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2012 Trends in Loyalty Marketing

2012 Trends in Loyalty Marketing

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2012 Trends in Loyalty Marketing

..............................5 4 PRIVACY ...................................................................7 6 MOBILE ......................................................................................................................................6 5 REAL-TIME MARKETING .................... 4 3 TIME-BASED POSTING ............................................................................ 3 2 SOCIAL MEDIA ...2 2 0 1 2 T R E N D S I N L O YA LT Y M A R K E T I N G TABLE OF CONTENTS 1 GAME MECHANICS .....................................................................................7 7 STAYING AHEAD OF THE CURVE ...............................8 ...........................................

and conventional web sites that may or may not involve e-commerce. much less advocacy. recency. In this new environment. with enormous challenges to establishing any customer relationship at all. the blogosphere. games. print. over $290 million in quarterly sales. set more than fty years ago. Game cation. search. Game cation can make interacting with your brand fun and gives consumers new paths for brand interaction. This whitepaper seeks to keep marketers up-to-date on the newest trends and tactics in loyalty marketing and authentic customer engagement.3 2 0 1 2 T R E N D S I N L O YA LT Y M A R K E T I N G Today’s standards for measuring the strength of customer engagement – frequency. The audience is fragmented as well. entertainment channels. monetary value. and outdoor options available in the Mad Men era. and why online game participation has grown over 700 percent in the last ten years. Brands trying to establish relationships with the members of these diverse groups are hindered by privacy laws that block the most fundamental effort behind establishing a relationship with customers: nding out who they are. and advocacy – are really no different than those in the hit American television show Mad Men. Game Mechanics There’s a reason why World of Warcraft has over eleven million players. Game mechanics rationalize and codify the psychological reasons people enjoy games. While the measures of success remain the same. or using game mechanics in industries other than gaming. . the marketing landscape has changed beyond recognition. Now marketers can use these same techniques to get people hooked on their brand. particularly those initiatives that go beyond simplistic points-for-purchases and encompass the extent of loyalty-building tactics now available. radio. and Millennials whose media habits and modes of communication have little in common. loyalty initiatives play an increasingly important role. Marketers can’t simply tack on the internet to the TV. has produced new concepts ripe for use in marketing like “interval rewards schedules” (participate for a speci ed time period and get a reward) or “micro-leaderboards” (compete with a small group of friends for points). Gen X-ers. The internet itself is fragmented into social media. consisting of Baby Boomers.

there was strong academic evidence that a brand’s most valuable customers are not those with the highest lifetime value (LTV). either on your own. which can in uence them to change their buying behavior.). etc. primarily the wall on a brand’s Facebook page . such as Facebook or Google+. One of the best examples of game cation has nothing to do with a literal game. but you can also apply the tenets of game cation to marketing in many diverse ways that scale costs. Social Media Conventional loyalty programs differentiate themselves through their reward/ purchase ratio and type of reward (merchandise.” Every time airline passengers in a loyalty program are allowed to board rst or use members-only airport lounges. levels. and with Facebook consuming over 12 percent of people’s online time it’s not a bad idea as an initial step. but with artful use of the simple game mechanic called “envy. coupons. brands need to adopt a new strategic approach to how they value their customers. or Amazon where potential customers are in the process of making a decision • posts in relationship venues. a certain amount of envy is created in (at least some of) the passengers who don’t have these privileges. discounts. but those most likely to recommend a brand to pro table new customers – those with the highest lifetime referral value (LRV). Social media ampli es the voice of advocates in three contexts. Even before the rise of social media. where participants may exchange view on brand choices • posts in broadcast venues. In order of importance they are: • posts in market connections such as Trip Advisor. and speci cally. But in order to fully exploit the power of social media. There is a temptation to transfer this thinking to social media. place more value on brand advocacy.4 2 0 1 2 T R E N D S I N L O YA LT Y M A R K E T I N G Game mechanics can of course help you engineer a successful game-oriented program. or in conjunction with an established game.

” meaning access to over one million news streams. “likes” or re-tweets) arise and disappear daily. Morning or evening. weekday or weekend. Measuring success in this area requires new techniques. with over one million “likes. but the benchmarks can be reached. Time-Based Posting So you’ve created a hot Facebook fan page. Relevance relates not only to the customer segment (or individual customer). • Test. No matter what studies may reveal about behavior in general. To take an obvious example. and it’s worth the trouble. even hourly. While there are dozens of studies available that will prove useful timing factoids applied to social media – fans are the least active on Sundays – the two best practices for successful timing haven’t changed since the days of traditional direct marketing via postal services: • Be relevant. but also to the time. the times you post or tweet can dramatically affect response rates. and opportunities to maximize responses (e. Rigorous testing against this group will produce results. discounts. . it’s smarter to offer a deal on pizza in the evening than in the morning. invitations to join a game – but you should also be carefully considering when to post.5 2 0 1 2 T R E N D S I N L O YA LT Y M A R K E T I N G The bottom line is that loyalty programs that factor in advocacy – and reward it with the same currency gained through purchases – will reward many brands.g. the only people who really matter to a brand are the ones in its target demographic. Of course you’re thinking about what to post – offers.

