The rise and stumble of e-mail.

I can recall 6 or 7 years ago, a former loyalty client at Frequency Marketing telling us about their grand plan. They were going to do away with paper mail and move all their customer communications to e-mail. The savings, by eliminating the costs of print production and postage, were going to be tremendous.

To the best of my knowledge, it never happened. Because, as a lot of companies have discovered, a funny thing happened on the way to the all-electronic communications plan. E-mail, after reaching a zenith as the communications medium of choice, has seen its popularity slip.

E-mail click-through and open rates are down. Spam is up. So are enhanced security firewalls that block even legitimate e-mail. And on top of that, many in the younger demographic are now more likely to communicate via social networking devices like Facebook wall postings and ignore e-mail altogether.

So what’s a savvy marketer to do? According to a recent survey in DMNews, 52% of consumers 18-39 say they receive greater enjoyment receiving mail through the US postal service as compared to e-mail. And it’s no surprise, really. These days the relatively empty mailbox has a distinct advantage over the crowded inbox.

So, whenever possible, let your most valuable customers have the choice of communications channels—paper or digital. Or let them choose both. But if, due to a tightening budget, you can only send e-mail, make sure your messaging is as personal and relevant to the person receiving it as possible.

Treat your loyal customers with the same recognition, tonality and respect, as if they had just walked through the front door of your business. Because when you treat a loyal customer just like everybody else, with sales pitches that are impersonal or irrelevant, you risk being ignored—or worse.

Brother can you spare a diamond?

To go off point for a moment, have you seen the new print ad from the De Beers diamond company? To boost sales in a faltering worldwide economy, they’re running an ad headlined “Fewer, Better Things” that talks of “stuff you buy but do not cherish” and informs us that “things will be different now, wiser choices made with greater care.”

The implied message is that in this grim economic environment, the purchase of a diamond is somehow a smart decision, a wise investment, and that the list of “fewer, better things” in our lives should include a shiny rock. It’s a rather curious and transparently shallow sales pitch that is sure to appeal to…who exactly?

My gut tells me that those who buy diamonds do so for primarily emotional reasons—and this healthy dose of logic might actually have the opposite of its intended effect, as potential customers come to the realization that the important things in life have little to do with diamonds—and the “wiser choices” we will make have more to do with the care and companionship of our loved ones and friends.

Wachovia gets back into the game.

US bank Wachovia has just come out with a new loyalty program called Wachovia Possibilities Rewards. The program allows customers to “earn points toward valuable rewards every time you use your Wachovia Check Card or Wachovia Credit Card.”

The launch of the program surprised me for a couple of reasons. Not only had Wachovia been purchased by fellow US bank Wells Fargo only days earlier—but a previous Possibilities loyalty program the bank had launched a few years ago had disappeared from sight not long after its introduction. I know because I’m a long-time Wachovia customer.

When the previous loyalty program was introduced, I received a welcome brochure and immediately signed up. But I never heard about it again. No follow-up postal mail or e-mail. No mention on the bank’s Web site. Not even a small typewritten message on my bank statements.

So when I read about the “new” Possibilities program via a colorful mailer sent to my home, I was skeptical. What had happened to the old program? Had I accrued any points in it? And with Wells Fargo taking over, what’s to say the plug wouldn’t be pulled on this program as well?

But as a loyalty enthusiast, I felt it my duty to log on to the new Possibilities Web site and sign up as a member. Upon doing so—to my shock—I found I already had a substantial point balance. My points from the old program had apparently been rolled into the new program. Wasting no time, I skimmed the robust online rewards catalog and, after considering several enticing travel rewards, redeemed most of my points for a more practical choice—a new vacuum cleaner.

Now for the communications issues: Obviously, Wachovia made a mistake with its previous loyalty program, by not communicating with customers like me who had raised their hands for admission. At minimum, if there were problems with the first program, customers should have been kept in the loop and informed that a new and better program was on the way.

Second mistake: sending out an invite to the new program without personalizing the communications to tell customers they had a pre-loaded points balance. My guess is tens of thousands of customers ignored this mailing because they didn’t know they already had equity in the program—and a huge head start toward reward redemption. When possible, always let customers know where they stand and how close they are to earning a reward.

Overall though, my faith in Wachovia has been renewed. My new upright vac is on its way and a bank I have often scorned for its excessive fees has now actually saved me a few bucks. Now we’ll see if Wells Fargo has the smarts to keep the program going.

You've been upgraded...May God Bless You!

The stairway to heaven can be an extremely arduous climb. I've just realized that the path from being notified to actually being upgraded needs to be traversed with measured patience and caution!

I received a call from my bank a couple of weeks back indicating that my account relationship had been upgraded. Though the voice at the other end of the phone line emerged from an obviously new executive, perhaps rushed into the nuances of relationship banking, the main benefits of an enhanced relationship appeared rather relevant.

