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 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 Joshua Tretakoff | VP, Account Management

The Baltimore Sun reports today on a growing problem with the coupon industry in the Internet age: fraud. Hapless retailers, being plagued by reprints or outright mockups of coupons from the Internet, are frequently pushing back by banning the acceptance of coupons that are printed at home.

Like the waning popularity of mail in rebate programs, this has all the earmarks of a long-standing incentive mechanism that may be ripe for declining results from consumer backlash. Instead, I think we’ll see an uptick on the adoption of POS systems that use real-time customer lookup to see any coupons associated with a customer. For those that can’t afford the POS capital investment, loyalty programs will most likely fill the void: rebate programs are being phased out in favor of point acceleration in many electronics retailers, so I expect we’ll see the same with coupons if this keeps up.

by Mark H. Goldstein | CEO

If The Gap says TV doesn’t deliver a good marketing ROI, can you imagine what CPGs must really be thinking when they aren’t on the golf course at their big-wig ad agency’s private club?

Clearly, the big switch is on. Those TV dollars are flowing to Internet customer acquisition spends—–and finally trickling down to retention and loyalty budgets.

That $5M or whatever in TV spend—it might be missed a little bit. But imagine what $5M could do for your loyalty program? Imagine if you could spend an additional $2.50 over 2.5 million customers to get each them back into your store or to your site? That’s 3 big candy bars or 1 latte or 1/2 a t-shirt or 2+ music downloads! Imagine what your customers might irrationally do for that? For one thing, they’ll listen to you. And another, they’ll be that much more likely to re-buy or be won-back. Think about it.

by Mark H. Goldstein | CEO

Microsoft (not a Loyalty Lab client) bought innovative affiliate marketer www.Jellyfish.com last year—well, they put the money to good use. Their cashback service, live today, represents impressive execution. I am a fan of reward programs and this one is going to work. Consumers respond to winning and Microsoft has a unique offering now relative to Google, AOL and Yahoo that mainstream America will jump onto. Their Cashback service will begin to stem Microsoft’s market share slide and allow them to stay in the game while they debate the next best way to be competitive to Google. Microsoft’s ownership of Jellyfish ensured the Jellyfish team was focused on one important project: Make money for Microsoft assets. Buying Jellyfish was a smart way for Microsoft to have a great Cashback offer for Microsoft Search. M&A does work.

The WSJ sums up their foray:

Microsoft Offers Reward
Consumers Can Get
Cash for Purchases
Via Search Service
By JESSICA E. VASCULAR and ROBERT A. GUTH
May 22, 2008; Page B3
Microsoft Corp. announced a plan to pay consumers who buy items they find through the software company’s search service, the latest in a series of moves to gain ground on Google Inc. in the lucrative business of Internet search.
The idea to get consumers to use a search service by enticing them with financial rewards has been tried by companies before with little success. Microsoft, a relative latecomer to the search business, believes it can improve upon the concept by implementing it on a broader scale and by coupling it with new options for advertisers.
Microsoft Chairman Bill Gates announced the new service, Microsoft Live Search cashback, at the company’s annual event for advertisers. The program includes products from 700 merchants, including Barnes & Noble.com and Overstock.com. Consumers who buy items from participating merchants after searching for them and clicking on an ad can get a cash rebate via an online Microsoft account they create.
The offering is designed to help attract a greater share of commerce-related queries.
Microsoft also is hoping the program will draw new advertisers seeking a more precise return on their investment and choices beyond traditional models, such as paying every time an ad is viewed or clicked on.
Merchants who participate in the program will be able to select a variety of options for buying advertising from Microsoft, including paying Microsoft only when a customer completes a sale. Google has begun testing a similar model that calls for advertisers to pay Google only when a consumer completes a specified action, such as buying a product or filling in a form.
The Live Search rebates are set as a percentage of the purchase price of an item and vary among merchants. Users can find a 5% rebate on a $60 coffee maker or 2% on a $120 digital camera, for instance.
Ellen Siminoff, chairman of search-marketing company Efficient Frontier Inc., said advertisers are eager to test new models that can help them spend their dollars more wisely, but that a variety of tools already exist to help them calculate spending on the likelihood it will result in a particular action, such as a sale. She predicts marketers will spend more money on the program if it increases the number of searches through Microsoft’s search engine.
In April, Microsoft sites captured 9.1% of the U.S. search market, roughly flat from April 2007, according to comScore Inc. Google’s market share in the period rose to 61.6% from 56.1%.
Microsoft withdrew an unsolicited offer to buy Internet giant Yahoo Inc. May 3 but has floated a proposal that includes acquiring Yahoo’s search-advertising business, according to people familiar with the discussions.
The software company has tried to use financial incentives before to lift its share of the search market. In 2006, Microsoft tried a sweepstakes-like search service through which users could win prizes if their search terms matched those on a random list. Last year, it started its Live Search Club, in which users earn prizes for completing puzzles that involve searches.
The company’s latest attempt is based on technology and partnerships Microsoft acquired by buying comparison-shopping site Jellyfish late last year.

