Loyalty Management

Volume 2 Number 4

November 2010 powered by Loyalty 360

YOU

& What Army? Your Branding Moment of Truth Measure your Customer Centricity

Communicate In-the-Moment

Evolution of business. Meet the evolution of promoting it.

CONSUMER PROMOTIONS

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SALES INCENTIVES

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BUSINESS GIFTS

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EMPLOYEE REWARD & RECOGNITION

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Award cards are issued in connection with loyalty, award or promotion program. Award card terms and conditions apply. © 2010 InteliSpend Prepaid Solutions, LLC The Universal Visa Prepaid Card is issued by MetaBank™ pursuant to a license from Visa U.S.A. Inc. Loyalty Management™ • LOYALTY360.ORG

This Month in NOVEMBER 2010

An Interview with Wyndham’s Robin Korman

DEPARTMENTS 6 What’s on Loyalty360.org 8 Letter from the Editor 10 Contributors

LOYALTY FORUM 12 Loyalty Forum: Your Voice 14 Behind the Brand/People Robin Korman, SVP of Loyalty and Strategic Partnerships, Wyndham Hotel Group 16 Q & A: Ask the Experts Couponing, A Strategy to Build Customer Loyalty? 18 Books Loyalty Reads

WWW.LOYALTY360.ORG

VOLUME 2 NUMBER 3

Behind the Brand/People

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14

FEATURES 20 Keep Them Guessing: Why Loyalty Programs Need Randomness Barry Kirk, Maritz Loyalty 24 The Care and Feeding of a Customer Robert A. Kobek, Mobius Vendor Partners 28 The Customer Contact Center: Your Branding Moment of Truth Mary Naylor, VIPdesk

30 Dead-On: Grateful Dead Has Taught Us So Much About Loyalty Erin Raese, Loyalty 360 32 In-the-Moment Communications: Loyalty Programs & Today’s Mobile Program Bob Gold, Gold Mobile

Add a little bit of chance to your loyalty program

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Loyalty Management™ •NOVEMBER 2010

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Loyalty Management™ • LOYALTY360.ORG

This Month in NOVEMBER 2010

WWW.LOYALTY360.ORG

VOLUME 2 NUMBER 3

TECHNOLOGY, TRENDS & REWARDS

How do you create loyalty in the age of choice? pg

36

Loyalty Management Editorial & Production Team Erin Raese - Editor in Chief Mark Johnson - Contributing Editor Kathleen Ostoich - Graphic Designer Crescent Printing Company - Print Production Loyalty 360 Team Mark Johnson - President & CEO Erin Raese - COO Amanda Chasteen - Manager, Marketing Operations Kathleen Ostoich - Marketing Manager Annie Lerner - Marketing Coordinator

34 Mobile Marketing: Top 10 Technology Strategies All Marketers Must Know Robert Carroll, SDL 36 Loyalty in a Fickle Age Render Dahiya, Arroweye Solutions 38 Loyalty Innovation

You and What Army? Marshaling the Troops toward Merchant Adoption of POS Mobile Commerce

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Contacts Article Submissions & Advertising: Erin Raese [email protected] or 513.360.8680, ext. 210 To subscribe to Loyalty Management, visit loyalty360.org.

If you would like to contribute to a future issue of Loyalty Management, please contact Erin Raese at 513.360.8680, ext. 210 or [email protected].

We Want Your Feedback As a “voice of the customer” focused publication we want to hear from you–our customers. What would you like to see included in these pages? Share your thoughts on articles and ideas for content. This is your platform. We would like to hear from you. Write us at: [email protected] © 2010 Loyalty 360, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Loyalty 360 disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions shared are those of the contributing uthors and not necessarily reflective of Loyalty 360 and/or its affiliates. Loyalty 360 shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

BEST BUSINESS PRACTICES 40 Implementing and Measuring a Customer Centricity Framework Carlos Dunlap, Kobie Marketing 44 Customer Data: The Essential Element of Your Enterprise Voice of the Customer Program Annette Glenneicki, Allegiance 46 Closing the 21st Century Service Capability Gap Christoph Goldenstern, Kepner-Tregoe 48 You and What Army? Kelly Passey, Access Development 50 Loyal Insurance Customers: An Untapped Market Sandra Zoratti & Lee Gallagher, InfoPrint Solutions 52 What We’re Hearing Mark Johnson, Loyalty 360 54 Loyalty Program Profile Best Buy’s Reward Zone Loyalty Management™ •NOVEMBER 2010

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LOYALTY 360 ON THE WEB

what’s on loyalty360.org Does your company have a CSR (corporate social responsibility) strategy?

50% of you do! LOYALTY 360 PULSE

Of the 50% who do not, only 14% plan to

implement one within the next 12 months.

Which social media tool is the most important initiative in your marketing strategies? LOYALTY 360 ASKED ITS MEMBERS:

40% say facebook WHAT ABOUT THE OTHERS? LinkedIn: 31% Twitter: 26% Foursquare: 3%

Loyalty 360 is happy to announce the upcoming launch of customizable member pages on loyalty360.org. In addition to basic company information, we provide members with an area to: •Interact and connect with other Loyalty 360 members •Communicate their company’s capabilities and industries served for each, along with an area to add relevant information •Highlight recent press, articles, research, white papers, case studies, and job openings posted on our site •Communicate relevant sales information & documents •Connect visitors and members directly to social networks such as Facebook, Twitter, LinkedIn, and others •Directly connect to potential sales leads via a built in and unique contact information form, available for visitors and members of loyalty360.org •Read any and all content members have submitted to Loyalty 360, such as press releases, articles, whitepapers, and case studies.

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We’re here for you when you need a question answered, a partner found, or a resource provided.

The mission of Loyalty 360™, the Loyalty Marketer’s Association, is to provide

an unbiased, market-driven, “voice of the customer” focused clearinghouse and think tank for all loyalty, incentive/ reward, and engagement marketing needs, insights and responses.

Loyalty 360 brings you the best of the best in loyalty marketing and supports your customer strategy needs. Some of the tools we offer include: •a weekly e-newsletter “This Week in Loyalty” •opportunity to view and post white papers, case studies, and research •access to past webinars and Loyalty Expo presentations •latest news and events happening in the marketplace •“State of the Industry,” an interactive dialogue with seasoned industry leaders •access to new community-driven forums on loyalty360.org

LEARN MORE ABOUT LOYALTY 360 & JOIN TODAY AT WWW.LOYALTY360.ORG


FROM THE EDITOR

Reports seem to be mixed about the state of the economy but as we talk to you, there appears to be a wealth of success, opportunity, growth and desire for more. The need for more knowledge and support is evident. Between this issue, our newly launched website—now complete with extensive member pages—and the upcoming 2011 Loyalty Expo, Loyalty 360 will be there, providing you information, insights on trends, best practices and forums for you to learn and share ideas with your peers. We’re seeing a variety of trends,but those that appear to be the most significant: consumer behavior, being more customer-focused/centric and mobile as a technology for the future. Consumer behavior—guess what? Consumers don’t do what they say they’ll do (not necessarily a revelation but….). The good news is while this behavior appears irrational, it is predictable. Loyalty Reads on pg 18 highlights a must read: Predictably Irrational and on pg 20, Barry Kirk shares his views on how to keep loyalty programs fresh by playing to this type of consumer behavior.

Welcome new Loyalty 360 Members:

SAP RewardsNow BarclayCard UK Wyndham Medallia PaP Solutions RiteAid Mobius CIS Solutions Georgia Pacific

It’s time to focus on customer centricity. We’ve talked about it, but how do your efforts stack up? Take Kobie Marketings’ Benchmark Assessment on page 41 to find out. Mobile. Mobile is the communication vehicle of the future. We’ve spent a lot of time thinking about mobile as a way to send coupons. But we haven’t even begun to tap this medium for what it really can be: a real “in-the-moment” communication platform; across all industries and all marketing efforts. Bob Gold shares his thoughts on pg 32; for ten best practices when choosing mobile technology, visit page 34. As always, we want to hear from you. Please continue to share your insights, topics you’d like to learn more about and your stories (your peers want to hear from you!). Sincerely,

Erin Raese Editor-in-Chief Loyalty Management [email protected]

P.S. Be sure to register for the 2011 Loyalty Expo—this year March 20 – 22 at the Hyatt Grand Cypress in Orlando, FL—Early-bird registration ends at the end of the year. Looking forward to seeing you there!

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CONTRIBUTORS

Bob Gold

Bob Gold

Bob has over 15 years of research and expertise in “digital-to-human persuasion and intimacy” that has resulted in changing behaviors. He is currently CEO of Gold Mobile, and has used his behavioral knowledge to create a robust mobile CRM platform and behavioral methodologies that drive consumer engagement and loyalty.

Carlos Dunlap

Carlso Dunlap

Carlos is the Practice Director of Loyalty Consulting at Kobie Marketing. He has spent the past 16 years cultivating a rich background in customer engagement strategies, direct marketing, business development, customer acquisition, customer loyalty and strategic marketing through several key posts.

Lee Gallagher

Robert Carroll

Lee Gallagher, Director of Precision Marketing Solutions, InfoPrint Solutions, has extensive experience in teaching marketers on how to deliver relevant and meaningful communications at each customer touchpoint.

Robert Carroll is CMO of SDL’s Web Content Management Solutions in North America. SDL accelerates delivery of high-quality multilingual content to global markets. Lee Gallagher

Robert Carroll

Annette Gleneicki

Render Dahiya

Annette Gleneicki is Senior Director of Customer Success at Allegiance, Inc. She has almost 20 years of experience in designing large global VOC and EFM initiatives for Fortune 1000 companies.

Render Dahiya has served as Arroweye’s CEO since 2007. He previously spent nearly 20 years at FedEx Kinko’s as a founding member, helping to build it into a nationally recognized brand. Annette Gleneicki

Render Dahiya


CONTRIBUTORS

Christoph Goldenstern

Christoph Goldenstern

Christoph is the Global Vice President of Service Excellence at Kepner-Tregoe. He leads a global team of consultants who serve clients in a range of high tech industries. Prior to joining KT, Christoph provided business and marketing strategy to a host of business-tobusiness clients.

Mary A. Naylor

Mary is a 20-year veteran of the concierge services industry, is founder and CEO of VIPdesk. Global industry leaders trust VIPdesk to enhance their brands through our customer care and loyalty programs.

Mary Naylor

Kelly Passey

Robert A. Kobek

Robert is the President of Mobius Vendor Partners. Prior to forming Mobius, Robert spent more than 20 years in the direct marketing industry and government. He successfully launched two companies with core competencies in the teleservices industry.

Robert Kobek

Kelly Passey

Barry Kirk

Barry Kirk

Barry Kirk is Maritz’s chief provocateur in the Consumer Loyalty space, always looking to challenge where we are and helping to poke, prod and cajole loyalty marketing to its next iteration, including leading consultative engagements on customer loyalty and applying the latest thinking in the design of new program strategies.

Kelly, Executive Vice President of Incentive & Loyalty Services at Access Development, has over fifteen years of experience in the financial bank card sector with specific focus on incentive and loyalty solutions, including seven years at VISA managing Incentive Marketing Services.

Sandra Zoratti

Sandra Zoratti, Vice President, Global Marketing Solutions at InfoPrint Solutions, is responsible for transforming the company from a pure hardware centric organization into a communications-based solutions business. Sandra Zoratti


LOYALTY FORUM: YOUR VOICE

What makes you loyal to your favorite brand? T

here are many staple items I buy, and for the most part I am loyal to those products. I have always choose products that provide a good “value”, but recently have been impacted by recommendations from co-workers, friends, etc. If the item is more of a commodity, I will probably focus more on price, but I am willing to pay more if I am getting a good deal. If I can get an additional coupon/savings beyond the price, I will use it. The most recent Brand change I made is yogurt. I was a loyal name-brand purchaser (once in a while purchasing our own brand—the Giant Brand). Recently, after hearing some buzz (from fellow co-workers) about a new Greek yogurt, I decided to give it a try, and I love it! It is more expensive, but I think the value I get (because it is better tasting than the national brand), is worth the additional price.

I

am loyal to those companies and or products that appreciate, recognize and value my relationship with them. I feel like I bring something to the relationship with patronage and referral and I appreciate being recognized and offered preferred privileges, added value or special pricings as my reward. I am loyal to those who differentiate themselves by doing the right thing at the right time. Empowered to make good calls in troubled situations. Simply having the best product and or best technology is meaningless long-term. Without a relationship, you’re only as good as yesterday. Roger Blier Passport Unlimited

I am loyal to those who differentiate themselves by doing the right thing at the right time.

Jerry Griffin Giant Eagle

T

he brands I remain loyal to are those that bring me consistent product quality and value at a reasonable price. They include food products like Quaker oatmeal, Old Spice, Subaru, HP, Sony and others. I pick up on new brands like Visio and Kindle if they bring something special. I tend to stick with Blackberry even though the technology is inferior to iPhone because of embedded information and knowledge of the device. I believe MAC is free from viruses and hackers but will not use it because I do not see it as user friendly compared to PC. In summary I choose brands and stay loyal because they fit my lifestyle and therefore make my experience as a consumer easier. Les Deck

—Roger Blier

C

onsistently great quality at a reasonable price.  

