Volume 5 Number 2

Second Quarter 2013

EVERYDAY CUSTOMER EXPERIENCES – THE

AH-HA
In this issue:
U.S. Bank: A CUSTOMER EXPERIENCE Success Story

MOMENTS

Live Nation: ENGAGING MILLIONS OF LOYAL FANS GOLD’S GYM PUMPS UP Results With A CustomerCentric Culture

Engagement?
It will with The Loyalty League , our team of engagement professionals brings your company from average to extraordinary.

Does your business drive

Employee Recognition

Corporate Gifts

Player Loyalty

Customer Engagement

only Rymax can deliver exclusive rewards, customized programs, and strategic marketing promotions!
FOREVER BETTER

Contact us for thousands more reward choices!
www.rymaxinc.com/L360 • 1.866.684.1174
Copyright © 2013 Rymax Marketing Services, Inc. All rights reserved.

In this Issue...
SECOND QUARTER 2013 VOLUME 5 NUMBER 2 WWW.LOYALTY360.ORG

FEATURES

EXPO INSIDER

14
METRO & MOI: Connecting with Customers
Interview with Marc Giroux

56
HOW TO MAKE AN IMPACT: Key Themes From Loyalty Expo
By Blueye

57
Snapshots From Loyalty Expo 2013!

18
Gold’s Gym Pumps Up Results with a Customer-Centric Culture
By Michelle de Haaff, Medallia

62
Brand Loyalty a Big Challenge in the UK
By Loyalty 360

LOYALTY FORUM: IN EVERY ISSUE

20
Live Nation: Engaging Millions of Loyal Fans
Interview with Jeremy Levine

6 Letter from the Editor 7 Loyalty 360 on the Web 8 Your Voice 10  Behind the Brand
Trevor Knott, Citizens Financial Group

12  360 Insights: Engaging Youth
Mark Johnson, Loyalty 360

22
A Customer Experience Success Story
By U.S. Bank

26 Loyalty Innovation 30  Behind the Brand
Nancy Porte, Vovici

50 Loyalty Reads 52 Loyalty Debate 54 Trending Now 58 Q & A: Ask the Experts 60 By the Numbers: Big Data
Loyalty Management™ • SECOND QUARTER 2013

3

In this Issue...
SECOND QUARTER 2013 VOLUME 5 NUMBER 2 WWW.LOYALTY360.ORG

TECHNOLOGY, TRENDS & REWARDS
28  Retail Innovation Story: Tommy Hilfiger ID24 32  Using Technology to Get to the Next Stage in the Loyalty Lifecycle Milen Mahadevan dunnhumbyUSA 34  It’s in the Cards: Building Employee and Customer Loyalty Through Gift Card Programs Melissa Van Dyke, Incentive Research Foundation (IRF) 36  Causes: How Retail Loyalty Programs Can Better Connect With Members Mark Dority, KULA Causes 38  Loyalty Programs As Behavior Magnets: Do They Attract Or Repel Customers? Michael W. Lowenstein, Ph.D., Relational Capital Group

BEST BUSINESS PRACTICES
42  Does it Matter What a Customer Says? Mike McDonnell, Connexions Loyalty 44  Millenials: Engaging the Digital Generation Jeff Fromm, Barkley 46  B y the Numbers: Cabela’s Cobrand Card and Loyalty Program Jonathan Gelfand, Partner Advisors 48  L oyalty Communication Tactics for the Generations Dana LaSalvia, Rymax Marketing Services, Inc.

exPO INSIdeR Loyalty Management Editorial & Production Team
Erin Raese - Editor in Chief Mark Johnson - Contributing Editor Caitlin Schar - Editorial Director Janel Toal - Design Director

62

Brand LoyaLty a Big ChaLLenge in the U.K.
Crescent Printing Company - Print Production

Jim Tierney - Senior Writer

Contacts

Article Submissions & Advertising: Erin Raese

erinraese@loyalty360.org or 513.800.0360, ext. 210

By Loyalty 360

© 2013 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™ • SECOND QUARTER 2013

5

oyalty is about behavior. But the

Accenture found that the main reason

FROM THE EDITOR

I
WELCOME NEW LOYALTY 360 MEMBERS!
ANGEL CLARABRIDGE CSG INTERNATIONAL IMPACT INNOVATIONS KOHLS LENATI OGLIVY & MATHER STRYKER TRCO
6
Loyalty Management™ • LOYALTY360.ORG

Everyday Customer Experiences – The Ah-ha Moments
n this issue we’ve asked people to share their last “ah-ha” customer experience moments. It’s interesting when we ask this question we get many similar answers — many people jump to their travel experiences, their travel loyalty programs or to the popular brands that epitomize the ultimate customer experience — Disney, Starbucks, Apple.

What’s interesting is it seems, when asked this question, we all forget the many many day to day interactions we have as customers. Was your last ah-ha moment really a year ago when you took the family to Disney? Do we really live our lives this many infrequent positive experiences? Don’t we regularly have ah-ha experiences with the brands we rely on every day? Wasn’t it just this morning when Bounty sucked-up the spilled milk with one swipe? Hear from Marc Giroux from Metro, a grocery chain in Canada, who shares they’re using data to successfully strengthen customer experiences through more relevant messaging and enhanced in-store services. Enjoy insights from Gold’s Gym on building a customer-centric environment. Learn how US Bank enhanced customer engagement, increasing and customer longevity through ah-ha customer moments by allowing their customers to earn and redeem FlexPerks rewards for special events.

And hear from our experts sharing their thoughts on how much personalization is just right. We hope you enjoy this issue. What was your last ah-ha customer experience moment? Sincerely,

Erin Raese
Editor-in-Chief Loyalty Management erinraese@loyalty360.org

What’s New
THE LOYALTY DIVIDE

L360 ON THE WEB

ON LOYALTY360.ORG

Acxiom and Loyalty 360 partnered to author “The Loyalty Divide” which shows that when marketers fail to connect customer data to CRM initiatives, media plans and individual customer experiences, it leads to diminished loyalty, profitability and brand value. And, it’s getting worse; to the tune of about $200 billion in advertising globally that’s mistimed, misplaced and mis-messaged. Bridging the loyalty divide through better connections establishes the foundation to save brands and individual customer relationships. These better connections are the industry’s best hope for creating a “house united,” and the ultimate winners will be customers and brands everywhere. But, while the desire to bridge the loyalty divide is near universal, desire and ability are not the same. Read “The Loyalty Divide” and see how to build a ‘bridge’ with 3 fundamental “connecting” capabilities.

VIDEOS
Loyalty 360’s Thought Leadership Series continues with video interviews with top industry executives! Hear from the minds shaping the loyalty industry today including: Marc Giroux, Metro; BJ Emerson, Tasti D-Lite/ Planet Smoothie, and others!

MEASURING LOYALTY BEYOND SIMPLY SPEND
Featuring Case Studies from: Zumiez, Miami Dolphins, Sony Music and Fox! Brands are benefitting from the power of advanced multi-channel loyalty software which allows them to extend their loyalty programs beyond simply measuring their customers’ spend. By capturing all the ways a particular customer impacts a brand, marketers are able to: • measurably increase customer revenue • drive deeper brand engagement across channels • elicit greater response to branded communications • gain deeper and more individual level actionable data • and much more...

FEATURED COLUMNIST
The Loyalty Marketer’s Association has announced its star-studded list of Featured Columnists who will regularly contribute must-read thought leadership articles that no marketer can afford to miss. Now each month Loyalty Management Online readers can find regular contributions on topics ranging from Big Data and Mobile to OmniChannel, CEM and more!

Loyalty Management™ • SECOND QUARTER 2013

7

LOYALTY FORUM: YOUR VOICE

YOUR

“I

’m fresh off of a trip to Disney with my wife and two small children. The premium customer service

experience there was overwhelming. On the first day, my son wanted a Mickey Mouse cake pop... and this

VOICE

wasn’t just any Mickey Mouse pop — this one required us to take out a second mortgage to purchase. Of course, nearly immediately, he dropped it on the ground. Before I even noticed, a Disney rep walked over, picked it up and said she’d walk over to the store to pick up a new one for him. It was just second nature for that employee — no questions asked. There were many other moments like this throughout the week — it’s a huge differentiator for them and really caters to both the purchaser (adults) as well as the kids.” Jason Barbrow, Vice President, Customer Lifecycle Experience, Time Warner Cable

What was your last “Ah-ha” customer experience? What makes this memorable?

8

Loyalty Management™ • LOYALTY360.ORG

“M

y favorite A-ha moment... We saw a twitter post reading, ‘Going to a business dinner at Wow Bao, is it

going to suck as much as I’ve heard?’ We reached out via receiving his cell phone number to send him mobile money to

“A

h-ha moment... When my Choice Privileges Elite member status (Choice Hotels rewards program) is recognized by

one of our hotels. Has been a key message to our franchise hotels and it is working.” Greg Brown, Vice President, Loyalty, Promotion & Relationship Marketing, Choice Hotels International

social and invited the guest in prior to his dinner after dine on us. Not only did he enjoy the meal, and post photos of it — the story got picked up by an AP reporter and went viral. — (Google Wow Bao and Tony Bosco to see the number of hits) The power of being mobile! We were able to respond instantly via mobile and to send mobile money to achieve immediate results!” Geoff Alexander, Vice President, Lettuce Entertain You Enterprises, Managing Partner, Wow Bao

“A

s you might appreciate, I see the majority of customer experiences as pretty generic and basically

undifferentiated. The more memorable ones are where there’s a personal connection or where the brand recognizes

something about me as a unique customer. One example is when I recently checked into a Kimpton Hotel… it was late at night and I was exhausted, but the associate at the front desk greeted me by name and remarked this was my ninth stay at that hotel. I was immediately impressed they used specific information to acknowledge my business instead of just saying ‘Welcome Back.’ Using and displaying data in the right way can turn a nice customer experience into an exceptional one.” Phil Rubin, CEO & Founder, rDialogue

“I

recently had an issue with my Warby Parker glasses. When I called the company, a person answered the phone after

just two rings. No automated system, no voicemail. I was immediately impressed. This company cares about my

experience. I thought of the stat by RightNow: 86 percent of customers would be willing to pay more for a better customer experience. Details like accessibility to an empowered employee are worth the extra money.” Chuck Christianson, Group Vice President - Sales & Strategy, Connexions Loyalty

“I

generally don’t think in ‘Ah-ha’ terms on an individual experience basis. Our goal and mission is to improve the

“A

experience for all of our customers through 1-to-1 marketing, processes of collecting and analyzing data, doing the work to understand the psychology of shopping, and integrating all of that across our business (communications & offers, pricing, promotions, assortment, and adjacencies). Within that context, a singular customer experience story while meaningful as a point of data is only a single point of data.

new local burger place opened and the owner took time to talk with my wife and I about why we had come by,

which is only possible through evolving and disciplined

what we liked about the menu and checked in with us several times to ask about our service. Every time we have been in since, he remembers us and we feel like we are part of the “in club”. He took time to understand and remember us — he made the relationship personal and authentic. There are several choices for a hamburger near our house, but this is the place that always comes top of mind.” Eric V. Holtzclaw,
Vice President & General Manager, Preference Management Consulting, PossibleNOW

That said, as a bit of whimsy, I was surprised and delighted to receive mail from customers with letters and art showing how much they love our new loyalty program. The response we’ve gotten has been wonderful, and we look forward to rolling out more and more to enhance our customers experience with us.” Tom Hutchison, Director, Customer Relationship Management and Analytics, Raley’s

Loyalty Management™

SECOND QUARTER 2013

LOYALTY FORUM: BEHIND THE BRAND

Behind

With Trevor Knott, Citizens Financial Group

the Brand

TREVOR SHARES PERSPECTIVE ABOUT WHAT IS TRENDING IN THE MARKETPLACE TODAY AS WELL AS PERSONAL REFLECTIONS ON HIS CAREER. ENJOY THE Q&A BELOW, AS WE GET TO KNOW THE MAN BEHIND THE BRAND.

T

revor Knott currently serves as Director of Partnership & Distribution Strategy for RBS Citizens Financial Group, where he oversees all branch-planning, partnerships, and ATM distribution for RBSCFG. His scope includes distribution planning for approximately 1,400 branches, more than 30 retail banking partnerships and the second-largest in-store banking program in the U.S., and approximately 3,600 ATMs. He is a member of the bank’s Executive Leadership Group. Knott’s prior roles at Citizens include Director of Partnership Strategy & Marketing Operations, Director of Channel (Direct) Marketing, and Head of Deposits Product Management. He holds a B.A. from Furman University, and earned his M.B.A. at the University of Georgia. He lives in Wrentham, Massachusetts, with his wife and three children. He is an active member of Lions International dedicated to local and international charitable causes, coaches youth sports, and actively leads and supports the outreach efforts of his local church.

IS YOUR EXISTING CUSTOMER STRATEGY FOCUSED MORE HEAVILY ON ACQUISITION OR RETENTION? Both, really. Our strategy is to develop what we call “primary banking relationships” — long-standing multiproduct/service relationships. When we talk to new customers and prospective customers, we want to learn about their financial goals so we can help them decide on the mix of products that will work best for them. For my group, which is focused on the physical points of access for customers, we are focused on understanding their access needs. Do they have enough ATMs in the area? Do they have the right mix of traditional branches and in-store branches? This is the piece of the customer experience that my team works on — making it easy for our customers to bank when, where and how they want. This focus on the customer experience — our core strategy across the bank — is very much built into our thinking for the long haul. WHAT IS ON YOUR “WISH LIST” FOR TACTICS, TOOLS OR TECHNOLOGIES YOU WOULD LIKE TO SEE INCORPORATED INTO YOUR CUSTOMER RELATIONSHIP STRATEGY? Customers’ banking behaviors and preferences are changing at a more rapid pace than our industry has ever seen. It is an exciting time because the “distribution strategy” arena is abuzz with innovative new products and service offerings. As we look at the new tools and technologies that are becoming available, we are focused primarily on those that make banking across multiple integrated channels easy and convenient.

“ANY COMPANY THAT IS SERIOUS ABOUT THE CUSTOMER EXPERIENCE HAS TO MAKE THEIR INTERNAL CULTURE A STRATEGIC PRIORITY.”

10

WHAT ARE THE KEY AREAS OF FOCUS FOR CITIZENS BANK IN 2013? The area of primary focus for us is the customer experience — we know that our job is to anticipate and meet the needs of our customers. The quality of the customer experience is one of the best opportunities for differentiation in our industry today. We have developed great relationships with our customers, and we continue to work hard on this every day because we know that, as is the case with any company, there is always room for improvement.

Loyalty Management™ • LOYALTY360.ORG

LOYALTY FORUM: BEHIND THE BRAND

HOW ARE TODAY’S EMERGING TRENDS IMPACTING CITIZENS AND THEIR PLANS FOR THE FUTURE? We believe there is an important trend in the way consumers choose the companies with which they do business. Especially in our industry, we are seeing more and more evidence that people choose the bank that they think is most invested in their local community. This includes charitable giving, hiring practices, lending practices, customer service and other areas. We are fairly unique in that we offer both the convenience and access of a large bank and the deep community roots of a regional bank. We say as a company that “good banking is good citizenship” — this is the way we operate and our customers respond really well. Because this is an area of particular strength for us, this community dimension is something that we think about a lot in our strategies for the future. WHAT WOULD YOU LIKE TO SEE CHANGE IN THE MARKET’S APPROACH TO THE CUSTOMER EXPERIENCE, ENGAGEMENT AND LOYALTY? I think companies can help themselves — and their customers—by focusing on getting the basics right and then allowing loyalty and trust to grow from there. You earn customer loyalty by delivering value and being consistent. At the end of the day, your customer loyalty strategy isn’t a program or a campaign. It’s a way of doing business that permeates everything you do. WHAT DO YOU BELIEVE IS KEY IN CREATING THE ULTIMATE CUSTOMER EXPERIENCE? Success in this area requires executive-level focus on maintaining a corporate culture where everyone is responsible and accountable for their contributions to the customer experience. It can be challenging in businesses where there are many stakeholders to constantly align and re-align, but you simply have to do it. Any company that is serious about the customer experience has to make their internal culture a strategic priority. This is something that we think about a lot at RBSCFG. WHO (OR WHAT) HAS HAD THE GREATEST INFLUENCE ON YOUR CAREER? There is nothing like a good role model or a good mentor to help someone make the most of their professional career — and I have been incredibly fortunate to have had both in my career. From my role model — the former president of a small marketing-

What is your favorite word? MODERATION What is your least favorite word? CAN’T What turns you on creatively, spiritually, or emotionally? FAITH What turns you off? LACK OF CONCERN OR INTENTION What is your favorite (PG-13) curse word? DAMN What sound or noise do you love? WIND What sound or noise do you hate? WHINING What profession other than your own would you like to attempt? SMALL BUSINESS OWNER OR TRAIN DRIVER (if you ask my 6 year-old son) What profession would you not like to do? ELECTRICAL ENGINEER If Heaven exists, what would you like to hear God say when you arrive at the Pearly Gates? MARTINI OR MANHATTAN?
Inspired by James Lipton on “Inside the Actors Studio” we asked Trevor to share his quick fire response to the questions originating from the French series, “Bouillon de Culture” hosted by Bernard Pivot

firm where I briefly worked — I learned the importance of never straying from my core personal values. Stick to what you know are the right things — honesty, trust, and a never-ending zeal to serve the customer — and let the other things fall where they may. From my mentor — a highly successful businesswoman — I have benefitted from consistently sound advice and support as my career has evolved. I am so appreciative of her mentorship, and as my career has progressed I now find myself consciously seeking to pay-it-forward by serving in this same capacity to those coming up behind me. WHAT ARE YOU MOST PROUD OF IN YOUR CAREER? The opportunity to build and sustain lasting partnerships between two companies is something that is relatively unique, and I have been able to do this now several times over managing Citizens network of relationships that enable us to place branches inside of local supermarkets. When two companies work together to capitalize on complementary strengths, both companies and the customer win. WHAT WAS YOUR LAST “AH-HA” CUSTOMER EXPERIENCE? LL Bean — replaced my worn-out clothing item at no cost, no questions asked… and every associate in the firm knows the policy cold. Truly living the brand.