I welcomed the call and suggested that an email outlining the benefits be sent across promptly. The rather persistent lady insisted on a meeting in person. I proceeded to politely indicate that an email followed by a telecon would serve the purpose. The young lady reluctantly agreed, and then proceeded to ask for my email id!...and I wondered...but they already have my email id...

An extremely poorly formated email did arrive on my inbox after a couple of days, and was wondering if this in fact was a genuine email. A few more weeks transpired and the gentle damsel calls once again, seeking an appointment. This meeting in person piece must be in some training manual. Politely indicated that it may not be possible and requested a few more details...and then silence prevalied yet again.

In the meanwhile, I've come across over 30 other fellow personnel, who too have received similar upgrades. I don't feel all that privileged anymore!

Its been over eight weeks now, and am yet to be upgraded at the back end or the front end. Everytime I use my debit card, I believe that I should in fact be accruing some incremental benefits that I am not privy to as I have not been upgraded yet. This is getting extremely perturbing. I have now moved from a reasonably indifferent but loyaly customer to a more involved but disillusioned client.

The upgrade journey is designed to be a joyous memorable experience, but your customer may just not reach heaven. Reference my earlier post, its all but critical that you see through the entire process and its delivery.

Yup...there are 5 senses....

A crumpled welcome pack, an arrogant glance, high noise levels, incoherent responses, delayed replies, stale ambient air...if these are stray or consistent events littering your customer's journey, its time to quickly head back to the basics.

Truly successful service organizations have clearly mapped their customer journeys, attempted to standardize the rendered experience and create differentiators in key points of delivery.

Kingfisher Airlines, a leading Indian airline, addresses its passengers as "guests". At the end of a long 14 hour day as you await boarding the return flight home, those words can make you feel rather special. An honest smile further reinforces the experience and significantly enhances the latent value of those frequent flier points.

I've noticed that several CRM and loyalty programmes have clearly defined value propositions and crisp coherent written interactions with their customers. However the challenge arises in providing a 360 degree service delivery that is consistent with the brand promise and value proposition addressing the five senses.

As we strive to determine new product offerings and path breaking differentiators, it is imperative that we also identify and address critical opportunity areas in the customer journey. Get into a huddle with all customer facing stakeholders, experience the brand as your customer and realise the true value of your loyalty programme. Several organisations have customer experience owners and champions to address these aspects. You don't need one to find out that you've got stale air in your lounges, you need a ventillation system!

There is nothing more painful than to have a customer seeking to cross her points redemption threshold so that she may quickly pick up her free gift and bid adieu, as the quiet lounge area of a few years earlier has turned into a cacaphony that she simply cannot relate with. Even double bonus points in a charming gold envelope would not keep her back!

Is the timing right?

Much has been written of the global economic downswing in recent months. As business managers the world over attempt to redefine their business models and trace the elusive "economic value", the key challenge remains "How should I engage my customer?"

That being said, resources are crunched and liquidity continues to be an expensive luxury & any marketing investment would really need to kick in those returns at a quicker pace.

So, would you be considered senile, if you should consider launching a loyalty programme in this environment? Over the last couple of months I've come across organizations performing well (which is a refreshingly welcome sight) and others who bravely navigate these uncertain times.

Well..its rather like marriage. If you think you've got it right...go for it and heres why..
1. You can make realistic projections and not inflate numbers to impress the top brass (not that you would get away with it even if you were to try)
2. If your business case were to show value in tough times, you would truly rock when the business turns around the corner
3. Stakeholders would adopt a new programme and participate more actively to generate business, and this perhaps is the biggest benefit which cannot be quantified in an excel.

This is the right time if any...go for it!

Keep the (server) lights on, Barack.

What might have been the most impressive aspect of the presidential campaign of Barack Obama was the marketing of the candidate.

Not only did he stick with a consistent brand message, he used a variety of digital mediums to engage with prospective voters. This included, for those who opted in, a steady stream of e-mail whose every-few-days frequency felt about right. A Web site whose design was as crisp and cool as the candidate himself. And a massive social networking effort that brought hundreds of thousands of supporters together in one place, mybarackobama.com.

So now that the election is over, what’s next? Pull the plug on the server? While in the past most politicians would shut down the communications machine the day after the election, I think it would be a smart move to keep the information, and connectivity, flowing.

To borrow the title from Seth Godin’s new book Tribes (his most illuminating work since Permission Marketing), Barack has developed an outsized tribe of super loyal followers. And the best way to keep this group engaged, is to keep the information flowing and the social network thriving.

The weekly presidential radio address could be supplemented with a weekly presidential e-mail blast. Regular blogs could be written by key cabinet members or presidential advisors. And the social network could remain engaged with regular meet-ups to watch presidential addresses or on-going conversations on how to best push current and hot initiatives.

