Loyalty Redefined

Welcome to Marketing 2012: the Relationship Era.

2012-01-26T10:12:00.000-08:00

There’s a fascinating article titled “The Dawn of the Relationship Era in Marketing” that recently appeared in AdAge magazine. It’s written by David Rogers and Bob Garfield, the latter the same guy who caused a stir a few years ago with the essay “The Chaos Scenario” which (semi-correctly) predicted “the end of advertising as we know it”.

This piece isn’t quite so controversial, but it does point out that the role of marketing in the selling equation is changing. The authors posit that we’re witnessing the end of “the Consumer Era” and are now moving into “the Relationship Era”.

The Relationship Era is based around the idea that companies that succeed in the future will do so because they’ve made some sort of human connection with their customer base. The belief is that in the Relationship Era, the big winners will be companies that people trust because they have “solid core values” and “transparent and honest practices".

These companies will spend little on advertising—because they won't need it. They’ve made a personal connection with a core group of customers who trust them implicitly, because they’ve backed up their core values with actions. They can then rely on these loyal customers to spread the word about their products and services and attract new customers.

The authors believe these brand-fan customers will: "…share your links and retweet you on Twitter and post a photo of themselves with your product on Facebook and like you on Facebook and generate all these network conversations, which go back to the top of the funnel and influence other customers in your network at their own stage of awareness, consideration, preference or action."

So how do you get to be one of these beloved companies who people are tweeting and posting about? It starts with a purpose according to Rogers and Garfield. “You have to explain to all comers why you're in business.” Among the companies identified as successfully “explaining” themselves and their values are Apple, Whole Foods and Trader Joe’s.

One prime example that’s cited is outdoors outfitter Patagonia who for years has had a purpose that resonates with its customers: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. The company then backs up this mantra with real-world actions, donating 1% of its gross sales to environmental causes, promoting environmental sustainability in every aspect of its operations and providing progressive workplace policies like paternity leave and paid sabbaticals.

Another company identified as a having authentic purpose: Krispy Kreme. After a rough start to the decade, in 2009 a new
management team went searching for the company’s raison d’etre and came up with: "Touching and enhancing people's lives through the joy that is Krispy Kreme. Management then “decreed that the joy ethic inform every interaction at every level of the business.”

My take: I can buy into the Relationship Era—but only to a point.

It’s hard to argue with companies like Trader Joe’s and Patagonia, that have carved out their own unique niche in the marketplace with little to no advertising, but lots of positive word-of-mouth and social networking buzz. After all, what’s not to like about free advertising? But the fact is, these kind of companies are few and far between.

Put under a microscope, I’d say the majority of US companies would be unable to pass the “authenticity” sniff test. Even successful companies often aren’t nimble or visionary enough to coalesce around a single purpose and execute it in the marketplace. It’s just not in their DNA. For instance, I wonder if every Krispy Kreme franchise has really been able to add “the joy ethic” to every business transaction.

The good news: companies that lack a specific purpose their customers can rally around, have other ways to grow their business and increase brand loyalty. This includes doing all they can to improve the customer experience from pre-sale to post-sale. It also means enhancing customer engagement, so that customers are communicated with in personal, relevant ways across a variety of touch points.

What do you think—is the Relationship Era upon us?

This article is by Tom Rapsas. You can reach him via LinkedIn.

They've got my data: Now Barnes & Noble is trying to get my business.

2011-12-19T15:12:00.000-08:00

I’m a former customer of the now defunct U.S. bookseller Borders and a past member of their Rewards Perks program. While I freely admit to moving a lot of my business to Amazon.com over the years, I was sorry to see Borders go.

Maybe it’s nostalgia, but every once in a while I like to walk into a book store, stroll the aisles, and leisurely look for a title or two I may have missed. Just like reading a physical book has a tactile advantage over an e-reader, I also think a physical store has a sensory advantage over a virtual storefront—which for me, unfortunately, ultimately gets trumped by the superior selection and lower prices of an Amazon.

But back to Border’s. When the pieces of the company were sold off, competitor Barnes & Nobel made an important purchase that went beyond the chain’s physical inventory—they bought Borders’ customer contact info and importantly, their purchase history, giving them the data they need to send out personally relevant communications.

The wooing has begun, as B & N is now attempting to turn me from a qualified prospect to a customer. They’ve sent me a few e-mails to date and while I think my scant recent personal history prevents them from sending truly relevant messages, I do appreciate their efforts.

From a communications perspective, I think they’ve made a smart progression from showing sympathy over the loss of Borders, to being transparent when revealing the use of my Borders’ customer data, to being justifiably “retail-y” as they seek my business. See the messaging sequence below:

October 1: Sympathy Over the Break-Up
Dear Borders Customer,
My name is William Lynch, CEO of Barnes & Noble, and I’m writing to you today on behalf of the entire B&N team to make you aware of important information regarding your Borders account. First of all let me say Barnes & Noble uniquely appreciates the importance bookstores play within local communities, and we’re very sorry your Borders store closed.

October 15: Honesty and Transparency
Dear Borders Customer,
As a reminder, on September 30, 2011 Barnes & Noble acquired the Borders customer list. The transferred personally identifiable information in the customer list includes customer e-mail addresses and purchase history. No credit card data was transferred. If you would like to opt out of having your customer data transferred, please go to www.bn.com/borders by November 2, 2011.

November 7: Asking me out on a first date.
Subject line: Let’s get to know each other, starting right now.
You’ll always be welcome here. Nothing says welcome like an extra 30% off your first purchase at Barnes & Noble.

November 26: Attempt at a second date.
Subject line: A convenient 40% off at the always convenient BN.com
Your nearest Barnes & Nobel is open 24/7—at BN.com. Take an Extra 40%off one item.

I think Barnes & Noble is in a tough spot and agree with many that they’ll be the next domino to fall in the radically changing book industry. That said, I do think they’re doing a good job trying to convert prized prospects—former Borders customers like me—to the B & N fold.

In fact, I recently used the 40% off coupon above to make my first purchase. Now the true test will be whether or not they can convert me into a regular customer.

This post is by writer/creative director Tom Rapsas who can be found here.

The end of advertising: the 2011 version.

2011-11-07T14:21:00.000-08:00

As I scanned the rapidly moving traffic on my Twitter feed the other day, there was one tweet in particular that caught my eye. It was from the journalist David Carr who was quoting Adam Moss, the editor of New York magazine:

"I think the advertising business is in greater upheaval than the journalism business."

As an ad guy, I had to dwell on that one for a moment. When I think of industries in crisis due to the onset of the digital age, the newspaper business—which is bleeding customers to free online news sites—pops up neck and neck with travel agents. But after careful consideration, I realized that Moss had a point.

Putting aside for a moment the dismal state of the economy and its impact on ad spending, the upheaval in advertising has been going on for several years. First it was a move away from traditional advertising vehicles (TV, radio, print) to online media (e-mail, banners and Web sites). This set off the first wave of “advertising is dead” claims.

In 2005, with an article titled “Chaos Scenario”, and with a follow-up in 2007 called “Chaos Scenario 2.0”, Ad Age columnist Bob Garfield wrote about “a post-apocalyptic media world substantially devoid of brand advertising as we have long known it.” In 2009, IBM issued a white paper titled “The end of advertising as we know it” that discussed, “the shift in consumer attention from television to other media formats.”

But these commentaries, while pointing out the move from traditional media to digital, only hinted at what’s taking place in 2011. Today, the really big change involves the continuing evolution of social media and consumer review sites.

Some pretty big names in the world of marketing are again saying it’s the end of advertising, but their message has been tweaked a bit. The claim: the ever-rising influence of Facebook, Twitter and now Google Plus, and consumer review sites like Yelp, Angie’s List and Trip Advisor, have made advertising obsolete.

Here are a few notable, recent examples of those who’ve jumped on the 2011-version of “advertising is dead”:

• In May, at ad:tech San Francisco, Antonio Lucio, the global marketing chief of Visa, claimed that “recommendations are the new advertising”. Lucio and suggested that brands develop "an army of advocates" to promote their products via social media in lieu of traditional media.

• In June, writing in Forbes, the head of global agency Gyro, Rick Segal, extended the “advertising is dead” claim to B-to-B marketing. He stated that: “Death was inevitable when people began carrying their telecommunications and computing power with them.”

• In September, at the interactive OMMA Global conference, futurist Faith Popcorn got even more declarative. She said that with arrival of the “hyper-connected” consumer “advertising is so over. If the consumer believes you’re paying for their time, they don’t really believe in it.”

Add to this scenario several years of shrinking advertising budgets, and it’s easy to see how some might gravitate to an “advertising is dead” mindset. After all, it’s easier and cheaper to plow your limited marketing dollars into social media and gaming the consumer review sites than trying to target a market whose media choices are increasingly fragmented.

My take: advertising will survive—but it’s morphing into something new.

Traditional advertising—and I think that category now has to include e-mail and Web banners—will stick around. After all, social media alone is not right for every business, every target market and every marketing situation. But there’s no doubt that the way we reach customers is continuing to change, as we recalibrate the best ways to reach customers in a personally relevant and timely manner.

A good communications program is still about engagement, our ability to attract new customers and nurture relationships with our current customers through a compelling and strategically sound message. And when it comes to achieving these aims, there’s no one-size-fits-all solution. Especially with the ever-changing way customers digest their information.

A surprising recent study (albeit, by the US Postal Service) showed that direct mail was actually preferred over e-mail by the Gen X demographic. And social media burnout has been well-documented as well, with a groundswell of people choosing to shut down their Facebook and Twitter accounts—or at least interact with them a lot less frequently.

So in the future, I think that successful marketing campaigns will be as diverse as the audience you’re trying to reach. It’s as likely to include a personalized e-mail as a promo on Foursquare, a targeted mail piece as a video on YouTube. The key is in finding the right mix for your target market, and making sure that your communications are as compelling, timely and relevant as possible.

What do you think?

Amazon and the future of loyalty marketing: rewards now, not later.

2011-10-06T14:49:00.000-07:00

I’ve long been a fan of Amazon and as proof carry an Amazon.com-branded Visa Rewards Card in my wallet. Sure, the interest rate is a few points higher than my primary credit card, but I’m a sucker for the points. I earn one for every dollar I spend and a whopping 3 points for every dollar spent on the Amazon Web site.

Over the past several years, the Amazon program worked like most others: you waited for your points to add up to a certain threshold, continually checking your balance online or on your monthly bill, and then ordered your reward. While there were a number of options, I always went for the $25 Amazon certificate available at 25,000 points.

But last month, something changed: while checking out, I noticed a small prompt about using my current point balance toward the payment of my order. Sure enough, I had earned 1693 points since my last cert was issued—and was able to apply a $16.93 credit to my purchase, right on the spot.

I mean, how convenient was that! No checking my points balance to see if I had reached the 25,000 point threshold, no ordering a certificate, no waiting 3-4 weeks for the cert to appear in the mail. I was able to get instant savings and in turn, instant gratification.

Now I can imagine this scares the bejesus out of some loyalty marketers because, having worked in hardcore points-based loyalty for several years, I know the philosophy. By forcing people to reach elevated point thresholds, you keep them as customers—because they have to stick around and make additional purchases to reach these thresholds, and are less likely to abandon their points for a competitor.

But you know what—the times in the loyalty marketing game are changing, with a mix of established and newer companies leading the charge. For example, check out the following recent developments:

*Marriott announced Marriott Rewards® Instant Redemption which enables members to redeem points on the spot at participating US hotels—for “dinner, cocktails, massage, golf…even a room upgrade…with no certificates, no waiting.”

*Location-based marketer Foursquare inked a deal with American Express to enable its 10 million cardholders to redeem location-based deals by swiping their AmEx card—giving them access to instant membership rewards.

*Online retailer Soap.com (as reported by Internet Retailer) rolled out “a customer loyalty program with a new twist. Instead of launching a traditional customer loyalty program that lets shoppers gather points…they reward customers with instant product discounts.”

I say it’s only a matter of time before all the traditional points-based loyalty marketers, including the airline programs, jump on the instant rewards bandwagon—or find themselves left behind by the competition. Sure, there may be a place for the hard-earned mega-point reward, but you better give your customers the option of quick and instant rewards and recognition.

What do you think?

This post originally appeared on Loyalty Truth and was written by Tom Rapsas.

Why pharmaceutical companies are suddenly allergic to Facebook.

2011-08-22T09:37:00.000-07:00

One of the primary reasons for a company to be on social media is to build relationships and engage customers in a dialogue. So why are a lot of big-time pharmaceutical companies about to walk away from their Facebook pages?

It seems that up to this point, Facebook gave pharma companies the ability to “turn off” commenting on their pages, a privilege they didn’t grant to other industries. This suited the risk-adverse pharma folks just fine as it gave them the ability to “block” comments they didn’t like.

But all that came to an end on Monday, August 15. You see, a few months ago Facebook sent an e-mail notifying all pharma page administrators that the social media site was changing the rules and that “pages that currently have commenting disabled will no longer have this entitlement after August 15th.”

As reported on Web site ClickZ, this poses a major problem in the US:

Pharma marketers are required to report adverse effects of their drugs, so if someone posts a comment about an adverse effect on a Facebook page, the company is responsible to report that to the Food and Drug Administration. Also, when they become aware of online conversations including incorrect or off-label information about their drugs and products, they need to notify the FDA.

Can anyone say big can of worms? It also means the pharma companies can no longer prevent those who have had adverse side effects from a drug from posting their comments online for all to see.

As pointed out in the Pharma Marketing Blog, all it takes is one disgruntled customer to cause havoc. The European drug company Sanofi-aventis chose to shut down its Facebook page after a string of negative comments from a cancer survivor who had permanent hair loss after taking the drug Taxotere.

So what’s next? As pointed out in the blog Pharma Exec, companies now have three choices:

1. Go dark and wait for the FDA to issue guidelines on how to report potential adverse events they may discover on their Facebook pages.
2. Go dark temporarily and build the infrastructure to cope with the real time flow of consumer commentary.
3. Continue on with Facebook, backed by the staff to monitor Facebook and other social networking sites.

A few major drug makers have already chosen options one and two. Over the weekend, the Washington Post reported that AstraZeneca and Johnson & Johnson, have decided to remove their Facebook pages as a consequence of the policy change. Other companies said they will monitor their pages more closely now that the changes have taken effect.

But my thinking is, as more and more consumers lean on the Web as their primary source for information, you’ve got to have the social media bases covered, including Facebook. After all, if someone has something bad to say about your product, if it doesn’t come out on Facebook, it’s bound to appear somewhere else. And it’s better to be in a venue where the playing field is level and you at least have the chance to respond.

What do you think?

Saucony: Building Loyalty without a Loyalty Program.

2011-07-12T13:07:00.001-07:00

Saucony is a mid-sized running shoe company that’s battling for customers with athletic gear giants like Nike, Reebok and Adidas. So how do they compete? By making an emotional connection with first-time buyers, and then introducing them to an online community that helps turn them into loyal customers.

Now, no one develops a loyal customer base without having a great product—and Saucony does. Their constantly evolving product line generates consistently strong reviews from customer influencers like Runners World magazine. But what really sets Saucony apart, is its engaging and inventive advertising, specifically its Web and social media presence.

Last month I wrote that the key to a great social media campaign is a big idea—and Saucony has one that starts with its general ad campaign, and is then layered into its Web and social media efforts. The campaign theme is “What is Strong” and in TV and Web spots, runners are challenged to define what strong means to them and encouraged to “Find Your Strong”.

The “strong” theme is featured prominently throughout the Saucony Web site. Runners are invited to “Create & Share Your Personal Strong” by entering the things that make them strong, including how they train and what inspires them. You can then share these thoughts via the Web site, Facebook or Twitter—and even have your strong statements made into a T-shirt.

Coolest of all, is the campaign’s interactive online gallery. You can choose to participate in, or just view, a clever and well-designed series of word portraits that show how other runners have answered the query “This is My Strong”. Call-outs include things like “6am Run”, “My Mom” and “My City-New Orleans”.

As expected, the Sacuony Web site is chock full of pages on the latest running shoes and apparel, as well as the technology behind it. But what’s compelling and differentiating here is the online community, where runners can gain inspiration from both elite and everyday runners.

The writing is great throughout, as well. For instance, the Community page greets you with language that runners (like me) just eat up: We all share a common love of running. A common pride in personal bests. A common disdain for potholes and cramping. A common interest in other runners. Welcome, runners all.

Great job, Saucony. And while I must admit to being a long-time Nike loyalist, I’ll be taking a very close look at Saucony the next time I go shoe shopping.

This post originally appeared on Loyalty Truth and was written by writer and creative director Tom Rapsas.

Your Social Media Strategy Needs Some Big Ideas.