• A group of South Korean iPhone users sued Apple. However. status. To put it simply: loyalty = permission Loyalty programs are evolving into what amounts to a contract between a brand and its customers. loyalty data is extremely sensitive. which can boost the top and bottom line.6 2 0 1 2 T R E N D S I N L O YA LT Y M A R K E T I N G Privacy Privacy concerns are growing worldwide. a “give-to-get” relationship where customers give brands permission to access personal data that would otherwise be blocked in order to get rewards in the form of merchandise. Loyalty programs in the new climate of heightened privacy concerns offer both opportunities and risks. Some examples: • The California Supreme Court ruled that the common practice of identifying customers by matching their zip code to their name in the course of a transaction is illegal. and there’s plenty of evidence to con rm the legal establishment is going to support them. and other bene ts. . • The German State of Schleswig-Holstein determined pro le creation associated with Facebook’s “like” button violates data protection laws and banishes the button from state sites. claiming it invaded their privacy by collecting location data without their consent. This trend will surely frustrate the efforts of brands to identify and engage their customers – and it casts a new light on the value of loyalty programs. Your marketing campaigns can now be much more targeted and effective. and requires the highest level of protection available to avoid the potentially disastrous consequences of a security breach. discounts.

number of “points. growing increasingly irritated.g. We all live in a real-time environment all the time.7 2 0 1 2 T R E N D S I N L O YA LT Y M A R K E T I N G Real-Time Marketing Driven by enormous advances in microprocessors and networking. Loyalty programs are an important means for achieving that goal especially when delivered instantly through mobile devices which can counteract purchasing based on real-time price. The Southwest system informs customers of baggage problems immediately after takeoff via a text message to their cell phone. as well as inventory levels and ongoing promotions. This proactive management of the customer experience in real time through transactional data can be combined with operational data for truly spectacular results. All airlines know from the moment a plane takes off that a passenger’s bags didn’t make the ight. data is now available not in days or even hours but milliseconds. even when things go wrong. Southwest Airlines is one company that’s making full use of event-driven computing to exploit operational data. . This challenges retailers to move their customers beyond shopping based on price comparison alone. at a kiosk or ATM. and promises to deliver the delayed baggage to any address the customer texts back in reply. and creative use of operational data can make a difference to the customer experience in many different situations. But the passenger typically nds out after waiting half an hour or more at a baggage carousel. Due to this change in technology. These millions of diverse data points are made more complex considering transaction location – either online. Mobile Mobile technology allows for instant price information on most products which can unfortunately cause some customers to become less loyal in favor of a cheaper buy. in stores.).” etc. This technology can combine data from multiple diverse sources in real time to personalize the customer experience. Managing travel experiences is an extreme example of how real-time capabilities can build loyalty. also known as event-driven computing. loyalty marketers have access to an invaluable new tool called complex event processing. You can now provide shoppers with customized up-sell and cross-sell offers based on their buying history. level. current purchases and status in a loyalty program (e.

TIBCO Software. For more leading edge information on trends that are affecting loyalty marketing and how it can boost both revenue and market share.loyaltylab. CA 94304 Tel: +1 650-846-1000 +1 800-420-8450 Fax: +1 650-846-1005 www.633. and serve as a replacement for reward cards. the dominance of social networks as a communication nexus and the ability of database engines to integrate and mine vast amounts of data – have given rise to game-changing opportunities for loyalty marketers. but may well in uence their market share for decades. TIBCO Loyalty Lab helps develop pro table and long-lasting customer relationships for some of the world’s largest brands. More broadly. online and in-store.” Another idea that is sure to catch on over time is the idea of brand-speci c apps for retail chains.1400. email loyaltylab@tibco. The winners in this new. Staying Ahead of the Curve Developments in technology – the rapid penetration of mobile platforms. please stay tuned. smart phones can serve as in-store “offers engines. technology-driven environment will not only reap short-term gains.Mobile devices can deliver the bene ts of event-driven computing to consumers wherever they shop.415.com or call us on +1. These could enable both enrollment and reward delivery. All other product and company names and marks mentioned in this document are the property of their respective owners and are mentioned for identi cation purposes only. and its subsidiaries in the United States and/or other countries.com. For more information head to www. If a store is over-stocked any item can instantly be put on sale – and shoppers can be immediately informed. Our on-demand loyalty platform supports end-to-end loyalty programs that can in uence behavior across all channels – mobile.tibco. social. TIBCO Loyalty Lab’s deep loyalty knowledge base and technology solutions enable organizations to cultivate a deeper and sustained brand relationship with millions of their customers the day their programs go live. Global Headquarters 3307 Hillview Avenue Palo Alto. . and The Two-Second Advantage are trademarks or registered trademarks of TIBCO Software Inc. while in uencing behavior in a way that’s advantageous to the retailer as well.com ©2012 TIBCO.

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