Loyalty Dogs Blog

By Jason Hornik | Senior Director, Product Marketing

Recent initiatives from P&G and General Mills signify a continued investment in e-commerce by CPG brands looking to build direct selling relationships, engage consumers, and garner insights. P&G is planning a full-scale launch of their eStore in the spring of this year despite the fact that e-commerce sales represent less than 1% of their total annual revenue. The site will primarily serve as a research lab to test search, coupons, store promotions, and social media integration. P&G intends to share consumer findings from their new site with their retail partners.

P&G currently sells direct through theEssentials.com, a site they inherited as a result of the Gillette acquisition in 2005, and through partner sites which include Target.com, Walmart.com, CVS.com, Drugstore.com, and Amazon. Overall, P&G is looking to aggressively move their annual e-commerce sales from $500 million to $4 billion.

General Mills is also making deeper inroads into e-commerce, as well as developing digital content for their brands. For example, their recipe site Tablespoon.com boasts 25,000 recipes with detailed nutritional information and at BettyCrocker.com you can download their Digital Kitchen Assistant app for interactive recipe building and sharing with friends.

Leadership at both P&G and General Mills are voicing their increased level of attention to e-commerce:

“The eventuality is a one-on-one relationship with every consumer, and obviously e-commerce needs to be a big part of that.”
P&G CEO Bob McDonald (AdAge.com)

“The beauty of digital is it’s very effective–great ROI and very efficient–to talk directly to consumers and to give them customized and more relevant information about what the brand can do for them.”
General Mills CMO Mark Addicks (Forbes.com)

There is no doubt that CPGs and other consumer brands will create innovative strategies and programs to connect with their most loyal consumers as the iron curtain for selling direct continues to come down.

by Joshua Tretakoff | EVP, Services

Imagine you are a retailer. You want to know not just the purchases that your customers make, but when they visit your stores and don’t make a purchase.  Hard to do, right? What if you could make a benefit of  your loyalty program tied to just that?

That’s just what a maker of GPS software, Navizon, has done.  Instead of just charging their customers for their software, they actually are paying customers to install their application on their iPhone, so they can use their loyal customers to map cell towers and WiFi access points.  Now, the customer has an ongoing incentive to use the software, and the company gets rich, real-time geographical and behavioral data, all with the user’s permission.

Being able to make your customers more loyal, and your loyal customers your most valuable ones, is the name of the game. Knowing when your customer comes in and doesn’t buy, especially your most loyal ones, is often more valuable: where are they going after they leave you?

David Rosen | SVP Strategy and Partner Development

Today, MediaPost’s Research Brief highlighted the latest survey on loyalty from the CMO Council.

It’s a solid overview of general member satisfaction and general marketer satisfaction with their programs.  In fact, generally very good news for the loyalty industry:  Members really do appreciate the additional value that loyalty programs deliver and marketers’ returns justify increased investment in 2010 and beyond.

I was, however, struck the by title:  “Loyalty Programs Need to Engage.”

Based on the research, there still is a significant gap in marketers’ ability to build a dialog with their members that is based on points of interaction that extend beyond the transaction.  While a clear majority of the respondents are increasing their digital spend, few seem to be ready to take the highly personal inputs of the engagement to drive big lifts if frequency, retention and measurable advocacy.

As reported in the Council’s research:

When it comes to in-depth profiling of customers, the vast majority of marketers still only aggregate and analyze limited customer data sets.

• 73% collect basic demographics and
• 68% track the location of members

But critical insights are not being leveraged:

• Advocacy rates (14%)
• Brand loyalty and attachment (27%)
• Personal preferences (31%)
• Satisfaction levels (33%)
• Product preferences (38%)

Clearly the gap needs to close.  This year, we’re doing our own research in collaboration with Razorfish on member engagement and loyalty.  Stay tuned – and if you would like an advanced peek, email me at david@loyaltylab.com

by Joshua Tretakoff | EVP, Services

Do you know Frank Eliason? You should. He’s also known as Comcast Frank, or, more importantly, ComcastCares on Twitter. Frank singlehandedly put a face on the customer service for Comcast, realizing that the biggest reason why customers defected was that there was a perception of indifference or unresponsiveness. Instead of sitting on a phone tree waiting for a rep, just message @ComcastCares; Frank responds quickly and efficiently. Event better, Frank monitors Twitter for mentions of Comcast,  and offers proactively to intercede on the customer’s frustrated behalf. In short, he completely changed the perception of Comcast from an indifferent behemoth to a proactive advocate.