2011-06-13T12:14:00.000-07:00

I borrowed the headline above from a recent B-to-B article by Jeff Ernst, a principal analyst at Forrester Research. I think it perfectly underscores something I’ve been saying for a while now: It’s about the power of the idea, not the tactic. (My colleague, loyalty expert Bill Hanifin, has a similar mantra: Technology enables. Imagination wins.)

While most companies are now testing the social media waters with a presence on Facebook and Twitter, it’s best to have a strategic plan of attack before diving in. In the words of Ernst, “Starting with tools and tactics spells disaster. You need to start by understanding the social behaviors of your target audience and defining the big ideas that will attract and engage them.” But before discussing big ideas in social marketing…

First things first: you’ve got to show up.

To paraphrase Woody Allen, “90% of social marketing is just showing up”, and by that I mean being active on whatever social media tool you’re using. That means starting conversations, answering queries, and when necessary, defending your company or brand. To do this, you’ve got to set aside a small portion of your day to social media activities. (For me, its 20 minutes each morning.)

Next step: you need a big idea.

What’s a little more challenging is the next 10% of the equation—coming up with the big ideas that give your customers something to talk about. As Jillian Ney pointed out in a recent post on Social Media Today, “The motivation has been to collect fans and followers, which have resulted in many branded social spaces not actually providing any entertainment or value.”

In many ways, a great social media campaign has much in common with a great traditional ad campaign—the best ones are centered around a big idea. To achieve “big” status, your idea needs to have the power to inform, entertain and/or engage your customers, while getting them to take a desired action, whether it’s signing up for e-mail, retweeting a message or checking in with you on Foursquare.

Here are three social media ideas that I think work hard for their brands.

Why? They go beyond simply blasting messages into the social media space, and actually get people to interact with the brand. They also leverage ideas that are natural tie-ins to the image and essence of the brands being promoted.

Paula Deen and “the real women of Philadelphia”. A promotion for Philadelphia Cream Cheese, it invites customers to submit original recipes using Philadelphia brand products, with 16 finalists selected to join celebrity chef Deen in a live “Cook Off” where four grand prize winners will be chosen. While I’m not a big fan of celebrity endorsements, this one feels like a natural, since it’s easy to imagine the down-home Deen actually using Philadelphia Cream Cheese in her recipes. Importantly, the site has done a nice job of putting Paula’s ebullient personality to use through online videos and social media like a “live chat” on Twitter.

Coleman, “the original social networking site”. Coleman, the camping gear company, has done a great job of tying their brand into social networking, starting with their clever “original networking site” positioning. A Facebook page promotes their easy-to-build tents with a “Summer Time in no Time” giveaway. There’s a Twitter page that could be a little more active, but does address the occasional customer query, plus a YouTube channel and Twitter app that fittingly let you check out “creepy campfire stories”.

Fair Tweets from Ben & Jerry’s. Another big idea comes from ice-cream maker Ben & Jerry’s. We think of Ben & Jerry’s as a very socially conscious brand and they prove it with Fair Tweets, which uses Twitter in a way I haven’t seen before to promote Fair Trade, a global organization that works to get better deals for farmers. It works like this: You go to the Ben & Jerry’s Fair Tweet page, and being typing in a tweet. The site then “puts your unused Twitter characters to use”, by turning any leftover characters (from your 140 character cap) into a message about Fair Trade. 33 characters left? A 33-character message is tacked on to the end of your tweet. Very cool and an ingenious way to spread a public service message.

How about you. Have you seen or worked on any big social media ideas lately?

Atlantic City, Trump and a Casino Down on its Luck

2011-05-20T09:28:00.000-07:00

A couple of years ago, I wrote a post about Atlantic City and its prolonged losing streak—and I’m sorry to report, things aren’t looking a whole lot better today. After a rocky 2009, revenues in AC fell again in 2010 by nearly 10%. And forecasters say that 2011 could be even worse.

In an attempt to rejuvenate the fading gambling mecca, NJ governor Chris Christie, citing the “complete incompetence and corruption in Atlantic City”, recently pushed through legislation that makes him the city’s de facto mayor. (Which led actual Atlantic City mayor Lorenzo Langford to complain “the state is treating Atlantic City like a pimp treats a prostitute.”)

One of Christie’s first moves was to spearhead the formation of an Atlantic City tourism district, which covers a large portion of the resort city. The state will take over responsibility for public safety, cleanliness and business development. Not a bad idea, given the seamy vibe that permeates AC once you set foot outside a casino.

With that backdrop, let me tell you about a recent trip I made to the Trump Marina casino and hotel.

First thing you should know about Trump Marina is that US billionaire Donald Trump is nowhere to be found. A few years ago, the three Trump casinos in Atlantic City were about to go broke, and he sold off all but 10% of the properties. So it’s really Trump in name only—and at Trump Marina, soon even that will be gone. Houston-based Landry’s Restaurants, owners of the Golden Nugget in Vegas, are buying the casino and will reportedly rebrand it with the Golden Nugget name.

My trip to the casino occurred during a recent boys’ night out to attend the Atlantic City Beer Fest, followed by some obligatory late night gambling. With my trusty Trump One player’s club loyalty card in hand, I hit the casino floor late on a Friday night into Saturday morning. The place was half-dead and I mean that literally, as half the casino floor was shut down due to a lack of business.

It’s not a bad place, actually a welcome break from the more glitzy and more crowded Borgata—and it wasn’t a bad night either, which for me means I walked out with the same amount of money I walked in with, while enjoying a few cold beverages on the house. (My buddy Jim fared a bit better clearing over $400 from a four-hour session at the poker tables.)

Now, I don’t expect much from my Trump One loyalty card while I’m at the place—I’m a lower tier member—but I do expect a little recognition and better customer experience when I go to the Web site, which I did a few days later to make sure my playing was being tracked. It was, but I felt a little less than welcome.

A few notes on my Web experience:

• I had trouble remembering my password—I had selected it late one night with a code word that probably made sense at the time, but was now totally lost to me. I sent a message asking for help, but received a canned e-mail reply telling me the only way I could retrieve my password was to go to the casino. No password reset function. No one to call.

• After 50 or so tries, I did remember the password to my Trump One account—let me tell you, it was pretty obscure—only to find little relevant information for me on the site. I click to view my “Statement”—it’s not there, I need to call to get the info. I click on “Rooms” and a blank screen appears.

• Even if I hadn’t hit the threshold to receive an offer or room reward, the site needs to engage me. Give me a few dollars off on my next stay. Offer me a free app if I eat at the restaurant. Tell me you can’t wait for me to come back. Show me some love!

But it looks like I’ll have to wait for the new regime to get some personalized attention. A NY-based management company is now running the Trump casinos, and according to a company exec quoted in the press, they’re “focused on cutting costs, including marketing programs that were deemed to be too expensive…we were over-incentivizing our customers…it was not a sustainable model.”

Granted the house needs to make money, but cutting back on “incentivizing our customers” seems like the wrong way to go about it—and a good way to lose an ever decreasing pool of loyal customers that is opting to go to the more glamorous Borgata—or other, newer casinos that have popped up in Philly, Delaware and New York.

But my guess is now that the Trump Marina has been sold, the caretakers have packed their bags and are waiting for the new owners to arrive so they can turn over the keys. Soon the Trump Marina will be history—and the Golden Nugget will take its place.

It’ll be interesting to see if they bring new vim and vigor in the attempt to attract—and more importantly, retain—customers.

This post, by Tom Rapsas, originally appeared on Loyalty Truth, May 11, 2011.

Should Loyalty Redefined sell out?

2011-05-04T09:19:00.000-07:00

I’m looking forward to seeing the new Morgan Spurlock movie Pom Wonderful® Presents: The Greatest Movie Ever Sold. Unfamiliar with Spurlock? He’s the raconteur behind the funny but frightening documentary Super Size Me, in which the protagonist ate nothing but McDonald’s fast food for a month—which caused him to become fat and physically ill.

This time out Spurlock demonstrates the ubiquity of branding messages in our lives, by literally selling out his new movie. In a series of filmed encounters, Spurlock urges brands to sponsor his movie for a price—and is able to entirely fund the film through product placement and sponsorships, including a cool $1 million from pomegranate juice maker Pom for a spot in the title.

This got me thinking: maybe Loyalty Redefined proprietor Upendra Namburi should sell out this blog site. With so many loyalty programs out there, the possibilities are limitless. Consider: Loyalty Redefined sponsored by Hyatt Gold Passport or American AAdvantage presents Loyalty Redefined or how about i-mint, Loyalty Redefined & You.

After all, we’ve sold out our sports stadiums—from Pizza Hut Park, home of US Major Soccer League’s FC Dallas to the silly KitKat Crescent, home ground of England footballers’ York City, to Easy Credit Stadium, the ridiculous sounding home of German pro soccer team FC Nürnberg.

What’s more, we’re now advertising in virtually every space known to man. This includes the walls and stalls of bathrooms, corporate logo tattoos that turn people into walking advertisements (in one case, for a 20% discount for life), and the latest innovation in advertising space sales—entire homes turned into billboards.

With that backdrop, why shouldn’t Loyalty Redefined sell out as well? I hereby declare myself Updendra’s agent. Bidding starts at US $100K. Any takers?

Creative Director and writer of this post, Tom Rapsas, will be accepting offers at tomrapsas@gmail.com

Did Social Media cost Pepsi the #2 Soft Drink Spot?

2011-04-08T11:02:00.001-07:00

It was recently reported in the trade press that Pepsi had slipped to the #3 soft drink in U.S. sales, behind Coke and new #2 Diet Coke. But most interesting was the speculation behind the drop. In an Ad Age article titled “How Pepsi Blinked, Fell Behind Diet Coke”, it was hinted that Pepsi had put too many of its marketing eggs in the social media basket.

Some background: In 2010, the company launched the Pepsi Refresh Project. As I reported in a previous post: This Web-based initiative asks customers to submit ideas that they think will have a positive impact on the world, including everything from building community playgrounds to caring for wild cats. Consumers vote on ideas they think should be funded, and to date Pepsi has committed over $15 million to nearly 400 winning ideas.

The Refresh Project was backed by a big social media presence and its launch coincided with Pepsi’s move away from traditional advertising channels, including an ad boycott of the Super Bowl and other major marketing events. (By comparison, Coke is ubiquitous, sponsoring everything from the NCAA tourney to NASCAR to the hit TV show American Idol.)

In the Ad Age article, John Sicher, editor and publisher of Beverage Digest, expressed his concern about Pepsi’s marketing efforts saying, "In the cola wars, the Refresh Project by itself isn't enough to market Pepsi's cola brands." Sicher believes that in addition to Refresh, the company needs “more product-oriented advertising and marketing. I think that the 2010 results are probably a wake-up call for Pepsi."

In an Ad Age editorial, Rance Crain chimed in "there's also the danger that consumers could conceivably tire of causes or decide that Pepsi, a marketer long known for its ability to amuse and entertain, is taking itself too seriously. After all, we're talking about fizzy soda water here."

Julie Rohem, the ex-marketing chief of Wal-Mart, also expressed her doubts about Refresh in a recent blog post: “the message had nearly nothing to do with the product or the sale of that product. It was altruistic and admirable but it did not engage people with the drink itself—only the endeavors that the campaign supported. Pepsi at the end of the day is a mass brand and that means appealing to the masses on the product first.”

So was the Pepsi Refresh Project a mistake? A qualified yes—if the company really thought it could abandon its more traditional advertising efforts for one that pitched good vibes instead of good taste. A message of corporate benevolence is all well and good, but it feels like the company forgot the primary goal of any marketing department: move the product.

That said, Pepsi should also be commended for doing something a lot of bottom line-focused companies have ignored in recent years—giving back to the community. Handing cash to initiatives like “supporting the rescue and care of injured and orphaned wildlife ” and “getting the lowest income students in our community into college” is truly a noble endeavor.

It’s enough to make this bleeding-heart chug a cold bottle of Pepsi or two. If only I drank cola.

This post by Tom Rapsas originally appeared on Loyalty Truth, March 31, 2011.

Advertising is Changing. Are You Changing With It?

2011-03-21T13:44:00.000-07:00

The customer has escaped. We can no longer control the process of how and where they get information. ~Marjorie Kalter

There’s a sea change taking place in the way we communicate with customers, and these changes are rewriting the definition of advertising as we know it. In fact, I believe that as marketers we now two choices: swim with the tide or have the new communications wave roll over us.

The truth is that the effectiveness of old-fashioned “push” advertising, whether it’s a TV spot, print ad or e-mail, is waning. More and more customers, especially in the under-40 demographics, are ignoring traditional advertising altogether, and turning exclusively to the Web and social networking tools for product and service information and recommendations.

Some have labeled this change “Advertising 2.0”, but one of the movement’s philosophical godfathers, Edward Boches, simply calls it “the evolution of advertising”. Boches is the long-time creative leader at Boston-based ad agency Mullen, which in the past couple of years has transformed itself from a traditional ad agency into “a firm that blends digital, social, media, creative, mobile and direct response”.

I’ve been looking at some recent slide presentations and blog posts from Boches, and he has a number of compelling insights about the changes taking place in the industry. Here are a few choice ones:

• Customers don’t want to watch and read and consume. They want to participate, share and respond.

• Once we were in the business of telling stories. Now we are in the business of getting others to tell stories for us.

• User experience and engagement are the new art and copy.

Boches also sees changes in the future of traditional advertising, believing that as brands become less dependent on advertising and messages, they will focus on ways to become more relevant and useful. Think of it as advertising that does less selling and more connecting.

A prime example currently in the marketplace is the Pepsi Refresh Project. This Web-based initiative asks customers to submit ideas that they think will have a positive impact on the world, including everything from building community playgrounds to caring for wild cats. Consumers vote on ideas they think should be funded, and to date Pepsi has committed over $15 million to nearly 400 winning ideas. Does the site sell Pepsi? I suppose so, but in a very indirect way.

Will this advertising change effect loyalty marketing? It already is.

In loyalty marketing, it’s time to think about going beyond the everyday communications of postcards, e-mail and statement inserts. It’s time for a full-throttled commitment to an idea I first began talking about in 2002: starting a dialog with customers. (Not that I can take credit for the concept, it was the brainchild of Frequency Marketing’s visionary founder Rick Barlow.)

This means communicating with your customer base when and where it works best for them, via the social media channels where they congregate—which these days is sure to include Facebook and Twitter, and possibly Foursquare. It also means opening up the lines of communication via your company Web site and blog.

There are also marketing opportunities galore in leveraging your current customer base, by giving them perks that encourage them to spread the good word about your product or service. For instance, when US-based restaurant chain P.F. Chang’s introduced its Home Menu frozen meals to grocery stores, its first communications target was the brand’s loyal customers.

P.F. Chang’s selected members of its loyalty program and customers engaged in the brand’s social media channels (Facebook and Twitter) and asked these fans to raise their hands and tell why they loved the brand so much. Those who participated in spreading word of mouth were entered into a sweepstakes to win one of 50 home dinners for two, complete with custom table settings.

The bottom line is that, like it or not, the way we communicate with customers is changing. The question is, are your clients or your company changing with them?

This post originally appeared on Loyalty Truth, March 16, 2011, and is by Tom Rapsas. Tom is a creative director and writer and can be reached at tomrapsas@gmail.com.

Borders and the Long Good-Bye.

2011-02-28T08:06:00.000-08:00

By now, you may have heard about the big financial mess that the US-based Borders book store chain is in. They recently filed for Chapter 11 bankruptcy and it’s hard not to see the whole situation winding up in a very bad place--sooner rather than later.

The Borders predicament is emblematic of a continuing shift in the way we purchase goods and services in the digital age. The canary in the coal mine were the travel agents, who saw themselves squeezed out of existence once consumers figured out they could just as easily make travel plans on their own.

The next domino was the music business, and with the advent of Amazon and e- books, now the book industry. Even though Borders has a nifty Web site, they unfortunately entered the digital game very late—and as the demand for physical books shrinks, you sure as heck won’t be making a trip to the mall to buy an e-book.

It appears that Borders will go down fighting. As a member of the Borders Rewards program, I received an e-mail from Mike Edwards, the President and CEO of Borders, Inc. It was well-crafted and heartfelt, and included the following passages:

As Borders moves forward, our commitment to you is to be a best-in-class bookseller—whether it’s our stores or Borders.com—where you can purchase books and related products that stimulate and satisfy your reading interests.

Over the next several months, we will build on our core strengths as a great bookseller with the goal of emerging as the destination of choice for the millions of customers who shop our stores each year.

Sorry, but I’m not buying it. And the fact I’m not buying it leaves me feeling a little sad, as I think Borders was a good chain with some cool stores that I at one time visited frequently. I’m also left wondering which vertical will be impacted next.

This post is by Tom Rapsas and originally appeared on Loyalty Truth. Tom is a writer, creative director and strategist. He can be reached via Twitter @tomrapsas or at tomrapsas@gmail.com.

The Death of Loyalty Rewards As We Know Them?

