Loyalty Dogs Blog

by David Rosen | SVP Strategy and Channel Development

I’ve been following two trends that make me very excited to be a Loyalty marketer. Developing high-value, enduring relationships with loyal customers/guests/shoppers/members isn’t new. But what were starting to see on forefront of smart marketing is simply awesome.

Trend One – Farm Cash for Fans.

I used to work at a company called MyPoints. It’s an amazing marketing engine that could change the behavior of hundreds of thousands of members by offering points in exchange for purchases, registrations, surveys, etc. Problem was, points are expensive. Basically it costs about ten dollars to reward a member with a ten dollar Starbucks card. And we mailed a lot of Starbucks (and Target, and Red Lobster and Macy’s and Amazon, etc. ) cards.

Last week players of Zynga’s amazingly popular game Farmville were offered Farm Cash for fanning Bing. Twenty Four hours later, 400,000 virtual farmers had taken the bait and signed on. In a flash, Bing surpassed Google in the hyper-followed ranking of “how many fans do you have on Facebook” stat.

And guess how much Farm Cash costs Zynga? A lot less than a $10 Starbucks card I’d guess.

Trend Two – Check In and Earn Points.

I’ve been watching for this one for some time. The very cool fro-yo shop Tasti D-Lite is now offering loyalty points when its members check in on Foursquare. Cool on so many levels: drives engagement, posts to Facebook – and more interestingly begins the process of geo-based permissioning for offers.

I strongly believe that location is the next frontier for right offer at the right time to the right person. However, geo-based targeting really does bump up against the marketing creepy factor. Loyalty programs bridge that gap by establishing a fundamental permission level for members and rewarding that additional permission with some type of gift or reward.

More to come on this one and we’ll make sure that we’re driving what happens next.

by Joshua Tretakoff | EVP, Services

Been to the local GameCrazy lately? If you answered no, you probably are not a member of their PowerPlay program, but if you are, you received some surprisingly good news. Movie Gallery, the parent company of GameCrazy, Blockbuster Video, and more, has filed for Chapter 11. However, unlike other prominent retailers who have endured this, one of the first things Movie Gallery did was petition the Court to allow them to keep operating their loyalty programs, and even expand them (PDF link).

This should become standard practice for companies who’s fortunes need adjusting: the first order of business needs to be taking care of your best customers. In the past, retailers like Bombay Company, Circuit City, and more have done precisely the opposite by refusing to honor gift cards or stored value cards; they made an already uncertain customer immediately furious, ensuring that Chapter 11 would quickly become Chapter 7. Now, I don’t have a crystal ball on Movie Gallery’s future, but the very fact that they recognized that they have no hope of recovery without holding on to their best customers is a great sign.

Deep within the document is truly the most remarkable nugget:

We are also introducing new enhancements to our customer programs, including our “True $” discount program, which enables PowerPlay members to rent movies in our Core Collection for $1.

That’s right: they not only are continuing their loyalty program, but expanding it with new options that are designed to generate additional revenue at attractive savings for their best customers. When is the last time you heard about a bank in need of a bailout offering you, a longtime customer, an incentive to keep banking with them instead of raising your fees? Or a car manufacturer, desperate for a sales spurt, contacting customers who purchased in the last 4 years and offering them discounted service on their purchase for the next 4 years if they buy a new car? Kudos, Movie Gallery: your best customers thank you.

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.

[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 Joshua Tretakoff | EVP, Services

Retailers are often loathe to make significant changes to their loyalty programs for fear of customer backlash. However, with recessionary times and the tough retail climate, more and more retailers are taking advantage of the opportunity to introduce changes. The Wall Street Journal’s SmartMoney has a good breakdown of some, and what the changes will mean. Worth a read.

by Joshua Tretakoff | EVP, Services

When you say the term “loyalty program,” most people think of one thing: frequent flyer programs.  In comparison to, say, a retailer’s loyalty program, most people think that’s another type that’s much smaller. Yet word comes today of a surprise: Retailers are now the top loyalty marketers, according to DIRECT magazine.