Frank also writes his own blog. This week, he writes about his experience with a loyalty program on a flight.  Read his trials and tribulations for yourselves: what is supposed to be a program that rewards you for loyalty only succeeded in putting him through so many bureaucratic hoops that it is almost worse than being treated anonymously.

What struck me was the complete lack of addressing the customer by name in the communications the airline used. Instead, they constantly used the Loyalty Number or Error Code; it felt almost Brazil-like. And, as Frank points out, the only warmth in the communication at all came from their ad in the e-mail to have you get a discount at Hertz. First and foremost in a loyalty program, remember its not about the points: it’s about the way to help make a customer into your best customer. Every message, interaction, communication, and customer experience needs to be viewed through the customer lens. No amount of points will make a customer forget being treated as just another number if you truly want their business.

By Jason Hornik | Senior Director, Product Marketing

In his updated bestseller, CRM at the Speed of Light, Paul Greenberg digs into Social CRM with nearly 700 pages of lively guidance and practical examples of how brands can innovate to better engage their consumers. This book provides a comprehensive view of the Social CRM landscape and is bound to trigger ideas for your strategies, tools, and techniques as the title so claims. A recommended cover-to-cover read:
http://www.ebooks.com/ebooks/book_display.asp?IID=471477

by Mickey Neuberger | VP Loyalty Strategy

CMO Council published latest report http://cms.sys-con.com/node/1258487

Study establishes that consumers see value in programs and marketers are achieving high ROIs. I thought the following excerpt on consumer complaints was particularly interesting:

“Too much spam and junk email topped the list of negatives associated with loyalty and rewards program membership (44 percent), followed by too many conditions and restrictions (38 percent), and rewards that lacked real value (37 percent). Other prevalent beefs included members having a hard time redeeming points or rewards, program membership lacking value, as well as communications and service not being personalized or targeted specifically for members.”

By Michael Greenberg | COO

Its been interesting to see the shift in tactics at Borders over the past month or two. They seem to have taken a page out of the Bed, Bath & Beyond playbook, and send out a single item coupon once or twice a week, consistently.

I’m guessing that, like BBB, Borders generates an average check that includes more than a single item, so the actual markdown on the transaction is not obscene. Its one way to generate traffic, but they are quickly training customers to look for and use a coupon whenever they buy from Borders.

Given the stream of not-so-good news from them over the past few months, I shouldn’t be surprised. They need to try something, anything, to keep revenue up. And now that the CEO/President has resigned to go run A&P, I doubt it will get better soon.

An old colleague of mine, Bill Dandy, was brought in recently to run marketing there, and I’ll give him the benefit of the doubt. I’ve been a fan of Borders for a long time and hope they pull through.

By Michael Greenberg | COO

We all know what’s coming. A blizzard of emails. Tweets of new specials every day, if not multiple times a day. A sale every weekend. Web only specials. Private savings events. Early access. The noise will be absolutely deafening.

Cutting through this will take some old-fashioned sales and marketing. I’m still convinced that sales today are won during the 10 minute search and research phase, whether the purchase happens instore or online.

Here’s a few ideas for winning that 10 minute battle with your best customers. These don’t make sense for all customers, but make great sense for proven high-value customers.

1. Individually connect with your best 10,000 customers. How much revenue do they generate? Doesn’t it make sense to assign someone to build a bridge with them? Get two or three of your better salespeople, put them in a room, and have them spend the next month emailing, tweeting, and connecting with your elite customers. You know what they buy, their preferences, where they live, and with a little research, who they know. Use that to suggest specific items and services that will be relevant and follow up. Give your company a voice and really connect.

