First Quarter 2014

The Adventure Begins with Maverik Voice of the Customer Fills Caribou Coffee’s New Loyalty Program with Surprises and Delights Understanding the Journey: An Opportunity to Learn from Your Peers

Session Previews | 2014

We are Brands. We are Rymax.

With more than 300 brands and over 10,000 of today’s most sought after products, we are the leader in rewards and incentives. Our industry experience and knowledge of current market trends gives us the depth and breadth to manage programs that drive loyalty, increase engagement and grow business.

www.rymaxinc.com/L360 • 1.866.684.1174

Incentive Solutions Delivered. Worldwide.

Copyright © 2014 Rymax Marketing Services, Inc. All rights reserved.

In this Issue...


Chico’s Goal is for Omni-channel Customer Shopping and Buying Experience
Jim Tierney | Loyalty360

4 Letter from the Editor 6 Loyalty360 on the Web 8 Your Voice 10  Behind the Brand
with Evan Weisenfeld | Exchange Solutions

The Adventure Begins with Maverik
Erin Raese | Loyalty360

12  360 Insights: Understanding the
Journey: An Opportunity to Learn from Your Peers Mark Johnson, Loyalty360

14 By the Numbers: Holiday Retail 16 Q & A: Ask the Experts 30  Behind the Brand
with Gregg Sauter | Saskatchewan Roughriders Football Club

Voice of the Customer Fills Caribou Coffee’s New Loyalty Program with Surprises and Delights
Jim Tierney | Loyalty360

33 Trending Now 34 Loyalty Innovation 50 Loyalty Reads 56 By the Numbers: Loyalty Sentiment




Marketers Take Note: Here are Your Six Groups of Deal-Seeking Customers
Tierney | Loyalty360

March 17-19, 2014 Hyatt Regency Grand Cypress | Orlando, Florida

Jockey Always Seeking Refinement of Loyalty Program
Jim Tierney | Loyalty360


Loyalty Management™ • FIRST QUARTER 2014

FROM THE EDITOR Is anyone else as anxious as I am to get 2014 rolling? Here at Loyalty Management we’re excited to see what path the industry follows because we’ve been watching it very closely over the past five years (Yes, Happy 5th Birthday to Loyalty Management!). During that time, we have seen more organizations take significant steps toward customer-centricity. We started Loyalty360 and Loyalty Management because we noticed how many organizations had pulled away from their customers in the past decade. The economy was in a tailspin, which forced many organizations to react quickly and not always in the most customer-centric way. But since then, we’ve seen organizations acknowledge and earnestly embrace their customers. We’ve witnessed the dawn of new technology channels, a commitment from brands to truly listen to their customers and act on insights gleaned, driving the production of relevant content through the convergence of CRM and loyalty. In this issue, we’re pleased to share insights from brands taking their customer loyalty initiatives to the next level because they listened to their customers and acted directly on that feedback. Maverik (pg 20), a 250-store chain offering fuel and convenience, has taken a creative approach by extending its marketing through partnerships (what we used to call OPM) to bring excitement, engagement, and added value to its customers. Caribou Coffee (pg 22) took a non-traditional Surprise & Delight approach after listening to its customers. What’s more, on pages 28-29, Jockey displays a steady eye on the marketplace, looking for new ways to build customer loyalty through engagement. Ready to learn more? Join us at the 7th annual Loyalty Expo. See pgs 58- 63 for the show preview. We launched the Loyalty360 Awards to recognize those companies who are embracing and successfully executing customer-centricity throughout their organizations. Be sure to join us March 17 at Loyalty Expo as we celebrate the best of the best!

Rewarding Best Customers Only? Prove member level incremental results
• 2% lift in same store sales • Members 3 times more active compared to non-members

Erin Raese Editor-in-Chief Loyalty Management®

Take The Loyalt y Journey

Go to www.truthinloyalty.com or Call Rob Morgan at 630.635.2405


Loyalty Management™ • LOYALTY360.ORG

In this Issue...

36  Future of Loyalty Cindy Faust | Aimia 40  Incentives Drive Participation and Engagement Mike McDonnell | Connexions Loyalty 42  Influencing Customer Loyalty Through Events: What Matters and How to Measure it? Vinay Iyer | Goombal, Inc. Bill Karpowicz | Satmetrix, Inc. 44  CPG Marketers… It’s Okay to Cheat Robyn Hannah | PunchTab

46  CRM Platform: Why Buy a Hummer When a Minivan Will Do? David Ury, Contributing Writer | Loyalty360 48  Three Practical Steps to Tapping Into Big Data (and Little) to Drive More Profitable Behaviors from Your Customers Jeff Knechtel | Exchange Solutions 52  The 10 Essentials of a High-impact CRM Strategy Tim Berry | Merkle 54  Summary of the New Golden Guidelines for Actionable Social Engagement Jeff Nicholson | Provenir

Incentives Drive Participation and Engagement
Loyalty Management Editorial & Production Team
Erin Raese - Editor in Chief Mark Johnson - Contributing Editor Christopher Schatzman - Design Director Jim Tierney - Senior Writer Crescent Printing Company - Print Production


Drive More Profitable Behaviors from Your Customers


Article Submissions & Advertising: Erin Raese erinraese@loyalty360.org or 513.800.0360, ext. 210

© 2014 Loyalty360, 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. Loyalty360 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™ • FIRST QUARTER 2014



What’s New

Hear first-hand from thought leaders at top brands as they share details about their strategies to build long-term, profitable customers. • Michelle Moody, Cross Vehicle Marketing and Launch Manager at Ford Motor Company, talks about creating seamless customer experiences for drivers both inside and outside of the vehicle – using smartphone apps. • David Canty, Director, Loyalty and Partnership Marketing, for JetBlue Airways discusses how the airline is viewing industry consolidation as an opportunity to gain loyal customers. • Omni Hotels & Resorts’ Kerry Kennedy, Vice President, Ecommerce, chats about creating personalized stays and exceeding expectations by listening to the needs of its guests.

A new feature on Loyalty360.org, “Loyalty Leaders”, ranks our members’ blogs by total number of views per week. Now our readers can easily see which industry blogs are getting the most attention and who to follow to stay informed.

loyalty t

Our PULSE survey questions poll visitors on their experiences related to loyalty. The result is a simple and fun way to gather industry trends and consumer insights. Questions are updated regularly, so check back often! A recent PULSE poll asked: Have you experienced points expiring on any of the loyalty programs you participate in?

your destination for daily insights

Have You Experienced Points Expiring on any of the Loyalty Programs You Participate In?
Never. My points don’t expire.



No. I’m diligent about spending my points.


Yes. I was furious!


Yes, but it was my fault. I lost track of them.

Loyalty Management™ • LOYALTY360.ORG

Customer engagement isn’t as easy as getting down on one knee…
…but it should be just as memorable

An online incentive delivery tool that’s as easy as 1, 2, 3.
MotivEngine the power to:
• acquire and reward new customers • recognize your existing customers • say thank you • say you’re sorry when things go wrong • exceed expectations Whether you’re focused on acquiring new customers or servicing existing ones, MotivEngine brings together best-in-class rewards with an exceptional customer experience and the power of choice to turn your customers into brand advocates.

cxloyalty.com | 800.622.4863
B E M E M O R A B L E . E X C E E D .


Delivering Relevant Content is an essential goal in any marketing strategy. But what does relevance mean? Why is it Important? And are Brands Truly Delivering on it?
“Relevance is the key thing for people involved in content strategy to be aware of for the future. Content should fill a consumer interest rather than push a corporate agenda. Content should be focused not on selling, but on educating or entertaining. Companies who commit to content strategies need to make sure that the message is targeted to the people it’s intended for. There’s nothing worse than getting content in any form that’s not relevant.”
-Adam Trisk | Head of Marketing | CrowdTwist
CONTENT | An Execut
ive Brief by Loyalt

y360 - The Loyalty

Marketer’s Assoc


“A well-executed content strategy can promote customer loyalty when it provides customers with relevant, brand related content that eases or enhances an individual’s experience with the brand. For this to have a positive impact, the content must be seen as valuable, relevant, and aligned to the brand.”
-Kirk Johnson | Partner | Lenati


An Executive Brief

by Loyalty360 -The

Loyalty Marketer’s Assoc


“Fundamentally, we believe it will become clear that if you are able to ensure relevance for the customers, ROI tends to follow.”
-Lung Huang | VP of Digital Advertising, Global Partnerships dunnhumby

Loyalty360’s Executive Brief series taps into Loyalty360’s network of industry experts and practitioners to provide forward-thinking perspectives on topics that are germane to growing profitable, loyal customers. The latest series installment focuses on Content. To see the Executive Brief in its entirety, visit loyalty360.org.


Loyalty Management™ • LOYALTY360.ORG

When you Receive Communications from Your Favorite Brands, How Often is the Message Highly Relevant?

“Unfortunately, not very often. Part of the problem is that they tend to inundate with multiple messages a day rather than targeting just 1.” -@KatieMktg “It’s frequently relevant. The problem may be is there’s too many messages. My fault 4 not opting out of push, but I still want to connect.” -@notinmy “I don’t follow many brands, so I rarely communicate with them. When I do, I’d say they’re sometimes highly relevant (about 50/50).” -@GreyRoby “If they are good, and they use correct targeting, it should be highly relevant ;-) but most often this is just not the case.” -@LakakisInc “It depends on the brand. Some brands do better than others. Shoe companies & “image” based brands like Redbull & GoPro do a good job.” -@kreativecook

“I don’t think they are “highly” relevant 90% of the time. In fact, they are generic.” -@JoeButson “Highly relevant? Not often, but somewhat relevant at least. Online advertising can be scarily relevant though due to cookies.” -@superchlorine “Relevancy in brand to consumer communication is mostly not given. Brands still fail to overcome to mass communication.” -@markusrach “Not that often to be honest - actually, there are just a few brands that, from my POV, communicate in a relevant way. The rest, invade!” -@lavitrinastudio


Evan Weisenfeld has more than twenty years’ experience in sales and marketing with extensive experience in the loyalty marketing industry. He is currently the US Head of Business Development for Exchange Solutions, helping clients develop innovative customer engagement and loyalty programs. Evan spent more than seven years at Upromise and served as VP of Partner Management and SVP of Partner Development responsible for business development, partner relationships and marketing programs for companies such as McDonald’s, ExxonMobil, Rewards Network, Avis, Pep Boys, New York Life, Century 21, TruGreen ChemLawn and America Online. Evan also helped launch uTANGO, a loyalty program for singles, engaged couples and newlyweds. Previous consulting engagements include assignments for Radisson Hotels Worldwide, Northwest Airlines Worldperks and the Goldpoints loyalty program. In addition, Evan has extensive Strategic Consulting, Internet Consulting, Marketing and Sales/Business Development experience working for companies such as Cheapflights Media, Zentropy Partners (now MRM Worldwide), Andersen Consulting (now Accenture) and Fidelity Investments.

WHAT DO YOU SEE AS THE NEXT BIG TREND IN CUSTOMER ENGAGEMENT AND LOYALTY? I think adoption of the “mobile wallet” will hit the mainstream consumer market and change the nature of how companies and customers interact. Technology, including location-based services, is finally catching up with marketers’ vision of how a loyalty program should really work, and this is enabling true one-to-one interactions. By leveraging the technology behind the mobile wallet, companies will be able to implement engagement and loyalty programs that not only deepen customer relationships, but also deliver measurable results with a positive ROI. WHAT IS THE BIGGEST CHALLENGE YOU ARE CURRENTLY LOOKING TO SOLVE? As the “Customer Engagement Experts” we recognize that customer engagement and loyalty are crucial; so is ROI. As such, we focus intently on helping clients design, launch and manage engagement and loyalty programs that deliver incremental transactions and guarantees ROI positive results for our collective efforts. And this is a challenge we don’t take lightly. In fact, we are so committed to ensuring everything we do drives incremental profitable customer behaviors for our clients that our model includes a revenue share component. If our client isn’t making money, neither are we. WHAT MARKETING INNOVATION DO YOU WISH YOU HAD COME UP WITH FIRST? Performance-based marketing. It seems so logical that marketing should be based on results. If something works, why wouldn’t a company be willing to pay for it? This means both parties’ business interests are aligned. Otherwise you usually have a situation where one party is motivated to take advantage of the other. This philosophy is really at the core of Value Exchange Optimization™ which is the key to our approach at Exchange Solutions.

WHAT TREND OR TECHNOLOGY SHOULD MARKETERS EXPIRE AS A FAD OF THE PAST? QR Codes. These tiny graphics were all the rage for a while as a way to quickly and easily get a consumer to a dedicated landing page or website. But while the technology behind QR codes is impressive, it is unnecessary and this never caught on with consumers. While I’m not sure we’ve seen the last of QR codes, for now the proliferation of smart phones with mobile browsers makes just providing a URL much simpler. WHAT DO YOU BELIEVE IS KEY IN DRIVING TRUE CUSTOMER LOYALTY? Understanding what motivates the customer is key to driving customer loyalty. I don’t believe a one size fits all approach works. Some customers are motivated more by the product, others by the service experience, and others by price or location. Loyalty implies that customers will choose one company over the competition even if one or more reasons might exist to choose the alternative. For example, I will purchase because I believe the product is better than the competition (i.e. Bose headphones) or I will pay more because I value the service I get (i.e. Nordstrom). In reality, for most consumers, multiple elements factor into their purchase decision. Through a combination of implicit and explicit data, companies can develop sophisticated models that can better predict what motivates an individual consumer to ensure what and how an organization’s engagement addresses the consumer’s needs. WHAT IS YOUR PERSONAL MOTTO? Continuous improvement – whether in my personal life or my professional life, I believe there is always an opportunity to learn and do better.


JOIN EXCHANGE SOLUTIONS AT LOYALTY EXPO 2014 Join Exchange Solutions on Monday, March 17th at 9:30am for their workshop “Dissecting an Effective Customer Engagement Program” with Brenda Higuchi | SVP, Analytics and Optimization and Jane Ricciardelli | CMO

Loyalty Management™ • LOYALTY360.ORG

“I believe there is always an opportunity to learn and do better.”
WHICH BOOK(S) ARE YOU RECOMMENDING AND WHY? From a professional standpoint, “The Signal and the Noise: Why Most Predictions Fail - but Some Don’t” by Nate Silver. This guy is a statistical genius and has done some very interesting things in the worlds of sports and politics. I think this book provides interesting insight into how consumer decisions are made and how companies should operate as a result. On a personal note, I really enjoy fantasy and science fiction as a way to escape. There are a number of series including “A Song of Ice and Fire” (the first of the series was “A Game of Thrones”) that I am anxiously awaiting. WHO HAS HAD THE MOST INFLUENCE ON YOUR PROFESSIONAL LIFE? It’s difficult to pinpoint just one person. I’ve had a number of managers over the years that played a very important role in my life by believing in, empowering and trusting me. That allowed me to take some risks and grow. I’d also credit my wife who has been there and trusted that I’d land on my feet even if something didn’t work out as I’d hoped (more times than I like to remember!). FAVORITE LEISURE ACTIVITY? DOES THIS INFLUENCE YOUR WORK? I’m a very big sports fan and spend a lot of time watching and attending live sporting events. Living in the Boston area for the past 13 years I’ve really benefited from the success our local teams have experienced. And my biggest take-away that does influence my work is that you should never give up until the game is over. I’ve seen so many amazing come from behind victories and even when I think there’s no way the team can do it again, they find a way. I also love to ride my motorcycle when I can find the time. DO YOU (OR WOULD YOU) LIKE TO VOLUNTEER? WHAT ORGANIZATIONS OR CAUSES ARE YOU MOST PASSIONATE ABOUT? I am a very big volunteer in my local community and am a strong believer in giving back. I like volunteering at the local level as I can see the results of my efforts first-hand. There are so many great causes that deserve support and I do my best both financially and with my time to contribute. And it’s a great fit for me professionally too because supporting charitable organizations is also ingrained in the Exchange Solutions culture. For example, as an organization we were pleased to make the holiday wishes of four families come true with our participation in an annual Holiday Hamper Project.













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

1 2 3 4 5 6 7 8 9 10

HOW DO YOU MEASURE SUCCESS OR FAILURE? I’m a fairly analytical thinker, but I think success or failure can only be truly measured or evaluated over time. Too often, a program that looks like success or looks like failure may change in hindsight if not given enough time to properly understand the outcome. Understanding what the goals are/were first and evaluating against those criteria is how I typically approach measurement. WORDS OF ADVICE FOR THE NOVICE MARKETER? Take risks and strive for continual improvement. You can’t learn and improve if you don’t try new things or even fail once in a while. Failure isn’t a bad thing. It just means now you know what not to do in the future. But learn from your mistakes and use that knowledge to do better the next time. L
Loyalty Management™ • FIRST QUARTER 2014



Understanding the Journey: An Opportunity to Learn from Your Peers
An interesting test that arises when building a loyalty program (as part of a larger loyalty process) is the effective benchmarking of your program against those of your competitors and others in the market. While there are implicit financial challenges put in place by the organization’s CFO, brands may be challenged by the CMO and CIO to achieve greater impact, efficacy, and efficiencies. The challenge to effectively measure the efficacy and efficiency of a brand’s loyalty offering versus that of competitors is overwhelming and almost debilitating to some. The “shiny new object” or the hurdles of “Keeping up with the Joneses” seem to elicit envy among brands and often pose an insurmountable obstacle. THE CHALLENGE OF NEW TECHNOLOGY These new technologies that are “engaging” and “visionary” are the ones that may have the highest potential upside, but also create questions in regards to proven financial metrics (short- and longterm) versus traditional marketing communication channels. New technologies can also take a longer time to substantiate the return on investment as well, so brands hold a greater reticence of embracing some of them. However, the perception of falling behind can lead to an “analysis paralysis.” Loyalty360 has spoken at length about the challenge brands have with the ability of organizations to understand and implement an exact measurable value and incremental benefit, or spend to their program with these new technologies. JOURNALING THE JOURNEY As we continue to speak to brands, we’ve begun to offer more insight. Interestingly, what was considered proprietary or off-limits nearly a year ago is now not nearly as sacrosanct. Brands are more open to discussing their journey, sharing their challenges, and willing to engage. They know that sharing helps other brands, especially those in a

Mark Johnson


ne of the areas of opportunity we continue to see at Loyalty360 is for brands to understand how loyal their customers are. We continue to see brands roll out new technologies, new processes, and new loyalty/engagement strategies that portend to drive a unique, mutually beneficial dialogue (value exchange) with consumers, yet they continue to struggle. Most brand marketers feel their programs and loyalty offerings are substantially inferior to their competitors, and also to some industry stalwarts. Marketers are constantly asked by their CFOs to show return on not only the loyalty program, but also the marketing outreach. Most of us know that loyalty programs, if administered with a modicum of insight and focus, are inherently profitable even at a baseline offering. Marketers remain challenged to show a return on all aspects of the program, yet are interested in rolling out incremental financial attributes for the program, as these new technologies and processes are presented daily to marketers.