As we know in loyalty, it is always smart to keep your best customers happy and engaged. Somehow, I think the Obama marketing people may already be on to this. We’ll see.

The trouble with widgets.

Have your clients asked you for a widget yet? Widgets are single-purpose applications that allow companies to quickly and easily share “live” content—news, images, information, you name it, right on your computer desktop. No opening a browser window, it’s all sitting right there for you.

You might think of widgets as the modern day equivalent of tchotchkes, those old school promotional trinkets like logo-emblazoned coffee cups or pencils or note pads, designed to keep a company’s name front and center in a customer’s mindset. And more and more businesses are using them.

The Weather Channel has a widget that can give you a non-stop stream of local weather info. Southwest Airlines has a widget that “dings” every time a special offer is sent your way. And a nifty little widget from Domino’s Pizza serves up a customized menu with the click of a desktop icon.

But for every helpful or entertaining widget, there are hundreds more that are silly or inconsequential. Why? Most widgets don’t bring any added value to a customer’s life. After all, most of your customer’s desktops are as crowded as their inboxes. You’re fighting for the equivalent of beachfront real estate and most people are not going to give it up easily.

So if you find yourself developing a widget for one of your clients, you might want to ask these questions. Will my widget make the life of my customer easier? Will it save them money? Will it entertain them? If it can’t do at least one of these three things, and do it well, your widget is probably not worth doing.

CRM (Crummy Relationship Marketing).

You would think the marketers at CRM magazine would have a clue as to how they should manage relationships with their subscribers. But several times a week, and sometimes as frequently as 3-4 times a day, I receive e-mails that read something like this:

Dear CRM eWeekly Subscriber,

As a subscriber of our newsletter we thought you may be interested in…(insert advertiser’s product, service or upcoming event here)…

You’ll see by the salutation I signed up for the CRM eWeekly newsletter, not the CRM e4xDaily newsletter. And I don’t recall signing up for promotional e-mails. While it’s possible I didn’t click-off on a negative option box, you would think someone there would realize this kind of promotional e-mail bombardment is not going to win CRM, or its advertisers, any fans. Especially since CRM never inquired about the types of products or events I might be interested in.

How often should you send e-mail? As often as you can make the information contained within the e-mail relevant to the reader, whether that’s twice a week, twice a month or twice a year. Or else you risk the recipient taking the same action I’m about to take against CRM—opting-out of receiving e-mail messages altogether.

Tom Rapsas, Creative Director-Writer-Strategist, tomrapsas@gmail.com

Loyalty advice from Haruki Murakami.

I’ve been reading the memoir What I Talk About When I Talk About Running by the celebrated novelist Haruki Murakami. A good quick read, especially since Murakami writes about two of my favorite personal pursuits, writing and running. (Not to mention the pleasure afforded by an ice cold beer after a long run.)

In one passage, the author touches on a subject I didn’t expect: loyalty marketing. It seems that before becoming a novelist, Murakami ran his own small jazz bar in Tokyo. He tells of learning the following important business lesson:

If one out of 10 enjoyed the place and said he’d come again, that was enough. If one out of 10 was a repeat customer, then the business would survive. To put it the other way, it didn’t matter if nine out of 10 didn’t like my bar. Still, I had to make sure that the one person who did like the place really liked it.

It's a point we might ponder when looking at our clients’ business or our own. Is there one customer in 10 who really likes our business? If not, how do we create them? Or if we already have them, how do we get them to spread the word to others?

Tom Rapsas, Creative Director-Writer-Strategist, tomrapsas@gmail.com

How does your loyalty program greet new customers?

There’s nothing like a loyalty program that greets you with a warm hello. Take the Hyatt hotel chain’s Gold Passport program.

It had been a number of years since I had been to a Hyatt and upon check-in at the Grand Hyatt in New York City I was greeted with the obligatory: “Are you a member of our loyalty program?” I replied “no”.

But instead of the hotel clerk handing me an application or moving on to my check-in, she asked me if I had a business card I could spare. “I’ll fill out the enrollment form for you.” was her reply. I was in a hurry, so handed her my card and moved on.

Sure enough, 2 or 3 weeks later I received a Hyatt Gold Passport welcome kit in the mail. Nice package. Pretty brochure with enticing photos and a clean, concise list of benefits. Not to mention, an honest-to-goodness credit card-thick membership card. (Nothing worse than those ultra-thin cards you can fold in two.)

I also received a welcome e-mail from Hyatt. Same crisp and clean presentation. And with a few mouse clicks, I can personalize future e-mails by Hyatt location—and also set my hotel room preferences, including smoking/non-smoking, King bed/two double beds, high floor/low floor, etc.

Bottom line: Thanks to the warm greeting, I’d gladly stay at a Hyatt hotel again in the future. They’re now in my consideration set. And that’s the best first impression a loyalty program can make.

