Loyalty Lab Blog

by Joshua Tretakoff | VP, Account Management

Here’s a common refrain we provide when discussing loyalty programs with clients and prospects: the average North American wallet has 6-8 slots for cards. One is taken up by a driver’s license; one is occupied by your ATM card. 2 others are typically taken up by major credit cards. That leaves 2-4 slots for everything else. So, in designing a loyalty program, and making a physical card a requirement, why do you think that your card will make the cut? Let’s assume a grocery “loyalty” card takes up one. How about a Costco or Sam’s Club membership? That leaves room for almost…none. Is it any wonder that many people use an alternative identifier instead of the physical card?

Here’s another idea: using the hot new iPhone, one smart Dutchman has scanned in his lesser-used cards as images, allowing the barcode on each to be clearly read by scanners. Thus, he’s created a wallet of infinite size. Sure, he gets a few strange looks when he presents the “card” to be scanned, but hey, saves on wallet wear and tear, right?

The next step is clearly to have a company embrace this “trend” and start offering iPhone and Blackberry versions of their cards. Best Buy and more gadget-focused retailers and service providers, are you listening?

by Joshua Tretakoff | VP, Account Management

Many of our clients focus on new and innovative ways to connect with their loyal customers, as part of the strategies we help craft for them. One surprisingly underused way is the mere peeling back of the inner workings to expose the thought process through running blogs. Movie makers, such as Peter Jackson and Bryan Singer have been doing this for years, making the fans feel like they are part of the process, and building up hype, to boot.

This week, the big retail daddy of them all, jumped in: Wal-Mart now has a Blog for their buyers to express their thoughts on upcoming items, reviews of current items, and more. The Blog, like most effective blogs, is surprisingly frank. RetailWire, for instance, highlighted one of the Blog entries about a buyer regarding Microsoft Vista: “Is it really all that and a bag of chips? My life has not changed dramatically – well, for that matter, it hasn’t changed at all.”

This combination of honesty, insight, and sheer information can have a dramatic effect on the customer’s loyalty. Wal-Mart already faces intense competition, and has been known for more aggressive tactics to combat it; this more comprehensive view is one that, frankly, I wish more clients would embrace: you can never go wrong by being honest with your customers, and the more your customers understand about how hard you work to deliver the great values, the more loyal they will be.

By Mickey Neuberger | Senior Director, Loyalty Strategy
Just a quick plug to a recent white paper I wrote providing a high-level framework to help marketers design loyalty programs based on their businesses. Click here to read.

By Joshua Tretakoff | VP, Account Management

How often do you see rewards programs with a reward that is actually fun? Think of it: many programs are “aspirational,” as you earn towards a goal. But what makes programs really stand out are the fun extras: contests, giveaways, sweepstakes; all introduce a level of engagement that really elevate above the fold.

For instance, take these three examples:

1. AirTran Airways dressed up gate agents as Danica Patrick, the Indy Car race driver, to promote a sweepstakes, exclusively for members of their frequent flier program, to watch a live race from Ms. Patrick’s own pit crew.
2. JetBlue celebrates their eighth year flying with a giveaway of 800 free roundtrips, exclusively for TrueBlue members. The name of this promo? “All You Can 8.” Groan.
3. Red Lion Hotels is offering a Leap Year promotion for loyalty program members: make reservations for Feb. 29, and get 2900 bonus points, a 29% discount on the room, drawings for prizes every 29 minutes…and a free pair of slippers.

Where does it say these programs all have to be boring? Mark, our CEO, has long been an advocate for the wild promotions, and he’s got a good point. Your program is only as good as how much value your participants place on it. With Loyalty Lab’s new Ready, Aim, Engage approach, these types of engagements are the ones your customers are sure to remember, not how many points they earned last week. The key is a combination of good value proposition, excellent communication, and excitement.

Now, please excuse me, I’m off to try to meet Danica.

By Joshua Tretakoff | VP, Account Management

It seems the news is filled with the concept that we are headed for a recession. Obviously, that kind of news usually does not incentivize a customer to buy more. But take a look at the image below; it’s from an email I received from a national cycling retailer. They look at this as an opportunity to engage their loyal customers. But note the tactics they employ:

- A personal-style letter, expressing understanding and sympathizing.

- Emphasizing the loyalty program as a benefit of their already smart patronage. Almost to say “We know it’s tough, but look at the benefit you already have over someone new.”