WHAT IS YOUR PERSONAL MOTTO? Do unto others as you would have done to you — simple, but effective in keeping us all grounded. WHO OR WHAT INSPIRES YOU? My wife and three children all inspire me — each in different ways; but all to do and be my best, try my hardest, and laugh (often at myself!). DO YOU (OR WOULD YOU) LIKE TO VOLUNTEER? WHAT ORGANIZATIONS OR CAUSES ARE YOU MOST PASSIONATE ABOUT? Volunteerism is so incredibly important – to the world around us, to our local communities, and most importantly to our own well-being. And yet I find it all too often undervalued in our society today; and that is perhaps why I am more self-critical of my shortcomings in this area than any! While I have led and participated in multiple volunteer organizations — coaching little league, leadership positions at church, Lions Club — I am at the same time very grateful for all those that seem to be able to give so much more of their time and talents to making our communities better, stronger, and safer. L

Loyalty Management™ • SECOND QUARTER 2013

11

LOYALTY FORUM: 360 INSIGHTS

ENGAGING YOUTH
Loyalty 360

Mark Johnson

Y

OUTH ENGAGEMENT HAS BEEN DEFINED IN SOME CIRCLES AS

“INVOLVING YOUNG PEOPLE IN

THE CREATION OF THEIR OWN DESTINIES.” CREATING, ENCOURAGING, AND MAINTAINING ENGAGEMENT IN YOUTH SPORTS CAN BE A TRICKY PROPOSITION, ESPECIALLY TODAY WHEN CHILDREN HAVE SO MANY OPTIONS FOR ACTIVITIES OUTSIDE OF SCHOOL. SO WHAT ARE THE SECRETS FOR SUCCESS WHEN IT COMES TO ENGAGING YOUTH — AND THEIR PARENTS — IN AN ATHLETIC ATMOSPHERE?

A LOYALTY PROMISE AT KINGS SOCCER ACADEMY Roby Stahl, who is considered one of soccer’s foremost coaching minds in the U.S., is the Technical Education Director at Kings Soccer Academy, which covers the Greater Cincinnati/Northern Kentucky region. Stahl has played and coached soccer at every level all over the world for more than 30 years. KingsHammer SC is open to boys and girls from as young as 3 years old all the way up to 23. Stahl’s name is synonymous with soccer and his teaching methods are legendary. “I’ve developed a thick skin,” Stahl told Loyalty 360. “I’m a very blunt person, but also sensitive and try to be politically correct. I treat you the way you treat me. That’s done well for me. Treat people the way you want to be treated. I think I command respect with the parents.” A simple, yet crucial component of the engagement puzzle for Stahl is making it fun. “One philosophy I’ve always followed is this is their only childhood, so let them enjoy it,” Stahl said. “I try and teach the way I enjoyed learning, through personal experience stories, things I liked and didn’t like playing on the playground.” As in the game of soccer, coaching and mentoring young people is all about

preparation. Stahl can’t read enough about new coaching methods, or new ways to relate to children. “One of the keys is being organized and being very professional,” Stahl said. “Reading books, watching DVDs, visiting other clubs, and researching. A lot of YouTube. The world is so small now. The way you improve yourself is by researching and seeing different teaching methods and putting your own personality on them.” Stahl has attended every NSCAA (National Soccer Coaches Association of America) convention for the past 30 years because he wants to know what teaching methods work and which ones don’t. “I relate to people very well,” Stahl said. “I’m friendly. Teaching has changed and you have to adapt to kids today. When I grew up the coach had the final word. That was law. My parents would never ever second-guess the coach and they supported the coach. Now you have to be careful what you do and take each child on a case-by-case basis.” Stahl and his wife know so many of the parents involved with Kings and, along with his devout coaching staff and players, “there is a lot of loyalty in the program.” Stahl said that often on Monday nights Kings holds skills training/soccer festivals in which kids work

12

Loyalty Management™ • LOYALTY360.ORG

with a professional coach focusing on individual skills and, for the last 45 minutes they split up into small groups and games are held where every kid plays with one or two substitutes in an unsupervised atmosphere. “That teaches them responsibility in not only soccer, but in life,” Stahl said. “The kids start to learn on their own.” When Stahl teaches the youngest players, there is an abundance of ball movement education, ball manipulation, allowing them to “feel good about themselves and being around adults.” Stahl’s three golden rules of engagement with his players are: “When I’m talking, you’re not; it’s OK to make mistakes because that’s how you learn; and have fun. Parents see we’re having fun with the kids and at the end of practice the kids shake each coach’s hand, look them in the eye, and thank them. It teaches a lot of lessons.” Many coaches have been with Stahl for 14 years, he said, and so many of the kids in the program started at a very young age “so we have a lot of loyalty built in to this program.” THE GINGA TOUCH ENGAGEMENT FACTOR Derek Smith and Jon Caldwell, former professional soccer players as well as teammates and roommates, believe Ginga — defined as the sway a player has in their feet and legs — is the future of the sport in this country. Their Cincinnati-based program known as The Ginga Touch focuses on the individual skills of the player which are honed by futsal — whereby soccer is played 5-on-5 on a smaller pitch, usually indoors. Ginga’s personal involvement offers immediate engagement, according to Smith and Caldwell, and loads of fun because kids are learning individual ball skills that aren’t taught at the average youth soccer program. “We get emails galore,” Caldwell said. “It’s unbelievable what some people have said. One said their daughter played Ginga for one week in the summer and they had never seen her play like that before and she can’t wait to do it again. I’ve learned a lot of life lessons from soccer about sharing and we not only want to develop skillful players, but develop

good people also who respect each other. We’re about character building as much as skill building and the parents see that and respect that.” All of the top soccer players in the world grew up playing street soccer, Caldwell said, and “we’re finding the buzz is huge for this.” Smith said that soccer, Ginga in particular, is a totally different sport.

The more you dive into soccer, the more kids are comfortable with the ball at their feet, they’ll enjoy it more and not want to fall out of the sport.” COMMUNICATION ENGAGEMENT TOOL FOR ABLY SWIM PROGRAM Tim Hart, Director of Competitive Swimming for the YMCA of Greater Cincinnati, is a former member of the English World Team who heads up the highly successful ABLY (Anderson Barracudas Lyons YMCA) program. Hart told Loyalty 360 he believes that solid communication fosters engagement and loyalty from swimmers and their parents.

The difference between Ginga and regular soccer is “it’s pure enjoyment,” Caldwell said. “We’ve had only one kid drop out in three years. These kids start learning moves and skills that kids growing up in Brazil are using. Parents are most impressed about the “I expect all my coaches at a minimum to passion and enjoyment that kids get from send out one email a week to the parents training. We don’t make them wear letting them know what we’re doing and mandatory shirts and we encourage them to what’s coming up,” Hart said. “And I try to wear their favorite professional team jersey. send out at least one email every couple of We play Samba music and the kids receive weeks to the whole team. It creates more of very good technical training.” a team atmosphere.” Selling their program isn’t much of a problem An effective strategy in creating comfort, for Smith and Caldwell since creating and engagement, and loyalty is one of ABLY’s maintaining engagement is an intrinsic value policies. “To prevent burnout, especially with of Ginga. Smith said word-of-mouth swimming, we don’t have a practice advertising has carried the program well. attendance policy in our groups 12 and “A lot of parents coming in played sports under,” Hart explained. “We don’t emphasize other than soccer,” Smith said. “And a lot of pushing kids at a very young age. We also them have the mentality of a sport being encourage them to have other activities such played in a controlled environment. Once as art or music.” they see the atmosphere and environment ABLY members create individual goal sheets surrounding Ginga, and understand it’s a that “as coaches we have to remind them of player’s game with kids making their own those goals to keep them on track,” Hart said. decisions, I think a lot of the parents really “They have to be personal goals.” like seeing their kids play that way.” Socially, Hart said, ABLY coordinates several During the summer, Caldwell said to team activities such as pep rallies, cookouts, promote more of a community feeling, many attending a Reds’ game, a water park outing, of the Ginga players travel to downtown and banquet. Cincinnati every Friday night to a park that is the perfect venue for street soccer. “We invite people to come and play and it’s amazing to see. This is what the most talented players wanted. Parents sit there smiling and people start videotaping the games. It keeps the players and parents engaged in a community event.” Caldwell added: “It’s a passion and pure enjoyment these kids take away from Ginga because something has changed in this kid. “We hold a lot of collaborative activities that promote loyalty and engagement,” Hart said. “There’s that sense of belonging and being part of something bigger than a swim team.” L

Mark is the CMO/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.

SOLID COMMUNICATION FOSTERS ENGAGEMENT AND LOYALTY
Loyalty Management™ • SECOND QUARTER 2013

13

FEATURES

Metro & MOI

Loyalty 360 interview with

CONNECTING WITH CUSTOMERS

Marc Giroux

T

he average Canadian consumer has brands to differentiate themselves.

14 loyalty cards, so it is difficult for

Q

As a result, personalized offers and personalized service become critical for setting brands apart in their ongoing quest to attract new customers. Since its launch in the fall of 2010, Metro & Moi (Metro & Me)–Metro Inc.’s new loyalty program has made significant strides with consumers in Canada. Marc Giroux, Metro’s vicepresident of marketing, sat down with Loyalty 360 and discussed a variety of topics including factors behind the success of the program, data integration, and customer loyalty philosophies.

Why do you believe customer loyalty and retention is an important element to an overall marketing strategy? Giroux: Customer loyalty is not just important to a marketing strategy; it’s also critical for an overall business strategy. Customers today have more choices than ever with specialty stores, discount stores and pharmacies all vying for their dollar. So while courting new customers will always be important, that isn’t what puts food on the table, so to speak. Customer-centricity is critical in helping us face those competitive challenges. With dunnhumby, we were able to determine that our most loyal customers are responsible for the majority of our net sales—they are 17-20 times more valuable to us than non-loyal customers. We need to be able to demonstrate our loyalty to those existing customers. So retaining their loyalty, and growing their share of wallet and monthly grocery spending is key for our long-term success and ability to navigate the landscape with the right strategy.

What made you decide a formal loyalty program was the best way to go for Metro? Giroux: Canadians have always been devout bargain-hunters, a trend that has continued to intensify over the past four or five years. Through our partnership with dunnhumby, we determined that a formal loyalty program was the key vehicle for reaching several goals. First, it would enable us not only to shift the focus to the customer in the short-term, in terms of getting them in the door and making them feel valued, but to retain that focus, and build a relationship with them for the long term. dunnhumby helped us understand that our loyalty program wasn’t just a discount vehicle, it was an opportunity to reward our customers in the right ways. It also allows us to build on a culture of value around our brand—demonstrating to customers that we deliver personalized service and quality, well-priced products that are relevant to them, in preference and proximity.

Q

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Loyalty Management™ • LOYALTY360.ORG

“ A TRULY SUCCESSFUL LOYALTY PROGRAM HAS TO GO BEYOND SIMPLY DRAWING CUSTOMERS INTO THE STORE. IT HAS TO REACH OUT INTO THEIR WORLD AND OFFER THEM BENEFITS”
How do/will customer insights influence the evolution of the Metro & Moi program? Does Metro use VOC to further cater to the customer and enhance the program based on feedback? Giroux: Absolutely. There’s a reason why we have a satisfaction rate of 94 percent among Metro & Moi members. For us, this loyalty program becomes not just a way to engage customers on a personal level, but to have a two-way conversation. This really becomes evident in the feedback we receive via Facebook and our store operations teams. We’re able to hear what customers like and don’t like, and what they’re seeking, and have been able to tailor the program accordingly. And, through their excitement in-store and online about the program, they are often our greatest marketing asset.

Q

Q

What do you find most exciting or unique about the program? How is this more than just a loyalty program? Giroux: Because the average Canadian consumer has 14 loyalty cards, we have to work hard to differentiate ourselves, and this

program enables us to create a fully integrated brand strategy that includes not just personalized offers, but personalized service and innovation. One of the big decisions we made internally, and one that I believe has been critical to our success, was whether we should move forward with instant reward redemptions that our customers said that they wanted or send a cheque via mail every 3 months to our loyals. dunnhumby’s experience working with other retailers like The Kroger Co., Tesco and Macy’s helped guide us to opt for the latter to ensure we had an ongoing vehicle to maintain an engaging conversation with our customers. Today we have an 80% participation rate associated with opening of the envelope. This has been one of the most important decisions we have made and dunnhumby has been an extraordinary counselor in helping us make the right decision. I get excited when I see examples that reaffirm how Metro is becoming more and more of a customer-focused organization. Insights from our program have been key in

helping to bridge silos across the business so that we’re all working towards the same vision and with the same language. For example, working with Metro’s CIO, we’re leveraging insights and data to help articulate our innovation strategy so that we’re embracing the right technology for future success.

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How does Metro incorporate the Metro & Moi loyalty program into the overall customer experience? Giroux: A truly successful loyalty program has to go beyond simply drawing customers into the store. It has to reach out into their world and offer them benefits — like through our partnership with Air Miles. Once in-store, they have to like what they find, and want to buy it, but also feel like we know them and understand their preferences. And that insight drives factors like assortment decisions, at-shelf bonuses and even pricing. Are there soft benefits being offered to those recognized as best customers — for example in-store recognition? Giroux: We’ve found there is a level of excitement and recognition that comes with redeeming their rewards at the checkout. We’ve even heard stories of customers touting the benefits of the program to other customers who don’t yet have a card to present to the cashier.

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What do Metro’s customers love most about the Metro & Moi loyalty program? Giroux: I think they recognize what lies at the heart of Metro point of view, which is the proximity with the customers and their needs is key to our employees at store and the program. On a very basic level, I think they love receiving reward cheques in the mail every three months. How many cheques do you receive in the mail from businesses you engage with? It’s a very tactile expression of gratitude and thanks. Since the launch of Metro & Moi what has surprised you most? What makes this program so successful? Giroux: We’ve been pleasantly surprised by the extremely high level of communication we have seen from our loyal customers. We knew they would be thrilled to receive their green reward cheques in the mail, but to see them actually go to our Facebook page and share their excitement, we know that we’re doing something right.

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Continued on page 16 Loyalty Management™ • SECOND QUARTER 2013

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FEATURES Continued

“ THIS COMMUNICATION GENERATES DATA THAT IS INCREASINGLY GRANULAR, ALLOWING US TO INCREASE THE LEVEL OF PERSONALIZATION”

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Data is an important aspect of any loyalty program. How does data from the Metro & Moi program impact customer messaging or influence the customer experience? Giroux: Working with dunnhumby, we’re able to leverage data from the program at a level that makes it increasingly more relevant to customers on a very personal level, and our communications are nearly 100 percent customized to their preferences.

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But the experience that matters most is in-store, at the shelf. Using the data, we’re able to determine the optimal way to execute key messages at the point of purchase, and help both our fresh and packaged goods vendors optimize the customer’s engagement with their brands as well. Perhaps the most critical — and often-overlooked — component of leveraging this data to build loyalty is communicating it to employees, and at Metro stores, they’ve embraced it. They’re our front-line ambassadors who are delivering the customer experience day in and day out, and have greatly contributed to maintaining engagement among our customers.

What trending technologies or loyalty strategies do you see influencing Metro as they continue to engage customers in the program and inform them about program perks? Giroux: Digital and social platforms already are an important part of our loyalty strategy. Our Facebook page allows us to engage with customers in an authentic and relevant setting, and articulate key brand values — like proximity — through a direct conversation. It allowed us to talk with our customers as their community grocer. And this communication generates data that is increasingly granular, allowing us to increase the level of personalization. That, I think, is the future of customer-centric marketing. The more data and insight that we are able to reap regarding a customer’s preferences with dunnhumby’s help, the more valuable the program becomes to that customer, creating a cycle of loyalty that drives store visits and basket spend. What are your thoughts on integrating mobile and social into the Metro & Moi customer engagement opportunities? Giroux: It’s crucial. While we have implemented Metro & Moi into our promotional calendar — featuring it prominently on in-store signage, weekly flyers and media communications, both mobile and social platforms are essential for keeping the program top-of-mind among our loyal customers. They’re springboards for enhancing our connections with customers, being able to connect with them at the right time, in the right way, and forming a single, unified view of the customer. These channels are part of an omni-channel strategy which need to include the store. So, our mobile strategy should again be connected to our customer-centric strategy and help us demonstrate our loyalty to our best customers when they are at home, in our store and on the move.

What’s next? Anything on the wish list? Giroux: I think it’s interesting that technology, which, at first blush, feels impersonal, allows us to get to know our more than 1 million loyal customers on an individual level, and brings our relationship with them full-circle. Our website, Facebook page, email promotions — all of these things allow us to better respond to customers’ preferences and concerns, building trust. So the progression of that is that our customers become our marketing and communication channel. When a friend recommends our brand to a friend, that advocacy is invaluable, and we’re working with dunnhumby to truly harness the power of that.

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How does Metro use program data for marketing efforts? Can you share examples of some of the offers a Metro & Moi member would receive? Giroux: To be a truly personalized strategy, we have to deliver the right content — that is relevant to the customer on an individual level — but also do this at the right time, and via the right channels. In exchange for access to their data, a customer needs to see the value of the program. And Metro & Moi enables us to provide that aspirational experience — delivering coupons for products they routinely buy, and promotions that speak to their preferences.

What is your personal customer loyalty philosophy and how does this impact program development? Giroux: A customer-centric approach doesn’t happen overnight. It’s a journey; it’s a revolutionary evolution. And that means that we can never simply rely on just the data, or assume that what is best this year will be best next year. A customer’s preferences are an ever-moving target, and we’ve got to keep up. making sure it comes to life in-Store through our associates is the key to success. L

Marc Giroux is Vice-President and Chief Marketing and Communications Officer at Metro Inc. Mr. Giroux joined Metro in 2009 after a 20 year career in the Telecommunication industry, where he held various executive roles in strategic planning, sales, marketing and general management. At Metro Inc, he leads the marketing, loyalty and corporate affairs function as well as the management of Metro’s joint venture with dunnhumby Canada.

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Loyalty Management™ • LOYALTY360.ORG

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© Copyright Verint Systems Inc. 2013. All Rights Reserved Worldwide.

FEATURES

Gold’s Gym Pumps Up Results With A Customer-Centric Culture
COMPETITION IN THE HEALTH CLUB INDUSTRY IS FIERCE.
Every player in the industry faces enormous pressures. Gold’s Gym, the industry leader, is no exception. Because most health clubs offer similar services, it is difficult to differentiate on product alone. So Gold’s Gym decided to make its differentiation an outstanding customer experience. Creating a customer-centric culture standard for its thousands of employees really pumped up the results for Gold’s Gym. Customer satisfaction increased by 42% in the last six months alone. The company’s Net Promoter Score (NPS) has doubled since 2009 (from 14.7 to 29.3). The health club leader is well on its way to a goal of holding an NPS of 45 by the time the company turns 50 in 2015.

Michelle de Haaff
Medallia

Gold’s Gym credits its success to a strong Customer Experience Management program that focuses on empowering frontline staff to take action. Now employees on the gym floor check their Customer Experience Management application to view health club member feedback and comments on their location in real time. Most important, this tool gives employees recommendations for action. It automatically creates a real action list that is focused on driving customer satisfaction. Empowering the frontline has created a winning customer-centric culture across more than 700 locations in 36 states and 30 countries in the global chain. “[This] changed our culture because it made us acutely aware of the customer,” said Kristen Baynard, Gold’s Gym Director of Service Operations. “Having the ability to get this feedback has given the [general managers], the corporate and franchise owners and our frontline the ability to really control and understand how they serve customers and what areas really impact the customer experience. We also take action. We reply to every survey and have business processes to address concerns and to be the best we can be.”