Tom Rapsas, Associate Creative Director, MRM Worldwide, tom.rapsas@mrmprinceton.com

Of Icons and Defaults!

An iconic brand is a legacy that most marketers would like to bequeath to the world. A brand that builds a strong relationship over the customer life-cycle and consistently delivers value at various life stages, yet retaining its charm and appeal allowing customers to clearly express their personality in a distinctive manner!

The last decade has been an excitingly turbulent one for financial services brands, driving a roller coaster of emotions for consumers alike. These brands have expanded the market, taking risks of market expansion in their stride and expanding the customer base. Having providing a financial identity to several customers and enhancing the expenditure appetites, the players have successfully fueled the growth of a wide array of industries including the housing, travel and retail fashion sectors.

These brands were viewed as the "dream merchants" that not only showed you the dreams, but actually financed them. Instant loan approvals, cashbacks, rock bottom rates and flexible pricing structures were the darlings of every consumer from New York to New Delhi!

With the collapse of the housing markets across the globe, the meltdown in the financial services space has commenced with rising defaults across all formats of secured and unsecured lending. With the nationalization of Freddie and Fannie, the mortgage majors that fueled the palatial dreams of millions, the market has really turned a corner.

The dream merchants are now perceived as the vultures, as banks and financial institutions are calling in the loans, raising rates or pushing the envelope on the collection engines to curb delinquencies and quell defaults. The monthly statements carrying special offers and treats have now proven to be the messengers of evil debits.

In these trying times, wherein economic survival is in itself the prerogative, how should financial services brands' retain their vigour and connect with their customers? For customers facing challenges in loan repayments, these brands may find it increasingly tough in retaining their emotional connect and relevance.

So, is it really possible to retain the inconic "dream merchant" status even during and post recessionary trends for customers. And moving to an even more pertinent question, do we have brands in the financial services space that are truly iconic! Where lie the Cokes and Apples of the financial services world?

It is often viewed that lending is a "serious" business and meeting consumers financial needs is the stuff of "serious" brands. American Express, Wells Fargo, ABN AMRO, RBS have hit the list of the worlds 100 top brands, but yet again "iconic" fervour is not something that comes to mind too often in their association.

Where arst thou James Dean?

Why The Beatles Don't Issue Reward Points?

One of the highest grossers of this century, having sold millions of records across the world and a sprinkling of fan clubs with a maniacal following that has an etheral magic about it. Music lovers across generations continue to purchase and listen to their favourite tracks across analog & digital, from cds to mp3, audio cassettes to Blue Ray formats.

WalMart has proven (often considered obstinately) time and again that its EDLP platform continue to drive the customers back into stores. Apple products have a maniacal cult following across geographies and the adventure continues with the iphone.

So why is it that some of the leading brands do not issue reward points, but in fact charge a premium to facilitate entry into the inner circles.

Now...here's a contra view. Reward point issuing loyalty programmes is the bastion of those brands that stand a couple of rungs below the truly iconic brands. A true brand delivers value to its customer base. A true brand is respected for its contributions & innovations and prodded on when it faulters or misses a step.

Are loyalty programmes that missing ingredient in the econometric equation that mask the shortcomings and faults in the product / service range? Do loyalty points actually say thanks for your business, because we know you may have taken your business elsewhere? Now, is'nt that it in itself a constant confession of shortcomings!...Okay..got slightly radical...

The fact of the matter lies in the fact that several brands and businesses believe that reward programmes can truly camoflouge their faults. In these increasingly demanding times, its important to understand truly what drives value to your customers and to your businesses. In these days of rising fuel prices is forcing customers to shop online, should the business redirect its budgets in points to a more efficient delivery system.

Loyalty programme managers need to consistently prove the business value of their points and programme costs. Its not surprising to see presentations and statistics that proclaim that their loyalty customer base contribute to over 60% of spends and 70% of profits. When was the last cause and effect study undertaken? and how can one be convinced that the locational, pricing and merchandising range were in fact the driving factors and not perhaps reward points.

Time to tighten the belts and perhaps sing " I should have known better..."

The Fatal Attraction of Reward Points....

As marketers, we spend much of our time in researching our customers, their needs, segmenting and targeting them into clusters and finally blasting offers, coupons, freebies, incentives and even birthday cards as if there were no tomorrow.

Marketers have been challenged with quite often the ability to deliver a suitable value to customers at the right place at the right time with the right context. The introduction of bluetooth, gps, the Internet and a suite of other technologies, one would imagine the scale would have tipped in favour of the marketeer...but alas not, as the challenge is not in the channel as much as in "customer understanding"

It is rare to come across messaging which is considered to be in the domain of "consistent relevance" by consumers. So what is it that holding us back?

1. We do a lot of research but do we listen? : Research is conducted to test hypotheses, but often we do not read between the lines....

