very
important to make pessimism part of the past, not the current way you
run your business. Following the “Yellow brick road of positive thinking”
will produce results that might astound you. How is your attitude? Is it
worth catching?
8. Be Open to New IdeasNever forget that others within your organization are capable of
making substantial contributions. Many times, all you have to do is ask
their opinion or seek their ideas. I talked about utilization of employee
suggestions in point four. Here, I want to take the idea a step further
by suggesting that leaders should always keep an open mind to ideas
given to them by employees. Keeping a closed mind and the mentality
that “this is the way we do it here” is a sure turnoff. You don’t have to
implement every idea provided but you’d better listen to those given
and implement the ones that can benefit employees and the organiza-
tion. Be willing to be a perpetual student who views employees as po-
tential teachers. Remember, it’s not always the boss who has the best
ideas. How many times in the last month have you opened your mind to
new ideas from those who work for you?
9. Make Integrity Your Guiding StarIf people are to begin to trust you, they must feel you possess integ-
rity as the cornerstone of all your actions. High standards of behavior
keep you on the high ground and present a consistent behavior pattern
employees can predict and trust. Workers may not always agree with
your decisions, but they will follow them with less resistance when they
know every decision is laced with integrity. Workers want a consistent
ethical performance, not a self-serving mindset. How would your work-
ers describe your level of integrity?
10. Build Loyalty and TeamworkAgain, trust enters the picture. Loyalty can only grow when workers
trust management. Workers accept leaders when they feel a reciproca-
tion of respect in the work place. Leaders who cannot be trusted cannot
build a loyal following. Likewise, a team spirit cannot grow if workers
sense a selfish attitude on the part of their management. Practicing all
the previous nine ideas I’ve shared will build a high functioning team.
The leader cannot do it all. He or she must have cooperation from those
they lead and that only comes when a team spirit is emphasized and
permeates the entire organization. Another item to consider today is
that young workers (Gen X) are not as loyal to the organization as pre-
vious worker generations and are much more mobile. Therefore, to help
keep your workforce intact, create a strong team spirit, develop a high
level of trust, and operate in an environment that displays your loyalty
to employees. How strong is your teambuilding process?
Well, how did you rate yourself on these ten points? Assess as accurately as possible what is going on within your organi-
zation. Once you’ve reviewed these ten ideas, why not add a few ideas
of your own? Then, make sure that every day these practices become
the way your organization functions. Following these patterns of be-
havior and leadership will build strong morale within your work force
and make managing and leading a much easier task. There is no better
way to grow your business!
To help keep your workforce intact, create a strong team spirit, develop a high level of trust, and operate in an environment that displays your loyalty to employees.
Resolution•Complete new book, Common Sense Leadership in Uncommon Times by the end of 2010
Predictions•It will take all of 2010 for the US Economy to recover•The New Orleans Saints will win the Super Bowl•Florida will repeat as BCS National Champion•I will be one year older at this time next year
2010 predictions & resolutions
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Loyalty Management™ • WINTER 2010
2010
64
by Bob Fetter, Pluris Marketing
Trends, Implicationsand Solutions in Engagement Marketing
ver the past 12 months, we have seen a significant rise in interest surrounding “engagement” marketing, in direct correlation with the rise in interest surrounding Social Media Marketing. In continuous discussion with marketers and consumers, I have noticed several trends that are worth discussing.
TREND: Most marketers are continuing to use a “blast” email strategy. Essentially, this involves doing the minimum amount of work to get the same email out on a daily or weekly basis to every registered email
user in the database. With the recession and all of the economic issues surrounding the rising cost of direct mail, marketers have significantly
increased the use of the email channel. The marketers that I have spoken with do this email blasting with the knowledge that they would like
to do something else, but instead continue this strategy because email is “free” and doing something else will be too much work. These same
marketers readily admit that the effectiveness of those emails is continually decreasing, yet their email database is growing quickly enough to
offset declining performance per email.
IMPLICATION: We are killing email as a marketing channel. Consumers rapidly disengage with our emails knowing that each email is not tailored for them, nor speaks directly with them. This is
particularly worrisome when you consider that the increased use of Social Media and Mobile among consumers is causing a decrease in the
use of email as a communication mechanism. Friends are more likely to post status updates or use text messaging to alert each other to things
they consider important.