2011-02-04T10:03:00.000-08:00

I’m sensing a tipping point in how customers relate to loyalty program rewards, and my thinking goes like this: when customers choose which company to do business with, rewards just don’t matter like they used to.

My take is that the classic loyalty reward scheme—earning points toward “hard” rewards for repeatedly doing business with a company—has been trumped by the customer experience. In other words, today’s customer is more likely to opt for a better experience today, than accept a lesser experience that pays dividends down the road.

Lets start with a personal example. I recently cleaned out my wallet of old business and program membership cards. There, I found reward cards for both Borders and Barnes & Noble. Now, I know I have points in both of these programs, but I haven’t engaged with either brand for years. Why? I’ve given all my business to Amazon, which for me offers a better customer experience.

A recent blog by marketing guru Seth Godin points anecdotally to a similar trend toward “experience over rewards” happening in the airline industry. Godin believes that the greater the risk involved with getting a reward—one we have to save for and may never use—the less we value it. He writes:

Frequent flyer miles, for example, began with the promise that if you flew an airline regularly for months (or even years) you'd get a free flight. The airlines oversold the miles and undelivered on the free flights, though, so the reward started to lose its perceived value—too much risk that you wouldn't get the prize you wanted. Many of the frequent flyers I know have ceased to 'save up' and now use their miles for upgrades, moving the benefit closer in time.

Godin’s point is backed up by a recent article in the Miami Herald titled: Are loyalty programs worth it? Travel writer Christopher Elliott cites several real-life examples of customers leaving airline programs, because the rewards are just too hard to earn. He points to a recent stat that seat requests for USAir reward flights had an availability rate of 10% and muses, no wonder “there are several trillion unredeemed miles floating around out there”.

In another sign of the sea change, several companies are now offering customers “loyalty rewards” with no points, or long-term loyalty, needed. Take the telecomm space, where both Verizon and Optimum have recently launched reward programs with merchant discounts, special promotions and exclusive content—with no strings attached. Prove you’re a customer and you’re in.

Why is the trend moving toward more automatic and instantaneous recognition of customers? Godin attributes the change to the Internet, stating “one of the many things the web is changing is our focus on now”. I see his point. Now more than ever, today’s consumer wants things at the speed of the Internet, whether it’s information, customer service—or a perk for being a customer.

Is this the beginning of the end of long-term loyalty rewards? The floor is open. What do you think?

This post, by Tom Rapsas, originally appeared on Loyalty Truth on January 26, 2011, and was also picked up by RetailWire on January 31, 2011.

Announcing a New Loyalty Program with a Single Member: You.

2011-01-18T14:41:00.000-08:00

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 tomrapsas@gmail.com

You've Got Apped!...The ROIs of Social Commerce

2011-01-14T10:42:00.001-08:00

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!)

Mi lista de deseos para el 2011!

2011-01-05T17:24:00.000-08:00

I wouldn't normally consider the Spanish language to be in my comfort zone, but I thought of entering this often cliched and dejavu experience of making predictions, wishlists and defining trending patterns on a different note. So...here goes!...truly hoping the readers more conversant with the English language relate with some of the aspects covered below more than the title!

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!

Low Price Brands and Loyalty?

2011-01-01T05:48:00.000-08:00

Should a low cost airline have a loyalty programme?

Should a budget retailer offer loyalty points?
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?

Some perspectives..
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.

Your views?

It must be the holidays. My inbox is stuffed like a turkey.

2010-12-28T08:23:00.000-08:00

Over the years, my wife and I have signed up to receive e-mails from quite a few retailers. The list includes: Solutions, Ann Taylor, Eddie Bauer, Land’s End, Sephora, Bath & Body Works, Williams-Sonoma, Victoria’s Secret, Wine Library, Crate and Barrel, Gap, Old Navy, Wine.com, Pottery Barn and The Discovery Store.

It wasn’t hard to pull the preceding list of retailers together—all I had to do was open my inbox. It represents just some of the companies that have sent me e-mail pitches in the past 24 hours. The other day I woke up to a record 76 e-mails, fully 90% of which were promotional in nature.

Stacks of gifts under $25, Last Chance for Free Shipping! and 20% off all items read a few of the subject lines. After a while, they all begin to blur together, the electronic equivalent of shouting carnival barkers on the midway or white noise.

Now, I realize the holidays are here, and these stores are desperate to make their numbers for the year. But I wonder about the sheer velocity at which many of these retailers are blasting out e-mails. Virtually every retailer I’ve mentioned is sending out a promotional message a day, some two a day.

My main point of contention with this e-mail deluge though, is the non-personalized nature of the communications. You see, my wife and I have done business with all of the companies I mentioned, some several times over the past year. But judging by the content of the e-mails, you’d never know it. I’m quite certain I’m getting blasted with the same messages as the other 10,000 or 100,000 people on their e-mail lists.

There’s a better way to communicate with me as a customer, especially a customer who has a relationship with you. Here’s what I believe these companies should be doing:

* Send me personalized content.
I should be receiving a least some content based on my purchase history. If the wine merchant knows I have a penchant for red Zinfandel, send me e-mails about red Zin. Look at my past buying behavior so you have some idea of what I’ll be shopping for in the future.

*Ask me how much e-mail I want.
Give me the choice of how frequently I receive e-mails from you. Maybe I want to hear from you every day—or maybe I only want to hear from you once a week or once a month. Engage with me when I want you to, and I may not tune you out.

*Surprise and delight me.
Offer me something different than the other guys. Give me free gift wrapping. Present an old item in a new way. Try less selling, and more telling. For most of us, a good story works better than a hard sell.

The bottom line is if retailers want to prevent me from clicking on the opt out button, they need to do a better job of engaging with me. Remind me why I did business with you in the first place, and why I should do business with you again.

A final note: Happy New Year to all!

This post is by Tom Rapsas and originally appeared on the blog Loyalty Truth, December 21, 2010. You can reach Tom at tomrapsas@gmail.com

I’m not a car guy. So why does Pep Boys want me in their loyalty program?

2010-11-10T09:34:00.000-08:00

So I was standing in line at my local Pep Boys auto parts store the other day. Not that I’m a car guy. I usually pay my trusty neighborhood mechanic Larry to do everything car-related. But the wife needed some new windshield wipers, and I figured this was something I could handle.

Anyway, the guy in front of me in line was buying a roof rack and the cashier asked him if he was in the Pep Boys rewards program. My quick read: this guy wasn’t a car guy either, just a guy going on vacation. His response, as expected, was “no”.

Figuring the cashier would just move on, or hand him a “take one”, she instead asked him for a bunch of personal info on the spot—name, address, phone #, e-mail address —handed him a membership pamphlet and viola, he was enrolled in the program.

I’m next up in line and she goes through the same routine:

“Are you in the Pep Boys rewards program?”

“No.”

“Can I have your name…addresss…telephone number…”

There was no asking me if I wanted to join the program, which I didn’t—I mean I go into an auto parts store about once a year at best. There was also no concern that with only one cashier on duty, the line behind me was now a good five-deep.

The Pep Boys program? Well, it seems okay, with some nice added benefits like free flat repair and discount towing. But I could quibble. The program is a straight cash back rewards program with funding at a fair but flat 5% for all customers. Pep Boys might consider:

• A mix of rewards, so the program isn’t all about the money

• A tiered approach that offers incremental rewards when I hit a specific spend level

• Special bonuses and perks for its very best customers

• A program that does more than enroll customers, but engages with them

My biggest concern is the auto-enroll aspect of the program, whereby you’re enrolled whether you want to be in the program or not. The long-term effect of auto-enrollment is detrimental. Because I didn’t raise my hand to join, the chances of my actual participation are greatly diminished. And ultimately, when the program participation numbers come in, it won’t reflect well on the results.

As you might have surmised, I’m a prime example of a customer who should not have been auto-enrolled. Loyalty program or not, I may never set foot into a Pep Boys again. You see, those windshield wipers I bought—they’re still sitting in the trunk of my car. They need a special adapter to be installed, and I’d just as soon have Larry the mechanic do it. Like I said, I’m not a car guy.

This post is by Tom Rapsas and originally appeared on the blog Loyalty Truth, November 2, 2010. You can reach Tom at tomrapsas@gmail.com

Where’s my free shot of Tequila?

2010-09-29T13:38:00.000-07:00

As faithful Loyalty Redefined readers know, my recreational drink of choice is beer. But every once in a while, my wife and I will entertain friends over a pitcher of Margaritas on the rocks. (Salt, please.)

Many years ago a friend who knows about these things told me the best tequila for the money was Sauza Gold. Looks and tastes just like Jose Cuervo Gold—my friend says better—for a couple of bucks cheaper.

So a few weeks ago, with my supply of Sauza Gold running low, I picked up a bottle at my friendly neighborhood liquor store. Hanging from the bottle’s neck was a promo tag pitching a $2.50 refund if I filled out the form and mailed in my receipt.

Now for me, a $2.50 rebate is right at the threshold of “is this really worth my time and a 40 cent stamp?”, but I eventually mailed it in. I figured the $2.50 minus postage was the equivalent of a healthy tequila shot—so why not take Sauza up on their generous offer of a free drink?

Only I didn’t get a rebate check. Just a postcard letting me know I wouldn’t be getting a rebate because I used a PO Box as my home address—which I have to do, as my quaint little town has no home mail delivery.

The postcard listed a rewards Web site where I could check on my refund, but after entering my name and address into an online form, I got a message back saying they couldn’t identify me. I looked for another way to contact them—but there was none.

Next stop: the Sauza Web site, where there are some nice drink recipes—but again, no link or mention of how to contact anyone at the company. Unless I want to “friend” Sauza at Facebook, which is an additional step I didn’t want to take.

So here lies my conundrum: My relationship with Sauza has always been a simple one. I give them $20 and change, they give me a quality bottle of tequila in return. I would have been happy continuing this relationship for years to come.

Only, they just blew it. Through a promotional campaign that obviously had some bugs in the execution, they found a way to offer me bad customer service—when customer service didn’t even have to be part of the equation.

Suaza: as far as I’m concerned, you shouldn’t have run this promo in the first place, because the bottle of Jose Cuervo Gold sitting next to you on the shelf suddenly got more appealing. But there’s still time for you to make amends.

Like all good companies these days, you should have an ear to the social networking ground listening for chatter about your brand. Sauza, are you listening?

This post is by Tom Rapsas and originally appeared on the blog Loyalty Truth, September 24, 2010. You can reach Tom at tomrapsas@gmail.com

Discover Says They’re #1 in Loyalty. Does Anyone Care?

2010-09-16T08:26:00.000-07:00

I saw a TV commercial for the Discover credit card the other day and they made a claim that caught my eye. It was one of those “we’re #1” declarations, in this case: We’re “#1 in customer loyalty”.

The claim was not explained during the commercial and it got me wondering: to a consumer, what does being #1 in customer loyalty really mean? Is there a benefit, implied or otherwise?

Now I’ve worked in loyalty marketing for several years, and don’t think of myself as jaded—but my initial reaction to the claim was, “who cares?” It actually got me wondering if Discover was #1 in loyalty because they had retained a lot of long-time cardholders with monstrous balances who couldn’t switch cards during these tight financial times.

So I did a little research on the Discover corporate Web site and found some substance behind the #1 claim. There it said that: “Discover Card ranked #1 in customer loyalty among leading credit card brands according to the 2010 Brand Keys Customer Loyalty Engagement Index Report.”

Okay, as a loyalty insider I know a little about Brand Keys. But what does this mean to a consumer? I did a little more digging on the Brand Keys site and read they measured loyalty over several categories with a “combination of proprietary psychological assessments and higher-level statistical analyses, allowing us to statistically fuse the “emotional” values with the “rational” attributes that identify the bond that exists between brand and consumer.”

Hmmm, I was still scratching my head. It didn’t appear to be anything that could remotely be translated into consumer-friendly language. Which got me questioning why the claim was made in the first place.

Customer loyalty is an end result, a desired outcome of the great product and service you offer. So rather than tell me your customers are loyal, tell me why they’re loyal—amazing customer service, lower fees, a unique add-on benefit—and how this will benefit me.

Sure, being #1 in customer loyalty sounds nice, and we do know that Discover puts a happy face on lots of consumers, but these days most people don’t want to hear corporate chest bumping—they want a brand that delivers tangible benefits, with each and every transaction.

This blog post originally appeared on Loyalty Truth, Setember 08, 2010, via creative director/writer Tom Rapsas.

The USPS – Death Spiral of an Industry?

2010-08-10T09:29:00.000-07:00

Suppose you had a business whose sales had dropped 13% over the past year, continuing a multi-year sales decline. You’d probably look for ways to run your business more efficiently by cutting expenses. You might even consider reducing your prices to attract more business.

Well if you’re the United States Postal Service (USPS), you have a different take on what to do about a double-digit decline in revenue: you decide to raise your rates to make up for lost income, in some cases dramatically.

According to BtoB Magazine, in early-July the USPS requested that standard-mail letter rates, the kind used most often for commercial direct mail campaigns, be increased 5%. The USPS also asked that standard-mail parcel rates, used to send small-size merchandise and product samples, be raised a whopping 23.3%.

Raising prices to make up for decreasing sales? Is that any way to run a business?

Mail volume is dwindling because consumers are increasingly using electronic communications as alternatives to postal deliveries. That’s an undeniable fact. The proof: from 2007 through 2009, the volume of mail handled by the USPS fell by 36 billion pieces, a 17% decline and the greatest drop in its history.

This year, the USPS is on track to lose a stunning $6.5 billion. Yet, instead of doing something to manage expenses, the Affordable Mail Alliance reports that in 2009 the USPS managed to reduce labor costs by a mere single percentage point, 1%.

I have long been a proponent of direct mail, believing it best to give consumers a choice of communications vehicles. We’ve also seen studies showing that most people still prefer snail mail over e-mail, viewing it as a welcome respite from their clogged inboxes. But this latest plea for another price increase begs the question: At what point does it become cost prohibitive to use a communications medium whose delivery costs can run up to 100 times more than that of its electronic competitors?

I hate to say it, but maybe it’s time to consider eliminating mail—and the USPS—from the marketing mix.

What do you think?

This post originally appeared on Loyalty Truth, July 26, 2010, and is by Tom Rapsas. You can follow Tom on Twitter: @TomRapsas

Dogfish Head: Smart Marketing on Beer Money.

2010-07-14T11:07:00.000-07:00

Suppose you’re a local craft brewery, without the marketing resources of a Coors, Miller or Sam Adams. You don’t have money in the budget for national TV commercials—or any TV spots for that matter. So how do you get the word out about your award-winning brews?

If you’re Delaware-based Dogfish Head, you make the most of your marketing dollars—by leveraging the Web and social media to help spread the word and turn casual customers into loyal fans.

Now if you’ve ever had a bottle of any type of Dogfish Head, you’ll know that this is one company that knows what they’re doing when it comes to making beer. Dogfish Head brews are consistently tasty, distinctive and often complex in flavor, with notes that are more akin to a fine wine than a beer.

So it probably comes as no surprise that these passionate brew masters have brought the same level of passion and flair to their brand marketing efforts. A few highlights that set the brand apart:

A robust Web experience—at the Dogfish site, you can read about the latest Dogfish Head releases as well as happenings at the brewery and company restaurant. What’s important here is the sheer depth of the content. Each brew—and there are lots of them—has it own page, with the story behind the beer, tasting notes and even food pairing recommendations.

An active presence on Facebook and Twitter—the key to success on both of these social sites is to keep the material fresh and interact with those who reach out to you. Dogfish Head does both and has over 55,000 Facebook followers and 18,000-plus on Twitter, impressive for a microbrew.

Its own video-rich YouTube channel—most of the videos feature founder Sam Calagione with a behind the scenes look at the brewing ingredients and process. Sam is personable, has a good camera presence and his commitment to his craft comes through loud and clear.

A community of fans—what better way to develop brand advocates than to develop a place where they can congregate and interact. At the site’s community forum, members can pontificate on issues ranging from music to home brewing to, of course, Dogfish Head’s latest releases.

On a personal note: my favorite Dogfish Head beers are the delicious 60-minute IPA, or when I’m in the mood for a more intense “sipping” beer, the raisin-infused Raison D’ Etre.

Cheers!

This blog originally appeared on Loyalty Truth on July 1, 2010, and is by Tom Rapsas. Tom can be reached via Twitter @TomRapsas

How To Revitalize An Aging Brand. (The Return of the Hoodoo Gurus.)

2010-06-21T12:54:00.000-07:00

I’ve been a fan of the Australian rock band the Hoodoo Gurus since the 1980’s, when they were college radio favorites with hits like Bittersweet, Come Anytime and What’s My Scene. The group’s sound has been described as everything from power pop to garage punk to surf rock, and has aged well—at least if you consult the number of plays the Gurus get on my iPod.