2. We talk but do we have a dialogue? : How much of our time is spent in having a dialogue with our customers outside the scope of research. ( A couple of years back when I was handling a children's product category, we commenced the practice of chat sessions & not focus groups with kids...it was an enriching and remarkable experience...try it out sometime)

3. We receive...but do we comprehend? : There's gigabytes of data churned out each day, but how much do we comprehend and turn into action.....

In the case of loyalty programmes, we have been so enamored by reward points, that its almost a fixation ( glen close revisited...)...The reasons as below:

a. Protect the brand...don't give back cash, but seek camaflogue behind reward points, thereby protecting the brand equity!
b. It's universal.....the common currency but in a different avatar
c. It's easy..this is the single unspoken truth.

Well quite often to the extent that several experts believe that reward points is but the foundation stone which meet the hygiene level of expectation, the rest is bonus.

Well... a different perspective...have a reward programme in which you can present value to your customer in their every interaction with your brand ( and even intent to interact!).

I'm a strong believer that there are several large segments of customers who would value services and benefits other than points..The hospitality segment has done this wonderfully well in tracking their customers preferences and extending them on the next visit.

Believe its time we spent a little more time in understanding how we can better add value back to our valued customers and question the precious marketing dollars we invest in points..........

When a loyalty program gives a once loyal customer the boot.

I used to be a member of the loyalty program Hilton HHonors (a name both my spell check and I aren’t too crazy about). I say “used to be a member”, because on two recent stays at Hilton brand hotels, I was told they had no record of my membership. I had ceased to exist.

Some back story: Between the years 2001 and 2005 I stayed at a particular Hilton Garden Inn all the time. I was a very loyal customer. In fact, over 4 years I racked up enough points in the HHonors program to treat my family to a free weekend stay in a very nice New York City hotel suite.

But by late-2005, I had moved on to another job, one that at the time required zero travel. The Hilton hotel stays stopped. And by about the end of 2006, something else had stopped as well—all incoming e-mail from the HHonors program.

Fast forward to 2007 and 2008, and I’m again traveling ad nauseam, to the tune of about 50-room nights a year. Only now, the bond between me and Hilton has been broken. So, when the choice is mine, I’m opting for hotels I really like (Shutters in L.A.), give me special perks (Lowes) or offer a loyalty program that has greeted me with open arms (Hyatt).

Funny thing, though. Twice in the past couple of months, I found myself again checking in to a Hilton brand hotel. The first time, I asked the desk clerk to credit my Hilton HHonors account. After all, I still had my account number and password. Even had my Hhonors member card. There was no record of my membership—nor was I invited to rejoin the program. I later checked online at the program Web site. Ditto, no record of my existence.

What happened? Had the database see me as a lost cause, an inactive customer not worth keeping in the system? Or had they simply misplaced my information? The fact is, for all Hilton knew, I was still a frequent traveler who had moved my share-of-wallet to another hotel chain—in another words, a traveler worth trying to win back. Which begs another question: At what point do you eliminate a once valuable and loyal customer from your database?

This former Hhonors member’s opinion: If a “best” customer disappears off your radar, you should be making every attempt to win him or her back. If you’re sending out cost-prohibitive print communications, a trigger based on a full year of inactivity might be understandable. But if your customer has opted in for e-mail—with its infinitesimally small distribution cost—you should keep pushing out communications as long as the once loyal customer’s inbox will accept them.

After all, you never know when a once loyal and valuable customer might resurface—and potentially become a best customer all over again.

Tom Rapsas, Associate Creative Director, MRM Worldwide, tom.rapsas@mrmprinceton.com

Trails and Triggers!

As marketers, our endless thirst for seeking to understand more about our customers often leads us to miss out on the information trail that a customer is leaving in her daily interactions with your brand.

There are two types of trails that are left by customers, the "Tangible" trails, distinguished by those that can be captured by your systems, and the "Intangible" trails that may be observed by your channels and customer facing colleagues.

The former would include her birthday, size of items purchased or time of shopping, value of salary credit into account etc., whereas the latter would include the details of other shopping bags she has carried into the store or the perfume she comes wearing in........

The challenge is two fold. Which of these trails are relevant for your business, and how can you act on them?

(Have come across one too many programmes in which customers receive birthday cards from brands who have not touched their lives for at least 11 months prior to that event! And even worse, these cards quite often bear signature stamps. These programmes are quite often templated and in my opinion a waste of time!)

Globally credit card issuers have leveraged "tangible" trails and defined trigger points to their business advantage quite well. Hence it is not too surprising to receive an offer for sales finance, when you've conducted a high value electronic item purchase. Now of course the challenge lies in when is it that I receive the offer? Is it an SMS the customer receives within a few seconds of the transaction or after a fortnight when the card statement is sent!

The larger challenge lies for organisations that can communicate with their customers cost effectively only when the customer walks in ( as mailing out coupons can be quite an expensive and time consuming process!)