Joni Newkirk

I

am loyal to a brand when quality is consistent. Over the years I have tried to switch some of my favorite brands to try something new, because they had more variety, lower price, etc...But I usually come back to the tried and true favorites, because of the quality and I know they will work for me. The funny thing is there are some items I am fanatic on staying loyal, there are others I skip around pretty easily. Lissa Daniels

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July 2009

| Loyalty Management

LOYALTY FORUM: BEHIND THE BRAND/PEOPLE

Robin Korman Senior Vice President of Loyalty and Strategic Partnerships , Wyndham Hotel Group Robin joined Wyndham Hotel Group as Senior Vice President of Loyalty and Strategic Partnerships one year ago. She has extensive loyalty experience in financial services and hospitality and is currently changing the face of Wyndham Rewards, the world’s largest hotel loyalty program with 11 brands and more than 6,500 participating hotels. Previously, Robin was Vice President of Global Loyalty for Starwood Hotels & Resorts, where she transformed the Starwood Preferred Guest program from a “one-size-fits-all” point-accrual program to a customer-centric rewards and recognition program. She has also held senior marketing roles at JPMorgan Chase and Citibank building loyalty among credit card customers. Loyalty Management takes a closer look at the woman changing this brand—Robin Korman, SVP, Loyalty Marketing and Strategic Partnerships.

Wyndham has over 6,500 locations under its umbrella and its loyalty program, Wyndham Rewards, is only 6 years old. This must mean a variety of new initiatives and opportunity. We are a relatively new player in the hotel loyalty space and we have been growing aggressively. We have 8 million active members who can rack up points quickly as we have the most brands (11) and the greatest number of hotels to earn and redeem points. Research showed us that loyalty program members are skeptical that they can get to reward levels quickly. We are capitalizing on our competitive advantage—the most hotels to earn and redeem—by relaunching Wyndham Rewards with new positioning based on reward attainability and with a new tagline, Rewards Right Around the Corner. We also have a new GPS-inspired creative look which showcases our hotel brands and shows travelers who easy it is to attain rewards because of our ubiquity.

rich acquisitions bonuses of up to three free nights and an extra point/$1 when used at Wyndham hotels.

Wyndham ran a summer promotion via mobile. Have you found your customer base responsive to mobile promotions? We are just getting into mobile. For travel, it is the wave of the future since most frequent travelers are not sitting in front of computers all day. Like many loyalty marketers, we are trying different things, but the penetration of smart phones is in its infancy in the US (only about 20%) so it limits the ability to fully penetrate your customer base. We have done more with mobile in China as that market is ahead of the US in adoption. We push promotions out through our members’ mobile phones and they can register right from their devices. We also send reminders texts to book and stay during the promotional period, tailoring the messages depending on whether they have made a booking.

Always treat the customer better than they expect and, when you don’t, make it right. People appreciate being heard.

Congratulations on the co-brand card launch. How has this been received? Our new Wyndham Rewards Visa card with Barclays launched in July and has already exceeded our expectations. We offer a card with no-fee and one with a $39 fee,

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What’s your loyalty philosophy? Always treat the customer better than they expect and, when you don’t, make it right. People appreciate being heard. Loyalty is something you have to keep earning. Consumers are fickle and one bad experience with no resolution can change their allegiance.

Share with us your last “ah-ha” experience as a customer. My last “ah-ha” was realizing how much better customer service has become. Many companies are truly empowering their agents to solve (not just listen to) issues by immediately offering replacements or small goodwill gestures. Most customers just want to be heard and treated as if their issues matter. One example of a company standing by their customer promise is 1-800-Contacts who offers a refund for unopened contact lenses. I recently called about old lenses I found in a drawer. The agent informed me they were 8 years old, laughed, and then gave me a full refund—and even credited me for the return shipping!

What one experience has had the most affect on your life / most shaped your life? Coming out of college with a psychology degree does not qualify you for too many things so I took a job working in Japan teaching culture and language for 18 months. I was fascinated with the cultural differences and the

would keep me laughing forever! (and give me material for future articles!)

If you weren’t working for Wyndham, how would you be spending your time? Traveling to exotic places using my points and miles.

What can we expect from Wyndham in 2011? We just redesigned our logo and creative look which we think will break through the clutter.

My last “ah-ha” was realizing how much better customer service has become. Many companies are truly empowering their agents to solve (not just listen to) issues. Robin and her team; Enjoying Halloween festivities (right)

wacky advertising which led to my decision to get an MBA in international management, and then to start working in advertising agencies. Unfortunately, I started after the era of the three martini lunch.

If you could have dinner with anyone (past or present) who would it be? Jerry Seinfeld. I love the way he shows the insanity of customer service situations such as the car rental company that knows how to take—but not hold—the reservation, the horror of air travel and the frustration of waiting for a table at a restaurant, or buying soup from a surly deli guy. His show should be the “what not to do” for any customerfocused organization and a whole night of these insights

We recently relaunched our website with better navigation and new redemption options such as airline tickets and tickets to sports, music and theatrical events. We are exploring new opportunities in social and mobile so look for some new things to happen there.

What’s your advice for a novice loyalty marketer? Data is your friend. Many creative marketers are afraid of numbers but data is the way to truly understand who your best customers are—sometimes your most frequent customers are not your most profitable (they are often the deal seekers) and you need to understand the difference. Creatively, just try things (but always have a matched control group). You never know what will work! L


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Q&A LOYALTY FORUM: Q&A

Ask the Experts

Q: Couponing, a strategy to build customer loyalty? A:

Couponing can encourage a prospect to try a company or product. But you may be attracting a customer that will always be price-sensitive, and will either wait for your next coupon, or be swayed by a competitive coupon. To build that one-time purchaser into a long-term customer, you should ideally deliver some other benefit than price (unique product, fabulous customer service, unique add-on services, etc.). If the only communications you have with your clients are your sales or coupon advisories, you are training your customers to wait for your next sale or coupon. But if your email retention series of messages also contains other types of communications—info on how to get more value from your products, case studies on how other customers are using your products, copies of articles giving your company/product positive reviews, etc.—you can help emphasize your unique benefits other than price (and help your customers see your key points of differentiation, emphasize the value of your products, etc.). Sending an occasional “private sale” notice that is available ONLY to your customers can help build loyalty. Sending a special offer for volume purchases at a special price can also prevent competitive inroads, by effectively taking your customer out of the market for consumable goods for a period of time. L

—Karen J. Marchetti

Internet & Direct Marketing Consultant & Copywriter, SVP Client Services , SMAresource.com & ResponseCoach.com

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A:

Consumers need to be given a benefit for consistently shopping with you. This doesn’t have to be a form of discount, but it generally has to play a part. Whether this is a coupon, a voucher, an instant reward, an offer sent by email or sms or purl, is neither here or there. The other point is that the reward or benefit, is of minor importance. The more important point is that any offer or personalised message needs to be linked to a database of customers and transactions—otherwise the offer, regardless of the mechanic, is a blunt instrument that you can’t target and truly prove the benefit. If you do have a database of customers AND transactions, the opportunity is limitless, regardless of the mechanic vehicle. L

—Andy Wood Owner, GI Insight

To build that one-time purchaser into a long-term customer, you should ideally deliver some other benefit than price like fabulous customer service.

A:

Building loyalty through coupons is a formidable challenge today when the numbers of the traditional coupon clippers are on the wane. The likes of those can be primarily found only during the holiday season, actively hunting for a good bargain. 1. Multichannel redemption: Tactics such as use physical coupon codes online or use e-coupons at stores. 2. Integrate e-coupons with loyalty cards: Customers should be allowed to tag their loyalty cards with with e-coupon codes. So, rather than carrying coupon clips, shoppers can use their loyalty cards to get coupon discounts as well. 3. Integrate with BI: Dig deep to understand your customer segments, communities, local events etc to derive a targeted couponing strategy. L

—Shijo Thomas

Business Analysis, Software Paradigms International

A:

Couponing is definitely a way to build trial and gain long term customers. I would look at the category you are thinking of couponing and understand the loyalty breakdown between brands and where your brand falls. That will have an impact on your results and give you a direction for which tactic and value will work. Some tactics like direct mail and checkout couponing using loyalty card data are great because you can target non-loyals. Some other tactics are much more broad and you can end up couponing loyal consumers that were already going to buy the product. L

A:

Coupons are a terrific method to build loyalty of your brands. Tactics include inpack coupons (if feasible based on packaging), in-store account specific, direct mail, and many on-line coupons methods (corporate website and customer specific). Especially, in these economic challenging times, coupons are a great way to increase loyalty and eliminate brand switching. L

—Darlene Morisco

Senior Account Executive, Collaborative Marketing Group

—Brad Wensel

Senior Program Manager, Catapult Marketing

Customers should be allowed to tag their loyalty cards with e-coupon codes. So, rather than carrying coupon clips, shoppers can use their loyalty cards to get coupon discounts as well.

A:

Coupons are lazy marketing and they train the consumer to commoditize the product, store or service. It is well regarded in brand management that to entice a consumer to try a new brand the marketer needs to offer an ‘equity enhancing’ incentive. There are two key points. 1. A new customer needs an incentive or reason to try the unfamiliar brand. Loyalty comes from other things, so coupons to create loyalty is counter intuitive. 2. Coupons are not equity enhancing. In fact they destroy perceived value. Discounting has its place in the overall marketing strategy but using coupons to develop loyalty is not appropriate. Couponing existing customers does not build credible loyalty to a retail store, nor a product. Loyalty comes when the relationship is elevated past the transaction and taken to “sustained emotional preference.” By definition

a coupon is a monetary tactical tool of limited time value. There is very little if any positive emotional attachment. Our contention is loyalty isn’t a thing (coupon) but a state (feeling or emotion) and how you move to that requires emotional related tools. It is the way the consumer is treated, how they feel about the store, the staff, the surroundings, the product, the displays, etc. Do they feel valued? Rewards rather than discounts, for example are closer to the emotional side. Being “rewarded” carries a completely different connotation that can be traced back to early childhood. But rewards are just a small part of creating loyalty. There are a lot of other factors that go into developing a sustained emotional preference with the customers. L

—Peter D. Morris SCSM, SCMD, CLS

Loyalty comes when the relationship is elevated past the transaction and taken to “sustained emotional preference.”

CEO, Greenstead Group


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LOYALTY FORUM: BOOKS

Loyalty Reads EMPOWERED: Unleash Your Employees, Energize Your Customers, And Transform Your Business by Josh Bernoff and Ted Schadler September 2010 | Harvard Business Review Press

You know it’s happening within your organization. Your people, armed with cheap, accessible technology, are connecting with customers and building innovative new solutions. But who are these creative problem-solvers? How can you be one? And just as important—how can you lead them? We call them HEROes: highly empowered and resourceful operatives. Your company needs them because in the age of Twitter, iPhones, Facebook, YouTube, and an ever-evolving torrent of Web information, your customers now step up to the counter armed with more data and access than ever before, and in many cases, your company is overmatched. In Empowered, Forrester’s Josh Bernoff—co-author of the pioneering book Groundswell—and Ted Schadler explain how to transform your company by unleashing the mighty force of these HEROes. Like John Bernier and Ben Hedrington at Best Buy, who built an army of 2,500 tweeting employees to reach out to customers online. Or Ross Inglis, who tapped into Internet computing resources to open an entirely new customer channel for Thomson Reuters. Or John Stadick, who equipped 600 sales staff with iPhones and boosted profits at his construction rental company. The truth is, one in three of your information workers already use easily accessible technologies that your company does not sanction. Empowered gives you a prescription for embracing this covert innovation. At the heart of a HERO-powered business is a new pact between these critical employees, company managers, and the IT department: HEROes build new solutions to meet customer needs, management sets clear rules while encouraging more experimentation, and IT expands its role to both support and secure these business solutions.

CUSTOMER EXPERIENCE STRATEGY: The Complete Guide from Innovation to Execution by Lior Arussy February 2010 | Strativity Group, Inc.

Much have been written about the importance of customer experience. But how do you actually develop and launch such strategy? The stories of the Ritz Carlton, Disney, Southwest and Zappos are very popular among customer advocates. But how do you develop customer experience in your company? These are the two core questions Customer Experience Strategy: The Complete Guide from Innovation to Execution was designed to address. Following a close loop blueprint, the book delivers a ready to implement recipe that turns customer experience into a manageable endeavor. Lior Arussy is the founder of Strativity Group, a global customer experience research and consulting firm with clients such as FedEx, Capital One, Nokia, Crowne Plaza Hotels and Merck. Utilizing the successful methodology developed by Strativity, the book details the steps to take and the pitfalls to avoid as you seek to differentiate your business based on customer experience. With examples of customer experience in consumer environment, business to business relationships, employees as customers and the citizen experience, the book provide applicable guidelines to diverse customers’ relationships. From setting up the strategy to innovating the experience at every touch point, the book provides in depth guidelines from real time experience of the author deploying these strategies at corporations around the world. Hot issues such as developing the business case and executive sponsorship are receiving special attention in the book with practical ideas how to address these classic challenges. Especially fascinating is one of the case studies detailed in the book in which a utility company transform their performance from a negative 30 net promoter score (NPS) to appositive 54 NPS in 12 months. For those struggling with moving the satisfaction needle, this and other case studies will be very useful. Customer Experience Strategy is an indispensable tool for every manager serious enough to actually move from talking to doing. For managers who attempt to transform their organization to deliver consistent, delightful experiences, the book will become a critical tool for success.