- A focus on savings.

Nice to see a retailer using loyalty in a topical, focused way to communicate effectively. This retailer’s normal strategy is to blast with flashy graphics about how cheap they are; this classier approach emphasizes belonging and has a more personalized feel to encourage the customer.

by Joshua Tretakoff | VP, Client Services

We get a lot of folks who are asking about the ability to use Loyalty Lab’s amazing targeting and dynamic content to populate transactional emails. You know, those emails you get from a system when you’ve placed your order, with the order details? The theory goes that, since these are about specific orders, they will be much more influential than traditional email marketing. Good theory, but DIRECT Magazine sounds a cautionary alert for those who might take it too far.

by Joshua Tretakoff | VP, Client Services

Offered as a different perspective to David’s praise of Clear.

I travel often to visit clients, train teams on the usage of our platform, and more. In my last few trips out of the San Francisco Airport, I marveled at three things:

1) It is now a reasonable concept to get from downtown to SFO in less than 30 minutes, for less than $6 (thank you, BART).

2) It is a decadent treat to be able to pick up some of SF’s fabled Dim Sum right in the airport (thank you, Fung Lum).

3) It is now possible to sign up for a “FasTrak” for airport security, allowing you to go to the head of the line, for $100 a year. (thank you (?) GE).

This last one was interesting. Called Clear, the service, on the surface, makes perfect sense to frequent travelers: pay a fee, get prescreened by TSA, record some biometrics, and zoom! No more waiting. Kiosks liberally sprinkled around the airport, usually near First Class check-in, and staffed by 2 attractive, friendly and professional staffers, add to the allure. One of our team already is a Clear card-carrying member, and with the value proposition, why not?

Here’s an example of a compelling hook of a loyalty program that can be derailed by the details behind the program. First, the value proposition itself: it’s not, as is marketed by those kiosk staffers, a “FasTrak” for airport security. You can’t simply bypass the TSA at the checkpoint. Instead, you meet a Clear “concierge” who escorts you to the front(ish) of the security line. Not the First Class security line, mind you: that’s determined by your ticket. In a recent flight, without Clear, my wait time from entering the line to getting to the same spot a Clear member is escorted to was 2 minutes. That means that, if I fly once a week for a year, my net savings from Clear is 208 minutes. That works out to a little over $2 a minute. Ouch. Compare that to the cost of a typical inflight movie ($5): that works out to about $0.05 a minute. Yikes.

SFO can occasionally have longer wait lines, so perhaps the cost comes down to about $1 a minute at worst. Where does this help? When you are running late to a flight. Will you spend $10 if you see an extremely long line to bypass most of it? You bet.

Now, here comes the 2nd potential underminer. The service is currently only available in a dozen airports. Conspicuously absent? Chicago. Atlanta. Washington DC. Seattle. Dallas. Los Angeles. Ouch. Airports that are included? Luckily, if you’re heading to Albany, you’re golden. Little Rock? You’ve got it. To be fair, all of the New York airports are included; even Westchester. But the commonalities of these airports are interesting: they either already have high throughput (NYC, SFO), or are not highly trafficked (Little Rock?). In those locations, how much will Clear actually help?

With those details, this loyalty program looks to have a lot of future churn. They are clearly betting long on the odds that rapid enrollment growth will sway other key airports and perhaps convince TSA to allow further express options. But their target demographic will only briefly tolerate the letdown in promised services; they won’t renew. This means Clear will have to spend more to retain these members…for what is supposed to be a membership program!

Look at your hook: if your program is designed to add benefits over time, and is hampered by restrictions at first, and your primary goals are to build membership and generate revenue, turn your negatives to positives. Market the opportunity to be among the first to benefit. Experiment with introductory pricing or incentives (hey, Clear: how about some frequent flyer miles?) to generate the enrollment and offset future cancellations. Offer aggressive incentives for long term lock-in. Instead of spending big money to market a limited service to a broad market, target your marketing to people who’ve booked certain routes with airlines to the cities you DO service, for instance. And invite your early adopters to be part of the program’s evolution: offer forums for people to give objective feedback, and even rate one location over another.

The best programs offer an easily understandable value proposition, an incentive to join, and reinforcement. Maybe this will soon become Clear?

by Joshua Tretakoff | VP, Client Services

Interesting article in today’s Promo Magazine e-newsletter. Traditional loyalty programs reward you for purchases or ongoing spend, but increasingly, we’re seeing clients who understand there is so much more value to be derived from a loyal customer. Take SpiffyBaby, for instance: their program not only offers credit for dollars spent, but also for reviews of the products purchased. Simple, straightforward, and valuable.