Loyalty Management™ • LOYALTY360.ORG

Perception remains a key challenge as it drives the reality for brands.
non-competitive environment to understand where they are. At Loyalty360, we call this “journaling the journey.” Marketers are increasingly open to sharing the challenges they’ve had with new technologies, the hurdles they have understanding disparate technologies, the obstacles they face with data, and the increasing complexities and financial restraints imposed by their CMOs. Their willingness to share - not necessarily the preferable “opening of the kimono”- has helped us glean more insight as to the current state of these loyalty programs, and to landscape of the market as a whole. EMBRACING CLIENTELING Brands continue to reach out, seeking advice, asking us to approve technology, vendors, or processes that they are considering. Brand marketers also want us to be a clearinghouse for those technologies they are considering. Marketers do not feel that they are doing a great job. In fact, most feel they are failing when it comes to the development, deployment, and enhancement of their bigger picture. They feel they lack the ability to develop successful programs or processes for their CMOs, CFOs, or CIOs that others can do. When we take a look at this from a holistic perspective, however, we continue to see that brands have a vested interest in loyalty programs and processes. Marketers want to expand their impact and also the clout of their loyalty programs within their organization. When we start to look at brand marketers who fuel their loyalty technologies with clienteling, data analytics, predictive modeling, behavioral insights, and voice of the customer data, it is unique to see that some of those marketers that feel they are struggling are actually doing quite well. We continue to see brands that apply a simplistic approach to data, such as finding customers who have unique and identifiable attributes, do very well in this market. As such, we continue to see unique insight from brands. For example, organizations like Chico’s realize that having dedicated customer shopping contact, incremental engagement and incremental loyalty increase customer experience and satisfaction with the brand. Organizations that have unique clienteling platforms in-store, however, use them for different reasons. Some brands may use the clienteling services to increase the customer experience. Others may use clienteling to decrease the returns that they see from products. Yet the impact of both of these programs leads to fewer returns, increased satisfactions, and loyalty. However, the perspective taken by the two brands is somewhat unique and yet the perception is significantly different. Perception remains a key challenge as it drives the reality for brands. But the opportunity remains to help these brands realize they may not be the laggards they think they are. THE CHALLENGES OF BENCHMARKING Benchmarking marketing efforts have always been difficult. The rapid proliferation of technologies processes and data have made it significantly greater. Brands yearn for a time when engagement levels are higher. They want to simplify how they communicate with customers. As CFOs continue to challenge marketers to increase the viability of their loyalty marketing engagement processes, they also demand that marketers substantiate the ROI on these programs. Marketers do not want to get left behind with regard to new technologies they see every day. However, benchmarking these programs with regard to the return remains complex. It is difficult to discern changes that might impact how the program performed three years ago versus that of the current market. What’s more, it’s becoming more difficult to secure increased funding and/or resource allocation to develop effective benchmarking strategies for these programs. As we’ve seen in a number industry briefs, there is a chicken or egg approach to these processes. Brands that have significantly over-invested in loyalty processes technologies and infrastructure are the ones that have a greater voice of the customer. These brands have higher engagement and loyalty metrics. Therefore, they have increased profitability for their online and offline processes or touch points. So, is that a situation where that increased investment led to the increased results, or is it just a part of the organization’s realization that it needs to invest to secure the return it wants? Marketers that lack the ability to invest in such technologies are challenged by their CFOs to invest incrementally. They are the ones left out. Yet these marketers also seem to be the ones that put more into the processes they have and make sure they can extract value from them. They understand the level of organizational impact over others. Benchmarking will be imperative in 2014. We see a number of hurdles ahead: The challenges of content marketing, waning customer loyalty, customer-centricity, and the need to balance corporate social responsibility. These obstacles will greatly impact loyalty and engagement levels of brands. Marketers know what they should be doing, but they continue to be challenged by the organizational culture and perspectives that may not be shared within their companies. We look forward to discussing these trends at the Loyalty Expo in 2014, as well as hearing about other online opportunities. As always, we look forward to hearing back from you. L

Loyalty Management™ • FIRST QUARTER 2014



y a d i l o H AIL


Multichannel retailers win while customer loyalty wanes for biggest U.S. retailers; satisfaction stagnates across Web and Mobile channels during 2013 holiday season
The most satisfied shoppers this holiday season were the ones that interacted with a retailer across multiple channels. The majority of customers (57%) were single-channel users with a satisfaction score of 82, and the remaining 43% who used two or more channels to engage with the company recorded a satisfaction score of 85. STORE CHANNEL
Apple, which prides itself on stellar Apple Store customer experiences, lost to the supermarket chain Publix Super Markets in store satisfaction with a score of 83 – three points lower than Publix’s score of 86.

ForeSee, the global leader in technologydriven customer experience analytics, recently released the ForeSee Experience Index (FXI): 2013 U.S. Retail Edition. Based on data gathered during 2013’s holiday shopping season, the report features company-level and channelspecific customer satisfaction analysis for the top 100 U.S. retailers. This five-part report goes beyond the annual ForeSee E-Retail Satisfaction Index (U.S. Holiday Edition) produced for the last eight years, which measured customers’ Web and Mobile experiences with e-retailers. The new FXI Retail report offers a comprehensive view of satisfaction at the Company-level and across every applicable sales channel including Store and Contact Center as well as Web and Mobile. The study is based on more than 67,600 surveys collected between Nov. 29 and Dec. 17, 2013, for the 100 biggest U.S. retailers as reported by the Fortune 500 and Internet Retailer’s top 100 websites. Retailers listed in this report

include Amazon, Dell, L.L.Bean, Apple, QVC, Keurig, Costco, Ralph Lauren, Victoria’s Secret, Barnes & Noble, eBay, Groupon, Family Dollar, Best Buy, Toys “R” Us, Zulily and others. “The results of ForeSee’s most comprehensive holiday report provide interesting insights into the holiday shopping experience,” said Larry Freed, president and CEO of ForeSee. “The data shows that customer loyalty for retailers is on the decline, yet consumers are satisfied with the top retail brands and had the best experience with retailers who mastered the multichannel experience. While Amazon continues to reign supreme across multiple channels, several retailers have identified critical drivers for increased sales and have made great strides to improve the multichannel customer experience, setting themselves up for success into 2014.”



Resources: ForeSee Experience Index (FXI): 2013 U.S. Retail Edition

53% of retailers register merchandise as the main priority affecting in-store purchase, and 35% register service.


Loyalty Management™ • LOYALTY360.ORG

While Amazon (88) led the pack for Web satisfaction, some retail sites such as vitacost.com (86), keurig.com (84) and llbean.com (84) are creeping closer. Basspro.com (83) and crateandbarrel. com (80) tied for the most improved sites with seven-point gains in customer satisfaction from last year. 

57% of retailers identify merchandise as the top driver affecting customer web experience, compared to only 7% that register price.




84 84 83 80

In a category that saw satisfaction stagnate this year, Walmart (80) was the only company to experience a significant increase of more than three points in Mobile satisfaction, seeing a five-point improvement from 2012’s score. Again, Amazon led the pack with a Mobile satisfaction score of 87.

38% of retailers register functionality as the top priority affecting the mobile customer experience, above both merchandise (34%) and content (31%).




QVC (88) led in Contact Center satisfaction by three points. Costco (85) and O’Reilly Auto Parts (85) tied Amazon.




Retailers that satisfied the most (and least) during 2013’s holiday shopping season Amazon (90) and L.L.Bean (90) tied for the highest Company-level satisfaction.The L.L.Bean website has scored an 80 or above in Web satisfaction eight out of the nine years measured, and Amazon has topped the Web satisfaction list every year. Priceline.com came in with the lowest Company-level satisfaction (76), as well as one of the lowest Web satisfaction (75) and Mobile satisfaction (73).



55% of retailers record knowledge of the customer service representative as the top priority affecting the customer contact center experience.

Loyalty Management™ • FIRST QUARTER 2014




Ask the Experts:

Our marketing plan is putting more and more focus on content. What are some tips for making sense of all of the technology that’s available today to help build a successful content strategy?
“Technology is really helpful for distribution, curation, and segmentation. There is a myriad of tools available for those purposes. It can help you understand who your customer really is, what they’re interested in, when they’re looking for information, and many other things. But traditional media is still important. Many companies use flyers or brochures at POS locations to help catch the eye of the consumer. Traditional media, when coupled with technology, can be very powerful, too.” -Tiffani Allen | Marketing and Communications Manager | Ciceron “Technology has been a great enabler. It has driven costs down for delivery, but it also has opened up new channels for people to be reached at much different price points than traditional media does. But while you are able to do all of these things, the margin of error is greater than ever. We rely on data to help us make decisions that are presented to us, so when you say to yourself, ‘I am going to create content that I am going to push out to all my platforms at the same time,’ you’d be better off going back to mass marketing with an imprecise approach. If you won’t take the time to find insights on who you are going to reach, when they will see it and how you are going to make sure it is relevant, then I am not sure why you wouldn’t just buy larger, untargeted buys. Given the intellectual horsepower technology companies are putting in place now, there’s no excuse to drop the ball on data-driven insights and targeting.” -Lung Huang | VP of Digital Advertising, Global Partnerships | dunnhumby “Technology is the backbone of content. It feeds the entire content funnel from creation to dissemination.” -Adam Trisk | Head of Marketing | CrowdTwist “A successful content strategy is dependent on a well-designed and managed technology infrastructure. Marketing automation tools enable the management and tailoring of content to individual segments and provide personalization capabilities to deliver targeted content through the appropriate channel for the individual. In addition, in a B2B environment, it is critical to have technology that connects to the CRM system for lead generation management. By developing specific lead qualification criteria and being able to input specific information about an individual and/or company, qualified leads can easily be passed from marketing to sales. Finally, to justify the resources to execute a content strategy, it is critical to be able to measure the impact of the content and thus, it is critical to have a robust reporting system.” -Kirk Johnson | Partner | Lenati


Loyalty Management™ • LOYALTY360.ORG


With more focus on content, there is also more focus on measuring results. What are some best practices for measuring content return on investment?
“Measure the engagement with the content to judge its success. We do this with each piece of content we create to help shape the narrative of our next work.”
-Kevin Scholl | Social Media Manager | Red Roof Inn

“As a customer science company, we love to measure everything at dunnhumby. We also believe that ROI on marketing is measured based on a combination of brand equity created or sales. As a result, every measure used to calculate ROI should be tied to these overarching goals. On certain media channels and with certain brands, sales cannot be connected to the media so proxies from media measurement companies have to suffice. Ideally, all media channels become addressable and therefore measurable in both equity and sales. This will enable media channels to be compared to each other and true cross-channel ROI to be calculated. Fundamentally, we believe it will become clear that if you are able to ensure relevance for the customers, ROI tends to follow.” -Lung Huang | VP of Digital Advertising, Global Partnerships | dunnhumby “The ROI of content needs to be looked at in several ways: its ability to drive awareness, its ability to drive sales, and its long-tail effect at driving sales based on first and subsequent exposure.” -Adam Trisk | Head of Marketing | CrowdTwist “Content should be measured by overall brand awareness, brand perception, lead generation and should be combined with all other components of a healthy marketing mix including PR, advertising, trade shows and all of those should be accountable to more leads and more revenue.” -Dave Cook | Vice President | Access Development

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Customer Shopping and Buying Experience
Jim Tierney

Chico’s Goal is for Omni-channel

For Justin Tidmarsh, director of customer loyalty for women’s apparel merchant Chico’s, satisfying every customer need in every channel remains the company’s prominent goal – especially considering the large number of Chico’s customers who shop on their mobile devices.

“Some customers start their shopping (browsing) via mobile and finish the transaction on a desktop,” Tidmarsh explains. “Our goal is to make the shopping and buying experience omnichannel. We want to ensure she has access to the information she needs at the right time and seamlessly across all channels whether it is her loyalty status, available offers and rewards, purchase history, or ability to shop.” Chico’s remains focused on enhancing its mobile-engagement activities to deliver memorable customer experiences. “We have a wide demographic target when you look across our four brands,” Tidmarsh explains. “As such, our customers have differing expectations from us when it comes to mobile and other newer or emerging technologies. Some mobile engagement activities rollout in one brand earlier or differently than they roll out in our other brands. We have also tested some geo-targeted marketing via mobile messaging, and will continue to find new ways to engage her in authentic, relevant ways which reinforce the associate relationship – such as the ability to schedule appointments with her associate.” Chico’s has had a loyalty program for about 20 years, and Tidmarsh told Loyalty360 that the driver of loyalty at Chico’s is the relationship between store associates and customers. “The strength of the relationship is important for us at Chico’s because the more someone has a dedicated relationship, the more she’s connected,” Tidmarsh says. “We’re pretty fortunate that our identifiable transactions are quite high (90%).” Tidmarsh says that if a customer has a dedicated relationship, “we make sure someone is calling them. Our back-end system to build relationships is really

strong. We’re trying to tie associate relationships to our loyalty program. Our stylists will often give their business cards to customers.” When a customer is loyal to a brand, Tidmarsh says, “they’ll look for other things tangential to the product. Chico’s associate relationships with customers deal with a customer’s life stage, what she values and what she doesn’t value. How do we take all of that and build it into a content strategy?” Chico’s loyalty program operates in a simple fashion: Sign up in-store or online, achieve $500 of lifetime spend, receive 5% off every purchase and free shipping online. “We look at continued spend year-overyear as a behavioral indicator,” Tidmarsh says. “We want to represent that within a segment. How can we retain her and her spend year-over-year?” Tidmarsh admits it’s a fairly passive loyalty program. “How do we follow up with those customers?” he says. “We’re trying to take customers who believe in the brand and develop those relationships even further through other benefits. We are trying to figure ways to mobilize our best customers and have them be advocates for the brand. It’s a unique challenge. We’re at a pivot point right now, figuring out our next big move - mobile, clienteling? That can expand all channels. We’ve really taken loyalty and tried to put a framework around it. What are the factors that build loyalty? We want to help educate our brand partners so they can become experts at loyalty. Each is responsible for an overall marketing plan and we’re responsible for customer development.”


Loyalty Management™ • LOYALTY360.ORG

As part of its customer segmentation strategy, Chico’s identified several key segments of customers within each brand. Among other attributes, these segments include demographic, spend, and behavioral elements.

As part of its customer segmentation strategy, Chico’s identified several key segments of customers within each brand. Among other attributes, these segments include demographic, spend, and behavioral elements. “We have defined marketing strategies against each segment and are working to bring together all channels in concert to deliver against the strategies and objectives,” Tidmarsh says. “For example, we know that one segment shops for outfits versus separate pieces. Integrated and relevant marketing campaigns will help us develop more loyal customers because we show we understand her needs and have products that she loves.” Providing relevant marketing tailored to the customer is critical. “However, the ultimate success of our marketing is also highly dependent on the experience our customer has in our stores,” Tidmarsh explains. “Our associates are successful because they build relationships with their customers. They tailor their message and product recommendations based on what they know of the customer. Plus, they know the customer on a personal level, so our associates know if she is shopping for an event because she has a new job, went through a body transformation or just likes to get out and shop socially. When we reinforce that experience in our marketing, we are able to consistently reinforce a relevant message.” What’s more, Tidmarsh says Chico’s is working very hard to bring the digital experience into its stores.

“Whether through interactive digital shopping experiences currently in place in our Boston Proper stores, or via new technologies like mobile clienteling applications, we are working to reinforce the message of personal relevancy with each customer, consistently across every channel,” he says. Tidmarsh says he’s always looking at what other companies are doing to find out who is doing it the best. “We’ve been able to build a great system internally,” he says. “We empower our associates and instruct them. We’re at an interesting point of how do we still hold onto that boutique feeling. We want to maintain those associate-customer relationships and be relevant within our behavioral segments.” Chico’s FAS comprises the following brands: Chico’s, White House | Black Market, Soma Intimates, and Boston Proper. It’s a specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The company operates 600 Chico’s boutiques and 100 outlets, 402 White House | Black Market boutiques and 45 outlets, and 206 Soma Intimates boutiques and 16 outlets, throughout the U.S., the District of Columbia, the U.S. Virgin Islands, and Puerto Rico. Each brand publishes its own catalog and maintains its own ecommerce website: www.chicos.com, www.whbm.com, www.soma.com and www.bostonproper.com. L

“...we are working to reinforce the message of personal relevancy with each customer, consistently across every channel...”