Do you believe that systems and processes are attuned to pick up relevant customer trails, define accurate trigger points and communicate customer benefits in real-time?

Believe that a fair amount of investments are sunk into reward points and mailing costs. It would be refreshing to see business managers diverting some of those budgets into systems which would allow them to listen better and deliver greater value to their customers!

So what if I don't want to engage?

The loyalty buzz phrase of the moment seems to be “engagement marketing”. It a phrase that’s been around for several years, but its meaning seems to have morphed from engaging customers with the brand via dialogue and personalized communications, to inviting customers to actively participate with the brand, via interactive blogs, viral video contests and social networking sites.

Either way, the question I’ve been pondering is, what if I’m a loyal customer and I don’t want to interact with the brand? The fact is for every rabid Apple, Xbox and Toyota Prius customer, there are other customers that just want to be left alone to enjoy their product or service in peace. And for low involvement categories (think auto insurance) there may be few to zero customers who want to actively engage with you.

The point is, in the rush for companies to launch a corporate blog, put a page up on MySpace or release a new-fangled widget, it would be a mistake to forget the basics--the “blocking and tackling” that should be a part of every loyalty or customer retention program.

During my days as Creative Director at the now defunct Frequency Marketing, it was drilled into us that every loyalty program was about rewards and recognition. Rewards were the tangible stuff, the free flights, etcetera. But equally important, was the recognition—the intangible “thank you” messages and soft benefits like invitations to VIP customer-only events that showed your best customers you truly cared.

So in the rush to jump onto the Web 2.0 bandwagon, let’s not forget the basics. It’s still far more effective to send a personalized, relevant e-mail to a best customer than a come-on to become a Facebook friend. In loyalty, as in life, it’s the little things that matter most.

Tom Rapsas, Associate Creative Director, MRM Worldwide, trapsas@mrmgillespie.com

Guerilla Loyalty!

Was driving past a leading retail chain the other day, when the advertisement led me to take an instant U turn and head instantly towards the store! The tactic was refreshingly amusing and definitely merited a visit at the least.

The promotional campaign was quite simple, wherein it invited loyalty members of other leading retailers and offered a 20% discount on your purchases, provided of course you showed your loyalty cards with the other stores!

Not entirely original, but always an effective method in inviting the serious shoppers. In an environment where similar brands are available across most large format stores, and the absence of high quality store level apparel brands, the choice of store in multi brand formats is quite often led by the ease of parking, the service and ambience and of course any carrots that may be tossed in for a good measure.

This was a fairly new store situated in a street which has over 8 malls in a one kilometre stretch. The promotion obviously had customers flashing the loyalty cards in their wallets and diving into one more. Quite smart. Target the relevant high spenders and drive them in.

This raises another critical aspect and challenge for loyalty programmes w.r.t customer selection. Which customer should you invite to your loyalty programme and which one should you perhaps let go! The "I welcome all" approach results in large programme management costs and the management getting bogged down by the low active rates on occasion.

Most mass market retailers have either no / low entry barriers for their loyalty programmes, and the common criteria being the value of purchase on the day or in a defined period of time.I often question the perceived value of a product / service which I receive with extreme ease! Hence, do these programmes make the necessary initial impact at the welcome stage or was there a missed opportunity? Also, is the ticket size the only feasible entry criteria?

Hence, could all customers purchasing Swarovski crystals by default be invited to the programme, or men purchasing ties! What gives the customer's entry into the programme that distinctive edge, and in the bargain makes your customer selection more relevant and accurate?

As an endnote, I did'nt end up purchasing a single item at the above mentioned store, as at the cash counter they politely indicated that I needed to make a purchase equivalent to approximately USD 75 to avail of the offer ( I was a few dollars short...) ! And yes, I did leave without a single purchase. They definitely got the buzz, but lacked the fizz.....

The Missing Ingredients

Have I become delusional...why do most loyalty programmes appear the same to me?! The application form, personalised loyalty card, points, upgrades, gift catalogues or air miles.......

To the extent that loyalty programmes quite often appear to have been created out of force of habit or as a matter of "hygiene"...which is a wicked waste of money and resources.

When is the last time you were blown away by a new feature, application or gizmo in this space? I believe the closest we have come to an inflection point has been the introduction and growth of coalition loyalty programmes with Nectar and Air Miles leading the pack. With the exception of the customers at the "top of the pyramid", loyalty programmes will increasingly be faced with the existential question "Are we really influencing customer choice?"

A couple of questions you may like to ask to determine those "missing ingredients" to wow your customers:
a. Show me the Rolls! : Is there a stage in the customer life-cycle, wherein she can say "Wow" - You need not give a Rolls Royce, perhaps offer her a day in a chauffeur driven Rolls!
b. What was that again ? : Can she explain one feature in your programme that makes it more distinctive than that of your competitor?
c. Dick & Jane : We've got separate shopping sections for men and women to address their differing needs and tastes...So why not different loyalty programmes?..My favorite subject - Segmentation...