SOLUTION: Analytically Driven Email. We spent years building powerful models to direct mail performance. Now that we have the capabilities to inexpensively communicate in
an engaging way with our consumers, we throw those teachings away because email is “free.” By marrying off-the-shelf technologies, such as
content management and an offer catalog, we can vary email content to engage our consumers based on their interests, channels, social site
membership, transactions with us, and any modeling element that we find value in using. Think of an email as a canvas upon which you can
drop highly customized content blocks to drive consumer engagement. Now, how do you get those emails opened? Vary the subject line by
developing and targeting personas that occur naturally within your consumer base. If you engage by interest, you have a real chance at standing
out in a crowded inbox.
O
BEST BUSINESS PRACTICES
Loyalty Management™ • LOYALTY360.ORG
The increased use of Social Media and Mobile among consumers is causing a decrease in the use of email as a communication mechanism.
65
TREND: Those who are doing targeted direct mail are seeing year over year improvements in results because mail box clutter has been significantly diminished.
In fact, many niche catalogers are seeing surprisingly high
performance results because the pendulum swung too far
the other way. Many direct marketers have reduced catalog
prospecting to zero as well, due to expense.
IMPLICATION: The implication of the reduction in direct marketing as a viable prospecting tool is potentially quite large.
We have directional evidence that new consumers coming
from online sources have significantly less potential for
lifetime value than those who are traditionally sourced from
direct mail. This may just be a sign of the times as consumer
loyalty may be down when any offer made by a company can
be quickly price shopped in real time. Despite this, direct mail
still has a valuable place in the marketing mix.
SOLUTION: Cross-Channel Contact Strategies.Develop a plan to vary contact cadence by consumer. To do
this effectively, you need to tightly integrate email promotion
history and web behavior into your analytic environment.
You need to know those who don’t open 99% of your emails
versus those who open 25%, and for those who clicked
through, where did they go and did they convert? What is the
right mix of direct mail, email and social? Techniques such
as simulation and scenario analyses are effective in guiding
contact strategy development. If you can track promotions
down to margin generated, you have a great start in designing
effective contact strategies.
The times are certainly changing and changing
rapidly. It is a fact that our consumers will always
be ahead of us, always trying new things to
enhance their lives. Have you seen FourSquare?
We have a chance to engage them digitally, but we
must be smart about it and we must continually
evolve. Investments in marketing technology must
be made with one requirement firmly in sight. We
don’t know what we need, but when we know we
need it, we need it now.
TREND: Marketers are adopting social media by creating Twitter accounts and Facebook fan pages, and then using those media for promotions such as couponing or specials.
Again, this strategy is similar to the blast email strategy
where every follower or fan receives the same promotion.
Most marketers have no ability to measure the effectiveness of
promotions in Social Media other than by follower or fan count,
so they turn to Social Media Monitoring services.
IMPLICATION: This use of social media will have the same effect as blast email.
Consumers will not be excited about the promotion posted
every day at 11:30a.m. It becomes advertising akin to traditional
print advertising, only the medium is different.
Also, most niche marketers do not generate sufficient
attention in social media to make effective use of a monitoring
service. A typical mid-market retailer might generate a few
hundred mentions per month across blogs, micro-blogs,
forums, comments, etc. These comments are typically positive
or neutral in sentiment. Social Media Monitoring is better
suited to large brands with avid audiences, such as Xbox, or
brands that have a significant and ongoing dialogue with their
consumer base, such as DirecTV or Comcast.
SOLUTION: Use social media best practices derived from direct mail.
If your company has dived into Social Media through a
Twitter account and Facebook Fan Page and you are using those
media for promotional activities, here are a few best practices
to improve your social media effectiveness:
1. When you do a promotion using Social Media, create
and store campaign metadata about that promotion as
you would in direct mail. Save the date, time, specific
promotion and targeted audience (your followers or fans).
By doing this, you can then start to analyze the effects of
that promotion on store or web traffic.
2. When you make an offer in Social Media, ensure that the
link in that offer actually goes to the offer. Sounds simple,
but I am amazed at how many times the link is to the home
page of the specific branded web site and not the actual
offer, forcing me to either search for it or simply leave.
3. Ensure everything is trackable by source. For example,
if you are going to advertise a mobile promotion on
Facebook, Twitter, your branded web site and in-store
promotions, ensure you use different sign-up messages
to track the source of the consumer. Similarly, if you
are doing a coupon-based promotion on Twitter and
Facebook, use different offers or coupon codes to track
redemption by source.
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Do not accept the Sunday Circular mentality when advertising digitally.