The Adventure Begins with

Erin Raese

With Maverik’s tagline, “Adventure’s First Stop,” you’d expect to walk into a store filled with adventure gear – an REI, L.L. Bean or Patagonia.
Instead, Maverik is a 250-location chain that offers fuel and convenience. Born in 1928 in Afton, Wyoming as a two-pump gas station, Maverik grew to surrounding areas providing fuel to small towns and ranches. Staying close to its roots, today “Maverik is known as the best place to energize your body and fuel your vehicle for whatever adventure life throws at you.” The team at Maverik has successfully built a unique, strong brand, providing real value to its customers in a competitive market known for small margins. The Maverik story is about consistency and creativity, its household name and keen brand recognition, and extraordinarily loyal customer base. To start, the team created a brand carrying a simple, yet clear message: Maverik isn’t selling gas, it’s selling the adventure your vehicle will provide when it’s fueled up. This positioning has set Maverik apart from every other gas station selling a commodity, competing on price. Yet, Maverik still has its challenges – limited margins and budget, coupled with competition from very large companies with deeper pockets and more locations. Maverik has developed a multi-faceted loyalty program – the Adventure Club™ - that supports the adventure message, providing unique experiences and adding value for customers. The Adventure Club encompasses the traditional loyalty program fundamentals of enhancing the customer experience through cutting-edge technology and new strategies, like gamification.

The Adventure Club sets Maverik apart from its competition in two fundamental ways:
• The Adventure Club allows customers to earn Trail Points with each fuel and each convenience purchase that can then be redeemed for chances to win adventure gear, discounts on, or free merchandise and/or donations to local charitable organizations. • The Adventure Club technology creates processing efficiencies that Maverik can pass on to its customers, allowing Maverik to successfully compete on price.


Loyalty Management™ • LOYALTY360.ORG

In the first seven months after relaunch, more than 350,000 members – including 40,000 Black Debit Card members - have enrolled in the Adventure Club.
The Adventure Club – Chrome Card (plastic, app or both!)
Maverik relaunched the Adventure Club in the spring of 2013 after listening to its customers. The “old” program dictated how customers could redeem their points; forcing them down one path. Maverik’s customers shared that they wanted more redemption options, including being able to donate their points to support local charities. Maverik leveraged technology, partners, and a great deal of creativity to develop a truly valuable value proposition that all adds up to an engaging and desirable Adventure Club. Here are the program benefits per the maverik.com website: Instant 2¢ Fuel Discount - Every gallon, every day.

The Adventure Club – Black Debit Card
On the technology side, the Maverik team looked for a way to reduce its costs because any reduction could create a significant advantage. It identified transaction costs. Subsequently, if Maverik could move more transactions to cash, it could save 1%–2%+ per transaction. Enter the Adventure Club Black Debit Card. Those customers who use the Adventure Club Black Debit Card save more on each gas transaction, plus they earn 2x Trail Points. Benefits per the maverik. com website include: Instant 6¢ Fuel Discount - Every gallon, every day. 2x Trail Points. Competitive price match. Automatically lower the fuel pump price by 6¢ per gallon or to match the pump price of any qualified local competitor whichever saves you more!

Punch-It! Earn freebies without the hassle of keeping track of paper punch cards. We automatically track all your virtual punch cards so you don’t have to. Collect Trail Points You’ve got Trail Points – spend ‘em to Win Stuff, Buy Stuff, and Give Stuff at maverik.com or through the Maverik app.

In the first seven months after relaunch, more than 350,000 members – including 40,000 Black Debit Card members - have enrolled in the Adventure Club. The team at Maverik should be commended for the program and the experience it created with the Adventure Club. For those who know, fuel and convenience have extraordinarily low margins. Many of us struggle with our loyalty program financials; in the fuel and convenience space it’s nearly impossible to create a point of differentiation, yet Maverik has done it through creativity and commitment! L

The structure of the Adventure Club leverages partners and suppliers to aid the financials: partners to supply the sexy adventure-based prizes and suppliers to support a second layer of value, (buy x times get one free – punch card-type promotions). The structure also creates a fun and exciting atmosphere – people love games – hence the gamification craze in loyalty. The sweepstakes structure allows for frequent chances to win items that a customer would not otherwise be able to earn in a loyalty program; creating excitement and ultimately, behavior change. People will want to continue to participate for their chance to win. Armed with its sweepstakes strategy, Maverik is able to leverage local and social media for additional promotion and exposure to its brand by creating special events around each giveaway.

Loyalty Management™ • FIRST QUARTER 2014



Surprises and Delights
Jim Tierney
Brands make emotional connections with customers through the heart, not the wallet. One year ago in an article titled, “2013 Predictions for the Customer Experience Industry,” Forrester Research said emotional insights will take center stage with the idea that happy customers are more likely to remain loyal, try new products and services, and spread good news about their experiences. Metrics such as satisfaction and Net Promoter Score (NPS) are now being trumped by several emotional factors in predicting customer loyalty. Brands and vendors alike are developing offerings that reflect the rational, subconscious, and emotional behaviors attached to a customer experience that ultimately yield deeper insights. As a result, some brands literally use the word ‘love’ in their mission statements because the value proposition being offered is laser-focused on surprising and delighting that customer, and making an emotional connection that can last much longer than any transactional-based loyalty program. Truly listening to customers is the only way a brand can effectively make that indelible emotional connection to forge a lifetime relationship. Case in point: Caribou Coffee. When developing a loyalty program that would hopefully resonate with its loyal customer base, Michele Vig, Vice President of Marketing for Caribou Coffee, realized the company needed a new customer loyalty strategy. As a result, Caribou wanted a definitive approach to use that was dictated by the company’s most powerful asset: the customers. Using a Voice of the Customer approach, Caribou Coffee embarked on an 18-month journey talking to its customers through both qualitative and quantitative research. The initial feedback was different than expected. Caribou customers were not “sold” on the traditional loyalty “punch card” type strategy – where you purchase a certain number of something and get that something free. From this lengthy and involved journey, the company learned two significant things from its customers: They don’t always want the same thing (in an award) That each customer doesn’t necessarily want the same thing as the next customer in line Armed with these valuable customer insights, Vig and her team envisioned opportunities outside of the traditional loyalty/punch card structure. Caribou Coffee implemented a series of focus groups where customers shared different ideas on potential program structure. Through this process, Caribou’s customers reinforced their desire for something unique – unique in the marketplace and unique to each individual customer. Mission accomplished.

Voice of the Customer Fills Caribou Coffee’s New Loyalty Program with

Since the launch of the company’s new loyalty program called Caribou Perks on Jan. 2, there has been an overwhelming positive response as it received more than 100,000 memberships in the first 10 days. Here’s why Caribou Perks works and differentiates itself from competitors, such as Starbucks: Caribou Coffee researched and tested the program for 18 months and the surprise and delight aspect of Caribou Perks fits its passionate customer base like a glove Customer feedback showed that not every customer wants the same reward Caribou Perks allows members to earn a variety of rewards The program doesn’t aim to simply satisfy customers, but delight them The more customers engage, the more perks they receive Unlike a transactional-based loyalty program, surprise and delight intrinsically builds a deeper, emotional bond with a customer “We wanted to ensure our program was taking into consideration our guests’ needs and wants in a Caribou Coffee loyalty program,” Vig says. “The program aims to enhance the overall guest experience at Caribou coffeehouses nationwide and reward our extremely loyal and passionate fans. We’re really excited about the surprise and delight element of our program. Through Caribou Perks, our guests will receive rewards just for visiting our stores.” Vig says Caribou Coffee opted for the “Surprise & Delight” approach for many reasons. “We feel it aligns well with the personality of the Caribou brand, which focuses on making our coffeehouses feel comfortable and cozy, and doesn’t take itself too seriously,” she explains. “Additionally, we’ve found that not every guest wants the same reward, so offering a free latte when a guest reaches a certain amount of points isn’t going to be attractive and rewarding to everyone. We made a significant effort to reach out to our guests and understand what loyalty meant to them. We wanted to ensure that the ‘surprises’ in our surprise and delight program would be fun, valuable, and convey the gratitude we have to our guests for their continued loyalty.” Creating a customer for life requires companies to take their customers to the next level, taking that relationship with them from casual to a more intimate relationship of loyalty. Brands do that by creating raving fans, delighting them well beyond their expectations, resulting in advocacy. There is a significant difference between satisfied and delighted customers. Delighted customers will be more loyal and a business will create customers for life. What’s more, the traditional loyalty model whether it be miles or points creates a habit and a sense of entitlement as customers often expect rewards without viewing them as special gifts. Conversely, the surprise and delight format draws customers in through an emotional connection without a sense of entitlement, thereby nurturing longterm loyalty and expectation matching. But to prevent surprise and delight from becoming a customer expectation, brands must also be transparent.

“Our previous programs were transaction-based programs that offered the same reward after the same number of visits,” Vig explains. “Our guests told us those programs were no different than all the other programs they saw every day. This feedback helped us decide to offer a more surprise and delight program to keep things fun and exciting for our guests. We definitely wanted to differentiate from Starbucks because our brands aren’t the same and their loyalty program uses a punch card system. So far, the feedback from our guests regarding Caribou Perks has been extremely well-received. The main thing for us is to thank them for their loyal business and provide them with perks along the way. The more they engage, the more perks they receive. This feedback helped us decide to offer a more surprise and delight program to keep things fun and exciting for our guests.” To become a member of Caribou Perks, customers go online to complete a profile and fill out all the optional questions and earn a free medium-sized drink. Then they have the option to use their Caribou Card for purchases at any location. Subsequently, Caribou Coffee will notify members when they receive a reward, which can be redeemed at any participating Caribou Coffee location. Caribou Coffee seeks profile information from members to help create future “surprises” and “delights” for customers. Some of the profile questions include: How often do you visit Caribou Coffee? What is your favorite beverage? What type of food purchases do you make at Caribou Coffee? What is your ordering preference? Where else do you buy coffee? What is your average spend per visit on beverages? What is your average spend per visit on food?
Continued on page 24

Brands make emotional connections with customers through the heart, not the wallet.

Caribou Coffee continued...

surprise delight
unexpected surprise and delight element
that strikes an emotional chord in customers.
There are also profile statements about Caribou Coffee’s image and product offerings, which members are asked to agree or disagree with by varying degrees. Vig says the surprise and delight aspect of Caribou Perks is crucial. It distinguishes itself from Starbucks and creates an emotional bond with customers over the 18-month focus group period. Included among the perks members can earn are size upgrades, baked goods, and drinks. Vig says every Caribou store will take part in the Caribou Perks program except for the ones that are slated to be converted into Peet’s Coffee & Tea locations in the very near future. What’s more, Vig says the program structure also allows for more flexibility. “Caribou Perks does allow for great flexibility,” Vig explains. “Our guests have told us they want a program that is personalized for them and this flexibility will allow for a more personal experience for each guest.” Vig says it’s too early to tell how Caribou Perks will evolve, but for now, attracting members to the program is the main goal. “In the future we’d like to be able to tailor the program to our customers’ needs,” she says. “With so many loyalty programs out there, a personal connection with each of our guests is very important. This personal connection allows us to customize our loyalty program to meet the needs of every guest on a unique level. No more ‘one size fits all’ approach to loyalty. Caribou Perks is a unique, surprise and delight program that rewards guests for just being our fans.” Vig said Caribou Coffee wants to build an emotional bond with its customers. “We researched and tested the program for 18 months and the surprise and delight really matches up with our brand,” Vig explains. “Because we’ve come out of the gate super strong, there is a lot of interest and we wanted to take steps to deliver something that was differentiated and represented our brand in that light.” The core aspect of the program is simple, Vig says: “The main thing is to thank them for their loyal business and provide them with perks along the way. The more they engage the more perks they receive. They told us they appreciate that we appreciate them.” While she couldn’t reveal any future plans, Vig says she wants the program’s next two steps to be even more differentiated, more engaging, and offer a different value proposition than other brands. Vig says social media will play a role in the future. “It’s definitely part of our development piece,” she says. “We’ve gotten a lot of feedback from customers and they’re really excited because they’ve wanted this for a long time. We definitely have goals for enrollment. At this stage, it’s about hitting enrollment numbers, and in the future it will be about looking at different groups as to whether they’re new or retained.” An ongoing aspect related to the program is developing a centralized customer database to create a 360-degree view of the customer, Vig explains. As it learns more about its customers, customer purchasing habits, and which offers resonate to build strong emotional bonds, Caribou will roll out further enhancements to Caribou Perks. “We know that our guests are constantly on the go and therefore we’ve made our program easy to access via our mobile site and customers can enroll simply by texting “ENROLL” to 65017,” Vig says. “The program was created to enhance the overall guest experience at Caribou coffeehouses nationwide and reward the brand’s passionate fans, while keeping our coffeehouses interesting and exciting.” Most loyalty programs are still heavily focused on financial rewards and don’t include enough of the unexpected surprise and delight element that strikes an emotional chord in customers. When customers are shown they are valued in unexpected ways that serve their specific needs, their loyalty can be won. Connecting with customers emotionally is the key to the surprise and delight package, Vig says. It might be a difficult metric to gauge, but that is the overarching goal. “At Caribou, we want to connect our brand with the feeling of community,” she says. “Our guests are extremely important to us, and by listening to them we can more successfully focus on initiatives that elevate and enhance the coffeehouse experience through programs such as Caribou Perks.” L

Most loyalty programs are still heavily focused on financial rewards and don’t include enough of the


Loyalty Management™ • LOYALTY360.ORG


Marketers Take Note:
Deal-Seeking Customers
Jim Tierney

Here are Your Six Groups of



Many marketers use deep discounting and promotional strategies that can be damaging to brands and confusing to consumers. A new report from Experian Marketing Services, a global provider of integrated consumer insight, targeting, data quality and cross-channel marketing, focuses on a major disconnect between retail discounts and customer mindsets.

5 4

John Fetto, senior analyst, marketing and research, at Experian Marketing Services, says that there is such a disconnect between the degree to which retailers are offering discounts and deals these days, and the mindset of the consumer when it comes to needing or wanting them.

“Marketers need to understand the deal-seeking nature of all consumers in order to give deals to those who need them and avoid leaving money on the table by giving mass discounts to those who don’t care”.

Fear not marketers, because Experian has identified the six categories of deal-seeking consumers. Deal-Seeker Influentials - always seeking the best deal and the next hot thing. These shoppers, which make up approximately 17% of the total population, are constantly looking for the best online, offline and mobile deals. Deal-Seeker Influentials tend to be young, highly educated, socially active consumers who love shopping but don’t expect to pay full price. They are almost 2.5 times more likely than the average American to say that they trust the information they see about products on social media and purchase a product when they have seen it advertised on social platforms. They are very active on the Internet and social media, especially when it comes to talking about their favorite products and brands. Interestingly, they are also highly influential within their social circles and tend to be trendsetters.

“We just came out of the holiday season where deals were everywhere and they were constant,” Fetto explains. “Marketers have essentially conditioned consumers to expect a deal and to believe that paying full price means paying too much. Interestingly though, there are a lot of consumers who care less about deals or are at least less motivated deal-seekers. Marketers need to understand the deal-seeking nature of all consumers in order to give deals to those who need them and avoid leaving money on the table by giving mass discounts to those who don’t care.”


Loyalty Management™ • LOYALTY360.ORG

“Since the recession, consumers have increasingly come to expect deals and discounts to the point that some of them have stopped seeking them out. This actually presents an opportunity for marketers to start to phase out their mass discount tactics”.


Deal Takers - social, but not influential. Deal Takers are highly educated and affluent consumers who will accept a deal if offered, but are less likely to seek one out. Promotions targeted at this group of consumers must be well publicized online and offline. They are 24% more likely than average to try a new store if they are offered a sale and 21% more likely to try a new store if they have a coupon. They are also 21% more likely to connect to social media on a variety of different devices, 31% more likely to click on links shared on social media and 17% more likely to pay attention to ratings and reviews. However, they are much less influential online than Deal-Seeker Influentials. Deal Indifferents - deal or no deal, give them what they want. Deal Indifferents make up the largest segment of the population, almost 30% of adults, and are unlikely to change their behavior because of a deal. Of these consumers, 60% go shopping only when there is something specific they really need. Because they do not care if they get a deal, marketers who employ a “mass-couponing” strategy will waste valuable resources on this sizable group and miss out on profits they could have otherwise kept.

“For the Deal Rejectors segment, for instance, a memorable customer experience is one that they immediately forget, meaning that they were able to get what they want and get out without anyone standing in their way,” he adds. “For other segments, like the Deal Seeking Influentials, a memorable experience is a sharable one. Leveraging the social influence of this segment to spread the word about their brand is exactly what marketers should be aiming for when targeting these consumers.” Marketers can be even more successful if they combine this information with their own customer data so that they know into which segment each of their customers falls, Fetto says. “They can then use this information to develop personalized messaging, content, and offers that are most relevant to each customer to deliver a better brand experience,” he says. “The rapid rise of smartphone adoption has empowered motivated consumers with the ability to showroom and seek out better deals on products that they find in other stores. This doesn’t mean that all consumers who showroom are necessarily less loyal today than they were prior to when they started using a smartphone; it just made it easier for them to shop around. Certainly though there are consumers who take advantage of showrooming with their smartphone who previously may not have gone to the effort to physically visit a number of stores or sought out the best price online from home or through traditional coupon sources. For these consumers, loyalty has likely taken a hit. The good news is that they are likely to be less motivated deal seekers and retailers can regain their loyalty by delivering on other factors that they say are important (service, environment, convenience, brand selection) while making the customer feel like they’re getting a good value on the bulk of items that they purchase from them. Also, since the recession, consumers have increasingly come to expect deals and discounts to the point that some of them have stopped seeking them out. This actually presents an opportunity for marketers to start to phase out their mass discount tactics.” L



Offline Deal-Seekers - best deals, traditional media. These shoppers, a majority of whom are over the age of 55, are avid deal-seekers but to a limit. Of these consumers, 63% report that they head straight to the clearance rack when they enter a store but they are unwilling to travel far to shop, even if it’s an outlet. They are highly social with many different groups of friends, but their influence in the digital domain is limited as they are less likely than average to engage in social media. This segment is also less likely to use the Internet to plan shopping trips or compare prices. Deal Thrillers - love their deals, but are brand loyalists too. Deal Thrillers, with a mean age of 49, love getting a deal but are also brand loyalist. Deal Thrillers are 57% less likely than the average population to say that a coupon or sale would encourage them to try a new store. In fact, they are less likely, in general, to use coupons at all.