A few thoughts on the missing ingredients, to tickle your grey cells!

i. Bespoke Loyalty Services : Can your customer design and customize the loyalty programe to meet their needs

ii. Family Rewards : Have’nt seen too many loyalty programmes that address the complete family or customer formed groups, with the exception of Air Miles and upromise

iii. Merge Loyalty Points : Could customers converge the loyalty points earned across programmes in a common exchange platform. Coalition loyalty but at the next level. You may notice redemption levels going through the roof, but thats where the opportunity lies for the brands.

Well, we could go on forever, but quite clearly a need for some introspection and fresh perspectives on user experience and customer life-cycle management!

Profitability v/s Delight!

In most consumer (B2C) industries, the definition of customer profitability is fairly straightforward. The more you buy, the more profit you generate for the seller and hence the more valuable you are....

In the case of airlines, the uber elite flying club class quite often deliver substantially higher gross margins to the airlines. Hence loyalty and relationship programmes quite often fall head over heels in flirting with the blue blooded chaps.

However the credit card industry offers a twist. Customer Value is not directly proportionate to the amount spent, but a blend of how much you revolve and pay. This leads to quite a few unusual scenarios...
........Jack, a top spender - non revolving, requesting for an annual fee waiver is politely denied as the he has accumulated tons of frequent flier miles and the card company know that he is "stuck" to the proposition
.......Jill, a medium spender but high revolver is often extended the courtesy of fee waivers and a bouquet of other treats as well!

Increasingly banks and financial institutions have commenced differentiated pricing and "service" strategies for their customer segments basis current and potential profitability. Quite justified from a business value perspective (and rather tough to implement), but what of the customer?

Am all for differentiated pricing, but have been debating this differentiated "service/gesture" approach for a while now. Would Jack be tipped over eventually and take his business elsewhere & what would be the brand impact of such tactics.

Would welcome your views?...

We're Fighting Back.....

Two events in the last one week that leads me to this post.

I. Came across an article detailing how local grocers and pharmacies had been building mobile number databases of their frequent customers and using the SMS as a medium to communicate offers. What's more they were in fact allowing multinationals to access their database for a fee!

II. We were comparing the services offered by the local grocer with those of the larger format hypermarkets. Well, I thought the local grocer beat the supermarket hands down (well at least in my opinion!), and here's how
a. The shopkeeper recognizes me ( four generations actually)
b. Knows precisely which brand, variant and size I need
c. Recommends new products
d. Stocks products exclusively for me
e. Delivers home in ten minutes
f. Extends credit
g. And keeps telling me that he is charging below MRP
And ...no he does not have a rewards programme!..well not yet at least!...So tell me again...how is the hypermarket better again?
What's more....I believe I purchase much more than I actually need at the supermarket and post the expenses for parking, pizzas, cold drinks and more...am not too sure if I saved or gained too much!

We then tried to superimpose some or all of these benefits into a Loyalty/Relationship/Rewards programme and realized that we were indeed in a very long and dark tunnel.

The local grocers are today armed with a slew of technologies and tools coupled with the personal touch that most large format retailers would find fairly tough to compete with. Mainframes at modern day large format retailers are pitted against the greying hairs of the local grocer.

I rather fancy the chances that David has in this game of loyalty! Its just not in the reward points...goes much beyond

(Incidentally why are loyalty programmes synonymous with reward programmes?)

The Smile Effect.....

There is a hypermarket that I visit quite often for the monthly grocery shopping. The staff is warm and helpful, the items well displayed...and hence a well rounded experience. I was pleasantly surprised when the firm's head of marketing pointed out that at the bottom of the bill was printed the amount the customer had saved on the transaction.

Great feature, but unfortunately during my dozen or so visits prior to my meeting, had'nt ever noticed it. Such a tremendous opportunity that was lost for building customer delight, wherein the cashier could have highlighted the savings and reinforced my conviction that I was in fact saving money vis a vis my local neighbourhood grocer.

And thus goes the fate of several innovations and initiatives across industries, which are not consistently reinforced across the channels. Quite similar is the challenge with loyalty programmes as well. I quite often notice that I am invited into loyalty programmes, asked for my loyalty card, but rarely explained the benefit received in that transaction.

It is quite often believed that loyalty programmes are not working out, for the simple reason that the stakeholders across the organization do not reiterate the benefit to the programme members.

All the advertising in the world is surpassed by a smiling cashier telling me how I benefited.....So the next time you're planning to invest a few million, might be worth your while to see if the customer facing personnel are spreading the word...

Show Me The Plastic!

