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Volume 4 Number 4

Fourth Quarter 2012

Insights f rom:



Loyalty Loyalty
Not all loyalty programs are created equal. In fact, some programs arent equipped to motivate loyalty at all. Traditional loyalty programs are focussed on points collection, whereas true loyalty programs come from deepening employees and customers connections to a company or brand through a meaningful exchange of value at every interaction online, offline, everywhere! Effective Loyalty Marketing solutions include strategic consulting, program strategy and design, analytics, business intelligence and research, loyalty platform and operations, and a focus on member engagement and communications strategies, always and all ways. Thats the difference. Learn more by requesting a copy of our upcoming white paper, What every business leader needs to know about true loyalty at

Spot the difference?

Maritz Loyalty Marketing is a consumer loyalty marketing agency specializing in delivering next-generation loyalty solutions for its clients across North America. Leveraging over 115 years of history, experience and expertise from the Maritz family of companies, Maritz Loyalty Marketing provides its clients with consumer loyalty solutions that consider the holistic consumer experience at every brand touch point and through all stages of their lifecycle with a brand. For more information, visit or contact Rob Daniel, VP Research & Loyalty, or (905) 696-5326.

In this Issue...



LEGO: Building Customer Loyalty One Brick at a Time
Bernard Chung SAP

jcp cares: Customer Loyalty through Cause Marketing
Heather Reid Pointsmith

Beyond Loyalty: Why We Need to Get Smarter about Customer Engagement
Hunter Albright Beyond Analysis

Is Your Business Loyalty or is Loyalty Part of Your Business?
Rob Morgan CAC Group

Leveraging Facebook Play.coms Social Success
Interview with Adam Stewart


Letter from the Editor Loyalty 360 on the Web Your Voice Behind the Brand Kerry Hurff, Safelite AutoGlass 360 Insights: The New Marketing Paradigm Mark Johnson, Loyalty 360 Q & A: Ask the Experts Loyalty Innovation By the Numbers Loyalty Reads Behind the Brand John OHara, Pitney Bowes Software

6 7 10 13 16 18 34 48 60 62

Loyalty Management FOURTH QUARTER 2012



a Segerdahl company

Your customers arent one person. They are many. And your direct marketing should treat them that way. Find out what each demographic and psychographic group wants to see, hear and buy. And in turn, what your communications need to say, show and offer.


Find an Empirical Direct Marketing Solution for your business. Connect with: Paul White, Executive Vice President, 847.419.3311 Bob Radzis, Chief Customer Officer, 847.506.8191 1351 South Wheeling Road, Wheeling, Illinois 60090 main 847.541.1080

In this Issue...


36 Minimizing Effort to Maximize Loyalty Kana & Loyalty 360 38 Shop TalkWhat Motivates Shoppers Over 40 Years? Joe Cecere, Little & Company 40 Three Critical Decisions Marketers Must Make Bob Fetter, Affect Results 42 The Frequent Diner Club Evolves Loyalty 360 43 Taking the Leap from Plastic to Mobile Doug Dwyre, Mocapay 44 Time to Get More Personal with your Audience Tariq Charara, Covario


50 VoC: Drive Customer Satisfaction & Loyalty Andrew McInnes, Allegiance, Inc. 52 Is Your Loyalty Program Supporting Your Loyalty Strategy? Judy Melanson, Chadwick Martin Bailey 54 Listening to Create a Great Customer Experience Interview with Milista Anderson, SunGard 56 HON Rethinks Engagement to Create Loyalty For Life Mike Spellecy, Maritz 58 5 Ways to Tackle Big Data & Maintain Brand Loyalty Paul Kent, SAS

Loyalty Management Editorial & Production Team Erin Raese - Editor in Chief Mark Johnson - Contributing Editor Caitlin Schar - Editorial Director Liz Johnson - Senior Graphic Designer Crescent Printing Company - Print Production Loyalty 360 Team Mark Johnson - President & CEO Erin Raese - COO Caitlin Schar - VP Marketing Jillian Hensley - Manager, Marketing & Web Development Liz Johnson - Senior Graphic Designer Contacts Article Submissions & Advertising: Erin Raese or 513.800.0360, ext. 210 To subscribe to Loyalty Management, visit

Recap...Pg 66


2012 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing authors and not necessarily 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 interpretations thereof. The opinions expressed herein are subject to change without notice.

Loyalty Management FOURTH QUARTER 2012


Reflect Before Leaping Forward

Loyalty 360 has just marked the 4th anniversary of our first Loyalty Expo November 2008. At the time we didnt know it, but organizations would be hit, in the months (and years) since, with a great deal of uncertainty. 4 years ago choices needed to be made. We were amidst a recession with a bleak outlook. It forced our organizations to change focus. Where wed been hunting for new, we quickly became all too aware that we could lose what we already had. It was a tough time between record job loss and the real estate crash, consumers were forced to become frugal; forced to chase a deal. Four years ago, brand loyalty dropped to an all-time low. Traditional advertising, always churning new customers was no longer the answer to revenue gains. Sure some organizations found a niche and became household namesGroupon, Living Social. But the rest saw attrition percentages increase in double digits. Noticing this trend, surprised organizations realized that to sustain their foothold in the marketplace, the first thing they had to do was keep their existing customers. Sure many have loyalty programs. However, possibly for the first time, organizations began to understand the real potential of keeping their existing customers spending and spending more. Four= years ago, we scrambled to sustain what we had. Now, having found our greatest asset, were committed to being loyal to our


Aimia Europe Direct Energy FIS Global Heartland Payment Systems ITA Group KANA Software Ketchup Agency LOC Enterprises Microsoft ORC International The Relational Capital Group RewardsPay Ontario Lottery and Gaming

customers! Organizations are scrambling to collect, digest, assimilate and effectively use information. In 2013 and the years that follow, successful companies will be those who perfect customer expectation matchingproviding your customer, your right customer, with their perfect experience. This issue of Loyalty Management shares with you those trends. In this issue, learn how successfully leveraged Facebook to drive online sales from 84% of its FB users. Learn how jcpenney drives customer engagement through corporate social responsibility opportunities. Learn how to minimize customer effortit will increase customer loyalty and profitabilityin a new paper from Loyalty 360 and Kana. Also within this issue, each author has shared trends theyre seeing and predictions of how theyll affect our future. For further trending insights visit Loyalty Management online, Executive Insights: Top Trends for 2013. While youre there, share your predictions for 2013 in our comments feed! Last, a quick reminder: register for the 2013 Loyalty Expo by December 31, 2012 to receive early bird rates. The 6th annual Loyalty Expo is March 20 22, at the Renaissance Sea World in Orlando, Florida. Enjoy the issue!

Erin Raese
Editor-in-Chief Loyalty Management

Loyalty Management LOYALTY360.ORG



As we continue to fill our Resources library with the latest research, news and thought leadership insights in the marketplace today, has become the daily destination for your information needs. We have redesigned the homepage to make it easier for you to find the content you want. :: Easily access and review the days TOP NEWS STORIES :: Stay on top of the articles and topics that are TRENDING NOW :: Dive into current RESEARCH, white papers and case studies :: Discover new insights in the EDITORS PICKS :: See the latest user COMMENTS and join the discussion :: View new VIDEO content and interviews :: Follow the latest TWITTER updates


Executives guiding the latest innovations and advancements in the industry today will be sharing their insights through regular features in this new space! From Experience, Engagement and Loyalty to Mobile, Social, VoC and more, we invite you to follow your favorite thought leaders and topics as each contributor will have a unique perspective & area of expertise to share.

:: Loyalty Management Online Now featuring MONTHLY issues :: Loyalty Today Blog Aggregator :: Weekly Pulse! Polls :: Webinars & Conferences Calendar :: Find a Partner :: Job Board & Resume Bank ...And more!





Loyalty Management FOURTH QUARTER 2012




In addition to two-way real-time communication, social networks and mobile applications are generating tremendous data on customer behavior, interests and dialogue. Innovative marketing leaders are using these tools and data to deepen their relationships with customers, rather than just target, measure and manage marketing campaigns. Building Brand Loyalty in the Digital Age, by The Relational Capital Group


Organizations with fiercely loyal customers, employees and business partners take the time to listen to feedback and integrate it into decision making at every level of the business. They have a process for continually listening, analyzing, and acting on feedback in order to increase customer satisfaction and loyalty, improve employee productivity, and increase bottom-line profitability. 15-Minute Guide to Increasing Customer Loyalty, by CustomerSat

When asked if companies could identify their top customers, 86% of respondents with loyalty programs and 80% without loyalty programs both said they could. What was surprising was that out of the companies that answered yes, 10% and 16% respectively said they did not have access to the internal data to identify their top customer. Two conclusions can be drawn from this: 1. While top customers are identified, some companies know they could do better with more data 2. Most think they can identify their top customers without enough data to substantiate the claim Data Management: The DNA to Loyalty Program Success by Altair Customer Intelligence & Loyalty 360


of people today

Companies need to leverage that opportunity. One of the pitfalls that companies fall into is not understanding the mobile channel. Its a powerful device. It lets [the consumer] live in a world without barriers. October: Three Pitfalls to Avoid When Building Customer LoyaltyMike Romano, senior vice president of mobile sales and client services at SoundBite Communications

It is widely proven that employee engagement is directly linked to the profitability and sustainability of a business. Why is it, then, thataccording to the Gallup Organization (which has done extensive research on the subject)only 11 percent of all employees worldwide are engaged in their work? Shouldnt engagement be a higher priority for business leaders? December: 8 Critical Elements To Take Your Organization From Engaged To Entangled by Dr. Ray Benedetto and Molly Meyer

have a cell phone.

have a smartphone.


Loyalty Management LOYALTY360.ORG



Loyalty 360 & Acxiom

Better Connections, Better Results

new report based on a joint survey of 110 respondents, plus qualitative interviews conducted by Loyalty 360 and Acxiom, reveals that marketers struggle to connect the customer data that would help them understand their most valuable audiences and create the relevant, consistent, personalized experiences that would engender loyalty between customers and brands.

Real loyalty is something that consumers provide a brand based on trust and is not merely a program created by the brand. Successful loyalty marketing occurs when the brand provides consistent, authentic engagement that is an extension of the brand itself. Brands that connect consumer data to create personal and integrated experiences nurture loyalty and consumer preference to the brand which in turn creates more value than merely capturing customer data.

uccessful loyalty marketing occurs when the brand provides consistent, authentic engagement that is an extension of the brand itself.


1:: Poor use of connections in CRM systems 2:: Improper use of Net Promoter Scores (NPS) 3:: Insufficient application of social signals that should serve to build a deeper understanding of valuable audiences. Marketers miss the big picture of accessing and utilizing all customer-touch points to build brand intimacy across the enterprise. Poor input yields poor customer insight output. For example, 26% of marketers emphasize the costs of customer service when calculating Customer Lifetime Value, (CLV). Only 21% highly consider NPS, a loyalty metric that can predict advocates that if combined with other measures, can hone a brands precision about CLV and which customers are likely to recommend them.


Marketers underestimate the impact of the indiscriminate use of discounts as a promotional tool to achieve short term results. While discounting is a popular, highly commoditized tactic that may keep consumers on the program, it doesnt generate loyalty or long term value. Offering loyalty through the use of discounts trains consumers to promiscuously shop based on price, easily dumping one brand for a cheaper alternative, eroding margins and destroying brand value. Contrast this to when brands create deep understanding of their most valuable audiences through the judicious collection and use of customer data, they prepare to reap rewards of better long term profit, improved margins, and can better defend their pricing.


Interviews with brands including HON Office Furniture, The Container Store and others revealed the success of their loyalty programs stems from an enterprise-wide focus and commitment toward connecting customer data to drive engagement and retention, not just customer acquisition. By investing in understanding customer needs and delivering engaging experiences to different audience segments, these brands reap the benefits of delighted audiences, loyal advocates and increased profit. There are many data points that are not generally part of loyalty programs. Marketers who judge a programs success solely based on RFM miss a very powerful signal about customers the ability of a buyer to influence others. If understanding valuable customers matters, then blending RFM with NPS is a great way to measure them. For example, is a customer is assessed a medium value RFM score but has a high NPS, then the combination halo effect may elevate them as a high value customer who deserves special attention.

Download a full copy of the white paper, T H E L OY A LT Y D I V I D E : B E T T E R the-loyalty-divide Share the white paper with your colleagues and peers! S C A N T H E

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Loyalty Management FOURTH QUARTER 2012



t the beginning of 2012, we landed on three words that would demand our attention and guide our work in loyalty marketing during the year. The words were Data, Social, Mobile. Each has significance, though for reasons you might not expect. As we enter Q4 of 2012, we realize that another word could be added to the list: Human. Sometimes we forget that our customers are human beings. They are complex, yet able to be moved to action by tapping into unique sets of characteristics defined through the study of behavioral psychology. Imagine the changes to your loyalty program if you are able to effect desired changes in customer behavior through intrinsic motivation rather than the standard extrinsic rewards that we have used for two decades. The impact on customer experience, not to mention bottom line, would be significant.

Mobility will continue to transform the way companies communicate with their customers, as well as transform customer expectations on how (and when) they want to be communicated with. Channel transparency will be key. Technology will allow the integration of geolocation based services, which will create tremendous new opportunities to delight customers with real-time, relevant offers if done correctly.
Brandon Sailors, Director of Business Solutions, CSG International


Managing Director, Hanifin Loyalty / Consulting Practice Leader, Aimia


Loyalty 360 Pulse: What will be the top trend

Mobile P in customer experience, engagementayments & loyalty for 2013? 18% 3% 2% 18% 34% 5% 6% 14%

MobilePayments(34%) SMSMobileMarketing(14%) Discoun3ng / Coupons Discounting/Coupons(6%) Card-LinkedOffers(5%) Card-Linked Oers BigDataAnalytics(18%) Gamification(2%) Big Data Analy3cs Check-In/StatusRewards (ie.FourSquare&Shopkick)(3%) Gamica3on SocialMediaRewardPlatforms(18%)
Check-In / Status Rewards (such as FourSquare & Shopkick)

SMS Mobile Marke3ng


Loyalty Management LOYALTY360.ORG

Social Media Reward PlaMorms


will be the year of the gift for retail marketers. Coupons and deals have historically dominated the way marketers attempted to attract customers. But with a 0.1% to 1% redemption rate, the coupon and deal model is clearly broken and the impact and ROI that marketers hope to secure is not there. With a redemption rate of more than 60%, gift incentives are proven to drive customers into stores, resulting in profitable, incremental spend. More marketers are making the shift to gift marketing and we predict that 2013 will be the year when gifts explode onto the scene.

GADI MAIER, CEO, FreeMonee Network

oyalty marketers must have a razor sharp focus on program differentiation, delivering a comprehensive and engaging customer experience, and operational excellence. The convergence of CRM, Loyalty, CEMand the utility of the resulting datais foundational for programs to be relevant. From this data, we have the opportunity to create our greatest brand advocates, but only when programs permeate every channel in the customer lifecycle. Mobile technology and the ways in which mobile, digital and social media outlets work together in a seamless, fully integrated and omnichannel way is still nascent, but growing, opportunity for marketers. Think of this approach as a natural outgrowth of existing technology and the always-on demands of tech-savvy mobile users. Mobile commerce is forecast to reach $18 billion in revenue in the US by 2014 and $119 billion worldwide. Smartphones and tablets have crossed critical adoption rates in many Western countries and will continue mobile dominance across the globe. With smartphone adoption rates now hovering around 50 percent in the US and other developed nations, and with tablets not far behind, smart brands are beginning to tailor their loyalty campaigns accordingly, so much so that the term SoLoMosocial, local, mobilehas become part of our marketing lexicon. According to Forrester Research, the perceived value of many loyalty programs gets weaker by the year. In 2011, 21% of survey respondents agreed with the statement that Most loyalty programs dont offer any real value, up from 15% in 2008. This underscores the increasing importance for loyalty marketers to leverage the wealth of data from every channel their customers engage to create meaningful and relevant customer experiences.

from BEYOND ANALYSIS @Loyalty360

2013 trends: data driven engagement; data collection & organization; commercial focus
#innovation @HunterAlbright

hile mobile has been a driving force in loyalty for a few years now, I believe that 2013 is going to be *the* year of mobile loyalty. Apple, via the Passport app introduced in the iPhone 5/iOS 6, has forced the hand of the loyalty marketers who were on the fence in regards to mobile. Consumers are going to expect the ability to access not only their affinity program cards, but also program information and benefits, in the palm of their hand. Brands that arent in the forefront of their industry in regards to mobile presence will likely start losing market share to more mobile-savvy competitors.

MICHAEL HEMSEY, President, Kobie Marketing

Director of Marketing Communications, VIPdesk


Loyalty Management FOURTH QUARTER 2012


Uncover the pro t potential in every customer.

SAS Customer Intelligence solutions help you nd the most pro table growth opportunities and drive the best marketing actions to achieve optimal cross-business impact. Decide with con dence.

Scan the QR code* with your mobile device to see a video or visit to learn more.

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Safelite AutoGlass


s marketing director for Safelite AutoGlass, Kerry Hurff is responsible for consumer insights, business-to-business marketing and leading the creative team. Prior to joining Safelite AutoGlass, Hurff served as director of marketing scientific products for Cardinal Health. In his nearly 30-year career, he has managed consumer packaged goods marketing and brand development for companies such as Novartis, Abbott Labs, Borden, Inc., H.J. Heinz Company and Quaker Oats. In the interview below Hurff shares personal perspectives on marketing, and provides an inside look at the leadership Behind the Brand at Safelite AutoGlass today.