Loyalty Management™ • WINTER 2010
66
Loyalty Management (LM): People tend to think of
customer loyalty as being all about the specific programs
that companies run to engage customers, but there seems
to be overlap between customer loyalty and employee en-
gagement. Do you see them as linked?
Melissa Van Dyke: You just have to look at the numbers.
We know from our own research that 43% of customers
who defect from a brand do so because of service. And 77%
of those defections are because of employee attitude. The
link is indisputable.
Barry Kirk: I completely agree. If any aspect of your cus-
tomer experience involves interactions with your employ-
ees, then you can’t have customer loyalty without employee
engagement. Just recently I spent a day in a client’s retail
environment observing how the employee-customer ex-
perience played out. I was abso-
lutely impressed with the level of
care the employees were taking
with each customer. At one point I
leaned over to the manager of that
store as he watched and quietly
said to him, “That is your loyalty program.” What I meant
was that the customer experience is foundational to build-
ing sustained and mutually beneficial relationships. Can you
build on that with great communications, point structures,
game dynamics and rewards? Without a doubt, but you
need that spark between customer and employee first.
M: Without it you are relying too heavily on loyalty program
mechanics to fill the void that should be your valued cus-
tomer experience. The real message here is that you need
to be at least as focused on engaging your employees as you
are on retaining your customers.
LM: So that seems like a lot—launch a whole employee engagement strategy on top of
your customer loyalty program.
B: Well, that’s only true if you assume we’re talking about two distinct initiatives here—a
customer loyalty program and a completely separate employee engagement program.
I think a more enlightened view is to see both as part of a single, holistic loyalty strat-
egy, simply because the two pieces are so interdependent. How that sort of an approach
shows up will vary from organization to organization. In some cases you might be able
to actually launch both as a single program on a shared platform. It’s more likely, though,
that the integration would come in the form of an overarching strategy that takes into
account the impact that each group has on the other. For example, do your employee
performance metrics include the success of the loyalty program and do you provide the
right incentives to achieve those performance objectives? An example could be recog-
nizing employees for the number of customers they sign up for the loyalty program, or
their effectiveness in encouraging the customers they serve to use their program card
with each purchase.
M: Another great example of that is a recent project
we did with a charitable organization to encourage
employees in chain restaurants to solicit customer
donations. You’ve seen that—where you make a small
donation and get to sign your name on a card for all to
see. The employee program was simple and included
targeted education, communication and rewards. Although we didn’t control any other
part of the employee or customer experience, the program helped increase donations at
participating stores 43% over the prior year. Engaging the employees made a significant
difference.
B: There is also an additional piece to this puzzle that I think is often—even usually—
overlooked. That’s the best practice of encouraging your employees to actually become
members of the customer loyalty program themselves. The rationale for that should be
obvious—that your employees get first hand experience of the benefits of the program so
they can better sell it to customers. It’s really difficult for me to recommend the chicken
versus the veal if I’ve never tried either—I can read you what it says in the menu, but not
much else. The same is true for your loyalty program—an associate with direct experi-
ence earning and redeeming is in a far better position to be an evangelist than one who
is simply reciting a script.
The following is a discussion with two experts who address people-centered solutions for different audiences— customers and employees. Barry Kirk focuses on strategy and design for customer loyalty and engagement programs at Maritz and Melissa Van Dyke, also with Maritz, specializes in strategy and design for employee recognition and engagement.
Customer Loyalty in the Road toEngaging Employees
a discussion with Barry Kirk & Melissa Van Dyke, Maritz
You need to be at least as focused on engaging your employees as you are on retaining your customers.
BEST BUSINESS PRACTICES
Loyalty Management™ • LOYALTY360.ORG 67
LM: So it’s really about an integrated approach
to customer experience management. Don’t
companies find that overwhelming?
M: Absolutely. And that does discourage some
companies from getting started. I’ve spoken
with people who want to address customer ex-
perience but believe it is so complex that em-
barking on a customer loyalty and employee
initiative will not be effective because so many
different people “own it”. But, the key is getting
started somewhere and linking where it makes
sense. For example, we worked with a very large
financial institution that had the goal of consoli-
dating over 200 disparate employee reward and
recognition programs into a single integrated
reward platform. The driver was really to save
money and get better control over the resources
invested. And they did that, saving an estimated
35% in administrative costs. But, the best thing
was how it impacted business results, includ-
ing retention, employee satisfaction, and—this
is the key point—customer experience. In ana-
lyzing both customer satisfaction data and re-
ward program statistics, we found that the bank
branches with the most associates recognized
were also the branches with the highest custom-
er satisfaction ratings. We don’t think that was
just a coincidence. Any employee engagement
initiative should be grounded in how to deliver
greater value to customers.