Deal Rejectors - get in, get out: convenience rules. These consumers are the most shopping-averse group, wanting convenience over anything else. For these consumers, who are 58% male and tend to be older, convenience, service and brands far outrank price when it comes to making purchase decisions. This group of shoppers has higher-thanaverage discretionary income and a willingness to part with it. They are also 59% less likely to trust information they receive through social media channels. “The truth is many people don’t love to shop or they don’t want to put in the extra effort necessary to get the best deal,” Fetto says. “Many are content making their purchases from retailers they know and trust, even if it ends up costing them a little more.” Different consumer segments want different things when they go shopping, Fetto said.

Loyalty Management™ • FIRST QUARTER 2014



Admittedly, Diane Oldenburger-Henning, Consumer Loyalty Manager for Jockey, tries to stay one step ahead of where the retail loyalty industry is headed. She carefully monitors almost every loyalty program that any retailer has to find out how a particular program works, what it offers, and associated best practices.

The Jockey Rewards loyalty program was implemented in 1996, but Oldenburger-Henning says the program will be reviewed as well as current CRM efforts this year to refine the overall process to better match customer expectations. “Are we light years ahead of everyone? Probably not,” Oldenburger-Henning says. “But refining our loyalty program and CRM system is our focus this year. We’re learning more about how tied POS systems have become with loyalty and CRM. We want to assess what we’re doing versus the marketplace and where we can find benefits and cost advantages.” Oldenburger-Henning says she is hopeful that refinements to Jockey’s loyalty program can improve the overall customer experience. “The program has quite a bit of history,” she says. “We did a major overhaul of the program in 2010 and the major thing we did in 2013 was we implemented a clienteling system within our outlet stores.” Oldenburger-Henning says clienteling is a web-based application that gives Jockey’s store associates and corporate customer service associates access to rewards members data from the POS or from their PCs. “In clienteling, associates can update consumers’ personal information – address, email, phone, etc.,” she says. “They can also look-up past transactions down to the UPC level. This allows our associates to provide better customer service during repurchase events. The transactional information also assists with returns and fraud prevention. Associates also have access to reward certificate information.” What’s more, associates can view open, redeemed, expired, and replaced certificates in clienteling. “Members no longer need to remember to bring their reward certificates into the store,” Oldenburger-Henning explains. “Store associates can now look up their reward information. Clienteling has also given Jockey the ability to email reminders to our members that have open certificates in an attempt to drive store

and online traffic. With our recent bra launch, clienteling also allows associates to record a member’s bra size. This is especially important since Jockey bras have a revolutionary new sizing system.” Since Jockey is a privately held company, Oldenburger-Henning declined comment about core loyalty strategies, but explains that the VIP loyalty program for top spenders increased its membership by 25% in 2013. “The VIP tier is relatively new to the program and is growing in numbers annually,” she explains. “VIP members enjoy an additional 10% all purchases and free standard shipping online. They also receive incentives to try our new products when they launch. Since they are our brand ambassadors, we want to promote product trial with these members. In addition, VIPs receive exclusive offers throughout the year.” Oldenburger-Henning attributes the significant increase in VIP members to a couple of factors. “Bras have a higher price point than our typical product offerings and bras launched in mid2013,” she explains. “We also added a monthly email campaign, letting our members know how many dollars they are away from earning VIP status. Once you are $50 or less away from earning VIP, we remind you of all the great benefits.” Jockey sold bras before mid-2013, however, the existing bra was discontinued and then re-launched with Jockey’s new bra ($60) with a revolutionary and patented volumetric fit. Empowering associates with more data is “clienteling in a nutshell,” Oldenburger-Henning says. “We are giving our associates more and more data and this gives our associates the ability to provide better customer service and create even more loyalty with our members,” she explains. Moving forward, there are a number of enhancements Jockey needs to invest in: Creating a cohesive experience between brick and mortar and online: “In 2014, we plan to provide our online rewards member with the

Seeks to Refine

Loyalty Program

Jim Tierney


Loyalty Management™ • LOYALTY360.ORG

“It’s a delicate balance between acquisition and retention. We want to acquire you and keep you active. That’s the primary purpose.”

robust data that we now provide our store associates,” OldenburgerHenning says. “We want our members’ shopping experiences to be seamless regardless of where they shop.” Getting our systems to speak to each other (updating our CRM system and tying it to my loyalty program): “Currently, loyalty data can experience up to a two-week delay between our loyalty system and our CRM system,” she says. “Our data is sent and then updated in weekly batches. Customer expectations are causing us to re-evaluate our systems to make the data timelier.” Loyalty360 President Erin Raese says this trend is very popular in today’s loyalty industry. “Organizations are finally seeing the need to bring CRM and loyalty together,” Raese explains. “They can’t exist as siloed systems. They need to be one cohesive and comprehensive platform that allows for consistent experiences and messaging to each customer.” Jockey Rewards is a points-based system whereby every dollar spent equals one point earned. If a customer spends $100, he or she receives 100 points and a $10 certificate in the mail. If a customer spends $200 or more during a calendar year, he or she becomes a Jockey Rewards VIP member through the end of the following year. VIP members receive 10% off all merchandise purchases and free standard ground shipping on Jockey.com. Accounts are updated on a weekly basis and rewards certificates are mailed weekly. Oldenburger-Henning says that some of her challenges are just integrating the systems together, getting data that store associates need, and coordinating that with online to create that omnichannel look and view. “Providing customers the same information we have in stores and online is one of the biggest challenges we have,” she says. “One of our projects this year is taking a step back to assess our current CRM system. In 2005 we put in on the database side campaigning tools and business analytics tools. Obviously, technology has changed light years since 2005. We know there are better ways of doing what we’re doing and we want to figure out what that is. Will it give us cost efficiency so we can utilize our funds currently spent on CRM and loyalty and, perhaps, repurpose them? Basically, we want to create ourselves a road map and come up with a suitable timeframe.”

Oldenburger-Henning admits keeping up with customer expectations can be challenging. “If you’re a member of our loyalty program, they do want to know why they can’t see their points the day after their purchase,” she explains. “My biggest challenge is tying it all together. We want to provide customers with the same information in-store and online so they have access to it through any channel.” Although Oldenburger-Henning wants to refine the loyalty program and tie it to CRM, Jockey has made huge strides with its loyalty program since 2010. Jockey’s loyalty program before the 2010 relaunch: Paper applications – delay in getting customer information into system for campaigning purposes Paper customer change forms – delayed change of address, email, phone, etc. Monthly batched loyalty data – points updates, etc. Monthly certificate mailings 200 points (1 point per dollar) to earn a $20 reward After 2010 relaunch Web-based signup at POS – New signups are now in CRM system the following day for campaigning purposes Customer updates – Since 2013, all customer changes, email, phone, etc. are made in clienteling and updated in the CRM system the following day Weekly batched loyalty data – points updates, etc. Weekly certificate mailings – 52 mailings vs. 12 100 points (1 point per dollar) to earn $10 reward – More reward certificates in the hands of our consumers Clienteling system and access to customer data in-store While Oldenburger-Henning is pleased with the direction Jockey is taking along the customer loyalty/CRM path, she knows there is always room for improvement. L

Loyalty Management™ • FIRST QUARTER 2014



Gregg Sauter is Vice President of Business Development and Marketing for the Saskatchewan Roughriders Football Club. Gregg leads all marketing, brand development, ticketing, CRM and communication functions including all things digital. Prior to the Riders Gregg spent eight years with Nokia Mobile Phones where he was Global Director of Media Partnership Development and Marketing, driving mobile content adoption with some of the world’s largest media brands. Prior to Nokia Gregg served as Director of Consumer Products with the National Football League in New York where he managed NFL branded video games and children’s products. Gregg’s accomplishments also include launching the LEGO Toy Group’s Media division in North America, where he led marketing, brand and sales functions. WHAT’S THE MOST REWARDING ASPECT OF YOUR ROLE WITH ROUGHRIDERS? The most rewarding aspect is witnessing the emotional impact we are able to make across our fan base. Parents and children, young and old, all demographics who form a bond around our brand. Much of this comes outside of game days - in the community throughout the year. Passion for our brand runs deep and allows us to have a very positive influence on our fan base and community – locally and nationally. We see some very special moments, some happy, some sad. More than once I have had tears in my eyes. Not many companies or brands have this level of emotional impact on, or with their customers.

PRIOR TO JOINING ROUGHRIDERS, YOU WERE WITH NOKIA, WHAT DIFFERENCES DO YOU SEE BETWEEN THE TYPES OF ORGANIZATIONS? Well clearly Nokia was a global powerhouse, historically a top 10 global brand, #1 in Asia, selling more than 1M phones a day with 35+% global market share. We had relationships with our customers and achieved a level of brand loyalty, but when it comes to the personal level of passion and brand affinity, the Roughriders are in another league. We have people being married and buried in our colors. Literally planning their lives around our team and embracing our brand in their lives.

WHERE ARE THEY SIMILAR? Despite the obvious differences, there are similarities in terms of corporate challenges, both companies are or were at the top of their industries, experiencing great success and the envy of their competitors. Nokia will go down in history as a company that didn’t handle that success well and it’s a lesson we take to heart with the Roughriders, never taking for granted our position in our industry, never taking our customers for granted and always striving to deliver more value. Nokia clearly struggled to remain humble, evolve and adapt in a hypercompetitive marketplace.


Loyalty Management™ • LOYALTY360.ORG

WHAT DO YOU SEE AS THE NEXT BIG TREND IN CUSTOMER ENGAGEMENT AND LOYALTY? I think we’ll see continued emphasis on creating stronger one-on-one, personalized or personally relevant relationships with customers. We now have the technical solutions that allow us to scale personalized engagements and reward individuals in a way that wasn’t possible in the past. I think we’ll also see companies continue to embrace the current environment where customers are empowered and can make or break your brand. The great thing about this is that there’s no hiding anymore, it forces companies to deliver better products and services or face the wrath in a very public way.

WHAT TREND OR TECHNOLOGY SHOULD MARKETERS EXPIRE AS A FAD OF THE PAST? Couple things come to mind I guess... #1, Facebook is dead with teens, so if you are targeting 13-20 year olds Facebook is a thing of the past or soon will be for that demographic. I’ll also throw in traditional PCbased web browsing, which wouldn’t be considered a fad but the present and future, are all about mobile so it always surprises me when I see content that isn’t optimized for mobile devices, which are making up the majority of browsing sessions now.

WHAT IS THE BIGGEST CHALLENGE YOU ARE CURRENTLY LOOKING TO SOLVE? This may be a cliché, but our biggest challenge is our biggest opportunity and that is taking our brand broader nationally and deeper locally. From there it’s about the challenge of monetizing that engagement. We are also building a new $300M stadium and are adopting new technical enablers which, despite the maturity of today’s software solutions, is always a challenge.

WHAT DO YOU BELIEVE IS KEY IN DRIVING TRUE CUSTOMER LOYALTY? The fundamentals of business haven’t really changed. Everything is about a value proposition and if your customers are not loyal then they aren’t seeing the value they expect or demand – which could be a poor product, poor service or overall poor experience. Companies that have exceptionally loyal customers are excelling in delivering value to their customers, which could be old fashioned hospitality or technically enabled value. At the end of the day it’s about delivering a great product or service and rewarding your customers. We just have a few new tools to help us do that now.
Continued on page 32

WHAT MARKETING INNOVATION DO YOU WISH YOU HAD COME UP WITH FIRST? Having spent 8 years in mobile, I have to tip my hat to Steve Jobs and the original iPhone, but I am also really impressed with Trip Advisor and Yelp. Not sure if these would be considered “marketing innovations,” but these innovations have created significant disruption their industries and new tools for consumers.

Behind the Brand with Gregg Sauter continued...

WHAT IS YOUR PERSONAL MOTTO? There’s the old saying…“Nothing stays the same. You are either growing or shrinking.” I really like change.

HOW DO YOU MEASURE SUCCESS OR FAILURE? Success metrics: • Size of the challenge – height of the bar. • Difference made, value delivered. • What’s been learned that can be reapplied

WHICH BOOK(S) ARE YOU RECOMMENDING AND WHY? I recently started reading “Blockbuster” by Anita Elberse. It discusses the entertainment business and the concept of hit driven properties that most content companies embrace. A few years ago all the hype was around long-tail content and how this would change the dynamics of the content industry. That was probably misguided speculation and even Google has done a 180 on this topic. There are a lot of lessons in the book that go beyond the entertainment business. WORDS OF ADVICE FOR THE NOVICE MARKETER? Anthony Robbins once said something like: “In order for a relationship to succeed, you need to think of it as a place you go to give and not a place you go to take.” Think about this with your product or service. The more value you give, the more you will get back. Think about the value proposition and differentiation tied to your product or service. Remember, in this day and age, your customers are now your most valuable marketing asset, so exceed their expectations and reward them. Remember that marketing is as much about retaining customers as it is about acquiring them. It’s a lot easier to do the former. L


WHO HAS HAD THE MOST INFLUENCE ON YOUR PROFESSIONAL LIFE? I’ve had the opportunity to work for some great brands and with some great leaders – NFL, LEGO, Nokia and now the Roughriders. In each instance there have been one or two really impressive people who have had a great impact me. In my case it’s not really about one person, but more like specific attributes from a hand full of people.


FAVORITE LEISURE ACTIVITY? DOES THIS INFLUENCE YOUR WORK? I’ve been a lifelong skier and have worked at ski resorts in Utah after university. I’ve skied at a lot of resorts and the experiences I’ve had (good and bad) have made me think about the experiences we deliver to our customers. Larger ski resorts are also quite innovative with respect to loyalty, rewards and customer engagement.







DO YOU (OR WOULD YOU) LIKE TO VOLUNTEER? WHAT ORGANIZATIONS OR CAUSES ARE YOU MOST PASSIONATE ABOUT? We are huge supporters of Anti-Bullying education in cooperation with the Red Cross. Our players present to thousands of kids in schools during the off-season. The Red Cross and United Way are incredible organizations and there’s nothing more important than causes that support kids. Hope to spend more time with organizations like this.





JOIN GREGG AT LOYALTY EXPO 2014 We encourage you to join Gregg Sauter as he presents “Enhancing Loyalty and Retention by Turning Every Customer Into a Fan” with Ruby Newell-Legner | 7 Star Service


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


Loyalty Management™ • LOYALTY360.ORG


Trending NOW
Brands to Watch:

Expect to see increased focus on content as a marketing strategy in the near future, according to research conducted by Loyalty360. In a survey of over 100 marketing professionals, most report that budget allocated toward content marketing will increase in the next fiscal year. In fact, one-third said financial support will increase more than 10%. The increasing sophistication of how marketers are using content may be one reason for the impending increased spending.



It isn’t news that mobile is becoming entrenched in many aspects of the average consumer’s daily life, but brands are now starting to test and understand how to leverage mobile to build customer loyalty. Apps allow customers to have interactions with their rewards accounts at the point of sale, such as signing up, checking points balances, redeeming rewards and earning bonus points. Expect to see mobile ordering and payment options prominently offered.

Who’s Leading the Way?


More solutions are coming to market that allow users to toggle between multiple loyalty, membership, credit, debit, or gift card accounts using a single, sleek device at the point of sale. The result is that consumers who load their accounts on the device will no longer need to carry a wallet full of cards, but can carry one card that handles all of their payments and reward memberships.
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Who to Check Out:


Loyalty Innovation
Insightpool helps the world’s most innovative brands develop stronger relationships with their most important influencers, prospects & customers through social media outreach. By instantly identifying and proactively engaging the right people at the right time, brands like Intercontinental Hotels Group (IHG), Home Depot and COX Communications use Insightpool to increase brand loyalty and even their bottom line. Insightpool is pioneering the notion of Social Drip Marketing, which takes the same principles and techniques popularized through email and applies them to successive social engagements over time. It is especially helpful for companies looking to educate their audience, stay top-of-mind and build loyalty. ‘The Rule of 7’ is a popular marketing adage where your marketing message needs to be seen at least seven times before it leaves an indelible impression. Insightpool’s proprietary Social Drip Marketing tools allows brands to leverage ‘social currency’ to engage individuals in order to build deeper rapports. As one of the most highly regarded social media thought leaders, Brian Solis, explains in his most recent book ‘What’s The Future of Business,’ “customer relationships are to be shaped, not simply reacted to or managed.” For that reason and many more, we created Insightpool to help your brand take a proactive marketing approach and drive your brand loyalty by surprising & delighting those most important to your brand.

Products, Advancements & Technologies

MoPals.com Inc. (MOMO) is a publicly traded company and the world’s first community-driven, crowdsourced loyalty program that bridges the gap between social media and reward platforms. With a mobile-based, experiential and Big Data-driven platform, MoPals rewards its members for both social and transactional behaviors. MoPals uses an exclusive digital currency, MoCoins™. MoPals builds on these platforms, providing a fresh approach to loyalty, allowing businesses to incentivize and reward members in four distinct stages: Rewards prior to purchase: Using iBeacon and Bluetooth technology, members can earn rewards for checking in to participating businesses and buying and sharing offers. Rewards for purchases: When shopping at a participating business, members can earn anywhere from 5-20% of their total spend in MoCoins by simply scanning the QR code on their receipt. Rewards after purchase: Who would have thought that snapping a photo of your favorite food or taking a selfie with your latest retail purchase would translate into valuable rewards? MoPals rewards their members with MoCoins for their brand ambassadorship, social media engagement and word-of-mouth advertising. Members are also rewarded for writing business reviews, sharing offers, “Liking” a business, and sharing photos and videos to the community. Rewards for building the community: Inspired by the success of online crowdsourcing platforms such as KickStarter and Wikipedia, MoPals rewards members when they engage with and help grow the MoPals community. Members can earn MoCoins for referring friends to sign-up, reporting bugs, participating in polls and flagging inappropriate content.

