Tuesday, January 18, 2011
With all the talk of loyalty programs here on Loyalty Redefined, I’m proposing a unique new program to kick off the new year. This new loyalty scheme is for a market that’s often under appreciated, overworked and overlooked—you, the loyalty marketing professional.
The fact is as we move into 2011, you’ve probably set up specific business-oriented goals for the year ahead, as well as personal goals. But a funny thing happens to the predominantly Type-A personalities who occupy the loyalty space—as the year progresses, your personal goals get squeezed out as business picks up.
The solution? A program that rewards your hard work, not with miles or points, but with the more valuable reward of time. And for the program strategy, I turn to one of the masters of business and life management, Napolean Hill.
You may recognize Hill as the author of the classic Think and Grow Rich. First published in 1937, the book’s message about gaining monetary success through visualization, hard work and a positive attitude, still holds true today.
Even more compelling than that book though, is the sequel to Think and Grow Rich which was published 40 years after the original. In 1967, an 84-year old Hill had come to a slightly different conclusion about the role of work in our lives and what success truly meant. The sequel’s title: Grow Rich—with Peace of Mind.
It seems that after a lifetime of fame, riches and service as an advisor to three presidents, the elderly Hill began to whistle a different tune: be successful—but have a life, too. Hill’s not pitching a 4-hour workweek here, but suggests that one of the best ways to achieve peace of mind is to “make a time budget”.
Spread out over a 24-hour day, his time management program looks like this:
o 8 hours a day for sleep and rest
o 8 hours a day for work at your profession (but as your success grows, work less than 8 hours)
o 8 “particularly precious” hours “devoted to things you wish to do, not have to do.”
Hill’s suggestions for the final 8 hours include: “play, social life, reading, writing, playing a musical instrument, tending a garden, or just sitting and watching the clouds or the stars.” You can add to that, quality time with the family, prayer, exercise, cooking, sex, or whatever activity makes you happy.
Hill firmly believed that all business could be taken care of within an 8-hour time frame, and that the key to success was to consistently take advantage of the “8 precious hours”. He amplifies this point by stating: “Do not let a day go by without taking some time for yourself — some time you spend in pure pleasure, as you see it.”
The bottom line is this: sure, we all need to make money. But in the year ahead, let’s have a plan in place to reward and take care of ourselves. After all, success is measured by more than the money in our bank accounts. It’s also measured by the richness of our lives.
This post is by Tom Rapsas and originally appeared on the blog Loyalty Truth, January 10, 2011. You can reach Tom at firstname.lastname@example.org
Friday, January 14, 2011
Gone are the days customers when were incentivized for making purchases! Foursquare, Shopkick and a host of other players have armed mobile touting customers with rewards for checking into stores, scanning barcodes, posting reviews and just spreading the word.
As commerce got enriched with 'e-commerce', it has been taken into another orbit with social commerce! Driving the top end of the customer funnel for driving customer walk ins was usually the task for the media planning department, spraying the countryside with hoardings and television advertisements. Converting walk ins / check ins to transactions was the beleaguered task of marketing number crunchers doling out billions of coupons and referral incentives to hapless customers.
The new social apps have now taken over this end of the funnel and boldly incentivize customers for merely pressing 'check in' buttons on their mobiles. The difference of course lies in the fact that customers can check into multiple stores of their choice! So…is their loyalty to their thumbs or to the stores!...Well, that's a tough one. Let's come back to this on another post.
So…what drives customers to check in? The social urge to tell their friends where they are, where they've been and where they're going?! Sure..but this post is about the other end of the equation pointing towards the retailers and service providers seeking to sell their wares.
Though the Starbucks - Foursquare promotion has been touted as a breakthrough model, a quantum explosion of such cloned offers is bound to result in a declining response trend. The challenge for conventional marketing and loyalty practitioners has been to invest and experiment in this new gamble called 'social marketing'
Facebook and a host of networking sites have been flooded with company pages, offer sites, fashion communities and a wide vocabulary of social concoctions that would make a teetotaler head for tequila shots!
The rough road to social marketing nirvana has essentially moved forward on gut feeling and boards seeking to position themselves as 'web' savvy and hip. Not sufficient fuel for significant, scalable and committed efforts in the long run. The question that has been posed behind closed quarters..
"What's the ROI folks?"
A nightmare for any model that attempts to break away from the now sanctum sanctorum of click rates and response rates.
Eventbrite, offers a web based service to publish events and sells tickets using social marketing techniques. It has conducted analytics on it's several campaigns and has come out with the following findings (excerpts below)
- Sharing equals transactions: Dollars per share When someone shares an event with their friends through social media, this action results in real dollars. Our most recent data shows that over the past 12 weeks, one share on Facebook equals $2.52, a share on Twitter equals $0.43, a share on LinkedIn equals $0.90, and a share through our "email friends" application equals $2.34. On an aggregate level across Facebook, Twitter and LinkedIn, and our email share tool, each share equals $1.78 in ticket sales. We're seeing this number improve every week with the most recent four-week average equaling $1.87.
- It's extremely sticky: Visits per share The hyper-relevancy of the social graph breeds deeper engagement, greater sales and stickier audiences. For Eventbrite, Facebook is now the #1 referring site for traffic to the company's site, surpassing Google as people discover events that their friends are sharing and they click through to find out more. On average each Facebook share drives 11 visits back to Eventbrite.com. Averaging across all channels, one share drives over 7 visits back to Eventbrite.com.