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TRUST AGENTS: Using the Web to Build Influence, Improve Reputation, and Earn Trust by Chris Brogan and Julien Smith April 2010 | Wiley

There’s no question that the Internet has changed the way we do business—especially when it comes to marketing. Consumer environments are short on trust and populated by consumers who are cynical, savvy and informed. Though it’s easier than ever to reach your customers, it’s less likely that they’ll listen. Today, the most valuable online currency isn’t the dollar, but trust itself. At the same time, social networks and personal connections have far more influence on consumers that your marketing messages ever will—unless your business knows how to harness them. In Trust Agents, two social media veterans show you how to tap into the power of these networks to build your brand’s influence, reputation, and profits. Trust agents aren’t necessarily marketers or salespeople; they’re the digitally savvy people who use the Web to humanize businesses using transparency, honesty, and genuine

relationships. As a result, they wield enough online influence to build up or bring down a business’s reputation. This book will show you how to build profitable relationships with trust agents, or become one yourself. In an online world defined by its transparency, becoming a trust agent is no easy task, but once you’ve established your reputation, you can build influence, share it and reap the benefits of it for your business. When you’ve learned a trust agent’s secrets, your words can carry more power and more weight than any PR firm or big corporate marketing department. Learn to use the power of the Web and social networks for your business now. Trust Agents gives you all the tools and strategies you need to do it the right way—honestly, effectively, and profitably.

Two social media veterans show you how to tap into the power of these networks to build your brand’s influence, reputation, & profits. PREDICTABLY IRRATIONAL: The Hidden Forces That Shape Our Decisions by Dan Ariely April 2010 | Harper Perennial

Do you know why you still have a headache after taking a onecent aspirin, but why that same headache disappears if the aspirin costs fifty cents? Do you know why recalling the Ten Commandments reduces people’s tendency to lie, or why honor codes are actually effective in reducing dishonesty at the workplace? Do you know why, after doing careful and extensive research on which car to buy, a random meeting with someone who had an awful experience with that car changes your decision? Why do we make decisions contrary to our better judgment? What is better judgment? Predictably Irrational challenges us to ponder these questions and demonstrates how irrationality manifests itself in situations (often very peculiar and hilarious situations) where rational thought is expected. We all succumb to irrationality, it s about time we find out how it affects our daily lives in a significant way. In this astounding new book, groundbreaking in scope and totally original, Dan Ariely cuts to the heart of our strange behaviors and presents outstanding material that will keep every reader transfixed. Predictably Irrational comes from Dr. Ariely’s work as a behavioral economist, but it’s not for economists. Well, it is, but mainly to the extent that it can help them the same way it can help anyone. If the behaviors that skew our judgments were random or senseless, we’d be hard put to sort them out and make better decisions. But research has shown that our irrationality is, in fact, systematic.

This sly and lucid book is not about your grandfather’s dismal science. Ariely’s trade is behavioral economics, which is the study, by experiments, of what people actually do when they buy, sell, change jobs, marry and make other real-life decisions… [Predictably Irrational is] a concise summary of why today’s social science increasingly treats the markets-know-best model as a fairy tale. —David Berreby, The New York Times People will make the same types of mistakes over and over, in a predictable manner, because the behaviors have structural origins. So recognizing them and understanding them offers us a way to do better. And that’s the aim of this book: to leave you with new knowledge of human nature, derived from a wide range of scientific experiments and findings, that will help you make better decisions in your personal life, your business life, and in the choices we all need to make about our collective welfare.


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FEATURES

Keep Them Guessing: Why Loyalty Programs Need Randomness by Barry Kirk, Maritz Loyalty

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redictability is reassuring. It’s also totally boring. Think about it—when did you last you call IHOP to see if they still served pancakes? Or had any doubts whether the fall TV lineup would include a reality show where a houseful of beautiful people competes for televised validation? Some things are just a sure bet. The upside of the predictable things in life is that we don’t waste any brain power worrying about them. The down side is…we don’t waste any brain power paying attention to them, either. For anyone trying to influence human behavior, that’s a problem. Game designers have intuitively known this for centuries. Randomness, or “chance,” is woven into most great game experiences, through the draw of a card or a roll of the dice. Randomness is novel, and novelty always gets our attention and keeps us interested. The trick, of course, is balancing the random with the predictable to create a compelling experience, but not a frustrating one. As Carnegie Mellon professor and game designer Jesse Schell puts it:

“Risk and randomness are like spices. A game without a hint of them can be completely bland, but put in too much and you overwhelm everything else.” But game designers aren’t unique in their ability to understand how humans think. Thanks to the growing fields of neuroscience and behavioral economics, loyalty marketers now have a larger window into how human beings connect with what’s important to them. We’re coming to understand that humans are more than rational. Our brains are wired for social experience more than any others. We are biologically driven to engage in competition and raise our status amongst peers. We enjoy playing and learning through play. Rewards motivate and intrigue us. We desire to master skills, and we set goals to achieve that mastery. When we find these elements in an experience, we “play” harder, lon-

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ger and with more enthusiasm. We become more involved and more engaged. Through this new lens, we’re also learning that typical loyalty programs are stale. Marketers are focusing too much on structuring programs for a mythical consumer who only thinks rationally about the program value proposition. For instance, marketers using this “rational consumer model” are tending to react to the current economic conditions by turning their loyalty initiative into a discount program. Marketers start out thinking they need to be more aggressive in offering discounts. With the rise of so much “social couponing”—just think about Groupon.com and its imitators—the discount offer is everywhere now, and essentially it devalues the brand. It’s a zero-sum game, and brands are going to continually have to up the ante to keep people engaged at that level. As marketers we also misguidedly pride ourselves on creating rules structures that are fair, in part, because they are highly predictable— members know exactly how the program works, how to earn their points, and when they can redeem for a reward. Unfortunately, this focus on the rational and predictable means we’re also missing major opportunities for engagement, since it’s really a recipe for asking your members to put their brains on auto-pilot. The model of “rational economic benefit” is not the right strategy for building true loyalty because it’s based on a very limited understanding of how the human brain responds to experiences. Neuroscience studies are helping us understand that all human beings are both rational and emotional, and that consumers attach more meaningfully when there’s an opportunity for an emotional connection with the brand or program. This emotional connection may take the form of a chemical—the neurotransmitter called dopamine – being released into the body which translates into a feeling of pleasure. Studies show this same “pleasure chemical” is released when we receive rewards. We now also know that people experience the same feeling with other program attributes that are often underdeveloped in a loy-

alty program, such as status, social interaction and randomness. The impact of randomness in this chemical interaction is that unpredictable wins produce the greatest pleasure response in the human brain. Neuroscience shows that unexpected rewards have a heightened emotional effect, compared to the rewards participants know are coming. The effect applies even when the extrinsic value of the reward is less than the expected reward. This means “surprise and delight” isn’t just a good idea; it’s a smart financial choice for a loyalty program. When you bring a sense of randomness into a loyalty program, you can provide less expensive rewards (because the intrinsic value is greater) and receive the same engagement benefits. Unpredictability also equals attention, as it is part of the deep programming of the human brain to focus on the novel and to seek patterns even in those experiences that are truly random. Think about it—if you were a busy caveman hunting on the savannah, you needed to quickly shift your focus to anything unexpected on the horizon because of the possibility that it might be something intent on eating you. Our modern brain retains that tendency, finding itself drawn to novelty and attempting to find patterns in almost everything. This is why we take note of the sudden death of a celebrity, and then wait for two more well-known people to pass away so we can declare with erroneous certainty, “See, celebrities always die in threes.” And while our response to it is not always rational, randomness is a very effective way of telling the brain to wake up, pay attention and try to figure out what is happening in the moment. A random element can be applied to literally any part of your program. Charter Communication’s Live It With Charter program includes random redemption periods for which members only receive a 24-hour notice each month. Starbuck’s loyalty program is well known for sending loyalty program members unexpected direct mail coupons for new product trial and discounts. And upstart location-based service Whrrl has recently launched their Society Rewards loyalty program

Neuroscience shows that unexpected rewards have a heightened emotional effect, compared to the rewards participants know are coming. This means “surprise and delight” isn’t just a good idea; it’s a smart financial choice for a loyalty program.

continued on next page »


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Keep Them Guessing: Why Loyalty Programs Need Randomness (continued)

Keep in mind the need to occasionally switch things up—ironically, even randomness becomes boring if it starts to feel too predictable. where the rewards are structured as “prizes of chance” that members might win by participating in engagement behaviors. Even in Foursquare (a more established geolocation service), the aspect of randomness can delight and surprise. Say I visit my neighborhood pub and check in. I take a minute to see who’s visited, and how recently. The pub’s e-marketing team sees that I’m back and tweets me the details on today’s special, with an offer to enjoy a beverage on the house. Using Foursquare, the pub can deliver random experiences that don’t cost more than a few bucks. In turn, I’m a happy patron who is thrilled to come back again and again to vie for pub “mayorship” and the mere possibility of an unexpected reward. However you choose to introduce a random element into your program, the best approach is to adopt a test-and-learn methodology to determine where you can have the optimal impact on behavior. Keep in mind the need to occasionally switch things up—ironically, even randomness becomes boring if it starts to feel too predictable. It’s also important not to overdo it—randomness should be an element of your program, but not the entire program since the predictable also serves a function in giving the participant’s brain a mental model of the program it can reliably attach to. Each brain is unique in how it responds to stimulation, but there are clear advantages in looking to neuroscience to help improve loyalty marketing initiatives. When you shift your program’s sole focus from providing extrinsic rewards—the “stuff” participants get with points—you may be amazed by the world of options available to create a more intriguing program experience. The mixing of intrinsic wins—such as the “pleasure chemical” experienced from a surprise—with more traditional extrinsic rewards will strengthen brand marketers’ ability to build both lasting and meaningful consumers connections. L

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Loyalty. Loyalty. Reinvented. Reinvented.

Loyalty programs are a strategic asset. Loyalty programs are a strategic asset. To capitalize on them requires going To capitalize on them requires going beyond rewards. beyond rewards. First Data provides intelligent, data-driven loyalty solutions that

provide insight to make your loyalty program moresolutions effective.that Utilizing First Data provides intelligent, data-driven loyalty state of the art analytics, First Data enables you to understand your provide insight to make your loyalty program more effective. Utilizing customers, purchasing behavior andyou maximize revenue.your state of thepredict art analytics, First Data enables to understand First Data ispredict uniquely skilled at providing our clients with more relevant customers, purchasing behavior and maximize revenue. and valuable rewards for their customers, increasing customer First Data is uniquely skilled at providing our clients with more relevant acquisition and retention and creating stronger relationships. and valuable rewards for their customers, increasing customer acquisition and retention and creating stronger relationships.

To learn more visit firstdata.com To learn more visit firstdata.com

Loyalty Management™ | Loyalty Management™ |

November 2009

©2009 First Data Corporation. All rights reserved. All trademarks, service marks and trade names referenced in this material are the property of their•NOVEMBER respective owners. Loyalty Management™ 2010

November 2009

©2009 First Data Corporation. All rights reserved. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.

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FEATURES

The Care and Feeding of a Customer by Robert A. Kobek, Mobius Vendor Partners

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t is very hard for me to imagine a discussion surrounding customer care is really necessary. But for some reason all businesses swat at the issue as if it is a breaking story on a major news network. Concentrating on what it takes to ensure a pleasant customer vacation experience is a natural part of business, at least I think it is. But there are other areas we touch, or should touch, our owners and guests. Often “care” is confused with service, which is, no doubt, a part of caring for a customer. Caring for a customer goes beyond customer service. Customers are assets that should be protected with every fiber of the company’s being. First, the definition of a customer lies in the attitude of the beholder. Dictionary.com defines it as: cus·tom·er [kuhs-tuh-mer] –noun 1. a person who purchases goods or services from another; buyer; patron. 2. Informal. a person one has to deal with: a tough customer; a cool customer. I will throw in a 3rd definition: Those who provide goods or services on behalf of others. syn. Employees.

