by David Rosen | Senior Vice President 

Another great idea from Open Table.  A lot of you are like me, either hopelessly addicted to web-centric business models or too lazy to pick up the phone and make a phone call.  Eeek.  Human contact.

OpenTable which has gobbled up nearly every relevant restaurant’s reservation book and put it on line, is currently promoting an offer for $35 fixed price dinners if booked online through their service.  To sweeten the offering even more, they are doubling the rewards points for these reservations as well.  (personally, I use OpenTable regularly due to it’s incredible efficiency and my high satisfaction, the rewards element doesn’t even factor into my behavior — but you didn’t hear that from me!)

Visa has been doing similar programs for years in major markets.  Effectively, restaurants band together to create an event during a traditionally slow week — in this case the week prior to Thanksgiving.  Goals:  fill empty seats, induce trial, and quite frankly get people spending some money.

Now go out and enjoy yourselves and stop fretting about your 401ks.

By Mark H. Goldstein | CEO

WSJ reports brands loyalty is down as private label and price trumpeting it.  While its sort of obvious, it really means brands need to work harder and smarter to give their more profitable customers continued reasons to engage and support the brand.  It means reinforcing the brand message, rewarding most profitable customers with thanks and recognition and continued work to improve brand perception and value amidst the economy’s fury…

by Joshua Tretakoff | VP, Account Management

Our clients often ask for some tips on what simple tactics they can use to emphasize the value of their loyalty programs. One of the simplest? Wish your best customers a happy birthday. Here’s some examples:

Polo Factory Stores: they make a point of capturing this information at the point of sale. The integrated e-mail program is excellent, and this reinforces it. After all, who deletes an e-mail that offers you a birthday gifts? Note how the communication is reflective of their brand, but also reinforces a sense of personalization. The time that it’s triggered is interesting: it comes on the first day of the month your birthday falls in. If they were even smarter, they could time it on the day or week of your birthday.

Friday’s:  Clever use of the birthday cake idea. Their Give Me More Stripes program is nicely woven in, as is the clear benefit and fun nature of their program; plays well to their brand.

It may be a tough time to tell someone they need to buy more with you, but everyone has a birthday, and everyone loves getting birthday presents. Make sure you are on their birthday list!

By Mark H. Goldstein | CEO

OK.  Now can you think of a set of brands more likely to get crushed in today’s economy that Williams-Sonoma?  There sell aspirational merchandising via traditional direct marketing methods and sit on lots of expensive stores.  Their product is increasingly copied elsewhere and their marketing is so traditional and so mail heavy—-we’ve been waiting for this shoe to drop for a year now.  In San Francisco, first it was Gap being woken out of bed—now its Williams-Sonoma’s turn.….expect fewer brands and a company at best 50% the size within a year.  The resumes have been flowing out for months now….

By Mark H. Goldstein | CEO

Well, Loyalty Lab lost this one—we were in there and thought we had a espresso shot of being their partner but they went to the agency of record and built on top of First Data, their POS gift card vendor.  Its a solid program and well designed——will it work?  You betcha.

by Joshua Tretakoff | VP, Account Management

Wonderful tidbit out of this week’s SourceMedia’s ATM, Debit & Prepaid Forum in Chandler, Ariz., from Citigroup, inc. According to CardLine, Nancy Gordon, Executive Vice President of Citi’s ThankYou Rewards reports that Citi has cut churn by 50%, thanks to the ThankYou Network rewards program. Even better, she reports that cardholders that belong to the rewards program spend more and help the bank earn higher revenues than customers who have not signed up.

It may have taken a little while to get there, but this is a clear win for the loyalty program space.

by Joshua Tretakoff | VP, Account Management

In the “I wish it were here, but it’s only in Japan” front, NTT, Japan’s dominant cellphone service provider, has announced a service that puts over 100 different retailer’s loyalty cards on the cell phone. No more wallet problems; instead, the cell phone has an application that stores all of the key loyalty card info, and communicates via a contactless system:

“Key-Shuttle (for which Japanese and international patents are currently pending) is the NTT Com-developed technology that integrates the information in the phone. Once a dedicated application is downloaded into the phone, Key-Shuttle enables loyalty points, ID photos and other membership information of multiple retailers to be registered under a single platform.