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Loyalty Management™ • LOYALTY360.ORG

YOUR ORGANIZATION CAN ALSO BENEFIT FROM A CUSTOMER-CENTRIC CULTURE LIKE GOLD GYMS. IT STARTS WITH THESE THREE KEY STEPS.

1

SETTING GOALS
Accomplishing a major cultural shift throughout an organization requires strong and engaged leadership. Gold’s Gym President Jim Snow took the stage at the most recent annual company conference in Las Vegas and announced aggressive NPS goals for the entire organization. Goal setting is key: it unites the organization around a common mission and inspires individuals to action. At a local level, one Gold’s Gym location began posting changes put in place when members gave feedback. It showed members that the gym cared about them and it inspired staff to act.

2

DAILY REPS OF NPS
Every Gold’s Gym property posts its NPS scores and customer comments online as well as in employee break rooms. Morning staff meetings start by employees reviewing these scores and comments and discussing areas for improvement. Putting guest feedback front and center on facility cleanliness, locker room and shower maintenance and even music preferences inspires action. One Gold’s Gym in Ohio received guest complaints about the music playlist. Staff quickly changed the music line up and positive feedback from members was immediate.

3

MONTHLY MEASUREMENTS
Top Gold’s Gym executives pitch in monthly to cold-call each property— over 700 locations in 36 states and 30 countries—to ask one question: “What is your NPS?” Woe to the employee who doesn’t know the score! At Gold’s Gym, executives hold everyone in the gym accountable for knowing their property’s NPS score, from the front desk to instructors to managers. That laser focus on a metric also focuses everyone on the actions that they can take to improve their customer satisfaction score every day. This doesn’t just happen by itself. It takes daily, weekly, monthly execution of drive, effort and focus. L

As Vice President of Marketing, Michelle leads marketing at Medallia, the leader in SaaS Customer Experience Management and has over 18 years of experience in marketing, branding, product management and strategic partnering in Silicon Valley. Medallia provided Customer Experience Management services for Gold’s Gym.

Loyalty Management™ • SECOND QUARTER 2013

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FEATURES

LIVE NATION ENGAGING MILLIONS OF LOYAL FANS
Loyalty 360 Interview with Jeremy Levine, Live Nation

ive Nation Entertainment, the world’s leading live entertainment and eCommerce company (comprised of four market leaders: Ticketmaster.com, Live Nation Concerts, Front Line Management Group and Live Nation Network), set a goal to build fan loyalty by creating a 360-degree excitement before, during, and after each show.
In December of 2012 Live Nation re-designed their site, LiveNation.com, in response to this challenge. In an interview with Loyalty 360, Jeremy Levine, SVP of Digital Sales for Live Nation, shares insights about how Live Nation is serving 200 million loyal music fans, engaging users on the web and partnering with loyalty programs, on behalf of other brands, through their concert campaigns.

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HOW DOES LIVE NATION FOSTER LOYAL MUSIC FANS? Live Nation connects fans to the artists and shows that they are most interested in across a variety of platforms including online, mobile, social, and onsite. While most fans come to us first as a ticketing solution, we are evolving, via exclusive content and features, to provide engagement and access to all fans by extending the live show experience. The new livenation.com seeks to be the epicenter of the holistic concert experience that spans from the moment a concert date is announced to well after the event has happened. We will do so by curating content — exclusive and fan generated — in a way that makes the concert experience more accessible to all.

time they heard a particular song on the radio, almost everybody remembers the first concert they went to. From the band, to the venue, to the outfit they wore and the friends they went with. Beyond the sights and sounds, there is a tribal mentality: connectivity and excitement that comes from being part of the audience at a live show. Everyone is there for the same purpose. There are more and more ways for people to simply listen to music. But there is still only one way to experience a concert. WHAT CHANGES HAS LIVE NATION MADE TO ENHANCE THEIR CONNECTION TO FANS? In relaunching livenation.com at the end of 2012, there has been a big focus on artist content with the goal of establishing more intimate ways for fans to connect. That connection can come with live performances from Live Nations Labs in LA or through a content program (“I want to tell you two things”) in which artists are given the opportunity to speak directly to their fans. Additionally, the use of geo-fencing technology at every music venue around the world allows fans who didn’t get to go to a show the opportunity to experience the vibe through all the social content generated. livenation.com is aggregating and curating this social content into a “showbook” online. The “showbook” also allows those who attended the show to go back in time and “re-experience” the event whenever they want. Aside from online, we continue to innovate in mobile web and mobile apps to make it easier for fans to find and buy tickets to their favorite bands.

“ THE OPPORTUNITIES FAR OUTWEIGH THE CHALLENGES. WE ARE ONLY CHALLENGED BY THE PACE OF INNOVATION AND TECHNOLOGY AND INSURING THAT WE ARE ONE STEP AHEAD OF WHERE MUSIC FANS WANT TO GO.”
WHAT IS IT ABOUT THE LIVE ENTERTAINMENT INDUSTRY THAT KEEPS CONSUMERS ENGAGED? Passion and emotion. People connect with music on an emotional level in all mediums, but experiencing it live takes it to a deeper level. While few people remember the first

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WHEN A BRAND LAUNCHES A NEW WEBSITE, WHAT ARE SOME OF THE CHALLENGES IN GETTING IT OFF THE GROUND? There is a ton of development work, content generation, and online architecture that needs to be fused together to create seamless user experience. The ultimate goal is to provide a great, intuitive and valuable user interface. One of the biggest challenges is understanding that it’s better to get it right than just getting it launched. Ultimately, websites evolve based on how users interact with it, new technologies that develop, and other trends in the marketplace. It’s therefore important to have systems and processes in place that allow all of the departments involved to prioritize, troubleshoot, strategize, and react. Finding a balance is extremely important so that the best thinking from every department finds its way into the “final” product. HOW CAN ADVERTISERS EVOLVE FROM THE DISPLAY AD TO ADS THAT WILL ENGAGE WITH THE USER? There are a couple of specific areas we are focusing on with this in mind; social seeding and original and custom video and photo content. We will be working with brands to insert messaging directly within the social stream in a “showbook” whether it is having a brand representative at the show or remotely seeding in product imagery, promotional content, brand tweets, etc. On the content front, we are launching a slate of original programs which are sponsorsable/

syndicatable and also allow for product integration. We are launching our own branded entertainment group which will consult with brands to create and produce fully ownable video content programs/series leveraging our expertise in the world of live entertainment, music, and access to artists. HOW HAS LIVE NATION PARTNERED WITH BRANDS TO REACH “ALWAYS-ON” FANS VIA MOBILE DEVICES AND SOCIAL MEDIA NETWORKS? Almost all of our programs have social and/or mobile extensions. On mobile devices, we offer banner messaging as well as custom sites on our mobile web sites reaching over 8 million monthly mobile unique visitors and custom integrations via our dedicated Live Nation and Ticketmaster mobile apps that have been downloaded by over 2.5 million users. In social media, we offer sponsored posts/tweets, Facebook and Twitter promotions awarding tickets and experiences, and shareable custom Facebook apps. These are specific to a brands’ unique objectives and brand DNA. The sky’s is the limit. THROUGH MARKETING PARTNERSHIPS, HOW DOES LIVE NATION HELP OTHER BRANDS ELEVATE THEIR SPECIFIC LOYALTY PROGRAMS? One of the primary assets Live Nation brings to the table is access and we are able to leverage this to drive engagement for partner brands loyalty programs. A great example of this is our Starwood relationship. Live Nation powers once in a lifetime musical experiences only accessible to SPG members (such a

singing lessons with Natasha Bennigfield, piano lessons with Ben Folds, etc.) Putting SPG in a position to allow a customer to realize their dream is the ultimate loyalty pay off. Another benefit that Live Nation affords is scalability. Our Concert Cash and Ticketmaster Cash products, available in a variety of denominations, give fans dollars toward their choice of concert ticket or merchandise with turnkey online redemption. Thus brands who want to reward one or one million have options with Live Nation. WHAT CHALLENGES AND ALSO OPPORTUNITIES DO YOU SEE IN THE NEXT FIVE YEARS IN LIVE ENTERTAINMENT MARKETING? The opportunities far outweigh the challenges. We are only challenged by the pace of innovation and technology and insuring that we are one step ahead of where music fans want to go. The growth of mobile will allow us to foster a true relationship with fans no matter where they are. Our goal is to provide value, ease and connectivity. Being able to have an ongoing conversation leading up to the show, at the show itself and after the show is a unique proposition. Given how music consumption continues to increase, we are extremely bullish on the next 5 years. L 


Jeremy Levine is SVP of Digital Sales for Live Nation. In this role, he oversees all of Live Nation’s digital sales efforts across Live Nation and TicketMaster — online, social and mobile. 

Loyalty Management™ • SECOND QUARTER 2013

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FEATURES

A CUSTOMER EXPERIENCE SUCCESS STORY
U.S. Bank 2011 FlexPerks Customer Event Marketing Campaign

by U.S. Bank Following a successful product launch in 2009 and after achieving unprecedented retention rates of cardmembers in 2010, U.S. Bank FlexPerks Travel Rewards Visa Signature entered unchartered waters in 2011 by hosting a series of exclusive events in the hopes of creating memorable experiences for its most valuable customers.
Hosting experiential customer events is generally not considered a traditional marketing activity. However, by leveraging the core tenants of direct marketing communications and measurement, and enticing targeted customers with interesting events, FlexPerks was able to create memorable experiences for its most valuable customers while delivering quantifiable, positive financial returns to U.S. Bank. In the overview that follows, we examine the program strategy and creative decisions that created top line results, positive experiences for the customer and industry recognition and accolades.

THE CHALLENGE
A recurring challenge for U.S. Bank has been that the vast majority of FlexPerks cardmembers come up for renewal during a narrow window each year between May and July a time frame when their annual fees would be assessed. Historically, annual fees have been a trigger for cardmember attrition.

OBJECTIVE
The primary objective of the 2011 FlexPerks Customer Event Marketing Campaign was to improve the lifetime value of the most profitable FlexPerks cardmembers via increased account retention and growth in card transactions and spending. To achieve the objective, FlexPerks hosted an impressive lineup of customer events ranging from major motion picture movie previews, private receptions at museum exhibits, Major League Baseball games, concerts by GRAMMY®-Award winning musicians, golf packages, fine dining experiences and more. The desired outcome was that these carefully selected high-end events would deepen the relationship between U.S. Bank and its customers through increased engagement and improved cardmember loyalty.

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ENGAGING CARDMEMBERS & DELIVERING EXPERIENCES
U.S. Bank focused event promotions in Michigan, Minnesota and Washington where a large concentration of FlexPerks customers reside and targeted high-value cardmembers whose transaction history likely indicated interest in these types of events. Furthermore, FlexPerks usually charged a nominal fee for the events (e.g., $18 for a round of golf and lunch at worldclass courses) so as to reinforce the tremendous value that FlexPerks delivers. To encourage engagement, it was essential for cardmembers to easily learn about the exclusive events and purchase tickets. Accordingly, FlexPerks created a secure Promotion Center site that cardmembers could access to view personalized promotion information. And, event invitations were communicated in variable printed Quarterly Benefit Mailers, followed by low-cost email invitations that contained personalized links to the Promotion Center. The email links enabled recipients to bypass the site log-in process which experience had shown resulted in response rates 10 times that of direct mail alone. The events themselves were intimate and often provided special access that cardmembers might not otherwise be able to obtain on their own. For instance, FlexPerks customers had private autograph sessions with musicians, received personal coaching from a Masters Golf Tournament alumna, and were invited into the kitchen of a James Beard awardwinning chef. By providing easy access to interesting events at attractive prices to high-value customers, FlexPerks successfully engaged cardmembers and achieved the objective of increasing lifetime value via improved transactions, spending and retention.

EXCLUSIVE EVENT OFFER EXAMPLES:
Museum Exhibit: King Tut; $8 (normally $38); Minnesota Movie Pre-screenings: Cars 2 and Pirates of the Caribbean 4; free, included popcorn and soda; Washington, Michigan Theater: Oregon Shakespeare Festival; 20% off tickets; Oregon Major League Baseball: Tigers, Brewers, Mariners, Twins; $6–$11, included $5 food voucher; Michigan, Wisconsin, Washington, Minnesota Golf: Troy Burne Golf Course; $18, included lunch, driving range and PGA instruction; Wisconsin Music Concert: Marc Cohn; $12 (normally $46); Minnesota Dining: James Beard Celebrity Chef Tour, with Andrew Zimmern and Tim McKee; Wisconsin A carefully synchronized communication stream of direct mail, email and Customer Service Advisors directed high-value cardmembers to an intuitive and robust registration site. Once there, cardmembers could easily view all their promotion opportunities and effortlessly register for their preferred event. The targeted offers and attractive events coupled with the coordinated communications resulted in over 98% of available event tickets being sold.

Continued on page 24

Loyalty Management™ • SECOND QUARTER 2013

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FEATURES

Continued

MARKETING TACTICS
FlexPerks Promotion Center: February 2011. The Promotion Center is a one-stop-shop for enabling customers to efficiently learn about promotions and register to attend events, particularly during the critical second-quarter renewal time frame. A “featured promotions” home page slideshow provided a graphically rich showcase for each event, and intuitive, tabbed navigation let cardmembers browse through current and past promotions they were eligible for or had participated in. The site’s flexible, data-driven architecture presented variable content to customers based on their location, interests and value to U.S. Bank. And, robust functionality allowed cardmembers to select print-at-home admission vouchers, mailed paper tickets or pick up at will-call locations. Event Emails: March–September 2011. Targeted cardmembers received emails inviting them to participate in exclusive FlexPerks customer events. Emails contained a personalized link to the secure Promotion Center that allowed recipients to bypass the site sign-in process. Cardmembers’ log-in credentials passed through a personalized email link to enable the site to identify the cardmember and pre-populate registration/purchase fields as appropriate, thus saving the customer time and eliminating input errors. Q2 Benefit Direct Mail: April 2011. Arriving just before the annual fee renewal time period, this promotion-rich direct mail communication conveyed up to three event messages to targeted cardmembers based on value, history, card use and geography. A total of 11 events were promoted, resulting in 170 message combinations to the target audience. Q2 Benefit Email: May 2011. For message repetition purposes, this email was sent two weeks after the Q2 Benefit Direct Mail and provided a one-click link to the Promotion Center. The email communication conveyed up to four event invitations to targeted cardmembers based on value, history, card use and geography. A total of 10 events were promoted, with 193 different message combinations to the target audience. Customer Service Advisors: Nearly 1,000 Customer Service Advisors in three locations around the U.S. received cardmember retention training, inclusive of prompts to remind customers of events they were eligible for in their markets.

THE RESULTS
The goal of the 2011 FlexPerks Customer Event Marketing campaign was to increase the lifetime value of cardmembers via increases in transactions, spending and account retention. To measure the impact of the customer events, transaction and spend behavior 30, 60 and 90 days before and after the events was compared for Attendees, Invitees and a baseline Control Group. Account retention rates were also compared for the three groups. • With each event a cardmember was invited to, retention increased even if the cardmember did not attend the event(s). The retention lift for event Attendees was 8% better than the baseline Control Group. And, although they didn’t actually attend events, Invitees nevertheless had retention rates 6% higher than the baseline Control Group. • Inside of 30 days, Attendees spend was 12% higher than the baseline Control Group and remained 4% higher through 60 and 90 days. Invitees spend lift was 4% higher at the 90-day measurement window. • An increase in transactions was achieved at 30 60 and 90 days with the biggest impact at 90 days: up 2% for Attendees and 1% for Invitees. Together, the increases in spend, transactions and account retention improved customer lifetime value far in excess of the investment in marketing communications and hosting the events. Furthermore, when customers have a favorable experience with a company, they often share those experiences with their friends and colleagues, thus reinforcing the FlexPerks brand and its positioning in the marketplace. Telling cardmembers they are valued is important. However, inviting them to participate in exclusive customer events designed just for them demonstrates that U.S. Bank does not take their relationship with their most valued cardmembers for granted. To many, a credit card may be a transactional tool, but by focusing on experiential events that were unique and provided special access and benefits that cardmembers may not have had been able to obtain on their own, U.S. Bank succeeded in connecting with cardmembers emotionally and deepened their relationship. L

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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 world’s only packaged software application developed specifically 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 benefits 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 http://slp.pbinsight.com/info/uplift for more information on the Uplift advantage. www.pb.com/software Solutions for Enabling Lifetime Customer Relationships

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TECHNOLOGY, TRENDS & REWARDS

addictivepoints has reinvented loyalty and CRM for the “Big Data” market. An easy-tointegrate code means you can reward whatever online interactions you like, and dig deep into the meaningful data this produces. Whether you’re rewarding social sharing, purchasing, mobile downloads, email clicks, and much more, you are in control of the incentive amount. With a growing community of active users who can collect or spend addictivepoints with hundreds of major brands, you can acquire loyal customers while also expanding the value of your existing community. Because addictivepoints is collecting over 100 data points from across a wide variety of users, you can conveniently consume the data provided in the way most meaningful to you. To customers, addictivepoints is a universal currency, interchangeable between brands large and small, and with tangible benefits. Users are able to spend their addictivepoints on high electronics, entertainment products, holidays, fashion, and much, much more. The partnerships with trusted brands and the easy route to redemption means customers can collect and spend addictivepoints anything from facials for Facebook follows, cameras for clicks, vouchers for visits, or sweeties for spending! As if this wasn’t a unique enough combination, interactive tabs follow customers between partner websites to tell you how well you are doing, and when your points are being rewarded. With strong backing from experts in retail, loyalty, and performance marketing, addictivepoints is uniquely placed to revise the entire ecosystem of online retail CRM and to provide customers with compelling reasons to click, buy, and — more importantly — stay.

ID24 – Interactive Display Swedish manufacturer of interactive display hardware and user interface software. ID24 interactive displays have been installed in over 20 countries including USA, Europe, minor Asia and South Africa. These engaging interactive displays allow brands and their customers the opportunity for: • Digital membership registration at the counter • A loyalty system with and without a membership card • Digital receipts and digital vouchers to the customers • Digital customer surveys and advertisements directly at the counter • E-commerce and franchise partner integration Why the name ID24? Customers can identify themselves on the ID24 touch screens in-store with what you carry 24/7: ID-Card, mobile phone, or simply by typing in name / postal code / email on the ID24 touch screen. Customers can choose which ID’s to carry 24 / 7. Therefore ID24. After the success-story of installing ID24 touch screens in over two hundred Tommy stores across Europe, Turkey and South Africa (see: Loyalty Innovations Special Feature: Retail innovation story Tommy Hilfiger pg 28-29) ID24 is rolling them out in the US. The ID24 touch screens are very popular with customers and store staff. Store staff is alleviated at the check-out and customers can register themselves at POS without handing over personal details to the store staff.