For the intellectuals among us, how hard is this to understand? Adam Smith conjured up the notion of supply and demand in his 1776 publication The Wealth of Nations and Theodore Levitt bolstered the argument in his 1960 Harvard Business Review manifesto (Marketing Myopia) “that companies should stop defining themselves by what they produced and instead reorient themselves toward customer needs.” Adam Smith’s premise was that increasing revenues and decreasing expenses results in a profit. It was Benjamin Franklin that took that premise and installed it into what we know as capitalism in the United States. If the premise that it takes five times the resources to gain a new customer than it does to keep one is correct, the following information is meant to establish a new or renewed attitude toward timeshare owners, guests and employees. If a timeshare tour hovers around $500 then it seems logical to point at least $100 per customer to take care of their needs. Add to that the cost of the

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sale and a light bulb should go off in the head of every property manager in timeshare that the budget dedicated to the care and feeding of an existing customer is most likely far too low. And, there are efficient tools that can be used to continue to touch customers who cost nothing, or very little at all. Most fall into the category of communications. Talk to them, and let them talk back. Ask questions and respond to the answers, provide information, good information, not “so what” stuff. The vehicles are there; mail, phone, internet, and on site interaction should all meld with the vacation experience to create the warm fuzzy for our customers that will decrease default rates, increase visits, decrease complaints and increase compliments. What could be wrong with intelligent and planned efforts to find out what they are thinking instead of talking to ourselves about what will and won’t work? As a matter of respect for this forum, a commercial about a product we offer is inappropri-

Once a customer has been acquired, the key is to keep him. A company retains its customers by delivering on its value proposition, so that the customer has no need to look elsewhere. Therefore, ensuring high-quality service is fundamental.

ate; however, it is a great example. Our product can touch every owner, guest and exchanger that visits your property, and is a proven profit center that has its focus on customer care and experiences. Yet at times we are informed, “It is not in our budget”. Since I am no rookie to sales, the “budget” objection is a very weak objection and every sales professional knows that is a blow off. Or, if it is a real issue, it is more often than not the musing of that person who only looks at expenses and forgets there is revenue opportunity associated with caring for a customer. In caring for a customer the budget issue is a weak excuse for not wanting to change, alter or delete a process that most of us inherited and figure that since it is a legacy, it has some place of honor. We get bolted to outdated processes and it just seems like too much hassle to change them. There is so much affinity to the old ball and chain that we continue our old ways of treating customers with policy rather than service. A result is a surprise issue that could have been resolved for very

little money and becomes a larger problem with a non-budget price tag attached that costs far, far more. I know about this phenomenon because we provide other services to fix things that could have been avoided. However, think about the question and answer. Why would you not want to take every opportunity to touch your customers? Each time you do, you gain loyalty, and every time they come back, they make you money. As a possible unintended consequence, the more pleasant the experience, the greater the likelihood they will refer a friend or family member. In the marketing and sales of timeshare today, the collapse of end loan financing forced us to kick up, “owner referral” programs. Offer the owner something of perceived value and they will inundate us with the names, addresses, phone numbers and email information of all kinds of relationships. More importantly, the success of an owner referral program is wholly dependent on the owners start to finish experiences. If they love it, they will refer; if they like it, they might continued on next page »


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The Care and Feeding of a Customer (continued)

refer; if they hate it, they won’t refer. (The same is true in ensuring maintenance fees and other payments are made in timely fashion). Today the acquisition cost for new business is the same. There is no decrease in the per tour expense, just fewer tours. The decrease in the variable side of the ledger is because we are selling less, but the cost per sale is the same. There is no increase in profit, just holding our own until things get better and the bankers tell us it’s ok to go back to the old ways of marketing and selling. And, the owner (customer) is getting creamed with offers that will eventually lead to a dry well. While somewhat valuable today, there are a finite number of owners (4 million +/- depending on who you ask). The proper care and feeding of a customer will produce referrals, increase traffic at a resort, and cause money to flow. It minimizes complaints and creates efficiencies in areas you may never have thought of (like savings on your toll free lines). Try these “rules of thumb” as a guide and add them to what you already have to ensure the proper care and feeding of your customers.

•The vacation experience begins before check in. The tone of the experience starts in your call center when the owner, exchanger or guest calls to inquire and/or make a reservation. If your mandate is to “save on seconds”, the caller knows and will leave the experience with a lukewarm per-

If you don’t know how, find someone who does. Just as you can’t tell the players without a program, you can’t know what needs fixing unless you identify the gaps in service. •Measure, consistently, constantly and regularly. Do more of what pops up as being good and less of what is bad. Ask genuine questions regularly and consistently. Act on the answers. •Customers and employees are the center of your universe. All good things sprout from them and all bad things fester from them. •The speed of light is 442,000,000 miles an hour. Coincidently that is the same speed bad new travels. Good news moves at the speed of a snail relaxing. •There are no shortcuts to care. Every time you think there is, you end up breaking a rule and you will be reminded why it was a rule in the first place. •Mind your etiquette. Answer every email and return every call. Be responsive. Learn to write in business speak. Teach your employees to write in business speak. Please and thank you go a very long way. And, finally, none of us knows it all. Keep learning, keep caring and stop talking to yourself. Instead of swatting at the issue do something. Stop trying and take action. In the words of Charlie Weis, head football coach of Notre Dame, “yesterday is over, tomorrow may not come, there is only today”. L

The notion that; “if it ain’t broke, don’t fix it” is old, tired and wrong. Imagine the cave dweller who slipped on a rock and figured out that he could invent a ball bearing, then alas, the wheel. Neither of them budget items.

•Treat employees like customers. There is a direct correlation between employee satisfaction and service delivery. Employees who like their jobs will better serve customers and stay on the job longer thereby decreasing cost and increasing revenue. •Satisfied customers are not necessarily loyal customers.

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ception, at best. •Dress well, everywhere, everyone, every time. The next person to call you or walk in the door is a VIP. Get rid of clutter, expect everyone to have shined or new shoes regardless of their function and there is never an acceptable time when property and personal hygiene should not be impeccable. Be mindful of language and grammar. •It is the little things. The devil is not in the details, the answers are in the details. •Quality is a path, not a result. Only you can define the quality standards and only you can insist they be met and only you can decide on the commitment you make to maintain and grow on the quality path. •Document all your processes.

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FEATURES

The Customer Contact Center: Your Branding Moment of Truth by Mary Naylor, VIPdesk

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s much as $40 billion/month is spent in the U.S. on marketing—to build brand recognition, differentiate brands from their competitors, and ultimately win sales. Much of this well-honed and refined corporate branding, marketing and advertising—ranging from more traditional outreach such as newspaper and television advertising to online advertising and social media marketing—is being implemented to drive consumers to take action. We want consumers to visit our stores and websites, to call us and e-mail us, and ultimately spend money with us.

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owever given all of the time, money, and attention that is being spent to drive customers to action—what are we doing with our customers once we actually have them where we want them—what are we doing at the “moment of truth”? When a marketing campaign is successful, and customers reach out and engage with our brand, the first (and often times only) interaction they have with us is via our customer contact center. Does the experience that your customer has with your brand continue through their experience with your contact center? Does the promise of your brand match the reality of the customer experience?

Brand Experience Management: Aligning Your Brand Promise and Ultimate Customer Experience Into the Contact Center The old adage about first impressions making lasting impressions still rings true today. Every interaction a consumer has with your company is so much more than just an information session or sale, however all too often very little attention is paid to how the brand experience continues for the customer once they leave your store or navigate off of your corporate website. The bottom line is that no matter where they are or what the venue, every interaction your customers have with your brand is a unique marketing event. Every impression that they have—from the window display in your retail outlet at the local shopping mall to the contact center representative who helps them when they call your toll-free number to what they read on your corporate Facebook wall—is a branding experience. In order to be effective, a brand strategy must extend all the way to the most critical, personal point of contact: when a customer or prospect calls, sends an email, or initiates a chat to find out more. This personal contact is what is going to determine whether your customer continues to remain loyal to your brand, or whether they transfer allegiances to a competitor—a 2007 Accenture study revealed that 50% of customers who switch brand allegiances do so because of poor contact center experiences.

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Is what you deliver—your ultimate customer experience— aligned with your brand promise?

Six Strategies for Aligning Your Brand Promise and Ultimate Customer Experience Give your customer service team a test drive. Have you ever called your own toll-free number? I’m sure you have heard sample calls, however every marketing executive should call their own toll-free number at least once. When you do, call from your home or cell phone, preferably in the evening or on a weekend. Don’t call the “employee hotline”— call the number which is printed on your packaging, published on your website, and promoted in your advertising and direct mail. Then when someone answers—be a customer. Ask a few questions, then make a purchase, and see what happens next. Chances are, you will be very surprised at the results. Listen to the voice of the customer If you aren’t making decisions based on customer feedback—how are you sure your decisions will resonate with your customers? Your customer service and quality assurance teams are already capturing the voice of your customer with every interaction—and trust me, they will look forward to sharing it with you. Every member of your marketing and executive team should review customer feedback on a regular basis— ideally weekly—in order to gain strategic insight into what your customers are saying about your brand. Build a customer-centric corporate culture Do you truly empower employees to act as champions for your customers, or is customer-centricity merely an afterthought? A customer-centric corporate culture must be embedded throughout the organization—not just in the contact center. Southwest Airlines is a company that empowers its employees to go the extra mile to ensure customer satisfaction—employees have been known to even give their own companion tickets to passengers they have never met before,

Does your front line have a true passion for your brand and what it stands for?

to ensure that they make it to their final destination. The result? 2009 was Southwest’s 37th consecutive year of profitability.

hit (extremely popular with the retailer’s target demographic) heard by everyone passing within 25 feet of the same brand’s retail outlet in the local mall.

Replace your call center agents with brand advocates Does your front line have a true passion for your brand and what it stands for? Your contact center is your front line—the first, and oftentimes only, contact that your customers have with your brand. In order to deliver upon your brand promise, your front line must have not only a clear understanding of, but authentic passion for, your brand. Passionate contact center agents are true advocates of your brand— both serving your customer’s immediate needs and leaving a lasting impression that will strengthen customer loyalty and truly differentiate your brand from that of your competitors.

Mix up your metrics Is your contact center being evaluated on metrics conducive to a positive brand experience? Often, contact centers measure success based on key performance indicators (KPI’s) such as average speed of answer,

It’s the little things that make a brand Do you think of the little things that give your customers a complete brand experience? If you spend hours debating the font used in your corporate email signature, take a few minutes to think about the little things that add up to really express your brand. Such as hold music. I recently called the toll-free number of a very trendy retailer in order to purchase some back-toschool clothing for my niece—and spent several minutes listening to smooth jazz while on hold. This was a very different musical experience than the latest Lady GaGa

provide the ultimate brand experience. For instance, if your agents are being measured—and potentially compensated— partially on average handle time (AHT), they are literally being rewarded for getting your customers off of the phone as quickly as they possibly can. Even if every call ends with “Is there anything else I can help you with?” they don’t really mean it. They want to end the call and move onto the next one. In contrast, there is a direct correlation between first contact resolution and overall customer satisfaction. A simple shift in focus from AHT to that of first contact resolution can dramatically shift the overall brand experience your contact center provides.

Memorable Customer Experiences Produce Memorable Results

average handle time, cost per contact, and first contact resolution. While these metrics are certainly indicative of a contact center functioning as a well-oiled machine, they aren’t necessarily those that are going to

It is hard to turn your customer service center into a branding powerhouse overnight, especially if you have historically looked at your contact center as a cost center, and not the strategic business unit that it can be. An enterprise-wide shift to a customer experience more in line with your brand promise, versus a customer experience more in line with a contact center that operates like a well-oiled machine can be a challenge, as this is a dramatic shift in mindset for many companies. However time and time again, a dedication to creating memorable customer experiences produces memorable results—just ask Southwest Airlines. L


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FEATURES

Dead-On: Grateful Dead Has Taught Us So Much About Customer Loyalty by Erin Raese, Loyalty 360

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ention the iconic band, The Grateful Dead, and most people think about peace, love and rock ‘n’ roll. What should also come to mind, however, is the band’s indisputable bestpractice lessons about building a base of devoted fans. Well before the advent of the Internet and viral marketing. The Dead were visionary geniuses in the way they built community and spearheaded the concept of social networking to create a solid base of loyal, devoted fans.

It’s all about the community

Marketers would be wise to create great content that is meaningful for an audience instead of being all about products and services.

We all want to feel a part of something, to connect with others that share common interests. And for the evangelic base of Grateful Dead Fans, known affectionately as “Deadheads,” being a part of the band’s familial community drives their emotional connection to the band. For these loyal fans, it’s not just about listening to the music, it’s about being part of the experience. For hours (even days) before Dead shows, fans would fill the parking lot dancing, celebrating and interacting with one another. Don’t know each others’ names? Doesn’t matter. Deadheads share an immediate and intimate bond through which friendships are born and memories are made. And through these experiences, fans’ devotion to The Dead intensifies. Because of this strong, dynamic community, The Dead has not only sold out shows even in the toughest of economic times, but they have achieved this primarily via word of mouth. There’s no need (and never has been one) to advertise a Grateful Dead concert. Once the Deadhead community hears about upcoming concerts, the news travels like wildfire (even before the Internet)—with shows typically being sold out in the matter of minutes. And for those fans unable to score that soughtafter ticket, no worries. Most will just head to the parking lot before the show to soak up that part of the experience.

Content is king People unfamiliar with the Dead’s “content marketing” value proposition may also wonder why the band has always allowed their fans to tape record their shows and then freely distribute these bootlegs.