WHAT ARE THE KEY AREAS OF FOCUS FOR SAFELITE AUTOGLASS AS YOU PLAN FOR 2013? A key area of focus in 2013 is breaking out from being a good company to a great company. This involves improving everything that we do from optimizing our advertising message, providing extraordinary customer service, and delivering a customer experience so compelling that our customers tell their friends and family. We have a number of really exciting initiatives in 2013 that will help us realize our vision of being the natural choice in vehicle glass repair and replacement. We also consistently try to go from belief to knowledge. As an old mentor once told me, the facts are your friends. We are always learning what would truly delight the customer throughout the service process, and our research includes how to best market those differentiators to consumers. These insights will shape our marketing in 2013. IS YOUR EXISTING CUSTOMER STRATEGY FOCUSED MORE HEAVILY ON ACQUISITION OR RETENTION? Both. Because auto glass repair and replacements is a low-frequency need for most consumers (once every seven years on average), our strategy focuses heavily on generating top-of-mind awareness, that generates choice for Safelite, and then a great service experience that leads to referrals. We are also using customer relationship management tools and deploying new initiatives so that the next time a consumer has glass damage, they call us again. WHY IS THIS THE MOST VALUABLE APPROACH AT THIS TIME? The dual approach is valuable because we are in a low awareness, low involvement category, akin to dentists and exterminators you really do not want to buy a new windshield. We find that people very much appreciate our service, but quickly forget about it. We need to remind them via acquisition strategies, and maintain top of mind

awareness through relationship strategies. Shoppers also visit sites like Yelp and Angies List to see what others have to say about service providers before making purchase decisions. Therefore, we focus very hard on making sure there are plenty of testimonials online. DO YOU SEE THIS FOCUS CHANGING WITHIN THE NEXT COUPLE YEARS? Noin fact, as the population ages and buyers are more prone to voice opinions online, this strategy will only be more important. WHAT IS ON YOUR WISH LIST FOR TACTICS, TOOLS OR TECHNOLOGIES YOU WOULD LIKE TO SEE INCORPORATED INTO YOUR CUSTOMER RELATIONSHIP STRATEGY? When a consumer comes to an auto glass shop, lets face it, theyve had a bad day they have damage to their car. They expect it to be fixed right and they expect the service to be quick. Those are the givens. Weve made large investments to make sure were able to deliver on those two things. Now, were focused on making it more of a wow experience that can create brand advocates in a product category thats what we consider low engagement. YOUVE WORKED WITH MANY TOP BRANDS IN THE INDUSTRY TODAY, WHAT WOULD YOU SAY IS THE BIGGEST CHALLENGE THAT MARKETERS FACE IN CREATING ENGAGEMENT AND ESTABLISHING LOYALTY WITH THEIR CUSTOMERS? HOW DO YOU ADDRESS THIS CHALLENGE WITH SAFELITE AUTOGLASS? A big challenge is customers do not have a lot of time to engage. Customers are so busy and distracted with the increasing pressures in their lives. We address this challenge by trying to make it easy to do business with us. We offer multiple ways to contact us, try very hard to arrange a convenient time to conduct the service (we can come to your location most of the time), and try to create an experience that is extraordinary.

continued on next page Loyalty Management FOURTH QUARTER 2012


Behind the BrandKerry Hurff, Safelite AutoGlass (continued)

WHAT DO YOU BELIEVE IS KEY IN CREATING THE ULTIMATE CUSTOMER EXPERIENCE? The key to creating the ultimate customer experience comes down to the employees who deliver the servicefrom the CSR that takes the phone call to the technician that completes the repair or replacement. Thats why Safelite introduced a talent development program several years ago. We have an obsessive focus on having great people and providing them the resources to excel. We believe this is what will give us the competitive advantage and win over customers. was the guest speaker at Safelites national meeting. He talked to us about leadership, and it was very inspiring to all of us at the company. While he had a great impact on our people, we were also pleased to learn that we had an impact on him and included us in his latest book, It Worked for Me: In Life and Leadership. of mouth and drive sales; and track results from advocacy programs. ARE YOU A RULE BREAKER OR A RULE KEEPER? WHY? Id say Im somewhere in the middle I take calculated risks. As a marketer, Im always asking, what if and trying to think outside of the box. However, we always test these new ideas before putting them into play. IF YOU COULD INVITE 4 PEOPLE TO DINNER (PAST OR PRESENT) WHO WOULD THEY BE AND WHY? Abraham Lincolnfor the reasons I cited above. Winston Churchillanother leader, with a lot of flaws that he overcame, who led England successfully through World War 2. Mao Zedongeven though vulgar, Mao also overcame great odds, and also pushed continuous revolution, constantly changing his country to achieve his vision. The Apostle Paula man who was going places. He gave up everything for what he believed in, and suffered immensely for it. WHO OR WHAT INSPIRES YOU? A leader with vision WHO (OR WHAT) HAS HAD THE GREATEST INFLUENCE ON YOUR CAREER? Rob Crim, Global General Manager at Danone. He was the author of the facts are your friends. DEFINING LIFE MOMENT? When I met my future wife, and the first time I kissed her. DO YOU (OR WOULD YOU) LIKE TO VOLUNTEER? WHAT ORGANIZATIONS OR CAUSES ARE YOU MOST PASSIONATE ABOUT? Yes. I am active in my congregation and I have served on the board of trustees for the Godman Guild, a settlement house in Columbus, Ohio. KERRY, WHAT ARE YOUR INDUSTRY PREDICTIONS FOR TOP TRENDS IN 2013? Social media becomes Social business A really good big data solution is finally found Companies continue to leverage mobile, and find new solutions to vexing problems Tweeters become rock stars Service becomes the new differentiator The Cubs win the World Series! L

WHAT WAS YOUR LAST AH-HA CUSTOMER EXPERIENCE? The newspaperit was a real negative ahha. Ive ordered the same paper for more than 20 years, and in a one week period, they did not deliver twice. I called their customer service line, and after being on hold for 15 minutes, was told I called too late to deliver the paper.seriously? At Safelite, we would have personally delivered the paper that same day, and had our executive services team call and try and make good on the error. WHAT IS YOUR PERSONAL MOTTO? Nothing worthwhile is ever easy. WHO WOULD PLAY YOU IN THE FILM OF YOUR LIFE? Steve Carrellhe strikes me on the surface as an average kind of guy, but with an underlying purpose and energy to get things done. WHO IS THE MOST FAMOUS PERSON YOU HAVE EVER MET? Several years ago, Former Secretary of State and National Security Adviser Colin Powell

take calculated risks. As a marketer, Im always asking, what if and trying to think outside of the box.

WHAT FAMOUS PERSON WOULD YOU MOST LIKE TO MEET? WHY? Abraham Lincolna self-made man. He was a wise and true leader, with no ego, who was truly successful in what he set out to do. WHAT BOOK(S) ARE YOU CURRENTLY RECOMMENDING? Brand Advocates: Turning Enthusiastic Customers into a Powerful Marketing Force, by Rob Fuggetta, founder and CEO of Zuberance, a leading brand advocacy company that works with Safelite. The book shows marketers and business leaders how to identify brand advocates; energize them to spread positive word

he key to creating the ultimate customer experience comes down to the employees who deliver the service


Loyalty Management LOYALTY360.ORG


What is your favorite word? What is your least favorite word? What turns you on creatively, spiritually, or emotionally? What turns you off? What is your favorite (PG-13) curse word? What sound or noise do you love? What sound or noise do you hate? What profession other than your own would you like to attempt? What profession would you not like to do? If Heaven exists, what would you like to hear God say when you arrive at the Pearly Gates?

Opportunity No See The Opportunity In Everything Think Why You Can, Instead Of Why Not NegativityI Hate To Hear Why Not. SHOOT! The Soothing Sound Of Flowing Water The Siren Of The Police Car Id Love To Teach American History, & Coach The Womens Jv Softball Team Nuclear Engineer Well Done, Good & Faithful Servant

*Inspired by James Lipton on Inside the Actors Studio we asked Kerry to share his quick-fire response to the questions originating from the French series, Bouillon de Culture hosted by Bernard Pivot.

Never say goodbye.

Pharmaca increased cross-shopping by 50% Virgin America's frequent yers spend 25% more than non-members U.S. Cellular enrolled over 1/3 of its members in under a year Find out how at

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Loyalty 360
In 2012 we saw a renewed focus on customer retention. The idea of loyalty continues to expand from a banal, archaic point-based approach to a realization that engaged and loyal advocates (not mass-acquired customers that you hope will move through your funnel) are becoming increasingly top of mind for todays marketers. In order to be successful, loyalty programs, and more importantly loyalty processes, are heavily dependent on data. In the developing omni-channel environment, the ability to have insights into the manners in which a consumer touches your brand across the varied and growing channels, media and storefronts is still quite arcane to most marketers, and access to this data (usually in disparate siloed databases) is precipitously problematic. The ability to get the consumer to raise their hand across these disparate touch points each time they engage, as well as to grant permission to track them, continues to be a challenge. Consumers frequently opt out of these messages and have come to be leery of how personal information is being used. Consumers need to be made aware of the transformational value that can be achieved for both them and the brand in this mutually beneficial information exchange. In 2013, brands that offer greater transparency, provide an easily understood data exchange process, and are able to clearly demonstrate brand value, will achieve the new marketing paradigm. INVESTMENT IN NEW TECHNOLOGIES Mentioned on numerous occasions, it is the most opportune time to be marketer, as well as the most challenging. There is more transformational technology and access to data than ever before, yet budgets remain tight, and scrutinized more ardently than ever. As much as incremental investment in new technologies is paramount to success, the ability to use data and emerging technologies in a coordinated manner is going to be increasingly important. This is problematic for some of these new media technologies that require significantly greater resources (time, technology and human capital), a leap of faith in process (we are going to listen to our customers?), and a reexamination of traditional mass marketing processes. Forward-thinking CMOs have come to realize that the incremental mass-communicated messages of the past can have deleterious effects. Consumers who are not engaged properly are tuning out and opting out. The clarion call in the new marketing paradigm is for direct and reciprocal communication between brand and advocate. A focus on the ability to impact behaviors of both the brand and the consumer, in a proactive manner, is the true vision of loyalty. In concept it is quite simple and in practice it is quite difficult.

lanning for 2013, we reflect on the gains, opportunities and challenges overcome during the course of this year. Looking back on the anticipated trends for 2012, I noticed that a number of them came into fruition while some of them are still looking for the internal corporate advocacy, technology adoption and process understanding needed to put them front and center in the hearts and minds of brands (CMOs and more importantly CFOs) and consumers alike. As with most projections and prognostications, it requires a creative and open mind, as it is usually more of a wish-list of what you want to see for the respective industry with little reverence for plausibility or feasibility. When you start to put forth myriad options it is difficult for all of them to come into fruition with any certainty. That said, I lay out my predictions for the top trends of 2013.

We all are cognizant of the data rush that exists today. This crush of data will continue unabated in 2013. The challenge to create actionable insight will be brought to the forefront even more than in the past. Marketers may find that increasingly disparate internal data (structured and unstructured), in addition to a growing number of progressively more obtuse external data sets, will be more challenging to identify properly, cleanse, warehouse and model. Brands need not be myopic (GIGO garbage in / garbage out) in regard to the assortment of models (custom and canned) that will be needed. There will also be an increased need to have data processed in a more than real time manner. This places a great strain on already taxed marketing departments, IT staffs, technology infrastructures and communication protocols, as well as the numerous consultants that represent all of these revolutionary technologies.


Loyalty Management LOYALTY360.ORG

Loyalty 360 finds itself in a unique position. We see amazing emerging technology enhancements on a daily basis. We also get to hear, understand and attempt to assuage the concerns that brands have in the market; helping them transform challenges into opportunities. All brands are looking for a unique elixir of marketing savvy, technological prowess and operational efficiency that enable them to communicate more directly with their customer and influence consumer behavior, affinity and loyalty for their product, service or offering. And, in todays economic environment, this should also come with a return on investment that not only will be better than other options, but one that will placate the CFOs in us all. SIMPLICITY & EXECUTION I would argue the biggest opportunities for 2013 are in simplicity and execution, a getting back to basics (blocking and tackling) on the operational and executional side of the house. It is unreasonable to expect brands to execute on ten new technology platforms in one year. The customer experiences that brands put forth need to be understood, controlled, and executed upon in intricate detail. The ability to understand the experience, interactions and supporting technologies in place to increase the view of the customer is going to be a strategic imperative. The need to get the operational data stores and other areas that have customer touch points under the control of one domain is needed. So, the opportunity to return to an executional simplicity should be prioritized. Brands need to have measurable benchmarks in place that give them a defined marker as to which to build upon. Brands that continue to focus on the incremental gains that can be made with engaging technologies, implemented precisely to improve the customer experiences through numerous touch points, will maximize both the short and long-term value of their customer relationships and most importantly create LOYAL brand advocates. L

he ability to impact behaviors of both the brand and the consumer, in a proactive manner, is the true vision of loyalty

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

Loyalty Management FOURTH QUARTER 2012




Ask the Experts:


For the last few years, our focus has been on discounting and coupons. Were concerned about what this approach does to our brand message as well as our bottom line so wed like to explore alternatives as we plan for 2013. Where do we start? What are our best options for the near term?


Frequent discounting can have adverse effects on your brand equity, unless your brand is to be a discounter. A strong brand should minimize the need for discounting, and actually allow you to command a higher price than your competitors. Offering a discount can be an effective strategy to induce first time buyers, but applying the same pricing to existing loyal customers may cheapen the brand at the expense of unnecessary lower margins. Additionally, using discounts and coupons to acquire new customers, tends to attract those with less brand affinity and greater price sensitivity theyre always looking for the next deal. Ask companies who have used Groupon if they are happy with the long-term results. Most will say no.


Twenty years ago, Procter & Gamble, the inventors of brand management and one of the top coupon users, published the results of a multi-year study on the effects of discounting on brand equity and loyalty. Their key takeaway: coupons erode brand equity and hurt the bottom line. P&G concluded that couponing trained consumers to be disloyal and to follow the discount, often straight to the competitor. So the mandate was to stop couponing.

Some retail categories such as mattresses and certain types of electronics have over-used price discounting to such an extent that consumers never expect to pay full price.

Gift cards are proven to be 10 times more effective at driving incremental customer visits and do not feel like a discount in the consumers mind.

Offering a discount can be an effective strategy to induce first time buyers, but applying the same pricing to existing loyal customers may cheapen the brand at the expense of unnecessary lower margins.
All that being said, utilizing discounts and coupons to stimulate behavior has its place, but the key is effectively controlling which customers receive them. This requires segmenting your customer base and understanding current value, potential value, purchase behavior and how they interact with you. Once you have classified customers into specific groups, a variety of tests should be conducted within each group to determine price sensitivity and the effect of the offer to stimulate the desired behavior. Conducting a survey within each customer segment can provide you with insight into brand perception and the potential impact your pricing strategy has within each group.

Fast-forward to today and you will still find P&G coupons in almost every Sunday newspaper. Why? Because when it comes to promoting short-term consumer behavior, there are very few effective alternatives. However, the use of gift cards as incentives has been growing. Gift cards are proven to be 10 times more effective at driving incremental customer visits and do not feel like a discount in the consumers mind. To a consumer, it is like extra cash to spend on full-priced items, and doesnt erode brand equity. The challenge has been how to get these gifts in the hands of consumers at scale, in a way that makes economic sense for the marketer. If you give a gift of cash, you need to know that the consumer is going to spend enough to create a positive ROI. Brands today have access to service providers who can offer underwriting technology to predict spend enabling them to deliver the right customers, irresistible gift incentives at scale. Now, marketers have an effective alternative to the coupon.

STEVE COLLINS President of Analytical Solutions, Altair Customer Intelligence

J I M TA S C H E T TA CMO, FreeMonee


Loyalty Management LOYALTY360.ORG


Youre right to be concerned. Consumers are savvy, and many retailers have forgotten that. I once had a boss who liked to say that the words coupon and crack meant the same thing. But in trying economic times, its hard to resist the allure of doing whatever you can to get footsteps through your door, and discounts and coupons usually have a great

from you? Clearly shes a brand fan, so how about suggesting the matching wallet and keyfob? And, wow, we just happen to have shoes that match your new purse! Let me show you... Did you just sell him a leather couch? Suggest coordinating throw pillows, a cozy cashmere blanket, some nice black walnut end tables, groovy lamps, and how about a

You dont have any data? Get some. You dont need a full-blown loyalty program. Look at what My Lowes does. Its genius. You register pertinent things about your home--paint colors you used, product purchase warranties and manuals, potential remodel projects--and Lowes now has a ton of data about what matters to you. Self-reported data. It doesnt get better than that. Plus, the consumer benefit is that she now has one repository for all that random home info. And I bet that Lowes will even send you reminders on how to winterize your yard because they know what part of the country you live in or when to change your air filters, which they happen to sell. Ahem. (Go ahead, Lowes marketing team, make it happen!) Plus, once you register your home info, Lowes will be able to tell when customers are buying things at competitors. Something shows up in the My Lowes account, but didnt come through Lowes channels? Voila. Coming off the discount is hard. There will be whining, and sometimes not just from external customers. You can start stepping people down gradually, though. Ulta, the beauty products retailer, over the past year has taken their weekly $5 off $10 to $3.50, and they are still in business and seem to be thriving.

short-term impact--people show up, the cash register rings, comps look good. But what are you doing to your long-term fiscal health? Eroding margins? Training your customers--all of them...the good ones and the bad ones--to wait for the deal? I used to be a regular patron of Borders (RIP), but I had learned their coupon/discount cadence. They typically rotated the same coupons in a 3-week cycle. Did I wait for the coupon email every week before heading over? You bet I did. So, what to do? My suggestion is to start trading in data, not discounts. You want to continue to attract the types of customers who want to shop you because they like what you sell, regardless of whether or not theres a deal to be had. Use the power of the data that you have to start making personal recommendations based on what you already know about your customer. Did she just buy a high-end, logo-encrusted purse

Start trading in data, not discounts. You want to continue to attract the types of customers who want to shop you because they like what you sell, regardless of whether or not theres a deal to be had.
Look at what you already have to pull customers to you. If a data collection program is too hard or too expensive right now, then take a hard look at your own website. Hows your website content? If you still have the same image above the fold that you had a month ago, then maybe this is where you start? Drive people there to covet what you sell and, above all, provide useful or fun information--customer ratings, product specs, natural go-togethers, gamification. Become a trusted advisor and see where that takes you.

nice piece of artwork to hang above it? Sell the dream! Be the partner who makes custom recommendations based on shopperindicated preferences, not the bad retailer that flings random stuff out to consumers because (a) you need to get it off your shelves so its on special, or (b) because you have no idea what consumers want, so you just keep sending emails with random coupons and discounts until something resonates. Thats bad retail karma, I say.