LM: Are there natural leverage points between
customer loyalty and employee engagement?
M: Definitely! In fact, it’s the synergies between
brand
customerexperience
customerloyaltyprograms
employeeengagementinitiatives
43% of customers who defect from a brand do so because of service. And 77% of those defections are because of employee attitude.
Loyalty Management™ • WINTER 2010
these initiatives that make them so powerful. If
you think of it in terms of a Venn diagram, with
your customer loyalty program in one circle and
your employee engagement initiative in another,
there will definitely be areas where organiza-
tional efforts do not overlap.
B: However, where they do overlap, there’s a lot
of power.
M: Without a doubt. We think of both types of
initiatives along 6 dimensions: strategy, com-
munication, measurement, management, tech-
nology, and rewards. A simple way to start is
simply by considering each one of these dimen-
sions for both efforts. For example: Have you
considered customer appreciation as part of
your employee recognition strategy? Have you
communicated all of the customer loyalty pro-
gram parameters to your employees, educated
them on the benefits to the customers, and been
clear in the metrics you’re hoping to drive with
your customer loyalty programs? Have you con-
sidered if there are technology and management
overlaps in the resources you use for your cus-
tomer and employee programs? And have you
considered if consolidating your reward spend
on both fronts makes sense? Again, there will
always be work you’re doing for one group that
doesn’t directly affect the other...but the closer
these programs are aligned, the more powerful
they will be.
B: That’s why I’d take your Venn diagram, Melis-
sa, and add one more circle that says “Brand” or
“Culture” because so often that’s the unnamed
force that is impacting both employee engage-
ment programs and customer loyalty programs.
When I think about programs that I person-
ally enjoy being a member of—Starbucks, for in-
stance—it’s because both the interactions with
employees and the program itself reflect my un-
derstanding of that brand or the culture it repre-
sents. That experience is about much more than
what I’m earning in the program. Conversely, I’m
sure everyone can think of examples of loyalty
programs that are just about the points with
little to no real connection to a brand experi-
ence. That can be a factor of program commu-
nications, but I also tie it back to Melissa’s point
about the impact of employee attitude.
M: Right. If the way the employee introduces the
loyalty program to you, or interacts with you as
you try to use the program, is inconsistent with
your expectations of the brand...well, that’s put-
ting a whole lot more work on the shoulders of
the mechanics of your program.
B: That’s why whenever I’m asked to join a loyal-
ty program—even in places where I know I won’t
ever join—I take a moment to ask the employee
to explain it to me because I’m just curious to
see how they’ll do. About 50% of the time, they
do great and I make a point of telling them so.
But as a loyalty marketer, it’s the other 50% of
the time that keeps me awake at night.
M: Sounds like that other 50% needs some stra-
tegic employee engagement work! L
68
Pushing Loyalty:Connecting Employee Engagement to Customer Loyaltyby Michael Konikoff, Fairlane Group
Guess what? He built it and they came. It wasn’t easy though; he needed to clear the field, build a back stop, put up lighting, put up stands. Basically, build it in a way that would attract them to come. Once they realized that he had built this gem of a baseball diamond and it had everything they needed, they came again and again.
Too bad the same doesn’t hold true for loyalty programs.
“If you build it they will come.” A great line from a great movie.
BEST BUSINESS PRACTICES
Loyalty Management™ • LOYALTY360.ORG 69
uilding a program is not an instant guarantee that the pro-
gram will be successful. In far too many cases, companies treat
this as a cost of doing business rather than building a sustainable
program that has a positive effect on the bottom line. They build a
program, put some rules around it, even establish some branding
and take it to market. Far too often these programs underacheive.
Not only is the value proposition not clear to the customer, but little
if any effort is put into establishing a corporate loyalty culture from
the senior executive level down to the customer front facing em-
ployee base.
There is enough research out there to support that engaged em-
ployees have a very positive effect on corporate revenue growth.
In a case study designed to measure the effect of employee satis-
faction on customer loyalty, Sears Roebuck found that for every 5 percent improvement in employee satisfac-tion there was a 1.3% increase in customer loyalty which produced a 0.5% increase in revenue growth. This amounted to $200 million
dollars.