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Unlike the vast majority of bands that banned recording at concerts, the Dead encouraged fans to tape and then distribute their legendary live shows. In fact, they didn’t just encourage fans to record their legendary live shows. The band proactively set up “taper sections” where fans’ equipment could be set up for the best sound quality. Their belief was simple (yet radical): If we give our music to 10 people, and they give it to 10 people who give it to 10 people and so on, soon everybody knows about us and our reputation and value as musicians, artists and creators are enhanced. What’s more, this broad, genuine exposure led to millions of people wanting to take part in The Grateful Dead concert experience. As new fans were drawn to the live shows, ticket sales increased and a key profit center for the band—merchandise sales—grew. At the core, this is what content marketing is all about: giving away something of value in order to drive the sale of something related. Selling studio albums (or even bootlegs recordings of the shows) was not the goal of the Dead’s business strategy. The holy grail of their marketing efforts was getting more people to experience the live show. With the explosion of social media we have seen this strategy become increasingly commonplace for musicians to do via MySpace, Facebook, YouTube, etc. But when The Dead adopted this approach they were light years ahead of their time. As Brian Halligan and David Meerman Scott pointed out in their book, “Marketing Lessons From The Grateful Dead,” marketers would be wise to create great content that is meaningful for an audience instead of being all about products and services. Business opportunities and sales results follow as a content strategy develops awareness, reach and trust. Sure, The Grateful Dead may prompt images of tie-dyed shirts and twirling dancers, but for the marketing community the band should also prompt images of sheer customer loyalty genius. Fifteen years after the death of Jerry Garcia, the Deadhead community remains strong and vibrant— thanks to seeds that were sown years before the social media explosion. L

Deliver only what matters the most: relevance

It’s all possible. And it starts here. Strengthen your marketing ROI with Precision Marketing solutions from InfoPrint. The cost of sending irrelevant messages is increasing. People aren’t just ignoring you anymore, they are opting out and disengaging from your brand. In fact, 54% of customers surveyed have ended a brand relationship as a result of poor communications1.

Learn how you can activate dormant or past customers, retain and engage current ones, and cross-sell and up-sell your best ones through Precision Marketing solutions from InfoPrint. Contact us today to learn more about our low-cost assessment and pilot programs, and see the ROI for yourself. Precision Marketing solutions from InfoPrint: Visit InfoPrint.com/PrecisionMarketing

Ricoh, InfoPrint, and the InfoPrint logo are trademarks or registered trademarks of Ricoh Co., Ltd, in Japan, the United States, and other countries, and are used under license from the trademark owner. InfoPrint Solutions and InfoPrint Solutions Company are tradenames of InfoPrint Solutions Company, LLC. 1http://www.outputlinks.com/html/news/infoprint_CMO_Council_012510.aspx

FEATURES

In-the-Moment Communications Loyalty Programs & Today’s Mobile Consumer by Bob Gold, Gold Mobile

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ave you ever thought about the way we think about loyalty? As marketers we spend much of our time trying to make people loyal to us, to our brand. When you really think about it, that’s not what loyalty is about. If we want someone to be loyal to us (like our spouse), we need to demonstrate loyalty first, right? Think about it, we have loyalty backward. As marketers we should be demonstrating loyalty to our customers not telling them to be loyal to us. It really is the retailer or brand who needs to be loyal to the customer and not the other way around. This simple, but subtle, reversal of a retention and loyalty mindset will produce a much higher ROI for your CRM and loyalty program spend. Anecdotally, this “reversal of approaches” is much more consistent with today’s consumer perceptions of their entitlements as demonstrated by the digital social media phenomena. For example, accepting a “Friend” is considered a right and privilege of the individual and people make that decision based on trust and credibility (consciously or sub-conscious-

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ly) of the requesting party. By deploying concrete actions that demonstrate your brand’s desire to truly understand an individual consumer before bombarding them with incentives, places you in the same category of what they truly want out of any friendship—a reciprocal and mutually beneficial relationship. The brand elevation to a real “friend” should derive a much higher return on investment. So, if we are willing to admit (even quietly to ourselves) that our loyalty solution design is backward, what is the core new strategy to become an integral part of a consumer’s mobile lifestyle? Let me introduce to you a new loyalty paradigm called “In-The-Moment”. After all, In-The-Moment is how people experience their life events; but how does your plastic loyalty card talk to your customer during their hectic day? Or when your customer wants to know their entitlements right then and there? You can increase spend and satisfaction by enabling your loyalty members to engage in a two-way digital dialogue

during their “moment-of-truth.” Mobile CRM platforms can be configured to read content and searches on the fly and react based on programmable and personalized business rules. The following represent specific In-The-Moment insights and tactics to transform your loyalty program to be better aligned with today’s mobile consumer. To our loyalty point above, who gives who points? Maybe the smartest loyalty program empowers the customer to rate the retailer/brand in various interactions by giving them loyalty points for aligning with their lifestyle? Isn’t that the ultimate motivator for all of us?—Where we can voice and rate others through our own “lens” and set of experiences. Let’s erase our old beliefs on the roles of the retailer and the customer in building a deep and intimate relationship. The involvement and empowerment of people will create a deeper

rocate with another person, community, or a brand the more they feel the ability to influence a situation. Plus you can reduce a lot of analysis time and costs if the consumer is telling you exactly what to do to get more business! Look for platforms that have automated survey creator and real-time feedback mechanisms.

Either Party Initiate Using GPS techniques on cell phones can work but they have many lurking emotional and real physical issues; by empowering your customer to find the deal she is looking for when she wants to engage is totally in line with how people communicate in their social media networks. For example, your analytics determine Mary should get a coupon for shoes this week, but she is now shopping for her brother’s birthday gift during her lunch break and has 30 minutes to complete a pur-

Think about it, we have loyalty backward. As marketers we should be demonstrating loyalty to our customers not telling them to be loyal to us. bond, increased trust, and earned credibility…leading directly to the cash register! This is a great example where you can apply In-the-Moment surveys that provide immediate feedback on how to capture their business—now.

Self Management We have heard of self-managed IRA accounts and holistic care programs where the individual has more control; What about “self-managed” loyalty programs (within certain rules and guidelines)? This can be an ideal framework for today’s consumer and is now practical given the advances in mobile technology and tools. •Self management means that emotionally it becomes “their” loyalty program and with that comes pride of ownership. They will have renewed interest in sharing and wanting it to succeed—sub-consciously they will perform actions to achieve greater rewards. It just makes sense. Moreover, in today’s connected world where it is so easy to comparison shop, you need an extra level of emotional bond to your loyalty program, so why not let the customer provide it themselves! Look for platforms that provide preference-based opt-ins and management enabling consumers to only receive their selected categories of content and offers.

Influence Many people feel special when you ask their opinion—now there are easy and cost effective mobile surveys and feedback techniques (with incentives for participation)…so ask away! •Behavioral science shows more people identify and recip-

chase and wants to know the men’s special offer items based on her loyalty status. •The answer is to construct a loyalty communications system that enables the member to initiate the communications on their terms—it is not just about the weekly email/ mail or website communications.

AHA Moment For your customers, how do you create a sudden “insight” that motivates a purchase? Insights typically result in a new cognitive interpretation of a situation that point people to a solution to a problem (since you want the consumer to reach the “right” conclusion—right then and there). One simple answer is Comedy/Fun: Behavioral scientific research has shown when people are in a positive mood they are more receptive to being insightful and solving problems. Mobile is a great way to stimulate that “AHA Moment” by creating a multimedia “coupon” or special offer that delivers both smiles and financial incentives to increase conversion and redemption. •The overarching tenet is to have a platform that can provide you and your agency with the ‘Freedom to Create” by enabling campaigns to mix and match video, images, text, 2D barcodes, and voice in the consumer engagement experience. In summary, we’re now in a world of consumers who are socialized for instant access and gratification. Technology and access to information has exceeded what the human mind can truly absorb and act on. Retailers and brands that successfully deliver “in-the-moment” contextually relevant lifestyle communications will elevate their image and win both mindshare and dollar share. L


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Mobile Marketing: Top 10 Technology Strategies All Marketers Must Know by Robert Carroll, SDL

T

he mobile channel is playing an increasingly strategic role in marketing. According to industry analysts at Gartner, worldwide sales of mobile devices were up nearly 14 percent in the second quarter of 2010 over the previous year. Sales of smartphones are booming despite the lackluster economy. To address the challenges associated with this growing market, companies have to take a hard look at their technology strategies, not only their business ones. It used to be that marketers’ only had to worry about adjusting their companies’ website format to fit mobile devices. But now companies need to figure out how to incorporate geo-targeting, profiling, and time and location-based marketing to better support and engage their customers, anytime and anywhere. Smart and forward-looking marketers are already leveraging a new breed of marketing technology platform to engage the mobile channel. For example, more than two dozen international airports are already engaging mobile customers in ways never thought possible. We all know that the travel experience can be burdensome and irritating, but the services supported by this new type of marketing platform can make the time spent at an airport pleasurable and stimulating. The Denver International Airport, for example, recently rolled out a new mobile phone app, web site and digital signage. All of these marketing channels use geo-location marketing to allow concessionaires, advertisers and others to provide travelers with relevant content and real-time, personalized prompts on their mobile devices as they move through the airport. Travelers waiting for a flight can also reap benefits while killing time at a shopping concourse or food court. Based on their profile,

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location, time of day, and user-generated ratings and reviews, travelers can now receive high-value targeted promotions and coupons. Once they are ready to depart, those same travelers receive weather information and discount coupons valid for their destination city. The ability to identify and message to such a highly convertible consumer in real-time is new to the industry, but airports and concessionaires are already seeing the ability to offer the best customer service and build loyalty among travelers.

How It’s Done All of us know that to empower marketers to create, deliver and manage truly personal and valuable Web engagements requires a new breed of multi-channel communications and marketing platform. A ‘one-site-fits-all’ website won’t cut it. What’s more, the mobile channel should be integrated into all of your systems in a uniform fashion. The goal is to have customers enjoy the same consistent, branded experience, whether they’re engaging via a desktop, laptop, smartphone or even the company-managed online tech center or community forum. These days, even marketers must have a basic understanding of mobile technology requirements to ensure their success. Here are the Top 10 technology issues that marketers should keep in mind when choosing a technical platform for their mobile channel: 1. Look closely at your current architecture to ensure it can support all your possible use case scenarios, now and in the future. The design of your Content Management System (CMS) should involve all needs, including those around governance, localization, device type, and communication. You can minimize the potential for disparate systems by ensuring robust read-and-write functionality to all deployed back-office systems. 2. A CMS that is components-based is ideal for supporting the mobile channel. Web page components such as content, digital assets or applications can be easily repurposed within channel-specific templates, dramatically reducing the complexity of managing content and release processes. 3. Localization, localization, localization! The global marketplace demands that a CMS enable companies to create language variants easily, and manage the translation process and regional go-to-market strategies. However, you have to consider how content variants will individually address the limited screen space of a mobile device. Being able to create customer-experience variants delivered specifically for devices with different form factors will help companies gain huge cost savings, management efficiencies, and time-to-market velocity. 4. Companies want to be able to repurpose content from a single source to all of their channels. The CMS can enable companies to do this easily by separating content and application components from the presentation layer. The marketer need only follow the rules that apply to the specific channel. For the mobile channel, you also need to address presentation technologies that vary per device, network and operating system.

5. Size does matter! At a minimum, a CMS should offer templates that ensure proper component re-sizing, and pre-sized assets to be uploaded and approved within your workflow before they can be used for a specific channel. 6. The best CMS user interface is browser-agnostic. Most content authors and approvers typically work at a standard

Smart and forward-looking marketers are already leveraging a new breed of marketing technology platform to engage the mobile channel. workstation, but designers, developers and managers of the mobile channel often work with different kinds of technologies. 7. Customer engagement can vary greatly based on the device in use, so companies have to plan for the full spectrum of devices used to browse the mobile Web. It is essential to capture device specifics such as type of browser, screen resolution, javascript/cookies enabled, etc., before serving back the requested content. At the time of the request, the device/browser identifies itself, allowing the CMS to read its specifics from a database and render the appropriate device experience. 8. Publishing models vary depending on the company and its objectives. A CMS that renders and publishes static mobile pages seems good enough if a company needs only a limited mobile strategy, delivering a finite set of transactions. But considering how quickly the customer experience is changing, will that be enough? Can your CMS support dynamic or even hybrid publishing scenarios? Your CMS should build pages dynamically based on login, personalization and/or referrals, to deliver both a personalized experience but also one relevant to multiple audiences. 9. The CMS should let users preview the mobile channel content in a multitude of renderings, typically in a low, medium and full experience view. Not only does preview functionality support the content author, it also has added workflow benefits for content approvers by showing content rendered specifically for a channel. 10. A mobile site may not be enough. Marketers may want to allow content to be published and displayed in an “app,” or to a location from where it can be packed using the appropriate SDK (Software Development Kit). Throughout this process, your CMS should track usage by creating a content audit trail, and deploy updates to all needed locations. Knowledge is power. By understanding these top technology issues, marketers can better deploy powerful functionality to their mobile marketing channel—archive management/compliancy, login/security, personalization and profiling, among others. Not only will they effectively enhance the customer experience, but also deepen engagements, build brand value and increase the lifetime value of every customer. L


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Loyalty in a Fickle Age by Render Dahiya, Arroweye Solutions

O

n the surface, there is something inherently futile about being a loyalty marketer in an era when consumers are increasingly empowered to waver. It’s never been easier for them to change habits, shift allegiances—or to find information or messages encouraging them to do so. So what’s someone selling loyalty in a fickle age to do? The answer, paradoxically, is to embrace the trend by tailoring your programs toward the ever-wavering set. You know the type: They want what they want, when they want it, built to spec and online. If you can deliver what they’re asking for,

At Arroweye, we’re in the business of enabling our clients to build a loyal customer base—helping plug the “how” into the loyalty equation in an innovative way. We’ve had many conversations with program managers whose sole job is to build affinity through their card programs. From their perspective, loyalty brings increased card usage, client retention and deeper connections. How to get there, well, it’s a customized approach. Increasingly, program managers are moving to on-demand card manufacturing technology to help build their prepaid loyalty programs. They’re doing so because of the flexibility the technology affords. In order to be relevant to the individual customer, businesses need to have the right tools to respond to market segments in an instant. The digital on-demand “tool-

The one-size-fits-whoever-signs-up card seems increasingly oldfashioned in an era where consumers can go online and design their own playlists, shoes and beer. you’ve got a better chance at connecting with today’s customer. And many of the world’s savviest marketers are expanding their offerings to do exactly that. By now, everyone is familiar with how Apple’s iTunes turned the music industry’s album model on its head. But did you know that the online shoe-customizing service Nike introduced in 2006 already does more than $100 million in annual revenue? Even brewers are getting in on the act. Heineken started letting consumers customize their own beer bottles online last year. Apple, Nike and Heineken were all moving to address the needs of these customers, and loyalty marketers who don’t do the same are ignoring this trend at their peril. The one-sizefits-whoever-signs-up card seems increasingly old-fashioned in an era where consumers can go online and design their own playlists, shoes and beer. If customers accustomed to that level of choice are buying a gift card—or even shopping for a Visa—do you think they’re going to opt for a card you designed, or the one they did? Are they going to respond better to a card that comes in a generic mailer, or one that comes in a carrier that is clearly targeted to their interests?

