by Mark Goldstein | CEO

No surprise that the real growth in payment types is in the debit and prepaid side of banking. Credit cards are increasingly feeling like ‘an old man’s product’ as the youth continue to use the debit card they were given at college, etc. The unbanked, non-resident population, and perhaps those with a blemished credit history, are seemingly gravitating toward some type of debit vehicle. The non-stop coverage this summer on excess credit card debt surely doesn’t help the marketing efforts for new credit cards either.

Read today’s article from Retail Wire.

by Joshua Tretakoff | VP, Account Management

Today’s Multichannel Merchant has a good article on a case study as to how marketers can use the various Web 2.0 and social media elements that are getting such press to tangibly build loyalty around specific products. In this case, they focus on the launch of last year’s Xmas hit, the Pleo toy dinosaur. By using a combination of online forums, Flickr, YouTube, Twitter, and other tools, they created a constant buzz in advance of the product launch that has continued well after, and translated into multiple referral and upsell opportunities.

Retail marketers are often jokingly referred to as “dinosaurs,” but it looks like we can all learn to leverage these exciting new tools to avoid extinction.

by Joshua Tretakoff | VP, Account Management

There are certain things that amaze me are still prevalent in this e-commerce/multi-channel Web 2.0 world.  The frustration of some e-commerce checkouts. The occasional lack of integration between a retailer’s web, direct and retail channels. But nothing amazes me more than the lack of good, relevant information in my order confirmation emails. This is prime real estate, folks! The customer just told you they like you, they like your products, and more! Upsell! Cross Sell! Introduce new brands or channels! Use less exclamation points!

Luckily, calmer minds than mine at DM News are laying out good roadmaps on how to really leverage your transactional emails. Some of the points I found myself simultaneously nodding in agreement and shaking my head in amazement: use HTML instead of text, for instance. As we say here: Ready, Aim…Engage.

by Joshua Tretakoff | VP, Account Management

Those little red carpets at the jet bridge have become the new symbol of elite flyers: if you are a loyal traveler, and have accumulated miles, it’s not about the free flights as much as its about making the flying experience as easy as possible with those little perks. Let’s face it: the travel industry has this approach down. Now imagine you could offer the same with your dining experience!

TGI Fridays is doing just that with it’s  Give Me More Stripes program. Join, and get a one time pass to skip to the front of the line. Get a free dessert or appetizer with your meal. And earn those points for dining more frequently. While I don’t particularly care for the physical card that they require, they offset it with the ability to personalize the card around your favorite adult beverage.

What’s really great about this program is that it distinguishes from your standard points program: it’s about eliminating the hassles of going out to eat, rather than just earning and burning.  I’d love to see other industries adopt similar approaches: retailers could offer dedicated checkout lines at key holidays and complimentary gift wrap; service providers could offer expedited appointments and guaranteed completion times; fitness providers could offer reserved times for uses of particular facilities or equipment.

It’s not about the points; it’s about the perks.

by Mark H. Goldstein | CEO

The retail paradigm continues to change. Its no longer OK to stack product and allow people to transact…not that this is a new observation but its a slightly different perspective for a geeky Silicon Valley guy.

The 50:50 Rule for Retail

by Joshua Tretakoff | VP, Account Management

A guy I used to work with often likened certain business practices as “driving down a dark country road, at night, at 80 MPH, with headlights that only see 5 feet ahead.” Not only was it fraught with peril, but you couldn’t even see what you had just hit, once you hit it. This thought came to mind today when I read the results from a new study from Retail TouchPoints and The Aberdeen Group, titled Responsive Customer Loyalty: Creating Customer Commitment in Retail.

Specifically, as RetailWire points out, “…the report makes it all too obvious that many retailers are still checking ‘don’t know’ and ‘don’t measure’ when it comes to key metrics around loyalty programs like churn, retention, and customer satisfaction.” Worse, it seems that 35 percent of retailers seem not to be measuring basics such as year-over-year same-store performance, basket size, and customer retention rates.

The good news is that the report seems to point to loyalty programs as a hope by many of the surveyed to start capturing this data. Now, let’s hope they start to make decisions from it as a result!

by David Rosen | Senior Vice-President

Like many Americans, my family and I look forward to the summer as a chance to get away from home and enjoy a well-deserved vacation. 

Given my fascination (obsession?) with loyalty programs in general, and travel programs in particular, I blindly embrace all hotel, car, air — and even train frequency programs that I come across — often without regard for my privacy and the sanctity of my hotmail inbox.

Why?  For the most part joining travel company’s guest programs yields a better experience — well at least that is the true test of value.  As I’ve opined in the past, I’ve pretty much given up on redeeming the points/miles/stays that I’ve earned, but have come to expect a higher degree of service and general consideration when I travel.

So, planning our trips this summer, I joined two more programs (I think this brings me past the 50 mark just in the travel space — I still keep my Western Airlines TravelPassII card handy just in case).  The first was Loews-First.  From a customer experience standpoint, this program rocks.  Easy to join, relevant fields — including questions tied exclusively to member benefits and preferences (which treat do I want when I check in?  What newspaper do I want in the morning) — what a great way to introduce me to the benefits before I’m even a member.  Submit and I have a number.

I get on the phone to book the room (I want them to match the rate that I found on Hotels.com) and the number is already in the system and the agent has all of my contact and preference information.  And to my “surprise and delight,” I’m already a “Gold” member which includes a free upgrade upon reservation.

Clearly, a well designed and executed program.