Reward Customers for Reading Your Emails 2013 was filled with talk of Pinfluencers, Facebook algorithms, and promoted tweets. Social media grabbed the focus of busy marketers trying to rise above the noise and increase message penetration on crowded feeds and jam-packed streams. But guess what? Email is still king. Based on recent ExactTarget research, permission-based email is the preferred way users would like to engage with brands- topping both social media and text communication. And 59% of moms surveyed by PunchTab said that they’d provide their email address and would like to receive emails from a brand if rewarded for those actions. All of this is great news for marketers because it means persistency. While your tweets get buried and your pins get lost, email stays right there in the inbox. There’s no falling off the feed- your message is preserved until intentionally deleted. So finding a way to reward customers and prospects for engaging with your brand, on the most persistent channel and the one through which they most want to hear from you, seems like a pretty good idea. (Light bulb moment!) PunchTab joined forces with ExactTarget to create a powerful integration allowing markers to incorporate email into their loyalty programs. With the PunchTab app for ExactTarget, brands can reward users for subscribing, opening, clicking and forwarding emails and newsletters. Or take it a step further by creating relevant, personalized, trigger-based communications based on behavioral data from the PunchTab platform. Finally brands can incentivize behavior that increases message penetration by rewarding users for reading (and sharing) what they need to see most. *http://boletines.prisadigital.com/The2012ChannelPreferenceSurvey_WEB.pdf Several CashStar clients have launched this new feature, including QVC, Williams-Sonoma, Pottery Barn, West Elm and others. The Tactile Unwrapping module was released in conjunction with a new, enhanced preview feature that helps convert buyers. These latest enhancements not only increase the conversion rate and transaction frequency, but also user satisfaction ratings of both giver and receiver of digital gift cards. CashStar President and CEO Ben Kaplan explains, “Everyone loves receiving gift cards, but buyers often worry that they lack that personal touch. By sending digital gift cards in selected gift wrap with a message to the recipient, the gift card becomes a truly thoughtful and personal gift. And, the enhanced customer experience encourages future purchases by both the sender and recipient.”

Tactile Unwrapping ™ is the newest module in the CashStar platform. These new capabilities make digital gifting even more personalized and engaging by replicating the gift unwrapping experience in the digital medium. The module can be configured to allow purchasers to select wrapping paper, add a hand-written message, and virtually wrap the gift. Recipients unwrap eGift Cards using fingertips on touchscreen devices or with a mouse on desktops and laptops.

Epsilon Introduces SurveyDirect: First 100% Self-Reported, Proven Solution Epsilon, the global leader in creating customer connections that build brand and business equity, today announced the launch of SurveyDirect, a new self-service solution providing access to 100% self-reported data. . Comprised of proven direct mail responsive assets, SurveyDirect combines two self-reported sources, survey and product registration cards, offering comprehensive insight that drives precision targeting to deliver ROI. This powerful self-reported data is collected from online and offline surveys and captures unique data attributes on consumer behavior, attitudes, lifestyles and interests. “SurveyDirect is truly unique to the marketplace. It combines survey data and product registration card data into a single self-serve solution,” said Warren Storey, SVP of Data Products at Epsilon. “Furthermore the data has a proven performance track record. It’s not often marketers can launch a product or a campaign and be assured of a proven direct response list.” SurveyDirect has more than 200 of the most utilized selects, making it easy to access the best prospects all in one central self-serve environment. Epsilon is an Alliance Data company. For more information, visit www.epsilon.com, follow us on Twitter @EpsilonMktg or call 1.800.309.0505. 


Future of Loyalty
Cindy Faust

It’s always fun to hear what people proclaim to be the new and latest trends for the new year. So with that, we’ll share some perspective from Aimia - talking about the future of loyalty and what we at Aimia call the power of real relationships.
In business terms, it’s what we are doing to help our clients and partners measure their return on investment, promote smarter decision-making and enhance their engagement with consumers in a more enduring way. In human terms, it’s about making business personal. It’s about distilling smart, customer-centric data to deliver a customer experience that not only rewards customers, but also delights them and transforms them into brand ambassadors. Reality is that the retail experience for most consumers today is not that. This is what we mean by making business personal. With the right science behind it, we can use technology and data to help re-create that personal connection, a real relationship. Building real relationships is not a simple task. Every day we are inundated with vast quantities of data; a veritable data gold rush that will have major ramifications for brands, consumers and marketers. Information around the world is being captured – often in real time – tracked, analyzed and digested to discover how to best engage with consumers through interactions, to connect the data dots in new ways across the purchase cycle, and to then build real relationships. Take for example the development of wearable computers, which promise to stream real-time information and deliver enhanced-reality applications directly into your field of vision. Combining a camera, video recorder, microphone, voice recognition, and processing power, these new devices are essentially hands-free tablet computers. SCENARIO #1 Device manufacturers and partners join forces to build applications that enhance the quality of life for wearable computer owners. Users are invited to opt in to data-sharing applications that provide recognition/rewards in exchange for allowing marketers to collect data about location, ads viewed, retail environment experiences and other behavioral data. The customers understand exactly what data is being collected, who sees it, and what value they receive in exchange for providing access. Brands and their customers work together to form sustained, meaningful, deeper relationships. SCENARIO #2 Marketers collect data without users’ knowledge or permission and sell data to third parties. Since data is sold to the highest bidder, marketers attempt to monetize personal information with intrusive, targeted advertising that appears to come from Big Brother. Wearable computers become just another delivery mechanism for digital junk mail. In this scenario, customers are more likely to get offers optimized for merchants, but not relevant or fulfilling for them. At Aimia, we believe that if consumers and brands are to benefit from Big Data, we must strive for a future that values and promotes real relationships. This is a world in which responsible customer data results in: • Identifying best customers • Understanding their journey • Providing relevant/timely experiences along the way • Promoting engaging offers • Communicating wherever customers are/through channels they choose • Interacting in more meaningful ways

It’s about distilling smart, customer-centric data to deliver a customer experience that not only rewards customers, but also delights them and

transforms them into brand ambassadors.


Loyalty Management™ • LOYALTY360.ORG

Building Real Relationships in a Big Data World

THE KEY TO THIS MUTUAL BENEFIT IS A FOCUS ON CUSTOMER PRIVACY PRIORITIES: • Transparency - knowing what data is collected and how it’s used • Reciprocity – meaningful rewards and recognition in exchange for their data • Control - over what they provide/how it’s shared • Trust - knowing their data is secure and being used based on their permission Part of the potential in Smart Data, however, lies in our ability to add customer-centric data to the traditional transaction throughout the consumer lifecycle. These new data sets illuminate, anticipate, and reinforce purchase behavior, and function as levers to reinforce relationship value. THERE ARE MANY CATEGORIES OF CUSTOMER CENTRIC DATA, EACH UNIQUE IN ITS ATTRIBUTES, AUDIENCES AND OBJECTIVES. Loyalty program data: By connecting purchase data to individual customers, loyalty programs allow you to devise test-versus-control environments, perform customer segmentation and measure the impact of your marketing offers. With their ability to reward customers based on current and potential value, currency-based programs provide an even richer data set. Web analytics data: By connecting web search and online shopping behavior to transaction data, you can customize your web experience to the individual. Amazon, for example, famously conducts A-B tests down to the level of font size and color to determine the impact of the online experience on purchase behavior. Shopper data: For retailers, SKU-level and shopping basket data provides a nearly bottomless source of insight on retail shoppers. Sophisticated retailers use shopper data to influence store design, to optimize pricing, and to help category managers make smarter promotional decisions. Auction data: Understanding a customer’s propensity to purchase and the price elasticity within an auction environment provides brands and retailers with unique insights into pricing models and consumer behaviors.

Social media data: Just knowing how many Facebook users have “liked” your page tells you nothing about the impact of those “likes” on sales. But what if you encourage customers to connect their social graph to loyalty program membership? You might open a rich vein of data on how social media engagement influences purchase decisions more broadly than you might realize. Mobile data: Similarly, encouraging mobile engagement through a reward program app can uncover location, offer response, and even in-store behavioral data that can enhance your ability to build relationships through mobile devices. You’ll learn to focus on offers that enrich the mobile experience and stop those that force customers to disengage. CRM data: By connecting purchase and loyalty data to data flowing from your call centers, returns department, and points of sale, you can develop robust customer profiles that allow you to design differentiated experiences for your most valuable customers. Third-party data: The ability to overlay demographic, lifestyle, and other third-party data sets on your core transaction data set can unlock insight into share of customer information, help identify underserved markets, and even help develop new market opportunities. Today, transaction data represents the floor of your marketing potential, rather than the ceiling. The potential to tie interactions to transactions to fuel marketing insight, and to leverage new communication channels to reward profitable behavior more rapidly, bodes well for the future of customer loyalty. Marketers that leverage customer-centric data may, with customers’ enthusiastic help, create the future of real relationships. As marketers, we are in the early stages of defining what real relationships driven by smart data can achieve – both for consumers and for brands. But the evidence thus far suggests that the results can be startlingly good.
Continued on page 38


Loyalty Management™ • FIRST QUARTER 2014


Future of Loyalty continued...

CONCLUSION The most obvious prediction we can make about the future of loyalty in a Big Data world is that, just as we think we’ve found our place in this new world, everything we understand about it will change. Wearable smart devices are merely the tip of the iceberg. Soon our homes, our appliances and many of the products we buy will be connected wirelessly to the cloud and transmitting data about our behavior back to brands to both refine products and provide marketing insight to deliver the best customer experience to each customer – thereby delighting them.

Machine learning applications such as Apple’s Siri will become smarter and more efficient. Natural language processing will make conversations with our devices eerily similar to conversations with our flesh-and- blood counterparts. Behavioral targeting will increasingly drive web search results. Payment networks will migrate to mobile devices, resulting in a convergence of geo-location and purchase data – this has already begun. New technologies and business models currently developing in garages across America with new, innovative startups will soon challenge even these assumptions.

To Focus Your Efforts, Consider Rallying Around these

Four Simple Principles:
2. Start with transactions; add interactions. If you’re unsure where to start your data journey, begin with the transaction. Connecting a purchase to an individual customer opens up tangible and immediate benefits — you can devise offers that increase lift, gain wallet share, and reduce churn, and you can measure the impact of each one. As your analytical ability grows, start connecting the dots from the transaction to interactions through social, mobile, or web channels to build a robust view of customer value and potential and to close gaps in knowledge across the purchase cycle and over time.

1. Place all your data efforts in service of customers. If you live by this principle, customers will reward you for it. Serving customers with your data efforts means seeking permission, using data transparently, and rewarding them for voluntarily sharing personal information. Even the largest social and search giants will live or die on their willingness to serve their customers, rather than abuse their trust.

3. Build relationships based on trust, commitment, and reciprocity. Information is useful only if it provides insight that helps you strengthen relationship value. Customers are fickle and promiscuous, but they are loyal to brands that build trust through transparency, demonstrate commitment through recognition, and deliver reciprocity through rewards. Data collected in service of relationships will pay dividends on the investment.

4. Don’t monetize your customer’s individual data directly. Hold it as an asset. The incentives to sell your customers’ individualized data to the highest bidder are high. Resist this temptation. The tradeoff of short-term profits for long-term enterprise value is considerable if you treat data as a capital investment rather than as a marketing expense. Hold yourself as the caretaker your customers’ personal details, and they will reward you for it.

“The most obvious prediction we can make about the future of loyalty in a Big Data world is that, just as we think we’ve found our place in this new world, everything we understand about it will change“

If we rally around these principles as marketers, we will ensure a bright future in which technology, data collection, and marketing communications serve their proper place in building a future where real relationships take hold. While we may be some time away from mass adoption of wearable computers, we are close to being able to connect the dots using existing technologies. We then need to proactively position our businesses to place data and technology in service of our customers. It’s the difference between using these tools to spy on our customers, and using them to see the world through their eyes. L

Cindy Faust drives strategy, development, and revenue of new and existing products to help position our clients for success. She is responsible for setting the strategic direction of product development based on client and market needs, and works in close collaboration with our clients and all areas of the Aimia business, both in the U.S. and globally.


Loyalty Management™ • LOYALTY360.ORG

Driving more profitable behaviors drives more profits for your business

Loyalty programs that drive customer loyalty can be effective. Intelligent loyalty programs that also drive incremental customer behaviors result in measurably superior ROI. exchangesolutions.com/profits

corporate@zagatdiningcard.com Phone: 866-932-4602

Accepted at participating Zagat-rated restaurants

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Drive Participation and Engagement
Mike McDonnell
Connexions Loyalty

Incentives are certainly ubiquitous. According to the Incentive Federation’s “Incentive Market Study,” nearly three quarters of U.S. businesses use non-cash rewards to recognize and reward key audiences in the form of incentive travel, merchandise or gift cards, spending $76.9 billion per year on those rewards.
A cash incentive is inherently simple; it’s typically one step and done. But how memorable is cash? Non-cash incentives are about the experience. For example, a gift card isn’t just plastic or an electronic code; it is coffee with a friend, a child’s birthday gift or paint for a new house. And with non-cash incentives like gift cards, the company has multiple opportunities to communicate with the person and reinforce their brand: when he chooses the gift card incentive, when he makes a purchase with the gift card and when he uses that purchased good. All the way through the process, the brand stays front and center in terms of messaging, further engaging the customer. As the authors of “Freakonomics” aptly stated, “An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.” So how are companies harnessing the power of incentives? Employee incentives and customer rewards are two main subcategories of this behemoth spending category. Whether it’s used to reward an employee for healthy behaviors or recognizing a customer for reaching a spending level, an incentive represents an opportunity to provide choice. By choosing to modify their behavior, people become more engaged with the company or brand. From the brand’s perspective, it’s about meeting the person where they are and providing relevant, memorable experiences to facilitate that engagement. Let’s look at a couple of case studies that showcase the power of incentives.

According to an employer survey conducted earlier this year by Fidelity Investments® and the National Business Group on Health, corporate employers plan to spend an average of $521 per employee on wellness-based incentives within corporate health care programs. This amounts to an increase of 13 percent from the average of $460 reported for 2011, and is double the per employee average of $260 reported in 2009. In addition, the survey found that an increased number of employers are using these incentives. Nearly nine-out-of ten employers surveyed indicated that they currently offer wellness-based incentives (86 percent), an increase from 73 percent from 2011 and 57 percent from 2009. Employers are smart to engage employees in healthy behaviors. By creating a wellness-focused culture, employers stand to improve productivity and reduce claims costs. Unfortunately, not everyone will make the healthy choice simply because it is in their best interest. Many people need to be motivated, inspired and encouraged to take full advantage of their health and wellness programs. Offering a broad


Loyalty Management™ • LOYALTY360.ORG

Every customer service misstep represents an opportunity. There is benefit to the brand in successfully fixing a mistake – oftentimes even more benefit than if the mistake never occurred.

catalog of incentives is a proven way to drive that engagement. For example, a 2013 study of Connexions Loyalty’s MotivEngine® found that when given the choice between a $240 credit on their health insurance premium and a $225 gift card to a major brand, 82 percent of members chose a gift card – despite it being $15 less than the insurance premium credit. The psychology of decision making and choice are at play here. In his book, “Predictably Irrational: The Hidden Forces That Shape Our Decisions”, behavioral economist Dan Ariely explains, “Standard economics assumes that we are rational... But as the results presented in this book (and others) show, we are far less rational in our decision making... Our irrational behaviors are neither random nor senseless they are systematic and predictable, making us predictably irrational.”

offer. And each of those people has an average of 470 friends and followers through social media sites. If we assume that those 80 percent are happy with the gift card apology experience and tell their friends, that could amount to more than 11,000 positive messages. However, if nothing is done to remedy the situation, imagine a scenario where a significant portion of the 100 people shared the negative customer service story with their friends and followers. This could amount to more than 20,000 negative stories. It’s easy to see how unresolved customer service issues can quickly snowball into a major brand issue.

With 30 years of experience creating brand advocates through memorable experiences we have found that in order to maximize engagement, control costs and meet customer needs you have to offer choice, even if the value is different for each award. In a recent TableBase™ survey, more than 80 percent of consumers said that brand name of the award was important. Clearly “cash” isn’t a brand name. Even if the value of cash is higher, consumers will often choose what is important to them in the moment… connecting with that friend over coffee, finding the birthday gift or working on the new house. It’s our job to meet the person where they are and provide relevant, memorable experiences to facilitate that engagement. L

Every customer service misstep represents an opportunity. There is benefit to the brand in successfully fixing a mistake – oftentimes even more benefit than if the mistake never occurred. In analyzing the results from one major brand that is using MotivEngine® as a means of remedying negative experiences, gift card incentives have received higher scores on surveys than other types of offers. Specifically, 80 percent of people who were offered the gift card accepted it. And 80 percent of them did so within one week of receiving the offer. A gift card provides a compelling apology, which is an important step in the path toward engagement, a satisfied customer and, overall, deeper loyalty. Beyond the benefit to the individual, the apology can impact others’ perceptions of the brand in question. Given the proliferation of social media, the good, the bad and the ugly are easily shared. Consider this scenario: Dimensionresearch.com states that 30 percent of people will tell others about a positive experience, whereas 45 percent will share a negative one. The client case study above showed an 80 percent offer acceptance rate. So for the sake of round numbers, let’s say that 80 people accepted the gift card out of 100 people who were sent the

As the Group Vice President of Product for Connexions Loyalty, Mike McDonnell is responsible for leading and managing the product organization, including product management, development and marketing.