The band has been under the radar in the US for a decade or more—but a few weeks ago, the Gurus put out their first new music release in several years. Titled Purity of Essence, it’s better than anything they’ve done since their heyday—a tuneful, hard rocking set that I’ll be playing loud on my way to the beach this summer. (Recommended download: I Hope You’re Happy.)

The good vibes got me thinking: How do you revitalize and market an aging brand? In this case, how would you bring to life an aging rock band that has been out of sight & out of mind for years? Should the brand image be repackaged for a younger market? Can it be done without putting a lot of money behind the effort?

Here’s my quick take on what the Hoodoo Gurus, or any mature brand, can do to make a go of it in today’s market.

*Capitalize on name recognition – Is a rebranding needed? Not here, as the Gurus name has enough cache to bring back happy memories to fans of a certain age. In rock and roll, nostalgia still rules, as evidenced by the fact geezer bands from Rush to Crosby Stills & Nash are still successfully touring. By comparison, the Gurus, now in their late-40’s, are relatively young.

*Revitalize the product – The group could have rested on past laurels with a “greatest hits” release, but instead has opted for a brand refresh—a new CD that puts a fresh new spin on their sound. This increases the chance of winning new fans as well as rekindling the interest of older ones.

*Connect with thought leaders – While the new release has received good reviews from mostly obscure music blogs (save a glowing review in allmusic.com), they need to connect with the leaders in the space. This includes Rolling Stone and Pitchfork, and of course the leading rock radio outlets including XM and Sirius. Push, push, push, to get the new CD reviewed—and played—wherever possible.

*Use social media to get the word out – Social media represents the best way to reconnect with a now scattered fan base. While the band has set up Facebook and MySpace pages, it looks like there could be more interaction from band members, especially regarding fan posts that reference old videos and shows. Make the conversation a dialogue, not just a monologue.

*Take the show on the road – There’s nothing like a live product demonstration, especially when it comes to rock-and-roll. So I recommend the Gurus dust off their passports and hit the road for a tour. If they’re anywhere near Philly or NYC, you’ll find me not far from the stage.

This post originally appeared on Loyalty Truth on June 11, 2010, and is by Tom Rapsas, a seasoned Creative Director and Loyalty Marketing guru. You can follow him on Twitter here: @TomRapsas

Virgin Atlantic Goes The Extra Mile

2010-06-01T11:45:00.000-07:00

I just signed up for the Virgin Atlantic loyalty program called the Flying Club. I have no immediate plans to fly on the airline. Nor do I really need another frequent flyer card, as I’ve got miles banked in three or four programs now.

The reason I joined the club is I just finished reading Business Stripped Bare, Adventures of a Global Entrepreneur, the new book by Virgin-owner Richard Branson. I’ve come away impressed with Branson’s business acumen, his marketing skills, as well as his infectious joie de vivre.

I mean here’s a guy who started in the record business and has since branched out into mobile phones via Virgin Mobile, financial services, health clubs, bio-fuel, stem cell research, health-care and even space travel with Virgin Galactic. His brand, and passion for business, truly knows no boundaries.

But, getting back to Virgin Atlantic, what might be most impressive is how he has keyed into the customer experience as the crucial element of continued loyalty. Sure, Virgin has a traditional air miles program, but Branson identified several areas he believed would offer a better onboard experience, and delivered on them.

These features, some since copied by competitors, include:

*The ability to order food from your seat on-demand, according to your schedule, not the flight attendant

*A vast choice of music and movie options, delivered to a personal entertainment screen at your seat

*Seat-to-seat chatting with friends, colleagues or the attractive woman in 9B, via an entertainment screen keyboard

*Custom designed “soothing” lighting and comfy seats

It’s a reminder that true customer loyalty is never achieved by points programs and perks alone—you also need to deliver a superior customer experience. It’s something Branson strives for across all his business lines, and has me hoping I can find an excuse to fly Virgin Atlantic soon.

This post was written by Tom Rapsas and originally appeared on the blog Loyalty Truth, May 24, 2010.

Social Media: Maybe It’s Not for Everyone.

2010-05-17T14:48:00.000-07:00

These days, it’s just about impossible to find a social media “expert” who doesn’t recommend that your company and/or clients jump on the social media bandwagon. And why not? It really is an amazing new channel that both empowers customers and is about as close to the holy grail of 1-to-1 communications as we ever may get.

But let me play devil’s advocate for a moment: Is there ever a situation where getting into social media is a mistake? Well, just maybe. There are at least a few companies on the social media scene that are taking a thumping.

I’m talking about companies that, justly or unjustly, are seen as having a less than sterling reputation when it comes to customer service. With the advent of social media, these companies have to deal with more than angry customers on the phone—they now have angry customers on the Net, with the ability to amplify their message to thousands of others, often on the company’s own social networking sites.

One vertical that seems to have more than its fair share of angry Netizens are the cable companies. Take for instance, Comcast. In a past post, I wrote about some Comcast service-related issues I was having with the cable conglomerate, but also pointed out that their Twitter presence was top-notch.

As far as I can tell, Comcast has no official Facebook presence but, as you might expect, others have filled the void. A quick look reveals two separate Facebook pages for people who don’t like the company, including “I Hate Comcast”. Yet the fact that Comcast doesn’t have its own corporate Facebook page may be a good move—especially when you take a look at competitor Verizon, who is being forced to fight off critics right on its home turf.

On Verizon’s Facebook Discussion page are threads that include “Verizon sucks” and “Awful Customer Service”. More vitriol can be found on the company’s “Fans of FiOS” page. Along with accolades, there is a steady stream of negative postings like: “Verizon has the worst customer service in the world and here are all the things I now HATE about FiOS”, followed by a 10-point list.

What’s most interesting are the responses from the “Fans of FiOS crew” (aka Verizon employees) who have the unenviable job of answering these rants. In most cases, they respond in a bright and chirpy manner that deals with the issue at hand and ignores the nastiness. But many times the FiOS crew appears to let damaging claims go unchallenged.

Here are two customer postings that did not get an official company response:

“Beware. Their billing is atrocious. Watch your bills closely, they are playing games with the bills.”
and:
“Verizon lies again with their offers and promotion propaganda and I am not the only one. Many people on this board are not getting the $150.00 gift card that you promised when we signed up as new costumers. Explain please!!”

The query below received some polite technical advice regarding the Xbox issue, but ignored the “bill” and ”dedicated line” comments:
“This service blows I’ve been getting so much lag on xbox live…my bill is crazy high every month going up and I’m still in my one year contract…and by the way its not fiber to the home… its a shared network too… stop advertising “dedicated line” until u back it up.”

Ouch! So what do you do if you’re Verizon, now that the social media genie is out of the bottle, and you’re consistently being hammered on your own Facebook page? Well, the “Fans of FiOS Team on Facebook” recently took action. They put up a “Notice Regarding Repeat Posts on the Wall” which in part reads:

To our valued Fans,
Recently, we’ve seen a number of fans repeatedly posting questions regarding content that we’ve addressed in the past…these repetitious posts have made it more difficult to address new questions…for this reason, we have decided to begin removing repeat posts of the same topic.

So they’ve given themselves the “right to remove posts”—which could mean taking down any complaint on any issue they feel like they’ve already addressed. This is sure to tick off some fans of FiOS, who see the Facebook page as a public square—but I think Verizon has done the right thing.

At a certain point, you just can’t let your own Web pages be a platform that assists in your own demise and further damages you’re already less than golden reputation.

What do you think?

This post originally appeared on the blog Loyalty Truth on May 11, 2010 and was written by Tom Rapsas.

Giving your customers a head start.

2010-04-27T11:06:00.000-07:00

I have a young daughter and being the competitive type she will sometimes challenge me to a race. There’s just one condition—I have to give her a head start. This is important, at least to her, because it increases her chances of winning—and seems to motivate her to run even faster than if we’re at the starting line together.

It’s something I thought about as I read a passage in Switch, the new book by Chip Heath and Dan Heath. They tell a story about a local car wash that ran a promotion featuring loyalty cards. Each time a customer bought a car wash, they got a stamp on their card. When the card was filled up with 8 stamps, the customer got a free wash – a concept known as punch card loyalty.

But at one point, the car wash tried something different. They gave customers a card that needed 10 stamps to qualify for a free car wash, instead of 8—except the card already had two stamps on it, effectively giving customers a “head start”.

According to the book: “The goal was the same for both sets of customers. Buy eight additional car washes, get a reward. But the psychology was different. In one case, you’re 20 percent of the way toward a goal, and in the other case, you’re starting from scratch.”

The result: those who got a head start were about twice as likely to stay in the program and redeem for a free car wash. As the book points out, it seems this group of customers was more motivated when they were partially finished with a longer journey than at the starting gate of a shorter one.

It’s something to consider in all loyalty endeavors: What if you gave new members a head-start? Would they be more motivated to stick with your loyalty program? It works with my daughter, it worked for the car wash in Switch, and it just might work for you.

This blog entry originally appeared on Loyalty Truth on April 15, 2010 and is by Tom Rapsas. Tom can be reached on Twitter @tomrapsas

IHG Hotel Group Grabs My Attention & My Business

2010-04-05T11:03:00.000-07:00

Up until a few weeks ago, I had little awareness of the InterContinental Hotels Group. Known by the acronym IHG, they operate brands like Holiday Inn and Crowne Plaza which are part of the Priority Club Rewards loyalty program.

The main reason IHG hasn’t been on my radar is simple: for most of the past decade, the majority of my stays were business-related and on the company dime. So to build up maximum loyalty points for personal use, I had narrowed my hotel universe to the Fairmont Hotel group (President’s Club), as well as hotels aligned with the Hilton Hhonors program.

Over the past few weeks though, IHG has come to my attention not once, but twice.

Reason #1. IHG made a brilliant marketing move. When Hilton Hotels decided to raise the number of loyalty points required for a free hotel stay earlier this year, IHG pounced. They launched a campaign for their Priority Club rewards program that called out the changes to the Hhonors frequent guest program via a contest called the “Luckiest Loser”.

The consumer who was the “luckiest loser”—the one with the most points invested in the HHonors program—won 2 million Priority Club points. Additionally, 20,000 “lucky losers” got up to 20% of their current HHonors balance in Priority Club points. Everyone else got 1,000 points just for entering.

It was a smart move —and a great use of the IHG database. It seems they had a 50 to 60% overlap between Priority Club members and those enrolled in HHonors, making it easy to target disgruntled Hhonors members. After all, these folks had seen their stake in the Hilton program shrink by 20-25% overnight.

Reason #2. IHG saved me a few bucks. Funny how when I went solo and hotel charges began appearing on my personal card, as opposed to a corporate credit card, I began looking at hotels that were, how can I phrase this, cheap. So when I was searching for an inexpensive place to stay in New York City a few weeks back, I checked the IHG corporate site—and came up with a mid-town Manhattan Holiday Inn with an eye-popping rate of under $100 bucks a night.

So what was a $100 room in New York City like? Okay, it won’t be confused with The Plaza. But while this particular Holiday Inn was a little worn around the edges, the room was clean, the bed was more than comfy and the staff was friendly. I even got a pretty good cup of coffee in the morning.

So now I’m a member of a new hotel loyalty program, IHG’s Priority Club Rewards. I’ve already received a “thank you for my stay” e-mail which was nice. And while I dearly miss the Fairmont, until the economy picks up, I’ll be pulling out my Priority Club Rewards card a little more often.

This article was originally published on March 17, 2010, on the Loyalty Truth blog and is by Tom Rapsas, a 20 year direct and loyalty marketing veteran. He can be reached on Twitter @tomrapsas

My Fan Rewards Goes for the Gold.

2010-03-10T07:47:00.000-08:00

Does anyone remember the launch of the Discover Card? When introduced in 1985 as “the card that pays you back”, it really felt different from Visa and MasterCard. Forget the card’s super high interest rate—I was getting cash back on every purchase!

Times change and now the cash back bonus doesn’t feel quite so special, but an outfit called My Fan Rewards is putting a fresh spin on it. They’ve teamed with the U.S. Olympic Committee to launch a program called MyTeamUSA Rewards.

The program works like this: When you shop through MyTeamUSARewards.com, using any credit card, you not only earn cash back from the retailer—a like amount is given to support U.S. Olympic athletes. For example, shop at the Nike Store and you’ll earn 4% cash back, while 4% of your purchase is matched and handed over to the USA Olympic team.

The program is free and feels like a good way to tap into the emotions surrounding the country’s Olympics love fest. But the real test is coming: keeping fans interested in the MyTeamUSA program now that the Olympic torch at the Vancouver Winter games has been put out.

My take: a solid, targeted emotion-based communications program could do the trick. The key will be in getting program participants juiced not about the Olympics that just passed, but for the next Olympic games to come. (2012 in London, in case you were wondering.)

On a side note, My Fan Rewards is rumored to be expanding into the pro sports market next. It’s not a bad idea, as professional sports teams showing fans a little return love could help ease the grumbling about ever-increasing ticket prices. (Of course, let’s hope the cash rebates will be a one-way affair, and go straight into the pocket of the consumer!)

This article was written by Tom Rapsas and originally published February 28, 2010, on Loyalty Truth. Tom is a writer and creative director and a 20 year direct and loyalty marketing veteran. He can be reached on Twitter @tomrapsas

Is Caesars Atlantic City “Swinging” for a New Target Market?

2010-02-26T15:31:00.000-08:00

Just a few months ago, on these very pages, I gave kudos to Caesars Atlantic City and its Total Rewards loyalty program.

During some trying times for the economy in general, and Atlantic City in particular, Caesars AC was making some smart moves to get its loyalty program members back to the casino.

Last week, Caesars AC got my attention again. But not in a good way. You see, they ran a rather bizarre full-page ad in the Sunday NYTimes magazine.

Let’s start with the photo in the ad (which can be seen above): a well-dressed 30-something guy has a pretty woman to his right. She has one hand on his shoulder and another wrapped tightly around his arm. It looks like they’re at a show. Okay so far, except our guy seems more interested in another woman to his left. He has his lips to her ear and her extended arm appears to be resting on his thigh.

Under the headline “The Life You Were Meant to Live“, the stilted copy reads:
Who is that in Section A, Row 1, Seat 5, having the time of your life? That’s Todd. Flanked by your fiery vixens. Paying no attention to your favorite band on stage. But give credit where it’s due. Todd is an escape artist. And when it’s time for a getaway, he get it’s right.

What!?!

Putting aside the confusing use of the possessive “your”, who are the fiery vixens with Todd? Am I supposed to pretend I’m Todd…on some kind of a three-way tryst? Is this what they mean by “he gets it right?” More importantly, did Caesars’ market research show the ménage a trois market to be a growing demographic?

Personally, I can only think of one word for the ad – Stupid.

Instead of creating a scenario that the largely upscale readership of the NYTimes magazine might be able to imagine themselves in, they’ve come up with a fictional character in a contrived situation that’s a non-starter for anyone not in the “swinger” category.

It of course begs the question, what were they thinking? The only thing I can come up with is that Caesars AC is trying to out Vegas-Vegas.

Sorry Caesars, as much as I like you and your loyalty program, you’re no Vegas. And there are better ways to spend your precious marketing dollars.

This article was originally published on Loyalty Truth on February 15, 2010, and was written by Tom Rapsas, a 20 year direct and loyalty marketing veteran. He can be reached on Twitter @tomrapsas

Tim McGraw Strums Loyalty for My Outback Rewards.

2010-02-03T10:38:00.000-08:00

A celebrity endorsement—for a loyalty program?

The pros and cons of using a celebrity spokesperson in advertising have been long established. The pros? A celebrity draws attention The cons? A celebrity draws attention—away from your product or service.

What’s more, as we recently saw with golfing legend you-know-who, there’s the potential downside of aligning your company with a celebrity whose reputation takes a sudden nosedive. So when I learned that restaurant chain Outback Steakhouse had signed country music star Tim McGraw as a celebrity spokesperson, I was doubly surprised. You see, his job is not to pitch the brand, but to help launch their new loyalty effort My Outback Rewards.

As explained on the Outback Web site:

Fans of Tim McGraw and Outback Steakhouse will have the chance to win exclusive Tim McGraw memorabilia, downloads, tickets to the upcoming Southern Voice Tour and VIP access, great offers from Outback Steakhouse and even a chance to travel to Australia to see Tim McGraw perform live in the Land Down Under!

Another thing that’s different about My Outback Rewards are the rules: The program has no loyalty cards, as it’s based totally online. Once users register at the program Web site, they simply collect their Outback receipts–and then record numerical codes from the receipts on the rewards site. A point is earned for each dollar spent, and points can be redeemed for prizes.

The choice of McGraw as Outback’s loyalty program spokesman comes as less of a surprise when you learn the program was developed by event marketing agency Rally Marketing Group, whose specialty is experiential marketing. In the loyalty business we’ve long talked about the value of experiential rewards. But I wondered about putting the Tim McGraw experience on the same level as the Outback dining experience.

