Loyalty Lab Blog

Last Thursday, we hosted our annual Loyalty Summit in NYC.  This is the first time that we’ve taken the show on the road and were absolutely delighted with the level of interest from our current client base and many amazing brand marketers looking to learn more about what we do and how we’re changing the definition of loyalty marketing.

BTW, we’ll be putting on encore performances in Chicago (May 13^th) and San Francisco (July 22^nd).  We’d love to have you.  Registration is open for both events.  Click here to learn more and sign up.

The NY allowed nearly 100 experienced marketing and technology executives to dive deeply into a number of the topics that we address daily with our clients.  Rather than another “Loyalty 101” expo for those just learning about the basics, our roster of presenters brought approaches, examples and real-life lessons that the group could bring back to the office begin implementing right away.

Here’s what I learned.

The day began with Loyalty Lab’s CEO Matt Howland and President Keith Rose outlining what we see are the newest trends in loyalty and how Loyalty Lab continues to invest in accelerating how marketers migrate good customers to loyal customers to fanatic advocates of their brands.

Auren Hoffman, CEO of Rapleaf posed an interesting proposition:  “What if you could target those customers that had the greatest social influence?”  Rapleaf partners with Loyalty Lab to supplement members’ profiles with their social influence levels.  By explicitly targeting members who speak loudly and widely, Rapleaf is helping companies change how they proactively respond to these customers’ needs.  On our side, we fundamentally believe that great programs know where and when to go high-touch, but automates this personal attention in order to keep the costs realistic.

Reflecting on a once powerful brand, AOL’s EVP Ned Brody ask the group what would they do if they were in his shoes.  Ned’s part of a turnaround team at AOL tasked with stemming attrition and rebuilding loyalty after years of precipitous fall off of subscribers and subscription revenue.  Not surprisingly, most of group didn’t even realize the breadth of the AOL footprint, nor that fact that nearly everyone had engaged with at least one property in the past couple of months.  So what to do with what’s left of the 90% gross margin revenue stream?  Invest it in content and continue to provide compelling venues for not just the old-timers but new users as well.

Addressing one of our most frequent topics, Jim Manzi, the founder and Chairman of Applied Predictive Technologies reinforced one of our core beliefs – that rigorous test design methodology allows marketers to radically expand their creativity.  Essentially when the world is zigging and the followers are following; test and learn allows marketers to take chances that zag in the opposite direction and provides a level of analytic confidence to invest and implement.  With respect to loyalty programs test and learn is the core technique for determining overall program lift in an unbiased environment, but also allows marketers to experiment with specific offers, enrollment tactics and reward and redemption schemes.

Another area that we’re frequently addressing is the role of formal market research in loyalty program design.  Jeff Rosenblum, Co-President of Questus has been working with us for several years to develop techniques for testing program designs and user experience with actual consumers.  Jeff recognizes that loyalty research is tough – too many marketers ask the wrong questions and get answers that satisfy their preconceived notions (either positively or negatively).  Jeff was frank with the audience.  If you’re not willing to do it right, if you’re not willing to listen, then don’t invest in market research.  But if you’re willing to jump in, a few key insights may have incredible impact on funding rates, how benefits are structured and the overall member experience.

We were also treated to an A+ panel of marketers from a number of different categories.  Rich Beatty of CMG Partners assembled Cynthia Ricciardi (CMO of SiriusXM), Robert Birge (CMO at Kayak), Jeff Bedard (brand manager at Campbell’s Kitchen) and Margaret Hynes (Platinum Card product director at AMEX) to compare and contrast their definitions of loyalty in each of their vertical markets.  While each face different issues to solve:  initial activity, advocacy, retention – or in some cases merely data gathering; the one thing all the panelists agreed upon was engagement led to customer value and more engagement led to even greater value.  Whether that meant lower attrition rates, higher usage rates, more referrals – the key was get them and get them hooked and get them talking.

Finally, Mark Silva, Founder and Managing Director of Real Branding closed the day by presenting a couple of case studies on the social marketing mapping.  Mark has been on the forefront of helping brands rethink how they get their message out to large audiences.  Traditionally, brands like Unilever could buy their way to high consumer awareness through television advertising and newspaper coupons.  But today, Mark is helping brands launch multi-channel social campaigns that allow brand messaging to be captured and amplified through loyal consumers.