JOIN CONNEXIONS LOYALTY AT LOYALTY EXPO 2014 MARCH 17 - 19, 2014 Hyatt Regency Grand Cypress | Orlando, Florida

Loyalty Management™ • FIRST QUARTER 2014



What Matters and

Influencing Customer Loyalty Through Events:

How to Measure it?
Satmetrix, Inc.

Vinay Iyer
Goombal, Inc.

Bill Karpowicz

Companies spend billions of dollars each year hosting events of various kinds: User Conferences, New Product Launch events, Technology Conferences, etc. Recent research by IDC, Aberdeen and Forrester shows that events consume somewhere between 15-23% of a CMO’s annual marketing budget. Events are the second biggest spend category after advertising. It is therefore not surprising that CMOs and other executives constantly push hard to get more out of events.


vents bring together your customers, prospects, industry influencers, media, senior executives from your company, partners, etc. While there are common goals of leveraging events to drive leads, pipeline and revenue, they also offer a huge opportunity to influence customer loyalty. By delivering a superior attendee experience, events can help create an atmosphere where people’s perceptions can be influenced significantly in a short amount of time – if the right focus is put on addressing what matters most to your audiences. So, what factors influence attendee experience? What should you focus on? Based on research done by Vinay Iyer and co-authors of the book ‘The Customer Experience Edge’, customer experience is influenced by four key factors: 1. Reliability – What is the promise you make, and how consistently do you meet or exceed those promises? What do you promise your event will deliver to your audiences? How closely does your event deliver on those promises? Be careful to not load up the agenda and activities with a lot of marketing and sales content; you are guaranteed to lose your audience – no one wants to be sold to today! 2. Relevance – How well do you research and analyze your audience’s needs and deliver them experiences that relate to their needs and expectations? As opposed to simply repeating an agenda from last year – which may or may not be relevant to your audience this year? Past success is no indicator of future success if you are not making your event relevant to your audiences today.

3. Responsiveness – Do you pay attention to what your audiences are trying to tell you both before and at the event and do something about it quickly? It is hard to get feedback. Even if feedback is given by your audience – on social media, through surveys, blogs, etc. – how well, and how quickly are you able to respond to them? 4. Convenience – Are you leveraging the best mix of latest tools and technologies, as well as traditional concierges and support staff, to keep your audience informed and connected? Before, during and after your event? Are you constantly innovating to stay in sync with your audience’s adoption of new ways to engage and interact? Now, in order for you to have control over the above four factors, you need to be able to monitor and measure your audience’s perceptions and responses. Given that in an event there are a large number of factors that could impact audience satisfaction, you need to smartly identify what factors matter more (speakers, event timing, event location, food, entertainment, etc.). Otherwise, you could end up focusing and spending money on things that simply don’t matter! Measurement and quantifiable facts are critical to make informed and consistent decisions. One broadly adopted measure of loyalty is the simple, but powerful Net Promoter Score (NPS) methodology. NPS has been used for many years to track customer loyalty in general. In recent years, several companies have started to adopt this measurement to measure event attendee loyalty.


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You can generate more ROI and success from your events by

Here’s the trend chart that shows how these 5 factors have been rated over the last 6 years. The scores are then analyzed for loyalty drivers so we can identify where improvements will have the greatest ROI. In technology, for instance, we got very negative ratings in our 2012 conference. Our attendees wanted the convenience afforded by the latest advances: 1. Free hi-speed wi-fi available in all meeting rooms 2. Mobile app to assist in scheduling and communication 3. Immediate online access to presentation decks 4. Immediate access to videotaped presentations

focusing on driving loyalty of your event audiences.
Case study: How Satmetrix uses Net Promoter Score (NPS) to track event attendee loyalty, and identify issues that need attention to drive attendee loyalty? Satmetrix is the leading provider of cloud-based customer experience solutions for companies worldwide, and developer of the industry-leading Net Promoter® methodology with Bain & Company and Fred Reichheld. The Net Promoter Score, or NPS®, is based on the fundamental premise that every company’s customers (and event attendees) can be divided into three categories: Promoters, Passives, and Detractors. By asking one simple question - How likely is it that you would recommend [your event] to a friend or colleague? - you can track these groups and get a clear measure of your event’s performance through your attendees’ eyes. Customers respond on a 0-to-10 point rating scale and are categorized as follows: • Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth. • Passives (score 7-8) are satisfied but unenthusiastic attendees who are vulnerable to competitive offerings. • Detractors (score 0-6) are unhappy attendees who can damage your brand and impede growth through negative word-of-mouth. You can learn more about the NPS methodology from our website http:/ /www.satmetrix.com/net-promoter. Satmetrix operates 2 conferences and 14 to 16 3-day training courses each year. Our public event program is tasked with building brand loyalty, increasing retention, and referrals. And we walk the talk: we measure the Net Promoter Score of each event so we can identify the positive and negative aspects of each event, with an eye towards continual improvement. In short, we want to make each experience better than the one before! How do we do this? Every year for the past 8 years, we’ve hosted one conference in North America and one in Europe. At each conference we measure the satisfaction ratings of the following factors: • Speakers • Event site • Food and beverage • Technology • Logistics (that’s right, we measure what our attendees think of our event planning abilities)

We took care of these needs in our 2013 conference, and the scores shot way up. Were we successful at driving loyalty? With each conference since Europe 2012, we implemented one of the drivers outlined above. (Item 4 will be instituted in our 2014 North America conference, January 30-31, in Miami). Our NPS has risen steadily with these changes from 59 to 73. In addition, our attendance has seen a 14% yearover-year increase. The best part? Our returning attendees have risen from 27% to 39% of our audience. Conclusion: You can generate more ROI and success from your events by focusing on driving loyalty of your event audiences. Loyal audiences make it easier for you to reengage with them, which can lead to more leads, pipeline and revenue. You can create your framework using the four major factors described above. And, using a measurement methodology such as what Satmetrix uses, you can orchestrate successful events by paying attention to what matters most for your specific audiences. L

Vinay Iyer is the CEO & Founder of Goombal, Inc., an innovative new Cloud + Mobile solution for event project management. Prior to founding Goombal, Vinay was a VP of Global Marketing at SAP where he coauthored the book “The Customer Experience Edge” published by McGraw Hill. Vinay is a passionate customer experience leader, and is aspiring to bring greater value to event marketing. Bill Karpowicz is the Director of Field Marketing at Satmetrix, the leading provider of SaaS customer experience software and co-developer of the Net Promoter Methodology. He has 15+ years of experience in developing and implementing highly successful and innovative face-to-face demand generation campaigns, with anywhere from 15 to 25,000 attendees.

Loyalty Management™ • FIRST QUARTER 2014



It’s Okay to Cheat
CPG Marketer’s
Robyn Hannah
Reach consumers via mobile apps and SMS with targeted messages based on their location.

CPG Marketers…

• Attracting shoppers to your retail location. • Tracking customer time in-store. • Delivering timely offers. • Increasing sales by rewarding consumers for purchasing qualified products or for buying during promotional periods. • Identifying upsell and cross-sell opportunities. • Understanding trends by retailer, customer segment and product line to inform shopper marketing programs. • Delivering the flexibility to change content, experiences, offers and call to actions without requiring design changes. • Delivering relevant content, video or other multi-media to their mobile devices. • Providing access to special offers. • Crowd-sourced campaigns. • Curating engagement and conversations.

Just as quickly as technology evolves, so too does the opportunity for marketers to leverage this technology more effectively when trying to reach a target audience.
Today’s smart-phone-carrying, “what’s the wi-fi password”, tablet-happy, always-on consumer can make a purchase decision on many channels, online or off, anytime, and anywhere they’ve got “a bar”. Historically, CPG brands, hoping to drive in-store engagement, purchases, and overall brand loyalty, have poured millions of marketing dollars into campaigns aimed at engaging busy consumers in the retail environment over which they have little control. So with all this new technology available, there’s got to be a better bang for our marketing buck, right? When every allocation counts, investing your marketing dollars in the right place is essential for success. But the breakneck speed of emerging channels and technology can be a little overwhelming for marketers with a never-ending to-do list. We’ve done some digging and put a little cheat sheet to explain and explore six technology advances that CPG marketers can use to reach consumers in the retail environment while building meaningful engagement that impacts bottom line business goals.


Reward consumers for submitting photos or scans of their receipts.

Receipt Scanning

Dynamic QR Codes

Think of QR codes as “real world links” - printed symbols that, when scanned with a specialized mobile app, direct customers to targeted content on the mobile web.


Link brand-related conversations across all social media channels.

StarStar (**)

Replace random numeric SMS codes with memorable branded SMS codes.

• Driving customers to engage with any content offer or call to action via an easy to remember SMS code.

The complete whitepaper can be found at:

Customized Short Links

Make it easy for consumers to quickly and easily access your campaign, content, etc. online. They are easy to remember, great for sharing on social channels where characters are limited, and easy to type in from a mobile device.

Just about everything!


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Engagement Cheat Sheet
Moderate to High

With all this new technology available, there’s got to be a better bang for our marketing buck, right?

• Offers can be extremely targeted, immediately actionable and can utilize offer codes to tie back to purchases.

• May take time to drive the volume of SMS opt-ins or mobile app downloads to make this worthwhile. • Lack of standardized mobile coupons across retailers requires retail buy-in to deliver offers in real-time. • Still new concept for many consumers.

L’Oreal teamed up with Placecast to run a geo-fenced campaign that sent an SMS coupon to customers who traveled within the geographic range of the drugstore chain, Superdrug. Arby’s launched a campaign to promote their new sandwich, The Smokehouse Brisket. Their campaign, “League of Brisket”, enabled participants to earn points for purchasing the sandwich by uploading their Arby’s receipt without the cost & complexity of POS integration.




• No apps or special software required; simply take a photo of the receipt and send to an email address.



• Can encode much more information than a traditional UPC code. • Can be printed on packaging, signage, etc. and still allow campaign assets to be updated over time.

• Requires consumers to install a QR reader app (neither iPhone or Android OS include these automatically). • Only appropriate for situations where the customer has online access.

P&G and Walmart placed QR codes on bus stops and trucks to encourage on-the-go consumers to scan and instantly buy products from brands such as Tide, Pampers, and Gillette.



• No special technology requirements. Low barrier to participation. Increasing acceptance across all forms of media.

• No ability for the brand to control hashtag usage (or misuse). • Poor hashtag choices can send your campaign viral - in a bad way.

Ben & Jerry’s drove awareness of the Fair Trade movement by creating a tool that allowed consumers to donate leftover characters in their tweets which were replaced with a message and the hashtag #FairTweets. Suzuki created a custom StarStar number,**SUZUKI, that delivered an exclusive, sneak preview of its 2011 GSX-R 600 sports bike to consumers’ mobile devices.

Low to Moderate


• Reinforces branding. • Utilizes a behavior consumers are already comfortable with (texting, phone calls). • Interactions include useful metadata to personalize and target future campaigns. • Does not require any new/special technical skills for your digital team (standard web practices). • Can deliver dynamic content based on the profile of the visitor. • Easy to perform multivariate testing and optimize program elements over time.

• Not yet mainstream consumer behavior. • New data requires additional analytics to generate actionable insights.



• Requires a web browser and an internet connection.

Kraft Foods “New-stalgic” campaign used a campaign-specific short link http:/ /bit.ly/New-stalgic to drive people to their New-stalgic microsite that featured a timeline of Kraft’s impressive history.

Loyalty Management™ • FIRST QUARTER 2014



CRM Platform Selection in CPG

CRM Platform: Why Buy a Hummer When a Minivan Will Do?
David Ury
Contributing Writer | Loyalty360
PLAYING FOLLOW THE LEADER IN CPG If you were doing some homework on how to fine-tune your CRM strategy, the Consumer Packaged Goods industry is probably a good place to start. CPG marketing managers have long been fans of customer insight, and their brands live and die based on customer loyalty. In many ways the CPG industry has historically been a leader in capturing deep insights on customers, developing segmentation and using that insight to maximize customer awareness, loyalty and advocacy. The diapers category led the charge early on, signing new mothers up for direct mail programs that provided baby care tips and tricks as well as coupons to keep consumers loyal to the brand. In the ‘90s, CRM and Customer Loyalty evolved from being niche programs for a relatively small set of industries, and grew into very popular business growth strategies. Powered by dramatic improvements in technology and professional literature supporting the business case, CRM platforms emerged with the promise of 1:1 marketing that would revolutionize customer relationships. And as this evolution began to take place most CPG brands became followers, adopting a technology strategy based on customized platform design and maximum horsepower. Many choose this approach for several reasons, including guidance from syndicated research, popular studies at business schools, and because this was the path of many pioneers of CRM and Loyalty, such as airlines with their frequent flyer programs. While launching CRM was a major investment of time and money, it was often the easiest choice for managers and executives given that it followed the path of conventional wisdom. Loyalty programs spread from airlines to hotels to grocery retailers; even before Google and Amazon were proven successes, oracles were proclaiming “Data is King.” Recommended technology support often included a custom relational database, a campaign management tool/software, Email Service Provider and an analytics tool. A complete “suite” of tools designed to support the needs of large CPG brands. BUYER’S REMORSE CPGs face many challenges in measuring performance, not the least of which is that nearly all transactions are made anonymously. Given this inescapable truth, CRM program measurement can be tricky, and often seem downright impossible. This is an important point because as CPG brands started to invest heavily into CRM programs, their leadership teams started to ask hard questions about program impact and ROI. Marketing managers who “cut and paste” the technology solutions and hoped to replicate the success realized two big problems with their new CRM toys: 1. Scale: Only being able to affect a relatively small share of their customer base with CRM (consumers who had provided some kind of unique identifier and opt-in for communication) 2. High Fixed Cost and No Quick Proof: Being straddled by complex system deployment that often exceeded a manager’s budget and a multi-year “runway” for a proof-of-concept CPG brand’s budgets are large in a conventional sense, but they are not unlimited, and in the results-driven world of consumer retail, unproductive dollars will quickly get shifted to strategies and channels with more predictable and proven outcomes. Without proof of CRM effectiveness, these “non-working” dollars were at risk each budget setting season. TAKING A RISK/ENTER THE CRM HERO By the mid 2000s, CPG brands began to get gun-shy and started minimizing, if not killing budgets for CRM programs. Large fixed costs and massive consumption of mind-share and man-hours were making it very hard to continue CRM programs that followed the big money & massive scale blueprint. And from the ashes of stalled or killed programs, some of the more adventurous marketing managers began to rethink how CPG Brands should approach CRM. While it wasn’t hard to get executives to believe in the concept of using customer insight to build relationships, there had become strong resistance to budgeting the time, resources and tools necessary to support it. With that in mind, these


Loyalty Management™ • LOYALTY360.ORG

brave managers recommended that rather than reinventing the wheel with a large customized solution, why not utilize all the best practices built into out-of-the box CRM solutions? And to take it a step further, explore using marketing automation tools designed for B2B! The rationale for testing the off-the-shelf solutions was based on an assessment of the customer purchase funnel. Historically this kind of

data was very limited for CPGs, but as consumers’ web interactions with brands expanded, a tremendous source of measureable, unique customer behavior became untapped. When CPGs started to think about their customer relationships in the format of the classic B2B funnel, the similarities were remarkably similar:

Consumer engagement with CPGs on the web is often based on the desire to learn more or receive promotions. The consumer profile is started by inputs into registration fields and fleshed out based on subsequent activity on the website. An assessment of a consumer’s profile quality, potential, and needs is applied. E.g. download a coupon = purchase intent, write a review = advocacy, download multiple recipes = loyalty. Consumer record is shared with a partner or retailer program to drive visits into a store.

Funnel Step Top

The relationship with a product or service starts with web registration/ creation of a lead based on a prospect’s desire to learn more. The prospect profile is started by inputs into registration fields and fleshed out based on subsequent activity on the website.

Profile Creation


Lead receives a score based on quality and potential.

Treatment Strategy

Treatment strategy begins with the lead being passed to a salesperson for follow-up.

TRANSLATING INSIGHT INTO ACTION In a performance driven organization, off-the-shelf CRM tools offer the advantage of speed to market and ease of supporting test and learn initiatives. The CPGs have found that it’s much more productive to segment at a high level and gather directional learnings quickly vs. deep data mining and struggling to execute on targeting based on sophisticated models. By being able to put campaigns into market, the CPG marketing managers have been able to show value quickly and in ways that are easier for their leadership to evaluate. While ROI and 1:1 Marketing are sold in as the ultimate goal, intermediate steps offer great value to the organization on how to target, segment and communicate with the most loyal consumers. Many of the leading Marketing Automation tools can identify a consumer when they visit the site and serve content that will convert the consumer to an action (e.g. download a recipe) that represents placement on the path to purchase. By targeting consumers who fit a specific profile (e.g. visit site from a specific source, view related content, etc) CPG brands can reduce the time to conversion and increase the conversion rate for an activity that serves as a proxy for loyalty or advocacy (e.g. write a recipe review). Stringing together a series of these insights creates a proprietary “Engagement Model” and a process for CPG marketers to activate their digital investment.