Next, I joined Amtrak’s Guest Rewards Program.  OK, I’m not a big rail traveler, I live in California but am headed to New England this summer.  Unfortunately, the program lacks connection to the larger Amtrak experience.  I had to replicate my registration on both sites, I’m receiving emails from both entities and I’m uncertain how I will benefit from the program — but again, truth in advertising, I’m in infrequent rail passenger, so I’m not the definitive source for measuring perceived value.

Bottom line, good lessons for any loyalty program design:

• Keep registration simple and relevant
• Ask profiling questions that communicate the program value while gaining real marketing insights
• Use registration as the first chance to reward – Give something for the Get
• Be fast, be connected, be multi-channel
• Use the program as the primary touchpoint between associates and best customers/guests/members

by Michael Greenberg | President

While perusing a short but interesting bit of research on multi-channel customer behavior by Opinion Research Corporation on Marketing Charts, I noted some interesting data that points out the difference between Loyalty and Value.

The chart shows the dollars spent with the subject company and with its most important competitor. Note how spending with the company increases as the number of buying channels increases:
1 channel - $44
2 channels - $51
3 channels - $62
4+ channels - $82
This is consistent with what most companies see.

But now if you calculate the share of wallet using both companies, the picture changes:
1 channel – 36% share
2 channels – 60% share
3 channels – 52% share
4+ channels – 48% share

Granted this is a fairly small sample size for this type of analysis, but some interesting questions arise. Which segment of customers should marketers target? Those with the most available wallet share (1 channel)? Those with the largest available to spend (4+ channel)? Or should you focus on migrating to multiple channels?

The answer depends on a variety of other factors, which I’ll address in other posts.

But by examining this basic example, you can begin to see how indicators of loyalty (share of wallet, net promoter score, year over year retention) aren’t always the same as customer value, and that the best options for high return on investment are found by looking at several factors, not just customer value.

 by Mark H. Goldstein | CEO

LiveNation gets to dump unsold concert tickets on out of town guests, Hiltons gets to rev its marketing and associate with good time rock n roll.

Rock N’ Roll This Summer on Hilton HHonors(R): HHonors Teams up with LiveNation.com to Give Members Complimentary Concert Passes to Live Nation Amphitheatres across the Country

 Hilton HHonors Members Earn a Complimentary Ticket to a Live
Nation Amphitheatre Event with Every Summer Stay

BEVERLY HILLS, Calif.–(BUSINESS WIRE)–June 19, 2008–
Hilton HHonors, one of the world’s premiere hotel loyalty programs, has announced a new promotion with Live Nation, the world’s largest live music company. The promotion allows HHonors members to earn a complimentary, general admission lawn ticket to a Live Nation amphitheatre concert, when they stay at a Hilton Family hotel between June 16 and August 31, 2008. All members have to do is register via the dedicated enrollment page HiltonHHonors.com/RockandRollSummer.

Registered HHonors members who stay at a Hilton Family hotel between June 16 and August 31 will automatically receive an e-mail with a redemption code good for a complimentary general admission ticket to any concert at a participating Live Nation amphitheatre (subject to availability). To get a complimentary ticket, HHonors members simply enter their code at LiveNation.com/Hilton and choose a concert. Members will also be able to purchase additional general admission lawn tickets at the time of redemption. There are no limits on the amount of complimentary tickets that can be earned or number of shows members can see.

Live Nation offers performances by some of the world’s greatest artists at amphitheatres throughout the continental United States. With many of its participating amphitheatres close to major cities like Atlanta, Chicago, Denver, Los Angeles, Philadelphia and Seattle, they are also just a short distance to Hilton Family hotels, allowing members to stay near the venue while earning their next complimentary ticket.

“Hilton HHonors is always looking for ways to enhance our members’ travel experiences, and this summer we would like HHonors members to be our guest at some of the season’s most exciting events,” said Adam Burke, Senior Vice President, Customer Loyalty, Hilton Hotels Corporation. “We’re especially proud of this promotion with Live Nation because it gives our members a chance to earn complimentary concert tickets in addition to points and miles with each stay.”

“Collaborating with Hilton HHonors is just another way that Live Nation can connect music fans to their favorite artists this summer,” said Maureen Ford, President of Sales, North American Music at Live Nation. “With a variety of Hilton Family hotel locations near Live Nation amphitheatres, it’s a wonderful way to reward Hilton HHonors members with an exciting live music experience.”

by David Rosen | Senior Vice President

I didn’t complain when domestic roundtrip travel rewards went from 20,000 to 25,000.  I didn’t complain when it became virtually impossible to fly on saver fares to Hawaii or Europe.  I didn’t compain when my United threshold bonuses were removed.  I didn’t compain when the 500 mile bonuses for using the easy check in kiosk or booking online were eliminated.

You see, I fundamentally understood how cost pressures, liability pressures, bankruptcy pressures were all contributing to lowering the perceived value of airline frequent flyer programs.  And I certainly understand that airlines no longer have to give an incentive for using the web or touching the screen at the airport.  I think we’ve all figured out those tasks by now.

But, now I hear that US Airways is removing the elite accrual bonus.  Now I’m mad.  Part of keeping me placated about the other hits to the programs was my inflated accrual rate.  Who cares if it’s 25% more miles to fly, I’m earning twice as many miles!

Will others follow suit?  Since American launched Advantage more than 25 years ago, there has been lock-step lemming behavior with every positive and negative program change.  I’m not optomistic.