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TECHNOLOGY, TRENDS & REWARDS

Stage of Life LLC: My Life Rewards® Formally launched in January 2013, the My Life Rewards® loyalty program helps affinity organizations reward their members, cardholders, customers, or employees with discounts ranging from 5% to 50% off at hundreds of national merchant brands. The program is fueled by the Stage of Life Merchant Network and is different from other reward platforms in that... 1) Life Stage Segmentation: Merchant offers are segmented by both category and life stage. This allows organizations to provide relevant offers to their members during life’s major transitions and milestones, when buying behavior is most apt to change and consumers are looking for purchasing guidance as well as money saving discounts. 2) Stand-alone or Enhancement: The program can be deployed as either a stand-alone, white-label member benefit program or it can be implemented as an add-on enhancement to an existing loyalty program via the Coupon API feed feature. In this case, Stage of Life LLC works with the client or the client’s existing loyalty agency to supply its coupon content via an API connection. 3) Custom Partnerships: And finally, My Life Rewards® has the ability to accommodate partnerships that an organization may want to bring into the program. For instance, PeoplesBank of Pennsylvania (www.peoplesbanknet.com) uses this feature to import 100 local merchants from its retail banking footprint into the program — relationships important to the bank’s Business Banking and Treasury Management divisions. Clients using My Life Rewards® include PeoplesBank (financial institution), The Gettysburg Foundation (non-profit), a large mobile phone company, and others.

OWNERSHIP = LOYALTY LOYAL3 offers a fee-free investment platform for a new class of individual investors. By making stock ownership easy and affordable, they are dedicated to opening up market access to tens of millions of people. Their principle is “fee-free investing” and the technology processes fractional shares at scale. LOYAL3’s core product enables people to buy stock in their favorite companies in just 3 steps on Facebook or the web; as easily as buying a product online. People can invest as little as $10 and they pay no fees to buy or sell stock. The platform currently enables people to invest in some of the most popular brands on Facebook, including Amazon, Apple, Coca-Cola, Dunkin Brands, Facebook, and Starbucks. The company also offers an IPO product, called a Social IPO, that opens up IPO access to everyday people on a first-come, first-serve basis, making IPO stock available at the same price, and at the same time, as institutions. What does this mean for loyalty? “Ownership” increases brand affinity and loyalty from consumers with their favorite brands. And, when consumers are invested in their favorite brands success, a stock purchase may potentially influence positive advocacy as well! What’s in the future? Perhaps ownership rewards or the opportunity to exchange points for stocks? LOYAL3 has created a new platform for perpetual engagement and loyalty generating possibilities.

Blueye goes beyond awareness marketing strategies and one-off promotions, by providing a more sustainable solution for brands to engage with their most valuable customers to drive sales and loyalty. Their software-as-a-service platform, Loyalty HUB, allows brands to leverage ‘always on social data and analytics’ and provides tools to personalize customer experiences that offer a seamless way to: Blueye’s team provides strategy and services to launch integrated programs across web, mobile and social channels, with a technology platform that helps tie in critical customer data (Facebook Insights, App Level Data, CRM, Email, POS) to help power one-to-one marketing communications that drive higher margins. “Blueye takes the best of loyalty marketing and social commerce to convert social engagement into sales and build sustainable relationships with customers,” said April Davis, Account Director at Frequency 540. “A perfect example is the Starwood My Travel Wish App, in which Starwood wanted to create an evergreen campaign to identify SPG members travel wishes.” Starwood now has over 20,000 wishes in their database and is able to retarget SPG members with relevant Facebook Ads and personalized emails utilizing Loyalty HUB to encourage members to book a stay. With real-time performance reporting, Blueye allows brands to measure increased sales and tie all programs back to ROI.

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TECHNOLOGY, TRENDS & REWARDS

Tommy Hilfiger
by ID24

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ommy Hilfiger is one of the first fashion retailers to improve customer service and loyalty with customer facing and interactive displays connected to the point of sale system. The Tommy

Hilfiger CRM has achieved higher average spending per customer and offers digital membership registration at the counter, a loyalty system with and without a membership card, digital receipts, digital vouchers, digital customer surveys, email updates and finally e-commerce and franchise partner integration thanks to these customer facing customer displays. OVERVIEW Tommy Hilfiger launched its CRM program in April 2010 in stores in Europe (across 16 countries). The Tommy Hilfiger CRM drives prospects to loyal customers by creating an integrated retail/ ecommerce customer experience. The Hilfiger Club has been growing with thousands of members per week ever since it was started. In 2012 the Tommy Hilfiger CRM started rolling out touch screens at the point of sale, integrated with the ecommerce tommy.com and franchise partners in important markets outside Europe, and started planning for the first installations in the US 2013. FIRST QUARTER 2013 – INSTALLATIONS IN NYC, LA AND SOON MIAMI Thanks to success in 2012 of the touch screens facing customers in the Tommy Hilfiger stores in Europe, the Tommy Hilfiger CRM now offers these innovative features and registers more customer data in over 200 Tommy Hilfiger stores. Just recently the Tommy Hilfiger stores on 5th Avenue (New York City) and the new Tommy Hilfiger store in Beverly Hills (Los Angeles) were equipped with interactive displays; more stores will follow soon. The success can be summarized in several points: • Tommy Hilfiger CRM is active in over 20 countries only two and a half years after launching the program • Members spend on average more than non-members •C  orrect emails using digital registration — 96.5% • Complete registrations using digital registration — 97.2 % • Average registration time on touch screens: 100 seconds • Customer satisfaction in all stores in real time • Staff is alleviated as customers register themselves • Cost savings by using exclusive touch screens (no more paper forms)
WHAT IS IT ABOUT THE SELF SERVICE ASPECT THAT IS VALUED BY THE CUSTOMER?

can roam and browse as they please; they can take their time, make informed decisions. Customers can view promos, review their previous purchases or give feedback about the stores, the staff, the products or the management without the consciousness of confrontation. Customers have a sense of security and safety as they make their own decisions free of obligation. The ID24 solution, as used by Tommy Hilfiger, can be adjusted to the customer’s likes and dislikes, and promos can be based on real-time information. Equally important is that the data collected (and given) by the ID24 touch screen results in accurate information. Spelling mistakes are greatly reduced, as the Tommy Hilfiger CRM clearly shows: 96.5 % of accurate email addresses. The customer facing touch screen is a tool that allows the customers to take the initiative. Self-service offers more freedom and independence while removing the feeling of obligation. Customers are not interacting with a machine or a screen; rather, they are interacting with an establishment and not a representative thereof.
WHAT INSPIRED THE DECISION TO INCORPORATE THIS INTERACTIVE TOOL INTO THE CUSTOMER EXPERIENCE?

Customers by nature want to feel they are special, appreciated and that they are in control. The self-service aspect of interactive touch screens caters to the need of freedom in several important ways. First of all, there is a reduced feeling of anxiety; customers are not pressured by sales people or store representatives. The customer

There are three main reasons why the decision was made to incorporate this interactive tool into the customer experience: the possibility of accurate and cost savings in data collection, allowing personnel to focus on their real jobs (selling) and attempting to make the customer feel more in control. Thanks to the improvement of the CRM, Tommy Hilfiger has been able to register more clients into their club — which automatically leads to more (and more accurate) information gathering. Not only is information

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TECHNOLOGY, TRENDS & REWARDS

Tommy Hilfiger CRM Interactive Display benefits:
Tommy Hilfiger CRM members can identify themselves with or without a loyalty card on the interactive display. After identification a customer can see previous purchases, update their e-mail and use digital vouchers directly on the interactive display.

• Digital membership registration at the counter • A loyalty system with and without a membership card • Digital receipts and digital vouchers to the customers • Digital customer surveys and advertisements directly at the counter • E-commerce and franchise partner integration

gathered and analyzed in real-time, the amount of information can be classified and several models or profiles of customers can be created. This is priceless in the fast-paced, quickly-changing and highly competitive retail industry. Another advantage is that a lot of money and time can be saved by reducing the involvement of staff in what customers do — while before personnel were often unnecessarily bothered helping customers fill in forms, collecting personal data and feeding those into the POS, the touch screens allow the customer to do this themselves in less than 100 seconds and with a much higher accuracy rate. Less store involvement is necessary, which leads to reduced salary expenses or a staff highly trained in specific operations. Finally, customers appreciate the feeling of freedom and independence the touch screen gives them, and this automatically leads to greater customer satisfaction — which is translated into customer loyalty and a greater chance of future sales. A happy customer is a returning customer. When a customer can make decisions and perform transactions without the interference of staff or store personnel, the customer can truly be king. This empowerment alone can lead to much higher sales.
WHAT UNIQUE OPPORTUNITIES DOES THE INTERFACE PROVIDE FOR THE EMPLOYEES AS AN ENGAGEMENT TOOL (KEEPING THE TRANSACTION FROM BECOMING IMPERSONAL)?

Hilfiger experience allows the customer to do as much as possible or desired by themselves, while a helping hand is nearby if requested. The interface does not replace the staff, it enhances the experience. Furthermore, the interface is still very personal in the sense that it contains the customer’s personal information and allows the customer to check his or her personal data including purchase history. Often customers prefer dealing with the interface that way because this means they do not have to discuss their private information with another person. And to return an item they simply login on the touch screen instead of carrying the paper receipts. What’s more, the interface can offer the customer promos or special deals especially designed and tailor-made to the customer’s specifications (for example, based on previous sales, age and budget), which is very hard for ordinary sales personnel or staff to do.
HOW DOES THE CUSTOMER EXPERIENCE IMPACT LOYALTY?

to the customer’s demographics and personal likes and dislikes. Not only can management create special deals based on the customer’s age, gender, race, marital status and so on, the deals can be based on previous purchases or can suggest goods that are liked by other customers with similar tastes. There is no limit as to how management can create a personal shopping experience, which is very important in creating loyalty. All this can be done without the customer having to share personal or private details with sales personnel or staff.
WHAT DO TH CUSTOMERS LOVE MOST ABOUT THE PROGRAM?

Loyalty is created by making the customer feel special, and customers who are a member of the Tommy Hilfiger Club feel that they belong to an exclusive community and that they have special privileges. Being a member of the club brings about the association they have with the brand, and thanks to the interactive touch screens, the feeling is enhanced — the interaction becomes an “experience”.

Computers — or, in this case, the customer facing touch screen and the Tommy Hilfiger CRM — will never replace the personnel. Help will always be just a few feet away, and in this sense the staff will have the additional role of acting as support for the customer rather than merely being a sales instrument. The Tommy

The membership in the club and the customer’s feeling of “exclusivity” and “association with the brand” is also enhanced by special treats and numerous perks that come with club membership. Members of the Tommy Hilfiger Club, for example, can receive exclusive invitations to attend club events, or to attend new openings of flagship stores. Furthermore, members can receive special When interacting with the ID24 solution, the discounts and avail of other promotions. customer is automatically more relaxed Recently there was a Hollywood promo where because they feel no pressure — they can do customers could win an exclusive trip to as they please. They can move about Hollywood — engaging the customers with according to their own schedule and shop the brand. All people aspire to belong to a according to their own tastes, likes and budget. group — it’s hard-wired into us — and special In this sense, their shopping experience can invitations and personal promos immediately become more private. This feeling of create the feeling of exclusivity, of being empowerment automatically creates loyalty. special, and promotes loyalty. L Furthermore, special promos can be adjusted Many studies have been made on how to improve customer loyalty, and most — if not all — conclude that certain aspects are very much valued by the customer, such as relaxation while shopping, the feeling of independence and “being in control”, as well as tailor-made service and the feeling of being a valuable customer.
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LOYALTY FORUM: BEHIND THE BRAND

Vovici

Nancy Porte

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BehindTheBrand
ANCY PORTE IS THE VICE PRESIDENT OF CUSTOMER EXPERIENCE AT VOVICI, A VERINT COMPANY. AN EXPERT IN MANAGING CUSTOMER OPERATIONS, NANCY IS EXPERIENCED IN DEVELOPING VOICE OF THE CUSTOMER PROGRAMS AND INCREASING SATISFACTION AND LOYALTY THROUGH DIFFERENTIATED CUSTOMER EXPERIENCE.
“department” that solves customer — reported issues. Customer service influences the overall experience, but customer experience is concerned with all interactions — from the moment the customer hears about the company for the first time, the purchase, service and, ultimately, renewal and billing processes. Customer service is reactive in nature, while customer experience is proactive in designing interactions that make it easy for the customer to do business with the organization.
WHAT DO YOU BELIEVE IS KEY IN CREATING THE ULTIMATE CUSTOMER EXPERIENCE?

NANCY IS ALSO A LOYALTY 360 FEATURED COLUMNIST. YOU CAN FOLLOW HER COLUMNS ON LOYALTY MANAGEMENT ONLINE.
accomplishing it. One of the reasons for this is that a successful customer experience program is a continuous, multi-year effort that involves gathering and analyzing data, acting on insights, monitoring the resulting behavior, and then starting over. Organizational patience and commitment is required to keep everyone interested and engaged in the customer experience. When implementing a program, a quick win is necessary to show the power of customer experience. However, as the program becomes more mature, there are times when the organization becomes focused on other priorities and it can become very challenging to keep the momentum going. Viewing a customer experience program as an ongoing corporate strategy will lead to overall improved customer satisfaction.

WHAT WOULD YOU LIKE TO SEE CHANGE IN THE MARKET’S APPROACH TO THE CUSTOMER EXPERIENCE, ENGAGEMENT AND LOYALTY? The market has an opportunity to define industry terms such as, customer experience, engagement and loyalty more clearly. These common terms are often used interchangeably, but they mean very different things. Customer experience, for example, represents all of the interactions a customer has with a company. Based on the level of satisfaction with those interactions (experience), the customer may interact more frequently with the company (engagement) and, finally, purchase more (loyalty). Other terms that are used interchangeably are customer experience and customer service. Again, customer experience is the sum of all a customer’s interactions, while customer service is typically a

The key to creating the ultimate customer experience is the ability to operationalize the strategy. As practitioners, we talk a lot about crossing chasms within our organization, but one of the largest chasms we have difficulty crossing is between what we want to do and actually

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WHAT GREAT MARKETING IDEA DO YOU WISH YOU HAD COME UP WITH FIRST?

The CareerBuilder monkeys! Debuting as SuperBowl ads, they were vignettes of the protagonist in need of a new job because he worked with a group of goofy, incompetent co—workers (the monkeys!). The combination of monkeys, contemporary working environments and finding the right job was brilliant. WHAT NEW OR TRENDING TECHNOLOGY OR STRATEGY DO YOU BELIEVE HAS (OR WILL HAVE) THE MOST INFLUENCE ON CUSTOMER EXPERIENCE AND LOYALTY? Without a doubt, it’s the growth in mobile technology. While a critical focus for

customer experience will always be about human interactions, mobile technology gives consumer goods and solution providers the opportunity to anticipate and deliver what the customer needs exactly when he needs it. While we cannot deny the importance of interactions with people on the frontlines, we need to be cognizant that the next generation wants a personalized experience delivered between the forefinger and the device interface. WHAT IS THE BEST ADVICE YOU’VE GIVEN TO ORGANIZATIONS THINKING ABOUT IMPLEMENTING A VOC SOLUTION? If you have limited resources, invest in your

employees before investing in a formal VoC program. Engaged employees drive customer engagement and is always a good place to start. Research reveals that employee engagement directly correlates to customer engagement. Yet, less than 33 percent of employees are engaged with their jobs. It makes sense to try and understand the interactions, challenges and sentiment of employees. Savvy organizations should gather feedback, provide training opportunities and streamline internal procedures to improve employee engagement as it will pay dividends with overall customer experience.

WHAT IS YOUR FAVORITE WORD? SEQUOIA WHAT IS YOUR LEAST FAVORITE WORD? RIGHT (IN THE CONTEXT OF A LAZY WAY OF BUILDING CONSENSUS…. WE ARE ALL A TEAM, RIGHT? SO WE ALL WANT TO BE SUCCESSFUL, RIGHT?) WHAT TURNS YOU ON CREATIVELY, SPIRITUALLY, OR EMOTIONALLY? GOOD FOOD WITH GOOD FRIENDS. WHAT TURNS YOU OFF? BUSY WORK. WHAT IS YOUR FAVORITE (PG-13) CURSE WORD? UFF-DA WHAT SOUND OR NOISE DO YOU LOVE? CONVERSATION AND LAUGHTER OF FAMILY AND FRIENDS AROUND THE THANKSGIVING TABLE. WHAT SOUND OR NOISE DO YOU HATE? SOUND OF A MOSQUITO AFTER “LIGHTS OUT.” WHAT PROFESSION OTHER THAN YOUR OWN WOULD YOU LIKE TO ATTEMPT? NAMING NAIL POLISH COLORS — HOW FUN WOULD IT BE TO COME UP WITH BLING DYNASTY, TEAL THE COWS COME HOME AND OVER THE TAUPE? 9. WHAT PROFESSION WOULD YOU NOT LIKE TO DO? PRESIDENT OF THE UNITED STATES 10. IF HEAVEN EXISTS, WHAT WOULD YOU LIKE TO HEAR GOD SAY WHEN YOU ARRIVE AT THE PEARLY GATES? I’D LIKE TO HEAR HER SAY SOMETHING LIKE — LOOKS LIKE YOU HAD A PRETTY GREAT TIME AND HELPED MAKE THE WORLD A BETTER PLACE — AND NOW, THERE ARE A FEW PEOPLE ANXIOUS TO SEE YOU AGAIN. L
Inspired by James Lipton on “Inside the Actors Studio” we asked Nancy to share her quick fire response to the questions originating from the French series, “Bouillon de Culture” hosted by Bernard Pivot.

WHAT ARE YOU MOST PROUD OF IN YOUR CAREER?

While I’ve worked in different industries, the focus has always been on the customer. I started my career in healthcare, with the focus on the patient. I learned that there was so much more to patient care than just delivering treatments and medications. I also have experience working with technology companies, managing customer service and account management. Knowing there must be a better way to satisfy customers than to answer complaint calls, I have enjoyed taking the operational knowledge gained along the way to create a more proactive role focused on driving the overall customer experience. WHAT IS YOUR PERSONAL MOTTO? “Never give up. Never surrender.” I borrowed this one from television series Galaxy Quest! WHO WOULD PLAY YOU IN THE FILM OF YOUR LIFE? Meg Ryan or Denzel Washington WHO IS THE MOST FAMOUS PERSON YOU HAVE EVER MET? Hillary Clinton

WHAT BOOK(S) ARE YOU CURRENTLY RECOMMENDING? I’m reading several! •S  witch: How to Change Things When Change is Hard by Chip Heath and Dan Heath •P  ower of Habit: Why We Do What We Do in Life and Business by Charles Duhigg •W  ine and War: The French, The Nazis, and the Battle for France’s Greatest Treasure by Donald Kladstrup •T  he Paris Wife by Paula McLain ARE YOU A RULE BREAKER OR A RULE KEEPER? WHY? Who doesn’t want to say they’re a rule breaker? As much as I’d like to make this claim, I’m really a rule keeper. Why? Because that’s the rule. WORDS OF ADVICE FOR THE NOVICE MARKETER? Two words: mobile and personalization. Rinse and repeat.