The system includes features for security and privacy, such as unauthorised access detection and user-required permission before a retailer can share membership information with other retailers. Reward cards registered in Gyazapo are more difficult to duplicate or falsify than traditional plastic cards, making this a more secure system for loyalty programmes.”

by Michael Greenberg | President

Many moons ago I wrote an article titled “Build a Fence Around Your Customers” on Chief Marketer. The idea is even more current now given the economic environment.

As a relationship marketer, you cannot forget - even for a day - that your competitors are gunning to take your customers away from you. When discretionary spending starts to move sideways, customers are even more susceptible to the siren song of lower prices and promotions. So now is absolutely the time to stay focused on identifying potential defectors, identifying and servicing top customers, and creating compelling reasons for customers to consolidate wallet share with you.

by David Rosen | Senior Vice President

OK, I am a frequent flyer junkie.  Since college when I traversed the country to get to school and every subsequent job, I have been that guy.  I am no longer ashamed about my obsession — rather feel cleansed of my guilt since I’ve admitted this to myself, family, friends and co-workers.

[note to self, one day do a blog entry on some of my bizarre FFP obsessive, compulsive behaviors.]

Yesterday Virgin America (by partnering with Loyalty Lab) launched to the public the major missing piece of their frequent flyer program, Elevate – the ability to redeem the points that guests have earned by flying the airline.  Why the wait – it has been over a year since the airline launched.  The answer is Virgin America (VX in airline geek code) has what is assuredly the most innovative and consumer-friendly loyalty program in the airline space.

If you read the business travel columnists in the NY Times and WSJ, you know that the legacy carriers’ programs are regularly skewered for their:

• Increasing difficulty of finding reward-eligible seats
• Brutal black-out periods
• Non-alignment of customer revenue with miles/points earned
• Declining value per mile

Virgin America rejected the basic assumptions of their competition with a program that:

• Ties earning to revenue.  Not miles, but points.  The more you pay, the more you earn
• Makes every seat available for redemption on every flight
• Guests can easily and seamlessly toggle between points and dollars within the same session

Essentially, points become a currency that guests can use as they choose.  If flights are more expensive in dollars, they’ll likely be more expensive in points.  This keeps the economics of the program — both earning and burning — squarely aligned with VX profitability and fairer and more logical for Virgin’s guests. 

There’s a lot more behind the scenes.  The technology employed to deliver both what is presented to Virgin’s guests and the tools provided to VX’s loyalty marketers pushed Loyalty Lab’s technology team to new heights of creativity, design, implementation and quality.

We congratulate the Virgin America and Loyalty Lab teams for a powerful partnership and great times to come.

by Joshua Tretakoff | VP, Account Management

Interesting discussion in RetailWire today: seems that a couple of French professors concluded a study of loyalty programs, and determined that traditional “one size fits all” programs don’t really have a long term effect, but personalized programs that address customer’s individual needs have a dramatic one.

Their advice?

Not unsurprisingly, the professors argued that retailers should focus on providing customers with more “individualized rewards, based on what they value.” As such, the scholars identified five different purchase motivations in surveying shoppers in France from 2005 to 2007:

1. An economic motivation: the main goal is to save money;
2. A hedonistic motivation: the aim is to feel pleasure;
3. A routine-loyal/risk-avoiding motivation: the goal is to reduce the risk of being disappointed by a purchase by remaining loyal to a favorite brand or store;
4. A relational motivation: buyers seek to establish a relationship with a store or its staff and be recognized as a privileged client;
5. A functional motivation: the aim is to decrease the time and effort devoted to making purchases.

One of the reasons we founded Loyalty Lab was for just this: the ability to create highly individualized, targeted segments within your program, on the fly, and be able to set up different programs that “speak” to the customer. Nice to see this strategy now has scientific backing.