New Is In...Old Is Out!

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.

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.

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

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

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

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

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

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

Brother can you spare a diamond?

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

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

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

Wachovia gets back into the game.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Is the timing right?

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

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

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

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

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

Keep the (server) lights on, Barack.

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

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

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

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

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

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

The trouble with widgets.

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

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

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

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

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

CRM (Crummy Relationship Marketing).

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

Dear CRM eWeekly Subscriber,

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

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

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

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

Loyalty advice from Haruki Murakami.

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

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

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

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

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

How does your loyalty program greet new customers?

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

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

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

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

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

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

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

Of Icons and Defaults!

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

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

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

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

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

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

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

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

Where arst thou James Dean?

Why The Beatles Don't Issue Reward Points?

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

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

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

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

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

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

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

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

The Fatal Attraction of Reward Points....

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trails and Triggers!

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

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

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

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

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

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

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

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

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

So what if I don't want to engage?

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

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

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

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

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

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

Guerilla Loyalty!

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

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

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

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

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

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

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

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