Loyalty Lab has partnerships with leading review providers for our clients, such as BazaarVoice, for just this reason. As reviews establish credibility and encourages customers to buy, integrating reviews and feedback into your loyalty program is a no-brainer. After all, your most loyal customers will be the most trusted reviewers, right?

by Joshua Tretakoff | VP, Client Services

Interesting article over at 37 Signals on 5 Business Lessons from Costco. One “lesson” in particular sparked my interest:

5. Use surprise to create excitement.

Mr. Sinegal, who is 69 but looks a decade younger, also delights in not tilting Costco too far into cheap merchandise, even at his warehouse stores. He loves the idea of the “treasure hunt” – occasional, temporary specials on exotic cheeses, Coach bags, plasma screen televisions, Waterford crystal, French wine and $5,000 necklaces – scattered among staples like toilet paper by the case and institutional-size jars of mayonnaise.

The treasure hunts, Mr. Sinegal says, create a sense of excitement and customer loyalty.

It’s remarkable how the day to day simple understanding of human nature always catches your attention. At Loyalty Lab, we focus on working with clients to help them understand that their loyalty program is not always about points or the accumulation of rewards, but about the most important motivators: fun and excitement. In many cases, it’s far more interesting to see what’s in store for you when you don’t know what to expect (keep those massive jars of smoked almonds away from me!), than how many points you’ve earned. The combo is the key.

Go have fun, and take your customers with you!

by Charles Hacskaylo | Chief Creative Officer

Ever notice how you never, ever, see a HTML form in email? Wouldn’t it be great to send a mini-survey to people in an email, and have their answers posted to your database with the push of a “Submit” button? Why doesn’t anyone do that? The short answer is: you can’t. The slightly longer answer requires a little more exploration.

There are two major factors to consider in answering our question, first: our online world, especially with regard to email, is more security conscious then ever. People are already terrified of getting viruses via their email, of getting phished, scammed and having their identity stolen. So the email clients, such as Outlook, Gmail, MSN Hotmail, Yahoo mail, Thunderbird, and literally hundreds of different webmail applications all implement their own strategies to make their email as secure as possible. Which brings me to the second major factor: unlike web browsers, which at least have the W3C to provide standards definitions on how HTML should be parsed and rendered, there seem to be absolutely no standards on how email security should be approached. So everyone seems to go after this holy grail with differing methods.

After Googling this subject for hours and only finding bits and pieces of the answer, I did a quick test: I put a very simple HTML form with an input box, a select pulldown and a Submit button into an HTML email. I sent it several email accounts I hold. Here’s what happened:

• Gmail: allowed the form to render properly. I could enter text, pull the pulldown, and click the button. But upon submitting the form, I received a security notification from Gmail, and then none of my data made it out. Strike 1.
• Yahoo Mail: same as Gmail. Strike 2.
• Outlook: did not render the form elements, at all. No input field, no pulldown, no Submit button. Strike 3.
• Our corporate webmail system: Same as Gmail for rendering, but when submitting absolutely nothing happened, no data made its way out.

From my previously mentioned Googling, Hotmail seems to disable any forms in email, by removing or rewriting the post method declaration. I haven’t tested Thunderbird or AOL, but at this point I’m willing to bet good money that both will disallow forms in email in some fashion.

I’m willing to concede that there may be a way to add a form to an email that does work, but will bet that solution won’t work for other clients. The bottom line is that forms in email are completely unreliable, due to the lack of any standards around email client security implementations.

So is this bad? Should we rise up and demand of our email client developers the ability to easily spam people with questions in forms? I say no. I believe that people still perceive email as a personal communications medium, akin to a phone conversation. The fact that this medium has been subverted by untargeted email blasts and spam just pisses people off and makes them even more security conscious.

At Loyalty Lab, our system is based on the idea that your email communications with your customers should be targeted, relevant and therefore comfortable for the recipient. We recommend asking your customer for their interaction with a clear call to action, linking to an online form, and offering them a reward when they respond. Our system allows you easily do all these things, reliably. This allows the customer to control the situation and feel empowered. This in turn will increase their positive perception of you and your company, with ultimate benefits for you.