TECHNOLOGY, TRENDS & REWARDS

USING TECHNOLOGY TO GET TO THE NEXT STAGE IN THE LOYALTY LIFECYCLE
Milen Mahadevan
dunnhumbyUSA

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HE OPPORTUNITY AND THE CHALLENGE Mobile technology is one of the greatest things to ever happen for businesses with a loyalty proposition. It enables the delivery of ultra-personalized rewards, interactive customer experiences and services wherever the customer is, including at the point-ofsale. Even more promising, all of this is measureable. Strategies can be adjusted in real-time, in a test and learn environment so that the loyalty proposition becomes more precise and more sophisticated over time and more rewarding for the customer.

Yet, many businesses, and many loyalty or CRM programs, aren’t equipped to inspire this new breed of customer loyalty. Although many are armed with the data and channels to communicate directly and personally with their customers, many continue to adopt one-off tactics as the latest digital or tech opportunity arises. It’s not just a “shiny new toy” syndrome; it’s also the fear of being left behind in an industry with too many options. Today, we find that this creates a common roadblock in driving an emotionally-charged loyalty and realizing the benefits. Digital doesn’t mean that it’s personal. Going mobile won’t make your program successful. Social media fans are not always the best advocates. Loyalty programs or e-wallets aren’t guaranteed to produce a golden data nugget.

From its very foundation, a loyalty program should separate your tactics from the crowd and reward your customers below the line, with an approach that can’t be replicated by the competition. But many businesses approach loyalty programs as a discount vehicle. And in an industry rapidly advancing with technology, many businesses see loyalty as an area to cut costs and explore cheaper alternatives. Many businesses, therefore, frequently look for options that allow them to reduce benefits for the customer to cut the cost without considering the impact to the customer. According to a recent study by Forrester Research, loyalty marketers are often overly confident in their loyalty strategies. While marketers think that their loyalty program is effective and may even see steady engagement numbers, they often fail to increase retention and drive incremental behavior and value for the business. The problem plaguing loyalty programs isn’t surprising: Creating differentiation within a saturated loyalty market is a key challenge, particularly executing differentiated rewards that manage the delicate balance between driving discount-seekers and loyalists. THE LIFECYCLE OF LOYALTY If we look at the lifecycle of a loyalty program, there are several stages: The Moment of Truth is a critical stage of loyalty. It often occurs once the initial excitement of a program wears off and the business now has to demonstrate,

consistently, to the customer how their program and benefits are different from the competition. At the Moment of Truth, loyalty programs need to be evaluated using the following business criteria: • What do you want to enable from the business? • Is your program sustainable? Can it grow over time? • Does it give your business a competitive advantage? • Does it collect data? • Does it pay for itself? The customer is now the Chief Marketing Officer and realizing the benefits of a new breed of loyalty can only be achieved by involving them in the loyalty proposition upfront. They need to believe in it and believe that it is an authentic, customer-centric business strategy. Everything the business does, every new digital tactic they embrace or social media offer they celebrate, should work towards demonstrating that for them, loyalty is a way of doing business. You need a way to transcend the Moment of Truth into the next phase of customer engagement. So, equally as important, businesses need to evaluate their loyalty programs from the customer perspective: • Is it easy to understand? Is it hassle free? • Are the rewards and benefits attainable? • Is it inclusive? • Does it show me I’m valued as a customer?

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AS ALBERT EINSTEIN FAMOUSLY SAID, “EVERYTHING SHOULD BE MADE AS SIMPLE AS POSSIBLE, BUT NOT SIMPLER.” THIS IS VERY TRUE FOR LOYALTY.

DOING LOYALTY RIGHT The most sophisticated loyalty programs today, and the programs that are set up to realize the benefits of emotionally-driven loyalty, are leveraging technology to blend innovative loyalty mechanics into a loyalty philosophy. They have the flexibility to evolve and to use their customer data and insight to evolve in the right ways so that they continue to create new advantages for their customers. They are evaluating the technology landscape and the latest digital channels from the standpoint of the customer, “Will a mobile check-in for loyal customers help them achieve better discounts or experiences?” “Should we offer points toward an iPad purchase when they order online?” dunnhumby recently partnered with California-based grocery retailer Raley’s to launch a new loyalty program, Something Extra™. With the launch of Something Extra™, Raley’s established a platform that created a direct channel to communicate with individual customers, enabling them to reward and maximize their interaction with those customers. Across clients and loyalty programs, we know that this direct interaction with the customer is critical - it enables the loyalty program and the insights that drive the program to become more sophisticated and differentiated overtime, after the Moment of Truth. Raley’s Something Extra™ does include basic digital benefits. There’s very little paper involved in the sign up process, for example. But the thing that makes Something Extra unique

isn’t the technology or the digital elements, it’s the ability to understand high value shoppers in terms of the value they bring to the brand and their behaviors (based on what types of product they buy and the rewards they redeem). With this behavioral lens, and ability to interact directly with their customers, Raley’s can offer more personal, below-the-line rewards and experiences. The challenge in blending mechanics is doing it without overcomplicating the reward. As Albert Einstein famously said, “Everything should be made as simple as possible, but not simpler.” This is very true for loyalty. Something Extra™ takes a simple approach in its points-led rewards program: 1 point for $1. The more a customer shops at Raley’s or one of their other banners with their loyalty card, the greater and more unique the reward. With the behavioral-lens and a business model committing to delivering a customer-centric approach, the loyalty program enables Raley’s to offer experiences as rewards. For example, if a loyal shopper enjoys suggestions for wine pairings and entertaining, collecting enough points may come with an offer to tour a vineyard at a local winery, for example. Or if a mom on-the-go appreciates coffee while she shops, collecting 7 points could mean that she receives a mobile coupon for a free coffee drink in-store. This “surprise and delight” approach, aided by technology and digital personalization, is a vehicle for demonstrating how a business is loyal to their customers, and not the other way around.

In the next stage of the loyalty lifecycle, businesses have the unique opportunity to hone in on brand champions. After the launch of Something Extra, Raley’s launched Try-It, a social advocacy platform designed to complement and enhance Something Extra. With a single-sign on process, members of the loyalty program can join Try-It, and rewards and points are linked, giving the customer motivation to join. By joining Try-It, members can become advocates for the brand: they try products that they’re interested in, easily spread the word on social media about products that they love andoffers they receive, and interact directly with Raley’s. Advocacy is an outcome of a business’s ability to inspire an emotional connection. With the right technology and loyalty strategy, rewarding them for their loyalty, in a way that separates you from your competitors, becomes easier. They already like you, so like them back! L

Milen Mahadevan, Senior Vice President, Client Solutions, dunnhumbyUSA As head of Client Solutions and the Service Line organization, Milen is responsible for cultivating and expanding the company’s solutions expertise, including data, insights, communications and media that provide comprehensive solutions strategies for dunnhumbyUSA’s clients.

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TECHNOLOGY, TRENDS & REWARDS

Building Employee and Customer Loyalty though Gift Card Programs
Melissa Van Dyke
Incentive Research Foundation (IRF)

It’s In the Cards:
The Allure of Gift Cards Loyalty program owners across the U.S. seem to understand the ability of gift card products to generate this type of success. A recent study by the Incentive Research Foundation (IRF) found that the amount of money spent on business-to-business gift card programs is currently $22.7 billion. In an economy plagued with both systemic mandates to increase the productivity of human capital and low employee engagement, it is no surprise to learn that this study also showed a majority of gift card programs (63%) were directed to programs that promote employee loyalty. With more than half of businesses currently using gift card programs in some manner and the majority of program owners reporting that their future spend on gift card programs will either remain the same or increase, there is no doubt gift that card loyalty programs will continue to thrive in the next few years. So why have gift cards programs become so popular? A recent study by the IRF queried program planners to understand why. According to responses, the majority of program owners believed gift cards can be more personal, meaningful, and have higher impact than cash. In fact, almost half believed that, dollar for dollar, gift cards were the most effective reward available and more than 75% believed that they are among the most effective of all rewards especially in driving loyalty and engagement. Gift card recipients echoed these sentiments as well. When individuals who had received a reward in the past were asked what award type they most enjoyed receiving, 44% of respondents — the largest share by far — said that gift cards, not cash, was their favorite award type. Moreover, when offered a prepaid card or equivalent cash, five times the number of respondents chose the prepaid card over cash. Equally as important, however, is how recipients feel about the organization that provided the gift card. The good news to organizations currently running gift card programs is that 65% of recipients say they remember what they purchased with the card and the same amount link that positive memory of the gift back to the people or company that provided it.

I

t is no secret that organizations looking to build strong relationships with employees and customers can do so with well-designed reward

programs. What might be a surprise, however, is how successful non-cash versions of these programs can be. A recent study by Aberdeen showed that organizations that provide non-cash reward and recognition programs to employees had an average year-over-year annual corporate revenue increase of 9.6% versus 3% for all others. The same study also showed that that best-in-class companies (i.e. those with the highest increases in year-over-year sale and profitability) are more than twice as likely than all other firms to provide non-cash incentives and rewards programs.

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Program Design a Critical Factor
But, as noted it is only well-designed employee loyalty programs that will garner the intended results for supporting organizations. What does this mean? Research has shown that there are eight critical milestones imperative for designing and implementing non-cash employee loyalty programs. The following research-based model provides program owners with a high-level tool for designing, implementing and troubleshooting non-cash employee loyalty programs. All eight of these critical events must occur for a program effort to be successful. They include:

1 2 3 4 

ASSESSMENT: Management must determine the gaps between the company’s goals and employee performance that need addressing. Is it attendance? Sales? Customer Satisfaction? Management should also ensure they understand what specific behaviors are required to close these gaps. Lastly, managements should ensure employees already have the proper training and support tools they need to perform the desired behaviors.

5 6 7 8

SUPPORT: Employees must feel that management supports the program throughout its lifecycle. This requires careful attention to the way rewards are given, how the rewards are distinguished from compensation and the perceived fairness with which awards get disbursed.

PROGRAM SELECTION: Managers should ensure that the rules-design of the program is correct. Are you looking for a culture-based change targeted at all employees? Then a peer-to-peer scheme makes the most sense. Is the desired behavior shift more performance-driven, targeted, and concrete? If so, then a quota-based or piece-rate incentive model is more appropriate.

EMOTIONAL APPEAL: The biggest performance gains come when people become are emotionally engaged in a program and with an organization. With careful consideration, employee loyalty programs should have a positive impact on emotion and organizational spirit.

MEASUREMENT: At a minimum, employee loyalty programs should measure if employees are committing to an increase in the desired behaviors at program launch and then persisting in this change over the lifecycle of the program.

INCREASE VALUE: Employee loyalty programs should increase the value that individuals place on organizational goals and the desired behaviors. In sum, they should help employees focus. But to do so, the program has to provide communication and rewards that employees truly value. At a minimum, be sure to engage employees first in both the design and award selection elements of the programs.

ANALYSIS AND FEEDBACK: The loyalty program should be consistently monitored against program objectives and costs, and adjusted on a monthly or quarterly basis as needed.

TRAINING AND COMMUNICATION: One of the primary reasons programs fail is a lack of communications and training. Don’t squander the value of a potential program by investing in an elaborate launch, then forgoing a multi-medium, consistent communications campaign.

Melissa Van Dyke, President Incentive Research Foundation (IRF) Melissa comes to the IRF from her position as Managing Consultant of the Employee Engagement Practice at Maritz. Prior to this she held leadership positions in Solution Management, Product Development and Business Technology Solution Management.

75% believed that gift cards are among the most effective of all rewards especially in driving loyalty and engagement.
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TECHNOLOGY, TRENDS & REWARDS

CAUSES: HOW RETAIL LOYALTY PROGRAMS CAN BETTER CONNECT WITH MEMBERS
Mark Dority
KULA Causes

Retailers — as well as loyal customers and the causes they want to support — could get much more from their loyalty programs by acting as conduits for their customers’ charitable instincts.

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he business world is full of contradictions that make it clear how complex and challenging it is for companies to attract, build relationships with and retain customers. According to a recent study by Edgell Knowledge Network, retailers surveyed expect that, by 2015, revenues from loyalty program members will make up 58% of total revenues. It’s an optimistic outlook. However, these retailers also reported that customers who are members of their loyalty programs don’t seem to be any more brand-loyal than those who aren’t. Not only that, a whopping 81% of those retail loyalty members don’t even know what their program benefits are, or how and when they will receive them.

Despite the existence of a million and one loyalty programs of all descriptions — the average American household has 18 memberships and there are about 650 million loyalty members worldwide — this number shows that there is still a wide gulf between retailers and their most loyal customers. It also makes clear that even the smartest retailers can struggle to overcome the natural complexities of customer acquisition and retention in the context of their loyalty programs. Retail trade publication Retailwire recently published an article about the results of Edgell’s study. In the article, they point out that, all too often, loyalty programs offer rewards that aren’t worth the trouble it takes to redeem them. But there’s another problem: where’s the engagement? If 81% of retailers’ loyalty program members don’t know what their rewards are, let alone how they can redeem those rewards, then retailers are not making a meaningful enough connection with them on an individual level. Incorporating cause marketing into their programs — engaging customers through their cause related affinities — is a great way to bridge the engagement gap. For example, by allowing customers to donate unused rewards to causes they truly care about builds a much stronger relationship than a coupon or small percentage discount ever could. In fact, a recent article published by The Wise Marketer makes the point that, during tough economic times, discounts alone “lack the emotional touch” needed to build the kind of connection that makes a real difference for the customer when finances and economic stability rebound.

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Here is an example of how integrating cause marketing into a loyalty program structure could work:
• A teacher in her late 30s belongs to her favorite apparel retailer’s loyalty program. She’s a highly cause-conscious person, passionate about helping the homeless — she has made donations to a local food bank where she occasionally volunteers. • She’s also interested in helping relieve hunger in Africa, as she grew up listening to hits such as “We Are the World” and watching specials such as Live Aid in the ‘80s. As an adult, she has donated to an aid group distributing food in several African countries. • For its part, the apparel retailer thinks customer engagement with its loyalty program is good, but could be much better. It decides cause-related marketing is the way to do this and adopts an online giving platform that connects its loyalty members to millions of nonprofits — including those our hypothetical customer supports. • The retailer announces to all loyalty members that they will now be able to convert any reward points they don’t use into donations to their preferred causes. • Our teacher has a fair amount of points in her loyalty account, but currently has more pressing expenses than clothes. Knowing that she can put them to good use, she donates half to the food bank, half to the African aid group. Her goodwill toward the company brings her back for many repeat purchases later. In this example, it seems very unlikely that this customer will ever forget what her rewards are and how to redeem them — precisely because the retailer has engaged her through a cause that truly matters to her. The retailer has earned her repeat business — and increased its ROI. Research confirms that an increasingly cause-conscious consumer base worldwide wants companies to practice corporate social responsibility (CSR). And when a retailer supports a cause, it gains customer goodwill in return. This trend is very unlikely to reverse itself. In today’s constantly-connected world of smartphones, tablets and the 24-hour news cycle, the planet’s social ills are harder than ever to ignore. So retailers — as well as loyal customers and the causes they want to support — could get much more from their loyalty programs by acting as conduits for their customers’ charitable instincts. For most of us, supporting worthy causes is its own reward. It adds real value to our lives. And it can add real value for retailers who seize the opportunity to engage customers more deeply and meaningfully, fueling a self-perpetuating loop of loyalty that can last a lifetime. L

Mark Dority is the Director of Marketing for KULA Causes, an online giving platform that empowers brands to build more meaningful loyalty with their customers through their corporate philanthropy efforts.

Brands Don’t Offer Loyalty Consumers Grant It

New research indicates that when brands don’t connect customer data with marketing efforts, the results are inconsistent engagement that leads to lost opportunities, diminished results, eroded margins and fleeting brand value…engendering a loyalty divide. Consumers demand better, authentic connections based on value and brands must deliver. Discover the keys to consistent customer engagement in “The Loyalty Divide.”

Better Connections. Better Results.

Scan to download a full copy of the white paper, The Loyalty Divide, or go to www.acxiom.com/theloyaltydivide.

acxiom.com • 1.888.3acxiom

TECHNOLOGY, TRENDS & REWARDS

Michael W. Lowenstein, Ph.D.
The Relational Capital Group

LOYALTY PROGRAMS AS BEHAVIOR MAGNETS: DO THEY ATTRACT OR REPEL CUSTOMERS?