- It's happening everywhere, across all sizes and types of events: Consistency of sharing
Sharing is consistent across event size. Sharing occurs at the same rate an event has 10 or 10,000 people. Classes/workshops and networking events have the most share activity, followed by fundraisers, conferences, and music events
Now, for those who may find this to be quite geeky, in a nutshell their findings appear to indicate that social marketing works and there is a potential ROI measurement that can be garnered from these exercises.
So, where does this fit in with the loyalty theme in this blog…… Marketing & loyalty teams appear to have a historical fixation on incentivizing economic transactions and few have ventured into the territory of recognizing and incentivizing 'social' transactions.
Perhaps the time has come! (now that you can satisfy the number crunchers approving your budgets!)
Wednesday, January 5, 2011
1. The 800 pound gorilla : With ARPUs (average revenue per user) under severe pressure in mobile telephony, look forward to Mobile Operators (MOs) initiating relevant engagement initiatives for their subscriber bases. Though location based offerings, including Foursquare, have made inroads, there is a significant scope for MOs to create loyalty/engagement programmes leveraging their customer transactional insights, distribution reach, locational capabilities and sheer scale!
2. 360 degrees : Marketeers will focus more on the pan-channel / touch point experiences for their customers in driving customer engagement. So, more of back to basics, rolling up sleeves kind of initiatives, ensuring that the messaging, experience, feedback mechanisms and personalization dimensions are all kicking in. This in itself should offer a significant boost to customer loyalty.
3. Talk to Me! : The holy grail of consumer marketing...1 to 1 engagement. Personalized programmes, bespoke experiences, segmented offerings are clearly the order of the day. 'Dear Customer' communication should rightfully disappear into museums and Internet archives!. High end luxury and financial institutions are well placed to take great leaps in this direction...but will they surprise us this year?!
4. Source of Customer v/s Source of Value : This is a jargon that I've been doling out for several years now. There are some brands that have a great source of quality customer and even data about them (which is quite different from understanding them). There are other brands, whose business lines with higher margin structures allow them offer greater incentives to their customer transactions. It's time that brands realize this challenge and opportunity and leverage mutual resources. These may be termed as coalitions or partnerships, but we need to several more of these around, hopefully offering greater value and relevance to customers. Look forward to seeing more mobile operators working with retail or restaurant chains in creating a segmented engagement programme!
5. Convergence Standards: Emerging technologies and systems offering convergence of multiple loyalty and payment cards into a single device or plastic address a clear need of wallet simplification! Is there a light at the end of this tunnel? Is there an opportunity for unrelated brands to work together on a single card, without it being a coalition loyalty programme? Smart card based solutions have been implemented in Turkey and the Middle east by banks, as examples of course. Can we see more?
6. It's just not the Transaction! : Economic decision making is 70% emotional and 30% rational! The transaction is not the beginning and end of the loyalty journey, as has been stated and quoted for time immemorial. Brands would need to start incentivizing good behaviour such as 'advocacy' to truly engage their customers. Points for referrals are again quite clearly and proportionately linked to end transactions. It needs to go beyond and appeal to the emotional side of their customers as well. Makes for a challenging business case, but critical in times to come to differentiate!
7. Coalitions are in! : Though conceptually well designed and executed coalition programmes offer significant consumer value, few have attained scale and profitability. With cost pressures increasing and an evidently clear need for delivering a greater impact to customers, brands may find it more appealing to directly participate in coalition programmes than be overtaken by third party aggregators and service providers in engaging their customer sets. The game lies in leveraging consumer insights to drive transactions which should overcome fears of losing customers and walletshare to competing brands. The battlefield is not in the coalition programme. The larger battlefield is in the consumers mind!
8. Greed is Good and so is Redemption : Mr. Gecko has propounded the former. We need to believe in the latter. Let there be game changers in the industry that incentivize redemption. The key question to be answered. If you don't want redemption...don't give out zillion points. Invest the money elsewhere.
9. It's just not about the Consumer : Employee and channel partner engagement are equally if not more important than the consumer engagement programmes! Look forward to seeing a higher salience of budgets towards these streams.
10. Instancy : The differentiator is going to lie in recognizing behavioral & transactional trends and having a framework that offers dynamic and instant value / gratification experiences to the consumer. A thank you email 33 days after my flight is not going to cut ice. A point statement once a month cannot be the only method of information dissemination. A birthday offer 17 days prior to my birthday may not be a standard industry practice to be adopted across product groups. A 100 point birthday incentive may just not excite the customer. The trick would be in getting a fine blend between proactive and reactive mechanism. The mobile and Internet channels have made the delivery channels ubiquitous across brands and consumers. The ball now lies in our court!
Would look forward to your views and lists!
Saturday, January 1, 2011
Should a brand assuring no frills service and honest value for money fritter away rewards?
An often quoted stand, in quite passageways of course is.... what would our customers think of us if we start doling out reward points? Would we be sending out the right message? Would they start thinking that we can in fact offer them greater discounts? Wouldn't they prefer that they receive an upfront cash discount instead of some fancy points?
1. You are in the business of making profits and your customers know that! So...don't be shy!
2. My customer is price sensitive!..He switches for purchase decision for a few cents!...Undoubtedly, and she would remain so. It's how you play it when the playing field is at par
3. Too much liability!...A liability is created when you don't use the asset.
4. Too expensive!.....This is a matter of execution. It's as risky or expensive as above the line advertising. It's how you can measure the impact and correlate it back to the topline and perhaps even bottomline.
The case for loyalty for brands operating in the low cost consumer domain is possibly as difficult as for other brands.
It's the quest for excellence and the undying passion for capturing market-share that would possibly lead these brands on the journey to better understanding their customers, and hence their loyalty journey.