VP of Loyalty & CRM, GameStop

Loyalty Management FOURTH QUARTER 2012



LEGO: Building Customer Loyalty




he LEGO Group, the parent organization of the company that makes the ubiquitous plastic building blocks loved by children and their parents around the world, is famous as the largest toy manufacturer in the world. It is less well known that the privately held company also is extremely successful financially, reporting substantial revenue and net income growth each year regardless of recessions. In 2011 it recorded more than $3.3 billion in revenue (converting Danish kroner to U.S. dollars) and net income of $733 million. From 2007 to 2011 the LEGO Group more than doubled revenues and quadrupled net income.

The companys financial success is in no small way due to its sophisticated approach to building and maintaining customer loyalty. This is not as easy as it would appear. We have a unique situation, observes Conny Kalcher, vice president of Consumer Experiences at The LEGO Group in Slough, UK. The people who buy the products are most often parents or grandparents, but the people who consume the products are kids. We work on consumer experience with both of these groups, Kalcher says. In fact, The LEGO Group segments consumers into several categories, based on their affinity for the LEGO brand, Kalcher says. At the top of the pyramid are the lead users the adults and children who engage most heavily with the company, to the extent of helping to co-create LEGO products. The next segment down is the one-to-one layer, consisting of people with whom the company maintains an ongoing dialog. The third layer is the connective community layer, or people who spend time on The LEGO Group online collaboration platform, where they can share files and work with staff in a secure environment, Kalcher says. And finally, the base of the pyramid is the active household layer people who have bought LEGO products at some point in time. All consumer types want something different from the LEGO brand, Kalcher says, so their relationships with the company are varied.

The people who buy the products are most often parents or grandparents, but the people who consume the products are kids. We work on consumer experience with both of these groups
Conny Kalcher, vice president of Consumer Experiences at The LEGO Group in Slough, UK


Loyalty Management LOYALTY360.ORG

And it is The LEGO Groups self-proclaimed job to move as many people up the pyramid as it can, changing the consumer relationship from a monologue to a dialogue. For example, not long after The LEGO Group first developed its MindStorms NXT robots, in conjunction with the Massachusetts Institute of Technology, the software that enables the toys to perform different operations was hacked. Rather than condemn the people behind the system infiltration, the company decided to befriend them. We had to make a decision about whether we would work with these people or sue them, recalls Kalcher. We decided to work with them. The result: These consumers co-created the second generation of MindStorms with The LEGO Group, she says, since they knew even better than The LEGO Groups engineers what they wanted the robot to do. By working with them, we get to know the lead users on a personal level, Kalcher says. Lead users are introduced to the company, and The LEGO Group involves them in special projects for which they have a passion, such as Web, game and community development. They can become part of the company and still be doing their day job, Kalcher says. Thanks to their input the companys new offerings match real-world demand. Lead users can demonstrate the brands potential in a much stronger way than the company can, itself, Kalcher says. In fact, another sub-segment, known as LEGO Ambassadors, arranges LEGO events all over the world. They are displaying their passion for LEGO products at these big shows, Kalcher says, as well as demonstrating to families what can be done with the products. Such shows draw 2.5 million visitors a year, according to Kalcher. In total, there are 70 LEGO Ambassadors from 24 different countries. Other LEGO communities have also sprung up, such as the Kids Inner Circle and adult LEGO User Groups (LUGs). They refer to themselves as AFOLs (Adult Fans of LEGO), and the company has developed relationships with more than 50 such groups, which have 55,000 registered members with their own Web sites, blogs and discussion forums. These loyal customer communities provide real, tangible benefits to the LEGO group

in many ways, most importantly new product ideas. Consider its Cuusoo program, launched in Japan in 2008, but only opened to global beta in the fall of 2010. Cuusoo invites users to submit--and vote for--ideas for new Lego sets, according to a recent article in Fast Company magazine. When an idea crosses the 10,000-vote threshold, it gets a formal internal review and a shot at production. The first Cuusoo project hit Japanese shelves almost a year ago--a limited-edition version of the Japanese deep sea submersible, the Shinkai 6500. The second, a Japanese asteroid reconnaissance space-

BERNARD CHUNGS INDUSTRY PREDICTIONS The past few years have been all about developing the customer experience management vision. Many people and organizations have been speaking about it and getting behind the CEM banner. :: 2013 will be all about how to execute that vision within your organization. Organizations need to DEFINE THE

they want to focus on and start to identify the key components needed to


centralized: consumer service, community, clubs, loyalty and consumer insights. It was a bold step, but it has given us space to develop that area much faster, Kalcher says. To understand consumers even better and even interact with them directly The LEGO Group is looking into using sentiment analysis tools, which enable an automated way to listen to what people are saying about your company on the Web and alert you to whether things are going in a positive or negative direction. The LEGO Group also introduced a consumer loyalty program to manage loyalty rewards and points redemption, using SAPs CRM software to store the information. The global program is available in all of The LEGO Groups retail stores in 24 countries and online. Our aim is to develop it going forward so it becomes an engagement program as well as a loyalty program, explains Kalcher. The more consumers engage with us, the more we offer them things that are meaningful to them. L

craft called the Hayabusa, was released in March 2012. And while Lego actually has a long tradition of listening to, and even collaborating with, its fan base on toy concepts, doing so at the ever-accelerating rate of the web demands tremendous agility from the worlds third largest toy maker. The first Cuusoo project--the Shinkai--took 420 days to accumulate enough votes to trigger a review (only 1,000 were needed for the Japan-only project), while Minecraft, with its 20 million registered users, racked up 10,000 votes in just 48 hours. ENABLING CONSUMER CENTRICITY Getting to this high level of consumer interaction and engagement required organizational change. The LEGO Group started by combining all the departments that interact with consumer, Kalcher says. About four years ago, all of the departments that had direct contact with consumers were

Bernard Chung is a senior director of global solution marketing at SAP. He is focused on customer loyalty and marketing solutions and is passionate about helping organizations to successfully engage with their audiences to build customer intimacy.
Loyalty Management FOURTH QUARTER 2012








jcp cares :
Customer Loyalty through


Po i n t s m i t h

he concept of cause marketing originated in 1976 by Bruce Burtch. Burtch orchestrated the first cause marketing campaign by creating a symbiotic relationship between the Marriott Corporation and the March of Dimes.

The results from the campaign were an overwhelming success and exceeded all goals, generating hundreds of thousands of dollars in free publicity. It is nearly four decades later and the phrase Bruce Burtch coined about cause marketingDoing Well by Doing Good remains relevant. Now, more than ever, cause marketing has become the core value of many successful national retailers. While it is difficult to quantify cause-marketing spending, 2013 promises to be a breakout year as retailers are projected to invest a whopping 1.73 billion dollars into cause marketing campaigns or projects. jcpenney was founded on the principle of the Golden Rule: treat others the way youd like to be treated. In 2012, jcpenney remains true to their giving roots and launched a new cause marketing campaign called jcp cares. It was meticulously crafted and has all the key ingredients to create true customer affinity. jcpenneys business mission is to become Americas favorite store and, for the reasons outlined below, jcp cares is the vehicle that will drive them to their goal. THE KEY ELEMENTS OF JCP CARES Lets take a close look at the key elements of the jcp cares program and I will shed light on why these strategic and tactical elements will result in creating customer loyalty.

THEY KNOW THEIR AUDIENCE jcp cares supports a different cause each month. In July it was the USO, in August the Boys and Girls Club of America, for September it was Teach for America, and now in October it is The Breast Cancer Research Foundation. Obviously, jcp cares understands which genders respond to what types of causes. jcp cares offers a smart mix of causes with a slight lean toward their female customer. Women like preventive medicine, child welfare & social change; men favor Goodwill & The Salvation Army.

HEATHER REIDS INDUSTRY PREDICTIONS Protecting and exploiting CUSTOMER ANALYTICS :: Explosion of VIRAL VIDEO CONTENT that humanizes brands/retailers :: CUSTOMER CENTRICITY marketing :: Rewards based IN-STORE GAMIFICATION :: MULTI-CULTURAL marketing


Loyalty Management LOYALTY360.ORG

ROUNDING UP With every purchase that a consumer makes at jcpenney, they can choose to round their purchase amount up to the next dollar. The additional change will be donated to that months featured cause. Research has proven that women prefer to shop with retailers when a donation is made with each transaction.

Walters and I further discussed the tactical element of jcp cares incorporating foursquare into their cause marketing campaign. jcpenny is smart to use Foursquare, explained Waters. It gives the program another layer of connection with consumers, especially with younger shoppers that are hooked on using smartphones and tablets to keep track of friends and deals.

The programs connection with social media, including Foursquare, STAYING LOCAL People want to feel they are making a difference in their community. represents a key advancement in cause marketing as brands use Most national retailers are just realizing the importance of keeping mobile devices to connect with shoppers where they are and where donation proceeds in their community. When customers donate, all of they care, explained Waters. The future of business, marketing and cause are unfolding on mobile devices. the proceeds stay in their state. I asked my friend and authority on cause marketing, Joe Waters the author of Cause Marketing for Dummies to weigh in on the importance of retailers to localize their cause marketing. Joe states that The 2010 Cone Evolution Study made it clear what consumers want, 91% said that companies should support an issue in the communities where they do business. CELEBRITY ENDORSEMENT When brands partner with a celebrity their customers identify with, it can be a very powerful tool. jcp cares recently announced that country music star Blake Shelton is their official ambassador. Consumers are inundated with over 3,000 advertising messages a day, but only 30% of those messages are committed to a consumers memory. Here is the kicker: only 15% of all US advertisements feature a celebrity endorsement. So it goes without saying that an advertisement featuring a celebrity endorsement will break through the clutter.


said that companies should support an issue in the communities where they do business

64% of adult Internet users who follow a celebrity also follow a brand

NAILING LOYALTY THROUGH CAUSE MARKETING In a survey executed by Cone about cause marketing, an impressive 41% of people surveyed say theyve purchased a product because the brand was affiliated with a cause. 85% of the people surveyed went on to agree with the following statement:

85% agreed; when a product or company supports a cause that I care about I have a more positive image of the product or company
Consumers expect retailers to humanize their brands. Cause marketing directly hits consumers in the heart, creating brand affinity. The strategies and tactics of jcp cares are excellent examples of how to model a cause marketing campaign that will create customer loyalty. L LEVERAGING SOCIAL MEDIA Social media has taken center stage as marketers new sweetheart. Customers follow brands and want to engage with brands from the comfort of their smart phone. jcp cares leveraged the power of social media last July. Jcpenney donated a dollar to the USO for each customer who checked in at a jcpenney location via foursquare. The result was a $50,000 donation to the USO.

Heather Reid is a representative at Pointsmith, an esteemed in-store marketing firm. Heather offers a unique, insider perspective, as she collaborates with c-suites executives from our Nations leading retailers.

Loyalty Management FOURTH QUARTER 2012






Beyond Analysis

hat do you think of when someone says loyalty program? A wallet crammed with retailer reward cards, perhaps? The latest developments in payment methods and digital technology have changed todays loyalty landscape into an ever increasingly complex environment. The key challenge businesses face is explosion of data and how to collect it. The rapid emergence of new payment methods have revolutionized the loyalty business. Long gone are the days when loyalty cards were the only way to identify and collect customer data. Now with multiple ways to identify a customer across a growing number of channels, its all about Big Data. This means multiple data sourcesboth internal and external being brought together to put the customer at the heart of business strategy. The good news is that we have access to all this wonderful behavior data. However, the challenge for retailers is analyzing it, making sense of it and most importantly, acting on it. Just knowing what was in someones shopping basket is no longer enough; you need to understand long term consumer behavior, what customers are doing before they enter or after they leave their shop, and what their interests and aspirations are. The future is about intelligent customer engagement and the key to this is in the data, especially the behavioral data that can really help you engage with your customer and employees in ways that will improve your companys performance.

THE EXPLOSION OF DATATHE RAPID RISE OF DIGITAL TECHNOLOGIES AND SOCIAL MEDIA We live in an anything, anytime, anywhere world and new technology is already transforming consumer behavior. Products and services are increasingly being researched, reserved and bought through a wide variety of channels, including PCs and tablet computers, or via smartphones while on the move. Not only that but customers are talking about their experiences and purchases on open social networksand are far more likely to trust reviews from fellow Facebookers and Tweeters than they are from more traditional sources. According to a survey by The Logic Group, over a fifth (22%) of Britons has visited a companys Facebook page in the last six months. Whether they are liking a product on Facebook or tweeting about the service they received, consumers are increasingly telling the world what they think. Successful customer engagement via social media is a two-way conversation between the brand and the customer, and one that adds value for the consumer. Businesses may encourage customers to share their thoughts but this desire to engage can be a doubleedged sword. Unwary retailers could discover that it only takes one poor customer experience through one of these channels to have a far-reaching negative impact on their sales. So whilst grappling with the firestorm that is the social media space, its easy for businesses to forget that all this customer interaction however positive or negativegenerates vast amounts of data. And although the opportunities for harnessing this data is pretty much infinite, the issues are also increasingly complex, particularly as the journey from need or desire through to purchase becomes less predictable than ever before.


Loyalty Management LOYALTY360.ORG

Its not, therefore, simply about keeping tabs on your social media channels. The key is to capture data from these sources, interrogate the facts and act on that information. To rise to the challenge, retailers need to be smarter than ever to drive customer engagement. BEHAVIORAL DATATHE BEST KIND OF DATA The joy of social media is that it generates vast amount of wonderful, enlightening behavioral data. Why is this so fantastic? Well, because: It is straight from the horses mouth; pure, individual-level data It represents a section of the wider population and can therefore feed in to broader customer segmentation analysis It is infinitely actionable It can be tracked and measured for a clear and definitive understanding of ROI, especially in relation to campaigns and offers Youd be amazed how many well-known brands simply dont know what to do with their customer behavior data. Some dont even collect it. A good first step is to make sure that you have a range of different customer feedback mechanisms (such as customer surveys, social media, live chat, web forums and blogs) feeding into testing strategies where you can track and measure real-time feedback and behavior. And dont forget your customer service centers, if you have them. Customer calls and emails are always a rich source of behavioral data. Collecting, interpreting and acting on behavioral data can be a real differentiator in terms of loyalty. It can provide the best possible competitive advantage; a direct link to your customers and a chance to make sure that you put their needs at the heart of your decisions around product, price, place, promotion and people (yes, that old marketing classic). By doing this, you start to make customer engagement a two-way street. For example, you can use your behavioral data and customer communications to test ideas on the back of customer feedback and insight. SO, WHERE TO START? My issue with the whole Big Data debate is that it makes data analytics seem like an unattainable utopia; its more than a bit scary and just too damned hard. Not so. Ill let you in on a secret. Big Data is nothing new. Its simply about joining the dots of all your relevant data sources. Whether it is customer, local market or communications

data, every company out there has at least one data source at its fingertips. The mistake many make is trying to bring all of it together, all at once. So take the time to understand what your version of Big Data needs to look like for your company and your customers, then pick one area of focus and put your energy and resources into that.

Customers are unlikely to wait around for their reward; they want instant recognition and gratification. The trick for retailers is to deliver this loyalty kick without devaluing their brand offering. We all know of retailers that offer constant discounts and vouchers. Only a fool would buy from them at full price.

1. Be clear on your business objectives,

and those of your customers now (and what you dont)


2. Understand what data you have right 3. Align 1 & 2 and then create your own
Big Data plan

My issue with the whole Big Data debate is that it makes data analytics seem like an unattainable utopia; its more than a bit scary and just too damned hard. NOT SO.
TO DATA INFINITYAND BEYOND The future for loyalty is intelligent customer engagement. Its about marketing to and engaging with the individual. To achieve your consumer, you need to know what they think to understand what they do and why. To know all that, we need to listen. In todays challenging and competitive economic climate, we must reassess whose views matter. Our employees, partners and customers could just be the best people to tell us how to make our business succeed. Do it right and do it consistently, and loyalty and engagement will be the happy result. L

4. This should NOT be a 3 year, all5. Only include actions that can be

singing all-dancing plan. Plan in detail for the first 12 months, then in high level for years 2 and 3

tested and measuredso you can learn and develop proof points in it for the long haul, your customers will be too!

6. Be committed to your data-if youre

SHORT-TERM REWARDS REAP LONGTERM GAIN Although true customer loyalty is about long-term retention and engagement, in todays challenging economic environment retailers need to act fast to entice new customers and win back the lapsed.

Hunter Albright is the Chief Executive Officer for North America and Global Head of Consulting for Beyond Analysis. With over two decades of experience in industry and academic settings, he is a leading expert in the development and application of value driven analytics to improve business performance.

HUNTER ALBRIGHTS INDUSTRY PREDICTIONS will increase efforts to use behavioral data from their customers, across all channels, to create more relevant and intelligent engagement with their customers and employees. :: DATA COLLECTION AND ORGANIZATION companies will continue to reassess and improve how they collect customer data across all channels and organize it so that it is more actionable. :: COMMERCIAL FOCUS Senior executives in organizations will required a stronger commercial focus throughout the business and improved analysis regarding the incremental value of activities based on the data that is now available across all channels.

Loyalty Management FOURTH QUARTER 2012





C AC Gro u p

he road to poor performance is paved with good intentions and bad execution. Recent data indicates that some loyalty programs may actually be counterproductive to supporting customer acquisition and retention, encouraging purchase and improving the bottom line.


44% 36%

of consumers have had a negative experience with a loyalty program1

17% 81%

of consumers received a reward or promotion that made them want to come back to the merchant2

of U.S. respondents say that loyalty programs are very influential in their purchase decisions3

of loyalty member dont know the program benefits or how/when they will receive rewards4


There is no singular answer to why some loyalty programs are falling short of desired outcomes. Certainly, the data explosion coupled with an exponential increase in channels has made the discipline more complex. Moreover, the rising tide of consumer expectations has buoyed the perception of rewards from a nice bonus to an entitlement and created a new demand for highly relevant, personalized experiences as opposed to generic commodities. Other factors include poor technology support and failure to communicate program benefits clearly and consistently.