Engaged and happy employ-
ees, especially those who have
front facing positions with
customers are critical to the
overall success of establishing
the loyalty connection. These
people are critical to making
the experience at point of con-
tact a good one for the customer. Loyalty will be lost if the in store
experience is a bad one. People want to be “Wowed.” In a recent
study by Verde Group, the Retail Council of Canada and the Jay
H. Baker Retail Initiative at the Wharton School, it was found that
“Wow Factors” do have a huge impact on loyalty. They found that
customers who have enjoyed “Wow Experiences” are over 75%
more loyal to the stores than those who have not enjoyed a great
shopping experience. Of course “Wow” shopping moments aren’t
just from engaged sales people, but they do play an integral role.
Aiming for in store excellence from your employees is a critical suc-
cess factor for any loyalty program. While customers want great
in store experiences, they also need staff that are fully trained
on driving the loyalty program internally. A great example of this
would be Shoppers Drug Mart Optimum program. No transaction
is completed without the cashier asking if the customer is part of
the program. If they aren’t, customers are asked if they would like
to join the program. In addition to this, all staff are encouraged to be
members of the program and understand the value proposition and
program rules. This is what I refer to as “Pushing Loyalty.”
Having your employees completely engaged so that they become
ambassadors of the program, ambassadors of the corporate
brand and overall company ambassadors. These are the people
that will have the most lasting affect on your customer base and
their loyalty. People do want to earn their program rewards, but
will quickly become disengaged with a program if the service lev-
els aren’t there.
The message though, needs to resonate down from the top of the
organization and become part of the corporate culture. The most
senior level of executives needs to believe in not only keeping their
employees well trained and engaged, but also be able to bring the
message down to the employee base. They need to establish a
strong link between employees and brand. Employees need to
believe in brand attributes and understand the importance of the
allure of their brand in the buying decision process. Employees
need to understand how to treat customers as individuals and
make each and every customer a brand advocate.
A company that does this
extremely well is one of
Canada’s leading retailer’s,
Harry Rosen. Harry was in-
terviewed a couple of years
back by Profit Magazine in
their “Ask the Legends” se-
ries and had this to say:
“From the very first day, it
has been our intention to be-
friend the customer. We try to enter into some sort of personal re-
lationship with them, where we learn something about them and
always use that information to help sell them the right things. As
we expanded, I would go from store to store and work on the sell-
ing floor. It meant so much to the staff to see that the principles
we espoused in training were in fact the practices of senior man-
agement. That’s the glue: management walking the talk. We’ve
also been able to select the kind of employee who enjoys living by
this idea that there’s nothing more important than the customer.”
By the way, Harry Rosen pays his staff based on customer reten-
tion as opposed to sales commission!
When building customer loyalty, you need to make sure that you
have loyal, well treated, well trained and highly engaged employ-
ees focused on making the buying experience one that custom-
ers will come back for over and over again. This linkage will most
certainly drive bottom line results and overall loyalty. And like the
movie they will come back again and again.
When building customer loyalty, you need to make sure that you have loyal, well treated, well trained and highly engaged employees focused on making the buying experience one that customers will come back for over and over again.
thou
ghts
fo
r 2
010
Economic conditions will continue to improve in 2010 which we predict will bring an increase in overall budgets for loyalty. The other change we expect to see is that people will start changing their redemption patterns. Instead of using their loyalty points for products they need, they are going to start using their points for products they want.
B
L
Loyalty Management™ • WINTER 2010
2010
Founded in 1992, the air miles reward program, a company of LoyaltyOne Inc., is
Canada’s premier coalition loyalty program. More than 10 million active Collector accounts,
representing approximately two-thirds of all Canadian households, actively participate in
the Program. The AIR MILES Reward Program allows Collectors to indulge in leisure, en-
tertainment, merchandise, travel and other lifestyle rewards quickly, simply by doing their
everyday shopping for products and services at AIR MILES Sponsors. AIR MILES reward
miles can be redeemed for more than1,200 different rewards, such as movie passes, family
attractions, electronic merchandise, sports and recreation, travel and more.
A group of 18 major Canadian retailers and Sponsors in the AIR MILES Reward Program
have joined forces to participate in My Planet, an initiative that encourages consumers to
consider making greener lifestyle changes and rewards them for choosing eco-friendly
products and services.