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box,” so to speak, allows card programs to: •Stand Out in a Crowd – Differentiation is a huge selling point. Mass production is a thing of the past, as evidenced by the rise in on-demand. Unique product offerings and the ability to change designs and dynamically print carriers help marketers attain a competitive advantage. •Issue Rewards with Ease and Speed – Simply put, an ondemand model will help get your cards in the hands of the end-customer more quickly and allow you to seamlessly manage the front-end process without the headache. •Cut Program Costs – Forecasting a card program can be costly from an inventory perspective if you miss the mark. Digital on-demand produces the cards you need at the moment they’re needed. •Provide a Better Brand Experience – Companies know how essential it is to send the right message all the way through to the rewards. Being able to appeal to niche markets and tie in offers visually through a card and its packaging is a meaningful tactic to boost brand association. The possibilities with digital on-demand can be endless. And the deeper connections established as a result can as well. Loyalty is personal, after all, and the marketers who take this to heart will be the ones standing out in a crowd. L


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Loyalty Innovation PRODUCTS, ADVANCEMENTS, & TECHNOLOGIES

SocialTwist

In today’s competitive market, savvy brands are using social media to help boost customer satisfaction

and increase customer loyalty. SocialTwist, www.socialtwist.com, which enables marketers to turn social media into social marketing, has helped major brands such as Barnes & Noble and Jamba produce a highly valuable ROI, cementing relationship ties with customers. SocialTwist harnesses the power of referrals—a key driver in consumer purchase decisions—to help marketers connect in a measurable way. SocialTwist’s flagship Tell-a-Friend (TAF) suite of services pro-

SocialTwist relies on the fact that no algorithm can match human filtering, because a friend knows the interests and purchasing patterns of his other friends. mote highly viral—and trusted—word-of-mouth marketing campaigns online by combining marketing messages, the power of referrals and the social platforms customers use most, from email to the most popular social networks. While traditional sharing products are simple URL link pass-alongs more focused on data mining and behavioral targeting ads that capture user preferences and their shared data, SocialTwist relies on the fact that no algorithm can match human filtering, because a friend knows the interests and purchasing patterns of his or her other friends. TAF lets savvy marketers leverage their users’ influence on their friends and spread their product message while protecting consumer data privacy and maintaining the three-way trust relationship between the brand, its users and their referred friends. TAF’s ability to improve click-through to sites, generate new revenue and promote virality is proven and measurable. SocialTwist has serviced over 73,000 publishers and garnered over 4.5 billion impressions.

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Square

Accept Payments. Everywhere. Square, an application that works with a physical reader that enables cash and card payments on any device with and audio input jack, including your mobile phone, helps you build your business in real-time. Take payments, see how much you’ve made for the day, browse all of your receipts, set up virtual shelves on the iPad. Square is focused on providing the best payment experience in the world, and that includes cost. While taking cash is always free and easy, accepting cards can be confusing and costly. That’s why Square has simple pricing and no hidden fees, monthly charges, or contracts. Square is constantly working with their partners to simplify and lower costs associated with accepting card payments. While the payment abilities add ease and mobility to business operations, the behindthe-scenes functionality of Square is practical and efficient. Your receipts are sent to your email, and through the application, you can see all of them in one simple view. You can browse through photos of every item you bought and share them with your friends, as well as set up “shelves” of your products, complete with names, prices, pictures and descriptions when you use an iPad. Square automatically builds your own mobile store.

YOUR LOYALTY STRATEGY ROI IS . AND IF IT DOESN’T IMPROVE, YOUR CEO WILL . It’s not a question. It’s a decision. If you want to maximize the value of customer relationships and the ROI of your loyalty efforts with certainty, FILL IN THE BLANKS.

1.888.3ACXIOM www.acxiom.com/customerloyalty

BEST BUSINESS PRACTICES

Implementing and Measuring a Customer Centricity Framework by Carlos Dunlap, Kobie Marketing

Learn to develop an internal framework dedicated to enhancing the overall customer experience while increasing customer retention and sales Delivering Superior Customer Experiences Without a framework to create, continuously evolve, and ensure a unified customer experience, a company’s best intentions in marketing, reward programs, and customer service can actually have a negative impact. It has been estimated that poor customer experiences undermine these investments and cost companies up to $100-billion annually in lost purchases and defections to the competition. The key to successfully managing a customer experience initiative is the deliberate development of a Customer Centric framework. Customer Centricity has been defined as “An approach to doing business in which a company focuses on creating a positive and consistent consumer experience at the point of sale, through the call center, online and via all communications, including mobile, email and print. A Customer Centric framework requires connectivity across every channel of the organization, allowing the consistent delivery of the most appropriate level of service, benefits, and customer care to each segment of the customer base. Each channel should have customer collaboration as its prima-

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ry focal point. This involves establishing direct accountability for the customer experience, as well as responsibility for communicating the latest innovations, trends, data, and relevant industry news at constant and expanding levels. A positive customer experience translates into greater customer loyalty. Forrester Research, in Customer Experience Boosts Revenue (June 22, 2009), has shown a high correlation between customer experience and three key elements of loyal behavior: willingness to buy more, reluctance to switch, and likelihood to recommend. All members of the organization must be committed to delivering a superior customer experience. Is your organization ready to deliver it? Do you want to know where you are and how far you have to go to be customer centric? You may be further along the continuum than you realize. Kobie Marketing has developed the Customer Centricity Quotient – a tool to help companies identify functional areas of customer experience excellence and improvement across Marketing, IT, Analytics, and Strategy. This diagnostic tool is following. How does your organization rate?

In order to gauge how your organization scores versus industry benchmarks in each of these areas, we encourage you to take a short Benchmark Assessment. By scoring your organization on a 1 to 5 bases across these various areas, you will identify areas which may need more concentration and could be holding back your overall strategies for building a more Customer Centric company.

Assess where you see your organization in each key area: 5: Agree Completely 4: Agree Somewhat 3: Neither Agree nor Disagree 2: Disagree Somewhat 1: Disagree Completely

1. Organizational Readiness

3. IT Support

We have executive sponsorship to ensure commitment from key stakeholders.

Our IT department is integrated into our key marketing efforts with dedicated staff.

Success metrics have been identified in order to gauge milestone achievements and overall results.

We invest in appropriate hardware, software and resources to support better understanding of our customers and delivery of our products/services.

Our departments are aware, trained and tightly aligned to deliver a consistent experience in the moments that matter. Each employee has a measurable customer experience objective that is measured and reviewed quarterly (or more frequently). Enter Category Points: Please rate your capabilities based on your performance in each area category Max 20 points

2. Data

We have access to user-friendly GUI tools that allow program managers to efficiently access information. Our company’s IT department supplies tools that allow all customer facing employees to have insights into customer value and past behaviors in the moments that matter. Enter Category Points: Please rate your capabilities based on your performance in each area category Max 20 points

4. Analytics Team

Our company has and can access at least 18 months of transaction data and can tie behaviors to unique customers. We have customer demographic/ profile/lifestyle data that is linked to individual customers. Our company has conducted primary research to measure customer attitudes and better understand their needs. We have customer experience metrics in place, routinely monitor progress and periodically enhance the process. Enter Category Points: Please rate your capabilities based on your performance in each area category Max 20 points

We have a business intelligence/ analytics department to focus on customer insights. Our company uses a standard process to develop analytical products to deliver insights and segmentation. We track marketing program and campaign results for ongoing reporting, success measurement and enhancements of the overall customer experience strategy and the campaigns. Our marketing, program and attitudinal data are integrated into the customer transactional data for more comprehensive value analyses and segmentation. Enter Category Points: Please rate your capabilities based on your performance in each area category Max 20 points

continued on next page » Loyalty Management™ •NOVEMBER 2010

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Implementing and Measuring a Customer Centricity Framework (continued) 5. Marketing/Comunication Team

7.Execution/Fulfillment Readiness

Our company routinely projects campaign results and identifies success metrics, prior to implementation.

Customers have access to live employees within minutes of their request. Appropriate application of services/benefits are applied to the appropriate segments of customers.

Before we initiate customer campaigns and programs, we first internally communicate program and campaign objectives to ensure employee understanding and participation.

Customer feedback/responses are incorporated into the operational plan to improve the customer experience.

Our customer promotions and marketing campaigns are targeted and personalized. We ensure our marketing messages and offers are consistent across all channels. Enter Category Points: Please rate your capabilities based on your performance in each area category Max 20 points

6. Voice of the Customer

Consistent delivery of communications/rewards is applied to deliver on the organization’s promise. Enter Category Points: Please rate your capabilities based on your performance in each area category Max 20 points

Cumulative Score:

We have a mechanism in place to consistently obtain feedback from our customers.

Max score is 140

Our company makes a consistent effort to promote 2-way dialogue in all campaigns and all channels. Customer feedback is captured and incorporated into the marketing database and customer profiles. We have a clear understanding of customer desires and satisfaction. Enter Category Points: Please rate your capabilities based on your performance in each area category Max 20 points

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Category Preparedness

Customer Centricity Levels

Excellent

19+

135+

Culturization - ingrained in corporate culture

Good

16 to 18

110 to 134

Actualization - strong levels of execution

Average

12 to 15

90 to 109

Assimilation - overlaying/testing ideas

Poor

8 to 11

70 - 89

Inquisition - discovering ways to engage customer

Need help

<8

< 70

Comprehension - identifying need


Helpful Tips: If you find yourself in “Poor to Needs Help” •Tackle the challenge with “Baby Steps.” Setting several easy-to-accomplish goals will help your organization build the momentum it needs to become more customer centric. •Take the initiative to organize a cross functional team to better understand the situation. Remember: It’s not a problem that belongs to any single department, nor will the solution arise from a single point of view. •Put your thoughts on paper and present them to management. Make sure you’ve properly documented the situation, as well as identified potential solutions and associated benefits. •Talk with Operations and Technology to better understand the touch points, areas of opportunities and realistic solutions from those on the front line who interact with your customers.

If your score indicates your organization is “average” on the Customer Centricity continuum, then: •You are better than many and yet have plenty of opportunity for improvement. •There is a customer centric foundation within your organization, so you don’t have to start from the ground floor. •Usually, the way to improve is through execution. The best strategies fall short due to poor delivery of the promise to the customers. •Look at your touch points—e.g. in store, at the register, call center reps and others who directly impact the customer experience. •Remember: Your brand is not what you say it is, but instead what your customers believe.

For those of you in the “Good to Excellent” ranges Life is good…and therefore, business should be as well. However, don’t take your results for granted: •Continue to look for areas of improvement and growth. As good as you are, you can always be better. Note: being better doesn’t necessarily mean throwing more money at the situation. All decisions should be based on projected financial returns. •Don’t cut back on your services and benefits. Incremental profits can be derived from efficiency gains, instead of decreasing benefits. The best way to find those efficiencies is by asking those who are entrusted with delivering the customer experience—the front line. This should be a process solution, not a line item reduction on the balance sheet. L


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Customer Data: The Essential Element of Your Enterprise Voice of the Customer Program by Annette Gleneicki, Allegiance

Every company wants to make measuring customer satisfaction and loyalty a top priority. They all talk

about it; most of them do it. But are they doing it right? To help answer that question, this article provides an overview of just one of the very elements of a successful, enterprise-wide Voice of the Customer (VOC) program: customer data—both survey and non-survey. Types of Customer Data Customer feedback comes in many forms, all of which can be categorized as either structured or unstructured. Structured feedback comes from customers who receive a survey and answer the questions posed within that survey. Examples of unstructured feedback include customer posts to a blog, Facebook, Twitter, or elsewhere that your company has not solicited or prompted.

