Will WOM kill advertising?

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.

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.

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?

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...

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?

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!

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?