Loyalty Management LOYALTY360.ORG

However, while there are many possible reasons for lackluster results, our experience indicates that, among effective programs, there is one common denominator for successstrategic integration of loyalty with overarching corporate goals. Generally, loyalty programs emerge in response to competitive pressure and with the specific and narrow intent of addressing an immediate need e.g., growing/preserving the customer base and/or bumping up the bottom line by driving increased spending. Consequently, loyalty programs tend to be become siloed as a marketing tool rather than a strategic platform to advance overall business and brand goals

The first step on a strategic mapping path is a situation analysis that examines the competitive environment, the current business situation, and existing capabilities. Some areas to explore in this part of the process include:

Companys long-term vision/values and how a loyalty program fits within that vision Business objectives and primary means of profit generation Current positioning and level of brand recognition Potential of loyalty program to improve competitive differentiation Possible impact of market conditions on a loyalty programs True strategic mapping of loyalty initiatives extends beyond the Channel sales strategy, operations and differences in business marketing P & L. Rather, it is a holistic approach where loyalty is a model, target customers, etc. across lines of business component of the broader brand vision and investment matrix. As Impact on technology/HR etc. such, the business case for a loyalty programs closely considers the Process for capturing data and scope of existing data assets implications of proposed designs on operations, human resources, Potential reputational risks and technology resources and metrics and makes it easier to secure By contextualizing loyalty in the big business picture, this analysis support from key stakeholders and management. serves as a compass for defining a loyalty scheme direction that will The following sections provide insights and best practices for elevating be sustainable, channel-agnostic, executable and complementary loyalty planning from a marketing process to a management imperative. to overall brand values and positioning.

continued on next page Loyalty Management FOURTH QUARTER 2012


Is Your Business Loyalty or Is Loyalty Part of Your Business? (continued)

It can also mitigate the tendency to default to quick fix me too approaches that dont move the needle, or worse, disengage consumers and have a negative impact on business. For example, retailer XYZ is facing inventory selection challenges as well as other investment pressures including a technology upgrade that will enable a loyalty program to go mobile. Without filtering the loyalty request through a strategic mapping lens, a company may push forward the mobile play to drive sales but risk alienating customers by lacking the inventory to meet the demand generated.

The target customer profile that emerges from the mining process enables marketers to pinpoint gaps between the current and desired state and isolate opportunities to garner the maximum return on investment. This gap analysis is also an effective tool to reinforce confidence and consensus among senior leadership that a proposed loyalty plan will be an appropriate catalyst for growth. When choosing between various plan designs (e.g., currency based programs, tiered programs, experiential, etc.), in a strategic mapping scenario, the scope of review will extend beyond customary loyalty benchmarks such as the investment and return rate projections, financial liability, breakage and customer growth potential to calculating the potential implications of a loyalty program on customer service delivery, and other operational activities. This is a clear demonstration of how strategic mapping diverges from a traditional loyalty planning approach. Whereas, with the latter, there is a laserlike focus on financial outcomes, strategic mapping aims to understand the macro impact of every corporate initiative on the brand. Thus, in a strategic mapping mindset, a loyalty program design that cannot be supported adequately by existing employees or risks diverting resources from other non-loyalty related customer support activities may not move forward (despite financial upside) as bad service is fundamentally counterintuitive to customer centricity, the underlying bedrock of loyalty. In fact, a recent survey found that 72% of respondents identified customer service as the top priority in their decision to remain loyal to a brand.

With a solid business foundation in place, marketers are well-situated to conduct a data deep dive to enhance understanding of customer dynamics and define the specific structural elements for an effective program. This portion of the groundwork should focus on examining key customer performance metrics, demographic and lifestyle drivers of customer base relative to overall market, behavioral segmentation, competitive set for key segments, attitudinal drivers, and the hierarchy of customer needs, i.e, tangible (transactional) vs. intangible (emotional).

ROB MORGANS INDUSTRY PREDICTIONS With personalized experiences continuing to grow in priority, expect to see large programs with an overarching value proposition splinter into a number of smaller, more targeted offerings (e.g., sub clubs/tiers) that give members greater control over earn and reward option andnew loyalty currency in the form of INDIVIDUALIZED CONTENT to increase relevancy and participation. :: The loyalty conversation will become more intimate and anticipatory. As marketers become even more sophisticated in using transaction data and modeling techniques to understand their customers, the loyalty process will seem less formal and more organic and genuine with companies delivering CUSTOMIZED EXPERIENCES that make customers feel that brands really get them. :: Senior marketing executives who are concerned about lack of financial accountability in channels such as social media are likely to challenge loyalty marketers to justify the capital expense with the programs they have today. Responding to these new c-suite demands will likely require GREATER INVESTMENT IN ANALYTICS AND MEASUREMENT, as our research shows that this is generally not an area of priority for loyalty programs.

Commonly, the definition of loyalty program success is grounded in customer acceptance and financial resultsAverage monthly/quarterly visits, spend levels, breakage or payoff, investment vs. return, transactional penetration. By comparison, a strategic mapping approach will likely involve operational and HR metrics that are statistically related to customer satisfaction/loyalty. For example, on the HR side, a loyalty program may include employee training as well as specific benchmarks/expectations for performance tied to loyalty scoring. A linkage analysis (e.g., linking satisfaction scores with operational measures such as hold time, turnaround time, and number of transfers) could also be a valuable tool to establish customer-centric operational metrics for the purposes of goal setting. In summary, todays consumers have the luxury to be more fickle than ever. They also dont think of loyalty in break-evens and KPIs. Winning and keeping long-term mind and wallet share this environment is not about quick gimmicks but rather a long-term game plan to deliver consistently satisfying and positive experiences both in and outside formal loyalty program. In other words, a brand must demonstrate loyalty to get it in return. Strategic mapping embeds loyalty as an organizational priority across all aspects of the enterprise and empowers brands to elevate generic, transactional earnand-burn loyalty programs to an emotional connection with the customer that will yield substantive brand and business dividends. L

Rob Morgan is the Chief Marketing Officer and practice leader for loyalty at CAC Group. Throughout his nearly three decade career, Rob has spearheaded business and loyalty strategy development for clients across virtually every sector including AIR MILES Rewards, Sears, Exxon, Delta, Bank of America, P&G, GM and Nissan.


Loyalty Management LOYALTY360.ORG

ACI Worldwide Study, March 15, 2011 Ibid. Colloquy, The Rules of Engagement: Loyalty in the U.S. and Canada, December 2011 4 ACI Worldwide Study, March 15, 2011 5 ClickFox Loyalty Report, April 2012
2 3


Financial Services


Public Sector


Dont waste your money. Im a sure thing.

Will your marketing really change customer behavior? Or could you be over-marketing to the sure things that will buy anyway? Only uplift modeling can tell you. Pitney Bowes offers the worlds only packaged software application developed specically for the task of building uplift models which can predict the direct impact of your marketing. Make the move beyond propensity modeling, to uplift modeling, and realize benets including: Decrease marketing program spend by 20-60% Improve campaign results by 30-300% Eliminate the negative effects of marketing by weeding out the sleeping dogs Call our experts today at 800-327-8627 or visit for more information on the Uplift advantage. Solutions for Enabling Lifetime Customer Relationships

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Loyalty 360 Interview with A D A M S T E WA R T P l a y . c o m
WHEN DID RAKUTENS PLAY.COM FIRST START USING FACEBOOK? November 2007. WHAT CONSIDERATIONS DID YOU WORK THOUGH PRIOR TO LAUNCHING THE FACEBOOK INITIATIVE? We wanted to develop an additional channel through which we could engage with our customers and provide them with added value in the form of exclusive content, offers and competitions.,

The online entertainment retailer owned by Japanese digital firm Rakuten, has found social success using Facebook to engage fans and earn referrals from top advocates. In fact, in 2011 was able to attribute 2m worth of sales to Facebook, and direct sales through the social network have increased 80% in the past year. Finding that growth on this social channel has influenced direct sales they now look to expand their platform on Facebook and have plans to launch a loyalty program for customers who promote the brand. Demonstrating the value in social media for online retailers, customers who made their first purchase via a Facebook referral were found to spend 30% more than an average customer with the online retailer over the course of the year. By rewarding fans, can capitalize on the viral aspect of a social presence and turn the friends of fans into fans (and customers). In the Q&A that follows with Play.coms Marketing Director, Adam Stewart, glean insights into how is leveraging Facebook to engage fans and get tips on how marketers new to the space can test this social channel too.

FACEBOOK CAN BE USED IN MANY WAYS, FROM A CUSTOMER FEEDBACK TOOL AS A CUSTOMER REFERRAL PLATFORM, OR AS A TRAFFIC DRIVER TO A PRODUCT SPECIFIC SALES TOOL. HOW IS RAKUTENS PLAY.COM LEVERAGING FACEBOOK? As a retailer, our ultimate objective is to drive new customer acquisition and sales from the channel. In order to do this, we leverage Facebook in a variety of ways. Primarily we seek to engage our fans with exclusive content and topical posts related to our product categories. We utilise campaign applications (utilizing the Engage Sciences platform) to capture additional insights into our fans interests which can be used to better target them with Marketing activity in the future, and ultimately drive additional sales. TO WHAT DO YOU ATTRIBUTE YOUR SUCCESS WITH FACEBOOK? Typically our fans initially come to our Facebook page because they are interested in an individual competitionfor example because they want to win tickets to a film premiere. However, they stay with us and continue to spend time on our page because of the way in which we engage our fans with new and exclusive contentwhether it be further competitions, channel specific product offers or sneak peeks into future releases. Now we are looking the take the next step into social loyalty with the foundations that have been built by the Engage Sciences platform.


Loyalty Management LOYALTY360.ORG

A BIG CONCERN WITH CMOS & MARKETERS ABOUT UTILIZING FACEBOOK AS A CHANNEL, IS UNKNOWN TIME/RESOURCE COMMITMENT. HOW DID YOU APPROACH THIS CHALLENGE? We tested our way into it. Initially we utilized an agency to run our Facebook activity, however when it became clear that this was going to be a key driver of growth and data intelligence for the business, we brought the management of the channel in-house. In addition, we leverage technology, working with our partner Engage Sciences to automate a lot of the heavy lifting associated with campaign creation and management which has been the catalyst to our success.. ANY ADVICE FOR THE NOVICE MARKETER? Test and learn is just as important on Facebook as with any other channel. Vary your posting strategy (eg. frequency, content), try different campaigns, and quickly develop an idea of what works and what doesnt. And always make sure your social activity and strategy is aligned with your business objectives! Simple start is recruit fans, engage fans, turn into customers. L


:: SOCIAL MEDIA INTEGRATION more integration of social media tools to provide customers with a deeper level of personalization and new generation engagement. :: LOYALTY SCHEMES loyalty schemes are commonly used in high street stores and becoming more prolific online. We expect to see more use of a common loyalty scheme across offline/online stores and more so on social media platforms. This will provide a fuller holistic customer profile, and drive specific customer behaviorstransactional and non-transactional behaviors around an eco-system eg. SuperPoints incentive to shop cross merchant or cross device (transactional) and SuperPoint incentive to like a facebook page (non-transactional). :: ANALYTICS there is a growing need for predictive and adaptive analytics to anticipate and service customer needs and wants.

many businesses are still just talking about this. In order to stay ahead of the curve, retailers must provide personalized and connected marketing messages across each channel and each device used by their consumers.



Products, Advancements, & Technologies

The FiveStars co-founders began as top business consultants at McKinsey, where they were first exposed to the power of customer loyalty programs. They quickly realized why almost every Fortune 500 willingly spends MILLIONS of dollars on their in house programs...because a well-executed loyalty program is extremely profitable! With this in mind, FiveStars created a network of customized loyalty programs with tools that are simple enough for busy merchants to use, yet powerful enough to outclass anything even a Fortune 500 has to offer. FiveStars is an incredibly robust loyalty and CRM solution. The FiveStars network builds a customized loyalty program that is optimized for your business. You maintain full control. Sign up all of your customers right from your POS in seconds and FiveStars does the heavy lifting. They: collect the data, provide clear analytics and give you cutting edge tools to stay in touch with your customers via narrowly targeted emails and text messages, along with social media integration. For the first time, truly understand and engage your customers all in one easy to use platform. The FiveStars network comes with hundreds of thousands of users that are eager to discover and visit your store! Their goal is to generate and maintain buzz around your business to keep your customers coming back again and again...

RewardMe is a customer loyalty platform for the restaurant and retail industries that captures customer data at the point of sale and empowers businesses to use the data to influence customer behavior. Businesses that use RewardMe have experienced a measurable 2% increase in bottom line revenue due to gamification techniques and personalized marketing messages made possible by the unique, patent-pending technology RewardMe has created. How RewardMe is different 1. All customers can join the rewards program: all customers with a mobile number can join RewardMe. This means that there are no apps to download or smartphone requirements. 2. Capture dollar value and SKU data: RewardMe captures how much money a customer spent, what the customer bought, and when the customer shopped from EVERY customereven customers that pay cash. 3. Reward customers based on dollars spent: A business is not limited to rewarding a customer based on visits. This means that a customer that buys a group meal for an entire office receives more points than a customer that just buys a soda. 4. Custom branded for businesses: the RewardMe tablet is custom branded to fit the business. When a customer joins the rewards program, they dont join RewardMe; instead, the customer believes they join the Businesss Rewards Program. Further opportunities with RewardMe include: Personalize marketing messages: send a customer that loves burgers one message and a customer that loves salads a completely different message. Marketing messages are more effective when personalized to fit the customers preferences.


LOC Card allows any merchant to have a Loyalty Program It is a known fact that consumers love reward /loyalty programs, but it is also a well-known fact consumers are more than frustrated with sheer number of programs they are forced to manage, to the point they are now declining participation. The frustration comes with the cumbersome enrollment process and sharing their personal information. The frustration manifests itself in the bombardment of email and text messages, and the simple fact that there is yet another card to carry and manage. The LOC card solution is the fastest and easiest method for a merchant to overcome those barriers and grow their loyalty member base. The LOC card allows consumers to use a single, universal card to enroll and track reward/loyalty points in multiple merchant programs. A simple swipe of the LOC card enrolls a new customer into any program, eliminating all the hassles of enrolling in reward programs for the customer. Quick, easy and simple, the LOC card is the merchants answer to the consumers demands for a simple universal loyalty card. Consumers can then visit a personalized web page on the LOC site to view their program balances and set their communication preferences. The LOC Card offers a whole host of additional benefits to both the merchant and consumer. The merchant maintains their own currency with-in their loyalty system. Merchant integration is easy, requiring minimal IT effort. The LOC card is working with numerous POS providers to provide simple integration, or merchants can contact LOC directly to integrate. The merchant maintains all their data with complete control of their program.

Bring back lost customers: auto-send a text or email to a customer that

has not returned in the past 30 days.

Segment and filter customers to better understand them: view customers

that have spent over $500, segment weekday vs weekend customers, and even categorize customers based on food preferences.

RewardMe currently serves businesses from the largest multi-national

franchises to small, single-store local businesses.

The LOC card allows consumers to use a single, universal card to enroll and track reward/loyalty points in multiple merchant programs.


Loyalty Management LOYALTY360.ORG


Creating a strategy for consumer engagement is simple just ask the consumer what they wantthen the only challenge is collecting the information, acting on it and repeating the process over and over, while maintaining consistency. NCR Enterprise Preference Manager (EPM) solves all of those challenges NCR EPM is an omni-channel solution that captures the voice of consumer, extending a retailers view beyond historical Customer Relationship Management (CRM) data. Integrated with customer-facing touchpoints, NCR EPM learns the consumers behavior (e.g. language preference, dexterity, receipt printing) and asks questions to gather any detail the retailer needs (e.g. favorite departments/ brands and communication preferences.) NCR EPM can be implemented as a stand-alone solution or in conjunction with NCR Advanced Marketing Solution (AMS) to add real-time consumer preferences and create personalized offers. NCR AMS is an enterprise offer management solution that coordinates offer execution, facilitates unlimited customer loyalty programs, electronic opt-in (coupon to card) and connects the retailers touchpoints so that the customer is able to redeem, view and manage their profile with the retailer anywhere they interactonline, at a traditional point of sale or self-service touchpoint. These two solutions are the cornerstones of NCRs c-tailing solutions, which allows retailers to provide consumers a ubiquitous experience based on where and how they want to interact. Until recently, NCR AMS and NCR EPM were aligned to the needs of the grocery segmentNCR AMS is currently implemented in seven of the top 25 grocery retailers and wholesalers.1 In 2011, NCR expanded their portfolio to include general merchandise and will soon complete development efforts to extend to convenience stores.

We all know that strong customer and target business relationships are the most reliable and profitable source of growth. But often the drive for short-term revenues causes client relationships to become lost in the process. So why is the right balance between business results and relationships so difficult? Until now, businesses couldnt measure the strength of their customer relationships, much less track this information across their organization within their daily CRM processes. RQ for Salesforce (RQ), The Relational Capital Groups client relationship advancement application, provides deep, actionable insights and plans that lead to improved customer retention, penetration and growthtransforming the way you do business. RQ is the first Salesforce application that allows you to identify, measure and assess the most important relationships impacting your sales and business performance. RQ becomes part of your sales workflow by combining the tracking and reporting capabilities of Salesforce with The Relational Capital Groups Relational Quotient insight to create an easy-to-use, yet powerful cloudbased CRM relationship advancement tool. With RQ, your team receives a powerful relationship advancement tool to develop action plans for transforming their relationships with every Contact. And your management team can access these plans to validate that effective strategies are being produced, for the right relationships. You can transform the way you do business by developing the insights and strategies needed to: Collaboratebetterwithcustomerstotailorsolutions Challengetheminwaystheywillappreciate Createhorizontalandverticalrelationshipswithinkeyaccounts Minimizeforecastriskthroughbettertransparencyintoyour sales teams relationship status Competitor-proofyourselfandyourteam
To get started today, go to or

Supermarket News 2012 Top 75 Retailers and Wholesalers.


When dining at restaurants and bars or shopping at retailers, customers using talktUp gain access to cashback dividends, monthly jackpots, and shared philanthropic giving. Unlike daily deal companies that distribute onetime discounts and coupons, talktUp promotes steady, long-term customer loyalty with a variety of incentives for both consumers and businesses. You dont have to be a rocket scientist to know that a personal recommendation is the best advertisement in the world. We all love to shop, dine out and tell our friends about the great places we discover, so talktUp figured out a way for customers, merchants and the whole community to get rewarded for doing something nice that comes naturally. They made it so simple its almost embarrassing. Invite loyal customers to share their good experiences with their friends, then reward them and donate to charity when their recommendations are acted upon. Pretty easy! talktUp is free for consumers. They simply download the mobile app or sign up at and enjoy the following benefits for doing something they already do! Help yourself. With talktUp, every time someone acts on a members recommendation the member gets paid for it (and their friend spends their money more wisely). Not only do they get the satisfaction of knowing their friends are benefiting from their recommendations, but talktUp pays them on their own purchases too! Help others. Every time a talktUp member spends $20 or more at any talktUp business, talktUp will donate a meal to someone in need through Food Lifeline on their behalf. Members buy something they want. Someone gets something they need. Everybody wins! Its good business. talktUp members voices make a difference. Businesses that they talk up get more customerskeeping good businesses in businessand the world a better place. talktUp creates community and focuses on the good in all of us. Good experiences, good advice and recommendations with a good outcomefor everyone.