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ust about everyone is familiar with how magnets work. Two magnets can either attract or repel one another, depending on which pole each is facing. These dual powers of magnetism — connection and rejection — represent a great metaphor for loyalty program effectiveness.
Loyalty, or reward, programs classically have two basic intentions and objectives. One, which is often not applied to greatest effect, is to be an important method of generating customer profile data which can be used for targeted, even micro-segmented, marketing, promotion and communication initiatives. The other, and more classic, objective is to

leverage loyal behavior among the customer base, in and of themselves, and reduce the use or consideration of competitive products and services. It’s fair to say that, to meet both of these objectives, the program, and its array of components and perception of personal value, need to be optimal. Are loyalty programs achieving their goals? EVALUATING THE HEALTH OF TODAY’S LOYALTY PROGRAMS In 2010, the CMO Council conducted a study, The Leaders in Loyalty: Feeling the Love From The Loyalty Club, in which the key findings were that neither of these objectives were being met. The study concluded that companies sponsoring loyalty programs were just using them to deliver general discounts and perks to the mass of member-customers, ignoring the profiles within the database which would help provide more targeted and relevant communication and stronger value perception among program members. Among the

marketers in the study, only 13% felt that they have been highly effective in leveraging loyalty and brand preference among club members, and nearly 20% have no strategy in place for doing this. Further, nearly 30% of marketers reported that customers see little or no added value to becoming a loyalty program member, though they admitted that most program components have discounts, free products or premiums, rather than better service or improved customer handling. Very significantly, over half (54%) of loyalty program members surveyed in the CMO Council study were demonstrating antimagnetism, considering leaving the programs or defecting from the brands and companies sponsoring them, principally due to the onslaught of irrelevant and off-target messages, low or non-meaningful program benefits, and the impersonal treatment they receive as members. At the same time, it has been well-established in multiple studies that

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benefits on a regular basis, are over three times more likely to engage in recommendation and word-of-mouth communication than other members. Finally, those program members who have redeemed points earned for experiential rewards, and thus deepening the relationship between them and the sponsor, are 30% more likely to be advocates than those members who used the program for discounts and bounce-back offers. ONGOING LOYALTY PROGRAM PERFORMANCE CHALLENGES As powerful a positive marketing tool as loyalty programs can be, today, there are also multiple challenges faced by these programs as brand-bonding, relationship builders and sustainers. Customers often don’t understand the program components (because the program sponsors had inadequately researched or explained the benefits) nor do they see any particular value to them. Recent research by ACI Worldwide reported the following troubling results for retail loyalty programs: • Almost half (44%) of consumers said they have had a negative experience from a loyalty program • Only 27% of Americans who have received a loyalty program reward or promotion said that it made them feel valued as a customer • Over three-quarters (81%) said they are enrolled in a loyalty program that they don’t completely understand customers participating in loyalty or reward programs are much more likely to be positively communicating their experiences, and recommending, the product or service of the sponsoring organization than the remainder of the customer base. For instance, Colloquy has found that loyalty program members are 70% more likely to be engaged in brand bonding-type activity (positive word of mouth, etc.) compared to the general population. Over two-thirds of program’s strongest supporters will recommend the program’s brand within a year; and those who are most active, i.e. using • Over three-quarters (85%) of loyalty program members said that they haven’t heard a single word from a loyalty program since they day they signed up Further, once engaged with, or enrolled in a loyalty program, any change in message, positioning, or content is often viewed more with suspicion than acceptance or positive anticipation. Loyalty programs, already seen by too significant a proportion of customers as minimally valuable, must be especially careful with this. If they are disengaged with the loyalty program, or don’t see the value represented by

membership, customers will become passive about both the program and the products and services it represents; and they may become negative communicators or defect. Too many companies belong to the Field of Dreams “if you build it, they will come”, or conventional wisdom, school of loyalty program development. Namely, if they create what they believe, or what they are told, is a compelling program, with attractive customer benefits, the company will be rewarded with both more customers and more sales as evidence of loyalty behavior. Once built, customers may come, or they may not. And, they may spend more and say positive things about their experiences; or they may not. Recent research by The Hartman Group, a marketing consultancy, has determined that 74% of consumers agree that companies need new and better ways of rewarding loyal customers. So, many loyalty programs are suboptimal in effectiveness. Over the past few years, the number of loyalty programs, for both individual companies and through coalitions (especially for small businesses) has significantly increased. At this point in their history, there are four key and emerging trends for determining customer loyalty program success: a)  how it fits in driving a strong customer experience and relationship strategy b)  how flexible it is in terms of customer purchase, communication and redemption channels (with the emergence of technology for a digital, mobile contact ‘layer’) c) h  ow well it generates customer data (both ‘big’ and micro) d)  how well the enterprise culture, especially through employees as brand ambassadors, strategically supports and reflects the loyalty initiative, so the program is consistent with the overall experience To address each of these questions, we will focus on a world-class loyalty program, that of Boots U.K. Limited, formerly known as Boots the Chemist.
Continued on page 40

ONLY 27% OF AMERICANS WHO HAVE RECEIVED A LOYALTY PROGRAM REWARD OR PROMOTION SAID THAT IT MADE THEM FEEL VALUED AS A CUSTOMER
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TECHNOLOGY, TRENDS & REWARDS

BOOTS’ LOYALTY PROGRAM MAGNETISM
First, for those not familiar with Boots and its highly successful loyalty program, some quick facts: Boots was founded in 1849 in Nottingham, U.K. Globally, the company has over 3,000 stores, over 115,000 employees, and though privately held, is known to have several billion pounds sterling of annual sales. It is estimated that 90% of the U.K. population visits a Boots store at least once a year. While other retailers were diving into the loyalty program pool in the early 1990’s, Boots decided that there would be more learning, and more strategic value, in developing a program that was both unique and consistent with its brand image. Launched in 1993 after extensive research and fine-tuning trial, the Boots Advantage Card program is the third largest, most generous, and most valued program in the U.K, with more than 16 million participants. About 90% of active cardholders are women, representing nearly two-thirds of the adult females in the U.K. How does Boots’ loyalty program help deliver a superior customer experience? Through loyalty program participant profile information in its customer database, Boots is able to provide personalized, relevant offers and communications to members. More than just a loyalty behavior-leveraging device, this is a true customer relationship program. Several of Boots’ loyalty program initiatives (largely created through customer needs research) have built more perceived value for their customers: • The ‘Pure Indulgence’ personalized card enables Boots’ customers to customize how they redeem Advantage Card points (at a 4% on purchases reward rate, already much higher than most retailers) with a selection of over 10,000 products and services, such as a range of health and beauty treatments (through the quarterly Health and Beauty magazine, received by over 2 million cardholders). It is supported by frequent offers and promotions. They can also earn points at “Treat Street”, an online U.K. shopping service with over 90 well known brands. • ‘Advantage Point’ interactive store kiosks help Boots cardholders to get, while they are shopping at the store, new and personalized offers and incentives which are based on their prior purchases. This creates another value-add point of intersection — with the advantage that it’s also point-of-sale, between Boots and its customers. • The Advantage Program credit card, introduced in conjunction with Egg, the European online financial services company, uses smart-chip technology to simultaneously help Boots customers manage both loyalty program points redemption, check their credit card payment status, and make payments. How does Boots’ loyalty program generate more micro-targeted and actionable customer data? From the outset in the 1990’s, Boots has intended that data coming from their Advantage Card loyalty program help leverage more active, and more positive, customer relationships. Over 60% of Boots’ retail sales can be linked to program members, and the program database has provided highly actionable insights — program participants shop much more frequently than nonparticipants, and they typically spend over 50% more per transaction than nonparticipants.Over time, however, Boots management felt they needed to move beyond basic basket analysis and customer segmentation available through its loyalty program database, and the company began to use a Web-based approach for its analysis platform. The goals were to improve microtargeted, one-to-one marketing initiatives, as well as increase both the lifetime value and profitability of each customer. With the upgraded database, Boots has been successful in improving the quality and timeliness of analytics, as well as applying more customization at an individual customer level to program offers. The resulting increased personalization (now also through personal messages to customers in-store and on receipts) has improved response rates, enabled multi-channel campaigns, and help improve customer experience processes. Another key result of the analytical platform upgrade has been a centralized, real-time loyalty management system, which is available to a broader spectrum of Boots’ management. How does Boots’ loyalty programs help build an omni-channel customer strategy? For every company, giving customers mobile and online purchase, payment, and loyalty benefit redemption has moved the world beyond plastic. This helps both merchants and consumers to have a consistent experience, whether at the cash register, with a phone or credit card, online, or through a smart phone browser. For Boots, there is an integration of in-store, mobile and online loyalty program cross-communication and transactional access, enabling the company to create a more seamless, connected rewardsbased relationship with their customers. This not only facilitates evolving customer expectations for more personalized experiences, the omni-channel contact strategy provides interaction analytics for Boots’ customer database. It is helping the company better understand behavior on a more targeted basis, as customers move between online and store — using a mix of screen-related channels (mobile, tablet, laptop, and TV). The omni-channel needs of customers are emerging, especially for younger shoppers, and Boots will remain leading-edge with this set of capabilities. How does Boots dovetail loyalty programs with employee brand ambassadorship? Boots well understood that no loyalty program can truly thrive without the enthusiasm and support of staff. Reasoning that there were no better ambassadors for the benefits of loyalty program participation than frontline employees, the organization signed on all of its thousands of sales associates as charter members of the Advantage Club program six months before its actual launch. Boots’ store employees continue to be active, involved evangelists and ambassadors for the program, putting a human face on its value and benefits.

Continued: Loyalty Programs as Behavior Magnets

BUILDING FOR FUTURE LOYALTY PROGRAM ATTRACTION For all marketers, if they hope to build profitable purchase and positive offline and online communication behavior from loyalty program members as Boots has done, the tools for doing so exist within the program database, the customer profile dataset, and the elements of attraction of the program itself. First, companies should identify the strongest supporters (purchase, brand affinity, and downstream voluntary word-of-mouth) of program components embedded within their membership ranks, and there are actionable research segmentation tools to accomplish this goal. Then, they should build relationships that reward these members for their positive buying and word-of-mouth activity. Loyalty programs, used effectively, can be an excellent magnet for creating and extending customer brand-bonding behavior. L

Michael W. Lowenstein, Ph.D. CMC is Chief Research Officer for The Relational Capital Group.

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Does it matter what a customer says?
Mike McDonnell
Connexions Loyalty

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n a recent poll by Connexions Loyalty, more than 47% of loyalty marketing professionals indicated that surveys are their primary consumer research method.

3. C  ash back: An infrequent visitor to the site. He is only interested in cash back and wants you to make redemption simple for him. 4. P  rovisional newbie: All about learning. He wants to know why this is the right program for him and how to get the most value from it. We then used the personas as a sounding board and filter to validate that we were making the right decisions when we applied features to our user experience. Specifically, we went one by one through our possible features list and asked, “Does this apply to our personas or not?” For example, when a particular feature or request mapped directly to 3 of our 4 personas, it was an easy decision to include it in the site design. DEFINING YOUR COMPANY’S SUCCESS WITH PERSONAS The personas described above are highly relevant to many programs. However, we encourage you to use this process to define your own personas. Using personas as a research tool is about maximizing the value for your customers. It’s an approach that gives you confidence that you’re designing a solution your customers want and need. To measure the success of your persona research, there are a host of metrics that you should consider. Metrics may include conversion, engagement, interactivity, purchasing, product adoption, visits/web metrics and tenure. However, it’s important to know up front your overall business goals and metrics. Then use those metrics to guide what functionality you implement based on your persona research. L

Surveys help to capture peoples’ goals and attitudes about what they will do in a certain situation. The resulting data is terrific for validating information from a quantitative perspective.
However, surveys paint an incomplete picture. What people say and what they do are often different. Survey respondents don’t intend to lie; often they simply aren’t cognizant of the inconsistencies between their responses and actions. For example, a user might say, “I love to browse your site.” This suggests the need for site architecture featuring a very lengthy taxonomy with detailed menus. However, upon observation, you realize that they are actually searching, not browsing. They aren’t trying to be dishonest. They are simply using a different term for what they are doing than you are. This example shows that you need a 360-degree view of customers’ thoughts and behaviors before you make final design decisions about your site. Unlike purely quantitative survey methods, behavioral personas can provide real context to situations, helping with a more holistic view. Personas are fictional characters which capture representative behaviors, goals, needs, environments and attitudes of your customers. Understanding your customers through a lens of behavioral personas can drive a customer centric experience and increased engagement, converting them into true fans of your brand. Yet, according to our poll, 63 percent of loyalty marketing professionals haven’t used personas. A LOYALTY CASE STUDY We hired Professional Access, a leading information technology and management firm, to help overhaul the customer web experience related to our clients’ loyalty programs. Personas were the foundation of the design decisions. There were 5 main objectives for the user experience redesign: • Allow the user to drive the experience • Create a user community based in sharing • Evolve the experience based on knowledge • Engage the user in the experience • Deliver relevant features and functionality We performed detailed analyses of panelists’ behaviors when interacting with prototypes to determine what customers wanted. FOUR LOYALTY PERSONAS REVEALED The research revealed four main personas, all with their own unique behaviors, goals, needs and attitudes. Here’s a summary of what each persona values most in a loyalty program website: 1. A  ctive redeemer: A shopper who browses frequently for deals and trusted brands. 2. Saver: Focused on aspirational rewards with lower barriers to reach the value she believes she deserves.

Mike McDonnell is the Vice President of Product Management & Client Solutions for Connexions Loyalty.

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The newest name in loyalty with more than 30 years of experience.

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BEST BUSINESS PRACTICES

Mille nials : Enga ging The Digit al Gene ratio n
Jeff Fromm
Barkley, Inc.

Millennials want brands that encourage engagement and active co-creation instead of interruption and passiveness.
illennials are the generation everyone is talking about. With an estimated $200 billion in direct spending power and comprising nearly 25% of the population, Millennials are an undeniable demographic of individuals born between 1977 and 1996. Through a joint partnership with The Boston Consulting Group and Service Management Group, Barkley created an in-depth report on Millennials called, “American Millennials: Deciphering the Enigma Generation.” Through this research we learned that Millennials are not a linear, homogenous cohort. This generation is filled with different personalities, interests and talents and what makes this group tick is vastly different from generations past. Brand marketers: take notice. One of the first things to understand about Millennials is that they are digital natives. This generation grew up with texting, smartphones and knowing how to set the DVR before they could walk. While other generations may be wildly proficient in

M

today’s latest technology and social media channels, they are not native. They weren’t born in the age of the IPhone and wireless Internet. Today’s youth is immersed in all things technology. There are also several life themes among Millennials. For example, Millennials crave adventure—maybe not in the form of an exotic vacation but simply trying a new restaurant often does the trick. Millennials are also the most technologically savvy generation to date, as they are 2.5 times more likely to adopt new tech tools. Millennials seek peer affirmation and often ask opinions of their friends before making important decisions. Likewise, brands that associate with different causes are typically preferred by Millennials. Now that we’ve established a baseline for Millennials, let’s discuss what that means in terms of your business. If you’re a marketer, you’re probably wondering what do Millennials want from your brand. Millennials want brands that encourage engagement and active co-creation instead of interruption and passiveness.

Marketers should adopt a new model built around the “Participation Economy” that focuses on these points. Likewise, Millennials seek brands that are shareworthy and allow them to participate. The matrix below serves as an evaluation tool for brands to see where they rank in terms of participation and shareworthy. Brands that are high in each category will be favorites among Millennials.

Copyright© 2013 by Barkley. All rights reserved.

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Perhaps you’re wondering if anyone is actually implementing this model and the answer is yes. Several brands are currently excelling with Millennials, two of which are Warby Parker and Dollar Shave Club. Warby Parker, an eyewear line, allows customers to order several different pairs of glasses, which are delivered to their homes. The customer then has the opportunity to test out the different pairs of glasses to decide which ones to keep, and which to return and send back to the company. Then, for each pair of glasses purchased, Warby Parker donates a pair to someone in need. This brand receives high marks from Millennials because it provides the customer with different options and gives them the opportunity to donate to a worthy cause. Millennials like to express themselves and Warby Parker allows this in a multitude of ways. Another popular Millennial brand, Dollar Shave Club, has managed to disrupt the razor market through appealing and entertaining social media and a discounted product. For just $1 per month, customers can receive blades through the mail with a free handle for new customers. Dollar Shave Club founder, Michael Dubin, capitalized on an untapped opportunity by providing a large target audience with a

great product in an enticing and exciting way. Apprehensive about discounted razors? Just look at the traction Dollar Shave Club has made on Facebook, Twitter and YouTube and you might rethink your opinion. So maybe you’re reading this and thinking well my product doesn’t apply to Millennials and my core audience is older. Enter the “Little Bets” investment model. This model is designed to still invest 75% of your money with your core audience. We’re not encouraging you to abandon your faithful following. Simply use 20% of your money on emerging opportunities and the remaining 5% on your “blue ocean” opportunities. By taking small risks, you make way for the possibility of appealing to a new demographic and expanding your customer base.

So now that you’ve learned the ins and outs of this enigma generation, you might be asking how you retain this demographic and keep their loyalty. It’s clear that Millennials require a new strategy from previous generations so it’s time to throw out the value equation you learned in business school. Brand value no longer equals the sum of functional and emotional benefits divided by the price. Instead this age-old equation requires some revamping with the addition of participative benefits. By allowing Millennials to participate in your brand, you will be sure to maintain their loyalty. L

Jeff Fromm is Executive Vice President of Barkley, Inc. Jeff is regularly engaged on the topic of marketing to Millennials by organizations such as the Association of National Advertisers, NRF and 4A’s, as well as private groups. Jeff has more than 25 years of hands-on experience working on major brands including SONIC, Hallmark, Build-A-Bear Workshop, KC Masterpiece Brand BBQ Sauce and Payless Shoesource.

Copyright© 2013 by Barkley. All rights reserved.

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BEST BUSINESS PRACTICES

By the Numbers: Cabela’s Cobrand Card and Loyalty Program
C
Cabela’s is a leading specialty retailer and direct marketer, of hunting, fishing, camping, and related outdoor merchandise. Cabela’s provides key information into the performance of retail card programs from both the issuer and partner perspective. This information is generally not shared by large card issuers on single programs like Cabela’s cobrand card. Cabela’s operates 37 retail stores in the U.S. and 3 in Canada. In 2012, Cabela’s revenue was $1.8 billion of which $931 million was from online sales. Of the total sales, a whopping 29% of all 2012 sales were on the cobrand Cabela’s VISA. This is much higher than most other programs. Cardholders receive an acquisition bonus of $20 upon approval and an additional $10 after five purchases. The rewards program generates, 2% back at Cabela’s and Cenex (c-stores with gas aligned with Cabela’s) and 1% back everywhere else. The interest rates are typical: 9.99% interest at Cabela’s, and 15.19%-18.19% on all other purchases. Although the program isn’t particularly rich from a rewards perspective, it does provide meaningful rewards to customers and the strong store support has made it one of the largest retail programs in the country with 1.5 million cardholders 2012. During 2012, Cabela’s acquired 120,000 net new active accounts. Most programs never see this level of cobrand acquisition. That means each US store is acquiring over 200 new accounts per month with over 2,500 additional accounts per month coming from web, call center and other channels. Cabela’s has maintained these strong metrics over time and this reflects best in class performance. With a 32% reported approval rate, each store is generating over 20 new applications per day. Although the 32% approval rate is relatively low, the strong new account acquisition and very favorable loss rates demonstrate the remarkable organizational commitment to the program. This commitment is likely the single most

Jonathan Gelfand
Partner Advisors

obrand credit card partners often ask about the profitability of their program to the bank, and if they are receiving a “fair” share, whatever that might be. These are challenging questions to answer because each program is different, only limited information is shared, and benchmarks are confidential. Cabela’s, a well-known retailer serving outdoor enthusiasts, provides a great opportunity benchmark with, since as a public company with its own bank offering only this cobrand program, their information is relatively transparent.
important factor in driving these results. In 2012, the Financial Services division of Cabela’s generated $74 million in net income, or 23% of total net income. There were on average 1.5 million active credit card accounts in 2012, with each active account on average contributing $49 in net income, after intercompany transfers of revenue. Cobrand card partners can use this metric as a way of valuing the overall program contribution. THE FOLLOWING INFORMATION FROM THE 2012 ANNUAL REPORT PROVIDES SOME INTERESTING INSIGHT INTO THEIR FINANCIAL SERVICES’ BUSINESS: If this was a traditional cobrand program offered by a third party issuer, with a “general” spend royalty of 30 bps and a $75 per account bounty, there would be an additional expense of $51 million for spend share and $7.5mm for new accounts for a total partner expense of $58.5 million. Some of these expenses are captured in

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BEST BUSINESS PRACTICES

Net Expenses since there is a 70 bps intercompany charge as well as other reimbursements to the retail and direct business units. Even excluding those costs and limited economies of scale, with an additional load of $58 million in expense the program would still be profitable with a low, but still profitable return on outstanding balances of 0.5%. If the 70 bps is backed out, then the return on outstanding balances would be a very strong 4.5%. Since Cabela’s acts as both the issuer and the partner, its share of the revenue pie is 27% higher than it would be if Cabela’s received industry standard partner compensation. Relative to the value created by a non-cobrand, generic credit card, the Cabela’s program demonstrates the value of a cobrand partner to an issuer. Two key expense drivers, acquisition cost and net credit losses, demonstrate this point. Since Cabela’s acquires most accounts at point of sale, there is limited direct mail expense to the P&L. If an issuer used direct mail to acquire the same number of accounts, assuming an average $200 acquisition cost per account, an incremental $20 million of expense would reduce the return significantly. The same is true with loss rates. Cobrand cards tend to have much lower credit losses. Assuming an average 5.5% loss rate instead of the rock bottom Cabela’s loss rates of 1.9%, loss expense would be $127 million higher. Said another way, if you replaced the Cabela’s portfolio with average, non-cobrand performance

and expenses, the program would lose a great deal of money. The lesson here is that cobrand partners create tremendous value relative to issuers’ generic card businesses. That is why great programs see such great interest from issuers. The value created by well-run cobrand programs like Cabela’s can extend to affiliates as well. For example, Cabela’s cardholders get an extra 1% in points for purchases at Cenex, regional gas retailer affiliated with the Cabela’s card program. Cenex saw an 18% increase in cardholder purchases with a 49% increase in transactions and an 81% increase in sales. Visa member activation increased by 7%. This sort of successful program expansion offers a useful benchmark for cobrand partners evaluating a wider and more comprehensive value proposition. Value is created for both the cobrand partner and the affiliate. The customer wins. THE CABELA’S PROGRAM OFFERS THREE GREAT “WALKAWAYS” OF GREAT IMPORTANCE TO ANY COBRAND PARTNER, OR A COMPANY CONSIDERING A COBRAND CARD PROGRAM: 1. Understanding how your program compares to others is an important way to identify opportunities to maximize the benefit of your program. A comprehensive benchmarking is the first step to increase overall program value and help you reach your overall customer engagement goals.