Structured Feedback Until recently, structured feedback was the main way that companies could hear from their customers about their experiences. Sure, customers could write letters or emails or drop a card in a suggestion box. But let’s be real here. Those were all just “cosmetic” and “feel good.” Customers knew they had an outlet, but did companies really care about that feedback, respond to it, or change processes because of it? Probably not. What follows is the various types of structured feedback, including what they are and what their place is in the overall VOC initiative. We won’t address every possible form of structured feedback, but we’ll hit the big ones that should be part of any VOC effort. Relationship Surveys Relationship surveys are conducted to get a point-intime read on customer satisfaction, loyalty, and engagement and provide high-level perceptions of your company. These surveys are conducted quarterly, semi-annually, or annually and contain questions that span the customer experience with various departments or touchpoints. These surveys tend to be longer, sometimes 50 questions or

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more, although the actual number of questions seen by the respondent may be much less due to skips and branching (as a result of questions asked or what’s in the customer file that can be linked to the survey on the backend). Relationship surveys complement or supplement transactional surveys; they can often identify areas where you might require further drilldown through transactional surveys. Relationship surveys can also serve another purpose: they can help identify issues or preview your customers’ likelihood to renew a contract. For this particular purpose, the survey is served up once a year. Competitive Surveys When designing a VOC initiative, avoid viewing insights about your company in a vacuum. Having an understanding of your placement in the marketplace relative to your competitors by identifying your customers’ consideration sets and competitive perceptions, combined with the measurement of their relationship with you, is quite powerful. Two different approaches can be taken to collect competitive insights, including: (1) asking your customers to evaluate competitors they have done business with by asking a similar, but often limited set of questions they answered about your company, or (2) conducting a blind competitive survey among your target audience. The latter, which is the preferred and more-robust (yet more-expensive) approach, typically entails renting a list of names from a list or panel provider, asking respondents to identify companies they have worked with, and then having them evaluate their experiences with each of them (or some subset of them).

Understand your placement in the marketplace relative to your competitors Transactional Surveys Transactional surveys are also known as post-event surveys, a phrase that clearly defines the scope as after some event or interaction has occurred. The customer is surveyed about his experience with the company during that specific interaction. Examples of transactional surveys along the customer lifecycle include win/loss, purchase experience, support, training, fulfillment, and churn. Transactional surveys are, by nature, extremely actionable and present service-recovery opportunities for which the organization must be prepared to take advantage. The feedback received can be used to make both tactical and strategic improvements. The surveys are typically brief, perhaps 10-20 questions if not fewer, and are designed to measure the customer experience with a particular touchpoint. The surveys only contain questions that are specific to the transaction in question and should not veer off into other directions or bring in other topics. Brand/Marketing Surveys Relationship and transactional surveys are meant to focus on customer satisfaction with the experience. Brand research and customer satisfaction/experience research should be a coordinated effort to (a) limit respondent fatigue from the surveying perspective and (b) coordinate questions, analysis, and follow-up on the backend. Advisory Board Surveys In a B2B environment, Customer Advisory Boards (CAB) typically consist of a small number of executives who represent the 20% of customers who account for 80% of your revenues. CABs are a great way to engage your customers, to show them some love (and get loyalty in return), and to allow them to help drive the direction of product development, customer experience, and more. Listening Labs Listening Labs are an effective way to receive input from customers about their experiences and actions with your organization throughout the customer lifecycle.

Unstructured Feedback Unstructured feedback is unsolicited. It comes in many forms, including social media, online forums and communities, blogs, “Contact Us” pages, and letters or emails to the company. Customers want to share their experiences with other customers and do so in whatever forum is available. This feedback is just as valuable as structured feedback.

Using the Internet, your customers are free to share product reviews and their experiences with you and with anyone who wants to listen—in a very public format, 24 hours a day. Blogs, Twitter, Facebook, online forums and communities, websites, etc. create a lot of data that you need to pull together and manage in one place. For you, the challenges are to: (a) find a way to harness all of this data; and then (b) put someone in charge of analyzing/gleaning insights from it and acting on it—right alongside of (or in conjunction with) your structured feedback.

Non-Survey Metrics and Data Non-survey customer data and metrics are a solid component of any VOC initiative, as they tie actual, behavioral data to the attitudinal data from your structured and unstructured feedback. Non-survey data may come in the form of variables such as demographics, purchase information, purchase behavior, etc., included with your customer list (used to send survey invitations), or they can be financial data, such as profitability, total revenue, lifetime value, attrition, etc., used to segment and analyze the data later. Incorporating these data into your VOC strategy will allow you to get the full picture of individual customers, target customer segments, or your entire customer population.

Conclusion And Next Steps There are many inputs to consider for your VOC initiative. The next step is to consider how to pull them all together, push them out into the organization, and operationalize, respond to, and analyze them to improve your business processes and deliver a superior customer experience. Briefly, You’ll Need To: •Disseminate: Get the data into the hands of the appropriate department(s). •Respond: If your customers take the time to post feedback, someone ought to take the time to respond to them. There’s an opportunity for service recovery here—don’t miss it—as well as an opportunity to show that you care—to hundreds of thousands of people who read that same blog, Tweet, etc. •Analyze: Mine the data, segment your customers, and identify areas on which to focus and areas to maintain. •Operationalize: Once you’ve analyzed the feedback, operationalize it—act on it, whether that’s a tactical approach or strategic action planning and process improvements—and incorporate it into your daily business processes. Utilizing a VOC solution you can collect, disseminate, analyze, and act on your data all in one place. L


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Closing the 21st Century Service Capability Gap by Christoph Goldenstern, Kepner-Tregoe

T

he natural affinity of technology service organizations towards software and technical training as the predominant solutions to their service challenges leaves them with a widening gap between customer expectations and actual service capability.

The changing service landscape With the ongoing commoditization of products driven through globalization and the omnipresence of the internet, the pressure is more than ever on the service business to come to the rescue. Not only to provide additional sources for revenue growth and defending sliding product margins, but as a way to provide a level of differentiation from other technology providers by establishing an intimate relationship with the customer that goes over and above the product functionality. This value-added service approach has to go beyond the traditional “break-fix” model of technical product support to provide true customer service, i.e. supporting the business of the customer. Furthermore, Customer Service needs to be able to support the rapid evolution of converging technologies— the CEO of Nokia once called this “the clash of IT and Telecom”. The resulting, steadily increasing complexity of technology leaves service organizations with a widening gap between the capability of the technology they are supporting and service engineers’ understanding of it, which can no longer be bridged through purely product training—the speed of technological innovation is simply too high.

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The Service Capability Gap Automation strategies are failing in a an increasingly complex world. With the above market trends, many service organizations have shifted their focus increasingly towards customer satisfaction as a key metric and managing the Total Customer Experience. Yet, most service organizations’ investments in the last 10 years have been made into CRM (Client Relationship Management) systems and self-service tools, trying to automate the customer service process for mostly efficiency reasons. The result? According to the American Customer Satisfaction Index, many organizations have at best stagnated in customer satisfaction performance while in some industries, like Personal Computers, customer satisfaction has plummeted by an average of 3.8% since 1995. These outcomes suggest that a change in strategy is required. While service executives universally agree that customer satisfaction is a strategic goal of any service business, as it represents a key driver of customer retention, they often fail to analyze what the major drivers of satisfaction are in their business when it comes to resolving complex customer issues. KM (Knowledge Management) systems and online support tools have helped to push more support to the web and resolving simple and known problems faster, but they only go so far in a world where the complexity of technology is continuously increasing, which in turn drives up the percentage of complex incidents faced by a service organization.

It’s about the relationship stupid! Service is about relationships and relationships are ultimately about human interactions. When looking at what truly drives customer satisfaction in a business, we suggest taking a random, “post-mortem” sample of customer cases and comparing “good cases” (high customer satisfaction) with “bad cases” (low customer satisfaction). You will quickly find out that there is a pattern to what behaviors drive a positive versus a negative customer experience in your business. While quality and speed of resolution are generally good predictors of customer satisfaction, the real question is what constitutes quality in the eye of the customer and what is the perceived speed of resolution, given the nature and complexity of customer issues they experience. Setting the context for closing the gap by defining the Service Strategy Another contributing factor to the widening Service Capability Gap is the general lack of direction and priority setting in service businesses on how to close the gap in critical areas of the business. This often stems from a lack of strategic clarity around the service portfolio that is being provided and the missing segmentation of different customer types and their needs. The three major sources of service gaps: Process, People, Performance System Critical Customer Service is ultimately delivered through People as part of a Process. Problems are solved by people and relationships are created by people, not software! However, software can play a critical role as an enabler to make this process as efficient as possible by helping to capture, store and retrieve the information in the way you want your service engineers to think, engage with customers and create knowledge! If the design of the software is not modeled after the service work flow—which it is supposed to enable—service engineers will soon find creative ways to minimize their need to use the system or circumvent it completely in order to reduce, what they would consider, bureaucratic, non-value-added work. We suggest that service organizations need to focus on two basic performance outputs: •Providing a high-quality customer experience •Providing a consistent customer experience Both of the above are primarily behavior driven and therefore require a renewed focus on “the human service interface”, which is largely driven by service processes, the skills of service engineers and their performance system.

tion’s performance environment and links them back with the service strategy and its performance goals. Without effective service process management, investments into people and software happen in a vacuum and without a clear link to the strategic goals of the service business.

People Two major factors will further widen the service capability gap: the speed of innovation and the convergence of technologies. The underlying complexity of networked hardware and software cannot be coped with by sheer technical product training of service engineers. Consequently, service businesses need to recalibrate their training efforts towards critical thinking skills that are independent of the technologies or products in order to bridge the service capability gap. Service organizations will only be able to provide a consistent customer service experience to their customers if they develop the ability to partially decouple their service engineers’ level of service provision capability from the level of technical knowledge, i.e. they need to reduce their dependence on product knowledge.

Critical Customer Service is ultimately delivered through People as part of a Process. Problems are solved by people and relationships are created by people, not software!

Processes Services Processes are about “how work gets done” in a service business, i.e. how the service is actually being delivered to customers. The service process design informs the quality and quantity of the service resources required in terms of people, tools and the organiza-

Performance System

The reality is that the service industry has developed an obsession with measurement. That’s not per se a bad thing. However, if we measure the wrong things and make them part of the service engineers’ performance system, the results can be disastrous because we are driving the entirely wrong behaviors. The Harvard Business study “Goals Gone Wild” pointed to the negative side-effects of overprescribed goal-setting. We typically find two major shortfalls with measurement systems: •Too much focus on quantitative vs. qualitative metrics •Too much focus on lagging vs. leading indicators Clearly, the performance system is about more than just how we measure performance and provide rewards to service engineers, but is much more about what we do to actively influence behaviors to align with the organizational goals. Where do we go from here? Reducing the Service Capability gap will require a new type of thinking, away from blindly investing into tools and measurement systems towards understanding what truly drives a repeatable, high-quality customer service experience and efficiency in how services are being delivered. If we can get it right, the price to be won will be worth the effort: customers that not only are loyal to our business, but that act as willing apostles for our products and services. It is then that customer service will become a genuine competitive advantage and a driver of future revenue and profits. L Loyalty Management™ •NOVEMBER 2010

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You and What Army? by Kelly Passey, Access Development

Marshaling the Troops toward Merchant Adoption of POS Mobile Commerce Some of the biggest names in next-generation payment technology have been unable to bring about merchant POS retooling— perhaps the humble coupon can finally spark the revolution.

S

Smart Card fought bravely. Contactless Card launched a full-scale assault. Yet we consumers still are rung up with 20th century payment technology at almost every merchant point of sale. If these, the biggest initiatives by some of the biggest players in the industry, have failed to get brick-and-mortar merchants to adopt the new terminals that promised to bring us into this millennium, is there any hope for m-commerce—passing the register with a single wave of the handset? Today, many believe that using mobile phones to pay for purchases is the new promised land—but the proven reluctance on behalf of the merchants begs the question: will you be swiping your cell at checkout anytime soon? For merchants, it is a simple cost-benefit equation. The C-Suite folks have yet to be convinced that new pointof-sale technology will bring new customers, larger purchases, or more frequent visits. If the same people will continue to make the same purchases regardless of how

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they pay, why buy shiny new point of sale (POS) payment systems? For now, the risk outweighs the unproven profit potential. It will take more than industry and consumer anticipation to get the merchants’ budgetary walls to start tumbling down. For those of us anxious to see mcommerce become a reality, there is hope in a time-tested, classic strategy that has been boosting merchant bottom lines for years: the trusty coupon. This well-worn tactic may be just the right weapon in this high-tech battle for the hearts and minds of the merchant decision makers. From the humble beginnings of S&H green stamps over 100 years ago, merchants, retailers, restaurants and all the rest, have used deals and discounts to drive consumer engagement at the POS to generate foot traffic and sales. Yet, in its digital, mobile form—where the phone is shown, scanned or waved at the point of sale— the age-old coupon now has the power to show merchants how a mobile-friendly POS can effectively drive even higher traffic and spending levels—a potentially potent gateway drug into a true m-commerce world.