Companies today have customer data coming to them from all directions interactions in the store, phone calls, website, chat, social media and survey feedback. The big question is, how are organizations listening to all of this data and acting on it in a meaningful timeframe? ResponseTek, a market leading customer experience management (CEM) software vendor, has a software solution to automatically manage, analyze and report on customer feedback. The ResponseTek Listening Platform connects thousands of employees with millions of customers daily. By involving the customer at all touch-points across the customer lifecycle, organizations are able to continuously improve through operational programs and strategic services. Customer experience information is gathered through advanced listening posts following an interaction with the company, including call center and retail store channels, using SMS, email, web and IVR survey collection. Feedback is integrated from all customer touch-points with individualized and aggregate reporting. The right information is automatically distributed in real-time to the right people, eliminating silos of customer data and creating visibility into the overall customer experience. The Buzz Tracker report, a key product release in the past year, automatically translates customers text-based comments from all channels into business metrics, allowing for immediate interpretation of satisfaction and loyalty drivers. Since 1999, the ResponseTek Listening Platform has been implemented by global leaders in the telecom, insurance, financial services, tourism and retail sectors in need of an enterprise voice of the customer system. With its unified view of the customer across multiple touch-points, a single system is delivered that integrates channels, lines of business and countries.

Loyalty Management FOURTH QUARTER 2012



Loyalty 360 & KANA

n the digital age information flows quickly and with few barriers. Consumers, your customers, have questions, challenges and concerns; they have high standards and limited patience. The world is their marketplace, and customers today have many options for purchasing products and obtaining services. The information provided on websites, social networks and through traditional media empowers your customer; they have a voice. At the push of a button, a person expects answers, solutions and resolutions. Knowledge is power and consumers are now better able to evaluate and choose the companies that will best serve their needsthey have power.

The important question is: how easy do you make it for your customers, prospects and partners to work with your organization? The effort required to work with your brand is a critical measure and will determine, in part, your successes and failures. Consider the customer experience as they seek to find information, phone numbers, email addresses. How about the process for doing business and transacting? Companies serve customers best by providing to them simple paths and low barriers. This is not only about order taking, but also a necessary consideration for providing instructions, support, return policies and other important details. Most companies have this information readily availablesomewhere. The trick is to make this information easily accessible to the customer, through the channel with which the customer is the most comfortable; matching need with the customers expectations. It seems like a simple enough step, but the reality is that most companies have major hurdles for customers to jump in effort to obtain servicing and support information. Part of the solution is to organize information and make it ridiculously easy to search, find and present.


Loyalty Management LOYALTY360.ORG

This is a critical issue today because consumers are accustomed to immediate information and are provided with a wide variety of similar options, customers will choose the product or service from the company offering the best overall experience. Web customer service is a powerful tool and it can help companies to save money over more expensive service channels. Done right, web customer service allows customers to easily handle their own needs at their own convenience.

unstructured data from a wide variety of sources in order to provide world-class customer self-service that sets them apart from their competitors and contributes significantly to sales, revenue and profitability. This paper will examine those elements critical to measuring customer effort, the potential use of this information, examples of some enterprises successfully deploying customer self-service and the brand impact of customer self-service. L

Analysts from Gartner and Forrester pointed out in a 2010 Harvard Business Review article that reducing the effort that customers need to make in servicing themselves makes it much more likely that they will do business with the company again, plus its more likely that they will also speak positively about their experience on increasingly important social networks, positively influencing other prospects. According to Forrester, 66% percent of customers say that valuing their time is the most important thing that a company can do to provide good services. Forty-five percent of adults shopping online will abandon their online purchase if they cant find a quick answer to their question. Companies cannot rely on anecdotal evidence or what company executives think should be adequate customer self-service capabilities. Enterprises need to collect, measure and analyze structured and

KANABy unifying and adapting customer journeys across the contact center, Web site and social community, KANAs solutions have reduced handling time, increased resolution rates and improved NPS at more than 600 enterprises globally. Loyalty 360A trusted source for cutting-edge research, best practices, and networking opportunities. Loyalty 360 gives members the expert insights and guidance needed to better understand loyalty and develop programs that effectively engage and build strong relationships with their customers and employees.

Download a full copy of the white paper, M I N I M I Z I N G E F F O RT TO M A X I M I Z E L OY A LT Y at: www.loyalty360. org/resources/research/kanacustomer-effort Share the white paper with your colleagues and peers!

**For optimal user experience be sure your scanner app is current.



Little & Company

o the same shopping motivations still matter in 2012 that inspired shoppers in 1972 when Watergate was news, flares were HOT, ABBA was IN and The Brady Bunch was on, and an average house cost under $8,000?

With Shop Talk: Building Brand Loyalty by Understanding Todays Shopping Behaviors and Realities, Little & Company revisited the landmark work of Dr. Edward Taubers Why Do People Shop? study in its 40th anniversary year. The commissioned study four decades later would revisit Taubers conclusions and also help us to better understand our retail clients target audience and help them to identify opportunities to improve brand loyalty. We wanted to see if shoppers motivationsthe shopping experience and the shopping outcomes that Tauber looked at were still relevantand to gauge if we could affirm, and add to those views with new insights based on the current marketplace. Are shoppers still driven by the same personal and social factors? If so, what are the implications for retailers who are trying to find or maintain a competitive position? Our study confirmed the basics of Taubers work: People shop for a variety of personal and social reasons. However, where Taubers work surveyed men and women, Shop Talk focused on women since 80% of them do all of the shopping todayand looked at the impact of a number of trending retail realities. For example, the lifechanging impact of technology on brick-and-mortar stores, and the fact that Millennialswith their discriminating tastesare the largest emerging demographic, and a new, key influencer group raised and trained on mobile phones, websites and more recently in social networks. Surprisingly a lot of the motivations from 40 years ago havent changed dramatically. But the expectations of how those motivations are met have changed dramatically. We thought that maybe after 40 years Taubers conclusions would be outdated but no, they provide a fundamental baseline that is still valid. We merely added a coda to the work in looking at the impact of todays retail realities and added a new perspective for retailers to drive brand loyalty and improve business.


:: DEEPER CONNECTIONS: Retailers will develop a deeper and more meaningful connection with consumers, inviting them to take an even greater part in the conversation. Social media will play an even bigger critical role. Brands can no longer simply push information and hope it sticks. Because without an opportunity to answer back, it wont. :: Brands will strive for even GREATER AUTHENTICITY IN 2013: Especially those that appeal to Millennials who are emerging as a powerful consumer demographic and as a sophisticated shopper with well-defined shopping habits. That means, brands have to be to true to themselves by being authentic and maintaining a consistent voice.


Loyalty Management LOYALTY360.ORG

Inspiration Seekers creativity is a thoughtful part of the experience Shopping Socialites because sharing the outing is half the fun Treasure Hunters the adventures of a shoppers high Brand Worshippers a following for brand affinity Pampered Guests its the consideration that counts Self-Expressionists individuality is a trend all to itself A shopper generally may fall into one of these categories, but most will relate to several of the personas. Combined, these personas capture the many facets of shoppers and are meant to highlight their multidimensional nature rather than confine them to a singular definition. BEST PRACTICES There are a number of retailers that have been successful in connecting with shoppers in light of todays retail realties. Below are a few examples: PERSONA: INSPIRATION SEEKER J. Crew: Offering Digital Touchpoints to Target Millennials J.Crew offers several ways for millennials to get inspired. These digital natives have access to the inspirations of J.Crews own designers through Tumblr, which features regular posts from different members of their creative teamincluding behindthe-scenes content from scouting trips. In addition to their blog, the retailer also sends out weekly emails from their Creative and Fashion Directors and Head Womens Stylist. PERSONA: SHOPPING SOCIALITES Whole Foods: Taking Shopper Loyalty to a More Rewarding Level Whole Foods Market Wellness Club is a loyalty program that is sure to appeal to Shopping Socialites. The Club features: health-minded courses developed by medical doctors, inspirational and informative skill-building classes, supper clubs and special events, coaching and support, and a growing network of community businesses that promote health and well being. Not only have they created a group for shoppers to belong, theyve also invited highly social events that revolve around the in-store environment. PERSONA: TREASURE HUNTERS T.J. Maxx: Navigating a Competitive Strategy for Savvy Shoppers PERSONA: CONNECTING WITH BRAND WORSHIPPERS Lululemon: Utilizing Health-Minded Employees to Educate Shoppers Lululemon offers an inclusive, intimate shopping experience made possible by employees who advocate healthy living. The retailer also offers an ambassador program to unique individuals living in its store communities who embody the lululemon lifestyle and culture. On top of that, its online presence promotes community pages, a lively blog, and a detailed calendar of events that continues the healthy brand experience. The takeaway? To enhance a brands potential in todays challenging retail environment, brands must align with shoppers values and motivations. Leveraging these behavior personas ensures a brands relevancy and ability to drive long-term affinity and loyalty. L

Surprisingly a lot of the motivations from 40 years ago havent changed dramatically. But the expectations of how those motivations are met have changed dramatically.

T.J.Maxx launched the Maxxinista campaign, which emphasizes the savvy competition associated with finding insatiable deals. The entire store concept is based on designer goods for less. Whats more, some stores offer The Runwayan exclusive department overflowing with Italian, contemporary and A multiple award-winning Creative Director and also the President of couture fashions at outrageously low prices. The real adrenaline Little & Company, Joe drives Littles design-thinking to strategically help continued on next page score is felt when the original price is tagged with the sale price. marketers better understand their culture and their customers, leading to Its a huntresss haven. better sales, deeper engagement with the brand, repeat customers, and a strong sense of inner and external loyalty.

Loyalty Management FOURTH QUARTER 2012






A f f e ct Resu l ts

s another blazingly fast year comes to a close, we must look forward to 2013 and the decisions that will shape programs through 2014.

So, as loyalty marketers and major brands alike come back to pick apart strategic and budget decisions they have been kicking around all year,there are several absolutely critical decisions that could impact their loyalty efforts, either positively or negatively, for years afterward. These are the kinds of decisions upon which careers are made or broken. A confluence of factors will push these decisions to the forefront over the next 12 months.

As loyalty marketers think about their programs in 2013, smart mobile devices must drive their thinking around loyalty program design and especially implementation. The critical decisions include:
1:: HOW DO I INCORPORATE SOCIAL INTO LOYALTY? Sure, brands have been dabbling with using Twitter and Facebook, and with skepticism have experimented with Pinterest, Instagram and Foursquare. But now, as behaviors have shifted so dramatically, its time for marketers to get serious about investing in, maintaining and developing social loyalty programs that also capture new converts to the brand. However, none of these networks should be thought of as the one place to implement loyalty. They all can be supplemental however. Sponsored Stories on Facebook can find new converts through viral adoption and the social graph. A loyalty program that rewards Pinning can draw new converts with allegiance to Pinterest. Reviews and check-ins can be rewarded on Yelp and Foursquare. All of these efforts are designed to dip the brand net in the torrent of fish constantly swimming in these streams, and drive them towards the brands loyalty program. 2:: WHAT TECHNOLOGIES DO I USE TO DEVELOP MY LOYALTY APPLICATIONS (APPS)? The smart device has given consumers an incredibly rich display with tremendous compute power right at their fingertips. Throwing poorly designed apps out there are doomed to failure. However, a key choice must be made between native apps and mobile web apps. A native app is one that has been developed for a specific device (iOS or Android) and must be downloaded and installed on that device. A mobile web app is one that is written to run in a browser on the device, so no download and installation is necessary. A good description of the fundamental differences between the two can be found on Six Revisions.4 From a decision-making perspective, one critical difference is that native apps, because they run on the device, can integrate with the devices features, like its phone,

Dealing with the Mobile Monster

Among the factors forcing loyalty marketers hands are first the inevitability of mobile and smart devices. Its no longer if mobile will be the dominate channel both in and out of store for consumer interaction with a brand, but simply when. According to a recent post, the rate of iOS and Android device adoption has surpassed that of any consumer technology in history. Compared to recent technologies, smart device adoption is 10X faster than that of the 80s PC revolution, 2X faster than that of the 90s Internet boom and 3X faster than that of recent social network adoption.1 This has also caused a second factor to emerge, and that is the explosive growth of tablets, and in particular small form tablets. 2013 just might be the year that e-readers2 and forked Android tablets go the way of Blackberries. The capabilities and user experience of both larger screen smart phones and tablets are simply overwhelming other devices. And, as computing becomes more wearable (see CNNs story3 about Google Glasses) a whole new class of mobile devices will emerge. Finally, new forms of payments continue to explode, from Square to Google Wallet to the recently announced Merchant Customer Exchange, backed by Walmart and Target among others.


Loyalty Management LOYALTY360.ORG

accelerometer, specific location, etc., giving the developer the ability to create really engaging applications. However, a mobile web app, as it runs in the browser and is written around standard languages like HTML5, CSS3 and Javascript, can be written once, and run on any device that supports the key browsers. And beautiful eye-catching apps can be built quickly on these technologies to run on sharp, HD-quality screens. A native app must be written, tested and deployed for every operating system on its target devices. 3:: WHAT IS MY STRATEGY FOR PAYMENTS? With the rush to smart devices comes the

payment, receive information (tickets, e-receipts, etc.) in an incredibly simple manner. And, the entire cash register industry will also undergo a massive transformation as they shift from fixed-location devices to the very portable smart devices themselves from which they will accept payments! All of this means that loyalty marketers must take into consideration that 5th P, payments into their overall product and loyalty strategies. Will I adopt a single wallet strategy or try and integrate with all of them? How can I enhance the customer experience through these devices in addition to payment processing? The very concept of what a receipt is should change to a compelling rich media, relationship enhancing experience. In sum, 2013 will be an amazing transformational year in the manner in which consumers engage with brands, both in and out of store. Loyalty marketers must begin mapping out the key decisions that they must make to absorb and take advantage of these transformations. L

2013 will be an amazing transformational year in the manner in which consumers engage with brands

Bob Fetter is a Managing Partner at Affect Results, a new kind of company focused on developing data-driven marketing programs and strategies that truly affect results. Bob has over 25 years of data-driven marketing strategy work with over 200 clients across a wide variety of industries.

rush to turn that device into a wallet. Key players include Googles Wallet, Apples Passport, IRIS (from the major wireless carriers), eBay and PayPal have announced their own wallet, and most recently Walmart, Target and other major retailers have announced the Merchant Customer Exchange as reported on by GigaOm,5 which will at some point unveil their own wallet, to run on virtually any smart device. In addition, both PayPal and Square have rolled out a credit card swipe device for merchants to plug into their smart devices to accept credit cards, something the New York Times6 covered recently. All of these initiatives are including hooks for integrating loyalty programs into a single point, the wallet, and providing some loyalty program design capabilities for brands that deploy them. The value to the consumer is too compelling to ignore, a new, digital wallet that allows her to pay for anything, track all loyalty programs, redeem points, etc., from within a single app. The wallet-based programs from Google and Apple will be built on Near Field Communications (NFC), which is widely adopted outside of the US, and allows a consumer to simply tap their device on another NFC-enabled device to make a

BOB FETTERS INDUSTRY PREDICTIONS :: Its no longer IF MOBILE WILL BE THE DOMINATE CHANNEL both in and out of store for consumer interaction with a brand, but simply WHEN. :: EXPLOSIVE GROWTH OF TABLETS, and in particular small form tablets. 2013 just might be the year that e-readers and forked Android tablets go the way of Blackberries. :: NEW FORMS OF PAYMENTS continue to explode, from Square to Google Wallet to the recently announced Merchant Customer Exchange, backed by Walmart and Target among others.

iOS and Android Adoption Explodes Internationally. Peter Farago. The Flurry Blog: August 27, 2012 Stick a Google Shaped Fork in Barnes & Noble. Bob Fetter. Pluris Marketing: July 18, 2012 Google glasses are $1,500 and you cant have them. David Goldman. CNN: June 27, 2012 4 Native App vs. Mobile Web App: A quick comparison. JT Mudge. Six Revisions: July 11, 2012 5 Target, Walmart and Co.: Why leave mobile payments to others? Ryan Kim. GigaOM: Aug 15, 2012 6 PayPal Here Is More Than Just a Square Imitator. David Pogue. New York Times: July 19, 2012
2 3

Loyalty Management FOURTH QUARTER 2012




L oyalt y 360

We let them know that they have earned rewards via e-mail. This way we can communicate with them and tell them something that they are personally interested in, rather than just sending them a marketing message.
Mike Lynch, director of loyalty marketing and market research, Lettuce Entertain You

ettuce Entertain You has lowered the threshold for its loyalty rewards in order to improve communications with customers and drive more business into its 80-plus restaurants, most of which are located in the Chicago metropolitan area.

relevant the message, according to Lynch. The higher the percentage of relevant, opened e-mails, the more likely the diner is to revisit one of the restaurant groups locations. In addition, Lettuce Entertain You recently launched its mobile app: Lettuce Eats. The app provides convenience to its frequent diners allowing them to always have their account with them, redeem rewards and receive special personalized offers. Plus individual restaurants are utilizing mobile to provide gift cards, mobile coupons and mobile comp cards. Read more on mobile best practices in the inset on the next page. Frequent diners provide an additional value in that they are a good representative sample of Lettuce Entertain You customers, so their dining preferences, demographics and other information provide valuable marketing information for restaurant group executives, Lynch said. However, the loyalty threshold still had to be high enough for customers to perceive value in it, Lynch added. It cant come out as a discount for every meal; it has to come out as a reward for loyalty. But you cant set the threshold so high that guests cant visualize reaching it relatively quickly. The loyalty program itself had started