So it was with great interest that I visited the My Outback Rewards site on the program’s January 25th launch date. Just how would they incorporate McGraw into their communications? Would he be strumming an Outback inspired tune? Be shown chomping on a ribeye or a Bloomin’ Onion®?

Well, I can say they’ve done a nice job of integrating Tim McGraw into the My Outback Rewards Web site. The site is clean and easy to navigate, they do a good job of explaining step-by-step how the program works, and they have successfully linked Tim with the Outback brand by identifying several dishes that are “Tim’s choices”.

Still, I can’t help but wonder why Outback chose to put all its loyalty program eggs in the Tim McGraw basket. An e-mail welcoming me into the program came written and signed by Tim McGraw himself. A view of the reward list shows more Tim McGraw-related rewards than Outback options. And with the program so closely linked to McGraw, I’m left wondering if they have a fall back plan should the unthinkable happen.

I personally think Tim McGraw seems like a stand-up guy. Who doesn’t love his wife Faith Hill? And I really think they’ve done a beautiful job with the My Outback Rewards site. But in some ways the whole thing sure feels closer to a Tim McGraw loyalty program than one for Outback.

This article originally appeared on the Loyalty Truth blog, 1/29/10, and was written by Tom Rapsas, a 20 year direct and loyalty marketing veteran. Tom heads up Creative Services at Hanifin Loyalty and can be reached on Twitter @tomrapsas

Six Myths of Customer Loyalty

2010-01-30T00:36:00.000-08:00

Was attending a conference recently on Loyalty, and came across an interesting presentation from the team at Corporate Executive Board, outlining the myths of customer loyalty. This of course is based on extensive global research and inputs provided by leading firms, and offers a refreshing perspective.

Am also elaborating on each of the myths with a summary interpretation and perspective

Myth 1: A satisfied customer is a loyal customer : Proactive v/s reactive being the key message

Myth 2: Loyal efforts help you retain business, not acquire new business : Principles of WOM (word of mouth) shall prevail at all times, hence the benefits of customer loyalty in generating new business, though possibly not clearly measurable at all times, definitely works

Myth 3: Loyalty efforts should focus on the attributes that customers say are most important : Functional attribute requirements arising from customer / consumer dialogue and research are important. The tipping points however lie in the latent emotional support and benefits.

Myth 4: Enrolling a customer in a loyalty programme will result in loyalty : Logical.....

Myth 5: Developing personal relationships with customers is the best way for sales to drive loyalty : Personal relationship is par for the course. Making the extra effort in understanding the client's business drivers, goals & objectives, and even challenging the client is what makes the difference.

Myth 6: Employees who don’t face customers cannot affect customer loyalty : EVERYONE contributes and can make a difference. Enhancements in invoicing design can make an impact as much as a smiling sales executive.

Am also going to be shortly publishing another listing of myths in the context of loyalty programme design, but in a lighter vein
...

The Social Edge

2010-01-24T08:41:00.000-08:00

Tasti D-Lite, the New York Ice Cream Parlour Chain, has launched a unique social twist to its loyalty programme.

Now it's loyalty customer base can earn extra points by allowing Tasti D Lite to send out tweets on their Twitter and Foursquare accounts. Customers can earn an extra point every time they purchase ice creams at Tasti D-Lite!

A novel and interesting twist on leveraging the power of social networking to the advantage of both the brand and its loyalty customer.

Napolean Hill, Chris Brogan and The Year Ahead.

2010-01-21T19:06:00.000-08:00

Over the recent holidays, my friend Bill Hanifin pointed out a post written by the person arguably at the forefront of the whole social media movement, Chris Brogan. In the post, Brogan said, “People are slowing down to turn their thoughts to family and to their own development, and to what worked and what didn’t in 2009. Not me.”

While he did leave an escape hatch for those choosing to bail out during the holidays, “You don’t have to do it this way”, Brogan was working as hard as ever, holidays or no holidays.

It got me thinking about Napolean Hill, author of the classic Think and Grow Rich. Although it was first published in 1937, the book’s message about gaining monetary success through hard work, determination and positive thinking, still rings true today. The popularity of the book endures as well, as it ranks in the top 1,000 books on Amazon.

What a lot of people may not know is that in 1967, three decades after the publication of his magnum opus, an 80-year old Hill put out a book with a more expansive view of the role of work in our lives. Its title: Grow Rich—with Peace of Mind.

While offering many of the same valuable lessons on self improvement as Think and Grow Rich, Hill adapted his message to basically say, grow rich—but have a life, too. We’re not talking 4-hour workweek here, but Hill did suggest we “make a time budget”.

Spread out over a 24-hour day, his time budget looks like this:

* 8 hours a day for sleep and rest
* 8 hours a day for work at your business or profession (but as your success grows, less work)
* 8 “particularly precious” hours “devoted to things you wish to do, not have to do”

Hill’s suggested list for the final 8 hours includes: “play, social life, reading, writing, playing a musical instrument, tending a garden, or just sitting and watching the clouds or the stars.” (I would add “spending time with family.”)

Hill further amplifies the point with this passage: “Do not let a day go by without taking some time for yourself — some time you spend in pure pleasure, as you see it.” He adds, “With increasing success, increase your hours of pure enjoyment, do not allow these hours to be eaten away by business or anything else.”

God bless Chris Brogan, he’s an inspiration to all of us. But there’s something to be said about the whole work-life balance thing. And while I have personally set business goals for 2010, following Hill’s lead, I’ve set leisure ones as well.

The bottom line: Sure, let’s get rich. But let’s not forget that success is measured by more than the balance in our bank accounts.

This article was originally published on Loyalty Truth on January 11, 2010, and was written by Tom Rapsas, a 20 year direct and loyalty marketing veteran. He can be reached on Twitter @tomrapsas

Tiger, Accenture and a celebrity endorsement gone bad.

2010-01-05T13:53:00.000-08:00

Editors Note: This article originally appeared on Loyalty Truth on December 13, 2009. A few days later Accenture announced they had broken ties with Woods.

For me, the most compelling question to arise from the tawdry Tiger Woods scandal isn’t whether his wife will leave him, but whether his corporate sponsors will. In particular, the management consulting company Accenture.

We’re not talking energy drinks or golf shoes here, Accenture is a starched white collar Fortune Global 500 firm that, excuse the analogy, is figuratively in bed with Tiger. In the words of Accenture’s own Web site:

Since 2003, Tiger Woods has been the centerpiece of Accenture advertising. As perhaps the world's ultimate symbol of high performance, he serves as a metaphor for our commitment to helping companies become high-performance businesses.

A metaphor for your commitment to helping companies? Well Accenture, I’m thinking that right now Tiger Woods is not exactly the paragon of commitment.

Yet, a visit to accenture.com a full week after the scandal broke revealed he is still gracing the company’s home page. The headline, over a big color image of Woods apparently looking for a misplayed shot, reads: "Opportunity isn't always obvious." Which, like virtually any headline used with Tiger these days, can be followed up by a punchline. (Sure, opportunity isn’t always obvious. Sometimes you have to go to the back room of a Vegas lounge to find it!)

Naughty behavior is always a danger when using a celebrity as your spokesperson. But the fact is, when using a celebrity, even one as previously squeaky clean as Woods, you’ve got to be prepared for a worse case scenario. In this case, I think it would have been smart for Accenture to put Tiger on the shelf for at least a few weeks or months until the scandal blew over

Accenture’s TV commercials used to end with the line “Just another day in the life of a Tiger”. And if that becomes the perception of the company’s attitude toward the Wood’s scandal—that they’ve chosen to ignore the negative implications of being tied to the Tiger—Accenture is going to turn off more than a few current and potential clients.

Tom Rapsas is 20-year direct and loyalty marketing veteran and heads up Creative Services at Hanifin Loyalty. He can be reached on Twitter @tomrapsas.

Can Total Rewards save Atlantic City?

2009-11-30T14:49:00.003-08:00

Atlantic City, the famed gambling Mecca about an hour down the coast from me, is on a nasty losing streak. A recent story in the NY Times quoted a top gambling executive as saying “the city is in a death spiral.” Few disagreed.

It seems that after a rough couple of years, 2009 is looking even worse. Every Atlantic City casino but one is seeing a double-digit drop in revenue. The lone exception being the glitzy, feels-like-you’re-in-Vegas Borgata, which is down about 5 percent this year.

The reasons for the decline are many: the rotten economy, competition from newly opened gambling operations in nearby states, and the fact that Atlantic City, like the dwindling number of day-tripping seniors who bus into the city each day, is feeling old and tired.

The most-talked about solution: a cash infusion of a few billion dollars to build new hotels, new attractions, new anything that can start pulling in people again. Which, with the current economic environment, is as likely as me filling a double inside straight flush at the poker table. Or not very likely.

Harrah’s Entertainment ups the ante.

In years past, I’ve frequented the Borgata where I’m a member of the My Borgata Rewards program. But on my last two trips into Atlantic City, I ventured to the swanky but hip Caesars, where I joined Total Rewards–the casino loyalty program from Harrah’s Entertainment, the company behind the Harrahs, Caesars, Bally’s and Showboat casinos.

It appears that Total Rewards has upped the ante over the My Borgata program, by rolling out the red carpet for program members. My evidence here is strictly anecdotal, but I (and a good friend) recently received a bump up not one, but two tier levels to Diamond status. I also received a pair of free weekday hotel stays. (Surprising because, trust me, a high roller I am not.)

It’s obviously a play by Harrah’s Entertainment to get past customers back to Atlantic City and it’s either a smart move or a desperate move, depending on your perspective. I say smart—because rather than gamble on an expensive, and to my thinking, ultimately wasteful mass media campaign, Harrah’s is appealing directly to its customer base for more business.

Granted, they’re digging deep into the base by giving a two-time visitor like me special favors, but my guess is they’re mining the data for a few things: the recency of my visits, my perceived spend level, and my zip code, which tells them I live nearby and should be at a certain income level.

So can Total Rewards really save Atlantic City? It’s a lot to ask of a loyalty program, but it strikes me that Harrah Entertainment is playing the hand it was dealt—and reaching out to its customer base may be its last, best hope. I, for one, hope it works. In fact, I’m about to book a free night for my wife and I right now.

Now, a few words about the Total Rewards communications.

The first good thing I can say about Total Rewards is that they actually have a communications program in place. As a member of the My Borgata program, who opted in for e-mail, I cannot recall receiving the first piece of communications from them, digital or otherwise. (It’s good to be King!)

While the Total Rewards postcard and e-mail creative is perfunctory, they do some small but important things right. They recognize me by name and tier level, and occasionally by the casino I visit, Caesars. They’ve also made attempts to cross-sell me into other areas of the property, including their dining and entertainment venues.

But the Total Rewards communications could go even further. A few thoughts, for the people behind the program:

1. Pump up the engagement: I checked and Total Rewards has a presence on both Facebook and Twitter. Why not add these links to every e-mail? And while you’re at it, add an “invite a friend to join” link to each e-mail, as well.
2. Talk to my preferences: I know your part of the Harrah’s empire, but frankly I only joined the program because I like and visit Caesars. So more info on Caesars and less on Vegas and the other brands please.
3. Leverage the community: I know starting your own online community may be a hassle you don’t want to contemplate, but why not use some of the glowing testimonials found on social travel sites like Kayak and Virtual Tourist. This both encourages loyal customers to return and invites them to join the conversation.

This article originally appeared on Loyalty Truth on November 23, 2009 and was written by Tom Rapsas, a Creative Director/Writer/Strategist. He can be reached at tomrapsas@gmail.com and via Twitter @tomrapsas.

Sometimes even the best customer service comes up short.

2009-11-16T12:18:00.000-08:00

It’s probably no surprise that the great brands are able to combine excellent products and services with a superior level of customer service. After all, it’s this magic combination that makes them great brands in the first place.

Go to an Apple store to purchase their (in my opinion) superior products, and you get service from friendly, helpful sales reps who truly know and love their stuff. I’m also a big fan of Credo cell phone service. Not only does part of my bill go to worthwhile social causes, every time I talk to customer service I find their reps are some of the nicest people in the world.

Then, there are certain products or services we use and like in spite of their customer service. Like the cool hotel on the beach, with the nice rooms and fantastic ocean views, but the less than accommodating staff. Or the pizza joint with the best pies in town and the never-on-time delivery.

But what about the opposite scenario. Can great customer service overcome a product or service that is lacking or deficient in some way?

Regular readers of this blog already know where I’m going with this: right to my television set and Comcast. On these very Web pages, I recently wrote about my efforts to get my hands on a digital converter box from Comcast in order to receive a couple of channels that had dropped off my set.

You see, back in April, I was informed that I needed to pick up a digital converter to continue receiving MSNBC and AMC. But after going to my local office, I was told, “we’re out of them, come back in January”. A 9-month wait. After checking back in September, I received several conflicting responses, and after a lot of back-and-forth, I was led me to believe a converter would be sent to me in two weeks.

Fast forward to September 26th: two days after my last Comcast blog entry was posted, I received an online reply from ComcastMark of Comcast National Customer Operations. After answering a few questions, I was turned over to ComcastMike (or was it ComcastRich?) who e-mailed me with a few more questions. He, in turn, had a Comcast customer service rep named Cynthia call me.

I wish I could tell you the story had a happy ending, that Cynthia stopped by in a Comcast van to hand-deliver the converter box to me, and I was now writing this from my bedroom office, Countdown with Keith Olbermann playing in the background. But no such luck.

You see, instead of bringing me good news, ComcastCynthia reverted back to the original story. She told me there was in fact a 9-month wait for the digital converters, due to a delay by supplier Scientific Atlanta. She would call me as soon as they came in, probably in January.

To me, a 9-month wait to get the converter box means that someone in the offices of Comcast had really dropped the ball. A 9-month wait means these devices must be in demand. Yikes, can’t Comcast put a little pressure on Scientific Atlanta to ramp up production? After all, in my town, a place where Comcast had a monopoly for many years, their share of market has dropped below 50%. Surely, there had to be a quicker way, Comcast. You’re bleeding customers!

It got me thinking about a recent post by Chris Brogan who pointed out that when a customer service rep tweets “some kind of comforting or informational note to someone who’s having a problem in real time, this information doesn’t exactly travel (easily) through the rest of the system to the people most likely to be directly in front of that person.” Or, in my case, to Cynthia, my designated Comcast rep.

Yet, I don’t really blame ComcastMark or ComcastMike or even ComcastCynthia. Sure, I was passed down the line once, twice, but that’s okay, as they all got back to me in a prompt and courteous manner. Cynthia also gave me the straight story, contrary to my previous encounter with a Comcast rep who said I’d have the converter mailed to me in a couple of weeks.

But despite their best efforts, I’m still in the same place I was back in April, before the Comcast National Customer Operations crew got involved—in essence, waiting 9 months for a part. (Which makes me glad I didn’t lease my car from Comcast.)

It just goes to show you that all the great customer service people in the world often don’t translate into happy, loyal customers—unless you have an organization behind them that gives them the tools, and great products and services, to back them up.

Note: This article was originally published on the Loyalty Truth blog on November 5,2009. A day or two after being published, I received a follow-up reply from Frank @ComcastCares, followed by phone calls from 4 different Comcast reps, local and national, some calling multiple times. Needless to say, I had a service guy at my door a few days later, new boxes in hand, who got me all squared away (for free). So there was a solution out there, it just took the right people to find it. Not sure what the learning is from this beyond the old adage, “the squeaky wheel…”

Tom Rapsas is an independent Creative Director/Writer/Strategist. He can be reached at tomrapsas@gmail.com and via Twitter @tomrapsas.

Bling Bling!

2009-11-04T08:36:00.000-08:00

Bling = flashy, ostentatious jewellery

Bling Nation, A country of rappers with gold bullion dripping all across, well not exactly.....,

A fairly young firm, with a ton of funding has rolled out possibly the first convergence of RFID. mobile and banking systems. Quite a heady cocktail!

Customers are issued RFID stickers, attached to their mobile phones. These in turn linked with their bank accounts, as in the case of a debit card. When tapped on POS terminals, configured with this solution, the payment is completed, with confirmations being Hence a contactless payment solution, without the hassles of issuing smart cards etc.

The solution breaks open new ground even further, allowing retailers to offer loyalty rewards to customers opting for this payment service.

Targeting smaller communities and markets that are not serviced by larger banks, Bling Nation offers pure convenience to customers and merchants are drawn in with lower fees.

This definitely promises to be a company to look out for.

Stub Hub and the creepy feeling of being watched.

2009-10-26T12:40:00.000-07:00

Even though I come from the creative side of the business, I’m a big fan of customer data. There’s no better way to build a relationship than using data to personalize communications according to a customer’s past buying habits.

Amazon, of course, does a great job of this. So does iTunes. But is there such a thing as going too far in the personalization of communications? In essence, getting too personal with your customers? I think so and here’s why:

I am not a regular customer of the online ticket reseller site Stub Hub, but I have used their service once or twice in the past. Occasionally I go to the site to see just how outrageous the ticket prices are for the game or show I can’t get into.