Want to learn more?  Our speakers have made their presentations available (send me an email for access david@loyaltylab.com) or come to Chicago in May.  We’d love to see you.

by Joshua Tretakoff | EVP, Services

The always flamboyant Lady Gaga.

Great observations in this blog post about how the flamboyant Lady Gaga has embraced key loyalty concepts to seize her brand and outlast the traditional “flash in the pan” that performers wrestle with. There are definitely correlations that many marketers can learn from:

• Give Fans a Name: these are not just “enrolled customers in the loyalty program;” these are ambassadors. The simple act of naming them as part of a movement has much more power than just a flat loyalty card number.
• Make it about something bigger than you: so many companies confuse “loyalty” with “points.” Lady Gaga embraces her fans, and they respond much more emotionally. Companies can tailor the program to be a personal experience for the customer, and see that same emotion.
• Develop shared symbols: if you have special pricing or incentives on products for Loyalty program members, tout it! Make them feel special, as well as making other customers want to join.
• Make your customers feel like rock stars: use your program to not just tout specials, but recognize individual members of your program. Develop a community, ask for their input!
• Leverage social media: this is a low cost, high ROI medium to truly cultivate a loyal customer base. It simply has to be part of your strategy to recognize, reward, and develop your best customers.

by David Rosen | SVP Strategy and Channel Management

In February 2007, a series of very, very long tarmac delays (most notably on Jet Blue flights departing JFK) ushered in a new awareness of passengers’ rights for food, functioning lavatories and generally a way off the plane in case of claustrophobic anxiety attack.  Laws were passed, fines were established and now we can count on every substantial delay due to weather, mechanical or other acts of congress being reported in real-time by well-connected bloggers.

Well a few weeks ago, it happened again.  A perfect storm of a blogger with a web cam and, well, a storm.

Virgin America flight 404 from Los Angeles to New York Kennedy (or as we airline geeks would say VX404 from LAX to JFK) departed L.A. on time on Saturday, March 13.  Due to poor weather, the flight was diverted to Stewart International — about 90 minutes north of NY to wait out the storm and get clearance for landing.

Stewart is a small airport, with limited gates, so VX404 was not given a gate, but passengers were allowed to leave if they chose and cases of water were delivered by the ground operations crew.  After several hours, a gate became available and the aircraft docked and deplaned.  When it became clear that JFK would not reopen in the near future, a bus was chartered to bring passengers to New York.

But that’s not the interesting story.  Sitting in first class, utilizing Virgin America’s wifi and “sharing” with his webcam was David Martin, CEO of a social media site that encourages its followers to upload videos or images of what they’re doing “right now.”  A perfect opportunity to promote his site as he experienced another episode of “Torture on the Tarmac.”  (probably of more interest was his cabinmate Carrie Ann Inaba — of ABC’s Dancing with the Stars 

The SF Chron documents the day nicely.

While VX did everything by the book with regard to the ground delay, what they did really well was addressing the blogosphere head on.  Here’s what impresses me:

Virgin actively encourages social media contribution — all of which they monitor and react to.  This allowed them to rapidly see what was happening and respond directly to the blogger.  Virgin America’s CEO, David Cush, personally reached out to Martin.

Next, Virgin leveraged its strong group of loyal travel bloggers to launch a counter attack.  In fact I heard of the events not from the news media, but from Cranky Flier’s Brett Snyder who wrote a blunt rebuttal to any criticism that may have been suggested about the incident.

In the end, Virgin did an outstanding job balancing the open, real-time nature of social media by quickly responding to blogger.  Unlike other airlines that allowed incidents to become Top 40 YouTube hits, Virgin America rapidly, appropriately and professionally dealt with a tough day and an even tougher situation.

The Loyalty Dogs Blog is written by employees of Loyalty Lab, including senior management and technology leads.  In our position, we see many trends and factors that influence our clients’ success, and we face many of the same challenges on a wider scale.

This blog is our chance to share what we’ve learned and help you better understand the worlds of SaaS and loyalty marketing.