by Mark H. Goldstein | CEO

Nau (www.nau.com), my favorite new retail brand has gone belly up.
I was friendly with management-so it’s a gray day. I loved their passion for eco-affairs and their merchandise…style and fit-wise and their out-there merchandising ideas. But, they were too way out-there. Their desire to change the world, change how products were sold, change how products got fulfilled to the customer AND change the athletic-wear paradigm–from pure performance to a combination of luxury and performance—IT WAS WAY TOO MUCH! Lesson learned, change comes a bit more organically and changing the world takes lots of capital, lots of time and lots of luck.

by Joshua Tretakoff | VP, Account Management

Today’s Wall Street Journal article summarizes the hot retail loyalty trends, almost all of which are being used by Loyalty Lab clients today. My favorite point is the one about physical loyalty cards: so many prospects and clients instinctively want the branding opportunity in the customer’s wallet, yet almost all forget that the consumer simply doesn’t carry them, and prefers an alternative identifier, like e-mail address.

In any case, if the Journal says it, must be so, right?

Loyalty Works Quickly

By KELLI B. GRANT
April 27, 2008

Rising food and oil prices combined with a downward spiraling economy have spurred consumers to spend less time shopping and more time managing their bank accounts.

One way retailers are hoping to get customers back into their stores is by offering all sorts of new rewards programs and in-store bonuses to their most loyal customers. Here are five recent trends shoppers should take advantage of:

Immediate rewards. Make sure to sign up for any free loyalty program you’re offered, even if you aren’t a frequent customer. As soon as you sign up, you could start reaping the rewards. Wyndham Hotels and Resorts recently expanded its Wyndham By Request program to include third-party loyalty program TripRewards.com. Guests now receive free high-speed Internet and long-distance telephone calls on their first three stays, and also earn 10 points per dollar spent on room rates and in-room charges.

Targeted deals. Retailers are targeting their regular shoppers with customized incentives based on information like their personal shopping habits. Barnes & Noble, for example, regularly notifies shoppers via email when books by authors that they’ve bought in the past go on sale. And Old Navy has begun sending out “Birthday Month” deals offering members $10 off a purchase of $50 or more as long as they make the purchase during the month of their birthday.

Souped-up membership cards. Although the average household has a dozen loyalty memberships, almost half of all consumers carry just one or two store membership cards with them, according to Consumer Reports. Knowing how hard it is to become the card that shoppers carry religiously, retailers are getting creative with the way their cards work.

Loyalty marketing firm Chockstone, for example, has introduced technology that links retailer-loyalty programs to a consumer’s credit card. When a shopper uses their credit card at a participating store, their membership status is automatically recognized and points or rewards are instantly added or awarded. Subway, and Seattle-based Tully’s Coffee, both say they plan to start using Chockstone’s technology soon.