A case in point was a recent show by the rock band Social Distortion. After realizing the event was sold out in my area, I went to Stub Hub to check out the ticket prices. They were selling at a minimum of 4 times the face value of the ticket so I declined.

Sure enough, the next day in my inbox, I received a personalized e-mail from Stub Hub. It’s subject: “Social Distortion Tickets in a Flash!” The body of the e-mail read:

Hey Tom,
We noticed Social Distortion tickets were on your radar. Great tickets are still available, but act fast. Head back to StubHub.com and use our interactive maps to find your perfect seats.

Which would have been cool. Except I hadn’t sign up for Social Distortion ticket alerts—or any other kind of alerts for that matter. All I had done was a quick search for tickets and left the site. And a day later Stub Hub had come back to me with a personalized pitch.

Did Stub Hub go too far in trying to engage me in a dialog?

My take: If they had sent me an e-mail merely pitching their service I would not have minded. But reporting back to me on my searching behavior seemed wrong. What else did their little cookie know? It felt like I was being watched in a creepy “there’s a guy staring at me through my living room window” kind of way.

Now don’t get me wrong, I’m not surprised me that Stub Hub knew about my search or that they had the capability to push the information back to me in an e-mail. But in the words of an old Hall & Oates song, some things are better left unsaid.

This post originally appeared on Loyalty Truth, October 19, 2009. Tom Rapsas is an independent Creative Director/Writer/Strategist and can be reached at tomrapsas@gmail.com and via Twitter @tomrapsas.

Saturn and the death of a brand.

2009-10-16T10:20:00.000-07:00

The end, when it came, was sudden. Just when it looked like the Saturn car company had been rescued by the Penske Group, the deal fell through and now, despite a loyal customer following, U.S. car company Saturn is no more.

As faithful Loyalty Redefined readers know, I have blogged about Saturn in the past, noting its social media miscues and also about the course correction the brand took to try and make things right. No matter what your take on the company is, for many the loss of Saturn is the loss of a beloved brand.

As David Aaker, author of Building Stronger Brands, put it "it was the only organization in the US that really had a quality culture to it…the loss of Saturn is a blow to a loyalty group attracted to the company's no pressure sales approach and solid customer service."

Some put the blame squarely on parent company GM. Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, (angrily) said: "It's criminal negligence. They got attacked internally, constantly, until today they were finally destroyed. How do you take something that was such a good idea and wreck it deliberately?"

As I write this, the Saturn Web site hums along, oblivious to the brand’s demise. It’s animated home page still buzzing with moving cars and people. I can still go thought the motions of ordering a new Saturn Aura that, alas, will never come.

The brand loyalist site Saturn Fans continues to provide news updates from around the Web, all related to the brand’s final days. They read like obituaries really, with headlines such as and “The Ride’s Over for Saturn Lovers” and “Farewell to Saturn’s Utopian Dream”.

Over at the company’s ImSaturn social network site the news was broken via a posted press release on the brand’s pink slip day, September 30. About 50 people have written in to what may be the site’s final post, with many customers either “heartbroken” over the “sad news” or bitter at GM vowing they “will NEVER get my business again.”

One more passionate fan wrote: “I hope someone can come along and bring the brand back as a proud American automobile company but that's a dream and the way things have gone, in so many ways lately, dreams don't stand much of a chance. Good luck to us, the true American dreamers...and believers.”

RIP Saturn, you have left a void in the hearts of a lot of American car buyers, another good idea put on the junk heap due to a lack of funding and foresight and commitment. For many, there appears to be no car company out there who can take your place.

This post was originally published on Loyalty Truth, October 8, 2009, by Tom Rapsas. Tom is an independent Creative Director/Writer/Strategist and can be reached at tomrapsas@gmail.com and via Twitter @tomrapsas.

Comcast and the two faces of customer service.

2009-10-03T09:21:00.000-07:00

If you’re like me and work on the creative side of the business, you’d like to believe that good communications and a healthy social dialog are the keys to building relationships and ensuring customer loyalty.

But the fact is, your company is often only as good as the people you have on the front line. One bad experience either in-store, on the phone, or via an online chat, can often tarnish even your best marketing efforts.

Take Comcast. Is there any company whose customer service reputation swings more wildly across the great/terrible spectrum? Comcast has been both vilified for its customer service via the infamous “Comcast must die” Web site and glorified for its prompt @comcastcares replies on Twitter.

Which brings me to a recent personal encounter I had with the cable conglomerate. I’m a decade long Comcast customer and in April I found that two channels we occasionally watched at home, MSNBC and AMC, had disappeared from our two televisions that did not have a dedicated cable box.

I called 1-800-COMCAST and was told that I needed a digital converter to continue receiving these channels and could pick one up for free—by going to the dreaded local Comcast office.

What’s most off-putting about this office isn’t the untouched-since-the-‘70s interior or the unsmiling, laconic customer service reps—it’s, I kid you not, the counter-to-ceiling wall of thick bullet-proof glass the reps sit behind.

It’s the kind of set-up you see on TV in the visiting rooms of prisons, complete with vented portholes through which you talk to the person opposite you. It serves as a quite literal barrier to developing any kind of customer rapport, and gets you wondering why they need this kind of security in the first place.

So anyway, I went to the office to get my free converters—only to have the customer service rep behind the wall of glass tell me, with an unmistakable I-hate-my-job vibe, “we’re out of them, you need to come back in January”. A 9-month wait!

From the parking lot I made a call to 1-800-COMCAST to complain and received an apology. I was told that the converters were on order and should in fact be ready in September, a slightly more tolerable 5 months away.

Fast forward to a few days ago. Using Instant Chat at the Comcast Web site, I check to see if the converters might be ready. After being passed from one associate to another more versed with the converters, I’m informed they’re now available and I can have them shipped to my home. Yes!

Only, after confirming my address, I’m told that, oops, they can’t mail the converters to my area (for a reason never explained) and that I need to contact my local office to see if they have them. “Wait a second,” I chat back, “I don’t want to contact my local office, that’s why I’m talking to you.”

A canned response is sent back to me to the effect, “I am so sorry about your situation. I know you’re frustrated, but you need to contact your local office. Is there anything else I can do for you today?”

Yes, for starters you can drop the canned faux sincerity. Then, you can break the rules and ship me my free converters. OR you can contact the local office for me and see if they have the converters. After all, I started our conversation by telling you that I was very tempted by a money-saving Verizon triple play offer I was receiving in the mail 3 or 4 times a week. Hint: You’re in danger of losing me as a long-time customer!

Funny thing is, I call 1-800-COMCAST an hour or so later on an unrelated Internet issue. And, after addressing the problem, the customer service rep quickly switches subjects. “Sir, I see you’re having an issue getting digital converters. Can I have them mailed to you in the next two weeks?”

Shocked, I reply “Yes, you can, thank you.”

Sometimes Comcast offers terrible customer service. Sometimes Comcast offers great customer service. And sometimes you get to see both of them in the very same day. But my guess is, most customers only see one side. And if it’s the terrible side, they don’t stay customers for very long.

(Now, let’s see if I get my converters!)

This post originally appeared on Loyalty Truth September 26, 2009. Tom Rapsas is an independent Creative Director/Writer/Strategist and can be reached at tomrapsas@gmail.com or via Twitter @tomrapsas.

Someone thinks your company sucks.

2009-09-18T06:46:00.000-07:00

(Another reason your company needs a social media presence.)

Microsoft sucks. So does The Home Depot. Ditto Dell, Target and Dominos. And while it may not surprise you to hear that Wal-Mart sucks, you may not have heard that beloved brands like Apple, Ikea and Starbucks suck as well.

The fact is that despite you or your company’s best intentions, somebody out there thinks you suck. In fact, if you’re one of the companies listed above, there are multiple people that think you suck. And they’re not shy about telling people what they think.

I know this because I went to Google Blog Search and typed up every company name I could think of with the word “sucks“ after it. As you may have guessed, it’s just about impossible to find a company that someone somewhere doesn’t think sucks.

It’s something that my friend Bill Hanifin refers to as negative passion. While every company yearns for passionate fans and promoters of its brand, the flip side is there are people out there who don’t like your brand and won’t think twice about attacking it via a blog entry, or even an entire Web site.

Of course, after reading many “your company sucks“ postings, there are at least a few cases where the rants seem to have some merit. But there are even more examples where the attacks feel mean-spirited, or have little substance behind them, like one posting that says Wal-Mart sucks because “they don’t have big Pyrex measuring bowls“. Huh?

The net: Your need to pay attention to what people in the social media sphere are saying about you, your company or your brand. If there are legitimate issues or concerns, address them. If there are problems that can be solved, fix them. And if there is misinformation out there, by all means do all you can to counter it.

These days, if you’re not paying attention to what’s happening in the social media space, you’re not just standing still. You’re losing ground. There are people out there saying bad things about you, but there’s no easier way to neutralize them then to jump into the social media sandbox and beat them at their own game.

This post was previously published 9/7/09 on Loyalty Truth by Tom Rapsas. Tom can be reached at tomrapsas@gmail.com or on Twitter @tomrapsas.

The Ford Fiesta Movement. Take 2.

2009-08-23T17:40:00.000-07:00

Earlier this year, I blogged about the Ford Fiesta Movement. As you may recall, the Ford motor company gave new Fiesta automobiles to 100 social media-savvy drivers for six months—hoping they would post videos and blog about the Fiesta, to build some buzz around the car’s early-2010 launch.

I really hadn’t heard much about the promotion since then, probably for good reason. None of the participants are within my social media universe and a search of Google News reveals the Movement has gotten scant post-launch coverage from the offline or online press, aside from a few well-placed stories.

They popped up on the TV show Extra when host Mario Lopez helped launch the Movement's “Social Activism Month” by donating items to a local charity while riding in a 2010 Ford Fiesta. They also placed a new Fiesta with a writer from Motortrend who made the equivalent of a head nod to the Movement while taking the car on a successful 600-mile trek through the mountains of Utah and Colorado.

Yet, while each of these stories gave the 2010 Fiesta some valuable press time, none featured any news about the participants themselves. What were those 100 Fiesta Movement social media mavens up to?

As it turns out, the 100 so-called “agents” in the program are not hard to find. Ford hosts a Fiesta Movement Web site with links to all 100. There are Live Feed pages that selectively highlight the latest tweets, videos and blog posts provided by the program participants. And a quick glimpse of these pages makes the program look like a buzz-worthy success with constant updates pouring in. It’s all Fiesta all the time!

But this got me wondering: how was this social media experiment working in the real world? Might I be exposed to the Ford Fiesta Movement message if I never visited the Ford Web site but was a quasi-follower of one the Movement agents?

As a quick test, I began looking specifically at about a dozen different agents’ blogging sites. What I discovered is that I had to do some real digging (or in this case, scrolling) to find news about the Fiesta or the Movement.

That’s no surprise really. The 100 agents in the Fiesta Movement were chosen because they already had a social media presence. And it appears that most involved are again writing about the things that made them Movement-worthy in the first place. The extreme spots dude is again writing about extreme sports. The hip-hop girl is out clubbing again. And just like in the real blogging world, one guy has seemingly packed it in, without a single post on anything in over 3 months.

I don’t think there’s anything wrong with this lack of Fiesta news, as Movement participants themselves have reported they are under no pressure from Ford to comment favorably on the cars. (Although there does appear to be an attempt by Ford to “sponsor” conversations, as one agent blogger mentions picking up 8 points for a new post.)

Still, I imagine the folks at Ford are feeling a little underwhelmed by the participation of some of the chosen 100. I also wonder if Ford's 100 agent pool is deep and wide enough to reach beyond a small sliver of what I perceive to be the millennial target market. With hundreds of thousands of bloggers and video posters on the scene these days, it strikes me there's a certain self-centered, party-on sameness to the Fiesta Movement agents.

But, bottom line: I think we have to give Ford an F-250 truckload of credit here for going where no other major marketer has gone before. This truly is a groundbreaking effort and a sign of things to come. More and more, social media will be used as a customer acquisition tool and will be every bit as important as other online and offline efforts when it comes to launching a major product.

Looking ahead, I see two key questions that still remain to be answered:

Will the online activity turn into offline success? Despite its noble effort, I’m wondering if the Fiesta Movement has made a big enough impression for a national product launch. Will it really deliver bodies to the showroom? Ideally, Ford is on top of this and is already getting a read as to whether this experiment is working or not. I also wonder if it wouldn’t make sense to feature the participants in more traditional advertising efforts, including print, banner or TV spots, that tell people about the Fiesta Movement and point them to the site.

Was launching the program a full year before product launch a bit premature? While the new Ford Fiesta is already the number two car in Europe, it won’t be released until early 2010 here in the states. And with the promotion scheduled to be over by late 2009, I wonder if they should have started the effort closer to the car’s release date. By early next year, the Fiesta Movement’s many tweets, blogs and video and picture postings may already seem like old news.

Look for another update to come in a few months.

This blog entry was previously published August 17, 2009 on Loyalty Truth .

Saturn takes a right turn.

2009-07-28T11:00:00.000-07:00

Back in late-April, on these very Web pages, I called out the Saturn car company for its failure to engage with its customers. As rumors circulated about the company’s potential sale—or imminent demise—I pointed out there was a glaring lack of information coming from the company’s ImSaturn social network site, a place where many true brand fans would go to first for breaking news.

In my story, I cited a crucial two-week period in April when there was just a single posting on the ImSaturn site, compared to 20 entries at a site called Saturnfans. This fan blog was reporting all the news and rumors it could get its hands on while urging loyalists to “Save Saturn”. As I said in my post, it looked like “the brand fans are more passionate about saving the company than the brand employees.”

Well in the past couple of months, coinciding with Saturn’s sale to the Penske Automotive Group, I’m happy to report that things have changed. Since returning from its near death experience, Saturn has made a couple of moves that deserve to be applauded.

Good Move #1: They showed they were listening.

After the initial blog post, a Saturn executive in Detroit took the time to write in a comment to the blog where the story originally appeared, Loyalty Truth. He seemed genuinely concerned as he said: “We will take your observations to heart and examine if we can improve the information flow on the site. We were the first auto brand to have this type of site, and it has been a learning process.”

This comment showed that the folks at Saturn had their ears to the ground and were listening—and just as importantly, responding. And while talking to Loyalty Truth, apparently our Saturn exec also had a few words with the folks manning the ImSaturn site, because another change became apparent.

Good Move #2: They started talking again.
As a current Saturn owner, once the sale was announced I received a letter in the mail updating me on the news and “this new chapter in the Saturn story.” Upbeat and personal, it gave me a sense of promise and enthusiasm that was missing from the press reports.

This sent me to the ImSaturn site to see what was happening there and I came away impressed. The “Saturn team” who posts entries on the blog had picked up their output considerably, including updates on the sale and its aftermath. They also added a pleasing mix of comments from Saturn fans who were genuinely excited about the brand’s second life.

The Net: While Saturn still has an uphill climb, at least they’re back in the game and engaging with their customers again. Hopefully, they can maintain this new found passion and commitment as they move forward.

It just goes to show you that in social media, as in life, it’s never too late to make things right.

This blog entry was previously published July 22, 2009 on Loyalty Truth by Tom Rapsas. An independent Creative Director, Writer and Strategist, Tom can be reached at tomrapsas@gmail.com.

Is the Good Hands community a bad idea?

2009-07-07T16:26:00.000-07:00

Regardless of your hobby, profession or even your belief system, these days it’s easy to find a group of people just like you. Go to online community organizer Ning and you’ll discover over 1 million communities, for everyone from sand volleyball enthusiasts to landscape architects to supporters of the Kwam Um School of Zen.

Now it seems more and more companies are getting into the act, especially those focused on the Gen Y market. From game maker Xbox to the Vans shoe company, companies with true-blue followings have created thriving online meeting centers where the devoted can exchange ideas, discuss products, solve problems and even schedule meet-ups.

But while social communities can work for some brands, it definitely feels like a stretch for others. So upon learning that Allstate had joined the fray with its Good Hands Community, I was skeptical. After all, who wants to join a community sponsored by an insurance company?

Yet, even before looking at the site, I saw how it might work—if Allstate didn’t stray too far from its core area of expertise, insurance. The Good Hands site could be a place where customers could engage with agents on insurance issues, from making sure they had the right coverage and deductibles to learning how to adapt policies to life changes like a new car, new house or new baby.

But the folks at Allstate appear to have set their sights on a much wider mandate. As the Good Hands Web site states, it’s a community where you can “share your thoughts with others about hopes, dreams and challenges. Together you can share ideas about keeping families safe, saving money and preparing for what’s next”. (Share my hopes, dreams and challenges?)