Chicago-area members of the restaurant chains Lettuce Entertain You Frequent Diner Club had received loyalty rewards once they had earned 360 points, resulting in a $25 credit. Now the threshold is 140 points for a $10 credit, in line with Lettuce Entertain You restaurants in other cities. Its a way for our frequent diners to earn rewards that much more quickly and to communicate with them in a relevant way that much more often, said Mike Lynch, Lettuce Entertain Yous director of loyalty marketing and market research. We let them know that they have earned rewards via e-mail. This way we can communicate with them and tell them something that they are personally interested in, rather than just sending them a marketing message. A company can judge relevant e-mail communications by tracking the percentage opened by customersthe higher the percentage of opened e-mails, the more


Loyalty Management LOYALTY360.ORG

TAKING THE LEAP From Plastic to Mobile



several years ago. Diners were rewarded with coupons when they achieved point thresholds. With more than 50 restaurants in the Chicago area, diners could quickly build up rewards. It was too expensive and too cumbersome to mail out stacks of coupons, so the threshold was set at $25, Lynch explained. With far fewer restaurants in other cities, the $10 threshold was much easier to handle. Lettuce Entertain You charges $25 for Diners Club membership, which includes a $10 credit that can be used on the next purchase. Blue level Lettuce Entertain You Diners Club members earn 1 point for each dollar spent, silver members earn 1.25 points per dollar, and gold members earn 1.50 points per dollar. Members achieve silver level status after spending $1,000 in a calendar year, and gold member status for spending more than $2,500. The status stays in effect for the remainder of the calendar year and for the following calendar year. The company changed to an electronic rewards system about three years ago, with credits going directly on loyalty cards instead of mailing coupons, laying the groundwork for the lowering of the threshold. But there were other marketing programs that took precedence, according to Lynch. For example, Lettuce Entertain You has recently enabled frequent diners to register their credit cards, so that loyalty points are automatically credited when the registered card is used for a meal or related purchase. The restaurant group has also started a co-marketing program with some Chicago area sports teams. L

successful customer loyalty program is a two-way street. The program owner rewards customers for desired behavior, in exchange for higher sales and repeat customer visits. Ultimately, loyalty is one of the strongest tools to influence and track customer spending. Communications seems to be the challenge with loyalty programs; did you know that 85% of those surveyed said that they havent heard a single word from a loyalty program since the day they signed up?1 Communicating with customers is a critical element of any loyalty program and traditional programs; however, traditionally for plastic and punch card programs the control has been placed in the hands of the customer leaving the program owner at the mercy of the customers whim. Mobile is the best method to establish a two-way communications channel with your customers and influence their spending behavior. In recent years, consumers have been trained to use their mobile handsets for more than just texting and talking. The proliferation of mobile applications, and specifically mobile banking, has increased consumer awareness, adoption, and confidence in using their handset to transact with businesses. In addition, consumers are trained to react to their handset, in fact 90% of text messages are read within three minutes of being delivered.2

Strong loyalty programs should make use of a variety of mobile tools in order to make the program simple and easy to use as well as convenient to the customer. Some tools that should be considered include: SMS text marketing (outbound and text-in) In-app messaging Geo positioning Click-on awards Mobile-enabled earn and redemption tools Single-use & perishable awards/coupons Multiple registration options: mobile, text in, web, & POS (no registration cards) Real time and geo targeted triggers for offers and messaging

Another reason mobile is perfectly suited for a loyalty program is because consumers react to immediate gratification, mobile satisfies this need. In fact, you are bound to see improved results when using mobile to open up a new channel for your loyalty program. When sending out promotions or coupons, consider the fact that Mobile coupons receive 10X higher redemption rates than print coupons.3 L

Doug is a seasoned executive with 24 years of experience in the financial services industry delivering innovative payment solutions to issuers, merchants and consumers around the world.
1 2 3

ACI Worldwide Study, Wakefield Research December 2010 Conversational Advertising, mobileSQUARED comissioned by SinglePoint, June 2010,



Financial Institutions, media and travel & entertainment are in full stride when it comes to reaching their respective customers via the mobile handset, retailers have yet to do so. We are seeing the beginning of this trend in 2012 with high adoption rates and significant transaction volume.

Loyalty Management FOURTH QUARTER 2012





I set up two email addresses as follows: 1. - to investigate what effect the keyword as part of the domain may have in the results. 2. - to test the impact of having the brand name in the domain. Heres a list of emails Ive sent myself using the first address and the results for each search: TEST #1: Subject: Best deals on BlackBerry phones Body: None Search: Black Berry Phones; smartphones Result: In both instances,whether targeting a branded term or the nonbranded term, my test email that contained the keywords in the domain or subject line showed up in the results (Fig. 1). Figure 1Keyword in domain or subject line with search term BlackBerry Phones populates Gmail results. TEST #2: For the second email I sent from I chose to omit the branded keyword from the subject line and move it to the actual body of the email. Subject: Weekly newsletter Body: find the best prices on blackberry phones Search: blackberry phones; blackberry prices; find the best prices on blackberry phonesExact body content; newsletter Results: With the exception of newsletter none of the search terms populated Gmail results in SERP. These searches demonstrate that the body content of the email has no impact on the results, whereas the mailbox prefix (e.g. newsletter@) does. TEST #3: Using the second email address,, which actually contains the brand in the subdomain, I sent the following email: Subject: Today onlythe best deals Body: None Search: blackberry; blackberry deals; best deals Results: As expected, all these queries resulted in the email messages showing up in my personal results (Fig. 2).

more personal

C ov a r i o

oogle released a field trial in August of this year for one of its newest features: displaying Gmail messages within personal search results. As with many of Googles recently added features, the net is buzzing with negative sentiment and resistance to yet another seemingly invasive skewing of search results. From an SEO and overall marketing perspective, however, the new feature is actually a positive one.
Figure 2Brand in subdomain with search term blackberry populates Gmail results. What was a little odd, however, was that an extremely generic query for a single term contained within the subject of the email still returned a result. (Fig. 3).

Almost a year after Google launched its SSL (Secure Sockets Layer) search for signed in users, SEO practitioners are still left bruised and licking their wounds. As a result of Google SSL search, Covarios SEO clients are reporting that on average between 26 and 36 percent of their Web traffic stems from withheld keywords. Those numbers are bound to increase quite a bit when the latest version of Firefox (with its 20 percent adoption rate) rolls out with built-in default Google SSL search. So, if we surrender to the fact that personalized search will eventually become the norm in terms of search engine results, this new Google feature provides companies with an opportunity to tie their email marketing and SEO/SEM efforts together quite nicely. It also incentivizes businesses to align their email communications with what really matters to its customers or followers. By optimizing and tailoring email campaigns around relevant keywords, companies increase their odds of staying visible to their customer base.

Figure 3With Generic query search today populates results. In the future, Google will probably omit displaying email results for overly generic matches, as those will surely provide no added value to the user.


Loyalty Management LOYALTY360.ORG

From: To: Subject: Best Laptop & Notebook Deals Today Message: Today only, were offering our best ever deals on new laptops and notebooks. Visit us here for more information. Share this email with your friends! Having a keyword, brand (or sub-brand) in the mailbox, subdomain or domain will get you in personalized results. Subject should contain relevant, high volume keywords that your business is targeting Body content should be relevant and supportive to the subjectinclude links back to the relevant pages on your site and the ability for your current customers to share the communicationthereby extending your audience.

sites you consequently visit by tagging users via a pixel or cookie. The underlying reason why such campaigns are effective is because they are so targeted and tailored to the individual user and his/her previous behavior or interaction with a site. The key is to know your customersexisting and potential.

Its really too early to say how Googles new feature will impact the world of SEO and email marketing since the algorithm determining what results are displayed seems fairly simple so far. As it currently stands, one key take-away is that email marketers should consult with their SEO counterparts to make sure each email-blast they send out contains a focused keyword target within the subject line of the email since the body content does not seem to have an impact on displayed results. The content of the email should naturally support the target keyword and offer users relevant information and links.

What does this have to do with Googles new feature you may ask? Check out the following scenario. Like many people these days, I tend to be a pretty price-sensitive traveler. I dont care too much what airline I travel with as long as it gets me to my destination safely at the lowest cost possible. Googles new feature experiments quite a bit with displaying flight data from itineraries found in Gmail, as well as flight information from various airlines. I get emails all the time from the various airlines Ive used in the past, but none of them seem to be using my previous behavior/purchases to induce a future sale. I travel to Miami at least twice a yearmost often these trips coincide with Christmas, Thanksgiving or some other holiday (i.e. Im pretty predictable). Yet there are no offers catering to that particular trend (Fig. 4):

n marketing there are two expressions weve heard at one point or another: Data is King and Content is King. Tweaking this a bit, Im willing to offer up a new expression: Data-driven Content is King.

Figure 4: The offers and tag-lines are too generic. Ive never been to Hawaii, and I have never browsed for a flight to Hawaiiso why am I being sent this email?

Apart from consulting with the SEO counterparts, marketers should try to gather as much data on their customers (existing and potential) from any and all data sources before putting together their email marketing content calendar. In marketing there are two expressions weve heard at one point or another: Data is King and Content is King. Tweaking this a bit, Im willing to offer up a new expression: Data-driven Content is King. What I mean by this is that far too many companies collect, analyze, and silo off data from any given sourcewithout contemplating how this data can be used to drive traffic for another channel. Its all about targeting and re-targeting. Were seeing this more often now where companies are using pages that have been browsed on a site or even search queries that brought you to a page to retarget display ads on

Wouldnt it make sense for airlines to be sending me emails for offers on upcoming trips to Miami? I took the liberty of sending myself an email on Deltas behalfwith the subject line Looking for Cheap Flights to MiamiFly Delta & Save. Notice, this subject line has also been optimized for SEO (Fig. 5):
KEYWORD [cheap flights to miami] [cheap tickets to miami] [cheap flight to miami] [cheap flights to miami florida] [cheap flights to miami]
Figure 5: Subject line keywords, for better SEO results.

LOCAL MONTHLY SEARCHES 6,600 1,300 590 390 110

continued on next page Loyalty Management FOURTH QUARTER 2012


Time to Get More Personal with Your Audience (continued)

So if Deltas original email (which was pretty well targeted to me) slipped through the cracks and I had ignored it that day, once I did start my research for flights to Miami (using the most likely of search queries), the results would look like this: Data has shown that although email user numbers, as well as email open rates, have steadily increased over the past, click-throughs have actually dropped. Judy Loschen, vice president of digital analytics at Epsilon, attributes this to the fact that There are just a lot more emails going out and consumers are less likely to click through if the email is not relevant and targeted. With Googles new feature, marketers have another shot at getting users to interact with an emailprovided it was relevant in the first place. So if nothing else remember to use your data to mold content that will stick. L

TARIQ CHARARAS INDUSTRY PREDICTIONS With Google constantly expanding its reach and audience with its products, the inevitable future is that PERSONALIZED SEARCH WILL BECOME MORE AND MORE PREVALENT. This means that everyones search experience will be uniquely tailored to their browsing history, their social circles and previous interactions with products and brandsespecially interactions that occur on one of Googles platforms. Googles goal is to deliver truly relevant content for each user, and it will be the marketers job to ensure the brand creates as many relevant touch points with its audience as possible.

The email that previously slipped by me is now being served up again through a Google search. Ironically, Googles internal flights feature shows Delta in an unflattering light with respect to pricing. With this email being served up under my personal results now, Im much more likely to investigate the offer and give Delta a fair shot rather than just clicking on the cheaper United flight from Googles list right off the bat.

Loyalty360_2012_3_Layout 1 12-03-30 10:16 AM Page 1 with his marketing and knowledge of the EMEA and APAC digital landscape

As a Sr. International SEO Strategist at Covario, Tariq combines his extensive technology skills to provide overarching SEO strategies for Covarios top international clients around the globe.

Dare to be different!
You dont have to settle for a me too program. Discover loyalty strategies that stand out. At Fairlane Group, its all about results!

Engaging People for Better Results Loyalty Incentives Recognition For more info, please contact blue 905-669-9194


Recent Industry Research

60% 65%
of US smartphone owners are open to receiving email promotions on their device on at least a weekly basis (Strong Mail Survey Aug. 2012)5 MOBILE of mobile phone users unsubscribe because the messages arent relevant (Vibes Mobile Consumer Report)5


of diners now say that they not only want, but expect your business to provide them information and deals via downloadable apps4


of organizations dont have the required capabilities to analyze highly unstructured data7 D ATA



of mobile phone users unsubscribe from mobile marketing updates due to too many messages (Vibes Mobile Consumer Report)5

33% 37% 35% 43%

say were still mass blasting yes, really!

vote LinkedIn as your most influential social media

of organizations believe that using information (Big Data analytics) will give them a competitive edge7

L O Y A LT Y 3 6 0

those of you that redeem points for aspiration items of you hoard your points for big ticket items
Not only will New Movers change brands, but theyre


of customers said they would become even more loyal to companies and brands that handle product recalls honorably and responsibly3 CUSTOMER SERVICE

2 to 3 times

more likely to purchase/ acquire or upgrade their products and services2

More than of [Telecom] Service providers indicate that improved customer experience management provides an opportunity to attract new business;




2/3 agreeing that it could improve their brand

image and nearly 6-in-10 confident that it will provide competitive differentiation (Study from Alcatel-Lucent and Heavy Reading)1

of consumers will stop doing business with you after a bad customer experience6

1 2 3 4 5 6 7

Britt, Phillip. Telecom Providers Plan to Increase Customer Experience Management Spending. Loyalty 360 Resources. 18 September 2012. Web. Epsilon. New Mover Report 2012: Epsilon Finds Brand Loyalty Tested When Consumers Move Loyalty 360 Resources. 27 September 2012. Web. The Relational Capital Group. Building Brand Loyalty In The Digital Age. Loyalty 360 Resources. 2 October 2012. Web. FuzeBuy - Jedlo, Nicole. Why Restaurants Need to Integrate Loyalty with Mobile. Loyalty 360 Resources. 28 August 2012. Web. MarketingCharts. Message Overload Causes Mobile Users to Unsubscribe From Updates 12 September 2012. Web. Empathica Baird, Andrew. Attention retailers: mystery shoppers are so yesterday The Queensland Times. 22 October 2012. Web. Britt, Phillip. Survey Shows Organizational Challenges with Big Data. Loyalty 360 Resources. 22 October 2012. Web.


Loyalty Management LOYALTY360.ORG


For three decades, Afnion Loyalty Group has been a pioneer in the loyalty and enhancement industries. We help our clients retain and motivate consumers while delivering tangible results and incremental revenue. We continually develop ground-breaking products found in almost every wallet in America.





Allegiance, Inc.

ost executives have always knownor at least been toldthat customer loyalty is the best path to long-term profitable growth. Today that knowledge is impossible to ignore with increased competition across industries, more power in customers hands, and fewer dollars flowing through the economy.
Enlightened leaders have responded by investing in better customer intelligence, recognizing that only a deep understanding of customers can sustainably fuel loyaltybuilding customer experiences. Interestingly, this increased investment hasnt gone to traditional market research. Its gone to faster, more frequent, and more focused intelligence that guides real business decisions related to loyalty. As an example, lets take a look at health information and dietary supplement provider Healthy Directions.

had customer data. It just wasnt adding value. As Kaplan explained, Tracking revenue gained by direct mail marketing campaigns wasnt telling us what we needed to know. And though we had some feedback to work with (from periodic market research surveys), we werent doing anything with it. We needed a formal voice of the customer (VoC) process that would gather feedback and other data, analyze relationships and trends, and help us figure out actions to strategically influence a customers decision to buy our products, Kaplan said. REAL TIME CUSTOMER INTELLIGENCE Rather than spend more money on old-school research services, Kaplan and the Healthy Directions team decided to invest in a customer intelligence software platform to handle multiple VoC activities and deliver results in real time. The team went from getting feedback about its products a few times a year to getting feedback every week. Weekly surveys cover tactical product considerations, such as clarity of instructions, as well as aspects of customer loyalty like likelihood to repurchase products and recommend products to friends. With real-time analytics built into Healthy Directions customer intelligence platform, Kaplan and her team quickly and flexibly analyze their new up-to-date data to find insights that they can apply in time to drive real results for the business. In one instance, Kaplan said, We scoured the feedback, ran the analysis, and the big AHA! was that customers repurchased if they noticed a (health) difference by taking the product or if they thought the product was helping them to prevent health problems in the future. ACTING ON INSIGHTS TO INCREASE RETENTION The Healthy Directions team then dug deeper to find out exactly how to capitalize on the opportunity to increase retention and revenue. For example, they analyzed open-ended customer comments with the platforms integrated text analytics engine to understand exactly how customers perceived health benefits associated with dietary supplements. In the end, this process led to products that better meet customer needs, better communicate customer value, and better drive repurchase behaviorin other words, better outcomes for both customers and Healthy Directions.

EFFORTS AT HEALTHY DIRECTIONS Facing a tough economy and rising customer acquisition costs, Healthy Directions executive team doubled down on customer loyalty. They appointed Julie Kaplan to the position of Executive Director of Customer Experience, and they put her on a mission to bring the customers voice to the forefront of the business and identify factors leading to product loyalty and repeat purchases. Like most firms, Healthy Directions already


Loyalty Management LOYALTY360.ORG

ELEMENTS FOR PROGRAM SUCCESS Thousands of companies are beginning to experience similar benefits by embracing timely, relevant insights across their organizations. Industry leaders from JetBlue to SAP now use next-generation customer intelligence software to improve customers experiences and increase customer loyalty. These efforts have already paid off with measurable ROI, including 10% increases in customer retention, 20% increases in repurchase rates, 60% reductions in negative word of mouth, and 800% increases in customer referrals. What do these successful programs have in common? Clear objectives for delivering customer and company value, strong program leadership with executive support, customer feedback and other data that align directly to business operations, formal processing for sharing and acting on findings, and a robust real-time customer intelligence platform. Executives at other firms with renewed commitments to customer loyalty should take a page out Healthy Directions playbook and get started by appointing a capable leader to drive change. L



REALIZE THAT CUSTOMER EXPERIENCE ISNT ABOUT DOING NEW AND DIFFERENT THINGS. ITS ABOUT DOING TRADITIONAL THINGS DIFFERENTLYAND BETTER. Customer intelligence efforts will adapt by becoming more aligned with and embedded in traditional business functions like marketing, sales, and service.

Andrew McInnes leads product marketing at Allegiance, which helps companies translate customer insights into actionable business intelligence using Voice of Customer intelligence (VOCi). Prior to Allegiance, McInnes spent five years at Forrester Research in the firms customer experience research practice.