It will soon become very clear that the mobile phone not only can serve as a powerful sales generation vehicle, but also a payment vehicle that can deliver a stronger ROI. Merchants already understand that consumers want, even expect, a deal or discount before making a buying decision. Especially in recent years, they have seen an increase in the power of

the old-school coupon as usage has expanded across all income levels. One recent report documented this substantial increase in coupon use specifically in higher income households, showing 38% of “super heavy” users and 41% of “enthusiasts” coming from households with incomes $70K+ (Nielsen Company Report). Incidentally, this also represents the dominant demographic of heavy mobile phone enthusiasts—and that is what many merchants may not yet fully understand. Yes, consumers love a deal, but with each passing day those same consumers are coming to expect that deal to be delivered to their mobile handset. In fact, one study earlier this year surveyed 4,534 shoppers ages 18-65 in late 2009 and found that a stunning 39% of consumers were willing to abandon their purchase if they could not obtain coupons or discounts via their mobile device—an average lost sale of $109. Additionally, the study found that majority of those abandoned purchases could have been recovered (54% electronic retailers, 46% retailers/clothiers, and 42% auto parts/stores) if coupons or discounts were more readily available, both for brick-and-mortar and online retailers. (Source: Motorola with e-Rewards and TNS International, January 2010.) Not every merchant is behind this curve. Early adopters include brands like Kroger and Target, which have both begun issuing mobile coupons that can be downloaded and scanned against purchases at their store. Overseas, where mobile payment platforms are more fully evolved, McDonald’s is testing the ability to download a coupon and then wave the phone over a reader at the register to receive a discounted price. JCPenney has begun testing a similar program using a special Motorola image scanner. And, traditional mobile banking companies like Qualcomm’s Firethorn are teasing it up a new mobile product called SWAGG that partners with many national and local merchants. While many other merchants and restaurants have simply chosen to honor patrons who wish to hold up their smart phone at the regis-

ter rather than print out that coupon at home from the website or email inbox. A ‘Show Your Phone’ solution similar to the ‘Show your Card’ discount card utilized by AAA and others. As more merchants venture into testing, the results are starting to make the case. IHOP recently began to see higher response rates from mobile couponing and SMS text-based offers. Shakey’s Pizza has reported better than 10% redemption rates with mobile couponing—and the evidence continues to pour in. Armed only with what we know today, retailers can make a strong business case to invest in the terminals and readers necessary to support m-commerce. It seems evident that this new channel can better tap into the needs of on-the-go customers, bridging the gap with more usage and engagement at the point of sale. We already know coupons effectively deliver more new, frequent, and larger purchases. Now, merchants have an unprecedented opportunity to merge this proven sales incentive with the ease-of-use and ubiquitous nature of the mobile device to bring even greater returns. Still we wait—the merchant is in control. When it comes to making costly infrastructure upgrades, buzz and technophilia won’t make the case— only actual spending patterns driven by less-costly mobile-based campaigns will. However, if mobile couponing has increasing success, more viable tests are conducted and results are carefully tallied, we could have a winning catalyst to help us towards the future of on-the-go transactions. It will soon become very clear that the mobile phone not only can serve as a powerful sales generation vehicle, but also a payment vehicle that can deliver a stronger ROI. The original idea of a ‘smart card’ with the micro-processor/chip that could help you manage all of your accounts has been swallowed up in the multi-faceted wonder of the eversmarter mobile phone. But the winning technology that may lead us to true m-commerce victory may very well be found in a very low-tech solution—the humble coupon. L


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Loyal Insurance Customers:

An Untapped Market by Sandra Zoratti & Lee Gallagher, InfoPrint Solutions Customer loyalty is irrefutable proof that a company listens to its customers and works hard to satisfy them. According to a recent CMO Council survey report sponsored by InfoPrint Solutions Company, “What’s Critical in the Insurance Vertical,” more than 60 percent of insurance consumers polled are happy with their providers. They value the ease and reliability of the working relationship, yet they report concerns related to policy language, billing and service. Customers want to learn more about the products and services of their providers, yet they, like many consumers, are shopping and comparing costs.

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T

he insurance industry clearly benefits from its loyal customers—55 percent purchased policies more than five years ago. But how are insurance companies responding to customer concerns, economic pressures and the need to increase revenue? A majority of survey respondents are devoting marketing resources to the acquisition of new customers. Only 14 percent expect to focus on retention, advocacy and loyalty development with current customers. Acquiring new customers takes time, and high acquisition costs can take a big bite out of marketing budgets. The alternative—to more fully engage loyal customers—represents a substantial opportunity for insurance company marketers to capture incremental revenue fairly quickly. Engagement thrives on relevant communications that are designed to inform, cross sell and up sell. Consumers are overwhelmed with irrelevant information, and many want to simplify their lives.

•Adjust campaign tactics, repeat to a larger test cells Many insurance companies are fortunate enough to have data about their customers that has been collected over several years. This data can yield important insights, and marketers can apply analytics and algorithms to extract the data and use it. Yet only two percent of marketers in the survey reported increasing investment in data analytics to better segment and target key customers. Let’s say an objective is to cross sell or up sell your anchor products, for example, auto insurance for children of existing customers who reach driving age. The customers who match specific criteria receive information about a relevant auto product such as decreased premiums based on their children’s academic performance. When the information arrives at the right time in a personalized manner, response rates can be impressive—some-

Engagement thrives on relevant communications that are designed to inform, cross sell and up sell. Consumers are overwhelmed with irrelevant information, and many want to simplify their lives. By providing meaningful information, insurance companies can satisfy this desire and deepen the relationship. By providing meaningful information, insurance companies can satisfy this desire and deepen the relationship. Precision marketing—a data-driven system for designing and delivering personalized, relevant messaging—enables marketers to achieve ROI that is far more cost effective compared to the expense of acquiring new customers. And the good news is that the data needed for precision marketing already exists. The steps of precision marketing are: •Define objectives or what business issue or opportunity needs to be solved •Collect data on what your customers spending in your portfolio •Analyze it and look for behavioral patterns •Send relevant communications. Test by starting test cells and measure if the expected behavior converted to the product promoted.

times reaching double to triple digits. This allows the conversation approach to nurture customer trust and loyalty and remove the relationship from transactional mode. Loyal insurance customers, who frequently do not hear from their providers until renewal time, are an untapped market. Precision marketing is a winning strategy for consumers and insurance companies. It makes customers feel known and valued and gives them information and choices that are timely and relevant. It enables marketers to easily analyze results, calculate ROI and fine tune communications based on clear metrics—all of which can improve business in a challenging marketplace. Download the “What’s Critical in the Insurance Vertical” report from http://www.precisionpromotion.org/ or www.loyalty360.org/white_papers to review the survey results and key findings. L


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What We’re Hearing Loyalty Management’s review of relevant conferences in the marketplace by Mark Johnson, Loyalty 360

2010 ATM, Debit, and Prepaid Conference October 3-5, Phoenix, AZ

After attending the 2010 ATM, Debit and Prepaid conference, I realized again that this economy (and the banking industry in particular) is in a unique state of transition that has led to the increased interest and inclination of the attendees to achieve a more detailed and comprehensive understanding of loyalty and engagement best practices. This understanding is sought through best practices, actionable insight and case studies that can impact ROI and create “sustainable behavioral change.” The continued need for this knowledge is part of a concerted effort from financial institutions to achieve a better understanding of their customers given the fluid and dynamic state of the market. The market we live in is filled with an ever expanding set of traditional marketing channels and external market and governmental forces that have caused banks and other financial institutions to adapt to and try to comprehend this new landscape in order to make sure they retain and better understand their customers. Attendees learned there has been a shift in the way people are paying for products. We have seen the increase in the use of cash and debit products, and have witnessed the consumer saving rate inch up to 6-7%, which had been around 0% for the better part of 15 years. PNC, a leader in the bank-based loyalty business, has witnessed significant interest in loyalty/rewards programs for both consumers and their business customers. They have seen better

retention and when this group begins to redeem, it creates a new level of “stickiness“ for the bank, as well as an increase in the number of products an individual or business will have with the bank. There was also talk of debit rewards. According to Jonathan Silver, President and CEO of Affinity Solutions, “The future of debit rewards is going to change. The whole loyalty model is going to be dynamic and changing rapidly over the next couple of years.” He sees a much more integrated model for loyalty that will function across industries. As Silver pointed out, “Merchant funded was traditionally a bolt on. 1 plus 1 equals three. The coalition model is coming around, but the key is creating a currency that works.” There is going to be a change in the debit card programs, yet the consensus is that the demise of the debit card loyalty program is greatly exaggerated. Cynthia Smith of Zion’s Bank mentioned that some of their customers get $2,000 dollars back a year from their programs, yet there is a push to simplify rewards and to make them more targeted, relevant and engaging. She suggested banks should not look for short-term profitability on their programs, but rather on the long-term engagement, detailed understanding and profitability of the client. I continued to hear from the conference that consumers want to be rewarded. The need for engaging, relevant and timely rewards that create loyalty and engagement—but more importantly sustainable behavioral change—is the goal of today’s programs and more imperative now than ever.

The need for engaging, relevant and timely rewards that create loyalty and engagement is the goal of today’s programs.

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I heard time and time again from the vanguard of the industry that their clients want to understand, influence and measure the changes their loyalty programs are creating. -Mark Johnson, about The Motivation Show

The Motivation Show October 12-14, Chicago, IL

At the 2010 Motivation Show, I noticed that this show is changing along with the incentive industry itself. While the goal of creating behavioral change for employees and channel partners remains, I spoke with a number of people who felt that Incentives are now a “four letter word;” that the old school “trinkets and trash” incentives are being replaced with more measurable methods of rewards. I heard time and time again from the vanguard of the industry that their clients want to understand, influence and measure the changes their loyalty/reward programs are creating. I had the opportunity to speak at this year’s Show. As Loyalty 360 is focused on hearing the “Voice of the Customer”, the session was structured as interactive discussion with the audience; the goal being to get a sense from them of where the market is, where is it going, what the financials are looking like for them, what they felt the challenges were and how should one solve them? As always, I was (am) looking for market-driven insight. What I can tell you is that there is as much confusion in this market as in any other. I was surprised how open and candid the individuals in my session were. They spoke of meetings with HR representatives that now would have operational and financial representatives in their sales/ process meetings with an inclination to push the vendor for a more thorough understanding of how their spend can be more effectively targeted to increase the efficacy of these internal programs; to drive behavior. I asked the audience: “Does a bike in a catalog impact behavior?” Most responded either “no” or “don’t know”—but indicated that this is the same type of question they were being asked

by their clients. When I raised the issue of what does drive behavior, and many responded that the answer to this exact question is the Holy Grail that they were looking for. I also asked my audience where they thought the market was going, and I received both ambiguous and uncertain responses. Some felt that employers/clients were beginning to loosen up their purse strings, but doing so very cautiously. Others believed that employers could be divided into the proactive (reward focused), active (looking for solutions) and inactive (you should feel lucky to have a job) categories. Yet, while more companies over the past two years were in the inactive category, we were seeing more interest—not necessarily spend, but interest—in moving to the other categories. Behavior is a complex idea. The focus on the neuroscience, behavioral psychology and attribution theory are areas of increased interest, but the complexities involved with them are leading to a new paradigm in the marketing world. We saw that the Motivation Show dedicated a one-day preconference workshop to the ROI of engagement. I found this unique in that not only are we trying to give a new connotative and denotative meaning to engagement, but we are now fixated with the ROI component. I think this is the direction we will see the Motivation Show continue to move towards. The case study approach they are bringing to the show is very much welcomed by Loyalty 360 and Loyalty Management because we believe—and what we’re hearing from our members—these are the areas of interest to the market. Without them the old school view of incentives may be in trouble.


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loyalty program profile

Best Buy Reward Zone A

The website also features community forums where you can ask questions from other members and chat on forums about music, movies, games— whatever your interest.

re you ready for some football? The leaves are starting to fall and the air is crisp and cool. Autumn is here, and for many, there’s nothing better than rounding up your friends to eat, drink, and be merry while your favorite team battles it out on the field. But what to do when your tv just doesn’t cut it anymore? Time to upgrade to a flatscreen and watch the weekend’s games in style. And who better to help than Best Buy. Best Buy’s Reward Zone is free to join and takes just minutes in-store at checkout and online, where you create your profile and customize the program to your liking. Once you join, you earn one point for every dollar you spend and are able to redeem points for $5 reward certificates after you earn 250 points. Depending on your preferences, you can increase the limit to 500 ($10) or 1000 points ($20). But make sure you redeem your points and certificates quickly! They do expire. For members wanting to earn rewards quicker, you can sign up for the Reward Zone Mastercard. This enables members to earn double the rewards—two points for every dollar. Membership also gets members access to Reward Zone Partners that can earn significant points. With our new home theater, Netflix was the perfect option! Members can join for 500 points rewards and earn an additional 100 per month for the first six months. Getting rewards to watch my favorite movies and tv shows? Yes please! Reward Zone Members can also shop the online mall, which not only offers rewards points on purchases, but also offers exclusive member discounts. You can find anything from books to clothes for the family to that new lamp you need in your living room—even deals on your next vacation! In-store, it was easy to start earning. The sales staff was friendly and knowledgeable, helping us pick out the perfect tv and reminding us to take advantage of the Geek Squad who could come help us set up the tv and mount it in its place of honor just in time for kickoff. Online shopping was just as easy. The website features articles and reviews from technology experts at CNet and allows you to instantly compare items the way a sales associate could in the store. The website also features community forums where you can ask questions from other members and chat on forums about music, movies, games—whatever your interest. With my home theater all set up and ready for the big games and cozy movie nights, fall just got much more exciting. And who knows, with all my Reward Zone certificates rolling in, winter might be a good time to sharpen my photography skills or get that new laptop. Hint, hint Santa! L

THE VERDICT

Two Thumbs Up! Two thumbs up! Despite the points’ expiration dates, the program is quick and easy to use and with the diverse product offerings both in-store, and through the online Reward Zone mall, you can always find a way to earn rewards.

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