The community home page feels a little more down-to-earth with menu categories that include “Making a Difference”, “Daily Spending” and “Personal Finance”, and discussions on “helping others” “stay-cations” and “living debt free”. It’s all well intentioned, but the topics feel a little off-base for Allstate and better suited for the Peace Corps, AAA or Capital One respectively.

For auto insurance policy holders, there is a category on “All Things Wheels”. But I can’t seem to find any discussions on auto insurance, as posts are concentrated on issues like checking my oil, being alert at the wheel and hybrid automobiles. How about helping me figure out how much collision I should carry on my 8-year old Saturn?

The other thing that doesn’t feel right is there is not an insurance agent to be found on the Good Hands site. You see, the chief bloggers and hosts of the community are Allstate employees Ben and Amit who are both identified by the title “Strategy and Content Manager”. No offense guys, but I think Allstate policyholders would prefer to communicate with honest-to-goodness insurance agents.

So overall, a kudos to Allstate for the effort. It’s a nicely designed site that really is trying to engage with current and potential customers. But let’s not forget, you’re an insurance company. And with so many potential communities for people to join these days, it feels like Allstate may be stretching its good hands a little too wide.

Final note: For a company that does an online community right, check out Intuit. Its Intuit community connects customers with small business owners and features discussions hosted by Intuit-sponsored business professionals. The Intuit community keeps the focus where it belongs: helping small businesses succeed.

This blog entry was previously published June 29, 2009 on Loyalty Truth.

For auto insurers, is retention taking a back seat?

2009-06-23T15:58:00.000-07:00

Until very recently I worked on the acquisition side of an auto insurance account, where these days it’s all about the price—with virtually every auto insurer claiming they can save you $400 or $500. (Which makes you wonder, if everyone can save you money, which companies are ripping people off?)

But perhaps the most eye-opening aspect of auto insurance marketing is the lack of respect paid to retention. After all, if you believe the accepted adage that for every $10 spent to acquire a new customer it takes only $1 to retain an existing customer—why are auto insurers plowing so many millions into acquisition and spending next to nothing on retention?

It’s especially important to have a retention strategy these days because of the changing relationship between auto insurance buyer and seller. Once upon a time, most drivers had insurance agents who they had a one-to-one relationship with—but now, with independent agents becoming a shrinking breed, and with the rise of direct-to-consumer providers like Geico, 21st Century and Esurance, times have changed. Most customers have no interaction with their insurance company, unless they have an accident or are mailing in their premium check.

Seems to me it’s time for auto insurers to take a fresh new approach to retaining customers, one that begins building a relationship well before the auto policy is about to expire and the customer can be swayed by the latest “you can save hundreds” TV commercial.

Thought one. Adding a message on a bill insert, while a no-brainer, will do absolutely zilch to build a relationship with best customers. What’s needed is a more robust approach that includes a regular stream of print and/or e-mail communications with relevant information drivers can use like:

• invitations to online or offline tutorials on choosing the coverage right for me and my family
• info on safety recalls and maintenance tips for my particular vehicle
• Safety advice for teenage and senior drivers on my policy
• Reminders of why my insurer is the right choice and what it offers that the competitors don’t.

Thought two. Start engaging via social networking tools. With people so often confused by their auto policy details (collision? comprehensive? low or high deductible?), it seems like there’s an opening for an auto insurance provider to become the online source for honest, helpful information. So who will step up?

While some auto insurers are moving in the right direction by gravitating toward the communications opportunities offered by Web 2.0, many of the executions are weak at best and some companies have chosen to do nothing at all. A few quick observations:

• Market leader Geico barely exists in the Web 2.0 world unless you want to count a blog for the Miss Geico offshore racing boat—and a few “Screw Geico” entries from unhappy customers out in the blogosphere. Kash, the bug-eyed stack of money that stars in Geico’s goofy TV commercials, does have a Twitter account—but has just a single tweet over the last 4-months. (Kash may be the quiet type, but one tweet?.)

• Esurance icon Erin, animated hero of the company’s television commercials, has her own blog on the company Web site—but after a fast start in 2005, it seems like Erin may be all blogged out—she has a woeful total of three blog entries in 2009. (Is she busy on a TV shoot? Have her write from the set!)

• Then, there’s Allstate. Very active with Twitter, they appear to be doing a bang-up job of responding quickly to customer comments and concerns. They also appear to be the only insurer to set up an online community which can be found at goodhandscommunity.org. The community gets an A for effort, but the execution? In a future post, I’ll give it a full review.

This blog entry was previously published June 15, 2009 on Loyalty Truth.

I Love Premium Insurance Service!

2009-06-04T09:28:00.000-07:00

The recession has truly set in...Not the obvious one in the economy...but the one in basic common sense.

Had picked up a small used car a couple of months earlier ( when the fuel prices made driving a larger car appear a criminal waste)

Unfortunately missed out on the insurance renewal date for the car...and was left looking for a new insurer and quickly. Having earlier worked with an Indian banking group, which also runs one of the largest insurance firms out here, called up an old colleague & friend and requested for some urgent assistance.

Thus commenced the comedy of errors...
a. The insurance premium quoted was about 10% higher than of the competition : Spoke with my ex colleague. He suggested I take the policy and assured me that the small premium was worth the high service levels

b. The surveyor arrived on a bright Saturday morning photographed the automobile extensively and left

c. The insurance chaps subsequently disappeared for a couple of days. After diligent follow ups and messages via several media, was informed that the policy had in fact been issued, but they had forgotten to send it across. Quite sweet of them considering that I had'nt even issued the cheque!

d. An email with the scanned copy of the policy arrives shortly thereafter.

e. A polite young manager, promising to carry the original copy, arrives the following weekend to pick up the check, but without the original. Am assured that the original certified copy would be forwarded via an express courier, which has not been received till date!

f. I realise to my horror, albeit a couple of days later, that the policy has been issued in the name of the previous owner, but with my residential address. God bless their verification processes!

g. Point this out to the young manager, who assures me of a prompt rectification. Not surprisingly he drops off the radar!

h. A discount cheque received a couple of weeks later, marked of course in the previous owner's name and to my address ( now this is salt on wounds!)

i. I catch hold of another chap ( not wanting to disturb my ex-colleague, to purely experience the joy of a privileged customer...) and plead resolution

j. Receive a call after another arduous week, and told that I need to pay a little more towards the premium amount as they had made an error in the calculation! Indicate to them that I have infact received a refund cheque, which of course they are not aware of! Silence for another fortnight

k. A delighted managerial call is received on a bright sunny morning, indicating that the breakthrough had been made! I would now have to pay a lesser incremental amount as he had fought with his senior management for the same! I suggested criminal and civil proceedings as a more civilised way of resolution. .....

l. Received a call that the policy would in fact now be modified, if only I could re-submit some of the earlier documents again...AND thus the story goes on.

The next time you're pitched premium service...you may like to reconsider the privileged life of ordinary citizens! I wonder when they are planning to launch a loyalty programme!

Can a little magic help Borders Rewards?

2009-06-01T13:46:00.000-07:00

I’m a card-carrying member of Borders Rewards, the program run by book, music and movie seller Borders, who recently announced their rewards program had grown 23 percent over the past year and now totaled 32 million members.

I first discovered Borders via their bricks-and-mortar stores in the early 90’s and still love their open store layout and laid-back vibe. I generally find their salespeople to be well-informed and helpful. I’ve been to their Web site many times and opted in to their e-mail list years ago.

Yet I may be one of Borders’ worst customers.

You see, not long after Amazon.com launched in 1995, I became a regular there. As fans of Amazon know, they have the world’s best selection. Nine times out of 10, they have the lowest prices. And there’s plenty of customer commentary to peruse should I be on the fence about a specific book, CD or other product.

So it’s tough for either the Borders stores or Borders.com to measure up to market leader Amazon. Sure, I still visit my local Borders every now and then—but only after they send me a promotional e-mails with a coupon good for 40% off any purchase. (As I said, I’m not a good customer.)

Still, even with Amazon’s superiority in so many areas, Borders now possesses a potential game changer. If they can figure out what to do with it.

It’s called the “Magic Shelf” and it was launched by Borders just about a year ago, with little fanfare. This nifty feature enables registered customers like me to turn the Borders’ home page into my own virtual bookshelf. Through an attractive wooden shelf interface, I can quickly scan music, book and movie recommendations in several categories.

Importantly, it shows me selections based on my preferences, per an online survey I filled out, so the titles on my virtual shelf are personalized just for me. It’s a different approach than Amazon whose less attractive home page shows me items based on my past purchases, not my preferences.

So will the Magic Shelf make me more likely to shop at Borders or Borders.com?

Well, not yet. Old habits die hard and Borders needs to find a way to compel me to become a regular customer by better leveraging the benefits of the Magic Shelf. For starters, it would help if Borders both told and reminded customers about this very cool feature.

It also means Borders will have to move away from their current e-mail strategy, where it’s all about the discounts and latest money-saving offer. Currently, fully 75% of the e-mails Borders sends out are offer or price-based while most of the balance are for perks unrelated to their core business.

The solution seems simple: start sending personal, relevant e-mails, using information culled from each customer’s Magic Shelf selections. By filling e-mails with content that has real value—like info on new products I might be interested in—Borders stands a better chance of building a real (and profitable) relationship with me, because it will be based on my love of music, movies and books, and not my love of saving money.

With the proper use of the data gained from the Magic Shelf, it feels like there may be a small opening for Borders. Will they follow through on it? Or will they continue to beat their heads against the wall by trying to out-discount Amazon? Time will tell. But surely a personalized communications approach is a better way to go than continuing a price war against the mighty Amazon.

This blog entry was previously published May 29, 2009 on Loyalty Truth.

Ford Fiesta Movement & 100 Agents of Change.

2009-05-14T09:26:00.000-07:00

Have you heard about the Ford Fiesta Movement? It may sound like a grass roots Buy American campaign, but it’s really a pretty ingenious ploy by the Ford Motor Company to generate some buzz around the stateside launch of the European Ford Fiesta model.

It seems that Ford has signed up 100 “agents” who have been given a new Ford Fiesta to test-drive for 6 months. In Ford’s words, they’ll be “lifestreaming their experiences, and completing monthly missions to show you what the Fiesta is all about”, via personal blogs, Twitter, Facebook and YouTube.

So who are the agents? As you might expect, Ford has smartly selected a group of new-media savvy individuals from Generation Y who had to post an application video to be chosen. A glance at these Millennial profiles seems to indicate most of the agents were selected for their online presence, as many of them have already established blog sites and a built-in audience.

Are these agents really just paid shills? It appears there’s no “pay-for-say” involved, although gas, maintenance and insurance are included with each vehicle. There’s also a little expense money thrown in to cover “mission” expenses. And Ford promises they’ll let their agents speak freely about their experiences.

So if all this is true, kudos to Ford. It’s obvious they have great confidence in the new Fiesta. And I can think of no better way to get the blogosphere buzzing about your hot new product than by seeding it with 100 hand-picked social media mavens.

Yet, as I applaud the effort, the proof of success will be in the excitement the Fiesta Movement is able to generate. There are lots of ideas, from reality TV shows to football game plans, that looked good on paper but fell apart in the execution.

Will the “missions” build the necessary excitement once the initial buzz wears off? (After all, this campaign is supposed to go for 6 months.) Will it be a non-step lovefest or will the agents be allowed to add a healthy dose of reality by complaining about a thing or two? Will the online buzz translate into offline sales?

Stay tuned. The missions just got underway this week. We’ll see if Ford is able to keep the Fiesta Movement humming in high gear.

This blog entry was previously published May 11, 2009 on Loyalty Truth.

Saturn and the perils of Social Media.

2009-04-28T07:25:00.000-07:00

For most companies, starting a social Web site is a great idea. There’s no better way to strengthen a customer relationship than with an open and honest dialogue. But there’s a flip side to the coin. Once the lines of communication are open, it also means engaging when times are tough and the news is bad.

Which brings us to the Saturn division of General Motors.

Just over a year ago, Saturn launched ImSaturn, a social network site for Saturn “drivers, employees, fans and enthusiasts.” Early posts talked of snazzy new models and featured entries from happy Saturn customers. It was a feel good place.

But everything changed on February 17, 2009—when, if you’re at the controls of the ImSaturn site, a crisis kicks in. That’s the day parent company GM announces publicly that the Saturn brand is being discontinued after the 2010 model year.

Now if you’re a true blue ImSaturn follower, this raises some serious issues. Like: Is Saturn really going out of business forever? And: Why should I ever buy a Saturn again?

Cut to the ImSaturn Web site. Where it gradually becomes apparent that the Saturn company bloggers—who have been put in a difficult if not impossible spot—just don’t have the answers to the pertinent questions they need to address.

A February 18 post announces GM will investigate the “spin off of an independent Saturn”. A March 2 post says the same thing. On March 31, they continue to look at “the spin off of Saturn as an independent company.” Then, from April 1 to April 15, except for a blurb on a new TV commercial, the ImSaturn site has no posts at all.

What makes this is odd is that during the same April 1-15 period, on a brand fan site appropriately named SaturnFans, 20 posts appear. Twenty. Including several stories on potential Saturn buyout partners and an entry on a public rally to save the company. There’s even an online petition to “SAVE SATURN”.

It’s enough to give you a disconcerting impression: the brand fans are more passionate about saving the company than the brand employees.

Meanwhile, if Saturn wants to monitor negative chatter on the Web, it need not go far. It’s happening in a public posting area right on the ImSaturn site, where positive feedback is offset by entries like “I will never buy another Saturn!!!!” and “You built crap and America never forgives!” Posts that have so far gone unchallenged.

The takeaway is that while there’s a vast upside to social Web sites, as the Saturn experience shows there is also a small but real potential downside. Bad things can happen. They can begin to spiral faster than you can react to them. And even your best intentions can come up as empty as a gas tank on E.

This blog entry was previously published April 28, 2009 on Loyalty Truth.

Building loyalty without points.

2009-04-09T09:35:00.000-07:00

I’m a member of several hotel rewards programs but an e-mail promotion I recently received from one of them really caught my eye. It was from a boutique chain called Kimpton Hotels, with about 40 locations spread across the US.

The deal was fantastic, an $81 a night weekend rate to commemorate the company’s 1981 start date, redeemable at any of the chain’s hotels. It’s a far cry from the normal Kimpton rate, about $300 a night for big city locations.

What really surprised me though was that I received the offer at all. You see, far from being a “best customer” of the hotel, I’ve stayed at Kimpton hotels a grand total of one night at The Muse, a chic but friendly small hotel in New York City’s Times Square district.

Even if I had been identified as a potential high value customer, I wasn’t offered the ubiquitous double and triple point offer, but something of much greater value: a premium hotel room at about a 70% discount. Thanks, Kimpton Hotels!

It raises the question of how to best build loyalty and strengthen the customer-brand relationship in today’s feeble economy. Are there more/better ways to build loyalty than a traditional points offering?

While a lot of companies have traditionally relied on points to lure customers into a relationship, it strikes me that the Kimpton chain—by making a generous price-focused offer to even new loyalty program members like me—is taking a much more aggressive approach.

Rather than waiting for me to show loyalty to the hotel chain through repeated stays before rewarding me, they’ve turned things upside down—they’ve shown me some love early in our relationship, and in turn, I’ve immediately put them into my consideration set, even though I can name three or four hotel chains where I have more points.

An article in a recent issue of Advertising Age titled “Redesigning Loyalty Programs to Last Beyond the Next Purchase” touches on this subject. Readers are advised to look for new methods to build customer relationships, including:

“…add(ing) customer benefits that are not explicitly mentioned. Unexpected rewards can have significant value as customers view them as gestures on the part of the brand rather than payments they are owed.”

The point is sometimes it makes sense to break out of the it’s-all-about the-points mentality and reward those who simply raise their hands and identify themselves as your customers. By boldly taking the first step in a relationship, Kimpton Hotels has made it more likely that I’ll take the next step—and consider a long-term relationship with their brand.

The (Loyalty) Gospel according to Seth.

2009-03-31T09:49:00.000-07:00

Fans of Seth Godin’s blog know that while he often offers smart, I-never-thought-of-it-that-way insights, he sometimes states the obvious—but does it in a way that can serve as a fresh and useful reminder of the simple marketing truths we already know but may have forgotten.

In a recent post, Godin talks about the folly of spending more money to acquire new customers while ignoring the loyal customers you already have. These current customers represent two potential opportunities for growth, both by increasing their share of wallet and by mobilizing them as word-of-mouth advocates.

Here’s Godin’s take on companies now spending “more” for customer acquisition:

The reason this is a mistake is simple: it's expensive. Attracting a new customer costs far more than keeping an old one happy. Not only that, but an old customer is far more likely to bring you new people via word of mouth than someone who isn't even a customer yet.

Which is why share of wallet makes so much more sense than share of market. How much does each of your existing customers buy from you? Do they count on you for all the things they buy in this market, or just some? Does Toyota sell me every car my family drives? Does Chubb get to insure every single thing I own? Usually not. Because marketers are so focused on more that they forget to take great care of what they've got.