2. A cobrand program succeeds only when it directly ties into and supports broader customer engagement goals. That is clearly the case for Cabela’s program. Ensuring your program is working as hard as possible to support your goals is the objective. It shouldn’t exist as a standalone silo, or a simple benefit for your best customers (who are likely already loyal to you). 3. If properly structured and implemented, a well-run cobrand program is an extremely valuable financial asset, especially in comparison to the generic alternatives open to issuers. It is worthy of a comprehensive approach just like any other business unit operated by the partner, and within a deal structure in alignment with the issuer. By benchmarking value, creating a program supportive of broad goals, and implementing the program as a core product offering, cobrand partners can create substantial value for the most important asset of all — your customer. L
Note: All information was publically available from Cabela’s financial reporting, investor presentations, and trade articles covering Cabela’s.

Jonathan is Managing Director of Program Definition and Development at Partner Advisors since 2007. Prior to Partner Advisors, Jonathan worked in marketing at American Express, Washington Mutual (Providian), D&B, ADP, and P&G.

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BEST BUSINESS PRACTICES

LOYALTY COMMUNICATION TACTICS FOR THE GENERATIONS
Dana LaSalvia
Rymax Marketing Services, Inc.

E

mployee buy-in through all levels of the organization is one of the biggest challenges facing any incentive program manager. The key to employee buyin starts with a strategic cross-promotional multi-channel communication plan that ensures all employees understand the program’s goals, visions, direction and their role in the company’s success. Yet with five generations currently in the workforce, a single message will not effectively reach your audience. Therefore, you must develop a communication strategy that appeals to each generation.

vehicle, it’s important to know when to use each tool and how to compliment it with the appropriate language. TRADITIONALISTS GET IT IN WRITING While most Traditionalists expected to retire by now, many are still working due to the uncertain economy. Research conducted by the Journal of Behavioral Studies in Business shows that written and face-to-face communication is the most effective engagement method with this segment. Formal recognition events such as a President’s Forum, awards ceremony, years of service banquet, or a sales incentive trip are excellent opportunities to recognize this group. To complement in-person events, formal recognition letters, certificates of achievement, and top performer awards make for a memorable and personalized recognition experience. Language should focus on your appreciation of their hard work, effort and loyalty. Stick to the tried and true formal event recognition methods to drive engagement. BABY BOOMER DIARIES Boomers are known for their work ethic. They appreciate being treated as individuals and, according to the recent article authored by Jill Wangler titled “Multigenerational Marketing: Targeting the Boomers,” respond best to “lots of you words” such as “you are important, you are valued and we need you.” It’s important to recognize each individual’s contributions and efforts. The Journal of Behavioral Studies in Business found that this segment reads newspapers, magazines and ads more frequently than other

demographic. Print media that is heavier on text than visuals is an excellent tool to engage these employees. Newsletters highlighting company and individual achievements, program brochures, and posters in the cafeteria will all communicate success and connect these employees with your company’s goals and objectives. Statistics are continuing to show that baby boomers are becoming more online savvy. That makes email an effective communication tool. Utilize email for on-the-spot recognition, e-certificates, and program reminders that prompt managers to acknowledge employee achievements. Keep in mind, however, that Internet usage does not translate to high social media consumption. Boomers will not gravitate towards social media for program information. THE GEN X DIGITAL JOURNALS This group works hard and plays hard. They appreciate straight talk and less formality, demanding trust and expecting their organization to follow through on their promises. Their communication style is more informal than Traditionalists and Boomers. The study “Marketing to the Generations” states how they appreciate “straightforward facts, candor and honesty.” Short sound bites work best, as this matches their informal communication style. Reaching Gen X employees through social media can give your program the hook it needs to create employee buy-in and inspire this group to stay engaged throughout the year. Optimal routes for generating program

The power of using a variety of communication tools that complement each other allows you to streamline your message and efficiently capture everyone’s attention to keep your employee recognition program front of mind. By customizing the message, changing your language and using the right technology for each demographic, you can leverage these differences and improve your program’s engagement tremendously. ONE SIZE DOESN’T FIT ALL As an engagement program manager, become familiar with your employees’ demographics and psychographics. Instead taking a one size fits all approach, understand the characteristics of the five generations and the channels they respond to most favorably. Corporate goals and engagement tactics can be reinforced through multiple touch points like print, mailings, surveys, and social networking, just to name a few. Because each group will respond differently to each communication

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BEST BUSINESS PRACTICES

buzz and creating excitement are peer-topeer recognition on Facebook and Twitter, online forums, and company blogs due to the instant reception of messages. Although technology plays a strong part in their professional and personal lives, Marketing to the Generations finds that they respond well to direct mail. This provides an opportunity to use printed pieces to showcase program reward offerings to promote program participation. Many of same print collateral utilized for Boomers and Traditionalists can be incorporated into your communication strategy for Gen Xers, but with less formal messaging. Due to their entrepreneurial spirit, Gen X wants to share their feedback and opinions about their own performance, company goals and program parameters. Solicit their ideas via online surveys to gauge their engagement levels and increase their program participation. Company sponsored social events are also an informal way to discuss their overall thoughts while also promoting peer-to-peer recognition. With Gen X, using social recognition platforms to communicate is always the way to go. SOCIAL MEDIA AND MILLENIALS EXPLAIN IT ALL Millenials are the digital generation, born with access to technology. This constant access translates into their professional lives as a 2012 survey by Cisco found that 56% of college students would not accept a job from a company that bans social media. Any successful incentive program must use social media to reach and retain Millenials. Targeted employee engagement messages for this group are crucial as they change jobs frequently without any social stigma attached. Friedman states, “Millenials do not have a strong sense of employee loyalty,” making communication to your employees in this demographic even more important in order to keep and retain top talent. Also known as the “trophy generation,” they have come to expect constant and consistent praise from management. On-the-spot recognition via SMS, social media pages, and mobile devices emphasize immediate praise while utilizing this segment’s preferred methods of communication. Email is passé for this group, as 41% of colleges students stated that email is dying out, according to a survey by AWeber Email Marketing.

Looking for a unique way for your program messaging to resonate with Millenials? Target your organization’s “brand ambassadors” the employees with the most unique ideas and innovative strategies. Because Millenials rely heavily on their peers for approval, utilizing these “trendsetters” is a cost-efficient method to spread your program’s message that is not only fun, but will leverage your strongest employees to drive engagement amongst their peers. GENERATION Z MEETS WORLD Born after 1990, Gen Z, also known as iGeneration or the Connected Generation is entering the workforce for the first time. Gen Z is also notorious for technology multi-tasking, as it is common for them to watch a movie on a tablet while also engaged in a video chat session. What does this mean for your incentive program communication strategy? Consider that this instant Web access has led to a group with shorter attention spans than previous generations, but a stronger reaction to visuals as stated in Marketing to the Generations. In order to keep your program top of mind, utilize a variety of media tools such as internal blogs, two-way communication via Facebook, e-blasts, newsletters,

intranet portals, and banners that tout peer-to-peer social recognition to help these employees relate personal goals to the company’s corporate goals. Offering an online rewards platform and downloadable program App will help to increase engagement with Gen Z. Because they expect instant gratification, a program rewards app is the way to go. ANALYZE AND ADAPT Traditionalists, Boomers, Gen X, Millenials and Gen Z each have their own set of values, a unique way of communicating and viewing their organization and their role in it. Analyze the data and unique communication characteristics of each group to build an effective communication strategy for your incentive program. Remember goals and engagement tactics should be communicated consistently through the year to each demographic group. By utilizing a strategic mix of communication tactics for all generations will drive engagement and loyalty among your most valued asset, your employees. L

Dana LaSalvia is the Senior Director of Marketing for Rymax Marketing Services, Inc.

STATISTICS ARE CONTINUING TO SHOW THAT BABY BOOMERS ARE BECOMING MORE ONLINE SAVVY. THAT MAKES EMAIL AN EFFECTIVE COMMUNICATION TOOL.

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LOYALTY FORUM: BOOKS

LOYALTYREADS

Loyalty 3.0: How to Revolutionize Customer and Employee Engagement with Big Data and Gamification
Rajat Paharia
Publisher: McGraw-Hill (June 2013)

Learn the secret to using big data and gamification to motivate, engage, and engender true loyalty among your customers, employees, and partners. As our lives move online and nearly everything we do is being mediated by technology, all of our activity is generating reams of data—we are all “walking data generators.” Loyalty 3.0 reveals how to combine this “big data” with the latest understanding of human motivation to power gamification —the data-driven motivational techniques used by game designers to stimulate engagement, participation, and activity. With this potent combination, businesses now have a powerful engine for creating true loyalty among their customers, employees, and partners, and for generating a sustainable competitive advantage in their markets. Loyalty 3.0 is a book that will redefine how you think about loyalty, and will open your eyes to the power of data to engage and motivate anyone, anywhere.

The Loyalty Leap: Turning Customer Information into Customer Intimacy
Bryan Pearson
Publisher: Portfolio (May 2012)

Collecting data is easy for marketers. Figuring out what to do with it is hard. In his book, The Loyalty Leap: Turning Customer Information into Customer Intimacy, LoyaltyOne President Bryan Pearson draws on more than 20 years of first-hand experience in building emotional loyalty in an information age, with insightful stories from the trenches of the data-gathering and marketing communications fields. Pearson details the strategies for building unwavering customer loyalty while also navigating the minefields of privacy. While other business books address customer service and data as the abstract fruit of technology, only The Loyalty Leap reveals how shopper data can be used as the cornerstone upon which to build intimate customer relationships, leading to profitable growth in the new era of marketing. The Loyalty Leap brings to life: • The four major economic forces that are converging and redefining the role of loyalty, through relevant communications that engage consumers when they want, wherever they are • The common myths behind the privacy debate and a challenge to critics who equate data-usage marketing with for-profit spying • The powerful strength of Enterprise Loyalty, and the role of front-line employees in building relevancy through the use of customer information • How to close the customer commitment gap through meaningful communications, including through social media • The difference between customer intimacy and loyalty, and how to use intimacy to drive growth • Five principles for using customer data responsibly while recognizing the concerns and debate about privacy—thus enabling the loyalty leap. Pearson leverages two decades of frontline “ experience with loyalty programs to give marketers sound strategies for navigating the world of privacy and data integrity. The Loyalty Leap is extraordinarily insightful and clearly illuminates how to successfully manage customer information—the greatest asset in the digital age.
Don Tapscott bestselling co-author of Wikinonmics and Macrowikinomics

Roadmap to Revenue: How to Sell the Way Your Customers Want to Buy
Kristin Zhivago
Publisher: Bristol & Shipley Press; April 2011

Loyalty comes from relevance—relevant messages, actions, and reactions. It’s dangerous to guess what will be relevant to customers, although that is what everyone does. Instead, you can call 7 - 10 current customers, ask the right questions, and know exactly what you should be doing to make it easy for future customers to buy from you—and keep coming back. Written by revenue coach Kristin Zhivago, Roadmap to Revenue: How to Sell the Way Your Customers Want to Buy, reveals a simple but powerful process for converting your company from company-centered to customercentric. Every company is unique; what worked for another company will not necessarily work for you. If asked correctly, your own customers can tell you exactly what would increase their loyalty to your organization.

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LOYALTY FORUM: BOOKS

Can’t Buy Me Like How Authentic Customer Connections Drive Superior Results
Authors: Bob Garfield & Doug Levy
Publisher: Portfolio (March 2013)

Today’s brands face an apparent choice between two evils: continue betting on their increasingly ineffective advertising or put blind faith in the supposedly mystical power of social media, where “likes” stand in for transactions and a mass audience is maddeningly elusive. There has to be a better way . . . The good news is that some companies have already embraced the Relationship Era and are enjoying consistent growth and profits while spending substantially less on marketing than their competitors. The authors show what we can learn from case studies such as . . . • • • • Patagonia, a clothing company with a passion for environmentalism, which solidified its customer relationships by urging people NOT to buy one of its jackets. Panera Bread, which doubled per-store sales by focusing on ways to create a welcoming environment while spending just 1 percent of sales on advertising. Secret, the women’s antiperspirant brand, which gained significant share by focusing on its commitment to strong women. Krispy Kreme, which has built a near cult of loyal Facebook and Twitter fans, all but obliterating the need for paid advertising.

Blending powerful new research, fascinating examples and practical advice, Garfield and Levy show how any company can thrive in the Relationship Era.

The CMO Manifesto: A 100-Day Action Plan for Marketing Change Agents
Author: John F. Ellett
CreateSpace Independent Publishing Platform (November 2012)

The CMO Manifesto—A 100-Day Action Plan for Marketing Change Agents is the essential guidebook for marketing executives who have been chartered to disrupt the status quo and become leaders of positive change at their companies. Based on research with successful CMOs from leading firms such as Anhueser-Busch, Fidelity, GE, General Mills and Proctor & Gamble, the book combines stories, insights and tools to help marketing executives maximize the impact of their critical first 100 days. Through 12 practical steps, The CMO Manifesto provides a clear, actionable roadmap of activities essential to the success of any marketing executive. Take the lead. Make an impact. Create change.

Driving Loyalty: Turning Every Customer and Employee into a Raving Fan for Your Brand
Kirk Kazanjian
Publisher: Crown Business (April 2013)

Must-reading for every manager, entrepreneur, corporate executive, and anyone looking to increase customer satisfaction, boost employee engagement, and significantly enhance the bottom line. In order to build a successful company today, you must create an unbreakable bond of loyalty between your customers and employees. Few have done this better than Enterprise Holdings, owner of the Enterprise, National, and Alamo rental car brands. While Enterprise has long been known for offering excellent customer service, it faced a huge challenge after buying National and Alamo in 2007. Among other things, it had to integrate different cultures, manage a varied workforce, and meet the needs of a much larger and highly divergent customer base. In Driving Loyalty, you’ll get an inside look at how Enterprise began operating these three distinct brands in a way that ultimately led to rising profitability and some of the highest customer and employee satisfaction scores in the industry. You’ll also discover how other thriving companies—from JetBlue and Starbucks to Costco and even Chobani Yogurt—use similar techniques to outsmart the competition and turn customers and employees into raving fans. Driving Loyalty provides a blueprint that businesses of all types can use to deliver exceptional customer service, create a high-performing work environment, build strong brands, instill loyalty, market effectively online and off, and, in turn, power overall performance.
Loyalty Management™ • SECOND QUARTER 2013

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LOYALTY FORUM: DEBATE

LOYALTY DEBATE:

CUSTOMER LOYALTY

VS.

CRM

How are they different or are they the same?
T
he Loyalty 360 LinkedIn group recently engaged in a great debate when David Thomson, from Canada Post, asked for the group to comment on the differences between loyalty and CRM. We thought we’d bring you some of the highlights. Hear what your peers had to say and join the conversation on LinkedIn we’d love to hear from you! ging myself, I remember when CRM was the shiny new thing; that was the question I asked. Over the years though, my jaded definition = loyalty is the end game. We all want, need, aspire to have long loyal customers. CRM is a (very important) tool to manage information about the customer and the company’s relationship with that customer. Processes 3) People. All needed to be considered to develop an effective customer relationship management system. Loyalty on the other hand dives deeper into the behavior of the customer. The obviously end goal is to maximize the purchase frequency, the purchase spend and the customer lifecycle. Again, technology, processes and people all need to be considered when developing and managing initiatives to drive bottom-line loyalty results. Our personal view is that CRM and Loyalty should be completely integrated.
-David Gee, Bungee Loyalty Programs

balance between offering the right types of incentive for the right customers in a way that has a meaningful impact on your business. By tracking actions that demonstrate loyalty and layering those behaviors on top of social data and purchase activity, you get significantly closer to a full “360 degree view” of your customers.
-Matt Brown, 500Friends

A

C

-Erin Raese, Loyalty 360

A

M

y views are as follows...Customer Relationship Management should be defined as methodology of harmonizing touch points with customers and prospective customers. Many erroneously see CRM as simply software. There are 3 core elements to CRM: 1) Technology 2)

n effective CRM acts as your window into each customer’s profile and, ideally, - Garret Ippolito serves as a repository that tracks every interaction between your brand and your n one short sentence, I would say: customers, whether that be in the form of “Effective CRM results in customer loyalty.” purchases, newsletter subscriptions, On the flip side: “Suppliers being LOYAL to product reviews, social activity, etc. their customer base is reflective in their A loyalty program should maximize the CRM. opportunities your customers have to engage with your brand while maintaining a - Stefana Vella, Leica Geosystems Mining

RM is the 360 view of your customer, loyalty is the emotive — that which is earned through a rewards program, stellar customer service and/or a differentiated customer experience. I think Bill Hanifin said it best: ‘If CRM is the plumbing, loyalty is the water running through that plumbing.’