Is your LOYA LT Y Supporting your



Chadwick Martin Bailey

Build out soft benefits that reflect the brand: Consider why your loyal customers are passionate about your brandwhy they choose to spend money with you and not your competitorsand incorporate supporting elements into your program. You can ramp up these I agree that if you manage a mature program, with a point or mile- connective tissue benefits as customer value increases. based currency, you need to ensure your program offers a relevant currency with a competitive earn and burn structure. This currency Consider unpublished surprise and delights: Instead of revampand the associated promotions are table-stakes; a requirement for ing the loyalty program and listing all benefits on the web site, invest both acquiring and retaining valuable customers. But ask yourself in delivering valuable customers an item theyd value on a one-time this question: is a loyalty program where your primary focus is on basis. The benefits are clear: you create good will with your most the currency (and its economics) really supporting your customer valuable customers. Youre also not raising the bar, adding to the arms race or increasing expectations. And, in todays connected loyalty strategy? world, some of these private gestures will support positive In our opinion, real loyaltythe kind that spurs evangelization, comments on social-media channels. incremental trips/purchases, paying a price premiumdoesnt come from delivering points. Your customers dont buy from you because you give them points. They choose to buy from you because of the distinct value provided by your brand. The key prob- Clients such as the Hilton Family of Hotels, Royal Caribbean, MTV, and lem with enhanced focus on program currency is that points and Avis/Budget Rent-a-Car frequently call upon Judy Melanson for the experience, miles dont reflect your brand or its unique value propositionand insight, and focused use of market information she employs to drive strategy on their highest visibility research projects. wont engage your passionate customers.

ecent articles on the new economics of loyalty programs and the choices program managers face may be important to read, but many of them leave me bewildered. These articles warn that in the new loyalty environment, credit card companies will play an increasingly disruptive force as members seek reward currency that offers them more options. They encourage executives to restructure the currency to ensure its dominance, and some authors argue that cash-strapped firms should divest their loyalty programs (a la Air Canada) to generate revenue for the company.

So how can you ensure that your loyalty program IS supporting your loyalty strategy? Relevant communications: Reflect your knowledge of your members behavior and preferences in your program communications. I fly out of Boston: why does American Airlines regularly send me promotions on flights out of Chicago?


Loyalty Management LOYALTY360.ORG

KIMPTON HOTELS One hotel chain that excels at the special touches is Kimpton Hotels. The small boutique chains unique, fun, and socially conscious brand promise infuses everything, from their rooms to their website, to their loyalty programInTouch, and their elite loyalty program Inner Circle. Their InTouch program offers traditional perks like free nights, but the preferences of loyalty members also get recognizedthe hotels customize amenities (like pillow, newspaper, mini-bar) based on guests stated preferences. The rewards are more valuable for the Inner Circle membersthose who stay 15 times within a calendar yearthey include direct access to the CEO along with the more typical complimentary upgrades. NEIMEN MARCUS While hotels have multiple touch-points for sharing their brand with their guests, retail stores can face more of a challenge. But Neimen Marcus five tier InCircle program clearly demonstrates an understanding of why loyalty program members choose to shop with them. The programs benefits reflect their unique brand proposition and reflect the stores deep understanding of their target customer affluent shoppers who value luxury and a high-end shopping experience. Neimens rewards include perk cards which can be used for dozens of services including alterations, in store dining, monogramming and shoe repair. Rewards highlight exclusivity as well as the more traditional point based rewards. AMAZON With truly vast amounts of data, Amazon could be content with offering suggestions based on previously purchased or viewed itemsits no small thing to show your customers you know what interests them. But Amazons rewards program goes beyond the data warehouse, and while Amazon Prime isnt free, the free or reduced shipping, and access to content, the Kindle lending library, where Kindle owners can borrow and read books for free, are powerful reminders of the value of the brand and strong motivators to encourage frequent shoppers to return again and again. L


MAP CUSTOMER SEGMENTS PATH TO PURCHASE to understand opportunities for further engagement, and tear down barriers that prevent engagement. :: THINK OF THEIR LOYALTY MEMBERS ACROSS THE WIDE RANGE OF TOUCH POINTS social, online, email, in-store and talk to them as one complete, not fragmented, person.

Choosing is hard. Make payment easier.

Finding the perfect outfit may take time, but purchasing can be fast and easy with prepaid payment cards. Give your customers more convenience, and youll reap the benefits. With HP Prepaid Card Services, you can introduce an array of global, competitive products that manage multiple currencies, provide real-time visibility into usage, and support many industries. And youll learn more about your customers buying habits, so you can grow marginsand loyalty.

Copyright 2012 Hewlett-Packard Development Company, L.P.

Loyalty Management FOURTH QUARTER 2012




S u n G a r d


Loyalty 360 Interview with M I L I S T A A N D E R S O N

ilista Anderson is chief customer officer for SunGards energy business, leading the organization in its voice of the customer program and retention strategies.

support their growth initiatives. Im happy to say that our customers see SunGard as a trusted advisor, a distinction we highly value, and look to us as a partner for solving their business needs.

Ms. Anderson has more than 20 years of experience in the design, WHAT ARE YOUR CUSTOMERS SAYING ABOUT YOUR BRAND/ development and delivery of systems, processes and organizational SERVICE OFFERING? HOW IS THIS DIFFERENT THAN IT MAY infrastructures within software development across diverse indus- HAVE BEEN WHEN YOU STARTED IN YOUR POSITION? tries, including energy, financial services, manufacturing and educa- A key takeaway from my meetings with SunGards customers is that tion. She also has expertise in entrepreneurial business practices in they have confidence that our products meet their needs with reliinsurance, health care and professional able and accurate results. While our services. She specializes in designing and commitment to customer satisfaction has improving operational models that get always been there, they have taken special measurable results. In an interview with notice of our voice of the customer program, Loyalty 360, Milista shares her insights which gives them a channel for direct feedand perspectives on creating the ultimate back on future functionality and services. customer experience, the value of VOC WHAT DO YOU BELIEVE IS KEY IN feedback and a holistic approach to CREATING THE ULTIMATE CUSTOMER customer engagement. EXPERIENCE?

WHAT WOULD YOU LIKE TO SEE CHANGE IN THE MARKETS APPROACH TO THE CUSTOMER EXPERIENCE, ENGAGEMENT AND LOYALTY? The customer experience will be such a differentiator for consumers in the future, and almost every day I discover that yet another company has a professional focused on customer engagement and loyalty. However, if this discipline is to develop, these roles need to be better publicized, including within the customer experience sector. I co-founded a Houston chapter of the Customer Experience Professionals Association with the aim of advancing the practice of customer experience. SunGard hosted the first meeting in August.

The key to creating the ultimate customer experience is listening, acknowledging and responding.

The key to creating the ultimate customer experience is listening, acknowledging and responding. Customers are human and want to be heard. Our solutions are an integral part of their business, and they use them every day on the job. They want to know their suggestions were considered, and they want to receive a response. I also believe in taking a holistic approach to customer engagement that covers everything from the sales process and contracts to onboarding, installation and day-to-day support. And our customers appreciate that SunGard has a chief customer officer to advocate for them, whether they signed up yesterday or 20 years ago.

IS YOUR EXISTING CUSTOMER STRATEGY FOCUSED MORE IS THERE ONE PROCESS OR CHANGE YOU HAVE MADE INTERNALLY HEAVILY ON ACQUISITION OR RETENTION? WHY IS THIS THE THAT HAS ENHANCED THE EXPERIENCE INDIVIDUALS HAVE WITH MOST VALUABLE APPROACH AT THIS TIME? DO YOU SEE THIS YOUR PRODUCT / SERVICE? FOCUS CHANGING WITHIN THE NEXT COUPLE OF YEARS? The feedback on our voice of the customer workshop series has been SunGard doesnt see this as an either/or strategy. Both acquisition extremely positive. It provides a platform for customers to speak and retention are important for growth. In fact, as chief customer directly to the people behind the solutions about what it means to officer, one of my priorities is to ensure the satisfaction of our exist- have a good customer experience. Our employees, from developers ing customers. Their business needs are changing, primarily because to salespeople to management, are required to participate. of regulatory requirements, and we want to make sure that we


Loyalty Management LOYALTY360.ORG

This is a great way to provide more value to the customer and help ensure that the circuit of communication is completed. Customer feedback has led to plans for some exciting tools in 2013. One is a wiki-like tool that will let customers search a database of existing issues or problems and get answers directly from other customers or SunGard experts. IS THERE ONE PROCESS OR CHANGE YOU HAVE MADE EXTERNALLY THAT HAS ENHANCED THE EXPERIENCE INDIVIDUALS HAVE WITH YOUR PRODUCT / SERVICE? One of my goals is to meet more customers face-to-face, wherever they are in the world, and talk about how I can do more to help them. I let them know what were doing and find out what is working and what we need to do to improve the overall process. This is fed straight back to the account team and the chain of command. The feedback can lead to a tactical change. For example, SunGard has improved its software upgrade services by providing them remotely rather than onsite, which is more efficient. But were also focused on systemic change. Every month I analyze the findings from these meetings to identify not only tactical changes but where we need to reallocate resources or set strategic goals to provide a better customer experience. And when we complete an item on the list, we tell the customers and explain that it came from their feedback. That completes the loop and helps us provide value and consistency that our customers not only demand but deserve. L

MILISTA ANDERSONS INDUSTRY PREDICTIONS :: Third party analysts and boutique firms will ramp up their efforts to educate CEOs and business owners on the importance of having a DEDICATED EXECUTIVE :: More technology firms and retail providers will add to their ranks. :: In the US, there will be at least one major VOICE-OFTHE-CUSTOMER REACTION to a providers announcement of a change in service, causing the provider to reverse its decision. :: BIG DATA will play a big role and companies will start to explore customer experience tool providers who can integrate and interpret disparate sources of customer data. :: CUSTOMER EXPERIENCE, AS A DISCIPLINE, WILL CONTINUE TO GROW, but it will take a very long time to organize a standard body of knowledge. Its still immature and only loosely confederated, but a few key players are laying a good foundation for a future state, similar to project management, accountancy, etc., complete with certifications and industry-validated credentials.

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or years companies have implemented employee engagement and incentive programs that largely focus on a do this, get that reward strategy. What happens if a company challenges this norm and places an emphasis on what appeals to and motivates each individual? Comprehensive engagement programs that are grounded in neuroscience can equip organizations to better understand, enable and motivate their workforces. Organizations often identify knowledgeable, productive and supportive employees, but fail to acknowledge individual motivational drivers, a key element of employee satisfaction. By understanding people and their values, theres a greater chance of developing true loyalty. For instance, The HON Company, a leading office furniture manufacturer based in Muscatine, Iowa, has successfully operated a channel incentive program for nearly 20 years to reward dealers and dealer sales representatives (DSRs). After researching trends with incentive programs, Stanley Askren, the chairman and CEO of HNI Corporation, HONs parent company, realized the need for a refreshed loyalty program that recognized and rewarded each sales representative based on what personally motivated them. Stanley Askren posed a question to his team, I am a customer for life for one airlinehow do I get our DSRs to be HON DSRs, for life?

The HON brand is the essence of our strategy. The HONORS program helps us to connect in a targeted way to our most loyal DSRs
Shelley deSilva, vice president of marketing at HON

MIKE SPELLECYS INDUSTRY PREDICTIONS One key trend in channel loyalty that continues to gain popularity is VIEWING
CHANNEL PARTNERS AS PEOPLE WITH UNIQUE NEEDS. Companies that view channel relationships from the partners point of view, and concentrate first on what partners value as people can better determine a way to benefit from the relationship. CREATING PERSONALLY

Through a partnership with Maritz Motivation Solutions, HON developed a better understanding of sales representatives lifetime value. Maritz developed an approach called DSR for Life, a process that identifies and segments sales representatives based on data that determines their lifetime value. By carefully considering involvement and accomplishments of DSRs, HON could predict the best and most engaged representatives over time, so marketing budgets could be targeted to create the highest return. The HON brand is the essence of our strategy. The HONORS program helps us to connect in a targeted way to our most loyal DSRs, making HON the brand that they prefer to sell, while rewarding them for their efforts, added Shelley deSilva, vice president of marketing at HON.

creates the greatest long-term benefits. EMPHASIS ON PARTICIPANT CENTRICITY will develop the win-win.



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TOP TIPS FOR IMPROVED CHANNEL LOYALTY: Understand your channel reps individual values and what is important to them. By doing so, you can speak to each of them in a language that moves them. Offer your channel reps appropriate incentives that are in line with their values, something that will increase their motivation. Recognize and reward brand loyalty and advocacy in your channel reps regularly through effective communications and frequent feedback.

opportunity to purchase their own merchandise based on performance tier. The top 50 DSRs and their guests earn an incentive trip accompanied by a recognition ceremony. Thanks to the tiered structure, targeted impactful communications strategy and lifetime value modeling, HON HONORS exceeded preliminary program objectives. In the first year, DSR enrollment increased 10 percent with a 13 percent increase in sales. All tiers increased 100 percent in average and total sales. Employee lifetime value improved significantly, with a return on investment value of nearly three to one. Many of HONs DSRs have regularly moved up the tiers in the last year. What can other organizations learn from the HON HONORS program? An engaged employee or sales partner can be your companys best asset, especially in the way they serve customers, anticipate needs and act as brand advocates. If companies start to better understand its people and individual motivational drivers, they will start to see greater employee retention and deeper loyalty overall. Its time for talent leaders to give up on one-size-fits-all recognition and begin paying closer attention to the individuals who are contributing to success. L

This innovative approach drives deeper engagement, helps predict future profits, and provides enhanced reward and recognition offers, while at the same time identifying high-value and at-risk representatives. The program also created a brand community that let the sales channel regularly interact with HON. Another key differentiator of the HONORS loyalty program is the tiered structure under which participants earn rewards and recognition. DSRs were grouped in tiers based on prior program performance. As sales representatives grew into a new tier, their status grew within the organization, earning them additional perks and privileges. The program offers flexibility, giving participants the

Mike Spellecy is the Corporate Vice President and Managing Consultant at Maritz. With 30+ years of experience, Spellecy was instrumental in the development of Channel HD, Maritz patent-pending approach to creating engagement and true loyalty among Channel representatives.


5 Ways to Tackle
Maintain Brand Loyalty




involves looking less at call volume and more at who is calling whom; it requires a lot more complex usage of basically the same data. The telcos who are doing it needed a more sophisticated big data solution to make it work. SENSE AN OPPORTUNITY Sensor data of all types has dramatically plunged in price and is spitting out a gold mine of useful data. For example, one auto insurer has created a unique loyalty promotion by mining data from sensors to improve sales. It offers drivers the opportunity to place a sensing device in their cars in exchange for differentiated pricing. The sensor

rand loyalty experts are often the most data-savvy individuals at a company. So the discussion of big data might seem like old news to you. It shouldnt. The simple calculations that have driven loyalty programs are about to become old news. Staying abreast of the rapidly evolving big data landscapeincluding ways to crunch data faster, or in more complex ways, and at the most reasonable costis critical.

We still come across companies that are skeptical of big data because they associate it with the ground-breaking work of companies such as Google and Facebook who, lets be honest, could throw can detect speed, hard brakingeven if the insured person has been a legion of engineers at any problem to program their way out of it. totally honest about how much driving they do. Suddenly, there is a Most companies dont have those resources. But the solutions way to find good driversand give them a loyalty-inducing discount supporting big data are maturing rapidly enough to assist companies without relying strictly on historical records (e.g., claims data). But, with much more modest budgets. The story of the next few years will it also involves sifting through data that is of a magnitude greater be how seamlessly big data comes to be used in the enterprise. Here than the company has ever dealt with before. are a couple of ideas for increasing your organizations maturity level EXPERIMENT WITH MORE DATA SOURCES in this area. You need to branch out from using just the results from a loyalty program along with some basic demographic data. Retailers, try DEFINE BIG DATA FOR YOUR ORGANIZATION A good working definition of big data: Its when the data you want to incorporating weather data to see if you can get more accurate store work with reaches a volume or complexity that puts it outside your packs sent out to reduce your markdowns and increase the speed in comfort zone. In the loyalty world, a good example comes from the which you turn over goods. Grocers, do you know the average size of telco industry. When wireless carriers first began trying to figure out your customers cars and how that might influence trip frequency or which customers might be on the verge of bolting to another carrier, their likelihood to make high-volume purchases? they looked at measures that were fairly crude and easy to mine EMBRACE HADOOP AND DISTRIBUTED COMPUTING: the names and numbers of subscribers who were using fewer ITS NOT A FAD minutes than they had previously. That particular measure is not Buying one big, potent computer is a thing of the past. Distributed producing the ROI it once did, so today leading telcos are using data architecture using open source software like Hadoop is key to workto find influencersthe customers who influence their friends to sign ing with big data quickly and cost-effectively. Distributed architecup with a specific carrier or for a certain plan. This type of analysis ture lets you solve problems with the divide-and-conquer approach.

A good working definition of big data: Its when the data you want to work with reaches a volume or complexity that puts it outside your comfort zone.


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The most iconic retail brand in the US is using Hadoop because it helps the retailer deal with its exponentially growing data. Moving forward, keep your eyes on Spark cluster computing. It is showing a lot of promise. DONT GET TRAPPED IN THE VALLEY OF DISILLUSIONMENT 2012 has been a year of big data experimentation for a lot of companies. And, yes, some projects didnt turn out quite like youd planned. But itll happen. In the pre-big data era, there was a retailer that spent most of its time just trying to organize its data in order to send out sales promotions, Web offers and catalogs. With high-performance analytics, that retailer is now personalizing catalog offerings like never before; selecting new store locations and estimating those store firstyear sales; choosing up-selling opportunities that increase profits; and scheduling promotions to drive sales. In an economy that has been tough on brand loyaltythis company is succeeding in this very rough economy. Are you? L

PAULT KENTS INDUSTRY PREDICTIONS :: STREAMING DATA from gadgets, cars and other devices will become an even bigger and more important data source. :: SOCIAL DATA will be used to make important business and policy decisions, not just for marketing and sharing information with friends. :: The industry will better distinguish between BIG DATA BI AND BIG DATA ANALYTICS. Neither is better than the other; but, companies will need to understand which is best suited for their business. :: A HADOOP CLUSTER will become considered a core element of a companys analytics platform. :: NOSQL people will acknowledge the utility of a general purpose table-oriented query language, and SQL people will agree that relaxing some tenets of the relation model can bring huge advantages to other dimensions of data management problems.