How big is the divide? According to the study quoted:

“…across-the-board retail loyalty program memberships now number 701 million, representing 39% of the U.S. loyalty market. That compares to 556 million in travel-hospitality, which includes airline, hotel, gambling, car rental and cruise programs, representing 31% of the market, and financial services credit card programs at 422 million for 23% of the market.”

In these challenging economic times, there’s clearly an upward trend here, and Loyalty Lab is proud to work with the lion’s share of retailers, including Sears, Kmart, Nike, Nine West and more. Of course, since we also provide services for travel-hospitality (Virgin America) and financial services (HSBC), we seem to have a well-rounded sampling, and we learn from all of them, and they learn from us. Nice to see a fresh segment atop the loyalty pyramid!

by Matt Howland | President

Our Free Trial Offer to qualified companies kicked off yesterday. Since most (if not all) SaaS companies offer a “try before you buy” option we decided it was time for us to do the same. The trial includes bringing real data so companies can see how it would look using real information, run real reports, and segment and message to real customers.

Part of what makes this so interesting is our ad hoc reporting capabilities. We’ve figured out how to turn client data into a scalable, incredibly powerful reporting environment, and we think a lot of people will find it a huge upgrade over existing options.

When you get down to it, the companies we talk to want to collect customer information, understand cross-channel behavior, actively engage, segment intelligently, and automate outbound messaging. That’s what we do, with a loyalty management option for those who want it. Enjoy.

by Joshua Tretakoff | EVP, Services

A lot of clients we’ve worked with focus on rewarding customer shopping behavior. Some are starting to go outside that, broadening the appeal of their programs to award customers for reviews and social networking. H-E-B, a San Antonio-based market chain, decided to increase the appeal of its program by focusing on some issues that are important to its customer: reducing traffic and waste.

Starting tomorrow, Houston residents who sign up with H-E-B for the Commuter Challenge will be able to earn $5 off every $50 in groceries when they earn points by “taking cars off the road.” They’ve teamed up with a third-party company, NuRide, to track the points earnings, and will be encouraging all shoppers to earn jointly towards the goal of “conserving” 15 million miles.

A revision to a loyalty strategy that involves tangible earnings, core customer values, and a joint participation goal? Sounds like a winner to me.

by Joshua Tretakoff | EVP, Services

Consumer Goods companies are feeling the pinch of the tough economy; after all, their customers are less inclined than ever to spend money. But an excellent article in Promo this week calls out a prescription for how CPG’s can save money and defray the effects. Not surprisingly, Loyalty is the primary recommendation. Highlights:

•  Reward Your Loyal Customers not all customers are alike. Every brand needs new customers plus a loyal base of established customers. Identify and reward loyal users as an ongoing standard operating procedure.
• Encourage Repeat, Referral and Word-of-Mouth Marketing Listening and talking to your customers can be an invaluable asset in spreading goodwill and developing the “buzz” about your brand. Be proactive with customer service to engage and reward customers. You can turn them into brand ambassadors.
• Turn Your Web Site Into a “Go To” Destination With more consumers online and younger customers not consuming traditional newspapers and magazines, you need to make your Web site more fun and more valuable.
• 80/20 Rules Still Apply Eighty-percent of your business comes from the top 20% of heavy users. Focusing efforts and rewards against this heavy user group can reap huge rewards. Nurture these customers, listen to them and reward them—they are your VIP’S.

by Joshua Tretakoff | EVP, Services

Nine West has just launched their Loyalty Lab-powered program, Nine Loves, and you can sign up today.  Valid in any of the hundreds of Nine West stores, on NineWest.com, you earn 10 points for every dollar you spend on the shoes you love today. Plus, you get birthday gifts, possibilities for free shoes, and more!

We’re not usually ones to talk about our great clients here, but this one is irresistible. While we know the program is going to a big hit with the great Nine West customers, we look forward to seeing the new customers who join as a result!