AIR MILES Collectors can earn coveted bonus reward miles when they purchase My
Planet-designated products and services available at over 2,400 AIR MILES Sponsor stores
and outlets across Canada. This significant partnership enhances My Planet redeemable
rewards, information and online community initiatives, creating a program that offers more
tools and incentives to more people than any other sustainability initiative in Canada.
Participating Sponsors include grocery stores (Metro, Safeway); hardware/home cen-
tres (Rona, Tim-Br Mart), pharmacies (Jean Coutu, Lawton Drugs); government (Edmon-
ton Transit); renewable energy provider (Bullfrog Power) and financial institutions (AMEX).
A recent survey of 2,020 households across Canada that collect AIR MILES reward miles
confirmed that bonus reward miles would be a strong incentive for them to choose eco-
friendly products and services, with 53 percent saying it would push them to shop greener.
This finding supports other research by AIR MILES that shows that offering bonus reward
miles can increase sales of a product by over 50 percent. Collectors also cited competitive
pricing (81 percent) and availability of green products where they shop (59 percent) as fac-
tors that would encourage them to buy environmentally friendly products.
“For 17 years, leading Canadian retailers and service providers have used AIR MILES as
a highly effective reward for loyalty, and now they can also use AIR MILES as a reward for
sustainability,” said Bryan Pearson, CEO of LoyaltyOne Inc., which operates the AIR MILES
Reward Program. “By combining the reach of the AIR MILES program which touches mil-
lions of Canadians on a daily basis, with the commitment of our sponsor organizations in-
volved in My Planet, we have the potential to create a massive shift among Canadians to a
more sustainable lifestyle.”
For 17 years, leading Canadian retailers & service providers have used AIR MILES as a highly effective reward for loyalty, and now they can also use AIR MILES as a reward for sustainability.
The Background
The Details
Why It Works
retailers team up to create canada’s largest green rewards program
AIR MILES™ and MY PLANET™extended loyalty program profile
In addition to earning bonus reward miles for choosing
eco-friendly everyday products, AIR MILES Collectors can
also find bonus reward miles on My Planet designated prod-
ucts at specialty stores including Global Pet Foods, Canadian
Springs/Labrador Springs, Uniglass Plus Ziebart/Vitro Plus
Ziebart, Goodyear Tires, and Co-op Country Stores, among
others. In April 2009, AIR MILES introduced a selection of
environmentally sustainable products and services available
to Collectors in exchange for their reward miles. With over
140 products available, My Planet rewards range from transit
passes to green energy services to high efficiency household
appliances to less-toxic cleaning products.
Edmonton Transit Systems will provide AIR MILES collec-
tors with bonus reward miles when they purchase an adult
monthly transit pass—the first government entity in Canada
to offer this type of incentive for green purchases. This offer
complements the many My Planet redemption and earning
opportunities related to eco-friendly transportation, and AIR
MILES is pursuing similar agreements with other government
entities and service providers across Canada.
AIR MILES newest My Planet partner is Bullfrog Power. Bull-
frog, Canada’s leading 100 percent green electricity provider,
is offering bonus reward miles to new residential customers
who sign up for low-impact renewable power.
Alongside the 18 retailers and service providers that have
joined the My Planet program, LoyaltyOne is working with
WWF-Canada to help shift consumer behavior, catalyze
change in the business community and raise awareness about
the importance of conservation. Additionally, WWF-Canada
has been designated as a Charity Rewards partner in the My
Planet program where AIR MILES Collectors can redeem their
miles for a cash donation to WWF-Canada.
“Canadians want to know how to do their part to create a
more sustainable future,” said Gerald Butts, President and
CEO, WWF-Canada. “LoyaltyOne and the AIR MILES Reward
Program are committed to using the power of their sponsor
coalition to help consumers make greener choices, and influ-
ence businesses to take action on the environment.”
May this extended Program Profile inspire you to think outside the box. How do we bring this idea to markets around the world? A rewards program that encourages eco friendly behavior, providing incentives to consum-ers who make better choices, is a great thing. Rewards not just for Canada, but for the planet!
Thumbs Way Up!
The Bonus Rewards of Coalition
THE VERDICT
Each issue we’ll be sending our secret shopper out to experience a particular brand first hand. Our shopper will sign up for the loyalty program, and interact with the company at least three times, then share their experience with all of us. Your suggestions for the next brand review are welcomed: email your ideas to [email protected]
L
BEST BUSINESS PRACTICES
70 Loyalty Management™ • LOYALTY360.ORG
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