Manufacturer rewards. Manufacturers are also courting faithful customers, offering discounts via their e-newsletters and rewards programs. The beer giant Miller Brewing recently launched a loyalty program that offers rewards points to frequent customers. All members have to do is enter the code listed on specially marked bottles or cans on the company’s MillerHighLife.com site to redeem for merchandise. (A backyard BBQ pit, for example, will set you back 31,000 points.)

Point-earning partnerships. Retailers want to be front and center with customers, even if the customers aren’t purchasing their products, says Michael Gatti, executive director of the National Retail Federation’s Retail Advertising and Marketing Association. That has led to a growing number of partnership programs between retailers and online shopping portals, where consumers earn points from one retailer that they then can use to shop at another. Jet Blue has partnered with Points.com, a program that allows consumers to swap points among loyalty programs, as well as purchase or donate points and miles outright.

by Mark H. Goldstein | CEO

Moosejaw, my clear #1 outdoor retailer website (with Altrec at #2 and Backcountry fading but holding on at #3) is pushing PayPal at its in-store kiosk. Expect REI and other big boxes to follow with making PayPal a featured check-out option. AND….Don’t expect PayPal parent eBay to not aggressively push for PayPal everywhere either…PayPal is now one of the favored payment choices for the ‘card carrying’ generation aged 35 and younger.
Traditional credit card providers and stores need to recognize this and add more relevant perceived convenience and reward value to their card services. This doesn’t mean offering low-cost debit options to compete with PayPal, IMHO—it’s too late for that. PayPal has critical mass and owns the peer-to-peer payments world. It likely means continuing to add web and service innovation at the edges that directly appeal to today’s younger buyers and influencers….it also means lots of experimentation with mobile payment and bar code technologies. Don’t expect immediate success but by not experimenting, established card firms are far more likely to miss it when critical-mass adoption takes off.

by Joshua Tretakoff | VP, Account Management

Always nice to get public validation on basic functions: nice article in Internet Retailer about the success of targeted email from Bath & Body Works.. Targeted Email is often undervalued, since email is so cheap to blast out. However, targeted emails produce dramatically higher results, and usually can be the difference between someone reading your email, or hitting the old delete button.

Loyalty’s not always about points; its about relevance and connection. How you speak to your loyal customer can be as important as how you reward them.

by Joshua Tretakoff | VP, Account Management

Nice article in yesterday’s Wall Street Journal.com on loyalty programs, and the fact that retailers are really innovating in them. Take note: it’s not enough just to “build it and they will come.”

Where to Find
New Rewards
At Retailers

By KELLI B. GRANT
SMARTMONEY
April 2, 2008; Page D3

Retailers are hoping to get customers back into their stores by offering new rewards programs and in-store bonuses to their most loyal customers.

For example, last month, coffee giant Starbucks Corp. rolled out a rewards program that offers members extras including free coffee refills and two hours of in-store Wi-Fi wireless Internet access.

Here are five trends shoppers should take advantage of:

Immediate rewards. Wyndham Hotels and Resorts, a unit of Wyndham Worldwide Corp., recently expanded its Wyndham by Request program to include third-party loyalty program TripRewards.com. Guests now receive free high-speed Internet and long-distance telephone calls on their first three stays.

Targeted deals. Loyalty clubs often offer members access to exclusive sales and coupons. Now retailers are taking it a step further by targeting their regular shoppers with customized incentives based on information such as shopping habits.

Barnes & Noble Inc., for example, notifies shoppers via email when books by authors they have bought in the past go on sale.

Souped-up membership cards. Knowing how hard it is to become the one card that shoppers carry religiously, retailers are getting creative with the way their cards work.

Loyalty-marketing firm Chockstone Inc., for example, recently launched technology that links retailer-loyalty programs to a consumer’s credit card. When a shopper uses the credit card at a participating store, their membership status is automatically recognized and points or rewards are instantly added or awarded.

Manufacturer rewards. Manufacturers also are courting faithful customers, offering discounts via their e-newsletters and rewards programs.

Point-earning partnerships. A growing number of partnership programs between retailers and online shopping portals let consumers earn points from one retailer they can use to shop at another.