I

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I

feel a bit different from the majority. To me loyalty programs are subset of CRM. For maintaining customer relationships loyalty programs are just one way and then you can go a lot beyond which includes personal attention, personalized deals, offers etc...

T

o put it simply: loyalty programs enable CRM by creating customer addressability and the corresponding insights (transactional, social, etc.). This is where not only the terms loyalty marketing and CRM overlap, but the practice(s) as well.

So CRM is the bigger picture to improve customer loyalty but loyalty programs alone are not enough to improve loyalty.
-Sanjay Agrawal, MintM Loyalty Services Pvt Ltd

-Phil Rubin, rDialogue

C L

S

ometimes the word ‘loyalty’ as in ‘customer loyalty’ gets confused with the term ‘loyalty program.’ When people use the term ‘CRM’ interchangeably with ‘Loyalty’, they’re likely referring to a customer-centric marketing strategy.

RM is an umbrella strategy of knowledge-based customer centricity; a loyalty program is a tactical tool — often a critical one — to implement that strategy.

appreciation, a willingness to share information/insight on the individual’s preferences, beliefs, attitudes and motivations due to the mutual expectation of gain. You can do CRM without Loyalty. You can even get customers to share their information and allow a window into their world without points or an equity relationship.
-David Slavick, FTD.com

- Howard Schneider, Metzner Schneider Associates

C

A loyalty program is a key component of a CRM strategy. Loyalty programs compel customers to identify themselves at each transaction, which in turn gives the marketer access to the behavioral data tied to each specific customer. With transaction data tied to individuals, loyalty programs offer a granular level of customer data that is needed to fuel a CRM strategy.
- Michelle Tempesta, Paytronix Systems

oyalty is an amorphous term (it is adaptive to the situation or topic or context in which it is being discussed — thus the different interpretations). CRM — is a handy acronym — when used as customer relationship management, in that context it is the all encompassing approach to driving better metrics and ROI from customers. A program — call it a loyalty program, a 1:1 marketing program, a recognition and reward program — something that has a foundation, a core, an operational cadence, a commitment to execute over a matter of months or years ultimately builds affinity,

RM covers all the customers (loyal or non-loyal). Organizations cannot afford to ignore non-loyal customers just because they have loyalty programme in place. Agree that loyalty programme gives them an insight into their regular customers and subsequently categorize them based on various factors. However, that is not end to all. Your interactions with all the customers at various touch-points paves the way for your success. That needs continuous improvement and your CRM system helps you to do the same.
- Ajay Nerkar, ITC Infotech

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LOYALTY FORUM: TRENDING NOW

TRENDING

NOW

Customer engagement continues to evolve in the omni-channel marketplace. This year’s Super Bowl invited consumers to engage with their favorite brands in a new way. Interactive ads invite people to become engaged brand followers (pre, during and post) game to vote, share, tweet, and even build the brand story, crossing, television with social loyalty to bring omnichannel to a new level of engagement. Pair this with television shows like Fashion Star, which allows consumers to hear from top executives with their favorite retail stores (and the upcoming designers filling their shelves), and then provide the opportunity of instant gratification — and personal involvement — when fans of the show, the designer and the brand can buy items seen on the show in store (the next day). Truly, engaging fans on a new level!

INTERACTIVE MEDIA

Brands to Check out:

• Express • Coca-Cola • Anheuser-Bush

Connecting social media to loyalty, by incentivizing loyalty, engagement and advocacy. No matter the channel or method in which the customer reaches out to connect with your brand, there are now ways to track and reward their behavior! Likes, Tweets, photos, check-ins and social shares are all worthy demonstrations of brand loyalty, and companies today are showing their customers their gratitude! Pair this with existing loyalty spend and get platforms for even greater data, VoC and customer relationship opportunities.

SOCIAL LOYALTY

Who’s connecting the social sphere to loyalty today?

• Miami Dolphin’s, The Fin Club • Starwood • Tasti D-Lite

Don’t toss out the paper & plastic! The new digital era with mobile wallet and NFC opportunities aren’t replacing the old with the new, but simply adding an option for tech savvy shoppers. Marketers and print specialists confirm, that the paper and plastic options are still preferred by many consumers (and can even add prestige — see Starbucks Metal Card). The added benefit of a mobile option just enhances the selection of communication and payment possibilities but isn’t replacing the standard-bearer just yet!

KEEPING THE OLD WITH THE NEW

Companies offering both mobile and plastic (or paper) options:

• Starbucks • The Home Depot • Daily Deal Sites (Groupon & Living Social) • American Airlines

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we're here to guide you along the way.

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 loyalty .org

EXPO INSIDER

Key Themes From Loyalty Expo
By Blueye

HOW TO MAKE AN IMPACT:

THEME: MEANINGFUL CUSTOMER INTELLIGENCE WILL HELP IDENTIFY OPPORTUNITIES AND INCREASE PROFITABLE CUSTOMER RELATIONSHIPS. HOW TO: • Social is a Source of Business Intelligence. Leverage Facebook Data and Capture Behavioral Data through Customized Applications to Learn Key Insights on Customers—such as Preferences and Purchase Intent. • Utilize an Evergreen Platform to Collect & Segment these Key Insights in Real-time. • Create Actionable Campaigns that Re-Target These Customers Based on Preferences, with Turn-key Facebook Ad Creation, and Email Campaign tools. • Measure Post-click Conversion to Track Campaign Performance Back to ROI. Best Practice: Use a Flexible Always on Social Data & Analytics Platform that Allows you to Create, Manage and Monetize Multiple Campaigns. THEME: “LITTLE DATA = BIG IMPACT” HOW TO: • Big Data can be Overwhelming. Start Small and Make Collecting Data a Priority with Marketing Efforts. • lncentivize Customers to Share their Data by Offering Reward. • Centralize Data. Once you Collect ‘Little Data’—Use it. • Details, such as “What a Customer Wants” are Important. Personalize Communication via Online Channels and make Customers feel Special. Best Practice: lncentivize Customers to Sync their Social Accounts with a Reward or Benefit. The Positive Outcome for the Brand. DATA!

THEME: CREATE PERSONALIZED EXPERIENCES FOR CUSTOMERS. HOW TO: • Relevance is Key. Customers Want Experiences that are Personalized. • Build Applications that Offer Utility to Customers. Like “Plan a Trip.” • Define Attributes that You—The Brand ‘Want to Know’, that will Help Build the Most Relevant Experience and Drive Customers to Back Again and Again. Best Practice: Match the Lifestyle of Your Brand with a Unique Experience for Customers. THEME: EXAMPLES OF COMPANIES DOING SOMETHING UNIQUE IN LOYALTY HOW TO: 1. Starbucks’ Mobile Application is a Great Example of Offering Utility & Reward for Purchase—This is a Great Approach that can Work for Retail and Restaurants. Best Practice: Integrate Mobile into Loyalty Programs.   Kimpton Hotels Knows Me. TheirApproach to Loyalty is Personalization. Best Practice: Surprise & Delight.   Starwood Hotels Makes My Travel Wish Come True.   Best Practice: Let Customers Build Their Experience & Reward them by Offering Relevant Discounts on Items they have Personally Selected. L

2.

3.

BIG DATA CAN BE OVERWHELMING. START SMALL AND MAKE COLLECTING DATA A PRIORITY WITH MARKETING EFFORTS.

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EXPO INSIDER

EXPO 2013!

from Loyalty

SNAPSHOTS

Loyalty Management™ • SECOND QUARTER 2013

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LOYALTY FORUM: Q&A

A Personalized Experience: How Much is Just Right?

Q
A:
1. 2.

I’d like to empower my employees to provide a personalized customer experience. How do we enable a personal experience without crossing the line to creepy? Any recommendation as to what type of information is appropriate to provide employees; how much is too much?

Handing over this level of customer interaction to employees can be a little unnerving. Customer intimacy can be a tricky subject and you are going to want to ask yourself these questions before proceeding: If the engagement will be via social networking channels, is this employee good face-to-face with customers? Have they demonstrated discernment in person? How well does the employee understand the customer-product relationship? In other words, does the employee understand what elements of your brand, product or service that customers are really passionate about? The better they understand this bond, the more likely they are going to be able to create a great experience rather than a creepy one. Understanding the opportunities for creating great experiences starts with listening. As well, the more the employee knows about the brand and product offering, the less likely they are to do something that crosses the line.

BJ Emerson
VP Technology | Planet Tasti

...does the employee understand what elements of your brand, product or service that customers are really passionate about?
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LOYALTY FORUM: Q&A

A:

First of all I would like to commend you on taking a thoughtful approach to deepening your customer experience and considering and enabling your employee’s talents in this connection. For many companies it is this front line where the rubber meets the road and where customer experience and happiness is most prevalent. Based on your industry, channel and overall tone, I can see creating a richer experience in many ways. But you don’t have to necessarily share intimate and private data with your employees to achieve this personal connection. We are living in a world of systematic responses, outsourced service centers, IVR’s and impersonal communication. A small diversion from this may have a profound effect.

A:

Your question is not an uncommon one. Marketers today are faced with a paradox where consumers are demanding more relevant communications and personalized experiences from brands, while feeling increasingly concerned about privacy and the way their personal information will be used.

Customer preferences change, and what is relevant at one moment, may no longer be relevant later.
In a recent national loyalty study, we (Maritz Loyalty Marketing) asked over 6,000 consumers about their experience in, and satisfaction with, loyalty programs. Our study revealed that Member satisfaction is highly correlated with the extent to which Members find the communications they receive relevant. Ironically, the very customer information that marketers seek to capture in order to evolve their efforts away from a one-sizefits-all approach, is the very information that customers are reluctant to provide — the ‘personalization vs. privacy’ paradox in action. So, how can today’s marketer successfully navigate this proverbial customer privacy minefield? The best person to answer this is your customer. In the meantime: Ask permission, and be transparent. Being transparent with customers about what is being captured and how and by whom the information is to be used — and in turn gaining permission — will ensure that marketers’ efforts to create personalized experiences will be viewed as surprising and delightful, rather than creepy and weird. Ask Again. Customer preferences change, and what is relevant at one moment, may no longer be relevant later. Similarly, what is considered impermissible today may be widely adopted tomorrow. Avoid the set-it-and-forget-it approach to customer preferences, and take stock frequently of what your customers want. Honor the social contract, not just the legal contract. Marketers should be guided not only by the legal contracts between brands and customers (e.g., opt-ins, anti-spam legislation, etc.), but equally importantly, by the social contracts into which customers have engaged with brands. The foundation of this is trust. L

Customers may feel a personal connection through a free form response to an email or other digital inquiries that contain a “human” element in lieu of a generic pre-written “insert name here” communication. In your interactions online or in person ask them how a product or service recently purchased is going. Use the data you have to note events or prior items/services this person purchased or used given it’s within context. Do they want to try something new, or do they still have the same needs? Sometimes asking a customer some simple questions like this will open up the dialogue for your associates to tailor the customer’s experience on the fly to match the tone and personality of the situation. It is this one to one relationship that your employees build that will result in a truly personalized experience and interaction with your brand. In the end you have to have a clear tone and experience you want your employees to deliver. This is through clear direction from the top and training. Empowering them to make their own choices and allowing them to infuse their personality into the interaction is key, not just the data. Instead of coming across contrived and rehearsed, they will appear rather fun and engaging – a place your customers will want to come back to, possibly asking for that employee by name again.

Empowering them to make their own choices and allowing them to infuse their personality into the interaction is key, not just the data.

Natalie Shatzman
Vice President, Global Issuer Rewards Cardholder Solutions, MasterCard Worldwide

Scott Robinson
Senior Director, Loyalty Consulting & Solutions, Maritz Loyalty Marketing

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FORUM: BY THE NUMBERS

BIG

DATA

How do companies plan to tackle big data in 2013?

68 56 83 45
of marketers expect their data-related expenditures to increase. plan on hiring new employees to handle data collection or analysis. plan to at least start considering real-time data in their campaigns. 
*Yesmail Interactive and Infogroup Targeting Solutions.  Data-Rich and Insight-Poor: Marketers Planning to Turn Information Into Intelligence in 2013. Web. January 2013. http:/ /lp.infogroup.com/survey-report.

say analyzing or applying customer information will be their biggest data-related challenge.

MARKETERS

89% 72% 68% 63% 56%

Of marketers surveyed don’t use net promoter scores for segmentation and measurement, disregarding some of the strongest indicators of loyalty there are.

MARKETERS MARKETERS MARKETERS MARKETERS

Of marketers do not recognize and leverage referral value.

Collect outside customer data for their marketing campaigns.

Always or frequently treat new customers the same when choosing advertising media.

Of marketers are hindered by a lack of information or accessibility to customer data

*Loyalty 360 & Acxiom. The Loyalty Divide. Web. April 2013. http:/ /loyalty360.org/resources/research/the-loyalty-divide1

THE LOYALTY DIVIDE

New research reveals a significant gap between brands’ and consumers’ perception of loyalty. 94 percent of marketers surveyed do not consistently apply consumer insights to create meaningful brand engagements. A new white paper from Acxiom & Loyalty 360 explores the impact of marketers failing to connect their customer data to marketing e orts and o ers recommendations for closing this gap. Visit Loyatly360.org to download your free copy of this new & enlightening market research, The Loyalty Divide.

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Loyalty Management™ • LOYALTY360.ORG

Full Conference Pass from $450
(through June 15)
WHERE FINANCIAL SERVICES, PREPAID AND THE MOBILE APP CONVERGE

THE FINANCIAL MOBILITY SUMMIT
August 13-14, 2013 · Planet Hollywood, Las Vegas
Learn about the unique intersection of prepaid mobile finance, payments, wireless and top-up. Explore the evolution of new mobile wallet and payment technologies from devices and applications to Point of Sale (POS) terminals, payment networks and processing platforms. At The Financial Mobility Summit, we'll bring all the parties to the table for dynamic conversations about this emerging market. The Financial Mobility Summit is designed by a group of long-time prepaid and financial services professionals, who will help a endees walk in with an idea and walk out with a seven-step plan.

The Fin Mobilit ancial y Summ it is co-lo cated w ith

Learn from experts at Dwolla, Gi ango, Heartland Payment Systems, InComm, VeriFone and more. Register at: financial-mobility.com
info@financial-mobility.com 1.866.203.2334 ext. 507 Follow us:

FOUNDING SPONSORS

ASSOCIATION PARTNER

THE PREPAID PRESS EXPO
THE SHOW FOR THE PREPAID SERVICES INDUSTRY

August 12-14, 2013. Planet Hollywood, Las Vegas

Don’t m The Fin iss Mobilit ancial yS co-loca ummit, ted wit h tppEX PO’13!

Exhibit
Pricing for 10’ x 10’Booths:

Network
Meet, greet, and be part of the excitement! Learn about the latest and greatest ideas, products and opportunities within the prepaid services industry.

Learn
The Prepaid Press Expo is proud to offer the most informative and affordable conference program for prepaid services.

Sponsor
Let us tailor a sponsorship to increase your exposure – before, during and after the Expo.

$3,999 through May 31
om Learn fr at ts r e the exp terstage e C m, n CARD.co nications, Commu cks, Openbu y og Synchol
PLATINUM SPONSORS

FREE Exhibit Hall Pass
(through June 15)

Full Conference Pass from $450
(through June 15)

High profile Sponsorships available from $9,050, including your booth.

EXPO@PREPAIDPRESSEXPO.COM · WWW.PREPAIDPRESSEXPO.COM
GOLD SPONSORS SILVER SPONSORS ASSOCIATION PARTNERS

Limited Booth Space Remaining. Contact Lisa Brown: 866.203.2334 ext. 505

EXPO INSIDER

BRAND LOYALTY A BIG CHALLENGE IN THE U.K.
By Loyalty 360

L

oyalty is about behavior. But the challenge is to understand customers along with the rapidly changing landscape.

That loyalty challenge is readily apparent in the U.K. According to a recent survey from consulting firm Accenture, U.K. companies are losing loyal customers “at an alarming rate” due to poor customer service and rewards. To gauge how drastic a challenge this is in the U.K., consider that as many as 85% of those who participated in Accenture’s survey indicated that their loyalty “could’ve been retained” if a company had “done more to keep them as customers.” Of those respondents, nearly 70% would have remained loyal if their problem had been resolved the first time they contacted a brand, and 55% would’ve remained loyal if they had been offered preferential treatment and rewards for doing more business with a company.  Brands — whether they’re located in the U.S. or the U.K. — need to understand expectation matching and invest in a customer’s lifetime value. To encapsulate the loyalty disconnect between brand and customer perceptions, a Bain & Co. study revealed that 90% of brands feel engaged with their customers while only 9% of customers feel the same. That same loyalty disconnect exists in the U.K. Accenture noted the customer churn rate among various industries and found that 20% of respondents switched to retail competitors; 5% switched hotel allegiances; 4% switched airline allegiances; and life insurance checked in at 3%.

Accenture found that the main reason consumers changed loyalty habits often is due to poor customer service as 79% of respondents cited unfriendly and impolite staff. What’s more, Accenture said consumers feel more empowered and “are more prone to switching providers.” This empowerment, according to Accenture, emanates from the “non-stop consumer” syndrome that includes a dynamic pathway to buying that is no longer linear, but includes more content than ever before through multiple touch points — digital channels and brick-and-mortar stores. But, the good news is there has never been a better time to launch a loyalty program in the U.K. The loyalty opportunity is readily apparent in the U.K. According to recent research, half of consumers in the U.K. take their business elsewhere due to poor customer service. But on the bright side, U.K. customers are willing to be loyal if businesses get it right with their customer service. Nearly 75% of survey respondents said they’d be more loyal to a company following a positive customer experience; and 71% would recommend a company to others. Research from loyalty marketing agency ICLP shows that while 75% of U.K. consumers value rewards, only half believe brands are fully delivering. The opportunity for loyalty programs appears abundant in the U.K. But brands must seize this opportunity by leveraging customer data.

BUT, THE GOOD NEWS IS THERE HAS NEVER BEEN A BETTER TIME TO LAUNCH A LOYALTY PROGRAM IN THE U.K.

When marketers fail to connect their customer data to their marketing efforts, a loyalty divide occurs that creates inconsistent engagement, lost opportunities, diminishing results, and brand erosion. If marketers can’t segment their most loyal customers, they won’t fully connect with them. If U.K. brands can better connect customer data to their marketing efforts, while focusing on the entire customer experience, they can embark on a journey to bridge that loyalty gap. L

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Loyalty Management™ • LOYALTY360.ORG

4120 Dumont St Cincinnati, OH 45226

2013
November 5-7 | Westin Galleria Dallas, Texas

KeY Areas of Focus
Customer Experience Customer Engagement Customer Data Customer Intelligence Emerging Technologies Voice of the Customer Social Media Mobile ROI

early bird rates available through August 15th

REGISTER TODAY!

Visit EngagementExpo.com for Event Updates and Registration

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