I've been intrigued by the passion in issuing plastics to customers, to mark their entry into Loyalty Programmes. I must confess that I've got over 23 loyalty plastics at last count and have discarded all of them!

Yup...all of them, and yet remain fairly loyal to some brands...allow me to elaborate...

My airline allows web check in and allows me to select my seat and even incorporate my frequent flier number, ensuring that I get my due points. My preferred retailer for apparel, requests my mobile number and allows me to earn points on all my transactions. The restaurant that I frequent, quite strongly believes that my presence suffices to avail of the discounts privy to their loyalty members, and need not flash my glorious card for all around to see and drool over.

Hence why are millions of dollars invested into the issuance of plastics, which several customers forget to carry, or even worse...have forgotten about them altogether!

The loyalty card obviously "reinforces the brand imagery, the proposition and the urge to avail of the benefits with every exposure in the wallet". In some cases, customer authentication is facilitated by the loyalty card, but not in the most foolproof manner, and in other cases, the change in colour of the plastic with every upgrade massages the customer ego (and so we believe)

If the loyalty plastic were truly such a miraculous tool, then we would perhaps have more customer research showing that customers get emotionally charged on their prized possessions, of which I've yet to come across.

Hence, are we issuing plastic more out of habit? Perhaps...Yes in several cases.

There is quite clearly an opportunity and need to revisit this fundamental tenet. I would bet on the mobile and the humble fingerprint as the gateways to access the world of benefits that you seek to offer your customers.

They're always with you, and you're not likely to "leave home without them"

Hence do strongly evaluate service offerings such as Pay by Touch which leverage the fingerprint and you might just see your activation and active rates drastically go up.

The cost savings could perhaps be channelised towards reinforcement of your core proposition.......

The 6 Best Reasons Not To Use Your Customer Information!.........

I've come across several organizations where they've forgotten why they actually have a loyalty programme?

They seem to go through the grind to achieve the processes as defined in the goal sheets without a tangible quantifiable outcome...

What's even more distressing is the total disrespect for the customer data opportunity that exists within their databases.

Now that I've come across this so often, thought it would be a good time to list out the top 6 reasons for not using your customer data.

a. I need a new database
b. We are setting up a new CRM package
c. We are rebranding our current programme
d. We do not have a budget for undertaking any direct marketing activities
e. We are redefining our value proposition
f. Our data is in a mess

One can write tomes on each of these subjects, but quite honestly it is sacrilege not to interpret and analyse your information in a systematic periodic manner.

Would be great hearing your views or any other points that you may like to add to the list!

As a sign off....every time you look at that data, you will find a new perspective on your customers...

Power Redefined

"Power is the ability to hold someone else's power in your hands and show it to them"

The World's Most Powerful Loyalty Programme?

Have been searching the web, chasing acquaintances and reading tons of reviews to determine the ingredients of a successful, sustainable and scalable loyalty programme. Loyalty as we all know is what makes every business tick and clock in the revenues. Be it banking, soap or even socks.

The quest for exemplary loyalty programmes typically results in recounting leading hotel and airline programmes that result in points, freebies, upgrades, massages and lots more. This of course is possible in industries where there is a direct customer contact coupled with transaction, and fairly higher operating margins (in good times at least). The sustainability factor of course is rather questionable, with several airlines having collapsed on account of air mile point liabilities in the recent past.

Retailers have been prone to issuing loyalty cards as if there were no tomorrow, be it the local neighborhood grocery or the big brother hypermarket on the outskirts of town. Points, discounts, special offers galore are showered on hapless customers, who rarely seem to be able to differentiate a United loyalty programme from that of Best Buy!

Marketers have been struggling to ensure that their loyalty programmes and cards remain top of mind and wallet respectively for decades. But as luck would have it, with activation levels of most programmes barely crossing the teens, the quandry remains - How in god's name do we make our customers remember the core value proposition and purchase at their stores on a frequent basis?

Hence the question of the hour " Where lies the holy grail of Loyalty" - Is there a loyalty programme out there, that has withstood the sands of time, behavioral nuances of generations and continues to grow each day?...Phew....

I posted a question on Linkedin recently soliciting feedback on Loyalty programmes that have impressed them the most, and received a response that quite clearly showed that I need to shake off my MBA hallucinations.

And that response - Religion!

Proven sustainability, adaptability and spanning all economic groups and lots more.....

So what is the secret ingredient about Religion, that drives and binds people the world over on a consistent and frequent basis?

A clear value proposition, sense of identity and social recognition that is reinforced with every generation.

"The best Loyalty Program in the world is organized religion. Highest number of enrolled members. Maximum membership longevity (hooked for life & at times from the time of birth). Moreover, it is the essence of what all successful Loyalty Programs should be. The members should not for once realize that they are the one’s who are paying for the ‘benefits’ & perpetuating program."

And all this with no loyalty cards or airmiles...hmmmm...