Paul Kent is Vice President of Big Data initiatives at SAS. He spends his time with customers, partners and SAS research & development teams discussing, evangelizing and developing software at the confluence of big data and high performance computing.


Loyalty Reads
Outside In: The Power of Putting Customers at the Center of Your Business
Harley Manning and Kerry Bodine
New Harvest | August 2012

What simple innovation brought billions in new investments to Fidelity? What basic misunderstanding was preventing Office Depot from achieving its growth potential? What surprising insights helped the Mayo Clinic better serve both doctors and patients?

experience is the only sustainable source of competitive advantage. But how to excel at it? Based on fourteen years of research by the customer experience leaders at Forrester Research, Outside In offers a complete roadmap to attaining the experience advantage. It starts with the concept of the Customer Experience Ecosystemproof that the roots of customer experience problems lie not just with customer-facing employees like your sales staff, but with behind-the-scenes employees like accountants, lawyers, and programmers, as well as the policies, processes, and technologies that all your employees use every day. Identifying and solving these problems has the potential to dramatically increase sales and decrease costs.

The solution in each case was a focus on customer experience, the most powerfuland misunderstoodelement of corporate strategy today. Customer experience is, quite simply, how your customers perceive their every interaction with your company. Its a fundamental business driver. Heres proof: over a recent five-year period during which the S&P 500 was flat, a stock portfolio of customer experience leaders grew 22%. In an age when customers have access to vast amounts of data about your company and its competitors, customer

Based on fourteen years of research by the customer experience leaders at Forrester Research, Outside In offers a complete road map to attaining the experience advantage.

Dr. Kenneth R. Thompson, Dr. Ramon L. Benedetto, Thomas J. Walter with Molly Meyer
Greenleaf Book Group | October 2012

Its My Company Too! How Entangled Companies Move Beyond Employee Engagement For Remarkable Results.

Create a Brand that Inspires: How to Sell, Organize and Sustain Internal Branding
F. Joseph LePla and Wolfgang Giehl
Author House | May 2012

Providing deep insight into eight award-winning, marketleading companies, Its My Company Too! explores how these highest-performing organizations develop a unified drive for excellence and provide a path to world-class financial and customer-focused success. Combining archival research, interviews, award applications, company statements, financial information, personal experiences, leadership strategies, and much more only retrievable through a very intimate experience with each organization, these eight companies opened up their minds and souls to this study to share exactly what it takes to become entangled. The authors have also included their own empirical data and evidencebased research with the research of other great scientists, sociologists, business leaders, and professors, providing both academic and application geared incentives. Using this data, they have woven company stories into each chapter, illustrating both the research principles and practical outlets for each topic. Each chapter unveils one companys strengths, simultaneously revealing one piece to the books puzzle. At the end, youre left with the full puzzle, nine pieces thatwhen put together make up a complete, entangled organization.

New rules of branding: The insiders take in their best practice study, Create a Brand That Inspires: How to Sell, Organize and Sustain Internal Branding, co-authors Wolfgang Giehl and F. Joseph LePla lay out a framework for effective brand management that balances inside-out and outside-in brand strategies. Using the organizing principle of internal branding, the book offers a set of practical and detailed new rules for how business managers and CEOs can use a combination of intrinsic company value, culture and social media to build long-term competitiveness. This best practice study includes 16 international case studies complete with photos and graphics, interviews and examples from a wide range of industries. These benefit from Giehl and LePla, who have integrated a European and American view of branding resulting in a unique perspective on how to successfully develop and manage internal branding in a global setting.


Loyalty Management LOYALTY360.ORG

The ultimate guidebook to brand advocacy.

PORTER GALE, former VP of Marketing, Virgin America

Brand Advocates: Turning Enthusiastic Customers into a Powerful Marketing Force

Rob Fuggetta
Wiley | July 2012

Do You Know Who Your Brand Advocates Are? Brand Advocates are your most loyal, passionate, and engaged customers, and your best marketers. They dont just buy your productsthey sell your products for you. Brand advocates tweet, blog, and Yelp about you; they praise you with five-star reviews on Amazon and TripAdvisor; they talk you up in social networks, online communities, and over coffee; and they defend you from detractors. Do you know who your brand advocates are? Are you systematically leveraging them to get more brand and product recommendations as well as drive sales? If youre not, youre missing the most powerful opportunity to turn likes into leads and social media into sales. Brand Advocates by Rob Fuggetta teaches readers how to turn enthusiastic customers into a powerful and sustainable marketing force. Through a step-by-step playbook and real-world examples, readers will learn exactly what it takes to build and activate an Advocate Army, from identifying advocates to energizing them and tracking results.

By following this strategic and sustainable approach, readers will be able to: Discover who their brand advocates are and what makes influential customers tick Create and grow an advocate army on digital, social, and mobile channels Reward brand advocates by giving them what they crave most Measure results and ROI from advocacy programs

Testimonial: Safelite has seen star ratings on leap from 2.35 to 4 stars after asking our advocates for reviews. The average rating from our advocates is an impressive 4.9 out of 5 stars. This success earned Safelite several mentions in Fuggettas book. Page 193 shares how Safelite is highlighting customer testimonials online. Melina Metzger, Safelite AutoGlass

Conversion: The Last Great Retail Metric

Mark Ryski, founder and CEO of HeadCount Corporation
AuthorHouse | June 2011

A retail brand is built from the cumulative effects of its shoppers experiences over time, making learning from these experiences a strategic priority for retailers in order to drive business value. Converting customers into

buyers is the first step in creating a sustained partnership that results in value for all. The strategies introduced in this book will help retailers of all sizes and categories convert their customers experiences into future buyers.

The Customer Experience Edge: Technology and Techniques for Delivering an Enduring, Profitable and Positive Experience to Your Customers
Reza Soudagar, Vinay Iyer, and Volker Hildebrand
McGraw-Hill | September 2011

Globalization and advanced technologies The Customer Experience Edge explains how to combine strategy, have given ever greater power to the person leadership, organizational change, and technology to: who decides if your business will succeed or Develop products and services that are highly valued by customers failthe customer. Whether your company Form bonds that keep clients from turning to competitors serves consumers or other businesses, you Transform customers into your best advocates can no longer compete on price and quality alone. To gain profits and market share, you have to deliver an experi- Its a new world of business, and customers are keenly aware that their loyalty is valuable currency. The Customer Experience Edge gives you ence that makes customers want to come backand that sets you a cost-effective, sustainable way to provide an unforgettable experiapart from the competition. You need to seize The Customer ence that builds loyalty and turns it into real, measurable profits. Experience Edge. Drawing on over sixty years of experience in shaping customer centric strategies and technologies for leading companies, three innovators bring you practical and proven ways to create your customer experience programs and overall business strategies. The key is to strike a balance between programs that are effective but prohibitively expensive and programs that fail to dedicate enough resources to be effective. In the middle ground lie the tools that everyone overlooksfoundational and disruptive technologies. These are the authors main fields of expertise, and these are what make the customer experience profitable.

To gain profits and market share, you have to deliver an experience that makes customers want to come backand that sets you apart from the competition.

Loyalty Management FOURTH QUARTER 2012



President of Pitney Bowes Software

s President of Pitney Bowes Software, John OHara brings 28 years of experience in the high tech industry. John led Pitney Bowes Business Insight (PBBI)s expansion strategies in Europe, The Middle East, Africa and Asia Pacific (EMEA) focusing on key vertical markets across these geographies to best serve its global customers. During his career John has lived in London, Johannesburg and Paris and held leadership roles at top companies including: Enterprise and Partner Group (EPG) for Microsoft UK; Pivotal Corporation; Lotus Development Group and IBM. Lets get to know the man Behind the Brand
WHAT IS YOUR CUSTOMER ENGAGEMENT & EXPERIENCE PHILOSOPHY? The game has changed fundamentally. Excellent customer service is no longer a differentiator, its now a qualifier. You cant even get into the race without it. For an organization to stand out it now needs to be customer obsessed. WHAT WOULD YOU LIKE TO SEE CHANGE IN THE MARKETS APPROACH TO THE CUSTOMER EXPERIENCE, ENGAGEMENT AND LOYALTY? Id like to see marketers send out far less unwanted mail, both physical and digital, and replace it with more meaningful, relevant content to target individuals. Consumers are drowning in a sea of irrelevant messages, but it doesnt have to be this way. If companies concentrate on sending relevant messages that are likely to drive action, we can all build stronger relationships with our customers and drive greater engagement. WHAT IS YOUR PERSONAL MOTTO? Fortune favors the brave. You always regret things that you havent done more than the things that you have done. WHAT IS THE GREATEST THING YOU EVER LEARNED AT SCHOOL? You dont get what you deserve. You get what you fight for. WHICH TALENT WOULD YOU MOST LIKE TO HAVE? I would love to be able to speak multiple languages. I am fascinated by the musicality and diversity of language, and I find it sad when I visit somewhere and I cant communicate as fluently as I would like. IF YOU WERE NOT DOING WHAT YOU DO TODAY, HOW WOULD YOU BE SPENDING YOUR TIME? This is a hard question to answer as I really enjoy what I do. The global aspect of my role over the years has taken me to some beautiful and exciting parts of the world, and there are very few major countries that I havent been to. But, if pressed for an answer, Id say that a creative role in real-estate development would have been of interest. The idea of investing in some land and developing beautiful homes really appeals to me. WHAT INSPIRES YOU? The thing that inspires me most is people who have overcome substantial adversity to succeed against all the odds. This seems particularly top of mind having watched some of the Paralympic


Loyalty Management LOYALTY360.ORG

WHAT JOHN IS RECOMMENDING I have a few books that I am reading on my Kindle right now, but my biggest recommendation at the moment would be Imagine: How Creativity Works by Jonah Lehrer. It is largely all about the principles of innovation. It looks at organizations that have imagined the seemingly impossible and gone out and actually achieved it.

WHEN ASKED WHO WOULD PLAY JOHN IN THE FILM OF HIS LIFE, HE REPLIED, As an Irishman, Id have to go for a compatriot in Liam Neeson. Hes played such a diversity of roles, Im sure he could handle portraying me.

IN HIS CAREER, JOHN IS MOST PROUD... that I have taken a chance on people when conventional wisdom might have ruled them out for a certain position or task. It gives me a great sense of pride to have changed someones life by giving them an opportunity that they then excel at.

Games taking place in London. You cant help but be moved by the courage, bravery and perseverance of the athletes who are overcoming big hurdles to perform in front of the world and do incredible things.

IF YOU COULD INVITE 4 PEOPLE TO DINNER (PAST OR PRESENT) WHO WOULD THEY BE? I was fortunate enough to meet Nelson Mandela when I worked in South Africa and he would be top of my list for his wisdom. I also met Bill Gates when I worked for Microsoft, and I think his futuristic WHATS YOUR FAVORITE SOCIAL vision and philanthropic drive would MEDIA OUTLET PERSONALLY? FOR YOU DONT GET make for an incredibly productive MARKETING? conversation with Mr. Mandela, so Personally Im an enormous Facehe would get an invitation for sure. I W H A T Y O U D E S E R V E . book fan and have enjoyed watching would want to bring some levity to the business and the platform grow the conversation as well though, and over the years. I actually visited Y O U G E T W H AT Y O U as a huge Monty Python fan, Id love their headquarters very recently to have John Cleese at the table. and was extremely impressed by FIGHT FOR. And my final guest would be Elizathe operations and the office culture. beth Taylor, for sheer glamour and to I also like Twitter for marketing as stir things up a bit. well. When combined with location awareness, Twitter can be a very powerful tool for marketers in WHO WOULD PLAY YOU IN THE FILM OF YOUR LIFE? terms of providing tailored offers, but also in ascertaining consumer As an Irishman, Id have to go for a compatriot in Liam Neeson. Hes sentiment and response in a given area. played such a diversity of roles, Im sure he could handle portraying me.

WHAT RECENT ADVANCEMENT IN TECHNOLOGY ARE YOU MOST EXCITED ABOUT? Hologram and multi-dimensional technologies. At a recent technology show I could see that a lot of the big technology companies are racing to create developments in this space. The idea of conjuring a multi-dimensional image for the purposes of entertainment or communications, with no need for the old fashioned 3D goggles, is extremely exciting. I cant wait to see how these concepts are developed, both creatively and commercially.

WHICH BOOK(S) ARE YOU CURRENTLY RECOMMENDING? I have a few books that I am reading on my Kindle right now, but my biggest recommendation at the moment would be Imagine: How Creativity Works by Jonah Lehrer. It is largely all about the principles of innovation. It looks at organizations that have imagined the seemingly impossible and gone out and actually achieved it.

WHAT ARE YOU MOST PROUD OF IN YOUR CAREER? I consider myself to be a risk taker, and looking back, Im very proud that I have taken a chance on people when conventional wisdom might have ruled them out for a certain position or task. It gives me a great sense of pride to have changed someones life by giving them an opportunity that they then excel at.

continued on next page Loyalty Management FOURTH QUARTER 2012


Behind the BrandJohn OHara, Pitney Bowes Software (continued)

WHY DO YOU THINK WHAT YOU DO (OR WHAT LOYALTY MARKETERS DO) MATTERS? Broadly, Id say that what we all do matters because marketers bring organizations and people together and create and sustain relationships. The biggest part of that for Pitney Bowes Software in particular is our mission to rid the world of spam and make communications more personalized and relevant. When I look at the 19 trillion e-mails that were sent last year and see that 97.3% were spam, alongside the horrifying number of e-mails pouring into my own inbox, Im convinced we can do better. WHAT CAN WE EXPECT FROM PITNEY BOWES SOFTWARE THROUGH THE REMAINDER OF 2012 AND BEYOND? One of our big focuses is to show marketers that there are advanced software packages out there that can help them build lifetime relationships with customers. We want to help them target the right customers, with the right messages, at the right time and using the right channel. A major step for us is convincing marketers that Pitney Bowes is more than just mail. WORDS OF ADVICE FOR A NOVICE LOYALTY MARKETER? Put yourself in the shoes of the target customer and think carefully about how they are going to react and what the implications are.

WHAT GREAT MARKETING IDEA DO YOU WISH YOU HAD COME UP WITH FIRST? JOHN, WHAT ARE YOUR INDUSTRY PREDICTIONS FOR TOP Facebook for sure. It changed the game on how people and organiza- TRENDS IN 2013? tions connect with each other online and share information. It might 2013 will be the year the marketing community actually tries to address not have been conceived initially as a channel for marketing, but it the opt-out issue. To do this, marketers are going to need to adapt and sure has had enormous implications. find new ways to increase the relevance of each and every communication they send. HOW HAS CONSUMER INSIGHT DIRECTLY INFLUENCED YOUR Companies will accelerate their efforts to capture the benefits of big WORK? Put quite simply, the palpable frustration that consumers are show- data in marketing. One of the highest potential areas of ROI is in nurturing in response to the overflow of spam has influenced myself and ing existing customer relationships more carefully. L the team here to try and help companies hone their communications strategy using predictive analytics.


What is your favorite word? What is your least favorite word? What turns you on creatively, spiritually, or emotionally? What turns you off? What is your favorite (PG-13) curse word? What sound or noise do you love? What sound or noise do you hate? What profession other than your own would you like to attempt? What profession would you not like to do? If Heaven exists, what would you like to hear God say when you arrive at the Pearly Gates?

Magnificent Cant A Summers Day Complaining Ill Have To Go With One From The Other Side Of The Atlantic: BOLLOCKS Laughter Police Sirens Artist Tax Professional Youre Not Due Here For Another Ten Years, John

*Inspired by James Lipton on Inside the Actors Studio we asked John to share his quick fire response to the questions originating from the French series,Bouillon de Culture hosted by Bernard Pivot.

he thing that inspires me most is people who have overcome substantial adversity to succeed against all the odds.


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we'reheretoguide youalongtheway.

loyalty is a journey.

Looking to build your organization's engagement and loyalty strategies? Loyalty 360 makes it easy to find a partner with the capabilities to help you reach your goals. Want to be a part of the largest engagement and loyalty supplier directory? For only $2500/year, sign up to be listed with your own customizable member page. Find tools, tips, and connect with your peers to find the answers to your loyalty questions at





Visit to read all of the latest expo-related articles and news coverage including:
STATE OF THE INDUSTRY: Engagement & Experience Expo Lessons and Trends Loyalty marketers are facing a host of opportunities and challenges as they look to build or maximize the potential of their programs including: Big Data; Mobility; Omni-Channel; Program Evolution & Success Measurement. Proactive Customer Experience Management Provides Benefits Proactive customer experience management throughout the lifecycle is critical for companies seeking to build customer loyalty in todays marketplace. Pricing an Essential Element of Marketing In order to build loyalty programs of critical mass, it is essential to understand what truly matters to customersnot just what they say matters, but what their actions show truly matters.

What companies fail to do is realize what a loyalty program brings in terms of market research. Loyalty programs pay for themselves in marketing research alone.

David Andreadakis, Aimia

You should do something for customers, not to them.

Kathy Hecht, Acxiom

If you cant change your customers behavior, what business are you in? You have to be able to move the needle and move it quickly.

Joe Leader, PossibleNOW

Addressing Opt-out Problem Critical Some of the issues with opt-outs start just in the perceptions of marketers. Look at the language we use customer targeting. Nobody wants to be targeted. No one wants to be sold...We wonder why we are viewed as the adversaries.Jeff Nicholson, vice president of global marketing, Pitney Bowes Software LOC Seeks to Help Consumers, Merchants Manage Loyalty Programs Consumers have strong interest in loyalty programs, as evidenced by studies showing that the average person belongs to more than 18 programs, yet they are tired of fumbling with different loyalty cards in their wallets or keychain fobs. Proximiant Expects to Surpass 250,000 Users by Year End As customers become increasingly mobile, using mobile phones as payment devices, the idea of touch and go digital receipts is picking up popularity.

Failure, when it is strategic, is the key to innovation.

Yanni Kotziagkiaouridis, Merkle

engagement & experience exp

engagement is the journey, loyalty is the destination


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Join Loyalty 360 For the 6th Annual Loyalty Expo March 20-22, 2013 Renaissance Orlando At Sea World Orlando, Florida
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