It’s a good reminder, in a bad economy or a good one, in loyalty and in life: stay focused on the things—and people—that matter most.

The last gasp of a dying brand.

2009-03-19T14:01:00.000-07:00

As most US-based readers know, General Motors (GM), one of the “Big 3” US automakers, is now on the verge of bankruptcy. After receiving a $17-billion bailout from the government, GM is still losing billions of dollars each month.

To help stem the bleeding, GM recently announced a number of cost-cutting moves, including a plan to end production of a subsidiary brand called the Saturn Corporation by the end of 2010.

Launched in 1985 as a "different kind of car company", Saturn operated outside of the GM structure for many years. And during that time it really did feel like a different company. (In fact, I’ve bought two Saturn vehicles over the years and drove one to the office today.)

What made the company different?

Well, for starters there was an effective ad campaign that showed the company to be comprised of dedicated, hard-working men and women all pulling together under the common cause of making a better automobile.

There was a no-hassle, no haggling sales policy, by which the sticker price on the car was the actual price you paid for it—no tense back room negotiations by which some buyers got a better deal than others.

And importantly, there was an on-going customer communications effort to keep Saturn owners loyal to the brand. These included a regular stream of loyalty communications, including invites to an annual “owners” barbeque held at the brand’s main factory facility in Spring Hill, Tennessee.

But over the years, something changed.

As Saturn was slowly brought back into the GM fold, the warm and friendly correspondence disappeared. It was replaced by shrill and gimmicky mailings from the local dealer pitching the latest holiday promotion. And in time, Saturn didn’t feel a whole lot different than any other American car.

Now, there is a last ditch attempt to keep the Saturn brand alive.

Over the past year, a Saturn social networking site was set up with little fanfare in an attempt to reengage with owners. I recently stumbled upon it, and by the looks of the sporadic company postings, it’s not getting the attention it deserves.

Then, a few days ago I received a single-page, two-sided letter from a person identified as the General Manager of Saturn, a 22-year veteran of the company. In the letter she says that Saturn is investigating the option of forming an independent company, apart from GM, and to “stay tuned”.

There’s even an attempt to rekindle the old Saturn mojo, as the Saturn veteran pointed out “it feels a bit like it did back in the 1980s when the original Saturn project was being developed” and implores that “as loyal Saturn owners and enthusiasts, I know you support this brand.”

Only now, years after they’ve sent me a truly meaningful piece of communications, it feels like it’s too little, too late. The hard-earned emotional bonds of loyalty were taken for granted and over time slowly broken, replaced by, at best, ambivalence.

I’m reminded of the once classic car a friend has parked along side his driveway. He once planned on fixing it up, but never quite got around to it. And neglected year after year, this once sterling automobile is now a rusting heap, too far gone to ever bring back.

Will WOM kill advertising?

2009-03-09T11:13:00.000-07:00

I’m currently reading a fairly entertaining, Google-worshipping book titled What Would Google Do? by Jeff Jarvis. But there was one passage, a lengthy endorsement of word-of-mouth (WOM) advertising, which stopped me in my tracks:

Here’s the goal. Eliminate advertising. Or at least fire your ad agency….every time a customer recommends you and your product to a friend is a time when you don’t have to market to that friend. It is possible today to think that one good word can spread as far as an ad word.

Here’s why that’s a bad idea: While every marketer’s dream is to have a product that is so good everyone is talking about it, real life rarely works that way. For starters, there just aren’t many category-busting companies like Google out there.

Unless you’re in a niche market with an established customer base (like my local seafood market which has no competition within 20 miles), some form of advertising is needed to assure your continued success—not just to attract and acquire a steady stream of new customers, but more importantly, to tailor relevant communications to connect with your existing customers.

A recent study by my friends at the loyalty marketing think tank COLLOQUY showed that the best word-of-mouth proponents for any business are its most loyal customers—most specifically a group they termed “Champions” who are most likely to spread a good word on behalf of your brand.

Yet, it’s my belief that Champions aren’t just born, they can be created. How? Through a steady diet of personalized communications via mail, e-mail and members-only Web sites, that show your most loyal customers you truly care about them and their individual needs. (After all, you’ve got to show some love before you can expect some WOM love in return.)

Another helpful tool in pumping up word-of-mouth: company blogs where you have an actual dialogue with customers, and don’t just try to market to them. Conversations in the new public square of blogs and social networks are just like the old one—bystanders are listening to every word—so the potential upside of these exchanges is amplified and could result in earning you additional brand loyalists.

So by all means, if you’re not happy with your ad agency, fire them as Jarvis suggests. But do it because you’ve found another vendor who can better meet your customer communications needs, who among other attributes can take the necessary steps to help your word-of-mouth efforts succeed. These days, you need all the help you can get.

The $100,000 Salt & Pepper Shaker.

2009-02-24T14:25:00.000-08:00

I just finished listening to the audio book The Last Lecture by Randy Pausch, the moving story of a 47-year old college professor and the life lessons he passed on shortly before succumbing to cancer. In the book, Pausch tells the story of the $100,000 salt & pepper shaker.

It seems that when Randy was 12-years old and on a visit to Disney World, he decided to show his parents his appreciation for the trip by purchasing them a ceramic Disney salt and pepper shaker.   Minutes later, a minor tragedy struck when he accidentally dropped the shaker and it shattered into pieces. On the advice of an adult who witnessed the accident, a hesitant young Randy returned the broken shaker to the store—and to his surprise, was given a new one. No questions asked.

So where does the $100,000 come in?

After the incident, Randy and his whole family were so impressed by the Disney staff member’s handling of the incident that they began to appreciate Disney on "a whole other level". They made Disney their permanent vacation home. And by Randy’s calculations, over the years his family went on to spend over $100,000 with Disney, never forgetting the symbolic importance of that one interaction. Hence, the $100,000 salt and pepper shaker was born.

What’s your brand or company’s $100,000 gesture? As this story illustrates, even the smallest actions can pay off with a very big reward—turning a current customer into a customer for life.

Lovely hotel. Tough loyalty program.

2009-02-12T08:51:00.000-08:00

From November 2008 through early January of this year, I spent several weeks working in LA and was fortunate enough to be put up at the Fairmont hotel in Santa Monica. All in all, a really fine place to stay, with friendly attentive service, a pleasant lobby bar and comfy rooms with a view of the Malibu coast.

I of course joined the Fairmont’s loyalty program, the President’s Club, and for starters earned free Internet access throughout my visit, saving $10 bucks a day. A nice perk. But like most of us, I had my eye on the big prize—a free night’s stay.

I reviewed the program requirements and while they seemed a bit steep at 30 nights for eligibility, I racked up 25 nights in November and December 2008 and 5 nights in January ’09. By the end of the project, I had nailed the stay threshold for a free night on the nose. Yes!

There was just one issue.

Upon checking my President’s Club account in late-January, I discovered I only had a balance of 5 nights in the “bank”. My 25 nights from 2008 had been wiped off the slate. The reason: it seems the program resets at January 1 of each year, wiping out all nights accrued over the previous calendar year.

Now we can all understand accrued nights expiring at some point—but nights I had earned as late as December 20th had been wiped off my earnings statement, giving them a shelf life of a little more than 10 days. About the same as a container of milk.

I fired off an e-mail to a program representative and within 48 hours had a response. A nice one, indeed. I had been granted entrée into the top level Platinum Club, and with it received my free night’s stay—which I’ll soon be enjoying with my family at a very fine Fairmont hotel in New York City.

In the end, my faith was restored in the Fairmont and its loyalty program. My membership had been bumped to top tier status, I had received the reward I felt was rightly mine, and I will again stay at the hotel the next time business calls (as well as spread some WOM love, my brother just finished a stay there).

But as a loyalty enthusiast, I have a nagging concern in the back of my head: What of other program members in similar situations who may choose to protest their lost nights by switching to another hotel? Seems to me the Fairmont may want to do a little tinkering with the finer points of their program.

Can viral videos work in Loyalty?

2009-02-02T15:17:00.000-08:00

At some point, you’ve probably seen a viral video, those short video clips that get passed from one person to another via e-mail or a media sharing Web site. They’re sometimes edgy, often humorous. And when they’re done right they can get people talking and generate a buzz.

The question I’ve been pondering: is it possible to create a viral video that works for your best customer base? One that’s personalized—and so good at capturing the essence of your company that customers want to share it with friends and associates, thereby cultivating new customers.

It could be a happy birthday video from the friendly wait staff at your local favorite restaurant. Or a thank you message from the pilot of your preferred airline. Or even a humorous “we miss you” video from a hotel you frequent, but haven’t been too lately.

It could be one more way to surprise and delight your best customer base—the people most likely to spread positive word-of-mouth about your company to others.

Grinding the Axe...

2009-01-24T21:59:00.000-08:00

Consumers across the world have been receiving communications stating their reward points have been devalued, but few of them have stated why or what next?

Dropping the value of reward points, withdrawing privileges, reducing the life of points etc. are common techniques that come into play when strains appear on the bottom line. These are justifiable business measures and would make the finance chaps (and rightfully) rub their hands in glee.

As a preferred loyal consumer, if my lounge access were withdrawn suddenly, I'm clearly not going to be a thrilled loyalist. I would vent and unleash my angst on the brand and its stakeholders, as I've just been told that "I am not special anymore". And here lies the crux of the matter for the financial stakeholders in a company.....Surviving Today v/s Sustaining Tomorrow.

When the tough call of diluting / withdrawing the benefits of a programme are undertaken, take a moment to switch your views and talk to the consumer in you.

A few aproaches that you may like to consider:
1. All OR Some : Do you need to grind the axe on the benefits for all the customers or some? Apply Pareto and compute impact.
2. Price : This may actually be an opportunity for you to price some of your services. Convert a challenge to an opportunity (sounds cliched but quite true). The customers who see true value may actually pay you for it
3. Why are you doing this? : Have a dialogue with your customers. Tell them why you're doing this. Assure them that you're with them over the long haul and this is a temporary blip. They may not like it, but they would understand, which is equally important.
4. What does your brand stand for? : Ensure that your actions are in line with your brand's value system.
5. Measure long term Impact : Its great to compute immediate impact to your bottom line. But also measure and be aware of the future economic impact of losing customers and the cost of getting them back on board. You may still take the call, but be sure to inform yourself and the other stakeholders.

Is the Free Ride Worth It?

2009-01-24T20:57:00.000-08:00

A motorcycle manufacturer in India, with over two million loyalty customers, has one of the largest customers bases for a loyalty programme. The customer proposition is quite simple and relevant to the target audience. However what makes it different, is that its a paid programme. Customers need to pay upfront for a three year membership.

Most loyalty programmes have very low entry barriers / qualification criteria for its customers. The benefits via ease of enrolment for the customer & for the brand owner easy access to a large customer base to which it can communicate and potentially convert to increased wallet share and hence revenues are quite obvious.

In any loyalty programme, there is a clear pyramid of customers that is formed within 18 - 24 months, wherein the Pareto principle quickly falls in line...Less than 20% of the customers contribute to the value from the overall base.

Which takes me to the set of (existential) questions.....
1. Do they clearly understand the value proposition...OR rather...Do they take the time enough to understand the benefits of the programme?
2. Does the customer actually value the benefits that your are offering her...(OR is that too brave a question to ask for the programme manager?)
3. Does this customer take your programme seriously enough?

The third question is the most vital for the success of any programme. It is vital that the customers views a clear give and take in this relationship and has his skin in the game. You may believe that her business over the life of the programme is the "skin", but it may just not be it.

Most loyalty programmes have attained success via word of mouth from its loyal consumers and not as much from the programme communication. Hence the programme is always susceptible to a risk of failure if the word of mouth does not reach the customer in adequate and frequent dosage.

So, why leave it to chance? Pricing the access to a loyalty programme has the following potential benefits:
a. It ensures that the customer clearly understands and believes in the value of the programme
b. Ensures that the organisation stakeholders are more involved in the customer engagement and education at the time of enrolment
c. Gives your P&L immense latitude, by covering huge administrative and financial costs that you would incur.

Pricing a programme would face huge resistance across internal and external stakeholders, the programme size build up would take substantially longer, but the P&L does look rather different.

Take your customer seriously, but they should take you seriously too!

p.s. There is a difference between a customer communication programme and a loyalty programme...

New Is In...Old Is Out!

2009-01-24T05:28:00.000-08:00

The over-obsession with new customer acquisition, often at the expense of existing customers is quite perplexing and worrying.

I've shifted residence recently, and was seeking to transfer my DTH (Direct to Home) connection. The experience has been quite hilarious and often painfully frustrating. The engineers arrived promptly and indicated that there would be nominal shifting charges and some other installation charges. I questioned the rationale for the latter, and did mention that I have been a customer for over four years, subscribing to their premium packages. Also did bring to their notice that my subscription had been live for over three years and this was the second time in this period that I was required to incur these charges.

The team quite obviously did not take well to my questioning their irrational installation charges and disappeared without a trace! I waited patiently for over a week and then contacted the local sales team. I was politely informed by the chap, that the engineering team had updated the system as "customer refused to pay any charges" and hence recommended that my service be deactivated.

The saga continued for over a week, wherein I was assured repeatedly that the installation team would arrive, but they just did'nt turn up. I did shift my business to an alternate service provider, but I continue receiving warm marketing messages from my old friends highlighting new offers and services. Quite clearly they do not know that I am no more their customer.

I've had several other similar experiences and has forced me to take a hard look at the business that I manage as well, and often believe that we do not spend as much time as we should on our existing customers who deliver revenues and contribute to the bottomline.

These are challenging timelines, and budgets for large customer acquisition would be hard to come by. A reality that we tend to ignore quite often...the impact of incremental investments on existing customers are often higher than those on new customers.

Keep your eye on the ball and don't take your existing customers for granted. This is perhaps the fundamental basis for creating customer loyalty.

The Walls Come Tumbling Down.

2009-01-08T10:40:00.000-08:00

I can recall when I first ventured into loyalty marketing there were clear lines of delineation between the various advertising disciplines and agencies.

General advertising was the “brand” stuff, home of the big TV budgets and glossy print advertisements. DM or direct marketing was advertising that called for a response, whether it was via a mail package, banner ad or DRTV spot.

And then there was loyalty marketing, which I soon learned had a different perch in the advertising hierarchy. While working in direct marketing we often complained about getting the budget crumbs from the general agency, in loyalty we often had to settle for a single crumb.

Furthermore, the CMO at our client companies were often not even involved in the loyalty marketing effort, as he or she busied themselves with the more high profile brand work. Often, the management duties for loyalty were assigned to a marketing subordinate well down the hallway from the corner office.

For one creative assignment it wasn’t uncommon to have three different agencies and three different creative directions involved. (Four agencies if a digital shop was in the mix.)

But today the walls are tumbling down.

I’ve just wrapped up a TV campaign for 21st Century auto insurance comprised of TV spots that push the brand while selling (brand DRTV). In addition, the key premise of the campaign is being integrated into the company Web site, and will soon appear in customer e-mails, acquisition direct mail and even viral videos.

In the past, this work might have been spread over three or four different agencies. In this case, it’s being done by one. The result: a stronger, better integrated, more coherent campaign.

Today, especially as new forms of digital media enter the marketing fray, the old dividing lines between general and direct and loyalty and digital are becoming hazier than ever. And for all involved, that’s a very good thing.

The rise and stumble of e-mail.

2008-12-23T10:08:00.000-08:00

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?

2008-12-08T14:54:00.000-08:00

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.

2008-11-25T10:08:00.000-08:00

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!

2008-11-11T10:06:00.000-08:00

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....

2008-11-11T08:51:00.000-08:00

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?

2008-11-11T08:02:00.000-08:00

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.

2008-11-07T18:16:00.000-08:00

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.

2008-10-30T08:55:00.000-07:00

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).

2008-10-14T14:32:00.000-07:00

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.

2008-10-02T08:55:00.000-07:00

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?

2008-09-19T09:06:00.000-07:00

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!

2008-09-08T11:06:00.000-07:00

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?

2008-08-22T06:59:00.000-07:00

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....

2008-08-13T10:47:00.000-07:00

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.

2008-08-12T09:00:00.000-07:00

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!

2008-07-25T10:39:00.000-07:00

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?

2008-07-22T09:53:00.000-07:00

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!

2008-07-11T10:52:00.000-07:00

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

2008-06-28T01:43:00.000-07:00

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!

2008-06-20T10:22:00.000-07:00

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.....

2008-06-06T10:28:00.000-07:00

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.....

2008-06-05T09:34:00.000-07:00

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!

2008-05-29T10:53:00.000-07:00

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!.........

2008-05-29T07:34:00.001-07:00

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

2008-05-27T08:05:00.000-07:00

"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?

2008-05-20T13:27:00.001-07:00

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...