2. “No questions” guarantee with your best 10,000 customers. There are generally three ways that people buy – impulse, researched, and prompted. Researched purchases have swamped the other two methods, primarily because even impulse and prompted purchases go through a quick research cycle nowadays. For customers that you know will not take advantage of you, consider a “no risk to them” approach. That is, worry-free returns, price match and best price guarantees, improved warranty or service levels, that is, anything that will remove the element of risk in their mind. That way if a competitor prompts or impulses a sale, you stand a good chance of these customers taking the sale to you instead. And reduce the risk of the customer taking a sale you generate (through marketing or merchandising) elsewhere. Its a great way to reward customer loyalty.

3. Orient yourself around gift recipient personas. If someone walks into a store you owned and says they need a gift, what’s the first question you’d ask? “What are they like”, most likely. And then progress through a couple of questions to pin down what kind of person they are before making recommendations. So take that same approach in your preparation for the holidays, and arm your associates, your marketers, your call center, and anyone else touching the customer with a highly targeted guide to gift giving. Think of it as transferring the brain of your best salesperson to as many people as possible.

These are just a couple of ideas to improve customer retention this holiday, but the underlying assumption should be clear. Your top 1% customers account for (probably) 10-15% of sales. So use some of your budget to cater to their needs and ensure you keep them throughout the holiday.

[Editor's note: This post by Phil Rubin originally appeared on the Relevant Dialogue blog on October 12, 2009. We wanted to share it with our readers.]

The world we live and work in is all abuzz about social media and the increased prominence of brand initiatives. Even this morning, none other than The Wall Street Journal pronounced “The End of the Email Era“.

While we’ll save commentary for WSJ’s opinion that email is over (we don’t think it is, at least for many customers), the underlying issue is that marketing is much more complex than simply email, just as it is also about much more than social media. Whichever of these media channels or strategies is more or less important is a function of a customer, a context, a time, a place and a brand relationship. As was said long ago: not all customers are the same. Some may want brand friendships on Facebook some (many) don’t or won’t. Ditto for ads. (That’s why mullets were invented: business in front, party in back. Kind of like brands in email, real friends on Facebook? Hmmm…)

Two other pieces today caught our eye and they both underscore the complexity and associated challenges facing marketers today. One is fairly obvious though detailed in depth by none other than Peter Francese, founder of American Demographics and now head of demographic trends at Ogilvy. The conclusion in the promotorial piece in AdAge is that there is no average customer anymore. Perhaps this story will be on the network television news tonight.

The second and much more interesting story, also by coincidence in AdAge, is about a new report from our favorite Forrester analyst, Lisa Bradner. In this report, coming out next week, one of the things Lisa addresses is the important reality that companies and brand managers aren’t organized to effectively handle new media nor moving rapidly to adapt to, much less embrace, other new digital opportunities. Like technology and social media and customers that don’t fit neatly into demographic “target” audiences with labels like “A25-54″. Further, marketers need to be more able to do math and be able to develop and presumably use customer intelligence so as to be more accountable for results and be able to adapt and change course based on actual performance.

Now this is relevant and something we support.

From our perspective, there is too much discussion about what is and what isn’t dead or alive, and not enough discussion about customers. For marketers, customers are the essence of social media’s value. Perhaps it should be called Customer Media – because that’s who controls it, at least as far as brands go.

By Michael Greenberg | COO

Ever since the WSJ article on the end of email, its been a cage match between email service providers and social media/emerging technology. Hyperbole aside, this is just part of the natural evolution of technology. Ideas that were cutting edge become mainstream and eventually become background noise.

What makes this time so different from years past is the sheer number of channels for interaction. Its tempting to try and take on all of them, but unless you have a large team or superhuman skills, you won’t be able to put enough time and energy into each channel to get a good return.

So the key here is to pick your battles, find the channels that make sense, and put in the resources to make them work. We love what Express is doing on Twitter – focus, cadence, good content, personality, and fits naturally with the rest of their marketing and brand voice. We also love what Pink does on Facebook – it also has focus, cadence, good content, personality, relevance, and stays exactly on brand.

Brands can learn a lot from these examples. Success in the new (mostly) social channels comes from resourcing and focus more than anything else. Just check out Chris Brogan, who has become the foremost social marketing guru through sheer force of will…51,000+ tweets, over 100K followers. And he seems to have conversations with every single one.