Loyalty Lab Blog » Loyalty Programs

Two Trends I’m Watching Closely

David Rosen — Mon, 08 Mar 2010 23:14:10 +0000

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.

Tropicana Launches ‘Juicy Rewards’ Loyalty Program

Jason Hornik — Thu, 25 Feb 2010 02:40:26 +0000

By Jason Hornik | Senior Director, Product Marketing

Tropicana is the latest CPG brand to launch a loyalty program with the objective of adding value and building direct relationships with their consumers. The program offers incentives through a points-based system for purchases and touts 20,000 reward options from partner brands such as adidas, Harrah’s, Coleman, and TaylorMade.

The loyalty program represents one of the largest marketing investments ever by PepsiCo in the Tropicana brand. Points are awarded by entering under-the-cap codes at the Juicy Rewards Web site:
http://juicyrewards.tropicana.com

Marketing for the launch involves TV spots, product packaging, print and digital executions, as well as social marketing through blogs. Andy Horrow, Tropicana Chief Marketing Officer had this to say about the program:

“I don’t like to think of it as a marketing campaign, but as a platform that supports everything we’re doing. It’s a great way for us to get our customers engaged and our retailers excited.”

This is a bold initiative for the Tropicana brand and they had 10,000 consumers registered in the 3 days prior to the actual launch of their marketing push. We will definitely keep an eye on this program and report back on any roll-out results.

Hotels.com WelcomeRewards Changes

Mickey Neuberger — Fri, 19 Feb 2010 16:53:33 +0000

by Mickey Neuberger | VP Loyalty Strategy

6 months ago I wrote about Hotels.com WelcomeRewards Program: http://www.loyaltylab.com/blog/index.php/2009/07/give-your-members-rewards-they-will-use/

Unfortunately, the days of booking 10 $59 rooms and then redeeming the free night for a $400 room at a 5 star hotel are over.

WelcomeRewards Changes Effective March 9, 2010
- The value of the free night will be valued at the average daily rate paid for the 10 qualifying nights.
- The reward night can be used for a higher priced room than your WelcomeRewards credit value, but member must pay the room rate difference

WelcomeRewards really broke out from the traditional hotel loyalty programs like SPG, Hilton Honors etc. by shifting the value proposition. I never understood how they could afford the associated costs but, as a consumer, loved it. Even with the program changes,WelcomeRewards is very competitive. It’s going to be interesting to see if Hotels.com gives back some of the loyalty it stole from the SPGs of the world.

Please and Thank You Just the Tip of North American Coalition Loyalty

David Rosen — Mon, 15 Feb 2010 19:10:58 +0000

by David Rosen | SVP Strategy and Channel Development

Shane Koyczan’s slam poetry on YouTube landed him on the center stage of Vancouver’s opening ceremonies. Shane invokes a spirit of Canadian culture that I’m sure makes all Canadians proud of their heritage and should make Americans who have visited Canada appreciative of their national sense of being.

I began my career in Western Canada and felt immediately in-tune with Shane’s words. The Canadians that I worked with and befriended have tremendous respect for each other, for their guests and for a combined sense of working together. I’d contend that this is one of the reasons that coalition rewards programs like AIR MILES have been so successful over the years.

The question in my mind is why Americans (sorry those of us in the United States – Canada is part of North America too) have never (and in my opinion WILL never) embraced this all-for-one; one-for-all life benefit.

For those new to Canadaesque coalition loyalty, approximately two-thirds (Wikipedia) of Canadian HHs participate in the AIR MILES program. Essentially, members earn across a very wide coalition of retail, banking, energy, travel, etc. partners into a common accrual account with which they can redeem from a vast catalog. Sounds great. So why don’t we United Statesians get this?

My hypotheses:

• Too many people. The Canadian market is really at a sweet spot of sufficient critical mass while still small enough to achieve high rates of sustainable awareness.

• Too fragmented. In the United States, our sheer geographic and population size has led to far more commercial entities in each category. In addition to more national players, regional and super-regional players make building the ubiquity of the coalition really difficult.

• Lack of shared experience. Shane notes that Canada too is a nation of immigrants, but Canada, unlike the United States, Shane recognizes how Canadians choose to stand together. Just watch a couple hours of Hockey Night in Canada and you’ll see how an entire nation unites with common focus and pride.
With that said, I expect that we’ll see a grand attempt at launching similar programs in the U.S. over the next few years. Aeroplan’s (AIR MILE’s top competition in Canada) acquisition of Carlson Marketing may have been their attempt to build a beach head of outstanding talent in the U.S. for that investment.

Stay tuned.

Loyal Customers: the most important for tough times

Joshua Tretakoff — Fri, 12 Feb 2010 17:14:25 +0000

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.

The Number of the Beast

Joshua Tretakoff — Thu, 28 Jan 2010 19:52:03 +0000

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.

Social CRM Deserves the Spotlight

Jason Hornik — Thu, 28 Jan 2010 18:37:28 +0000

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

New CMO Council Study on Loyalty Programs

Mickey Neuberger — Wed, 27 Jan 2010 17:47:48 +0000

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.”

The Borders Coupon Blitz

Michael Greenberg — Tue, 26 Jan 2010 19:51:40 +0000

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.

Give Your Members Rewards They Will Use

Mickey Neuberger — Thu, 23 Jul 2009 00:02:54 +0000

by Mickey Neuberger | VP Loyalty Strategy

I just booked a free night via the Hotels.com Welcome Rewards Program. There were no restrictions, hidden fees, blackout dates etc. I booked what I wanted because I earned it. Such a welcome relief from the airline rewards that you can never use and the retail $10-off on a $100+ purchase that are worse offers than what is readily available by browsing the internet. Hotels.com has earned my loyalty.