The CPG managers have also learned to live within their constraints. While CRM campaigns among web registrants have shown meaningful results, the impact is small relative to the scale of brick and mortar retail sales. But what the CRM campaigns may lack in terms of scale, they make up for in terms of delivering actionable marketing intelligence. CRM is an early indicator of brand health: how the brand target is changing, messages/content that is/is not resonating with the target, and the interest of consumers to advocate for the brand. This group can also be leveraged for quick and actionable brand surveys/feedback, and are an excellent data source for media planning. L

Special thanks to Tom Johnson for sharing his expertise and collaborating on this article. Tom is an independent consultant in CPG and data marketing. You can reach Tom at tjohnson105@yahoo.com or find him on LinkedIn http://www.linkedin. com/pub/tom-johnson/3/396/314/

Loyalty Management™ • FIRST QUARTER 2014



More Profitable Behaviors from Your Customers
Jeff Knechtel
Exchange Solutions

Three Practical Steps to Tapping Into Big Data (and Little) to Drive


n the beginning, loyalty programs were pretty simple – a customer buys something, that customer earns points; that customer burns those points to get something. But this simple “earn and burn” type loyalty program rewards everyone equally for their business. Sure, there may be “tiers” that allow for a higher discount, or better rewards, but overall, every customer was treated the same, regardless of their potential value to the company. A great example of this is the My Starbucks Rewards program – where loyal customers, who are likely to come back tomorrow to Starbucks and buy a coffee regardless of the program, are rewarded on the same basis as people who aren’t likely to go back without an offer.
THREE STEPS TO LEVERAGING THE VALUE OF BIG DATA (AND LITTLE) To help bridge those customer behavior gaps, companies can use data capture and aggregation tools – in effect, listening posts – which can be easily implemented into existing technology to “listen in” on customer behavior. However, as with any technology, due diligence is required to ensure that the solution you choose accurately meets your needs. So here are three key criteria to keep in mind when evaluating technology or approaches to data capture. The solutions should: 1. Capture data across multiple channels, encompassing a wide spectrum of customer interaction 2. Have the right level of granularity for program measurement, 3. Be easy to integrate into existing systems in order to enable you to start tracking data quickly

THE DAWN OF A NEW AGE OF CUSTOMER ENGAGEMENT PROGRAMS The new generation of customer engagement programs allow companies to treat customers on a one-to-one basis, thus driving truly incremental behavior that can lead to a positive ROI on their loyalty investment. These intelligent programs depend heavily on customer behavior measurement in order to determine how each customer is currently engaging (or not engaging) with their loyalty program. This data helps marketers determine the value of customer behaviors at their full potential and map out, on a one-to-one basis, the customer behavior gaps that can be filled to achieve that full potential. The good news for marketers of larger organizations is this customer behavior data is probably already being recorded. The bad news is that it is likely stored across several system silos, difficult to access, and stored at a granularity too fine, or too large, to be of immediate use.
SPONSOR | 2014

JOIN EXCHANGE SOLUTIONS AT LOYALTY EXPO 2014 We encourage you to join Exchange Solutions for their workshop session: “Dissecting an Effective Customer Engagement Program” with Jane Ricciardelli, CMO and Brenda Higuchi, SVP, Analytics and Optimization


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Capturing data across the spectrum of customer interaction leads to two questions:


1. Which channels do your customers use to interact with the company? 2. Which channels will you prioritize in order to get access to the most data available, or at the very least, the minimum viable data to pilot a program? For example, an Internet-based businesses may select the following channels for their data-capture: a customer facing web property may be the primary target, a mobile app may be secondary, followed by a contact center, existing CRM systems and others. You will need a solution that is channel-agnostic and will eventually capture data across all these channels, but one which can start with a subset rapidly. Ideally, you’ll want to collect this data in real time through a web service layer, to which your various channels can be integrated one at a time.


Once you’ve identified the right channels to target for the data collection, you need to think carefully about collecting the right type of data. Listening to and collecting data from the right channels, but at the wrong level of granularity can lead to unnecessary complexity. For example, it can be very tempting to “capture every click” of a website through web logs, or a remote listening technology. However, what you really need is to identify and capture all of the customer behaviors that create and/or decrement value. An arbitrary click is a valueless behavior. Some examples of metrics or behaviors you want to capture may include purchases, logins, submission of customer content, or complaints. You should not discount the value of social data, which in some cases may be unstructured. Externally shared reviews of your product or service can prove to be very valuable! You need to understand and measure the customer behaviors that drive value to your business (or draw value from it). Leave the clicks to the UX designers.



Lastly, but perhaps most importantly, you’ll need to consider speed to market. The faster you can demonstrate ROI from your loyalty program investment, the better. The true power of one-to-one customer engagement is that you can prove that you can affect the incremental behaviors that drive value to your company. Such lightweight technologies like JavaScript remote procedure calls can be just the ticket to get going quickly. They can help you start small, prove your ROI, and grow. Introducing a one-to-one customer engagement program into your enterprise can represent a significant inflection point in the success of your business. To do this successfully you’ll need to collect data from across your enterprise at the right level of abstraction, and you’ll need to do it fast. There are technology tools and frameworks that can help you get a leg up in your endeavor. Whatever way forward you choose, just make sure your solution will meet your needs. L


Jeff Knechtel is a senior director of product management at Exchange Solutions. He is passionate about technology and the unique opportunities in commerce and human experience it can enable. He holds an honors BA from the University of Guelph with specializations in Computer Information Science and Drama, an EMBA from the University of Fredericton, and is an IEEE Computer Society Certified Software Development Professional.


Empathetic Marketing: How to Satisfy the 6 Core Emotional Needs of Your Customers
Mark Ingwer
Palgrave Macmillan | May 2012

As the founding partner at Insight Consulting Group, a global marketing and strategy consultancy, Mark Ingwer has conducted and analyzed countless in-depth studies of customers, from neurological data to in-field observational studies. Through his extensive experience he has identified six basic emotional needs that every company must consider to fully impact and motivate the customer. Empathetic Marketing provides readers with a deeper understanding of customers’ core emotional needs, and a framework for incorporating these concepts into their business to optimize customer engagement and achieve a significant return on this investment.

In today’s competitive and global marketplace, it is becoming increasingly essential for companies and brands to understand why customers buy - or don’t buy - their products and services. Only by understanding the “whys” can companies grow their business and develop loyal customers. In Empathetic Marketing, Dr. Mark Ingwer presents a groundbreaking approach to understanding consumers’ core emotional needs. This innovative book provides both the psychological theory underlying consumers’ emotional needs, as well as concrete business examples that demonstrate the incredible effectiveness of unleashing the power of deeper needs and emotions for success in the marketplace. Empathetic Marketing shows how brands like NPR, Universal Studios, Nivea, and Google perform in-depth analyses of their customers’ emotional reactions and harness the power of deep psychological insights to optimize their marketing and brand strategy.

The strategies provided will not only lead to a better immediate connection between the customer and the company, but also to deeper and longer-term satisfaction for both customers and business leaders.

Less is Beautiful
Cyriel Kortleven
Self published | January 2013

‘Less is Beautiful’ is about being more effective with less. Get inspired by stories from various organisations that have implemented the ‘Less is Beautiful’ philosophy. Less is Beautiful is based upon 4 pillars: Why more is too much, Start to stop, Simplify and Letting go This book is written for professionals who operate in business and/or governments and who are looking for ways to gain more results with less effort. You will find a broad spectrum of tools &

examples ranging from famous companies such as Google and Apple, which are known for their simple principles, to an unusual social media campaign from Harry Potter’s theme park; or going from the NYC 311 call center to patient-centered hospitals; or tools like the Aunt Bertha test to totally new concepts like nearling or wonder walk. Short stories, great practical insights and tips make this book unique. Enjoy the inspiration!

Inside the Box: A Proven System of Creativity for Breakthrough Results
Drew Boyd
Simon & Schuster | June 2013

Want a truly creative organization? Then think Inside the Box. The traditional view says that creativity is unstructured and doesn’t follow rules or patterns. That you need to think “outside the box” to be truly original and innovative. That you should start with a problem and then “brainstorm” ideas without restraint until you find a solution. Inside the Box shows that more innovation - and better and quicker innovation - happens when you work inside your familiar world (yes, inside the box) using a set of templates that channel the creative process in a way that makes us more - not less - creative. These techniques were derived from research that discovered a surprising set of common patterns shared

by all inventive solutions. They form the basis for Systematic Inventive Thinking, or SIT, now used by hundreds of corporations throughout the world, including industry leaders such as Johnson & Johnson, GE, Procter & Gamble, SAP, and Philips. Many other books discuss how to make creativity a part of corporate culture, but none of them uses the innovative and unconventional SIT approach described in this book. With “inside the box” thinking, companies and organizations of any size can creatively solve problems before they develop - and innovate on an ongoing, systematic basis. This system really works!


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Delivering Effective Social Customer Service: How to Redefine the Way You Manage Customer Experience and Your Corporate Reputation
Martin Hill-Wilson & Carolyn Blunt
Wiley | December 2013

Social Customer Service is new. Social Media is the biggest thing happening to the customer service industry since the mid 1960s when modern day call centres were born. It is taking customers and organisations into untested ways of relating: transparently, collaboratively, instantly. The consequences of great and poor service are forever changed. Customer appetite has promoted this form of interaction to the very front of a race to understand. How do digital brands and empowered customers actually behave? Social Customer Service has become Marketing’s R&D lab and a listening hub for the rest of the organisation. It is now where corporate reputations are most likely to be won and lost. ‘Delivering Effective Social Customer Service’ is a complete reference for achieving excellence in this new discipline. It caters to both novice and expert. It is perfect source material for service leaders and digital

marketers to read together. Every CXO will recognise in the book a blueprint from which to build their next generation organisation. Even ambitious team leaders should snag a copy for instant subject matter expertise kudos! The centre of the book offers an in depth self-assessment of the competencies that matter. The book is jammed full of strategic insight, action lists, best practice tips and interviews. All the resources anyone needs to build a solid strategy and roadmap. Early adopter workshops based on the book have already taken place and will continue to be offered as another way of engaging with the book’s key lessons. An online resource of the reference material is also provided. Options for an online community are under consideration. This book is the first of its kind. A distillation of what has so far been collectively discovered. Then filtered and expanded through the collective experience of two leading authorities on customer service: Carolyn Blunt and Martin Hill-Wilson.

Tilt: Shifting Your Strategy from Products to Customers
Niraj Dawar
Harvard Business Review Press | November 2013

Shift your strategy downstream. Why do your customers buy from you rather than from your competitors? If you think the answer is your superior products, think again. Products are important, of course. For decades, businesses sought competitive advantage almost exclusively in activities related to new product creation. They won by building bigger factories, by finding cheaper raw materials or labor, or by coming up with more efficient ways to move and store inventory—and by inventing exciting new products that competitors could not replicate. But these sources of competitive advantage are being irreversibly leveled by globalization and technology. Today, competitors can rapidly decipher and deploy the recipe for your product’s secret sauce and use it against you. “Upstream,” product-related advantages are rapidly eroding. This does not mean that competitive advantage is a thing of the past. Rather, its center has shifted. As marketing professor Niraj Dawar

compellingly argues, advantage is now found “downstream,” where companies interact with customers in the marketplace. Tilt will help you grasp the global nature of this downstream shift and its profound implications for your strategy and your organization. With vivid examples from around the world, ranging across industries and sectors, Dawar shows how companies are reorienting their strategies around customer interactions to create and capture unique value. And he demonstrates how, unlike product-related advantage, this value is cumulative, continuously building over time. In an increasingly customer-centered world marketplace, let Tilt serve as your guide to shifting your strategy downstream - and achieving enduring competitive advantage.

Big Data Marketing: Engage Your Customers More Effectively and Drive Value
Lisa Arthur
Wiley | October 2013

Leverage big data insights to improve customer experiences and insure business success Many of today’s businesses find themselves caught in a snarl of internal data, paralyzed by internal silos, and executing antiquated marketing approaches. As a result, consumers are losing patience, shareholders are clamoring for growth and differentiation,

and marketers are left struggling to untangle the massive mess Big Data Marketing provides a strategic road map for executives who want to clear the chaos and start driving competitive advantage and top line growth. Using real-world examples, non-technical language, additional downloadable resources, and a healthy dose of humor, Big Data Marketing will help you discover the remedy offered by data-driven marketing.

Loyalty Management™ • FIRST QUARTER 2014



The 10 Essentials of a

High-impact CRM Strategy
Tim Berry
Declaring yourself a customer-centric company does not make it so. It requires a host of competencies, working in concert across the enterprise, to really take your business from product-centric or channeldriven to truly customer-focused. Over the last 20 years, I have watched many different concepts and approaches emerge, from database marketing to one-to-one marketing to Big Data to CRM. These are all built on the same foundation – using data, analytics and technology to drive a better business result. But in many ways, until now, the idea of developing individual relationships with consumers has been more of a fantasy than reality. At Merkle, we use the term Connected CRM™, to represent the next marketing evolution, which finally brings true customer centricity to life. To succeed, you need a systematic method of identifying, serving, and retaining customers based upon their value, through orchestrated customer interactions that improve financial results, create competitive advantage, and drive shareholder value. It involves a technology-led, data-driven approach to connecting brands to their consumers across media and channel touchpoints. It embraces the significance of the digital landscape and how it is changing the ways that companies engage with their customers. I’ve seen companies across industries progress down the path of customer centricity with hundreds of different approaches, and I have observed more failures than successes. In my experience, all successful CRM endeavors include the following ten essential factors: SPONSORSHIP , NOT PERMISSION Sponsorship means that the effort is being championed at the c-level, and they have skin in the game. The executive team needs to be excited about the initiative, believe in the approach, and drive it through the entire organization. Permission without sponsorship will only take the program so far, ultimately stopping short of the value that the approach can create. ORGANIZATIONAL READINESS Organizations waste billions of dollars by building CRM tools and capabilities, yet they don’t have the ability to use them. CRM transformation requires BOTH building new CRM capabilities and teaching your organization to use these capabilities. The concept of “if you build it, they will come” does not work here. You must also prepare the organization to adopt and use these new set of competencies. A HANDLE ON BIG DATA Don’t get overwhelmed by “Big Data”. While the concept of Big Data is imperative, it’s easy to get lost, trying to do too much with the overabundance of data being created. Understand how Big Data can help you and create a realistic roadmap on how you will achieve its full value across the organization. Take a systematic, phased approach to make sure you don’t find yourself trying to “boil the ocean.” Make incremental gains. Companies that can figure out how to harness the value of all their data will create killer competitive advantage.

Customer Relationship Marketing (CRM) needs to be at the core of your company’s customer strategy. Companies that don’t embrace CRM, or fall behind, will risk serious impacts to financial and growth metrics.


Loyalty Management™ • LOYALTY360.ORG

ANALYTICALLY DRIVEN ATTRIBUTION Attribution refers to the medium or channel to which sales are credited. Attribution is incredibly important for determining the productivity and ROI of your media spend, particularly within the emergence of digital. Many companies use basic attribution methods like last click or last response. But assigning full credit to one medium is inaccurate and will lead to bad decisions and suboptimal results. If your customer sees your display ad, watches a TV commercial, sees a print ad and then calls the 800# on a direct mail piece to buy, they all had an impact on the purchase decision and you need a way to determine what role each of these media played in the purchase decision. DATA-DRIVEN CUSTOMER DECISIONS While you don’t want to be overwhelmed by big data, you can’t ignore it either. Make sure you are capturing and using data to drive decisions. Too many companies use intuition or incomplete data to make decisions around customer interactions. You have to continually ask “what does the data say?” This requires employing advanceddegreed statisticians (as opposed to “analysts”) to be churning and burning through your data. CREATE CUSTOMER LANGUAGES Customer languages are ways your organization can communicate about your customers. Most companies have languages around their products (e.g., how many credit cards did you sell today? What were the daily sales of men’s shoes? What is the profitability of each hotel?). In contrast, customer languages are ways your organization and employees talk about your customers. Typical customer languages are segments (e.g., how many men’s shoes did we sell to Baby Boomers?), customer value (e.g., how many of my high-valued customers bought my new credit card?) and engagement (e.g., how many of my “promoters” stayed at a hotel property this month?). ACTIONABLE SEGMENTATION SCHEME Most segmentation schemes fail. Companies spend millions of dollars creating, defining and trying to implement customer segmentation schemes, only to have them die on the vine, unable to make the segments actionable. Companies focus too much time and money on creating the segments and not enough time and money making them actionable. The key is to create segments that you can accurately map back to your prospect and customer databases. If you create a segmentation scheme that includes “Metropolitan Singles” you need to be able to identify them on your database. Spend less time (and money) defining the segments and more on deciding how you are going to execute against them. THE RIGHT METRICS One of my favorite sayings is “The main thing is to keep the main thing the main thing.” Don’t lose sight of the core metrics that you use to run your business, which are sales, costs and profit. A lot of new metrics are surfacing around customer centricity. They are important to explore, but you must be able to tie them back to sales, costs and profit. An example is customer engagement, which, in theory, drives happier and more captivated customers. It’s great to measure engagement, but just be sure that you can understand how engagement influences those key metrics.

DON’T LOSE SIGHT OF THE CORE METRICS THAT YOU USE TO RUN YOUR BUSINESS, WHICH ARE SALES, COSTS AND PROFIT . THE SHOW MUST GO ON While you’re busy implementing change, don’t forget to run your business. Find the right mix of the new approach and the existing business plan that can support it with a steady, ongoing revenue base. If you try to make sweeping changes that turn the business on its head all at once, you’re setting yourself up for failure. I’ve seen companies try that approach with bad financial results and human collateral damage. IT’S A JOURNEY , NOT A PROJECT It takes time to build up your organizational skills, mentality and capabilities to fully capitalize on the value of a customer-centric approach. This doesn’t mean go slowly – you’d be outpaced by your competitors. Drive a sense of urgency through your organization, but take a strategic, thoughtful approach. Connected CRM winners are those who create a roadmap that implements capabilities and programs that are digestible to the organization while also driving results. There are many ingredients to building a successful Connected CRM strategy and approach. Obviously not all situations apply to all organizations. Implementation depends on many factors. For instance, is the business direct-to-consumer? Are customers typically identified or anonymous? Online, brick and mortar, or a combination? Think about your own situation and partner with an expert to assess your readiness and develop a course of action. But get on board. L

Tim Berry, President, CRM Capabilities, Merkle. Alongside Patrick Hennessey, Tim jointly leads and manages Merkle’s business. He brings more than 20 years of experience in database marketing and customer relationship management.

Loyalty Management™ • FIRST QUARTER 2014



Summary of the New Golden Guidelines for Actionable Social Engagement
Jeff Nicholson

Businesses have long dreamed of a means to one’s macro-level social strategy, the missing make their social strategy truly actionable. gap has always been the individual. Businesses must convert what we can learn The next wave of actionability will require via the “social-sphere” into an immediate much more than aggregate audience-level insight. While aggregate audience listening and intimate action – at the individual level. has been hugely valuable for determining

There are both risks and rewards. To this end the best practices for this kind of individualized social interaction may be best articulated via five simple golden guidelines:

Listen more than you speak. It has been said that the greatest social savants have “big ears and a small mouth.” An active listening process ensures that you know the context of the conversation, and can consider whether you should speak – before you consider what you might say in the first place.

Answer when you’re spoken to. Consumers are expecting your business to be hearing them when they utilize your social brand name, handle or hash tag. Furthermore, in these instances they are most often expecting an immediate reply. Your customers are talking… are you listening?

Have a photographic memory. You may have met this person before. Will you be able to remember? Your business is expected to remember the person individually, especially if he/she is your customer. This means remembering prior interactions and conversations – even if they weren’t on a social network.

If you make a mess, clean it up. Not all social mistakes can be avoided. However, brands need to equip themselves with the processes to diffuse emerging situations.

Don’t be the party guest that won’t leave. Face it. As wonderful as your business is, no customer wants your brand to be their new “BFF.” Businesses must ensure they satisfy the immediate need and then move on.


Loyalty Management™ • LOYALTY360.ORG

The time to act on

individualized social engagement is now.
UNDERSTANDING EXPECTATION OF LISTENING VS. APPROPRIATENESS OF ACTION To apply this logic, as brands, we must have the ability to proactively listen for key voices, comments and events across Big Data for moments of mutual benefit, consider it in context, and have the processes in place to take action (when appropriate). The general guidelines for aligning the expectation of listening and the appropriateness of action with the nature of each comment may be summarized in this matrix.

Not all comments or mentions will warrant a response by your brand. It is the context of each comment across the three categories of brand, competitive and general mentions that will dictate how expected or appropriate a response will be at the individual level. To this end, three general levels of individual actionability are:

Reply – An immediate response to the individual on

Expectation of Listening

the channel of origination. There will be some limitations to this depending upon the channel. For example, to direct-reply to a tweet the individual must first be following your brand on Twitter. There are processes that you can put in place to facilitate this. You may also choose to reply via another channel such as SMS or email, if the individual is a known customer.

Refer – Instead of replying with a marketing offer,

another option is to refer. Here, the opportunity is to assist or delight the individual by helping them with their query. For example, a service could reply to a tweet about finding “a good local repairman” with a link to a recent review of local area services, the best of which might include your own.

Appropriateness of Action
Brands often ask, “If a person tweets and I reply, would that be invading his/her privacy?” This can be a real concern with organizations getting their feet wet in individualized social media. This level of expectation will vary depending upon the content or context. In some cases, there is an outright expectation that you (A) will be listening, in others there is an expectation that you (B) may be listening, and in other cases the inverse is true and there is an unwritten rule (well, until now) that even though the comment is public, a brand (C) should not be listening.

Remember – In numerous cases, it may not be

appropriate to take any immediate “in the moment” actions. Beyond the “moment of truth” opportunities also consider that your business must establish a “memory of truth” where your business establishes a process to “remember” what is said, as long as it is relevant to your business, and as long as the data will help you better understand and serve the individual customer.

Jeff Nicholson, VP of Marketing at Provenir: A frequent presenter for industry thought leadership conferences and educational webcasts on topics including trends in consumer marketing, offer optimization, event-triggered marketing strategies, opt-out management and customer analytic best practices.
JOIN PROVENIR AT LOYALTY EXPO 2014 We encourage you to join Provenir for their showcase session: “The New Look of Loyalty: Digital, Social, Mobile, Real-time Delivers 5X Results” with Jeff Nicholson, Vice President, Marketing | Provenir

The time to act on individualized social engagement is now. As every day your organization is not proactively listening to the social-sphere and actively serving, engaging and satisfying the volumes of opportunities, money is being left on the table – and your competitors are picking it up. L



The Nielsen Global Survey of Loyalty, by The Nielsen Company, surveyed more than 29,000 consumers in 58 countries to understand loyalty sentiment in markets around the globe. The study showed that consumers are hungry for loyalty programs, but simply offering a program is not enough to cultivate loyal customers.


Percentage of Consumers Who Say They’re More Likely to Shop at a

Retailer with a Loyalty Program


Percentage of Customers Who Say the

Loyalty Program Benefit that Matters the Most

Percentage of Consumers Who Say

Where They Shop

Loyalty Programs are Available

Discounted/Free Products

Percentage of Customers Who Say They are Completely Loyal by Industry

Financial Institutions for Banking/Investing


Personal Electronic Brands



Loyalty Management™ • LOYALTY360.ORG


Session Preview | 2014





Do you ever wonder where your loyalty program stacks up against your competition and if it delivers the greatest financial impact? If so, you won’t want to miss this workshop! Join Kobie Marketing as we illustrate the best way to effectively analyze, optimize and/or reposition your program in market. Speaker David Andreadakis, Vice President of Loyalty Strategy Kobie Marketing

Speaker Stacey King Gordon, Stacey King Gordon of Suite Seven will Founder and President lead a workshop to explore what makes Suite Seven a thought leader, best practices for thought leadership, and how to develop a publishing and content strategy to help companies grow into true thought leaders - helping with everything from navigating internal politics to prioritizing resources.

Many companies today strive to be “thought leaders,” but only a select few truly live up to that aspiration. Thought leadership requires a unique point of view, the ability to provide valuable information, and a layered approach to disseminating that information. For the few companies who achieve it, thought leadership is proven to drive long-term and higher-value customer relationships and increase brand affinity and loyalty.


Loyalty Management™ • LOYALTY360.ORG


Bloomin’ Brands T-Mobile Johnson & Johnson Homemakers Luxottica Prevacid Frontline
Loyalty Expo 2014 Sponsors



What makes for an effective customer engagement program? Customer loyalty is important. But loyalty is only one of a long list of customer behaviors that can drive profitability and market value. In today’s competitive environment, the best way for a business or organization to increase profitability is to engage their customers in a dialogue leading to an exchange of value between the two parties. Are you effectively using data to listen to and understand your customers’ behaviors and preferences? Are you driving incremental business or incenting all customers equally? Value Exchange Optimization is a leading alternative to CRM, an approach that leverages the power of big data, and empowers your customers to engage with you how they choose, thereby increasing their level of brand loyalty and engagement. Ultimately, this approach has been proven to increase customer engagement, drive revenue, profitability and higher customer lifetime values. Join us at this highly interactive session for a case study approach to identifying which of your customer behaviors drive the most value, how to estimate the potential value of those behaviors and what is needed to design (or optimize) a truly effective customer engagement program.

Speaker Brenda Higuchi SVP, Analytics and Optimization Exchange Solutions

Speaker Jane Ricciardelli CMO Exchange Solutions

Loyalty Management™ • FIRST QUARTER 2014



Speaker Phil Rubin CEO rDialogue

As the leading animal pharmaceutical company, Merial faces brutal competition across all aspects of its business, especially with a brand like Frontline coming off patent and new brands entering the market.  With new parent company Sanofi challenging the Vaccines and Therapeutics marketing team to find an incremental 10% in revenue for 2013, Merial took a different approach than the market typically sees, which is typically price cutting and promotion.  Instead Merial sought to establish a new platform for customer engagement, and move from product-centric programs to customer-centric loyalty marketing. Using an integrated series of steps including analytics, research and technology, Merial and rDialogue partnered to re-establish Merial’s loyalty strategy so that it not only drives revenue, but also acts as a mechanism for share growth and brand evolution. This session will demonstrate the value of integrated loyalty marketing coupled with proprietary customer segmentation.  It will include sharing how rebuilding Merial’s Advance and Select loyalty programs with a new tier structure, benefits set and integrated CRM program has impacted the business and driving results.  Join Vangie Williams, head of Merial’s Vaccine and Therapeutics group, and Phil Rubin, CEO of rDialogue, for this comprehensive case study showcasing the key elements of our work and important lessons learned as Merial shifted its orientation around customers.

Speaker Vangie Williams Director, U.S. Pet Vaccines & Therapeutics Merial


Perception is reality in today’s socially-enabled, hyper-connected culture where consumers can and do say anything and everything online about their brand experiences. Those consumer-to-consumer interactions represent an unprecedented opportunity for tapping into “social intelligence,” a vast and largely under-utilized category of “big data” now available to marketers. But, critical to leveraging this social data is not only knowing what consumers are saying about brand loyalty, but also better understanding the reasons why and the emotions driving them. It requires moving from simple social media “monitoring” to a discipline of deep analysis of social data to uncover actionable insights. In this session Maritz will debut the findings of a landmark new “social intelligence” study of the U.S. loyalty landscape, providing intriguing and revealing loyalty insights from the world’s largest focus group – the American consumer. Speaker Barry Kirk VP of Loyalty Strategy Maritz Motivation Solutions Speaker Yazir Phelps Director of Client Services evolve24


Speaker Mike Blyth Executive Vice President and General Manager Aginity Speaker Rick Greth Homemakers Speaker Gianluca Pogliani Senior Director of Consumer Insights and Analytics Luxottica

Shopping online, in store or through mobile environment can be incredibly difficult for a customer to navigate. Screaming children, text messages, pop up ads and a million other distractions can make it almost impossible for a customer to get what they came for. Retailers have adopted a variety of “personal” approaches to dealing with this problem. Instead of increasing volume or frequency of communications they decided to see if they could deliver exactly what the customer was looking for in the palm of their hand. By determining what the customer wants before they set foot on any digital or physical property it makes it much easier to make sure that they can find and buy it. By melding the in store, digital and mobile experience, shopping is easier, sales more profitable and the customer more loyal.


Loyalty360 Awards

The nominations are in and judging has commenced for the inaugural Loyalty360 Awards! Winners will be announced at a celebration luncheon on March 17 during Loyalty Expo 2014. To hear firsthand from the winners who are approaching customer loyalty in innovative ways, join us at Loyalty Expo in Orlando, Florida.

register now!



Loyalty Management™ • LOYALTY360.ORG

Session Preview | 2014

Speaker Anthony Aguiar, Loyalty Strategist IC Group

Speaker JoAnn McCormack, Sr. Digital & Activation Manager Novartis Consumer Health

Want to do more for your brand than just give away free stuff? Learn how to evolve a rewards program in to an “engagement” program that develops brand advocates. The Prevacid(R)24HR Perks Program has evolved through the years, starting off with heavy recruitment tactics, developing into an engagement program that offers support, sharing, fun and of course rewards that excite consumers. Learn best practices for maturing loyalty programs to recruit, engage and monetize. Also learn how your base program can be extended to social media, and to be leveraged by your Shopper Marketing Team - making all your marketing efforts perform better.


Loyalty is a deeply entrenched marketing tool for financial institutions, retailers, airlines and hotels. However, until recently loyalty really wasn’t on the radar for marketers in key industries such as: consumer packaged goods (CPG), luxury goods, sports and entertainment. This is changing rapidly, driven in part by new technologies, the increased access to - and importance of data, and the strong appeal of loyalty to highly affluent consumers. A New Frontier in Loyalty will discuss why new industries are now embracing loyalty as a competitive differentiator, and leveraging this critical tool to grow their business by building deeper relationships and creating advocates out of their consumers. The session will also feature new learning on the critical importance of your loyalty program appealing to all four of the human drives – the drive to acquire, bond, defend and create - in order to connect more emotionally with consumers, and not be held ransom by being overly dependent on points. As the holiday season has proven, mobile is deeply entrenched with consumers yet many loyalty marketers have been slow to embrace and leverage mobile. In our session, we will share new learning on the importance of mobile, and provide tips on how loyalty marketers can leverage mobile to their program’s advantage.

The session will also bring to life the opportunity that loyalty represents for non-traditional marketers by highlighting a case study of the launch of Johnson & Johnson’s innovative new loyalty program. The new program leverages many of the emerging trends in loyalty to differentiate their products and build strong advocacy with their consumers. Five of the trends that will be discussed include: 1. Loyalty beyond points. 2. The importance of building a loyalty program that embodies and promotes the core attributes of your brand. 3. Leveraging loyalty to connect with consumers both emotionally and rationally. 4. The important role that personalization and CSR play in building advocacy. 5. How your program can benefit from embracing mobile. The case study will also detail how the program creates a direct connection between the CPG and consumer, while enabling the CPG through access to powerful learning about their consumers.

Speaker Scott Robinson Senior Director, Loyalty Consulting & Solutions Maritz Loyalty Marketing Speaker Ian Armour Group Brand Director Analgesics & Healthy Essentials Johnson + Johnson


Research proves that customers who have a better experience come back for more and that satisfied customers can become your best marketing tool. But how do you lead your workforce to create those compelling experiences? How does the focus on experience impact the way you market your product or service? And what if the majority of your workforce is made up of volunteers? Over the past 10 years, the Saskatchewan Roughriders have transformed themselves from a struggling Canadian Football league franchise into an iconic brand in Canadian professional sports. As the most successful CFL franchise, the Riders now sell more branded merchandise than all other CFL teams combined and more than 4 of Canada’s 6 National Hockey League franchises. Despite being the smallest professional sports market in Canada, the Riders lead the CFL in game day attendance and national TV ratings.

Speaker Gregg Sauter VP of Business Development and Marketing Saskatchewan Roughriders Football Club Speaker Ruby Newell-Legner Fan Experience Expert 7 Star Service

Loyalty Management™ • FIRST QUARTER 2014





Establishing brand loyalty can help companies stay relevant amid competition, increase positive word of mouth and maintain or increase sales during rough economic times. However, brands are often faced with finding new and innovative ways to build loyalty. Brands hoping to increase loyalty can look to stock ownership as a valuable way to create a deeper, more meaningful connection with people. By letting people purchase stock fee-free online with as little as $10, LOYAL3 provides the ultimate loyalty and engagement platform. Since LOYAL3 removes the common barriers to stock ownership including excessive fees, complexity and high minimums, it’s now easy and affordable for people to own the brands they love. Companies can also use LOYAL3 to offer stock as a reward for loyalty, providing the world’s first brand-positive stock promotion. Speaker Barry Schneider Chairman, President & CEO LOYAL3


Developing your loyalty marketing strategy and implementing it with state of the art technology is a formula for success! Epsilon’s Agility Loyalty solution enables marketers to think outside of the box and develop programs that sustain customers for life. Why? Because the solution puts the needs of the consumer first and then markets to them based on their needs to ensure a ‘lifelong marriage’ with your brand. Agility Loyalty’s speed, scale, integration and omnichannel capabilities transforms transactional based marketing to relational. And, data is helping to lead the transformation. Epsilon’s data accelerates the knowledge of marketers’ members from point of enrollment with rapid append of key data elements. Join Epsilon’s John Bartold and Joe Disharoon to learn how brands have achieved award winning results and are taking their loyalty marketing programs to the next level.

Speaker John Bartold Sr. Vice President Loyalty Solutions, Epsilon

Speaker Joe Disharoon Sr. Vice President, Product Management Loyalty, Epsilon


The constantly connected, social-savvy, mobile-minded, customer of today demands immediate gratification leaving significant issues and much to be desired by today’s typical loyalty programs. However, it is now possible to reach and reward today’s social consumer by moving from traditional card-based loyalty programs, to ones which are digital, mobile, social and delivered real-time. Hear how one hospitality chain was able to make this move in less than 3 months, connecting numerous touch points including Twitter, mobile app, mobile push notifications, ePOS, email and web in real-time to achieve incredible benefits including: 5X loyalty program registrations Immediate program payback - in just 2 weeks Speaker Jeff Nicholson Vice President, Marketing Provenir Dramatically increasing revenue through location-based, real-time marketing


Loyalty Management™ • LOYALTY360.ORG

Session Preview | 2014

This session offers a glimpse into GfK’s latest explorations in global loyalty management and articulates a fresh perspective on customer loyalty. The initiative acknowledges a more holistic perspective: customer relationships are dynamic. The paradigm shift embraced by this research recognizes that customers have a past, present, and future. Typically, new customers represent attrition for a competitor (or first-time entry into a new category). It is also likely that at some point in their relationship with your company, customers will leave permanently…or just temporarily. It is this recognition – that there is a natural ebb and flow of customers – that differentiates GfK’s new perspective. This multi-country research introduces innovation at multiple levels. Rather than relying upon Likert scales to collect service and product quality ratings, we utilized GfK’s ConX quadrant-based tool that yields simultaneous measures of quality and memorability. These richer data were linked to new constructs such as switching and advocacy behaviors, mitigated by a new equilibrium metric that balances competitive pull and inertia. This session will provide a high-level perspective of the results and offer a glimpse into the forthcoming rigorous validation step that will relate changes in key KPIs to actual business performance across two waves for 45 brands.

Speaker Danica R. Allen, Ph.D., Global Director of Customer Satisfaction & Experience GfK Global


In the age of mobility, device proliferation and the always-on consumer, marketers need a clear roadmap to avoid the pitfalls of the shifting loyalty marketing landscape. What should the new goals for retail marketers be, and how can we combine the rational side of rewards with the emotional side of loyalty to achieve them? Further, to what extent can we manage what drives consumer commitment by better understanding the way the brain works and how marketer-driven technology can impact relationships? Speaker Robert Koen Head of Americas Field Operations TIBCO Loyalty Lab

Hyatt Regency Grand Cypress Orlando, Florida

Travel Tips and More Can Be Found Online at: www.loyalty360.org

Loyalty Expo 2014 EXHIBITORS

Loyalty Management™ • FIRST QUARTER 2014


4120 Dumont St Cincinnati, OH 45226

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